DELAWARE
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38-1510762
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer [ ]
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Accelerated filer [X]
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Non-accelerated filer [ ] (Do not check if a smaller reporting company)
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Smaller reporting company [ ]
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Emerging growth company [ ]
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Page Number
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13 Weeks Ended
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39 Weeks Ended
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||||||||||||
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October 1,
2017 |
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October 2,
2016 |
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October 1,
2017 |
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October 2,
2016 |
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Revenue from services
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$
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1,328.8
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$
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1,247.8
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$
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3,952.1
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$
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3,972.4
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Cost of services
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1,098.1
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1,032.7
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3,261.0
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3,294.1
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Gross profit
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230.7
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215.1
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691.1
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678.3
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Selling, general and administrative expenses
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212.5
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196.3
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636.2
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634.9
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Earnings from operations
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18.2
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18.8
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54.9
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43.4
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Gain on investment in TS Kelly Asia Pacific
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—
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87.2
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—
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87.2
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Other expense, net
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(0.4
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(0.4
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(2.5
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)
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(1.3
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Earnings before taxes and equity in net earnings (loss) of affiliate
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17.8
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105.6
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52.4
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129.3
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Income tax (benefit) expense
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(4.1
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)
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24.7
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0.1
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28.2
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Net earnings before equity in net earnings (loss) of affiliate
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21.9
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80.9
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52.3
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101.1
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Equity in net earnings (loss) of affiliate
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1.1
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—
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1.6
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(0.1
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Net earnings
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$
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23.0
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$
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80.9
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$
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53.9
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$
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101.0
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Basic earnings per share
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$
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0.59
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$
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2.08
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$
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1.38
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$
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2.59
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Diluted earnings per share
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$
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0.58
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$
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2.06
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$
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1.37
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$
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2.58
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Dividends per share
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$
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0.075
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$
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0.075
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$
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0.225
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$
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0.20
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Average shares outstanding (millions):
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Basic
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38.3
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38.1
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38.3
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38.0
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Diluted
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38.8
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38.4
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38.8
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38.3
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13 Weeks Ended
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39 Weeks Ended
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October 1,
2017 |
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October 2,
2016 |
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October 1,
2017 |
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October 2,
2016 |
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Net earnings
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$
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23.0
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$
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80.9
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$
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53.9
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$
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101.0
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Other comprehensive income, net of tax:
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Foreign currency translation adjustments, net of tax expense of $0.2, tax benefit of $1.8, tax expense of $0.3 and tax benefit of $1.7, respectively
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3.4
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1.8
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16.0
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13.1
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Less: Reclassification adjustments included in net earnings
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—
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0.2
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—
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(0.1
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Foreign currency translation adjustments
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3.4
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2.0
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16.0
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13.0
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Unrealized gains on investment, net of tax expense of $12.9, $0.6, $21.9 and $4.3, respectively
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28.8
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1.3
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48.6
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8.8
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Other comprehensive income
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32.2
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3.3
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64.6
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21.8
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Comprehensive income
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$
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55.2
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$
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84.2
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$
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118.5
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$
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122.8
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ASSETS
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October 1,
2017 |
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January 1,
2017 |
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CURRENT ASSETS:
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Cash and equivalents
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$
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22.2
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$
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29.6
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Trade accounts receivable, less allowances of $13.1 and $12.5, respectively
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1,271.7
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1,138.3
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Prepaid expenses and other current assets
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70.0
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46.7
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Total current assets
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1,363.9
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1,214.6
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NONCURRENT ASSETS:
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Property and equipment:
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Property and equipment
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285.0
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270.0
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Accumulated depreciation
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(203.6
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(189.2
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Net property and equipment
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81.4
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80.8
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Deferred taxes
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192.0
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180.1
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Goodwill
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107.1
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88.4
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Investment in equity affiliate
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116.4
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114.8
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Other assets
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475.9
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349.4
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Total noncurrent assets
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972.8
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813.5
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TOTAL ASSETS
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$
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2,336.7
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$
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2,028.1
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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October 1,
2017 |
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January 1,
2017 |
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CURRENT LIABILITIES:
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Short-term borrowings
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$
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23.9
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$
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—
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Accounts payable and accrued liabilities
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496.1
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455.1
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Accrued payroll and related taxes
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312.6
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241.5
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Accrued insurance
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25.6
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23.4
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Income and other taxes
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60.0
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51.1
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Total current liabilities
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918.2
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771.1
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NONCURRENT LIABILITIES:
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Accrued insurance
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49.7
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45.5
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Accrued retirement benefits
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175.0
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157.4
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Other long-term liabilities
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66.8
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42.1
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Total noncurrent liabilities
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291.5
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245.0
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Commitments and contingencies (see contingencies footnote)
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STOCKHOLDERS’ EQUITY:
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Capital stock, $1.00 par value
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Class A common stock, shares issued 36.6 at 2017 and 2016
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36.6
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36.6
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Class B common stock, shares issued 3.5 at 2017 and 2016
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3.5
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3.5
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Treasury stock, at cost
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Class A common stock, 1.7 shares at 2017 and 1.9 shares at 2016
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(34.6
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(38.4
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Class B common stock
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(0.6
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)
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(0.6
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Paid-in capital
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30.0
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28.6
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Earnings invested in the business
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968.8
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923.6
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Accumulated other comprehensive income
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123.3
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58.7
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Total stockholders’ equity
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1,127.0
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1,012.0
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$
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2,336.7
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$
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2,028.1
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13 Weeks Ended
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39 Weeks Ended
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||||||||||||
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October 1,
2017 |
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October 2,
2016 |
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October 1,
2017 |
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October 2,
2016 |
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Capital Stock
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Class A common stock
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Balance at beginning of period
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$
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36.6
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$
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36.6
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$
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36.6
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$
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36.6
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Conversions from Class B
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—
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—
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—
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—
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Balance at end of period
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36.6
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36.6
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36.6
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36.6
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||||
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Class B common stock
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Balance at beginning of period
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3.5
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3.5
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3.5
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3.5
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Conversions to Class A
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—
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—
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—
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—
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||||
Balance at end of period
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3.5
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3.5
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3.5
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3.5
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Treasury Stock
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Class A common stock
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Balance at beginning of period
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(37.0
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)
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(41.5
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)
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(38.4
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)
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(43.7
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)
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Issuance of restricted stock and other
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2.4
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3.0
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3.8
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5.2
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Balance at end of period
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(34.6
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)
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(38.5
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)
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(34.6
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)
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(38.5
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)
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||||
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Class B common stock
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Balance at beginning of period
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(0.6
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)
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(0.6
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)
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(0.6
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)
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(0.6
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)
|
||||
Issuance of restricted stock and other
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—
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—
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—
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—
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Balance at end of period
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(0.6
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)
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(0.6
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)
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(0.6
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)
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(0.6
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||||
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Paid-in Capital
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Balance at beginning of period
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31.1
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|
28.1
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|
|
28.6
|
|
|
25.4
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|
||||
Issuance of restricted stock and other
|
(1.1
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)
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(1.9
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)
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|
1.4
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0.8
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|
||||
Balance at end of period
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30.0
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|
26.2
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30.0
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26.2
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Earnings Invested in the Business
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|
|
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|
||||||||
Balance at beginning of period
|
948.7
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|
|
828.8
|
|
|
923.6
|
|
|
813.5
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|
||||
Net earnings
|
23.0
|
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|
80.9
|
|
|
53.9
|
|
|
101.0
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|
||||
Dividends
|
(2.9
|
)
|
|
(2.9
|
)
|
|
(8.7
|
)
|
|
(7.7
|
)
|
||||
Balance at end of period
|
968.8
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|
906.8
|
|
|
968.8
|
|
|
906.8
|
|
||||
|
|
|
|
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|
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|
||||||||
Accumulated Other Comprehensive Income
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
91.1
|
|
|
79.2
|
|
|
58.7
|
|
|
60.7
|
|
||||
Other comprehensive income, net of tax
|
32.2
|
|
|
3.3
|
|
|
64.6
|
|
|
21.8
|
|
||||
Balance at end of period
|
123.3
|
|
|
82.5
|
|
|
123.3
|
|
|
82.5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Stockholders’ Equity at end of period
|
$
|
1,127.0
|
|
|
$
|
1,016.5
|
|
|
$
|
1,127.0
|
|
|
$
|
1,016.5
|
|
|
39 Weeks Ended
|
||||||
|
October 1,
2017 |
|
October 2,
2016 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
|
53.9
|
|
|
$
|
101.0
|
|
Noncash adjustments:
|
|
|
|
||||
Depreciation and amortization
|
16.5
|
|
|
16.0
|
|
||
Provision for bad debts
|
3.6
|
|
|
6.1
|
|
||
Stock-based compensation
|
6.8
|
|
|
7.6
|
|
||
Gain on investment in TS Kelly Asia Pacific equity affiliate
|
—
|
|
|
(87.2
|
)
|
||
Other, net
|
(2.3
|
)
|
|
(2.2
|
)
|
||
Changes in operating assets and liabilities, net of acquisition
|
(45.6
|
)
|
|
(13.1
|
)
|
||
|
|
|
|
||||
Net cash from operating activities
|
32.9
|
|
|
28.2
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(14.7
|
)
|
|
(7.8
|
)
|
||
Acquisition of company, net of cash received
|
(37.2
|
)
|
|
—
|
|
||
Net cash proceeds from investment in TS Kelly Asia Pacific equity affiliate
|
—
|
|
|
18.8
|
|
||
Proceeds from repayment of loan to TS Kelly equity affiliate
|
0.6
|
|
|
—
|
|
||
Other investing activities
|
—
|
|
|
(0.4
|
)
|
||
|
|
|
|
||||
Net cash (used in) from investing activities
|
(51.3
|
)
|
|
10.6
|
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Net change in short-term borrowings
|
23.9
|
|
|
(47.8
|
)
|
||
Dividend payments
|
(8.7
|
)
|
|
(7.7
|
)
|
||
Payments of tax withholding for restricted shares
|
(1.7
|
)
|
|
(2.1
|
)
|
||
Other financing activities
|
(0.1
|
)
|
|
0.4
|
|
||
|
|
|
|
||||
Net cash from (used in) financing activities
|
13.4
|
|
|
(57.2
|
)
|
||
|
|
|
|
||||
Effect of exchange rates on cash and equivalents
|
(2.4
|
)
|
|
3.8
|
|
||
|
|
|
|
||||
Net change in cash and equivalents
|
(7.4
|
)
|
|
(14.6
|
)
|
||
Cash and equivalents at beginning of period
|
29.6
|
|
|
42.2
|
|
||
|
|
|
|
||||
|
|
|
|
||||
Cash and equivalents at end of period
|
$
|
22.2
|
|
|
$
|
27.6
|
|
Cash
|
$
|
1.8
|
|
Other current assets
|
3.6
|
|
|
Goodwill
|
18.7
|
|
|
Intangibles
|
18.3
|
|
|
Other noncurrent assets
|
0.5
|
|
|
Current liabilities
|
(3.9
|
)
|
|
Purchase price paid at closing
|
$
|
39.0
|
|
|
|
Fair Value Measurements on a Recurring Basis
As of Third Quarter-End 2017 |
||||||||||||||
Description
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
|
(In millions of dollars)
|
||||||||||||||
Money market funds
|
|
$
|
4.2
|
|
|
$
|
4.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Available-for-sale investment
|
|
212.4
|
|
|
212.4
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total assets at fair value
|
|
$
|
216.6
|
|
|
$
|
216.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Fair Value Measurements on a Recurring Basis
As of Year-End 2016 |
||||||||||||||
Description
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
|
(In millions of dollars)
|
||||||||||||||
Money market funds
|
|
$
|
4.0
|
|
|
$
|
4.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Available-for-sale investment
|
|
141.2
|
|
|
141.2
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total assets at fair value
|
|
$
|
145.2
|
|
|
$
|
145.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Balance as of year-end 2016
|
$
|
0.5
|
|
Additions charged to Global Talent Solutions
|
2.0
|
|
|
Additions charged to Americas Staffing
|
0.4
|
|
|
Reductions for cash payments related to all restructuring activities
|
(0.7
|
)
|
|
Balance as of first quarter-end 2017
|
2.2
|
|
|
Reductions for cash payments related to all restructuring activities
|
(1.3
|
)
|
|
Balance as of second quarter-end 2017
|
0.9
|
|
|
Reductions for cash payments related to all restructuring activities
|
(0.4
|
)
|
|
Balance as of third quarter-end 2017
|
$
|
0.5
|
|
|
As of Year-End 2016
|
|
|
|
|
|
As of Third Quarter-End 2017
|
||||||||||||||||
|
Goodwill,
Gross |
|
Accumulated Impairment Losses
|
|
Goodwill,
Net |
|
Allocation of Goodwill
|
|
Additions to Goodwill
|
|
Goodwill
|
||||||||||||
|
(In millions of dollars)
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas Commercial
|
$
|
40.0
|
|
|
$
|
(16.4
|
)
|
|
$
|
23.6
|
|
|
$
|
(23.6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Americas PT
|
37.9
|
|
|
—
|
|
|
37.9
|
|
|
(37.9
|
)
|
|
—
|
|
|
—
|
|
||||||
EMEA Commercial
|
50.4
|
|
|
(50.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
EMEA PT
|
22.0
|
|
|
(22.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
APAC Commercial
|
12.1
|
|
|
(12.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
APAC PT
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
OCG
|
26.9
|
|
|
—
|
|
|
26.9
|
|
|
(26.9
|
)
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas Staffing
|
—
|
|
|
—
|
|
|
—
|
|
|
25.9
|
|
|
18.7
|
|
|
44.6
|
|
||||||
Global Talent Solutions
|
—
|
|
|
—
|
|
|
—
|
|
|
62.5
|
|
|
—
|
|
|
62.5
|
|
||||||
International Staffing
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
$
|
189.3
|
|
|
$
|
(100.9
|
)
|
|
$
|
88.4
|
|
|
$
|
—
|
|
|
$
|
18.7
|
|
|
$
|
107.1
|
|
|
Third Quarter 2017
|
||||||||||||||
|
Foreign
Currency Translation Adjustments |
|
Unrealized
Gains and Losses on Investment |
|
Pension
Liability Adjustments |
|
Total
|
||||||||
|
(In millions of dollars)
|
||||||||||||||
Beginning balance
|
$
|
(10.7
|
)
|
|
$
|
103.6
|
|
|
$
|
(1.8
|
)
|
|
$
|
91.1
|
|
Other comprehensive income before reclassifications
|
3.4
|
|
|
28.8
|
|
|
—
|
|
|
32.2
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net current-period other comprehensive income
|
3.4
|
|
|
28.8
|
|
|
—
|
|
|
32.2
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Ending balance
|
$
|
(7.3
|
)
|
|
$
|
132.4
|
|
|
$
|
(1.8
|
)
|
|
$
|
123.3
|
|
|
September Year to Date 2017
|
||||||||||||||
|
Foreign
Currency Translation Adjustments |
|
Unrealized
Gains and Losses on Investment |
|
Pension
Liability Adjustments |
|
Total
|
||||||||
|
(In millions of dollars)
|
||||||||||||||
Beginning balance
|
$
|
(23.3
|
)
|
|
$
|
83.8
|
|
|
$
|
(1.8
|
)
|
|
$
|
58.7
|
|
Other comprehensive income before reclassifications
|
16.0
|
|
|
48.6
|
|
|
—
|
|
|
64.6
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net current-period other comprehensive income
|
16.0
|
|
|
48.6
|
|
|
—
|
|
|
64.6
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Ending balance
|
$
|
(7.3
|
)
|
|
$
|
132.4
|
|
|
$
|
(1.8
|
)
|
|
$
|
123.3
|
|
|
Third Quarter 2016
|
||||||||||||||
|
Foreign
Currency Translation Adjustments |
|
Unrealized
Gains and Losses on Investment |
|
Pension
Liability Adjustments |
|
Total
|
||||||||
|
(In millions of dollars)
|
||||||||||||||
Beginning balance
|
$
|
(11.6
|
)
|
|
$
|
92.4
|
|
|
$
|
(1.6
|
)
|
|
$
|
79.2
|
|
Other comprehensive income before reclassifications
|
1.8
|
|
|
1.3
|
|
|
—
|
|
|
3.1
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||
Net current-period other comprehensive income
|
2.0
|
|
|
1.3
|
|
|
—
|
|
|
3.3
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Ending balance
|
$
|
(9.6
|
)
|
|
$
|
93.7
|
|
|
$
|
(1.6
|
)
|
|
$
|
82.5
|
|
|
September Year to Date 2016
|
||||||||||||||
|
Foreign
Currency
Translation Adjustments
|
|
Unrealized
Gains and
Losses on Investment
|
|
Pension
Liability Adjustments
|
|
Total
|
||||||||
|
(In millions of dollars)
|
||||||||||||||
Beginning balance
|
$
|
(22.6
|
)
|
|
$
|
84.9
|
|
|
$
|
(1.6
|
)
|
|
$
|
60.7
|
|
Other comprehensive income before reclassifications
|
13.1
|
|
|
8.8
|
|
|
—
|
|
|
21.9
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
||||
Net current-period other comprehensive income
|
13.0
|
|
|
8.8
|
|
|
—
|
|
|
21.8
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Ending balance
|
$
|
(9.6
|
)
|
|
$
|
93.7
|
|
|
$
|
(1.6
|
)
|
|
$
|
82.5
|
|
|
Third Quarter
|
|
September Year to Date
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net earnings
|
$
|
23.0
|
|
|
$
|
80.9
|
|
|
$
|
53.9
|
|
|
$
|
101.0
|
|
Less: earnings allocated to participating securities
|
(0.3
|
)
|
|
(1.8
|
)
|
|
(0.9
|
)
|
|
(2.3
|
)
|
||||
Net earnings available to common shareholders
|
$
|
22.7
|
|
|
$
|
79.1
|
|
|
$
|
53.0
|
|
|
$
|
98.7
|
|
|
|
|
|
|
|
|
|
||||||||
Average shares outstanding (millions):
|
|
|
|
|
|
|
|
||||||||
Basic
|
38.3
|
|
|
38.1
|
|
|
38.3
|
|
|
38.0
|
|
||||
Dilutive share awards
|
0.5
|
|
|
0.3
|
|
|
0.5
|
|
|
0.3
|
|
||||
Diluted
|
38.8
|
|
|
38.4
|
|
|
38.8
|
|
|
38.3
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
$
|
0.59
|
|
|
$
|
2.08
|
|
|
$
|
1.38
|
|
|
$
|
2.59
|
|
Diluted earnings per share
|
$
|
0.58
|
|
|
$
|
2.06
|
|
|
$
|
1.37
|
|
|
$
|
2.58
|
|
|
Financial Measure Performance Shares
|
|
TSR Performance Shares
|
||||||||||
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
||||||
Nonvested at year-end 2016
|
499
|
|
|
$
|
19.17
|
|
|
208
|
|
|
$
|
17.49
|
|
Granted
|
286
|
|
|
21.32
|
|
|
101
|
|
|
20.16
|
|
||
Vested
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(182
|
)
|
|
20.32
|
|
|
(65
|
)
|
|
18.99
|
|
||
Nonvested at third quarter-end 2017
|
603
|
|
|
$
|
21.19
|
|
|
244
|
|
|
$
|
18.20
|
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Nonvested at year-end 2016
|
653
|
|
|
$
|
16.58
|
|
Granted
|
189
|
|
|
21.90
|
|
|
Vested
|
(74
|
)
|
|
17.25
|
|
|
Forfeited
|
(163
|
)
|
|
16.91
|
|
|
Nonvested at second quarter-end 2017
|
605
|
|
|
18.07
|
|
|
Granted
|
19
|
|
|
21.85
|
|
|
Vested
|
(164
|
)
|
|
16.73
|
|
|
Forfeited
|
(2
|
)
|
|
19.82
|
|
|
Nonvested at third quarter-end 2017
|
458
|
|
|
$
|
18.71
|
|
|
Third Quarter
|
|
September Year to Date
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions of dollars)
|
||||||||||||||
Interest income
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
$
|
0.5
|
|
|
$
|
0.3
|
|
Interest expense
|
(0.7
|
)
|
|
(0.9
|
)
|
|
(1.8
|
)
|
|
(2.7
|
)
|
||||
Dividend income
|
—
|
|
|
—
|
|
|
0.7
|
|
|
0.6
|
|
||||
Foreign exchange gain (loss)
|
0.1
|
|
|
0.3
|
|
|
(1.9
|
)
|
|
0.5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other expense, net
|
$
|
(0.4
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
(2.5
|
)
|
|
$
|
(1.3
|
)
|
|
Third Quarter
|
|
September Year to Date
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions of dollars)
|
||||||||||||||
Revenue from Services:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Americas Staffing
|
$
|
554.8
|
|
|
$
|
518.2
|
|
|
$
|
1,703.5
|
|
|
$
|
1,614.7
|
|
Global Talent Solutions
|
503.0
|
|
|
495.0
|
|
|
1,495.8
|
|
|
1,486.5
|
|
||||
International Staffing
|
275.6
|
|
|
239.3
|
|
|
766.0
|
|
|
885.6
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Less: Intersegment revenue
|
(4.6
|
)
|
|
(4.7
|
)
|
|
(13.2
|
)
|
|
(14.4
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Consolidated Total
|
$
|
1,328.8
|
|
|
$
|
1,247.8
|
|
|
$
|
3,952.1
|
|
|
$
|
3,972.4
|
|
|
Third Quarter
|
|
September Year to Date
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions of dollars)
|
||||||||||||||
Earnings from Operations:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Americas Staffing gross profit
|
$
|
98.8
|
|
|
$
|
95.0
|
|
|
$
|
307.9
|
|
|
$
|
292.9
|
|
Americas Staffing SG&A expenses
|
(85.5
|
)
|
|
(80.7
|
)
|
|
(253.0
|
)
|
|
(245.9
|
)
|
||||
Americas Staffing Earnings from Operations
|
13.3
|
|
|
14.3
|
|
|
54.9
|
|
|
47.0
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Global Talent Solutions gross profit
|
93.0
|
|
|
86.2
|
|
|
272.2
|
|
|
257.2
|
|
||||
Global Talent Solutions SG&A expenses
|
(72.2
|
)
|
|
(70.2
|
)
|
|
(220.8
|
)
|
|
(213.6
|
)
|
||||
Global Talent Solutions Earnings from Operations
|
20.8
|
|
|
16.0
|
|
|
51.4
|
|
|
43.6
|
|
||||
|
|
|
|
|
|
|
|
||||||||
International Staffing gross profit
|
39.5
|
|
|
35.0
|
|
|
112.7
|
|
|
131.4
|
|
||||
International Staffing SG&A expenses
|
(32.3
|
)
|
|
(30.5
|
)
|
|
(96.2
|
)
|
|
(116.3
|
)
|
||||
International Staffing Earnings from Operations
|
7.2
|
|
|
4.5
|
|
|
16.5
|
|
|
15.1
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Less: Intersegment gross profit
|
(0.6
|
)
|
|
(1.1
|
)
|
|
(1.7
|
)
|
|
(3.2
|
)
|
||||
Less: Intersegment SG&A expenses
|
0.6
|
|
|
1.1
|
|
|
1.7
|
|
|
3.2
|
|
||||
Net Intersegment Activity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Corporate
|
(23.1
|
)
|
|
(16.0
|
)
|
|
(67.9
|
)
|
|
(62.3
|
)
|
||||
Consolidated Total
|
18.2
|
|
|
18.8
|
|
|
54.9
|
|
|
43.4
|
|
||||
Gain on investment in TS Kelly Asia Pacific
|
—
|
|
|
87.2
|
|
|
—
|
|
|
87.2
|
|
||||
Other Expense, Net
|
(0.4
|
)
|
|
(0.4
|
)
|
|
(2.5
|
)
|
|
(1.3
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings before taxes and equity in net earnings (loss) of affiliate
|
$
|
17.8
|
|
|
$
|
105.6
|
|
|
$
|
52.4
|
|
|
$
|
129.3
|
|
•
|
Continue to build our core strengths in branch-delivered staffing in key markets;
|
•
|
Maintain our position as a market-leading provider of talent supply chain management in our GTS segment; and
|
•
|
Lower our costs through deployment of efficient service delivery models.
|
•
|
Earnings from operations for the third quarter of 2017 totaled $18.2 million, compared to $18.8 million in the third quarter of 2016. The conversion rate for the third quarter was 7.9%, compared to 8.7% in the same period last year.
|
•
|
In the Americas Staffing segment, revenue grew 7% year over year, and earnings from operations were $13.3 million, compared to $14.3 million in the third quarter last year.
|
•
|
The GTS segment delivered 8% gross profit growth and 30% earnings from operations growth year over year.
|
•
|
In the International Staffing segment, year-over-year revenue improved 15%, or 10% in constant currency, as the segment delivered strong growth across Europe.
|
•
|
To grow professional and technical specialty and outsourced solutions, creating a more balanced portfolio that yields benefits from an improved mix;
|
•
|
Locally delivered staffing to remain a core component of our strategy;
|
•
|
Kelly Educational Staffing, including Teachers On Call, to continue to be a market leader in the U.S.;
|
•
|
To exercise strict expense control, delivering structural improvements that ensure a return from our investments in delivery infrastructure and, as a result;
|
•
|
Our conversion rate to continue to improve.
|
|
2017
|
|
2016
|
|
Change
|
|
CC
Change
|
|||||||
Revenue from services
|
$
|
1,328.8
|
|
|
$
|
1,247.8
|
|
|
6.5
|
%
|
|
|
5.3
|
%
|
Gross profit
|
230.7
|
|
|
215.1
|
|
|
7.3
|
|
|
|
6.2
|
|
||
Total SG&A expenses
|
212.5
|
|
|
196.3
|
|
|
8.3
|
|
|
|
7.3
|
|
||
Earnings from operations
|
18.2
|
|
|
18.8
|
|
|
(2.9
|
)
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
Staffing fee-based income (included in revenue from services)
|
14.2
|
|
|
13.2
|
|
|
6.9
|
|
|
|
4.1
|
|
||
Gross profit rate
|
17.4
|
%
|
|
17.2
|
%
|
|
0.2
|
|
pts.
|
|
|
|||
Conversion rate
|
7.9
|
|
|
8.7
|
|
|
(0.8
|
)
|
|
|
|
|||
Return on sales
|
1.4
|
|
|
1.5
|
|
|
(0.1
|
)
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
CC
Change
|
||||||||
Revenue from services
|
$
|
554.8
|
|
|
$
|
518.2
|
|
|
7.1
|
%
|
|
|
|
6.6
|
%
|
Gross profit
|
98.8
|
|
|
95.0
|
|
|
4.1
|
|
|
|
3.7
|
|
|||
Total SG&A expenses
|
85.5
|
|
|
80.7
|
|
|
6.0
|
|
|
|
5.6
|
|
|||
Earnings from operations
|
13.3
|
|
|
14.3
|
|
|
(6.7
|
)
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Gross profit rate
|
17.8
|
%
|
|
18.3
|
%
|
|
(0.5
|
)
|
pts.
|
|
|
||||
Conversion rate
|
13.5
|
|
|
15.0
|
|
|
(1.5
|
)
|
|
|
|
||||
Return on sales
|
2.4
|
|
|
2.8
|
|
|
(0.4
|
)
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
CC
Change
|
|||||||
Revenue from services
|
$
|
503.0
|
|
|
$
|
495.0
|
|
|
1.6
|
%
|
|
|
1.3
|
%
|
Gross profit
|
93.0
|
|
|
86.2
|
|
|
7.9
|
|
|
|
7.6
|
|
||
Total SG&A expenses
|
72.2
|
|
|
70.2
|
|
|
2.8
|
|
|
|
2.5
|
|
||
Earnings from operations
|
20.8
|
|
|
16.0
|
|
|
30.3
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
Gross profit rate
|
18.5
|
%
|
|
17.4
|
%
|
|
1.1
|
|
pts.
|
|
|
|
||
Conversion rate
|
22.4
|
|
|
18.5
|
|
|
3.9
|
|
|
|
|
|||
Return on sales
|
4.1
|
|
|
3.2
|
|
|
0.9
|
|
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
CC
Change
|
|||||||
Revenue from services
|
$
|
275.6
|
|
|
$
|
239.3
|
|
|
15.2
|
%
|
|
|
10.4
|
%
|
Gross profit
|
39.5
|
|
|
35.0
|
|
|
12.7
|
|
|
|
7.7
|
|
||
Total SG&A expenses
|
32.3
|
|
|
30.5
|
|
|
6.1
|
|
|
|
1.9
|
|
||
Earnings from operations
|
7.2
|
|
|
4.5
|
|
|
57.0
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Gross profit rate
|
14.3
|
%
|
|
14.7
|
%
|
|
(0.4
|
)
|
pts.
|
|
|
|
||
Conversion rate
|
18.0
|
|
|
12.9
|
|
|
5.1
|
|
|
|
|
|||
Return on sales
|
2.6
|
|
|
1.9
|
|
|
0.7
|
|
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
CC
Change
|
|||||||
Revenue from services
|
$
|
3,952.1
|
|
|
$
|
3,972.4
|
|
|
(0.5
|
)%
|
|
|
(0.7
|
)%
|
Gross profit
|
691.1
|
|
|
678.3
|
|
|
1.9
|
|
|
|
1.7
|
|
||
SG&A expenses excluding restructuring charges
|
633.8
|
|
|
631.5
|
|
|
0.4
|
|
|
|
0.3
|
|
||
Restructuring charges
|
2.4
|
|
|
3.4
|
|
|
(31.6
|
)
|
|
|
(31.2
|
)
|
||
Total SG&A expenses
|
636.2
|
|
|
634.9
|
|
|
0.2
|
|
|
|
0.1
|
|
||
Earnings from operations
|
54.9
|
|
|
43.4
|
|
|
26.5
|
|
|
|
|
|||
Earnings from operations excluding restructuring charges
|
57.3
|
|
|
46.8
|
|
|
22.2
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Staffing fee-based income (included in revenue from services)
|
41.4
|
|
|
46.3
|
|
|
(10.8
|
)
|
|
|
(11.7
|
)
|
||
Gross profit rate
|
17.5
|
%
|
|
17.1
|
%
|
|
0.4
|
|
pts.
|
|
|
|
||
Conversion rate
|
7.9
|
|
|
6.4
|
|
|
1.5
|
|
|
|
|
|
||
Conversion rate excluding restructuring charges
|
8.3
|
|
|
6.9
|
|
|
1.4
|
|
|
|
|
|
||
Return on sales
|
1.4
|
|
|
1.1
|
|
|
0.3
|
|
|
|
|
|
||
Return on sales excluding restructuring charges
|
1.4
|
|
|
1.2
|
|
|
0.2
|
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
CC
Change
|
|||||||
Revenue from services
|
$
|
1,703.5
|
|
|
$
|
1,614.7
|
|
|
5.5
|
%
|
|
|
5.3
|
%
|
Gross profit
|
307.9
|
|
|
292.9
|
|
|
5.1
|
|
|
|
5.0
|
|
||
SG&A expenses excluding restructuring charges
|
252.6
|
|
|
244.1
|
|
|
3.5
|
|
|
|
3.4
|
|
||
Restructuring charges
|
0.4
|
|
|
1.8
|
|
|
(80.0
|
)
|
|
|
(79.8
|
)
|
||
Total SG&A expenses
|
253.0
|
|
|
245.9
|
|
|
2.9
|
|
|
|
2.8
|
|
||
Earnings from operations
|
54.9
|
|
|
47.0
|
|
|
16.8
|
|
|
|
|
|
||
Earnings from operations excluding restructuring charges
|
55.3
|
|
|
48.8
|
|
|
13.2
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
Gross profit rate
|
18.1
|
%
|
|
18.1
|
%
|
|
—
|
|
pts.
|
|
|
|
||
Conversion rate
|
17.8
|
|
|
16.1
|
|
|
1.7
|
|
|
|
|
|
||
Conversion rate excluding restructuring charges
|
18.0
|
|
|
16.7
|
|
|
1.3
|
|
|
|
|
|
||
Return on sales
|
3.2
|
|
|
2.9
|
|
|
0.3
|
|
|
|
|
|
||
Return on sales excluding restructuring charges
|
3.2
|
|
|
3.0
|
|
|
0.2
|
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
CC
Change
|
|||||||
Revenue from services
|
$
|
1,495.8
|
|
|
$
|
1,486.5
|
|
|
0.6
|
%
|
|
|
0.6
|
%
|
Gross profit
|
272.2
|
|
|
257.2
|
|
|
5.8
|
|
|
|
5.9
|
|
||
SG&A expenses excluding restructuring charges
|
218.8
|
|
|
213.2
|
|
|
2.6
|
|
|
|
2.7
|
|
||
Restructuring charges
|
2.0
|
|
|
0.4
|
|
|
415.5
|
|
|
|
417.6
|
|
||
Total SG&A expenses
|
220.8
|
|
|
213.6
|
|
|
3.4
|
|
|
|
3.5
|
|
||
Earnings from operations
|
51.4
|
|
|
43.6
|
|
|
18.0
|
|
|
|
|
|||
Earnings from operations excluding restructuring charges
|
53.4
|
|
|
44.0
|
|
|
21.5
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
Gross profit rate
|
18.2
|
%
|
|
17.3
|
%
|
|
0.9
|
|
pts.
|
|
|
|
||
Conversion rate
|
18.9
|
|
|
16.9
|
|
|
2.0
|
|
|
|
|
|
||
Conversion rate excluding restructuring charges
|
19.6
|
|
|
17.1
|
|
|
2.5
|
|
|
|
|
|
||
Return on sales
|
3.4
|
|
|
2.9
|
|
|
0.5
|
|
|
|
|
|
||
Return on sales excluding restructuring charges
|
3.6
|
|
|
3.0
|
|
|
0.6
|
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
CC
Change
|
|||||||
Revenue from services
|
$
|
766.0
|
|
|
$
|
885.6
|
|
|
(13.5
|
)%
|
|
|
(14.0
|
)%
|
Gross profit
|
112.7
|
|
|
131.4
|
|
|
(14.2
|
)
|
|
|
(14.8
|
)
|
||
SG&A expenses excluding restructuring charges
|
96.2
|
|
|
115.1
|
|
|
(16.4
|
)
|
|
|
(16.8
|
)
|
||
Restructuring charges
|
—
|
|
|
1.2
|
|
|
(100.0
|
)
|
|
|
(100.0
|
)
|
||
Total SG&A expenses
|
96.2
|
|
|
116.3
|
|
|
(17.2
|
)
|
|
|
(17.6
|
)
|
||
Earnings from operations
|
16.5
|
|
|
15.1
|
|
|
9.1
|
|
|
|
|
|||
Earnings from operations excluding restructuring charges
|
16.5
|
|
|
16.3
|
|
|
1.6
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
Gross profit rate
|
14.7
|
%
|
|
14.8
|
%
|
|
(0.1
|
)
|
pts.
|
|
|
|
||
Conversion rate
|
14.6
|
|
|
11.5
|
|
|
3.1
|
|
|
|
|
|||
Conversion rate excluding restructuring charges
|
14.6
|
|
|
12.3
|
|
|
2.3
|
|
|
|
|
|
||
Return on sales
|
2.2
|
|
|
1.7
|
|
|
0.5
|
|
|
|
|
|
||
Return on sales excluding restructuring charges
|
2.2
|
|
|
1.8
|
|
|
0.4
|
|
|
|
|
|
Period
|
|
Total Number
of Shares
(or Units)
Purchased
|
|
Average
Price Paid
per Share
(or Unit)
|
|
Total Number
of Shares (or
Units) Purchased
as Part of Publicly
Announced Plans
or Programs
|
|
Maximum Number
(or Approximate
Dollar Value) of
Shares (or Units)
That May Yet Be
Purchased Under the
Plans or Programs
(in millions of dollars)
|
||||||
July 3, 2017 through August 6, 2017
|
|
111
|
|
|
$
|
23.24
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||
August 7, 2017 through September 3, 2017
|
|
3,944
|
|
|
21.46
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||
September 4, 2017 through October 1, 2017
|
|
44,027
|
|
|
25.06
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
|
48,082
|
|
|
$
|
24.76
|
|
|
—
|
|
|
|
|
|
KELLY SERVICES, INC.
|
|
|
Date: November 8, 2017
|
|
|
|
|
/s/ Olivier G. Thirot
|
|
Olivier G. Thirot
|
|
|
|
Senior Vice President and
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
Date: November 8, 2017
|
|
|
|
|
/s/ Laura S. Lockhart
|
|
Laura S. Lockhart
|
|
|
|
Vice President, Corporate Controller
|
|
and Chief Accounting Officer
|
|
(Principal Accounting Officer)
|
Exhibit No.
|
|
Description
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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an employee or a family member receiving an improper personal benefit as a result of the employee’s position with the Company. A “family member” means a spouse, parents, children, siblings (whether by blood, marriage, or adoption), or anyone who resides in an employee’s home;
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knowingly engaging in any conduct or activity that is inconsistent with the Company's best interests or that disrupts or impairs the Company's relationship with any person or entity with which the Company has or proposes to enter into a business or contractual relationship;
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accepting compensation, in any form, from any source other than the Company, which affects job performance in any way;
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offering, giving, or receiving gifts to or from anyone who deals with the Company in cases where the gift is being made to influence our actions in our position with the Company, or where acceptance of the gifts could create the appearance of an impropriety.
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personally take for ourselves or divert to others opportunities that are discovered through the use of Company property, information or our respective position;
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use Company employees, property, information, or our respective positions for personal gain; or
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compete with the Company, directly or indirectly, for business opportunities.
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Anti-Bribery Training
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Code of Business Conduct and Ethics
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Corporate Disclosure and Communications
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Corporate Social Responsibility http://kellyservices.com/Global/Corporate-Social-Responsibility-Policy-Statement/#.V3aE6E32aM8
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Expense and Entertainment
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Human Trafficking
http://kellyservices.com/Global/Human-Trafficking-Policy/
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Information Security
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Privacy Statement
http://kellyservices.com/Global/Privacy_Statement/
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Risk Appetite and Tolerance Statement
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Social Media
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Travel
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Workplace Violence
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1.
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I have reviewed this quarterly report on Form 10-Q of Kelly Services, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: November 8, 2017
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/s/ George S. Corona
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George S. Corona
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President and
Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Kelly Services, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: November 8, 2017
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/s/ Olivier G. Thirot
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Olivier G. Thirot
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Senior Vice President and
Chief Financial Officer |
(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: November 8, 2017
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/s/ George S. Corona
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George S. Corona
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President and
Chief Executive Officer |
(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: November 8, 2017
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/s/ Olivier G. Thirot
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Olivier G. Thirot
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Senior Vice President and Chief Financial Officer
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