Gee Group Inc. · AMEX:JOB
Gee — General Employment Enterprises — Investor Presentation (June 2016)
41 slides from Gee's investor presentation, Jun 2, 2016
Slide 1: Investor Presentation June 2016
Gi General Employment Enterprises Employing America since 1893 INVESTOR PRESENTATION JUNE 2016 NYSE: JOB
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 as amended, including statements regarding the business of the Company and its industry generally, s
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures statements presented on a GAAP iscloses non-GAAP Pro forma adjusted (adj.) EBITDA & adj. EBITDA, non-GAAP Pro forma & adj. Income (Loss) from Operations, non-GAAP Pro forma & adj. Working Capital, non- GAAP Pro forma & adj. Current Ratio, non-GAAP Pro forma & adj. Shareho
Slide 4: Company Overview
Company Overview gS NYSE: JOB (C3 General Employment Enterprises
Slide 5: Company overview
Based in Chicago with 20 offices throughout the US; geographic presence in over 26 markets providing staffing solutions Leading provider of specialty staffing services including Information Technology, Engineering, Healthcare, Accounting and Commercial fields Company was initially founded in 1893 an
Slide 6: General Employment IPO 1967
General Employment IPO 1967 general Jemployment enterprises, inc 13} General Employment Enterprises
Slide 7: Investment Merits
Investment Merits Staffing is a Terrific Market + $142 billion domestic industry with strong growth potential + Secular changes in the U.S. economy requiring “on-demand labor” have led to very favorable trends in the staffing industry + Staffing continues to be a highly fragmented market that is rip
Slide 8: Staffing Industry Overview
Staffing Industry Overview gS NYSE: JOB gs {C3} General Employment Enterprises
Slide 9: US Staffing Industry
US Staffing Indust + Large Fragmented Market: > $142 billion domestic industry for combined temporary staffing and place and search for 2016, 7% growth in 2015 and 6% projected growth for 2016 > Temp penetration rate >2% (highest ever) of total nonfarm employment (BLS) > Estimated that 47% of U.S. b
Slide 10: Supply and Demand
SUPPLY “ DEMAND Shiftin attitude: Preference x Efficiency: Variable cost of flexible work hours é structure Necessity: Higher Just- in- time labor: More unemployment, part-time companies using mix of soa G femurs ana Pay/benefits: At times, pay “Made in America’ is higher than full-time; renaissance
Slide 11: Focused On Growth Sectors
Focused On Growth Sectors Professional Staffing Services (Est. 2016 Temp. Staffing Mkt. Size) Healthcare $14.2 billion IT $29 billion Engineering $8.5 billion 4
Slide 12: IT Staffing Continues to Grow
IT Staffing Continues to Grow Projected growth in IT sector in 2016: Source: Staffing Industry Analysts
Slide 13: Information Technology Staffing Market
tion Technology Staffing Market 2016 Estimated Spend Largest IT staffing markets $7990 Seattle-Tacome Bellevue, WA’ som Wl San Froncco- Los Angele-Long Beach ‘Santa Ana, CA s Dallas Fort Worth- “Arlington, 7 Source: Staffing Industry Analysts
Slide 14: Healthcare Staffing 2016 estimate
2016 est. | Travel aes Nurses $ in billions | $3.5 oH —— $14.2 billion + IL $476mm } Total . 2. Per Diem Locum , + OW S418 Nuee pocumn iat + NC $330mm $3.6 (Drs)s35) Growth ~ GA $285mm ) Source: Staffing Industry Analysts _ (C3 General Employment Enterprises
Slide 15: Professional Staffing Sector
ional Staffing Se Other professional staffing segments growth opportunities Source: Staffing Industry Analysts
Slide 16: Industrial Staffing Sector Growth
Industrial Staffing Sector Growth Largest Staffing Segment 6% CAGR 2013- 2015 5% GR 2016 est. e @ 534.5 $40 billion est. 2017 ~ $329 2016 @.— 201 est. gig 7015 201. th $in Billions $29.5 Sources: Stating Industy Analysts 2013 Everest Group, True Blue est. (> G, * {C3} General Employment Enterprises
Slide 17: Industrial Staffing Sector Capabilities
Industrial Staffing Sector Capabilities = 3 General Employment Enterprises - “E” commerce + Logistics + Advanced Mfg. & Robotics & Automation Support ¢ Construction Support
Slide 18: Significant Consolidation Opportunity in Staffing Industry
Slide 19: Company Position
Company Position gS NYSE: JOB (C3 General Employment Enterprises
Slide 20: Final Phase of Turnaround
Final Phase of Turnaround 1893 - 2001 Rich Legacy Period of Decline Rich history dating back to 1893 First publicly traded staffing company; on NYSE/ Amex over 50 years ‘Thrived under strong leadership 2001 - 2012 Business adversely affected by death of long-time CEO in 2001 Inexperienced and new ma
Slide 21: Company Name Change: GEE Group
ompany Name Change : GEE G: up + Intended to more clearly reflect transformation from predominantly commercial staffing company into a highly specialized staffing services, consulting and human resources solutions provider * Creates platform to better position our specialty operating brands and go t
Slide 22: Office Locations
e Locations ‘General Employment Enterprises Inc INYSEJON Raton! Senice elry = 13! General Employment Enterprises
Slide 23: Specialized Brand Strategy
Specialized Brand Strate: Professional Staffing/Direct Hire i Ue AGILE” Information Technology, ASE ashley ellis . if . Accounting, Engineering OMNIONE Engineering, Manufacturing BRB o.vr10n8 Health Care / EMR ‘ommercial Staffin Light Industrial Industrial
Slide 24: Proven New CEO
Proven New CEO * Derek Dewan joined General Employment 4/1/15 as the Company's CEO upon completion of Scribe acquisition + Mr. Dewan was previously Chairman and CEO of MPS Group, Inc. (NYSE:MPS) and predecessor AccuStaff Incorporated, a multi-billion global Fortune 1000 staffing provider * MPS Group
Slide 25: Management team
Andrew J. Norstrud, CFO — Mr. Norstrud joined General Employment in March of 2013 as CFO and has significant experience with public companies in many areas including financial reporting, restructuring for profitability and growth, acquisitions and technology. He is a CPA and was formerly with Pricew
Slide 26: Board Members
Board Members George A. Bajalia + President of Landmark Financial Corp.; served as President and Chief Executive Officer of the Prolianz Division of staffing conglomerate MPS Group Ine. (NYSE:MPS) and as its Chief Operating Officer William M. Isaac + Former Chairman of the Federal Deposit Insurance
Slide 27: Growth Strategy
Growth Strategy SE NYSE: JOB gs {C3} General Employment Enterprises
Slide 28: Organic growth strategies
Strateg’ ies 0 Provide new, innovative & enhanced menu of professional service offerings to customers in existing markets and cross-sell multiple specialties - IT, Accounting, Engineering & Healthcare J Enter fastest growing markets by following customers and through geographic footprint expansion w
Slide 29: External Growth Strategy
External Growth Strate Strategic Acquisitions ( Strengthen existing service offerings & enhance mkt. share (Add complementary high growth services & specialties Add new client/business opportunities 0 Expand into new geographies and markets Add new recruiting, sales & management talent iC sneral Emp
Slide 30: Target Human Capital Acquisition Sectors
Target Human Capital Acquisition Sectors eneral Employment Enterprises
Slide 31: Acquisition Criteria
quisitions Criteria 0 High gross & EBITDA margin ( Accretive to earnings 0 Well managed with experienced operators 0 Limited enterprise risk and extensive due diligence 0 Pricing commensurate with profitability & growth 1 Consideration consists of cash, stock, seller & bank financing 0 Earn-out poss
Slide 32: Acquisitions 2015/2016
Acquisitions (Chronological Order — 2015/2016) BB es222% PALADIN Seribe Solutions provides Emergency Rooms (ER) & Physician Practices with highly trained medical seribes for personal assistant work in connection with electronic medical records (EMR) Agile Resources delivers unique CIO advisory servi
Slide 33: Financial Overview
Financial Overview SE NYSE: JOB gs {C3} General Employment Enterprises
Slide 34: Staffing Services Revenue Mix
Staffing Services Revenue Mix (per Form 10Q) 3/31/16 2™4 Qtr. Staffing Services Revenue $21.7m 78% Professional Staffing © 68% Professional Contraet Staffing 1B 22% Commercial Staffing 1 40% Direct Hire 13 General Employment Enterprises
Slide 35: Gross Margin Profile
Gross Margin Profile Second Qtr. 3/31/16 % of Revenues 22% 78% Combined Gross Margin aie ake ‘Target Gross Marcin Range | 21" 27% 24-32% * Data derived from 3/31/16 Quarterly Unaudited Financial Information from Form 10Q CE= ent Enterprises
Slide 36: Strengthened Balance Sheet
Strengthened Balance Sheet Highlights Shelf Registration (Form 5-3) Filed for $75 Million Common Stock Equity Offering Raised $7.8 Million (Shelf Takedown) Long Term Subordinated Debt Offering Raised $4.2 Million Convertible Pfd, Stock Offering Provided $2 in Additional Common Stock Equity (converte
Slide 37: Historical & Pro-Forma & Non-GAAP Financial Highlights
TORICAL & PRO-FORMA & NON-GAAP FINANCIAL HIGHLIGHTS (Forward-Looking Statements) + 2016 Second Quarter ‘31/16 Form 10Q) Revenue of $21.7 m + 2016 Second Quarter (3/31/16) adjusted EBITDA of $1.1 million + Fiseal Year Ending 9/30/16 estimated annua ed pro-forma (based on 2" qtr. actual) projected ran
Slide 38: Reconciliation of Non-GAAP Adjusted EBITDA to GAAP Net Income
ation of Non-GAAP Adjusted EBI AP Net Income (Li Reconciliation of Non-GAAP Adjusted EBITDA to GAAP Net Income (Loss) Quarter Ended March 31, (In thousands) 2016 ams Net Income oss), GAAP. s es as) Interest expense net 409 6 Depredatton and amorttzaton an 1 ‘Stock compensation & stock option expense
Slide 39: Reconciliation of Non-GAAP Adjusted Income from Operations
Adjusted Income (Ls Reconciliation of Non-GAAP Adjusted Income (Loss) from Operations Quarter Ended March 31, (In thousands) 2016 2015 Income (loss) from operations, GAAP. s 260° $ (805) Stock compensation & stock option expense 230 84 Acquisition, integration & restructuring 12 - Non-GAAP adjusted
Slide 40: Reconciliation of Non-GAAP Adjusted Net Income (Loss)
Reconciliation of Non-GAAP Adjusted Net Income (Loss) Reconciliation of Non-GAAP Adjusted Net Income (Loss) Quarter Ended Mareh 31, in thousands) 2016 2018 Net income (net loss), GAAP 3 oo7 s as) Stock compensation & stock option expense 230 4 Acquisition, Integration & restructuring 2 i (Gain) toss
Slide 41: Questions?
Questions? Ga General Employment Enterprises Employing America since 1893 NYSE: JOB CG ‘ 1C> General Employment Enterprises
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