Kelly Services, Inc. (NASDAQ:KELYA) Q2 2023 Earnings Call Transcript

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Mitra Ramgopal: Yes. Okay, thanks. And in terms of the tax rate, I know you had a tax benefit this quarter, but how should we think about that for the remainder of the year?

Olivier Thirot: Yes, it’s – our tax rate, I mean, effective tax rate is really I would say explainable, but some time a little bit difficult to forecast. I would say on a normalized basis, we are keen on mid-teens to high teens. And of course, we have a lot of events that are impacting our effective tax rate. If I take the example of Q2, why basically we’ve got a benefit inside of the charge and effective tax rate of 32.5, is basically because of our MSP program, where we have basically – technically some investment through some insurance program. There are basically tax deductible and when market conditions are good and the MSP program is providing some upside. Basically, we’ve got a benefit on our income tax and that’s the main reason why in Q2 our tax rate basically was – basically a credit. But I would say on a more normalized basis, until suggesting something between 15% to 19% effective tax rate.

Mitra Ramgopal: Okay, now that’s great. And Peter, you mentioned inorganic opportunities something you continue to look at, but is that more of a medium, longer term vision in light of the extensive transformation that you’re doing in the near term?

Peter Quigley: Well, we’ll continue to develop a pipeline of opportunities, the market right now is – that current term little cautious, there’s not as many high-quality assets companies on the market right now or that are willing to come off the sidelines based on proactive inquiries. But we think that in the areas that we’ve identified inside our Science, Engineering, and Technology business unit, inside Education, inside OCG. We will continue to look for high-quality, high-margin, high-growth, assets that we can add to the portfolio to complement the organic growth initiatives that we’re undertaking.

Mitra Ramgopal: Okay. Thanks for taking the questions.

Peter Quigley: Thank you.

Olivier Thirot: Thank you.

Operator: And we do have a follow-up question from Kevin Steinke. Please go ahead.

Kevin Steinke: Yes, thank you. Just one follow-up. Continuing on with the question about inorganic opportunities, you mentioned that is – you’re working on strategic initiatives related to inorganic opportunities. I mean, as part of the transformation, do you expect to be even more aggressive in seeking acquisitions or is it more about the types of businesses you’re targeting? As you think about what might have changed with this transformation initiative?

Peter Quigley: Well, as Olivier commented, Kevin. We have ample capacity and I don’t think I would describe it as more aggressive, we’re already comparatively we’re already acting more aggressively than we have in the past few years. We’ve acquired a number of companies and we’re pleased with the progress we’re continuing to look for properties that will contribute. Again, high-margin, high growth to the Kelly portfolio. I don’t – but I don’t – we’re acting with urgency and a great deal of excitement, but we’re not going to overspend and we’re not going to settle for properties that don’t satisfy the attributes that I mentioned.

Kevin Steinke: Okay. That’s perfect. Thank you very much.

Peter Quigley: Thanks, Kevin.

Olivier Thirot: Thank you.

Operator: And at this time there are no further questions in queue. Please continue.

Peter Quigley: Lois, if there are no further questions, I think we can end the call.

Operator: Thank you. And ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Teleconference. You may now disconnect.

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