Earnings call transcript Q4 2022

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Operator

Good morning, and welcome to the Kelly Services' Fourth Quarter Full Year 2022 Earnings Conference Call. [Operator Instructions]. Today's call is being recorded at the request of Kelly Services. If anyone has any objections, you may disconnect at this time. A fourth quarter webcast presentation is also available on Kelly's website this morning.

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, Olivier everyone, through found call. Financial Keely. in Hello, who our With quarter Kelly's Officer, materials. which me conference safe fourth our harbor today can walk presentation is will Thirot, language, Chief and our you welcome be to

Olivier Thirot

Thank you, Peter, and good morning, everyone.

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

trends measures during addition, items are will our of an on a results discussion organic acquisitions, the the today and be into of growth Russian well discussed impact sale financial in our in data to of RocketPower as call, adjusted basis on Discussion reported operations. the our In XXXX certain the basis. of to designed exclude adjusted give an operations. our PTS, and insight on certain non-GAAP as References

that also call deck have We provided on the we today's using are slide on our website.

back now you, to And Peter.

Peter Quigley

in with and of continued sector, full long a context pattern to uncertainty. Kelly's perspective of saw slowing In current persisted mixed move and economic growth heightened we the for expansion dynamics and high-tech line results. the provide sharing on quarter Olivier. amid in I'll following start costs some firms my more balance deceleration by economic hiring. Thanks, through labor the market bring fourth as of aggressive layoffs the to year period third the The year quarter

after growing activity consecutive months in growth. cut volatility amid In anticipation economic this consumer or of rising layoffs, not by a of to to other Manufacturers Workforce rates. also XXXX. sector number reductions scale headwinds services began in financial jobs XX and back interest sectors by spread in market greater hiring contract employers, decreased of the as broadly impacted driven slowed spending, sector

dynamics, the remains add these care for and quarter, a to slightly albeit the economy health pace accounted to Notwithstanding the recover the industries, employers tight. from The labor in bulk jobs these year. the market the continue gains as pandemic. fourth continued slower of to end in Services retail sectors at

the force Unemployment relatively sectors. remains openings at and labor historically to fill is growth. net participation The unchanged be steady, despite rate elevated continue low those are wage in job levels. vacancies to difficult result,

higher the revenue headwinds emerged half margin from effectively adjusted margin, gross business. executing of on rapid in driven increased line economic growth its as outcome-based gains Even in specialty solid year-over-year, the XXXX. laser-focused year, growth We achieving top and Kelly in strategy, business expanded by SET, unit our our and Education second businesses solutions. profit the Every in remained than OCG XX% to we above more gross of our Kelly's a ability expansion year-over-year, translate first our operations earnings gross XX significant for time in higher profit improved XX% margin, lifting margin to growth. years, by demonstrating earnings pursuit milestone in value And our

in shares ownership for and liquidity interest Persol arrangement the Persol $XX Persol strategic and portfolio held bold off. repurchasing reduced achievements Kelly process. strategy our venture, a XXXX our transformation, signal between our streamlined stakeholders. Kelly our in and created also joint all paying is million the of and our accelerated action while as We specialty our ended value of for additional common unlocking $XXX ownership cross we these million our Together, by marked that year

invest inorganic growth the preserving more future. real our net the to holdings, to pursue the a dividend high-margin, of acquisitions in million capital its capital portion authorized to we transfer company. remaining growth a noncore redeployed And we of initiatives. to Russian common strategy repurchase estate Russian from acted and monetized our to Class additional increased finally, in We pre-pandemic And level our decisively while We advance transactions a shares. A ownership to unlocking of $XX proceeds high-growth outstanding those operations

impact in the of Yet with acts These Kelly of the parts a its growth. year market solutions and in tightness in challenges. The moves that labor well. economic are a I revenue wasn't more visible combination uncertainty, mentioned profitable of from demonstrated This in our SET. these mixed portfolio, especially resilience contrasts quarter. with earlier, pursuit The our in P&I indicative in outcome-based in lower contributed which quarter performed new of segments, and urgency and to heightened without became of greater the higher-margin Kelly, Kelly's fourth deceleration growth products staffing

fast Among space. across We basis. year-over-year on the demand. and with pace our quarter remain other higher-margin businesses performance on in specialties of segment, These areas resilience which our grow the achieved increased of Education Greenwood/Asher all this therapeutic a pediatric growth to PTS, continued both at acquisition a pleased recent is revenue

And delivery provide line of integration customer the headwinds toward we're near OCG, realizing demand in a charge details. these to RocketPower's diversifying the mitigate adjust to of RPO challenges, impairment the in expected outside space. Kelly's term, quarter, winning combined We're business about in accelerating recent new base, help efforts we RocketPower, the steps made value to sector fourth our ongoing the customer high-tech will taking acquisition Olivier this SG&A. In and Notwithstanding measurable leverage in from impact more declines high-tech RocketPower's goodwill This which relationships more for continued services the acquisition. model. top in resulted We're strength sector. progress to the

in our in fourth costs the response manage temporarily on In experienced that decrease swift SG&A a focus term, took hiring action Beyond travel. near RocketPower, quarter, reducing stepping we across in management we're to pausing up to leverage Kelly. the we and

ensuring evolves operating situation our to in our committed our As performance. we're reflects base our cost the environment, priorities and strategic XXXX, macroeconomic

X-year Longer This precisely to efficiency our growth of necessary to each possible of our approach gross operating business the term, includes as to as we anniversary work our the segments, continuing as profit expenses assign X more convert our with providing visibility earnings. we're model. reviewing and us objectives into

For more details and I'll full year on results, call Olivier. our turn to Kelly's QX over performance the

Olivier Thirot

Thank you, Peter.

impacted have year Before some Peter our results, I economic dig headwinds, been on first. as QX deeper full performance which into our mentioned, comments by

GP reflects growth X.X% managed opportunities Full constant talent business also in supply solid Education delivered BUs. specialty effectively increase our a gross a revenue growth. taken X.X% captured and margin growth revenue actions revenue, a points currency, in year-over-year with was reported in GP dollars higher basis. as rate excluding year GP The SET, increasing we and and revenue on rate and alignment basis challenges. XXX additional in International, our in on our up XX.X% currency constant basis This with improved excellent constant Consistent in OCG resulted on rate, basis. with currency a Russia, all unit strategy, combined improved

excluding to gross impairment the higher to earnings. convert Finally, are able charges, improve profit dollars the we

basis earnings adjusted points EBITDA adjusted were from mentioned, XX was Peter and up X.X%, margin As ago. up from XX%, a year operations

increase up down XXXX unfavorable details. Revenues $X.X points the X.X% XXX impact of totaled as that operations. points basis acquisitions the Included Now of well impact in Russian unfavorable favorable looking basis. a RocketPower Revenue as quarter sale resulting of basis XXX in are from and our of constant our basis impact. billion, fourth more on were currency from currency from including prior X.X% at a a XXX PTS, points year, the

a on -- was revenue organic our X.X% basis. up constant currency non So

As for economic and revenue we the quarter solutions. of up specialties our negatively in telecommunication impacted to specialty by in quarter many in at our SET X.X%. the outcome-based strong first was has in the look Demand by be continued revenue headwinds. Growth current the other segments, was segment

growth continues of up In our segment, as XX% and excluding PTS. XX% or be reported May the organic our of year-over-year Education acquisition on strong, an impact basis, to revenue

existing Education executive is QX economic and consistent up XX%. demonstrates trends as demand in Placement in of of search growth QX reflects education fees, with Greenwood/Asher XXXX. revenue level to growth primarily trends the soften. with Our and even robust business Education new business were the wins This the higher the from resiliency customers and broader

year-over-year Our growth products. later revenue my delivered growth, March of of impact situation Organic the provide of up include another will high-margin on I the results in and OCG in OCG continued RocketPower constant RPO Declines quarter MSP with our were RocketPower. revenue more offset year. flat. X.X% segment in our the comments. with revenues over acquisition context last currency PPO

our more historically quarter, the on in headwinds declined our quarter. segment revenue And from early contraction the XX% QX outcome-based economic in strong. in center has delivered even as with outcome-based Professional specialties the from XX.X% declined demand & Revenue other segment's segment X%. product this staffing business cycle. solid our from specialty, the in was Revenue of deceleration call continued a in growth The in Industrial growth impact year-over-year

basis our basis. down X% XX% reported on Revenue constant declined and a a was in currency segment on International

impact fees were Russian operations, resilient sale an Excluding improved the were revenue organic of the of also basis. Permanent by our up basis. organic on and an placement XX% currency constant X% on

X.X% currency was as up profit X.X% constant up gross a basis. or Overall reported, on

to year-over-year the XX prior rate year basis The of compared for points of was XX.X%, driver quarter. the to business basis continued XX.X% points. the contributed which favorable be organic mix, approximately gross profit in primary Our fourth a quarter for improvement XXX

higher total were also costs as improvements positively RocketPower lower generate perm both GP fees. average. rate also basis margins PTS offset by Our XX about our than Kelly's higher and XXXX employee-related points These impacted and partially acquisitions by

significant rates. business businesses OCG SET, year-over-year delivered International in and most mix improvement and improved year-over-year the GP Our

on Russian of our results well up in results intangible constant the other basis. as are a restructuring recent as our up amortization charges, the of operations. and approximately the of basis expenses XXXX our Included expenses sale are on and and SG&A a in currency by XXXX impact impacted year-over-year were our acquisitions, X.X% $X favorable reported X% million

on We'll in ensure improvements take economic that to basis, position while reduction for grew from that fund long-term does continuing investment organic year, continue uncertain technology and earlier fourth quarter an it trends X.X% in this to SG&A This the prepared constant to steps the XXXX on expenses are continued reflect management. conditions growth cost by we us success. So focus currency year-over-year. will for

quarter, goodwill fourth did the million RocketPower. During impairment an additional to report charge we related $XX.X

year RocketPower will services which vertical. customers be to now hiring and we deeper this activity primarily this vertical, a QX, Beginning earlier high-tech in in in there industry have will As the previously, believe last discussed reduction RPO and been accelerating in charge provides as which on we has maximize will allow plans for a our impairment impact does The XXXX. including investment customer a of the synergies, March focus opportunities is diversification our RocketPower, and in of not mentioned, item to future. and value us through for the noncash Peter

million million earnings operations Our in quarter million impairment $XX.X XXXX. were charges. QX the of reported in approximately in compared $X.X in and of XXXX Included is of restructuring is QX a from charge XXXX fourth $X QX goodwill to

from XX% QX $XX basis, adjusted an million on XXXX So year-over-year. earnings operation declined of

we in in PersolKelly Holdings Peter investment venture As of quarter monetized Persol the most the joint XXXX. mentioned, first our and of

further impact no year but be include investments until the the to both will P&L will there related comparable losses period we gains investments, anniversary those from transactions. and So

our from XXXX, operations recognized we reported we pretax the million in Also Holdings a gain the common quarter from of on stock. of In fourth earnings $XX XXXX, related quarter below fourth gain Persol and Softworld. a the the onetime to policy cash connection million $XX settlement purchased with received in of insurance on representation a proceeds of acquisition a warranties claim realized

compared fourth million $XX.X $X.X for tax Income our expense of million. with was income the expense tax XXXX quarter

for quarter surrender Our on nondeductible rate was impacted cash value the than of life effective was insurance. and tax the company-owned by XXX% more losses

$X.XX a to And on share partially in per included gains a compared impact estate for fourth per $X.XX real of net earnings offset share of was tax. and of the tax. share tax, offset of gain Earnings shares a of and of finally, share reported XXXX partially on the charge, property, were XXXX by per in loss charge, XXXX. insurance a settlement, quarter gain goodwill XXXX Loss per share all favorably impacted per on in Persol sale restructuring by net by of net impairment

per to So QX all share $X.XX an was adjusted in, XXXX QX in EPS XXXX. $X.XX on compared of basis,

macroeconomic nearly X, year-end. Now million to ago. a year-end the of our XXXX. $XXX strong as and environment. inorganic compared moving totaled balance an sheet strategy, capacity, still to with as year $XXX existing was with balance well sheet ample when our and combining organic million capital to Debt have borrowing we fund our continue navigating have Cash as uncertain available consistent to And

billion XX to customers increase our well was reported year-over-year, XXXX. accounts as increase over net as was on billings year-end X% day basis. X year-end, reflecting revenue days, of and receivable a in year-over-year an Global increased At $X.X MSP DSO of

we used free in repayment final cash Free of stock. $XX of the income in CARES year, were include as the the balances, in $XX $XX For of the million million XXXX taxes Act flow. federal Persol payroll cash our of tax million of in flows well under due sales which XXXX as following common approximately Japan deferred investment

started And share a buying the repurchase we against executing approximately during million. million XXX,XXX of the plan shares announced for have in $XX fourth quarter, we $X.X value that November,

grown uncertain. economy global As Peter mentioned, increasingly has the

XXXX for As at stage. a provide we to this outlook formal are not result, going a

to execution COVID-XX economic caused of since specialty by XXXX. strategy, in continued pandemic will However, has the our following last the share Through significant Kelly the I transform observations. the disruption

remixed we preserve to have and manage to products specialty, when demonstrated necessary. We costs, capital bottom the portfolio have proactively with the act towards higher-margin urgency our line to and and protect ability

Our the uncertainty that line reflect economic view for units. of of growth our business first top several constrain in XXXX current half the will

likely our expect will additional to we that initiatives to XXXX. structure to rate at even in XXXX to in similar line our -- as our align and align prepared people. that finally, forward. continuing invest contain current levels improvement slower of our with SG&A while than but trends we our pace our don't structural cost We move technology actions action GP continue, will QX to And top If in take expectations, are a

And now Peter. back that, all with you, to

Peter Quigley

in can chosen situation to We'll acquisitions only the greater specialties, growth using as pursuit forward enable And we'll and characterized toward those we Thanks a balance will pressures. drive the unfold new available inorganic value aggressive for our of we will XXXX. In What talent SET but sheet additional to by OCG. and business customer to course each efficiency. margins higher we pursue is in how and growth. macroeconomic know what market the we'll products stay and us amid and Education, is on increase move improve difficult insights, organic continue growth and Olivier. our ample on focus capital our that mix resiliency It's to that certain to profitable will control in in of not continue invest technology the experience, high-quality shift

moment confidence great our Kelly of and have been deliver small has the priorities. in ago way to years team's longevity characteristic our of since contributed defining I more in XX ability to on no people a the has company. than and meet This our these founding

value in and purpose, to laser-focused their team forward on long-term executing positive embarked guided support our and on create great we I our full building for unleash since patience on all to look company. to our thrive our our our unwavering strategy their and noble for we this specialty the momentum forward generated all With we talent for and customers helping Together, of transformation. by stakeholders, we'll our them on Board to move the of journey shareholders potential Directors this our of rewarding as We're grateful XXXX.

you the Keely, questions. call open can to now

Operator

go [Operator the Joe Instructions]. Gomes to line with Capital. Noble We'll of

Joseph Gomes

the we the if looked little on we you what P&I give to P&I quarter. year. revenue accelerated in to the other wanted end of is color segment. Maybe more going The on kind of could just just the was fourth in negative off us If kind higher in business, of declined a look quarters It on quarter. the as the -- revenues like it that, in start here. So at a

Peter Quigley

reflection it's going manufacturing, the distribution. have business the that impacted QX. Yes, to of particular, behind think Joe, has in of we P&I April in parts anniversary of I of And but The to. the story QX, what's that economy in loss to also accelerating on that a that had we like we some customer the those by businesses, really the And yet the mentioned exposure major industrial were headwinds exposure anniversary still P&I. have XXXX. we will in extent saw, in I to that's the considerable

Olivier Thirot

did center I where growing, is say, we our what is On -- of kind I and a this still QX business a would I of even that the our still we despite in in business we about it business flip the on about bit challenging fact comparables. grew was did BPO But mention improvement side, mention, an overall, seen X% versus call little X.X%. which by is think QX, have

it offsetting that future. is be So to near something that the but wouldn't it's for assumed the staffing, say resilient I we

Joseph Gomes

Okay. know there, at out break over to switching we of call your that a in in tables. Europe, out the number obviously Russia looking And happened you what with different it, I'm And countries sale.

other countries that the in revenue you revenue. those a quarterly talk show of Maybe in were Portugal you're countries to little seeing of could sequential down But some that all the bit what the on you as basis. -- outside a identify decline decline would

Olivier Thirot

happen I as And Russia course, rate, you of of again, Yes. International. is, exchange say, to early need in XXXX. impacting One transaction our is, put anniversary course, until mention, basically side things, P&L course, of on would the did right? July we the we course, of which of that X did

growing if X%. side, about So the we these at put on are you X still things

-- have seen shy We bit QX. lower little X%. it's were of we we what are in a QX, than

pronounced a lot We can decline, still XX% a our it So and plus. you but not, we a see Portugal, in see see growth say, would of decline. I X-K, pretty on

QX as well as of QX QX, QX, in that XXXX. seen have We

of wouldn't We in but Germany in other. I the would mentioned have change call why say of it in this is in We slowdown in have challenging is is it than Italy up Switzerland, main XX%. market seen still I by And spots but bright as complete more before, because trend. and conditions, France a that in reasons one still is some other

Germany, margin to interesting because of In is gross or business although the there. mix. pretty a the huge It's big. over And revenue the where margin is progress make not continue business the we

to interesting also we good are pretty other of on including GP them couple traction. visible But disclose them, of line. in don't they are because Germany, have see continue especially small, of where creating revenue. countries bottom we more and very course, And we So like a some traction, probably very

Joseph Gomes

talk me, Okay. a about the might on provide how talking some last attract you layoffs, And seeing other mentioned to call fill And workers you an candidates that to are and tech needing pipeline the positions open. are is do? you about unfolding that? pardon this what for of are know situation the that kind you of could I Maybe of else -- verticals. better ongoing to

Peter Quigley

time in involved is skills Yes. for lot slower, decisions industries the industries outside that are people talent are The customers to are layoffs making time. between by a the the hiring capabilities and of those in demand by a the are sector. moving measured of that that taking other sector geography, The tech pressures all in bit demand publicized high-tech lag little in more

It's of evident, the It that bit clearly, benefits conditions just and sets for throughout longer. translate But takes Friday sets a in a to XXXX. into increase those position. to Monday demand we seeing -- to the expect the from and that up technology, is immediately see skill from doesn't And new little macroeconomic talent people skill moving it. we're

Joseph Gomes

when yourself a the identifying talking on with Again, may, you last rest mentioned little Okay. more, Kelly, goals the on I Maybe you for portfolio. on about of where firm, were about integration, see could provide RocketPower? if the detail you those And call progressing it, more RocketPower. accelerating diversifying synergies the one you your

Peter Quigley

our those Yes. Latin But to we're was And We're on for encouraged their very delivery Joe, encouraged the by able of American take thesis where X being investment RocketPower part and RPO that model. not legacy as for also, we are take but to RPO by the issues. efforts advantage of Kelly customers. RocketPower to for it that customers also either use sales only ability use of continue new advantage for to customers, of part also

with cost part looking seeing signs thesis talking Latin is in model we're to are to paying that lower able see where delivery a through they're was part American delivery RocketPower. and we And the that, terms to that investment provide off, we're of customers that of that of

Operator

to of Research. next go Steinke Barrington the line Kevin We'll of

Kevin Steinke

I segment. wanted the to first about Science, Engineering & ask Technology

telecom that the noted You are you that some areas segment economy. being other by in the mentioned the impacted continued within area, the good demand although also

So maybe how areas expand impacted the been the maybe the being just by can material you economy, slowdown on has and there?

Peter Quigley

Thanks, Yes. Kevin.

the BPO that to that moving just mentioned, to or think SET strategy business continues growth. and out call Olivier we outcome-based speaks the And to as model. nice business So I delivery see it have of to

So I would that's start. where

in are to as statement Science, coming enjoying networks. is work of are and catching next-generation as Engineering. and work see Telecom in Because a of that going-forward of little well companies terms after both is. that trying growth, more to probably are staff deploy The strategy breath challenged significant their their very a COVID areas of lot traditional reestablish are as continuing that companies And we there business. what out Science

taking customers a macroeconomic see need lull has reflective as architects high-tech -- terms of app to continued standpoint. experts see still analysts. seen that It's Engineering developers we in I think, of, to and see and become they probably expect come temporary economic a more hiring, conditions we that demand. we've -- the don't Technology cybersecurity And certain, we back slowdown Companies overall. quickly. data permanent. and longer. But And taking headwinds So sector from is some some a when quite in network

Kevin Steinke

helpful That's color. Okay.

some talking the the layoffs how were about in sector. earlier high-tech of You

across your and the more fill use ability I could areas. orders has just demand to more the in people skills fill You to of some their guess, those some company? other market in labor improved generally broadly, softening of the

number still good market still job and a labor there's tight. the referenced, of fairly is you know I openings

other better market kind wondering some greater that's you tightness. if orders to sitting we're fill open just maybe to labor maybe So than due enabled of

Peter Quigley

out certain off the Well, Yes. sidelines, the of sign that demand improved likely is which fill have point has rates our I people sectors. in coming would Education, slowed in a that very the inflation. rates, which But fill could demand because strong is to retirees across regions encouraging be continues be about we've the in are seen concerned in Education. improvement very

In Demand pretty improved fill continue Joe's in much a considerably, and as although find rates we bit. our SET, to work our I P&I, -- maintained. our has have But to at to softened customers. put And to them little slackened talent response has have demand in fill the mentioned question. rates

Olivier Thirot

at way X% a now. to [indiscernible] a time We moving for it own little talent easing Another which little at long bit. look we is see inflation. is elevated It about a a is is our supply bit what X%, the as SET might sign in down P&I, which still side have of to is that wage around seen be

in to Education P&I was X% for XX% inflation wage QX. about X% or very about Our QX something elevated slightly down, versus in XX%, XX% at before. still is versus X.X% like but

Kevin Steinke

That's good. Yes. color. Helpful Okay.

Services little maybe pipeline leverage there just does you Therapeutic acquisition. Pediatric are strong? demand continue into to what the and and ability to specifically, your be So And bit drilling just the seeing with more business down a -- Education

Peter Quigley

very encouraged pre-K XX traditional synergy early education of frankly. PTS by to signs ways, both between business Yes, our and the

support they districts school school our to to K-XX business districts K-XX traditional our introduced being PTS. and introducing PTS So

there. synergistic think we opportunity significant there's So

their existing in the pipeline terms strong management of of with as to existing And both school customers We're on the district traditional be are substitute well likely struggle school as their more more curriculum, hiring the focus in frankly, districts, and business, as outsourcing a they as shortage. teacher and continues and to chronic very as population. full-time school growth be seeing our teacher well districts

when competing business. beneficiary going win excellent excellent and more rate fair customers We've for we're share win business. that existing among compete had ratio an the of because to we're for retention And our be than our we when we

I seeing universities also education volume practice that of search K-XX and lot leads Which very our significant ed dynamic, space. some would higher executive the colleges turnover. very for superintendents the system in add community searches a is Greenwood/Asher portion is to our of means of and even which

that we're very, not because -- very profitable business. So a very encouraged huge a very by but it's business, a

Kevin Steinke

I Great. outlook wanted also first the of for about the just XXXX. half to ask

expect will difficult And continue you economic to revenue situation exactly you it's to the you constrained by acknowledging will mentioned, be also uncertainty. as that, evolve. As ascertain how noted, macroeconomic

first And as currently economic expectation economic headwinds pipeline stay the change much you or to you headwinds is? would or look what's stands, of as half, first Kind could in how the But of up the see a it terms of kind expect pick your in for like? half? severe in how of

Olivier Thirot

in XXXX we so in terms of Yes. Probably early far, little as I'm is what seen have speak. do going to to a revenue, reflect bit we on what especially

to what Peter was PTS. including well So talking practices, we in trend Education, to back all about continue very

we This for is XXXX. seen a confirmation have the of again whole what of

mean, improving rates. a our make fill And We I in to solid continuation the of solid continue progress growth expect, and growth. we

course, you going are with to in XX% deal we Just at growing XX% the very XXXX, but comparables higher a already because we solid start that of of -- are know to to year. for

When so of I the would seen QX we we what look have expect XXXX. because yet. RPO market, some at OCG, trends stage, we any at not believe not have versus significant pressure some I far that seen although on in seen changes

especially would volatile. Fees, P&I. slow what continued down, staffing very to say and very, SET, For I International, is in P&I

We whether or seen have to confirmation in say, is SET. would volatility. the challenging we future, have X more X P&I in in a high Outcome-based, week, I it's trend know so Difficult week. far, good how to it's going of what resilience,

Operator

Research. go to of of next line Kartik Mehta We'll the Northcoast

Jack Boyle

of This behalf on Boyle, Mehta. is Jack speaking Kartik

started Just a to couple here. us questions get of

early a just expect we you spoke what I appreciate can that. little So about bit

certain you point more So But what environment competitive I seeing it come that competing environment, be can competitive speak now? has guys on, bit you are And down. seeing? demand are capability? or of price a whether about little a is guys kind understand you maybe there the what you're

Peter Quigley

in hasn't our been competitive for suppliers against. line. pricing compete and think and chasing top purposes and off cases, our changed of I the We've And significantly not maintaining terms we disciplined about the trading very vendors margin. landscape revenue extent, of some in some that to

And haven't can We're we But coming lot we're seen we higher-margin pressure disciplined I chase times, from a compete I focusing competitors. will, as finding think it. said, and know categories would I companies that our being win. on fill margin business. at about of, wholesale say, job we principal jobs and regional and

We're of past on Those we've in to in would say quarters. But pleased the significant a transition I a competitive from up have couple number that companies. there's with had the landscape. because whole, not while acquisitions the customer take you change of to show other the

Jack Boyle

All And just right. one more.

color discussed. businesses? a your strategy you do savings little of terms In of more foresee The hiring, pause SG&A some And around all across in long lasting? that is of that the you how

Peter Quigley

put I noncustomer-facing, But Well, sure GP all we're we're to of non-revenue a customer-facing all if we've to it hiring after freeze generating make that it's -- generating But revenue we have it's them, necessary. GP filling are we those roles doing subject -- across review the businesses other, on. position, would -- call -- the roles. a a

deterioration that our in see until continue the of conditions any macroeconomic some signs certainty in and demand we'll don't And in businesses. we see

rates. and new the the not where is is that has the opportunity fill and that our work we're And through Jack, going got so to great people miss demand significant because GP done to be the exception, Education, school improving revenue so significant. one Education we've generate districts might team add additional acquire The to

Operator

We'll line Mitra to next go with Ramgopal Sidoti. the of

Mitra Ramgopal

SG&A, a do we comfortable how to to up on investments? question elevated the how terms would And investments feel the following last be keep of like, Just you little technology of revenue able on continue as in terms the uncertainty? far initiatives? light should see the SG&A in you of in as in are along you'll well especially you And

Peter Quigley

closely very that identify trigger a metrics been quarter of starting in conditions I So we're will done have cost following last than respond And on the to that lot moves, question, we think SG&A to better the year to work necessary. of prepared we've if macroeconomic additional certain third we're before.

necessary. need frontline is comfortable -- talent critical We're the but we're you very identified and to teams, ways us. of in not investing the our for experience. productivity levers of to the very only be The investing also I'm investment us pull that should improve a available have the that area that to we're technology So in

differentiator that's the selling people deal create myKelly with a recently of every to some that day the and a we that terms with customers. as experience. day, provides think to to launched we better a And portal, relationships We that new user in which maintain great work going opportunities use with talent we to put every our

for we judiciously. priority to And be will investments, the a need will that continue we technology in be So of the But our make continue term. organic terms investments long to and investments.

Mitra Ramgopal

sheet something us spoke an keep something maybe maybe to if know be it's confident you valuations color on you That's eye balance inorganic And But inorganic if of be the terms some uncertainty feel light in how opportunities, this the there. thinking the done certainly great. year you're and you of pipeline can seeing? you you'll side, give able about you get and to, Okay. you're you have, always can aggressive in I given economic on the then

Peter Quigley

the candidly, the reflection quarter of that's ago. continue the quantity quality environment. properties interest in Well, half. was the macroeconomic likely first that's, now the I year not just for a the into And the to it first market probably but And Mitra, rate right and only is and a also think, less conditions, of than

of bit being the when little lot have and in were companies that in terms ceiling, the to companies we're of conversations. economy, see a becomes interest the certainty environment clearer of on part rate is line a expectation sight to that My going the of sidelines more

add actively high-margin, not pursuing high-growth it's a constrained we're to that. -- And now. like we the to assets waiting portfolio. proactively But right fairly would for We're identifying environment and that high-quality,

not heels of We're this to But during those sitting of look as properties. said, on I we period ready. will be for we're And kinds time. proactively our continuing

Olivier Thirot

not balance with mean, again, especially potential waiting early go any fast our can level mean for year, necessarily in now our much I environment. I we Because, stage the better do recovery we over the half and of versus liquidity, an with sheet, $XXX environment. really of second it And a million, is of aggressive, can the at economic which current

Operator

We have follow-up line Research. from the a of Steinke Kevin with Barrington

Kevin Steinke

in move XXXX. should quick expect into we for Just follow-up we a as what tax really an of terms rate effective

Olivier Thirot

I'm would position the say I where a it. question. still on plus, I would would mid-teens that Yes, be difficult that's

is several seen have might volatility items. lot a you because Although of there that of

I was mid-teens for that. moment. be the the a about way good when today, was talking think example of But position I high it tax, would I it probably would

Operator

are There further queue. no Instructions]. in [Operator questions

Peter Quigley

it think for Thank up wrap you much then. I very Keely, your we help. Okay. can

Olivier Thirot

Thank you.

Operator

Thank midnight. Eastern through And conference beginning today's XX Time gentlemen, available today, replay for running XX:XX ladies and a.m. be you. March at will at

the of replay today. you access for using conclude our for may Event by XXX-XXX-XXXX. and That XXXXXXX. time AT&T conference Thank You at any XXX-XXX-XXXX entering code access AT&T participation system the may for dialing call Conferencing. and dialers your International does

may disconnect. now You

Kelly Services (KELYA) 16 Feb 232022 Q4 Earnings call transcript