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Kelly Services Reports 2nd Quarter 2009 Results
Wednesday, August 05, 2009 7:51 AM


(Source: MARKETWIRE)trackingKelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a world leader in workforce management services and human resources solutions, today announced results for the second quarter of 2009.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the second quarter of 2009 totaled $1.0 billion, a 29% decrease compared to the corresponding quarter in 2008. On a constant currency basis, revenue decreased by 24%.

Losses from operations for the second quarter of 2009 totaled $74.5 million, compared to earnings from operations of $15.0 million reported for the second quarter of 2008. Included in the results from operations for the second quarter 2009 are impairment charges totaling $52.6 million and $2.4 million of restructuring costs relating to the Company's UK operations. Excluding the impairment and restructuring charges, the loss from operations was $19.5 million for the second quarter of 2009.

Diluted losses per share from continuing operations in the second quarter of 2009 were $1.89, compared to second quarter 2008 earnings of $0.30 per share. The impairment charges totaled $1.41 per share and the UK restructuring charge totaled $0.07 per share in the second quarter of 2009.

The second quarter impairment charges include adjustments to the value of goodwill for the Company's Americas Commercial, EMEA PT and APAC Commercial segments and the long-lived assets related to operations in Japan. The UK restructuring charge is part of a plan to further consolidate and close branches in the UK during 2009.

Commenting on the second quarter results, Camden said the Company's loss reflects the continued weakened state of labor markets throughout the world.

"In this challenging environment, we remain focused on expense control, where our efforts have had a significant impact on our overall performance. Going forward, we will seek out additional opportunities to simplify our business structure and operate more efficiently.

"While having the potential to yield immediate results, these actions will also serve to strengthen Kelly, provide impetus when the economy improves, and position us for long-term success," said Camden.

In conjunction with its second quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on August 5, to review the results and answer questions. The call may be accessed in one of the following ways:

Via the Telephone:

 U.S.                    1 800 553-0327 International           1 651 291-5254 

The pass code is Kelly Services

Via the Internet:

The call is also available via the internet through the Kelly Services website: 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 forward looking statements contained herein.

A reconciliation of certain non-GAAP financial measures discussed in this release is included in the attached financial information schedules.

About Kelly Services

Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB) is a world leader in workforce management services and human resources solutions headquartered in Troy, Michigan, offering temporary staffing services, outsourcing, vendor on-site and full-time placement to clients on a global basis. Kelly provides employment to nearly 650,000 employees annually, with skills including office services, accounting, engineering, information technology, law, science, marketing, creative services, light industrial, education, and health care. Revenue in 2008 was $5.5 billion. Visit www.kellyservices.com.

                   KELLY SERVICES, INC. AND SUBSIDIARIES                     CONSOLIDATED STATEMENTS OF EARNINGS           FOR THE 13 WEEKS ENDED JUNE 28, 2009 AND JUNE 29, 2008                                 (UNAUDITED)               (In millions of dollars except per share data)                               2009       2008      Change        % Change                             ---------  ---------  ---------      -------- Revenue from services       $ 1,028.9  $ 1,452.0  $  (423.1)        (29.1)% Cost of services                857.2    1,194.6     (337.4)        (28.2)                             ---------  ---------  ---------      -------- Gross profit                    171.7      257.4      (85.7)        (33.3) Selling, general and  administrative expenses        193.6      242.4      (48.8)        (20.2) Asset impairments                52.6          -       52.6            NM                             ---------  ---------  ---------      -------- (Loss) earnings from  operations                     (74.5)      15.0      (89.5)           NM Other (expense) income, net      (1.0)       0.1       (1.1)           NM                             ---------  ---------  ---------      -------- (Loss) earnings from  continuing operations  before taxes                   (75.5)      15.1      (90.6)           NM Income taxes                     (9.5)       4.7      (14.2)       (302.4)                             ---------  ---------  ---------      -------- (Loss) earnings from  continuing operations          (66.0)      10.4      (76.4)           NM Earnings from discontinued  operations, net of tax             -        0.1       (0.1)       (100.0)                             ---------  ---------  ---------      -------- Net (loss) earnings         $   (66.0) $    10.5  $   (76.5)           NM%                             =========  =========  =========      ======== Basic (loss) earnings per  share on common stock   (Loss) earnings from    continuing operations    $   (1.89) $    0.30  $   (2.19)           NM%   Earnings from discontinued    operations                       -          -          -            NM   Net (loss) earnings           (1.89)      0.30      (2.19)           NM Diluted (loss) earnings per  share on common stock   (Loss) earnings from    continuing operations    $   (1.89) $    0.30  $   (2.19)           NM%   Earnings from discontinued    operations                       -          -          -            NM   Net (loss) earnings           (1.89)      0.30      (2.19)           NM                             ---------  ---------  ---------      -------- STATISTICS: Gross profit rate                16.7%      17.7%      (1.0) pts. Selling, general and  administrative expenses:     % of revenue                 18.8       16.7        2.1     % of gross profit           112.7       94.2       18.5 % Return -  (Loss) earnings  from operations                 (7.2)       1.0       (8.2)       (Loss) earnings from        continuing operations        before taxes              (7.3)       1.0       (8.3)       (Loss) earnings from        continuing operations     (6.4)       0.7       (7.1)       Net (loss) earnings        (6.4)       0.7       (7.1) Effective income tax rate        12.5%      30.9%     (18.4) pts.                   KELLY SERVICES, INC. AND SUBSIDIARIES                     CONSOLIDATED STATEMENTS OF EARNINGS           FOR THE 26 WEEKS ENDED JUNE 28, 2009 AND JUNE 29, 2008                                 (UNAUDITED)               (In millions of dollars except per share data)                              2009       2008       Change        % Change                            ---------  ---------- ---------       -------- Revenue from services      $ 2,071.5  $  2,840.4 $  (768.9)         (27.1)% Cost of services             1,724.3     2,333.1    (608.8)         (26.1)                            ---------  ---------- ---------       -------- Gross profit                   347.2       507.3    (160.1)         (31.6) Selling, general and  administrative expenses       399.7       479.4     (79.7)         (16.6) Asset impairments               52.6           -      52.6             NM                            ---------  ---------- ---------       -------- (Loss) earnings from  operations                   (105.1)       27.9    (133.0)        (476.6) Other income, net                0.3         0.1       0.2          237.8                            ---------  ---------- ---------       -------- (Loss) earnings from  continuing operations  before taxes                 (104.8)       28.0    (132.8)        (474.1) Income taxes                   (22.7)        9.6     (32.3)        (337.0)                            ---------  ---------- ---------       -------- (Loss) earnings from  continuing operations         (82.1)       18.4    (100.5)            NM Earnings from discontinued  operations, net of tax          0.6         0.3       0.3           80.6                            ---------  ---------- ---------       -------- Net (loss) earnings        $   (81.5) $     18.7 $  (100.2)            NM%                            =========  ========== =========       ======== Basic (loss) earnings per  share on common stock   (Loss) earnings from    continuing operations   $   (2.36) $     0.52 $   (2.88)            NM%   Earnings from    discontinued operations      0.02        0.01      0.01          100.0   Net (loss) earnings          (2.34)       0.53     (2.87)            NM Diluted (loss) earnings  per share on common stock   (Loss) earnings from    continuing operations   $   (2.36) $     0.52 $   (2.88)            NM%   Earnings from    discontinued operations      0.02        0.01      0.01          100.0   Net (loss) earnings          (2.34)       0.53     (2.87)            NM                            ---------  ---------- ---------       -------- STATISTICS: Gross profit rate               16.8%       17.9      (1.1) pts. Selling, general and  administrative expenses:     % of revenue                19.3        16.9       2.4     % of gross profit          115.1        94.5      20.6 % Return -  (Loss)  earnings from operations       (5.1)        1.0      (6.1)       (Loss) earnings from        continuing operations        before taxes             (5.1)        1.0      (6.1)       (Loss) earnings from        continuing operations    (4.0)        0.6      (4.6)       Net (loss) earnings       (3.9)        0.7      (4.6) Effective income tax rate       21.7%       34.2%    (12.5) pts.                   KELLY SERVICES, INC. AND SUBSIDIARIES                      RESULTS OF OPERATIONS BY SEGMENT                                 (UNAUDITED)                          (In millions of dollars)                                           Second Quarter                         -------------------------------------------------                                                                  Constant                                                                  Currency                             2009         2008       Change       Change                         -----------  -----------  ----------   ---------- Americas Commercial   Revenue from services    (including fee-based    income)              $     473.0  $     656.8       (28.0)%      (26.4)%   Fee-based income              1.6          4.4       (65.1)       (63.7)   Gross profit                 70.6        102.5       (31.1)       (29.8)   SG&A expenses                68.6         82.8       (17.2)       (15.6)   Earnings from    operations                   2.0         19.7       (89.8)   Gross profit rate            14.9%        15.6%       (0.7) pts.   Expense rates:     % of revenue               14.5         12.6         1.9     % of gross profit          97.1         80.8        16.3   Operating margin              0.4          3.0        (2.6) Americas PT   Revenue from services    (including fee-based    income)              $     194.8  $     245.5       (20.7)%      (20.5)%   Fee-based income              2.3          5.4       (57.7)       (57.6)   Gross profit                 32.2         42.8       (24.7)       (24.5)   SG&A expenses                25.6         28.4       (10.1)        (9.7)   Earnings from    operations                   6.6         14.4       (53.6)   Gross profit rate            16.5%        17.4%       (0.9) pts.   Expense rates:     % of revenue               13.1         11.6         1.5     % of gross profit          79.2         66.3        12.9   Operating margin              3.4          5.9        (2.5) EMEA Commercial   Revenue from services    (including fee-based    income)              $     211.7  $     351.7       (39.8)%      (28.4)%   Fee-based income              3.9         11.1       (65.2)       (58.0)   Gross profit                 34.4         61.1       (43.8)       (33.4)   SG&A expenses                39.7         59.8       (33.6)       (21.5)   Earnings from    operations                  (5.3)         1.3          NM   Earnings from    operations    (excluding    restructuring    charges)                    (2.9)         1.3      (320.1)   Gross profit rate            16.2%        17.4%       (1.2) pts.   Expense rates:     % of revenue               18.8         17.0         1.8     % of gross profit         115.6         97.8        17.8   Operating margin             (2.5)         0.4        (2.9) EMEA PT   Revenue from services    (including fee-based    income)              $      33.1  $      46.3       (28.6)%      (15.6)%   Fee-based income              3.8          7.7       (50.8)       (40.5)   Gross profit                  8.8         14.1       (37.5)       (25.8)   SG&A expenses                10.1         12.7       (20.3)        (5.0)   Earnings from    operations                  (1.3)         1.4      (196.6)   Gross profit rate            26.6%        30.4%       (3.8) pts.   Expense rates:     % of revenue               30.6         27.4         3.2     % of gross profit         115.1         90.3        24.8   Operating margin             (4.0)         3.0        (7.0)                   KELLY SERVICES, INC.


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