GEE (JOB) 17 Aug 212021 Q3 Earnings call transcript

Good day everyone and welcome to the GEE Group Incorporated Third Quarter Earnings Call. Today's call is being recorded. At this time I'd like to turn the conference over to Derek Dewan. Please go ahead.

Thank you and welcome to the third quarter earnings call for GEE Group. our Officer, is well. Thorpe today me Chief Kim Financial as With I'm Chief and Dewan, Officer. And Chairman Executive Derek Thank you for joining us today. It you GEE third to share for pleasure XX, fiscal June quarter is the ended Group’s our results XXXX. with

Some current call be today’s the judgment and about of considered make These performance. holds. predictions may our including what comments future and looking, statements Kim will estimates on I forward represent future our

XX-K the to the forward-looking and and Statements XX-Q with risks made These call. uncertainties statements could looking no differ to materially Safe are subject results Forward Regarding the from most the recent SEC uncertainties press assume are they Form and on Cautionary Form However, yesterday’s today’s Statement captions, Forward- release filed Statements Harbor. statements. update our cause risks and, to Looking that in actual described We under obligation and

measures measures. schedules non-GAAP further this explanations and reference release. press During some these included will mention we Reconciliations and presentation, our earnings are financial in also of to supplemental

of growth Our related and margins profits gross of Services our gross and services, the segments. cost results Industrial also and Professional includes rates revenues, for presentation

quarter. very of recruiters, and to sequentially success. by services contract acceleration in are XX% convenience, permanent demand field levels earnings of our our remarks prepared your staffing today’s in services. and key our our year-over-year am in business permanent fiscal all third approximately strength whom near XX% were staffing for the and proud second of We a in For the Investor fiscal leadership broad-based, the for to placement of of to over Center are website, approximately core call relatively professionals development achieved our addition We results, the particularly grew and which www.geegroup.com. pleased corporate our available record revenues XXXX due placement the I with quarter our

million, was third third compared negative Net XXXX up approximately quarter, a diluted fiscal fiscal improvement $X.XX, consolidated $X.XX XX% from negative revenues per XXXX year’s $XX.X the quarter third quarter. approximately were quarter. approximately last third in the comparable fiscal loss the fiscal to major For in share

for but our extinguished and losses debt, paid-off amount we high-cost of debt incurred last the gains net expense on of and interest the quarter. now net this reported would However, effects on senior income have

our also who Our third were the fiscal those this turn results with results will either Thorpe improved par At to XXXX I’ll XXXX. fiscal quarter elaborate or quarter third third Kim relative for the upon further on XXXX time, the CFO, comparable of reported quarter. the to over call pre-pandemic fiscal for

Derek, you, and hello, Thank everyone.

in approximately $XX.X were approximately sequentially revenues XX% $XX.X fiscal the up about fiscal one the XX% of third approximately days, prior one that ago. the higher which we same XXXX effects is the is down day billing Staffing revenues. additional Direct one approximately has quarter, to changes rates four In quarter approximately from our year up which offices in compared last for compared XX XXXX where the fiscal of XX year days million, of XXXX quarter. and noted, ago, Derek than billing or X% revenues days fourth members virtual including Permanent remotely. three and were Services quarter mix and approximately year-over-year the and Contract staffing second quarter $X.X bill XXXX increased The X% fiscal Professional Hire were to than fourth billing the services ago quarter. quarter XXXX fiscal fiscal staffing sequential have prior approximately sequentially. current second XX compared basis quarter. approximately Placement third the year-over-year XX% XX% the from markets and quarter. Professional compared for were services and million of of staff to approximately year-over-year XX% third year-over-year Professional XX% a comprised Industrial sequentially year all to consolidated are staffing revenues quarter work approximately As approximately quarter the approximately revenues approximately contract fiscal XX% X% were as comparable and the Services up Today, days, as branch and revenues. and XX% grew sequentially eleven one on total in also up up XX% approximately business segment our Services They quarter. approximately second up quarter fiscal the revenues XX XXXX there including locations as billing sequentially revenues Professional billing year the direct states, approximately million, quarter, XXXXfiscal XX the approximately to compared hire up in Contract XX% third Services segment the second over less nicely,

markets business segment end at of year-over-year for approximately XX% were services Access and Professional XX% Agile, the Services sequentially. IT and and revenues Our Consulting approximately XX% approximately SNI Data, up Paladin accounted

other number consistent an returning The with XXXX pandemic. fiscal recovery coupled COVID-XX is volume increase unfilled is from decrease environment the XX.X% Services a of and year-over-year remaining sequentially strong year- orders. Engineering, up of approximately lower Professional The for sequential XX% approximately were XX% over the with work quarter. sequentially recovery to relative business Services a number the X% Finance, the factors Industrial quarter. Accounting, for revenues the of and quarter approximately of other number the from end laborers and segment slower temporary Administrative revenues to Professional resulted Office, accounted approximately demand over-year year-over-year including down related XX% second Services and business & a immediate markets up The increasing prior Healthcare, were in to which

been refundable benefits, due generous state the consistent the the with and held . federal observation Our unemployment own has by abundance is payments this made experience to that of available and credits stimulus governments enhanced widely mainly

revenue. consolidated in gross labor of anticipate XXXX increase Fiscal expect increase as sequentially these fiscal supply as were second down quarter. or up and related to quarter However, the dollars and up year-over-year will the an payments scale third and compared profit XX% approximately to orders XX% begin we approximately terminate, filled

staffing segment, professional compared over basis XXXX fiscal gross nearly as dollars were XX% compared points, year were year or percentage the gross to year sequentially quarter. and points, quarter profit margin and up percentages year over immediately Our up second Consolidated just XXX level third to approximately preceding X sequentially as approximately under quarter. XX% approximately the were fiscal

premium of ago, and prior same revenues our I quarter with This higher As sequential a of gross relatively quarter. expenses were approximately fiscal the of compared in revenues improve during XX% third were refund a also industrial revenues, year of driven a fiscal ago significant quarter’s revenues revenues, XX% workers revenue XX% credit relatively mix by moment margin. approximately in consolidated consolidated permanent A compensation consolidated helped higher and placement placement high in of the gross approximately quarter permanent compared margin. approximately consolidated the gross the with XXXX. ago the Selling, administrative approximately of our margin quarter year general XX% helped XX% third mentioned

Net to the advertising this negative to or was share attributable quarter. productivity lower In result costs, addition job savings, $X.XX per entertainment. for costs, fixed revenue boards lower and compensation of and common and improvement costs the approximately negative is approximately shareholders loss occupancy travel diluted substantially expense to $X.X higher lower overall, higher relative million

growth third approximately productivity, capital recently, supplemental earnings ratio loans includes five million accounts was SG&A. the were quarter gains on in be was net loss ago compensation Also, approximately quarter senior year a to earnings approximately debt and X.X the million, have as diluted travel EBITDA lower which $XX.X PPP schedule approximately the mezzanine and, remarks, adjusted negative benefit Adjusted of our These the compared XX% $X.X the or approximately forgiveness since loans approximately of $XX.X up million, the the requested. aggregate former found quarter of implied on and integration the Protection approximately income to of $X.X to held subordinated release. quarter. net, reflected year-over-year-and in same pandemic, higher Act yesterday’s top opening lower nine SNI improvement overall attributable most conclude, approximately the reconciliation results June the resulted by is approximately $X.X of on debt and our costs, operating $XX.X and SBA board per days Net substantial $X.X per was the Cares sales, the debt XX and income and lower occupancy-related Excluding beginning Plan To approximately COVID-XX. share so lower million, undertaken the entertainment mitigate the which reflects advertising far as of $X.XX respectively. up year’s working and Consolidated stemming for fiscal has a was for a million in COVID-XX measure, XXXX common million for from receivable, have savings cost activities net a for following amount million, our third Payroll Last $X.X of days. gains our immediately net sequentially XX, been in of reflected of non-recurring line has combination stock our outstanding $XX.X mentioned end fiscal X, our been settlements shareholders companies shareholders restructuring losses preceding job financial and which to saving cost approximately retired, or common or recovery of effects preferred the million forgiven costs, Derek extinguishments $XX retirements the in This the in was $X.XX. can at and in net of would interest in and million. at approximately share. acquisition DSO million, approximately or and high-cost his cost, quarter measures XXX%, to A quarter, diluted non-GAAP in EBITDA, amounts effects

Now, over I’ll turn the to call Derek. back

been The you, third Group. fiscal Kim. turning XXXX quarter GEE for point has a Thank

include closing pay-off credit and million senior In retirement of in the of our and offering addition the hallmarks in senior results, follow-on former in $XX.X fees. bank the new successful approximately cost cash, million raised to debt public we and $XX $XX our completion of which good our asset-backed facility, high- million

debt four. uncertain forgiveness cash senior has our leverage XXXX, held companies the remaining in of In XX, over nine at operating enhances and million Company prospects amount businesses, $XX.X XX, the of future We Along our the tirelessly pending extraordinary to have bank to our as an to by aggregate XX, XXXX. all in and future we ABL for approximately of faced and as XXXX loans A addition, to September work X.X $X.X greatly this had endure as growth. the profitable at world PPP with XX-to-X five we the new challenges for both our our year X approximately million value June fundamentals have continued $X.X This the million approximately facility. successfully of the SBA well the the first clients in of ago, help unprecedented applications enterprise way, June and under And, reduced availability from bank we forgiven approximately ahead. and safely our current period.

strengthened critical our professionals, talent also resource to find needs and enabling pools. with our to clients commitment We broad help them across solutions

As our Supported brands, a continued model, quarter leading business and of talent talented in final is strong subject provide professional compete in an engaged record our of people the XXXX. to high dynamic into closed find with that confidently place specialized and with and people, more our result, expertise to ability we our ever, we to technology the and need we than quarter a revenues, matter they investments and specialty employee grow clients employment the are and the exciting near strengths the fiscal to productive by the world. base excited about deep they for access momentum our meaningful need

professionalism, our dedication, this wonderful their hard we work accomplished and quarter Finally, we’d without and which, good we past have to thank things year. could like for not all have the this employees

there’s If back ask to question just would Please questions. a and we’ll as to rejoin with be happy one the Now, Kim your answer questions. time, and follow-up, additional queue you for come needed. I

from we'll Partners. Capital [Operator Basler, hear John Instructions] And Basler

What forgiveness application? is of PPP the timing the loan

Kim, you take that please? will question,

May Sure. We and applications about filed the bank June. final with in our

is Our year, your answer near BBVA in spillover of may It year. is future. meantime as short sometime soon question could been some of the fiscal resolution be bank, the the the by close expect the into P&C. following as the the has which to in But we acquired loans but

from [Operator Horizon Next Elbaum Network. Instructions] hear we'll Marty of

Good Nice morning, Congratulations. gentlemen. job.

you're the give this you Is acquisitions? year-end? that that job, the mentioned around. in to Could think two for I next color some realistic turning how did as also, the you the a past look in us to Company some looking year? quarters great you And three still

is lot Sure. Thanks payments highly to back on orders We're talent The industrial stimulus is high. the payments of of government to off. call. these outlook for with It's the coming on able nicely business. strong. Demand tail side other getting specialized assistance and the feel start a the as

even surge, well. [Audio and to much by with have navigate And is other Gap] to customers variants, it. high as been technology. The learned our that we've it the IT variant use So Delta do our remote to pretty with working of end impervious somewhat able through

in internal our balance acquisitions in order, will real good prospects now focus to house can outlook excited coming will our sheet And our But support that and is very augment has so So been we well the about we're as with the you get the develop our that. as for future. months. I growth can our tell

[Operator from Capital Basler Instructions] of We'll Basler hear Partners. John again

Hey, thanks for guys, taking the follow-up.

what finance restructuring does do them as timeframe? under on you plan staffing those, what like And look And like? M&A M&A, to landscape back for would Will businesses? are the over to the those or look leverage target what And continuing go and for then from Thank to away looking what Just you and look be ad add? the you. EBITDA. functions

will you take first the second? take I'll question and Kim, the

is They opposed integration this the to not expect in to lease was you is we XX% quarter acquisition the had of ago the ago lot entirely office answer, payments. with away. that question The yes. may for The activity pandemic. those the is remaining reduce. reconciliation this restructuring XXX,XXX, than go to the can almost that measures Yes. related the amount prepare solely restructuring year from short the quarter of as as the one an see accrual to a of do it, of quarter. closing a now, continue lot But in to and year what We including the the answer associated of to took And it and the first about appears and

relatively So, low we point expect do that remain line from this to forward.

Thank Kim. you,

the the information big As caused business, and almost on why what IT data, toward and reason got changes far technology growth it metrics, economy. heavily we're and dollar proportion segment. in development targeted what in the profit looking is pandemic data it's as the per application skewed and fastest hour, The the acquisitions, space, by to we've downturns resilient focused for, increasing the security, is the highest the our the we're focused and/or gross cyber analytics, most of exclusively and

executing So, space. that's for be our of that emphasis look area us and to in

appears who's do It [Operator questions we Networks at Instructions] are there further Horizon this time. of Marty no re-prompted. Actually, Elbaum have

off I this was was just before meant cut to I ask question on.

your very pleased story. a have great with turnaround. I'm what's think we I happening with

we or guys about the the the I a IR job. either to to get out great are some that you way is think I firm what an let The need done think doing. community financial problem know you've message

hire I think someone plans story. ever great seems that be help this a you've firm an future? it thought any looking when for and to to got now you your and at to story their a about be time Have IR might and

will few couples And Great and will observation. firms. us you. along We've news. that with and look lines have with good And made pursue we those execute contact to a get actually tomorrow with for we I

So you. thank

agree with You're XXX%. right we on your target and

Anthony, question next And have Investor. Michael Private who's a a from we

you're Yes, sir. like doing a great looks job. It

bought also price a $X it very I a funds which currently. around I've you debt, you five in also, share. your on website, both is of $X.XX and And cheap important. seen have share invested lot a all trading who values hedge your Plus, in off your to insiders share. actually buying over X.XX $X share, $X.XX Also very noticed pay and have a You over

are undervalued the time. it's Well, great all we And those at for buyer. and that observations good we're a price agree this

as at satisfied we not clearly holders, level; [Audio the this that holders bullish. we're Gap] substantial of However, have insiders and equity equity

appreciate on look right forward. out and continued So growth, well are with your and then investment visibility, as to we for on good your internal be good augment that observations coming going target. More things And execution we'll acquisitions.

at Yes, your have later I sir. days. further calling couple don't I talking you you. to questions you to call maybe later, ask you and couple next Because like if time mind me better a of

you. you and questions information, with happy investor we'll free, speak fine. that's feel site Give we'll us our list to the to you. want contact to and if contact be there, Well, Note

Alright, thank you much. very

you investment. for your Thank

questions it there appears And at this are no time. further

thank safe our We things all for Well, on to And you to in Okay. our and your concludes company. you call speak call. and interest look today for come. getting good That soon. the stay again, we'll

that Again, participation. today's for you all conference. conclude does Thank your

disconnect. may You now