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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
 
Date of Report (Date of earliest event reported): August 10, 2016
 
 
KELLY SERVICES, INC.
---------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
 
DELAWARE
0-1088
38-1510762
(State or other 
(Commission
(IRS Employer
jurisdiction of 
File Number)
Identification
incorporation) 
 
Number)


                                     
999 WEST BIG BEAVER ROAD, TROY, MICHIGAN 48084
-------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
 
(248) 362-4444
----------------------------------------------------------------------
(Registrant's telephone number, including area code)
 
 
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2. below):
 
[ ] Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)
 
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
     (17 CFR 240.14a-12)
 
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
     the Exchange Act (17 CFR 240.14d-2(b))
 
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under
     the Exchange Act (17 CFR 240.13e-4(c))








1


Item 2.02. Results of Operations and Financial Condition
 
Kelly Services, Inc. (the “Company”) today released financial information containing highlighted financial data for the three and six months ended July 3, 2016. A copy of the press release is attached as exhibit 99.1 herein.
 
Item 9.01. Financial Statements and Exhibits
 
(d) Exhibits
 
99.1    Press Release dated August 10, 2016.       
99.2    Presentation materials for August 10, 2016 conference call.   
















































2



SIGNATURES
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
 
 
 
KELLY SERVICES, INC.
 
August 10, 2016
 
 
 
 
 
 
 
 
 
/s/ Olivier G. Thirot
Olivier G. Thirot

Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
 
 
 
 
August 10, 2016
 
 
 
 
 
 
 
 
 
/s/ Laura S. Lockhart
Laura S. Lockhart 

Vice President, Corporate Controller and
Chief Accounting Officer
(Principal Accounting Officer)
 






















3




EXHIBIT INDEX
  
Exhibit No.
                   Description
 
 
99.1
Press Release dated August 10, 2016
99.2
Presentation materials for August 10, 2016 conference call


4
Exhibit

Exhibit 99.1

    
KELLY SERVICES® REPORTS
SECOND QUARTER 2016 EARNINGS
AND ANNOUNCES QUARTERLY DIVIDEND

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

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

                                



1

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, 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

# # #


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




2

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

 
 
 
 
 
 
 


3

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

 
 
 
 
 
 
 


4

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

 
 
 

5

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

%
 
 


6

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

 
 
 

7

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

%
 
 


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

 

9

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

 
 
 
 
 


10

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

%
 
 
 
 
 
 
 
 
 
 


11

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

%
 
 
 
 
 
 
 
 
 
 


12

 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.
 
 

13

 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.
 
 

14

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.

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Kelly Services, Inc. Second Quarter 2016 August 10, 2016 Exhibit 99.2

 
Safe Harbor Statement 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. 2

 
3 Second Quarter 2016 Highlights (YOY Comparisons) • Total revenue declined 0.7%, or up 0.6% in constant currency • Gross profit up 3.7%, or up 4.8% in constant currency – GP rate up 70 basis points • OCG gross profit up 20% • Earnings from operations of $9.9 million, down 14% YOY – Earnings from operations, excluding restructuring, of $13.3 million, up 16% YOY • Earnings per share of $0.23, up 28% – Earnings per share, excluding restructuring, of $0.29

 
Second Quarter 2016 Financial Summary 4 • Second quarter results reflect softening revenue growth • Continued strong GP rate improvement • Earnings from operations negatively impacted by $3.4 million of restructuring costs • EPS growth due to improvements in both operational performance and effective income tax rate, partially offset by $0.07 per share of restructuring costs ----- (1)Constant Currency represent year-over-year changes resulting from translating 2016 financial data into USD using 2015 exchange rates. Actual Results Change Constant Currency Change(1) Revenue $1.4B (0.7)% 0.6% GP % 16.8% 70 bps Earnings from Operations $9.9M (13.9)% (12.2)% ROS % 0.7% (10) bps EPS $0.23 $0.05

 
Second Quarter 2016 Financial Summary (Excluding Restructuring) 5 ----- (1) Excludes $3.4 million of restructuring costs, $2.5 million net of income tax expense or $0.07 per share, in 2016. (2) Constant Currency represent year-over-year changes resulting from translating 2016 financial data into USD using 2015 exchange rates. • Earnings from operations growth continued despite softening revenue growth as GP rate improvement and expense leverage combined to result in YOY improvement • EPS growth due to improvements in both operational performance and effective income tax rate Adjusted Results(1) Change Constant Currency Change(2) Revenue $1.4B (0.7)% 0.6% GP % 16.8% 70 bps Earnings from Operations(1) $13.3M 15.9% 17.7% ROS %(1) 1.0% 20 bps EPS(1) $0.29 $0.11

 
Second Quarter 2016 Revenue Growth 6 • Overall reported revenue decline of 0.7% as positive trends in OCG and EMEA were offset by softening in Americas Commercial revenue and a 130 basis point impact from foreign exchange • Total revenue grew by 0.6% on a constant currency basis • OCG revenue growth of 5% for the quarter • Americas PT Staffing declined in Centralized Accounts while Branch-Delivered revenue growth continued although at a slower rate than prior quarters • EMEA and APAC constant currency revenue growth continues despite uneven economic conditions 46% 18% 17% 7% 13% Business Mix Americas Commercial Americas PT EMEA APAC OCG -5% 0% 5% 10% Total Americas Commercial Americas PT EMEA APAC OCG YOY Growth Reported Constant Currency

 
Second Quarter 2016 Gross Profit Growth 7 • Americas Commercial and PT staffing, and OCG comprise 80% of total company GP • GP growth in the Americas represents increasing GP rate on declining revenue • OCG GP growth reflects strong GP rate improvement on a single digit revenue increase • EMEA GP reflects revenue growth and perm fee expansion, partially offset by customer mix -5% 0% 5% 10% 15% 20% 25% Total Americas Commercial Americas PT EMEA APAC OCG YOY Growth Reported Constant Currency 43% 18% 15% 6% 19% Business Mix Americas Commercial Americas PT EMEA APAC OCG

 
16.1% 16.8% 15.0% 15.2% 15.4% 15.6% 15.8% 16.0% 16.2% 16.4% 16.6% 16.8% 17.0% Q2 2015 GP Rate EMEA/APAC GP Rate AMER GP Rate OCG GP Rate FX Q2 2016 GP Rate Second Quarter 2016 Gross Profit Rate 8 • Overall GP rate improvement from improving GP rates in both the Americas Staffing and global OCG businesses • Americas GP rate reflects continued management of temporary employee tax and benefit expenses • OCG GP rate improvement due to a favorable customer mix 40 bps 30 bps 10 bps (10) bps

 
Second Quarter 2016 SG&A 9 • OCG expense growth results from increasing salaries and performance-based compensation as well as costs related to additional sales resources • Corporate expenses reflect one-time costs of $1.2 million related to the expansion of the TS Kelly Asia Pacific Joint Venture, unfavorable expenses for certain benefit programs of $2.2 million (including additional expenses related to our Management Retirement Plan and our Long-Term Incentive Plan), as well as $0.8 million in increased costs related to litigation • Restructuring expenses include $1.2 million in EMEA related to structural improvements in Italy and $2.2 million in the Americas related to expense reductions made in response to market conditions $211 $221 $190 $195 $200 $205 $210 $215 $220 $225 Q2 2015 SG&A FX EMEA/APAC OCG Corporate Restructuring Q2 2016 SG&A $(2) $(1) $6 $4 $3 $ in Millions

 
Second Quarter 2016 Conversion Rate 10 ----- (1)Conversion rate represents earnings from operations as a percent of gross profit, or return on gross profit. • Second quarter total company conversion rate reflects the impact of the $3.4 million of restructuring charges, which more than offset the continued progress against our goal to improve conversion rate $ in Millions 2016 2015 Gross Earnings Conversion Gross Earnings Conversion Change Profit from Ops Rate Profit from Ops Rate(1) (bps) Americas 140.2$ 26.3$ 18.8% 138.0$ 25.4$ 18.4% 40 EMEA 35.8 2.6 7.2% 35.9 1.7 4.7% 250 APAC 12.8 1.2 8.8% 13.9 1.6 11.7% (290) OCG 42.8 4.8 11.3% 35.7 3.5 9.8% 150 Total Company 230.5$ 9.9$ 4.3% 222.3$ 11.5$ 5.2% (90)

 
Second Quarter 2016 Conversion Rate (Excluding Restructuring) 11 • Conversion rate improved across most businesses • Second quarter total company conversion rate reflects continued progress against our goal to improve conversion rate on an ongoing basis $ in Millions ----- (1) Excludes $3.4 million of restructuring costs, $1.2 million in EMEA and $2.2 million in Americas. (2) Conversion rate represents earnings from operations as a percent of gross profit, or return on gross profit. 2016 2015 Gross Earnings Conversion Gross Earnings Conversion Change Profit from Ops(1) Rate(2) Profit from Ops Rate(2) (bps) Americas 140.2$ 28.5$ 20.4% 138.0$ 25.4$ 18.4% 200 EMEA 35.8 3.8 10.4% 35.9 1.7 4.7% 570 APAC 12.8 1.2 8.8% 13.9 1.6 11.7% (290) OCG 42.8 4.8 11.3% 35.7 3.5 9.8% 150 Total Company 230.5$ 13.3$ 5.8% 222.3$ 11.5$ 5.2% 60

 
$1,130 $1,135 $1,140 $1,145 $1,150 $1,155 2015 Q2 2015 2016 Q2 Accounts Receivable Second Quarter 2016 Balance Sheet Data 12 • DSO improved three days versus the same period last year • Debt-to-equity ratio at 2.8% continues to improve from the same period a year ago $ in Millions DSO 56 54 53 Debt-to- 9.6% 5.8% 2.8% Equity Ratio $0 $20 $40 $60 $80 $100 2015 Q2 2015 2016 Q2 Debt (and Debt-to-Equity Ratio) ----- (1) Includes $62 million of accounts receivable included in current assets held for sale. (1)

 
2016 Outlook – Third Quarter • Revenue down 3% to 4% YOY in constant currency, 50 basis points of unfavorable foreign exchange impact – Excluding the impact of the APAC JV, revenue is up 1.5% to 2.5% in constant currency • Gross profit rate up 50 to 70 basis points YOY – Includes 20 basis points of favorable impact of the APAC JV • SG&A down 3% to 4% YOY – Excluding the impact of the APAC JV, SG&A is up 1.0% to 1.5% 13

 
2016 Outlook – Full Year • Revenue down 1% to 2% YOY in constant currency, 100 basis points of unfavorable foreign currency impact – Excluding the impact of the APAC JV, revenue is up 1.5% to 2.5% in constant currency • Gross profit rate up 40 to 60 basis points YOY – Includes 10 basis points of favorable impact of the APAC JV • SG&A down 1% to flat YOY – Excluding the impact of the APAC JV, SG&A is up 1.5% to 2.5% • Annual tax rate in low 20% range, including impact of Work Opportunity Credits, but excluding the impact of the capital gain resulting from the APAC JV 14

 
APPENDIX: TS KELLY ASIA PACIFIC JOINT VENTURE 15

 
• Joint Venture capitalizes on the strong reputation of Kelly Services as a leading talent provider in the region and on Temp Holdings’ regional presence – Provides accelerated growth opportunities, larger workforce solutions presence, and enhanced competitive positioning – Expands on 14-year strategic partnership between Kelly and Temp Holdings • TS Kelly Asia Pacific is expected to be one of the largest workforce solutions companies in the Asia Pacific region • Solidifies Kelly’s focus on OCG solutions in the APAC market – Opportunity to accelerate investment in high growth market – Kelly’s outsourcing and consulting group, KellyOCG, is not part of the joint venture and will continue to operate under the complete control of Kelly Highlights – TS Kelly Asia Pacific 16

 
• Expands scope from four geographies to twelve, with headquarters in Singapore • Brings together established businesses with approximately $500 million in revenue and 1,600 employees – TS Kelly North Asia – China, Hong Kong, Taiwan, South Korea – Kelly Services – Singapore, Malaysia, Australia, New Zealand, India, Indonesia, Thailand – Capita – Singapore and Malaysia – First Alliances – Vietnam – Intelligence – Indonesia, Vietnam, Singapore, Malaysia Highlights – TS Kelly Asia Pacific 17

 
• Transaction closed on July 4, 2016 and the JV was formed through asset transfers from Kelly and Temp Holdings and an $36.5 million cash payment to Kelly (subject to a cash true- up calculation) • Temp Holdings owns 51%, Kelly owns 49% • As of our second quarter balance sheet, the assets subsequently transferred to the JV have been accounted for as Held for Sale and are reported as a single line item on our consolidated balance sheet • Beginning in the third quarter, Kelly will account for our 49% interest as an Equity Method Investment – APAC results will no longer be included in the individual lines of Kelly’s consolidated income statement or balance sheet  49% share of income reflected as Income from equity method investments (below earnings from operations), effective on the transaction closing date » Will no longer be included as revenue, cost of service and SG&A expense  Equity method investment asset will be reported as a single line item on the balance sheet TS Kelly Asia Pacific – Transaction Details 18