Kelly Services Inc (NASDAQ:KELYA) Q4 2018 Earnings Conference Call - Final Transcript

Feb 13, 2019 • 09:00 am ET

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Kelly Services Inc (NASDAQ:KELYA) Q4 2018 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

(Operator Instructions) First, we go to the line of John Healy with Northcoast Research. Please go ahead.

Analyst
John Healy

Thank you. George, I wanted to just -- just ask you a little bit about kind of the prepared remarks that you guys put out in the press release this morning, you talked about abundant opportunities for growth and I think those are clear with some of the acquisitions and refocusing of the business mix, but do you have opportunities for increased profitability. Beyond mix adjustments in the business, can you maybe talk to what do you think the two or three items kind of internally are the most meaningful that can help that SG&A conversion in terms of higher margins over the next few years?

Executive
George S. Corona

Yeah. I think there is a -- there is a few, John. I mean first and foremost beyond what you just talked about, which was some of the acquisitions that we're making into the higher-growth areas, higher margin areas of the market, our ongoing investments in technology to make ourselves much more, not only much more efficient in how we go about recruiting, but able to make it faster for us to be able to respond to customer demand, as well as lowering our overall cost in the middle office are going to have a big impact moving forward, particularly as we get outside of 2019 and move into the future, as we get these investments in to help on the conversion rate.

Secondarily, we are working very, very diligently looking at our service delivery models that we have in the United States and trying to look at more efficient ways to deliver to our customers and realigning our business in that mode and we will be working on that throughout the year. You'll be hearing more about that in -- in future quarters. Those are really the two biggest areas that you would see that are going to have a significant impact beyond the structural mix changes.

Analyst
John Healy

Okay, great. And then, I wanted to ask just about the -- the Adderley family shares. Is there any sort of update that you can provide investors with, maybe how the trust processes is going or maybe what the trustees have communicated to the Company about any sorts of timing or expectations or ownership of those shares kind of longer term?

Executive
George S. Corona

Not yet. At this point, all we -- all we can share with you is, what you've seen in our filing, which is the Trust K has taken control of those shares. We have a good relationship with them. And at this point, we continue to pursue our strategic plan.

Analyst
John Healy

Okay. And then just on a little bit on the guidance for 2019. Can you help us maybe frame a little bit about the potential for gross profit improvement -- gross margin improvement in 2019, I -- Olivier, I think you said, you mentioned they would be up. But should we be thinking more up modestly 10 basis points