Kelly (Nasdaq: KELYA) (Nasdaq: KELYB), a leading specialty talent
solutions provider, today announced results for the second quarter
of 2020.
Peter Quigley, president and chief executive officer, announced
revenue for the second quarter of 2020 totaled $1.0 billion, a
28.7% decline, or 27.7% in constant currency, compared to the
corresponding quarter of 2019. Revenues declined as a result
of lower demand during the quarter as customers reacted to the
COVID-19 crisis.
Earnings from operations for the second quarter of 2020 totaled
$11.1 million, compared to the $34.8 million reported for the
second quarter of 2019. The 2020 second quarter results include an
adjustment to restructuring charges, and the second quarter of 2019
results included an adjustment to restructuring charges and a $12.3
million gain on sale of assets. On an adjusted basis, earnings from
operations were $10.9 million compared to $21.9 million in the
corresponding quarter of 2019.
Diluted earnings per share in the second quarter of 2020 were
$1.04 compared to earnings per share of $2.12 in the second quarter
of 2019. Included in the earnings per share in the second quarter
of 2020 is a non-cash gain, net of tax, on Kelly’s investment in
Persol Holdings common stock of $0.52. Included in the earnings per
share in the second quarter of 2019 is $1.07 from a non-cash gain
per share on Kelly’s investment in Persol Holdings common stock,
net of tax, gain on sale of assets, net of tax of $0.23, and a
$0.01 per share adjustment to restructuring charges, net of tax. On
an adjusted basis, earnings per share were $0.51 for the second
quarter of 2020 compared to $0.81 for the corresponding quarter of
2019.
“The impact of COVID-19 continued throughout the second quarter
as closures and widespread uncertainty resulted in reduced customer
demand and lower top-line growth,” stated Quigley. “Amid this
unprecedented environment, Kelly initiated several quick and
decisive actions to protect its profitability and liquidity and
captured available upside in resilient, high-margin areas of our
business. While we continue to closely manage the impact of the
pandemic, we’re making steady progress on our strategy toward
specialization. We stayed on schedule in deploying our new front
office technology and we’re now organized as five specialty
businesses based on the skill sets modern organizations need to
grow and thrive. I believe these are important steps in setting the
stage for a more profitable and resilient portfolio in the
post-pandemic world. I’m proud that Kelly’s teams have continued to
advance our strategy during this stressful time while taking care
of our talent and customers with speed and agility.”
In conjunction with its second 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 9:00
a.m. (ET) on August 6 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 August 6, 2020 at (866) 207-1041 (toll-free) and (402)
970-0847 (caller-paid). The access code is 7745119#. 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, the recent novel
coronavirus (COVID-19) outbreak, competitive market pressures
including pricing and technology introductions and disruptions,
changing market and economic conditions, our ability to achieve our
business strategy, the risk of damage to our brand, the risk our
intellectual property assets could be infringed upon or
compromised, our ability to successfully develop new service
offerings, our exposure to risks associated with services outside
traditional staffing, including business process outsourcing and
services connecting talent to independent work, our increasing
dependency on third parties for the execution of critical
functions, the risks associated with past and future acquisitions,
exposure to risks associated with investments in equity affiliates
including PersolKelly Pte. Ltd., 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, 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, 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 sustain critical business applications through our key
data centers, our ability to effectively implement and manage our
information technology projects, our ability to maintain adequate
financial and management processes and controls, risk of potential
impairment charges triggered by adverse industry developments or
operational circumstances, unexpected changes in claim trends on
workers’ compensation, unemployment, disability and medical benefit
plans, the impact of changes in laws and regulations (including
federal, state and international tax laws), competition law risks,
the risk of additional tax or unclaimed property liabilities in
excess of our estimates, 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 have no intention to update these statements.
About Kelly®
Kelly, 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 440,000 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 2019 was $5.4 billion. Visit
kellyservices.com and let us help with what’s next for you.
MEDIA CONTACT: |
|
|
ANALYST CONTACT: |
Jane
Stehney |
|
|
James
Polehna |
(248)
574-9800 |
|
|
(248)
244-4586 |
stehnja@kellyservices.com |
|
|
james.polehna@kellyservices.com |
KELLY SERVICES, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF EARNINGS |
FOR THE 13 WEEKS ENDED JUNE 28, 2020 AND JUNE 30,
2019 |
(UNAUDITED) |
(In millions of dollars except per share data) |
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2020 |
|
2019 |
|
Change |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
975.3 |
|
|
$ |
1,367.5 |
|
|
$ |
(392.2 |
) |
|
|
(28.7 |
)% |
|
(27.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
786.1 |
|
|
|
1,123.5 |
|
|
|
(337.4 |
) |
|
|
(30.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
189.2 |
|
|
|
244.0 |
|
|
|
(54.8 |
) |
|
|
(22.5 |
) |
|
(21.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
178.1 |
|
|
|
221.5 |
|
|
|
(43.4 |
) |
|
|
(19.6 |
) |
|
(18.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of assets |
|
— |
|
|
|
(12.3 |
) |
|
|
12.3 |
|
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
operations |
|
11.1 |
|
|
|
34.8 |
|
|
|
(23.7 |
) |
|
|
(68.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on investment in
Persol Holdings |
|
29.6 |
|
|
|
61.2 |
|
|
|
(31.6 |
) |
|
|
(51.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net |
|
2.6 |
|
|
|
0.2 |
|
|
|
2.4 |
|
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before
taxes and equity in net earnings (loss) of affiliate |
|
43.3 |
|
|
|
96.2 |
|
|
|
(52.9 |
) |
|
|
(55.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit) |
|
0.9 |
|
|
|
12.7 |
|
|
|
(11.8 |
) |
|
|
(93.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
before equity in net earnings (loss) of affiliate |
|
42.4 |
|
|
|
83.5 |
|
|
|
(41.1 |
) |
|
|
(49.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings (loss)
of affiliate |
|
(1.3 |
) |
|
|
0.3 |
|
|
|
(1.6 |
) |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss) |
$ |
41.1 |
|
|
$ |
83.8 |
|
|
$ |
(42.7 |
) |
|
|
(51.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share |
$ |
1.04 |
|
|
$ |
2.12 |
|
|
$ |
(1.08 |
) |
|
|
(50.9 |
) |
|
|
|
Diluted earnings
(loss) per share |
$ |
1.04 |
|
|
$ |
2.12 |
|
|
$ |
(1.08 |
) |
|
|
(50.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Staffing fee-based income
(included in revenue from services) |
$ |
7.6 |
|
|
$ |
15.7 |
|
|
$ |
(8.1 |
) |
|
|
(51.5 |
)% |
|
(50.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
19.4 |
% |
|
|
17.8 |
% |
|
|
1.6 |
|
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion rate |
|
5.8 |
|
|
|
14.2 |
|
|
|
(8.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Return: |
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from operations |
|
1.1 |
|
|
|
2.5 |
|
|
|
(1.4 |
) |
|
|
|
|
|
|
Net earnings (loss) |
|
4.2 |
|
|
|
6.1 |
|
|
|
(1.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax rate |
|
2.0 |
% |
|
|
13.2 |
% |
|
|
(11.2 |
) |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of shares
outstanding (millions): |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
39.3 |
|
|
|
39.1 |
|
|
|
|
|
|
|
|
|
Diluted |
|
39.4 |
|
|
|
39.2 |
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF EARNINGS |
FOR THE 26 WEEKS ENDED JUNE 28, 2020 AND JUNE 30,
2019 |
(UNAUDITED) |
(In millions of dollars except per share data) |
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2020 |
|
2019 |
|
Change |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
2,236.4 |
|
|
$ |
2,750.1 |
|
|
$ |
(513.7 |
) |
|
|
(18.7 |
)% |
|
(18.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
1,823.9 |
|
|
|
2,254.5 |
|
|
|
(430.6 |
) |
|
|
(19.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
412.5 |
|
|
|
495.6 |
|
|
|
(83.1 |
) |
|
|
(16.8 |
) |
|
(16.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
397.6 |
|
|
|
456.3 |
|
|
|
(58.7 |
) |
|
|
(12.9 |
) |
|
(12.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill impairment
charge |
|
147.7 |
|
|
|
— |
|
|
|
147.7 |
|
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of assets |
|
(32.1 |
) |
|
|
(12.3 |
) |
|
|
(19.8 |
) |
|
|
(161.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
operations |
|
(100.7 |
) |
|
|
51.6 |
|
|
|
(152.3 |
) |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on investment in
Persol Holdings |
|
(48.2 |
) |
|
|
74.4 |
|
|
|
(122.6 |
) |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net |
|
4.3 |
|
|
|
(0.9 |
) |
|
|
5.2 |
|
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before
taxes and equity in net earnings (loss) of affiliate |
|
(144.6 |
) |
|
|
125.1 |
|
|
|
(269.7 |
) |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit) |
|
(35.3 |
) |
|
|
19.1 |
|
|
|
(54.4 |
) |
|
|
(284.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
before equity in net earnings (loss) of affiliate |
|
(109.3 |
) |
|
|
106.0 |
|
|
|
(215.3 |
) |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings (loss)
of affiliate |
|
(2.8 |
) |
|
|
(0.1 |
) |
|
|
(2.7 |
) |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss) |
$ |
(112.1 |
) |
|
$ |
105.9 |
|
|
$ |
(218.0 |
) |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share |
$ |
(2.86 |
) |
|
$ |
2.69 |
|
|
$ |
(5.55 |
) |
|
|
NM |
|
|
|
|
Diluted earnings
(loss) per share |
$ |
(2.86 |
) |
|
$ |
2.68 |
|
|
$ |
(5.54 |
) |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement income
(included in revenue from services) |
$ |
19.9 |
|
|
$ |
31.6 |
|
|
$ |
(11.7 |
) |
|
|
(37.0 |
)% |
|
(36.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
18.4 |
% |
|
|
18.0 |
% |
|
|
0.4 |
|
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion rate |
|
(24.4 |
) |
|
|
10.4 |
|
|
|
(34.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Return: |
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from operations |
|
(4.5 |
) |
|
|
1.9 |
|
|
|
(6.4 |
) |
|
|
|
|
|
|
Net earnings (loss) |
|
(5.0 |
) |
|
|
3.9 |
|
|
|
(8.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax rate |
|
24.5 |
% |
|
|
15.3 |
% |
|
|
9.2 |
|
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of shares
outstanding (millions): |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
39.2 |
|
|
|
39.0 |
|
|
|
|
|
|
|
|
|
Diluted |
|
39.2 |
|
|
|
39.2 |
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RESULTS OF OPERATIONS BY SEGMENT |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2020 |
|
|
2019 |
|
Change |
|
Change |
|
Americas
Staffing |
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
326.7 |
|
|
$ |
597.6 |
|
|
(45.3 |
)% |
|
|
(44.1 |
)% |
|
Gross profit |
|
63.4 |
|
|
|
108.8 |
|
|
(41.7 |
) |
|
|
(40.9 |
) |
|
SG&A expenses excluding restructuring charges |
|
69.8 |
|
|
|
93.8 |
|
|
(25.5 |
) |
|
|
(24.7 |
) |
|
Restructuring charges |
|
(0.1 |
) |
|
|
(0.6 |
) |
|
(88.3 |
) |
|
|
(88.3 |
) |
|
Total SG&A expenses |
|
69.7 |
|
|
|
93.2 |
|
|
(25.1 |
) |
|
|
(24.3 |
) |
|
Earnings (loss) from operations |
|
(6.3 |
) |
|
|
15.6 |
|
|
NM |
|
|
|
|
|
Earnings (loss) from operations excluding restructuring
charges |
|
(6.4 |
) |
|
|
15.0 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
19.4 |
% |
|
|
18.2 |
% |
|
1.2 |
|
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Talent
Solutions |
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
466.9 |
|
|
$ |
505.9 |
|
|
(7.7 |
)% |
|
|
(7.5 |
)% |
|
Gross profit |
|
103.0 |
|
|
|
99.7 |
|
|
3.3 |
|
|
|
3.8 |
|
|
SG&A expenses excluding restructuring charges |
|
64.3 |
|
|
|
74.3 |
|
|
(13.5 |
) |
|
|
(13.2 |
) |
|
Restructuring charges |
|
(0.1 |
) |
|
|
— |
|
|
NM |
|
|
|
NM |
|
|
Total SG&A expenses |
|
64.2 |
|
|
|
74.3 |
|
|
(13.6 |
) |
|
|
(13.4 |
) |
|
Earnings from operations |
|
38.8 |
|
|
|
25.4 |
|
|
53.3 |
|
|
|
|
|
Earnings from operations excluding restructuring charges |
|
38.7 |
|
|
|
25.4 |
|
|
52.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
22.1 |
% |
|
|
19.7 |
% |
|
2.4 |
|
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Staffing |
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
184.6 |
|
|
$ |
268.1 |
|
|
(31.1 |
)% |
|
|
(29.3 |
)% |
|
Gross profit |
|
23.2 |
|
|
|
36.1 |
|
|
(36.0 |
) |
|
|
(34.3 |
) |
|
Total SG&A expenses |
|
25.1 |
|
|
|
32.6 |
|
|
(23.2 |
) |
|
|
(21.5 |
) |
|
Earnings (loss) from operations |
|
(1.9 |
) |
|
|
3.5 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
12.5 |
% |
|
|
13.5 |
% |
|
(1.0 |
) |
pts. |
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RESULTS OF OPERATIONS BY SEGMENT |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
June Year to Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2020 |
|
|
2019 |
|
Change |
|
Change |
|
Americas
Staffing |
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
860.1 |
|
|
$ |
1,224.1 |
|
|
(29.7 |
)% |
|
|
(29.0 |
)% |
|
Gross profit |
|
157.0 |
|
|
|
226.0 |
|
|
(30.5 |
) |
|
|
(30.1 |
) |
|
SG&A expenses excluding restructuring charges |
|
157.7 |
|
|
|
188.7 |
|
|
(16.4 |
) |
|
|
(16.0 |
) |
|
Restructuring charges |
|
5.5 |
|
|
|
5.7 |
|
|
(2.3 |
) |
|
|
(2.3 |
) |
|
Total SG&A expenses |
|
163.2 |
|
|
|
194.4 |
|
|
(16.0 |
) |
|
|
(15.6 |
) |
|
Earnings (loss) from operations |
|
(6.2 |
) |
|
|
31.6 |
|
|
NM |
|
|
|
|
|
Earnings (loss) from operations excluding restructuring
charges |
|
(0.7 |
) |
|
|
37.3 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
18.3 |
% |
|
|
18.5 |
% |
|
(0.2 |
) |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Talent
Solutions |
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
970.1 |
|
|
$ |
1,006.9 |
|
|
(3.7 |
)% |
|
|
(3.5 |
)% |
|
Gross profit |
|
203.2 |
|
|
|
200.1 |
|
|
1.6 |
|
|
|
1.9 |
|
|
SG&A expenses excluding restructuring charges |
|
137.1 |
|
|
|
149.0 |
|
|
(8.0 |
) |
|
|
(7.7 |
) |
|
Restructuring charges |
|
0.8 |
|
|
|
— |
|
|
NM |
|
|
|
NM |
|
|
Total SG&A expenses |
|
137.9 |
|
|
|
149.0 |
|
|
(7.5 |
) |
|
|
(7.2 |
) |
|
Earnings from operations |
|
65.3 |
|
|
|
51.1 |
|
|
27.8 |
|
|
|
|
|
Earnings from operations excluding restructuring charges |
|
66.1 |
|
|
|
51.1 |
|
|
29.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
20.9 |
% |
|
|
19.9 |
% |
|
1.0 |
|
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Staffing |
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
412.2 |
|
|
$ |
527.0 |
|
|
(21.8 |
)% |
|
|
(20.2 |
)% |
|
Gross profit |
|
53.1 |
|
|
|
70.7 |
|
|
(24.9 |
) |
|
|
(23.3 |
) |
|
SG&A expenses excluding restructuring charges |
|
53.3 |
|
|
|
63.9 |
|
|
(16.6 |
) |
|
|
(15.1 |
) |
|
Restructuring charges |
|
1.1 |
|
|
|
— |
|
|
NM |
|
|
|
NM |
|
|
Total SG&A expenses |
|
54.4 |
|
|
|
63.9 |
|
|
(14.9 |
) |
|
|
(13.4 |
) |
|
Earnings (loss) from operations |
|
(1.3 |
) |
|
|
6.8 |
|
|
NM |
|
|
|
|
|
Earnings (loss) from operations excluding restructuring
charges |
|
(0.2 |
) |
|
|
6.8 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
12.9 |
% |
|
|
13.4 |
% |
|
(0.5 |
) |
pts. |
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
June 28, 2020 |
|
Dec. 29, 2019 |
|
June 30, 2019 |
|
Current
Assets |
|
|
|
|
|
|
|
Cash and equivalents |
$ |
216.2 |
|
|
$ |
25.8 |
|
|
$ |
37.2 |
|
|
Trade accounts receivable, less allowances of $11.2, $12.9, and
$12.1, respectively |
|
1,085.0 |
|
|
|
1,282.2 |
|
|
|
1,273.6 |
|
|
Prepaid expenses and other current assets |
|
76.0 |
|
|
|
76.5 |
|
|
|
82.1 |
|
|
Properties held for sale |
|
— |
|
|
|
21.2 |
|
|
|
— |
|
|
Total current assets |
|
1,377.2 |
|
|
|
1,405.7 |
|
|
|
1,392.9 |
|
|
|
|
|
|
|
|
|
|
Noncurrent
Assets |
|
|
|
|
|
|
|
Property and equipment, net |
|
41.6 |
|
|
|
43.1 |
|
|
|
83.4 |
|
|
Operating lease right-of-use assets |
|
85.8 |
|
|
|
60.4 |
|
|
|
66.9 |
|
|
Deferred taxes |
|
265.9 |
|
|
|
229.1 |
|
|
|
217.5 |
|
|
Goodwill, net |
|
— |
|
|
|
127.8 |
|
|
|
127.8 |
|
|
Investment in Persol Holdings |
|
127.2 |
|
|
|
173.2 |
|
|
|
213.7 |
|
|
Investment in equity affiliate |
|
113.6 |
|
|
|
117.2 |
|
|
|
122.0 |
|
|
Other assets |
|
307.4 |
|
|
|
324.1 |
|
|
|
318.1 |
|
|
Total noncurrent assets |
|
941.5 |
|
|
|
1,074.9 |
|
|
|
1,149.4 |
|
|
|
|
|
|
|
|
|
|
Total
Assets |
$ |
2,318.7 |
|
|
$ |
2,480.6 |
|
|
$ |
2,542.3 |
|
|
|
|
|
|
|
|
|
|
Current
Liabilities |
|
|
|
|
|
|
|
Short-term borrowings |
$ |
0.3 |
|
|
$ |
1.9 |
|
|
$ |
19.3 |
|
|
Accounts payable and accrued liabilities |
|
463.6 |
|
|
|
503.6 |
|
|
|
513.7 |
|
|
Operating lease liabilities |
|
19.5 |
|
|
|
20.1 |
|
|
|
20.3 |
|
|
Accrued payroll and related taxes |
|
210.7 |
|
|
|
267.6 |
|
|
|
283.5 |
|
|
Accrued workers' compensation and other claims |
|
25.6 |
|
|
|
25.7 |
|
|
|
25.1 |
|
|
Income and other taxes |
|
71.7 |
|
|
|
65.2 |
|
|
|
69.2 |
|
|
Total current liabilities |
|
791.4 |
|
|
|
884.1 |
|
|
|
931.1 |
|
|
|
|
|
|
|
|
|
|
Noncurrent
Liabilities |
|
|
|
|
|
|
|
Operating lease liabilities |
|
69.9 |
|
|
|
43.3 |
|
|
|
49.3 |
|
|
Accrued payroll and related taxes |
|
38.4 |
|
|
|
— |
|
|
|
— |
|
|
Accrued workers' compensation and other claims |
|
45.6 |
|
|
|
45.8 |
|
|
|
48.8 |
|
|
Accrued retirement benefits |
|
180.8 |
|
|
|
187.4 |
|
|
|
178.0 |
|
|
Other long-term liabilities |
|
47.0 |
|
|
|
55.5 |
|
|
|
66.9 |
|
|
Total noncurrent
liabilities |
|
381.7 |
|
|
|
332.0 |
|
|
|
343.0 |
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
|
|
|
Common stock |
|
40.1 |
|
|
|
40.1 |
|
|
|
40.1 |
|
|
Treasury stock |
|
(17.3 |
) |
|
|
(20.9 |
) |
|
|
(21.5 |
) |
|
Paid-in capital |
|
20.5 |
|
|
|
22.5 |
|
|
|
23.2 |
|
|
Earnings invested in the business |
|
1,122.8 |
|
|
|
1,238.6 |
|
|
|
1,238.1 |
|
|
Accumulated other comprehensive income (loss) |
|
(20.5 |
) |
|
|
(15.8 |
) |
|
|
(11.7 |
) |
|
Total stockholders'
equity |
|
1,145.6 |
|
|
|
1,264.5 |
|
|
|
1,268.2 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity |
$ |
2,318.7 |
|
|
$ |
2,480.6 |
|
|
$ |
2,542.3 |
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
|
Working Capital |
$ |
585.8 |
|
|
$ |
521.6 |
|
|
$ |
461.8 |
|
|
Current Ratio |
|
1.7 |
|
|
|
1.6 |
|
|
|
1.5 |
|
|
Debt-to-capital % |
|
0.0 |
% |
|
|
0.1 |
% |
|
|
1.5 |
% |
|
Global Days Sales Outstanding |
|
61 |
|
|
|
58 |
|
|
|
57 |
|
|
Year-to-Date Free Cash Flow |
$ |
170.4 |
|
|
$ |
82.2 |
|
|
$ |
64.8 |
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
FOR THE 26 WEEKS ENDED JUNE 28, 2020 AND JUNE 30,
2019 |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
2020 |
|
2019 |
Cash flows from
operating activities: |
|
|
|
|
Net earnings (loss) |
$ |
(112.1 |
) |
|
$ |
105.9 |
|
|
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 |
|
12.0 |
|
|
|
15.6 |
|
|
Operating lease asset amortization |
|
10.5 |
|
|
|
11.5 |
|
|
Provision for bad debts |
|
0.1 |
|
|
|
1.8 |
|
|
Stock-based compensation |
|
2.4 |
|
|
|
5.2 |
|
|
(Gain) loss on investment in Persol Holdings |
|
48.2 |
|
|
|
(74.4 |
) |
|
(Gain) loss on sale of assets |
|
(32.1 |
) |
|
|
(12.3 |
) |
|
Equity in net (earnings) loss of PersolKelly Pte. Ltd. |
|
2.8 |
|
|
|
0.1 |
|
|
Other, net |
|
0.8 |
|
|
|
(0.6 |
) |
|
Changes in operating assets and liabilities, net of
acquisitions |
|
120.8 |
|
|
|
20.7 |
|
|
|
|
|
|
|
Net cash from operating activities |
|
178.1 |
|
|
|
73.5 |
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
Capital expenditures |
|
(7.7 |
) |
|
|
(8.7 |
) |
|
Acquisition of companies, net of cash received |
|
(36.4 |
) |
|
|
(86.4 |
) |
|
Proceeds from sale of assets |
|
55.5 |
|
|
|
13.8 |
|
|
Proceeds from company-owned life insurance |
|
2.3 |
|
|
|
3.0 |
|
|
Other investing activities |
|
(0.4 |
) |
|
|
(1.3 |
) |
|
|
|
|
|
|
Net cash from (used in) investing activities |
|
13.3 |
|
|
|
(79.6 |
) |
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
Net change in short-term borrowings |
|
(1.4 |
) |
|
|
17.1 |
|
|
Financing lease payments |
|
(0.6 |
) |
|
|
— |
|
|
Dividend payments |
|
(3.0 |
) |
|
|
(5.9 |
) |
|
Payments of tax withholding for stock awards |
|
(1.1 |
) |
|
|
(2.3 |
) |
|
Other financing activities |
|
(0.1 |
) |
|
|
(0.3 |
) |
|
|
|
|
|
|
Net cash (used in) from financing activities |
|
(6.2 |
) |
|
|
8.6 |
|
|
|
|
|
|
|
Effect of exchange
rates on cash, cash equivalents and restricted cash |
|
5.7 |
|
|
|
(0.1 |
) |
|
|
|
|
|
|
Net change in cash,
cash equivalents and restricted cash |
|
190.9 |
|
|
|
2.4 |
|
|
Cash, cash equivalents
and restricted cash at beginning of period |
|
31.0 |
|
|
|
40.1 |
|
|
|
|
|
|
|
Cash, cash equivalents
and restricted cash at end of period |
$ |
221.9 |
|
|
$ |
42.5 |
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
REVENUE FROM SERVICES |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter (Americas, International and
GTS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2020 |
|
2019 |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
United States |
$ |
700.1 |
|
$ |
991.3 |
|
|
(29.4 |
)% |
|
(29.4 |
)% |
|
Canada |
|
25.6 |
|
|
33.2 |
|
|
(22.7 |
) |
|
(19.9 |
) |
|
Mexico |
|
22.5 |
|
|
29.7 |
|
|
(24.2 |
) |
|
(7.7 |
) |
|
Puerto Rico |
|
20.0 |
|
|
19.6 |
|
|
1.9 |
|
|
1.9 |
|
|
Brazil |
|
6.1 |
|
|
8.2 |
|
|
(25.1 |
) |
|
(0.1 |
) |
|
Total
Americas |
|
774.3 |
|
|
1,082.0 |
|
|
(28.4 |
) |
|
(27.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
EMEA |
|
|
|
|
|
|
|
|
|
Switzerland |
|
47.4 |
|
|
49.9 |
|
|
(4.9 |
) |
|
(8.6 |
) |
|
France |
|
39.9 |
|
|
64.6 |
|
|
(38.3 |
) |
|
(37.1 |
) |
|
Russia |
|
29.3 |
|
|
28.8 |
|
|
1.4 |
|
|
13.9 |
|
|
Portugal |
|
23.8 |
|
|
46.7 |
|
|
(49.2 |
) |
|
(48.1 |
) |
|
United Kingdom |
|
17.8 |
|
|
30.5 |
|
|
(41.6 |
) |
|
(39.5 |
) |
|
Italy |
|
13.3 |
|
|
20.7 |
|
|
(35.7 |
) |
|
(34.5 |
) |
|
Germany |
|
7.1 |
|
|
9.9 |
|
|
(27.8 |
) |
|
(26.3 |
) |
|
Ireland |
|
4.1 |
|
|
10.9 |
|
|
(61.9 |
) |
|
(61.1 |
) |
|
Other |
|
11.5 |
|
|
16.9 |
|
|
(32.1 |
) |
|
(27.0 |
) |
|
Total
EMEA |
|
194.2 |
|
|
278.9 |
|
|
(30.4 |
) |
|
(28.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total
APAC |
|
6.8 |
|
|
6.6 |
|
|
4.4 |
|
|
10.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Kelly Services,
Inc. |
$ |
975.3 |
|
$ |
1,367.5 |
|
|
(28.7 |
)% |
|
(27.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
REVENUE FROM SERVICES |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
June Year to Date (Americas, International and
GTS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2020 |
|
2019 |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
United States |
$ |
1,628.6 |
|
$ |
2,010.2 |
|
|
(19.0 |
)% |
|
(19.0 |
)% |
|
Canada |
|
58.4 |
|
|
66.2 |
|
|
(11.7 |
) |
|
(10.0 |
) |
|
Mexico |
|
51.2 |
|
|
57.2 |
|
|
(10.4 |
) |
|
(0.5 |
) |
|
Puerto Rico |
|
37.7 |
|
|
38.8 |
|
|
(2.8 |
) |
|
(2.8 |
) |
|
Brazil |
|
15.2 |
|
|
16.7 |
|
|
(8.5 |
) |
|
9.5 |
|
|
Total
Americas |
|
1,791.1 |
|
|
2,189.1 |
|
|
(18.2 |
) |
|
(17.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
EMEA |
|
|
|
|
|
|
|
|
|
France |
|
92.4 |
|
|
128.9 |
|
|
(28.3 |
) |
|
(26.5 |
) |
|
Switzerland |
|
91.6 |
|
|
99.4 |
|
|
(7.8 |
) |
|
(11.0 |
) |
|
Portugal |
|
67.4 |
|
|
91.5 |
|
|
(26.3 |
) |
|
(24.4 |
) |
|
Russia |
|
61.4 |
|
|
54.2 |
|
|
13.1 |
|
|
19.9 |
|
|
United Kingdom |
|
40.1 |
|
|
56.7 |
|
|
(29.3 |
) |
|
(27.5 |
) |
|
Italy |
|
28.0 |
|
|
41.3 |
|
|
(32.2 |
) |
|
(30.4 |
) |
|
Germany |
|
15.1 |
|
|
21.0 |
|
|
(27.9 |
) |
|
(26.0 |
) |
|
Ireland |
|
9.1 |
|
|
21.0 |
|
|
(56.6 |
) |
|
(55.5 |
) |
|
Other |
|
26.7 |
|
|
34.9 |
|
|
(23.6 |
) |
|
(18.6 |
) |
|
Total
EMEA |
|
431.8 |
|
|
548.9 |
|
|
(21.3 |
) |
|
(19.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total
APAC |
|
13.5 |
|
|
12.1 |
|
|
11.7 |
|
|
18.5 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Kelly Services,
Inc. |
$ |
2,236.4 |
|
$ |
2,750.1 |
|
|
(18.7 |
)% |
|
(18.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP MEASURES |
SECOND QUARTER |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
2020 |
|
2019 |
SG&A
Expenses: |
As Reported |
|
Restructuring(4) |
|
Adjusted |
|
Adjusted |
Americas Staffing |
$ |
69.7 |
|
|
$ |
0.1 |
|
|
$ |
69.8 |
|
|
$ |
93.8 |
|
Global Talent Solutions |
64.2 |
|
|
0.1 |
|
|
64.3 |
|
|
74.3 |
|
International Staffing |
25.1 |
|
|
— |
|
|
25.1 |
|
|
32.6 |
|
Corporate |
19.5 |
|
|
— |
|
|
19.5 |
|
|
22.0 |
|
Intersegment |
(0.4 |
) |
|
— |
|
|
(0.4 |
) |
|
(0.6 |
) |
Total Company |
$ |
178.1 |
|
|
$ |
0.2 |
|
|
$ |
178.3 |
|
|
$ |
222.1 |
|
|
2020 |
|
2019 |
Earnings (loss) from
Operations: |
As Reported |
|
Restructuring(4) |
|
Adjusted |
|
Adjusted |
Americas Staffing |
$ |
(6.3 |
) |
|
$ |
(0.1 |
) |
|
$ |
(6.4 |
) |
|
$ |
15.0 |
|
Global Talent Solutions |
38.8 |
|
|
(0.1 |
) |
|
38.7 |
|
|
25.4 |
|
International Staffing |
(1.9 |
) |
|
— |
|
|
(1.9 |
) |
|
3.5 |
|
Corporate |
(19.5 |
) |
|
— |
|
|
(19.5 |
) |
|
(22.0 |
) |
Total Company |
$ |
11.1 |
|
|
$ |
(0.2 |
) |
|
$ |
10.9 |
|
|
$ |
21.9 |
|
|
2019 |
SG&A
Expenses: |
As Reported |
|
Gain on saleof assets(3) |
|
Restructuring(4) |
|
Adjusted |
Americas Staffing |
$ |
93.2 |
|
|
$ |
— |
|
|
$ |
0.6 |
|
|
$ |
93.8 |
|
Global Talent Solutions |
74.3 |
|
|
— |
|
|
— |
|
|
74.3 |
|
International Staffing |
32.6 |
|
|
— |
|
|
— |
|
|
32.6 |
|
Corporate |
22.0 |
|
|
— |
|
|
— |
|
|
22.0 |
|
Intersegment |
(0.6 |
) |
|
— |
|
|
— |
|
|
(0.6 |
) |
Total Company |
$ |
221.5 |
|
|
$ |
— |
|
|
$ |
0.6 |
|
|
$ |
222.1 |
|
|
|
|
|
|
|
|
|
|
2019 |
Earnings (loss) from
Operations: |
As Reported |
|
Gain on saleof assets(3) |
|
Restructuring(4) |
|
Adjusted |
Americas Staffing |
$ |
15.6 |
|
|
$ |
— |
|
|
$ |
(0.6 |
) |
|
$ |
15.0 |
|
Global Talent Solutions |
25.4 |
|
|
— |
|
|
— |
|
|
25.4 |
|
International Staffing |
3.5 |
|
|
— |
|
|
— |
|
|
3.5 |
|
Corporate |
(9.7 |
) |
|
(12.3 |
) |
|
— |
|
|
(22.0 |
) |
Total Company |
$ |
34.8 |
|
|
$ |
(12.3 |
) |
|
$ |
(0.6 |
) |
|
$ |
21.9 |
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP MEASURES |
JUNE YEAR TO DATE |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 |
|
2019 |
SG&A
Expenses: |
As Reported |
|
Goodwill impairment(1) |
|
Gain on saleof assets(3) |
|
Restructuring(4) |
|
Adjusted |
|
Adjusted |
Americas Staffing |
$ |
163.2 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(5.5 |
) |
|
$ |
157.7 |
|
|
$ |
188.7 |
|
Global Talent Solutions |
137.9 |
|
|
— |
|
|
— |
|
|
(0.8 |
) |
|
137.1 |
|
|
149.0 |
|
International Staffing |
54.4 |
|
|
— |
|
|
— |
|
|
(1.1 |
) |
|
53.3 |
|
|
63.9 |
|
Corporate |
42.9 |
|
|
— |
|
|
— |
|
|
(1.1 |
) |
|
41.8 |
|
|
50.2 |
|
Intersegment |
(0.8 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(0.8 |
) |
|
(1.2 |
) |
Total Company |
$ |
397.6 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(8.5 |
) |
|
$ |
389.1 |
|
|
$ |
450.6 |
|
|
2020 |
|
2019 |
Earnings (loss) from
Operations: |
As Reported |
|
Goodwill impairment(1) |
|
Gain on sale of assets(3) |
|
Restructuring(4) |
|
Adjusted |
|
Adjusted |
Americas Staffing |
$ |
(6.2 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
5.5 |
|
|
$ |
(0.7 |
) |
|
$ |
37.3 |
|
Global Talent Solutions |
65.3 |
|
|
— |
|
|
— |
|
|
0.8 |
|
|
66.1 |
|
|
51.1 |
|
International Staffing |
(1.3 |
) |
|
— |
|
|
— |
|
|
1.1 |
|
|
(0.2 |
) |
|
6.8 |
|
Corporate |
(158.5 |
) |
|
147.7 |
|
|
(32.1 |
) |
|
1.1 |
|
|
(41.8 |
) |
|
(50.2 |
) |
Total Company |
$ |
(100.7 |
) |
|
$ |
147.7 |
|
|
$ |
(32.1 |
) |
|
$ |
8.5 |
|
|
$ |
23.4 |
|
|
$ |
45.0 |
|
|
2019 |
SG&A
Expenses: |
As Reported |
|
Gain on saleof assets(3) |
|
Restructuring(4) |
|
Adjusted |
Americas Staffing |
$ |
194.4 |
|
|
$ |
— |
|
|
$ |
(5.7 |
) |
|
$ |
188.7 |
|
Global Talent Solutions |
149.0 |
|
|
— |
|
|
— |
|
|
149.0 |
|
International Staffing |
63.9 |
|
|
— |
|
|
— |
|
|
63.9 |
|
Corporate |
50.2 |
|
|
— |
|
|
— |
|
|
50.2 |
|
Intersegment |
(1.2 |
) |
|
— |
|
|
— |
|
|
(1.2 |
) |
Total Company |
$ |
456.3 |
|
|
$ |
— |
|
|
$ |
(5.7 |
) |
|
$ |
450.6 |
|
|
|
|
|
|
|
|
|
|
2019 |
Earnings (loss) from
Operations: |
As Reported |
|
Gain on saleof assets(3) |
|
Restructuring(4) |
|
Adjusted |
Americas Staffing |
$ |
31.6 |
|
|
$ |
— |
|
|
$ |
5.7 |
|
|
$ |
37.3 |
|
Global Talent Solutions |
51.1 |
|
|
— |
|
|
— |
|
|
51.1 |
|
International Staffing |
6.8 |
|
|
— |
|
|
— |
|
|
6.8 |
|
Corporate |
(37.9 |
) |
|
(12.3 |
) |
|
— |
|
|
(50.2 |
) |
Total Company |
$ |
51.6 |
|
|
$ |
(12.3 |
) |
|
$ |
5.7 |
|
|
$ |
45.0 |
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP MEASURES
(continued) |
(UNAUDITED) |
(In millions of dollars except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
June Year to Date |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Income tax expense (benefit) |
|
$ |
0.9 |
|
|
$ |
12.7 |
|
|
$ |
(35.3 |
) |
|
$ |
19.1 |
|
Taxes on goodwill impairment
charge(1) |
|
— |
|
|
— |
|
|
23.0 |
|
|
— |
|
Taxes on investment in Persol
Holdings(2) |
|
(9.0 |
) |
|
(18.7 |
) |
|
14.8 |
|
|
(22.8 |
) |
Taxes on gain on sale of
assets(3) |
|
— |
|
|
(3.3 |
) |
|
(8.1 |
) |
|
(3.3 |
) |
Taxes on restructuring
charges(4) |
|
— |
|
|
(0.1 |
) |
|
2.2 |
|
|
1.5 |
|
Adjusted income tax expense
(benefit) |
|
$ |
(8.1 |
) |
|
$ |
(9.4 |
) |
|
$ |
(3.4 |
) |
|
$ |
(5.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
June Year to Date |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net earnings (loss) |
|
$ |
41.1 |
|
|
$ |
83.8 |
|
|
$ |
(112.1 |
) |
|
$ |
105.9 |
|
Goodwill impairment charge,
net of taxes(1) |
|
— |
|
|
— |
|
|
124.7 |
|
|
— |
|
(Gain) loss on investment in
Persol Holdings, net of taxes(2) |
|
(20.6 |
) |
|
(42.5 |
) |
|
33.4 |
|
|
(51.6 |
) |
Gain on sale of assets, net of
taxes(3) |
|
— |
|
|
(9.0 |
) |
|
(24.0 |
) |
|
(9.0 |
) |
Restructuring charges, net of
taxes(4) |
|
(0.2 |
) |
|
(0.5 |
) |
|
6.3 |
|
|
4.2 |
|
Adjusted net earnings |
|
$ |
20.3 |
|
|
$ |
31.8 |
|
|
$ |
28.3 |
|
|
$ |
49.5 |
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
June Year to Date |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
Per Share |
|
Per Share |
Net earnings (loss) |
|
$ |
1.04 |
|
|
$ |
2.12 |
|
|
$ |
(2.86 |
) |
|
$ |
2.68 |
|
Goodwill impairment charge,
net of taxes(1) |
|
— |
|
|
— |
|
|
3.18 |
|
|
— |
|
(Gain) loss on investment in
Persol Holdings, net of taxes(2) |
|
(0.52 |
) |
|
(1.07 |
) |
|
0.85 |
|
|
(1.31 |
) |
Gain on sale of assets, net of
taxes(3) |
|
— |
|
|
(0.23 |
) |
|
(0.61 |
) |
|
(0.23 |
) |
Restructuring charges, net of
taxes(4) |
|
— |
|
|
(0.01 |
) |
|
0.16 |
|
|
0.11 |
|
Adjusted net earnings |
|
$ |
0.51 |
|
|
$ |
0.81 |
|
|
$ |
0.72 |
|
|
$ |
1.25 |
|
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
SUBSIDIARIESRECONCILIATION OF NON-GAAP
MEASURES(UNAUDITED)
Management believes that the non-GAAP (Generally Accepted
Accounting Principles) information excluding the 2020 goodwill
impairment charge, the 2020 and 2019 gains and losses on the
investment in Persol Holdings, the 2020 and 2019 gains on sale of
assets, and the 2020 and 2019 restructuring charges, are useful to
understand the Company's fiscal 2020 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.
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 represents the excess of the proceeds over the cost of the
headquarters properties sold during the first quarter of
2020. Gain on sale of assets in 2019 primarily represents the
excess of the proceeds over the cost of an unused parcel of land
located near the Company headquarters sold during the second
quarter of 2019.
(4) Restructuring charges in
2020 represent severance costs and lease terminations in
preparation for the new operating model to be in place in the third
quarter of 2020. Restructuring charges in 2019 represent
severance costs primarily related to U.S. branch-based staffing
operations.
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