GEE Group(US:JOB)2022-12-21 19:19Financial Data and Key Metrics Changes - For fiscal year 2022, the company reported revenue of $165.1 million, an increase of 11% compared to $148.9 million in fiscal 2021 [8][5] - The fourth quarter revenue was $41.5 million, showing a slight increase compared to the same quarter in fiscal 2021 [8] - Gross profits for the fiscal year were $61.7 million, with a gross margin of 37.4%, while the fourth quarter gross profit was $15.1 million with a margin of 36.3% [17][5] - Non-GAAP adjusted EBITDA for fiscal 2022 was $12.5 million, up 2% from fiscal 2021, with a margin of 7.5% [6][22] - The company achieved a net income of $19.6 million for fiscal 2022, compared to a near breakeven result in fiscal 2021 [20] Business Line Data and Key Metrics Changes - Contract staffing services contributed $138.5 million (84% of total revenue) for the fiscal year, while direct hire placement revenues were $26.6 million (16%) [9] - Contract staffing services revenues increased by $8.7 million (7%) year-over-year, while direct hire placement revenues rose by $7.5 million (39%) [10][11] - Professional staffing services, including both contract staffing and direct hire placement, accounted for 90% of total revenue, with revenues up 13% for the fiscal year [13][14] - Industrial staffing services revenues decreased by 8% for the fiscal year, attributed to pandemic-related conditions [15][16] Market Data and Key Metrics Changes - The demand for professional staffing services increased as the negative effects of COVID-19 lessened, leading to higher revenues in direct hire placement services [12] - The company noted a shift in hiring patterns, with full-time hires decreasing and contract hiring expected to increase during economic downturns [46][49] Company Strategy and Development Direction - The company aims to maintain a strong liquidity position with no outstanding debt and a focus on judicious cash management [27][30] - Discussions regarding stock buybacks are ongoing, with plans to address this after the earnings release [41][44] - The company is optimistic about future growth despite potential macroeconomic challenges, indicating a strategy to adapt SG&A expenses based on revenue fluctuations [50][65] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic uncertainties, citing past experiences during recessions [55][56] - The outlook for fiscal 2023 is cautious, with expectations that full-time hiring may not reach the levels seen in fiscal 2022 [58][62] - The company is actively recruiting talent, particularly from layoffs in the tech sector, to strengthen its workforce [60] Other Important Information - The company reported a working capital ratio of 2.7 to 1 and days' sales outstanding (DSO) of approximately 49 days [24] - Positive net cash flow from operating activities was reported at $1.4 million for the fourth quarter and $9.2 million for the fiscal year [25][26] Q&A Session Summary Question: Why was EBITDA lower and what caused SG&A to increase? - SG&A increased due to accrued additional incentive compensation and bonuses for outstanding performance [35][36] Question: Is there stock manipulation observed with large trades? - The company is unaware of any manipulation and does not have a large short position [40] Question: What will be done with the large cash position? - Discussions on stock buybacks are ongoing, and the company is not in need of cash for working capital [41][44] Question: How will recession affect the company? - The company expects to manage cash flow effectively during downturns, as staffing companies typically collect cash faster than they spend on payroll [55][56] Question: Will the company activate a buyback? - The company is considering stock buybacks and will address this after the earnings are digested [52][53] Question: What is the outlook for direct hire? - Direct hire business is expected to be at levels similar to fiscal 2018 or 2019, with a decline from the high levels of fiscal 2022 [62]