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Kelly Services Reports 3rd Quarter 2009 Results
Friday, November 06, 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 third quarter of 2009.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the third quarter of 2009 totaled $1.0 billion, a 25% decrease compared to the corresponding quarter in 2008. On a constant currency basis, revenue decreased by 22%.

Losses from operations for the third quarter of 2009 totaled $28.0 million, compared to losses from operations of $14.5 million reported for the third quarter of 2008. Included in the results from operations are legal charges of $4.3 million in the third quarter of 2009 and $22.5 million in the third quarter of 2008.

Diluted losses per share from continuing operations in the third quarter of 2009 were $0.43 compared to third quarter 2008 losses of $0.33 per share. The legal charges totaled $0.08 per share in the third quarter of 2009 and $0.40 per share in the third quarter of 2008.

Commenting on the third quarter results, Camden was cautiously optimistic. "We are seeing signs that the global economy is picking up steam and job losses are stabilizing," he said. "In the past few months, trends have shown modest improvement, and we're particularly encouraged by the steady, sequential nature of that upturn."

Camden added that job creation may lag for a while. "Employers are understandably concerned about the sustainability of this recovery and likely will be guarded about expanding their workforce.

"In the meantime, Kelly has done an excellent job of streamlining, managing costs, maintaining a strong balance sheet, and serving our customers. Today, we're a more agile and focused company. We believe we're in a very good position to grow with this economy."

In conjunction with its third quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on November 6, to review the results and answer questions. The call may be accessed in one of the following ways:

Via the Telephone:

U.S.                1 800 288-9626
International       1 612 234-9959

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.

About Kelly Services

Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB) is a world leader in workforce management services and human resources solutions. Kelly offers a comprehensive array of temporary staffing, permanent placement, outsourcing, and consulting services. Kelly serves clients around the globe and provides employment to 650,000 employees annually. 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 SEPTEMBER 27, 2009 AND SEPTEMBER 28, 2008
                                (UNAUDITED)
              (In millions of dollars except per share data)
                                                                      %
                                   2009      2008    Change        Change
                                 --------  --------  -------       ------
Revenue from services            $1,049.2  $1,397.8  $(348.6)       (24.9)%
Cost of services                    883.0   1,152.1   (269.1)       (23.3)
                                 --------  --------  -------       ------
Gross profit                        166.2     245.7    (79.5)       (32.4)
Selling, general and
 administrative expenses            193.7     260.2    (66.5)       (25.6)
Asset impairments                     0.5         -      0.5           NM
                                 --------  --------  -------       ------
Loss from operations                (28.0)    (14.5)   (13.5)       (92.6)
Other expense, net                   (1.6)     (0.1)    (1.5)          NM
                                 --------  --------  -------       ------
Loss from continuing
 operations before taxes            (29.6)    (14.6)   (15.0)      (102.2)
Income taxes                        (14.8)     (3.1)   (11.7)      (375.4)
                                 --------  --------  -------       ------
Loss from continuing
 operations                         (14.8)    (11.5)    (3.3)       (28.6)
Loss from discontinued
 operations, net of tax                 -      (0.7)     0.7        100.0
                                 --------  --------  -------       ------
Net loss                         $  (14.8) $  (12.2) $  (2.6)       (21.6)%
                                 ========  ========  =======       ======
Basic loss per share on
 common stock
  Loss from continuing
   operations                    $  (0.43) $  (0.33) $ (0.10)       (30.3)%
  Loss from discontinued
   operations                           -     (0.02)    0.02        100.0
  Net loss                          (0.43)    (0.35)   (0.08)       (22.9)
Diluted loss per share on
 common stock
  Loss from continuing
   operations                    $  (0.43) $  (0.33) $ (0.10)       (30.3)%
  Loss from discontinued
   operations                           -     (0.02)    0.02        100.0
  Net loss                          (0.43)    (0.35)   (0.08)       (22.9)
                                 --------  --------  -------       ------
STATISTICS:
Gross profit rate                    15.8%     17.6%    (1.8) pts.
Selling, general and
 administrative expenses:
  % of revenue                       18.5      18.6     (0.1)
  % of gross profit                 116.5     105.9     10.6
% Return - Loss from operations      (2.7)     (1.0)    (1.7)
    Loss from continuing
     operations before taxes         (2.8)     (1.0)    (1.8)
    Loss from continuing
     operations                      (1.4)     (0.8)    (0.6)
    Net loss                         (1.4)     (0.9)    (0.5)
Effective income tax rate            49.9%     21.2%    28.7  pts.
                  KELLY SERVICES, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF EARNINGS
     FOR THE 39 WEEKS ENDED SEPTEMBER 27, 2009 AND SEPTEMBER 28, 2008
                                (UNAUDITED)
              (In millions of dollars except per share data)
                                                                      %
                                2009      2008      Change         Change
                              --------  --------  ---------        ------
Revenue from services         $3,120.7  $4,238.2  $(1,117.5)        (26.4)%
Cost of services               2,607.3   3,485.2     (877.9)        (25.2)
                              --------  --------  ---------        ------
Gross profit                     513.4     753.0     (239.6)        (31.8)
Selling, general and
 administrative expenses         593.4     739.6     (146.2)        (19.8)
Asset impairments                 53.1         -       53.1            NM
                              --------  --------  ---------        ------
(Loss) earnings from
 operations                     (133.1)     13.4     (146.5)           NM
Other expense, net                (1.3)        -       (1.3)           NM
                              --------  --------  ---------        ------
(Loss) earnings from
 continuing operations before
 taxes                          (134.4)     13.4     (147.8)           NM
Income taxes                     (37.5)      6.5      (44.0)           NM
                              --------  --------  ---------        ------
(Loss) earnings from
 continuing operations           (96.9)      6.9     (103.8)           NM
Earnings (loss) from
 discontinued operations, net
 of tax                            0.6      (0.4)       1.0         273.7
                              --------  --------  ---------        ------
Net (loss) earnings           $  (96.3) $    6.5  $  (102.8)           NM%
                              ========  ========  =========        ======
Basic (loss) earnings per
 share on common stock
  (Loss) earnings from
   continuing operations      $  (2.78) $   0.19  $   (2.97)           NM%
  Earnings (loss) from
   discontinued operations        0.02     (0.01)      0.03         300.0
  Net (loss) earnings            (2.76)     0.19      (2.95)           NM
Diluted (loss) earnings per
 share on common stock
  (Loss) earnings from
   continuing operations      $  (2.78) $   0.19  $   (2.97)           NM%
  Earnings (loss) from
   discontinued operations        0.02     (0.01)      0.03         300.0
  Net (loss) earnings            (2.76)     0.19      (2.95)           NM
                              --------  --------  ---------        ------
STATISTICS:
Gross profit rate                 16.5%     17.8%      (1.3) pts.
Selling, general and
 administrative expenses:
  % of revenue                    19.0      17.5        1.5
  % of gross profit              115.6      98.2       17.4
% Return - (Loss) earnings
 from operations                  (4.3)      0.3       (4.6)
    (Loss) earnings from
     continuing operations
     before taxes                 (4.3)      0.3       (4.6)
    (Loss) earnings from
     continuing operations        (3.1)      0.2       (3.3)
    Net (loss) earnings           (3.1)      0.2       (3.3)
Effective income tax rate         27.9%     48.5%     (20.6) pts.
                  KELLY SERVICES, INC.


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