UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 6, 2009
KELLY SERVICES, INC.
(Exact name of registrant as specified in its charter)
| DELAWARE | 0-1088 | 38-1510762 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
999 WEST BIG BEAVER ROAD, TROY, MICHIGAN |
48084 |
|
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (248) 362-4444
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition
Kelly Services, Inc. (the “Company”) today released financial information containing highlighted
financial data for the three months and nine months ended September 27, 2009. A copy of the press
release is attached as exhibit 99.1 herein.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| 99.1 | Press Release dated November 6, 2009. |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| KELLY SERVICES, INC. |
||||
| Date: November 6, 2009 |
||||
| /s/ Patricia Little | ||||
| Patricia Little | ||||
| Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
||||
Date: November 6, 2009
| /s/ Michael E. Debs | ||||
| Michael E. Debs | ||||
| Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) |
||||
3
EXHIBIT INDEX
| Exhibit No. | Description | |
99.1
|
Press release dated November 6, 2009 |
4
Exhibit 99.1
KELLY SERVICES REPORTS 3rd QUARTER 2009 RESULTS
TROY, MI (November 6, 2009) — Kelly Services, Inc., a world leader in workforce management
services and human resources solutions, today announced results for the third quarter of 2009.
Carl T. Camden, President and Chief Executive Officer, announced revenue for the third quarter
of 2009 totaled $1.0 billion, a 25% decrease compared to the corresponding quarter in 2008. On a
constant currency basis, revenue decreased by 22%.
Losses from operations for the third quarter of 2009 totaled $28.0 million, compared to losses
from operations of $14.5 million reported for the third quarter of 2008. Included in the results
from operations are legal charges of $4.3 million in the third quarter of 2009 and $22.5 million in
the third quarter of 2008.
Diluted losses per share from continuing operations in the third quarter of 2009 were $0.43
compared to third quarter 2008 losses of $0.33 per share. The legal charges totaled $0.08 per
share in the third quarter of 2009 and $0.40 per share in the third quarter of 2008.
Commenting on the third quarter results, Camden was cautiously optimistic. “We are seeing
signs that the global economy is picking up steam and job losses are stabilizing,” he said. “In
the past few months, trends have shown modest improvement, and we’re particularly encouraged by the
steady, sequential nature of that upturn.”
Camden added that job creation may lag for awhile. “Employers are understandably concerned
about the sustainability of this recovery and likely will be guarded about expanding their
workforce.
“In the meantime, Kelly has done an excellent job of streamlining, managing costs, maintaining
a strong balance sheet, and serving our customers. Today, we’re a more agile and focused company.
We believe we’re in a very good position to grow with this economy.”
In conjunction with its third quarter earnings release, Kelly Services, Inc. will host a
conference call at 9:00 a.m. (ET) on November 6, to review the results and answer questions. The
call may be accessed in one of the following ways:
Via the Telephone:
U.S.
|
1 800 288-9626 | |
International
|
1 612 234-9959 |
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
www.kellyservices.com
1
This release contains statements that are forward looking in nature and accordingly, are
subject to risks and uncertainties. These factors include: competition, changing market and
economic conditions, currency fluctuations, changes in laws and regulations, including tax laws,
and other 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.
About Kelly Services
Kelly Services, Inc. (NASDAQ: KELYA, KELYB) is a world leader in workforce management services and
human resources solutions. Kelly offers a comprehensive array of temporary staffing, permanent
placement, outsourcing, and consulting services. Kelly serves clients around the globe and
provides employment to 650,000 employees annually. Revenue in 2008 was $5.5 billion. Visit
www.kellyservices.com.
ANALYST CONTACT:
|
MEDIA CONTACT: | |
James Polehna
|
Judith Clark | |
(248) 244-4586
|
(248) 244-5362 | |
james_polehna@kellyservices.com
|
judith_clark@kellyservices.com |
2
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED SEPTEMBER 27, 2009 AND SEPTEMBER 28, 2008
(UNAUDITED)
(In millions of dollars except per share data)
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED SEPTEMBER 27, 2009 AND SEPTEMBER 28, 2008
(UNAUDITED)
(In millions of dollars except per share data)
| 2009 | 2008 | Change | % Change | |||||||||||||
Revenue from services |
$ | 1,049.2 | $ | 1,397.8 | $ | (348.6 | ) | (24.9 | )% | |||||||
Cost of services |
883.0 | 1,152.1 | (269.1 | ) | (23.3 | ) | ||||||||||
Gross profit |
166.2 | 245.7 | (79.5 | ) | (32.4 | ) | ||||||||||
Selling, general and administrative
expenses |
193.7 | 260.2 | (66.5 | ) | (25.6 | ) | ||||||||||
Asset impairments |
0.5 | — | 0.5 | NM | ||||||||||||
Loss from operations |
(28.0 | ) | (14.5 | ) | (13.5 | ) | (92.6 | ) | ||||||||
Other expense, net |
(1.6 | ) | (0.1 | ) | (1.5 | ) | NM | |||||||||
Loss from continuing operations before taxes |
(29.6 | ) | (14.6 | ) | (15.0 | ) | (102.2 | ) | ||||||||
Income taxes |
(14.8 | ) | (3.1 | ) | (11.7 | ) | (375.4 | ) | ||||||||
Loss from continuing operations |
(14.8 | ) | (11.5 | ) | (3.3 | ) | (28.6 | ) | ||||||||
Loss from discontinued operations, net of tax |
— | (0.7 | ) | 0.7 | 100.0 | |||||||||||
Net loss |
$ | (14.8 | ) | $ | (12.2 | ) | $ | (2.6 | ) | (21.6 | )% | |||||
Basic loss per share on common stock |
||||||||||||||||
Loss from continuing operations |
$ | (0.43 | ) | $ | (0.33 | ) | $ | (0.10 | ) | (30.3 | )% | |||||
Loss from discontinued operations |
— | (0.02 | ) | 0.02 | 100.0 | |||||||||||
Net loss |
(0.43 | ) | (0.35 | ) | (0.08 | ) | (22.9 | ) | ||||||||
Diluted loss per share on common stock |
||||||||||||||||
Loss from continuing operations |
$ | (0.43 | ) | $ | (0.33 | ) | $ | (0.10 | ) | (30.3 | )% | |||||
Loss from discontinued operations |
— | (0.02 | ) | 0.02 | 100.0 | |||||||||||
Net loss |
(0.43 | ) | (0.35 | ) | (0.08 | ) | (22.9 | ) | ||||||||
STATISTICS: |
||||||||||||||||
Gross profit rate |
15.8 | % | 17.6 | % | (1.8 | ) pts. | ||||||||||
Selling, general and administrative expenses: |
||||||||||||||||
% of revenue |
18.5 | 18.6 | (0.1 | ) | ||||||||||||
% of gross profit |
116.5 | 105.9 | 10.6 | |||||||||||||
% Return — Loss from operations |
(2.7 | ) | (1.0 | ) | (1.7 | ) | ||||||||||
Loss from continuing operations
before taxes |
(2.8 | ) | (1.0 | ) | (1.8 | ) | ||||||||||
Loss from continuing operations |
(1.4 | ) | (0.8 | ) | (0.6 | ) | ||||||||||
Net loss |
(1.4 | ) | (0.9 | ) | (0.5 | ) | ||||||||||
Effective income tax rate |
49.9 | % | 21.2 | % | 28.7 | pts. | ||||||||||
3
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 39 WEEKS ENDED SEPTEMBER 27, 2009 AND SEPTEMBER 28, 2008
(UNAUDITED)
(In millions of dollars except per share data)
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 39 WEEKS ENDED SEPTEMBER 27, 2009 AND SEPTEMBER 28, 2008
(UNAUDITED)
(In millions of dollars except per share data)
| 2009 | 2008 | Change | % Change | |||||||||||||
Revenue from services |
$ | 3,120.7 | $ | 4,238.2 | $ | (1,117.5 | ) | (26.4 | )% | |||||||
Cost of services |
2,607.3 | 3,485.2 | (877.9 | ) | (25.2 | ) | ||||||||||
Gross profit |
513.4 | 753.0 | (239.6 | ) | (31.8 | ) | ||||||||||
Selling, general and administrative
expenses |
593.4 | 739.6 | (146.2 | ) | (19.8 | ) | ||||||||||
Asset impairments |
53.1 | — | 53.1 | NM | ||||||||||||
(Loss) earnings from operations |
(133.1 | ) | 13.4 | (146.5 | ) | NM | ||||||||||
Other expense, net |
(1.3 | ) | — | (1.3 | ) | NM | ||||||||||
(Loss) earnings from continuing operations before taxes |
(134.4 | ) | 13.4 | (147.8 | ) | NM | ||||||||||
Income taxes |
(37.5 | ) | 6.5 | (44.0 | ) | NM | ||||||||||
(Loss) earnings from continuing operations |
(96.9 | ) | 6.9 | (103.8 | ) | NM | ||||||||||
Earnings (loss) from discontinued operations, net of tax |
0.6 | (0.4 | ) | 1.0 | 273.7 | |||||||||||
Net (loss) earnings |
$ | (96.3 | ) | $ | 6.5 | $ | (102.8 | ) | NM | % | ||||||
Basic (loss) earnings per share on common stock |
||||||||||||||||
(Loss) earnings from continuing operations |
$ | (2.78 | ) | $ | 0.19 | $ | (2.97 | ) | NM | % | ||||||
Earnings (loss) from discontinued operations |
0.02 | (0.01 | ) | 0.03 | 300.0 | |||||||||||
Net (loss) earnings |
(2.76 | ) | 0.19 | (2.95 | ) | NM | ||||||||||
Diluted (loss) earnings per share on common stock |
||||||||||||||||
(Loss) earnings from continuing operations |
$ | (2.78 | ) | $ | 0.19 | $ | (2.97 | ) | NM | % | ||||||
Earnings (loss) from discontinued operations |
0.02 | (0.01 | ) | 0.03 | 300.0 | |||||||||||
Net (loss) earnings |
(2.76 | ) | 0.19 | (2.95 | ) | NM | ||||||||||
STATISTICS: |
||||||||||||||||
Gross profit rate |
16.5 | % | 17.8 | % | (1.3 | ) pts. | ||||||||||
Selling, general and administrative expenses: |
||||||||||||||||
% of revenue |
19.0 | 17.5 | 1.5 | |||||||||||||
% of gross profit |
115.6 | 98.2 | 17.4 | |||||||||||||
% Return — (Loss) earnings from operations |
(4.3 | ) | 0.3 | (4.6 | ) | |||||||||||
(Loss) earnings from continuing operations
before taxes |
(4.3 | ) | 0.3 | (4.6 | ) | |||||||||||
(Loss) earnings from continuing operations |
(3.1 | ) | 0.2 | (3.3 | ) | |||||||||||
Net (loss) earnings |
(3.1 | ) | 0.2 | (3.3 | ) | |||||||||||
Effective income tax rate |
27.9 | % | 48.5 | % | (20.6 | ) pts. | ||||||||||
4
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
| Third Quarter | ||||||||||||||||
| Constant | ||||||||||||||||
| Currency | ||||||||||||||||
| 2009 | 2008 | Change | Change | |||||||||||||
Americas Commercial |
||||||||||||||||
Revenue from services (including
fee-based income) |
$ | 467.5 | $ | 621.6 | (24.8 | )% | (23.6 | )% | ||||||||
Fee-based income |
1.7 | 4.3 | (60.3 | ) | (59.3 | ) | ||||||||||
Gross profit |
67.2 | 95.2 | (29.4 | ) | (28.4 | ) | ||||||||||
SG&A expenses |
67.8 | 83.3 | (18.7 | ) | (17.7 | ) | ||||||||||
Earnings from operations |
(0.6 | ) | 11.9 | (104.8 | ) | |||||||||||
Gross profit rate |
14.4 | % | 15.3 | % | (0.9 | ) pts. | ||||||||||
Expense rates: |
||||||||||||||||
% of revenue |
14.5 | 13.4 | 1.1 | |||||||||||||
% of gross profit |
100.8 | 87.6 | 13.2 | |||||||||||||
Operating margin |
(0.1 | ) | 1.9 | (2.0 | ) | |||||||||||
Americas PT |
||||||||||||||||
Revenue from services (including
fee-based income) |
$ | 192.1 | $ | 234.8 | (18.2 | )% | (18.1 | )% | ||||||||
Fee-based income |
2.1 | 5.0 | (57.3 | ) | (57.2 | ) | ||||||||||
Gross profit |
29.5 | 39.1 | (24.5 | ) | (24.4 | ) | ||||||||||
SG&A expenses |
24.6 | 28.9 | (14.6 | ) | (14.5 | ) | ||||||||||
Earnings from operations |
4.9 | 10.2 | (52.7 | ) | ||||||||||||
Gross profit rate |
15.4 | % | 16.6 | % | (1.2 | ) pts. | ||||||||||
Expense rates: |
||||||||||||||||
% of revenue |
12.9 | 12.3 | 0.6 | |||||||||||||
% of gross profit |
83.7 | 74.0 | 9.7 | |||||||||||||
Operating margin |
2.5 | 4.3 | (1.8 | ) | ||||||||||||
EMEA Commercial |
||||||||||||||||
Revenue from services (including
fee-based income) |
$ | 228.0 | $ | 353.6 | (35.5 | )% | (29.5 | )% | ||||||||
Fee-based income |
3.7 | 10.2 | (64.5 | ) | (60.1 | ) | ||||||||||
Gross profit |
33.9 | 63.0 | (46.2 | ) | (41.4 | ) | ||||||||||
SG&A expenses |
39.5 | 59.0 | (33.2 | ) | (27.8 | ) | ||||||||||
Earnings from operations |
(5.6 | ) | 4.0 | (237.9 | ) | |||||||||||
Gross profit rate |
14.9 | % | 17.8 | % | (2.9 | ) pts. | ||||||||||
Expense rates: |
||||||||||||||||
% of revenue |
17.3 | 16.7 | 0.6 | |||||||||||||
% of gross profit |
116.3 | 93.6 | 22.7 | |||||||||||||
Operating margin |
(2.4 | ) | 1.1 | (3.5 | ) | |||||||||||
EMEA PT |
||||||||||||||||
Revenue from services (including
fee-based income) |
$ | 36.4 | $ | 44.0 | (17.3 | )% | (10.7 | )% | ||||||||
Fee-based income |
3.9 | 6.7 | (40.5 | ) | (33.6 | ) | ||||||||||
Gross profit |
9.8 | 12.9 | (23.8 | ) | (16.9 | ) | ||||||||||
SG&A expenses |
9.9 | 12.5 | (20.2 | ) | (13.1 | ) | ||||||||||
Earnings from operations |
(0.1 | ) | 0.4 | (131.7 | ) | |||||||||||
Gross profit rate |
27.0 | % | 29.3 | % | (2.3 | ) pts. | ||||||||||
Expense rates: |
||||||||||||||||
% of revenue |
27.3 | 28.3 | (1.0 | ) | ||||||||||||
% of gross profit |
101.3 | 96.8 | 4.5 | |||||||||||||
Operating margin |
(0.4 | ) | 0.9 | (1.3 | ) | |||||||||||
5
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT (continued)
(UNAUDITED)
(In millions of dollars)
RESULTS OF OPERATIONS BY SEGMENT (continued)
(UNAUDITED)
(In millions of dollars)
| Third Quarter | ||||||||||||||||
| Constant | ||||||||||||||||
| Currency | ||||||||||||||||
| 2009 | 2008 | Change | Change | |||||||||||||
APAC Commercial |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 71.2 | $ | 84.9 | (16.2 | )% | (12.0 | )% | ||||||||
Fee-based income |
2.3 | 4.5 | (48.4 | ) | (46.5 | ) | ||||||||||
Gross profit |
10.3 | 14.7 | (29.6 | ) | (26.4 | ) | ||||||||||
SG&A expenses |
11.5 | 14.5 | (20.8 | ) | (17.6 | ) | ||||||||||
Earnings from operations |
(1.2 | ) | 0.2 | NM | ||||||||||||
Gross profit rate |
14.5 | % | 17.3 | % | (2.8 | ) pts. | ||||||||||
Expense rates: |
||||||||||||||||
% of revenue |
16.1 | 17.1 | (1.0 | ) | ||||||||||||
% of gross profit |
111.1 | 98.7 | 12.4 | |||||||||||||
Operating margin |
(1.6 | ) | 0.2 | (1.8 | ) | |||||||||||
APAC PT |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 6.5 | $ | 9.2 | (29.7 | )% | (28.0 | )% | ||||||||
Fee-based income |
1.0 | 1.5 | (32.7 | ) | (30.1 | ) | ||||||||||
Gross profit |
2.0 | 2.8 | (31.6 | ) | (29.7 | ) | ||||||||||
SG&A expenses |
2.3 | 2.7 | (14.7 | ) | (10.6 | ) | ||||||||||
Earnings from operations |
(0.3 | ) | 0.1 | (347.6 | ) | |||||||||||
Gross profit rate |
30.3 | % | 31.2 | % | (0.9 | ) pts. | ||||||||||
Expense rates: |
||||||||||||||||
% of revenue |
35.9 | 29.6 | 6.3 | |||||||||||||
% of gross profit |
118.4 | 94.9 | 23.5 | |||||||||||||
Operating margin |
(5.6 | ) | 1.6 | (7.2 | ) | |||||||||||
OCG |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 52.9 | $ | 55.9 | (5.4 | )% | (4.4 | )% | ||||||||
Fee-based income |
5.8 | 7.4 | (21.7 | ) | (19.4 | ) | ||||||||||
Gross profit |
13.7 | 18.3 | (24.7 | ) | (23.1 | ) | ||||||||||
SG&A expenses |
17.4 | 18.4 | (5.2 | ) | (3.3 | ) | ||||||||||
Earnings from operations |
(3.7 | ) | (0.1 | ) | NM | |||||||||||
Gross profit rate |
26.1 | % | 32.8 | % | (6.7 | ) pts. | ||||||||||
Expense rates: |
||||||||||||||||
% of revenue |
33.0 | 32.9 | 0.1 | |||||||||||||
% of gross profit |
126.6 | 100.5 | 26.1 | |||||||||||||
Operating margin |
(6.9 | ) | (0.2 | ) | (6.7 | ) | ||||||||||
Corporate Expense |
$ | (20.9 | ) | $ | (41.2 | ) | 49.3 | % | ||||||||
6
KELLY
SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
| September Year to Date | |||||||||||||||||
| Constant | |||||||||||||||||
| Currency | |||||||||||||||||
| 2009 | 2008 | Change | Change | ||||||||||||||
Americas Commercial |
|||||||||||||||||
Revenue from services (including fee-based income) |
$ | 1,422.9 | $ | 1,921.1 | (25.9 | )% | (24.3 | )% | |||||||||
Fee-based income |
5.1 | 12.9 | (60.9 | ) | (58.7 | ) | |||||||||||
Gross profit |
210.9 | 302.6 | (30.3 | ) | (28.9 | ) | |||||||||||
SG&A expenses |
209.0 | 248.8 | (16.0 | ) | (14.4 | ) | |||||||||||
Earnings from operations |
1.9 | 53.8 | (96.4 | ) | |||||||||||||
Gross profit rate |
14.8 | % | 15.8 | % | (1.0 | ) pts. | |||||||||||
Expense rates: |
|||||||||||||||||
% of revenue |
14.7 | 13.0 | 1.7 | ||||||||||||||
% of gross profit |
99.1 | 82.2 | 16.9 | ||||||||||||||
Operating margin |
0.1 | 2.8 | (2.7 | ) | |||||||||||||
Americas PT |
|||||||||||||||||
Revenue from services (including fee-based income) |
$ | 584.3 | $ | 718.9 | (18.7 | )% | (18.6 | )% | |||||||||
Fee-based income |
7.2 | 15.7 | (54.2 | ) | (54.1 | ) | |||||||||||
Gross profit |
93.2 | 124.2 | (25.0 | ) | (24.8 | ) | |||||||||||
SG&A expenses |
76.4 | 85.5 | (10.6 | ) | (10.3 | ) | |||||||||||
Earnings from operations |
16.8 | 38.7 | (56.7 | ) | |||||||||||||
Gross profit rate |
15.9 | % | 17.3 | % | (1.4 | ) pts. | |||||||||||
Expense rates: |
|||||||||||||||||
% of revenue |
13.1 | 11.9 | 1.2 | ||||||||||||||
% of gross profit |
82.0 | 68.9 | 13.1 | ||||||||||||||
Operating margin |
2.9 | 5.4 | (2.5 | ) | |||||||||||||
EMEA Commercial |
|||||||||||||||||
Revenue from services (including fee-based income) |
$ | 656.3 | $ | 1,027.2 | (36.1 | )% | (25.5 | )% | |||||||||
Fee-based income |
12.3 | 32.0 | (61.6 | ) | (54.3 | ) | |||||||||||
Gross profit |
102.8 | 179.7 | (42.8 | ) | (33.6 | ) | |||||||||||
SG&A expenses |
125.8 | 176.0 | (28.5 | ) | (18.1 | ) | |||||||||||
Earnings from operations |
(23.0 | ) | 3.7 | NM | |||||||||||||
Gross profit rate |
15.7 | % | 17.5 | % | (1.8 | ) pts. | |||||||||||
Expense rates: |
|||||||||||||||||
% of revenue |
19.2 | 17.1 | 2.1 | ||||||||||||||
% of gross profit |
122.4 | 97.9 | 24.5 | ||||||||||||||
Operating margin |
(3.5 | ) | 0.4 | (3.9 | ) | ||||||||||||
EMEA PT |
|||||||||||||||||
Revenue from services (including fee-based income) |
$ | 102.3 | $ | 134.1 | (23.7 | )% | (12.1 | )% | |||||||||
Fee-based income |
12.1 | 21.3 | (42.9 | ) | (32.1 | ) | |||||||||||
Gross profit |
28.0 | 40.0 | (30.0 | ) | (18.7 | ) | |||||||||||
SG&A expenses |
30.0 | 37.2 | (19.2 | ) | (5.8 | ) | |||||||||||
Earnings from operations |
(2.0 | ) | 2.8 | (172.0 | ) | ||||||||||||
Gross profit rate |
27.4 | % | 29.8 | % | (2.4 | ) pts. | |||||||||||
Expense rates: |
|||||||||||||||||
% of revenue |
29.4 | 27.7 | 1.7 | ||||||||||||||
% of gross profit |
107.2 | 93.0 | 14.2 | ||||||||||||||
Operating margin |
(2.0 | ) | 2.1 | (4.1 | ) | ||||||||||||
7
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT (continued)
(UNAUDITED)
(In millions of dollars)
RESULTS OF OPERATIONS BY SEGMENT (continued)
(UNAUDITED)
(In millions of dollars)
| September Year to Date | ||||||||||||||||
| Constant | ||||||||||||||||
| Currency | ||||||||||||||||
| 2009 | 2008 | Change | Change | |||||||||||||
APAC Commercial |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 201.9 | $ | 262.5 | (23.1 | )% | (13.4 | )% | ||||||||
Fee-based income |
6.8 | 14.0 | (51.0 | ) | (46.1 | ) | ||||||||||
Gross profit |
29.5 | 44.9 | (34.5 | ) | (26.3 | ) | ||||||||||
SG&A expenses |
33.2 | 44.2 | (25.0 | ) | (16.3 | ) | ||||||||||
Earnings from operations |
(3.7 | ) | 0.7 | NM | ||||||||||||
Gross profit rate |
14.6 | % | 17.1 | % | (2.5) | pts. | ||||||||||
Expense rates: |
||||||||||||||||
% of revenue |
16.4 | 16.8 | (0.4 | ) | ||||||||||||
% of gross profit |
112.5 | 98.3 | 14.2 | |||||||||||||
Operating margin |
(1.8 | ) | 0.3 | (2.1 | ) | |||||||||||
APAC PT |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 18.2 | $ | 27.1 | (32.8 | )% | (26.5 | )% | ||||||||
Fee-based income |
2.8 | 4.3 | (34.6 | ) | (27.8 | ) | ||||||||||
Gross profit |
5.6 | 8.3 | (32.6 | ) | (26.2 | ) | ||||||||||
SG&A expenses |
6.6 | 8.5 | (22.7 | ) | (13.0 | ) | ||||||||||
Earnings from operations |
(1.0 | ) | (0.2 | ) | (362.0 | ) | ||||||||||
Gross profit rate |
30.8 | % | 30.7 | % | 0.1 | pts. | ||||||||||
Expense rates: |
||||||||||||||||
% of revenue |
36.3 | 31.5 | 4.8 | |||||||||||||
% of gross profit |
117.8 | 102.6 | 15.2 | |||||||||||||
Operating margin |
(5.5 | ) | (0.8 | ) | (4.7 | ) | ||||||||||
OCG |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 151.7 | $ | 164.9 | (8.0 | )% | (6.1 | )% | ||||||||
Fee-based income |
18.4 | 20.6 | (10.9 | ) | (5.8 | ) | ||||||||||
Gross profit |
44.2 | 54.0 | (18.0 | ) | (14.9 | ) | ||||||||||
SG&A expenses |
52.3 | 51.6 | 1.3 | 5.4 | ||||||||||||
Earnings from operations |
(8.1 | ) | 2.4 | (452.5 | ) | |||||||||||
Gross profit rate |
29.2 | % | 32.7 | % | (3.5) | pts. | ||||||||||
Expense rates: |
||||||||||||||||
% of revenue |
34.5 | 31.3 | 3.2 | |||||||||||||
% of gross profit |
118.3 | 95.8 | 22.5 | |||||||||||||
Operating margin |
(5.3 | ) | 1.4 | (6.7 | ) | |||||||||||
Corporate Expense |
$ | (60.9 | ) | $ | (88.5 | ) | 31.2 | % | ||||||||
8
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)
| September 27, | December 28, | September 28, | ||||||||||
| 2009 | 2008 | 2008 | ||||||||||
Current Assets |
||||||||||||
Cash and equivalents |
$ | 91.0 | $ | 118.3 | $ | 113.6 | ||||||
Trade accounts receivable, less allowances of
$15.7, $17.0 and $18.6, respectively |
707.3 | 815.8 | 913.7 | |||||||||
Prepaid expenses and other current assets |
54.3 | 62.0 | 59.7 | |||||||||
Deferred taxes |
25.7 | 31.9 | 30.2 | |||||||||
Total current assets |
878.3 | 1,028.0 | 1,117.2 | |||||||||
Property and Equipment, Net |
132.5 | 151.3 | 168.3 | |||||||||
Noncurrent Deferred Taxes |
66.0 | 40.0 | 48.6 | |||||||||
Goodwill, Net |
67.3 | 117.8 | 161.4 | |||||||||
Other Assets |
134.6 | 120.2 | 134.2 | |||||||||
Total Assets |
$ | 1,278.7 | $ | 1,457.3 | $ | 1,629.7 | ||||||
Current Liabilities |
||||||||||||
Short-term borrowings and current portion of
long-term debt |
$ | 15.3 | $ | 35.2 | $ | 63.3 | ||||||
Accounts payable and accrued liabilities |
201.9 | 244.1 | 242.1 | |||||||||
Accrued payroll and related taxes |
229.6 | 243.2 | 282.0 | |||||||||
Accrued insurance |
25.0 | 26.3 | 23.3 | |||||||||
Income and other taxes |
29.8 | 51.8 | 62.4 | |||||||||
Total current liabilities |
501.6 | 600.6 | 673.1 | |||||||||
Noncurrent Liabilities |
||||||||||||
Long-term debt |
66.0 | 80.0 | 51.2 | |||||||||
Accrued insurance |
43.9 | 46.9 | 59.5 | |||||||||
Accrued retirement benefits |
74.0 | 61.6 | 70.2 | |||||||||
Other long-term liabilities |
14.2 | 15.3 | 17.0 | |||||||||
Total noncurrent liabilities |
198.1 | 203.8 | 197.9 | |||||||||
Stockholders’ Equity |
||||||||||||
Common stock |
40.1 | 40.1 | 40.1 | |||||||||
Treasury stock |
(107.6 | ) | (111.2 | ) | (111.3 | ) | ||||||
Paid-in capital |
35.9 | 35.8 | 34.5 | |||||||||
Earnings invested in the business |
579.7 | 676.0 | 769.6 | |||||||||
Accumulated other comprehensive income |
30.9 | 12.2 | 25.8 | |||||||||
Total stockholders’ equity |
579.0 | 652.9 | 758.7 | |||||||||
Total Liabilities and Stockholders’ Equity |
$ | 1,278.7 | $ | 1,457.3 | $ | 1,629.7 | ||||||
STATISTICS: |
||||||||||||
Working Capital |
$ | 376.7 | $ | 427.4 | $ | 444.1 | ||||||
Current Ratio |
1.8 | 1.7 | 1.7 | |||||||||
Debt-to-capital % |
12.3 | % | 15.0 | % | 13.1 | % | ||||||
Global Days Sales Outstanding |
52 | 50 | 51 | |||||||||
9
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 39 WEEKS ENDED SEPTEMBER 27, 2009 AND SEPTEMBER 28, 2008
(UNAUDITED)
(In millions of dollars)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 39 WEEKS ENDED SEPTEMBER 27, 2009 AND SEPTEMBER 28, 2008
(UNAUDITED)
(In millions of dollars)
| 2009 | 2008 | |||||||
Cash flows from operating activities |
||||||||
Net (loss) earnings |
$ | (96.3 | ) | $ | 6.5 | |||
Noncash adjustments: |
||||||||
Impairment of assets |
53.1 | — | ||||||
Depreciation and amortization |
30.9 | 34.1 | ||||||
Provision for bad debts |
2.7 | 4.8 | ||||||
Stock-based compensation |
3.6 | 3.0 | ||||||
Other, net |
(4.0 | ) | 1.8 | |||||
Changes in operating assets and liabilities |
50.7 | 36.2 | ||||||
Net cash from operating activities |
40.7 | 86.4 | ||||||
Cash flows from investing activities |
||||||||
Capital expenditures |
(7.9 | ) | (23.5 | ) | ||||
Acquisition of companies, net of cash received |
(7.5 | ) | (32.4 | ) | ||||
Other investing activities |
(2.9 | ) | (0.4 | ) | ||||
Net cash from investing activities |
(18.3 | ) | (56.3 | ) | ||||
Cash flows from financing activities |
||||||||
Net change in revolving line of credit |
(11.9 | ) | 12.5 | |||||
Repayment of debt |
(22.9 | ) | — | |||||
Dividend payments |
— | (14.2 | ) | |||||
Purchase of treasury stock |
— | (8.0 | ) | |||||
Other financing activities |
(18.5 | ) | 1.1 | |||||
Net cash from financing activities |
(53.3 | ) | (8.6 | ) | ||||
Effect of exchange rates on cash and equivalents |
3.6 | (0.7 | ) | |||||
Net change in cash and equivalents |
(27.3 | ) | 20.8 | |||||
Cash and equivalents at beginning of period |
118.3 | 92.8 | ||||||
Cash and equivalents at end of period |
$ | 91.0 | $ | 113.6 | ||||
10
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
| Third Quarter (Commercial, PT and OCG) | ||||||||||||||||
| % Change | ||||||||||||||||
| Constant | ||||||||||||||||
| 2009 | 2008 | US$ | Currency | |||||||||||||
Americas |
||||||||||||||||
United States |
$ | 623.1 | $ | 795.8 | (21.7 | )% | (21.7 | )% | ||||||||
Canada |
48.4 | 62.1 | (22.1 | ) | (17.7 | ) | ||||||||||
Mexico |
16.7 | 20.8 | (19.9 | ) | 3.0 | |||||||||||
Puerto Rico |
12.6 | 19.3 | (34.5 | ) | (34.5 | ) | ||||||||||
Total Americas |
700.8 | 898.0 | (22.0 | ) | (21.1 | ) | ||||||||||
EMEA |
||||||||||||||||
France |
69.4 | 93.7 | (25.9 | ) | (21.6 | ) | ||||||||||
United Kingdom |
50.8 | 102.5 | (50.5 | ) | (42.7 | ) | ||||||||||
Switzerland |
38.8 | 49.0 | (21.0 | ) | (21.3 | ) | ||||||||||
Italy |
17.4 | 33.9 | (48.6 | ) | (45.7 | ) | ||||||||||
Germany |
16.6 | 21.1 | (21.7 | ) | (17.3 | ) | ||||||||||
Russia |
16.5 | 25.4 | (34.9 | ) | (16.0 | ) | ||||||||||
Norway |
16.2 | 24.9 | (34.8 | ) | (23.3 | ) | ||||||||||
Portugal |
15.8 | 11.9 | 33.3 | 40.3 | ||||||||||||
Other |
26.9 | 40.4 | (33.3 | ) | (27.9 | ) | ||||||||||
Total EMEA |
268.4 | 402.8 | (33.4 | ) | (27.3 | ) | ||||||||||
APAC |
||||||||||||||||
Australia |
25.0 | 33.9 | (26.2 | ) | (20.8 | ) | ||||||||||
Singapore |
16.4 | 18.7 | (11.9 | ) | (9.2 | ) | ||||||||||
Malaysia |
12.3 | 13.4 | (8.9 | ) | (4.0 | ) | ||||||||||
Other |
26.3 | 31.0 | (15.3 | ) | (12.5 | ) | ||||||||||
Total APAC |
80.0 | 97.0 | (17.5 | ) | (13.6 | ) | ||||||||||
Total Kelly Services, Inc. |
$ | 1,049.2 | $ | 1,397.8 | (24.9) | % | (22.4 | )% | ||||||||
11
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
| September Year to Date (Commercial, PT and OCG) | ||||||||||||||||
| % Change | ||||||||||||||||
| Constant | ||||||||||||||||
| 2009 | 2008 | US$ | Currency | |||||||||||||
Americas |
||||||||||||||||
United States |
$ | 1,901.2 | $ | 2,455.6 | (22.6 | )% | (22.6 | )% | ||||||||
Canada |
131.9 | 187.6 | (29.7 | ) | (19.5 | ) | ||||||||||
Mexico |
47.5 | 58.1 | (18.3 | ) | 6.0 | |||||||||||
Puerto Rico |
42.9 | 58.7 | (27.0 | ) | (27.0 | ) | ||||||||||
Total Americas |
2,123.5 | 2,760.0 | (23.1 | ) | (21.9 | ) | ||||||||||
EMEA |
||||||||||||||||
France |
194.0 | 275.7 | (29.6 | ) | (21.6 | ) | ||||||||||
United Kingdom |
163.6 | 317.3 | (48.4 | ) | (34.2 | ) | ||||||||||
Switzerland |
99.8 | 143.5 | (30.5 | ) | (27.4 | ) | ||||||||||
Italy |
53.9 | 106.7 | (49.4 | ) | (43.5 | ) | ||||||||||
Germany |
47.5 | 65.3 | (27.3 | ) | (19.0 | ) | ||||||||||
Russia |
45.5 | 68.6 | (33.7 | ) | (10.7 | ) | ||||||||||
Norway |
44.4 | 69.2 | (35.8 | ) | (20.1 | ) | ||||||||||
Portugal |
40.1 | 11.9 | 237.7 | 274.2 | ||||||||||||
Other |
82.2 | 121.7 | (32.5 | ) | (22.7 | ) | ||||||||||
Total EMEA |
771.0 | 1,179.9 | (34.7 | ) | (23.9 | ) | ||||||||||
APAC |
||||||||||||||||
Australia |
67.9 | 107.7 | (36.9 | ) | (23.2 | ) | ||||||||||
Singapore |
46.5 | 55.2 | (15.6 | ) | (10.7 | ) | ||||||||||
Malaysia |
36.4 | 42.9 | (15.3 | ) | (7.4 | ) | ||||||||||
Other |
75.4 | 92.5 | (18.5 | ) | (10.7 | ) | ||||||||||
Total APAC |
226.2 | 298.3 | (24.1 | ) | (14.7 | ) | ||||||||||
Total Kelly Services, Inc. |
$ | 3,120.7 | $ | 4,238.2 | (26.4 | )% | (21.9 | )% | ||||||||
12