Kelly Services Inc (NASDAQ:KELYB) Q1 2019 Earnings Conference Call - Final Transcript

May 06, 2019 • 09:00 am ET


Kelly Services Inc (NASDAQ:KELYB) Q1 2019 Earnings Conference Call - Final Transcript


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George S. Corona

while investing in our future. If these business conditions represent a new normal, our team has successfully demonstrated its ability to adapt the business to the challenges and opportunities in this environment. Here are some final thoughts on what we are seeing in the labor markets, an update on our latest strategic investments, and more about the change activities currently underway at Kelly. The US labor market remains tight. Given the healthy economic environment in the US, we expect the supply of labor to remain challenging in the foreseeable future.

As always, we are seeking new and creative ways to address supply gaps when and where they occur using our assets as effectively as possible. As we mentioned previously, we intend to stay focused on gross profit growth and on aggressively pursuing higher margin businesses in our specialty areas. As we do this, we will continue to evaluate, remediate, or exit unprofitable customers from our portfolio. In addition, identifying high margin strategic acquisitions is a part of this strategy and we announced two such acquisitions at the beginning of this quarter. Integrations for our two new acquisitions, NextGen and GTA, are moving forward and progressing well. Both companies are profitable, delivering significantly higher margins in our traditional lines of business, and contributing to our bottom line. I'll share more news about these two acquisitions next quarter, but I am pleased to say we are learning from one another and we believe each company is benefiting as a result.

Finally, we continue to evaluate all aspects of our business operations to improve them. Prominent change activities currently underway include updating our brand, marketing and talent acquisition strategies, as well as the ongoing investments we're making in our North American digital talent platform. Another critical project includes the restructuring activities we initiated in our US branch operations. These activities are designed to accelerate growth by allowing us to more precisely and flexibly adjust and redeploy resources across our organization as required by supply and demand conditions. This improved agility should allow us to more quickly and efficiently meet the demands of both customers and talent and begin producing later this year improvements in recruiter and sales productivity and healthier customer and product mix. I look forward to reporting back to you on the results of all these efforts next quarter.

Olivier and I will now be happy to answer your questions.