Financial Highlights
Kelly Services (Nasdaq:KELYA) (Nasdaq:KELYB), a global leader in
providing workforce solutions, today announced results for the
fourth quarter and full year of 2017.
George S. Corona, President and Chief Executive Officer,
announced revenue for the fourth quarter of 2017 totaled $1.4
billion, a 9.0% increase, or 7.3% in constant currency, compared to
the corresponding quarter of 2016. Revenue for the full year
totaled $5.4 billion, a 1.9% increase, or 1.3% in constant
currency, compared to the prior year. For the full year,
revenue comparisons are unfavorably impacted by the transfer of the
APAC staffing operations to the PersolKelly Asia Pacific JV (the
"JV") in the third quarter of 2016 after which the JV is
accounted for as an equity method investment.
Earnings from operations for the fourth quarter of 2017 totaled
$28.4 million, compared to $19.8 million reported for the fourth
quarter of 2016. Earnings from operations for the full year totaled
$83.3 million compared to $63.2 million in 2016.
Diluted earnings per share in the fourth quarter of 2017 were
$0.45 compared to $0.51 per share in the fourth quarter of 2016.
Earnings per share in the fourth quarter of 2017 were unfavorably
impacted by $0.35 due to a non-cash, income tax charge resulting
from the Tax Cuts and Jobs Act which was enacted in late 2017.
Diluted earnings per share for the full year of 2017 were $1.81
compared to $3.08 per share in 2016. Full year earnings per share
for 2017 were unfavorably impacted by the $0.35 non-cash, tax
charge and 2016 full year earnings per share were favorably
impacted by $1.62 related to the after-tax gain on APAC JV
transaction. The impact of these adjustments are more fully
described in our reconciliation of non-GAAP measures included on
page 11.
Reflecting on the results, Corona stated, “Our fourth quarter
performance reinforces that 2017 was a successful year of focus and
acceleration for Kelly. We created and carried strong momentum
through all four quarters, grew the top line, improved our GP and
conversion rate, and increased our earnings from operations by 32%
over last year — all while accelerating investments that position
Kelly for long-term
growth.”
In conjunction with its fourth quarter earnings release, Kelly
Services has published a financial presentation on the Investor
Relations page of our public website and will host a conference
call at 9:00 a.m. (ET) on February 1 to review the results and
answer questions. The call may be accessed in one of the following
ways:
Via the Internet:Kellyservices.com
Via the Telephone:U.S.
1 800
288-9626International
1 651 291-5254The pass code is Kelly Services
This release contains statements that are forward looking in
nature and, accordingly, are subject to risks and
uncertainties. These factors include, but are not limited to,
competitive market pressures including pricing and technology
introductions and disruptions, changing market and economic
conditions, our ability to achieve our business strategy, the risk
of damage to our brand, the risk our intellectual property assets
could be infringed upon or compromised, our ability to successfully
develop new service offerings, our exposure to risks associated
with services outside traditional staffing, including business
process outsourcing, our increasing dependency on third parties for
the execution of critical functions, the risks associated with past
and future acquisitions, exposure to risks associated with
investments in equity affiliates including PersolKelly Asia
Pacific, material changes in demand from or loss of large corporate
customers as well as changes in their buying practices, risks
associated with conducting business in foreign countries, including
foreign currency fluctuations, availability of full-time employees
to lead complex talent supply chain sales and operations,
availability of temporary workers with appropriate skills required
by customers, liabilities for employment-related claims and losses,
including class action lawsuits and collective actions, risks
arising from failure to preserve the privacy of information
entrusted to us or to meet our obligations under global privacy
laws, the risk of cyber attacks or other breaches of network or
information technology security, our ability to sustain critical
business applications through our key data centers, our ability to
effectively implement and manage our information technology
programs, our ability to maintain adequate financial and management
processes and controls, impairment charges triggered by adverse
industry developments or operational circumstances, unexpected
changes in claim trends on workers’ compensation, unemployment
compensation, disability and medical benefit plans, the impact of
changes in laws and regulations (including federal, state and
international tax laws), the risk of additional tax or unclaimed
property liabilities in excess of our estimates, our ability to
maintain specified financial covenants in our bank facilities to
continue to access credit markets, and other risks, uncertainties
and factors discussed in this release and in the Company’s
filings with the Securities and Exchange Commission. Actual
results may differ materially from any forward looking statements
contained herein, and we have no intention to update these
statements.
About Kelly Services®
As a global leader in providing workforce solutions, Kelly
Services, Inc. (Nasdaq:KELYA) (Nasdaq:KELYB) and its subsidiaries,
offer a comprehensive array of outsourcing and consulting services
as well as world-class staffing on a temporary, temporary-to-hire,
and direct-hire basis. Kelly® directly employs nearly 500,000
people around the world in addition to having a role in connecting
thousands more with work through its global network of talent
suppliers and partners. Revenue in 2017 was $5.4 billion.
Visit kellyservices.com and connect with us
on Facebook, LinkedIn, & Twitter.
KLYA-FIN
ANALYST CONTACT:James
Polehna (248)
244-4586 james_polehna@kellyservices.com |
MEDIA CONTACT:Jane
Stehney (248) 574-9800 jane_stehney@kellyservices.com |
KELLY SERVICES, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
EARNINGS |
FOR THE 13 WEEKS ENDED DECEMBER 31, 2017 AND
JANUARY 1, 2017 |
(UNAUDITED) |
(In millions of dollars except per share data) |
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2017 |
|
2016 |
|
Change |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services |
$ |
1,422.3 |
|
$ |
1,304.4 |
|
$ |
117.9 |
|
9.0 |
% |
7.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
1,159.3 |
|
|
1,076.4 |
|
|
82.9 |
|
7.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
263.0 |
|
|
228.0 |
|
|
35.0 |
|
15.4 |
|
13.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
234.6 |
|
|
208.2 |
|
|
26.4 |
|
12.7 |
|
11.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from
operations |
|
28.4 |
|
|
19.8 |
|
|
8.6 |
|
43.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
0.9 |
|
|
0.7 |
|
|
0.2 |
|
43.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
taxes and equity in net earnings (loss) of affiliate |
|
29.3 |
|
|
20.5 |
|
|
8.8 |
|
43.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
12.7 |
|
|
1.8 |
|
|
10.9 |
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
before equity in net earnings (loss) of affiliate |
|
16.6 |
|
|
18.7 |
|
|
(2.1) |
|
(10.9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings
(loss) of affiliate |
|
1.1 |
|
|
1.1 |
|
|
— |
|
(9.4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings |
$ |
17.7 |
|
$ |
19.8 |
|
$ |
(2.1) |
|
(10.8) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share |
$ |
0.46 |
|
$ |
0.51 |
|
$ |
(0.05) |
|
(9.8) |
% |
|
|
Diluted
earnings per share |
$ |
0.45 |
|
$ |
0.51 |
|
$ |
(0.06) |
|
(11.8) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Staffing fee-based
income (included in revenue from services) |
$ |
15.9 |
|
$ |
12.2 |
|
$ |
3.7 |
|
30.6 |
% |
26.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
18.5 |
|
% |
17.5 |
|
% |
1.0 |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion rate |
|
10.8 |
|
|
8.7 |
|
|
2.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Return: |
|
|
|
|
|
|
|
|
|
|
|
Earnings
from operations |
|
2.0 |
|
|
1.5 |
|
|
0.5 |
|
|
|
|
|
Net
earnings |
|
1.2 |
|
|
1.5 |
|
|
(0.3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate |
|
43.2 |
|
% |
8.8 |
|
% |
34.4 |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (millions): |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
38.4 |
|
|
38.2 |
|
|
|
|
|
|
|
|
Diluted |
|
39.2 |
|
|
38.6 |
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
EARNINGS |
FOR THE 52 WEEKS ENDED DECEMBER 31, 2017 AND
JANUARY 1, 2017 |
(UNAUDITED) |
(In millions of dollars except per share data) |
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2017 |
|
2016 |
|
Change |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from
services |
$ |
5,374.4 |
|
$ |
5,276.8 |
|
$ |
97.6 |
|
1.9 |
% |
1.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
4,420.3 |
|
|
4,370.5 |
|
|
49.8 |
|
1.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
954.1 |
|
|
906.3 |
|
|
47.8 |
|
5.3 |
|
4.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
870.8 |
|
|
843.1 |
|
|
27.7 |
|
3.3 |
|
2.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from
operations |
|
83.3 |
|
|
63.2 |
|
|
20.1 |
|
31.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on investment in
PersolKelly Asia Pacific |
|
— |
|
|
87.2 |
|
|
(87.2) |
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense, net |
|
(1.6 |
) |
|
(0.7 |
) |
|
(0.9) |
|
(139.3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
taxes and equity in net earnings (loss) of affiliate |
|
81.7 |
|
|
149.7 |
|
|
(68.0) |
|
(45.5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
12.8 |
|
|
30.0 |
|
|
(17.2) |
|
(57.3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
before equity in net earnings (loss) of affiliate |
|
68.9 |
|
|
119.7 |
|
|
(50.8) |
|
(42.5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings
(loss) of affiliate |
|
2.7 |
|
|
1.1 |
|
|
1.6 |
|
142.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings |
$ |
71.6 |
|
$ |
120.8 |
|
$ |
(49.2) |
|
(40.8) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share |
$ |
1.84 |
|
$ |
3.10 |
|
$ |
(1.26) |
|
(40.6) |
% |
|
|
Diluted
earnings per share |
$ |
1.81 |
|
$ |
3.08 |
|
$ |
(1.27) |
|
(41.2) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Staffing fee-based
income (included in revenue from services) |
$ |
57.3 |
|
$ |
58.5 |
|
$ |
(1.2) |
|
(2.2) |
% |
(3.7) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
17.8 |
|
% |
17.2 |
|
% |
0.6 |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion rate |
|
8.7 |
|
|
7.0 |
|
|
1.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Return: |
|
|
|
|
|
|
|
|
|
|
|
Earnings
from operations |
|
1.5 |
|
|
1.2 |
|
|
0.3 |
|
|
|
|
|
Net
earnings |
|
1.3 |
|
|
2.3 |
|
|
(1.0) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate |
|
15.7 |
|
% |
20.0 |
|
% |
(4.3) |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (millions): |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
38.3 |
|
|
38.1 |
|
|
|
|
|
|
|
|
Diluted |
|
39.0 |
|
|
38.4 |
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
RESULTS OF OPERATIONS BY SEGMENT |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2017 |
|
|
2016 |
|
Change |
|
Change |
|
AMERICAS
STAFFING |
|
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
642.4 |
|
|
$ |
576.9 |
|
|
11.4 |
% |
|
10.9 |
% |
|
Gross
profit |
|
121.2 |
|
|
|
105.3 |
|
|
15.1 |
|
|
14.7 |
|
|
Total
SG&A expenses |
|
93.4 |
|
|
|
83.5 |
|
|
12.0 |
|
|
11.7 |
|
|
Earnings
from operations |
|
27.8 |
|
|
|
21.8 |
|
|
27.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
18.9 |
% |
|
|
18.3 |
% |
|
0.6 |
pts. |
|
|
|
Conversion rate |
|
22.8 |
|
|
|
20.7 |
|
|
2.1 |
|
|
|
|
Return on
sales |
|
4.3 |
|
|
|
3.8 |
|
|
0.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLOBAL TALENT
SOLUTIONS |
|
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
503.1 |
|
|
$ |
490.6 |
|
|
2.6 |
% |
|
2.2 |
% |
|
Gross
profit |
|
101.5 |
|
|
|
88.7 |
|
|
14.5 |
|
|
13.8 |
|
|
Total
SG&A expenses |
|
75.9 |
|
|
|
74.1 |
|
|
2.5 |
|
|
1.8 |
|
|
Earnings
from operations |
|
25.6 |
|
|
|
14.6 |
|
|
75.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
20.2 |
% |
|
|
18.1 |
% |
|
2.1 |
pts. |
|
|
|
Conversion rate |
|
25.3 |
|
|
|
16.5 |
|
|
8.8 |
|
|
|
|
Return on
sales |
|
5.1 |
|
|
|
3.0 |
|
|
2.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERNATIONAL
STAFFING |
|
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
282.2 |
|
|
$ |
241.5 |
|
|
16.9 |
% |
|
9.1 |
% |
|
Gross
profit |
|
41.0 |
|
|
|
35.0 |
|
|
17.0 |
|
|
9.0 |
|
|
Total
SG&A expenses |
|
35.4 |
|
|
|
30.6 |
|
|
15.4 |
|
|
8.4 |
|
|
Earnings
from operations |
|
5.6 |
|
|
|
4.4 |
|
|
27.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
14.5 |
% |
|
|
14.5 |
% |
|
— |
pts. |
|
|
|
Conversion rate |
|
13.8 |
|
|
|
12.6 |
|
|
1.2 |
|
|
|
|
Return on
sales |
|
2.0 |
|
|
|
1.8 |
|
|
0.2 |
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
RESULTS OF OPERATIONS BY SEGMENT |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
December Year to Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2017 |
|
|
2016 |
|
Change |
|
Change |
|
AMERICAS
STAFFING |
|
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
2,345.9 |
|
|
$ |
2,191.6 |
|
|
7.0 |
% |
|
6.8 |
% |
|
Gross
profit |
|
429.1 |
|
|
|
398.2 |
|
|
7.8 |
|
|
7.6 |
|
|
SG&A
expenses excluding restructuring charges |
|
346.0 |
|
|
|
327.6 |
|
|
5.7 |
|
|
5.5 |
|
|
Restructuring charges |
|
0.4 |
|
|
|
1.8 |
|
|
(80.0 |
) |
|
(79.8 |
) |
|
Total
SG&A expenses |
|
346.4 |
|
|
|
329.4 |
|
|
5.2 |
|
|
5.0 |
|
|
Earnings
from operations |
|
82.7 |
|
|
|
68.8 |
|
|
20.0 |
|
|
|
|
Earnings
from operations excluding restructuring charges |
|
83.1 |
|
|
|
70.6 |
|
|
17.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
18.3 |
% |
|
|
18.2 |
% |
|
0.1 |
pts. |
|
|
|
Conversion rate |
|
19.3 |
|
|
|
17.3 |
|
|
2.0 |
|
|
|
|
Conversion rate excluding restructuring charges |
|
19.3 |
|
|
|
17.7 |
|
|
1.6 |
|
|
|
|
Return on
sales |
|
3.5 |
|
|
|
3.1 |
|
|
0.4 |
|
|
|
|
Return on
sales excluding restructuring charges |
|
3.5 |
|
|
|
3.2 |
|
|
0.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLOBAL TALENT
SOLUTIONS |
|
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
1,998.9 |
|
|
$ |
1,977.1 |
|
|
1.1 |
% |
|
1.0 |
% |
|
Gross
profit |
|
373.7 |
|
|
|
345.9 |
|
|
8.1 |
|
|
7.9 |
|
|
SG&A
expenses excluding restructuring charges |
|
294.7 |
|
|
|
287.3 |
|
|
2.6 |
|
|
2.5 |
|
|
Restructuring charges |
|
2.0 |
|
|
|
0.4 |
|
|
415.5 |
|
|
417.6 |
|
|
Total
SG&A expenses |
|
296.7 |
|
|
|
287.7 |
|
|
3.1 |
|
|
3.0 |
|
|
Earnings
from operations |
|
77.0 |
|
|
|
58.2 |
|
|
32.4 |
|
|
|
|
Earnings
from operations excluding restructuring charges |
|
79.0 |
|
|
|
58.6 |
|
|
35.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
18.7 |
% |
|
|
17.5 |
% |
|
1.2 |
pts. |
|
|
|
Conversion rate |
|
20.6 |
|
|
|
16.8 |
|
|
3.8 |
|
|
|
|
Conversion rate excluding restructuring charges |
|
21.1 |
|
|
|
16.9 |
|
|
4.2 |
|
|
|
|
Return on
sales |
|
3.9 |
|
|
|
2.9 |
|
|
1.0 |
|
|
|
|
Return on
sales excluding restructuring charges |
|
4.0 |
|
|
|
3.0 |
|
|
1.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERNATIONAL
STAFFING |
|
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
1,048.2 |
|
|
$ |
1,127.1 |
|
|
(7.0 |
) % |
|
(9.0 |
) % |
|
Gross
profit |
|
153.7 |
|
|
|
166.4 |
|
|
(7.7 |
) |
|
(9.8 |
) |
|
SG&A
expenses excluding restructuring charges |
|
131.6 |
|
|
|
145.7 |
|
|
(9.8 |
) |
|
(11.6 |
) |
|
Restructuring charges |
|
— |
|
|
|
1.2 |
|
|
(100.0 |
) |
|
(100.0 |
) |
|
Total
SG&A expenses |
|
131.6 |
|
|
|
146.9 |
|
|
(10.4 |
) |
|
(12.2 |
) |
|
Earnings
from operations |
|
22.1 |
|
|
|
19.5 |
|
|
13.3 |
|
|
|
|
Earnings
from operations excluding restructuring charges |
|
22.1 |
|
|
|
20.7 |
|
|
7.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
14.7 |
% |
|
|
14.8 |
% |
|
(0.1 |
) pts. |
|
|
|
Conversion rate |
|
14.4 |
|
|
|
11.7 |
|
|
2.7 |
|
|
|
|
Conversion rate excluding restructuring charges |
|
14.4 |
|
|
|
12.4 |
|
|
2.0 |
|
|
|
|
Return on
sales |
|
2.1 |
|
|
|
1.7 |
|
|
0.4 |
|
|
|
|
Return on
sales excluding restructuring charges |
|
2.1 |
|
|
|
1.8 |
|
|
0.3 |
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS |
|
(UNAUDITED) |
|
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
December 31, 2017 |
|
Jan. 1, 2017 |
|
|
Current Assets |
|
|
|
|
|
|
Cash
and equivalents |
$ |
33.3 |
|
$ |
29.6 |
|
|
|
Trade accounts receivable, less allowances of |
|
|
|
|
|
|
$12.9 and $12.5, respectively |
|
1,284.0 |
|
|
1,138.3 |
|
|
|
Prepaid expenses and other current assets |
|
65.1 |
|
|
46.7 |
|
|
|
Total
current assets |
|
1,382.4 |
|
|
1,214.6 |
|
|
|
|
|
|
|
|
|
|
Noncurrent Assets |
|
|
|
|
|
|
Property and equipment, net |
|
86.1 |
|
|
80.8 |
|
|
|
Deferred taxes |
|
183.4 |
|
|
180.1 |
|
|
|
Goodwill, net |
|
107.1 |
|
|
88.4 |
|
|
|
Investment in equity affiliate |
|
117.4 |
|
|
114.8 |
|
|
|
Other assets |
|
499.9 |
|
|
349.4 |
|
|
|
Total
noncurrent assets |
|
993.9 |
|
|
813.5 |
|
|
|
|
|
|
|
|
|
|
Total Assets |
$ |
2,376.3 |
|
|
$ |
2,028.1 |
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
Short-term borrowings |
$ |
10.2 |
|
|
$ |
— |
|
|
|
Accounts payable and accrued liabilities |
|
534.1 |
|
|
455.1 |
|
|
|
Accrued payroll and related taxes |
|
287.6 |
|
|
241.5 |
|
|
|
Accrued insurance |
|
25.7 |
|
|
23.4 |
|
|
|
Income and other taxes |
|
66.7 |
|
|
51.1 |
|
|
|
Total
current liabilities |
|
924.3 |
|
|
771.1 |
|
|
|
|
|
|
|
|
|
|
Noncurrent Liabilities |
|
|
|
|
|
|
Accrued insurance |
|
49.9 |
|
|
45.5 |
|
|
|
Accrued retirement benefits |
|
178.1 |
|
|
157.4 |
|
|
|
Other long-term liabilities |
|
72.5 |
|
|
42.1 |
|
|
|
Total
noncurrent liabilities |
|
300.5 |
|
|
245.0 |
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
|
|
|
|
|
Common stock |
|
40.1 |
|
|
40.1 |
|
|
|
Treasury stock |
|
(35.2 |
) |
|
(39.0 |
) |
|
|
Paid-in capital |
|
32.2 |
|
|
28.6 |
|
|
|
Earnings invested in the business |
|
983.6 |
|
|
923.6 |
|
|
|
Accumulated other comprehensive income |
|
130.8 |
|
|
58.7 |
|
|
|
|
|
|
|
|
|
|
Total
stockholders' equity |
|
1,151.5 |
|
|
1,012.0 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity |
$ |
2,376.3 |
|
|
$ |
2,028.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
Working Capital |
$ |
458.1 |
|
$ |
443.5 |
|
|
|
Current Ratio |
|
1.5 |
|
|
1.6 |
|
|
|
Debt-to-capital % |
|
0.9 |
% |
|
— |
% |
|
|
Global Days Sales Outstanding |
|
55 |
|
|
53 |
|
|
|
Year-to-Date Free Cash Flow |
$ |
47.4 |
|
|
$ |
26.9 |
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
FOR THE 52 WEEKS ENDED DECEMBER 31, 2017 AND
JANUARY 1, 2017 |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
2017 |
|
2016 |
Cash flows from
operating activities: |
|
|
|
|
Net
earnings |
$ |
71.6 |
|
$ |
120.8 |
|
Noncash
adjustments: |
|
|
|
|
Depreciation and amortization |
|
22.7 |
|
|
21.3 |
|
Provision
for bad debts |
|
5.6 |
|
|
11.0 |
|
Stock-based compensation |
|
9.2 |
|
|
10.2 |
|
Gain on
investment in PersolKelly Asia Pacific equity affiliate |
|
— |
|
|
(87.2 |
) |
Other,
net |
|
(2.5 |
) |
|
(3.9 |
) |
Changes
in operating assets and liabilities |
|
(36.3 |
) |
|
(32.6 |
) |
|
|
|
|
|
Net cash from operating activities |
|
70.3 |
|
|
39.6 |
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
Capital
expenditures |
|
(22.9 |
) |
|
(12.7 |
) |
Acquisition of company, net of cash received |
|
(37.2 |
) |
|
— |
|
Net cash
proceeds from investment in PersolKelly Asia Pacific equity
affiliate |
|
— |
|
|
23.3 |
|
Proceeds
from repayment of loan to PersolKelly equity affiliate |
|
0.6 |
|
|
— |
|
Other
investing activities |
|
0.2 |
|
|
(0.3 |
) |
|
|
|
|
|
Net cash (used in) from investing activities |
|
(59.3 |
) |
|
10.3 |
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
Net
change in short-term borrowings |
|
10.1 |
|
|
(55.9 |
) |
Dividend
payments |
|
(11.6 |
) |
|
(10.7 |
) |
Payments
of tax withholding for restricted shares |
|
(1.8 |
) |
|
(2.2 |
) |
Other
financing activities |
|
(0.1 |
) |
|
(0.3 |
) |
|
|
|
|
|
Net cash used in financing activities |
|
(3.4 |
) |
|
(69.1 |
) |
|
|
|
|
|
Effect of
exchange rates on cash and equivalents |
|
(3.9 |
) |
|
6.6 |
|
|
|
|
|
|
Net change in
cash and equivalents |
|
3.7 |
|
|
(12.6 |
) |
Cash and
equivalents at beginning of period |
|
29.6 |
|
|
42.2 |
|
|
|
|
|
|
|
|
|
|
|
Cash and
equivalents at end of period |
$ |
33.3 |
|
$ |
29.6 |
|
|
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
REVENUE FROM SERVICES |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter (Americas, International and
GTS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2017 |
|
2016 |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
United
States |
$ |
1,027.8 |
|
$ |
956.7 |
|
|
7.4 |
% |
|
7.4 |
% |
|
Canada |
|
34.5 |
|
|
34.5 |
|
|
(0.1 |
) |
|
(5.0 |
) |
|
Mexico |
|
33.8 |
|
|
28.0 |
|
|
20.9 |
|
|
15.5 |
|
|
Puerto
Rico |
|
17.1 |
|
|
18.3 |
|
|
(6.6 |
) |
|
(6.6 |
) |
|
Brazil |
|
10.3 |
|
|
13.3 |
|
|
(22.8 |
) |
|
(24.6 |
) |
|
Total
Americas |
|
1,123.5 |
|
|
1,050.8 |
|
|
6.9 |
|
|
6.6 |
|
|
|
|
|
|
|
|
|
|
|
|
EMEA |
|
|
|
|
|
|
|
|
|
France |
|
75.0 |
|
|
61.1 |
|
|
22.7 |
|
|
12.3 |
|
|
Switzerland |
|
55.6 |
|
|
54.3 |
|
|
2.5 |
|
|
1.1 |
|
|
Portugal |
|
52.0 |
|
|
40.3 |
|
|
29.3 |
|
|
18.3 |
|
|
United
Kingdom |
|
24.4 |
|
|
18.5 |
|
|
32.2 |
|
|
23.7 |
|
|
Russia |
|
23.9 |
|
|
20.9 |
|
|
14.3 |
|
|
6.1 |
|
|
Germany |
|
16.6 |
|
|
14.3 |
|
|
16.6 |
|
|
6.7 |
|
|
Italy |
|
16.6 |
|
|
14.2 |
|
|
17.0 |
|
|
7.1 |
|
|
Ireland |
|
8.6 |
|
|
7.7 |
|
|
10.8 |
|
|
1.5 |
|
|
Norway |
|
8.4 |
|
|
8.0 |
|
|
4.3 |
|
|
1.5 |
|
|
Other |
|
13.0 |
|
|
10.3 |
|
|
26.3 |
|
|
15.5 |
|
|
Total
EMEA |
|
294.1 |
|
|
249.6 |
|
|
17.9 |
|
|
10.0 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
APAC |
|
4.7 |
|
|
4.0 |
|
|
16.3 |
|
|
13.0 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Kelly
Services, Inc. |
$ |
1,422.3 |
|
$ |
1,304.4 |
|
|
9.0 |
% |
|
7.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
REVENUE FROM SERVICES |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
December Year to Date (Americas, International
and GTS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2017 |
|
2016 |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
United
States |
$ |
3,894.6 |
|
$ |
3,722.5 |
|
|
4.6 |
% |
|
4.6 |
% |
|
Canada |
|
140.3 |
|
|
139.7 |
|
|
0.4 |
|
|
(1.6 |
) |
|
Mexico |
|
118.8 |
|
|
107.6 |
|
|
10.5 |
|
|
10.8 |
|
|
Puerto
Rico |
|
68.3 |
|
|
84.2 |
|
|
(18.9 |
) |
|
(18.9 |
) |
|
Brazil |
|
48.6 |
|
|
46.8 |
|
|
3.8 |
|
|
(5.8 |
) |
|
Total
Americas |
|
4,270.6 |
|
|
4,100.8 |
|
|
4.1 |
|
|
4.0 |
|
|
|
|
|
|
|
|
|
|
|
|
EMEA |
|
|
|
|
|
|
|
|
|
France |
|
277.1 |
|
|
239.7 |
|
|
15.6 |
|
|
13.0 |
|
|
Switzerland |
|
216.9 |
|
|
210.5 |
|
|
3.1 |
|
|
3.0 |
|
|
Portugal |
|
176.0 |
|
|
151.9 |
|
|
15.9 |
|
|
13.0 |
|
|
Russia |
|
93.2 |
|
|
69.9 |
|
|
33.3 |
|
|
16.9 |
|
|
United
Kingdom |
|
88.7 |
|
|
84.7 |
|
|
4.8 |
|
|
9.6 |
|
|
Italy |
|
61.9 |
|
|
56.3 |
|
|
10.0 |
|
|
7.5 |
|
|
Germany |
|
59.9 |
|
|
59.6 |
|
|
0.6 |
|
|
(1.7 |
) |
|
Norway |
|
33.3 |
|
|
32.4 |
|
|
2.7 |
|
|
1.1 |
|
|
Ireland |
|
32.0 |
|
|
25.8 |
|
|
23.9 |
|
|
21.3 |
|
|
Other |
|
46.5 |
|
|
38.1 |
|
|
22.2 |
|
|
19.1 |
|
|
Total
EMEA |
|
1,085.5 |
|
|
968.9 |
|
|
12.1 |
|
|
9.7 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
APAC |
|
18.3 |
|
|
207.1 |
|
|
(91.2 |
) |
|
(91.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total Kelly
Services, Inc. |
$ |
5,374.4 |
|
$ |
5,276.8 |
|
|
1.9 |
% |
|
1.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
RECONCILIATION OF NON-GAAP
MEASURES |
FOR THE 13 AND 52 WEEKS ENDED DECEMBER 31,
2017 AND JANUARY 1, 2017 |
(UNAUDITED) |
(In millions of dollars except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter |
|
December Year to Date |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
Revenue from
services |
|
$ |
1,422.3 |
|
|
$ |
1,304.4 |
|
|
$ |
5,374.4 |
|
|
$ |
5,276.8 |
|
Disposal of APAC
businesses (Note 1) |
|
— |
|
|
— |
|
|
— |
|
|
(191.1 |
) |
Adjusted revenue from
services |
|
$ |
1,422.3 |
|
|
$ |
1,304.4 |
|
|
$ |
5,374.4 |
|
|
$ |
5,085.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter |
|
December Year to Date |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
263.0 |
|
|
$ |
228.0 |
|
|
$ |
954.1 |
|
|
$ |
906.3 |
|
Disposal of APAC
businesses (Note 1) |
|
— |
|
|
— |
|
|
— |
|
|
(30.2 |
) |
Adjusted gross
profit |
|
$ |
263.0 |
|
|
$ |
228.0 |
|
|
$ |
954.1 |
|
|
$ |
876.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter |
|
December Year to Date |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
Earnings from
operations |
|
$ |
28.4 |
|
|
$ |
19.8 |
|
|
$ |
83.3 |
|
|
$ |
63.2 |
|
Disposal of APAC
businesses (Note 1) |
|
— |
|
|
— |
|
|
— |
|
|
(5.9 |
) |
Restructuring charges
(Note 2) |
|
— |
|
|
— |
|
|
2.4 |
|
|
3.4 |
|
Adjusted earnings from
operations |
|
$ |
28.4 |
|
|
$ |
19.8 |
|
|
$ |
85.7 |
|
|
$ |
60.7 |
|
|
|
Fourth Quarter |
|
|
2017 |
|
2016 |
|
|
Amount |
|
Per Share |
|
Amount |
|
Per Share |
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
17.7 |
|
|
$ |
0.45 |
|
|
$ |
19.8 |
|
|
$ |
0.51 |
|
2017 U.S. tax law
change (Note 3) |
|
13.9 |
|
|
0.35 |
|
|
— |
|
|
— |
|
Adjusted net
earnings |
|
$ |
31.6 |
|
|
$ |
0.80 |
|
|
$ |
19.8 |
|
|
$ |
0.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December Year to Date |
|
|
2017 |
|
2016 |
|
|
Amount |
|
Per Share |
|
Amount |
|
Per Share |
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
71.6 |
|
|
$ |
1.81 |
|
|
$ |
120.8 |
|
|
$ |
3.08 |
|
Disposal of APAC
businesses (Note 1) |
|
— |
|
|
— |
|
|
(4.5 |
) |
|
(0.12 |
) |
Restructuring charges,
net of taxes (Note 2) |
|
1.7 |
|
|
0.04 |
|
|
2.2 |
|
|
0.06 |
|
2017 U.S. tax law
change (Note 3) |
|
13.9 |
|
|
0.35 |
|
|
— |
|
|
— |
|
Gain on investment in
equity affiliate, net of taxes (Note 4) |
|
— |
|
|
— |
|
|
(63.7 |
) |
|
(1.62 |
) |
Adjusted net
earnings |
|
$ |
87.2 |
|
|
$ |
2.20 |
|
|
$ |
54.8 |
|
|
$ |
1.40 |
|
Note: Earnings per share amounts for each quarter are required
to be computed independently and may not equal the amounts computed
for the total year.
KELLY SERVICES, INC. AND
SUBSIDIARIESRECONCILIATION OF NON-GAAP
MEASURES(UNAUDITED)
Management believes that the non-GAAP (Generally Accepted
Accounting Principles) information excluding the 2016 disposal of
APAC businesses, 2017 and 2016 restructuring charges, the effect of
the 2017 U.S. tax law change and the 2016 gain on investment of
equity affiliate is useful to understand the Company's fiscal 2017
financial performance and increases comparability.
Specifically, Management believes that removing the impact of these
items allows for a more meaningful comparison of current period
operating performance with the operating results of prior
periods. These non-GAAP measures may have limitations as
analytical tools because they exclude items which can have a
material impact on cash flow and earnings per share. As a
result, Management considers these measures, along with reported
results, when it reviews and evaluates the Company's financial
performance. Management believes that these measures provide
greater transparency to investors and provide insight into how
Management is evaluating the Company's financial performance.
Non-GAAP measures should not be considered a substitute for, or
superior to, measures of financial performance prepared in
accordance with GAAP.
(1) Disposal of APAC businesses represents the 2016
operational results of business contributed to PersolKelly Asia
Pacific in the third quarter of 2016.
(2) Restructuring charges in 2017 represent costs related
primarily to optimizing our GTS service delivery models to deliver
expected cost savings. Restructuring charges in 2016 include
costs related to actions taken in the Americas and International
regions designed to increase operational efficiency and align our
staffing operations with opportunities for growth within their
markets.
(3) 2017 U.S. tax law change represents the impact of
revaluing net deferred tax assets.
(4) Gain on investment in equity affiliate represents the
difference between the fair value and book value of amounts
contributed by the Company to the investment in PersolKelly Asia
Pacific in the third quarter of 2016.
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