- Q4 revenue down 1.3%; up 0.7% in constant currency
- Q4 gross profit up 1.7%; up 3.7% in constant currency with
Q4 GP rate of 20.3%, an improvement of 60 bps
- Q4 operating earnings of $4.6
million including non-cash goodwill impairment charge, or
$14.0 million on an adjusted basis,
down 28% on an adjusted basis from a year ago
- Full year 2022 operating earnings of $14.8 million, or adjusted earnings of
$68.3 million, compared to adjusted
earnings of $52.6 million last year,
up 30% on an adjusted basis
TROY,
Mich., Feb. 16, 2023 /PRNewswire/ -- Kelly
(Nasdaq: KELYA, KELYB), a leading specialty talent solutions
provider, today announced results for the fourth quarter and full
year of 2022.
Peter Quigley, president and
chief executive officer, announced revenue for the fourth quarter
of 2022 totaled $1.2 billion, a 1.3%
decrease, or 0.7% 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 operating earnings in the fourth quarter of 2022
of $4.6 million, compared to earnings
of $15.3 million reported in the
fourth quarter of 2021. Earnings in the fourth quarter of 2022
included a $10.3 million goodwill
impairment charge related to RocketPower. The charge reflects the
acceleration of declines in hiring in the high-tech industry in
which RocketPower specializes. Excluding the impairment charge and
a $0.9 million gain related to the
sale of real property, adjusted earnings from operations were
$14.0 million. Earnings in the fourth
quarter of 2021 included a $4.1
million restructuring charge and adjusted earnings were
$19.4 million. Adjusted earnings
declined primarily as a result of higher selling, general and
administrative expenses, partially offset by the impact of
structural improvements in the business mix which resulted in
higher gross profit.
Loss per share in the fourth quarter of 2022 was $0.02 compared to earnings per share of
$1.80 in the fourth quarter of 2021.
Included in the loss per share in the fourth quarter of 2022 is a
$0.23 per share goodwill impairment
charge, net of tax, related to RocketPower, partially offset by a
$0.02 per share gain on sale of real
property, net of tax. Included in the fourth quarter of 2021 is a
non-cash gain, net of tax, on Kelly's investment in Persol Holdings
common shares of $0.87 and a gain on
insurance settlement, net of tax, of $0.36, partially offset by a loss of $0.08 related to restructuring charges, net of
tax. On an adjusted basis, earnings per share were $0.18 in the fourth quarter of 2022, a decline
from $0.65 per share in the
corresponding quarter of 2021.
Operating earnings for the full year of 2022 totaled
$14.8 million compared to earnings of
$48.6 million for the full year of
2021. The 2022 full-year results included a $41.0 million goodwill impairment charge, an
$18.7 million loss on the disposal of
Kelly's Russian operations and $6.2
million of gains on the sale of assets. The 2021 full-year
results included a $4.0 million
restructuring charge. On an adjusted basis, earnings from
operations for the full year of 2022 were $68.3 million compared to $52.6 million for the full year of 2021, a 30%
improvement.
The loss per share for the full year of 2022 was $1.64 compared to earnings per share for the full
year of 2021 of $3.91. Included in
the loss per share for the full year of 2022 is a $1.28 loss on Kelly's investment in Persol
Holdings common stock, net of tax, an $0.89 goodwill
impairment charge, net of tax, a $0.49 loss on sale of Kelly's Russian operations,
net of tax, and a $0.43 loss on
foreign currency matters, net of tax, partially offset by a
$0.12 gain on sale of assets, net of
tax. Included in the earnings per share for the full year of 2021
was $2.12 from a non-cash gain on
Kelly's investment in Persol Holdings common stock, net of tax, and
a $0.36 gain on insurance settlement,
net of tax, partially offset by a $0.07 per share restructuring charge, net of tax.
On an adjusted basis, earnings per share were $1.33 for the full year of 2022 compared to
$1.51 for the full year of 2021.
"As macroeconomic uncertainty increased in the fourth quarter,
we remained focused on executing our specialty strategy, achieving
top-line growth in our Education, SET, and OCG segments, and
expanding our gross profit rate on a year-over-year basis as we
continue to remix our portfolio toward higher-margin, higher-value
products and specialties," said Quigley. "While it's difficult to
know how the macroeconomic situation will unfold as we move forward
in 2023, we will position Kelly to manage through this economic
cycle while staying the course in our aggressive pursuit of
profitable growth. With ample capital available to us, we will
continue to execute our inorganic strategy and invest in
technologies and new products that will improve the talent and
customer experience, increase efficiency, and enable organic growth
well into the future."
Kelly also reported that on February
14, its board of directors declared a dividend of
$0.075 per share. The dividend is
payable on March 13, 2023 to
stockholders of record as of the close of business on February 27, 2023.
In conjunction with its fourth-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 February 16 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 February 16, 2023, at (866) 207-1041 (toll-free)
and (402) 970-0847 (caller-paid). The access code is 1472042#. 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 brands, 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, exposure to risks associated with certain equity
investments, including with strategic partners, 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 300,000 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 2022 was $5.0 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
|
|
|
polehjm@kellyservices.com
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF EARNINGS
|
FOR THE 13 WEEKS
ENDED JANUARY 1, 2023 AND JANUARY 2, 2022
|
(UNAUDITED)
|
(In millions of dollars
except per share data)
|
|
|
|
|
|
|
|
|
%
|
|
CC %
|
|
|
|
2022
|
|
2021
|
|
Change
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
1,233.8
|
$
|
1,250.3
|
$
|
(16.5)
|
|
(1.3)
|
%
|
0.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
983.6
|
|
1,004.3
|
|
(20.7)
|
|
(2.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
250.2
|
|
246.0
|
|
4.2
|
|
1.7
|
|
3.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
236.2
|
|
230.7
|
|
5.5
|
|
2.4
|
|
4.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill impairment
charge
|
|
10.3
|
|
—
|
|
10.3
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of
assets
|
|
(0.9)
|
|
—
|
|
(0.9)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from
operations
|
|
4.6
|
|
15.3
|
|
(10.7)
|
|
(70.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on
investment in Persol Holdings
|
|
—
|
|
50.0
|
|
(50.0)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on insurance
settlement
|
|
—
|
|
19.0
|
|
(19.0)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net
|
|
(0.3)
|
|
0.4
|
|
(0.7)
|
|
(161.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
taxes and equity in net earnings (loss) of affiliate
|
|
4.3
|
|
84.7
|
|
(80.4)
|
|
(94.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
5.2
|
|
16.1
|
|
(10.9)
|
|
(67.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
before equity in net earnings (loss) of affiliate
|
|
(0.9)
|
|
68.6
|
|
(69.5)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings
(loss) of affiliate
|
|
—
|
|
3.1
|
|
(3.1)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
(0.9)
|
$
|
71.7
|
$
|
(72.6)
|
|
NM
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share
|
$
|
(0.02)
|
$
|
1.80
|
$
|
(1.82)
|
|
NM
|
%
|
|
|
Diluted earnings
(loss) per share
|
$
|
(0.02)
|
$
|
1.80
|
$
|
(1.82)
|
|
NM
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement
income (included in revenue from services)
|
$
|
18.4
|
$
|
21.1
|
$
|
(2.7)
|
|
(12.7)
|
%
|
(10.0)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
20.3
|
%
|
19.7
|
%
|
0.6
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion
rate
|
|
1.8
|
%
|
6.2
|
%
|
(4.4)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
24.1
|
$
|
27.7
|
$
|
(3.6)
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
2.0
|
%
|
2.2
|
%
|
(0.2)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate
|
|
121.4
|
%
|
19.0
|
%
|
102.4
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (millions):
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
37.9
|
|
39.4
|
|
|
|
|
|
|
|
Diluted
|
|
37.9
|
|
39.6
|
|
|
|
|
|
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF EARNINGS
|
FOR THE 52 WEEKS
ENDED JANUARY 1, 2023 AND JANUARY 2, 2022
|
(UNAUDITED)
|
(In millions of dollars
except per share data)
|
|
|
|
|
|
|
|
|
%
|
|
CC %
|
|
|
|
2022
|
|
2021
|
|
Change
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
4,965.4
|
$
|
4,909.7
|
$
|
55.7
|
|
1.1
|
%
|
3.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
3,953.6
|
|
3,990.5
|
|
(36.9)
|
|
(0.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
1,011.8
|
|
919.2
|
|
92.6
|
|
10.1
|
|
12.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
943.5
|
|
870.6
|
|
72.9
|
|
8.4
|
|
10.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill impairment
charge
|
|
41.0
|
|
—
|
|
41.0
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of
assets
|
|
(6.2)
|
|
—
|
|
(6.2)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on
disposal
|
|
18.7
|
|
—
|
|
18.7
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from
operations
|
|
14.8
|
|
48.6
|
|
(33.8)
|
|
(69.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on
investment in Persol Holdings
|
|
(67.2)
|
|
121.8
|
|
(189.0)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on insurance
settlement
|
|
—
|
|
19.0
|
|
(19.0)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on currency
translation from liquidation of subsidiary
|
(20.4)
|
|
—
|
|
(20.4)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net
|
|
1.6
|
|
(3.6)
|
|
5.2
|
|
146.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before taxes and equity in net earnings (loss) of
affiliate
|
|
(71.2)
|
|
185.8
|
|
(257.0)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
(7.9)
|
|
35.1
|
|
(43.0)
|
|
(122.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
before equity in net earnings (loss) of affiliate
|
|
(63.3)
|
|
150.7
|
|
(214.0)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings
(loss) of affiliate
|
|
0.8
|
|
5.4
|
|
(4.6)
|
|
(85.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
$
|
(62.5)
|
$
|
156.1
|
$
|
(218.6)
|
|
NM
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share
|
$
|
(1.64)
|
$
|
3.93
|
$
|
(5.57)
|
|
NM
|
%
|
|
|
Diluted earnings
(loss) per share
|
$
|
(1.64)
|
$
|
3.91
|
$
|
(5.55)
|
|
NM
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement
income (included in revenue from services)
|
$
|
89.6
|
$
|
75.4
|
$
|
14.2
|
|
18.9
|
%
|
21.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
20.4
|
%
|
18.7
|
%
|
1.7
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion
rate
|
|
1.5
|
%
|
5.3
|
%
|
(3.8)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
105.6
|
$
|
84.1
|
$
|
21.5
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
2.1
|
%
|
1.7
|
%
|
0.4
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate
|
|
11.1
|
%
|
18.9
|
%
|
(7.8)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (millions):
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
38.1
|
|
39.4
|
|
|
|
|
|
|
|
Diluted
|
|
38.1
|
|
39.5
|
|
|
|
|
|
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
RESULTS OF
OPERATIONS BY SEGMENT
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
|
2021
|
|
%
Change
|
|
CC %
Change
|
|
Professional &
Industrial
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
397.5
|
|
$
|
450.7
|
|
(11.8)
|
%
|
(11.2)
|
%
|
Gross
profit
|
|
71.3
|
|
|
82.3
|
|
(13.3)
|
|
(12.6)
|
|
Total SG&A
expenses
|
|
66.4
|
|
|
70.8
|
|
(6.1)
|
|
(5.7)
|
|
Earnings (loss) from
operations
|
|
4.9
|
|
|
11.5
|
|
(57.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
17.9
|
%
|
|
18.2
|
%
|
(0.3)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Science, Engineering
& Technology
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
302.7
|
|
$
|
297.7
|
|
1.7
|
%
|
2.0
|
%
|
Gross
profit
|
|
71.7
|
|
|
66.1
|
|
8.5
|
|
8.7
|
|
Total SG&A
expenses
|
|
53.5
|
|
|
49.2
|
|
8.7
|
|
8.8
|
|
Earnings (loss) from
operations
|
|
18.2
|
|
|
16.9
|
|
7.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
23.7
|
%
|
|
22.2
|
%
|
1.5
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
203.0
|
|
$
|
132.4
|
|
53.3
|
%
|
53.3
|
%
|
Gross
profit
|
|
31.1
|
|
|
21.1
|
|
47.2
|
|
47.2
|
|
Total SG&A
expenses
|
|
21.4
|
|
|
15.6
|
|
37.0
|
|
37.0
|
|
Earnings (loss) from
operations
|
|
9.7
|
|
|
5.5
|
|
76.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
15.3
|
%
|
|
15.9
|
%
|
(0.6)
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outsourcing &
Consulting
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
116.0
|
|
$
|
112.1
|
|
3.5
|
%
|
5.1
|
%
|
Gross
profit
|
|
42.0
|
|
|
38.0
|
|
10.5
|
|
13.3
|
|
Total SG&A
expenses
|
|
38.0
|
|
|
33.5
|
|
13.0
|
|
14.8
|
|
Goodwill impairment
charge
|
|
10.3
|
|
|
—
|
|
NM
|
|
|
|
Earnings (loss) from
operations
|
|
(6.3)
|
|
|
4.5
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
36.3
|
%
|
|
34.0
|
%
|
2.3
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
216.3
|
|
$
|
257.7
|
|
(16.1)
|
%
|
(8.4)
|
%
|
Gross
profit
|
|
34.1
|
|
|
38.5
|
|
(11.7)
|
|
(3.4)
|
|
SG&A expenses
excluding restructuring charges
|
|
33.3
|
|
|
35.5
|
|
(6.1)
|
|
1.7
|
|
Restructuring
charges
|
|
—
|
|
|
1.2
|
|
NM
|
|
NM
|
|
Total SG&A
expenses
|
|
33.3
|
|
|
36.7
|
|
(9.2)
|
|
(1.6)
|
|
Earnings (loss) from
operations
|
|
0.8
|
|
|
1.8
|
|
(61.4)
|
|
|
|
Earnings (loss) from
operations excluding restructuring charges
|
|
0.8
|
|
|
3.0
|
|
(76.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
15.8
|
%
|
|
15.0
|
%
|
0.8
|
pts.
|
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
RESULTS OF
OPERATIONS BY SEGMENT
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December Year to
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
|
2021
|
|
%
Change
|
|
CC %
Change
|
|
Professional &
Industrial
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
1,666.2
|
|
$
|
1,837.4
|
|
(9.3)
|
%
|
(9.0)
|
%
|
Gross
profit
|
|
302.5
|
|
|
310.0
|
|
(2.4)
|
|
(2.1)
|
|
Total SG&A
expenses
|
|
270.5
|
|
|
278.6
|
|
(2.9)
|
|
(2.7)
|
|
Earnings (loss) from
operations
|
|
32.0
|
|
|
31.4
|
|
1.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
18.2
|
%
|
|
16.9
|
%
|
1.3
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Science, Engineering
& Technology
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
1,265.4
|
|
$
|
1,156.8
|
|
9.4
|
%
|
9.6
|
%
|
Gross
profit
|
|
297.0
|
|
|
253.9
|
|
17.0
|
|
17.2
|
|
Total SG&A
expenses
|
|
214.9
|
|
|
180.2
|
|
19.2
|
|
19.4
|
|
Earnings (loss) from
operations
|
|
82.1
|
|
|
73.7
|
|
11.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
23.5
|
%
|
|
21.9
|
%
|
1.6
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
636.2
|
|
$
|
416.5
|
|
52.7
|
%
|
52.7
|
%
|
Gross
profit
|
|
100.3
|
|
|
65.1
|
|
54.0
|
|
54.0
|
|
Total SG&A
expenses
|
|
81.8
|
|
|
62.1
|
|
31.7
|
|
31.7
|
|
Earnings (loss) from
operations
|
|
18.5
|
|
|
3.0
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
15.8
|
%
|
|
15.6
|
%
|
0.2
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outsourcing &
Consulting
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
468.0
|
|
$
|
432.1
|
|
8.3
|
%
|
9.6
|
%
|
Gross
profit
|
|
169.6
|
|
|
141.4
|
|
20.0
|
|
22.4
|
|
Total SG&A
expenses
|
|
149.8
|
|
|
122.7
|
|
22.1
|
|
23.9
|
|
Goodwill impairment
charge
|
|
41.0
|
|
|
—
|
|
NM
|
|
|
|
Earnings (loss) from
operations
|
|
(21.2)
|
|
|
18.7
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
36.3
|
%
|
|
32.7
|
%
|
3.6
|
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services
|
$
|
932.2
|
|
$
|
1,067.8
|
|
(12.7)
|
%
|
(4.7)
|
%
|
Gross
profit
|
|
142.4
|
|
|
148.8
|
|
(4.3)
|
|
4.6
|
|
SG&A expenses
excluding restructuring charges
|
|
132.5
|
|
|
137.7
|
|
(3.8)
|
|
4.5
|
|
Restructuring
charges
|
|
—
|
|
|
1.2
|
|
NM
|
|
NM
|
|
Total SG&A
expenses
|
|
132.5
|
|
|
138.9
|
|
(4.6)
|
|
3.6
|
|
Earnings (loss) from
operations
|
|
9.9
|
|
|
9.9
|
|
(0.5)
|
|
|
|
Earnings (loss) from
operations excluding restructuring charges
|
|
9.9
|
|
|
11.1
|
|
(11.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
rate
|
|
15.3
|
%
|
|
13.9
|
%
|
1.4
|
pts.
|
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
Jan. 1,
2023
|
|
|
Jan. 2,
2022
|
|
Current
Assets
|
|
|
|
|
|
|
Cash and
equivalents
|
$
|
153.7
|
|
$
|
112.7
|
|
Trade accounts
receivable, less allowances of
|
|
|
|
|
|
|
$11.2 and $12.6, respectively
|
|
1,491.6
|
|
|
1,423.2
|
|
Prepaid expenses
and other current assets
|
|
69.9
|
|
|
52.8
|
|
Total current
assets
|
|
1,715.2
|
|
|
1,588.7
|
|
|
|
|
|
|
|
|
Noncurrent
Assets
|
|
|
|
|
|
|
Property and
equipment, net
|
|
27.8
|
|
|
35.3
|
|
Operating lease
right-of-use assets
|
|
66.8
|
|
|
75.8
|
|
Deferred
taxes
|
|
299.7
|
|
|
302.8
|
|
Goodwill,
net
|
|
151.1
|
|
|
114.8
|
|
Investment in Persol
Holdings
|
|
—
|
|
|
264.3
|
|
Investment in equity
affiliate
|
|
—
|
|
|
123.4
|
|
Other
assets
|
|
403.2
|
|
|
389.1
|
|
Total noncurrent
assets
|
|
948.6
|
|
|
1,305.5
|
|
|
|
|
|
|
|
|
Total
Assets
|
$
|
2,663.8
|
|
$
|
2,894.2
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
Short-term
borrowings
|
$
|
0.7
|
|
$
|
—
|
|
Accounts payable
and accrued liabilities
|
|
723.3
|
|
|
687.2
|
|
Operating lease
liabilities
|
|
14.7
|
|
|
17.5
|
|
Accrued payroll
and related taxes
|
|
315.8
|
|
|
318.4
|
|
Accrued workers'
compensation and other claims
|
|
22.9
|
|
|
20.8
|
|
Income and other
taxes
|
|
51.4
|
|
|
51.3
|
|
Total current
liabilities
|
|
1,128.8
|
|
|
1,095.2
|
|
|
|
|
|
|
|
|
Noncurrent
Liabilities
|
|
|
|
|
|
|
Operating lease
liabilities
|
|
55.0
|
|
|
61.4
|
|
Accrued payroll and
related taxes
|
|
—
|
|
|
57.6
|
|
Accrued workers'
compensation and other claims
|
|
40.7
|
|
|
37.0
|
|
Accrued
retirement benefits
|
|
174.1
|
|
|
220.0
|
|
Other long-term
liabilities
|
|
11.0
|
|
|
86.8
|
|
Total noncurrent
liabilities
|
|
280.8
|
|
|
462.8
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
Common
stock
|
|
38.5
|
|
|
40.1
|
|
Treasury
stock
|
|
(20.1)
|
|
|
(15.1)
|
|
Paid-in
capital
|
|
28.0
|
|
|
23.9
|
|
Earnings
invested in the business
|
|
1,216.3
|
|
|
1,315.0
|
|
Accumulated
other comprehensive income (loss)
|
|
(8.5)
|
|
|
(27.7)
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
1,254.2
|
|
|
1,336.2
|
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
$
|
2,663.8
|
|
$
|
2,894.2
|
|
|
|
|
|
|
|
|
Statistics:
|
|
|
|
|
|
|
Working
Capital
|
$
|
586.4
|
|
$
|
493.5
|
|
Current
Ratio
|
|
1.5
|
|
|
1.5
|
|
Debt-to-capital
%
|
|
0.1
|
%
|
|
0.0
|
%
|
Global Days Sales
Outstanding
|
|
61
|
|
|
60
|
|
Year-to-Date Free
Cash Flow
|
$
|
(88.3)
|
|
$
|
73.8
|
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
FOR THE 52 WEEKS
ENDED JANUARY 1, 2023 AND JANUARY 2, 2022
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
2022
|
|
2021
|
Cash flows from
operating activities:
|
|
|
|
|
Net earnings
(loss)
|
$
|
(62.5)
|
$
|
156.1
|
Adjustments to
reconcile net earnings to net cash from operating
activities:
|
|
|
|
|
Goodwill
impairment charge
|
|
41.0
|
|
—
|
Deferred income
taxes
|
|
(72.1)
|
|
21.6
|
Loss on
disposal
|
|
18.7
|
|
—
|
Depreciation
and amortization
|
|
33.4
|
|
29.8
|
Operating lease
asset amortization
|
|
18.5
|
|
21.2
|
Provision for
credit losses and sales allowances
|
|
1.5
|
|
1.6
|
Stock-based
compensation
|
|
7.8
|
|
5.1
|
(Gain) loss on
investment in Persol Holdings
|
|
67.2
|
|
(121.8)
|
Loss on
cumulative translation adjustment reversal
|
|
20.4
|
|
—
|
Gain on foreign
currency remeasurement
|
|
(5.5)
|
|
—
|
Gain on
insurance settlement
|
|
—
|
|
(19.0)
|
Gain on sale of
assets
|
|
(6.2)
|
|
—
|
Equity in net
(earnings) loss of PersolKelly Pte. Ltd.
|
|
(0.8)
|
|
(5.4)
|
Other,
net
|
|
3.3
|
|
6.0
|
Changes in operating
assets and liabilities, net of acquisitions
|
|
(141.0)
|
|
(10.2)
|
Net cash
(used in) from operating activities
|
|
(76.3)
|
|
85.0
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Capital
expenditures
|
|
(12.0)
|
|
(11.2)
|
Proceeds from sale of
assets
|
|
10.1
|
|
—
|
Acquisition of
companies, net of cash received
|
|
(143.1)
|
|
(213.0)
|
Cash disposed from sale
of Russia, net of proceeds
|
|
(6.0)
|
|
—
|
Proceeds from sale of
Persol Holdings investment
|
|
196.9
|
|
—
|
Proceeds from sale of
equity method investment
|
|
119.5
|
|
—
|
Proceeds from
company-owned life insurance
|
|
1.5
|
|
12.2
|
Proceeds from
insurance settlement
|
|
—
|
|
19.0
|
Proceeds (payments)
related to loans to equity affiliate
|
|
—
|
|
5.9
|
Proceeds from equity
securities
|
|
—
|
|
5.0
|
Other investing
activities
|
|
0.6
|
|
1.4
|
Net cash
from (used in) investing activities
|
|
167.5
|
|
(180.7)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Net change in
short-term borrowings
|
|
0.8
|
|
(0.2)
|
Financing lease
payments
|
|
(1.4)
|
|
(1.5)
|
Dividend
payments
|
|
(10.6)
|
|
(4.0)
|
Payments of tax
withholding for stock awards
|
|
(0.9)
|
|
(0.6)
|
Buyback of common
shares
|
|
(27.2)
|
|
—
|
Purchase of treasury
stock
|
|
(7.8)
|
|
—
|
Contingent
consideration payments
|
|
(3.3)
|
|
(1.6)
|
Other financing
activities
|
|
(0.2)
|
|
(0.2)
|
Net cash
used in financing activities
|
|
(50.6)
|
|
(8.1)
|
|
|
|
|
|
Effect of exchange
rates on cash, cash equivalents and restricted cash
|
|
2.3
|
|
(4.8)
|
|
|
|
|
|
Net change in cash,
cash equivalents and restricted cash
|
|
42.9
|
|
(108.6)
|
Cash, cash
equivalents and restricted cash at beginning of year
|
|
119.5
|
|
228.1
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash at end of year
|
$
|
162.4
|
$
|
119.5
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
REVENUE FROM
SERVICES
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
CC %
|
|
|
|
2022
|
|
2021
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
|
|
|
|
|
|
United
States
|
$
|
925.0
|
$
|
908.6
|
|
1.8
|
%
|
1.8
|
%
|
Canada
|
|
45.5
|
|
38.1
|
|
19.6
|
|
28.8
|
|
Puerto Rico
|
|
27.6
|
|
25.5
|
|
8.2
|
|
8.2
|
|
Mexico
|
|
14.1
|
|
10.6
|
|
32.7
|
|
25.4
|
|
Total Americas
Region
|
|
1,012.2
|
|
982.8
|
|
3.0
|
|
3.3
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
|
|
|
Switzerland
|
|
57.3
|
|
61.0
|
|
(6.0)
|
|
(1.8)
|
|
France
|
|
48.6
|
|
55.0
|
|
(11.6)
|
|
(1.1)
|
|
Portugal
|
|
43.7
|
|
37.3
|
|
17.3
|
|
31.1
|
|
Italy
|
|
15.0
|
|
18.2
|
|
(18.0)
|
|
(8.6)
|
|
United
Kingdom
|
|
11.9
|
|
16.4
|
|
(27.6)
|
|
(17.2)
|
|
Russia
|
|
—
|
|
32.9
|
|
NM
|
|
NM
|
|
Other
|
|
35.6
|
|
35.5
|
|
0.1
|
|
13.9
|
|
Total Europe
Region
|
|
212.1
|
|
256.3
|
|
(17.2)
|
|
(8.7)
|
|
|
|
|
|
|
|
|
|
|
|
Total Asia-Pacific
Region
|
|
9.5
|
|
11.2
|
|
(15.0)
|
|
(6.9)
|
|
|
|
|
|
|
|
|
|
|
|
Total Kelly
Services, Inc.
|
$
|
1,233.8
|
$
|
1,250.3
|
|
(1.3)
|
%
|
0.7
|
%
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
REVENUE FROM
SERVICES
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
December Year to
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
CC %
|
|
|
|
2022
|
|
2021
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
|
|
|
|
|
|
United
States
|
$
|
3,671.5
|
$
|
3,513.4
|
|
4.5
|
%
|
4.5
|
%
|
Canada
|
|
168.2
|
|
155.0
|
|
8.6
|
|
12.9
|
|
Puerto Rico
|
|
112.4
|
|
102.1
|
|
10.1
|
|
10.1
|
|
Mexico
|
|
46.5
|
|
92.7
|
|
(49.9)
|
|
(50.5)
|
|
Total Americas
Region
|
|
3,998.6
|
|
3,863.2
|
|
3.5
|
|
3.7
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
|
|
|
Switzerland
|
|
222.8
|
|
222.2
|
|
0.3
|
|
4.7
|
|
France
|
|
199.4
|
|
223.1
|
|
(10.6)
|
|
0.3
|
|
Portugal
|
|
169.5
|
|
158.2
|
|
7.1
|
|
20.4
|
|
Italy
|
|
69.3
|
|
74.2
|
|
(6.7)
|
|
4.7
|
|
Russia
|
|
63.4
|
|
132.2
|
|
(52.1)
|
|
(51.5)
|
|
United
Kingdom
|
|
57.1
|
|
68.3
|
|
(16.4)
|
|
(7.0)
|
|
Other
|
|
143.2
|
|
128.8
|
|
11.2
|
|
26.1
|
|
Total Europe
Region
|
|
924.7
|
|
1,007.0
|
|
(8.2)
|
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
Total Asia-Pacific
Region
|
|
42.1
|
|
39.5
|
|
6.6
|
|
13.8
|
|
|
|
|
|
|
|
|
|
|
|
Total Kelly
Services, Inc.
|
$
|
4,965.4
|
$
|
4,909.7
|
|
1.1
|
%
|
3.2
|
%
|
KELLY
SERVICES, INC. AND SUBSIDIARIES
|
RECONCILIATION
OF NON-GAAP MEASURES
|
FOURTH
QUARTER
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
|
|
2022
|
|
2021
|
SG&A
Expenses:
|
As
Reported
|
|
Adjusted
|
Professional &
Industrial
|
$
66.4
|
|
$
70.8
|
Science, Engineering
& Technology
|
53.5
|
|
49.2
|
Education
|
21.4
|
|
15.6
|
Outsourcing &
Consulting
|
38.0
|
|
33.5
|
International
|
33.3
|
|
35.5
|
Corporate
|
23.6
|
|
22.0
|
Total
Company
|
$
236.2
|
|
$
226.6
|
|
2022
|
|
2021
|
Earnings (Loss) from
Operations:
|
As
Reported
|
|
Gain on sale
of assets(3)
|
|
Goodwill
impairment
charge(5)
|
|
Adjusted
|
|
Adjusted
|
Professional &
Industrial
|
$
4.9
|
|
$
—
|
|
$
—
|
|
$
4.9
|
|
$
11.5
|
Science, Engineering
& Technology
|
18.2
|
|
—
|
|
—
|
|
18.2
|
|
16.9
|
Education
|
9.7
|
|
—
|
|
—
|
|
9.7
|
|
5.5
|
Outsourcing &
Consulting
|
(6.3)
|
|
—
|
|
10.3
|
|
4.0
|
|
4.5
|
International
|
0.8
|
|
—
|
|
—
|
|
0.8
|
|
3.0
|
Corporate
|
(23.6)
|
|
—
|
|
—
|
|
(23.6)
|
|
(22.0)
|
Gain on sale of
assets
|
0.9
|
|
(0.9)
|
|
—
|
|
—
|
|
—
|
Total
Company
|
$
4.6
|
|
$
(0.9)
|
|
$
10.3
|
|
$
14.0
|
|
$
19.4
|
KELLY
SERVICES, INC. AND SUBSIDIARIES
|
RECONCILIATION
OF NON-GAAP MEASURES
|
FOURTH
QUARTER
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
2021
|
SG&A
Expenses:
|
As
Reported
|
|
Restructuring(6)
|
|
Adjusted
|
Professional &
Industrial
|
$
70.8
|
|
$
—
|
|
$
70.8
|
Science, Engineering
& Technology
|
49.2
|
|
—
|
|
49.2
|
Education
|
15.6
|
|
—
|
|
15.6
|
Outsourcing &
Consulting
|
33.5
|
|
—
|
|
33.5
|
International
|
36.7
|
|
(1.2)
|
|
35.5
|
Corporate
|
24.9
|
|
(2.9)
|
|
22.0
|
Total
Company
|
$
230.7
|
|
$
(4.1)
|
|
$
226.6
|
|
|
2021
|
Earnings (Loss) from
Operations:
|
As
Reported
|
|
Restructuring(6)
|
|
Adjusted
|
Professional &
Industrial
|
$
11.5
|
|
$
—
|
|
$
11.5
|
Science, Engineering
& Technology
|
16.9
|
|
—
|
|
16.9
|
Education
|
5.5
|
|
—
|
|
5.5
|
Outsourcing &
Consulting
|
4.5
|
|
—
|
|
4.5
|
International
|
1.8
|
|
1.2
|
|
3.0
|
Corporate
|
(24.9)
|
|
2.9
|
|
(22.0)
|
Total
Company
|
$
15.3
|
|
$
4.1
|
|
$
19.4
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP MEASURES
|
DECEMBER YEAR TO
DATE
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
|
|
2022
|
|
2021
|
SG&A
Expenses:
|
As
Reported
|
|
Adjusted
|
Professional &
Industrial
|
$
270.5
|
|
$
278.6
|
Science, Engineering
& Technology
|
214.9
|
|
180.2
|
Education
|
81.8
|
|
62.1
|
Outsourcing &
Consulting
|
149.8
|
|
122.7
|
International
|
132.5
|
|
137.7
|
Corporate
|
94.0
|
|
85.3
|
Total
Company
|
$
943.5
|
|
$
866.6
|
|
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
|
$
32.0
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
32.0
|
|
$
31.4
|
Science, Engineering
& Technology
|
82.1
|
|
—
|
|
—
|
|
—
|
|
82.1
|
|
73.7
|
Education
|
18.5
|
|
—
|
|
—
|
|
—
|
|
18.5
|
|
3.0
|
Outsourcing &
Consulting
|
(21.2)
|
|
—
|
|
—
|
|
41.0
|
|
19.8
|
|
18.7
|
International
|
9.9
|
|
—
|
|
—
|
|
—
|
|
9.9
|
|
11.1
|
Corporate
|
(94.0)
|
|
—
|
|
—
|
|
—
|
|
(94.0)
|
|
(85.3)
|
Loss on
disposal
|
(18.7)
|
|
—
|
|
18.7
|
|
—
|
|
—
|
|
—
|
Gain on sale of
assets
|
6.2
|
|
(6.2)
|
|
—
|
|
—
|
|
—
|
|
—
|
Total
Company
|
$
14.8
|
|
$
(6.2)
|
|
$
18.7
|
|
$
41.0
|
|
$
68.3
|
|
$
52.6
|
KELLY
SERVICES, INC. AND SUBSIDIARIES
|
RECONCILIATION
OF NON-GAAP MEASURES
|
DECEMBER YEAR TO
DATE
|
(UNAUDITED)
|
(In millions of
dollars)
|
|
|
|
2021
|
SG&A
Expenses:
|
As
Reported
|
|
Restructuring(6)
|
|
Adjusted
|
Professional &
Industrial
|
$
278.6
|
|
$
—
|
|
$
278.6
|
Science, Engineering
& Technology
|
180.2
|
|
—
|
|
180.2
|
Education
|
62.1
|
|
—
|
|
62.1
|
Outsourcing &
Consulting
|
122.7
|
|
—
|
|
122.7
|
International
|
138.9
|
|
(1.2)
|
|
137.7
|
Corporate
|
88.1
|
|
(2.8)
|
|
85.3
|
Total
Company
|
$
870.6
|
|
$
(4.0)
|
|
$
866.6
|
|
|
2021
|
Earnings (Loss) from
Operations:
|
As
Reported
|
|
Restructuring(6)
|
|
Adjusted
|
Professional &
Industrial
|
$
31.4
|
|
$
—
|
|
$
31.4
|
Science, Engineering
& Technology
|
73.7
|
|
—
|
|
73.7
|
Education
|
3.0
|
|
—
|
|
3.0
|
Outsourcing &
Consulting
|
18.7
|
|
—
|
|
18.7
|
International
|
9.9
|
|
1.2
|
|
11.1
|
Corporate
|
(88.1)
|
|
2.8
|
|
(85.3)
|
Total
Company
|
$
48.6
|
|
$
4.0
|
|
$
52.6
|
KELLY SERVICES, INC.
AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP MEASURES
|
(UNAUDITED)
|
(In millions of dollars
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
|
December Year to
Date
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Income tax expense
(benefit)
|
|
$
5.2
|
|
$
16.1
|
|
$
(7.9)
|
|
$
35.1
|
Taxes on investment in
Persol Holdings(1)
|
|
—
|
|
(15.3)
|
|
18.4
|
|
(37.3)
|
Taxes on foreign
currency matters(2)
|
|
—
|
|
—
|
|
(1.5)
|
|
—
|
Taxes on gain on sale
of assets(3)
|
|
(0.3)
|
|
—
|
|
(1.6)
|
|
—
|
Taxes on loss on
disposal(4)
|
|
—
|
|
—
|
|
—
|
|
—
|
Taxes on goodwill
impairment charge(5)
|
|
1.8
|
|
—
|
|
7.1
|
|
—
|
Taxes on restructuring
charges(6)
|
|
—
|
|
1.0
|
|
—
|
|
1.0
|
Taxes on gain on
insurance settlement(7)
|
|
—
|
|
(4.8)
|
|
—
|
|
(4.8)
|
Adjusted income tax
expense (benefit)
|
|
$
6.7
|
|
$
(3.0)
|
|
$
14.5
|
|
$
(6.0)
|
|
|
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
|
December Year to
Date
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net earnings
(loss)
|
|
$
(0.9)
|
|
$
71.7
|
|
$
(62.5)
|
|
$
156.1
|
(Gain) loss on
investment in Persol Holdings, net of
taxes(1)
|
|
—
|
|
(34.7)
|
|
48.8
|
|
(84.5)
|
Loss on foreign
currency matters, net of taxes(2)
|
|
—
|
|
—
|
|
16.4
|
|
—
|
Gain on sale of assets,
net of taxes(3)
|
|
(0.6)
|
|
—
|
|
(4.6)
|
|
—
|
Loss on disposal, net
of taxes(4)
|
|
—
|
|
—
|
|
18.7
|
|
—
|
Goodwill impairment
charge, net of taxes(5)
|
|
8.5
|
|
—
|
|
33.9
|
|
—
|
Restructuring charges,
net of taxes(6)
|
|
—
|
|
3.1
|
|
—
|
|
3.0
|
Gain on insurance
settlement, net of taxes(7)
|
|
—
|
|
(14.2)
|
|
—
|
|
(14.2)
|
Adjusted net
earnings
|
|
$
7.0
|
|
$
25.9
|
|
$
50.7
|
|
$
60.4
|
|
|
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
|
December Year to
Date
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
Per
Share
|
|
Per
Share
|
Net earnings
(loss)
|
|
$
(0.02)
|
|
$
1.80
|
|
$
(1.64)
|
|
$
3.91
|
(Gain) loss on
investment in Persol Holdings, net of
taxes(1)
|
|
—
|
|
(0.87)
|
|
1.28
|
|
(2.12)
|
Loss on foreign
currency matters, net of taxes(2)
|
|
—
|
|
—
|
|
0.43
|
|
—
|
Gain on sale of assets,
net of taxes(3)
|
|
(0.02)
|
|
—
|
|
(0.12)
|
|
—
|
Loss on disposal, net
of taxes(4)
|
|
—
|
|
—
|
|
0.49
|
|
—
|
Goodwill impairment
charge, net of taxes(5)
|
|
0.23
|
|
—
|
|
0.89
|
|
—
|
Restructuring charges,
net of taxes(6)
|
|
—
|
|
0.08
|
|
—
|
|
0.07
|
Gain on insurance
settlement, net of taxes(7)
|
|
—
|
|
(0.36)
|
|
—
|
|
(0.36)
|
Adjusted net
earnings
|
|
$
0.18
|
|
$
0.65
|
|
$
1.33
|
|
$
1.51
|
|
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)
|
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
|
December Year to
Date
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net earnings
(loss)
|
$
(0.9)
|
|
$
71.7
|
|
$
(62.5)
|
|
$
156.1
|
Other (income) expense,
net(2)
|
0.3
|
|
(0.4)
|
|
(1.6)
|
|
3.6
|
Income tax expense
(benefit)
|
5.2
|
|
16.1
|
|
(7.9)
|
|
35.1
|
Depreciation and
amortization
|
10.1
|
|
8.3
|
|
37.3
|
|
31.5
|
EBITDA
|
14.7
|
|
95.7
|
|
(34.7)
|
|
226.3
|
Equity in net
(earnings) loss of affiliate
|
—
|
|
(3.1)
|
|
(0.8)
|
|
(5.4)
|
(Gain) loss on
investment in Persol Holdings(1)
|
—
|
|
(50.0)
|
|
67.2
|
|
(121.8)
|
Loss on foreign
currency matters(2)
|
—
|
|
—
|
|
20.4
|
|
—
|
Gain on sale of
assets(3)
|
(0.9)
|
|
—
|
|
(6.2)
|
|
—
|
Loss on
disposal(4)
|
—
|
|
—
|
|
18.7
|
|
—
|
Goodwill impairment
charge(5)
|
10.3
|
|
—
|
|
41.0
|
|
—
|
Restructuring(6)
|
—
|
|
4.1
|
|
—
|
|
4.0
|
Gain on insurance
settlement(7)
|
—
|
|
(19.0)
|
|
—
|
|
(19.0)
|
Adjusted
EBITDA
|
$
24.1
|
|
$
27.7
|
|
$
105.6
|
|
$
84.1
|
Adjusted EBITDA
margin
|
2.0 %
|
|
2.2 %
|
|
2.1 %
|
|
1.7 %
|
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,
the 2021 restructuring charges and the 2021 gain on insurance
settlement 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 real property in the fourth quarter of 2022,
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 interim impairment tests the Company performed
related to RocketPower due to triggering events 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.
(7) Gain on insurance settlement
represents a payment received in the fourth quarter of 2021 related
to the settlement of claims under a representations and warranties
insurance policy purchased by the Company in connection with the
acquisition of Softworld.
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SOURCE Kelly Services, Inc.