Kelly Reports First-Quarter 2021 Earnings

Financial Highlights

• Q1
  revenue down 4.4%, down 5.5% in constant currency, as pandemic disruption
  moderates
• Q1
  operating earnings of $10.6 million, compared to a reported loss for the
  corresponding period last year
• Q1
  earnings per share of $0.64, or $0.12 on an adjusted basis, compared to
  adjusted earnings per share of $0.20 for the corresponding period last year

TROY, Mich., May 13, 2021 (GLOBE NEWSWIRE) — Kelly (Nasdaq: KELYA) (Nasdaq: KELYB), a leading specialty talent solutions provider, today announced results for the first quarter of 2021.

Peter Quigley, president and chief executive officer, announced revenue for the first quarter of 2021 totaled $1.2 billion, a 4.4% decrease, or down 5.5% in constant currency, compared to the corresponding quarter of 2020. Revenue declined year-over-year in the quarter as the effects of the COVID-19 crisis moderated but continued to have an impact on customer demand and the supply of available talent.

Earnings from operations in the first quarter of 2021 totaled $10.6 million, compared to a loss of $111.8 million reported in the first quarter of 2020. The 2020 first-quarter results include a $147.7 million goodwill impairment charge and an $8.7 million restructuring charge, partially offset by a $32.1 million gain on sale of assets. On an adjusted basis, 2020 earnings from operations were $12.5 million.

Diluted earnings per share in the first quarter of 2021 were $0.64 compared to a loss of $3.91 per share in the first quarter of 2020. Included in the earnings per share in the first quarter of 2021 is a non-cash gain, net of tax, on Kelly’s investment in Persol Holdings common stock of $0.52. Included in the loss per share in the first quarter of 2020 is a $3.18 per share goodwill impairment charge, net of tax, a $1.38 per share loss from a non-cash loss on Kelly’s investment in Persol Holdings common stock, net of tax, and a $0.17 restructuring charge, net of tax, partially offset by a $0.61 gain on sale of assets, net of tax. On an adjusted basis, earnings per share were $0.12 in the first quarter of 2021 compared to $0.20 in the corresponding quarter of 2020.

“We’re seeing strong demand across all of our operating segments. This translated into sustained, sequential revenue improvements in our Education, OCG, International, and Science, Engineering & Technology business segments. We’re also seeing improving revenue growth rates in our Professional & Industrial segment and are taking steps to capture even more of the stronger demand, which now exceeds pre-pandemic levels,” said Quigley. “Every segment added numerous wins to their portfolio in the first quarter, and we’re pleased with the overall progress and healthy sales pipelines across our specialties. We’re moving forward in this recovery with optimism, well-positioned to capture organic specialty growth and committed to a bold M&A strategy that captures inorganic growth, as evidenced by our recent Softworld acquisition, which is the largest deal in Kelly’s history.”

In conjunction with its first quarter earnings release, Kelly has published a financial presentation on the Investor Relations page of its public website and will host a conference call at 9 a.m. ET on May 13 to review the results and answer questions. The call may be accessed in one of the following ways:

Via the Internet:
Kellyservices.com

Via the Telephone
(877) 692-8955 (toll free) or (234) 720-6979 (caller paid)
Enter access code 5728672
After the prompt, please enter “#”
A recording of the conference call will be available after 2:30 p.m. ET on May 13, 2021 at (866) 207-1041 (toll-free) and (402) 970-0847 (caller-paid). The access code is 2456495#. The recording will also be available at kellyservices.com during this period.

This release contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties. These factors include, but are not limited to, changing market and economic conditions, the recent novel coronavirus (COVID-19) outbreak, competitive market pressures including pricing and technology introductions and disruptions, disruption in the labor market and weakened demand for human capital resulting from technological advances, competition law risks, the impact of changes in laws and regulations (including federal, state and international tax laws), unexpected changes in claim trends on workers’ compensation, unemployment, disability and medical benefit plans, or the risk of additional tax liabilities in excess of our estimates, our ability to achieve our business strategy, our ability to successfully develop new service offerings, material changes in demand from or loss of large corporate customers as well as changes in their buying practices, risks particular to doing business with government or government contractors, the risk of damage to our brand, our exposure to risks associated with services outside traditional staffing, including business process outsourcing, services of licensed professionals and services connecting talent to independent work, our increasing dependency on third parties for the execution of critical functions, our ability to effectively implement and manage our information technology strategy, the risks associated with past and future acquisitions, including risk of related impairment of goodwill and intangible assets, exposure to risks associated with investments in equity affiliates including PersolKelly Pte. Ltd., risks associated with conducting business in foreign countries, including foreign currency fluctuations, the exposure to potential market and currency exchange risks relating to our investment in Persol Holdings, risks associated with violations of anti-corruption, trade protection and other laws and regulations, availability of qualified full-time employees, availability of temporary workers with appropriate skills required by customers, liabilities for employment-related claims and losses, including class action lawsuits and collective actions, our ability to sustain critical business applications through our key data centers, risks arising from failure to preserve the privacy of information entrusted to us or to meet our obligations under global privacy laws, the risk of cyberattacks or other breaches of network or information technology security, our ability to realize value from our tax credit and net operating loss carryforwards, our ability to maintain specified financial covenants in our bank facilities to continue to access credit markets, and other risks, uncertainties and factors discussed in this release and in the Company’s filings with the Securities and Exchange Commission. Actual results may differ materially from any forward-looking statements contained herein, and we undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

About Kelly^®

Kelly Services, Inc. (Nasdaq: KELYA, KELYB) connects talented people to companies in need of their skills in areas including Science, Engineering, Education, Office, Contact Center, Light Industrial, and more. We’re always thinking about what’s next in the evolving world of work, and we help people ditch the script on old ways of thinking and embrace the value of all workstyles in the workplace. We directly employ nearly 370,000 people around the world, and we connect thousands more with work through our global network of talent suppliers and partners in our 
outsourcing and consulting practice. Revenue in 2020 was $4.5 billion. Visit kellyservices.com and let us help with what’s next for you.