SOURCE: Kelly Services

Kelly Services

February 04, 2016 07:30 ET

Kelly Services® Reports Strong Finish to the Year and Solid 2015 Results

TROY, MI--(Marketwired - February 04, 2016) - Kelly Services (NASDAQ: KELYA) (NASDAQ: KELYB)

Fourth Quarter Highlights

  • Earnings from operations triple from a year ago, excluding restructuring
  • Earnings per share of $0.88 versus $0.54, excluding restructuring, a 63% increase year-over-year
  • OCG segment revenue up 14% year-over-year (up 16% in constant currency)
  • Total Company revenue up 3% year-over-year (up 7% in constant currency)

Kelly Services (NASDAQ: KELYA) (NASDAQ: KELYB), a global leader in providing workforce solutions, today announced results for the fourth quarter and full year of 2015.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the fourth quarter of 2015 totaled $1.5 billion, a 3% increase (a 7% increase on a constant currency basis) compared to the corresponding quarter of 2014. Revenue for the full year totaled $5.5 billion, a 1% decrease (a 5% increase on a constant currency basis) compared to the prior year. Fourth quarter 2015 and fiscal 2015 include 14 and 53 weeks, respectively.

Earnings from operations for the fourth quarter of 2015 totaled $26.5 million, compared to $2.6 million reported for the fourth quarter of 2014. The results of operations in the fourth quarter of 2014 included restructuring charges of $6.2 million. Excluding the restructuring charges, earnings from operations were $8.8 million in the fourth quarter of 2014.

Earnings from operations for the full year of 2015 totaled $66.7 million compared to $21.9 million in 2014. Included in the results from operations for 2014 are restructuring charges of $12.0 million. Excluding this item, earnings from operations were $33.9 million in 2014.

Diluted earnings per share in the fourth quarter of 2015 were $0.88 compared to $0.44 per share in the fourth quarter of 2014. Included in diluted earnings per share for the fourth quarter of 2014 are restructuring charges of $0.10 per share. Excluding this item, diluted earnings per share for the fourth quarter of 2014 were $0.54 per share.

Diluted earnings per share for the full year of 2015 were $1.39 compared to $0.61 per share in 2014. The diluted earnings per share for 2014 included restructuring charges of $0.19 per share. Excluding this item, diluted earnings per share for 2014 were $0.81 per share.

Commenting on the fourth quarter, Camden stated, "Kelly's fourth quarter performance capped off a year of solid earnings growth, and we are very pleased with our strong operating leverage and strategic execution throughout 2015. All told, excluding the 2014 restructuring charges, we dropped nearly 70% of our full-year constant currency GP dollar growth to the bottom line. Kelly has entered 2016 as a more efficient organization keenly focused on profitability…and we expect our investments in PT and OCG to continue yielding results as we expand Kelly's role as a trusted talent advisor to our clients worldwide."

In conjunction with its fourth quarter and full year earnings release, Kelly Services has published a financial presentation regarding the fourth quarter and full year results on the Investor Relations page of our public website and will host a conference call at 9:00 a.m. (ET) on February 4, 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, the risk our intellectual 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, 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 developments or operational circumstances, 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 ), 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 2015 was $5.5 billion. Visit kellyservices.com and connect with us on FacebookLinkedIn, & Twitter.

KLYA-FIN

   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF EARNINGS  
FOR THE 14 WEEKS ENDED JANUARY 3, 2016 AND 13 WEEKS ENDED DECEMBER 28, 2014  
(UNAUDITED)  
(In millions of dollars except per share data)  
   
                      %     CC %  
    2015     2014     Change     Change     Change  
                                     
Revenue from services   $ 1,461.6     $ 1,425.0     $ 36.6     2.6 %   7.3 %
                                     
Cost of services     1,212.1       1,192.4       19.7     1.7        
                                     
Gross profit     249.5       232.6       16.9     7.2     11.7  
                                     
Selling, general and administrative expenses     223.0       230.0       (7.0 )   (3.1 )   0.5  
                                     
Earnings from operations     26.5       2.6       23.9     NM        
                                     
Other expense, net     0.7       1.1       (0.4 )   (40.9 )      
                                     
Earnings before taxes     25.8       1.5       24.3     NM        
                                     
Income tax (benefit) expense     (8.4 )     (15.5 )     7.1     46.1        
                                     
Net earnings   $ 34.2     $ 17.0     $ 17.2     99.5 %      
                                     
Basic earnings per share   $ 0.88     $ 0.44     $ 0.44     100.0 %      
Diluted earnings per share   $ 0.88     $ 0.44     $ 0.44     100.0 %      
                                     
                                     
STATISTICS:                                    
                                     
Gross profit rate     17.1 %     16.3 %     0.8   pts.          
                                     
Selling, general and administrative expenses:                                    
  % of revenue     15.3       16.1       (0.8 )            
  % of gross profit     89.4       98.8       (9.4 )            
                                     
% Return:                                    
  Earnings from operations     1.8       0.2       1.6              
  Earnings before taxes     1.8       0.1       1.7              
  Net earnings     2.3       1.2       1.1              
                                     
Effective income tax rate     (32.4 )%      (949.7 )%      917.3   pts.          
                                     
Average number of shares outstanding (millions):                                    
  Basic     38.0       37.7                      
  Diluted     38.0       37.7                      
                                     
Shares adjusted for nonvested restricted awards (millions):                                    
  Basic     38.9       38.9                      
  Diluted     38.9       38.9                      
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF EARNINGS  
FOR THE 53 WEEKS ENDED JANUARY 3, 2016 AND 52 WEEKS ENDED DECEMBER 28, 2014  
(UNAUDITED)  
(In millions of dollars except per share data)
 
   
                      %     CC %  
    2015     2014     Change     Change     Change  
                                     
Revenue from services   $ 5,518.2     $ 5,562.7     $ (44.5 )   (0.8 )%   4.7 %
                                     
Cost of services     4,597.9       4,654.3       (56.4 )   (1.2 )      
                                     
Gross profit     920.3       908.4       11.9     1.3     6.4  
                                     
Selling, general and administrative expenses     853.6       886.5       (32.9 )   (3.7 )   0.8  
                                     
Earnings from operations     66.7       21.9       44.8     206.2        
                                     
Other expense, net     4.2       5.3       (1.1 )   (19.9 )      
                                     
Earnings before taxes     62.5       16.6       45.9     277.4        
                                     
Income tax expense (benefit)     8.7       (7.1 )     15.8     221.4        
                                     
Net earnings   $ 53.8     $ 23.7     $ 30.1     126.9 %      
                                     
Basic earnings per share   $ 1.39     $ 0.61     $ 0.78     127.9 %      
Diluted earnings per share   $ 1.39     $ 0.61     $ 0.78     127.9 %      
                                     
                                     
STATISTICS:                                    
                                     
Gross profit rate     16.7 %     16.3 %     0.4   pts.
         
                                     
Selling, general and administrative expenses:                                    
  % of revenue     15.5       15.9       (0.4 )            
  % of gross profit     92.8       97.6       (4.8 )            
                                       
% Return:                                    
  Earnings from operations     1.2       0.4       0.8              
  Earnings before taxes     1.1       0.3       0.8              
  Net earnings     1.0       0.4       0.6              
                                     
Effective income tax rate     13.9 %     (43.2 )%     57.1   pts.          
                                     
Average number of shares outstanding (millions):                                    
  Basic     37.8       37.5                      
  Diluted     37.9       37.5                      
                                     
Shares adjusted for nonvested restricted awards (millions):                                    
  Basic     38.8       38.6                      
  Diluted     38.9       38.6                      
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
   
    Fourth Quarter  
                         
    2015     2014     %     CC %  
    (14 Wks)     (13 Wks)     Change     Change  
AMERICAS                            
  Commercial                            
    Revenue from services   $ 696.1     $ 694.5     0.2 %   2.7 %
    Staffing fee-based income included in revenue from services     3.7       4.0     (5.5 )   (3.2 )
    Gross profit     110.0       99.6     10.3     12.5  
    Gross profit rate     15.8       14.4 %   1.4   pts.     
  PT                            
    Revenue from services   $ 250.1     $ 232.9     7.4
%   7.8 %
    Staffing fee-based income included in revenue from services     4.5       3.9     17.0     18.7  
    Gross profit     43.0       37.5     14.5     15.0  
    Gross profit rate     17.2 %     16.1 %   1.1   pts.
   
  Total Americas                            
    Revenue from services   $ 946.2     $ 927.4     2.0
%   4.0 %
    Staffing fee-based income included in revenue from services     8.2       7.9     5.6     7.7  
    Gross profit     153.0       137.1     11.4     13.2  
    Total SG&A expenses     116.8       113.9     2.5     4.4  
    Earnings from operations     36.2       23.2     55.2        
                                 
    Gross profit rate     16.2 %     14.8 %   1.4   pts.
   
    Expense rates:                            
      % of revenue     12.3       12.3     -        
      % of gross profit     76.3       83.0     (6.7 )      
    Return on sales     3.8       2.5     1.3        
                             
EMEA                            
  Commercial                            
    Revenue from services   $ 200.5     $ 204.5     (2.0 )%   10.8 %
    Staffing fee-based income included in revenue from services     3.3       3.3     (0.8 )   15.8  
    Gross profit     27.5       29.6     (6.9 )   5.7  
    Gross profit rate     13.7 %     14.4 %   (0.7 )
pts.
   
  PT                            
    Revenue from services   $ 44.7     $ 44.8     (0.3 )%   12.3 %
    Staffing fee-based income included in revenue from services     2.4       2.8     (17.9 )   (3.7 )
    Gross profit     9.4       9.6     (3.4 )   10.3  
    Gross profit rate     21.0 %     21.7 %   (0.7 )
pts.
   
  Total EMEA                            
    Revenue from services   $ 245.2     $ 249.3     (1.7 )%   11.1 %
    Staffing fee-based income included in revenue from services     5.7       6.1     (8.6 )   6.9  
    Gross profit     36.9       39.2     (6.1 )   6.8  
    Total SG&A expenses     29.7       36.4     (18.4 )   (8.2 )
    Earnings from operations     7.2       2.8     152.4        
                                 
    Gross profit rate     15.0 %     15.7 %   (0.7 )
pts.
   
    Expense rates:                            
      % of revenue     12.1       14.6     (2.5 )      
      % of gross profit     80.6       92.8     (12.2 )      
    Return on sales     2.9       1.1     1.8        
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
   
      Fourth Quarter  
                             
      2015       2014     %     CC %  
      (14 Wks)       (13 Wks)     Change     Change  
APAC                            
  Commercial                            
    Revenue from services   $ 88.1     $ 91.3     (3.5 )%   11.3 %
    Staffing fee-based income included in revenue from services     1.3       2.0     (34.0 )   (26.1 )
    Gross profit     10.4       11.8     (12.1 )   1.0  
    Gross profit rate     11.8 %     12.9 %   (1.1
pts.    
  PT                            
    Revenue from services   $ 9.8     $ 11.2     (12.7 )%   0.6  
    Staffing fee-based income included in revenue from services     1.2       2.0     (38.0 )   (27.5 )
    Gross profit     2.4       3.3     (28.7 )   (17.4 )
    Gross profit rate     24.5 %     29.9 %   (5.4 )
pts.
   
  Total APAC                            
    Revenue from services   $ 97.9     $ 102.5     (4.5 )%   10.1  
    Staffing fee-based income included in revenue from services     2.5       4.0     (36.0 )   (26.8 )
    Gross profit     12.8       15.1     (15.7 )   (3.1 )
    Total SG&A expenses     11.2       13.1     (13.8 )   (1.4 )
    Earnings from operations     1.6       2.0     (27.5 )      
                             
    Gross profit rate     13.0 %     14.8 %   (1.8 )
pts.
   
    Expense rates:                            
      % of revenue     11.4       12.7     (1.3 )      
      % of gross profit     87.8       85.8     2.0        
    Return on sales     1.6       2.1     (0.5 )      
                             
OCG                            
    Revenue from services   $ 187.5     $ 164.7     13.8 %   15.6  
    Gross profit     48.0       42.3     13.8     16.1  
    Total SG&A expenses     34.0       32.6     4.0     6.4  
    Earnings from operations     14.0       9.7     47.1        
                             
    Gross profit rate     25.6 %     25.6 %   --   pts.
   
    Expense rates:                            
      % of revenue     18.1       19.8     (1.7 )      
      % of gross profit     70.7       77.4     (6.7 )      
    Return on sales     7.5       5.8     1.7        
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
   
                             
      December Year to Date  
                             
      2015       2014     %     CC %  
      (53 Wks)       (52 Wks)     Change     Change  
AMERICAS                            
  Commercial                            
    Revenue from services   $ 2,604.3     $ 2,609.6     (0.2 )%   2.0  
    Staffing fee-based income included in revenue from services     14.5       14.4     1.0     3.5  
    Gross profit     400.3       379.6     5.4     7.4  
    Gross profit rate     15.4 %     14.5 %   0.9   pts.
   
  PT                            
    Revenue from services   $ 971.9     $ 956.0     1.7 %   2.1  
    Staffing fee-based income included in revenue from services     17.6       15.6     13.0     14.1  
    Gross profit     165.0       155.9     5.9     6.3  
    Gross profit rate     17.0 %     16.3 %   0.7   pts.
   
  Total Americas                            
    Revenue from services   $ 3,576.2     $ 3,565.6     0.3 %   2.0  
    Staffing fee-based income included in revenue from services     32.1       30.0     7.2     9.0  
    Gross profit     565.3       535.5     5.5     7.1  
    Total SG&A expenses     456.6       446.8     2.2     3.7  
    Earnings from operations     108.7       88.7     22.7        
                             
    Gross profit rate     15.8 %     15.0 %   0.8   pts.
   
    Expense rates:                            
      % of revenue     12.8       12.5     0.3        
      % of gross profit     80.8       83.5     (2.7 )      
    Return on sales     3.0       2.5     0.5        
                             
EMEA                            
  Commercial                            
    Revenue from services   $ 773.5     $ 894.7     (13.6 )%   2.7  
    Staffing fee-based income included in revenue from services     13.2       17.3     (23.7 )   (5.8 )
    Gross profit     106.6       130.6     (18.4 )   (2.9 )
    Gross profit rate     13.8 %     14.6 %   (0.8 ) pts.
   
  PT                            
    Revenue from services   $ 171.5     $ 190.3     (9.8 )%   6.5  
    Staffing fee-based income included in revenue from services     10.1       13.5     (25.7 )   (8.8 )
    Gross profit     36.6       42.9     (14.8 )   2.0  
    Gross profit rate     21.3 %     22.6 %   (1.3 ) pts.
   
  Total EMEA                            
    Revenue from services   $ 945.0     $ 1,085.0     (12.9 )%   3.4  
    Staffing fee-based income included in revenue from services     23.3       30.8     (24.5 )   (7.1 )
    Gross profit     143.2       173.5     (17.5 )   (1.7 )
    SG&A expenses excluding restructuring charges     129.2       160.6     (19.6 )   (5.0 )
    Restructuring charges     -       0.8     (100.0 )   -  
    Total SG&A expenses     129.2       161.4     (20.0 )   (5.5 )
    Earnings from operations     14.0       12.1     16.1        
    Earnings from operations excluding restructuring charges     14.0       12.9     8.8        
                             
    Gross profit rate     15.2 %     16.0 %   (0.8 ) pts.
   
    Expense rates (excluding restructuring charges):                            
      % of revenue     13.7       14.8     (1.1 )      
      % of gross profit     90.2       92.5     (2.3 )      
    Return on sales (excluding restructuring charges)     1.5       1.2     0.3        
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
   
      December Year to Date  
                             
      2015       2014     %     CC %  
      (53 Wks)       (52 Wks)     Change     Change  
APAC                            
  Commercial                            
    Revenue from services   $ 347.2     $ 351.8     (1.3 )%   12.6  
    Staffing fee-based income included in revenue from services     6.0       7.9     (23.8 )   (14.7 )
    Gross profit     45.3       47.5     (4.6 )   8.3  
    Gross profit rate     13.0 %     13.5 %   (0.5 ) pts.    
  PT                            
    Revenue from services   $ 40.5     $ 40.4     0.4 %   14.9  
    Staffing fee-based income included in revenue from services     5.6       7.8     (27.3 )   (17.9 )
    Gross profit     10.5       12.7     (17.6 )   (6.3 )
    Gross profit rate     26.0 %     31.6 %   (5.6 ) pts.    
  Total APAC                            
    Revenue from services   $ 387.7     $ 392.2     (1.1 )%   12.9  
    Staffing fee-based income included in revenue from services     11.6       15.7     (25.5 )   (16.3 )
    Gross profit     55.8       60.2     (7.4 )   5.2  
    SG&A expenses excluding restructuring charges     46.7       56.4     (17.0 )   (5.9 )
    Restructuring charges     -       1.3     (100.0 )   -  
    Total SG&A expenses     46.7       57.7     (19.0 )   (8.1 )
    Earnings from operations     9.1       2.5     261.6        
    Earnings from operations excluding restructuring charges     9.1       3.8     134.2        
                             
    Gross profit rate     14.4 %     15.4 %   (1.0 ) pts.    
    Expense rates (excluding restructuring charges):                            
      % of revenue     12.1       14.4     (2.3 )      
      % of gross profit     83.9       93.6     (9.7 )      
    Return on sales (excluding restructuring charges)     2.3       1.0     1.3        
                             
OCG                            
    Revenue from services   $ 673.8     $ 586.8     14.8 %   16.6  
    Gross profit     160.6       143.6     11.9     14.2  
    Total SG&A expenses     132.1       127.3     3.7     6.4  
    Earnings from operations     28.5       16.3     75.8        
                             
    Gross profit rate     23.8 %     24.5 %   (0.7 ) pts.    
    Expense rates:                            
      % of revenue     19.6       21.7     (2.1 )      
      % of gross profit     82.2       88.7     (6.5 )      
    Return on sales     4.2       2.8     1.4        
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEETS  
(UNAUDITED)  
(In millions of dollars)  
   
                 
      January 3, 2016       Dec. 28, 2014  
Current Assets                
  Cash and equivalents   $ 42.2     $ 83.1  
  Trade accounts receivable, less allowances of $10.5 and $10.7, respectively     1,139.1
      1,122.8
 
  Prepaid expenses and other current assets     45.8       47.9  
  Deferred taxes     -       34.4  
Total current assets     1,227.1       1,288.2  
                 
Property and Equipment, Net     88.9       93.0  
                 
Noncurrent Deferred Taxes     189.3       146.3  
                 
Goodwill, Net     90.3       90.3  
                 
Other Assets     344.0       300.1  
                 
Total Assets   $ 1,939.6     $ 1,917.9  
                 
Current Liabilities                
  Short-term borrowings   $ 55.5     $ 91.9  
  Accounts payable and accrued liabilities     405.5       364.0  
  Accrued payroll and related taxes     268.1       308.5  
  Accrued insurance     26.7       26.9  
  Income and other taxes     60.0       68.8  
                 
Total current liabilities     815.8       860.1  
                 
Noncurrent Liabilities                
  Accrued insurance     40.0       43.9  
  Accrued retirement benefits     141.0       140.8  
  Other long-term liabilities     47.4       39.4  
                 
Total noncurrent liabilities     228.4       224.1  
                 
Stockholders' Equity                
  Common stock     40.1       40.1  
  Treasury stock     (44.3 )     (49.8 )
  Paid-in capital     25.4       24.9  
  Earnings invested in the business     813.5       767.4  
  Accumulated other comprehensive income     60.7       51.1  
                 
Total stockholders' equity     895.4       833.7  
                 
Total Liabilities and Stockholders' Equity   $ 1,939.6     $ 1,917.9  
                 
                 
STATISTICS:                
  Working Capital   $ 411.3     $ 428.1  
  Current Ratio     1.5       1.5  
  Debt-to-capital %     5.8 %     9.9 %
  Global Days Sales Outstanding     54       54  
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
FOR THE 53 WEEKS ENDED JANUARY 3, 2016 AND 52 WEEKS ENDED DECEMBER 28, 2014  
(UNAUDITED)  
(In millions of dollars)  
   
         
      2015       2014  
Cash flows from operating activities:                
  Net earnings   $ 53.8     $ 23.7  
  Noncash adjustments:                
    Depreciation and amortization     22.3       21.7  
    Provision for bad debts     3.7       5.3  
    Stock-based compensation     6.1       5.3  
    Other, net     (4.7 )     (2.2 )
  Changes in operating assets and liabilities     (57.7 )     (123.8 )
                 
    Net cash from (used in) operating activities     23.5       (70.0 )
                 
Cash flows from investing activities:                
  Capital expenditures     (16.9 )     (21.7 )
  Investment in equity affiliate     (0.5 )     (5.7 )
  Other investing activities     (0.2 )     0.2  
                 
    Net cash used in investing activities     (17.6 )     (27.2 )
                 
Cash flows from financing activities:                
  Net change in short-term borrowings     (34.7 )     63.9  
  Dividend payments     (7.7 )     (7.6 )
  Other financing activities     0.2       0.3  
                 
    Net cash (used in) from financing activities     (42.2 )     56.6  
                 
Effect of exchange rates on cash and equivalents     (4.6
)     (2.0 )
                 
Net change in cash and equivalents     (40.9 )     (42.6 )
Cash and equivalents at beginning of period     83.1       125.7  
                 
                 
Cash and equivalents at end of period   $ 42.2     $ 83.1  
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
REVENUE FROM SERVICES  
(UNAUDITED)  
(In millions of dollars)  
   
      Fourth Quarter (Commercial, PT and OCG)  
                         
      2015     2014   %     CC %  
      (14 Wks)     (13 Wks)   Change     Change  
                         
Americas                        
  United States   $ 998.8   $ 933.9   6.9 %   6.9 %
  Canada     38.0     50.0   (24.0 )   (11.0 )
  Mexico     35.3     36.7   (3.9 )   16.3  
  Puerto Rico     24.7     26.6   (7.1 )   (7.1 )
  Brazil     8.7     13.9   (37.5 )   (1.7 )
Total Americas     1,105.5     1,061.1   4.2     6.0  
                         
EMEA                        
  France     65.6     66.4   (1.1 )   12.8  
  Switzerland     55.5     57.8   (4.0 )   (1.3 )
  Portugal     33.8     32.4   4.2     18.9  
  United Kingdom     26.7     23.2   15.1     20.3  
  Russia     18.2     20.9   (12.9 )   22.2  
  Germany     16.2     16.8   (4.0 )   9.5  
  Italy     14.5     13.9   3.9     18.7  
  Norway     9.7     11.9   (18.1 )   2.1  
  Other     13.0     13.6   (4.4 )   9.4  
Total EMEA     253.2     256.9   (1.4 )   11.3  
                         
APAC                        
  Singapore     33.0     32.7   0.7     9.5  
  Australia     31.1     32.6   (4.6 )   13.5  
  Malaysia     14.1     16.2   (12.7 )   11.4  
  New Zealand     11.2     13.2   (14.5 )   0.4  
  Other     13.5     12.3   9.2     19.5  
Total APAC     102.9     107.0   (3.8 )   11.0  
                         
Total Kelly Services, Inc.   $ 1,461.6   $ 1,425.0   2.6 %   7.3 %
 
 
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
 
      December Year to Date (Commercial, PT and OCG)  
                         
      2015     2014   %     CC %  
      (53 Wks)     (52 Wks)   Change     Change  
                         
Americas                        
  United States   $ 3,705.2   $ 3,535.8   4.8 %   4.8 %
  Canada     160.2     198.2   (19.2 )   (6.9 )
  Mexico     130.5     139.0   (6.1 )   11.9  
  Puerto Rico     99.9     105.0   (4.8 )   (4.8 )
  Brazil     42.9     57.1   (24.9 )   1.7  
Total Americas     4,138.7     4,035.1   2.6     4.2  
                         
EMEA                        
  France     246.0     268.6   (8.4 )   9.4  
  Switzerland     216.2     253.5   (14.7 )   (10.3 )
  Portugal     132.5     124.8   6.2     27.0  
  United Kingdom     105.1     105.6   (0.4 )   7.3  
  Russia     75.6     117.3   (35.5 )   3.2  
  Germany     59.3     67.5   (12.3 )   4.7  
  Italy     54.0     60.2   (10.3 )   7.1  
  Norway     39.2     55.5   (29.5 )   (9.6 )
  Other     45.8     64.5   (29.0 )   (15.2 )
Total EMEA     973.7     1,117.5   (12.9 )   3.3  
                         
APAC                        
  Singapore     129.9     127.5   1.9     10.5  
  Australia     123.2     121.4   1.5     21.8  
  Malaysia     59.5     66.2   (10.1 )   6.7  
  New Zealand     41.4     51.4   (19.4 )   (4.4 )
  Other     51.8     43.6   18.6     26.9  
Total APAC     405.8     410.1   (1.0 )   13.1  
                         
Total Kelly Services, Inc.   $ 5,518.2   $ 5,562.7   (0.8 )%   4.7 %
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RECONCILIATION OF NON-GAAP MEASURES  
FOR THE 14 WEEKS ENDED JANUARY 3, 2016 AND 13 WEEKS ENDED DECEMBER 28, 2014  
(UNAUDITED)  
(In millions of dollars except per share data)  
   
      2015       2014        
      As reported       Adjusted Earnings     % Change  
                       
Revenue from services   $ 1,461.6     $ 1,425.0     2.6 %
                       
Cost of services     1,212.1       1,192.4     1.7  
                       
Gross profit     249.5       232.6     7.2  
                       
SG&A expenses     223.0       223.8     (0.4 )
                       
Earnings from operations     26.5       8.8     196.7  
                       
Other expense, net     0.7       1.1     (40.9 )
                       
Earnings before taxes     25.8       7.7     229.2  
                       
Inc. tax (benefit) expense*     (8.4 )     (13.1 )   36.2  
                       
Net earnings   $ 34.2     $ 20.8     63.1 %
                       
Earnings per share:                      
  Basic   $ 0.88     $ 0.54     63.0 %
  Diluted   $ 0.88     $ 0.54     63.0 %
                       
* Income tax benefit for the fourth quarters of 2015 and 2014 includes $13.9 million and $13.6 million, respectively, related to the retroactive reinstatement of work opportunity credits for the entire year.  
                       
      2014  
      As reported       Restructuring Charges
(Note 1)
    Adjusted Earnings  
                       
Revenue from services   $ 1,425.0     $ -   $ 1,425.0  
                       
Cost of services     1,192.4       -     1,192.4  
                       
Gross profit     232.6       -     232.6  
                       
SG&A expenses     230.0       (6.2 )   223.8  
                       
Earnings from operations     2.6       6.2     8.8  
                       
Other expense, net     1.1       -     1.1  
                       
Earnings before taxes     1.5       6.2     7.7  
                       
Inc. tax (benefit) expense     (15.5 )     2.4     (13.1 )
                       
Net earnings   $ 17.0     $ 3.8   $ 20.8  
                       
Earnings per share:                      
  Basic   $ 0.44     $ 0.10   $ 0.54  
  Diluted   $ 0.44     $ 0.10   $ 0.54  
                       
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 53 WEEKS ENDED JANUARY 3, 2016 AND 52 WEEKS ENDED DECEMBER 28, 2014  
(UNAUDITED)  
(In millions of dollars except per share data)  
   
      2015       2014          
      As reported       Adjusted Earnings       % Change  
                         
Revenue from services   $ 5,518.2     $ 5,562.7       (0.8 )%
                         
Cost of services     4,597.9       4,654.3       (1.2 )
                         
Gross profit     920.3       908.4       1.3  
                         
SG&A expenses     853.6       874.5       (2.4 )
                         
Earnings from operations     66.7       33.9       97.2  
                         
Other expense, net     4.2       5.3       (19.9 )
                         
Earnings before taxes     62.5       28.6       118.6  
                         
Inc. tax expense (benefit)     8.7       (2.6 )     432.2  
                         
Net earnings   $ 53.8     $ 31.2       72.4 %
                         
Earnings per share:                        
Basic   $ 1.39     $ 0.81       71.6 %
Diluted   $ 1.39     $ 0.81       71.6 %
                         
      2014  
      As reported
      Restructuring Charges 
(Note 1)
      Adjusted Earnings  
                         
Revenue from services   $ 5,562.7     $ -     $ 5,562.7  
                         
Cost of services     4,654.3       -       4,654.3  
                         
Gross profit     908.4       -       908.4  
                         
SG&A expenses     886.5       (12.0 )     874.5  
                         
Earnings from operations     21.9       12.0       33.9  
                         
Other expense, net     5.3       -       5.3  
                         
Earnings before taxes     16.6       12.0       28.6  
                         
Inc. tax (benefit) expense     (7.1 )     4.5       (2.6 )
                         
Net earnings   $ 23.7     $ 7.5     $ 31.2  
                         
Earnings per share:                        
Basic   $ 0.61     $ 0.19     $ 0.81  
Diluted   $ 0.61     $ 0.19     $ 0.81  
 
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 SERIVCES, 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 financial performance and increases comparability. Specifically, Management believes that excluding this item allows for a more meaningful comparison of current period operating performance with the operating results of prior periods. These non-GAAP measures may have limitations as analytical tools because they exclude items which can have a material impact on cash flow and earnings per share. As a result, Management considers these measures, along with reported results, when it reviews and evaluates the Company's financial performance. Management believes that these measures provide greater transparency to investors and provide insight into how Management is evaluating the Company's financial performance. Non-GAAP measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

(1) Restructuring charges in 2014 includes costs related to the U.S. management simplification restructuring plan, costs incurred for exiting the staffing business in Sweden, and costs related to closing branches in Australia and consolidating back office functions in Australia and New Zealand.

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