Kelly Services, Inc. (NASDAQ:KELY.B) Q1 2016 Earnings Conference Call - Final Transcript

May 11, 2016 • 09:00 am ET

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Kelly Services, Inc. (NASDAQ:KELY.B) Q1 2016 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Good morning, ladies and gentlemen, and welcome to Kelly Services' First Quarter Earnings Conference Call. All parties will be on listen-only until the question-and-answer portion of the presentation. Today's call is being recorded at the request of Kelly Services. If anyone has any objections, you may disconnect at this time.

I would now like to turn the meeting over to your host, Mr. Carl Camden, President and CEO. Sir, you may begin.

Executive
Carl Camden

Thank you, John. Good morning, everyone. Welcome to Kelly Services' 2016 first-quarter conference call. With me on today's call is Olivier Thirot, our CFO; and George Corona, our COO.

(Forward-Looking Cautionary Statements)

Before we look at Q1 results, let me note as we announced in our press release earlier this morning that Kelly's Board of Directors has declared a 50% cash dividend increase for our stockholders. We are very pleased that our strong sustained operating results in 2015 have given us the ability to deliver this increase and to enhance shareholder value.

As we look at our first-quarter 2016 results, let me point out that the year-over-year comparisons are represented in constant currency due to ongoing volatility in foreign currency exchange rates, with the exception of our year-over-year earnings from operations comparisons, which are represented in nominal currency. As additional resource to help you navigate our Q1 results, we have once again published a slide deck on the investor relations page of our public website summarizing our key financial performance indicators.

Now turning to Kelly's first-quarter results. I'm pleased to report that Kelly delivered solid year-over-year growth on both the top and bottom lines. Revenue for the quarter was $1.3 billion, up roughly 5% year-over-year. We achieved earnings from operations of $15 million for the quarter, a 22% increase compared to the $12 million delivered in the first quarter last year.

Kelly's first-quarter earnings from continuing operations in nominal currency were $0.29 per share compared to earnings of $0.10 per share for the same period last year. Without the favorable impact of work opportunity credits, we grew year-over-year earnings per share by more than 100% in the first quarter. All told, we are pleased with Kelly's ability to deliver solid increases in revenue and earnings for the quarter.

Now let's take a closer look at the performance in each of our business segments, starting with the Americas. Let me point out that all of today's comparisons to Americas' Q4 revenue will exclude the impact of the 53rd week of operations we had last quarter.

Americas staffing had a strong first quarter, with year-over-year revenue growth of 3% and earnings growth of 17% compared to the same period last year, leading to incremental leverage of 56%. In Americas commercial, revenue was up 3% year-over-year for the quarter, an improvement from the 1% decrease we reported last quarter. Americas PT revenue for the first quarter grew 2% year-over-year, consistent with the 2% growth we reported in the fourth quarter. As has been our practice on our earnings call, we'll separately review