SOURCE: Kelly Services, Inc.

Kelly Services, Inc.

February 05, 2010 07:30 ET

Kelly Services Reports 4th Quarter 2009 and Year-End Results

TROY, MI--(Marketwire - February 5, 2010) - Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a world leader in workforce solutions, today announced results for the fourth quarter and year ended January 3, 2010.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the fourth quarter of 2009 totaled $1.2 billion, a 7% decrease compared to the corresponding quarter in 2008. On a sequential basis, fourth quarter revenue increased 14%, compared to the third quarter in 2009. Revenue for the full year totaled $4.3 billion, a 22% decrease compared to the prior year. The fourth quarter included an extra week which adds approximately 4-5% to our quarterly comparisons and 1% to annual comparisons.

Losses from operations for the fourth quarter of 2009 totaled $13.0 million, compared to losses from operations of $83.7 million reported for the fourth quarter of 2008. Included in the results from operations for the fourth quarter of 2009 are restructuring charges of $13.4 million. The loss from operations in the fourth quarter of 2008 included impairment charges of $80.5 million and restructuring charges of $4.3 million. Excluding the impairment and restructuring charges, earnings from operations were $0.4 million in the fourth quarter of 2009 compared to $1.1 million in 2008.

Losses from operations for the full year of 2009 totaled $146.1 million compared to a loss of $70.3 million in 2008. The results for the full year 2009 include $53.1 million of impairment charges, $5.3 million of legal charges and $29.9 million of restructuring charges. The results for 2008 included $80.5 million of impairment charges, $22.5 million of legal charges and $6.5 million of restructuring charges.

Diluted losses per share from continuing operations in the fourth quarter of 2009 were $0.23 compared to fourth quarter 2008 losses of $2.55 per share. The restructuring charges totaled $0.29 per share in the fourth quarter of 2009. The impairment charges were $2.22 per share and the restructuring charges were $0.11 per share in the fourth quarter of 2008.

Diluted losses per share from continuing operations for the full year of 2009 were $3.01 compared to 2008 losses of $2.35 per share. The impairment charges totaled $1.43 per share, legal charges totaled $0.09 per share and restructuring charges totaled $0.69 per share in 2009. The impairment charges were $2.22 per share, legal charges were $0.40 per share and the restructuring charges were $0.15 per share in 2008.

Commenting on the fourth quarter results, Camden was optimistic. "We are very pleased that the improved revenue trends in our business, combined with our significant cost reduction initiatives allowed us to realize a small operating profit for the fourth quarter, excluding restructuring charges."

Camden added that while 2009 has been a challenging year for the staffing industry, "Kelly has done an excellent job of re-shaping and strategically positioning the company to seize future growth opportunities and create value for our shareholders.

"We look forward to 2010, and will focus on maximizing profitability across all operations; accelerating growth of higher-margin Professional & Technical disciplines and outsourcing and consulting services; winning new business; and helping our customers manage their ever-changing workforce needs."

In conjunction with its fourth quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on February 5, 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      1 612 332-0107

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 forward-looking statements contained herein.

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, temp-to-hire and permanent placement basis. Serving clients around the globe, Kelly provides employment to 480,000 employees annually. Revenue in 2009 was $4.3 billion. Visit www.kellyservices.com.

                  KELLY SERVICES, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 14 WEEKS ENDED JANUARY 3, 2010 AND 13 WEEKS ENDED DECEMBER 28, 2008
                                (UNAUDITED)
              (In millions of dollars except per share data)




                              2009       2008       Change       % Change
                            ---------  ---------  ---------      --------
Revenue from services       $ 1,194.1  $ 1,279.1  $   (85.0)         (6.6)%

Cost of services              1,005.8    1,054.5      (48.7)         (4.6)
                            ---------  ---------  ---------      --------

Gross profit                    188.3      224.6      (36.3)        (16.2)

Selling, general and
 administrative expenses        201.3      227.8      (26.5)        (11.7)
Asset impairments                   -       80.5      (80.5)       (100.0)
                            ---------  ---------  ---------      --------

Loss from operations            (13.0)     (83.7)      70.7          84.5

Other expense, net               (0.9)      (3.4)       2.5          73.8
                            ---------  ---------  ---------      --------

Loss from continuing
 operations before taxes        (13.9)     (87.1)      73.2          84.1

Income taxes                     (5.7)       1.5       (7.2)       (469.5)
                            ---------  ---------  ---------      --------

Loss from continuing
 operations                      (8.2)     (88.6)      80.4          90.8

Loss from discontinued
 operations, net of tax             -       (0.1)       0.1         100.0
                            ---------  ---------  ---------      --------

Net loss                    $    (8.2) $   (88.7) $    80.5          90.8 %
                            =========  =========  =========      ========

Basic loss per share on
 common stock
  Loss from continuing
   operations               $   (0.23) $   (2.55) $    2.32          91.0 %
  Loss from discontinued
   operations                       -      (0.01)      0.01         100.0
  Net loss                      (0.23)     (2.55)      2.32          91.0

Diluted loss per share on
 common stock
  Loss from continuing
   operations               $   (0.23) $   (2.55) $    2.32          91.0 %
  Loss from discontinued
   operations                       -      (0.01)      0.01         100.0
  Net loss                      (0.23)     (2.55)      2.32          91.0

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

STATISTICS:

Gross profit rate                15.8 %     17.6 %    (1.8)pts.

Selling, general and
 administrative expenses:
    % of revenue                 16.8       17.8       (1.0)
    % of gross profit           106.9      101.4        5.5

% Return -  Loss from
             operations          (1.1)      (6.5)       5.4
            Loss from
             continuing
             operations
             before taxes        (1.2)      (6.8)       5.6
            Loss from
             continuing
             operations          (0.7)      (6.9)       6.2
            Net loss             (0.7)      (6.9)       6.2

Effective income tax rate        41.0     % (1.8)    % 42.8 pts.






                  KELLY SERVICES, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 53 WEEKS ENDED JANUARY 3, 2010 AND 52 WEEKS ENDED DECEMBER 28, 2008
              (In millions of dollars except per share data)


                          2009        2008       Change         % Change
                       ----------  ----------  ----------      ---------
Revenue from services  $  4,314.8  $  5,517.3  $ (1,202.5)         (21.8)%

Cost of services          3,613.1     4,539.7      (926.6)         (20.4)
                       ----------  ----------  ----------      ---------

Gross profit                701.7       977.6      (275.9)         (28.2)

Selling, general and
 administrative
 expenses                   794.7       967.4      (172.7)         (17.9)

Asset impairments            53.1        80.5       (27.4)         (34.1)
                       ----------  ----------  ----------      ---------

Loss from operations       (146.1)      (70.3)      (75.8)        (107.8)

Other expense, net           (2.2)       (3.4)        1.2           35.8
                       ----------  ----------  ----------      ---------

Loss from continuing
 operations before
 taxes                     (148.3)      (73.7)      (74.6)        (101.1)

Income taxes                (43.2)        8.0       (51.2)            NM
                       ----------  ----------  ----------      ---------

Loss from continuing
 operations                (105.1)      (81.7)      (23.4)         (28.6)

Earnings (loss) from
 discontinued
 operations, net of
 tax                          0.6        (0.5)        1.1          212.0
                       ----------  ----------  ----------      ---------

Net loss               $   (104.5) $    (82.2) $    (22.3)         (27.0)%
                       ==========  ==========  ==========      =========

Basic loss per share
 on common stock
  Loss from continuing
   operations          $    (3.01) $    (2.35) $    (0.66)         (28.1)%
  Earnings (loss) from
   discontinued
   operations                0.02       (0.02)       0.04          200.0
  Net loss                  (3.00)      (2.37)      (0.63)         (26.6)

Diluted loss per share
 on common stock
  Loss from continuing
   operations          $    (3.01) $    (2.35) $    (0.66)         (28.1)%
  Earnings (loss) from
   discontinued
   operations                0.02       (0.02)       0.04          200.0
  Net loss                  (3.00)      (2.37)      (0.63)         (26.6)

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

STATISTICS:

Gross profit rate            16.3      % 17.7 %      (1.4)pts.

Selling, general and
 administrative
 expenses:
    % of revenue             18.4        17.5         0.9
    % of gross profit       113.2        99.0        14.2

% Return - Loss from
            operations       (3.4)       (1.3)       (2.1)
           Loss from
            continuing
            operations
            before taxes     (3.4)       (1.3)       (2.1)
           Loss from
            continuing
            operations       (2.4)       (1.5)       (0.9)
           Net loss          (2.4)       (1.5)       (0.9)

Effective income tax
 rate                        29.1 %     (10.8) %     39.9 pts.





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


                                               Fourth Quarter
                                 ----------------------------------------
                                                                 Constant
                                   2009      2008                Currency
                                (14 Weeks)(13 Weeks)   Change      Change
                                 --------  --------  ----------   -------
Americas Commercial
  Revenue from services
   (including fee-based income)  $  557.4  $  595.6        (6.4)%    (7.3)%
  Fee-based income                    1.5       2.8       (46.7)    (48.3)
  Gross profit                       79.8      96.4       (17.2)    (18.0)
  SG&A expenses excluding
   restructuring charges             67.9      79.7       (14.8)
  Restructuring charges               3.5       0.6       450.2
  Total SG&A expenses                71.4      80.3       (11.1)    (11.9)
  Earnings from operations            8.4      16.1       (47.7)
  Earnings from operations
   excluding restructuring
   charges                           11.9      16.7       (28.9)

  Gross profit rate                  14.3%     16.2%       (1.9)pts.
  Expense rates (excluding
   restructuring charges):
    % of revenue                     12.2      13.4        (1.2)
    % of gross profit                85.0      82.5         2.5
  Operating margin (excluding
   restructuring charges)             2.2       2.8        (0.6)

Americas PT
  Revenue from services
   (including fee-based income)  $  208.3  $  219.3        (5.0)%    (5.3)%
  Fee-based income                    2.2       3.7       (39.8)    (40.0)
  Gross profit                       31.9      37.5       (14.9)    (15.1)
  SG&A expenses excluding
   restructuring charges             24.7      27.8       (11.0)
  Restructuring charges               0.8         -          NM
  Total SG&A expenses                25.5      27.8        (8.1)     (8.3)
  Earnings from operations            6.4       9.7       (34.4)
  Earnings from operations
   excluding restructuring
   charges                            7.2       9.7       (26.2)

  Gross profit rate                  15.3%     17.1%       (1.8)pts.
  Expense rates (excluding
   restructuring charges):
    % of revenue                     11.9      12.7        (0.8)
    % of gross profit                77.5      74.1         3.4
  Operating margin (excluding
   restructuring charges)             3.4       4.4        (1.0)

EMEA Commercial
  Revenue from services
   (including fee-based income)  $  238.9  $  283.3       (15.7)%   (22.8)%
  Fee-based income                    4.3       7.5       (42.6)    (45.6)
  Gross profit                       37.4      47.6       (21.5)    (28.3)
  SG&A expenses excluding
   restructuring charges             35.2      51.4       (31.4)
  Restructuring charges               4.9       3.0        60.0
  Total SG&A expenses                40.1      54.4       (26.3)    (32.5)
  Earnings from operations           (2.7)     (6.8)       59.9
  Earnings from operations
   excluding restructuring
   charges                            2.2      (3.8)         NM

  Gross profit rate                  15.7%     16.8%       (1.1)pts.
  Expense rates (excluding
   restructuring charges):
    % of revenue                     14.8      18.1        (3.3)
    % of gross profit                94.2     107.8       (13.6)
  Operating margin (excluding
   restructuring charges)             0.9      (1.3)        2.2






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


                                              Fourth Quarter
                                -----------------------------------------
                                                                 Constant
                                  2009      2008                 Currency
                               (14 Weeks)(13 Weeks)  Change        Change
                                --------  --------  --------      -------
EMEA PT
  Revenue from services
   (including fee-based income) $   39.6  $   38.4       3.0 %       (6.1)%
  Fee-based income                   3.6       5.5     (34.4)       (37.4)
  Gross profit                       9.8      11.2     (12.7)       (19.4)
  Total SG&A expenses               10.6      11.7      (9.5)       (17.1)
  Earnings from operations          (0.8)     (0.5)    (58.0)

  Gross profit rate                 24.7%     29.1%     (4.4)pts.
  Expense rates:
    % of revenue                    26.8      30.5      (3.7)
    % of gross profit              108.5     104.7       3.8
  Operating margin                  (2.1)     (1.4)     (0.7)

APAC Commercial
  Revenue from services
   (including fee-based income) $   83.0  $   73.5      12.9 %       (2.2)%
  Fee-based income                   2.9       3.0      (6.2)       (15.2)
  Gross profit                      12.1      11.4       6.8         (7.8)
  SG&A expenses excluding
   restructuring charges            11.6      12.4      (7.2)
  Restructuring charges              1.4         -        NM
  Total SG&A expenses               13.0      12.4       4.6         (9.8)
  Earnings from operations          (0.9)     (1.0)     19.7
  Earnings from operations
   excluding restructuring
   charges                           0.5      (1.0)       NM

  Gross profit rate                 14.6%     15.5%     (0.9)pts.
  Expense rates (excluding
   restructuring charges):
    % of revenue                    13.9      16.9      (3.0)
    % of gross profit               95.0     109.3     (14.3)
  Operating margin (excluding
   restructuring charges)            0.7      (1.4)      2.1

APAC PT
  Revenue from services
   (including fee-based income) $    7.2  $    7.2      (0.4)%      (15.9)%
  Fee-based income                   1.0       0.8      29.9         17.7
  Gross profit                       2.1       1.9       7.8         (7.0)
  Total SG&A expenses                2.6       2.2      19.3          2.4
  Earnings from operations          (0.5)     (0.3)   (106.4)

  Gross profit rate                 28.6%     26.4%      2.2 pts.
  Expense rates:
    % of revenue                    35.8      29.9       5.9
    % of gross profit              125.2     113.1      12.1
  Operating margin                  (7.2)     (3.5)     (3.7)





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


                                             Fourth Quarter
                              -------------------------------------------
                                                                 Constant
                                2009       2008                  Currency
                              (14 Weeks) (13 Weeks)  Change        Change
                              ---------  ---------  -------      --------
OCG
  Revenue from services
   (including fee-based
   income)                    $    68.2  $    68.4     (0.3)%        (1.3)%
  Fee-based income                  6.0        7.2    (16.2)        (19.6)
  Gross profit                     15.5       18.9    (18.0)        (19.6)
  SG&A expenses excluding
   restructuring charges           17.9       18.0     (0.8)
  Restructuring charges             1.3        0.4    239.5
  Total SG&A expenses              19.2       18.4      4.1           1.1
  Earnings from operations         (3.7)       0.5       NM
  Earnings from operations
   excluding restructuring
   charges                         (2.4)       0.9       NM

  Gross profit rate                22.7%      27.6%    (4.9)pts.
  Expense rates (excluding
   restructuring charges):
    % of revenue                   26.2       26.4     (0.2)
    % of gross profit             115.7       95.6     20.1
  Operating margin (excluding
   restructuring charges)          (3.6)       1.2     (4.8)

Corporate Expense
  SG&A expenses excluding
   restructuring charges      $    17.7  $    20.6    (14.2)%
  Restructuring charges             1.5        0.3    418.1
  Total SG&A expenses              19.2       20.9     (8.1)         (8.1)

Asset Impairments             $       -  $    80.5   (100.0)%

Consolidated Total (excluding
 intersegment activity)
  Revenue from services
   (including fee-based
   income)                    $ 1,194.1  $ 1,279.1     (6.6)%       (10.0)%
  Fee-based income                 21.5       30.5    (29.5)        (33.0)
  Gross profit                    188.3      224.6    (16.2)        (19.4)
  SG&A expenses excluding
   restructuring charges          187.9      223.5    (16.0)
  Restructuring charges            13.4        4.3    209.0
  Total SG&A expenses             201.3      227.8    (11.7)        (15.1)
  Earnings from operations        (13.0)     (83.7)    84.5
  Earnings from operations
   excluding restructuring
   charges                          0.4      (79.4)      NM

  Gross profit rate                15.8%      17.6%    (1.8)pts.
  Expense rates (excluding
   restructuring charges):
    % of revenue                   15.7       17.5     (1.8)
    % of gross profit              99.8       99.4      0.4
  Operating margin (excluding
   restructuring charges)           0.0       (6.2)     6.2






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


                                         December Year to Date
                             --------------------------------------------
                                                                 Constant
                               2009       2008                   Currency
                             (53 Weeks) (52 Weeks)   Change        Change
                             ---------  ---------  ---------     --------
Americas Commercial
  Revenue from services
   (including fee-based
   income)                   $ 1,980.3  $ 2,516.7      (21.3) %     (20.3)%
  Fee-based income                 6.6       15.7      (58.4)       (56.8)
  Gross profit                   290.7      399.0      (27.1)       (26.3)
  SG&A expenses excluding
   restructuring charges         273.2      328.2      (16.7)
  Restructuring charges            7.2        0.9         NM
  Total SG&A expenses            280.4      329.1      (14.8)       (13.8)
  Earnings from operations        10.3       69.9      (85.1)
  Earnings from operations
   excluding restructuring
   charges                        17.5       70.8      (75.2)

  Gross profit rate               14.7%      15.9%      (1.2)pts.
  Expense rates (excluding
   restructuring charges):
    % of revenue                  13.8       13.0        0.8
    % of gross profit             93.9       82.2       11.7
  Operating margin
   (excluding restructuring
   charges)                        0.9        2.8       (1.9)

Americas PT
  Revenue from services
   (including fee-based
   income)                   $   792.6  $   938.2      (15.5)%      (15.4)%
  Fee-based income                 9.4       19.4      (51.5)       (51.4)
  Gross profit                   125.1      161.7      (22.6)       (22.5)
  SG&A expenses excluding
   restructuring charges         100.9      113.3      (10.9)
  Restructuring charges            1.0          -         NM
  Total SG&A expenses            101.9      113.3      (10.0)        (9.8)
  Earnings from operations        23.2       48.4      (52.2)
  Earnings from operations
   excluding restructuring
   charges                        24.2       48.4      (50.0)

  Gross profit rate               15.8%      17.2%      (1.4)pts.
  Expense rates (excluding
   restructuring charges):
    % of revenue                  12.7       12.1        0.6
    % of gross profit             80.7       70.1       10.6
  Operating margin
   (excluding restructuring
   charges)                        3.0        5.2       (2.2)

EMEA Commercial
  Revenue from services
   (including fee-based
   income)                   $   895.2  $ 1,310.5      (31.7)%      (24.9)%
  Fee-based income                16.6       39.5      (58.0)       (52.6)
  Gross profit                   140.2      227.3      (38.4)       (32.5)
  SG&A expenses excluding
   restructuring charges         150.3      226.5      (33.7)
  Restructuring charges           15.6        3.9      301.4
  Total SG&A expenses            165.9      230.4      (28.0)       (20.2)
  Earnings from operations       (25.7)      (3.1)        NM
  Earnings from operations
   excluding restructuring
   charges                       (10.1)       0.8         NM

  Gross profit rate               15.7%      17.4%      (1.7)pts.
  Expense rates (excluding
   restructuring charges):
    % of revenue                  16.8       17.3       (0.5)
    % of gross profit            107.2       99.6        7.6
  Operating margin
   (excluding restructuring
   charges)                       (1.1)       0.1       (1.2)





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


                                           December Year to Date
                                 ----------------------------------------
                                                                 Constant
                                   2009      2008                Currency
                                (53 Weeks)(52 Weeks)  Change       Change
                                 --------  --------  --------     -------
EMEA PT
  Revenue from services
   (including fee-based income)  $  141.9  $  172.5     (17.8)%     (10.7)%
  Fee-based income                   15.7      26.8     (41.2)      (33.2)
  Gross profit                       37.8      51.2     (26.2)      (18.8)
  Total SG&A expenses                40.6      48.9     (16.9)       (8.5)
  Earnings from operations           (2.8)      2.3        NM

  Gross profit rate                  26.6%     29.7%     (3.1)pts.
  Expense rates:
    % of revenue                     28.6      28.3       0.3
    % of gross profit               107.6      95.5      12.1
  Operating margin                   (2.0)      1.3      (3.3)

APAC Commercial
  Revenue from services
   (including fee-based income)  $  284.9  $  336.0     (15.2)%     (11.0)%
  Fee-based income                    9.7      17.0     (43.0)      (40.6)
  Gross profit                       41.6      56.3     (26.1)      (22.6)
  SG&A expenses excluding
   restructuring charges             44.6      56.6     (21.3)
  Restructuring charges               1.6         -        NM
  Total SG&A expenses                46.2      56.6     (18.5)      (14.8)
  Earnings from operations           (4.6)     (0.3)       NM
  Earnings from operations
   excluding restructuring
   charges                           (3.0)     (0.3)       NM

  Gross profit rate                  14.6%     16.8%     (2.2)pts.
  Expense rates (excluding
   restructuring charges):
    % of revenue                     15.6      16.8      (1.2)
    % of gross profit               107.0     100.5       6.5
  Operating margin (excluding
   restructuring charges)            (1.0)     (0.1)     (0.9)

APAC PT
  Revenue from services
   (including fee-based income)  $   25.4  $   34.3     (26.0)%     (24.3)%
  Fee-based income                    3.8       5.1     (25.0)      (21.0)
  Gross profit                        7.7      10.2     (25.1)      (22.6)
  Total SG&A expenses                 9.2      10.7     (14.2)       (9.9)
  Earnings from operations           (1.5)     (0.5)   (224.9)

  Gross profit rate                  30.2%     29.8%      0.4 pts.
  Expense rates:
    % of revenue                     36.2      31.2       5.0
    % of gross profit               119.8     104.6      15.2
  Operating margin                   (6.0)     (1.4)     (4.6)





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


                                          December Year to Date
                               ------------------------------------------
                                                                 Constant
                                 2009       2008                 Currency
                               (53 Weeks) (52 Weeks)  Change      Change
                               ---------  ---------  --------    --------
OCG
  Revenue from services
   (including fee-based
   income)                     $   219.9  $   233.3     (5.7)%       (4.7)%
  Fee-based income                  24.4       27.8    (12.3)        (9.4)
  Gross profit                      59.7       72.9    (18.0)       (16.1)
  SG&A expenses excluding
   restructuring charges            69.6       69.5      0.0
  Restructuring charges              1.9        0.5    328.4
  Total SG&A expenses               71.5       70.0      2.0          4.3
  Earnings from operations         (11.8)       2.9       NM
  Earnings from operations
   excluding restructuring
   charges                          (9.9)       3.4       NM

  Gross profit rate                 27.2%      31.2%    (4.0)pts.
  Expense rates (excluding
   restructuring charges):
    % of revenue                    31.7       29.8      1.9
    % of gross profit              116.6       95.6     21.0
  Operating margin (excluding
   restructuring charges)           (4.5)       1.4     (5.9)

Corporate Expense
  SG&A expenses excluding
   restructuring charges       $    77.5  $   108.2    (28.4)%
  Restructuring charges              2.6        1.2    116.3
  Total SG&A expenses               80.1      109.4    (26.8)       (26.8)

Asset Impairments              $    53.1  $    80.5    (34.1)%

Consolidated Total (excluding
 intersegment activity)
  Revenue from services
   (including fee-based
   income)                     $ 4,314.8  $ 5,517.3    (21.8)%      (19.2)%
  Fee-based income                  86.1      151.3    (43.1)       (39.2)
  Gross profit                     701.7      977.6    (28.2)       (25.7)
  SG&A expenses excluding
   restructuring charges           764.8      960.9    (20.4)
  Restructuring charges             29.9        6.5    360.9
  Total SG&A expenses              794.7      967.4    (17.9)       (14.8)
  Earnings from operations        (146.1)     (70.3)  (107.8)
  Earnings from operations
   excluding restructuring
   charges                        (116.2)     (63.8)   (82.0)

  Gross profit rate                 16.3%      17.7%    (1.4)pts.
  Expense rates (excluding
   restructuring charges):
    % of revenue                    17.7       17.4      0.3
    % of gross profit              109.0       98.3     10.7
  Operating margin (excluding
   restructuring charges)           (2.7)      (1.2)    (1.5)





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


                                                 January 3,   December 28,
                                                    2010          2008
                                                ------------  ------------
Current Assets
  Cash and equivalents                          $       88.9  $      118.3
  Trade accounts receivable, less allowances of
    $15.0 and $17.0, respectively                      717.9         815.8
  Prepaid expenses and other current assets             70.6          62.0
  Deferred taxes                                        21.0          31.9
                                                ------------  ------------
            Total current assets                       898.4       1,028.0

Property and Equipment, Net                            127.1         151.3

Noncurrent Deferred Taxes                               77.5          40.0

Goodwill, Net                                           67.3         117.8

Other Assets                                           131.4         120.2

                                                ------------  ------------
Total Assets                                    $    1,301.7  $    1,457.3
                                                ============  ============

Current Liabilities
  Short-term borrowings and current portion of
    long-term debt                              $       79.6  $       35.2
  Accounts payable and accrued liabilities             182.6         244.1
  Accrued payroll and related taxes                    208.3         243.2
  Accrued insurance                                     19.7          26.3
  Income and other taxes                                47.4          51.8
                                                ------------  ------------
            Total current liabilities                  537.6         600.6

Noncurrent Liabilities
  Long-term debt                                        57.5          80.0
  Accrued insurance                                     47.3          46.9
  Accrued retirement benefits                           76.9          61.6
  Other long-term liabilities                           16.0          15.3
                                                ------------  ------------
            Total noncurrent liabilities               197.7         203.8

Stockholders' Equity
  Common stock                                          40.1          40.1
  Treasury stock                                      (107.2)       (111.2)
  Paid-in capital                                       36.9          35.8
  Earnings invested in the business                    571.5         676.0
  Accumulated other comprehensive income                25.1          12.2
                                                ------------  ------------
            Total stockholders' equity                 566.4         652.9
                                                ------------  ------------

Total Liabilities and Stockholders' Equity      $    1,301.7  $    1,457.3
                                                ============  ============

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

STATISTICS:
  Working Capital                               $      360.8  $      427.4
  Current Ratio                                          1.7           1.7
  Debt-to-capital %                                     19.5%         15.0%
  Global Days Sales Outstanding                           51            50




                  KELLY SERVICES, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 53 WEEKS ENDED JANUARY 3, 2010 AND 52 WEEKS ENDED DECEMBER 28, 2008
                         (In millions of dollars)




                                                        2009       2008
                                                      ---------  ---------

Cash flows from operating activities
   Net loss                                           $  (104.5) $   (82.2)
   Noncash adjustments:
     Impairment of assets                                  53.1       80.5
     Depreciation and amortization                         40.9       46.0
     Provision for bad debts                                2.2        6.7
     Stock-based compensation                               5.1        4.4
     Other, net                                            (2.2)       3.7
   Changes in operating assets and liabilities            (11.8)      42.5
                                                      ---------  ---------

        Net cash from operating activities                (17.2)     101.6
                                                      ---------  ---------

Cash flows from investing activities
   Capital expenditures                                   (13.1)     (31.1)
   Acquisition of companies, net of cash received          (7.5)     (32.7)
   Other investing activities                              (2.8)      (0.2)
                                                      ---------  ---------

        Net cash from investing activities                (23.4)     (64.0)
                                                      ---------  ---------

Cash flows from financing activities
   Net change in revolving line of credit                  52.7      (34.2)
   Repayment of debt                                      (30.5)         -
   Proceeds from debt                                         -       42.5
   Dividend payments                                          -      (19.1)
   Purchase of treasury stock                                 -       (8.0)
   Other financing activities                             (12.8)      10.0
                                                      ---------  ---------

        Net cash from financing activities                  9.4       (8.8)
                                                      ---------  ---------

Effect of exchange rates on cash and equivalents            1.8       (3.3)
                                                      ---------  ---------

Net change in cash and equivalents                        (29.4)      25.5
Cash and equivalents at beginning of period               118.3       92.8
                                                      ---------  ---------


Cash and equivalents at end of period                 $    88.9  $   118.3
                                                      =========  =========




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


                               Fourth  Quarter (Commercial, PT and OCG)
                            ---------------------------------------------
                                                           % Change
                               2009        2008                  Constant
                            (14 Weeks)  (13 Weeks)      US$      Currency
                            ----------- ----------- ---------   ---------

Americas
  United States             $     733.1 $     781.5      (6.2)%      (6.2)%
  Canada                           51.5        50.2       2.7        (9.9)
  Mexico                           19.0        18.1       5.3         6.6
  Puerto Rico                      15.0        18.7     (19.7)      (19.7)
                            ----------- -----------
Total Americas                    818.6       868.5      (5.7)       (6.4)

EMEA
  France                           78.7        75.1       4.7        (6.2)
  United Kingdom                   43.1        80.7     (46.5)      (48.1)
  Switzerland                      38.8        41.4      (6.4)      (17.5)
  Russia                           19.9        22.3     (10.8)       (3.3)
  Portugal                         19.4        15.6      24.4        11.3
  Italy                            19.0        25.2     (24.8)      (32.9)
  Germany                          17.6        17.7       0.3       (10.5)
  Norway                           17.3        16.9       1.7       (14.2)
  Other                            29.0        32.7     (11.4)      (20.1)
                            ----------- -----------
Total EMEA                        282.8       327.6     (13.7)      (21.0)

APAC
  Australia                        30.4        26.0      16.9       (13.1)
  Singapore                        17.9        16.1      10.9         4.1
  Malaysia                         13.7        12.3      12.3         7.7
  Other                            30.7        28.6       7.0        (3.8)
                            ----------- -----------
Total APAC                         92.7        83.0      11.6        (3.5)

Total Kelly Services, Inc.  $   1,194.1 $   1,279.1      (6.6)%     (10.0)%
                            =========== ===========




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


                            December Year to Date (Commercial, PT and OCG)
                            ----------------------------------------------
                                                           % Change
                               2009        2008                  Constant
                            (53 Weeks)  (52 Weeks)      US$      Currency
                            ----------- ----------- ---------   ---------

Americas
  United States             $   2,634.3 $   3,237.1     (18.6)%     (18.6)%
  Canada                          183.4       237.8     (22.9)      (17.5)
  Mexico                           66.5        76.2     (12.7)        6.2
  Puerto Rico                      57.9        77.4     (25.2)      (25.2)
                            ----------- -----------
Total Americas                  2,942.1     3,628.5     (18.9)      (18.2)

EMEA
  France                          272.7       350.8     (22.3)      (18.3)
  United Kingdom                  206.7       398.0     (48.1)      (37.0)
  Switzerland                     138.6       184.9     (25.1)      (25.2)
  Italy                            72.9       131.9     (44.7)      (41.5)
  Russia                           65.4        90.9     (28.0)       (8.9)
  Germany                          65.1        83.0     (21.5)      (17.2)
  Norway                           61.7        86.1     (28.4)      (18.9)
  Portugal                         59.5        27.5     116.5       124.9
  Other                           111.2       154.4     (28.0)      (22.1)
                            ----------- -----------
Total EMEA                      1,053.8     1,507.5     (30.1)      (23.3)

APAC
  Australia                        98.3       133.7     (26.4)      (21.3)
  Singapore                        64.4        71.3      (9.6)       (7.3)
  Malaysia                         50.1        55.2      (9.2)       (4.1)
  Other                           106.1       121.1     (12.5)       (9.0)
                            ----------- -----------
Total APAC                        318.9       381.3     (16.4)      (12.3)

Total Kelly Services, Inc.  $   4,314.8 $   5,517.3     (21.8)%     (19.2)%
                            =========== ===========




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


                                                             December
                                      Fourth Quarter       Year to Date
                                    ------------------  ------------------
                                      2009      2008      2009      2008
                                    --------  --------  --------  --------

Pretax loss from operations         $  (13.0) $  (83.7) $ (146.1) $  (70.3)

Restructuring charges  (Note 1)         13.4       4.3      29.9       6.5
Asset impairments  (Note 2)                -      80.5      53.1      80.5
Litigation charges                         -         -       5.3      22.5
                                    --------  --------  --------  --------

Earnings (loss) from operations
 excluding restructuring, asset
 impairment and litigation charges  $    0.4  $    1.1  $  (57.8) $   39.2
                                    ========  ========  ========  ========


                                                Fourth Quarter
                                    --------------------------------------
                                           2009                2008
                                    ------------------  ------------------
                                                 Per                 Per
                                     Amount     Share    Amount     Share
                                    --------  --------  --------  --------

Loss from continuing operations,
 net of tax                         $   (8.2) $  (0.23) $  (88.6) $  (2.55)

Restructuring charges, net of
 taxes  (Note 1)                        10.1      0.29       3.7      0.11
Asset impairments, net of taxes
 (Note 2)                                  -         -      77.2      2.22
                                    --------            --------

Earnings (loss) from continuing
 operations excluding restructuring
 and asset impairment charges, net
 of taxes                           $    1.9  $   0.05  $   (7.7) $  (0.22)
                                    ========  ========  ========  ========


                                            December Year to Date
                                    --------------------------------------
                                           2009                2008
                                    ------------------  ------------------
                                                Per                 Per
                                     Amount     Share    Amount     Share
                                    --------  --------  --------  --------

Loss from continuing operations,
 net of tax                         $ (105.1) $  (3.01) $  (81.7) $  (2.35)

Restructuring charges, net of
 taxes  (Note 1)                        24.0      0.69       5.3      0.15
Asset impairments, net of taxes
 (Note 2)                               50.0      1.43      77.2      2.22
Litigation charges, net of taxes         3.3      0.09      13.9      0.40
                                    --------            --------

(Loss) earnings from continuing
 operations excluding restructuring,
 asset impairment and litigation
 charges, net of taxes              $  (27.8) $  (0.80) $   14.7  $   0.42
                                    ========  ========  ========  ========




                  KELLY SERVICES, INC. AND SUBSIDIARIES
                   RECONCILIATION OF NON-GAAP MEASURES
                             (UNAUDITED)



Management believes that the non-GAAP (Generally Accepted Accounting
Principles) information excluding the impairment, restructuring and
litigation charges is useful to understand the Company's fiscal 2009
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) Restructuring charges represent global costs incurred in connection
    with the reduction in the number of permanent employees and the
    consolidation, sale or closure of branch locations.  These costs
    include severance, lease terminations, asset write-offs and other
    miscellaneous costs.

(2) For 2009, asset impairment charges include adjustments to the value of
    goodwill for the Company's Americas Commercial, EMEA PT and APAC
    Commercial reporting segments, and long-lived assets and intangible
    assets related to Japan and Europe.  For 2008, asset impairment charges
    include adjustments to the value of goodwill for the Company's EMEA
    Commercial segment, the Company's investment in Tempstaff, and assets
    related to operations in the U.K.

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