kelya-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-1088

KELLY SERVICES, INC.

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(Exact name of registrant as specified in its charter)


Delaware						38-1510762
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

999 West Big Beaver Road, Troy, Michigan 48084

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(Address of principal executive offices) (Zip Code)

(248) 362-4444

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(Registrant’s telephone number, including area code)

No Change

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(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbols	Name of each exchange on which registered
Class A Common	KELYA	NASDAQ Global Market
Class B Common	KELYB	NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

At April 29, 2024, 32,200,118 shares of Class A and 3,321,601 shares of Class B common stock of the Registrant were outstanding.

KELLY SERVICES, INC. AND SUBSIDIARIES


			Page Number

PART I. FINANCIAL INFORMATION			4

Item 1. Financial Statements (unaudited).			4

Consolidated Statements of Earnings			4

Consolidated Statements of Comprehensive Income (Loss)			5

Consolidated Balance Sheets			6

Consolidated Statements of Stockholders' Equity			8

Consolidated Statements of Cash Flows			9

Notes to Consolidated Financial Statements			11

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.			27

Item 3. Quantitative and Qualitative Disclosures About Market Risk.			37

Item 4. Controls and Procedures.			37

PART II. OTHER INFORMATION			38

Item 1. Legal Proceedings.			38

Item 1A. Risk Factors.			38

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.			39

Item 3. Defaults Upon Senior Securities.			39

Item 4. Mine Safety Disclosures.			39

Item 5. Other Information.			39

Item 6. Exhibits.			39

SIGNATURES			41

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

KELLY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(UNAUDITED)

(In millions of dollars except per share data)


	13 Weeks Ended
	March 31, 2024		April 2, 2023
Revenue from services	$	1,045.1	$	1,268.3

Cost of services	839.4		1,014.2

Gross profit	205.7		254.1

Selling, general and administrative expenses	190.5		243.4





Gain on sale of EMEA staffing operations	(11.6)		—



Earnings from operations	26.8		10.7

Gain on forward contract	1.2		—

Other income (expense), net	1.8		2.0

Earnings before taxes	29.8		12.7

Income tax expense	4.0		1.8





Net earnings	$	25.8	$	10.9

Basic earnings per share	$	0.71	$	0.29
Diluted earnings per share	$	0.70	$	0.29

Average shares outstanding (millions):
Basic	35.4		37.1
Diluted	35.8		37.4

See accompanying unaudited Notes to Consolidated Financial Statements.

KELLY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(In millions of dollars)


	13 Weeks Ended
	March 31, 2024		April 2, 2023
Net earnings	$	25.8	$	10.9

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax benefit of $0.0, and tax expense of $0.0, respectively	(0.5)		2.3
Less: Reclassification adjustments included in net earnings	(0.6)		—
Foreign currency translation adjustments	(1.1)		2.3

Pension liability adjustments, net of tax benefit of $0.4	—		—
Less: Reclassification adjustments included in net earnings	0.4		—
Pension liability adjustments	0.4		—

Other comprehensive income (loss)	(0.7)		2.3

Comprehensive income (loss)	$	25.1	$	13.2

See accompanying unaudited Notes to Consolidated Financial Statements.

KELLY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In millions)


	March 31, 2024		December 31, 2023
Assets
Current Assets
Cash and equivalents	$	200.7	$	125.8
Trade accounts receivable, less allowances of $8.8 and $8.4 respectively	1,152.9		1,160.6
Prepaid expenses and other current assets	83.2		48.9
Assets held for sale	—		291.3
Total current assets	1,436.8		1,626.6

Noncurrent Assets
Property and equipment:
Property and equipment	140.7		138.1
Accumulated depreciation	(115.2)		(113.5)
Net property and equipment	25.5		24.6
Operating lease right-of-use assets	46.3		47.1
Deferred taxes	318.9		321.1
Retirement plan assets	243.7		230.3
Goodwill, net	151.1		151.1
Intangibles, net	132.5		137.7

Other assets	40.6		43.1
Total noncurrent assets	958.6		955.0

Total Assets	$	2,395.4	$	2,581.6

See accompanying unaudited Notes to Consolidated Financial Statements.

KELLY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In millions)


	March 31, 2024		December 31, 2023
Liabilities and Stockholders’ Equity
Current Liabilities

Accounts payable and accrued liabilities	$	581.2	$	646.1
Operating lease liabilities	8.4		8.4
Accrued payroll and related taxes	165.9		156.2
Accrued workers’ compensation and other claims	22.0		22.1
Income and other taxes	20.0		17.2
Liabilities held for sale	—		169.9

Total current liabilities	797.5		1,019.9

Noncurrent Liabilities
Operating lease liabilities	42.0		42.9

Accrued workers’ compensation and other claims	40.9		40.9
Accrued retirement benefits	229.5		217.4
Other long-term liabilities	8.7		6.8
Total noncurrent liabilities	321.1		308.0

Commitments and contingencies (see Contingencies footnote)

Stockholders’ Equity
Capital stock, $1.00 par value
Class A common stock, 100.0 million shares authorized; 35.2 million shares issued at 2024 and 2023	35.2		35.2
Class B common stock, 10.0 million shares authorized; 3.3 million shares issued at 2024 and 2023	3.3		3.3
Treasury stock, at cost
Class A common stock, 3.0 million shares at 2024 and 3.2 million shares at 2023	(52.5)		(56.7)
Class B common stock	(0.6)		(0.6)
Paid-in capital	27.1		30.6
Earnings invested in the business	1,264.8		1,241.7
Accumulated other comprehensive income (loss)	(0.5)		0.2
Total stockholders’ equity	1,276.8		1,253.7

Total Liabilities and Stockholders’ Equity	$	2,395.4	$	2,581.6

See accompanying unaudited Notes to Consolidated Financial Statements.

KELLY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(In millions of dollars)


	13 Weeks Ended
	March 31, 2024		April 2, 2023
Capital Stock
Class A common stock
Balance at beginning of period	$	35.2	$	35.1
Conversions from Class B	—		0.1

Balance at end of period	35.2		35.2

Class B common stock
Balance at beginning of period	3.3		3.4
Conversions to Class A	—		(0.1)

Balance at end of period	3.3		3.3

Treasury Stock
Class A common stock
Balance at beginning of period	(56.7)		(19.5)
Net issuance of stock awards and other	4.2		3.1
Purchase of treasury stock	—		(18.3)
Balance at end of period	(52.5)		(34.7)

Class B common stock
Balance at beginning of period	(0.6)		(0.6)
Net issuance of stock awards	—		—
Balance at end of period	(0.6)		(0.6)

Paid-in Capital
Balance at beginning of period	30.6		28.0
Net issuance of stock awards	(3.5)		(1.6)
Balance at end of period	27.1		26.4

Earnings Invested in the Business
Balance at beginning of period	1,241.7		1,216.3



Net earnings