- Q3 operating earnings were break-even, or up 60% to
$15.5 million on an adjusted
basis
- Q3 revenue down 4.3%; down 5.8% in constant
currency
- Q3 adjusted EBITDA margin increased to 2.3% compared to 1.6%
in the prior year driven by meaningful reduction in operating
expenses resulting from business transformation initiative
- Company expects sale of European staffing operations and
near-term outcome from growth initiatives to drive further
expansion of adjusted EBITDA margin
TROY,
Mich., Nov. 9, 2023 /PRNewswire/ -- Kelly
(Nasdaq: KELYA, KELYB), a leading global specialty talent solutions
provider, today announced results for the third quarter of
2023.
Peter Quigley, president and
chief executive officer, announced revenue for the third quarter of
2023 totaled $1.1 billion, a 4.3%
decrease, or 5.8% decrease in constant currency, compared to the
corresponding quarter of 2022. Year-over-year revenue trends were
impacted by customers' more guarded approach to hiring and
initiating new projects or capital spending, partially offset by
favorable currency impacts.
"In the third quarter, persistent macroeconomic uncertainty
continued to temper demand for temporary and permanent staffing
services," said Quigley. "As expected, results in SET and P&I
reflected these challenges, while our Education segment and more
resilient outcome-based solutions in P&I once again delivered
year-over-year growth. We continued to focus on what we can control
in this challenging operating environment, driving significant
progress in the execution of our transformation initiatives – the
benefits of which are evident in our operating results."
Kelly reported break-even operating earnings in the third
quarter of 2023 compared to a loss of $21.4
million reported in the third quarter of 2022. Earnings in
the third quarter of 2023 include $15.4
million of transformation-related charges. Excluding the
transformation-related charges, adjusted earnings from operations
were $15.5 million. Loss from
operations in the third quarter of 2022 included a $30.7 million goodwill impairment charge and
adjusted earnings were $9.5 million.
Adjusted earnings improved 60% year-over-year primarily as a result
of lower operating expenses due to our ongoing transformation
initiatives.
Earnings per share in the third quarter of 2023 were
$0.18 compared to a loss per share of
$0.43 in the third quarter of 2022.
Included in the earnings per share in the third quarter of 2023 is
a $0.32 loss per share related to
transformation-related charges, net of tax. Included in the third
quarter of 2022 was a $0.67 loss per
share, net of tax, from a goodwill impairment charge. On an
adjusted basis, earnings per share were $0.50 in the third quarter of 2023, double the
$0.25 earnings per share in the
corresponding quarter of 2022.
Quigley went on to provide an update on the company's business
transformation initiative.
"Following the implementation of strategic restructuring
activities at the outset of the third quarter, we remained focused
on sustaining these structural improvements across the enterprise.
We also made progress on several initiatives that are positioning
Kelly to accelerate profitable growth over the long term. With the
efficiency phase of our transformation on-track, our growth
initiatives delivering encouraging early results, and the sale of
our European staffing business poised to benefit both of these
efforts, we remain committed to driving continued improvement of
our adjusted EBITDA margin and maximizing value creation."
In the fourth quarter of 2023, Kelly expects to achieve an
adjusted EBITDA margin in the range of 2.8% to 3.0%, reflecting the
impact of market conditions that are more challenging than
anticipated. Assuming the benefit of a full year of its
transformation-related savings, the sale of its European staffing
business and current top-line trends, the company would expect to
reach a normalized, adjusted EBITDA margin in the range of 3.3 to
3.5%.
Kelly also reported that on November
7, its board of directors declared a dividend of
$0.075 per share. The dividend is
payable on December 6, 2023, to
shareholders of record as of the close of business on November 22, 2023.
In conjunction with its third-quarter earnings release, Kelly
has published a financial presentation on the Investor
Relations page of its public website and will host a
conference call at 9 a.m. ET
on November 9 to review the results and answer questions. The
call may be accessed in one of the following ways:
Via the Internet:
Kellyservices.com
Via the Telephone
(877) 692-8955 (toll free) or (234) 720-6979 (caller paid)
Enter access code 5728672
After the prompt, please
enter "#"
A recording of the conference call will be available after
2:30 p.m. ET on November 9, 2023, at (866) 207-1041 (toll-free)
and (402) 970-0847 (caller-paid). The access code is 7027637#. The
recording will also be available at kellyservices.com during this
period.
This release contains statements that are forward looking in
nature and, accordingly, are subject to risks and uncertainties.
These statements are made under the "safe harbor" provisions of the
U.S. Private Securities Litigation Reform Act of 1995. Statements
that are not historical facts, including statements about Kelly's
financial expectations, are forward-looking statements. Factors
that could cause actual results to differ materially from those
contained in this release include, but are not limited to, (i)
changing market and economic conditions, (ii) disruption in the
labor market and weakened demand for human capital resulting from
technological advances, loss of large corporate customers and
government contractor requirements, (iii) the impact of laws and
regulations (including federal, state and international tax laws),
(iv) unexpected changes in claim trends on workers' compensation,
unemployment, disability and medical benefit plans, (v) litigation
and other legal liabilities (including tax liabilities) in excess
of our estimates, (vi) our ability to achieve our business's
anticipated growth strategies, (vii) our future business
development, results of operations and financial condition, (viii)
damage to our brands, (ix) dependency on third parties for the
execution of critical functions, (x) conducting business in foreign
countries, including foreign currency fluctuations, (xi)
availability of temporary workers with appropriate skills required
by customers, (xii) cyberattacks or other breaches of network or
information technology security, and (xiii) other risks,
uncertainties and factors discussed in this release and in the
Company's filings with the Securities and Exchange Commission. In
some cases, forward-looking statements can be identified by words
or phrases such as "may," "will," "expect," "anticipate," "target,"
"aim," "estimate," "intend," "plan," "believe," "potential,"
"continue," "is/are likely to" or other similar expressions. All
information provided in this press release is as of the date of
this press release and we undertake no duty to update any
forward-looking statement to conform the statement to actual
results or changes in the Company's expectations.
About Kelly®
Kelly Services, Inc. (Nasdaq: KELYA, KELYB) helps companies
recruit and manage skilled workers and helps job seekers find great
work. Since inventing the staffing industry in 1946, we have become
experts in the many industries and local and global markets we
serve. With a network of suppliers and partners around the world,
we connect more than 450,000 people with work every year. Our suite
of outsourcing and consulting services ensures companies have the
people they need, when and where they are needed most.
Headquartered in Troy, Michigan,
we empower businesses and individuals to access limitless
opportunities in industries such as science, engineering,
technology, education, manufacturing, retail, finance, and energy.
Revenue in 2022 was $5.0 billion.
Learn more at kellyservices.com.
KLYA-FIN
|
MEDIA
CONTACT:
|
|
|
ANALYST
CONTACT:
|
|
Jane
Stehney
|
|
|
Scott
Thomas
|
|
(248)
765-6864
|
|
|
(248)
251-7264
|
|
stehnja@kellyservices.com
|
|
|
scott.thomas@kellyservices.com
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF EARNINGS
|
|
FOR THE 13 WEEKS
ENDED OCTOBER 1, 2023 AND OCTOBER 2, 2022
|
|
(UNAUDITED)
|
|
(In millions of dollars
except per share data)
|
|
|
|
|
|
|
|
|
%
|
|
CC %
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
1,118.0
|
$
|
1,167.9
|
$
|
(49.9)
|
|
(4.3)
|
%
|
(5.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
889.5
|
|
927.3
|
|
(37.8)
|
|
(4.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
228.5
|
|
240.6
|
|
(12.1)
|
|
(5.1)
|
|
(6.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
228.4
|
|
231.1
|
|
(2.7)
|
|
(1.2)
|
|
(2.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill impairment
charge
|
|
—
|
|
30.7
|
|
(30.7)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on
disposal
|
|
—
|
|
0.2
|
|
(0.2)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
operations
|
|
0.1
|
|
(21.4)
|
|
21.5
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net
|
|
1.6
|
|
0.2
|
|
1.4
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before taxes
|
|
1.7
|
|
(21.2)
|
|
22.9
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
(4.9)
|
|
(5.0)
|
|
0.1
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
$
|
6.6
|
$
|
(16.2)
|
$
|
22.8
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share
|
$
|
0.18
|
$
|
(0.43)
|
$
|
0.61
|
|
NM
|
|
|
|
|
Diluted earnings
(loss) per share
|
$
|
0.18
|
$
|
(0.43)
|
$
|
0.61
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement
revenue (included in revenue from services)
|
$
|
14.6
|
$
|
19.8
|
$
|
(5.2)
|
|
(26.3)
|
%
|
(28.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
20.4
|
%
|
20.6
|
%
|
(0.2)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion
rate
|
|
0.0
|
%
|
(8.9)
|
%
|
8.9
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
25.5
|
$
|
19.1
|
$
|
6.4
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
2.3
|
%
|
1.6
|
%
|
0.7
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate
|
|
(299.3)
|
%
|
23.4
|
%
|
(322.7)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
35.4
|
|
37.9
|
|
|
|
|
|
|
|
|
Diluted
|
|
35.8
|
|
37.9
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF EARNINGS
|
|
FOR THE 39 WEEKS
ENDED OCTOBER 1, 2023 AND OCTOBER 2, 2022
|
|
(UNAUDITED)
|
|
(In millions of dollars
except per share data)
|
|
|
|
|
|
|
|
|
%
|
|
CC %
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
3,603.5
|
$
|
3,731.6
|
$
|
(128.1)
|
|
(3.4)
|
%
|
(3.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
2,880.3
|
|
2,970.0
|
|
(89.7)
|
|
(3.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
723.2
|
|
761.6
|
|
(38.4)
|
|
(5.0)
|
|
(5.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
703.8
|
|
707.3
|
|
(3.5)
|
|
(0.5)
|
|
(0.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairment
charge
|
|
2.4
|
|
—
|
|
2.4
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill impairment
charge
|
|
—
|
|
30.7
|
|
(30.7)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on
disposal
|
|
—
|
|
18.7
|
|
(18.7)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of
assets
|
|
—
|
|
(5.3)
|
|
5.3
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from
operations
|
|
17.0
|
|
10.2
|
|
6.8
|
|
67.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on investment in
Persol Holdings
|
|
—
|
|
(67.2)
|
|
67.2
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on currency
translation from liquidation of subsidiary(1)
|
|
—
|
|
(20.4)
|
|
20.4
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net
|
|
3.0
|
|
1.9
|
|
1.1
|
|
55.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before taxes and equity in net earnings of affiliate
|
|
20.0
|
|
(75.5)
|
|
95.5
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
(5.0)
|
|
(13.1)
|
|
8.1
|
|
61.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
before equity in net earnings of affiliate
|
|
25.0
|
|
(62.4)
|
|
87.4
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings
of affiliate
|
|
—
|
|
0.8
|
|
(0.8)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
$
|
25.0
|
$
|
(61.6)
|
$
|
86.6
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share
|
$
|
0.68
|
$
|
(1.62)
|
$
|
2.30
|
|
NM
|
|
|
|
|
Diluted earnings
(loss) per share
|
$
|
0.67
|
$
|
(1.62)
|
$
|
2.29
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement
revenue (included in revenue from services)
|
$
|
47.8
|
$
|
71.2
|
$
|
(23.4)
|
|
(32.9)
|
%
|
(33.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
20.1
|
%
|
20.4
|
%
|
(0.3)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion
rate
|
|
2.4
|
%
|
1.3
|
%
|
1.1
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
76.9
|
$
|
81.5
|
$
|
(4.6)
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
2.1
|
%
|
2.2
|
%
|
(0.1)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate
|
|
(25.1)
|
%
|
17.4
|
%
|
(42.5)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
36.2
|
|
38.2
|
|
|
|
|
|
|
|
|
Diluted
|
|
36.5
|
|
38.2
|
|
|
|
|
|
|
|
|
|
(1) Subsequent to the
sale of the Persol Holdings investment, the Company commenced the
dissolution process of the Kelly Services Japan subsidiary, which
was considered substantially liquidated as of the first quarter-end
2022, resulting in the recognition of the $20.4 million loss on
currency translation from liquidation of this subsidiary in the
first quarter of 2022.
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
|
RESULTS OF
OPERATIONS BY SEGMENT
|
|
(UNAUDITED)
|
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
CC %
|
|
|
|
2023
|
|
|
2022
|
|
Change
|
|
Change
|
|
|
Professional &
Industrial
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
364.5
|
|
$
|
408.6
|
|
(10.8)
|
%
|
(10.5)
|
%
|
|
Gross
profit
|
|
65.5
|
|
|
70.3
|
|
(6.9)
|
|
(6.5)
|
|
|
SG&A expenses
excluding restructuring charges
|
|
53.7
|
|
|
65.3
|
|
(17.7)
|
|
(17.6)
|
|
|
Restructuring
charges
|
|
4.0
|
|
|
—
|
|
NM
|
|
NM
|
|
|
Total SG&A
expenses
|
|
57.7
|
|
|
65.3
|
|
(11.6)
|
|
(11.4)
|
|
|
Earnings from
operations
|
|
7.8
|
|
|
5.0
|
|
54.2
|
|
|
|
|
Earnings from
operations excluding restructuring charges
|
|
11.8
|
|
|
5.0
|
|
133.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
17.9
|
%
|
|
17.2
|
%
|
0.7
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Science, Engineering
& Technology
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
295.7
|
|
$
|
321.3
|
|
(8.0)
|
%
|
(8.0)
|
%
|
|
Gross
profit
|
|
68.0
|
|
|
76.3
|
|
(10.8)
|
|
(10.9)
|
|
|
Total SG&A
expenses
|
|
47.8
|
|
|
53.4
|
|
(10.4)
|
|
(10.5)
|
|
|
Earnings from
operations
|
|
20.2
|
|
|
22.9
|
|
(11.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
23.0
|
%
|
|
23.7
|
%
|
(0.7)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
128.1
|
|
$
|
104.3
|
|
22.9
|
%
|
22.9
|
%
|
|
Gross
profit
|
|
19.8
|
|
|
16.6
|
|
19.2
|
|
19.2
|
|
|
Total SG&A
expenses
|
|
22.4
|
|
|
21.4
|
|
5.0
|
|
5.0
|
|
|
Earnings (loss) from
operations
|
|
(2.6)
|
|
|
(4.8)
|
|
44.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
15.5
|
%
|
|
15.9
|
%
|
(0.4)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outsourcing &
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
114.1
|
|
$
|
118.5
|
|
(3.8)
|
%
|
(4.0)
|
%
|
|
Gross
profit
|
|
41.5
|
|
|
44.1
|
|
(6.0)
|
|
(6.7)
|
|
|
SG&A expenses
excluding restructuring charges
|
|
37.2
|
|
|
37.7
|
|
(1.5)
|
|
(2.4)
|
|
|
Restructuring
charges
|
|
1.8
|
|
|
—
|
|
NM
|
|
NM
|
|
|
Total SG&A
expenses
|
|
39.0
|
|
|
37.7
|
|
3.3
|
|
2.2
|
|
|
Goodwill impairment
charge
|
|
—
|
|
|
30.7
|
|
NM
|
|
|
|
|
Earnings (loss) from
operations
|
|
2.5
|
|
|
(24.3)
|
|
NM
|
|
|
|
|
Earnings (loss) from
operations excluding restructuring charges
|
|
4.3
|
|
|
(24.3)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
36.4
|
%
|
|
37.2
|
%
|
(0.8)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
220.6
|
|
$
|
215.5
|
|
2.4
|
%
|
(6.2)
|
%
|
|
Gross
profit
|
|
33.7
|
|
|
33.3
|
|
1.0
|
|
(7.6)
|
|
|
Total SG&A
expenses
|
|
31.2
|
|
|
31.4
|
|
(0.7)
|
|
(8.7)
|
|
|
Earnings from
operations
|
|
2.5
|
|
|
1.9
|
|
27.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
15.3
|
%
|
|
15.5
|
%
|
(0.2)
|
pts.
|
|
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
|
RESULTS OF
OPERATIONS BY SEGMENT
|
|
(UNAUDITED)
|
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September Year to
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
CC %
|
|
|
|
2023
|
|
|
2022
|
|
Change
|
|
Change
|
|
|
Professional &
Industrial
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
1,131.3
|
|
$
|
1,268.7
|
|
(10.8)
|
%
|
(10.4)
|
%
|
|
Gross
profit
|
|
200.4
|
|
|
231.2
|
|
(13.3)
|
|
(12.8)
|
|
|
SG&A expenses
excluding restructuring charges
|
|
176.5
|
|
|
203.8
|
|
(13.4)
|
|
(13.1)
|
|
|
Restructuring
charges
|
|
7.3
|
|
|
0.3
|
|
NM
|
|
NM
|
|
|
Total SG&A
expenses
|
|
183.8
|
|
|
204.1
|
|
(9.9)
|
|
(9.6)
|
|
|
Asset impairment
charge
|
|
0.3
|
|
|
—
|
|
NM
|
|
|
|
|
Earnings from
operations
|
|
16.3
|
|
|
27.1
|
|
(40.4)
|
|
|
|
|
Earnings from
operations excluding restructuring charges
|
|
23.6
|
|
|
27.4
|
|
(14.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
17.7
|
%
|
|
18.2
|
%
|
(0.5)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Science, Engineering
& Technology
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
903.5
|
|
$
|
962.7
|
|
(6.2)
|
%
|
(6.1)
|
%
|
|
Gross
profit
|
|
207.4
|
|
|
225.3
|
|
(7.9)
|
|
(7.9)
|
|
|
Total SG&A
expenses
|
|
150.6
|
|
|
161.4
|
|
(6.7)
|
|
(6.7)
|
|
|
Asset impairment
charge
|
|
0.1
|
|
|
—
|
|
NM
|
|
|
|
|
Earnings from
operations
|
|
56.7
|
|
|
63.9
|
|
(11.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
23.0
|
%
|
|
23.4
|
%
|
(0.4)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
583.9
|
|
$
|
433.2
|
|
34.8
|
%
|
34.8
|
%
|
|
Gross
profit
|
|
91.6
|
|
|
69.2
|
|
32.4
|
|
32.4
|
|
|
Total SG&A
expenses
|
|
69.3
|
|
|
60.4
|
|
14.8
|
|
14.8
|
|
|
Earnings from
operations
|
|
22.3
|
|
|
8.8
|
|
152.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
15.7
|
%
|
|
16.0
|
%
|
(0.3)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outsourcing &
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
342.4
|
|
$
|
352.0
|
|
(2.7)
|
%
|
(2.3)
|
%
|
|
Gross
profit
|
|
124.4
|
|
|
127.6
|
|
(2.5)
|
|
(2.0)
|
|
|
SG&A expenses
excluding restructuring charges
|
|
114.9
|
|
|
111.7
|
|
2.8
|
|
2.7
|
|
|
Restructuring
charges
|
|
2.3
|
|
|
0.1
|
|
NM
|
|
NM
|
|
|
Total SG&A
expenses
|
|
117.2
|
|
|
111.8
|
|
4.7
|
|
4.6
|
|
|
Asset impairment
charge
|
|
2.0
|
|
|
—
|
|
NM
|
|
|
|
|
Goodwill impairment
charge
|
|
—
|
|
|
30.7
|
|
NM
|
|
|
|
|
Earnings from
operations
|
|
5.2
|
|
|
(14.9)
|
|
NM
|
|
|
|
|
Earnings from
operations excluding restructuring charges
|
|
7.5
|
|
|
(14.8)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
36.3
|
%
|
|
36.3
|
%
|
—
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
657.5
|
|
$
|
715.9
|
|
(8.2)
|
%
|
(11.2)
|
%
|
|
Gross
profit
|
|
99.4
|
|
|
108.3
|
|
(8.2)
|
|
(11.1)
|
|
|
Total SG&A
expenses
|
|
96.2
|
|
|
99.2
|
|
(3.0)
|
|
(5.8)
|
|
|
Earnings from
operations
|
|
3.2
|
|
|
9.1
|
|
(64.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
15.1
|
%
|
|
15.1
|
%
|
—
|
pts.
|
|
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
(UNAUDITED)
|
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
October 1,
2023
|
|
January 1,
2023
|
|
October 2,
2022
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
|
Cash and
equivalents
|
$
|
117.2
|
$
|
153.7
|
$
|
122.4
|
|
|
Trade accounts
receivable, less allowances of
|
|
|
|
|
|
|
|
|
$11.1, $11.2, and $12.1, respectively
|
|
1,388.2
|
|
1,491.6
|
|
1,519.9
|
|
|
Prepaid expenses
and other current assets
|
|
86.1
|
|
69.9
|
|
83.1
|
|
|
Assets held for
sale
|
|
—
|
|
—
|
|
4.7
|
|
|
Total current
assets
|
|
1,591.5
|
|
1,715.2
|
|
1,730.1
|
|
|
|
|
|
|
|
|
|
|
Noncurrent
Assets
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
28.8
|
|
27.8
|
|
24.9
|
|
|
Operating lease
right-of-use assets
|
|
59.9
|
|
66.8
|
|
67.3
|
|
|
Deferred
taxes
|
|
315.3
|
|
299.7
|
|
300.7
|
|
|
Goodwill,
net
|
|
151.1
|
|
151.1
|
|
161.4
|
|
|
Other
assets
|
|
403.4
|
|
403.2
|
|
397.5
|
|
|
Total noncurrent
assets
|
|
958.5
|
|
948.6
|
|
951.8
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
$
|
2,550.0
|
$
|
2,663.8
|
$
|
2,681.9
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
$
|
—
|
$
|
0.7
|
$
|
0.1
|
|
|
Accounts payable
and accrued liabilities
|
|
647.5
|
|
723.3
|
|
735.2
|
|
|
Operating lease
liabilities
|
|
13.2
|
|
14.7
|
|
14.4
|
|
|
Accrued payroll
and related taxes
|
|
287.8
|
|
315.8
|
|
321.4
|
|
|
Accrued workers'
compensation and other claims
|
|
22.8
|
|
22.9
|
|
24.4
|
|
|
Income and other
taxes
|
|
54.0
|
|
51.4
|
|
47.5
|
|
|
Total current
liabilities
|
|
1,025.3
|
|
1,128.8
|
|
1,143.0
|
|
|
|
|
|
|
|
|
|
|
Noncurrent
Liabilities
|
|
|
|
|
|
|
|
|
Operating lease
liabilities
|
|
51.5
|
|
55.0
|
|
55.6
|
|
|
Accrued workers'
compensation and other claims
|
|
40.5
|
|
40.7
|
|
43.4
|
|
|
Accrued
retirement benefits
|
|
185.6
|
|
174.1
|
|
172.7
|
|
|
Other long-term
liabilities
|
|
11.4
|
|
11.0
|
|
14.5
|
|
|
Total noncurrent
liabilities
|
|
289.0
|
|
280.8
|
|
286.2
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
Common
stock
|
|
38.5
|
|
38.5
|
|
38.5
|
|
|
Treasury
stock
|
|
(57.4)
|
|
(20.1)
|
|
(12.4)
|
|
|
Paid-in
capital
|
|
29.3
|
|
28.0
|
|
26.6
|
|
|
Earnings
invested in the business
|
|
1,233.0
|
|
1,216.3
|
|
1,220.1
|
|
|
Accumulated
other comprehensive income (loss)
|
|
(7.7)
|
|
(8.5)
|
|
(20.1)
|
|
|
Total stockholders'
equity
|
|
1,235.7
|
|
1,254.2
|
|
1,252.7
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
$
|
2,550.0
|
$
|
2,663.8
|
$
|
2,681.9
|
|
|
|
|
|
|
|
|
|
|
STATISTICS:
|
|
|
|
|
|
|
|
|
Working
Capital
|
$
|
566.2
|
$
|
586.4
|
$
|
587.1
|
|
|
Current
Ratio
|
|
1.6
|
|
1.5
|
|
1.5
|
|
|
Debt-to-capital
%
|
|
0.0
|
%
|
0.1
|
%
|
0.0
|
%
|
|
Global Days Sales
Outstanding
|
|
63
|
|
61
|
|
64
|
|
|
Year-to-Date Free
Cash Flow
|
$
|
21.0
|
$
|
(88.3)
|
$
|
(117.3)
|
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
FOR THE 39 WEEKS
ENDED OCTOBER 1, 2023 AND OCTOBER 2, 2022
|
|
(UNAUDITED)
|
|
(In millions of
dollars)
|
|
|
2023
|
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net earnings
(loss)
|
$
|
25.0
|
$
|
(61.6)
|
|
Adjustments to
reconcile net earnings (loss) to net cash from operating
activities:
|
|
|
|
|
|
Asset impairment
charge
|
|
2.4
|
|
—
|
|
Goodwill impairment
charge
|
|
—
|
|
30.7
|
|
Deferred income taxes
on goodwill impairment charge
|
|
—
|
|
(5.3)
|
|
Loss on
disposal
|
|
—
|
|
18.7
|
|
Depreciation and
amortization
|
|
25.6
|
|
24.7
|
|
Operating lease asset
amortization
|
|
12.4
|
|
14.2
|
|
Provision for credit
losses and sales allowances
|
|
1.4
|
|
1.7
|
|
Stock-based
compensation
|
|
7.9
|
|
5.9
|
|
Gain on sale of equity
securities
|
|
(2.0)
|
|
—
|
|
Loss on investment in
Persol Holdings
|
|
—
|
|
67.2
|
|
Loss on currency
translation from liquidation of subsidiary
|
|
—
|
|
20.4
|
|
Gain on foreign
currency remeasurement
|
|
—
|
|
(5.5)
|
|
Gain on sale of
assets
|
|
—
|
|
(5.3)
|
|
Equity in net earnings
of PersolKelly Asia Pacific
|
|
—
|
|
(0.8)
|
|
Other, net
|
|
0.5
|
|
3.5
|
|
Changes in operating
assets and liabilities, net of acquisition
|
|
(39.8)
|
|
(220.2)
|
|
Net cash from (used
in) operating activities
|
|
33.4
|
|
(111.7)
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Capital
expenditures
|
|
(12.4)
|
|
(5.6)
|
|
Proceeds from sale of
assets
|
|
—
|
|
4.5
|
|
Acquisition of company,
net of cash received
|
|
—
|
|
(143.1)
|
|
Cash disposed from sale
of Russia, net of proceeds
|
|
—
|
|
(6.0)
|
|
Proceeds from
company-owned life insurance
|
|
—
|
|
1.5
|
|
Proceeds from sale of
Persol Holdings investment
|
|
—
|
|
196.9
|
|
Proceeds from sale of
equity method investment
|
|
—
|
|
119.5
|
|
Proceeds from equity
securities
|
|
2.0
|
|
—
|
|
Other investing
activities
|
|
(0.4)
|
|
—
|
|
Net cash (used in)
from investing activities
|
|
(10.8)
|
|
167.7
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Net change in
short-term borrowings
|
|
(0.7)
|
|
0.2
|
|
Financing lease
payments
|
|
(1.0)
|
|
(1.2)
|
|
Dividend
payments
|
|
(8.3)
|
|
(7.7)
|
|
Payments of tax
withholding for stock awards
|
|
(1.7)
|
|
(0.9)
|
|
Buyback of common
shares
|
|
(42.2)
|
|
(27.2)
|
|
Contingent
consideration payments
|
|
(2.5)
|
|
(0.7)
|
|
Other financing
activities
|
|
(0.2)
|
|
0.1
|
|
Net cash used in
financing activities
|
|
(56.6)
|
|
(37.4)
|
|
|
|
|
|
|
Effect of exchange
rates on cash, cash equivalents and restricted cash
|
|
(1.9)
|
|
(7.4)
|
|
|
|
|
|
|
Net change in cash,
cash equivalents and restricted cash
|
|
(35.9)
|
|
11.2
|
|
Cash, cash
equivalents and restricted cash at beginning of
period
|
|
162.4
|
|
119.5
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
126.5
|
$
|
130.7
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
|
REVENUE FROM
SERVICES BY GEOGRAPHY
|
|
(UNAUDITED)
|
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
CC %
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
United
States
|
$
|
795.5
|
$
|
861.0
|
|
(7.6)
|
%
|
(7.6)
|
%
|
|
Canada
|
|
50.9
|
|
43.3
|
|
17.5
|
|
20.7
|
|
|
Puerto Rico
|
|
26.5
|
|
28.3
|
|
(6.2)
|
|
(6.2)
|
|
|
Mexico
|
|
18.4
|
|
10.9
|
|
68.4
|
|
41.9
|
|
|
Total Americas
Region
|
|
891.3
|
|
943.5
|
|
(5.5)
|
|
(5.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
|
|
|
|
Switzerland
|
|
57.0
|
|
55.2
|
|
3.3
|
|
(5.6)
|
|
|
Portugal
|
|
48.6
|
|
41.9
|
|
15.9
|
|
7.2
|
|
|
France
|
|
47.0
|
|
45.8
|
|
2.8
|
|
(5.0)
|
|
|
Italy
|
|
16.1
|
|
16.4
|
|
(2.3)
|
|
(9.6)
|
|
|
Russia
|
|
—
|
|
5.0
|
|
(100.0)
|
|
(100.0)
|
|
|
Other
|
|
47.1
|
|
49.8
|
|
(5.5)
|
|
(12.3)
|
|
|
Total Europe
Region
|
|
215.8
|
|
214.1
|
|
0.8
|
|
(7.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Asia-Pacific
Region
|
|
10.9
|
|
10.3
|
|
5.8
|
|
9.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Kelly
Services, Inc.
|
$
|
1,118.0
|
$
|
1,167.9
|
|
(4.3)
|
%
|
(5.8)
|
%
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
|
REVENUE FROM
SERVICES BY GEOGRAPHY
|
|
(UNAUDITED)
|
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
September Year to
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
CC %
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
United
States
|
$
|
2,647.1
|
$
|
2,746.5
|
|
(3.6)
|
%
|
(3.6)
|
%
|
|
Canada
|
|
142.2
|
|
122.7
|
|
15.9
|
|
21.4
|
|
|
Puerto Rico
|
|
81.1
|
|
84.8
|
|
(4.3)
|
|
(4.3)
|
|
|
Mexico
|
|
55.1
|
|
32.4
|
|
70.0
|
|
49.1
|
|
|
Total Americas
Region
|
|
2,925.5
|
|
2,986.4
|
|
(2.0)
|
|
(2.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
|
|
|
|
Switzerland
|
|
165.9
|
|
165.5
|
|
0.3
|
|
(5.0)
|
|
|
France
|
|
145.0
|
|
150.8
|
|
(3.8)
|
|
(5.5)
|
|
|
Portugal
|
|
142.3
|
|
125.8
|
|
13.2
|
|
10.9
|
|
|
Italy
|
|
49.5
|
|
54.3
|
|
(8.8)
|
|
(10.4)
|
|
|
Russia
|
|
—
|
|
63.4
|
|
(100.0)
|
|
(100.0)
|
|
|
Other
|
|
142.4
|
|
152.8
|
|
(6.8)
|
|
(7.2)
|
|
|
Total Europe
Region
|
|
645.1
|
|
712.6
|
|
(9.5)
|
|
(11.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Asia-Pacific
Region
|
|
32.9
|
|
32.6
|
|
1.0
|
|
5.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Kelly
Services, Inc.
|
$
|
3,603.5
|
$
|
3,731.6
|
|
(3.4)
|
%
|
(3.8)
|
%
|
|
KELLY
SERVICES, INC. AND SUBSIDIARIES
|
|
RECONCILIATION
OF NON-GAAP MEASURES
|
|
THIRD
QUARTER
|
|
(UNAUDITED)
|
|
(In millions of
dollars)
|
|
|
|
|
|
2023
|
|
2022
|
|
SG&A
Expenses:
|
As
Reported
|
|
Restructuring(7)
|
|
Adjusted
|
|
As
Reported
|
|
Professional &
Industrial
|
$
57.7
|
|
$
(4.0)
|
|
$
53.7
|
|
$
65.3
|
|
Science, Engineering
& Technology
|
47.8
|
|
(0.7)
|
|
47.1
|
|
53.4
|
|
Education
|
22.4
|
|
(0.6)
|
|
21.8
|
|
21.4
|
|
Outsourcing &
Consulting
|
39.0
|
|
(1.8)
|
|
37.2
|
|
37.7
|
|
International
|
31.2
|
|
—
|
|
31.2
|
|
31.4
|
|
Corporate
|
30.3
|
|
(8.3)
|
|
22.0
|
|
21.9
|
|
Total
Company
|
$
228.4
|
|
$
(15.4)
|
|
$
213.0
|
|
$
231.1
|
|
|
2023
|
|
2022
|
|
Earnings from
Operations:
|
As
Reported
|
|
Restructuring(7)
|
|
Adjusted
|
|
Adjusted
|
|
Professional &
Industrial
|
$
7.8
|
|
$
4.0
|
|
$
11.8
|
|
$
5.0
|
|
Science, Engineering
& Technology
|
20.2
|
|
0.7
|
|
20.9
|
|
22.9
|
|
Education
|
(2.6)
|
|
0.6
|
|
(2.0)
|
|
(4.8)
|
|
Outsourcing &
Consulting
|
2.5
|
|
1.8
|
|
4.3
|
|
6.4
|
|
International
|
2.5
|
|
—
|
|
2.5
|
|
1.9
|
|
Corporate
|
(30.3)
|
|
8.3
|
|
(22.0)
|
|
(21.9)
|
|
Total
Company
|
$
0.1
|
|
$
15.4
|
|
$
15.5
|
|
$
9.5
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
RECONCILIATION OF
NON-GAAP MEASURES
THIRD
QUARTER
(UNAUDITED)
(In millions of
dollars)
|
|
|
2022
|
|
Earnings from
Operations:
|
As
Reported
|
|
Loss on
disposal(4)
|
|
Goodwill
impairment
charge(6)
|
|
Adjusted
|
|
Professional &
Industrial
|
$
5.0
|
|
$
—
|
|
$
—
|
|
$
5.0
|
|
Science, Engineering
& Technology
|
22.9
|
|
—
|
|
—
|
|
22.9
|
|
Education
|
(4.8)
|
|
—
|
|
—
|
|
(4.8)
|
|
Outsourcing &
Consulting
|
(24.3)
|
|
—
|
|
30.7
|
|
6.4
|
|
International
|
1.9
|
|
—
|
|
—
|
|
1.9
|
|
Corporate
|
(21.9)
|
|
—
|
|
—
|
|
(21.9)
|
|
Loss on
disposal
|
(0.2)
|
|
0.2
|
|
—
|
|
—
|
|
Total
Company
|
$
(21.4)
|
|
$
0.2
|
|
$
30.7
|
|
$
9.5
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
|
RECONCILIATION OF
NON-GAAP MEASURES
|
|
SEPTEMBER YEAR TO
DATE
|
|
(UNAUDITED)
|
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
SG&A
Expenses:
|
As
Reported
|
|
Restructuring(7)
|
|
Adjusted
|
|
As
Reported
|
|
Professional &
Industrial
|
$
183.8
|
|
$
(7.3)
|
|
$
176.5
|
|
$
204.1
|
|
Science, Engineering
& Technology
|
150.6
|
|
(1.2)
|
|
149.4
|
|
161.4
|
|
Education
|
69.3
|
|
(1.0)
|
|
68.3
|
|
60.4
|
|
Outsourcing &
Consulting
|
117.2
|
|
(2.3)
|
|
114.9
|
|
111.8
|
|
International
|
96.2
|
|
(0.6)
|
|
95.6
|
|
99.2
|
|
Corporate
|
86.7
|
|
(15.2)
|
|
71.5
|
|
70.4
|
|
Total
Company
|
$
703.8
|
|
$
(27.6)
|
|
$
676.2
|
|
$
707.3
|
|
|
2023
|
|
2022
|
|
Earnings from
Operations:
|
As
Reported
|
|
Asset
impairment(5)
|
|
Restructuring(7)
|
|
Adjusted
|
|
Adjusted
|
|
Professional &
Industrial
|
$
16.3
|
|
$
0.3
|
|
$
7.3
|
|
$
23.9
|
|
$
27.1
|
|
Science, Engineering
& Technology
|
56.7
|
|
0.1
|
|
1.2
|
|
58.0
|
|
63.9
|
|
Education
|
22.3
|
|
—
|
|
1.0
|
|
23.3
|
|
8.8
|
|
Outsourcing &
Consulting
|
5.2
|
|
2.0
|
|
2.3
|
|
9.5
|
|
15.8
|
|
International
|
3.2
|
|
—
|
|
0.6
|
|
3.8
|
|
9.1
|
|
Corporate
|
(86.7)
|
|
—
|
|
15.2
|
|
(71.5)
|
|
(70.4)
|
|
Total
Company
|
$
17.0
|
|
$
2.4
|
|
$
27.6
|
|
$
47.0
|
|
$
54.3
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
RECONCILIATION OF
NON-GAAP MEASURES
SEPTEMBER YEAR TO
DATE
(UNAUDITED)
(In millions of
dollars)
|
|
|
2022
|
|
Earnings from
Operations:
|
As
Reported
|
|
Gain on sale
of assets(3)
|
|
Loss on
disposal(4)
|
|
Goodwill
impairment
charge(6)
|
|
Adjusted
|
|
Professional &
Industrial
|
$
27.1
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
27.1
|
|
Science, Engineering
& Technology
|
63.9
|
|
—
|
|
—
|
|
—
|
|
63.9
|
|
Education
|
8.8
|
|
—
|
|
—
|
|
—
|
|
8.8
|
|
Outsourcing &
Consulting
|
(14.9)
|
|
—
|
|
—
|
|
30.7
|
|
15.8
|
|
International
|
9.1
|
|
—
|
|
—
|
|
—
|
|
9.1
|
|
Corporate
|
(70.4)
|
|
—
|
|
—
|
|
—
|
|
(70.4)
|
|
Loss on
disposal
|
(18.7)
|
|
|
|
18.7
|
|
—
|
|
—
|
|
Gain on sale of
assets
|
5.3
|
|
(5.3)
|
|
—
|
|
—
|
|
—
|
|
Total
Company
|
$
10.2
|
|
$
(5.3)
|
|
$
18.7
|
|
$
30.7
|
|
$
54.3
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
|
RECONCILIATION OF
NON-GAAP MEASURES
|
|
(UNAUDITED)
|
|
(In millions of dollars
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
September Year to
Date
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Income tax expense
(benefit)
|
|
$
(4.9)
|
|
$
(5.0)
|
|
$
(5.0)
|
|
$
(13.1)
|
|
Taxes on investment in
Persol Holdings(1)
|
|
—
|
|
—
|
|
—
|
|
18.4
|
|
Taxes on foreign
currency matters(2)
|
|
—
|
|
—
|
|
—
|
|
(1.5)
|
|
Taxes on gain on sale
of assets(3)
|
|
—
|
|
—
|
|
—
|
|
(1.3)
|
|
Taxes on loss on
disposal(4)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Taxes on asset
impairment charge(5)
|
|
—
|
|
—
|
|
0.6
|
|
—
|
|
Taxes on goodwill
impairment charge(6)
|
|
—
|
|
5.3
|
|
—
|
|
5.3
|
|
Taxes on restructuring
charges(7)
|
|
3.9
|
|
—
|
|
6.9
|
|
—
|
|
Adjusted income tax
expense
|
|
$
(1.0)
|
|
$
0.3
|
|
$
2.5
|
|
$
7.8
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
September Year to
Date
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net earnings
(loss)
|
|
$
6.6
|
|
$
(16.2)
|
|
$
25.0
|
|
$
(61.6)
|
|
Loss on investment in
Persol Holdings, net of taxes(1)
|
|
—
|
|
—
|
|
—
|
|
48.8
|
|
Loss on foreign
currency matters, net of taxes(2)
|
|
—
|
|
—
|
|
—
|
|
16.4
|
|
Gain on sale of assets,
net of taxes(3)
|
|
—
|
|
—
|
|
—
|
|
(4.0)
|
|
Loss on disposal, net
of taxes(4)
|
|
—
|
|
0.2
|
|
—
|
|
18.7
|
|
Asset impairment
charge, net of taxes(5)
|
|
—
|
|
—
|
|
1.8
|
|
—
|
|
Goodwill impairment
charge, net of taxes(6)
|
|
—
|
|
25.4
|
|
—
|
|
25.4
|
|
Restructuring charges,
net of taxes(7)
|
|
11.5
|
|
—
|
|
20.7
|
|
—
|
|
Adjusted net
earnings
|
|
$
18.1
|
|
$
9.4
|
|
$
47.5
|
|
$
43.7
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
September Year to
Date
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
Per
Share
|
|
Per
Share
|
|
Net earnings
(loss)
|
|
$
0.18
|
|
$
(0.43)
|
|
$
0.67
|
|
$
(1.62)
|
|
Loss on investment in
Persol Holdings, net of taxes(1)
|
|
—
|
|
—
|
|
—
|
|
1.28
|
|
Loss on foreign
currency matters, net of taxes(2)
|
|
—
|
|
—
|
|
—
|
|
0.43
|
|
Gain on sale of assets,
net of taxes(3)
|
|
—
|
|
—
|
|
—
|
|
(0.10)
|
|
Loss on disposal, net
of taxes(4)
|
|
—
|
|
0.01
|
|
—
|
|
0.49
|
|
Asset impairment
charge, net of taxes(5)
|
|
—
|
|
—
|
|
0.05
|
|
—
|
|
Goodwill impairment
charge, net of taxes(6)
|
|
—
|
|
0.67
|
|
—
|
|
0.67
|
|
Restructuring charges,
net of taxes(7)
|
|
0.32
|
|
—
|
|
0.56
|
|
—
|
|
Adjusted net
earnings
|
|
$
0.50
|
|
$
0.25
|
|
$
1.28
|
|
$
1.15
|
|
|
Note: Earnings per
share amounts for each quarter are required to be computed
independently and may not equal the amounts computed for the total
year.
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
|
RECONCILIATION OF
NON-GAAP MEASURES
|
|
(UNAUDITED)
|
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
September Year to
Date
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net earnings
(loss)
|
$
6.6
|
|
$
(16.2)
|
|
$
25.0
|
|
$
(61.6)
|
|
Other (income) expense,
net(2)
|
(1.6)
|
|
(0.2)
|
|
(3.0)
|
|
(1.9)
|
|
Income tax expense
(benefit)
|
(4.9)
|
|
(5.0)
|
|
(5.0)
|
|
(13.1)
|
|
Depreciation and
amortization
|
8.4
|
|
8.6
|
|
25.6
|
|
24.7
|
|
EBITDA
|
8.5
|
|
(12.8)
|
|
42.6
|
|
(51.9)
|
|
Equity in net earnings
of affiliate
|
—
|
|
—
|
|
—
|
|
(0.8)
|
|
Loss on investment in
Persol Holdings(1)
|
—
|
|
—
|
|
—
|
|
67.2
|
|
Loss on foreign
currency matters(2)
|
—
|
|
—
|
|
—
|
|
20.4
|
|
Gain on sale of
assets(3)
|
—
|
|
—
|
|
—
|
|
(5.3)
|
|
Loss on
disposal(4)
|
—
|
|
0.2
|
|
—
|
|
18.7
|
|
Asset impairment
charge(5)
|
—
|
|
—
|
|
2.4
|
|
—
|
|
Goodwill impairment
charge(6)
|
—
|
|
30.7
|
|
—
|
|
30.7
|
|
Restructuring(7)
|
15.4
|
|
—
|
|
27.6
|
|
—
|
|
Other,
net(8)
|
1.6
|
|
1.0
|
|
4.3
|
|
2.5
|
|
Adjusted
EBITDA
|
$
25.5
|
|
$
19.1
|
|
$
76.9
|
|
$
81.5
|
|
Adjusted EBITDA
margin
|
2.3 %
|
|
1.6 %
|
|
2.1 %
|
|
2.2 %
|
KELLY SERVICES, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
(UNAUDITED)
Management believes that the non-GAAP (Generally Accepted
Accounting Principles) information excluding the 2023 restructuring
charges, the 2023 impairment charge, the 2022 sale of the Persol
Holdings investment, the 2022 losses on the fair value changes of
the investment in Persol Holdings, the 2022 losses on foreign
currency matters, the 2022 gain on sale of assets, the 2022 loss on
disposal, and the 2022 goodwill impairment charge, are useful to
understand the Company's fiscal 2023 financial performance and
increases comparability. Specifically, Management believes
that removing the impact of these items allows for a meaningful
comparison of current period operating performance with the
operating results of prior periods. Management also believes
that such measures are used by those analyzing performance of
companies in the staffing industry to compare current performance
to prior periods and to assess future performance.
Management uses Adjusted EBITDA (adjusted earnings before
interest, taxes, depreciation and amortization) and Adjusted EBITDA
Margin (percent of total GAAP revenue) which Management believes is
useful to compare operating performance compared to prior periods
and uses it in conjunction with GAAP measures to assess
performance. Our calculation of Adjusted EBITDA may not be
consistent with similarly titled measures of other companies and
should be used in conjunction with GAAP measurements.
Management also uses year-to-date free cash flow (operating cash
flows less capital expenditures) to indicate the change in cash
balances arising from operating activities, net of working capital
needs and expenditures on fixed assets.
These non-GAAP measures may have limitations as analytical tools
because they exclude items which can have a material impact on cash
flow and earnings per share. As a result, Management
considers these measures, along with reported results, when it
reviews and evaluates the Company's financial performance.
Management believes that these measures provide greater
transparency to investors and provide insight into how Management
is evaluating the Company's financial performance. Non-GAAP
measures should not be considered a substitute for, or superior to,
measures of financial performance prepared in accordance with
GAAP.
(1) In 2022, the loss on the investment in
Persol Holdings represents the change in fair value up until the
date of the sale of the investment on February 15, 2022 as well as the loss on the sale
of the investment during the period presented and the related tax
benefit.
(2) In 2022, the loss on foreign currency
matters includes a $20.4 million loss
on currency translation resulting from the substantially complete
liquidation of the Company's Japan
entity, partially offset by a $5.5
million foreign exchange gain on the Japan entity's USD-denominated cash
balance. The foreign exchange gain is included in other
(income) expense, net in the EBITDA calculation.
(3) Gain on sale of assets in 2022 is
related to the sale of under-utilized real property in the second
quarter of 2022 and other real property sold in the first quarter
of 2022.
(4) Loss on disposal in 2022 represents
the write-off of the net assets of our Russian operations that were
sold in the third quarter of 2022.
(5) Asset impairment charge in the second
quarter of 2023 represents the impairment of right-of-use assets
related to an unoccupied existing office space lease.
(6) Goodwill impairment charge in 2022 is
the result of an interim impairment test the Company performed
related to RocketPower due to a triggering event caused by changes
in market conditions.
(7) Restructuring charges in the second
and third quarters of 2023 relate to a comprehensive transformation
initiative that includes actions that will further streamline the
Company's operating model to enhance organizational efficiency and
effectiveness. These restructuring charges include
$10.4 million of severance,
$4.5 million of costs to execute the
transformation, and $0.5 million of
lease termination expenses in the third quarter of 2023 and
$4.5 million of costs to execute the
transformation and $1.1 million of
severance in the second quarter of 2023. Restructuring
charges in the first quarter of 2023 represent severance costs and
lease and other terminations as a result of management undertaking
actions to further our cost management efforts in response to the
current demand levels and reflects a repositioning of our P&I
staffing business to better capitalize on opportunities in local
markets.
(8) Other, net primarily represents
amortization of capitalized hosted software implementation
costs.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/kelly-reports-third-quarter-2023-earnings-continued-progress-on-business-transformation-301982252.html
SOURCE Kelly Services, Inc.