Company: KELYB
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0000055135-25-000016
Chunk: 32

Company: KELLY SERVICES INC
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 32
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5.8)Education19.3 18.1 6.2 Business Unit Profit (Loss)39.5 40.4 (2.3)Corporate(15.9)(15.0)5.9 Gain on sale of EMEA staffing operations— 11.6 NMDepreciation and amortization(12.8)(10.2)25.4 Consolidated Total Earnings from Operations$10.8 $26.8 (59.8)%

First Quarter Results

ETM reported profit decreased versus the prior year primarily due to higher SG&A expenses, partially offset by higher revenue and gross profit.

SET reported profit includes $3.8 million of business unit profit from the acquisition of MRP.  Excluding the acquisition, the decrease in profit was due primarily to lower revenue and gross profit.

Education reported profit of $19.3 million compared to profit of $18.1 million a year ago.  The change was primarily driven by higher revenue and gross profit, partially offset by an increase in SG&A expenses.

Corporate expenses increased 5.9% over the prior year primarily driven by integration and realignment charges in the first quarter of 2025.

34 

Financial Condition

Historically, we have financed our operations through cash generated by operating activities and access to credit markets.  Our working capital requirements are primarily generated from temporary employee payroll, which is generally paid weekly, and customer accounts receivable, which is generally outstanding for longer periods.  Since receipts from customers lag payroll to temporary employees, working capital requirements increase substantially in periods of growth.  Conversely, when economic activity slows, working capital requirements may substantially decrease.  This may result in an increase in our operating cash flows; however, any such increase would not be sustainable in the event that an economic downturn continued for an extended period.

As highlighted in the consolidated statements of cash flows, our liquidity and available capital resources are impacted by four key components: cash, cash equivalents and restricted cash, operating activities, investing activities and financing activities.

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash totaled $34.5 million at the end of the first quarter of 2025 and $45.6 million at year-end 2024.  As further described below, we generated $23.9 million of cash from operating activities, generated $3.2 million of cash from investing activities and used $39.5 million of cash for financing activities.