Press Release Details

Financial Highlights

• Q1 revenue up 6.2%; up 3.5% in constant currency
• Q1 operating earnings down 26%, down 36% on an adjusted basis
• Q1 earnings per share of $0.74 compared to $0.31, or $0.32 compared to $0.35 on an adjusted basis
  

TROY, Mich., May 10, 2018 (GLOBE NEWSWIRE) -- Kelly Services (Nasdaq:KELYA) (Nasdaq:KELYB), a global leader in providing workforce solutions, today announced results for the first quarter of 2018.

George S. Corona, President and Chief Executive Officer, announced revenue for the first quarter of 2018 totaled $1.4 billion, a 6.2% increase, or 3.5% in constant currency, compared to the corresponding quarter of 2017.
               
Earnings from operations for the first quarter of 2018 totaled $12.0 million, compared to the $16.4 million reported for the first quarter of 2017.  Included in earnings from operations in the first quarter of 2017 are restructuring charges of $2.4 million.  Excluding the restructuring charges, adjusted 2017 earnings from operations were $18.8 million.

Diluted earnings per share in the first quarter of 2018 were $0.74 compared to $0.31 per share in the first quarter of 2017.  Included in earnings per share in the first quarter of 2018 is the favorable impact of $0.42 due to the after-tax gain on our investment in Persol Holdings common stock.  Effective in 2018, changes in the fair value of our investment in Persol Holdings common stock will be reflected as gains or losses on our Consolidated Statement of Earnings below earnings from operations.  Included in earnings per share in the first quarter of 2017 is the unfavorable impact of $0.04 related to restructuring charges.  The impacts of these adjustments are more fully described in the included reconciliation of non-GAAP measures.

Notwithstanding a tightening labor market across all categories, Corona expressed confidence in Kelly’s direction, stating: “In the first quarter we saw top-line growth, robust growth in fees, and upward momentum in Outcome-Based Services.  As our growth in the first quarter was at a slower pace, we are closely monitoring market dynamics to ensure our expenses are in line with our expected revenue and GP growth.  We will continue to focus on our strengths, make strategic investments in technology to connect with talent and customers like never before and pursue our strategy with urgency.”

Kelly also reported that on May 9, its board of directors declared a dividend of $0.075 per share.  The dividend is payable June 6, 2018 to shareholders of record as of the close of business on May 22, 2018.

In conjunction with its first 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 May 10 to review the results and answer questions.  The call may be accessed in one of the following ways:

Via the Internet:
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 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 PersolKelly Asia Pacific, material changes in demand from or loss of large corporate customers as well as changes in their buying practices, risks particular to doing business with government or government contractors, risks associated with conducting business in foreign countries, including foreign currency fluctuations, risks associated with violations of anti-corruption, trade protection and other laws and regulations, availability of qualified full-time employees, 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 projects, our ability to maintain adequate financial and management processes and controls, risk of potential impairment charges triggered by adverse industry developments or operational circumstances, unexpected changes in claim trends on workers’ compensation, unemployment, disability and medical benefit plans, the impact of changes in laws and regulations (including federal, state and international tax laws), competition law risks, 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 2017 was $5.4 billion.  Visit kellyservices.com and connect with us on Facebook, LinkedIn, and Twitter.

KLYA-FIN

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

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
(UNAUDITED)

Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the 2017 restructuring charges and 2018 gain on investment in Persol Holdings is useful to understand the Company's fiscal 2018 financial performance and increases comparability.  Specifically, Management believes that removing the impact of 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 2017 represent costs related primarily to optimizing our GTS service delivery models to deliver expected cost savings.

(2) Gain on investment in Persol Holdings in 2018 represents the change in fair value of the investment during the period presented.

Source: Kelly Services, Inc.