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

TROY, MI--(Marketwired - Jan 30, 2014) - 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
					2013				2012				Change			Constant Currency 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
					2013				2012				Change			Constant Currency 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
					2013				2012				Change			Constant Currency 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
					2013				2012				Change			Constant Currency 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
			As reported				Restructuring Charges (Note 1)				Adjusted Earnings				Adjusted 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
			As reported				Restructuring Charges (Note 1)				Asset Impairments (Note 2)				Loss on Equity Investment (Note 3)				Adjusted 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
			As reported				Restructuring Charges (Note 1)				Asset Impairments (Note 2)				Adjusted Earnings				Adjusted 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
			As reported				Restructuring Charges (Note 1)				Asset Impairments (Note 2)				Loss on Equity Investment (Note 3)				Adjusted 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.