KELYB Kelly Services Inc

Kelly Services (Nasdaq: KELYA) (Nasdaq: KELYB), a global leader in providing workforce solutions, today announced results for the third quarter of 2019.

Peter W. Quigley, President and Chief Executive Officer, announced revenue for the third quarter of 2019 totaled $1.3 billion, a 5.6% decrease, or 4.8% in constant currency, compared to the corresponding quarter of 2018.  Third quarter 2019 results include the impact of the January 2019 acquisitions of NextGen and Global Technology Associates, providers of specialty engineering talent to the U.S. telecommunications industry.  Excluding the recent acquisitions, adjusted revenue declined 8.2% in the third quarter, or 7.5% in constant currency.                Earnings from operations for the third quarter of 2019 totaled $17.1 million, compared to the $21.9 million reported for the third quarter of 2018.

Diluted loss per share in the third quarter of 2019 was $0.27 compared to earnings per share of $0.84 in the third quarter of 2018. Included in the loss per share in the third quarter of 2019 is the unfavorable impact of $0.70 due to the non-cash after-tax loss on our investment in Persol Holdings common stock compared to a gain of $0.28 in the third quarter of 2018.

"It was a challenging quarter as our newly restructured U.S. branch operations sought to capture high-value growth amidst a sluggish manufacturing sector and a tight labor market,” noted Quigley. “Despite pressure on the top line, we delivered improvements in GP rate, saw strong performance in our specialty acquisitions, and effectively contained costs. Our forward focus is on balancing the value-and-volume equation in our portfolio; managing expenses to align with revenue; and advancing our specialty talent solutions strategy.”

Kelly also reported that on November 5, 2019 its board of directors declared a dividend of $0.075 per share. The dividend is payable December 5, 2019 to shareholders of record as of the close of business on November 20, 2019.

In conjunction with its third quarter earnings release, Kelly Services has published a financial presentation on the Investor Relations page of our public website and 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 Internet:Kellyservices.com

Via the Telephone:
U.S.		1 800 288-9626
International		1 651 291-5254

The pass code is Kelly Services

This release contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties.  These factors include, but are not limited to, competitive market pressures including pricing and technology introductions and disruptions, changing market and economic conditions, our ability to achieve our business strategy, the risk of damage to our brand, the risk our intellectual property assets could be infringed upon or compromised, our ability to successfully develop new service offerings, our exposure to risks associated with services outside traditional staffing, including business process outsourcing, our increasing dependency on third parties for the execution of critical functions, the risks associated with past and future acquisitions, exposure to risks associated with investments in equity affiliates including PersolKelly Asia Pacific, material changes in demand from or loss of large corporate customers as well as changes in their buying practices, risks particular to doing business with the government or government contractors, risks associated with conducting business in foreign countries, including foreign currency fluctuations, the exposure to potential market and currency exchange risks relating to our investment in Persol Holdings, risks associated with violations of anti-corruption, trade protection and other laws and regulations, availability of qualified full-time employees, availability of temporary workers with appropriate skills required by customers, liabilities for employment-related claims and losses, including class action lawsuits and collective actions, risks arising from failure to preserve the privacy of information entrusted to us or to meet our obligations under global privacy laws, the risk of cyber attacks or other breaches of network or information technology security, our ability to sustain critical business applications through our key data centers, our ability to effectively implement and manage our information technology projects, our ability to maintain adequate financial and management processes and controls, risk of potential impairment charges triggered by adverse industry developments or operational circumstances, unexpected changes in claim trends on workers’ compensation, unemployment, disability and medical benefit plans, the impact of changes in laws and regulations (including federal, state and international tax laws), competition law risks, the risk of additional tax or unclaimed property liabilities in excess of our estimates, our ability to realize value from our tax credit and net operating loss carryforwards, our ability to maintain specified financial covenants in our bank facilities to continue to access credit markets, and other risks, uncertainties and 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, and we have no intention to update these statements.

About Kelly Services®Kelly Services, Inc. (Nasdaq: KELYA, KELYB) connects talented people to companies in need of their skills in areas including Science, Engineering, Education, Office, Contact Center, Light Industrial, and more. We’re always thinking about what’s next in the evolving world of work, and we help people ditch the script on old ways of thinking and embrace the value of all workstyles in the workplace. We directly employ more than 500,000 people around the world, and we connect thousands more with work through our global network of talent suppliers and partners in our outsourcing and consulting practice. Revenue in 2018 was $5.5 billion. Visit kellyservices.com and let us help with what’s next for you.

KLYA-FIN

ANALYST & MEDIA CONTACT:                                   James Polehna                                                                                      (248) 244-4586                                                                    james_polehna@kellyservices.com 

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED SEPTEMBER 29, 2019 AND SEPTEMBER 30, 2018
(UNAUDITED)
(In millions of dollars except per share data)
											%			CC %
		2019			2018			Change			Change			Change
Revenue from services	$	1,267.7		$	1,342.4		$	(74.7	)		(5.6	)	%	(4.8	)	%
Cost of services		1,040.0			1,103.3			(63.3	)		(5.7	)
Gross profit		227.7			239.1			(11.4	)		(4.8	)		(4.1	)
Selling, general and administrative expenses		210.6			217.2			(6.6	)		(3.0	)		(2.4	)
Earnings from operations		17.1			21.9			(4.8	)		(22.2	)
Gain (loss) on investment in Persol Holdings		(39.3	)		15.8			(55.1	)		NM
Other income (expense), net		(0.2	)		(0.7	)		0.5			75.5
Earnings (loss) before taxes and equity in net earnings (loss) of affiliate		(22.4	)		37.0			(59.4	)		NM
Income tax expense (benefit)		(12.8	)		5.9			(18.7	)		(314.8	)
Net earnings (loss) before equity in net earnings (loss) of affiliate		(9.6	)		31.1			(40.7	)		NM
Equity in net earnings (loss) of affiliate		(0.9	)		2.0			(2.9	)		NM
Net earnings (loss)	$	(10.5	)	$	33.1		$	(43.6	)		NM
Basic earnings (loss) per share	$	(0.27	)	$	0.84		$	(1.11	)		NM
Diluted earnings (loss) per share	$	(0.27	)	$	0.84		$	(1.11	)		NM
STATISTICS:
Permanent placement income (included in revenue from services)	$	15.1		$	18.4		$	(3.3	)		(18.3	)	%	(17.3	)	%
Gross profit rate		18.0		%	17.8		%	0.2		pts.
Conversion rate		7.5			9.2			(1.7	)
% Return:
Earnings from operations		1.3			1.6			(0.3	)
Net earnings (loss)		(0.8	)		2.5			(3.3	)
Effective income tax rate		57.3		%	16.1		%	41.2		pts.
Average number of shares outstanding (millions):
Basic		39.1			38.8
Diluted		39.1			38.9

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 39 WEEKS ENDED SEPTEMBER 29, 2019 AND SEPTEMBER 30, 2018
(UNAUDITED)
(In millions of dollars except per share data)
											%			CC %
		2019			2018			Change			Change			Change
Revenue from services	$	4,017.8		$	4,099.2		$	(81.4	)		(2.0	)	%	(0.7	)	%
Cost of services		3,294.5			3,381.4			(86.9	)		(2.6	)
Gross profit		723.3			717.8			5.5			0.8			1.9
Selling, general and administrative expenses		666.9			663.5			3.4			0.5			1.6
Gain on sale of assets		12.3			—			12.3			NM
Earnings from operations		68.7			54.3			14.4			26.3
Gain (loss) on investment in Persol Holdings		35.1			(13.0	)		48.1			NM
Other income (expense), net		(1.1	)		(1.8	)		0.7			38.2
Earnings (loss) before taxes and equity in net earnings (loss) of affiliate		102.7			39.5			63.2			159.2
Income tax expense (benefit)		6.3			(3.3	)		9.6			293.3
Net earnings (loss) before equity in net earnings (loss) of affiliate		96.4			42.8			53.6			125.0
Equity in net earnings (loss) of affiliate		(1.0	)		4.0			(5.0	)		NM
Net earnings	$	95.4		$	46.8		$	48.6			103.6
Basic earnings per share	$	2.42		$	1.20		$	1.22			101.7
Diluted earnings per share	$	2.41		$	1.19		$	1.22			102.5
STATISTICS:
Permanent placement income (included in revenue from services)	$	46.7		$	52.3		$	(5.6	)		(10.9	)	%	(8.6	)	%
Gross profit rate		18.0		%	17.5		%	0.5		pts.
Conversion rate		9.5			7.6			1.9
% Return:
Earnings from operations		1.7			1.3			0.4
Net earnings		2.4			1.1			1.3
Effective income tax rate		6.1		%	(8.2	)	%	14.3		pts.
Average number of shares outstanding (millions):
Basic		39.0			38.7
Diluted		39.2			38.8

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
		Third Quarter
									%			CC %
		2019				2018			Change			Change
Americas Staffing
Revenue from services	$	516.0			$	561.8			(8.1	)	%	(8.0	)	%
Gross profit		93.9				106.0			(11.3	)		(11.2	)
SG&A expenses excluding restructuring charges		89.9				91.2			(1.3	)		(1.2	)
Restructuring charges		(0.1	)			—			NM			NM
Total SG&A expenses		89.8				91.2			(1.4	)		(1.3	)
Earnings from operations		4.1				14.8			(72.6	)
Earnings from operations excluding restructuring charges		4.0				14.8			(73.1	)
Gross profit rate		18.2		%		18.9		%	(0.7	)	pts.
Conversion rate		4.3				14.0			(9.7	)
Conversion rate excluding restructuring charges		4.2				14.0			(9.8	)
Return on sales		0.8				2.6			(1.8	)
Return on sales excluding restructuring charges		0.8				2.6			(1.8	)
Global Talent Solutions
Revenue from services	$	502.5			$	507.6			(1.0	)	%	(0.8	)	%
Gross profit		99.6				97.3			2.3			2.8
Total SG&A expenses		71.2				73.2			(2.8	)		(2.4	)
Earnings from operations		28.4				24.1			18.0
Gross profit rate		19.8		%		19.2		%	0.6		pts.
Conversion rate		28.5				24.7			3.8
Return on sales		5.6				4.7			0.9
International Staffing
Revenue from services	$	252.9			$	277.2			(8.8	)	%	(5.8	)	%
Gross profit		34.7				36.4			(4.8	)		(1.8	)
Total SG&A expenses		31.2				31.6			(0.9	)		2.1
Earnings from operations		3.5				4.8			(29.6	)
Gross profit rate		13.7		%		13.2		%	0.5		pts.
Conversion rate		9.9				13.5			(3.6	)
Return on sales		1.4				1.8			(0.4	)

KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
		September Year to Date
									%			CC %
		2019				2018			Change			Change
Americas Staffing
Revenue from services	$	1,740.1			$	1,770.1			(1.7	)	%	(1.4	)	%
Gross profit		319.9				322.5			(0.8	)		(0.6	)
SG&A expenses excluding restructuring charges		278.6				273.8			1.7			2.0
Restructuring charges		5.6				—			NM			NM
Total SG&A expenses		284.2				273.8			3.8			4.1
Earnings from operations		35.7				48.7			(26.7	)
Earnings from operations excluding restructuring charges		41.3				48.7			(15.1	)
Gross profit rate		18.4		%		18.2		%	0.2		pts.
Conversion rate		11.2				15.1			(3.9	)
Conversion rate excluding restructuring charges		12.9				15.1			(2.2	)
Return on sales		2.1				2.8			(0.7	)
Return on sales excluding restructuring charges		2.4				2.8			(0.4	)
Global Talent Solutions
Revenue from services	$	1,509.4			$	1,494.1			1.0		%	1.4		%
Gross profit		299.7				281.8			6.3			7.0
Total SG&A expenses		220.2				224.0			(1.7	)		(1.0	)
Earnings from operations		79.5				57.8			37.5
Gross profit rate		19.9		%		18.9		%	1.0		pts.
Conversion rate		26.5				20.5			6.0
Return on sales		5.3				3.9			1.4
International Staffing
Revenue from services	$	779.9			$	848.5			(8.1	)	%	(3.0	)	%
Gross profit		105.4				115.4			(8.7	)		(3.6	)
Total SG&A expenses		95.1				99.2			(4.0	)		1.0
Earnings from operations		10.3				16.2			(36.9	)
Gross profit rate		13.5		%		13.6		%	(0.1	)	pts.
Conversion rate		9.7				14.1			(4.4	)
Return on sales		1.3				1.9			(0.6	)

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)
		September 29, 2019			December 30, 2018			September 30, 2018
Current Assets
Cash and equivalents	$	22.8		$	35.3		$	20.8
Trade accounts receivable, less allowances of
$12.2, $13.2, and $12.4, respectively		1,262.3			1,293.3			1,294.0
Prepaid expenses and other current assets		80.7			71.9			68.0
Total current assets		1,365.8			1,400.5			1,382.8
Noncurrent Assets
Property and equipment, net		82.7			86.3			85.0
Operating lease right-of-use assets		62.2			—			—
Deferred taxes		221.0			198.7			196.5
Goodwill		127.8			107.3			107.3
Investment in Persol Holdings		174.9			135.1			213.6
Investment in equity affiliate		120.4			121.3			120.3
Other assets		321.5			265.2			287.6
Total noncurrent assets		1,110.5			913.9			1,010.3
Total Assets	$	2,476.3		$	2,314.4		$	2,393.1
Current Liabilities
Short-term borrowings	$	17.5		$	2.2		$	8.1
Accounts payable and accrued liabilities		484.6			540.6			497.0
Operating lease liabilities		19.8			—			—
Accrued payroll and related taxes		285.3			266.0			304.7
Accrued workers' compensation and other claims		25.1			26.0			25.9
Income and other taxes		67.7			62.7			66.5
Total current liabilities		900.0			897.5			902.2
Noncurrent Liabilities
Operating lease liabilities		45.3			—			—
Accrued workers' compensation and other claims		48.7			50.5			50.2
Accrued retirement benefits		179.0			162.9			186.9
Other long-term liabilities		55.5			44.0			68.0
Total noncurrent liabilities		328.5			257.4			305.1
Stockholders' Equity
Common stock		40.1			40.1			40.1
Treasury stock		(21.3	)		(26.0	)		(27.3	)
Paid-in capital		22.3			24.4			25.0
Earnings invested in the business		1,224.6			1,138.1			1,165.0
Accumulated other comprehensive income (loss)		(17.9	)		(17.1	)		(17.0	)
Total stockholders' equity		1,247.8			1,159.5			1,185.8
Total Liabilities and Stockholders' Equity	$	2,476.3		$	2,314.4		$	2,393.1
STATISTICS:
Working Capital	$	465.8		$	503.0		$	480.6
Current Ratio		1.5			1.6			1.5
Debt-to-capital %		1.4	%		0.2	%		0.7	%
Global Days Sales Outstanding		59			55			58
Year-to-Date Free Cash Flow	$	60.4		$	35.8		$	15.4

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 39 WEEKS ENDED SEPTEMBER 29, 2019 AND SEPTEMBER 30, 2018
(UNAUDITED)
(In millions of dollars)
		2019			2018
Cash flows from operating activities:
Net earnings	$	95.4		$	46.8
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation and amortization		23.8			19.5
Operating lease asset amortization		16.9			—
Provision for bad debts		3.2			1.3
Stock-based compensation		4.7			6.7
(Gain) loss on investment in Persol Holdings		(35.1	)		13.0
(Gain) loss on sale of assets		(12.3	)		—
Equity in net (earnings) loss of PersolKelly Asia Pacific		1.0			(4.0	)
Other, net		(1.0	)		(1.0	)
Changes in operating assets and liabilities, net of acquisitions		(22.4	)		(49.0	)
Net cash from operating activities		74.2			33.3
Cash flows from investing activities:
Capital expenditures		(13.8	)		(17.9	)
Acquisition of companies, net of cash received		(86.4	)		—
Investment in equity securities		(1.0	)		(5.0	)
Loans to equity affiliate		(4.4	)		(2.9	)
Proceeds from sale of assets		13.8			—
Proceeds from company-owned life insurance		3.0			—
Other investing activities		—			(0.8	)
Net cash used in investing activities		(88.8	)		(26.6	)
Cash flows from financing activities:
Net change in short-term borrowings		15.2			(1.9	)
Financing lease payments		(0.4	)		—
Dividend payments		(8.9	)		(8.8	)
Payments of tax withholding for stock awards		(2.3	)		(6.3	)
Net cash from (used in) financing activities		3.6			(17.0	)
Effect of exchange rates on cash, cash equivalents and restricted cash		(0.5	)		(0.7	)
Net change in cash, cash equivalents and restricted cash		(11.5	)		(11.0	)
Cash, cash equivalents and restricted cash at beginning of period		40.1			36.9
Cash, cash equivalents and restricted cash at end of period	$	28.6		$	25.9

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
		Third Quarter (Americas, International and GTS)
								%			CC %
		2019			2018			Change			Change
Americas
United States	$	903.2		$	942.5			(4.2	)	%	(4.2	)	%
Canada		34.6			37.0			(6.5	)		(5.5	)
Mexico		32.4			32.3			0.6			3.1
Puerto Rico		18.8			28.2			(33.2	)		(33.2	)
Brazil		8.4			8.1			3.1			4.3
Total Americas		997.4			1,048.1			(4.8	)		(4.7	)
EMEA
France		59.7			68.8			(13.4	)		(9.4	)
Switzerland		50.6			53.8			(6.0	)		(5.8	)
Portugal		44.0			48.2			(8.5	)		(4.2	)
Russia		29.9			24.0			24.2			22.4
United Kingdom		24.9			28.1			(11.3	)		(6.2	)
Italy		18.5			18.3			0.9			5.6
Germany		11.5			13.8			(16.4	)		(12.5	)
Ireland		7.1			11.3			(36.7	)		(33.9	)
Other		16.6			21.8			(24.0	)		(19.5	)
Total EMEA		262.8			288.1			(8.8	)		(5.8	)
Total APAC		7.5			6.2			19.8			25.9
Total Kelly Services, Inc.	$	1,267.7		$	1,342.4			(5.6	)	%	(4.8	)	%

KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
		September Year to Date (Americas, International and GTS)
								%			CC %
		2019			2018			Change			Change
Americas
United States	$	2,913.4		$	2,898.4			0.5		%	0.5		%
Canada		100.8			107.6			(6.3	)		(3.3	)
Mexico		89.6			92.7			(3.3	)		(2.2	)
Puerto Rico		57.6			74.2			(22.3	)		(22.3	)
Brazil		25.1			26.6			(5.9	)		3.9
Total Americas		3,186.5			3,199.5			(0.4	)		(0.2	)
EMEA
France		188.6			212.7			(11.4	)		(5.8	)
Switzerland		150.0			156.3			(4.1	)		(1.8	)
Portugal		135.5			150.5			(9.9	)		(4.3	)
Russia		84.1			75.7			11.1			17.3
United Kingdom		81.6			85.6			(4.6	)		1.2
Italy		59.8			58.1			2.9			9.4
Germany		32.5			45.0			(27.8	)		(23.2	)
Ireland		28.1			34.3			(17.9	)		(12.7	)
Other		51.5			64.6			(20.3	)		(14.5	)
Total EMEA		811.7			882.8			(8.1	)		(3.0	)
Total APAC		19.6			16.9			16.0			23.9
Total Kelly Services, Inc.	$	4,017.8		$	4,099.2			(2.0	)	%	(0.7	)	%

KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
THIRD QUARTER
(UNAUDITED)
(In millions of dollars)
	2019																2018
Revenue from Services:	As Reported				Restructuring(2)				Acquisitions(3)				Adjusted				As Reported
Americas Staffing	$	516.0			$	—			$	(20.0	)		$	496.0			$	561.8
Global Talent Solutions	502.5				—				(15.8		)		486.7				507.6
International Staffing	252.9				—				—				252.9				277.2
Intersegment	(3.7		)		—				—				(3.7		)		(4.2		)
Total Company	$	1,267.7			$	—			$	(35.8	)		$	1,231.9			$	1,342.4
	2019																2018
Gross Profit:	As Reported				Restructuring(2)				Acquisitions(3)				Adjusted				As Reported
Americas Staffing	$	93.9			$	—			$	(6.6	)		$	87.3			$	106.0
Global Talent Solutions	99.6				—				(3.3		)		96.3				97.3
International Staffing	34.7				—				—				34.7				36.4
Intersegment	(0.5		)		—				—				(0.5		)		(0.6		)
Total Company	$	227.7			$	—			$	(9.9	)		$	217.8			$	239.1
	2019																2018
SG&A Expenses:	As Reported				Restructuring(2)				Acquisitions(3)				Adjusted				As Reported
Americas Staffing	$	89.8			$	0.1			$	(4.9	)		$	85.0			$	91.2
Global Talent Solutions	71.2				—				(2.0		)		69.2				73.2
International Staffing	31.2				—				—				31.2				31.6
Corporate	18.9				—				—				18.9				21.8
Intersegment	(0.5		)		—				—				(0.5		)		(0.6		)
Total Company	$	210.6			$	0.1			$	(6.9	)		$	203.8			$	217.2

	2019																				2018
Earnings from Operations:	As Reported				Restructuring(2)				Acquisitions(3)				Gain on sale of assets(4)				Adjusted				As Reported
Americas Staffing	$	4.1			$	(0.1	)		$	(1.7	)		$	—			$	2.3			$	14.8
Global Talent Solutions	28.4				—				(1.3		)		—				27.1				24.1
International Staffing	3.5				—				—				—				3.5				4.8
Corporate	(18.9		)		—				—				—				(18.9		)		(21.8		)
Total Company	$	17.1			$	(0.1	)		$	(3.0	)		$	—			$	14.0			$	21.9

KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
SEPTEMBER YEAR TO DATE
(UNAUDITED)
(In millions of dollars)
	2019																2018
Revenue from Services:	As Reported				Restructuring(2)				Acquisitions(3)				Adjusted				As Reported
Americas Staffing	$	1,740.1			$	—			$	(62.9	)		$	1,677.2			$	1,770.1
Global Talent Solutions	1,509.4				—				(48.2		)		1,461.2				1,494.1
International Staffing	779.9				—				—				779.9				848.5
Intersegment	(11.6		)		—				—				(11.6		)		(13.5		)
Total Company	$	4,017.8			$	—			$	(111.1	)		$	3,906.7			$	4,099.2
	2019																2018
Gross Profit:	As Reported				Restructuring(2)				Acquisitions(3)				Adjusted				As Reported
Americas Staffing	$	319.9			$	—			$	(19.8	)		$	300.1			$	322.5
Global Talent Solutions	299.7				—				(10.3		)		289.4				281.8
International Staffing	105.4				—				—				105.4				115.4
Intersegment	(1.7		)		—				—				(1.7		)		(1.9		)
Total Company	$	723.3			$	—			$	(30.1	)		$	693.2			$	717.8
	2019																2018
SG&A Expenses:	As Reported				Restructuring(2)				Acquisitions(3)				Adjusted				As Reported
Americas Staffing	$	284.2			$	(5.6	)		$	(14.9	)		$	263.7			$	273.8
Global Talent Solutions	220.2				—				(5.7		)		214.5				224.0
International Staffing	95.1				—				—				95.1				99.2
Corporate	69.1				—				—				69.1				68.4
Intersegment	(1.7		)		—				—				(1.7		)		(1.9		)
Total Company	$	666.9			$	(5.6	)		$	(20.6	)		$	640.7			$	663.5

	2019																				2018
Earnings from Operations:	As Reported				Restructuring(2)				Acquisitions(3)				Gain on sale of assets(4)				Adjusted				As Reported
Americas Staffing	$	35.7			$	5.6			$	(4.9	)		$	—			$	36.4			$	48.7
Global Talent Solutions	79.5				—				(4.6		)		—				74.9				57.8
International Staffing	10.3				—				—				—				10.3				16.2
Corporate	(56.8		)		—				—				(12.3		)		(69.1		)		(68.4		)
Total Company	$	68.7			$	5.6			$	(9.5	)		$	(12.3	)		$	52.5			$	54.3

KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES (continued)
(UNAUDITED)
(In millions of dollars except per share data)
		Third Quarter								September Year to Date
		2019				2018				2019				2018
Income tax expense (benefit)		$	(12.8	)		$	5.9			$	6.3			$	(3.3	)
Taxes on investment in Persol Holdings(1)		12.1				(4.9		)		(10.7		)		4.0
Taxes on restructuring charges(2)		—				—				1.5				—
Taxes on acquisitions(3)		(0.8		)		—				(2.4		)		—
Taxes on gain on sale of assets(4)		—				—				(3.3		)		—
Adjusted income tax expense (benefit)		$	(1.5	)		$	1.0			$	(8.6	)		$	0.7
		Third Quarter								September Year to Date
		2019				2018				2019				2018
Net earnings (loss)		$	(10.5	)		$	33.1			$	95.4			$	46.8
(Gain) loss on investment in Persol Holdings, net of taxes(1)		27.2				(10.9		)		(24.4		)		9.0
Restructuring charges, net of taxes(2)		(0.1		)		—				4.1				—
Net earnings from acquisitions(3)		(2.2		)		—				(7.1		)		—
Gain on sale of assets, net of taxes(4)		—				—				(9.0		)		—
Adjusted net earnings		$	14.4			$	22.2			$	59.0			$	55.8
		Third Quarter								September Year to Date
		2019				2018				2019				2018
		Per Share								Per Share
Net earnings (loss)		$	(0.27	)		$	0.84			$	2.41			$	1.19
(Gain) loss on investment in Persol Holdings, net of taxes(1)		0.70				(0.28		)		(0.62		)		0.23
Restructuring charges, net of taxes(2)		—				—				0.11				—
Acquisitions, net of taxes(3)		(0.05		)		—				(0.18		)		—
Gain on sale of assets, net of taxes(4)		—				—				(0.23		)		—
Adjusted net earnings		$	0.37			$	0.56			$	1.50			$	1.42

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.

KELLY SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP MEASURES(UNAUDITED)

Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the 2019 and 2018 gains and losses on the investment in Persol Holdings, the 2019 restructuring charges, the 2019 acquisitions, and the 2019 gain on sale of assets are useful to understand the Company's fiscal 2019 financial performance and increases comparability.  Specifically, Management believes that removing the impact of these items allows for a meaningful comparison of current period operating performance with the operating results of prior periods.  Additionally, the Company does not acquire businesses on a predictable cycle and the terms of each acquisition are unique and may vary significantly.  Management also believes that such measures are used by those analyzing performance of companies in the staffing industry to compare current performance to prior periods and to assess future performance.

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)  The gains and losses on the investment in Persol Holdings represent the change in fair value of the investment during the period presented and the related tax expense and benefit.

(2)  Restructuring charges in 2019 represent severance costs primarily related to U.S. branch-based staffing operations.

(3)  NextGen and GTA were acquired on January 2, 2019, and were included in the reported results of operations of Americas Staffing and GTS segments, respectively, from the date of acquisition.

(4) Gain on sale of assets primarily represents the excess of the proceeds over the cost of an unused parcel of land located near the Company headquarters sold during the second quarter of 2019.