U.S. 1 800 288-9626 International 1 612 234-9959The 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: competition, changing market and economic conditions, currency fluctuations, changes in laws and regulations, including tax laws, and other factors discussed in this release and in the Company's filings with the Securities and Exchange Commission. Actual results may differ materially from any forward-looking statements contained herein. About Kelly Services Kelly Services, Inc. (
KELLY SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS FOR THE 13 WEEKS ENDED SEPTEMBER 27, 2009 AND SEPTEMBER 28, 2008 (UNAUDITED) (In millions of dollars except per share data) % 2009 2008 Change Change -------- -------- ------- ------ Revenue from services $1,049.2 $1,397.8 $(348.6) (24.9)% Cost of services 883.0 1,152.1 (269.1) (23.3) -------- -------- ------- ------ Gross profit 166.2 245.7 (79.5) (32.4) Selling, general and administrative expenses 193.7 260.2 (66.5) (25.6) Asset impairments 0.5 - 0.5 NM -------- -------- ------- ------ Loss from operations (28.0) (14.5) (13.5) (92.6) Other expense, net (1.6) (0.1) (1.5) NM -------- -------- ------- ------ Loss from continuing operations before taxes (29.6) (14.6) (15.0) (102.2) Income taxes (14.8) (3.1) (11.7) (375.4) -------- -------- ------- ------ Loss from continuing operations (14.8) (11.5) (3.3) (28.6) Loss from discontinued operations, net of tax - (0.7) 0.7 100.0 -------- -------- ------- ------ Net loss $ (14.8) $ (12.2) $ (2.6) (21.6)% ======== ======== ======= ====== Basic loss per share on common stock Loss from continuing operations $ (0.43) $ (0.33) $ (0.10) (30.3)% Loss from discontinued operations - (0.02) 0.02 100.0 Net loss (0.43) (0.35) (0.08) (22.9) Diluted loss per share on common stock Loss from continuing operations $ (0.43) $ (0.33) $ (0.10) (30.3)% Loss from discontinued operations - (0.02) 0.02 100.0 Net loss (0.43) (0.35) (0.08) (22.9) -------- -------- ------- ------ STATISTICS: Gross profit rate 15.8% 17.6% (1.8) pts. Selling, general and administrative expenses: % of revenue 18.5 18.6 (0.1) % of gross profit 116.5 105.9 10.6 % Return - Loss from operations (2.7) (1.0) (1.7) Loss from continuing operations before taxes (2.8) (1.0) (1.8) Loss from continuing operations (1.4) (0.8) (0.6) Net loss (1.4) (0.9) (0.5) Effective income tax rate 49.9% 21.2% 28.7 pts. KELLY SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS FOR THE 39 WEEKS ENDED SEPTEMBER 27, 2009 AND SEPTEMBER 28, 2008 (UNAUDITED) (In millions of dollars except per share data) % 2009 2008 Change Change -------- -------- --------- ------ Revenue from services $3,120.7 $4,238.2 $(1,117.5) (26.4)% Cost of services 2,607.3 3,485.2 (877.9) (25.2) -------- -------- --------- ------ Gross profit 513.4 753.0 (239.6) (31.8) Selling, general and administrative expenses 593.4 739.6 (146.2) (19.8) Asset impairments 53.1 - 53.1 NM -------- -------- --------- ------ (Loss) earnings from operations (133.1) 13.4 (146.5) NM Other expense, net (1.3) - (1.3) NM -------- -------- --------- ------ (Loss) earnings from continuing operations before taxes (134.4) 13.4 (147.8) NM Income taxes (37.5) 6.5 (44.0) NM -------- -------- --------- ------ (Loss) earnings from continuing operations (96.9) 6.9 (103.8) NM Earnings (loss) from discontinued operations, net of tax 0.6 (0.4) 1.0 273.7 -------- -------- --------- ------ Net (loss) earnings $ (96.3) $ 6.5 $ (102.8) NM% ======== ======== ========= ====== Basic (loss) earnings per share on common stock (Loss) earnings from continuing operations $ (2.78) $ 0.19 $ (2.97) NM% Earnings (loss) from discontinued operations 0.02 (0.01) 0.03 300.0 Net (loss) earnings (2.76) 0.19 (2.95) NM Diluted (loss) earnings per share on common stock (Loss) earnings from continuing operations $ (2.78) $ 0.19 $ (2.97) NM% Earnings (loss) from discontinued operations 0.02 (0.01) 0.03 300.0 Net (loss) earnings (2.76) 0.19 (2.95) NM -------- -------- --------- ------ STATISTICS: Gross profit rate 16.5% 17.8% (1.3) pts. Selling, general and administrative expenses: % of revenue 19.0 17.5 1.5 % of gross profit 115.6 98.2 17.4 % Return - (Loss) earnings from operations (4.3) 0.3 (4.6) (Loss) earnings from continuing operations before taxes (4.3) 0.3 (4.6) (Loss) earnings from continuing operations (3.1) 0.2 (3.3) Net (loss) earnings (3.1) 0.2 (3.3) Effective income tax rate 27.9% 48.5% (20.6) pts. KELLY SERVICES, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS BY SEGMENT (UNAUDITED) (In millions of dollars) Third Quarter ------------------------------------------- Constant Currency 2009 2008 Change Change ------ ------ ---------- ---------- Americas Commercial Revenue from services (including fee-based income) $467.5 $621.6 (24.8)% (23.6)% Fee-based income 1.7 4.3 (60.3) (59.3) Gross profit 67.2 95.2 (29.4) (28.4) SG&A expenses 67.8 83.3 (18.7) (17.7) Earnings from operations (0.6) 11.9 (104.8) Gross profit rate 14.4% 15.3% (0.9) pts. Expense rates: % of revenue 14.5 13.4 1.1 % of gross profit 100.8 87.6 13.2 Operating margin (0.1) 1.9 (2.0) Americas PT Revenue from services (including fee-based income) $192.1 $234.8 (18.2)% (18.1)% Fee-based income 2.1 5.0 (57.3) (57.2) Gross profit 29.5 39.1 (24.5) (24.4) SG&A expenses 24.6 28.9 (14.6) (14.5) Earnings from operations 4.9 10.2 (52.7) Gross profit rate 15.4% 16.6% (1.2) pts. Expense rates: % of revenue 12.9 12.3 0.6 % of gross profit 83.7 74.0 9.7 Operating margin 2.5 4.3 (1.8) EMEA Commercial Revenue from services (including fee-based income) $228.0 $353.6 (35.5)% (29.5)% Fee-based income 3.7 10.2 (64.5) (60.1) Gross profit 33.9 63.0 (46.2) (41.4) SG&A expenses 39.5 59.0 (33.2) (27.8) Earnings from operations (5.6) 4.0 (237.9) Gross profit rate 14.9% 17.8% (2.9) pts. Expense rates: % of revenue 17.3 16.7 0.6 % of gross profit 116.3 93.6 22.7 Operating margin (2.4) 1.1 (3.5) EMEA PT Revenue from services (including fee-based income) $ 36.4 $ 44.0 (17.3)% (10.7)% Fee-based income 3.9 6.7 (40.5) (33.6) Gross profit 9.8 12.9 (23.8) (16.9) SG&A expenses 9.9 12.5 (20.2) (13.1) Earnings from operations (0.1) 0.4 (131.7) Gross profit rate 27.0% 29.3% (2.3) pts. Expense rates: % of revenue 27.3 28.3 (1.0) % of gross profit 101.3 96.8 4.5 Operating margin (0.4) 0.9 (1.3) KELLY SERVICES, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS BY SEGMENT (continued) (UNAUDITED) (In millions of dollars) Third Quarter ---------------------------------------------- Constant Currency 2009 2008 Change Change ------- ------- --------- -------- APAC Commercial Revenue from services (including fee-based income) $ 71.2 $ 84.9 (16.2)% (12.0)% Fee-based income 2.3 4.5 (48.4) (46.5) Gross profit 10.3 14.7 (29.6) (26.4) SG&A expenses 11.5 14.5 (20.8) (17.6) Earnings from operations (1.2) 0.2 NM Gross profit rate 14.5% 17.3% (2.8) pts. Expense rates: % of revenue 16.1 17.1 (1.0) % of gross profit 111.1 98.7 12.4 Operating margin (1.6) 0.2 (1.8) APAC PT Revenue from services (including fee-based income) $ 6.5 $ 9.2 (29.7)% (28.0)% Fee-based income 1.0 1.5 (32.7) (30.1) Gross profit 2.0 2.8 (31.6) (29.7) SG&A expenses 2.3 2.7 (14.7) (10.6) Earnings from operations (0.3) 0.1 (347.6) Gross profit rate 30.3% 31.2% (0.9) pts. Expense rates: % of revenue 35.9 29.6 6.3 % of gross profit 118.4 94.9 23.5 Operating margin (5.6) 1.6 (7.2) OCG Revenue from services (including fee-based income) $ 52.9 $ 55.9 (5.4)% (4.4)% Fee-based income 5.8 7.4 (21.7) (19.4) Gross profit 13.7 18.3 (24.7) (23.1) SG&A expenses 17.4 18.4 (5.2) (3.3) Earnings from operations (3.7) (0.1) NM Gross profit rate 26.1% 32.8% (6.7) pts. Expense rates: % of revenue 33.0 32.9 0.1 % of gross profit 126.6 100.5 26.1 Operating margin (6.9) (0.2) (6.7) Corporate Expense $ (20.9) $ (41.2) 49.3% KELLY SERVICES, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS BY SEGMENT (UNAUDITED) (In millions of dollars) Constant Currency 2009 2008 Change Change -------- -------- --------- -------- Americas Commercial Revenue from services (including fee-based income) $1,422.9 $1,921.1 (25.9)% (24.3)% Fee-based income 5.1 12.9 (60.9) (58.7) Gross profit 210.9 302.6 (30.3) (28.9) SG&A expenses 209.0 248.8 (16.0) (14.4) Earnings from operations 1.9 53.8 (96.4) Gross profit rate 14.8% 15.8% (1.0) pts. Expense rates: % of revenue 14.7 13.0 1.7 % of gross profit 99.1 82.2 16.9 Operating margin 0.1 2.8 (2.7) Americas PT Revenue from services (including fee-based income) $ 584.3 $ 718.9 (18.7)% (18.6)% Fee-based income 7.2 15.7 (54.2) (54.1) Gross profit 93.2 124.2 (25.0) (24.8) SG&A expenses 76.4 85.5 (10.6) (10.3) Earnings from operations 16.8 38.7 (56.7) Gross profit rate 15.9% 17.3% (1.4) pts. Expense rates: % of revenue 13.1 11.9 1.2 % of gross profit 82.0 68.9 13.1 Operating margin 2.9 5.4 (2.5) EMEA Commercial Revenue from services (including fee-based income) $ 656.3 $1,027.2 (36.1)% (25.5)% Fee-based income 12.3 32.0 (61.6) (54.3) Gross profit 102.8 179.7 (42.8) (33.6) SG&A expenses 125.8 176.0 (28.5) (18.1) Earnings from operations (23.0) 3.7 NM Gross profit rate 15.7% 17.5% (1.8) pts. Expense rates: % of revenue 19.2 17.1 2.1 % of gross profit 122.4 97.9 24.5 Operating margin (3.5) 0.4 (3.9) EMEA PT Revenue from services (including fee-based income) $ 102.3 $ 134.1 (23.7)% (12.1)% Fee-based income 12.1 21.3 (42.9) (32.1) Gross profit 28.0 40.0 (30.0) (18.7) SG&A expenses 30.0 37.2 (19.2) (5.8) Earnings from operations (2.0) 2.8 (172.0) Gross profit rate 27.4% 29.8% (2.4) pts. Expense rates: % of revenue 29.4 27.7 1.7 % of gross profit 107.2 93.0 14.2 Operating margin (2.0) 2.1 (4.1)
KELLY SERVICES, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS BY SEGMENT (continued) (UNAUDITED) (In millions of dollars) September Year to Date ------------------------------------------------- Constant Currency 2009 2008 Change Change ----------- ----------- ---------- ---------- APAC Commercial Revenue from services (including fee-based income) $ 201.9 $ 262.5 (23.1)% (13.4)% Fee-based income 6.8 14.0 (51.0) (46.1) Gross profit 29.5 44.9 (34.5) (26.3) SG&A expenses 33.2 44.2 (25.0) (16.3) Earnings from operations (3.7) 0.7 NM Gross profit rate 14.6% 17.1% (2.5) pts. Expense rates: % of revenue 16.4 16.8 (0.4) % of gross profit 112.5 98.3 14.2 Operating margin (1.8) 0.3 (2.1) APAC PT Revenue from services (including fee-based income) $ 18.2 $ 27.1 (32.8)% (26.5)% Fee-based income 2.8 4.3 (34.6) (27.8) Gross profit 5.6 8.3 (32.6) (26.2) SG&A expenses 6.6 8.5 (22.7) (13.0) Earnings from operations (1.0) (0.2) (362.0) Gross profit rate 30.8% 30.7% 0.1 pts. Expense rates: % of revenue 36.3 31.5 4.8 % of gross profit 117.8 102.6 15.2 Operating margin (5.5) (0.8) (4.7) OCG Revenue from services (including fee-based income) $ 151.7 $ 164.9 (8.0)% (6.1)% Fee-based income 18.4 20.6 (10.9) (5.8) Gross profit 44.2 54.0 (18.0) (14.9) SG&A expenses 52.3 51.6 1.3 5.4 Earnings from operations (8.1) 2.4 (452.5) Gross profit rate 29.2% 32.7% (3.5) pts. Expense rates: % of revenue 34.5 31.3 3.2 % of gross profit 118.3 95.8 22.5 Operating margin (5.3) 1.4 (6.7) Corporate Expense $ (60.9) $ (88.5) 31.2% KELLY SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In millions of dollars) September December September 27, 28, 28, 2009 2008 2008 ----------- ----------- ----------- Current Assets Cash and equivalents $ 91.0 $ 118.3 $ 113.6 Trade accounts receivable, less allowances of $15.7, $17.0 and $18.6, respectively 707.3 815.8 913.7 Prepaid expenses and other current assets 54.3 62.0 59.7 Deferred taxes 25.7 31.9 30.2 ----------- ----------- ----------- Total current assets 878.3 1,028.0 1,117.2 Property and Equipment, Net 132.5 151.3 168.3 Noncurrent Deferred Taxes 66.0 40.0 48.6 Goodwill, Net 67.3 117.8 161.4 Other Assets 134.6 120.2 134.2 ----------- ----------- ----------- Total Assets $ 1,278.7 $ 1,457.3 $ 1,629.7 =========== =========== =========== Current Liabilities Short-term borrowings and current portion of long-term debt $ 15.3 $ 35.2 $ 63.3 Accounts payable and accrued liabilities 201.9 244.1 242.1 Accrued payroll and related taxes 229.6 243.2 282.0 Accrued insurance 25.0 26.3 23.3 Income and other taxes 29.8 51.8 62.4 ----------- ----------- ----------- Total current liabilities 501.6 600.6 673.1 Noncurrent Liabilities Long-term debt 66.0 80.0 51.2 Accrued insurance 43.9 46.9 59.5 Accrued retirement benefits 74.0 61.6 70.2 Other long-term liabilities 14.2 15.3 17.0 ----------- ----------- ----------- Total noncurrent liabilities 198.1 203.8 197.9 Stockholders' Equity Common stock 40.1 40.1 40.1 Treasury stock (107.6) (111.2) (111.3) Paid-in capital 35.9 35.8 34.5 Earnings invested in the business 579.7 676.0 769.6 Accumulated other comprehensive income 30.9 12.2 25.8 ----------- ----------- ----------- Total stockholders' equity 579.0 652.9 758.7 ----------- ----------- ----------- Total Liabilities and Stockholders' Equity $ 1,278.7 $ 1,457.3 $ 1,629.7 =========== =========== =========== ----------- ----------- ----------- STATISTICS: Working Capital $ 376.7 $ 427.4 $ 444.1 Current Ratio 1.8 1.7 1.7 Debt-to-capital % 12.3% 15.0% 13.1% Global Days Sales Outstanding 52 50 51 KELLY SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE 39 WEEKS ENDED SEPTEMBER 27, 2009 AND SEPTEMBER 28, 2008 (UNAUDITED) (In millions of dollars) 2009 2008 --------- --------- Cash flows from operating activities Net (loss) earnings $ (96.3) $ 6.5 Noncash adjustments: Impairment of assets 53.1 - Depreciation and amortization 30.9 34.1 Provision for bad debts 2.7 4.8 Stock-based compensation 3.6 3.0 Other, net (4.0) 1.8 Changes in operating assets and liabilities 50.7 36.2 --------- --------- Net cash from operating activities 40.7 86.4 --------- --------- Cash flows from investing activities Capital expenditures (7.9) (23.5) Acquisition of companies, net of cash received (7.5) (32.4) Other investing activities (2.9) (0.4) Net cash from investing activities (18.3) (56.3) --------- --------- Cash flows from financing activities Net change in revolving line of credit (11.9) 12.5 Repayment of debt (22.9) - Dividend payments - (14.2) Purchase of treasury stock - (8.0) Other financing activities (18.5) 1.1 --------- --------- Net cash from financing activities (53.3) (8.6) --------- --------- Effect of exchange rates on cash and equivalents 3.6 (0.7) --------- --------- Net change in cash and equivalents (27.3) 20.8 Cash and equivalents at beginning of period 118.3 92.8 --------- --------- Cash and equivalents at end of period $ 91.0 $ 113.6 ========= ========= KELLY SERVICES, INC. AND SUBSIDIARIES REVENUE FROM SERVICES (UNAUDITED) (In millions of dollars) Third Quarter (Commercial, PT and OCG) ----------------------------------------- % Change Constant 2009 2008 US$ Currency ---------- ---------- -------- -------- Americas United States $ 623.1 $ 795.8 (21.7)% (21.7)% Canada 48.4 62.1 (22.1) (17.7) Mexico 16.7 20.8 (19.9) 3.0 Puerto Rico 12.6 19.3 (34.5) (34.5) ---------- ---------- Total Americas 700.8 898.0 (22.0) (21.1) EMEA France 69.4 93.7 (25.9) (21.6) United Kingdom 50.8 102.5 (50.5) (42.7) Switzerland 38.8 49.0 (21.0) (21.3) Italy 17.4 33.9 (48.6) (45.7) Germany 16.6 21.1 (21.7) (17.3) Russia 16.5 25.4 (34.9) (16.0) Norway 16.2 24.9 (34.8) (23.3) Portugal 15.8 11.9 33.3 40.3 Other 26.9 40.4 (33.3) (27.9) ---------- ---------- Total EMEA 268.4 402.8 (33.4) (27.3) APAC Australia 25.0 33.9 (26.2) (20.8) Singapore 16.4 18.7 (11.9) (9.2) Malaysia 12.3 13.4 (8.9) (4.0) Other 26.3 31.0 (15.3) (12.5) ---------- ---------- Total APAC 80.0 97.0 (17.5) (13.6) Total Kelly Services, Inc. $ 1,049.2 $ 1,397.8 (24.9)% (22.4)% ========== ========== KELLY SERVICES, INC. AND SUBSIDIARIES REVENUE FROM SERVICES (UNAUDITED) (In millions of dollars) September Year to Date (Commercial, PT and OCG) ----------------------------------------- % Change Constant 2009 2008 US$ Currency ---------- ---------- -------- -------- Americas United States $ 1,901.2 $ 2,455.6 (22.6)% (22.6)% Canada 131.9 187.6 (29.7) (19.5) Mexico 47.5 58.1 (18.3) 6.0 Puerto Rico 42.9 58.7 (27.0) (27.0) ---------- ---------- Total Americas 2,123.5 2,760.0 (23.1) (21.9) EMEA France 194.0 275.7 (29.6) (21.6) United Kingdom 163.6 317.3 (48.4) (34.2) Switzerland 99.8 143.5 (30.5) (27.4) Italy 53.9 106.7 (49.4) (43.5) Germany 47.5 65.3 (27.3) (19.0) Russia 45.5 68.6 (33.7) (10.7) Norway 44.4 69.2 (35.8) (20.1) Portugal 40.1 11.9 237.7 274.2 Other 82.2 121.7 (32.5) (22.7) ---------- ---------- Total EMEA 771.0 1,179.9 (34.7) (23.9) APAC Australia 67.9 107.7 (36.9) (23.2) Singapore 46.5 55.2 (15.6) (10.7) Malaysia 36.4 42.9 (15.3) (7.4) Other 75.4 92.5 (18.5) (10.7) ---------- ---------- Total APAC 226.2 298.3 (24.1) (14.7) Total Kelly Services, Inc. $ 3,120.7 $ 4,238.2 (26.4)% (21.9)% ========== ==========
Contact Information: ANALYST CONTACT: James Polehna (248) 244-4586 james_polehna@kellyservices.com MEDIA CONTACT: Judith Clark (248) 244-5362 judith_clark@kellyservices.com