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Kelly Services Inc.$21.46($.12)(.56%)

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 Kelly Services(R) Reports Strong Finish to the Year and Solid 2015Results
   Thursday, February 04, 2016 7:30:50 AM ET

Kelly Services (KELYA ) (KELYB )

Fourth Quarter Highlights


--  Earnings from operations triple from a year ago, excluding restructuring
--  Earnings per share of $0.88 versus $0.54, excluding restructuring, a 63%
    increase year-over-year
--  OCG segment revenue up 14% year-over-year (up 16% in constant currency)
--  Total Company revenue up 3% year-over-year (up 7% in constant currency)


Kelly Services (KELYA ) (KELYB ), a global leader in providing workforce solutions, today announced results for the fourth quarter and full year of 2015.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the fourth quarter of 2015 totaled $1.5 billion, a 3% increase (a 7% increase on a constant currency basis) compared to the corresponding quarter of 2014. Revenue for the full year totaled $5.5 billion, a 1% decrease (a 5% increase on a constant currency basis) compared to the prior year. Fourth quarter 2015 and fiscal 2015 include 14 and 53 weeks, respectively.

Earnings from operations for the fourth quarter of 2015 totaled $26.5 million, compared to $2.6 million reported for the fourth quarter of 2014. The results of operations in the fourth quarter of 2014 included restructuring charges of $6.2 million. Excluding the restructuring charges, earnings from operations were $8.8 million in the fourth quarter of 2014.

Earnings from operations for the full year of 2015 totaled $66.7 million compared to $21.9 million in 2014. Included in the results from operations for 2014 are restructuring charges of $12.0 million. Excluding this item, earnings from operations were $33.9 million in 2014.

Diluted earnings per share in the fourth quarter of 2015 were $0.88 compared to $0.44 per share in the fourth quarter of 2014. Included in diluted earnings per share for the fourth quarter of 2014 are restructuring charges of $0.10 per share. Excluding this item, diluted earnings per share for the fourth quarter of 2014 were $0.54 per share.

Diluted earnings per share for the full year of 2015 were $1.39 compared to $0.61 per share in 2014. The diluted earnings per share for 2014 included restructuring charges of $0.19 per share. Excluding this item, diluted earnings per share for 2014 were $0.81 per share.

Commenting on the fourth quarter, Camden stated, "Kelly’s fourth quarter performance capped off a year of solid earnings growth, and we are very pleased with our strong operating leverage and strategic execution throughout 2015. All told, excluding the 2014 restructuring charges, we dropped nearly 70% of our full-year constant currency GP dollar growth to the bottom line. Kelly has entered 2016 as a more efficient organization keenly focused on profitability???and we expect our investments in PT and OCG to continue yielding results as we expand Kelly’s role as a trusted talent advisor to our clients worldwide."

In conjunction with its fourth quarter and full year earnings release, Kelly Services has published a financial presentation regarding the fourth quarter and full year results on the Investor Relations page of our public website and will host a conference call at 9:00 a.m. (ET) on February 4, to review the results and answer questions. The call may be accessed in one of the following ways:

Via the Telephone:

U.S. 1 800 288-9626

International 1 651 291-5254

The pass code is Kelly Services

Via the Internet:

The call is also available via the internet through the Kelly Services website:

www.kellyservices.com

This release contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties. These factors include, but are not limited to, competitive market pressures including pricing and technology introductions, changing market and economic conditions, our ability to achieve our business strategy, the risk of damage to our brand, the risk our intellectual assets could be infringed upon or compromised, our ability to successfully develop new service offerings, our exposure to risks associated with services outside traditional staffing, including business process outsourcing, our increasing dependency on third parties for the execution of critical functions, 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 full-time employees to lead complex talent supply chain sales and operations, availability of temporary workers with appropriate skills required by customers, liabilities for employment-related claims and losses, including class action lawsuits and collective actions, the risk of cyber attacks or other breaches of network or information technology security as well as risks associated with compliance on data privacy, 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 developments or operational circumstances, unexpected changes in claim trends on workers’ compensation, disability and medical benefit plans, the 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 to continue to access credit markets, 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 ®

As a global leader in providing workforce solutions, Kelly Services, Inc. (KELYA ) (KELYB ) and its subsidiaries, offer a comprehensive array of outsourcing and consulting services as well as world-class staffing on a temporary, temporary-to-hire, and direct-hire basis. Kelly® has a role in managing employment opportunities for more than one million workers around the globe by employing 550,000 of these individuals directly with the remaining workers engaged through its talent supply chain network of supplier partners. Revenue in 2015 was $5.5 billion. Visit kellyservices.com and connect with us on Facebook, LinkedIn, & Twitter.

KLYA-FIN




                   KELLY SERVICES, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 14 WEEKS ENDED JANUARY 3, 2016 AND 13 WEEKS ENDED DECEMBER 28, 2014
                                (UNAUDITED)
               (In millions of dollars except per share data)

                                                              %      CC %
                     2015         2014        Change       Change   Change
                  ------------ ------------ -----------    -------  -------

Revenue from
 services         $  1,461.6   $  1,425.0   $     36.6         2.6%     7.3%

Cost of services     1,212.1      1,192.4         19.7         1.7
                   -----------  -----------  ----------

Gross profit           249.5        232.6         16.9         7.2     11.7

Selling, general
 and
 administrative
 expenses              223.0        230.0         (7.0)       (3.1)     0.5
                   -----------  -----------  ----------

Earnings from
 operations             26.5          2.6         23.9          NM

Other expense,
 net                     0.7          1.1         (0.4)      (40.9)
                   -----------  -----------  ----------

Earnings before
 taxes                  25.8          1.5         24.3          NM

Income tax
 (benefit)
 expense                (8.4)       (15.5)         7.1        46.1
                   -----------  -----------  ----------

Net earnings      $     34.2   $     17.0   $     17.2        99.5%
                   ===========  ===========  ==========

Basic earnings
 per share        $     0.88   $     0.44   $     0.44       100.0%
Diluted earnings
 per share        $     0.88   $     0.44   $     0.44       100.0%

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

STATISTICS:

Gross profit rate       17.1%        16.3%         0.8 pts.

Selling, general
 and
 administrative
 expenses:
  % of revenue          15.3         16.1         (0.8)
  % of gross
   profit               89.4         98.8         (9.4)

% Return:
  Earnings from
   operations            1.8          0.2          1.6
  Earnings before
   taxes                 1.8          0.1          1.7
  Net earnings           2.3          1.2          1.1

Effective income
 tax rate              (32.4)%     (949.7)%      917.3 pts.

Average number of
 shares
 outstanding
 (millions):
  Basic                 38.0         37.7
  Diluted               38.0         37.7

Shares adjusted
 for nonvested
 restricted
 awards
 (millions):
  Basic                 38.9         38.9
  Diluted               38.9         38.9





                   KELLY SERVICES, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 53 WEEKS ENDED JANUARY 3, 2016 AND 52 WEEKS ENDED DECEMBER 28, 2014
                                (UNAUDITED)
              (In millions of dollars except per share data)


                                                             %       CC %
                     2015        2014        Change       Change    Change
                  ----------- ------------ -----------    --------- --------

Revenue from
 services         $  5,518.2  $  5,562.7   $    (44.5)       (0.8)%     4.7%

Cost of services     4,597.9     4,654.3        (56.4)       (1.2)
                   ----------  -----------  ----------

Gross profit           920.3       908.4         11.9         1.3       6.4

Selling, general
 and
 administrative
 expenses              853.6       886.5        (32.9)       (3.7)      0.8
                   ----------  -----------  ----------

Earnings from
 operations             66.7        21.9         44.8       206.2

Other expense,
 net                     4.2         5.3         (1.1)      (19.9)
                   ----------  -----------  ----------

Earnings before
 taxes                  62.5        16.6         45.9       277.4

Income tax
 expense
 (benefit)               8.7        (7.1)        15.8       221.4
                   ----------  -----------  ----------

Net earnings      $     53.8  $     23.7   $     30.1       126.9%
                   ==========  ===========  ==========

Basic earnings
 per share        $     1.39  $     0.61   $     0.78       127.9%
Diluted earnings
 per share        $     1.39  $     0.61   $     0.78       127.9%

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

STATISTICS:

Gross profit rate       16.7%       16.3%         0.4 pts.

Selling, general
 and
 administrative
 expenses:
  % of revenue          15.5        15.9         (0.4)
  % of gross
   profit               92.8        97.6         (4.8)

% Return:
  Earnings from
   operations            1.2         0.4          0.8
  Earnings before
   taxes                 1.1         0.3          0.8
  Net earnings           1.0         0.4          0.6

Effective income
 tax rate               13.9%      (43.2)%       57.1 pts.

Average number of
 shares
 outstanding
 (millions):
  Basic                 37.8        37.5
  Diluted               37.9        37.5

Shares adjusted
 for nonvested
 restricted
 awards
 (millions):
  Basic                 38.8        38.6
  Diluted               38.9        38.6





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

                                           Fourth Quarter
                          -------------------------------------------------

                             2015        2014         %             CC %
                           (14 Wks)    (13 Wks)    Change          Change
                          ----------  ----------  ---------      ----------
AMERICAS
  Commercial
    Revenue from services $    696.1  $    694.5        0.2%            2.7%
    Staffing fee-based
     income included in
     revenue from
     services                    3.7         4.0       (5.5)           (3.2)
    Gross profit               110.0        99.6       10.3            12.5
    Gross profit rate           15.8        14.4%       1.4  pts.
  PT
    Revenue from services $    250.1  $    232.9        7.4%            7.8%
    Staffing fee-based
     income included in
     revenue from
     services                    4.5         3.9       17.0            18.7
    Gross profit                43.0        37.5       14.5            15.0
    Gross profit rate           17.2%       16.1%       1.1  pts.
  Total Americas
    Revenue from services $    946.2  $    927.4        2.0%            4.0%
    Staffing fee-based
     income included in
     revenue from
     services                    8.2         7.9        5.6             7.7
    Gross profit               153.0       137.1       11.4            13.2
    Total SG&A expenses        116.8       113.9        2.5             4.4
    Earnings from
     operations                 36.2        23.2       55.2

    Gross profit rate           16.2%       14.8%       1.4  pts.
    Expense rates:
      % of revenue              12.3        12.3          -
      % of gross profit         76.3        83.0       (6.7)
    Return on sales              3.8         2.5        1.3

EMEA
  Commercial
    Revenue from services $    200.5  $    204.5       (2.0)%          10.8%
    Staffing fee-based
     income included in
     revenue from
     services                    3.3         3.3       (0.8)           15.8
    Gross profit                27.5        29.6       (6.9)            5.7
    Gross profit rate           13.7%       14.4%      (0.7) pts.
  PT
    Revenue from services $     44.7  $     44.8       (0.3)%          12.3%
    Staffing fee-based
     income included in
     revenue from
     services                    2.4         2.8      (17.9)           (3.7)
    Gross profit                 9.4         9.6       (3.4)           10.3
    Gross profit rate           21.0%       21.7%      (0.7) pts.
  Total EMEA
    Revenue from services $    245.2  $    249.3       (1.7)%          11.1%
    Staffing fee-based
     income included in
     revenue from
     services                    5.7         6.1       (8.6)            6.9
    Gross profit                36.9        39.2       (6.1)            6.8
    Total SG&A expenses         29.7        36.4      (18.4)           (8.2)
    Earnings from
     operations                  7.2         2.8      152.4

    Gross profit rate           15.0%       15.7%      (0.7) pts.
    Expense rates:
      % of revenue              12.1        14.6       (2.5)
      % of gross profit         80.6        92.8      (12.2)
    Return on sales              2.9         1.1        1.8





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

                                            Fourth Quarter
                            ------------------------------------------------

                              2015        2014         %            CC %
                            (14 Wks)    (13 Wks)    Change         Change
                            ---------   ---------  ---------
APAC
  Commercial
    Revenue from services  $     88.1  $     91.3       (3.5)%         11.3%
    Staffing fee-based
     income included in
     revenue from services        1.3         2.0      (34.0)         (26.1)
    Gross profit                 10.4        11.8      (12.1)           1.0
    Gross profit rate            11.8%       12.9%      (1.1)  pts.
  PT
    Revenue from services  $      9.8  $     11.2      (12.7)%          0.6
    Staffing fee-based
     income included in
     revenue from services        1.2         2.0      (38.0)         (27.5)
    Gross profit                  2.4         3.3      (28.7)         (17.4)
    Gross profit rate            24.5%       29.9%      (5.4)  pts.
  Total APAC
    Revenue from services  $     97.9  $    102.5       (4.5)%         10.1
    Staffing fee-based
     income included in
     revenue from services        2.5         4.0      (36.0)         (26.8)
    Gross profit                 12.8        15.1      (15.7)          (3.1)
    Total SG&A expenses          11.2        13.1      (13.8)          (1.4)
    Earnings from
     operations                   1.6         2.0      (27.5)

    Gross profit rate            13.0%       14.8%      (1.8)  pts.
    Expense rates:
      % of revenue               11.4        12.7       (1.3)
      % of gross profit          87.8        85.8        2.0
    Return on sales               1.6         2.1       (0.5)

OCG
    Revenue from services  $    187.5  $    164.7       13.8%          15.6
    Gross profit                 48.0        42.3       13.8           16.1
    Total SG&A expenses          34.0        32.6        4.0            6.4
    Earnings from
     operations                  14.0         9.7       47.1

    Gross profit rate            25.6%       25.6%        --  pts.
    Expense rates:
      % of revenue               18.1        19.8       (1.7)
      % of gross profit          70.7        77.4       (6.7)
    Return on sales               7.5         5.8        1.7




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


                                         December Year to Date
                            -----------------------------------------------

                              2015        2014         %            CC %
                            (53 Wks)    (52 Wks)    Change         Change
                            ---------   ---------  ---------      ---------
AMERICAS
  Commercial
    Revenue from services  $  2,604.3  $  2,609.6       (0.2)%          2.0
    Staffing fee-based
     income included in
     revenue from services       14.5        14.4        1.0            3.5
    Gross profit                400.3       379.6        5.4            7.4
    Gross profit rate            15.4%       14.5%       0.9  pts.
  PT
    Revenue from services  $    971.9  $    956.0        1.7%           2.1
    Staffing fee-based
     income included in
     revenue from services       17.6        15.6       13.0           14.1
    Gross profit                165.0       155.9        5.9            6.3
    Gross profit rate            17.0%       16.3%       0.7  pts.
  Total Americas
    Revenue from services  $  3,576.2  $  3,565.6        0.3%           2.0
    Staffing fee-based
     income included in
     revenue from services       32.1        30.0        7.2            9.0
    Gross profit                565.3       535.5        5.5            7.1
    Total SG&A expenses         456.6       446.8        2.2            3.7
    Earnings from
     operations                 108.7        88.7       22.7

    Gross profit rate            15.8%       15.0%       0.8  pts.
    Expense rates:
      % of revenue               12.8        12.5        0.3
      % of gross profit          80.8        83.5       (2.7)
    Return on sales               3.0         2.5        0.5

EMEA
  Commercial
    Revenue from services  $    773.5  $    894.7      (13.6)%          2.7
    Staffing fee-based
     income included in
     revenue from services       13.2        17.3      (23.7)          (5.8)
    Gross profit                106.6       130.6      (18.4)          (2.9)
    Gross profit rate            13.8%       14.6%      (0.8) pts.
  PT
    Revenue from services  $    171.5  $    190.3       (9.8)%          6.5
    Staffing fee-based
     income included in
     revenue from services       10.1        13.5      (25.7)          (8.8)
    Gross profit                 36.6        42.9      (14.8)           2.0
    Gross profit rate            21.3%       22.6%      (1.3) pts.
  Total EMEA
    Revenue from services  $    945.0  $  1,085.0      (12.9)%          3.4
    Staffing fee-based
     income included in
     revenue from services       23.3        30.8      (24.5)          (7.1)
    Gross profit                143.2       173.5      (17.5)          (1.7)
    SG&A expenses
     excluding
     restructuring charges      129.2       160.6      (19.6)          (5.0)
    Restructuring charges           -         0.8     (100.0)             -
    Total SG&A expenses         129.2       161.4      (20.0)          (5.5)
    Earnings from
     operations                  14.0        12.1       16.1
    Earnings from
     operations excluding
     restructuring charges       14.0        12.9        8.8

    Gross profit rate            15.2%       16.0%      (0.8) pts.
    Expense rates
     (excluding
     restructuring
     charges):
      % of revenue               13.7        14.8       (1.1)
      % of gross profit          90.2        92.5       (2.3)
    Return on sales
     (excluding
     restructuring
     charges)                     1.5         1.2        0.3




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

                                         December Year to Date
                          --------------------------------------------------

                              2015        2014         %            CC %
                            (53 Wks)    (52 Wks)    Change         Change
                            ---------   ---------  ---------      ---------
APAC
  Commercial
    Revenue from services  $    347.2  $    351.8       (1.3)%         12.6
    Staffing fee-based
     income included in
     revenue from services        6.0         7.9      (23.8)         (14.7)
    Gross profit                 45.3        47.5       (4.6)           8.3
    Gross profit rate            13.0%       13.5%      (0.5) pts.
  PT
    Revenue from services  $     40.5  $     40.4        0.4%          14.9
    Staffing fee-based
     income included in
     revenue from services        5.6         7.8      (27.3)         (17.9)
    Gross profit                 10.5        12.7      (17.6)          (6.3)
    Gross profit rate            26.0%       31.6%      (5.6) pts.
  Total APAC
    Revenue from services  $    387.7  $    392.2       (1.1)%         12.9
    Staffing fee-based
     income included in
     revenue from services       11.6        15.7      (25.5)         (16.3)
    Gross profit                 55.8        60.2       (7.4)           5.2
    SG&A expenses
     excluding
     restructuring charges       46.7        56.4      (17.0)          (5.9)
    Restructuring charges           -         1.3     (100.0)             -
    Total SG&A expenses          46.7        57.7      (19.0)          (8.1)
    Earnings from
     operations                   9.1         2.5      261.6
    Earnings from
     operations excluding
     restructuring charges        9.1         3.8      134.2

    Gross profit rate            14.4%       15.4%      (1.0) pts.
    Expense rates
     (excluding
     restructuring
     charges):
      % of revenue               12.1        14.4       (2.3)
      % of gross profit          83.9        93.6       (9.7)
    Return on sales
     (excluding
     restructuring
     charges)                     2.3         1.0        1.3

OCG
    Revenue from services  $    673.8  $    586.8       14.8%          16.6
    Gross profit                160.6       143.6       11.9           14.2
    Total SG&A expenses         132.1       127.3        3.7            6.4
    Earnings from
     operations                  28.5        16.3       75.8

    Gross profit rate            23.8%       24.5%      (0.7) pts.
    Expense rates:
      % of revenue               19.6        21.7       (2.1)
      % of gross profit          82.2        88.7       (6.5)
    Return on sales               4.2         2.8        1.4





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


                                                    January 3,    Dec. 28,
                                                       2016         2014
                                                    ----------   ----------
Current Assets
  Cash and equivalents                             $      42.2  $      83.1
  Trade accounts receivable, less allowances of        1,139.1      1,122.8
   $10.5 and $10.7, respectively
  Prepaid expenses and other current assets               45.8         47.9
  Deferred taxes                                             -         34.4
                                                    ----------   ----------
Total current assets                                   1,227.1      1,288.2

Property and Equipment, Net                               88.9         93.0

Noncurrent Deferred Taxes                                189.3        146.3

Goodwill, Net                                             90.3         90.3

Other Assets                                             344.0        300.1
                                                    ----------   ----------

Total Assets                                       $   1,939.6  $   1,917.9
                                                    ==========   ==========

Current Liabilities
  Short-term borrowings                            $      55.5  $      91.9
  Accounts payable and accrued liabilities               405.5        364.0
  Accrued payroll and related taxes                      268.1        308.5
  Accrued insurance                                       26.7         26.9
  Income and other taxes                                  60.0         68.8
                                                    ----------   ----------

Total current liabilities                                815.8        860.1

Noncurrent Liabilities
  Accrued insurance                                       40.0         43.9
  Accrued retirement benefits                            141.0        140.8
  Other long-term liabilities                             47.4         39.4
                                                    ----------   ----------

Total noncurrent liabilities                             228.4        224.1

Stockholders’ Equity
  Common stock                                            40.1         40.1
  Treasury stock                                         (44.3)       (49.8)
  Paid-in capital                                         25.4         24.9
  Earnings invested in the business                      813.5        767.4
  Accumulated other comprehensive income                  60.7         51.1
                                                    ----------   ----------

Total stockholders’ equity                               895.4        833.7
                                                    ----------   ----------

Total Liabilities and Stockholders’ Equity         $   1,939.6  $   1,917.9
                                                    ==========   ==========

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

STATISTICS:
  Working Capital                                  $     411.3  $     428.1
  Current Ratio                                            1.5          1.5
  Debt-to-capital %                                        5.8%         9.9%
  Global Days Sales Outstanding                             54           54





                   KELLY SERVICES, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 53 WEEKS ENDED JANUARY 3, 2016 AND 52 WEEKS ENDED DECEMBER 28, 2014
                                (UNAUDITED)
                          (In millions of dollars)


                                                       2015         2014
                                                    ----------   ----------
Cash flows from operating activities:
  Net earnings                                     $      53.8  $      23.7
  Noncash adjustments:
    Depreciation and amortization                         22.3         21.7
    Provision for bad debts                                3.7          5.3
    Stock-based compensation                               6.1          5.3
    Other, net                                            (4.7)        (2.2)
  Changes in operating assets and liabilities            (57.7)      (123.8)
                                                    ----------   ----------

    Net cash from (used in) operating activities          23.5        (70.0)
                                                    ----------   ----------

Cash flows from investing activities:
  Capital expenditures                                   (16.9)       (21.7)
  Investment in equity affiliate                          (0.5)        (5.7)
  Other investing activities                              (0.2)         0.2
                                                    ----------   ----------

    Net cash used in investing activities                (17.6)       (27.2)
                                                    ----------   ----------

Cash flows from financing activities:
  Net change in short-term borrowings                    (34.7)        63.9
  Dividend payments                                       (7.7)        (7.6)
  Other financing activities                               0.2          0.3
                                                    ----------   ----------

    Net cash (used in) from financing activities         (42.2)        56.6
                                                    ----------   ----------

Effect of exchange rates on cash and equivalents          (4.6)        (2.0)
                                                    ----------   ----------

Net change in cash and equivalents                       (40.9)       (42.6)
Cash and equivalents at beginning of period               83.1        125.7
                                                    ----------   ----------


Cash and equivalents at end of period              $      42.2  $      83.1
                                                    ==========   ==========





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

                                 Fourth Quarter (Commercial, PT and OCG)
                              ---------------------------------------------

                                 2015        2014        %          CC %
                               (14 Wks)    (13 Wks)    Change      Change
                              ----------  ---------- ----------  ----------

Americas
  United States              $     998.8 $     933.9        6.9%        6.9%
  Canada                            38.0        50.0      (24.0)      (11.0)
  Mexico                            35.3        36.7       (3.9)       16.3
  Puerto Rico                       24.7        26.6       (7.1)       (7.1)
  Brazil                             8.7        13.9      (37.5)       (1.7)
                              ----------  ----------
Total Americas                   1,105.5     1,061.1        4.2         6.0

EMEA
  France                            65.6        66.4       (1.1)       12.8
  Switzerland                       55.5        57.8       (4.0)       (1.3)
  Portugal                          33.8        32.4        4.2        18.9
  United Kingdom                    26.7        23.2       15.1        20.3
  Russia                            18.2        20.9      (12.9)       22.2
  Germany                           16.2        16.8       (4.0)        9.5
  Italy                             14.5        13.9        3.9        18.7
  Norway                             9.7        11.9      (18.1)        2.1
  Other                             13.0        13.6       (4.4)        9.4
                              ----------  ----------
Total EMEA                         253.2       256.9       (1.4)       11.3

APAC
  Singapore                         33.0        32.7        0.7         9.5
  Australia                         31.1        32.6       (4.6)       13.5
  Malaysia                          14.1        16.2      (12.7)       11.4
  New Zealand                       11.2        13.2      (14.5)        0.4
  Other                             13.5        12.3        9.2        19.5
                              ----------  ----------
Total APAC                         102.9       107.0       (3.8)       11.0

Total Kelly Services, Inc.   $   1,461.6 $   1,425.0        2.6%        7.3%
                              ==========  ==========





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

                             December Year to Date (Commercial, PT and OCG)
                             ----------------------------------------------

                                2015        2014        %           CC %
                              (53 Wks)    (52 Wks)    Change       Change
                             ----------  ---------- ----------   ----------

Americas
  United States             $   3,705.2 $   3,535.8        4.8%         4.8%
  Canada                          160.2       198.2      (19.2)        (6.9)
  Mexico                          130.5       139.0       (6.1)        11.9
  Puerto Rico                      99.9       105.0       (4.8)        (4.8)
  Brazil                           42.9        57.1      (24.9)         1.7
                             ----------  ----------
Total Americas                  4,138.7     4,035.1        2.6          4.2

EMEA
  France                          246.0       268.6       (8.4)         9.4
  Switzerland                     216.2       253.5      (14.7)       (10.3)
  Portugal                        132.5       124.8        6.2         27.0
  United Kingdom                  105.1       105.6       (0.4)         7.3
  Russia                           75.6       117.3      (35.5)         3.2
  Germany                          59.3        67.5      (12.3)         4.7
  Italy                            54.0        60.2      (10.3)         7.1
  Norway                           39.2        55.5      (29.5)        (9.6)
  Other                            45.8        64.5      (29.0)       (15.2)
                             ----------  ----------
Total EMEA                        973.7     1,117.5      (12.9)         3.3

APAC
  Singapore                       129.9       127.5        1.9         10.5
  Australia                       123.2       121.4        1.5         21.8
  Malaysia                         59.5        66.2      (10.1)         6.7
  New Zealand                      41.4        51.4      (19.4)        (4.4)
  Other                            51.8        43.6       18.6         26.9
                             ----------  ----------
Total APAC                        405.8       410.1       (1.0)        13.1

Total Kelly Services, Inc.  $   5,518.2 $   5,562.7       (0.8)%        4.7%
                             ==========  ==========





                   KELLY SERVICES, INC. AND SUBSIDIARIES
                    RECONCILIATION OF NON-GAAP MEASURES
FOR THE 14 WEEKS ENDED JANUARY 3, 2016 AND 13 WEEKS ENDED DECEMBER 28, 2014
                                (UNAUDITED)
               (In millions of dollars except per share data)

                                      2015           2014
                                   -----------   -------------
                                                   Adjusted
                                   As reported     Earnings      % Change
                                   -----------   -------------  -----------

Revenue from services             $    1,461.6  $      1,425.0          2.6%

Cost of services                       1,212.1         1,192.4          1.7
                                   -----------   -------------  -----------

Gross profit                             249.5           232.6          7.2

SG&A expenses                            223.0           223.8         (0.4)
                                   -----------   -------------  -----------

Earnings from operations                  26.5             8.8        196.7

Other expense, net                         0.7             1.1        (40.9)
                                   -----------   -------------  -----------

Earnings before taxes                     25.8             7.7        229.2

Inc. tax (benefit) expense*               (8.4)          (13.1)        36.2
                                   -----------   -------------  -----------

Net earnings                      $       34.2  $         20.8         63.1%
                                   ===========   =============  ===========

Earnings per share:
  Basic                           $       0.88  $         0.54         63.0%
  Diluted                         $       0.88  $         0.54         63.0%

* Income tax benefit for the fourth quarters of 2015 and 2014 includes
 $13.9 million and $13.6 million, respectively, related to the retroactive
 reinstatement of work opportunity credits for the entire year.

                                                     2014
                                   ----------------------------------------
                                                 Restructuring
                                                    Charges      Adjusted
                                   As reported     (Note 1)      Earnings
                                   -----------   -------------  -----------

Revenue from services             $    1,425.0  $            - $    1,425.0

Cost of services                       1,192.4               -      1,192.4
                                   -----------   -------------  -----------

Gross profit                             232.6               -        232.6

SG&A expenses                            230.0            (6.2)       223.8
                                   -----------   -------------  -----------

Earnings from operations                   2.6             6.2          8.8

Other expense, net                         1.1               -          1.1
                                   -----------   -------------  -----------

Earnings before taxes                      1.5             6.2          7.7

Inc. tax (benefit) expense               (15.5)            2.4        (13.1)
                                   -----------   -------------  -----------

Net earnings                      $       17.0  $          3.8 $       20.8
                                   ===========   =============  ===========

Earnings per share:
  Basic                           $       0.44  $         0.10 $       0.54
  Diluted                         $       0.44  $         0.10 $       0.54

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 53 WEEKS ENDED JANUARY 3, 2016 AND 52 WEEKS ENDED DECEMBER 28, 2014
                                (UNAUDITED)
               (In millions of dollars except per share data)

                                        2015          2014
                                     -----------  -------------
                                                    Adjusted
                                     As reported    Earnings      % Change
                                     -----------  -------------  -----------

Revenue from services               $    5,518.2 $      5,562.7       (0.8)%

Cost of services                         4,597.9        4,654.3        (1.2)

Gross profit                               920.3          908.4          1.3

SGA expenses                              853.6          874.5        (2.4)

Earnings from operations                    66.7           33.9         97.2

Other expense, net                           4.2            5.3       (19.9)

Earnings before taxes                       62.5           28.6        118.6

Inc. tax expense (benefit)                   8.7          (2.6)        432.2

Net earnings                        $       53.8 $         31.2        72.4%

Earnings per share:
Basic                               $       1.39 $         0.81        71.6%
Diluted                             $       1.39 $         0.81        71.6%

                                                      2014
                                     ---------------------------------------
                                                  Restructuring
                                                     Charges      Adjusted
                                     As reported    (Note 1)      Earnings
                                     -----------  -------------  -----------

Revenue from services               $    5,562.7 $            - $    5,562.7

Cost of services                         4,654.3              -      4,654.3

Gross profit                               908.4              -        908.4

SG&A expenses                              886.5         (12.0)        874.5

Earnings from operations                    21.9           12.0         33.9

Other expense, net                           5.3              -          5.3

Earnings before taxes                       16.6           12.0         28.6

Inc. tax (benefit) expense                 (7.1)            4.5        (2.6)

Net earnings                        $       23.7 $          7.5 $       31.2

Earnings per share:
Basic                               $       0.61 $         0.19 $       0.81
Diluted                             $       0.61 $         0.19 $       0.81



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 SERIVCES, 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 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 charges in 2014 includes costs related to the U.S. management simplification restructuring plan, costs incurred for exiting the staffing business in Sweden, and costs related to closing branches in Australia and consolidating back office functions in Australia and New Zealand.



    <span style="text-decoration:underline">ANALYST CONTACT</span>: 
James Polehna 
(248) 244-4586 
james_polehna@kellyservices.com 

<span style="text-decoration:underline">MEDIA CONTACT</span>:
Jane Stehney 
(248) 244-5630
jane_stehney@kellyservices.com



SOURCE: Kelly Services

mailto:james_polehna@kellyservices.com
mailto:jane_stehney@kellyservices.com


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