Press Release Details

 

TROY, MI -- (Marketwired) -- 02/04/16 --

Kelly Services (NASDAQ: KELYA) (NASDAQ: KELYB)

Fourth Quarter Highlights

• Earnings from operations triple from a year ago, excluding restructuring
• Earnings per share of $0.88 versus $0.54, excluding restructuring, a 63% increase year-over-year
• OCG segment revenue up 14% year-over-year (up 16% in constant currency)
• Total Company revenue up 3% year-over-year (up 7% in constant currency)

Kelly Services (NASDAQ: KELYA) (NASDAQ: KELYB), a global leader in providing workforce solutions, today announced results for the fourth quarter and full year of 2015.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the fourth quarter of 2015 totaled $1.5 billion, a 3% increase (a 7% increase on a constant currency basis) compared to the corresponding quarter of 2014. Revenue for the full year totaled $5.5 billion, a 1% decrease (a 5% increase on a constant currency basis) compared to the prior year. Fourth quarter 2015 and fiscal 2015 include 14 and 53 weeks, respectively.

Earnings from operations for the fourth quarter of 2015 totaled $26.5 million, compared to $2.6 million reported for the fourth quarter of 2014. The results of operations in the fourth quarter of 2014 included restructuring charges of $6.2 million. Excluding the restructuring charges, earnings from operations were $8.8 million in the fourth quarter of 2014.

Earnings from operations for the full year of 2015 totaled $66.7 million compared to $21.9 million in 2014. Included in the results from operations for 2014 are restructuring charges of $12.0 million. Excluding this item, earnings from operations were $33.9 million in 2014.

Diluted earnings per share in the fourth quarter of 2015 were $0.88 compared to $0.44 per share in the fourth quarter of 2014. Included in diluted earnings per share for the fourth quarter of 2014 are restructuring charges of $0.10 per share. Excluding this item, diluted earnings per share for the fourth quarter of 2014 were $0.54 per share.

Diluted earnings per share for the full year of 2015 were $1.39 compared to $0.61 per share in 2014. The diluted earnings per share for 2014 included restructuring charges of $0.19 per share. Excluding this item, diluted earnings per share for 2014 were $0.81 per share.

Commenting on the fourth quarter, Camden stated, "Kelly's fourth quarter performance capped off a year of solid earnings growth, and we are very pleased with our strong operating leverage and strategic execution throughout 2015. All told, excluding the 2014 restructuring charges, we dropped nearly 70% of our full-year constant currency GP dollar growth to the bottom line. Kelly has entered 2016 as a more efficient organization keenly focused on profitability…and we expect our investments in PT and OCG to continue yielding results as we expand Kelly's role as a trusted talent advisor to our clients worldwide."

In conjunction with its fourth quarter and full year earnings release, Kelly Services has published a financial presentation regarding the fourth quarter and full year results on the Investor Relations page of our public website and will host a conference call at 9:00 a.m. (ET) on February 4, 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. 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 14 WEEKS ENDED JANUARY 3, 2016 AND 13 WEEKS ENDED DECEMBER 28, 2014
(UNAUDITED)
(In millions of dollars except per share data)
															%			CC %
			2015				2014				Change				Change			Change
Revenue from services			$	1,461.6			$	1,425.0			$	36.6			2.6	%		7.3	%
Cost of services				1,212.1				1,192.4				19.7			1.7
Gross profit				249.5				232.6				16.9			7.2			11.7
Selling, general and administrative expenses				223.0				230.0				(7.0	)		(3.1	)		0.5
Earnings from operations				26.5				2.6				23.9			NM
Other expense, net				0.7				1.1				(0.4	)		(40.9	)
Earnings before taxes				25.8				1.5				24.3			NM
Income tax (benefit) expense				(8.4	)			(15.5	)			7.1			46.1
Net earnings			$	34.2			$	17.0			$	17.2			99.5	%
Basic earnings per share			$	0.88			$	0.44			$	0.44			100.0	%
Diluted earnings per share			$	0.88			$	0.44			$	0.44			100.0	%
STATISTICS:
Gross profit rate				17.1	%			16.3	%			0.8		pts.
Selling, general and administrative expenses:
	% of revenue			15.3				16.1				(0.8	)
	% of gross profit			89.4				98.8				(9.4	)
% Return:
	Earnings from operations			1.8				0.2				1.6
	Earnings before taxes			1.8				0.1				1.7
	Net earnings			2.3				1.2				1.1
Effective income tax rate				(32.4	)%			(949.7	)%			917.3		pts.
Average number of shares outstanding (millions):
	Basic			38.0				37.7
	Diluted			38.0				37.7
Shares adjusted for nonvested restricted awards (millions):
	Basic			38.9				38.9
	Diluted			38.9				38.9

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 53 WEEKS ENDED JANUARY 3, 2016 AND 52 WEEKS ENDED DECEMBER 28, 2014
(UNAUDITED)
(In millions of dollars except per share data)
															%			CC %
			2015				2014				Change				Change			Change
Revenue from services			$	5,518.2			$	5,562.7			$	(44.5	)		(0.8	)%		4.7	%
Cost of services				4,597.9				4,654.3				(56.4	)		(1.2	)
Gross profit				920.3				908.4				11.9			1.3			6.4
Selling, general and administrative expenses				853.6				886.5				(32.9	)		(3.7	)		0.8
Earnings from operations				66.7				21.9				44.8			206.2
Other expense, net				4.2				5.3				(1.1	)		(19.9	)
Earnings before taxes				62.5				16.6				45.9			277.4
Income tax expense (benefit)				8.7				(7.1	)			15.8			221.4
Net earnings			$	53.8			$	23.7			$	30.1			126.9	%
Basic earnings per share			$	1.39			$	0.61			$	0.78			127.9	%
Diluted earnings per share			$	1.39			$	0.61			$	0.78			127.9	%
STATISTICS:
Gross profit rate				16.7	%			16.3	%			0.4		pts.
Selling, general and administrative expenses:
	% of revenue			15.5				15.9				(0.4	)
	% of gross profit			92.8				97.6				(4.8	)
% Return:
	Earnings from operations			1.2				0.4				0.8
	Earnings before taxes			1.1				0.3				0.8
	Net earnings			1.0				0.4				0.6
Effective income tax rate				13.9	%			(43.2	)%			57.1		pts.
Average number of shares outstanding (millions):
	Basic			37.8				37.5
	Diluted			37.9				37.5
Shares adjusted for nonvested restricted awards (millions):
	Basic			38.8				38.6
	Diluted			38.9				38.6

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
					Fourth Quarter
					2015				2014				%			CC %
					(14 Wks)				(13 Wks)				Change			Change
AMERICAS
	Commercial
		Revenue from services			$	696.1			$	694.5			0.2	%		2.7	%
		Staffing fee-based income included in revenue from services				3.7				4.0			(5.5	)		(3.2	)
		Gross profit				110.0				99.6			10.3			12.5
		Gross profit rate				15.8				14.4	%		1.4		pts.
	PT
		Revenue from services			$	250.1			$	232.9			7.4	%		7.8	%
		Staffing fee-based income included in revenue from services				4.5				3.9			17.0			18.7
		Gross profit				43.0				37.5			14.5			15.0
		Gross profit rate				17.2	%			16.1	%		1.1		pts.
	Total Americas
		Revenue from services			$	946.2			$	927.4			2.0	%		4.0	%
		Staffing fee-based income included in revenue from services				8.2				7.9			5.6			7.7
		Gross profit				153.0				137.1			11.4			13.2
		Total SG&A expenses				116.8				113.9			2.5			4.4
		Earnings from operations				36.2				23.2			55.2
		Gross profit rate				16.2	%			14.8	%		1.4		pts.
		Expense rates:
			% of revenue			12.3				12.3			-
			% of gross profit			76.3				83.0			(6.7	)
		Return on sales				3.8				2.5			1.3
EMEA
	Commercial
		Revenue from services			$	200.5			$	204.5			(2.0	)%		10.8	%
		Staffing fee-based income included in revenue from services				3.3				3.3			(0.8	)		15.8
		Gross profit				27.5				29.6			(6.9	)		5.7
		Gross profit rate				13.7	%			14.4	%		(0.7	)	pts.
	PT
		Revenue from services			$	44.7			$	44.8			(0.3	)%		12.3	%
		Staffing fee-based income included in revenue from services				2.4				2.8			(17.9	)		(3.7	)
		Gross profit				9.4				9.6			(3.4	)		10.3
		Gross profit rate				21.0	%			21.7	%		(0.7	)	pts.
	Total EMEA
		Revenue from services			$	245.2			$	249.3			(1.7	)%		11.1	%
		Staffing fee-based income included in revenue from services				5.7				6.1			(8.6	)		6.9
		Gross profit				36.9				39.2			(6.1	)		6.8
		Total SG&A expenses				29.7				36.4			(18.4	)		(8.2	)
		Earnings from operations				7.2				2.8			152.4
		Gross profit rate				15.0	%			15.7	%		(0.7	)	pts.
		Expense rates:
			% of revenue			12.1				14.6			(2.5	)
			% of gross profit			80.6				92.8			(12.2	)
		Return on sales				2.9				1.1			1.8

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
						Fourth Quarter
						2015				2014			%			CC %
						(14 Wks)				(13 Wks)			Change			Change
APAC
	Commercial
		Revenue from services			$	88.1			$	91.3			(3.5	)%		11.3	%
		Staffing fee-based income included in revenue from services				1.3				2.0			(34.0	)		(26.1	)
		Gross profit				10.4				11.8			(12.1	)		1.0
		Gross profit rate				11.8	%			12.9	%		(1.1	)	pts.
	PT
		Revenue from services			$	9.8			$	11.2			(12.7	)%		0.6
		Staffing fee-based income included in revenue from services				1.2				2.0			(38.0	)		(27.5	)
		Gross profit				2.4				3.3			(28.7	)		(17.4	)
		Gross profit rate				24.5	%			29.9	%		(5.4	)	pts.
	Total APAC
		Revenue from services			$	97.9			$	102.5			(4.5	)%		10.1
		Staffing fee-based income included in revenue from services				2.5				4.0			(36.0	)		(26.8	)
		Gross profit				12.8				15.1			(15.7	)		(3.1	)
		Total SG&A expenses				11.2				13.1			(13.8	)		(1.4	)
		Earnings from operations				1.6				2.0			(27.5	)
		Gross profit rate				13.0	%			14.8	%		(1.8	)	pts.
		Expense rates:
			% of revenue			11.4				12.7			(1.3	)
			% of gross profit			87.8				85.8			2.0
		Return on sales				1.6				2.1			(0.5	)
OCG
		Revenue from services			$	187.5			$	164.7			13.8	%		15.6
		Gross profit				48.0				42.3			13.8			16.1
		Total SG&A expenses				34.0				32.6			4.0			6.4
		Earnings from operations				14.0				9.7			47.1
		Gross profit rate				25.6	%			25.6	%		--		pts.
		Expense rates:
			% of revenue			18.1				19.8			(1.7	)
			% of gross profit			70.7				77.4			(6.7	)
		Return on sales				7.5				5.8			1.7

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
						December Year to Date
						2015				2014			%			CC %
						(53 Wks)				(52 Wks)			Change			Change
AMERICAS
	Commercial
		Revenue from services			$	2,604.3			$	2,609.6			(0.2	)%		2.0
		Staffing fee-based income included in revenue from services				14.5				14.4			1.0			3.5
		Gross profit				400.3				379.6			5.4			7.4
		Gross profit rate				15.4	%			14.5	%		0.9		pts.
	PT
		Revenue from services			$	971.9			$	956.0			1.7	%		2.1
		Staffing fee-based income included in revenue from services				17.6				15.6			13.0			14.1
		Gross profit				165.0				155.9			5.9			6.3
		Gross profit rate				17.0	%			16.3	%		0.7		pts.
	Total Americas
		Revenue from services			$	3,576.2			$	3,565.6			0.3	%		2.0
		Staffing fee-based income included in revenue from services				32.1				30.0			7.2			9.0
		Gross profit				565.3				535.5			5.5			7.1
		Total SG&A expenses				456.6				446.8			2.2			3.7
		Earnings from operations				108.7				88.7			22.7
		Gross profit rate				15.8	%			15.0	%		0.8		pts.
		Expense rates:
			% of revenue			12.8				12.5			0.3
			% of gross profit			80.8				83.5			(2.7	)
		Return on sales				3.0				2.5			0.5
EMEA
	Commercial
		Revenue from services			$	773.5			$	894.7			(13.6	)%		2.7
		Staffing fee-based income included in revenue from services				13.2				17.3			(23.7	)		(5.8	)
		Gross profit				106.6				130.6			(18.4	)		(2.9	)
		Gross profit rate				13.8	%			14.6	%		(0.8	)	pts.
	PT
		Revenue from services			$	171.5			$	190.3			(9.8	)%		6.5
		Staffing fee-based income included in revenue from services				10.1				13.5			(25.7	)		(8.8	)
		Gross profit				36.6				42.9			(14.8	)		2.0
		Gross profit rate				21.3	%			22.6	%		(1.3	)	pts.
	Total EMEA
		Revenue from services			$	945.0			$	1,085.0			(12.9	)%		3.4
		Staffing fee-based income included in revenue from services				23.3				30.8			(24.5	)		(7.1	)
		Gross profit				143.2				173.5			(17.5	)		(1.7	)
		SG&A expenses excluding restructuring charges				129.2				160.6			(19.6	)		(5.0	)
		Restructuring charges				-				0.8			(100.0	)		-
		Total SG&A expenses				129.2				161.4			(20.0	)		(5.5	)
		Earnings from operations				14.0				12.1			16.1
		Earnings from operations excluding restructuring charges				14.0				12.9			8.8
		Gross profit rate				15.2	%			16.0	%		(0.8	)	pts.
		Expense rates (excluding restructuring charges):
			% of revenue			13.7				14.8			(1.1	)
			% of gross profit			90.2				92.5			(2.3	)
		Return on sales (excluding restructuring charges)				1.5				1.2			0.3

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
						December Year to Date
						2015				2014			%			CC %
						(53 Wks)				(52 Wks)			Change			Change
APAC
	Commercial
		Revenue from services			$	347.2			$	351.8			(1.3	)%		12.6
		Staffing fee-based income included in revenue from services				6.0				7.9			(23.8	)		(14.7	)
		Gross profit				45.3				47.5			(4.6	)		8.3
		Gross profit rate				13.0	%			13.5	%		(0.5	)	pts.
	PT
		Revenue from services			$	40.5			$	40.4			0.4	%		14.9
		Staffing fee-based income included in revenue from services				5.6				7.8			(27.3	)		(17.9	)
		Gross profit				10.5				12.7			(17.6	)		(6.3	)
		Gross profit rate				26.0	%			31.6	%		(5.6	)	pts.
	Total APAC
		Revenue from services			$	387.7			$	392.2			(1.1	)%		12.9
		Staffing fee-based income included in revenue from services				11.6				15.7			(25.5	)		(16.3	)
		Gross profit				55.8				60.2			(7.4	)		5.2
		SG&A expenses excluding restructuring charges				46.7				56.4			(17.0	)		(5.9	)
		Restructuring charges				-				1.3			(100.0	)		-
		Total SG&A expenses				46.7				57.7			(19.0	)		(8.1	)
		Earnings from operations				9.1				2.5			261.6
		Earnings from operations excluding restructuring charges				9.1				3.8			134.2
		Gross profit rate				14.4	%			15.4	%		(1.0	)	pts.
		Expense rates (excluding restructuring charges):
			% of revenue			12.1				14.4			(2.3	)
			% of gross profit			83.9				93.6			(9.7	)
		Return on sales (excluding restructuring charges)				2.3				1.0			1.3
OCG
		Revenue from services			$	673.8			$	586.8			14.8	%		16.6
		Gross profit				160.6				143.6			11.9			14.2
		Total SG&A expenses				132.1				127.3			3.7			6.4
		Earnings from operations				28.5				16.3			75.8
		Gross profit rate				23.8	%			24.5	%		(0.7	)	pts.
		Expense rates:
			% of revenue			19.6				21.7			(2.1	)
			% of gross profit			82.2				88.7			(6.5	)
		Return on sales				4.2				2.8			1.4

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)
				January 3, 2016				Dec. 28, 2014
Current Assets
	Cash and equivalents		$	42.2			$	83.1
	Trade accounts receivable, less allowances of $10.5 and $10.7, respectively			1,139.1				1,122.8
	Prepaid expenses and other current assets			45.8				47.9
	Deferred taxes			-				34.4
Total current assets				1,227.1				1,288.2
Property and Equipment, Net				88.9				93.0
Noncurrent Deferred Taxes				189.3				146.3
Goodwill, Net				90.3				90.3
Other Assets				344.0				300.1
Total Assets			$	1,939.6			$	1,917.9
Current Liabilities
	Short-term borrowings		$	55.5			$	91.9
	Accounts payable and accrued liabilities			405.5				364.0
	Accrued payroll and related taxes			268.1				308.5
	Accrued insurance			26.7				26.9
	Income and other taxes			60.0				68.8
Total current liabilities				815.8				860.1
Noncurrent Liabilities
	Accrued insurance			40.0				43.9
	Accrued retirement benefits			141.0				140.8
	Other long-term liabilities			47.4				39.4
Total noncurrent liabilities				228.4				224.1
Stockholders' Equity
	Common stock			40.1				40.1
	Treasury stock			(44.3	)			(49.8	)
	Paid-in capital			25.4				24.9
	Earnings invested in the business			813.5				767.4
	Accumulated other comprehensive income			60.7				51.1
Total stockholders' equity				895.4				833.7
Total Liabilities and Stockholders' Equity			$	1,939.6			$	1,917.9
STATISTICS:
	Working Capital		$	411.3			$	428.1
	Current Ratio			1.5				1.5
	Debt-to-capital %			5.8	%			9.9	%
	Global Days Sales Outstanding			54				54

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 53 WEEKS ENDED JANUARY 3, 2016 AND 52 WEEKS ENDED DECEMBER 28, 2014
(UNAUDITED)
(In millions of dollars)
					2015				2014
Cash flows from operating activities:
	Net earnings			$	53.8			$	23.7
	Noncash adjustments:
		Depreciation and amortization			22.3				21.7
		Provision for bad debts			3.7				5.3
		Stock-based compensation			6.1				5.3
		Other, net			(4.7	)			(2.2	)
	Changes in operating assets and liabilities				(57.7	)			(123.8	)
		Net cash from (used in) operating activities			23.5				(70.0	)
Cash flows from investing activities:
	Capital expenditures				(16.9	)			(21.7	)
	Investment in equity affiliate				(0.5	)			(5.7	)
	Other investing activities				(0.2	)			0.2
		Net cash used in investing activities			(17.6	)			(27.2	)
Cash flows from financing activities:
	Net change in short-term borrowings				(34.7	)			63.9
	Dividend payments				(7.7	)			(7.6	)
	Other financing activities				0.2				0.3
		Net cash (used in) from financing activities			(42.2	)			56.6
Effect of exchange rates on cash and equivalents					(4.6	)			(2.0	)
Net change in cash and equivalents					(40.9	)			(42.6	)
Cash and equivalents at beginning of period					83.1				125.7
Cash and equivalents at end of period				$	42.2			$	83.1

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
				Fourth Quarter (Commercial, PT and OCG)
				2015			2014		%			CC %
				(14 Wks)			(13 Wks)		Change			Change
Americas
	United States		$	998.8		$	933.9		6.9	%		6.9	%
	Canada			38.0			50.0		(24.0	)		(11.0	)
	Mexico			35.3			36.7		(3.9	)		16.3
	Puerto Rico			24.7			26.6		(7.1	)		(7.1	)
	Brazil			8.7			13.9		(37.5	)		(1.7	)
Total Americas				1,105.5			1,061.1		4.2			6.0
EMEA
	France			65.6			66.4		(1.1	)		12.8
	Switzerland			55.5			57.8		(4.0	)		(1.3	)
	Portugal			33.8			32.4		4.2			18.9
	United Kingdom			26.7			23.2		15.1			20.3
	Russia			18.2			20.9		(12.9	)		22.2
	Germany			16.2			16.8		(4.0	)		9.5
	Italy			14.5			13.9		3.9			18.7
	Norway			9.7			11.9		(18.1	)		2.1
	Other			13.0			13.6		(4.4	)		9.4
Total EMEA				253.2			256.9		(1.4	)		11.3
APAC
	Singapore			33.0			32.7		0.7			9.5
	Australia			31.1			32.6		(4.6	)		13.5
	Malaysia			14.1			16.2		(12.7	)		11.4
	New Zealand			11.2			13.2		(14.5	)		0.4
	Other			13.5			12.3		9.2			19.5
Total APAC				102.9			107.0		(3.8	)		11.0
Total Kelly Services, Inc.			$	1,461.6		$	1,425.0		2.6	%		7.3	%

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
				December Year to Date (Commercial, PT and OCG)
				2015			2014		%			CC %
				(53 Wks)			(52 Wks)		Change			Change
Americas
	United States		$	3,705.2		$	3,535.8		4.8	%		4.8	%
	Canada			160.2			198.2		(19.2	)		(6.9	)
	Mexico			130.5			139.0		(6.1	)		11.9
	Puerto Rico			99.9			105.0		(4.8	)		(4.8	)
	Brazil			42.9			57.1		(24.9	)		1.7
Total Americas				4,138.7			4,035.1		2.6			4.2
EMEA
	France			246.0			268.6		(8.4	)		9.4
	Switzerland			216.2			253.5		(14.7	)		(10.3	)
	Portugal			132.5			124.8		6.2			27.0
	United Kingdom			105.1			105.6		(0.4	)		7.3
	Russia			75.6			117.3		(35.5	)		3.2
	Germany			59.3			67.5		(12.3	)		4.7
	Italy			54.0			60.2		(10.3	)		7.1
	Norway			39.2			55.5		(29.5	)		(9.6	)
	Other			45.8			64.5		(29.0	)		(15.2	)
Total EMEA				973.7			1,117.5		(12.9	)		3.3
APAC
	Singapore			129.9			127.5		1.9			10.5
	Australia			123.2			121.4		1.5			21.8
	Malaysia			59.5			66.2		(10.1	)		6.7
	New Zealand			41.4			51.4		(19.4	)		(4.4	)
	Other			51.8			43.6		18.6			26.9
Total APAC				405.8			410.1		(1.0	)		13.1
Total Kelly Services, Inc.			$	5,518.2		$	5,562.7		(0.8	)%		4.7	%

KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 14 WEEKS ENDED JANUARY 3, 2016 AND 13 WEEKS ENDED DECEMBER 28, 2014
(UNAUDITED)
(In millions of dollars except per share data)
				2015				2014
				As reported				Adjusted Earnings			% Change
Revenue from services			$	1,461.6			$	1,425.0			2.6	%
Cost of services				1,212.1				1,192.4			1.7
Gross profit				249.5				232.6			7.2
SG&A expenses				223.0				223.8			(0.4	)
Earnings from operations				26.5				8.8			196.7
Other expense, net				0.7				1.1			(40.9	)
Earnings before taxes				25.8				7.7			229.2
Inc. tax (benefit) expense*				(8.4	)			(13.1	)		36.2
Net earnings			$	34.2			$	20.8			63.1	%
Earnings per share:
	Basic		$	0.88			$	0.54			63.0	%
	Diluted		$	0.88			$	0.54			63.0	%
* Income tax benefit for the fourth quarters of 2015 and 2014 includes $13.9 million and $13.6 million, respectively, related to the retroactive reinstatement of work opportunity credits for the entire year.
				2014
				As reported				Restructuring Charges (Note 1)			Adjusted Earnings
Revenue from services			$	1,425.0			$	-		$	1,425.0
Cost of services				1,192.4				-			1,192.4
Gross profit				232.6				-			232.6
SG&A expenses				230.0				(6.2	)		223.8
Earnings from operations				2.6				6.2			8.8
Other expense, net				1.1				-			1.1
Earnings before taxes				1.5				6.2			7.7
Inc. tax (benefit) expense				(15.5	)			2.4			(13.1	)
Net earnings			$	17.0			$	3.8		$	20.8
Earnings per share:
	Basic		$	0.44			$	0.10		$	0.54
	Diluted		$	0.44			$	0.10		$	0.54
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 53 WEEKS ENDED JANUARY 3, 2016 AND 52 WEEKS ENDED DECEMBER 28, 2014
(UNAUDITED)
(In millions of dollars except per share data)
			2015				2014
			As reported				Adjusted Earnings				% Change
Revenue from services		$	5,518.2			$	5,562.7				(0.8	)%
Cost of services			4,597.9				4,654.3				(1.2	)
Gross profit			920.3				908.4				1.3
SG&A expenses			853.6				874.5				(2.4	)
Earnings from operations			66.7				33.9				97.2
Other expense, net			4.2				5.3				(19.9	)
Earnings before taxes			62.5				28.6				118.6
Inc. tax expense (benefit)			8.7				(2.6	)			432.2
Net earnings		$	53.8			$	31.2				72.4	%
Earnings per share:
Basic		$	1.39			$	0.81				71.6	%
Diluted		$	1.39			$	0.81				71.6	%
			2014
			As reported				Restructuring Charges  (Note 1)				Adjusted Earnings
Revenue from services		$	5,562.7			$	-			$	5,562.7
Cost of services			4,654.3				-				4,654.3
Gross profit			908.4				-				908.4
SG&A expenses			886.5				(12.0	)			874.5
Earnings from operations			21.9				12.0				33.9
Other expense, net			5.3				-				5.3
Earnings before taxes			16.6				12.0				28.6
Inc. tax (benefit) expense			(7.1	)			4.5				(2.6	)
Net earnings		$	23.7			$	7.5			$	31.2
Earnings per share:
Basic		$	0.61			$	0.19			$	0.81
Diluted		$	0.61			$	0.19			$	0.81

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 is useful to understand the Company's financial performance and increases comparability. Specifically, Management believes that excluding this item 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.

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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