Company: KELYB
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000055135-25-000052
Chunk: 48

Company: KELLY SERVICES INC
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 48
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 intercompany transactions with and between subsidiaries.  Our foreign subsidiaries primarily derive revenues and incur expenses within a single country and currency which, as a result, provide a natural hedge against currency risks in connection with normal business operations.  Accordingly, changes in foreign currency rates vs. the U.S. dollar and euro generally do not impact local cash flows.  Intercompany transactions which create foreign currency risk include services, royalties, loans, contributions and distributions.

Interest Rates

We are exposed to interest rate risks through our use of our credit facilities and other local borrowings, when applicable.  Following our acquisition of MRP, we have long-term borrowings on our credit facilities.  On July 17, 2024, we entered into a $50.0 million 12-month interest rate swap and a $50.0 million 18-month interest rate swap that effectively locked in the variable SOFR component of our interest rate for a portion of the long-term borrowings on the Securitization Facility at a fixed rate of 4.772% and 4.468% from the effective date through July 17, 2025 and January 17, 2026, respectively.  The 12-month interest rate swap was settled early with the final payment made in June 2025.  A hypothetical fluctuation of 10% of market interest rates would not have had a material impact on 2025 second-quarter earnings.

We are exposed to market risk as a result of our obligation to pay benefits under our nonqualified deferred compensation plan and our related investments in company-owned variable universal life insurance policies.  The obligation to employees increases and decreases based on movements in the equity and debt markets.  The investments in mutual funds, as part of the Company-owned variable universal life insurance policies, are designed to mitigate, but not eliminate, this risk with offsetting gains and losses.

Item 4.  Controls and Procedures.

Based on their evaluation as of the end of the period covered by this Form 10-Q, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective at a reasonable assurance level.

There was no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION