Exhibit 99.1
| KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||||||
| FOR THE 13 WEEKS ENDED JANUARY 1, 2017 AND 14 WEEKS ENDED JANUARY 3, 2016 | ||||||||||||||||
| (UNAUDITED) | ||||||||||||||||
| (In millions of dollars except per share data) | ||||||||||||||||
| % | CC % | |||||||||||||||
| 2016 | 2015 | Change | Change | Change | ||||||||||||
| Revenue from services | $ | 1,304.4 | $ | 1,461.6 | $ | (157.2 | ) | (10.8 | ) | % | (10.1 | ) | % | |||
| Cost of services | 1,076.4 | 1,212.1 | (135.7 | ) | (11.2 | ) | ||||||||||
| Gross profit | 228.0 | 249.5 | (21.5 | ) | (8.6 | ) | (8.1 | ) | ||||||||
| Selling, general and administrative expenses | 208.2 | 223.0 | (14.8 | ) | (6.7 | ) | (6.2 | ) | ||||||||
| Earnings from operations | 19.8 | 26.5 | (6.7 | ) | (25.2 | ) | ||||||||||
| Other income (expense), net | 0.7 | (0.7 | ) | 1.4 | 204.1 | |||||||||||
| Earnings before taxes and equity in net earnings (loss) of affiliate | 20.5 | 25.8 | (5.3 | ) | (20.8 | ) | ||||||||||
| Income tax expense (benefit) | 1.8 | (8.4 | ) | 10.2 | 121.4 | |||||||||||
| Net earnings before equity in net earnings (loss) of affiliate | 18.7 | 34.2 | (15.5 | ) | (45.4 | ) | ||||||||||
| Equity in net earnings (loss) of affiliate | 1.1 | — | 1.1 | NM | ||||||||||||
| Net earnings | $ | 19.8 | $ | 34.2 | $ | (14.4 | ) | (42.0 | ) | % | ||||||
| Basic earnings per share | $ | 0.51 | $ | 0.88 | $ | (0.37 | ) | (42.0 | ) | % | ||||||
| Diluted earnings per share | $ | 0.51 | $ | 0.88 | $ | (0.37 | ) | (42.0 | ) | % | ||||||
| STATISTICS: | ||||||||||||||||
| Gross profit rate | 17.5 | % | 17.1 | % | 0.4 | pts. | ||||||||||
| Selling, general and administrative expenses: | ||||||||||||||||
| % of revenue | 16.0 | 15.3 | 0.7 | |||||||||||||
| % of gross profit | 91.3 | 89.4 | 1.9 | |||||||||||||
| % Return: | ||||||||||||||||
| Earnings from operations | 1.5 | 1.8 | (0.3 | ) | ||||||||||||
| Earnings before taxes and equity in net earnings (loss) of affiliate | 1.6 | 1.8 | (0.2 | ) | ||||||||||||
| Net earnings | 1.5 | 2.3 | (0.8 | ) | ||||||||||||
| Effective income tax rate | 8.8 | % | (32.4 | ) | % | 41.2 | pts. | |||||||||
| Average number of shares outstanding (millions): | ||||||||||||||||
| Basic | 38.2 | 38.0 | ||||||||||||||
| Diluted | 38.6 | 38.0 | ||||||||||||||
| Shares adjusted for nonvested restricted awards (millions): | ||||||||||||||||
| Basic | 38.9 | 38.9 | ||||||||||||||
| Diluted | 39.2 | 38.9 | ||||||||||||||
1
| KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||||||
| FOR THE 52 WEEKS ENDED JANUARY 1, 2017 AND 53 WEEKS ENDED JANUARY 3, 2016 | ||||||||||||||||
| (UNAUDITED) | ||||||||||||||||
| (In millions of dollars except per share data) | ||||||||||||||||
| % | CC % | |||||||||||||||
| 2016 | 2015 | Change | Change | Change | ||||||||||||
| Revenue from services | $ | 5,276.8 | $ | 5,518.2 | $ | (241.4 | ) | (4.4 | ) | % | (3.2 | ) | % | |||
| Cost of services | 4,370.5 | 4,597.9 | (227.4 | ) | (4.9 | ) | ||||||||||
| Gross profit | 906.3 | 920.3 | (14.0 | ) | (1.5 | ) | (0.5 | ) | ||||||||
| Selling, general and administrative expenses | 843.1 | 853.6 | (10.5 | ) | (1.2 | ) | (0.3 | ) | ||||||||
| Earnings from operations | 63.2 | 66.7 | (3.5 | ) | (5.2 | ) | ||||||||||
| Gain on investment in TS Kelly Asia Pacific | 87.2 | — | 87.2 | NM | ||||||||||||
| Other expense, net | (0.7 | ) | (3.5 | ) | 2.8 | 80.6 | ||||||||||
| Earnings before taxes and equity in net earnings (loss) of affiliate | 149.7 | 63.2 | 86.5 | 136.8 | ||||||||||||
| Income tax expense (benefit) | 30.0 | 8.7 | 21.3 | 245.1 | ||||||||||||
| Net earnings before equity in net earnings (loss) of affiliate | 119.7 | 54.5 | 65.2 | 119.5 | ||||||||||||
| Equity in net earnings (loss) of affiliate | 1.1 | (0.7 | ) | 1.8 | 251.9 | |||||||||||
| Net earnings | $ | 120.8 | $ | 53.8 | $ | 67.0 | 124.5 | % | ||||||||
| Basic earnings per share | $ | 3.10 | $ | 1.39 | $ | 1.71 | 123.0 | % | ||||||||
| Diluted earnings per share | $ | 3.08 | $ | 1.39 | $ | 1.69 | 121.6 | % | ||||||||
| STATISTICS: | ||||||||||||||||
| Gross profit rate | 17.2 | % | 16.7 | % | 0.5 | pts. | ||||||||||
| Selling, general and administrative expenses: | ||||||||||||||||
| % of revenue | 16.0 | 15.5 | 0.5 | |||||||||||||
| % of gross profit | 93.0 | 92.8 | 0.2 | |||||||||||||
| % Return: | ||||||||||||||||
| Earnings from operations | 1.2 | 1.2 | — | |||||||||||||
| Earnings before taxes and equity in net earnings (loss) of affiliate | 2.8 | 1.1 | 1.7 | |||||||||||||
| Net earnings | 2.3 | 1.0 | 1.3 | |||||||||||||
| Effective income tax rate | 20.0 | % | 13.7 | % | 6.3 | pts. | ||||||||||
| Average number of shares outstanding (millions): | ||||||||||||||||
| Basic | 38.1 | 37.8 | ||||||||||||||
| Diluted | 38.4 | 37.9 | ||||||||||||||
| Shares adjusted for nonvested restricted awards (millions): | ||||||||||||||||
| Basic | 38.9 | 38.8 | ||||||||||||||
| Diluted | 39.2 | 38.9 | ||||||||||||||
2
| KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||
| RESULTS OF OPERATIONS BY SEGMENT | ||||||||||||||
| (UNAUDITED) | ||||||||||||||
| (In millions of dollars) | ||||||||||||||
| Fourth Quarter | ||||||||||||||
| 2016 | 2015 | % | CC % | |||||||||||
| (13 Wks) | (14 Wks) | Change | Change | |||||||||||
| AMERICAS | ||||||||||||||
| Commercial | ||||||||||||||
| Revenue from services | $ | 660.4 | $ | 696.1 | (5.1 | ) | % | (4.7 | ) | % | ||||
| Staffing fee-based income included in revenue from services | 3.3 | 3.7 | (11.6 | ) | (11.1 | ) | ||||||||
| Gross profit | 106.5 | 110.0 | (3.2 | ) | (2.8 | ) | ||||||||
| Gross profit rate | 16.1 | % | 15.8 | % | 0.3 | pts. | ||||||||
| PT | ||||||||||||||
| Revenue from services | $ | 228.8 | $ | 250.1 | (8.5 | ) | % | (8.5 | ) | % | ||||
| Staffing fee-based income included in revenue from services | 4.2 | 4.5 | (6.2 | ) | (6.3 | ) | ||||||||
| Gross profit | 38.4 | 43.0 | (10.6 | ) | (10.7 | ) | ||||||||
| Gross profit rate | 16.8 | % | 17.2 | % | (0.4 | ) | pts. | |||||||
| Total Americas | ||||||||||||||
| Revenue from services | $ | 889.2 | $ | 946.2 | (6.0 | ) | % | (5.7 | ) | % | ||||
| Staffing fee-based income included in revenue from services | 7.5 | 8.2 | (8.7 | ) | (8.5 | ) | ||||||||
| Gross profit | 144.9 | 153.0 | (5.3 | ) | (5.0 | ) | ||||||||
| Total SG&A expenses | 114.4 | 116.8 | (2.0 | ) | (2.1 | ) | ||||||||
| Earnings from operations | 30.5 | 36.2 | (15.7 | ) | ||||||||||
| Gross profit rate | 16.3 | % | 16.2 | % | 0.1 | pts. | ||||||||
| Expense rates: | ||||||||||||||
| % of revenue | 12.9 | 12.3 | 0.6 | |||||||||||
| % of gross profit | 79.0 | 76.3 | 2.7 | |||||||||||
| Return on sales | 3.4 | 3.8 | (0.4 | ) | ||||||||||
| EMEA | ||||||||||||||
| Commercial | ||||||||||||||
| Revenue from services | $ | 199.1 | $ | 200.5 | (0.7 | ) | % | 1.7 | % | |||||
| Staffing fee-based income included in revenue from services | 3.1 | 3.3 | (6.3 | ) | (5.2 | ) | ||||||||
| Gross profit | 26.4 | 27.5 | (4.0 | ) | (2.3 | ) | ||||||||
| Gross profit rate | 13.3 | % | 13.7 | % | (0.4 | ) | pts. | |||||||
| PT | ||||||||||||||
| Revenue from services | $ | 42.4 | $ | 44.7 | (5.3 | ) | % | (3.2 | ) | % | ||||
| Staffing fee-based income included in revenue from services | 2.4 | 2.4 | 1.9 | 3.6 | ||||||||||
| Gross profit | 8.6 | 9.4 | (8.7 | ) | (7.1 | ) | ||||||||
| Gross profit rate | 20.2 | % | 21.0 | % | (0.8 | ) | pts. | |||||||
| Total EMEA | ||||||||||||||
| Revenue from services | $ | 241.5 | $ | 245.2 | (1.5 | ) | % | 0.8 | % | |||||
| Staffing fee-based income included in revenue from services | 5.5 | 5.7 | (2.9 | ) | (1.6 | ) | ||||||||
| Gross profit | 35.0 | 36.9 | (5.2 | ) | (3.5 | ) | ||||||||
| Total SG&A expenses | 30.8 | 29.7 | 3.5 | 6.0 | ||||||||||
| Earnings from operations | 4.2 | 7.2 | (41.2 | ) | ||||||||||
| Gross profit rate | 14.5 | % | 15.0 | % | (0.5 | ) | pts. | |||||||
| Expense rates: | ||||||||||||||
| % of revenue | 12.7 | 12.1 | 0.6 | |||||||||||
| % of gross profit | 88.0 | 80.6 | 7.4 | |||||||||||
| Return on sales | 1.7 | 2.9 | (1.2 | ) | ||||||||||
3
| KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||
| RESULTS OF OPERATIONS BY SEGMENT | ||||||||||||||
| (UNAUDITED) | ||||||||||||||
| (In millions of dollars) | ||||||||||||||
| Fourth Quarter | ||||||||||||||
| 2016 | 2015 | % | CC % | |||||||||||
| (13 Wks) | (14 Wks) | Change | Change | |||||||||||
| OCG | ||||||||||||||
| Revenue from services | $ | 186.1 | $ | 187.5 | (0.7 | ) | % | (0.4 | ) | % | ||||
| Gross profit | 49.2 | 48.0 | 2.4 | 2.9 | ||||||||||
| Total SG&A expenses | 41.2 | 34.0 | 21.3 | 22.3 | ||||||||||
| Earnings from operations | 8.0 | 14.0 | (43.3 | ) | ||||||||||
| Gross profit rate | 26.4 | % | 25.6 | % | 0.8 | pts. | ||||||||
| Expense rates: | ||||||||||||||
| % of revenue | 22.1 | 18.1 | 4.0 | |||||||||||
| % of gross profit | 83.8 | 70.7 | 13.1 | |||||||||||
| Return on sales | 4.3 | 7.5 | (3.2 | ) | ||||||||||
4
| KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||
| RESULTS OF OPERATIONS BY SEGMENT | ||||||||||||||
| (UNAUDITED) | ||||||||||||||
| (In millions of dollars) | ||||||||||||||
| December Year to Date | ||||||||||||||
| 2016 | 2015 | % | CC % | |||||||||||
| (52 Wks) | (53 Wks) | Change | Change | |||||||||||
| AMERICAS | ||||||||||||||
| Commercial | ||||||||||||||
| Revenue from services | $ | 2,548.0 | $ | 2,604.3 | (2.2 | ) | % | (1.1 | ) | % | ||||
| Staffing fee-based income included in revenue from services | 14.7 | 14.5 | 1.1 | 1.7 | ||||||||||
| Gross profit | 402.4 | 400.3 | 0.5 | 1.3 | ||||||||||
| Gross profit rate | 15.8 | % | 15.4 | % | 0.4 | pts. | ||||||||
| PT | ||||||||||||||
| Revenue from services | $ | 947.1 | $ | 971.9 | (2.6 | ) | % | (2.5 | ) | % | ||||
| Staffing fee-based income included in revenue from services | 17.9 | 17.6 | 1.7 | 2.3 | ||||||||||
| Gross profit | 162.7 | 165.0 | (1.4 | ) | (1.3 | ) | ||||||||
| Gross profit rate | 17.2 | % | 17.0 | % | 0.2 | pts. | ||||||||
| Total Americas | ||||||||||||||
| Revenue from services | $ | 3,495.1 | $ | 3,576.2 | (2.3 | ) | % | (1.5 | ) | % | ||||
| Staffing fee-based income included in revenue from services | 32.6 | 32.1 | 1.4 | 2.0 | ||||||||||
| Gross profit | 565.1 | 565.3 | — | 0.6 | ||||||||||
| SG&A expenses excluding restructuring charges | 454.9 | 456.6 | (0.4 | ) | 0.1 | |||||||||
| Restructuring charges | 2.2 | — | NM | |||||||||||
| Total SG&A expenses | 457.1 | 456.6 | 0.1 | 0.6 | ||||||||||
| Earnings from operations | 108.0 | 108.7 | (0.6 | ) | ||||||||||
| Earnings from operations excluding restructuring charges | 110.2 | 108.7 | 1.4 | |||||||||||
| Gross profit rate | 16.2 | % | 15.8 | % | 0.4 | pts. | ||||||||
| Expense rates (excluding restructuring charges): | ||||||||||||||
| % of revenue | 13.0 | 12.8 | 0.2 | |||||||||||
| % of gross profit | 80.5 | 80.8 | (0.3 | ) | ||||||||||
| Return on sales (excluding restructuring charges) | 3.2 | 3.0 | 0.2 | |||||||||||
| EMEA | ||||||||||||||
| Commercial | ||||||||||||||
| Revenue from services | $ | 769.3 | $ | 773.5 | (0.5 | ) | % | 2.1 | % | |||||
| Staffing fee-based income included in revenue from services | 13.5 | 13.2 | 2.9 | 6.1 | ||||||||||
| Gross profit | 103.9 | 106.6 | (2.6 | ) | (0.4 | ) | ||||||||
| Gross profit rate | 13.5 | % | 13.8 | % | (0.3 | ) | pts. | |||||||
| PT | ||||||||||||||
| Revenue from services | $ | 168.8 | $ | 171.5 | (1.6 | ) | % | 0.7 | % | |||||
| Staffing fee-based income included in revenue from services | 9.7 | 10.1 | (4.0 | ) | (0.8 | ) | ||||||||
| Gross profit | 34.2 | 36.6 | (6.4 | ) | (4.2 | ) | ||||||||
| Gross profit rate | 20.3 | % | 21.3 | % | (1.0 | ) | pts. | |||||||
| Total EMEA | ||||||||||||||
| Revenue from services | $ | 938.1 | $ | 945.0 | (0.7 | ) | % | 1.9 | % | |||||
| Staffing fee-based income included in revenue from services | 23.2 | 23.3 | (0.1 | ) | 3.1 | |||||||||
| Gross profit | 138.1 | 143.2 | (3.5 | ) | (1.4 | ) | ||||||||
| SG&A expenses excluding restructuring charges | 123.7 | 129.2 | (4.2 | ) | (1.6 | ) | ||||||||
| Restructuring charges | 1.2 | — | NM | |||||||||||
| Total SG&A expenses | 124.9 | 129.2 | (3.3 | ) | (0.7 | ) | ||||||||
| Earnings from operations | 13.2 | 14.0 | (5.9 | ) | ||||||||||
| Earnings from operations excluding restructuring charges | 14.4 | 14.0 | 2.1 | |||||||||||
| Gross profit rate | 14.7 | % | 15.2 | % | (0.5 | ) | pts. | |||||||
| Expense rates (excluding restructuring charges): | ||||||||||||||
| % of revenue | 13.2 | 13.7 | (0.5 | ) | ||||||||||
| % of gross profit | 89.6 | 90.2 | (0.6 | ) | ||||||||||
| Return on sales (excluding restructuring charges) | 1.5 | 1.5 | — | |||||||||||
5
| KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||
| RESULTS OF OPERATIONS BY SEGMENT | ||||||||||||||
| (UNAUDITED) | ||||||||||||||
| (In millions of dollars) | ||||||||||||||
| December Year to Date | ||||||||||||||
| 2016 | 2015 | % | CC % | |||||||||||
| (52 Wks) | (53 Wks) | Change | Change | |||||||||||
| OCG | ||||||||||||||
| Revenue from services | $ | 706.4 | $ | 673.8 | 4.8 | % | 5.3 | % | ||||||
| Gross profit | 179.3 | 160.6 | 11.6 | 12.3 | ||||||||||
| Total SG&A expenses | 153.4 | 132.1 | 16.2 | 17.1 | ||||||||||
| Earnings from operations | 25.9 | 28.5 | (9.7 | ) | ||||||||||
| Gross profit rate | 25.4 | % | 23.8 | % | 1.6 | pts. | ||||||||
| Expense rates: | ||||||||||||||
| % of revenue | 21.7 | 19.6 | 2.1 | |||||||||||
| % of gross profit | 85.6 | 82.2 | 3.4 | |||||||||||
| Return on sales | 3.7 | 4.2 | (0.5 | ) | ||||||||||
6
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| (UNAUDITED) | |||||||
| (In millions of dollars) | |||||||
| Jan. 1, 2017 | Jan. 3, 2016 | ||||||
| Current Assets | |||||||
| Cash and equivalents | $ | 29.6 | $ | 42.2 | |||
| Trade accounts receivable, less allowances of | |||||||
| $12.5 and $10.5, respectively | 1,138.3 | 1,139.1 | |||||
| Prepaid expenses and other current assets | 46.7 | 45.8 | |||||
| Total current assets | 1,214.6 | 1,227.1 | |||||
| Noncurrent Assets | |||||||
| Property and equipment, net | 80.8 | 88.9 | |||||
| Deferred taxes | 180.1 | 189.3 | |||||
| Goodwill, net | 88.4 | 90.3 | |||||
| Investment in equity affiliate | 114.8 | 9.4 | |||||
| Other assets | 349.4 | 334.6 | |||||
| Total noncurrent assets | 813.5 | 712.5 | |||||
| Total Assets | $ | 2,028.1 | $ | 1,939.6 | |||
| Current Liabilities | |||||||
| Short-term borrowings | $ | — | $ | 55.5 | |||
| Accounts payable and accrued liabilities | 455.1 | 405.5 | |||||
| Accrued payroll and related taxes | 241.5 | 268.1 | |||||
| Accrued insurance | 23.4 | 26.7 | |||||
| Income and other taxes | 51.1 | 60.0 | |||||
| Total current liabilities | 771.1 | 815.8 | |||||
| Noncurrent Liabilities | |||||||
| Accrued insurance | 45.5 | 40.0 | |||||
| Accrued retirement benefits | 157.4 | 141.0 | |||||
| Other long-term liabilities | 42.1 | 47.4 | |||||
| Total noncurrent liabilities | 245.0 | 228.4 | |||||
| Stockholders' Equity | |||||||
| Common stock | 40.1 | 40.1 | |||||
| Treasury stock | (39.0 | ) | (44.3 | ) | |||
| Paid-in capital | 28.6 | 25.4 | |||||
| Earnings invested in the business | 923.6 | 813.5 | |||||
| Accumulated other comprehensive income | 58.7 | 60.7 | |||||
| Total stockholders' equity | 1,012.0 | 895.4 | |||||
| Total Liabilities and Stockholders' Equity | $ | 2,028.1 | $ | 1,939.6 | |||
| STATISTICS: | |||||||
| Working Capital | $ | 443.5 | $ | 411.3 | |||
| Current Ratio | 1.6 | 1.5 | |||||
| Debt-to-capital % | — | % | 5.8 | % | |||
| Global Days Sales Outstanding | 53 | 54 | |||||
7
| KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
| FOR THE 52 WEEKS ENDED JANUARY 1, 2017 AND 53 WEEKS ENDED JANUARY 3, 2016 | ||||||
| (UNAUDITED) | ||||||
| (In millions of dollars) | ||||||
| 2016 | 2015 | |||||
| Cash flows from operating activities: | ||||||
| Net earnings | $ | 120.8 | $ | 53.8 | ||
| Noncash adjustments: | ||||||
| Depreciation and amortization | 21.3 | 22.3 | ||||
| Provision for bad debts | 11.0 | 3.7 | ||||
| Stock-based compensation | 8.0 | 6.1 | ||||
| Gain on investment in TS Kelly Asia Pacific equity affiliate | (87.2 | ) | — | |||
| Other, net | (3.9 | ) | (4.7 | ) | ||
| Changes in operating assets and liabilities | (32.6 | ) | (57.7 | ) | ||
| Net cash from operating activities | 37.4 | 23.5 | ||||
| Cash flows from investing activities: | ||||||
| Capital expenditures | (12.7 | ) | (16.9 | ) | ||
| Net cash proceeds from investment in TS Kelly Asia Pacific equity affiliate | 23.3 | — | ||||
| Investment in TS Kelly equity affiliate | — | (0.5 | ) | |||
| Other investing activities | (0.3 | ) | (0.2 | ) | ||
| Net cash from (used in) investing activities | 10.3 | (17.6 | ) | |||
| Cash flows from financing activities: | ||||||
| Net change in short-term borrowings | (55.9 | ) | (34.7 | ) | ||
| Dividend payments | (10.7 | ) | (7.7 | ) | ||
| Other financing activities | (0.3 | ) | 0.2 | |||
| Net cash used in financing activities | (66.9 | ) | (42.2 | ) | ||
| Effect of exchange rates on cash and equivalents | 6.6 | (4.6 | ) | |||
| Net change in cash and equivalents | (12.6 | ) | (40.9 | ) | ||
| Cash and equivalents at beginning of period | 42.2 | 83.1 | ||||
| Cash and equivalents at end of period | $ | 29.6 | $ | 42.2 | ||
8
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||
| REVENUE FROM SERVICES | |||||||||||||
| (UNAUDITED) | |||||||||||||
| (In millions of dollars) | |||||||||||||
| Fourth Quarter (Commercial, PT and OCG) | |||||||||||||
| 2016 | 2015 | % | CC % | ||||||||||
| (13 Wks) | (14 Wks) | Change | Change | ||||||||||
| Americas | |||||||||||||
| United States | $ | 956.7 | $ | 998.8 | (4.2 | ) | % | (4.2 | ) | % | |||
| Canada | 34.5 | 38.0 | (9.3 | ) | (9.7 | ) | |||||||
| Mexico | 28.0 | 35.3 | (20.6 | ) | (6.1 | ) | |||||||
| Puerto Rico | 18.3 | 24.7 | (25.8 | ) | (25.8 | ) | |||||||
| Brazil | 13.3 | 8.7 | 52.2 | 29.4 | |||||||||
| Total Americas | 1,050.8 | 1,105.5 | (5.0 | ) | (4.7 | ) | |||||||
| EMEA | |||||||||||||
| France | 61.1 | 65.6 | (6.8 | ) | (5.2 | ) | |||||||
| Switzerland | 54.3 | 55.5 | (2.1 | ) | (1.0 | ) | |||||||
| Portugal | 40.3 | 33.8 | 19.0 | 21.1 | |||||||||
| Russia | 20.9 | 18.2 | 15.3 | 10.1 | |||||||||
| United Kingdom | 18.5 | 26.7 | (31.0 | ) | (15.7 | ) | |||||||
| Germany | 14.3 | 16.2 | (11.5 | ) | (10.0 | ) | |||||||
| Italy | 14.2 | 14.5 | (2.1 | ) | (0.4 | ) | |||||||
| Norway | 8.0 | 9.7 | (17.4 | ) | (18.7 | ) | |||||||
| Other | 18.0 | 13.0 | 38.4 | 40.5 | |||||||||
| Total EMEA | 249.6 | 253.2 | (1.4 | ) | 1.0 | ||||||||
| APAC | |||||||||||||
| Australia | 3.2 | 31.1 | (89.7 | ) | (90.1 | ) | |||||||
| Singapore | 0.2 | 33.0 | (99.5 | ) | (99.5 | ) | |||||||
| Malaysia | 0.1 | 14.1 | (98.6 | ) | (98.6 | ) | |||||||
| New Zealand | — | 11.2 | (99.5 | ) | (99.6 | ) | |||||||
| Other | 0.5 | 13.5 | (96.6 | ) | (96.5 | ) | |||||||
| Total APAC | 4.0 | 102.9 | (96.0 | ) | (96.1 | ) | |||||||
| Total Kelly Services, Inc. | $ | 1,304.4 | $ | 1,461.6 | (10.8 | ) | % | (10.1 | ) | % | |||
9
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||
| REVENUE FROM SERVICES | |||||||||||||
| (UNAUDITED) | |||||||||||||
| (In millions of dollars) | |||||||||||||
| December Year to Date (Commercial, PT and OCG) | |||||||||||||
| 2016 | 2015 | % | CC % | ||||||||||
| (52 Wks) | (53 Wks) | Change | Change | ||||||||||
| Americas | |||||||||||||
| United States | $ | 3,722.5 | $ | 3,705.2 | 0.5 | % | 0.5 | % | |||||
| Canada | 139.7 | 160.2 | (12.8 | ) | (9.9 | ) | |||||||
| Mexico | 107.6 | 130.5 | (17.6 | ) | (2.8 | ) | |||||||
| Puerto Rico | 84.2 | 99.9 | (15.7 | ) | (15.7 | ) | |||||||
| Brazil | 46.8 | 42.9 | 9.1 | 19.3 | |||||||||
| Total Americas | 4,100.8 | 4,138.7 | (0.9 | ) | (0.2 | ) | |||||||
| EMEA | |||||||||||||
| France | 239.7 | 246.0 | (2.5 | ) | (2.1 | ) | |||||||
| Switzerland | 210.5 | 216.2 | (2.6 | ) | (0.3 | ) | |||||||
| Portugal | 151.9 | 132.5 | 14.6 | 15.0 | |||||||||
| United Kingdom | 84.7 | 105.1 | (19.5 | ) | (9.3 | ) | |||||||
| Russia | 69.9 | 75.6 | (7.6 | ) | 0.7 | ||||||||
| Germany | 59.6 | 59.3 | 0.5 | 0.9 | |||||||||
| Italy | 56.3 | 54.0 | 4.2 | 4.5 | |||||||||
| Norway | 32.4 | 39.2 | (17.2 | ) | (13.5 | ) | |||||||
| Other | 63.9 | 45.8 | 39.4 | 40.2 | |||||||||
| Total EMEA | 968.9 | 973.7 | (0.5 | ) | 2.1 | ||||||||
| APAC | |||||||||||||
| Australia | 67.4 | 123.2 | (45.3 | ) | (42.3 | ) | |||||||
| Singapore | 65.1 | 129.9 | (49.9 | ) | (48.8 | ) | |||||||
| Malaysia | 27.9 | 59.5 | (53.1 | ) | (47.3 | ) | |||||||
| New Zealand | 19.3 | 41.4 | (53.3 | ) | (48.8 | ) | |||||||
| Other | 27.4 | 51.8 | (46.9 | ) | (43.4 | ) | |||||||
| Total APAC | 207.1 | 405.8 | (48.9 | ) | (45.9 | ) | |||||||
| Total Kelly Services, Inc. | $ | 5,276.8 | $ | 5,518.2 | (4.4 | ) | % | (3.2 | ) | % | |||
10
| KELLY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||
| RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||
| FOR THE 13 WEEKS ENDED JANUARY 1, 2017 AND 14 WEEKS ENDED JANUARY 3, 2016 | |||||||||||||
| (UNAUDITED) | |||||||||||||
| (In millions of dollars except per share data) | |||||||||||||
| 2016 | 2015 | ||||||||||||
| As Reported | Adjusted Earnings | % Change | CC % Change | ||||||||||
| Revenue from services | $ | 1,304.4 | $ | 1,362.6 | (4.3 | ) | % | (3.6 | ) | % | |||
| Cost of services | 1,076.4 | 1,126.6 | (4.5 | ) | |||||||||
| Gross profit | 228.0 | 236.0 | (3.4 | ) | (2.9 | ) | |||||||
| SG&A expenses | 208.2 | 211.3 | (1.5 | ) | (1.0 | ) | |||||||
| Earnings from operations | 19.8 | 24.7 | (19.6 | ) | |||||||||
| Other income (expense), net | 0.7 | (0.6 | ) | 226.9 | |||||||||
| Earnings before taxes and equity in net earnings (loss) of affiliate | 20.5 | 24.1 | (15.1 | ) | |||||||||
| Inc. tax expense (benefit)* | 1.8 | (8.7 | ) | 120.6 | |||||||||
| Net earnings before equity in net earnings (loss) of affiliate | 18.7 | 32.8 | (43.1 | ) | |||||||||
| Equity in net earnings (loss) of affiliate | 1.1 | — | NM | ||||||||||
| Net earnings | $ | 19.8 | $ | 32.8 | (39.6 | ) | % | ||||||
| Earnings per share: | |||||||||||||
| Basic | $ | 0.51 | $ | 0.84 | (39.3 | ) | % | ||||||
| Diluted | $ | 0.51 | $ | 0.84 | (39.3 | ) | % | ||||||
| * Income tax benefit for the fourth quarter of 2015 includes $13.9 million related to the retroactive reinstatement of work opportunity credits for the entire year. | |||||||||||||
11
| KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||
| RECONCILIATION OF NON-GAAP MEASURES | ||||||||||
| FOR THE 13 WEEKS ENDED JANUARY 1, 2017 AND 14 WEEKS ENDED JANUARY 3, 2016 | ||||||||||
| (UNAUDITED) | ||||||||||
| (In millions of dollars except per share data) | ||||||||||
| 2015 | ||||||||||
| As Reported | Disposal of APAC Businesses (Note 2) | Adjusted Earnings | ||||||||
| Revenue from services | $ | 1,461.6 | $ | (99.0 | ) | $ | 1,362.6 | |||
| Cost of services | 1,212.1 | (85.5 | ) | 1,126.6 | ||||||
| Gross profit | 249.5 | (13.5 | ) | 236.0 | ||||||
| SG&A expenses | 223.0 | (11.7 | ) | 211.3 | ||||||
| Earnings from operations | 26.5 | (1.8 | ) | 24.7 | ||||||
| Other (expense) income, net | (0.7 | ) | 0.1 | (0.6 | ) | |||||
| Earnings before taxes and equity in net earnings (loss) of affiliate | 25.8 | (1.7 | ) | 24.1 | ||||||
| Inc. tax expense (benefit) | (8.4 | ) | (0.3 | ) | (8.7 | ) | ||||
| Net earnings before equity in net earnings (loss) of affiliate | 34.2 | (1.4 | ) | 32.8 | ||||||
| Equity in net earnings (loss) of affiliate | — | — | — | |||||||
| Net earnings | $ | 34.2 | $ | (1.4 | ) | $ | 32.8 | |||
| Earnings per share: | ||||||||||
| Basic | $ | 0.88 | $ | (0.04 | ) | $ | 0.84 | |||
| Diluted | $ | 0.88 | $ | (0.04 | ) | $ | 0.84 | |||
| 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. | ||||||||||
12
| KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||||||||||
| RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||||||||||||
| FOR THE 52 WEEKS ENDED JANUARY 1, 2017 AND 53 WEEKS ENDED JANUARY 3, 2016 | ||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||
| (In millions of dollars except per share data) | ||||||||||||||||||||||
| 2016 | 2015 | |||||||||||||||||||||
| As Reported | Gain on Investment in Equity Affiliate (Note 1) | Restructuring Charges (Note 3) | Adjusted Earnings | Adjusted Earnings | % Change | CC % Change | ||||||||||||||||
| Revenue from services | $ | 5,276.8 | $ | — | $ | — | $ | 5,276.8 | $ | 5,325.2 | (0.9 | ) | % | 0.3 | % | |||||||
| Cost of services | 4,370.5 | — | — | 4,370.5 | 4,432.2 | (1.4 | ) | |||||||||||||||
| Gross profit | 906.3 | — | — | 906.3 | 893.0 | 1.5 | 2.5 | |||||||||||||||
| SG&A expenses | 843.1 | — | (3.4 | ) | 839.7 | 830.2 | 1.1 | 2.5 | ||||||||||||||
| Earnings from operations | 63.2 | — | 3.4 | 66.6 | 62.8 | 6.2 | ||||||||||||||||
| Gain on investment in TS Kelly Asia Pacific | 87.2 | (87.2 | ) | — | — | — | NM | |||||||||||||||
| Other expense, net | (0.7 | ) | — | — | (0.7 | ) | (3.3 | ) | 79.4 | |||||||||||||
| Earnings before taxes and equity in net earnings (loss) of affiliate | 149.7 | (87.2 | ) | 3.4 | 65.9 | 59.5 | 10.9 | |||||||||||||||
| Inc. tax expense (benefit) | 30.0 | (23.5 | ) | 1.2 | 7.7 | 8.0 | (3.6 | ) | ||||||||||||||
| Net earnings before equity in net earnings (loss) of affiliate | 119.7 | (63.7 | ) | 2.2 | 58.2 | 51.5 | 13.1 | |||||||||||||||
| Equity in net earnings (loss) of affiliate | 1.1 | — | — | 1.1 | (0.7 | ) | NM | |||||||||||||||
| Net earnings | $ | 120.8 | $ | (63.7 | ) | $ | 2.2 | $ | 59.3 | $ | 50.8 | 16.9 | % | |||||||||
| Earnings per share: | ||||||||||||||||||||||
| Basic | $ | 3.10 | $ | (1.64 | ) | $ | 0.06 | $ | 1.53 | $ | 1.31 | 16.8 | % | |||||||||
| Diluted | $ | 3.08 | $ | (1.62 | ) | $ | 0.06 | $ | 1.52 | $ | 1.31 | 16.0 | % | |||||||||
| 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. | ||||||||||||||||||||||
13
| KELLY SERVICES, INC. AND SUBSIDIARIES | ||||||||||
| RECONCILIATION OF NON-GAAP MEASURES | ||||||||||
| FOR THE 52 WEEKS ENDED JANUARY 1, 2017 AND 53 WEEKS ENDED JANUARY 3, 2016 | ||||||||||
| (UNAUDITED) | ||||||||||
| (In millions of dollars except per share data) | ||||||||||
| 2015 | ||||||||||
| As Reported | Disposal of APAC Businesses (Note 2) | Adjusted Earnings | ||||||||
| Revenue from services | $ | 5,518.2 | $ | (193.0 | ) | $ | 5,325.2 | |||
| Cost of services | 4,597.9 | (165.7 | ) | 4,432.2 | ||||||
| Gross profit | 920.3 | (27.3 | ) | 893.0 | ||||||
| SG&A expenses | 853.6 | (23.4 | ) | 830.2 | ||||||
| Earnings from operations | 66.7 | (3.9 | ) | 62.8 | ||||||
| Other (expense) income, net | (3.5 | ) | 0.2 | (3.3 | ) | |||||
| Earnings from operations before taxes and equity in net earnings (loss) of affiliate | 63.2 | (3.7 | ) | 59.5 | ||||||
| Inc. tax expense (benefit) | 8.7 | (0.7 | ) | 8.0 | ||||||
| Net earnings before equity in net earnings (loss) of affiliate | 54.5 | (3.0 | ) | 51.5 | ||||||
| Equity in net earnings (loss) of affiliate | (0.7 | ) | — | (0.7 | ) | |||||
| Net earnings | $ | 53.8 | $ | (3.0 | ) | $ | 50.8 | |||
| Earnings per share: | ||||||||||
| Basic | $ | 1.39 | $ | (0.08 | ) | $ | 1.31 | |||
| Diluted | $ | 1.39 | $ | (0.08 | ) | $ | 1.31 | |||
| 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. | ||||||||||
14
KELLY SERIVCES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the 2016 gain on investment in equity affiliate, 2016 restructuring charges and disposal of APAC businesses is useful to understand the Company's 2016 financial performance and increases comparability. Specifically, Management believes that removing the impact of these items allows for a more meaningful comparison of current period operating performance with the operating results of prior periods. These non-GAAP measures may have limitations as analytical tools because they exclude items which can have a material impact on cash flow and earnings per share. As a result, Management considers these measures, along with reported results, when it reviews and evaluates the Company's financial performance. Management believes that these measures provide greater transparency to investors and provide insight into how Management is evaluating the Company's financial performance. Non-GAAP measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
(1) Gain on investment in equity affiliate represents the difference between the fair value and book value of amounts contributed by the Company to the investment in TS Kelly Asia Pacific.
(2) Disposal of APAC businesses represents the 2015 operational results of business contributed to TS Kelly Asia Pacific in the third quarter of 2016.
(3) Restructuring charges in 2016 include costs related to actions during the second quarter in the Americas and EMEA designed to increase operational efficiency and align our staffing operations with opportunities for growth within their markets. The 2016 year-to-date income tax expense (benefit) was impacted by a $0.3 million benefit for the release of a valuation allowance in Italy in the fourth quarter of 2016.
15