Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Overview

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. The Company's segments consist of the following: (a) professional placement services specializing in the placement of information technology, engineering, and accounting professionals for direct hire and contract staffing, (b) temporary staffing services in the agricultural industry
(c) temporary staffing services in light industrial staffing and (d) management services.

The agricultural industry, light industrial staffing and management services segments are the direct result of acquisitions over the last two fiscal years. Onsite Services Inc. was acquired June 2010 which provided us entry to the agricultural industry while the acquisition of RFFG of Cleveland, LLC and DMCC Staffing, LLC in November 2011 provided entry into the light industrial market and management services. Lastly, Ashley Ellis, LLC was acquired in August 2011 and complemented the Company's professional staffing segment.

The Company's professional staffing services 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 8.2% in June 2012 and 9.2% in June 2011.

Management has implemented a strategy which included cost reduction efforts as well as identifying strategic acquisitions, financed primarily through the issuance of common stock, to improve the overall profitability and cash flows of the Company. We believe our current segments complement one another and position us for future growth.

As of June 30, 2012, the Company operated nineteen branch offices located in eleven states.