Cover
Cover - shares | 3 Months Ended | |
Dec. 31, 2023 | Feb. 12, 2024 | |
Cover [Abstract] | ||
Entity Registrant Name | GEE GROUP INC. | |
Entity Central Index Key | 0000040570 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Dec. 31, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
Entity Common Stock Shares Outstanding | 108,771,578 | |
Entity File Number | 1-05707 | |
Entity Incorporation State Country Code | IL | |
Entity Tax Identification Number | 36-6097429 | |
Entity Address Address Line 1 | 7751 Belfort Parkway | |
Entity Address Address Line 2 | Suite 150 | |
Entity Address City Or Town | Jacksonville | |
Entity Address State Or Province | FL | |
Entity Address Postal Zip Code | 32256 | |
City Area Code | 630 | |
Local Phone Number | 954-0400 | |
Security 12b Title | Common Stock, no par value | |
Trading Symbol | JOB | |
Security Exchange Name | NYSE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
CURRENT ASSETS: | ||
Cash | $ 19,910 | $ 22,471 |
Accounts receivable, less allowances ($591 and $562, respectively) | 15,853 | 18,451 |
Prepaid expenses and other current assets | 1,286 | 847 |
Total current assets | 37,049 | 41,769 |
Property and equipment, net | 780 | 846 |
Goodwill | 61,293 | 61,293 |
Intangible assets, net | 7,686 | 8,406 |
Deferred tax assets, net | 7,064 | 7,064 |
Right-of-use assets | 3,274 | 3,637 |
Other long-term assets | 480 | 596 |
TOTAL ASSETS | 117,626 | 123,611 |
CURRENT LIABILITIES: | ||
Accounts payable | 2,486 | 2,762 |
Accrued compensation | 3,358 | 5,464 |
Current operating lease liabilities | 1,377 | 1,475 |
Other current liabilities | 1,705 | 1,778 |
Total current liabilities | 8,926 | 11,479 |
Noncurrent operating lease liabilities | 2,186 | 2,470 |
Other long-term liabilities | 190 | 361 |
Total liabilities | 11,302 | 14,310 |
SHAREHOLDERS' EQUITY: | ||
Common stock, no par value; authorized - 200,000 shares; 114,900 shares issued and 108,772 shares outstanding at December 31, 2023, and 114,900 shares issued and 111,489 shares outstanding at September 30, 2023 | 113,068 | 112,915 |
Accumulated deficit | (3,185) | (1,630) |
Treasury stock; at cost - 6,128 shares at December 31, 2023 and 3,411 shares at September 30, 2023 | (3,559) | (1,984) |
Total shareholders' equity | 106,324 | 109,301 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 117,626 | $ 123,611 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances | $ 591 | $ 562 |
Treasury stock shares | 6,128,000 | 3,411,000 |
Common stock, par value | $ 0 | $ 0 |
Common stock, share authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 114,900,000 | 114,900,000 |
Common stock, shares outstanding | 108,772,000 | 111,489,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
NET REVENUES: | ||
Contract staffing services | $ 27,576 | $ 35,401 |
Direct hire placement services | 3,055 | 5,747 |
NET REVENUES | 30,631 | 41,148 |
Cost of contract services | 20,895 | 26,757 |
GROSS PROFIT | 9,736 | 14,391 |
Selling, general and administrative expenses | 10,606 | 12,808 |
Depreciation expense | 84 | 101 |
Amortization of intangible assets | 720 | 720 |
INCOME (LOSS) FROM OPERATIONS | (1,674) | 762 |
Interest expense | (71) | (73) |
Interest income | 190 | 38 |
INCOME (LOSS) BEFORE INCOME TAX PROVISION | (1,555) | 727 |
Provision for income tax expense | 0 | 73 |
NET INCOME (LOSS) | $ (1,555) | $ 654 |
BASIC EARNINGS (LOSS) PER SHARE | $ (0.01) | $ 0.01 |
DILUTED EARNINGS (LOSS) PER SHARE | $ (0.01) | $ 0.01 |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||
BASIC | 109,907 | 114,450 |
DILUTED | 109,907 | 114,885 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Accumulated Deficit | Treasury Stocks |
Balance, shares at Sep. 30, 2022 | 114,450 | |||
Balance, amount at Sep. 30, 2022 | $ 101,003 | $ 112,051 | $ (11,048) | $ 0 |
Share-based compensation | 374 | 374 | 0 | 0 |
Net income (loss) | 654 | $ 0 | 654 | 0 |
Balance, shares at Dec. 31, 2022 | 114,450 | |||
Balance, amount at Dec. 31, 2022 | 102,031 | $ 112,425 | (10,394) | 0 |
Balance, shares at Sep. 30, 2023 | 114,900 | |||
Balance, amount at Sep. 30, 2023 | 109,301 | $ 112,915 | (1,630) | (1,984) |
Share-based compensation | 153 | 153 | 0 | 0 |
Net income (loss) | (1,555) | 0 | (1,555) | 0 |
Purchase of treasury stock | (1,575) | $ 0 | 0 | (1,575) |
Balance, shares at Dec. 31, 2023 | 114,900 | |||
Balance, amount at Dec. 31, 2023 | $ 106,324 | $ 113,068 | $ (3,185) | $ (3,559) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ (1,555) | $ 654 |
Adjustments to reconcile net income (loss) to cash used in operating activities: | ||
Depreciation and amortization | 804 | 821 |
Non-cash lease expense | 363 | 351 |
Share-based compensation | 153 | 374 |
Increase (decrease) in allowance for credit losses | 65 | (7) |
Deferred income taxes | 0 | 52 |
Amortization of debt discount | 38 | 38 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,533 | 2,438 |
Accounts payable | (276) | (89) |
Accrued compensation | (2,106) | (915) |
Other assets | (436) | (114) |
Other liabilities | (502) | (3,880) |
Net cash used in operating activities | (919) | (277) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of property and equipment | (26) | (50) |
Net cash used in investing activities | (26) | (50) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Purchases of treasury stock | (1,575) | 0 |
Payments on finance leases | (41) | (49) |
Net cash used in financing activities | (1,616) | (49) |
Net change in cash | (2,561) | (376) |
Cash at beginning of period | 22,471 | 18,848 |
Cash at end of period | 19,910 | 18,472 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | 32 | 35 |
Cash paid for taxes | $ 25 | $ 0 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Dec. 31, 2023 | |
Basis of Presentation | |
Basis of Presentation | 1. B asis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three-month period ended December 31, 2023 are not necessarily indicative of the results that may be expected for the year ending September 30, 2024. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2023 as filed on December 18, 2023. Certain reclassifications have been made to the prior year’s condensed consolidated financial statements and/or related disclosures to conform to the current year’s presentation. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Dec. 31, 2023 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | 2. Recent Accounting Pronouncements Recently Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting |
Allowance for Credit Losses and
Allowance for Credit Losses and Falloffs | 3 Months Ended |
Dec. 31, 2023 | |
Allowance for Credit Losses and Falloffs | |
Allowance for Doubtful Accounts and Falloffs | 3. Allowance for Credit Losses and Falloffs Allowance for Credit Losses The Company adopted the methodology under Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses As of December 31, 2023 and September 30, 2023 the allowance for credit losses was $591 and $562, respectively. A summary of changes in this account is as follows: Allowance for credit losses as of September 30, 2023 $ 562 Provisions for credit losses 65 Accounts receivable write-offs (36 ) Allowance for credit losses as of December 31, 2023 $ 591 Liabilities for Direct Hire Placement Falloffs Direct hire placement service revenues from contracts with customers are recognized when employment candidates accept offers of employment, less a provision for estimated credits or refunds to customers as the result of applicants not remaining employed for the entirety of the Company’s guarantee period (referred to as “falloffs”). The Company’s guarantee periods for permanently placed employees generally range from 60 to 90 days from the date of hire. Charges for expected future falloffs are recorded as reductions of revenues for estimated losses due to applicants not remaining employed for the Company’s guarantee period. In connection with the adoption of ASU 2016-13, the Company has reclassified its allowance for falloffs from being combined with the former allowance for doubtful accounts, a contra-asset, to other current liabilities. Liabilities for falloffs and refunds during the period are reflected in the unaudited condensed consolidated balance sheets in the amounts of $115 and $118, as of December 31, 2023, and September 30, 3023, respectively. The corresponding charges included in the condensed consolidated statements of operations as reductions of direct hire placement service revenues were approximately $244 and $165 for the three months ended December 31, 2023 and 2022, respectively. |
Advertising Expenses
Advertising Expenses | 3 Months Ended |
Dec. 31, 2023 | |
Advertising Expenses | |
Advertising Expenses | 4. Advertising Expenses The Company expenses the costs of print and internet media advertising and promotions as incurred and reports these costs in selling, general and administrative expenses. Advertising expenses totaled $541 and $581 for the three months ended December 31, 2023 and 2022, respectively. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Dec. 31, 2023 | |
Earnings per Share | |
Earnings per Share | 5. Earnings per Share Basic earnings per share are computed by dividing net income attributable to common stockholders by the weighted average common shares outstanding for the period, which is computed using shares issued and outstanding. Diluted earnings per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the vesting of restricted shares granted but unissued, exercise of stock options and warrants. The dilutive effect of the common stock equivalents is reflected in earnings per share by use of the treasury stock method. The weighted average dilutive incremental shares, or common stock equivalents, included in the calculations of dilutive shares were 435 for the three months ended December 31, 2022. Due to the loss of continuing operations reported for the three months ended December 31, 2023, there were no dilutive incremental shares considered in the calculation of dilutive shares. Common stock equivalents, which are excluded because their effect is anti-dilutive, were approximately 3,682 and 3,373 for the three-month periods ended December 31, 2023 and 2022, respectively. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Dec. 31, 2023 | |
Property and Equipment | |
Property and Equipment | 6. Property and Equipment Property and equipment, net consisted of the following: December 31, 2023 September 30, 2023 Computer software $ 481 $ 481 Office equipment, furniture, fixtures and leasehold improvements 3,839 3,828 Total property and equipment, at cost 4,320 4,309 Accumulated depreciation and amortization (3,540 ) (3,463 ) Property and equipment, net $ 780 $ 846 |
Leases
Leases | 3 Months Ended |
Dec. 31, 2023 | |
Leases | |
Leases | 7. Leases The Company occasionally acquires equipment under finance leases including hardware and software used by our IT department to improve security and capacity, vehicles used by our Industrial Segment, and certain furniture for our offices. Terms for these leases generally range from two to six years. Supplemental balance sheet information related to finance leases consisted of the following: December 31, 2023 September 30, 2023 Weighted average remaining lease term for finance leases 2.6 years 2.8 years Weighted average discount rate for finance leases 6.5 % 6.6 % The table below reconciles the undiscounted future minimum lease payments under non-cancelable finance lease agreements to the total finance lease liabilities recognized on the unaudited condensed consolidated balance sheets, included in other current liabilities and other long-term liabilities, as of December 31, 2023: Remainder of Fiscal 2024 $ 119 Fiscal 2025 108 Fiscal 2026 105 Fiscal 2027 21 Fiscal 2028 - Less: Imputed interest (33 ) Present value of finance lease liabilities (a) $ 320 (a) Includes current portion of $130 for finance leases. The Company leases space for all its branch offices, which are generally located either in downtown or suburban business centers, and for its corporate headquarters. Branch offices are generally leased over periods ranging from three to five years. The corporate office lease expires in 2026. The Company’s leases generally provide for payment of basic rent plus a share of building real estate taxes, maintenance costs and utilities. Operating lease expenses were $530 and $588 for the three-month periods ended December 31, 2023 and 2022, respectively. Supplemental cash flow information related to operating leases consisted of the following: Three Months Ended December 31, 2023 2022 Cash paid for operating lease liabilities $ 430 $ 473 Right-of-use assets obtained in exchange for new operating lease liabilities - 518 Supplemental balance sheet information related to operating leases consisted of the following: December 31, 2023 September 30, 2023 Weighted average remaining lease term for operating leases 1.9 years 2.2 years Weighted average discount rate for operating leases 5.7 % 5.7 % The table below reconciles the undiscounted future minimum lease payments under non-cancelable lease agreements having initial terms in excess of one year to the total operating lease liabilities recognized on the unaudited condensed consolidated balance sheet as of December 31, 2023, including certain closed offices are as follows: Remainder of Fiscal 2024 $ 1,227 Fiscal 2025 1,111 Fiscal 2026 700 Fiscal 2027 544 Fiscal 2028 302 Less: Imputed interest (321 ) Present value of operating lease liabilities (a) $ 3,563 (a) Includes current portion of $1,377 for operating leases. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 8. Goodwill and Intangible Assets Goodwill For purposes of performing its annual goodwill impairment assessment as of September 30, 2023, the Company applied certain valuation techniques and assumptions to its professional and industrial reporting units and considered recent trends in the Company’s stock price, implied control or acquisition premiums, earnings, and other possible factors and their effects on estimated fair value of the Company’s reporting units. Upon completion of the Company’s most recent annual goodwill impairment assessment performed as of September 30, 2023, it was determined that its goodwill was not impaired. In view of the decline in operating results and net loss experienced in the three-month period ended December 31, 2023, management considered whether these results are representative of a permanent or longer-term change in trend and a triggering event. The Company updated its financial forecast for the December 2023 quarterly results and performed sensitivity tests on the recent annual goodwill impairment analysis completed as of September 30, 2023, using the updated information. The results of the sensitivity testing indicate that the conclusions of the recent annual goodwill assessment would not have changed using the updated financial forecasts and management has concluded that the most recent quarterly results do not indicate a potential impairment of the recorded goodwill of the Company’s reporting units as of December 31, 2023. Accordingly, no impairment charge was recognized during the three-month period ended December 31, 2023. Intangible Assets The following tables set forth the costs, accumulated amortization and net book value of the Company’s separately identifiable intangible assets as of December 31, 2023 and September 30, 2023 and estimated future amortization expense. December 31, 2023 September 30, 2023 Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Customer relationships $ 29,070 $ (21,780 ) $ 7,290 $ 29,070 $ (21,120 ) $ 7,950 Trade names 8,329 (7,933 ) 396 8,329 (7,873 ) 456 Total $ 37,399 $ (29,713 ) $ 7,686 $ 37,399 $ (28,993 ) $ 8,406 Remainder of Fiscal 2024 $ 2,159 Fiscal 2025 2,741 Fiscal 2026 1,870 Fiscal 2027 916 Fiscal 2028 - $ 7,686 Intangible assets that represent customer relationships are amortized on the basis of estimated future undiscounted cash flows or using the straight-line basis over estimated remaining useful lives of five to ten years. Trade names are amortized on a straight-line basis over their respective estimated useful lives of between five and ten years. |
Senior Bank Loan Security and G
Senior Bank Loan Security and Guarantee Agreement | 3 Months Ended |
Dec. 31, 2023 | |
Senior Bank Loan Security and Guarantee Agreement | |
Senior Bank Loan, Security and Guarantee Agreement | 9 . Senior Bank Loan, Security and Guarantee Agreement The Company and its subsidiaries have a Loan, Security and Guaranty Agreement for a $20 million asset-based senior secured revolving credit facility with CIT Bank, N.A. The CIT Facility is collateralized by 100% of the assets of the Company and its subsidiaries who are co-borrowers and/or guarantors. The CIT Facility matures on the fifth anniversary of the closing date (May 14, 2026). As of December 31, 2023, the Company had no outstanding borrowings and $9,348 available for borrowing under the terms of the CIT Facility. The Company had $370 and $408 in unamortized debt issuance costs associated with the CIT Facility as of December 31, 2023 and September 30, 2023, respectively. The amortization expense of these debt costs totaled $38 for both three-month periods ended December 31, 2023 and 2022. The unused line fees incurred and included in interest expense totaled $26 for both three-month periods ended December 31, 2023 and 2022. On December 15, 2023, the Company and CIT Bank entered into Amendment No. 2 to the CIT Facility (“Amendment No. 2”), which provides for an increase in the CIT Facility’s concentration limits for certain large clients at the discretion of CIT Bank. |
Shareholders Equity (Share-base
Shareholders Equity (Share-based Compensation and Share Repurchase Program) | 3 Months Ended |
Dec. 31, 2023 | |
Shareholders Equity (Share-based Compensation and Share Repurchase Program) | |
Shareholders' Equity (Share-based Compensation and Share Repurchase Program) | 10. Shareholders’ Equity (Share-based Compensation and Share Repurchase Program) Share-based Compensation Amended and Restated 2013 Incentive Stock Plan, as amended As of December 31, 2023, there were vested and unvested shares of restricted stock and stock options outstanding under the Company’s Amended and Restated 2013 Incentive Stock Plan, as amended (“Incentive Stock Plan”). During fiscal 2021, the Incentive Stock Plan was amended to increase the total shares available for restricted stock and stock options by 10,000 to a total of 15,000 (7,500 restricted stock shares and 7,500 stock option shares). The Incentive Stock Plan authorizes the Compensation Committee of the Board of Directors to grant either incentive or non-statutory stock options to employees. Vesting periods are established by the Compensation Committee at the time of grant. As of December 31, 2023, there were 7,915 shares available to be granted under the Plan (4,021 shares available for restricted stock grants and 3,894 shares available for non-qualified stock option grants). Restricted Stock On September 27, 2022, the Company adopted a new annual incentive compensation program (“AICP”) for its executives to be administered under the Company’s Incentive Stock Plan. The AICP includes a long-term incentive (“LTI”) compensation plan in the form of restricted stock awards comprised of two components: one that vests based on future service only, and a second that vests based on future service and performance. Initial awards under both service-only and service plus performance-based components of the AICP LTI plan are determined based on financial performance measures for the immediately preceding fiscal year. The Company granted 195 shares of restricted stock under the AICP during the three months ended December 31, 2023. Of the 195 shares granted, 164 were granted based on actual fiscal 2023 results and will cliff vest on December 1, 2026, based on future service only. Of the remaining 31 shares granted which vest based on future service and performance, 5 were granted based on fiscal 2023 results and will cliff vest on December 1, 2026, the third anniversary from their date of grant. The remaining 26 future service and performance-based shares granted were based on fiscal 2022 results and will cliff vest on December 1, 2025, the second anniversary from their date of grant. The 31 service plus performance-based restricted shares are subject to adjustment over their corresponding fiscal 2024 reporting period based on probability of achieving the fiscal 2024 financial targets set by the Company’s Board of Directors. The shares currently reported have been adjusted based on the probable outcome as compared to these financial targets. The final number of fiscal 2023 and 2022 service plus performance-based restricted shares granted will be determined once the actual financial performance of the Company is determined for fiscal 2024. Share-based compensation expense attributable to restricted stock was $74 and $87 during the three months ended December 31, 2023 and 2022, respectively. As of December 31, 2023, there was approximately $539 of unrecognized compensation expense related to restricted stock outstanding and the weighted average vesting period for those grants was 2.98 years. Number of Shares Weighted Average Fair Value ($) Non-vested restricted stock outstanding as of September 30, 2023 1,384 0.62 Granted 195 0.54 Vested - - Non-vested restricted stock outstanding as of December 31, 2023 1,579 0.61 Warrants The Company had 77 warrants outstanding as of December 31, 2023 and September 30, 2023 with a weighted average exercise price per share of $2 and a weighted average remaining contractual life of 1.25 and 1.50, respectively. No warrants were granted or expired during the three months ended December 31, 2023. Stock Options All stock options outstanding as of December 31, 2023 and September 30, 2023 were non-qualified stock options, had exercise prices equal to the market price on the date of grant, and had expiration dates ten years from the date of grant. The Company did not grant stock options during the three months ended December 31, 2023. The Company’s stock options previously granted generally vest on annual schedules during periods ranging from two to four years, although some options are fully vested upon grant. Share-based compensation expense attributable to stock options is recognized over their estimated remaining lives and was $79 and $287 for the three months ended December 31, 2023 and 2022, respectively. As of December 31, 2023, there was approximately $792 of unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was 3.98 years. A summary of stock option activity is as follows: Number of Shares Weighted Average Exercise Price per share ($) Weighted Average Fair Value per share ($) Weighted Average Remaining Contractual Life (Years) Total Intrinsic Value of Options ($) Options outstanding as of September 30, 2023 3,933 1.18 0.96 7.96 - Granted - - - - - Forfeited (328 ) 1.21 1.10 - - Options outstanding as of December 31, 2023 3,605 1.18 0.95 7.75 - Exercisable as of September 30, 2023 2,190 1.64 1.31 6.80 - Exercisable as of December 31, 2023 2,084 1.60 1.26 6.66 - Share Repurchase Program On April 27, 2023, the Company’s Board of Directors approved a share repurchase program authorizing the Company to purchase up to an aggregate of $20 million of the Company’s currently outstanding shares of common stock. The share repurchase program continued through December 31, 2023. The repurchase program did not obligate the Company to repurchase any number of shares of common stock. The share repurchase program was conducted in accordance with Rules 10b-5 and 10b-18 of the Securities Exchange Act of 1934, as amended. Subject to applicable rules and regulations, shares of common stock were purchased from time to time in the open market transactions and in amounts the Company deemed appropriate, based on factors such as market conditions, legal requirements, and other business considerations. During the three-month period ended December 31, 2023, the Company repurchased 2,717 shares of its common stock for $1,575, including commissions and fees, at an average price of $0.58 per share excluding these associated costs. |
Income Tax
Income Tax | 3 Months Ended |
Dec. 31, 2023 | |
Income Tax | |
Income Tax | 11. Income Tax The following table presents the provision for income taxes and our effective tax rate for the three-month periods ended December 31, 2023 and 2022: December 31, 2023 2022 Provision for income taxes - 73 Effective tax rate 2 % 10 % No income tax benefit was recognized for the three months ended December 31, 2023 because the Company is forecasting pre-tax income for the full year so the tax benefit is not expected to be realized during the current year in accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 740, Income Taxes The effective tax rate for the three months ended December 31, 2023 is lower than the statutory rate primarily due to the effect of federal tax credits and state and local taxes. The effective tax rate for the three months ended December 31, 2022 is lower than the statutory rate primarily due to the effect of the change in valuation allowance on the net deferred tax asset (“DTA”) position. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2023 | |
Commitments and contingencies (Note 12) | |
Commitments and Contingencies | 12. Commitments and Contingencies Litigation and Claims The Company and its subsidiaries are involved in litigation that arises in the ordinary course of business. There are no pending significant legal proceedings to which the Company is a party for which management believes the ultimate outcome would have a material adverse effect on the Company’s financial position. |
Segment Data
Segment Data | 3 Months Ended |
Dec. 31, 2023 | |
Segment Data | 13. Segment Data The Company provides the following distinctive services: (a) direct hire placement services, (b) temporary professional services staffing in the fields of information technology, accounting, finance and office, engineering, and medical, and (c) temporary industrial staffing. These services can be divided into two reportable segments: Professional Staffing Services and Industrial Staffing Services. Some selling, general and administrative expenses are not fully allocated among these segments. Unallocated corporate expenses primarily include certain executive and administrative salaries and related expenses, corporate legal expenses, share-based compensation expenses, consulting expenses, audit fees, corporate rent and facility costs, Board related fees, acquisition, integration and restructuring expenses, and interest expense. Three Months Ended December 31, 2023 2022 Industrial Staffing Services Contract services revenue $ 2,494 $ 3,618 Contract services gross margin 16.0% 15.5% Income (loss) from operations $ (36) $ 5 Depreciation and amortization 12 15 Professional Staffing Services Permanent placement revenue $ 3,055 $ 5,747 Placement services gross margin 100.0% 100.0% Contract services revenue $ 25,082 $ 31,783 Contract services gross margin 25.0% 25.4% Income from operations $ 29 $ 2,554 Depreciation and amortization 792 806 Unallocated Expenses Corporate administrative expenses $ 1,287 $ 1,231 Corporate facility expenses 112 110 Share-based compensation expense 153 374 Board related expenses 115 82 Total unallocated expenses $ 1,667 $ 1,797 Consolidated Total revenue $ 30,631 $ 41,148 Income (loss) from operations (1,674) 762 Depreciation and amortization 804 821 |
Allowance for Credit Losses a_2
Allowance for Credit Losses and Falloffs (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Allowance for Credit Losses and Falloffs | |
Schedule of allowance for credit losses and falloffs | Allowance for credit losses as of September 30, 2023 $ 562 Provisions for credit losses 65 Accounts receivable write-offs (36 ) Allowance for credit losses as of December 31, 2023 $ 591 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Property and Equipment | |
Schedule of Property and Equipment | December 31, 2023 September 30, 2023 Computer software $ 481 $ 481 Office equipment, furniture, fixtures and leasehold improvements 3,839 3,828 Total property and equipment, at cost 4,320 4,309 Accumulated depreciation and amortization (3,540 ) (3,463 ) Property and equipment, net $ 780 $ 846 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Leases | |
Schedule Of Supplemental Balance Sheet Information | December 31, 2023 September 30, 2023 Weighted average remaining lease term for finance leases 2.6 years 2.8 years Weighted average discount rate for finance leases 6.5 % 6.6 % December 31, 2023 September 30, 2023 Weighted average remaining lease term for operating leases 1.9 years 2.2 years Weighted average discount rate for operating leases 5.7 % 5.7 % |
Schedule Of Supplemental Cash Flow Information | Three Months Ended December 31, 2023 2022 Cash paid for operating lease liabilities $ 430 $ 473 Right-of-use assets obtained in exchange for new operating lease liabilities - 518 |
Schedule Of Undiscounted Future Minimum Lease Payments | Remainder of Fiscal 2024 $ 119 Fiscal 2025 108 Fiscal 2026 105 Fiscal 2027 21 Fiscal 2028 - Less: Imputed interest (33 ) Present value of finance lease liabilities (a) $ 320 Remainder of Fiscal 2024 $ 1,227 Fiscal 2025 1,111 Fiscal 2026 700 Fiscal 2027 544 Fiscal 2028 302 Less: Imputed interest (321 ) Present value of operating lease liabilities (a) $ 3,563 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets | |
Schedule of identifiable intangible assets and accumulated amortization | December 31, 2023 September 30, 2023 Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Customer relationships $ 29,070 $ (21,780 ) $ 7,290 $ 29,070 $ (21,120 ) $ 7,950 Trade names 8,329 (7,933 ) 396 8,329 (7,873 ) 456 Total $ 37,399 $ (29,713 ) $ 7,686 $ 37,399 $ (28,993 ) $ 8,406 |
Schedule of future amortization expense | Remainder of Fiscal 2024 $ 2,159 Fiscal 2025 2,741 Fiscal 2026 1,870 Fiscal 2027 916 Fiscal 2028 - $ 7,686 |
Shareholders Equity (Share-ba_2
Shareholders Equity (Share-based Compensation and Share Repurchase Program) (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Shareholders Equity (Share-based Compensation and Share Repurchase Program) | |
Summary of restricted stock activity | Number of Shares Weighted Average Fair Value ($) Non-vested restricted stock outstanding as of September 30, 2023 1,384 0.62 Granted 195 0.54 Vested - - Non-vested restricted stock outstanding as of December 31, 2023 1,579 0.61 |
Summary of stock option activity | Number of Shares Weighted Average Exercise Price per share ($) Weighted Average Fair Value per share ($) Weighted Average Remaining Contractual Life (Years) Total Intrinsic Value of Options ($) Options outstanding as of September 30, 2023 3,933 1.18 0.96 7.96 - Granted - - - - - Forfeited (328 ) 1.21 1.10 - - Options outstanding as of December 31, 2023 3,605 1.18 0.95 7.75 - Exercisable as of September 30, 2023 2,190 1.64 1.31 6.80 - Exercisable as of December 31, 2023 2,084 1.60 1.26 6.66 - |
Income Tax (Tables)
Income Tax (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Income Tax | |
Schedule of Provision for income taxes | December 31, 2023 2022 Provision for income taxes - 73 Effective tax rate 2 % 10 % |
Segment Data (Tables)
Segment Data (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Schedule of Segment Reporting Information | Three Months Ended December 31, 2023 2022 Industrial Staffing Services Contract services revenue $ 2,494 $ 3,618 Contract services gross margin 16.0% 15.5% Income (loss) from operations $ (36) $ 5 Depreciation and amortization 12 15 Professional Staffing Services Permanent placement revenue $ 3,055 $ 5,747 Placement services gross margin 100.0% 100.0% Contract services revenue $ 25,082 $ 31,783 Contract services gross margin 25.0% 25.4% Income from operations $ 29 $ 2,554 Depreciation and amortization 792 806 Unallocated Expenses Corporate administrative expenses $ 1,287 $ 1,231 Corporate facility expenses 112 110 Share-based compensation expense 153 374 Board related expenses 115 82 Total unallocated expenses $ 1,667 $ 1,797 Consolidated Total revenue $ 30,631 $ 41,148 Income (loss) from operations (1,674) 762 Depreciation and amortization 804 821 |
Allowance for Credit Losses a_3
Allowance for Credit Losses and Falloffs (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
Allowance for Credit Losses and Falloffs | |
Allowance for credit losses as of September 30, 2023 | $ 562 |
Provisions for credit losses | 65 |
Accounts receivable write-offs | (36) |
Allowance for credit losses as of December 31, 2023 | $ 591 |
Allowance for Credit Losses a_4
Allowance for Credit Losses and Falloffs (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | |
Allowance for Credit Losses and Falloffs | |||
Falloffs and refunds | $ 244 | $ 165 | |
Allowance for credit losses | 591 | $ 562 | |
Liabilities for expected future falloffs and refunds | $ 115 | $ 118 |
Advertising Expenses (Details N
Advertising Expenses (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Advertising Expenses [Member] | ||
Cost of print and internet media | $ 541 | $ 581 |
Earnings per Share (Details Nar
Earnings per Share (Details Narrative) - shares | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Earnings per Share | ||
Weighted average dilutive incremental shares | 0 | 435,000 |
Weighted average dilutive incremental anti dilutive | 3,682,000 | 3,373,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Total Property And Equipment, At Cost | $ 4,320 | $ 4,309 |
Accumulated Depreciation And Amortization | (3,540) | (3,463) |
Property And Equipment, Net | 780 | 846 |
Computer Software [Member] | ||
Total Property And Equipment, At Cost | 481 | 481 |
Office Equipment, Furniture, Fixtures and Leasehold Improvements [Member] | ||
Total Property And Equipment, At Cost | $ 3,839 | $ 3,828 |
Leases (Details)
Leases (Details) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 | Sep. 30, 2023 | |
Operating Leases Consisted [Member] | ||
Weighted Average Remaining Lease Term For Operating Leases | 1 year 10 months 24 days | 2 years 2 months 12 days |
Weighted average discount rate for operating leases | 5.70% | 5.70% |
Finance Leases Consisted [Member] | ||
Weighted average remaining lease term for finance leases | 2 years 7 months 6 days | 2 years 9 months 18 days |
Weighted average discount rate for finance leases | 6.50% | 6.60% |
Leases (Details 1)
Leases (Details 1) $ in Thousands | Dec. 31, 2023 USD ($) |
Operating Leases Consisted [Member] | |
Remainder of Fiscal 2024 | $ 1,227 |
Fiscal 2025 | 1,111 |
Fiscal 2026 | 700 |
Fiscal 2027 | 544 |
Fiscal 2028 | 302 |
Less: Imputed Interest | (321) |
Present value of operating lease liabilities (a) | 3,563 |
Finance Leases Consisted [Member] | |
Remainder of Fiscal 2024 | 119 |
Fiscal 2025 | 108 |
Fiscal 2026 | 105 |
Fiscal 2027 | 21 |
Fiscal 2028 | 0 |
Less: Imputed Interest | (33) |
Present Value Of Financing Lease Liabilities (a) | $ 320 |
Leases (Details 2)
Leases (Details 2) - Operating Leases Consisted [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash paid for operating lease liabilities | $ 430 | $ 473 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 0 | $ 518 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | |
Leases | |||
Operating Lease Expires description | office lease expires in 2026 | ||
Operating Lease Expenses | $ 530 | $ 588 | |
Current Operating Lease Liabilities | 1,377 | $ 1,475 | |
Current financing Leases Liabilities | $ 130 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Cost | $ 37,399 | $ 37,399 |
Accumulated Amortization | (29,713) | (28,993) |
Net Book Value | 7,686 | 8,406 |
Customer Relationship [Member] | ||
Cost | 29,070 | 29,070 |
Accumulated Amortization | (21,780) | (21,120) |
Net Book Value | 7,290 | 7,950 |
Trade Names [Member] | ||
Cost | 8,329 | 8,329 |
Accumulated Amortization | (7,933) | (7,873) |
Net Book Value | $ 396 | $ 456 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Estimated Amortization Expense | ||
Remainder of Fiscal 2024 | $ 2,159 | |
Fiscal 2025 | 2,741 | |
Fiscal 2026 | 1,870 | |
Fiscal 2027 | 916 | |
Fiscal 2028 | 0 | |
Total | $ 7,686 | $ 8,406 |
Senior Bank Loan Security and_2
Senior Bank Loan Security and Guarantee Agreement (Details Narrative) - USD ($) | 3 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | |
Amortization Expense For Debt Costs | $ 38,000 | $ 38,000 | |
Security And Guaranty Agreement [Member] | |||
Credit Facility, Maturity Date | May 14, 2026 | ||
Line of Credit under the terms of the CIT Facility | $ 20,000,000 | ||
Revolving Credit Facility Availability | 9,348,000 | ||
Unamortized Debt Costs | 370,000 | $ 408,000 | |
Amortization Expense For Debt Costs | 38,000 | 38,000 | |
Unused line fees | $ 26,000 | $ 26,000 |
Shareholders Equity (Share-ba_3
Shareholders Equity (Share-based Compensation and Share Repurchase Program) (Details) - Restricted Stock [Member] | 3 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Non-vested Restricted Stock Outstanding, Beginning Balance | shares | 1,384,000 |
Granted | shares | 195,000 |
Vested | shares | 0 |
Non-vested Restricted Stock Outstanding, Ending Balance | shares | 1,579,000 |
Weighted Average Fair Value, Beginning Balance | $ / shares | $ 0.62 |
Weighted Average Fair Value, Granted | $ / shares | 0.54 |
Weighted Average Fair Value, Vested | $ / shares | 0 |
Weighted Average Fair Value, Ending Balance | $ / shares | $ 0.61 |
Shareholders Equity (Share-ba_4
Shareholders Equity (Share-based Compensation and Share Repurchase Program) (Details 1) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 | Sep. 30, 2023 | |
Option outstanding, beginning balance | 3,933,000 | |
Option Granted | 0 | |
Forfeited | (328,000) | |
Option outstanding, ending balance | 3,605,000 | 3,933,000 |
Exercisable | 2,084,000 | 2,190,000 |
Weighted Average Exercise Price Per Share Options outstanding, beginning balance | $ 1.18 | |
Weighted Average Exercise Price Per Shares granted | 0 | |
Weighted Average Exercise Price Per Share Forfeited | 1.21 | |
Weighted Average Exercise Price Per Share Options outstanding, ending balance | 1.18 | $ 1.18 |
Weighted Average Exercise Price Per Share, exercisable, ending balance | 1.60 | 1.64 |
Weighted Average Fair Value per share Exercisable ending balance | 1.26 | $ 1.31 |
Weighted Average Fair Value per share beginning balance | 0.96 | |
Weighted Average Fair Value per share forfeited | 1.10 | |
Weighted Average Fair Value per share granted | 0 | |
Weighted Average Fair Value per share ending balance | $ 0.95 | |
Weighted Average Remaining Contractual Life Options outstanding, beginning balance | 7 years 11 months 15 days | |
Weighted Average Remaining Contractual Life Options outstanding, ending balance | 7 years 9 months | |
Weighted Average Remaining Contractual Life, exercisable, ending balance | 6 years 7 months 28 days | 6 years 9 months 18 days |
Total Intrinsic Value of Warrants Options outstanding, beginning balance | $ 0 | |
Total Intrinsic Value Of Options, Forfeited | $ 0 | |
Total Intrinsic Value Of Options, Granted | $ 0 | |
Total Intrinsic Value Of Warrants Warrants Exercisable, ending Balance | $ 0 | $ 0 |
Total Intrinsic Value of Options,Options outstanding, ending balance | $ 0 | $ 0 |
Shareholders Equity (Share-ba_5
Shareholders Equity (Share-based Compensation and Share Repurchase Program) (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | |
Stock options available to be granted under amended plan | 3,894,000 | ||
Restricted Stock options available to be granted under amended plan | 4,021,000 | ||
Share Repurchase Program [Member] | |||
Common stock repurchase | 2,717,000 | ||
Common stock repurchase value | $ 1,575 | ||
Common stock repurchase share average price | $ 0.58 | ||
Description of share repurchase program | Company’s Board of Directors approved a share repurchase program authorizing the Company to purchase up to an aggregate of $20 million of the Company’s currently outstanding shares of common stock | ||
Stock Option [Member] | |||
Share-based compensation expense | $ 79 | $ 287 | |
Unrecognized compensation expense | $ 792 | ||
Weighted average vesting period | 3 years 11 months 23 days | ||
2013 Incentive Stock Plan [Member] | |||
Shares authorized to be granted under amended plan | 15,000,000 | ||
Restricted stock available to be granted under amended Plan | 7,500,000 | ||
Stock option available to be granted under amended Plan | 7,500,000 | ||
Restricted common stock shares granted under amendment plan | 195,000 | ||
Restricted stock and stock options available to be granted under amended plan | 7,915,000 | ||
Increased restricted stock and stock option grants under amended plan | 10,000,000 | ||
Warrant [Member] | |||
Weighted average remaining contractual life | 1 year 3 months | 1 year 6 months | |
Weighted average exercise price per share | $ 2 | ||
Warrants outstanding | 77,000 | 77,000 | |
Restricted Stock [Member] | |||
Share-based compensation expense | $ 74 | $ 87 | |
Unrecognized compensation expense | $ 539 | ||
Weighted average vesting period | 2 years 11 months 23 days |
Income Tax (Details)
Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax | ||
Provision for income taxes | $ 0 | $ 73 |
Effective tax rate | 2% | 10% |
Segment Data (Details)
Segment Data (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income from operations | $ (1,674) | $ 762 |
Total revenue | 30,631 | 41,148 |
Share-based compensation expense | 153 | 374 |
Consolidated [Member] | ||
Depreciation and amortization | 804 | 821 |
Total revenue | 30,631 | 41,148 |
Income from operations | (1,674) | 762 |
Industrial Staffing Services [Member] | ||
Contract services revenue | $ 2,494 | $ 3,618 |
Contract services gross margin | 16% | 15.50% |
Income from operations | $ (36) | $ 5 |
Depreciation and amortization | 12 | 15 |
Professional Staffing Services [Member] | ||
Contract services revenue | $ 25,082 | $ 31,783 |
Contract services gross margin | 25% | 25.40% |
Income from operations | $ 29 | $ 2,554 |
Depreciation and amortization | 792 | 806 |
Permanent placement revenue | $ 3,055 | $ 5,747 |
Placement services gross margin | 100% | 100% |
Unallocated Expenses [Member] | ||
Corporate administrative expenses | $ 1,287 | $ 1,231 |
Corporate facility expenses | 112 | 110 |
Share-based compensation expense | 153 | 374 |
Board related expenses | 115 | 82 |
Total unallocated expenses | $ 1,667 | $ 1,797 |