Kratos Defense & Security (KTOS) – A Closer Look at the Great Quarter

Posted on May 10, 2024May 10, 2024 by cpereira@noblefcm.com

Friday, May 10, 2024

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) develops and fields transformative, affordable technology, platforms, and systems for United States National Security related customers, allies, and commercial enterprises. Kratos is changing the way breakthrough technologies for these industries are rapidly brought to market through proven commercial and venture capital backed approaches, including proactive research, and streamlined development processes. At Kratos, affordability is a technology, and we specialize in unmanned systems, satellite communications, cyber security/warfare, microwave electronics, missile defense, hypersonic systems, training and combat systems and next generation turbo jet and turbo fan engine development. For more information go to www.kratosdefense.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Performance Drivers. Contributing to the first quarter’s strong performance included particularly solid performance in unmanned systems, air defense, propulsion systems, turbine technologies, and the microwave electronics businesses, as well as production and delivery on certain programs that were executed earlier in the year than initially expected.

Events Favor Kratos. With the federal budget finally passed, increased funding has been allocated to areas which are right in Kratos’ sweet spot while ongoing world events, especially in the Ukraine and Middle East are highlighting the need for Kratos products, both of which we believe will drive growth for the Company.

Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.

Kelly Services (KELYA) – First Look at 1Q24

Posted on May 10, 2024May 10, 2024 by cpereira@noblefcm.com

Friday, May 10, 2024

Kelly (Nasdaq: KELYA, KELYB) connects talented people to companies in need of their skills in areas including Science, Engineering, Education, Office, Contact Center, Light Industrial, and more. We’re always thinking about what’s next in the evolving world of work, and we help people ditch the script on old ways of thinking and embrace the value of all workstyles in the workplace. We directly employ nearly 350,000 people around the world and connect thousands more with work through our global network of talent suppliers and partners in our outsourcing and consulting practice. Revenue in 2021 was $4.9 billion. Visit kellyservices.com and let us help with what’s next for you.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

1Q24. There are a lot of moving parts, with the sale of the European staffing business and some one-time expenses. On an organic basis, revenue declined 2.6% y-o-y to $945.6 million due to ongoing soft demand, although the Education segment grew 16.2% y-o-y. Adjusted EBITDA margin was up 110bp to 3.2% driven by the sale of the European business and ongoing expenses reduction initiatives. Adjusted net earnings rose to $20.3 million, or $0.56/sh, from $15.9 million, or $0.42/sh in 1Q23.

GAAP Results. Revenue of $1.05 billion declined 17.6% (17.7% decline on constant currency basis) from last year. Gross profit rate was down 30bp to 19.7% y-o-y with mix and lower permanent placement fees offsetting the benefit from the sale of the European staffing business. Operating earnings of $26.8 million rose 150.2%. Net income was $25.8 million, or $0.70/sh, versus $10.9 million, or $0.29/sh in the prior year.

Get the Full Report

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

Information Services Group (III) – A Peek into First Quarter Results

Posted on May 10, 2024May 10, 2024 by cpereira@noblefcm.com

Friday, May 10, 2024

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For additional information, visit www.ISG-One.com

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Results. Revenue was reported at $64.3 million, down 18% from $78.5 million in the previous year. We estimated revenue of $66 million. Continued slower client decision making meant revenue is being pushed into later quarters. Net loss for the quarter was $3.4 million, or a loss of $0.07 per share, compared to net income of $3.5 million, or $0.07 per share last year. We estimated a net loss of $0.7 million, or a loss of $0.01 per share.

Recurring Revenue and Tango. Recurring revenues for the Company continue to grow, accounting for about half of ISG’s revenues in 1Q24. For the trailing 12 months, recurring revenues totaled $126 million, up 10% from the previous 12-month period. We expect recurring revenues to continue to grow with management’s focus on growing platforms such as ISG GovernX and ISG ProBenchmark. With the launch of the next-gen sourcing platform ISG Tango in March, the Company is already seeing the platform gaining interest, as over $2.6 billion of contract value is already running on the platform.

Get the Full Report

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

Haynes International (HAYN) – Raw Material Headwinds Persist

Posted on May 10, 2024May 10, 2024 by cpereira@noblefcm.com

Friday, May 10, 2024

Haynes International, Inc. is a leading developer, manufacturer and marketer of technologically advanced, nickel and cobalt-based high-performance alloys, primarily for use in the aerospace, industrial gas turbine and chemical processing industries.

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Second quarter financial results. Haynes reported second-quarter fiscal 2024 net income of $8.6 million or $0.66 per share compared to $12.3 million or $0.96 per share during the prior year period. Adjusted EBITDA was $18.0 million compared to $22.4 million during the prior year period and declined as a percentage of net revenues. While the company experienced revenue growth in its core aerospace and industrial gas turbine markets, the quarter was negatively impacted by decreasing nickel prices which reduced gross margins, along with lingering impacts from the unplanned hot mill outage in the first quarter. The estimated negative impact from raw material volatility in the second quarter was $5.3 million.

Updating estimates. We have lowered our 2024 EBITDA and EPS estimates to $79.3 million and $3.13 from $84.8 million and $3.50, respectively. The revisions reflect recent earnings results and lower margins in the second half of the year. Our 2025 EBITDA and EPS estimates were reduced to $103.9 million and $4.40 from $104.5 million and $4.45.

Get the Full Report

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

Harte Hanks (HHS) – Solid Start To The Year

Posted on May 10, 2024May 10, 2024 by cpereira@noblefcm.com

Friday, May 10, 2024

Harte Hanks (NASDAQ: HHS) is a leading global customer experience company whose mission is to partner with clients to provide them with CX strategy, data-driven analytics and actionable insights combined with seamless program execution to better understand, attract, and engage their customers. Using its unparalleled resources and award-winning talent in the areas of Customer Care, Fulfillment and Logistics, and Marketing Services, Harte Hanks has a proven track record of driving results for some of the world’s premier brands including Bank of America, GlaxoSmithKline, Unilever, Pfizer, HBOMax, Volvo, Ford, FedEx, Midea, Sony, and IBM among others. Headquartered in Chelmsford, Massachusetts , Harte Hanks has over 2,500 employees in offices across the Americas, Europe and Asia Pacific .

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Overachieves Q1 expectations. The company reported Q1 revenue of $45.4 million, beating our estimate of $44.8 million by 1.4%. Adj. EBITDA was $2.8 million, which beat our estimate of $2.1 million as illustrated in Figure #1 Results. Notably, the quarter was driven by favorable y-o-y revenue growth in the customer care and sales services segments.

Segment performance. Notably, the company’s sales services segment recorded revenue of $4.7 million in Q1, a significant step up from $2.8 million last year. Customer Care also had a strong quarter, recording $12.4 million in revenue, up from $11.6 million in the prior year period. The company appears to have positive momentum heading into the second quarter.

Get the Full Report

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

GoHealth, Inc. (GOCO) – Q1 Illustrates Business Model Integrity

Posted on May 10, 2024May 10, 2024 by cpereira@noblefcm.com

Friday, May 10, 2024

Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Q1 results. The company reported Q1 revenue of $185.6 million, in line with our estimate of $183.0 million. Adj. EBITDA of $26.9 million was below our forecast of $30.4 million. Management indicated that market dynamics in Q1, which featured the Medicare Advantage Open Enrollment Period, were fairly consistent with the Annual Enrollment Period in Q4.

Demonstrating model integrity. During the quarter, the company reaffirmed 94,000 health insurance policies, even though such outcomes do not generate incremental revenue for the company. In our view, this serves to highlight the company’s commitment to putting the consumer first and we believe the company could be rewarded for this in the long run.

Get the Full Report

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

E.W. Scripps (SSP) – Lackluster Near Term Revenue Picture

Posted on May 10, 2024May 10, 2024 by cpereira@noblefcm.com

Friday, May 10, 2024

The E.W. Scripps Company (NASDAQ: SSP) is a diversified media company focused on creating a better-informed world. As one of the nation’s largest local TV broadcasters, Scripps serves communities with quality, objective local journalism and operates a portfolio of 61 stations in 41 markets. The Scripps Networks reach nearly every American through the national news outlets Court TV and Newsy and popular entertainment brands ION, Bounce, Defy TV, Grit, ION Mystery, Laff and TrueReal. Scripps is the nation’s largest holder of broadcast spectrum. Scripps runs an award-winning investigative reporting newsroom in Washington, D.C., and is the longtime steward of the Scripps National Spelling Bee. Founded in 1878, Scripps has held for decades to the motto, “Give light and the people will find their own way.”

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Favorable Q1 results. Revenues were a little lighter than what we were looking for at $561.5 million versus our $571.0 estimate, but adj. EBITDA was better than expected. Adj. EBITDA benefited from stronger than expected high margin Political advertising, $15.2 million versus our $6.5 million estimate. As such, adj. EBITDA of $91.8 million was better than our $82.9 million estimate.

Raises Political guide. Given the Political advertising strength, management raised full year 2024 Political advertising revenue guide from $210 million to $250 million to a range of $240 million to $270 million. Our previous estimate was $225 million. Notably, the high end of the range would exceed that of the last presidential election cycle in 2020 at $265 million.

Get the Full Report

This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

Cadrenal Therapeutics (CVKD) – 1Q24 Reported With Preparations Continuing For Tecarfarin Phase 3

Posted on May 10, 2024May 10, 2024 by cpereira@noblefcm.com

Friday, May 10, 2024

Robert LeBoyer, Senior Vice President, Equity Research Analyst, Biotechnology, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Cadrenal Therapeutics Reported 1Q2024. Cadrenal announced a 1Q24 loss of $1.7 million or $(0.10) per share. The company continues to prepare for the Phase 3 clinical trial testing tecarfarin, its anticoagulant, in patients having atrial fibrillation associated with end stage renal disease (AFib with ESRD). This has included hiring a Chief Operating Officer and entering into manufacturing contracts for clinical trial supplies and materials. The cash balance on December 31 was $6.6 million.

Tecarfarin Received Its Second Orphan Drug Designation. As discussed in our Research Note on April 12, the FDA granted Orphan Drug designation for tecarfarin as an anticoagulant in patients with implanted mechanical circulatory support devices. This includes patients with ventricular assist devices (VADs) and total artificial hearts. The lead indication, AFib with ESRD, has also received Orphan Drug designation.

Get the Full Report

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

Zeekr’s $5B Blockbuster IPO Heats Up the Chinese EV Battleground

Posted on May 10, 2024May 10, 2024 by slightbourne@noblecapitalmarkets.com

The electric vehicle revolution continues full-throttle, with Chinese luxury upstart Zeekr making a bold $5.1 billion debut on U.S. public markets this week. In an oversubscribed IPO that priced at the top of its indicated range, the Geely-backed marque has staked an immediate claim as a formidable new contender vying for a slice of the world’s largest EV market.

For investors, Zeekr’s sizzling public premiere throws fresh gas on the opportunities — and risks — of betting on China’s increasingly crowded field of ambitious EV trailblazers. While backing the next disruptive Tesla remains a tantalizing prospect, the playing field has rapidly evolved into a multi-player battlefield where winners and losers will be harshly divisive.

Zeekr certainly checks many of the boxes that have catalyzed the staggering valuations already assigned to Chinese EV leaders like Nio, XPeng, and Li Auto. It boasts sleek vehicle designs, advanced proprietary technologies, and a promising initial sales ramp located at the epicenter of the global EV transformation underway.

The company’s $441 million capital raise provides ample fuel for scaling up manufacturing, developing future products, expanding sales and marketing reach, and potentially complementing its luxury sedan and SUV lineup with additional high-end models. An early valuation of over $5 billion reflects lofty aspirations and embeds expectations for exponential growth in the years ahead.

But it also invites intense scrutiny as Zeekr contends with automotive stalwarts like BYD and upstarts like Nio, along with a rising EV tide from Detroit’s revered marques and European juggernauts. Even perceived victories on sales metrics can prove ephemeral. Just this week, reports indicated Zeekr may have overtaken Tesla for EV deliveries in its home province only to see the more veteran American rival surge back ahead in ensuing days.

With so many players rushing toward electrification, from startups to multi-national conglomerates, successfully navigating the terrain demands more than just leading technologies or early sales momentum. Forging an indelible brand identity, sustainable competitive advantages, and durable customer loyalty could ultimately separate the sector’s long-term winners from its bevy of also-rans.

For Chinese EV entrants like Zeekr, carving out meaningful market share is only step one. Generating consistent profitability and free cash flows will be critical for delivering on the premium valuations embedded in frothy public offerings. So far, even category leaders have struggled to stem losses and burned through billions in pursuing aggressive growth and vertical integration strategies.

Investors bullish on Zeekr’s potential need to weigh the company’s limited operating history and scant financial resources compared to deep-pocketed incumbents and well-capitalized rivals that have amassed years of EV production experience and built extensive supply chains and global sales footprints.

There’s also escalating geopolitical overhang to consider following recent trade tensions and economic maneuverings that elevate risks for indirect Chinese investment exposures. Plenty of speculators have been burned before chasing overheated IPOs at record valuations, only to see shares plummet amid misaligned expectations and deteriorating macroeconomic crosswinds.

Still, for intrepid investors with sky-high conviction in China’s ability to continue dominating EV production value chains, Zeekr’s early innings positioning as a luxe vertical disruptor could allow for savvy entry points. The company hits all the checkboxes that have fueled explosive growth stories in the past, from brash ambitions to cutting-edge technologies to heavyweight strategic backers.

Over the long haul, investor returns in the EV space will ultimately hinge on identifying the handful of players positioned to endure the coming shakeout and cement permanent towerholds. For risk-tolerant portfolios able to withstand volatility, Zeekr’s high-flying market entrance marks a milestone in automotive’s most pivotal technological transition in over a century.

Whether this latest entrant can thrive — or get quickly upended — remains speculative. But the feeding frenzy greeting its arrival underscores insatiable market enthusiasm for staking a claim in the Great EV Migration shaping up on both sides of the Pacific. As this white-hot battlefield heats up, investors must carefully separate the true disruptors reshaping mobility from the litany of overvaluated upstarts soon to be stranded along the road to electrification.

Release – Seanergy Maritime Announces the Date for the First Quarter Ended March 31, 2024 Financial Results, Conference Call and Webcast

Posted on May 9, 2024May 9, 2024 by dburczyk@noblecapitalmarkets.com

Research News and Market Data on SHIP

Seanergy Maritime Announces the Date for the First Quarter Ended March 31, 2024 Financial Results, Conference Call and Webcast

Earnings Release: Wednesday, May 15, 2024, Before Market Open in New York
Conference Call and Webcast: Wednesday, May 15, 2024, at 10:00 a.m. Eastern Time

May 9, 2024 – Glyfada, Greece – Seanergy Maritime Holdings Corp. (the “Company” or “Seanergy”) (NASDAQ: SHIP) announced today that it will release its financial results for the first quarter ended March 31, 2024, prior to the open of the market in New York on Wednesday, May 15, 2024.

Seanergy’s senior management will conduct a conference call and simultaneous Internet webcast to review these results on Wednesday, May 15, 2024 at 10:00 a.m. Eastern Time.

Audio Webcast:

There will be a live, and then archived, webcast of the conference call available through the Company’s website. To listen to the archived audio file, visit our website, following the Webcast & Presentations section under our Investor Relations page. Participants to the live webcast should register on the Seanergy website approximately 10 minutes prior to the start of the webcast, by following this link.

Conference Call Details:

Participants have the option to register for the call using the following link. You can use any number from the list or add your phone number and let the system call you right away.

About Seanergy Maritime Holdings Corp.

Seanergy Maritime Holdings Corp. is a prominent pure-play Capesize ship-owner publicly listed in the U.S. Seanergy provides marine dry bulk transportation services through a modern fleet of Capesize vessels. The Company’s operating fleet consists of 17 vessels (1 Newcastlemax and 16 Capesize) with an average age of approximately 13.2 years and an aggregate cargo carrying capacity of approximately 3,054,820 dwt. Upon the completion of the delivery of our latest acquisitions, the Company’s operating fleet will consist of 19 vessels (1 Newcastlemax and 18 Capesize) with an aggregate cargo carrying capacity of approximately 3,417,608 dwt.

The Company is incorporated in the Marshall Islands and has executive offices in Glyfada, Greece. The Company’s common shares trade on the Nasdaq Capital Market under the symbol “SHIP”.

Please visit our Company website at: www.seanergymaritime.com.

Link to press release

Seanergy Investor Relations
Tel: +30 213 0181 522
E-mail: ir@seanergy.gr

Jobs Market Losing Steam? Spike in US Jobless Claims Rattles Investors

Posted on May 9, 2024May 9, 2024 by slightbourne@noblecapitalmarkets.com

The long-standing workers’ job market may finally be letting off some steam, if the latest U.S. jobless claims numbers are any indication. Last week’s substantial jump in Americans filing for unemployment benefits – the largest increase in nearly four months – has investors and economists reassessing the trajectory of the labor market’s exceptional tightness.

According to the Labor Department report released Thursday, initial jobless claims soared by 22,000 to 231,000 for the week ending May 4th. This elevated the weekly figure to its highest level since late August 2022, suggesting some mounting cracks in the seemingly impenetrable jobs environment.

The unexpected spike in layoffs comes on the heels of April’s underwhelming employment report that showed the U.S. economy adding the fewest jobs in six months. Couple that with a sharp drop in job openings in March to a three-year low, and the once red-hot labor market certainly appears to be rapidly losing its sizzle.

For investors, this emerging cooldown could have far-reaching implications across asset classes and policy expectations. On Wall Street, the jobless claims data fanned concerns that consumer spending – the lifeblood of the American economy – could take a hit if sustained labor market deterioration sets in. The major stock indexes whipsawed in reaction, with growth-sensitive sectors like technology bearing the brunt of the selling.

The prospect of easing labor pressures and fading wage inflation boosted demand for U.S. government bonds. Lower rates in a potentially weakening economy proved a boon for fixed-income assets. The 10-year Treasury yield, which influences borrowing costs on everything from mortgages to business loans, retreated from recent highs.

Perhaps the biggest market reverberations were felt across interest rate futures. Traders scrambled to raise bets on not just one, but potentially two interest rate cuts from the Federal Reserve before the end of 2023. Just last week, the central bank defiantly left rates untouched at their highest levels since 2007 amid still-elevated inflationary pressures. But ebbing labor market vigor could tip the scales for policymakers anxious to support economic growth.

Central bankers will need to see more definitive evidence that employment conditions have truly turned before making any dovish policy pivots. For now, many economists ascribed the jump in jobless claims to potential seasonal volatility around spring breaks and holidays distorting the data. Applications tend to be especially noisy this time of year due to temporary school hiring and layoffs.

However, a growing chorus of business surveys and corporate guidance has been flagging ebbing labor demand in recent weeks. Cracks have emerged in previously ravenous hiring appetites across industries from tech and finance to manufacturing as higher borrowing costs weigh on spending and investment plans.

That long-awaited moderation could finally provide the Federal Reserve some relief in its battle against stubbornly high inflation. A rebalancing in supply and demand for labor – with more available workers and fewer vacancies – should ease upward pressures on wages and prices over time.

For businesses and households, some softening in the jobs market could sting in the form of lower income prospects. But restoration of more normal churn should help alleviate some of the extreme tightness that has led to crippling labor shortages and surging employment costs in recent years.

Whether this emerging pivot toward a more sustainable labor environment persists will be a critical factor driving both economic performance and monetary policy in the months ahead. The jobless claims surprise has raised the stakes, and all eyes will remain fixated on any further signs of fractures in what has been one of the most durable pillars of the pandemic recovery so far.

Release – The ODP Corporation Renews and Extends Existing Asset-Based Credit Facility

Posted on May 9, 2024May 9, 2024 by dburczyk@noblecapitalmarkets.com

Research News and Market Data on ODP

$800 Million Facility Strengthens Financial Position By Providing More Attractive Credit Terms & Flexibility Preserving Strong Liquidity Position

Extends Facility Maturity Date to May 2029

BOCA RATON, Fla.–(BUSINESS WIRE)–May 9, 2024–

The ODP Corporation (NASDAQ:ODP) (“ODP,” or the “Company”), a leading provider of business services, products and digital workplace technology solutions to businesses and consumers, today announced that it has amended and extended its existing asset-based credit facility. The amendment extends the maturity date to May 2029. The renewed $800 million facility includes certain more attractive credit terms and conditions, enhancing the company’s balance sheet and liquidity position to support future growth.

“The extension of our credit facility is a validation of our strong financial position and business model,” said Gerry Smith, chief executive officer of The ODP Corporation. “I want to thank our syndicate members for their strong support of our business and to our commitment to driving operational excellence throughout the enterprise.”

“The successful renewal of our asset-based credit facility includes improved credit terms and conditions, and extends our maturity, providing ample liquidity to manage our growth and capital allocation plans,” said Tim Perrott, vice president, investor relations and treasurer of The ODP Corporation. “We are thrilled to have the continued support of our financial partners as we continue to pursue our strategic objectives.”

The renewed credit facility was significantly oversubscribed with strong lender support, providing additional financial flexibility to grow the business and to enhance returns for shareholders.

About The ODP Corporation
The ODP Corporation (NASDAQ:ODP) is a leading provider of products and services through an integrated business-to-business (B2B) distribution platform and omnichannel presence, which includes world-class supply chain and distribution operations, dedicated sales professionals, a B2B digital procurement solution, online presence and a network of Office Depot and OfficeMax retail stores. Through its operating companies Office Depot, LLC; ODP Business Solutions, LLC; Veyer, LLC; and Varis, Inc., The ODP Corporation empowers every business, professional, and consumer to achieve more every day. For more information, visit theodpcorp.com.

ODP and ODP Business Solutions are trademarks of ODP Business Solutions, LLC. Office Depot is a trademark of The Office Club, LLC. OfficeMax is a trademark of OMX, Inc. Veyer is a trademark of Veyer, LLC. Varis is a trademark of Varis, Inc. Grand&Toy is a trademark of Grand & Toy, LLC in Canada. Any other product or company names mentioned herein are the trademarks of their respective owners.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240509097311/en/

Tim Perrott
Investor Relations
561-438-4629
Tim.Perrott@theodpcorp.com

Source: The ODP Corporation

Release – Kelly Reports First-Quarter 2024 Earnings

Posted on May 9, 2024May 9, 2024 by dburczyk@noblecapitalmarkets.com

Research News and Market Data on KELYA

Q1 operating earnings of $26.8 million, or up 34% on an adjusted basis
Q1 revenue down following sale of European staffing operations; down 2.6% on an organic basis
Q1 adjusted EBITDA margin increased 110 basis points to 3.2% driven by meaningful reduction in operating expenses resulting from business transformation initiatives and sale of European staffing operations
Company expects further expansion of EBITDA margin from the planned Q2 2024 acquisition of Motion Recruitment Partners, LLC (“MRP”) and ongoing transformation actions

TROY, Mich., May 09, 2024 (GLOBE NEWSWIRE) — Kelly (Nasdaq: KELYA, KELYB), a leading specialty talent solutions provider, today announced results for the first quarter of 2024.

Peter Quigley, president and chief executive officer, announced revenue for the first quarter of 2024 totaled $1.05 billion, a 17.6% decrease, compared to the corresponding quarter of 2023 resulting primarily from the sale of the company’s European staffing operations on January 2, 2024. Excluding the impact of the sale of the European staffing operations, revenue declined 2.6% on an organic basis reflecting the continuing impact of customers’ more guarded approach to hiring and initiating new projects or capital spending.

Kelly reported operating earnings in the first quarter of 2024 of $26.8 million, compared to earnings of $10.7 million reported in the first quarter of 2023. Earnings in the first quarter of 2024 include an $11.6 million gain on the sale of our European staffing operations and $7.9 million of charges related to transformation actions and the sale of our European staffing operations. Excluding those charges, adjusted earnings were $23.1 million in the first quarter of 2024. Earnings in the first quarter of 2023 included $6.6 million of restructuring charges and adjusted earnings from operations were $17.3 million. The European staffing operations were break even on an adjusted basis in the first quarter of 2023. Excluding the impact of the sale in both periods, 2024 adjusted earnings improved primarily as a result of lower selling, general and administrative expenses, partially offset by lower revenue and unfavorable business mix and lower permanent placement fees which resulted in lower gross profit.

Earnings per share in the first quarter of 2024 were $0.70 compared to earnings per share of $0.29 in the first quarter of 2023. Included in earnings per share in the first quarter of 2024 were a gain on sale and gain on forward contract, net of tax, of $0.31 partially offset by restructuring and transaction-related charges, net of tax, of $0.17. Included in the earnings per share in the first quarter of 2023 is a $0.13 per share restructuring charge, net of tax. On an adjusted basis, earnings per share were $0.56 in the first quarter of 2024, an improvement from $0.42 per share in the corresponding quarter of 2023.

On May 3, Kelly announced that it had entered into a definitive agreement to acquire MRP and expects the transaction to close in the second quarter of 2024.

“In the first quarter, we continued making progress on our journey to accelerate profitable growth notwithstanding continued macroeconomic uncertainty and industry headwinds. Our ongoing growth and efficiency initiatives increased Kelly’s adjusted EBITDA margin to 3.2% – a significant improvement of 110 basis points over the prior year and well above the company’s recent average,” said Quigley. “Our more streamlined and profitable portfolio of businesses is poised to realize additional benefits from the transformational acquisition of MRP. When completed in the second quarter, this acquisition will strengthen Kelly’s scale and capabilities and meaningfully increase market share across several key areas, which in turn creates exciting opportunities for future revenue growth and additional EBITDA margin expansion.”

Kelly also reported that on May 7, its board of directors declared a dividend of $0.075 per share. The dividend is payable on June 4, 2024, to stockholders of record as of the close of business on May 20, 2024.

In conjunction with its first-quarter earnings release, Kelly has published a financial presentation on the Investor Relations page of its public website and will host a conference call at 9 a.m. ET on May 9 to review the results and answer questions. The call may be accessed in one of the following ways:

Via the Internet:
Kellyservices.com

Via the Telephone
(877) 692-8955 (toll free) or (234) 720-6979 (caller paid)
Enter access code 5728672
After the prompt, please enter “#”

A recording of the conference call will be available after 1:30 p.m. ET on May 9, 2024, at (866) 207-1041 (toll-free) and (402) 970-0847 (caller-paid). The access code is 1646639#. The recording will also be available at kellyservices.com during this period.

This release contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about Kelly’s financial expectations, are forward-looking statements. Factors that could cause actual results to differ materially from those contained in this release include, but are not limited to, (i) changing market and economic conditions, (ii) disruption in the labor market and weakened demand for human capital resulting from technological advances, loss of large corporate customers and government contractor requirements, (iii) the impact of laws and regulations (including federal, state and international tax laws), (iv) unexpected changes in claim trends on workers’ compensation, unemployment, disability and medical benefit plans, (v) litigation and other legal liabilities (including tax liabilities) in excess of our estimates, (vi) our ability to achieve our business’s anticipated growth strategies, (vii) our future business development, results of operations and financial condition, (viii) damage to our brands, (ix) dependency on third parties for the execution of critical functions, (x) conducting business in foreign countries, including foreign currency fluctuations, (xi) availability of temporary workers with appropriate skills required by customers, (xii) cyberattacks or other breaches of network or information technology security, and (xiii) other risks, uncertainties and factors discussed in this release and in the Company’s filings with the Securities and Exchange Commission. In some cases, forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “target,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. All information provided in this press release is as of the date of this press release and we undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

About Kelly®

Kelly Services, Inc. (Nasdaq: KELYA, KELYB) helps companies recruit and manage skilled workers and helps job seekers find great work. Since inventing the staffing industry in 1946, we have become experts in the many industries and local and global markets we serve. With a network of suppliers and partners around the world, we connect more than 500,000 people with work every year. Our suite of outsourcing and consulting services ensures companies have the people they need, when and where they are needed most. Headquartered in Troy, Michigan, we empower businesses and individuals to access limitless opportunities in industries such as science, engineering, technology, education, manufacturing, retail, finance, and energy. Revenue in 2023 was $4.8 billion. Learn more at kellyservices.com.

KLYA-FIN

ANALYST & MEDIA CONTACT:
Scott Thomas
(248) 251-7264
scott.thomas@kellyservices.com

Click Here for Full Report