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View All NewsRevenue falls 13% at GEE Group, but direct-hire revenue up
Revenue fell 12.6% at GEE Group (NYSE American: JOB) in its fiscal third quarter ended June 30. Contract staffing revenue fell 15.5% at the Jacksonville, Fla.-based staffing provider, but direct-hire revenue rose 6.7%.
| (US$ millions) | Q3 2018 | Q3 2017 | % change |
| Net revenue | $40,267 | $46,069 | -12.6% |
| Gross profit | $14,721 | $17,054 | -13.7% |
| Gross margin | 36.6% | 37.0% | |
| Net loss | ($1,887) | ($6,020) | nm |
GEE Group reported contract staffing revenue declined as a few key customers cut back on their use of temporary workers. In addition, the company took strategic actions in its professional services division to reduce the number of unproductive or underperforming full-time recruiters, account representatives, sales professionals and administrative support staff. Office closures also contributed to the decrease in revenue.
Revenue by segment
| (US$ thousands) | Q3 2018 | Q3 2017 | % change |
| Contract staffing services | $33.9 | $40.1 | -15.5% |
| Direct hire placement services | $6.4 | $6.0 | 6.7% |
Direct-hire revenue rose due to increased productivity from a smaller number of direct-hire placement personnel.
Quote
“The low white-collar unemployment rate and tight labor market coupled with strong GDP growth bodes well for the staffing industry in general and GEE Group in particular,” Chairman and CEO Derek Dewan said. “The demand for our services continues to be strong and the company is well-positioned to capitalize on the favorable macro backdrop with its enhanced menu of services, expanded geographic footprint and talented full-time and contract employees.”
Share price and market cap
Shares in GEE Group were down 2.65% at 9:30 a.m. Eastern time to $2.57. The company had a market cap of $27.3 million.