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Fortune's PEO revenue falls 29%

September 29 2009
Staffing Industry Analysts North American Daily News

Fortune Industries Inc. reported PEO revenue fell 28.6% to $53.5 million in the 10 months ended June 30, 2009, compared with $74.9 million for the full year ended Aug. 31, 2008, according to a 10-K filed Monday with the U.S. Securities and Exchange Commission.

PEO revenue fell amid a decrease in total number of worksite employees, according to the Indianapolis-based company.

PEO gross margin increased to 19.9% in the 10 months ended in June 30 from 17.9% in the previous fiscal year.

Fortune changed its fiscal year end to June 30 from August 31, resulting in its last fiscal year being just 10 months long.

Fortune also sold its non-PEO services on Nov. 30, 2008. Those services included its wireless infrastructure, transportation infrastructure, ultraviolet technologies and electronics integration segments.

Total revenue fell 54.0% to $72.9 million in the 10 months ended June 30, 2009, compared with $158.4 million in the previous full fiscal year.

The company posted net income available to common shareholders of $446,000 for the 10 months ended June 30, compared with a net loss available to common shareholders of $19.6 million in the prior fiscal year.

The 10-K includes a going concern note. However, the company said with its focus now on the PEO business, it should have adequate cash through June 30, 2010. The firm also reported in its 10-K that a conversion of debt to preferred stock by its majority shareholder will also lower debt service requirements in 2010.

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