Kelly Services Inc (NASDAQ:KELYA) Q2 2020 Earnings Conference Call - Final Transcript
Aug 06, 2020 • 09:00 am ET
Good morning and welcome to Kelly Services Second Quarter Earnings Conference Call. [Operator Instructions] I would now like to turn the meeting over to your host, Mr. Peter Quigley, President and CEO. Sir, you may begin.
Thank you, Brad. Hello, everyone, and welcome to Kelly Services Second Quarter Conference Call. With me on the call is Olivier Thirot, our Chief Financial Officer. I'll start the call by reviewing the impact of COVID-19 on Kelly's business in the second quarter, the actions we've taken to mitigate its impact on our financial position and steps we've taken to capture available upside. Olivier will walk us through the highlights of our quarterly performance that were announced today in this morning's earnings release. I'll then share what we're seeing in terms of customer demand and how Kelly is pursuing growth opportunities during this crisis. Olivier will provide some perspectives on Q3. And finally, I'll conclude with an update on what's next for Kelly, including our ongoing journey towards becoming a specialty talent solutions provider. I'm pleased to say that despite disruption caused by the pandemic, we continue making solid progress on our strategy about which I'll provide some additional details as we conclude today's discussion.
Now let's turn to Q2. The impact of COVID-19 continued throughout the second quarter as closures and widespread uncertainty resulted in reduced customer demand and lower top line growth. We've discussed previously, how we've been closely monitoring the economic impact caused by two parameters of the pandemic. How deep will it be and how long will it last? As Q2 progressed, the severity of the resulting economic impact started coming into focus and we believe the worst is behind us. It's more challenging to call the duration of the downturn, although it appears that the recovery and economic and labor market improvements are underway, though they are likely to be uneven and more gradual than some thought a few months ago. Amid this unprecedented environment, Kelly continued to mitigate the downside and execute with speed and discipline.
The precautionary actions we took to protect our balance sheet that I shared on last quarter's earnings call proved to be judicious. These temporary defensive measures included pay reductions for full-time salaried Kelly employees in several regions, more significant pay reductions for me and our senior leadership team, reduced compensation for our Board of Directors, reduced hours in some regions, suspension of the Company match for most retirement accounts, redeployments for some employees and temporary furloughs for others, suspension of the quarterly dividend and significantly reduced capital spending. I did not take these moves lightly and I'd like to acknowledge everyone in the Kelly community, our employees, board and shareholders for their shared sacrifices. These sacrifices mattered in this quarter's results and they give us flexibility to weather the ongoing crisis and go on the offensive when opportunities present themselves in the months ahead.
So decisive expense management served us well in Q2 and so did speed, agility and execution of our operational