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Luch Design Bureau Luch Design Bureau (Ukrainian: Державне Київське конструкторське бюро «Луч»), located in Kyiv, Ukraine, is a major Ukrainian developer of components for the defense industry.The company is in close co-operation with the Artem holding company, also located in Kyiv. Artem is the main manufacturer of the models developed by the Luch Design Bureau.
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Risk Factors
KELLY SERVICES INC ITEM 1A RISK FACTORS Highly Competitive Markets The worldwide staffing services market is highly competitive with limited barriers to entry
Kelly competes in global, national, regional and local markets with full-service and specialized temporary staffing companies
In addition to Kelly, several competitors, including Adecco, Manpower, Randstad, Vedior, Spherion, CDI, and Allegis Group, have very substantial marketing and financial resources
Price competition in the staffing industry is significant, particularly for the provision of office clerical and light industrial personnel, and pricing pressures from competitors and customers are increasing
Kelly expects that the level of competition will remain high, which could limit Kelly’s ability to maintain or increase its market share or profitability
Fluctuations in General Economic Conditions Demand for staffing services is significantly affected by the general level of economic activity and unemployment in the United States and the other countries in which Kelly operates
When economic activity increases, temporary employees are often added before full-time employees are hired
However, as economic activity slows, many companies reduce their use of temporary employees before laying off full-time employees
Kelly may also experience more competitive pricing pressure during periods of economic downturn
Any significant economic downturn could have a material adverse impact on Kelly’s profitability
Ability to Attract and Retain Qualified Candidates Kelly depends upon its ability to attract qualified temporary personnel who possess the skills and experience necessary to meet the staffing requirements of its customers
Kelly must continually evaluate its base of available qualified personnel to keep pace with changing customer needs
Competition for individuals with proven professional skills is constant, and demand for such individuals is expected to remain very strong for the foreseeable future
There is always uncertainty whether qualified personnel will continue to be available to Kelly in sufficient numbers and on terms of employment acceptable to Kelly
______________________________________________________________________ [7]Table of Contents 7 Liabilities for Customer and Employee Actions Temporary staffing services providers employ and assign people generally in the workplace of other businesses
Attendant risks of such activities include possible claims of discrimination and harassment, employment of illegal aliens, violations of wage and hour requirements and errors and omissions of its temporary employees, particularly for the actions of professionals (eg, attorneys, accountants and scientists)
Misuse of customer proprietary information, misappropriation of funds, other criminal activity and other similar claims are also attendant risks
Although Kelly historically has not had any material losses resulting from these risks, there can be no assurance that Kelly will not experience such losses in the future or that Kelly’s insurance will remain available on reasonable terms or be sufficient in amount or scope to cover any such liability
Highly Dependent on Key Management Kelly is highly dependent on its management
Kelly believes that its success has depended to a significant extent upon the efforts and abilities of its Chairman, Terence E Adderley, and certain other key executives
Adderley or any of the other key executives could have a material adverse effect upon the Company
Government Regulations Government regulations may result in prohibition or restriction of certain types of employment services or the imposition of new or additional benefit, licensing or tax requirements that may reduce Kelly’s future earnings
Such legislative or regulatory changes could include, among others, the prohibition or restriction of certain types of employment services or the imposition of new or additional benefit, licensing or tax requirements with respect to the provision of employment services
There can be no assurance that Kelly will be able to increase the fees charged to its clients in a timely manner and in a sufficient amount to cover increased costs as a result of any of the foregoing
Foreign Currency Fluctuations Kelly’s operations are conducted in 29 countries and territories outside the US Kelly’s local operations are reported in the applicable foreign currencies and then translated into US dollars at the applicable foreign currency exchange rates for inclusion in Kelly’s consolidated financial statements
Exchange rates for currencies of these countries may fluctuate in relation to the US dollar and such fluctuations may have an adverse or favorable effect on Kelly’s operating results when translating foreign currencies into US dollars
Stock Price Fluctuations Kelly’s stock price can fluctuate as a result of a variety of factors, including factors listed in these “Risk Factors,” many of which are beyond Kelly’s control
These factors include actual or anticipated variations in quarterly operating results; announcements of new services by Kelly or its competitors; announcements relating to strategic relationships or acquisitions; changes in financial estimates by securities analysts; and changes in general economic conditions
Because of this, Kelly may fail to meet or exceed the expectations of its shareholders or of securities analysts, and its stock price could fluctuate as a result
Concentration of Ownership Terence E Adderley, Chairman, and certain trusts with respect to which he acts as trustee or co-trustee, control approximately 92dtta5prca of the outstanding shares of Kelly Class B common stock, which is the only class of stock entitled to voting rights
Adderley is therefore able to exercise voting control of the Company with respect to matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions