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Derek Dewan: Hello, and welcome to the GEE Group Fiscal 2026 Second Quarter and Year-to-Date Period Ended March 31, 2026, Earnings and Update Webcast Conference Call. I’m Derek Dewan, Chairman and Chief Executive Officer of GEE Group, I will be hosting today’s call. Joining me as a co-presenter is Kim Thorpe, our Senior Vice President and Chief Financial Officer. Thank you for joining us today. It is our pleasure to share with you GEE Group’s results for the fiscal 2026 second quarter and year-to-date period ended March 31, 2026, and provide you with our outlook for the rest of the fiscal 2026 year and the foreseeable future. Some comments Kim and I will make today will be considered forward-looking, including predictions, estimates, expectations and other statements about future performance.

These represent our current judgments of what the future holds and are subject to risks and uncertainties that actual results may differ materially from our forward-looking statements. These risks and uncertainties are described below under the caption Forward-looking Statements Safe Harbor and in Thursday’s earnings press release and our most recent Form 10-Q, 10-K and other SEC filings under the captions Cautionary Statement regarding forward-looking statements and forward-looking statements safe harbor. We assume no obligation to update statements made on today’s call. Throughout this presentation, we will refer to periods being presented as this quarter or the quarter or this year-to-date or the year-to-date, which refers to the 3- or 6-month periods ended March 31, 2026, respectively.

Likewise, when we refer to the prior year quarter or the prior year-to-date, we’re referring to the comparable prior 3- and 6-month periods ended March 31, 2025, respectively. When we refer to the prior sequential quarter, we are referring to the 3-month period ended December 31, 2025. During this presentation, we will also talk about some non-GAAP financial measures. Reconciliations and explanations of the non-GAAP measures we will address today are included in the earnings press release, our presentation of financial amounts and related items, including growth rates, margins and trend metrics are rounded or based upon rounded amounts for purposes of this call at all amounts percentages and related items presented or approximations accordingly.

For your convenience, our prepared remarks for today’s call are available in the Investor Center on our website, www.geegroup.com. Now on to today’s prepared remarks. First, I’m pleased to report that our company reported net income for this quarter and that our year-to-date results have significantly improved. Conditions in the hiring environment for our staffing services remain challenging and have been so since the second half of 2023. Companies and businesses continue to cautiously assess the economy and market conditions to ensure that their investments in technology and human capital are strategic and sustainable. A setback for us earlier this fiscal year was the acquisition of one of our larger clients who terminated our services, moving these to an affiliate of the acquirer.

This was a high-volume, lower-margin account, which somewhat lessened the negative impact on our results. However, on the brighter side, our direct hire placement revenues, which have the highest gross margin at 100% are up 7% in the quarter and year-to-date and appear to be on course so far for a better fiscal 2026 versus fiscal 2025. We also expect the use of contingent labor to stabilize this year as we are aware that some businesses are beginning to initiate new projects, which may be expected to lead to more job orders and full-time and contingent staffing placements. 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.

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We believe the uncertainties created by recent macroeconomic conditions and acceleration of AI in combination are behind the decreases in job orders for both contract and direct hire placements we and others have experienced. Conversely, we are implementing and incorporating AI into our own businesses and strategic plans in order to digitize, streamline and enhance and accelerate our recruiting and sales processes. Another closely aligned AI goal of ours is to provide our clients with the necessary human resource solutions to implement and support their uses of AI that help them increase speed, efficiency and profitability. These initiatives are a high priority for us, and our goal is to begin seeing returns later this year. 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 were reclassified as discontinued operations being excluded from the results of continuing operations for the fiscal 2025 periods will make comparisons to today. Our consolidated revenues were $19.5 million for the quarter and $40 million year-to-date. Gross profit and gross margins were $7.4 million and 38.1%, respectively, for the quarter and $14.8 million and 37.1%, respectively, year-to-date. Consolidated non-GAAP adjusted EBITDA was $108,000 for the quarter and a negative $28,000 year-to-date. We reported net income of $14,000 for the quarter and a net loss of $136,000 year-to-date. We continue to aggressively take actions to adjust and enhance our strategic focus, growth plans and financial performance and results, including streamlining our core operations and improving or adjusting our productivity to match our current lower volumes of business.

This has helped to improve our results despite lower business volume. We took measures to reduce our SG&A during the latter portion of fiscal 2025 by an estimated annual amount of $3.8 million. The cost reductions contributed $1.3 million to our decrease in SG&A for the quarter and $2.4 million year-to-date versus the comparable prior periods. As we announced early last year, we completed the acquisition of Hornet Staffing in fiscal 2025 and have increased our focus on VMS and MSP sourced 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. We anticipate achieving continuing improvements in our productivity and profitability as soon as practically possible.

Our results for the quarter are encouraging, and though we remain cautiously optimistic, our goal is to strengthen our results over the remainder of fiscal 2026. In addition to these near-term initiatives, we are working closely with our frontline leaders in the field to support them as we 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 lessen, I am very confident that we are positioned to meet the increased demand from existing customers and win new business. I want to reassure everyone that we fully intended to successfully manage through the challenges I’ve outlined and restore overall growth and improve profitability as quickly 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 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 continuing to restoring growth and profitability, which will lead to maximizing shareholder value. Before I turn the call over to Kim, I want to update you on recent activity since our press release issued on January 22, 2026, in response to Star Equity’s public commentary regarding an indication of interest in our company.

Since then, management and the Board have met to review and discuss multiple unsolicited expressions of interest in the company and continue to evaluate various strategic alternatives to enhance shareholder value. As we indicated in our press release on January 22, 2026, our Board of Directors, in accordance with its fiduciary duty, will consider any modified offer regarding a business combination acquisition or other transaction that it believes will enhance shareholder value. Once again, I 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 over the call to our Senior Vice President and Chief Financial Officer, Kim Thorpe, who will further elaborate on our fiscal 2026 second quarter and year-to-date results.

Kim?

Kim Thorpe: Thank you, Derek. As Derek mentioned, we reported net income of $14,000 for the quarter and a net loss of $136,000 year-to-date. These compared with net losses from continuing operations of $33 million for the prior year quarter and $33.6 million for the prior year-to-date. The comparable prior periods included a $22 million noncash goodwill charge and a $9.8 million provision for income taxes attributable to the increase in the company’s valuation allowance on its deferred tax assets. In addition to the absence of these noncash charges in 2026, we have been able to grow our direct hire revenues again in fiscal 2026, improve our gross margins, and we are now realizing the cost reductions and productivity improvements we implemented during the latter portion of fiscal 2025.

Our adjusted EBITDA, a non-GAAP financial measure was $108,000 for the quarter and a negative $28,000 year-to-date, improving from negative adjusted EBITDA of $597,000 and $894,000 for the comparable prior year period, respectively. EBITDA, which is also a non-GAAP financial measure, was $8,000 for the quarter and a negative $295,000 year-to-date, improving from negative EBITDA of $945,000 and a negative $1.5 million for the comparable prior year period, respectively. As mentioned, one of the bright spots in our results so far in fiscal 2026 has been our ability to grow our direct hire placement revenues. These were $3.2 million for the quarter and $5.9 million year-to-date, respectively, up approximately 20 — I’m sorry, up approximately 7% from the comparable prior year periods.

Additionally, direct hire placement revenues were up 17% from the prior sequential quarter. Consolidated revenues were $19.5 million for the quarter and $40 million year-to-date, down 20% and 18%, respectively, from the comparable prior periods. Contract staffing revenues were $16.3 million in the quarter and $34.1 million year-to-date, down 24% and 21%, respectively, from the comparable prior year periods. As Derek mentioned, one of our former high volume but lower margin clients was acquired and moved its business to an affiliate of the acquirer at the beginning of our fiscal 2026 fiscal year. This accounted for $2.5 million and $5.1 million of the decreases in our contract staffing revenues for the quarter and year-to-date, respectively.

Absent this loss of this single customer contract services, revenues decreased 14% for the quarter and 10% year-to-date. As Derek commented, macroeconomic and AI-related conditions in the hiring environment, for our staffing service remain challenging and companies and businesses, including our existing clients continue to remain somewhat tentative regarding their HR and staffing needs. Gross profit was $7.4 million in the quarter and $14.8 million year-to-date, down 11% and 9%, respectively, from the comparable prior year periods primarily due to the lower contract services revenue. However, gross margins were 38.1% for the quarter and 37.1% year-to-date, both up significantly, 400 basis points and 350 basis points, respectively, from 34.1% in the prior year quarter and 33.6% for the prior year to date.

The significant improvements in our gross margins are mainly attributable to the growth and increase in the mix of direct hire revenues relative to total revenue. Also contributing to a lesser extent is an increase in prices and spread on some of our contract services businesses. And while the loss of the higher-volume, low-margin client we spoke of earlier caused the majority of our revenue reduction year-to-date, it also contributed to the improvement in our business mix and margins. Selling, general and administrative expenses, SG&A, were approximately $7.4 million in the quarter and $15.1 million year-to-date, down 20% and 15% from the comparable prior year periods. Our SG&A as a percentage of revenues for the quarter were 38%, level with that of the prior year quarter.

SG&A for the year-to-date were 37.8% of revenue, up from 36.6% for the prior year-to-date. The increase is attributable to lower revenues in relation to fixed costs such as certain personnel, occupancy, applicant tracking and job board costs. 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 SG&A during the latter portion of fiscal 2025 by an estimated $3.8 million on an annual basis. These cost reductions contributed $1.3 million to our decrease in SG&A for the quarter and $2.4 million of the decrease year-to-date over the comparable prior year periods, aiding in the improvement of our results despite lower volume business.

We are now well underway in updating and further integrating our ERP and Applicant Tracking Systems and certain other key operating systems and processes. We anticipate that these new tools will have substantial enhancements to our core business processes, ranging from significant improvements in the speed and accuracy of our client and candidate service processes and cycles, our ability to share and leverage client and candidate information across all our businesses and increase overall productivity, scalability and reduce cost. Importantly, these initiatives also will include strategic and thoughtful implementation of AI tools to make us even more competitive. Our goal is to be able to compete and substantially — I’m sorry, our goal is to be able to complete or substantially complete by the end of the year and to be fully complete no later than the end of calendar 2026.

In addition to positive earnings in terms of net income, EBITDA and adjusted EBITDA in the quarter, and significant improvements in our year-to-date results. The company also produced net cash from continuing operations for the quarter and reduce the amount of cash used in our operations for the first 6 months of 2026 versus fiscal 2025. As of March 31, 2026, our liquidity position remained very strong at $20.3 million in cash, an undrawn ABL facility with an availability of $4.9 million, net working capital of $23.8 million and no outstanding debt. Our current — our net capital working ratio was 4.6:1. Our net book value per share and net tangible book value per share were $0.46 and $0.23, respectively, as of March 31, 2026. In conclusion, while the improvements in our results so far this year are a source of optimism, we remain cautious in our near-term outlook.

We also remain fully resolved to continue to improve our results and profitability and to stay focused and prepare for the long term, including the improvements to our core business processes, systems and the integration of AI I just spoke about. Before I turn it back over to Derek, please note that reconciliations of GEE Group’s non-GAAP financial measures discussed today with their GAAP counterparts can be found in the supplemental schedules included in our earnings release. Now I’ll turn it back over to Derek.

Derek Dewan: 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. As previously announced, we have engaged ROTH Capital Partners to assist us in performing an analysis of strategic alternatives available to us to maximize shareholder value.

Before we pause to take your questions, I want to again say a special thank you to all our wonderful people for their professionalism, hard work and dedication. Now Kim and I will be happy to take and answer your questions. Please ask just one question and rejoin the queue with a follow-up as needed. At this time, we’ll come back to you for additional questions. At this point, we’ll take questions and provide responses. Thank you.

Kim Thorpe: Our first question says, and this is from Tyler Cox, I know you cannot give exact guidance on the strategic review, but could you provide a general idea of when we can expect a decision to be made or next steps?

Derek Dewan: Okay. So in connection with the strategic review process, we’ve had great response with a lot of enthusiasm. I would define the process as robust and moving along very swiftly and orderly. I believe that in the near term, we’ll be able to evaluate more in depth, some of the indications of interest and other proposals that we’ve received thus far and expect a few more as well. So we will update all of you in the investment community as soon as we can with the status, and what we will follow through on from a strategic standpoint. I do want to mention something else as well. I received a question earlier from a shareholder about the universal shelf that we filed on Form S-3 this week. And it basically gives us maximum flexibility to use it to raise capital as needed.

But we anticipate that it would be used only in connection with an accretive transaction. So we don’t intend to dilute our share price by pulling down any of the shelf availability. It adds additional value, by the way, to our strategic alternatives process as well. So I wanted to make that clear and answer a question that had come up as well. Kim?

Kim Thorpe: Derek, I think that’s it. Believe it or not.

Derek Dewan: Well, that’s great. And we will keep all of you and the investment community informed. We will not wait for an earnings release to update the Street on what’s going on. And we’re very enthusiastic about our operating business, our cash position, our liquidity, the process that’s underway — far underway. We have interaction with the M&A Committee and Board. They are very, very helpful to management in pursuing these strategic alternatives and our investment bank is performing admirably. So at that point, we’ll keep you informed. And that concludes our call for today. Thank you for joining us, and look out for some good things.

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