UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-KSB
[X] Annual Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended September 30, 2007
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
Commission File Number 1-05707
GENERAL EMPLOYMENT ENTERPRISES, INC.
(Name of small business issuer in its charter)
Illinois 36-6097429
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
One Tower Lane, Suite 2200, Oakbrook Terrace, IL 60181
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (630) 954-0400
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, no par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Check whether the issuer is not required to file reports pursuant to Section
13 or 15(d) of the Exchange Act. [ ]
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
Indicate by checkmark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
The issuer's revenues for the most recent fiscal year were $19,690,000.
The aggregate market value of the common stock held by non-affiliates computed
by reference to the price at which the common stock was sold as of October 31,
2007 was $8,279,000.
The number of shares outstanding of the issuer's common stock as of
October 31, 2007 was 5,153,265.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the General Employment Enterprises, Inc. Proxy Statement for the
annual meeting of shareholders to be held on February 25, 2008 are
incorporated by reference into Part III of this Form 10-KSB.
Transitional small business disclosure format: Yes [ ] No [X]
2
TABLE OF CONTENTS
Page
PART I
Item 1, Description of Business. 4
Item 2, Description of Property. 5
Item 3, Legal Proceedings. 6
Item 4, Submission of Matters to a Vote of Security Holders. 6
PART II
Item 5, Market for Common Equity, Related Stockholder Matters and
Small Business Issuer Purchases of Equity Securities. 6
Item 6, Management's Discussion and Analysis or Plan of Operation. 6
Item 7, Financial Statements. 12
Item 8, Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure. 24
Item 8A, Controls and Procedures. 24
Item 8B, Other Information. 24
PART III
Item 9, Directors, Executive Officers, Promoters, Control Persons
and Corporate Governance; Compliance with Section 16(a)
of the Exchange Act. 25
Item 10, Executive Compensation. 25
Item 11, Security Ownership of Certain Beneficial Owners
and Management. 25
Item 12, Certain Relationships and Related Transactions, and
Director Independence. 26
Item 13, Exhibits. 26
Item 14, Principal Accountant Fees and Services. 28
3
PART I
Item 1, Description of Business.
General
General Employment Enterprises, Inc. (the "Company") was incorporated in the
State of Illinois in 1962 and is the successor to employment offices doing
business since 1893. In 1987 the Company established Triad Personnel
Services, Inc., a wholly-owned subsidiary, incorporated in the State of
Illinois. The principal executive office of the Company is located at One
Tower Lane, Suite 2200, Oakbrook Terrace, Illinois.
Services Provided
The Company operates in one industry segment, providing professional staffing
services. The Company offers its customers both placement and contract
staffing services, specializing in the placement of information technology,
engineering and accounting professionals.
The Company's placement services include placing candidates into regular,
full-time jobs with client-employers. The Company's contract services include
placing its professional employees on temporary assignments, under contracts
with client companies. Contract workers are employees of the Company,
typically working at the client location and at the direction of client
personnel for periods of three months to one year. Management believes that
the combination of these two services provides a strong marketing opportunity,
because it offers customers a variety of staffing alternatives that includes
direct hire, temporary staffing and a contract-to-hire approach to hiring.
The percentage of revenues derived from these services is as follows:
Year Ended September 30
2007 2006
Contract services 43% 51%
Placement services 57% 49%
Marketing
The Company markets its services using the trade names General Employment
Enterprises, Omni One, Business Management Personnel, Triad Personnel Services
and Generation Technologies. As of September 30, 2007 it operated 19 branch
offices located in downtown or suburban areas of major U.S. cities in 9
states. The offices were concentrated in Illinois (4) and California (3),
with two offices each in Arizona, Indiana, Massachusetts, Ohio and Texas, and
one office each in Florida and North Carolina.
The Company markets its services to prospective clients primarily through
telephone marketing by its recruiting and sales consultants, and through
mailing of employment bulletins listing candidates available for placement and
contract employees available for assignment.
The Company has a diverse customer base, and no single customer accounted for
more than 5% of its revenues during either of the last two fiscal years.
4
Competition
The staffing industry is highly competitive. There are relatively few
barriers to entry by firms offering placement services, while significant
amounts of working capital typically are required for firms offering contract
services. The Company's competitors include a large number of sole-
proprietorship operations, as well as regional and national organizations.
Many of them are large corporations with substantially greater resources than
the Company.
Because the Company focuses its attention on professional staffing positions,
it competes by providing highly qualified candidates who are well matched for
the position, by responding quickly to client requests, and by establishing
offices in convenient locations. As part of its service, the Company provides
reference checking, scrutiny of candidates' work experience and optional
background checks. In general, pricing is considered to be secondary to
quality of service as a competitive factor. During slow hiring periods,
however, competition can put pressure on the Company's pricing.
Geographic diversity helps the Company to balance local or regional business
cycles. Multiple offices in the Boston, Chicago, Columbus (Ohio),
Indianapolis, Los Angeles and Phoenix markets help to provide better client
services through convenient office locations and the sharing of assignments.
Recruiting
The success of the Company is highly dependent on its ability to obtain
qualified candidates. Prospective employment candidates are generally
recruited through telephone contact by the Company's employment consultants or
through postings on the Internet. For Internet postings, the Company
maintains its own web page at www.generalemployment.com and uses other
Internet job posting bulletin board services. The Company maintains database
records of applicants' skills to assist in matching them with job openings.
The Company screens and interviews applicants who are presented to its
clients.
Employees
As of September 30, 2007, the Company had approximately 150 regular employees
and 130 contract service employees.
Item 2, Description of Property.
The Company's policy is to lease commercial office space for all of its
offices. The Company's headquarters are located in a modern 31-story building
near Chicago, Illinois. The Company leases 8,200 square feet of space at that
location, under a lease that will expire in 2015. The lease may be cancelled
by the Company in 2012 under certain conditions.
The Company's staffing offices are located in downtown and suburban business
centers in 9 states. Established offices are operated from leased space
ranging from 800 to 2,200 square feet, generally for periods of three to five
years, with cancellation clauses after certain periods of occupancy in some
cases. Management believes that existing facilities are adequate for the
Company's current needs and that its leasing strategies provide the Company
with sufficient flexibility to open or close offices to accommodate business
needs.
5
Item 3, Legal Proceedings.
From time to time, the Company is subject to various legal proceedings and
claims arising in the ordinary course of business. As of September 30, 2007,
there were no material legal proceedings pending against the Company.
Item 4, Submission of Matters to a Vote of Security Holders.
Not applicable.
PART II
Item 5, Market for Common Equity, Related Stockholder Matters and Small
Business Issuer Purchases of Equity Securities.
The Company's common stock is listed on the American Stock Exchange and is
traded under the symbol JOB. The following table sets forth the quarterly
high and low sales prices per share of the Company's common stock on the
consolidated market for each quarter within the last two fiscal years, as
reported by the American Stock Exchange.
Fourth Third Second First
Quarter Quarter Quarter Quarter
Fiscal 2007
High $ 2.00 $ 3.47 $ 2.50 $ 1.90
Low 1.52 1.92 1.67 1.62
Fiscal 2006:
High $ 2.05 $ 1.72 $ 2.10 $ 2.75
Low 1.43 1.41 1.46 1.86
There were 717 holders of record on October 31, 2007.
On November 20, 2006, the Company declared a $.10 per share cash dividend on
its common stock, payable on January 9, 2007 to shareholders of record as of
December 15, 2006.
Information concerning securities authorized for issuance under equity
compensation plans is presented in Item 11 of this annual report.
During the three years ended September 30, 2007, no securities were sold by
the Company without registering the securities under the Securities Act of
1933.
During the three months ended September 30, 2007, no equity securities of the
Company were purchased by the Company.
Item 6, Management's Discussion and Analysis or Plan of Operation.
Overview
The Company provides contract and placement staffing services for business and
industry, specializing in the placement of information technology, engineering
and accounting professionals. As of September 30, 2007 the Company operated
19 offices located in 9 states.
6
The Company's business is highly dependent on national employment trends in
general and on the demand for professional staff in particular. As an
indicator of employment conditions, the national unemployment rate was 4.7% in
September 2007 and 4.6% in September 2006. These statistics indicate a
relatively full level of employment in the United States during the last
twelve months.
During the 2007 fiscal year, the Company experienced stronger demand for its
placement services, compared with the prior year. Because of the stronger
demand, and because placement services have a higher profit margin than
contract services, the Company focused more of its marketing efforts on the
placement business during the year. As a result, the Company achieved
increases in both the number of placements and the average placement fee,
while the number of billable contract hours declined.
During the same period, the Company experienced greater challenges in finding
well-qualified candidates for both placement and contract assignments than it
had during the prior year. This factor constrained revenue growth in both
divisions.
Consolidated net revenues for the year ended September 30, 2007 decreased 2%
compared with the prior year. As a result of the changed demand, placement
service revenues were up 15%, while contract service revenues were down 18%.
The effects of lower consolidated net revenues, together with an 8% increase
in general and administrative expenses, resulted in a 22% decline in income
from operations.
Because long-term contracts are not a significant part of the Company's
business, future results cannot be reliably predicted by considering past
trends or by extrapolating past results. While it is difficult to accurately
predict future hiring patterns or the demand for staffing services, management
believes that existing branch offices have the capacity to accommodate
additional consulting staff and a higher volume of business.
Results of Operations
A summary of operating data, expressed as a percentage of consolidated net
revenues, is presented below.
Year Ended September 30
2007 2006
Net revenues:
Contract services 42.9% 51.1%
Placement services 57.1 48.9
Net revenues 100.0 100.0
Operating expenses:
Cost of contract services 28.7 36.2
Selling 35.8 30.4
General and administrative 32.4 29.5
Total operating expenses 96.9 96.1
Income from operations 3.1% 3.9%
7
Net Revenues
Consolidated net revenues for the year ended September 30, 2007 were down
$378,000 (2%) from the prior year. Placement service revenues increased
$1,427,000 (15%), while contract service revenues decreased $1,805,000 (18%).
During fiscal 2007, the Company experienced stronger demand for its placement
services. As a result, the number of placements grew by 4%, and the average
placement fee was up 9% over the same period last year.
Because of a shift in the Company's marketing focus toward the placement
business, the contract service business declined. The decrease in contract
service revenues reflects a 21% decrease in the number of billable hours,
which was partially offset by a 2% increase in the average hourly billing
rate.
Operating Expenses
Total operating expenses for the year ended September 30, 2007 were down
$202,000 (1%) compared with the prior year.
The cost of contract services was down $1,615,000 (22%) as a result of the
lower volume of contract business. However, margins improved. The gross
profit margin on contract business was 33.2% for the year ended September 30,
2007, which was 4.0 points higher than 29.2% for the prior year. There are no
direct costs associated with placement service revenues.
Selling expenses increased $953,000 (16%) for the period. Commission expense
was up 14% because of the change in revenue mix and because the Company's
commission costs are higher on placement business than on contract business.
Recruitment advertising expense was up 27% because of a higher number of
Internet job postings needed to attract qualified candidates. Selling
expenses represented 35.8% of consolidated net revenues, which was up 5.4
points from the prior year.
General and administrative expenses increased $460,000 (8%) for the year ended
September 30, 2007. Compensation in the operating divisions was up 6% due to
hiring additional employment consultants. Administrative compensation was up
10% because of inflationary increases in pay rates and an increase in stock-
based compensation expense. Depreciation and amortization expense increased
44% as a result of capital expenditures during the last two years. All other
general and administrative expenses together increased 5%. As a result,
general and administrative expenses represented 32.4% of consolidated
revenues, which was up 2.9 points from the prior year.
Other
Investment income for the year ended September 30, 2007 was up $88,000 (41%),
due to a combination of higher balances available for investment and a higher
average rate of return.
There was no provision for income taxes in either year, because of the
availability of operating losses carried forward from prior years.
Financial Condition
As of September 30, 2007, the Company had cash and cash equivalents of
$6,344,000, which was an increase of $440,000 from September 30, 2006. Net
working capital at September 30, 2007 was $6,395,000, which was a decrease of
$344,000 from September 30, 2006, and the current ratio was 4.0 to 1.
Shareholders' equity as of September 30, 2007 was $7,324,000, which
represented 74% of total assets.
8
During the fiscal year ended September 30, 2007, the net cash provided by
operating activities was $1,314,000. Net income for the period, together with
depreciation and other non-cash charges, provided $1,218,000, while working
capital items provided an additional $96,000.
Expenditures for the acquisition of property and equipment were $364,000 for
the year ended September 30, 2007. The major expenditures were for computer
equipment and software, as the Company completed a two-year program to upgrade
its computer systems.
In November 2006, the Company's board of directors declared a cash dividend in
the amount of $.10 per common share, which resulted in a total payment of
$515,000 in January 2007.
In November 2007, the Company's board of directors declared a cash dividend in
the amount of $.10 per common share, which is expected to result in a total
payment of $515,000 in January 2008.
All of the Company's office facilities are leased. As of September 30, 2007,
future minimum lease payments under noncancelable lease agreements having
initial terms in excess of one year totaled $2,510,000. At that date, the
Company also had contractual obligations to purchase approximately $160,000 of
recruitment advertising through December 2007.
The Company has an employment agreement with the chief executive officer that
provides for severance benefits if the officer's employment terminates for any
reason other than "cause." The Company also has arrangements covering other
officers and key employees that would become effective if their employment
terminated under certain conditions following a change in control of the
Company. As of September 30, 2007, the potential aggregate obligation under
these arrangements, if all such officers and employees were terminated, was
approximately $3,400,000.
As of September 30, 2007, there were approximately $2,000,000 of losses
available to reduce federal taxable income in future years through 2024, and
there were approximately $4,800,000 of losses available to reduce state
taxable income in future years, expiring from 2008 through 2024. Future
realization of the tax benefits of net operating loss carryforwards ultimately
depends on the existence of sufficient taxable income within the carryforward
period. Based on the weight of available evidence, the Company determined
that it is more likely than not that all of the deferred tax assets will not
be realized. Accordingly, the Company maintained a full valuation allowance
as of September 30, 2007. See "Income Taxes" in the Notes to Consolidated
Financial Statements for additional information.
The Company's primary source of liquidity is from its operating activities.
The Company's philosophy regarding the maintenance of cash balances reflects
management's views on potential future needs for liquidity. Management
believes that funds generated by operations, together with existing cash
balances, will be adequate to finance current operations and capital
expenditures for the foreseeable future.
Off-Balance Sheet Arrangements
As of September 30, 2007, and during the year then ended, there were no
transactions, agreements or other contractual arrangements to which an
unconsolidated entity was a party, under which the Company (a) had any direct
9
or contingent obligation under a guarantee contract, derivative instrument or
variable interest in the unconsolidated entity, or (b) had a retained or
contingent interest in assets transferred to the unconsolidated entity.
Critical Accounting Policies
The consolidated financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America and
the rules of the United States Securities and Exchange Commission.
Management makes estimates and assumptions that can affect the amounts of
assets and liabilities reported as of the date of the financial statements, as
well as the amounts of reported revenues and expenses during the periods
presented. Those estimates and assumptions typically involve expectations
about events to occur subsequent to the balance sheet date, and it is possible
that actual results could ultimately differ from the estimates. If
differences were to occur in a subsequent period, the Company would recognize
those differences when they became known. Significant matters requiring the
use of estimates and assumptions include deferred income tax valuation
allowances and accounts receivable allowances. Management believes that its
estimates and assumptions are reasonable, based on information that is
available at the time they are made.
The following accounting policies are considered by management to be
"critical" because of the judgments and uncertainties involved, and because
different amounts would be reported under different conditions or using
different assumptions.
Income Taxes
Deferred tax assets and liabilities are determined based on differences
between the financial reporting and tax bases of assets and liabilities, and
are measured using the enacted tax rates and laws that are expected to be in
effect when the differences reverse. A valuation allowance is recorded to
reduce deferred tax assets to the amount that is more likely than not to be
realized as a tax benefit in the future. If the Company were to change its
determination about the future realization of tax benefits, the valuation
allowance would be adjusted as a provision or credit to income taxes in the
period in which the determination is made. Judgment is required in assessing
the likelihood that tax assets will be realized. These judgments are based on
estimates about future taxable income, which is inherently uncertain.
Accounts Receivable Allowances
An allowance for placement falloffs is recorded, as a reduction of revenues,
for estimated losses due to applicants not remaining employed for the
Company's guarantee period. An allowance for doubtful accounts is recorded,
as a charge to bad debt expense, where collection is considered to be doubtful
due to credit issues. These allowances reflect management's estimate of
potential losses inherent in the accounts receivable balances, based on
historical loss statistics.
Recent Accounting Pronouncements
In July 2006, the Financial Accounting Standards Board (the "FASB") issued
Financial Interpretation No. 48, "Accounting for Uncertainty in Income Taxes".
Interpretation 48 specifies how tax benefits for uncertain tax positions are
to be recognized, measured and derecognized in financial statements, and it
10
requires certain disclosures of uncertain tax positions among other
provisions. Interpretation 48 is effective for fiscal years beginning after
December 15, 2006 and as a result, is effective for the Company in the first
quarter of fiscal 2008. The Company does not expect the adoption to have a
material effect on its financial statements.
In September 2006, the FASB issued Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements". Statement 157 defines fair value,
establishes a framework and gives guidance regarding the methods used for
measuring fair value, and it expands disclosures about fair value
measurements. Statement 157 is effective for fiscal years beginning after
November 15, 2007. The Company has not determined what impact Statement 157
may have on its results of operations and financial position.
In February 2007, the FASB issued Statement of Financial Accounting Standards
No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities". Under Statement 159, a company may choose, at specified
election dates, to measure eligible items at fair value and report unrealized
gains and losses on items for which the fair value option has been elected in
earnings at each subsequent reporting date. Statement 159 is effective for
fiscal years beginning after November 15, 2007. The Company has not
determined what impact Statement 159 may have on its results of operations and
financial position.
Forward-Looking Statements
As a matter of policy, the Company does not provide forecasts of future
financial performance. However, the Company and its representatives may from
time to time make written or verbal forward-looking statements, including
statements contained in press announcements, reports to shareholders and
filings with the Securities and Exchange Commission. All statements which
address expectations about future operating performance and cash flows, future
events and business developments, and future economic conditions are forward-
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based on management's then-current
expectations and assumptions. Actual outcomes could differ significantly.
The Company and its representatives do not assume any obligation to provide
updated information.
Some of the factors that could affect the Company's future performance
include, but are not limited to, general business conditions, the demand for
the Company's services, competitive market pressures, the ability of the
Company to attract and retain qualified personnel for regular full-time
placement and contract assignments, the possibility of incurring liability for
the Company's business activities, including the activities of its contract
employees and events affecting its contract employees on client premises, and
the ability to attract and retain qualified corporate and branch management.
11
Item 7, Financial Statements.
GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET
As of September 30
(In Thousands) 2007 2006
ASSETS
Current assets:
Cash and cash equivalents $6,344 $5,904
Accounts receivable, less allowances
(2007 -- $248; 2006 -- $280) 1,915 1,978
Other current assets 252 296
Total current assets 8,511 8,178
Property and equipment, net 929 801
Other assets 436 296
Total assets $9,876 $9,275
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accrued compensation $1,602 $1,495
Other current liabilities 514 632
Total current liabilities 2,116 2,127
Other liabilities 436 296
Shareholders' equity:
Preferred stock; authorized -- 100 shares;
issued and outstanding -- none -- --
Common stock, no-par value; authorized --
20,000 shares; issued and outstanding -
5,153 shares in 2007 and
5,148 shares in 2006 4,912 4,839
Retained earnings 2,412 2,013
Total shareholders' equity 7,324 6,852
Total liabilities and shareholders' equity $9,876 $9,275
See notes to consolidated financial statements.
12
GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF INCOME
Year Ended September 30
(In Thousands, Except Per Share) 2007 2006
Net revenues:
Contract services $ 8,448 $10,253
Placement services 11,242 9,815
Net revenues 19,690 20,068
Operating expenses:
Cost of contract services 5,641 7,256
Selling 7,051 6,098
General and administrative 6,385 5,925
Total operating expenses 19,077 19,279
Income from operations 613 789
Investment income 301 213
Net income $ 914 $ 1,002
Average number of shares:
Basic 5,150 5,148
Diluted 5,368 5,338
Net income per share:
Basic $ .18 $ .19
Diluted $ .17 $ .19
Cash dividends declared per share $ .10 $ --
See notes to consolidated financial statements.
13
GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended September 30
(In Thousands) 2007 2006
Operating activities:
Net income $ 914 $1,002
Depreciation and amortization 231 160
Other noncurrent items 73 5
Accounts receivable 63 50
Accrued compensation 107 (147)
Other current items, net (74) (68)
Net cash provided by operating activities 1,314 1,002
Investing activities:
Acquisition of property and equipment (364) (334)
Financing activities:
Exercises of stock options 5 --
Cash dividends paid (515) --
Net cash used by financing activities (510) --
Increase in cash and cash equivalents 440 668
Cash and cash equivalents at beginning of year 5,904 5,236
Cash and cash equivalents at end of year $6,344 $ 5,904
See notes to consolidated financial statements.
14
GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Year Ended September 30
(In Thousands) 2007 2006
Common shares outstanding:
Number at beginning of year 5,148 5,148
Exercises of stock options 5 --
Number at end of year 5,153 5,148
Common stock:
Balance at beginning of year $4,839 $4,839
Stock option expense 68 --
Exercises of stock options 5 --
Balance at end of year $4,912 $4,839
Retained earnings:
Balance at beginning of year $2,013 $1,011
Net income 914 1,002
Cash dividends declared (515) --
Balance at end of year $2,412 $2,013
See notes to consolidated financial statements.
15
GENERAL EMPLOYMENT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company
General Employment Enterprises, Inc. (the "Company") operates in one industry
segment, providing staffing services through a network of branch offices
located in major metropolitan areas throughout the United States. The Company
specializes in providing information technology, engineering and accounting
professionals to clients on either a regular placement basis or a temporary
contract basis. The Company has a diverse customer base, and no single
customer accounted for more than 5% of its revenues during either of the last
two fiscal years.
Significant Accounting Policies and Estimates
The consolidated financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America and
the rules of the United States Securities and Exchange Commission. The more
significant accounting policies that are followed by the Company are
summarized below.
Principles of Consolidation
The consolidated financial statements include the accounts and transactions of
the Company and its wholly-owned subsidiary. All significant intercompany
accounts and transactions are eliminated in consolidation.
Estimates and Assumptions
Management makes estimates and assumptions that can affect the amounts of
assets and liabilities reported as of the date of the financial statements, as
well as the amounts of reported revenues and expenses during the periods
presented. Those estimates and assumptions typically involve expectations
about events to occur subsequent to the balance sheet date, and it is possible
that actual results could ultimately differ from the estimates. If
differences were to occur in a subsequent period, the Company would recognize
those differences when they became known. Significant matters requiring the
use of estimates and assumptions include deferred income tax valuation
allowances, accounts receivable allowances, and valuations of property and
equipment. Management believes that its estimates and assumptions are
reasonable, based on information that is available at the time they are made.
Revenue Recognition
Placement service revenues are recognized when applicants accept offers of
employment, less a provision for estimated losses due to applicants not
remaining employed for the Company's guarantee period. Contract service
revenues are recognized when services are rendered.
Cost of Contract Services
The cost of contract services includes the wages and the related payroll taxes
and benefits of the Company's employees while they work on contract
assignments.
Income Taxes
Deferred tax assets and liabilities are determined based on differences
between the financial reporting and tax bases of assets and liabilities, and
are measured using the enacted tax rates and laws that are expected to be in
16
effect when the differences reverse. A valuation allowance is recorded to
reduce deferred tax assets to the amount that is more likely than not to be
realized as a tax benefit in the future.
Income Per Share
Basic income per share is based on the average number of common shares
outstanding. Diluted income per share is based on the average number of
common shares and the dilutive effect of stock options. Diluted income per
share does not include the effect of 155,000 stock options in fiscal 2007 and
50,000 stock options in fiscal 2006, because the exercise price of those
options was greater than the average market value of the common stock during
the year, and including them would have had an anti-dilutive effect on income
per share.
Cash Equivalents
Highly liquid investments with a maturity of three months or less when
purchased are considered to be cash equivalents.
Accounts Receivable Allowances
An allowance for placement falloffs is recorded, as a reduction of revenues,
for estimated losses due to applicants not remaining employed for the
Company's guarantee period. An allowance for doubtful accounts is recorded,
as a charge to bad debt expense, where collection is considered to be doubtful
due to credit issues. These allowances together reflect management's estimate
of the potential losses inherent in the accounts receivable balances, based on
historical loss statistics.
Property and Equipment
Property and equipment are recorded at cost. Depreciation expense is
calculated on a straight-line basis over estimated useful lives of five years
for computer equipment and two to ten years for office equipment, furniture
and fixtures. The Company capitalizes computer software purchased or
developed for internal use, and amortizes it over an estimated useful life of
five years. The carrying value of property and equipment is reviewed for
impairment whenever events or changes in circumstances indicate that it may
not be recoverable. If the carrying amount of an asset group is greater than
its estimated future undiscounted cash flows, the carrying value is written
down to the estimated fair value.
Deferred Compensation Plan
The Company has a rabbi trust agreement to protect the assets of its
nonqualified deferred compensation plan. The accounts of the rabbi trust are
included in the consolidated financial statements. Investments held by the
trust are included in other assets, and an offsetting obligation is included
in other liabilities. The investments are considered to be trading securities
and are reported at fair value, with the realized and unrealized holding gains
and losses being recorded in investment income, and an offsetting amount is
recorded in general and administrative expenses. Amounts on the consolidated
balance sheet as of September 30, 2006 have been reclassified to conform with
the 2007 presentation.
Stock-Based Compensation
Compensation expense is recorded for the fair value of stock options issued to
employees. The expense is measured as the estimated fair value of the stock
options on the date of grant and is amortized over the vesting periods.
17
Recent Accounting Pronouncements
In July 2006, the Financial Accounting Standards Board (the "FASB") issued
Financial Interpretation No. 48, "Accounting for Uncertainty in Income Taxes".
Interpretation 48 specifies how tax benefits for uncertain tax positions are
to be recognized, measured and derecognized in financial statements, and it
requires certain disclosures of uncertain tax positions among other
provisions. Interpretation 48 is effective for fiscal years beginning after
December 15, 2006 and as a result, is effective for the Company in the first
quarter of fiscal 2008. The Company does not expect the adoption to have a
material effect on its financial statements.
In September 2006, the FASB issued Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements". Statement 157 defines fair value,
establishes a framework and gives guidance regarding the methods used for
measuring fair value, and it expands disclosures about fair value
measurements. Statement 157 is effective for fiscal years beginning after
November 15, 2007. The Company has not determined what impact Statement 157
may have on its results of operations and financial position.
In February 2007, the FASB issued Statement of Financial Accounting Standards
No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities". Under Statement 159, a company may choose, at specified
election dates, to measure eligible items at fair value and report unrealized
gains and losses on items for which the fair value option has been elected in
earnings at each subsequent reporting date. Statement 159 is effective for
fiscal years beginning after November 15, 2007. The Company has not
determined what impact Statement 159 may have on its results of operations and
financial position.
Income Taxes
The components of the provision for income taxes are as follows:
(In Thousands) 2007 2006
Current tax provision $ -- $ --
Deferred tax provision (credit) related to:
Temporary differences (55) 17
Loss carryforwards 457 378
Valuation allowances (402) (395)
Provision for income taxes $ -- $ --
The differences between income taxes calculated at the 34% statutory U.S.
federal income tax rate and the Company's provision for income taxes are as
follows:
(In Thousands) 2007 2006
Income tax provision at statutory
federal tax rate $ 311 $ 341
Federal valuation allowance (317) (333)
Other 6 (8)
Provision for income taxes $ -- $ --
18
The net deferred income tax asset balance as of September 30 related to the
following:
(In Thousands) 2007 2006
Temporary differences $ 304 $ 249
Net operating loss carryforwards 892 1,349
Valuation allowances (1,196) (1,598)
Net deferred income tax asset $ -- $ --
As of September 30, 2007, there were approximately $2,000,000 of losses
available to reduce federal taxable income in future years through 2024, and
there were approximately $4,800,000 of losses available to reduce state
taxable income in future years, expiring from 2008 through 2024.
Future realization of the tax benefits of existing temporary differences and
net operating loss carryforwards ultimately depends on the existence of
sufficient taxable income within the carryforward period.
As of September 30, 2007, the Company performed an evaluation to determine
whether a valuation allowance was needed, in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes." The
Company considered all available evidence, both positive and negative, which
included the results of operations for the current and preceding years. The
Company had cumulative pretax losses for the four fiscal years from 2001
through 2004 of $11,133,000, and the Company had cumulative pretax income for
the three fiscal years from 2005 through 2007 of $2,587,000.
The Company also considered whether there was any currently available
information about future years. Because long-term contracts are not a
significant part of the Company's business, future results cannot be reliably
predicted by considering past trends or by extrapolating past results.
Moreover, the Company's earnings are strongly influenced by national economic
conditions and have been volatile in the past. Considering these factors, the
Company determined that it was not possible to reasonably quantify future
taxable income.
Based on the weight of available evidence, as required by Statement 109, the
Company determined that it is more likely than not that all of the deferred
tax assets will not be realized. Accordingly, the Company maintained a full
valuation allowance as of September 30, 2007.
Property and Equipment
Property and equipment consisted of the following as of September 30:
(In Thousands) 2007 2006
Computer equipment and software $ 2,294 $ 2,427
Office equipment, furniture and fixtures 1,543 1,596
Total property and equipment, at cost 3,837 4,023
Accumulated depreciation and amortization (2,908) (3,222)
Property and equipment, net $ 929 $ 801
19
During fiscal 2007, the Company disposed of fully-depreciated property and
equipment, primarily computer equipment, having an original cost of $550,000.
Other Current Liabilities
Other current liabilities consisted of the following as of September 30:
(In Thousands) 2007 2006
Accounts payable $ 93 $151
Accrued expenses 219 252
Deferred rent 202 229
Total other current liabilities $514 $632
Lease Obligations
The Company leases space for all of its branch offices, which are located
either in downtown or suburban business centers, and space for its corporate
headquarters. Branch offices are generally leased over periods from three to
five years. The corporate office lease expires in 2015, and it may be
cancelled by the Company in 2012 under certain conditions. The leases
generally provide for payment of basic rent plus a share of building real
estate taxes, maintenance costs and utilities.
Rent expense was $992,000 in fiscal 2007 and $985,000 in fiscal 2006. As of
September 30, 2007, future minimum lease payments under noncancelable lease
agreements having initial terms in excess of one year totaled $2,510,000, as
follows: fiscal 2008 - $916,000, fiscal 2009 - $655,000, fiscal 2010 -
$497,000, fiscal 2011 - $343,000; and fiscal 2012 - $99,000.
Commitments
As of September 30, 2007, the Company had contractual obligations to purchase
approximately $160,000 of recruitment advertising through December 2007.
Retirement Plans
The Company has a 401(k) retirement plan in which all full-time employees may
participate after one year of service. Under the plan, eligible participants
may contribute a portion of their earnings to a trust, and the Company makes
matching contributions, subject to certain limitations.
The Company has a nonqualified deferred compensation plan for certain
officers. Under the plan, the Company contributes a percentage of each
participant's earnings to a rabbi trust under a defined contribution
arrangement. The participants direct the investments of the trust, and the
Company does not guarantee investment performance. Participant account
balances are payable upon retirement or termination from the Company, subject
to certain vesting requirements.
The cost of retirement plans was $221,000 in fiscal 2007 and $170,000 in
fiscal 2006. Investment income from the deferred compensation plan was
$59,000 in fiscal 2007 and $22,000 in fiscal 2006.
20
Stock Option Plans
As of September 30, 2007, there were stock options outstanding under the
Company's 1995 Stock Option Plan, Amended and Restated 1997 Stock Option Plan
and 1999 Stock Option Plan. All three plans were approved by the
shareholders. The 1995 Stock Option Plan expired during fiscal 2006, and no
further options may be granted under that plan. The plans granted specified
numbers of options to non-employee directors, and they authorized the
Compensation Committee of the Board of Directors to grant either incentive or
non-statutory stock options to employees. All stock options outstanding as of
September 30, 2007 were non-statutory stock options, had exercise prices equal
to the market price on the date of grant, and had expiration dates ten years
after the date of grant.
A summary of stock option activity is as follows:
(Number of Options in Thousands) 2007 2006
Number of options outstanding:
Beginning of year 515 435
Granted 105 80
Exercised (5) --
End of year 615 515
Number of options exercisable
at end of year 470 435
Number of options available for grant
at end of year 98 203
Weighted average option prices per share:
Granted during the year $2.17 $1.63
Exercised during the year .86 --
Outstanding at end of year 1.33 1.16
Exercisable at end of year 1.12 1.07
The average fair value of stock options granted was estimated to be $0.95 per
share in fiscal 2007 and $0.75 per share in fiscal 2006. These estimates were
made using the Black-Scholes option pricing model and the following weighted
average assumptions:
2007 2006
Expected option life (years) 4.0 4.0
Expected stock price volatility 52.0% 54.0%
Expected dividend yield 0.4% 0.0%
Risk-free interest rate 4.4% 4.5%
Stock-based compensation expense was $68,000 in fiscal 2007. There was no
stock-based compensation expense in fiscal 2006 because the options were
granted at the end of the year. As of September 30, 2007, there was $91,000
of unrecognized compensation expense related to unvested stock options
outstanding, and the weighted average vesting period for those options was 1.4
years.
21
Stock options outstanding as of September 30, 2007 were as follows (number of
shares in thousands):
Weighted Weighted Average
Range of Number Average Number Average Remaining
Exercise Prices Outstanding Price Exercisable Price Life (Years)
At $.86 348 $ .86 348 $ .86 4.9
$1.25 to $2.45 267 1.95 122 1.88 7.7
As of September 30, 2007, the aggregate intrinsic value of outstanding stock
options and exercisable stock options was $272,000.
Severance Arrangements
The Company has an employment agreement with the chief executive officer that
provides for severance benefits if the officer's employment terminates for any
reason other than "cause." The Company also has arrangements covering other
officers and key employees that would become effective if their employment
terminated under certain conditions following a change in control of the
Company. As of September 30, 2007, the potential aggregate obligation under
these arrangements, if all such officers and employees were terminated, was
approximately $3,400,000.
Shareholder Rights Plan
On February 4, 2000, the Company adopted a shareholder rights plan, and the
Board of Directors declared a dividend of one share purchase right for each
share of outstanding common stock.
The rights will become exercisable if any person or affiliated group (other
than certain "grandfathered" shareholders) acquires, or offers to acquire, 10%
or more of the Company's outstanding common shares. Each exercisable right
entitles the holder (other than the acquiring person or group) to purchase, at
a price of $21.50 per share, common stock of the Company having a market value
equal to two times the purchase price. The purchase price and the number of
common shares issuable on exercise of the rights are subject to adjustment in
accordance with customary anti-dilution provisions.
The Board of Directors may authorize the Company to redeem the rights at a
price of $.01 per right at any time before they become exercisable. After the
rights become exercisable, the Board of Directors may authorize the Company to
exchange any unexercised rights at the rate of one share of common stock for
each right. The rights are nonvoting and will expire on February 22, 2010.
22
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
General Employment Enterprises, Inc.
Oakbrook Terrace, Illinois
We have audited the accompanying consolidated balance sheets of General
Employment Enterprises, Inc. and subsidiary as of September 30, 2007 and 2006
and the related consolidated statements of income, shareholders' equity, and
cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of General Employment Enterprises, Inc. and subsidiary at September 30, 2007
and 2006, and the consolidated results of their operations and their cash
flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
/s/ BDO Seidman, LLP
Chicago, Illinois
November 16, 2007
23
Item 8, Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
Item 8A, Controls and Procedures.
As of September 30, 2007, the Company's management evaluated, with the
participation of its principal executive officer and its principal financial
officer, the effectiveness of the Company's disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934 (the "Exchange Act"). Based on that evaluation, the
Company's principal executive officer and its principal financial officer
concluded that the Company's disclosure controls and procedures were adequate
as of September 30, 2007 to ensure that information required to be disclosed
in reports filed or submitted by the Company under the Exchange Act is
recorded, processed, summarized and reported, within the time periods
specified in the Securities and Exchange Commission's rules and forms.
There was no change in the Company's internal control over financial reporting
that occurred during the Company's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.
Item 8B, Other Information.
On November 19, 2007, the Company's Board of Directors approved amendments to
the Company's By-Laws. The amendments were adopted to improve corporate
governance and to conform with certain regulations. The more substantive
changes were to eliminate provisions that permitted a meeting of all
shareholders; to establish procedures for bringing business to a special
meeting of shareholders; to change the period of time required for
shareholders to nominate directors or to give notice of business to be brought
to an annual meeting; to establish a range for the number of authorized
directors; to eliminate the executive committee of the board of directors; to
authorize the board of directors to establish committees; to establish the
position of Chairman of the Board as a separate office from the Chief
Executive Officer; to establish the position of Chief Financial Officer as a
separate office from the Treasurer; to define the general powers of officers;
to clarify that compensation of the officers is to be approved by the board of
directors; and to permit the board of directors to provide for uncertificated
shares. The By-Laws, as amended, are filed as an exhibit to this annual
report.
On November 19, 2007, the Company's Board of Directors approved the form of an
indemnity agreement to be executed individually with its directors and
officers, which would require the Company to indemnify its directors and
officers against the risk of claims arising out of their service on behalf of
the Company. The purpose of the agreement is to help attract and retain
qualified individuals to serve as directors and officers of the Company.
24
PART III
Item 9, Directors, Executive Officers, Promoters, Control Persons and
Corporate Governance; Compliance with Section 16(a) of the Exchange Act.
Information set forth in the Company's Proxy Statement for the 2008 annual
meeting of shareholders under the headings "Directors and Nominees,"
"Executive Officers," "Compliance with Section 16(a) of the Exchange Act," and
"Audit Committee" is incorporated herein by reference.
The Company has a code of ethics that applies to all of its directors and
employees, including its principal executive officer, principal financial
officer and principal accounting officer. The code of ethics is filed as an
exhibit to this annual report.
Item 10, Executive Compensation.
Information set forth in the Company's Proxy Statement for the 2008 annual
meeting of shareholders under the principal heading "EXECUTIVE COMPENSATION"
is incorporated herein by reference.
Item 11, Security Ownership of Certain Beneficial Owners and Management.
Information set forth in the Company's Proxy Statement for the 2008 annual
meeting of shareholders under the principal heading "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" is incorporated herein by reference.
Securities authorized for issuance under equity compensation plans were as
follows as of September 30, 2007 (number of shares in thousands):
Number of securi-
ties remaining
available for
Number of future issuance
securities to under equity
be issued upon Weighted-average compensation
exercise of exercise price plans (excluding
outstanding of outstanding securities
options, warrants options, warrants reflected in
Plan category and rights and rights first column)
Equity compensation
plans approved by
security holders 615 $1.33 98
Equity compensation
plans not approved
by security holders -- -- --
Total 615 $1.33 98
25
Item 12, Certain Relationships and Related Transactions, and Director
Independence.
Information set forth in the Company's Proxy Statement for the 2008 annual
meeting of shareholders under the heading "Director Independence" is
incorporated herein by reference.
Item 13, Exhibits.
The following exhibits are filed as a part of this report:
No. Description of Exhibit
3.01 Articles of Incorporation and amendments thereto. Incorporated by
reference to Exhibit 3 to the Company's Quarterly Report on
Form 10-QSB for the quarter ended March 31, 1996, Commission File
No. 1-05707.
3.02 By-Laws of General Employment Enterprises, Inc., as amended
November 19, 2007.
4.01 Rights Agreement dated as of February 4, 2000, between General
Employment Enterprises, Inc. and Continental Stock Transfer and Trust
Company, as Rights Agent. Incorporated by reference to Exhibit 1 to
the Company's Registration Statement on Form 8-A filed with the
Securities and Exchange Commission on February 7, 2000, Commission
File No. 1-05707.
10.01* Key Manager Plan, adopted May 22, 1990. Incorporated by reference to
Exhibit 10(h) to the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1990, Commission File No. 1-05707.
10.02 Agreement with Sheldon Brottman dated October 3, 1991. Incorporated
by reference to Exhibit 10(l) to the Company's Annual Report on Form
10-K for the fiscal year ended September 30, 1991, Commission File
No.1-05707.
10.03* General Employment Enterprises, Inc. 1995 Stock Option Plan.
Incorporated by reference to Exhibit 4.1 to the Company's Form S-8
Registration Statement dated April 25, 1995, Registration No.
33-91550.
10.04* Amended and Restated General Employment Enterprises, Inc. 1997 Stock
Option Plan. Incorporated by reference to Exhibit 10.01 to the
Company's quarterly report on Form 10-QSB for the quarterly period
ended March 31, 2007, Commission File No. 1-05707.
10.05* General Employment Enterprises, Inc. 1999 Stock Option Plan.
Incorporated by reference to Exhibit 10 of the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1999, Commission
File No. 1-05707.
10.06* Employment Agreement with Herbert F. Imhoff, Jr. effective as of
August 1, 2001. Incorporated by reference to Exhibit 10.10 to the
Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 2001, Commission File No. 1-05707.
26
10.07* Chief Executive Officer Bonus Plan, adopted September 24, 2001.
Incorporated by reference to Exhibit 10.11 to the Company's Annual
Report on Form 10-K for the fiscal year ended September 30, 2001,
Commission File No. 1-05707.
10.08* The Corporate Plan for Retirement Select Plan Basic Plan Document.
Incorporated by reference to Exhibit 10.12 to the Company's Annual
Report on Form 10-K for the fiscal year ended September 30, 2001,
Commission File No. 1-05707.
10.09* The Corporate Plan for Retirement Select Plan Adoption Agreement
dated September 27, 2001. Incorporated by reference to Exhibit 10.13
to the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 2001, Commission File No. 1-05707.
10.10* First Amendment to the General Employment Enterprises, Inc. Executive
Retirement Plan dated September 27, 2001. Incorporated by reference
to Exhibit 10.14 to the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 2001, Commission File No. 1-05707.
10.11* Form of employment agreement with executive officers. Incorporated
by reference to Exhibit 10.01 to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended December 31, 2001,
Commission File No. 1-05707.
10.12* Operational Vice President Bonus Plan effective for fiscal years
beginning on or after October 1, 2004. Incorporated by reference to
Exhibit 10.01 to the Company's Quarterly Report of Form 10-QSB for
the quarterly period ended December 31, 2004, Commission File
No. 1-05707.
10.13* Form of stock option agreement under the General Employment
Enterprises, Inc. 1997 Stock Option Plan. Incorporated by reference
to Exhibit 99.01 to the Company's current report on Form 8-K dated
September 25, 2006, Commission File No. 1-05707.
10.14* Chief Executive Officer Bonus Plan Amendment 1, effective for fiscal
years beginning on or after October 1, 2006. Incorporated by
reference to Exhibit 10.01 to the Company's quarterly report on
Form 10-QSB for the quarterly period ended December 31, 2006,
Commission File No. 1-05707.
10.15* Form of director stock option agreement under the Amended and Restated
General Employment Enterprises, Inc. 1997 Stock Option Plan.
10.16* Form of stock option agreement under the General Employment
Enterprises, Inc. 1999 Stock Option Plan.
10.17* Resolution of the Compensation Committee of the Board of Directors
adopted September 24, 2007, amending the General Employment
Enterprises, Inc. Executive Retirement Plan.
10.18* Amendment of employment agreement with Herbert F. Imhoff, Jr.,
effective as of October 5, 2007.
10.19* Form of first amendment of employment agreements with Marilyn L.
White and with Kent M. Yauch, effective as of October 2, 2007.
10.20* Form of indemnity agreement with directors and officers, adopted
November 19, 2007.
27
14.01 General Employment Enterprises, Inc. Code of Ethics for Directors,
Officers and Employees, adopted as of August 16, 2004. Incorporated
by reference to Exhibit 14.01 to the Company's Form 8-K Current
Report dated August 16, 2004, Commission File No. 1-05707.
23.01 Consent of Independent Registered Public Accounting Firm.
31.01 Certification of the principal executive officer required by Rule
13a-14(a) or Rule 15d-14(a) of the Exchange Act.
31.02 Certification of the principal financial officer required by Rule
13a-14(a) or Rule 15d-14(a) of the Exchange Act.
32.01 Certifications required by Rule 13a-14(a) or Rule 15d-14(a) of the
Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United
States Code.
* Management contract or compensatory plan or arrangement.
Item 14, Principal Accountant Fees and Services.
Information set forth in the Company's Proxy Statement for the 2008 annual
meeting of shareholders under the heading "Principal Accountant Fees" is
incorporated herein by reference.
28
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
GENERAL EMPLOYMENT ENTERPRISES, INC.
(Registrant)
Date: November 19, 2007 By:/s/ Herbert F. Imhoff, Jr.
Herbert F. Imhoff, Jr.
Chairman of the Board, Chief
Executive Officer and President
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Date: November 19, 2007 By:/s/ Herbert F. Imhoff, Jr.
Herbert F. Imhoff, Jr., Director
Chairman of the Board, Chief
Executive Officer and President
(Principal executive officer)
Date: November 19, 2007 By:/s/ Kent M. Yauch
Kent M. Yauch, Director
Vice President, Chief Financial
Officer and Treasurer (Principal
financial and accounting officer)
Date: November 19, 2007 By:/s/ Dennis W. Baker
Dennis W. Baker, Director
Date: November 19, 2007 By:/s/ Sheldon Brottman
Sheldon Brottman, Director
Date: November 19, 2007 By:/s/ Andrew Dailey
Andrew Dailey, Director
Date: November 19, 2007 By:/s/ Delain G. Danehey
Delain G. Danehey, Director
Date: November 19, 2007 By:/s/ Joseph F. Lizzadro
Joseph F. Lizzadro, Director
29