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8-K



UNITED STATES
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
 
 
Date of Report (Date of earliest event reported): November 4, 2015
 
 
KELLY SERVICES, INC.
---------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
 
DELAWARE
0-1088
38-1510762
(State or other 
(Commission
(IRS Employer
jurisdiction of 
File Number)
Identification
incorporation) 
 
Number)


                                     
999 WEST BIG BEAVER ROAD, TROY, MICHIGAN 48084
-------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
 
(248) 362-4444
----------------------------------------------------------------------
(Registrant's telephone number, including area code)
 
 
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 (see General Instruction A.2. below):
 
[ ] Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)
 
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
     (17 CFR 240.14a-12)
 
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
     the Exchange Act (17 CFR 240.14d-2(b))
 
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under
     the Exchange Act (17 CFR 240.13e-4(c))








1


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 and nine months ended September 27, 2015. 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 4, 2015.       
99.2    Presentation materials for November 4, 2015 conference call.   
















































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.
 
November 4, 2015
 
 
 
 
 
 
 
 
 
/s/ Olivier G. Thirot
Olivier G. Thirot

Senior Vice President and Acting Chief Financial Officer
(Principal Financial Officer)
 
 
 
 
November 4, 2015
 
 
 
 
 
 
 
 
 
/s/ Laura S. Lockhart
Laura S. Lockhart 

Vice President, Corporate Controller and
Chief Accounting Officer
(Principal Accounting Officer)
 






















3




EXHIBIT INDEX
  
Exhibit No.
                   Description
 
 
99.1
Press Release dated November 4, 2015
99.2
Presentation materials for November 4, 2015 conference call


4
Exhibit

Exhibit 99.1
KELLY SERVICES® REPORTS STRONG THIRD QUARTER 2015
EARNINGS AND EPS GROWTH

Quarterly Highlights
•
Earnings from operations up 51%, excluding restructuring (up 72% in constant currency)
•
Earnings per share of $0.23 versus $0.10, excluding restructuring, a 130% increase year-over-year
•
OCG segment revenue up 15% year-over-year (up 17% in constant currency)
•
Total Company revenue down 3% year-over-year (up 3% in constant currency)

TROY, MI (November 4, 2015) -- Kelly Services (Nasdaq: KELYA) (Nasdaq: KELYB), a global leader in providing workforce solutions, today announced results for the third quarter of 2015.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the third quarter of 2015 totaled $1.4 billion, a 3% decrease (a 3% increase on a constant currency basis) compared to the corresponding quarter of 2014.

Earnings from operations for the third quarter of 2015 totaled $16.6 million, compared to $7.1 million reported for the third quarter of 2014. Included in the results of operations in the third quarter of 2014 are restructuring charges of $4.0 million. Excluding the restructuring charges, earnings from operations were $11.1 million in the third quarter of 2014.

Diluted earnings per share in the third quarter of 2015 were $0.23 compared to $0.03 per share in the third quarter of 2014. Adjusted earnings per share were $0.10 in the third quarter of 2014. Included in the third quarter of 2015 was a foreign exchange impact of $0.06 per share.

Commenting on the third quarter, Camden stated, “Our third quarter results confirm that Kelly is operating as a more efficient organization, delivering both top-line growth and operating leverage. Excluding the 2014 restructuring charges, we dropped nearly 50% of our constant currency GP growth to the bottom line during the quarter; our 2014 investments in PT and OCG are continuing to yield results; and we’re expanding Kelly’s role as a trusted talent advisor to many of the world’s top companies.”

Kelly also reported that on November 3, its board of directors declared a dividend of $0.05 per share. The dividend is payable December 4 to shareholders of record as of the close of business on November 16.

In conjunction with its third quarter earnings release, Kelly Services has published a financial presentation regarding the third quarter results on the Investor Relations page of our public website and will host a conference call at 9:00 a.m. (ET) on November 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

1


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, 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 or market developments, 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 and the expiration and/or reinstatement of the U.S. work opportunity credit program), 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, 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 2014 was $5.6 billion.  Visit kellyservices.com and connect with us on Facebook, LinkedIn, & Twitter.

KLYA-FIN

# # #


ANALYST CONTACT:
MEDIA CONTACT:
James Polehna
Jane Stehney    
(248) 244-4586
(248) 244-5630
james_polehna@kellyservices.com
jane_stehney@kellyservices.com




2

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED SEPTEMBER 27, 2015 AND SEPTEMBER 28, 2014
(UNAUDITED)
(In millions of dollars except per share data)
 
 
 
 
 
 
 
 
%
 
CC %
 
 
 
2015
 
2014
 
Change
 
Change
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
1,351.0

$
1,396.4

$
(45.4
)
 
(3.2
)
%
3.0

%
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
1,122.8

 
1,171.0

 
(48.2
)
 
(4.1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit
 
228.2

 
225.4

 
2.8

 
1.3

 
7.2

 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
211.6

 
218.3

 
(6.7
)
 
(3.0
)
 
2.0

 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
16.6

 
7.1

 
9.5

 
134.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other expense, net
 
—

 
2.2

 
(2.2
)
 
(97.7
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings before taxes
 
16.6

 
4.9

 
11.7

 
242.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
 
7.5

 
3.5

 
4.0

 
112.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings
$
9.1

$
1.4

$
7.7

 
NM

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per share
$
0.23

$
0.03

$
0.20

 
NM

%
 
 
Diluted earnings per share
$
0.23

$
0.03

$
0.20

 
NM

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATISTICS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
16.9

%
16.1

%
0.8

pts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses:
 
 
 
 
 
 
 
 
 
 
 
    % of revenue
 
15.7

 
15.6

 
0.1

 
 
 
 
 
    % of gross profit
 
92.7

 
96.9

 
(4.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Return:
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
1.2

 
0.5

 
0.7

 
 
 
 
 
Earnings before taxes
 
1.2

 
0.3

 
0.9

 
 
 
 
 
Net earnings
 
0.7

 
0.1

 
0.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective income tax rate
 
45.2

%
72.7

%
(27.5
)
pts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average number of shares outstanding (millions):
 
 
 
 
 
 
 
 
 
 
 
     Basic
 
37.9

 
37.6

 
 
 
 
 
 
 
     Diluted
 
37.9

 
37.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares adjusted for nonvested restricted awards (millions):
 
 
 
 
 
 
 
 
 
 
 
     Basic
 
38.8

 
38.5

 
 
 
 
 
 
 
     Diluted
 
38.8

 
38.5

 
 
 
 
 
 
 


3

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 39 WEEKS ENDED SEPTEMBER 27, 2015 AND SEPTEMBER 28, 2014
(UNAUDITED)
(In millions of dollars except per share data)
 
 
 
 
 
 
 
 
%
 
CC %
 
 
 
2015
 
2014
 
Change
 
Change
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
4,056.6

$
4,137.7

$
(81.1
)
 
(2.0
)
%
3.7

%
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
3,385.8

 
3,461.9

 
(76.1
)
 
(2.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit
 
670.8

 
675.8

 
(5.0
)
 
(0.7
)
 
4.6

 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
630.6

 
656.5

 
(25.9
)
 
(4.0
)
 
0.9

 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
40.2

 
19.3

 
20.9

 
110.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other expense, net
 
3.5

 
4.2

 
(0.7
)
 
(14.5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings before taxes
 
36.7

 
15.1

 
21.6

 
145.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
 
17.1

 
8.4

 
8.7

 
104.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings
$
19.6

$
6.7

$
12.9

 
198.2

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per share
$
0.51

$
0.17

$
0.34

 
200.0

%
 
 
Diluted earnings per share
$
0.51

$
0.17

$
0.34

 
200.0

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATISTICS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
16.5

%
16.3

%
0.2

pts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses:
 
 
 
 
 
 
 
 
 
 
 
    % of revenue
 
15.5

 
15.9

 
(0.4
)
 
 
 
 
 
    % of gross profit
 
94.0

 
97.2

 
(3.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Return:
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
1.0

 
0.5

 
0.5

 
 
 
 
 
Earnings before taxes
 
0.9

 
0.4

 
0.5

 
 
 
 
 
Net earnings
 
0.5

 
0.2

 
0.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective income tax rate
 
46.5

%
55.9

%
(9.4
)
pts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average number of shares outstanding (millions):
 
 
 
 
 
 
 
 
 
 
 
     Basic
 
37.8

 
37.5

 
 
 
 
 
 
 
     Diluted
 
37.8

 
37.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares adjusted for nonvested restricted awards (millions):
 
 
 
 
 
 
 
 
 
 
 
     Basic
 
38.8

 
38.5

 
 
 
 
 
 
 
     Diluted
 
38.8

 
38.5

 
 
 
 
 
 
 


4

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
Third Quarter
 
 
 
 
 
 
 
 
 
Constant
 
 
 
 
 
 
 
 
 
 
Currency
 
 
 
2015
 
 
2014
 
Change
 
Change
 
AMERICAS
 
 
 
 
 
 
 
 
 
 
  Commercial
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
615.5

 
$
640.8

 
(4.0
)
%
(1.1
)
%
Staffing fee-based income included in revenue from services
 
3.8

 
 
3.8

 
(0.1
)
 
2.8

 
Gross profit
 
96.6

 
 
91.7

 
5.4

 
7.9

 
Gross profit rate
 
15.7

%
 
14.3

%
1.4

 pts.
 
 
  PT
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
242.8

 
$
242.5

 
0.1

%
0.6

%
Staffing fee-based income included in revenue from services
 
4.7

 
 
4.4

 
8.6

 
9.7

 
Gross profit
 
41.0

 
 
39.6

 
3.6

 
4.1

 
Gross profit rate
 
16.9

%
 
16.3

%
0.6

 pts.
 
 
  Total Americas
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
858.3

 
$
883.3

 
(2.8
)
%
(0.6
)
%
Staffing fee-based income included in revenue from services
 
8.5

 
 
8.2

 
4.6

 
6.5

 
Gross profit
 
137.6

 
 
131.3

 
4.8

 
6.7

 
Total SG&A expenses
 
113.7

 
 
110.8

 
2.6

 
4.5

 
Earnings from operations
 
23.9

 
 
20.5

 
16.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
16.0

%
 
14.9

%
1.1

 pts.
 
 
Expense rates:
 
 
 
 
 
 
 
 
 
 
% of revenue
 
13.2

 
 
12.5

 
0.7

 
 
 
% of gross profit
 
82.7

 
 
84.5

 
(1.8
)
 
 
 
Return on sales
 
2.8

 
 
2.3

 
0.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
EMEA
 
 
 
 
 
 
 
 
 
 
  Commercial
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
199.0

 
$
231.3

 
(13.9
)
%
2.6

%
Staffing fee-based income included in revenue from services
 
3.2

 
 
4.2

 
(23.6
)
 
(4.5
)
 
Gross profit
 
27.7

 
 
33.6

 
(17.4
)
 
(1.4
)
 
Gross profit rate
 
13.9

%
 
14.5

%
(0.6
)
 pts.
 
 
  PT
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
43.6

 
$
48.1

 
(9.3
)
%
7.5

%
Staffing fee-based income included in revenue from services
 
2.6

 
 
3.5

 
(24.1
)
 
(6.2
)
 
Gross profit
 
9.4

 
 
10.9

 
(13.3
)
 
4.6

 
Gross profit rate
 
21.6

%
 
22.6

%
(1.0
)
 pts.
 
 
  Total EMEA
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
242.6

 
$
279.4

 
(13.1
)
%
3.5

%
Staffing fee-based income included in revenue from services
 
5.8

 
 
7.7

 
(23.8
)
 
(5.3
)
 
Gross profit
 
37.1

 
 
44.5

 
(16.4
)
 
0.1

 
Total SG&A expenses
 
31.8

 
 
40.0

 
(20.7
)
 
(6.2
)
 
Earnings from operations
 
5.3

 
 
4.5

 
22.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
15.3

%
 
15.9

%
(0.6
)
 pts.
 
 
Expense rates:
 
 
 
 
 
 
 
 
 
 
% of revenue
 
13.1

 
 
14.3

 
(1.2
)
 
 
 
% of gross profit
 
85.4

 
 
90.0

 
(4.6
)
 
 
 
Return on sales
 
2.2

 
 
1.6

 
0.6

 
 
 

5

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
Third Quarter
 
 
 
 
 
 
 
 
 
Constant
 
 
 
 
 
 
 
 
 
 
Currency
 
 
 
2015
 
 
2014
 
Change
 
Change
 
APAC
 
 
 
 
 
 
 
 
 
  Commercial
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
83.2

 
$
91.0

 
(8.5
)
%
9.2

%
Staffing fee-based income included in revenue from services
 
1.4

 
 
2.0

 
(28.5
)
 
(16.7
)
 
Gross profit
 
10.7

 
 
11.7

 
(8.5
)
 
9.1

 
Gross profit rate
 
12.8

%
 
12.8

%
—

 pts.
 
 
  PT
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
9.9

 
$
10.6

 
(6.4
)
%
11.8

%
Staffing fee-based income included in revenue from services
 
1.3

 
 
2.0

 
(34.3
)
 
(22.6
)
 
Gross profit
 
2.5

 
 
3.3

 
(24.6
)
 
(10.8
)
 
Gross profit rate
 
25.4

%
 
31.5

%
(6.1
)
 pts.
 
 
  Total APAC
 
 
 
 
 
 
 
 
Revenue from services
$
93.1

 
$
101.6

 
(8.3
)
%
9.5

%
Staffing fee-based income included in revenue from services
 
2.7

 
 
4.0

 
(31.4
)
 
(19.7
)
 
Gross profit
 
13.2

 
 
15.0

 
(12.1
)
 
4.7

 
SG&A expenses excluding restructuring charges
 
11.1

 
 
14.2

 
(21.6
)
 
 
 
Restructuring charges
 
—

 
 
0.3

 
(100.0
)
 
 
 
Total SG&A expenses
 
11.1

 
 
14.5

 
(23.2
)
 
(8.8
)
 
Earnings from operations
 
2.1

 
 
0.5

 
297.9

 
 
 
Earnings from operations excluding restructuring charges
 
2.1

 
 
0.8

 
154.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
14.2

%
 
14.8

%
(0.6
)
 pts.
 
 
Expense rates (excluding restructuring charges):
 
 
 
 
 
 
 
 
 
 
% of revenue
 
11.9

 
 
14.0

 
(2.1
)
 
 
 
% of gross profit
 
84.3

 
 
94.6

 
(10.3
)
 
 
 
Return on sales (excluding restructuring charges)
 
2.2

 
 
0.8

 
1.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
OCG
 
 
 
 
 
 
 
 
 
Revenue from services
$
171.8

 
$
149.8

 
14.7

%
16.8

%
Gross profit
 
41.4

 
 
35.8

 
15.5

 
18.4

 
Total SG&A expenses
 
33.2

 
 
32.2

 
3.2

 
6.3

 
Earnings from operations
 
8.2

 
 
3.6

 
123.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
24.1

%
 
23.9

%
0.2

 pts.
 
 
Expense rates:
 
 
 
 
 
 
 
 
 
 
% of revenue
 
19.3

 
 
21.5

 
(2.2
)
 
 
 
% of gross profit
 
80.2

 
 
89.8

 
(9.6
)
 
 
 
Return on sales
 
4.8

 
 
2.4

 
2.4

 
 
 


6

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
September Year to Date
 
 
 
 
 
 
 
 
 
Constant
 
 
 
 
 
 
 
 
 
 
Currency
 
 
 
2015
 
 
2014
 
Change
 
Change
 
AMERICAS
 
 
 
 
 
 
 
 
 
 
  Commercial
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
1,908.2

 
$
1,915.1

 
(0.4
)
%
1.8

%
Staffing fee-based income included in revenue from services
 
10.8

 
 
10.4

 
3.4

 
6.0

 
Gross profit
 
290.3

 
 
280.0

 
3.7

 
5.6

 
Gross profit rate
 
15.2

%
 
14.6

%
0.6

 pts.
 
 
  PT
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
721.8

 
$
723.1

 
(0.2
)
%
0.2

%
Staffing fee-based income included in revenue from services
 
13.1

 
 
11.7

 
11.7

 
12.6

 
Gross profit
 
122.0

 
 
118.4

 
3.1

 
3.6

 
Gross profit rate
 
16.9

%
 
16.4

%
0.5

 pts.
 
 
  Total Americas
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
2,630.0

 
$
2,638.2

 
(0.3
)
%
1.4

%
Staffing fee-based income included in revenue from services
 
23.9

 
 
22.1

 
7.7

 
9.5

 
Gross profit
 
412.3

 
 
398.4

 
3.5

 
5.0

 
Total SG&A expenses
 
339.8

 
 
332.9

 
2.0

 
3.5

 
Earnings from operations
 
72.5

 
 
65.5

 
11.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
15.7

%
 
15.1

%
0.6

 pts.
 
 
Expense rates:
 
 
 
 
 
 
 
 
 
 
% of revenue
 
12.9

 
 
12.6

 
0.3

 
 
 
% of gross profit
 
82.4

 
 
83.6

 
(1.2
)
 
 
 
Return on sales
 
2.8

 
 
2.5

 
0.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
EMEA
 
 
 
 
 
 
 
 
 
 
  Commercial
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
573.0

 
$
690.2

 
(17.0
)
%
0.3

%
Staffing fee-based income included in revenue from services
 
9.9

 
 
14.0

 
(29.2
)
 
(11.0
)
 
Gross profit
 
79.1

 
 
101.0

 
(21.7
)
 
(5.4
)
 
Gross profit rate
 
13.8

%
 
14.6

%
(0.8
)
 pts.
 
 
  PT
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
126.8

 
$
145.5

 
(12.8
)
%
4.7

%
Staffing fee-based income included in revenue from services
 
7.7

 
 
10.7

 
(27.7
)
 
(10.2
)
 
Gross profit
 
27.2

 
 
33.3

 
(18.1
)
 
(0.4
)
 
Gross profit rate
 
21.5

%
 
22.8

%
(1.3
)
 pts.
 
 
  Total EMEA
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
699.8

 
$
835.7

 
(16.3
)
%
1.1

%
Staffing fee-based income included in revenue from services
 
17.6

 
 
24.7

 
(28.5
)
 
(10.7
)
 
Gross profit
 
106.3

 
 
134.3

 
(20.8
)
 
(4.1
)
 
SG&A expenses excluding restructuring charges
 
99.5

 
 
124.2

 
(19.9
)
 
 
 
Restructuring charges
 
—

 
 
0.8

 
(100.0
)
 
 
 
Total SG&A expenses
 
99.5

 
 
125.0

 
(20.4
)
 
(4.7
)
 
Earnings from operations
 
6.8

 
 
9.3

 
(25.5
)
 
 
 
Earnings from operations excluding restructuring charges
 
6.8

 
 
10.1

 
(31.5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
15.2

%
 
16.1

%
(0.9
)
 pts.
 
 
Expense rates (excluding restructuring charges):
 
 
 
 
 
 
 
 
 
 
% of revenue
 
14.2

 
 
14.9

 
(0.7
)
 
 
 
% of gross profit
 
93.5

 
 
92.5

 
1.0

 
 
 
Return on sales (excluding restructuring charges)
 
1.0

 
 
1.2

 
(0.2
)
 
 
 

7


KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
September Year to Date
 
 
 
 
 
 
 
 
 
Constant
 
 
 
 
 
 
 
 
 
 
Currency
 
 
 
2015
 
 
2014
 
Change
 
Change
 
APAC
 
 
 
 
 
 
 
 
 
  Commercial
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
259.1

 
$
260.5

 
(0.5
)
%
13.1

%
Staffing fee-based income included in revenue from services
 
4.7

 
 
5.9

 
(20.3
)
 
(10.8
)
 
Gross profit
 
34.9

 
 
35.7

 
(2.2
)
 
10.8

 
Gross profit rate
 
13.5

%
 
13.7

%
(0.2
)
 pts.
 
 
  PT
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
30.7

 
$
29.2

 
5.4

%
20.5

%
Staffing fee-based income included in revenue from services
 
4.4

 
 
5.8

 
(23.7
)
 
(14.6
)
 
Gross profit
 
8.1

 
 
9.4

 
(13.6
)
 
(2.4
)
 
Gross profit rate
 
26.4

%
 
32.2

%
(5.8
)
 pts.
 
 
  Total APAC
 
 
 
 
 
 
 
 
Revenue from services
$
289.8

 
$
289.7

 
0.1

%
13.8

%
Staffing fee-based income included in revenue from services
 
9.1

 
 
11.7

 
(22.0
)
 
(12.7
)
 
Gross profit
 
43.0

 
 
45.1

 
(4.6
)
 
8.0

 
SG&A expenses excluding restructuring charges
 
35.5

 
 
43.3

 
(18.0
)
 
 
 
Restructuring charges
 
—

 
 
1.3

 
(100.0
)
 
 
 
Total SG&A expenses
 
35.5

 
 
44.6

 
(20.5
)
 
(10.1
)
 
Earnings from operations
 
7.5

 
 
0.5

 
NM

 
 
 
Earnings from operations excluding restructuring charges
 
7.5

 
 
1.8

 
338.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
14.8

%
 
15.6

%
(0.8
)
 pts.
 
 
Expense rates (excluding restructuring charges):
 
 
 
 
 
 
 
 
 
 
% of revenue
 
12.3

 
 
15.0

 
(2.7
)
 
 
 
% of gross profit
 
82.7

 
 
96.2

 
(13.5
)
 
 
 
Return on sales (excluding restructuring charges)
 
2.6

 
 
0.6

 
2.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
OCG
 
 
 
 
 
 
 
 
 
Revenue from services
$
486.3

 
$
422.1

 
15.2

%
17.0

%
Gross profit
 
112.6

 
 
101.3

 
11.1

 
13.4

 
Total SG&A expenses
 
98.1

 
 
94.7

 
3.6

 
6.4

 
Earnings from operations
 
14.5

 
 
6.6

 
116.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit rate
 
23.1

%
 
24.0

%
(0.9
)
 pts.
 
 
Expense rates:
 
 
 
 
 
 
 
 
 
 
% of revenue
 
20.2

 
 
22.4

 
(2.2
)
 
 
 
% of gross profit
 
87.1

 
 
93.4

 
(6.3
)
 
 
 
Return on sales
 
3.0

 
 
1.6

 
1.4

 
 
 


8

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
September 27, 2015
 
December 28, 2014
 
September 28, 2014
 
Current Assets
 
 
 
 
 
 
 
  Cash and equivalents
$
44.9

$
83.1

$
51.6

 
  Trade accounts receivable, less allowances of
 
 
 
 
 
 
 
    $9.7, $10.7 and $9.2, respectively
 
1,160.3

 
1,122.8

 
1,158.1

 
  Prepaid expenses and other current assets
 
49.0

 
47.9

 
56.8

 
  Deferred taxes
 
35.0

 
34.4

 
28.9

 
Total current assets
 
1,289.2

 
1,288.2

 
1,295.4

 
 
 
 
 
 
 
 
 
Property and Equipment, Net
 
88.3

 
93.0

 
91.1

 
 
 
 
 
 
 
 
 
Noncurrent Deferred Taxes
 
140.8

 
146.3

 
132.7

 
 
 
 
 
 
 
 
 
Goodwill, Net
 
90.3

 
90.3

 
90.3

 
 
 
 
 
 
 
 
 
Other Assets
 
341.3

 
300.1

 
291.5

 
 
 
 
 
 
 
 
 
Total Assets
$
1,949.9

$
1,917.9

$
1,901.0

 
 
 
 
 
 
 
 
 
Current Liabilities
 
 
 
 
 
 
 
  Short-term borrowings
$
76.8

$
91.9

$
88.7

 
  Accounts payable and accrued liabilities
 
385.2

 
364.0

 
339.0

 
  Accrued payroll and related taxes
 
312.8

 
308.5

 
318.6

 
  Accrued insurance
 
25.9

 
26.9

 
24.4

 
  Income and other taxes
 
59.5

 
68.8

 
74.0

 
 
 
 
 
 
 
 
 
Total current liabilities
 
860.2

 
860.1

 
844.7

 
 
 
 
 
 
 
 
 
Noncurrent Liabilities
 
 
 
 
 
 
 
  Accrued insurance
 
42.2

 
43.9

 
43.4

 
  Accrued retirement benefits
 
139.5

 
140.8

 
146.6

 
  Other long-term liabilities
 
48.4

 
39.4

 
40.7

 
 
 
 
 
 
 
 
 
Total noncurrent liabilities
 
230.1

 
224.1

 
230.7

 
 
 
 
 
 
 
 
 
Stockholders' Equity
 
 
 
 
 
 
 
  Common stock
 
40.1

 
40.1

 
40.1

 
  Treasury stock
 
(46.9
)
 
(49.8
)
 
(52.5
)
 
  Paid-in capital
 
26.7

 
24.9

 
26.7

 
  Earnings invested in the business
 
781.3

 
767.4

 
752.3

 
  Accumulated other comprehensive income
 
58.4

 
51.1

 
59.0

 
 
 
 
 
 
 
 
 
Total stockholders' equity
 
859.6

 
833.7

 
825.6

 
 
 
 
 
 
 
 
 
Total Liabilities and Stockholders' Equity
$
1,949.9

$
1,917.9

$
1,901.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATISTICS:
 
 
 
 
 
 
 
 Working Capital
$
429.0

$
428.1

$
450.7

 
 Current Ratio
 
1.5

 
1.5

 
1.5

 
 Debt-to-capital %
 
8.2

%
9.9

%
9.7

%
 Global Days Sales Outstanding
 
57

 
54

 
58

 

9

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 39 WEEKS ENDED SEPTEMBER 27, 2015 AND SEPTEMBER 28, 2014
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
2015
 
2014
Cash flows from operating activities:
 
 
 
 
Net earnings
$
19.6

$
6.7

Noncash adjustments:
 
 
 
 
Depreciation and amortization
 
16.6

 
16.2

Provision for bad debts
 
3.3

 
3.6

Stock-based compensation
 
4.6

 
4.1

Other, net
 
(0.7
)
 
1.3

Changes in operating assets and liabilities
 
(44.9
)
 
(140.9
)
 
 
 
 
 
Net cash used in operating activities
 
(1.5
)
 
(109.0
)
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Capital expenditures
 
(12.3
)
 
(15.0
)
Investment in equity affiliate
 
(0.5
)
 
(5.4
)
Other investing activities
 
(0.4
)
 
0.2

 
 
 
 
 
Net cash used in investing activities
 
(13.2
)
 
(20.2
)
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Net change in short-term borrowings
 
(13.8
)
 
60.4

Dividend payments
 
(5.7
)
 
(5.7
)
Other financing activities
 
0.2

 
0.4

 
 
 
 
 
Net cash (used in) from financing activities
 
(19.3
)
 
55.1

 
 
 
 
 
Effect of exchange rates on cash and equivalents
 
(4.2
)
 
—

 
 
 
 
 
Net change in cash and equivalents
 
(38.2
)
 
(74.1
)
Cash and equivalents at beginning of period
 
83.1

 
125.7

 
 
 
 
 
 
 
 
 
 
Cash and equivalents at end of period
$
44.9

$
51.6

 
 
 
 
 


10

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
Third Quarter (Commercial, PT and OCG)
 
 
 
 
 
 
 
% Change
 
 
 
 
 
 
 
 
 
Constant
 
 
 
2015
 
2014
 
US$
 
Currency
 
 
 
 
 
 
 
 
 
 
 
Americas
 
 
 
 
 
 
 
 
 
United States
$
899.8

$
873.7

 
3.0

%
3.0

%
Canada
 
37.9

 
51.9

 
(27.0
)
 
(12.6
)
 
Mexico
 
31.3

 
37.0

 
(15.2
)
 
6.1

 
Puerto Rico
 
23.8

 
25.7

 
(7.5
)
 
(7.5
)
 
Brazil
 
10.4

 
13.6

 
(23.5
)
 
11.4

 
Total Americas
 
1,003.2

 
1,001.9

 
0.1

 
2.1

 
 
 
 
 
 
 
 
 
 
 
EMEA
 
 
 
 
 
 
 
 
 
France
 
63.1

 
70.1

 
(10.0
)
 
7.4

 
Switzerland
 
58.0

 
66.7

 
(13.0
)
 
(8.2
)
 
Portugal
 
33.5

 
33.3

 
0.8

 
20.2

 
United Kingdom
 
27.7

 
26.2

 
5.7

 
14.0

 
Russia
 
17.0

 
28.7

 
(40.6
)
 
2.9

 
Germany
 
15.4

 
17.5

 
(12.1
)
 
4.8

 
Italy
 
14.0

 
14.8

 
(5.5
)
 
12.6

 
Norway
 
10.1

 
14.8

 
(31.8
)
 
(10.5
)
 
Other
 
11.5

 
15.8

 
(27.1
)
 
(13.2
)
 
Total EMEA
 
250.3

 
287.9

 
(13.1
)
 
3.5

 
 
 
 
 
 
 
 
 
 
 
APAC
 
 
 
 
 
 
 
 
 
Singapore
 
32.6

 
33.4

 
(2.3
)
 
8.5

 
Australia
 
28.8

 
32.3

 
(10.7
)
 
13.8

 
Malaysia
 
14.0

 
16.7

 
(16.1
)
 
6.0

 
New Zealand
 
9.4

 
12.7

 
(26.4
)
 
(4.7
)
 
Other
 
12.7

 
11.5

 
10.4

 
20.9

 
Total APAC
 
97.5

 
106.6

 
(8.5
)
 
9.5

 
 
 
 
 
 
 
 
 
 
 
Total Kelly Services, Inc.
$
1,351.0

$
1,396.4

 
(3.2
)
%
3.0

%
 
 
 
 
 
 
 
 
 
 


11

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
September Year to Date (Commercial, PT and OCG)
 
 
 
 
 
 
 
% Change
 
 
 
 
 
 
 
 
 
Constant
 
 
 
2015
 
2014
 
US$
 
Currency
 
 
 
 
 
 
 
 
 
 
 
Americas
 
 
 
 
 
 
 
 
 
United States
$
2,706.4

$
2,601.9

 
4.0

%
4.0

%
Canada
 
122.2

 
148.2

 
(17.5
)
 
(5.5
)
 
Mexico
 
95.2

 
102.3

 
(6.9
)
 
10.4

 
Puerto Rico
 
75.2

 
78.4

 
(4.0
)
 
(4.0
)
 
Brazil
 
34.2

 
43.2

 
(20.8
)
 
2.8

 
Total Americas
 
3,033.2

 
2,974.0

 
2.0

 
3.5

 
 
 
 
 
 
 
 
 
 
 
EMEA
 
 
 
 
 
 
 
 
 
France
 
180.4

 
202.2

 
(10.8
)
 
8.4

 
Switzerland
 
160.7

 
195.7

 
(17.9
)
 
(12.9
)
 
Portugal
 
98.7

 
92.4

 
6.9

 
29.9

 
United Kingdom
 
78.4

 
82.4

 
(4.8
)
 
3.7

 
Russia
 
57.4

 
96.4

 
(40.4
)
 
(0.9
)
 
Germany
 
43.1

 
50.7

 
(15.0
)
 
3.1

 
Italy
 
39.5

 
46.3

 
(14.6
)
 
3.6

 
Norway
 
29.5

 
43.6

 
(32.5
)
 
(12.8
)
 
Other
 
32.8

 
50.9

 
(35.6
)
 
(21.8
)
 
Total EMEA
 
720.5

 
860.6

 
(16.3
)
 
0.9

 
 
 
 
 
 
 
 
 
 
 
APAC
 
 
 
 
 
 
 
 
 
Singapore
 
96.9

 
94.8

 
2.3

 
10.9

 
Australia
 
92.1

 
88.8

 
3.8

 
24.8

 
Malaysia
 
45.4

 
50.0

 
(9.3
)
 
5.2

 
New Zealand
 
30.2

 
38.2

 
(21.1
)
 
(6.1
)
 
Other
 
38.3

 
31.3

 
22.4

 
29.7

 
Total APAC
 
302.9

 
303.1

 
(0.1
)
 
13.8

 
 
 
 
 
 
 
 
 
 
 
Total Kelly Services, Inc.
$
4,056.6

$
4,137.7

 
(2.0
)
%
3.7

%
 
 
 
 
 
 
 
 
 
 


12

 KELLY SERVICES, INC. AND SUBSIDIARIES
 RECONCILIATION OF NON-GAAP MEASURES
FOR THE 13 WEEKS ENDED SEPTEMBER 27, 2015 AND SEPTEMBER 28, 2014
 (UNAUDITED)
 (In millions of dollars except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
 
 
 
 
As reported
 
Restructuring Charges
(Note 1)
 
Adjusted Earnings
 
Adjusted Earnings
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
1,351.0

$
—

$
1,351.0

$
1,396.4

 
(3.2
)
%
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
1,122.8

 
—

 
1,122.8

 
1,171.0

 
(4.1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit
 
228.2

 
—

 
228.2

 
225.4

 
1.3

 
 
 
 
 
 
 
 
 
 
 
 
 
SG&A expenses
 
211.6

 
—

 
211.6

 
214.3

 
(1.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
16.6

 
—

 
16.6

 
11.1

 
50.7

 
 
 
 
 
 
 
 
 
 
 
 
 
Other expense, net
 
—

 
—

 
—

 
2.2

 
(97.7
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings before taxes
 
16.6

 
—

 
16.6

 
8.9

 
88.3

 
 
 
 
 
 
 
 
 
 
 
 
 
Inc. tax expense (benefit)
 
7.5

 
—

 
7.5

 
5.0

 
48.8

 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings
$
9.1

$
—

$
9.1

$
3.9

 
141.1

%
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.23

$
—

$
0.23

$
0.10

 
130.0

%
Diluted
$
0.23

$
—

$
0.23

$
0.10

 
130.0

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
As reported
 
Restructuring Charges
(Note 1)
 
Adjusted Earnings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
1,396.4

$
—

$
1,396.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
1,171.0

 
—

 
1,171.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit
 
225.4

 
—

 
225.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SG&A expenses
 
218.3

 
(4.0
)
 
214.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
7.1

 
4.0

 
11.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other expense, net
 
2.2

 
—

 
2.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings before taxes
 
4.9

 
4.0

 
8.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inc. tax expense (benefit)
 
3.5

 
1.5

 
5.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings
$
1.4

$
2.5

$
3.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.03

$
0.06

$
0.10

 
 
 
 
 
Diluted
$
0.03

$
0.06

$
0.10

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.
 
 

13

 KELLY SERVICES, INC. AND SUBSIDIARIES
 RECONCILIATION OF NON-GAAP MEASURES
FOR THE 39 WEEKS ENDED SEPTEMBER 27, 2015 AND SEPTEMBER 28, 2014
 (UNAUDITED)
 (In millions of dollars except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
 
 
 
 
As reported
 
Restructuring Charges
(Note 1)
 
Adjusted Earnings
 
Adjusted Earnings
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
4,056.6

$
—

$
4,056.6

$
4,137.7

 
(2.0
)
%
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
3,385.8

 
—

 
3,385.8

 
3,461.9

 
(2.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit
 
670.8

 
—

 
670.8

 
675.8

 
(0.7
)
 
 
 
 
 
 
 
 
 
 
 
 
 
SG&A expenses
 
630.6

 
—

 
630.6

 
650.7

 
(3.1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
40.2

 
—

 
40.2

 
25.1

 
61.6

 
 
 
 
 
 
 
 
 
 
 
 
 
Other expense, net
 
3.5

 
—

 
3.5

 
4.2

 
(14.5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings before taxes
 
36.7

 
—

 
36.7

 
20.9

 
76.7

 
 
 
 
 
 
 
 
 
 
 
 
 
Inc. tax expense (benefit)
 
17.1

 
—

 
17.1

 
10.5

 
62.4

 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings
$
19.6

$
—

$
19.6

$
10.4

 
91.4

%
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.51

$
—

$
0.51

$
0.27

 
88.9

%
Diluted
$
0.51

$
—

$
0.51

$
0.27

 
88.9

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
As reported
 
Restructuring Charges
(Note 1)
 
Adjusted Earnings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue from services
$
4,137.7

$
—

$
4,137.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
3,461.9

 
—

 
3,461.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit
 
675.8

 
—

 
675.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SG&A expenses
 
656.5

 
(5.8
)
 
650.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from operations
 
19.3

 
5.8

 
25.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other expense, net
 
4.2

 
—

 
4.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings before taxes
 
15.1

 
5.8

 
20.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inc. tax expense (benefit)
 
8.4

 
2.1

 
10.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings
$
6.7

$
3.7

$
10.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.17

$
0.10

$
0.27

 
 
 
 
 
Diluted
$
0.17

$
0.10

$
0.27

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.
 
 

14

KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)

Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the restructuring charges is useful to understand the Company's fiscal 2015 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 in 2014 include 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.

15
a3q32015pressreleaseslid
Kelly Services, Inc. Third Quarter 2015 Results 1 November 4, 2015 Exhibit 99.2

 
The information provided in this presentation relating to future events are subject to risks and uncertainties, such as competition; changing market and economic conditions; currency fluctuations; changes in laws and regulations, including tax laws, and other factors discussed in the company’s SEC filings. These documents contain and identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements and we have no intention to update these statements. Safe Harbor Statement 2

 
– Earnings from Operations up 51% YOY* (up 72% in constant currency) • Dropped nearly 50% of constant currency GP growth to the bottom line * • Continued positive momentum into the fourth quarter – OCG revenue growth of 15% YOY (17% in constant currency) – Achieved earnings per share of $0.23 versus $0.10 * in 2014 Third Quarter 2015 Highlights 3 ----- *excluding 2014 restructuring charges

 
Third quarter results represent solid revenue performance and continued operating leverage Third Quarter 2015 Financial Summary 4 Actual Results Change(1) Constant Currency Change(2) Revenue $1.4B (3.2)% 3.0% GP % 16.9% 0.8% Earnings from Operations $16.6M 50.7% 72.2% ROS % 1.2% 0.4% EPS $0.23 $0.13 ----- (1) Change from 2014 Actual results, excluding 2014 restructuring charges. EPS as adjusted was $0.10 (2) Constant Currency represents year-over-year changes resulting from translating 2015 financial data into USD using 2014 exchange rates

 
• OCG Revenue growth of 15%, as reported, and 17% in constant currency • Americas PT growth continues to reflect double-digit growth in our branch delivered business, offset by headwinds in our centralized accounts • APAC reflects strong growth in Australia, Singapore, Malaysia and India Third Quarter 2015 Revenue Growth 5 45% 18% 18% 7% 13% Business Mix Americas Commercial Americas PT EMEA APAC OCG -10% -5% 0% 5% 10% 15% 20% Total Americas Commercial Americas PT EMEA APAC OCG YOY Growth Reported Constant Currency

 
• Americas Commercial and PT staffing, and OCG comprise 78% of total Company GP • GP Growth in the Americas represents increasing GP rate on flat revenue growth • OCG GP growth reflects continued CWO and BPO growth coupled with strong seasonal performance in our KellyConnect business • EMEA GP reflects continued softness in Perm Fees, which is offsetting gains in the temporary staffing business Third Quarter 2015 Gross Profit 6 42% 18% 16% 6% 18% Business Mix Americas Commercial Americas PT EMEA APAC OCG -20% -15% -10% -5% 0% 5% 10% 15% 20% Total Americas Commercial Americas PT EMEA APAC OCG YOY Growth Reported Constant Currency

 
• Americas GP rate was favorably impacted by lower payroll taxes and workers’ compensation costs • Year-over-year double-digit OCG revenue growth favorably impacted segment mix in the third quarter Third Quarter 2015 Gross Profit Rate 16.1% 16.9% 7 15.4% 15.6% 15.8% 16.0% 16.2% 16.4% 16.6% 16.8% 17.0% Q3 2014 GP Rate Total Perm Fees AMER GP Rate Segment Mix FX Q3 2015 GP Rate

 
Corporate SG&A in the third quarter includes the impact of phasing of incentive and certain benefit expenses Third Quarter 2015 SG&A 8 $ in millions $214 $212 $190 $195 $200 $205 $210 $215 Q3 2014 SG&A FX Management Simplification EMEA/APAC AMER staffing OCG Corporate Q3 2015 SG&A ----- excluding 2014 restructuring charges

 
Third quarter constant currency results reflect good leverage performance across all operating segments Third Quarter 2015 Operating Results 9 ----- (1) excluding 2014 restructuring charges GP Growth Expense Growth Leverage GP Growth Expense Growth(1) Leverage Americas 4.8% 2.6% 54.4% 6.7% 4.5% 43.2% EMEA -16.4% -20.7% -13.6% 0.1% -6.2% NM APAC -12.1% -23.2% -85.2% 4.7% -6.9% 240.7% OCG 15.5% 3.2% 81.7% 18.4% 6.3% 69.4% Total Company 1.3% -3.0% 327.5% 7.2% 3.9% 48.8% Reported Constant Currency

 
$65 $70 $75 $80 $85 $90 $95 2014 2015 Q1 2015 Q2 2015 Q3 Debt $1,060 $1,080 $1,100 $1,120 $1,140 $1,160 2014 2015 Q1 2015 Q2 2015 Q3 Accounts Receivable Third quarter DSO at 57, reflects a one-day year-over-year improvement Third Quarter 2015 Balance Sheet Data $ in millions $ in millions 10 54 57 57 56 DSO 9.9% 8.8% 9.6% 8.2% Debt to Equity ratio

 
• Revenue up 5.5% to 6.5% YOY in constant currency – Includes impact of 53rd week • Gross Profit Rate up YOY • SG&A up 2% to 2.5% YOY • Annual tax rate at 20%, assuming Work Opportunity Credits are enacted in 2015 Fourth Quarter 2015 Outlook 11