Staffing firm GEE Group Inc. (NYSEAMERICAN: JOB) reported revenue fell 30.2% in its fiscal third quarter ended June 30. The Jacksonville, Florida-headquartered staffing provider reported contract staffing revenue fell 29.3% in the quarter while direct-hire revenue fell 36.5%.
GEE Group provides staffing in IT, accounting/finance, office, engineering and medical.
| (US$ thousands) | Q3 2020 | Q3 2019 | % change |
| Net revenue | $26,594 | $38,101 | -30.2% |
| Gross margin | 36.4% | 35.6% | |
| Net income/loss | $7,195 | ($6,834) | nm |
The company noted the impact of Covid-19 and the resulting client office and factory closures, postponement of customers’ job orders and government-mandated lockdowns. The lockdowns primarily affected the company’s lower-margin contract staffing business — industrial services and office support — and, to a lesser extent, GEE Group’s non-IT professional contract services and direct hire placement business. GEE’s higher-margin IT services business was more resilient to the pandemic.
Revenue by segment
| (US$ thousands) | Q3 2020 | Q3 2019 | % change |
| Contract staffing services | $23,493 | $33,217 | -29.3% |
| Direct hire placement services | $3,101 | $4,884 | -36.5% |
GEE Group on June 30 completed a recapitalization and restructuring transaction, eliminating approximately $47.4 million of debt and related leverage comprising $19.7 million of subordinated debt and approximately $27.7 million of preferred stock mezzanine financing.
“Our company continues to pivot, refine its internal processes and narrow its focus on new business opportunities in segments of the economy that benefit from the coronavirus pandemic,” said Chairman and CEO Derek Dewan.
Share price and market cap
Shares in GEE Group were down 3.09% to approximately 92 cents today as of 1:08 p.m. Eastern time; the company had a market cap of $16.80 million, according to FT.com.