- Q3 revenue down 2.3%; up 0.3% in constant currency
- Q3 operating loss of $21.4
million and loss per share of $0.43 down from a year ago on a non-cash goodwill
impairment charge
- Adjusted operating earnings of $9.5
million; up 7% from a year ago or up 21% in constant
currency
- Kelly's Board of Directors approves a $50 million share repurchase plan
TROY,
Mich., Nov. 10, 2022 /PRNewswire/ -- Kelly
(Nasdaq: KELYA, KELYB), a leading specialty talent solutions
provider, today announced results for the third quarter of
2022.
Peter Quigley, president and
chief executive officer, announced revenue for the third quarter of
2022 totaled $1.2 billion, a 2.3%
decrease, or 0.3% increase in constant currency, compared to the
corresponding quarter of 2021. Year-over-year revenue trends were
impacted by foreign currency headwinds and the impact of the sale
of our Russian operations in July
2022. Year-over-year results in the quarter also reflect the
impact of the recent acquisitions of RocketPower, a recruitment
process outsourcing firm, and Pediatric Therapeutic Services, a
specialty firm providing in-school therapy services.
Kelly reported a loss from operations in the third quarter of
2022 of $21.4 million, compared to
earnings of $9.0 million reported in
the third quarter of 2021. The loss in the third quarter of 2022
resulted from a $30.7 million
goodwill impairment charge related to RocketPower. The charge
reflects the impact of increasing economic uncertainty including
the sharp decline in hiring in the high-tech industry in which
RocketPower specializes, as well as slowing growth in the near-term
demand for recruitment process outsourcing more broadly. Excluding
the impairment charge, adjusted earnings from operations were
$9.5 million compared to $8.9 million in the third quarter of 2021.
Earnings improved primarily as a result of structural improvements
in the business mix which resulted in higher gross profit.
Loss per share in the third quarter of 2022 was $0.43 compared to earnings per share of
$0.87 in the third quarter of 2021.
Included in the loss per share in the third quarter of 2022 is a
$0.67 per share goodwill impairment
charge, net of tax, related to RocketPower, and a $0.01 loss per share, net of tax, related to the
completion of the sale of our Russian operations. Included in the
third quarter of 2021 earnings per share is a $0.62 gain, net of tax, related to non-cash
gains, net of tax, on Persol Holding common shares. On an adjusted
basis, earnings per share were $0.25
in the third quarter of 2022, consistent with $0.25 in the corresponding quarter of 2021.
"Kelly's third-quarter performance demonstrates that our more
profitable solutions are in demand and our specialty growth
strategy is delivering a higher-margin, higher-value business mix
even in the face of heightened uncertainty, rising interest rates,
and inflationary pressures," said Quigley. "We saw solid revenue
growth in our SET and Education specialties, and all five operating
segments delivered GP rate growth in the quarter. While challenges
precipitated the RocketPower goodwill impairment, we remain
confident that with diversification and integration this
acquisition will bring strategic long-term value to our
business. Finally, our planned buyback of Kelly Class A
common shares highlights our flexible and balanced capital
allocation strategy to maximize the return on capital and
complements our organic and inorganic specialty growth
strategy."
Kelly also reported that on November
9, its board of directors declared a dividend of
$0.075 per share. The dividend is
payable on December 7, 2022 to
stockholders of record as of the close of business on November 23, 2022.
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 10 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 10,
2022, at (866) 207-1041 (toll-free) and (402) 970-0847
(caller-paid). The access code is 8237932#. 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 factors include, but are not limited to, changing market and
economic conditions, the impact of the novel coronavirus (COVID-19)
outbreak, competitive market pressures including pricing and
technology introductions and disruptions, disruption in the labor
market and weakened demand for human capital resulting from
technological advances, competition law risks, the impact of
changes in laws and regulations (including federal, state and
international tax laws), unexpected changes in claim trends on
workers' compensation, unemployment, disability and medical benefit
plans, or the risk of additional tax liabilities in excess of our
estimates, our ability to achieve our business strategy, our
ability to successfully develop new service offerings, material
changes in demand from or loss of large corporate customers as well
as changes in their buying practices, risks particular to doing
business with government or government contractors, the risk of
damage to our brand, our exposure to risks associated with services
outside traditional staffing, including business process
outsourcing, services of licensed professionals and services
connecting talent to independent work, our increasing dependency on
third parties for the execution of critical functions, our ability
to effectively implement and manage our information technology
strategy, the risks associated with past and future acquisitions,
including risk of related impairment of goodwill and intangible
assets, risks associated with conducting business in foreign
countries, including foreign currency fluctuations, risks
associated with violations of anti-corruption, trade protection and
other laws and regulations, availability of qualified full-time
employees, availability of temporary workers with appropriate
skills required by customers, liabilities for employment-related
claims and losses, including class action lawsuits and collective
actions, our ability to sustain critical business applications
through our key data centers, risks arising from failure to
preserve the privacy of information entrusted to us or to meet our
obligations under global privacy laws, the risk of cyberattacks or
other breaches of network or information technology security, our
ability to realize value from our tax credit and net operating loss
carryforwards, our ability to maintain specified financial
covenants in our bank facilities to continue to access credit
markets, and other risks, uncertainties and factors discussed in
this release and in the Company's filings with the Securities and
Exchange Commission. Actual results may differ materially from any
forward-looking statements contained herein, 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) connects talented
people to companies in need of their skills in areas including
Science, Engineering, Education, Office, Contact Center, Light
Industrial, and more. We're always thinking about what's next in
the evolving world of work, and we help people ditch the script on
old ways of thinking and embrace the value of all workstyles in the
workplace. We directly employ more than 350,000 people around the
world, and we connect thousands more with work through our global
network of talent suppliers and partners in our outsourcing and
consulting practice. Revenue in 2021 was $4.9 billion. Visit kellyservices.com and let us
help with what's next for you.
KLYA-FIN
MEDIA
CONTACT:
|
|
|
ANALYST
CONTACT:
|
Jane
Stehney
|
|
|
James
Polehna
|
(248)
765-6864
|
|
|
(248)
244-4586
|
stehnja@kellyservices.com
|
|
|
james.polehna@kellyservices.com
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF EARNINGS
|
FOR THE 13 WEEKS
ENDED OCTOBER 2, 2022 AND OCTOBER 3, 2021
|
(UNAUDITED)
|
(In millions of dollars
except per share data)
|
|
|
|
|
|
|
|
|
%
|
|
CC %
|
|
|
|
2022
|
|
2021
|
|
Change
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
1,167.9
|
$
|
1,195.4
|
$
|
(27.5)
|
|
(2.3)
|
%
|
0.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
927.3
|
|
966.5
|
|
(39.2)
|
|
(4.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
240.6
|
|
228.9
|
|
11.7
|
|
5.1
|
|
7.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
231.1
|
|
219.9
|
|
11.2
|
|
5.1
|
|
7.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill impairment
charge
|
|
30.7
|
|
—
|
|
30.7
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on
disposal
|
|
0.2
|
|
—
|
|
0.2
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
operations
|
|
(21.4)
|
|
9.0
|
|
(30.4)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on investment in
Persol Holdings
|
|
—
|
|
35.5
|
|
(35.5)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net
|
|
0.2
|
|
(0.3)
|
|
0.5
|
|
156.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before taxes and equity in net
earnings (loss) of affiliate
|
|
(21.2)
|
|
44.2
|
|
(65.4)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
(5.0)
|
|
11.1
|
|
(16.1)
|
|
(144.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
before equity in net
earnings (loss) of affiliate
|
|
(16.2)
|
|
33.1
|
|
(49.3)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings
(loss) of affiliate
|
|
—
|
|
1.7
|
|
(1.7)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
$
|
(16.2)
|
$
|
34.8
|
$
|
(51.0)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share
|
$
|
(0.43)
|
$
|
0.87
|
$
|
(1.30)
|
|
NM
|
|
|
|
Diluted earnings
(loss) per share
|
$
|
(0.43)
|
$
|
0.87
|
$
|
(1.30)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement
revenue (included in
revenue from services)
|
$
|
19.8
|
$
|
19.7
|
$
|
0.1
|
|
0.7
|
%
|
4.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
20.6
|
%
|
19.2
|
%
|
1.4
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion
rate
|
|
(8.9)
|
%
|
3.9
|
%
|
(12.8)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
19.1
|
$
|
17.3
|
$
|
1.8
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
1.6
|
%
|
1.4
|
%
|
0.2
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate
|
|
23.4
|
%
|
25.2
|
%
|
(1.8)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (millions):
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
37.9
|
|
39.4
|
|
|
|
|
|
|
|
Diluted
|
|
37.9
|
|
39.5
|
|
|
|
|
|
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF EARNINGS
|
FOR THE 39 WEEKS
ENDED OCTOBER 2, 2022 AND OCTOBER 3, 2021
|
(UNAUDITED)
|
(In millions of dollars
except per share data)
|
|
|
|
|
|
|
|
|
%
|
|
CC %
|
|
|
|
2022
|
|
2021
|
|
Change
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
3,731.6
|
$
|
3,659.4
|
$
|
72.2
|
|
2.0
|
%
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
2,970.0
|
|
2,986.2
|
|
(16.2)
|
|
(0.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
761.6
|
|
673.2
|
|
88.4
|
|
13.1
|
|
15.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
707.3
|
|
639.9
|
|
67.4
|
|
10.5
|
|
12.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
10.2
|
|
33.3
|
|
(23.1)
|
|
(69.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on
investment in Persol Holdings
|
|
(67.2)
|
|
71.8
|
|
(139.0)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on currency
translation from liquidation of
subsidiary(1)
|
|
(20.4)
|
|
—
|
|
(20.4)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net
|
|
1.9
|
|
(4.0)
|
|
5.9
|
|
148.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before taxes and equity in net
earnings (loss) of affiliate
|
|
(75.5)
|
|
101.1
|
|
(176.6)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
(13.1)
|
|
19.0
|
|
(32.1)
|
|
(169.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
before equity in net
earnings (loss) of affiliate
|
|
(62.4)
|
|
82.1
|
|
(144.5)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings
(loss) of affiliate
|
|
0.8
|
|
2.3
|
|
(1.5)
|
|
(66.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
$
|
(61.6)
|
$
|
84.4
|
$
|
(146.0)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share
|
$
|
(1.62)
|
$
|
2.12
|
$
|
(3.74)
|
|
NM
|
|
|
|
Diluted earnings
(loss) per share
|
$
|
(1.62)
|
$
|
2.12
|
$
|
(3.74)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement
revenue (included in
revenue from services)
|
$
|
71.2
|
$
|
54.3
|
$
|
16.9
|
|
31.2
|
%
|
34.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
20.4
|
%
|
18.4
|
%
|
2.0
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion
rate
|
|
1.3
|
%
|
4.9
|
%
|
(3.6)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
81.5
|
$
|
56.4
|
$
|
25.1
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
2.2
|
%
|
1.5
|
%
|
0.7
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate
|
|
17.4
|
%
|
18.8
|
%
|
(1.4)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (millions):
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
38.2
|
|
39.4
|
|
|
|
|
|
|
|
Diluted
|
|
38.2
|
|
39.5
|
|
|
|
|
|
|
|
|
(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 %
|
|
|
|
2022
|
|
|
2021
|
|
Change
|
|
Change
|
|
Professional &
Industrial
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
408.6
|
|
$
|
452.6
|
|
(9.7)
|
%
|
(9.4)
|
%
|
Gross
profit
|
|
70.3
|
|
|
76.6
|
|
(8.3)
|
|
(8.0)
|
|
Total SG&A
expenses
|
|
65.3
|
|
|
69.4
|
|
(6.0)
|
|
(5.8)
|
|
Earnings (loss) from
operations
|
|
5.0
|
|
|
7.2
|
|
(30.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
17.2
|
%
|
|
16.9
|
%
|
0.3
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Science, Engineering
& Technology
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
321.3
|
|
$
|
306.2
|
|
5.0
|
%
|
5.2
|
%
|
Gross
profit
|
|
76.3
|
|
|
68.1
|
|
11.9
|
|
12.3
|
|
Total SG&A
expenses
|
|
53.4
|
|
|
48.4
|
|
10.2
|
|
10.4
|
|
Earnings (loss) from
operations
|
|
22.9
|
|
|
19.7
|
|
16.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
23.7
|
%
|
|
22.3
|
%
|
1.4
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
104.3
|
|
$
|
66.6
|
|
56.6
|
%
|
56.6
|
%
|
Gross
profit
|
|
16.6
|
|
|
10.0
|
|
65.4
|
|
65.4
|
|
Total SG&A
expenses
|
|
21.4
|
|
|
17.0
|
|
25.6
|
|
25.6
|
|
Earnings (loss) from
operations
|
|
(4.8)
|
|
|
(7.0)
|
|
31.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
15.9
|
%
|
|
15.1
|
%
|
0.8
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outsourcing &
Consulting
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
118.5
|
|
$
|
113.4
|
|
4.5
|
%
|
5.9
|
%
|
Gross
profit
|
|
44.1
|
|
|
37.3
|
|
18.6
|
|
21.2
|
|
Total SG&A
expenses
|
|
37.7
|
|
|
30.7
|
|
23.4
|
|
25.6
|
|
Goodwill impairment
charge
|
|
30.7
|
|
|
—
|
|
NM
|
|
|
|
Earnings (loss) from
operations
|
|
(24.3)
|
|
|
6.6
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
37.2
|
%
|
|
32.8
|
%
|
4.4
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
215.5
|
|
$
|
256.8
|
|
(16.1)
|
%
|
(5.4)
|
%
|
Gross
profit
|
|
33.3
|
|
|
36.9
|
|
(9.6)
|
|
2.0
|
|
Total SG&A
expenses
|
|
31.4
|
|
|
34.5
|
|
(9.1)
|
|
1.5
|
|
Earnings (loss) from
operations
|
|
1.9
|
|
|
2.4
|
|
(16.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
15.5
|
%
|
|
14.4
|
%
|
1.1
|
pts.
|
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
RESULTS OF
OPERATIONS BY SEGMENT
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September Year to
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
CC %
|
|
|
|
2022
|
|
|
2021
|
|
Change
|
|
Change
|
|
Professional &
Industrial
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
1,268.7
|
|
$
|
1,386.7
|
|
(8.5)
|
%
|
(8.3)
|
%
|
Gross
profit
|
|
231.2
|
|
|
227.7
|
|
1.5
|
|
1.7
|
|
Total SG&A
expenses
|
|
204.1
|
|
|
207.8
|
|
(1.8)
|
|
(1.7)
|
|
Earnings (loss) from
operations
|
|
27.1
|
|
|
19.9
|
|
36.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
18.2
|
%
|
|
16.4
|
%
|
1.8
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Science, Engineering
& Technology
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
962.7
|
|
$
|
859.1
|
|
12.1
|
%
|
12.3
|
%
|
Gross
profit
|
|
225.3
|
|
|
187.8
|
|
19.9
|
|
20.2
|
|
Total SG&A
expenses
|
|
161.4
|
|
|
131.0
|
|
23.2
|
|
23.3
|
|
Earnings (loss) from
operations
|
|
63.9
|
|
|
56.8
|
|
12.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
23.4
|
%
|
|
21.9
|
%
|
1.5
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
433.2
|
|
$
|
284.1
|
|
52.5
|
%
|
52.5
|
%
|
Gross
profit
|
|
69.2
|
|
|
44.0
|
|
57.3
|
|
57.3
|
|
Total SG&A
expenses
|
|
60.4
|
|
|
46.5
|
|
29.9
|
|
29.9
|
|
Earnings (loss) from
operations
|
|
8.8
|
|
|
(2.5)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
16.0
|
%
|
|
15.5
|
%
|
0.5
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outsourcing &
Consulting
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
352.0
|
|
$
|
320.0
|
|
10.0
|
%
|
11.2
|
%
|
Gross
profit
|
|
127.6
|
|
|
103.4
|
|
23.5
|
|
25.7
|
|
Total SG&A
expenses
|
|
111.8
|
|
|
89.2
|
|
25.6
|
|
27.3
|
|
Goodwill impairment
charge
|
|
30.7
|
|
|
—
|
|
NM
|
|
|
|
Earnings (loss) from
operations
|
|
(14.9)
|
|
|
14.2
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
36.3
|
%
|
|
32.3
|
%
|
4.0
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
715.9
|
|
$
|
810.1
|
|
(11.6)
|
%
|
(3.5)
|
%
|
Gross
profit
|
|
108.3
|
|
|
110.3
|
|
(1.8)
|
|
7.4
|
|
Total SG&A
expenses
|
|
99.2
|
|
|
102.2
|
|
(3.0)
|
|
5.4
|
|
Earnings (loss) from
operations
|
|
9.1
|
|
|
8.1
|
|
13.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
15.1
|
%
|
|
13.6
|
%
|
1.5
|
pts.
|
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
October 2,
2022
|
|
January 2,
2022
|
|
October 3,
2021
|
|
Current
Assets
|
|
|
|
|
|
|
|
Cash and
equivalents
|
$
|
122.4
|
$
|
112.7
|
$
|
43.5
|
|
Trade accounts
receivable, less allowances of
|
|
|
|
|
|
|
|
$12.1, $12.6, and $12.3, respectively
|
|
1,519.9
|
|
1,423.2
|
|
1,423.9
|
|
Prepaid expenses
and other current assets
|
|
83.1
|
|
52.8
|
|
71.0
|
|
Assets held for
sale
|
|
4.7
|
|
—
|
|
—
|
|
Total current
assets
|
|
1,730.1
|
|
1,588.7
|
|
1,538.4
|
|
|
|
|
|
|
|
|
|
Noncurrent
Assets
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
24.9
|
|
35.3
|
|
36.1
|
|
Operating lease
right-of-use assets
|
|
67.3
|
|
75.8
|
|
79.3
|
|
Deferred
taxes
|
|
300.7
|
|
302.8
|
|
304.0
|
|
Goodwill,
net
|
|
161.4
|
|
114.8
|
|
114.8
|
|
Investment in
Persol Holdings
|
|
—
|
|
264.3
|
|
222.6
|
|
Investment in
equity affiliate
|
|
—
|
|
123.4
|
|
122.0
|
|
Other
assets
|
|
397.5
|
|
389.1
|
|
386.3
|
|
Total noncurrent
assets
|
|
951.8
|
|
1,305.5
|
|
1,265.1
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
$
|
2,681.9
|
$
|
2,894.2
|
$
|
2,803.5
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
Short-term
borrowings
|
$
|
0.1
|
$
|
—
|
$
|
—
|
|
Accounts payable
and accrued liabilities
|
|
735.2
|
|
687.2
|
|
645.2
|
|
Operating lease
liabilities
|
|
14.4
|
|
17.5
|
|
18.4
|
|
Accrued payroll
and related taxes
|
|
321.4
|
|
318.4
|
|
334.9
|
|
Accrued workers'
compensation and other claims
|
|
24.4
|
|
20.8
|
|
21.1
|
|
Income and other
taxes
|
|
47.5
|
|
51.3
|
|
58.4
|
|
Total current
liabilities
|
|
1,143.0
|
|
1,095.2
|
|
1,078.0
|
|
|
|
|
|
|
|
|
|
Noncurrent
Liabilities
|
|
|
|
|
|
|
|
Operating lease
liabilities
|
|
55.6
|
|
61.4
|
|
64.1
|
|
Accrued payroll and
related taxes
|
|
—
|
|
57.6
|
|
58.2
|
|
Accrued workers'
compensation and other claims
|
|
43.4
|
|
37.0
|
|
39.1
|
|
Accrued
retirement benefits
|
|
172.7
|
|
220.0
|
|
213.5
|
|
Other long-term
liabilities
|
|
14.5
|
|
86.8
|
|
76.5
|
|
Total noncurrent
liabilities
|
|
286.2
|
|
462.8
|
|
451.4
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
Common
stock
|
|
38.5
|
|
40.1
|
|
40.1
|
|
Treasury
stock
|
|
(12.4)
|
|
(15.1)
|
|
(15.2)
|
|
Paid-in
capital
|
|
26.6
|
|
23.9
|
|
23.2
|
|
Earnings
invested in the business
|
|
1,220.1
|
|
1,315.0
|
|
1,245.3
|
|
Accumulated
other comprehensive income (loss)
|
|
(20.1)
|
|
(27.7)
|
|
(19.3)
|
|
Total stockholders'
equity
|
|
1,252.7
|
|
1,336.2
|
|
1,274.1
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
$
|
2,681.9
|
$
|
2,894.2
|
$
|
2,803.5
|
|
|
|
|
|
|
|
|
|
STATISTICS:
|
|
|
|
|
|
|
|
Working
Capital
|
$
|
587.1
|
$
|
493.5
|
$
|
460.4
|
|
Current
Ratio
|
|
1.5
|
|
1.5
|
|
1.4
|
|
Debt-to-capital
%
|
|
0.0
|
%
|
0.0
|
%
|
0.0
|
%
|
Global Days Sales
Outstanding
|
|
64
|
|
60
|
|
63
|
|
Year-to-Date Free
Cash Flow
|
$
|
(117.3)
|
$
|
73.8
|
$
|
23.5
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
FOR THE 39 WEEKS
ENDED OCTOBER 2, 2022 AND OCTOBER 3, 2021
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
2022
|
|
2021
|
Cash flows from
operating activities:
|
|
|
|
|
Net earnings
(loss)
|
$
|
(61.6)
|
$
|
84.4
|
Adjustments to
reconcile net earnings (loss) to net cash from operating
activities:
|
|
|
|
|
Goodwill impairment
charge
|
|
30.7
|
|
—
|
Deferred income taxes
on goodwill impairment charge
|
|
(5.3)
|
|
—
|
Loss on
disposal
|
|
18.7
|
|
—
|
Depreciation and
amortization
|
|
24.7
|
|
22.0
|
Operating lease asset
amortization
|
|
14.2
|
|
16.0
|
Provision for credit
losses and sales allowances
|
|
1.7
|
|
0.8
|
Stock-based
compensation
|
|
5.9
|
|
4.0
|
(Gain) loss on
investment in Persol Holdings
|
|
67.2
|
|
(71.8)
|
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) loss of PersolKelly Pte. Ltd.
|
|
(0.8)
|
|
(2.3)
|
Other, net
|
|
3.5
|
|
4.6
|
Changes in operating
assets and liabilities, net of acquisitions
|
|
(220.2)
|
|
(26.7)
|
Net cash (used in)
from operating activities
|
|
(111.7)
|
|
31.0
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Capital
expenditures
|
|
(5.6)
|
|
(7.5)
|
Proceeds from sale of
assets
|
|
4.5
|
|
—
|
Acquisition of
companies, net of cash received
|
|
(143.1)
|
|
(213.0)
|
Cash disposed from sale
of Russia, net of proceeds
|
|
(6.0)
|
|
—
|
Proceeds from
company-owned life insurance
|
|
1.5
|
|
10.4
|
Proceeds from sale of
Persol Holdings investment
|
|
196.9
|
|
—
|
Proceeds from sale of
equity method investment
|
|
119.5
|
|
—
|
Proceeds related to
loans with equity affiliate
|
|
—
|
|
5.8
|
Proceeds from equity
securities
|
|
—
|
|
5.0
|
Other investing
activities
|
|
—
|
|
0.9
|
Net cash from (used
in) investing activities
|
|
167.7
|
|
(198.4)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Net change in
short-term borrowings
|
|
0.2
|
|
(0.2)
|
Financing lease
payments
|
|
(1.2)
|
|
(1.3)
|
Dividend
payments
|
|
(7.7)
|
|
(2.0)
|
Payments of tax
withholding for stock awards
|
|
(0.9)
|
|
(0.6)
|
Buyback of common
shares
|
|
(27.2)
|
|
—
|
Contingent
consideration payments
|
|
(0.7)
|
|
(1.6)
|
Other financing
activities
|
|
0.1
|
|
—
|
Net cash used in
financing activities
|
|
(37.4)
|
|
(5.7)
|
|
|
|
|
|
Effect of exchange
rates on cash, cash equivalents and restricted cash
|
|
(7.4)
|
|
(3.9)
|
|
|
|
|
|
Net change in cash,
cash equivalents and restricted cash
|
|
11.2
|
|
(177.0)
|
Cash, cash
equivalents and restricted cash at beginning of
period
|
|
119.5
|
|
228.1
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
130.7
|
$
|
51.1
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
REVENUE FROM
SERVICES BY GEOGRAPHY
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
CC %
|
|
|
|
2022
|
|
2021
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
|
|
|
|
|
|
United
States
|
$
|
861.0
|
$
|
851.7
|
|
1.1
|
%
|
1.1
|
%
|
Canada
|
|
43.3
|
|
43.3
|
|
0.1
|
|
3.8
|
|
Puerto Rico
|
|
28.3
|
|
25.5
|
|
10.8
|
|
10.8
|
|
Mexico
|
|
10.9
|
|
14.4
|
|
(24.0)
|
|
(23.3)
|
|
Total Americas
Region
|
|
943.5
|
|
934.9
|
|
0.9
|
|
1.1
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
|
|
|
Switzerland
|
|
55.2
|
|
54.5
|
|
1.2
|
|
6.5
|
|
France
|
|
45.8
|
|
56.3
|
|
(18.7)
|
|
(4.8)
|
|
Portugal
|
|
41.9
|
|
36.6
|
|
14.2
|
|
33.8
|
|
Italy
|
|
16.4
|
|
18.5
|
|
(10.8)
|
|
4.5
|
|
United
Kingdom
|
|
14.2
|
|
17.2
|
|
(17.1)
|
|
(3.1)
|
|
Russia
|
|
5.0
|
|
33.0
|
|
(85.0)
|
|
(87.9)
|
|
Other
|
|
35.6
|
|
33.7
|
|
6.0
|
|
25.3
|
|
Total Europe
Region
|
|
214.1
|
|
249.8
|
|
(14.3)
|
|
(2.8)
|
|
|
|
|
|
|
|
|
|
|
|
Total Asia-Pacific
Region
|
|
10.3
|
|
10.7
|
|
(3.8)
|
|
2.9
|
|
|
|
|
|
|
|
|
|
|
|
Total Kelly
Services, Inc.
|
$
|
1,167.9
|
$
|
1,195.4
|
|
(2.3)
|
%
|
0.3
|
%
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
REVENUE FROM
SERVICES BY GEOGRAPHY
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
September Year to
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
CC %
|
|
|
|
2022
|
|
2021
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
|
|
|
|
|
|
United
States
|
$
|
2,746.5
|
$
|
2,604.8
|
|
5.4
|
%
|
5.4
|
%
|
Canada
|
|
122.7
|
|
116.9
|
|
5.0
|
|
7.8
|
|
Puerto Rico
|
|
84.8
|
|
76.6
|
|
10.7
|
|
10.7
|
|
Mexico
|
|
32.4
|
|
82.1
|
|
(60.5)
|
|
(60.3)
|
|
Total Americas
Region
|
|
2,986.4
|
|
2,880.4
|
|
3.7
|
|
3.8
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
|
|
|
Switzerland
|
|
165.5
|
|
161.2
|
|
2.6
|
|
7.2
|
|
France
|
|
150.8
|
|
168.1
|
|
(10.3)
|
|
0.8
|
|
Portugal
|
|
125.8
|
|
120.9
|
|
4.0
|
|
17.1
|
|
Russia
|
|
63.4
|
|
99.3
|
|
(36.2)
|
|
(35.5)
|
|
Italy
|
|
54.3
|
|
56.0
|
|
(3.0)
|
|
9.1
|
|
United
Kingdom
|
|
45.2
|
|
51.9
|
|
(12.8)
|
|
(3.7)
|
|
Other
|
|
107.6
|
|
93.3
|
|
15.4
|
|
30.8
|
|
Total Europe
Region
|
|
712.6
|
|
750.7
|
|
(5.1)
|
|
4.0
|
|
|
|
|
|
|
|
|
|
|
|
Total Asia-Pacific
Region
|
|
32.6
|
|
28.3
|
|
15.2
|
|
22.0
|
|
|
|
|
|
|
|
|
|
|
|
Total Kelly
Services, Inc.
|
$
|
3,731.6
|
$
|
3,659.4
|
|
2.0
|
%
|
4.0
|
%
|
KELLY
SERVICES, INC. AND SUBSIDIARIES
|
RECONCILIATION
OF NON-GAAP MEASURES
|
THIRD
QUARTER
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
|
2022
|
|
2021
|
SG&A
Expenses:
|
As
Reported
|
|
Adjusted
|
Professional &
Industrial
|
$
65.3
|
|
$
69.4
|
Science, Engineering
& Technology
|
53.4
|
|
48.4
|
Education
|
21.4
|
|
17.0
|
Outsourcing &
Consulting
|
37.7
|
|
30.7
|
International
|
31.4
|
|
34.5
|
Corporate
|
21.9
|
|
20.0
|
Total
Company
|
$
231.1
|
|
$
220.0
|
|
2022
|
|
2021
|
Earnings (loss) from
Operations:
|
As Reported
|
|
Loss on
disposal(4)
|
|
Goodwill
impairment
charge(5)
|
|
Adjusted
|
|
Adjusted
|
Professional &
Industrial
|
$
5.0
|
|
$
—
|
|
$
—
|
|
$
5.0
|
|
$
7.2
|
Science, Engineering
& Technology
|
22.9
|
|
—
|
|
—
|
|
22.9
|
|
19.7
|
Education
|
(4.8)
|
|
—
|
|
—
|
|
(4.8)
|
|
(7.0)
|
Outsourcing &
Consulting
|
(24.3)
|
|
—
|
|
30.7
|
|
6.4
|
|
6.6
|
International
|
1.9
|
|
—
|
|
—
|
|
1.9
|
|
2.4
|
Corporate
|
(21.9)
|
|
—
|
|
—
|
|
(21.9)
|
|
(20.0)
|
Loss on
disposal
|
(0.2)
|
|
0.2
|
|
—
|
|
—
|
|
—
|
Total
Company
|
$
(21.4)
|
|
$
0.2
|
|
$
30.7
|
|
$
9.5
|
|
$
8.9
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP MEASURES
|
THIRD
QUARTER
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
2021
|
SG&A
Expenses:
|
As
Reported
|
|
Restructuring(6)
|
|
Adjusted
|
Professional &
Industrial
|
$
69.4
|
|
$
—
|
|
$
69.4
|
Science, Engineering
& Technology
|
48.4
|
|
—
|
|
48.4
|
Education
|
17.0
|
|
—
|
|
17.0
|
Outsourcing &
Consulting
|
30.7
|
|
—
|
|
30.7
|
International
|
34.5
|
|
—
|
|
34.5
|
Corporate
|
19.9
|
|
0.1
|
|
20.0
|
Total
Company
|
$
219.9
|
|
$
0.1
|
|
$
220.0
|
|
|
2021
|
Earnings (loss) from
Operations:
|
As
Reported
|
|
Restructuring(6)
|
|
Adjusted
|
Professional &
Industrial
|
$
7.2
|
|
$
—
|
|
$
7.2
|
Science, Engineering
& Technology
|
19.7
|
|
—
|
|
19.7
|
Education
|
(7.0)
|
|
—
|
|
(7.0)
|
Outsourcing &
Consulting
|
6.6
|
|
—
|
|
6.6
|
International
|
2.4
|
|
—
|
|
2.4
|
Corporate
|
(19.9)
|
|
(0.1)
|
|
(20.0)
|
Total
Company
|
$
9.0
|
|
$
(0.1)
|
|
$
8.9
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP MEASURES
|
SEPTEMBER YEAR TO
DATE
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
|
|
2022
|
|
2021
|
SG&A
Expenses:
|
As
Reported
|
|
Adjusted
|
Professional &
Industrial
|
$
204.1
|
|
$
207.8
|
Science, Engineering
& Technology
|
161.4
|
|
131.0
|
Education
|
60.4
|
|
46.5
|
Outsourcing &
Consulting
|
111.8
|
|
89.2
|
International
|
99.2
|
|
102.2
|
Corporate
|
70.4
|
|
63.3
|
Intersegment
|
—
|
|
|
Total
Company
|
$
707.3
|
|
$
640.0
|
|
2022
|
|
2021
|
Earnings (loss) from
Operations:
|
As Reported
|
|
Gain on
sale
of assets(3)
|
|
Loss on
disposal(4)
|
|
Goodwill
impairment
charge(5)
|
|
Adjusted
|
|
Adjusted
|
Professional &
Industrial
|
$
27.1
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
27.1
|
|
$
19.9
|
Science, Engineering
& Technology
|
63.9
|
|
—
|
|
—
|
|
—
|
|
63.9
|
|
56.8
|
Education
|
8.8
|
|
—
|
|
—
|
|
—
|
|
8.8
|
|
(2.5)
|
Outsourcing &
Consulting
|
(14.9)
|
|
—
|
|
—
|
|
30.7
|
|
15.8
|
|
14.2
|
International
|
9.1
|
|
—
|
|
—
|
|
—
|
|
9.1
|
|
8.1
|
Corporate
|
(70.4)
|
|
—
|
|
—
|
|
—
|
|
(70.4)
|
|
(63.3)
|
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
|
|
$
33.2
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP MEASURES
|
SEPTEMBER YEAR TO
DATE
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
2021
|
SG&A
Expenses:
|
As
Reported
|
|
Restructuring(6)
|
|
Adjusted
|
Professional &
Industrial
|
$
207.8
|
|
$
—
|
|
$
207.8
|
Science, Engineering
& Technology
|
131.0
|
|
—
|
|
131.0
|
Education
|
46.5
|
|
—
|
|
46.5
|
Outsourcing &
Consulting
|
89.2
|
|
—
|
|
89.2
|
International
|
102.2
|
|
—
|
|
102.2
|
Corporate
|
63.2
|
|
0.1
|
|
63.3
|
Total
Company
|
$
639.9
|
|
$
0.1
|
|
$
640.0
|
|
|
|
2021
|
Earnings (loss) from
Operations:
|
As
Reported
|
|
Restructuring(6)
|
|
Adjusted
|
Professional &
Industrial
|
$
19.9
|
|
$
—
|
|
$
19.9
|
Science, Engineering
& Technology
|
56.8
|
|
—
|
|
56.8
|
Education
|
(2.5)
|
|
—
|
|
(2.5)
|
Outsourcing &
Consulting
|
14.2
|
|
—
|
|
14.2
|
International
|
8.1
|
|
—
|
|
8.1
|
Corporate
|
(63.2)
|
|
(0.1)
|
|
(63.3)
|
Total
Company
|
$
33.3
|
|
$
(0.1)
|
|
$
33.2
|
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
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Income tax expense
(benefit)
|
|
$
(5.0)
|
|
$
11.1
|
|
$
(13.1)
|
|
$
19.0
|
Taxes on investment in
Persol Holdings(1)
|
|
—
|
|
(10.9)
|
|
18.4
|
|
(22.0)
|
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 goodwill
impairment charge(5)
|
|
5.3
|
|
—
|
|
5.3
|
|
—
|
Taxes on restructuring
charges(6)
|
|
—
|
|
—
|
|
—
|
|
—
|
Adjusted income tax
expense (benefit)
|
|
$
0.3
|
|
$
0.2
|
|
$
7.8
|
|
$
(3.0)
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
September Year to
Date
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net earnings
(loss)
|
|
$
(16.2)
|
|
$
34.8
|
|
$
(61.6)
|
|
$
84.4
|
(Gain) loss on
investment in Persol Holdings,
net of taxes(1)
|
|
—
|
|
(24.6)
|
|
48.8
|
|
(49.8)
|
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
|
|
—
|
Goodwill impairment
charge, net of taxes(5)
|
|
25.4
|
|
—
|
|
25.4
|
|
—
|
Restructuring charges,
net of taxes(6)
|
|
—
|
|
(0.1)
|
|
—
|
|
(0.1)
|
Adjusted net
earnings
|
|
$
9.4
|
|
$
10.1
|
|
$
43.7
|
|
$
34.5
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
September Year to
Date
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
Per
Share
|
|
Per
Share
|
Net earnings
(loss)
|
|
$
(0.43)
|
|
$
0.87
|
|
$
(1.62)
|
|
$
2.12
|
(Gain) loss on
investment in Persol Holdings,
net of taxes(1)
|
|
—
|
|
(0.62)
|
|
1.28
|
|
(1.25)
|
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
|
|
—
|
Goodwill impairment
charge, net of taxes(5)
|
|
0.67
|
|
—
|
|
0.67
|
|
—
|
Restructuring charges,
net of taxes(6)
|
|
—
|
|
—
|
|
—
|
|
—
|
Adjusted net
earnings
|
|
$
0.25
|
|
$
0.25
|
|
$
1.15
|
|
$
0.86
|
|
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
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net earnings
(loss)
|
$
(16.2)
|
|
$
34.8
|
|
$
(61.6)
|
|
$
84.4
|
Other (income) expense,
net(2)
|
(0.2)
|
|
0.3
|
|
(1.9)
|
|
4.0
|
Income tax expense
(benefit)
|
(5.0)
|
|
11.1
|
|
(13.1)
|
|
19.0
|
Depreciation and
amortization
|
9.6
|
|
8.4
|
|
27.2
|
|
23.2
|
EBITDA
|
(11.8)
|
|
54.6
|
|
(49.4)
|
|
130.6
|
Equity in net
(earnings) loss of affiliate
|
—
|
|
(1.7)
|
|
(0.8)
|
|
(2.3)
|
(Gain) loss on
investment in Persol Holdings(1)
|
—
|
|
(35.5)
|
|
67.2
|
|
(71.8)
|
Loss on foreign
currency matters(2)
|
—
|
|
—
|
|
20.4
|
|
—
|
Gain on sale of
assets(3)
|
—
|
|
—
|
|
(5.3)
|
|
—
|
Loss on
disposal(4)
|
0.2
|
|
—
|
|
18.7
|
|
—
|
Goodwill impairment
charge(5)
|
30.7
|
|
—
|
|
30.7
|
|
—
|
Restructuring(6)
|
—
|
|
(0.1)
|
|
—
|
|
(0.1)
|
Adjusted
EBITDA
|
$
19.1
|
|
$
17.3
|
|
$
81.5
|
|
$
56.4
|
Adjusted EBITDA
margin
|
1.6 %
|
|
1.4 %
|
|
2.2 %
|
|
1.5 %
|
KELLY SERVICES, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
MEASURES
(UNAUDITED)
Management believes that the non-GAAP (Generally Accepted
Accounting Principles) information excluding the 2022 sale of the
Persol Holdings investment, the 2022 and 2021 gains and losses on
the fair value changes of the investment in Persol Holdings, the
2022 losses on foreign currency matters, the 2022 gains on sale of
assets, the 2022 loss on disposal, the 2022 goodwill impairment and
the 2021 restructuring adjustments are useful to understand the
Company's fiscal 2022 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. In 2021, the gain on the investment in Persol
Holdings represents the change in fair value of the investment
during the period presented and the related tax expense.
(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) 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.
(6) Restructuring in 2021 represents
adjustments to restructuring charges from 2020 relating to the
severance costs and lease terminations for the new operating model
adopted in the third quarter of 2020.
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SOURCE Kelly Services, Inc.