- Q4 operating earnings of
$7.3 million , or up 59% 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
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
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
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
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
About Kelly®
KLYA-FIN
MEDIA CONTACT: | ANALYST CONTACT: | ||
(248) 765-6864 | (248) 251-7264 | ||
stehnja@kellyservices.com | scott.thomas@kellyservices.com |
CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||||||||||||
FOR THE 13 WEEKS ENDED | |||||||||||||||||||
(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 | ) | |||||||||||
— | 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 |
CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||||||||||||
FOR THE 52 WEEKS ENDED | |||||||||||||||||||
(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 | ||||||||||||||||
— | 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 |
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 | ) | |||||||||
— | 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. |
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 | ||||||||||||
— | 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 |
CONSOLIDATED BALANCE SHEETS | |||||||
(UNAUDITED) | |||||||
(In millions of dollars) | |||||||
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 | |||||
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 | |||||
(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 | ) |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
FOR THE 52 WEEKS ENDED | |||||||
(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 | — | |||||
— | 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 | — | (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 | — | (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 |
REVENUE FROM SERVICES | |||||||||||||||
(UNAUDITED) | |||||||||||||||
(In millions of dollars) | |||||||||||||||
Fourth Quarter | |||||||||||||||
% | CC % | ||||||||||||||
2023 | 2022 | Change | Change | ||||||||||||
$ | 908.7 | $ | 925.0 | (1.7 | )% | (1.7 | )% | ||||||||
47.6 | 45.5 | 5.1 | |||||||||||||
25.9 | 27.6 | (6.2 | ) | (6.2 | ) | ||||||||||
20.6 | 14.1 | 46.9 | 30.9 | ||||||||||||
1,002.8 | 1,012.2 | (0.9 | ) | (1.1 | ) | ||||||||||
58.3 | 57.3 | 1.8 | (6.2 | ) | |||||||||||
49.4 | 48.6 | 1.4 | (3.7 | ) | |||||||||||
47.1 | 43.7 | 7.6 | 2.2 | ||||||||||||
14.4 | 15.0 | (3.8 | ) | (8.6 | ) | ||||||||||
Other | 49.4 | 47.5 | 4.1 | (1.2 | ) | ||||||||||
218.6 | 212.1 | 3.0 | (2.9 | ) | |||||||||||
10.8 | 9.5 | 12.9 | 14.9 | ||||||||||||
$ | 1,232.2 | $ | 1,233.8 | (0.1 | )% | (1.3 | )% |
REVENUE FROM SERVICES | |||||||||||||||
(UNAUDITED) | |||||||||||||||
(In millions of dollars) | |||||||||||||||
December Year to Date | |||||||||||||||
% | CC % | ||||||||||||||
2023 | 2022 | Change | Change | ||||||||||||
$ | 3,555.8 | $ | 3,671.5 | (3.2 | )% | (3.2 | )% | ||||||||
189.8 | 168.2 | 12.8 | 17.0 | ||||||||||||
107.0 | 112.4 | (4.8 | ) | (4.8 | ) | ||||||||||
75.7 | 46.5 | 63.1 | 43.6 | ||||||||||||
3,928.3 | 3,998.6 | (1.8 | ) | (1.8 | ) | ||||||||||
224.2 | 222.8 | 0.6 | (5.3 | ) | |||||||||||
194.4 | 199.4 | (2.5 | ) | (5.1 | ) | ||||||||||
189.4 | 169.5 | 11.7 | 8.7 | ||||||||||||
63.9 | 69.3 | (7.8 | ) | (10.0 | ) | ||||||||||
— | 63.4 | (100.0 | ) | (100.0 | ) | ||||||||||
Other | 191.8 | 200.3 | (4.3 | ) | (5.7 | ) | |||||||||
863.7 | 924.7 | (6.6 | ) | (9.6 | ) | ||||||||||
43.7 | 42.1 | 3.7 | 7.9 | ||||||||||||
$ | 4,835.7 | $ | 4,965.4 | (2.6 | )% | (3.2 | )% |
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 | ||||||||||||
$ | 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 | ) | |||||||||||
$ | 7.3 | $ | 6.9 | $ | 7.9 | $ | 22.1 | $ | 14.0 |
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 | ) | — | |||||||||||
$ | 4.6 | $ | (0.9 | ) | $ | 10.3 | $ | 14.0 |
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 | ||||||||||||
$ | 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 | ) | ||||||||||||||
$ | 24.3 | $ | 2.4 | $ | 6.9 | $ | 35.5 | $ | 69.1 | $ | 68.3 |
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) | 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 | ) | — | — | — | |||||||||||||
$ | 14.8 | $ | (6.2 | ) | $ | 18.7 | $ | 41.0 | $ | 68.3 |
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 | — | |||||||||||
— | 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 | — | |||||||||||
— | 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.
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 | — | |||||||||||
— | 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 | ) |
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
(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)
(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.
Source:
2024 GlobeNewswire, Inc., source