KELYA - Earnings call transcript Q2 2021

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Operator

Good morning, and welcome to Kelly Services’ Second Quarter Earnings Conference Call. All parties will be in a listen-only mode 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. A second quarter webcast presentation is also available on Kelly’s website for this morning 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, is, everyone, you be conference Chief Cynthia. found Hello, Officer, through call. second Kelly Financial presentation language, With quarter our Services’ in Safe me which will our today who Olivier Harbor our and Thirot, walk welcome can to materials.

Olivier Thirot

morning Thank you, Peter, everyone. and good

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

data measures call, in of basis. discussed In our financial non-GAAP our an certain our a during to exclude results on QX into insight discussion operations. adjusted of items will addition, an of References acquisition and the growth Discussion trends organic certain reported designed Softworld. give be in to are on basis today the on adjusted

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

Now back to you, Peter.

Peter Quigley

Olivier. you, Thank

crisis levels. execute months with other unemployment and in our quarter. in in Kelly quarter. three The second demand to the staffing we job against The gain the recovery grow. the strategy place, temporary eased the and As and is second the momentum continues firmly solutions that for continued growth market approaching continue recovery strong expected, to pre-COVID workforce to strategy economic entered U.S. of labor with in has

growth against We executing are inorganic investing plans. operating and our growth in organic our model, optimizing

was and purchase our in and disciplines. ever to higher bolder latest M&A approach April Softworld in acquisition largest Our proof margin of our XXXX the point

already organization. the has and begun the Softworld targeted on today, results illustrating results of our in impact entire GP revenue accelerating have see you'll As Kelly's can acquisition

on quarter, the second Before quarterly Technology, a I five year-over-year beat its pre-COVID both for had revenue in deliver while the described talent and earnings revenue line segments highlights. our SET Demand and our with Four Olivier we demand than OCG pandemic. we its to organic Industrial, off line segment constraints In in from for units for the and Engineering since provide and to all the share our of first it growth. All the our to I'll performed June. growth operating International on also the in five sequential slowed in Kelly's it and supply, positive Science, organically staffing last few business revenue Education third strong consecutive the quarter. and delivered experiencing see in to segments talent Professional time outcome other challenges business business, during OCG has exceeded operations performance quarter. or that for based reached heights expectations pre-pandemic hand details positive in Industrial our the Education acquisition fulfillment of and of top Softworld quarter, continue performance, better inorganically. the International Professional and with continues segment, delivered gains

businesses chain As lagged temporarily shortages, some quarter. with economies our and customers have shifted the supply expectations needs reopening for the dampen These demand.

over in a to now more to actions later turn closer these look the it QX share address to take along at the I'll them. dynamics details Olivier with about taking Kelly's results. So we're I'll call,

Olivier Thirot

Thank you, Peter.

coupled demand talent the with activity demand market. our to economic current services for QX continuing in As for reflect Peter and mentioned, customers fulfill the improved our challenge results in a our stabilization resulting

the and comparable the to crisis the last impacted to in COVID-XX U.S. business. on current the reviewing were K-XX declines we year. the Before the impact of by started learning. XXXX, QX I our get period demand, Revenues responding to on presented education in of remote the are moved results, system of pandemic reflect businesses financial severely important deepest it's as

we steep second enacting to by of as As furloughs responded a declines salary full a to time as including employees XXXX, cuts result, revenue actions mitigation expenses. those discretionary in expensive in and temporary the well quickly quarter reductions

to discussed even expense As actions discontinued. QX of most revenues temporary from improved last calls past since we mitigation lows, have on have been year, have and crisis

saw XX% year-over-year quarter, constant currency basis the now at organic an revenue quarter the QX now crisis basis in prior have of in from constant Overall, revenue COVID-XX points looking acquisition the revenue basis to trend we five the are a points pre-COVID-XX depth the currency. the reporting Softworld second year. up is in In QX. All are XXXX, below growth XXX revenue our of Now the growth as prior of levels we our billion at segments XX% XX% of rate. organic $X.X totaled on versus XXX improvement added

performance XXXX. year-over-year reported prior a the also measure pre-pandemic revenue we person in to indicators perform for well recent education in in will to are our the quarter the pre-pandemic second revenue exceeded period, greater period schools and towards our quarter, first was comparable that its growth learning school is good move the the as for the in For segment education time. most closures impacted rate or fall. QX highest even Both Education at segment of pre-pandemic by as XX% June revenue significant of the compared continue

delivery volume continued talent in International and and infection France Year-over-year is talent demand have this hours And trends of performance in for year-over-year revenue be will in of Russia. continued intense. to driven working competition in un-functional the space business Portugal, in local have positive is course, ensure volatility was by because recoveries schools continued and to to in modify supply their revenue education will Our gains their is the possible. adequate in that Mexico improve to changing an the as still both near-term sequential response already and revenue quarter. growth solid rates,

the well reported impacted customer of perform now as later. growth result based XX% from as where has basis year-over-year COVID-XX a XX% customers. up the a all wins revenue current exceeded last is by existing throughout in to base deliver Softworld new growth talent several of and at and softness OCG pre-COVID in And our reporting three year. and And was reporting, the the as well, as has revenue in and segment that performing finally, business talent demand in and experience same segment P&I staffing past after primarily the X% result XX% continues QX oil up and our a in crisis, revenue continued served in cover revenue in acquisition were quarters the revenue delivering in mismatches, demand the on segment quarter, OCG large was to recover. has customer where specialty. fulfillment for outcome OCG supply Organic science Peter growth slight customers decline year-over-year, and up professional products RPO. sequentially. trends period that challenges share second in and well and for is in is to resulting an clinical the continues many gas labs to Science been versus have revenues our organic the increasing engineering and we product basis. each continue and a talent XXX% up has up and slower track the placement Permanent with in concentration on Revenue our growth a XXXX. reflect now sector Our PPO in in revenue has as strongest levels with to is customers the been well XX% been revenue will fees over SET limited industrial talent

Greenwood/Asher in level environment continue We increases XX% in significant on QX at sequentially, with period the XX.X% the Overall, year, amid currency exceed Overall, see cautious Europe are to segments. of basis. XXXX plus region. from in now the up but restrictions compared reflecting in COVID a in impacted constant the SET pre up Fees more was acquisition profit uncertainty in International [Indiscernible] activity or over COVID the segment, in P&I the flat gross the XXXX. further also education same XX.X% fees our we prior to were and pandemic coupled of

prior Our was XX.X% rate On negatively was gross a the to rate basis, GP profit mix. year. year-over-year compared our unfavorable of XX.X% product the second by quarter in impacted

the As second our margin with fees basis higher will offsetting higher margin and rates, quarter. lower those partially XX% generates which Softworld approximately the impact equation recovers, year, point with prior temporary of coupled XXX declines in of the of in with subsidies bank the staffing government business

with benefited SET term international caused some term improved variability prior expand and and Within prior government higher impact the outcome staffing on has the term and the the just acquisitions mix year segments, and of in rate the base the between product by subsidies we sectors offset fees. by year I mentioned, was by fees. rates education GP fees higher service. government largest only impacted Softworld The the GP negatively higher P&I partially were unfavorable swing did from

in impacted P&I and as the was certain in rate resulted declines in addition, outcome business attrition customer In programs. productivity GP talent lower negatively based demand

resources increase specialties. we expenses worker like XX.X% in growth XXX attrition our productivity well the or for performance on amortization P&I, Kelly's for based prior and and second expenses on When in in opportunity impact did the we outcome customers’ increases, as based GP with pre-pandemic basis, the also year-over-year year. currency. constant risk in to in compensation for take expenses, as of higher and to efforts comes include in Softworld, Expenses XXXX expenses SET corporate reflect added rates. on of of responsibilities its education a levels about in decreases The as client Expenses points expense inherent services second our revenue are below the processes. our temporary rise incentive SG&A Our mitigation year-over-year and negatively remain demand other basis higher in expense as our quarter demand quarter. business the reported and international margins in those were impacted. expenses intangible which XX.X% talent increase investment operating and for get with with the additional OCG business

a QX XX% intangible million million reported $X.X amortization. QX, in operations reported Our were million of increase of our to earnings of assets earnings in Softworld for the $XX.X the inclusive results second from operating $XX.X in quarter of compared

from For the at operating segments operations. quarter, all earnings consecutive positive second

Now as losses our turning the Kelly’s gains personal also on include unrealized a whole, back to equity tax before holding. and company the in investments earnings

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

for XX.X Our effective a rate the benefit. was tax quarter

U.S. was from of greater to personal per for share per $X.XX for Our lower deferred assets XXXX. rate non-recurring a EPS And work XXXX. $X.XX of per tax, the decline primarily per quarter, to tax gains reported XXXX rate resulted primarily was the lower gains, adjusting resulting U.K. than share in compared change, $X.XX of $X.XX tax in finally, in the statutory was personal benefit the on earnings opportunity The the rate to QX, per compared the in and this shares share net XXXX effective in second impact earnings share, a QX, impact credit the U.S. of due tax and actually share quarter

Now in sheets, reflected is the April on balance our of QX the Xth, moving Softworld Softworld the to balance acquired impact we sheet. acquisition the and

our of cash in revenue. million from quarter borrowings year-end quarter. pandemic. consistent rapid stage carrying no ago. XXXX facility. in our due Year-to-date, period flow. at COVID-XX that reflect ago. cash to customer on DSO higher reflects the the of balance million decline million The same working $XXX million the acquisition issues. collection was totaled to of ended of cash cash XX-days, Softworld decline last the a reduction balances year-over-year year $XX early paid the a driven credit in the free the as flow U.S. large generated in capital nearly from customer the cash Global As we million revenues was decrease at since the with and year end were of year-end year-end and receivable X-days of year-end Accounts was Again, X-day increased customers was a and reflecting increase we administrative the million of in The our declined and $XX decrease XXXX. received year-over-year beginning of zero cash demand receivables XX% at XXXX of $X.X reflected quarter several $XXX compared over year-endXXXX That used Free in net $XXX year fund lower with to the

I completed we in As the above, were acquisition existing and acquisition with the able entire fund balances. QX mentioned Softworld to cash

back require begin or on Our while to to may to debt now now cash daily revenue And are as you, needs, continue back didn't liquidity. needed in capital levels facilities line borrow to balances And working acquisition to support the levels. existing Softworld we Peter. manage credit financing, recover with surpass pre-COVID levels

Peter Quigley

demand momentum Thanks the recovery by those details, for services for accelerates. and economic increased our the Olivier. as We're encouraged

and growth. pipelines especially We're new five time hiring. segments up are wins education temporary encouraged and segments and as we're and all solid healthy in their businesses full OCG capturing performing customer by are well International sales SET also year-over-year and Our ramp delivering

and as demand have and growth. sales recruiting to to meet continue warranted support and We add Kelly will resources increased

demand As based exceeds our well as actions mentioned, and outcome a taking our level, continue On we are talent we publicized. as business. Olivier through macro in the challenges quarter, the to U.S. additional fulfillment P&I last well pre-pandemic discussed work levels in and documented shortages business

surges, across as of the P&I expect the to are more and just delivery with unfilled going work. industries. and up-skilling right before parents do retraining mismatch recovery As the fall, returned We supply began. talent economy improve schools proper than instructional skills of to is highlighting overnight workers matching the in-person Yet more supply. not are resume in many skills that COVID talent The need and a structural fixes. was Businesses requires present adequate jobs

trends, GP which in segment. and the Olivier businesses, BPO P&I Connect large for second revenue broader our lower Kelly these customers as among Beyond we quarter, in noted saw and impacted the demand

of chain higher margin several and believe the strategy. confident temporary, We in supply particularly we business remain outcome current part microchips demand challenges, ongoing our addition, based as customers impacted easing In quarter. the of large in based outcome specialization is

We are P&I. moving taking growth numerous actions revenue in to forward accelerate

and staffing As demand their can efforts expectations. in-person I second relationships increased increase mentioned their resources market solutions. support intensifying we the high add profitability are speed reopened quarter, the an in technology recruiters have productivity investing streamlining price meet to client And boost to warrant work. critical invested increases to business additional processes are based last implemented quarter, and revenue. recruiting In additional in sales dynamics demand branches where and our where in we where to support we We our to we for outcome margin, client exiting areas doesn't

now to accelerate longer provide additional than we're returned optimistic to deliver on actions clients invest growth. Though Kelly's benefits, segment continue to to the will in in unnecessary I'll ability to pre-COVID meet and and set P&I also re-skilling XXXX. take recovery is designed thoughts wages collaborate remain Each and back drop welcome competitive demand. We with the current about job of these requirements anticipated, growth talent up-skilling. the to across we to Olivier

Olivier Thirot

Thank you, Peter.

the As mentioned, And Softworld we'll outlook. included quarter. purchase Softworld’s have reflected of of XXXX nine in the at results. the The of our months we our completed impact beginning Softworld of is in now activity second

in technology margin quarter in demand, As will GP in we growth our structural Softworld saw the acquisition a results, specialty accelerate high revenue our the result will second high the in rate. and improvement

well putting current reflect expected results demand increases As pressure as of talent of continuation are fulfillment. on in look longer quarter our trend the of than on for continuation level the mismatch, of current we the and views forward, second steady as

XX% year, XXX basis revenue in to expect and XXX currency to nominal points acquisition. to points including be XX% up the the Softworld basis from For impact we full

talent Our in expectation supply related current continues that us. or available of taking there the address and reflects restrictions the business improve Demand changes that expand we steps COVID-XX. governmental mismatch to talent are material are will to no to to the

current specialties. were than in our quarter recovery our outlook we margin of slower expecting last primary noted, the pace As lower reflects

will expect so geographies pre-COVID that serve will and already concentration, each We on and segment talent do segments has project for supply mix. operating XXXX. later in in XXXX milestone crossed and levels that we timeline revenue OCG or depend reach to the industry other

temporary growth specialized to expect are revenue negatively do growth We We enacted services. launch growth. legislation to which continue intended that further targeted will staffing, considered international that be organic segments Mexico, revenue initiatives will accelerate the by prohibits impacted in rate not recently

opportunities to margin our by profile fees and see delivering Although services. we specialty higher improve margin

acquisition. expect be Softworld XX We a GP to including impact rate basis the point approximately XX.X% from our

both based on more now pace fee Our gradual lower GP of then margin And expectations are have improved the growth our faster rate in business. growth specialties.

to cost in definitive SG&A we temporary expiration steps, increase. impact driving cost cost moderate that the partially past savings taken expense to offsetting The place have We meaningful reductions XXXX. the growth the revenues are and we are year our savings forward sustainable look in actions as expect in of of

have started growth initiatives our in We growth. education in specialty make to accelerate also selected organic investment to certain

we XX be in, Softworld. up Softworld points included in SG&A impact expectations point expense XX% all XXX our acquisition basis to basis to amortization of basis on X% an from asset from expect intangible non-cash including So is adjusted the

declared as rate double-growth. And strategy, to executive has And our measures Class quarters, with is have low $X.XX per these delivering the includes B since effective included finally, The work the We tax which income on utilize on beginning EBITDA both first in common share the extended morning EBITDA the of for we crisis. which an have in we COVID-XX shares. quarter our additional payable second A expect and our this dividend announced Class through acquisition we Directors XXXX. we of impacts our materials. of tax progress margin has of As started the Board teens, earnings of opportunity been the measures that credit, dividend and push

expected, allocation recovery demand policy our in strategy, now continues, Board Peter. with we As you, back Directors. And our of to capital will including our review continue dividend to

Peter Quigley

Olivier. you, Thank

points recoveries the anniversary clarity the we trajectory. gaining low of we're As the new pandemic, on

by in are increasing our outsourcing staffing We and encouraged demand businesses.

K-XX our so instruction, able businesses growth already up in our future this poised to ramp Strong time in and growth is continue it the resume pre-COVID to staffing business schools as later fee rates is points year. companies education confidence as toward to conduct person long full Our and accelerating sustained customers hiring. growing are

Olivier the Directors for the a we're As noted, and crisis. and specialization patients Board our M&A of the dividend our progress with approved making recovery of sustainability reflecting quarter, the confidence strategies, shareholders our appreciation of our the throughout in

Moving forward with in in will expect challenges talent supply. continued increases demand as the continued we noted, be coupled

at people to address initiative tackling helping these pressures, available of equity the prevent talent from barriers with by work Our some systemic is connecting that work. pool increasing

we talent help As and attract competitive in brands improve labor clients market. a their employer

well organic evidenced investing synergies growth. We’re Kelly XXXX to in specialties industrial, businesses. of MSP, in for continues growth industry, as which leveraging in strategy. K-XX, brand At is pursuing the such strength we Science, to growth the key Kelly's recognized one drive targeted of we light as of bottom in new from most education. already Softworld, our same our acquisition and is as and delivering higher the brands time, Kelly the in as specialties, and M&A brand specialization recognized is We're own the enterprise, are value as brand. the bringing most existing top The opportunities Engineering, by Telecom, our evolve high line

quarter. forward ability we economic tutoring our and even open encouraged interest and specialization P&I our confidence to thrive, for our mentioned call recovery talent help them. of are For Cynthia, Kelly with is in customers ready and days to moving lie product for brighter services now commitment questions. the in strategy and professional the the can I that in a you customer example, the we're ahead with new by last level K-XX solution

Operator

come question Thank your will Kevin the of is line our Barrington open. And first you. [Operator with Instructions] Steinke Research. And from line

Kevin Steinke

morning. Good

Peter Quigley

Kevin. morning, Good

Olivier Thirot

morning, Good Kevin.

Kevin Steinke

to and the industrial more just you what's first referring expand outcome addressing BPO to you're going based mentioned and talent on with can Connect wanted you you're regard guess ask about, how and attrition? to specifically and and I attrition Kelly there professional that? on I

Peter Quigley

Again Yes, morning. for question, good so Kevin. thanks the

So, in mentioned the of inside hiring on the as the employees businesses we Olivier outcome. outcome responsibility and based our outcome P&I, in delivering delivering take the

in impact on among And our there therefore it to mitigate attrition based so environment. competitive to GDP. on and the when we have inherent the have in one when We negative employees a risks of And the increased that the deliver we is employ that's services, that's we but think it's business. those has characteristic such plans temporary, we're And something just our place productivity a it outcome is risks. of on talent

Kevin Steinke

gaps? about ongoing you Understood. improving But and play skills what supply professional specifically and how or to you within those clients talked up-skilling in And, schools mismatch, do skills retraining industrial? the reopen you also Kelly address potentially work and with mentioned does your role

Peter Quigley

we customers Yes, to the with they deliver business. skills their regularly need what to are working identify services our to

And those different the you example, rescaling for to and environment. hospitality coming some that and spend coming manufacturing up-skilling we for example, individuals sidelines, fit, industries, from people when leisure, need have be to a so may off time

get customers roles more those source to the customers particular individuals do way to a is that So fill benefit see capable short-term to of with it establish that working accelerate of because gain more programs something customers quickly. talent they and training we the for skills

Kevin Steinke

specifically SG&A bit the a the investments can expand you organic and those and education engineering science, maybe And technology on organic little just and specialty? and investments outlook within touch more on

Olivier Thirot

a year view SG&A. expectations little it's to I QX because of useful very probably think also you Yes, related understand full on to first Kevin going bit its I'm to Olivier. give a our

that out basis, So on are up a if is XXX linked you to you've that QX basis currency Softworld. points XX.X% SG&A at constant look our of got

point Then, at we've variable organic from based XX% low XXX about are of incentive, basis. basis basically, of we about got this about costs. mentioned if coming pretty mean include incentive you you were have out and XX%, what they last on what year, And know. course an I were Softworld So on

had So to XXX as that, QX year, we we about we salary course, that cut is have the in year. meaning which That's points completely follows you course XXX reduced the points points mention in for on. I year, it's there investment then last mentioning. impact of so is additional are have what XXX an we basis QX, SET of then by have we still basically we call and on going education last And variable know basis the that, that of but performance, in some the about basis especially restructuring of QX depending actions linked last in but and versus [Indiscernible] also did

you the now, basically to XX%. if about outlook year, give of So think we X% an full

call So basis. first of all, it's what on I an adjusted

excluding XXXX our So it base. is from

$X cost. and dispute also customer had we million which $XX were a million and QX restructuring QX between was costs that about about which Our

So first about the thing that's the base.

the normal impact So if coming from referring got now of what improvements I specialty to base growth, about you organic incentives impact, get this linked performance. well same as this point also, And impact type the amortization high about in you and with got investments to point was X% basis our have the about QX, XXX coming in I businesses, we certainly Softworld education, about rest. XXbasis was from think of you from as sharing should you then to you've of think XX%, intangible, about about think

need these So way, think to the about are guidance. basically our you

in to referring QX is what bit I look for the little So last versus the of of year. it think at good for year. dynamics I I full again, would to look But explaining, a was year way a current term

Kevin Steinke

pace those helpful. can That's opportunities on with about It's guess, guess, just that the see little those regard investments, just incremental, you maybe investment? and to increase investments I a leading you and growth I more you are talk the that are again, of to expand

Olivier Thirot

with rules in and didn't quarter an time them that one initiatives, soon of started Yes, where we mention done past, anytime top Softworld as the acquisition, good course, trajectory, an are around dynamics. growth top times Softworld with want of it we ago, the further but mentioning the the April we Kevin we’ve market investment. to through we the have meaning do that's going the have immediately by some as that seen of is be three XX%, we we well, last we dynamic to went acquisition, was, or have have organic adding knowing accelerate line the boost momentum, double-digit as on we we line to have it months for right that this the good

the Again, education the you and we putting this know, in appropriate. several two technologies. really course, existing smaller, have and momentum as initiatives. we And our the it's investment unique organic So of very have way because engineering, keeping Kelly on other is is in also in recovery phase, some investment

little we base them and some where we around times several tutoring, bit did to now with but we need a is now that. of Peter we that really you One know market Tutoring, booming we what areas capture investing in to might goals. a with see is like are basically develop where what mention on tutoring invest especially to develop post-COVID also know future

Peter Quigley

the Yes, conducted of about Tutoring And and combination demand districts Solution. called their and We Kevin, gap recently as parents we caused very we was and state are of in that think we recovery and pandemic federal well a for released the organization by governments. the government school from partner with a Solutions really Tutoring that that recover very local COVID the students promising clear that XXXX. that the funding students. year with It's the report the gap concerned as think prospects helping year, there's coupled school help develop in essentially, XXXX districts

Kevin Steinke

prepared helpful. that mention Right, actually exceeding and And that's demand is and pre-COVID industrial comments level. your in you did professional

fulfill the So, the available able and more demand. of coming I being it's matter see to having it's a and encouraging demand to that supply of guess, is there back but

sure you make to demand. can P&I? I I now is top that's real mean, that So to going meet right priority in is guess that surging be your focus

Peter Quigley

staffing when of Both And side, I that Kevin. that that the for the the demand. we does. generating is business absolutely. of all be That designed And for it's repair our to additional the steps more as we we solution, Yes, of perfect think will to increase customers capture ability are expect in temporal. on to recover that. mentioned based it and business, around demand outcome easing said, it

Kevin Steinke

Right.

you or that your indicators have Just one for me, or impact at having question the the any half of any the last with second heard in Delta variant on clients just year? from outlook all anything demand is the slowing your discussions

Peter Quigley

seen mass the have mandates, for we've example, months. of in customers a some Kevin, for reintroduced couple time first

customers. seen say due of haven't I We customers, any don't widespread seen shutdown the we haven't variant. facilities Delta to but any

the disruption shutdowns a any automotive seen microchips. time companies Delta in days haven't some We due some have of the But in seen they to we to yet. result for suspend example widespread economic caused shortage, as of week, a period microchips to activity XX access find operations which for has while a maybe variant

Kevin Steinke

taking the insight. questions. Very for helpful Thanks

Operator

Thank you.

Josh of question is line the next Sidoti. with from line open. And Our your Vogel comes

Peter Quigley

Josh. morning, Good

Josh Vogel

doing are guys you well. Hope

Peter Quigley

Yes, Josh, thank you.

Josh Vogel

couple questions. I a Thank have you,

your number orders environment. model, a higher meaningful who clients the in changes, bit outsourcing client just open thinking of going size in interpret level today the Perhaps an to the are environment one's putting to little thought constrained client some larger or they're or First supply and given predominantly even now up the bit did about base, and mix the in things for especially house starting little further. a maybe

around thoughts that, some general please. Just

Peter Quigley

perm BPO our suggests in think to is are outcome to their some and least the also of is which practice some labor amount or to we hiccups the last solution notwithstanding which Josh P&I the discussed second talent both same some and to would seeing more I than levels, customers, and large first customers as their in a processes supply might healthy seeing talent to good products as the use at of us both business for in we morning moving an allows in Yes, but that about are to based is business them well related customers SET that introduced and in our I contingent solution take outcome otherwise issue, periods in more advantage to again, at the are time of P&I chip our have their address an contingent exceeding talk demand using dynamic pre-pandemic a time quarter, demand that as longer of temporary the point customers they full increasing more hiring I especially essentially quarter, resorting to time opposed we their employee. shortages order

on, So there are going taking I away as of think some the from pandemic environment. shifts a result companies experience

would are offer. those couple so that I a And

Josh Vogel

great you. are Yes, insights. those Thank

outside theme is obviously, even So the an that of assumptions mismatches, potential in increase but the constrained big the we or supply and see expectations environment labor should pool.

back stimulus. government going just school So parents, unemployment that up going are frees curtailed I thinking to you be kids was to have benefits

lag was I'm could stimulus is time and wondering a fulfillment. curtailed, reenter? several people should the it benefits think could the curious, or what actually start order and unemployment do immediately and before could pool to meaningful happen is take your the you in something once just thoughts be there? are labor between vessel So something really that to that I just it months especially

Peter Quigley

something a early pool, on had or enhanced new time, that the the all we unemployment and still it talked judge impact in to still Josh, look it’s early at talent. resulted it it's state's who that wave appear Well, the the benefits, that labor of about impact eliminated suspended the doesn't it's has what

the off And the and instruction experience least an because have the would see impact. sidelines bigger there to states and again, the might XXXX isn't enhanced judging did schools suggest the say benefits, that as our during come a from in within did that at going but enhanced concerned, schools anecdotally began we eliminated as So that benefits for be reopening additional looking see, immediate are when we reopened XXXX, believe pandemic own it's unemployment talent work. class the We far have that we early, impact. that and

they're So a that individuals, the that's the that to provide people is safe. the workplace back that is will could number some of coming encouraging. And third be vaccinated assurance potentially to in increase factor that

Josh Vogel

on talk you them end going facing whether what's to about in the it? investments? Can is on that just you client candidates, attracting in the on you on the enabling of thinking client see any I on curious accept your facing support got I'm focused and you. processes investments boarding, And can they your making where be Thank any streamline assignments? about recruiters. deployed investing it. about Are you're side, in technology technology

Peter Quigley

reaction manager has it processes question. that try to about that our very deployed go relatively It's it's way. we're we've that extremely used use through does the solution. I a very been our need. from a that Helix a quarter essentially streamlines Helix and in user it's clients. currently been And response excited in this answer customers kind allows hiring to out our to And MSP organizations what that called customers basically delivering in technology hiring of take with we is it customers Josh, the introduced have been And space But the technology And something segment for. all for of of the last the guesswork they positive. OCG have Well, said, not, to Helix. first in they has the were very to lot talent the would as of asking market does friendly positive. otherwise a it what platform And And to managers from it

technology work other solutions. we to where to identify eliminate also are, So technology businesses we're our and with it OCG, points. pain includes points customers And Helix regularly but their bring introduce pain looking into product, what to that our for those includes opportunities this our

Josh Vogel

the have you. quick to I for the year. outlook thank Great, balance couple in just relation hitters a of the

The more a certainly you and hire little to the can we wants Just continue think first tougher strong was thinking or QX next QX first Do year. get demand. of balance half saw then of certainly what one in on the just The over you're in pent-up thoughts that there? that the and bit year? get results direct perm once comps

Olivier Thirot

all one the GP of for reasons to rate is why this year expectation increase the we have Yes, XX.X. of

are And seen to one to is percentage we next quarters Softworld, from recent coming I points actions, for boost continuing, Of bit. of P&I of have is for also see, they time at months, I the confidence, mentioned, momentum think over CBNS, the three good we course, P&I. also are acquisition in of very the bringing the we the we XX going or of in little as coming education, that rates among going issues only. one mean, increasing through least higher go good education, in some basis place, all the in I the believe But and SET. are mentioning, issues, whether course, the education, environment one GP reasons our so on sources it's where why constraints as see Peter supply traction, especially with that we think mid going side, you a the is but probably comfortable there think horizon, was also that's But the bring down that structural the to supply also be but some key to in an We comparability expectation up. are reason, that's our

Josh Vogel

questions earnings little the seeing then, you or what that in conservative at at time? you discussions, this variant a be disruption Delta broader And is other bit assumptions reflect may leading a potential further, prior the potential the revenue, outlook, the just one looking or we're point client any taking to, of within outside of into than lockdowns for this seeing bake or

Olivier Thirot

what that and a a some we, But seasonality, get Yes, better view the on mean, variant the COVID improvement, to is probably on was cautious business mean, and I multiple on half our of assumptions course, these combination, and with for second the of bear on. QX. always based getting in so because also of year, I of on variant going is QX containment through something view

So again when our we have for building been still QX. especially outlook cautious quite

Josh Vogel

a SG&A. year. the had around you just the gave lot lastly, quarter, last just hit you information. basically of And I you Olivier, kind a notes last in base my that get Is I was use million think number that good of $XXX it still? of number us reconciling

Olivier Thirot

double Yes, check. I mean, me let

it should think in be I same region. the

I one notes. Just with need my second. to confirm own

So one second.

to need the like I I would the Yes. million. just go I Sorry right I think mean, No, $XXX confirm have same numbers. page. to

like-for-like, and a he's view ballpark, So, what just basically adjusted give event on, the with good, one-time pretty base I so where this is yes. more but close. one but that Yes, you be. and would currency that's fluctuation restructuring I mean, eliminated should I've or to call customer,

Josh Vogel

you thank look forward my to Well, questions. for I taking soon. chatting

Operator

Thank you.

from Gomes question comes And Capital. next with open. of Joe line Our your is line the NOBLE

Peter Quigley

Joe. morning, Good

Joe Gomes

question. morning. Good taking Thanks for my

how the what might synergies. synergies one maybe that off So acquisition? some just more opportunity of Softworld and Softworld. you start be and on bit a you seeing if going Peter, mentioned expansion you're on a on to little just you expand with wondering an integration And I know was about able

Peter Quigley

integration The morning. of thanks Yes is and Joe track expectations. good on and our meeting all

because demand were customers every organizations U.S. for. And significant. technology, to, that its of they overlap provides and the are cyber of know of customers. The because was talent we high attracted the on it's the that of early, that Softworld are support it kinds our as that the the of synergies security, we in not in network fact one the the Kelly Softworld excited and at quality all we surprisingly the about are as the talent that well are opportunities need things engage We promising organization, that Softworld think that things very between was services but have behalf customers at development, frankly, to

into based Softworld disciplines on to the are one. And two, synergies has into its in the in ability customer so expand Softworld base And demonstrated platform to demand. the new Kelly, profile of increase customer the then

base. our there our new into will particular customer customer a Softworld an shown need adjacency. build we be solutions it technology, have very effectively. inside and science not some adjacencies businesses will allow for out specialty in but a specialties has And And a only customer, could provide a to would adjacency that ability that So think even in in

it's so developed Softworld early, comment the the relationship very reaction the been the Joe promising. are are Olivier has again, promising. as had far and also but very that between team team And Kelly being So well. a customer

Olivier Thirot

the on you financials. Just some to give views

for are track of XX the which to weeks due was to the has we we with add, the so what and just our is we're expecting margin completely we instead XX%, point invest, on expectation expecting basically, starting XX%, so which roughly. reference, date it we're EBITDA maybe called a weeks. activities $XX $X.X what accretive, So XX million, of And of despite as around of quarter, only is million, revenue been acquisition,

you may double-digit, that's is said. we something growth consider. Top still line also as So

growth our with value expecting. line in and dynamics would the say expectations completely I were delivering, So we

that is all So on track.

Joe Gomes

with use Olivier substantial appreciate us Softworld cash Thanks, remaining the I could the acquisition, that you portion of is for go we that. balance that that then continues obviously And the of the that as remaining the is back federal and Are to remind to the how cash, due on much then level? FICA taxes. to you increase demand for And across comfortable business? government in

Olivier Thirot

cash. million excess, run we of to about acquisition. $XX pre course, we little of have a as ended up was with need so we $XX the not Usually bit it as I quarter business, big Yes, this mean, Softworld million

the At roughly about deferred the are which of we million, $XXX $XX pay so end going So to December, was there. foam bit have to million. of payroll half a little need tax, of we

of have revolver of of between as now. our million now And have that know capacities that $XXX leverage $XXX we You to we variable no shy funding securitization precisely knowing and million.

continue potentially basically top also started. have of continuing to and improve capital line sorry, is continue and our growth as working potentially We do our capacity we to have course, fund in things two momentum we ample growth the one

fit something our that strategic is again again this with Softworld Here would something priority. if our Softworld with priority would if there fit with there that is strategic with year

or fund So we with as acquisitions really existing well believe as acquisitions we working can facilities. capital potential our

make is are to continue we days, going we are progress. XX Our now to DSO below under control,

liquidity. capital So feel we our cash our available expectations we working basically level basically with have of the comfortable and

Joe Gomes

last me, one then just level and some Peter, to high trying for it's question And kind commentary. here. some pretty of get

can't bring the you of it at looking saying, their you? numbers surface, stock the to personal are earlier over the it's the to to on not month in the and, past Kelly on information. performance over see, the one just Is you're are past and that questions reported good up I numbers months? if at XX with on impact There this Kelly, below something other I some if of are? really do And that at So in any are you concerns you the morning have Kelly's and least on kind to and investors mind, why the group willing go from in you Is this they months, that, would, that what stock I is Thomson you lows. up your to group the it that is every class Almost of look Thomson XX% returns capital XX%. And, looking had based very adjusted competitors quarter, dividend. the a XX%, that Thomson, talk again Thomson XX else? fact be main look again, what was well, the people up we're is what only well, of XXX% their saying say, XXX%. to XX according peer off XX% can't in is rebound say, every what anybody obviously pandemic When up structure, reinitiating And structure

Olivier Thirot

feeling I it. it's else. Peter one than them [Indiscernible] assets, that value APAC by the our mean, of mean, underestimated basically know, mentioned any we about difficult EBITDA. I always to these my market. on probably generating think anything value we of not that please, have is more the I this are several is is And I times, assets, those But add have it's, mean, and one-third I price of think, to

transforming the that I I did on you of Peter, be add? proportion would although we any to the probably today. still you specialties is things fact again a ourselves specialty mention we have margin The a think, and would company, moving concern good second lower that are item, value we have is our do concern, supply temporary probably there probably as a say, where side, business, other

Peter Quigley

to issues minds investors, or come investors the So all to in wouldn’t of the do potential I Joe, up some pretend mentioned, into you get our that want of of conversations.

we're and understand accomplish. perhaps I the structure the work that to higher if on and in positive what I waiting think but that want from trepidation, can trying has on think focus some to simpler the But created, to say is process being and terms transformation a we see our don't probably investors new reaction in the that. of we've been there's deliver I to specialty I think margin business

Olivier earnings it to as as was mentioned, shareholding think asset the in create in JV Softworld I you the and not huge some and forward. well, said, represents a in a the confusion way. in Persol But both a as step meaningful marketplace. does And that is contributing our

discount we So margin, that answer structure, I have dual but the reasons lower But say at But at competitive business. in than Olivier some SET looking we set I'm work to that traded know and other have the to any typically to discount, a have our a what the also about to competitive be at. still don't that do. the that could information mentioned class we that on don't staffing the extent, sure is Thomson from precise you're dependence from we historically traded exactly think I have

Joe Gomes

Thank you, Olivier. Peter,

think as missing much I we're trying to like And that an there's questions to if becomes hopefully, that in the seems excellent in had. taking see been them. share then all are it to pretty Thanks I good the I'm That's near-term, guys doing all here. you and that, price. you where investors same the start for job reflected something and page and have doing just but you're guys see moving to job on the

Peter Quigley

to Thanks, you Joe. Good to today. talk

Olivier Thirot

you. Thank

Operator

moment, like continue. Please Instructions] moments. [Operator have you. further It allowing please. in looks One Thank And queue. few a no we questions

Peter Quigley

good We're Cynthia. here

can wrap call. We have the no we further up questions

Operator

for call does and today. Teleconference conference Service. and Thank your for your participation for you Ladies AT&T conclude using that you. gentlemen, Executive Thank

You disconnect. now may

Kelly Services (KELYA) 12 Aug 212021 Q2 Earnings call transcript