Press Release Details

 

TROY, MI -- (Marketwired) -- 08/07/13 -- Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a leader in providing workforce solutions, today announced results for the second quarter of 2013.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the second quarter of 2013 totaled $1.4 billion, a 0.1% increase compared to the corresponding quarter of 2012.

Earnings from operations for the second quarter of 2013 totaled $16.4 million, compared to $23.8 million reported for the second quarter of 2012. Included in the results of operations in the second quarter of 2013 are impairment charges of $1.7 million and restructuring charges of $0.8 million. The results of operations in the second quarter of 2012 included a benefit due to changes in the estimated cost of restructuring of $2.2 million. Excluding the impairment and restructuring charges, earnings from operations were $18.9 million in the second quarter of 2013, compared to adjusted earnings of $21.6 million last year.

Diluted earnings per share from continuing operations in the second quarter of 2013 were $0.26 compared to $0.40 per share in the second quarter of 2012. Adjusted earnings per share were $0.33 in the second quarter of 2013 compared to $0.34 in the second quarter of 2012.

"We're pleased with our second quarter performance in each operating segment, given the uneven and generally subpar global economic growth," said Camden. "The Americas delivered solid results that were in line with our expectations, considering both our investment strategy and the lower volume we're experiencing. In EMEA and APAC, we're proud of our efforts in recalibrating our operations to bring costs in line with revenue in a tough environment. In addition, the growth we are seeing in KellyOCG's revenue and fees confirms that our solutions are meeting market demand for outsourced talent management programs, and we believe the investments we're making will support our long-term growth in that segment."

Kelly also reported that on August 6, its board of directors declared a dividend of $0.05 per share. The dividend is payable September 9 to shareholders of record as of the close of business on August 19.

In conjunction with its second quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on August 7, 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:
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, including our ability to successfully expand into new markets and service lines, material changes in demand from or loss of large corporate customers, impairment charges triggered by adverse industry or market developments, unexpected termination of customer contracts, 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, unexpected changes in claim trends on workers' compensation and benefit plans, 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, 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 retain the services of our senior management, local management and field personnel, the impact of changes in laws and regulations (including federal, state and international tax laws), the net financial impact of the Patient Protection and Affordable Care Act on our business, risks associated with conducting business in foreign countries, including foreign currency fluctuations, 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 provides employment to more than 560,000 employees annually. Revenue in 2012 was $5.5 billion. Visit kellyservices.com and connect with us on Facebook, LinkedIn, and Twitter. Download The Talent Project, a free iPad app by Kelly Services.

iPad is a trademark of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED JUNE 30, 2013 AND JULY 1, 2012
(UNAUDITED)
(In millions of dollars except per share data)
			2013				2012				Change				% Change
Revenue from services			$	1,366.9			$	1,366.1			$	0.8			0.1	%
Cost of services				1,146.2				1,142.9				3.3			0.3
Gross profit				220.7				223.2				(2.5	)		(1.1	)
Selling, general and administrative expenses				202.6				199.4				3.2			1.6
Asset impairments				1.7				-				1.7			NM
Earnings from operations				16.4				23.8				(7.4	)		(30.9	)
Other expense, net				1.6				0.5				1.1			234.2
Earnings from continuing operations before taxes				14.8				23.3				(8.5	)		(36.5	)
Income tax expense				4.8				8.3				(3.5	)		(42.4	)
Earnings from continuing operations				10.0				15.0				(5.0	)		(33.2	)
Earnings from discontinued operations, net of tax				-				-				-			NM
Net earnings			$	10.0			$	15.0			$	(5.0	)		(33.2	)%
Basic earnings per share on common stock
	Earnings from continuing operations		$	0.26			$	0.40			$	(0.14	)		(35.0	)%
	Earnings from discontinued operations			-				-				-			NM
	Net earnings			0.26				0.40				(0.14	)		(35.0	)
Diluted earnings per share on common stock
	Earnings from continuing operations		$	0.26			$	0.40			$	(0.14	)		(35.0	)%
	Earnings from discontinued operations			-				-				-			NM
	Net earnings			0.26				0.40				(0.14	)		(35.0	)
STATISTICS:
Gross profit rate				16.1	%			16.3	%			(0.2	) pts.
Selling, general and administrative expenses:
	% of revenue			14.8				14.6				0.2
	% of gross profit			91.8				89.4				2.4
% Return:
	Earnings from operations			1.2				1.7				(0.5	)
	Earnings from continuing operations before taxes			1.1				1.7				(0.6	)
	Earnings from continuing operations			0.7				1.1				(0.4	)
	Net earnings			0.7				1.1				(0.4	)
Effective income tax rate				32.2	%			35.5	%			(3.3	) pts.
Average number of shares outstanding (millions):
	Basic			37.2				37.0
	Diluted			37.2				37.0
Shares adjusted for nonvested restricted awards (millions):
	Basic			38.2				37.8
	Diluted			38.2				37.8

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 26 WEEKS ENDED JUNE 30, 2013 AND JULY 1, 2012
(UNAUDITED)
(In millions of dollars except per share data)
			2013				2012				Change				% Change
Revenue from services			$	2,681.7			$	2,720.9			$	(39.2	)		(1.4	)%
Cost of services				2,244.1				2,274.0				(29.9	)		(1.3	)
Gross profit				437.6				446.9				(9.3	)		(2.1	)
Selling, general and administrative expenses				412.4				408.4				4.0			1.0
Asset impairments				1.7				-				1.7			NM
Earnings from operations				23.5				38.5				(15.0	)		(38.9	)
Other expense, net				2.6				1.1				1.5			137.7
Earnings from continuing operations before taxes				20.9				37.4				(16.5	)		(44.0	)
Income tax (benefit) expense				(2.0	)			13.2				(15.2	)		(115.4	)
Earnings from continuing operations				22.9				24.2				(1.3	)		(5.3	)
Earnings from discontinued operations, net of tax				-				0.4				(0.4	)		(99.8	)
Net earnings			$	22.9			$	24.6			$	(1.7	)		(7.0	)%
Basic earnings per share on common stock
	Earnings from continuing operations		$	0.60			$	0.64			$	(0.04	)		(6.3	)%
	Earnings from discontinued operations			-				0.01				(0.01	)		(100.0	)
	Net earnings			0.60				0.65				(0.05	)		(7.7	)
Diluted earnings per share on common stock
	Earnings from continuing operations		$	0.60			$	0.64			$	(0.04	)		(6.3	)%
	Earnings from discontinued operations			-				0.01				(0.01	)		(100.0	)
	Net earnings			0.60				0.65				(0.05	)		(7.7	)
STATISTICS:
Gross profit rate				16.3	%			16.4	%			(0.1	) pts.
Selling, general and administrative expenses:
	% of revenue			15.4				15.0				0.4
	% of gross profit			94.3				91.4				2.9
% Return:
	Earnings from operations			0.9				1.4				(0.5	)
	Earnings from continuing operations before taxes			0.8				1.4				(0.6	)
	Earnings from continuing operations			0.9				0.9				0.0
	Net earnings			0.9				0.9				0.0
Effective income tax rate				(9.7	)%			35.2	%			(44.9	) pts.
Average number of shares outstanding (millions):
	Basic			37.2				36.9
	Diluted			37.2				37.0
Shares adjusted for nonvested restricted awards (millions):
	Basic			38.2				37.8
	Diluted			38.2				37.8

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
					Second Quarter
																Constant
																Currency
					2013				2012				Change			Change
AMERICAS
	Commercial
		Revenue from services (including fee-based income)			$	648.8			$	668.6			(3.0	)%		(3.1	)%
		Fee-based income				4.0				4.2			(4.9	)		(4.5	)
		Gross profit				94.2				97.7			(3.6	)		(3.7	)
		Gross profit rate				14.5	%			14.6	%		(0.1	) pts.
	PT
		Revenue from services (including fee-based income)			$	259.6			$	262.4			(1.1	)%		(1.2	)%
		Fee-based income				4.1				4.2			(3.5	)		(3.4	)
		Gross profit				41.1				39.7			3.5			3.4
		Gross profit rate				15.8	%			15.1	%		0.7	pts.
	Total Americas
		Revenue from services (including fee-based income)			$	908.4			$	931.0			(2.4	)%		(2.6	)%
		Fee-based income				8.1				8.4			(4.2	)		(4.0	)
		Gross profit				135.3				137.4			(1.6	)		(1.6	)
		Total SG&A expenses				103.8				99.0			4.8			4.8
		Earnings from operations				31.5				38.4			(18.0	)
		Gross profit rate				14.9	%			14.8	%		0.1	pts.
		Expense rates:
			% of revenue			11.4				10.6			0.8
			% of gross profit			76.7				72.0			4.7
		Operating margin				3.5				4.1			(0.6	)
EMEA
	Commercial
		Revenue from services (including fee-based income)			$	219.8			$	213.7			2.8	%		2.5	%
		Fee-based income				5.2				6.2			(16.9	)		(16.6	)
		Gross profit				33.8				34.2			(1.0	)		(1.8	)
		Gross profit rate				15.4	%			16.0	%		(0.6	) pts.
	PT
		Revenue from services (including fee-based income)			$	43.1			$	41.6			3.6	%		3.2	%
		Fee-based income				3.9				4.4			(12.0	)		(11.7	)
		Gross profit				10.5				10.9			(3.3	)		(3.6	)
		Gross profit rate				24.4	%			26.1	%		(1.7	) pts.
	Total EMEA
		Revenue from services (including fee-based income)			$	262.9			$	255.3			3.0	%		2.6	%
		Fee-based income				9.1				10.6			(14.9	)		(14.6	)
		Gross profit				44.3				45.1			(1.6	)		(2.2	)
		SG&A expenses excluding restructuring charges				39.9				41.9			(4.7	)
		Restructuring charges				-				(2.2	)		101.8
		Total SG&A expenses				39.9				39.7			0.5			-
		Earnings from operations				4.4				5.4			(17.3	)
		Earnings from operations excluding restructuring charges				4.4				3.2			40.5
		Gross profit rate				16.9	%			17.6	%		(0.7	) pts.
		Expense rates (excluding restructuring charges):
			% of revenue			15.2				16.4			(1.2	)
			% of gross profit			90.1				93.0			(2.9	)
		Operating margin (excluding restructuring charges)				1.7				1.2			0.5

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
					Second Quarter
																Constant
																Currency
					2013				2012				Change			Change
APAC
	Commercial
		Revenue from services (including fee-based income)			$	87.7			$	84.3			4.0	%		3.7	%
		Fee-based income				2.9				3.0			(7.8	)		(7.2	)
		Gross profit				12.5				12.5			-			(0.2	)
		Gross profit rate				14.3	%			14.9	%		(0.6	) pts.
	PT
		Revenue from services (including fee-based income)			$	10.0			$	12.8			(21.5	)%		(21.0	)%
		Fee-based income				2.5				4.1			(40.0	)		(39.7	)
		Gross profit				3.8				5.3			(29.6	)		(29.1	)
		Gross profit rate				37.4	%			41.7	%		(4.3	) pts.
	Total APAC
		Revenue from services (including fee-based income)			$	97.7			$	97.1			0.7	%		0.5	%
		Fee-based income				5.4				7.1			(26.2	)		(25.7	)
		Gross profit				16.3				17.8			(8.8	)		(8.8	)
		Total SG&A expenses				15.4				19.0			(19.0	)		(18.9	)
		Earnings from operations				0.9				(1.2	)		NM
		Gross profit rate				16.6	%			18.4	%		(1.8	) pts.
		Expense rates:
			% of revenue			15.8				19.6			(3.8	)
			% of gross profit			94.7				106.6			(11.9	)
		Operating margin				0.9				(1.2	)		2.1
OCG
		Revenue from services (including fee-based income)			$	109.9			$	91.4			20.2	%		20.3	%
		Fee-based income				15.7				12.8			23.1			23.3
		Gross profit				25.6				23.7			8.4			8.5
		Total SG&A excluding restructuring charges				25.6				22.8			12.4
		Restructuring charges				0.8				-			NM
		Total SG&A expenses				26.4				22.8			15.6			15.6
		Asset impairments				1.7				-			NM
		Earnings from operations				(2.5	)			0.9			NM
		Earnings from operations excluding restructuring charges				(1.7	)			0.9			NM
		Gross profit rate				23.3	%			25.9	%		(2.6	) pts.
		Expense rates (excluding restructuring charges):
			% of revenue			23.3				25.0			(1.7	)
			% of gross profit			100.1				96.5			3.6
		Operating margin (excluding restructuring charges)				(1.5	)			0.9			(2.4	)

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
					June Year to Date
																Constant
																Currency
					2013				2012				Change			Change
AMERICAS
	Commercial
		Revenue from services (including fee-based income)			$	1,287.1			$	1,337.9			(3.8	)%		(3.7	)%
		Fee-based income				7.9				7.7			3.3			4.1
		Gross profit				187.7				195.7			(4.1	)		(3.9	)
		Gross profit rate				14.6	%			14.6	%		-	pts.
	PT
		Revenue from services (including fee-based income)			$	510.6			$	512.5			(0.4	)%		(0.5	)%
		Fee-based income				8.0				7.6			4.1			4.1
		Gross profit				81.5				79.9			1.9			1.9
		Gross profit rate				16.0	%			15.6	%		0.4	pts.
	Total Americas
		Revenue from services (including fee-based income)			$	1,797.7			$	1,850.4			(2.9	)%		(2.8	)%
		Fee-based income				15.9				15.3			3.7			4.1
		Gross profit				269.2				275.6			(2.3	)		(2.2	)
		Total SG&A expenses				213.0				201.9			5.5			5.6
		Earnings from operations				56.2				73.7			(23.7	)
		Gross profit rate				15.0	%			14.9	%		0.1	pts.
		Expense rates:
			% of revenue			11.8				10.9			0.9
			% of gross profit			79.1				73.3			5.8
		Operating margin				3.1				4.0			(0.9	)
EMEA
	Commercial
		Revenue from services (including fee-based income)			$	420.8			$	426.7			(1.4	)%		(1.5	)%
		Fee-based income				10.7				12.3			(13.4	)		(13.2	)
		Gross profit				64.9				67.7			(4.1	)		(4.4	)
		Gross profit rate				15.4	%			15.9	%		(0.5	) pts.
	PT
		Revenue from services (including fee-based income)			$	86.6			$	83.8			3.3	%		3.1	%
		Fee-based income				7.9				9.0			(12.6	)		(12.4	)
		Gross profit				21.2				22.2			(4.4	)		(4.5	)
		Gross profit rate				24.5	%			26.4	%		(1.9	) pts.
	Total EMEA
		Revenue from services (including fee-based income)			$	507.4			$	510.5			(0.6	)%		(0.7	)%
		Fee-based income				18.6				21.3			(13.1	)		(12.9	)
		Gross profit				86.1				89.9			(4.2	)		(4.4	)
		SG&A expenses excluding restructuring charges				82.1				86.4			(5.0	)
		Restructuring charges				(0.2	)			(2.2	)		93.8
		Total SG&A expenses				81.9				84.2			(2.7	)		(2.9	)
		Earnings from operations				4.2				5.7			(25.7	)
		Earnings from operations excluding restructuring charges				4.0				3.5			16.0
		Gross profit rate				17.0	%			17.6	%		(0.6	) pts.
		Expense rates (excluding restructuring charges):
			% of revenue			16.2				16.9			(0.7	)
			% of gross profit			95.2				96.1			(0.9	)
		Operating margin (excluding restructuring charges)				0.8				0.7			0.1

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
					June Year to Date
																Constant
																Currency
					2013				2012				Change			Change
APAC
	Commercial
		Revenue from services (including fee-based income)			$	169.2			$	172.6			(2.0	)%		(2.0	)%
		Fee-based income				5.6				6.4			(13.4	)		(12.5	)
		Gross profit				24.1				25.6			(5.9	)		(5.7	)
		Gross profit rate				14.2	%			14.8	%		(0.6	) pts.
	PT
		Revenue from services (including fee-based income)			$	20.2			$	25.6			(21.2	)%		(20.5	)%
		Fee-based income				4.5				8.1			(45.4	)		(45.0	)
		Gross profit				7.1				10.5			(33.1	)		(32.5	)
		Gross profit rate				34.9	%			41.1	%		(6.2	) pts.
	Total APAC
		Revenue from services (including fee-based income)			$	189.4			$	198.2			(4.5	)%		(4.3)	)%
		Fee-based income				10.1				14.5			(31.2	)		(30.6	)
		Gross profit				31.2				36.1			(13.8	)		(13.5	)
		SG&A expenses excluding restructuring charges				31.0				38.7			(20.0	)
		Restructuring charges				0.2				-			NM
		Total SG&A expenses				31.2				38.7			(19.4	)		(19.1	)
		Earnings from operations				-				(2.6	)		98.9
		Earnings from operations excluding restructuring charges				0.2				(2.6	)		NM
		Gross profit rate				16.4	%			18.2	%		(1.8	) pts.
		Expense rates (excluding restructuring charges):
			% of revenue			16.3				19.5			(3.2	)
			% of gross profit			99.3				107.1			(7.8	)
		Operating margin (excluding restructuring charges)				0.1				(1.3	)		1.4
OCG
		Revenue from services (including fee-based income)			$	208.9			$	178.1			17.3	%		17.4	%
		Fee-based income				30.3				24.4			24.4			24.7
		Gross profit				52.7				46.8			12.6			12.8
		SG&A expenses excluding restructuring charges				51.0				45.4			12.3
		Restructuring charges				0.8				-			NM
		Total SG&A expenses				51.8				45.4			13.9			14.0
		Asset impairments				1.7				-			NM
		Earnings from operations				(0.8	)			1.4			NM
		Earnings from operations excluding restructuring charges				-				1.4			NM
		Gross profit rate				25.2	%			26.3	%		(1.1	) pts.
		Expense rates (excluding restructuring charges):
			% of revenue			24.4				25.5			(1.1	)
			% of gross profit			96.8				97.1			(0.3	)
		Operating margin (excluding restructuring charges)				-				0.7			(0.7	)

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)
					June 30, 2013				Dec. 30, 2012				July 1, 2012
Current Assets
	Cash and equivalents				$	70.3			$	76.3			$	65.2
	Trade accounts receivable, less allowances of $9.8 and $10.4 and $11.8, respectively					1,038.8				1,013.9				985.0
	Prepaid expenses and other current assets					60.0				57.5				57.9
	Deferred taxes					39.0				44.9				33.4
			Total current assets			1,208.1				1,192.6				1,141.5
Property and Equipment, Net						87.2				89.9				90.3
Noncurrent Deferred Taxes						103.1				82.8				93.4
Goodwill, Net						90.3				89.5				91.4
Other Assets						227.8				180.9				168.4
Total Assets					$	1,716.5			$	1,635.7			$	1,585.0
Current Liabilities
	Short-term borrowings				$	83.2			$	64.1			$	88.5
	Accounts payable and accrued liabilities					289.2				295.6				269.5
	Accrued payroll and related taxes					277.9				264.5				253.7
	Accrued insurance					31.2				32.8				30.3
	Income and other taxes					64.9				65.3				56.5
			Total current liabilities			746.4				722.3				698.5
Noncurrent Liabilities
	Accrued insurance					41.4				43.5				51.4
	Accrued retirement benefits					123.2				111.0				102.8
	Other long-term liabilities					28.2				17.9				24.0
			Total noncurrent liabilities			192.8				172.4				178.2
Stockholders' Equity
	Common stock					40.1				40.1				40.1
	Treasury stock					(60.6	)			(61.6	)			(63.2	)
	Paid-in capital					28.9				27.1				27.4
	Earnings invested in the business					719.1				700.0				678.3
	Accumulated other comprehensive income					49.8				35.4				25.7
			Total stockholders' equity			777.3				741.0				708.3
Total Liabilities and Stockholders' Equity					$	1,716.5			$	1,635.7			$	1,585.0
STATISTICS:
	Working Capital				$	461.7			$	470.3			$	443.0
	Current Ratio					1.6				1.7				1.6
	Debt-to-capital %					9.7	%			8.0	%			11.1	%
	Global Days Sales Outstanding					54				53				53

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 26 WEEKS ENDED JUNE 30, 2013 AND JULY 1, 2012
(UNAUDITED)
(In millions of dollars)
					2013				2012
Cash flows from operating activities
	Net earnings				$	22.9			$	24.6
	Noncash adjustments:
		Impairment of assets				1.7				-
		Depreciation and amortization				10.5				11.6
		Provision for bad debts				0.5				0.6
		Stock-based compensation				2.6				2.1
		Other, net				0.7				-
	Changes in operating assets and liabilities					(53.1	)			(33.0	)
			Net cash (used in) from operating activities			(14.2	)			5.9
Cash flows from investing activities
	Capital expenditures					(7.7	)			(9.8	)
	Other investing activities					(0.2	)			-
			Net cash used in investing activities			(7.9	)			(9.8	)
Cash flows from financing activities
	Net change in short-term borrowings					19.1				(7.8	)
	Dividend payments					(3.8	)			(3.8	)
			Net cash from (used in) financing activities			15.3				(11.6	)
Effect of exchange rates on cash and equivalents						0.8				(0.3	)
Net change in cash and equivalents						(6.0	)			(15.8	)
Cash and equivalents at beginning of period						76.3				81.0
Cash and equivalents at end of period					$	70.3			$	65.2

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
			Second Quarter (Commercial, PT and OCG)
									% Change
												Constant
			2013			2012			US$			Currency
Americas
	United States		$	864.3		$	874.4		(1.2	)%		(1.2	)%
	Canada			55.0			62.0		(11.3	)		(10.1	)
	Mexico			35.9			25.8		38.9			27.9
	Puerto Rico			26.1			25.9		0.5			0.5
	Brazil			13.4			14.4		(7.0	)		(0.9	)
Total Americas				994.7			1,002.5		(0.8	)		(0.9	)
EMEA
	France			62.3			61.1		2.0			0.1
	Switzerland			63.6			59.8		6.3			6.8
	Russia			34.6			31.8		9.1			11.2
	United Kingdom			25.8			26.0		(1.0	)		2.0
	Portugal			21.1			19.0		11.2			9.0
	Germany			15.9			17.4		(8.9	)		(10.7	)
	Norway			15.4			16.7		(8.1	)		(9.2	)
	Italy			14.7			15.1		(2.4	)		(4.4	)
	Other			17.3			15.6		11.4			9.2
Total EMEA				270.7			262.5		3.1			2.8
APAC
	Australia			35.3			32.3		9.1			11.2
	Singapore			28.0			24.9		12.4			11.1
	Malaysia			17.2			18.0		(4.2	)		(5.6	)
	New Zealand			12.0			13.4		(10.2	)		(13.6	)
	Other			9.0			12.5		(27.7	)		(25.5	)
Total APAC				101.5			101.1		0.4			0.3
Total Kelly Services, Inc.			$	1,366.9		$	1,366.1		0.1	%		(0.1	)%

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
			June Year to Date (Commercial, PT and OCG)
									% Change
												Constant
			2013			2012			US$			Currency
Americas
	United States		$	1,703.8		$	1,732.9		(1.7	)%		(1.7	)%
	Canada			111.0			121.5		(8.6	)		(7.7	)
	Mexico			66.3			51.3		29.3			22.4
	Puerto Rico			49.2			51.8		(5.1	)		(5.1	)
	Brazil			31.9			32.4		(1.8	)		8.7
Total Americas				1,962.2			1,989.9		(1.4	)		(1.3	)
EMEA
	France			119.6			123.9		(3.5	)		(4.7	)
	Switzerland			117.0			113.4		3.2			4.0
	Russia			69.1			65.4		5.7			7.4
	United Kingdom			51.6			53.7		(3.9	)		(1.9	)
	Portugal			38.9			37.2		4.5			3.2
	Germany			31.9			36.1		(11.8	)		(12.9	)
	Norway			30.2			33.2		(9.0	)		(10.7	)
	Italy			29.8			31.4		(4.9	)		(6.1	)
	Other			34.7			31.2		11.3			9.7
Total EMEA				522.8			525.5		(0.5	)		(0.6	)
APAC
	Australia			68.0			66.2		2.8			4.6
	Singapore			54.1			49.1		10.3			8.5
	Malaysia			33.9			35.8		(5.3	)		(5.7	)
	New Zealand			23.5			26.5		(11.4	)		(14.0	)
	Other			17.2			27.9		(38.3	)		(35.6	)
Total APAC				196.7			205.5		(4.3	)		(4.1	)
Total Kelly Services, Inc.			$	2,681.7		$	2,720.9		(1.4	)%		(1.4	)%

KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 13 WEEKS ENDED JUNE 30, 2013 AND JULY 1, 2012
(UNAUDITED)
(In millions of dollars except per share data)
			2013														2012
			As reported			Restructuring Charges (Note 1)				Asset Impairments (Note 2)				Adjusted Earnings			Adjusted Earnings			% Change
Revenue from services			$	1,366.9		$	-			$	-			$	1,366.9		$	1,366.1		0.1	%
Cost of services				1,146.2			-				-				1,146.2			1,142.9		0.3
Gross profit				220.7			-				-				220.7			223.2		(1.1	)
Selling, general and administrative expenses				202.6			(0.8	)			-				201.8			201.6		0.1
Asset impairments				1.7			-				(1.7	)			-			-		NM
Earnings from operations				16.4			0.8				1.7				18.9			21.6		(12.5	)
Other expense, net				1.6			-				-				1.6			0.5		(234.2	)
Earnings from continuing operations before taxes				14.8			0.8				1.7				17.3			21.1		(18.3	)
Income tax expense (benefit)				4.8			-				-				4.8			8.3		(42.4	)
Earnings from continuing operations			$	10.0		$	0.8			$	1.7			$	12.5		$	12.8		(5.8	)%
Earnings per share from continuing operations:
	Basic		$	0.26		$	0.02			$	0.04			$	0.33		$	0.34		(2.9	)%
	Diluted		$	0.26		$	0.02			$	0.04			$	0.33		$	0.34		(2.9	)%
			2012
			As reported			Restructuring Charges (Note 1)				Adjusted Earnings
Revenue from services			$	1,366.1		$	-			$	1,366.1
Cost of services				1,142.9			-				1,142.9
Gross profit				223.2			-				223.2
Selling, general and administrative expenses				199.4			2.2				201.6
Earnings from operations				23.8			(2.2	)			21.6
Other expense, net				0.5			-				0.5
Earnings from continuing operations before taxes				23.3			(2.2	)			21.1
Income tax expense (benefit)				8.3			-				8.3
Earnings from continuing operations			$	15.0		$	(2.2	)		$	12.8
Earnings per share from continuing operations:
	Basic		$	0.40		$	(0.06	)		$	0.34
	Diluted		$	0.40		$	(0.06	)		$	0.34
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 30, 2013 AND JULY 1, 2012
(UNAUDITED)
(In millions of dollars except per share data)
			2013																2012
			As reported				Restructuring Charges (Note 1)				Asset Impairments (Note 2)				Adjusted Earnings				Adjusted Earnings			% Change
Revenue from services			$	2,681.7			$	-			$	-			$	2,681.7			$	2,720.9		(1.4)	%
Cost of services				2,244.1				-				-				2,244.1				2,274.0		(1.3	)
Gross profit				437.6				-				-				437.6				446.9		(2.1	)
Selling, general and administrative expenses				412.4				(0.8	)			-				411.6				410.6		0.2
Asset impairments				1.7				-				(1.7	)			-				-		NM
Earnings from operations				23.5				0.8				1.7				26.0				36.3		(28.4	)
Other expense, net				2.6				-				-				2.6				1.1		(137.7	)
Earnings from continuing operations before taxes				20.9				0.8				1.7				23.4				35.2		(33.5	)
Income tax expense (benefit)				(2.0	)			-				-				(2.0	)			13.2		(115.4	)
Earnings from continuing operations			$	22.9			$	0.8			$	1.7			$	25.4			$	22.0		13.1	%
Earnings per share from continuing operations:
	Basic		$	0.60			$	0.02			$	0.04			$	0.67			$	0.58		15.5	%
	Diluted		$	0.60			$	0.02			$	0.04			$	0.67			$	0.58		15.5	%
			2012
			As reported				Restructuring Charges (Note 1)				Adjusted Earnings
Revenue from services			$	2,720.9			$	-			$	2,720.9
Cost of services				2,274.0				-				2,274.0
Gross profit				446.9				-				446.9
Selling, general and administrative expenses				408.4				2.2				410.6
Asset impairments				-				-				-
Earnings from operations				38.5				(2.2	)			36.3
Other expense, net				1.1				-				1.1
Earnings from continuing operations before taxes				37.4				(2.2	)			35.2
Income tax expense (benefit)				13.2				-				13.2
Earnings from continuing operations			$	24.2			$	(2.2	)		$	22.0
Earnings per share from continuing operations:
	Basic		$	0.64			$	(0.06	)		$	0.58
	Diluted		$	0.64			$	(0.06	)		$	0.58
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 restructuring charges and asset impairment charges is useful to understand the Company's fiscal 2013 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)		During the second quarter of 2013, the Company made the decision to exit the executive search business operating in Germany. The restructuring charges primarily relate to severance costs from exiting this business. In the second quarter of 2012, restructuring costs relate primarily to revisions of the estimated lease termination costs for EMEA Commercial branches that closed in prior years.
(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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