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Kelly revenue rises 1%; plans investment for growth

January 30 2014

Kelly Services Inc. (NASD: KELYA) reported revenue from services rose 0.8 percent in the fourth quarter to $1.39 billion. President and CEO Carl Camden also sees 2014 as a year of significant investment in long-term growth at the world’s seventh-largest staffing firm.

The fourth-quarter increase in service revenue got a boost from Kelly’s Europe, Middle East and Africa operations where revenue rose 9.3 percent to a total of $288.4 million.

Americas revenue fell 1.3 percent in the fourth quarter to $997.5 million. U.S. revenue fell 0.6 percent in the fourth quarter to $872.6 million. Revenue also fell 13.3 percent in Canada to $52.4 million.

Asia-Pacific operations posted a decline with revenue edging down 0.4 percent in the fourth quarter to $99.9 million.

The geographic revenue numbers include Kelly OCG revenue However, the company also breaks out global revenue for its Kelly OCG operations, which rose 23.6 percent to $140.1 million. OCG includes contingent workforce outsourcing (managed service solutions), business process outsourcing, recruitment process outsourcing, independent contractor compliance and other services.

The company’s gross margin improved to 16.7 percent in the fourth quarter from 16.2 percent in the year-ago quarter.

“Our performance exceeded our expectations, and we’re pleased with the strategic progress we’ve made despite uneven global economic conditions,” Camden said.

He also said he sees 2014 as a year of investment for the company’s long-term growth.

“The market is demanding access to specialized talent and more holistic workforce solutions, and we’re going to invest heavily in those areas,” Camden said. “We will hire niche recruiters, adapt our operating models and build our talent supply chain capabilities with speed and intensity in 2014.”

Shares in Kelly rose 1.85 percent in early afternoon trading.

Net income rose 93.7 percent in the fourth quarter to $17.2 million. The fourth quarter included a restructuring charge of $300,000. However, the fourth quarter of 2012 included an asset impairment charge of $3.1 million and a restructuring charge of $1.3 million.

Kelly Services, based in Troy, Mich., had a market cap of $904.7 million, according to Yahoo!

Full-year 2013 revenue fell 0.7 percent to $5.41 billion. Full-year net income rose 17.6 percent to $58.9 million.

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