Kelly Services, Inc.
KELLY SERVICES INC (Form: 8-K, Received: 11/08/2017 07:43:49)


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): November 8, 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 nine months ended October 1, 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 November 8, 2017 .
99.2    Presentation materials for November 8, 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.
 
November 8, 2017
 
 
 
 
 
 
 
 
 
/s/ Olivier G. Thirot
Olivier G. Thirot
 
Senior Vice President and Chief Financial Officer
(Principal Financial Officer) 

 
 
 
 
November 8, 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
 
 
Press release dated November 8, 2017
Presentation materials for November 8, 2017 conference call


4


Exhibit 99.1

PRESSRELEASEHEADERA09.JPG
    
KELLY SERVICES ® REPORTS
THIRD QUARTER 2017 EARNINGS

Financial Highlights
Q3 revenue up 6.5%, up 5.3% in constant currency
Q3 operating earnings of $18.2 million, down 3%
Q3 earnings per share of $0.58 compared to $2.06, or $0.44 on an adjusted basis, a 32% increase year-over-year on an adjusted basis.
    
TROY, MI (November 8, 2017) -- Kelly Services (Nasdaq: KELYA ) (Nasdaq: KELYB ), a global leader in providing workforce solutions, today announced results for the third quarter of 2017.

George S. Corona, President and Chief Executive Officer, announced revenue for the third quarter of 2017 totaled $1.3 billion, a 6.5% increase, or 5.3% in constant currency, compared to the corresponding quarter of 2016.
    
Earnings from operations for the third quarter of 2017 totaled $18.2 million, compared to $18.8 million reported for the third quarter of 2016.     

Diluted earnings per share in the third quarter of 2017 were $0.58 compared to $2.06 per share in the third quarter of 2016. During the third quarter of 2016, Kelly transferred its APAC staffing operations to the TS Kelly Asia Pacific joint venture and recorded a pre-tax gain of $87.2 million. Kelly retains a 49% ownership interest in the joint venture. Diluted earnings per share in the third quarter of 2016 include the $1.62 after-tax gain on the APAC JV transaction. Excluding the after-tax gain from 2016 third quarter results, adjusted earnings per share were $0.44 in the third quarter of 2016.
 
Reflecting on the results, Corona stated, “Our third quarter performance confirmed that we are continuing to drive top-line growth and shareholder value, even as we invest in talent, technology, and solutions to accelerate our progress. Our acquisition of Teachers On Call and our decision to implement a digital talent platform confirm that we are not content to stop at short-term growth, and we are strategically positioning Kelly for long-term success as the world of work evolves.”
    
Kelly also reported that on November 7, its board of directors declared a dividend of $0.075 per share. The dividend is payable December 7, 2017 to shareholders of record as of the close of business on November 22, 2017.

In conjunction with its third 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 November 8 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 OCTOBER 1, 2017 AND OCTOBER 2, 2016
(UNAUDITED)
(In millions of dollars except per share data)
 
 
 
 
 
 
 
 
%
 
CC %
 
 
 
2017
 
2016
 
Change
 
Change
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
1,328.8

$
1,247.8

$
81.0

 
6.5

%
5.3

%
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
1,098.1

 
1,032.7

 
65.4

 
6.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit
 
230.7

 
215.1

 
15.6

 
7.3

 
6.2

 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
212.5

 
196.3

 
16.2

 
8.3

 
7.3

 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
18.2

 
18.8

 
(0.6
)
 
(2.9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain on investment in TS Kelly Asia Pacific
 

 
87.2

 
(87.2
)
 
NM

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other expense, net
 
(0.4
)
 
(0.4
)
 

 
(4.8
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings before taxes and equity in net earnings (loss) of affiliate
 
17.8

 
105.6

 
(87.8
)
 
(83.1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax (benefit) expense
 
(4.1
)
 
24.7

 
(28.8
)
 
(116.5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings before equity in net earnings (loss) of affiliate
 
21.9

 
80.9

 
(59.0
)
 
(72.9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity in net earnings (loss) of affiliate
 
1.1

 

 
1.1

 
NM

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings
$
23.0

$
80.9

$
(57.9
)
 
(71.5
)
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per share
$
0.59

$
2.08

$
(1.49
)
 
(71.6
)
%
 
 
Diluted earnings per share
$
0.58

$
2.06

$
(1.48
)
 
(71.8
)
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATISTICS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Staffing fee-based income (included in revenue from services)
$
14.2

$
13.2

$
1.0

 
6.9

%
4.1

%
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
17.4

%
17.2

%
0.2

pts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Conversion rate
 
7.9

 
8.7

 
(0.8
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Return:
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
1.4

 
1.5

 
(0.1
)
 
 
 
 
 
Net earnings
 
1.7

 
6.5

 
(4.8
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective income tax rate
 
(22.9
)
%
23.4

%
(46.3
)
pts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average number of shares outstanding (millions):
 
 
 
 
 
 
 
 
 
 
 
     Basic
 
38.3

 
38.1

 
 
 
 
 
 
 
     Diluted
 
38.8

 
38.4

 
 
 
 
 
 
 

3


KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 39 WEEKS ENDED OCTOBER 1, 2017 AND OCTOBER 2, 2016
(UNAUDITED)
(In millions of dollars except per share data)
 
 
 
 
 
 
 
 
%
 
CC %
 
 
 
2017
 
2016
 
Change
 
Change
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
3,952.1

$
3,972.4

$
(20.3
)
 
(0.5
)
%
(0.7
)
%
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
3,261.0

 
3,294.1

 
(33.1
)
 
(1.0
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit
 
691.1

 
678.3

 
12.8

 
1.9

 
1.7

 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
636.2

 
634.9

 
1.3

 
0.2

 
0.1

 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
54.9

 
43.4

 
11.5

 
26.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain on investment in TS Kelly Asia Pacific
 

 
87.2

 
(87.2
)
 
NM

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other expense, net
 
(2.5
)
 
(1.3
)
 
(1.2
)
 
(91.7
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings before taxes and equity in net earnings (loss) of affiliate
 
52.4

 
129.3

 
(76.9
)
 
(59.5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
 
0.1

 
28.2

 
(28.1
)
 
(99.6
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings before equity in net earnings (loss) of affiliate
 
52.3

 
101.1

 
(48.8
)
 
(48.3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity in net earnings (loss) of affiliate
 
1.6

 
(0.1
)
 
1.7

 
NM

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings
$
53.9

$
101.0

$
(47.1
)
 
(46.7
)
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per share
$
1.38

$
2.59

$
(1.21
)
 
(46.7
)
%
 
 
Diluted earnings per share
$
1.37

$
2.58

$
(1.21
)
 
(46.9
)
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATISTICS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Staffing fee-based income (included in revenue from services)
$
41.4

$
46.3

$
(4.9
)
 
(10.8
)
%
(11.7
)
%
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
17.5

%
17.1

%
0.4

pts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Conversion rate
 
7.9

 
6.4

 
1.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Return:
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
1.4

 
1.1

 
0.3

 
 
 
 
 
Net earnings
 
1.4

 
2.5

 
(1.1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective income tax rate
 
0.2

%
21.8

%
(21.6
)
pts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average number of shares outstanding (millions):
 
 
 
 
 
 
 
 
 
 
 
     Basic
 
38.3

 
38.0

 
 
 
 
 
 
 
     Diluted
 
38.8

 
38.3

 
 
 
 
 
 
 


4


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

 
 
 
 
 
 
 
 
%
 
CC %
 
 
 
2017
 
 
2016
 
Change
 
Change
 
AMERICAS STAFFING
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
554.8

 
$
518.2

 
7.1

%
6.6

%
Gross profit
 
98.8

 
 
95.0

 
4.1

 
3.7

 
Total SG&A expenses
 
85.5

 
 
80.7

 
6.0

 
5.6

 
Earnings from operations
 
13.3

 
 
14.3

 
(6.7
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
17.8

%
 
18.3

%
(0.5
)
 pts.
 
 
Conversion rate
 
13.5

 
 
15.0

 
(1.5
)
 
 
 
Return on sales
 
2.4

 
 
2.8

 
(0.4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GLOBAL TALENT SOLUTIONS
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
503.0

 
$
495.0

 
1.6

%
1.3

%
Gross profit
 
93.0

 
 
86.2

 
7.9

 
7.6

 
Total SG&A expenses
 
72.2

 
 
70.2

 
2.8

 
2.5

 
Earnings from operations
 
20.8

 
 
16.0

 
30.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
18.5

%
 
17.4

%
1.1

 pts.
 
 
Conversion rate
 
22.4

 
 
18.5

 
3.9

 
 
 
Return on sales
 
4.1

 
 
3.2

 
0.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTERNATIONAL STAFFING
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
275.6

 
$
239.3

 
15.2

%
10.4

%
Gross profit
 
39.5

 
 
35.0

 
12.7

 
7.7

 
Total SG&A expenses
 
32.3

 
 
30.5

 
6.1

 
1.9

 
Earnings from operations
 
7.2

 
 
4.5

 
57.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
14.3

%
 
14.7

%
(0.4
)
 pts.
 
 
Conversion rate
 
18.0

 
 
12.9

 
5.1

 
 
 
Return on sales
 
2.6

 
 
1.9

 
0.7

 
 
 

5


KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
September Year to Date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
%
 
CC %
 
 
 
2017
 
 
2016
 
Change
 
Change
 
AMERICAS STAFFING
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
1,703.5

 
$
1,614.7

 
5.5

%
5.3

%
Gross profit
 
307.9

 
 
292.9

 
5.1

 
5.0

 
SG&A expenses excluding restructuring charges
 
252.6

 
 
244.1

 
3.5

 
3.4

 
Restructuring charges
 
0.4

 
 
1.8

 
(80.0
)
 
(79.8
)
 
Total SG&A expenses
 
253.0

 
 
245.9

 
2.9

 
2.8

 
Earnings from operations
 
54.9

 
 
47.0

 
16.8

 
 
 
Earnings from operations excluding restructuring charges
 
55.3

 
 
48.8

 
13.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
18.1

%
 
18.1

%

 pts.
 
 
Conversion rate
 
17.8

 
 
16.1

 
1.7

 
 
 
Conversion rate excluding restructuring charges
 
18.0

 
 
16.7

 
1.3

 
 
 
Return on sales
 
3.2

 
 
2.9

 
0.3

 
 
 
Return on sales excluding restructuring charges
 
3.2

 
 
3.0

 
0.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
GLOBAL TALENT SOLUTIONS
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
1,495.8

 
$
1,486.5

 
0.6

%
0.6

%
Gross profit
 
272.2

 
 
257.2

 
5.8

 
5.9

 
SG&A expenses excluding restructuring charges
 
218.8

 
 
213.2

 
2.6

 
2.7

 
Restructuring charges
 
2.0

 
 
0.4

 
415.5

 
417.6

 
Total SG&A expenses
 
220.8

 
 
213.6

 
3.4

 
3.5

 
Earnings from operations
 
51.4

 
 
43.6

 
18.0

 
 
 
Earnings from operations excluding restructuring charges
 
53.4

 
 
44.0

 
21.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
18.2

%
 
17.3

%
0.9

 pts.
 
 
Conversion rate
 
18.9

 
 
16.9

 
2.0

 
 
 
Conversion rate excluding restructuring charges
 
19.6

 
 
17.1

 
2.5

 
 
 
Return on sales
 
3.4

 
 
2.9

 
0.5

 
 
 
Return on sales excluding restructuring charges
 
3.6

 
 
3.0

 
0.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTERNATIONAL STAFFING
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
766.0

 
$
885.6

 
(13.5
)
%
(14.0
)
%
Gross profit
 
112.7

 
 
131.4

 
(14.2
)
 
(14.8
)
 
SG&A expenses excluding restructuring charges
 
96.2

 
 
115.1

 
(16.4
)
 
(16.8
)
 
Restructuring charges
 

 
 
1.2

 
(100.0
)
 
(100.0
)
 
Total SG&A expenses
 
96.2

 
 
116.3

 
(17.2
)
 
(17.6
)
 
Earnings from operations
 
16.5

 
 
15.1

 
9.1

 
 
 
Earnings from operations excluding restructuring charges
 
16.5

 
 
16.3

 
1.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
14.7

%
 
14.8

%
(0.1
)
 pts.
 
 
Conversion rate
 
14.6

 
 
11.5

 
3.1

 
 
 
Conversion rate excluding restructuring charges
 
14.6

 
 
12.3

 
2.3

 
 
 
Return on sales
 
2.2

 
 
1.7

 
0.5

 
 
 
Return on sales excluding restructuring charges
 
2.2

 
 
1.8

 
0.4

 
 
 


6


KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
October 1, 2017
 
Jan. 1, 2017
 
October 2, 2016
 
Current Assets
 
 
 
 
 
 
 
  Cash and equivalents
$
22.2

$
29.6

$
27.6

 
  Trade accounts receivable, less allowances of
 
 
 
 
 
 
 
    $13.1, $12.5 and $11.1, respectively
 
1,271.7

 
1,138.3

 
1,125.8

 
  Prepaid expenses and other current assets
 
70.0

 
46.7

 
53.0

 
Total current assets
 
1,363.9

 
1,214.6

 
1,206.4

 
 
 
 
 
 
 
 
 
Noncurrent Assets
 
 
 
 
 
 
 
  Property and equipment, net
 
81.4

 
80.8

 
80.5

 
  Deferred taxes
 
192.0

 
180.1

 
179.8

 
  Goodwill
 
107.1

 
88.4

 
88.4

 
  Investment in equity affiliate
 
116.4

 
114.8

 
113.6

 
  Other assets
 
475.9

 
349.4

 
370.6

 
Total noncurrent assets
 
972.8

 
813.5

 
832.9

 
 
 
 
 
 
 
 
 
Total Assets
$
2,336.7

$
2,028.1

$
2,039.3

 
 
 
 
 
 
 
 
 
Current Liabilities
 
 
 
 
 
 
 
  Short-term borrowings
$
23.9

$

$
8.7

 
  Accounts payable and accrued liabilities
 
496.1

 
455.1

 
408.7

 
  Accrued payroll and related taxes
 
312.6

 
241.5

 
276.9

 
  Accrued insurance
 
25.6

 
23.4

 
26.8

 
  Income and other taxes
 
60.0

 
51.1

 
56.9

 
Total current liabilities
 
918.2

 
771.1

 
778.0

 
 
 
 
 
 
 
 
 
Noncurrent Liabilities
 
 
 
 
 
 
 
  Accrued insurance
 
49.7

 
45.5

 
40.2

 
  Accrued retirement benefits
 
175.0

 
157.4

 
153.9

 
  Other long-term liabilities
 
66.8

 
42.1

 
50.7

 
Total noncurrent liabilities
 
291.5

 
245.0

 
244.8

 
 
 
 
 
 
 
 
 
Stockholders' Equity
 
 
 
 
 
 
 
  Common stock
 
40.1

 
40.1

 
40.1

 
  Treasury stock
 
(35.2
)
 
(39.0
)
 
(39.1
)
 
  Paid-in capital
 
30.0

 
28.6

 
26.2

 
  Earnings invested in the business
 
968.8

 
923.6

 
906.8

 
  Accumulated other comprehensive income
 
123.3

 
58.7

 
82.5

 
Total stockholders' equity
 
1,127.0

 
1,012.0

 
1,016.5

 
 
 
 
 
 
 
 
 
Total Liabilities and Stockholders' Equity
$
2,336.7

$
2,028.1

$
2,039.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATISTICS:
 
 
 
 
 
 
 
 Working Capital
$
445.7

$
443.5

$
428.4

 
 Current Ratio
 
1.5

 
1.6

 
1.6

 
 Debt-to-capital %
 
2.1

%

%
0.9

%
 Global Days Sales Outstanding
 
58

 
53

 
56

 
 Year-to-Date Free Cash Flow
$
18.2

$
26.9

$
20.4

 

7


KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 39 WEEKS ENDED OCTOBER 1, 2017 AND OCTOBER 2, 2016
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
2017
 
2016
Cash flows from operating activities:
 
 
 
 
Net earnings
$
53.9

$
101.0

Noncash adjustments:
 
 
 
 
Depreciation and amortization
 
16.5

 
16.0

Provision for bad debts
 
3.6

 
6.1

Stock-based compensation
 
6.8

 
7.6

Gain on investment in TS Kelly Asia Pacific equity affiliate
 

 
(87.2
)
Other, net
 
(2.3
)
 
(2.2
)
Changes in operating assets and liabilities, net of acquisition
 
(45.6
)
 
(13.1
)
 
 
 
 
 
Net cash from operating activities
 
32.9

 
28.2

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Capital expenditures
 
(14.7
)
 
(7.8
)
Acquisition of company, net of cash received
 
(37.2
)
 

Net cash proceeds from investment in TS Kelly Asia Pacific equity affiliate
 

 
18.8

Proceeds from repayment of loan to TS Kelly equity affiliate
 
0.6

 

Other investing activities
 

 
(0.4
)
 
 
 
 
 
Net cash (used in) from investing activities
 
(51.3
)
 
10.6

 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Net change in short-term borrowings
 
23.9

 
(47.8
)
Dividend payments
 
(8.7
)
 
(7.7
)
Payments of tax withholding for restricted shares
 
(1.7
)
 
(2.1
)
Other financing activities
 
(0.1
)
 
0.4

 
 
 
 
 
Net cash from (used in) financing activities
 
13.4

 
(57.2
)
 
 
 
 
 
Effect of exchange rates on cash and equivalents
 
(2.4
)
 
3.8

 
 
 
 
 
Net change in cash and equivalents
 
(7.4
)
 
(14.6
)
Cash and equivalents at beginning of period
 
29.6

 
42.2

 
 
 
 
 
 
 
 
 
 
Cash and equivalents at end of period
$
22.2

$
27.6



8


KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
Third Quarter (Americas, International and GTS)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
%
 
CC %
 
 
 
2017
 
2016
 
Change
 
Change
 
 
 
 
 
 
 
 
 
 
 
Americas
 
 
 
 
 
 
 
 
 
United States
$
941.1

$
900.3

 
4.5

%
4.5

%
Canada
 
37.1

 
34.9

 
6.2

 
1.9

 
Mexico
 
32.9

 
27.6

 
19.4

 
13.3

 
Puerto Rico
 
15.9

 
20.9

 
(23.8
)
 
(23.8
)
 
Brazil
 
12.3

 
13.3

 
(7.4
)
 
(9.4
)
 
Total Americas
 
1,039.3

 
997.0

 
4.2

 
3.9

 
 
 
 
 
 
 
 
 
 
 
EMEA
 
 
 
 
 
 
 
 
 
France
 
73.0

 
60.8

 
20.1

 
14.1

 
Switzerland
 
59.1

 
55.0

 
7.4

 
6.0

 
Portugal
 
46.0

 
39.2

 
17.5

 
11.6

 
United Kingdom
 
23.3

 
19.5

 
19.1

 
19.5

 
Russia
 
22.5

 
18.4

 
22.4

 
11.6

 
Italy
 
15.9

 
13.6

 
17.1

 
11.1

 
Germany
 
15.5

 
14.2

 
8.5

 
3.0

 
Norway
 
8.9

 
8.4

 
7.2

 
2.5

 
Ireland
 
8.3

 
7.7

 
8.1

 
2.6

 
Other
 
12.1

 
9.7

 
25.0

 
18.4

 
Total EMEA
 
284.6

 
246.5

 
15.5

 
10.7

 
 
 
 
 
 
 
 
 
 
 
Total APAC
 
4.9

 
4.3

 
12.6

 
8.8

 
 
 
 
 
 
 
 
 
 
 
Total Kelly Services, Inc.
$
1,328.8

$
1,247.8

 
6.5

%
5.3

%
 
 
 
 
 
 
 
 
 
 


9


KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
September Year to Date (Americas, International and GTS)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
%
 
CC %
 
 
 
2017
 
2016
 
Change
 
Change
 
 
 
 
 
 
 
 
 
 
 
Americas
 
 
 
 
 
 
 
 
 
United States
$
2,866.8

$
2,765.8

 
3.7

%
3.7

%
Canada
 
105.8

 
105.2

 
0.6

 
(0.5
)
 
Mexico
 
85.0

 
79.6

 
6.8

 
9.1

 
Puerto Rico
 
51.2

 
65.9

 
(22.3
)
 
(22.3
)
 
Brazil
 
38.3

 
33.5

 
14.3

 
1.6

 
Total Americas
 
3,147.1

 
3,050.0

 
3.2

 
3.1

 
 
 
 
 
 
 
 
 
 
 
EMEA
 
 
 
 
 
 
 
 
 
France
 
202.1

 
178.6

 
13.2

 
13.3

 
Switzerland
 
161.3

 
156.2

 
3.3

 
3.6

 
Portugal
 
124.0

 
111.6

 
11.1

 
11.2

 
Russia
 
69.3

 
49.0

 
41.5

 
21.5

 
United Kingdom
 
64.3

 
66.2

 
(2.9
)
 
5.7

 
Italy
 
45.3

 
42.1

 
7.6

 
7.7

 
Germany
 
43.3

 
45.3

 
(4.5
)
 
(4.3
)
 
Norway
 
24.9

 
24.4

 
2.2

 
1.0

 
Ireland
 
23.4

 
18.1

 
295.0

 
29.8

 
Other
 
33.5

 
27.8

 
20.7

 
20.5

 
Total EMEA
 
791.4

 
719.3

 
10.0

 
9.6

 
 
 
 
 
 
 
 
 
 
 
Total APAC
 
13.6

 
203.1

 
(93.3
)
  <