Kelly Services(R) Reports Second Quarter 2016 Earnings and

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News Desk 2018

Aug 10, 2016 at 8:15 AM

Kelly Services(R) Reports Second Quarter 2016 Earnings and Announces Quarterly Dividend

TROY, MI --(Marketwired - August 10, 2016) -

Second Quarter Highlights

Total Revenue declines 0.7% (up 0.6% in constant currency)
Gross Profit up 3.7% (up 4.8% in constant currency); Gross Profit Rate up 70 basis points
Earnings per share of $0.23 (Adjusted EPS of $0.29) versus $0.18, a 28% increase
TS Kelly Asia Pacific Joint Venture completed, forming one of the region's largest workforce solutions providers

Kelly Services ( NASDAQ : KELYA ) ( NASDAQ : KELYB ), a global leader in providing workforce solutions, today announced results for the second quarter of 2016.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the second quarter of 2016 totaled $1.4 billion, a 0.7% decrease (a 0.6% increase on a constant currency basis) compared to the corresponding quarter of 2015.

Earnings from operations for the second quarter of 2016 totaled $9.9 million, compared to $11.5 million reported for the second quarter of 2015. Included in the results of operations in the second quarter of 2016 are restructuring charges of $3.4 million. Excluding the restructuring charges, earnings from operations were $13.3 million in the second quarter of 2016.

Diluted earnings per share in the second quarter of 2016 were $0.23 compared to $0.18 per share in the second quarter of 2015. Excluding restructuring charges, earnings per share were $0.29 in the second quarter of 2016.

Commenting on the second quarter, Camden stated, "We are pleased with Kelly's ability to deliver strategic growth, improve Gross Profit, and increase shareholder value in the second quarter. The finalization of our Joint Venture in APAC positions us for growth in staffing-related services while enabling us to accelerate investments in OCG, which remains a Kelly-owned entity." Referring to the apparent slow-down in U.S. staffing demand facing the workforce solutions industry in the second quarter, Camden commented, "Kelly responded quickly to flat top-line growth in the Americas by managing Gross Profit, adjusting our operating costs, and delivering solid leverage. We remain committed to increasing shareholder value by efficiently delivering the best workforce solutions for our customers around the world."

Kelly also reported that on August 9, its board of directors declared a dividend of $0.075 per share. The dividend is payable September 2, 2016 to shareholders of record as of the close of business on August 23, 2016.

In conjunction with its second quarter earnings release, Kelly Services has published a financial presentation on the Investor Relations page of our public website and will host a conference call at 9:00 a.m. (ET) on August 10 to review the results and answer questions. The call may be accessed in one of the following ways:

Via the Telephone:

U.S.		1 800 288-9626
International		1 651 291-5254

The pass code is Kelly Services

Via the Internet:

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

This release contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties. These factors include, but are not limited to, competitive market pressures including pricing and technology introductions, changing market and economic conditions, our ability to achieve our business strategy, the risk of damage to our brand, the risk our intellectual assets could be infringed upon or compromised, our ability to successfully develop new service offerings, our exposure to risks associated with services outside traditional staffing, including business process outsourcing, our increasing dependency on third parties for the execution of critical functions, the risks associated with past and future acquisitions, exposure to risks associated with investments in equity affiliates, material changes in demand from or loss of large corporate customers, risks associated with conducting business in foreign countries, including foreign currency fluctuations, availability of full-time employees to lead complex talent supply chain sales and operations, availability of temporary workers with appropriate skills required by customers, liabilities for employment-related claims and losses, including class action lawsuits and collective actions, the risk of cyber attacks or other breaches of network or information technology security as well as risks associated with compliance on data privacy, our ability to sustain critical business applications through our key data centers, our ability to effectively implement and manage our information technology programs, our ability to maintain adequate financial and management processes and controls, impairment charges triggered by adverse industry developments or operational circumstances, unexpected changes in claim trends on workers' compensation, disability and medical benefit plans, the impact of the Patient Protection and Affordable Care Act on our business, the impact of changes in laws and regulations (including federal, state and international tax laws ), the risk of additional tax or unclaimed property liabilities in excess of our estimates, our ability to maintain specified financial covenants in our bank facilities to continue to access credit markets, and other risks, uncertainties and factors discussed in this release and in the Company's filings with the Securities and Exchange Commission. Actual results may differ materially from any forward looking statements contained herein, and we have no intention to update these statements.

About Kelly Services ^®

As a global leader in providing workforce solutions, Kelly Services, Inc. ( NASDAQ : KELYA ) ( NASDAQ : KELYB ) and its subsidiaries, offer a comprehensive array of outsourcing and consulting services as well as world-class staffing on a temporary, temporary-to-hire, and direct-hire basis. In 2016, the Company is commemorating 70 years of industry leadership. Kelly® has a role in managing employment opportunities for more than one million workers around the globe by employing 550,000 of these individuals directly with the remaining workers engaged through its talent supply chain network of supplier partners. Revenue in 2015 was $5.5 billion. Visit kellyservices.com and connect with us on Facebook , LinkedIn , & Twitter .

KLYA-FIN

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED JULY 3, 2016 AND JUNE 28, 2015
(UNAUDITED)
(In millions of dollars except per share data)
										%			CC %
			2016		2015		Change			Change			Change

Revenue from services		$	1,375.5	$	1,385.0	$	(9.5	)		(0.7	)	%	0.6	%

Cost of services			1,145.0		1,162.7		(17.7	)		(1.5	)

Gross profit			230.5		222.3		8.2			3.7			4.8

Selling, general and administrative expenses			220.6		210.8		9.8			4.6			5.7

Earnings from operations			9.9		11.5		(1.6	)		(13.9	)

Other expense, net			0.2		1.0		(0.8	)		(74.8	)

Earnings before taxes			9.7		10.5		(0.8	)		(8.2	)

Income tax expense			0.8		3.7		(2.9	)		(78.5	)

Net earnings		$	8.9	$	6.8	$	2.1			30.2		%

Basic earnings per share		$	0.23	$	0.18	$	0.05			27.8		%
Diluted earnings per share		$	0.23	$	0.18	$	0.05			27.8		%


STATISTICS:

Gross profit rate			16.8	%	16.1	%	0.7		pts.

Selling, general and administrative expenses:
	% of revenue		16.0		15.2		0.8
	% of gross profit		95.7		94.8		0.9

% Return:
	Earnings from operations		0.7		0.8		(0.1	)
	Earnings before taxes		0.7		0.8		(0.1	)
	Net earnings		0.6		0.5		0.1

Effective income tax rate			8.3	%	35.3	%	(27.0	)	pts.

Average number of shares outstanding (millions):
	Basic		38.0		37.7
	Diluted		38.3		37.8

Shares adjusted for nonvested restricted awards (millions):
	Basic		39.0		38.8
	Diluted		39.2		38.8



KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 26 WEEKS ENDED JULY 3, 2016 AND JUNE 28, 2015
(UNAUDITED)
(In millions of dollars except per share data)
										%			CC %
			2016		2015		Change			Change			Change

Revenue from services		$	2,724.6	$	2,705.6	$	19.0			0.7		%	2.5	%

Cost of services			2,261.4		2,263.0		(1.6	)		(0.1	)

Gross profit			463.2		442.6		20.6			4.6			6.2

Selling, general and administrative expenses			438.6		419.0		19.6			4.7			6.2

Earnings from operations			24.6		23.6		1.0			4.2

Other expense, net			1.0		3.5		(2.5	)		(70.9	)

Earnings before taxes			23.6		20.1		3.5			17.2

Income tax expense			3.5		9.6		(6.1	)		(63.4	)

Net earnings		$	20.1	$	10.5	$	9.6			90.5		%

Basic earnings per share		$	0.52	$	0.27	$	0.25			92.6		%
Diluted earnings per share		$	0.51	$	0.27	$	0.24			88.9		%


STATISTICS:

Gross profit rate			17.0	%	16.4	%	0.6		pts.

Selling, general and administrative expenses:
	% of revenue		16.1		15.5		0.6
	% of gross profit		94.7		94.7		-

% Return:
	Earnings from operations		0.9		0.9		-
	Earnings before taxes		0.9		0.7		0.2
	Net earnings		0.7		0.4		0.3

Effective income tax rate			14.9	%	47.6	%	(32.7	)	pts.

Average number of shares outstanding (millions):
	Basic		38.0		37.7
	Diluted		38.2		37.8

Shares adjusted for nonvested restricted awards (millions):
	Basic		39.0		38.8
	Diluted		39.2		38.8


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

					Second Quarter
										%			CC %
					2016			2015		Change			Change
AMERICAS
	Commercial
		Revenue from services		$	635.3		$	651.3		(2.5	)	%	(1.3	)	%
		Staffing fee-based income included in revenue from services			3.6			3.5		2.9			3.7
		Gross profit			98.9			95.9		3.2			4.2
		Gross profit rate			15.6	%		14.7	%	0.9		pts.
	PT
		Revenue from services		$	241.6		$	246.2		(1.9	)	%	(1.7	)	%
		Staffing fee-based income included in revenue from services			4.3			4.9		(11.1	)		(10.8	)
		Gross profit			41.3			42.1		(2.0	)		(1.9	)
		Gross profit rate			17.1	%		17.1	%	-		pts.
	Total Americas
		Revenue from services		$	876.9		$	897.5		(2.3	)	%	(1.4	)	%
		Staffing fee-based income included in revenue from services			7.9			8.4		(5.2	)		(4.7	)
		Gross profit			140.2			138.0		1.6			2.3
		SG&A expenses excluding restructuring charges			111.7			112.6		(0.8	)		(0.2	)
		Restructuring charges			2.2			-		NM
		Total SG&A expenses			113.9			112.6		1.2			1.8
		Earnings from operations			26.3			25.4		3.6
		Earnings from operations excluding restructuring charges			28.5			25.4		12.2

		Gross profit rate			16.0	%		15.4	%	0.6		pts.
		Expense rates (excluding restructuring charges):
			% of revenue		12.7			12.5		0.2
			% of gross profit		79.6			81.6		(2.0	)
		Return on sales (excluding restructuring charges)			3.3			2.8		0.5

EMEA
	Commercial
		Revenue from services		$	197.1		$	195.7		0.8		%	3.0		%
		Staffing fee-based income included in revenue from services			3.7			3.2		16.6			21.4
		Gross profit			27.1			26.8		1.5			3.4
		Gross profit rate			13.8	%		13.7	%	0.1		pts.
	PT
		Revenue from services		$	43.1		$	42.9		0.5		%	2.2		%
		Staffing fee-based income included in revenue from services			2.5			2.5		(4.4	)		(1.0	)
		Gross profit			8.7			9.1		(5.5	)		(3.6	)
		Gross profit rate			20.0	%		21.2	%	(1.2	)	pts.
	Total EMEA
		Revenue from services		$	240.2		$	238.6		0.7		%	2.8		%
		Staffing fee-based income included in revenue from services			6.2			5.7		7.4			11.6
		Gross profit			35.8			35.9		(0.3	)		1.6
		SG&A expenses excluding restructuring charges			32.0			34.2		(6.3	)		(3.9	)
		Restructuring charges			1.2			-		NM
		Total SG&A expenses			33.2			34.2		(3.0	)		(0.6	)
		Earnings from operations			2.6			1.7		54.4
		Earnings from operations excluding restructuring charges			3.8			1.7		121.7

		Gross profit rate			14.9	%		15.0	%	(0.1	)	pts.
		Expense rates (excluding restructuring charges):
			% of revenue		13.3			14.3		(1.0	)
			% of gross profit		89.6			95.3		(5.7	)
		Return on sales (excluding restructuring charges)			1.5			0.7		0.8


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

					Second Quarter
										%			CC %
					2016			2015		Change			Change
APAC
	Commercial
		Revenue from services		$	87.9		$	90.3		(2.6	)	%	1.6		%
		Staffing fee-based income included in revenue from services			1.7			1.8		(7.1	)		(3.5	)
		Gross profit			10.3			11.2		(8.6	)		(4.7	)
		Gross profit rate			11.7	%		12.4	%	(0.7	)	pts.
	PT
		Revenue from services		$	9.2		$	10.3		(11.4	)	%	(7.8	)	%
		Staffing fee-based income included in revenue from services			1.4			1.5		(6.1	)		(1.1	)
		Gross profit			2.5			2.7		(7.8	)		(3.6	)
		Gross profit rate			27.4	%		26.4	%	1.0		pts.
	Total APAC
		Revenue from services		$	97.1		$	100.6		(3.5	)	%	0.6		%
		Staffing fee-based income included in revenue from services			3.1			3.3		(6.6	)		(2.4	)
		Gross profit			12.8			13.9		(8.4	)		(4.5	)
		Total SG&A expenses			11.6			12.3		(5.4	)		(1.5	)
		Earnings from operations			1.2			1.6		(31.4	)

		Gross profit rate			13.2	%		13.9	%	(0.7	)	pts.
		Expense rates:
			% of revenue		12.0			12.2		(0.2	)
			% of gross profit		91.2			88.3		2.9
		Return on sales			1.2			1.6		(0.4	)

OCG
		Revenue from services		$	173.9		$	165.0		5.4		%	5.9		%
		Gross profit			42.8			35.7		20.1			20.9
		Total SG&A expenses			38.0			32.2		18.1			19.0
		Earnings from operations			4.8			3.5		38.2

		Gross profit rate			24.6	%		21.6	%	3.0		pts.
		Expense rates:
		% of revenue			21.8			19.5		2.3
		% of gross profit			88.7			90.2		(1.5	)
		Return on sales			2.8			2.1		0.7

Corporate
		Total SG&A expenses		$	25.0		$	20.7		20.5		%


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

					June Year to Date
										%			CC %
					2016			2015		Change			Change
AMERICAS
	Commercial
		Revenue from services		$	1,283.9		$	1,292.7		(0.7	)	%	0.9		%
		Staffing fee-based income included in revenue from services			7.2			7.0		3.0			4.0
		Gross profit			201.0			193.7		3.8			5.1
		Gross profit rate			15.7	%		15.0	%	0.7		pts.
	PT
		Revenue from services		$	478.7		$	479.0		(0.1	)	%	0.1		%
		Staffing fee-based income included in revenue from services			9.3			8.4		10.9			12.1
		Gross profit			82.9			81.0		2.3			2.5
		Gross profit rate			17.3	%		16.9	%	0.4		pts.
	Total Americas
		Revenue from services		$	1,762.6		$	1,771.7		(0.5	)	%	0.7		%
		Staffing fee-based income included in revenue from services			16.5			15.4		7.3			8.4
		Gross profit			283.9			274.7		3.3			4.3
		SG&A expenses excluding restructuring charges			228.3			226.1		1.0			1.9
		Restructuring charges			2.2			-		NM
		Total SG&A expenses			230.5			226.1		1.9			2.9
		Earnings from operations			53.4			48.6		9.9
		Earnings from operations excluding restructuring charges			55.6			48.6		14.4

		Gross profit rate			16.1	%		15.5	%	0.6		pts.
		Expense rates (excluding restructuring charges):
			% of revenue		13.0			12.8		0.2
			% of gross profit		80.4			82.3		(1.9	)
		Return on sales (excluding restructuring charges)			3.2			2.7		0.5

EMEA
	Commercial
		Revenue from services		$	372.6		$	374.0		(0.4	)	%	2.9		%
		Staffing fee-based income included in revenue from services			7.1			6.7		6.5			11.5
		Gross profit			50.7			51.4		(1.3	)		1.7
		Gross profit rate			13.6	%		13.7	%	(0.1	)	pts.
	PT
		Revenue from services		$	84.7		$	83.2		1.8		%	4.7		%
		Staffing fee-based income included in revenue from services			5.1			5.1		(0.5	)		4.3
		Gross profit			17.4			17.8		(2.4	)		0.8
		Gross profit rate			20.5	%		21.4	%	(0.9	)	pts.
	Total EMEA
		Revenue from services		$	457.3		$	457.2		-		%	3.3		%
		Staffing fee-based income included in revenue from services			12.2			11.8		3.5			8.4
		Gross profit			68.1			69.2		(1.6	)		1.5
		SG&A expenses excluding restructuring charges			62.3			67.7		(7.8	)		(4.7	)
		Restructuring charges			1.2			-		NM
		Total SG&A expenses			63.5			67.7		(6.2	)		(3.0	)
		Earnings from operations			4.6			1.5		205.2
		Earnings from operations excluding restructuring charges			5.8			1.5		280.2

		Gross profit rate			14.9	%		15.1	%	(0.2	)	pts.
		Expense rates (excluding restructuring charges):
			% of revenue		13.6			14.8		(1.2	)
			% of gross profit		91.6			97.8		(6.2	)
		Return on sales (excluding restructuring charges)			1.2			0.3		0.9


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

					June Year to Date
										%			CC %
					2016			2015		Change			Change
APAC
		Commercial
		Revenue from services		$	170.7		$	175.9		(2.9	)	%	3.1		%
		Staffing fee-based income included in revenue from services			2.9			3.3		(12.1	)		(7.1	)
		Gross profit			23.3			24.2		(3.7	)		1.2
		Gross profit rate			13.7	%		13.8	%	(0.1	)	pts.
		PT
		Revenue from services		$	18.3		$	20.8		(12.2	)	%	(7.0	)	%
		Staffing fee-based income included in revenue from services			2.8			3.1		(9.7	)		(3.3	)
		Gross profit			5.0			5.6		(10.7	)		(4.9	)
		Gross profit rate			27.4	%		26.9	%	0.5		pts.
	Total APAC
		Revenue from services		$	189.0		$	196.7		(3.9	)	%	2.1		%
		Staffing fee-based income included in revenue from services			5.7			6.4		(10.9	)		(5.2	)
		Gross profit			28.3			29.8		(5.0	)		0.1
		Total SG&A expenses			22.7			24.4		(7.0	)		(1.4	)
		Earnings from operations			5.6			5.4		3.8

		Gross profit rate			15.0	%		15.2	%	(0.2	)	pts.
		Expense rates:
			% of revenue		12.0			12.4		(0.4	)
			% of gross profit		80.3			82.0		(1.7	)
		Return on sales			3.0			2.7		0.3

OCG
		Revenue from services		$	342.1		$	314.5		8.8		%	9.5		%
		Gross profit			85.1			71.2		19.6			20.6
		Total SG&A expenses			74.9			64.9		15.5			16.7
		Earnings from operations			10.2			6.3		61.3

		Gross profit rate			24.9	%		22.6	%	2.3		pts.
		Expense rates:
			% of revenue		21.9			20.6		1.3
			% of gross profit		88.0			91.1		(3.1	)
		Return on sales			3.0			2.0		1.0

Corporate
		Total SG&A expenses		$	49.2		$	38.2		28.8		%


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

			July 3, 2016			Jan. 3, 2016			June 28, 2015
Current Assets
	Cash and equivalents	$	33.3		$	42.2		$	48.7
	Trade accounts receivable, less allowances of
	$11.0, $10.5 and $9.4, respectively		1,079.8			1,139.1			1,152.3
	Prepaid expenses and other current assets		47.8			45.8			50.6
	Deferred taxes		-			-			35.8
	Current assets held for sale		94.0			-			-
	Total current assets		1,254.9			1,227.1			1,287.4

Noncurrent Assets
	Property and equipment, net		81.5			88.9			88.6
	Noncurrent deferred taxes		197.0			189.3			144.6
	Goodwill, net		88.3			90.3			90.3
	Other assets		368.4			344.0			321.7
	Total noncurrent assets		735.2			712.5			645.2

Total Assets		$	1,990.1		$	1,939.6		$	1,932.6

Current Liabilities
	Short-term borrowings	$	26.9		$	55.5		$	89.9
	Accounts payable and accrued liabilities		403.7			405.5			380.4
	Accrued payroll and related taxes		259.2			268.1			296.5
	Accrued insurance		27.1			26.7			27.1
	Income and other taxes		50.9			60.0			62.8
	Current liabilities held for sale		48.0			-			-
	Total current liabilities		815.8			815.8			856.7

Noncurrent Liabilities
	Accrued insurance		41.1			40.0			44.3
	Accrued retirement benefits		148.5			141.0			146.5
	Other long-term liabilities		50.6			47.4			40.6
	Total noncurrent liabilities		240.2			228.4			231.4

Stockholders' Equity
	Common stock		40.1			40.1			40.1
	Treasury stock		(42.1	)		(44.3	)		(49.0	)
	Paid-in capital		28.1			25.4			27.5
	Earnings invested in the business		828.8			813.5			774.1
	Accumulated other comprehensive income		79.2			60.7			51.8
	Total stockholders' equity		934.1			895.4			844.5

Total Liabilities and Stockholders' Equity		$	1,990.1		$	1,939.6		$	1,932.6


STATISTICS:
	Working Capital (including net assets held for sale)	$	439.1		$	411.3		$	430.7
	Current Ratio		1.5			1.5			1.5
	Debt-to-capital %		2.8		%	5.8	%		9.6		%
	Global Days Sales Outstanding		53			54			56


KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 26 WEEKS ENDED JULY 3, 2016 AND JUNE 28, 2015
(UNAUDITED)
(In millions of dollars)

				2016			2015
Cash flows from operating activities:
	Net earnings		$	20.1		$	10.5
	Noncash adjustments:
		Depreciation and amortization		10.9			11.0
		Provision for bad debts		3.5			2.1
		Stock-based compensation		4.5			3.1
		Other, net		(0.7	)		(0.3	)
	Changes in operating assets and liabilities			2.9			(52.9	)

		Net cash from (used in) operating activities		41.2			(26.5	)

Cash flows from investing activities:
	Capital expenditures			(4.3	)		(6.7	)
	Investment in equity affiliate			-			(0.5	)
	Other investing activities			(0.4	)		(0.1	)

		Net cash used in investing activities		(4.7	)		(7.3	)

Cash flows from financing activities:
	Net change in short-term borrowings			(29.1	)		(1.4	)
	Dividend payments			(4.8	)		(3.8	)
	Other financing activities			0.2			-

		Net cash used in financing activities		(33.7	)		(5.2	)

Effect of exchange rates on cash and equivalents				6.4			4.6

Net change in cash and equivalents				9.2			(34.4	)
Less: cash balance included in current assets held for sale				(18.1	)		-
Cash and equivalents at beginning of period				42.2			83.1


Cash and equivalents at end of period			$	33.3		$	48.7


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

			Second Quarter (Commercial, PT and OCG)

						%			CC %
			2016		2015	Change			Change

Americas
	United States	$	930.8	$	923.6	0.8		%	0.8		%
	Canada		35.8		41.6	(14.1	)		(10.6	)
	Mexico		25.4		32.0	(20.2	)		(5.5	)
	Puerto Rico		22.5		26.6	(15.3	)		(15.3	)
	Brazil		10.2		9.9	3.8			20.6
Total Americas			1,024.7		1,033.7	(0.9	)		(0.1	)

EMEA
	France		61.3		60.9	0.7			(1.2	)
	Switzerland		54.6		54.6	(0.1	)		3.0
	Portugal		38.7		33.9	14.5			12.1
	United Kingdom		23.1		27.1	(15.0	)		(9.2	)
	Russia		16.6		22.2	(25.3	)		(6.8	)
	Germany		15.7		14.3	9.2			7.0
	Italy		15.1		13.0	16.0			13.9
	Norway		8.4		10.0	(15.6	)		(10.0	)
	Other		14.8		10.3	44.3			42.2
Total EMEA			248.3		246.3	0.8			2.9

APAC
	Singapore		33.0		33.0	0.2			1.3
	Australia		32.1		32.9	(2.3	)		2.0
	Malaysia		14.5		15.9	(9.6	)		(0.8	)
	New Zealand		9.5		10.3	(7.7	)		(1.9	)
	Other		13.4		12.9	3.7			8.6
Total APAC			102.5		105.0	(2.4	)		1.8

Total Kelly Services, Inc.		$	1,375.5	$	1,385.0	(0.7	)	%	0.6		%


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

			June Year to Date (Commercial, PT and OCG)

						%			CC %
			2016		2015	Change			Change

Americas
	United States	$	1,865.5	$	1,806.6	3.3		%	3.3		%
	Canada		70.3		84.3	(16.6	)		(10.6	)
	Mexico		52.0		63.9	(18.5	)		(2.6	)
	Puerto Rico		45.0		51.4	(12.5	)		(12.5	)
	Brazil		20.2		23.8	(14.9	)		11.7
Total Americas			2,053.0		2,030.0	1.1			2.2

EMEA
	France		117.8		117.3	0.5			0.6
	Switzerland		101.2		102.7	(1.5	)		2.0
	Portugal		72.4		65.2	11.1			11.2
	United Kingdom		46.7		50.7	(8.1	)		(2.1	)
	Germany		31.1		27.7	12.1			12.3
	Russia		30.6		40.4	(24.3	)		(7.8	)
	Italy		28.5		25.5	11.6			11.5
	Norway		16.0		19.4	(17.1	)		(9.6	)
	Other		28.5		21.3	33.9			34.6
Total EMEA			472.8		470.2	0.5			3.8

APAC
	Singapore		64.8		64.3	0.8			2.9
	Australia		60.6		63.3	(4.3	)		2.0
	Malaysia		27.7		31.4	(11.9	)		(0.9	)
	New Zealand		19.2		20.8	(7.8	)		1.3
	Other		26.5		25.6	3.6			10.7
Total APAC			198.8		205.4	(3.2	)		2.9

Total Kelly Services, Inc.		$	2,724.6	$	2,705.6	0.7		%	2.5		%


KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 13 WEEKS ENDED JULY 3, 2016 AND JUNE 28, 2015
(UNAUDITED)
(In millions of dollars except per share data)

			2016							2015
			As Reported		Restructuring Charges (Note 1)			Adjusted Earnings		Reported Earnings	% Change

Revenue from services		$	1,375.5	$	-		$	1,375.5	$	1,385.0	(0.7	)	%

Cost of services			1,145.0		-			1,145.0		1,162.7	(1.5	)

Gross profit			230.5		-			230.5		222.3	3.7

SG&A expenses			220.6		(3.4	)		217.2		210.8	3.0

Earnings from operations			9.9		3.4			13.3		11.5	15.9

Other expense, net			0.2		-			0.2		1.0	(74.8	)

Earnings before taxes			9.7		3.4			13.1		10.5	24.4

Inc. tax expense (benefit)			0.8		0.9			1.7		3.7	(55.5	)

Net earnings		$	8.9	$	2.5		$	11.4	$	6.8	68.1		%

Earnings per share:
	Basic	$	0.23	$	0.07		$	0.29	$	0.18	61.1		%
	Diluted	$	0.23	$	0.07		$	0.29	$	0.18	61.1		%


Note: Earnings per share amounts for each quarter are required to be computed independently and may not equal the amounts computed for the total year.


KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 26 WEEKS ENDED JULY 3, 2016 AND JUNE 28, 2015
(UNAUDITED)
(In millions of dollars except per share data)

			2016							2015
			As Reported		Restructuring Charges (Note 1)			Adjusted Earnings		Reported Earnings	% Change

Revenue from services		$	2,724.6	$	-		$	2,724.6	$	2,705.6	0.7		%

Cost of services			2,261.4		-			2,261.4		2,263.0	(0.1	)

Gross profit			463.2		-			463.2		442.6	4.6

SG&A expenses			438.6		(3.4	)		435.2		419.0	3.8

Earnings from operations			24.6		3.4			28.0		23.6	18.8

Other expense, net			1.0		-			1.0		3.5	(70.9	)

Earnings before taxes			23.6		3.4			27.0		20.1	34.4

Inc. tax expense (benefit)			3.5		0.9			4.4		9.6	(54.5	)

Net earnings		$	20.1	$	2.5		$	22.6	$	10.5	115.0		%

Earnings per share:
	Basic	$	0.52	$	0.07		$	0.58	$	0.27	114.8		%
	Diluted	$	0.51	$	0.07		$	0.58	$	0.27	114.8		%


Note: Earnings per share amounts for each quarter are required to be computed independently and may not equal the amounts computed for the total year.

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

Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the restructuring charges is useful to understand the Company's fiscal 2016 financial performance and increases comparability. Specifically, Management believes that removing the impact of restructuring charges allows for a more meaningful comparison of current period operating performance with the operating results of prior periods. These non-GAAP measures may have limitations as analytical tools because they exclude items which can have a material impact on cash flow and earnings per share. As a result, Management considers these measures, along with reported results, when it reviews and evaluates the Company's financial performance. Management believes that these measures provide greater transparency to investors and provide insight into how Management is evaluating the Company's financial performance. Non-GAAP measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

(1) Restructuring charges in 2016 include costs related to actions during the second quarter in the Americas and EMEA designed to increase operational efficiency and align our staffing operations with opportunities for growth within their markets.

ANALYST CONTACT: James Polehna (248) 244-4586 james_polehna@kellyservices.com MEDIA CONTACT : Jane Stehney (248) 244-5630 jane_stehney@kellyservices.com

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