Company: KELYB
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000055135-25-000080
Chunk: 95

Company: KELLY SERVICES INC
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 95
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 10 basis point decrease related to lower permanent placement fees.  The gross profit rate decreased in the ETM and SET segments, excluding the MRP acquisition, and increased in the Education segment.

Total SG&A expenses increased 4.4%, primarily due to the acquisition of MRP.  Excluding the impact of the acquisition, SG&A expenses decreased 3.9%. SG&A expenses in the first nine months of 2025 include $19.8 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, $1.3 million of executive transition charges and $0.8 million of transaction costs, of which $0.5 million were related to the sale of our EMEA staffing operations.  Included in SG&A expenses in the first nine months of 2024 were $12.5 million of integration costs related to initiatives to integrate MRP and aligning Company processes and transformation and restructuring charges relating to 2023 initiatives, and $10.3 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, restructuring and transformation charges, and depreciation and amortization, SG&A expenses were down 2.9% from the prior year.

The loss from operations in the first nine months of 2025 was primarily due to the goodwill impairment charges driven by reduced demand, integration of MRP and Softworld acquisitions and realignment of reporting units in the SET segment.

The gain on sale of EMEA staffing operations relates to the January 2024 sale.  In the first nine months of 2025, we recognized a gain of $4.3 million upon the settlement of working capital and other adjustments and previously recognized a gain of $1.6 million in the first nine months of 2024.  The gain on sale of assets represents the sale of Ayers Group in the second quarter of 2024 for which we recognized a gain of $5.4 million in the first nine months of 2024.

Income tax expense was $49.1 million for the first nine months of 2025 compared to an income tax expense of $2.5 million for the first nine months of 2024, with the change primarily driven by the valuation allowance and goodwill impairment charges.

34 

Operating Results By Segment

(in millions)

Third QuarterSeptember Year-to-Date