TROY, MI--(Marketwire - Aug 10, 2011) - Kelly Services, Inc. (
Carl T. Camden, President and Chief Executive Officer, announced revenue for the second quarter of 2011 totaled $1.4 billion, a 16% increase compared to the corresponding quarter in 2010.
Earnings from operations for the second quarter of 2011 totaled $21 million, compared to earnings from operations of $8 million reported for the second quarter of 2010.
Diluted earnings per share from continuing operations in the second quarter of 2011 were $0.53 compared to second quarter 2010 earnings of $0.11 per share.
Commenting on the second quarter results, Camden said, "We are pleased that Kelly® completed a very strong second quarter, despite the slow moving recovery. Solid revenue growth coupled with our ability to effectively leverage a leaner cost structure resulted in improved earnings." Camden added that Kelly will continue to focus on maximizing profits across all business lines by adhering to its disciplined operational management.
"A concentration on specialized outsourcing services is also expected to contribute to profits going forward," Camden said.
"Today's changing labor markets demand new approaches. We are creating custom workforce solutions for customers through our outsourcing and consulting services, and targeting other higher-margin staffing business such as Professional & Technical."
Kelly also reported that on August 9, its board of directors declared a dividend of $0.05 per share. The dividend is payable on September 12, 2011 to shareholders of record as of the close of business on August 31, 2011.
In conjunction with its second quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on August 10, 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, changing market and economic conditions, our ability to achieve our business strategy, including our ability to successfully expand into new markets and service lines, material changes in demand from or loss of large corporate customers, impairment charges initiated by adverse industry or market developments, unexpected termination of customer contracts, availability of temporary workers with appropriate skills required by customers, liabilities for employment-related claims and losses, including class action lawsuits, unexpected changes in claim trends on workers' compensation and benefit plans, 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, 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 retain the services of our senior management, local management and field personnel, the impact of changes in laws and regulations (including federal, state and international tax laws), the net financial impact of recent U.S. healthcare legislation on our business, risks associated with conducting business in foreign countries, including foreign currency fluctuations, 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. (
KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||||||
CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||||||||||
FOR THE 13 WEEKS ENDED JULY 3, 2011 AND JULY 4, 2010 | |||||||||||||||||
(UNAUDITED) | |||||||||||||||||
(In millions of dollars except per share data) | |||||||||||||||||
2011 | 2010 | Change | % Change | ||||||||||||||
Revenue from services | $ | 1,405.8 | $ | 1,209.4 | $ | 196.4 | 16.2 | % | |||||||||
Cost of services | 1,181.2 | 1,018.5 | 162.7 | 16.0 | |||||||||||||
Gross profit | 224.6 | 190.9 | 33.7 | 17.6 | |||||||||||||
Selling, general and administrative expenses | 203.3 | 180.9 | 22.4 | 12.4 | |||||||||||||
Asset impairments | - | 1.5 | (1.5 | ) | (100.0 | ) | |||||||||||
Earnings from operations | 21.3 | 8.5 | 12.8 | 151.8 | |||||||||||||
Other expense, net | (0.7 | ) | (2.1 | ) | 1.4 | 69.3 | |||||||||||
Earnings from continuing operations before taxes | 20.6 | 6.4 | 14.2 | 222.3 | |||||||||||||
Income taxes | 0.6 | 2.5 | (1.9 | ) | (73.2 | ) | |||||||||||
Earnings from continuing operations | 20.0 | 3.9 | 16.1 | 417.6 | |||||||||||||
Loss from discontinued operations, net of tax | (1.2 | ) | - | (1.2 | ) | NM | |||||||||||
Net earnings | $ | 18.8 | $ | 3.9 | $ | 14.9 | 387.0 | % | |||||||||
Basic earnings (loss) per share on common stock | |||||||||||||||||
Earnings from continuing operations | $ | 0.53 | $ | 0.11 | $ | 0.42 | 381.8 | % | |||||||||
Loss from discontinued operations | (0.03 | ) | - | (0.03 | ) | NM | |||||||||||
Net earnings | 0.50 | 0.11 | 0.39 | 354.5 | |||||||||||||
Diluted earnings (loss) per share on common stock | |||||||||||||||||
Earnings from continuing operations | $ | 0.53 | $ | 0.11 | $ | 0.42 | 381.8 | % | |||||||||
Loss from discontinued operations | (0.03 | ) | - | (0.03 | ) | NM | |||||||||||
Net earnings | 0.50 | 0.11 | 0.39 | 354.5 | |||||||||||||
STATISTICS: | |||||||||||||||||
Gross profit rate | 16.0 | % | 15.8 | % | 0.2 | pts. | |||||||||||
Selling, general and administrative expenses: | |||||||||||||||||
% of revenue | 14.5 | 15.0 | (0.5 | ) | |||||||||||||
% of gross profit | 90.6 | 94.8 | (4.2 | ) | |||||||||||||
% Return - Earnings from operations | 1.5 | 0.7 | 0.8 | ||||||||||||||
Earnings from continuing operations before taxes | 1.5 | 0.5 | 1.0 | ||||||||||||||
Earnings from continuing operations | 1.4 | 0.3 | 1.1 | ||||||||||||||
Net earnings | 1.3 | 0.3 | 1.0 | ||||||||||||||
Effective income tax rate | 3.3 | % | 39.8 | % | (36.5 | ) pts. | |||||||||||
Average number of shares outstanding (millions): | |||||||||||||||||
Basic | 36.8 | 36.0 | |||||||||||||||
Diluted | 36.8 | 36.0 | |||||||||||||||
Shares adjusted for nonvested restricted awards (millions): | |||||||||||||||||
Basic | 37.4 | 36.4 | |||||||||||||||
Diluted | 37.4 | 36.4 |
KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||||||
CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||||||||||
FOR THE 26 WEEKS ENDED JULY 3, 2011 AND JULY 4, 2010 | |||||||||||||||||
(UNAUDITED) | |||||||||||||||||
(In millions of dollars except per share data) | |||||||||||||||||
2011 | 2010 | Change | % Change | ||||||||||||||
Revenue from services | $ | 2,744.9 | $ | 2,339.8 | $ | 405.1 | 17.3 | % | |||||||||
Cost of services | 2,306.6 | 1,968.9 | 337.7 | 17.2 | |||||||||||||
Gross profit | 438.3 | 370.9 | 67.4 | 18.1 | |||||||||||||
Selling, general and administrative expenses | 415.4 | 362.5 | 52.9 | 14.6 | |||||||||||||
Asset impairments | - | 1.5 | (1.5 | ) | (100.0 | ) | |||||||||||
Earnings from operations | 22.9 | 6.9 | 16.0 | 232.6 | |||||||||||||
Other expense, net | (1.1 | ) | (3.2 | ) | 2.1 | 66.2 | |||||||||||
Earnings from continuing operations before taxes | 21.8 | 3.7 | 18.1 | 484.4 | |||||||||||||
Income taxes | 0.7 | 1.8 | (1.1 | ) | (60.0 | ) | |||||||||||
Earnings from continuing operations | 21.1 | 1.9 | 19.2 | NM | |||||||||||||
Loss from discontinued operations, net of tax | (1.2 | ) | - | (1.2 | ) | NM | |||||||||||
Net earnings | $ | 19.9 | $ | 1.9 | $ | 18.0 | NM | % | |||||||||
Basic earnings (loss) per share on common stock | |||||||||||||||||
Earnings from continuing operations | $ | 0.56 | $ | 0.05 | $ | 0.51 | NM | % | |||||||||
Loss from discontinued operations | (0.03 | ) | - | (0.03 | ) | NM | |||||||||||
Net earnings | 0.53 | 0.05 | 0.48 | NM | |||||||||||||
Diluted earnings (loss) per share on common stock | |||||||||||||||||
Earnings from continuing operations | $ | 0.56 | $ | 0.05 | $ | 0.51 | NM | % | |||||||||
Loss from discontinued operations | (0.03 | ) | - | (0.03 | ) | NM | |||||||||||
Net earnings | 0.53 | 0.05 | 0.48 | NM | |||||||||||||
STATISTICS: | |||||||||||||||||
Gross profit rate | 16.0 | % | 15.9 | % | 0.1 | pts. | |||||||||||
Selling, general and administrative expenses: | |||||||||||||||||
% of revenue | 15.1 | 15.5 | (0.4 | ) | |||||||||||||
% of gross profit | 94.8 | 97.7 | (2.9 | ) | |||||||||||||
% Return - Earnings from operations | 0.8 | 0.3 | 0.5 | ||||||||||||||
Earnings from continuing operations before taxes | 0.8 | 0.2 | 0.6 | ||||||||||||||
Earnings from continuing operations | 0.8 | 0.1 | 0.7 | ||||||||||||||
Net earnings | 0.7 | 0.1 | 0.6 | ||||||||||||||
Effective income tax rate | 3.4 | % | 49.3 | % | (45.9 | ) pts. | |||||||||||
Average number of shares outstanding (millions): | |||||||||||||||||
Basic | 36.7 | 35.5 | |||||||||||||||
Diluted | 36.7 | 35.5 | |||||||||||||||
Shares adjusted for nonvested restricted awards | |||||||||||||||||
(millions): | |||||||||||||||||
Basic | 37.4 | 35.9 | |||||||||||||||
Diluted | 37.4 | 36.0 |
KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||||
RESULTS OF OPERATIONS BY SEGMENT | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
(In millions of dollars) | ||||||||||||||||
Second Quarter | ||||||||||||||||
2011 |
2010 |
Change |
Constant Currency Change |
|||||||||||||
Americas Commercial | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 670.3 | $ | 600.9 | 11.6 | % | 10.7 | % | ||||||||
Fee-based income | 2.8 | 2.2 | 29.0 | 26.9 | ||||||||||||
Gross profit | 93.7 | 85.7 | 9.4 | 8.7 | ||||||||||||
Total SG&A expenses | 70.7 | 67.7 | 4.4 | 3.7 | ||||||||||||
Earnings from operations | 23.0 | 18.0 | 28.3 | |||||||||||||
Gross profit rate | 14.0 | % | 14.3 | % | (0.3 | ) pts. | ||||||||||
Expense rates: | ||||||||||||||||
% of revenue | 10.5 | 11.3 | (0.8 | ) | ||||||||||||
% of gross profit | 75.4 | 79.0 | (3.6 | ) | ||||||||||||
Operating margin | 3.4 | 3.0 | 0.4 | |||||||||||||
Americas PT | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 247.7 | $ | 219.9 | 12.6 | % | 12.5 | % | ||||||||
Fee-based income | 3.7 | 2.2 | 66.8 | 66.5 | ||||||||||||
Gross profit | 36.0 | 34.5 | 4.4 | 4.2 | ||||||||||||
Total SG&A expenses | 25.6 | 22.7 | 12.7 | 12.6 | ||||||||||||
Earnings from operations | 10.4 | 11.8 | (11.7 | ) | ||||||||||||
Gross profit rate | 14.6 | % | 15.7 | % | (1.1 | ) pts. | ||||||||||
Expense rates: | ||||||||||||||||
% of revenue | 10.3 | 10.3 | - | |||||||||||||
% of gross profit | 71.1 | 65.8 | 5.3 | |||||||||||||
Operating margin | 4.2 | 5.4 | (1.2 | ) | ||||||||||||
EMEA Commercial | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 258.8 | $ | 209.8 | 23.4 | % | 6.9 | % | ||||||||
Fee-based income | 6.6 | 5.1 | 29.1 | 12.2 | ||||||||||||
Gross profit | 42.3 | 33.8 | 25.0 | 7.9 | ||||||||||||
SG&A expenses excluding restructuring charges | 36.3 | 30.9 | 17.5 | |||||||||||||
Restructuring charges | (0.6 | ) | - | NM | ||||||||||||
Total SG&A expenses | 35.7 | 30.9 | 15.6 | (0.3 | ) | |||||||||||
Asset impairments | - | 1.5 | (100.0 | ) | ||||||||||||
Earnings from operations | 6.6 | 1.4 | 382.4 | |||||||||||||
Earnings from operations excluding restructuring charges | 6.0 | 1.4 | 339.1 | |||||||||||||
Gross profit rate | 16.3 | % | 16.1 | % | 0.2 | pts. | ||||||||||
Expense rates (excluding restructuring charges): | ||||||||||||||||
% of revenue | 14.0 | 14.7 | (0.7 | ) | ||||||||||||
% of gross profit | 86.0 | 91.5 | (5.5 | ) | ||||||||||||
Operating margin (excluding restructuring charges) | 2.3 | 0.6 | 1.7 |
KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||||
RESULTS OF OPERATIONS BY SEGMENT (continued) | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
(In millions of dollars) | ||||||||||||||||
Second Quarter | ||||||||||||||||
2011 |
2010 |
Change |
Constant Currency Change |
|||||||||||||
EMEA PT | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 45.8 | $ | 34.4 | 33.1 | % | 15.8 | % | ||||||||
Fee-based income | 5.3 | 3.9 | 34.2 | 18.0 | ||||||||||||
Gross profit | 12.4 | 9.3 | 32.4 | 15.8 | ||||||||||||
Total SG&A expenses | 11.0 | 8.8 | 24.9 | 8.3 | ||||||||||||
Earnings from operations | 1.4 | 0.5 | 152.7 | |||||||||||||
Gross profit rate | 27.0 | % | 27.1 | % | (0.1 | ) pts. | ||||||||||
Expense rates: | ||||||||||||||||
% of revenue | 24.0 | 25.5 | (1.5 | ) | ||||||||||||
% of gross profit | 88.8 | 94.1 | (5.3 | ) | ||||||||||||
Operating margin | 3.0 | 1.6 | 1.4 | |||||||||||||
APAC Commercial | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 102.3 | $ | 83.7 | 22.3 | % | 9.0 | % | ||||||||
Fee-based income | 3.7 | 2.7 | 36.9 | 21.8 | ||||||||||||
Gross profit | 14.3 | 11.7 | 22.1 | 7.9 | ||||||||||||
Total SG&A expenses | 13.9 | 10.7 | 29.4 | 13.8 | ||||||||||||
Earnings from operations | 0.4 | 1.0 | (58.5 | ) | ||||||||||||
Gross profit rate | 14.0 | % | 14.0 | % | - | pts. | ||||||||||
Expense rates: | ||||||||||||||||
% of revenue | 13.6 | 12.8 | 0.8 | |||||||||||||
% of gross profit | 97.2 | 91.8 | 5.4 | |||||||||||||
Operating margin | 0.4 | 1.2 | (0.8 | ) | ||||||||||||
APAC PT | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 13.5 | $ | 7.8 | 73.0 | % | 56.1 | % | ||||||||
Fee-based income | 4.2 | 2.8 | 51.9 | 38.0 | ||||||||||||
Gross profit | 5.6 | 3.5 | 57.2 | 41.7 | ||||||||||||
Total SG&A expenses | 6.4 | 3.9 | 64.4 | 47.9 | ||||||||||||
Earnings from operations | (0.8 | ) | (0.4 | ) | (130.8 | ) | ||||||||||
Gross profit rate | 41.3 | % | 45.5 | % | (4.2 | ) pts. | ||||||||||
Expense rates: | ||||||||||||||||
% of revenue | 47.9 | 50.4 | (2.5 | ) | ||||||||||||
% of gross profit | 115.9 | 110.8 | 5.1 | |||||||||||||
Operating margin | (6.6 | ) | (4.9 | ) | (1.7 | ) |
KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||||
RESULTS OF OPERATIONS BY SEGMENT (continued) | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
(In millions of dollars) | ||||||||||||||||
Second Quarter | ||||||||||||||||
2011 |
2010 |
Change |
Constant Currency Change |
|||||||||||||
OCG | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 74.0 | $ | 60.4 | 22.5 | % | 20.7 | % | ||||||||
Fee-based income | 9.5 | 5.6 | 68.9 | 59.8 | ||||||||||||
Gross profit | 21.0 | 13.0 | 62.1 | 57.0 | ||||||||||||
Total SG&A expenses | 21.8 | 18.8 | 16.4 | 11.4 | ||||||||||||
Earnings from operations | (0.8 | ) | (5.8 | ) | 85.2 | |||||||||||
Gross profit rate | 28.4 | % | 21.4 | % | 7.0 | pts. | ||||||||||
Expense rates: | ||||||||||||||||
% of revenue | 29.5 | 31.1 | (1.6 | ) | ||||||||||||
% of gross profit | 104.1 | 144.9 | (40.8 | ) | ||||||||||||
Operating margin | (1.2 | ) | (9.6 | ) | 8.4 | |||||||||||
Corporate Expense | ||||||||||||||||
Total SG&A expenses | $ | 18.9 | $ | 18.0 | 4.6 | % | ||||||||||
Consolidated Total (net of intersegment activity) | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 1,405.8 | $ | 1,209.4 | 16.2 | % | 11.3 | % | ||||||||
Fee-based income | 35.7 | 24.4 | 46.2 | 34.5 | ||||||||||||
Gross profit | 224.6 | 190.9 | 17.6 | 11.9 | ||||||||||||
SG&A expenses excluding restructuring charges | 203.9 | 180.9 | 12.7 | |||||||||||||
Restructuring charges | (0.6 | ) | - | NM | ||||||||||||
Total SG&A expenses | 203.3 | 180.9 | 12.4 | 6.8 | ||||||||||||
Asset impairments | - | 1.5 | (100.0 | ) | ||||||||||||
Earnings from operations | 21.3 | 8.5 | 151.8 | |||||||||||||
Earnings from operations excluding restructuring charges | 20.7 | 8.5 | 144.9 | |||||||||||||
Gross profit rate | 16.0 | % | 15.8 | % | 0.2 | pts. | ||||||||||
Expense rates (excluding restructuring charges): | ||||||||||||||||
% of revenue | 14.5 | 15.0 | (0.5 | ) | ||||||||||||
% of gross profit | 90.8 | 94.8 | (4.0 | ) | ||||||||||||
Operating margin (excluding restructuring charges) | 1.5 | 0.7 | 0.8 |
KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||||
RESULTS OF OPERATIONS BY SEGMENT | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
(In millions of dollars) | ||||||||||||||||
June Year to Date | ||||||||||||||||
2011 |
2010 |
Change |
Constant Currency Change |
|||||||||||||
Americas Commercial | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 1,323.6 | $ | 1,148.6 | 15.2 | % | 14.4 | % | ||||||||
Fee-based income | 5.6 | 4.3 | 31.5 | 29.7 | ||||||||||||
Gross profit | 186.2 | 164.2 | 13.4 | 12.7 | ||||||||||||
SG&A expenses excluding restructuring charges | 146.5 | 132.8 | 10.4 | |||||||||||||
Restructuring charges | - | 0.3 | (100.0 | ) | ||||||||||||
Total SG&A expenses | 146.5 | 133.1 | 10.1 | 9.4 | ||||||||||||
Earnings from operations | 39.7 | 31.1 | 27.7 | |||||||||||||
Earnings from operations excluding restructuring charges | 39.7 | 31.4 | 26.2 | |||||||||||||
Gross profit rate | 14.1 | % | 14.3 | % | (0.2 | ) pts. | ||||||||||
Expense rates (excluding restructuring charges): | ||||||||||||||||
% of revenue | 11.1 | 11.6 | (0.5 | ) | ||||||||||||
% of gross profit | 78.7 | 80.8 | (2.1 | ) | ||||||||||||
Operating margin (excluding restructuring charges) | 3.0 | 2.7 | 0.3 | |||||||||||||
Americas PT | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 488.3 | $ | 425.5 | 14.7 | % | 14.6 | % | ||||||||
Fee-based income | 6.5 | 4.5 | 43.8 | 43.5 | ||||||||||||
Gross profit | 72.1 | 66.0 | 9.2 | 9.1 | ||||||||||||
Total SG&A expenses | 53.2 | 45.7 | 16.3 | 16.2 | ||||||||||||
Earnings from operations | 18.9 | 20.3 | (6.7 | ) | ||||||||||||
Gross profit rate | 14.8 | % | 15.5 | % | (0.7) | pts. | ||||||||||
Expense rates: | ||||||||||||||||
% of revenue | 10.9 | 10.8 | 0.1 | |||||||||||||
% of gross profit | 73.7 | 69.2 | 4.5 | |||||||||||||
Operating margin | 3.9 | 4.8 | (0.9 | ) | ||||||||||||
EMEA Commercial | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 490.3 | $ | 414.7 | 18.3 | % | 8.5 | % | ||||||||
Fee-based income | 12.4 | 9.9 | 24.4 | 14.1 | ||||||||||||
Gross profit | 79.6 | 66.6 | 19.5 | 9.3 | ||||||||||||
SG&A expenses excluding restructuring charges | 71.6 | 63.3 | 13.2 | |||||||||||||
Restructuring charges | 3.4 | 2.7 | 26.0 | |||||||||||||
Total SG&A expenses | 75.0 | 66.0 | 13.7 | 4.2 | ||||||||||||
Asset impairments | - | 1.5 | (100.0 | ) | ||||||||||||
Earnings from operations | 4.6 | (0.9 | ) | NM | ||||||||||||
Earnings from operations excluding restructuring charges | 8.0 | 1.8 | 348.3 | |||||||||||||
Gross profit rate | 16.2 | % | 16.1 | % | 0.1 | pts. | ||||||||||
Expense rates (excluding restructuring charges): | ||||||||||||||||
% of revenue | 14.6 | 15.3 | (0.7 | ) | ||||||||||||
% of gross profit | 90.0 | 95.0 | (5.0 | ) | ||||||||||||
Operating margin (excluding restructuring charges) | 1.6 | 0.4 | 1.2 |
KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||||
RESULTS OF OPERATIONS BY SEGMENT (continued) | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
(In millions of dollars) | ||||||||||||||||
June Year to Date | ||||||||||||||||
2011 |
2010 |
Change |
Constant Currency Change |
|||||||||||||
EMEA PT | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 87.2 | $ | 69.3 | 25.8 | % | 16.1 | % | ||||||||
Fee-based income | 9.7 | 7.6 | 26.5 | 16.9 | ||||||||||||
Gross profit | 23.4 | 18.7 | 24.5 | 15.1 | ||||||||||||
Total SG&A expenses | 21.7 | 18.3 | 18.4 | 8.7 | ||||||||||||
Earnings from operations | 1.7 | 0.4 | 269.7 | |||||||||||||
Gross profit rate | 26.8 | % | 27.1 | % | (0.3 | ) pts. | ||||||||||
Expense rates: | ||||||||||||||||
% of revenue | 24.9 | 26.4 | (1.5 | ) | ||||||||||||
% of gross profit | 92.8 | 97.6 | (4.8 | ) | ||||||||||||
Operating margin | 1.9 | 0.7 | 1.2 | |||||||||||||
APAC Commercial | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 202.0 | $ | 164.6 | 22.7 | % | 11.2 | % | ||||||||
Fee-based income | 7.2 | 5.5 | 31.6 | 19.1 | ||||||||||||
Gross profit | 27.8 | 23.1 | 20.4 | 8.4 | ||||||||||||
SG&A expenses excluding restructuring charges | 27.2 | 20.6 | 32.1 | |||||||||||||
Restructuring charges | - | 0.5 | (100.0 | ) | ||||||||||||
Total SG&A expenses | 27.2 | 21.1 | 28.8 | 15.7 | ||||||||||||
Earnings from operations | 0.6 | 2.0 | (70.7 | ) | ||||||||||||
Earnings from operations excluding restructuring charges | 0.6 | 2.5 | (77.1 | ) | ||||||||||||
Gross profit rate | 13.8 | % | 14.0 | % | (0.2 | ) pts. | ||||||||||
Expense rates (excluding restructuring charges): | ||||||||||||||||
% of revenue | 13.5 | 12.5 | 1.0 | |||||||||||||
% of gross profit | 98.0 | 89.3 | 8.7 | |||||||||||||
Operating margin (excluding restructuring charges) | 0.3 | 1.5 | (1.2 | ) | ||||||||||||
APAC PT | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 25.0 | $ | 15.4 | 61.9 | % | 48.5 | % | ||||||||
Fee-based income | 8.0 | 4.7 | 72.9 | 59.0 | ||||||||||||
Gross profit | 10.6 | 6.3 | 67.0 | 52.8 | ||||||||||||
Total SG&A expenses | 12.1 | 7.7 | 58.8 | 45.1 | ||||||||||||
Earnings from operations | (1.5 | ) | (1.4 | ) | (19.5 | ) | ||||||||||
Gross profit rate | 42.4 | % | 41.1 | % | 1.3 | pts. | ||||||||||
Expense rates: | ||||||||||||||||
% of revenue | 48.8 | 49.7 | (0.9 | ) | ||||||||||||
% of gross profit | 115.0 | 121.0 | (6.0 | ) | ||||||||||||
Operating margin | (6.4 | ) | (8.6 | ) | 2.2 |
KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||||
RESULTS OF OPERATIONS BY SEGMENT (continued) | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
(In millions of dollars) | ||||||||||||||||
June Year to Date | ||||||||||||||||
2011 |
2010 |
Change |
Constant Currency Change |
|||||||||||||
OCG | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 142.2 | $ | 115.7 | 22.9 | % | 21.7 | % | ||||||||
Fee-based income | 18.2 | 11.7 | 55.2 | 49.3 | ||||||||||||
Gross profit | 39.9 | 27.0 | 48.3 | 45.0 | ||||||||||||
SG&A expenses excluding restructuring charges | 43.1 | 37.2 | 15.9 | |||||||||||||
Restructuring charges | - | 0.1 | (100.0 | ) | ||||||||||||
Total SG&A expenses | 43.1 | 37.3 | 15.7 | 12.2 | ||||||||||||
Earnings from operations | (3.2 | ) | (10.3 | ) | 68.9 | |||||||||||
Earnings from operations excluding restructuring charges | (3.2 | ) | (10.2 | ) | 68.6 | |||||||||||
Gross profit rate | 28.1 | % | 23.3 | % | 4.8 | pts. | ||||||||||
Expense rates (excluding restructuring charges): | ||||||||||||||||
% of revenue | 30.3 | 32.2 | (1.9 | ) | ||||||||||||
% of gross profit | 108.1 | 138.3 | (30.2 | ) | ||||||||||||
Operating margin (excluding restructuring charges) | (2.3 | ) | (8.9 | ) | 6.6 | |||||||||||
Corporate Expense | ||||||||||||||||
SG&A expenses excluding restructuring charges | $ | 37.9 | $ | 33.5 | 12.7 | % | ||||||||||
Restructuring charges | - | 0.8 | (100.0 | ) | ||||||||||||
Total SG&A expenses | 37.9 | 34.3 | 10.2 | |||||||||||||
Consolidated Total (net of intersegment activity) | ||||||||||||||||
Revenue from services (including fee-based income) | $ | 2,744.9 | $ | 2,339.8 | 17.3 | % | 13.9 | % | ||||||||
Fee-based income | 67.5 | 48.1 | 40.3 | 32.2 | ||||||||||||
Gross profit | 438.3 | 370.9 | 18.1 | 14.3 | ||||||||||||
SG&A expenses excluding restructuring charges | 412.0 | 358.1 | 15.1 | |||||||||||||
Restructuring charges | 3.4 | 4.4 | (23.6 | ) | ||||||||||||
Total SG&A expenses | 415.4 | 362.5 | 14.6 | 10.7 | ||||||||||||
Asset impairments | - | 1.5 | (100.0 | ) | ||||||||||||
Earnings from operations | 22.9 | 6.9 | 232.6 | |||||||||||||
Earnings from operations excluding restructuring charges | 26.3 | 11.3 | 132.4 | |||||||||||||
Gross profit rate | 16.0 | % | 15.9 | % | 0.1 | pts. | ||||||||||
Expense rates (excluding restructuring charges): | ||||||||||||||||
% of revenue | 15.0 | 15.3 | (0.3 | ) | ||||||||||||
% of gross profit | 94.0 | 96.5 | (2.5 | ) | ||||||||||||
Operating margin (excluding restructuring charges) | 1.0 | 0.5 | 0.5 |
KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||
(UNAUDITED) | ||||||||||||||
(In millions of dollars) | ||||||||||||||
July 3, 2011 | January 2, 2011 | July 4, 2010 | ||||||||||||
Current Assets | ||||||||||||||
Cash and equivalents | $ | 80.5 | $ | 80.5 | $ | 65.3 | ||||||||
Trade accounts receivable, less allowances of $13.6, $12.3 and $13.0, respectively | 929.8 | 810.9 |
751.8 |
|||||||||||
Prepaid expenses and other current assets | 74.1 | 44.8 | 60.7 | |||||||||||
Deferred taxes | 20.6 | 22.4 | 21.2 | |||||||||||
Total current assets | 1,105.0 | 958.6 | 899.0 | |||||||||||
Property and Equipment, Net | 96.2 | 104.0 | 112.1 | |||||||||||
Noncurrent Deferred Taxes | 84.1 | 84.0 | 74.2 | |||||||||||
Goodwill, Net | 67.3 | 67.3 | 67.3 | |||||||||||
Other Assets | 156.4 | 154.5 | 138.7 | |||||||||||
Total Assets | $ | 1,509.0 | $ | 1,368.4 | $ | 1,291.3 | ||||||||
Current Liabilities | ||||||||||||||
Short-term borrowings and current portion of long-term debt | $ | 89.0 | $ | 78.8 | $ | 68.4 | ||||||||
Accounts payable and accrued liabilities | 222.9 | 181.6 | 144.8 | |||||||||||
Accrued payroll and related taxes | 278.0 | 243.3 | 228.3 | |||||||||||
Accrued insurance | 31.9 | 31.3 | 23.1 | |||||||||||
Income and other taxes | 70.7 | 56.0 | 47.3 | |||||||||||
Total current liabilities | 692.5 | 591.0 | 511.9 | |||||||||||
Noncurrent Liabilities | ||||||||||||||
Long-term debt | - | - | 49.9 | |||||||||||
Accrued insurance | 54.6 | 53.6 | 55.0 | |||||||||||
Accrued retirement benefits | 91.0 | 85.4 | 72.4 | |||||||||||
Other long-term liabilities | 13.7 | 14.6 | 15.4 | |||||||||||
Total noncurrent liabilities | 159.3 | 153.6 | 192.7 | |||||||||||
Stockholders' Equity | ||||||||||||||
Common stock | 40.1 | 40.1 | 40.1 | |||||||||||
Treasury stock | (68.7 | ) | (70.9 | ) | (71.3 | ) | ||||||||
Paid-in capital | 28.0 | 28.0 | 26.8 | |||||||||||
Earnings invested in the business | 617.5 | 597.6 | 573.4 | |||||||||||
Accumulated other comprehensive income | 40.3 | 29.0 | 17.7 | |||||||||||
Total stockholders' equity | 657.2 | 623.8 | 586.7 | |||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,509.0 | $ | 1,368.4 | $ | 1,291.3 | ||||||||
STATISTICS: | ||||||||||||||
Working Capital | $ | 412.5 | $ | 367.6 | $ | 387.1 | ||||||||
Current Ratio | 1.6 | 1.6 | 1.8 | |||||||||||
Debt-to-capital % | 11.9 | % | 11.2 | % | 16.8 | % | ||||||||
Global Days Sales Outstanding | 52 | 49 | 50 |
KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
FOR THE 26 WEEKS ENDED JULY 3, 2011 AND JULY 4, 2010 | |||||||||||
(UNAUDITED) | |||||||||||
(In millions of dollars) | |||||||||||
2011 | 2010 | ||||||||||
Cash flows from operating activities | |||||||||||
Net earnings | $ | 19.9 | $ | 1.9 | |||||||
Noncash adjustments: | |||||||||||
Impairment of assets | - | 1.5 | |||||||||
Depreciation and amortization | 16.3 | 17.8 | |||||||||
Provision for bad debts | 2.2 | 0.5 | |||||||||
Stock-based compensation | 1.9 | 1.4 | |||||||||
Other, net | (0.1 | ) | 0.8 | ||||||||
Changes in operating assets and liabilities | (47.0 | ) | (44.2 | ) | |||||||
Net cash from operating activities | (6.8 | ) | (20.3 | ) | |||||||
Cash flows from investing activities | |||||||||||
Capital expenditures | (6.3 | ) | (3.8 | ) | |||||||
Settlement of forward exchange contracts | 0.7 | - | |||||||||
Other investing activities | 0.2 | 0.9 | |||||||||
Net cash from investing activities | (5.4 | ) | (2.9 | ) | |||||||
Cash flows from financing activities | |||||||||||
Net change in short-term borrowings | 71.9 | (11.8 | ) | ||||||||
Repayment of debt | (62.9 | ) | (7.3 | ) | |||||||
Sale of stock and other financing activities | (1.1 | ) | 24.2 | ||||||||
Net cash from financing activities | 7.9 | 5.1 | |||||||||
Effect of exchange rates on cash and equivalents | 4.3 | (5.5 | ) | ||||||||
Net change in cash and equivalents | - | (23.6 | ) | ||||||||
Cash and equivalents at beginning of period | 80.5 | 88.9 | |||||||||
Cash and equivalents at end of period | $ | 80.5 | $ | 65.3 |
KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||
REVENUE FROM SERVICES | |||||||||||||
(UNAUDITED) | |||||||||||||
(In millions of dollars) | |||||||||||||
Second Quarter (Commercial, PT and OCG) | |||||||||||||
% Change | |||||||||||||
Constant | |||||||||||||
2011 | 2010 | US$ | Currency | ||||||||||
Americas | |||||||||||||
United States | $ | 863.3 | $ | 770.8 | 12.0 | % | 12.0 | % | |||||
Canada | 61.4 | 54.5 | 12.8 | 6.0 | |||||||||
Mexico | 27.6 | 21.9 | 25.9 | 17.2 | |||||||||
Puerto Rico | 24.1 | 19.2 | 25.7 | 25.7 | |||||||||
Total Americas | 976.4 | 866.4 | 12.7 | 12.1 | |||||||||
EMEA | |||||||||||||
France | 78.1 | 67.6 | 15.5 | 1.7 | |||||||||
Switzerland | 62.3 | 40.7 | 52.9 | 19.5 | |||||||||
Russia | 37.8 | 25.4 | 48.4 | 36.5 | |||||||||
United Kingdom | 30.5 | 34.2 | (10.8 | ) | (18.4 | ) | |||||||
Portugal | 22.7 | 19.1 | 18.8 | 4.5 | |||||||||
Germany | 21.0 | 16.2 | 29.1 | 13.6 | |||||||||
Italy | 18.5 | 14.7 | 26.3 | 10.9 | |||||||||
Norway | 17.5 | 14.1 | 24.0 | 7.6 | |||||||||
Other | 22.5 | 16.9 | 33.6 | 16.2 | |||||||||
Total EMEA | 310.9 | 248.9 | 24.9 | 8.3 | |||||||||
APAC | |||||||||||||
Australia | 37.1 | 28.7 | 29.6 | 7.9 | |||||||||
Singapore | 26.3 | 19.6 | 34.1 | 19.3 | |||||||||
Malaysia | 18.8 | 16.3 | 15.5 | 7.5 | |||||||||
India | 17.5 | 15.2 | 15.6 | 13.1 | |||||||||
Other | 18.8 | 14.3 | 31.5 | 18.0 | |||||||||
Total APAC | 118.5 | 94.1 | 26.1 | 12.6 | |||||||||
Total Kelly Services, Inc. | $ | 1,405.8 | $ | 1,209.4 | 16.2 | % | 11.3 | % |
KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||
REVENUE FROM SERVICES | |||||||||||||
(UNAUDITED) | |||||||||||||
(In millions of dollars) | |||||||||||||
June Year to Date (Commercial, PT and OCG) | |||||||||||||
% Change | |||||||||||||
2011 |
2010 |
US$ |
Constant Currency |
||||||||||
Americas | |||||||||||||
United States | $ | 1,703.0 | $ | 1,481.0 | 15.0 | % | 15.0 | % | |||||
Canada | 120.8 | 106.1 | 13.9 | 7.5 | |||||||||
Mexico | 52.7 | 40.9 | 28.8 | 20.8 | |||||||||
Puerto Rico | 46.2 | 33.9 | 36.1 | 36.1 | |||||||||
Total Americas | 1,922.7 | 1,661.9 | 15.7 | 15.1 | |||||||||
EMEA | |||||||||||||
France | 148.1 | 134.9 | 9.8 | 3.3 | |||||||||
Switzerland | 109.5 | 72.1 | 51.9 | 25.6 | |||||||||
Russia | 72.0 | 48.7 | 47.7 | 39.9 | |||||||||
United Kingdom | 61.6 | 71.8 | (14.3 | ) | (19.2 | ) | |||||||
Portugal | 43.3 | 37.5 | 15.6 | 8.6 | |||||||||
Germany | 41.3 | 32.5 | 26.9 | 19.6 | |||||||||
Italy | 35.1 | 31.4 | 11.9 | 4.8 | |||||||||
Norway | 32.6 | 28.0 | 16.4 | 6.9 | |||||||||
Other | 45.7 | 36.1 | 26.7 | 18.4 | |||||||||
Total EMEA | 589.2 | 493.0 | 19.5 | 9.8 | |||||||||
APAC | |||||||||||||
Australia | 73.5 | 56.3 | 30.6 | 13.0 | |||||||||
Singapore | 52.4 | 38.5 | 36.0 | 22.4 | |||||||||
Malaysia | 36.4 | 30.9 | 17.9 | 8.4 | |||||||||
India | 35.1 | 28.9 | 21.7 | 19.6 | |||||||||
Other | 35.6 | 30.3 | 17.3 | 8.0 | |||||||||
Total APAC | 233.0 | 184.9 | 26.0 | 14.4 | |||||||||
Total Kelly Services, Inc. | $ | 2,744.9 | $ | 2,339.8 | 17.3 | % | 13.9 | % |
KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||||
(UNAUDITED) | ||||||||||||||
(In millions of dollars except per share data) | ||||||||||||||
Second Quarter | June Year to Date | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||
Pretax earnings from operations | $ | 21.3 | $ | 8.5 | $ | 22.9 | $ | 6.9 | ||||||
Restructuring charges (Note 1) | (0.6 | ) | - | 3.4 | 4.4 | |||||||||
Asset impairments (Note 2) | - | 1.5 | - | 1.5 | ||||||||||
Earnings from operations excluding restructuring and asset impairment charges | $20.7 |
$10.0 |
$26.3 |
$12.8 |
||||||||||
Second Quarter | ||||||||||||||
2011 | 2010 | |||||||||||||
Amount | Per Share | Amount | Per Share | |||||||||||
Earnings from continuing operations, net of taxes | $ | 20.0 | $ | 0.53 | $ | 3.9 | $ | 0.11 | ||||||
Restructuring charges, net of taxes (Note 1) | (0.6 | ) | (0.02 | ) | - | - | ||||||||
Asset impairments, net of taxes (Note 2) | - | - | 1.2 | 0.03 | ||||||||||
Earnings from continuing operations excluding restructuring and asset impairment charges, net of taxes | $19.4 |
$0.52 |
$5.1 |
$0.14 |
||||||||||
June Year to Date | ||||||||||||||
2011 | 2010 | |||||||||||||
Amount | Per Share | Amount | Per Share | |||||||||||
Earnings from continuing operations, net of taxes | $ | 21.1 | $ | 0.56 | $ | 1.9 | $ | 0.05 | ||||||
Restructuring charges, net of taxes (Note 1) | 3.4 | 0.09 | 3.6 | 0.10 | ||||||||||
Asset impairments, net of taxes (Note 2) | - | - | 1.2 | 0.03 | ||||||||||
Earnings from continuing operations excluding restructuring and asset impairment charges, net of taxes | $24.5 |
$0.65 |
$6.7 |
$0.19 |
KELLY SERVICES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP MEASURES |
(UNAUDITED) |
Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the restructuring and impairment charges is useful to understand the Company's fiscal 2011 financialperformance 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) In 2010, restructuring costs related primarily to severance and lease termination costs for branches in the EMEA and APAC Commercial segments that were in the process of closure at the end of 2009, as well as severance costs related to the corporate headquarters. In 2011, restructuring costs relate primarily to revisions of the estimated lease termination costs for EMEA Commercial branches that closed in prior years.
(2) Asset impairment charges relate to the write-off of incomplete software projects in Europe.
Contact Information:
ANALYST CONTACT:
James Polehna
(248) 244-4586
james_polehna@kellyservices.com
MEDIA CONTACT:
Jane Stehney
(248) 244-5630
jane_stehney@kellyservices.com