SOURCE: Kelly Services, Inc.

January 24, 2008 07:30 ET

Kelly Services Reports 4% Revenue Increase and 19% Operating Earnings Growth for Fourth Quarter 2007

TROY, MI--(Marketwire - January 24, 2008) - Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a global provider of staffing services, today announced results for the fourth quarter and year ended December 30, 2007.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the fourth quarter of 2007 totaled $1.5 billion, a 4% increase compared to the $1.4 billion for the corresponding quarter in 2006. Revenue for the full year totaled $5.7 billion, a 2% increase compared to the $5.5 billion for the full year of 2006.

Earnings from operations for the fourth quarter of 2007 totaled $26.5 million, a 19% increase compared to $22.3 million reported for the fourth quarter of 2006. Included in earnings from operations in the quarter are $1.4 million of restructuring costs related to our Americas Commercial operations.

Earnings from operations for the full year of 2007 totaled $80.1 million, a 3% increase compared to $78.0 million reported for 2006. Included in earnings from operations for the year are $8.9 million of costs related to the restructuring of our Americas Commercial and UK operations.

Diluted earnings per share from continuing operations in the fourth quarter of 2007 were $0.52, a decrease of 7% as compared to fourth quarter 2006 earnings of $0.56 per share. Included in fourth quarter diluted earnings is the $0.02 per share cost of the Americas Commercial restructuring. The effective tax rate for continuing operations in the fourth quarter was 33.0%, which is significantly higher than the 11.3% rate in the prior year. In 2006, Work Opportunity Credits in the U.S. were reinstated in the fourth quarter. As a result, we recognized the impact of an entire year's worth of credits in the fourth quarter.

Diluted earnings per share from continuing operations for the full year of 2007 were $1.47, a decrease of 6% as compared to 2006 earnings of $1.56 per share. Included in 2007 diluted earnings per share from continuing operations is the $0.21 per share cost of the Americas Commercial and UK restructuring.

Commenting on the results, Camden said, "Despite continued weakness in the U.S. staffing market, we're pleased that we delivered solid profitable results. We accomplished a number of key strategic objectives during the quarter as we continue to diversify geographically and move into higher margin fee based businesses.

"Revenue in our Americas Commercial segment, which accounted for 47% of total sales, decreased 6% year over year in the fourth quarter. Operating earnings totaled $25.0 million, and decreased 16% compared to last year. Included in the segment operating earnings are $1.4 million of restructuring costs. We have completed our America's restructuring at a total cost of approximately $3.0 million, or $0.05 per share.

"Revenue in the Americas PTSA segment, which accounted for 20% of total sales, increased 6% year over year in the fourth quarter. Operating earnings totaled $17.4 million and increased 16% on a year over year basis.

"Revenue in our International Commercial segment, which accounted for 29% of total sales, increased 19% year over year in the fourth quarter. On a constant currency basis, revenue increased 8%. The segment operating earnings totaled $5.7 million, up significantly compared to $255 thousand the prior year.

"Revenue in our International PTSA segment, which accounted for 4% of total sales, increased 30% year over year in the fourth quarter. On a constant currency basis, revenue increased 17%. Operating earnings totaled $975 thousand, an increase of 288% compared to earnings of $251 thousand the prior year.

"Corporate expenses totaled $22.5 million, a decrease of 2% compared to the prior year.

Mr. Camden added, "We expect first quarter 2008 earnings to be in the range of $0.19 to $0.23 per share, compared to $0.14 per share from continuing operations in the first quarter of 2007. Included in the first quarter 2007 earnings from continuing operations are $.07 of UK restructuring costs.

In conjunction with its fourth quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on January 24, 2008 to review the results and answer questions. The call may be accessed in one of the following ways:

Via the Telephone:

U.S.            1-800-230-1059
International   1-612-332-0226

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: competition, changing market and economic conditions, currency fluctuations, changes in laws and regulations, including tax laws, and other factors discussed in this release and in the company's filings with the Securities and Exchange Commission. Actual results may differ materially from any projections contained herein.

Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB) is a world leader in human resources solutions headquartered in Troy, Michigan, offering temporary staffing services, outsourcing, vendor on-site and full-time placement. Kelly operates in 37 countries and territories. Kelly provides employment to more than 750,000 employees annually, with skills including office services, accounting, engineering, information technology, law, science, marketing, creative services, light industrial, education, and health care. Revenue in 2007 was $5.7 billion. Visit www.kellyservices.com.

                  KELLY SERVICES, INC. AND SUBSIDIARIES
                          STATEMENTS OF EARNINGS
      FOR THE 13 WEEKS ENDED DECEMBER 30, 2007 AND DECEMBER 31, 2006
                                (UNAUDITED)
              (In thousands of dollars except per share data)


                                2007         2006       Change   % Change
                            -----------  -----------  ---------  --------

Revenue from services       $ 1,475,759  $ 1,421,376  $  54,383       3.8%

Cost of services              1,210,323    1,181,884     28,439       2.4
                            -----------  -----------  ---------  --------

Gross profit                    265,436      239,492     25,944      10.8

Selling, general and
 administrative
  expenses                      238,895      217,191     21,704      10.0
                            -----------  -----------  ---------  --------

Earnings from operations         26,541       22,301      4,240      19.0

Other income, net                 1,021          618        403      65.2
                            -----------  -----------  ---------  --------

Earnings from continuing
 operations before taxes         27,562       22,919      4,643      20.3

Income taxes                      9,089        2,591      6,498     250.8
                            -----------  -----------  ---------  --------

Earnings from continuing
 operations                      18,473       20,328     (1,855)     (9.1)

Earnings from discontinued
 operations, net of tax             158        4,114     (3,956)    (96.2)
                            -----------  -----------  ---------  --------

Net earnings                $    18,631  $    24,442  $  (5,811)    (23.8)%
                            ===========  ===========  =========  ========

Basic earnings per share
   Earnings from continuing
    operations              $      0.52  $      0.56  $   (0.04)     (7.1)%
   Earnings from
    discontinued operations           -         0.11      (0.11)   (100.0)
                            -----------  -----------  ---------  --------
   Net earnings             $      0.52  $      0.68  $   (0.16)    (23.5)%
                            ===========  ===========  =========  ========

Diluted earnings per share
   Earnings from continuing
    operations              $      0.52  $      0.56  $   (0.04)     (7.1)%
   Earnings from
    discontinued operations           -         0.11      (0.11)   (100.0)
                            -----------  -----------  ---------  --------
   Net earnings             $      0.52  $      0.67  $   (0.15)    (22.4)%
                            ===========  ===========  =========  ========


STATISTICS:

Gross profit rate                  18.0%        16.8%       1.2%

Selling, general and
 administrative expenses:
   % of revenue                    16.2         15.3        0.9
   % of gross profit               90.0         90.7       (0.7)

% Return -  Earnings from
 operations                         1.8          1.6        0.2
      Earnings from
       continuing
       operations before
       taxes                        1.9          1.6        0.3
      Earnings from
       continuing
       operations                   1.3          1.4       (0.1)
      Net earnings                  1.3          1.7       (0.4)

Effective income tax rate          33.0%        11.3%      21.7%

Average number of shares outstanding
 (thousands):
     Basic                       35,759       36,182
     Diluted                     35,858       36,524




                  KELLY SERVICES, INC. AND SUBSIDIARIES
                          STATEMENTS OF EARNINGS
      FOR THE 52 WEEKS ENDED DECEMBER 30, 2007 AND DECEMBER 31, 2006
              (In thousands of dollars except per share data)



                               2007         2006       Change     %Change
                           -----------  -----------  -----------  -------
Revenue from services      $ 5,667,589  $ 5,546,778  $   120,811      2.2%
Cost of services             4,678,500    4,640,052       38,448      0.8
                           -----------  -----------  -----------  -------

Gross profit                   989,089      906,726       82,363      9.1

Selling, general and
 administrative
  expenses                     909,009      828,685       80,324      9.7
                           -----------  -----------  -----------  -------

Earnings from operations        80,080       78,041        2,039      2.6

Other income, net                3,211        1,471        1,740    118.3
                           -----------  -----------  -----------  -------

Earnings from continuing
 operations before taxes        83,291       79,512        3,779      4.8

Income taxes                    29,567       22,727        6,840     30.1
                           -----------  -----------  -----------  -------

Earnings from continuing
 operations                     53,724       56,785       (3,061)    (5.4)

Earnings from discontinued
 operations, net of tax          7,292        6,706          586      8.7
                           -----------  -----------  -----------  -------

Net earnings               $    61,016  $    63,491  $    (2,475)    (3.9)%
                           ===========  ===========  ===========  =======

Basic earnings per share
 Earnings from continuing
  operations               $      1.48  $      1.58  $     (0.10)    (6.3)%
 Earnings from
  discontinued operations         0.20         0.19         0.01      5.3
                           -----------  -----------  -----------  -------
 Net earnings              $      1.68  $      1.76  $     (0.08)    (4.5)%
                           ===========  ===========  ===========  =======

Diluted earnings per share
 Earnings from continuing
  operations               $      1.47  $      1.56  $     (0.09)    (5.8)%
 Earnings from
  discontinued operations         0.20         0.18         0.02     11.1
                           -----------  -----------  -----------  -------
 Net earnings              $      1.67  $      1.75  $     (0.08)    (4.6)%
                           ===========  ===========  ===========  =======

STATISTICS:

Gross profit rate                 17.5%        16.3%         1.2%

Selling, general and
 administrative expenses:
    % of revenue                  16.0         14.9          1.1
    % of gross profit             91.9         91.4          0.5

% Return -  Earnings from
 operations                        1.4          1.4          0.0
     Earnings from
      continuing
      operations
      before taxes                 1.5          1.4          0.1
     Earnings from
      continuing
      operations                   0.9          1.0         (0.1)
     Net earnings                  1.1          1.1          0.0

Effective income tax rate         35.5%        28.6%         6.9%

Average number of shares
 outstanding
  (thousands):
   Basic                        36,357       35,999
   Diluted                      36,495       36,314





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


                                           Fourth Quarter
                               2007         2006       Change     %Change
                           -----------  -----------  -----------  -------

Revenue from Services:
Americas - Commercial      $   695,839  $   739,118  $   (43,279)    (5.9)%
Americas - PTSA                292,830      277,347       15,483      5.6
                           -----------  -----------  -----------  -------
   Total Americas              988,669    1,016,465      (27,796)    (2.7)

International - Commercial     435,034      364,842       70,192     19.2
International - PTSA            52,056       40,069       11,987     29.9
                           -----------  -----------  -----------  -------
   Total International         487,090      404,911       82,179     20.3

                           $ 1,475,759  $ 1,421,376  $    54,383      3.8%
                           ===========  ===========  ===========  =======


Earnings from Operations
 (As Reported):
Americas - Commercial      $    25,003  $    29,614  $    (4,611)   (15.6)%
Americas - PTSA                 17,416       15,085        2,331     15.5
                           -----------  -----------  -----------  -------
   Total Americas               42,419       44,699       (2,280)    (5.1)

International - Commercial       5,658          255        5,403       NM
International - PTSA               975          251          724    288.4
                           -----------  -----------  -----------  -------
   Total International           6,633          506        6,127       NM

Corporate Expense              (22,511)     (22,904)         393      1.7
                           -----------  -----------  -----------  -------


                           $    26,541  $    22,301  $     4,240     19.0%
                           ===========  ===========  ===========  =======


Earnings from Operations
 (Excluding Restructuring
 Charges):
Americas - Commercial      $    26,445  $    29,614  $    (3,169)   (10.7)%
Americas - PTSA                 17,416       15,085        2,331     15.5
                           -----------  -----------  -----------  -------
   Total Americas               43,861       44,699         (838)    (1.9)

International - Commercial       5,559          255        5,304       NM
International - PTSA               975          251          724    288.4
                           -----------  -----------  -----------  -------
   Total International           6,534          506        6,028       NM

Corporate Expense              (22,511)     (22,904)         393      1.7
                           -----------  -----------  -----------  -------


                           $    27,884  $    22,301  $     5,583     25.0%
                           ===========  ===========  ===========  =======




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


                                        December Year to Date
                              2007         2006       Change     %Change
                           -----------  -----------  -----------  -------

Revenue from Services:
Americas - Commercial      $ 2,759,398  $ 2,916,079  $  (156,681)    (5.4)%
Americas - PTSA              1,105,752    1,108,329       (2,577)    (0.2)
                           -----------  -----------  -----------  -------
   Total Americas            3,865,150    4,024,408     (159,258)    (4.0)

International - Commercial   1,603,958    1,378,540      225,418     16.4
International - PTSA           198,481      143,830       54,651     38.0
                           -----------  -----------  -----------  -------
   Total International       1,802,439    1,522,370      280,069     18.4

                           $ 5,667,589  $ 5,546,778  $   120,811      2.2%
                           ===========  ===========  ===========  =======


Earnings from Operations
 (As Reported):
Americas - Commercial      $    88,054  $   102,935  $   (14,881)   (14.5)%
Americas - PTSA                 59,161       58,090        1,071      1.8
                           -----------  -----------  -----------  -------
   Total Americas              147,215      161,025      (13,810)    (8.6)

International - Commercial      10,064          567        9,497       NM
International - PTSA             2,717          641        2,076    323.9
                           -----------  -----------  -----------  -------
   Total International          12,781        1,208       11,573       NM

Corporate Expense              (79,916)     (84,192)       4,276      5.1
                           -----------  -----------  -----------  -------


                           $    80,080  $    78,041  $     2,039      2.6%
                           ===========  ===========  ===========  =======


Earnings from Operations
 (Excluding Restructuring
 Charges):
Americas - Commercial      $    91,007  $   102,935  $   (11,928)   (11.6)%
Americas - PTSA                 59,161       58,090        1,071      1.8
                           -----------  -----------  -----------  -------
   Total Americas              150,168      161,025      (10,857)    (6.7)

International - Commercial      16,000          567       15,433       NM
International - PTSA             2,717          641        2,076    323.9
                           -----------  -----------  -----------  -------
   Total International          18,717        1,208       17,509       NM

Corporate Expense              (79,916)     (84,192)       4,276      5.1
                           -----------  -----------  -----------  -------


                           $    88,969  $    78,041  $    10,928     14.0%
                           ===========  ===========  ===========  =======




                  KELLY SERVICES, INC. AND SUBSIDIARIES
                    RECONCILIATION OF CONSTANT CURRENCY
          REVENUE FROM SERVICES TO REPORTED REVENUE FROM SERVICES
                                (UNAUDITED)
                        (In thousands of dollars)


                                             Fourth Quarter
                                 2007        2006       Change    %Change
                              ----------- ----------- ----------  -------
Revenue from services -
 constant currency*:
Americas - Commercial         $   686,725 $   739,118 $  (52,393)    (7.1)%
Americas - PTSA                   292,241     277,347     14,894      5.4
                              ----------- ----------- ----------  -------
  Total Americas - constant
   currency*                      978,966   1,016,465    (37,499)    (3.7)
International - Commercial        393,868     364,842     29,026      8.0
International - PTSA               46,942      40,069      6,873     17.2
                              ----------- ----------- ----------  -------
  Total International -
   constant currency*             440,810     404,911     35,899      8.9

  Total revenue from services
   - constant currency*         1,419,776   1,421,376     (1,600)    (0.1)%
Foreign currency impact            55,983                 55,983
                              ----------- ----------- ----------  -------

  Revenue from services       $ 1,475,759 $ 1,421,376 $   54,383      3.8%
                              =========== =========== ==========  =======




                                        December Year to Date
                                  2007        2006     Change     %Change
                              ----------- ----------- ----------  -------
Revenue from services -
 constant currency*:
Americas - Commercial         $ 2,745,728 $ 2,916,079 $ (170,351)    (5.8)%
Americas - PTSA                 1,104,880   1,108,329     (3,449)    (0.3)
                              ----------- ----------- ----------  -------
  Total Americas - constant
   currency*                    3,850,608   4,024,408   (173,800)    (4.3)

International - Commercial      1,479,957   1,378,540    101,417      7.4
International - PTSA              182,763     143,830     38,933     27.1
                              ----------- ----------- ----------  -------
  Total International -
   constant currency*           1,662,720   1,522,370    140,350      9.2

  Total revenue from services
   - constant currency*         5,513,328   5,546,778    (33,450)    (0.6)%
Foreign currency impact           154,261                154,261
                              ----------- ----------- ----------  -------

  Revenue from services       $ 5,667,589 $ 5,546,778 $  120,811      2.2%
                              =========== =========== ==========  =======


        *  Information on constant currencies is provided to allow
           investors to separate the impact of foreign currency
           translations on reported results.  Constant currency results
           are calculated by translating the current year results at prior
           year average exchange rates.



                  KELLY SERVICES, INC. AND SUBSIDIARIES
                    SUMMARY OF DISCONTINUED OPERATIONS
                                (UNAUDITED)
                        (In thousands of dollars)


                                                              December
                                         Fourth Quarter     Year to Date
                                        ----------------  -----------------
                                          2007     2006     2007     2006
                                        -------  -------- -------- --------


Revenue from services                   $     -  $ 22,347 $ 14,777 $ 92,247


Operating (loss) income from
 discontinued operations                $  (119) $  2,973 $  1,454 $  7,248

Less:  Income taxes                        (277)    1,113      328    2,796
                                        -------  -------- -------- --------

Earnings from discontinued operations,
 net of tax                                 158     1,860    1,126    4,452
                                        -------  -------- -------- --------

Gain on sale of discontinued operations       -     3,731   10,153    3,731
Less:  Income taxes                           -     1,477    3,987    1,477
                                        -------  -------- -------- --------
Gain on sale of discontinued
 operations, net of tax                       -     2,254    6,166    2,254
                                        -------  -------- -------- --------

Discontinued operations, net of tax     $   158  $  4,114 $  7,292 $  6,706
                                        =======  ======== ======== ========


Effective March 31, 2007, the Company sold Kelly Home Care ("KHC"), a
wholly owned subsidiary. Effective December 31, 2006, the Company sold
Kelly Staff Leasing ("KSL"), a wholly owned subsidiary. The operating
results for KHC and KSL, as well as the gains on the sales of
KHC and KSL, have been excluded from earnings from continuing operations.
This schedule provides information on KHC's and KSL's results from
operations for the fourth quarter of 2007 and 2006 and year to date 2007
and 2006, as well as the gains on the sales of KHC and KSL, all of which
are included as discontinued operations on the face of the statements of
earnings.




                  KELLY SERVICES, INC. AND SUBSIDIARIES
                              BALANCE SHEETS
                        (In thousands of dollars)


                                              December 30,   December 31,
                                                  2007           2006
                                              -------------  -------------
Current Assets
  Cash and equivalents                        $      92,817  $     118,428
  Trade accounts receivable, less allowances
   of $18,172 and $16,818, respectively             888,334        838,246
  Prepaid expenses and other current assets          53,392         45,316
  Deferred taxes                                     29,294         29,543
                                              -------------  -------------
            Total current assets                  1,063,837      1,031,533

Property and Equipment, Net                         178,019        170,288

Noncurrent Deferred Taxes                            43,436         35,437

Goodwill, Net                                       147,168         96,504

Other Assets                                        141,537        135,662

                                              -------------  -------------
Total Assets                                  $   1,573,997  $   1,469,424
                                              =============  =============

Current Liabilities
  Short-term borrowings                       $      49,729  $      68,928
  Accounts payable                                  171,471        132,819
  Accrued payroll and related taxes                 270,575        274,284
  Accrued insurance                                  23,696         24,191
  Income and other taxes                             69,779         68,055
                                              -------------  -------------
  Total current liabilities                         585,250        568,277

Noncurrent Liabilities
  Long-term debt                                     48,394              -
  Accrued insurance                                  60,404         57,277
  Accrued retirement benefits                        78,382         71,990
  Other long-term liabilities                        13,338         13,323
                                              -------------  -------------

            Total noncurrent liabilities            200,518        142,590

Stockholders' Equity
  Common stock                                       40,116         40,116
  Treasury stock                                   (106,312)       (78,841)
  Paid-in capital                                    34,500         32,048
  Earnings invested in the business                 777,338        735,104
  Accumulated other comprehensive income             42,587         30,130
                                              -------------  -------------
            Total stockholders' equity              788,229        758,557
                                              -------------  -------------

Total Liabilities and Stockholders' Equity    $   1,573,997  $   1,469,424
                                              =============  =============


STATISTICS:
 Working Capital                              $     478,587  $     463,256
 Current Ratio                                          1.8            1.8
 Debt-to-capital %                                     11.1%           8.3%
 Global Days Sales Outstanding                           55             54





                  KELLY SERVICES, INC. AND SUBSIDIARIES
                         STATEMENTS OF CASH FLOWS
      FOR THE 52 WEEKS ENDED DECEMBER 30, 2007 AND DECEMBER 31, 2006
                        (In thousands of dollars)




                                                        2007       2006
                                                      ---------  ---------

Cash flows from operating activities
   Net earnings                                       $  61,016  $  63,491
   Noncash adjustments:
     Depreciation and amortization                       42,601     41,730
     Provision for bad debts                              6,654      5,178
     Stock-based compensation                             3,941      5,286
     Gain on sale of discontinued operations             (6,166)    (2,254)
     Other, net                                            (573)      (405)
   Changes in operating assets and liabilities          (34,129)     3,239
                                                      ---------  ---------

        Net cash from operating activities               73,344    116,265
                                                      ---------  ---------

Cash flows from investing activities
   Capital expenditures                                 (45,975)   (45,526)
   Proceeds from sale of discontinued operations         12,500      6,500
   Acquisition of companies, net of cash received       (48,417)    (4,663)
   Investment in unconsolidated affiliate                     -    (20,729)
   Other investing activities                              (532)      (550)
                                                      ---------  ---------

        Net cash from investing activities              (82,424)   (64,968)
                                                      ---------  ---------
Cash flows from financing activities
   Net increase (decrease) in revolving line of
    credit                                               17,500    (11,022)
   Proceeds from debt                                    57,277     20,729
   Repayment of debt                                    (49,054)         -
   Dividend payments                                    (19,114)   (16,420)
   Purchase of treasury stock                           (34,703)         -
   Stock options and other stock sales                    5,781     10,973
   Other financing activities                              (165)    (2,873)
                                                      ---------  ---------

        Net cash from financing activities              (22,478)     1,387
                                                      ---------  ---------

Effect of exchange rates on cash and equivalents          5,947      2,045
                                                      ---------  ---------

Net change in cash and equivalents                      (25,611)    54,729
Cash and equivalents at beginning of period             118,428     63,699
                                                      ---------  ---------


Cash and equivalents at end of period                 $  92,817  $ 118,428
                                                      =========  =========







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


                                            Fourth Quarter
                            ---------------------------------------------
                                                           % Change
                                                                 Constant
                               2007        2006         US$      Currency
                            ----------- ----------- ---------   ---------

Americas
  United States             $   881,640 $   910,698      (3.2)%      (3.2)%
  Canada                         69,041      66,741       3.4       (11.0)
  Puerto Rico                    19,431      19,362       0.4         0.4
  Mexico                         18,557      19,664      (5.6)       (6.0)
                            ----------- ----------- ---------   ---------
Total Americas                  988,669   1,016,465      (2.7)       (3.7)

EMEA
  United Kingdom                114,113     110,608       3.2        (3.5)
  France                         87,084      72,703      19.8         6.7
  Switzerland                    50,199      45,960       9.2         1.3
  Italy                          31,893      30,744       3.7        (7.6)
  Norway                         21,527      15,631      37.7        16.5
  Russia                         19,652      14,384      36.6        23.0
  Germany                        20,091      12,504      60.7        43.3
  Other                          42,402      34,178      24.1        10.4
                            ----------- ----------- ---------   ---------
Total EMEA                      386,961     336,712      14.9         4.2

APAC
  Australia                      39,779      30,350      31.1        13.4
  Singapore                      18,373      12,593      45.9        36.2
  Other                          41,977      25,256      66.2        52.0
                            ----------- ----------- ---------   ---------
Total APAC                      100,129      68,199      46.8        31.9

Total Kelly Services, Inc.  $ 1,475,759 $ 1,421,376       3.8%       (0.1)%
                            =========== =========== =========   =========






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


                                        December Year to Date
                            ---------------------------------------------
                                                           % Change
                                                                 Constant
                               2007        2006         US$      Currency
                            ----------- ----------- ---------   ---------

Americas
  United States             $ 3,454,922 $ 3,603,284      (4.1)%      (4.1)%
  Canada                        260,050     272,727      (4.6)      (10.0)
  Puerto Rico                    76,772      76,939      (0.2)       (0.2)
  Mexico                         73,406      71,458       2.7         2.9
                            ----------- ----------- ---------   ---------
Total Americas                3,865,150   4,024,408      (4.0)       (4.3)

EMEA
  United Kingdom                469,903     441,847       6.3        (2.2)
  France                        315,008     274,694      14.7         5.1
  Switzerland                   180,951     160,555      12.7         7.9
  Italy                         124,674     118,501       5.2        (3.5)
  Norway                         78,050      56,463      38.2        25.9
  Russia                         68,528      51,958      31.9        23.1
  Germany                        65,593      41,890      56.6        43.4
  Other                         153,209     120,012      27.7        16.8
                            ----------- ----------- ---------   ---------
Total EMEA                    1,455,916   1,265,920      15.0         6.2

APAC
  Australia                     135,886     117,694      15.5         3.5
  Singapore                      62,447      50,527      23.6        17.2
  Other                         148,190      88,229      68.0        56.2
                            ----------- ----------- ---------   ---------
Total APAC                      346,523     256,450      35.1        24.3

Total Kelly Services, Inc.  $ 5,667,589 $ 5,546,778       2.2%       (0.6)%
                            =========== =========== =========   =========





                  KELLY SERVICES, INC. AND SUBSIDIARIES
                    RECONCILIATION OF NON-GAAP MEASURES
                                (UNAUDITED)
              (In thousands of dollars except per share data)



                                              Fourth Quarter
                                ------------------------------------------
                                        2007                  2006
                                --------------------  --------------------
                                  Amount   Per Share    Amount   Per Share
                                ---------  ---------- ---------- ---------

Earnings from continuing
 operations                     $  18,473  $     0.52 $   20,328 $    0.56
     Restructuring charges,
     net of taxes (Notes 1 & 2)       802        0.02          -         -
                                ---------  ---------- ---------- ---------
 Earnings from continuing
  operations excluding
  restructuring charges,
  net of taxes                  $  19,275  $     0.54 $   20,328 $    0.56
                                =========  ========== ========== =========


                                              Fourth Quarter
                                ------------------------------------------
                                   2007                  2006     % Change
                                ---------             ---------- ---------

Selling, general and
 administrative expenses        $ 238,895             $  217,191
     Restructuring charges
      (Notes 1 & 2)                (1,343)                     -
                                ---------             ----------
 Selling, general and
  administrative expenses
  excluding restructuring
  charges                       $ 237,552             $  217,191       9.4%
                                =========             ========== =========


Earnings from operations        $  26,541             $   22,301
     Restructuring charges
      (Notes 1 & 2)                 1,343                      -
                                ---------             ----------
 Earnings from operations
  excluding restructuring
  charges                       $  27,884             $   22,301      25.0%
                                =========             ========== =========


Americas Commercial selling,
 general and administrative
 expenses                       $  87,179             $   87,847
     Americas restructuring
      charge (Note 1)              (1,442)                     -
                                ---------             ----------
 Americas Commercial selling,
  general and administrative
  expenses excluding the
  Americas restructuring
  charge                        $  85,737             $   87,847     (2.4%)
                                =========             ========== =========


 Americas Commercial Earnings
  from operations               $  25,003             $   29,614
     Americas restructuring
      charge (Note 1)               1,442                      -
                                ---------             ----------
Americas Commercial earnings
  excluding the Americas
  restructuring charge          $  26,445             $   29,614    (10.7%)
                                =========             ========== =========






                  KELLY SERVICES, INC. AND SUBSIDIARIES
              RECONCILIATION OF NON-GAAP MEASURES (continued)
                                (UNAUDITED)
              (In thousands of dollars except per share data)



                                                Fourth Quarter
                                    --------------------------------------
                                      2007                2006    % Change
                                    --------            --------- --------

 Americas Earnings from operations  $ 42,419            $  44,699
     Americas restructuring charge
      (Note 1)                         1,442                    -
                                    --------            ---------
 Americas earnings excluding
  the Americas restructuring
  charge                            $ 43,861            $  44,699    (1.9%)
                                    ========            ========= ========


International Commercial selling,
 general and administrative
 expenses                           $ 73,622            $  61,875
     UK restructuring charge
      (Note 2)                            99                    -
                                    --------            ---------
 International Commercial selling,
  general and administrative
  expenses excluding the UK
  restructuring charge              $ 73,721            $  61,875     19.1%
                                    ========            ========= ========


 International Commercial Earnings
  from operations                   $  5,658            $     255
     UK restructuring charge
      (Note 2)                           (99)                   -
                                    --------            ---------
 International Commercial earnings
  excluding the UK restructuring
  charge                            $  5,559            $     255       NM
                                    ========            ========= ========


 International Earnings from
  operations                        $  6,633            $     506
     UK restructuring charge
      (Note 2)                           (99)                   -
                                    --------            ---------
 International earnings excluding
  the UK restructuring charge       $  6,534            $     506       NM
                                    ========            ========= ========







                  KELLY SERVICES, INC. AND SUBSIDIARIES
              RECONCILIATION OF NON-GAAP MEASURES (continued)
                                (UNAUDITED)
              (In thousands of dollars except per share data)



                                                  First Quarter
                                        -----------------------------------
                                              2007              2006
                                        ----------------- -----------------
                                                   Per               Per
                                        Amount    Share   Amount    Share
                                        -------- -------- -------- --------

Earnings from continuing operations     $  5,258 $   0.14 $  8,172 $   0.23
     Restructuring charges,
      net of taxes (Note 2)                2,634     0.07        -        -
                                        -------- -------- -------- --------
 Earnings from continuing operations
   excluding restructuring charges,
   net of taxes                         $  7,892 $   0.21 $  8,172 $   0.23
                                        ======== ======== ======== ========


                                                 Second Quarter
                                        -----------------------------------
                                              2007              2006
                                        ----------------- -----------------
                                                   Per               Per
                                        Amount    Share   Amount    Share
                                        -------- -------- -------- --------

Earnings from continuing operations     $ 15,311 $   0.41 $ 11,850 $   0.33
     Restructuring charges,
      net of taxes (Note 2)                2,448     0.07        -        -
                                        -------- -------- -------- --------
 Earnings from continuing operations
  excluding restructuring charges,
  net of taxes                          $ 17,759 $   0.48 $ 11,850 $   0.33
                                        ======== ======== ======== ========


                                                  Third Quarter
                                        -----------------------------------
                                              2007              2006
                                        ----------------- -----------------
                                                   Per               Per
                                        Amount    Share   Amount    Share
                                        -------- -------- -------- --------

Earnings from continuing operations     $ 14,682 $   0.40 $ 16,435 $   0.45
     Restructuring charges,
      net of taxes (Notes 1 & 2)           1,882     0.05        -        -
                                        -------- -------- -------- --------
 Earnings from continuing operations
  excluding restructuring charges,
  net of taxes                          $ 16,564 $   0.45 $ 16,435 $   0.45
                                        ======== ======== ======== ========







                  KELLY SERVICES, INC. AND SUBSIDIARIES
                    RECONCILIATION OF NON-GAAP MEASURES
                                (UNAUDITED)
              (In thousands of dollars except per share data)



                                          December Year to Date
                                ------------------------------------------
                                        2007                  2006
                                --------------------  --------------------
                                  Amount   Per Share    Amount   Per Share
                                ---------  ---------- ---------- ---------

Earnings from continuing
 operations                     $  53,724  $     1.47 $   56,785 $    1.56
     Restructuring charges,
      net of taxes (Notes 1 & 2)    7,766        0.21          -         -
                                ---------  ---------- ---------- ---------
 Earnings from continuing
  operations excluding
  restructuring charges,
  net of taxes                  $  61,490  $     1.68 $   56,785 $    1.56
                                =========  ========== ========== =========


                                          December Year to Date
                                ------------------------------------------
                                   2007                  2006     % Change
                                ---------             ---------- ---------
Selling, general and
 administrative expenses        $ 909,009             $  828,685
     Restructuring charges
      (Notes 1 & 2)                (8,889)                     -
                                ---------             ----------
 Selling, general and
  administrative expenses
  excluding restructuring
  charges                       $ 900,120             $  828,685       8.6%
                                =========             ========== =========


Earnings from operations        $  80,080             $   78,041
     Restructuring charges
      (Notes 1 & 2)                 8,889                      -
                                ---------             ----------
 Earnings from operations
  excluding restructuring
  charges                       $  88,969             $   78,041      14.0%
                                =========             ========== =========


Americas Commercial selling,
 general and administrative
 expenses                       $ 349,709             $  344,883
     Americas restructuring
      charge (Note 1)              (2,953)                     -
                                ---------             ----------
 Americas Commercial selling,
  general and administrative
  expenses excluding the
  Americas restructuring charge $ 346,756             $  344,883       0.5%
                                =========             ========== =========


 Americas Commercial Earnings
  from operations               $  88,054             $  102,935
     Americas restructuring
      charge (Note 1)               2,953                      -
                                ---------             ----------
 Americas Commercial Earnings
  excluding the Americas
  restructuring charge          $  91,007             $  102,935    (11.6%)
                                =========             ========== =========







                  KELLY SERVICES, INC. AND SUBSIDIARIES
              RECONCILIATION OF NON-GAAP MEASURES (continued)
                                (UNAUDITED)
              (In thousands of dollars except per share data)

                                          December Year to Date
                                ------------------------------------------
                                  2007                  2006     % Change
                                ---------             ---------- ---------

 Americas Earnings from
  operations                    $ 147,215             $  161,025
     Americas restructuring
      charge (Note 1)               2,953                      -
                                ---------             ----------
 Americas Earnings excluding
  the Americas restructuring
  charge                        $ 150,168             $  161,025     (6.7%)
                                =========             ========== =========


International Commercial
 selling, general and
 administrative expenses        $ 272,733             $  233,080
     UK restructuring charge
      (Note 2)                     (5,936)                     -
                                ---------             ----------
 International Commercial
  selling, general and
  administrative expenses
  excluding the UK
  restructuring charge          $ 266,797             $  233,080      14.5%
                                =========             ========== =========


 International Commercial
  Earnings from operations      $  10,064             $      567
     UK restructuring charge
      (Note 2)                      5,936                      -
                                ---------             ----------
 International Commercial
  Earnings excluding the UK
  restructuring charge          $  16,000             $      567        NM
                                =========             ========== =========


 International Earnings from
  operations                    $  12,781             $    1,208
     UK restructuring charge
      (Note 2)                      5,936                      -
                                ---------             ----------
 International Earnings
  excluding the UK
  restructuring charge          $  18,717             $    1,208        NM
                                =========             ========== =========





              KELLY SERVICES, INC. AND SUBSIDIARIES
               RECONCILIATION OF NON-GAAP MEASURES
                        (UNAUDITED)
       (In thousands of dollars except per share data)


Management believes that the non-GAAP (Generally Accepted Accounting
Principles) information excluding the restructuring charges is useful to
understand the Company's fiscal 2007 financial performance and increases
comparability with prior year results.  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)  The Americas restructuring charge is comprised of facility exit costs
associated with the closure of 58 branch locations and the accelerated
depreciation of the leasehold improvements and personal property at the
impacted locations.

(2)  The UK restructuring charge is comprised of facility exit costs
associated with the closure of 22 branch locations and the accelerated
depreciation of the leasehold improvements and personal property at the
impacted locations.

Contact Information