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): February 5, 2010
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 year ended January 3, 2010. 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 February 5, 2010. |
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: February 5, 2010 |
||||
| /s/ Patricia Little | ||||
| Patricia Little | ||||
| Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
||||
| Date: February 5, 2010 |
||||
| /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 February 5, 2010 |
4
Exhibit 99.1
KELLY SERVICES REPORTS 4th QUARTER 2009 AND YEAR-END RESULTS
TROY, MI (February 5, 2010) — Kelly Services, Inc., a world leader in workforce management
services and human resources solutions, today announced results for the fourth quarter and year
ended January 3, 2010.
Carl T. Camden, President and Chief Executive Officer, announced revenue for the fourth
quarter of 2009 totaled $1.2 billion, a 7% decrease compared to the corresponding quarter in 2008.
On a sequential basis, fourth quarter revenue increased 14%, compared to the third quarter in 2009.
Revenue for the full year totaled $4.3 billion, a 22% decrease compared to the prior year. The
fourth quarter included an extra week which adds approximately 4-5% to our quarterly comparisons
and 1% to annual comparisons.
Losses from operations for the fourth quarter of 2009 totaled $13.0 million, compared to
losses from operations of $83.7 million reported for the fourth quarter of 2008. Included in the
results from operations for the fourth quarter of 2009 are restructuring charges of $13.4 million.
The loss from operations in the fourth quarter of 2008 included impairment charges of $80.5 million
and restructuring charges of $4.3 million. Excluding the impairment and restructuring charges,
earnings from operations were $0.4 million in the fourth quarter of 2009 compared to $1.1 million
in 2008.
Losses from operations for the full year of 2009 totaled $146.1 million compared to a loss of
$70.3 million in 2008. The results for the full year 2009 include $53.1 million of impairment
charges, $5.3 million of legal charges and $29.9 million of restructuring charges. The results for
2008 included $80.5 million of impairment charges, $22.5 million of legal charges and $6.5 million
of restructuring charges.
Diluted losses per share from continuing operations in the fourth quarter of 2009 were $0.23
compared to fourth quarter 2008 losses of $2.55 per share. The restructuring charges totaled $0.29
per share in the fourth quarter of 2009. The impairment charges were $2.22 per share and the
restructuring charges were $0.11 per share in the fourth quarter of 2008.
Diluted losses per share from continuing operations for the full year of 2009 were $3.01
compared to 2008 losses of $2.35 per share. The impairment charges totaled $1.43 per share, legal
charges totaled $0.09 per share and restructuring charges totaled $0.69 per share in 2009. The
impairment charges were $2.22 per share, legal charges were $0.40 per share and the restructuring
charges were $0.15 per share in 2008.
Commenting on the fourth quarter results, Camden was optimistic. “We are very pleased that the
improved revenue trends in our business, combined with our significant cost reduction initiatives
allowed us to realize a small operating profit for the fourth quarter, excluding restructuring
charges.”
Camden added that while 2009 has been a challenging year for the staffing industry, “Kelly has
done an excellent job of re-shaping and strategically positioning the company to seize future
growth opportunities and create value for our shareholders.
“We look forward to 2010, and will focus on maximizing profitability across all operations;
accelerating growth of higher-margin Professional & Technical disciplines and outsourcing and
consulting services; winning new business; and helping our customers manage their ever-changing
workforce needs.”
In conjunction with its fourth quarter earnings release, Kelly Services, Inc. will host a
conference call at 9:00 a.m. (ET) on February 5, to review the results and answer questions. The
call may be accessed in one of the following ways:
Via the Telephone:
U.S.
|
1 800 288-9626 | |
International
|
1 612 332-0107 |
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
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 leader in providing workforce solutions. Kelly
offers a comprehensive array of outsourcing and consulting services as well as world-class staffing
on a temporary, temp-to-hire and permanent placement basis. Serving clients around the globe, Kelly
provides employment to 480,000 employees annually. Revenue in 2009 was $4.3 billion. Visit
www.kellyservices.com.
ANALYST CONTACT: James Polehna (248) 244-4586 james_polehna@kellyservices.com |
MEDIA CONTACT: Jane Stehney (248) 244-5630 jane_stehney@kellyservices.com |
2
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 14 WEEKS ENDED JANUARY 3, 2010 AND 13 WEEKS ENDED DECEMBER 28, 2008
(UNAUDITED)
(In millions of dollars except per share data)
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 14 WEEKS ENDED JANUARY 3, 2010 AND 13 WEEKS ENDED DECEMBER 28, 2008
(UNAUDITED)
(In millions of dollars except per share data)
| 2009 | 2008 | Change | % Change | |||||||||||||
Revenue from services |
$ | 1,194.1 | $ | 1,279.1 | $ | (85.0 | ) | (6.6 | )% | |||||||
Cost of services |
1,005.8 | 1,054.5 | (48.7 | ) | (4.6 | ) | ||||||||||
Gross profit |
188.3 | 224.6 | (36.3 | ) | (16.2 | ) | ||||||||||
Selling, general and administrative
expenses |
201.3 | 227.8 | (26.5 | ) | (11.7 | ) | ||||||||||
Asset impairments |
— | 80.5 | (80.5 | ) | (100.0 | ) | ||||||||||
Loss from operations |
(13.0 | ) | (83.7 | ) | 70.7 | 84.5 | ||||||||||
Other expense, net |
(0.9 | ) | (3.4 | ) | 2.5 | 73.8 | ||||||||||
Loss from continuing operations before taxes |
(13.9 | ) | (87.1 | ) | 73.2 | 84.1 | ||||||||||
Income taxes |
(5.7 | ) | 1.5 | (7.2 | ) | (469.5 | ) | |||||||||
Loss from continuing operations |
(8.2 | ) | (88.6 | ) | 80.4 | 90.8 | ||||||||||
Loss from discontinued operations, net of tax |
— | (0.1 | ) | 0.1 | 100.0 | |||||||||||
Net loss |
$ | (8.2 | ) | $ | (88.7 | ) | $ | 80.5 | 90.8 | % | ||||||
Basic loss per share on common stock |
||||||||||||||||
Loss from continuing operations |
$ | (0.23 | ) | $ | (2.55 | ) | $ | 2.32 | 91.0 | % | ||||||
Loss from discontinued operations |
— | (0.01 | ) | 0.01 | 100.0 | |||||||||||
Net loss |
(0.23 | ) | (2.55 | ) | 2.32 | 91.0 | ||||||||||
Diluted loss per share on common stock |
||||||||||||||||
Loss from continuing operations |
$ | (0.23 | ) | $ | (2.55 | ) | $ | 2.32 | 91.0 | % | ||||||
Loss from discontinued operations |
— | (0.01 | ) | 0.01 | 100.0 | |||||||||||
Net loss |
(0.23 | ) | (2.55 | ) | 2.32 | 91.0 | ||||||||||
STATISTICS: |
||||||||||||||||
Gross profit rate |
15.8 | % | 17.6 | % | (1.8 | ) pts. | ||||||||||
Selling, general and administrative expenses: |
||||||||||||||||
% of revenue |
16.8 | 17.8 | (1.0 | ) | ||||||||||||
% of gross profit |
106.9 | 101.4 | 5.5 | |||||||||||||
% Return — Loss from operations |
(1.1 | ) | (6.5 | ) | 5.4 | |||||||||||
Loss from continuing operations
before taxes |
(1.2 | ) | (6.8 | ) | 5.6 | |||||||||||
Loss from continuing operations |
(0.7 | ) | (6.9 | ) | 6.2 | |||||||||||
Net loss |
(0.7 | ) | (6.9 | ) | 6.2 | |||||||||||
Effective income tax rate |
41.0 | % | (1.8 | )% | 42.8 | pts. | ||||||||||
3
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 53 WEEKS ENDED JANUARY 3, 2010 AND 52 WEEKS ENDED DECEMBER 28, 2008
(In millions of dollars except per share data)
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 53 WEEKS ENDED JANUARY 3, 2010 AND 52 WEEKS ENDED DECEMBER 28, 2008
(In millions of dollars except per share data)
| 2009 | 2008 | Change | % Change | |||||||||||||
Revenue from services |
$ | 4,314.8 | $ | 5,517.3 | $ | (1,202.5 | ) | (21.8 | )% | |||||||
Cost of services |
3,613.1 | 4,539.7 | (926.6 | ) | (20.4 | ) | ||||||||||
Gross profit |
701.7 | 977.6 | (275.9 | ) | (28.2 | ) | ||||||||||
Selling, general and administrative
expenses |
794.7 | 967.4 | (172.7 | ) | (17.9 | ) | ||||||||||
Asset impairments |
53.1 | 80.5 | (27.4 | ) | (34.1 | ) | ||||||||||
Loss from operations |
(146.1 | ) | (70.3 | ) | (75.8 | ) | (107.8 | ) | ||||||||
Other expense, net |
(2.2 | ) | (3.4 | ) | 1.2 | 35.8 | ||||||||||
Loss from continuing operations before taxes |
(148.3 | ) | (73.7 | ) | (74.6 | ) | (101.1 | ) | ||||||||
Income taxes |
(43.2 | ) | 8.0 | (51.2 | ) | NM | ||||||||||
Loss from continuing operations |
(105.1 | ) | (81.7 | ) | (23.4 | ) | (28.6 | ) | ||||||||
Earnings (loss) from discontinued operations, net of tax |
0.6 | (0.5 | ) | 1.1 | 212.0 | |||||||||||
Net loss |
$ | (104.5 | ) | $ | (82.2 | ) | $ | (22.3 | ) | (27.0 | )% | |||||
Basic loss per share on common stock |
||||||||||||||||
Loss from continuing operations |
$ | (3.01 | ) | $ | (2.35 | ) | $ | (0.66 | ) | (28.1 | )% | |||||
Earnings (loss) from discontinued operations |
0.02 | (0.02 | ) | 0.04 | 200.0 | |||||||||||
Net loss |
(3.00 | ) | (2.37 | ) | (0.63 | ) | (26.6 | ) | ||||||||
Diluted loss per share on common stock |
||||||||||||||||
Loss from continuing operations |
$ | (3.01 | ) | $ | (2.35 | ) | $ | (0.66 | ) | (28.1 | )% | |||||
Earnings (loss) from discontinued operations |
0.02 | (0.02 | ) | 0.04 | 200.0 | |||||||||||
Net loss |
(3.00 | ) | (2.37 | ) | (0.63 | ) | (26.6 | ) | ||||||||
STATISTICS: |
||||||||||||||||
Gross profit rate |
16.3 | % | 17.7 | % | (1.4 | ) pts. | ||||||||||
Selling, general and administrative expenses: |
||||||||||||||||
% of revenue |
18.4 | 17.5 | 0.9 | |||||||||||||
% of gross profit |
113.2 | 99.0 | 14.2 | |||||||||||||
% Return — Loss from operations |
(3.4 | ) | (1.3 | ) | (2.1 | ) | ||||||||||
Loss from continuing operations
before taxes |
(3.4 | ) | (1.3 | ) | (2.1 | ) | ||||||||||
Loss from continuing operations |
(2.4 | ) | (1.5 | ) | (0.9 | ) | ||||||||||
Net loss |
(2.4 | ) | (1.5 | ) | (0.9 | ) | ||||||||||
Effective income tax rate |
29.1 | % | (10.8 | )% | 39.9 | 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)
| Fourth Quarter | ||||||||||||||||
| Constant | ||||||||||||||||
| 2009 | 2008 | Currency | ||||||||||||||
| (14 Weeks) | (13 Weeks) | Change | Change | |||||||||||||
Americas Commercial |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 557.4 | $ | 595.6 | (6.4 | )% | (7.3 | )% | ||||||||
Fee-based income |
1.5 | 2.8 | (46.7 | ) | (48.3 | ) | ||||||||||
Gross profit |
79.8 | 96.4 | (17.2 | ) | (18.0 | ) | ||||||||||
SG&A expenses excluding restructuring charges |
67.9 | 79.7 | (14.8 | ) | ||||||||||||
Restructuring charges |
3.5 | 0.6 | 450.2 | |||||||||||||
Total SG&A expenses |
71.4 | 80.3 | (11.1 | ) | (11.9 | ) | ||||||||||
Earnings from operations |
8.4 | 16.1 | (47.7 | ) | ||||||||||||
Earnings from operations excluding restructuring charges |
11.9 | 16.7 | (28.9 | ) | ||||||||||||
Gross profit rate |
14.3 | % | 16.2 | % | (1.9 | ) pts. | ||||||||||
Expense rates (excluding restructuring charges): |
||||||||||||||||
% of revenue |
12.2 | 13.4 | (1.2 | ) | ||||||||||||
% of gross profit |
85.0 | 82.5 | 2.5 | |||||||||||||
Operating margin (excluding restructuring charges) |
2.2 | 2.8 | (0.6 | ) | ||||||||||||
Americas PT |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 208.3 | $ | 219.3 | (5.0 | )% | (5.3 | )% | ||||||||
Fee-based income |
2.2 | 3.7 | (39.8 | ) | (40.0 | ) | ||||||||||
Gross profit |
31.9 | 37.5 | (14.9 | ) | (15.1 | ) | ||||||||||
SG&A expenses excluding restructuring charges |
24.7 | 27.8 | (11.0 | ) | ||||||||||||
Restructuring charges |
0.8 | — | NM | |||||||||||||
Total SG&A expenses |
25.5 | 27.8 | (8.1 | ) | (8.3 | ) | ||||||||||
Earnings from operations |
6.4 | 9.7 | (34.4 | ) | ||||||||||||
Earnings from operations excluding restructuring charges |
7.2 | 9.7 | (26.2 | ) | ||||||||||||
Gross profit rate |
15.3 | % | 17.1 | % | (1.8 | ) pts. | ||||||||||
Expense rates (excluding restructuring charges): |
||||||||||||||||
% of revenue |
11.9 | 12.7 | (0.8 | ) | ||||||||||||
% of gross profit |
77.5 | 74.1 | 3.4 | |||||||||||||
Operating margin (excluding restructuring charges) |
3.4 | 4.4 | (1.0 | ) | ||||||||||||
EMEA Commercial |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 238.9 | $ | 283.3 | (15.7 | )% | (22.8 | )% | ||||||||
Fee-based income |
4.3 | 7.5 | (42.6 | ) | (45.6 | ) | ||||||||||
Gross profit |
37.4 | 47.6 | (21.5 | ) | (28.3 | ) | ||||||||||
SG&A expenses excluding restructuring charges |
35.2 | 51.4 | (31.4 | ) | ||||||||||||
Restructuring charges |
4.9 | 3.0 | 60.0 | |||||||||||||
Total SG&A expenses |
40.1 | 54.4 | (26.3 | ) | (32.5 | ) | ||||||||||
Earnings from operations |
(2.7 | ) | (6.8 | ) | 59.9 | |||||||||||
Earnings from operations excluding restructuring charges |
2.2 | (3.8 | ) | NM | ||||||||||||
Gross profit rate |
15.7 | % | 16.8 | % | (1.1 | ) pts. | ||||||||||
Expense rates (excluding restructuring charges): |
||||||||||||||||
% of revenue |
14.8 | 18.1 | (3.3 | ) | ||||||||||||
% of gross profit |
94.2 | 107.8 | (13.6 | ) | ||||||||||||
Operating margin (excluding restructuring charges) |
0.9 | (1.3 | ) | 2.2 | ||||||||||||
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)
| Fourth Quarter | ||||||||||||||||
| Constant | ||||||||||||||||
| 2009 | 2008 | Currency | ||||||||||||||
| (14 Weeks) | (13 Weeks) | Change | Change | |||||||||||||
EMEA PT |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 39.6 | $ | 38.4 | 3.0 | % | (6.1 | )% | ||||||||
Fee-based income |
3.6 | 5.5 | (34.4 | ) | (37.4 | ) | ||||||||||
Gross profit |
9.8 | 11.2 | (12.7 | ) | (19.4 | ) | ||||||||||
Total SG&A expenses |
10.6 | 11.7 | (9.5 | ) | (17.1 | ) | ||||||||||
Earnings from operations |
(0.8 | ) | (0.5 | ) | (58.0 | ) | ||||||||||
Gross profit rate |
24.7 | % | 29.1 | % | (4.4 | ) pts. | ||||||||||
Expense rates: |
||||||||||||||||
% of revenue |
26.8 | 30.5 | (3.7 | ) | ||||||||||||
% of gross profit |
108.5 | 104.7 | 3.8 | |||||||||||||
Operating margin |
(2.1 | ) | (1.4 | ) | (0.7 | ) | ||||||||||
APAC Commercial |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 83.0 | $ | 73.5 | 12.9 | % | (2.2 | )% | ||||||||
Fee-based income |
2.9 | 3.0 | (6.2 | ) | (15.2 | ) | ||||||||||
Gross profit |
12.1 | 11.4 | 6.8 | (7.8 | ) | |||||||||||
SG&A expenses excluding restructuring charges |
11.6 | 12.4 | (7.2 | ) | ||||||||||||
Restructuring charges |
1.4 | — | NM | |||||||||||||
Total SG&A expenses |
13.0 | 12.4 | 4.6 | (9.8 | ) | |||||||||||
Earnings from operations |
(0.9 | ) | (1.0 | ) | 19.7 | |||||||||||
Earnings from operations excluding restructuring charges |
0.5 | (1.0 | ) | NM | ||||||||||||
Gross profit rate |
14.6 | % | 15.5 | % | (0.9 | ) pts. | ||||||||||
Expense rates (excluding restructuring charges): |
||||||||||||||||
% of revenue |
13.9 | 16.9 | (3.0 | ) | ||||||||||||
% of gross profit |
95.0 | 109.3 | (14.3 | ) | ||||||||||||
Operating margin (excluding restructuring charges) |
0.7 | (1.4 | ) | 2.1 | ||||||||||||
APAC PT |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 7.2 | $ | 7.2 | (0.4 | )% | (15.9 | )% | ||||||||
Fee-based income |
1.0 | 0.8 | 29.9 | 17.7 | ||||||||||||
Gross profit |
2.1 | 1.9 | 7.8 | (7.0 | ) | |||||||||||
Total SG&A expenses |
2.6 | 2.2 | 19.3 | 2.4 | ||||||||||||
Earnings from operations |
(0.5 | ) | (0.3 | ) | (106.4 | ) | ||||||||||
Gross profit rate |
28.6 | % | 26.4 | % | 2.2 | pts. | ||||||||||
Expense rates: |
||||||||||||||||
% of revenue |
35.8 | 29.9 | 5.9 | |||||||||||||
% of gross profit |
125.2 | 113.1 | 12.1 | |||||||||||||
Operating margin |
(7.2 | ) | (3.5 | ) | (3.7 | ) | ||||||||||
6
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)
| Fourth Quarter | ||||||||||||||||
| Constant | ||||||||||||||||
| 2009 | 2008 | Currency | ||||||||||||||
| (14 Weeks) | (13 Weeks) | Change | Change | |||||||||||||
OCG |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 68.2 | $ | 68.4 | (0.3 | )% | (1.3 | )% | ||||||||
Fee-based income |
6.0 | 7.2 | (16.2 | ) | (19.6 | ) | ||||||||||
Gross profit |
15.5 | 18.9 | (18.0 | ) | (19.6 | ) | ||||||||||
SG&A expenses excluding restructuring charges |
17.9 | 18.0 | (0.8 | ) | ||||||||||||
Restructuring charges |
1.3 | 0.4 | 239.5 | |||||||||||||
Total SG&A expenses |
19.2 | 18.4 | 4.1 | 1.1 | ||||||||||||
Earnings from operations |
(3.7 | ) | 0.5 | NM | ||||||||||||
Earnings from operations excluding restructuring charges |
(2.4 | ) | 0.9 | NM | ||||||||||||
Gross profit rate |
22.7 | % | 27.6 | % | (4.9 | ) pts. | ||||||||||
Expense rates (excluding restructuring charges): |
||||||||||||||||
% of revenue |
26.2 | 26.4 | (0.2 | ) | ||||||||||||
% of gross profit |
115.7 | 95.6 | 20.1 | |||||||||||||
Operating margin (excluding restructuring charges) |
(3.6 | ) | 1.2 | (4.8 | ) | |||||||||||
Corporate Expense |
||||||||||||||||
SG&A expenses excluding restructuring charges |
$ | 17.7 | $ | 20.6 | (14.2 | )% | ||||||||||
Restructuring charges |
1.5 | 0.3 | 418.1 | |||||||||||||
Total SG&A expenses |
19.2 | 20.9 | (8.1 | ) | (8.1 | ) | ||||||||||
Asset Impairments |
$ | — | $ | 80.5 | (100.0 | )% | ||||||||||
Consolidated Total (excluding intersegment activity) |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 1,194.1 | $ | 1,279.1 | (6.6 | )% | (10.0 | )% | ||||||||
Fee-based income |
21.5 | 30.5 | (29.5 | ) | (33.0 | ) | ||||||||||
Gross profit |
188.3 | 224.6 | (16.2 | ) | (19.4 | ) | ||||||||||
SG&A expenses excluding restructuring charges |
187.9 | 223.5 | (16.0 | ) | ||||||||||||
Restructuring charges |
13.4 | 4.3 | 209.0 | |||||||||||||
Total SG&A expenses |
201.3 | 227.8 | (11.7 | ) | (15.1 | ) | ||||||||||
Earnings from operations |
(13.0 | ) | (83.7 | ) | 84.5 | |||||||||||
Earnings from operations excluding restructuring charges |
0.4 | (79.4 | ) | NM | ||||||||||||
Gross profit rate |
15.8 | % | 17.6 | % | (1.8 | ) pts. | ||||||||||
Expense rates (excluding restructuring charges): |
||||||||||||||||
% of revenue |
15.7 | 17.5 | (1.8 | ) | ||||||||||||
% of gross profit |
99.8 | 99.4 | 0.4 | |||||||||||||
Operating margin (excluding restructuring charges) |
0.0 | (6.2 | ) | 6.2 | ||||||||||||
7
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)
| December Year to Date | ||||||||||||||||
| Constant | ||||||||||||||||
| 2009 | 2008 | Currency | ||||||||||||||
| (53 Weeks) | (52 Weeks) | Change | Change | |||||||||||||
Americas Commercial |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 1,980.3 | $ | 2,516.7 | (21.3 | )% | (20.3 | )% | ||||||||
Fee-based income |
6.6 | 15.7 | (58.4 | ) | (56.8 | ) | ||||||||||
Gross profit |
290.7 | 399.0 | (27.1 | ) | (26.3 | ) | ||||||||||
SG&A expenses excluding restructuring charges |
273.2 | 328.2 | (16.7 | ) | ||||||||||||
Restructuring charges |
7.2 | 0.9 | NM | |||||||||||||
Total SG&A expenses |
280.4 | 329.1 | (14.8 | ) | (13.8 | ) | ||||||||||
Earnings from operations |
10.3 | 69.9 | (85.1 | ) | ||||||||||||
Earnings from operations excluding restructuring charges |
17.5 | 70.8 | (75.2 | ) | ||||||||||||
Gross profit rate |
14.7 | % | 15.9 | % | (1.2 | ) pts. | ||||||||||
Expense rates (excluding restructuring charges): |
||||||||||||||||
% of revenue |
13.8 | 13.0 | 0.8 | |||||||||||||
% of gross profit |
93.9 | 82.2 | 11.7 | |||||||||||||
Operating margin (excluding restructuring charges) |
0.9 | 2.8 | (1.9 | ) | ||||||||||||
Americas PT |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 792.6 | $ | 938.2 | (15.5 | )% | (15.4 | )% | ||||||||
Fee-based income |
9.4 | 19.4 | (51.5 | ) | (51.4 | ) | ||||||||||
Gross profit |
125.1 | 161.7 | (22.6 | ) | (22.5 | ) | ||||||||||
SG&A expenses excluding restructuring charges |
100.9 | 113.3 | (10.9 | ) | ||||||||||||
Restructuring charges |
1.0 | — | NM | |||||||||||||
Total SG&A expenses |
101.9 | 113.3 | (10.0 | ) | (9.8 | ) | ||||||||||
Earnings from operations |
23.2 | 48.4 | (52.2 | ) | ||||||||||||
Earnings from operations excluding restructuring charges |
24.2 | 48.4 | (50.0 | ) | ||||||||||||
Gross profit rate |
15.8 | % | 17.2 | % | (1.4 | ) pts. | ||||||||||
Expense rates (excluding restructuring charges): |
||||||||||||||||
% of revenue |
12.7 | 12.1 | 0.6 | |||||||||||||
% of gross profit |
80.7 | 70.1 | 10.6 | |||||||||||||
Operating margin (excluding restructuring charges) |
3.0 | 5.2 | (2.2 | ) | ||||||||||||
EMEA Commercial |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 895.2 | $ | 1,310.5 | (31.7 | )% | (24.9 | )% | ||||||||
Fee-based income |
16.6 | 39.5 | (58.0 | ) | (52.6 | ) | ||||||||||
Gross profit |
140.2 | 227.3 | (38.4 | ) | (32.5 | ) | ||||||||||
SG&A expenses excluding restructuring charges |
150.3 | 226.5 | (33.7 | ) | ||||||||||||
Restructuring charges |
15.6 | 3.9 | 301.4 | |||||||||||||
Total SG&A expenses |
165.9 | 230.4 | (28.0 | ) | (20.2 | ) | ||||||||||
Earnings from operations |
(25.7 | ) | (3.1 | ) | NM | |||||||||||
Earnings from operations excluding restructuring charges |
(10.1 | ) | 0.8 | NM | ||||||||||||
Gross profit rate |
15.7 | % | 17.4 | % | (1.7 | ) pts. | ||||||||||
Expense rates (excluding restructuring charges): |
||||||||||||||||
% of revenue |
16.8 | 17.3 | (0.5 | ) | ||||||||||||
% of gross profit |
107.2 | 99.6 | 7.6 | |||||||||||||
Operating margin (excluding restructuring charges) |
(1.1 | ) | 0.1 | (1.2 | ) | |||||||||||
8
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)
| December Year to Date | ||||||||||||||||
| Constant | ||||||||||||||||
| 2009 | 2008 | Currency | ||||||||||||||
| (53 Weeks) | (52 Weeks) | Change | Change | |||||||||||||
EMEA PT |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 141.9 | $ | 172.5 | (17.8 | )% | (10.7 | )% | ||||||||
Fee-based income |
15.7 | 26.8 | (41.2 | ) | (33.2 | ) | ||||||||||
Gross profit |
37.8 | 51.2 | (26.2 | ) | (18.8 | ) | ||||||||||
Total SG&A expenses |
40.6 | 48.9 | (16.9 | ) | (8.5 | ) | ||||||||||
Earnings from operations |
(2.8 | ) | 2.3 | NM | ||||||||||||
Gross profit rate |
26.6 | % | 29.7 | % | (3.1 | ) pts. | ||||||||||
Expense rates: |
||||||||||||||||
% of revenue |
28.6 | 28.3 | 0.3 | |||||||||||||
% of gross profit |
107.6 | 95.5 | 12.1 | |||||||||||||
Operating margin |
(2.0 | ) | 1.3 | (3.3 | ) | |||||||||||
APAC Commercial |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 284.9 | $ | 336.0 | (15.2 | )% | (11.0) | % | ||||||||
Fee-based income |
9.7 | 17.0 | (43.0 | ) | (40.6 | ) | ||||||||||
Gross profit |
41.6 | 56.3 | (26.1 | ) | (22.6 | ) | ||||||||||
SG&A expenses excluding restructuring charges |
44.6 | 56.6 | (21.3 | ) | ||||||||||||
Restructuring charges |
1.6 | — | NM | |||||||||||||
Total SG&A expenses |
46.2 | 56.6 | (18.5 | ) | (14.8 | ) | ||||||||||
Earnings from operations |
(4.6 | ) | (0.3 | ) | NM | |||||||||||
Earnings from operations excluding restructuring charges |
(3.0 | ) | (0.3 | ) | NM | |||||||||||
Gross profit rate |
14.6 | % | 16.8 | % | (2.2 | ) pts. | ||||||||||
Expense rates (excluding restructuring charges): |
||||||||||||||||
% of revenue |
15.6 | 16.8 | (1.2 | ) | ||||||||||||
% of gross profit |
107.0 | 100.5 | 6.5 | |||||||||||||
Operating margin (excluding restructuring charges) |
(1.0 | ) | (0.1 | ) | (0.9 | ) | ||||||||||
APAC PT |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 25.4 | $ | 34.3 | (26.0 | )% | (24.3 | )% | ||||||||
Fee-based income |
3.8 | 5.1 | (25.0 | ) | (21.0 | ) | ||||||||||
Gross profit |
7.7 | 10.2 | (25.1 | ) | (22.6 | ) | ||||||||||
Total SG&A expenses |
9.2 | 10.7 | (14.2 | ) | (9.9 | ) | ||||||||||
Earnings from operations |
(1.5 | ) | (0.5 | ) | (224.9 | ) | ||||||||||
Gross profit rate |
30.2 | % | 29.8 | % | 0.4 | pts. | ||||||||||
Expense rates: |
||||||||||||||||
% of revenue |
36.2 | 31.2 | 5.0 | |||||||||||||
% of gross profit |
119.8 | 104.6 | 15.2 | |||||||||||||
Operating margin |
(6.0 | ) | (1.4 | ) | (4.6 | ) | ||||||||||
9
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)
| December Year to Date | ||||||||||||||||
| Constant | ||||||||||||||||
| 2009 | 2008 | Currency | ||||||||||||||
| (53 Weeks) | (52 Weeks) | Change | Change | |||||||||||||
OCG |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 219.9 | $ | 233.3 | (5.7 | )% | (4.7 | )% | ||||||||
Fee-based income |
24.4 | 27.8 | (12.3 | ) | (9.4 | ) | ||||||||||
Gross profit |
59.7 | 72.9 | (18.0 | ) | (16.1 | ) | ||||||||||
SG&A expenses excluding restructuring charges |
69.6 | 69.5 | 0.0 | |||||||||||||
Restructuring charges |
1.9 | 0.5 | 328.4 | |||||||||||||
Total SG&A expenses |
71.5 | 70.0 | 2.0 | 4.3 | ||||||||||||
Earnings from operations |
(11.8 | ) | 2.9 | NM | ||||||||||||
Earnings from operations excluding restructuring charges |
(9.9 | ) | 3.4 | NM | ||||||||||||
Gross profit rate |
27.2 | % | 31.2 | % | (4.0 | ) pts. | ||||||||||
Expense rates (excluding restructuring charges): |
||||||||||||||||
% of revenue |
31.7 | 29.8 | 1.9 | |||||||||||||
% of gross profit |
116.6 | 95.6 | 21.0 | |||||||||||||
Operating margin (excluding restructuring charges) |
(4.5 | ) | 1.4 | (5.9 | ) | |||||||||||
Corporate Expense |
||||||||||||||||
SG&A expenses excluding restructuring charges |
$ | 77.5 | $ | 108.2 | (28.4 | )% | ||||||||||
Restructuring charges |
2.6 | 1.2 | 116.3 | |||||||||||||
Total SG&A expenses |
80.1 | 109.4 | (26.8 | ) | (26.8 | ) | ||||||||||
Asset Impairments |
$ | 53.1 | $ | 80.5 | (34.1 | )% | ||||||||||
Consolidated Total (excluding intersegment activity) |
||||||||||||||||
Revenue from services (including fee-based income) |
$ | 4,314.8 | $ | 5,517.3 | (21.8 | )% | (19.2 | )% | ||||||||
Fee-based income |
86.1 | 151.3 | (43.1 | ) | (39.2 | ) | ||||||||||
Gross profit |
701.7 | 977.6 | (28.2 | ) | (25.7 | ) | ||||||||||
SG&A expenses excluding restructuring charges |
764.8 | 960.9 | (20.4 | ) | ||||||||||||
Restructuring charges |
29.9 | 6.5 | 360.9 | |||||||||||||
Total SG&A expenses |
794.7 | 967.4 | (17.9 | ) | (14.8 | ) | ||||||||||
Earnings from operations |
(146.1 | ) | (70.3 | ) | (107.8 | ) | ||||||||||
Earnings from operations excluding restructuring charges |
(116.2 | ) | (63.8 | ) | (82.0 | ) | ||||||||||
Gross profit rate |
16.3 | % | 17.7 | % | (1.4 | ) pts. | ||||||||||
Expense rates (excluding restructuring charges): |
||||||||||||||||
% of revenue |
17.7 | 17.4 | 0.3 | |||||||||||||
% of gross profit |
109.0 | 98.3 | 10.7 | |||||||||||||
Operating margin (excluding restructuring charges) |
(2.7 | ) | (1.2 | ) | (1.5 | ) | ||||||||||
10
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions of dollars)
CONSOLIDATED BALANCE SHEETS
(In millions of dollars)
| January 3, | December 28, | |||||||
| 2010 | 2008 | |||||||
Current Assets |
||||||||
Cash and equivalents |
$ | 88.9 | $ | 118.3 | ||||
Trade accounts receivable, less allowances of
$15.0 and $17.0, respectively |
717.9 | 815.8 | ||||||
Prepaid expenses and other current assets |
70.6 | 62.0 | ||||||
Deferred taxes |
21.0 | 31.9 | ||||||
Total current assets |
898.4 | 1,028.0 | ||||||
Property and Equipment, Net |
127.1 | 151.3 | ||||||
Noncurrent Deferred Taxes |
77.5 | 40.0 | ||||||
Goodwill, Net |
67.3 | 117.8 | ||||||
Other Assets |
131.4 | 120.2 | ||||||
Total Assets |
$ | 1,301.7 | $ | 1,457.3 | ||||
Current Liabilities |
||||||||
Short-term borrowings and current portion of
long-term debt |
$ | 79.6 | $ | 35.2 | ||||
Accounts payable and accrued liabilities |
182.6 | 244.1 | ||||||
Accrued payroll and related taxes |
208.3 | 243.2 | ||||||
Accrued insurance |
19.7 | 26.3 | ||||||
Income and other taxes |
47.4 | 51.8 | ||||||
Total current
liabilities |
537.6 | 600.6 | ||||||
Noncurrent Liabilities |
||||||||
Long-term debt |
57.5 | 80.0 | ||||||
Accrued insurance |
47.3 | 46.9 | ||||||
Accrued retirement benefits |
76.9 | 61.6 | ||||||
Other long-term liabilities |
16.0 | 15.3 | ||||||
Total noncurrent
liabilities |
197.7 | 203.8 | ||||||
Stockholders’ Equity |
||||||||
Common stock |
40.1 | 40.1 | ||||||
Treasury stock |
(107.2 | ) | (111.2 | ) | ||||
Paid-in capital |
36.9 | 35.8 | ||||||
Earnings invested in the business |
571.5 | 676.0 | ||||||
Accumulated other comprehensive income |
25.1 | 12.2 | ||||||
Total stockholders’
equity |
566.4 | 652.9 | ||||||
Total Liabilities and Stockholders’ Equity |
$ | 1,301.7 | $ | 1,457.3 | ||||
STATISTICS: |
||||||||
Working Capital |
$ | 360.8 | $ | 427.4 | ||||
Current Ratio |
1.7 | 1.7 | ||||||
Debt-to-capital % |
19.5 | % | 15.0 | % | ||||
Global Days Sales Outstanding |
51 | 50 | ||||||
11
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 53 WEEKS ENDED JANUARY 3, 2010 AND 52 WEEKS ENDED DECEMBER 28, 2008
(In millions of dollars)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 53 WEEKS ENDED JANUARY 3, 2010 AND 52 WEEKS ENDED DECEMBER 28, 2008
(In millions of dollars)
| 2009 | 2008 | |||||||
Cash flows from operating activities |
||||||||
Net loss |
$ | (104.5 | ) | $ | (82.2 | ) | ||
Noncash adjustments: |
||||||||
Impairment of assets |
53.1 | 80.5 | ||||||
Depreciation and amortization |
40.9 | 46.0 | ||||||
Provision for bad debts |
2.2 | 6.7 | ||||||
Stock-based compensation |
5.1 | 4.4 | ||||||
Other, net |
(2.2 | ) | 3.7 | |||||
Changes in operating assets and liabilities |
(11.8 | ) | 42.5 | |||||
Net cash from operating activities |
(17.2 | ) | 101.6 | |||||
Cash flows from investing activities |
||||||||
Capital expenditures |
(13.1 | ) | (31.1 | ) | ||||
Acquisition of companies, net of cash received |
(7.5 | ) | (32.7 | ) | ||||
Other investing activities |
(2.8 | ) | (0.2 | ) | ||||
Net cash from investing activities |
(23.4 | ) | (64.0 | ) | ||||
Cash flows from financing activities |
||||||||
Net change in revolving line of credit |
52.7 | (34.2 | ) | |||||
Repayment of debt |
(30.5 | ) | — | |||||
Proceeds from debt |
— | 42.5 | ||||||
Dividend payments |
— | (19.1 | ) | |||||
Purchase of treasury stock |
— | (8.0 | ) | |||||
Other financing activities |
(12.8 | ) | 10.0 | |||||
Net cash from financing activities |
9.4 | (8.8 | ) | |||||
Effect of exchange rates on cash and equivalents |
1.8 | (3.3 | ) | |||||
Net change in cash and equivalents |
(29.4 | ) | 25.5 | |||||
Cash and equivalents at beginning of period |
118.3 | 92.8 | ||||||
Cash and equivalents at end of period |
$ | 88.9 | $ | 118.3 | ||||
12
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
| Fourth Quarter (Commercial, PT and OCG) | ||||||||||||||||
| % Change | ||||||||||||||||
| 2009 | 2008 | Constant | ||||||||||||||
| (14 Weeks) | (13 Weeks) | US$ | Currency | |||||||||||||
Americas |
||||||||||||||||
United States |
$ | 733.1 | $ | 781.5 | (6.2 | )% | (6.2 | )% | ||||||||
Canada |
51.5 | 50.2 | 2.7 | (9.9 | ) | |||||||||||
Mexico |
19.0 | 18.1 | 5.3 | 6.6 | ||||||||||||
Puerto Rico |
15.0 | 18.7 | (19.7 | ) | (19.7 | ) | ||||||||||
Total Americas |
818.6 | 868.5 | (5.7 | ) | (6.4 | ) | ||||||||||
EMEA |
||||||||||||||||
France |
78.7 | 75.1 | 4.7 | (6.2 | ) | |||||||||||
United Kingdom |
43.1 | 80.7 | (46.5 | ) | (48.1 | ) | ||||||||||
Switzerland |
38.8 | 41.4 | (6.4 | ) | (17.5 | ) | ||||||||||
Russia |
19.9 | 22.3 | (10.8 | ) | (3.3 | ) | ||||||||||
Portugal |
19.4 | 15.6 | 24.4 | 11.3 | ||||||||||||
Italy |
19.0 | 25.2 | (24.8 | ) | (32.9 | ) | ||||||||||
Germany |
17.6 | 17.7 | 0.3 | (10.5 | ) | |||||||||||
Norway |
17.3 | 16.9 | 1.7 | (14.2 | ) | |||||||||||
Other |
29.0 | 32.7 | (11.4 | ) | (20.1 | ) | ||||||||||
Total EMEA |
282.8 | 327.6 | (13.7 | ) | (21.0 | ) | ||||||||||
APAC |
||||||||||||||||
Australia |
30.4 | 26.0 | 16.9 | (13.1 | ) | |||||||||||
Singapore |
17.9 | 16.1 | 10.9 | 4.1 | ||||||||||||
Malaysia |
13.7 | 12.3 | 12.3 | 7.7 | ||||||||||||
Other |
30.7 | 28.6 | 7.0 | (3.8 | ) | |||||||||||
Total APAC |
92.7 | 83.0 | 11.6 | (3.5 | ) | |||||||||||
Total Kelly Services, Inc. |
$ | 1,194.1 | $ | 1,279.1 | (6.6 | )% | (10.0 | )% | ||||||||
13
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
| December Year to Date (Commercial, PT and OCG) | ||||||||||||||||
| % Change | ||||||||||||||||
| 2009 | 2008 | Constant | ||||||||||||||
| (53 Weeks) | (52 Weeks) | US$ | Currency | |||||||||||||
Americas |
||||||||||||||||
United States |
$ | 2,634.3 | $ | 3,237.1 | (18.6 | )% | (18.6 | )% | ||||||||
Canada |
183.4 | 237.8 | (22.9 | ) | (17.5 | ) | ||||||||||
Mexico |
66.5 | 76.2 | (12.7 | ) | 6.2 | |||||||||||
Puerto Rico |
57.9 | 77.4 | (25.2 | ) | (25.2 | ) | ||||||||||
Total Americas |
2,942.1 | 3,628.5 | (18.9 | ) | (18.2 | ) | ||||||||||
EMEA |
||||||||||||||||
France |
272.7 | 350.8 | (22.3 | ) | (18.3 | ) | ||||||||||
United Kingdom |
206.7 | 398.0 | (48.1 | ) | (37.0 | ) | ||||||||||
Switzerland |
138.6 | 184.9 | (25.1 | ) | (25.2 | ) | ||||||||||
Italy |
72.9 | 131.9 | (44.7 | ) | (41.5 | ) | ||||||||||
Russia |
65.4 | 90.9 | (28.0 | ) | (8.9 | ) | ||||||||||
Germany |
65.1 | 83.0 | (21.5 | ) | (17.2 | ) | ||||||||||
Norway |
61.7 | 86.1 | (28.4 | ) | (18.9 | ) | ||||||||||
Portugal |
59.5 | 27.5 | 116.5 | 124.9 | ||||||||||||
Other |
111.2 | 154.4 | (28.0 | ) | (22.1 | ) | ||||||||||
Total EMEA |
1,053.8 | 1,507.5 | (30.1 | ) | (23.3 | ) | ||||||||||
APAC |
||||||||||||||||
Australia |
98.3 | 133.7 | (26.4 | ) | (21.3 | ) | ||||||||||
Singapore |
64.4 | 71.3 | (9.6 | ) | (7.3 | ) | ||||||||||
Malaysia |
50.1 | 55.2 | (9.2 | ) | (4.1 | ) | ||||||||||
Other |
106.1 | 121.1 | (12.5 | ) | (9.0 | ) | ||||||||||
Total APAC |
318.9 | 381.3 | (16.4 | ) | (12.3 | ) | ||||||||||
Total Kelly Services, Inc. |
$ | 4,314.8 | $ | 5,517.3 | (21.8 | )% | (19.2 | )% | ||||||||
14
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
(In millions of dollars except per share data)
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
(In millions of dollars except per share data)
| Fourth Quarter | December Year to Date | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Pretax loss from operations |
$ | (13.0 | ) | $ | (83.7 | ) | $ | (146.1 | ) | $ | (70.3 | ) | ||||
Restructuring charges (Note 1) |
13.4 | 4.3 | 29.9 | 6.5 | ||||||||||||
Asset impairments (Note 2) |
— | 80.5 | 53.1 | 80.5 | ||||||||||||
Litigation charges |
— | — | 5.3 | 22.5 | ||||||||||||
Earnings (loss) from operations excluding
restructuring, asset impairment and litigation charges |
$ | 0.4 | $ | 1.1 | $ | (57.8 | ) | $ | 39.2 | |||||||
| Fourth Quarter | ||||||||||||||||
| 2009 | 2008 | |||||||||||||||
| Amount | Per Share | Amount | Per Share | |||||||||||||
Loss from continuing operations, net of tax |
$ | (8.2 | ) | $ | (0.23 | ) | $ | (88.6 | ) | $ | (2.55 | ) | ||||
Restructuring charges, net of taxes (Note 1) |
10.1 | 0.29 | 3.7 | 0.11 | ||||||||||||
Asset impairments, net of taxes (Note 2) |
— | — | 77.2 | 2.22 | ||||||||||||
Earnings (loss) from continuing operations
excluding
restructuring and asset impairment charges,
net of taxes |
$ | 1.9 | $ | 0.05 | $ | (7.7 | ) | $ | (0.22 | ) | ||||||
| December Year to Date | ||||||||||||||||
| 2009 | 2008 | |||||||||||||||
| Amount | Per Share | Amount | Per Share | |||||||||||||
Loss from continuing operations, net of tax |
$ | (105.1 | ) | $ | (3.01 | ) | $ | (81.7 | ) | $ | (2.35 | ) | ||||
Restructuring charges, net of taxes (Note 1) |
24.0 | 0.69 | 5.3 | 0.15 | ||||||||||||
Asset impairments, net of taxes (Note 2) |
50.0 | 1.43 | 77.2 | 2.22 | ||||||||||||
Litigation charges, net of taxes |
3.3 | 0.09 | 13.9 | 0.40 | ||||||||||||
(Loss) earnings from continuing operations
excluding
restructuring, asset impairment and litigation
charges, net of taxes |
$ | (27.8 | ) | $ | (0.80 | ) | $ | 14.7 | $ | 0.42 | ||||||
15
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding
the impairment, restructuring and litigation charges is useful to understand the Company’s fiscal 2009
financial performance and increases comparability. Specifically, Management believes that excluding these
items allows for a more meaningful comparison of current period operating performance with the operating
results of prior periods. These non-GAAP measures may have limitations as analytical tools because they
exclude items which can have a material impact on cash flow and earnings per share. As a result, Management
considers these measures, along with reported results, when it reviews and evaluates the Company’s
financial performance. Management believes that these measures provide greater transparency to investors
and provide insight into how Management is evaluating the Company’s financial performance. Non-GAAP
measures should not be considered a substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP.
(1) Restructuring charges represent global costs incurred in connection with the reduction in the number of
permanent employees and the consolidation, sale or closure of branch locations. These costs include
severance, lease terminations, asset write-offs and other miscellaneous costs.
(2) For 2009, asset impairment charges include adjustments to the value of goodwill for the Company’s
Americas Commercial, EMEA PT and APAC Commercial reporting segments, and long-lived assets and
intangible assets related to Japan and Europe. For 2008, asset impairment charges include adjustments
to the value of goodwill for the Company’s EMEA Commercial segment, the Company’s investment in
Tempstaff, and assets related to operations in the U.K.
16