Financial Highlights
Kelly Services (Nasdaq: KELYA) (Nasdaq: KELYB), a global leader in
providing workforce solutions, today announced results for the
second quarter of 2018.
George S. Corona, President and Chief Executive Officer,
announced revenue for the second quarter of 2018 totaled $1.4
billion, a 4.0% increase, or 3.0% in constant currency, compared to
the corresponding quarter of 2017. Tweet This
Earnings from operations for the second quarter of 2018 totaled
$20.4 million, compared to the $20.3 million reported for the
second quarter of 2017.
Diluted losses per share in the second quarter of 2018 were
$0.40 compared to earnings per share of $0.47 in the second quarter
of 2017. Included in earnings per share in the second quarter
of 2018 is the unfavorable impact of $0.94 due to the non-cash
after-tax loss on our investment in Persol Holdings common
stock. Effective in 2018, changes in the fair value of our
investment in Persol Holdings common stock are reflected as gains
or losses on our Consolidated Statement of Earnings below earnings
from operations. Adjusted for the loss on Persol Holdings
common stock net of tax, diluted earnings per share for the quarter
were $0.54.
“We are pleased to have delivered a good quarter in line with
our outlook,” said Kelly Services President and CEO George Corona.
“Our top line revenue continued to grow, our gross profit rate
increased over the prior year, and we made progress throughout the
quarter in bringing expenses in line with the business
environment. In spite of a tight labor market, our teams
around the world executed well.”
Kelly also reported that on August 8, its board of directors
declared a dividend of $0.075 per share. The dividend is payable
August 31, 2018 to shareholders of record as of the close of
business on August 21, 2018.
In conjunction with its second quarter earnings release, Kelly
Services has published a financial presentation on the Investor
Relations page of our public website and will host a conference
call at 9:00 a.m. (ET) on August 8 to review the results and answer
questions. The call may be accessed in one of the following
ways:
Via the Internet:Kellyservices.com
Via the Telephone: |
|
U.S. |
1 800 288-9626 |
International |
1 651 291-5254 |
The pass code is Kelly Services
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 and disruptions, changing market and economic
conditions, our ability to achieve our business strategy, the risk
of damage to our brand, the risk our intellectual property assets
could be infringed upon or compromised, our ability to successfully
develop new service offerings, our exposure to risks associated
with services outside traditional staffing, including business
process outsourcing, our increasing dependency on third parties for
the execution of critical functions, the risks associated with past
and future acquisitions, exposure to risks associated with
investments in equity affiliates including PersolKelly Asia
Pacific, material changes in demand from or loss of large corporate
customers as well as changes in their buying practices, risks
particular to doing business with government or government
contractors, risks associated with conducting business in foreign
countries, including foreign currency fluctuations, the exposure to
potential market and currency exchange risks relating to our
investment in Persol Holdings, risks associated with violations of
anti-corruption, trade protection and other laws and regulations,
availability of qualified full-time employees, availability of
temporary workers with appropriate skills required by customers,
liabilities for employment-related claims and losses, including
class action lawsuits and collective actions, risks arising from
failure to preserve the privacy of information entrusted to us or
to meet our obligations under global privacy laws, the risk of
cyber attacks or other breaches of network or information
technology security, our ability to sustain critical business
applications through our key data centers, our ability to
effectively implement and manage our information technology
projects, our ability to maintain adequate financial and management
processes and controls, risk of potential impairment charges
triggered by adverse industry developments or operational
circumstances, unexpected changes in claim trends on workers’
compensation, unemployment, disability and medical benefit plans,
the impact of changes in laws and regulations (including federal,
state and international tax laws), competition law risks, 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® directly employs nearly 500,000 people
around the world in addition to having a role in connecting
thousands more with work through its global network of talent
suppliers and partners. Revenue in 2017 was $5.4 billion.
Visit kellyservices.com and connect with us
on Facebook, LinkedIn, and Twitter.
KLYA-FIN
ANALYST & MEDIA
CONTACT:
James
Polehna
(248)
244-4586
james_polehna@kellyservices.com
KELLY SERVICES, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
EARNINGS |
FOR THE 13 WEEKS ENDED JULY 1, 2018 AND JULY
2, 2017 |
(UNAUDITED) |
(In millions of dollars except per share data) |
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2018 |
|
2017 |
|
Change |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services |
$ |
1,386.9 |
|
$ |
1,333.6 |
|
$ |
53.3 |
|
|
4.0 |
% |
|
3.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
1,146.4 |
|
|
1,104.8 |
|
|
41.6 |
|
|
3.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
240.5 |
|
|
228.8 |
|
|
11.7 |
|
|
5.1 |
|
|
4.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
220.1 |
|
|
208.5 |
|
|
11.6 |
|
|
5.6 |
|
|
4.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from
operations |
|
20.4 |
|
|
20.3 |
|
|
0.1 |
|
|
0.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on investment in
Persol Holdings |
|
(52.5 |
) |
|
— |
|
|
(52.5 |
) |
|
(100.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net |
|
0.6 |
|
|
(0.5 |
) |
|
1.1 |
|
|
209.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before taxes and equity in net earnings (loss) of
affiliate |
|
(31.5 |
) |
|
19.8 |
|
|
(51.3 |
) |
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense |
|
(15.6 |
) |
|
1.5 |
|
|
(17.1 |
) |
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss) before equity in net earnings (loss) of
affiliate |
|
(15.9 |
) |
|
18.3 |
|
|
(34.2 |
) |
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings
(loss) of affiliate |
|
0.5 |
|
|
0.4 |
|
|
0.1 |
|
|
35.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss) |
$ |
(15.4 |
) |
$ |
18.7 |
|
$ |
(34.1 |
) |
|
NM% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share |
$ |
(0.40 |
) |
$ |
0.48 |
|
$ |
(0.88 |
) |
|
NM% |
|
|
|
|
Diluted
earnings (loss) per share |
$ |
(0.40 |
) |
$ |
0.47 |
|
$ |
(0.87 |
) |
|
NM% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement
income (included in revenue from services) |
$ |
17.3 |
|
$ |
13.7 |
|
$ |
3.6 |
|
|
25.7 |
% |
|
24.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
17.3 |
% |
|
17.2 |
% |
|
0.1 |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion rate |
|
8.5 |
|
|
8.9 |
|
|
(0.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Return: |
|
|
|
|
|
|
|
|
|
|
|
Earnings
from operations |
|
1.5 |
|
|
1.5 |
|
|
— |
|
|
|
|
|
|
Net
earnings (loss) |
|
(1.1 |
) |
|
1.4 |
|
|
(2.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate |
|
49.6 |
% |
|
7.6 |
% |
|
42.0 |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (millions): |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
38.8 |
|
|
38.3 |
|
|
|
|
|
|
|
|
Diluted |
|
38.8 |
|
|
38.8 |
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
EARNINGS |
FOR THE 26 WEEKS ENDED JULY 1, 2018 AND JULY
2, 2017 |
(UNAUDITED) |
(In millions of dollars except per share data) |
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2018 |
|
2017 |
|
Change |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services |
$ |
2,756.8 |
|
$ |
2,623.3 |
|
$ |
133.5 |
|
|
5.1 |
% |
|
3.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
2,278.1 |
|
|
2,162.9 |
|
|
115.2 |
|
|
5.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
478.7 |
|
|
460.4 |
|
|
18.3 |
|
|
4.0 |
|
|
2.3 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
446.3 |
|
|
423.7 |
|
|
22.6 |
|
|
5.3 |
|
|
3.9 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from
operations |
|
32.4 |
|
|
36.7 |
|
|
(4.3 |
) |
|
(11.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on investment in
Persol Holdings |
|
(28.8 |
) |
|
— |
|
|
(28.8 |
) |
|
(100.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense, net |
|
(1.1 |
) |
|
(2.1 |
) |
|
1.0 |
|
|
49.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
taxes and equity in net earnings (loss) of affiliate |
|
2.5 |
|
|
34.6 |
|
|
(32.1 |
) |
|
(92.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense |
|
(9.2 |
) |
|
4.2 |
|
|
(13.4 |
) |
|
(319.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
before equity in net earnings (loss) of affiliate |
|
11.7 |
|
|
30.4 |
|
|
(18.7 |
) |
|
(61.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings
(loss) of affiliate |
|
2.0 |
|
|
0.5 |
|
|
1.5 |
|
|
288.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings |
$ |
13.7 |
|
$ |
30.9 |
|
$ |
(17.2 |
) |
|
(55.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share |
$ |
0.35 |
|
$ |
0.79 |
|
$ |
(0.44 |
) |
|
(55.7 |
)% |
|
|
Diluted
earnings per share |
$ |
0.35 |
|
$ |
0.78 |
|
$ |
(0.43 |
) |
|
(55.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement
income (included in revenue from services) |
$ |
33.9 |
|
$ |
27.2 |
|
$ |
6.7 |
|
|
24.4 |
% |
|
20.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
17.4 |
% |
|
17.6 |
% |
|
(0.2 |
) |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion rate |
|
6.8 |
|
|
8.0 |
|
|
(1.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Return: |
|
|
|
|
|
|
|
|
|
|
Earnings
from operations |
|
1.2 |
|
|
1.4 |
|
|
(0.2 |
) |
|
|
|
|
Net
earnings |
|
0.5 |
|
|
1.2 |
|
|
(0.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate |
|
(366.2 |
)% |
|
12.2 |
% |
|
(378.4 |
) |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (millions): |
|
|
|
|
|
|
|
|
|
|
Basic |
|
38.7 |
|
|
38.3 |
|
|
|
|
|
|
|
Diluted |
|
38.8 |
|
|
38.7 |
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
RESULTS OF OPERATIONS BY SEGMENT |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2018 |
|
|
2017 |
|
Change |
|
Change |
AMERICAS
STAFFING |
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
604.0 |
|
|
$ |
575.6 |
|
|
4.9 |
% |
|
5.2 |
% |
Gross
profit |
|
108.5 |
|
|
|
103.8 |
|
|
4.5 |
|
|
4.7 |
|
Total
SG&A expenses |
|
90.7 |
|
|
|
83.4 |
|
|
8.7 |
|
|
8.9 |
|
Earnings
from operations |
|
17.8 |
|
|
|
20.4 |
|
|
(12.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
18.0 |
% |
|
|
18.0 |
% |
|
— |
pts. |
|
|
Conversion rate |
|
16.4 |
|
|
|
19.7 |
|
|
(3.3 |
) |
|
|
Return on
sales |
|
2.9 |
|
|
|
3.5 |
|
|
(0.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
GLOBAL TALENT
SOLUTIONS |
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
500.7 |
|
|
$ |
505.5 |
|
|
(0.9 |
)% |
|
(1.2 |
)% |
Gross
profit |
|
92.7 |
|
|
|
88.7 |
|
|
4.5 |
|
|
4.0 |
|
Total
SG&A expenses |
|
75.0 |
|
|
|
73.4 |
|
|
2.2 |
|
|
1.8 |
|
Earnings
from operations |
|
17.7 |
|
|
|
15.3 |
|
|
15.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
18.5 |
% |
|
|
17.5 |
% |
|
1.0 |
pts. |
|
|
Conversion rate |
|
19.1 |
|
|
|
17.2 |
|
|
1.9 |
|
|
|
Return on
sales |
|
3.5 |
|
|
|
3.0 |
|
|
0.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERNATIONAL
STAFFING |
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
286.6 |
|
|
$ |
256.8 |
|
|
11.6 |
% |
|
6.6 |
% |
Gross
profit |
|
39.9 |
|
|
|
36.8 |
|
|
8.3 |
|
|
3.5 |
|
Total
SG&A expenses |
|
33.5 |
|
|
|
32.7 |
|
|
2.4 |
|
|
(1.3 |
) |
Earnings
from operations |
|
6.4 |
|
|
|
4.1 |
|
|
54.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
13.9 |
% |
|
|
14.3 |
% |
|
(0.4 |
)pts. |
|
|
Conversion rate |
|
16.0 |
|
|
|
11.2 |
|
|
4.8 |
|
|
|
Return on
sales |
|
2.2 |
|
|
|
1.6 |
|
|
0.6 |
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
RESULTS OF OPERATIONS BY SEGMENT |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
June Year to Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2018 |
|
|
2017 |
|
Change |
|
Change |
AMERICAS
STAFFING |
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
1,208.3 |
|
|
$ |
1,148.7 |
|
|
5.2 |
% |
|
5.1 |
% |
Gross
profit |
|
216.5 |
|
|
|
209.1 |
|
|
3.6 |
|
|
3.5 |
|
SG&A
expenses excluding restructuring charges |
|
182.6 |
|
|
|
167.1 |
|
|
9.3 |
|
|
9.2 |
|
Restructuring charges |
|
— |
|
|
|
0.4 |
|
|
(100.0 |
) |
|
(100.0 |
) |
Total
SG&A expenses |
|
182.6 |
|
|
|
167.5 |
|
|
9.1 |
|
|
9.0 |
|
Earnings
from operations |
|
33.9 |
|
|
|
41.6 |
|
|
(18.6 |
) |
|
|
Earnings
from operations excluding restructuring charges |
|
33.9 |
|
|
|
42.0 |
|
|
(19.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
17.9 |
% |
|
|
18.2 |
% |
|
(0.3 |
)pts. |
|
|
Conversion rate |
|
15.6 |
|
|
|
19.9 |
|
|
(4.3 |
) |
|
|
Conversion rate excluding restructuring charges |
|
15.6 |
|
|
|
20.1 |
|
|
(4.5 |
) |
|
|
Return on
sales |
|
2.8 |
|
|
|
3.6 |
|
|
(0.8 |
) |
|
|
Return on
sales excluding restructuring charges |
|
2.8 |
|
|
|
3.7 |
|
|
(0.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
GLOBAL TALENT
SOLUTIONS |
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
986.5 |
|
|
$ |
992.8 |
|
|
(0.6 |
)% |
|
(1.0 |
)% |
Gross
profit |
|
184.5 |
|
|
|
179.2 |
|
|
3.0 |
|
|
2.2 |
|
SG&A
expenses excluding restructuring charges |
|
150.8 |
|
|
|
146.6 |
|
|
2.9 |
|
|
2.0 |
|
Restructuring charges |
|
— |
|
|
|
2.0 |
|
|
(100.0 |
) |
|
(100.0 |
) |
Total
SG&A expenses |
|
150.8 |
|
|
|
148.6 |
|
|
1.5 |
|
|
0.6 |
|
Earnings
from operations |
|
33.7 |
|
|
|
30.6 |
|
|
10.4 |
|
|
|
Earnings
from operations excluding restructuring charges |
|
33.7 |
|
|
|
32.6 |
|
|
3.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
18.7 |
% |
|
|
18.0 |
% |
|
0.7 |
pts. |
|
|
Conversion rate |
|
18.3 |
|
|
|
17.1 |
|
|
1.2 |
|
|
|
Conversion rate excluding restructuring charges |
|
18.3 |
|
|
|
18.2 |
|
|
0.1 |
|
|
|
Return on
sales |
|
3.4 |
|
|
|
3.1 |
|
|
0.3 |
|
|
|
Return on
sales excluding restructuring charges |
|
3.4 |
|
|
|
3.3 |
|
|
0.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERNATIONAL
STAFFING |
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
571.3 |
|
|
$ |
490.4 |
|
|
16.5 |
% |
|
7.7 |
% |
Gross
profit |
|
79.0 |
|
|
|
73.2 |
|
|
7.8 |
|
|
(0.3 |
) |
Total
SG&A expenses |
|
67.6 |
|
|
|
63.9 |
|
|
5.8 |
|
|
(1.4 |
) |
Earnings
from operations |
|
11.4 |
|
|
|
9.3 |
|
|
21.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
13.8 |
% |
|
|
14.9 |
% |
|
(1.1 |
)pts. |
|
|
Conversion rate |
|
14.4 |
|
|
|
12.8 |
|
|
1.6 |
|
|
|
Return on
sales |
|
2.0 |
|
|
|
1.9 |
|
|
0.1 |
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
July 1, 2018 |
|
Dec. 31, 2017 |
|
July 2, 2017 |
Current
Assets |
|
|
|
|
|
|
Cash and
equivalents |
$ |
33.9 |
|
$ |
32.5 |
|
$ |
60.8 |
|
Trade accounts
receivable, less allowances of |
|
|
|
|
|
|
$13.1, $12.9,
and $12.7 respectively |
|
1,248.9 |
|
|
1,286.7 |
|
|
1,188.1 |
|
Prepaid expenses
and other current assets |
|
64.5 |
|
|
65.1 |
|
|
61.8 |
|
Total current
assets |
|
1,347.3 |
|
|
1,384.3 |
|
|
1,310.7 |
|
|
|
|
|
|
|
|
Noncurrent
Assets |
|
|
|
|
|
|
Property and
equipment, net |
|
84.7 |
|
|
86.1 |
|
|
81.5 |
|
Deferred
taxes |
|
191.7 |
|
|
183.4 |
|
|
185.8 |
|
Goodwill |
|
107.3 |
|
|
107.1 |
|
|
88.4 |
|
Investment in
Persol Holdings |
|
203.2 |
|
|
228.1 |
|
|
170.7 |
|
Investment in
equity affiliate |
|
122.0 |
|
|
117.4 |
|
|
115.2 |
|
Other
assets |
|
278.4 |
|
|
271.8 |
|
|
231.8 |
|
Total noncurrent
assets |
|
987.3 |
|
|
993.9 |
|
|
873.4 |
|
|
|
|
|
|
|
|
Total
Assets |
$ |
2,334.6 |
|
$ |
2,378.2 |
|
$ |
2,184.1 |
|
|
|
|
|
|
|
|
Current
Liabilities |
|
|
|
|
|
|
Short-term
borrowings |
$ |
1.7 |
|
$ |
10.2 |
|
$ |
0.7 |
|
Accounts payable
and accrued liabilities |
|
505.5 |
|
|
537.7 |
|
|
476.1 |
|
Accrued payroll
and related taxes |
|
284.7 |
|
|
287.4 |
|
|
286.4 |
|
Accrued
insurance |
|
25.3 |
|
|
25.7 |
|
|
22.8 |
|
Income and other
taxes |
|
60.7 |
|
|
65.2 |
|
|
57.0 |
|
Total current
liabilities |
|
877.9 |
|
|
926.2 |
|
|
843.0 |
|
|
|
|
|
|
|
|
Noncurrent
Liabilities |
|
|
|
|
|
|
Accrued
insurance |
|
49.2 |
|
|
49.9 |
|
|
44.2 |
|
Accrued
retirement benefits |
|
182.2 |
|
|
178.1 |
|
|
170.1 |
|
Other long-term
liabilities |
|
64.4 |
|
|
72.5 |
|
|
53.4 |
|
Total noncurrent
liabilities |
|
295.8 |
|
|
300.5 |
|
|
267.7 |
|
|
|
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
|
|
Common
stock |
|
40.1 |
|
|
40.1 |
|
|
40.1 |
|
Treasury
stock |
|
(27.4 |
) |
|
(35.2 |
) |
|
(37.6 |
) |
Paid-in
capital |
|
23.4 |
|
|
32.2 |
|
|
31.1 |
|
Earnings
invested in the business |
|
1,134.8 |
|
|
983.6 |
|
|
948.7 |
|
Accumulated
other comprehensive income |
|
(10.0 |
) |
|
130.8 |
|
|
91.1 |
|
Total stockholders'
equity |
|
1,160.9 |
|
|
1,151.5 |
|
|
1,073.4 |
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity |
$ |
2,334.6 |
|
$ |
2,378.2 |
|
$ |
2,184.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
Working
Capital |
$ |
469.4 |
|
$ |
458.1 |
|
$ |
467.7 |
|
Current
Ratio |
|
1.5 |
|
|
1.5 |
|
|
1.6 |
|
Debt-to-capital
% |
|
0.1 |
% |
|
0.9 |
% |
|
0.1 |
% |
Global Days Sales
Outstanding |
|
55 |
|
|
55 |
|
|
55 |
|
Year-to-Date Free
Cash Flow |
$ |
22.9 |
|
$ |
46.2 |
|
$ |
37.1 |
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
FOR THE 26 WEEKS ENDED JULY 1, 2018 AND JULY 2,
2017 |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
2018 |
|
2017 |
Cash flows from
operating activities: |
|
|
|
|
Net
earnings |
$ |
13.7 |
|
$ |
30.9 |
|
Noncash
adjustments: |
|
|
|
|
Depreciation and amortization |
|
12.9 |
|
|
10.6 |
|
Provision
for bad debts |
|
1.5 |
|
|
2.9 |
|
Stock-based compensation |
|
4.7 |
|
|
4.2 |
|
Loss on
investment in Persol Holdings |
|
28.8 |
|
|
— |
|
Other,
net |
|
(2.6 |
) |
|
(0.5 |
) |
Changes
in operating assets and liabilities |
|
(25.8 |
) |
|
(3.7 |
) |
|
|
|
|
|
Net cash from operating activities |
|
33.2 |
|
|
44.4 |
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
Capital
expenditures |
|
(10.3 |
) |
|
(7.3 |
) |
Other
investing activities |
|
(0.6 |
) |
|
— |
|
|
|
|
|
|
Net cash used in investing activities |
|
(10.9 |
) |
|
(7.3 |
) |
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
Net
change in short-term borrowings |
|
(8.4 |
) |
|
0.7 |
|
Dividend
payments |
|
(5.9 |
) |
|
(5.8 |
) |
Payments
of tax withholding for stock awards |
|
(6.2 |
) |
|
(0.5 |
) |
Other
financing activities |
|
— |
|
|
(0.1 |
) |
|
|
|
|
|
Net cash used in financing activities |
|
(20.5 |
) |
|
(5.7 |
) |
|
|
|
|
|
Effect of
exchange rates on cash, cash equivalents and restricted
cash |
|
(0.1 |
) |
|
(0.2 |
) |
|
|
|
|
|
Net change in
cash, cash equivalents and restricted cash |
|
1.7 |
|
|
31.2 |
|
Cash, cash
equivalents and restricted cash at beginning of
period |
|
36.9 |
|
|
34.3 |
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash at end of period |
$ |
38.6 |
|
$ |
65.5 |
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
REVENUE FROM SERVICES |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter (Americas, International and
GTS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2018 |
|
2017 |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
United
States |
$ |
981.2 |
|
$ |
970.1 |
|
|
1.1 |
% |
|
1.1 |
% |
|
Canada |
|
37.0 |
|
|
34.6 |
|
|
6.8 |
|
|
2.6 |
|
|
Mexico |
|
30.0 |
|
|
28.3 |
|
|
6.2 |
|
|
11.4 |
|
|
Puerto
Rico |
|
26.2 |
|
|
17.6 |
|
|
49.0 |
|
|
49.0 |
|
|
Brazil |
|
9.0 |
|
|
12.7 |
|
|
(29.1 |
) |
|
(22.6 |
) |
|
Total
Americas |
|
1,083.4 |
|
|
1,063.3 |
|
|
1.9 |
|
|
2.0 |
|
|
|
|
|
|
|
|
|
|
|
|
EMEA |
|
|
|
|
|
|
|
|
|
France |
|
72.0 |
|
|
68.3 |
|
|
5.2 |
|
|
(2.6 |
) |
|
Switzerland |
|
52.8 |
|
|
53.9 |
|
|
(2.0 |
) |
|
(1.7 |
) |
|
Portugal |
|
51.2 |
|
|
41.7 |
|
|
23.1 |
|
|
13.6 |
|
|
United
Kingdom |
|
28.5 |
|
|
20.8 |
|
|
37.0 |
|
|
28.9 |
|
|
Russia |
|
25.6 |
|
|
24.0 |
|
|
6.5 |
|
|
15.4 |
|
|
Italy |
|
19.3 |
|
|
15.7 |
|
|
23.0 |
|
|
14.4 |
|
|
Germany |
|
14.8 |
|
|
14.6 |
|
|
0.5 |
|
|
(7.2 |
) |
|
Ireland |
|
11.7 |
|
|
7.4 |
|
|
58.4 |
|
|
46.4 |
|
|
Norway |
|
9.2 |
|
|
8.4 |
|
|
10.4 |
|
|
4.3 |
|
|
Other |
|
12.8 |
|
|
11.0 |
|
|
16.0 |
|
|
8.1 |
|
|
Total
EMEA |
|
297.9 |
|
|
265.8 |
|
|
12.0 |
|
|
7.0 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
APAC |
|
5.6 |
|
|
4.5 |
|
|
24.2 |
|
|
23.0 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Kelly
Services, Inc. |
$ |
1,386.9 |
|
$ |
1,333.6 |
|
|
4.0 |
% |
|
3.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
REVENUE FROM SERVICES |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
June Year to Date (Americas, International and
GTS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2018 |
|
2017 |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
United
States |
$ |
1,955.9 |
|
$ |
1,925.7 |
|
|
1.6 |
% |
|
1.6 |
% |
Canada |
|
70.6 |
|
|
68.7 |
|
|
2.7 |
|
|
(1.6 |
) |
Mexico |
|
60.4 |
|
|
52.1 |
|
|
16.0 |
|
|
14.5 |
|
Puerto
Rico |
|
46.0 |
|
|
35.3 |
|
|
30.6 |
|
|
30.6 |
|
Brazil |
|
18.5 |
|
|
26.0 |
|
|
(29.1 |
) |
|
(25.4 |
) |
Total
Americas |
|
2,151.4 |
|
|
2,107.8 |
|
|
2.1 |
|
|
1.9 |
|
|
|
|
|
|
|
|
|
|
EMEA |
|
|
|
|
|
|
|
|
France |
|
143.9 |
|
|
129.1 |
|
|
11.4 |
|
|
(0.1 |
) |
Switzerland |
|
102.5 |
|
|
102.2 |
|
|
0.3 |
|
|
(2.3 |
) |
Portugal |
|
102.3 |
|
|
78.0 |
|
|
31.3 |
|
|
17.5 |
|
United
Kingdom |
|
57.5 |
|
|
41.0 |
|
|
40.3 |
|
|
28.5 |
|
Russia |
|
51.7 |
|
|
46.8 |
|
|
10.5 |
|
|
13.5 |
|
Italy |
|
39.8 |
|
|
29.4 |
|
|
35.5 |
|
|
21.6 |
|
Germany |
|
31.2 |
|
|
27.8 |
|
|
12.0 |
|
|
0.1 |
|
Ireland |
|
23.0 |
|
|
15.1 |
|
|
51.8 |
|
|
36.0 |
|
Norway |
|
17.6 |
|
|
16.0 |
|
|
10.0 |
|
|
3.1 |
|
Other |
|
25.2 |
|
|
21.4 |
|
|
17.7 |
|
|
5.9 |
|
Total
EMEA |
|
594.7 |
|
|
506.8 |
|
|
17.3 |
|
|
8.4 |
|
|
|
|
|
|
|
|
|
|
Total
APAC |
|
10.7 |
|
|
8.7 |
|
|
22.1 |
|
|
19.0 |
|
|
|
|
|
|
|
|
|
|
Total Kelly
Services, Inc. |
$ |
2,756.8 |
|
$ |
2,623.3 |
|
|
5.1 |
% |
|
3.2 |
% |
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
RECONCILIATION OF NON-GAAP
MEASURES |
(UNAUDITED) |
(In millions of dollars except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
June Year to Date |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Earnings from
operations |
|
$ |
20.4 |
|
|
$ |
20.3 |
|
|
$ |
32.4 |
|
|
$ |
36.7 |
|
Restructuring charges
(Note 1) |
|
— |
|
|
— |
|
|
— |
|
|
2.4 |
|
Adjusted earnings from
operations |
|
$ |
20.4 |
|
|
$ |
20.3 |
|
|
$ |
32.4 |
|
|
$ |
39.1 |
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
June Year to Date |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Income tax (benefit)
expense |
|
$ |
(15.6 |
) |
|
$ |
1.5 |
|
|
$ |
(9.2 |
) |
|
$ |
4.2 |
|
Tax benefit on
investment in Persol Holdings (Note 2) |
|
16.2 |
|
|
— |
|
|
8.9 |
|
|
— |
|
Tax expense on
restructuring charges (Note 1) |
|
— |
|
|
— |
|
|
— |
|
|
0.7 |
|
Adjusted income tax
expense (benefit) |
|
$ |
0.6 |
|
|
$ |
1.5 |
|
|
$ |
(0.3 |
) |
|
$ |
4.9 |
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
June Year to Date |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Net earnings
(loss) |
|
$ |
(15.4 |
) |
|
$ |
18.7 |
|
|
$ |
13.7 |
|
|
$ |
30.9 |
|
Loss on investment in
Persol Holdings, net of taxes (Note 2) |
|
36.3 |
|
|
— |
|
|
19.9 |
|
|
— |
|
Restructuring charges,
net of taxes (Note 1) |
|
— |
|
|
— |
|
|
— |
|
|
1.7 |
|
Adjusted net
earnings |
|
$ |
20.9 |
|
|
$ |
18.7 |
|
|
$ |
33.6 |
|
|
$ |
32.6 |
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
June Year to Date |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
Per Share |
|
Per Share |
Net earnings
(loss) |
|
$ |
(0.40 |
) |
|
$ |
0.47 |
|
|
$ |
0.35 |
|
|
$ |
0.78 |
|
Loss on investment in
Persol Holdings, net of taxes (Note 2) |
|
0.94 |
|
|
— |
|
|
0.51 |
|
|
— |
|
Restructuring charges,
net of taxes (Note 1) |
|
— |
|
|
— |
|
|
— |
|
|
0.04 |
|
Adjusted net
earnings |
|
$ |
0.54 |
|
|
$ |
0.47 |
|
|
$ |
0.86 |
|
|
$ |
0.82 |
|
Note: Earnings per share amounts for each quarter are required
to be computed independently and may not equal the amounts computed
for the total year.
KELLY SERVICES, INC. AND
SUBSIDIARIESRECONCILIATION OF NON-GAAP
MEASURES(UNAUDITED)
Management believes that the non-GAAP (Generally Accepted
Accounting Principles) information excluding the 2017 restructuring
charges and 2018 loss on investment in Persol Holdings is useful to
understand the Company's fiscal 2018 financial performance and
increases comparability. Specifically, Management believes
that removing the impact of 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 2017 represent costs related
primarily to optimizing our GTS service delivery models to deliver
expected cost savings.
(2) Loss on investment in Persol Holdings in 2018
represents the change in fair value of the investment during the
period presented and the related tax benefit.
Grafico Azioni Kelly Services (NASDAQ:KELYA)
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