GEE Group(US:JOB)2025-12-18 17:00Financial Data and Key Metrics Changes - Consolidated revenues for Q4 2025 were $23.5 million, down 10% from the prior year, and $96.5 million for the fiscal year, also down 10% [11][12] - Gross profits for Q4 were $8.4 million with a gross margin of 35.8%, while for the fiscal year, gross profits were $33.4 million with a gross margin of 34.6% [5][12] - Loss from continuing operations for Q4 was $613,000 or $0.01 per diluted share, and for the fiscal year, it was $34.7 million or $0.32 per diluted share [6][16] - Non-GAAP adjusted EBITDA was negative $306,000 for Q4 and negative $1.2 million for the fiscal year, showing improvement compared to the prior year [5][17] - The company had a working capital ratio of 4.1 to 1 and positive free cash flow of $533,000 for the fiscal year [17] Business Line Data and Key Metrics Changes - Professional contract staffing services revenues for Q4 were $20.4 million, down 11%, and for the fiscal year, $84.7 million, also down 11% [11][12] - Direct hire revenues for Q4 were $3.1 million, down 9%, and for the fiscal year, $11.8 million, down 3% [11][12] - The decrease in gross profit dollars was mainly due to lower volumes in professional contract staffing services, while gross margins improved due to a higher mix of direct hire placements [12] Market Data and Key Metrics Changes - The staffing industry continues to face challenges due to macroeconomic uncertainties, interest rate volatility, and inflation, leading to a cooling effect on U.S. employment [3][4] - Many businesses have implemented layoffs and hiring freezes, impacting job orders for both contract and direct hire placements [4][5] Company Strategy and Development Direction - The company aims to restore profitability and growth by focusing on cost reduction, streamlining operations, and integrating AI technology into recruiting and sales processes [8][15] - The acquisition of Hornet Staffing is seen as a strategic move to enhance growth and profitability, with plans for further acquisitions in AI consulting and IT sectors [10][18] - The company is exploring opportunities in offshore and nearshore recruiting to expand its capabilities [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to meet increased demand as economic conditions stabilize [9] - The focus remains on returning to profitability as soon as possible, with expectations for improvements in mid-fiscal 2026 [15][18] - Management acknowledged the importance of AI in both reducing workforce needs and enhancing business growth [40] Other Important Information - The company has paused share repurchases and is considering them as a future capital allocation strategy once profitability is restored [9][30] - The liquidity position remains strong with $21.4 million in cash and no outstanding borrowings [17] Q&A Session Summary Question: What is the company's timeline for achieving your goal of $1 billion in revenue per year? - The timeline is uncertain due to changes in the market and the pandemic, but the company is committed to returning to growth [22] Question: What changes are going to be made to raise the stock price? - The first step is to return to profitability, followed by a pivot in the business to leverage AI and automation [23] Question: Are you consolidating offices given lower demand? - Yes, the company has closed about 6 offices over the past two to three years [28] Question: Would you consider initiating a buyback once you have visibility into achieving profitability again? - This is a strategic option evaluated at every board meeting, but profitability must be restored first [30] Question: Can you elaborate on why there is such a focus on growing the company via acquisitions versus increasing future earnings per share? - The focus on acquisitions is to enhance growth and profitability, which is seen as a better return than stock buybacks at this time [31]