Press Release Details

 

TROY, MI -- (Marketwired) -- 08/06/14 -- Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a leader in providing workforce solutions, today announced results for the second quarter of 2014.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the second quarter of 2014 totaled $1.4 billion, a 3.2% increase compared to the corresponding quarter of 2013.

Earnings from operations for the second quarter of 2014 totaled $5.9 million, compared to $16.4 million reported for the second quarter of 2013. Included in the results of operations in the second quarter of 2014 are restructuring charges of $1.8 million. The results of operations in the second quarter of 2013 included impairment charges of $1.7 million and restructuring charges of $0.8 million. Excluding the impairment and restructuring charges, earnings from operations were $7.7 million in the second quarter of 2014, compared to adjusted earnings of $18.9 million last year.

Diluted earnings per share in the second quarter of 2014 were $0.07 compared to $0.26 per share in the second quarter of 2013. Adjusted earnings per share were $0.10 in the second quarter of 2014 compared to $0.33 in the second quarter of 2013.

"Our second quarter results aligned with our expectations, and we're pleased with how we've executed our strategy in the first half of 2014," said Camden. "Our investments in OCG continue to yield double-digit revenue, GP, and earnings growth, confirming this segment is meeting the market's increased demand for higher-margin talent supply chain solutions. We're also making the aggressive investments needed to drive growth in specialty staffing across our local US markets, while continuing to invest in the success of our large account base."

Kelly also reported that on August 5, its board of directors declared a dividend of $0.05 per share. The dividend is payable September 8 to shareholders of record as of the close of business on August 18.

In conjunction with its second quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on August 6, to review the results and answer questions. The call may be accessed in one of the following ways:

Via the Telephone:

U.S. 1 800 288-9626
International 1 651 291-5254

The pass code is Kelly Services

Via the Internet:

The call is also available via the internet through the Kelly Services website:
www.kellyservices.com

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, changing market and economic conditions, our ability to achieve our business strategy, our ability to retain the services of our senior management, local management and field personnel, our ability to adequately protect our intellectual property rights, including our brand, our ability to successfully develop new service offerings, our exposure to risks associated with services outside traditional staffing, including business process outsourcing, the risks associated with past and future acquisitions, exposure to risks associated with investments in equity affiliates, material changes in demand from or loss of large corporate customers, risks associated with conducting business in foreign countries, including foreign currency fluctuations, availability of temporary workers with appropriate skills required by customers, liabilities for employment-related claims and losses, including class action lawsuits and collective actions, liability for improper disclosure of sensitive or private employee information, 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 or market developments, unexpected changes in claim trends on workers' compensation, disability and medical benefit plans, the net financial impact of the Patient Protection and Affordable Care Act on our business, the impact of changes in laws and regulations (including federal, state and international tax laws and the expiration and/or reinstatement of the U.S. work opportunity credit program), 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, our ability to access credit markets and continued availability of financing for funding working capital, 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®

Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB) is a leader in providing workforce solutions. Kelly® offers a comprehensive array of outsourcing and consulting services as well as world-class staffing on a temporary, temporary-to-hire and direct-hire basis. Serving clients around the globe, Kelly provided employment to approximately 540,000 employees in 2013. Revenue in 2013 was $5.4 billion. Visit kellyservices.com and connect with us on Facebook, LinkedIn, & Twitter.

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED JUNE 29, 2014 AND JUNE 30, 2013
(UNAUDITED)
(In millions of dollars except per share data)
			2014				2013				Change				% Change
Revenue from services			$	1,410.5			$	1,366.9			$	43.6			3.2	%
Cost of services				1,182.4				1,146.2				36.2			3.2
Gross profit				228.1				220.7				7.4			3.4
Selling, general and administrative expenses				222.2				202.6				19.6			9.7
Asset impairments				--				1.7				(1.7	)		(100.0	)
Earnings from operations				5.9				16.4				(10.5	)		(64.8	)
Other expense, net				0.3				1.6				(1.3	)		84.0
Earnings before taxes				5.6				14.8				(9.2	)		(62.7	)
Income tax expense				2.8				4.8				(2.0	)		(41.8	)
Net earnings			$	2.8			$	10.0			$	(7.2	)		(72.6	)%
Basic earnings per share			$	0.07			$	0.26			$	(0.19	)		(73.1	)%
Diluted earnings per share			$	0.07			$	0.26			$	(0.19	)		(73.1	)%
STATISTICS:
Gross profit rate				16.2	%			16.1	%			0.1		pts.
Selling, general and administrative expenses:
	% of revenue			15.8				14.8				1.0
	% of gross profit			97.5				91.8				5.7
% Return:
	Earnings from operations			0.4				1.2				(0.8	)
	Earnings before taxes			0.4				1.1				(0.7	)
	Net earnings			0.2				0.7				(0.5	)
Effective income tax rate				50.2	%			32.2	%			18.0		pts.
Average number of shares outstanding (millions):
	Basic			37.4				37.2
	Diluted			37.4				37.2
Shares adjusted for nonvested restricted awards (millions):
	Basic			38.5				38.2
	Diluted			38.6				38.2

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 26 WEEKS ENDED JUNE 29, 2014 AND JUNE 30, 2013
(UNAUDITED)
(In millions of dollars except per share data)
			2014				2013				Change				% Change
Revenue from services			$	2,741.3			$	2,681.7			$	59.6			2.2	%
Cost of services				2,290.9				2,244.1				46.8			2.1
Gross profit				450.4				437.6				12.8			2.9
Selling, general and administrative expenses				438.2				412.4				25.8			6.3
Asset impairments				--				1.7				(1.7	)		(100.0	)
Earnings from operations				12.2				23.5				(11.3	)		(48.9	)
Other expense, net				2.0				2.6				(0.6	)		26.2
Earnings before taxes				10.2				20.9				(10.7	)		(51.7	)
Income tax expense (benefit)				4.9				(2.0	)			6.9			338.4
Net earnings			$	5.3			$	22.9			$	(17.6	)		(77.0	)%
Basic earnings per share			$	0.14			$	0.60			$	(0.46	)		(76.7	)%
Diluted earnings per share			$	0.14			$	0.60			$	(0.46	)		(76.7	)%
STATISTICS:
Gross profit rate				16.4	%			16.3	%			0.1		pts.
Selling, general and administrative expenses:
	% of revenue			16.0				15.4				0.6
	% of gross profit			97.3				94.3				3.0
% Return:
	Earnings from operations			0.4				0.9				(0.5	)
	Earnings before taxes			0.4				0.8				(0.4	)
	Net earnings			0.2				0.9				(0.7	)
Effective income tax rate				47.9	%			(9.7)	%			57.6		pts.
Average number of shares outstanding (millions):
	Basic			37.4				37.2
	Diluted			37.4				37.2
Shares adjusted for nonvested restricted awards (millions):
	Basic			38.5				38.2
	Diluted			38.6				38.2

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
					Second Quarter
																	Constant
																	Currency
					2014				2013				Change				Change
AMERICAS
	Commercial
		Revenue from services			$	661.1			$	648.8			1.9	%			2.8	%
		Staffing fee-based income included in revenue from services				3.4				3.2			4.5				6.3
		Gross profit				96.5				94.2			2.5				3.3
		Gross profit rate				14.6	%			14.5	%		0.1			pts.
	PT
		Revenue from services			$	244.2			$	251.2			(2.8)	%			(2.6	)%
		Staffing fee-based income included in revenue from services				3.7				3.5			5.4				6.1
		Gross profit				39.0				39.0			--				0.2
		Gross profit rate				16.0	%			15.5	%		0.5			pts.
	Total Americas
		Revenue from services			$	905.3			$	900.0			0.6	%			1.3	%
		Staffing fee-based income included in revenue from services				7.1				6.7			5.0				6.2
		Gross profit				135.5				133.2			1.8				2.4
		Total SG&A expenses				112.6				102.5			9.9				10.6
		Earnings from operations				22.9				30.7			(25.5	)
		Gross profit rate				15.0	%			14.8	%		0.2			pts.
		Expense rates:
			% of revenue			12.4				11.4			1.0
			% of gross profit			83.1				77.0			6.1
		Return on sales				2.5				3.4			(0.9	)
EMEA
	Commercial
		Revenue from services			$	237.0			$	219.8			7.8	%			4.6	%
		Staffing fee-based income included in revenue from services				5.0				5.0			1.0				0.9
		Gross profit				34.5				33.8			2.1				(0.9	)
		Gross profit rate				14.6	%			15.4	%		(0.8	)		pts.
	PT
		Revenue from services			$	49.7			$	43.1			15.1	%			10.3	%
		Staffing fee-based income included in revenue from services				3.6				3.8			(6.3	)			(7.0	)
		Gross profit				11.3				10.5			7.0				3.7
		Gross profit rate				22.6	%			24.4	%		(1.8	)		pts.
Total EMEA
		Revenue from services			$	286.7			$	262.9			9.0	%			5.5	%
		Staffing fee-based income included in revenue from services				8.6				8.8			(2.2	)			(2.5	)
		Gross profit				45.8				44.3			3.2				0.2
		SG&A expenses excluding restructuring charges				42.3				39.9			5.9
		Restructuring charges				0.8				--			NM
		Total SG&A expenses				43.1				39.9			7.8				4.4
		Earnings from operations				2.7				4.4			(38.5	)
		Earnings from operations excluding restructuring charges				3.5				4.4			(20.6	)
		Gross profit rate				16.0	%			16.9	%		(0.9	)		pts.
		Expense rates (excluding restructuring charges):
			% of revenue			14.7				15.2			(0.5	)
			% of gross profit			92.3				90.0			2.3
		Return on sales (excluding restructuring charges)				1.2				1.7			(0.5	)

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
					Second Quarter
																Constant
																Currency
					2014				2013				Change			Change
APAC
	Commercial
		Revenue from services			$	86.5			$	87.7			(1.3)	%		1.5	%
		Staffing fee-based income included in revenue from services				2.0				2.5			(20.8	)		(17.5	)
		Gross profit				11.7				12.5			(6.8	)		(4.2	)
		Gross profit rate				13.5	%			14.3	%		(0.8	)	pts.
	PT
		Revenue from services			$	10.0			$	10.0			(0.2)	%		3.9	%
		Staffing fee-based income included in revenue from services				2.1				2.5			(14.2	)		(10.7	)
		Gross profit				3.3				3.8			(11.4	)		(7.7	)
		Gross profit rate				33.2	%			37.4	%		(4.2	)	pts.
	Total APAC
		Revenue from services			$	96.5			$	97.7			(1.2)	%		1.8	%
		Staffing fee-based income included in revenue from services				4.1				5.0			(17.5	)		(14.1	)
		Gross profit				15.0				16.3			(7.8	)		(5.0	)
		SG&A expenses excluding restructuring charges				14.8				15.4			(3.5	)
		Restructuring charges				1.0				--			NM
		Total SG&A expenses				15.8				15.4			3.3			7.1
		Earnings from operations				(0.8	)			0.9			NM
		Earnings from operations excluding restructuring charges				0.2				0.9			(82.8	)
		Gross profit rate				15.5	%			16.6	%		(1.1	)	pts.
		Expense rates (excluding restructuring charges):
			% of revenue			15.4				15.7			(0.3	)
			% of gross profit			99.0				94.5			4.5
		Return on sales (excluding restructuring charges)				0.2				0.9			(0.7	)
OCG
		Revenue from services			$	137.9			$	118.3			16.5	%		16.8	%
		Gross profit				32.9				27.7			18.6			(18.5	)
		SG&A expenses excluding restructuring charges				31.1				26.9			15.3
		Restructuring charges				--				0.8			(100.0	)
		Total SG&A expenses				31.1				27.7			12.2			12.1
		Asset impairments				--				1.7			(100.0	)
		Earnings from operations				1.8				(1.7	)		NM
		Earnings from operations excluding restructuring charges				1.8				(0.9	)		NM
		Gross profit rate				23.9	%			23.4	%		0.5		pts.
		Expense rates (excluding restructuring charges):
			% of revenue			22.5				22.8			(0.3	)
			% of gross profit			94.4				97.1			(2.7	)
		Return on sales (excluding restructuring charges)				1.3				(0.7	)		2.0

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
					June Year to Date
																	Constant
																	Currency
					2014				2013				Change				Change
AMERICAS
	Commercial
		Revenue from services			$	1,274.3			$	1,287.1			(1.0	)%			--	%
		Staffing fee-based income included in revenue from services				6.6				6.5			2.9				5.0
		Gross profit				188.3				187.7			0.3				1.3
		Gross profit rate				14.8	%			14.6	%		0.2			pts.
	PT
		Revenue from services			$	480.6			$	493.8			(2.7	)%			(2.5	)%
		Staffing fee-based income included in revenue from services				7.3				6.9			6.1				6.8
		Gross profit				78.8				77.3			2.0				2.2
		Gross profit rate				16.4	%			15.6	%		0.8			pts.
	Total Americas
		Revenue from services			$	1,754.9			$	1,780.9			(1.5)	%			(0.7	)%
		Staffing fee-based income included in revenue from services				13.9				13.4			4.5				5.9
		Gross profit				267.1				265.0			0.8				1.6
		Total SG&A expenses				222.1				210.4			5.6				6.4
		Earnings from operations				45.0				54.6			(17.7	)
		Gross profit rate				15.2	%			14.9	%		0.3			pts.
		Expense rates:
			% of revenue			12.7				11.8			0.9
			% of gross profit			83.2				79.4			3.8
		Return on sales				2.6				3.1			(0.5	)
EMEA
	Commercial
		Revenue from services			$	458.9			$	420.8			9.1	%			7.0	%
		Staffing fee-based income included in revenue from services				9.8				10.3			(4.7	)			(3.5	)
		Gross profit				67.4				64.9			3.9				2.0
		Gross profit rate				14.7	%			15.4	%		(0.7	)		pts.
	PT
		Revenue from services			$	97.4			$	86.6			12.4	%			8.6	%
		Staffing fee-based income included in revenue from services				7.2				7.8			(7.6	)			(7.5	)
		Gross profit				22.4				21.2			5.4				3.0
		Gross profit rate				23.0	%			24.5	%		(1.5	)		pts.
Total EMEA
		Revenue from services			$	556.3			$	507.4			9.6	%			7.3	%
		Staffing fee-based income included in revenue from services				17.0				18.1			(6.0	)			(5.2	)
		Gross profit				89.8				86.1			4.3				2.3
		SG&A expenses excluding restructuring charges				84.2				82.1			2.6
		Restructuring charges				0.8				(0.2	)		NM
		Total SG&A expenses				85.0				81.9			3.7				1.4
		Earnings from operations				4.8				4.2			15.0
		Earnings from operations excluding restructuring charges				5.6				4.0			38.6
		Gross profit rate				16.1	%			17.0	%		(0.9	)		pts.
		Expense rates (excluding restructuring charges):
			% of revenue			15.1				16.2			(1.1	)
			% of gross profit			93.7				95.2			(1.5	)
		Return on sales (excluding restructuring charges)				1.0				0.8			0.2

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
					June Year to Date
																Constant
																Currency
					2014				2013				Change			Change
APAC
	Commercial
		Revenue from services			$	169.5			$	169.2			0.2	%		5.3	%
		Staffing fee-based income included in revenue from services				3.9				4.7			(17.9	)		(12.4	)
		Gross profit				24.0				24.1			(0.4	)		4.7
		Gross profit rate				14.2	%			14.2	%		--		pts.
	PT
		Revenue from services			$	18.6			$	20.2			(7.8	)%		(1.7	)%
		Staffing fee-based income included in revenue from services				3.8				4.5			(14.5	)		(9.1	)
		Gross profit				6.1				7.1			(13.8	)		(8.1	)
		Gross profit rate				32.7	%			34.9	%		(2.2	)	pts.
	Total APAC
		Revenue from services			$	188.1			$	189.4			(0.7	)%		4.5	%
		Staffing fee-based income included in revenue from services				7.7				9.2			(16.3	)		(10.8	)
		Gross profit				30.1				31.2			(3.4	)		1.8
		SG&A expenses excluding restructuring charges				29.1				31.0			(5.7	)
		Restructuring charges				1.0				0.2			364.2
		Total SG&A expenses				30.1				31.2			(2.9	)		2.9
		Earnings from operations				--				--			NM
		Earnings from operations excluding restructuring charges				1.0				0.2			335.1
		Gross profit rate				16.0	%			16.4	%		(0.4	)	pts.
		Expense rates (excluding restructuring charges):
			% of revenue			15.5				16.3			(0.8	)
			% of gross profit			97.0				99.3			(2.3	)
		Return on sales (excluding restructuring charges)				0.5				0.1			0.4
OCG
		Revenue from services			$	272.3			$	225.7			20.6	%		21.1	%
		Gross profit				65.5				56.9			15.1			15.3
		SG&A expenses excluding restructuring charges				62.5				53.6			16.6
		Restructuring charges				--				0.8			(100.0	)
		Total SG&A expenses				62.5				54.4			15.0			15.2
		Asset impairments				--				1.7			(100.0	)
		Earnings from operations				3.0				0.8			226.9
		Earnings from operations excluding restructuring charges				3.0				1.6			82.1
		Gross profit rate				24.1	%			25.2	%		(1.1	)	pts.
		Expense rates (excluding restructuring charges):
			% of revenue			22.9				23.7			(0.8	)
			% of gross profit			95.4				94.1			1.3
		Return on sales (excluding restructuring charges)				1.1				0.7			0.4

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)
			June 29, 2014				Dec. 29, 2013				June 30, 2013
Current Assets
	Cash and equivalents		$	62.8			$	125.7			$	70.3
	Trade accounts receivable, less allowances of $9.2, $9.9 and $9.8, respectively			1,132.9				1,023.1				1,038.8
	Prepaid expenses and other current assets			57.6				52.2				60.0
	Deferred taxes			31.5				35.5				39.0
Total current assets				1,284.8				1,236.5				1,208.1
Property and Equipment, Net				91.4				92.0				87.2
Noncurrent Deferred Taxes				130.8				121.7				103.1
Goodwill, Net				90.3				90.3				90.3
Other Assets				295.7				258.1				227.8
Total Assets			$	1,893.0			$	1,798.6			$	1,716.5
Current Liabilities
	Short-term borrowings		$	89.5			$	28.3			$	83.2
	Accounts payable and accrued liabilities			328.4				342.4				289.2
	Accrued payroll and related taxes			300.5				294.9				277.9
	Accrued insurance			25.2				27.6				31.2
	Income and other taxes			74.9				68.8				64.9
Total current liabilities				818.5				762.0				746.4
Noncurrent Liabilities
	Accrued insurance			44.7				46.0				41.4
	Accrued retirement benefits			147.4				134.7				123.2
	Other long-term liabilities			41.9				33.3				28.2
Total noncurrent liabilities				234.0				214.0				192.8
Stockholders' Equity
	Common stock			40.1				40.1				40.1
	Treasury stock			(55.5	)			(56.2	)			(60.6	)
	Paid-in capital			29.0				26.0				28.9
	Earnings invested in the business			752.8				751.3				719.1
	Accumulated other comprehensive income			74.1				61.4				49.8
Total stockholders' equity				840.5				822.6				777.3
Total Liabilities and Stockholders' Equity			$	1,893.0			$	1,798.6			$	1,716.5
STATISTICS:
	Working Capital		$	466.3			$	474.5			$	461.7
	Current Ratio			1.6				1.6				1.6
	Debt-to-capital %			9.6	%			3.3	%			9.7	%
	Global Days Sales Outstanding			57				52				54

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 26 WEEKS ENDED JUNE 29, 2014 AND JUNE 30, 2013
(UNAUDITED)
(In millions of dollars)
				2014				2013
Cash flows from operating activities:
	Net earnings			$	5.3			$	22.9
	Noncash adjustments:
		Impairment of assets			--				1.7
		Depreciation and amortization			10.8				10.5
		Provision for bad debts			2.6				0.5
		Stock-based compensation			3.5				2.6
		Other, net			0.7				0.7
	Changes in operating assets and liabilities				(130.4	)			(53.1	)
		Net cash used in operating activities			(107.5	)			(14.2	)
Cash flows from investing activities:
	Capital expenditures				(8.9	)			(7.7	)
	Investment in equity affiliate				(5.4	)			--
	Other investing activities				0.4				(0.2	)
		Net cash used in investing activities			(13.9	)			(7.9	)
Cash flows from financing activities:
	Net change in short-term borrowings				61.2				19.1
	Dividend payments				(3.8	)			(3.8	)
		Net cash from financing activities			57.4				15.3
Effect of exchange rates on cash and equivalents					1.1				0.8
Net change in cash and equivalents					(62.9	)			(6.0	)
Cash and equivalents at beginning of period					125.7				76.3
Cash and equivalents at end of period				$	62.8			$	70.3

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
			Second Quarter (Commercial, PT and OCG)
									% Change
												Constant
			2014			2013			US$			Currency
Americas
	United States		$	888.3		$	864.3		2.8	%		2.8	%
	Canada			49.6			55.0		(9.8	)		(3.9	)
	Mexico			34.6			35.9		(3.4	)		0.5
	Puerto Rico			27.6			26.1		5.8			5.8
	Brazil			13.7			13.4		1.9			14.4
Total Americas				1,013.8			994.7		1.9			2.6
EMEA
	France			69.3			62.3		11.2			5.9
	Switzerland			66.7			63.6		5.0			(0.9	)
	Russia			32.8			34.6		(5.1	)		4.8
	Portugal			32.5			21.1		53.7			46.5
	United Kingdom			28.4			25.8		10.1			0.5
	Italy			16.6			14.7		12.8			7.5
	Germany			16.5			15.9		4.3			(0.7	)
	Norway			14.4			15.4		(6.2	)		(3.7	)
	Other			18.0			17.3		3.7			(0.4	)
Total EMEA				295.2			270.7		9.1			5.6
APAC
	Singapore			31.1			28.0		11.0			11.2
	Australia			30.0			35.3		(15.0	)		(9.8	)
	Malaysia			16.8			17.2		(2.5	)		2.8
	New Zealand			13.2			12.0		10.1			5.0
	Other			10.4			9.0		15.1			25.9
Total APAC				101.5			101.5		(0.1	)		3.1
Total Kelly Services, Inc.			$	1,410.5		$	1,366.9		3.2	%		3.2	%

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
			June Year to Date (Commercial, PT and OCG)
									% Change
												Constant
			2014			2013			US$			Currency
Americas
	United States		$	1,728.2		$	1,703.8		1.4	%		1.4	%
	Canada			96.3			111.0		(13.3	)		(6.4	)
	Mexico			65.3			66.3		(1.5	)		2.9
	Puerto Rico			52.7			49.2		7.1			7.1
	Brazil			29.6			31.9		(7.2	)		6.1
Total Americas				1,972.1			1,962.2		0.5			1.2
EMEA
	France			132.1			119.6		10.5			5.8
	Switzerland			129.0			117.0		10.3			4.9
	Russia			67.7			69.1		(2.0	)		10.7
	Portugal			59.1			38.9		51.9			45.3
	United Kingdom			56.2			51.6		8.9			0.7
	Germany			33.2			31.9		4.2			(0.2	)
	Italy			31.5			29.8		5.7			1.2
	Norway			28.8			30.2		(4.7	)		0.5
	Other			35.1			34.7		1.0			(2.5	)
Total EMEA				572.7			522.8		9.6			7.2
APAC
	Singapore			61.4			54.1		13.5			15.0
	Australia			56.5			68.0		(17.0	)		(8.1	)
	Malaysia			33.3			33.9		(1.6	)		4.5
	New Zealand			25.5			23.5		8.8			6.1
	Other			19.8			17.2		14.9			28.5
Total APAC				196.5			196.7		(0.1	)		5.3
Total Kelly Services, Inc.			$	2,741.3		$	2,681.7		2.2	%		2.7	%

KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 13 WEEKS ENDED JUNE 29, 2014 AND JUNE 30, 2013
(UNAUDITED)
(In millions of dollars except per share data)
			2014											2013
			As reported			Restructuring Charges (Note 1)				Adjusted Earnings				Adjusted Earnings			% Change
Revenue from services			$	1,410.5		$	--			$	1,410.5			$	1,366.9		3.2	%
Cost of services				1,182.4			--				1,182.4				1,146.2		3.2
Gross profit				228.1			--				228.1				220.7		3.4
SG&A expenses				222.2			(1.8	)			220.4				201.8		9.2
Earnings from operations				5.9			1.8				7.7				18.9		(59.5	)
Other expense, net				0.3			--				0.3				1.6		84.0
Earnings before taxes				5.6			1.8				7.4				17.3		(57.1	)
Inc. tax expense (benefit)				2.8			0.6				3.4				4.8		(28.2	)
Net earnings			$	2.8		$	1.2			$	4.0			$	12.5		(68.2)	%
Earnings per share:
	Basic		$	0.07		$	0.03			$	0.10			$	0.33		(69.7)	%
	Diluted		$	0.07		$	0.03			$	0.10			$	0.33		(69.7)	%
			2013
			As reported			Restructuring Charges (Note 1)				Asset Impairments (Note 2)				Adjusted Earnings
Revenue from services			$	1,366.9		$	--			$	--			$	1,366.9
Cost of services				1,146.2			--				--				1,146.2
Gross profit				220.7			--				--				220.7
SG&A expenses				202.6			(0.8	)			--				201.8
Asset impairments				1.7			--				(1.7	)			--
Earnings from operations				16.4			0.8				1.7				18.9
Other expense, net				1.6			--				--				1.6
Earnings before taxes				14.8			0.8				1.7				17.3
Inc. tax expense (benefit)				4.8			--				--				4.8
Net earnings			$	10.0		$	0.8			$	1.7			$	12.5
Earnings per share:
	Basic		$	0.26		$	0.02			$	0.04			$	0.33
	Diluted		$	0.26		$	0.02			$	0.04			$	0.33
Note: Earnings per share amounts for each quarter are required to be computed independently and may not equal the amounts computed for the total year.

KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 26 WEEKS ENDED JUNE 29, 2014 AND JUNE 30, 2013
(UNAUDITED)
(In millions of dollars except per share data)
			2014												2013
			As reported				Restructuring Charges (Note 1)				Adjusted Earnings				Adjusted Earnings				% Change
Revenue from services			$	2,741.3			$	--			$	2,741.3			$	2,681.7			2.2	%
Cost of services				2,290.9				--				2,290.9				2,244.1			2.1
Gross profit				450.4				--				450.4				437.6			2.9
SG&A expenses				438.2				(1.8	)			436.4				411.6			6.1
Earnings from operations				12.2				1.8				14.0				26.0			(46.5	)
Other expense, net				2.0				--				2.0				2.6			26.2
Earnings before taxes				10.2				1.8				12.0				23.4			(48.8	)
Inc. tax expense (benefit)				4.9				0.6				5.5				(1.9	)		384.4
Net earnings			$	5.3			$	1.2			$	6.5			$	25.3			(74.4)	%
Earnings per share:
	Basic		$	0.14			$	0.03			$	0.17			$	0.66			(74.2)	%
	Diluted		$	0.14			$	0.03			$	0.17			$	0.66			(74.2)	%
			2013
			As reported				Restructuring Charges (Note 1)				Asset Impairments (Note 2)				Adjusted Earnings
Revenue from services			$	2,681.7			$	--			$	--			$	2,681.7
Cost of services				2,244.1				--				--				2,244.1
Gross profit				437.6				--				--				437.6
SG&A expenses				412.4				(0.8	)			--				411.6
Asset impairments				1.7				--				(1.7	)			--
Earnings from operations				23.5				0.8				1.7				26.0
Other expense, net				2.6				--				--				2.6
Earnings before taxes				20.9				0.8				1.7				23.4
Inc. tax expense (benefit)				(2.0	)			0.1				--				(1.9	)
Net earnings			$	22.9			$	0.7			$	1.7			$	25.3
Earnings per share:
	Basic		$	0.60			$	0.02			$	0.04			$	0.66
	Diluted		$	0.60			$	0.02			$	0.04			$	0.66
Note: Earnings per share amounts for each quarter are required to be computed independently and may not equal the amounts computed for the total year.

KELLY SERIVCES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

(UNAUDITED)

Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the restructuring charges and asset impairment charges is useful to understand the Company's fiscal 2014 financial performance and increases comparability. Specifically, Management believes that excluding these items allows for a more meaningful comparison of current period operating performance with the operating results of prior periods. These non-GAAP measures may have limitations as analytical tools because they exclude items which can have a material impact on cash flow and earnings per share. As a result, Management considers these measures, along with reported results, when it reviews and evaluates the Company's financial performance. Management believes that these measures provide greater transparency to investors and provide insight into how Management is evaluating the Company's financial performance. Non-GAAP measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

(1) Restructuring charges in 2014 relate to costs incurred for exiting the staffing business in Sweden and closing branches in Australia. Restructuring charges in 2013 relate to the Company's decision to exit the executive search business operating in Germany, and primarily relate to severance costs from exiting this business.

(2) Asset impairment charges represent the write-off of the carrying value of long-lived assets related to the decision to exit the executive search business operating in Germany.

ANALYST CONTACT:
James Polehna
(248) 244-4586
james_polehna@kellyservices.com

MEDIA CONTACT:
Jane Stehney
(248) 244-5630
jane_stehney@kellyservices.com

Source: Kelly Services

 

 

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