GEE Group Inc.

Management Comments

Derek E. Dewan, Chairman and Chief Executive Officer of GEE Group, commented, “The Company’s financial results for the fiscal 2025 first quarter are indicative of a less than robust demand environment for the U.S. staffing industry. It has not yet recovered from the weakness experienced in the second half of 2023 and all of 2024. In many cases, the hiring of contract workers and direct hire personnel was put on hold by businesses which have taken a more guarded approach to initiating new projects or backfilling open roles. This is primarily due to an uncertain macroeconomic environment and unknown government policy decisions. In addition, the job switching frenzy where people changed jobs for better pay, more generous perks and more flexibility post pandemic largely has worn off, ending the hottest job market in a generation. This had the effect of a reduction in both new job opportunities and the number of qualified candidates available to fill any open orders for placements across substantially all of our lines of business. We expect that the demand environment will gradually improve in the latter part of 2025 and beyond. In anticipation, we are taking actions to prudently manage our Company so that we are well prepared for an eventual recovery. We are closely monitoring business activity and tightly managing our costs. Management continually evaluates GEE’s expenses and looks for opportunities to further streamline our business and reduce costs. The Company plans to adopt artificial intelligence (“AI”) software for enhanced, cost-efficient recruiting and AI agents for prospecting target accounts and increasing sales. Our employees are very dedicated, highly skilled and motivated to deliver world class service to our clients in a cost efficient manner.”

Mr. Dewan added, “We are excited to have completed our acquisition of Hornet Staffing, Inc., which we announced in early January. We have completed Hornet’s integration, are using the offshore recruiting team and are moving full speed ahead on several collaborative and strategic initiatives involving Hornet and our other brands. The Company has a strong balance sheet with a current ratio of 4.7 and substantial liquidity resources, both in cash and borrowing capacity. GEE Group’s strategy includes making prudent investments to fuel both organic and acquisition growth. We will deploy GEE Group's capital judiciously, with the primary objective of maximizing shareholder value.”