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| Statement |
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| And we successfully completed a $50 million share repurchase program in the third quarter, returning value directly to Kelly shareholders |
| As we now look at revenue in the fourth quarter by segment, as noted in my full year remarks, our education segment's revenue growth continues to be strong, up 27% year-over-year |
| Amid those challenges, our education business demonstrated resilience and delivered another year of excellent revenue growth, up 32% in 2023, achieving over $840 million in revenue, almost doubling the level of revenue from the pre-COVID 2019 period |
| Kevin Steinke And obviously, education continues to be a strong performer and really impressive growth there |
| We think it would be an excellent complement to the acquisition we made in soft world |
| We said we would significantly improve our net margin to create greater financial flexibility to invest in Kelly's future, and we have, delivering 60 basis points of adjusted net margin expansion in the second half of the year |
| And finally, our full year 2023 adjusted EBITDA margin rate improved by 20 basis points |
| So it's a combination of net margin improvement and top line growth that is behind the transformation that we initiated last year |
| The continued double-digit growth reflects both strong field rate and demand from existing customers as well as net customer wins |
| I'm very proud of the way our team has kept their sights set on dual horizons, definitely steering Kelly through a challenging external environment and delivering results in the near term, all while embracing the change that's necessary to position the company for the future |
| Our efficiency measures are delivering sustained results |
| So we think the future is very bright for education |
| And we have demonstrated that we're the best in the business at filling those instructor positions |
| The reduction reflects the positive impact of our transformation efforts, which are designed to reduce cost on a structural basis |
| So on an adjusted basis, Q4 2023 earnings from operations were $22.1 million, a 59% improvement over the prior year, and adjusted EBITDA margin also improved 60 basis points to 2.6% |
| And we believe that when the staffing market recovers, we'll be well positioned to take further advantage of our improved efficiency |
| In addition to the 60 basis point improvement we made in our cost structure in the second half and the 40 basis point favorable impact from the sale of our European staffing operations, we expect an additional 30 basis points to 50 basis points of net margin improvement in the first half of 2024 |
| We've seen a steady improvement in fill rates in many of the school districts, which is very positive |
| But the business is operating extremely well both with existing customers as well as generating interest from new school districts, both large and small |
| Future defined by significantly improved profitability, sustainable growth and greater value creation for all our shareholders -- stakeholders |
| Our 2023 results also reflect the significant efforts made as part of our transformation initiatives to lower our cost base and position us to benefit from our improved efficiency moving forward |
| Also, we expect to see a continued improvement in efficiency as the impact of our transformation-related actions continue |
| Finally, I'm grateful to our customers, talented shareholders who have been with us on this journey, placing their trust in Kelly to deliver on our commitments and create value over the long term |
| And I think the improvement in fill rates in our Education segment is a great example of how we've been successful |
| So reported revenue should be approximately 17% lower as we move into 2024 on a like-for-like basis, GP rate should improve by 100 basis points, and our EBITDA margin should improve by 40 basis points as a result of the sale |
| Taken together, these accomplishments form a strong foundation upon which we will continue to build |
| In our P&I segment, our enhanced localized delivery model continues to generate positive momentum with both clients and talent benefiting further from our Kelly Now mobile app |
| With these structural improvements in place, I'm confident that Kelly is well positioned to capture increased customer demand when the macroeconomic environment improves and convert a greater share of top line gains to bottom line growth |
| While there is work to be done, I'm confident that 2024 is a start of a new era of growth for Kelly, a year in which we'll begin to reap the full benefits of the work we've done to transform this company and reward all our stakeholders |
| Of course, we remain committed to providing the highest quality of service to all our customers regardless of spend or size |
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| Revenue in our Professional and Industrial segment declined 11.5% year-over-year in the quarter |
| This reflects the challenging staffing market conditions we saw across a wide range of specialties and geographies |
| Revenue from our staffing product declined 15%, reflecting continuous challenging market conditions |
| The fourth quarter gross margin was a bit lower than we had seen historically over the last several quarters |
| In the SET segment, revenue was down 5% |
| And for the quarter, our GP rate was also impacted by unfavorable business mix by about 60 basis points |
| During the fourth quarter, we continued to see the impact of challenging market conditions with year-over-year revenue down 6% in our Staffing Specialties as well as lower revenue trends in our outcome-based business, which were flat year-over-year |
| Probably a few things to call out I would say it was a little bit of a challenging quarter, but not -- I mean, more for phasing reasons on our fee business |
| Full year revenue was down 2.6% as reported or 3.2% on a constant currency basis |
| I think there are pockets where there are pricing challenges due to the competitive landscape and the decline in demand in certain areas |
| Lower term fees continued to unfavorably impact our GP rate by 60 basis points in Q4 |
| Permanent placement fees in SET continued to be impacted by lower market demand and declined by 41% |
| Overall gross profit was down 4.7% as reported or 5.7% on a constant currency basis |
| In our OCD segment, revenue declined 3% |
| Year-over-year declines in RPO continued due to slower hiring in certain market sectors |
| So you've been CEO since October of 2019, I believe, kind of dealt a tough hand immediately having to deal with COVID and then recession and inflation and this uncertain economic environment |
| When I look at the first weeks of January, what we have seen so far, and I've heard that also from many sources, but we have seen it a very light start in manufacturing at least for the first couple of weeks of January |
| As Peter mentioned, the staffing market and underlying economic trends have not moved in the same patents we have seen in other economic cycles, and that has made it more difficult to know how quickly the staffing market will improve as we move into 2024 |
| So revenues were down 1.3% on a constant currency basis |
| There is a little bit of pressure, but it's more the mix, especially because very recently, we have welcomed pretty big customers, new wins, and the mix is a little bit more challenging, but I don't see that as a kind of long-term issue |
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