GEE Group Inc.

from our forward-looking statements these risks and uncertainties are described below under the caption forward-looking statements safe harbor and in Wednesday's earnings press release and our most recent form 10 Q 10 K and other SEC filings under available in the investor center of our website, www.geegroup.com. Now on to today's prepared remarks. We continue to face very difficult and challenging conditions in the hiring environment for our staffing services, which have been ongoing since the second half of 2023 and throughout 2024 and 2025. These have stemmed from what is now acknowledged as overhiring that took place in 2021, 2022, and the immediate aftermath of the pandemic and the macroeconomic uncertainty, interest rate volatility, and inflation that followed. These conditions have produced a near universal cooling effect on U.S. employment, including businesses' use of contingent labor and the hiring of full-time personnel. Since 2023, Many client initiatives, such as IT projects and corporate expansion activities, requiring additional labor in general, have been put on hold. Instead, many of the businesses we serve have implemented and proceeded with layoffs and hiring freezes, and in many cases have focused on retaining their existing employees rather than adding new employees. Companies and businesses are cautiously assessing interest rates, market conditions to ensure their investments in technology and human capital are strategic and sustainable artificial intelligence or ai is gaining ground at an accelerated pace and is further complicating the hr and project planning opportunities and risks facing virtually all companies including consumers of our services these conditions negatively impact job orders for both contract and direct hire placements and have negatively impacted our financial results for the fiscal year and fourth quarter ended September 30, 2025 accordingly. Our contract staffing and direct hire placement services are currently provided under our professional segment. The operations and substantially all the assets of our former industrial segment were sold during fiscal 2025 and have been reclassified as discontinued operations that are excluded from the results of continuing operations we'll discuss today, unless otherwise stated. Consolidated revenues were $23.5 million for the quarter and $96.5 million for the fiscal year. Gross profits and gross margins were $8.4 million and 35.8% respectively for the quarter and 33.4 million and 34.6% respectively for the fiscal year. Consolidated non-GAAP adjusted EBITDA was negative 306,000 for the quarter and negative 1.2 million for the fiscal year. We reported a loss from continuing operations of 613,000 or one cents diluted share for the quarter. and a loss from continuing operations of $34.7 million, or $0.32 per diluted share, for the fiscal year. We are aggressively taking actions to adjust and enhance our strategic focus, growth plans, and financial performance and results. As we announced earlier, we completed an M&A transaction with the acquisition of Hornet Staffing in March 2025 fiscal quarter. We also continue to streamline our core operations and improve or adjust our productivity to match our current lower volumes of business, which helped us improve our results in terms of non-GAAP adjusted EBITDA and EBITDA. We reduced our SG&A during the fiscal year by an estimated annual amount of 3.8 million, of which an estimated 954,000 was realized in our fiscal year results. In addition to our ongoing cost reduction and integration activities, we have renewed our focus on VMS and MSP source business, including the use of special recruiting resources and acceleration of the integration and use of AI technology into our recruiting, sales, and other processes. Importantly, we anticipate achieving continuing improvements in our productivity and restoring profitability as soon as practically possible. Our goal is to become profitable again in fiscal 2026. In addition to these near-term initiatives, we are working closely with our frontline leaders in the field across all of our verticals to support them as we all continue to aggressively pursue new business in addition to growing and expanding existing client revenues. We are seeing some positive results from these efforts. As the uncertainty and volatility currently gripping our economy and labor markets begins to subside, I am very confident that we are positioned to meet the increased demand from existing customers and win new business. As you also know, we paused share repurchases on December 31st, 2023, having repurchased just over 5% of our outstanding shares as of the beginning of the program. Share repurchases will always be considered as an alternative component of our capital allocation strategy and a bona fide alternative use of excess capital in the future, if and when considered prudent. I want to reassure everyone that we fully intend to successfully manage through the challenges I've outlined and restore the growth and profitability as soon as possible. GEE Group has a strong balance sheet with substantial liquidity in the form of cash and borrowing capacity. The company is well positioned to grow organically and to be acquisitive. We also continue to believe that our stock is undervalued and especially so based upon recent trading at levels very near and even slightly below tangible book value and that there is a good opportunity for upward movement in the share price once we are able to operate again in more normal economic and labor conditions and restore profitable growth. Management and our board of directors share the responsibility and are committed to restoring growth and profitability, which will lead to maximizing shareholder value. Before I turn the call over to Kim, I once again wish to thank our wonderful, dedicated employees and associates. They work extremely hard every day to ensure that our clients get the very best service and are the most important ingredient for our company's future success. At this time, I'll turn the call over to our Senior Vice President and Chief Financial Officer, Ken Thorpe, who will further elaborate on our fiscal 2025 full year and fourth quarter results. Kim?

Thank you, Derek, and good morning, everyone. As Derek mentioned in his remarks, our former industrial segment results are excluded from the results of continuing ops and comparisons, which I will now address. Consolidated revenues for the quarter and the fiscal year were $23.5 million and $96.5 million, respectively. both down 10% from the comparable prior year periods. Professional contract staffing services revenues for the quarter and the fiscal year were $20.4 million and $84.7 million, respectively, both down 11% from the comparable prior year periods. Our professional contract staffing services revenues for the quarter and fiscal year included $1.3 million and $3.4 million respectively generated by Hornet Staffing since its acquisition earlier in January 2025. Direct higher revenues for the quarter in the fiscal year were $3.1 million and $11.8 million, down 9% and 3% respectively compared with the prior year periods. Gross profits and gross margins for the quarter and the fiscal year were $8.4 million and 35.8% and $33.4 million and 34.6% respectively compared to $9.2 million and 35.1% and $36.1 million and 33.8% respectively compared with the prior fiscal year periods. The decreases in gross profit dollars were mainly attributable to lower volumes of our professional contract staffing services revenues. By contrast, the net increases in our gross margins are mainly attributable to the increase in the mix of our direct hire placement revenues, which have 100% gross margins relative to total revenue. Selling general and administrative expenses, or SG&A, for the quarter and fiscal year were $8.9 million and $35.6 million, down 13% and 11% respectively, compared with the prior year periods. SG&A expenses as a percentage of revenues for the quarter and the fiscal year were 38.1% and 36.9% respectively, compared with 39.4% and 37.2% respectively for the prior year periods. In response to the realities of our present environment, we continue to prioritize and focus heavily on streamlining our core operations and improving our productivity to match our current lower volumes of business. As Derek mentioned, we reduced our annual SG&A during the 2025 fiscal year by approximately $3.8 million on an annualized basis of which a portion was realized in our 2025 fiscal year results with the expectation that the full amount plus additional expense reductions as needed will be realized in the 2026 fiscal year. This has helped us improve our results in terms of non-GAAP adjusted EBITDA, non-GAAP EBITDA in both the quarter and the full fiscal year as compared with the prior fiscal periods despite lower volume of business. In addition to our ongoing cost reduction and integration initiatives, we have placed a renewed focus on VMS and MSP source business, including the use of special recruiting resources, the acceleration of integration, and use of AI technology in our recruiting, sales, and other processes. I also want to restate Derek's earlier point that our plans are intended to restore profitability as soon as practically possible. Our goal is to return to profitability as early as possible and hopefully during mid-fiscal 2026. Our loss from continuing operations for the quarter was $613,000 or negative one cent per diluted share as compared with a loss of $2.1 million or two cents per diluted share for the prior year quarter. Loss from continuing operations for the fiscal year was $34.7 million or 32 cents per diluted share as compared with a loss of $22.7 million or 21 cents per diluted share for the prior year. These losses, include for the years non-cash goodwill and other intangible asset impairment charges of $22 million for the 2025 fiscal year and $19.4 million for the fiscal 2024 year. EBITDA, which is a non-GAAP financial measure, improved for the 2025 fiscal fourth quarter and the 2025 fiscal year and were negative $524,000 and negative $2.3 million, respectively, compared with the negative $1.1 million and negative $3.7 million for the prior fiscal year. Adjusted EBITDA and non-GAAP, another non-GAAP financial measure, improved for the 2025 fiscal fourth quarter and 2025 fiscal year, and were negative $306,000 and negative $1.2 million, respectively, compared with negative $924,000 and negative $2.0 million for the 2024 prior year comparable fiscal periods. Our current or working capital ratio as of September 30, 2025 was 4.5 to, I'm sorry, 4.1 to 1. We had positive free cash flow. a non-GAAP financial measure including cash flows from discontinued operations for the fiscal year of $533,000 as compared with $144,000 for the prior year. Our liquidity position as of September 30, 2025 remained very strong with $21.4 million in cash, an undrawn ABO credit facility with availability of $4.8 million, net working capital of $24.0 million, and no outstanding borrowings. Our net book value per share and net tangible book value per share were 46 cents and 23 cents respectively as of September 30, 2025. In conclusion, while we're disappointed with our results and remain cautious in our near-term outlook, we remain resolved to restore profitability and are preparing for the long term, including making modernization improvements and enhancements, such as the integration of AI across all of our businesses and processes. Having completed our acquisition of Hornet in the March quarter 2025, we also intend to continue to pursue other acquisition opportunities, albeit in a very disciplined prudent manner with a particular emphasis on business focused on AI consulting, cybersecurity, and other IT consulting. Before I turn it back over to Derek, please note that reconciliations of G Group's non-GAAP financial measures discussed today with their GAAP counterparts can be found in the supplemental schedules included in our earnings press release. Now I'll turn the call back over to Derek.

Thank you, Kim. Despite the macroeconomic headwinds and staffing industry challenges impacting the demand for our services, we are aggressively managing and preparing our business to mitigate losses, restore profitability, and be prepared for an anticipated recovery. What we hope you take away from our earnings press release and our remarks today and from our strategic announcements is that we are moving aggressively not only to prepare for more conducive and growth-oriented labor market, but also to restore growth by continuing with the execution on both organic and M&A growth plans and initiatives. We will continue to work hard for the benefit of our shareholders, including consistently evaluating strategic uses of GEE Group's capital to maximize shareholder returns. We're very pleased with our 2025 acquisition of Hornet Staffing and the value and opportunities it brings and have identified other acquisition opportunities that we believe can offer additional growth and profitability platforms for us. Before we pause to take your questions, I want to again say a special thank you to all of our wonderful people for their professionalism, hard work, and dedication. Now, Kim and I would be happy to answer your questions. Please just ask one question and rejoin the queue with a follow-up as needed. If there's time, we'll come back to you for additional questions. We'll now enter the question and answer period.