SOURCE: Kelly Services

Kelly Services

November 04, 2015 07:30 ET

Kelly Services® Reports Strong Third Quarter 2015 Earnings and EPS Growth

TROY, MI--(Marketwired - Nov 4, 2015) - Kelly Services (NASDAQ: KELYA) (NASDAQ: KELYB)

Quarterly Highlights

  • Earnings from operations up 51%, excluding restructuring (up 72% in constant currency)
  • Earnings per share of $0.23 versus $0.10, excluding restructuring, a 130% increase year-over-year
  • OCG segment revenue up 15% year-over-year (up 17% in constant currency)
  • Total Company revenue down 3% year-over-year (up 3% in constant currency)

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

Carl T. Camden, President and Chief Executive Officer, announced revenue for the third quarter of 2015 totaled $1.4 billion, a 3% decrease (a 3% increase on a constant currency basis) compared to the corresponding quarter of 2014.

Earnings from operations for the third quarter of 2015 totaled $16.6 million, compared to $7.1 million reported for the third quarter of 2014. Included in the results of operations in the third quarter of 2014 are restructuring charges of $4.0 million. Excluding the restructuring charges, earnings from operations were $11.1 million in the third quarter of 2014.

Diluted earnings per share in the third quarter of 2015 were $0.23 compared to $0.03 per share in the third quarter of 2014. Adjusted earnings per share were $0.10 in the third quarter of 2014. Included in the third quarter of 2015 was a foreign exchange impact of $0.06 per share.

Commenting on the third quarter, Camden stated, "Our third quarter results confirm that Kelly is operating as a more efficient organization, delivering both top-line growth and operating leverage. Excluding the 2014 restructuring charges, we dropped nearly 50% of our constant currency GP growth to the bottom line during the quarter; our 2014 investments in PT and OCG are continuing to yield results; and we're expanding Kelly's role as a trusted talent advisor to many of the world's top companies."

Kelly also reported that on November 3, its board of directors declared a dividend of $0.05 per share. The dividend is payable December 4 to shareholders of record as of the close of business on November 16.

In conjunction with its third quarter earnings release, Kelly Services has published a financial presentation regarding the third quarter results on the Investor Relations page of our public website and will host a conference call at 9:00 a.m. (ET) on November 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, 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, 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 SEPTEMBER 27, 2015 AND SEPTEMBER 28, 2014  
(UNAUDITED)  
(In millions of dollars except per share data)  
                        %     CC %  
    2015     2014     Change       Change     Change  
                                       
Revenue from services   $ 1,351.0     $ 1,396.4     $ (45.4 )     (3.2 )%   3.0 %
                                       
Cost of services     1,122.8       1,171.0       (48.2 )     (4.1 )      
                                       
Gross profit     228.2       225.4       2.8       1.3     7.2  
                                       
Selling, general and administrative expenses     211.6       218.3       (6.7 )     (3.0 )   2.0  
                                       
Earnings from operations     16.6       7.1       9.5       134.9        
                                       
Other expense, net     --       2.2       (2.2 )     (97.7 )      
                                       
Earnings before taxes     16.6       4.9       11.7       242.2        
                                       
Income tax expense     7.5       3.5       4.0       112.6        
                                       
Net earnings   $ 9.1     $ 1.4     $ 7.7       NM %      
                                       
Basic earnings per share   $ 0.23     $ 0.03     $ 0.20       NM %      
Diluted earnings per share   $ 0.23     $ 0.03     $ 0.20       NM %      
                                       
                                       
STATISTICS:                                      
                                       
Gross profit rate     16.9 %     16.1 %     0.8     pts.          
                                       
Selling, general and administrative expenses:                                      
  % of revenue     15.7       15.6       0.1                
  % of gross profit     92.7       96.9       (4.2 )              
                                       
% Return:                                      
Earnings from operations     1.2       0.5       0.7                
Earnings before taxes     1.2       0.3       0.9                
Net earnings     0.7       0.1       0.6                
                                       
Effective income tax rate     45.2 %     72.7 %     (27.5 )   pts.          
                                       
Average number of shares outstanding (millions):                                      
  Basic     37.9       37.6                        
  Diluted     37.9       37.6                        
                                       
Shares adjusted for nonvested restricted awards (millions):                                      
  Basic     38.8       38.5                        
  Diluted     38.8       38.5                        
                                       
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF EARNINGS  
FOR THE 39 WEEKS ENDED SEPTEMBER 27, 2015 AND SEPTEMBER 28, 2014  
(UNAUDITED)  
(In millions of dollars except per share data)  
                        %     CC %  
    2015     2014     Change       Change     Change  
                                       
Revenue from services   $ 4,056.6     $ 4,137.7     $ (81.1 )     (2.0 )%   3.7 %
                                       
Cost of services     3,385.8       3,461.9       (76.1 )     (2.2 )      
                                       
Gross profit     670.8       675.8       (5.0 )     (0.7 )   4.6  
                                       
Selling, general and administrative expenses     630.6       656.5       (25.9 )     (4.0 )   0.9  
                                       
Earnings from operations     40.2       19.3       20.9       110.9        
                                       
Other expense, net     3.5       4.2       (0.7 )     (14.5 )      
                                       
Earnings before taxes     36.7       15.1       21.6       145.7        
                                       
Income tax expense     17.1       8.4       8.7       104.4        
                                       
Net earnings   $ 19.6     $ 6.7     $ 12.9       198.2 %      
                                       
Basic earnings per share   $ 0.51     $ 0.17     $ 0.34       200.0 %      
Diluted earnings per share   $ 0.51     $ 0.17     $ 0.34       200.0 %      
                                       
                                       
STATISTICS:                                      
                                       
Gross profit rate     16.5 %     16.3 %     0.2     pts.          
                                       
Selling, general and administrative expenses:                                      
  % of revenue     15.5       15.9       (0.4 )              
  % of gross profit     94.0       97.2       (3.2 )              
                                       
% Return:                                      
  Earnings from operations     1.0       0.5       0.5                
  Earnings before taxes     0.9       0.4       0.5                
  Net earnings     0.5       0.2       0.3                
                                       
Effective income tax rate     46.5 %     55.9 %     (9.4 )   pts.          
                                       
Average number of shares outstanding (millions):                                      
  Basic     37.8       37.5                        
  Diluted     37.8       37.5                        
                                       
Shares adjusted for nonvested restricted awards (millions):                                      
  Basic     38.8       38.5                        
  Diluted     38.8       38.5                        
                                       
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
                         
    Third Quarter  
                      Constant  
                      Currency  
    2015     2014     Change     Change  
AMERICAS                            
  Commercial                            
    Revenue from services   $ 615.5     $ 640.8     (4.0 )%   (1.1) %
    Staffing fee-based income included in revenue from services     3.8       3.8     (0.1 )   2.8  
    Gross profit     96.6       91.7     5.4     7.9  
    Gross profit rate     15.7 %     14.3 %   1.4   pts.    
  PT                            
    Revenue from services   $ 242.8     $ 242.5     0.1 %   0.6 %
    Staffing fee-based income included in revenue from services     4.7       4.4     8.6     9.7  
    Gross profit     41.0       39.6     3.6     4.1  
    Gross profit rate     16.9 %     16.3 %   0.6   pts.    
  Total Americas                            
    Revenue from services   $ 858.3     $ 883.3     (2.8 )%   (0.6) %
    Staffing fee-based income included in revenue from services     8.5       8.2     4.6     6.5  
    Gross profit     137.6       131.3     4.8     6.7  
    Total SG&A expenses     113.7       110.8     2.6     4.5  
    Earnings from operations     23.9       20.5     16.9        
                             
  Gross profit rate     16.0 %     14.9 %   1.1   pts.    
  Expense rates:                            
    % of revenue     13.2       12.5     0.7        
    % of gross profit     82.7       84.5     (1.8 )      
  Return on sales     2.8       2.3     0.5        
                             
EMEA                            
  Commercial                            
    Revenue from services   $ 199.0     $ 231.3     (13.9 )%   2.6 %
    Staffing fee-based income included in revenue from services     3.2       4.2     (23.6 )   (4.5 )
    Gross profit     27.7       33.6     (17.4 )   (1.4 )
    Gross profit rate     13.9 %     14.5 %   (0.6 ) pts.    
  PT                            
    Revenue from services   $ 43.6     $ 48.1     (9.3 )%   7.5 %
    Staffing fee-based income included in revenue from services     2.6       3.5     (24.1 )   (6.2 )
    Gross profit     9.4       10.9     (13.3 )   4.6  
    Gross profit rate     21.6 %     22.6 %   (1.0 ) pts.    
  Total EMEA                            
    Revenue from services   $ 242.6     $ 279.4     (13.1 )%   3.5 %
    Staffing fee-based income included in revenue from services     5.8       7.7     (23.8 )   (5.3 )
    Gross profit     37.1       44.5     (16.4 )   0.1  
    Total SG&A expenses     31.8       40.0     (20.7 )   (6.2 )
    Earnings from operations     5.3       4.5     22.4        
                                 
    Gross profit rate     15.3 %     15.9 %   (0.6 ) pts.    
    Expense rates:                            
      % of revenue     13.1       14.3     (1.2 )      
      % of gross profit     85.4       90.0     (4.6 )      
    Return on sales     2.2       1.6     0.6        
                             
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
                           
    Third Quarter  
                        Constant  
                        Currency  
    2015     2014     Change       Change  
APAC                              
  Commercial                              
    Revenue from services   $ 83.2     $ 91.0     (8.5 )%     9.2 %
    Staffing fee-based income included in revenue from services     1.4       2.0     (28.5 )     (16.7 )
    Gross profit     10.7       11.7     (8.5 )     9.1  
    Gross profit rate     12.8 %     12.8 %   --     pts.    
  PT                              
    Revenue from services   $ 9.9     $ 10.6     (6.4 )%     11.8 %
    Staffing fee-based income included in revenue from services     1.3       2.0     (34.3 )     (22.6 )
    Gross profit     2.5       3.3     (24.6 )     (10.8 )
    Gross profit rate     25.4 %     31.5 %   (6.1 )   pts.    
  Total APAC                              
    Revenue from services   $ 93.1     $ 101.6     (8.3 )%     9.5 %
    Staffing fee-based income included in revenue from services     2.7       4.0     (31.4 )     (19.7 )
    Gross profit     13.2       15.0     (12.1 )     4.7  
    SG&A expenses excluding restructuring charges     11.1       14.2     (21.6 )        
    Restructuring charges     --       0.3     (100.0 )        
    Total SG&A expenses     11.1       14.5     (23.2 )     (8.8 )
    Earnings from operations     2.1       0.5     297.9          
    Earnings from operations excluding restructuring charges     2.1       0.8     154.9          
                                   
    Gross profit rate     14.2 %     14.8 %   (0.6 )   pts.    
    Expense rates (excluding restructuring charges):                              
      % of revenue     11.9       14.0     (2.1 )        
      % of gross profit     84.3       94.6     (10.3 )        
    Return on sales (excluding restructuring charges)     2.2       0.8     1.4          
                               
OCG                              
    Revenue from services   $ 171.8     $ 149.8     14.7 %     16.8 %
    Gross profit     41.4       35.8     15.5       18.4  
    Total SG&A expenses     33.2       32.2     3.2       6.3  
    Earnings from operations     8.2       3.6     123.7          
                                   
    Gross profit rate     24.1 %     23.9 %   0.2     pts.    
    Expense rates:                              
      % of revenue     19.3       21.5     (2.2 )        
      % of gross profit     80.2       89.8     (9.6 )        
    Return on sales     4.8       2.4     2.4          
                               
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
                           
    September Year to Date  
                        Constant  
                        Currency  
    2015     2014     Change       Change  
AMERICAS                              
  Commercial                              
    Revenue from services   $ 1,908.2     $ 1,915.1     (0.4 )%     1.8 %
    Staffing fee-based income included in revenue from services     10.8       10.4     3.4       6.0  
    Gross profit     290.3       280.0     3.7       5.6  
    Gross profit rate     15.2 %     14.6 %   0.6     pts.    
  PT                              
    Revenue from services   $ 721.8     $ 723.1     (0.2 )%     0.2 %
    Staffing fee-based income included in revenue from services     13.1       11.7     11.7       12.6  
    Gross profit     122.0       118.4     3.1       3.6  
    Gross profit rate     16.9 %     16.4 %   0.5     pts.    
  Total Americas                              
    Revenue from services   $ 2,630.0     $ 2,638.2     (0.3 )%     1.4 %
    Staffing fee-based income included in revenue from services     23.9       22.1     7.7       9.5  
    Gross profit     412.3       398.4     3.5       5.0  
    Total SG&A expenses     339.8       332.9     2.0       3.5  
    Earnings from operations     72.5       65.5     11.0          
                                   
    Gross profit rate     15.7 %     15.1 %   0.6     pts.    
    Expense rates:                              
      % of revenue     12.9       12.6     0.3          
      % of gross profit     82.4       83.6     (1.2 )        
    Return on sales     2.8       2.5     0.3          
                               
EMEA                              
  Commercial                              
    Revenue from services   $ 573.0     $ 690.2     (17.0 )%     0.3 %
    Staffing fee-based income included in revenue from services     9.9       14.0     (29.2 )     (11.0 )
    Gross profit     79.1       101.0     (21.7 )     (5.4 )
    Gross profit rate     13.8 %     14.6 %   (0.8 )   pts.    
  PT                              
    Revenue from services   $ 126.8     $ 145.5     (12.8 )%     4.7 %
    Staffing fee-based income included in revenue from services     7.7       10.7     (27.7 )     (10.2 )
    Gross profit     27.2       33.3     (18.1 )     (0.4 )
    Gross profit rate     21.5 %     22.8 %   (1.3 )   pts.    
  Total EMEA                              
    Revenue from services   $ 699.8     $ 835.7     (16.3 )%     1.1 %
    Staffing fee-based income included in revenue from services     17.6       24.7     (28.5 )     (10.7 )
    Gross profit     106.3       134.3     (20.8 )     (4.1 )
    SG&A expenses excluding restructuring charges     99.5       124.2     (19.9 )        
    Restructuring charges     --       0.8     (100.0 )        
    Total SG&A expenses     99.5       125.0     (20.4 )     (4.7 )
    Earnings from operations     6.8       9.3     (25.5 )        
    Earnings from operations excluding restructuring charges     6.8       10.1     (31.5 )        
                                   
    Gross profit rate     15.2 %     16.1 %   (0.9 )   pts.    
    Expense rates (excluding restructuring charges):                              
      % of revenue     14.2       14.9     (0.7 )        
      % of gross profit     93.5       92.5     1.0          
    Return on sales (excluding restructuring charges)     1.0       1.2     (0.2 )        
                               
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
                           
    September Year to Date  
                        Constant  
                        Currency  
    2015     2014     Change       Change  
APAC                              
  Commercial                              
    Revenue from services   $ 259.1     $ 260.5     (0.5 )%     13.1 %
    Staffing fee-based income included in revenue from services     4.7       5.9     (20.3 )     (10.8 )
    Gross profit     34.9       35.7     (2.2 )     10.8  
    Gross profit rate     13.5 %     13.7 %   (0.2 )   pts.    
  PT                              
    Revenue from services   $ 30.7     $ 29.2     5.4 %     20.5 %
    Staffing fee-based income included in revenue from services     4.4       5.8     (23.7 )     (14.6 )
    Gross profit     8.1       9.4     (13.6 )     (2.4 )
    Gross profit rate     26.4 %     32.2 %   (5.8 )   pts.    
  Total APAC                              
    Revenue from services   $ 289.8     $ 289.7     0.1 %     13.8 %
    Staffing fee-based income included in revenue from services     9.1       11.7     (22.0 )     (12.7 )
    Gross profit     43.0       45.1     (4.6 )     8.0  
    SG&A expenses excluding restructuring charges     35.5       43.3     (18.0 )        
    Restructuring charges     --       1.3     (100.0 )        
    Total SG&A expenses     35.5       44.6     (20.5 )     (10.1 )
    Earnings from operations     7.5       0.5     NM          
    Earnings from operations excluding restructuring charges     7.5       1.8     338.5          
                                   
    Gross profit rate     14.8 %     15.6 %   (0.8 )%   pts.    
    Expense rates (excluding restructuring charges):                              
      % of revenue     12.3       15.0     (2.7 )        
      % of gross profit     82.7       96.2     (13.5 )        
    Return on sales (excluding restructuring charges)     2.6       0.6     2.0          
                               
OCG                              
    Revenue from services   $ 486.3     $ 422.1     15.2 %     17.0 %
    Gross profit     112.6       101.3     11.1       13.4  
    Total SG&A expenses     98.1       94.7     3.6       6.4  
    Earnings from operations     14.5       6.6     116.7          
                                   
    Gross profit rate     23.1 %     24.0 %   (0.9 )   pts.    
    Expense rates:                              
      % of revenue     20.2       22.4     (2.2 )        
      % of gross profit     87.1       93.4     (6.3 )        
    Return on sales     3.0       1.6     1.4          
                               
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEETS  
(UNAUDITED)  
(In millions of dollars)  
                   
    September 27, 2015     December 28, 2014     September 28, 2014  
Current Assets                        
  Cash and equivalents   $ 44.9     $ 83.1     $ 51.6  
  Trade accounts receivable, less allowances of $9.7, $10.7 and $9.2, respectively     1,160.3       1,122.8       1,158.1  
  Prepaid expenses and other current assets     49.0       47.9       56.8  
  Deferred taxes     35.0       34.4       28.9  
Total current assets     1,289.2       1,288.2       1,295.4  
                         
Property and Equipment, Net     88.3       93.0       91.1  
                         
Noncurrent Deferred Taxes     140.8       146.3       132.7  
                         
Goodwill, Net     90.3       90.3       90.3  
                         
Other Assets     341.3       300.1       291.5  
                         
Total Assets   $ 1,949.9     $ 1,917.9     $ 1,901.0  
                         
Current Liabilities                        
  Short-term borrowings   $ 76.8     $ 91.9     $ 88.7  
  Accounts payable and accrued liabilities     385.2       364.0       339.0  
  Accrued payroll and related taxes     312.8       308.5       318.6  
  Accrued insurance     25.9       26.9       24.4  
  Income and other taxes     59.5       68.8       74.0  
                         
Total current liabilities     860.2       860.1       844.7  
                         
Noncurrent Liabilities                        
Accrued insurance     42.2       43.9       43.4  
Accrued retirement benefits     139.5       140.8       146.6  
Other long-term liabilities     48.4       39.4       40.7  
                         
Total noncurrent liabilities     230.1       224.1       230.7  
                         
Stockholders' Equity                        
  Common stock     40.1       40.1       40.1  
  Treasury stock     (46.9 )     (49.8 )     (52.5 )
  Paid-in capital     26.7       24.9       26.7  
  Earnings invested in the business     781.3       767.4       752.3  
  Accumulated other comprehensive income     58.4       51.1       59.0  
                         
Total stockholders' equity     859.6       833.7       825.6  
                         
Total Liabilities and Stockholders' Equity   $ 1,949.9     $ 1,917.9     $ 1,901.0  
                         
                         
STATISTICS:                        
  Working Capital   $ 429.0     $ 428.1     $ 450.7  
  Current Ratio     1.5       1.5       1.5  
  Debt-to-capital %     8.2 %     9.9 %     9.7 %
  Global Days Sales Outstanding     57       54       58  
                         
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
FOR THE 39 WEEKS ENDED SEPTEMBER 27, 2015 AND SEPTEMBER 28, 2014  
(UNAUDITED)  
(In millions of dollars)  
             
    2015     2014  
Cash flows from operating activities:                
  Net earnings   $ 19.6     $ 6.7  
  Noncash adjustments:                
    Depreciation and amortization     16.6       16.2  
    Provision for bad debts     3.3       3.6  
    Stock-based compensation     4.6       4.1  
    Other, net     (0.7 )     1.3  
  Changes in operating assets and liabilities     (44.9 )     (140.9 )
                 
    Net cash used in operating activities     (1.5 )     (109.0 )
                 
Cash flows from investing activities:                
  Capital expenditures     (12.3 )     (15.0 )
  Investment in equity affiliate     (0.5 )     (5.4 )
  Other investing activities     (0.4 )     0.2  
                 
    Net cash used in investing activities     (13.2 )     (20.2 )
                 
Cash flows from financing activities:                
  Net change in short-term borrowings     (13.8 )     60.4  
  Dividend payments     (5.7 )     (5.7 )
  Other financing activities     0.2       0.4  
                 
    Net cash (used in) from financing activities     (19.3 )     55.1  
                 
Effect of exchange rates on cash and equivalents     (4.2 )     --  
                 
Net change in cash and equivalents     (38.2 )     (74.1 )
Cash and equivalents at beginning of period     83.1       125.7  
                 
                 
Cash and equivalents at end of period   $ 44.9     $ 51.6  
                 
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
REVENUE FROM SERVICES  
(UNAUDITED)  
(In millions of dollars)  
                     
    Third Quarter (Commercial, PT and OCG)  
            % Change  
                  Constant  
    2015   2014   US$     Currency  
                         
Americas                        
  United States   $ 899.8   $ 873.7   3.0 %   3.0 %
  Canada     37.9     51.9   (27.0 )   (12.6 )
  Mexico     31.3     37.0   (15.2 )   6.1  
  Puerto Rico     23.8     25.7   (7.5 )   (7.5 )
  Brazil     10.4     13.6   (23.5 )   11.4  
Total Americas     1,003.2     1,001.9   0.1     2.1  
                         
EMEA                        
  France     63.1     70.1   (10.0 )   7.4  
  Switzerland     58.0     66.7   (13.0 )   (8.2 )
  Portugal     33.5     33.3   0.8     20.2  
  United Kingdom     27.7     26.2   5.7     14.0  
  Russia     17.0     28.7   (40.6 )   2.9  
  Germany     15.4     17.5   (12.1 )   4.8  
  Italy     14.0     14.8   (5.5 )   12.6  
  Norway     10.1     14.8   (31.8 )   (10.5 )
  Other     11.5     15.8   (27.1 )   (13.2 )
Total EMEA     250.3     287.9   (13.1 )   3.5  
                         
APAC                        
  Singapore     32.6     33.4   (2.3 )   8.5  
  Australia     28.8     32.3   (10.7 )   13.8  
  Malaysia     14.0     16.7   (16.1 )   6.0  
  New Zealand     9.4     12.7   (26.4 )   (4.7 )
  Other     12.7     11.5   10.4     20.9  
Total APAC     97.5     106.6   (8.5 )   9.5  
                         
Total Kelly Services, Inc.   $ 1,351.0   $ 1,396.4   (3.2) %   3.0 %
                         
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
REVENUE FROM SERVICES  
(UNAUDITED)  
(In millions of dollars)  
                     
    September Year to Date (Commercial, PT and OCG)  
            % Change  
                  Constant  
    2015   2014   US$     Currency  
                         
Americas                        
  United States   $ 2,706.4   $ 2,601.9   4.0 %   4.0 %
  Canada     122.2     148.2   (17.5 )   (5.5 )
  Mexico     95.2     102.3   (6.9 )   10.4  
  Puerto Rico     75.2     78.4   (4.0 )   (4.0 )
  Brazil     34.2     43.2   (20.8 )   2.8  
Total Americas     3,033.2     2,974.0   2.0     3.5  
                         
EMEA                        
  France     180.4     202.2   (10.8 )   8.4  
  Switzerland     160.7     195.7   (17.9 )   (12.9 )
  Portugal     98.7     92.4   6.9     29.9  
  United Kingdom     78.4     82.4   (4.8 )   3.7  
  Russia     57.4     96.4   (40.4 )   (0.9 )
  Germany     43.1     50.7   (15.0 )   3.1  
  Italy     39.5     46.3   (14.6 )   3.6  
  Norway     29.5     43.6   (32.5 )   (12.8 )
  Other     32.8     50.9   (35.6 )   (21.8 )
Total EMEA     720.5     860.6   (16.3 )   0.9  
                         
APAC                        
  Singapore     96.9     94.8   2.3     10.9  
  Australia     92.1     88.8   3.8     24.8  
  Malaysia     45.4     50.0   (9.3 )   5.2  
  New Zealand     30.2     38.2   (21.1 )   (6.1 )
  Other     38.3     31.3   22.4     29.7  
Total APAC     302.9     303.1   (0.1 )   13.8  
                         
Total Kelly Services, Inc.   $ 4,056.6   $ 4,137.7   (2.0) %   3.7 %
                         
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RECONCILIATION OF NON-GAAP MEASURES  
FOR THE 13 WEEKS ENDED SEPTEMBER 27, 2015 AND SEPTEMBER 28, 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   $ 1,351.0   $ --     $ 1,351.0   $ 1,396.4   (3.2) %
                                 
Cost of services     1,122.8     --       1,122.8     1,171.0   (4.1 )
                                 
Gross profit     228.2     --       228.2     225.4   1.3  
                                 
SG&A expenses     211.6     --       211.6     214.3   (1.2 )
                                 
Earnings from operations     16.6     --       16.6     11.1   50.7  
                                 
Other expense, net     --     --       --     2.2   (97.7 )
                                 
Earnings before taxes     16.6     --       16.6     8.9   88.3  
                                 
Inc. tax expense (benefit)     7.5     --       7.5     5.0   48.8  
                                 
Net earnings   $ 9.1   $ --     $ 9.1   $ 3.9   141.1 %
                                 
Earnings per share:                                
  Basic   $ 0.23   $ --     $ 0.23   $ 0.10   130.0 %
  Diluted   $ 0.23   $ --     $ 0.23   $ 0.10   130.0 %
                                 
                                 
    2014          
    As reported   Restructuring Charges
(Note 1)
    Adjusted Earnings          
                         
Revenue from services   $ 1,396.4   $ --     $ 1,396.4            
                                 
Cost of services     1,171.0     --       1,171.0            
                                 
Gross profit     225.4     --       225.4            
                                 
SG&A expenses     218.3     (4.0 )     214.3            
                                 
Earnings from operations     7.1     4.0       11.1            
                                 
Other expense, net     2.2     --       2.2            
                                 
Earnings before taxes     4.9     4.0       8.9            
                                 
Inc. tax expense (benefit)     3.5     1.5       5.0            
                                 
Net earnings   $ 1.4   $ 2.5     $ 3.9            
                                 
Earnings per share:                                
  Basic   $ 0.03   $ 0.06     $ 0.10            
  Diluted   $ 0.03   $ 0.06     $ 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 39 WEEKS ENDED SEPTEMBER 27, 2015 AND SEPTEMBER 28, 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   $ 4,056.6   $ --     $ 4,056.6   $ 4,137.7   (2.0) %
                                 
Cost of services     3,385.8     --       3,385.8     3,461.9   (2.2 )
                                 
Gross profit     670.8     --       670.8     675.8   (0.7 )
                                 
SG&A expenses     630.6     --       630.6     650.7   (3.1 )
                                 
Earnings from operations     40.2     --       40.2     25.1   61.6  
                                 
Other expense, net     3.5     --       3.5     4.2   (14.5 )
                                 
Earnings before taxes     36.7     --       36.7     20.9   76.7  
                                 
Inc. tax expense (benefit)     17.1     --       17.1     10.5   62.4  
                                 
Net earnings   $ 19.6   $ --     $ 19.6   $ 10.4   91.4 %
                                 
Earnings per share:                                
  Basic   $ 0.51   $ --     $ 0.51   $ 0.27   88.9 %
  Diluted   $ 0.51   $ --     $ 0.51   $ 0.27   88.9 %
                                 
                                 
    2014          
    As reported   Restructuring Charges
(Note 1)
    Adjusted Earnings          
                         
Revenue from services   $ 4,137.7   $ --     $ 4,137.7            
                                 
Cost of services     3,461.9     --       3,461.9            
                                 
Gross profit     675.8     --       675.8            
                                 
SG&A expenses     656.5     (5.8 )     650.7            
                                 
Earnings from operations     19.3     5.8       25.1            
                                 
Other expense, net     4.2     --       4.2            
                                 
Earnings before taxes     15.1     5.8       20.9            
                                 
Inc. tax expense (benefit)     8.4     2.1       10.5            
                                 
Net earnings   $ 6.7   $ 3.7     $ 10.4            
                                 
Earnings per share:                                
  Basic   $ 0.17   $ 0.10     $ 0.27            
  Diluted   $ 0.17   $ 0.10     $ 0.27            
 
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 include 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.