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Kelly Services(R) Reports 3rd Quarter Results

TROY, MI--(Marketwired - Nov 6, 2013) - Kelly Services, Inc. ( NASDAQ : KELYA ) ( NASDAQ : KELYB ), a leader in providing workforce solutions, today announced results for the third quarter of 2013.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the third quarter of 2013 totaled $1.3 billion, a 0.6% decrease compared to the corresponding quarter of 2012.

Earnings from operations for the third quarter of 2013 totaled $20.2 million. Included in the results of operations in the third quarter of 2013 are restructuring charges of $0.5 million. Excluding the restructuring charges, earnings from operations were $20.7 million in the third quarter of 2013, compared to earnings of $24.0 million last year.

Diluted earnings per share from continuing operations in the third quarter of 2013 were $0.49. Adjusted earnings per share were $0.51 in the third quarter of 2013 compared to $0.43 in the third quarter of 2012.

"We're pleased that our third quarter performance surpassed our expectations despite an erratic and lackluster economy," said Camden. "The Americas delivered a nice turnaround in fee performance and KellyOCG brought in strong revenue growth and outsized operating profits. Overall, our results continue to demonstrate that Kelly's strategy is responding to market demands for more holistic workforce solutions, access to skilled talent, and workforce models that help companies achieve their short- and long-term business goals."

Kelly also reported that on November 5, its board of directors declared a dividend of $0.05 per share. The dividend is payable December 6 to shareholders of record as of the close of business on November 18.

In conjunction with its third quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on November 6, 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:
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, & Twitter. Download The Talent Project, a free iPad® app by Kelly Services.

iPad is a trademark of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.

   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF EARNINGS  
FOR THE 13 WEEKS ENDED SEPTEMBER 29, 2013 AND SEPTEMBER 30, 2012  
(UNAUDITED)  
(In millions of dollars except per share data)  
                         
    2013     2012     Change     % Change  
                               
Revenue from services   $ 1,345.6     $ 1,354.2     $ (8.6 )   (0.6 )%
                               
Cost of services     1,125.2       1,126.7       (1.5 )   (0.1 )
                               
Gross profit     220.4       227.5       (7.1 )   (3.1 )
                               
Selling, general and administrative expenses    
200.2
     
203.5
     
(3.3
)  
(1.6
)
                               
Earnings from operations     20.2       24.0       (3.8 )   (15.8 )
                               
Other expense, net     1.3       0.7       0.6     88.9  
                               
Earnings from continuing operations before taxes     18.9       23.3       (4.4 )   (19.0 )
                               
Income tax expense     0.1       6.7       (6.6 )   (99.2 )
                               
Earnings from continuing operations     18.8       16.6       2.2     13.6  
                               
Earnings from discontinued operations, net of tax     -       -       -     NM  
                               
Net earnings   $ 18.8     $ 16.6     $ 2.2     13.5 %
                               
Basic earnings per share on common stock                              
  Earnings from continuing operations   $ 0.49     $ 0.43     $ 0.06     14.0 %
  Earnings from discontinued operations     -       -       -     NM  
  Net earnings     0.49       0.43       0.06     14.0  
                               
Diluted earnings per share on common stock                              
  Earnings from continuing operations   $ 0.49     $ 0.43     $ 0.06     14.0 %
  Earnings from discontinued operations     -       -       -     NM  
  Net earnings     0.49       0.43       0.06     14.0  
                               
                               
                               
                               
STATISTICS:                              
                               
Gross profit rate     16.4 %     16.8 %     (0.4 )pts.      
                               
Selling, general and administrative expenses:                              
  % of revenue     14.9       15.0       (0.1 )      
  % of gross profit     90.8       89.4       1.4        
                               
% Return:                              
  Earnings from operations     1.5       1.8       (0.3 )      
  Earnings from continuing operations before taxes     1.4       1.7       (0.3 )      
  Earnings from continuing operations     1.4       1.2       0.2        
  Net earnings     1.4       1.2       0.2        
                               
Effective income tax rate     0.3 %     28.9 %     (28.6 )pts.      
                               
Average number of shares outstanding (millions):                              
  Basic     37.4       37.1                
  Diluted     37.4       37.1                
                               
Shares adjusted for nonvested restricted awards (millions):                              
  Basic     38.1       38.3                
  Diluted     38.1       38.3                
                                 
                                 
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF EARNINGS  
FOR THE 39 WEEKS ENDED SEPTEMBER 29, 2013 AND SEPTEMBER 30, 2012  
(UNAUDITED)  
(In millions of dollars except per share data)  
                         
    2013     2012     Change     % Change  
                               
Revenue from services   $ 4,027.3     $ 4,075.1     $ (47.8 )   (1.2 )%
                               
Cost of services     3,369.3       3,400.7       (31.4 )   (0.9 )
                               
Gross profit     658.0       674.4       (16.4 )   (2.4 )
                               
Selling, general and administrative expenses     612.6       611.9       0.7     0.1  
                               
Asset impairments     1.7       -       1.7     NM  
                               
Earnings from operations     43.7       62.5       (18.8 )   (30.0 )
                               
Other expense, net     3.9       1.8       2.1     118.3  
                               
Earnings from continuing operations before taxes     39.8       60.7       (20.9 )   (34.4 )
                               
Income tax (benefit) expense     (1.9 )     19.9       (21.8 )   (109.9 )
                               
Earnings from continuing operations     41.7       40.8       0.9     2.4  
                               
Earnings from discontinued operations, net of tax     -       0.4       (0.4 )   (99.8 )
                               
Net earnings   $ 41.7     $ 41.2     $ 0.5     1.3 %
                               
Basic earnings per share on common stock                              
  Earnings from continuing operations   $ 1.09     $ 1.07     $ 0.02     1.9 %
  Earnings from discontinued operations     -       0.01       (0.01 )   (100.0 )
  Net earnings     1.09       1.09       -     -  
                               
Diluted earnings per share on common stock                              
  Earnings from continuing operations   $ 1.09     $ 1.07     $ 0.02     1.9 %
  Earnings from discontinued operations     -       0.01       (0.01 )   (100.0 )
  Net earnings     1.09       1.09       -     -  
                               
                               
STATISTICS:                              
                               
Gross profit rate     16.3 %     16.5 %     (0.2 )pts.      
                               
Selling, general and administrative expenses:                              
  % of revenue     15.2       15.0       0.2        
  % of gross profit     93.1       90.7       2.4        
                               
% Return:                              
  Earnings from operations     1.1       1.5       (0.4 )      
  Earnings from continuing operations before taxes     1.0       1.5       (0.5 )      
  Earnings from continuing operations     1.0       1.0       0.0        
  Net earnings     1.0       1.0       0.0        
                               
Effective income tax rate     (5.0 )%     32.8 %     (37.8 )pts.      
                               
Average number of shares outstanding (millions):                              
  Basic     37.2       37.0                
  Diluted     37.3       37.0                
                               
Shares adjusted for nonvested restricted awards (millions):                              
  Basic     38.2       38.0                
  Diluted     38.2       38.0                
                               
                               
...
   
   
KELLY SERVICES, INC. AND SUBSIDIARIES  
RESULTS OF OPERATIONS BY SEGMENT  
(UNAUDITED)