Q2 2024 GEE Group Inc Earnings Call
Derek E. Dewan: Hello and welcome to the GEE Group fiscal 2024 second quarter, first half ended March 31, 2024 earnings and update webcast conference call. I'm Derek Dewan, Chairman and Chief Executive Officer of GEE Group. I will be hosting today's call. Joining me as a co-presenter is Kim Thorpe, our Senior Vice President and Chief Financial Officer. Thank you for joining us today.
Hello, and welcome to the G Group fiscal 2020 for second quarter.
First half ended March 31, 2020 for earning.
Earnings and update webcast conference call.
Speaker Change: I'm, Derrick <unk>, Chairman and Chief Executive Officer of <unk> Group.
Speaker Change: I will be hosting today's call.
Speaker Change: Joining me is it co presenter is Kim our senior Vice President and Chief Financial Officer.
Speaker Change: Thank you for joining us today.
Derek E. Dewan: It is our pleasure to share with you results for the fiscal 2024 second quarter and first half ended March 31, 2024, and provide you with our outlook for the remainder of the 2024 fiscal year and the foreseeable future. Some comments Kim and I will make may be considered forward-looking, including predictions, estimates, expectations, and other statements about our future performance. These represent our current judgments of what the future holds and are subject to risks and uncertainties, the actual results may differ materially from our forward-looking statements.
Speaker Change: It is our pleasure to share with you.
Speaker Change: G group's results for the fiscal 2020 for second quarter.
And first half ended March 31, 2024 and.
Speaker Change: And provide you with our outlook for the remainder of the 2020 for fiscal year in the foreseeable future.
Speaker Change: Some comments, Kim and I will make.
Speaker Change: May be considered forward looking including predictions estimates expectations and other statements about our future performance.
Speaker Change: These represent our current judgment of what the future holds and.
Speaker Change: And are subject to risks and uncertainties actual results may differ materially.
Speaker Change: From our forward looking statements.
Derek E. Dewan: These risks and uncertainties are described below under the caption Forward Looking Statements, Safe Harbor, and in Wednesday's earnings press release, and our most recent Form 10-Q-10-K and other SEC filings under the captions, Cautionary Statement, regarding forward-looking states, and forward-looking statements. We assume no obligation to update statements made on today's call.
These risks and uncertainties are described below under the caption forward looking statements Safe Harbor.
Speaker Change: And in Wednesday's earnings press release and.
Speaker Change: In our most recent Form 10-Q, 10-K, and other SEC filings under the caption cautionary statements regarding forward looking statements.
Speaker Change: Forward looking statements.
Speaker Change: We assume no obligation to update.
Speaker Change: Statements made on today's call.
Derek E. Dewan: During this presentation, we will also talk about some non-GAAP financial measures. Reconciliations and Explanation of the Non-GAAP Measures we will address today are included in the earnings press release. Our presentation of financial amounts and related items, including growth rates, Margin. [inaudible] For your convenience, our prepared remarks for today's call are available in the Investor Center of our website, www.gegroup.com.
Speaker Change: During this presentation. We also will talk about some non-GAAP financial measures.
Speaker Change: Reconciliations an explanation of the non-GAAP measures.
We will address today are included in the earnings press release.
Speaker Change: Our presentation of financial amounts and related items, including growth rates margins and.
Speaker Change: <unk> metrics around it.
Speaker Change: Based upon rounded amounts for purposes of this call and all amounts or percentages and related items presented or approximations.
Speaker Change: Accordingly.
Speaker Change: For your convenience our prepared remarks for today's call are available in the Investor Center.
Of our web site Www Dot G group Dot com.
Derek E. Dewan: We have faced very difficult and challenging conditions so far in the fiscal 2024 first half, mainly stemming from ongoing macroeconomic and labor market instability, volatility, and uncertainty, particularly as they have affected businesses' use of contingent labor and their hiring full-time personnel. As we have reported in the past, the demand environment for us and our industry peers began to soften in the middle part of calendar 2023, following a robust hiring of both contract labor and permanent employees in calendar 2021.
Speaker Change: We have faced very difficult and challenging conditions, so far in the fiscal 2024 first half Maine.
Speaker Change: Mainly stemming from ongoing macro economic and labor market instability volatility and uncertainty.
Speaker Change: Particularly as they have affected businesses use of contingent labor and they're hiring a full time personnel.
Speaker Change: As we reported in the past the demand environment for us.
Speaker Change: Our industry peers began to soften in the middle part of calendar 2023.
Speaker Change: Following a robust hiring of both contract labor and permanent employees and calendar calendar 2021 and 2022.
Derek E. Dewan: 2022, much of which was attributable to a post-COVID-19 bounce in employment. However, many IT projects and corporate expansion activities requiring additional labor have been put on hold, with some layoffs implemented in conjunction with a hiring freeze. These conditions have continued to negatively impact job orders so far in the first half of calendar 2024. Consolidated revenues were $28 million for the fiscal 2024 second quarter. $58.7 million for the first half of fiscal 2024. Gross profit and gross margin were $8.7 million.
Much of which was attributable to a post COVID-19 bounce in employment.
Speaker Change: Many projects and corporate expansion activities, requiring additional labor have been put on hold with some layoffs implemented in conjunction with a hiring freeze.
Speaker Change: These conditions have continued to negatively impact job orders so far in the first half of calendar 2024.
Speaker Change: <unk> revenues were $28 million for the fiscal 2020 for second quarter.
Speaker Change: $58 7 million for the first half of fiscal 2024.
Speaker Change: Gross profit and gross margin were $8 7 million.
Speaker Change: <unk> 31, 3% respectively.
Speaker Change: For fiscal 2020 for second quarter.
Speaker Change: $18 5 million and 31, 5% for the first half.
unknown: [inaudible] of Fiscal 2024. Consolidated, non-gap, adjusted eVita is negative at 600,000 for the fiscal 2024 second quarter and negative 800,000 for the first half of fiscal 2024. We reported a net loss of $0.01 per diluted share for the fiscal 2024 second quarter and a net loss of $2.6 million, or $0.02 per diluted share, for the first half of fiscal 2024
Speaker Change: For fiscal 2024.
Speaker Change: Consolidated non-GAAP adjusted EBITDA.
Speaker Change: It was negative 600000 for the first for the fiscal 2020 for second quarter and.
A negative 800000 for the first half of <unk>.
Speaker Change: Fiscal 2024.
Speaker Change: We reported a net loss of $1 million.
Speaker Change: <unk> per diluted share for the fiscal 2020 for second quarter.
Speaker Change: And a net loss of.
Speaker Change: $2 6 million or <unk> <unk> per diluted share.
Speaker Change: For the first half of fiscal 2024.
Yeah.
Speaker Change: Okay.
Derek E. Dewan: The prior fiscal 2023, second quarter, and first half results were solid, although lower when compared to 2022's best ever results, which included record high demand for direct hire placement services and many special projects on the contract side driven by post-COVID. Attendee, Derek Dewan, and Kim Thorpe, GEE Group. The pullback in demand for direct hire placement services, in particular, which began in the middle part of calendar 2023, has continued into the first half of 2024 so far and contributed to the lower fiscal 2024 second quarter and first half results.
Speaker Change: The prior fiscal 2023 second quarter and first half results were solid although lower when compared to 2020 two's best ever results.
Speaker Change: Which included record high demand for direct hire placement services.
Speaker Change: Many special projects on the contract side driven.
Speaker Change: Post COVID-19.
Speaker Change: Recovery, resulting in an upward bounce and hiring at that time.
Speaker Change: The pullback in demand for direct hire placement services in particular, which began in the middle part of calendar 2023 has continued into the first half of 2024, so far and.
Speaker Change: And contributed to the lower fiscal 2020 for second quarter and first half results.
Derek E. Dewan: Performance is also down and nearly universally among our industry peers, as we all are facing similar challenges, and the Industry Observers have labeled our current situation, the big stay. Employers are holding tight onto their good, reliable employees. So turnover and replacement hiring of full-time personnel are down accordingly.
Speaker Change: Performance is also down nearly universally among our industry peers.
As we all are facing similar challenges.
Speaker Change: And the industry observers have labeled our current situation.
The big stay employers are holding tight on to their good reliable employees, so turnover and replacement hiring a full time personnel are down.
Speaker Change: Accordingly.
Derek E. Dewan: On the contract side, our clients continue to postpone projects in many areas, including IT Software Implementation and Systems Upgrades, Accounting and Finance Special Work in Manufacturing Production, and Facilities Expansion, resulting in fewer contractor assignments. The good news in this is that our client retention itself remains outstanding, even though orders are down from normal levels across nearly all verticals. Additionally, we are beginning to see signs of improvement on some of the leading indicators we have been tracking.
Speaker Change: On the contract side, our clients continue to postpone projects in many areas, including software implementation of systems upgrades.
Speaker Change: <unk> finance special work and manufacturing production and facilities expansion.
Speaker Change: Resulting in fewer contractor assignments.
Speaker Change: Good news in this is that our client retention itself remains outstanding.
Speaker Change: Even though orders are down from normal levels.
Speaker Change: Cross nearly all verticals. Additionally, we are beginning to see signs of improvement.
And some of the leading indicators we have been tracking.
Derek E. Dewan: These positive trends have been mentioned in recent reports covering the staffing industry and by other peer group companies in their press releases and public filings. It remains unclear at this juncture, however, whether these trends are sustainable and as to when exactly the challenges faced by us in the U.S. staffing industry overall may be expected to meaningfully subside, as indicated in our earnings press release. We do remain cautiously optimistic in our outlook. Before I turn it over to Kim, I would like to touch on some other recent important developments.
Speaker Change: These positive trends have been mentioned in recent reports covering the staffing industry and by other peer group companies in their press releases and public filings.
Speaker Change: It remains unclear at this juncture however weather.
Speaker Change: It is sustainable and as to when exactly the challenges faced by us in the U S staffing industry overall may be expected to meaning fully subside.
Speaker Change: So as indicated in our earnings press release.
Speaker Change: We do remain cautiously optimistic in our outlook.
Speaker Change: Before I turn it over to Kim I would like to touch on some other recent important developments.
Derek E. Dewan: Less than a month ago, we announced the completion of the Company's Review of Strategic Alternatives, undertaken by our board of directors in conjunction with its M&A committee with the assistance of the investment banking firm DC Advisory. We are now well underway formulating our plans and budgets with which to execute on the M&A committees and DC Advisory's recommendation, which includes making prudent investments to grow both organically and through mergers and acquisitions. Without going into details for now, armed with considerable excess cash and potential potential available finance, we have already begun both adding and training new revenue producers and revving up sales initiatives initiatives in key markets and also revisiting our M&A targets and socializing with several targets at this stage.
Kim: Less than a month ago.
Kim: We announced the completion of the company's review of strategic alternatives undertaken by our board of directors in conjunction with its M&A Committee with the assistance of the investment banking firm DC Advisory.
Kim: We are now well underway formulating our plans and budgets with which to execute on the M&A committees at D. C Advisory recommendations, which include making prudent investments to grow both organically and through mergers and acquisitions.
Kim: Without going into details for now armed with considerable excess cash and potential potential available financing.
Speaker Change: Already have begun both adding and training new revenue producers and rubbing up sales initiatives the initiatives in key markets and also.
Speaker Change: Revisiting our M&A targets.
Speaker Change: And socializing with several targets at this stage.
Derek E. Dewan: We pause share repurchases on December 31, 2023, having purchased 6.1 million shares of GEE Group stock, or just over 5% of our outstanding shares at the beginning of the program. For now, our board and management agree that it is judicious to discontinue share repurchases for the time being, at least until we gain more clarity on when market conditions may improve and, until then, how much of our excess cash should be held in reserve.
Speaker Change: We paused share repurchases on December 31, 2023, having purchased $6 1 million shares.
Speaker Change: <unk> group stock.
Speaker Change: Or just over 5% of our outstanding shares at the beginning of the program.
Speaker Change: Now our board and management agree that it is judicious to discontinue share repurchases for the time being.
Speaker Change: At least until we gain more clarity on when market conditions may improve and until then how much of our excess cash should be held in reserve chair.
Derek E. Dewan: Chair of Purchases will always be a part of our capital allocation strategy and a bona fide alternative use of our excess capital to implement it if and when prudent. However, in the context of our overall growth strategy, it is not by itself a bona fide long-term course of action to maximize enterprise value and increase shareholder value. Also, there's some other bright spots that are out.
Speaker Change: Share repurchases always will be a part of our capital allocation strategy.
Speaker Change: And a bonafide alternative use of our excess capital.
Speaker Change: And implemented if and when prudent.
Speaker Change: However, in the context of our overall growth strategy.
It is not by itself a bonafide long term course of action to maximize enterprise value and increase shareholder value.
Speaker Change: Also there are some other bright spots in our outlook.
Derek E. Dewan: It is still too early to predict when a definitive upward turn and our existing down cycle will occur. However, we are seeing some positive results from our recent investments to accelerate growth. Price and spread improvements in our professional verticals are beginning to take hold, and job orders were up in April. Our revenues for April and revenues per billing day are coming in higher than both the month of March 2024 and the average monthly revenues for the entire quarter.
Speaker Change: It is still too early to predict when a definitive upward turn in our existing downcycle will occur. However, we are seeing some positive results from our recent investments to accelerate growth.
<unk> spread improvements in our professional verticals, we're beginning to take hold and job orders were up in April.
Speaker Change: Our revenues for April and revenues per billing day are coming in higher than both the month of March 2024, and the average monthly revenues for the entire quarter.
Derek E. Dewan: We also have continued to achieve excellent client retention, most notably among our largest clients throughout the current cycle. We view continued good client retention to be a positive sign for things to come as the cycle begins to improve. I want to assure everyone once again that our sole focus is to manage through the downturn and to restore growth as quickly as possible. We have a strong balance sheet with substantial liquidity in the form of cash and borrowing capacity and are well prepared to do both.
Speaker Change: We also have continued to achieve excellent client retention, most notably among our largest clients throughout the current cycle.
Speaker Change: We view continued good client retention to be a positive sign for things to come as the cycle begins to improve.
Speaker Change: I want to assure everyone once again that.
Speaker Change: Our sole focus is to manage through the downturn and to restore growth as quickly as possible.
Speaker Change: We have a strong balance sheet.
Speaker Change: With substantial liquidity in the form of cash and borrowing capacity and are well prepared to do both.
Derek E. Dewan: We also continue to assert that our stock is undervalued, especially so, based upon recent trading at levels very near and even slightly below tangible book value. Also, while our stock price has been down since the last earnings release, only a small portion of our float is actually trading at this low of a level, further evidence that it is undervalued and has substantial room to grow, especially from here. And finally, before I turn it over to Kim,
Speaker Change: We also continued to assert that our stock is undervalued and especially.
Speaker Change: So based upon recent trading at levels, very near and even slightly below tangible book value.
Speaker Change: Also while our stock price has been down since the last earnings release, only a small portion of our float is actually trading at this low a level further evidence that it is undervalued and has substantial room to grow especially from here.
Speaker Change: Finally, before I turn it over to Kim.
Derek E. Dewan: I once again wish to thank our wonderful, dedicated employees and associates. They work extremely hard every day to ensure that our clients get the very best service. They are a key factor in our prior achievements and the most important driver of our company's future success. At this time, I'll turn over the call to our Senior Vice President and Chief Financial Officer, Kim Thorpe, who will further elaborate on our fiscal 2024 second quarter and year-to-date results.
By once again wish to thank our wonderful dedicated employees and associates there.
They work extremely hard every day to ensure that our clients get the very best services.
Speaker Change: They were a key factor in our prior achievements.
Speaker Change: And the most important driver of our company's future success.
Kim: At this time I.
Speaker Change: I'll turn it over the call to our senior Vice President and Chief Financial Officer, Jim Thorpe, who will further elaborate on our fiscal 2020 for second quarter and year to date results.
Kim: Yeah.
Kim D. Thorpe: Thank you, Derek, and good morning. As Derek mentioned, consolidated revenues for the three and six-month periods ended March 31, 2024, were $28 million and $58.7 million, down 28% and 27%, respectively, compared with the same fiscal 2023 period. Professional and industrial contract staffing services revenues for the fiscal 2024 second quarter were $25.6 million, down 25% as compared to the fiscal 2023 second quarter. Professional and industrial contract staffing services revenues for the first half of fiscal 2024 were $53.2 million, down 23% as compared to the first half of fiscal 2023.
Jim Thorpe: Thank you Derek and good morning.
Kim D. Thorpe: Professional contract services revenue, which represents 90% of all contract services revenue and 82% of total revenue, decreased $7.6 million, or 25%, quarter over quarter. In the first half of fiscal 2024, again, professional contract services revenue represented 91% of all contract services revenue and again 82% of total revenues, and decreased $14.3 million, or 23%, as compared with the first half of fiscal 2023. Industrial contract services revenue, which represents 10% of all contract services revenue and 9% of total revenue, decreased $800,000, or 24%, quarter over quarter.
Jim Thorpe: As Derek mentioned consolidated revenues for the three and six month periods ended March 31, 2024 were $28 million from $58 7 million down, 28% and 27% respectively compared with the same fiscal 2023 periods prefer.
Jim Thorpe: Fashion alone industrial contract staffing services revenues for the fiscal 2024 second quarter were $25 $6 million.
Down 25% as compared to the fiscal 2023 second quarter professional and industrial contract staffing services revenues for the first half.
Jim Thorpe: Our fiscal 2024 were $53 2 million down 23% as compared to the first half of fiscal 2023 professional contract services revenue, which represents 90% of all contract services revenue and 82% of total <unk>.
Jim Thorpe: Revenue decreased $7 6 million or 25% quarter over quarter.
Jim Thorpe: In the first half of fiscal 2024 again professional contract services revenue represented 91% of our contract services revenue and again, 82% of total revenues and decreased $14 3 million or 23% as compared with the first half of fiscal 2023.
Jim Thorpe: Industrial contract services revenue, which represents 10% of all contract services revenue and 9% of total revenue decreased $800000 or 24%.
Kim D. Thorpe: In the first half of fiscal 2024, industrial contract services revenue represented 9% of all contract services revenue and 8% of total revenues and decreased 1.9 million, or 28%, as compared with fiscal 2023's first half. Direct revenues for fiscal 2024 For the fiscal 2024 second quarter, revenues were $2.4 million, down 50% as compared with the fiscal 2023 second quarter revenues, and we're $5.5 million for the first half of fiscal 2024, down 48% from the first half of 2023.
Jim Thorpe: Quarter over quarter, and the first half of fiscal 2024 industrial contract services revenue represented 9% of our contract services revenue and 8% of total revenues and decreased one 9 million or 28% as compared with fiscal 2020 threes first Matt.
Jim Thorpe: Direct revenues for fiscal 2024 for the fiscal 2020 for the second quarter were $2 $4 million down 50% as compared with fiscal 2023 second quarter revenues and were $5 $5 million for the first half of fiscal 2024 down.
Jim Thorpe: 48% from the first half of 2023.
Kim D. Thorpe: The effects of the economic and labor conditions referred to by Derek have resulted in declines in job orders for temporary and direct hire personnel from clients and a decline in revenues, and revenues have ended for virtually all, among virtually all our professional verticals. Recruiting qualified temporary labor to fill job orders for our industrial division in particular led to decreases in contract revenues for that business. The big stay, as it's called, has been widely chronicled throughout the staffing industry by our observers and has led to the overall decline in demand for permanent hire.
Speaker Change: The effects of the economic and labor conditions referred to by Derek Hatch.
Speaker Change: Have resulted in declines in job orders for temporary and direct hire personnel from clients and the decline in.
Speaker Change: There've been revenues and data revenues virtually.
Derek Hatch: All of them are virtually all our professional verticals recruiting qualified temporary labor to fill job orders for our industrial division in particular led to decreases in contract revenues for that business.
Derek Hatch: <unk> stay as it is called has been wildly chronicle throughout the staffing industry by our observers and has led to the overall declines in demand for permanent hires gross profit for fiscal 2020 fours second quarter was $8 7 million down 34% as compared with fiscal 2012.
Kim D. Thorpe: Gross profit for fiscal 2024's second quarter was $8.7 million, down 34% as compared with fiscal 2023's second quarter gross profit. Gross profit for the first half of 2024 was $18.5 million, down 33% as compared with the first half of fiscal 2023. Our overall gross margins were 31.3% and 34% for the fiscal 2024 and 2023 second quarters, respectively. The differences in gross profit and gross margin are mainly attributable to the decline in the percentages of direct higher revenue, which has 100% gross margin to total revenue. Our professional contract services gross margin was 25.7% for the fiscal 2024 second quarter, compared with 25.4% for the fiscal 2023 second quarter, an improvement of 30 basis points.
Derek Hatch: Three's second quarter gross profit grew.
Derek Hatch: Gross profit for the first half of 2024 was $18 5 million.
Speaker Change: Down 33% as compared with the first half of fiscal 2023, our overall gross margins were 31, 3% and 34%.
Speaker Change: For the fiscal 2024, and 2023 second quarters, respectively.
Speaker Change: The differences in gross profit and gross margin are mainly attributable to the decline in the percentages of direct hire revenue, which has a 100% gross margin to total revenue our professional contract services gross margin was 25.
Speaker Change: 7% for the <unk>.
Speaker Change: Fiscal 2024 second quarter, compared with 25, 4% for the fiscal 2023 second quarter, an improvement of 30 basis points. The gross margin for professional contract services was 25, 3% for the first half of <unk>.
Kim D. Thorpe: The gross margin for professional contract services was 25.3% for the first half of fiscal 2024, as compared with 25.4% for the first half of fiscal 2023, a slight decline of 10 basis points. Our industrial contract services gross margin was 15.2% for the fiscal 2024 second quarter compared with 16.5% for the fiscal 2023 quarter, which was a decline of 130 basis points. In addition to fewer job orders, we continue to face challenges with our industrial business, including sourcing and recruiting qualified candidates, as well as increased competition in those markets. However, despite lowered overall gross profit and gross margins so far in 2024, our current margins remain relatively high as compared with those of our competitors.
Speaker Change: Fiscal 2024, as compared with 25, 4% for the first half of fiscal 2023.
Speaker Change: Slight decline of 10 basis points.
Speaker Change: Our industrial contract services gross margin was 15, 2% for the fiscal 2024 second quarter compared with 16, 5% for the fiscal 2023 quarter, which was a decline of 130 basis points.
Speaker Change: In addition to fewer job orders, we continue to face challenges with our industrial business, including sourcing and recruiting qualified candidates as well as the increased competition in those markets. Despite lower overall gross profit and gross margin. So far in 2024, However, our current mark.
Speaker Change: <unk> will remain relatively high as compared with those of our competitors.
Kim D. Thorpe: Selling General and Administrative Expenses, SG&A, for the fiscal 2024 second quarter were $10 million, down 15% compared with the fiscal 2023 second quarter. SG&A expenses for the first half were $20.6 million, down 16% as compared with the first half of fiscal 2023. SG&A expenses were 35.7% of revenues for fiscal 2024's second quarter, compared with 30.1% for fiscal 2023's second quarter. The increase in SG&A relative to revenue is mainly attributable to our fixed costs, including personnel-related expenses, occupancy costs, software subscriptions for the applicant tracking and sourcing systems our producers use, and others, which became proportionately higher relative to lower revenues in the quarter and a half or in the quarter in particular.
Speaker Change: Selling general and administrative expenses SG&A for the fiscal 2024 second quarter were $2 million down 15% compared with the fiscal 2023 quarter second quarter SG&A expenses for the first half were $20 6 million down 16%.
Speaker Change: As compared with the first half of fiscal 2023.
Speaker Change: SG&A expenses were 35, 7% of revenues for fiscal 2020 for second quarter.
Speaker Change: Paired with 31% for fiscal 2023 second quarter.
Speaker Change: The increase in SG&A relative to revenue is mainly attributable to our fixed cost, including personnel related expenses occupancy costs software subscriptions for the applicant tracking and sourcing systems, our producers' views and others, which became proportionately higher.
Speaker Change: Relative to lower revenues in the quarter and the half are in the quarter in particular and to a lesser extent certain nonrecurring expenses not associated.
Kim D. Thorpe: And, to a lesser extent, certain non-recurring expenses not associated with ongoing core business operations. Management has made a concerted effort to reduce SG&A and will continue to do so in a manner that will not hinder revenue growth as the business environment improves. In addition, we have begun to selectively add and train new revenue-producing personnel and launch sales initiatives in key markets in order to enhance our resources to obtain new clients, new job orders, and increased market share.
Speaker Change: With our growing core business operations management has made a concerted effort to reduce SG&A and we will continue to do so in a manner that will not handle revenue growth as the business environment improves.
Speaker Change: In addition, we have begun to selectively add and train new revenue producing personnel enlarged sales initiatives and key markets in order to enhance our resources to obtaining new clients, new job orders and increased market share.
Kim D. Thorpe: Our management team is experienced in managing through cyclical conditions such as the ones we're now experiencing, and these investments are being made in anticipation of the eventual recovery. We reported a net loss for fiscal 2024's second quarter of $1 million, or one penny a share, down $1.7 million as compared to net income of $700,000, or a penny a share positive, that is per diluted share, for fiscal 2023's second quarter Our net loss for the first half of fiscal 2024 was $2.6 million, or negative two cents per diluted share, down $3.9 million as compared with net income of $1.3 million, or a penny per diluted share positive, for the first half of fiscal 2023.
Speaker Change: Our management team is experienced at managing through cyclical conditions, such as the ones. We're now experiencing.
Speaker Change: These investments are being made.
Anticipation of the eventual recovery.
Speaker Change: We reported a net loss for fiscal 2024 second quarter over $1 million or one penny a share down $1 $7 million as compared to net income of 700000 or a penny a share positive.
Speaker Change: That is per diluted share for fiscal 2023 second quarter, our net loss for the first half of fiscal 'twenty, two or 24 was $2 6 million or negative <unk> <unk> per diluted share down $3 9 million as compared with net income of $1 $3 billion or a penny per day.
Speaker Change: Diluted share positive for the first half of fiscal 2023.
Kim D. Thorpe: Adjusted net loss, which is a non-GAAP financial measure for fiscal 2024 second quarter, was approximately $400,000 down $1.2 million as compared with adjusted net income of $800,000 positive for fiscal 2023 second quarter. The difference was that the loss for the first half of 2024 was $1.3 million, down $3.2 million as compared with positive adjusted net income of $1.9 million for the first half of fiscal 2023. Even on this, which is a non-gap measure for the fiscal 2024 second quarter, was negative, $1.2 million, down $2.7 million as compared with $1.5 million for the fiscal 2023 second quarter, $1.5 million, which was positive.
Speaker Change: Adjusted net loss, which is a non-GAAP financial measure for fiscal 2024 second quarter was approximately $400000 down $1.2 million as compared with adjusted net income of $800000 positive.
Speaker Change: For fiscal 2023 second quarter.
Our adjusted net loss for the first half of 2024 was $1 $3 million.
Speaker Change: $322 million as compared with positive adjusted net income of one $9 million for the first half of fiscal 2023, EBITDA, which is a non-GAAP measure for the fiscal 2020 for the second quarter was negative $1 2 million down $2 7 million as compared with.
Speaker Change: $1 5 million for fiscal 2023 second quarter, one 5 billion, which was positive EBITDA for the first half of fiscal 2024 was a negative $2 1 million.
Kim D. Thorpe: Even if for the first half of fiscal 2024 was a negative $2.1 million, down $5.2 million as compared with positive $3.1 million for the first half of fiscal 2023. Adjusted EBITDA, which also is a non-GAAP financial measure, for the fiscal 2024 second quarter was negative $600,000, down $2.3 million as compared with $1.7 million positive EBITDA for the fiscal 2023 second quarter. And our adjusted EBITDA for the first half of 2024 was a negative $800,000, down $4.5 million as compared to $3.7 million for the first half of fiscal 2023.
Speaker Change: Dollars down $5 2 million as compared with positive $3 $1 million for the first half of fiscal 2023 adjusted.
Speaker Change: Adjusted EBITDA, which also is a non-GAAP financial measure for the fiscal 2024 second quarter was negative $600000 down to $3 million as compared with one 7 million dollar positive EBITDA for the fiscal 2023 second quarter and our adjusted EBITDA for the <unk>.
Speaker Change: First half of 'twenty to 'twenty, four was a negative $800000 down $4 5 million as compared to $3 $7 million for the first half of fiscal 2023.
Kim D. Thorpe: Our current working capital ratio of March 31, 2024 was 3.9 to 1, up from 3.6 to 1 as of September 30, 2023. We reported positive cash flow from operating activities and free cash flow, the latter of which is a non-GAAP financial measure, of about $400,000 for fiscal 2024's second half ended March 31, 2024. Our liquidity position remains very strong, and we have an undrawn ABL credit facility and no outstanding debt. Our net book value per share and net tangible book value per share were $0.92 and $0.32, respectively, as of March 31, 2024.
Speaker Change: Our current our working capital ratio as of March 31, 2024 was $3 nine to one.
Speaker Change: Up from three six to one as of September 32023, we reported positive cash flow from operating activities and free cash flow, which is a non-GAAP for the latter of which is a non-GAAP.
Speaker Change: Financial measure of about $400000 for fiscal 2020 fours second half ended March 31 2024.
Speaker Change: Our liquidity position remains very strong and we have an undrawn ABL credit facility had no outstanding debt, our net book value per share and net tangible book value per share were 92 cents and 32, respectively as of March 31 2024.
Kim D. Thorpe: In conclusion, while we're obviously disappointed in our fiscal 2024 second quarter results and first half, we do remain cautiously optimistic in our near-term outlook and in our, I'm sorry, our long-term outlook and have demonstrated that we can generate substantial earnings consistently under more favorable economic conditions and a more conducive environment for the staffing industry and have done so in the past. Before I turn it back over to Derek, please note that reconciliations of GEE Group's non-GAAP financial measures discussed today with their GAAP counterparts can be found in the supplemental schedules included in our earnings press release. Now, I'll turn it back over to Derek. Thank you, Kim.
Speaker Change: In conclusion.
Speaker Change: While we were obviously disappointed in our fiscal 2024 second quarter results.
Speaker Change: And first half we do remain.
Speaker Change: Cautiously optimistic and our near term outlook.
Speaker Change: And our and our I'm sorry in our long term outlook and have demonstrated that we can generate substantial earnings consistently under more favorable economic conditions and a more conducive environment for the staffing industry and have done so in the past before I turn it back over to <unk>.
Derek Please note that reconciliations of G groups non-GAAP financial measures discussed today.
Speaker Change: With their GAAP counterparts can be found in the supplemental schedules.
Speaker Change: <unk> in our earnings press release, now I'll turn it back over to Derek.
Derek Hatch: Thank you Kim.
Derek E. Dewan: At March 31, 2024, the company had $21.2 million in cash and another $8.2 million in availability under its Bank ABL credit facility. Despite economic headwinds and staffing industry-specific challenges impacting demand for our services, we are aggressively managing and preparing our business for an inevitable recovery. As I mentioned in our earnings press release and again in my opening remarks, we are moving aggressively, not only to prepare for an eventual recovery but also to restore growth sooner, driven by both organic and M&A growth plans and other initiatives. We will continue to work hard for the benefit of our shareholders, including consistently evaluating strategic uses of GEE Group's capital to maximize shareholder return.
Derek Hatch: At March 31, 2024, the company had $21 2 million in cash.
Kim: And another $8 2 million in availability under its bank ABL credit facility.
Speaker Change: Despite economic headwinds and staffing industry specific challenges impacting demand.
Derek Hatch: For our services, we are aggressively managing and preparing our business for an inevitable recovery as I mentioned in our earnings press release and again in my opening remark.
Derek Hatch: We are moving aggressively not only to prepare for an eventual recovery.
Derek Hatch: But also to restore growth sooner to be driven by both organic and M&A growth plans and other initiatives.
Derek Hatch: We will continue to work hard for the benefit of our shareholders, including consistently evaluating strategic uses of G group's capital to maximize shareholder returns.
Derek E. Dewan: Before we pause to take your questions, I want to again say a special thank you to all our wonderful people for their professionalism, hard work, and dedication. Now Kim and I would be happy to answer your question; please ask just one question and rejoin the queue with a follow-up as needed. If there's time, we'll come back to you for additional questions. And at this point, that concludes our formal remarks, and we'll move to Q&A. Thank you. So, Kim, will you take the first question, please? Sure, Gary.
Derek Hatch: Before we pause to take your questions I want to again say a special thank you.
Derek Hatch: All of our wonderful people for their professionalism hard work and dedication.
Speaker Change: Now Kim and I would be happy to answer your questions. Please ask just one question.
Kim: And rejoin the queue with a follow up as needed.
Speaker Change: If there's time, we'll come back to you for additional questions.
Speaker Change: And at this point that concludes our formal remarks, and we'll move to Q&A. Thank you.
Speaker Change: So Ken when you take the first question. Please.
Kim D. Thorpe: Sure, Derek. The first question is, why do you appear to be losing market share? Your results are considerably weaker than peers and are symbolic of a deep recession. My answer to that is, based on our data, we do note that our results are down at, let's say, the lower end of a group of larger companies. But the core reason that I believe our results are a little bit worse than other larger public company peers is because we have a larger contingent of small and medium-sized enterprises as clients.
Ken: Sure Gary.
The first question is why do you appear to be losing market share. Your results are considerably weaker than peers and are symbolic of a deep recession.
Speaker Change: My answer to that is.
Ken: Based on our data we do know is that our.
Ken: Our results are down at let's say the the lower end of a group of larger companies.
Ken: The core reason that I believe our results show a little bit worse than other larger public company peers is because we have a larger contingent of small and medium size enterprises as clients.
Kim D. Thorpe: As Derek mentioned, we do have, we have had good retention, especially among our larger clients and also among our smaller clients, but orders are down. So, you know, some of it, some of it in terms of margins and our profits is because of our size. But overall, we are not necessarily, in fact, our orders are good, and our trends are moving in the same direction, and everything else being the same, I would not say that we're considerably weaker than our peers.
Ken: As Derek mentioned, we do have we have had good retention, especially among our larger clients and also in our smaller clients, but orders are down so some of it some of it in terms of the margins and our profits because of our size.
Speaker Change: But overall, we are not necessarily where in fact, where our orders are good at and our trends are moving in the same direction and everything else being the same I don't I would not.
Speaker Change: Say that were considerably weaker than our peers.
Speaker Change: Okay.
Speaker Change: Okay. Thank you.
Kim D. Thorpe: Sure. Another question. Are you concerned that discontinuing share repurchases when your book value is $0.92 is sending a bad message to prospective shareholders? Kim, do you want to take that one as well? Sure.
Speaker Change: Sure another question.
Speaker Change: Are you concerned they are discontinuing share repurchases.
Speaker Change: When your book value was 92 cents is sending a bad message.
Speaker Change: Two perspective shareholders.
Speaker Change: Kim you want to take that one as well.
Speaker Change: Sure.
Kim D. Thorpe: We're not concerned about the share repurchases for a few reasons. One is, and we haven't completely discounted share repurchases forever. The share repurchases are not, in and of themselves, the way forward with our long-term growth goal because we're buying stock back, and I understand why individual investors, some of our individual investors, feel as strongly as they do about share repurchases. But we, our duty is to provide. And we believe that the steps we're taking now, in concert with the recent Strategic Alternative Study we performed, are the way forward for the company.
Kim: Where we are not concerned about the share repurchases for a few reasons one is.
Kim: And we haven't completely discounted forever share repurchases the share repurchases are not good.
Kim: And in of themselves the <unk>.
Kim: Way forward with our long term growth goals.
Kim: Because we are buying stock back and I understand why individual invest some of our individual investors.
Speaker Change: Neil as strongly as they do about share repurchases.
Speaker Change: But we our duty is to provide <unk>.
Stewardship.
Speaker Change: Sherri basis for all of our capital in all of our shareholders.
Speaker Change: And we believe that the steps we're taking now in concert with the recent strategic alternatives study we performed.
Speaker Change: Are the way forward for the company.
Kim D. Thorpe: So yeah, I hope it's not sending a bad message. The message it's supposed to send is that we believe very strongly that we have alternative uses for capital that will improve shareholder return even more than share repurchases. So those are my thoughts on that.
Speaker Change: So.
Speaker Change: Yeah.
Speaker Change: I hope, it's not setting a bad message. The message is suppose to send is that we believe very strongly that we have alternative uses for capital that will improve shareholder return even more than share repurchases.
Speaker Change: Those are my thoughts on that.
Kim: Thank you Kim.
Derek E. Dewan: So the next question is in regard to acquisitions, but I do want to mention on the call that yesterday, an IT staffing company called TSRI, which happens to be the name of the company TSR, Inc., traded on the NASDAQ under TSRI, agreed to be acquired at a 71% premium over its trading price. TSRI's gross margins, and we know our peer group really well, are around 17.5 to 18 percent.
Speaker Change: So the next question is in regard to acquisitions, but I do want to mention on the <unk>.
Speaker Change: On the call.
Speaker Change: That yesterday.
Speaker Change: Oh, it staffing company called with the ticker symbol T S. All right, which happens to be the name.
Speaker Change:
Speaker Change: Of the company T. S. R Inc traded on the NASDAQ under T. S. R I.
Speaker Change: Agreed to be acquired at a 71% premium.
Speaker Change: Over its trading price.
Speaker Change: T. S. R is gross margins and we know our peer groups really well.
Speaker Change: Around 17.5% to 18%.
Derek E. Dewan: Progress margins are 31.5% this quarter, and that's down from our usual highs of 34% to 37 percent. Also, our contract gross margin by itself, without the influence of PERM, is in the mid and upper 20s from a performance metric standpoint.
Speaker Change: Our gross margins were 31, 5% this quarter and that's down from our.
Speaker Change: Usual highs of 34%.
Speaker Change: To 37%.
Speaker Change: Also our contract gross margin by itself without the influence of Perm.
Speaker Change: As in the mid and upper Twenty's.
Speaker Change: So.
From a performance metric standpoint.
Derek E. Dewan: It's very appealing to look at our company from an undervalued standpoint. That's just one indication of how undervalued the trading prices are for the entire group. I just wanted to point that out.
Speaker Change: It's very appealing.
Speaker Change: Right.
To look at our company from a undervalued standpoint.
Speaker Change: But that's just one indication of how undervalued.
Speaker Change: Trading prices are of the entire group.
Speaker Change: I just wanted to point that out and that announcement was made yesterday.
Derek E. Dewan: And that announcement was made yesterday, an all cash deal. Um, I think what's important to look at the question that I have before me, are suitable acquisitions, and Niche Staffing, appealing to you. The answer is absolutely yes.
Speaker Change: An all cash deal.
Speaker Change: I think what's important to look at the question that I have before me.
Speaker Change: Are suitable acquisitions and.
Speaker Change: Nice staffing.
Speaker Change: Appealing to you.
Speaker Change: The answer is absolutely, yes, we do have a health care component.
Derek E. Dewan: We do have a health care component, dealing with medical scribes. We're in the IT and accounting and finance verticals. And if we find a niche business that fits in nicely or is in one of our existing verticals, for sure, that would be appealing. And what multiples might we pay for the acquisition? And would we use stock? for an M&A transaction? The multiples range from five to eight times, depending upon the type of business it is and whether or not there's synergies to bring the multiple down, among other things, the type of consideration used, and various other factors, growth rates, margins, and so forth.
Speaker Change: Dealing with medical scribes.
Speaker Change: We're in the I T and accounting and finance verticals.
Speaker Change: And if we find a niche business that fits in nicely or is in one of our existing verticals for sure that would be appealing and what multiples might we pay.
Speaker Change: For acquisitions.
Speaker Change: And would we use stock.
Speaker Change: For an M&A transaction.
Speaker Change: Multiple <unk> range from five to eight times depending upon.
Speaker Change: The.
Speaker Change: Type of business, it is and whether or not there are synergies to bring the multiple down among other things the type of consideration used in various other factors growth rates margins and so forth.
Derek E. Dewan: Clearly, would we use stock of the GEE Group? We would only contemplate using GEE Group stock that was highly valued. For example, if our peer just got acquired at a 71% premium. If you apply the 71% premium to our stock price, that may be attractive to use some equity on a deal, particularly if it's someone that would like to grow their equity value with our company but clearly wouldn't use it at the depressed level that we've seen in recent times.
Speaker Change: Clearly would we use stock.
Speaker Change: G group.
Speaker Change: We would only contemplate using G group stock there.
Speaker Change: We're highly valued for example, if our peer just got acquired at a 71% premium.
Speaker Change: If you apply the 71% premium to our stock price that may be attractive to use some equity on a deal, particularly if it's someone that would like to grow their equity value with our company. We clearly wouldnt use it if the depressed levels that we've seen of recent times.
Derek E. Dewan: Another question is, On the December call, we saw some signs of improvement in January, better than December, but March was a low month in terms of revenue. The March quarter, or the March quarter, is typically our lowest quarter in the fiscal year.
Speaker Change: Another question is.
Speaker Change: In the December call, we saw some signs of improvement in January.
Speaker Change: Better than December but March was the low.
Speaker Change: Low report in terms of revenue.
Speaker Change: The March quarter or the March quarter is typically.
Speaker Change: Our lowest quarter in the fiscal year.
Derek E. Dewan: There are a lot of peaks and valleys on the contract staffing side and also on the direct hire side. However, we do look at trend loss, and Kim, you can comment on our trends. We also have on the call after you comment, Kim. I'd like Alex Stuckey, our Chief Operating Officer, to comment too because he has been on top of the trends, and I'd like to hear his commentary and share it with you on the street. Kim?
Speaker Change: There's a lot of peaks and valleys in the contract staffing side.
Speaker Change: And also on the direct hire side.
However, we do look at trend lines and can be you can comment on our trends. We also have on the call. After you comment Kim I'd like Alex Stuckey, our Chief operating officer to comment too because he has been on top of the trending and I liked to hear his commentary and share it with you in the Street Kim.
Speaker Change: Yeah.
Speaker Change: First of all let me answer the question.
Speaker Change: April.
Revenues are up.
Kim D. Thorpe: The detailed question, in part, is that we thought we saw improvement in January, but now the quarter is lower than December. And now we're saying April is better than March. April is better than March. April is better than the average of January through March. And May, so far, is looking very promising.
Kim: The detailed question in part is we thought we saw improvement in January but now the quarter is lower than December.
Speaker Change: And now we're saying April was better than March April is better than March April was better than the average.
Speaker Change: January through March and May so far is looking very promising.
Kim D. Thorpe: So, that's the answer to that. Alex, do you want to comment? Sure, to go a little further and a little deeper.
Speaker Change: So that's the answer to that Alex do you want to try that sure I can go a little further and a little deeper on that we see green shoots across all of our verticals and across all of our brands.
Alex Stuckey: Sure. To go a little further and a little deeper on that, we see green shoots across all of our verticals and across all of our brands in order flow and in placements, and we feel like the summer is going to produce a substantially different result than we've seen in the past. We believe that we have hit the bottom. Yes, when we hit the bottom, we feel like the bottom has been hit, and like I said, we see green shoots across all verticals and all brands in order flow, so we feel very positive about the coming summer.
Speaker Change: In order flow and in in placements and we feel like the summer is going to produce a substantially different result than we've seen in the past. We believe that we have hit the bottom you asked when we hit the bottom we feel like the bottom has been hit and like I said, we see green shoots across all verticals.
And all brands in order flow so we feel.
Speaker Change: Dave about the coming summer.
Alex: Thank you Alex.
Derek E. Dewan: Another question is business is getting more competitive. Is there overcapacity in the industry at this time? How do you see this being rationalized?
Speaker Change: And another question is business is getting more competitive competitive.
Speaker Change: Is there overcapacity in the industry at this time, how do you see this being rationalized.
Derek E. Dewan: I've been in the industry since the 1990s, and the industry, if you look at its growth rate, has been solidly upward with a few dips for recessionary periods along the way. What we're finding is, because of the robust nature of technology and the verticals we're in, of the Demand Environment, when people are confident in the economy, they do things that right now aren't happening.
Speaker Change: I've been in the industry.
Speaker Change: The nineties and the.
Speaker Change: The industry. If you look at its growth rate has been solidly upward with a few dips for recessionary periods.
Speaker Change: Along the way.
Speaker Change: What we're finding is.
Speaker Change: Because of the robust.
Speaker Change: Nature of technology, and the verticals were in the.
Speaker Change: The demand environment.
Speaker Change: When people.
Speaker Change: Our confidence in the economic aspects.
Speaker Change: Aspects of the economy growing for example, or.
Speaker Change: At lower rates things sit right now arent happening.
Derek E. Dewan: When those times come, demand usually exceeds supply, and staffing companies have more job orders than they can fill. We anticipate we'll get there again soon, but we're tracking it very tightly to make sure that our cost structure is appropriate for the revenue that we have, and we believe we'll get there. We don't believe there's an overcapacity problem. There's been a lot of consolidation in the industry, and if you look at the larger companies and what market share they have relative to all the other companies, still minuscule compared to the totality of the entire staffing industry. Water Industry Indicator, for the recovery. You heard some of those today, job orders coming in across each of the verticals or up. Those are the things we look at.
Speaker Change: When those turn.
Speaker Change: The demand usually exceeds the supply and staffing companies.
Speaker Change: I have more job orders and they can fill we anticipate we will get there again soon.
But we're tracking it very tightly to make sure that our cost structure is.
Speaker Change: As appropriate for the revenue that we have.
Speaker Change: And we believe we'll get there we don't believe there's an overcapacity.
Speaker Change: There's been a lot of consolidation in the industry.
Speaker Change: And.
Speaker Change: If you look at the larger companies and what market share they have relative to all the other companies. It is still minuscule.
Speaker Change: And compared to the totality of the entire staffing industry.
Speaker Change: Hmm.
Speaker Change: Water industry indicators.
Speaker Change: For the recovery you heard some of those today job orders.
Speaker Change: Coming in.
Speaker Change:
Speaker Change: Across each of the verticals are up.
Speaker Change: Those are the things we look at.
Derek E. Dewan: Here's another question. Is there a plan to look offshore to save recruiting costs in the U.S.? With demand being low, adding an offshore component to recruiting has been done successfully by several companies, and we are looking into that and would likely move forward with that, as our IT leader and his group agree that that's a viable option to enhance our recruiting capability at a lower cost. So the answer is yes. The total cash in hand was $21.2 million.
Speaker Change: Here's another question is there a plan to look offshore to save recruiting costs in the U S.
Speaker Change: With demand being low.
Speaker Change: Adding an offshore component to recruiting.
Speaker Change: It has been done successfully by.
Speaker Change: By several companies.
Speaker Change: And we are looking into that and would likely move forward with that as our I T leader.
Speaker Change: And his group.
Speaker Change: Group agree that that's a viable option to enhance our recruiting capability at a lower cost. So the answer is yes.
Speaker Change: Total cash in hand was $21 2 million.
Derek E. Dewan: That's what it was as of March 31. Yes, correct, and it's in that range now. To what do you attribute your higher than industry average gross margin on professional contract service? Alex, why don't you cover that since you're on top of the professional division as well?
Speaker Change: That's what it was as of March 31, Yes, correct and it's in that range now.
Speaker Change: What do you attribute your higher than industry average gross margin of professional contract services.
Speaker Change: Alex why don't you cover that since.
Alex: You're on top of the professional division as well.
Unknown Attendee: As Kim noted earlier, we have a very distinct group of customers that are in the mid-market range and are able and willing to pay a slightly higher spread than the much, much larger VMS and MSP type agreements and companies. So I believe that, because of the type of customers we have and our marketing strategy, that that's attributable to our higher gross margin and higher spread.
As Kim noted earlier, we have a very distinct group of customers that are in the mid market range.
Which are able and willing to pay a slightly higher <unk>.
Alex: Red than than the much much larger vms and MSP type agreements.
Alex: Companies.
Alex: So I believe that because of the type of customer we have and are you know.
Speaker Change: Our marketing strategy that that's attributable to our higher gross margin and higher spreads.
Thank you.
Derek E. Dewan: Another question relates to turnover and retention of top producers. We have been very successful in retaining top producers. Our tenure, our average tenure is very high, particularly with top producers. We just had our top producers on our annual sales award trip, with excellent feedback from them, and we really try to take care of our people across the board, and we have hired aggressively, additional top producers, potentially or with experience. So we're doing pretty well on retention, and we will continue to do the right things to keep our valuable staff. Someone said they were concerned about using stock at a cheap valuation? The answer is no; that will not happen. Next question.
Speaker Change: Another question relates to turnover and retention of top producers.
Speaker Change: We have been very successful in retaining top producers.
Speaker Change: Oh, our tenure, our average 10 years very high.
Speaker Change: Particularly with top producers, we just had our top producers.
Speaker Change: On our annual sales award trip.
Speaker Change: With excellent feedback from them.
Speaker Change: And we've really tried to take care of our people across the board.
And we have hired aggressively.
Speaker Change: Additional top producers potentially or with experience, so we're doing pretty well on retention.
Speaker Change: And we will continue to do the right things to keep our valuable staff.
Speaker Change:
Speaker Change: Someone said, they're concerned about using stock.
Speaker Change: At a cheap valuation the answer is no that will not happen.
Derek E. Dewan: Do you see investments in M&A that provide more returns in buying back your stock? That analysis was done by DC Advisory and made available to our Board of Directors and Management. We studied it and concurred that, at this time, that's the most optimal way to enhance shareholder value. As Kim said, in our capital allocation strategy, stock buybacks are still there at the appropriate time. We would initiate that if it was felt that
Speaker Change: Next question do you see investments in M&A that provide more returns in buying back your stock.
Speaker Change: That analysis was done by D C advisory.
Speaker Change: And made available to our board of directors and management team.
Speaker Change: We studied it and concurred that at this time.
Speaker Change: That's the most optimal way to enhance shareholder value.
Speaker Change: As Kim said in our capital allocation strategy stock buybacks are still there.
Speaker Change: And at the appropriate time.
Speaker Change: We would it.
Speaker Change: Initiate that if it was felt that.
Derek E. Dewan: The M&A side of the equation in organic growth wasn't getting to the answer, but we do believe we will get there. And. We could, in fact, add both at the same time, and that's a possibility. Have you seen signs of distress in your customers' ability to pay? Alex, on the receivable side, our DSOs run about 43, 44 days, correct?
Speaker Change: The M&A side of the equation and organic growth weren't I'm getting to the answer but we do believe we will get there.
Speaker Change: And we could in fact add both at the same time and that's a possibility.
Speaker Change: Have you seen signs of distress in your customers' ability to pay.
Speaker Change: Alex on the receivable side, our Dsos run about 43 44 days correct.
Unknown Attendee: That's correct. Receivables are holding at the same consistent level they have in the mid 40 range. We've had very good success with our receivables, and we don't have any signs of our particular customers having an inability to pay or asking for extended terms.
Alex: That's correct receivables are holding at the same consistent level they have in the in the mid 40 range.
Alex: We've had very good success with our receivables and we don't have any signs of a particular customers, having an inability to pay newer asking for extended terms.
Derek E. Dewan: Thank you. Another question is whether they've been receiving offers to be acquired. If so, what's the premium they're offering? Are these from peers? private equity. Well, I have to say that good companies are typically called to explore opportunities, to merge, to get bought or otherwise. And I think that it's safe to say that the premiums, one, as I said yesterday, was a 71% premium to the trading price of a public IT staffing company, which is significant. But yes, all the time. We always get opportunities.
Thank you another question as it had been receiving all offers to be acquired if so whats the premium they're offering are these from peers.
Speaker Change: Or private equity.
Speaker Change: Well I have to say that good companies typically are called.
Speaker Change: To explore opportunities.
Speaker Change: Yeah.
Speaker Change: To emerge to get bought or otherwise.
Speaker Change: And I think that it's safe to say that the premiums one as I said yesterday was a 71% premium to the trading price.
Speaker Change: A public I T staffing company.
Speaker Change: So.
Speaker Change: Which is significant.
Speaker Change: But yes, all the time, we always get opportunities and it if it makes sense from a shareholder value standpoint, we must consider that however, we're building this company for long term growth.
Derek E. Dewan: And if it makes sense from a shareholder value standpoint, we must consider that. However, we're building this company for long-term growth and enhancing shareholder value. All three of us are significant stockholders in the company, and we'd like to see our equity value really accelerate, as would you, our shareholder base. So, Yes, good companies will always get off; the best companies will continue to operate for maximum shareholder value. And, of course, we will do whatever's appropriate, at the right time, if opportunities come in. However, at depressed prices at this level, even a 70% premium only brings you back to a reasonable trading range.
Speaker Change: And enhancing shareholder value.
Speaker Change: All three of US are significant stockholders and the company and we'd like to see our equity value really accelerate as do you our shareholder base.
Speaker Change: Oh, yes, good companies will always get offers.
The best companies.
Speaker Change: Continue to operate for maximum shareholder value.
Speaker Change #100: Of course, we will do whatever is appropriate.
Speaker Change #101: At the right time.
Speaker Change #102: If opportunities come in however at depressed prices at this level, even a 70% premium.
Speaker Change #102: Only brings you back to a reasonable trading range. So.
Derek E. Dewan: So nonetheless, we are very, very confident that we will get to where we need to be from a shareholder value standpoint, and we really appreciate all of you that have been with us for some period of time and those new shareholders as well. We are working very, very hard to get the growth engine going, to get the earnings back to where we want them to be. And we believe that will help influence shareholder value, coupled with acquisition growth and other capital allocation strategies as we move forward.
Speaker Change #103: Nonetheless, we are very very confident that we will get to where we need to be from a shareholder value standpoint, and we really appreciate all of you.
Speaker Change #103: That have been with us for some period of time and those new shareholders as well.
We are working very very hard.
Speaker Change #103: To get the growth engine going to get the earnings back to where we want it to be.
Speaker Change #103: And we believe that will help influence shareholder value coupled with.
Speaker Change #104: Acquisition growth.
Speaker Change #104: And other capital allocation strategies as we move forward.
Derek E. Dewan: So that concludes our call today, and one other question, someone asked about a 13G filing. We had a 13G filing, but it was an existing shareholder and a very long-term shareholder who we communicate with regularly, so there were no surprises there. So the answer to that is no, there were no surprises.
Speaker Change #105: So that concludes our call today.
Speaker Change #105: And one one other question someone asked about a 13G filing.
Speaker Change #105:
Speaker Change #105: We had a 13D filing but it was an existing shareholder.
Speaker Change #106: And a very long term shareholder who we communicate with regularly so there was no surprises there. So the answer to that is no theres no surprises and we have.
Derek E. Dewan: And we have some very solid shareholders, including one of our directors who has a majority percentage of the company right now, about 9%. But we're very solid with our shareholders, and we appreciate your investment, and we are working hard to deliver. And that concludes our call today. Thanks again for coming on.
Speaker Change #106: Some very solid shareholders, including one of our directors, who owns who use them as a majority.
Speaker Change #107: Percentage of the company right now about 9%, but.
Speaker Change #108: Were very solid with our shareholders and we appreciate your investment and we are working hard to deliver and that concludes our call today.
Thanks again for coming on.
Speaker Change #108:
Speaker Change #108: <unk>.