The following is a summary of the GEE Group Inc. (JOB) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Consolidated revenues for Q3 2024 were $29.5 million, reducing by 23% compared to the prior year, with a year-to-date revenue of $88.1 million down by 25%.

• Both gross profit and margin experienced a decline with Q3 gross profit at $9.6 million and margin at 32.6%, down 30% and 150 basis points from the previous year respectively.

• The company reported a net loss of $19.3 million for the quarter and a net loss of $21.8 million year-to-date.

• EBITDA for the quarter was negative $600,000, with adjusted EBITDA also negative at $400,000.

Business Progress:

• Despite facing economic and staffing industry challenges, GEE Group is ready to leverage its strong balance sheet for future growth.

• The company is ramping up M&A activities and streamlining operations to improve financial results and accelerate the integration of future acquisitions.

• GEE Group is integrating its legacy systems onto cloud-based platforms to achieve economies of scale and improve operations.

• The company maintains a strategy to grow organically and through mergers and acquisitions while taking measures to ensure operational efficiency and reduce costs.

Opportunities:

• Increased focus on mergers, acquisitions, and streamlined operations present significant growth opportunities.

• Investment in technology and cloud-based systems to drive improvements in operational efficiency and service delivery, positioning the company for accelerated growth once economic conditions improve.

Risks:

• Current and anticipated near-term macroeconomic conditions, characterized by high interest rates, inflation, and a trembling economy have severely affected demand for staffing services leading to reduced revenues and increased net losses.

• Economic conditions have imposed a near universal cooling effect on U.S. employment, slowing down the staffing market and affecting job orders.

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