General Employment Reports Slowdown in Hiring Led to Second Quarter And Six-Month Losses

Second Quarter Revenues Down 18% From Last Year



Six Month Revenues Decline 14%



Apr 25, 2001, 01:00 ET from General Employment Enterprises, Inc.

    OAKBROOK TERRACE, Ill., April 25 /PRNewswire/ -- General Employment
 Enterprises, Inc. (Amex:   JOB), hurt by an overall slowdown in hiring, reported
 a second quarter loss of $252,000, or $ .05 cents per share compared with net
 income of $556,000, or $ .11 cents per share in the same period for the prior
 year.
     Consolidated net revenues were $8,249,000 for the quarter, down 18% from
 the same quarter last year.
     General Employment, a national professional staffing Company, had a net
 loss of $104,000, or $ .02 per share on declining revenues of $17,161,000 for
 the six months ended March 31, 2001.
     Commenting on the Company's second quarter performance, Herb Imhoff,
 Chairman of the Board and Chief Executive Officer, said, "The past three
 months can best be characterized by stretched out hiring decisions, layoffs,
 new hirings put on hold and new projects put on the 'back burner'.  And, while
 these reactions did not affect all areas of the country, they certainly had an
 adverse overall impact on our revenues, particularly in our permanent
 placement division.  'Perm placement' fees were down 20% from last year's
 second quarter."
     Continuing his commentary, Mr. Imhoff went on to say, "It is difficult to
 predict with any certainty, but we believe that this slowdown in the economy
 will be short-lived.  Some bright spots in the offing  ...  although there has
 definitely been some real slowdown in hiring, a number of branch operations in
 the Northeast, Midwest and Southwest continue to turn in strong performances
 and quite a few are actually doing better than they did last year."
     General Employment's CEO added these comments  ...  "There continues to be
 a strong demand for highly qualified IT professionals.  Just a year ago, the
 Information Technology Association of America (ITAA) projected that about
 850,000 IT jobs would go unfilled, and although the ITAA is currently
 projecting a 50% decline in unfilled IT jobs, the number continues to be high,
 at 425,000 unfilled openings."
     "Another bright spot  ...  refocusing our placement and staffing efforts
 to include the placement of accounting and engineering professionals  ...
 it's working.  This is plus business."
     "We will continue to expand branch office operations that are growing
 rapidly and we'll be on the lookout for strategic acquisitions, but in the
 meantime, we are cutting costs.  We've closed three under-performing branch
 offices and we have plans to consolidate two offices within the next three
 months, reducing leasehold costs."  That's how Mr. Imhoff described the
 Company's cost reduction program.
     "In regards to growth, for the last few years we have said we wanted to
 enhance our expansion plans not only by opening new offices but also through
 making a profitable acquisition of an established IT contract staffing
 company.  We have done both.  In February, we opened a contract staffing
 office in Metropolitan Boston.  We now have three offices in the Boston area
 and believe the synergies of these offices will continue to make this one of
 our most effective networks.  And, on April 10, we completed the acquisition
 of Pittsburgh-based Generation Technologies, Inc.  This was a strategic
 decision to expand our scope of operations into Southwestern Pennsylvania and,
 at the same time, we've acquired a company that's an excellent fit with
 General Employment's operations."
     "During the quarter we paid a special $ .25 per share cash dividend to our
 shareholders of record on December 15, 2000, totaling $1,272,000, to reward
 all of our shareholders equally based on the number of shares they held and to
 continue to express the Board's positive outlook for the Company as it moves
 into the remaining portion of this year and next fiscal year."
     With the acquisition of Generation Technologies, Inc., General Employment
 and Triad Personnel provide information technology, technical, accounting and
 engineering staffing services, operating 41 branch offices in major
 metropolitan and suburban business centers in 13 states.  The Company's shares
 are traded on the American Stock Exchange under the trading symbol JOB.
 
     This news release contains forward-looking statements that are based on
 management's current expectations and are subject to risks and uncertainties.
 Some of the factors that could affect the Company's future performance include
 general business conditions, the demand for the Company's services, and the
 ability of the Company to attract and retain qualified personnel for regular
 full-time placement and contract project assignments, and the ability to
 attract and retain qualified corporate and branch management.
 
 
                        GENERAL EMPLOYMENT ENTERPRISES, INC.
                          CONSOLIDATED STATEMENT OF INCOME
 
     (In Thousands, Except
      Per Share)                  Three Months               Six Months
                                 Ended March 31            Ended March 31
                              2001          2000          2001         2000
 
     Net revenues:
       Placement services    $4,810       $ 5,988      $10,374       $11,309
       Contract services      3,439         4,034        6,787         8,602
                              8,249        10,022       17,161        19,911
 
     Operating expenses:
       Costs of contract
        services              2,248         2,693        4,396         5,665
       Selling                2,966         3,625        6,424         6,838
       General and
        administrative        3,586         2,913        6,833         5,723
                              8,800         9,231       17,653        18,226
 
     Income (loss) from
      operations               (551)          791         (492)        1,685
     Interest income            149           140          343           289
 
     Income (loss) before
      income taxes             (402)          931         (149)        1,974
     Provision (credit)
      for income taxes         (150)          375          (45)          795
 
     Net income (loss)        $(252)         $556        $(104)      $ 1,179
 
     Net income (loss)
      per share:
       Basic                  $(.05)         $.11         $(.02)        $.23
       Diluted                $(.05)         $.11        $(.02)         $.23
 
     Average number of
      shares:
       Basic                  5,087         5,087        5,087         5,087
       Diluted                5,087         5,123        5,087         5,123
 
 
                        GENERAL EMPLOYMENT ENTERPRISES, INC.
                 SUMMARIZED CONSOLIDATED BALANCE SHEET INFORMATION
 
     (In Thousands)                                  March 31     September 30
                                                       2001           2000
 
     Assets:
       Cash and short-term investments                $10,198        $12,706
       Other current assets                             4,605          4,430
 
       Current assets                                  14,803         17,136
       Property and equipment, net                      3,016          2,843
 
                                                      $17,819        $19,979
     Liabilities and shareholders' equity:
       Current liabilities                             $3,780         $5,836
       Shareholders' equity                            14,039         14,143
 
                                                      $17,819        $19,979
 
 

SOURCE General Employment Enterprises, Inc.
    OAKBROOK TERRACE, Ill., April 25 /PRNewswire/ -- General Employment
 Enterprises, Inc. (Amex:   JOB), hurt by an overall slowdown in hiring, reported
 a second quarter loss of $252,000, or $ .05 cents per share compared with net
 income of $556,000, or $ .11 cents per share in the same period for the prior
 year.
     Consolidated net revenues were $8,249,000 for the quarter, down 18% from
 the same quarter last year.
     General Employment, a national professional staffing Company, had a net
 loss of $104,000, or $ .02 per share on declining revenues of $17,161,000 for
 the six months ended March 31, 2001.
     Commenting on the Company's second quarter performance, Herb Imhoff,
 Chairman of the Board and Chief Executive Officer, said, "The past three
 months can best be characterized by stretched out hiring decisions, layoffs,
 new hirings put on hold and new projects put on the 'back burner'.  And, while
 these reactions did not affect all areas of the country, they certainly had an
 adverse overall impact on our revenues, particularly in our permanent
 placement division.  'Perm placement' fees were down 20% from last year's
 second quarter."
     Continuing his commentary, Mr. Imhoff went on to say, "It is difficult to
 predict with any certainty, but we believe that this slowdown in the economy
 will be short-lived.  Some bright spots in the offing  ...  although there has
 definitely been some real slowdown in hiring, a number of branch operations in
 the Northeast, Midwest and Southwest continue to turn in strong performances
 and quite a few are actually doing better than they did last year."
     General Employment's CEO added these comments  ...  "There continues to be
 a strong demand for highly qualified IT professionals.  Just a year ago, the
 Information Technology Association of America (ITAA) projected that about
 850,000 IT jobs would go unfilled, and although the ITAA is currently
 projecting a 50% decline in unfilled IT jobs, the number continues to be high,
 at 425,000 unfilled openings."
     "Another bright spot  ...  refocusing our placement and staffing efforts
 to include the placement of accounting and engineering professionals  ...
 it's working.  This is plus business."
     "We will continue to expand branch office operations that are growing
 rapidly and we'll be on the lookout for strategic acquisitions, but in the
 meantime, we are cutting costs.  We've closed three under-performing branch
 offices and we have plans to consolidate two offices within the next three
 months, reducing leasehold costs."  That's how Mr. Imhoff described the
 Company's cost reduction program.
     "In regards to growth, for the last few years we have said we wanted to
 enhance our expansion plans not only by opening new offices but also through
 making a profitable acquisition of an established IT contract staffing
 company.  We have done both.  In February, we opened a contract staffing
 office in Metropolitan Boston.  We now have three offices in the Boston area
 and believe the synergies of these offices will continue to make this one of
 our most effective networks.  And, on April 10, we completed the acquisition
 of Pittsburgh-based Generation Technologies, Inc.  This was a strategic
 decision to expand our scope of operations into Southwestern Pennsylvania and,
 at the same time, we've acquired a company that's an excellent fit with
 General Employment's operations."
     "During the quarter we paid a special $ .25 per share cash dividend to our
 shareholders of record on December 15, 2000, totaling $1,272,000, to reward
 all of our shareholders equally based on the number of shares they held and to
 continue to express the Board's positive outlook for the Company as it moves
 into the remaining portion of this year and next fiscal year."
     With the acquisition of Generation Technologies, Inc., General Employment
 and Triad Personnel provide information technology, technical, accounting and
 engineering staffing services, operating 41 branch offices in major
 metropolitan and suburban business centers in 13 states.  The Company's shares
 are traded on the American Stock Exchange under the trading symbol JOB.
 
     This news release contains forward-looking statements that are based on
 management's current expectations and are subject to risks and uncertainties.
 Some of the factors that could affect the Company's future performance include
 general business conditions, the demand for the Company's services, and the
 ability of the Company to attract and retain qualified personnel for regular
 full-time placement and contract project assignments, and the ability to
 attract and retain qualified corporate and branch management.
 
 
                        GENERAL EMPLOYMENT ENTERPRISES, INC.
                          CONSOLIDATED STATEMENT OF INCOME
 
     (In Thousands, Except
      Per Share)                  Three Months               Six Months
                                 Ended March 31            Ended March 31
                              2001          2000          2001         2000
 
     Net revenues:
       Placement services    $4,810       $ 5,988      $10,374       $11,309
       Contract services      3,439         4,034        6,787         8,602
                              8,249        10,022       17,161        19,911
 
     Operating expenses:
       Costs of contract
        services              2,248         2,693        4,396         5,665
       Selling                2,966         3,625        6,424         6,838
       General and
        administrative        3,586         2,913        6,833         5,723
                              8,800         9,231       17,653        18,226
 
     Income (loss) from
      operations               (551)          791         (492)        1,685
     Interest income            149           140          343           289
 
     Income (loss) before
      income taxes             (402)          931         (149)        1,974
     Provision (credit)
      for income taxes         (150)          375          (45)          795
 
     Net income (loss)        $(252)         $556        $(104)      $ 1,179
 
     Net income (loss)
      per share:
       Basic                  $(.05)         $.11         $(.02)        $.23
       Diluted                $(.05)         $.11        $(.02)         $.23
 
     Average number of
      shares:
       Basic                  5,087         5,087        5,087         5,087
       Diluted                5,087         5,123        5,087         5,123
 
 
                        GENERAL EMPLOYMENT ENTERPRISES, INC.
                 SUMMARIZED CONSOLIDATED BALANCE SHEET INFORMATION
 
     (In Thousands)                                  March 31     September 30
                                                       2001           2000
 
     Assets:
       Cash and short-term investments                $10,198        $12,706
       Other current assets                             4,605          4,430
 
       Current assets                                  14,803         17,136
       Property and equipment, net                      3,016          2,843
 
                                                      $17,819        $19,979
     Liabilities and shareholders' equity:
       Current liabilities                             $3,780         $5,836
       Shareholders' equity                            14,039         14,143
 
                                                      $17,819        $19,979
 
 SOURCE  General Employment Enterprises, Inc.

RELATED LINKS

http://www.generalemployment.com