Kelly Services, Inc.
KELLY SERVICES INC (Form: 8-K, Received: 08/09/2017 07:47:22)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
 
Date of Report (Date of earliest event reported): August 9, 2017
 
 
KELLY SERVICES, INC.
---------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
 
DELAWARE
0-1088
38-1510762
(State or other 
(Commission
(IRS Employer
jurisdiction of 
File Number)
Identification
incorporation) 
 
Number)


                                     
999 WEST BIG BEAVER ROAD, TROY, MICHIGAN 48084
-------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
 
(248) 362-4444
----------------------------------------------------------------------
(Registrant's telephone number, including area code)
 
 
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2. below):
 
[ ] Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)
 
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
     (17 CFR 240.14a-12)
 
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
     the Exchange Act (17 CFR 240.14d-2(b))
 
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under
     the Exchange Act (17 CFR 240.13e-4(c))









1




Item 2.02. Results of Operations and Financial Condition
 
Kelly Services, Inc. (the “Company”) today released financial information containing highlighted financial data for the three and six months ended July 2, 2017 . A copy of the press release is attached as exhibit 99.1 herein.
 
Item 9.01. Financial Statements and Exhibits
 
(d) Exhibits
 
99.1    Press Release dated August 9, 2017 .
99.2    Presentation materials for August 9, 2017 conference call.

















































2





SIGNATURES
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
 
 
 
KELLY SERVICES, INC.
 
August 9, 2017
 
 
 
 
 
 
 
 
 
/s/ Olivier G. Thirot
Olivier G. Thirot
 
Senior Vice President and Chief Financial Officer
(Principal Financial Officer) 

 
 
 
 
August 9, 2017
 
 
 
 
 
 
 
 
 
/s/ Laura S. Lockhart
Laura S. Lockhart 

Vice President, Corporate Controller and
Chief Accounting Officer
(Principal Accounting Officer)
 






















3






EXHIBIT INDEX
  
Exhibit No.
                     Description
 
 
99.1
Press release dated August 9, 2017
99.2
Presentation materials for August 9, 2017 conference call


4


Exhibit 99.1

PRESSRELEASEHEADERA08.JPG
    
KELLY SERVICES ® REPORTS
SECOND QUARTER EARNINGS

Financial Highlights
Q2 revenue down 3%; up 4% adjusted for the APAC Joint Venture transaction in 2016
Q2 operating earnings up 105%; up 71% adjusted for 2016 restructuring charges and the APAC Joint Venture transaction
Q2 earnings per share of $0.47 versus $0.23 (2016 Adjusted EPS of $0.27)
    
TROY, MI (August 9, 2017) -- Kelly Services (Nasdaq: KELYA ) (Nasdaq: KELYB ), a global leader in providing workforce solutions, today announced results for the second quarter of 2017.

George S. Corona, President and Chief Executive Officer, announced revenue for the second quarter of 2017 totaled $1.3 billion, a 3% decrease compared to the corresponding quarter of 2016. Revenue comparisons are unfavorably impacted by the transfer of APAC staffing operations to the TS Kelly Asia Pacific Joint Venture at the beginning of the third quarter of 2016.
    
Earnings from operations for the second quarter of 2017 totaled $20.3 million, compared to $9.9 million reported for the second quarter of 2016. Included in the results of operations in the second quarter of 2016 are restructuring charges of $3.4 million. Excluding the restructuring charges and the APAC staffing operations from 2016, earnings from operations in 2016 were $11.9 million.
    
Diluted earnings per share in the second quarter of 2017 were $0.47 compared to $0.23 per share in the second quarter of 2016. Excluding the restructuring charges and the APAC staffing operations, earnings per share were $0.27 in the second quarter of 2016.

Reflecting on the results, Corona stated, “It was a successful quarter that confirmed our strategic direction and continued Kelly’s forward momentum in the market. Our performance demonstrates our sustained ability to grow the top line, operate more efficiently, and deliver solid returns to our shareholders--all while continuing to invest in the future. I’m incredibly proud of our Kelly teams’ commitment to growth and delivering such strong results.”
    
Kelly also reported that on August 8, its board of directors declared a dividend of $0.075 per share. The dividend is payable September 1, 2017 to shareholders of record as of the close of business on August 22, 2017.

In conjunction with its second quarter earnings release, Kelly Services has published a financial presentation on the Investor Relations page of our public website and will host a conference call at 9:00 a.m. (ET) on August 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:
U.S.
1 800 288-9626
International
1 651 291-5254
The pass code is Kelly Services

1



This release contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties.  These factors include, but are not limited to, competitive market pressures including pricing and technology introductions and disruptions, changing market and economic conditions, our ability to achieve our business strategy, the risk of damage to our brand, the risk our intellectual property assets could be infringed upon or compromised, our ability to successfully develop new service offerings, our exposure to risks associated with services outside traditional staffing, including business process outsourcing, our increasing dependency on third parties for the execution of critical functions, the risks associated with past and future acquisitions, exposure to risks associated with investments in equity affiliates including TS Kelly Asia Pacific, material changes in demand from or loss of large corporate customers as well as changes in their buying practices, risks associated with conducting business in foreign countries, including foreign currency fluctuations, availability of full-time employees to lead complex talent supply chain sales and operations, availability of temporary workers with appropriate skills required by customers, liabilities for employment-related claims and losses, including class action lawsuits and collective actions, risks arising from failure to preserve the privacy of information entrusted to us or to meet our obligations under global privacy laws, the risk of cyber attacks or other breaches of network or information technology security, our ability to sustain critical business applications through our key data centers, our ability to effectively implement and manage our information technology programs, our ability to maintain adequate financial and management processes and controls, impairment charges triggered by adverse industry developments or operational circumstances, unexpected changes in claim trends on workers’ compensation, unemployment compensation, disability and medical benefit plans, the impact of changes in laws and regulations (including federal, state and international tax laws), the risk of additional tax or unclaimed property liabilities in excess of our estimates, our ability to maintain specified financial covenants in our bank facilities to continue to access credit markets, and other risks, uncertainties and factors discussed in this release and in the Company’s filings with the Securities and Exchange Commission.  Actual results may differ materially from any forward looking statements contained herein, and we have no intention to update these statements.

About Kelly Services ®  

As a global leader in providing workforce solutions, Kelly Services, Inc. (Nasdaq: KELYA, KELYB) and its subsidiaries, offer a comprehensive array of outsourcing and consulting services as well as world-class staffing on a temporary, temporary-to-hire, and direct-hire basis. Kelly® directly employs nearly 500,000 people around the world in addition to having a role in connecting thousands more with work through its global network of talent suppliers and partners. Revenue in 2016 was $5.3 billion.  Visit  kellyservices.com  and connect with us on  Facebook LinkedIn , &  Twitter .  


KLYA-FIN

# # #


ANALYST CONTACT :
MEDIA CONTACT :
James Polehna
Jane Stehney    
(248) 244-4586
(248) 244-5630
james_polehna@kellyservices.com
jane_stehney@kellyservices.com




2


`
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED JULY 2, 2017 AND JULY 3, 2016
(UNAUDITED)
(In millions of dollars except per share data)
 
 
 
 
 
 
 
 
%
 
CC %
 
 
 
2017
 
2016
 
Change
 
Change
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
1,333.6

$
1,375.5

$
(41.9
)
 
(3.1
)
%
(2.7
)
%
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
1,104.8

 
1,145.0

 
(40.2
)
 
(3.5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit
 
228.8

 
230.5

 
(1.7
)
 
(0.7
)
 
(0.4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
208.5

 
220.6

 
(12.1
)
 
(5.5
)
 
(5.1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
20.3

 
9.9

 
10.4

 
104.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other expense, net
 
0.5

 

 
0.5

 
NM

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings before taxes and equity in net earnings (loss) of affiliate
 
19.8

 
9.9

 
9.9

 
99.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
 
1.5

 
0.8

 
0.7

 
87.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings before equity in net earnings (loss) of affiliate
 
18.3

 
9.1

 
9.2

 
100.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity in net earnings (loss) of affiliate
 
0.4

 
(0.2
)
 
0.6

 
255.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings
$
18.7

$
8.9

$
9.8

 
110.0

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per share
$
0.48

$
0.23

$
0.25

 
108.7

%
 
 
Diluted earnings per share
$
0.47

$
0.23

$
0.24

 
104.3

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATISTICS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Staffing fee-based income (included in revenue from services)
$
13.7

$
16.6

$
(2.9
)
 
(16.9
)
%
(17.1
)
%
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
17.2

%
16.8

%
0.4

pts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Conversion rate
 
8.9

 
4.3

 
4.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Return:
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
1.5

 
0.7

 
0.8

 
 
 
 
 
Net earnings
 
1.4

 
0.6

 
0.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective income tax rate
 
7.6

%
8.1

%
(0.5
)
pts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average number of shares outstanding (millions):
 
 
 
 
 
 
 
 
 
 
 
     Basic
 
38.3

 
38.0

 
 
 
 
 
 
 
     Diluted
 
38.8

 
38.3

 
 
 
 
 
 
 

3


KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 26 WEEKS ENDED JULY 2, 2017 AND JULY 3, 2016
(UNAUDITED)
(In millions of dollars except per share data)
 
 
 
 
 
 
 
 
%
 
CC %
 
 
 
2017
 
2016
 
Change
 
Change
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
2,623.3

$
2,724.6

$
(101.3
)
 
(3.7
)
%
(3.4
)
%
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
2,162.9

 
2,261.4

 
(98.5
)
 
(4.4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit
 
460.4

 
463.2

 
(2.8
)
 
(0.6
)
 
(0.3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
423.7

 
438.6

 
(14.9
)
 
(3.4
)
 
(3.1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
36.7

 
24.6

 
12.1

 
48.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other expense, net
 
2.1

 
0.9

 
1.2

 
128.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings before taxes and equity in net earnings (loss) of affiliate
 
34.6

 
23.7

 
10.9

 
45.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
 
4.2

 
3.5

 
0.7

 
20.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings before equity in net earnings (loss) of affiliate
 
30.4

 
20.2

 
10.2

 
50.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity in net earnings (loss) of affiliate
 
0.5

 
(0.1
)
 
0.6

 
NM

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings
$
30.9

$
20.1

$
10.8

 
53.3

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per share
$
0.79

$
0.52

$
0.27

 
51.9

%
 
 
Diluted earnings per share
$
0.78

$
0.51

$
0.27

 
52.9

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATISTICS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Staffing fee-based income (included in revenue from services)
$
27.2

$
33.1

$
(5.9
)
 
(17.8
)
%
(18.0
)
%
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
17.6

%
17.0

%
0.6

pts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Conversion rate
 
8.0

 
5.3

 
2.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Return:
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
1.4

 
0.9

 
0.5

 
 
 
 
 
Net earnings
 
1.2

 
0.7

 
0.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective income tax rate
 
12.2

%
14.8

%
(2.6
)
pts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average number of shares outstanding (millions):
 
 
 
 
 
 
 
 
 
 
 
     Basic
 
38.3

 
38.0

 
 
 
 
 
 
 
     Diluted
 
38.7

 
38.2

 
 
 
 
 
 
 


4


KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
Second Quarter
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
%
 
CC %
 
 
 
2017
 
 
2016
 
Change
 
Change
 
AMERICAS STAFFING
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
575.6

 
$
542.4

 
6.1

%
6.1

%
Gross profit
 
103.8

 
 
97.2

 
6.8

 
6.8

 
SG&A expenses excluding restructuring charges
 
83.4

 
 
79.8

 
4.7

 
4.6

 
Restructuring charges
 

 
 
1.8

 
(100.0
)
 
(100.0
)
 
Total SG&A expenses
 
83.4

 
 
81.6

 
2.3

 
2.3

 
Earnings from operations
 
20.4

 
 
15.6

 
29.9

 
 
 
Earnings from operations excluding restructuring charges
 
20.4

 
 
17.4

 
16.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
18.0

%
 
17.9

%
0.1

 pts.
 
 
Conversion rate
 
19.7

 
 
16.2

 
3.5

 
 
 
Conversion rate excluding restructuring charges
 
19.7

 
 
18.0

 
1.7

 
 
 
Return on sales
 
3.5

 
 
2.9

 
0.6

 
 
 
Return on sales excluding restructuring charges
 
3.5

 
 
3.2

 
0.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
GLOBAL TALENT SOLUTIONS
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
505.5

 
$
500.6

 
1.0

%
1.2

%
Gross profit
 
88.7

 
 
85.7

 
3.5

 
3.9

 
SG&A expenses excluding restructuring charges
 
73.4

 
 
71.4

 
2.8

 
3.2

 
Restructuring charges
 

 
 
0.4

 
(100.0
)
 
(100.0
)
 
Total SG&A expenses
 
73.4

 
 
71.8

 
2.2

 
2.7

 
Earnings from operations
 
15.3

 
 
13.9

 
10.1

 
 
 
Earnings from operations excluding restructuring charges
 
15.3

 
 
14.3

 
7.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
17.5

%
 
17.1

%
0.4

 pts.
 
 
Conversion rate
 
17.2

 
 
16.2

 
1.0

 
 
 
Conversion rate excluding restructuring charges
 
17.2

 
 
16.6

 
0.6

 
 
 
Return on sales
 
3.0

 
 
2.8

 
0.2

 
 
 
Return on sales excluding restructuring charges
 
3.0

 
 
2.8

 
0.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTERNATIONAL STAFFING
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
256.8

 
$
337.3

 
(23.9
)
%
(22.8
)
%
Gross profit
 
36.8

 
 
48.6

 
(24.1
)
 
(23.3
)
 
SG&A expenses excluding restructuring charges
 
32.7

 
 
43.4

 
(24.9
)
 
(23.9
)
 
Restructuring charges
 

 
 
1.2

 
(100.0
)
 
(100.0
)
 
Total SG&A expenses
 
32.7

 
 
44.6

 
(26.8
)
 
(25.8
)
 
Earnings from operations
 
4.1

 
 
4.0

 
6.3

 
 
 
Earnings from operations excluding restructuring charges
 
4.1

 
 
5.2

 
(17.6
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
14.3

%
 
14.4

%
(0.1
)
 pts.
 
 
Conversion rate
 
11.2

 
 
8.0

 
3.2

 
 
 
Conversion rate excluding restructuring charges
 
11.2

 
 
10.3

 
0.9

 
 
 
Return on sales
 
1.6

 
 
1.2

 
0.4

 
 
 
Return on sales excluding restructuring charges
 
1.6

 
 
1.5

 
0.1

 
 
 

5


KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
June Year to Date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
%
 
CC %
 
 
 
2017
 
 
2016
 
Change
 
Change
 
AMERICAS STAFFING
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
1,148.7

 
$
1,096.5

 
4.8

%
4.7

%
Gross profit
 
209.1

 
 
197.9

 
5.7

 
5.6

 
SG&A expenses excluding restructuring charges
 
167.1

 
 
163.4

 
2.3

 
2.3

 
Restructuring charges
 
0.4

 
 
1.8

 
(80.0
)
 
(79.8
)
 
Total SG&A expenses
 
167.5

 
 
165.2

 
1.4

 
1.4

 
Earnings from operations
 
41.6

 
 
32.7

 
27.0

 
 
 
Earnings from operations excluding restructuring charges
 
42.0

 
 
34.5

 
21.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
18.2

%
 
18.1

%
0.1

 pts.
 
 
Conversion rate
 
19.9

 
 
16.6

 
3.3

 
 
 
Conversion rate excluding restructuring charges
 
20.1

 
 
17.5

 
2.6

 
 
 
Return on sales
 
3.6

 
 
3.0

 
0.6

 
 
 
Return on sales excluding restructuring charges
 
3.7

 
 
3.2

 
0.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
GLOBAL TALENT SOLUTIONS
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
992.8

 
$
991.5

 
0.1

%
0.2

%
Gross profit
 
179.2

 
 
171.0

 
4.8

 
5.0

 
SG&A expenses excluding restructuring charges
 
146.6

 
 
143.0

 
2.5

 
2.8

 
Restructuring charges
 
2.0

 
 
0.4

 
415.5

 
417.6

 
Total SG&A expenses
 
148.6

 
 
143.4

 
3.6

 
4.0

 
Earnings from operations
 
30.6

 
 
27.6

 
10.8

 
 
 
Earnings from operations excluding restructuring charges
 
32.6

 
 
28.0

 
16.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
18.0

%
 
17.2

%
0.8

 pts.
 
 
Conversion rate
 
17.1

 
 
16.1

 
1.0

 
 
 
Conversion rate excluding restructuring charges
 
18.2

 
 
16.3

 
1.9

 
 
 
Return on sales
 
3.1

 
 
2.8

 
0.3

 
 
 
Return on sales excluding restructuring charges
 
3.3

 
 
2.8

 
0.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTERNATIONAL STAFFING
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
490.4

 
$
646.3

 
(24.1
)
%
(23.0
)
%
Gross profit
 
73.2

 
 
96.4

 
(24.0
)
 
(23.0
)
 
SG&A expenses excluding restructuring charges
 
63.9

 
 
84.6

 
(24.6
)
 
(23.6
)
 
Restructuring charges
 

 
 
1.2

 
(100.0
)
 
(100.0
)
 
Total SG&A expenses
 
63.9

 
 
85.8

 
(25.6
)
 
(24.6
)
 
Earnings from operations
 
9.3

 
 
10.6

 
(11.4
)
 
 
 
Earnings from operations excluding restructuring charges
 
9.3

 
 
11.8

 
(19.9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
14.9

%
 
14.9

%

 pts.
 
 
Conversion rate
 
12.8

 
 
11.0

 
1.8

 
 
 
Conversion rate excluding restructuring charges
 
12.8

 
 
12.1

 
0.7

 
 
 
Return on sales
 
1.9

 
 
1.6

 
0.3

 
 
 
Return on sales excluding restructuring charges
 
1.9

 
 
1.8

 
0.1

 
 
 


6


KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
July 2, 2017
 
Jan. 1, 2017
 
July 3, 2016
 
Current Assets
 
 
 
 
 
 
 
  Cash and equivalents
$
60.8

$
29.6

$
33.3

 
  Trade accounts receivable, less allowances of
 
 
 
 
 
 
 
    $12.7, $12.5 and $11.0, respectively
 
1,188.1

 
1,138.3

 
1,079.8

 
  Prepaid expenses and other current assets
 
61.8

 
46.7

 
47.8

 
  Current assets held for sale
 

 

 
94.0

 
Total current assets
 
1,310.7

 
1,214.6

 
1,254.9

 
 
 
 
 
 
 
 
 
Noncurrent Assets
 
 
 
 
 
 
 
  Property and equipment, net
 
81.5

 
80.8

 
81.5

 
  Deferred taxes
 
185.8

 
180.1

 
197.0

 
  Goodwill
 
88.4

 
88.4

 
88.3

 
  Investment in equity affiliate
 
115.2

 
114.8

 
9.3

 
  Other assets
 
402.5

 
349.4

 
359.1

 
Total noncurrent assets
 
873.4

 
813.5

 
735.2

 
 
 
 
 
 
 
 
 
Total Assets
$
2,184.1

$
2,028.1

$
1,990.1

 
 
 
 
 
 
 
 
 
Current Liabilities
 
 
 
 
 
 
 
  Short-term borrowings
$
0.7

$

$
26.9

 
  Accounts payable and accrued liabilities
 
476.1

 
455.1

 
403.7

 
  Accrued payroll and related taxes
 
286.4

 
241.5

 
259.2

 
  Accrued insurance
 
22.8

 
23.4

 
27.1

 
  Income and other taxes
 
57.0

 
51.1

 
50.9

 
  Current liabilities held for sale
 

 

 
48.0

 
Total current liabilities
 
843.0

 
771.1

 
815.8

 
 
 
 
 
 
 
 
 
Noncurrent Liabilities
 
 
 
 
 
 
 
  Accrued insurance
 
44.2

 
45.5

 
41.1

 
  Accrued retirement benefits
 
170.1

 
157.4

 
148.5

 
  Other long-term liabilities
 
53.4

 
42.1

 
50.6

 
Total noncurrent liabilities
 
267.7

 
245.0

 
240.2

 
 
 
 
 
 
 
 
 
Stockholders' Equity
 
 
 
 
 
 
 
  Common stock
 
40.1

 
40.1

 
40.1

 
  Treasury stock
 
(37.6
)
 
(39.0
)
 
(42.1
)
 
  Paid-in capital
 
31.1

 
28.6

 
28.1

 
  Earnings invested in the business
 
948.7

 
923.6

 
828.8

 
  Accumulated other comprehensive income
 
91.1

 
58.7

 
79.2

 
Total stockholders' equity
 
1,073.4

 
1,012.0

 
934.1

 
 
 
 
 
 
 
 
 
Total Liabilities and Stockholders' Equity
$
2,184.1

$
2,028.1

$
1,990.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATISTICS:
 
 
 
 
 
 
 
 Working Capital
$
467.7

$
443.5

$
439.1

 
 Current Ratio
 
1.6

 
1.6

 
1.5

 
 Debt-to-capital %
 
0.1

%

%
2.8

%
 Global Days Sales Outstanding
 
55

 
53

 
53

 
 Year-to-Date Free Cash Flow
$
36.7

$
24.7

$
36.9

 

7


KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 26 WEEKS ENDED JULY 2, 2017 AND JULY 3, 2016
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
2017
 
2016
Cash flows from operating activities:
 
 
 
 
Net earnings
$
30.9

$
20.1

Noncash adjustments:
 
 
 
 
Depreciation and amortization
 
10.6

 
10.9

Provision for bad debts
 
2.9

 
3.5

Stock-based compensation
 
3.6

 
4.5

Other, net
 
(0.5
)
 
(0.7
)
Changes in operating assets and liabilities
 
(3.5
)
 
2.9

 
 
 
 
 
Net cash from operating activities
 
44.0

 
41.2

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Capital expenditures
 
(7.3
)
 
(4.3
)
Other investing activities
 
(0.1
)
 
(0.4
)
 
 
 
 
 
Net cash used in investing activities
 
(7.4
)
 
(4.7
)
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Net change in short-term borrowings
 
0.7

 
(29.1
)
Dividend payments
 
(5.8
)
 
(4.8
)
Other financing activities
 
(0.1
)
 
0.2

 
 
 
 
 
Net cash used in financing activities
 
(5.2
)
 
(33.7
)
 
 
 
 
 
Effect of exchange rates on cash and equivalents
 
(0.2
)
 
6.4

 
 
 
 
 
Net change in cash and equivalents
 
31.2

 
9.2

Less: cash balance included in current assets held for sale
 

 
(18.1
)
Cash and equivalents at beginning of period
 
29.6

 
42.2

 
 
 
 
 
 
 
 
 
 
Cash and equivalents at end of period
$
60.8

$
33.3



8


KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
Second Quarter (Americas, International and GTS)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
%
 
CC %
 
 
 
2017
 
2016
 
Change
 
Change
 
 
 
 
 
 
 
 
 
 
 
Americas
 
 
 
 
 
 
 
 
 
United States
$
970.1

$
930.8

 
4.2

%
4.2

%
Canada
 
34.6

 
35.8

 
(3.1
)
 
1.0

 
Mexico
 
28.3

 
25.4

 
11.0

 
13.4

 
Puerto Rico
 
17.6

 
22.5

 
(21.9
)
 
(21.9
)
 
Brazil
 
12.7

 
10.2

 
23.8

 
9.2

 
Total Americas
 
1,063.3

 
1,024.7

 
3.8

 
3.8

 
 
 
 
 
 
 
 
 
 
 
EMEA
 
 
 
 
 
 
 
 
 
France
 
68.3

 
61.3

 
11.5

 
14.1

 
Switzerland
 
53.9

 
54.6

 
(1.2
)
 

 
Portugal
 
41.7

 
38.7

 
7.4

 
10.1

 
Russia
 
24.0

 
16.6

 
44.4

 
25.9

 
United Kingdom
 
20.8

 
23.1

 
(9.7
)
 
1.1

 
Italy
 
15.7

 
15.1

 
3.9

 
6.0

 
Germany
 
14.6

 
15.7

 
(6.1
)
 
(3.7
)
 
Norway
 
8.4

 
8.4

 
(1.3
)
 
1.8

 
Ireland
 
7.4

 
5.4

 
36.0

 
39.3

 
Other
 
11.0

 
9.4

 
17.4

 
19.6

 
Total EMEA
 
265.8

 
248.3

 
7.1

 
8.7

 
 
 
 
 
 
 
 
 
 
 
Total APAC
 
4.5

 
102.5

 
(95.6
)
 
(95.6
)
 
 
 
 
 
 
 
 
 
 
 
Total Kelly Services, Inc.
$
1,333.6

$
1,375.5

 
(3.1
)
%
(2.7
)
%
 
 
 
 
 
 
 
 
 
 


9


KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
June Year to Date (Americas, International and GTS)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
%
 
CC %
 
 
 
2017
 
2016
 
Change
 
Change
 
 
 
 
 
 
 
 
 
 
 
Americas
 
 
 
 
 
 
 
 
 
United States
$
1,925.7

$
1,865.5

 
3.2

%
3.2

%
Canada
 
68.7

 
70.3

 
(2.2
)
 
(1.7
)
 
Mexico
 
52.1

 
52.0

 
0.1

 
6.9

 
Puerto Rico
 
35.3

 
45.0

 
(21.7
)
 
(21.7
)
 
Brazil
 
26.0

 
20.2

 
28.6

 
8.9

 
Total Americas
 
2,107.8

 
2,053.0

 
2.7

 
2.7

 
 
 
 
 
 
 
 
 
 
 
EMEA
 
 
 
 
 
 
 
 
 
France
 
129.1

 
117.8

 
9.6

 
12.9

 
Switzerland
 
102.2

 
101.2

 
1.0

 
2.3

 
Portugal
 
78.0

 
72.4

 
7.6

 
10.9

 
Russia
 
46.8