Kelly Services(R) Reports 3rd Quarter 2012 Results

Marketwired

TROY, MI--(Marketwire - Nov 7, 2012) - Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a leader in providing workforce solutions, today announced results for the third quarter of 2012. 

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

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

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

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

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

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

Via the Telephone:

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

The pass code is Kelly Services

Via the Internet:

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

This release contains statements that are forward looking in nature and accordingly, are subject to risks and uncertainties. These factors include, but are not limited to, competitive market pressures including pricing, changing market and economic conditions, our ability to achieve our business strategy, including our ability to successfully expand into new markets and service lines, material changes in demand from or loss of large corporate customers, impairment charges triggered by adverse industry or market developments, unexpected termination of customer contracts, availability of temporary workers with appropriate skills required by customers, liabilities for employment-related claims and losses, including class action lawsuits and collective actions, liability for improper disclosure of sensitive or private employee information, unexpected changes in claim trends on workers' compensation and benefit plans, our ability to maintain specified financial covenants in our bank facilities, our ability to access credit markets and continued availability of financing for funding working capital, our ability to sustain critical business applications through our key data centers, our ability to effectively implement and manage our information technology programs, our ability to retain the services of our senior management, local management and field personnel, the impact of changes in laws and regulations (including federal, state and international tax laws and the expiration of the U.S. work opportunity credit program), the net financial impact of the Patient Protection and Affordable Care Act on our business, risks associated with conducting business in foreign countries, including foreign currency fluctuations, and other risks, uncertainties and factors discussed in this release and in the Company's filings with the Securities and Exchange Commission. Actual results may differ materially from any forward looking statements contained herein, and we have no intention to update these statements.

About Kelly Services®
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 550,000 employees annually. Revenue in 2011 was $5.6 billion. Visit kellyservices.com and connect with us on Facebook, LinkedIn, and Twitter. Download The Talent Project, a free iPad app by Kelly Services.

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

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

Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the restructuring charges is useful to understand the Company's fiscal 2012 financial performance and increases comparability. Specifically, Management believes that excluding this item allows for a more meaningful comparison of current period operating performance with the operating results of prior periods. These non-GAAP measures may have limitations as analytical tools because they exclude items which can have a material impact on cash flow and earnings per share. As a result, Management considers these measures, along with reported results, when it reviews and evaluates the Company's financial performance. Management believes that these measures provide greater transparency to investors and provide insight into how Management is evaluating the Company's financial performance. Non-GAAP measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

(1) Restructuring costs relate primarily to revisions of the estimated lease termination costs for EMEA Commercial  branches that closed in prior years.

Contact:
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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