SeeThruEquity Issues Update on GEE Group Inc. (NYSE MKT: JOB)
NEW YORK, NY / ACCESSWIRE / April 11, 2017 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced it has issued an update on GEE Group Inc. (NYSE MKT: JOB).
The report is available here: April 2017 Update Note.
GEE has reported several significant events recently, including fiscal 1Q17 results and the acquisition of SNI Group:
GEE announced it has acquired SNI Companies, a private staffing company with over $100mn in annual revenues.
The move more than doubles the scale of GEE, while adding cash flow.
GEE performance has continued. 1Q17 Revenue grew by 91% to reach $22mn, versus $17.6mn in 1Q16.
GEE Announces SNI Acquisition
On April 3, 2017, GEE CEO, Derek Dewan, announced that the company had acquired SNI Companies. Founded in 1998, SNI Companies is led by former Robert Half executive, Ron Smith. SNI provides staffing and recruitment services, with 34 offices in the United States. The GEE announcement notes that SNI Companies was recently named one of the fastest growing private staffing companies in the country by Staffing Industry Analysts (SIA), with annual revenues of over $110mn. The deal should accelerate GEE's penetration into professional staffing, as SNI is focused on the Accounting & Finance, Technology, Energy and Legal sectors.
SNI Expected to Add Scale, Increase Cash Flow
Management stated that the combined company's pro forma revenues should be approximately $200mn, which more than doubles GEE's run rate. Importantly, SNI is expected to be accretive on an adjusted EBITDA basis, as SNI had calendar 2016 EBITDA margins of approximately 8%. The deal was financed by a combination of debt, preferred stock, and convertible notes under a new credit facility with PNC Bank and MGG Investment Group.
GEE Executes in 1Q17, Revenue Climbs 19% YoY
GEE reported 19% annual revenue growth in 1Q17, with revenues of $21mn, versus $17.6mn in 1Q16. Contract staffing represented 94% of revenue, in line with the company's sales emphasis on this service. Adjusted EBITDA and EPS improved year-over-year. Adjusted EBITDA came in at $1.1mn, versus $0.9mn in 1Q16. GAAP EPS was $0.01, versus a loss of ($0.04) in 1Q16.
See Compelling Value in Shares; Maintain Target
We continue to see GEE as a compelling acquisition growth story. Recent results have shown management's ability to digest acquisitions, and the acquisition of SNI should add a new level of scale and reach to the business. We see shares as offering attractive value at the recent price of $6.38, as the company emerges as a significant player in the highly fragmented $142 billion US staffing market with a pro forma adjusted revenue run rate of approximately $200mn.
Please review important disclosures at www.seethruequity.com.
About GEE Group Inc.
GEE Group Inc. is a provider of specialized staffing solutions and is the successor to employment offices doing business since 1893. The Company operates in two industry segments, providing professional staffing services and solutions in the information technology, engineering, finance and accounting specialties and commercial staffing services through the names of Access Data Consulting, Agile Resources, Ashley Ellis, General Employment, Omni-One, Paladin Consulting and Triad. Also, in the healthcare sector, GEE Group, through its Scribe Solutions brand, staffs medical scribes who assist physicians in emergency departments of hospitals and in medical practices by providing required documentation for patient care in connection with electronic medical records (EMR). Additionally, the Company provides contract and direct hire professional staffing services through the following SNI brands: Accounting Now®, SNI Technology®, Legal Now®, SNI Financial®, Staffing Now®, SNI Energy®, and SNI Certes.
About SeeThruEquity
Since its founding in 2011, SeeThruEquity has been committed to its core mission: providing impactful, high quality research on underfollowed smallcap and microcap equities. SeeThruEquity has pioneered an innovative business model for equity research that is not paid for and is unbiased. SeeThruEquity is the host of acclaimed investor conferences that are the ultimate event for publicly traded companies with market capitalizations less than $1 billion.
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Contact:
Ajay Tandon
SeeThruEquity
info@seethruequity.com
SOURCE: SeeThruEquity
