Kelly Reports Fourth-Quarter 2023 Earnings
- Q4 operating earnings increased by 59% to $22.1 million on an adjusted basis.
- Q4 revenue remained flat, with a 1.3% decrease in constant currency.
- Adjusted EBITDA margin rose by 60 basis points to 2.6% due to reduced operating expenses.
- Company plans to sell European staffing operations in Q1 2024 for EBITDA margin growth.
- Year-over-year revenue trends affected by cautious customer hiring approach and capital spending.
- Earnings per share improved to $0.31 from a loss per share of $0.02 in Q4 2022.
- Board declared a dividend of $0.075 per share payable on March 13, 2024.
- Financial presentation available on Investor Relations page for review.
- Conference call scheduled for February 15, 2024, to discuss results.
- Year-over-year revenue decline due to cautious customer hiring approach.
- Earnings in Q4 2023 include charges related to transformation actions and European staffing operations sale.
- Adjusted earnings improved mainly from lower expenses but offset by unfavorable business mix.
- Lower permanent placement fees led to a decrease in gross profit.
Insights
Kelly's reported increase in adjusted operating earnings to $22.1 million, up 59% from the previous year, indicates a significant improvement in operational efficiency. This is evidenced by the 60 basis point increase in adjusted EBITDA margin to 2.6%, primarily driven by a reduction in operating expenses. The company's focus on business transformation initiatives has been a key factor in achieving these cost savings. However, it is important to note that the flat revenue growth, with a slight decline in constant currency terms, suggests a challenging sales environment, potentially due to cautious customer hiring practices and project initiations.
The sale of European staffing operations is a strategic move that could have multiple financial implications. It is expected to unlock over $100 million in capital and contribute to net margin expansion. This divestiture may streamline the company's focus on more profitable segments and could be a positive indicator for future EBITDA margin growth. However, investors should consider the potential risks associated with the concentration of business post-sale and the impact on overall revenue diversification.
The dividend declaration, while modest at $0.075 per share, reflects the company's commitment to shareholder returns and confidence in its financial stability. It is also indicative of a prudent capital allocation strategy, balancing reinvestment in the business with direct shareholder value creation.
The staffing industry is often seen as a barometer for the broader economy, given its sensitivity to labor market dynamics. Kelly's report of a guarded approach to hiring by customers could be reflective of broader economic uncertainty. This may impact the industry's short-term growth prospects, as companies may delay expansion plans and hiring. However, Kelly's resilience in certain segments like Education and outcome-based specialties provides a more nuanced understanding of market demand. These areas could represent pockets of growth and stability within the staffing sector, even as other areas face headwinds.
The structural expense reductions and growth initiatives mentioned are likely part of a larger strategic pivot towards operational excellence and profitability. The company's ability to drive EBITDA margin expansion in a challenging revenue environment speaks to the effectiveness of these initiatives. This could set a precedent for the industry, where a focus on margins becomes as crucial as top-line growth, especially in uncertain economic climates.
The reported earnings and strategic moves by Kelly reflect broader economic themes such as globalization, currency fluctuations and the shift towards efficiency in business operations. The flat revenue growth in the context of a 1.3% decrease in constant currency terms points to the impact of currency exchange rates on international operations. This highlights the importance of considering foreign exchange risks in international business strategies.
The sale of European staffing operations could be interpreted as a response to potential economic headwinds in Europe or as a strategic refocus on core markets. This move may also be a hedge against currency risk and regional economic volatility. The capital unlocked from this sale could enable Kelly to invest in growth opportunities more aligned with their strategic vision, potentially leading to a more robust business model resilient to economic cycles.
Furthermore, the structural expense reductions are indicative of a trend where companies are seeking to build leaner operations to maintain profitability in the face of revenue pressures. This could be a reflection of a broader shift in the economy towards cost optimization and productivity enhancements as a means to navigate economic uncertainty and maintain competitive advantage.
- Q4 operating earnings of
$7.3 million , or up59% to$22.1 million on an adjusted basis - Q4 revenue was flat; down
1.3% in constant currency - Q4 adjusted EBITDA margin increased 60 basis points to
2.6% driven by meaningful reduction in operating expenses resulting from business transformation initiatives - Company expects Q1 2024 sale of European staffing operations, sustained structural expense reductions and near-term outcome from growth initiatives to drive further expansion of EBITDA margin
TROY, Mich., Feb. 15, 2024 (GLOBE NEWSWIRE) -- Kelly (Nasdaq: KELYA, KELYB), a leading specialty talent solutions provider, today announced results for the fourth quarter of 2023.
Peter Quigley, president and chief executive officer, announced revenue for the fourth quarter of 2023 totaled
Kelly reported operating earnings in the fourth quarter of 2023 of
Earnings per share in the fourth quarter of 2023 were
“In the fourth quarter, we captured steady demand in Education and most of our outcome-based specialties in P&I, which continue to demonstrate resilience amid a challenging operating environment. We remained focused on the future as well, driving significant progress on our transformation initiatives while completing the sale of Kelly’s European staffing operations which we closed in early January, unlocking more than
Kelly also reported that on February 13, its board of directors declared a dividend of
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 15 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 1:30 p.m. ET on February 15, 2024, at (866) 207-1041 (toll-free) and (402) 970-0847 (caller-paid). The access code is 5856971#. The recording will also be available at kellyservices.com during this period.
This release contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about Kelly’s financial expectations, are forward-looking statements. Factors that could cause actual results to differ materially from those contained in this release include, but are not limited to, (i) changing market and economic conditions, (ii) disruption in the labor market and weakened demand for human capital resulting from technological advances, loss of large corporate customers and government contractor requirements, (iii) the impact of laws and regulations (including federal, state and international tax laws), (iv) unexpected changes in claim trends on workers’ compensation, unemployment, disability and medical benefit plans, (v) litigation and other legal liabilities (including tax liabilities) in excess of our estimates, (vi) our ability to achieve our business’s anticipated growth strategies, (vii) our future business development, results of operations and financial condition, (viii) damage to our brands, (ix) dependency on third parties for the execution of critical functions, (x) conducting business in foreign countries, including foreign currency fluctuations, (xi) availability of temporary workers with appropriate skills required by customers, (xii) cyberattacks or other breaches of network or information technology security, and (xiii) other risks, uncertainties and factors discussed in this release and in the Company’s filings with the Securities and Exchange Commission. In some cases, forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “target,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. All information provided in this press release is as of the date of this press release and we undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.
About Kelly®
Kelly Services, Inc. (Nasdaq: KELYA, KELYB) helps companies recruit and manage skilled workers and helps job seekers find great work. Since inventing the staffing industry in 1946, we have become experts in the many industries and local and global markets we serve. With a network of suppliers and partners around the world, we connect more than 500,000 people with work every year. Our suite of outsourcing and consulting services ensures companies have the people they need, when and where they are needed most. Headquartered in Troy, Michigan, we empower businesses and individuals to access limitless opportunities in industries such as science, engineering, technology, education, manufacturing, retail, finance, and energy. Revenue in 2023 was
KLYA-FIN
| MEDIA CONTACT: | ANALYST CONTACT: | ||
| Jane Stehney | Scott Thomas | ||
| (248) 765-6864 | (248) 251-7264 | ||
| stehnja@kellyservices.com | scott.thomas@kellyservices.com |
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||||||||
| CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||||||||||||
| FOR THE 13 WEEKS ENDED DECEMBER 31, 2023 AND JANUARY 1, 2023 | |||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||
| (In millions of dollars except per share data) | |||||||||||||||||||
| % | CC % | ||||||||||||||||||
| 2023 | 2022 | Change | Change | Change | |||||||||||||||
| Revenue from services | $ | 1,232.2 | $ | 1,233.8 | $ | (1.6 | ) | (0.1 | )% | (1.3 | )% | ||||||||
| Cost of services | 994.0 | 983.6 | 10.4 | 1.1 | |||||||||||||||
| Gross profit | 238.2 | 250.2 | (12.0 | ) | (4.7 | ) | (5.7 | ) | |||||||||||
| Selling, general and administrative expenses | 230.9 | 236.2 | (5.3 | ) | (2.2 | ) | (3.3 | ) | |||||||||||
| Goodwill impairment charge | — | 10.3 | (10.3 | ) | NM | ||||||||||||||
| Gain on sale of assets | — | (0.9 | ) | 0.9 | NM | ||||||||||||||
| Earnings from operations | 7.3 | 4.6 | 2.7 | 60.5 | |||||||||||||||
| Unrealized loss on forward contract | (3.6 | ) | — | (3.6 | ) | NM | |||||||||||||
| Other income (expense), net | 1.2 | (0.3 | ) | 1.5 | NM | ||||||||||||||
| Earnings before taxes | 4.9 | 4.3 | 0.6 | 13.5 | |||||||||||||||
| Income tax expense (benefit) | (6.5 | ) | 5.2 | (11.7 | ) | (225.6 | ) | ||||||||||||
| Net earnings (loss) | $ | 11.4 | $ | (0.9 | ) | $ | 12.3 | NM | % | ||||||||||
| Basic earnings (loss) per share | $ | 0.32 | $ | (0.02 | ) | $ | 0.34 | NM | % | ||||||||||
| Diluted earnings (loss) per share | $ | 0.31 | $ | (0.02 | ) | $ | 0.33 | NM | % | ||||||||||
| STATISTICS: | |||||||||||||||||||
| Permanent placement income (included in revenue from services) | $ | 11.7 | $ | 18.4 | $ | (6.7 | ) | (36.5 | )% | (38.0 | )% | ||||||||
| Gross profit rate | 19.3 | % | 20.3 | % | (1.0 | )pts. | |||||||||||||
| Adjusted EBITDA | $ | 32.5 | $ | 24.1 | $ | 8.4 | |||||||||||||
| Adjusted EBITDA margin | 2.6 | % | 2.0 | % | 0.6 | pts. | |||||||||||||
| Effective income tax rate | (134.3 | )% | 121.4 | % | (255.7 | )pts. | |||||||||||||
| Average number of shares outstanding (millions): | |||||||||||||||||||
| Basic | 35.3 | 37.9 | |||||||||||||||||
| Diluted | 35.7 | 37.9 | |||||||||||||||||
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||||||||
| CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||||||||||||
| FOR THE 52 WEEKS ENDED DECEMBER 31, 2023 AND JANUARY 1, 2023 | |||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||
| (In millions of dollars except per share data) | |||||||||||||||||||
| % | CC % | ||||||||||||||||||
| 2023 | 2022 | Change | Change | Change | |||||||||||||||
| Revenue from services | $ | 4,835.7 | $ | 4,965.4 | $ | (129.7 | ) | (2.6 | )% | (3.2 | )% | ||||||||
| Cost of services | 3,874.3 | 3,953.6 | (79.3 | ) | (2.0 | ) | |||||||||||||
| Gross profit | 961.4 | 1,011.8 | (50.4 | ) | (5.0 | ) | (5.3 | ) | |||||||||||
| Selling, general and administrative expenses | 934.7 | 943.5 | (8.8 | ) | (0.9 | ) | (1.4 | ) | |||||||||||
| Asset impairment charge | 2.4 | — | 2.4 | ||||||||||||||||
| Goodwill impairment charge | — | 41.0 | (41.0 | ) | NM | ||||||||||||||
| Loss on disposal | — | 18.7 | (18.7 | ) | NM | ||||||||||||||
| Gain on sale of assets | — | (6.2 | ) | 6.2 | NM | ||||||||||||||
| Earnings from operations | 24.3 | 14.8 | 9.5 | 65.0 | |||||||||||||||
| Loss on investment in Persol Holdings | — | (67.2 | ) | 67.2 | NM | ||||||||||||||
| Loss on currency translation from liquidation of subsidiary | — | (20.4 | ) | 20.4 | NM | ||||||||||||||
| Unrealized loss on forward contract | (3.6 | ) | — | (3.6 | ) | NM | |||||||||||||
| Other income (expense), net | 4.2 | 1.6 | 2.6 | 150.5 | |||||||||||||||
| Earnings (loss) before taxes and equity in net earnings of affiliate | 24.9 | (71.2 | ) | 96.1 | NM | ||||||||||||||
| Income tax expense (benefit) | (11.5 | ) | (7.9 | ) | (3.6 | ) | (45.6 | ) | |||||||||||
| Net earnings (loss) before equity in net earnings of affiliate | 36.4 | (63.3 | ) | 99.7 | NM | ||||||||||||||
| Equity in net earnings of affiliate | — | 0.8 | (0.8 | ) | NM | ||||||||||||||
| Net earnings (loss) | $ | 36.4 | $ | (62.5 | ) | $ | 98.9 | NM | % | ||||||||||
| Basic earnings (loss) per share | $ | 0.99 | $ | (1.64 | ) | $ | 2.63 | NM | % | ||||||||||
| Diluted earnings (loss) per share | $ | 0.98 | $ | (1.64 | ) | $ | 2.62 | NM | % | ||||||||||
| STATISTICS: | |||||||||||||||||||
| Permanent placement income (included in revenue from services) | $ | 59.5 | $ | 89.6 | $ | (30.1 | ) | (33.6 | )% | (34.3 | )% | ||||||||
| Gross profit rate | 19.9 | % | 20.4 | % | (0.5 | ) | pts. | ||||||||||||
| Adjusted EBITDA | $ | 109.4 | $ | 105.6 | $ | 3.8 | |||||||||||||
| Adjusted EBITDA margin | 2.3 | % | 2.1 | % | 0.2 | pts. | |||||||||||||
| Effective income tax rate | (46.5 | )% | 11.1 | % | (57.6 | ) | pts. | ||||||||||||
| Average number of shares outstanding (millions): | |||||||||||||||||||
| Basic | 35.9 | 38.1 | |||||||||||||||||
| Diluted | 36.3 | 38.1 | |||||||||||||||||
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||||
| RESULTS OF OPERATIONS BY SEGMENT | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| (In millions of dollars) | |||||||||||||||
| Fourth Quarter | |||||||||||||||
| 2023 | 2022 | % Change | CC % Change | ||||||||||||
| Professional & Industrial | |||||||||||||||
| Revenue from services | $ | 351.8 | $ | 397.5 | (11.5 | )% | (11.5 | )% | |||||||
| Gross profit | 63.5 | 71.3 | (10.7 | ) | (10.7 | ) | |||||||||
| Total SG&A expenses | 53.2 | 66.4 | (19.9 | ) | (19.9 | ) | |||||||||
| Earnings from operations | 10.3 | 4.9 | 114.9 | ||||||||||||
| Gross profit rate | 18.1 | % | 17.9 | % | 0.2 | pts | . | ||||||||
| Science, Engineering & Technology | |||||||||||||||
| Revenue from services | $ | 287.3 | $ | 302.7 | (5.1 | )% | (5.2 | )% | |||||||
| Gross profit | 64.6 | 71.7 | (10.0 | ) | (10.0 | ) | |||||||||
| Total SG&A expenses | 47.0 | 53.5 | (12.2 | ) | (12.3 | ) | |||||||||
| Earnings from operations | 17.6 | 18.2 | (3.4 | ) | |||||||||||
| Gross profit rate | 22.5 | % | 23.7 | % | (1.2 | ) pts | . | ||||||||
| Education | |||||||||||||||
| Revenue from services | $ | 258.0 | $ | 203.0 | 27.1 | % | 27.1 | % | |||||||
| Gross profit | 37.1 | 31.1 | 19.5 | 19.5 | |||||||||||
| Total SG&A expenses | 23.1 | 21.4 | 7.8 | 7.8 | |||||||||||
| Earnings from operations | 14.0 | 9.7 | 45.4 | ||||||||||||
| Gross profit rate | 14.4 | % | 15.3 | % | (0.9 | ) pts. | |||||||||
| Outsourcing & Consulting | |||||||||||||||
| Revenue from services | $ | 112.3 | $ | 116.0 | (3.1 | )% | (3.3 | )% | |||||||
| Gross profit | 39.1 | 42.0 | (7.1 | ) | (7.6 | ) | |||||||||
| Total SG&A expenses | 37.4 | 38.0 | (1.5 | ) | (2.3 | ) | |||||||||
| Goodwill impairment charge | — | 10.3 | NM | ||||||||||||
| Earnings (loss) from operations | 1.7 | (6.3 | ) | NM | |||||||||||
| Gross profit rate | 34.8 | % | 36.3 | % | (1.5 | ) pts. | |||||||||
| International | |||||||||||||||
| Revenue from services | $ | 227.3 | $ | 216.3 | 5.1 | % | (1.5 | )% | |||||||
| Gross profit | 33.9 | 34.1 | (0.4 | ) | (6.8 | ) | |||||||||
| SG&A expenses excluding restructuring charges | 32.3 | 33.3 | (3.0 | ) | (8.7 | ) | |||||||||
| Restructuring charges | 2.7 | — | NM | NM | |||||||||||
| Total SG&A expenses | 35.0 | 33.3 | 5.0 | (1.3 | ) | ||||||||||
| Earnings (loss) from operations | (1.1 | ) | 0.8 | NM | |||||||||||
| Earnings from operations excluding restructuring charges | 1.6 | 0.8 | 115.1 | ||||||||||||
| Gross profit rate | 14.9 | % | 15.8 | % | (0.9 | ) pts. | |||||||||
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||||
| RESULTS OF OPERATIONS BY SEGMENT | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| (In millions of dollars) | |||||||||||||||
| December Year to Date | |||||||||||||||
| 2023 | 2022 | % Change | CC % Change | ||||||||||||
| Professional & Industrial | |||||||||||||||
| Revenue from services | $ | 1,483.1 | $ | 1,666.2 | (11.0 | )% | (10.6 | )% | |||||||
| Gross profit | 263.9 | 302.5 | (12.7 | ) | (12.3 | ) | |||||||||
| SG&A expenses excluding restructuring charges | 230.3 | 270.2 | (14.8 | ) | (14.6 | ) | |||||||||
| Restructuring charges | 6.7 | 0.3 | NM | NM | |||||||||||
| Total SG&A expenses | 237.0 | 270.5 | (12.4 | ) | (12.2 | ) | |||||||||
| Asset impairment charge | 0.3 | — | NM | ||||||||||||
| Earnings from operations | 26.6 | 32.0 | (16.9 | ) | |||||||||||
| Earnings from operations excluding restructuring charges | 33.3 | 32.3 | 3.2 | ||||||||||||
| Gross profit rate | 17.8 | % | 18.2 | % | (0.4 | ) pts | . | ||||||||
| Science, Engineering & Technology | |||||||||||||||
| Revenue from services | $ | 1,190.8 | $ | 1,265.4 | (5.9 | )% | (5.9 | )% | |||||||
| Gross profit | 272.0 | 297.0 | (8.4 | ) | (8.4 | ) | |||||||||
| Total SG&A expenses | 197.6 | 214.9 | (8.1 | ) | (8.1 | ) | |||||||||
| Asset impairment charge | 0.1 | — | NM | ||||||||||||
| Earnings from operations | 74.3 | 82.1 | (9.5 | ) | |||||||||||
| Gross profit rate | 22.8 | % | 23.5 | % | (0.7 | ) pts. | |||||||||
| Education | |||||||||||||||
| Revenue from services | $ | 841.9 | $ | 636.2 | 32.3 | % | 32.3 | % | |||||||
| Gross profit | 128.7 | 100.3 | 28.4 | 28.4 | |||||||||||
| Total SG&A expenses | 92.4 | 81.8 | 13.0 | 13.0 | |||||||||||
| Earnings from operations | 36.3 | 18.5 | 96.6 | ||||||||||||
| Gross profit rate | 15.3 | % | 15.8 | % | (0.5 | ) pts. | |||||||||
| Outsourcing & Consulting | |||||||||||||||
| Revenue from services | $ | 454.7 | $ | 468.0 | (2.8 | )% | (2.5 | )% | |||||||
| Gross profit | 163.5 | 169.6 | (3.7 | ) | (3.4 | ) | |||||||||
| SG&A expenses excluding restructuring charges | 151.6 | 149.7 | 1.3 | 1.0 | |||||||||||
| Restructuring charges | 3.0 | 0.1 | NM | NM | |||||||||||
| Total SG&A expenses | 154.6 | 149.8 | 3.1 | 2.8 | |||||||||||
| Asset impairment charge | 2.0 | — | NM | ||||||||||||
| Goodwill impairment charge | — | 41.0 | NM | ||||||||||||
| Earnings (loss) from operations | 6.9 | (21.2 | ) | NM | |||||||||||
| Earnings (loss) from operations excluding restructuring charges | 9.9 | (21.1 | ) | NM | |||||||||||
| Gross profit rate | 36.0 | % | 36.3 | % | (0.3 | ) pts. | |||||||||
| International | |||||||||||||||
| Revenue from services | $ | 884.8 | $ | 932.2 | (5.1 | )% | (8.9 | )% | |||||||
| Gross profit | 133.3 | 142.4 | (6.3 | ) | (10.0 | ) | |||||||||
| SG&A expenses excluding restructuring charges | 127.9 | 132.5 | (3.4 | ) | (7.1 | ) | |||||||||
| Restructuring charges | 3.3 | — | NM | NM | |||||||||||
| Total SG&A expenses | 131.2 | 132.5 | (0.9 | ) | (4.7 | ) | |||||||||
| Earnings from operations | 2.1 | 9.9 | (79.1 | ) | |||||||||||
| Earnings from operations excluding restructuring charges | 5.4 | 9.9 | (45.4 | ) | |||||||||||
| Gross profit rate | 15.1 | % | 15.3 | % | (0.2 | ) pts | |||||||||
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| (UNAUDITED) | |||||||
| (In millions of dollars) | |||||||
| Dec. 31, 2023 | Jan. 1, 2023 | ||||||
| Current Assets | |||||||
| Cash and equivalents | $ | 125.8 | $ | 153.7 | |||
| Trade accounts receivable, less allowances of | |||||||
| 1,160.6 | 1,491.6 | ||||||
| Prepaid expenses and other current assets | 48.9 | 69.9 | |||||
| Assets held for sale | 291.3 | — | |||||
| Total current assets | 1,626.6 | 1,715.2 | |||||
| Noncurrent Assets | |||||||
| Property and equipment, net | 24.6 | 27.8 | |||||
| Operating lease right-of-use assets | 47.1 | 66.8 | |||||
| Deferred taxes | 321.1 | 299.7 | |||||
| Goodwill, net | 151.1 | 151.1 | |||||
| Other assets | 411.1 | 403.2 | |||||
| Total noncurrent assets | 955.0 | 948.6 | |||||
| Total Assets | $ | 2,581.6 | $ | 2,663.8 | |||
| Current Liabilities | |||||||
| Short-term borrowings | $ | — | $ | 0.7 | |||
| Accounts payable and accrued liabilities | 646.1 | 723.3 | |||||
| Operating lease liabilities | 8.4 | 14.7 | |||||
| Accrued payroll and related taxes | 156.2 | 315.8 | |||||
| Accrued workers' compensation and other claims | 22.1 | 22.9 | |||||
| Income and other taxes | 17.2 | 51.4 | |||||
| Liabilities held for sale | 169.9 | — | |||||
| Total current liabilities | 1,019.9 | 1,128.8 | |||||
| Noncurrent Liabilities | |||||||
| Operating lease liabilities | 42.9 | 55.0 | |||||
| Accrued workers' compensation and other claims | 40.9 | 40.7 | |||||
| Accrued retirement benefits | 217.4 | 174.1 | |||||
| Other long-term liabilities | 6.8 | 11.0 | |||||
| Total noncurrent liabilities | 308.0 | 280.8 | |||||
| Stockholders' Equity | |||||||
| Common stock | 38.5 | 38.5 | |||||
| Treasury stock | (57.3 | ) | (20.1 | ) | |||
| Paid-in capital | 30.6 | 28.0 | |||||
| Earnings invested in the business | 1,241.7 | 1,216.3 | |||||
| Accumulated other comprehensive income (loss) | 0.2 | (8.5 | ) | ||||
| Total stockholders' equity | 1,253.7 | 1,254.2 | |||||
| Total Liabilities and Stockholders' Equity | $ | 2,581.6 | $ | 2,663.8 | |||
| Statistics: | |||||||
| Working Capital | $ | 606.7 | $ | 586.4 | |||
| Current Ratio | 1.6 | 1.5 | |||||
| Debt-to-capital % | 0.0 | % | 0.1 | % | |||
| Global Days Sales Outstanding | 59 | 61 | |||||
| Year-to-Date Free Cash Flow | $ | 61.4 | $ | (88.3 | ) | ||
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| FOR THE 52 WEEKS ENDED DECEMBER 31, 2023 AND JANUARY 1, 2023 | |||||||
| (UNAUDITED) | |||||||
| (In millions of dollars) | |||||||
| 2023 | 2022 | ||||||
| Cash flows from operating activities: | |||||||
| Net earnings (loss) | $ | 36.4 | $ | (62.5 | ) | ||
| Adjustments to reconcile net earnings to net cash from operating activities: | |||||||
| Asset impairment charge | 2.4 | — | |||||
| Goodwill impairment charge | — | 41.0 | |||||
| Deferred income taxes | (24.9 | ) | (72.1 | ) | |||
| Loss on disposal | — | 18.7 | |||||
| Depreciation and amortization | 33.9 | 33.4 | |||||
| Operating lease asset amortization | 16.2 | 18.5 | |||||
| Provision for credit losses and sales allowances | 1.6 | 1.5 | |||||
| Stock-based compensation | 9.7 | 7.8 | |||||
| Gain on sale of equity securities | (2.0 | ) | — | ||||
| Unrealized loss on forward contract | 3.6 | — | |||||
| Loss on investment in Persol Holdings | — | 67.2 | |||||
| Loss on currency translation from liquidation of subsidiary | — | 20.4 | |||||
| Gain on foreign currency remeasurement | — | (5.5 | ) | ||||
| Gain on sale of assets | — | (6.2 | ) | ||||
| Equity in net earnings of PersolKelly Pte. Ltd. | — | (0.8 | ) | ||||
| Other, net | 1.8 | 3.3 | |||||
| Changes in operating assets and liabilities, net of acquisitions | (2.0 | ) | (141.0 | ) | |||
| Net cash from (used in) operating activities | 76.7 | (76.3 | ) | ||||
| Cash flows from investing activities: | |||||||
| Capital expenditures | (15.3 | ) | (12.0 | ) | |||
| Proceeds from sale of assets | — | 10.1 | |||||
| Acquisition of companies, net of cash received | — | (143.1 | ) | ||||
| 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 | |||||
| Proceeds from equity securities | 2.0 | — | |||||
| Other investing activities | (0.8 | ) | 0.6 | ||||
| Net cash (used in) from investing activities | (14.1 | ) | 167.5 | ||||
| Cash flows from financing activities: | |||||||
| Net change in short-term borrowings | (0.7 | ) | 0.8 | ||||
| Financing lease payments | (1.2 | ) | (1.4 | ) | |||
| Dividend payments | (11.0 | ) | (10.6 | ) | |||
| Payments of tax withholding for stock awards | (1.8 | ) | (0.9 | ) | |||
| Buyback of common shares | — | (27.2 | ) | ||||
| Purchase of treasury stock | (42.2 | ) | (7.8 | ) | |||
| Contingent consideration payments | (2.5 | ) | (3.3 | ) | |||
| Other financing activities | (0.2 | ) | (0.2 | ) | |||
| Net cash used in financing activities | (59.6 | ) | (50.6 | ) | |||
| Effect of exchange rates on cash, cash equivalents and restricted cash | 2.2 | 2.3 | |||||
| Net change in cash, cash equivalents and restricted cash | 5.2 | 42.9 | |||||
| Cash, cash equivalents and restricted cash at beginning of year | 162.4 | 119.5 | |||||
| Cash, cash equivalents and restricted cash at end of year | $ | 167.6 | $ | 162.4 | |||
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||||
| REVENUE FROM SERVICES | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| (In millions of dollars) | |||||||||||||||
| Fourth Quarter | |||||||||||||||
| % | CC % | ||||||||||||||
| 2023 | 2022 | Change | Change | ||||||||||||
| Americas | |||||||||||||||
| United States | $ | 908.7 | $ | 925.0 | (1.7 | )% | (1.7 | )% | |||||||
| Canada | 47.6 | 45.5 | 5.1 | ||||||||||||
| Puerto Rico | 25.9 | 27.6 | (6.2 | ) | (6.2 | ) | |||||||||
| Mexico | 20.6 | 14.1 | 46.9 | 30.9 | |||||||||||
| Total Americas Region | 1,002.8 | 1,012.2 | (0.9 | ) | (1.1 | ) | |||||||||
| Europe | |||||||||||||||
| Switzerland | 58.3 | 57.3 | 1.8 | (6.2 | ) | ||||||||||
| France | 49.4 | 48.6 | 1.4 | (3.7 | ) | ||||||||||
| Portugal | 47.1 | 43.7 | 7.6 | 2.2 | |||||||||||
| Italy | 14.4 | 15.0 | (3.8 | ) | (8.6 | ) | |||||||||
| Other | 49.4 | 47.5 | 4.1 | (1.2 | ) | ||||||||||
| Total Europe Region | 218.6 | 212.1 | 3.0 | (2.9 | ) | ||||||||||
| Total Asia-Pacific Region | 10.8 | 9.5 | 12.9 | 14.9 | |||||||||||
| Total Kelly Services, Inc. | $ | 1,232.2 | $ | 1,233.8 | (0.1 | )% | (1.3 | )% | |||||||
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||||
| REVENUE FROM SERVICES | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| (In millions of dollars) | |||||||||||||||
| December Year to Date | |||||||||||||||
| % | CC % | ||||||||||||||
| 2023 | 2022 | Change | Change | ||||||||||||
| Americas | |||||||||||||||
| United States | $ | 3,555.8 | $ | 3,671.5 | (3.2 | )% | (3.2 | )% | |||||||
| Canada | 189.8 | 168.2 | 12.8 | 17.0 | |||||||||||
| Puerto Rico | 107.0 | 112.4 | (4.8 | ) | (4.8 | ) | |||||||||
| Mexico | 75.7 | 46.5 | 63.1 | 43.6 | |||||||||||
| Total Americas Region | 3,928.3 | 3,998.6 | (1.8 | ) | (1.8 | ) | |||||||||
| Europe | |||||||||||||||
| Switzerland | 224.2 | 222.8 | 0.6 | (5.3 | ) | ||||||||||
| France | 194.4 | 199.4 | (2.5 | ) | (5.1 | ) | |||||||||
| Portugal | 189.4 | 169.5 | 11.7 | 8.7 | |||||||||||
| Italy | 63.9 | 69.3 | (7.8 | ) | (10.0 | ) | |||||||||
| Russia | — | 63.4 | (100.0 | ) | (100.0 | ) | |||||||||
| Other | 191.8 | 200.3 | (4.3 | ) | (5.7 | ) | |||||||||
| Total Europe Region | 863.7 | 924.7 | (6.6 | ) | (9.6 | ) | |||||||||
| Total Asia-Pacific Region | 43.7 | 42.1 | 3.7 | 7.9 | |||||||||||
| Total Kelly Services, Inc. | $ | 4,835.7 | $ | 4,965.4 | (2.6 | )% | (3.2 | )% | |||||||
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||||||||
| RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||
| FOURTH QUARTER | |||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||
| (In millions of dollars) | |||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||
| SG&A Expenses: | As Reported | Transaction Costs(8) | Restructuring(9) | Adjusted | As Reported | ||||||||||||||
| Professional & Industrial | $ | 53.2 | $ | — | $ | 0.6 | $ | 53.8 | $ | 66.4 | |||||||||
| Science, Engineering & Technology | 47.0 | (0.4 | ) | — | 46.6 | 53.5 | |||||||||||||
| Education | 23.1 | — | — | 23.1 | 21.4 | ||||||||||||||
| Outsourcing & Consulting | 37.4 | — | (0.7 | ) | 36.7 | 38.0 | |||||||||||||
| International | 35.0 | (2.7 | ) | — | 32.3 | 33.3 | |||||||||||||
| Corporate | 35.2 | (3.8 | ) | (7.8 | ) | 23.6 | 23.6 | ||||||||||||
| Total Company | $ | 230.9 | $ | (6.9 | ) | $ | (7.9 | ) | $ | 216.1 | $ | 236.2 | |||||||
| 2023 | 2022 | ||||||||||||||||||
| Earnings from Operations: | As Reported | Transaction Costs(8) | Restructuring(9) | Adjusted | Adjusted | ||||||||||||||
| Professional & Industrial | $ | 10.3 | $ | — | $ | (0.6 | ) | $ | 9.7 | $ | 4.9 | ||||||||
| Science, Engineering & Technology | 17.6 | 0.4 | — | 18.0 | 18.2 | ||||||||||||||
| Education | 14.0 | — | — | 14.0 | 9.7 | ||||||||||||||
| Outsourcing & Consulting | 1.7 | — | 0.7 | 2.4 | 4.0 | ||||||||||||||
| International | (1.1 | ) | 2.7 | — | 1.6 | 0.8 | |||||||||||||
| Corporate | (35.2 | ) | 3.8 | 7.8 | (23.6 | ) | (23.6 | ) | |||||||||||
| Total Company | $ | 7.3 | $ | 6.9 | $ | 7.9 | $ | 22.1 | $ | 14.0 | |||||||||
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||||
| RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||
| FOURTH QUARTER | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| (In millions of dollars) | |||||||||||||||
| 2022 | |||||||||||||||
| Earnings from Operations: | As Reported | Gain on sale of assets(3) | Goodwill Impairment charge(6) | Adjusted | |||||||||||
| Professional & Industrial | $ | 4.9 | $ | — | $ | — | $ | 4.9 | |||||||
| Science, Engineering & Technology | 18.2 | — | — | 18.2 | |||||||||||
| Education | 9.7 | — | — | 9.7 | |||||||||||
| Outsourcing & Consulting | (6.3 | ) | — | 10.3 | 4.0 | ||||||||||
| International | 0.8 | — | — | 0.8 | |||||||||||
| Corporate | (23.6 | ) | — | — | (23.6 | ) | |||||||||
| Gain on sale of assets | 0.9 | (0.9 | ) | — | |||||||||||
| Total Company | $ | 4.6 | $ | (0.9 | ) | $ | 10.3 | $ | 14.0 | ||||||
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||||||||
| RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||
| DECEMBER YEAR TO DATE | |||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||
| (In millions of dollars) | |||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||
| SG&A Expenses: | As Reported | Transaction Costs(8) | Restructuring(9) | Adjusted | As Reported | ||||||||||||||
| Professional & Industrial | $ | 237.0 | $ | — | $ | (6.7 | ) | $ | 230.3 | $ | 270.5 | ||||||||
| Science, Engineering & Technology | 197.6 | (0.4 | ) | (1.2 | ) | 196.0 | 214.9 | ||||||||||||
| Education | 92.4 | — | (1.0 | ) | 91.4 | 81.8 | |||||||||||||
| Outsourcing & Consulting | 154.6 | — | (3.0 | ) | 151.6 | 149.8 | |||||||||||||
| International | 131.2 | (2.7 | ) | (0.6 | ) | 127.9 | 132.5 | ||||||||||||
| Corporate | 121.9 | (3.8 | ) | (23.0 | ) | 95.1 | 94.0 | ||||||||||||
| Total Company | $ | 934.7 | $ | (6.9 | ) | $ | (35.5 | ) | $ | 892.3 | $ | 943.5 | |||||||
| 2023 | 2022 | ||||||||||||||||||||||
| Earnings from Operations: | As Reported | Asset impairment(5) | Transaction Costs(8) | Restructuring(9) | Adjusted | Adjusted | |||||||||||||||||
| Professional & Industrial | $ | 26.6 | $ | 0.3 | $ | — | $ | 6.7 | $ | 33.6 | $ | 32.0 | |||||||||||
| Science, Engineering & Technology | 74.3 | 0.1 | 0.4 | 1.2 | 76.0 | 82.1 | |||||||||||||||||
| Education | 36.3 | — | — | 1.0 | 37.3 | 18.5 | |||||||||||||||||
| Outsourcing & Consulting | 6.9 | 2.0 | — | 3.0 | 11.9 | 19.8 | |||||||||||||||||
| International | 2.1 | — | 2.7 | 0.6 | 5.4 | 9.9 | |||||||||||||||||
| Corporate | (121.9 | ) | — | 3.8 | 23.0 | (95.1 | ) | (94.0 | ) | ||||||||||||||
| Total Company | $ | 24.3 | $ | 2.4 | $ | 6.9 | $ | 35.5 | $ | 69.1 | $ | 68.3 | |||||||||||
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||||||||
| RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||
| DECEMBER YEAR TO DATE | |||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||
| (In millions of dollars) | |||||||||||||||||||
| 2022 | |||||||||||||||||||
| Earnings from Operations: | As Reported | Gain on sale of assets(3) | Loss on disposal(4) | Goodwill impairment charge(6) | Adjusted | ||||||||||||||
| Professional & Industrial | $ | 32.0 | $ | — | $ | — | $ | — | $ | 32.0 | |||||||||
| Science, Engineering & Technology | 82.1 | — | — | — | 82.1 | ||||||||||||||
| Education | 18.5 | — | — | — | 18.5 | ||||||||||||||
| Outsourcing & Consulting | (21.2 | ) | — | — | 41.0 | 19.8 | |||||||||||||
| International | 9.9 | — | — | — | 9.9 | ||||||||||||||
| Corporate | (94.0 | ) | — | — | — | (94.0 | ) | ||||||||||||
| 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 | ||||||||
| 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 | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Income tax expense (benefit) | $ | (6.5 | ) | $ | 5.2 | $ | (11.5 | ) | $ | (7.9 | ) | ||||
| Taxes on investment in Persol Holdings(1) | — | — | — | 18.4 | |||||||||||
| Taxes on foreign currency matters(2) | — | — | — | (1.5 | ) | ||||||||||
| Taxes on gain on sale of assets(3) | — | (0.3 | ) | — | (1.6 | ) | |||||||||
| Taxes on loss on disposal(4) | — | — | — | — | |||||||||||
| Taxes on asset impairment charge(5) | — | — | 0.6 | — | |||||||||||
| Taxes on goodwill impairment charge(6) | — | 1.8 | — | 7.1 | |||||||||||
| Taxes on unrealized loss on forward contract(7) | 0.9 | — | 0.9 | — | |||||||||||
| Taxes on transaction costs(8) | 0.5 | — | 0.5 | — | |||||||||||
| Taxes on restructuring charges(9) | 2.0 | — | 8.9 | — | |||||||||||
| Tax adjustments on EMEA staffing transaction(10) | (7.7 | ) | — | (7.7 | ) | — | |||||||||
| Adjusted income tax expense (benefit) | $ | (10.8 | ) | $ | 6.7 | $ | (8.3 | ) | $ | 14.5 | |||||
| Fourth Quarter | December Year to Date | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net earnings (loss) | $ | 11.4 | $ | (0.9 | ) | $ | 36.4 | $ | (62.5 | ) | |||||
| Loss on investment in Persol Holdings, net of taxes(1) | — | — | — | 48.8 | |||||||||||
| Loss on foreign currency matters, net of taxes(2) | — | — | — | 16.4 | |||||||||||
| Gain on sale of assets, net of taxes(3) | — | (0.6 | ) | — | (4.6 | ) | |||||||||
| Loss on disposal, net of taxes(4) | — | — | — | 18.7 | |||||||||||
| Asset impairment charge, net of taxes(5) | — | — | 1.8 | — | |||||||||||
| Goodwill impairment charge, net of taxes(6) | — | 8.5 | — | 33.9 | |||||||||||
| Unrealized loss on forward contract, net of taxes(7) | 2.7 | — | 2.7 | — | |||||||||||
| Transaction costs, net of taxes(8) | 6.4 | — | 6.4 | — | |||||||||||
| Restructuring charges, net of taxes(9) | 5.9 | — | 26.6 | — | |||||||||||
| Tax adjustments on EMEA staffing transaction(10) | 7.7 | — | 7.7 | — | |||||||||||
| Adjusted net earnings | $ | 34.1 | $ | 7.0 | $ | 81.6 | $ | 50.7 | |||||||
| Fourth Quarter | December Year to Date | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Per Share | Per Share | ||||||||||||||
| Net earnings (loss) | $ | 0.31 | $ | (0.02 | ) | $ | 0.98 | $ | (1.64 | ) | |||||
| Loss on investment in Persol Holdings, net of taxes(1) | — | — | — | 1.28 | |||||||||||
| Loss on foreign currency matters, net of taxes(2) | — | — | — | 0.43 | |||||||||||
| Gain on sale of assets, net of taxes(3) | — | (0.02 | ) | — | (0.12 | ) | |||||||||
| Loss on disposal, net of taxes(4) | — | — | — | 0.49 | |||||||||||
| Asset impairment charge, net of taxes(5) | — | — | 0.05 | — | |||||||||||
| Goodwill impairment charge, net of taxes(6) | — | 0.23 | — | 0.89 | |||||||||||
| Unrealized loss on forward contract, net of taxes(7) | 0.07 | — | 0.07 | — | |||||||||||
| Transaction costs, net of taxes(8) | 0.18 | — | 0.17 | — | |||||||||||
| Restructuring charges, net of taxes(9) | 0.16 | — | 0.72 | — | |||||||||||
| Tax adjustments on EMEA staffing transaction(10) | 0.21 | — | 0.21 | — | |||||||||||
| Adjusted net earnings | $ | 0.93 | $ | 0.18 | $ | 2.20 | $ | 1.33 | |||||||
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 | ||||||||||||||
| Adjusted EBITDA: | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Net earnings (loss) | $ | 11.4 | $ | (0.9 | ) | $ | 36.4 | $ | (62.5 | ) | |||||
| Other (income) expense, net(2) | (1.2 | ) | 0.3 | (4.2 | ) | (1.6 | ) | ||||||||
| Income tax expense (benefit) | (6.5 | ) | 5.2 | (11.5 | ) | (7.9 | ) | ||||||||
| Depreciation and amortization | 8.3 | 8.7 | 33.9 | 33.4 | |||||||||||
| EBITDA | 12.0 | 13.3 | 54.6 | (38.6 | ) | ||||||||||
| Equity in net earnings of affiliate | — | — | — | (0.8 | ) | ||||||||||
| Loss on investment in Persol Holdings(1) | — | — | — | 67.2 | |||||||||||
| Loss on foreign currency matters(2) | — | — | — | 20.4 | |||||||||||
| Gain on sale of assets(3) | — | (0.9 | ) | — | (6.2 | ) | |||||||||
| Loss on disposal(4) | — | — | — | 18.7 | |||||||||||
| Asset impairment charge(5) | — | — | 2.4 | — | |||||||||||
| Goodwill impairment charge(6) | — | 10.3 | — | 41.0 | |||||||||||
| Unrealized loss on forward contract(7) | 3.6 | — | 3.6 | — | |||||||||||
| Transaction costs(8) | 6.9 | — | 6.9 | — | |||||||||||
| Restructuring(9) | 7.9 | — | 35.5 | — | |||||||||||
| Other, net(11) | 2.1 | 1.4 | 6.4 | 3.9 | |||||||||||
| Adjusted EBITDA | $ | 32.5 | $ | 24.1 | $ | 109.4 | $ | 105.6 | |||||||
| Adjusted EBITDA margin | 2.6 | % | 2.0 | % | 2.3 | % | 2.1 | % | |||||||
| December Year to Date | |||||||
| Free Cash Flow: | 2023 | 2022 | |||||
| Net cash from (used in) operating activities | $ | 76.7 | $ | (76.3 | ) | ||
| Capital expenditures | (15.3 | ) | (12.0 | ) | |||
| Free Cash Flow | $ | 61.4 | $ | (88.3 | ) | ||
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the 2023 restructuring charges, the 2023 impairment charge, the 2023 unrealized loss on the forward contract, the 2023 transaction costs and tax adjustments related to the sale of our EMEA staffing operations, the 2022 sale of the Persol Holdings investment, the 2022 losses on the fair value changes of the investment in Persol Holdings, the 2022 losses on foreign currency matters, the 2022 gain on sale of assets, the 2022 loss on disposal, and the 2022 goodwill impairment charge, are useful to understand the Company's fiscal 2023 financial performance and increases comparability. Specifically, Management believes that removing the impact of these items allows for a meaningful comparison of current period operating performance with the operating results of prior periods. Management also believes that such measures are used by those analyzing performance of companies in the staffing industry to compare current performance to prior periods and to assess future performance.
Management uses Adjusted EBITDA (adjusted earnings before interest, taxes, depreciation and amortization) and Adjusted EBITDA Margin (percent of total GAAP revenue) which Management believes is useful to compare operating performance compared to prior periods and uses it in conjunction with GAAP measures to assess performance. Our calculation of Adjusted EBITDA may not be consistent with similarly titled measures of other companies and should be used in conjunction with GAAP measurements. Management also uses year-to-date free cash flow (operating cash flows less capital expenditures) to indicate the change in cash balances arising from operating activities, net of working capital needs and expenditures on fixed assets.
These non-GAAP measures may have limitations as analytical tools because they exclude items which can have a material impact on cash flow and earnings per share. As a result, Management considers these measures, along with reported results, when it reviews and evaluates the Company's financial performance. Management believes that these measures provide greater transparency to investors and provide insight into how Management is evaluating the Company's financial performance. Non-GAAP measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
(1) In 2022, the loss on the investment in Persol Holdings represents the change in fair value up until the date of the sale of the investment on February 15, 2022 as well as the loss on the sale of the investment during the period presented and the related tax benefit.
(2) In 2022, the loss on foreign currency matters includes a
(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) Asset impairment charge in 2023 represents the impairment of right-of-use assets related to an unoccupied existing office space lease.
(6) Goodwill impairment charge in 2022 is the result of interim impairment tests the Company performed related to RocketPower due to triggering events caused by changes in market conditions.
(7) Unrealized loss on forward contract represents the mark-to-market losses on the foreign currency forward contract the Company entered into in the fourth quarter of 2023 to mitigate the exchange rate risk associated with the future cash proceeds for the sale of the EMEA staffing operations.
(8) Transaction costs, which includes employee termination costs, incurred in the fourth quarter of 2023 directly related to the sale of the EMEA staffing operations in the first quarter of 2024.
(9) Restructuring charges in 2023 relate to a comprehensive transformation initiative that includes actions that will further streamline the Company's operating model to enhance organizational efficiency and effectiveness. These restructuring charges include
(10) Tax adjustments related to the sale of the EMEA staffing operations include a
(11) Other, net primarily represents amortization of capitalized hosted software implementation costs.
FAQ
What were Kelly's Q4 operating earnings on an adjusted basis?
How did Q4 revenue perform for Kelly?
What is Kelly's plan for the Q1 2024 sale of European staffing operations?
What was the impact on year-over-year revenue trends for Kelly in Q4?
What dividend did Kelly declare per share and when is it payable?
Where can investors find Kelly's financial presentation for review?
When is Kelly's conference call scheduled to discuss results?
