Financial Highlights
- Q3 revenue up 1.0%; up 1.9% in constant currency
- Q3 operating earnings up 21% from last year
- Q3 earnings per share of $0.84, or $0.56 on an adjusted basis, compared to $0.58 last year
TROY, Mich., Nov. 07, 2018 (GLOBE NEWSWIRE) -- 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 SUBSIDIARIES
RECONCILIATION 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.