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

TROY, MI--(Marketwire - Jan 31, 2013) - 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 restructuring 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^®
Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB) is a leader in providing workforce solutions. Kelly^® 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	)
		Gross 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
	Commercial
		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, 2012				Jan. 1, 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
		As reported			Restructuring Charges (Note 1)			Asset Impairments (Note 2)			Loss on Equity Investment (Note 3)			Adjusted 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
		As reported			Restructuring Charges (Note 1)			Asset Impairments (Note 2)			Loss on Equity Investment (Note 3)			Adjusted Earnings			Adjusted 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
			As reported				Restructuring Charges (Note 1)				Adjusted 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 taxes				(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.