SOURCE: Kelly Services, Inc.

Kelly Services, Inc.

January 31, 2013 07:30 ET

Kelly Services® Reports 4th Quarter and Full Year 2012 Results

TROY, MI--(Marketwire - Jan 31, 2013) - Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a leader in providing workforce solutions, today announced results for the fourth quarter and full year of 2012. 

Carl T. Camden, President and Chief Executive Officer, announced revenue for the fourth quarter of 2012 totaled $1.4 billion, a 2% decrease compared to the corresponding quarter of 2011. Revenue for the full year totaled $5.5 billion, a 2% decrease compared to the prior year. 

Earnings from operations for the fourth quarter of 2012 totaled $9.8 million, compared to $12.7 million reported for the fourth quarter of 2011. Included in the results from operations for the fourth quarter of 2012 are asset impairment charges of $3.1 million and restructuring charges of $1.3 million. Excluding these charges, earnings from operations were $14.2 million in the fourth quarter of 2012 compared to $12.7 million in 2011.

Earnings from operations for the full year of 2012 totaled $72.3 million compared to $57.7 million in 2011. Included in the results from operations for 2012 are asset impairment charges of $3.1 million and a restructuring benefit of $900 thousand. Included in the results from operations for 2011 are restructuring charges of $2.8 million. Excluding these items from both years, earnings from operations were $74.5 million in 2012 compared to $60.5 million in 2011.

Diluted earnings per share from continuing operations in the fourth quarter of 2012 were $0.23 compared to $0.64 per share in the fourth quarter of 2011. Included in diluted earnings per share from continuing operations for the fourth quarter of 2012 are asset impairment charges of $0.05 per share, restructuring charges of $0.02 per share and a loss on the North Asia joint venture of $0.03 per share. Excluding these charges, diluted earnings per share from continuing operations for the fourth quarter of 2012 were $0.33 per share compared to $0.64 in 2011.

Diluted earnings per share from continuing operations for the full year of 2012 were $1.31 compared to $1.72 per share in 2011. Included in diluted earnings per share from continuing operations for 2012 are asset impairment charges of $0.05 per share, a restructuring benefit of $0.04 per share and a loss on the North Asia joint venture of $0.03 per share. Included in diluted earnings per share from continuing operations for 2011 are restructuring charges of $0.07 per share. Excluding these charges from both periods, diluted earnings per share from continuing operations for 2012 were $1.34 per share compared to $1.80 in 2011.

Commenting on the fourth quarter and full year results, Camden stated, "Given the challenging fourth quarter and anemic economic growth throughout the year, we're pleased with our performance. Our strategy is clearly yielding results. We kept expenses under control, grew our higher-margin professional and technical business, and delivered four straight quarters of positive earnings in our outsourcing and consulting group." 

Camden expects persistent headwinds and mediocre job growth in the months ahead, but feels Kelly is well-positioned. "We're operating more efficiently, and we're investing in flexible solutions that meet the fastest-growing demands in the market. Skilled workers will continue to be in short supply in 2013, and companies will continue to look for ways to better manage their workforce. Kelly's professional and technical staffing capabilities, along with our expertise in talent supply chain management, provide the solution." 

In conjunction with its fourth quarter and full year earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on January 31, 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, 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), the net financial impact of the Patient Protection and Affordable Care Act 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 560,000 employees annually. Revenue in 2012 was $5.5 billion. Visit kellyservices.com and connect with us on Facebook, LinkedIn, and Twitter. Download The Talent Project, a free iPad app by Kelly Services.

   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF EARNINGS  
FOR THE 13 WEEKS ENDED DECEMBER 30, 2012 AND JANUARY 1, 2012  
(UNAUDITED)  
(In millions of dollars except per share data)  
                         
    2012     2011     Change     % Change  
                               
Revenue from services   $ 1,375.4     $ 1,396.3     $ (20.9 )   (1.5 )%
                               
Cost of services     1,153.2       1,172.0       (18.8 )   (1.6 )
                               
Gross profit     222.2       224.3       (2.1 )   (0.9 )
                               
Selling, general and administrative                              
expenses     209.3       211.6       (2.3 )   (1.1 )
                               
Asset impairments     3.1       -       3.1     NM  
                               
Earnings from operations     9.8       12.7       (2.9 )   (22.8 )
                               
Other expense, net     (1.7 )     -       (1.7 )   NM  
                               
Earnings from continuing operations before taxes     8.1       12.7       (4.6 )   (36.2 )
                               
Income taxes     (0.8 )     (11.4 )     10.6     93.7  
                               
Earnings from continuing operations     8.9       24.1       (15.2 )   (63.3 )
                               
Earnings from discontinued operations, net of tax     -       -       -     NM  
                               
Net earnings   $ 8.9     $ 24.1     $ (15.2 )   (63.2 )%
                               
Basic earnings per share on common stock                              
  Earnings from continuing operations   $ 0.23     $ 0.64     $ (0.41 )   (64.1 )%
  Earnings from discontinued operations     -       -       -     NM  
  Net earnings     0.23       0.64       (0.41 )   (64.1 )
                               
Diluted earnings per share on common stock                              
  Earnings from continuing operations   $ 0.23     $ 0.64     $ (0.41 )   (64.1 )%
  Earnings from discontinued operations     -       -       -     NM  
  Net earnings     0.23       0.64       (0.41 )   (64.1 )
                               
                               
STATISTICS:                              
                               
Gross profit rate     16.2 %     16.1 %     0.1pts.        
                               
Selling, general and administrative expenses:                              
  % of revenue     15.2       15.2       0.0        
  % of gross profit     94.2       94.3       (0.1 )      
                               
% Return:                              
  Earnings from operations     0.7       0.9       (0.2 )      
  Earnings from continuing operations before taxes     0.6       0.9       (0.3 )      
  Earnings from continuing operations     0.6       1.7       (1.1 )      
  Net earnings     0.6       1.7       (1.1 )      
                               
Effective income tax rate     (8.9 )%     (89.2 )%     80.3pts.        
                               
Average number of shares outstanding                              
(millions):                              
  Basic     37.1       36.8                
  Diluted     37.1       36.8                
                               
Shares adjusted for nonvested restricted awards                              
(millions):                              
  Basic     38.3       37.8                
  Diluted     38.3       37.8                
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF EARNINGS  
FOR THE 52 WEEKS ENDED DECEMBER 30, 2012 AND JANUARY 1, 2012  
(UNAUDITED)  
(In millions of dollars except per share data)  
                         
    2012     2011     Change     % Change  
                               
Revenue from services   $ 5,450.5     $ 5,551.0     $ (100.5 )   (1.8 )%
                               
Cost of services     4,553.9       4,667.7       (113.8 )   (2.4 )
                               
Gross profit     896.6       883.3       13.3     1.5  
                               
Selling, general and administrative expenses     821.2       825.6       (4.4 )   (0.6 )
                               
Asset impairments     3.1       -       3.1     NM  
                               
Earnings from operations     72.3       57.7       14.6     25.3  
                               
Other expense, net     (3.5 )     (0.1 )     (3.4 )   NM  
                               
Earnings from continuing operations before taxes     68.8       57.6       11.2     19.4  
                               
Income taxes     19.1       (7.3 )     26.4     363.5  
                               
Earnings from continuing operations     49.7       64.9       (15.2 )   (23.5 )
                               
Earnings (loss) from discontinued operations, net of tax     0.4       (1.2 )     1.6     NM  
                               
Net earnings   $ 50.1     $ 63.7     $ (13.6 )   (21.4 )%
                               
Basic earnings per share on common stock                              
  Earnings from continuing operations   $ 1.31     $ 1.72     $ (0.41 )   (23.8 )%
  Earnings (loss) from discontinued operations     0.01       (0.03 )     0.04     NM  
  Net earnings     1.32       1.69       (0.37 )   (21.9 )
                               
Diluted earnings per share on common stock                              
  Earnings from continuing operations   $ 1.31     $ 1.72     $ (0.41 )   (23.8 )%
  Earnings (loss) from discontinued operations     0.01       (0.03 )     0.04     NM  
  Net earnings     1.32       1.69       (0.37 )   (21.9 )
                               
                               
STATISTICS:                              
                               
Gross profit rate     16.5 %     15.9 %     0.6pts.        
                               
Selling, general and administrative expenses:                              
  % of revenue     15.1       14.9       0.2        
  % of gross profit     91.6       93.5       (1.9 )      
                               
% Return:                              
  Earnings from operations     1.3       1.0       0.3        
  Earnings from continuing operations before taxes     1.3       1.0       0.3        
  Earnings from continuing operations     0.9       1.2       (0.3 )      
  Net earnings     0.9       1.1       (0.2 )      
                               
Effective income tax rate     27.8 %     (12.6 )%     40.4pts.        
                               
Average number of shares outstanding                              
(millions):                              
  Basic     37.0       36.8                
  Diluted     37.0       36.8                
                               
Shares adjusted for nonvested restricted awards                              
(millions):                              
  Basic     38.0       37.6                
  Diluted     38.1       37.6                
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
                         
    Fourth Quarter  
                      Constant  
                      Currency  
    2012     2011     Change     Change  
AMERICAS                            
  Commercial                            
    Revenue from services (including fee-based income)   $ 662.3     $ 675.6     (2.0 )%   (2.1 )%
    Fee-based income     3.6       3.2     13.5     13.9  
    Gross profit     96.1       96.4     (0.3 )   (0.4 )
                                 
    Gross profit rate     14.5 %     14.3 %   0.2pts.        
                             
  PT                            
    Revenue from services (including fee-based income)   $ 255.6     $ 243.7     4.9 %   4.6 %
    Fee-based income     3.2       3.6     (12.3 )   (12.4 )
    Gross profit     38.9       38.0     2.4     2.2  
                                 
    Gross profit rate     15.2 %     15.6 %   (0.4)pts.        
                               
  Total Americas                            
    Revenue from services (including fee-based income)   $ 917.9     $ 919.3     (0.2 )%   (0.4 )%
    Fee-based income     6.8       6.8     (0.2 )   (0.1 )
    Gross profit     135.0       134.4     0.5     0.4  
    Total SG&A expenses     102.4       100.1     2.3     2.3  
    Earnings from operations     32.6       34.3     (4.8 )      
                                 
    Gross profit rate     14.7 %     14.6 %   0.1pts.        
    Expense rates:                            
      % of revenue     11.2       10.9     0.3        
      % of gross profit     75.8       74.5     1.3        
    Operating margin     3.6       3.7     (0.1 )      
                             
EMEA                            
  Commercial                            
    Revenue from services (including fee-based income)   $ 213.4     $ 238.8     (10.6 )%   (8.9 )%
    Fee-based income     4.9       6.0     (18.3 )   (17.3 )
    Gross profit     32.7       38.7     (15.6 )   (14.0 )
                                 
    Gross profit rate     15.3 %     16.2 %   (0.9)pts.        
                               
  PT                            
    Revenue from services (including fee-based income)   $ 43.0     $ 44.9     (4.2 )%   (2.1 )%
    Fee-based income     3.7       4.2     (12.7 )   (11.3 )
    Gross profit     10.3       11.3     (9.6 )   (7.8 )
                                 
    Gross profit rate     23.9 %     25.3 %   (1.4)pts.        
                               
  Total EMEA                            
    Revenue from services (including fee-based income)   $ 256.4     $ 283.7     (9.6 )%   (7.8 )%
    Fee-based income     8.6       10.2     (16.0 )   (14.8 )
    Gross profit     43.0       50.0     (14.3 )   (12.6 )
    SG&A expenses excluding restructuring charges     42.6       46.4     (8.3 )      
    Restructuring charges     1.3       -     NM        
    Total SG&A expenses     43.9       46.4     (5.6 )   (4.1 )
    Earnings from operations     (0.9 )     3.6     NM        
    Earnings from operations excluding restructuring charges     0.4       3.6     (91.7 )      
                                 
    Gross profit rate     16.7 %     17.7 %   (1.0)pts.        
    Expense rates (excluding restructuring charges):                            
      % of revenue     16.6       16.4     0.2        
      % of gross profit     99.3       92.8     6.5        
    Operating margin (excluding restructuring charges)     0.1       1.3     (1.2 )      
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
                         
    Fourth Quarter  
                      Constant  
                      Currency  
    2012     2011     Change     Change  
APAC                            
  Commercial                            
    Revenue from services (including fee-based income)   $ 84.9     $ 93.8     (9.5 )%   (12.4 )%
    Fee-based income     2.4       2.9     (18.5 )   (19.2 )
    Gross profit     11.7       13.2     (11.2 )   (13.6 )
                                 
    Gross profit rate     13.8 %     14.1 %   (0.3)pts.        
                               
  PT                            
    Revenue from services (including fee-based income)   $ 11.7     $ 12.3     (4.6 )%   (6.8 )%
    Fee-based income     2.9       3.1     (5.6 )   (8.0 )
    Gross profit     4.3       4.4     (1.5 )   (4.0 )
                                 
    Gross profit rate     36.7 %     35.5 %   1.2pts.        
                               
  Total APAC                            
    Revenue from services (including fee-based income)   $ 96.6     $ 106.1     (9.0 )%   (11.7 )%
    Fee-based income     5.3       6.0     (11.9 )   (13.4 )
    Gross profit     16.0       17.6     (8.8 )   (11.2 )
    Total SG&A expenses     15.9       17.9     (11.0 )   (13.3 )
    Earnings from operations     0.1       (0.3 )   NM        
                                 
    Gross profit rate     16.6 %     16.6 %   - pts.        
    Expense rates:                            
      % of revenue     16.5       16.9     (0.4 )      
      % of gross profit     99.3       101.7     (2.4 )      
    Operating margin     0.1       (0.3 )   0.4        
                             
OCG                            
    Revenue from services (including fee-based income)   $ 113.3     $ 94.4     20.1 %   20.0 %
    Fee-based income     13.8       10.8     26.9     27.1  
    Gross profit     29.0       23.0     26.3     26.3  
    Total SG&A expenses     25.8       22.2     16.1     16.2  
    Earnings from operations     3.2       0.8     302.0        
                                 
    Gross profit rate     25.6 %     24.3 %   1.3pts.        
    Expense rates:                            
      % of revenue     22.7       23.5     (0.8 )      
      % of gross profit     88.7       96.4     (7.7 )      
    Operating margin     2.9       0.9     2.0        
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
                         
    December Year to Date  
                      Constant  
                      Currency  
    2012     2011     Change     Change  
AMERICAS                            
  Commercial                            
    Revenue from services (including fee-based income)   $ 2,642.4     $ 2,660.9     (0.7 )%   - %
    Fee-based income     15.7       12.0     30.7     33.3  
    Gross profit     388.2       375.3     3.4     4.1  
                                 
    Gross profit rate     14.7 %     14.1 %   0.6pts.        
                               
  PT                            
    Revenue from services (including fee-based income)   $ 1,029.7     $ 982.8     4.8 %   4.8 %
    Fee-based income     14.5       13.3     8.5     8.6  
    Gross profit     159.7       147.8     8.0     8.1  
                                 
    Gross profit rate     15.5 %     15.0 %   0.5pts.        
                               
  Total Americas                            
    Revenue from services (including fee-based income)   $ 3,672.1     $ 3,643.7     0.8 %   1.3 %
    Fee-based income     30.2       25.3     19.0     20.3  
    Gross profit     547.9       523.1     4.7     5.2  
    Total SG&A expenses     405.8       396.4     2.4     3.0  
    Earnings from operations     142.1       126.7     12.0        
                                 
    Gross profit rate     14.9 %     14.4 %   0.5pts.        
    Expense rates:                            
      % of revenue     11.1       10.9     0.2        
      % of gross profit     74.1       75.8     (1.7 )      
    Operating margin     3.9       3.5     0.4        
                             
EMEA                            
  Commercial                            
    Revenue from services (including fee-based income)   $ 854.6     $ 990.1     (13.7 )%   (8.0 )%
    Fee-based income     22.4       24.9     (10.1 )   (4.2 )
    Gross profit     133.8       160.3     (16.6 )   (10.9 )
                                 
    Gross profit rate     15.7 %     16.2 %   (0.5)pts.        
                               
  PT                            
    Revenue from services (including fee-based income)   $ 168.3     $ 178.9     (5.9 )%   0.4 %
    Fee-based income     16.8       19.2     (12.7 )   (7.3 )
    Gross profit     43.0       47.4     (9.4 )   (3.4 )
                                 
    Gross profit rate     25.5 %     26.5 %   (1.0)pts.        
                               
  Total EMEA                            
    Revenue from services (including fee-based income)   $ 1,022.9     $ 1,169.0     (12.5 )%   (6.7 )%
    Fee-based income     39.2       44.1     (11.2 )   (5.5 )
    Gross profit     176.8       207.7     (14.9 )   (9.2 )
    SG&A expenses excluding restructuring charges     169.0       186.9     (9.7 )      
    Restructuring charges     (0.9 )     2.8     (132.3 )      
    Total SG&A expenses     168.1       189.7     (11.5 )   (6.0 )
    Earnings from operations     8.7       18.0     (51.6 )      
    Earnings from operations excluding restructuring charges     7.8       20.8     (62.5 )      
                                 
    Gross profit rate     17.3 %     17.8 %   (0.5)pts.        
    Expense rates (excluding restructuring charges):                            
      % of revenue     16.5       16.0     0.5        
      % of gross profit     95.6       90.1     5.5        
    Operating margin (excluding restructuring charges)     0.8       1.8     (1.0 )      
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
                         
    December Year to Date  
                      Constant  
                      Currency  
    2012     2011     Change     Change  
APAC                            
  Commercial                            
    Revenue from services (including fee-based income)   $ 343.2     $ 397.6     (13.7 )%   (13.2 )%
    Fee-based income     11.7       13.9     (15.7 )   (13.4 )
    Gross profit     50.1       55.7     (10.0 )   (9.3 )
                                 
    Gross profit rate     14.6 %     14.0 %   0.6pts.        
                               
  PT                            
  Revenue from services (including fee-based income)   $ 51.6     $ 51.4     0.5 %   1.2 %
    Fee-based income     15.8       15.3     3.1     2.9  
    Gross profit     21.0       20.6     1.9     2.0  
                                 
    Gross profit rate     40.6 %     40.1 %   0.5pts.        
                               
  Total APAC                            
    Revenue from services (including fee-based income)   $ 394.8     $ 449.0     (12.1 )%   (11.5 )%
    Fee-based income     27.5       29.2     (5.8 )   (4.8 )
    Gross profit     71.1       76.3     (6.8 )   (6.3 )
    Total SG&A expenses     73.4       77.0     (4.7 )   (4.1 )
    Earnings from operations     (2.3 )     (0.7 )   (207.4 )      
                                 
    Gross profit rate     18.0 %     17.0 %   1.0pts.        
    Expense rates:                            
      % of revenue     18.6       17.2     1.4        
      % of gross profit     103.3       101.0     2.3        
    Operating margin     (0.6 )     (0.2 )   (0.4 )      
                             
OCG                            
    Revenue from services (including fee-based income)   $ 396.1     $ 317.3     24.8 %   25.5 %
    Fee-based income     51.4       39.5     30.0     32.1  
    Gross profit     104.0       78.8     32.0     33.5  
    Total SG&A expenses     95.4       81.4     17.0     18.6  
    Earnings from operations     8.6       (2.6 )   NM        
                                 
    Gross profit rate     26.3 %     24.8 %   1.5pts.        
    Expense rates:                            
      % of revenue     24.1       25.7     (1.6 )      
      % of gross profit     91.6       103.4     (11.8 )      
    Operating margin     2.2       (0.8 )   3.0        
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEETS  
(UNAUDITED)  
(In millions of dollars)  
   
    Dec. 30, 2012     Jan. 1, 2012  
Current Assets                
  Cash and equivalents   $ 76.3     $ 81.0  
  Trade accounts receivable, less allowances of $10.4 and $13.4, respectively     1,013.9       944.9  
  Prepaid expenses and other current assets     57.5       50.6  
  Deferred taxes     44.9       38.2  
                   
    Total current assets     1,192.6       1,114.7  
                 
Property and Equipment, Net     89.9       90.6  
                 
Noncurrent Deferred Taxes     82.8       94.1  
                 
Goodwill, Net     89.5       90.2  
                 
Other Assets     180.9       152.1  
                 
Total Assets   $ 1,635.7     $ 1,541.7  
                 
Current Liabilities                
  Short-term borrowings   $ 64.1     $ 96.3  
  Accounts payable and accrued liabilities     295.6       237.2  
  Accrued payroll and related taxes     264.5       271.4  
  Accrued insurance     32.8       31.5  
  Income and other taxes     65.3       61.3  
                   
    Total current liabilities     722.3       697.7  
                 
Noncurrent Liabilities                
  Accrued insurance     43.5       53.5  
  Accrued retirement benefits     111.0       91.1  
  Other long-term liabilities     17.9       23.7  
                   
    Total noncurrent liabilities     172.4       168.3  
                 
Stockholders' Equity                
  Common stock     40.1       40.1  
  Treasury stock     (61.6 )     (66.9 )
  Paid-in capital     27.1       28.8  
  Earnings invested in the business     700.0       657.5  
  Accumulated other comprehensive income     35.4       16.2  
                   
    Total stockholders' equity     741.0       675.7  
                 
Total Liabilities and Stockholders' Equity   $ 1,635.7     $ 1,541.7  
                 
                 
STATISTICS:                
  Working Capital   $ 470.3     $ 417.0  
  Current Ratio     1.7       1.6  
  Debt-to-capital %     8.0 %     12.5 %
  Global Days Sales Outstanding     53       52  
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
FOR THE 52 WEEKS ENDED DECEMBER 30, 2012 AND JANUARY 1, 2012  
(UNAUDITED)  
(In millions of dollars)  
             
    2012     2011  
                 
Cash flows from operating activities                
  Net earnings   $ 50.1     $ 63.7  
  Noncash adjustments:                
    Impairment of assets     3.1       -  
    Depreciation and amortization     22.3       31.4  
    Provision for bad debts     1.1       4.3  
    Stock-based compensation     4.8       4.6  
    Other, net     1.3       (2.6 )
  Changes in operating assets and liabilities     (21.6 )     (82.3 )
                 
      Net cash from operating activities     61.1       19.1  
                 
Cash flows from investing activities                
  Capital expenditures     (21.5 )     (15.4 )
  Investment in equity affiliate     (6.6 )     -  
  Acquisition of companies, net of cash received     -       (6.5 )
  Other investing activities     -       1.2  
                   
      Net cash from investing activities     (28.1 )     (20.7 )
                 
Cash flows from financing activities                
  Net change in short-term borrowings     (31.9 )     79.2  
  Repayment of debt     -       (68.3 )
  Dividend payments     (7.6 )     (3.8 )
  Other financing activities     0.1       (1.0 )
                   
      Net cash from financing activities     (39.4 )     6.1  
                 
Effect of exchange rates on cash and equivalents     1.7       (4.0 )
                 
Net change in cash and equivalents     (4.7 )     0.5  
Cash and equivalents at beginning of period     81.0       80.5  
                 
                 
Cash and equivalents at end of period   $ 76.3     $ 81.0  
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
REVENUE FROM SERVICES  
(UNAUDITED)  
(In millions of dollars)  
                     
    Fourth Quarter (Commercial, PT and OCG)  
            % Change  
                  Constant  
    2012   2011   US$     Currency  
                         
Americas                        
  United States   $ 877.9   $ 883.8   (0.7 )%   (0.7 )%
  Canada     60.5     60.9   (0.8 )   (3.9 )
  Mexico     35.3     26.2   34.8     27.7  
  Puerto Rico     23.4     25.9   (9.6 )   (9.6 )
  Brazil     14.0     -   NM     NM  
Total Americas     1,011.1     996.8   1.4     1.3  
                         
EMEA                        
  France     58.8     71.2   (17.3 )   (14.1 )
  Switzerland     61.2     62.0   (1.4 )   0.9  
  Russia     33.9     33.4   1.7     1.2  
  United Kingdom     25.6     29.1   (11.9 )   (13.8 )
  Portugal     19.0     21.6   (12.2 )   (8.8 )
  Germany     16.4     20.1   (18.5 )   (15.2 )
  Norway     15.5     17.8   (12.9 )   (13.9 )
  Italy     14.6     17.7   (17.6 )   (14.3 )
  Other     19.0     17.7   7.1     9.3  
Total EMEA     264.0     290.6   (9.2 )   (7.4 )
                         
APAC                        
  Australia     33.9     35.1   (3.4 )   (5.8 )
  Singapore     26.5     24.4   8.4     2.9  
  Malaysia     18.0     17.6   2.6     (0.5 )
  New Zealand     12.9     13.0   (0.4 )   (6.0 )
  Other     9.0     18.8   (52.6 )   (50.3 )
Total APAC     100.3     108.9   (7.9 )   (10.7 )
                         
Total Kelly Services, Inc.   $ 1,375.4   $ 1,396.3   (1.5 )%   (1.5 )%
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
REVENUE FROM SERVICES  
(UNAUDITED)  
(In millions of dollars)  
                     
    December Year to Date (Commercial, PT and OCG)  
            % Change  
                  Constant  
    2012   2011   US$     Currency  
                         
Americas                        
  United States   $ 3,464.2   $ 3,445.4   0.5 %   0.5 %
  Canada     243.9     247.7   (1.6 )   (0.5 )
  Mexico     117.7     106.0   11.0     16.7  
  Puerto Rico     99.7     96.6   3.3     3.3  
  Brazil     60.7     -   NM     NM  
Total Americas     3,986.2     3,895.7   2.3     2.8  
                         
EMEA                        
  France     243.0     295.9   (17.9 )   (11.0 )
  Switzerland     235.6     239.8   (1.8 )   4.7  
  Russia     131.0     141.8   (7.6 )   (2.4 )
  United Kingdom     104.9     121.6   (13.8 )   (12.7 )
  Portugal     75.0     87.7   (14.5 )   (7.3 )
  Germany     70.3     82.8   (15.1 )   (7.9 )
  Norway     66.3     68.7   (3.5 )   0.5  
  Italy     59.1     71.0   (16.7 )   (9.9 )
  Other     67.4     85.1   (20.8 )   (14.5 )
Total EMEA     1,052.6     1,194.4   (11.9 )   (6.0 )
                         
APAC                        
  Australia     135.5     145.4   (6.9 )   (7.2 )
  Singapore     101.6     103.0   (1.4 )   (2.0 )
  Malaysia     72.9     72.1   1.2     2.1  
  New Zealand     52.4     50.8   3.2     1.0  
  Other     49.3     89.6   (45.0 )   (40.2 )
Total APAC     411.7     460.9   (10.7 )   (10.1 )
                         
Total Kelly Services, Inc.   $ 5,450.5   $ 5,551.0   (1.8 )%   (0.2 )%
 
 
KELLY SERVICES, INC. AND SUBSIDIARIES
 RECONCILIATION OF NON-GAAP MEASURES
 FOR THE 13 WEEKS ENDED DECEMBER 30, 2012 AND JANUARY 1, 2012
 (UNAUDITED)
 (In millions of dollars except per share data)
                             
  2012   2011      
  As reported   Restructuring Charges
(Note 1)
  Asset Impairments (Note 2)   Loss on Equity Investment
(Note 3)
  Adjusted Earnings   Earnings   % Change  
                                         
Revenue from services $ 1,375.4   $ -   $ -   $ -   $ 1,375.4   $ 1,396.3   (1.5 )%
                                         
Cost of services   1,153.2     -     -     -     1,153.2     1,172.0   (1.6 )
                                         
Gross profit   222.2     -     -     -     222.2     224.3   (0.9 )
                                         
Selling, general and administrative expenses   209.3     (1.3 )   -     -     208.0     211.6   (1.7 )
                                         
Asset impairments   3.1     -     (3.1 )   -     -     -   -  
                                         
Earnings from operations   9.8     1.3     3.1     -     14.2     12.7   11.8  
                                         
Other expense, net   (1.7 )   -     -     0.7     (1.0 )   -   NM  
                                         
Earnings from continuing operations before taxes   8.1     1.3     3.1     0.7     13.2     12.7   4.1  
                                         
Income taxes   (0.8 )   0.5     1.2     (0.3 )   0.6     (11.4 ) (106.5 )
                                         
Earnings from continuing operations $ 8.9   $ 0.8   $ 1.9   $ 1.0   $ 12.6   $ 24.1   (48.1 )%
                                         
                                         
Earnings per share from continuing operations:                                        
  Basic $ 0.23   $ 0.02   $ 0.05   $ 0.03   $ 0.33   $ 0.64   (48.4 )%
  Diluted $ 0.23   $ 0.02   $ 0.05   $ 0.03   $ 0.33   $ 0.64   (48.4 )%
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RECONCILIATION OF NON-GAAP MEASURES  
FOR THE 52 WEEKS ENDED DECEMBER 30, 2012 AND JANUARY 1, 2012  
(UNAUDITED)  
(In millions of dollars except per share data)  
                             
  2012   2011      
  As reported   Restructuring Charges
(Note 1)
  Asset Impairments (Note 2)   Loss on Equity Investment
(Note 3)
  Adjusted Earnings   Adjusted Earnings   % Change  
                                         
Revenue from services $ 5,450.5   $ -   $ -   $ -   $ 5,450.5   $ 5,551.0   (1.8 )%
                                         
Cost of services   4,553.9     -     -     -     4,553.9     4,667.7   (2.4 )
                                         
Gross profit   896.6     -     -     -     896.6     883.3   1.5  
                                         
Selling, general and administrative expenses   821.2     0.9     -     -     822.1     822.8   (0.1 )
                                         
Asset impairments   3.1     -     (3.1 )   -     -     -   -  
                                         
Earnings from operations   72.3     (0.9 )   3.1     -     74.5     60.5   23.2  
                                         
Other expense, net   (3.5 )   -     -     0.7     (2.8 )   (0.1 ) NM  
                                         
Earnings from continuing operations before taxes   68.8     (0.9 )   3.1     0.7     71.7     60.4   18.8  
                                         
Income taxes   19.1     0.5     1.2     (0.3 )   20.5     (7.3 ) (383.6 )
                                         
Earnings from continuing operations $ 49.7   $ (1.4 ) $ 1.9   $ 1.0   $ 51.2   $ 67.7   (24.4 )%
                                         
                                         
Earnings per share from continuing operations:                                        
  Basic $ 1.31   $ (0.04 ) $ 0.05   $ 0.03   $ 1.34   $ 1.80   (25.6 )%
  Diluted $ 1.31   $ (0.04 ) $ 0.05   $ 0.03   $ 1.34   $ 1.80   (25.6 )%
                                         
                   
    2011  
    As reported     Restructuring Charges
(Note 1)
    Adjusted Earnings  
                         
Revenue from services   $ 5,551.0     $ -     $ 5,551.0  
                         
Cost of services     4,667.7       -       4,667.7  
                         
Gross profit     883.3       -       883.3  
                         
Selling, general and administrative                        
expenses     825.6       (2.8 )     822.8  
                         
Asset impairments     -       -       -  
                         
Earnings from operations     57.7       2.8       60.5  
                         
Other expense, net     (0.1 )     -       (0.1 )
                         
Earnings from continuing operations before taxes     57.6       2.8       60.4  
                         
Income taxes     (7.3 )     -       (7.3 )
                         
Earnings from continuing operations   $ 64.9     $ 2.8     $ 67.7  
                         
Earnings per share from continuing operations:                        
  Basic   $ 1.72     $ 0.07     $ 1.80  
  Diluted   $ 1.72     $ 0.07     $ 1.80  
 
 
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, asset impairment charges and loss on equity investment is useful to understand the Company's fiscal 2012 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) In 2012, restructuring charges relate to severance and lease termination costs for EMEA Commercial branches which are in the process of closing, along with revisions of the estimated lease termination costs for EMEA Commercial branches that closed in prior years. In 2011, restructuring costs relate primarily to revisions of the estimated lease termination costs for EMEA Commercial branches that closed in prior years.
 
(2) Asset impairment charges relate to the write-off of previously capitalized costs associated with the PeopleSoft billing system.
 
(3) Loss on equity investment represents the difference between the fair value and book value of the North Asia entities contributed by the Company to the investment in TS Kelly Workforce Solutions.
 

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