EX-99.1 2 dex991.htm PRESS RELEASE Press Release

5

 

Exhibit 99.1

LOGO

 

ANALYST CONTACT:    MEDIA CONTACT:
James Polehna    Renee Walker
(248) 244-4586    (248) 244-5362
james_polehna@kellyservices.com    renee_walker@kellyservices.com

KELLY SERVICES REPORTS 4% REVENUE INCREASE AND

19% OPERATING EARNINGS GROWTH FOR FOURTH QUARTER, 2007

TROY, MI (January 24, 2008) -— Kelly Services, Inc., a global provider of staffing services, today announced results for the fourth quarter and year ended December 30, 2007.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the fourth quarter of 2007 totaled $1.5 billion, a 4% increase compared to the $1.4 billion for the corresponding quarter in 2006. Revenue for the full year totaled $5.7 billion, a 2% increase compared to the $5.5 billion for the full year of 2006.

Earnings from operations for the fourth quarter of 2007 totaled $26.5 million, a 19% increase compared to $22.3 million reported for the fourth quarter of 2006. Included in earnings from operations in the quarter are $1.4 million of restructuring costs related to our Americas Commercial operations.

Earnings from operations for the full year of 2007 totaled $80.1 million, a 3% increase compared to $78.0 million reported for 2006. Included in earnings from operations for the year are $8.9 million of costs related to the restructuring of our Americas Commercial and UK operations.

Diluted earnings per share from continuing operations in the fourth quarter of 2007 were $0.52, a decrease of 7% as compared to fourth quarter 2006 earnings of $0.56 per share. Included in fourth quarter diluted earnings is the $0.02 per share cost of the Americas Commercial restructuring. The effective tax rate for continuing operations in the fourth quarter was 33.0%, which is significantly higher than the 11.3% rate in the prior year. In 2006, Work Opportunity Credits in the U.S. were reinstated in the fourth quarter. As a result, we recognized the impact of an entire year’s worth of credits in the fourth quarter.

Diluted earnings per share from continuing operations for the full year of 2007 were $1.47, a decrease of 6% as compared to 2006 earnings of $1.56 per share. Included in 2007 diluted earnings per share from continuing operations is the $0.21 per share cost of the Americas Commercial and UK restructuring.

Commenting on the results, Camden said, “Despite continued weakness in the U.S. staffing market, we’re pleased that we delivered solid profitable results. We accomplished a number of key strategic objectives during the quarter as we continue to diversify geographically and move into higher margin fee based businesses.

“Revenue in our Americas Commercial segment, which accounted for 47% of total sales, decreased 6% year over year in the fourth quarter. Operating earnings totaled $25.0 million, and decreased 16% compared to last year. Included in the segment operating earnings are $1.4 million of restructuring costs. We have completed our America’s restructuring at a total cost of approximately $3.0 million, or $0.05 per share.

“Revenue in the Americas PTSA segment, which accounted for 20% of total sales, increased 6% year over year in the fourth quarter. Operating earnings totaled $17.4 million and increased 16% on a year over year basis.

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“Revenue in our International Commercial segment, which accounted for 29% of total sales, increased 19% year over year in the fourth quarter. On a constant currency basis, revenue increased 8%. The segment operating earnings totaled $5.7 million, up significantly compared to $255 thousand the prior year.

“Revenue in our International PTSA segment, which accounted for 4% of total sales, increased 30% year over year in the fourth quarter. On a constant currency basis, revenue increased 17%. Operating earnings totaled $975 thousand, an increase of 288% compared to earnings of $251 thousand the prior year.

“Corporate expenses totaled $22.5 million, a decrease of 2% compared to the prior year.

Mr. Camden added, “We expect first quarter 2008 earnings to be in the range of $0.19 to $0.23 per share, compared to $0.14 per share from continuing operations in the first quarter of 2007. Included in the first quarter 2007 earnings from continuing operations are $.07 of UK restructuring costs.

In conjunction with its fourth quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on January 24, 2008 to review the results and answer questions. The call may be accessed in one of the following ways:

Via the Telephone:

 

U.S.    1-800-230-1059
International    1-612-332-0226

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: competition, changing market and economic conditions, currency fluctuations, changes in laws and regulations, including tax laws, and other factors discussed in this release and in the company’s filings with the Securities and Exchange Commission. Actual results may differ materially from any projections contained herein.

Kelly Services, Inc. (NASDAQ: KELYA, KELYB) is a world leader in human resources solutions headquartered in Troy, Michigan, offering temporary staffing services, outsourcing, vendor on-site and full-time placement. Kelly operates in 37 countries and territories. Kelly provides employment to more than 750,000 employees annually, with skills including office services, accounting, engineering, information technology, law, science, marketing, creative services, light industrial, education, and health care. Revenue in 2007 was $5.7 billion. Visit www.kellyservices.com.

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KELLY SERVICES, INC. AND SUBSIDIARIES

STATEMENTS OF EARNINGS

FOR THE 13 WEEKS ENDED DECEMBER 30, 2007 AND DECEMBER 31, 2006

(UNAUDITED)

(In thousands of dollars except per share data)

 

     2007     2006     Change     % Change  

Revenue from services

    $ 1,475,759     $ 1,421,376     $ 54,383     3.8   %

Cost of services

      1,210,323       1,181,884       28,439     2.4  
                              

Gross profit

      265,436       239,492       25,944     10.8  

Selling, general and administrative expenses

      238,895       217,191       21,704     10.0  
                              

Earnings from operations

      26,541       22,301       4,240     19.0  

Other income, net

      1,021       618       403     65.2  
                              

Earnings from continuing operations before taxes

      27,562       22,919       4,643     20.3  

Income taxes

      9,089       2,591       6,498     250.8  
                              

Earnings from continuing operations

      18,473       20,328       (1,855 )   (9.1 )

Earnings from discontinued operations, net of tax

      158       4,114       (3,956 )   (96.2 )
                              

Net earnings

    $ 18,631     $ 24,442     $ (5,811 )   (23.8 ) %
                              

Basic earnings per share

         

Earnings from continuing operations

    $ 0.52     $ 0.56     $ (0.04 )   (7.1 ) %

Earnings from discontinued operations

      -       0.11       (0.11 )   (100.0 )
                              

Net earnings

    $ 0.52     $ 0.68     $ (0.16 )   (23.5 ) %
                              

Diluted earnings per share

         

Earnings from continuing operations

    $ 0.52     $ 0.56     $ (0.04 )   (7.1 ) %

Earnings from discontinued operations

      -       0.11       (0.11 )   (100.0 )
                              

Net earnings

    $ 0.52     $ 0.67     $ (0.15 )   (22.4 ) %
                              
         
STATISTICS:         

Gross profit rate

      18.0   %     16.8   %     1.2   %  

Selling, general and administrative expenses:

         

% of revenue

      16.2       15.3       0.9    

% of gross profit

      90.0       90.7       (0.7 )  

% Return - Earnings from operations

      1.8       1.6       0.2    
                   Earnings from continuing operations before taxes      1.9       1.6       0.3    
                   Earnings from continuing operations      1.3       1.4       (0.1 )  
                   Net earnings      1.3       1.7       (0.4 )  

Effective income tax rate

      33.0   %     11.3   %     21.7   %  

Average number of shares outstanding (thousands):

         

Basic

      35,759       36,182      

Diluted

      35,858       36,524      

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KELLY SERVICES, INC. AND SUBSIDIARIES

STATEMENTS OF EARNINGS

FOR THE 52 WEEKS ENDED DECEMBER 30, 2007 AND DECEMBER 31, 2006

(In thousands of dollars except per share data)

 

     2007     2006     Change     % Change  

Revenue from services

    $ 5,667,589     $ 5,546,778     $ 120,811     2.2   %

Cost of services

      4,678,500       4,640,052       38,448     0.8  
                              

Gross profit

      989,089       906,726       82,363     9.1  

Selling, general and administrative expenses

      909,009       828,685       80,324     9.7  
                              

Earnings from operations

      80,080       78,041       2,039     2.6  

Other income, net

      3,211       1,471       1,740     118.3  
                              

Earnings from continuing operations before taxes

      83,291       79,512       3,779     4.8  

Income taxes

      29,567       22,727       6,840     30.1  
                              

Earnings from continuing operations

      53,724       56,785       (3,061 )   (5.4 )

Earnings from discontinued operations, net of tax

      7,292       6,706       586     8.7  
                              

Net earnings

    $ 61,016     $ 63,491     $ (2,475 )   (3.9 ) %
                              

Basic earnings per share

         

Earnings from continuing operations

    $ 1.48     $ 1.58     $ (0.10 )   (6.3 ) %

Earnings from discontinued operations

      0.20       0.19       0.01     5.3  
                              

Net earnings

    $ 1.68     $ 1.76     $ (0.08 )   (4.5 ) %
                              

Diluted earnings per share

         

Earnings from continuing operations

    $ 1.47     $ 1.56     $ (0.09 )   (5.8 ) %

Earnings from discontinued operations

      0.20       0.18       0.02     11.1  
                              

Net earnings

    $ 1.67     $ 1.75     $ (0.08 )   (4.6 ) %
                              
         
STATISTICS:         

Gross profit rate

      17.5   %     16.3   %     1.2   %  

Selling, general and administrative expenses:

         

% of revenue

      16.0       14.9       1.1    

% of gross profit

      91.9       91.4       0.5    

% Return - Earnings from operations

      1.4       1.4       0.0    
                   Earnings from continuing operations before taxes      1.5       1.4       0.1    

                   Earnings from continuing operations

     0.9       1.0       (0.1 )  

                   Net earnings

      1.1       1.1       0.0    

Effective income tax rate

      35.5   %     28.6   %     6.9   %  

Average number of shares outstanding (thousands):

         

Basic

      36,357       35,999      

Diluted

      36,495       36,314      

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KELLY SERVICES, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS BY SEGMENT

(UNAUDITED)

(In thousands of dollars)

 

     Fourth Quarter  
     2007     2006     Change     % Change  

Revenue from Services:

         

Americas - Commercial

    $ 695,839     $ 739,118     $ (43,279 )   (5.9 ) %

Americas - PTSA

      292,830       277,347       15,483     5.6  
                              

Total Americas

      988,669       1,016,465       (27,796 )   (2.7 )

International - Commercial

      435,034       364,842       70,192     19.2  

International - PTSA

      52,056       40,069       11,987     29.9  
                              

Total International

      487,090       404,911       82,179     20.3  
   $ 1,475,759     $ 1,421,376     $ 54,383     3.8   %
                              

Earnings from Operations (As Reported):

         

Americas - Commercial

    $ 25,003     $ 29,614     $ (4,611 )   (15.6 ) %

Americas - PTSA

      17,416       15,085       2,331     15.5  
                              

Total Americas

      42,419       44,699       (2,280 )   (5.1 )

International - Commercial

      5,658       255       5,403     NM  

International - PTSA

      975       251       724     288.4  
                              

Total International

      6,633       506       6,127     NM  

Corporate Expense

      (22,511 )     (22,904 )     393     1.7  
                              
   $ 26,541     $ 22,301     $ 4,240     19.0   %
                              

Earnings from Operations (Excluding Restructuring Charges):

         

Americas - Commercial

    $ 26,445     $ 29,614     $ (3,169 )   (10.7 ) %

Americas - PTSA

      17,416       15,085       2,331     15.5  
                              

Total Americas

      43,861       44,699       (838 )   (1.9 )

International - Commercial

      5,559       255       5,304     NM  

International - PTSA

      975       251       724     288.4  
                              

Total International

      6,534       506       6,028     NM  

Corporate Expense

      (22,511 )     (22,904 )     393     1.7  
                              
   $ 27,884     $ 22,301     $ 5,583     25.0   %
                              

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KELLY SERVICES, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS BY SEGMENT

(In thousands of dollars)

 

     December Year to Date  
     2007     2006     Change     % Change  

Revenue from Services:

         

Americas - Commercial

    $ 2,759,398     $ 2,916,079     $ (156,681 )   (5.4 ) %

Americas - PTSA

      1,105,752       1,108,329       (2,577 )   (0.2 )
                              

Total Americas

      3,865,150       4,024,408       (159,258 )   (4.0 )

International - Commercial

      1,603,958       1,378,540       225,418     16.4  

International - PTSA

      198,481       143,830       54,651     38.0  
                              

Total International

      1,802,439       1,522,370       280,069     18.4  
   $ 5,667,589     $ 5,546,778     $ 120,811     2.2   %
                              

Earnings from Operations (As Reported):

         

Americas - Commercial

    $ 88,054     $ 102,935     $ (14,881 )   (14.5 ) %

Americas - PTSA

      59,161       58,090       1,071     1.8  
                              

Total Americas

      147,215       161,025       (13,810 )   (8.6 )

International - Commercial

      10,064       567       9,497     NM  

International - PTSA

      2,717       641       2,076     323.9  
                              

Total International

      12,781       1,208       11,573     NM  

Corporate Expense

      (79,916 )     (84,192 )     4,276     5.1  
                              
   $ 80,080     $ 78,041     $ 2,039     2.6   %
                              

Earnings from Operations (Excluding Restructuring Charges):

         

Americas - Commercial

    $ 91,007     $ 102,935     $ (11,928 )   (11.6 ) %

Americas - PTSA

      59,161       58,090       1,071     1.8  
                              

Total Americas

      150,168       161,025       (10,857 )   (6.7 )

International - Commercial

      16,000       567       15,433     NM  

International - PTSA

      2,717       641       2,076     323.9  
                              

Total International

      18,717       1,208       17,509     NM  

Corporate Expense

      (79,916 )     (84,192 )     4,276     5.1  
                              
   $ 88,969     $ 78,041     $ 10,928     14.0   %
                              

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KELLY SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF CONSTANT CURRENCY

REVENUE FROM SERVICES TO REPORTED REVENUE FROM SERVICES

(UNAUDITED)

(In thousands of dollars)

 

     Fourth Quarter  
     2007    2006    Change     % Change  

Revenue from services - constant currency*:

           

Americas - Commercial

    $ 686,725    $ 739,118    $ (52,393 )   (7.1 ) %

Americas - PTSA

      292,241      277,347      14,894     5.4  
                            

Total Americas - constant currency*

      978,966      1,016,465      (37,499 )   (3.7 )

International - Commercial

      393,868      364,842      29,026     8.0  

International - PTSA

      46,942      40,069      6,873     17.2  
                            

Total International - constant currency*

      440,810      404,911      35,899     8.9  

Total revenue from services - constant currency*

      1,419,776      1,421,376      (1,600 )   (0.1 ) %

Foreign currency impact

      55,983         55,983    
                            

Revenue from services

    $ 1,475,759    $ 1,421,376    $ 54,383     3.8   %
                            
     December Year to Date  
     2007    2006    Change     % Change  

Revenue from services - constant currency*:

           

Americas - Commercial

    $ 2,745,728    $ 2,916,079    $ (170,351 )   (5.8 ) %

Americas - PTSA

      1,104,880      1,108,329      (3,449 )   (0.3 )
                            

Total Americas - constant currency*

      3,850,608      4,024,408      (173,800 )   (4.3 )

International - Commercial

      1,479,957      1,378,540      101,417     7.4  

International - PTSA

      182,763      143,830      38,933     27.1  
                            

Total International - constant currency*

      1,662,720      1,522,370      140,350     9.2  

Total revenue from services - constant currency*

      5,513,328      5,546,778      (33,450 )   (0.6 ) %

Foreign currency impact

      154,261         154,261    
                            

Revenue from services

    $ 5,667,589    $ 5,546,778    $ 120,811     2.2   %
                            

 

  * Information on constant currencies is provided to allow investors to separate the impact of foreign currency translations on reported results. Constant currency results are calculated by translating the current year results at prior year average exchange rates.

12

 

 

KELLY SERVICES, INC. AND SUBSIDIARIES

SUMMARY OF DISCONTINUED OPERATIONS

(UNAUDITED)

(In thousands of dollars)

 

     Fourth Quarter    December Year to Date
     2007     2006    2007    2006

Revenue from services

    $ -     $ 22,347    $ 14,777    $ 92,247

Operating (loss) income from discontinued operations

    $ (119 )   $ 2,973    $ 1,454    $ 7,248

Less: Income taxes

      (277 )     1,113      328      2,796
                            

Earnings from discontinued operations, net of tax

      158       1,860      1,126      4,452
                            

Gain on sale of discontinued operations

      -       3,731      10,153      3,731

Less: Income taxes

      -       1,477      3,987      1,477
                            

Gain on sale of discontinued operations, net of tax

      -       2,254      6,166      2,254
                            

Discontinued operations, net of tax

    $ 158     $ 4,114    $ 7,292    $ 6,706
                            

Effective March 31, 2007, the Company sold Kelly Home Care (“KHC”), a wholly owned subsidiary. Effective December 31, 2006, the Company sold Kelly Staff Leasing (“KSL”), a wholly owned subsidiary. The operating results for KHC and KSL, as well as the gains on the sales of KHC and KSL, have been excluded from earnings from continuing operations. This schedule provides information on KHC’s and KSL’s results from operations for the fourth quarter of 2007 and 2006 and year to date 2007 and 2006, as well as the gains on the sales of KHC and KSL, all of which are included as discontinued operations on the face of the statements of earnings.

13

 

 

KELLY SERVICES, INC. AND SUBSIDIARIES

BALANCE SHEETS

(In thousands of dollars)

 

     December 30,
2007		     December 31,
2006		  

Current Assets

     

Cash and equivalents

    $ 92,817     $ 118,428  

Trade accounts receivable, less allowances of $18,172 and $16,818, respectively

      888,334       838,246  

Prepaid expenses and other current assets

      53,392       45,316  

Deferred taxes

      29,294       29,543  
                

Total current assets

      1,063,837       1,031,533  

Property and Equipment, Net

      178,019       170,288  

Noncurrent Deferred Taxes

      43,436       35,437  

Goodwill, Net

      147,168       96,504  

Other Assets

      141,537       135,662  
                

Total Assets

    $ 1,573,997     $ 1,469,424  
                

Current Liabilities

     

Short-term borrowings

    $ 49,729     $ 68,928  

Accounts payable

      171,471       132,819  

Accrued payroll and related taxes

      270,575       274,284  

Accrued insurance

      23,696       24,191  

Income and other taxes

      69,779       68,055  
                

Total current liabilities

      585,250       568,277  

Noncurrent Liabilities

     

Long-term debt

      48,394       -  

Accrued insurance

      60,404       57,277  

Accrued retirement benefits

      78,382       71,990  

Other long-term liabilities

      13,338       13,323  
                

Total noncurrent liabilities

      200,518       142,590  

Stockholders’ Equity

     

Common stock

      40,116       40,116  

Treasury stock

      (106,312 )     (78,841 )

Paid-in capital

      34,500       32,048  

Earnings invested in the business

      777,338       735,104  

Accumulated other comprehensive income

      42,587       30,130  
                

Total stockholders’ equity

      788,229       758,557  
                

Total Liabilities and Stockholders’ Equity

    $ 1,573,997     $ 1,469,424  
                
   

STATISTICS:

     

Working Capital

    $ 478,587     $ 463,256  

Current Ratio

      1.8       1.8  

Debt-to-capital %

      11.1   %     8.3   %

Global Days Sales Outstanding

      55       54  

14

 

 

KELLY SERVICES, INC. AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

FOR THE 52 WEEKS ENDED DECEMBER 30, 2007 AND DECEMBER 31, 2006

(In thousands of dollars)

 

     2007     2006  
Cash flows from operating activities     

Net earnings

    $ 61,016     $ 63,491  

Noncash adjustments:

     

Depreciation and amortization

      42,601       41,730  

Provision for bad debts

      6,654       5,178  

Stock-based compensation

      3,941       5,286  

Gain on sale of discontinued operations

      (6,166 )     (2,254 )

Other, net

      (573 )     (405 )

Changes in operating assets and liabilities

      (34,129 )     3,239  
                

Net cash from operating activities

      73,344       116,265  
                
Cash flows from investing activities     

Capital expenditures

      (45,975 )     (45,526 )

Proceeds from sale of discontinued operations

      12,500       6,500  

Acquisition of companies, net of cash received

      (48,417 )     (4,663 )

Investment in unconsolidated affiliate

      -       (20,729 )

Other investing activities

      (532 )     (550 )
                

Net cash from investing activities

      (82,424 )     (64,968 )
                
Cash flows from financing activities     

Net increase (decrease) in revolving line of credit

      17,500       (11,022 )

Proceeds from debt

      57,277       20,729  

Repayment of debt

      (49,054 )     -  

Dividend payments

      (19,114 )     (16,420 )

Purchase of treasury stock

      (34,703 )     -  

Stock options and other stock sales

      5,781       10,973  

Other financing activities

      (165 )     (2,873 )
                

Net cash from financing activities

      (22,478 )     1,387  
                
Effect of exchange rates on cash and equivalents      5,947       2,045  
                
Net change in cash and equivalents      (25,611 )     54,729  
Cash and equivalents at beginning of period      118,428       63,699  
                
Cash and equivalents at end of period    $ 92,817     $ 118,428  
                

15

 

 

KELLY SERVICES, INC. AND SUBSIDIARIES

REVENUE FROM SERVICES

(UNAUDITED)

(In thousands of dollars)

 

     Fourth Quarter  
               % Change  
     2007    2006    US$    

Constant

Currency

  

Americas

           

United States

    $ 881,640    $ 910,698    (3.2 ) %   (3.2 ) %

Canada

      69,041      66,741    3.4     (11.0 )

Puerto Rico

      19,431      19,362    0.4     0.4  

Mexico

      18,557      19,664    (5.6 )   (6.0 )
                          

Total Americas

      988,669      1,016,465    (2.7 )   (3.7 )

EMEA

           

United Kingdom

      114,113      110,608    3.2     (3.5 )

France

      87,084      72,703    19.8     6.7  

Switzerland

      50,199      45,960    9.2     1.3  

Italy

      31,893      30,744    3.7     (7.6 )

Norway

      21,527      15,631    37.7     16.5  

Russia

      19,652      14,384    36.6     23.0  

Germany

      20,091      12,504    60.7     43.3  

Other

      42,402      34,178    24.1     10.4  
                          

Total EMEA

      386,961      336,712    14.9     4.2  

APAC

           

Australia

      39,779      30,350    31.1     13.4  

Singapore

      18,373      12,593    45.9     36.2  

Other

      41,977      25,256    66.2     52.0  
                          

Total APAC

      100,129      68,199    46.8     31.9  

Total Kelly Services, Inc.

    $ 1,475,759    $ 1,421,376    3.8   %   (0.1 ) %
                          

16

 

 

KELLY SERVICES, INC. AND SUBSIDIARIES

REVENUE FROM SERVICES

(UNAUDITED)

(In thousands of dollars)

 

     December Year to Date  
               % Change  
     2007    2006    US$    

Constant

Currency

  

Americas

           

United States

    $ 3,454,922    $ 3,603,284    (4.1 ) %   (4.1 ) %

Canada

      260,050      272,727    (4.6 )   (10.0 )

Puerto Rico

      76,772      76,939    (0.2 )   (0.2 )

Mexico

      73,406      71,458    2.7     2.9  
                          

Total Americas

      3,865,150      4,024,408    (4.0 )   (4.3 )

EMEA

           

United Kingdom

      469,903      441,847    6.3     (2.2 )

France

      315,008      274,694    14.7     5.1  

Switzerland

      180,951      160,555    12.7     7.9  

Italy

      124,674      118,501    5.2     (3.5 )

Norway

      78,050      56,463    38.2     25.9  

Russia

      68,528      51,958    31.9     23.1  

Germany

      65,593      41,890    56.6     43.4  

Other

      153,209      120,012    27.7     16.8  
                          

Total EMEA

      1,455,916      1,265,920    15.0     6.2  

APAC

           

Australia

      135,886      117,694    15.5     3.5  

Singapore

      62,447      50,527    23.6     17.2  

Other

      148,190      88,229    68.0     56.2  
                          

Total APAC

      346,523      256,450    35.1     24.3  

Total Kelly Services, Inc.

    $ 5,667,589    $ 5,546,778    2.2   %   (0.6 ) %
                          

17

 

 

KELLY SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

(UNAUDITED)

(In thousands of dollars except per share data)

 

     Fourth Quarter  
     2007    2006  
     Amount     Per Share    Amount    Per Share  

Earnings from continuing operations

    $ 18,473     $ 0.52    $ 20,328    $ 0.56  

Restructuring charges, net of taxes (Notes 1 & 2)

      802       0.02      -      -  
                              

Earnings from continuing operations excluding restructuring charges, net of taxes

    $ 19,275     $ 0.54    $ 20,328    $ 0.56  
                              
     Fourth Quarter  
     2007          2006    % Change  

Selling, general and administrative expenses

    $ 238,895        $ 217,191   

Restructuring charges (Notes 1 & 2)

      (1,343 )        -   
                    

Selling, general and administrative expenses excluding restructuring charges

    $ 237,552        $ 217,191      9.4   %
                          

Earnings from operations

    $ 26,541        $ 22,301   

Restructuring charges (Notes 1 & 2)

      1,343          -   
                    

Earnings from operations excluding restructuring charges

    $ 27,884        $ 22,301      25.0   %
                          

Americas Commercial selling, general and administrative expenses

    $ 87,179        $ 87,847   

Americas restructuring charge (Note 1)

      (1,442 )        -   
                    

Americas Commercial selling, general and administrative expenses excluding the Americas restructuring charge

    $ 85,737        $ 87,847      (2.4 ) %
                          

Americas Commercial Earnings from operations

    $ 25,003        $ 29,614   

Americas restructuring charge (Note 1)

      1,442          -   
                    

Americas Commercial earnings excluding the Americas restructuring charge

    $ 26,445        $ 29,614      (10.7 ) %
                          

18

 

 

KELLY SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES (continued)

(UNAUDITED)

(In thousands of dollars except per share data)

 

     Fourth Quarter  
     2007          2006    % Change  

Americas Earnings from operations

    $ 42,419        $ 44,699   

Americas restructuring charge (Note 1)

      1,442          -   
                    

Americas earnings excluding the Americas restructuring charge

    $ 43,861        $ 44,699    (1.9 ) %
                        

International Commercial selling, general and administrative expenses

    $ 73,622        $ 61,875   

UK restructuring charge (Note 2)

      99          -   
                    

International Commercial selling, general and administrative expenses excluding the UK restructuring charge

    $ 73,721        $ 61,875    19.1   %
                        

International Commercial Earnings from operations

    $ 5,658        $ 255   

UK restructuring charge (Note 2)

      (99 )        -   
                    

International Commercial earnings excluding the UK restructuring charge

    $ 5,559        $ 255    NM  
                        

International Earnings from operations

    $ 6,633        $ 506   

UK restructuring charge (Note 2)

      (99 )        -   
                    

International earnings excluding the UK restructuring charge

    $ 6,534        $ 506    NM  
                        

19

 

 

KELLY SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES (continued)

(UNAUDITED)

(In thousands of dollars except per share data)

 

     First Quarter  
     2007    2006  
     Amount    Per Share    Amount     Per Share  

Earnings from continuing operations

    $ 5,258    $ 0.14    $ 8,172     $ 0.23  

Restructuring charges, net of taxes (Note 2)

      2,634      0.07      —        —   
                              

Earnings from continuing operations excluding restructuring charges, net of taxes

    $ 7,892    $ 0.21    $ 8,172     $ 0.23  
                              
     Second Quarter  
     2007    2006  
     Amount    Per Share    Amount     Per Share  

Earnings from continuing operations

    $ 15,311    $ 0.41    $ 11,850     $ 0.33  

Restructuring charges, net of taxes (Note 2)

      2,448      0.07      —        —   
                              

Earnings from continuing operations excluding restructuring charges, net of taxes

    $ 17,759    $ 0.48    $ 11,850     $ 0.33  
                              
     Third Quarter  
     2007    2006  
     Amount    Per Share    Amount     Per Share  

Earnings from continuing operations

    $ 14,682    $ 0.40    $ 16,435     $ 0.45  

Restructuring charges, net of taxes (Notes 1 & 2)

      1,882      0.05      —        —   
                              

Earnings from continuing operations excluding restructuring charges, net of taxes

    $ 16,564    $ 0.45    $ 16,435     $ 0.45  
                              

20

 

 

KELLY SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

(UNAUDITED)

(In thousands of dollars except per share data)

 

     December Year to Date  
     2007    2006  
     Amount     Per Share    Amount    Per Share  

Earnings from continuing operations

    $ 53,724     $ 1.47    $ 56,785    $ 1.56  

Restructuring charges, net of taxes (Notes 1 & 2)

      7,766       0.21      -      -  
                              

Earnings from continuing operations excluding restructuring charges, net of taxes

    $ 61,490     $ 1.68    $ 56,785    $ 1.56  
                              
     December Year to Date  
     2007          2006    % Change  

Selling, general and administrative expenses

    $ 909,009        $ 828,685   

Restructuring charges (Notes 1 & 2)

      (8,889 )        -   
                    

Selling, general and administrative expenses excluding restructuring charges

    $ 900,120        $ 828,685      8.6   %
                          

Earnings from operations

    $ 80,080        $ 78,041   

Restructuring charges (Notes 1 & 2)

      8,889          -   
                    

Earnings from operations excluding restructuring charges

    $ 88,969        $ 78,041      14.0   %
                          

Americas Commercial selling, general and administrative expenses

    $ 349,709        $ 344,883   

Americas restructuring charge (Note 1)

      (2,953 )        -   
                    

Americas Commercial selling, general and administrative expenses excluding the Americas restructuring charge

    $ 346,756        $ 344,883      0.5   %
                          

Americas Commercial Earnings from operations

    $ 88,054        $ 102,935   

Americas restructuring charge (Note 1)

      2,953          -   
                    

Americas Commercial Earnings excluding the Americas restructuring charge

    $ 91,007        $ 102,935      (11.6 ) %
                          

21

 

 

KELLY SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES (continued)

(UNAUDITED)

(In thousands of dollars except per share data)

 

     December Year to Date  
     2007          2006    % Change  

Americas Earnings from operations

    $ 147,215        $ 161,025   

Americas restructuring charge (Note 1)

      2,953          -   
                    

Americas Earnings excluding the Americas restructuring charge

    $ 150,168        $ 161,025    (6.7 ) %
                        

International Commercial selling, general and administrative expenses

    $ 272,733        $ 233,080   

UK restructuring charge (Note 2)

      (5,936 )        -   
                    

International Commercial selling, general and administrative expenses excluding the UK restructuring charge

    $ 266,797        $ 233,080    14.5   %
                        

International Commercial Earnings from operations

    $ 10,064        $ 567   

UK restructuring charge (Note 2)

      5,936          -   
                    

International Commercial Earnings excluding the UK restructuring charge

    $ 16,000        $ 567    NM  
                        

International Earnings from operations

    $ 12,781        $ 1,208   

UK restructuring charge (Note 2)

      5,936          -   
                    

International Earnings excluding the UK restructuring charge

    $ 18,717        $ 1,208    NM  
                        

22

 

 

KELLY SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

(UNAUDITED)

(In thousands of dollars except per share data)

Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the restructuring charges is useful to understand the Company’s fiscal 2007 financial performance and increases comparability with prior year results. 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) The Americas restructuring charge is comprised of facility exit costs associated with the closure of 58 branch locations and the accelerated depreciation of the leasehold improvements and personal property at the impacted locations.

(2) The UK restructuring charge is comprised of facility exit costs associated with the closure of 22 branch locations and the accelerated depreciation of the leasehold improvements and personal property at the impacted locations.