Financial Highlights
Kelly Services (Nasdaq: KELYA) (Nasdaq: KELYB), a global leader in
providing workforce solutions, today announced results for the
first quarter of 2019.
George S. Corona, President and Chief Executive Officer,
announced revenue for the first quarter of 2019 totaled $1.4
billion, a 0.9% increase, or 2.9% in constant currency, compared to
the corresponding quarter of 2018. First quarter 2019 results
include the impact of the January 2019 acquisitions of NextGen and
Global Technology Associates, providers of specialty engineering
talent to the U.S. telecommunications industry. Excluding the
recent acquisitions, adjusted revenue declined 1.7% in the first
quarter, or increased 0.3% in constant
currency.
Earnings from operations for the first quarter of 2019 totaled
$16.8 million, compared to the $12.0 million reported for the first
quarter of 2018. Included in earnings from operations in the
first quarter of 2019 is a $6.3 million restructuring charge
related to revitalizing the Americas Staffing delivery model.
Excluding the restructuring charges and recent acquisitions,
adjusted earnings from operations totaled $20.8 million, up 74%
compared to the same period in 2018.
Diluted earnings per share in the first quarter of 2019 were
$0.56 compared to earnings per share of $0.74 in the first quarter
of 2018. Included in earnings per share in the first quarter of
2019 is the favorable impact of $0.23 due to the non-cash after-tax
gain on our investment in Persol Holdings common stock compared to
$0.42 in the first quarter of 2018. Changes in the fair value
of our investment in Persol Holdings common stock are reflected as
gains or losses on our Consolidated Statement of Earnings below
earnings from operations. Adjusted for the net of tax impact
of restructuring charges, recent acquisitions and gain on Persol
Holdings common stock, diluted earnings per share for the quarter
were $0.40 compared to $0.32 in the corresponding quarter of
2018.
“We started the year strong from both a financial performance
perspective and a strategic one,” Corona said. “We delivered on the
bottom line and we invested in our future by restructuring our U.S.
branch operations and completing the integration of two high-margin
acquisitions,” he said. “Completing these two strategic priorities
placed us in a stronger position for future growth.”
In conjunction with its first 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 May 6 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. |
1 800 288-9626 |
International |
1 651 291-5254 |
The 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
particular to doing business with the government or government
contractors, risks associated with conducting business in foreign
countries, including foreign currency fluctuations, the exposure to
potential market and currency exchange risks relating to our
investment in Persol Holdings, risks associated with violations of
anti-corruption, trade protection and other laws and regulations,
availability of qualified full-time employees, 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
projects, our ability to maintain adequate financial and management
processes and controls, risk of potential impairment charges
triggered by adverse industry developments or operational
circumstances, unexpected changes in claim trends on workers’
compensation, unemployment, disability and medical benefit plans,
the impact of changes in laws and regulations (including federal,
state and international tax laws), competition law risks, the risk
of additional tax or unclaimed property liabilities in excess of
our estimates, our ability to realize value from our tax credit and
net operating loss carryforwards, 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®Kelly Services,
Inc. (Nasdaq: KELYA, KELYB) connects talented people to
companies in need of their skills in areas including Science,
Engineering, Education, Office, Contact Center, Light Industrial,
and more. We’re always thinking about what’s next in the evolving
world of work, and we help people ditch the script on old ways of
thinking and embrace the value of all workstyles in the workplace.
We directly employ more than 500,000 people around the world, and
we connect thousands more with work through our global network of
talent suppliers and partners in our outsourcing and consulting
practice. Revenue in 2018 was $5.5 billion. Visit
kellyservices.com and let us help with what’s next for you.
KLYA-FIN
ANALYST & MEDIA
CONTACT:
James
Polehna
(248)
244-4586
james_polehna@kellyservices.com
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
EARNINGS |
FOR THE 13 WEEKS ENDED MARCH 31, 2019 AND
APRIL 1, 2018 |
(UNAUDITED) |
(In millions of dollars except per share data) |
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2019 |
|
2018 |
|
Change |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
1,382.6 |
|
$ |
1,369.9 |
|
$ |
12.7 |
|
|
0.9 |
|
% |
2.9 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
1,131.0 |
|
|
1,131.7 |
|
|
(0.7 |
) |
|
(0.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
251.6 |
|
|
238.2 |
|
|
13.4 |
|
|
5.6 |
|
|
7.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
234.8 |
|
|
226.2 |
|
|
8.6 |
|
|
3.8 |
|
|
5.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations |
|
16.8 |
|
|
12.0 |
|
|
4.8 |
|
|
40.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on investment in Persol Holdings |
|
13.2 |
|
|
23.7 |
|
|
(10.5 |
) |
|
(44.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense, net |
|
(1.1 |
) |
|
(1.7 |
) |
|
0.6 |
|
|
27.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
taxes and equity in net earnings (loss) of affiliate |
|
28.9 |
|
|
34.0 |
|
|
(5.1 |
) |
|
(15.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
6.4 |
|
|
6.4 |
|
|
— |
|
|
(0.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
before equity in net earnings (loss) of affiliate |
|
22.5 |
|
|
27.6 |
|
|
(5.1 |
) |
|
(18.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings (loss) of affiliate |
|
(0.4 |
) |
|
1.5 |
|
|
(1.9 |
) |
|
(125.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
$ |
22.1 |
|
$ |
29.1 |
|
$ |
(7.0 |
) |
|
(24.1 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.56 |
|
$ |
0.74 |
|
$ |
(0.18 |
) |
|
(24.3 |
) |
% |
|
|
Diluted earnings per share |
$ |
0.56 |
|
$ |
0.74 |
|
$ |
(0.18 |
) |
|
(24.3 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement
income (included in revenue from services) |
$ |
15.9 |
|
$ |
16.6 |
|
$ |
(0.7 |
) |
|
(3.9 |
) |
% |
0.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
18.2 |
|
% |
17.4 |
|
% |
0.8 |
|
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion rate |
|
6.7 |
|
|
5.0 |
|
|
1.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Return: |
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations |
|
1.2 |
|
|
0.9 |
|
|
0.3 |
|
|
|
|
|
|
Net earnings |
|
1.6 |
|
|
2.1 |
|
|
(0.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax rate |
|
22.2 |
|
% |
18.8 |
|
% |
3.4 |
|
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (millions): |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
39.0 |
|
|
38.6 |
|
|
|
|
|
|
|
|
Diluted |
|
39.1 |
|
|
38.9 |
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
RESULTS OF OPERATIONS BY SEGMENT |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC
% |
|
|
|
2019 |
|
|
2018 |
|
Change |
|
Change |
|
Americas Staffing |
|
|
|
|
|
|
|
|
|
|
Revenue from
services |
$ |
626.5 |
|
|
$ |
604.3 |
|
|
3.7 |
|
% |
4.1 |
|
% |
Gross
profit |
|
117.2 |
|
|
|
108.0 |
|
|
8.5 |
|
|
8.9 |
|
|
SG&A
expenses excluding restructuring charges |
|
94.9 |
|
|
|
91.9 |
|
|
3.2 |
|
|
3.6 |
|
|
Restructuring charges |
|
6.3 |
|
|
|
— |
|
|
NM |
|
NM |
|
Total
SG&A expenses |
|
101.2 |
|
|
|
91.9 |
|
|
10.1 |
|
|
10.5 |
|
|
Earnings
from operations |
|
16.0 |
|
|
|
16.1 |
|
|
(0.2 |
) |
|
|
|
Earnings
from operations excluding restructuring charges |
|
22.3 |
|
|
|
16.1 |
|
|
39.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
18.7 |
|
% |
|
17.9 |
|
% |
0.8 |
|
pts. |
|
|
Conversion rate |
|
13.7 |
|
|
|
14.9 |
|
|
(1.2 |
) |
|
|
|
Conversion rate excluding restructuring charges |
|
19.1 |
|
|
|
14.9 |
|
|
4.2 |
|
|
|
|
Return on
sales |
|
2.6 |
|
|
|
2.7 |
|
|
(0.1 |
) |
|
|
|
Return on
sales excluding restructuring charges |
|
3.6 |
|
|
|
2.7 |
|
|
0.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Talent Solutions |
|
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
501.0 |
|
|
$ |
485.8 |
|
|
3.2 |
|
% |
3.6 |
|
% |
Gross
profit |
|
100.4 |
|
|
|
91.8 |
|
|
9.4 |
|
|
10.3 |
|
|
Total
SG&A expenses |
|
74.7 |
|
|
|
75.8 |
|
|
(1.5 |
) |
|
(0.5 |
) |
|
Earnings
from operations |
|
25.7 |
|
|
|
16.0 |
|
|
60.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
20.0 |
|
% |
|
18.9 |
|
% |
1.1 |
|
pts. |
|
|
Conversion rate |
|
25.7 |
|
|
|
17.5 |
|
|
8.2 |
|
|
|
|
Return on
sales |
|
5.1 |
|
|
|
3.3 |
|
|
1.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Staffing |
|
|
|
|
|
|
|
|
|
|
Revenue
from services |
$ |
258.9 |
|
|
$ |
284.7 |
|
|
(9.1 |
) |
% |
(1.5 |
) |
% |
Gross
profit |
|
34.6 |
|
|
|
39.1 |
|
|
(11.6 |
) |
|
(4.2 |
) |
|
Total
SG&A expenses |
|
31.3 |
|
|
|
34.1 |
|
|
(8.3 |
) |
|
(1.0 |
) |
|
Earnings
from operations |
|
3.3 |
|
|
|
5.0 |
|
|
(33.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit rate |
|
13.3 |
|
% |
|
13.7 |
|
% |
(0.4 |
) |
pts. |
|
|
Conversion rate |
|
9.5 |
|
|
|
12.7 |
|
|
(3.2 |
) |
|
|
|
Return on
sales |
|
1.3 |
|
|
|
1.7 |
|
|
(0.4 |
) |
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
March 31, 2019 |
|
Dec. 30, 2018 |
|
April 1, 2018 |
|
Current Assets |
|
|
|
|
|
|
|
Cash and
equivalents |
$ |
30.9 |
|
$ |
35.3 |
|
$ |
36.6 |
|
|
Trade accounts
receivable, less allowances of |
|
|
|
|
|
|
|
$12.0, $13.2,
and $14.3, respectively |
|
1,283.1 |
|
|
1,293.3 |
|
|
1,290.7 |
|
|
Prepaid expenses
and other current assets |
|
86.2 |
|
|
71.9 |
|
|
70.4 |
|
|
Total current assets |
|
1,400.2 |
|
|
1,400.5 |
|
|
1,397.7 |
|
|
|
|
|
|
|
|
|
|
Noncurrent Assets |
|
|
|
|
|
|
|
Property and
equipment, net |
|
155.5 |
|
|
86.3 |
|
|
84.3 |
|
|
Deferred
taxes |
|
204.6 |
|
|
198.7 |
|
|
187.8 |
|
|
Goodwill |
|
127.8 |
|
|
107.3 |
|
|
107.3 |
|
|
Investment in
Persol Holdings |
|
147.2 |
|
|
135.1 |
|
|
265.2 |
|
|
Investment in
equity affiliate |
|
121.2 |
|
|
121.3 |
|
|
118.9 |
|
|
Other
assets |
|
315.7 |
|
|
265.2 |
|
|
275.4 |
|
|
Total noncurrent assets |
|
1,072.0 |
|
|
913.9 |
|
|
1,038.9 |
|
|
|
|
|
|
|
|
|
|
Total
Assets |
$ |
2,472.2 |
|
$ |
2,314.4 |
|
$ |
2,436.6 |
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
Short-term
borrowings |
$ |
74.2 |
|
$ |
2.2 |
|
$ |
33.4 |
|
|
Accounts payable
and accrued liabilities |
|
517.8 |
|
|
540.6 |
|
|
529.9 |
|
|
Accrued payroll
and related taxes |
|
292.1 |
|
|
266.0 |
|
|
283.1 |
|
|
Accrued workers'
compensation and other claims |
|
24.4 |
|
|
26.0 |
|
|
25.3 |
|
|
Income and other
taxes |
|
64.9 |
|
|
62.7 |
|
|
62.5 |
|
|
Total current liabilities |
|
973.4 |
|
|
897.5 |
|
|
934.2 |
|
|
|
|
|
|
|
|
|
|
Noncurrent Liabilities |
|
|
|
|
|
|
|
Accrued workers'
compensation and other claims |
|
47.9 |
|
|
50.5 |
|
|
49.1 |
|
|
Accrued
retirement benefits |
|
176.0 |
|
|
162.9 |
|
|
178.7 |
|
|
Other long-term
liabilities |
|
97.1 |
|
|
44.0 |
|
|
83.3 |
|
|
Total noncurrent liabilities |
|
321.0 |
|
|
257.4 |
|
|
311.1 |
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
|
|
|
|
|
|
Common
stock |
|
40.1 |
|
|
40.1 |
|
|
40.1 |
|
|
Treasury
stock |
|
(21.9 |
) |
|
(26.0 |
) |
|
(27.9 |
) |
|
Paid-in
capital |
|
21.0 |
|
|
24.4 |
|
|
21.1 |
|
|
Earnings
invested in the business |
|
1,157.2 |
|
|
1,138.1 |
|
|
1,153.2 |
|
|
Accumulated
other comprehensive income (loss) |
|
(18.6 |
) |
|
(17.1 |
) |
|
4.8 |
|
|
Total stockholders' equity |
|
1,177.8 |
|
|
1,159.5 |
|
|
1,191.3 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders'
Equity |
$ |
2,472.2 |
|
$ |
2,314.4 |
|
$ |
2,436.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
|
Working
Capital |
$ |
426.8 |
|
$ |
503.0 |
|
$ |
463.5 |
|
|
Current
Ratio |
|
1.4 |
|
|
1.6 |
|
|
1.5 |
|
|
Debt-to-capital
% |
|
5.9 |
|
% |
0.2 |
|
% |
2.7 |
|
% |
Global Days Sales
Outstanding |
|
58 |
|
|
55 |
|
|
57 |
|
|
Year-to-Date Free
Cash Flow |
$ |
17.0 |
|
$ |
35.8 |
|
$ |
(8.7 |
) |
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
FOR THE 13 WEEKS ENDED MARCH 31, 2019 AND APRIL
1, 2018 |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
2019 |
|
2018 |
Cash flows from
operating activities: |
|
|
|
|
Net earnings |
$ |
22.1 |
|
$ |
29.1 |
|
Adjustments to reconcile net earnings to net cash from operating
activities: |
|
|
|
|
Depreciation and amortization |
|
7.6 |
|
|
6.3 |
|
Provision
for bad debts |
|
0.3 |
|
|
1.7 |
|
Stock-based compensation |
|
3.2 |
|
|
2.5 |
|
Gain on
investment in Persol Holdings |
|
(13.2 |
) |
|
(23.7 |
) |
Equity in
net earnings of PersolKelly Asia Pacific |
|
0.4 |
|
|
(1.5 |
) |
Other,
net |
|
(0.4 |
) |
|
0.1 |
|
Changes
in operating assets and liabilities, net of acquisitions |
|
1.2 |
|
|
(18.6 |
) |
|
|
|
|
|
Net cash from (used in) operating activities |
|
21.2 |
|
|
(4.1 |
) |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
Capital
expenditures |
|
(4.2 |
) |
|
(4.6 |
) |
Acquisition of companies, net of cash received |
|
(86.4 |
) |
|
— |
|
Other
investing activities |
|
0.3 |
|
|
(0.3 |
) |
|
|
|
|
|
Net cash used in investing activities |
|
(90.3 |
) |
|
(4.9 |
) |
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
Net
change in short-term borrowings |
|
72.0 |
|
|
23.2 |
|
Dividend
payments |
|
(3.0 |
) |
|
(2.9 |
) |
Payments
of tax withholding for stock awards |
|
(2.3 |
) |
|
(6.2 |
) |
|
|
|
|
|
Net cash from financing activities |
|
66.7 |
|
|
14.1 |
|
|
|
|
|
|
Effect of
exchange rates on cash, cash equivalents and restricted
cash |
|
(1.9 |
) |
|
(0.9 |
) |
|
|
|
|
|
Net change in
cash, cash equivalents and restricted cash |
|
(4.3 |
) |
|
4.2 |
|
Cash, cash
equivalents and restricted cash at beginning of
period |
|
40.1 |
|
|
36.9 |
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash at end of period |
$ |
35.8 |
|
$ |
41.1 |
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
REVENUE FROM SERVICES |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter (Americas, International and
GTS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2019 |
|
2018 |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
United States |
$ |
1,018.9 |
|
$ |
974.7 |
|
|
4.5 |
|
% |
4.5 |
|
% |
Canada |
|
33.0 |
|
|
33.6 |
|
|
(1.7 |
) |
|
3.4 |
|
|
Mexico |
|
27.5 |
|
|
30.4 |
|
|
(9.6 |
) |
|
(7.2 |
) |
|
Puerto
Rico |
|
19.2 |
|
|
19.8 |
|
|
(3.4 |
) |
|
(3.4 |
) |
|
Brazil |
|
8.5 |
|
|
9.5 |
|
|
(10.3 |
) |
|
4.4 |
|
|
Total
Americas |
|
1,107.1 |
|
|
1,068.0 |
|
|
3.7 |
|
|
4.0 |
|
|
|
|
|
|
|
|
|
|
|
|
EMEA |
|
|
|
|
|
|
|
|
|
France |
|
64.3 |
|
|
71.9 |
|
|
(10.6 |
) |
|
(3.3 |
) |
|
Switzerland |
|
49.5 |
|
|
49.7 |
|
|
(0.3 |
) |
|
4.8 |
|
|
Portugal |
|
44.8 |
|
|
51.1 |
|
|
(12.4 |
) |
|
(5.1 |
) |
|
United
Kingdom |
|
26.2 |
|
|
29.0 |
|
|
(9.7 |
) |
|
(3.6 |
) |
|
Russia |
|
25.4 |
|
|
26.1 |
|
|
(2.7 |
) |
|
12.7 |
|
|
Italy |
|
20.6 |
|
|
20.5 |
|
|
0.4 |
|
|
8.7 |
|
|
Germany |
|
11.1 |
|
|
16.4 |
|
|
(32.1 |
) |
|
(26.5 |
) |
|
Ireland |
|
10.1 |
|
|
11.3 |
|
|
(10.4 |
) |
|
(3.1 |
) |
|
Other |
|
18.0 |
|
|
20.8 |
|
|
(13.5 |
) |
|
(5.6 |
) |
|
Total
EMEA |
|
270.0 |
|
|
296.8 |
|
|
(9.0 |
) |
|
(1.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total
APAC |
|
5.5 |
|
|
5.1 |
|
|
8.9 |
|
|
18.9 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Kelly
Services, Inc. |
$ |
1,382.6 |
|
$ |
1,369.9 |
|
|
0.9 |
|
% |
2.9 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
RECONCILIATION OF NON-GAAP
MEASURES |
FIRST QUARTER |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
2019 |
|
2018 |
Revenue from
Services: |
As Reported |
|
Restructuring(2) |
|
Acquisitions(3) |
|
Adjusted |
|
As Reported |
Americas Staffing |
$ |
626.5 |
|
|
$ |
— |
|
|
$ |
(20.2 |
) |
|
$ |
606.3 |
|
|
$ |
604.3 |
|
Global Talent
Solutions |
501.0 |
|
|
— |
|
|
(15.7 |
) |
|
485.3 |
|
|
485.8 |
|
International
Staffing |
258.9 |
|
|
— |
|
|
— |
|
|
258.9 |
|
|
284.7 |
|
Intersegment |
(3.8 |
) |
|
— |
|
|
— |
|
|
(3.8 |
) |
|
(4.9 |
) |
Total Company |
$ |
1,382.6 |
|
|
$ |
— |
|
|
$ |
(35.9 |
) |
|
$ |
1,346.7 |
|
|
$ |
1,369.9 |
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
Gross
Profit: |
As Reported |
|
Restructuring(2) |
|
Acquisitions(3) |
|
Adjusted |
|
As Reported |
Americas Staffing |
$ |
117.2 |
|
|
$ |
— |
|
|
$ |
(6.2 |
) |
|
$ |
111.0 |
|
|
$ |
108.0 |
|
Global Talent
Solutions |
100.4 |
|
|
— |
|
|
(2.9 |
) |
|
97.5 |
|
|
91.8 |
|
International
Staffing |
34.6 |
|
|
— |
|
|
— |
|
|
34.6 |
|
|
39.1 |
|
Intersegment |
(0.6 |
) |
|
— |
|
|
— |
|
|
(0.6 |
) |
|
(0.7 |
) |
Total Company |
$ |
251.6 |
|
|
$ |
— |
|
|
$ |
(9.1 |
) |
|
$ |
242.5 |
|
|
$ |
238.2 |
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
SG&A
Expenses: |
As Reported |
|
Restructuring(2) |
|
Acquisitions(3) |
|
Adjusted |
|
As Reported |
Americas Staffing |
$ |
101.2 |
|
|
$ |
(6.3 |
) |
|
$ |
(5.0 |
) |
|
$ |
89.9 |
|
|
$ |
91.9 |
|
Global Talent
Solutions |
74.7 |
|
|
— |
|
|
(1.8 |
) |
|
72.9 |
|
|
75.8 |
|
International
Staffing |
31.3 |
|
|
— |
|
|
— |
|
|
31.3 |
|
|
34.1 |
|
Corporate |
28.2 |
|
|
— |
|
|
— |
|
|
28.2 |
|
|
25.1 |
|
Intersegment |
(0.6 |
) |
|
— |
|
|
— |
|
|
(0.6 |
) |
|
(0.7 |
) |
Total Company |
$ |
234.8 |
|
|
$ |
(6.3 |
) |
|
$ |
(6.8 |
) |
|
$ |
221.7 |
|
|
$ |
226.2 |
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
Earnings from
Operations: |
As Reported |
|
Restructuring(2) |
|
Acquisitions(3) |
|
Adjusted |
|
As Reported |
Americas Staffing |
$ |
16.0 |
|
|
$ |
6.3 |
|
|
$ |
(1.2 |
) |
|
$ |
21.1 |
|
|
$ |
16.1 |
|
Global Talent
Solutions |
25.7 |
|
|
— |
|
|
(1.1 |
) |
|
24.6 |
|
|
16.0 |
|
International
Staffing |
3.3 |
|
|
— |
|
|
— |
|
|
3.3 |
|
|
5.0 |
|
Corporate |
(28.2 |
) |
|
— |
|
|
— |
|
|
(28.2 |
) |
|
(25.1 |
) |
Total Company |
$ |
16.8 |
|
|
$ |
6.3 |
|
|
$ |
(2.3 |
) |
|
$ |
20.8 |
|
|
$ |
12.0 |
|
|
KELLY SERVICES, INC. AND
SUBSIDIARIES |
RECONCILIATION OF NON-GAAP MEASURES
(continued) |
(UNAUDITED) |
(In millions of dollars except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter |
|
|
2019 |
|
2018 |
Income tax expense |
|
$ |
6.4 |
|
|
$ |
6.4 |
|
Tax expense on
investment in Persol Holdings(1) |
|
(4.1 |
) |
|
(7.3 |
) |
Tax expense on
restructuring charges(2) |
|
1.6 |
|
|
— |
|
Tax expense on
acquisitions(3) |
|
(0.6 |
) |
|
— |
|
Adjusted income tax
expense (benefit) |
|
$ |
3.3 |
|
|
$ |
(0.9 |
) |
|
|
|
|
|
|
|
First Quarter |
|
|
2019 |
|
2018 |
|
|
|
|
|
Net earnings |
|
$ |
22.1 |
|
|
$ |
29.1 |
|
Gain on investment in
Persol Holdings, net of taxes(1) |
|
(9.1 |
) |
|
(16.4 |
) |
Restructuring charges,
net of taxes(2) |
|
4.7 |
|
|
— |
|
Net earnings from
acquisitions(3) |
|
(1.7 |
) |
|
— |
|
Adjusted net
earnings |
|
$ |
16.0 |
|
|
$ |
12.7 |
|
|
|
|
|
|
|
|
First Quarter |
|
|
2019 |
|
2018 |
|
|
|
|
|
Per Share |
Net earnings |
|
$ |
0.56 |
|
|
$ |
0.74 |
|
Gain on investment in
Persol Holdings, net of taxes(1) |
|
(0.23 |
) |
|
(0.42 |
) |
Restructuring charges,
net of taxes(2) |
|
0.12 |
|
|
— |
|
Acquisitions, net of
taxes(3) |
|
(0.04 |
) |
|
— |
|
Adjusted net
earnings |
|
$ |
0.40 |
|
|
$ |
0.32 |
|
|
|
|
|
|
|
|
|
|
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 2019 acquisitions,
2019 restructuring charges and the 2019 and 2018 gains on the
investment in Persol Holdings are useful to understand the
Company's fiscal 2019 financial performance and increases
comparability. Specifically, Management believes that
removing the impact of these items allows for a meaningful
comparison of current period operating performance with the
operating results of prior periods. Additionally, the Company
does not acquire businesses on a predictable cycle and the terms of
each acquisition are unique and may vary significantly.
Management also believes that such measures are used by those
analyzing performance of companies in the staffing industry to
compare current performance to prior periods and to assess future
performance.
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 gains on the investment in Persol Holdings
represent the change in fair value of the investment during the
period presented and the related tax expense.
(2) Restructuring charges in 2019 represent severance
costs primarily related to U.S. branch-based staffing
operations.
(3) NextGen and GTA were acquired on January 2, 2019, and
were included in the reported results of operations of Americas
Staffing and GTS segments, respectively, from the date of
acquisition.
Kelly Services (NASDAQ:KELYA)
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