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Kelly Services(R) Reports 3rd Quarter 2012 Results


Kelly Services(R) Reports 3rd Quarter 2012 Results

TROY, MI -- (Marketwire) -- 11/07/12 -- Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a leader in providing workforce solutions, today announced results for the third quarter of 2012.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the third quarter of 2012 totaled $1.4 billion, a 4% decrease compared to the corresponding quarter of 2011.

Earnings from operations for the third quarter of 2012 totaled $24.0 million, compared to $22.1 million reported for the third quarter of 2011.

Diluted earnings per share from continuing operations in the third quarter of 2012 were $0.43 compared to $0.52 per share in the third quarter of 2011.

Commenting on the third quarter results, Camden stated, "Amidst challenging global economic conditions and a sluggish U.S. labor market, Kelly(R) delivered solid third quarter results. We are very pleased that we were able to improve gross profit, keep expenses in line, and create leverage to improve our operating earnings by nearly 9 percent year-over-year, despite a deceleration in revenue."

Kelly also reported that on November 6, its board of directors declared a dividend of $0.05 per share. The dividend is payable December 7, 2012 to shareholders of record as of the close of business on November 19, 2012.

In conjunction with its third quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on November 7, to review the results and answer questions. The call may be accessed in one of the following ways:

Via the Telephone:

U.S. 1 800 288-9626 International 1 651 291-5254

The pass code is Kelly Services

Via the Internet:

The call is also available via the internet through the Kelly Services website: www.kellyservices.com

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, changing market and economic conditions, our ability to achieve our business strategy, including our ability to successfully expand into new markets and service lines, material changes in demand from or loss of large corporate customers, impairment charges triggered by adverse industry or market developments, unexpected termination of customer contracts, availability of temporary workers with appropriate skills required by customers, liabilities for employment-related claims and losses, including class action lawsuits and collective actions, liability for improper disclosure of sensitive or private employee information, unexpected changes in claim trends on workers' compensation and benefit plans, our ability to maintain specified financial covenants in our bank facilities, our ability to access credit markets and continued availability of financing for funding working capital, our ability to sustain critical business applications through our key data centers, our ability to effectively implement and manage our information technology programs, our ability to retain the services of our senior management, local management and field personnel, the impact of changes in laws and regulations (including federal, state and international tax laws and the expiration of the U.S. work opportunity credit program), the net financial impact of the Patient Protection and Affordable Care Act on our business, risks associated with conducting business in foreign countries, including foreign currency fluctuations, 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(R) Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB) is a leader in providing workforce solutions. Kelly(R) offers a comprehensive array of outsourcing and consulting services as well as world-class staffing on a temporary, temporary-to-hire, and direct-hire basis. Serving clients around the globe, Kelly provides employment to more than 550,000 employees annually. Revenue in 2011 was $5.6 billion. Visit kellyservices.com and connect with us on Facebook, LinkedIn, and Twitter. Download The Talent Project, a free iPad app by Kelly Services.


 
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                    CONSOLIDATED STATEMENTS OF EARNINGS                     
       FOR THE 13 WEEKS ENDED SEPTEMBER 30, 2012 AND OCTOBER 2, 2011        
                                (UNAUDITED)                                 
              (In millions of dollars except per share data)                
                                                                            
                                    2012       2011      Change   % Change  
                                 ---------  ---------  ---------  --------  
                                                                            
Revenue from services            $ 1,354.2  $ 1,409.8  $   (55.6)     (3.9)%
                                                                            
Cost of services                   1,126.7    1,184.1      (57.4)     (4.8) 
                                 ---------  ---------  ---------  --------  
                                                                            
Gross profit                         227.5      225.7        1.8       0.7  
                                                                            
Selling, general and                                                        
 administrative expenses             203.5      203.6       (0.1)     (0.1) 
                                 ---------  ---------  ---------  --------  
                                                                            
Earnings from operations              24.0       22.1        1.9       8.5  
                                                                            
Other (expense) income, net           (0.7)       1.0       (1.7)   (177.3) 
                                 ---------  ---------  ---------  --------  
                                                                            
Earnings from continuing                                                    
 operations before taxes              23.3       23.1        0.2       1.0  
                                                                            
Income taxes                           6.7        3.4        3.3     100.6  
                                 ---------  ---------  ---------  --------  
                                                                            
Earnings from continuing                                                    
 operations                           16.6       19.7       (3.1)    (16.0) 
                                                                            
Earnings from discontinued                                                  
 operations, net of tax                  -          -          -        NM  
                                 ---------  ---------  ---------  --------  
                                                                            
Net earnings                     $    16.6  $    19.7  $    (3.1)    (15.9)%
                                 =========  =========  =========  ========  
                                                                            
Basic earnings per share on                                                 
 common stock                                                               
  Earnings from continuing                                                  
   operations                    $    0.43  $    0.52  $   (0.09)    (17.3)%
  Earnings from discontinued                                                
   operations                            -          -          -        NM  
  Net earnings                        0.43       0.52      (0.09)    (17.3) 
                                                                            
Diluted earnings per share on                                               
 common stock                                                               
  Earnings from continuing                                                  
   operations                    $    0.43  $    0.52  $   (0.09)    (17.3)%
  Earnings from discontinued                                                
   operations                            -          -          -        NM  
  Net earnings                        0.43       0.52      (0.09)    (17.3) 
                                                                            
                                 ---------  ---------  ---------  --------  
                                                                            
STATISTICS:                                                                 
                                                                            
Gross profit rate                     16.8%      16.0%  0.8 pts.            
                                                                            
Selling, general and                                                        
 administrative expenses:                                                   
  % of revenue                        15.0       14.4        0.6            
  % of gross profit                   89.4       90.2       (0.8)           
                                                                            
% Return:                                                                   
  Earnings from operations             1.8        1.6        0.2            
  Earnings from continuing                                                  
   operations before taxes             1.7        1.6        0.1            
  Earnings from continuing                                                  
   operations                          1.2        1.4       (0.2)           
  Net earnings                         1.2        1.4       (0.2)           
                                                                            
Effective income tax rate                                   14.3            
                                      28.9%      14.6%      pts.            
                                                                            
Average number of shares                                                    
 outstanding                                                                
(millions):                                                                 
  Basic                               37.1       36.8                       
  Diluted                             37.1       36.8                       
                                                                            
Shares adjusted for nonvested                                               
 restricted awards                                                          
(millions):                                                                 
  Basic                               38.3       37.8                       
  Diluted                             38.3       37.8                       
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                    CONSOLIDATED STATEMENTS OF EARNINGS                     
       FOR THE 39 WEEKS ENDED SEPTEMBER 30, 2012 AND OCTOBER 2, 2011        
                                (UNAUDITED)                                 
              (In millions of dollars except per share data)                
                                                                            
                                    2012       2011      Change   % Change  
                                 ---------  ---------  ---------  --------  
                                                                            
Revenue from services            $ 4,075.1  $ 4,154.7  $   (79.6)     (1.9)%
                                                                            
Cost of services                   3,400.7    3,495.7      (95.0)     (2.7) 
                                 ---------  ---------  ---------  --------  
                                                                            
Gross profit                         674.4      659.0       15.4       2.3  
                                                                            
Selling, general and                                                        
 administrative expenses             611.9      614.0       (2.1)     (0.4) 
                                 ---------  ---------  ---------  --------  
                                                                            
Earnings from operations              62.5       45.0       17.5      38.8  
                                                                            
Other expense, net                    (1.8)      (0.1)      (1.7)       NM  
                                 ---------  ---------  ---------  --------  
                                                                            
Earnings from continuing                                                    
 operations before taxes              60.7       44.9       15.8      35.2  
                                                                            
Income taxes                          19.9        4.1       15.8     385.0  
                                 ---------  ---------  ---------  --------  
                                                                            
Earnings from continuing                                                    
 operations                           40.8       40.8          -         -  
                                                                            
Earnings (loss) from                                                        
 discontinued operations, net of                                            
 tax                                   0.4       (1.2)       1.6        NM  
                                 ---------  ---------  ---------  --------  
                                                                            
Net earnings                     $    41.2  $    39.6  $     1.6       4.1% 
                                 =========  =========  =========  ========  
                                                                            
Basic earnings (loss) per share                                             
 on common stock                                                            
  Earnings from continuing                                                  
   operations                    $    1.07  $    1.09  $   (0.02)     (1.8)%
  Earnings (loss) from                                                      
   discontinued operations            0.01      (0.03)      0.04        NM  
  Net earnings                        1.09       1.05       0.04       3.8  
                                                                            
Diluted earnings (loss) per                                                 
 share on common stock                                                      
  Earnings from continuing                                                  
   operations                    $    1.07  $    1.09  $   (0.02)     (1.8)%
  Earnings (loss) from                                                      
   discontinued operations            0.01      (0.03)      0.04        NM  
  Net earnings                        1.09       1.05       0.04       3.8  
                                                                            
                                 ---------  ---------  ---------  --------  
                                                                            
STATISTICS:                                                                 
                                                                            
Gross profit rate                     16.5%      15.9%  0.6 pts.            
                                                                            
Selling, general and                                                        
 administrative expenses:                                                   
  % of revenue                        15.0       14.8        0.2            
  % of gross profit                   90.7       93.2       (2.5)           
                                                                            
% Return:                                                                   
  Earnings from operations             1.5        1.1        0.4            
  Earnings from continuing                                                  
   operations before taxes             1.5        1.1        0.4            
  Earnings from continuing                                                  
   operations                          1.0        1.0        0.0            
  Net earnings                         1.0        1.0        0.0            
                                                                            
Effective income tax rate                                   23.7            
                                      32.8%       9.1%      pts.            
                                                                            
Average number of shares                                                    
 outstanding                                                                
(millions):                                                                 
  Basic                               37.0       36.8                       
  Diluted                             37.0       36.8                       
                                                                            
Shares adjusted for nonvested                                               
 restricted awards                                                          
(millions):                                                                 
  Basic                               38.0       37.6                       
  Diluted                             38.0       37.6                       
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                     RESULTS OF OPERATIONS BY SEGMENT                       
                                (UNAUDITED)                                 
                         (In millions of dollars)                           
                                                                            
                                              Third Quarter                 
                               -------------------------------------------  
                                                                  Constant  
                                                                  Currency  
                                  2012       2011      Change      Change   
                               ---------  ---------  ----------   --------  
Americas Commercial                                                         
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $   642.2  $   661.7        (2.9)%     (2.0)%
  Fee-based income                   4.4        3.2        36.9       40.8  
  Gross profit                      96.4       93.6         3.0        4.0  
                                                                            
  Gross profit rate                 15.0%      14.2%   0.8 pts.             
                                                                            
Americas PT                                                                 
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $   261.6  $   250.8         4.3%       4.4% 
  Fee-based income                   3.7        3.2        13.6       13.7  
  Gross profit                      40.9       37.9         7.9        8.0  
                                                                            
  Gross profit rate                 15.6%      15.1%   0.5 pts.             
                                                                            
Total Americas                                                              
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $   903.8  $   912.5        (1.0)%     (0.3)%
  Fee-based income                   8.1        6.4        25.2       27.1  
  Gross profit                     137.3      131.5         4.4        5.1  
  Total SG&A expenses              101.5       97.7         4.0        4.9  
  Earnings from operations          35.8       33.8         5.8             
                                                                            
  Gross profit rate                 15.2%      14.4%   0.8 pts.             
  Expense rates:                                                            
    % of revenue                    11.2       10.7         0.5             
    % of gross profit               73.9       74.2        (0.3)            
  Operating margin                   4.0        3.7         0.3             
                                                                            
EMEA Commercial                                                             
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $   214.5  $   261.0       (17.8)%     (8.0)%
  Fee-based income                   5.2        6.5       (20.3)     (11.7) 
  Gross profit                      33.4       42.1       (20.8)     (11.2) 
                                                                            
  Gross profit rate                 15.6%      16.1% (0.5) pts.             
                                                                            
EMEA PT                                                                     
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $    41.5  $    46.8       (11.3)%     (0.8)%
  Fee-based income                   4.1        5.3       (23.5)     (15.3) 
  Gross profit                      10.5       12.7       (17.0)      (7.5) 
                                                                            
  Gross profit rate                 25.4%      27.1% (1.7) pts.             
                                                                            
Total EMEA                                                                  
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $   256.0  $   307.8       (16.8)%     (6.9)%
  Fee-based income                   9.3       11.8       (21.8)     (13.3) 
  Gross profit                      43.9       54.8       (19.9)     (10.3) 
  SG&A expenses excluding                                                   
   restructuring charges            40.0       47.3       (15.6)            
  Restructuring charges                -       (0.6)     (100.0)            
  Total SG&A expenses               40.0       46.7       (14.5)      (4.6) 
  Earnings from operations           3.9        8.1       (51.3)            
  Earnings from operations                                                  
   excluding restructuring                                                  
   charges                           3.9        7.5       (47.5)            
                                                                            
  Gross profit rate                 17.1%      17.8% (0.7) pts.             
  Expense rates (excluding                                                  
   restructuring charges):                                                  
    % of revenue                    15.6       15.4         0.2             
    % of gross profit               91.1       86.4         4.7             
  Operating margin (excluding                                               
   restructuring charges)            1.5        2.4        (0.9)            
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                     RESULTS OF OPERATIONS BY SEGMENT                       
                                (UNAUDITED)                                 
                         (In millions of dollars)                           
                                                                            
                                               Third Quarter                
                                 -----------------------------------------  
                                                                  Constant  
                                                                  Currency  
                                    2012       2011     Change     Change   
                                 ---------  ---------  --------   --------  
APAC Commercial                                                             
  Revenue from services                                                     
   (including fee-based income)  $    85.7  $   101.8     (15.8)%    (13.2)%
  Fee-based income                     2.9        3.8     (24.8)     (20.4) 
  Gross profit                        12.8       14.7     (13.1)     (10.2) 
                                                                            
  Gross profit rate                   14.9%      14.4% 0.5 pts.             
                                                                            
APAC PT                                                                     
  Revenue from services                                                     
   (including fee-based income)  $    14.3  $    14.1       1.3%       3.5% 
  Fee-based income                     4.8        4.2      13.7       15.5  
  Gross profit                         6.2        5.6       9.1       11.1  
                                                                            
  Gross profit rate                   43.0%      39.9% 3.1 pts.             
                                                                            
Total APAC                                                                  
  Revenue from services                                                     
   (including fee-based income)  $   100.0  $   115.9     (13.7)%    (11.1)%
  Fee-based income                     7.7        8.0      (4.5)      (1.5) 
  Gross profit                        19.0       20.3      (6.9)      (4.2) 
  Total SG&A expenses                 18.8       19.8      (4.9)      (2.2) 
  Earnings from operations             0.2        0.5     (78.0)            
                                                                            
  Gross profit rate                   18.9%      17.6% 1.3 pts.             
  Expense rates:                                                            
    % of revenue                      18.8       17.1       1.7             
    % of gross profit                 99.3       97.2       2.1             
  Operating margin                     0.1        0.5      (0.4)            
                                                                            
OCG                                                                         
  Revenue from services                                                     
   (including fee-based income)  $   104.7  $    80.7      29.7%      30.9% 
  Fee-based income                    13.2       10.5      25.3       29.1  
  Gross profit                        28.2       19.8      42.8       45.4  
  Total SG&A expenses                 24.2       20.0      20.5       23.6  
  Earnings from operations             4.0       (0.2)       NM             
                                                                            
  Gross profit rate                   27.0%      24.5% 2.5 pts.             
  Expense rates:                                                            
    % of revenue                      23.1       24.9      (1.8)            
    % of gross profit                 85.5      101.3     (15.8)            
  Operating margin                     3.9       (0.3)      4.2             
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                     RESULTS OF OPERATIONS BY SEGMENT                       
                                (UNAUDITED)                                 
                         (In millions of dollars)                           
                                                                            
                                          September Year to Date            
                               -------------------------------------------  
                                                                  Constant  
                                                                  Currency  
                                  2012       2011      Change      Change   
                               ---------  ---------  ----------   --------  
Americas Commercial                                                         
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $ 1,980.1  $ 1,985.3        (0.3)%      0.7% 
  Fee-based income                  12.1        8.8        36.9       40.4  
  Gross profit                     292.1      278.9         4.7        5.6  
                                                                            
  Gross profit rate                 14.8%      14.1%   0.7 pts.             
                                                                            
Americas PT                                                                 
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $   774.1  $   739.1         4.7%       4.9% 
  Fee-based income                  11.3        9.7        16.3       16.5  
  Gross profit                     120.8      109.8         9.9       10.1  
                                                                            
  Gross profit rate                 15.6%      14.9%   0.7 pts.             
                                                                            
Total Americas                                                              
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $ 2,754.2  $ 2,724.4         1.1%       1.8% 
  Fee-based income                  23.4       18.5        26.1       27.8  
  Gross profit                     412.9      388.7         6.2        6.9  
  Total SG&A expenses              303.4      296.3         2.4        3.2  
  Earnings from operations         109.5       92.4        18.3             
                                                                            
  Gross profit rate                 15.0%      14.3%   0.7 pts.             
  Expense rates:                                                            
    % of revenue                    11.0       10.9         0.1             
    % of gross profit               73.5       76.2        (2.7)            
  Operating margin                   4.0        3.4         0.6             
                                                                            
EMEA Commercial                                                             
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $   641.2  $   751.3       (14.7)%     (7.7)%
  Fee-based income                  17.5       18.9        (7.5)      (0.1) 
  Gross profit                     101.1      121.6       (16.9)      (9.9) 
                                                                            
  Gross profit rate                 15.8%      16.2% (0.4) pts.             
                                                                            
EMEA PT                                                                     
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $   125.3  $   134.0        (6.4)%      1.2% 
  Fee-based income                  13.1       15.0       (12.8)      (6.2) 
  Gross profit                      32.7       36.1        (9.3)      (2.0) 
                                                                            
  Gross profit rate                 26.1%      26.9% (0.8) pts.             
                                                                            
Total EMEA                                                                  
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $   766.5  $   885.3       (13.4)%     (6.3)%
  Fee-based income                  30.6       33.9        (9.8)      (2.8) 
  Gross profit                     133.8      157.7       (15.2)      (8.1) 
  SG&A expenses excluding                                                   
   restructuring charges           126.4      140.5       (10.2)            
  Restructuring charges             (2.2)       2.8      (177.7)            
  Total SG&A expenses              124.2      143.3       (13.4)      (6.6) 
  Earnings from operations           9.6       14.4       (32.7)            
  Earnings from operations                                                  
   excluding restructuring                                                  
   charges                           7.4       17.2       (56.4)            
                                                                            
  Gross profit rate                 17.5%      17.8% (0.3) pts.             
  Expense rates (excluding                                                  
   restructuring charges):                                                  
    % of revenue                    16.5       15.9         0.6             
    % of gross profit               94.4       89.2         5.2             
  Operating margin (excluding                                               
   restructuring charges)            1.0        1.9        (0.9)            
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                     RESULTS OF OPERATIONS BY SEGMENT                       
                                (UNAUDITED)                                 
                         (In millions of dollars)                           
                                                                            
                                          September Year to Date            
                               -------------------------------------------  
                                                                  Constant  
                                                                  Currency  
                                  2012       2011      Change      Change   
                               ---------  ---------  ----------   --------  
APAC Commercial                                                             
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $   258.3  $   303.8       (15.0)%    (13.4)%
  Fee-based income                   9.3       11.0       (14.9)     (11.9) 
  Gross profit                      38.4       42.5        (9.6)      (8.0) 
                                                                            
  Gross profit rate                 14.9%      14.0%   0.9 pts.             
                                                                            
APAC PT                                                                     
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $    39.9  $    39.1         2.1%       3.8% 
  Fee-based income                  12.9       12.2         5.2        5.6  
  Gross profit                      16.7       16.2         2.8        3.6  
                                                                            
  Gross profit rate                 41.8%      41.5%   0.3 pts.             
                                                                            
Total APAC                                                                  
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $   298.2  $   342.9       (13.0)%    (11.5)%
  Fee-based income                  22.2       23.2        (4.3)      (2.6) 
  Gross profit                      55.1       58.7        (6.2)      (4.8) 
  Total SG&A expenses               57.5       59.1        (2.8)      (1.3) 
  Earnings from operations          (2.4)      (0.4)     (440.3)            
                                                                            
  Gross profit rate                 18.5%      17.1%   1.4 pts.             
  Expense rates:                                                            
    % of revenue                    19.3       17.2         2.1             
    % of gross profit              104.4      100.8         3.6             
  Operating margin                  (0.8)      (0.1)       (0.7)            
                                                                            
OCG                                                                         
  Revenue from services                                                     
   (including fee-based                                                     
   income)                     $   282.8  $   222.9        26.8%      27.9% 
  Fee-based income                  37.6       28.7        31.1       33.9  
  Gross profit                      75.0       55.8        34.3       36.4  
  Total SG&A expenses               69.6       59.2        17.3       19.5  
  Earnings from operations           5.4       (3.4)         NM             
                                                                            
  Gross profit rate                 26.5%      25.1%   1.4 pts.             
  Expense rates:                                                            
    % of revenue                    24.6       26.6        (2.0)            
    % of gross profit               92.8      106.2       (13.4)            
  Operating margin                   1.9       (1.6)        3.5             
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                        CONSOLIDATED BALANCE SHEETS                         
                                (UNAUDITED)                                 
                          (In millions of dollars)                          
                                                                            
                                September 30,    January 1,     October 2,  
                                     2012           2012           2011     
                                -------------  -------------  ------------- 
Current Assets                                                              
  Cash and equivalents          $        70.3  $        81.0  $        73.5 
  Trade accounts receivable,                                                
   less allowances of $11.9,                                                
   $13.4 and $13.7,                                                         
   respectively                       1,018.8          944.9          939.9 
  Prepaid expenses and other                                                
   current assets                        62.9           50.6           53.7 
  Deferred taxes                         38.1           38.2           27.0 
                                -------------  -------------  ------------- 
                                                                            
    Total current assets              1,190.1        1,114.7        1,094.1 
                                                                            
Property and Equipment, Net              90.4           90.6           91.6 
                                                                            
Noncurrent Deferred Taxes                88.8           94.1           89.6 
                                                                            
Goodwill, Net                            91.2           90.2           67.3 
                                                                            
Other Assets                            174.8          152.1          145.6 
                                -------------  -------------  ------------- 
                                                                            
Total Assets                    $     1,635.3  $     1,541.7  $     1,488.2 
                                =============  =============  ============= 
                                                                            
Current Liabilities                                                         
  Short-term borrowings         $        83.6  $        96.3  $        79.0 
  Accounts payable and accrued                                              
   liabilities                          279.1          237.2          227.7 
  Accrued payroll and related                                               
   taxes                                269.9          271.4          283.0 
  Accrued insurance                      28.8           31.5           31.4 
  Income and other taxes                 62.7           61.3           60.0 
                                -------------  -------------  ------------- 
                                                                            
    Total current liabilities           724.1          697.7          681.1 
                                                                            
Noncurrent Liabilities                                                      
  Accrued insurance                      48.9           53.5           53.7 
  Accrued retirement benefits           108.5           91.1           82.8 
  Other long-term liabilities            25.1           23.7           13.6 
                                -------------  -------------  ------------- 
                                                                            
    Total noncurrent                                                        
     liabilities                        182.5          168.3          150.1 
                                                                            
Stockholders' Equity                                                        
  Common stock                           40.1           40.1           40.1 
  Treasury stock                        (63.1)         (66.9)         (68.6)
  Paid-in capital                        27.7           28.8           29.3 
  Earnings invested in the                                                  
   business                             693.0          657.5          635.3 
  Accumulated other                                                         
   comprehensive income                  31.0           16.2           20.9 
                                -------------  -------------  ------------- 
                                                                            
    Total stockholders' equity          728.7          675.7          657.0 
                                -------------  -------------  ------------- 
                                                                            
Total Liabilities and                                                       
 Stockholders' Equity           $     1,635.3  $     1,541.7  $     1,488.2 
                                =============  =============  ============= 
                                                                            
                                -------------  -------------  ------------- 
                                                                            
STATISTICS:                                                                 
  Working Capital               $       466.0  $       417.0  $       413.0 
  Current Ratio                           1.6            1.6            1.6 
  Debt-to-capital %                      10.3%          12.5%          10.7%
  Global Days Sales Outstanding            54             52             52 
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                   CONSOLIDATED STATEMENTS OF CASH FLOWS                    
       FOR THE 39 WEEKS ENDED SEPTEMBER 30, 2012 AND OCTOBER 2, 2011        
                                (UNAUDITED)                                 
                          (In millions of dollars)                          
                                                                            
                                                     2012          2011     
                                                 ------------  ------------ 
                                                                            
Cash flows from operating activities                                        
  Net earnings                                   $       41.2  $       39.6 
  Noncash adjustments:                                                      
    Depreciation and amortization                        16.8          23.9 
    Provision for bad debts                               1.2           3.5 
    Stock-based compensation                              3.7           3.5 
    Other, net                                              -          (1.5)
  Changes in operating assets and liabilities           (42.0)        (63.4)
                                                 ------------  ------------ 
                                                                            
      Net cash from operating activities                 20.9           5.6 
                                                 ------------  ------------ 
                                                                            
Cash flows from investing activities                                        
  Capital expenditures                                  (13.9)        (10.0)
  Other investing activities                              0.1           1.0 
                                                 ------------  ------------ 
                                                                            
      Net cash from investing activities                (13.8)         (9.0)
                                                 ------------  ------------ 
                                                                            
Cash flows from financing activities                                        
  Net change in short-term borrowings                   (12.6)         61.9 
  Repayment of debt                                         -         (62.9)
  Dividend payments                                      (5.7)         (1.9)
  Other financing activities                              0.1          (1.0)
                                                 ------------  ------------ 
                                                                            
      Net cash from financing activities                (18.2)         (3.9)
                                                 ------------  ------------ 
                                                                            
Effect of exchange rates on cash and equivalents          0.4           0.3 
                                                 ------------  ------------ 
                                                                            
Net change in cash and equivalents                      (10.7)         (7.0)
Cash and equivalents at beginning of period              81.0          80.5 
                                                 ------------  ------------ 
                                                                            
                                                                            
Cash and equivalents at end of period            $       70.3  $       73.5 
                                                 ============  ============ 
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                           REVENUE FROM SERVICES                            
                                (UNAUDITED)                                 
                         (In millions of dollars)                           
                                                                            
                                   Third Quarter (Commercial, PT and OCG)   
                                 -----------------------------------------  
                                                             % Change       
                                                                  Constant  
                                    2012       2011       US$     Currency  
                                 ---------  ---------  --------   --------  
                                                                            
Americas                                                                    
  United States                  $   853.4  $   858.6      (0.6)%     (0.6)%
  Canada                              61.9       66.0      (6.1)      (4.6) 
  Mexico                              31.1       27.1      14.6       21.8  
  Puerto Rico                         24.5       24.5      (0.0)      (0.0) 
  Brazil                              14.3          -        NM         NM  
                                 ---------  ---------                       
Total Americas                       985.2      976.2       0.9        1.6  
                                                                            
EMEA                                                                        
  Switzerland                         61.0       68.3     (10.5)       4.6  
  France                              60.3       76.6     (21.4)     (11.2) 
  Russia                              31.7       36.4     (12.9)      (4.9) 
  United Kingdom                      25.6       30.9     (17.5)     (15.9) 
  Portugal                            18.8       22.8     (17.4)      (6.8) 
  Germany                             17.8       21.4     (16.9)      (6.2) 
  Norway                              17.6       18.3      (4.4)       2.8  
  Italy                               13.1       18.2     (27.2)     (18.2) 
  Other                               17.2       21.7     (20.6)     (11.1) 
                                 ---------  ---------                       
Total EMEA                           263.1      314.6     (16.4)      (6.4) 
                                                                            
APAC                                                                        
  Australia                           35.4       36.8      (4.0)      (3.0) 
  Singapore                           26.0       26.2      (0.5)       1.1  
  Malaysia                            19.1       18.1       5.6        8.9  
  New Zealand                         13.0       13.4      (3.5)      (0.7) 
  India                                5.5       18.0     (69.1)     (62.8) 
  Other                                6.9        6.5       6.0        9.8  
                                 ---------  ---------                       
Total APAC                           105.9      119.0     (11.0)      (8.4) 
                                                                            
Total Kelly Services, Inc.       $ 1,354.2  $ 1,409.8      (3.9)%     (1.0)%
                                 =========  =========                       
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                           REVENUE FROM SERVICES                            
                                (UNAUDITED)                                 
                          (In millions of dollars)                          
                                                                            
                                    September Year to Date (Commercial, PT  
                                                   and OCG)                 
                                  ----------------------------------------- 
                                                              % Change      
                                                                   Constant 
                                     2012       2011       US$     Currency 
                                  ---------  ---------  --------   -------- 
                                                                            
Americas                                                                    
  United States                   $ 2,586.3  $ 2,561.6       1.0%       1.0%
  Canada                              183.4      186.8      (1.8)       0.7 
  Mexico                               82.4       79.8       3.2       13.0 
  Puerto Rico                          76.3       70.7       8.0        8.0 
  Brazil                               46.7          -        NM         NM 
                                  ---------  ---------                      
Total Americas                      2,975.1    2,898.9       2.6        3.3 
                                                                            
EMEA                                                                        
  France                              184.2      224.7     (18.0)     (10.0)
  Switzerland                         174.4      177.8      (1.9)       6.0 
  Russia                               97.1      108.4     (10.5)      (3.5)
  United Kingdom                       79.3       92.5     (14.3)     (12.4)
  Portugal                             56.0       66.1     (15.2)      (6.8)
  Germany                              53.9       62.7     (14.0)      (5.6)
  Norway                               50.8       50.9      (0.3)       5.6 
  Italy                                44.5       53.3     (16.4)      (8.5)
  Other                                48.4       67.4     (28.1)     (20.7)
                                  ---------  ---------                      
Total EMEA                            788.6      903.8     (12.7)      (5.6)
                                                                            
APAC                                                                        
  Australia                           101.6      110.3      (7.9)      (7.7)
  Singapore                            75.1       78.6      (4.4)      (3.5)
  Malaysia                             54.9       54.5       0.7        3.0 
  New Zealand                          39.5       37.8       4.4        3.3 
  India                                20.9       53.1     (60.6)     (54.2)
  Other                                19.4       17.7       9.8       12.2 
                                  ---------  ---------                      
Total APAC                            311.4      352.0     (11.5)      (9.9)
                                                                            
Total Kelly Services, Inc.        $ 4,075.1  $ 4,154.7      (1.9)%      0.3%
                                  =========  =========                      
                                                                            
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                    RECONCILIATION OF NON-GAAP MEASURES                     
                                (UNAUDITED)                                 
               (In millions of dollars except per share data)               
                                                                            
                                  Third Quarter        Sept. Year to Date   
                             ----------------------  ---------------------- 
                                2012        2011        2012        2011    
                             ----------  ----------  ----------  ---------- 
                                                                            
Pretax earnings from                                                        
 operations                  $     24.0  $     22.1  $     62.5  $     45.0 
                                                                            
Restructuring charges (Note                                                 
 1)                                   -        (0.6)       (2.2)        2.8 
                             ----------  ----------  ----------  ---------- 
                                                                            
Earnings from operations                                                    
 excluding restructuring                                                    
 charges                     $     24.0  $     21.5  $     60.3  $     47.8 
                             ==========  ==========  ==========  ========== 
                                                                            
                                                                            
                                              Third Quarter                 
                             ---------------------------------------------- 
                                      2012                    2011          
                             ----------------------  ---------------------- 
                               Amount     Per Share    Amount     Per Share 
                             ----------  ----------  ----------  ---------- 
                                                                            
Earnings from continuing                                                    
 operations, net of taxes    $     16.6  $     0.43  $     19.7  $     0.52 
                                                                            
Restructuring charges, net                                                  
 of taxes (Note 1)                    -           -        (0.6)      (0.02)
                             ----------              ----------             
                                                                            
Earnings from continuing                                                    
 operations excluding                                                       
 restructuring charges, net                                                 
 of taxes                    $     16.6  $     0.43  $     19.1  $     0.51 
                             ==========  ==========  ==========  ========== 
                                                                            
                                                                            
                                           Sept. Year to Date               
                             ---------------------------------------------- 
                                      2012                    2011          
                             ----------------------  ---------------------- 
                               Amount     Per Share    Amount     Per Share 
                             ----------  ----------  ----------  ---------- 
                                                                            
Earnings from continuing                                                    
 operations, net of taxes    $     40.8  $     1.07  $     40.8  $     1.09 
                                                                            
Restructuring charges, net                                                  
 of taxes (Note 1)                 (2.2)      (0.06)        2.8        0.07 
                             ----------              ----------             
                                                                            
Earnings from continuing                                                    
 operations excluding                                                       
 restructuring charges, net                                                 
 of taxes                    $     38.6  $     1.02  $     43.6  $     1.16 
                             ==========  ==========  ==========  ========== 

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

Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the restructuring charges is useful to understand the Company's fiscal 2012 financial performance and increases comparability. Specifically, Management believes that excluding this item allows for a more meaningful comparison of current period operating performance with the operating results of prior periods. 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) Restructuring costs relate primarily to revisions of the estimated lease termination costs for EMEA Commercial branches that closed in prior years.

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

MEDIA CONTACT: Jane Stehney (248) 244-5630 jane_stehney@kellyservices.com

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