Press Release Details

 

TROY, MI -- (Marketwired) -- 11/05/14 -- Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a leader in providing workforce solutions, today announced results for the third quarter of 2014.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the third quarter of 2014 totaled $1.4 billion, a 3.8% increase compared to the corresponding quarter of 2013.

Earnings from operations for the third quarter of 2014 totaled $7.1 million, compared to $20.2 million reported for the third quarter of 2013. Included in the results of operations in the third quarter of 2014 are restructuring charges of $4.0 million. The results of operations in the third quarter of 2013 included restructuring charges of $0.5 million. Excluding the restructuring charges from both years, earnings from operations were $11.1 million in the third quarter of 2014, compared to adjusted earnings of $20.7 million last year.

Diluted earnings per share in the third quarter of 2014 were $0.03 compared to $0.49 per share in the third quarter of 2013. Adjusted earnings per share were $0.10 in the third quarter of 2014 compared to $0.51 in the third quarter of 2013.

"We're pleased with our third quarter performance," said Camden. "2014 has been a year of aggressive strategic investments at Kelly, and we're seeing early signs that those investments are gaining traction. We are now a leaner, more efficient company that is focused on growth and well-aligned with market demands for high-margin specialty staffing and holistic talent supply chain solutions."

Kelly also reported that on November 4, its board of directors declared a dividend of $0.05 per share. The dividend is payable December 5 to shareholders of record as of the close of business on November 17.

In conjunction with its third quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on November 5, 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 SEPTEMBER 28, 2014 AND SEPTEMBER 29, 2013
(UNAUDITED)
(In millions of dollars except per share data)
			2014				2013				Change					% Change
Revenue from services			$	1,396.4			$	1,345.6			$	50.8				3.8	%
Cost of services				1,171.0				1,125.2				45.8				4.1
Gross profit				225.4				220.4				5.0				2.2
Selling, general and administrative expenses				218.3				200.2				18.1				9.0
Earnings from operations				7.1				20.2				(13.1	)			(65.1	)
Other expense, net				2.2				1.3				0.9				(63.1	)
Earnings before taxes				4.9				18.9				(14.0	)			(74.4	)
Income tax expense				3.5				0.1				3.4				NM
Net earnings			$	1.4			$	18.8			$	(17.4	)			(93.0)	%
Basic earnings per share			$	0.03			$	0.49			$	(0.46	)			(93.9)	%
Diluted earnings per share			$	0.03			$	0.49			$	(0.46	)			(93.9)	%
STATISTICS:
Gross profit rate				16.1	%			16.4	%			(0.3	)	pts.
Selling, general and administrative expenses:
	% of revenue			15.6				14.9				0.7
	% of gross profit			96.9				90.8				6.1
% Return:
Earnings from operations				0.5				1.5				(1.0	)
Earnings before taxes				0.3				1.4				(1.1	)
Net earnings				0.1				1.4				(1.3	)
Effective income tax rate				72.7	%			0.3	%			72.4		pts.
Average number of shares outstanding (millions):
	Basic			37.6				37.4
	Diluted			37.6				37.4
Shares adjusted for nonvested restricted awards (millions):
	Basic			38.5				38.1
	Diluted			38.5				38.1

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 39 WEEKS ENDED SEPTEMBER 28, 2014 AND SEPTEMBER 29, 2013
(UNAUDITED)
(In millions of dollars except per share data)
			2014				2013				Change					% Change
Revenue from services			$	4,137.7			$	4,027.3			$	110.4				2.7	%
Cost of services				3,461.9				3,369.3				92.6				2.8
Gross profit				675.8				658.0				17.8				2.7
Selling, general and administrative expenses				656.5				612.6				43.9				7.2
Asset impairments				--				1.7				(1.7	)			(100.0	)
Earnings from operations				19.3				43.7				(24.4	)			(56.4	)
Other expense, net				4.2				3.9				0.3				(4.6	)
Earnings before taxes				15.1				39.8				(24.7	)			(62.5	)
Income tax expense (benefit)				8.4				(1.9	)			10.3				NM
Net earnings			$	6.7			$	41.7			$	(35.0	)			(84.2)	%
Basic earnings per share			$	0.17			$	1.09			$	(0.92	)			(84.4)	%
Diluted earnings per share			$	0.17			$	1.09			$	(0.92	)			(84.4)	%
STATISTICS:
Gross profit rate				16.3	%			16.3	%			--		pts.
Selling, general and administrative expenses:
	% of revenue			15.9				15.2				0.7
	% of gross profit			97.2				93.1				4.1
% Return:
Earnings from operations				0.5				1.1				(0.6	)
Earnings before taxes				0.4				1.0				(0.6	)
Net earnings				0.2				1.0				(0.8	)
Effective income tax rate				55.9	%			(5.0)	%			60.9		pts.
Average number of shares outstanding (millions):
	Basic			37.5				37.2
	Diluted			37.5				37.3
Shares adjusted for nonvested restricted awards (millions):
	Basic			38.5				38.2
	Diluted			38.5				38.2

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
				Third Quarter
																Constant
																Currency
				2014				2013				Change				Change
AMERICAS
Commercial
	Revenue from services			$	640.8			$	617.0			3.9		%		4.3	%
	Staffing fee-based income included in revenue from services				3.8				3.3			12.3				12.7
	Gross profit				91.7				86.8			5.7				6.1
	Gross profit rate				14.3	%			14.1	%		0.2		pts.
PT
	Revenue from services			$	242.5			$	239.9			1.1		%		1.2	%
	Staffing fee-based income included in revenue from services				4.4				3.9			13.1				13.4
	Gross profit				39.6				38.8			1.9				2.1
	Gross profit rate				16.3	%			16.2	%		0.1		pts.
Total Americas
	Revenue from services			$	883.3			$	856.9			3.1		%		3.4	%
	Staffing fee-based income included in revenue from services				8.2				7.2			12.7				13.1
	Gross profit				131.3				125.6			4.5				4.8
	Total SG&A expenses				110.8				100.2			10.6				10.9
	Earnings from operations				20.5				25.4			(19.7	)
	Gross profit rate				14.9	%			14.7	%		0.2		pts.
	Expense rates:
		% of revenue			12.5				11.7			0.8
		% of gross profit			84.5				79.8			4.7
	Return on sales				2.3				3.0			(0.7	)
EMEA
Commercial
	Revenue from services			$	231.3			$	224.5			3.0		%		3.2	%
	Staffing fee-based income included in revenue from services				4.2				4.6			(8.9	)			(6.1	)
	Gross profit				33.6				33.9			(0.9	)			(0.4	)
	Gross profit rate				14.5	%			15.1	%		(0.6	)	pts.
PT
	Revenue from services			$	48.1			$	45.1			6.5		%		6.0	%
	Staffing fee-based income included in revenue from services				3.5				3.9			(9.6	)			(7.8	)
	Gross profit				10.9				10.8			0.6				1.0
	Gross profit rate				22.6	%			23.9	%		(1.3	)	pts.
Total EMEA
	Revenue from services			$	279.4			$	269.6			3.6		%		3.6	%
	Staffing fee-based income included in revenue from services				7.7				8.5			(9.3	)			(6.9	)
	Gross profit				44.5				44.7			(0.5	)			(0.1	)
	SG&A expenses excluding restructuring charges				40.0				40.0			--
	Restructuring charges				--				0.3			(100.0	)
	Total SG&A expenses				40.0				40.3			(0.8	)			(0.5	)
	Earnings from operations				4.5				4.4			1.6
	Earnings from operations excluding restructuring charges				4.5				4.7			(5.5	)
	Gross profit rate				15.9	%			16.6	%		(0.7	)	pts.
	Expense rates (excluding restructuring charges):
		% of revenue			14.3				14.8			(0.5	)
		% of gross profit			90.0				89.5			0.5
	Return on sales (excluding restructuring charges)				1.6				1.7			(0.1	)

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
				Third Quarter
																Constant
																Currency
				2014				2013				Change				Change
APAC
Commercial
	Revenue from services			$	91.0			$	87.6			3.9		%		2.2	%
	Staffing fee-based income included in revenue from services				2.0				2.3			(15.5	)			(17.3	)
	Gross profit				11.7				12.7			(8.2	)			(9.7	)
	Gross profit rate				12.8	%			14.5	%		(1.7	)	pts.
PT
	Revenue from services			$	10.6			$	9.1			15.8		%		14.4	%
	Staffing fee-based income included in revenue from services				2.0				2.2			(9.9	)			(11.0	)
	Gross profit				3.3				3.4			(2.8	)			(4.0	)
	Gross profit rate				31.5	%			37.5	%		(6.0	)	pts.
Total APAC
	Revenue from services			$	101.6			$	96.7			5.0		%		3.4	%
	Staffing fee-based income included in revenue from services				4.0				4.5			(12.8	)			(14.2	)
	Gross profit				15.0				16.1			(7.0	)			(8.5	)
	SG&A expenses excluding restructuring charges				14.2				14.5			(2.5	)
	Restructuring charges				0.3				0.1			410.5
	Total SG&A expenses				14.5				14.6			(0.9	)			(2.7	)
	Earnings from operations				0.5				1.5			(65.7	)
	Earnings from operations excluding restructuring charges				0.8				1.6			(48.4	)
	Gross profit rate				14.8	%			16.7	%		(1.9	)	pts.
	Expense rates (excluding restructuring charges):
		% of revenue			14.0				15.1			(1.1	)
		% of gross profit			94.6				90.2			4.4
	Return on sales (excluding restructuring charges)				0.8				1.6			(0.8	)
OCG
	Revenue from services			$	149.8			$	135.3			10.7		%		10.9	%
	Gross profit				35.8				34.8			2.9				2.8
	SG&A expenses excluding restructuring charges				32.2				28.0			15.0
	Restructuring charges				--				0.1			(100.0	)
	Total SG&A expenses				32.2				28.1			14.7				14.7
	Earnings from operations				3.6				6.7			(46.0	)
	Earnings from operations excluding restructuring charges				3.6				6.8			(46.6	)
	Gross profit rate				23.9	%			25.7	%		(1.8	)	pts.
	Expense rates (excluding restructuring charges):
		% of revenue			21.5				20.7			0.8
		% of gross profit			89.8				80.3			9.5
	Return on sales (excluding restructuring charges)				2.4				5.1			(2.7	)

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
				September Year to Date
																Constant
																Currency
				2014				2013				Change				Change
AMERICAS
Commercial
	Revenue from services			$	1,915.1			$	1,904.1			0.6		%		1.4	%
	Staffing fee-based income included in revenue from services				10.4				9.8			6.1				7.6
	Gross profit				280.0				274.5			2.0				2.8
	Gross profit rate				14.6	%			14.4	%		0.2		pts.
PT
	Revenue from services			$	723.1			$	733.7			(1.4	)	%		(1.3	)%
	Staffing fee-based income included in revenue from services				11.7				10.8			8.6				9.1
	Gross profit				118.4				116.1			2.0				2.2
	Gross profit rate				16.4	%			15.8	%		0.6		pts.
Total Americas
	Revenue from services			$	2,638.2			$	2,637.8			--		%		0.7	%
	Staffing fee-based income included in revenue from services				22.1				20.6			7.4				8.4
	Gross profit				398.4				390.6			2.0				2.6
	Total SG&A expenses				332.9				310.6			7.2				7.9
	Earnings from operations				65.5				80.0			(18.3	)
	Gross profit rate				15.1	%			14.8	%		0.3		pts.
	Expense rates:
		% of revenue			12.6				11.8			0.8
		% of gross profit			83.6				79.5			4.1
	Return on sales				2.5				3.0			(0.5	)
EMEA
Commercial
	Revenue from services			$	690.2			$	645.3			7.0		%		5.7	%
	Staffing fee-based income included in revenue from services				14.0				14.9			(6.0	)			(4.3	)
	Gross profit				101.0				98.8			2.2				1.2
	Gross profit rate				14.6	%			15.3	%		(0.7	)	pts.
PT
	Revenue from services			$	145.5			$	131.7			10.3		%		7.7	%
	Staffing fee-based income included in revenue from services				10.7				11.7			(8.3	)			(7.6	)
	Gross profit				33.3				32.0			3.8				2.3
	Gross profit rate				22.8	%			24.3	%		(1.5	)	pts.
Total EMEA
	Revenue from services			$	835.7			$	777.0			7.5		%		6.0	%
	Staffing fee-based income included in revenue from services				24.7				26.6			(7.0	)			(5.7	)
	Gross profit				134.3				130.8			2.6				1.5
	SG&A expenses excluding restructuring charges				124.2				122.1			1.7
	Restructuring charges				0.8				0.1			327.7
	Total SG&A expenses				125.0				122.2			2.2				0.8
	Earnings from operations				9.3				8.6			8.1
	Earnings from operations excluding restructuring charges				10.1				8.7			15.1
	Gross profit rate				16.1	%			16.8	%		(0.7	)	pts.
	Expense rates (excluding restructuring charges):
		% of revenue			14.9				15.7			(0.8	)
		% of gross profit			92.5				93.3			(0.8	)
	Return on sales (excluding restructuring charges)				1.2				1.1			0.1

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
				September Year to Date
																Constant
																Currency
				2014				2013				Change				Change
APAC
Commercial
	Revenue from services			$	260.5			$	256.8			1.4		%		4.2	%
	Staffing fee-based income included in revenue from services				5.9				7.0			(17.1	)			(14.0	)
	Gross profit				35.7				36.8			(3.1	)			(0.3	)
	Gross profit rate				13.7	%			14.3	%		(0.6	)	pts.
PT
	Revenue from services			$	29.2			$	29.3			(0.5	)	%		3.3	%
	Staffing fee-based income included in revenue from services				5.8				6.7			(13.0	)			(9.7	)
	Gross profit				9.4				10.5			(10.2	)			(6.8	)
	Gross profit rate				32.2	%			35.7	%		(3.5	)	pts.
Total APAC
	Revenue from services			$	289.7			$	286.1			1.3		%		4.1	%
	Staffing fee-based income included in revenue from services				11.7				13.7			(15.1	)			(11.9	)
	Gross profit				45.1				47.3			(4.6	)			(1.7	)
	SG&A expenses excluding restructuring charges				43.3				45.5			(4.7	)
	Restructuring charges				1.3				0.3			373.4
	Total SG&A expenses				44.6				45.8			(2.3	)			1.1
	Earnings from operations				0.5				1.5			(76.8	)
	Earnings from operations excluding restructuring charges				1.8				1.8			(4.2	)
	Gross profit rate				15.6	%			16.5	%		(0.9	)	pts.
	Expense rates (excluding restructuring charges):
		% of revenue			15.0				15.9			(0.9	)
		% of gross profit			96.2				96.2			--
	Return on sales (excluding restructuring charges)				0.6				0.6			--
OCG
	Revenue from services			$	422.1			$	361.0			16.9		%		17.3	%
	Gross profit				101.3				91.7			10.5				10.6
	SG&A expenses excluding restructuring charges				94.7				81.6			16.0
	Restructuring charges				--				0.9			(100.0	)
	Total SG&A expenses				94.7				82.5			14.9				15.0
	Asset impairments				--				1.7			(100.0	)
	Earnings from operations				6.6				7.5			(13.1	)
	Earnings from operations excluding restructuring charges				6.6				8.4			(21.4	)
	Gross profit rate				24.0	%			25.4	%		(1.4	)	pts.
	Expense rates (excluding restructuring charges):
		% of revenue			22.4				22.6			(0.2	)
		% of gross profit			93.4				88.9			4.5
	Return on sales (excluding restructuring charges)				1.6				2.4			(0.8	)

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)
			Sept. 28, 2014				Dec. 29, 2013				Sept. 29, 2013
Current Assets
	Cash and equivalents		$	51.6			$	125.7			$	73.9
	Trade accounts receivable, less allowances of
	$9.2, $9.9 and $10.0, respectively			1,158.1				1,023.1				1,071.8
	Prepaid expenses and other current assets			56.8				52.2				62.0
	Deferred taxes			28.9				35.5				40.3
Total current assets				1,295.4				1,236.5				1,248.0
Property and Equipment, Net				91.1				92.0				87.7
Noncurrent Deferred Taxes				132.7				121.7				104.5
Goodwill, Net				90.3				90.3				90.3
Other Assets				291.5				258.1				241.0
Total Assets			$	1,901.0			$	1,798.6			$	1,771.5
Current Liabilities
	Short-term borrowings		$	88.7			$	28.3			$	58.0
	Accounts payable and accrued liabilities			339.0				342.4				308.9
	Accrued payroll and related taxes			318.6				294.9				300.9
	Accrued insurance			24.4				27.6				30.7
	Income and other taxes			74.0				68.8				71.5
Total current liabilities				844.7				762.0				770.0
Noncurrent Liabilities
	Accrued insurance			43.4				46.0				40.7
	Accrued retirement benefits			146.6				134.7				129.3
	Other long-term liabilities			40.7				33.3				28.0
Total noncurrent liabilities				230.7				214.0				198.0
Stockholders' Equity
	Common stock			40.1				40.1				40.1
	Treasury stock			(52.5	)			(56.2	)			(57.5	)
	Paid-in capital			26.7				26.0				26.1
	Earnings invested in the business			752.3				751.3				736.0
	Accumulated other comprehensive income			59.0				61.4				58.8
Total stockholders' equity				825.6				822.6				803.5
Total Liabilities and Stockholders' Equity			$	1,901.0			$	1,798.6			$	1,771.5
STATISTICS:
	Working Capital		$	450.7			$	474.5			$	478.0
	Current Ratio			1.5				1.6				1.6
	Debt-to-capital %			9.7		%		3.3		%		6.7		%
	Global Days Sales Outstanding			58				52				56

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 39 WEEKS ENDED SEPTEMBER 28, 2014 AND SEPTEMBER 29, 2013
(UNAUDITED)
(In millions of dollars)
					2014				2013
Cash flows from operating activities:
Net earnings				$	6.7			$	41.7
Noncash adjustments:
	Impairment of assets				--				1.7
	Depreciation and amortization				16.2				15.4
	Provision for bad debts				3.6				1.1
	Stock-based compensation				4.1				2.7
	Other, net				1.3				0.7
Changes in operating assets and liabilities					(140.9	)			(41.4	)
	Net cash (used in) from operating activities				(109.0	)			21.9
Cash flows from investing activities:
	Capital expenditures				(15.0	)			(11.7	)
	Investment in equity affiliate				(5.4	)			--
	Other investing activities				0.2				--
		Net cash used in investing activities			(20.2	)			(11.7	)
Cash flows from financing activities:
	Net change in short-term borrowings				60.4				(6.1	)
	Dividend payments				(5.7	)			(5.7	)
	Other financing activities				0.4				0.3
		Net cash from (used in) financing activities			55.1				(11.5	)
Effect of exchange rates on cash and equivalents					--				(1.1	)
Net change in cash and equivalents					(74.1	)			(2.4	)
Cash and equivalents at beginning of period					125.7				76.3
Cash and equivalents at end of period				$	51.6			$	73.9

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
				Third Quarter (Commercial, PT and OCG)
									% Change
			2014			2013			US$				Constant Currency
Americas
	United States		$	873.7		$	843.5		3.6		%		3.6		%
	Canada			51.9			52.9		(1.9	)			2.6
	Mexico			37.0			33.1		11.8				13.6
	Puerto Rico			25.7			24.4		5.1				5.1
	Brazil			13.6			13.1		3.7				3.2
Total Americas				1,001.9			967.0		3.6				3.9
EMEA
	France			70.1			62.4		12.4				12.0
	Switzerland			66.7			68.6		(2.7	)			(4.7	)
	Portugal			33.3			24.1		38.0				37.8
	Russia			28.7			32.9		(13.0	)			(3.9	)
	United Kingdom			26.2			26.5		(1.1	)			(8.4	)
	Germany			17.5			17.4		0.6				0.6
	Norway			14.8			16.1		(7.7	)			(3.8	)
	Italy			14.8			13.8		6.7				6.7
	Other			15.8			16.0		(1.0	)			(0.3	)
Total EMEA				287.9			277.8		3.6				3.7
APAC
	Singapore			33.4			29.4		13.7				12.2
	Australia			32.3			32.4		(0.2	)			(1.3	)
	Malaysia			16.7			17.2		(3.0	)			(4.5	)
	New Zealand			12.7			12.6		0.4				(5.1	)
	Other			11.5			9.2		25.1				26.2
Total APAC				106.6			100.8		5.8				4.1
Total Kelly Services, Inc.			$	1,396.4		$	1,345.6		3.8		%		3.9		%

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
			September Year to Date (Commercial, PT and OCG)
									% Change
			2014			2013			US$				Constant Currency
Americas
	United States		$	2,601.9		$	2,547.3		2.1		%		2.1		%
	Canada			148.2			163.9		(9.6	)			(3.5	)
	Mexico			102.3			99.4		2.9				6.4
	Puerto Rico			78.4			73.6		6.4				6.4
	Brazil			43.2			45.0		(4.1	)			5.2
Total Americas				2,974.0			2,929.2		1.5				2.1
EMEA
	France			202.2			182.0		11.1				7.9
	Switzerland			195.7			185.6		5.5				1.4
	Russia			96.4			102.0		(5.5	)			5.9
	Portugal			92.4			63.0		46.6				42.5
	United Kingdom			82.4			78.1		5.5				(2.4	)
	Germany			50.7			49.3		3.0				0.1
	Italy			46.3			43.6		6.0				2.9
	Norway			43.6			46.3		(5.7	)			(1.0	)
	Other			50.9			50.7		0.4				(1.8	)
Total EMEA				860.6			800.6		7.5				6.0
APAC
	Singapore			94.8			83.5		13.5				14.0
	Australia			88.8			100.4		(11.6	)			(5.9	)
	Malaysia			50.0			51.1		(2.1	)			1.5
	New Zealand			38.2			36.1		5.9				2.1
	Other			31.3			26.4		18.4				27.7
Total APAC				303.1			297.5		1.9				4.9
Total Kelly Services, Inc.			$	4,137.7		$	4,027.3		2.7		%		3.1		%

KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 13 WEEKS ENDED SEPTEMBER 28, 2014 AND SEPTEMBER 29, 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		$	1,396.4		$	--			$	1,396.4		$	1,345.6		3.8		%
Cost of services			1,171.0			--				1,171.0			1,125.2		4.1
Gross profit			225.4			--				225.4			220.4		2.2
SG&A expenses			218.3			(4.0	)			214.3			199.7		7.3
Earnings from operations			7.1			4.0				11.1			20.7		(46.8	)
Other expense, net			2.2			--				2.2			1.3		(63.1	)
Earnings before taxes			4.9			4.0				8.9			19.4		(54.6	)
Inc. tax expense (benefit)			3.5			1.5				5.0			0.1		NM
Net earnings		$	1.4		$	2.5			$	3.9		$	19.3		(80.5	)	%
Earnings per share:
	Basic	$	0.03		$	0.06			$	0.10		$	0.51		(80.4	)	%
	Diluted	$	0.03		$	0.06			$	0.10		$	0.51		(80.4	)	%
			2013
			As reported			Restructuring Charges (Note 1)				Adjusted Earnings
Revenue from services		$	1,345.6		$	--			$	1,345.6
Cost of services			1,125.2			--				1,125.2
Gross profit			220.4			--				220.4
SG&A expenses			200.2			(0.5	)			199.7
Earnings from operations			20.2			0.5				20.7
Other expense, net			1.3			--				1.3
Earnings before taxes			18.9			0.5				19.4
Inc. tax expense (benefit)			0.1			--				0.1
Net earnings		$	18.8		$	0.5			$	19.3
Earnings per share:
	Basic	$	0.49		$	0.01			$	0.51
	Diluted	$	0.49		$	0.01			$	0.51
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 39 WEEKS ENDED SEPTEMBER 28, 2014 AND SEPTEMBER 29, 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		$	4,137.7			$	--			$	4,137.7			$	4,027.3			2.7		%
Cost of services			3,461.9				--				3,461.9				3,369.3			2.8
Gross profit			675.8				--				675.8				658.0			2.7
SG&A expenses			656.5				(5.8	)			650.7				611.3			6.5
Earnings from operations			19.3				5.8				25.1				46.7			(46.7	)
Other expense, net			4.2				--				4.2				3.9			(4.6	)
Earnings before taxes			15.1				5.8				20.9				42.8			(51.4	)
Inc. tax expense (benefit)			8.4				2.1				10.5				(1.8	)		NM
Net earnings		$	6.7			$	3.7			$	10.4			$	44.6			(77.0	)	%
Earnings per share:
	Basic	$	0.17			$	0.10			$	0.27			$	1.17			(76.9	)	%
	Diluted	$	0.17			$	0.10			$	0.27			$	1.17			(76.9	)	%
			2013
			As reported				Restructuring Charges (Note 1)				Asset Impairments (Note 2)				Adjusted Earnings
Revenue from services		$	4,027.3			$	--			$	--			$	4,027.3
Cost of services			3,369.3				--				--				3,369.3
Gross profit			658.0				--				--				658.0
SG&A expenses			612.6				(1.3	)			--				611.3
Asset impairments			1.7				--				(1.7	)			--
Earnings from operations			43.7				1.3				1.7				46.7
Other expense, net			3.9				--				--				3.9
Earnings before taxes			39.8				1.3				1.7				42.8
Inc. tax expense (benefit)			(1.9	)			0.1				--				(1.8	)
Net earnings		$	41.7			$	1.2			$	1.7			$	44.6
Earnings per share:
	Basic	$	1.09			$	0.03			$	0.04			$	1.17
	Diluted	$	1.09			$	0.03			$	0.04			$	1.17
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 includes costs related to the U.S. management simplification restructuring plan, costs incurred for exiting the staffing business in Sweden, and costs related to closing branches in Australia and consolidating back office functions in Australia and New Zealand. 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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