Press Release Details

 

TROY, MI -- (Marketwired) -- 11/06/13 -- Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a leader in providing workforce solutions, today announced results for the third quarter of 2013.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the third quarter of 2013 totaled $1.3 billion, a 0.6% decrease compared to the corresponding quarter of 2012.

Earnings from operations for the third quarter of 2013 totaled $20.2 million. Included in the results of operations in the third quarter of 2013 are restructuring charges of $0.5 million. Excluding the restructuring charges, earnings from operations were $20.7 million in the third quarter of 2013, compared to earnings of $24.0 million last year.

Diluted earnings per share from continuing operations in the third quarter of 2013 were $0.49. Adjusted earnings per share were $0.51 in the third quarter of 2013 compared to $0.43 in the third quarter of 2012.

"We're pleased that our third quarter performance surpassed our expectations despite an erratic and lackluster economy," said Camden. "The Americas delivered a nice turnaround in fee performance and KellyOCG brought in strong revenue growth and outsized operating profits. Overall, our results continue to demonstrate that Kelly's strategy is responding to market demands for more holistic workforce solutions, access to skilled talent, and workforce models that help companies achieve their short- and long-term business goals."

Kelly also reported that on November 5, its board of directors declared a dividend of $0.05 per share. The dividend is payable December 6 to shareholders of record as of the close of business on November 18.

In conjunction with its third quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on November 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:
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, & 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 SEPTEMBER 29, 2013 AND SEPTEMBER 30, 2012
(UNAUDITED)
(In millions of dollars except per share data)
			2013				2012				Change				% Change
Revenue from services			$	1,345.6			$	1,354.2			$	(8.6	)		(0.6	)%
Cost of services				1,125.2				1,126.7				(1.5	)		(0.1	)
Gross profit				220.4				227.5				(7.1	)		(3.1	)
Selling, general and administrative expenses				200.2				203.5				(3.3	)		(1.6	)
Earnings from operations				20.2				24.0				(3.8	)		(15.8	)
Other expense, net				1.3				0.7				0.6			88.9
Earnings from continuing operations before taxes				18.9				23.3				(4.4	)		(19.0	)
Income tax expense				0.1				6.7				(6.6	)		(99.2	)
Earnings from continuing operations				18.8				16.6				2.2			13.6
Earnings from discontinued operations, net of tax				-				-				-			NM
Net earnings			$	18.8			$	16.6			$	2.2			13.5	%
Basic earnings per share on common stock
	Earnings from continuing operations		$	0.49			$	0.43			$	0.06			14.0	%
	Earnings from discontinued operations			-				-				-			NM
	Net earnings			0.49				0.43				0.06			14.0
Diluted earnings per share on common stock
	Earnings from continuing operations		$	0.49			$	0.43			$	0.06			14.0	%
	Earnings from discontinued operations			-				-				-			NM
	Net earnings			0.49				0.43				0.06			14.0

STATISTICS:
Gross profit rate				16.4	%			16.8	%			(0.4	)pts.
Selling, general and administrative expenses:
	% of revenue			14.9				15.0				(0.1	)
	% of gross profit			90.8				89.4				1.4
% Return:
	Earnings from operations			1.5				1.8				(0.3	)
	Earnings from continuing operations before taxes			1.4				1.7				(0.3	)
	Earnings from continuing operations			1.4				1.2				0.2
	Net earnings			1.4				1.2				0.2
Effective income tax rate				0.3	%			28.9	%			(28.6	)pts.
Average number of shares outstanding (millions):
	Basic			37.4				37.1
	Diluted			37.4				37.1
Shares adjusted for nonvested restricted awards (millions):
	Basic			38.1				38.3
	Diluted			38.1				38.3

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 39 WEEKS ENDED SEPTEMBER 29, 2013 AND SEPTEMBER 30, 2012
(UNAUDITED)
(In millions of dollars except per share data)
			2013				2012				Change				% Change
Revenue from services			$	4,027.3			$	4,075.1			$	(47.8	)		(1.2	)%
Cost of services				3,369.3				3,400.7				(31.4	)		(0.9	)
Gross profit				658.0				674.4				(16.4	)		(2.4	)
Selling, general and administrative expenses				612.6				611.9				0.7			0.1
Asset impairments				1.7				-				1.7			NM
Earnings from operations				43.7				62.5				(18.8	)		(30.0	)
Other expense, net				3.9				1.8				2.1			118.3
Earnings from continuing operations before taxes				39.8				60.7				(20.9	)		(34.4	)
Income tax (benefit) expense				(1.9	)			19.9				(21.8	)		(109.9	)
Earnings from continuing operations				41.7				40.8				0.9			2.4
Earnings from discontinued operations, net of tax				-				0.4				(0.4	)		(99.8	)
Net earnings			$	41.7			$	41.2			$	0.5			1.3	%
Basic earnings per share on common stock
	Earnings from continuing operations		$	1.09			$	1.07			$	0.02			1.9	%
	Earnings from discontinued operations			-				0.01				(0.01	)		(100.0	)
	Net earnings			1.09				1.09				-			-
Diluted earnings per share on common stock
	Earnings from continuing operations		$	1.09			$	1.07			$	0.02			1.9	%
	Earnings from discontinued operations			-				0.01				(0.01	)		(100.0	)
	Net earnings			1.09				1.09				-			-

STATISTICS:
Gross profit rate				16.3	%			16.5	%			(0.2	)pts.
Selling, general and administrative expenses:
	% of revenue			15.2				15.0				0.2
	% of gross profit			93.1				90.7				2.4
% Return:
	Earnings from operations			1.1				1.5				(0.4	)
	Earnings from continuing operations before taxes			1.0				1.5				(0.5	)
	Earnings from continuing operations			1.0				1.0				0.0
	Net earnings			1.0				1.0				0.0
Effective income tax rate				(5.0	)%			32.8	%			(37.8	)pts.
Average number of shares outstanding (millions):
	Basic			37.2				37.0
	Diluted			37.3				37.0
Shares adjusted for nonvested restricted awards (millions):
	Basic			38.2				38.0
	Diluted			38.2				38.0

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
					Third Quarter
																Constant
																Currency
					2013				2012				Change			Change
AMERICAS
	Commercial
		Revenue from services (including fee-based income)			$	617.0			$	642.2			(3.9	)%		(3.5	)%
		Fee-based income				4.1				4.4			(6.6	)		(5.2	)
		Gross profit				86.8				96.4			(10.1	)		(9.6	)
		Gross profit rate				14.1	%			15.0	%		(0.9	)pts.
	PT
		Revenue from services (including fee-based income)			$	248.3			$	261.6			(5.1	)%		(5.0	)%
		Fee-based income				4.3				3.7			17.2			17.5
		Gross profit				40.9				40.9			0.2			0.3
		Gross profit rate				16.5	%			15.6	%		0.9	pts.
	Total Americas
		Revenue from services (including fee-based income)			$	865.3			$	903.8			(4.3	)%		(3.9	)%
		Fee-based income				8.4				8.1			4.3			5.2
		Gross profit				127.7				137.3			(7.0	)		(6.7	)
		Total SG&A expenses				101.5				101.5			-			0.4
		Earnings from operations				26.2				35.8			(26.8	)
		Gross profit rate				14.8	%			15.2	%		(0.4	)pts.
		Expense rates:
			% of revenue			11.7				11.2			0.5
			% of gross profit			79.5				73.9			5.6
		Operating margin				3.0				4.0			(1.0	)
EMEA
	Commercial
		Revenue from services (including fee-based income)			$	224.5			$	214.5			4.7	%		1.8	%
		Fee-based income				4.8				5.2			(7.5	)		(8.0	)
		Gross profit				33.9				33.4			1.6			(1.1	)
		Gross profit rate				15.1	%			15.6	%		(0.5	)pts.
	PT
		Revenue from services (including fee-based income)			$	45.1			$	41.5			8.7	%		5.1	%
		Fee-based income				3.9				4.1			(3.6	)		(4.8	)
		Gross profit				10.8				10.5			2.5			(0.3	)
		Gross profit rate				23.9	%			25.4	%		(1.5	)pts.
	Total EMEA
		Revenue from services (including fee-based income)			$	269.6			$	256.0			5.3	%		2.3	%
		Fee-based income				8.7				9.3			(5.8	)		(6.6	)
		Gross profit				44.7				43.9			1.8			(0.9	)
		SG&A expenses excluding restructuring charges				40.0				40.0			-
		Restructuring charges				0.3				-			NM
		Total SG&A expenses				40.3				40.0			0.9			(2.1	)
		Earnings from operations				4.4				3.9			11.5
		Earnings from operations excluding restructuring charges				4.7				3.9			19.7
		Gross profit rate				16.6	%			17.1	%		(0.5	)pts.
		Expense rates (excluding restructuring charges):
			% of revenue			14.8				15.6			(0.8	)
			% of gross profit			89.5				91.1			(1.6	)
		Operating margin (excluding restructuring charges)				1.7				1.5			0.2

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
					Third Quarter
																Constant
																Currency
					2013				2012				Change			Change
APAC
	Commercial
		Revenue from services (including fee-based income)			$	87.6			$	85.7			2.2	%		8.6	%
		Fee-based income				2.6				2.9			(8.7	)		(1.2	)
		Gross profit				12.7				12.8			(0.6	)		6.1
		Gross profit rate				14.5	%			14.9	%		(0.4	)pts.
	PT
		Revenue from services (including fee-based income)			$	9.1			$	14.3			(36.1)	%		(30.6	)%
		Fee-based income				2.2				4.8			(54.0	)		(50.8	)
		Gross profit				3.4				6.2			(44.3	)		(40.0	)
		Gross profit rate				37.5	%			43.0	%		(5.5	)pts.
	Total APAC
		Revenue from services (including fee-based income)			$	96.7			$	100.0			(3.3	)%		3.0	%
		Fee-based income				4.8				7.7			(37.1	)		(32.3	)
		Gross profit				16.1				19.0			(14.8	)		(8.9	)
		SG&A expenses excluding restructuring charges				14.5				18.8			(22.6	)
		Restructuring charges				0.1				-			NM
		Total SG&A expenses				14.6				18.8			(22.3	)		(16.6	)
		Earnings from operations				1.5				0.2			NM
		Earnings from operations excluding restructuring charges				1.6				0.2			NM
		Gross profit rate				16.7	%			18.9	%		(2.2	)pts.
		Expense rates (excluding restructuring charges):
			% of revenue			15.1				18.8			(3.7	)
			% of gross profit			90.2				99.3			(9.1	)
		Operating margin (excluding restructuring charges)				1.6				0.1			1.5
	OCG
		Revenue from services (including fee-based income)			$	126.9			$	104.7			21.2	%		21.7	%
		Fee-based income				17.0				13.2			29.4			29.5
		Gross profit				32.7				28.2			15.7			16.1
		SG&A expenses excluding restructuring charges				26.7				24.2			10.4
		Restructuring charges				0.1				-			NM
		Total SG&A expenses				26.8				24.2			10.7			10.9
		Earnings from operations				5.9				4.0			45.4
		Earnings from operations excluding restructuring charges				6.0				4.0			47.2
		Gross profit rate				25.8	%			27.0	%		(1.2	)pts.
		Expense rates (excluding restructuring charges):
			% of revenue			21.0				23.1			(2.1	)
			% of gross profit			81.6				85.5			(3.9	)
		Operating margin (excluding restructuring charges)				4.7				3.9			0.8

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
					September Year to Date
																Constant
																Currency
					2013				2012				Change			Change
AMERICAS
	Commercial
		Revenue from services (including fee-based income)			$	1,904.1			$	1,980.1			(3.8	)%		(3.6	)%
		Fee-based income				12.0				12.1			(0.3	)		0.7
		Gross profit				274.5				292.1			(6.1	)		(5.8	)
		Gross profit rate				14.4	%			14.8	%		(0.4	)pts.
	PT
		Revenue from services (including fee-based income)			$	758.9			$	774.1			(2.0	)%		(2.0	)%
		Fee-based income				12.3				11.3			8.3			8.5
		Gross profit				122.4				120.8			1.3			1.3
		Gross profit rate				16.1	%			15.6	%		0.5	pts.
	Total Americas
		Revenue from services (including fee-based income)			$	2,663.0			$	2,754.2			(3.3	)%		(3.2	)%
		Fee-based income				24.3				23.4			3.9			4.5
		Gross profit				396.9				412.9			(3.9	)		(3.7	)
		Total SG&A expenses				314.5				303.4			3.6			3.9
		Earnings from operations				82.4				109.5			(24.7	)
		Gross profit rate				14.9	%			15.0	%		(0.1	)pts.
		Expense rates:
			% of revenue			11.8				11.0			0.8
			% of gross profit			79.2				73.5			5.7
		Operating margin				3.1				4.0			(0.9	)
EMEA
	Commercial
		Revenue from services (including fee-based income)			$	645.3			$	641.2			0.6	%		(0.4	)%
		Fee-based income				15.5				17.5			(11.7	)		(11.6	)
		Gross profit				98.8				101.1			(2.2	)		(3.3	)
		Gross profit rate				15.3	%			15.8	%		(0.5	)pts.
	PT
		Revenue from services (including fee-based income)			$	131.7			$	125.3			5.1	%		3.8	%
		Fee-based income				11.8				13.1			(9.8	)		(10.0	)
		Gross profit				32.0				32.7			(2.2	)		(3.1	)
		Gross profit rate				24.3	%			26.1	%		(1.8	)pts.
	Total EMEA
		Revenue from services (including fee-based income)			$	777.0			$	766.5			1.4	%		0.3	%
		Fee-based income				27.3				30.6			(10.9	)		(11.0	)
		Gross profit				130.8				133.8			(2.2	)		(3.3	)
		SG&A expenses excluding restructuring charges				122.1				126.4			(3.4	)
		Restructuring charges				0.1				(2.2	)		108.8
		Total SG&A expenses				122.2				124.2			(1.6	)		(2.6	)
		Earnings from operations				8.6				9.6			(10.5	)
		Earnings from operations excluding restructuring charges				8.7				7.4			17.9
		Gross profit rate				16.8	%			17.5	%		(0.7	)pts.
		Expense rates (excluding restructuring charges):
			% of revenue			15.7				16.5			(0.8	)
			% of gross profit			93.3				94.4			(1.1	)
		Operating margin (excluding restructuring charges)				1.1				1.0			0.1

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
					September Year to Date
																Constant
																Currency
					2013				2012				Change			Change
APAC
	Commercial
		Revenue from services (including fee-based income)			$	256.8			$	258.3			(0.6	)%		1.6	%
		Fee-based income				8.2				9.3			(12.0	)		(9.0	)
		Gross profit				36.8				38.4			(4.1	)		(1.8	)
		Gross profit rate				14.3	%			14.9	%		(0.6	)pts.
	PT
		Revenue from services (including fee-based income)			$	29.3			$	39.9			(26.6	)%		(24.1	)%
		Fee-based income				6.7				12.9			(48.6	)		(47.1	)
		Gross profit				10.5				16.7			(37.2	)		(35.3	)
		Gross profit rate				35.7	%			41.8	%		(6.1	)pts.
	Total APAC
		Revenue from services (including fee-based income)			$	286.1			$	298.2			(4.1	)%		(1.9	)%
		Fee-based income				14.9				22.2			(33.2	)		(31.2	)
		Gross profit				47.3				55.1			(14.1	)		(11.9	)
		SG&A expenses excluding restructuring charges				45.5				57.5			(20.9	)
		Restructuring charges				0.3				-			NM
		Total SG&A expenses				45.8				57.5			(20.4	)		(18.3	)
		Earnings from operations				1.5				(2.4	)		NM
		Earnings from operations excluding restructuring charges				1.8				(2.4	)		NM
		Gross profit rate				16.5	%			18.5	%		(2.0	)pts.
		Expense rates (excluding restructuring charges):
			% of revenue			15.9				19.3			(3.4	)
			% of gross profit			96.2				104.4			(8.2	)
		Operating margin (excluding restructuring charges)				0.6				(0.8	)		1.4
OCG
		Revenue from services (including fee-based income)			$	335.8			$	282.8			18.8	%		19.0	%
		Fee-based income				47.3				37.6			26.2			26.4
		Gross profit				85.4				75.0			13.8			14.0
		SG&A expenses excluding restructuring charges				77.7				69.6			11.6
		Restructuring charges				0.9				-			NM
		Total SG&A expenses				78.6				69.6			12.8			12.9
		Asset impairments				1.7				-			NM
		Earnings from operations				5.1				5.4			(3.8	)
		Earnings from operations excluding restructuring charges				6.0				5.4			11.1
		Gross profit rate				25.4	%			26.5	%		(1.1	)pts.
		Expense rates (excluding restructuring charges):
			% of revenue			23.1				24.6			(1.5	)
			% of gross profit			91.0				92.8			(1.8	)
		Operating margin (excluding restructuring charges)				1.8				1.9			(0.1	)

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)
				Sept. 29, 2013				Dec. 30, 2012				Sept. 30, 2012
Current Assets
	Cash and equivalents			$	73.9			$	76.3			$	70.3
	Trade accounts receivable, less allowances of $10.0 and $10.4 and $11.9, respectively				1,071.8				1,013.9				1,018.8
	Prepaid expenses and other current assets				62.0				57.5				62.9
	Deferred taxes				40.3				44.9				38.1
		Total current assets			1,248.0				1,192.6				1,190.1
Property and Equipment, Net					87.7				89.9				90.4
Noncurrent Deferred Taxes					104.5				82.8				88.8
Goodwill, Net					90.3				89.5				91.2
Other Assets					241.0				180.9				174.8
Total Assets				$	1,771.5			$	1,635.7			$	1,635.3
Current Liabilities
	Short-term borrowings			$	58.0			$	64.1			$	83.6
	Accounts payable and accrued liabilities				308.9				295.6				279.1
	Accrued payroll and related taxes				300.9				264.5				269.9
	Accrued insurance				30.7				32.8				28.8
	Income and other taxes				71.5				65.3				62.7
		Total current liabilities			770.0				722.3				724.1
Noncurrent Liabilities
	Accrued insurance				40.7				43.5				48.9
	Accrued retirement benefits				129.3				111.0				108.5
	Other long-term liabilities				28.0				17.9				25.1
		Total noncurrent liabilities			198.0				172.4				182.5
Stockholders' Equity
	Common stock				40.1				40.1				40.1
	Treasury stock				(57.5	)			(61.6	)			(63.1	)
	Paid-in capital				26.1				27.1				27.7
	Earnings invested in the business				736.0				700.0				693.0
	Accumulated other comprehensive income				58.8				35.4				31.0
		Total stockholders' equity			803.5				741.0				728.7
Total Liabilities and Stockholders' Equity				$	1,771.5			$	1,635.7			$	1,635.3
STATISTICS:
Working Capital				$	478.0			$	470.3			$	466.0
Current Ratio					1.6				1.7				1.6
Debt-to-capital %					6.7	%			8.0	%			10.3	%
Global Days Sales Outstanding					56				53				54

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 39 WEEKS ENDED SEPTEMBER 29, 2013 AND SEPTEMBER 30, 2012
(UNAUDITED)
(In millions of dollars)
					2013				2012
Cash flows from operating activities
	Net earnings				$	41.7			$	41.2
	Noncash adjustments:
		Impairment of assets				1.7				-
		Depreciation and amortization				15.4				16.8
		Provision for bad debts				1.1				1.2
		Stock-based compensation				2.7				3.7
		Other, net				0.7				-
	Changes in operating assets and liabilities					(41.4	)			(42.0	)
			Net cash from operating activities			21.9				20.9
Cash flows from investing activities
	Capital expenditures					(11.7	)			(13.9	)
	Other investing activities					-				0.1
			Net cash used in investing activities			(11.7	)			(13.8	)
Cash flows from financing activities
	Net change in short-term borrowings					(6.1	)			(12.6	)
	Dividend payments					(5.7	)			(5.7	)
	Other financing activities					0.3				0.1
			Net cash used in financing activities			(11.5	)			(18.2	)
Effect of exchange rates on cash and equivalents						(1.1	)			0.4
Net change in cash and equivalents						(2.4	)			(10.7	)
Cash and equivalents at beginning of period						76.3				81.0
Cash and equivalents at end of period					$	73.9			$	70.3

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
			Third Quarter (Commercial, PT and OCG)
									% Change
												Constant
			2013			2012			US$			Currency
Americas
	United States		$	843.5		$	853.4		(1.2	)%		(1.2	)%
	Canada			52.9			61.9		(14.5	)		(10.8	)
	Mexico			33.1			31.1		6.6			4.5
	Puerto Rico			24.4			24.5		(0.3	)		(0.3	)
	Brazil			13.1			14.3		(8.0	)		1.8
Total Americas				967.0			985.2		(1.8	)		(1.5	)
EMEA
	Switzerland			68.6			61.0		12.3			8.8
	France			62.4			60.3		3.6			(2.2	)
	Russia			32.9			31.7		3.7			6.6
	United Kingdom			26.5			25.6		3.6			5.6
	Portugal			24.1			18.8		28.2			21.2
	Germany			17.4			17.8		(1.9	)		(7.4	)
	Norway			16.1			17.6		(8.3	)		(7.2	)
	Italy			13.8			13.1		4.9			(0.8	)
	Other			16.0			17.2		(7.5	)		(11.6	)
Total EMEA				277.8			263.1		5.5			2.6
APAC
	Australia			32.4			35.4		(8.5	)		3.8
	Singapore			29.4			26.0		12.8			14.8
	Malaysia			17.2			19.1		(9.7	)		(6.2	)
	New Zealand			12.6			13.0		(2.6	)		(1.3	)
	Other			9.2			12.4		(26.2	)		(18.1	)
Total APAC				100.8			105.9		(4.9	)		1.5
Total Kelly Services, Inc.			$	1,345.6		$	1,354.2		(0.6	)%		(0.5	)%

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
			September Year to Date (Commercial, PT and OCG)
									% Change
												Constant
			2013			2012			US$			Currency
Americas
	United States		$	2,547.3		$	2,586.3		(1.5	)%		(1.5	)%
	Canada			163.9			183.4		(10.6	)		(8.8	)
	Mexico			99.4			82.4		20.7			15.6
	Puerto Rico			73.6			76.3		(3.6	)		(3.6	)
	Brazil			45.0			46.7		(3.7	)		6.6
Total Americas				2,929.2			2,975.1		(1.5	)		(1.4	)
EMEA
	Switzerland			185.6			174.4		6.4			5.7
	France			182.0			184.2		(1.2	)		(3.9	)
	Russia			102.0			97.1		5.0			7.1
	United Kingdom			78.1			79.3		(1.5	)		0.5
	Portugal			63.0			56.0		12.5			9.3
	Germany			49.3			53.9		(8.5	)		(11.0	)
	Norway			46.3			50.8		(8.8	)		(9.5	)
	Italy			43.6			44.5		(2.0	)		(4.5	)
	Other			50.7			48.4		4.6			2.1
Total EMEA				800.6			788.6		1.5			0.4
APAC
	Australia			100.4			101.6		(1.2	)		4.3
	Singapore			83.5			75.1		11.2			10.7
	Malaysia			51.1			54.9		(6.9	)		(5.8	)
	New Zealand			36.1			39.5		(8.5	)		(9.8	)
	Other			26.4			40.3		(34.6	)		(30.2	)
Total APAC				297.5			311.4		(4.5	)		(2.2	)
Total Kelly Services, Inc.			$	4,027.3		$	4,075.1		(1.2	)%		(1.1	)%

KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 13 WEEKS ENDED SEPTEMBER 29, 2013 AND SEPTEMBER 30, 2012
(UNAUDITED)
(In millions of dollars except per share data)
			2013										2012
			As reported			Restructuring Charges (Note 1)				Adjusted Earnings			Earnings			% Change
Revenue from services			$	1,345.6		$	-			$	1,345.6		$	1,354.2		(0.6	)%
Cost of services				1,125.2			-				1,125.2			1,126.7		(0.1	)
Gross profit				220.4			-				220.4			227.5		(3.1	)
Selling, general and administrative expenses				200.2			(0.5	)			199.7			203.5		(1.8	)
Earnings from operations				20.2			0.5				20.7			24.0		(13.9	)
Other expense, net				1.3			-				1.3			0.7		(88.9	)
Earnings from continuing operations before taxes				18.9			0.5				19.4			23.3		(17.1	)
Income tax expense (benefit)				0.1			-				0.1			6.7		(99.2	)
Earnings from continuing operations			$	18.8		$	0.5			$	19.3		$	16.6		16.3	%
Earnings per share from continuing operations:
	Basic		$	0.49		$	0.01			$	0.51		$	0.43		18.6	%
	Diluted		$	0.49		$	0.01			$	0.51		$	0.43		18.6	%
Note: Earnings per share amounts for each quarter are required to be computed independently and may not equalthe amounts computed for the total year.

KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 39 WEEKS ENDED SEPTEMBER 29, 2013 AND SEPTEMBER 30, 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			$	4,027.3			$	-			$	-			$	4,027.3			$	4,075.1		(1.2	)%
Cost of services				3,369.3				-				-				3,369.3				3,400.7		(0.9	)
Gross profit				658.0				-				-				658.0				674.4		(2.4	)
Selling, general and administrative expenses				612.6				(1.3	)			-				611.3				614.1		(0.4	)
Asset impairments				1.7				-				(1.7	)			-				-		NM
Earnings from operations				43.7				1.3				1.7				# 46.7				60.3		(22.6	)
Other expense, net				3.9				-				-				3.9				1.8		(118.3	)
Earnings from continuing operations before taxes				39.8				1.3				1.7				42.8				58.5		(27.0	)
Income tax expense (benefit)				(1.9	)			0.1				-				(1.8	)			19.9		(109.4	)
Earnings from continuing operations			$	41.7			$	1.2			$	1.7			$	44.6			$	38.6		(15.5	)%
Earnings per share from continuing operations:
	Basic		$	1.09			$	0.03			$	0.04			$	1.17			$	1.02		14.7	%
	Diluted		$	1.09			$	0.03			$	0.04			$	1.17			$	1.02		14.7	%
			2012
			As reported				Restructuring Charges (Note 1)				Adjusted Earnings
Revenue from services			$	4,075.1			$	-			$	4,075.1
Cost of services				3,400.7				-				3,400.7
Gross profit				674.4				-				674.4
Selling, general and administrative expenses				611.9				2.2				614.1
Earnings from operations				62.5				(2.2	)			60.3
Other expense, net				1.8				-				1.8
Earnings from continuing operations before taxes				60.7				(2.2	)			58.5
Income tax expense (benefit)				19.9				-				19.9
Earnings from continuing operations			$	40.8			$	(2.2	)		$	38.6
Earnings per share from continuing operations:
	Basic		$	1.07			$	(0.06	)		$	1.02
	Diluted		$	1.07			$	(0.06	)		$	1.02
Note: Earnings per share amounts for each quarter are required to be computed independently and may not equalthe 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)	In 2013, restructuring charges relate to severance costs from exiting the executive search business in Germany, along with severance costs for EMEA Commercial branches that closed in prior years. In 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, Inc.

 

 

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