Improved Profitability and Positive Quarter Results
Reported net income of $14,000 for the quarter and adjusted EBITDA of $108,000 for the quarter (adjusted EBITDA YTD: negative $28,000). EBITDA was $8,000 for the quarter, a material improvement versus prior-year comparable periods.
Direct Hire Growth
Direct hire placement revenues of $3.2M for the quarter and $5.9M YTD, up approximately 7% versus the comparable prior year periods and up ~17% sequentially from the prior quarter.
Margin Expansion
Gross profit of $7.4M (quarter) and $14.8M (YTD) with gross margins of 38.1% (quarter) and 37.1% (YTD), improving ~400 basis points and ~350 basis points respectively versus prior comparable periods, driven by a higher mix of direct hire revenues and improved pricing/spreads on some contract services.
Cost Reductions and SG&A Discipline
Implemented estimated annual SG&A reductions of $3.8M (implemented late fiscal 25) which contributed approximately $1.3M of the SG&A decrease in the quarter and $2.4M YTD versus prior-year periods, aiding margin and profitability improvements.
Strong Liquidity and Balance Sheet
Cash balance of $20.3M, undrawn ABL availability of $4.9M, net working capital of $23.8M, no outstanding debt, and a net working capital ratio of 4.6-to-1 as of 03/31/2026; net book value per share $0.46 and net tangible book value per share $0.23.
Operational and Strategic Initiatives Underway
Acquisition of Hornet Staffing integrated; focused on VMS/MSP business and AI adoption. ERP and applicant tracking system updates underway with goal to substantially complete by the end of the year and fully complete by end of calendar 2026 to drive productivity, scalability and cost reductions.
Strategic Review and Capital Flexibility
Board is evaluating unsolicited indications of interest and strategic alternatives, engaged Roth Capital Partners, and filed a universal shelf (Form S-3) to provide flexibility for accretive transactions.