Kelly Services(R) Reports 4th Quarter and Full Year 2012 Results

Kelly Services(R) Reports 4th Quarter and Full Year 2012 Results 
TROY, MI -- (Marketwire) -- 01/31/13 --  Kelly Services, Inc.
(NASDAQ: KELYA) (NASDAQ: KELYB), a leader in providing workforce
solutions, today announced results for the fourth quarter and full
year of 2012.  
Carl T. Camden, President and Chief Executive Officer, announced
revenue for the fourth quarter of 2012 totaled $1.4 billion, a 2%
decrease compared to the corresponding quarter of 2011. Revenue for
the full year totaled $5.5 billion, a 2% decrease compared to the
prior year.  
Earnings from operations for the fourth quarter of 2012 totaled $9.8
million, compared to $12.7 million reported for the fourth quarter of
2011. Included in the results from operations for the fourth quarter
of 2012 are asset impairment charges of $3.1 million and
restructuring charges of $1.3 million. Excluding these charges,
earnings from operations were $14.2 million in the fourth quarter of
2012 compared to $12.7 million in 2011. 
Earnings from operations for the full year of 2012 totaled $72.3
million compared to $57.7 million in 2011. Included in the results
from operations for 2012 are asset impairment charges of $3.1 million
and a restructuring benefit of $900 thousand. Included in the results
from operations for 2011 are restructuring charges of $2.8 million.
Excluding these items from both years, earnings from operations were
$74.5 million in 2012 compared to $60.5 million in 2011. 
Diluted earnings per share from continuing operations in the fourth
quarter of 2012 were $0.23 compared to $0.64 per share in the fourth
quarter of 2011. Included in diluted earnings per share from
continuing operations for the fourth quarter of 2012 are asset
impairment charges of $0.05 per share, restructuring charges of $0.02
per share and a loss on the North Asia joint venture of $0.03 per
share. Excluding these charges, diluted earnings per share from
continuing operations for the fourth quarter of 2012 were $0.33 per
share compared to $0.64 in 2011. 
Diluted earnings per share from continuing operations for the full
year of 2012 were $1.31 compared to $1.72 per share in 2011. Included
in diluted earnings per share from continuing operations for 2012 are
asset impairment charges of $0.05 per share, a restruc
turing benefit
of $0.04 per share and a loss on the North Asia joint venture of
$0.03 per share. Included in diluted earnings per share from
continuing operations for 2011 are restructuring charges of $0.07 per
share. Excluding these charges from both periods, diluted earnings
per share from continuing operations for 2012 were $1.34 per share
compared to $1.80 in 2011. 
Commenting on the fourth quarter and full year results, Camden
stated, "Given the challenging fourth quarter and anemic economic
growth throughout the year, we're pleased with our performance. Our
strategy is clearly yielding results. We kept expenses under control,
grew our higher-margin professional and technical business, and
delivered four straight quarters of positive earnings in our
outsourcing and consulting group."  
Camden expects persistent headwinds and mediocre job growth in the
months ahead, but feels Kelly is well-positioned. "We're operating
more efficiently, and we're investing in flexible solutions that meet
the fastest-growing demands in the market. Skilled workers will
continue to be in short supply in 2013, and companies will continue
to look for ways to better manage their workforce. Kelly's
professional and technical staffing capabilities, along with our
expertise in talent supply chain management, provide the solution."  
In conjunction with its fourth quarter and full year earnings
release, Kelly Services, Inc. will host a conference call at 9:00
a.m. (ET) on January 31, 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 and technology introductions, 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), 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 560,000 employees
annually. Revenue in 2012 was $5.5 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 DECEMBER 30, 2012 AND JANUARY 1, 2012         
                                (UNAUDITED)                                 
              (In millions of dollars except per share data)                
                                                                            
                                  2012        2011       Change   % Change  
                               ---------   ---------   ---------  --------  
                                                                            
Revenue from services          $ 1,375.4   $ 1,396.3   $   (20.9)     (1.5)%
                                         
                                   
Cost of services                 1,153.2     1,172.0       (18.8)     (1.6) 
                               ---------   ---------   ---------  --------  
                                                                            
Gross profit                       222.2       224.3        (2.1)     (0.9) 
                                                                            
Selling, general and                                                        
 administrative                                                             
expenses                           209.3       211.6        (2.3)     (1.1) 
                                                                            
Asset impairments                    3.1           -         3.1        NM  
                               ---------   ---------   ---------  --------  
                                                                            
Earnings from operations             9.8        12.7        (2.9)    (22.8) 
                                                                            
Other expense, net                  (1.7)          -        (1.7)       NM  
                               ---------   ---------   ---------  --------  
                                                                            
Earnings from continuing                                                    
 operations before taxes             8.1        12.7        (4.6)    (36.2) 
                                                                            
Income taxes                        (0.8)      (11.4)       10.6      93.7  
                               ---------   ---------   ---------  --------  
                                                                            
Earnings from continuing                                                    
 operations                          8.9        24.1       (15.2)    (63.3) 
                                                                            
Earnings from discontinued                                                  
 operations, net of tax                -           -           -        NM  
                               ---------   ---------   ---------  --------  
                                                                            
Net earnings                   $     8.9   $    24.1   $   (15.2)    (63.2)%
                               =========   =========   =========  ========  
                                                                            
Basic earnings per share on                                                 
 common stock                                                               
  Earnings from continuing                                                  
   operations                  $    0.23   $    0.64   $   (0.41)    (64.1)%
  Earnings from discontinued                                                
   operations                          -           -           -        NM  
  Net earnings                      0.23        0.64       (0.41)    (64.1) 
                                                                            
Diluted earnings per share on                                               
 common stock                                                               
  Earnings from continuing                                                  
   operations                  $    0.23   $    0.64   $   (0.41)    (64.1)%
  Earnings from discontinued                                                
   operations                          -           -           -        NM  
  Net earnings                      0.23        0.64       (0.41)    (64.1) 
                                                                            
                                                                            
STATISTICS:                                                                 
                                                                            
Gross profit rate                   16.2%       16.1%    0.1pts.            
                                                                            
Selling, general and                                                        
 administrative expenses:                                                   
  % of revenue                      15.2        15.2         0.0            
  % of gross profit                 94.2        94.3        (0.1)           
                                                                            
% Return:                                                                   
  Earnings from operations           0.7         0.9        (0.2)           
  Earnings from continuing                                                  
   operations before taxes           0.6         0.9        (0.3)           
  Earnings from continuing                                                  
   operations                        0.6         1.7        (1.1)           
  Net earnings                       0.6         1.7        (1.1)           
                                                                            
Effective income tax rate           (8.9)%     (89.2)%  80.3pts.            
                                                                            
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 52 WEEKS ENDED DECEMBER 30, 2012 AND JANUARY 1, 2012         
                                (UNAUDITED)                                 
              (In millions of dollars except per share data)                
                                                                            
                                   2012       2011       Change   % Change  
                                ---------  ---------   ---------  --------  
                                                                            
Revenue from services           $ 5,450.5  $ 5,551.0   $  (100.5)     (1.8)%
                                                                            
Cost of services                  4,553.9    4,667.7      (113.8)     (2.4) 
                                ---------  ---------   ---------  --------  
                                                                         
   
Gross profit                        896.6      883.3        13.3       1.5  
                                                                            
Selling, general and                                                        
 administrative expenses            821.2      825.6        (4.4)     (0.6) 
                                                                            
Asset impairments                     3.1          -         3.1        NM  
                                ---------  ---------   ---------  --------  
                                                                            
Earnings from operations             72.3       57.7        14.6      25.3  
                                                                            
Other expense, net                   (3.5)      (0.1)       (3.4)       NM  
                                ---------  ---------   ---------  --------  
                                                                            
Earnings from continuing                                                    
 operations before taxes             68.8       57.6        11.2      19.4  
                                                                            
Income taxes                         19.1       (7.3)       26.4     363.5  
                                ---------  ---------   ---------  --------  
                                                                            
Earnings from continuing                                                    
 operations                          49.7       64.9       (15.2)    (23.5) 
                                                                            
Earnings (loss) from                                                        
 discontinued operations, net                                               
 of tax                               0.4       (1.2)        1.6        NM  
                                ---------  ---------   ---------  --------  
                                                                            
Net earnings                    $    50.1  $    63.7   $   (13.6)    (21.4)%
                                =========  =========   =========  ========  
                                                                            
Basic earnings per share on                                                 
 common stock                                                               
  Earnings from continuing                                                  
   operations                   $    1.31  $    1.72   $   (0.41)    (23.8)%
  Earnings (loss) from                                                      
   discontinued operations           0.01      (0.03)       0.04        NM  
  Net earnings                       1.32       1.69       (0.37)    (21.9) 
                                                                            
Diluted earnings per share on                                               
 common stock                                                               
  Earnings from continuing                                                  
   operations                   $    1.31  $    1.72   $   (0.41)    (23.8)%
  Earnings (loss) from                                                      
   discontinued operations           0.01      (0.03)       0.04        NM  
  Net earnings                       1.32       1.69       (0.37)    (21.9) 
                                                                            
                                                                            
STATISTICS:                                                                 
                                                                            
Gross profit rate                    16.5%      15.9%    0.6pts.            
                                                                            
Selling, general and                                                        
 administrative expenses:                                                   
  % of revenue                       15.1       14.9         0.2            
  % of gross profit                  91.6       93.5        (1.9)           
                                                                            
% Return:                                                                   
  Earnings from operations            1.3        1.0         0.3            
  Earnings from continuing                                                  
   operations before taxes            1.3        1.0         0.3            
  Earnings from continuing                                                  
   operations                         0.9        1.2        (0.3)           
  Net earnings                        0.9        1.1        (0.2)           
                                                                            
Effective income tax rate            27.8%     (12.6)%  40.4pts.            
                                                                            
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                            38.1       37.6                        
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                     RESULTS OF OPERATIONS BY SEGMENT                       
                                (UNAUDITED)                                 
                         (In millions of dollars)                           
                                                                            
                                              Fourth Quarter                
                                ------------------------------------------  
                                                                  Constant  
                                                                  Currency  
                                   2012       2011      Change     Change   
                                ---------  ---------  ---------   --------  
AMERICAS                                                                    
  Commercial                                                                
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $   662.3  $   675.6       (2.0)%     (2.1)%
    Fee-based income                  3.6        3.2       13.5       13.9  
    Gross profit                     96.1       96.4       (0.3)      (0.4) 
                                                                            
    Gross profit rate                14.5%      14.3%   0.2pts.             
                                                                            
  PT                                                                        
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $   255.6  $   243.7        4.9%       4.6% 
    Fee-based income                  3.2        3.6      (12.3)     (12.4) 
    Gross profit                     38.9       38.0        2.4        2.2  
                                                                            
    Gross profit rate                15.2%      15.6% (0.4)pts.             
                                                                            
  Total Americas                                                            
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $   917.9  $   919.3       (0.2)%     (0.4)%
    Fee-based income                  6.8        6.8       (0.2)      (0.1) 
    Gross profit                    135.0      134.4        0.5        0.4  
    Total SG&A expenses             102.4      100.1        2.3        2.3  
    Earnings from operations         32.6       34.3       (4.8)            
                                                                            
    Gro
ss profit rate                14.7%      14.6%   0.1pts.             
    Expense rates:                                                          
      % of revenue                   11.2       10.9        0.3             
      % of gross profit              75.8       74.5        1.3             
    Operating margin                  3.6        3.7       (0.1)            
                                                                            
EMEA                                                                        
  Commercial                                                                
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $   213.4  $   238.8      (10.6)%     (8.9)%
    Fee-based income                  4.9        6.0      (18.3)     (17.3) 
    Gross profit                     32.7       38.7      (15.6)     (14.0) 
                                                                            
    Gross profit rate                15.3%      16.2% (0.9)pts.             
                                                                            
  PT                                                                        
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $    43.0  $    44.9       (4.2)%     (2.1)%
    Fee-based income                  3.7        4.2      (12.7)     (11.3) 
    Gross profit                     10.3       11.3       (9.6)      (7.8) 
                                                                            
    Gross profit rate                23.9%      25.3% (1.4)pts.             
                                                                            
  Total EMEA                                                                
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $   256.4  $   283.7       (9.6)%     (7.8)%
    Fee-based income                  8.6       10.2      (16.0)     (14.8) 
    Gross profit                     43.0       50.0      (14.3)     (12.6) 
    SG&A expenses excluding                                                 
     restructuring charges           42.6       46.4       (8.3)            
    Restructuring charges             1.3          -         NM             
    Total SG&A expenses              43.9       46.4       (5.6)      (4.1) 
    Earnings from operations         (0.9)       3.6         NM             
    Earnings from operations                                                
     excluding restructuring                                                
     charges                          0.4        3.6      (91.7)            
                                                                            
    Gross profit rate                16.7%      17.7% (1.0)pts.             
    Expense rates (excluding                                                
     restructuring charges):                                                
      % of revenue                   16.6       16.4        0.2             
      % of gross profit              99.3       92.8        6.5             
    Operating margin (excluding                                             
     restructuring charges)           0.1        1.3       (1.2)            
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                     RESULTS OF OPERATIONS BY SEGMENT                       
                                (UNAUDITED)                                 
                         (In millions of dollars)                           
                                                                            
                                              Fourth Quarter                
                                ------------------------------------------  
                                                                  Constant  
                                                                  Currency  
                                   2012       2011      Change     Change   
                                ---------  ---------  ---------   --------  
APAC                                                                        
  Commercial                                                                
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $    84.9  $    93.8       (9.5)%    (12.4)%
    Fee-based income                  2.4        2.9      (18.5)     (19.2) 
    Gross profit                     11.7       13.2      (11.2)     (13.6) 
                                                                            
    Gross profit rate                13.8%      14.1% (0.3)pts.             
                                                                            
  PT                                                                        
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $    11.7  $    12.3       (4.6)%     (6.8)%
    Fee-based income                  2.9        3.1       (5.6)      (8.0) 
    Gross profit                      4.3        4.4       (1.5)      (4.0) 
                                                                            
    Gross profit rate                36.7%      35.5%   1.2pts.             
                                                                            
  Total APAC                                                                
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $    96.6  $   106.1       (9.0)%    (11.7)%
    Fee-based income                  5.3        6.0      (11.9)     (13.4) 
    Gross profit                     16.0       17.6       (8.8)     (11.2) 
    Total SG&A expenses              15.9       17.9      (11.0)     (13.3) 
    Earnings from operations          0.1       (0.3)        NM             
                                                                            
    Gross profit rate                16.6%      16.6%    - pts.             
    Expense rates:                                                          
      % of revenue                   16.5       16.9       (0.4)            
      % of gross profit              99.3      101.7       (2.4)            
 
    Operating margin                  0.1       (0.3)       0.4             
                                                                            
OCG                                                                         
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $   113.3  $    94.4       20.1%      20.0% 
    Fee-based income                 13.8       10.8       26.9       27.1  
    Gross profit                     29.0       23.0       26.3       26.3  
    Total SG&A expenses              25.8       22.2       16.1       16.2  
    Earnings from operations          3.2        0.8      302.0             
                                                                            
    Gross profit rate                25.6%      24.3%   1.3pts.             
    Expense rates:                                                          
      % of revenue                   22.7       23.5       (0.8)            
      % of gross profit              88.7       96.4       (7.7)            
    Operating margin                  2.9        0.9        2.0             
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                     RESULTS OF OPERATIONS BY SEGMENT                       
                                (UNAUDITED)                                 
                         (In millions of dollars)                           
                                                                            
                                           December Year to Date            
                                ------------------------------------------  
                                                                  Constant  
                                                                  Currency  
                                   2012       2011      Change     Change   
                                ---------  ---------  ---------   --------  
AMERICAS                                                                    
  Commercial                                                                
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $ 2,642.4  $ 2,660.9       (0.7)%        -% 
    Fee-based income                 15.7       12.0       30.7       33.3  
    Gross profit                    388.2      375.3        3.4        4.1  
                                                                            
    Gross profit rate                14.7%      14.1%   0.6pts.             
                                                                            
  PT                                                                        
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $ 1,029.7  $   982.8        4.8%       4.8% 
    Fee-based income                 14.5       13.3        8.5        8.6  
    Gross profit                    159.7      147.8        8.0        8.1  
                                                                            
    Gross profit rate                15.5%      15.0%   0.5pts.             
                                                                            
  Total Americas                                                            
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $ 3,672.1  $ 3,643.7        0.8%       1.3% 
    Fee-based income                 30.2       25.3       19.0       20.3  
    Gross profit                    547.9      523.1        4.7        5.2  
    Total SG&A expenses             405.8      396.4        2.4        3.0  
    Earnings from operations        142.1      126.7       12.0             
                                                                            
    Gross profit rate                14.9%      14.4%   0.5pts.             
    Expense rates:                                                          
      % of revenue                   11.1       10.9        0.2             
      % of gross profit              74.1       75.8       (1.7)            
    Operating margin                  3.9        3.5        0.4             
                                                                            
EMEA                                                                        
  Commercial                                                                
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $   854.6  $   990.1      (13.7)%     (8.0)%
    Fee-based income                 22.4       24.9      (10.1)      (4.2) 
    Gross profit                    133.8      160.3      (16.6)     (10.9) 
                                                                            
    Gross profit rate                15.7%      16.2% (0.5)pts.             
                                                                            
  PT                                                                        
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $   168.3  $   178.9       (5.9)%      0.4% 
    Fee-based income                 16.8       19.2      (12.7)      (7.3) 
    Gross profit                     43.0       47.4       (9.4)      (3.4) 
                                                                            
    Gross profit rate                25.5%      26.5% (1.0)pts.             
                                                                            
  Total EMEA                                                                
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $ 1,022.9  $ 1,169.0      (12.5)%     (6.7)%
    Fee-based income                 39.2       44.1      (11.2)      (5.5) 
    Gross profit                    176.8      207.7      (14.9)      (9.2) 
    SG&A expenses excluding                                                 
     restructuring charges          169.0      186.9       (9.7)            
    Restructuring charges            (0.9)       2.8     (132.3)            
    Total SG&A expenses             168.1      189.7      (11.5)      (6.0) 
    Earnings from operations          8.7       18.0      (51.6)            
    Earnings from operations                                                
     excluding restructuring                                                
     charges                          7.8       20.8      (62.5)            
                                                                            
    Gross profit rate                17.3%      17.8% (0.5)pts.             
    Expense rates (excluding                                                
     restructuring charges):                                                
      % of revenue                   16.5       16.0        0.5             
      % of gross profit              95.6       90.1        5.5             
    Operating margin (excluding                                             
     restructuring charges)           0.8        1.8       (1.0)            
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                     RESULTS OF OPERATIONS BY SEGMENT                       
                                (UNAUDITED)                                 
                         (In millions of dollars)                           
                                                                            
                                           December Year to Date            
                                ------------------------------------------  
                                                                  Constant  
                                                                  Currency  
                                   2012       2011      Change     Change   
                                ---------  ---------  ---------   --------  
APAC                                                                        
  Commercia
l                                                                
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $   343.2  $   397.6      (13.7)%    (13.2)%
    Fee-based income                 11.7       13.9      (15.7)     (13.4) 
    Gross profit                     50.1       55.7      (10.0)      (9.3) 
                                                                            
    Gross profit rate                14.6%      14.0%   0.6pts.             
                                                                            
  PT                                                                        
  Revenue from services                                                     
   (including fee-based income) $    51.6  $    51.4        0.5%       1.2% 
    Fee-based income                 15.8       15.3        3.1        2.9  
    Gross profit                     21.0       20.6        1.9        2.0  
                                                                            
    Gross profit rate                40.6%      40.1%   0.5pts.             
                                                                            
  Total APAC                                                                
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $   394.8  $   449.0      (12.1)%    (11.5)%
    Fee-based income                 27.5       29.2       (5.8)      (4.8) 
    Gross profit                     71.1       76.3       (6.8)      (6.3) 
    Total SG&A expenses              73.4       77.0       (4.7)      (4.1) 
    Earnings from operations         (2.3)      (0.7)    (207.4)            
                                                                            
    Gross profit rate                18.0%      17.0%   1.0pts.             
    Expense rates:                                                          
      % of revenue                   18.6       17.2        1.4             
      % of gross profit             103.3      101.0        2.3             
    Operating margin                 (0.6)      (0.2)      (0.4)            
                                                                            
OCG                                                                         
    Revenue from services                                                   
     (including fee-based                                                   
     income)                    $   396.1  $   317.3       24.8%      25.5% 
    Fee-based income                 51.4       39.5       30.0       32.1  
    Gross profit                    104.0       78.8       32.0       33.5  
    Total SG&A expenses              95.4       81.4       17.0       18.6  
    Earnings from operations          8.6       (2.6)        NM             
                                                                            
    Gross profit rate                26.3%      24.8%   1.5pts.             
    Expense rates:                                                          
      % of revenue                   24.1       25.7       (1.6)            
      % of gross profit              91.6      103.4      (11.8)            
    Operating margin                  2.2       (0.8)       3.0             
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                        CONSOLIDATED BALANCE SHEETS                         
                                (UNAUDITED)                                 
                          (In millions of dollars)                          
                                                                            
                                                     Dec. 30,     Jan. 1,   
                                                       2012         2012    
                                                   -----------  ----------- 
Current Assets                                                              
  Cash and equivalents                             $      76.3  $      81.0 
  Trade accounts receivable, less allowances of                             
   $10.4 and $13.4, respectively                       1,013.9        944.9 
  Prepaid expenses and other current assets               57.5         50.6 
  Deferred taxes                                          44.9         38.2 
                                                   -----------  ----------- 
                                                                            
    Total current assets                               1,192.6      1,114.7 
                                                                            
Property and Equipment, Net                               89.9         90.6 
                                                                            
Noncurrent Deferred Taxes                                 82.8         94.1 
                                                                            
Goodwill, Net                                             89.5         90.2 
                                                                            
Other Assets                                             180.9        152.1 
                                                   -----------  ----------- 
                                                                            
Total Assets                                       $   1,635.7  $   1,541.7 
                                                   ===========  =========== 
                                                                            
Current Liabilities                                                         
  Short-term borrowings                            $      64.1  $      96.3 
  Accounts payable and accrued liabilities               295.6        237.2 
  Accrued payroll and related taxes                      264.5        271.4 
  Accrued insurance                                       32.8         31.5 
  Income and other taxes                                  65.3         61.3 
                                                   -----------  ----------- 
                                                                            
    Total current liabilities                            722.3        697.7 
                                                                            
Noncurrent Liabilities                                                      
  Accrued insurance                                       43.5         53.5 
  Accrued retirement benefits                            111.0         91.1 
  Other long-term liabilities                             17.9         23.7 
                                                   -----------  ----------- 
                                                                            
    Total noncurrent liabilities                         172.4        168.3 
                                                                            
Stockholders' Equity                                                        
  Common stock                                            40.1         40.1 
  Treasury stock                                         (61.6)       (66.9)
  Paid-in capital                                         27.1         28.8 
  Earnings invested in the business                      700.0        657.5 
  Accumulated other comprehensive income                  35.4         16.2 
                                                   -----------  ----------- 
                                                                            
    Total stockholders' equity                           741.0        675.7 
             
                                      -----------  ----------- 
                                                                            
Total Liabilities and Stockholders' Equity         $   1,635.7  $   1,541.7 
                                                   ===========  =========== 
                                                                            
                                                                            
STATISTICS:                                                                 
  Working Capital                                  $     470.3  $     417.0 
  Current Ratio                                            1.7          1.6 
  Debt-to-capital %                                        8.0%        12.5%
  Global Days Sales Outstanding                             53           52 
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                   CONSOLIDATED STATEMENTS OF CASH FLOWS                    
        FOR THE 52 WEEKS ENDED DECEMBER 30, 2012 AND JANUARY 1, 2012        
                                (UNAUDITED)                                 
                          (In millions of dollars)                          
                                                                            
                                                          2012       2011   
                                                       ---------  --------- 
                                                                            
Cash flows from operating activities                                        
  Net earnings                                         $    50.1  $    63.7 
  Noncash adjustments:                                                      
    Impairment of assets                                     3.1          - 
    Depreciation and amortization
                           22.3       31.4 
    Provision for bad debts                                  1.1        4.3 
    Stock-based compensation                                 4.8        4.6 
    Other, net                                               1.3       (2.6)
  Changes in operating assets and liabilities              (21.6)     (82.3)
                                                       ---------  --------- 
                                                                            
      Net cash from operating activities                    61.1       19.1 
                                                       ---------  --------- 
                                                                            
Cash flows from investing activities                                        
  Capital expenditures                                     (21.5)     (15.4)
  Investment in equity affiliate                            (6.6)         - 
  Acquisition of companies, net of cash received               -       (6.5)
  Other investing activities                                   -        1.2 
                                                       ---------  --------- 
                                                                            
      Net cash from investing activities                   (28.1)     (20.7)
                                                       ---------  --------- 
                                                                            
Cash flows from financing activities                                        
  Net change in short-term borrowings                      (31.9)      79.2 
  Repayment of debt                                            -      (68.3)
  Dividend payments                                         (7.6)      (3.8)
  Other financing activities                                 0.1       (1.0)
                                                       ---------  --------- 
                                                                            
      Net cash from financing activities                   (39.4)       6.1 
                                                       ---------  --------- 
                                                                            
Effect of exchange rates on cash and equivalents             1.7       (4.0)
                                                       ---------  --------- 
                                                                            
Net change in cash and equivalents                          (4.7)       0.5 
Cash and equivalents at beginning of period                 81.0       80.5 
                                                       ---------  --------- 
                                                                            
                                                                            
Cash and equivalents at end of period                  $    76.3  $    81.0 
                                                       =========  ========= 
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                           REVENUE FROM SERVICES                            
                                (UNAUDITED)                                 
                         (In millions of dollars)                           
                                                                            
                                   Fourth Quarter (Commercial, PT and OCG)  
                                   ---------------------------------------  
                                                             % Change       
                                                                  Constant  
                                      2012      2011      US$     Currency  
                                   --------- --------- --------   --------  
                                                                            
Americas                                                                    
  United States                    $   877.9 $   883.8     (0.7)%     (0.7)%
  Canada                                60.5      60.9     (0.8)      (3.9) 
  Mexico                                35.3      26.2     34.8       27.7  
  Puerto Rico                           23.4      25.9     (9.6)      (9.6) 
  Brazil                                14.0         -       NM         NM  
                                   --------- ---------                      
Total Americas                       1,011.1     996.8      1.4        1.3  
                                                                            
EMEA                                                                        
  France                                58.8      71.2    (17.3)     (14.1) 
  Switzerland                           61.2      62.0     (1.4)       0.9  
  Russia                                33.9      33.4      1.7        1.2  
  United Kingdom                        25.6      29.1    (11.9)     (13.8) 
  Portugal                              19.0      21.6    (12.2)      (8.8) 
  Germany                               16.4      20.1    (18.5)     (15.2) 
  Norway                                15.5      17.8    (12.9)     (13.9) 
  Italy                                 14.6      17.7    (17.6)     (14.3) 
  Other                                 19.0      17.7      7.1        9.3  
                                   --------- ---------                      
Total EMEA                             264.0     290.6     (9.2)      (7.4) 
                                                                            
APAC                                                                        
  Australia                             33.9      35.1     (3.4)      (5.8) 
  Singapore                             26.5      24.4      8.4        2.9  
  Malaysia     
                         18.0      17.6      2.6       (0.5) 
  New Zealand                           12.9      13.0     (0.4)      (6.0) 
  Other                                  9.0      18.8    (52.6)     (50.3) 
                                   --------- ---------                      
Total APAC                             100.3     108.9     (7.9)     (10.7) 
                                                                            
Total Kelly Services, Inc.         $ 1,375.4 $ 1,396.3     (1.5)%     (1.5)%
                                   ========= =========                      
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                           REVENUE FROM SERVICES                            
                                (UNAUDITED)                                 
                         (In millions of dollars)                           
                                                                            
                                    December Year to Date (Commercial, PT   
                                                   and OCG)                 
                                   ---------------------------------------  
                                                             % Change       
                                                                  Constant  
                                      2012      2011      US$     Currency  
                                   --------- --------- --------   --------  
                                                                            
Americas                                                                    
  United States                    $ 3,464.2 $ 3,445.4      0.5%       0.5% 
  Canada                               243.9     247.7     (1.6)      (0.5) 
  Mexico                               117.7     106.0     11.0       16.7  
  Puerto Rico                           99.7      96.6      3.3        3.3  
  Brazil                                60.7         -       NM         NM  
                                   --------- ---------                      
Total Americas                       3,986.2   3,895.7      2.3        2.8  
                                                                            
EMEA                                                                        
  France                               243.0     295.9    (17.9)     (11.0) 
  Switzerland                          235.6     239.8     (1.8)       4.7  
  Russia                               131.0     141.8     (7.6)      (2.4) 
  United Kingdom                       104.9     121.6    (13.8)     (12.7) 
  Portugal                              75.0      87.7    (14.5)      (7.3) 
  Germany                               70.3      82.8    (15.1)      (7.9) 
  Norway                                66.3      68.7     (3.5)       0.5  
  Italy                                 59.1      71.0    (16.7)      (9.9) 
  Other                                 67.4      85.1    (20.8)     (14.5) 
                                   --------- ---------                      
Total EMEA                           1,052.6   1,194.4    (11.9)      (6.0) 
                                                                            
APAC                                                                        
  Australia                            135.5     145.4     (6.9)      (7.2) 
  Singapore                            101.6     103.0     (1.4)      (2.0) 
  Malaysia                              72.9      72.1      1.2        2.1  
  New Zealand                           52.4      50.8      3.2        1.0  
  Other                                 49.3      89.6    (45.0)     (40.2) 
                                   --------- ---------                      
Total APAC                             411.7     460.9    (10.7)     (10.1) 
                                                                            
Total Kelly Services, Inc.         $ 5,450.5 $ 5,551.0     (1.8)%     (0.2)%
                                   ========= =========                      
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                     RECONCILIATION OF NON-GAAP MEASURES                    
        FOR THE 13 WEEKS ENDED DECEMBER 30, 2012 AND JANUARY 1, 2012        
                                 (UNAUDITED)                                
               (In millions of dollars except per share data)               

 
                                                                            
                                  2012                       2011           
              -------------------------------------------- --------         
                                         Loss on                           
                       Restruc-  Asset   Equity                            
                        turing   Impair- Invest-                           
                 As    Charges    ments   ment    Adjusted             %    
              reported (Note 1) (Note 2) (Note 3) Earnings Earnings Change  
              -------- -------- -------- -------- -------- -------- ------  
                                                                            
Revenue from                                                                
 services     $1,375.4 $      - $      - $      - $1,375.4 $1,396.3   (1.5)%
                                                                            
Cost of                                                                     
 services      1,153.2        -        -        -  1,153.2  1,172.0   (1.6) 
              -------- -------- -------- -------- -------- -------- ------  
                                                                            
Gross profit     222.2        -        -        -    222.2    224.3   (0.9) 
                                                                            
Selling,                                                                    
 general and                                                                
 administrative                                                              
 expenses        209.3     (1.3)       -        -    208.0    211.6   (1.7) 
                                                                            
Asset                                                                       
 impairments       3.1        -     (3.1)       -        -        -      -  
              -------- -------- -------- -------- -------- -------- ------  
                                                                            
Earnings from                                                               
 operations        9.8      1.3      3.1        -     14.2     12.7   11.8  
                                                                            
Other expense,                                                              
 net              (1.7)       -        -      0.7     (1.0)       -     NM  
              -------- -------- -------- -------- -------- -------- ------  
                                                                            
Earnings from                                                               
 continuing                                                                 
 operations                                                                 
 before taxes      8.1      1.3      3.1      0.7     13.2     12.7    4.1  
                                                                            
Income taxes      (0.8)     0.5      1.2     (0.3)     0.6    (11.4)(106.5) 
              -------- -------- -------- -------- -------- -------- ------  
       
                                                                     
Earnings from                                                               
 continuing                                                                 
 operations   $    8.9 $    0.8 $    1.9 $    1.0 $   12.6 $   24.1  (48.1)%
              ======== ======== ======== ======== ======== ======== ======  
                                                                            
                                                                            
Earnings per                                                                
 share from                                                                 
 continuing                                                                 
 operations:                                                                
 Basic        $   0.23 $   0.02 $   0.05 $   0.03 $   0.33 $   0.64  (48.4)%
 Diluted      $   0.23 $   0.02 $   0.05 $   0.03 $   0.33 $   0.64  (48.4)%
                                                                            
                                                                            
                   KELLY SERVICES, INC. AND SUBSIDIARIES                    
                    RECONCILIATION OF NON-GAAP MEASURES                     
       FOR THE 52 WEEKS ENDED DECEMBER 30, 2012 AND JANUARY 1, 2012         
                                (UNAUDITED)                                 
              (In millions of dollars except per share data)                
                                                                            
                                  2012                       2011           
              -------------------------------------------- --------         
                                         Loss on                           
                       Restruc-  Asset   Equity                            
                        turing   Impair- Invest-                           
                 As    Charges    ments   ment    Adjusted Adjusted    %    
              reported (Note 1) (Note 2) (Note 3) Earnings Earnings Change  
              -------- -------- -------- -------- -------- -------- ------  
                                                                            
Revenue from                                                                
 services     $5,450.5 $      - $      - $      - $5,450.5 $5,551.0   (1.8)%
                                                                            
Cost of                                                                     
 services      4,553.9        -        -        -  4,553.9  4,667.7   (2.4) 
              -------- -------- -------- -------- -------- -------- ------  
                                                                            
Gross profit     896.6        -        -        -    896.6    883.3    1.5  
                                                                            
Selling,                                                                    
 general and                                                                
 administrative                                                              
 expenses        821.2      0.9        -        -    822.1    822.8   (0.1) 
                                                                            
Asset                                                                       
 impairments       3.1        -     (3.1)       -        -        -      -  
              -------- -------- -------- -------- -------- -------- ------  
                                                                            
Earnings from                                                               
 operations       72.3     (0.9)     3.1        -     74.5     60.5   23.2  
                                                                            
Other expense,                                                              
 net              (3.5)       -        -      0.7     (2.8)    (0.1)    NM  
              -------- -------- -------- -------- -------- -------- ------  
                                                                            
Earnings from                                                               
 continuing                                                                 
 operations                                                                 
 before taxes     68.8     (0.9)     3.1      0.7     71.7     60.4   18.8  
                                                                            
Income taxes      19.1      0.5      1.2     (0.3)    20.5     (7.3)(383.6) 
              -------- -------- -------- -------- -------- -------- ------  
                                                                            
Earnings from                                                               
 continuing                                                                 
 operations   $   49.7 $   (1.4)$    1.9 $    1.0 $   51.2 $   67.7  (24.4)%
              ======== ======== ======== ======== ======== ======== ======  
                                                                            
                                                                            
Earnings per                                                                
 share from                                                                 
 continuing                                                                 
 operations:                                                                
 Basic        $   1.31 $  (0.04)$   0.05 $   0.03 $   1.34 $   1.80  (25.6)%
 Diluted      $   1.31 $  (0.04)$   0.05 $   0.03 $   1.34 $   1.80  (25.6)%
                                                                            
                                                                            
                                                         2011               
                                          --------------------------------- 
                                                    Restructuring           
                                             As        Charges     Adjusted 
                                          reported     (Note 1)    Earnings 
                                          --------  -------------  -------- 
                                                                            
Revenue from services                     $5,551.0  $           -  $5,551.0 
                                                                            
Cost of services                           4,667.7              -   4,667.7 
                                          --------  -------------  -------- 
                                                                            
Gross profit                                 883.3              -     883.3 
                                                                            
Selling, general and administrative                                         
expenses                                     825.6           (2.8)    822.8 
                                                                            
Asset impairments                                -              -         - 
                                          --------  -------------  -------- 
                                                                            
Earnings from operations                      57.7            2.8      60.5 
                                                                            
Other expense, net                            (0.1)             -      (0.1)
                                          --------  -------------  -------- 
                                                                            
Earnings from continuing operations                                         
 before taxes                                 57.6            2.8      60.4 
                                                                            
Income taxe
s                                  (7.3)             -      (7.3)
                                          --------  -------------  -------- 
                                                                            
Earnings from continuing operations       $   64.9  $         2.8  $   67.7 
                                          ========  =============  ======== 
                                                                            
Earnings per share from continuing                                          
 operations:                                                                
  Basic                                   $   1.72  $        0.07  $   1.80 
  Diluted                                 $   1.72  $        0.07  $   1.80 
                                                                            
                                                                            
                    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, asset          
impairment charges and loss on equity investment is useful to understand the
Company's fiscal 2012 financial performance and increases comparability.    
Specifically, Management believes that excluding these items 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) In 2012, restructuring charges relate to severance and lease termination
costs for EMEA Commercial branches which are in the process of closing,     
along with revisions of the estimated lease termination costs for EMEA      
Commercial branches that closed in prior years. In 2011, restructuring costs
relate primarily to revisions of the estimated lease termination costs for  
EMEA Commercial branches that closed in prior years.                        
                                                                            
(2) Asset impairment charges relate to the write-off of previously          
capitalized costs associated with the PeopleSoft billing system.            
                                                                            
(3) Loss on equity investment represents the difference between the fair    
value and book value of the North Asia entities contributed by the Company  
to the investment in TS Kelly Workforce Solutions.                          

  
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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