Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a world
leader in human resources solutions, today announced results for
the third quarter of 2008.
Carl T. Camden, President and Chief Executive Officer, announced
revenue for the third quarter of 2008 totaled $1.4 billion, a 2%
decrease compared to the corresponding quarter in 2007.
Losses from operations for the third quarter of 2008 totaled
$14.5 million, compared to $20.8 million earnings from operations
reported for the third quarter of 2007. Included in the results of
operations for the third quarter 2008 is a $22.5 million pre-tax
charge related to several litigation matters. Earnings from
operations in the third quarter of 2007 included $2.5 million of
pre-tax restructuring costs.
Diluted losses per share from continuing operations in the third
quarter of 2008 were $0.33, compared to third quarter 2007 earnings
of $0.40 per share. The litigation charge in 2008 was $0.40 per
diluted share from continuing operations. Included in third quarter
2007 diluted earnings is the $0.05 per share cost of
restructuring.
Year-to-date 2008 earnings from continuing operations totaled
$6.9 million or $0.20 per share.
Commenting on the results, Camden said, "Our third quarter
performance reflects the rapid deterioration in global economic
conditions and further weakening of the staffing market,
particularly in the U.S. Absent the litigation charge, we would
have reported modest earnings for the quarter. Although a
disappointment, these lawsuits do not affect our ability to execute
our long-term strategy."
Camden concluded, "In spite of the tumultuous economic landscape
and the cyclical nature of our business, Kelly remains focused on
building a stronger company for our employees and customers, while
creating lasting value for our shareholders."
In conjunction with its third quarter earnings release, Kelly
Services, Inc. will host a conference call at 9:00 a.m. (ET) on
October 21, 2008 to review the results and answer questions. The
call may be accessed in one of the following ways:
Via the Telephone:
U.S. 1-800-398-9398
International 1-612-288-0329
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: 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
projections contained herein.
About Kelly Services
Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB) is a world
leader in human resources solutions headquartered in Troy,
Michigan, offering temporary staffing services, outsourcing, vendor
on-site and full-time placement to clients on a global basis. Kelly
provides employment to more than 750,000 employees annually, with
skills including office services, accounting, engineering,
information technology, law, science, marketing, creative services,
light industrial, education, and health care. Revenue in 2007 was
$5.7 billion. Visit www.kellyservices.com.
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED SEPTEMBER 28, 2008 AND SEPTEMBER 30, 2007
(UNAUDITED)
(In thousands of dollars except per share data)
%
2008 2007 Change Change
---------- ---------- -------- -------
Revenue from services $1,397,748 $1,425,298 $(27,550) (1.9)%
Cost of services 1,152,032 1,178,419 (26,387) (2.2)
---------- ---------- -------- -------
Gross profit 245,716 246,879 (1,163) (0.5)
Selling, general and
administrative expenses 260,260 226,099 34,161 15.1
---------- ---------- -------- -------
(Loss) earnings from
operations (14,544) 20,780 (35,324) (170.0)
Other (expense) income, net (124) 587 (711) (121.1)
---------- ---------- -------- -------
(Loss) earnings from
continuing operations
before taxes (14,668) 21,367 (36,035) (168.6)
Income taxes (3,115) 6,685 (9,800) (146.6)
---------- ---------- -------- -------
(Loss) earnings from
continuing operations (11,553) 14,682 (26,235) (178.7)
(Loss) earnings from
discontinued operations,
net of tax (663) 459 (1,122) (244.4)
---------- ---------- -------- -------
Net (loss) earnings $ (12,216) $ 15,141 $(27,357) (180.7)%
========== ========== ======== =======
Basic (loss) earnings per share
(Loss) earnings from
continuing operations $ (0.33) $ 0.40 $ (0.73) (182.5)%
(Loss) earnings from
discontinued operations (0.02) 0.01 (0.03) (300.0)
---------- ---------- -------- -------
Net (loss) earnings $ (0.35) $ 0.41 $ (0.76) (185.4)%
========== ========== ======== =======
Diluted (loss) earnings per share
(Loss) earnings from
continuing operations $ (0.33) $ 0.40 $ (0.73) (182.5)%
(Loss) earnings from
discontinued operations (0.02) 0.01 (0.03) (300.0)
---------- ---------- -------- -------
Net (loss) earnings $ (0.35) $ 0.41 $ (0.76) (185.4)%
========== ========== ======== =======
STATISTICS:
Gross profit rate 17.6% 17.3% 0.3 pts.
Selling, general and
administrative expenses:
% of revenue 18.6 15.9 2.7
% of gross profit 105.9 91.6 14.3
% Return - (Loss) earnings
from operations (1.0) 1.5 (2.5)
(Loss) earnings
from continuing
operations before
taxes (1.0) 1.5 (2.5)
(Loss) earnings
from continuing
operations (0.8) 1.0 (1.8)
Net (loss)
earnings (0.9) 1.1 (2.0)
Effective income tax rate 21.2% 31.3% (10.1) pts.
Average number of shares
outstanding (thousands):
Basic 34,759 36,500
Diluted 34,801 36,537
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 39 WEEKS ENDED SEPTEMBER 28, 2008 AND SEPTEMBER 30, 2007
(UNAUDITED)
(In thousands of dollars except per share data)
%
2008 2007 Change Change
---------- ---------- -------- ------
Revenue from services $4,238,199 $4,191,830 $ 46,369 1.1%
Cost of services 3,485,194 3,468,177 17,017 0.5
---------- ---------- -------- ------
Gross profit 753,005 723,653 29,352 4.1
Selling, general and
administrative expenses 739,655 670,114 69,541 10.4
---------- ---------- -------- ------
Earnings from operations 13,350 53,539 (40,189) (75.1)
Other (expense) income, net (26) 2,190 (2,216) (101.2)
---------- ---------- -------- ------
Earnings from continuing
operations before taxes 13,324 55,729 (42,405) (76.1)
Income taxes 6,456 20,478 (14,022) (68.5)
---------- ---------- -------- ------
Earnings from continuing
operations 6,868 35,251 (28,383) (80.5)
(Loss) earnings from
discontinued operations, net
of tax (338) 7,134 (7,472) (104.7)
---------- ---------- -------- ------
Net earnings $ 6,530 $ 42,385 $(35,855) (84.6)%
========== ========== ======== ======
Basic earnings per share
Earnings from continuing
operations $ 0.20 $ 0.96 $ (0.76) (79.2)%
(Loss) earnings from
discontinued operations (0.01) 0.20 (0.21) (105.0)
---------- ---------- -------- ------
Net earnings $ 0.19 $ 1.16 $ (0.97) (83.6)%
========== ========== ======== ======
Diluted earnings per share
Earnings from continuing
operations $ 0.20 $ 0.96 $ (0.76) (79.2)%
(Loss) earnings from
discontinued operations (0.01) 0.19 (0.20) (105.3)
---------- ---------- -------- ------
Net earnings $ 0.19 $ 1.15 $ (0.96) (83.5)%
========== ========== ======== ======
STATISTICS:
Gross profit rate 17.8% 17.3% 0.5 pts.
Selling, general and
administrative expenses:
% of revenue 17.5 16.0 1.5
% of gross profit 98.2 92.6 5.6
% Return - Earnings from
operations 0.3 1.3 (1.0)
Earnings from
continuing
operations before
taxes 0.3 1.3 (1.0)
Earnings from
continuing
operations 0.2 0.8 (0.6)
Net earnings 0.2 1.0 (0.8)
Effective income tax rate 48.5% 36.7% 11.8 pts.
Average number of shares
outstanding (thousands):
Basic 34,759 36,557
Diluted 34,850 36,843
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
Third Quarter
----------------------------------------
Constant
Currency
2008 2007 Change Change
------- ------- ------- --------
Americas Commercial
Revenue from services
(including fee-based income) $ 618.3 $ 682.5 (9.4)% (9.6)%
Fee-based income 4.3 4.9 (10.9) (11.2)
Earnings from operations 11.8 20.9 (43.3)
Earnings from operations
(excluding restructuring
charges) 11.8 22.4 (47.2)
Gross profit rate 15.4% 15.7% (0.3) pts.
Expense rates:
% of revenue 13.4 12.7 0.7
% of gross profit 87.5 80.5 7.0
Operating margin 1.9 3.1 (1.2)
Americas PT
Revenue from services
(including fee-based income) $ 228.2 $ 235.6 (3.1)% (3.2)%
Fee-based income 5.0 5.6 (10.7) (10.7)
Earnings from operations 10.0 13.2 (24.2)
Gross profit rate 17.0% 17.7% (0.7) pts.
Expense rates:
% of revenue 12.6 12.1 0.5
% of gross profit 74.2 68.4 5.8
Operating margin 4.4 5.6 (1.2)
EMEA Commercial
Revenue from services
(including fee-based income) $ 353.6 $ 332.9 6.2% 1.3%
Fee-based income 10.2 9.8 3.9 (0.1)
Earnings from operations 4.0 3.8 6.7
Earnings from operations
(excluding restructuring
charges) 4.0 4.7 (14.9)
Gross profit rate 17.8% 17.2% 0.6 pts.
Expense rates:
% of revenue 16.7 16.1 0.6
% of gross profit 93.6 93.4 0.2
Operating margin 1.1 1.1 0.0
EMEA PT
Revenue from services
(including fee-based income) $ 44.0 $ 40.4 8.9% 2.7%
Fee-based income 6.7 5.8 15.3 7.2
Earnings from operations 0.4 1.1 (61.4)
Gross profit rate 29.3% 28.8% 0.5 pts.
Expense rates:
% of revenue 28.3 26.2 2.1
% of gross profit 96.8 90.7 6.1
Operating margin 0.9 2.7 (1.8)
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT (continued)
(UNAUDITED)
(In millions of dollars)
Third Quarter
-----------------------------------------
Constant
Currency
2008 2007 Change Change
-------- -------- ----- ---------
APAC Commercial
Revenue from services
(including fee-based income) $ 84.9 $ 80.6 5.4% 1.7%
Fee-based income 4.5 4.1 10.0 6.4
Earnings from operations 0.2 1.2 (84.3)
Gross profit rate 17.3% 17.3% 0.0 pts.
Expense rates:
% of revenue 17.1 15.8 1.3
% of gross profit 98.7 91.6 7.1
Operating margin 0.2 1.5 (1.3)
APAC PT
Revenue from services
(including fee-based income) $ 9.2 $ 8.0 14.8% 9.5%
Fee-based income 1.5 1.5 0.4 (4.3)
Earnings from operations 0.1 0.1 26.1
Gross profit rate 31.2% 33.3% (2.1) pts.
Expense rates:
% of revenue 29.6 31.8 (2.2)
% of gross profit 94.9 95.7 (0.8)
Operating margin 1.6 1.4 0.2
OCG
Revenue from services
(including fee-based income) $ 59.6 $ 45.3 31.5% 30.5%
Fee-based income 7.4 4.0 86.4 83.3
Earnings from operations 0.1 1.9 (94.7)
Gross profit rate 31.1% 26.9% 4.2 pts.
Expense rates:
% of revenue 31.0 22.8 8.2
% of gross profit 99.5 84.6 14.9
Operating margin 0.2 4.1 (3.9)
Corporate Expense $ (41.2) $ (21.3) (93.5)%
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
September Year to Date
----------------------------------------
Constant
Currency
2008 2007 Change Change
-------- -------- ----- --------
Americas Commercial
Revenue from services
(including fee-based income) $1,912.4 $2,063.6 (7.3)% (8.1)%
Fee-based income 13.0 14.0 (7.7) (9.5)
Earnings from operations 53.7 69.1 (22.2)
Earnings from operations
(excluding restructuring
charges) 53.7 70.6 (23.9)
Gross profit rate 15.8% 15.8% 0.0 pts.
Expense rates:
% of revenue 13.0 12.4 0.6
% of gross profit 82.2 78.8 3.4
Operating margin 2.8 3.3 (0.5)
Americas PT
Revenue from services
(including fee-based income) $ 698.8 $ 699.6 (0.1)% (0.2)%
Fee-based income 15.8 15.6 1.2 0.9
Earnings from operations 38.2 40.5 (5.8)
Gross profit rate 17.6% 17.7% (0.1) pts.
Expense rates:
% of revenue 12.2 11.9 0.3
% of gross profit 69.0 67.2 1.8
Operating margin 5.5 5.8 (0.3)
EMEA Commercial
Revenue from services
(including fee-based income) $1,027.2 $ 951.6 7.9% (0.4)%
Fee-based income 32.0 28.2 13.5 5.2
Earnings from operations 3.8 2.8 36.3
Earnings from operations
(excluding restructuring
charges) 3.8 8.8 (57.2)
Gross profit rate 17.5% 17.4% 0.1 pts.
Expense rates:
% of revenue 17.1 17.1 0.0
% of gross profit 97.9 98.3 (0.4)
Operating margin 0.4 0.3 0.1
EMEA PT
Revenue from services
(including fee-based income) $ 134.1 $ 115.7 15.9% 5.7%
Fee-based income 21.3 15.5 37.5 23.9
Earnings from operations 2.8 1.8 53.7
Gross profit rate 29.8% 27.9% 1.9 pts.
Expense rates:
% of revenue 27.7 26.3 1.4
% of gross profit 93.0 94.3 (1.3)
Operating margin 2.1 1.6 0.5
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT (continued)
(UNAUDITED)
(In millions of dollars)
September Year to Date
-----------------------------------------
Constant
Currency
2008 2007 Change Change
-------- -------- ------ ---------
APAC Commercial
Revenue from services
(including fee-based income) $ 262.5 $ 221.3 18.6% 9.6%
Fee-based income 13.9 11.0 26.3 17.1
Earnings from operations 0.8 3.3 (77.2)
Gross profit rate 17.1% 17.2% (0.1) pts.
Expense rates:
% of revenue 16.8 15.7 1.1
% of gross profit 98.3 91.2 7.1
Operating margin 0.3 1.5 (1.2)
APAC PT
Revenue from services
(including fee-based income) $ 27.1 $ 18.5 46.3% 33.4%
Fee-based income 4.3 3.7 18.1 8.3
Earnings from operations (0.2) (0.3) 18.5
Gross profit rate 30.7% 33.5% (2.8) pts.
Expense rates:
% of revenue 31.5 34.9 (3.4)
% of gross profit 102.6 104.3 (1.7)
Operating margin (0.8) (1.4) 0.6
OCG
Revenue from services
(including fee-based income) $ 176.1 $ 121.6 44.8% 42.4%
Fee-based income 20.6 11.7 76.3 71.2
Earnings from operations 2.8 3.0 (9.0)
Gross profit rate 31.0% 26.5% 4.5 pts.
Expense rates:
% of revenue 29.5 24.0 5.5
% of gross profit 94.9 90.6 4.3
Operating margin 1.6 2.5 (0.9)
Corporate Expense $ (88.5) $ (66.8) (32.5)%
KELLY SERVICES, INC. AND SUBSIDIARIES
SUMMARY OF DISCONTINUED OPERATIONS
(UNAUDITED)
(In thousands of dollars)
Third Quarter Sept. Year to Date
------------------ ------------------
2008 2007 2008 2007
-------- --------- -------- ---------
Revenue from services $ - $ - $ - $ 14,777
Operating (loss) income from
discontinued operations $ (1,073) $ 746 $ (547) $ 1,573
Less: Income taxes (410) 287 (209) 605
-------- --------- -------- ---------
(Loss) earnings from discontinued
operations, net of tax (663) 459 (338) 968
-------- --------- -------- ---------
Gain on sale of discontinued
operations - - - 10,153
Less: Income taxes - - - 3,987
-------- --------- -------- ---------
Gain on sale of discontinued
operations, net of tax - - - 6,166
-------- --------- -------- ---------
Discontinued operations, net of tax $ (663) $ 459 $ (338) $ 7,134
======== ========= ======== =========
Effective March 31, 2007, the Company sold Kelly Home Care ("KHC"), a
wholly owned subsidiary. Effective December 31, 2006, the Company sold
Kelly Staff Leasing ("KSL"), a wholly owned subsidiary. The operating
results for KHC and KSL, as well as the gain on the sale of KHC, have been
excluded from earnings from continuing operations. This schedule provides
information on KHC's and KSL's results from operations for the third
quarter of 2008 and 2007 and September year to date 2008 and 2007, as well
as the gain on the sale of KHC, all of which are included as discontinued
operations on the face of the statements of earnings.
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands of dollars)
September 28, December 30, September 30,
2008 2007 2007
------------ ------------ ------------
Current Assets
Cash and equivalents $ 113,566 $ 92,817 $ 102,982
Trade accounts receivable,
less allowances of
$18,550, $18,172 and $18,357,
respectively 913,742 888,334 903,566
Prepaid expenses and other
current assets 59,651 53,392 49,734
Deferred taxes 30,237 29,294 30,342
------------ ------------ ------------
Total current assets 1,117,196 1,063,837 1,086,624
Property and Equipment, Net 168,288 178,019 175,106
Noncurrent Deferred Taxes 48,639 43,436 37,458
Goodwill, Net 161,439 147,168 122,917
Other Assets 134,189 141,537 147,570
------------ ------------ ------------
Total Assets $ 1,629,751 $ 1,573,997 $ 1,569,675
============ ============ ============
Current Liabilities
Short-term borrowings $ 63,274 $ 49,729 $ 75,489
Accounts payable 242,127 171,471 161,843
Accrued payroll and related
taxes 282,004 270,575 286,056
Accrued insurance 23,281 23,696 25,495
Income and other taxes 62,398 69,779 65,073
------------ ------------ ------------
Total current liabilities 673,084 585,250 613,956
Noncurrent Liabilities
Long-term debt 51,245 48,394 -
Accrued insurance 59,488 60,404 59,489
Accrued retirement benefits 70,196 78,382 81,249
Other long-term liabilities 16,981 13,338 17,865
------------ ------------ ------------
Total noncurrent liabilities 197,910 200,518 158,603
Stockholders' Equity
Common stock 40,116 40,116 40,116
Treasury stock (111,346) (106,312) (84,323)
Paid-in capital 34,511 34,500 33,406
Earnings invested in the
business 769,599 777,338 763,577
Accumulated other
comprehensive income 25,877 42,587 44,340
------------ ------------ ------------
Total stockholders' equity 758,757 788,229 797,116
------------ ------------ ------------
Total Liabilities and
Stockholders' Equity $ 1,629,751 $ 1,573,997 $ 1,569,675
============ ============ ============
STATISTICS:
Working Capital $ 444,112 $ 478,587 $ 472,668
Current Ratio 1.7 1.8 1.8
Debt-to-capital % 13.1% 11.1% 8.7%
Global Days Sales Outstanding 51 49 52
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 39 WEEKS ENDED SEPTEMBER 28, 2008 AND SEPTEMBER 30, 2007
(UNAUDITED)
(In thousands of dollars)
2008 2007
--------- ---------
Cash flows from operating activities
Net earnings $ 6,530 $ 42,385
Noncash adjustments:
Depreciation and amortization 34,145 31,051
Provision for bad debts 4,813 4,926
Stock-based compensation 3,004 2,683
Gain on sale of discontinued operations - (6,166)
Other, net 1,767 (422)
Changes in operating assets and liabilities 36,166 (24,808)
--------- ---------
Net cash from operating activities 86,425 49,649
--------- ---------
Cash flows from investing activities
Capital expenditures (23,519) (33,567)
Acquisition of companies, net of cash received (32,433) (25,255)
Proceeds from sale of discontinued operations - 12,500
Other investing activities (409) (586)
--------- ---------
Net cash from investing activities (56,361) (46,908)
--------- ---------
Cash flows from financing activities
Net increase (decrease) in revolving line of
credit 12,483 (3,469)
Proceeds from debt - 8,223
Dividend payments (14,269) (14,244)
Purchase of treasury stock (7,975) (12,500)
Stock options and other stock sales 98 5,760
Other financing activities 1,033 (5,767)
--------- ---------
Net cash from financing activities (8,630) (21,997)
--------- ---------
Effect of exchange rates on cash and equivalents (685) 3,810
--------- ---------
Net change in cash and equivalents 20,749 (15,446)
Cash and equivalents at beginning of period 92,817 118,428
--------- ---------
Cash and equivalents at end of period $ 113,566 $ 102,982
========= =========
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In thousands of dollars)
Third Quarter (Commercial, PT and OCG)
---------------------------------------------
% Change
Constant
2008 2007 US$ Currency
----------- ----------- --------- ---------
Americas
United States $ 795,791 $ 854,563 (6.9)% (6.9)%
Canada 62,084 67,542 (8.1) (8.6)
Mexico 20,849 19,119 9.0 2.5
Puerto Rico 19,304 19,169 0.7 0.7
----------- -----------
Total Americas 898,028 960,393 (6.5) (6.7)
Europe
United Kingdom 102,530 119,385 (14.1) (8.6)
France 93,707 82,497 13.6 3.4
Switzerland 49,007 49,363 (0.7) (11.5)
Italy 33,868 28,795 17.6 7.4
Russia 25,339 17,542 44.4 37.7
Norway 24,911 21,902 13.7 5.2
Germany 21,131 16,605 27.3 16.3
Other 52,247 38,074 37.2 25.9
----------- -----------
Total Europe 402,740 374,163 7.6 2.5
Asia-Pacific
Australia 33,893 35,169 (3.6) (8.4)
Singapore 18,656 16,354 14.1 5.1
Other 44,431 39,219 13.3 12.6
----------- -----------
Total Asia-Pacific 96,980 90,742 6.9 3.1
Total Kelly Services, Inc. $ 1,397,748 $ 1,425,298 (1.9)% (3.6)%
=========== ===========
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In thousands of dollars)
September Year to Date (Commercial, PT and OCG)
----------------------------------------------
% Change
Constant
2008 2007 US$ Currency
----------- ----------- --------- ---------
Americas
United States $ 2,455,641 $ 2,573,282 (4.6)% (4.6)%
Canada 187,584 191,009 (1.8) (9.3)
Puerto Rico 58,800 57,341 2.5 2.5
Mexico 58,119 54,849 6.0 1.6
----------- -----------
Total Americas 2,760,144 2,876,481 (4.0) (4.6)
Europe
United Kingdom 317,328 355,790 (10.8) (9.1)
France 275,727 227,924 21.0 6.8
Switzerland 143,463 130,752 9.7 (4.9)
Italy 106,654 92,781 15.0 1.5
Norway 69,143 56,523 22.3 7.3
Russia 68,584 48,876 40.3 30.6
Germany 65,309 45,502 43.5 26.8
Other 133,599 110,807 20.6 7.1
----------- -----------
Total Europe 1,179,807 1,068,955 10.4 1.6
Asia-Pacific
Australia 107,633 96,107 12.0 0.7
Singapore 55,161 44,074 25.2 14.2
Other 135,454 106,213 27.5 20.7
----------- -----------
Total Asia-Pacific 298,248 246,394 21.0 11.7
Total Kelly Services, Inc. $ 4,238,199 $ 4,191,830 1.1 % (2.1)%
=========== ===========
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
(In thousands of dollars except per share data)
Third Quarter
------------------------------------------
2008 2007
-------------------- --------------------
Amount Per Share Amount Per Share
--------- --------- --------- ---------
(Loss) earnings from continuing
operations $ (11,553) $ (0.33) $ 14,682 $ 0.40
Restructuring charges, net
of taxes (Notes 1 and 2) - - 1,882 0.05
--------- --------- --------- ---------
(Loss) earnings from continuing
operations excluding
restructuring charges, net of
taxes $ (11,553) $ (0.33) $ 16,564 $ 0.45
========= ========= ========= =========
Third Quarter
-----------------------------------------
2008 2007 % Change
--------- --------- --------
Selling, general and
administrative expenses $ 260,260 $ 226,099
Restructuring charges (Notes
1 and 2) - (2,464)
--------- ---------
Selling, general and
administrative expenses
excluding restructuring
charges $ 260,260 $ 223,635 16.4%
========= ========= ========
(Loss) earnings from operations $ (14,544) $ 20,780
Restructuring charges (Notes
1 and 2) - 2,464
--------- ---------
Earnings from operations
excluding restructuring
charges $ (14,544) $ 23,244 (162.6%)
========= ========= ========
Americas Commercial selling,
general and administrative
expenses $ 83,124 $ 86,529
Americas restructuring
charge (1) - (1,511)
--------- ---------
Americas Commercial selling,
general and administrative
expenses excluding the Americas
restructuring charge $ 83,124 $ 85,018 (2.2%)
========= ========= ========
Americas Commercial earnings
from operations $ 11,848 $ 20,911
Americas restructuring
charge (1) - 1,511
--------- ---------
Americas Commercial earnings
from operations excluding the
Americas restructuring charge $ 11,848 $ 22,422 (47.2%)
========= ========= ========
EMEA Commercial Earnings from
operations $ 4,010 $ 3,758
UK restructuring charge
(Note 2) - 953
--------- ---------
EMEA Commercial earnings from
operations excluding the UK
restructuring charge $ 4,010 $ 4,711 (14.9%)
========= ========= ========
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
(In thousands of dollars except per share data)
Management believes that the non-GAAP (Generally Accepted
Accounting Principles) information excluding the restructuring
charge from prior year results is useful to understand the
Company's fiscal 2008 financial performance and increases
comparability. Specifically, Management believes that excluding
this item 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) The Americas restructuring charge is comprised of facility
exit costs associated with the closure of 42 branch locations and
the accelerated depreciation of the leasehold improvements and
personal property at the impacted locations.
(2) The UK restructuring charge is comprised of facility exit
costs associated with the closure of 22 branch locations and the
accelerated depreciation of the leasehold improvements and personal
property at the impacted locations.
ANALYST CONTACT: James Polehna (248) 244-4586
james_polehna@kellyservices.com MEDIA CONTACT: Judith Clark (248)
244-5362 judith_clark@kellyservices.com
Kelly Services (NASDAQ:KELYA)
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