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    Kelly Services(R) Reports Earnings and Revenue Gains in First Quarter 2016 and Announces Increased Dividend

    TROY, MI--(Marketwired - May 11, 2016) -

    First Quarter Highlights

    • Earnings from operations $14.7 million, up 22% year-over-year
    • Earnings per share of $0.29 versus $0.10, a 190% increase
    • Total Company revenue up 5% in constant currency
    • GP up 60 basis points to 17.3%

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

    Carl T. Camden, President and Chief Executive Officer, announced revenue for the first quarter of 2016 totaled $1.3 billion, a 2.2% increase (a 4.6% increase on a constant currency basis) compared to the corresponding quarter of 2015.

    Earnings from operations for the first quarter of 2016 totaled $14.7 million, compared to $12.1 million reported for the first quarter of 2015.

    Diluted earnings per share in the first quarter of 2016 were $0.29 compared to $0.10 per share in the first quarter of 2015. Included in diluted earnings per share for the first quarter of 2016 is a $0.07 improvement related to reinstatement of the Work Opportunity Credit. Excluding this item, diluted earnings per share for the first quarter of 2016 were $0.22 per share.

    Commenting on the first quarter, Camden stated, "We are pleased with Kelly's ability to deliver solid increases in revenue, GP, and earnings in the first quarter, as we operated with improved efficiency and a heightened focus on profitability. Our investments in PT and OCG continue to yield results as we expand Kelly's role as a trusted talent advisor to our clients worldwide."

    Kelly also reported that on May 10, its board of directors declared a dividend of $0.075 per share. The dividend is payable June 7 to shareholders of record as of the close of business on May 23, and represents a 50% increase. "We are very pleased that our strong, sustained operating results in 2015 gave us the ability to deliver this increase and to enhance shareholder value," said Camden, "and with 2016 off to a solid start, we move forward with confidence."

    In conjunction with its first 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 May 11 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 FacebookLinkedIn, & Twitter.

    KLYA-FIN

       
       
    KELLY SERVICES, INC. AND SUBSIDIARIES  
    CONSOLIDATED STATEMENTS OF EARNINGS  
    FOR THE 13 WEEKS ENDED APRIL 3, 2016 AND MARCH 29, 2015  
    (UNAUDITED)  
    (In millions of dollars except per share data)  
       
                            %     CC %  
        2016     2015     Change       Change     Change  
                                           
    Revenue from services   $ 1,349.1     $ 1,320.6     $ 28.5       2.2     4.6 %
                                           
    Cost of services     1,116.4       1,100.3       16.1       1.5        
                                           
    Gross profit     232.7       220.3       12.4       5.6     7.7  
                                           
    Selling, general and administrative expenses     218.0       208.2       9.8       4.7     6.7  
                                           
    Earnings from operations     14.7       12.1       2.6       21.5        
                                           
    Other expense, net     0.8       2.5       (1.7 )     (69.4 )      
                                           
    Earnings before taxes     13.9       9.6       4.3       45.3        
                                           
    Income tax expense     2.7       5.9       (3.2 )     (53.8 )      
                                           
    Net earnings   $ 11.2     $ 3.7     $ 7.5       200.9        
                                           
    Basic earnings per share   $ 0.29     $ 0.10     $ 0.19       190.0        
    Diluted earnings per share   $ 0.29     $ 0.10     $ 0.19       190.0        
                                           
                                           
    STATISTICS:                                      
                                           
    Gross profit rate     17.3 %     16.7 %     0.6    pts.            
                                           
    Selling, general and administrative expenses:                                      
      % of revenue     16.2       15.8       0.4                
      % of gross profit     93.7       94.5       (0.8 )              
                                           
    % Return:                                      
    Earnings from operations     1.1       0.9       0.2                
    Earnings before taxes     1.0       0.7       0.3                
    Net earnings     0.8       0.3       0.5                
                                           
    Effective income tax rate     19.4 %     61.1 %     (41.7 )  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     38.9       38.8                        
      Diluted     39.1       38.8                        
       
       
       
    KELLY SERVICES, INC. AND SUBSIDIARIES  
    RESULTS OF OPERATIONS BY SEGMENT  
    (UNAUDITED)  
    (In millions of dollars)  
       
        First Quarter  
           
                    %     CC %  
        2016     2015     Change     Change  
    AMERICAS                            
      Commercial                            
        Revenue from services   $ 648.6     $ 641.4     1.1 %   3.1 %
        Staffing fee-based income included in revenue from services     3.6       3.5     3.1     4.3  
        Gross profit     102.1       97.8     4.4     5.9  
        Gross profit rate     15.7 %     15.3 %   0.4  pts.       
      PT                            
        Revenue from services   $ 237.1     $ 232.8     1.8 %   2.1 %
        Staffing fee-based income included in revenue from services     5.0       3.5     40.8     43.3  
        Gross profit     41.6       38.9     6.9     7.3  
        Gross profit rate     17.6 %     16.7 %   0.9  pts.       
      Total Americas                            
        Revenue from services   $ 885.7     $ 874.2     1.3 %   2.9 %
        Staffing fee-based income included in revenue from services     8.6       7.0     22.1     23.9  
        Gross profit     143.7       136.7     5.1     6.3  
        Total SG&A expenses     116.6       113.5     2.7     3.9  
        Earnings from operations     27.1       23.2     16.8        
                                     
        Gross profit rate     16.2 %     15.6 %   0.6  pts.       
        Expense rates:                            
          % of revenue     13.2       13.0     0.2        
          % of gross profit     81.2       83.0     (1.8 )      
        Return on sales     3.1       2.7     0.4        
                                 
    EMEA                            
      Commercial                            
        Revenue from services   $ 175.5     $ 178.3     (1.6 )%   2.9 %
        Staffing fee-based income included in revenue from services     3.4       3.5     (2.8 )   2.4  
        Gross profit     23.6       24.6     (4.3 )   -  
        Gross profit rate     13.4 %     13.8 %   (0.4 ) pts.       
      PT                            
        Revenue from services   $ 41.6     $ 40.3     3.1 %   7.3 %
        Staffing fee-based income included in revenue from services     2.6       2.6     3.4     9.5  
        Gross profit     8.7       8.7     0.8     5.4  
        Gross profit rate     21.0 %     21.5 %   (0.5 ) pts.       
      Total EMEA                            
        Revenue from services   $ 217.1     $ 218.6     (0.7 )%   3.7 %
        Staffing fee-based income included in revenue from services     6.0       6.1     (0.2 )   5.4  
        Gross profit     32.3       33.3     (3.0 )   1.4  
        Total SG&A expenses     30.3       33.5     (9.4 )   (5.4 )
        Earnings from operations     2.0       (0.2 )   NM        
                                     
        Gross profit rate     14.9 %     15.2 %   (0.3 ) pts.       
        Expense rates:                            
          % of revenue     14.0       15.3     (1.3 )      
          % of gross profit     93.8       100.5     (6.7 )      
        Return on sales
        0.9       (0.1 )   1.0        
       
       
       
    KELLY SERVICES, INC. AND SUBSIDIARIES  
    RESULTS OF OPERATIONS BY SEGMENT  
    (UNAUDITED)  
    (In millions of dollars)  
       
        First Quarter  
                             
                    %     CC %  
        2016     2015     Change     Change  
    APAC                            
      Commercial                            
        Revenue from services   $ 82.8     $ 85.6     (3.3 )%   4.8 %
        Staffing fee-based income included in revenue from services     1.2       1.5     (17.9 )   (11.4 )
        Gross profit     13.0       13.0     0.5     6.3  
        Gross profit rate     15.8 %     15.2 %   0.6  pts.       
      PT                            
        Revenue from services   $ 9.1     $ 10.5     (12.9 )%   (6.1 )%
        Staffing fee-based income included in revenue from services     1.4       1.6     (13.1 )   (5.3 )
        Gross profit     2.5       2.9     (13.4 )   (6.2 )
        Gross profit rate     27.4 %     27.5 %   (0.1 ) pts.      
      Total APAC                            
        Revenue from services   $ 91.9     $ 96.1     (4.4 )%   3.6 %
        Staffing fee-based income included in revenue from services     2.6       3.1     (15.4 )   (8.2 )
        Gross profit     15.5       15.9     (2.0 )   4.0  
        Total SG&A expenses     11.1       12.1     (8.6 )   (1.4 )
        Earnings from operations     4.4       3.8     19.2        
                                     
        Gross profit rate     16.9 %     16.5 %   0.4  pts.       
        Expense rates:                            
          % of revenue     12.1       12.6     (0.5 )      
          % of gross profit     71.3       76.4     (5.1 )      
        Return on sales     4.9       3.9     1.0        
                                 
    OCG                            
        Revenue from services   $ 168.2     $ 149.5     12.5 %   13.4 %
        Gross profit     42.3       35.5     19.1     20.3  
        Total SG&A expenses     36.9       32.7     12.9     14.4  
        Earnings from operations     5.4       2.8     89.6        
                                     
        Gross profit rate     25.1 %     23.8 %   1.3  pts.       
        Expense rates:                            
          % of revenue     21.9       21.9            
          % of gross profit     87.2       92.0     (4.8 )      
        Return on sales     3.2       1.9     1.3        
                                     
                                     
                                     
    KELLY SERVICES, INC. AND SUBSIDIARIES  
    CONSOLIDATED BALANCE SHEETS  
    (UNAUDITED)  
    (In millions of dollars)  
       
        April 3, 2016     Jan.  3, 2016     March 29, 2015  
    Current Assets                        
      Cash and equivalents   $ 46.4     $ 42.2     $ 49.4  
      Trade accounts receivable, less allowances of $11.6, $10.5 and $11.5, respectively     1,168.8       1,139.1       1,099.3  
      Prepaid expenses and other current assets     53.0       45.8       52.0  
      Deferred taxes                 32.4  
    Total current assets     1,268.2       1,227.1       1,233.1  
                             
    Property and Equipment, Net     85.7       88.9       89.8  
                             
    Noncurrent Deferred Taxes     193.6       189.3       147.9  
                             
    Goodwill, Net     90.3       90.3       90.3  
                             
    Other Assets     340.6       344.0       305.2  
                             
    Total Assets   $ 1,978.4     $ 1,939.6     $ 1,866.3  
                             
    Current Liabilities                        
      Short-term borrowings   $ 39.3     $ 55.5     $ 80.6  
      Accounts payable and accrued liabilities     437.4       405.5       344.4  
      Accrued payroll and related taxes     277.6       268.1       292.8  
      Accrued insurance     27.0       26.7       26.7  
      Income and other taxes     57.8       60.0       64.6  
                             
    Total current liabilities     839.1       815.8       809.1  
                             
    Noncurrent Liabilities                        
      Accrued insurance     40.5       40.0       43.5  
      Accrued retirement benefits     145.2       141.0       144.9  
      Other long-term liabilities     42.8       47.4       37.7  
                             
    Total noncurrent liabilities     228.5       228.4       226.1  
                             
    Stockholders' Equity                        
      Common stock     40.1       40.1       40.1  
      Treasury stock     (43.7 )     (44.3 )     (49.7 )
      Paid-in capital     27.4       25.4       25.9  
      Earnings invested in the business     822.8       813.5       769.2  
      Accumulated other comprehensive income     64.2       60.7       45.6  
                             
    Total stockholders' equity     910.8       895.4       831.1  
                             
    Total Liabilities and Stockholders' Equity   $ 1,978.4     $ 1,939.6     $ 1,866.3  
                             
                             
    STATISTICS:                        
      Working Capital   $ 429.1     $ 411.3     $ 424.0  
      Current Ratio     1.5       1.5       1.5  
      Debt-to-capital%     4.1 %     5.8 %     8.8 %
      Global Days Sales Outstanding     55       54       57  
       
       
       
    KELLY SERVICES, INC. AND SUBSIDIARIES  
    CONSOLIDATED STATEMENTS OF CASH FLOWS  
    FOR THE 13 WEEKS ENDED APRIL 3, 2016 AND MARCH 29, 2015  
    (UNAUDITED)  
    (In millions of dollars)  
       
        2016     2015  
    Cash flows from operating activities:                
      Net earnings   $ 11.2     $ 3.7  
      Noncash adjustments:                
        Depreciation and amortization     5.6       5.5  
        Provision for bad debts     1.7       1.2  
        Stock-based compensation     2.7       1.2  
        Other, net     (0.1 )     (0.6 )
      Changes in operating assets and liabilities     (0.9 )     (27.4 )
                     
        Net cash from (used in) operating activities     20.2       (16.4 )
                     
    Cash flows from investing activities:                
      Capital expenditures     (1.5 )     (2.6 )
      Other investing activities     (0.3 )     (0.2 )
                     
        Net cash used in investing activities     (1.8 )     (2.8 )
                     
    Cash flows from financing activities:                
      Net change in short-term borrowings     (16.4 )     (11.0 )
      Dividend payments     (1.9 )     (1.9 )
                     
        Net cash used in financing activities     (18.3 )     (12.9 )
                     
    Effect of exchange rates on cash and equivalents     4.1       (1.6 )
                     
    Net change in cash and equivalents     4.2       (33.7 )
    Cash and equivalents at beginning of period     42.2       83.1  
                     
                     
    Cash and equivalents at end of period   $ 46.4     $ 49.4  
       
       
       
    KELLY SERVICES, INC. AND SUBSIDIARIES  
    REVENUE FROM SERVICES  
    (UNAUDITED)  
    (In millions of dollars)  
       
        First Quarter (Commercial, PT and OCG)  
                         
                %     CC %  
        2016   2015   Change     Change  
                             
    Americas                        
      United States   $ 934.7   $ 883.0   5.9 %   5.9 %
      Canada     34.5     42.7   (19.0 )   (10.6 )
      Mexico     26.6     31.9   (16.8 )   0.4  
      Puerto Rico     22.5     24.8   (9.5 )   (9.5 )
      Brazil     10.0     13.9   (28.2 )   5.4  
    Total Americas     1,028.3     996.3   3.2     4.6  
                             
    EMEA                        
      France     56.5     56.4   0.2     2.6  
      Switzerland     46.6     48.1   (3.1 )   0.9  
      Portugal     33.7     31.3   7.5     10.2  
      United Kingdom     23.6     23.6   (0.1 )   6.0  
      Germany     15.4     13.4   15.1     18.0  
      Russia     14.0     18.2   (23.1 )   (9.1 )
      Italy     13.4     12.5   7.1     9.1  
      Norway     7.6     9.4   (18.8 )   (9.2 )
      Other     13.7     11.0   24.2     27.5  
    Total EMEA     224.5     223.9   0.3     4.7  
                             
    APAC                        
      Singapore     31.8     31.3   1.5     4.7  
      Australia     28.5     30.4   (6.5 )   2.0  
      Malaysia     13.2     15.5   (14.2 )   (1.1 )
      New Zealand     9.7     10.5   (7.9 )   4.5  
      Other     13.1     12.7   3.6     12.8  
    Total APAC     96.3     100.4   (4.1 )   4.0  
                             
    Total Kelly Services, Inc.   $ 1,349.1   $ 1,320.6   2.2   4.6 %


    ANALYST CONTACT:
    James Polehna 
    (248) 244-4586
    james_polehna@kellyservices.com

    MEDIA CONTACT:
    Jane Stehney
    (248) 244-5630
    jane_stehney@kellyservices.com