Kelly Services Inc. (KELYA) has reported a 789.01 percent jump in profit for the quarter ended Oct. 02, 2016. The company has earned $80.90 million, or $2.06 a share in the quarter, compared with $9.10 million, or $0.23 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $17.20 million, or $0.44 a share compared with $7.50 million or $0.19 a share, a year ago.
Revenue during the quarter dropped 7.64 percent to $1,247.80 million from $1,351 million in the previous year period. Gross margin for the quarter expanded 35 basis points over the previous year period to 17.24 percent. Total expenses were 98.49 percent of quarterly revenues, down from 98.77 percent for the same period last year. This has led to an improvement of 28 basis points in operating margin to 1.51 percent.
Operating income for the quarter was $18.80 million, compared with $16.60 million in the previous year period.
However, the adjusted operating income for the quarter stood at $18.80 million compared to $14.50 million in the prior year period. At the same time, adjusted operating margin improved 43 basis points in the quarter to 1.51 percent from 1.07 percent in the last year period.
Carl T. Camden, president and chief executive officer, announced revenue for the third quarter of 2016 totaled $1.2 billion, a 7.6% decrease (a 7.1% decrease on a constant currency basis) compared to the corresponding quarter of 2015. Commenting on the third quarter, Camden stated, "Sorting through the financial complexity around the JV transaction, Kelly' third quarter performance reflects good operating leverage on basically flat revenue. We increased our gross profit rate, reduced expenses, and turned in healthy operating earnings and solid returns for our shareholders. Our U.S. Staffing segment showed competitive strength and agility in an uncertain economic environment, and our OCG business delivered year-over-year GP improvement. With the APAC JV now firmly in place, we are operating as a more focused, disciplined company relentlessly committed to profitability."
Operating cash flow turns positive
Kelly Services Inc. has generated cash of $26.10 million from operating activities during the nine month period as against cash outgo of $1.50 million in the last year period. Cash flow from investing activities was $10.60 million for the nine month period as against cash outgo of $13.20 million in the last year period.
The company has spent $55.10 million cash to carry out financing activities during the nine month period as against cash outgo of $19.30 million in the last year period.
Cash and cash equivalents stood at $27.60 million as on Oct. 02, 2016, down 38.53 percent or $17.30 million from $44.90 million on Sep. 27, 2015.
Working capital remains almost stable
Working capital of Kelly Services Inc. remained almost stable for the quarter at $428.40 million, when compared with the previous year period. Current ratio was at 1.55 as on Oct. 02, 2016, up from 1.50 on Sep. 27, 2015.
Days sales outstanding went up to 83 days for the quarter compared with 78 days for the same period last year.
Debt comes down significantly
Kelly Services Inc. has recorded a decline in total debt over the last one year. It stood at $8.70 million as on Oct. 02, 2016, down 88.67 percent or $68.10 million from $76.80 million on Sep. 27, 2015. Kelly Services Inc. has recorded a decline in short-term debt over the last one year. It stood at $8.70 million as on Oct. 02, 2016, down 88.67 percent or $68.10 million from $76.80 million on Sep. 27, 2015. Total debt was 0.43 percent of total assets as on Oct. 02, 2016, compared with 3.94 percent on Sep. 27, 2015. Debt to equity ratio was at 0.01 as on Oct. 02, 2016, down from 0.09 as on Sep. 27, 2015.
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