Press Release Details

 

TROY, MI -- (Marketwired) -- 08/10/16 -- Second Quarter Highlights

• Total Revenue declines 0.7% (up 0.6% in constant currency)
• Gross Profit up 3.7% (up 4.8% in constant currency); Gross Profit Rate up 70 basis points
• Earnings per share of $0.23 (Adjusted EPS of $0.29) versus $0.18, a 28% increase
• TS Kelly Asia Pacific Joint Venture completed, forming one of the region's largest workforce solutions providers

Kelly Services (NASDAQ: KELYA)(NASDAQ: KELYB), a global leader in providing workforce solutions, today announced results for the second quarter of 2016.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the second quarter of 2016 totaled $1.4 billion, a 0.7% decrease (a 0.6% increase on a constant currency basis) compared to the corresponding quarter of 2015.

Earnings from operations for the second quarter of 2016 totaled $9.9 million, compared to $11.5 million reported for the second quarter of 2015. Included in the results of operations in the second quarter of 2016 are restructuring charges of $3.4 million. Excluding the restructuring charges, earnings from operations were $13.3 million in the second quarter of 2016.

Diluted earnings per share in the second quarter of 2016 were $0.23 compared to $0.18 per share in the second quarter of 2015. Excluding restructuring charges, earnings per share were $0.29 in the second quarter of 2016.

Commenting on the second quarter, Camden stated, "We are pleased with Kelly's ability to deliver strategic growth, improve Gross Profit, and increase shareholder value in the second quarter. The finalization of our Joint Venture in APAC positions us for growth in staffing-related services while enabling us to accelerate investments in OCG, which remains a Kelly-owned entity." Referring to the apparent slow-down in U.S. staffing demand facing the workforce solutions industry in the second quarter, Camden commented, "Kelly responded quickly to flat top-line growth in the Americas by managing Gross Profit, adjusting our operating costs, and delivering solid leverage. We remain committed to increasing shareholder value by efficiently delivering the best workforce solutions for our customers around the world."

Kelly also reported that on August 9, its board of directors declared a dividend of $0.075 per share. The dividend is payable September 2, 2016 to shareholders of record as of the close of business on August 23, 2016.

In conjunction with its second quarter earnings release, Kelly Services has published a financial presentation on the Investor Relations page of our public website and will host a conference call at 9:00 a.m. (ET) on August 10 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, the risk of damage to our brand, the risk our intellectual assets could be infringed upon or compromised, our ability to successfully develop new service offerings, our exposure to risks associated with services outside traditional staffing, including business process outsourcing, our increasing dependency on third parties for the execution of critical functions, the risks associated with past and future acquisitions, exposure to risks associated with investments in equity affiliates, 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 full-time employees to lead complex talent supply chain sales and operations, availability of temporary workers with appropriate skills required by customers, liabilities for employment-related claims and losses, including class action lawsuits and collective actions, the risk of cyber attacks or other breaches of network or information technology security as well as risks associated with compliance on data privacy, 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 developments or operational circumstances, unexpected changes in claim trends on workers' compensation, disability and medical benefit plans, the 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 ), the risk of additional tax or unclaimed property liabilities in excess of our estimates, our ability to maintain specified financial covenants in our bank facilities to continue to access credit markets, and other risks, uncertainties and factors discussed in this release and in the Company's filings with the Securities and Exchange Commission. Actual results may differ materially from any forward looking statements contained herein, and we have no intention to update these statements.

About Kelly Services ^®

As a global leader in providing workforce solutions, Kelly Services, Inc. (NASDAQ: KELYA)(NASDAQ: KELYB) and its subsidiaries, offer a comprehensive array of outsourcing and consulting services as well as world-class staffing on a temporary, temporary-to-hire, and direct-hire basis. In 2016, the Company is commemorating 70 years of industry leadership. Kelly® has a role in managing employment opportunities for more than one million workers around the globe by employing 550,000 of these individuals directly with the remaining workers engaged through its talent supply chain network of supplier partners. Revenue in 2015 was $5.5 billion. Visit kellyservices.com and connect with us on Facebook, LinkedIn, & Twitter.

KLYA-FIN

 

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED JULY 3, 2016 AND JUNE 28, 2015
(UNAUDITED)
(In millions of dollars except per share data)
																	%				CC %
				2016				2015				Change					Change				Change
Revenue from services			$	1,375.5		$		1,385.0		$		(9.5	)				(0.7	)	%		0.6	%
Cost of services				1,145.0				1,162.7				(17.7	)				(1.5	)
Gross profit				230.5				222.3				8.2					3.7				4.8
Selling, general and administrative expenses				220.6				210.8				9.8					4.6				5.7
Earnings from operations				9.9				11.5				(1.6	)				(13.9	)
Other expense, net				0.2				1.0				(0.8	)				(74.8	)
Earnings before taxes				9.7				10.5				(0.8	)				(8.2	)
Income tax expense				0.8				3.7				(2.9	)				(78.5	)
Net earnings			$	8.9		$		6.8		$		2.1					30.2		%
Basic earnings per share			$	0.23		$		0.18		$		0.05					27.8		%
Diluted earnings per share			$	0.23		$		0.18		$		0.05					27.8		%
STATISTICS:
Gross profit rate				16.8		%		16.1		%		0.7			pts.
Selling, general and administrative expenses:
	% of revenue			16.0				15.2				0.8
	% of gross profit			95.7				94.8				0.9
% Return:
	Earnings from operations			0.7				0.8				(0.1	)
	Earnings before taxes			0.7				0.8				(0.1	)
	Net earnings			0.6				0.5				0.1
Effective income tax rate				8.3		%		35.3		%		(27.0	)		pts.
Average number of shares outstanding (millions):
	Basic			38.0				37.7
	Diluted			38.3				37.8
Shares adjusted for nonvested restricted awards (millions):
	Basic			39.0				38.8
	Diluted			39.2				38.8

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 26 WEEKS ENDED JULY 3, 2016 AND JUNE 28, 2015
(UNAUDITED)
(In millions of dollars except per share data)
																	%				CC %
				2016				2015				Change					Change				Change
Revenue from services			$	2,724.6		$		2,705.6		$		19.0					0.7		%		2.5	%
Cost of services				2,261.4				2,263.0				(1.6	)				(0.1	)
Gross profit				463.2				442.6				20.6					4.6				6.2
Selling, general and administrative expenses				438.6				419.0				19.6					4.7				6.2
Earnings from operations				24.6				23.6				1.0					4.2
Other expense, net				1.0				3.5				(2.5	)				(70.9	)
Earnings before taxes				23.6				20.1				3.5					17.2
Income tax expense				3.5				9.6				(6.1	)				(63.4	)
Net earnings			$	20.1		$		10.5		$		9.6					90.5		%
Basic earnings per share			$	0.52		$		0.27		$		0.25					92.6		%
Diluted earnings per share			$	0.51		$		0.27		$		0.24					88.9		%
STATISTICS:
Gross profit rate				17.0		%		16.4		%		0.6			pts.
Selling, general and administrative expenses:
	% of revenue			16.1				15.5				0.6
	% of gross profit			94.7				94.7				-
% Return:
	Earnings from operations			0.9				0.9				-
	Earnings before taxes			0.9				0.7				0.2
	Net earnings			0.7				0.4				0.3
Effective income tax rate				14.9		%		47.6		%		(32.7	)		pts.
Average number of shares outstanding (millions):
	Basic			38.0				37.7
	Diluted			38.2				37.8
Shares adjusted for nonvested restricted awards (millions):
	Basic			39.0				38.8
	Diluted			39.2				38.8

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
						Second Quarter
													%				CC %
						2016				2015			Change				Change
AMERICAS
	Commercial
		Revenue from services			$	635.3			$	651.3			(2.5	)	%		(1.3	)	%
		Staffing fee-based income included in revenue from services				3.6				3.5			2.9				3.7
		Gross profit				98.9				95.9			3.2				4.2
		Gross profit rate				15.6	%			14.7	%		0.9		pts.
	PT
		Revenue from services			$	241.6			$	246.2			(1.9	)	%		(1.7	)	%
		Staffing fee-based income included in revenue from services				4.3				4.9			(11.1	)			(10.8	)
		Gross profit				41.3				42.1			(2.0	)			(1.9	)
		Gross profit rate				17.1	%			17.1	%		-		pts.
	Total Americas
		Revenue from services			$	876.9			$	897.5			(2.3	)	%		(1.4	)	%
		Staffing fee-based income included in revenue from services				7.9				8.4			(5.2	)			(4.7	)
		Gross profit				140.2				138.0			1.6				2.3
		SG&A expenses excluding restructuring charges				111.7				112.6			(0.8	)			(0.2	)
		Restructuring charges				2.2				-			NM
		Total SG&A expenses				113.9				112.6			1.2				1.8
		Earnings from operations				26.3				25.4			3.6
		Earnings from operations excluding restructuring charges				28.5				25.4			12.2
		Gross profit rate				16.0	%			15.4	%		0.6		pts.
		Expense rates (excluding restructuring charges):
			% of revenue			12.7				12.5			0.2
			% of gross profit			79.6				81.6			(2.0	)
		Return on sales (excluding restructuring charges)				3.3				2.8			0.5
EMEA
	Commercial
		Revenue from services			$	197.1			$	195.7			0.8		%		3.0		%
		Staffing fee-based income included in revenue from services				3.7				3.2			16.6				21.4
		Gross profit				27.1				26.8			1.5				3.4
		Gross profit rate				13.8	%			13.7	%		0.1		pts.
	PT
		Revenue from services			$	43.1			$	42.9			0.5		%		2.2		%
		Staffing fee-based income included in revenue from services				2.5				2.5			(4.4	)			(1.0	)
		Gross profit				8.7				9.1			(5.5	)			(3.6	)
		Gross profit rate				20.0	%			21.2	%		(1.2	)	pts.
	Total EMEA
		Revenue from services			$	240.2			$	238.6			0.7		%		2.8		%
		Staffing fee-based income included in revenue from services				6.2				5.7			7.4				11.6
		Gross profit				35.8				35.9			(0.3	)			1.6
		SG&A expenses excluding restructuring charges				32.0				34.2			(6.3	)			(3.9	)
		Restructuring charges				1.2				-			NM
		Total SG&A expenses				33.2				34.2			(3.0	)			(0.6	)
		Earnings from operations				2.6				1.7			54.4
		Earnings from operations excluding restructuring charges				3.8				1.7			121.7
		Gross profit rate				14.9	%			15.0	%		(0.1	)	pts.
		Expense rates (excluding restructuring charges):
			% of revenue			13.3				14.3			(1.0	)
			% of gross profit			89.6				95.3			(5.7	)
		Return on sales (excluding restructuring charges)				1.5				0.7			0.8

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
						Second Quarter
													%				CC %
						2016				2015			Change				Change
APAC
	Commercial
		Revenue from services			$	87.9			$	90.3			(2.6	)	%		1.6		%
		Staffing fee-based income included in revenue from services				1.7				1.8			(7.1	)			(3.5	)
		Gross profit				10.3				11.2			(8.6	)			(4.7	)
		Gross profit rate				11.7	%			12.4	%		(0.7	)	pts.
	PT
		Revenue from services			$	9.2			$	10.3			(11.4	)	%		(7.8	)	%
		Staffing fee-based income included in revenue from services				1.4				1.5			(6.1	)			(1.1	)
		Gross profit				2.5				2.7			(7.8	)			(3.6	)
		Gross profit rate				27.4	%			26.4	%		1.0		pts.
	Total APAC
		Revenue from services			$	97.1			$	100.6			(3.5	)	%		0.6		%
		Staffing fee-based income included in revenue from services				3.1				3.3			(6.6	)			(2.4	)
		Gross profit				12.8				13.9			(8.4	)			(4.5	)
		Total SG&A expenses				11.6				12.3			(5.4	)			(1.5	)
		Earnings from operations				1.2				1.6			(31.4	)
		Gross profit rate				13.2	%			13.9	%		(0.7	)	pts.
		Expense rates:
			% of revenue			12.0				12.2			(0.2	)
			% of gross profit			91.2				88.3			2.9
		Return on sales				1.2				1.6			(0.4	)
OCG
		Revenue from services			$	173.9			$	165.0			5.4		%		5.9		%
		Gross profit				42.8				35.7			20.1				20.9
		Total SG&A expenses				38.0				32.2			18.1				19.0
		Earnings from operations				4.8				3.5			38.2
		Gross profit rate				24.6	%			21.6	%		3.0		pts.
		Expense rates:
		% of revenue				21.8				19.5			2.3
		% of gross profit				88.7				90.2			(1.5	)
		Return on sales				2.8				2.1			0.7
Corporate
		Total SG&A expenses			$	25.0			$	20.7			20.5		%

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
						June Year to Date
													%				CC %
						2016				2015			Change				Change
AMERICAS
	Commercial
		Revenue from services			$	1,283.9			$	1,292.7			(0.7	)	%		0.9		%
		Staffing fee-based income included in revenue from services				7.2				7.0			3.0				4.0
		Gross profit				201.0				193.7			3.8				5.1
		Gross profit rate				15.7	%			15.0	%		0.7		pts.
	PT
		Revenue from services			$	478.7			$	479.0			(0.1	)	%		0.1		%
		Staffing fee-based income included in revenue from services				9.3				8.4			10.9				12.1
		Gross profit				82.9				81.0			2.3				2.5
		Gross profit rate				17.3	%			16.9	%		0.4		pts.
	Total Americas
		Revenue from services			$	1,762.6			$	1,771.7			(0.5	)	%		0.7		%
		Staffing fee-based income included in revenue from services				16.5				15.4			7.3				8.4
		Gross profit				283.9				274.7			3.3				4.3
		SG&A expenses excluding restructuring charges				228.3				226.1			1.0				1.9
		Restructuring charges				2.2				-			NM
		Total SG&A expenses				230.5				226.1			1.9				2.9
		Earnings from operations				53.4				48.6			9.9
		Earnings from operations excluding restructuring charges				55.6				48.6			14.4
		Gross profit rate				16.1	%			15.5	%		0.6		pts.
		Expense rates (excluding restructuring charges):
			% of revenue			13.0				12.8			0.2
			% of gross profit			80.4				82.3			(1.9	)
		Return on sales (excluding restructuring charges)				3.2				2.7			0.5
EMEA
	Commercial
		Revenue from services			$	372.6			$	374.0			(0.4	)	%		2.9		%
		Staffing fee-based income included in revenue from services				7.1				6.7			6.5				11.5
		Gross profit				50.7				51.4			(1.3	)			1.7
		Gross profit rate				13.6	%			13.7	%		(0.1	)	pts.
	PT
		Revenue from services			$	84.7			$	83.2			1.8		%		4.7		%
		Staffing fee-based income included in revenue from services				5.1				5.1			(0.5	)			4.3
		Gross profit				17.4				17.8			(2.4	)			0.8
		Gross profit rate				20.5	%			21.4	%		(0.9	)	pts.
	Total EMEA
		Revenue from services			$	457.3			$	457.2			-		%		3.3		%
		Staffing fee-based income included in revenue from services				12.2				11.8			3.5				8.4
		Gross profit				68.1				69.2			(1.6	)			1.5
		SG&A expenses excluding restructuring charges				62.3				67.7			(7.8	)			(4.7	)
		Restructuring charges				1.2				-			NM
		Total SG&A expenses				63.5				67.7			(6.2	)			(3.0	)
		Earnings from operations				4.6				1.5			205.2
		Earnings from operations excluding restructuring charges				5.8				1.5			280.2
		Gross profit rate				14.9	%			15.1	%		(0.2	)	pts.
		Expense rates (excluding restructuring charges):
			% of revenue			13.6				14.8			(1.2	)
			% of gross profit			91.6				97.8			(6.2	)
		Return on sales (excluding restructuring charges)				1.2				0.3			0.9

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
						June Year to Date
																	%				CC %
						2016						2015					Change				Change
APAC
		Commercial
		Revenue from services			$	170.7					$	175.9					(2.9	)	%		3.1		%
		Staffing fee-based income included in revenue from services				2.9						3.3					(12.1	)			(7.1	)
		Gross profit				23.3						24.2					(3.7	)			1.2
		Gross profit rate				13.7			%			13.8			%		(0.1	)	pts.
		PT
		Revenue from services			$	18.3					$	20.8					(12.2	)	%		(7.0	)	%
		Staffing fee-based income included in revenue from services				2.8						3.1					(9.7	)			(3.3	)
		Gross profit				5.0						5.6					(10.7	)			(4.9	)
		Gross profit rate				27.4			%			26.9			%		0.5		pts.
	Total APAC
		Revenue from services			$	189.0					$	196.7					(3.9	)	%		2.1		%
		Staffing fee-based income included in revenue from services				5.7						6.4					(10.9	)			(5.2	)
		Gross profit				28.3						29.8					(5.0	)			0.1
		Total SG&A expenses				22.7						24.4					(7.0	)			(1.4	)
		Earnings from operations				5.6						5.4					3.8
		Gross profit rate				15.0			%			15.2			%		(0.2	)	pts.
		Expense rates:
			% of revenue			12.0						12.4					(0.4	)
			% of gross profit			80.3						82.0					(1.7	)
		Return on sales				3.0						2.7					0.3
OCG
		Revenue from services			$	342.1					$	314.5					8.8		%		9.5		%
		Gross profit				85.1						71.2					19.6				20.6
		Total SG&A expenses				74.9						64.9					15.5				16.7
		Earnings from operations				10.2						6.3					61.3
		Gross profit rate				24.9			%			22.6			%		2.3		pts.
		Expense rates:
			% of revenue			21.9						20.6					1.3
			% of gross profit			88.0						91.1					(3.1	)
		Return on sales				3.0						2.0					1.0
Corporate
		Total SG&A expenses			$	49.2					$	38.2					28.8		%

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)
				July 3, 2016				Jan. 3, 2016				June 28, 2015
Current Assets
	Cash and equivalents		$	33.3		$		42.2			$	48.7
	Trade accounts receivable, less allowances of
	$11.0, $10.5 and $9.4, respectively			1,079.8				1,139.1				1,152.3
	Prepaid expenses and other current assets			47.8				45.8				50.6
	Deferred taxes			-				-				35.8
	Current assets held for sale			94.0				-				-
	Total current assets			1,254.9				1,227.1				1,287.4
Noncurrent Assets
	Property and equipment, net			81.5				88.9				88.6
	Noncurrent deferred taxes			197.0				189.3				144.6
	Goodwill, net			88.3				90.3				90.3
	Other assets			368.4				344.0				321.7
	Total noncurrent assets			735.2				712.5				645.2
Total Assets			$	1,990.1		$		1,939.6			$	1,932.6
Current Liabilities
	Short-term borrowings		$	26.9		$		55.5			$	89.9
	Accounts payable and accrued liabilities			403.7				405.5				380.4
	Accrued payroll and related taxes			259.2				268.1				296.5
	Accrued insurance			27.1				26.7				27.1
	Income and other taxes			50.9				60.0				62.8
	Current liabilities held for sale			48.0				-				-
	Total current liabilities			815.8				815.8				856.7
Noncurrent Liabilities
	Accrued insurance			41.1				40.0				44.3
	Accrued retirement benefits			148.5				141.0				146.5
	Other long-term liabilities			50.6				47.4				40.6
	Total noncurrent liabilities			240.2				228.4				231.4
Stockholders' Equity
	Common stock			40.1				40.1				40.1
	Treasury stock			(42.1	)			(44.3	)			(49.0	)
	Paid-in capital			28.1				25.4				27.5
	Earnings invested in the business			828.8				813.5				774.1
	Accumulated other comprehensive income			79.2				60.7				51.8
	Total stockholders' equity			934.1				895.4				844.5
Total Liabilities and Stockholders' Equity			$	1,990.1		$		1,939.6			$	1,932.6
STATISTICS:
	Working Capital (including net assets held for sale)		$	439.1		$		411.3			$	430.7
	Current Ratio			1.5				1.5				1.5
	Debt-to-capital %			2.8		%		5.8	%			9.6		%
	Global Days Sales Outstanding			53				54				56

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 26 WEEKS ENDED JULY 3, 2016 AND JUNE 28, 2015
(UNAUDITED)
(In millions of dollars)
					2016				2015
Cash flows from operating activities:
	Net earnings			$	20.1			$	10.5
	Noncash adjustments:
		Depreciation and amortization			10.9				11.0
		Provision for bad debts			3.5				2.1
		Stock-based compensation			4.5				3.1
		Other, net			(0.7	)			(0.3	)
	Changes in operating assets and liabilities				2.9				(52.9	)
		Net cash from (used in) operating activities			41.2				(26.5	)
Cash flows from investing activities:
	Capital expenditures				(4.3	)			(6.7	)
	Investment in equity affiliate				-				(0.5	)
	Other investing activities				(0.4	)			(0.1	)
		Net cash used in investing activities			(4.7	)			(7.3	)
Cash flows from financing activities:
	Net change in short-term borrowings				(29.1	)			(1.4	)
	Dividend payments				(4.8	)			(3.8	)
	Other financing activities				0.2				-
		Net cash used in financing activities			(33.7	)			(5.2	)
Effect of exchange rates on cash and equivalents					6.4				4.6
Net change in cash and equivalents					9.2				(34.4	)
Less: cash balance included in current assets held for sale					(18.1	)			-
Cash and equivalents at beginning of period					42.2				83.1
Cash and equivalents at end of period				$	33.3			$	48.7

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
				Second Quarter (Commercial, PT and OCG)
									%				CC %
				2016			2015		Change				Change
Americas
	United States		$	930.8		$	923.6		0.8		%		0.8		%
	Canada			35.8			41.6		(14.1	)			(10.6	)
	Mexico			25.4			32.0		(20.2	)			(5.5	)
	Puerto Rico			22.5			26.6		(15.3	)			(15.3	)
	Brazil			10.2			9.9		3.8				20.6
Total Americas				1,024.7			1,033.7		(0.9	)			(0.1	)
EMEA
	France			61.3			60.9		0.7				(1.2	)
	Switzerland			54.6			54.6		(0.1	)			3.0
	Portugal			38.7			33.9		14.5				12.1
	United Kingdom			23.1			27.1		(15.0	)			(9.2	)
	Russia			16.6			22.2		(25.3	)			(6.8	)
	Germany			15.7			14.3		9.2				7.0
	Italy			15.1			13.0		16.0				13.9
	Norway			8.4			10.0		(15.6	)			(10.0	)
	Other			14.8			10.3		44.3				42.2
Total EMEA				248.3			246.3		0.8				2.9
APAC
	Singapore			33.0			33.0		0.2				1.3
	Australia			32.1			32.9		(2.3	)			2.0
	Malaysia			14.5			15.9		(9.6	)			(0.8	)
	New Zealand			9.5			10.3		(7.7	)			(1.9	)
	Other			13.4			12.9		3.7				8.6
Total APAC				102.5			105.0		(2.4	)			1.8
Total Kelly Services, Inc.			$	1,375.5		$	1,385.0		(0.7	)	%		0.6		%

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
				June Year to Date (Commercial, PT and OCG)
									%				CC %
				2016			2015		Change				Change
Americas
	United States		$	1,865.5		$	1,806.6		3.3		%		3.3		%
	Canada			70.3			84.3		(16.6	)			(10.6	)
	Mexico			52.0			63.9		(18.5	)			(2.6	)
	Puerto Rico			45.0			51.4		(12.5	)			(12.5	)
	Brazil			20.2			23.8		(14.9	)			11.7
Total Americas				2,053.0			2,030.0		1.1				2.2
EMEA
	France			117.8			117.3		0.5				0.6
	Switzerland			101.2			102.7		(1.5	)			2.0
	Portugal			72.4			65.2		11.1				11.2
	United Kingdom			46.7			50.7		(8.1	)			(2.1	)
	Germany			31.1			27.7		12.1				12.3
	Russia			30.6			40.4		(24.3	)			(7.8	)
	Italy			28.5			25.5		11.6				11.5
	Norway			16.0			19.4		(17.1	)			(9.6	)
	Other			28.5			21.3		33.9				34.6
Total EMEA				472.8			470.2		0.5				3.8
APAC
	Singapore			64.8			64.3		0.8				2.9
	Australia			60.6			63.3		(4.3	)			2.0
	Malaysia			27.7			31.4		(11.9	)			(0.9	)
	New Zealand			19.2			20.8		(7.8	)			1.3
	Other			26.5			25.6		3.6				10.7
Total APAC				198.8			205.4		(3.2	)			2.9
Total Kelly Services, Inc.			$	2,724.6		$	2,705.6		0.7		%		2.5		%

KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 13 WEEKS ENDED JULY 3, 2016 AND JUNE 28, 2015
(UNAUDITED)
(In millions of dollars except per share data)
				2016										2015
				As Reported			Restructuring Charges (Note 1)				Adjusted Earnings			Reported Earnings		% Change
Revenue from services			$	1,375.5		$	-			$	1,375.5		$	1,385.0		(0.7	)	%
Cost of services				1,145.0			-				1,145.0			1,162.7		(1.5	)
Gross profit				230.5			-				230.5			222.3		3.7
SG&A expenses				220.6			(3.4	)			217.2			210.8		3.0
Earnings from operations				9.9			3.4				13.3			11.5		15.9
Other expense, net				0.2			-				0.2			1.0		(74.8	)
Earnings before taxes				9.7			3.4				13.1			10.5		24.4
Inc. tax expense (benefit)				0.8			0.9				1.7			3.7		(55.5	)
Net earnings			$	8.9		$	2.5			$	11.4		$	6.8		68.1		%
Earnings per share:
	Basic		$	0.23		$	0.07			$	0.29		$	0.18		61.1		%
	Diluted		$	0.23		$	0.07			$	0.29		$	0.18		61.1		%
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 JULY 3, 2016 AND JUNE 28, 2015
(UNAUDITED)
(In millions of dollars except per share data)
				2016										2015
				As Reported			Restructuring Charges (Note 1)				Adjusted Earnings			Reported Earnings		% Change
Revenue from services			$	2,724.6		$	-			$	2,724.6		$	2,705.6		0.7		%
Cost of services				2,261.4			-				2,261.4			2,263.0		(0.1	)
Gross profit				463.2			-				463.2			442.6		4.6
SG&A expenses				438.6			(3.4	)			435.2			419.0		3.8
Earnings from operations				24.6			3.4				28.0			23.6		18.8
Other expense, net				1.0			-				1.0			3.5		(70.9	)
Earnings before taxes				23.6			3.4				27.0			20.1		34.4
Inc. tax expense (benefit)				3.5			0.9				4.4			9.6		(54.5	)
Net earnings			$	20.1		$	2.5			$	22.6		$	10.5		115.0		%
Earnings per share:
	Basic		$	0.52		$	0.07			$	0.58		$	0.27		114.8		%
	Diluted		$	0.51		$	0.07			$	0.58		$	0.27		114.8		%
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 is useful to understand the Company's fiscal 2016 financial performance and increases comparability. Specifically, Management believes that removing the impact of restructuring charges 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 2016 include costs related to actions during the second quarter in the Americas and EMEA designed to increase operational efficiency and align our staffing operations with opportunities for growth within their markets.

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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