Kelly® Reports Fourth-Quarter and Full-Year Earnings 2021

February 14, 2022
- Q4 revenue increased 0.7%, or 6% as adjusted
- Q4 gross profit rate of 19.7%, improved 160 bps
- Q4 operating earnings of $15.3 million, or earnings of $19.4 million as adjusted, compared to earnings of $13.9 million in the corresponding quarter of 2020 as adjusted, up 40% on an adjusted basis
- Full year 2021 operating earnings of $48.6 million, or earnings of $52.6 million as adjusted, compared to adjusted earnings of $44.3 million last year, up 19% on an adjusted basis
- To unlock capital to accelerate Kelly's specialty strategy, Kelly and Persol Holdings will unwind cross-ownership and Kelly will reduce its ownership interest in PersolKelly, the companies' joint venture in the APAC region, in Q1 2022

TROY, Mich., Feb. 14, 2022 /PRNewswire/ -- Kelly® (Nasdaq: KELYA, KELYB), a leading specialty talent solutions provider, today announced results for the fourth quarter and full year of 2021. The company's 2021 fiscal year is a 52-week year, and the fourth quarter of 2021 includes 13 weeks. The company's 2020 fiscal year was a 53-week year, and the fourth quarter of 2020 included 14 weeks.

Peter Quigley, president and chief executive officer, announced revenue for the fourth quarter of 2021 totaled $1.3 billion, a 0.7% increase compared to the corresponding quarter of 2020. Year-over-year revenue trends were negatively impacted by the additional week in the 2020 period. Adjusted for the impact of the additional week in 2020, revenue for the fourth quarter of 2021 increased 6.0%. Improving year-over-year revenues in the quarter reflect increasing customer demand compared to the COVID-19-impacted prior year period. 

Earnings from operations in the fourth quarter of 2021 totaled $15.3 million, compared to earnings of $9.5 million reported in the fourth quarter of 2020. The 2021 fourth-quarter results include a $4.1 million restructuring charge. The 2020 fourth-quarter results included a $4.4 million restructuring charge. On an adjusted basis, earnings from operations were $19.4 million compared to $13.9 million in the corresponding quarter of 2020.

Diluted earnings per share in the fourth quarter of 2021 were $1.80 compared to $0.59 per share in the fourth quarter of 2020. Included in the earnings per share in the fourth quarter of 2021 is a non-cash gain, net of tax, on Kelly's investment in Persol Holdings common stock of $0.87 and a gain on insurance settlement, net of tax, of $0.36, partially offset by a loss of $0.08 related to restructuring charges, net of tax. Included in the earnings per share in the fourth quarter of 2020 is $0.26 from a non-cash gain per share on Kelly's investment in Persol Holdings common stock, net of tax, partially offset by a loss of $0.08 related to restructuring charges, net of tax. On an adjusted basis, earnings per share were $0.65 in the fourth quarter of 2021 compared to $0.41 in the corresponding quarter of 2020.

"Our fourth-quarter results reflect that the economic recovery continues. While our revenue growth in the quarter was affected by talent supply, we are pleased with our ability to leverage growth into solid gross profit and earnings improvements," said Quigley.

Operating earnings for the full year of 2021 totaled $48.6 million, compared to a loss of $93.6 million reported for the full year of 2020. The 2021 full-year results included a $4.0 million restructuring charge. The 2020 full-year results include a $147.7 million goodwill impairment charge, $12.8 million of restructuring charges, a $9.5 million customer dispute charge and a $32.1 million gain on sale of assets. On an adjusted basis, earnings from operations for the full year of 2021 were $52.6 million compared to $44.3 million for the full year of 2020.

Diluted earnings per share for the full year of 2021 were $3.91 compared to a loss per share of $1.83 for the full year of 2020. Included in the earnings per share for the full year of 2021 is $2.12 from a non-cash gain on Kelly's investment in Persol Holdings common stock, net of tax, and a $0.36 gain on insurance settlement, net of tax, partially offset by a $0.07 per share restructuring charge, net of tax. Included in the loss per share for the full year of 2020 is a non-cash goodwill impairment charge, net of tax, of $3.17; restructuring charges, net of tax, of $0.24; a $0.17 customer dispute charge, net of tax; and a non-cash loss, net of tax, on Kelly's investment in Persol Holdings common stock of $0.29, partially offset by a gain of $0.61 related to the gain on sale of assets, net of tax. On an adjusted basis, earnings per share were $1.51 for the full year of 2021 compared to $1.44 for the full year of 2020.

In other actions taken today, Persol Holdings and Kelly have agreed to changes in their relationship in the APAC region.  

First, Kelly will reduce its ownership interest in PersolKelly Pte. Ltd., the staffing joint venture established between Kelly and Persol in 2016, from 49% to 2.5%. Persol will acquire 46.5% of the shares held by Kelly through a Persol subsidiary. These changes will have no impact on the operations of PersolKelly, which remains a premier staffing supplier across the region. PersolKelly will continue to use the brand name, PersolKelly, for a period of time.

Second, Kelly and Persol will discontinue their cross-shareholding. Kelly holds 9,106,800 shares of Persol Holdings common stock, and Persol owns 1,576,169 shares of Kelly's Class A common stock and 1,475 shares of its Class B common stock. Kelly will monetize its equity holdings in Persol by selling all its shares in an open market transaction. Kelly will also buy back from Persol its equity position in Kelly. These actions will allow Kelly to realize the appreciation of its equity investment in Persol and enable the company to reinvest in Kelly's specialty growth strategy. Both stock transactions are expected to be completed within two business days.

Persol Holdings continues to be a valued partner to Kelly, and the companies' senior leaders will continue to regularly meet as part of this valued business partnership. PersolKelly, under the leadership of CEO Francis Koh, will continue to provide workforce solutions to customers across 13 markets in the Asia Pacific market and Kelly, under the leadership of Pete Hamilton, will continue to operate KellyOCG in the region.

"Kelly is already building on our momentum from 2021, which included Softworld, our largest acquisition to date, the creation of a strong, diverse leadership team, and the introduction of new solutions and products in our specialty businesses," said Quigley. "With the additional transactions announced today, Kelly will free up significant capital to invest in our specialty strategy, positioning us to elevate growth and profitability in 2022 and beyond."

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 14 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 14, 2022, at (866) 207-1041 (toll-free) and (402) 970-0847 (caller-paid). The access code is 7976390#. The recording will also be available at kellyservices.com during this period.

This release contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties. These factors include, but are not limited to, changing market and economic conditions, the impact of the novel coronavirus (COVID-19) outbreak, competitive market pressures including pricing and technology introductions and disruptions, disruption in the labor market and weakened demand for human capital resulting from technological advances, competition law risks, the impact of changes in laws and regulations (including federal, state and international tax laws), unexpected changes in claim trends on workers' compensation, unemployment, disability and medical benefit plans, or the risk of additional tax liabilities in excess of our estimates, our ability to achieve our business strategy, our ability to successfully develop new service offerings, material changes in demand from or loss of large corporate customers as well as changes in their buying practices, risks particular to doing business with government or government contractors, the risk of damage to our brand, our exposure to risks associated with services outside traditional staffing, including business process outsourcing, services of licensed professionals and services connecting talent to independent work, our increasing dependency on third parties for the execution of critical functions, our ability to effectively implement and manage our information technology strategy, the risks associated with past and future acquisitions, including risk of related impairment of goodwill and intangible assets, exposure to risks associated with investments in equity affiliates including PersolKelly Pte. Ltd., risks associated with conducting business in foreign countries, including foreign currency fluctuations, the exposure to potential market and currency exchange risks relating to our investment in Persol Holdings, risks associated with violations of anti-corruption, trade protection and other laws and regulations, availability of qualified full-time employees, availability of temporary workers with appropriate skills required by customers, liabilities for employment-related claims and losses, including class action lawsuits and collective actions, our ability to sustain critical business applications through our key data centers, risks arising from failure to preserve the privacy of information entrusted to us or to meet our obligations under global privacy laws, the risk of cyberattacks or other breaches of network or information technology security, our ability to realize value from our tax credit and net operating loss carryforwards, our ability to maintain specified financial covenants in our bank facilities to continue to access credit markets, and other risks, uncertainties and factors discussed in this release and in the Company's filings with the Securities and Exchange Commission.  Actual results may differ materially from any forward-looking statements contained herein, and we undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.

About Kelly®

Kelly Services, Inc. (Nasdaq: KELYA, KELYB) connects talented people to companies in need of their skills in areas including Science, Engineering, Education, Office, Contact Center, Light Industrial, and more. We're always thinking about what's next in the evolving world of work, and we help people ditch the script on old ways of thinking and embrace the value of all workstyles in the workplace. We directly employ more than 350,000 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 2021 was $4.9 billion. Visit kellyservices.com and let us help with what's next for you.

MEDIA CONTACT:

    

ANALYST CONTACT:

Jane Stehney

    

James Polehna

(248) 765-6864

    

(248) 244-4586

stehnja@kellyservices.com 

    

polehjm@kellyservices.com

 

KELLY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

FOR THE 13 WEEKS ENDED JANUARY 2, 2022 AND 14 WEEKS ENDED JANUARY 3, 2021

(UNAUDITED)

(In millions of dollars except per share data)
               

%

  

CC %

  
   

2021

  

2020

  

Change

  

Change

  

Change

  
                       

Revenue from services

$

1,250.3

$

1,241.4

$

8.9

  

0.7

%

1.1

%
                       

Cost of services

  

1,004.3

  

1,017.3

  

(13.0)

  

(1.3)

      
                       

Gross profit

  

246.0

  

224.1

  

21.9

  

9.8

  

10.1

  
                       

Selling, general and administrative expenses

  

230.7

  

214.6

  

16.1

  

7.5

  

7.9

  
                       

Earnings from operations

  

15.3

  

9.5

  

5.8

  

60.7

      
                       

Gain (loss) on investment in Persol Holdings

  

50.0

  

14.8

  

35.2

  

236.8

      
                       

Gain on insurance settlement

  

19.0

  

—

  

19.0

  

NM

      
                       

Other income (expense), net

  

0.4

  

(0.2)

  

0.6

  

277.9

      
                       

Earnings before taxes and equity in net earnings (loss) of affiliate

  

84.7

  

24.1

  

60.6

  

251.5

      
                       

Income tax expense (benefit)

 

16.1

  

2.5

  

13.6

  

NM

      
                       

Net earnings before equity in net earnings (loss) of affiliate

  

68.6

  

21.6

  

47.0

  

218.4

      
                       

Equity in net earnings (loss) of affiliate

  

3.1

  

1.8

  

1.3

  

72.2

      
                       

Net earnings

$

71.7

$

23.4

$

48.3

  

207.1

%

    
                       

Basic earnings per share

$

1.80

$

0.59

$

1.21

  

205.1

%

    

Diluted earnings per share

$

1.80

$

0.59

$

1.21

  

205.1

%

    
                       

STATISTICS:

                      
                       

Permanent placement income (included in revenue from services)

$

21.1

$

10.8

$

10.3

  

94.7

%

95.0

%
                       

Gross profit rate

  

19.7

%

18.1

%

1.6

pts.

        
                       

Conversion rate

  

6.2

  

4.2

  

2.0

          
                       

Adjusted EBITDA

$

27.7

$

20.4

$

7.3

          

Adjusted EBITDA margin

  

2.2

%

1.6

%

0.6

pts.

        
                       

Effective income tax rate

  

19.0

%

10.6

%

8.4

pts.

        
                       

Average number of shares outstanding (millions):

                    

     Basic

  

39.4

  

39.3

              

     Diluted

  

39.6

  

39.4

              

 

KELLY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

FOR THE 52 WEEKS ENDED JANUARY 2, 2022 AND 53 WEEKS ENDED JANUARY 3, 2021

(UNAUDITED)

(In millions of dollars except per share data)
               

%

  

CC %

  
   

2021

  

2020

  

Change

  

Change

  

Change

  
                       

Revenue from services

$

4,909.7

$

4,516.0

$

393.7

  

8.7

%

7.8

%
                       

Cost of services

  

3,990.5

  

3,688.4

  

302.1

  

8.2

      
                       

Gross profit

  

919.2

  

827.6

  

91.6

  

11.1

  

10.1

  
                       

Selling, general and administrative expenses

  

870.6

  

805.6

  

65.0

  

8.1

  

7.3

  
                       

Goodwill impairment charge

  

—

  

147.7

  

(147.7)

  

NM

      
                       

Gain on sale of assets

  

—

  

(32.1)

  

32.1

  

NM

      
                       

Earnings (loss) from operations

  

48.6

  

(93.6)

  

142.2

  

NM

      
                       

Gain (loss) on investment in Persol Holdings

  

121.8

  

(16.6)

  

138.4

  

NM

      
                       

Gain on insurance settlement

  

19.0

  

—

  

19.0

  

NM

      
                       

Other income (expense), net

  

(3.6)

  

3.4

  

(7.0)

  

(206.5)

      
                       

Earnings (loss) before taxes and equity in net earnings (loss) of affiliate

  

185.8

  

(106.8)

  

292.6

  

NM

      
                       

Income tax expense (benefit)

  

35.1

  

(34.0)

  

69.1

  

203.4

      
                       

Net earnings (loss) before equity in net earnings (loss) of affiliate

  

150.7

  

(72.8)

  

223.5

  

NM

      
                       

Equity in net earnings (loss) of affiliate

  

5.4

  

0.8

  

4.6

  

NM

      
                       

Net earnings (loss)

$

156.1

$

(72.0)

$

228.1

  

NM

%

    
                       

Basic earnings (loss) per share

$

3.93

$

(1.83)

$

5.76

  

NM

%

    

Diluted earnings (loss) per share

$

3.91

$

(1.83)

$

5.74

  

NM

%

    
                       

STATISTICS:

                      
                       

Permanent placement income (included in revenue from services)

$

75.4

$

39.7

$

35.7

  

89.7

%

87.4

%
                       

Gross profit rate

  

18.7

%

18.3

%

0.4

pts.

        
                       

Conversion rate

  

5.3

  

(11.3)

  

16.6

          
                       

Adjusted EBITDA

$

84.1

$

69.0

$

15.1

          

Adjusted EBITDA margin

  

1.7

%

1.5

%

0.2

pts.

        
                       

Effective income tax rate

  

18.9

%

31.8

%

(12.9)

pts.

        
                       

Average number of shares outstanding (millions):

                      

     Basic

  

39.4

  

39.3

              

     Diluted

  

39.5

  

39.3

              

 

KELLY SERVICES, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS BY SEGMENT

(UNAUDITED)

(In millions of dollars)
                     
   

Fourth Quarter
                     
   

2021
(13 Wks)

    

2020
(14 Wks)

  

%
Change

  

CC %
Change

  

Professional & Industrial

                    

  Revenue from services

$

450.7

  

$

511.7

  

(11.9)

%

(12.1)

%

  Gross profit

  

82.3

    

89.1

  

(7.7)

  

(7.9)

  

  SG&A expenses excluding restructuring charges

  

70.8

    

76.5

  

(7.4)

  

(7.6)

  

  Restructuring charges

  

—

    

1.7

  

NM

  

NM

  

  Total SG&A expenses

  

70.8

    

78.2

  

(9.5)

  

(9.6)

  

  Earnings (loss) from operations

  

11.5

    

10.9

  

5.3

      

  Earnings (loss) from operations excluding restructuring charges

  

11.5

    

12.6

  

(9.2)

      
                     

  Gross profit rate

  

18.2

%

  

17.4

%

0.8

pts.

    
                     

Science, Engineering & Technology

                    

  Revenue from services

$

297.7

  

$

257.6

  

15.5

%

15.5

%

  Gross profit

  

66.1

    

53.4

  

23.7

  

23.7

  

  SG&A expenses excluding restructuring charges

  

49.2

    

35.2

  

39.7

  

39.6

  

  Restructuring charges

  

—

    

0.1

  

NM

  

NM

  

  Total SG&A expenses

  

49.2

    

35.3

  

39.3

  

39.3

  

  Earnings (loss) from operations

  

16.9

    

18.1

  

(6.7)

      

  Earnings (loss) from operations excluding restructuring charges

  

16.9

    

18.2

  

(7.1)

      
                     

  Gross profit rate

  

22.2

%

  

20.7

%

1.5

pts.

    
                     

Education

                    

  Revenue from services

$

132.4

  

$

91.8

  

44.3

%

44.3

%

  Gross profit

  

21.1

    

13.4

  

57.6

  

57.6

  

  SG&A expenses excluding restructuring charges

  

15.6

    

13.3

  

17.1

  

17.1

  

  Restructuring charges

  

—

    

0.2

  

NM

  

NM

  

  Total SG&A expenses

  

15.6

    

13.5

  

15.3

  

15.3

  

  Earnings (loss) from operations

  

5.5

    

(0.1)

  

NM

      

  Earnings (loss) from operations excluding restructuring charges

  

5.5

    

0.1

  

NM

      
                     

  Gross profit rate

  

15.9

%

  

14.6

%

1.3

pts.

    
                     

Outsourcing & Consulting

                    

Revenue from services

$

112.1

  

$

102.5

  

9.3

%

9.4

%

Gross profit

  

38.0

    

32.7

  

16.3

  

16.5

  

SG&A expenses excluding restructuring charges

  

33.5

    

28.9

  

16.2

  

16.4

  

Restructuring charges

  

—

    

0.3

  

NM

  

NM

  

Total SG&A expenses

  

33.5

    

29.2

  

15.1

  

15.4

  

Earnings (loss) from operations

  

4.5

    

3.5

  

26.2

      

Earnings (loss) from operations excluding restructuring charges

  

4.5

    

3.8

  

17.6

      
                     

Gross profit rate

  

34.0

%

  

31.9

%

2.1

pts.

    
                     

International

                    

  Revenue from services

$

257.7

  

$

278.0

  

(7.2)

%

(5.4)

%

  Gross profit

  

38.5

    

35.5

  

8.6

  

11.0

  

  SG&A expenses excluding restructuring charges

  

35.5

    

33.2

  

6.9

  

9.2

  

  Restructuring charges

  

1.2

    

0.3

  

365.5

  

384.5

  

  Total SG&A expenses

  

36.7

    

33.5

  

9.6

  

12.1

  

  Earnings (loss) from operations

  

1.8

    

2.0

  

(7.7)

      

  Earnings (loss) from operations excluding restructuring charges

  

3.0

    

2.3

  

35.1

      
                     

  Gross profit rate

  

15.0

%

  

12.8

%

2.2

pts.

    

 

KELLY SERVICES, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS BY SEGMENT

(UNAUDITED)

(In millions of dollars)
                     
   

December Year to Date
                     
   

2021
(52 Wks)

    

2020
(53 Wks)

  

%
Change

  

CC %
Change

  

Professional & Industrial

                    

  Revenue from services

$

1,837.4

  

$

1,858.4

  

(1.1)

%

(1.5)

%

  Gross profit

  

310.0

    

330.2

  

(6.1)

  

(6.5)

  

  SG&A expenses excluding restructuring charges

  

278.6

    

282.6

  

(1.4)

  

(1.7)

  

  Restructuring charges

  

—

    

6.0

  

NM

  

NM

  

  Total SG&A expenses

  

278.6

    

288.6

  

(3.5)

  

(3.8)

  

  Earnings (loss) from operations

  

31.4

    

41.6

  

(24.4)

      

  Earnings (loss) from operations excluding restructuring charges

  

31.4

    

47.6

  

(34.0)

      
                     

  Gross profit rate

  

16.9

%

  

17.8

%

(0.9)

pts.

    
                     

Science, Engineering & Technology

                    

  Revenue from services

$

1,156.8

  

$

1,019.1

  

13.5

%

13.3

%

  Gross profit

  

253.9

    

209.4

  

21.3

  

21.1

  

  SG&A expenses excluding restructuring charges

  

180.2

    

133.8

  

34.7

  

34.5

  

  Restructuring charges

  

—

    

0.6

  

NM

  

NM

  

  Total SG&A expenses

  

180.2

    

134.4

  

34.1

  

33.9

  

  Earnings (loss) from operations

  

73.7

    

75.0

  

(1.7)

      

  Earnings (loss) from operations excluding restructuring charges

  

73.7

    

75.6

  

(2.5)

      
                     

  Gross profit rate

  

21.9

%

  

20.5

%

1.4

pts.

    
                     

Education

                    

  Revenue from services

$

416.5

  

$

286.9

  

45.2

%

45.2

%

  Gross profit

  

65.1

    

42.2

  

54.1

  

54.1

  

  SG&A expenses excluding restructuring charges

  

62.1

    

50.2

  

23.6

  

23.6

  

  Restructuring charges

  

—

    

1.0

  

NM

  

NM

  

  Total SG&A expenses

  

62.1

    

51.2

  

21.1

  

21.1

  

  Earnings (loss) from operations

  

3.0

    

(9.0)

  

NM

      

  Earnings (loss) from operations excluding restructuring charges

  

3.0

    

(8.0)

  

NM

      
                     

  Gross profit rate

  

15.6

%

  

14.7

%

0.9

pts.

    
                     

Outsourcing & Consulting

                    

  Revenue from services

$

432.1

  

$

363.5

  

18.9

%

17.9

%

  Gross profit

  

141.4

    

119.8

  

18.0

  

16.3

  

  SG&A expenses excluding restructuring charges

  

122.7

    

108.0

  

13.6

  

12.4

  

  Restructuring charges

  

—

    

0.3

  

NM

  

NM

  

  Total SG&A expenses

  

122.7

    

108.3

  

13.3

  

12.0

  

  Earnings (loss) from operations

  

18.7

    

11.5

  

62.7

      

  Earnings (loss) from operations excluding restructuring charges

  

18.7

    

11.8

  

58.3

      
                     

  Gross profit rate

  

32.7

%

  

33.0

%

(0.3)

pts.

    
                     

International

                    

  Revenue from services

$

1067.8

  

$

988.6

  

8.0

%

4.9

%

  Gross profit

  

148.8

    

126.0

  

18.1

  

14.8

  

  SG&A expenses excluding restructuring charges

  

137.7

    

133.5

  

3.1

  

0.2

  

  Restructuring charges

  

1.2

    

1.4

  

(10.2)

  

(6.6)

  

  Total SG&A expenses

  

138.9

    

134.9

  

2.9

  

0.1

  

  Earnings (loss) from operations

  

9.9

    

(8.9)

  

NM

      

  Earnings (loss) from operations excluding restructuring charges

  

11.1

    

(7.5)

  

NM

      
                     

  Gross profit rate

  

13.9

%

  

12.7

%

1.2

pts.

    

 

KELLY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In millions of dollars)
   

Jan.  2, 2022

  

Jan.  3, 2021

  

Current Assets

          

  Cash and equivalents

$

112.7

$

223.0

  

  Trade accounts receivable, less allowances of

          

    $12.6 and $13.3, respectively

  

1,423.2

  

1,265.2

  

  Prepaid expenses and other current assets

  

52.8

  

61.4

  

Total current assets

  

1,588.7

  

1,549.6

  
           

Noncurrent Assets

          

Property and equipment, net

  

35.3

  

41.0

  

Operating lease right-of-use assets

  

75.8

  

83.2

  

Deferred taxes

  

302.8

  

282.0

  

Goodwill, net

  

114.8

  

3.5

  

Investment in Persol Holdings

  

264.3

  

164.2

  

Investment in equity affiliate

  

123.4

  

118.5

  

Other assets

  

389.1

  

319.9

  

Total noncurrent assets

  

1,305.5

  

1,012.3

  
           

Total Assets

$

2,894.2

$

2,561.9

  
           

Current Liabilities

          

  Short-term borrowings

$

—

$

0.3

  

  Accounts payable and accrued liabilities

  

687.2

  

536.8

  

Operating lease liabilities

  

17.5

  

19.6

  

  Accrued payroll and related taxes

  

318.4

  

293.0

  

  Accrued workers' compensation and other claims

  

20.8

  

22.7

  

  Income and other taxes

  

51.3

  

53.2

  

Total current liabilities

  

1,095.2

  

925.6

  
           

Noncurrent Liabilities

          

Operating lease liabilities

  

61.4

  

67.5

  

Accrued payroll and related taxes

 

57.6

  

58.5

  

  Accrued workers' compensation and other claims

  

37.0

  

42.2

  

  Accrued retirement benefits

  

220.0

  

205.8

  

  Other long-term liabilities

  

86.8

  

59.3

  

Total noncurrent liabilities

  

462.8

  

433.3

  
           

Stockholders' Equity

          

  Common stock

  

40.1

  

40.1

  

  Treasury stock

  

(15.1)

  

(17.1)

  

  Paid-in capital

  

23.9

  

21.3

  

  Earnings invested in the business

  

1,315.0

  

1,162.9

  

  Accumulated other comprehensive income (loss)

  

(27.7)

  

(4.2)

  
           

Total stockholders' equity

  

1,336.2

  

1,203.0

  
           

Total Liabilities and Stockholders' Equity

$

2,894.2

$

2,561.9

  
           

Statistics:

          

 Working Capital

$

493.5

$

624.0

  

 Current Ratio

  

1.5

  

1.7

  

 Debt-to-capital %

  

0.0

%

0.0

%

 Global Days Sales Outstanding

  

60

  

64

  

 Year-to-Date Free Cash Flow

$

73.8

$

170.5

  

 

KELLY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE 52 WEEKS ENDED JANUARY 2, 2022 AND 53 WEEKS ENDED JANUARY 3, 2021

(UNAUDITED)

(In millions of dollars)
   

2021

  

2020

Cash flows from operating activities:

        

  Net earnings (loss)

$

156.1

$

(72.0)

  Adjustments to reconcile net earnings to net cash from operating activities:

        

    Goodwill impairment charge

  

—

  

147.7

    Deferred income taxes

  

21.6

  

(57.1)

    Depreciation and amortization

  

29.8

  

24.2

    Operating lease asset amortization

  

21.2

  

21.1

    Provision for credit losses and sales allowances

  

1.6

  

12.8

    Stock-based compensation

  

5.1

  

3.9

    (Gain) loss on investment in Persol Holdings

  

(121.8)

  

16.6

    Gain on insurance settlement

  

(19.0)

  

—

    Gain on sale of assets

  

—

  

(32.1)

    Equity in net (earnings) loss of PersolKelly Pte. Ltd.

  

(5.4)

  

(0.8)

    Other, net

  

6.0

  

1.4

  Changes in operating assets and liabilities, net of acquisitions

  

(10.2)

  

120.3

  Net cash from operating activities

  

85.0

  

186.0
         

Cash flows from investing activities:

        

  Capital expenditures

  

(11.2)

  

(15.5)

  Proceeds from sale of assets

  

—

  

55.5

  Acquisition of companies, net of cash received

  

(213.0)

  

(39.2)

  Proceeds from company-owned life insurance

  

12.2

  

2.3

  Proceeds from insurance settlement

  

19.0

  

—

  Proceeds from sale of Brazil, net of cash disposed

  

—

  

1.2

  Proceeds (payments) related to loans to equity affiliate

  

5.9

  

5.6

  Proceeds from (investment in) equity securities

  

5.0

  

(0.2)

  Other investing activities

  

1.4

  

0.1

    Net cash (used in) from investing activities

  

(180.7)

  

9.8
         

Cash flows from financing activities:

        

  Net change in short-term borrowings

  

(0.2)

  

(1.7)

  Financing lease payments

  

(1.5)

  

(2.0)

  Dividend payments

  

(4.0)

  

(3.0)

  Payments of tax withholding for stock awards

  

(0.6)

  

(1.2)

  Contingent consideration payments

  

(1.6)

  

—

  Other financing activities

  

(0.2)

  

(0.2)

    Net cash used in financing activities

  

(8.1)

  

(8.1)
         

Effect of exchange rates on cash, cash equivalents and restricted cash

  

(4.8)

  

9.4
         

Net change in cash, cash equivalents and restricted cash

  

(108.6)

  

197.1

Cash, cash equivalents and restricted cash at beginning of year

  

228.1

  

31.0
         

Cash, cash equivalents and restricted cash at end of year

$

119.5

$

228.1

 

KELLY SERVICES, INC. AND SUBSIDIARIES

REVENUE FROM SERVICES

(UNAUDITED)

(In millions of dollars)
                   
   

Fourth Quarter

  
                   
   

2021

  

2020

  

%

  

CC %

  
   

(13 Wks)

  

(14 Wks)

  

Change

  

Change

  
                   

Americas

                  

  United States

$

908.6

$

891.0

  

2.0

%

2.0

%

  Canada

  

38.1

  

33.8

  

12.6

  

8.6

  

  Puerto Rico

  

25.5

  

20.9

  

21.6

  

21.6

  

  Mexico

  

10.6

  

35.8

  

(70.5)

  

(70.1)

  

Total Americas Region

  

982.8

  

981.5

  

0.1

  

—

  
                   

Europe

                  

  Switzerland

  

61.0

  

59.2

  

3.1

  

4.9

  

  France

  

55.0

  

57.0

  

(3.5)

  

0.5

  

  Portugal

  

37.3

  

42.6

  

(12.4)

  

(8.6)

  

  Russia

  

32.9

  

29.9

  

9.8

  

4.9

  

  Italy

  

18.2

  

15.7

  

15.8

  

20.7

  

  United Kingdom

  

16.4

  

17.2

  

(4.5)

  

(6.7)

  

  Germany

  

9.4

  

8.0

  

17.4

  

22.3

  

  Ireland

  

8.0

  

5.9

  

36.9

  

42.4

  

  Other

  

18.1

  

15.9

  

13.5

  

17.4

  

Total Europe Region

  

256.3

  

251.4

  

2.0

  

4.0

  
                   

Total Asia-Pacific Region

  

11.2

  

8.5

  

33.3

  

34.5

  
                   

Total Kelly Services, Inc.

$

1,250.3

$

1,241.4

  

0.7

%

1.1

%
                   

 

KELLY SERVICES, INC. AND SUBSIDIARIES

REVENUE FROM SERVICES

(UNAUDITED)

(In millions of dollars)
                   
   

December Year to Date

  
                   
   

2021

  

2020

  

%

  

CC %

  
   

(52 Wks)

  

(53 Wks)

  

Change

  

Change

  
                   

Americas

                  

  United States

$

3,513.4

$

3,260.2

  

7.8

%

7.8

%

  Canada

  

155.0

  

122.5

  

26.5

  

18.2

  

  Puerto Rico

  

102.1

  

77.0

  

32.5

  

32.5

  

  Mexico

  

92.7

  

114.4

  

(19.0)

  

(23.2)

  

  Brazil

  

—

  

17.0

  

NM

  

NM

  

Total Americas Region

  

3,863.2

  

3,591.1

  

7.6

  

7.2

  
                   

Europe

                  

  France

  

223.1

  

198.2

  

12.5

  

8.6

  

  Switzerland

  

222.2

  

200.4

  

10.9

  

8.2

  

  Portugal