SOURCE: Kelly Services

Kelly Services

August 05, 2015 07:30 ET

Kelly Services® Reports 2nd Quarter 2015 Results

TROY, MI--(Marketwired - Aug 5, 2015) - Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a leader in providing workforce solutions, today announced results for the second quarter of 2015.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the second quarter of 2015 totaled $1.4 billion, a 2% decrease (a 4% increase on a constant currency basis) compared to the corresponding quarter of 2014.

Earnings from operations for the second quarter of 2015 totaled $11.5 million, compared to $5.9 million reported for the second quarter of 2014. Included in the results of operations in the second quarter of 2014 are restructuring charges of $1.8 million. Excluding the restructuring charges, earnings from operations were $7.7 million in the second quarter of 2014.

Diluted earnings per share in the second quarter of 2015 were $0.18 compared to $0.07 per share in the second quarter of 2014. Adjusted earnings per share were $0.10 in the second quarter of 2014.

Commenting on the second quarter, Camden stated, "I'm pleased to report that Kelly once again delivered strong operating leverage and improved returns. On a constant currency basis, we grew second quarter revenue and held our expenses relatively flat, dropping more than half of our gross profit growth to the bottom line. Last year's investments in PT and OCG are yielding results, and we are executing a strategy that clearly aligns with market trends and customer needs."

Kelly also reported that on August 4, its board of directors declared a dividend of $0.05 per share. The dividend is payable September 8 to shareholders of record as of the close of business on August 18.

In conjunction with its second quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on August 5, to review the results and answer questions. The call may be accessed in one of the following ways:

Via the Telephone:

U.S. 1 800 288-9626
International 1 651 291-5254

The pass code is Kelly Services

Via the Internet:

The call is also available via the internet through the Kelly Services website:
www.kellyservices.com

This release contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties. These factors include, but are not limited to, competitive market pressures including pricing and technology introductions, changing market and economic conditions, our ability to achieve our business strategy, the risk of damage to our brand, 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, material changes in demand from or loss of large corporate customers, 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, the risk of cyber attacks or other breaches of network or information technology security as well as risks associated with compliance on data privacy, 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 or market developments, unexpected changes in claim trends on workers' compensation, disability and medical benefit plans, the impact of the Patient Protection and Affordable Care Act on our business, the impact of changes in laws and regulations (including federal, state and international tax laws and the expiration and/or reinstatement of the U.S. work opportunity credit program), 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® has a role in managing employment opportunities for more than one million workers around the globe by employing 550,000 of these individuals directly with the remaining workers engaged through its talent supply chain network of supplier partners. Revenue in 2014 was $5.6 billion. Visit kellyservices.com and connect with us on Facebook, LinkedIn, & Twitter.

KLYA-FIN

   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF EARNINGS  
FOR THE 13 WEEKS ENDED JUNE 28, 2015 AND JUNE 29, 2014  
(UNAUDITED)  
(In millions of dollars except per share data)  
                          %     CC %  
    2015     2014     Change         Change     Change  
                                         
Revenue from services   $ 1,385.0     $ 1,410.5     $ (25.5 )       (1.8) %   3.9 %
                                         
Cost of services     1,162.7       1,182.4       (19.7 )       (1.7 )      
                                         
Gross profit     222.3       228.1       (5.8 )       (2.5 )   2.9  
                                         
Selling, general and administrative expenses     210.8       222.2       (11.4 )       (5.2 )   (0.4 )
                                         
Earnings from operations     11.5       5.9       5.6         99.9        
                                         
Other expense, net     1.0       0.3       0.7         276.3        
                                         
Earnings before taxes     10.5       5.6       4.9         91.4        
                                         
Income tax expense     3.7       2.8       0.9         34.7        
                                         
Net earnings   $ 6.8     $ 2.8     $ 4.0         148.6 %      
                                         
Basic earnings per share   $ 0.18     $ 0.07     $ 0.11         157.1 %      
Diluted earnings per share   $ 0.18     $ 0.07     $ 0.11         157.1 %      
                                         
                                         
STATISTICS:                                        
                                         
Gross profit rate     16.1 %     16.2 %     (0.1 )   pts.            
                                         
Selling, general and administrative expenses:                                        
  % of revenue     15.2       15.8       (0.6 )                
  % of gross profit     94.8       97.5       (2.7 )                
                                         
% Return:                                        
Earnings from operations     0.8       0.4       0.4                  
Earnings before taxes     0.8       0.4       0.4                  
Net earnings     0.5       0.2       0.3                  
                                         
Effective income tax rate     35.3 %     50.2 %     (14.9 )   pts.            
                                         
Average number of shares outstanding (millions):                                        
  Basic     37.7       37.4                          
  Diluted     37.8       37.4                          
                                         
Shares adjusted for nonvested restricted awards (millions):                                        
  Basic     38.8       38.5                          
  Diluted     38.8       38.6                          
                                         
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF EARNINGS  
FOR THE 26 WEEKS ENDED JUNE 28, 2015 AND JUNE 29, 2014  
(UNAUDITED)  
(In millions of dollars except per share data)  
                          %     CC %  
    2015     2014     Change         Change     Change  
                                         
Revenue from services   $ 2,705.6     $ 2,741.3     $ (35.7 )       (1.3 )%   4.1 %
                                         
Cost of services     2,263.0       2,290.9       (27.9 )       (1.2 )      
                                         
Gross profit     442.6       450.4       (7.8 )       (1.7 )   3.3  
                                         
Selling, general and administrative expenses     419.0       438.2       (19.2 )       (4.4 )   0.3  
                                         
Earnings from operations     23.6       12.2       11.4         96.9        
                                         
Other expense, net     3.5       2.0       1.5         82.2        
                                         
Earnings before taxes     20.1       10.2       9.9         99.6        
                                         
Income tax expense     9.6       4.9       4.7         98.4        
                                         
Net earnings   $ 10.5     $ 5.3     $ 5.2         100.8 %      
                                         
Basic earnings per share   $ 0.27     $ 0.14     $ 0.13         92.9 %      
Diluted earnings per share   $ 0.27     $ 0.14     $ 0.13         92.9 %      
                                         
                                         
STATISTICS:                                        
                                         
Gross profit rate     16.4 %     16.4 %     --     pts.            
                                         
Selling, general and administrative expenses:                                        
  % of revenue     15.5       16.0       (0.5 )                
  % of gross profit     94.7       97.3       (2.6 )                
                                         
% Return:                                        
Earnings from operations     0.9       0.4       0.5                  
Earnings before taxes     0.7       0.4       0.3                  
Net earnings     0.4       0.2       0.2                  
                                         
Effective income tax rate     47.6 %     47.9 %     (0.3 )   pts.            
                                         
Average number of shares outstanding (millions):                                        
  Basic     37.7       37.4                          
  Diluted     37.8       37.4                          
                                         
Shares adjusted for nonvested restricted awards (millions):                                        
  Basic     38.8       38.5                          
  Diluted     38.8       38.6                          
                                           
 
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
                             
    Second Quarter
                          Constant  
                          Currency  
    2015     2014     Change         Change  
AMERICAS                                
  Commercial                                
    Revenue from services   $ 651.3     $ 661.1     (1.5 )%       0.5 %
    Staffing fee-based income included in revenue from services     3.5       3.4     4.6         7.3  
    Gross profit     95.9       96.5     (0.7 )       1.1  
    Gross profit rate     14.7 %     14.6 %   0.1     pts.      
  PT                                
    Revenue from services   $ 246.2     $ 244.2     0.8 %       1.2 %
    Staffing fee-based income included in revenue from services     4.9       3.7     29.1         30.2  
    Gross profit     42.1       39.0     8.0         8.4  
    Gross profit rate     17.1 %     16.0 %   1.1     pts.      
  Total Americas                                
    Revenue from services   $ 897.5     $ 905.3     (0.9 )%       0.7 %
    Staffing fee-based income included in revenue from services     8.4       7.1     17.4         19.3  
    Gross profit     138.0       135.5     1.8         3.2  
    Total SG&A expenses     112.6       112.6     (0.1 )       1.2  
    Earnings from operations     25.4       22.9     11.4            
                                 
    Gross profit rate     15.4 %     15.0 %   0.4     pts.      
    Expense rates:                                
      % of revenue     12.5       12.4     0.1            
      % of gross profit     81.6       83.1     (1.5 )          
    Return on sales     2.8       2.5     0.3            
                                 
EMEA                                
  Commercial                                
    Revenue from services   $ 195.7     $ 237.0     (17.4 )%       -- %
    Staffing fee-based income included in revenue from services     3.2       5.0     (35.9 )       (20.2 )
    Gross profit     26.8       34.5     (22.5 )       (5.9 )
    Gross profit rate     13.7 %     14.6 %   (0.9 )   pts.      
  PT                                
    Revenue from services   $ 42.9     $ 49.7     (13.6 )%       4.5 %
    Staffing fee-based income included in revenue from services     2.5       3.6     (30.2 )       (13.3 )
    Gross profit     9.1       11.3     (19.0 )       (1.2 )
    Gross profit rate     21.2 %     22.6 %   (1.4 )   pts.      
  Total EMEA                                
    Revenue from services   $ 238.6     $ 286.7     (16.8 )%       0.8 %
    Staffing fee-based income included in revenue from services     5.7       8.6     (33.5 )       (17.3 )
    Gross profit     35.9       45.8     (21.6 )       (4.7 )
    SG&A expenses excluding restructuring charges     34.2       42.3     (19.1 )          
    Restructuring charges     --       0.8     (100.0 )          
    Total SG&A expenses     34.2       43.1     (20.6 )       (5.0 )
    Earnings from operations     1.7       2.7     (38.1 )          
    Earnings from operations excluding restructuring charges     1.7       3.5     (52.4 )          
                                 
    Gross profit rate     15.0 %     16.0 %   (1.0 )   pts.      
    Expense rates (excluding restructuring charges):                                
      % of revenue     14.3       14.7     (0.4 )          
      % of gross profit     95.3       92.3     3.0            
    Return on sales (excluding restructuring charges)     0.7       1.2     (0.5 )          
                                     
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
                             
    Second Quarter  
                          Constant  
                          Currency  
    2015     2014     Change         Change  
APAC                                
  Commercial                                
    Revenue from services   $ 90.3     $ 86.5     4.3 %       17.7 %
    Staffing fee-based income included in revenue from services     1.8       2.0     (10.9 )       (0.1 )
    Gross profit     11.2       11.7     (3.8 )       8.3  
    Gross profit rate     12.4 %     13.5 %   (1.1 )   pts.      
  PT                                
    Revenue from services   $ 10.3     $ 10.0     3.5 %       17.8 %
    Staffing fee-based income included in revenue from services     1.5       2.1     (29.0 )       (20.9 )
    Gross profit     2.7       3.3     (17.9 )       (7.6 )
    Gross profit rate     26.4 %     33.2 %   (6.8 )   pts.      
  Total APAC                                
    Revenue from services   $ 100.6     $ 96.5     4.3 %       17.7 %
    Staffing fee-based income included in revenue from services     3.3       4.1     (20.3 )       (10.9 )
    Gross profit     13.9       15.0     (6.9 )       4.8  
    SG&A expenses excluding restructuring charges     12.3       14.8     (17.0 )          
    Restructuring charges     --       1.0     (100.0 )          
    Total SG&A expenses     12.3       15.8     (22.5 )       (12.9 )
    Earnings from operations     1.6       (0.8 )   NM            
    Earnings from operations excluding restructuring charges     1.6       0.2     NM            
                                 
    Gross profit rate     13.9 %     15.5 %   (1.6 )   pts.      
    Expense rates (excluding restructuring charges):                                
      % of revenue     12.2       15.4     (3.2 )          
      % of gross profit     88.3       99.0     (10.7 )          
    Return on sales (excluding restructuring charges)     1.6       0.2     1.4            
                                 
OCG                                
    Revenue from services   $ 165.0     $ 137.9     19.7 %       21.6 %
    Gross profit     35.7       32.9     8.4         11.4  
    Total SG&A expenses     32.2       31.1     3.6         6.4  
    Earnings from operations     3.5       1.8     88.8            
                                 
    Gross profit rate     21.6 %     23.9 %   (2.3 )   pts.      
    Expense rates:                                
      % of revenue     19.5       22.5     (3.0 )          
      % of gross profit     90.2       94.4     (4.2 )          
    Return on sales     2.1       1.3     0.8            
                                     
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
                             
    June Year to Date  
                          Constant  
                          Currency  
    2015     2014     Change         Change  
AMERICAS                                
  Commercial                                
    Revenue from services   $ 1,292.7     $ 1,274.3     1.4 %       3.2 %
    Staffing fee-based income included in revenue from services     7.0       6.6     5.3         7.8  
    Gross profit     193.7       188.3     2.9         4.4  
    Gross profit rate     15.0 %     14.8 %   0.2     pts.      
  PT                                
    Revenue from services   $ 479.0     $ 480.6     (0.3 )%       0.1 %
    Staffing fee-based income included in revenue from services     8.4       7.3     13.5         14.3  
    Gross profit     81.0       78.8     2.9         3.3  
    Gross profit rate     16.9 %     16.4 %   0.5     pts.      
  Total Americas                                
    Revenue from services   $ 1,771.7     $ 1,754.9     1.0 %       2.4 %
    Staffing fee-based income included in revenue from services     15.4       13.9     9.6         11.2  
    Gross profit     274.7       267.1     2.9         4.1  
    Total SG&A expenses     226.1       222.1     1.8         3.0  
    Earnings from operations     48.6       45.0     8.4            
                                 
    Gross profit rate     15.5 %     15.2 %   0.3     pts.      
    Expense rates:                                
      % of revenue     12.8       12.7     0.1            
      % of gross profit     82.3       83.2     (0.9 )          
    Return on sales     2.7       2.6     0.1            
                                 
EMEA                                
  Commercial                                
    Revenue from services   $ 374.0     $ 458.9     (18.5 )%       (0.9 )%
    Staffing fee-based income included in revenue from services     6.7       9.8     (31.5 )       (13.8 )
    Gross profit     51.4       67.4     (23.8 )       (7.3 )
    Gross profit rate     13.7 %     14.7 %   (1.0 )   pts.      
  PT                                
    Revenue from services   $ 83.2     $ 97.4     (14.5 )%       3.4 %
    Staffing fee-based income included in revenue from services     5.1       7.2     (29.5 )       (12.1 )
    Gross profit     17.8       22.4     (20.4 )       (2.8 )
    Gross profit rate     21.4 %     23.0 %   (1.6 )   pts.      
  Total EMEA                                
    Revenue from services   $ 457.2     $ 556.3     (17.8 )%       (0.1 )%
    Staffing fee-based income included in revenue from services     11.8       17.0     (30.7 )       (13.1 )
    Gross profit     69.2       89.8     (23.0 )       (6.2 )
    SG&A expenses excluding restructuring charges     67.7       84.2     (19.6 )          
    Restructuring charges     --       0.8     (100.0 )          
    Total SG&A expenses     67.7       85.0     (20.3 )       (4.1 )
    Earnings from operations     1.5       4.8     (69.1 )          
    Earnings from operations excluding restructuring charges     1.5       5.6     (73.5 )          
                                 
    Gross profit rate     15.1 %     16.1 %   (1.0 )   pts.      
    Expense rates (excluding restructuring charges):                                
      % of revenue     14.8       15.1     (0.3 )          
      % of gross profit     97.8       93.7     4.1            
    Return on sales (excluding restructuring charges)     0.3       1.0     (0.7 )          
                                 
                                 
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
                             
    June Year to Date  
                          Constant  
                          Currency  
    2015     2014     Change         Change  
APAC                                
  Commercial                                
    Revenue from services   $ 175.9     $ 169.5     3.8 %       15.1 %
    Staffing fee-based income included in revenue from services     3.3       3.9     (16.2 )       (7.7 )
    Gross profit     24.2       24.0     0.9         11.6  
    Gross profit rate     13.8 %     14.2 %   (0.4 )   pts.      
  PT                                
    Revenue from services   $ 20.8     $ 18.6     12.1 %       25.4 %
    Staffing fee-based income included in revenue from services     3.1       3.8     (18.1 )       (10.3 )
    Gross profit     5.6       6.1     (7.6 )       2.2  
    Gross profit rate     26.9 %     32.7 %   (5.8 )   pts.      
  Total APAC                          
    Revenue from services   $ 196.7     $ 188.1     4.6 %       16.2 %
    Staffing fee-based income included in revenue from services     6.4       7.7     (17.1 )       (9.0 )
    Gross profit     29.8       30.1     (0.8 )       9.7  
    SG&A expenses excluding restructuring charges     24.4       29.1     (16.3 )          
    Restructuring charges     --       1.0     (100.0 )          
    Total SG&A expenses     24.4       30.1     (19.2 )       (10.7 )
    Earnings from operations     5.4       --     NM            
    Earnings from operations excluding restructuring charges     5.4       1.0     NM            
                                 
    Gross profit rate     15.2 %     16.0 %   (0.8 )   pts.      
    Expense rates (excluding restructuring charges):                                
      % of revenue     12.4       15.5     (3.1 )          
      % of gross profit     82.0       97.0     (15.0 )          
    Return on sales (excluding restructuring charges)     2.7       0.5     2.2            
                                 
OCG                                
    Revenue from services   $ 314.5     $ 272.3     15.5 %       17.1 %
    Gross profit     71.2       65.5     8.6         10.7  
    Total SG&A expenses     64.9       62.5     3.8         6.4  
    Earnings from operations     6.3       3.0     108.3            
                                 
    Gross profit rate     22.6 %     24.1 %   (1.5 )   pts.      
    Expense rates:                                
      % of revenue     20.6       22.9     (2.3 )          
      % of gross profit     91.1       95.4     (4.3 )          
    Return on sales     2.0       1.1     0.9            
                                 
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEETS  
(UNAUDITED)  
(In millions of dollars)  
                   
    June 28, 2015     Dec. 28, 2014     June 29, 2014  
Current Assets                        
  Cash and equivalents   $ 48.7     $ 83.1     $ 62.8  
  Trade accounts receivable, less allowances of $9.4, $10.7 and $9.2, respectively    
1,152.3
     
1,122.8
     
1,132.9
 
  Prepaid expenses and other current assets     50.6       47.9       57.6  
  Deferred taxes     35.8       34.4       31.5  
Total current assets     1,287.4       1,288.2       1,284.8  
                         
Property and Equipment, Net     88.6       93.0       91.4  
                         
Noncurrent Deferred Taxes     144.6       146.3       130.8  
                         
Goodwill, Net     90.3       90.3       90.3  
                         
Other Assets     321.7       300.1       295.7  
                         
Total Assets   $ 1,932.6     $ 1,917.9     $ 1,893.0  
                         
Current Liabilities                        
  Short-term borrowings   $ 89.9     $ 91.9     $ 89.5  
  Accounts payable and accrued liabilities     380.4       364.0       328.4  
  Accrued payroll and related taxes     296.5       308.5       300.5  
  Accrued insurance     27.1       26.9       25.2  
  Income and other taxes     62.8       68.8       74.9  
                         
Total current liabilities     856.7       860.1       818.5  
                         
Noncurrent Liabilities                        
  Accrued insurance     44.3       43.9       44.7  
  Accrued retirement benefits     146.5       140.8       147.4  
  Other long-term liabilities     40.6       39.4       41.9  
                         
Total noncurrent liabilities     231.4       224.1       234.0  
                         
Stockholders' Equity                        
  Common stock     40.1       40.1       40.1  
  Treasury stock     (49.0 )     (49.8 )     (55.5 )
  Paid-in capital     27.5       24.9       29.0  
  Earnings invested in the business     774.1       767.4       752.8  
  Accumulated other comprehensive income     51.8       51.1       74.1  
                         
Total stockholders' equity     844.5       833.7       840.5  
                         
Total Liabilities and Stockholders' Equity   $ 1,932.6     $ 1,917.9     $ 1,893.0  
                         
                         
STATISTICS:                        
Working Capital   $ 430.7     $ 428.1     $ 466.3  
Current Ratio     1.5       1.5       1.6  
Debt-to-capital %     9.6 %     9.9 %     9.6 %
Global Days Sales Outstanding     56       54       57  
                         
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
FOR THE 26 WEEKS ENDED JUNE 28, 2015 AND JUNE 29, 2014  
(UNAUDITED)  
(In millions of dollars)  
       
    2015     2014  
Cash flows from operating activities:                
  Net earnings   $ 10.5     $ 5.3  
  Noncash adjustments:                
    Depreciation and amortization     11.0       10.8  
    Provision for bad debts     2.1       2.6  
    Stock-based compensation     3.1       3.5  
    Other, net     (0.3 )     0.7  
  Changes in operating assets and liabilities     (52.9 )     (130.4 )
                 
    Net cash used in operating activities     (26.5 )     (107.5 )
                 
Cash flows from investing activities:                
  Capital expenditures     (6.7 )     (8.9 )
  Investment in equity affiliate     (0.5 )     (5.4 )
  Other investing activities     (0.1 )     0.4  
                 
    Net cash used in investing activities     (7.3 )     (13.9 )
                 
Cash flows from financing activities:                
  Net change in short-term borrowings     (1.4 )     61.2  
  Dividend payments     (3.8 )     (3.8 )
                 
    Net cash (used in) from financing activities     (5.2 )     57.4  
                 
Effect of exchange rates on cash and equivalents     4.6       1.1  
                 
Net change in cash and equivalents     (34.4 )     (62.9 )
Cash and equivalents at beginning of period     83.1       125.7  
                 
                 
Cash and equivalents at end of period   $ 48.7     $ 62.8  
                 
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
REVENUE FROM SERVICES  
(UNAUDITED)  
(In millions of dollars)  
                     
    Second Quarter (Commercial, PT and OCG)  
            % Change  
                  Constant  
    2015   2014   US$     Currency  
                         
Americas                        
  United States   $ 923.6   $ 888.3   4.0 %   4.0 %
  Canada     41.6     49.6   (16.0 )   (5.5 )
  Mexico     32.0     34.6   (7.9 )   8.5  
  Puerto Rico     26.6     27.6   (3.7 )   (3.7 )
  Brazil     9.9     13.7   (27.8 )   (1.5 )
Total Americas     1,033.7     1,013.8   2.0     3.4  
                         
EMEA                        
  France     60.9     69.3   (12.1 )   9.0  
  Switzerland     54.6     66.7   (18.3 )   (13.4 )
  Portugal     33.9     32.5   4.2     29.0  
  United Kingdom     27.1     28.4   (4.3 )   5.2  
  Russia     22.2     32.8   (32.3 )   1.7  
  Germany     14.3     16.5   (13.3 )   7.5  
  Italy     13.0     16.6   (21.8 )   (3.3 )
  Norway     10.0     14.4   (31.0 )   (10.8 )
  Other     10.3     18.0   (42.9 )   (29.3 )
Total EMEA     246.3     295.2   (16.6 )   0.9  
                         
APAC                        
  Singapore     33.0     31.1   6.3     14.0  
  Australia     32.9     30.0   9.5     31.3  
  Malaysia     15.9     16.8   (5.1 )   7.2  
  New Zealand     10.3     13.2   (21.9 )   (8.3 )
  Other     12.9     10.4   24.3     33.1  
Total APAC     105.0     101.5   3.6     17.1  
                         
Total Kelly Services, Inc.   $ 1,385.0   $ 1,410.5   (1.8 )%   3.9 %
                         
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
REVENUE FROM SERVICES  
(UNAUDITED)  
(In millions of dollars)  
                     
    June Year to Date (Commercial, PT and OCG)  
            % Change  
                  Constant  
    2015   2014   US$     Currency  
                         
Americas                        
  United States   $ 1,806.6   $ 1,728.2   4.5 %   4.5 %
  Canada     84.3     96.3   (12.4 )   1.7  
  Mexico     63.9     65.3   (2.3 )   12.8  
  Puerto Rico     51.4     52.7   (2.3 )   (2.3 )
  Brazil     23.8     29.6   (19.6 )   (1.2 )
Total Americas     2,030.0     1,972.1   2.9     4.2  
                         
EMEA                        
  France     117.3     132.1   (11.3 )   8.8  
  Switzerland     102.7     129.0   (20.4 )   (15.4 )
  Portugal     65.2     59.1   10.3     35.4  
  United Kingdom     50.7     56.2   (9.7 )   (1.1 )
  Russia     40.4     67.7   (40.3 )   (2.5 )
  Germany     27.7     33.2   (16.5 )   2.2  
  Italy     25.5     31.5   (18.9 )   (0.6 )
  Norway     19.4     28.8   (32.9 )   (13.9 )
  Other     21.3     35.1   (39.4 )   (25.7 )
Total EMEA     470.2     572.7   (17.9 )   (0.4 )
                         
APAC                        
  Singapore     64.3     61.4   4.8     12.1  
  Australia     63.3     56.5   12.0     31.2  
  Malaysia     31.4     33.3   (5.9 )   4.8  
  New Zealand     20.8     25.5   (18.4 )   (6.8 )
  Other     25.6     19.8   29.3     34.8  
Total APAC     205.4     196.5   4.5     16.2  
                         
Total Kelly Services, Inc.   $ 2,705.6   $ 2,741.3   (1.3 )%   4.1 %
                         
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RECONCILIATION OF NON-GAAP MEASURES  
FOR THE 13 WEEKS ENDED JUNE 28, 2015 AND JUNE 29, 2014  
(UNAUDITED)  
(In millions of dollars except per share data)  
                         
    2015   2014      
    As reported   Restructuring Charges
(Note 1)
    Adjusted Earnings   Adjusted Earnings   % Change  
                                 
Revenue from services   $ 1,385.0   $ --     $ 1,385.0   $ 1,410.5   (1.8 )%
                                 
Cost of services     1,162.7     --       1,162.7     1,182.4   (1.7 )
                                 
Gross profit     222.3     --       222.3     228.1   (2.5 )
                                 
SG&A expenses     210.8     --       210.8     220.4   (4.4 )
                                 
Earnings from operations     11.5     --       11.5     7.7   50.7  
                                 
Other expense, net     1.0     --       1.0     0.3   276.3  
                                 
Earnings before taxes     10.5     --       10.5     7.4   42.8  
                                 
Inc. tax expense (benefit)     3.7     --       3.7     3.4   9.1  
                                 
Net earnings   $ 6.8   $ --     $ 6.8   $ 4.0   71.7 %
                                 
Earnings per share:                                
  Basic   $ 0.18   $ --     $ 0.18   $ 0.10   80.0 %
  Diluted   $ 0.18   $ --     $ 0.18   $ 0.10   80.0 %
                                 
                                 
    2014            
    As reported   Restructuring Charges
(Note 1)
    Adjusted Earnings            
                                 
Revenue from services   $ 1,410.5   $ --     $ 1,410.5            
                                 
Cost of services     1,182.4     --       1,182.4            
                                 
Gross profit     228.1     --       228.1            
                                 
SG&A expenses     222.2     (1.8 )     220.4            
                                 
Earnings from operations     5.9     1.8       7.7            
                                 
Other expense, net     0.3     --       0.3            
                                 
Earnings before taxes     5.6     1.8       7.4            
                                 
Inc. tax expense (benefit)     2.8     0.6       3.4            
                                 
Net earnings   $ 2.8   $ 1.2     $ 4.0            
                                 
Earnings per share:                                
  Basic   $ 0.07   $ 0.03     $ 0.10            
  Diluted   $ 0.07   $ 0.03     $ 0.10            
                                 
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 SUBSIDIARIES  
RECONCILIATION OF NON-GAAP MEASURES  
FOR THE 26 WEEKS ENDED JUNE 28, 2015 AND JUNE 29, 2014  
(UNAUDITED)  
(In millions of dollars except per share data)  
                         
    2015   2014      
    As reported   Restructuring Charges
(Note 1)
    Adjusted Earnings   Adjusted Earnings   % Change  
                                 
Revenue from services   $ 2,705.6   $ --     $ 2,705.6   $ 2,741.3   (1.3 )%
                                 
Cost of services     2,263.0     --       2,263.0     2,290.9   (1.2 )
                                 
Gross profit     442.6     --       442.6     450.4   (1.7 )
                                 
SG&A expenses     419.0     --       419.0     436.4   (4.0 )
                                 
Earnings from operations     23.6     --       23.6     14.0   70.2  
                                 
Other expense, net     3.5     --       3.5     2.0   82.2  
                                 
Earnings before taxes     20.1     --       20.1     12.0   68.2  
                                 
Inc. tax expense (benefit)     9.6     --       9.6     5.5   74.9  
                                 
Net earnings   $ 10.5   $ --     $ 10.5   $ 6.5   62.6 %
                                 
Earnings per share:                                
  Basic   $ 0.27   $ --     $ 0.27   $ 0.17   58.8 %
  Diluted   $ 0.27   $ --     $ 0.27   $ 0.17   58.8 %
                                 
                                 
    2014            
    As reported   Restructuring Charges
(Note 1)
    Adjusted Earnings            
                                 
Revenue from services   $ 2,741.3   $ --     $ 2,741.3            
                                 
Cost of services     2,290.9     --       2,290.9            
                                 
Gross profit     450.4     --       450.4            
                                 
SG&A expenses     438.2     (1.8 )     436.4            
                                 
Earnings from operations     12.2     1.8       14.0            
                                 
Other expense, net     2.0     --       2.0            
                                 
Earnings before taxes     10.2     1.8       12.0            
                                 
Inc. tax expense (benefit)     4.9     0.6       5.5            
                                 
Net earnings   $ 5.3   $ 1.2     $ 6.5            
                                 
Earnings per share:                                
  Basic   $ 0.14   $ 0.03     $ 0.17            
  Diluted   $ 0.14   $ 0.03     $ 0.17            
                                 
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 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 2015 financial performance and increases comparability. Specifically, Management believes that excluding these items allows for a more meaningful comparison of current period operating performance with the operating results of prior periods. These non-GAAP measures may have limitations as analytical tools because they exclude items which can have a material impact on cash flow and earnings per share. As a result, Management considers these measures, along with reported results, when it reviews and evaluates the Company's financial performance. Management believes that these measures provide greater transparency to investors and provide insight into how Management is evaluating the Company's financial performance. Non-GAAP measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

   
(1) Restructuring charges in 2014 relate to costs incurred for exiting the staffing business in Sweden and closing branches in Australia.