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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

[X] Quarterly Report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the quarterly period ended June 30, 2003

or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

For the transition period from __________ to __________


Commission File Number: 001-05707


GENERAL EMPLOYMENT ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)


Illinois 36-6097429
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

One Tower Lane, Suite 2100, Oakbrook Terrace, Illinois 60181
(Address of principal executive offices) (Zip Code)

(630) 954-0400
(Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act during the preceding 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 [ ]

Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Act). [ ]

The number of shares outstanding of the registrant's common stock
as of July 31, 2003 was 5,120,776.





PART I - FINANCIAL INFORMATION


Item 1. Financial Statements.

GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET
June 30 September 30
2003 2002
(In Thousands) (Unaudited)

ASSETS
Current assets:
Cash and cash equivalents $4,314 $ 4,759
Accounts receivable, less allowances
(Jun. 2003 --$309; Sept. 2002 --$312) 1,981 2,255
Income tax refunds receivable 144 1,540
Other current assets 469 428

Total current assets 6,908 8,982

Property and equipment:
Furniture, fixtures and equipment 6,274 6,575
Accumulated depreciation (4,821) (4,693)

Net property and equipment 1,453 1,882

Goodwill 1,088 1,069

Total assets $9,449 $11,933


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 629 $ 623
Accrued compensation and payroll taxes 1,123 1,030
Other current liabilities 273 291

Total current liabilities 2,025 1,944

Shareholders' equity:
Preferred stock, authorized -- 100 shares;
issued and outstanding -- none -- --
Common stock, no-par value; authorized --
20,000 shares; issued and outstanding --
5,121 shares 51 51
Capital in excess of stated value of shares 4,726 4,695
Retained earnings 2,647 5,243

Total shareholders' equity 7,424 9,989

Total liabilities and shareholders' equity $9,449 $11,933

See notes to consolidated financial statements.


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GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
Three Months Nine Months
Ended June 30 Ended June 30
(In Thousands, Except Per Share) 2003 2002 2003 2002

Net revenues:
Placement services $ 1,357 $ 1,362 $4,113 $ 4,841
Contract services 3,240 3,372 9,914 10,556

Net revenues 4,597 4,734 14,027 15,397

Operating expenses:
Cost of contract services 2,246 2,240 6,857 6,988
Selling 910 1,044 2,928 3,555
General and administrative 2,314 2,727 6,883 8,581

Total operating expenses 5,470 6,011 16,668 19,124

Loss from operations (873) (1,277) (2,641) (3,727)
Interest income 21 18 45 97

Loss before income taxes (852) (1,259) (2,596) (3,630)
Credit for income taxes -- (475) -- (1,375)

Net loss $ (852) $ (784) $(2,596) $(2,255)

Net loss per share $ (.17) $ (.15) $ (.51) $ (.44)

Average number of shares 5,121 5,121 5,121 5,114

See notes to consolidated financial statements.


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GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

Nine Months
Ended June 30
(In Thousands) 2003 2002

Operating activities:
Net loss $(2,596) $(2,255)
Depreciation and other noncurrent items 556 577
Accounts receivable 274 517
Income tax refunds receivable 1,396 (400)
Accrued compensation and payroll taxes 93 (543)
Other current items, net (53) (129)

Net cash used by operating activities (330) (2,233)

Investing activities:
Acquisition of property and equipment (96) (27)
Acquisition of Generation Technologies, Inc. (19) (207)
Maturities of short-term investments -- 500

Net cash provided (used) by investing activities (115) 266

Financing activities:
Exercises of stock options -- 35

Net cash provided by financing activities -- 35

Decrease in cash and cash equivalents (445) (1,932)
Cash and cash equivalents at beginning of period 4,759 7,293

Cash and cash equivalents at end of period $ 4,314 $ 5,361

See notes to consolidated financial statements.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Interim Financial Statements

The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q. Accordingly, they do not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. This financial information should be read in
conjunction with the financial statements included in the
Company's annual report on Form 10-K for the year ended
September 30, 2002.


New Accounting Pronouncements

Goodwill
The Company adopted the provisions of Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible
Assets," as of October 1, 2002. This statement requires that
goodwill no longer be amortized, and it requires instead that
goodwill be tested at least annually for impairment. If the
carrying value of goodwill were determined to be greater than its
estimated fair value under the impairment test, then it would be
written down to its estimated fair value.

The Company completed a transitional impairment test, as required
by Statement No. 142, and determined that there was no impairment
of goodwill as of October 1, 2002. Goodwill amortization expense
was $18,000 for the nine months ended June 30, 2002.


Disposal Activities
The Company adopted the provisions of Statement of Financial
Accounting Standards No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," effective for exit or disposal
activities initiated after December 31, 2002. This statement
requires companies to record a liability for the cost of exit or
disposal activities in the period when the liability is incurred,
and it requires that fair value be used for the initial
measurement of such a liability.


Acquisition

On April 10, 2001, the Company completed a transaction to
purchase substantially all of the assets and business operations
of Generation Technologies, Inc. ("GenTech"), a staffing business
in Pittsburgh, Pennsylvania, specializing in information
technology professionals.

The purchase price was established as an initial cash payment at
the time of closing, and three annual earn out payments to be
based on earnings of the business, as defined. The Company
recorded the first annual payment of $207,000 during the nine
months ended June 30, 2002 and the second annual payment of
$19,000 during the nine months ended June 30, 2003 as additional
goodwill.


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Income Taxes

There were no credits for income taxes as a result of the pretax
losses for the three and nine-month periods ended June 30, 2003,
because the tax losses must be carried forward, and there was not
sufficient assurance that a future tax benefit would be realized.

For federal income tax purposes, and for certain states, the tax
losses incurred in fiscal 2002 were carried back, and the Company
recorded the benefit of those tax refunds. For all other state
and local income taxes, the fiscal 2002 losses were carried
forward. As of September 30, 2002, the Company had recorded the
tax benefit of all available loss carrybacks, and there were
approximately $3,600,000 of losses available to reduce state and
local taxable income in future years. Under current income tax
regulations, any losses incurred by the Company in fiscal 2003
will be carried forward.

The Company received federal income tax refunds of $1,398,000
during the nine months ended June 30, 2003 and $840,000 during
the nine months ended June 30, 2002.


Office Closings

The Company closed seven branch offices during the first nine
months of fiscal 2003 and four branch offices during the first
nine months of fiscal 2002 due to unprofitable operations.
General and administrative expenses include provisions for office
closings, covering the future lease obligations, of $178,000 in
the three-month period ended June 30, 2003, $215,000 in the nine-
month period ended June 30, 2003, and $253,000 in the nine-month
period ended June 30, 2002.


Line of Credit

The Company's $1,000,000 loan agreement with a bank, which was
never utilized, expired on April 30, 2003 and was not renewed.



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

The Company provides placement and contract staffing services for
business and industry, specializing in the placement of
information technology, engineering and accounting professionals.
As of June 30, 2003, the Company operated 25 branch offices
located in major metropolitan business centers in twelve states.

A summary of operating data, expressed as a percentage of
consolidated net revenues, is presented below. Percentages may
not add due to rounding.


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Three Months Nine Months
Ended June 30 Ended June 30
2003 2002 2003 2002
Net revenues:
Placement services 29.5% 28.8% 29.3% 31.4%
Contract services 70.5 71.2 70.7 68.6

Net revenues 100.0 100.0 100.0 100.0

Operating expenses:
Cost of contract services 48.9 47.3 48.9 45.4
Selling 19.8 22.1 20.9 23.1
General and administrative 50.3 57.6 49.1 55.7

Total operating expenses 119.0 127.0 118.8 124.2

Loss from operations (19.0)% (27.0)% (18.8)% (24.2)%



Third Quarter Results of Operations

Net Revenues
Consolidated net revenues for the three months ended June 30,
2003 were down $137,000 (3%) from the same period last year.
This was due to a $5,000 decrease in placement service revenues
and a $132,000 (4%) decrease in contract service revenues.
Placement services represented 30% of consolidated net revenues
for the period, and contract services represented 70% of the
total.

Placement service revenues were down for the quarter due to the
combination of an 8% increase in the number of placements and a
7% decrease in the average placement fee. The decrease in
contract service revenues was the result of a 5% increase in
billable hours, offset by a 9% decrease in the average hourly
billing rate.

The Company attributes the decline in revenues to the weak demand
for employment services, particularly in the information
technology sector, that has lingered since the U.S. economic
recession in 2001. The economic weakness, together with
competitive pressures, led to lower average service fees and
billing rates.


Operating Expenses
Total operating expenses for the quarter were down $541,000 (9%)
compared with the same quarter last year.

The cost of contract services was up $6,000, despite lower
contract service revenues, resulting in lower profit margins.
Due to competitive market conditions, the gross profit margin on
contract services declined 2.9 points to 30.7% this quarter,
compared with 33.6% the prior year.

Selling expenses decreased $134,000 (13%) this quarter, mainly
due to lower recruitment advertising expense. Selling expenses
represented 19.8% of consolidated net revenues, which was down
2.3 points from the prior year.


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General and administrative expenses decreased $413,000 (15%) for
the quarter. Excluding a $178,000 provision for the cost of
closing branch offices during the current quarter, general and
administrative expenses were down $591,000 (22%). Compensation
in the operating divisions decreased 27%, primarily due to a
reduction in staff size, while office rent and occupancy costs
were down 15% for the quarter. All other general and
administrative expenses were down 21%. General and
administrative expenses represented 50.3% of consolidated
revenues, and that was down 7.3 points from the prior year
because expenses declined more sharply than revenues.

To control operating costs, the Company closed eight unprofitable
branch offices during the last twelve months. As a result of
this and other actions, the Company reduced its in-house
consulting and administrative staff by 24% from the prior-year
level.


Other Items
The loss from operations was $873,000 for the quarter ended June
30,2003, which was $404,000 (32%) less than last year's operating
loss of $1,277,000. The improvement was accomplished, despite
lower revenues in the current quarter, through cost reduction
actions taken by the Company during the last twelve months.

There was no credit for income taxes for the quarter ended June
30, 2003, because the tax loss for the period must be carried
forward, and there was not sufficient assurance that a future tax
benefit would be realized. There was an income tax credit of
$475,000 in the prior-year quarter.

After interest and taxes, the net loss for the quarter was
$852,000, compared with a net loss of $784,000 the prior year.



Nine Months Results of Operations

Net Revenues
For the nine months ended June 30, 2003, the Company's business
was adversely affected by the same U.S. economic conditions that
affected it in the third quarter. Consolidated net revenues were
down $1,370,000 (9%) from the same period
last year. This was due to a $728,000 (15%) decrease in
placement service revenues and a $642,000 (6%) decrease in
contract service revenues. Placement services represented 29% of
consolidated net revenues for the period, and contract services
represented 71% of the total.

Placement service revenues were down for the period because of a
13% decline in the average placement fee, while the number of
placements was about the same as last year. The decrease in
contract service revenues was the result of a 4% increase in
billable hours, offset by a 9% decrease in the average hourly
billing rate.


Operating Expenses
Total operating expenses for the year to date were down
$2,456,000 (13%) compared with the same period last year.

The cost of contract services was down $131,000 (2%), as a result
of the lower contract service revenues and lower profit margins.
Due to competitive market conditions, the gross profit margin on
contract services declined 3.0 points to 30.8% for the year to
date, compared with 33.8% the prior year.


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Selling expenses decreased $627,000 (18%) for the year to date.
Commission expense was down 11% due to the lower placement
service revenues and lower commissionable profits, while
recruitment advertising expense was 35% lower than last year.
Selling expenses represented 20.9% of consolidated net revenues,
which was down 2.2 points from the prior year.

General and administrative expenses decreased $1,698,000 (20%)
for the year to date. Compensation in the operating divisions
decreased 26%, primarily due to a reduction in staff size, while
office rent and occupancy costs were down 14% for the period.
All other general and administrative expenses were down 18%.
General and administrative expenses represented 49.1% of
consolidated revenues, and that was down 6.6 points from the
prior year because expenses declined more sharply than revenues.


Other Items
The loss from operations was $2,641,000 for the nine months ended
June 30, 2003, which was $1,086,000 (29%) better than last year's
operating loss of $3,727,000. The improvement was accomplished,
despite lower revenues in the current year, through cost
reduction actions taken by the Company during the last twelve
months.

There was no credit for income taxes for the nine months ended
June 30, 2003, because the tax loss for the period must be
carried forward and there was not sufficient assurance that a
future tax benefit would be realized. There was an income tax
credit of $1,375,000 in the prior-year period.

After interest and taxes, the net loss for the year to date was
$2,596,000, compared with a net loss of $2,255,000 the prior
year.



Financial Condition

As of June 30, 2003, the Company had cash and cash equivalents of
$4,314,000, which was a decrease of $445,000 from September 30,
2002. Net working capital at June 30, 2003 was $4,883,000, which
was a decrease of $2,155,000 compared with September 30, 2002,
and the current ratio was 3.4 to 1.

During the nine months ended June 30, 2003, the net cash used by
operating activities was $330,000, as the $2,596,000 net loss for
the period was partially offset by a $1,396,000 reduction in
income tax refunds receivable. All other working capital items
provided $314,000, and depreciation and other non-cash expenses
provided $556,000. As part of the Company's cash conservation
measures, capital expenditures were limited to $96,000 for the
period, and there were no cash dividends paid.

All of the Company's office facilities are leased. Information
about future minimum lease payments is presented in the notes to
the consolidated financial statements contained in the Company's
annual report on Form 10-K for the year ended September 30, 2002.

As of June 30, 2003, the Company had no debt outstanding, and
there were no off-balance sheet arrangements, unconsolidated
subsidiaries, commitments or guarantees of other parties, except
as disclosed in the notes to the consolidated financial
statements. Shareholders' equity as of June 30, 2003 was
$7,424,000, which represented 79% of total assets.


9



Outlook

The Company's business is highly dependent on national employment
trends in general and on the demand for information technology
and other professional staff in particular. The demand for the
Company's employment services has been adversely affected by the
lingering weakness in the employment market caused by economic
and political uncertainties that followed the U.S. economic
recession and terrorist attacks in 2001.

It is not known how long the weakness in the U. S. labor market
will continue to have an adverse effect on the Company's
operations. Management believes that the Company's placement
service revenues will continue at depressed levels until there is
an increase in national business spending on computer equipment
and software, leading to a rebound in the technology sector of
the economy.

The Company's current priority is to minimize the impact of the
weak economy, to return the Company to profitability as soon as
possible, and to be positioned for growth when the demand for its
services improves. Returning the Company to profitability will
require a combination of both increasing revenues and reducing
costs. Since September 2001, management took steps to lower the
Company's infrastructure costs, including closing twelve
unprofitable branch offices, reducing the in-house consulting and
administrative staff by 42% and reducing other operating
expenses. As a result, the Company reduced its general and
administrative expenses for the first nine months of fiscal 2003
by 20%, compared with the prior-year period. Management believes
that it took all appropriate actions within its control to reduce
costs to date, consistent with positioning the Company for the
future, and it will continue to evaluate the Company's operations
and take appropriate actions to meet the economic challenges
ahead.

As of September 30, 2002, the Company had recorded the income tax
benefit of all available loss carrybacks, and there were
approximately $3,600,000 of losses available to reduce state and
local taxable income in future years. Under current income tax
regulations, any losses incurred by the Company in fiscal 2003
would not result in current tax refunds, but would be carried
forward to reduce taxable income in subsequent years.

The Company's primary source of liquidity is normally from its
operating activities. Despite recent losses, management believes
that existing cash and securities will be adequate to finance
current operations for the foreseeable future. Nevertheless, if
operating losses were to continue indefinitely, or
if the Company's business were to deteriorate further, such
losses would have a material, adverse effect on the Company's
financial condition. External sources of funding are not likely
to be available to support continuing losses.


Risk Factors

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 project assignments, and the ability to attract and
retain qualified corporate and branch management.


10



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. This
includes statements relating to business expansion plans,
expectations about revenue and earnings growth, and general
statements of optimism about the future. 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.




Item 3. Quantitative and Qualitative Disclosures About Market
Risk.

The Company was not exposed to material market risks as of June
30, 2003.



Item 4. Controls and Procedures.

Disclosure Controls and Procedures
As of June 30, 2003, 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 June 30, 2003 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.


Internal Control over Financial Reporting
Under Rules 13a-15 and 15d-15 of the Exchange Act, companies are
required to maintain internal control over financial reporting,
as defined, and company managements are required to evaluate and
report on internal control over financial reporting. Under an
extended compliance period for these rules, the Company must
begin to comply with the evaluation and disclosure requirements
with its annual report for the fiscal year ending September 30,
2005, and the Company must begin to comply with a requirement to
perform a quarterly evaluation of changes to internal control
over financial reporting that occur thereafter.

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.


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PART II - OTHER INFORMATION



Item 6. Exhibits and Reports on Form 8-K.

Exhibits
The following exhibits are filed as part of this report:

No. Description of Exhibit

31 Certifications required by Rule 13a-14(a) or Rule 15d-14(a)
of the Exchange Act.

32 Certifications required by Rule 13a-14(b) or Rule 15d-14(b)
of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of
the United States Code.


Reports on Form 8-K
The Company filed the following report on Form 8-K during the
quarter ended June 30, 2003:

The Company reported that it issued a press release on April 24,
2003 containing information regarding its results of
operations and financial condition for the quarterly period ended
March 31, 2003.


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SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


GENERAL EMPLOYMENT ENTERPRISES, INC.
(Registrant)


Date: August 8, 2003 By: /s/ Kent M. Yauch
Kent M. Yauch
Vice President, Chief Financial Officer
and Treasurer (Principal financial
officer and duly authorized officer)


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