Financial Performance - Q3 2024 revenue totaled $1.04 billion, a 7.1% decrease year-over-year, primarily due to the sale of European staffing operations[2] - Q3 operating earnings were $2.6 million, compared to $0.1 million in Q3 2023; adjusted earnings were $11.7 million, down 24.5% from $15.5 million in the prior year[3] - Earnings per share in Q3 2024 were $0.02, down from $0.18 in Q3 2023; adjusted earnings per share were $0.21 compared to $0.50 in the same quarter last year[4] - The company reported a gross profit of $221.7 million in Q3 2024, down from $228.5 million in Q3 2023, reflecting a 3.0% decrease[10] - Revenue from services for the 39 weeks ended September 29, 2024, was $3,140.7 million, a decrease of 12.8% compared to $3,603.5 million in the same period of 2023[12] - Gross profit for the same period was $641.1 million, down 11.4% from $723.2 million in 2023[12] - Net earnings increased to $31.2 million, representing a 24.6% increase from $25.0 million in the prior year[12] - Basic earnings per share rose to $0.86, a 26.5% increase compared to $0.68 in the previous year[12] - Net earnings for Q3 2024 were $0.8 million, a decrease from $6.6 million in Q3 2023, while year-to-date earnings increased to $31.2 million from $25.0 million[29] - Adjusted net earnings for Q3 2024 were $7.7 million, compared to $18.1 million in Q3 2023, with year-to-date adjusted earnings rising to $54.1 million from $47.5 million[29] EBITDA and Margins - Adjusted EBITDA margin increased by 20 basis points to 2.5% in Q3 2024[1] - Adjusted EBITDA for the third quarter of 2024 was $100.0 million, up 23.1% from $76.9 million in the same quarter of 2023[13] - Adjusted EBITDA for Q3 2024 was $26.2 million, up from $25.5 million in Q3 2023, with an adjusted EBITDA margin of 2.5% compared to 2.3% in the prior year[32] - The Professional & Industrial business unit reported an adjusted EBITDA of $10.2 million for Q3 2024, with a margin of 2.7%[33] - The Science, Engineering & Technology business unit achieved an adjusted EBITDA of $25.0 million for Q3 2024, with a margin of 6.2%[33] Revenue Segmentation - The acquisition of Motion Recruitment Partners (MRP) contributed 11.2% to reported Q3 year-over-year revenue growth[2] - Revenue from the Science, Engineering & Technology segment increased by 37.1% to $405.2 million, compared to $295.7 million in the prior year[16] - The Professional & Industrial segment reported a revenue decrease of 2.0% to $370.4 million, down from $378.0 million[16] - The Education segment's revenue increased by 10.9% to $142.1 million, compared to $128.1 million in the previous year[16] - Revenue from Professional & Industrial services decreased by 7.3% to $1,086.5 million compared to $1,171.4 million in 2023[18] - Revenue from Science, Engineering & Technology services rose by 13.6% to $1,026.7 million, with a gross profit of $240.8 million[18] - Revenue from Education services increased by 17.0% to $683.1 million, with a gross profit of $98.7 million[18] - Revenue from services in the Americas for Q3 2024 was $1,012.2 million, a 13.6% increase compared to $891.3 million in Q3 2023[21] - The company experienced a 95.3% decline in revenue from the Europe region in Q3 2024, with total revenue of $10.1 million compared to $215.8 million in Q3 2023[21] Costs and Expenses - Cost of services in Q3 2024 was $816.4 million, compared to $889.5 million in the same quarter of 2023, a decrease of 8.2%[10] - Adjusted SG&A expenses for Q3 2024 were $210.0 million, slightly down from $213.0 million in Q3 2023[25] - The company reported a net cash used in investing activities of $355.5 million in 2024, compared to $10.8 million in 2023[7] - Cash, cash equivalents, and restricted cash at the end of the period were $40.4 million, down from $126.5 million in 2023[7] - The total cash from financing activities was $217.3 million in 2024, a significant increase from a cash outflow of $56.6 million in 2023[7] Dividends and Shareholder Returns - The board declared a dividend of $0.075 per share, payable on December 4, 2024[5] Assets and Liabilities - Total assets increased to $2,688.9 million from $2,581.6 million in December 2023[19] - Current assets decreased to $1,357.5 million from $1,626.6 million in December 2023[19] - Total current liabilities decreased to $841.0 million from $1,019.9 million in December 2023[19] - Debt-to-capital ratio stands at 15.1%, indicating a stable financial position[19] Cash Flow - Year-to-Date Free Cash Flow was $2.8 million, a significant decrease from $61.4 million in 2023[19] - Total cash from operating activities decreased to $11.9 million in 2024 from $33.4 million in 2023, a decline of 64.4%[7] - Free cash flow for the year-to-date 2024 was $21.0 million, with net cash from operating activities at $33.4 million and capital expenditures of $12.4 million[37] Strategic Initiatives - The company is focusing on growth and efficiency initiatives to capitalize on future staffing demand rebounds[5] - The company anticipates continued focus on market expansion and integration of recent acquisitions to drive future growth[39] - Management emphasizes the importance of non-GAAP measures for assessing financial performance and comparability with prior periods[40] Transaction and Restructuring Costs - Transaction costs in Q3 2024 included $1.8 million for employee termination and transition costs related to the sale of EMEA staffing operations, and $1.4 million for the acquisition of MRP[43] - Year-to-date transaction costs for the sale of EMEA staffing operations reached $8.9 million, while acquisition costs for MRP totaled $9.3 million[43] - Restructuring charges in the first six months of 2024 included $3.3 million for severance and $3.1 million for transformation execution costs[45] - Adjustments to restructuring charges in Q3 2024 amounted to $0.2 million, continuing the comprehensive transformation initiative started in Q2 2023[45] - Restructuring charges in Q3 2023 included $10.4 million for severance and $4.5 million for transformation execution costs[45] - Integration costs in Q3 2024 were incurred for initiatives aimed at integrating the MRP acquisition and aligning processes and technology across the company[46]
Kelly Services(KELYB) - 2025 Q3 - Quarterly Results