Kelly® (Nasdaq: KELYA, KELYB), a leading specialty talent solutions
provider, today announced results for the third quarter of 2021.
Peter Quigley, president and chief executive officer, announced
revenue for the third quarter of 2021 totaled $1.2 billion, a 15.1%
increase compared to the corresponding quarter of 2020. Revenue
improved year-over-year in the quarter reflecting increased
customer demand compared to the COVID-19-impacted prior year
period.
Earnings from operations in the third quarter of 2021 totaled
$9.0 million, compared to a loss of $2.4 million reported in the
third quarter of 2020. Included in the third quarter of 2020 was a
$9.5 million charge related to a customer dispute in Mexico. On an
adjusted basis, earnings from operations improved 25.9%.
Diluted earnings per share in the third quarter of 2021 were
$0.87 compared to $0.42 per share in the third quarter of 2020.
Included in the earnings per share is a non-cash gain per share,
net of tax, on Kelly’s investment in Persol Holdings common stock
of $0.62 in the third quarter of 2021 and $0.29 in the third
quarter of 2020. On an adjusted basis, earnings per share were
$0.25 in the third quarter of 2021 compared to $0.29 in the
corresponding quarter of 2020.
“We’re pleased that all five of our specialty operating segments
delivered organic year-over-year gains in the third quarter,
contributing to solid revenue and GP dollar growth for the
company,” said Quigley, who noted that Kelly has already begun
taking actions to better leverage top-line growth heading into
2022. “Demand for our solutions is strong, and we’re finding
innovative ways to connect talent and clients in a tight labor
market. We’re confident that Kelly’s specialty strategy will
continue to deliver top and bottom-line growth throughout the
recovery and into the post-COVID environment.”
Kelly also reported that on November 10, its board of directors
declared a dividend of $0.05 per share. The dividend is payable on
December 8, 2021, to stockholders of record as of the close of
business on November 24, 2021.
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
5728672After the prompt, please enter
“#”
A recording of the conference call will be available after 2:30
p.m. ET on November 10, 2021, at (866) 207-1041 (toll-free) and
(402) 970-0847 (caller-paid). The access code is 2025741#. 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 recent 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, exposure to risks associated with investments in equity
affiliates including PersolKelly Pte. Ltd., risks associated with
conducting business in foreign countries, including foreign
currency fluctuations, the exposure to potential market and
currency exchange risks relating to our investment in Persol
Holdings, 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 nearly 370,000 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 2020 was $4.5 billion. Visit
kellyservices.com and let us help with what’s next for you.
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 3, 2021 AND SEPTEMBER 27,
2020 |
(UNAUDITED) |
(In millions of dollars except per share data) |
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2021 |
|
2020 |
|
Change |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
1,195.4 |
|
|
$ |
1,038.2 |
|
|
$ |
157.2 |
|
|
15.1 |
% |
|
14.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
966.5 |
|
|
|
847.2 |
|
|
|
119.3 |
|
|
14.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
228.9 |
|
|
|
191.0 |
|
|
|
37.9 |
|
|
19.8 |
|
|
19.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
219.9 |
|
|
|
193.4 |
|
|
|
26.5 |
|
|
13.7 |
|
|
13.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
operations |
|
9.0 |
|
|
|
(2.4 |
) |
|
|
11.4 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on investment in
Persol Holdings |
|
35.5 |
|
|
|
16.8 |
|
|
|
18.7 |
|
|
112.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net |
|
(0.3 |
) |
|
|
(0.7 |
) |
|
|
0.4 |
|
|
50.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before
taxes and equity in net earnings (loss) of affiliate |
|
44.2 |
|
|
|
13.7 |
|
|
|
30.5 |
|
|
222.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit) |
|
11.1 |
|
|
|
(1.2 |
) |
|
|
12.3 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
before equity in net earnings (loss) of affiliate |
|
33.1 |
|
|
|
14.9 |
|
|
|
18.2 |
|
|
122.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings (loss)
of affiliate |
|
1.7 |
|
|
|
1.8 |
|
|
|
(0.1 |
) |
|
(3.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss) |
$ |
34.8 |
|
|
$ |
16.7 |
|
|
$ |
18.1 |
|
|
108.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share |
$ |
0.87 |
|
|
$ |
0.42 |
|
|
$ |
0.45 |
|
|
107.1 |
|
|
|
Diluted earnings
(loss) per share |
$ |
0.87 |
|
|
$ |
0.42 |
|
|
$ |
0.45 |
|
|
107.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
STATISTICS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement revenue
(included in revenue from services) |
$ |
19.7 |
|
|
$ |
9.1 |
|
|
$ |
10.6 |
|
|
118.0 |
% |
|
116.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
19.2 |
% |
|
|
18.4 |
% |
|
|
0.8 |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion rate |
|
3.9 |
% |
|
|
(1.3 |
)% |
|
|
5.2 |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
17.3 |
|
|
$ |
13.2 |
|
|
$ |
4.1 |
|
|
|
|
|
Adjusted EBITDA margin |
|
1.4 |
% |
|
|
1.3 |
% |
|
|
0.1 |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax rate |
|
25.2 |
% |
|
|
(8.5 |
)% |
|
|
33.7 |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of shares
outstanding (millions): |
|
|
|
|
|
|
|
|
|
|
Basic |
|
39.4 |
|
|
|
39.3 |
|
|
|
|
|
|
|
|
Diluted |
|
39.5 |
|
|
|
39.4 |
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF EARNINGS |
FOR THE 39 WEEKS ENDED OCTOBER 3, 2021 AND SEPTEMBER 27,
2020 |
(UNAUDITED) |
(In millions of dollars except per share data) |
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2021 |
|
2020 |
|
Change |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
3,659.4 |
|
|
$ |
3,274.6 |
|
|
$ |
384.8 |
|
|
11.8 |
% |
|
10.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
2,986.2 |
|
|
|
2,671.1 |
|
|
|
315.1 |
|
|
11.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
673.2 |
|
|
|
603.5 |
|
|
|
69.7 |
|
|
11.5 |
|
|
10.1 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
639.9 |
|
|
|
591.0 |
|
|
|
48.9 |
|
|
8.3 |
|
|
7.0 |
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill impairment
charge |
|
— |
|
|
|
147.7 |
|
|
|
(147.7 |
) |
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of assets |
|
— |
|
|
|
(32.1 |
) |
|
|
32.1 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
operations |
|
33.3 |
|
|
|
(103.1 |
) |
|
|
136.4 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on investment in
Persol Holdings |
|
71.8 |
|
|
|
(31.4 |
) |
|
|
103.2 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net |
|
(4.0 |
) |
|
|
3.6 |
|
|
|
(7.6 |
) |
|
(211.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before
taxes and equity in net earnings (loss) of affiliate |
|
101.1 |
|
|
|
(130.9 |
) |
|
|
232.0 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit) |
|
19.0 |
|
|
|
(36.5 |
) |
|
|
55.5 |
|
|
152.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
before equity in net earnings (loss) of affiliate |
|
82.1 |
|
|
|
(94.4 |
) |
|
|
176.5 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings (loss)
of affiliate |
|
2.3 |
|
|
|
(1.0 |
) |
|
|
3.3 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss) |
$ |
84.4 |
|
|
$ |
(95.4 |
) |
|
$ |
179.8 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share |
$ |
2.12 |
|
|
$ |
(2.43 |
) |
|
$ |
4.55 |
|
|
NM |
|
|
|
Diluted earnings
(loss) per share |
$ |
2.12 |
|
|
$ |
(2.43 |
) |
|
$ |
4.55 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement revenue
(included in revenue from services) |
$ |
54.3 |
|
|
$ |
28.9 |
|
|
$ |
25.4 |
|
|
87.8 |
% |
|
84.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
18.4 |
% |
|
|
18.4 |
% |
|
|
— |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion rate |
|
4.9 |
% |
|
|
(17.1 |
)% |
|
|
22.0 |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
56.4 |
|
|
$ |
48.6 |
|
|
$ |
7.8 |
|
|
|
|
|
Adjusted EBITDA margin |
|
1.5 |
% |
|
|
1.5 |
% |
|
|
— |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax rate |
|
18.8 |
% |
|
|
27.9 |
% |
|
|
(9.1 |
) pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of shares
outstanding (millions): |
|
|
|
|
|
|
|
|
|
|
Basic |
|
39.4 |
|
|
|
39.3 |
|
|
|
|
|
|
|
|
Diluted |
|
39.5 |
|
|
|
39.3 |
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RESULTS OF OPERATIONS BY SEGMENT |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2021 |
|
|
2020 |
|
Change |
|
Change |
Professional &
Industrial |
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
452.6 |
|
|
$ |
446.5 |
|
|
1.4 |
% |
|
1.0 |
% |
Gross profit |
|
76.6 |
|
|
|
77.1 |
|
|
(0.5 |
) |
|
(0.9 |
) |
SG&A expenses excluding restructuring charges |
|
69.4 |
|
|
|
65.4 |
|
|
6.2 |
|
|
5.9 |
|
Restructuring charges |
|
— |
|
|
|
(0.1 |
) |
|
NM |
|
|
NM |
|
Total SG&A expenses |
|
69.4 |
|
|
|
65.3 |
|
|
6.2 |
|
|
5.9 |
|
Earnings (loss) from operations |
|
7.2 |
|
|
|
11.8 |
|
|
(38.1 |
) |
|
|
|
Earnings (loss) from operations excluding restructuring
charges |
|
7.2 |
|
|
|
11.7 |
|
|
(38.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
16.9 |
% |
|
|
17.3 |
% |
|
(0.4 |
) pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Science, Engineering
& Technology |
|
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
306.2 |
|
|
$ |
244.0 |
|
|
25.5 |
% |
|
25.3 |
% |
Gross profit |
|
68.1 |
|
|
|
50.7 |
|
|
34.5 |
|
|
34.4 |
|
SG&A expenses excluding restructuring charges |
|
48.4 |
|
|
|
31.3 |
|
|
54.8 |
|
|
54.6 |
|
Restructuring charges |
|
— |
|
|
|
— |
|
|
NM |
|
|
NM |
|
Total SG&A expenses |
|
48.4 |
|
|
|
31.3 |
|
|
54.8 |
|
|
54.6 |
|
Earnings (loss) from operations |
|
19.7 |
|
|
|
19.4 |
|
|
1.7 |
|
|
|
Earnings (loss) from operations excluding restructuring
charges |
|
19.7 |
|
|
|
19.4 |
|
|
1.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
22.3 |
% |
|
|
20.8 |
% |
|
1.5 |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
Education |
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
66.6 |
|
|
$ |
27.5 |
|
|
142.1 |
% |
|
142.1 |
% |
Gross profit |
|
10.0 |
|
|
|
4.1 |
|
|
139.7 |
|
|
139.7 |
|
SG&A expenses excluding restructuring charges |
|
17.0 |
|
|
|
11.6 |
|
|
45.9 |
|
|
45.9 |
|
Restructuring charges |
|
— |
|
|
|
— |
|
|
NM |
|
|
NM |
|
Total SG&A expenses |
|
17.0 |
|
|
|
11.6 |
|
|
46.1 |
|
|
46.1 |
|
Earnings (loss) from operations |
|
(7.0 |
) |
|
|
(7.5 |
) |
|
6.6 |
|
|
|
Earnings (loss) from operations excluding restructuring
charges |
|
(7.0 |
) |
|
|
(7.5 |
) |
|
6.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
15.1 |
% |
|
|
15.2 |
% |
|
(0.1 |
) pts. |
|
|
|
|
|
|
|
|
|
|
|
|
Outsourcing &
Consulting |
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
113.4 |
|
|
$ |
87.9 |
|
|
29.1 |
% |
|
28.6 |
% |
Gross profit |
|
37.3 |
|
|
|
29.1 |
|
|
27.9 |
|
|
26.9 |
|
SG&A expenses excluding restructuring charges |
|
30.7 |
|
|
|
25.4 |
|
|
20.5 |
|
|
19.8 |
|
Restructuring charges |
|
— |
|
|
|
— |
|
|
NM |
|
|
NM |
|
Total SG&A expenses |
|
30.7 |
|
|
|
25.4 |
|
|
20.5 |
|
|
19.7 |
|
Earnings (loss) from operations |
|
6.6 |
|
|
|
3.7 |
|
|
79.1 |
|
|
|
|
Earnings (loss) from operations excluding restructuring
charges |
|
6.6 |
|
|
|
3.7 |
|
|
78.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
32.8 |
% |
|
|
33.1 |
% |
|
(0.3 |
) pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
256.8 |
|
|
$ |
232.4 |
|
|
10.5 |
% |
|
8.8 |
% |
Gross profit |
|
36.9 |
|
|
|
30.0 |
|
|
22.7 |
|
|
21.0 |
|
SG&A expenses excluding restructuring charges |
|
34.5 |
|
|
|
39.9 |
|
|
(13.6 |
) |
|
(14.8 |
) |
Restructuring charges |
|
— |
|
|
|
— |
|
|
NM |
|
|
NM |
|
Total SG&A expenses |
|
34.5 |
|
|
|
39.9 |
|
|
(13.6 |
) |
|
(14.8 |
) |
Earnings (loss) from operations |
|
2.4 |
|
|
|
(9.9 |
) |
|
NM |
|
|
|
|
Earnings (loss) from operations excluding restructuring
charges |
|
2.4 |
|
|
|
(9.9 |
) |
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
14.4 |
% |
|
|
12.9 |
% |
|
1.5 |
pts. |
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RESULTS OF OPERATIONS BY SEGMENT |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
September Year to Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2021 |
|
|
2020 |
|
Change |
|
Change |
Professional &
Industrial |
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
1,386.7 |
|
|
$ |
1,346.7 |
|
|
3.0 |
% |
|
2.5 |
% |
Gross profit |
|
227.7 |
|
|
|
241.1 |
|
|
(5.5 |
) |
|
(6.0 |
) |
SG&A expenses excluding restructuring charges |
|
207.8 |
|
|
|
206.1 |
|
|
0.8 |
|
|
0.5 |
|
Restructuring charges |
|
— |
|
|
|
4.3 |
|
|
NM |
|
|
NM |
|
Total SG&A expenses |
|
207.8 |
|
|
|
210.4 |
|
|
(1.2 |
) |
|
(1.6 |
) |
Earnings (loss) from operations |
|
19.9 |
|
|
|
30.7 |
|
|
(34.9 |
) |
|
|
Earnings (loss) from operations excluding restructuring
charges |
|
19.9 |
|
|
|
35.0 |
|
|
(43.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
16.4 |
% |
|
|
17.9 |
% |
|
(1.5 |
) pts. |
|
|
|
|
|
|
|
|
|
|
|
|
Science, Engineering
& Technology |
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
859.1 |
|
|
$ |
761.5 |
|
|
12.8 |
% |
|
12.6 |
% |
Gross profit |
|
187.8 |
|
|
|
156.0 |
|
|
20.4 |
|
|
20.2 |
|
SG&A expenses excluding restructuring charges |
|
131.0 |
|
|
|
98.6 |
|
|
32.9 |
|
|
32.7 |
|
Restructuring charges |
|
— |
|
|
|
0.5 |
|
|
NM |
|
|
NM |
|
Total SG&A expenses |
|
131.0 |
|
|
|
99.1 |
|
|
32.2 |
|
|
32.0 |
|
Earnings (loss) from operations |
|
56.8 |
|
|
|
56.9 |
|
|
(0.2 |
) |
|
|
|
Earnings (loss) from operations excluding restructuring
charges |
|
56.8 |
|
|
|
57.4 |
|
|
(1.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
21.9 |
% |
|
|
20.5 |
% |
|
1.4 |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education |
|
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
284.1 |
|
|
$ |
195.1 |
|
|
45.6 |
% |
|
45.6 |
% |
Gross profit |
|
44.0 |
|
|
|
28.8 |
|
|
52.5 |
|
|
52.5 |
|
SG&A expenses excluding restructuring charges |
|
46.5 |
|
|
|
36.9 |
|
|
26.0 |
|
|
26.0 |
|
Restructuring charges |
|
— |
|
|
|
0.8 |
|
|
NM |
|
|
NM |
|
Total SG&A expenses |
|
46.5 |
|
|
|
37.7 |
|
|
23.1 |
|
|
23.1 |
|
Earnings (loss) from operations |
|
(2.5 |
) |
|
|
(8.9 |
) |
|
72.1 |
|
|
|
Earnings (loss) from operations excluding restructuring
charges |
|
(2.5 |
) |
|
|
(8.1 |
) |
|
69.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
15.5 |
% |
|
|
14.8 |
% |
|
0.7 |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
Outsourcing &
Consulting |
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
320.0 |
|
|
$ |
261.0 |
|
|
22.6 |
% |
|
21.2 |
% |
Gross profit |
|
103.4 |
|
|
|
87.1 |
|
|
18.7 |
|
|
16.3 |
|
SG&A expenses excluding restructuring charges |
|
89.2 |
|
|
|
79.1 |
|
|
12.7 |
|
|
10.9 |
|
Restructuring charges |
|
— |
|
|
|
— |
|
|
NM |
|
|
NM |
|
Total SG&A expenses |
|
89.2 |
|
|
|
79.1 |
|
|
12.6 |
|
|
10.8 |
|
Earnings (loss) from operations |
|
14.2 |
|
|
|
8.0 |
|
|
79.0 |
|
|
|
|
Earnings (loss) from operations excluding restructuring
charges |
|
14.2 |
|
|
|
8.0 |
|
|
77.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
32.3 |
% |
|
|
33.4 |
% |
|
(1.1 |
) pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
810.1 |
|
|
$ |
710.6 |
|
|
14.0 |
% |
|
9.0 |
% |
Gross profit |
|
110.3 |
|
|
|
90.5 |
|
|
21.8 |
|
|
16.3 |
|
SG&A expenses excluding restructuring charges |
|
102.2 |
|
|
|
100.3 |
|
|
1.8 |
|
|
(2.8 |
) |
Restructuring charges |
|
— |
|
|
|
1.1 |
|
|
NM |
|
|
NM |
|
Total SG&A expenses |
|
102.2 |
|
|
|
101.4 |
|
|
0.7 |
|
|
(3.9 |
) |
Earnings (loss) from operations |
|
8.1 |
|
|
|
(10.9 |
) |
|
NM |
|
|
|
|
Earnings (loss) from operations excluding restructuring
charges |
|
8.1 |
|
|
|
(9.8 |
) |
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
13.6 |
% |
|
|
12.7 |
% |
|
0.9 |
pts. |
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
October 3, 2021 |
|
January 3, 2021 |
|
September 27, 2020 |
Current
Assets |
|
|
|
|
|
|
Cash and equivalents |
$ |
43.5 |
|
$ |
223.0 |
|
$ |
248.2 |
|
Trade accounts receivable, less allowances of |
|
|
|
|
|
|
$12.3, $13.3, and $11.4, respectively |
|
1,423.9 |
|
|
1,265.2 |
|
|
1,111.4 |
|
Prepaid expenses and other current assets |
|
71.0 |
|
|
61.4 |
|
|
71.4 |
|
Total current assets |
|
1,538.4 |
|
|
1,549.6 |
|
|
1,431.0 |
|
|
|
|
|
|
|
|
Noncurrent
Assets |
|
|
|
|
|
|
Property and equipment, net |
|
36.1 |
|
|
41.0 |
|
|
40.8 |
|
Operating lease right-of-use assets |
|
79.3 |
|
|
83.2 |
|
|
84.0 |
|
Deferred taxes |
|
304.0 |
|
|
282.0 |
|
|
273.3 |
|
Goodwill, net |
|
114.8 |
|
|
3.5 |
|
|
— |
|
Investment in Persol Holdings |
|
222.6 |
|
|
164.2 |
|
|
145.8 |
|
Investment in equity affiliate |
|
122.0 |
|
|
118.5 |
|
|
115.6 |
|
Other assets |
|
386.3 |
|
|
319.9 |
|
|
301.2 |
|
Total noncurrent assets |
|
1,265.1 |
|
|
1,012.3 |
|
|
960.7 |
|
|
|
|
|
|
|
|
Total
Assets |
$ |
2,803.5 |
|
$ |
2,561.9 |
|
$ |
2,391.7 |
|
|
|
|
|
|
|
|
Current
Liabilities |
|
|
|
|
|
|
Short-term borrowings |
$ |
— |
|
$ |
0.3 |
|
$ |
0.5 |
|
Accounts payable and accrued liabilities |
|
645.2 |
|
|
536.8 |
|
|
458.4 |
|
Operating lease liabilities |
|
18.4 |
|
|
19.6 |
|
|
19.5 |
|
Accrued payroll and related taxes |
|
334.9 |
|
|
293.0 |
|
|
240.7 |
|
Accrued workers' compensation and other claims |
|
21.1 |
|
|
22.7 |
|
|
25.0 |
|
Income and other taxes |
|
58.4 |
|
|
53.2 |
|
|
52.4 |
|
Total current liabilities |
|
1,078.0 |
|
|
925.6 |
|
|
796.5 |
|
|
|
|
|
|
|
|
Noncurrent
Liabilities |
|
|
|
|
|
|
Operating lease liabilities |
|
64.1 |
|
|
67.5 |
|
|
68.1 |
|
Accrued payroll and related taxes |
|
58.2 |
|
|
58.5 |
|
|
75.7 |
|
Accrued workers' compensation and other claims |
|
39.1 |
|
|
42.2 |
|
|
44.4 |
|
Accrued retirement benefits |
|
213.5 |
|
|
205.8 |
|
|
188.2 |
|
Other long-term liabilities |
|
76.5 |
|
|
59.3 |
|
|
52.7 |
|
Total noncurrent
liabilities |
|
451.4 |
|
|
433.3 |
|
|
429.1 |
|
|
|
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
|
|
Common stock |
|
40.1 |
|
|
40.1 |
|
|
40.1 |
|
Treasury stock |
|
(15.2 |
) |
|
(17.1 |
) |
|
(17.2 |
) |
Paid-in capital |
|
23.2 |
|
|
21.3 |
|
|
20.6 |
|
Earnings invested in the business |
|
1,245.3 |
|
|
1,162.9 |
|
|
1,139.5 |
|
Accumulated other comprehensive income (loss) |
|
(19.3 |
) |
|
(4.2 |
) |
|
(16.9 |
) |
Total stockholders'
equity |
|
1,274.1 |
|
|
1,203.0 |
|
|
1,166.1 |
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity |
$ |
2,803.5 |
|
$ |
2,561.9 |
|
$ |
2,391.7 |
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
Working Capital |
$ |
460.4 |
|
$ |
624.0 |
|
$ |
634.5 |
|
Current Ratio |
|
1.4 |
|
|
1.7 |
|
|
1.8 |
|
Debt-to-capital % |
|
0.0 |
% |
|
0.0 |
% |
|
0.0 |
% |
Global Days Sales Outstanding |
|
63 |
|
|
64 |
|
|
61 |
|
Year-to-Date Free Cash Flow |
$ |
23.5 |
|
$ |
170.5 |
|
$ |
204.2 |
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
FOR THE 39 WEEKS ENDED OCTOBER 3, 2021 AND SEPTEMBER 27,
2020 |
(UNAUDITED) |
(In millions of dollars) |
|
|
2021 |
|
2020 |
Cash flows from
operating activities: |
|
|
|
|
Net earnings (loss) |
$ |
84.4 |
|
$ |
(95.4 |
) |
Adjustments to reconcile net earnings (loss) to net cash from
operating activities: |
|
|
|
|
Goodwill impairment charge |
|
— |
|
|
147.7 |
|
Deferred income taxes on goodwill impairment charge |
|
— |
|
|
(23.0 |
) |
Depreciation and amortization |
|
22.0 |
|
|
18.0 |
|
Operating lease asset amortization |
|
16.0 |
|
|
15.9 |
|
Provision for credit losses and sales allowances |
|
0.8 |
|
|
10.7 |
|
Stock-based compensation |
|
4.0 |
|
|
2.9 |
|
(Gain) loss on investment in Persol Holdings |
|
(71.8 |
) |
|
31.4 |
|
Gain on sale of assets |
|
— |
|
|
(32.1 |
) |
Equity in net (earnings) loss of PersolKelly Pte. Ltd. |
|
(2.3 |
) |
|
1.0 |
|
Other, net |
|
4.6 |
|
|
1.8 |
|
Changes in operating assets and liabilities, net of
acquisitions |
|
(26.7 |
) |
|
137.6 |
|
|
|
|
|
|
Net cash from operating activities |
|
31.0 |
|
|
216.5 |
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
Capital expenditures |
|
(7.5 |
) |
|
(12.3 |
) |
Proceeds from sale of assets |
|
— |
|
|
55.5 |
|
Acquisition of companies, net of cash received |
|
(213.0 |
) |
|
(36.4 |
) |
Proceeds from company-owned life insurance |
|
10.4 |
|
|
2.3 |
|
Proceeds from sale of Brazil, net of cash disposed |
|
— |
|
|
1.2 |
|
Proceeds from loans with equity affiliate |
|
5.8 |
|
|
— |
|
Proceeds from (investment in) equity securities |
|
5.0 |
|
|
(0.2 |
) |
Other investing activities |
|
0.9 |
|
|
0.2 |
|
|
|
|
|
|
Net cash (used in) from investing activities |
|
(198.4 |
) |
|
10.3 |
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
Net change in short-term borrowings |
|
(0.2 |
) |
|
(1.5 |
) |
Financing lease payments |
|
(1.3 |
) |
|
(1.0 |
) |
Dividend payments |
|
(2.0 |
) |
|
(3.0 |
) |
Payments of tax withholding for stock awards |
|
(0.6 |
) |
|
(1.2 |
) |
Contingent consideration payments |
|
(1.6 |
) |
|
— |
|
Other financing
activities |
|
— |
|
|
(0.1 |
) |
|
|
|
|
|
Net cash used in financing activities |
|
(5.7 |
) |
|
(6.8 |
) |
|
|
|
|
|
Effect of exchange
rates on cash, cash equivalents and restricted cash |
|
(3.9 |
) |
|
3.4 |
|
|
|
|
|
|
Net change in cash,
cash equivalents and restricted cash |
|
(177.0 |
) |
|
223.4 |
|
Cash, cash equivalents
and restricted cash at beginning of period |
|
228.1 |
|
|
31.0 |
|
|
|
|
|
|
Cash, cash equivalents
and restricted cash at end of period |
$ |
51.1 |
|
$ |
254.4 |
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
REVENUE FROM SERVICES BY GEOGRAPHY |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2021 |
|
2020 |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
United States |
$ |
851.7 |
|
$ |
740.6 |
|
|
15.0 |
% |
|
15.0 |
% |
Canada |
|
43.3 |
|
|
30.3 |
|
|
42.8 |
|
|
35.1 |
|
Puerto Rico |
|
25.5 |
|
|
18.4 |
|
|
39.2 |
|
|
39.2 |
|
Mexico |
|
14.4 |
|
|
27.4 |
|
|
(47.4 |
) |
|
(52.7 |
) |
Brazil |
|
— |
|
|
1.8 |
|
|
NM |
|
|
NM |
|
Total Americas
Region |
|
934.9 |
|
|
818.5 |
|
|
14.2 |
|
|
13.8 |
|
|
|
|
|
|
|
|
|
|
Europe |
|
|
|
|
|
|
|
|
France |
|
56.3 |
|
|
48.8 |
|
|
15.4 |
|
|
14.3 |
|
Switzerland |
|
54.5 |
|
|
49.6 |
|
|
10.0 |
|
|
9.8 |
|
Portugal |
|
36.6 |
|
|
31.7 |
|
|
15.6 |
|
|
14.6 |
|
Russia |
|
33.0 |
|
|
27.2 |
|
|
21.3 |
|
|
21.1 |
|
Italy |
|
18.5 |
|
|
14.5 |
|
|
27.5 |
|
|
26.4 |
|
United Kingdom |
|
17.2 |
|
|
16.4 |
|
|
4.5 |
|
|
(2.1 |
) |
Germany |
|
9.0 |
|
|
7.0 |
|
|
28.2 |
|
|
27.3 |
|
Ireland |
|
7.4 |
|
|
4.9 |
|
|
49.9 |
|
|
48.8 |
|
Other |
|
17.3 |
|
|
12.0 |
|
|
44.4 |
|
|
43.0 |
|
Total Europe
Region |
|
249.8 |
|
|
212.1 |
|
|
17.8 |
|
|
16.6 |
|
|
|
|
|
|
|
|
|
|
Total Asia-Pacific
Region |
|
10.7 |
|
|
7.6 |
|
|
41.4 |
|
|
39.3 |
|
|
|
|
|
|
|
|
|
|
Total Kelly Services,
Inc. |
$ |
1,195.4 |
|
$ |
1,038.2 |
|
|
15.1 |
% |
|
14.5 |
% |
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
REVENUE FROM SERVICES BY GEOGRAPHY |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
September Year to Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2021 |
|
2020 |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
United States |
$ |
2,604.8 |
|
$ |
2,369.2 |
|
|
9.9 |
% |
|
9.9 |
% |
Canada |
|
116.9 |
|
|
88.7 |
|
|
31.8 |
|
|
21.9 |
|
Mexico |
|
82.1 |
|
|
78.6 |
|
|
4.5 |
|
|
(1.8 |
) |
Puerto Rico |
|
76.6 |
|
|
56.1 |
|
|
36.6 |
|
|
36.6 |
|
Brazil |
|
— |
|
|
17.0 |
|
|
NM |
|
|
NM |
|
Total Americas
Region |
|
2,880.4 |
|
|
2,609.6 |
|
|
10.4 |
|
|
9.8 |
|
|
|
|
|
|
|
|
|
|
Europe |
|
|
|
|
|
|
|
|
France |
|
168.1 |
|
|
141.2 |
|
|
19.0 |
|
|
11.9 |
|
Switzerland |
|
161.2 |
|
|
141.2 |
|
|
14.2 |
|
|
9.6 |
|
Portugal |
|
120.9 |
|
|
99.1 |
|
|
22.0 |
|
|
14.5 |
|
Russia |
|
99.3 |
|
|
88.6 |
|
|
12.1 |
|
|
17.5 |
|
Italy |
|
56.0 |
|
|
42.5 |
|
|
31.7 |
|
|
23.9 |
|
United Kingdom |
|
51.9 |
|
|
56.5 |
|
|
(8.2 |
) |
|
(15.8 |
) |
Germany |
|
24.6 |
|
|
22.1 |
|
|
11.3 |
|
|
5.1 |
|
Ireland |
|
18.8 |
|
|
14.0 |
|
|
34.1 |
|
|
26.8 |
|
Other |
|
49.9 |
|
|
38.7 |
|
|
29.0 |
|
|
21.6 |
|
Total Europe
Region |
|
750.7 |
|
|
643.9 |
|
|
16.6 |
|
|
11.6 |
|
|
|
|
|
|
|
|
|
|
Total Asia-Pacific
Region |
|
28.3 |
|
|
21.1 |
|
|
33.9 |
|
|
24.9 |
|
|
|
|
|
|
|
|
|
|
Total Kelly Services,
Inc. |
$ |
3,659.4 |
|
$ |
3,274.6 |
|
|
11.8 |
% |
|
10.3 |
% |
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP MEASURES |
THIRD QUARTER |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
2021 |
|
2020 |
SG&A
Expenses: |
As Reported |
|
Restructuring(5) |
|
Adjusted |
|
Adjusted |
Professional & Industrial |
$ |
69.4 |
|
|
$ |
— |
|
|
$ |
69.4 |
|
|
$ |
65.4 |
|
Science, Engineering &
Technology |
48.4 |
|
|
— |
|
|
48.4 |
|
|
31.3 |
|
Education |
17.0 |
|
|
— |
|
|
17.0 |
|
|
11.6 |
|
Outsourcing &
Consulting |
30.7 |
|
|
— |
|
|
30.7 |
|
|
25.4 |
|
International |
34.5 |
|
|
— |
|
|
34.5 |
|
|
30.4 |
|
Corporate |
19.9 |
|
|
0.1 |
|
|
20.0 |
|
|
19.9 |
|
Total Company |
$ |
219.9 |
|
|
$ |
0.1 |
|
|
$ |
220.0 |
|
|
$ |
184.0 |
|
|
2021 |
|
2020 |
Earnings (loss) from
Operations: |
As Reported |
|
Restructuring(5) |
|
Adjusted |
|
Adjusted |
Professional & Industrial |
$ |
7.2 |
|
|
$ |
— |
|
|
$ |
7.2 |
|
|
$ |
11.7 |
|
Science, Engineering &
Technology |
19.7 |
|
|
— |
|
|
19.7 |
|
|
19.4 |
|
Education |
(7.0 |
) |
|
— |
|
|
(7.0 |
) |
|
(7.5 |
) |
Outsourcing &
Consulting |
6.6 |
|
|
— |
|
|
6.6 |
|
|
3.7 |
|
International |
2.4 |
|
|
— |
|
|
2.4 |
|
|
(0.4 |
) |
Corporate |
(19.9 |
) |
|
(0.1 |
) |
|
(20.0 |
) |
|
(19.9 |
) |
Total Company |
$ |
9.0 |
|
|
$ |
(0.1 |
) |
|
$ |
8.9 |
|
|
$ |
7.0 |
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP MEASURES |
THIRD QUARTER |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
2020 |
SG&A
Expenses: |
As Reported |
|
Customer Dispute(4) |
|
Restructuring(5) |
|
Adjusted |
Professional & Industrial |
$ |
65.3 |
|
|
$ |
— |
|
|
$ |
0.1 |
|
|
$ |
65.4 |
|
Science, Engineering &
Technology |
31.3 |
|
|
— |
|
|
— |
|
|
31.3 |
|
Education |
11.6 |
|
|
— |
|
|
— |
|
|
11.6 |
|
Outsourcing &
Consulting |
25.4 |
|
|
— |
|
|
— |
|
|
25.4 |
|
International |
39.9 |
|
|
(9.5 |
) |
|
— |
|
|
30.4 |
|
Corporate |
19.9 |
|
|
— |
|
|
— |
|
|
19.9 |
|
Total Company |
$ |
193.4 |
|
|
$ |
(9.5 |
) |
|
$ |
0.1 |
|
|
$ |
184.0 |
|
|
2020 |
Earnings (loss) from
Operations: |
As Reported |
|
Customer Dispute(4) |
|
Restructuring(5) |
|
Adjusted |
Professional & Industrial |
$ |
11.8 |
|
|
$ |
— |
|
|
$ |
(0.1 |
) |
|
$ |
11.7 |
|
Science, Engineering &
Technology |
19.4 |
|
|
— |
|
|
— |
|
|
19.4 |
|
Education |
(7.5 |
) |
|
— |
|
|
— |
|
|
(7.5 |
) |
Outsourcing &
Consulting |
3.7 |
|
|
— |
|
|
— |
|
|
3.7 |
|
International |
(9.9 |
) |
|
9.5 |
|
|
— |
|
|
(0.4 |
) |
Corporate |
(19.9 |
) |
|
— |
|
|
— |
|
|
(19.9 |
) |
Total Company |
$ |
(2.4 |
) |
|
$ |
9.5 |
|
|
$ |
(0.1 |
) |
|
$ |
7.0 |
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP MEASURES |
SEPTEMBER YEAR TO DATE |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
2021 |
|
2020 |
SG&A
Expenses: |
As Reported |
|
Restructuring(5) |
|
Adjusted |
|
Adjusted |
Professional & Industrial |
$ |
207.8 |
|
|
$ |
— |
|
|
$ |
207.8 |
|
|
$ |
206.1 |
|
Science, Engineering &
Technology |
131.0 |
|
|
— |
|
|
131.0 |
|
|
98.6 |
|
Education |
46.5 |
|
|
— |
|
|
46.5 |
|
|
36.9 |
|
Outsourcing &
Consulting |
89.2 |
|
|
— |
|
|
89.2 |
|
|
79.1 |
|
International |
102.2 |
|
|
— |
|
|
102.2 |
|
|
90.8 |
|
Corporate |
63.2 |
|
|
0.1 |
|
|
63.3 |
|
|
61.6 |
|
Total Company |
$ |
639.9 |
|
|
$ |
0.1 |
|
|
$ |
640.0 |
|
|
$ |
573.1 |
|
|
2021 |
|
2020 |
Earnings (loss) from
Operations: |
As Reported |
|
Restructuring(5) |
|
Adjusted |
|
Adjusted |
Professional & Industrial |
$ |
19.9 |
|
|
$ |
— |
|
|
$ |
19.9 |
|
|
$ |
35.0 |
|
Science, Engineering &
Technology |
56.8 |
|
|
— |
|
|
56.8 |
|
|
57.4 |
|
Education |
(2.5 |
) |
|
— |
|
|
(2.5 |
) |
|
(8.1 |
) |
Outsourcing &
Consulting |
14.2 |
|
|
— |
|
|
14.2 |
|
|
8.0 |
|
International |
8.1 |
|
|
— |
|
|
8.1 |
|
|
(0.3 |
) |
Corporate |
(63.2 |
) |
|
(0.1 |
) |
|
(63.3 |
) |
|
(61.6 |
) |
Total Company |
$ |
33.3 |
|
|
$ |
(0.1 |
) |
|
$ |
33.2 |
|
|
$ |
30.4 |
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP MEASURES |
SEPTEMBER YEAR TO DATE |
(UNAUDITED) |
(In millions of dollars) |
|
|
2020 |
SG&A
Expenses: |
As Reported |
|
Customer Dispute(4) |
|
Restructuring(5) |
|
Adjusted |
Professional & Industrial |
$ |
210.4 |
|
|
$ |
— |
|
|
$ |
(4.3 |
) |
|
$ |
206.1 |
|
Science, Engineering &
Technology |
99.1 |
|
|
— |
|
|
(0.5 |
) |
|
98.6 |
|
Education |
37.7 |
|
|
— |
|
|
(0.8 |
) |
|
36.9 |
|
Outsourcing &
Consulting |
79.1 |
|
|
— |
|
|
— |
|
|
79.1 |
|
International |
101.4 |
|
|
(9.5 |
) |
|
(1.1 |
) |
|
90.8 |
|
Corporate |
63.3 |
|
|
— |
|
|
(1.7 |
) |
|
61.6 |
|
Total Company |
$ |
591.0 |
|
|
$ |
(9.5 |
) |
|
$ |
(8.4 |
) |
|
$ |
573.1 |
|
|
2020 |
Earnings (loss) from
Operations: |
As Reported |
|
Goodwill impairment(1) |
|
Gain on saleof
assets(3) |
|
Customer Dispute(4) |
|
Restructuring(5) |
|
Adjusted |
Professional & Industrial |
$ |
30.7 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4.3 |
|
|
$ |
35.0 |
|
Science, Engineering &
Technology |
56.9 |
|
|
— |
|
|
— |
|
|
— |
|
|
0.5 |
|
|
57.4 |
|
Education |
(8.9 |
) |
|
— |
|
|
— |
|
|
— |
|
|
0.8 |
|
|
(8.1 |
) |
Outsourcing &
Consulting |
8.0 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
8.0 |
|
International |
(10.9 |
) |
|
— |
|
|
— |
|
|
9.5 |
|
|
1.1 |
|
|
(0.3 |
) |
Corporate |
(178.9 |
) |
|
147.7 |
|
|
(32.1 |
) |
|
— |
|
|
1.7 |
|
|
(61.6 |
) |
Total Company |
$ |
(103.1 |
) |
|
$ |
147.7 |
|
|
$ |
(32.1 |
) |
|
$ |
9.5 |
|
|
$ |
8.4 |
|
|
$ |
30.4 |
|
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 |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Income tax expense (benefit) |
|
$ |
11.1 |
|
|
$ |
(1.2 |
) |
|
$ |
19.0 |
|
|
$ |
(36.5 |
) |
Taxes on goodwill impairment
charge(1) |
|
— |
|
|
— |
|
|
— |
|
|
23.0 |
|
Taxes on investment in Persol
Holdings(2) |
|
(10.9 |
) |
|
(5.2 |
) |
|
(22.0 |
) |
|
9.6 |
|
Taxes on gain on sale of
assets(3) |
|
— |
|
|
— |
|
|
— |
|
|
(8.1 |
) |
Taxes on customer
dispute(4) |
|
— |
|
|
2.8 |
|
|
— |
|
|
2.8 |
|
Taxes on restructuring
charges(5) |
|
— |
|
|
— |
|
|
— |
|
|
2.2 |
|
Adjusted income tax expense
(benefit) |
|
$ |
0.2 |
|
|
$ |
(3.6 |
) |
|
$ |
(3.0 |
) |
|
$ |
(7.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
September Year to Date |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net earnings (loss) |
|
$ |
34.8 |
|
|
$ |
16.7 |
|
|
$ |
84.4 |
|
|
$ |
(95.4 |
) |
Goodwill impairment charge,
net of taxes(1) |
|
— |
|
|
— |
|
|
— |
|
|
124.7 |
|
(Gain) loss on investment in
Persol Holdings, net of taxes(2) |
|
(24.6 |
) |
|
(11.6 |
) |
|
(49.8 |
) |
|
21.8 |
|
(Gain) loss on sale of assets,
net of taxes(3) |
|
— |
|
|
0.1 |
|
|
— |
|
|
(23.9 |
) |
Customer dispute, net of
taxes(4) |
|
— |
|
|
6.7 |
|
|
— |
|
|
6.7 |
|
Restructuring charges, net of
taxes(5) |
|
(0.1 |
) |
|
(0.1 |
) |
|
(0.1 |
) |
|
6.2 |
|
Adjusted net earnings |
|
$ |
10.1 |
|
|
$ |
11.8 |
|
|
$ |
34.5 |
|
|
$ |
40.1 |
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
September Year to Date |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
Per Share |
|
Per Share |
Net earnings (loss) |
|
$ |
0.87 |
|
|
$ |
0.42 |
|
|
$ |
2.12 |
|
|
$ |
(2.43 |
) |
Goodwill impairment charge,
net of taxes(1) |
|
— |
|
|
— |
|
|
— |
|
|
3.18 |
|
(Gain) loss on investment in
Persol Holdings, net of taxes(2) |
|
(0.62 |
) |
|
(0.29 |
) |
|
(1.25 |
) |
|
0.56 |
|
Gain on sale of assets, net of
taxes(3) |
|
— |
|
|
— |
|
|
— |
|
|
(0.61 |
) |
Customer dispute, net of
taxes(4) |
|
— |
|
|
0.17 |
|
|
— |
|
|
0.17 |
|
Restructuring charges, net of
taxes(5) |
|
— |
|
|
— |
|
|
— |
|
|
0.16 |
|
Adjusted net earnings |
|
$ |
0.25 |
|
|
$ |
0.29 |
|
|
$ |
0.86 |
|
|
$ |
1.02 |
|
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 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net earnings (loss) |
$ |
34.8 |
|
|
$ |
16.7 |
|
|
$ |
84.4 |
|
|
$ |
(95.4 |
) |
Other (income) expense,
net |
0.3 |
|
|
0.7 |
|
|
4.0 |
|
|
(3.6 |
) |
Income tax expense
(benefit) |
11.1 |
|
|
(1.2 |
) |
|
19.0 |
|
|
(36.5 |
) |
Depreciation and
amortization |
8.4 |
|
|
6.2 |
|
|
23.2 |
|
|
18.2 |
|
EBITDA |
54.6 |
|
|
22.4 |
|
|
130.6 |
|
|
(117.3 |
) |
Equity in net (earnings) loss
of affiliate |
(1.7 |
) |
|
(1.8 |
) |
|
(2.3 |
) |
|
1.0 |
|
Goodwill impairment
charge(1) |
— |
|
|
— |
|
|
— |
|
|
147.7 |
|
(Gain) loss on investment in
Persol Holdings(2) |
(35.5 |
) |
|
(16.8 |
) |
|
(71.8 |
) |
|
31.4 |
|
Gain on sale of assets(3) |
— |
|
|
— |
|
|
— |
|
|
(32.1 |
) |
Customer dispute(4) |
— |
|
|
9.5 |
|
|
— |
|
|
9.5 |
|
Restructuring(5) |
(0.1 |
) |
|
(0.1 |
) |
|
(0.1 |
) |
|
8.4 |
|
Adjusted
EBITDA |
$ |
17.3 |
|
|
$ |
13.2 |
|
|
$ |
56.4 |
|
|
$ |
48.6 |
|
Adjusted EBITDA
margin |
1.4 |
% |
|
1.3 |
% |
|
1.5 |
% |
|
1.5 |
% |
KELLY SERVICES, INC. AND
SUBSIDIARIESRECONCILIATION OF NON-GAAP
MEASURES(UNAUDITED)
Management believes that the non-GAAP (Generally Accepted
Accounting Principles) information excluding the 2020 goodwill
impairment charge, the 2021 and 2020 gains and losses on the
investment in Persol Holdings, the 2020 gain on sale of assets, the
2020 customer dispute and the 2020 restructuring charges, are
useful to understand the Company's fiscal 2021 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.
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) The goodwill impairment charge is the result of an interim
impairment test the Company performed during the first quarter of
2020, due to a triggering event caused by a decline in the
Company's common stock price.
(2) The gains and losses on the investment in Persol Holdings
represent the change in fair value of the investment during the
period presented and the related tax expense and benefit.
(3) Gain on sale of assets in 2020 primarily represents the
excess of the proceeds over the cost of the headquarters properties
sold during the first quarter of 2020.
(4) Customer dispute represents a non-cash charge in Mexico to
increase the reserve against a long-term receivable from a former
customer based on an updated probability of loss assessment.
(5) Restructuring charges in 2020 and subsequent adjustments in
2021 represent severance costs and lease terminations in
preparation for the new operating model adopted in the third
quarter of 2020.
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