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    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    
      Gros