GEE Group, Inc. (AMEX:JOB) Q3 2025 Earnings Call Transcript

GEE Group, Inc. (AMEX:JOB) Q3 2025 Earnings Call Transcript August 19, 2025

Derek E. Dewan: Hello, and welcome to the GEE Group fiscal 2025 third quarter and year-to-date ended June 30, 2025 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 2025 third quarter and year-to-date ended June 30, 2025 results and provide you with our outlook for the remainder of 2025 and the foreseeable future. Some comments Kim and I will make may be considered forward looking, including predictions, estimates, expectations and other statements about our 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 Wednesday’’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 the periods being presented as this quarter or the quarter or this-year-to-date or the year- to-date, which refers to the 3-month or 9-month periods ending June 30, 2025, respectively.

Likewise, when we refer to the prior year quarter or prior year-to-date, we are referring to the comparable prior 3-month or 9-month periods ended June 30, 2024, respectively. During this presentation, we also will 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 are based upon rounded amounts. For purposes of this call, and all amounts, percentages and related items presented are approximations accordingly. For your convenience, our prepared remarks for today’s call are available in the Investor Center of our website, www.geegroup.com.

Now on to today’s prepared remarks. Beginning in the second half of 2023 throughout 2024 and so far in 2025, we have encountered and continue to face very difficult and challenging conditions in the hiring environment for our staffing services. These have stemmed from various factors, including the over hiring that took place in ’21 and ’22 in the immediate aftermath of the pandemic and the macroeconomic uncertainty, interest rate volatility and inflation that followed. These conditions have produced a near universal cooling effect on U.S. employment, including businesses use of contingent labor and the hiring of full-time personnel. Since 2023, many client initiatives such as IT projects and corporate expansion activities requiring additional labor in general, have been put on hold.

Instead, many of these businesses we serve have implemented and proceeded with layoffs and hiring freezes and in many cases, have focused on retaining their existing employees rather than adding new employees. Companies and businesses are cautiously assessing the potential for interest rate cuts and changing market conditions to ensure their investments in technology and human capital are strategic and sustainable. Artificial intelligence, or AI, is gaining ground at an accelerated pace and is further complicating the demand for and use of human resources for certain tasks and is influencing project planning and capital expenditures. Collectively, these conditions have had a killing effect on our business and resulted in fewer job orders for both contract personnel and direct hire placements.

Q&A Session

Our financial results for the fiscal 2025 third quarter and year-to-date ended June 30, 2025, have been impacted by these conditions as well. The company’s contract and direct hire placement services are currently provided under its Professional Staffing Services operating division or segment. On June 2, 2025, we entered into an agreement for the sale of certain operating assets of the Industrial segment, including those of BMCH Inc. Triad Logistics, Inc. and our Triad Staffing brand. These results of the Industrial segment have been classified as discontinued operations and are excluded from the results of continuing operations reported below as well as in the unaudited consolidated condensed financial statements included in our quarterly report on Form 10-Q for this quarter, unless otherwise stated.

Consolidated revenues were $24.5 million for the quarter and $73 million year-to-date. Gross profits and gross margins were $8.7 million and 35.4%, respectively, for the quarter and $25 million and 34.2% respectively, year-to-date. Consolidated non-GAAP adjusted EBITDA was negative $25,000 for the quarter and negative $918,000 year-to-date. We reported a net loss from continuing operations of $400,000 and or $0.00 per diluted share for the quarter and a net loss from continuing operations of $34 million or $0.31 per diluted share year-to-date. We are aggressively taking actions to adapt to the current business climate and refine our strategic focus, growth plans to improve operating performance and financial results. These include streamlining our core operations and improving and adjusting our productivity to match our current business volume, which helped us improve our results in terms of non-GAAP adjusted EBITDA and EBITDA.

In addition to our ongoing cost reduction and system and business integration initiatives, we have a renewed 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. Importantly, we anticipate continuing improvements in our productivity, aiding in restoring meaningful profitability as soon as practically possible. In addition to the aforementioned near-term initiatives, we are working closely with our frontline leaders in the field across all of our verticals to support them as we all continue to aggressively pursue new business as well as opportunities to grow and expand existing client revenues. We are seeing some positive results, particularly in the direct hire placement business as the volatility and macroeconomic uncertainty currently gripping our economy and labor markets begin to subside, I am very confident we are well positioned to meet the increased demand from existing customers and win significant new business.

As you also know, we paused share repurchases on December 31, 2023, having repurchased just over 5% of our outstanding shares as of the beginning of the program. Share repurchases always will be considered as an alternative component of our capital allocation strategy and a bona fide alternative use of excess capital in the future if and when considered prudent. We fully intend to successfully navigate through the challenges outlined previously and are laser-focused on revenue growth, expense reduction and profitability. 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 believe that our stock price will improve and that there is a good opportunity for upward movement once we are able to operate again in a more optimal economic environment with improved labor conditions.

Before I turn the call over to Kim, I wish to thank our dedicated employees and associates who work extremely hard every day to ensure that our clients get the very best service. They are a key ingredient in driving our company’s success. At this time, I’ll turn the call over to our Senior Vice President and Chief Financial Officer, Kim Thorpe, who will further elaborate on our fiscal 2025 third quarter and year-to-date results. Kim?

Kim D. Thorpe: Thank you, Derek, and good morning, everyone. As Derek mentioned in his remarks, our former Industrial segment results are now excluded from continuing operations and comparisons I will address today. So consolidated revenues, again from continuing operations for the quarter and year-to-date were $24.5 million and $73 million down 9% and 10% from the comparable prior year periods. Professional contract staffing services revenues for the quarter and year-to-date were $21.3 million and $64.3 million, down 10% and 11%, respectively, from the comparable prior year periods. Direct hire revenues for the quarter and year-to-date were $3.2 million and $8.7 million, respectively, which were near breakeven compared with their comparable prior periods.

Our top line performance for the fiscal third quarter and year-to-date has continued to be directly impacted by the challenging macroeconomic and labor market conditions facing us and the staffing industry as Derek commented on a moment ago. Gross profit and gross margin for the quarter and year-to-date were $8.7 million and 35.4% and $25 million and 34.2% respectively, compared to $9.2 million and 34.1% and $27 million and 33.4%, respectively, from the comparable prior year periods. Our lower gross profit dollars were mainly attributable to lower volumes of our professional contract staffing services revenues. By contrast, the net increases in our gross margin are mainly attributable to the increase in the mix of direct hire placement revenues, which have a 100% gross margin relative to total revenue as our direct hire volume remained near breakeven in the current and prior comparable periods.

While professional contract staffing services revenues were lower. Selling, general and administrative expenses for the quarter and year-to-date were $9 million and $26.7 million, down 8% and 9%, respectively, compared with the prior year periods. Given the realities of our present environment, we continue to reduce cost and focus heavily on streamlining our core operations and on improving productivity. This has helped us improve our results in terms of non-GAAP adjusted EBITDA and non- GAAP EBITDA in both the current quarter and year-to-date as compared with the prior comparable periods. In addition to our ongoing cost reduction and integration initiatives, we have also placed a renewed focus on VMS and MSP source business including use of special recruiting resources and acceleration of the integration and use of AI technology in our recruiting, sales and other processes.

I also want to reemphasize that our plans are intended to restore and enhance profitability as soon as practically possible. Our loss from continuing operations, net loss from continuing operations for the quarter was $400,000 or just under — or under $0.01 a share as compared with a loss of $18.1 million or approximately $0.17 per diluted share for the prior year quarter. Loss from continuing operations year-to-date was $34 million or $0.31 per diluted share as compared with net loss of $20 million — $20.5 million or $0.19 per diluted share for the prior year to date. The larger net losses I just mentioned, $18 million, $34 million, $20 million were all impacted by noncash write-offs of intangibles and goodwill. EBITDA, which is a non-GAAP financial measure for the quarter and year-to-date improved to negative $270,000 and negative $1.7 million, respectively, as compared with negative $524,000 and negative $2.5 million for the comparable prior year periods.

Adjusted EBITDA, also a non-GAAP financial measure for the quarter and year-to-date improved to a negative $25,000 or near breakeven and a negative $918,000, respectively, as compared to negative $329,000 and a negative $1 million for the comparable prior year periods, due primarily to cost reduction initiatives, and our increased gross margin, we were able to improve our EBITDA and adjusted EBITDA results so far this year as compared with the prior comparable periods. Our current or working capital ratio as of June 30 was 4.2:1. We had negative free cash flow, a non-GAAP financial measure, including cash flows from discontinued operations for the 9 months of $1.9 million as compared with negative cash flow of $1.2 million for the prior 9 months year-to-date.

Our liquidity position as of June 30, 2025, remained very strong with $18.6 million in cash, an undrawn ABL credit facility with availability of $6.6 million, overall net working capital of $24.1 million and no outstanding debt. Our net book value per share and net tangible book value per share were $0.46 and $0.23, respectively, as of June 30, 2025. In conclusion, as Derek mentioned, we remain cautiously optimistic and are preparing for the long term as well, including making modernization improvements and enhancements led by the integration of AI across all of our businesses. Before I turn it back 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 press release.

Now I’ll turn the call back over to Derek.

Derek E. 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 them and be prepared for an anticipated recovery. What we hope to take away from our earnings press release and our remarks today is that we are focused on growing revenues and streamlining our operations to reduce costs and gaining efficiencies by implementing AI and other technology while preparing for a more conducive and growth-oriented labor market. We will continue to work hard for the benefit of our shareholders including consistently evaluating strategic uses of GEE Group’s capital to maximize shareholder returns. Now Kim and I would be happy to answer your questions.

Derek E. Dewan: [Operator Instructions]Thank you. So the first question is regarding updating the website regarding the sale of Triad. And we will do that post haste and refresh the website with other current activities that we’re doing. The second question is capital allocation. And it’s essentially talking about acquiring a company versus share repurchases and the risk associated with both. We are bullish on both activities at the appropriate time. And I think strategically, when it comes to share repurchases, I want you to hear from Kim, our CFO, who has a position that we all believe in. Kim?

Kim D. Thorpe: Yes. Thanks. The first part of the question is how do we decide whether to either buy shares back or do acquisitions or invest in other growth initiatives. And the answer is that we do financial measurement on all these things. And where we come down to currently is that once we get our positive cash flow back, which we expect to happen in the next 6 months, at least, then at that point, as we’re generating positive cash flow, we’ll then again take a look at share repurchases. We don’t look at it in terms of share repurchases or M&A or other things one versus the other. We believe the appropriate approach is a blend to continue to get good yielding acquisitive look for value-adding acquisitions, which are accretive that will help grow the company.

Doing share repurchases alone sounds good and it’s very good for the shareholders who remain in the company for temporarily, but it does not grow the company and it requires cash and other resources to do it. So it’s a balance.

Derek E. Dewan: And let me add, there’s a second question that talks about M&A. What’s the status of our target list and how many do we have? What’s the expectation and timing of closing deals? We have several deals that we’ve considered, done diligence on and, in fact, had letters of intent, nonbinding. We pulled back on most of those because as you know, the industry is in what I call a stagnant to down mode right now and their results have trailed downward. So what we don’t want to do is purchase a company with declining revenue, and we’re looking for stabilization. So the relationships are hot still, we keep those going. And when we see stabilization, we’ll be able to move forward on the deals. So that’s our strategic focus.

And the other aspect of this is price expectation. So selling off of prior year or prior 2 years’ results, doesn’t cut it with us. We’re focused on what’s your current run rate, what’s your current earnings rate and so forth and what kind of synergies can we get on the deal as well. So keeping all that in mind, discipline is very important here. And as Kim said, our first and main objective is to restore positive cash flow from operations, and we’re getting very close on that. And when we do that, that gives us the opportunity to also pursue share repurchases and other activities, but most importantly, it allows us to focus on acquisitions that are on the upswing or at least flat lined and not declining in terms of revenue growth and profitability.

So it takes a lot of discipline and analysis to do the right deal. And we’re very, very focused on looking deep down to make sure that whatever performance we look at today is sustainable and on the upward swing. Do you want to add anything, Kim?

Kim D. Thorpe: The only thing I would add is, obviously, AI is top of mind for everyone today. It’s all over everything we pick up and read here. It’s a topic of every conversation we have. So we’ve sprinkled in that ingredient into our criteria so that when we look at other businesses, we want — we’re not suggesting they have to be AI champions at this point, but we also consider the opportunities of how AI can be used in our combined businesses going forward including looking at companies that might have AI tools for the staffing industry and under development and we have targets like that.

Derek E. Dewan: Yes. And in our streamlining of cost process, AI is a big factor as well. And we also have an offshore recruiting component that we’ve expanded actually and will continue to grow to drop our cost structure and our recruiting costs, so — and get maximum production for less money. I can talk more about AI and I think the appropriate thing to do is to update all of you subsequent to this call as we proceed with AI and publicly speak to what we’ve done and what our plans are regarding AI. I think it’s very important. AI is here to stay. In some respects, and since we’re on it, it has disintermediated some of the positions we typically would fill with personnel, with the human element. And that’s across most of the verticals in accounting a bit — you’ll see it in IT on some of the entry level or what I call mundane type programming activities.

However, there’s still a lot to do out there, and we’re focused on machine learning specialists, software, data scientists and so forth. So those are the high-demand skill sets, and that’s why we need to tailor our focus particularly in our IT group. On the accounting side, we’re seeing robust movement at the upper end, CFOs, controllers, tax personnel at the high end. The lower mundane tasks of payables and payroll are the ones being replaced by AI. So it’s both a benefit and a challenge, and we’re up to it, and we’re approaching our business on that model that AI is here to stay and will help us be more efficient, but that we’ve got to target the skill sets that are required in the marketplace to support it. And that’s what we’re doing. Another question is that we’ve got here…

Kim D. Thorpe: I think you’ve covered these 3. I think this is the next one…

Derek E. Dewan: Okay. Kim, do you want to take that one?

Kim D. Thorpe: Yes. Can you please give us some color on the expected uses of cash that earmarked for M&A and hopefully, buybacks, et cetera. Yes, we — as I just mentioned a minute ago, our approach to this is, especially since we’re in the environment that we’re currently in is to get cash flow positive again, which we are working at hard every day, and we’re getting very close. We’re very close to get cash flow positive again. And then to use that cash, reconsider reinstating stock buybacks as one potential use of incrementally generated cash going forward, but keeping a nice pool of cash as large as we can hold on to for the eventuality of one or more good acquisitions. So it’s hard to budget that out exactly because you don’t know where the opportunities are 6 months from now on M&A, but that’s how we’re approaching it.

Derek E. Dewan: One of the questions in connection with M&A is what are you targeting? And also what staffing or non-staffing activities are you approaching? So we’re moving up the food chain toward the consultancy type businesses and thinking on of the box on what type of activities will grow in today’s economy that are complementary to staffing, but not necessarily directly in the staffing/human resources business. So that was an excellent question, and that’s absolutely a focus of our efforts on the M&A front.

Kim D. Thorpe: Let me add one more thing on that question. The question also says how should we be thinking about additional draws on cash to fund working capital needs, et cetera? Our business is very efficient. It’s — it probably has a 95% to 97% cash correlation with operations because — and over the long term and especially now because we do have NOLs and so we’re not in a high taxpaying position. Our EBITDA is a pretty good proxy for what our cash flow is. So that’s a good way to think about it.

Derek E. Dewan: Here’s a very good question that I get often. Can you explain how other staffing companies are doing so much better than GEE Group? So we look at peer group analysis constantly to see what they’re doing, how they’re doing and so forth. A case in point is Robert Half, a very blue-chip staffing company, and that has a lot of the verticals that we have. So I analyze Robert Half’s results. And if you dig in, you’ll see that their permanent placement/direct hire business and contract staffing business both declined in the 10% to 12% range. However, their aggregate revenue decline was much less because of their Protiviti high-end consulting division. So that bears out that as a hedge against the downturn in the traditional staffing roles that we fill that the higher-end consultancy will offset that.

So the decline is very similar to ours, unfortunately, but it’s the reality. Some of the other staffing companies are down somewhere between 6% and 12%. Interestingly, those that have international focus like Manpower, Adecco Group, Randstad, and so forth and to a lesser degree, Kelly and I’m using those because they are the behemoths that have a lot of foreign business or international business. The international segment outperformed the U.S. segment. So that buffered some of the results. But when they report, they segment down to the U.S. versus international, and their U.S. decline is almost a mirror image of ours. That’s not an excuse, though, for lack of performance because our share of the market can be increased irrespective of whether the growth in the industry takes place.

So that’s our approach. And I think being nimble and quick and good at what we’re doing and provide the best resources to the customers, priced right is very important. But I hope that answers the question, and I do peer group analysis all the time. I hate to say misery does not love company. I can tell you that. And we’re not satisfied in any respect to the decline in revenue. However, we’re turning the corner on the profit side and with a boost in the revenue side, we should be able to produce some good results. So that’s our approach, and we take it very seriously. And we’re not burning through cash. If you notice the cash position has been fairly constant despite a little bit of negative cash flow, but we’ve been tightening the belt across the board.

So look at the cash position, it hasn’t moved much quarter-to-quarter. Next question. Well, there’s another buyback question. Why not put it in similar to Berkshire Hathaway? And Again, I think Kim’s point on getting the cash flow toward the positive and sustainable will help us consider more aggressive activities, including the share buyback. Can you elaborate more simply on the impact of AI on demand for staffing? I covered that somewhat and how it was disrupting staffing. In contrast to Robert Half, which said in its July call, there has not been a significant impact of AI on revenue. That’s interesting because Robert Half, I pulled their press release and their report, I saw it, but when I looked at what they were doing. Robert Half, in many respects, doesn’t staff some of the higher-end IT projects that we do and that AI has impacted the demand for the talent.

So there is a difference in the type of business. Now on the flip side, on the recovery end, they won’t benefit as much on the upside. But AI and — that may be their opinion. But if you look across the board, if you look at CNBC or Fox business or any commentary, they’re all talking about the impact of AI on employment in general, not just staffing companies. So AI is good. It’s here to stay, and you have to be reactive to it, and not use it as a crutch saying, oh, we’re not performing because AI…

Kim D. Thorpe: AI has its maximum yield so far and I would just say so far in recruiting. I mean, because it’s a great recruit because it can go out — if you can look at a lot of data quickly, it could send a lot of messages quickly and it can turn and call…

Derek E. Dewan: And using AI agents on the sales side, we’re all over that and on the recruiting side. And so to be able to grow without adding headcount and internal cost is the key and to streamline the existing business that we already have. So we’ve embraced AI, and we will make an announcement with the tools that we’re using to talk more. I’ll give you an example. We’re doing away with phone systems. That’s on the agenda replaced by traditional phone systems. And requiring more or relying more on cellular activities and outreach with AI.

Kim D. Thorpe: We’re updating our applicant and tracking systems and embedding AI into our app.

Derek E. Dewan: In a very big way. So we’re actually very excited about how AI will transform the industry. And also from an acquisition standpoint, the potential and possibility of acquiring a company that’s bent toward AI. And I don’t want to get too far ahead of it on that one. But those are the things we’re doing right now. And we’re embracing AI, not using it as a crutch for lack of performance. So what do we want to do? Will you be offering AI as a service or just from internal automate. That’s an excellent question. The answer is offering AI as a service is on the agenda as well. You have mentioned AI tech for a few quarters, what products have you implemented? What are the results cost savings? That’s a great one. And we’ll come out publicly and talk about our cost savings and how AI is being used to help drive that.

I think based on what we have. And it takes a little while to implement. So that’s what we’re in the process of right now. Do you regret buying Hornet? No, Hornet actually has helped us tremendously because there’s cross utilization of the recruiting resources overseas. So that’s been a good pickup. And the gentlemen that joined us leading the charts, Larry Bruce has embraced the entire organization and has helped the sales team in multiple engagements.

Kim D. Thorpe: Yes. We’ve — in fact, we’ve more than doubled the international resource platform that we have for recruiting, and it’s now being utilized in 2 of our other businesses, and it’s growing. So that’s going to be a good source for us going forward.

Derek E. Dewan: Here’s a good question. Just to be clear, are you developing your own AI staffing tools and/or are you using and implementing readily available AI tools? The answer is yes. So we have some internal development and then we have some shelf packages that we will be implementing as well. So it’s a combination of both. How large is the offshore IT segment? Is this mainly used for cost cutting or solution-based work? It’s mainly used for recruiting across the board.

Kim D. Thorpe: Our goal is to grow that platform significantly. Like I said, it’s more than doubled in size since January. So it’s growing, and it’s being embraced more and more by other counterparts in the business. So in fact, we’ll talk about one project we recently did where we were able to recruit and onboard 80 individuals for a single project within a matter of days because of the additional resources we had through Hornet.

Derek E. Dewan: Yes. Another question. This is a good one. How are your competitors reacting to a weak environment? Are they reducing prices to get volume? Are they exiting the business since they can’t make a profit? Well, the answer is they’re not exiting the business. And I think this is noteworthy about our performance. Our gross margins actually improved this quarter over last year, and they’re significant. They’re in the mid-30s. So when you look at us on a peer group basis, we’re doing excellent on gross margin as is a Robert Half and somebody — in fact, I looked at theirs, we may have been a little bit higher this quarter, at least on par with them. So we’re doing pricing pretty good. However, we need more volume. And that’s what we’re holding the line.

We’re not discounting prices substantially at all. Our competitors might, but they don’t — they’re not on the high end. Here we go. Many of your competitors are emphasizing consulting Protiviti, RHI, statement of work and other products. Do you see a migration toward that SOW and how are we responding? The answer is an absolute yes. That is a spot-on question. I gave you an analysis of Robert Half’s result and how the consulting side buffered the staffing side. So we are moving aggressively toward that. And that’s why we’re not trying to do vanilla staffing acquisitions, okay? I call them vanilla because that’s what they are. I think moving into SOW and specialty consulting services, I had a bench in my prior life and took advantage of that.

So when we call it the bench, you actually have consultants similar to a big 4 or Protiviti over at Robert Half. ASGN also has that. One question is, would GEE consider joining a larger company? GEE will do whatever benefits the shareholder group as a whole. And that’s as a public company, that’s my responsibility and our Board’s responsibility. So we always have to consider that for sure. And if shareholder value gets maximized. And so — and we think the combination with synergies and all that works, then we’ll do it. And likewise, we can do everything and anything that benefits the business as a whole and takes care of employees and move forward. So we’re thrilled with that potential. Would you have consulting the question probably, we just not authorized buybacks even if you’re not ready to repurchase?

Kim D. Thorpe: Let me answer that question. It only takes one single board action and then a quick call to our — we have a broker on standby. The reason for not authorizing it and leaving it out there on use is because we think that’s a little…

Derek E. Dewan: I don’t want to be misleading. But let me tell you this. We have an account set up, we have funds in that account. We do for a potential buyback. So it’s a matter of a few days to turn on the spigot when and if it’s appropriate. So that’s a great question. And it says you don’t have to make an announcement. That — so as a public company, we, in fact, do have to make an announcement and that’s what’s appropriate and required. What levered are you comfortable with after cash is exhausted? Well, typically borrowing on a cash flow basis, most of our borrowing would be against accounts receivable if and when we borrowed on the credit facility. But I would never go over 2.5x EBITDA. And assuming you have positive EBITDA, that’s kind of the benchmark for cash flow lending. Are we investing in sales to help plant seeds during the — so we can take advantage of the upturn? Absolutely.

Kim D. Thorpe: Hornet is a perfect example of that, relatively low cost. We got an outstanding sales professional in the…

Derek E. Dewan: And we’re going after high-volume MSP business, and we now have the recruiting resources to be able to deliver that on a profitable and economical basis. Are there any other questions?

Kim D. Thorpe: No, that’s it.

Derek E. Dewan: Okay. At this point, that concludes our call. We sincerely appreciate you joining us today, and we are very bullish on the future, and we’ll navigate through troubled waters. Thanks again for joining us.