Kelly Services Inc (KELYA) has reported a 36.84 percent plunge in profit for the quarter ended Jan. 01, 2017. The company has earned $21.60 million, or $0.55 a share in the quarter, compared with $34.20 million, or $0.88 a share for the same period last year.
Revenue during the quarter dropped 10.76 percent to $1,304.40 million from $1,461.60 million in the previous year period. Gross margin for the quarter expanded 41 basis points over the previous year period to 17.48 percent. Total expenses were 98.34 percent of quarterly revenues, up from 98.19 percent for the same period last year. That has resulted in a contraction of 16 basis points in operating margin to 1.66 percent.
Operating income for the quarter was $21.60 million, compared with $26.50 million in the previous year period.
Carl T. Camden, president and chief executive officer, announced revenue for the fourth quarter of 2016 totaled $1.3 billion, an 11% decrease (a 10% decrease on a constant currency basis) compared to the corresponding quarter of 2015. Revenue for the full year totaled $5.3 billion, a 4% decrease (a 3% decrease on a constant currency basis) compared to the prior year. Fourth quarter 2015 and fiscal 2015 include 14 and 53 weeks, respectively. Revenue comparisons are unfavorably impacted by both an additional week of revenue in fourth quarter 2015 and the transfer of APAC staffing operations to the TS Kelly Asia Pacific JV at the beginning of third quarter 2016.
Operating cash flow improves significantly
Kelly Services Inc has generated cash of $38 million from operating activities during the year, up 61.70 percent or $14.50 million, when compared with the last year.
Cash flow from investing activities was $10.30 million from investing activities during the year as against cash outgo of $17.60 million in the last year.
The company has spent $66.90 million cash to carry out financing activities during the year as against cash outgo of $42.20 million in the last year period.
Cash and cash equivalents stood at $29.60 million as on Jan. 01, 2017, down 29.86 percent or $12.60 million from $42.20 million on Jan. 03, 2016.
Working capital increases
Kelly Services Inc has recorded an increase in the working capital over the last year. It stood at $445.30 million as at Jan. 01, 2017, up 8.27 percent or $34 million from $411.30 million on Jan. 03, 2016. Current ratio was at 1.58 as on Jan. 01, 2017, up from 1.50 on Jan. 03, 2016.
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