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Kelly Services(R) Reports 4th Quarter and Full Year 2013 Results

TROY, MI -- (Marketwired) -- 01/30/14 -- Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a leader in providing workforce solutions, today announced results for the fourth quarter and full year of 2013.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the fourth quarter of 2013 totaled $1.4 billion, a 1% increase compared to the corresponding quarter of 2012. Revenue for the full year totaled $5.4 billion, a 1% decrease compared to the prior year.

Earnings from operations for the fourth quarter of 2013 totaled $9.6 million, compared to $9.8 million reported for the fourth quarter of 2012. Included in the results from operations for the fourth quarter of 2013 are restructuring charges of $0.3 million. 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 from both years, earnings from operations were $9.9 million in the fourth quarter of 2013 compared to $14.2 million in 2012.

Earnings from operations for the full year of 2013 totaled $53.3 million compared to $72.3 million in 2012. Included in the results from operations for 2013 are asset impairment charges of $1.7 million and restructuring charges of $1.6 million. Included in the results from operations for 2012 are asset impairment charges of $3.1 million and a restructuring benefit of $0.9 million. Excluding these items from both years, earnings from operations were $56.6 million in 2013 compared to $74.5 million in 2012.

Diluted earnings per share from continuing operations in the fourth quarter of 2013 were $0.45 compared to $0.23 per share in the fourth quarter of 2012. Included in diluted earnings per share from continuing operations for the fourth quarter of 2013 are restructuring charges of $0.01 per share. 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 from both years, diluted earnings per share from continuing operations for the fourth quarter of 2013 were $0.45 per share compared to $0.33 per share in 2012.

Diluted earnings per share from continuing operations for the full year of 2013 were $1.54 compared to $1.31 per share in 2012. Included in diluted earnings per share from continuing operations for 2013 are restructuring charges of $0.04 per share and asset impairment charges of $0.04 per share. 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. Excluding these charges from both periods, diluted earnings per share from continuing operations for 2013 were $1.62 per share compared to $1.34 per share in 2012.

Commenting on the fourth quarter, Camden stated, "Our performance exceeded our expectations, and we're pleased with the strategic progress we've made despite uneven global economic conditions. In the face of flat revenue growth, Kelly experienced an improvement in both GP and staffing fees, and continued to deliver double-digit revenue growth in our outsourcing and consulting segment."

Looking ahead, Camden sees 2014 as a year of significant investment in the Company's long-term growth. "The market is demanding access to specialized talent and more holistic workforce solutions, and we're going to invest heavily in those areas. We will hire niche recruiters, adapt our operating models, and build our talent supply chain capabilities with speed and intensity in 2014. We are confident these investments are right for our business, right for our customers and will support long-term growth for Kelly."

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 30, 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 retain the services of our senior management, local management and field personnel, our ability to adequately protect our intellectual property rights, including our brand, our ability to successfully develop new service offerings, our exposure to risks associated with services outside traditional staffing, including business process outsourcing, the risks associated with past and future acquisitions, exposure to risks associated with investments in equity affiliates, material changes in demand from or loss of large corporate customers, risks associated with conducting business in foreign countries, including foreign currency fluctuations, 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, 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 maintain adequate financial and management processes and controls, impairment charges triggered by adverse industry or market developments, unexpected changes in claim trends on workers' compensation, disability and medical benefit plans, the net financial impact of the Patient Protection and Affordable Care Act on our business, the impact of changes in laws and regulations (including federal, state and international tax laws), the risk of additional tax or unclaimed property liabilities in excess of our estimates, 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, 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 provided employment to approximately 440,000 employees in 2013. Revenue in 2013 was $5.4 billion. Visit kellyservices.com and connect with us on Facebook, LinkedIn, and 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 DECEMBER 29, 2013 AND DECEMBER 30, 2012
                                (UNAUDITED)
               (In millions of dollars except per share data)

                                 2013       2012      Change       % Change
                               --------   --------   -------       --------

Revenue from services          $1,385.8   $1,375.4   $  10.4            0.8%

Cost of services                1,154.3    1,153.2       1.1            0.1
                               --------   --------   -------       --------

Gross profit                      231.5      222.2       9.3            4.1

Selling, general and
 administrative
expenses                          221.9      209.3      12.6            6.0

Asset impairments                     -        3.1      (3.1)        (100.0)
                               --------   --------   -------       --------

Earnings from operations            9.6        9.8      (0.2)          (2.7)

Other expense, net                  0.6        1.7      (1.1)         (66.2)
                               --------   --------   -------       --------

Earnings from continuing
 operations before taxes            9.0        8.1       0.9           10.4

Income tax benefit                  8.2        0.8       7.4             NM
                               --------   --------   -------       --------

Earnings from continuing
 operations                        17.2        8.9       8.3           93.8

Earnings from discontinued
 operations, net of tax               -          -         -             NM
                               --------   --------   -------       --------

Net earnings                   $   17.2   $    8.9   $   8.3           93.7%
                               ========   ========   =======       ========

Basic earnings per share on
 common stock
  Earnings from continuing
   operations                  $   0.45   $   0.23   $  0.22           95.7%
  Earnings from discontinued
   operations                         -          -         -             NM
  Net earnings                     0.45       0.23      0.22           95.7

Diluted earnings per share on
 common stock
  Earnings from continuing
   operations                  $   0.45   $   0.23   $  0.22           95.7%
  Earnings from discontinued
   operations                         -          -         -             NM
  Net earnings                     0.45       0.23      0.22           95.7

----------------------------------------------------------------------------

STATISTICS:

Gross profit rate                  16.7%      16.2%      0.5 pts.

Selling, general and
 administrative expenses:
  % of revenue                     16.0       15.2       0.8
  % of gross profit                95.9       94.2       1.7

% Return:
  Earnings from operations          0.7        0.7       0.0
  Earnings from continuing
   operations before taxes          0.6        0.6       0.0
  Earnings from continuing
   operations                       1.2        0.6       0.6
  Net earnings                      1.2        0.6       0.6

Effective income tax rate         (91.1)%     (8.9)%   (82.2) 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                            38.6       38.3
  Diluted                          38.6       38.3



                   KELLY SERVICES, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF EARNINGS
       FOR THE 52 WEEKS ENDED DECEMBER 29, 2013 AND DECEMBER 30, 2012
                                (UNAUDITED)
               (In millions of dollars except per share data)

                                   2013       2012    Change       % Change
                                 --------   --------  ------       --------

Revenue from services            $5,413.1   $5,450.5  $(37.4)         (0.7)%

Cost of services                  4,523.6    4,553.9   (30.3)          (0.7)
                                 --------   --------  ------       --------

Gross profit                        889.5      896.6    (7.1)          (0.8)

Selling, general and
 administrative
expenses                            834.5      821.2    13.3            1.6

Asset impairments                     1.7        3.1    (1.4)         (47.1)
                                 --------   --------  ------       --------

Earnings from operations             53.3       72.3   (19.0)         (26.3)

Other expense, net                    4.5        3.5     1.0           29.7
                                 --------   --------  ------       --------

Earnings from continuing
 operations before taxes             48.8       68.8   (20.0)         (29.1)

Income tax (benefit) expense        (10.1)      19.1   (29.2)        (153.0)
                                 --------   --------  ------       --------

Earnings from continuing
 operations                          58.9       49.7     9.2           18.7

Earnings from discontinued
 operations, net of tax                 -        0.4    (0.4)         (99.8)
                                 --------   --------  ------       --------

Net earnings                     $   58.9   $   50.1  $  8.8           17.6%
                                 ========   ========  ======       ========

Basic earnings per share on
 common stock
  Earnings from continuing
   operations                    $   1.54   $   1.31  $ 0.23           17.6%
  Earnings from discontinued
   operations                           -       0.01   (0.01)        (100.0)
  Net earnings                       1.54       1.32    0.22           16.7

Diluted earnings per share on
 common stock
  Earnings from continuing
   operations                    $   1.54   $   1.31  $ 0.23           17.6%
  Earnings from discontinued
   operations                           -       0.01   (0.01)        (100.0)
  Net earnings                       1.54       1.32    0.22           16.7

-------------------------------- ---------- --------- ------------ ---------

STATISTICS:

Gross profit rate                    16.4%      16.5%   (0.1) pts.

Selling, general and
 administrative expenses:
  % of revenue                       15.4       15.1     0.3
  % of gross profit                  93.8       91.6     2.2

% Return:
  Earnings from operations            1.0        1.3    (0.3)
  Earnings from continuing
   operations before taxes            0.9        1.3    (0.4)
  Earnings from continuing
   operations                         1.1        0.9     0.2
  Net earnings                        1.1        0.9     0.2

Effective income tax rate           (20.8)%     27.8%  (48.6) pts.

Average number of shares
 outstanding
(millions):
  Basic                              37.3       37.0
  Diluted                            37.3       37.0

Shares adjusted for nonvested
 restricted awards
(millions):
  Basic                              38.3       38.0
  Diluted                            38.3       38.1



                   KELLY SERVICES, INC. AND SUBSIDIARIES
                      RESULTS OF OPERATIONS BY SEGMENT
                                (UNAUDITED)
                          (In millions of dollars)

                                                  Fourth Quarter
                                      -------------------------------------
                                                                   Constant
                                                                   Currency
                                       2013    2012   Change        Change
                                      ------  ------  ------       --------
AMERICAS
-------------------------------------
  Commercial
    Revenue from services             $641.5  $662.3    (3.1)%        (2.5)%
    Staffing fee-based income
     (included in revenue from
     services)                           4.0     3.6     9.6           11.2
    Gross profit                        95.7    96.1    (0.5)           0.2

    Gross profit rate                   14.9%   14.5%    0.4 pts.

  PT
    Revenue from services             $242.5  $255.6    (5.1)%        (5.0)%
    Staffing fee-based income
     (included in revenue from
     services)                           4.1     3.2    29.1           29.3
    Gross profit                        41.1    38.9     5.5            5.6

    Gross profit rate                   16.9%   15.2%    1.7 pts.

  Total Americas
    Revenue from services             $884.0  $917.9    (3.7)%        (3.2)%
    Staffing fee-based income
     (included in revenue from
     services)                           8.1     6.8    18.7           19.7
    Gross profit                       136.8   135.0     1.2            1.8
    Total SG&A expenses                110.4   102.4     7.8            8.4
    Earnings from operations            26.4    32.6   (19.4)

    Gross profit rate                   15.5%   14.7%    0.8 pts.
    Expense rates:
      % of revenue                      12.5    11.2     1.3
      % of gross profit                 80.8    75.8     5.0
    Operating margin                     3.0     3.6    (0.6)

EMEA
-------------------------------------
  Commercial
    Revenue from services             $232.2  $213.4     8.8%           6.6%
    Staffing fee-based income
     (included in revenue from
     services)                           5.1     4.9     5.5            6.2
    Gross profit                        34.8    32.7     6.5            4.4

    Gross profit rate                   15.0%   15.3%   (0.3) pts.

  PT
    Revenue from services             $ 48.0  $ 43.0    11.6%           8.4%
    Staffing fee-based income
     (included in revenue from
     services)                           3.4     3.7    (8.5)          (9.0)
    Gross profit                        10.6    10.3     3.8            1.6

    Gross profit rate                   22.2%   23.9%   (1.7) pts.

  Total EMEA
    Revenue from services             $280.2  $256.4     9.3%           6.9%
    Staffing fee-based income
     (included in revenue from
     services)                           8.5     8.6    (0.5)          (0.3)
    Gross profit                        45.4    43.0     5.9            3.8
    SG&A expenses excluding
     restructuring charges              42.2    42.6    (0.9)
    Restructuring charges                0.3     1.3   (74.8)
    Total SG&A expenses                 42.5    43.9    (3.0)          (5.1)
    Earnings from operations             2.9    (0.9)     NM
    Earnings from operations
     excluding restructuring charges     3.2     0.4      NM

    Gross profit rate                   16.2%   16.7%   (0.5) pts.
    Expense rates (excluding
     restructuring charges):
      % of revenue                      15.1    16.6    (1.5)
      % of gross profit                 92.9    99.3    (6.4)
    Operating margin (excluding
     restructuring charges)              1.1     0.1     1.0



                   KELLY SERVICES, INC. AND SUBSIDIARIES
                      RESULTS OF OPERATIONS BY SEGMENT
                                (UNAUDITED)
                          (In millions of dollars)

                                                  Fourth Quarter
                                      -------------------------------------
                                                                   Constant
                                                                   Currency
                                       2013    2012   Change        Change
                                      ------  ------  ------       --------
APAC
-------------------------------------
  Commercial
    Revenue from services             $ 87.3  $ 84.9     2.9%           8.9%
    Staffing fee-based income
     (included in revenue from
     services)                           2.4     2.4     2.2           10.6
    Gross profit                        12.5    11.7     6.2           13.5

    Gross profit rate                   14.3%   13.8%    0.5 pts.

  PT
    Revenue from services             $  9.3  $ 11.7   (20.7)%       (14.4)%
    Staffing fee-based income
     (included in revenue from
     services)                           2.1     2.9   (27.2)         (21.8)
    Gross profit                         3.5     4.3   (18.5)         (11.9)

    Gross profit rate                   37.7%   36.7%    1.0 pts.

  Total APAC
    Revenue from services             $ 96.6  $ 96.6     0.1%           6.1%
    Staffing fee-based income
     (included in revenue from
     services)                           4.5     5.3   (14.0)          (7.2)
    Gross profit                        16.0    16.0    (0.4)           6.7
    Total SG&A expenses                 14.7    15.9    (7.9)          (1.3)
    Earnings from operations             1.3     0.1      NM

    Gross profit rate                   16.5%   16.6%   (0.1) pts.
    Expense rates:
      % of revenue                      15.2    16.5    (1.3)
      % of gross profit                 91.8    99.3    (7.5)
    Operating margin                     1.4     0.1     1.3

OCG
-------------------------------------
    Revenue from services             $140.1  $113.3    23.6%          24.0%
    Gross profit                        34.4    29.0    18.4           18.8
    Total SG&A expenses                 27.8    25.8     7.8            8.2
    Earnings from operations             6.6     3.2   100.9

    Gross profit rate                   24.5%   25.6%   (1.1) pts.
    Expense rates:
      % of revenue                      19.8    22.7    (2.9)
      % of gross profit                 80.8    88.7    (7.9)
    Operating margin                     4.7     2.9     1.8



                   KELLY SERVICES, INC. AND SUBSIDIARIES
                      RESULTS OF OPERATIONS BY SEGMENT
                                (UNAUDITED)
                          (In millions of dollars)

                                            December Year to Date
                                  -----------------------------------------
                                                                   Constant
                                                                   Currency
                                    2013      2012    Change        Change
                                  --------  --------  ------       --------
AMERICAS
---------------------------------
  Commercial
    Revenue from services         $2,545.6  $2,642.4    (3.7)%        (3.3)%
    Staffing fee-based income
     (included in revenue from
     services)                        16.0      15.7     2.0            3.1
    Gross profit                     370.2     388.2    (4.7)          (4.3)

    Gross profit rate                 14.5%     14.7%   (0.2) pts.

  PT
    Revenue from services         $1,001.4  $1,029.7    (2.8)%        (2.7)%
    Staffing fee-based income
     (included in revenue from
     services)                        16.4      14.5    12.9           13.1
    Gross profit                     163.5     159.7     2.4            2.4

    Gross profit rate                 16.3%     15.5%    0.8 pts.

  Total Americas
    Revenue from services         $3,547.0  $3,672.1    (3.4)%        (3.2)%
    Staffing fee-based income
     (included in revenue from
     services)                        32.4      30.2     7.2            7.9
    Gross profit                     533.7     547.9    (2.6)          (2.4)
    Total SG&A expenses              424.9     405.8     4.7            5.0
    Earnings from operations         108.8     142.1   (23.5)

    Gross profit rate                 15.0%     14.9%    0.1 pts.
    Expense rates:
      % of revenue                    12.0      11.1     0.9
      % of gross profit               79.6      74.1     5.5
    Operating margin                   3.1       3.9    (0.8)

EMEA
---------------------------------
  Commercial
    Revenue from services         $  877.5  $  854.6     2.7%           1.4%
    Staffing fee-based income
     (included in revenue from
     services)                        20.6      22.4    (7.9)          (7.8)
    Gross profit                     133.6     133.8    (0.1)          (1.4)

    Gross profit rate                 15.2%     15.7%   (0.5) pts.

  PT
    Revenue from services         $  179.7  $  168.3     6.7%           5.0%
    Staffing fee-based income
     (included in revenue from
     services)                        15.2      16.8    (9.5)          (9.8)
    Gross profit                      42.6      43.0    (0.7)          (2.0)

    Gross profit rate                 23.7%     25.5%   (1.8) pts.

  Total EMEA
    Revenue from services         $1,057.2  $1,022.9     3.4%           1.9%
    Staffing fee-based income
     (included in revenue from
     services)                        35.8      39.2    (8.6)          (8.6)
    Gross profit                     176.2     176.8    (0.2)          (1.6)
    SG&A expenses excluding
     restructuring charges           164.3     169.0    (2.8)
    Restructuring charges              0.4      (0.9)  156.6
    Total SG&A expenses              164.7     168.1    (1.9)          (3.3)
    Earnings from operations          11.5       8.7    32.9
    Earnings from operations
     excluding restructuring
     charges                          11.9       7.8    54.9

    Gross profit rate                 16.7%     17.3%   (0.6) pts.
    Expense rates (excluding
     restructuring charges):
      % of revenue                    15.5      16.5    (1.0)
      % of gross profit               93.2      95.6    (2.4)
    Operating margin (excluding
     restructuring charges)            1.1       0.8     0.3



                   KELLY SERVICES, INC. AND SUBSIDIARIES
                      RESULTS OF OPERATIONS BY SEGMENT
                                (UNAUDITED)
                          (In millions of dollars)

                                              December Year to Date
                                      -------------------------------------
                                                                   Constant
                                                                   Currency
                                       2013    2012   Change        Change
                                      ------  ------  ------       --------
APAC
-------------------------------------
  Commercial
    Revenue from services             $344.1  $343.2     0.3%           3.4%
    Staffing fee-based income
     (included in revenue from
     services)                          10.6    11.7    (9.1)          (5.1)
    Gross profit                        49.3    50.1    (1.7)           1.8

    Gross profit rate                   14.3%   14.6%   (0.3) pts.

  PT
    Revenue from services             $ 38.6  $ 51.6   (25.2)%       (21.9)%
    Staffing fee-based income
     (included in revenue from
     services)                           8.8    15.8   (44.7)         (42.5)
    Gross profit                        14.0    21.0   (33.4)         (30.5)

    Gross profit rate                   36.2%   40.6%   (4.4) pts.

  Total APAC
    Revenue from services             $382.7  $394.8    (3.1)%          0.1%
    Staffing fee-based income
     (included in revenue from
     services)                          19.4    27.5   (29.6)         (26.6)
    Gross profit                        63.3    71.1   (11.0)          (7.7)
    SG&A expenses excluding
     restructuring charges              60.2    73.4   (18.1)
    Restructuring charges                0.3       -      NM
    Total SG&A expenses                 60.5    73.4   (17.7)         (14.6)
    Earnings from operations             2.8    (2.3)     NM
    Earnings from operations
     excluding restructuring charges     3.1    (2.3)     NM

    Gross profit rate                   16.5%   18.0%   (1.5) pts.
    Expense rates (excluding
     restructuring charges):
      % of revenue                      15.7    18.6    (2.9)
      % of gross profit                 95.1   103.3    (8.2)
    Operating margin (excluding
     restructuring charges)              0.8    (0.6)    1.4

OCG
-------------------------------------
    Revenue from services             $475.9  $396.1    20.2%          20.4%
    Gross profit                       119.8   104.0    15.1           15.4
    SG&A expenses excluding
     restructuring charges             105.5    95.4    10.6
    Restructuring charges                0.9       -      NM
    Total SG&A expenses                106.4    95.4    11.5           11.7
    Asset impairments                    1.7       -      NM
    Earnings from operations            11.7     8.6    35.6
    Earnings from operations
     excluding restructuring charges    12.6     8.6    44.9

    Gross profit rate                   25.2%   26.3%   (1.1) pts.
    Expense rates (excluding
     restructuring charges):
      % of revenue                      22.2    24.1    (1.9)
      % of gross profit                 88.1    91.6    (3.5)
    Operating margin (excluding
     restructuring charges)              2.7     2.2     0.5





                   KELLY SERVICES, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                                (UNAUDITED)
                          (In millions of dollars)

                                              Dec. 29, 2013   Dec. 30, 2012
                                             --------------  --------------
Current Assets
  Cash and equivalents                       $        125.7  $         76.3
  Trade accounts receivable, less allowances
   of $9.9 and $10.4, respectively                  1,023.1         1,013.9
  Prepaid expenses and other current assets            52.2            57.5
  Deferred taxes                                       35.5            44.9
                                             --------------  --------------

    Total current assets                            1,236.5         1,192.6

Property and Equipment, Net                            92.0            89.9

Noncurrent Deferred Taxes                             121.7            82.8

Goodwill, Net                                          90.3            89.5

Other Assets                                          258.1           180.9
                                             --------------  --------------

Total Assets                                 $      1,798.6  $      1,635.7
                                             ==============  ==============

Current Liabilities
  Short-term borrowings                      $         28.3  $         64.1
  Accounts payable and accrued liabilities            342.4           295.6
  Accrued payroll and related taxes                   294.9           264.5
  Accrued insurance                                    27.6            32.8
  Income and other taxes                               68.8            65.3
                                             --------------  --------------

    Total current liabilities                         762.0           722.3

Noncurrent Liabilities
  Accrued insurance                                    46.0            43.5
  Accrued retirement benefits                         134.7           111.0
  Other long-term liabilities                          33.3            17.9
                                             --------------  --------------

    Total noncurrent liabilities                      214.0           172.4

Stockholders' Equity
  Common stock                                         40.1            40.1
  Treasury stock                                      (56.2)          (61.6)
  Paid-in capital                                      26.0            27.1
  Earnings invested in the business                   751.3           700.0
  Accumulated other comprehensive income               61.4            35.4
                                             --------------  --------------

    Total stockholders' equity                        822.6           741.0
                                             --------------  --------------

Total Liabilities and Stockholders' Equity   $      1,798.6  $      1,635.7
                                             ==============  ==============

---------------------------------------------------------------------------

STATISTICS:
  Working Capital                            $        474.5  $        470.3
  Current Ratio                                         1.6             1.7
  Debt-to-capital %                                     3.3%            8.0%
  Global Days Sales Outstanding                          52              53




                   KELLY SERVICES, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
       FOR THE 52 WEEKS ENDED DECEMBER 29, 2013 AND DECEMBER 30, 2012
                                (UNAUDITED)
                          (In millions of dollars)

                                                              2013    2012
                                                             ------  ------

Cash flows from operating activities
  Net earnings                                               $ 58.9  $ 50.1
  Noncash adjustments:
    Impairment of assets                                        1.7     3.1
    Depreciation and amortization                              20.4    22.3
    Provision for bad debts                                     2.0     1.1
    Stock-based compensation                                    3.8     4.8
    Other, net                                                  0.6     1.3
  Changes in operating assets and liabilities                  27.9   (21.6)
                                                             ------  ------

      Net cash from operating activities                      115.3    61.1
                                                             ------  ------

Cash flows from investing activities
  Capital expenditures                                        (20.0)  (21.5)
  Investment in equity affiliate                                  -    (6.6)
  Other investing activities                                   (0.8)      -
                                                             ------  ------

      Net cash used in investing activities                   (20.8)  (28.1)
                                                             ------  ------

Cash flows from financing activities
  Net change in short-term borrowings                         (35.8)  (31.9)
  Dividend payments                                            (7.6)   (7.6)
  Other financing activities                                   (0.3)    0.1
                                                             ------  ------

      Net cash used in financing activities                   (43.7)  (39.4)
                                                             ------  ------

Effect of exchange rates on cash and equivalents               (1.4)    1.7
                                                             ------  ------

Net change in cash and equivalents                             49.4    (4.7)
Cash and equivalents at beginning of period                    76.3    81.0
                                                             ------  ------


Cash and equivalents at end of period                        $125.7  $ 76.3
                                                             ======  ======




                   KELLY SERVICES, INC. AND SUBSIDIARIES
                           REVENUE FROM SERVICES
                                (UNAUDITED)
                         (In millions of dollars)

                                   Fourth Quarter (Commercial, PT and OCG)
                                   ---------------------------------------
                                                             % Change
                                                                  Constant
                                      2013      2012      US$     Currency
                                   --------- --------- --------   --------

Americas
  United States                    $   872.6 $   877.9     (0.6)%     (0.6)%
  Canada                                52.4      60.5    (13.3)      (8.4)
  Mexico                                33.9      35.3     (4.1)      (3.5)
  Puerto Rico                           24.6      23.4      5.1        5.1
  Brazil                                14.0      14.0     (0.0)      10.3
                                   --------- --------- --------   --------
Total Americas                         997.5   1,011.1     (1.3)      (0.9)

EMEA
  Switzerland                           70.3      61.2     15.0       11.6
  France                                66.1      58.8     12.3        7.1
  Russia                                33.0      33.9     (2.9)       1.7
  Portugal                              27.3      19.0     43.9       37.2
  United Kingdom                        27.2      25.6      6.2        5.4
  Germany                               17.5      16.4      6.9        1.9
  Italy                                 15.3      14.6      4.7       (0.2)
  Norway                                14.8      15.5     (4.3)       1.9
  Other                                 16.9      19.0    (10.7)     (13.9)
                                   --------- --------- --------   --------
Total EMEA                             288.4     264.0      9.3        6.9

APAC
  Singapore                             30.6      26.5     15.6       18.2
  Australia                             30.2      33.9    (10.9)      (0.5)
  Malaysia                              16.1      18.0    (10.9)      (6.5)
  New Zealand                           14.0      12.9      8.3        7.6
  Other                                  9.0       9.0      0.9       15.3
                                   --------- --------- --------   --------
Total APAC                              99.9     100.3     (0.4)       5.8

Total Kelly Services, Inc.         $ 1,385.8 $ 1,375.4      0.8%       1.1%
                                   ========= =========




                   KELLY SERVICES, INC. AND SUBSIDIARIES
                           REVENUE FROM SERVICES
                                (UNAUDITED)
                         (In millions of dollars)

                            December Year to Date (Commercial, PT and OCG)
                           -----------------------------------------------
                                                           % Change
                                                                 Constant
                               2013        2012        US$       Currency
                           ----------- ----------- ----------   ----------
Americas
  United States            $   3,419.9 $   3,464.2       (1.3)%       (1.3)%
  Canada                         216.3       243.9      (11.3)        (8.7)
  Mexico                         133.3       117.7       13.3          9.9
  Puerto Rico                     98.2        99.7       (1.5)        (1.5)
  Brazil                          59.0        60.7       (2.8)         7.4
                           ----------- ----------- ----------   ----------
Total Americas                 3,926.7     3,986.2       (1.5)        (1.3)

EMEA
  Switzerland                    255.9       235.6        8.6          7.2
  France                         248.1       243.0        2.1         (1.2)
  Russia                         135.0       131.0        3.0          5.7
  United Kingdom                 105.3       104.9        0.4          1.7
  Portugal                        90.3        75.0       20.4         16.3
  Germany                         66.8        70.3       (4.9)        (8.0)
  Norway                          61.1        66.3       (7.7)        (6.8)
  Italy                           58.9        59.1       (0.4)        (3.5)
  Other                           67.6        67.4        0.3         (2.4)
                           ----------- ----------- ----------   ----------
Total EMEA                     1,089.0     1,052.6        3.5          2.1

APAC
  Australia                      130.6       135.5       (3.6)         3.1
  Singapore                      114.1       101.6       12.3         12.6
  Malaysia                        67.2        72.9       (7.9)        (6.0)
  New Zealand                     50.1        52.4       (4.4)        (5.5)
  Other                           35.4        49.3      (28.2)       (22.0)
                           ----------- ----------- ----------   ----------
Total APAC                       397.4       411.7       (3.5)        (0.3)

Total Kelly Services, Inc. $   5,413.1 $   5,450.5       (0.7)%       (0.6)%
                           =========== ===========




                   KELLY SERVICES, INC. AND SUBSIDIARIES
                    RECONCILIATION OF NON-GAAP MEASURES
       FOR THE 13 WEEKS ENDED DECEMBER 29, 2013 AND DECEMBER 30, 2012
                                (UNAUDITED)
               (In millions of dollars except per share data)

                                 2013                     2012
                -------------------------------------  ----------
                           Restructuring
                   As        Charges        Adjusted    Adjusted
                reported     (Note 1)       Earnings    Earnings   % Change
                --------  --------------  -----------  ----------  --------

Revenue from
 services       $1,385.8  $            -  $   1,385.8  $  1,375.4       0.8%

Cost of
 services        1,154.3               -      1,154.3     1,153.2       0.1
                --------  --------------  -----------  ----------  --------

Gross profit       231.5               -        231.5       222.2       4.1

Selling,
 general and
 administrative
 expenses          221.9            (0.3)       221.6       208.0       6.5

Asset
 impairments           -               -            -           -        NM
                --------  --------------  -----------  ----------  --------

Earnings from
 operations          9.6             0.3          9.9        14.2     (30.5)

Other expense,
 net                 0.6               -          0.6         1.0     (39.6)
                --------  --------------  -----------  ----------  --------

Earnings from
 continuing
 operations
 before taxes        9.0             0.3          9.3        13.2     (29.9)

Income tax
 expense
 (benefit)          (8.2)              -         (8.2)        0.6        NM
                --------  --------------  -----------  ----------  --------

Earnings from
 continuing
 operations     $   17.2  $          0.3  $      17.5  $     12.6      39.7%
                ========  ==============  ===========  ==========  ========

Earnings per
 share from
 continuing
 operations:
  Basic         $   0.45  $         0.01  $      0.45  $     0.33      36.4%
  Diluted       $   0.45  $         0.01  $      0.45  $     0.33      36.4%

                                            2012
                -----------------------------------------------------------
                                                         Loss on
                           Restructuring     Asset       Equity
                   As        Charges      Impairments  Investment  Adjusted
                reported     (Note 1)       (Note 2)    (Note 3)   Earnings
                --------  --------------  -----------  ----------  --------

Revenue from
 services       $1,375.4  $            -  $         -  $        -  $1,375.4

Cost of
 services        1,153.2               -            -           -   1,153.2
                --------  --------------  -----------  ----------  --------

Gross profit       222.2               -            -           -     222.2

Selling,
 general and
 administrative
 expenses          209.3            (1.3)           -           -     208.0

Asset
 impairments         3.1               -         (3.1)          -         -
                --------  --------------  -----------  ----------  --------

Earnings from
 operations          9.8             1.3          3.1           -      14.2

Other expense,
 net                 1.7               -            -        (0.7)      1.0
                --------  --------------  -----------  ----------  --------

Earnings from
 continuing
 operations
 before taxes        8.1             1.3          3.1         0.7      13.2

Income tax
 expense
 (benefit)          (0.8)            0.5          1.2        (0.3)      0.6
                --------  --------------  -----------  ----------  --------

Earnings from
 continuing
 operations     $    8.9  $          0.8  $       1.9  $      1.0  $   12.6
                ========  ==============  ===========  ==========  ========

Earnings per
 share from
 continuing
 operations:
  Basic         $   0.23  $         0.02  $      0.05  $     0.03  $   0.33
  Diluted       $   0.23  $         0.02  $      0.05  $     0.03  $   0.33

Note: Earnings per share amounts for each quarter are required to be
computed independently and may not equal the amounts computed for the total
year.



                   KELLY SERVICES, INC. AND SUBSIDIARIES
                    RECONCILIATION OF NON-GAAP MEASURES
      FOR THE 52 WEEKS ENDED DECEMBER 29, 2013 AND DECEMBER 30, 2012
                                (UNAUDITED)
              (In millions of dollars except per share data)

                                   2013                      2012
                 ----------------------------------------  --------
                         Restructuring  Asset
                    As      Charges  Impairments Adjusted   Adjusted   %
                 reported   (Note 1)  (Note 2)   Earnings   Earnings Change
                 --------  ----------  ------  ----------  -------- ------

Revenue from
 services        $5,413.1  $        -  $    -  $  5,413.1  $5,450.5   (0.7)%

Cost of services  4,523.6           -       -     4,523.6   4,553.9   (0.7)
                 --------  ----------  ------  ----------  -------- ------

Gross profit        889.5           -       -       889.5     896.6   (0.8)

Selling, general
 and
 administrative
 expenses           834.5        (1.6)      -       832.9     822.1    1.3

Asset
 impairments          1.7           -    (1.7)          -         -     NM
                 --------  ----------  ------  ----------  -------- ------

Earnings from
 operations          53.3         1.6     1.7        56.6      74.5  (24.1)

Other expense,
 net                  4.5           -       -         4.5       2.8   64.5
                 --------  ----------  ------  ----------  -------- ------

Earnings from
 continuing
 operations
 before taxes        48.8         1.6     1.7        52.1      71.7  (27.5)

Income tax
 expense
 (benefit)          (10.1)        0.1       -       (10.0)     20.5 (148.8)
                 --------  ----------  ------  ----------  -------- ------

Earnings from
 continuing
 operations      $   58.9  $      1.5  $  1.7  $     62.1  $   51.2   21.4%
                 ========  ==========  ======  ==========  ======== ======


Earnings per
 share from
 continuing
 operations:
  Basic          $   1.54  $     0.04  $ 0.04  $     1.62  $   1.34   20.9%
  Diluted        $   1.54  $     0.04  $ 0.04  $     1.62  $   1.34   20.9%

                                        2012
                 --------------------------------------------------
                                                Loss on
                         Restructuring  Asset    Equity
                    As      Charges Impairments Investment Adjusted
                 reported   (Note 1)  (Note 2)  (Note 3)   Earnings
                 --------  ----------  ------  ----------  --------

Revenue from
 services        $5,450.5  $        -  $    -  $        -  $5,450.5

Cost of services  4,553.9           -       -           -   4,553.9
                 --------  ----------  ------  ----------  --------

Gross profit        896.6           -       -           -     896.6

Selling, general
 and
 administrative
 expenses           821.2         0.9       -           -     822.1

Asset
 impairments          3.1           -    (3.1)          -         -
                 --------  ----------  ------  ----------  --------

Earnings from
 operations          72.3        (0.9)    3.1           -      74.5

Other expense,
 net                  3.5           -       -        (0.7)      2.8
                 --------  ----------  ------  ----------  --------

Earnings from
 continuing
 operations
 before taxes        68.8        (0.9)    3.1         0.7      71.7

Income tax
 expense
 (benefit)           19.1         0.5     1.2        (0.3)     20.5
                 --------  ----------  ------  ----------  --------

Earnings from
 continuing
 operations      $   49.7  $     (1.4) $  1.9  $      1.0  $   51.2
                 ========  ==========  ======  ==========  ========


Earnings per
 share from
 continuing
 operations:
  Basic          $   1.31  $    (0.04) $ 0.05  $     0.03  $   1.34
  Diluted        $   1.31  $    (0.04) $ 0.05  $     0.03  $   1.34

Note: Earnings per share amounts for each quarter are required to be
computed independently and may not equal the amounts computed for the total
year.




                    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 2013 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 2013, restructuring charges primarily relate to severance costs
    incurred from the Company's decision to exit the OCG executive search
    business operating in Germany, along with adjustments to prior
    restructuring costs, primarily in France and Italy. In 2012,
    restructuring charges relate to severance and lease termination costs
    for EMEA Commercial branches which were in the process of closing, along
    with revisions of the estimated lease termination costs for EMEA
    Commercial branches that closed in prior years.

(2) In 2013, asset impairment charges represent the write-off of the
    carrying value of long-lived assets related to the decision to exit the
    executive search business operating in Germany. In 2012, 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.


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