Kelly Services (Nasdaq: KELYA) (Nasdaq: KELYB), a global leader in
providing workforce solutions, today announced results for the
second quarter of 2019.
George S. Corona, President and Chief Executive Officer,
announced revenue for the second quarter of 2019 totaled $1.4
billion, a 1.4% decrease, or 0.2% in constant currency, compared to
the corresponding quarter of 2018. Second quarter 2019
results include the impact of the January 2019 acquisitions of
NextGen and Global Technology Associates, providers of specialty
engineering talent to the U.S. telecommunications industry.
Excluding the recent acquisitions, adjusted revenue declined 4.2%
in the second quarter, or 3.1% in constant
currency.
Earnings from operations for the second quarter of 2019 totaled
$34.8 million, compared to the $20.4 million reported for the
second quarter of 2018. Included in earnings from operations
in the second quarter of 2019 is a $12.3 million gain on sale of
assets, primarily relating to the sale of unused land, and a $0.6
million benefit from the reversal of a portion of the restructuring
charge taken in Q1 related to revitalizing the Americas Staffing
delivery model. Excluding the gain on sale of assets,
restructuring charges and recent acquisitions, adjusted earnings
from operations totaled $17.7 million, down 14% compared to the
same period in 2018.
Diluted earnings per share in the second quarter of 2019 were
$2.12 compared to a loss per share of $0.40 in the second quarter
of 2018. Included in earnings per share in the second quarter of
2019 is the favorable impact of $1.07 due to the non-cash after-tax
gain on our investment in Persol Holdings common stock compared to
a loss of $0.94 in the second quarter of 2018. Second quarter 2019
earnings per share also include the benefit of the gain on the sale
of assets, net of tax of $0.23. Adjusted for the net of
tax impact of restructuring charges, recent acquisitions, gains and
losses on Persol Holdings common stock and the gain on sale of
assets, diluted earnings per share for the quarter were $0.72
compared to $0.54 in the corresponding quarter of 2018.
“We’re pleased with the growth in gross profit, earnings and the
improved free cash flow we delivered during the second quarter,”
said Kelly President and CEO George Corona. “We continued to
effectively manage costs and successfully integrated our two recent
acquisitions that are outperforming expectations and making a
strong impact on our business,” he said. “Our focus for the
remainder of the year is on advancing our specialty talent
solutions strategy to further accelerate the growth of our
business.”
Kelly also reported that on August 7, its board of directors
declared a dividend of $0.075 per share. The dividend is payable
August 30, 2019 to shareholders of record as of the close of
business on August 20, 2019.
In conjunction with its second quarter earnings release, Kelly
Services has published a financial presentation on the Investor
Relations page of our public website and will host a conference
call at 9:00 a.m. (ET) on August 7 to review the results and answer
questions. The call may be accessed in one of the following
ways:
Via the Internet:Kellyservices.com
Via the Telephone: |
U.S. |
1 800 288-9626 |
International |
1 651 291-5254 |
The pass code is Kelly Services |
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 and disruptions, changing market and economic
conditions, our ability to achieve our business strategy, the risk
of damage to our brand, the risk our intellectual property assets
could be infringed upon or compromised, our ability to successfully
develop new service offerings, our exposure to risks associated
with services outside traditional staffing, including business
process outsourcing, our increasing dependency on third parties for
the execution of critical functions, the risks associated with past
and future acquisitions, exposure to risks associated with
investments in equity affiliates including PersolKelly Asia
Pacific, material changes in demand from or loss of large corporate
customers as well as changes in their buying practices, risks
particular to doing business with the government or government
contractors, risks associated with conducting business in foreign
countries, including foreign currency fluctuations, the exposure to
potential market and currency exchange risks relating to our
investment in Persol Holdings, risks associated with violations of
anti-corruption, trade protection and other laws and regulations,
availability of qualified full-time employees, availability of
temporary workers with appropriate skills required by customers,
liabilities for employment-related claims and losses, including
class action lawsuits and collective actions, risks arising from
failure to preserve the privacy of information entrusted to us or
to meet our obligations under global privacy laws, the risk of
cyber attacks or other breaches of network or information
technology security, our ability to sustain critical business
applications through our key data centers, our ability to
effectively implement and manage our information technology
projects, our ability to maintain adequate financial and management
processes and controls, risk of potential impairment charges
triggered by adverse industry developments or operational
circumstances, unexpected changes in claim trends on workers’
compensation, unemployment, disability and medical benefit plans,
the impact of changes in laws and regulations (including federal,
state and international tax laws), competition law risks, the risk
of additional tax or unclaimed property liabilities in excess of
our estimates, our ability to realize value from our tax credit and
net operating loss carryforwards, 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®Kelly Services,
Inc. (Nasdaq: KELYA, KELYB) connects talented people to
companies in need of their skills in areas including Science,
Engineering, Education, Office, Contact Center, Light Industrial,
and more. We’re always thinking about what’s next in the evolving
world of work, and we help people ditch the script on old ways of
thinking and embrace the value of all workstyles in the workplace.
We directly employ more than 500,000 people around the world, and
we connect thousands more with work through our global network of
talent suppliers and partners in our outsourcing and consulting
practice. Revenue in 2018 was $5.5 billion. Visit
kellyservices.com and let us help with what’s next for you.
KLYA-FIN
ANALYST & MEDIA
CONTACT:
James
Polehna
(248)
244-4586
james_polehna@kellyservices.com
KELLY SERVICES, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF EARNINGS |
FOR THE 13 WEEKS ENDED JUNE 30, 2019 AND JULY 1,
2018 |
(UNAUDITED) |
(In millions of dollars except per share data) |
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2019 |
|
2018 |
|
Change |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
1,367.5 |
|
$ |
1,386.9 |
|
$ |
(19.4 |
) |
|
(1.4 |
) |
% |
(0.2 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
1,123.5 |
|
|
1,146.4 |
|
|
(22.9 |
) |
|
(2.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
244.0 |
|
|
240.5 |
|
|
3.5 |
|
|
1.4 |
|
|
2.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
221.5 |
|
|
220.1 |
|
|
1.4 |
|
|
0.6 |
|
|
1.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of assets |
|
12.3 |
|
|
— |
|
|
12.3 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations |
|
34.8 |
|
|
20.4 |
|
|
14.4 |
|
|
70.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on investment in Persol Holdings |
|
61.2 |
|
|
(52.5 |
) |
|
113.7 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
0.2 |
|
|
0.6 |
|
|
(0.4 |
) |
|
(51.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before
taxes and equity in net earnings (loss) of affiliate |
|
96.2 |
|
|
(31.5 |
) |
|
127.7 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
12.7 |
|
|
(15.6 |
) |
|
28.3 |
|
|
181.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
before equity in net earnings (loss) of affiliate |
|
83.5 |
|
|
(15.9 |
) |
|
99.4 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings (loss) of affiliate |
|
0.3 |
|
|
0.5 |
|
|
(0.2 |
) |
|
(29.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) |
$ |
83.8 |
|
$ |
(15.4 |
) |
$ |
99.2 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share |
$ |
2.12 |
|
$ |
(0.40 |
) |
$ |
2.52 |
|
|
NM |
|
|
|
|
Diluted earnings (loss) per share |
$ |
2.12 |
|
$ |
(0.40 |
) |
$ |
2.52 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement income
(included in revenue from services) |
$ |
15.7 |
|
$ |
17.3 |
|
$ |
(1.6 |
) |
|
(9.7 |
) |
% |
(7.5 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
17.8 |
|
% |
17.3 |
|
% |
0.5 |
|
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion rate |
|
14.2 |
|
|
8.5 |
|
|
5.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Return: |
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations |
|
2.5 |
|
|
1.5 |
|
|
1.0 |
|
|
|
|
|
|
Net earnings (loss) |
|
6.1 |
|
|
(1.1 |
) |
|
7.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax rate |
|
13.2 |
|
% |
49.6 |
|
% |
(36.4 |
) |
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of shares
outstanding (millions): |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
39.1 |
|
|
38.8 |
|
|
|
|
|
|
|
|
Diluted |
|
39.2 |
|
|
38.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF EARNINGS |
FOR THE 26 WEEKS ENDED JUNE 30, 2019 AND JULY 1,
2018 |
(UNAUDITED) |
(In millions of dollars except per share data) |
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2019 |
|
2018 |
|
Change |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
2,750.1 |
|
$ |
2,756.8 |
|
$ |
(6.7 |
) |
|
(0.2 |
) |
% |
1.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
2,254.5 |
|
|
2,278.1 |
|
|
(23.6 |
) |
|
(1.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
495.6 |
|
|
478.7 |
|
|
16.9 |
|
|
3.5 |
|
|
4.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
456.3 |
|
|
446.3 |
|
|
10.0 |
|
|
2.2 |
|
|
3.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of assets |
|
12.3 |
|
|
— |
|
|
12.3 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations |
|
51.6 |
|
|
32.4 |
|
|
19.2 |
|
|
59.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on investment in Persol Holdings |
|
74.4 |
|
|
(28.8 |
) |
|
103.2 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
(0.9 |
) |
|
(1.1 |
) |
|
0.2 |
|
|
13.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before taxes
and equity in net earnings (loss) of affiliate |
|
125.1 |
|
|
2.5 |
|
|
122.6 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
19.1 |
|
|
(9.2 |
) |
|
28.3 |
|
|
307.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings before
equity in net earnings (loss) of affiliate |
|
106.0 |
|
|
11.7 |
|
|
94.3 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net earnings (loss) of affiliate |
|
(0.1 |
) |
|
2.0 |
|
|
(2.1 |
) |
|
(101.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
$ |
105.9 |
|
$ |
13.7 |
|
$ |
92.2 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
2.69 |
|
$ |
0.35 |
|
$ |
2.34 |
|
|
NM |
|
|
|
|
Diluted earnings per share |
$ |
2.68 |
|
$ |
0.35 |
|
$ |
2.33 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent placement income
(included in revenue from services) |
$ |
31.6 |
|
$ |
33.9 |
|
$ |
(2.3 |
) |
|
(6.8 |
) |
% |
(3.8 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
18.0 |
|
% |
17.4 |
|
% |
0.6 |
|
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion rate |
|
10.4 |
|
|
6.8 |
|
|
3.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Return: |
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations |
|
1.9 |
|
|
1.2 |
|
|
0.7 |
|
|
|
|
|
|
Net earnings |
|
3.9 |
|
|
0.5 |
|
|
3.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax rate |
|
15.3 |
|
% |
(366.2 |
) |
% |
381.5 |
|
pts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of shares
outstanding (millions): |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
39.0 |
|
|
38.7 |
|
|
|
|
|
|
|
|
Diluted |
|
39.2 |
|
|
38.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RESULTS OF OPERATIONS BY SEGMENT |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC
% |
|
|
|
2019 |
|
|
2018 |
|
Change |
|
Change |
|
Americas Staffing |
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
597.6 |
|
|
$ |
604.0 |
|
|
(1.0 |
) |
% |
(0.9 |
) |
% |
Gross profit |
|
108.8 |
|
|
|
108.5 |
|
|
0.2 |
|
|
0.4 |
|
|
SG&A expenses excluding restructuring charges |
|
93.8 |
|
|
|
90.7 |
|
|
3.4 |
|
|
3.6 |
|
|
Restructuring charges |
|
(0.6 |
) |
|
|
— |
|
|
NM |
|
|
NM |
|
|
Total SG&A expenses |
|
93.2 |
|
|
|
90.7 |
|
|
2.7 |
|
|
3.0 |
|
|
Earnings from operations |
|
15.6 |
|
|
|
17.8 |
|
|
(12.4 |
) |
|
|
|
Earnings from operations excluding restructuring charges |
|
15.0 |
|
|
|
17.8 |
|
|
(15.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
18.2 |
|
% |
|
18.0 |
|
% |
0.2 |
|
pts. |
|
|
Conversion rate |
|
14.3 |
|
|
|
16.4 |
|
|
(2.1 |
) |
|
|
|
Conversion rate excluding restructuring charges |
|
13.8 |
|
|
|
16.4 |
|
|
(2.6 |
) |
|
|
|
Return on sales |
|
2.6 |
|
|
|
2.9 |
|
|
(0.3 |
) |
|
|
|
Return on sales excluding restructuring charges |
|
2.5 |
|
|
|
2.9 |
|
|
(0.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Talent Solutions |
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
505.9 |
|
|
$ |
500.7 |
|
|
1.0 |
|
% |
1.4 |
|
% |
Gross profit |
|
99.7 |
|
|
|
92.7 |
|
|
7.5 |
|
|
8.2 |
|
|
Total SG&A expenses |
|
74.3 |
|
|
|
75.0 |
|
|
(0.9 |
) |
|
(0.2 |
) |
|
Earnings from operations |
|
25.4 |
|
|
|
17.7 |
|
|
43.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
19.7 |
|
% |
|
18.5 |
|
% |
1.2 |
|
pts. |
|
|
Conversion rate |
|
25.4 |
|
|
|
19.1 |
|
|
6.3 |
|
|
|
|
Return on sales |
|
5.0 |
|
|
|
3.5 |
|
|
1.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Staffing |
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
268.1 |
|
|
$ |
286.6 |
|
|
(6.5 |
) |
% |
(1.8 |
) |
% |
Gross profit |
|
36.1 |
|
|
|
39.9 |
|
|
(9.4 |
) |
|
(4.8 |
) |
|
Total SG&A expenses |
|
32.6 |
|
|
|
33.5 |
|
|
(2.6 |
) |
|
1.9 |
|
|
Earnings from operations |
|
3.5 |
|
|
|
6.4 |
|
|
(44.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
13.5 |
|
% |
|
13.9 |
|
% |
(0.4 |
) |
pts. |
|
|
Conversion rate |
|
9.7 |
|
|
|
16.0 |
|
|
(6.3 |
) |
|
|
|
Return on sales |
|
1.3 |
|
|
|
2.2 |
|
|
(0.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RESULTS OF OPERATIONS BY SEGMENT |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
June Year to Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2019 |
|
|
2018 |
|
Change |
|
Change |
|
Americas Staffing |
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
1,224.1 |
|
|
$ |
1,208.3 |
|
|
1.3 |
|
% |
1.6 |
|
% |
Gross profit |
|
226.0 |
|
|
|
216.5 |
|
|
4.4 |
|
|
4.7 |
|
|
SG&A expenses excluding restructuring charges |
|
188.7 |
|
|
|
182.6 |
|
|
3.3 |
|
|
3.6 |
|
|
Restructuring charges |
|
5.7 |
|
|
|
— |
|
|
NM |
|
|
NM |
|
|
Total SG&A expenses |
|
194.4 |
|
|
|
182.6 |
|
|
6.4 |
|
|
6.8 |
|
|
Earnings from operations |
|
31.6 |
|
|
|
33.9 |
|
|
(6.6 |
) |
|
|
|
Earnings from operations excluding restructuring charges |
|
37.3 |
|
|
|
33.9 |
|
|
10.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
18.5 |
|
% |
|
17.9 |
|
% |
0.6 |
|
pts. |
|
|
Conversion rate |
|
14.0 |
|
|
|
15.6 |
|
|
(1.6 |
) |
|
|
|
Conversion rate excluding restructuring charges |
|
16.5 |
|
|
|
15.6 |
|
|
0.9 |
|
|
|
|
Return on sales |
|
2.6 |
|
|
|
2.8 |
|
|
(0.2 |
) |
|
|
|
Return on sales excluding restructuring charges |
|
3.1 |
|
|
|
2.8 |
|
|
0.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Talent Solutions |
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
1,006.9 |
|
|
$ |
986.5 |
|
|
2.1 |
|
% |
2.5 |
|
% |
Gross profit |
|
200.1 |
|
|
|
184.5 |
|
|
8.5 |
|
|
9.3 |
|
|
Total SG&A expenses |
|
149.0 |
|
|
|
150.8 |
|
|
(1.2 |
) |
|
(0.4 |
) |
|
Earnings from operations |
|
51.1 |
|
|
|
33.7 |
|
|
51.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
19.9 |
|
% |
|
18.7 |
|
% |
1.2 |
|
pts. |
|
|
Conversion rate |
|
25.5 |
|
|
|
18.3 |
|
|
7.2 |
|
|
|
|
Return on sales |
|
5.1 |
|
|
|
3.4 |
|
|
1.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Staffing |
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
527.0 |
|
|
$ |
571.3 |
|
|
(7.8 |
) |
% |
(1.6 |
) |
% |
Gross profit |
|
70.7 |
|
|
|
79.0 |
|
|
(10.5 |
) |
|
(4.5 |
) |
|
Total SG&A expenses |
|
63.9 |
|
|
|
67.6 |
|
|
(5.5 |
) |
|
0.4 |
|
|
Earnings from operations |
|
6.8 |
|
|
|
11.4 |
|
|
(40.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit rate |
|
13.4 |
|
% |
|
13.8 |
|
% |
(0.4 |
) |
pts. |
|
|
Conversion rate |
|
9.6 |
|
|
|
14.4 |
|
|
(4.8 |
) |
|
|
|
Return on sales |
|
1.3 |
|
|
|
2.0 |
|
|
(0.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
June 30, 2019 |
|
Dec. 30, 2018 |
|
July 1, 2018 |
|
Current Assets |
|
|
|
|
|
|
|
Cash and equivalents |
$ |
37.2 |
|
$ |
35.3 |
|
$ |
33.9 |
|
|
Trade accounts receivable, less allowances of |
|
|
|
|
|
|
|
$12.1, $13.2, and $13.1, respectively |
|
1,273.6 |
|
|
1,293.3 |
|
|
1,248.9 |
|
|
Prepaid expenses and other current assets |
|
82.1 |
|
|
71.9 |
|
|
64.5 |
|
|
Total current assets |
|
1,392.9 |
|
|
1,400.5 |
|
|
1,347.3 |
|
|
|
|
|
|
|
|
|
|
Noncurrent Assets |
|
|
|
|
|
|
|
Property and equipment, net |
|
83.4 |
|
|
86.3 |
|
|
84.7 |
|
|
Operating lease right-of-use assets |
|
66.9 |
|
|
— |
|
|
— |
|
|
Deferred taxes |
|
217.5 |
|
|
198.7 |
|
|
191.7 |
|
|
Goodwill |
|
127.8 |
|
|
107.3 |
|
|
107.3 |
|
|
Investment in Persol Holdings |
|
213.7 |
|
|
135.1 |
|
|
203.2 |
|
|
Investment in equity affiliate |
|
122.0 |
|
|
121.3 |
|
|
122.0 |
|
|
Other assets |
|
318.1 |
|
|
265.2 |
|
|
278.4 |
|
|
Total noncurrent assets |
|
1,149.4 |
|
|
913.9 |
|
|
987.3 |
|
|
|
|
|
|
|
|
|
|
Total
Assets |
$ |
2,542.3 |
|
$ |
2,314.4 |
|
$ |
2,334.6 |
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
Short-term borrowings |
$ |
19.3 |
|
$ |
2.2 |
|
$ |
1.7 |
|
|
Accounts payable and accrued liabilities |
|
513.7 |
|
|
540.6 |
|
|
505.5 |
|
|
Operating lease liabilities |
|
20.3 |
|
|
— |
|
|
— |
|
|
Accrued payroll and related taxes |
|
283.5 |
|
|
266.0 |
|
|
284.7 |
|
|
Accrued workers' compensation and other claims |
|
25.1 |
|
|
26.0 |
|
|
25.3 |
|
|
Income and other taxes |
|
69.2 |
|
|
62.7 |
|
|
60.7 |
|
|
Total current liabilities |
|
931.1 |
|
|
897.5 |
|
|
877.9 |
|
|
|
|
|
|
|
|
|
|
Noncurrent Liabilities |
|
|
|
|
|
|
|
Operating lease liabilities |
|
49.3 |
|
|
— |
|
|
— |
|
|
Accrued workers' compensation and other claims |
|
48.8 |
|
|
50.5 |
|
|
49.2 |
|
|
Accrued retirement benefits |
|
178.0 |
|
|
162.9 |
|
|
182.2 |
|
|
Other long-term liabilities |
|
66.9 |
|
|
44.0 |
|
|
64.4 |
|
|
Total noncurrent liabilities |
|
343.0 |
|
|
257.4 |
|
|
295.8 |
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
|
|
|
|
|
|
Common stock |
|
40.1 |
|
|
40.1 |
|
|
40.1 |
|
|
Treasury stock |
|
(21.5 |
) |
|
(26.0 |
) |
|
(27.4 |
) |
|
Paid-in capital |
|
23.2 |
|
|
24.4 |
|
|
23.4 |
|
|
Earnings invested in the business |
|
1,238.1 |
|
|
1,138.1 |
|
|
1,134.8 |
|
|
Accumulated other comprehensive income (loss) |
|
(11.7 |
) |
|
(17.1 |
) |
|
(10.0 |
) |
|
Total stockholders' equity |
|
1,268.2 |
|
|
1,159.5 |
|
|
1,160.9 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders'
Equity |
$ |
2,542.3 |
|
$ |
2,314.4 |
|
$ |
2,334.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS: |
|
|
|
|
|
|
|
Working Capital |
$ |
461.8 |
|
$ |
503.0 |
|
$ |
469.4 |
|
|
Current Ratio |
|
1.5 |
|
|
1.6 |
|
|
1.5 |
|
|
Debt-to-capital % |
|
1.5 |
|
% |
0.2 |
|
% |
0.1 |
|
% |
Global Days Sales Outstanding |
|
57 |
|
|
55 |
|
|
55 |
|
|
Year-to-Date Free Cash Flow |
$ |
64.8 |
|
$ |
35.8 |
|
$ |
22.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
FOR THE 26 WEEKS ENDED JUNE 30, 2019 AND JULY 1,
2018 |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
2019 |
|
2018 |
Cash flows from
operating activities: |
|
|
|
|
Net earnings |
$ |
105.9 |
|
$ |
13.7 |
|
Adjustments to reconcile net earnings to net cash from operating
activities: |
|
|
|
|
Depreciation and amortization |
|
15.6 |
|
|
12.9 |
|
Operating lease asset amortization |
|
11.5 |
|
|
— |
|
Provision for bad debts |
|
1.8 |
|
|
1.5 |
|
Stock-based compensation |
|
5.2 |
|
|
4.7 |
|
(Gain) loss on investment in Persol Holdings |
|
(74.4 |
) |
|
28.8 |
|
(Gain) loss on sale of assets |
|
(12.3 |
) |
|
— |
|
Equity in net (earnings) loss of PersolKelly Asia Pacific |
|
0.1 |
|
|
(2.0 |
) |
Other, net |
|
(0.6 |
) |
|
(0.6 |
) |
Changes in operating assets and liabilities, net of
acquisitions |
|
20.7 |
|
|
(25.8 |
) |
|
|
|
|
|
Net cash from operating activities |
|
73.5 |
|
|
33.2 |
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
Capital expenditures |
|
(8.7 |
) |
|
(10.3 |
) |
Acquisition of companies, net of cash received |
|
(86.4 |
) |
|
— |
|
Proceeds from sale of assets |
|
13.8 |
|
|
— |
|
Proceeds from company-owned life insurance |
|
3.0 |
|
|
— |
|
Other investing activities |
|
(1.3 |
) |
|
(0.6 |
) |
|
|
|
|
|
Net cash used in investing activities |
|
(79.6 |
) |
|
(10.9 |
) |
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
Net change in short-term borrowings |
|
17.1 |
|
|
(8.4 |
) |
Dividend payments |
|
(5.9 |
) |
|
(5.9 |
) |
Payments of tax withholding for stock awards |
|
(2.3 |
) |
|
(6.2 |
) |
Other financing
activities |
|
(0.3 |
) |
|
— |
|
|
|
|
|
|
Net cash from (used in) financing activities |
|
8.6 |
|
|
(20.5 |
) |
|
|
|
|
|
Effect of exchange
rates on cash, cash equivalents and restricted cash |
|
(0.1 |
) |
|
(0.1 |
) |
|
|
|
|
|
Net change in cash,
cash equivalents and restricted cash |
|
2.4 |
|
|
1.7 |
|
Cash, cash equivalents
and restricted cash at beginning of period |
|
40.1 |
|
|
36.9 |
|
|
|
|
|
|
Cash, cash equivalents
and restricted cash at end of period |
$ |
42.5 |
|
$ |
38.6 |
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
REVENUE FROM SERVICES |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter (Americas, International and
GTS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2019 |
|
2018 |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
United States |
$ |
991.3 |
|
$ |
981.2 |
|
|
1.0 |
|
% |
1.0 |
|
% |
Canada |
|
33.2 |
|
|
37.0 |
|
|
(10.4 |
) |
|
(7.2 |
) |
|
Mexico |
|
29.7 |
|
|
30.0 |
|
|
(1.2 |
) |
|
(2.9 |
) |
|
Puerto Rico |
|
19.6 |
|
|
26.2 |
|
|
(25.0 |
) |
|
(25.0 |
) |
|
Brazil |
|
8.2 |
|
|
9.0 |
|
|
(9.3 |
) |
|
3.0 |
|
|
Total
Americas |
|
1,082.0 |
|
|
1,083.4 |
|
|
(0.1 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
EMEA |
|
|
|
|
|
|
|
|
|
France |
|
64.6 |
|
|
72.0 |
|
|
(10.2 |
) |
|
(4.8 |
) |
|
Switzerland |
|
49.9 |
|
|
52.8 |
|
|
(5.6 |
) |
|
(4.0 |
) |
|
Portugal |
|
46.7 |
|
|
51.2 |
|
|
(8.9 |
) |
|
(3.4 |
) |
|
United Kingdom |
|
30.5 |
|
|
28.5 |
|
|
7.0 |
|
|
13.3 |
|
|
Russia |
|
28.8 |
|
|
25.6 |
|
|
12.8 |
|
|
17.2 |
|
|
Italy |
|
20.7 |
|
|
19.3 |
|
|
7.5 |
|
|
13.7 |
|
|
Ireland |
|
10.9 |
|
|
11.7 |
|
|
(6.8 |
) |
|
(1.2 |
) |
|
Germany |
|
9.9 |
|
|
14.8 |
|
|
(33.7 |
) |
|
(29.7 |
) |
|
Other |
|
16.9 |
|
|
22.0 |
|
|
(23.0 |
) |
|
(17.8 |
) |
|
Total
EMEA |
|
278.9 |
|
|
297.9 |
|
|
(6.3 |
) |
|
(1.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total
APAC |
|
6.6 |
|
|
5.6 |
|
|
18.1 |
|
|
26.3 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Kelly Services,
Inc. |
$ |
1,367.5 |
|
$ |
1,386.9 |
|
|
(1.4 |
) |
% |
(0.2 |
) |
% |
|
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
REVENUE FROM SERVICES |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
June Year to Date (Americas, International and
GTS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
CC % |
|
|
|
2019 |
|
2018 |
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
United States |
$ |
2,010.2 |
|
$ |
1,955.9 |
|
|
2.8 |
|
% |
2.8 |
|
% |
Canada |
|
66.2 |
|
|
70.6 |
|
|
(6.2 |
) |
|
(2.1 |
) |
|
Mexico |
|
57.2 |
|
|
60.4 |
|
|
(5.4 |
) |
|
(5.1 |
) |
|
Puerto Rico |
|
38.8 |
|
|
46.0 |
|
|
(15.7 |
) |
|
(15.7 |
) |
|
Brazil |
|
16.7 |
|
|
18.5 |
|
|
(9.8 |
) |
|
3.7 |
|
|
Total
Americas |
|
2,189.1 |
|
|
2,151.4 |
|
|
1.7 |
|
|
2.0 |
|
|
|
|
|
|
|
|
|
|
|
|
EMEA |
|
|
|
|
|
|
|
|
|
France |
|
128.9 |
|
|
143.9 |
|
|
(10.4 |
) |
|
(4.0 |
) |
|
Switzerland |
|
99.4 |
|
|
102.5 |
|
|
(3.0 |
) |
|
0.3 |
|
|
Portugal |
|
91.5 |
|
|
102.3 |
|
|
(10.6 |
) |
|
(4.3 |
) |
|
United Kingdom |
|
56.7 |
|
|
57.5 |
|
|
(1.4 |
) |
|
4.8 |
|
|
Russia |
|
54.2 |
|
|
51.7 |
|
|
5.0 |
|
|
14.9 |
|
|
Italy |
|
41.3 |
|
|
39.8 |
|
|
3.9 |
|
|
11.2 |
|
|
Ireland |
|
21.0 |
|
|
23.0 |
|
|
(8.6 |
) |
|
(2.1 |
) |
|
Germany |
|
21.0 |
|
|
31.2 |
|
|
(32.9 |
) |
|
(28.0 |
) |
|
Other |
|
34.9 |
|
|
42.8 |
|
|
(18.4 |
) |
|
(11.9 |
) |
|
Total
EMEA |
|
548.9 |
|
|
594.7 |
|
|
(7.7 |
) |
|
(1.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total
APAC |
|
12.1 |
|
|
10.7 |
|
|
13.7 |
|
|
22.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Kelly Services,
Inc. |
$ |
2,750.1 |
|
$ |
2,756.8 |
|
|
(0.2 |
) |
% |
1.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP MEASURES |
SECOND QUARTER |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
2019 |
|
2018 |
Revenue from
Services: |
As Reported |
|
Restructuring(2) |
|
Acquisitions(3) |
|
Adjusted |
|
As Reported |
Americas Staffing |
$ |
597.6 |
|
|
$ |
— |
|
|
$ |
(22.7 |
) |
|
$ |
574.9 |
|
|
$ |
604.0 |
|
Global Talent Solutions |
505.9 |
|
|
— |
|
|
(16.7 |
) |
|
489.2 |
|
|
500.7 |
|
International Staffing |
268.1 |
|
|
— |
|
|
— |
|
|
268.1 |
|
|
286.6 |
|
Intersegment |
(4.1 |
) |
|
— |
|
|
— |
|
|
(4.1 |
) |
|
(4.4 |
) |
Total Company |
$ |
1,367.5 |
|
|
$ |
— |
|
|
$ |
(39.4 |
) |
|
$ |
1,328.1 |
|
|
$ |
1,386.9 |
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
Gross
Profit: |
As Reported |
|
Restructuring(2) |
|
Acquisitions(3) |
|
Adjusted |
|
As Reported |
Americas Staffing |
$ |
108.8 |
|
|
$ |
— |
|
|
$ |
(7.0 |
) |
|
$ |
101.8 |
|
|
$ |
108.5 |
|
Global Talent Solutions |
99.7 |
|
|
— |
|
|
(4.1 |
) |
|
95.6 |
|
|
92.7 |
|
International Staffing |
36.1 |
|
|
— |
|
|
— |
|
|
36.1 |
|
|
39.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment |
(0.6 |
) |
|
— |
|
|
— |
|
|
(0.6 |
) |
|
(0.6 |
) |
Total Company |
$ |
244.0 |
|
|
$ |
— |
|
|
$ |
(11.1 |
) |
|
$ |
232.9 |
|
|
$ |
240.5 |
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
SG&A
Expenses: |
As Reported |
|
Restructuring(2) |
|
Acquisitions(3) |
|
Adjusted |
|
As Reported |
Americas Staffing |
$ |
93.2 |
|
|
$ |
0.6 |
|
|
$ |
(5.0 |
) |
|
$ |
88.8 |
|
|
$ |
90.7 |
|
Global Talent Solutions |
74.3 |
|
|
— |
|
|
(1.9 |
) |
|
72.4 |
|
|
75.0 |
|
International Staffing |
32.6 |
|
|
— |
|
|
— |
|
|
32.6 |
|
|
33.5 |
|
Corporate |
22.0 |
|
|
— |
|
|
— |
|
|
22.0 |
|
|
21.5 |
|
Intersegment |
(0.6 |
) |
|
— |
|
|
— |
|
|
(0.6 |
) |
|
(0.6 |
) |
Total Company |
$ |
221.5 |
|
|
$ |
0.6 |
|
|
$ |
(6.9 |
) |
|
$ |
215.2 |
|
|
$ |
220.1 |
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
Earnings from
Operations: |
As Reported |
|
Restructuring(2) |
|
Acquisitions(3) |
|
Gain on sale of assets(4) |
|
Adjusted |
|
As Reported |
Americas Staffing |
$ |
15.6 |
|
|
$ |
(0.6 |
) |
|
$ |
(2.0 |
) |
|
$ |
— |
|
|
$ |
13.0 |
|
|
$ |
17.8 |
|
Global Talent Solutions |
25.4 |
|
|
— |
|
|
(2.2 |
) |
|
— |
|
|
23.2 |
|
|
17.7 |
|
International Staffing |
3.5 |
|
|
— |
|
|
— |
|
|
— |
|
|
3.5 |
|
|
6.4 |
|
Corporate |
(9.7 |
) |
|
— |
|
|
— |
|
|
(12.3 |
) |
|
(22.0 |
) |
|
(21.5 |
) |
Total Company |
$ |
34.8 |
|
|
$ |
(0.6 |
) |
|
$ |
(4.2 |
) |
|
$ |
(12.3 |
) |
|
$ |
17.7 |
|
|
$ |
20.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP MEASURES |
JUNE YEAR TO DATE |
(UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
Revenue from
Services: |
As Reported |
|
Restructuring(2) |
|
Acquisitions(3) |
|
Adjusted |
|
As Reported |
Americas Staffing |
$ |
1,224.1 |
|
|
$ |
— |
|
|
$ |
(42.9 |
) |
|
$ |
1,181.2 |
|
|
$ |
1,208.3 |
|
Global Talent Solutions |
1,006.9 |
|
|
— |
|
|
(32.4 |
) |
|
974.5 |
|
|
986.5 |
|
International Staffing |
527.0 |
|
|
— |
|
|
— |
|
|
527.0 |
|
|
571.3 |
|
Intersegment |
(7.9 |
) |
|
— |
|
|
— |
|
|
(7.9 |
) |
|
(9.3 |
) |
Total Company |
$ |
2,750.1 |
|
|
$ |
— |
|
|
$ |
(75.3 |
) |
|
$ |
2,674.8 |
|
|
$ |
2,756.8 |
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
Gross
Profit: |
As Reported |
|
Restructuring(2) |
|
Acquisitions(3) |
|
Adjusted |
|
As Reported |
Americas Staffing |
$ |
226.0 |
|
|
$ |
— |
|
|
$ |
(13.2 |
) |
|
$ |
212.8 |
|
|
$ |
216.5 |
|
Global Talent Solutions |
200.1 |
|
|
— |
|
|
(7.0 |
) |
|
193.1 |
|
|
184.5 |
|
International Staffing |
70.7 |
|
|
— |
|
|
— |
|
|
70.7 |
|
|
79.0 |
|
Intersegment |
(1.2 |
) |
|
— |
|
|
— |
|
|
(1.2 |
) |
|
(1.3 |
) |
Total Company |
$ |
495.6 |
|
|
$ |
— |
|
|
$ |
(20.2 |
) |
|
$ |
475.4 |
|
|
$ |
478.7 |
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
SG&A
Expenses: |
As Reported |
|
Restructuring(2) |
|
Acquisitions(3) |
|
Adjusted |
|
As Reported |
Americas Staffing |
$ |
194.4 |
|
|
$ |
(5.7 |
) |
|
$ |
(10.0 |
) |
|
$ |
178.7 |
|
|
$ |
182.6 |
|
Global Talent Solutions |
149.0 |
|
|
— |
|
|
(3.7 |
) |
|
145.3 |
|
|
150.8 |
|
International Staffing |
63.9 |
|
|
— |
|
|
— |
|
|
63.9 |
|
|
67.6 |
|
Corporate |
50.2 |
|
|
— |
|
|
— |
|
|
50.2 |
|
|
46.6 |
|
Intersegment |
(1.2 |
) |
|
— |
|
|
— |
|
|
(1.2 |
) |
|
(1.3 |
) |
Total Company |
$ |
456.3 |
|
|
$ |
(5.7 |
) |
|
$ |
(13.7 |
) |
|
$ |
436.9 |
|
|
$ |
446.3 |
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
Earnings from
Operations: |
As Reported |
|
Restructuring(2) |
|
Acquisitions(3) |
|
Gain on sale of assets(4) |
|
Adjusted |
|
As Reported |
Americas Staffing |
$ |
31.6 |
|
|
$ |
5.7 |
|
|
$ |
(3.2 |
) |
|
$ |
— |
|
|
$ |
34.1 |
|
|
$ |
33.9 |
|
Global Talent Solutions |
51.1 |
|
|
— |
|
|
(3.3 |
) |
|
— |
|
|
47.8 |
|
|
33.7 |
|
International Staffing |
6.8 |
|
|
— |
|
|
— |
|
|
— |
|
|
6.8 |
|
|
11.4 |
|
Corporate |
(37.9 |
) |
|
— |
|
|
— |
|
|
(12.3 |
) |
|
(50.2 |
) |
|
(46.6 |
) |
Total Company |
$ |
51.6 |
|
|
$ |
5.7 |
|
|
$ |
(6.5 |
) |
|
$ |
(12.3 |
) |
|
$ |
38.5 |
|
|
$ |
32.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KELLY SERVICES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP MEASURES
(continued) |
(UNAUDITED) |
(In millions of dollars except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
June Year to Date |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Income tax expense (benefit) |
$ |
12.7 |
|
|
$ |
(15.6 |
) |
|
$ |
19.1 |
|
|
$ |
(9.2 |
) |
Tax expense on investment in
Persol Holdings(1) |
(18.7 |
) |
|
16.2 |
|
|
(22.8 |
) |
|
8.9 |
|
Tax expense on restructuring
charges(2) |
(0.1 |
) |
|
— |
|
|
1.5 |
|
|
— |
|
Tax expense on
acquisitions(3) |
(1.0 |
) |
|
— |
|
|
(1.6 |
) |
|
— |
|
Tax expense on gain on sale of
assets(4) |
(3.3 |
) |
|
— |
|
|
(3.3 |
) |
|
— |
|
Adjusted income tax expense
(benefit) |
$ |
(10.4 |
) |
|
$ |
0.6 |
|
|
$ |
(7.1 |
) |
|
$ |
(0.3 |
) |
|
|
|
|
|
|
|
|
|
Second Quarter |
|
June Year to Date |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Net earnings (loss) |
$ |
83.8 |
|
|
$ |
(15.4 |
) |
|
$ |
105.9 |
|
|
$ |
13.7 |
|
(Gain) loss on investment in
Persol Holdings, net of taxes(1) |
(42.5 |
) |
|
36.3 |
|
|
(51.6 |
) |
|
19.9 |
|
Restructuring charges, net of
taxes(2) |
(0.5 |
) |
|
— |
|
|
4.2 |
|
|
— |
|
Net earnings from
acquisitions(3) |
(3.2 |
) |
|
— |
|
|
(4.9 |
) |
|
— |
|
Gain on sale of assets, net of
taxes(4) |
(9.0 |
) |
|
— |
|
|
(9.0 |
) |
|
— |
|
Adjusted net earnings |
$ |
28.6 |
|
|
$ |
20.9 |
|
|
$ |
44.6 |
|
|
$ |
33.6 |
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
June Year to Date |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
Per Share |
|
Per Share |
Net earnings (loss) |
$ |
2.12 |
|
|
$ |
(0.40 |
) |
|
$ |
2.68 |
|
|
$ |
0.35 |
|
(Gain) loss on investment in
Persol Holdings, net of taxes(1) |
(1.07 |
) |
|
0.94 |
|
|
(1.31 |
) |
|
0.51 |
|
Restructuring charges, net of
taxes(2) |
(0.01 |
) |
|
— |
|
|
0.11 |
|
|
— |
|
Acquisitions, net of
taxes(3) |
(0.08 |
) |
|
— |
|
|
(0.12 |
) |
|
— |
|
Gain on sale of assets, net of
taxes(4) |
(0.23 |
) |
|
— |
|
|
(0.23 |
) |
|
— |
|
Adjusted net earnings |
$ |
0.72 |
|
|
$ |
0.54 |
|
|
$ |
1.13 |
|
|
$ |
0.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
SUBSIDIARIESRECONCILIATION OF NON-GAAP
MEASURES(UNAUDITED)
Management believes that the non-GAAP (Generally Accepted
Accounting Principles) information excluding the 2019 and 2018
gains and losses on the investment in Persol Holdings, the 2019
restructuring charges, the 2019 acquisitions, and the 2019 gain on
sale of assets are useful to understand the Company's fiscal 2019
financial performance and increases comparability.
Specifically, Management believes that removing the impact of these
items allows for a meaningful comparison of current period
operating performance with the operating results of prior
periods. Additionally, the Company does not acquire
businesses on a predictable cycle and the terms of each acquisition
are unique and may vary significantly. Management also
believes that such measures are used by those analyzing performance
of companies in the staffing industry to compare current
performance to prior periods and to assess future performance.
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 gains on the investment in Persol Holdings
represent the change in fair value of the investment during the
period presented and the related tax expense.
(2) Restructuring charges in 2019 represent severance
costs primarily related to U.S. branch-based staffing
operations.
(3) NextGen and GTA were acquired on January 2, 2019, and
were included in the reported results of operations of Americas
Staffing and GTS segments, respectively, from the date of
acquisition.
(4) Gain on sale of assets primarily represents the excess of
the proceeds over the cost of an unused parcel of land located near
the Company headquarters sold during the second quarter of
2019.
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