Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a leader in
providing workforce solutions, today announced results for the
first quarter 2012.
Carl T. Camden, President and Chief Executive Officer, announced
revenue for the first quarter of 2012 totaled $1.4 billion, a 1%
increase compared to the corresponding quarter in 2011.
Earnings from continuing operations for the first quarter of
2012 totaled $9.2 million, compared to $1.1 million reported for
the first quarter of 2011.
Diluted earnings per share from continuing operations in the
first quarter of 2012 were $0.24 compared to $0.03 per share in the
first quarter 2011.
Commenting on the first quarter results, Camden stated, "We are
pleased to report solid quarterly performance in spite of the
economic challenges that continue to test the sustainability of
this recovery. By staying focused on our strategy, we were able to
leverage a leaner cost structure, improve our gross profit rate,
and increase earnings."
Camden added that Kelly® has strengthened its competitive
position this cycle and is focused on building shareholder value
and increasing profit levels. "We remain committed to meeting our
customers' needs for flexible, innovative solutions for managing
their workforce across the full spectrum of talent -- from
traditional staffing to professional and technical specialties, to
outsourcing and consulting programs," he said.
Kelly also reported that on May 8, its board of directors
declared a dividend of $0.05 per share. The dividend is payable
June 4, 2012 to shareholders of record as of the close of business
on May 21, 2012.
In conjunction with its first quarter earnings release, Kelly
Services, Inc. will host a conference call at 9:00 a.m. (ET) on May
9, 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:
http://ir.kellyservices.com/eventdetail.cfm?EventID=112903
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 triggered 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 and collective actions, liability
for improper disclosure of sensitive or private employee
information, 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 and the expiration of the U.S. work
opportunity credit program), 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. (NASDAQ: KELYA) (NASDAQ: KELYB)
is a leader in providing workforce solutions. Kelly® offers a
comprehensive array of outsourcing and consulting services as well
as world-class staffing on a temporary, temporary-to-hire and
direct-hire basis. Serving clients around the globe, Kelly provides
employment to more than 550,000 employees annually. Revenue in 2011
was $5.6 billion. Visit www.kellyservices.com and connect with us
on Facebook, LinkedIn, & Twitter. Click to download The Talent
Project, our free iPad app.
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED APRIL 1, 2012 AND APRIL 3, 2011
(UNAUDITED)
(In millions of dollars except per share data)
2012 2011 Change % Change
--------- ---------- ---------- --------
Revenue from services $ 1,354.8 $ 1,339.1 $ 15.7 1.2%
Cost of services 1,131.1 1,127.9 3.2 0.3
--------- ---------- ---------- --------
Gross profit 223.7 211.2 12.5 5.9
Selling, general and
administrative expenses 209.0 209.6 (0.6) (0.3)
--------- ---------- ---------- --------
Earnings from operations 14.7 1.6 13.1 NM
Other expense, net (0.6) (0.4) (0.2) (37.5)
--------- ---------- ---------- --------
Earnings from continuing
operations before taxes 14.1 1.2 12.9 NM
Income taxes 4.9 0.1 4.8 NM
--------- ---------- ---------- --------
Earnings from continuing
operations 9.2 1.1 8.1 NM
Earnings from discontinued
operations, net of tax 0.4 - 0.4 NM
--------- ---------- ---------- --------
Net earnings $ 9.6 $ 1.1 $ 8.5 NM%
========= ========== ========== ========
Basic earnings per share on
common stock
Earnings from continuing
operations $ 0.24 $ 0.03 $ 0.21 NM%
Earnings from discontinued
operations 0.01 - 0.01 NM
Net earnings 0.26 0.03 0.23 NM
Diluted earnings per share on
common stock
Earnings from continuing
operations $ 0.24 $ 0.03 $ 0.21 NM%
Earnings from discontinued
operations 0.01 - 0.01 NM
Net earnings 0.26 0.03 0.23 NM
----------------------------------------------------------------------------
STATISTICS:
Gross profit rate 16.5% 15.8% 0.7pts.
Selling, general and
administrative expenses:
% of revenue 15.4 15.7 (0.3)
% of gross profit 93.4 99.2 (5.8)
% Return:
Earnings from operations 1.1 0.1 1.0
Earnings from continuing
operations before taxes 1.0 0.1 0.9
Earnings from continuing
operations 0.7 0.1 0.6
Net earnings 0.7 0.1 0.6
Effective income tax rate 34.6% 4.5% 30.1pts.
Average number of shares
outstanding (millions):
Basic 36.9 36.7
Diluted 36.9 36.7
Shares adjusted for nonvested
restricted awards (millions):
Basic 37.8 37.4
Diluted 37.8 37.4
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
First Quarter
----------------------------------------------
Constant
Currency
2012 2011 Change Change
-------- -------- --------- --------
Americas Commercial
Revenue from services
(including fee-based
income) $ 669.3 $ 653.3 2.4% 3.0%
Fee-based income 3.5 2.8 24.7 25.8
Gross profit 98.0 92.0 6.4 7.0
Gross profit rate 14.6% 14.1% 0.5pts.
Americas PT
Revenue from services
(including fee-based
income) $ 250.1 $ 240.6 4.0% 4.1%
Fee-based income 3.4 2.8 23.6 23.7
Gross profit 40.2 36.0 11.6 11.7
Gross profit rate 16.1% 15.0% 1.1pts.
Total Americas
Revenue from services
(including fee-based
income) $ 919.4 $ 893.9 2.9% 3.3%
Fee-based income 6.9 5.6 24.1 24.8
Gross profit 138.2 128.0 7.9 8.3
Total SG&A expenses 102.9 102.8 0.1 0.5
Earnings from operations 35.3 25.2 39.8
Gross profit rate 15.0% 14.3% 0.7pts.
Expense rates:
% of revenue 11.2 11.5 (0.3)
% of gross profit 74.5 80.3 (5.8)
Operating margin 3.8 2.8 1.0
EMEA Commercial
Revenue from services
(including fee-based
income) $ 213.0 $ 231.5 (8.0)% (5.7)%
Fee-based income 6.1 5.8 6.1 9.1
Gross profit 33.5 37.2 (10.0) (7.7)
Gross profit rate 15.7% 16.1% (0.4) pts.
EMEA PT
Revenue from services
(including fee-based
income) $ 42.2 $ 41.4 2.0% 4.7%
Fee-based income 4.6 4.4 4.0 6.7
Gross profit 11.3 11.0 2.7 5.5
Gross profit rate 26.8% 26.6% 0.2pts.
Total EMEA
Revenue from services
(including fee-based
income) $ 255.2 $ 272.9 (6.5)% (4.1)%
Fee-based income 10.7 10.2 5.2 8.0
Gross profit 44.8 48.2 (7.1) (4.6)
SG&A expenses excluding
restructuring charges 44.5 45.9 (3.3)
Restructuring charges - 4.0 (100.0)
Total SG&A expenses 44.5 49.9 (11.0) (8.9)
Earnings from operations 0.3 (1.7) NM
Earnings from operations
excluding restructuring
charges 0.3 2.3 (83.4)
Gross profit rate 17.6% 17.7% (0.1) pts.
Expense rates (excluding
restructuring charges):
% of revenue 17.4 16.8 0.6
% of gross profit 99.2 95.3 3.9
Operating margin (excluding
restructuring charges) 0.1 0.8 (0.7)
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
First Quarter
----------------------------------------------
Constant
Currency
2012 2011 Change Change
-------- -------- --------- --------
APAC Commercial
Revenue from services
(including fee-based
income) $ 88.3 $ 99.7 (11.4)% (12.9)%
Fee-based income 3.3 3.5 (5.0) (6.2)
Gross profit 13.1 13.5 (3.1) (5.4)
Gross profit rate 14.8% 13.5% 1.3pts.
APAC PT
Revenue from services
(including fee-based
income) $ 12.8 $ 11.5 12.0% 10.3%
Fee-based income 4.0 3.8 3.9 1.5
Gross profit 5.2 5.0 3.9 1.6
Gross profit rate 40.5% 43.7% (3.2) pts.
Total APAC
Revenue from services
(including fee-based
income) $ 101.1 $ 111.2 (9.0)% (10.5)%
Fee-based income 7.3 7.3 (0.4) (2.2)
Gross profit 18.3 18.5 (1.2) (3.5)
Total SG&A expenses 19.7 19.0 3.3 1.0
Earnings from operations (1.4) (0.5) (158.7)
Gross profit rate 18.1% 16.6% 1.5pts.
Expense rates:
% of revenue 19.4 17.1 2.3
% of gross profit 107.6 102.9 4.7
Operating margin (1.4) (0.5) (0.9)
OCG
Revenue from services
(including fee-based
income) $ 86.7 $ 68.2 27.1% 27.5%
Fee-based income 11.6 8.7 33.6 34.2
Gross profit 23.1 17.0 35.6 36.3
Total SG&A expenses 22.6 19.4 16.5 16.8
Earnings from operations 0.5 (2.4) NM
Gross profit rate 26.7% 25.0% 1.7pts.
Expense rates:
% of revenue 26.1 28.5 (2.4)
% of gross profit 97.8 113.9 (16.1)
Operating margin 0.6 (3.5) 4.1
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)
April 1, January 1, April 3,
2012 2012 2011
----------- ----------- -----------
Current Assets
Cash and equivalents $ 88.3 $ 81.0 $ 59.8
Trade accounts receivable, less
allowances of $12.9, $13.4 and
$13.2, respectively 977.9 944.9 875.8
Prepaid expenses and other current
assets 64.2 50.6 68.4
Deferred taxes 34.3 38.2 17.4
----------- ----------- -----------
Total current assets 1,164.7 1,114.7 1,021.4
Property and Equipment, Net 90.3 90.6 99.5
Noncurrent Deferred Taxes 96.4 94.1 83.9
Goodwill, Net 89.8 90.2 67.3
Other Assets 165.5 152.1 154.9
----------- ----------- -----------
Total Assets $ 1,606.7 $ 1,541.7 $ 1,427.0
=========== =========== ===========
Current Liabilities
Short-term borrowings $ 94.7 $ 96.3 $ 65.4
Accounts payable and accrued
liabilities 275.7 237.2 207.3
Accrued payroll and related taxes 273.8 271.4 270.9
Accrued insurance 30.5 31.5 31.5
Income and other taxes 61.1 61.3 61.7
----------- ----------- -----------
Total current liabilities 735.8 697.7 636.8
Noncurrent Liabilities
Accrued insurance 51.8 53.5 54.1
Accrued retirement benefits 101.5 91.1 90.2
Other long-term liabilities 24.6 23.7 14.2
----------- ----------- -----------
Total noncurrent liabilities 177.9 168.3 158.5
Stockholders' Equity
Common stock 40.1 40.1 40.1
Treasury stock (66.6) (66.9) (70.8)
Paid-in capital 29.8 28.8 29.3
Earnings invested in the business 665.2 657.5 598.7
Accumulated other comprehensive
income 24.5 16.2 34.4
----------- ----------- -----------
Total stockholders' equity 693.0 675.7 631.7
----------- ----------- -----------
Total Liabilities and Stockholders'
Equity $ 1,606.7 $ 1,541.7 $ 1,427.0
=========== =========== ===========
----------------------------------------------------------------------------
STATISTICS:
Working Capital $ 428.9 $ 417.0 $ 384.6
Current Ratio 1.6 1.6 1.6
Debt-to-capital % 12.0% 12.5% 9.4%
Global Days Sales Outstanding 54 52 52
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 13 WEEKS ENDED APRIL 1, 2012 AND APRIL 3, 2011
(UNAUDITED)
(In millions of dollars)
2012 2011
----------- -----------
Cash flows from operating activities
Net earnings $ 9.6 $ 1.1
Noncash adjustments:
Depreciation and amortization 5.7 8.3
Provision for bad debts 0.2 1.2
Stock-based compensation 1.4 1.4
Other, net - (0.1)
Changes in operating assets and liabilities (3.5) (16.9)
----------- -----------
Net cash from operating activities 13.4 (5.0)
----------- -----------
Cash flows from investing activities
Capital expenditures (4.0) (2.5)
Other investing activities (0.4) -
----------- -----------
Net cash from investing activities (4.4) (2.5)
----------- -----------
Cash flows from financing activities
Net change in short-term borrowings (2.3) 48.3
Repayment of debt - (62.9)
Dividend payments (1.9) -
Other financing activities - (1.0)
----------- -----------
Net cash from financing activities (4.2) (15.6)
----------- -----------
Effect of exchange rates on cash and equivalents 2.5 2.4
----------- -----------
Net change in cash and equivalents 7.3 (20.7)
Cash and equivalents at beginning of period 81.0 80.5
----------- -----------
Cash and equivalents at end of period $ 88.3 $ 59.8
=========== ===========
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
First Quarter (Commercial, PT and OCG)
----------------------------------------------
% Change
Constant
2012 2011 US$ Currency
----------- ----------- ---------- ----------
Americas
United States $ 858.5 $ 839.7 2.2% 2.2%
Canada 59.5 59.4 0.2 1.8
Puerto Rico 25.9 22.1 17.3 17.3
Mexico 25.5 25.1 1.5 8.9
Brazil 18.0 - NM NM
----------- -----------
Total Americas 987.4 946.3 4.3 4.8
EMEA
France 62.8 70.0 (10.3) (6.3)
Switzerland 53.6 47.2 13.4 11.1
Russia 33.6 34.2 (1.7) 1.3
United Kingdom 27.7 31.1 (10.9) (9.1)
Germany 18.7 20.3 (7.9) (3.8)
Portugal 18.2 20.6 (11.8) (7.8)
Norway 16.5 15.1 8.8 10.2
Italy 16.3 16.6 (1.8) 2.6
Other 15.6 23.2 (32.7) (29.0)
----------- -----------
Total EMEA 263.0 278.3 (5.5) (3.1)
APAC
Australia 33.9 36.4 (7.1) (11.4)
Singapore 24.2 26.1 (7.2) (8.1)
Malaysia 17.8 17.6 1.3 1.7
New Zealand 13.1 11.5 15.0 6.2
India 9.5 17.6 (46.1) (40.2)
Other 5.9 5.3 11.3 11.1
----------- -----------
Total APAC 104.4 114.5 (8.7) (10.3)
Total Kelly Services, Inc. $ 1,354.8 $ 1,339.1 1.2% 1.9%
=========== ===========
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
(In millions of dollars except per share data)
First Quarter
---------------------
2012 2011
---------- ----------
Pretax earnings from operations $ 14.7 $ 1.6
Restructuring charges (Note 1) - 4.0
---------- ----------
Earnings from operations
excluding restructuring charges $ 14.7 $ 5.6
========== ==========
First Quarter
-------------------------------------------
2012 2011
--------------------- ---------------------
Amount Per Share Amount Per Share
---------- ---------- ---------- ----------
Earnings from continuing
operations $ 9.2 $ 0.24 $ 1.1 $ 0.03
Restructuring charges, net of
taxes (Note 1) - - 4.0 0.11
---------- ----------
Earnings from continuing
operations excluding
restructuring charges, net of
taxes $ 9.2 $ 0.24 $ 5.1 $ 0.14
========== ========== ========== ==========
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
charges is useful to understand the Company's fiscal 2012 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) Restructuring costs relate primarily to revisions of the estimated lease termination costs for EMEA Commercial
branches that closed in prior years.
ANALYST CONTACT: James Polehna (248) 244-4586
james_polehna@kellyservices.com MEDIA CONTACT: Jane Stehney (248)
244-5630 jane_stehney@kellyservices.com
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