KELLY SERVICES INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - KELLY SERVICES INC	form8-k2014secondquarter.htm

Exhibit 99.1

KELLY SERVICES^® REPORTS 2^nd QUARTER RESULTS

TROY, MI (August 6, 2014) -- Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a leader in providing workforce solutions, today announced results for the second quarter of 2014.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the second quarter of 2014 totaled $1.4 billion, a 3.2% increase compared to the corresponding quarter of 2013.

Earnings from operations for the second quarter of 2014 totaled $5.9 million, compared to $16.4 million reported for the second quarter of 2013. Included in the results of operations in the second quarter of 2014 are restructuring charges of $1.8 million. The results of operations in the second quarter of 2013 included impairment charges of $1.7 million and restructuring charges of $0.8 million. Excluding the impairment and restructuring charges, earnings from operations were $7.7 million in the second quarter of 2014, compared to adjusted earnings of $18.9 million last year.

Diluted earnings per share in the second quarter of 2014 were $0.07 compared to $0.26 per share in the second quarter of 2013. Adjusted earnings per share were $0.10 in the second quarter of 2014 compared to $0.33 in the second quarter of 2013.

“Our second quarter results aligned with our expectations, and we’re pleased with how we’ve executed our strategy in the first half of 2014,” said Camden. “Our investments in OCG continue to yield double-digit revenue, GP, and earnings growth, confirming this segment is meeting the market’s increased demand for higher-margin talent supply chain solutions. We’re also making the aggressive investments needed to drive growth in specialty staffing across our local US markets, while continuing to invest in the success of our large account base.”

Kelly also reported that on August 5, its board of directors declared a dividend of $0.05 per share. The dividend is payable September 8 to shareholders of record as of the close of business on August 18.

In conjunction with its second quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on August 6, 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

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, our ability to retain the services of our senior management, local management and field personnel, our ability to adequately protect our intellectual property rights, including our brand, our ability to successfully develop new service offerings, our exposure to risks associated with services outside traditional staffing, including business process outsourcing, 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 temporary workers with appropriate skills required by customers, liabilities for employment-related claims and losses, including class action lawsuits and collective actions, liability for improper disclosure of sensitive or private employee information, 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 net financial 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, our ability to access credit markets and continued availability of financing for funding working capital, 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^®

Kelly Services, Inc. (NASDAQ: KELYA, KELYB) is a leader in providing workforce solutions. Kelly^® offers a comprehensive array of outsourcing and consulting services as well as world-class staffing on a temporary, temporary-to-hire and direct-hire basis. Serving clients around the globe, Kelly provided employment to approximately 540,000 employees in 2013. Revenue in 2013 was $5.4 billion. Visit kellyservices.com and connect with us on Facebook, LinkedIn, & Twitter.

# # #


ANALYST CONTACT:	MEDIA CONTACT:


James Polehna	Jane Stehney


(248) 244-4586	(248) 244-5630


james_polehna@kellyservices.com	jane_stehney@kellyservices.com



KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED JUNE 29, 2014 AND JUNE 30, 2013
(UNAUDITED)
(In millions of dollars except per share data)

		2014		2013		Change			% Change

Revenue from services	$	1,410.5	$	1,366.9	$	43.6			3.2		%

Cost of services		1,182.4		1,146.2		36.2			3.2

Gross profit		228.1		220.7		7.4			3.4

Selling, general and administrative expenses		222.2		202.6		19.6			9.7

Asset impairments		—		1.7		(1.7	)		(100.0	)

Earnings from operations		5.9		16.4		(10.5	)		(64.8	)

Other expense, net		0.3		1.6		(1.3	)		84.0

Earnings before taxes		5.6		14.8		(9.2	)		(62.7	)

Income tax expense		2.8		4.8		(2.0	)		(41.8	)

Net earnings	$	2.8	$	10.0	$	(7.2	)		(72.6	)	%


Basic earnings per share	$	0.07	$	0.26	$	(0.19	)		(73.1	)	%
Diluted earnings per share	$	0.07	$	0.26	$	(0.19	)		(73.1	)	%


STATISTICS:

Gross profit rate		16.2	%	16.1	%	0.1		pts.

Selling, general and administrative expenses:
% of revenue		15.8		14.8		1.0
% of gross profit		97.5		91.8		5.7

% Return:
Earnings from operations		0.4		1.2		(0.8	)
Earnings before taxes		0.4		1.1		(0.7	)
Net earnings		0.2		0.7		(0.5	)

Effective income tax rate		50.2	%	32.2	%	18.0		pts.

Average number of shares outstanding
(millions):
Basic		37.4		37.2
Diluted		37.4		37.2

Shares adjusted for nonvested restricted awards
(millions):
Basic		38.5		38.2
Diluted		38.6		38.2



KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 26 WEEKS ENDED JUNE 29, 2014 AND JUNE 30, 2013
(UNAUDITED)
(In millions of dollars except per share data)

		2014		2013			Change			% Change

Revenue from services	$	2,741.3	$	2,681.7		$	59.6			2.2		%

Cost of services		2,290.9		2,244.1			46.8			2.1

Gross profit		450.4		437.6			12.8			2.9

Selling, general and administrative expenses		438.2		412.4			25.8			6.3

Asset impairments		—		1.7			(1.7	)		(100.0	)

Earnings from operations		12.2		23.5			(11.3	)		(48.9	)

Other expense, net		2.0		2.6			(0.6	)		26.2

Earnings before taxes		10.2		20.9			(10.7	)		(51.7	)

Income tax expense (benefit)		4.9		(2.0	)		6.9			338.4

Net earnings	$	5.3	$	22.9		$	(17.6	)		(77.0	)	%


Basic earnings per share	$	0.14	$	0.60		$	(0.46	)		(76.7	)	%
Diluted earnings per share	$	0.14	$	0.60		$	(0.46	)		(76.7	)	%


STATISTICS:

Gross profit rate		16.4	%	16.3		%	0.1		pts.

Selling, general and administrative expenses:
% of revenue		16.0		15.4			0.6
% of gross profit		97.3		94.3			3.0

% Return:
Earnings from operations		0.4		0.9			(0.5	)
Earnings before taxes		0.4		0.8			(0.4	)
Net earnings		0.2		0.9			(0.7	)

Effective income tax rate		47.9	%	(9.7	)	%	57.6		pts.

Average number of shares outstanding
(millions):
Basic		37.4		37.2
Diluted		37.4		37.2

Shares adjusted for nonvested restricted awards
(millions):
Basic		38.5		38.2
Diluted		38.6		38.2



KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)

		Second Quarter
										Constant
										Currency
		2014			2013		Change			Change
AMERICAS
Commercial
Revenue from services	$	661.1		$	648.8		1.9		%	2.8		%
Staffing fee-based income included in revenue from services		3.4			3.2		4.5			6.3
Gross profit		96.5			94.2		2.5			3.3

Gross profit rate		14.6	%		14.5	%	0.1		pts.

PT
Revenue from services	$	244.2		$	251.2		(2.8	)	%	(2.6	)	%
Staffing fee-based income included in revenue from services		3.7			3.5		5.4			6.1
Gross profit		39.0			39.0		—			0.2

Gross profit rate		16.0	%		15.5	%	0.5		pts.

Total Americas
Revenue from services	$	905.3		$	900.0		0.6		%	1.3		%
Staffing fee-based income included in revenue from services		7.1			6.7		5.0			6.2
Gross profit		135.5			133.2		1.8			2.4
Total SG&A expenses		112.6			102.5		9.9			10.6
Earnings from operations		22.9			30.7		(25.5	)

Gross profit rate		15.0	%		14.8	%	0.2		pts.
Expense rates:
% of revenue		12.4			11.4		1.0
% of gross profit		83.1			77.0		6.1
Return on sales		2.5			3.4		(0.9	)

EMEA
Commercial
Revenue from services	$	237.0		$	219.8		7.8		%	4.6		%
Staffing fee-based income included in revenue from services		5.0			5.0		1.0			0.9
Gross profit		34.5			33.8		2.1			(0.9	)

Gross profit rate		14.6	%		15.4	%	(0.8	)	pts.

PT
Revenue from services	$	49.7		$	43.1		15.1		%	10.3		%
Staffing fee-based income included in revenue from services		3.6			3.8		(6.3	)		(7.0	)
Gross profit		11.3			10.5		7.0			3.7

Gross profit rate		22.6	%		24.4	%	(1.8	)	pts.

Total EMEA
Revenue from services	$	286.7		$	262.9		9.0		%	5.5		%
Staffing fee-based income included in revenue from services		8.6			8.8		(2.2	)		(2.5	)
Gross profit		45.8			44.3		3.2			0.2
SG&A expenses excluding restructuring charges		42.3			39.9		5.9
Restructuring charges		0.8			—		NM
Total SG&A expenses		43.1			39.9		7.8			4.4
Earnings from operations		2.7			4.4		(38.5	)
Earnings from operations excluding restructuring charges		3.5			4.4		(20.6	)

Gross profit rate		16.0	%		16.9	%	(0.9	)	pts.
Expense rates (excluding restructuring charges):
% of revenue		14.7			15.2		(0.5	)
% of gross profit		92.3			90.0		2.3
Return on sales (excluding restructuring charges)		1.2			1.7		(0.5	)



KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)

		Second Quarter
												Constant
												Currency
		2014				2013			Change			Change
APAC
Commercial
Revenue from services	$	86.5			$	87.7			(1.3	)	%	1.5		%
Staffing fee-based income included in revenue from services		2.0				2.5			(20.8	)		(17.5	)
Gross profit		11.7				12.5			(6.8	)		(4.2	)

Gross profit rate		13.5		%		14.3		%	(0.8	)	pts.

PT
Revenue from services	$	10.0			$	10.0			(0.2	)	%	3.9		%
Staffing fee-based income included in revenue from services		2.1				2.5			(14.2	)		(10.7	)
Gross profit		3.3				3.8			(11.4	)		(7.7	)

Gross profit rate		33.2		%		37.4		%	(4.2	)	pts.

Total APAC
Revenue from services	$	96.5			$	97.7			(1.2	)	%	1.8		%
Staffing fee-based income included in revenue from services		4.1				5.0			(17.5	)		(14.1	)
Gross profit		15.0				16.3			(7.8	)		(5.0	)
SG&A expenses excluding restructuring charges		14.8				15.4			(3.5	)
Restructuring charges		1.0				—			NM
Total SG&A expenses		15.8				15.4			3.3			7.1
Earnings from operations		(0.8	)			0.9			NM
Earnings from operations excluding restructuring charges		0.2				0.9			(82.8	)

Gross profit rate		15.5		%		16.6		%	(1.1	)	pts.
Expense rates (excluding restructuring charges):
% of revenue		15.4				15.7			(0.3	)
% of gross profit		99.0				94.5			4.5
Return on sales (excluding restructuring charges)		0.2				0.9			(0.7	)

OCG
Revenue from services	$	137.9			$	118.3			16.5		%	16.8		%
Gross profit		32.9				27.7			18.6			(18.5	)
SG&A expenses excluding restructuring charges		31.1				26.9			15.3
Restructuring charges		—				0.8			(100.0	)
Total SG&A expenses		31.1				27.7			12.2			12.1
Asset impairments		—				1.7			(100.0	)
Earnings from operations		1.8				(1.7	)		NM
Earnings from operations excluding restructuring charges		1.8				(0.9	)		NM

Gross profit rate		23.9		%		23.4		%	0.5		pts.
Expense rates (excluding restructuring charges):
% of revenue		22.5				22.8			(0.3	)
% of gross profit		94.4				97.1			(2.7	)
Return on sales (excluding restructuring charges)		1.3				(0.7	)		2.0



KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)

		June Year to Date
											Constant
											Currency
		2014			2013			Change			Change
AMERICAS
Commercial
Revenue from services	$	1,274.3		$	1,287.1			(1.0	)	%	—		%
Staffing fee-based income included in revenue from services		6.6			6.5			2.9			5.0
Gross profit		188.3			187.7			0.3			1.3

Gross profit rate		14.8	%		14.6		%	0.2		pts.

PT
Revenue from services	$	480.6		$	493.8			(2.7	)	%	(2.5	)	%
Staffing fee-based income included in revenue from services		7.3			6.9			6.1			6.8
Gross profit		78.8			77.3			2.0			2.2

Gross profit rate		16.4	%		15.6		%	0.8		pts.

Total Americas
Revenue from services	$	1,754.9		$	1,780.9			(1.5	)	%	(0.7	)	%
Staffing fee-based income included in revenue from services		13.9			13.4			4.5			5.9
Gross profit		267.1			265.0			0.8			1.6
Total SG&A expenses		222.1			210.4			5.6			6.4
Earnings from operations		45.0			54.6			(17.7	)

Gross profit rate		15.2	%		14.9		%	0.3		pts.
Expense rates:
% of revenue		12.7			11.8			0.9
% of gross profit		83.2			79.4			3.8
Return on sales		2.6			3.1			(0.5	)

EMEA
Commercial
Revenue from services	$	458.9		$	420.8			9.1		%	7.0		%
Staffing fee-based income included in revenue from services		9.8			10.3			(4.7	)		(3.5	)
Gross profit		67.4			64.9			3.9			2.0

Gross profit rate		14.7	%		15.4		%	(0.7	)	pts.

PT
Revenue from services	$	97.4		$	86.6			12.4		%	8.6		%
Staffing fee-based income included in revenue from services		7.2			7.8			(7.6	)		(7.5	)
Gross profit		22.4			21.2			5.4			3.0

Gross profit rate		23.0	%		24.5		%	(1.5	)	pts.

Total EMEA
Revenue from services	$	556.3		$	507.4			9.6		%	7.3		%
Staffing fee-based income included in revenue from services		17.0			18.1			(6.0	)		(5.2	)
Gross profit		89.8			86.1			4.3			2.3
SG&A expenses excluding restructuring charges		84.2			82.1			2.6
Restructuring charges		0.8			(0.2	)		NM
Total SG&A expenses		85.0			81.9			3.7			1.4
Earnings from operations		4.8			4.2			15.0
Earnings from operations excluding restructuring charges		5.6			4.0			38.6

Gross profit rate		16.1	%		17.0		%	(0.9	)	pts.
Expense rates (excluding restructuring charges):
% of revenue		15.1			16.2			(1.1	)
% of gross profit		93.7			95.2			(1.5	)
Return on sales (excluding restructuring charges)		1.0			0.8			0.2



KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)

		June Year to Date
										Constant
										Currency
		2014			2013		Change			Change
APAC
Commercial
Revenue from services	$	169.5		$	169.2		0.2		%	5.3		%
Staffing fee-based income included in revenue from services		3.9			4.7		(17.9	)		(12.4	)
Gross profit		24.0			24.1		(0.4	)		4.7

Gross profit rate		14.2	%		14.2	%	—		pts.

PT
Revenue from services	$	18.6		$	20.2		(7.8	)	%	(1.7	)	%
Staffing fee-based income included in revenue from services		3.8			4.5		(14.5	)		(9.1	)
Gross profit		6.1			7.1		(13.8	)		(8.1	)

Gross profit rate		32.7	%		34.9	%	(2.2	)	pts.

Total APAC
Revenue from services	$	188.1		$	189.4		(0.7	)	%	4.5		%
Staffing fee-based income included in revenue from services		7.7			9.2		(16.3	)		(10.8	)
Gross profit		30.1			31.2		(3.4	)		1.8
SG&A expenses excluding restructuring charges		29.1			31.0		(5.7	)
Restructuring charges		1.0			0.2		364.2
Total SG&A expenses		30.1			31.2		(2.9	)		2.9
Earnings from operations		—			—		NM
Earnings from operations excluding restructuring charges		1.0			0.2		335.1

Gross profit rate		16.0	%		16.4	%	(0.4	)	pts.
Expense rates (excluding restructuring charges):
% of revenue		15.5			16.3		(0.8	)
% of gross profit		97.0			99.3		(2.3	)
Return on sales (excluding restructuring charges)		0.5			0.1		0.4

OCG
Revenue from services	$	272.3		$	225.7		20.6		%	21.1		%
Gross profit		65.5			56.9		15.1			15.3
SG&A expenses excluding restructuring charges		62.5			53.6		16.6
Restructuring charges		—			0.8		(100.0	)
Total SG&A expenses		62.5			54.4		15.0			15.2
Asset impairments		—			1.7		(100.0	)
Earnings from operations		3.0			0.8		226.9
Earnings from operations excluding restructuring charges		3.0			1.6		82.1

Gross profit rate		24.1	%		25.2	%	(1.1	)	pts.
Expense rates (excluding restructuring charges):
% of revenue		22.9			23.7		(0.8	)
% of gross profit		95.4			94.1		1.3
Return on sales (excluding restructuring charges)		1.1			0.7		0.4



KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)

		June 29, 2014			Dec. 29, 2013			June 30, 2013
Current Assets
Cash and equivalents	$	62.8		$	125.7		$	70.3
Trade accounts receivable, less allowances of
$9.2, $9.9 and $9.8, respectively		1,132.9			1,023.1			1,038.8
Prepaid expenses and other current assets		57.6			52.2			60.0
Deferred taxes		31.5			35.5			39.0
Total current assets		1,284.8			1,236.5			1,208.1

Property and Equipment, Net		91.4			92.0			87.2

Noncurrent Deferred Taxes		130.8			121.7			103.1

Goodwill, Net		90.3			90.3			90.3

Other Assets		295.7			258.1			227.8

Total Assets	$	1,893.0		$	1,798.6		$	1,716.5

Current Liabilities
Short-term borrowings	$	89.5		$	28.3		$	83.2
Accounts payable and accrued liabilities		328.4			342.4			289.2
Accrued payroll and related taxes		300.5			294.9			277.9
Accrued insurance		25.2			27.6			31.2
Income and other taxes		74.9			68.8			64.9

Total current liabilities		818.5			762.0			746.4

Noncurrent Liabilities
Accrued insurance		44.7			46.0			41.4
Accrued retirement benefits		147.4			134.7			123.2
Other long-term liabilities		41.9			33.3			28.2

Total noncurrent liabilities		234.0			214.0			192.8

Stockholders' Equity
Common stock		40.1			40.1			40.1
Treasury stock		(55.5	)		(56.2	)		(60.6	)
Paid-in capital		29.0			26.0			28.9
Earnings invested in the business		752.8			751.3			719.1
Accumulated other comprehensive income		74.1			61.4			49.8

Total stockholders' equity		840.5			822.6			777.3

Total Liabilities and Stockholders' Equity	$	1,893.0		$	1,798.6		$	1,716.5


STATISTICS:
Working Capital	$	466.3		$	474.5		$	461.7
Current Ratio		1.6			1.6			1.6
Debt-to-capital %		9.6		%	3.3		%	9.7		%
Global Days Sales Outstanding		57			52			54



KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 26 WEEKS ENDED JUNE 29, 2014 AND JUNE 30, 2013
(UNAUDITED)
(In millions of dollars)

		2014			2013
Cash flows from operating activities:
Net earnings	$	5.3		$	22.9
Noncash adjustments:
Impairment of assets		—			1.7
Depreciation and amortization		10.8			10.5
Provision for bad debts		2.6			0.5
Stock-based compensation		3.5			2.6
Other, net		0.7			0.7
Changes in operating assets and liabilities		(130.4	)		(53.1	)

Net cash used in operating activities		(107.5	)		(14.2	)

Cash flows from investing activities:
Capital expenditures		(8.9	)		(7.7	)
Investment in equity affiliate		(5.4	)		—
Other investing activities		0.4			(0.2	)

Net cash used in investing activities		(13.9	)		(7.9	)

Cash flows from financing activities:
Net change in short-term borrowings		61.2			19.1
Dividend payments		(3.8	)		(3.8	)

Net cash from financing activities		57.4			15.3

Effect of exchange rates on cash and equivalents		1.1			0.8

Net change in cash and equivalents		(62.9	)		(6.0	)
Cash and equivalents at beginning of period		125.7			76.3


Cash and equivalents at end of period	$	62.8		$	70.3



KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)

		Second Quarter (Commercial, PT and OCG)
					% Change
								Constant
		2014		2013	US$			Currency

Americas
United States	$	888.3	$	864.3	2.8		%	2.8		%
Canada		49.6		55.0	(9.8	)		(3.9	)
Mexico		34.6		35.9	(3.4	)		0.5
Puerto Rico		27.6		26.1	5.8			5.8
Brazil		13.7		13.4	1.9			14.4
Total Americas		1,013.8		994.7	1.9			2.6

EMEA
France		69.3		62.3	11.2			5.9
Switzerland		66.7		63.6	5.0			(0.9	)
Russia		32.8		34.6	(5.1	)		4.8
Portugal		32.5		21.1	53.7			46.5
United Kingdom		28.4		25.8	10.1			0.5
Italy		16.6		14.7	12.8			7.5
Germany		16.5		15.9	4.3			(0.7	)
Norway		14.4		15.4	(6.2	)		(3.7	)
Other		18.0		17.3	3.7			(0.4	)
Total EMEA		295.2		270.7	9.1			5.6

APAC
Singapore		31.1		28.0	11.0			11.2
Australia		30.0		35.3	(15.0	)		(9.8	)
Malaysia		16.8		17.2	(2.5	)		2.8
New Zealand		13.2		12.0	10.1			5.0
Other		10.4		9.0	15.1			25.9
Total APAC		101.5		101.5	(0.1	)		3.1

Total Kelly Services, Inc.	$	1,410.5	$	1,366.9	3.2		%	3.2		%



KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)

		June Year to Date (Commercial, PT and OCG)
					% Change
								Constant
		2014		2013	US$			Currency

Americas
United States	$	1,728.2	$	1,703.8	1.4		%	1.4		%
Canada		96.3		111.0	(13.3	)		(6.4	)
Mexico		65.3		66.3	(1.5	)		2.9
Puerto Rico		52.7		49.2	7.1			7.1
Brazil		29.6		31.9	(7.2	)		6.1
Total Americas		1,972.1		1,962.2	0.5			1.2

EMEA
France		132.1		119.6	10.5			5.8
Switzerland		129.0		117.0	10.3			4.9
Russia		67.7		69.1	(2.0	)		10.7
Portugal		59.1		38.9	51.9			45.3
United Kingdom		56.2		51.6	8.9			0.7
Germany		33.2		31.9	4.2			(0.2	)
Italy		31.5		29.8	5.7			1.2
Norway		28.8		30.2	(4.7	)		0.5
Other		35.1		34.7	1.0			(2.5	)
Total EMEA		572.7		522.8	9.6			7.2

APAC
Singapore		61.4		54.1	13.5			15.0
Australia		56.5		68.0	(17.0	)		(8.1	)
Malaysia		33.3		33.9	(1.6	)		4.5
New Zealand		25.5		23.5	8.8			6.1
Other		19.8		17.2	14.9			28.5
Total APAC		196.5		196.7	(0.1	)		5.3

Total Kelly Services, Inc.	$	2,741.3	$	2,681.7	2.2		%	2.7		%



KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 13 WEEKS ENDED JUNE 29, 2014 AND JUNE 30, 2013
(UNAUDITED)
(In millions of dollars except per share data)

		2014								2013
		As reported		Restructuring Charges (Note 1)			Adjusted Earnings			Adjusted Earnings	% Change

Revenue from services	$	1,410.5	$	—		$	1,410.5		$	1,366.9	3.2		%

Cost of services		1,182.4		—			1,182.4			1,146.2	3.2

Gross profit		228.1		—			228.1			220.7	3.4

SG&A expenses		222.2		(1.8	)		220.4			201.8	9.2

Earnings from operations		5.9		1.8			7.7			18.9	(59.5	)

Other expense, net		0.3		—			0.3			1.6	84.0

Earnings before taxes		5.6		1.8			7.4			17.3	(57.1	)

Inc. tax expense (benefit)		2.8		0.6			3.4			4.8	(28.2	)

Net earnings	$	2.8	$	1.2		$	4.0		$	12.5	(68.2	)	%

Earnings per share:
Basic	$	0.07	$	0.03		$	0.10		$	0.33	(69.7	)	%
Diluted	$	0.07	$	0.03		$	0.10		$	0.33	(69.7	)	%


		2013
		As reported		Restructuring Charges (Note 1)			Asset Impairments (Note 2)			Adjusted Earnings

Revenue from services	$	1,366.9	$	—		$	—		$	1,366.9

Cost of services		1,146.2		—			—			1,146.2

Gross profit		220.7		—			—			220.7

SG&A expenses		202.6		(0.8	)		—			201.8

Asset impairments		1.7		—			(1.7	)		—

Earnings from operations		16.4		0.8			1.7			18.9

Other expense, net		1.6		—			—			1.6

Earnings before taxes		14.8		0.8			1.7			17.3

Inc. tax expense (benefit)		4.8		—			—			4.8

Net earnings	$	10.0	$	0.8		$	1.7		$	12.5

Earnings per share:
Basic	$	0.26	$	0.02		$	0.04		$	0.33
Diluted	$	0.26	$	0.02		$	0.04		$	0.33

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 SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 26 WEEKS ENDED JUNE 29, 2014 AND JUNE 30, 2013
(UNAUDITED)
(In millions of dollars except per share data)

		2014									2013
		As reported			Restructuring Charges (Note 1)			Adjusted Earnings			Adjusted Earnings		% Change

Revenue from services	$	2,741.3		$	—		$	2,741.3		$	2,681.7		2.2		%

Cost of services		2,290.9			—			2,290.9			2,244.1		2.1

Gross profit		450.4			—			450.4			437.6		2.9

SG&A expenses		438.2			(1.8	)		436.4			411.6		6.1

Earnings from operations		12.2			1.8			14.0			26.0		(46.5	)

Other expense, net		2.0			—			2.0			2.6		26.2

Earnings before taxes		10.2			1.8			12.0			23.4		(48.8	)

Inc. tax expense (benefit)		4.9			0.6			5.5			(1.9	)	384.4

Net earnings	$	5.3		$	1.2		$	6.5		$	25.3		(74.4	)	%

Earnings per share:
Basic	$	0.14		$	0.03		$	0.17		$	0.66		(74.2	)	%
Diluted	$	0.14		$	0.03		$	0.17		$	0.66		(74.2	)	%


		2013
		As reported			Restructuring Charges (Note 1)			Asset Impairments (Note 2)			Adjusted Earnings

Revenue from services	$	2,681.7		$	—		$	—		$	2,681.7

Cost of services		2,244.1			—			—			2,244.1

Gross profit		437.6			—			—			437.6

SG&A expenses		412.4			(0.8	)		—			411.6

Asset impairments		1.7			—			(1.7	)		—

Earnings from operations		23.5			0.8			1.7			26.0

Other expense, net		2.6			—			—			2.6

Earnings before taxes		20.9			0.8			1.7			23.4

Inc. tax expense (benefit)		(2.0	)		0.1			—			(1.9	)

Net earnings	$	22.9		$	0.7		$	1.7		$	25.3

Earnings per share:
Basic	$	0.60		$	0.02		$	0.04		$	0.66
Diluted	$	0.60		$	0.02		$	0.04		$	0.66

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 SERIVCES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

(UNAUDITED)

Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the restructuring charges and asset impairment charges is useful to understand the Company's fiscal 2014 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 relate to costs incurred for exiting the staffing business in Sweden and closing branches in Australia. Restructuring charges in 2013 relate to the Company's decision to exit the executive search business operating in Germany, and primarily relate to severance costs from exiting this business.

(2) Asset impairment charges represent the write-off of the carrying value of long-lived assets related to the decision to exit the executive search business operating in Germany.

KELLY SERVICES INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - August 6, 2014

Attached files

KELLY SERVICES INC Reports