TROY, Mich., Jan. 25 /PRNewswire-FirstCall/ -- Kelly Services,
Inc., a global provider of staffing services, today announced
record revenue and a strong earnings growth for the fourth quarter
and full year ended December 31, 2006. (Logo:
http://www.newscom.com/cgi-bin/prnh/19991208/KELLYLOGO ) Carl T.
Camden, President and Chief Executive Officer, announced revenue
for the fourth quarter of 2006 totaled $1.436 billion, a 4.4%
increase compared to the $1.375 billion for the corresponding
quarter in 2005. Revenue for the full year totaled $5.606 billion,
a 6.7% increase compared to the $5.252 billion for the full year of
2005. Net earnings for the fourth quarter of 2006 totaled $24.4
million, an 84% increase compared to $13.3 million reported for the
fourth quarter of 2005. Effective December 31, 2006, the Company
sold its Staff Leasing business unit for cash proceeds of $6.5
million and recorded an after tax gain on sale of $2.3 million.
Excluding the gain on sale, net earnings were $22.2 million, a 67%
increase compared to last year. Net earnings for the full year of
2006 totaled $63.5 million, a 62% increase compared to the $39.3
million earned in the full year of 2005. Excluding the gain on sale
of the Staff Leasing business unit, net earnings for the full year
were $61.2 million, a 56% increase compared to last year. Diluted
earnings per share in the fourth quarter of 2006 were $0.67, an
increase of 81% as compared to fourth quarter 2005 earnings of
$0.37 per share. Excluding the $0.06 per share after tax gain on
sale, diluted earnings were $0.61 per share, a 65% increase
compared to last year. Diluted earnings per share for the full year
of 2006 were $1.75, a 61% increase compared to the $1.09 per share
earned in 2005. Excluding the $0.06 per share after tax gain on
sale, diluted earnings were $1.69 per share, a 55% increase
compared to last year. Commenting on the results, Camden said,
"We're pleased that we delivered a very strong year, despite
continued slowing in the U.S. economy. Our PTSA and International
segments delivered particularly strong profit increases. "Revenue
in our U.S. Commercial segment, which accounted for 45% of total
sales, decreased 1.3% year over year in the fourth quarter.
Operating earnings totaled $36.6 million, an increase of 8.5%
compared to last year. "Revenue in our Professional, Technical, and
Staffing Alternatives (PTSA) segment, which accounted for 20% of
total sales, increased 1.1% year over year in the fourth quarter.
Operating earnings totaled $18.8 million and increased 18.7% on a
year over year basis. "Revenue in our International segment, which
accounted for 35% of total sales, increased 15.0% year over year in
the fourth quarter. Operating earnings totaled $7.8 million, and
increased 67.0% compared to last year. "On a constant currency
basis, International segment revenue increased 8.4% year over year
in the fourth quarter. On a constant currency basis, total company
revenue increased 2.3% year over year in the fourth quarter.
"Corporate expenses totaled $40.5 million and increased 7.9%
compared to last year. Operating earnings from continuing
operations totaled $22.6 million, and increased 35.9% on a year
over year basis. "The effective tax rate from continuing operations
for the fourth quarter was 11.7%, compared to 29.1% last year. The
2006 fourth quarter rate reflects a full year impact of work
opportunity credits, which were retroactively extended by Congress
late in the year. The 2006 full year tax rate of 28.7% is
comparable to the 29.0% rate last year, as both included a full
year's impact of the work opportunity credits." Mr. Camden added,
"We expect first quarter 2007 earnings to be in the range of $0.25
to $0.30 per share, as compared to $0.23 per share from continuing
operations in the first quarter of 2006. Not included in this
guidance are planned restructuring costs of approximately $6 to $7
million, or $0.16 to $0.19 per share related primarily to branch
closings, headquarters consolidation and related severance costs in
our UK operation." Mr. Camden concluded, "For the full year of
2007, we are initially forecasting that earnings will range between
$1.90 and $2.05 per share, excluding the UK restructuring costs."
In conjunction with its fourth quarter earnings release, Kelly
Services, Inc. will host a conference call at 9:00 a.m. (ET) on
January 25, 2007 to review the results and answer questions. The
call may be accessed in one of the following ways: Via the
Telephone: U.S. 1-866-254-5941 International 1-612-288-0337 The
pass code is Kelly Services Via the Internet: The call is also
available via the internet through the Kelly Services website:
http://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 projections contained herein. Kelly Services,
Inc. (NASDAQ:KELYANASDAQ:KELYB) is a Fortune 500 company
headquartered in Troy, Mich., offering staffing solutions that
include temporary staffing services, outsourcing, vendor on-site
and full-time placement. Kelly operates in 30 countries and
territories. Kelly provides employment to more than 700,000
employees annually, with skills including office services,
accounting, engineering, information technology, law, science,
marketing, light industrial, education, health care, and home care.
Revenue in 2006 was $5.6 billion. Visit
http://www.kellyservices.com/. KELLY SERVICES, INC. AND
SUBSIDIARIES STATEMENTS OF EARNINGS FOR THE 13 WEEKS ENDED DECEMBER
31, 2006 AND JANUARY 1, 2006 (UNAUDITED) (In thousands of dollars
except per share data) 2006 2005 Change % Change Revenue from
services $1,435,990 $1,374,967 $61,023 4.4 % Cost of services
1,191,722 1,156,084 35,638 3.1 Gross profit 244,268 218,883 25,385
11.6 Selling, general and administrative expenses 221,631 202,221
19,410 9.6 Earnings from operations 22,637 16,662 5,975 35.9 Other
income (expense), net 618 (10) 628 NM Earnings from continuing
operations before taxes 23,255 16,652 6,603 39.7 Income taxes 2,723
4,840 (2,117) (43.7) Earnings from continuing operations 20,532
11,812 8,720 73.8 Earnings from discontinued operations, net of tax
3,910 1,505 2,405 159.8 Net earnings $ 24,442 $ 13,317 $11,125 83.5
% Basic earnings per share Earnings from continuing operations $
0.57 $ 0.33 $ 0.24 72.7 % Earnings from discontinued operations
0.11 0.04 0.07 175.0 Net earnings $ 0.68 $ 0.37 $ 0.31 83.8 %
Diluted earnings per share Earnings from continuing operations $
0.56 $ 0.33 $ 0.23 69.7 % Earnings from discontinued operations
0.11 0.04 0.07 175.0 Net earnings $ 0.67 $ 0.37 $ 0.30 81.1 %
STATISTICS: Gross profit rate 17.0 % 15.9 % 1.1 % Expenses as a %
of revenue 15.4 14.7 0.7 % Return - Earnings from operations 1.6
1.2 0.4 Earnings from continuing operations before taxes 1.6 1.2
0.4 Earnings from continuing operations 1.4 0.9 0.5 Net earnings
1.7 1.0 0.7 Effective income tax rate 11.7 % 29.1 % (17.4)% Average
number of shares outstanding (thousands): Basic 36,182 35,812
Diluted 36,524 36,064 KELLY SERVICES, INC. AND SUBSIDIARIES
STATEMENTS OF EARNINGS FOR THE 52 WEEKS ENDED DECEMBER 31, 2006 AND
JANUARY 1, 2006 (UNAUDITED) (In thousands of dollars except per
share data) 2006 2005 Change % Change Revenue from services
$5,605,752 $5,251,712 $354,040 6.7 % Cost of services 4,680,538
4,402,618 277,920 6.3 Gross profit 925,214 849,094 76,120 9.0
Selling, general and administrative expenses 846,198 797,813 48,385
6.1 Earnings from operations 79,016 51,281 27,735 54.1 Other income
(expense), net 1,471 (187) 1,658 NM Earnings from continuing
operations before taxes 80,487 51,094 29,393 57.5 Income taxes
23,112 14,813 8,299 56.0 Earnings from continuing operations 57,375
36,281 21,094 58.1 Earnings from discontinued operations, net of
tax 6,116 2,982 3,134 105.1 Net earnings $ 63,491 $ 39,263 $ 24,228
61.7 % Basic earnings per share Earnings from continuing operations
$ 1.59 $ 1.02 $ 0.57 55.9 % Earnings from discontinued operations
0.17 0.08 0.09 112.5 Net earnings $ 1.76 $ 1.10 $ 0.66 60.0 %
Diluted earnings per share Earnings from continuing operations $
1.58 $ 1.01 $ 0.57 56.4 % Earnings from discontinued operations
0.17 0.08 0.09 112.5 Net earnings $ 1.75 $ 1.09 $ 0.66 60.6 %
STATISTICS: Gross profit rate 16.5 % 16.2 % 0.3 % Expenses as a %
of revenue 15.1 15.2 (0.1) % Return - Earnings from operations 1.4
1.0 0.4 Earnings from continuing operations before taxes 1.4 1.0
0.4 Earnings from continuing operations 1.0 0.7 0.3 Net earnings
1.1 0.7 0.4 Effective income tax rate 28.7 % 29.0 % (0.3)% Average
number of shares outstanding (thousands): Basic 35,999 35,667
Diluted 36,314 35,949 KELLY SERVICES, INC. AND SUBSIDIARIES RESULTS
OF OPERATIONS BY SEGMENT (In thousands of dollars) Fourth Quarter
(Unaudited) 2006 2005 Change % Change Revenue from Services: U.S.
Commercial Staffing $ 641,175 $ 649,709 $ (8,534) (1.3)% PTSA
284,138 281,185 2,953 1.1 International 510,677 444,073 66,604 15.0
Consolidated Total $1,435,990 $1,374,967 $ 61,023 4.4 % Earnings
from Operations: U.S. Commercial Staffing $ 36,572 $ 33,706 $ 2,866
8.5 % PTSA 18,768 15,812 2,956 18.7 International 7,791 4,666 3,125
67.0 Corporate Expense (40,494) (37,522) (2,972) (7.9) Consolidated
Total $22,637 $ 16,662 $ 5,975 35.9 % December Year to Date 2006
2005 Change % Change Revenue from Services: U.S. Commercial
Staffing $2,524,472 $2,436,972 $ 87,500 3.6 % PTSA 1,137,788
1,090,322 47,466 4.4 International 1,943,492 1,724,418 219,074 12.7
Consolidated Total $5,605,752 $5,251,712 $354,040 6.7 % Earnings
from Operations: U.S. Commercial Staffing $ 132,191 $ 118,850 $
13,341 11.2 % PTSA 73,776 60,866 12,910 21.2 International 26,680
14,485 12,195 84.2 Corporate Expense (153,631) (142,920) (10,711)
(7.5) Consolidated Total $ 79,016 $ 51,281 $ 27,735 54.1 % Note:
Earnings from Operations for 2005 were reclassified to reflect the
chargeback of payroll, billing and accounts receivable costs
previously included in Corporate Expense to the U.S. Commercial,
PTSA and International segments. This change did not affect
Consolidated Total Earnings from Operations. KELLY SERVICES, INC.
AND SUBSIDIARIES RECONCILIATION OF CONSTANT CURRENCY REVENUE FROM
SERVICES TO REPORTED REVENUE FROM SERVICES (UNAUDITED) (In
thousands of dollars) Fourth Quarter 2006 2005 Change % Change U.S.
Commercial $641,175 $649,709 $(8,534) (1.3)% PTSA 284,138 281,185
2,953 1.1 International - constant currency* 481,448 444,073 37,375
8.4 Revenue from services - constant currency 1,406,761 1,374,967
31,794 2.3 % Foreign currency impact 29,229 29,229 Revenue from
services $1,435,990 $1,374,967 $61,023 4.4 % December Year to Date
2006 2005 Change % Change U.S. Commercial $2,524,472 $2,436,972
$87,500 3.6 % PTSA 1,137,788 1,090,322 47,466 4.4 International -
constant currency* 1,911,855 1,724,418 187,437 10.9 Revenue from
services - constant currency 5,574,115 5,251,712 322,403 6.1 %
Foreign currency impact 31,637 31,637 Revenue from services
$5,605,752 $5,251,712 $354,040 6.7 % * Information on constant
currencies is provided to allow investors to separate the impact of
foreign currency translations on reported results. Constant
currency results are calculated by translating the current year
results at prior year average exchange rates. KELLY SERVICES, INC.
AND SUBSIDIARIES SUMMARY OF DISCONTINUED OPERATIONS (UNAUDITED) (In
thousands of dollars) Fourth Quarter 2006 2005 Sales $7,733 $8,975
Operating income from discontinued operations $2,637 $2,458 Income
taxes 981 953 Earnings from discontinued operations, net of tax
1,656 1,505 Gain on sale on discontinued operations 3,731 - Income
taxes 1,477 - Gain on sale on discontinued operations, net of tax
2,254 - Discontinued operations, net of tax $3,910 $1,505 Full Year
2006 2005 Sales $33,273 $38,113 Operating income from discontinued
operations $6,273 $4,871 Income taxes 2,411 1,889 Earnings from
discontinued operations, net of tax 3,862 2,982 Gain on sale on
discontinued operations 3,731 - Income taxes 1,477 - Gain on sale
on discontinued operations, net of tax 2,254 - Discontinued
operations, net of tax $6,116 $2,982 Effective December 31, 2006
the Company sold Kelly Staff Leasing ("KSL"), a wholly owned
subsidiary. The operating results for KSL, as well as the gain on
the sale of KSL have been excluded from earnings from continuing
operations. This schedule provides information on KSL's results
from operations and the gain on the sale of KSL, both of which are
included as discontinued operations on the face of the statements
of earnings. KELLY SERVICES, INC. AND SUBSIDIARIES RECONCILIATION
OF EARNINGS EXCLUDING THE GAIN ON THE SALE OF KSL (UNAUDITED) (In
thousands of dollars) Fourth Quarter 2006 2005 Per Per Dollars
Share Dollars Share Net earnings $24,442 $0.67 $13,317 $0.37 Gain
on the sale of Kelly Staff Leasing 2,254 0.06 - - Net earnings
excluding the gain on the sale of Kelly Staff Leasing $22,188 $0.61
$13,317 $0.37 Full Year 2006 2005 Dollars Per Per Share Dollars
Share Net earnings $63,491 $1.75 $39,263 $1.09 Gain on the sale of
Kelly Staff Leasing 2,254 0.06 - - Net earnings excluding the gain
on the sale of Kelly Staff Leasing $61,237 $1.69 $39,263 $1.09
Management believes that the information on earnings excluding the
gain on the sale of KSL is useful to understand the Company's
fiscal 2006 financial performance and increases comparability with
prior year results. Management considers this measure, along with
reported results, when it reviews and evaluates the Company's
financial performance. KELLY SERVICES, INC. AND SUBSIDIARIES
BALANCE SHEETS (In thousands of dollars) December 31, January 1,
2006 2006 Current Assets Cash and equivalents $118,428 $63,699
Short-term investments 126 154 Trade accounts receivable, less
allowances of $16,818 and $16,648, respectively 838,246 803,812
Prepaid expenses and other current assets 45,190 47,434 Deferred
taxes 29,543 33,805 Total current assets 1,031,533 948,904 Property
and Equipment, Net 170,288 165,757 Noncurrent Deferred Taxes 35,437
22,088 Goodwill, Net 96,504 88,217 Other Assets 135,662 87,891
Total Assets $1,469,424 $1,312,857 Current Liabilities Short-term
borrowings $68,928 $56,644 Accounts payable 132,819 110,411 Accrued
payroll and related taxes 274,284 263,112 Accrued insurance 24,191
34,097 Income and other taxes 68,055 56,651 Total current
liabilities 568,277 520,915 Noncurrent Liabilities Accrued
insurance 57,277 54,517 Accrued retirement benefits 71,990 57,443
Other long-term liabilities 13,323 7,939 Total noncurrent
liabilities 142,590 119,899 Stockholders' Equity Common stock
40,116 40,116 Treasury stock (78,841) (90,919) Paid-in capital
32,048 27,015 Earnings invested in the business 735,104 688,033
Accumulated other comprehensive income 30,130 7,798 Total
stockholders' equity 758,557 672,043 Total Liabilities and
Stockholders' Equity $1,469,424 $1,312,857 STATISTICS: Working
Capital $463,256 $427,989 Current Ratio 1.8 1.8 Debt-to-capital %
8.3 % 7.8 % Global Days Sales Outstanding Quarter 53 53
Year-to-date 54 56 KELLY SERVICES, INC. AND SUBSIDIARIES STATEMENTS
OF CASH FLOWS FOR THE 52 WEEKS ENDED DECEMBER 31, 2006 AND JANUARY
1, 2006 (In thousands of dollars) 2006 2005 Cash flows from
operating activities Net earnings $63,491 $39,263 Noncash
adjustments: Depreciation and amortization 41,730 42,215
Stock-based compensation 5,286 3,418 Gain on sale of discontinued
operations (2,254) - Other, net (405) 525 Increase in trade
accounts receivable, net (6,639) (97,880) Changes in other
operating assets and liabilities 15,056 33,223 Net cash from
operating activities 116,265 20,764 Cash flows from investing
activities Capital expenditures (45,526) (28,527) Decrease in
short-term investments 28 1,203 Increase in other assets (578)
(5,411) Acquisition of company, net of cash received (4,663) -
Proceeds from sale of discontinued operations 6,500 - Investment in
unconsolidated affiliates (20,729) (19,681) Net cash from investing
activities (64,968) (52,416) Cash flows from financing activities
Net (decrease) increase in short- term borrowings (11,022) 6,833
Financing to fund long-term investment in unconsolidated affiliate
20,729 19,681 Dividend payments (16,420) (14,269) Stock options and
other stock sales 10,973 5,786 Other financing activities (2,873)
1,949 Net cash from financing activities 1,387 19,980 Effect of
exchange rates on cash and equivalents 2,045 (3,977) Net change in
cash and equivalents 54,729 (15,649) Cash and equivalents at
beginning of period 63,699 79,348 Cash and equivalents at end of
period $118,428 $63,699
http://www.newscom.com/cgi-bin/prnh/19991208/KELLYLOGO DATASOURCE:
Kelly Services, Inc. CONTACT: Analysts, James Polehna,
+1-248-244-4586, or , or Media, Renee Walker, +1-248-244-5362, or ,
both of Kelly Services, Inc. Web site:
http://www.kellyservices.com/
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