Kelly Services® Reports 4th Quarter and Full Year 2012 Results
Earnings from operations for the fourth quarter of 2012 totaled
Earnings from operations for the full year of 2012 totaled
Diluted earnings per share from continuing operations in the fourth quarter of 2012 were
Diluted earnings per share from continuing operations for the full year of 2012 were
Commenting on the fourth quarter and full year results, Camden stated, "Given the challenging fourth quarter and anemic economic growth throughout the year, we're pleased with our performance. Our strategy is clearly yielding results. We kept expenses under control, grew our higher-margin professional and technical business, and delivered four straight quarters of positive earnings in our outsourcing and consulting group."
Camden expects persistent headwinds and mediocre job growth in the months ahead, but feels Kelly is well-positioned. "We're operating more efficiently, and we're investing in flexible solutions that meet the fastest-growing demands in the market. Skilled workers will continue to be in short supply in 2013, and companies will continue to look for ways to better manage their workforce. Kelly's professional and technical staffing capabilities, along with our expertise in talent supply chain management, provide the solution."
In conjunction with its fourth quarter and full year earnings release,
Via the Telephone:
International 1 651 291-5254
The pass code is
Via the Internet:
The call is also available via the internet through the
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, 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
About
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED DECEMBER 30, 2012 AND JANUARY 1, 2012
(UNAUDITED)
(In millions of dollars except per share data)
2012 2011 Change % Change
--------- --------- --------- --------
Revenue from services $ 1,375.4 $ 1,396.3 $ (20.9) (1.5)%
Cost of services 1,153.2 1,172.0 (18.8) (1.6)
--------- --------- --------- --------
Gross profit 222.2 224.3 (2.1) (0.9)
Selling, general and
administrative
expenses 209.3 211.6 (2.3) (1.1)
Asset impairments 3.1 - 3.1 NM
--------- --------- --------- --------
Earnings from operations 9.8 12.7 (2.9) (22.8)
Other expense, net (1.7) - (1.7) NM
--------- --------- --------- --------
Earnings from continuing
operations before taxes 8.1 12.7 (4.6) (36.2)
Income taxes (0.8) (11.4) 10.6 93.7
--------- --------- --------- --------
Earnings from continuing
operations 8.9 24.1 (15.2) (63.3)
Earnings from discontinued
operations, net of tax - - - NM
--------- --------- --------- --------
Net earnings $ 8.9 $ 24.1 $ (15.2) (63.2)%
========= ========= ========= ========
Basic earnings per share on
common stock
Earnings from continuing
operations $ 0.23 $ 0.64 $ (0.41) (64.1)%
Earnings from discontinued
operations - - - NM
Net earnings 0.23 0.64 (0.41) (64.1)
Diluted earnings per share on
common stock
Earnings from continuing
operations $ 0.23 $ 0.64 $ (0.41) (64.1)%
Earnings from discontinued
operations - - - NM
Net earnings 0.23 0.64 (0.41) (64.1)
STATISTICS:
Gross profit rate 16.2% 16.1% 0.1pts.
Selling, general and
administrative expenses:
% of revenue 15.2 15.2 0.0
% of gross profit 94.2 94.3 (0.1)
% Return:
Earnings from operations 0.7 0.9 (0.2)
Earnings from continuing
operations before taxes 0.6 0.9 (0.3)
Earnings from continuing
operations 0.6 1.7 (1.1)
Net earnings 0.6 1.7 (1.1)
Effective income tax rate (8.9)% (89.2)% 80.3pts.
Average number of shares
outstanding
(millions):
Basic 37.1 36.8
Diluted 37.1 36.8
Shares adjusted for nonvested
restricted awards
(millions):
Basic 38.3 37.8
Diluted 38.3 37.8
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 52 WEEKS ENDED DECEMBER 30, 2012 AND JANUARY 1, 2012
(UNAUDITED)
(In millions of dollars except per share data)
2012 2011 Change % Change
--------- --------- --------- --------
Revenue from services $ 5,450.5 $ 5,551.0 $ (100.5) (1.8)%
Cost of services 4,553.9 4,667.7 (113.8) (2.4)
--------- --------- --------- --------
Gross profit 896.6 883.3 13.3 1.5
Selling, general and
administrative expenses 821.2 825.6 (4.4) (0.6)
Asset impairments 3.1 - 3.1 NM
--------- --------- --------- --------
Earnings from operations 72.3 57.7 14.6 25.3
Other expense, net (3.5) (0.1) (3.4) NM
--------- --------- --------- --------
Earnings from continuing
operations before taxes 68.8 57.6 11.2 19.4
Income taxes 19.1 (7.3) 26.4 363.5
--------- --------- --------- --------
Earnings from continuing
operations 49.7 64.9 (15.2) (23.5)
Earnings (loss) from
discontinued operations, net
of tax 0.4 (1.2) 1.6 NM
--------- --------- --------- --------
Net earnings $ 50.1 $ 63.7 $ (13.6) (21.4)%
========= ========= ========= ========
Basic earnings per share on
common stock
Earnings from continuing
operations $ 1.31 $ 1.72 $ (0.41) (23.8)%
Earnings (loss) from
discontinued operations 0.01 (0.03) 0.04 NM
Net earnings 1.32 1.69 (0.37) (21.9)
Diluted earnings per share on
common stock
Earnings from continuing
operations $ 1.31 $ 1.72 $ (0.41) (23.8)%
Earnings (loss) from
discontinued operations 0.01 (0.03) 0.04 NM
Net earnings 1.32 1.69 (0.37) (21.9)
STATISTICS:
Gross profit rate 16.5% 15.9% 0.6pts.
Selling, general and
administrative expenses:
% of revenue 15.1 14.9 0.2
% of gross profit 91.6 93.5 (1.9)
% Return:
Earnings from operations 1.3 1.0 0.3
Earnings from continuing
operations before taxes 1.3 1.0 0.3
Earnings from continuing
operations 0.9 1.2 (0.3)
Net earnings 0.9 1.1 (0.2)
Effective income tax rate 27.8% (12.6)% 40.4pts.
Average number of shares
outstanding
(millions):
Basic 37.0 36.8
Diluted 37.0 36.8
Shares adjusted for nonvested
restricted awards
(millions):
Basic 38.0 37.6
Diluted 38.1 37.6
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
Fourth Quarter
------------------------------------------
Constant
Currency
2012 2011 Change Change
--------- --------- --------- --------
AMERICAS
Commercial
Revenue from services
(including fee-based
income) $ 662.3 $ 675.6 (2.0)% (2.1)%
Fee-based income 3.6 3.2 13.5 13.9
Gross profit 96.1 96.4 (0.3) (0.4)
Gross profit rate 14.5% 14.3% 0.2pts.
PT
Revenue from services
(including fee-based
income) $ 255.6 $ 243.7 4.9% 4.6%
Fee-based income 3.2 3.6 (12.3) (12.4)
Gross profit 38.9 38.0 2.4 2.2
Gross profit rate 15.2% 15.6% (0.4)pts.
Total Americas
Revenue from services
(including fee-based
income) $ 917.9 $ 919.3 (0.2)% (0.4)%
Fee-based income 6.8 6.8 (0.2) (0.1)
Gross profit 135.0 134.4 0.5 0.4
Total SG&A expenses 102.4 100.1 2.3 2.3
Earnings from operations 32.6 34.3 (4.8)
Gross profit rate 14.7% 14.6% 0.1pts.
Expense rates:
% of revenue 11.2 10.9 0.3
% of gross profit 75.8 74.5 1.3
Operating margin 3.6 3.7 (0.1)
EMEA
Commercial
Revenue from services
(including fee-based
income) $ 213.4 $ 238.8 (10.6)% (8.9)%
Fee-based income 4.9 6.0 (18.3) (17.3)
Gross profit 32.7 38.7 (15.6) (14.0)
Gross profit rate 15.3% 16.2% (0.9)pts.
PT
Revenue from services
(including fee-based
income) $ 43.0 $ 44.9 (4.2)% (2.1)%
Fee-based income 3.7 4.2 (12.7) (11.3)
Gross profit 10.3 11.3 (9.6) (7.8)
Gross profit rate 23.9% 25.3% (1.4)pts.
Total EMEA
Revenue from services
(including fee-based
income) $ 256.4 $ 283.7 (9.6)% (7.8)%
Fee-based income 8.6 10.2 (16.0) (14.8)
Gross profit 43.0 50.0 (14.3) (12.6)
SG&A expenses excluding
restructuring charges 42.6 46.4 (8.3)
Restructuring charges 1.3 - NM
Total SG&A expenses 43.9 46.4 (5.6) (4.1)
Earnings from operations (0.9) 3.6 NM
Earnings from operations
excluding restructuring
charges 0.4 3.6 (91.7)
Gross profit rate 16.7% 17.7% (1.0)pts.
Expense rates (excluding
restructuring charges):
% of revenue 16.6 16.4 0.2
% of gross profit 99.3 92.8 6.5
Operating margin (excluding
restructuring charges) 0.1 1.3 (1.2)
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
Fourth Quarter
------------------------------------------
Constant
Currency
2012 2011 Change Change
--------- --------- --------- --------
APAC
Commercial
Revenue from services
(including fee-based
income) $ 84.9 $ 93.8 (9.5)% (12.4)%
Fee-based income 2.4 2.9 (18.5) (19.2)
Gross profit 11.7 13.2 (11.2) (13.6)
Gross profit rate 13.8% 14.1% (0.3)pts.
PT
Revenue from services
(including fee-based
income) $ 11.7 $ 12.3 (4.6)% (6.8)%
Fee-based income 2.9 3.1 (5.6) (8.0)
Gross profit 4.3 4.4 (1.5) (4.0)
Gross profit rate 36.7% 35.5% 1.2pts.
Total APAC
Revenue from services
(including fee-based
income) $ 96.6 $ 106.1 (9.0)% (11.7)%
Fee-based income 5.3 6.0 (11.9) (13.4)
Gross profit 16.0 17.6 (8.8) (11.2)
Total SG&A expenses 15.9 17.9 (11.0) (13.3)
Earnings from operations 0.1 (0.3) NM
Gross profit rate 16.6% 16.6% - pts.
Expense rates:
% of revenue 16.5 16.9 (0.4)
% of gross profit 99.3 101.7 (2.4)
Operating margin 0.1 (0.3) 0.4
OCG
Revenue from services
(including fee-based
income) $ 113.3 $ 94.4 20.1% 20.0%
Fee-based income 13.8 10.8 26.9 27.1
Gross profit 29.0 23.0 26.3 26.3
Total SG&A expenses 25.8 22.2 16.1 16.2
Earnings from operations 3.2 0.8 302.0
Gross profit rate 25.6% 24.3% 1.3pts.
Expense rates:
% of revenue 22.7 23.5 (0.8)
% of gross profit 88.7 96.4 (7.7)
Operating margin 2.9 0.9 2.0
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
December Year to Date
------------------------------------------
Constant
Currency
2012 2011 Change Change
--------- --------- --------- --------
AMERICAS
Commercial
Revenue from services
(including fee-based
income) $ 2,642.4 $ 2,660.9 (0.7)% -%
Fee-based income 15.7 12.0 30.7 33.3
Gross profit 388.2 375.3 3.4 4.1
Gross profit rate 14.7% 14.1% 0.6pts.
PT
Revenue from services
(including fee-based
income) $ 1,029.7 $ 982.8 4.8% 4.8%
Fee-based income 14.5 13.3 8.5 8.6
Gross profit 159.7 147.8 8.0 8.1
Gross profit rate 15.5% 15.0% 0.5pts.
Total Americas
Revenue from services
(including fee-based
income) $ 3,672.1 $ 3,643.7 0.8% 1.3%
Fee-based income 30.2 25.3 19.0 20.3
Gross profit 547.9 523.1 4.7 5.2
Total SG&A expenses 405.8 396.4 2.4 3.0
Earnings from operations 142.1 126.7 12.0
Gross profit rate 14.9% 14.4% 0.5pts.
Expense rates:
% of revenue 11.1 10.9 0.2
% of gross profit 74.1 75.8 (1.7)
Operating margin 3.9 3.5 0.4
EMEA
Commercial
Revenue from services
(including fee-based
income) $ 854.6 $ 990.1 (13.7)% (8.0)%
Fee-based income 22.4 24.9 (10.1) (4.2)
Gross profit 133.8 160.3 (16.6) (10.9)
Gross profit rate 15.7% 16.2% (0.5)pts.
PT
Revenue from services
(including fee-based
income) $ 168.3 $ 178.9 (5.9)% 0.4%
Fee-based income 16.8 19.2 (12.7) (7.3)
Gross profit 43.0 47.4 (9.4) (3.4)
Gross profit rate 25.5% 26.5% (1.0)pts.
Total EMEA
Revenue from services
(including fee-based
income) $ 1,022.9 $ 1,169.0 (12.5)% (6.7)%
Fee-based income 39.2 44.1 (11.2) (5.5)
Gross profit 176.8 207.7 (14.9) (9.2)
SG&A expenses excluding
restructuring charges 169.0 186.9 (9.7)
Restructuring charges (0.9) 2.8 (132.3)
Total SG&A expenses 168.1 189.7 (11.5) (6.0)
Earnings from operations 8.7 18.0 (51.6)
Earnings from operations
excluding restructuring
charges 7.8 20.8 (62.5)
Gross profit rate 17.3% 17.8% (0.5)pts.
Expense rates (excluding
restructuring charges):
% of revenue 16.5 16.0 0.5
% of gross profit 95.6 90.1 5.5
Operating margin (excluding
restructuring charges) 0.8 1.8 (1.0)
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
December Year to Date
------------------------------------------
Constant
Currency
2012 2011 Change Change
--------- --------- --------- --------
APAC
Commercial
Revenue from services
(including fee-based
income) $ 343.2 $ 397.6 (13.7)% (13.2)%
Fee-based income 11.7 13.9 (15.7) (13.4)
Gross profit 50.1 55.7 (10.0) (9.3)
Gross profit rate 14.6% 14.0% 0.6pts.
PT
Revenue from services
(including fee-based income) $ 51.6 $ 51.4 0.5% 1.2%
Fee-based income 15.8 15.3 3.1 2.9
Gross profit 21.0 20.6 1.9 2.0
Gross profit rate 40.6% 40.1% 0.5pts.
Total APAC
Revenue from services
(including fee-based
income) $ 394.8 $ 449.0 (12.1)% (11.5)%
Fee-based income 27.5 29.2 (5.8) (4.8)
Gross profit 71.1 76.3 (6.8) (6.3)
Total SG&A expenses 73.4 77.0 (4.7) (4.1)
Earnings from operations (2.3) (0.7) (207.4)
Gross profit rate 18.0% 17.0% 1.0pts.
Expense rates:
% of revenue 18.6 17.2 1.4
% of gross profit 103.3 101.0 2.3
Operating margin (0.6) (0.2) (0.4)
OCG
Revenue from services
(including fee-based
income) $ 396.1 $ 317.3 24.8% 25.5%
Fee-based income 51.4 39.5 30.0 32.1
Gross profit 104.0 78.8 32.0 33.5
Total SG&A expenses 95.4 81.4 17.0 18.6
Earnings from operations 8.6 (2.6) NM
Gross profit rate 26.3% 24.8% 1.5pts.
Expense rates:
% of revenue 24.1 25.7 (1.6)
% of gross profit 91.6 103.4 (11.8)
Operating margin 2.2 (0.8) 3.0
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)
Dec. 30, Jan. 1,
2012 2012
----------- -----------
Current Assets
Cash and equivalents $ 76.3 $ 81.0
Trade accounts receivable, less allowances of
$10.4 and $13.4, respectively 1,013.9 944.9
Prepaid expenses and other current assets 57.5 50.6
Deferred taxes 44.9 38.2
----------- -----------
Total current assets 1,192.6 1,114.7
Property and Equipment, Net 89.9 90.6
Noncurrent Deferred Taxes 82.8 94.1
Goodwill, Net 89.5 90.2
Other Assets 180.9 152.1
----------- -----------
Total Assets $ 1,635.7 $ 1,541.7
=========== ===========
Current Liabilities
Short-term borrowings $ 64.1 $ 96.3
Accounts payable and accrued liabilities 295.6 237.2
Accrued payroll and related taxes 264.5 271.4
Accrued insurance 32.8 31.5
Income and other taxes 65.3 61.3
----------- -----------
Total current liabilities 722.3 697.7
Noncurrent Liabilities
Accrued insurance 43.5 53.5
Accrued retirement benefits 111.0 91.1
Other long-term liabilities 17.9 23.7
----------- -----------
Total noncurrent liabilities 172.4 168.3
Stockholders' Equity
Common stock 40.1 40.1
Treasury stock (61.6) (66.9)
Paid-in capital 27.1 28.8
Earnings invested in the business 700.0 657.5
Accumulated other comprehensive income 35.4 16.2
----------- -----------
Total stockholders' equity 741.0 675.7
----------- -----------
Total Liabilities and Stockholders' Equity $ 1,635.7 $ 1,541.7
=========== ===========
STATISTICS:
Working Capital $ 470.3 $ 417.0
Current Ratio 1.7 1.6
Debt-to-capital % 8.0% 12.5%
Global Days Sales Outstanding 53 52
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 52 WEEKS ENDED DECEMBER 30, 2012 AND JANUARY 1, 2012
(UNAUDITED)
(In millions of dollars)
2012 2011
--------- ---------
Cash flows from operating activities
Net earnings $ 50.1 $ 63.7
Noncash adjustments:
Impairment of assets 3.1 -
Depreciation and amortization 22.3 31.4
Provision for bad debts 1.1 4.3
Stock-based compensation 4.8 4.6
Other, net 1.3 (2.6)
Changes in operating assets and liabilities (21.6) (82.3)
--------- ---------
Net cash from operating activities 61.1 19.1
--------- ---------
Cash flows from investing activities
Capital expenditures (21.5) (15.4)
Investment in equity affiliate (6.6) -
Acquisition of companies, net of cash received - (6.5)
Other investing activities - 1.2
--------- ---------
Net cash from investing activities (28.1) (20.7)
--------- ---------
Cash flows from financing activities
Net change in short-term borrowings (31.9) 79.2
Repayment of debt - (68.3)
Dividend payments (7.6) (3.8)
Other financing activities 0.1 (1.0)
--------- ---------
Net cash from financing activities (39.4) 6.1
--------- ---------
Effect of exchange rates on cash and equivalents 1.7 (4.0)
--------- ---------
Net change in cash and equivalents (4.7) 0.5
Cash and equivalents at beginning of period 81.0 80.5
--------- ---------
Cash and equivalents at end of period $ 76.3 $ 81.0
========= =========
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
Fourth Quarter (Commercial, PT and OCG)
---------------------------------------
% Change
Constant
2012 2011 US$ Currency
--------- --------- -------- --------
Americas
United States $ 877.9 $ 883.8 (0.7)% (0.7)%
Canada 60.5 60.9 (0.8) (3.9)
Mexico 35.3 26.2 34.8 27.7
Puerto Rico 23.4 25.9 (9.6) (9.6)
Brazil 14.0 - NM NM
--------- ---------
Total Americas 1,011.1 996.8 1.4 1.3
EMEA
France 58.8 71.2 (17.3) (14.1)
Switzerland 61.2 62.0 (1.4) 0.9
Russia 33.9 33.4 1.7 1.2
United Kingdom 25.6 29.1 (11.9) (13.8)
Portugal 19.0 21.6 (12.2) (8.8)
Germany 16.4 20.1 (18.5) (15.2)
Norway 15.5 17.8 (12.9) (13.9)
Italy 14.6 17.7 (17.6) (14.3)
Other 19.0 17.7 7.1 9.3
--------- ---------
Total EMEA 264.0 290.6 (9.2) (7.4)
APAC
Australia 33.9 35.1 (3.4) (5.8)
Singapore 26.5 24.4 8.4 2.9
Malaysia 18.0 17.6 2.6 (0.5)
New Zealand 12.9 13.0 (0.4) (6.0)
Other 9.0 18.8 (52.6) (50.3)
--------- ---------
Total APAC 100.3 108.9 (7.9) (10.7)
Total Kelly Services, Inc. $ 1,375.4 $ 1,396.3 (1.5)% (1.5)%
========= =========
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
December Year to Date (Commercial, PT
and OCG)
---------------------------------------
% Change
Constant
2012 2011 US$ Currency
--------- --------- -------- --------
Americas
United States $ 3,464.2 $ 3,445.4 0.5% 0.5%
Canada 243.9 247.7 (1.6) (0.5)
Mexico 117.7 106.0 11.0 16.7
Puerto Rico 99.7 96.6 3.3 3.3
Brazil 60.7 - NM NM
--------- ---------
Total Americas 3,986.2 3,895.7 2.3 2.8
EMEA
France 243.0 295.9 (17.9) (11.0)
Switzerland 235.6 239.8 (1.8) 4.7
Russia 131.0 141.8 (7.6) (2.4)
United Kingdom 104.9 121.6 (13.8) (12.7)
Portugal 75.0 87.7 (14.5) (7.3)
Germany 70.3 82.8 (15.1) (7.9)
Norway 66.3 68.7 (3.5) 0.5
Italy 59.1 71.0 (16.7) (9.9)
Other 67.4 85.1 (20.8) (14.5)
--------- ---------
Total EMEA 1,052.6 1,194.4 (11.9) (6.0)
APAC
Australia 135.5 145.4 (6.9) (7.2)
Singapore 101.6 103.0 (1.4) (2.0)
Malaysia 72.9 72.1 1.2 2.1
New Zealand 52.4 50.8 3.2 1.0
Other 49.3 89.6 (45.0) (40.2)
--------- ---------
Total APAC 411.7 460.9 (10.7) (10.1)
Total Kelly Services, Inc. $ 5,450.5 $ 5,551.0 (1.8)% (0.2)%
========= =========
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 13 WEEKS ENDED DECEMBER 30, 2012 AND JANUARY 1, 2012
(UNAUDITED)
(In millions of dollars except per share data)
2012 2011
-------------------------------------------- --------
Loss on
Restruc- Asset Equity
turing Impair- Invest-
As Charges ments ment Adjusted %
reported (Note 1) (Note 2) (Note 3) Earnings Earnings Change
-------- -------- -------- -------- -------- -------- ------
Revenue from
services $1,375.4 $ - $ - $ - $1,375.4 $1,396.3 (1.5)%
Cost of
services 1,153.2 - - - 1,153.2 1,172.0 (1.6)
-------- -------- -------- -------- -------- -------- ------
Gross profit 222.2 - - - 222.2 224.3 (0.9)
Selling,
general and
administrative
expenses 209.3 (1.3) - - 208.0 211.6 (1.7)
Asset
impairments 3.1 - (3.1) - - - -
-------- -------- -------- -------- -------- -------- ------
Earnings from
operations 9.8 1.3 3.1 - 14.2 12.7 11.8
Other expense,
net (1.7) - - 0.7 (1.0) - NM
-------- -------- -------- -------- -------- -------- ------
Earnings from
continuing
operations
before taxes 8.1 1.3 3.1 0.7 13.2 12.7 4.1
Income taxes (0.8) 0.5 1.2 (0.3) 0.6 (11.4)(106.5)
-------- -------- -------- -------- -------- -------- ------
Earnings from
continuing
operations $ 8.9 $ 0.8 $ 1.9 $ 1.0 $ 12.6 $ 24.1 (48.1)%
======== ======== ======== ======== ======== ======== ======
Earnings per
share from
continuing
operations:
Basic $ 0.23 $ 0.02 $ 0.05 $ 0.03 $ 0.33 $ 0.64 (48.4)%
Diluted $ 0.23 $ 0.02 $ 0.05 $ 0.03 $ 0.33 $ 0.64 (48.4)%
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 52 WEEKS ENDED DECEMBER 30, 2012 AND JANUARY 1, 2012
(UNAUDITED)
(In millions of dollars except per share data)
2012 2011
-------------------------------------------- --------
Loss on
Restruc- Asset Equity
turing Impair- Invest-
As Charges ments ment Adjusted Adjusted %
reported (Note 1) (Note 2) (Note 3) Earnings Earnings Change
-------- -------- -------- -------- -------- -------- ------
Revenue from
services $5,450.5 $ - $ - $ - $5,450.5 $5,551.0 (1.8)%
Cost of
services 4,553.9 - - - 4,553.9 4,667.7 (2.4)
-------- -------- -------- -------- -------- -------- ------
Gross profit 896.6 - - - 896.6 883.3 1.5
Selling,
general and
administrative
expenses 821.2 0.9 - - 822.1 822.8 (0.1)
Asset
impairments 3.1 - (3.1) - - - -
-------- -------- -------- -------- -------- -------- ------
Earnings from
operations 72.3 (0.9) 3.1 - 74.5 60.5 23.2
Other expense,
net (3.5) - - 0.7 (2.8) (0.1) NM
-------- -------- -------- -------- -------- -------- ------
Earnings from
continuing
operations
before taxes 68.8 (0.9) 3.1 0.7 71.7 60.4 18.8
Income taxes 19.1 0.5 1.2 (0.3) 20.5 (7.3)(383.6)
-------- -------- -------- -------- -------- -------- ------
Earnings from
continuing
operations $ 49.7 $ (1.4)$ 1.9 $ 1.0 $ 51.2 $ 67.7 (24.4)%
======== ======== ======== ======== ======== ======== ======
Earnings per
share from
continuing
operations:
Basic $ 1.31 $ (0.04)$ 0.05 $ 0.03 $ 1.34 $ 1.80 (25.6)%
Diluted $ 1.31 $ (0.04)$ 0.05 $ 0.03 $ 1.34 $ 1.80 (25.6)%
2011
---------------------------------
Restructuring
As Charges Adjusted
reported (Note 1) Earnings
-------- ------------- --------
Revenue from services $5,551.0 $ - $5,551.0
Cost of services 4,667.7 - 4,667.7
-------- ------------- --------
Gross profit 883.3 - 883.3
Selling, general and administrative
expenses 825.6 (2.8) 822.8
Asset impairments - - -
-------- ------------- --------
Earnings from operations 57.7 2.8 60.5
Other expense, net (0.1) - (0.1)
-------- ------------- --------
Earnings from continuing operations
before taxes 57.6 2.8 60.4
Income taxes (7.3) - (7.3)
-------- ------------- --------
Earnings from continuing operations $ 64.9 $ 2.8 $ 67.7
======== ============= ========
Earnings per share from continuing
operations:
Basic $ 1.72 $ 0.07 $ 1.80
Diluted $ 1.72 $ 0.07 $ 1.80
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, asset
impairment charges and loss on equity investment is useful to understand the
Company's fiscal 2012 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 2012, restructuring charges relate to severance and lease termination
costs for EMEA Commercial branches which are in the process of closing,
along with revisions of the estimated lease termination costs for EMEA
Commercial branches that closed in prior years. In 2011, 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 relate to the write-off of previously
capitalized costs associated with the PeopleSoft billing system.
(3) Loss on equity investment represents the difference between the fair
value and book value of the North Asia entities contributed by the Company
to the investment in TS Kelly Workforce Solutions.
ANALYST CONTACT:James Polehna (248) 244-4586 james_polehna@kellyservices.com MEDIA CONTACT:Jane Stehney (248) 244-5630 jane_stehney@kellyservices.com
Source:
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