Financial Highlights
Kelly Services (Nasdaq: KELYA) (Nasdaq: KELYB), a global leader in
providing workforce solutions, today announced results for the
third quarter of 2018.
George S. Corona, President and Chief Executive Officer,
announced revenue for the third quarter of 2018 totaled $1.3
billion, a 1.0% increase, or 1.9% in constant currency, compared to
the corresponding quarter of
2017.
Earnings from operations for the third quarter of 2018 totaled
$21.9 million, compared to the $18.2 million reported for the third
quarter of 2017.
Diluted earnings per share in the third quarter of 2018 were
$0.84 compared to earnings per share of $0.58 in the third quarter
of 2017. Included in earnings per share in the third quarter of
2018 is the favorable impact of $0.28 due to the non-cash after-tax
gain 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 gain on Persol Holdings common
stock net of tax, diluted earnings per share for the quarter were
$0.56.
“The company performed well in the third quarter despite the
continuing tight labor market,” said Kelly Services President and
CEO George S. Corona. “Our teams are working on new and innovative
ways to close the labor supply gap and we are taking the actions
necessary to deliver on the bottom line while continuing to invest
in technology for our future. Given the current economic
environment we will carefully manage our business with a focus on
adding value to our clients and improving our profitability,” he
said.
Kelly also reported that on November 7, its board of directors
declared a dividend of $0.075 per share. The dividend is payable
December 6, 2018 to shareholders of record as of the close of
business on November 21, 2018.
In conjunction with its third 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 November 7 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 realize value from our tax credit and
net operating loss carryforwards, 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 SEPTEMBER 30, 2018 AND
OCTOBER 1, 2017 |
(UNAUDITED) |
(In millions of dollars except per share data) |
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2018 |
|
2017 |
|
Change |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
Revenue from
services |
$ |
1,342.4 |
|
$ |
1,328.8 |
|
$ |
13.6 |
|
|
1.0 |
% |
|
1.9 |
% |
|
|
|
|
|
|
|
|
|
Cost of services |
|
1,103.3 |
|
|
1,098.1 |
|
|
5.2 |
|
|
0.5 |
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
239.1 |
|
|
230.7 |
|
|
8.4 |
|
|
3.6 |
|
|
4.5 |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
217.2 |
|
|
212.5 |
|
|
4.7 |
|
|
2.2 |
|
|
3.0 |
|
|
|
|
|
|
|
|
|
|
Earnings from
operations |
|
21.9 |
|
|
18.2 |
|
|
3.7 |
|
|
20.6 |
|
|
|
|
|
|
|
|
|
|
|
Gain on investment in
Persol Holdings |
|
15.8 |
|
|
— |
|
|
15.8 |
|
|
100.0 |
|
|
|
|
|
|
|
|
|
|
|
Other expense, net |
|
(0.7 |
) |
|
(0.4 |
) |
|
(0.3 |
) |
|
(74.3 |
) |
|
|
|
|
|
|
|
|
|
|
Earnings before
taxes and equity in net earnings (loss) of affiliate |
|
37.0 |
|
|
17.8 |
|
|
19.2 |
|
|
108.2 |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit) |
|
5.9 |
|
|
(4.1 |
) |
|
10.0 |
|
|
246.4 |
|
|
|
|
|
|
|
|
|
|
|
Net earnings
before equity in net earnings (loss) of affiliate |
|
31.1 |
|
|
21.9 |
|
|
9.2 |
|
|
42.0 |
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings
(loss) of affiliate |
|
2.0 |
|
|
1.1 |
|
|
0.9 |
|
|
80.5 |
|
|
|
|
|
|
|
|
|
|
|
Net
earnings |
$ |
33.1 |
|
$ |
23.0 |
|
$ |
10.1 |
|
|
43.9 |
% |
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share |
$ |
0.84 |
|
$ |
0.59 |
|
$ |
0.25 |
|
|
42.4 |
% |
|
Diluted
earnings per share |
$ |
0.84 |
|
$ |
0.58 |
|
$ |
0.26 |
|
|
44.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement
income (included in revenue from services) |
$ |
18.4 |
|
$ |
14.2 |
|
$ |
4.2 |
|
|
30.2 |
% |
|
32.4 |
% |
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
17.8 |
% |
|
17.4 |
% |
|
0.4 |
pts. |
|
|
|
|
|
|
|
|
|
|
|
Conversion rate |
|
9.2 |
|
|
7.9 |
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
|
% Return: |
|
|
|
|
|
|
|
|
Earnings
from operations |
|
1.6 |
|
|
1.4 |
|
|
0.2 |
|
|
|
Net
earnings |
|
2.5 |
|
|
1.7 |
|
|
0.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate |
|
16.1 |
% |
|
(22.9 |
)% |
|
39.0 |
pts. |
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (millions): |
|
|
|
|
|
|
|
|
Basic |
|
38.8 |
|
|
38.3 |
|
|
|
|
|
Diluted |
|
38.9 |
|
|
38.8 |
|
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
EARNINGS |
FOR THE 39 WEEKS ENDED SEPTEMBER 30, 2018 AND
OCTOBER 1, 2017 |
(UNAUDITED) |
(In millions of dollars except per share data) |
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2018 |
|
2017 |
|
Change |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
Revenue from
services |
$ |
4,099.2 |
|
$ |
3,952.1 |
|
$ |
147.1 |
|
|
3.7 |
% |
|
2.8 |
% |
|
|
|
|
|
|
|
|
|
Cost of services |
|
3,381.4 |
|
|
3,261.0 |
|
|
120.4 |
|
|
3.7 |
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
717.8 |
|
|
691.1 |
|
|
26.7 |
|
|
3.9 |
|
|
3.1 |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
663.5 |
|
|
636.2 |
|
|
27.3 |
|
|
4.3 |
|
|
3.6 |
|
|
|
|
|
|
|
|
|
|
Earnings from
operations |
|
54.3 |
|
|
54.9 |
|
|
(0.6 |
) |
|
(1.0 |
) |
|
|
|
|
|
|
|
|
|
|
Loss on investment in
Persol Holdings |
|
(13.0 |
) |
|
— |
|
|
(13.0 |
) |
|
(100.0 |
) |
|
|
|
|
|
|
|
|
|
|
Other expense, net |
|
(1.8 |
) |
|
(2.5 |
) |
|
0.7 |
|
|
29.3 |
|
|
|
|
|
|
|
|
|
|
|
Earnings before
taxes and equity in net earnings (loss) of affiliate |
|
39.5 |
|
|
52.4 |
|
|
(12.9 |
) |
|
(24.4 |
) |
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense |
|
(3.3 |
) |
|
0.1 |
|
|
(3.4 |
) |
|
NM |
|
|
|
|
|
|
|
|
|
|
|
Net earnings
before equity in net earnings (loss) of affiliate |
|
42.8 |
|
|
52.3 |
|
|
(9.5 |
) |
|
(18.0 |
) |
|
|
|
|
|
|
|
|
|
|
Equity in net earnings
(loss) of affiliate |
|
4.0 |
|
|
1.6 |
|
|
2.4 |
|
|
143.5 |
|
|
|
|
|
|
|
|
|
|
|
Net
earnings |
$ |
46.8 |
|
$ |
53.9 |
|
$ |
(7.1 |
) |
|
(13.0 |
)% |
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share |
$ |
1.20 |
|
$ |
1.38 |
|
$ |
(0.18 |
) |
|
(13.0 |
)% |
|
Diluted
earnings per share |
$ |
1.19 |
|
$ |
1.37 |
|
$ |
(0.18 |
) |
|
(13.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement
income (included in revenue from services) |
$ |
52.3 |
|
$ |
41.4 |
|
$ |
10.9 |
|
|
26.4 |
% |
|
24.6 |
% |
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
17.5 |
% |
|
17.5 |
% |
|
— |
pts. |
|
|
|
|
|
|
|
|
|
|
|
Conversion rate |
|
7.6 |
|
|
7.9 |
|
|
(0.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
% Return: |
|
|
|
|
|
|
|
|
Earnings
from operations |
|
1.3 |
|
|
1.4 |
|
|
(0.1 |
) |
|
|
Net
earnings |
|
1.1 |
|
|
1.4 |
|
|
(0.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate |
|
(8.2 |
)% |
|
0.2 |
% |
|
(8.4 |
)pts. |
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (millions): |
|
|
|
|
|
|
|
|
Basic |
|
38.7 |
|
|
38.3 |
|
|
|
|
|
Diluted |
|
38.8 |
|
|
38.8 |
|
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
RESULTS OF OPERATIONS BY SEGMENT |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2018 |
|
|
2017 |
|
Change |
|
Change |
AMERICAS
STAFFING |
|
|
|
|
|
|
|
|
Revenue from
services |
$ |
561.8 |
|
|
$ |
554.8 |
|
|
1.3 |
% |
|
2.0 |
% |
Gross
profit |
|
106.0 |
|
|
|
98.8 |
|
|
7.3 |
|
|
7.9 |
|
Total
SG&A expenses |
|
91.2 |
|
|
|
85.5 |
|
|
6.6 |
|
|
7.3 |
|
Earnings
from operations |
|
14.8 |
|
|
|
13.3 |
|
|
11.3 |
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
18.9 |
% |
|
|
17.8 |
% |
|
1.1 |
pts. |
|
Conversion rate |
|
14.0 |
|
|
|
13.5 |
|
|
0.5 |
|
|
Return on
sales |
|
2.6 |
|
|
|
2.4 |
|
|
0.2 |
|
|
|
|
|
|
|
|
|
|
|
GLOBAL TALENT
SOLUTIONS |
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
507.6 |
|
|
$ |
503.0 |
|
|
0.9 |
% |
|
1.2 |
% |
Gross
profit |
|
97.3 |
|
|
|
93.0 |
|
|
4.6 |
|
|
5.1 |
|
Total
SG&A expenses |
|
73.2 |
|
|
|
72.2 |
|
|
1.5 |
|
|
1.9 |
|
Earnings
from operations |
|
24.1 |
|
|
|
20.8 |
|
|
15.7 |
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
19.2 |
% |
|
|
18.5 |
% |
|
0.7 |
pts. |
|
Conversion rate |
|
24.7 |
|
|
|
22.4 |
|
|
2.3 |
|
|
Return on
sales |
|
4.7 |
|
|
|
4.1 |
|
|
0.6 |
|
|
|
|
|
|
|
|
|
|
|
INTERNATIONAL
STAFFING |
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
277.2 |
|
|
$ |
275.6 |
|
|
0.6 |
% |
|
2.8 |
% |
Gross
profit |
|
36.4 |
|
|
|
39.5 |
|
|
(7.8 |
) |
|
(5.6 |
) |
Total
SG&A expenses |
|
31.6 |
|
|
|
32.3 |
|
|
(2.7 |
) |
|
(0.3 |
) |
Earnings
from operations |
|
4.8 |
|
|
|
7.2 |
|
|
(31.1 |
) |
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
13.2 |
% |
|
|
14.3 |
% |
|
(1.1 |
)pts. |
|
Conversion rate |
|
13.5 |
|
|
|
18.0 |
|
|
(4.5 |
) |
|
Return on
sales |
|
1.8 |
|
|
|
2.6 |
|
|
(0.8 |
) |
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
RESULTS OF OPERATIONS BY SEGMENT |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
September Year to Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2018 |
|
|
2017 |
|
Change |
|
Change |
AMERICAS
STAFFING |
|
|
|
|
|
|
|
|
|
Revenue from
services |
$ |
1,770.1 |
|
|
$ |
1,703.5 |
|
|
3.9 |
% |
|
4.1 |
% |
Gross
profit |
|
322.5 |
|
|
|
307.9 |
|
|
4.7 |
|
|
4.9 |
|
SG&A
expenses excluding restructuring charges |
|
273.8 |
|
|
|
252.6 |
|
|
8.4 |
|
|
8.6 |
|
Restructuring charges |
|
— |
|
|
|
0.4 |
|
|
(100.0 |
) |
|
(100.0 |
) |
Total
SG&A expenses |
|
273.8 |
|
|
|
253.0 |
|
|
8.2 |
|
|
8.4 |
|
Earnings
from operations |
|
48.7 |
|
|
|
54.9 |
|
|
(11.4 |
) |
|
|
Earnings
from operations excluding restructuring charges |
|
48.7 |
|
|
|
55.3 |
|
|
(12.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
18.2 |
% |
|
|
18.1 |
% |
|
0.1 |
pts |
|
|
Conversion rate |
|
15.1 |
|
|
|
17.8 |
|
|
(2.7 |
) |
|
|
Conversion rate excluding restructuring charges |
|
15.1 |
|
|
|
18.0 |
|
|
(2.9 |
) |
|
|
Return on
sales |
|
2.8 |
|
|
|
3.2 |
|
|
(0.4 |
) |
|
|
Return on
sales excluding restructuring charges |
|
2.8 |
|
|
|
3.2 |
|
|
(0.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
GLOBAL TALENT
SOLUTIONS |
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
1,494.1 |
|
|
$ |
1,495.8 |
|
|
(0.1 |
)% |
|
(0.3 |
)% |
Gross
profit |
|
281.8 |
|
|
|
272.2 |
|
|
3.6 |
|
|
3.2 |
|
SG&A
expenses excluding restructuring charges |
|
224.0 |
|
|
|
218.8 |
|
|
2.4 |
|
|
2.0 |
|
Restructuring charges |
|
— |
|
|
|
2.0 |
|
|
(100.0 |
) |
|
(100.0 |
) |
Total
SG&A expenses |
|
224.0 |
|
|
|
220.8 |
|
|
1.5 |
|
|
1.0 |
|
Earnings
from operations |
|
57.8 |
|
|
|
51.4 |
|
|
12.5 |
|
|
|
Earnings
from operations excluding restructuring charges |
|
57.8 |
|
|
|
53.4 |
|
|
8.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
18.9 |
% |
|
|
18.2 |
% |
|
0.7 |
pts. |
|
|
Conversion rate |
|
20.5 |
|
|
|
18.9 |
|
|
1.6 |
|
|
|
Conversion rate excluding restructuring charges |
|
20.5 |
|
|
|
19.6 |
|
|
0.9 |
|
|
|
Return on
sales |
|
3.9 |
|
|
|
3.4 |
|
|
0.5 |
|
|
|
Return on
sales excluding restructuring charges |
|
3.9 |
|
|
|
3.6 |
|
|
0.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERNATIONAL
STAFFING |
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
848.5 |
|
|
$ |
766.0 |
|
|
10.8 |
% |
|
5.9 |
% |
Gross
profit |
|
115.4 |
|
|
|
112.7 |
|
|
2.3 |
|
|
(2.1 |
) |
Total
SG&A expenses |
|
99.2 |
|
|
|
96.2 |
|
|
3.0 |
|
|
(1.0 |
) |
Earnings
from operations |
|
16.2 |
|
|
|
16.5 |
|
|
(1.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
13.6 |
% |
|
|
14.7 |
% |
|
(1.1 |
)pts. |
|
|
Conversion rate |
|
14.1 |
|
|
|
14.6 |
|
|
(0.5 |
) |
|
|
Return on
sales |
|
1.9 |
|
|
|
2.2 |
|
|
(0.3 |
) |
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
September 30, 2018 |
|
Dec. 31, 2017 |
|
October 1, 2017 |
Current
Assets |
|
|
|
|
|
|
Cash and
equivalents |
$ |
20.8 |
|
$ |
32.5 |
|
$ |
22.2 |
|
Trade accounts
receivable, less allowances of |
|
|
|
|
|
|
$12.4, $12.9,
and $13.1 respectively |
|
1,294.0 |
|
|
1,286.7 |
|
|
1,271.7 |
|
Prepaid expenses
and other current assets |
|
68.0 |
|
|
65.1 |
|
|
70.0 |
|
Total current
assets |
|
1,382.8 |
|
|
1,384.3 |
|
|
1,363.9 |
|
|
|
|
|
|
|
|
Noncurrent
Assets |
|
|
|
|
|
|
Property and
equipment, net |
|
85.0 |
|
|
86.1 |
|
|
81.4 |
|
Deferred
taxes |
|
196.5 |
|
|
183.4 |
|
|
192.0 |
|
Goodwill |
|
107.3 |
|
|
107.1 |
|
|
107.1 |
|
Investment in
Persol Holdings |
|
213.6 |
|
|
228.1 |
|
|
212.4 |
|
Investment in
equity affiliate |
|
120.3 |
|
|
117.4 |
|
|
116.4 |
|
Other
assets |
|
287.6 |
|
|
271.8 |
|
|
263.5 |
|
Total noncurrent
assets |
|
1,010.3 |
|
|
993.9 |
|
|
972.8 |
|
|
|
|
|
|
|
|
Total
Assets |
$ |
2,393.1 |
|
$ |
2,378.2 |
|
$ |
2,336.7 |
|
|
|
|
|
|
|
|
Current
Liabilities |
|
|
|
|
|
|
Short-term
borrowings |
$ |
8.1 |
|
$ |
10.2 |
|
$ |
23.9 |
|
Accounts payable
and accrued liabilities |
|
497.0 |
|
|
537.7 |
|
|
496.1 |
|
Accrued payroll
and related taxes |
|
304.7 |
|
|
287.4 |
|
|
312.6 |
|
Accrued
insurance |
|
25.9 |
|
|
25.7 |
|
|
25.6 |
|
Income and other
taxes |
|
66.5 |
|
|
65.2 |
|
|
60.0 |
|
Total current
liabilities |
|
902.2 |
|
|
926.2 |
|
|
918.2 |
|
|
|
|
|
|
|
|
Noncurrent
Liabilities |
|
|
|
|
|
|
Accrued
insurance |
|
50.2 |
|
|
49.9 |
|
|
49.7 |
|
Accrued
retirement benefits |
|
186.9 |
|
|
178.1 |
|
|
175.0 |
|
Other long-term
liabilities |
|
68.0 |
|
|
72.5 |
|
|
66.8 |
|
Total noncurrent
liabilities |
|
305.1 |
|
|
300.5 |
|
|
291.5 |
|
|
|
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
|
|
Common
stock |
|
40.1 |
|
|
40.1 |
|
|
40.1 |
|
Treasury
stock |
|
(27.3 |
) |
|
(35.2 |
) |
|
(35.2 |
) |
Paid-in
capital |
|
25.0 |
|
|
32.2 |
|
|
30.0 |
|
Earnings
invested in the business |
|
1,165.0 |
|
|
983.6 |
|
|
968.8 |
|
Accumulated
other comprehensive income |
|
(17.0 |
) |
|
130.8 |
|
|
123.3 |
|
Total stockholders'
equity |
|
1,185.8 |
|
|
1,151.5 |
|
|
1,127.0 |
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity |
$ |
2,393.1 |
|
$ |
2,378.2 |
|
$ |
2,336.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
Working
Capital |
$ |
480.6 |
|
$ |
458.1 |
|
$ |
445.7 |
|
Current
Ratio |
|
1.5 |
|
|
1.5 |
|
|
1.5 |
|
Debt-to-capital
% |
|
0.7 |
% |
|
0.9 |
% |
|
2.1 |
% |
Global Days Sales
Outstanding |
|
58 |
|
|
55 |
|
|
58 |
|
Year-to-Date Free
Cash Flow |
$ |
15.4 |
|
$ |
46.2 |
|
$ |
18.3 |
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
CASH FLOWS |
FOR THE 39 WEEKS ENDED
SEPTEMBER 30, 2018 AND OCTOBER 1, 2017 |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
2018 |
|
2017 |
Cash flows from operating activities: |
|
|
|
|
Net earnings |
$ |
46.8 |
|
$ |
53.9 |
|
Noncash adjustments: |
|
|
|
|
Depreciation and amortization |
|
19.5 |
|
|
16.5 |
|
Provision for bad debts |
|
1.3 |
|
|
3.6 |
|
Stock-based compensation |
|
6.7 |
|
|
6.8 |
|
Loss on investment in Persol Holdings |
|
13.0 |
|
|
— |
|
Other, net |
|
(5.0 |
) |
|
(2.3 |
) |
Changes in operating assets and liabilities, net of
acquisition |
|
(49.0 |
) |
|
(45.5 |
) |
|
|
|
|
|
Net cash from operating
activities |
|
33.3 |
|
|
33.0 |
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Capital expenditures |
|
(17.9 |
) |
|
(14.7 |
) |
Acquisition of company, net of cash received |
|
— |
|
|
(37.2 |
) |
Investment in equity securities |
|
(5.0 |
) |
|
— |
|
(Loan to) proceeds from repayment of loan to equity
affiliate |
|
(2.9 |
) |
|
0.6 |
|
Other investing activities |
|
(0.8 |
) |
|
— |
|
|
|
|
|
|
Net cash used in investing
activities |
|
(26.6 |
) |
|
(51.3 |
) |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Net change in short-term borrowings |
|
(1.9 |
) |
|
23.9 |
|
Dividend payments |
|
(8.8 |
) |
|
(8.7 |
) |
Payments of tax withholding for stock awards |
|
(6.3 |
) |
|
(1.7 |
) |
Other financing activities |
|
— |
|
|
(0.1 |
) |
|
|
|
|
|
Net cash (used in) from financing
activities |
|
(17.0 |
) |
|
13.4 |
|
|
|
|
|
|
Effect of exchange rates on cash, cash equivalents and
restricted cash |
|
(0.7 |
) |
|
(2.3 |
) |
|
|
|
|
|
Net change in cash, cash equivalents and restricted
cash |
|
(11.0 |
) |
|
(7.2 |
) |
Cash, cash equivalents and restricted cash at beginning of
period |
|
36.9 |
|
|
34.3 |
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash at end of
period |
$ |
25.9 |
|
$ |
27.1 |
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
REVENUE FROM
SERVICES |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
(Americas, International and GTS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2018 |
|
2017 |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
United States |
$ |
942.5 |
|
$ |
941.1 |
|
|
0.1 |
% |
|
0.1 |
% |
Canada |
|
37.0 |
|
|
37.1 |
|
|
(0.2 |
) |
|
4.0 |
|
Mexico |
|
32.3 |
|
|
32.9 |
|
|
(1.9 |
) |
|
4.3 |
|
Puerto Rico |
|
28.2 |
|
|
15.9 |
|
|
77.0 |
|
|
77.0 |
|
Brazil |
|
8.1 |
|
|
12.3 |
|
|
(33.9 |
) |
|
(20.8 |
) |
Total Americas |
|
1,048.1 |
|
|
1,039.3 |
|
|
0.8 |
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
EMEA |
|
|
|
|
|
|
|
|
France |
|
68.8 |
|
|
73.0 |
|
|
(5.6 |
) |
|
(4.7 |
) |
Switzerland |
|
53.8 |
|
|
59.1 |
|
|
(9.0 |
) |
|
(7.0 |
) |
Portugal |
|
48.2 |
|
|
46.0 |
|
|
4.5 |
|
|
5.5 |
|
United Kingdom |
|
28.1 |
|
|
23.3 |
|
|
20.4 |
|
|
20.9 |
|
Russia |
|
24.0 |
|
|
22.5 |
|
|
7.0 |
|
|
19.3 |
|
Italy |
|
18.3 |
|
|
15.9 |
|
|
15.3 |
|
|
16.5 |
|
Germany |
|
13.8 |
|
|
15.5 |
|
|
(10.3 |
) |
|
(9.4 |
) |
Ireland |
|
11.3 |
|
|
8.3 |
|
|
36.7 |
|
|
38.2 |
|
Norway |
|
8.8 |
|
|
8.9 |
|
|
(1.7 |
) |
|
1.8 |
|
Other |
|
13.0 |
|
|
12.1 |
|
|
7.0 |
|
|
9.3 |
|
Total EMEA |
|
288.1 |
|
|
284.6 |
|
|
1.3 |
|
|
3.5 |
|
|
|
|
|
|
|
|
|
|
Total APAC |
|
6.2 |
|
|
4.9 |
|
|
28.9 |
|
|
37.5 |
|
|
|
|
|
|
|
|
|
|
Total Kelly Services, Inc. |
$ |
1,342.4 |
|
$ |
1,328.8 |
|
|
1.0 |
% |
|
1.9 |
% |
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
REVENUE FROM
SERVICES |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
September Year to Date
(Americas, International and GTS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
2018 |
|
2017 |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
United States |
$ |
2,898.4 |
|
$ |
2,866.8 |
|
|
1.1 |
% |
|
1.1 |
% |
Canada |
|
107.6 |
|
|
105.8 |
|
|
1.7 |
|
|
0.3 |
|
Mexico |
|
92.7 |
|
|
85.0 |
|
|
9.1 |
|
|
10.5 |
|
Puerto Rico |
|
74.2 |
|
|
51.2 |
|
|
45.0 |
|
|
45.0 |
|
Brazil |
|
26.6 |
|
|
38.3 |
|
|
(30.6 |
) |
|
(23.9 |
) |
Total Americas |
|
3,199.5 |
|
|
3,147.1 |
|
|
1.7 |
|
|
1.7 |
|
|
|
|
|
|
|
|
|
|
EMEA |
|
|
|
|
|
|
|
|
France |
|
212.7 |
|
|
202.1 |
|
|
5.3 |
|
|
(1.8 |
) |
Switzerland |
|
156.3 |
|
|
161.3 |
|
|
(3.1 |
) |
|
(4.0 |
) |
Portugal |
|
150.5 |
|
|
124.0 |
|
|
21.3 |
|
|
13.1 |
|
United Kingdom |
|
85.6 |
|
|
64.3 |
|
|
33.1 |
|
|
25.7 |
|
Russia |
|
75.7 |
|
|
69.3 |
|
|
9.3 |
|
|
15.4 |
|
Italy |
|
58.1 |
|
|
45.3 |
|
|
28.4 |
|
|
19.8 |
|
Germany |
|
45.0 |
|
|
43.3 |
|
|
4.0 |
|
|
(3.3 |
) |
Ireland |
|
34.3 |
|
|
23.4 |
|
|
46.4 |
|
|
36.8 |
|
Norway |
|
26.4 |
|
|
24.9 |
|
|
5.8 |
|
|
2.6 |
|
Other |
|
38.2 |
|
|
33.5 |
|
|
13.9 |
|
|
7.2 |
|
Total EMEA |
|
882.8 |
|
|
791.4 |
|
|
11.6 |
|
|
6.6 |
|
|
|
|
|
|
|
|
|
|
Total APAC |
|
16.9 |
|
|
13.6 |
|
|
24.5 |
|
|
25.6 |
|
|
|
|
|
|
|
|
|
|
Total Kelly Services, Inc. |
$ |
4,099.2 |
|
$ |
3,952.1 |
|
|
3.7 |
% |
|
2.8 |
% |
|
|
|
|
|
|
|
|
|
KELLY SERVICES,
INC. AND SUBSIDIARIES |
RECONCILIATION OF
NON-GAAP MEASURES |
(UNAUDITED) |
(In millions of dollars
except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
September Year to
Date |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Earnings from operations |
|
$ |
21.9 |
|
|
$ |
18.2 |
|
|
$ |
54.3 |
|
|
$ |
54.9 |
|
Restructuring charges (Note 1) |
|
— |
|
|
— |
|
|
— |
|
|
2.4 |
|
Adjusted earnings from operations |
|
$ |
21.9 |
|
|
$ |
18.2 |
|
|
$ |
54.3 |
|
|
$ |
57.3 |
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
September Year to
Date |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Income tax expense (benefit) |
|
$ |
5.9 |
|
|
$ |
(4.1 |
) |
|
$ |
(3.3 |
) |
|
$ |
0.1 |
|
Tax (expense) benefit on investment in Persol Holdings (Note
2) |
|
(4.9 |
) |
|
— |
|
|
4.0 |
|
|
— |
|
Tax expense on restructuring charges (Note 1) |
|
— |
|
|
— |
|
|
— |
|
|
0.7 |
|
Adjusted income tax expense (benefit) |
|
$ |
1.0 |
|
|
$ |
(4.1 |
) |
|
$ |
0.7 |
|
|
$ |
0.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
September Year to
Date |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
33.1 |
|
|
$ |
23.0 |
|
|
$ |
46.8 |
|
|
$ |
53.9 |
|
(Gain) loss on investment in Persol Holdings, net of taxes (Note
2) |
|
(10.9 |
) |
|
— |
|
|
9.0 |
|
|
— |
|
Restructuring charges, net of taxes (Note 1) |
|
— |
|
|
— |
|
|
— |
|
|
1.7 |
|
Adjusted net earnings |
|
$ |
22.2 |
|
|
$ |
23.0 |
|
|
$ |
55.8 |
|
|
$ |
55.6 |
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
September Year to
Date |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
Per Share |
|
Per Share |
Net earnings |
|
$ |
0.84 |
|
|
$ |
0.58 |
|
|
$ |
1.19 |
|
|
$ |
1.37 |
|
(Gain) loss on investment in Persol Holdings, net of taxes (Note
2) |
|
(0.28 |
) |
|
— |
|
|
0.23 |
|
|
— |
|
Restructuring charges, net of taxes (Note 1) |
|
— |
|
|
— |
|
|
— |
|
|
0.04 |
|
Adjusted net earnings |
|
$ |
0.56 |
|
|
$ |
0.58 |
|
|
$ |
1.42 |
|
|
$ |
1.41 |
|
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 gain/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) The gains and losses on the investment in Persol Holdings in
2018 represent the change in fair value of the investment during
the period presented and the related tax expense and benefit.
Grafico Azioni Kelly Services (NASDAQ:KELYA)
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