Kelly Services(R) Reports 3rd Quarter Results

Marketwired

TROY, MI--(Marketwired - Nov 6, 2013) - Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a leader in providing workforce solutions, today announced results for the third quarter of 2013.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the third quarter of 2013 totaled $1.3 billion, a 0.6% decrease compared to the corresponding quarter of 2012.

Earnings from operations for the third quarter of 2013 totaled $20.2 million. Included in the results of operations in the third quarter of 2013 are restructuring charges of $0.5 million. Excluding the restructuring charges, earnings from operations were $20.7 million in the third quarter of 2013, compared to earnings of $24.0 million last year.

Diluted earnings per share from continuing operations in the third quarter of 2013 were $0.49. Adjusted earnings per share were $0.51 in the third quarter of 2013 compared to $0.43 in the third quarter of 2012.

"We're pleased that our third quarter performance surpassed our expectations despite an erratic and lackluster economy," said Camden. "The Americas delivered a nice turnaround in fee performance and KellyOCG brought in strong revenue growth and outsized operating profits. Overall, our results continue to demonstrate that Kelly's strategy is responding to market demands for more holistic workforce solutions, access to skilled talent, and workforce models that help companies achieve their short- and long-term business goals."

Kelly also reported that on November 5, its board of directors declared a dividend of $0.05 per share. The dividend is payable December 6 to shareholders of record as of the close of business on November 18.

In conjunction with its third quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on November 6, 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:
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, & Twitter. Download The Talent Project, a free iPad® app by Kelly Services.

iPad is a trademark of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.

   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF EARNINGS  
FOR THE 13 WEEKS ENDED SEPTEMBER 29, 2013 AND SEPTEMBER 30, 2012  
(UNAUDITED)  
(In millions of dollars except per share data)  
                         
    2013     2012     Change     % Change  
                               
Revenue from services   $ 1,345.6     $ 1,354.2     $ (8.6 )   (0.6 )%
                               
Cost of services     1,125.2       1,126.7       (1.5 )   (0.1 )
                               
Gross profit     220.4       227.5       (7.1 )   (3.1 )
                               
Selling, general and administrative expenses    
200.2
     
203.5
     
(3.3
)  
(1.6
)
                               
Earnings from operations     20.2       24.0       (3.8 )   (15.8 )
                               
Other expense, net     1.3       0.7       0.6     88.9  
                               
Earnings from continuing operations before taxes     18.9       23.3       (4.4 )   (19.0 )
                               
Income tax expense     0.1       6.7       (6.6 )   (99.2 )
                               
Earnings from continuing operations     18.8       16.6       2.2     13.6  
                               
Earnings from discontinued operations, net of tax     -       -       -     NM  
                               
Net earnings   $ 18.8     $ 16.6     $ 2.2     13.5 %
                               
Basic earnings per share on common stock                              
  Earnings from continuing operations   $ 0.49     $ 0.43     $ 0.06     14.0 %
  Earnings from discontinued operations     -       -       -     NM  
  Net earnings     0.49       0.43       0.06     14.0  
                               
Diluted earnings per share on common stock                              
  Earnings from continuing operations   $ 0.49     $ 0.43     $ 0.06     14.0 %
  Earnings from discontinued operations     -       -       -     NM  
  Net earnings     0.49       0.43       0.06     14.0  
                               
                               
                               
                               
STATISTICS:                              
                               
Gross profit rate     16.4 %     16.8 %     (0.4 )pts.      
                               
Selling, general and administrative expenses:                              
  % of revenue     14.9       15.0       (0.1 )      
  % of gross profit     90.8       89.4       1.4        
                               
% Return:                              
  Earnings from operations     1.5       1.8       (0.3 )      
  Earnings from continuing operations before taxes     1.4       1.7       (0.3 )      
  Earnings from continuing operations     1.4       1.2       0.2        
  Net earnings     1.4       1.2       0.2        
                               
Effective income tax rate     0.3 %     28.9 %     (28.6 )pts.      
                               
Average number of shares outstanding (millions):                              
  Basic     37.4       37.1                
  Diluted     37.4       37.1                
                               
Shares adjusted for nonvested restricted awards (millions):                              
  Basic     38.1       38.3                
  Diluted     38.1       38.3                
                                 
                                 
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF EARNINGS  
FOR THE 39 WEEKS ENDED SEPTEMBER 29, 2013 AND SEPTEMBER 30, 2012  
(UNAUDITED)  
(In millions of dollars except per share data)  
                         
    2013     2012     Change     % Change  
                               
Revenue from services   $ 4,027.3     $ 4,075.1     $ (47.8 )   (1.2 )%
                               
Cost of services     3,369.3       3,400.7       (31.4 )   (0.9 )
                               
Gross profit     658.0       674.4       (16.4 )   (2.4 )
                               
Selling, general and administrative expenses     612.6       611.9       0.7     0.1  
                               
Asset impairments     1.7       -       1.7     NM  
                               
Earnings from operations     43.7       62.5       (18.8 )   (30.0 )
                               
Other expense, net     3.9       1.8       2.1     118.3  
                               
Earnings from continuing operations before taxes     39.8       60.7       (20.9 )   (34.4 )
                               
Income tax (benefit) expense     (1.9 )     19.9       (21.8 )   (109.9 )
                               
Earnings from continuing operations     41.7       40.8       0.9     2.4  
                               
Earnings from discontinued operations, net of tax     -       0.4       (0.4 )   (99.8 )
                               
Net earnings   $ 41.7     $ 41.2     $ 0.5     1.3 %
                               
Basic earnings per share on common stock                              
  Earnings from continuing operations   $ 1.09     $ 1.07     $ 0.02     1.9 %
  Earnings from discontinued operations     -       0.01       (0.01 )   (100.0 )
  Net earnings     1.09       1.09       -     -  
                               
Diluted earnings per share on common stock                              
  Earnings from continuing operations   $ 1.09     $ 1.07     $ 0.02     1.9 %
  Earnings from discontinued operations     -       0.01       (0.01 )   (100.0 )
  Net earnings     1.09       1.09       -     -  
                               
                               
STATISTICS:                              
                               
Gross profit rate     16.3 %     16.5 %     (0.2 )pts.      
                               
Selling, general and administrative expenses:                              
  % of revenue     15.2       15.0       0.2        
  % of gross profit     93.1       90.7       2.4        
                               
% Return:                              
  Earnings from operations     1.1       1.5       (0.4 )      
  Earnings from continuing operations before taxes     1.0       1.5       (0.5 )      
  Earnings from continuing operations     1.0       1.0       0.0        
  Net earnings     1.0       1.0       0.0        
                               
Effective income tax rate     (5.0 )%     32.8 %     (37.8 )pts.      
                               
Average number of shares outstanding (millions):                              
  Basic     37.2       37.0                
  Diluted     37.3       37.0                
                               
Shares adjusted for nonvested restricted awards (millions):                              
  Basic     38.2       38.0                
  Diluted     38.2       38.0                
                               
                               
...
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
   
    Third Quarter
                      Constant
                      Currency
    2013     2012     Change     Change
AMERICAS                            
  Commercial                            
    Revenue from services (including fee-based income)   $ 617.0     $ 642.2     (3.9 )%   (3.5 )%
    Fee-based income     4.1       4.4     (6.6 )   (5.2 )
    Gross profit     86.8       96.4     (10.1 )   (9.6 )
                             
    Gross profit rate     14.1 %     15.0 %   (0.9 )pts.       
                             
  PT                            
    Revenue from services (including fee-based income)   $ 248.3     $ 261.6     (5.1 )%   (5.0 )%
    Fee-based income     4.3       3.7     17.2     17.5  
    Gross profit     40.9       40.9     0.2     0.3  
                             
    Gross profit rate     16.5 %     15.6 %   0.9 pts.       
                             
  Total Americas                            
    Revenue from services (including fee-based income)   $ 865.3     $ 903.8     (4.3 )%   (3.9 )%
    Fee-based income     8.4       8.1     4.3     5.2  
    Gross profit     127.7       137.3     (7.0 )   (6.7 )
    Total SG&A expenses     101.5       101.5     -     0.4  
    Earnings from operations     26.2       35.8     (26.8 )      
                             
    Gross profit rate     14.8 %     15.2 %   (0.4 )pts.       
    Expense rates:                            
      % of revenue     11.7       11.2     0.5        
      % of gross profit     79.5       73.9     5.6        
    Operating margin     3.0       4.0     (1.0 )      
                             
EMEA                            
  Commercial                            
    Revenue from services (including fee-based income)   $ 224.5     $ 214.5     4.7 %   1.8 %
    Fee-based income     4.8       5.2     (7.5 )   (8.0 )
    Gross profit     33.9       33.4     1.6     (1.1 )
                             
    Gross profit rate     15.1 %     15.6 %   (0.5 )pts.      
                             
  PT                            
    Revenue from services (including fee-based income)   $ 45.1     $ 41.5     8.7 %   5.1 %
    Fee-based income     3.9       4.1     (3.6 )   (4.8 )
    Gross profit     10.8       10.5     2.5     (0.3 )
                             
    Gross profit rate     23.9 %     25.4 %   (1.5 )pts.      
                             
  Total EMEA                            
    Revenue from services (including fee-based income)   $ 269.6     $ 256.0     5.3 %   2.3 %
    Fee-based income     8.7       9.3     (5.8 )   (6.6 )
    Gross profit     44.7       43.9     1.8     (0.9 )
    SG&A expenses excluding restructuring charges     40.0       40.0     -        
    Restructuring charges     0.3       -     NM        
    Total SG&A expenses     40.3       40.0     0.9     (2.1 )
    Earnings from operations     4.4       3.9     11.5        
    Earnings from operations excluding restructuring charges     4.7       3.9     19.7        
                             
    Gross profit rate     16.6 %     17.1 %   (0.5 )pts.      
    Expense rates (excluding restructuring charges):                            
      % of revenue     14.8       15.6     (0.8 )      
      % of gross profit     89.5       91.1     (1.6 )      
    Operating margin (excluding restructuring charges)     1.7       1.5     0.2        
                               
                               
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
   
    Third Quarter  
                      Constant
                      Currency
    2013     2012     Change     Change
APAC                            
  Commercial                            
    Revenue from services (including fee-based income)   $ 87.6     $ 85.7     2.2 %   8.6 %
    Fee-based income     2.6       2.9     (8.7 )   (1.2 )
    Gross profit     12.7       12.8     (0.6 )   6.1  
                             
    Gross profit rate     14.5 %     14.9 %   (0.4 )pts.      
                             
  PT                            
    Revenue from services (including fee-based income)   $ 9.1     $ 14.3     (36.1) %   (30.6 )%
    Fee-based income     2.2       4.8     (54.0 )   (50.8 )
    Gross profit     3.4       6.2     (44.3 )   (40.0 )
                             
    Gross profit rate     37.5 %     43.0 %   (5.5 )pts.      
                             
  Total APAC                            
    Revenue from services (including fee-based income)   $ 96.7     $ 100.0     (3.3 )%   3.0 %
    Fee-based income     4.8       7.7     (37.1 )   (32.3 )
    Gross profit     16.1       19.0     (14.8 )   (8.9 )
    SG&A expenses excluding restructuring charges     14.5       18.8     (22.6 )      
    Restructuring charges     0.1       -     NM        
    Total SG&A expenses     14.6       18.8     (22.3 )   (16.6 )
    Earnings from operations     1.5       0.2     NM        
    Earnings from operations excluding restructuring charges     1.6       0.2     NM        
                             
    Gross profit rate     16.7 %     18.9 %   (2.2 )pts.       
    Expense rates (excluding restructuring charges):                            
      % of revenue     15.1       18.8     (3.7 )      
      % of gross profit     90.2       99.3     (9.1 )      
    Operating margin (excluding restructuring charges)     1.6       0.1     1.5        
                             
  OCG                            
    Revenue from services (including fee-based income)   $ 126.9     $ 104.7     21.2 %   21.7 %
    Fee-based income     17.0       13.2     29.4     29.5  
    Gross profit     32.7       28.2     15.7     16.1  
    SG&A expenses excluding restructuring charges     26.7       24.2     10.4        
    Restructuring charges     0.1       -     NM        
    Total SG&A expenses     26.8       24.2     10.7     10.9  
    Earnings from operations     5.9       4.0     45.4        
    Earnings from operations excluding restructuring charges     6.0       4.0     47.2        
                             
    Gross profit rate     25.8 %     27.0 %   (1.2 )pts.      
    Expense rates (excluding restructuring charges):                            
      % of revenue     21.0       23.1     (2.1 )      
      % of gross profit     81.6       85.5     (3.9 )      
    Operating margin (excluding restructuring charges)     4.7       3.9     0.8        
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
   
    September Year to Date  
                      Constant
                      Currency
    2013     2012     Change     Change
AMERICAS                            
  Commercial                            
    Revenue from services (including fee-based income)   $ 1,904.1     $ 1,980.1     (3.8 )%   (3.6 )%
    Fee-based income     12.0       12.1     (0.3 )   0.7  
    Gross profit     274.5       292.1     (6.1 )   (5.8 )
                             
    Gross profit rate     14.4 %     14.8 %   (0.4 )pts.      
                             
  PT                            
    Revenue from services (including fee-based income)   $ 758.9     $ 774.1     (2.0 )%   (2.0 )%
    Fee-based income     12.3       11.3     8.3     8.5  
    Gross profit     122.4       120.8     1.3     1.3  
                             
    Gross profit rate     16.1 %     15.6 %   0.5 pts.      
                             
  Total Americas                            
    Revenue from services (including fee-based income)   $ 2,663.0     $ 2,754.2     (3.3 )%   (3.2 )%
    Fee-based income     24.3       23.4     3.9     4.5  
    Gross profit     396.9       412.9     (3.9 )   (3.7 )
    Total SG&A expenses     314.5       303.4     3.6     3.9  
    Earnings from operations     82.4       109.5     (24.7 )      
                             
    Gross profit rate     14.9 %     15.0 %   (0.1 )pts.      
    Expense rates:                            
      % of revenue     11.8       11.0     0.8        
      % of gross profit     79.2       73.5     5.7        
    Operating margin     3.1       4.0     (0.9 )      
                             
EMEA                            
  Commercial                            
    Revenue from services (including fee-based income)   $ 645.3     $ 641.2     0.6 %   (0.4 )%
    Fee-based income     15.5       17.5     (11.7 )   (11.6 )
    Gross profit     98.8       101.1     (2.2 )   (3.3 )
                             
    Gross profit rate     15.3 %     15.8 %   (0.5 )pts.      
                             
  PT                            
    Revenue from services (including fee-based income)   $ 131.7     $ 125.3     5.1 %   3.8 %
    Fee-based income     11.8       13.1     (9.8 )   (10.0 )
    Gross profit     32.0       32.7     (2.2 )   (3.1 )
                             
    Gross profit rate     24.3 %     26.1 %   (1.8 )pts.      
                             
  Total EMEA                            
    Revenue from services (including fee-based income)   $ 777.0     $ 766.5     1.4 %   0.3 %
    Fee-based income     27.3       30.6     (10.9 )   (11.0 )
    Gross profit     130.8       133.8     (2.2 )   (3.3 )
    SG&A expenses excluding restructuring charges     122.1       126.4     (3.4 )      
    Restructuring charges     0.1       (2.2 )   108.8        
    Total SG&A expenses     122.2       124.2     (1.6 )   (2.6 )
    Earnings from operations     8.6       9.6     (10.5 )      
    Earnings from operations excluding restructuring charges     8.7       7.4     17.9        
                             
    Gross profit rate     16.8 %     17.5 %   (0.7 )pts.      
    Expense rates (excluding restructuring charges):                            
      % of revenue     15.7       16.5     (0.8 )      
      % of gross profit     93.3       94.4     (1.1 )      
    Operating margin (excluding restructuring charges)     1.1       1.0     0.1        
                               
                               
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)  
(In millions of dollars)  
   
    September Year to Date
                      Constant
                      Currency
    2013     2012     Change     Change
APAC                            
  Commercial                            
    Revenue from services (including fee-based income)   $ 256.8     $ 258.3     (0.6 )%   1.6 %
    Fee-based income     8.2       9.3     (12.0 )   (9.0 )
    Gross profit     36.8       38.4     (4.1 )   (1.8 )
                             
    Gross profit rate     14.3 %     14.9 %   (0.6 )pts.      
                             
   PT                            
    Revenue from services (including fee-based income)   $ 29.3     $ 39.9     (26.6 )%   (24.1 )%
    Fee-based income     6.7       12.9     (48.6 )   (47.1 )
    Gross profit     10.5       16.7     (37.2 )   (35.3 )
                             
    Gross profit rate     35.7 %     41.8 %   (6.1 )pts.      
                             
  Total APAC                            
    Revenue from services (including fee-based income)   $ 286.1     $ 298.2     (4.1 )%   (1.9 )%
    Fee-based income     14.9       22.2     (33.2 )   (31.2 )
    Gross profit     47.3       55.1     (14.1 )   (11.9 )
    SG&A expenses excluding restructuring charges     45.5       57.5     (20.9 )      
    Restructuring charges     0.3       -     NM        
    Total SG&A expenses     45.8       57.5     (20.4 )   (18.3 )
    Earnings from operations     1.5       (2.4 )   NM        
    Earnings from operations excluding restructuring charges     1.8       (2.4 )   NM        
                             
    Gross profit rate     16.5 %     18.5 %   (2.0 )pts.      
    Expense rates (excluding restructuring charges):                            
      % of revenue     15.9       19.3     (3.4 )      
      % of gross profit     96.2       104.4     (8.2 )      
    Operating margin (excluding restructuring charges)     0.6       (0.8 )   1.4        
                             
OCG                            
    Revenue from services (including fee-based income)   $ 335.8     $ 282.8     18.8 %   19.0 %
    Fee-based income     47.3       37.6     26.2     26.4  
    Gross profit     85.4       75.0     13.8     14.0  
    SG&A expenses excluding restructuring charges     77.7       69.6     11.6        
    Restructuring charges     0.9       -     NM        
    Total SG&A expenses     78.6       69.6     12.8     12.9  
    Asset impairments     1.7       -     NM        
    Earnings from operations     5.1       5.4     (3.8 )      
    Earnings from operations excluding restructuring charges     6.0       5.4     11.1        
                             
    Gross profit rate     25.4 %     26.5 %   (1.1 )pts.      
    Expense rates (excluding restructuring charges):                            
      % of revenue     23.1       24.6     (1.5 )      
      % of gross profit     91.0       92.8     (1.8 )      
    Operating margin (excluding restructuring charges)     1.8       1.9     (0.1 )      
                               
                               
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEETS  
(UNAUDITED)  
(In millions of dollars)  
    Sept. 29, 2013     Dec. 30, 2012    
Sept. 30, 2012
 
Current Assets                        
  Cash and equivalents   $ 73.9     $ 76.3     $ 70.3  
  Trade accounts receivable, less allowances of $10.0 and $10.4 and $11.9, respectively    
1,071.8
     
1,013.9
     
1,018.8
 
  Prepaid expenses and other current assets     62.0       57.5       62.9  
  Deferred taxes     40.3       44.9       38.1  
    Total current assets     1,248.0       1,192.6       1,190.1  
                         
Property and Equipment, Net     87.7       89.9       90.4  
                         
Noncurrent Deferred Taxes     104.5       82.8       88.8  
                         
Goodwill, Net     90.3       89.5       91.2  
                         
Other Assets     241.0       180.9       174.8  
Total Assets   $ 1,771.5     $ 1,635.7     $ 1,635.3  
                         
Current Liabilities                        
  Short-term borrowings   $ 58.0     $ 64.1     $ 83.6  
  Accounts payable and accrued liabilities     308.9       295.6       279.1  
  Accrued payroll and related taxes     300.9       264.5       269.9  
  Accrued insurance     30.7       32.8       28.8  
  Income and other taxes     71.5       65.3       62.7  
    Total current liabilities     770.0       722.3       724.1  
                         
Noncurrent Liabilities                        
  Accrued insurance     40.7       43.5       48.9  
  Accrued retirement benefits     129.3       111.0       108.5  
  Other long-term liabilities     28.0       17.9       25.1  
    Total noncurrent liabilities     198.0       172.4       182.5  
                         
Stockholders' Equity                        
  Common stock     40.1       40.1       40.1  
  Treasury stock     (57.5 )     (61.6 )     (63.1 )
  Paid-in capital     26.1       27.1       27.7  
  Earnings invested in the business     736.0       700.0       693.0  
  Accumulated other comprehensive income     58.8       35.4       31.0  
    Total stockholders' equity     803.5       741.0       728.7  
Total Liabilities and Stockholders' Equity   $ 1,771.5     $ 1,635.7     $ 1,635.3  
                         
                         
STATISTICS:                        
Working Capital   $ 478.0     $ 470.3     $ 466.0  
Current Ratio     1.6       1.7       1.6  
Debt-to-capital %     6.7 %     8.0 %     10.3 %
Global Days Sales Outstanding     56       53       54  
                         
                         
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
FOR THE 39 WEEKS ENDED SEPTEMBER 29, 2013 AND SEPTEMBER 30, 2012  
(UNAUDITED)  
(In millions of dollars)  
             
             
             
    2013     2012  
                 
Cash flows from operating activities                
  Net earnings   $ 41.7     $ 41.2  
  Noncash adjustments:                
    Impairment of assets     1.7       -  
    Depreciation and amortization     15.4       16.8  
    Provision for bad debts     1.1       1.2  
    Stock-based compensation     2.7       3.7  
    Other, net     0.7       -  
  Changes in operating assets and liabilities     (41.4 )     (42.0 )
                 
      Net cash from operating activities     21.9       20.9  
                 
Cash flows from investing activities                
  Capital expenditures     (11.7 )     (13.9 )
  Other investing activities     -       0.1  
                 
      Net cash used in investing activities     (11.7 )     (13.8 )
                 
Cash flows from financing activities                
  Net change in short-term borrowings     (6.1 )     (12.6 )
  Dividend payments     (5.7 )     (5.7 )
  Other financing activities     0.3       0.1  
                 
      Net cash used in financing activities     (11.5 )     (18.2 )
                 
Effect of exchange rates on cash and equivalents     (1.1 )     0.4  
                 
Net change in cash and equivalents     (2.4 )     (10.7 )
Cash and equivalents at beginning of period     76.3       81.0  
                 
                 
Cash and equivalents at end of period   $ 73.9     $ 70.3  
                 
                 
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
REVENUE FROM SERVICES  
(UNAUDITED)  
(In millions of dollars)  
   
    Third Quarter (Commercial, PT and OCG)  
            % Change  
                  Constant  
    2013   2012   US$     Currency  
                         
Americas                        
  United States   $ 843.5   $ 853.4   (1.2 )%   (1.2 )%
  Canada     52.9     61.9   (14.5 )   (10.8 )
  Mexico     33.1     31.1   6.6     4.5  
  Puerto Rico     24.4     24.5   (0.3 )   (0.3 )
  Brazil     13.1     14.3   (8.0 )   1.8  
Total Americas     967.0     985.2   (1.8 )   (1.5 )
                         
EMEA                        
  Switzerland     68.6     61.0   12.3     8.8  
  France     62.4     60.3   3.6     (2.2 )
  Russia     32.9     31.7   3.7     6.6  
  United Kingdom     26.5     25.6   3.6     5.6  
  Portugal     24.1     18.8   28.2     21.2  
  Germany     17.4     17.8   (1.9 )   (7.4 )
  Norway     16.1     17.6   (8.3 )   (7.2 )
  Italy     13.8     13.1   4.9     (0.8 )
  Other     16.0     17.2   (7.5 )   (11.6 )
Total EMEA     277.8     263.1   5.5     2.6  
                         
APAC                        
  Australia     32.4     35.4   (8.5 )   3.8  
  Singapore     29.4     26.0   12.8     14.8  
  Malaysia     17.2     19.1   (9.7 )   (6.2 )
  New Zealand     12.6     13.0   (2.6 )   (1.3 )
  Other     9.2     12.4   (26.2 )   (18.1 )
Total APAC     100.8     105.9   (4.9 )   1.5  
                         
Total Kelly Services, Inc.   $ 1,345.6   $ 1,354.2   (0.6 )%   (0.5 )%
                         
                         
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
REVENUE FROM SERVICES  
(UNAUDITED)  
(In millions of dollars)  
                     
    September Year to Date (Commercial, PT and OCG)  
            % Change  
                  Constant  
    2013   2012   US$     Currency  
                         
Americas                        
  United States   $ 2,547.3   $ 2,586.3   (1.5 )%   (1.5 )%
  Canada     163.9     183.4   (10.6 )   (8.8 )
  Mexico     99.4     82.4   20.7     15.6  
  Puerto Rico     73.6     76.3   (3.6 )   (3.6 )
  Brazil     45.0     46.7   (3.7 )   6.6  
Total Americas     2,929.2     2,975.1   (1.5 )   (1.4 )
                         
EMEA                        
  Switzerland     185.6     174.4   6.4     5.7  
  France     182.0     184.2   (1.2 )   (3.9 )
  Russia     102.0     97.1   5.0     7.1  
  United Kingdom     78.1     79.3   (1.5 )   0.5  
  Portugal     63.0     56.0   12.5     9.3  
  Germany     49.3     53.9   (8.5 )   (11.0 )
  Norway     46.3     50.8   (8.8 )   (9.5 )
  Italy     43.6     44.5   (2.0 )   (4.5 )
  Other     50.7     48.4   4.6     2.1  
Total EMEA     800.6     788.6   1.5     0.4  
                         
APAC                        
  Australia     100.4     101.6   (1.2 )   4.3  
  Singapore     83.5     75.1   11.2     10.7  
  Malaysia     51.1     54.9   (6.9 )   (5.8 )
  New Zealand     36.1     39.5   (8.5 )   (9.8 )
  Other     26.4     40.3   (34.6 )   (30.2 )
Total APAC     297.5     311.4   (4.5 )   (2.2 )
                         
Total Kelly Services, Inc.   $ 4,027.3   $ 4,075.1   (1.2 )%   (1.1 )%
                         
                         
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RECONCILIATION OF NON-GAAP MEASURES  
FOR THE 13 WEEKS ENDED SEPTEMBER 29, 2013 AND SEPTEMBER 30, 2012  
(UNAUDITED)  
(In millions of dollars except per share data)  
                         
    2013   2012  
    As reported   Restructuring Charges
(Note 1)
    Adjusted Earnings   Earnings   % Change  
                                 
Revenue from services   $ 1,345.6   $ -     $ 1,345.6   $ 1,354.2   (0.6 )%
Cost of services     1,125.2     -       1,125.2     1,126.7   (0.1 )
                                 
Gross profit     220.4     -       220.4     227.5   (3.1 )
Selling, general and administrative expenses    

200.2
   

(0.5
)    

199.7
   

203.5
 
(1.8
)
                                 
                                 
Earnings from operations     20.2     0.5       20.7     24.0   (13.9 )
Other expense, net     1.3     -       1.3     0.7   (88.9 )
                                 
Earnings from continuing operations before taxes     18.9     0.5       19.4     23.3   (17.1 )
Income tax expense (benefit)     0.1     -       0.1     6.7   (99.2 )
                                 
Earnings from continuing operations   $ 18.8   $ 0.5     $ 19.3   $ 16.6   16.3 %
                                 
Earnings per share from continuing operations:                                
  Basic   $ 0.49   $ 0.01     $ 0.51   $ 0.43   18.6 %
  Diluted   $ 0.49   $ 0.01     $ 0.51   $ 0.43   18.6 %
                                 
Note: Earnings per share amounts for each quarter are required to be computed independently and may not equalthe amounts computed for the total year.  
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RECONCILIATION OF NON-GAAP MEASURES  
FOR THE 39 WEEKS ENDED SEPTEMBER 29, 2013 AND SEPTEMBER 30, 2012  
(UNAUDITED)  
(In millions of dollars except per share data)  
                                   
          2013     2012      
    As reported     Restructuring Charges
(Note 1)
    Asset Impairments (Note 2)     Adjusted Earnings     Adjusted Earnings   % Change  
                                             
Revenue from services   $ 4,027.3     $ -     $ -     $ 4,027.3     $ 4,075.1   (1.2 )%
                                             
Cost of services     3,369.3       -       -       3,369.3       3,400.7   (0.9 )
                                             
Gross profit     658.0       -       -       658.0       674.4   (2.4 )
                                             
Selling, general and administrative expenses    
612.6
     
(1.3
)    
-
     
611.3
     
614.1
 
(0.4
)
                                             
Asset impairments     1.7       -       (1.7 )     -       -   NM  
                                             
Earnings from operations     43.7       1.3       1.7       # 46.7       60.3   (22.6 )
                                             
Other expense, net     3.9       -       -       3.9       1.8   (118.3 )
                                             
Earnings from continuing operations before taxes     39.8       1.3       1.7       42.8       58.5   (27.0 )
                                             
Income tax expense (benefit)     (1.9 )     0.1       -       (1.8 )     19.9   (109.4 )
                                             
Earnings from continuing operations   $ 41.7     $ 1.2     $ 1.7     $ 44.6     $ 38.6   (15.5 )%
                                             
Earnings per share from continuing operations:                                            
  Basic   $ 1.09     $ 0.03     $ 0.04     $ 1.17     $ 1.02   14.7 %
  Diluted   $ 1.09     $ 0.03     $ 0.04     $ 1.17     $ 1.02   14.7 %
                                             
                                             
    2012                  
    As reported     Restructuring Charges
(Note 1)
    Adjusted Earnings                  
                                             
Revenue from services   $ 4,075.1     $ -     $ 4,075.1                      
                                             
Cost of services     3,400.7       -       3,400.7                      
                                             
Gross profit     674.4       -       674.4                      
                                             
Selling, general and administrative expenses    
611.9
     
2.2
     
614.1
                     
                                             
Earnings from operations     62.5       (2.2 )     60.3                      
                                             
Other expense, net     1.8       -       1.8                      
                                             
Earnings from continuing operations before taxes     60.7       (2.2 )     58.5                      
                                             
Income tax expense (benefit)     19.9       -       19.9                      
                                             
Earnings from continuing operations   $ 40.8     $ (2.2 )   $ 38.6                      
                                             
Earnings per share from continuing operations:                                            
  Basic   $ 1.07     $ (0.06 )   $ 1.02                      
  Diluted   $ 1.07     $ (0.06 )   $ 1.02                      
                                             
Note: Earnings per share amounts for each quarter are required to be computed independently and may not equalthe 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 and asset impairment charges is useful to understand the Company's fiscal 2013 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 2013, restructuring charges relate to severance costs from exiting the executive search business in Germany, along with severance costs for EMEA Commercial branches that closed in prior years. In 2012, 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 represent the write-off of the carrying value of long-lived assets related to the decision to exit the executive search business operating in Germany.
Contact:
ANALYST CONTACT:
James Polehna
(248) 244-4586
james_polehna@kellyservices.com

MEDIA CONTACT:
Jane Stehney
(248) 244-5630
jane_stehney@kellyservices.com
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