SOURCE: Kelly Services, Inc.

Kelly Services, Inc.

August 05, 2009 07:30 ET

Kelly Services Reports 2nd Quarter 2009 Results

TROY, MI--(Marketwire - August 5, 2009) - Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a world leader in workforce management services and human resources solutions, today announced results for the second quarter of 2009.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the second quarter of 2009 totaled $1.0 billion, a 29% decrease compared to the corresponding quarter in 2008. On a constant currency basis, revenue decreased by 24%.

Losses from operations for the second quarter of 2009 totaled $74.5 million, compared to earnings from operations of $15.0 million reported for the second quarter of 2008. Included in the results from operations for the second quarter 2009 are impairment charges totaling $52.6 million and $2.4 million of restructuring costs relating to the Company's UK operations. Excluding the impairment and restructuring charges, the loss from operations was $19.5 million for the second quarter of 2009.

Diluted losses per share from continuing operations in the second quarter of 2009 were $1.89, compared to second quarter 2008 earnings of $0.30 per share. The impairment charges totaled $1.41 per share and the UK restructuring charge totaled $0.07 per share in the second quarter of 2009.

The second quarter impairment charges include adjustments to the value of goodwill for the Company's Americas Commercial, EMEA PT and APAC Commercial segments and the long-lived assets related to operations in Japan. The UK restructuring charge is part of a plan to further consolidate and close branches in the UK during 2009.

Commenting on the second quarter results, Camden said the Company's loss reflects the continued weakened state of labor markets throughout the world.

"In this challenging environment, we remain focused on expense control, where our efforts have had a significant impact on our overall performance. Going forward, we will seek out additional opportunities to simplify our business structure and operate more efficiently.

"While having the potential to yield immediate results, these actions will also serve to strengthen Kelly, provide impetus when the economy improves, and position us for long-term success," said Camden.

In conjunction with its second quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on August 5, to review the results and answer questions. The call may be accessed in one of the following ways:

Via the Telephone:

U.S.                    1 800 553-0327
International           1 651 291-5254

The pass code is Kelly Services

Via the Internet:

The call is also available via the internet through the Kelly Services website: www.kellyservices.com

This release contains statements that are forward looking in nature and accordingly, are subject to risks and uncertainties. These factors include: 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.

A reconciliation of certain non-GAAP financial measures discussed in this release is included in the attached financial information schedules.

About Kelly Services

Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB) is a world leader in workforce management services and human resources solutions headquartered in Troy, Michigan, offering temporary staffing services, outsourcing, vendor on-site and full-time placement to clients on a global basis. Kelly provides employment to nearly 650,000 employees annually, with skills including office services, accounting, engineering, information technology, law, science, marketing, creative services, light industrial, education, and health care. Revenue in 2008 was $5.5 billion. Visit www.kellyservices.com.


                  KELLY SERVICES, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF EARNINGS
          FOR THE 13 WEEKS ENDED JUNE 28, 2009 AND JUNE 29, 2008
                                (UNAUDITED)
              (In millions of dollars except per share data)




                              2009       2008      Change        % Change
                            ---------  ---------  ---------      --------
Revenue from services       $ 1,028.9  $ 1,452.0  $  (423.1)        (29.1)%

Cost of services                857.2    1,194.6     (337.4)        (28.2)
                            ---------  ---------  ---------      --------

Gross profit                    171.7      257.4      (85.7)        (33.3)

Selling, general and
 administrative expenses        193.6      242.4      (48.8)        (20.2)
Asset impairments                52.6          -       52.6            NM
                            ---------  ---------  ---------      --------

(Loss) earnings from
 operations                     (74.5)      15.0      (89.5)           NM

Other (expense) income, net      (1.0)       0.1       (1.1)           NM
                            ---------  ---------  ---------      --------

(Loss) earnings from
 continuing operations
 before taxes                   (75.5)      15.1      (90.6)           NM

Income taxes                     (9.5)       4.7      (14.2)       (302.4)
                            ---------  ---------  ---------      --------

(Loss) earnings from
 continuing operations          (66.0)      10.4      (76.4)           NM

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

Net (loss) earnings         $   (66.0) $    10.5  $   (76.5)           NM%
                            =========  =========  =========      ========

Basic (loss) earnings per
 share on common stock
  (Loss) earnings from
   continuing operations    $   (1.89) $    0.30  $   (2.19)           NM%
  Earnings from discontinued
   operations                       -          -          -            NM
  Net (loss) earnings           (1.89)      0.30      (2.19)           NM

Diluted (loss) earnings per
 share on common stock
  (Loss) earnings from
   continuing operations    $   (1.89) $    0.30  $   (2.19)           NM%
  Earnings from discontinued
   operations                       -          -          -            NM
  Net (loss) earnings           (1.89)      0.30      (2.19)           NM

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

STATISTICS:

Gross profit rate                16.7%      17.7%      (1.0) pts.

Selling, general and
 administrative expenses:
    % of revenue                 18.8       16.7        2.1
    % of gross profit           112.7       94.2       18.5

% Return -  (Loss) earnings
 from operations                 (7.2)       1.0       (8.2)
      (Loss) earnings from
       continuing operations
       before taxes              (7.3)       1.0       (8.3)
      (Loss) earnings from
       continuing operations     (6.4)       0.7       (7.1)
      Net (loss) earnings        (6.4)       0.7       (7.1)

Effective income tax rate        12.5%      30.9%     (18.4) pts.






                  KELLY SERVICES, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF EARNINGS
          FOR THE 26 WEEKS ENDED JUNE 28, 2009 AND JUNE 29, 2008
                                (UNAUDITED)
              (In millions of dollars except per share data)




                             2009       2008       Change        % Change
                           ---------  ---------- ---------       --------
Revenue from services      $ 2,071.5  $  2,840.4 $  (768.9)         (27.1)%

Cost of services             1,724.3     2,333.1    (608.8)         (26.1)
                           ---------  ---------- ---------       --------

Gross profit                   347.2       507.3    (160.1)         (31.6)

Selling, general and
 administrative expenses       399.7       479.4     (79.7)         (16.6)
Asset impairments               52.6           -      52.6             NM
                           ---------  ---------- ---------       --------

(Loss) earnings from
 operations                   (105.1)       27.9    (133.0)        (476.6)

Other income, net                0.3         0.1       0.2          237.8
                           ---------  ---------- ---------       --------

(Loss) earnings from
 continuing operations
 before taxes                 (104.8)       28.0    (132.8)        (474.1)

Income taxes                   (22.7)        9.6     (32.3)        (337.0)
                           ---------  ---------- ---------       --------

(Loss) earnings from
 continuing operations         (82.1)       18.4    (100.5)            NM

Earnings from discontinued
 operations, net of tax          0.6         0.3       0.3           80.6
                           ---------  ---------- ---------       --------

Net (loss) earnings        $   (81.5) $     18.7 $  (100.2)            NM%
                           =========  ========== =========       ========

Basic (loss) earnings per
 share on common stock
  (Loss) earnings from
   continuing operations   $   (2.36) $     0.52 $   (2.88)            NM%
  Earnings from
   discontinued operations      0.02        0.01      0.01          100.0
  Net (loss) earnings          (2.34)       0.53     (2.87)            NM

Diluted (loss) earnings
 per share on common stock
  (Loss) earnings from
   continuing operations   $   (2.36) $     0.52 $   (2.88)            NM%
  Earnings from
   discontinued operations      0.02        0.01      0.01          100.0
  Net (loss) earnings          (2.34)       0.53     (2.87)            NM

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

STATISTICS:

Gross profit rate               16.8%       17.9      (1.1) pts.

Selling, general and
 administrative expenses:
    % of revenue                19.3        16.9       2.4
    % of gross profit          115.1        94.5      20.6

% Return -  (Loss)
 earnings from operations       (5.1)        1.0      (6.1)
      (Loss) earnings from
       continuing operations
       before taxes             (5.1)        1.0      (6.1)
      (Loss) earnings from
       continuing operations    (4.0)        0.6      (4.6)
      Net (loss) earnings       (3.9)        0.7      (4.6)

Effective income tax rate       21.7%       34.2%    (12.5) pts.






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


                                          Second Quarter
                        -------------------------------------------------
                                                                 Constant
                                                                 Currency
                            2009         2008       Change       Change
                        -----------  -----------  ----------   ----------
Americas Commercial
  Revenue from services
   (including fee-based
   income)              $     473.0  $     656.8       (28.0)%      (26.4)%
  Fee-based income              1.6          4.4       (65.1)       (63.7)
  Gross profit                 70.6        102.5       (31.1)       (29.8)
  SG&A expenses                68.6         82.8       (17.2)       (15.6)
  Earnings from
   operations                   2.0         19.7       (89.8)

  Gross profit rate            14.9%        15.6%       (0.7) pts.
  Expense rates:
    % of revenue               14.5         12.6         1.9
    % of gross profit          97.1         80.8        16.3
  Operating margin              0.4          3.0        (2.6)

Americas PT
  Revenue from services
   (including fee-based
   income)              $     194.8  $     245.5       (20.7)%      (20.5)%
  Fee-based income              2.3          5.4       (57.7)       (57.6)
  Gross profit                 32.2         42.8       (24.7)       (24.5)
  SG&A expenses                25.6         28.4       (10.1)        (9.7)
  Earnings from
   operations                   6.6         14.4       (53.6)

  Gross profit rate            16.5%        17.4%       (0.9) pts.
  Expense rates:
    % of revenue               13.1         11.6         1.5
    % of gross profit          79.2         66.3        12.9
  Operating margin              3.4          5.9        (2.5)

EMEA Commercial
  Revenue from services
   (including fee-based
   income)              $     211.7  $     351.7       (39.8)%      (28.4)%
  Fee-based income              3.9         11.1       (65.2)       (58.0)
  Gross profit                 34.4         61.1       (43.8)       (33.4)
  SG&A expenses                39.7         59.8       (33.6)       (21.5)
  Earnings from
   operations                  (5.3)         1.3          NM
  Earnings from
   operations
   (excluding
   restructuring
   charges)                    (2.9)         1.3      (320.1)

  Gross profit rate            16.2%        17.4%       (1.2) pts.
  Expense rates:
    % of revenue               18.8         17.0         1.8
    % of gross profit         115.6         97.8        17.8
  Operating margin             (2.5)         0.4        (2.9)

EMEA PT
  Revenue from services
   (including fee-based
   income)              $      33.1  $      46.3       (28.6)%      (15.6)%
  Fee-based income              3.8          7.7       (50.8)       (40.5)
  Gross profit                  8.8         14.1       (37.5)       (25.8)
  SG&A expenses                10.1         12.7       (20.3)        (5.0)
  Earnings from
   operations                  (1.3)         1.4      (196.6)

  Gross profit rate            26.6%        30.4%       (3.8) pts.
  Expense rates:
    % of revenue               30.6         27.4         3.2
    % of gross profit         115.1         90.3        24.8
  Operating margin             (4.0)         3.0        (7.0)






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


                                          Second Quarter
                        -------------------------------------------------
                                                                 Constant
                                                                 Currency
                            2009         2008       Change       Change
                        -----------  -----------  ----------   ----------
APAC Commercial
  Revenue from services
   (including fee-based
   income)              $      66.3  $      90.9       (27.1)%      (16.4)%
  Fee-based income              2.3          5.2       (55.5)       (50.5)
  Gross profit                  9.7         15.7       (38.6)       (29.8)
  SG&A expenses                10.9         15.2       (28.7)       (18.9)
  Earnings from
   operations                  (1.2)         0.5      (331.9)

  Gross profit rate            14.6%        17.3%       (2.7) pts.
  Expense rates:
    % of revenue               16.4         16.8        (0.4)
    % of gross profit         112.3         96.7        15.6
  Operating margin             (1.8)         0.6        (2.4)

APAC PT
  Revenue from services
   (including fee-based
   income)              $       5.5  $       9.4       (41.4)%      (33.9)%
  Fee-based income              0.8          1.4       (39.9)       (31.3)
  Gross profit                  1.7          2.9       (39.2)       (31.4)
  SG&A expenses                 2.1          3.0       (29.2)       (18.5)
  Earnings from
   operations                  (0.4)        (0.1)     (160.3)

  Gross profit rate            31.5%        30.3%        1.2 pts.
  Expense rates:
    % of revenue               38.6         31.9         6.7
    % of gross profit         122.6        105.3        17.3
  Operating margin             (7.1)        (1.6)       (5.5)

OCG
  Revenue from services
   (including fee-based
   income)              $      50.1  $      57.2       (12.3)%      (10.3)%
  Fee-based income              6.0          7.1       (16.3)       (10.8)
  Gross profit                 14.6         18.5       (21.3)       (18.0)
  SG&A expenses                17.8         17.9        (1.0)         3.7
  Earnings from
   operations                  (3.2)         0.6          NM

  Gross profit rate            29.0%        32.3%       (3.3) pts.
  Expense rates:
    % of revenue               35.5         31.4         4.1
    % of gross profit         122.1         97.1        25.0
  Operating margin             (6.4)         0.9        (7.3)

Corporate Expense       $     (19.1) $     (22.8)       16.4%






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


                                        June Year to Date
                        -------------------------------------------------
                                                                 Constant
                                                                 Currency
                            2009         2008       Change       Change
                        -----------  -----------  ----------   ----------
Americas Commercial
  Revenue from services
   (including fee-based
   income)              $     955.4  $   1,299.5       (26.5)%      (24.6)%
  Fee-based income              3.4          8.6       (61.2)       (58.4)
  Gross profit                143.7        207.4       (30.7)       (29.1)
  SG&A expenses               141.2        165.5       (14.7)       (12.7)
  Earnings from
   operations                   2.5         41.9       (94.0)

  Gross profit rate            15.0%        16.0%       (1.0) pts.
  Expense rates:
    % of revenue               14.8         12.7         2.1
    % of gross profit          98.3         79.8        18.5
  Operating margin              0.3          3.2        (2.9)

Americas PT
  Revenue from services
   (including fee-based
   income)              $     392.2  $     484.1       (19.0)%      (18.8)%
  Fee-based income              5.1         10.7       (52.8)       (52.7)
  Gross profit                 63.7         85.1       (25.2)       (24.9)
  SG&A expenses                51.8         56.6        (8.6)        (8.2)
  Earnings from
   operations                  11.9         28.5       (58.1)

  Gross profit rate            16.2%        17.6%       (1.4) pts.
  Expense rates:
    % of revenue               13.2         11.7         1.5
    % of gross profit          81.2         66.5        14.7
  Operating margin              3.0          5.9        (2.9)

EMEA Commercial
  Revenue from services
   (including fee-based
   income)              $     428.3  $     673.6       (36.4)%      (23.4)%
  Fee-based income              8.6         21.8       (60.3)       (51.6)
  Gross profit                 68.9        116.7       (41.0)       (29.5)
  SG&A expenses                86.3        117.0       (26.2)       (10.7)
  Earnings from
   operations                 (17.4)        (0.3)         NM
  Earnings from
   operations
   (excluding
   restructuring
   charges)                    (9.6)        (0.3)         NM

  Gross profit rate            16.1%        17.3%       (1.2) pts.
  Expense rates:
    % of revenue               20.2         17.4         2.8
    % of gross profit         125.3        100.2        25.1
  Operating margin             (4.1)         0.0        (4.1)

EMEA PT
  Revenue from services
   (including fee-based
   income)              $      65.9  $      90.1       (26.9)%      (12.7)%
  Fee-based income              8.2         14.6       (44.1)       (31.4)
  Gross profit                 18.2         27.1       (32.9)       (19.5)
  SG&A expenses                20.1         24.7       (18.7)        (2.2)
  Earnings from
   operations                  (1.9)         2.4      (179.0)

  Gross profit rate            27.6%        30.1%       (2.5) pts.
  Expense rates:
    % of revenue               30.5         27.4         3.1
    % of gross profit         110.4         91.2        19.2
  Operating margin             (2.9)         2.7        (5.6)






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


                                        June Year to Date
                        -------------------------------------------------
                                                                 Constant
                                                                 Currency
                            2009         2008       Change       Change
                        -----------  -----------  ----------   ----------
APAC Commercial
  Revenue from services
   (including fee-based
   income)              $     130.7  $     177.6       (26.4)%      (14.1)%
  Fee-based income              4.5          9.5       (52.2)       (46.0)
  Gross profit                 19.2         30.2       (36.8)       (26.2)
  SG&A expenses                21.7         29.7       (27.0)       (15.6)
  Earnings from
   operations                  (2.5)         0.5          NM

  Gross profit rate            14.6%        17.0%       (2.4) pts.
  Expense rates:
    % of revenue               16.6         16.7        (0.1)
    % of gross profit         113.3         98.1        15.2
  Operating margin             (1.9)         0.3        (2.2)

APAC PT
  Revenue from services
   (including fee-based
   income)              $      11.7  $      17.9       (34.5)%      (25.7)%
  Fee-based income              1.8          2.8       (35.7)       (26.5)
  Gross profit                  3.6          5.5       (33.2)       (24.3)
  SG&A expenses                 4.3          5.8       (26.4)       (14.1)
  Earnings from
   operations                  (0.7)        (0.3)      (77.0)

  Gross profit rate            31.1%        30.5%        0.6 pts.
  Expense rates:
    % of revenue               36.6         32.5         4.1
    % of gross profit         117.5        106.6        10.9
  Operating margin             (5.4)        (2.0)       (3.4)

OCG
  Revenue from services
   (including fee-based
   income)              $      98.8  $     109.0        (9.3)%       (6.9)%
  Fee-based income             12.6         13.2        (4.9)         1.8
  Gross profit                 30.5         35.7       (14.5)       (10.6)
  SG&A expenses                34.9         33.2         4.9         10.3
  Earnings from
   operations                  (4.4)         2.5      (285.1)

  Gross profit rate            30.8%        32.7%       (1.9) pts.
  Expense rates:
    % of revenue               35.3         30.5         4.8
    % of gross profit         114.5         93.3        21.2
  Operating margin             (4.5)         2.2        (6.7)

Corporate Expense       $     (40.0) $     (47.3)       15.4%





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


                                           June 28,  December 28, June 29,
                                             2009       2008       2008
                                           ---------  ---------  ---------
Current Assets
  Cash and equivalents                     $   115.2  $   118.3  $    85.4
  Trade accounts receivable, less
   allowances of $15.4, $17.0 and
   $17.0, respectively                         681.0      815.8      952.5
  Prepaid expenses and other current
   assets                                       57.2       62.0       55.9
  Deferred taxes                                29.7       31.9       28.2
                                           ---------  ---------  ---------
       Total current assets                    883.1    1,028.0    1,122.0

Property and Equipment, Net                    137.7      151.3      172.5

Noncurrent Deferred Taxes                       40.2       40.0       48.0

Goodwill, Net                                   67.3      117.8      145.2

Other Assets                                   125.3      120.2      141.8

                                           ---------  ---------  ---------
Total Assets                               $ 1,253.6  $ 1,457.3  $ 1,629.5
                                           =========  =========  =========

Current Liabilities
  Short-term borrowings                    $       -  $    35.2  $    44.9
  Accounts payable and accrued liabilities     205.2      244.1      209.9
  Accrued payroll and related taxes            217.4      243.2      290.8
  Accrued insurance                             25.2       26.3       23.0
  Income and other taxes                        18.1       51.8       65.1
  Current portion of long-term debt             77.6          -          -
                                           ---------  ---------  ---------
       Total current liabilities               543.5      600.6      633.7

Noncurrent Liabilities
  Long-term debt                                   -       80.0       51.4
  Accrued insurance                             44.6       46.9       58.8
  Accrued retirement benefits                   66.4       61.6       76.2
  Other long-term liabilities                   14.9       15.3       15.4
                                           ---------  ---------  ---------
       Total noncurrent liabilities            125.9      203.8      201.8

Stockholders' Equity
  Common stock                                  40.1       40.1       40.1
  Treasury stock                              (107.8)    (111.2)    (111.4)
  Paid-in capital                               34.7       35.8       33.3
  Earnings invested in the business            594.5      676.0      786.6
  Accumulated other comprehensive income        22.7       12.2       45.4
                                           ---------  ---------  ---------
       Total stockholders' equity              584.2      652.9      794.0
                                           ---------  ---------  ---------

Total Liabilities and Stockholders' Equity $ 1,253.6  $ 1,457.3  $ 1,629.5
                                           =========  =========  =========

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

STATISTICS:
  Working Capital                          $   339.6  $   427.4  $   488.3
  Current Ratio                                  1.6        1.7        1.8
  Debt-to-capital %                             11.7       15.0       10.8%
  Global Days Sales Outstanding                   51         50         51





                  KELLY SERVICES, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
          FOR THE 26 WEEKS ENDED JUNE 28, 2009 AND JUNE 29, 2008
                                (UNAUDITED)
                         (In millions of dollars)




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

Cash flows from operating activities
   Net (loss) earnings                                $   (81.5) $    18.7
   Noncash adjustments:
     Impairment of assets                                  52.6          -
     Depreciation and amortization                         21.0       22.5
     Provision for bad debts                                1.3        2.0
     Stock-based compensation                               2.2        1.6
     Other, net                                            (1.5)       1.8
   Changes in operating assets and liabilities             75.8       (5.3)
                                                      ---------  ---------

        Net cash from operating activities                 69.9       41.3
                                                      ---------  ---------

Cash flows from investing activities
   Capital expenditures                                    (5.0)     (15.6)
   Acquisition of companies, net of cash received          (7.5)     (10.6)
   Other investing activities                              (3.0)      (0.4)
                                                      ---------  ---------

        Net cash from investing activities                (15.5)     (26.6)
                                                      ---------  ---------

Cash flows from financing activities
   Net change in revolving line of credit                 (13.1)      (7.4)
   Repayment of debt                                      (22.9)         -
   Dividend payments                                          -       (9.5)
   Purchase of treasury stock                                 -       (8.0)
   Stock options and other stock sales                        -        0.1
   Other financing activities                             (23.6)      (0.7)
                                                      ---------  ---------

        Net cash from financing activities                (59.6)     (25.5)
                                                      ---------  ---------

Effect of exchange rates on cash and equivalents            2.1        3.4
                                                      ---------  ---------

Net change in cash and equivalents                         (3.1)      (7.4)
Cash and equivalents at beginning of period               118.3       92.8
                                                      ---------  ---------


Cash and equivalents at end of period                 $   115.2  $    85.4
                                                      =========  =========






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


                                 Second Quarter (Commercial, PT and OCG)
                                -----------------------------------------
                                                          % Change
                                                                 Constant
                                   2009       2008       US$     Currency
                                ---------- ---------- --------   --------

Americas
  United States                 $    633.3 $    839.1    (24.5)%    (24.5)%
  Canada                              42.6       63.7    (33.1)     (22.6)
  Mexico                              16.1       19.6    (18.0)       4.9
  Puerto Rico                         14.6       20.6    (29.2)     (29.2)
                                ---------- ----------
Total Americas                       706.6      943.0    (25.1)     (23.9)

EMEA
  France                              62.9       95.4    (34.0)     (24.2)
  United Kingdom                      50.2      109.9    (54.3)     (41.6)
  Switzerland                         32.5       52.3    (37.8)     (33.0)
  Italy                               17.6       37.4    (52.9)     (46.1)
  Germany                             15.5       22.8    (32.2)     (22.2)
  Norway                              15.1       24.3    (37.8)     (20.7)
  Russia                              15.1       22.5    (32.9)      (8.8)
  Portugal                            12.6          -       NM         NM
  Other                               27.1       40.9    (33.9)     (22.1)
                                ---------- ----------
Total EMEA                           248.6      405.5    (38.7)     (27.1)

APAC
  Australia                           22.5       38.1    (40.8)     (26.3)
  Singapore                           15.2       18.7    (18.9)     (12.6)
  Malaysia                            12.0       14.7    (18.6)     (10.1)
  Other                               24.0       32.0    (24.8)     (16.0)
                                ---------- ----------
Total APAC                            73.7      103.5    (28.7)     (18.3)

Total Kelly Services, Inc.      $  1,028.9 $  1,452.0    (29.1)%    (24.4)%
                                ========== ==========




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


                                June Year to Date (Commercial, PT and OCG)
                                -----------------------------------------
                                                          % Change
                                                                 Constant
                                   2009       2008       US$     Currency
                                ---------- ---------- --------   --------

Americas
  United States                 $  1,278.1 $  1,659.8    (23.0)%    (23.0)%
  Canada                              83.5      125.5    (33.5)     (20.4)
  Mexico                              30.8       37.3    (17.4)       7.7
  Puerto Rico                         30.3       39.4    (23.3)     (23.3)
                                ---------- ----------
Total Americas                     1,422.7    1,862.0    (23.6)     (22.2)

EMEA
  France                             124.6      182.0    (31.5)     (21.6)
  United Kingdom                     112.8      214.8    (47.5)     (30.1)
  Switzerland                         61.0       94.5    (35.4)     (30.6)
  Italy                               36.5       72.8    (49.8)     (42.5)
  Germany                             30.9       44.2    (30.1)     (19.8)
  Russia                              29.0       43.2    (32.9)      (7.6)
  Norway                              28.2       44.3    (36.3)     (18.3)
  Portugal                            24.3          -       NM         NM
  Other                               55.3       81.3    (32.1)     (20.1)
                                ---------- ----------
Total EMEA                           502.6      777.1    (35.3)     (22.2)

APAC
  Australia                           42.9       73.8    (41.8)     (24.4)
  Singapore                           30.1       36.5    (17.6)     (11.4)
  Malaysia                            24.1       29.5    (18.3)      (9.0)
  Other                               49.1       61.5    (20.1)      (9.7)
                                ---------- ----------
Total APAC                           146.2      201.3    (27.3)     (15.3)

Total Kelly Services, Inc.      $  2,071.5 $  2,840.4    (27.1)%    (21.7)%
                                ========== ==========




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



                                                  Second Quarter
                                       ------------------------------------
                                             2009               2008
                                       -----------------  -----------------
                                                   Per               Per
                                        Amount    Share    Amount   Share
                                       --------  -------  -------- --------

(Loss) earnings from continuing
 operations                            $  (66.0) $ (1.89) $   10.4 $   0.30

     U.K. restructuring charge, net of
      taxes (Note 1)                        2.4     0.07         -        -

     Asset impairments, net of taxes
      (Note 2)                             49.2     1.41         -

                                       --------           --------
 (Loss) earnings from continuing
  operations excluding restructuring
  and asset impairment charges, net of
  taxes                                $  (14.4) $ (0.41) $   10.4 $   0.30
                                       ========           ========


                                                  Second Quarter
                                       ------------------------------------
                                         2009               2008   % Change
                                       --------           -------- --------

Selling, general and administrative
 expenses                              $  193.6           $  242.4
     U.K. restructuring charge
      (Note 1)                             (2.4)                 -
                                       --------           --------
 Selling, general and administrative
  expenses excluding the U.K.
  restructuring charge                 $  191.2           $  242.4  (21.2%)
                                       ========           ======== ========

(Loss) earnings from operations        $  (74.5)          $   15.0
     U.K. restructuring charge
      (Note 1)                              2.4                  -
     Asset impairments (Note 2)            52.6                  -
                                       --------           --------
 (Loss) earnings from operations
  excluding restructuring and asset
  impairment charges                   $  (19.5)          $   15.0 (229.9%)
                                       ========           ======== ========

EMEA Commercial selling, general
 and administrative expenses           $   39.7           $   59.8
     U.K. restructuring charge
      (Note 1)                             (2.4)                 -
                                       --------           --------
 EMEA Commercial selling, general
  and administrative expenses
  excluding the U.K. restructuring
  charge                               $   37.3           $   59.8  (37.6%)
                                       ========           ======== ========

 EMEA Commercial (loss) earnings
  from operations                      $   (5.3)          $    1.3
     U.K. restructuring charge
      (Note 1)                              2.4                  -
                                       --------           --------
 EMEA Commercial (loss) earnings from
  operations excluding the U.K.
  restructuring charge                 $   (2.9)          $    1.3 (320.1%)
                                       ========           ======== ========





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



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

(Loss) earnings from continuing
 operations                       $    (82.1) $  (2.36) $   18.4  $    0.52

     U.K. restructuring charge,
      net of taxes (Note 1)              7.8      0.22         -          -

     Asset impairments, net of
      taxes (Note 2)                    49.2      1.41         -          -

                                  ----------            --------
 (Loss) earnings from continuing
  operations excluding
  restructuring and asset
  impairment charges, net of tax  $    (25.1) $  (0.72) $   18.4  $    0.52
                                  ==========            ========


                                               June Year to Date
                                  ----------------------------------------
                                     2009                 2008    % Change
                                  ----------            --------  --------

Selling, general and
 administrative expenses          $    399.7            $  479.4
     U.K. restructuring charge
      (Note 1)                          (7.8)                  -
                                  ----------            --------
 Selling, general and
  administrative expenses
  excluding the U.K.
  restructuring charge            $    391.9            $  479.4    (18.3%)
                                  ==========            ========  =========

(Loss) earnings from operations   $   (105.1)           $   27.9
     U.K. restructuring charge
      (Note 1)                           7.8                   -
     Asset impairments (Note 2)         52.6                   -
                                  ----------            --------
 (Loss) earnings from operations
   excluding restructuring and
   asset impairment charges       $    (44.7)           $   27.9   (260.2%)
                                  ==========            ========  =========

EMEA Commercial selling, general
 and administrative expenses      $     86.3            $  117.0
     U.K. restructuring charge
      (Note 1)                          (7.8)                  -
                                  ----------            --------
 EMEA Commercial selling, general
  and administrative expenses
  excluding the U.K.
  restructuring charge            $     78.5            $  117.0    (32.9%)
                                  ==========            ========  =========

 EMEA Commercial (loss) earnings
  from operations                 $    (17.4)           $   (0.3)
     U.K. restructuring charge
      (Note 1)                           7.8                   -
                                  ----------            --------
 EMEA Commercial (loss) earnings
  from operations excluding the
  U.K. restructuring charge       $     (9.6)           $   (0.3)        NM
                                  ==========            ========  =========




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


Management believes that the non-GAAP (Generally Accepted Accounting
Principles) information excluding the U.K. restructuring and asset
impairment charges are useful to understand the Company's fiscal 2009
financial performance and increases comparability. Specifically, Management
believes that excluding this item allows for a more meaningful comparison
of current period operating performance with the operating results of
prior periods.  These non-GAAP measures may have limitations as analytical
tools because they exclude items which can have a material impact on cash
flow and earnings per share.  As a result, Management considers these
measures, along with reported results, when it reviews and evaluates the
Company's financial performance.  Management believes that these measures
provide greater transparency to investors and provide insight into how
Management is evaluating the Company's financial performance. Non-GAAP
measures should not be considered a substitute for, or superior to,
measures of financial performance prepared in accordance with GAAP.


(1) The U.K. restructuring charge is comprised of facility and other exit
costs associated with the disposal or closure of 41 branch locations
related to the restructuring program.

(2) The impairment charges include adjustments to the value of goodwill for
the Company's Americas Commercial, APAC Commercial and EMEA PT segments, as
well as long-lived assets and intangibles related to operations in Japan.


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