Ladies and gentlemen, good morning and welcome to Kelly Services Fourth Quarter 2016 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.

Thank you, John, and good morning everyone. Welcome to Kelly Services 2016 Q4 conference call. With me on the call today is Olivier Thirot, our CFO; and George Corona, our COO. Let me remind you that any comments made during this call, including the Q&A, may include forward-looking statements about our expectations for future performance. Actual results could differ materially from those suggested by our comments and we have no obligation to update the statements made on this call. Please refer to our SEC filings for a description of the risk factors that could influence the company's actual future performance. As we walk through our results this morning, let me point out that our year-over-year comparisons are represented in constant currency, due the volatility of foreign currency exchange rates and as an additional resource to help you navigate our Q4 results, we published a slide deck on the Investor Relations page of our public website summarizing our key financial performance indicators. All told, 2016 was a year of progress for Kelly. We grew gross profit delivered higher operating earnings, improved our conversion, added free cash flow, and delivered higher dividends to our shareholders. Our performance against these key indicators in 2016 confirms we are indeed operating as a more focused agile company committed to delivering growth. Before we dive into the details of today's results, let me point out that our year-over-year comparisons, especially in the fourth quarter are significantly impacted by two factors. First, our 2015 reported results included a 53rd week of revenue in the fourth quarter that is absent from 2016’s fourth quarter. And second, Kelly finalized our APAC joint venture in July 2016 and thus had no reported APAC staffing revenue in the second half of the year. I’ll discuss these impacts in more detail as…

Thank you, Carl. Revenue totaled $1.3 billion, down 10.8%, compared to the fourth quarter last year. Our reported revenue was impacted by several factors, including the deconsolidation of the APAC staffing business by 650 basis points. The inclusion of an additional week of revenue in Q4 2015, due to our 53-week year by 420 basis points, and finally by 70 basis points due to foreign exchange. Without these impacts, revenue growth for the fourth quarter would have been essentially flat on a constant currency basis very similar to what we have experienced in the previous two quarters, reflecting an improving, but still slow growth environment. Now, consistent with Carl, the remainder of my year-over-year comments are represented in constant currency. Staffing placement fees were down 22% year-over-year or down 7% after excluding the APAC staffing business from our 2015 results. We saw a 2% decline in EMEA and a 9% decline in fees in the Americas. This reflects the overall ongoing choppiness of the current environment. In constant currency, overall gross profit was down $20 million or 8%. After excluding the APAC staffing business from our 2015 results, gross profit was down $7 million. This is due primarily to the impact of the excellent week in our 2015 results. Our gross profit rate for the quarter was 17.5, 40 basis points when compared to the fourth quarter of 2015. Our GP rate improvement reflects the deconsolidation of our APAC staffing business, as well as an improving business mix and continued improvement of the GP rate for our OCG business, partially offset by lower perm fees. The overall pace of GP rate improvement is consistent with Q3 and has slowed as we have begun to anniversary the work started in 2015 to improve our U.S. staffing GP rate. SG&A expenses were…

Thank you, Olivier. Kelly entered 2016 with a firm commitment to increasing growth and profitability, and we exited the year having made progress on both of those fronts, even in uncertain environment. These financial results were complicated by a number of factors. The 53rd week, the APAC JV, restructuring charges, foreign exchange rates, and so on. Let me attempt to cut through the complexity and give you my perspective as the CEO. It was a good year in a tough time. When I look back, three key takeaways emerge. First, our growth strategy is yielding results. Even in the phase of the lower revenue, we delivered against key performance indicators in 2016. Our gross profit rate improved. We delivered higher year-over-year earnings from operations, and we improved our conversion rate of those gross profit dollars into operating earnings and we have demonstrated our focus to continued improving profitability. In addition, we maintained a strong balance sheet and we improved our free cash flow, while still increasing our quarterly dividend and ending the year debt free. Second, Kelly's U.S. staffing operations continues to deliver solid execution. We are seeing the benefit of increased focus on good cost control as we run this business more tightly and in line with growth expectations, and although we are keeping a watchful eye on soften demand in PT, we're ready to adapt as conditions change in the year ahead. And third, our expanded joint venture in APAC is now complete, establishing a dominant presence in the Asian staffing sector, while enabling us to focus on accelerated growth and our wholly-owned OCG segment in the region's outsourcing and consulting space. These progress points confirm that Kelly is operating as a more focused, adaptable, growth oriented organization, one that’s aligned with market trends and well positioned as a leader in the workforce solutions industry. Our OCG segment continues to respond the client’s complex demands for a more holistic talent supply chain management approach, and while our investments softened our growth rates a bit in the second half of 2016, we fully expect to see a return to double digit GP growth in the first half of 2017. As we reap the benefits of expanded large account relationships and significant new wins our sales teams secured last year. We remain confident in OCG's strategic direction and in the intentional investments we're making to increase top and bottom line growth in this segment. We believe Kelly is poised for continued progress in the year ahead. We move forward with confidence. We remain focused on profitable growth. We are proud to deliver that growth by connecting companies and talented people with excellence and integrity throughout the world. And again, I’d like to personally thank Kelly's teams for all their good work in 2016. And Olivier and I will now be happy to answer your questions, along with George Corona, our Chief Operating Officer. John, the call can now be open for questions.

[Operator Instructions] And we will go to the line of John Healy with Northcoast Research. Please go ahead.

Thank you. Carl I wanted to ask your expectations for the Asia JV in 2017, can you give us some color in terms of how you expect that to contribute to income and maybe the cadence in terms of how you’d expect that business to kind of flow as we move through 2017?

Yes, I think is Olivier said, the JV contribution to our earnings in 2017 we don't expect to be material. They are focused on growth and expansion of the services to stay a dominant HR services company in the APAC region; that is the strategic plan for the JV. It is what we expect, significant growth, significant activity to expand, but not significant or material improvement to earnings in 2017.

Yes, we see that as a growth engine and they need to continue to size market opportunities because it’s a high growth market. So, most of their GP increase is going to be invested in expanding further the business.

If you look at where talent markets are going, most rapidly around the world, lots of the fastest growing markets are in the APAC region for both commercial talent, but also for professional and technical talent, as well as outsourcing and project work. It’s a market that the JV is looking very hard to stay dominant in.

Great. That’s helpful. And I wanted to ask about two geographies, the U.S. market and the UK market. When you look at the U.S., could you help us think about how headcount and wage inflation is kind of contributing to numbers in the fourth quarter and maybe how you think that kind of fares in 2017, and then the UK business was a little bit weaker than I would have expected. Any thoughts there in terms of the Brexit impact, is that a customer just kind of going the other way, just hope to get some color there?

Going to your first question, which is - and this is George, the U.S. market, you know we started to see wage increases to start throughout the year, but they are not huge, they are in the 2% range in terms of what we're seeing, in terms of wage increases, but it is a return to wage increases that we hadn't had for several years and it appears to be continuing. When you look at overall headcount, overall headcount in the fourth quarter was down a bit particularly in PT as we have seen softer demand. So that’s kind of how it works out. From a UK perspective, we are not huge in the UK, and so we're not going to move with the market. There are some particular account fluctuations as we go through that market, but we don't see anything that particularly concerns us at this point. I wouldn't say Brexit had much to do with it, it’s just ongoing business.

Great. And then just last question, when you think about the free cash flow generation of the company, I feel like you generated probably close to about $1 per share this year when you isolated a few things, is that a reasonable expectation for 2017, do you think?

Well I mean - I think John you have seen, you know that we have started really focus on working capital and in our business, I mean working capital is all about DSO and we have made progress year after year, just if you look at 2016 average DSO we are down by about two days versus 2014 and that’s a driver, we're going to continue that, we're going to continue to keep an eye on our cash, and we plan to continue to improve our free cash flow generation, as you might have seen from 2014 to 2015, 2015 to 2016. That’s an area of focus. That’s one of the key indicators we look at carefully during the year.

Okay, thank you.

Thank you, John

[Operator Instructions] And allowing a few moments, Mr. Camden there no further questions coming in.

Very good, John. Thank you and thank you all who attended the call. Appreciate it.

Ladies and gentlemen, that does conclude your conference. Thank you for your participation. You may now disconnect.