KELYA - Earnings call transcript Q4 2020

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Operator

Good morning, and welcome to Kelly Services Fourth Quarter and Full Year Earnings Conference Call. All parties will be on listen-only until the question-and-answer portion of the presentation. Today’s call is being recorded at the request of Kelly Services. If anyone has any objections, you may disconnect at this time. The fourth quarter and full-year 2020 webcast presentation is also available on Kelly’s website for this morning’s call. to meeting like host, to now Mr. would turn over the your I and Quigley, CEO. Peter President ahead. go Please

Peter Quigley

Thank you, me everyone, will and Thirot, Alan. Hello, Chief walk full-year fourth Kelly our Safe conference quarter you Services through call. Harbor Officer, With Financial today our Olivier and is who welcome language. to

Olivier Thirot

and good Peter, you, everyone. Thank morning,

materially and this our call, we performance. from results may include of Q&A, future Let you any influence have that the our Actual by me suggested performance. for comments our statements those made no could obligation to actual description including update call. expectations about SEC the statements comments, remind the could a to that future differ company’s on made risk factors Please during this refer the filings for forward-looking

call, reported designed In of Discussion non-GAAP trends our insight on be data certain an in on addition, adjusted financial will during give our and basis, basis. discussed the certain measures an adjusted items into to on operations.

provided also that an on call with the deck have performance our We using website. more as slide deck on as expanded on we today’s our well are information slide

you, Now, Peter. back to

Peter Quigley

I'll brief economic labor for to quarterly weather look dynamics share of with you, and and highlights recap context start full our Kelly’s performance. to we at provide year and have taken Thank market QX results, Olivier. actions a the the pandemic

though April. below The challenges drew as and a penetration gradually progressively at remain. labor recovery to volumes pre full a temporary X%, improvement recover in in rate labor improved Those is XXXX some improved a norm. is have figures from In get While to X% December, year-over-year month just indicators the off, still minus continued with the US ways to the also pandemic better key close. close a its continued market now market overall overall each marked US several minus to XX%

in XX% a plateaued improved pandemic have rates down high falling Europe and have overall trend in months widespread deepest infections unemployment In the a of waves from the been point variants Overall, to suggests X.X% level. again December. if was its low recovery. economic of put unemployment because December, of and at labor of participation recent since high April up and continued times efforts in crisis levels remain the rate at mitigation where in place While subsequent unemployment gradual uneven virus permanent COVID-XX

positioned steps response to it's took Looking growth. throughout the us for the that both clear Kelly's back company the at we XXXX future and crisis protected

line can measures. positive to our And shared opportunities cash be ample And of critical most in other M&A primed proved The growth our available growth, a in successful. during to Kelly's difficult, they crisis that and And entered of protect health year people, director XXXX. and employee, business earnings it, with stretch interruption. set These were by among of dividend, guided quarter clear with targeted of onset. expenditures of to the defensive and acted each cuts, protect quarterly community’s support temporary and element furloughs, our capital the we taken the while enabled strategy. priority with protect disruption. decisively ended serve actions We and we to and of including specialties reduced and healthy compensation company, a crisis executive, safety suspension bottom actions, board the sacrifices the the without Kelly sheet. pursue of and These maintain balance talent quickly most the us we of for customers a measures intense to and Our our health included principles developed principles were used the which liquidity capacity, at a financial produce

prior our specialties. year the also We strategic shift portfolio steady higher actions to pre-pandemic succeeded holding thanks in our value margin to from our toward GP

particularly stood model you homes Kelly operating about on resilience, primarily five We talent agility opportunities from face connect contributed our temperatures Kelly the essential employees when opportunity organizations internal previously. taking test of the businesses, service up Working producing fronts. many development implemented lost segments offered work time at our of shields, recent employment told displayed as customers to talent pandemic were a to new every related financial safety during essential we local investments, new to life-saving supporting as and Beyond and teams great new and and utilizing kits IT supply proud our supporting and chains. our vaccines, specialties I’m to several we seamless work captured on infrastructure operating to proud chosen our people teams of and the such that so based that Kelly's creatively at

pandemic rose wears entire As today on. community to proud how Kelly CEO, continue I’m the how to do so of the occasion the we as and

the industrial, improvements Olivier I'll In five International XXXX. QX – QX segments; a from provide hand in and I Technology; to revenue and saw OCG, Kelly's Professional, details, off highlights. Education, share we of and it Engineering Before few operating each to Science, sequential

was improved medium that recovery board, comparison, our we've the pleased sizes seen on in since large levels in segment. beginning even demand for and improved even of small out customers. and positive QX OCG We're continued surpassing positive signs momentum for we're now customers each saw trends seeing sluggish And we customers, line seeing gaining fact, we crisis in early the touched signs Last in talent we're demand across demand by suggest QX trend these from continuous to of has In from quarter is top our pre-COVID that QX. while the began US. the this and improvements I started, also enterprises the quarter, revenue various from

reach and turn on it now and to schools. the As expected, most by focus vaccine about operating educators, share to I'll revenue be more results. growing quarter, COVID-XX. by Olivier encouraged, now beginning though, in local over Education sequential impacted segment reopening last We're QX continues to to the details improvements from programs our national

Olivier Thirot

Thank you, Peter.

impact the our and fiscal the stabilization that also for our year. continuing we'll also highlight XX-week As results XXXX demand activity Peter pandemic And continued of mentioned while a is our economic in services. reflect reflect COVID-XX QX results

the fourth weeks extra and quarter activity results weeks our XX So XX XXXX. reflect include in to week of operating compared

totaled I in the impact additional the down first impact comparisons. positively impacted the is While growth growth billion, prior results our XXXX year. XX impact from the of material rate $X.X year-over-year The XXXX quarter impact basis to our underlining trend, foreign business the quarter understand provide of will of added points. XXX to rate. basis of Revenue X.X% week fourth by exchange revenue the The additional in our points week approximately our the revenue on

rate mentioned and in of we in exit we our QX gradual QX still large last low XX%. a point As but year-over-year improvement from demand in QX decrease accounts saw expense early quarter, was the in

QX, the improvement saw QX segments revenue improvement month in excluding the over that of Our week currency impact exit trends demand in X%. In extra was demand. QX course reflects we of constant broad-based saw all This came a why down rate of a the large quarter revenue improvements And gradual the of December trend of in the accounts. the and the year-over-year for have we third improved more continued since quarter. in from trends primarily trends

continues delivery in their schools instructional our revenue school to QX, as segment’s generally demand has modify using remote outcome-based particularly strong as have many Revenue in continued most trend including contact within each delivery and slower a our to our hybrid customers the rates. centers Our with demand the specialty. tracked where Education has impact served the recover. results a in customers districts life infection in the for and product in had strongest. in an of segment gas response which SET has continued to the up US And concentration return for our outcome-based the oil in Industrial be virtual in segment double variety to been to has products Science science finally, have have quarter sector our continues we models engineering be resilient. And and And school Professional In our been impacted the & well services. have resurgence a to with the fall OCD on segment, specialty. to clinical digits with in

OCD in an has profit Overall, that uncertainty in process key point Excluding which reflect a is was the QX inflection QX, Technology, primarily year-over-year for full-time continued revenue the XXXX, were Permanent improvement reached fees in to over is Science, higher gross Engineering segments. our all but placement than the comparable new customer due extra hiring especially outsourcing down & X.X%. depressed product. week, down that economic period of wins payroll XX%

basis, On shift customer business, negatively basis XX down the XX.X%, small- was perm has our and GP the rate been rate well has fees. quarter in year. as compared profit as demand year-over-year of a prior by first as than medium-sized gross Our been accounts’ stronger points large to lower a mix impacted

rate as our restructuring expenses also these Included and basis. the recovers QX XXXX improved in demand overall quarter expenses segments. in charge. GP these our X% in a $X.X were in year-over-year our We segments, P&I generally margins QX Since compared to decline a segments. saw in as International are lower impacted SG&A the revenue million reported margin on was rate a is for down

The quarter the year-over-year X.X% result in year-over-year were million the also impacted $X.X approximately week and additional constant charge, the were of by comparison points Excluding XXX in currency. for unfavorably down as a basis expenses XXXX.

including the savings, we the quarter the resulted cost increased XXXX. In the first have reversed temporary we expense which place charges levels beginning may at the Sequentially, of this actions temporary quarter, result and taken half optimization mentioned in of a majority the plans, eliminating have working of those charges on adjustments QX additional pandemic, actively are sustainable in actions expense compensation we the in in restructuring in of the as result. the During past. including mitigation

fourth reported quarter XXXX Our the reported for to was million. $XX.X from QX of earnings $X.X million earnings operations compared

impairment charge XXXX include a project. million technology earnings QX our of Our include development million related and the to $X.X earnings XXXX $XX.X the QX restructuring non-cash charge

with our year, earnings XXXX, year And $XX.X better year-over-year and full our our Education all results QX a quarter. operating segment XX% decline from Industrial, to earnings XXXX. XXXX operations Technology, for for million positive excluding has versus of earnings. from earnings million in quickly comment as delivered delivered & were to the International including for was a on $XX.X Engineering the QX, $XX.X segments And performance like-for-like segments OCD when The losses earnings Science, of consistent XXXX. operations. charges, operations compared again, restructuring positive So, in OCD And basis, from & the the million, on reported Professional

gain on impairment dispute Excluding of adjusted and customer in earnings to charges million charge, $XX.X to offset XXXX, assets, QX a the XXXX a sale were related operations decrease our compared million goodwill a by from XX%. restructuring $XX.X partially earnings adjusted of charge

of XXXX each quarter. and and on pandemic response brought to results challenge and declines to operating sharp take actions sudden demand profits adjusted Our in and the the maintain expense quickly by our reduce reflect global decisively

Foursquare Now turning also losses back on gains equity shareholdings. per to unrealized the include earnings in and the before again, Kelly’s investment tax our

million. we tax stock quarter $XXX,XXX benefit common Persol $X.X million a Income quarter losses XXXX are prior gains non-cash line the recognize For $XX.X $X.X pre-tax in as a compared compared tax a item. earnings below million with income for our fourth on recognized pre-tax of our for year. was the operations the These gain to and expense separate gain

you share Our effective life a for earnings the the lower impacted share per compared per quarter primarily impact per earnings some tax technology the earnings Out due was for stock the development on order better share $X.XX non-taxable project. $X.XX for of share QX per the the QX was than was information. a In to XXXX partially of XXXX, to assets. gains items, EPS XXXX reported non-cash to negatively was common tax EPS the XX%. decline per statutory compared of on related Persol trend XXXX offset by to additional in fourth understand in rate the insurance And favorably rate quarter gain finally $X.XX charge restructuring share charges. these impacted in underlying provide me XXXX by XX.X%. to was XXXX. let $X.XX by on was Adjusting company impairment In rate

at to moving Now, compared year the down million US We That $XX no ended $XXX borrowings zero totaled million balance ago. nearly in credit $X a million to our facilities. quarter with was cash XXXX. sheet, from year-end the

billion lesser of year-over-year in under Our capital the as the extent current a CARES provisions to in X.X% of panic. six year-end higher Accounts we year-over-year. from the working as given business XX was our saw recovery was cash increase the the revenue QX Global and US Act $X.X continues. balance in and the DSO days two of lower an trends receivable benefit COVID-XX impact our reflects beginning a of payroll The reductions over in of reflects impact a of increase first days, deferral decreased result taxes XXXX. the of

manage of us. full continuing are their their First, own terms flows taking to efforts and with advantage customers are payment cash

has deterioration receivables. is have situation a there our without balances the and we our a Second, a as a customers recovered customers limited terms. We receive number in a of longer faster in business also has quality been has result not resulted generally fourth receivable quarter, large does greater customer demand as customer-driven a issues. reflect who In shift administrative this and significant of in payment of believe mix the temporary proportion increase in of with

monitor We flow of free closely customer teams of cash to $XX for cash conditions. generating the flow in to necessary the our are In cash cautious XXXX. in compared million our continue flow same and to free the quarter patterns to million $XX current use payment we collection have period our resources that respond

in For $XX the revenue of On in capital improved result and increasing of trends sales a the cash million we to to a generated cash fund compared quarter use basis working $XXX outstanding. free full-year as we flow XXXX million days XXXX. as

to to sales ability by certain offset days due of defer free cash the is under payments partially the higher primarily year flow the in CARES tax federal the Act improvement the For impact outstanding.

As capital in we'll continue our if several quarter to the continue utilize quarters some working the needs. cash meet demonstrated trends revenue improve of over balances to existing next to

XXXX. deferred now by will payroll to earlier required back the to And Peter. I mentioned of also of half the you, be We pay taxes end

Peter Quigley

as labor Thanks details, reflecting with operating gradually mid-year for good economic summarize Olivier. improving those from the I'd coupled traction and QX conditions implemented we our results model market XXXX.

across of segments all We our including are momentum new by and continued wins. pipelines operating encouraged customer healthy

constrained mid-skilled talent While to for customer low win. positions especially supply

for our to person post to fulfillment, return to vaccine more While dynamic for to continues mid-skilled expect talent constrained especially and parents supply resume as positions instructional in challenges we work. programs to improve enabling schools low accelerate that delivery

the XXXX. Olivier in a in population optimistic provide be when now second the thoughts we're expected higher the see percentage ahead continued we'll Looking that of to is momentum to COVID-XX. XXXX vaccinated particularly of on half year I’ll against welcome back additional

Olivier Thirot

Thank you, Peter.

the two we our not on impact demand for an For uncertain. was conditions provided have as highly outlook economic resulting the services past quarters and

in to planning and visibility first recovery we completed During anchorage annual our are a steady which the the we have cycle quarter us additional pointing trends that demand gives continued.

we’ll result, detailed the providing and a an progresses. providing for more As return consider we’ll outlook quarterly to as full year the expectations year

cash to evaluate these consider crisis early the to available seen impact continue metrics from We us on we’ll tool we debt confident in and reliability the and scenarios earnings, liquidity scenarios the the and the assess capitalize on covenant and As have to and of of to remain we adequate response. we the financial of recovery. have that crisis flows stages emerge demand resources

reach the advance to are the purchase We the and to steps in our of quarter expand completed we of segment. Education also Greenwood/Asher strategy taking our

evaluate choose in to to to the our continue our growth. specialties opportunities strategy accelerate We focus advance we to inorganic where

likelihood second reflect recovery More expect gradual year on of in half crisis continuation increases and trends our XXXX. continue mitigation the we demand continue to are the for steady opportunity views in are current until likely the we trend into half the of first for of declines pandemic that Given in an of a to of the well to the specifically, year-over-year measures the impact various substantial XXXX, with XXXX. revenue more anniversary economic March a

range X% first the environment XX%. to especially is in but half For year. to uncertain the be up to expect still full year, The than usual the of larger revenue improved we the reflect

up We years will activity on revenue targeted to And industry to two pre-COVID products expect growth additional of segment. concentration and initiatives time each that are intended continue the we reach be depending that could accelerate growth. operating to of to levels the geography, launch

GP year This our with margins. XXXX expect COVID-related pre-COVID our basis the be to is around XX for rate included slightly We consistent full wage our from which rate subsidies. from XX% down GP approximately points

some in And to XXXX. our while flat taken to Our lower of margin in GP our margin impact XXXX temporary SG&A definitive that will savings intended intended is also as rate sustainable higher cost of to reductions expiration the with drive specialty specialties, actions. also we new offset of have we drive reflects cost in specialties outlook relatively our steps QX partially growth meaningful discussed, expect recovery respect cost the that keep the strategy to in

half we'll cost that the sustainable additional expect goal We reductions. in take of actions in our achieve line to with XXXX first

to these allow revenue moderate We savings expect us growth as expense that will increase.

extended expense expect which an in, finally, work to all we tax effective income So, of SG&A credit we opportunity X.X% the And be the mid-teens include impact XXXX. XXXX. which recently for up until rate was expect in to X% the

We dividend course allocation capital board we’ll strategy review our demand expect our the the with in XXXX. including of if of recovery continues, our directors that in

Now, back you, Peter. to

Peter Quigley

that year the in I'm that couldn't be to spirit lives. crisis then before part milestone has to than people COVID-XX a in stronger ways October our us. we more close continuing be more creative, to we'll it enrich connecting agile, will mark and this our anniversary considering of confident be purpose the history. our and strategic of XXXX more driven for are I'm and journey by tested Thank we'll difficult us most hopeful you, would pursuing Russ history Olivier. spent past, of steadfastly that XXXX and and from business its intense Kelly's strengthened have prolonged in both work Founder, and recovering XXth even more challenges Kelly’s The resilient emerge imagined Kelly, in fulfill their one in that is growth. to to applying Kelly even our probably chapter

with higher tutoring specialty for close a while we search At reach opportunities we're focus We're a generate inorganic new This gaps. we're acquisition education adjacency growth organic month, an tackling disciplined large. another natural streams And to applying world pursuing the helping forward further Kelly's and learning a natural Greenwood/Asher, work this expands COVID-XX As into a opportunity executive mentioned, in boldly revenue Kelly And move premier new we ended at Olivier education us. create. product, look of space, the same XXXX firm. launching the time, other in students believe XXXX. will it we inequities to and shareholder specialties value the to among the adjacency

in our the our work position priority, their XXXX our take In of initiative, needed amid work. customers inspiring. top and continue them many in to last you closing, long-term the will with heels grateful the mind, thank I'd you thank Kelly from safety our while enabled their whose interest made we more sacrifices prevent to of a to open full-time questions. the directors and us it during temporary Alan, to call will to Equity@Work these your and days significant tremendous that of I'm for The best employees and the making support. going in challenging talent launch connect year all Kelly ongoing effort crisis, to with people turned like sustained a times and for board attaining our of ahead. confidence inequities protect shareholders a who to can they in the On for make interest employees been keep ongoing personal entrusted XXXX it initiative strength dent Kelly's now the businesses enriching to into us during company who brighter us this you has and systemic who our community, meaningful

Operator

Instructions] [Operator line Capital. Nobles first of to question with the you. Thank Go go ahead. will Gomes Our Joe

Joe Gomes

an integration of or it potential more kind going? does potential couple Does is the a that of here. questions a space? Or that opportunity acquisitions? Greenwood/Asher. a the like quick terms One in in indicate on type of one-off just How's do more space acquisition you this of that of provide So, to that in

Peter Quigley

the in there created some been think promising It's Thanks only That months in a ed. between opportunity for end presence going the we higher couple further but Joe. to And well. question, synergies that. is indications grow of Kelly's and of integration higher is very Greenwood/Asher's very presence existing

among lines promising looking no ed. in further my product, executive But synergies as comments opportunities. specialty current adjacencies for in to our invest growth always business We the plans our that our higher indicated tutoring search in a earlier have we're about produce and of

Joe Gomes

candidate I some for steps And be you concerned reduce on you is are scale. incentives pool? might company they there? will go if in seeing legislation of it more Thanks detail of little about end more that would the Okay. Are that. hopefully especially that able What the detail work? return more a here wage to to wondering appreciated. pass people it to pool the Any mentioned What was to be that enlarge taking you the this you briefly lower

Peter Quigley

the shortages lessen when of in expired talent. that talent and QX the beginning back available seeing we the summer. in expected reflecting And wave stimulus a XXXX translate we into were that QX Yeah didn't to package on of

wage The force left you and Our have best talent. difficulties the number increases reopening. women working children significant the availability that wages see home guess Joe, are have and are that is seen of labor have are during pandemic. correlation clear levers two schools their that the at And when biggest the we between when the of parents particularly

is customers to the that talent. in earlier more with would to order say ensure more attract pandemic of wages that I customers are parts focus relative our we our to understand they And and working to So willing dynamic. seeing raise

Olivier Thirot

really our jobs of you which call we look is Just have pre-COVID. addressing inflation then to from QX about we the look in in wage industrial manufacturing is we X% about QX kind that on QX point or to at And which QX. and in in wage the on at QX, the move did if own P&I was plus-X% light inflation, expertise X% what staffing if add history so we double XXXX

a shortage of we also basically supply more thus showing have capabilities on customers really offer. but competitive to the of sign and good the actually pay improve challenges they and our push rate to be some can that's So marketplace our

Joe Gomes

One for Thanks that in queue. me Okay. for insight. more I'll get back to –

So from that be you reopen. hot about to mentioned to to this you for does What talk get for revenues fully X% to seems here the assume trying range. being schools XX% year up that just a topic education as guys

So what assume your guidance segment? there about education the is

Peter Quigley

of seen on mean, drop after well our first as I operating QX have all we of an we improvements big I in XXXX segments. Well, education seen mean as the in of reflecting all have

a reopened. fully model of XXXX. majority basically in schools now through running minority year, going environment we remote we clearly is challenging it are to hybrid the hybrid at to the – of a XXXX normal say, early meaning are of very course to close the things back is them be school are, expect model. next the of the the because we late August course time July, a would I What model that of call what either or call remote a or Of And what still It’s model. for

improvement XXXX. we the Before still in have that, environment close going to current be seen, an to we but QX it’s of believe especially

Olivier Thirot

Joe, the fact And, by as I the correlation schools labor market. people I mentioned encouraged the think – and between we're realize earlier, participation opening in

getting up being line programs. by the And focus some their substitute has administration the are employees encouraged opening to we're our included those by the are schools Kelly on work and that educators terms the and excellent making So priorities. of – encouraged that one we're economic focus local national done of key fact moved in in ensure teachers vaccinations.

Operator

with of Sidoti. Vogel the next We ahead. will go Josh to Go line

Josh Vogel

Education. Teachers just million and last – wanted bit I you. tutoring quarterly think good initiatives rate acquisition, expectation we Thank now off about in And we initiative are about new that quarterly and should the to XXX the the quarterly I given little understanding exited run at there you a our that should recent $XXX around Tomorrow about rate for acquisition. fluctuations? – run once under that great. and what be I'm that build the XXXX mean post-pandemic is the question business just of what think a

Olivier Thirot

mean What highly can that year that last mentioning initiatives I in you new wins healthy of around around QX Yeah. and Peter very did it's pipeline is the Insight we acquisition, we really QX tutoring growth tell what business. look with we and was multiple seasonal Greenwood/Asher at of you acquire new when have organic a also including deals.

of healthy from acquisitions, mentioning. Peter our from with that pipeline, but, including quickly and we quickly and a we I two pre-COVID recent come to organic coming catch to initiatives able get where from tutoring think, wise the revenue as course, at very up was back boost should a were coming say soon boost very decisively would boost very, as and we into I a coming environment, be the better least multiple

Peter Quigley

accelerated mentioned the significant all dynamic only changes the colleges, and intended the that are we Josh. the to that Yeah, in colleges take and being The the by pandemic. just graduating Greenwood/Asher Olivier that as well so challenges the advantage have the position are as support teachers K-XX, to of us districts number – are positions teachers with of we that are one and and their instructors higher acquisition think lack of occurring items well from to is school that frankly us the workforce universities well dynamics that end of both retiring, as

Olivier Thirot

in basically a And are the have the supply potentially the address working, Josh, XXXX. that very right demand of we pool in recovery sub-teachers of make sure actively to quick we to on course side also

Operator

go We'll next ahead of Kevin Go Instructions] Barrington [Operator Research. please. to line the Steinke with

Kevin Steinke

professional rate. then in with the December professional meaningful your terms about you in industrial I the the We've of the the December some And ask the supply. your adjusted of all XXXX most and exit about give industrial on really to talent one slides rates. QX showed segments presentation trends wanted of of the been challenges there exit talking improvements one of revenue

So an versus to what exit in kind drive for you that rate the in industrial XQ? that's quarter December been improvement – of the seeing full professional are able

Peter Quigley

factors. Kevin, I think of it's Well, a number

the becoming operating think environment. uncertain accustomed to more in I customers this are

And the So are think professional of on we the the model they're to with space in operating they’re advantage of expand different of supply keen have into working some a plethora there figuring been how recruiting strategies we’ve our – inroads side figuring terms wages of frankly So even while and able our out on usually us allow with new talent. out additional when the think unemployment to challenges take and segments how sources make that customers And where on certain I talent. is so of demand to to result focus significant. tap in to I would in industrial operate that we’re in able the

Olivier Thirot

exit QX. of course which We an we call early improving. see from a traction say mention in also we during P&I few more in when of our or Yeah. would explanation SMB what did rate good why staffing smaller large things. and as I our soon is to more remarks, prepared you Peter customers was coming have I seen is meaning our would December as as now probably customers One add with I our SME lot a of we businesses start look traction at

I our rate The and digit would double second on center because P&I our growth I is the knowing And the extremely is a would than revenue, around helpful it talk that's profile in thing trending morning we very in about again is call or especially at but around having higher of term also P&I. still I business margin and pure course outcome is business. this have KellyConnect of well briefly is GP trending I think basis traction it of staffing mention rate this say

Kevin Steinke

customers, I been market helping insight among from into slower larger up emerge back you. your maybe you talked and base. they've the starting recover customer customers color. what's signs insight That’s you're what the all of kind to on them more enabling helpful Thank And maybe running? to of very downturn Okay. any smaller get And in than Any about to see seeing smaller but that's here? recovery know

Peter Quigley

to to Yeah. to was two this on factors one, the Kevin, primarily how and I Early trying out I focus, primary figuring full-time possible retain and the a of see workforce I believe, full-time as downturn. environment. they're are, which and not in out they've how employees think in And demand the their figured their many operate pandemic, their in goods for their is as now services. think operate uncommon employment of

And talent. need additional so they

that. were So think I purposes attracting to the they're to for to also of wages importance of Kelly recognize last talent. they helping that coming back the segment

to businesses accept were Our willing they are now ingredient more reality a of current attracting large accounts was beginning as the talent. I environment. key small- to in raise that to because the the that medium-sized pandemic wages think and And a the – recognize

Olivier Thirot

Yeah. namely, sign one some the and don't of yet US, just US around referring Europe. here, point, That's single in We not to recovery SMEs, are business. or in to outside I the the mean, see medium-sized I case Europe. small- really our for businesses tangible instance, sign clarify we of mean,

Kevin Steinke

Okay. wanted and Engineering, Science, All – I to then also for ask that. right. I Technology. about thanks Well, And

some in just telecommunications in and do the You picking XXXX? Is merger the piece gen in activity trending talked are TTA business businesses up, little bit last about space, next the that telecommunications of you see in now? of that do you a slowdown that space. within to specifically how seeing quarter What a in the that

Peter Quigley

to – improving we go as it XXXX. expect be through Well, we’re we

access. been of in work of been people in issues authorizing and municipalities the product, of of affected are entities dependent XG the the the number or has certifications number One rollout pulling regional of the that pandemic other the permits reviews terms permits, the significantly or by have on projects and of

organizations throughout that improve mentioned itself, begins additional been But begins headwind municipalities we the activity expect the the that the to that – telecom to that’s M&A continue business open up, and the to business. for industry normal XXXX. and in further around and we as to so QX, get economy the And will telecom refine a regulatory the back as as

Kevin Steinke

Yeah.

Okay.

Olivier Thirot

Yeah.

We have still stage. QX little of XXXX, bit but a seen of improvement early in

Kevin Steinke

to I level to that target each XX% about for we’ve trends been this in just expect talking detail, then of X% want revenue sort And about, know the segments but to it. for Got some you’d of year? here. to this up broadly talk of if Okay. don’t build maybe of segments you growth go can segment, you those by what

Peter Quigley

to pre-pandemic in all let momentum the generally, wins say we’re even levels. comment I’ll of when true school and all But, customer new and is of Olivier Kevin, as and significantly in I’ll segments wins new I across units, pipelines. get exceeds Well, we And mentioned, the seeing business our both is would at that details. with look the number mean, I Olivier that districts – Education,

of contributions the think will be from – X% business I to XX% our there So all be will units.

Olivier Thirot

Yeah.

I think it’s…

Kevin Steinke

X% you then expected for actions. us SG&A cost from those Okay. savings sense the year would give lastly of cost you in implementing X.X% for you're this taking? XXXX, Can savings actions growth And expect you a the some size to me, just either mentioned

Olivier Thirot

Yeah.

have bit done you what little in XXXX. to Just of remind we a

as referring had an that You our fact might delivered get intent say add I was we in are that the us some on the these XXXX. and mention $XX QX additional QX $XX on you that we initiative our of of that this as basis. especially would are million. at of cost on saving to that's And cost was to sustainable have reductions disclosed that continuing time, And to my I in restructuring we expectations have was XXXX call I initiatives to savings. what million our have the done in operating say XXXX basically we course, we of first top that resources. in we can and like ensure also the initiative cost half is for operating remember million additional that And – potentially it XXXX at sustainable The in full-year optimization cost intent was also the that knowing in fully third trying soon remarks, to prepared savings $XX million included is basically the And including to I where segments. to basically At the we at to tell fact in ready I of what point of new XXXX, look our execute would, looking $XX that new late we and basically were basically model – was would mentioned a course base. that again look to this and think on cost remarks, I would in positively XXXX valuable allocation guidance of do is a

Operator

follow-up of line the please. have Go from We a Josh question Vogel. ahead

Josh Vogel

Hey guys.

it XXXX? SG&A, going in add Sorry, before. here it's I couple on a And actions outlook take, thinking exclude the follow-ups for to quantify can to to when you'd we're restructuring – SG&A the so like of I much XXXX. about how you

Peter Quigley

in really front we mean on Not I've we are now executing to extension going We XXXX, of on at basically, probably costs because half further. started end that of execute to said the basically additional focusing is doing first that be are of Yeah. what some I and actions this XXXX. as in have we there speak what the stage Josh, are we an know

to that, have the outlook it's little can is today. guidance, provided base I anything cost out tell included it. in basically execute not a cause basically, a is about meaning cost disclose think it’s is What I SG&A the too to bit you early the we of that

Josh Vogel

Okay. Understood.

Peter Quigley

the we think an those QX, end in on XXXX. to teams that, in end where that of much going update started we precise niche get front we’re what I are you extension able of of to we'll be have a give Josh, the at

Josh Vogel

Okay. was at And increase, about to customer of? right $XXX I’m at we the number year-over-year which dispute think X% if take out million the I the the just or just wondering million Is $X.X it right, that $XXX off it or reported million? looking adjusted at X.X% is when to looking number. that

Peter Quigley

discussing carefully I that that clear sure what a It's give something was based a on because very point. was make that is question to something good we starting is

starting be point say the adjusted. our SG&A would So going is I to

So from Mexico. litigation to excluding with coming excluding restructuring customer we the as and with of the some was costs receivables the customer integration write-off XXXX coming Mexico what refer from also in in

would good SG&A a XXXX. point for So if you look that look at be starting to the at base adjusted

Josh Vogel

Okay.

release. in press That’s number. the million $XXX that’s So

Peter Quigley

Yes.

Josh Vogel

to Okay. generally XX% to would talking XXXX? And you're is more recoveries the you’re bit we a and thoughts international. as off Should when the about specialties there X% guidance all maybe outsized little pronounced I an Peter your think we but other question about revenue expect potentially assumption know more be on a maybe is segments? see P&I there about Is versus just in that that

Peter Quigley

of the assumption the Josh, expected second year. of return fact I in and half would our to that sort pre-pandemic to the is colored offer by education growth is levels So

recover we So in challenges of has that environment would in economic it ongoing the the be in which likely the to given terms operate. one. International slower geographies be that is to

pre-pandemic we're at business customers when can a already where levels that times implementing is depending at for large is that programs some while it. in on variability We’re OCG. have And

also for that don't business, any through the to On staff And continue. growth see some customers and wins and that we don't in to foresee continue continue P&I variant in expect a believe in to XXXX but of event the that in momentum whole businesses pandemic. those we we seen we nice progression – then we we their businesses. resurgence set to we momentum And the both across expect reason terms pipeline. that P&I this new existing absent see a our or have don't expect We’ve

Josh Vogel

for more detail ones the just quick me. And there. appreciate two I

tax total payroll to I'm sure what split is deferral looking right. Olivier, the this year and XX/XX year? it’s make next Just back, is or expected at it paid be

Peter Quigley

moving up. almost our is our we evenly Act level QX, mean date of exactly activity million QX, more due or The bit basically between CARES in are little I $XXX and – year have is Yeah. benefited QX basically – because, half. from revenue of course, QX of a of last split

XXXX. So front other the at half $XX.X end of XXXX and the million at of end the

Josh Vogel

just balance sheet And in lastly, Great. shape. great is

cash generate thoughts to and plans positive a around statement? there Are continue potential flow. dividend You any

Peter Quigley

in for revisiting of dividend And that discussion regularly Well, environment XXXX. policy a in. the the topic will of be light the board is we’re that

our that – is that continue the to in shareholders. we we are will but board account with to that financial sure that today, see nothing progress So something sharing health the continue as taking that value into is our the Josh, declarative make

Olivier Thirot

to looking. of other need probably we look much XXXX. But are QX we on going really look We related and I dividend. to at QX are Yeah. trending in to are have considerations clarity on more timing the think think how and And I to based how need that, at QX and we QX really

the So the say of step really of situation. assessment would is midyear I first kind

Josh Vogel

sense. Well, question, you detail makes taking Stay guys. my the thank all and there. Yes, safe for out

Operator

no questions Gentlemen, [Operator have we further queue. Instructions] in

may You proceed.

Peter Quigley

right. All you, Thank Alan.

Olivier Thirot

much. very you Thank

Operator

for the be during at X-XXX-XXX-XXXX. for executive service XXXX use AT&T that Service. today available AT&T XXXXXXX. your conference dial conference code The Those code XXXX will call for again playback conference is your X:XX with Event are callers and for please running call numbers time the XX, conclude for today. will February access that for month using today. XXX-XXX-XXXX To Thank midnight. and gentlemen, will That access and March XX, and your That is code until XXX-XXX-XXXX. Ladies one participation This XXX-XXX-XXXX PM beginning International replay. at you access may XXXXXXX. Teleconference conclude

You disconnect. may now

Kelly Services (KELYA) 18 Feb 212020 Q4 Earnings call transcript