Kelly® Reports Fourth-Quarter and Full-Year Earnings

Financial Highlights
Q4 revenue down 7.2% year-over-year as sequential quarter-over-quarter improvement continuesQ4 operating earnings of $9.5 million, or earnings of $13.9 million as adjusted, compared to earnings of $28.8 million in the corresponding quarter of 2019 as adjustedQ4 earnings per share of $0.59 or $0.41 as adjusted, compared to $0.71 in the corresponding quarter of 2019 as adjustedFull year 2020 operating loss of $93.6 million, or earnings of $44.3 million as adjusted, compared to earnings of $90.8 million last year as adjustedTROY, Mich., Feb. 18, 2021 (GLOBE NEWSWIRE) — Kelly (Nasdaq: KELYA) (Nasdaq: KELYB), a leading specialty talent solutions provider, today announced results for the fourth quarter and full year of 2020. The company’s 2020 fiscal year is a 53-week year and the fourth quarter of 2020 includes 14 weeks.Peter Quigley, president and chief executive officer, announced revenue for the fourth quarter of 2020 totaled $1.2 billion, a 7.2% decline compared to the corresponding quarter of 2019. Revenue declined year-over-year in the quarter as the continuing effects of the COVID-19 crisis impacted customer demand.Earnings from operations in the fourth quarter of 2020 totaled $9.5 million, compared to earnings of $13.1 million reported in the fourth quarter of 2019. The 2020 fourth-quarter results include a $4.4 million restructuring charge. The 2019 fourth-quarter results included a $15.8 million asset impairment charge related to a technology development project. On an adjusted basis, earnings from operations were $13.9 million compared to $28.8 million in the corresponding quarter of 2019.The operating loss for the full year of 2020 totaled $93.6 million, compared to earnings of $81.8 million reported for the full year of 2019. 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. The 2019 full-year results included a $15.8 million asset impairment charge related to a technology development project, restructuring charges of $5.5 million, and a gain on sale of assets of $12.3 million. On an adjusted basis, earnings from operations were $44.3 million compared to $90.8 million in 2019.Diluted earnings per share in the fourth quarter of 2020 were $0.59 compared to $0.43 per share in the fourth quarter of 2019. Included in the earnings per share in the fourth quarter of 2020 is a non-cash gain, net of tax, on Kelly’s investment in Persol Holdings common stock of $0.26, 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 2019 is a $0.30 per share charge for an asset impairment charge related to a technology development project, net of tax, and $0.01 from a non-cash gain per share on Kelly’s investment in Persol Holdings common stock, net of tax. On an adjusted basis, earnings per share were $0.41 in the fourth quarter of 2020 compared to $0.71 in the corresponding quarter of 2019.Diluted losses per share for the full year of 2020 were $1.83 compared to earnings per share of $2.84 for the full year of 2019. 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. Included in the earnings per share for the full year of 2019 is $0.63 from a non-cash gain per share on Kelly’s investment in Persol Holdings common stock, net of tax; and a $0.23 gain on sale of assets, net of tax, partially offset by a $0.30 loss per share related to asset impairment charges, net of tax and a $0.10 per share restructuring charge, net of tax. On an adjusted basis, earnings per share were $1.44 for the full year of 2020 compared to $2.38 for the full year of 2019.“Each of Kelly’s five operating segments reported sequential revenue improvement in the fourth quarter, continuing the trend of top-line growth we’ve seen each quarter since the low point of the COVID-19 crisis,” said Quigley. “Our OCG segment showed particular strength and resilience, surpassing pre-COVID revenue levels. These results reflect gradually improving economic conditions, coupled with traction from our specialization strategy and the operating model we implemented mid-2020. Looking ahead, we’re optimistic that we’ll benefit from a recovery that gains momentum throughout 2021, with pipelines for both organic and inorganic growth strengthening. We’re confident we’ve positioned Kelly to pursue profitable growth coming out of the pandemic and well into the future.”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 18 to review the results and answer questions. The call may be accessed in one of the following ways:Via the Internet:
Kellyservices.comVia 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 2:30 p.m. ET on February 18, 2021 at (866) 207-1041 (toll-free) and (402) 970-0847 (caller-paid). The access code is 4671104#. 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 recent 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 nearly 370,000 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 2020 was $4.5 billion. Visit kellyservices.com and let us help with what’s next for you.













Note: Earnings per share amounts for each quarter are required to be computed independently and may not equal the amounts computed for the total year.KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)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, the 2020 customer dispute, the 2020 and 2019 restructuring charges and the 2019 asset impairment charge 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.