Company: KELYB
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000055135-25-000052
Chunk: 90

Company: KELLY SERVICES INC
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 90
---
7% from the prior year, excluding the impact from the acquisition.

Gross profit increased 5.5% largely driven by the acquisition of MRP.  Excluding the impact from the acquisition, gross profit decreased 5.1%.  The gross profit rate increased 30 basis points to 20.5% primarily due to a 70 basis point increase due to the acquisition of MRP, partially offset by a 30 basis point decrease related to business mix and other and a 10 basis point decrease related to lower permanent placement fees.  Permanent placement revenue has very low direct costs of services and has a disproportionate impact on gross profit rates.  The gross profit rate decreased in the ETM and SET segments excluding the acquisition and was flat year-over-year in the Education segment.

Total SG&A expenses increased 8.2%, primarily due to the acquisition of MRP.  Excluding the impact of the acquisition, SG&A expenses decreased 2.2%.  SG&A expenses in the second quarter of 2025 include $6.0 million of integration and realignment costs related to initiatives to integrate MRP and other prior acquisitions, consolidating operating segments, and further aligning processes and technology across the Company, $0.2 million of executive transition charges and $0.1 million of transaction costs related to the sale of our EMEA staffing operations.  Included in SG&A expenses in the second quarter of 2024 were $4.3 million of transformation and restructuring charges relating to 2023 initiatives and $1.6 million of transaction costs related to the sale of our EMEA staffing operations.  Excluding the impact from the acquisition, as well as integration and realignment, transaction, executive transition, and restructuring and transformation charges—and excluding depreciation and amortization—SG&A expenses decreased 1.1% from the prior year.

33 

The gain and loss on sale of EMEA staffing operations relates to the January 2024 sale.  In the second quarter of 2025, we have recognized a gain of $4.0 million upon settlement of working capital and other adjustments.  The loss on sale of EMEA staffing operations in the second quarter of 2024 relates to a net working capital adjustment of $10.0 million.

Income tax expense was $0.9 million for the second quarter of 2025 compared to $1.1 million for the second quarter of 2024, with the change primarily due to changes in pretax income, non-deductible transaction costs in