U.S. 1-800-288-8960 International 1-612-288-0337The 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. (
KELLY SERVICES, INC. AND SUBSIDIARIES
STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED SEPTEMBER 30, 2007 AND OCTOBER 1, 2006
(UNAUDITED)
(In thousands of dollars except per share data)
2007 2006 Change % Change
----------- ----------- --------- ------
Revenue from services $ 1,425,298 $ 1,396,911 $ 28,387 2.0 %
Cost of services 1,178,419 1,166,061 12,358 1.1
----------- ----------- --------- ------
Gross profit 246,879 230,850 16,029 6.9
Selling, general and
administrative expenses 226,099 207,870 18,229 8.8
----------- ----------- --------- ------
Earnings from operations 20,780 22,980 (2,200) (9.6)
Other income, net 587 348 239 68.7
----------- ----------- --------- ------
Earnings from continuing
operations before taxes 21,367 23,328 (1,961) (8.4)
Income taxes 6,685 6,893 (208) (3.0)
----------- ----------- --------- ------
Earnings from continuing
operations 14,682 16,435 (1,753) (10.7)
Earnings from discontinued
operations, net of tax 459 1,383 (924) (66.8)
----------- ----------- --------- ------
Net earnings $ 15,141 $ 17,818 $ (2,677) (15.0)%
=========== =========== ========= ======
Basic earnings per share
Earnings from continuing
operations $ 0.40 $ 0.46 $ (0.06) (13.0)%
Earnings from
discontinued operations 0.01 0.04 (0.03) (75.0)
----------- ----------- --------- ------
Net earnings $ 0.41 $ 0.49 $ (0.08) (16.3)%
=========== =========== ========= ======
Diluted earnings per share
Earnings from continuing
operations $ 0.40 $ 0.45 $ (0.05) (11.1)%
Earnings from
discontinued operations 0.01 0.04 (0.03) (75.0)
----------- ----------- --------- ------
Net earnings $ 0.41 $ 0.49 $ (0.08) (16.3)%
=========== =========== ========= ======
STATISTICS:
Gross profit rate 17.3% 16.5% 0.8%
Expenses as a % of revenue 15.9 14.9 1.0
% Return - Earnings from
operations 1.5 1.6 (0.1)
Earnings from continuing
operations before taxes 1.5 1.7 (0.2)
Earnings from continuing
operations 1.0 1.2 (0.2)
Net earnings 1.1 1.3 (0.2)
Effective income tax rate 31.3% 29.5% 1.8%
Average number of shares
outstanding (thousands):
Basic 36,500 35,997
Diluted 36,537 36,225
KELLY SERVICES, INC. AND SUBSIDIARIES
STATEMENTS OF EARNINGS
FOR THE 39 WEEKS ENDED SEPTEMBER 30, 2007 AND OCTOBER 1, 2006
(UNAUDITED)
(In thousands of dollars except per share data)
2007 2006 Change % Change
----------- ----------- --------- ------
Revenue from services $ 4,191,830 $ 4,125,402 $ 66,428 1.6 %
Cost of services 3,468,177 3,458,168 10,009 0.3
----------- ----------- --------- ------
Gross profit 723,653 667,234 56,419 8.5
Selling, general and
administrative expenses 670,114 611,494 58,620 9.6
----------- ----------- --------- ------
Earnings from operations 53,539 55,740 (2,201) (3.9)
Other income, net 2,190 853 1,337 156.7
----------- ----------- --------- ------
Earnings from continuing
operations before taxes 55,729 56,593 (864) (1.5)
Income taxes 20,478 20,136 342 1.7
----------- ----------- --------- ------
Earnings from continuing
operations 35,251 36,457 (1,206) (3.3)
Earnings from discontinued
operations, net of tax 7,134 2,592 4,542 175.2
----------- ----------- --------- ------
Net earnings $ 42,385 $ 39,049 $ 3,336 8.5 %
=========== =========== ========= ======
Basic earnings per share
Earnings from continuing
operations $ 0.96 $ 1.01 $ (0.05) (5.0)%
Earnings from
discontinued operations 0.20 0.07 0.13 185.7
----------- ----------- --------- ------
Net earnings $ 1.16 $ 1.09 $ 0.07 6.4 %
=========== =========== ========= ======
Diluted earnings per share
Earnings from continuing
operations $ 0.96 $ 1.01 $ (0.05) (5.0)%
Earnings from
discontinued operations 0.19 0.07 0.12 171.4
----------- ----------- --------- ------
Net earnings $ 1.15 $ 1.08 $ 0.07 6.5 %
=========== =========== ========= ======
STATISTICS:
Gross profit rate 17.3% 16.2% 1.1%
Expenses as a % of revenue 16.0 14.8 1.2
% Return - Earnings from
operations 1.3 1.4 (0.1)
Earnings from continuing
operations before taxes 1.3 1.4 (0.1)
Earnings from continuing
operations 0.8 0.9 (0.1)
Net earnings 1.0 0.9 0.1
Effective income tax rate 36.7% 35.6% 1.1%
Average number of shares
outstanding (thousands):
Basic 36,557 35,937
Diluted 36,843 36,226
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In thousands of dollars)
Third Quarter
2007 2006 Change % Change
----------- ----------- --------- ------
Revenue from Services:
Americas - Commercial $ 682,534 $ 723,762 $ (41,228) (5.7)%
Americas - PTSA 277,859 273,482 4,377 1.6
----------- ----------- --------- ------
Total Americas 960,393 997,244 (36,851) (3.7)
International - Commercial 412,292 362,187 50,105 13.8
International - PTSA 52,613 37,480 15,133 40.4
----------- ----------- --------- ------
Total International 464,905 399,667 65,238 16.3
$ 1,425,298 $ 1,396,911 $ 28,387 2.0 %
=========== =========== ========= ======
Earnings from Operations (As Reported):
Americas - Commercial $ 19,001 $ 25,808 $ (6,807) (26.4)%
Americas - PTSA 14,532 15,003 (471) (3.1)
----------- ----------- --------- ------
Total Americas 33,533 40,811 (7,278) (17.8)
International - Commercial 4,605 3,209 1,396 43.5
International - PTSA 950 288 662 229.9
----------- ----------- --------- ------
Total International 5,555 3,497 2,058 58.9
Corporate Expense (18,308) (21,328) 3,020 14.2
----------- ----------- --------- ------
$ 20,780 $ 22,980 $ (2,200) (9.6)%
=========== =========== ========= ======
Earnings from Operations (Excluding the Restructuring Charges):
Americas - Commercial $ 20,512 $ 25,808 $ (5,296) (20.5)%
Americas - PTSA 14,532 15,003 (471) (3.1)
----------- ----------- --------- ------
Total Americas 35,044 40,811 (5,767) (14.1)
International - Commercial 5,558 3,209 2,349 73.2
International - PTSA 950 288 662 229.9
----------- ----------- --------- ------
Total International 6,508 3,497 3,011 86.1
Corporate Expense (18,308) (21,328) 3,020 14.2
----------- ----------- --------- ------
$ 23,244 $ 22,980 $ 264 1.1 %
=========== =========== ========= ======
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In thousands of dollars)
September Year to Date
2007 2006 Change % Change
----------- ----------- ---------- ------
Revenue from Services:
Americas - Commercial $ 2,063,559 $ 2,176,961 $ (113,402) (5.2)%
Americas - PTSA 812,922 830,982 (18,060) (2.2)
----------- ----------- ---------- ------
Total Americas 2,876,481 3,007,943 (131,462) (4.4)
International - Commercial 1,168,924 1,013,698 155,226 15.3
International - PTSA 146,425 103,761 42,664 41.1
----------- ----------- ---------- ------
Total International 1,315,349 1,117,459 197,890 17.7
$ 4,191,830 $ 4,125,402 $ 66,428 1.6 %
=========== =========== ========== ======
Earnings from Operations (As Reported):
Americas - Commercial $ 63,051 $ 73,321 $ (10,270) (14.0)%
Americas - PTSA 41,745 43,005 (1,260) (2.9)
----------- ----------- ---------- ------
Total Americas 104,796 116,326 (11,530) (9.9)
International - Commercial 4,406 312 4,094 NM
International - PTSA 1,742 390 1,352 346.7
----------- ----------- ---------- ------
Total International 6,148 702 5,446 775.8
Corporate Expense (57,405) (61,288) 3,883 6.3
----------- ----------- ---------- ------
$ 53,539 $ 55,740 $ (2,201) (3.9)%
=========== =========== ========== ======
Earnings from Operations (Excluding the Restructuring Charges):
Americas - Commercial $ 64,562 $ 73,321 $ (8,759) (11.9)%
Americas - PTSA 41,745 43,005 (1,260) (2.9)
----------- ----------- ---------- ------
Total Americas 106,307 116,326 (10,019) (8.6)
International - Commercial 10,441 312 10,129 NM
International - PTSA 1,742 390 1,352 346.7
----------- ----------- ---------- ------
Total International 12,183 702 11,481 NM
Corporate Expense (57,405) (61,288) 3,883 6.3
----------- ----------- ---------- ------
$ 61,085 $ 55,740 $ 5,345 9.6 %
=========== =========== ========== ======
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF CONSTANT CURRENCY
REVENUE FROM SERVICES TO REPORTED REVENUE FROM SERVICES
(UNAUDITED)
(In thousands of dollars)
Third Quarter
2007 2006 Change % Change
----------- ----------- ---------- ------
Revenue from services -
constant currency*:
Americas - Commercial $ 678,265 $ 723,762 $ (45,497) (6.3)%
Americas - PTSA 277,611 273,482 4,129 1.5
----------- ----------- ---------- ------
Total Americas - constant
currency* 955,876 997,244 (41,368) (4.1)
International - Commercial 383,372 362,187 21,185 5.8
International - PTSA 48,835 37,480 11,355 30.3
----------- ----------- ---------- ------
Total International -
constant currency* 432,207 399,667 32,540 8.1
Total revenue from services
- constant currency* 1,388,083 1,396,911 (8,828) (0.6)%
Foreign currency impact 37,215 37,215
----------- ----------- ---------- ------
Revenue from services $ 1,425,298 $ 1,396,911 $ 28,387 2.0 %
=========== =========== ========== ======
September Year to Date
2007 2006 Change % Change
----------- ----------- ---------- ------
Revenue from services -
constant currency*:
Americas - Commercial $ 2,059,003 $ 2,176,961 $ (117,958) (5.4)%
Americas - PTSA 812,639 830,982 (18,343) (2.2)
----------- ----------- ---------- ------
Total Americas - constant
currency* 2,871,642 3,007,943 (136,301) (4.5)
International - Commercial 1,086,089 1,013,698 72,391 7.1
International - PTSA 135,821 103,761 32,060 30.9
----------- ----------- ---------- ------
Total International -
constant currency* 1,221,910 1,117,459 104,451 9.3
Total revenue from services
- constant currency* 4,093,552 4,125,402 (31,850) (0.8)%
Foreign currency impact 98,278 98,278
----------- ----------- ---------- ------
Revenue from services $ 4,191,830 $ 4,125,402 $ 66,428 1.6 %
=========== =========== ========== ======
* 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.
KELLY SERVICES, INC. AND SUBSIDIARIES
SUMMARY OF DISCONTINUED OPERATIONS
(UNAUDITED)
(In thousands of dollars)
September
Third Quarter Year to Date
----------------- -----------------
2007 2006 2007 2006
-------- -------- -------- --------
Revenue from services $ - $ 21,893 $ 14,777 $ 69,900
Operating income from discontinued
operations $ 746 $ 2,272 $ 1,573 $ 4,275
Less: Income taxes 287 889 605 1,683
-------- -------- -------- --------
Earnings from discontinued operations,
net of tax 459 1,383 968 2,592
-------- -------- -------- --------
Gain on sale of discontinued operations - - 10,153 -
Less: Income taxes - - 3,987 -
-------- -------- -------- --------
Gain on sale of discontinued
operations, net of tax - - 6,166 -
-------- -------- -------- --------
Discontinued operations, net of tax $ 459 $ 1,383 $ 7,134 $ 2,592
======== ======== ======== ========
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 gain on the sale of KHC, have been
excluded from earnings from continuing operations. This schedule provides
information on KHC's and KSL's results from operations for the third
quarter of 2007 and 2006 and September year to date 2007 and 2006 as well
as the gain on the sale of KHC, all of which are included as discontinued
operations on the face of the statements of earnings.
KELLY SERVICES, INC. AND SUBSIDIARIES
BALANCE SHEETS
(UNAUDITED)
(In thousands of dollars)
September 30, December 31, October 1,
2007 2006 2006
----------- ----------- -----------
Current Assets
Cash and equivalents $ 102,982 $ 118,428 $ 77,493
Trade accounts receivable, less
allowances of $18,357, $16,818
and $17,840, respectively 903,566 838,246 878,336
Prepaid expenses and other
current assets 49,734 45,316 45,076
Deferred taxes 30,342 29,543 34,693
----------- ----------- -----------
Total current assets 1,086,624 1,031,533 1,035,598
Property and Equipment, Net 175,106 170,288 162,791
Noncurrent Deferred Taxes 37,458 35,437 23,128
Goodwill, Net 122,917 96,504 94,592
Other Assets 147,570 135,662 113,599
----------- ----------- -----------
Total Assets $ 1,569,675 $ 1,469,424 $ 1,429,708
=========== =========== ===========
Current Liabilities
Short-term borrowings $ 75,489 $ 68,928 $ 58,375
Accounts payable 161,843 132,819 125,213
Accrued payroll and related taxes 286,056 274,284 293,223
Accrued insurance 25,495 24,191 32,728
Income and other taxes 65,073 68,055 63,559
----------- ----------- -----------
Total current liabilities 613,956 568,277 573,098
Noncurrent Liabilities
Accrued insurance 59,489 57,277 53,294
Accrued retirement benefits 81,249 71,990 63,641
Other long-term liabilities 17,865 13,323 15,238
----------- ----------- -----------
Total noncurrent liabilities 158,603 142,590 132,173
Stockholders' Equity
Common stock 40,116 40,116 40,116
Treasury stock (84,323) (78,841) (86,665)
Paid-in capital 33,406 32,048 28,955
Earnings invested in the business 763,577 735,104 715,249
Accumulated other comprehensive
income 44,340 30,130 26,782
----------- ----------- -----------
Total stockholders' equity 797,116 758,557 724,437
----------- ----------- -----------
Total Liabilities and Stockholders'
Equity $ 1,569,675 $ 1,469,424 $ 1,429,708
=========== =========== ===========
STATISTICS:
Working Capital $ 472,668 $ 463,256 $ 462,500
Current Ratio 1.8 1.8 1.8
Debt-to-capital % 8.7% 8.3% 7.5%
Global Days Sales Outstanding
Quarter 58 54 57
Year-to-date 59 55 58
KELLY SERVICES, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
FOR THE 39 WEEKS ENDED SEPTEMBER 30, 2007 AND OCTOBER 1, 2006
(UNAUDITED)
(In thousands of dollars)
2007 2006
--------- ---------
Cash flows from operating activities
Net earnings $ 42,385 $ 39,049
Noncash adjustments:
Depreciation and amortization 31,051 30,949
Provision for bad debts 4,926 3,981
Stock-based compensation 2,683 3,913
Gain on sale of discontinued operations (6,166) -
Other, net (422) (99)
Changes in operating assets and liabilities (24,808) (18,679)
--------- ---------
Net cash from operating activities 49,649 59,114
--------- ---------
Cash flows from investing activities
Capital expenditures (33,567) (26,111)
Proceeds from sale of discontinued operations 12,500 -
Acquisition of companies, net of cash received (25,255) (4,531)
Other investing activities (586) (541)
Net cash from investing activities (46,908) (31,183)
--------- ---------
Cash flows from financing activities
Net decrease in revolving line of credit (3,469) (5,369)
Proceeds from short-term debt 8,223 5,080
Dividend payments (14,244) (11,833)
Purchase of treasury stock (12,500) -
Stock options and other stock sales 5,760 1,683
Other financing activities (5,767) (4,504)
--------- ---------
Net cash from financing activities (21,997) (14,943)
--------- ---------
Effect of exchange rates on cash and equivalents 3,810 806
--------- ---------
Net change in cash and equivalents (15,446) 13,794
Cash and equivalents at beginning of period 118,428 63,699
--------- ---------
Cash and equivalents at end of period $ 102,982 $ 77,493
========= =========
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In thousands of dollars)
Third Quarter
-----------------------------------------------
% Change
Constant
2007 2006 US$ Currency
----------- ----------- --------- ---------
Americas
United States $ 854,562 $ 890,940 (4.1)% (4.1)%
Canada 67,541 69,619 (3.0) (9.5)
Puerto Rico 19,171 18,338 4.5 4.5
Mexico 19,119 18,347 4.2 4.4
----------- ----------- --------- ---------
Total Americas 960,393 997,244 (3.7) (4.1)
EMEA
United Kingdom 119,385 111,687 6.9 (0.9)
France 82,498 72,574 13.7 5.4
Switzerland 49,363 46,945 5.2 1.8
Italy 28,795 28,638 0.5 (6.9)
Norway 21,902 17,118 27.9 16.6
Russia 17,542 14,256 23.0 17.0
Germany 16,605 11,268 47.4 36.6
Other 38,071 30,927 23.1 13.8
----------- ----------- --------- ---------
Total EMEA 374,161 333,413 12.2 4.6
APAC
Australia 35,169 29,958 17.4 4.8
Singapore 16,354 12,702 28.8 23.6
Other 39,221 23,594 66.2 53.6
----------- ----------- --------- ---------
Total APAC 90,744 66,254 37.0 25.8
Total Kelly Services, Inc. $ 1,425,298 $ 1,396,911 2.0% (0.6)%
=========== =========== ========= =========
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In thousands of dollars)
September Year to Date
-----------------------------------------------
% Change
Constant
2007 2006 US$ Currency
----------- ----------- --------- ---------
Americas
United States $ 2,573,282 $ 2,692,586 (4.4)% (4.4)%
Canada 191,009 205,986 (7.3) (9.7)
Puerto Rico 57,341 57,577 (0.4) (0.4)
Mexico 54,849 51,794 5.9 6.3
----------- ----------- --------- ---------
Total Americas 2,876,481 3,007,943 (4.4) (4.5)
EMEA
United Kingdom 355,790 331,239 7.4 (1.7)
France 227,924 201,991 12.8 4.5
Switzerland 130,752 114,595 14.1 10.6
Italy 92,781 87,757 5.7 (2.1)
Norway 56,523 40,832 38.4 29.5
Russia 48,876 37,574 30.1 23.1
Germany 45,502 29,386 54.8 43.4
Other 110,807 85,834 29.1 19.3
----------- ----------- --------- ---------
Total EMEA 1,068,955 929,208 15.0 6.9
APAC
Australia 96,107 87,344 10.0 0.0
Singapore 44,074 37,934 16.2 10.9
Other 106,213 62,973 68.7 57.9
----------- ----------- --------- ---------
Total APAC 246,394 188,251 30.9 21.6
Total Kelly Services, Inc. $ 4,191,830 $ 4,125,402 1.6% (0.8)%
=========== =========== ========= =========
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
(In thousands of dollars except per share data)
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
========= ========== ========== =========
Third Quarter
------------------------------------------
2007 2006 % Change
--------- ---------- ---------
Selling, general and
administrative expenses $ 226,099 $ 207,870
Restructuring charges
(Notes 1 & 2) (2,464) -
--------- ----------
Selling, general and
administrative expenses
excluding restructuring
charges $ 223,635 $ 207,870 7.6%
========= ========== =========
Earnings from operations $ 20,780 $ 22,980
Restructuring charges
(Notes 1 & 2) 2,464 -
--------- ----------
Earnings from operations
excluding restructuring
charges $ 23,244 $ 22,980 1.1%
========= ========== =========
Americas Commercial selling,
general and administrative
expenses $ 88,440 $ 85,971
Americas restructuring
charge (Note 1) (1,511) -
--------- ----------
Americas Commercial selling,
general and administrative
expenses excluding the
Americas restructuring
charge $ 86,929 $ 85,971 1.1%
========= ========== =========
Americas Commercial Earnings
from operations $ 19,001 $ 25,808
Americas restructuring
charge (Note 1) 1,511 -
--------- ----------
Americas Commercial earnings
excluding the Americas
restructuring charge $ 20,512 $ 25,808 (20.5%)
========= ========== =========
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES (continued)
(UNAUDITED)
(In thousands of dollars except per share data)
Third Quarter
----------------------------
2007 2006 % Change
-------- --------- --------
Americas Earnings from operations $ 33,533 $ 40,811
Americas restructuring charge (Note 1) 1,511 -
-------- ---------
Americas earnings excluding the Americas
restructuring charge $ 35,044 $ 40,811 (14.1%)
======== ========= ========
International Commercial selling, general
and administrative expenses $ 66,822 $ 58,598
UK restructuring charge (Note 2) (953) -
-------- ---------
International Commercial selling, general
and administrative expenses excluding the
UK restructuring charge $ 65,869 $ 58,598 12.4%
======== ========= ========
International Commercial Earnings from
operations $ 4,605 $ 3,209
UK restructuring charge (Note 2) 953 -
-------- ---------
International Commercial earnings excluding
the UK restructuring charge $ 5,558 $ 3,209 73.2%
======== ========= ========
International Earnings from operations $ 5,555 $ 3,497
UK restructuring charge (Note 2) 953 -
-------- ---------
International earnings excluding the UK
restructuring charge $ 6,508 $ 3,497 86.1%
======== ========= ========
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
(In thousands of dollars except per share data)
September Year to Date
------------------------------------------
2007 2006
-------------------- ---------------------
Amount Per Share Amount Per Share
--------- ---------- ---------- ---------
Earnings from continuing
operations $ 35,251 $ 0.96 $ 36,457 $ 1.01
Restructuring charges,
net of taxes (Notes 1 & 2) 6,964 0.19 - -
--------- ---------- ---------- ---------
Earnings from continuing
operations excluding
restructuring charges, net
of taxes $ 42,215 $ 1.15 $ 36,457 $ 1.01
========= ========== ========== =========
September Year to Date
------------------------------------------
2007 2006 % Change
--------- ---------- ---------
Selling, general and
administrative expenses $ 670,114 $ 611,494
Restructuring charges
(Notes 1 & 2) (7,546) -
--------- ----------
Selling, general and
administrative expenses
excluding restructuring
charges $ 662,568 $ 611,494 8.4%
========= ========== =========
Earnings from operations $ 53,539 $ 55,740
Restructuring charges
(Notes 1 & 2) 7,546 -
--------- ----------
Earnings from operations
excluding restructuring
charges $ 61,085 $ 55,740 9.6%
========= ========== =========
Americas Commercial selling,
general and administrative
expenses $ 262,530 $ 257,036
Americas restructuring
charge (Note 1) (1,511) -
--------- ----------
Americas Commercial selling,
general and administrative
expenses excluding the
Americas restructuring
charge $ 261,019 $ 257,036 1.5%
========= ========== =========
Americas Commercial Earnings
from operations $ 63,051 $ 73,321
Americas restructuring
charge (Note 1) 1,511 -
--------- ----------
Americas Commercial Earnings
excluding the Americas
restructuring charge $ 64,562 $ 73,321 (11.9%)
========= ========== =========
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES (continued)
(UNAUDITED)
(In thousands of dollars except per share data)
September Year to Date
-------------------------------
2007 2006 % Change
--------- ---------- ---------
Americas Earnings from operations $ 104,796 $ 116,326
Americas restructuring charge
(Note 1) 1,511 -
--------- ----------
Americas Earnings excluding the Americas
restructuring charge $ 106,307 $ 116,326 (8.6%)
========= ========== =========
International Commercial selling, general
and administrative expenses $ 199,111 $ 171,205
UK restructuring charge (Note 2) (6,035) -
--------- ----------
International Commercial selling,
general and administrative expenses
excluding the UK restructuring charge $ 193,076 $ 171,205 12.8%
========= ========== =========
International Commercial Earnings from
operations $ 4,406 $ 312
UK restructuring charge (Note 2) 6,035 -
--------- ----------
International Commercial Earnings
excluding the UK restructuring charge $ 10,441 $ 312 NM
========= ========== =========
International Earnings from operations $ 6,148 $ 702
UK restructuring charge (Note 2) 6,035 -
--------- ----------
International Earnings excluding the UK
restructuring charge $ 12,183 $ 702 NM
========= ========== =========
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 42 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.
Contact Information: ANALYST CONTACT: James Polehna (248) 244-4586 MEDIA CONTACT: Renee Walker (248) 244-4305