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Kelly Services revenue rises 8%

May 12 2010

First-quarter revenue rose 8.4% at Kelly Services Inc. (NASD: KELYA) to $1.13 billion. The third-largest U.S. staffing firm, it had reported revenue of $1.04 billion in the first quarter of last year.

"The global economy and the labor markets are showing very encouraging signs of life," Kelly President and CEO Carl Camden said in a conference call with analysts Wednesday. "We believe that we are in the early stages of a credible, classic recovery and although the long-term pace is uncertain, the progress is steady and we're headed in an upward direction."

April marked the 11th consecutive month of increased demand for light industrial staffing, Camden said.

First-quarter revenue rose 13.5% on a year-over-year basis in Kelly's Americas commercial segment and rose 4.1% in its Americas professional and technical segment. However, Camden said revenue in the company's legal business was up 43% on a year-over-year basis.

Kelly's total U.S. revenue rose 10.1% in the first quarter to $710.2 million. Canadian revenue rose to $51.6 million, up 26.1% or 5.5% on constant currency.

The company's first-quarter gross margin narrowed to 15.9% from 16.8% in the year-ago quarter.

Kelly posted a net loss of $2.0 million in the first quarter compared with a net loss of $15.5 million in the first quarter of 2009.

The first quarter of 2010 included restructuring charges of $4.4 million; the 2009 quarter included restructuring and litigation charges of $8.1 million. Kelly's restructuring activities are now mostly complete, CFO Patricia Little said in the conference call with analysts.

On Tuesday, Kelly announced Temp Holdings Co. Ltd., a Japan-based staffing firm, acquired a 4.8% share in Kelly as part of a strategic alliance. For this story, click here.

Kelly Services Inc. (NASD: KELYA)
For the first quarter ended April 4, 2010, compared with the same period in 2009.
Revenue: $1.13 billion, +8.4%
Net loss: $2.0 million vs. net loss of $15.5 million


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