Direct Hire Growth and Margin Improvement
Direct hire revenues increased 8% year-over-year to $2.7 million (100% gross margin). Consolidated gross profit was $7.4 million and gross margin improved to 36.1% from 33.0% in the prior-year quarter (approx. +310 basis points). January 2026 direct-hire revenue was $1.2 million, the strongest month of the fiscal year to date.
Improved EBITDA and Reduced Net Loss
Non-GAAP adjusted EBITDA improved to negative $97,000 versus negative $304,000 in the prior-year quarter. GAAP EBITDA improved to negative $303,000 from negative $513,000. Net loss from continuing operations narrowed to $150,000 (≈ $0.00 per diluted share) from a prior-year loss of $684,000 (≈ $0.01 per diluted share).
Cost Reductions and Operating Discipline
SG&A expenses declined $736,000 (≈ 9%) year-over-year to $7.7 million; management implemented estimated annualized SG&A reductions of $3.8 million in H2 2025. Management targets an SG&A ratio of 30% of revenue or less through systems upgrades and legal-entity consolidation.
Strong Liquidity and Debt-Free Balance Sheet
Company reported $20.1 million in cash, an undrawn ABL facility with $4.2 million availability, net working capital of $23.9 million, a current ratio of 5.3:1 and no outstanding debt. Net book value per share was $0.45 and net tangible book value per share was $0.22 as of Dec 31, 2025.
Strategic M&A Completion and Technology Initiatives
Completed acquisition of Hornet Staffing (fiscal 2025) and increased focus on VMS/MSP-sourced business. Company is integrating AI into recruiting, sales and operations and pursuing disciplined, targeted M&A (AI consulting, cybersecurity, IT consulting) to build future growth platforms.