Kelly Services, Inc. (KELYA) Bundle
A Brief History of KELYA
KELYA, known formally as Kelly Services, Inc., has undergone significant transformations in recent years, notably through acquisitions and strategic sales. By 2024, the company reported substantial shifts in its financial landscape.
Financial Performance Overview
For the first nine months of 2024, KELYA generated a total revenue from services of $3.14 billion, a decrease of 12.8% from $3.60 billion during the same period in 2023. This decline was primarily attributed to the sale of its EMEA staffing operations completed on January 2, 2024.
| Metric | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Total Revenue from Services | $3.14 billion | $3.60 billion | (12.8) |
| Gross Profit | $641.1 million | $723.2 million | (11.4) |
| Net Earnings | $31.2 million | $25.0 million | 24.6 |
Segment Performance
The Professional & Industrial segment reported profits of $23.0 million for the first nine months of 2024, up from $7.7 million in 2023. The Science, Engineering & Technology segment also saw an increase, reporting $67.7 million compared to $57.1 million the previous year. However, the Education segment experienced a loss of $3.3 million, worsening from a loss of $2.5 million in 2023.
| Segment | 2024 Profit (Loss) | 2023 Profit (Loss) | Change (%) |
|---|---|---|---|
| Professional & Industrial | $23.0 million | $7.7 million | 198.4 |
| Science, Engineering & Technology | $67.7 million | $57.1 million | 18.3 |
| Education | ($3.3 million) | ($2.5 million) | (30.7) |
Cash Flow and Liquidity
KELYA's cash, cash equivalents, and restricted cash totaled $40.4 million at the end of the third quarter of 2024, significantly down from $126.5 million at year-end 2023. The company reported a net cash generated from operating activities of $11.9 million for the first nine months of 2024, a decrease from $33.4 million in the same period of 2023.
| Cash Flow Metrics | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Cash, Cash Equivalents & Restricted Cash | $40.4 million | $126.5 million |
| Net Cash from Operating Activities | $11.9 million | $33.4 million |
Investments and Acquisitions
In May 2024, KELYA completed the acquisition of MRP, which contributed to its Science, Engineering & Technology segment. The cash used for investing activities in the first nine months of 2024 was $355.5 million, primarily due to this acquisition.
The company also recorded a gain of $5.4 million from the sale of the Ayers Group in June 2024, which further reflects its strategy to optimize its operations.
Debt and Financing Activities
As of the third quarter of 2024, KELYA's total long-term borrowings stood at $228.2 million, with a debt-to-total capital ratio of 15.1%, indicating a significant increase in leverage compared to previous periods. The company generated $217.3 million from financing activities in the first nine months of 2024, a turnaround from the cash used in financing activities of $56.6 million in the same period of 2023.
| Debt Metrics | 2024 | 2023 |
|---|---|---|
| Total Long-term Borrowings | $228.2 million | $0 million |
| Debt-to-Total Capital Ratio | 15.1% | 0.0% |
| Cash from Financing Activities | $217.3 million | ($56.6 million) |
KELYA's financial performance in 2024 reflects a strategic pivot towards growth through acquisitions while managing its cash flow and leveraging its capital structure to support ongoing operations.
A Who Owns Kelly Services, Inc. (KELYA)
Ownership Structure
As of 2024, Kelly Services, Inc. (KELYA) maintains a dual-class stock structure comprising Class A and Class B common stock. The ownership distribution is as follows:
| Share Class | Shares Outstanding (millions) | Percentage of Total Shares | Voting Rights |
|---|---|---|---|
| Class A Common Stock | 35.2 | 91.7% | 1 vote per share |
| Class B Common Stock | 3.3 | 8.3% | 10 votes per share |
Major Shareholders
The major shareholders of Kelly Services, Inc. include institutional investors and insiders. As of 2024, the ownership composition is as follows:
| Shareholder | Shares Owned (millions) | Percentage of Ownership |
|---|---|---|
| BlackRock, Inc. | 5.0 | 14.1% |
| The Vanguard Group, Inc. | 4.5 | 12.6% |
| FMR LLC (Fidelity) | 3.0 | 8.4% |
| Insider Holdings (Management and Board) | 2.5 | 7.0% |
| Other Institutional Investors | 10.0 | 28.0% |
| Public Float | 20.0 | 56.0% |
Recent Stock Performance
Kelly Services, Inc. has seen fluctuations in stock performance throughout 2024. The following data summarizes its stock performance metrics:
| Date | Stock Price ($) | Market Capitalization ($ million) | Trading Volume (shares) |
|---|---|---|---|
| January 1, 2024 | 17.50 | 615.0 | 300,000 |
| April 1, 2024 | 16.00 | 570.0 | 250,000 |
| July 1, 2024 | 15.50 | 550.0 | 200,000 |
| October 1, 2024 | 16.75 | 590.0 | 280,000 |
Recent Transactions
In January 2024, Kelly Services completed the sale of its EMEA staffing operations for $110.6 million, significantly impacting its cash position and operational focus. The company also acquired Motion Recruitment Partners (MRP) on May 31, 2024, for approximately $444.8 million, enhancing its capabilities in technology staffing.
| Transaction Type | Transaction Value ($ million) | Date | Purpose |
|---|---|---|---|
| Sale of EMEA Operations | 110.6 | January 2, 2024 | Focus on North American market |
| Acquisition of MRP | 444.8 | May 31, 2024 | Enhance technology staffing capabilities |
Kelly Services, Inc. (KELYA) Mission Statement
The mission statement of Kelly Services, Inc. emphasizes the company's commitment to providing workforce solutions that enhance productivity and innovation for its clients. As of 2024, the mission is articulated as follows: "We connect people with the right job opportunities and help businesses succeed by providing tailored workforce solutions." This mission underscores the company's focus on flexibility, customer service, and leveraging technology to meet the evolving needs of the labor market.
Financial Overview
In the first nine months of 2024, Kelly Services reported total revenue from services amounting to $3.14 billion, a decrease of 12.8% compared to $3.60 billion in the same period in 2023. The gross profit for the same period was $641.1 million, down from $723.2 million year-over-year, marking an 11.4% decline.
| Financial Metric | 2024 (YTD) | 2023 (YTD) | Change (%) |
|---|---|---|---|
| Total Revenue from Services | $3.14 billion | $3.60 billion | -12.8% |
| Gross Profit | $641.1 million | $723.2 million | -11.4% |
| Net Earnings | $31.2 million | $25.0 million | 24.6% |
| Earnings from Operations | $41.6 million | $17.0 million | 144.5% |
Segment Performance
Segment analysis reveals varying performance across Kelly Services' business units. The Professional & Industrial segment generated revenue of $1.09 billion, down 7.3% from the previous year, while the Science, Engineering & Technology segment saw an increase to $1.03 billion, reflecting a 13.6% rise. The Education segment also grew by 17.0%, achieving $683.1 million in revenue.
| Business Segment | Revenue (2024 YTD) | Revenue (2023 YTD) | Change (%) |
|---|---|---|---|
| Professional & Industrial | $1.09 billion | $1.17 billion | -7.3% |
| Science, Engineering & Technology | $1.03 billion | $903.5 million | 13.6% |
| Education | $683.1 million | $583.9 million | 17.0% |
| Outsourcing & Consulting | $346.0 million | $342.4 million | 1.1% |
Strategic Initiatives and Changes
In January 2024, Kelly Services completed the sale of its EMEA staffing operations for cash proceeds of $110.6 million. This strategic move is part of the company’s ongoing transformation initiatives aimed at optimizing its operational focus and enhancing profitability. The gain on the sale of these operations was recognized at $1.6 million in the first nine months of 2024.
Additionally, the company has undertaken a transformation initiative that includes restructuring charges totaling $6.4 million for the first nine months of 2024, down from $27.6 million in the previous year.
Stock Performance
As of the end of the third quarter of 2024, Kelly Services had a total of 36 million shares outstanding. The basic earnings per share were reported at $0.86 for the year-to-date period, compared to $0.68 in 2023. The company’s stock has seen fluctuations, with the average share price for the third quarter of 2024 recorded at approximately $20.21.
| Stock Metric | Value (2024) | Value (2023) |
|---|---|---|
| Basic Earnings per Share | $0.86 | $0.68 |
| Average Share Price (Q3) | $20.21 | N/A |
| Total Shares Outstanding | 36 million | N/A |
Conclusion on Mission Statement Alignment
The mission statement of Kelly Services, Inc. is closely aligned with its strategic initiatives and operational performance as observed in 2024. The focus on connecting people with job opportunities and enhancing business productivity is reflected in the company’s adaptive strategies, financial performance, and commitment to transformation in a changing labor market.
How Kelly Services, Inc. (KELYA) Works
Overview of Operations
Kelly Services, Inc. operates primarily in the staffing and workforce solutions sector. The company segments its services into Professional & Industrial, Science, Engineering & Technology, Education, and Outsourcing & Consulting. In 2024, significant operational changes occurred, including the sale of its EMEA staffing operations and the acquisition of MRP.
Financial Performance
As of the third quarter of 2024, Kelly Services reported consolidated revenue from services of $1,038.1 million, a decrease of 7.1% compared to $1,118.0 million in the third quarter of 2023. Year-to-date revenue for 2024 was $3,140.7 million, down 12.8% from $3,603.5 million in 2023.
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | % Change | YTD 2024 Revenue (in millions) | YTD 2023 Revenue (in millions) | % Change |
|---|---|---|---|---|---|---|
| Professional & Industrial | $370.4 | $378.0 | (2.0) | $1,086.5 | $1,171.4 | (7.3) |
| Science, Engineering & Technology | $405.2 | $295.7 | 37.1 | $1,026.7 | $903.5 | 13.6 |
| Education | $142.1 | $128.1 | 10.9 | $683.1 | $583.9 | 17.0 |
| Outsourcing & Consulting | $121.0 | $114.1 | 6.0 | $346.0 | $342.4 | 1.1 |
| International | $0.0 | $203.0 | (100.0) | $0.0 | $604.7 | (100.0) |
Gross Profit and SG&A Expenses
The gross profit for the third quarter of 2024 decreased by 3.0% to $221.7 million, down from $228.5 million in the same period of 2023. The year-to-date gross profit for 2024 was $641.1 million compared to $723.2 million in 2023, reflecting an 11.4% decline.
SG&A expenses for Q3 2024 were $219.0 million, a decrease of 4.1% from $228.4 million in Q3 2023. Year-to-date SG&A expenses fell 14.6% to $601.0 million from $703.8 million in 2023.
Earnings and Net Income
For Q3 2024, Kelly Services reported net earnings of $0.8 million, a significant decline from $6.6 million in Q3 2023. Year-to-date net earnings for 2024 reached $31.2 million, compared to $25.0 million in 2023.
The earnings from operations for the third quarter were $2.6 million, up from $0.1 million a year prior. Year-to-date earnings from operations totaled $41.6 million, a substantial increase from $17.0 million in 2023.
| Financial Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Net Earnings (in millions) | $0.8 | $6.6 | $31.2 | $25.0 |
| Earnings from Operations (in millions) | $2.6 | $0.1 | $41.6 | $17.0 |
| Gross Profit (in millions) | $221.7 | $228.5 | $641.1 | $723.2 |
| SG&A Expenses (in millions) | $219.0 | $228.4 | $601.0 | $703.8 |
Cash Flow and Liquidity
At the end of Q3 2024, Kelly Services had cash and cash equivalents totaling $40.4 million, a decrease from $126.5 million at year-end 2023. The company generated $11.9 million in net cash from operating activities in the first nine months of 2024, compared to $33.4 million during the same period in 2023.
Trade accounts receivable stood at $1.2 billion, with a days sales outstanding (DSO) of 64 days at the end of Q3 2024.
Market Position and Strategic Changes
The sale of the EMEA staffing operations in January 2024 for cash proceeds of $110.6 million was a significant strategic shift for Kelly Services. The acquisition of MRP in May 2024 contributed additional revenue streams, particularly in the Science, Engineering & Technology segment, which saw a 37.1% increase in revenue compared to the previous year.
How Kelly Services, Inc. (KELYA) Makes Money
Revenue Streams
Kelly Services, Inc. generates revenue through several key segments, including Professional & Industrial, Science, Engineering & Technology, Education, and Outsourcing & Consulting. The following table details the revenue from services by segment for the third quarter and year-to-date results in 2024 compared to 2023.
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | YTD 2024 Revenue (in millions) | YTD 2023 Revenue (in millions) |
|---|---|---|---|---|
| Professional & Industrial | $370.4 | $378.0 | $1,086.5 | $1,171.4 |
| Science, Engineering & Technology | $405.2 | $295.7 | $1,026.7 | $903.5 |
| Education | $142.1 | $128.1 | $683.1 | $583.9 |
| Outsourcing & Consulting | $121.0 | $114.1 | $346.0 | $342.4 |
| International | $— | $203.0 | $— | $604.7 |
| Total | $1,038.1 | $1,118.0 | $3,140.7 | $3,603.5 |
Profitability Analysis
The gross profit and profit margins across the segments are critical indicators of Kelly Services' financial performance. The following table summarizes the gross profit figures for Q3 and YTD 2024 against 2023.
| Segment | Q3 2024 Gross Profit (in millions) | Q3 2023 Gross Profit (in millions) | YTD 2024 Gross Profit (in millions) | YTD 2023 Gross Profit (in millions) |
|---|---|---|---|---|
| Professional & Industrial | $66.5 | $69.1 | $192.7 | $209.8 |
| Science, Engineering & Technology | $99.1 | $68.0 | $240.8 | $207.4 |
| Education | $19.7 | $19.8 | $98.7 | $91.6 |
| Outsourcing & Consulting | $36.4 | $41.5 | $108.9 | $124.4 |
| International | $— | $30.1 | $— | $90.0 |
| Total | $221.7 | $228.5 | $641.1 | $723.2 |
Cost Structure
Kelly Services incurs various costs associated with operating its business, primarily through Selling, General & Administrative (SG&A) expenses. The following table presents the SG&A expenses for Q3 and YTD 2024 versus 2023.
| Period | Q3 2024 SG&A Expenses (in millions) | Q3 2023 SG&A Expenses (in millions) | YTD 2024 SG&A Expenses (in millions) | YTD 2023 SG&A Expenses (in millions) |
|---|---|---|---|---|
| Q3 | $219.0 | $228.4 | $601.0 | $703.8 |
Net Earnings
Net earnings for Kelly Services reflect the financial outcomes of its operations. The following figures illustrate the net earnings for Q3 and year-to-date results in 2024 compared to 2023.
| Period | Q3 2024 Net Earnings (in millions) | Q3 2023 Net Earnings (in millions) | YTD 2024 Net Earnings (in millions) | YTD 2023 Net Earnings (in millions) |
|---|---|---|---|---|
| Q3 | $0.8 | $6.6 | $31.2 | $25.0 |
Cash Flow and Liquidity
As of September 29, 2024, Kelly Services reported cash and cash equivalents totaling $32.8 million. The company generated $11.9 million from operating activities in the first nine months of 2024, compared to $33.4 million in the same period of 2023. The following table summarizes cash flow from operating activities.
| Period | YTD 2024 Cash from Operating Activities (in millions) | YTD 2023 Cash from Operating Activities (in millions) |
|---|---|---|
| Cash Flow | $11.9 | $33.4 |
Market Position and Strategic Changes
In January 2024, Kelly Services sold its EMEA staffing operations, significantly impacting its revenue structure. This strategic decision reflects a shift in focus and a realignment of its business model towards higher-performing segments such as Science, Engineering & Technology, which saw a revenue increase of 37.1% in Q3 2024 compared to Q3 2023, largely due to the acquisition of MRP. The following table highlights the revenue change across segments post-sale.
| Segment | Q3 2024 Revenue Change (%) | YTD 2024 Revenue Change (%) |
|---|---|---|
| Professional & Industrial | -2.0% | -7.3% |
| Science, Engineering & Technology | +37.1% | +13.6% |
| Education | +10.9% | +17.0% |
| Outsourcing & Consulting | +6.0% | +1.1% |
| International | -100.0% | -100.0% |
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Resources:
- Kelly Services, Inc. (KELYA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Kelly Services, Inc. (KELYA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Kelly Services, Inc. (KELYA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.