OAKBROOK TERRACE, Ill., April 29 /PRNewswire-FirstCall/ -- General
Employment Enterprises, Inc. (NYSE Amex: JOB) reported consolidated
net revenues for the quarter ended March 31, 2009 of $2,472,000,
compared with consolidated net revenues of $3,889,000 reported for
the same period last year. Contract service revenues for the
quarter were $1,398,000, down 32% from the same period last year.
Placement service revenues of $1,074,000 decreased 41% from last
year. The Company had a net loss of $1,088,000, or $.21 per share,
in the second fiscal quarter of this year, compared with a net loss
of $523,000, or $.10 per share, in the second quarter last year.
Commenting on the Company's performance, Herbert F. Imhoff, Jr.,
board chairman and CEO said, "It was an extremely challenging
environment in the employment industry during the quarter. The
demand for our services was depressed by employment conditions
throughout the country, as employers announced substantial layoffs
and 2.0 million Americans lost their jobs. The national
unemployment rate rose to 8.5% in March 2009." Mr. Imhoff, Jr.
continued, "This quarter, we executed a number of strategies to
manage our business during the economic downturn. They include a
22% reduction in executive compensation that was effective as of
January 1, 2009 and a 24% reduction in the size of our sales and
recruiting staff. Although it was necessary to reduce operating
costs during the downturn, we were also mindful of the importance
of retaining our most experienced and qualified personnel, so that
we will be in a position to take advantage of business
opportunities in the future." Mr. Imhoff concluded by saying, "Our
greatest accomplishment during the quarter was reaching an
agreement to raise almost $2 million in cash through the sale of
shares to PSQ. The transaction will provide the Company with
additional liquidity to continue operations." As previously
announced on March 30, 2009, the Company has signed a definitive
securities purchase and tender offer agreement (the "Purchase
Agreement") under which PSQ, LLC will acquire a controlling
interest in General Employment. Under the terms of the agreement,
PSQ has agreed to (1) purchase from General Employment 7,700,000
newly issued shares of Common Stock of General Employment at a
purchase price of $0.25 per share for a total purchase price of
$1,925,000, and (2) commence a cash tender offer to purchase from
General Employment's shareholders up to 2,500,000 outstanding
shares of Common Stock at a purchase price of $0.60 per share. The
share purchase and the tender offer are subject to certain
customary closing conditions, including receipt of approval from
General Employment's shareholders in favor of the share purchase.
Six Months Results For the six months ended March 31, 2009, the
Company had a net loss of $1,864,000, or $.36 per share, compared
with a net loss of $750,000, or $.15 per share, for the same period
last year. Consolidated net revenues for the six-month period were
$5,359,000, down 32% compared with $7,853,000 last year. Business
Information General Employment provides professional staffing
services through a network of 16 branch offices located in nine
states, and specializes in information technology, accounting and
engineering placements. The Company's business is highly dependent
on national employment trends in general and on the demand for
professional staff in particular. Because long-term contracts are
not a significant part of the Company's business, future results
cannot be reliably predicted by considering past trends or by
extrapolating past results. Some of the factors that could affect
the Company's future performance include, but are not limited to,
general business conditions, the demand for the Company's services,
competitive market pressures, the ability of the Company to attract
and retain qualified personnel for regular full-time placement and
contract assignments, the possibility of incurring liability for
the Company's business activities, including the activities of
contract employees and events affecting its contract employees on
client premises, and the ability of the Company to attract and
retain qualified corporate and branch management. The statements
made in this press release which are not historical facts are
forward-looking statements. These forward-looking statements
include statements regarding the acquisition of shares pursuant to
the tender offer commenced by PSQ, the consummation of the sale of
shares by the Company to PSQ, the filing of documents and
information with the Securities and Exchange Commission ("SEC"),
other future or anticipated matters regarding the transactions
discussed in this press release and the timing of such matters.
Such forward-looking statements often contain or are prefaced by
words such as "will" and "expect." As a result of a number of
factors, our actual results could differ materially from those set
forth in the forward-looking statements. Certain factors that might
cause our actual results to differ materially from those in the
forward-looking statements include, in addition to those set forth
in the preceding paragraph and without limitation: (1) the risk
that the conditions to the closing of the tender offer by PSQ or
the sale of shares to PSQ set forth in the Purchase Agreement will
not be satisfied, (2) changes in the Company's business during the
period between the date of this press release and the closing of
the transactions contemplated by the Purchase Agreement, (3)
obtaining regulatory approvals (if required) for the transactions,
(4) the risk that the transactions will not be consummated on the
terms or timeline first announced, and (5) those factors set forth
under the heading "Forward-Looking Statements" in the Company's
Annual Report on Form 10-KSB for the fiscal year ended September
30, 2008, and in the Company's other filings with the SEC. The
Company is under no obligation to (and expressly disclaims any such
obligation to) and does not intend to update or alter its
forward-looking statements whether as a result of new information,
future events or otherwise. GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (In Thousands, Except Per
Share) Three Months Six Months Ended March 31 Ended March 31 2009
2008 2009 2008 Net revenues: Contract services $1,398 $2,058 $2,943
$3,860 Placement services 1,074 1,831 2,416 3,993 Net revenues
2,472 3,889 5,359 7,853 Cost of contract services 1,017 1,374 2,053
2,609 Selling, general and administrative expenses 2,530 3,038
5,086 6,044 Loss from operations (1,075) (523) (1,780) (800)
Investment income (loss) (13) -- (84) 50 Net loss (1) $(1,088)
$(523) $(1,864) $(750) Average number of shares - basic and diluted
5,165 5,165 5,165 5,162 Net loss per share - basic and diluted
$(.21) $(.10) $(.36) $(.15) (1) There were no credits for income
taxes as a result of the pretax losses during the periods, because
there was not sufficient assurance that future tax benefits would
be realized. GENERAL EMPLOYMENT ENTERPRISES, INC. SUMMARIZED
CONSOLIDATED BALANCE SHEET INFORMATION (In Thousands) March 31
September 30 2009 2008 Assets: Cash and cash equivalents $2,464
$4,165 Other current assets 1,281 1,627 Total current assets 3,745
5,792 Property and equipment, net 671 791 Other assets 194 419
Total assets $4,610 $7,002 Liabilities and shareholders' equity:
Current liabilities $1,370 $1,507 Other liabilities -- 419
Shareholders' equity 3,240 5,076 Total liabilities and
shareholders' equity $4,610 $7,002 DATASOURCE: General Employment
Enterprises, Inc. CONTACT: Herbert F. Imhoff, Jr., Chief Executive
Officer and President of General Employment Enterprises, Inc.,
+1-630-954-0495, Fax, +1-630-954-0592, Web Site:
http://www.generalemployment.com/
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