8-K

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): May 12, 2010

KELLY SERVICES, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	0-1088	38-1510762
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

999 WEST BIG BEAVER ROAD, TROY, MICHIGAN	48084
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (248) 362-4444

(Former name or former address, if changed since last report.)

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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 months ended April 4, 2010. 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 May 12, 2010.

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.

Date: May 12, 2010	KELLY SERVICES, INC.
	/s/ Patricia Little
	Patricia Little
	Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date: May 12, 2010	/s/ Michael E. Debs
	Michael E. Debs
	Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release dated May 12, 2010

4

EX-99.1

Exhibit 99.1

KELLY SERVICES REPORTS 1st QUARTER 2010 RESULTS

TROY, MI (May 12, 2010) — Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a leader in providing workforce solutions, today announced results for the first quarter of 2010.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the first quarter of 2010 totaled $1.1 billion, an 8% increase compared to the corresponding quarter in 2009. On a constant currency basis, revenue increased by 4%.

Losses from operations for the first quarter of 2010 totaled $1.6 million, compared to losses from operations of $30.6 million reported for the first quarter of 2009. Included in the results from operations for the first quarter of 2010 are restructuring charges of $4.4 million. The loss from operations in the first quarter of 2009 included restructuring and litigation charges of $8.1 million. Excluding the restructuring and litigation charges, earnings from operations were $2.8 million in the first quarter of 2010 compared to a loss from operations of $22.5 million in 2009.

Diluted losses per share from continuing operations in the first quarter of 2010 were $0.06 compared to first quarter 2009 losses of $0.46 per share. The restructuring and litigation charges totaled $0.10 per share in the first quarter of 2010 and $0.21 per share in the first quarter of 2009.

Commenting on the first quarter results, Camden was optimistic. “After many months, we were pleased to see the economy pick up and note positive trends in our business. Combined with our ongoing focus on cost control, those factors helped us return to profitability in what has typically been a weak quarter for our industry.”

That said, Camden expects 2010 will continue to be a challenging year for Kelly, but also a year of opportunities. “It’s important that we keep a careful eye on managing costs to gain the greatest leverage as this recovery strengthens. At the same time, as the workforce solutions market expands, Kelly is redefining itself in the marketplace. And our new strategic alliance with Temp Holdings enhances our ability to execute our long-term strategy, and grow our business in two critical staffing markets.”

Camden said while the Company will look to maximize profits across all operations, it will concentrate on accelerating growth of higher-margin Professional & Technical disciplines, as well as outsourcing and consulting services. “Our customers’ needs are changing, and Kelly is responding with a broad array of flexible, customized workforce solutions.”

In conjunction with its first quarter earnings release, Kelly Services, Inc. will host a conference call at 8:30 a.m. (ET) on May 12, 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: competition, changing market and economic conditions, currency fluctuations, changes in laws and regulations, including tax laws, and other factors discussed in this release and in the Company’s filings with the Securities and Exchange Commission. Actual results may differ materially from any forward looking statements contained herein.

About Kelly Services

Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB) is a leader in providing workforce solutions. Kelly offers a comprehensive array of outsourcing and consulting services as well as world-class staffing on a temporary, temp-to-hire and direct-hire basis. Serving clients around the globe, Kelly provides employment to 480,000 employees annually. Revenue in 2009 was $4.3 billion. Visit www.kellyservices.com.

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

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KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS

FOR THE 13 WEEKS ENDED APRIL 4, 2010 AND MARCH 29, 2009
(UNAUDITED)
(In millions of dollars except per share data)

	2010			2009			Change			% Change
Revenue from services	$	1,130.4		$	1,042.6		$	87.8			8.4	%
Cost of services		950.4			867.1			83.3			9.6
Gross profit		180.0			175.5			4.5			2.6
Selling, general and administrative expenses		181.6			206.1			(24.5	)		(11.9	)
Loss from operations		(1.6	)		(30.6	)		29.0			94.9
Other (expense) income, net		(1.1	)		1.3			(2.4	)		(184.6	)
Loss from continuing operations before taxes		(2.7	)		(29.3	)		26.6			90.9
Income taxes		(0.7	)		(13.2	)		12.5			94.7
Loss from continuing operations		(2.0	)		(16.1	)		14.1			87.9
Earnings from discontinued operations, net of tax		—			0.6			(0.6	)		(100.0	)
Net loss	$	(2.0	)	$	(15.5	)	$	13.5			87.4	%
Basic loss per share on common stock
Loss from continuing operations	$	(0.06	)	$	(0.46	)	$	0.40			87.0	%
Earnings from discontinued operations		0.00			0.02			(0.02	)		(100.0	)
Net loss		(0.06	)		(0.45	)		0.39			86.7
Diluted loss per share on common stock
Loss from continuing operations	$	(0.06	)	$	(0.46	)	$	0.40			87.0	%
Earnings from discontinued operations		0.00			0.02			(0.02	)		(100.0	)
Net loss		(0.06	)		(0.45	)		0.39			86.7
STATISTICS:
Gross profit rate		15.9	%		16.8	%	(0.9		)pts.
Selling, general and administrative expenses:
% of revenue		16.1			19.8			(3.7	)
% of gross profit		100.9			117.5			(16.6	)
% Return — Loss from operations		(0.1	)		(2.9	)		2.8
Loss from continuing operations before taxes		(0.2	)		(2.8	)		2.6
Loss from continuing operations		(0.2	)		(1.5	)		1.3
Net loss		(0.2	)		(1.5	)		1.3
Effective income tax rate		26.4	%		45.1	%	(18.7		)pts.

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

	First Quarter
										Constant
										Currency
	2010			2009			Change			Change
Americas Commercial
Revenue from services (including fee-based income)	$	547.7		$	482.4			13.5	%		11.5	%
Fee-based income		2.1			1.8			15.6			10.7
Gross profit		78.5			73.1			7.4			5.6
SG&A expenses excluding restructuring charges		65.1			71.8			(9.5	)
Restructuring charges		0.3			0.8			(54.7	)
Total SG&A expenses		65.4			72.6			(10.0	)		(11.5	)
Earnings from operations		13.1			0.5		NM
Earnings from operations excluding restructuring charges		13.4			1.3		NM
Gross profit rate		14.3	%		15.2	%	(0.9		)pts.
Expense rates (excluding restructuring charges):
% of revenue		11.9			14.9			(3.0	)
% of gross profit		82.8			98.2			(15.4	)
Operating margin (excluding restructuring charges)		2.5			0.3			2.2
Americas PT
Revenue from services (including fee-based income)	$	205.6		$	197.4			4.1	%		3.8	%
Fee-based income		2.3			2.8			(18.3	)		(19.0	)
Gross profit		31.5			31.5			0.3			(0.1	)
SG&A expenses excluding restructuring charges		23.0			26.2			(12.1	)
Restructuring charges		—			—			(100.0	)
Total SG&A expenses		23.0			26.2			(12.1	)		(12.4	)
Earnings from operations		8.5			5.3			62.3
Earnings from operations excluding restructuring charges		8.5			5.3			61.9
Gross profit rate		15.3	%		15.9	%	(0.6		)pts.
Expense rates (excluding restructuring charges):
% of revenue		11.2			13.3			(2.1	)
% of gross profit		73.0			83.3			(10.3	)
Operating margin (excluding restructuring charges)		4.1			2.7			1.4
EMEA Commercial
Revenue from services (including fee-based income)	$	204.9		$	216.6			(5.4	)%		(12.4	)%
Fee-based income		4.8			4.7			1.2			(7.6	)
Gross profit		32.8			34.5			(5.1	)		(12.2	)
SG&A expenses excluding restructuring charges		32.4			40.8			(20.8	)
Restructuring charges		2.7			5.8			(53.6	)
Total SG&A expenses		35.1			46.6			(24.8	)		(30.4	)
Earnings from operations		(2.3	)		(12.1	)		81.3
Earnings from operations excluding restructuring charges		0.4			(6.3	)	NM
Gross profit rate		16.0	%		15.9	%	0.1		pts.
Expense rates (excluding restructuring charges):
% of revenue		15.8			18.8			(3.0	)
% of gross profit		98.7			118.3			(19.6	)
Operating margin (excluding restructuring charges)		0.2			(2.9	)		3.1

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

	First Quarter
										Constant
										Currency
	2010			2009			Change			Change
EMEA PT
Revenue from services (including fee-based income)	$	34.9		$	32.8			6.3	%		(0.9	)%
Fee-based income		3.7			4.4			(14.7	)		(22.2	)
Gross profit		9.4			9.4			0.5			(7.0	)
Total SG&A expenses		9.5			10.0			(4.3	)		(11.4	)
Earnings from operations		(0.1	)		(0.6	)		83.3
Gross profit rate		27.1	%		28.6	%	(1.5		)pts.
Expense rates:
% of revenue		27.3			30.4			(3.1	)
% of gross profit		101.0			106.1			(5.1	)
Operating margin		(0.3	)		(1.7	)		1.4
APAC Commercial
Revenue from services (including fee-based income)	$	80.9		$	64.4			25.6	%		6.8	%
Fee-based income		2.8			2.2			25.7			7.9
Gross profit		11.4			9.5			20.4			1.1
SG&A expenses excluding restructuring charges		9.9			10.8			(8.5	)
Restructuring charges		0.5			—		NM
Total SG&A expenses		10.4			10.8			(3.6	)		(19.3	)
Earnings from operations		1.0			(1.3	)	NM
Earnings from operations excluding restructuring charges		1.5			(1.3	)	NM
Gross profit rate		14.1	%		14.7	%	(0.6		)pts.
Expense rates (excluding restructuring charges):
% of revenue		12.2			16.7			(4.5	)
% of gross profit		86.8			114.1			(27.3	)
Operating margin (excluding restructuring charges)		1.9			(2.1	)		4.0
APAC PT
Revenue from services (including fee-based income)	$	7.6		$	6.2			22.7	%		4.9	%
Fee-based income		1.9			1.0			96.4			81.1
Gross profit		2.8			1.9			46.1			29.4
Total SG&A expenses		3.8			2.2			73.2			54.3
Earnings from operations		(1.0	)		(0.3	)		(284.1	)
Gross profit rate		36.7	%		30.8	%	5.9		pts.
Expense rates:
% of revenue		49.1			34.7			14.4
% of gross profit		133.8			112.9			20.9
Operating margin		(12.4	)		(4.0	)		(8.4	)

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

	First Quarter
										Constant
										Currency
	2010			2009			Change			Change
OCG
Revenue from services (including fee-based income)	$	55.3		$	48.7			13.5	%		12.1	%
Fee-based income		6.1			6.6			(7.9	)		(11.4	)
Gross profit		14.0			15.9			(12.3	)		(14.5	)
SG&A expenses excluding restructuring charges		18.4			17.0			8.5
Restructuring charges		0.1			0.1			(36.2	)
Total SG&A expenses		18.5			17.1			8.2			5.3
Earnings from operations		(4.5	)		(1.2	)		(280.6	)
Earnings from operations excluding restructuring charges		(4.4	)		(1.1	)		(314.6	)
Gross profit rate		25.3	%		32.7	%	(7.4		)pts.
Expense rates (excluding restructuring charges):
% of revenue		33.4			34.9			(1.5	)
% of gross profit		132.1			106.8			25.3
Operating margin (excluding restructuring charges)		(8.1	)		(2.2	)		(5.9	)
Corporate Expense
SG&A expenses excluding restructuring charges	$	15.5		$	20.4			(23.8	)%
Restructuring charges		0.8			0.5			56.8
Total SG&A expenses		16.3			20.9			(22.0	)
Asset Impairments	$	—		$	—		NM		%
Consolidated Total (net of intersegment activity)
Revenue from services (including fee-based income)	$	1,130.4		$	1,042.6			8.4	%		4.4	%
Fee-based income		23.7			23.5			0.7			(6.2	)
Gross profit		180.0			175.5			2.6			(1.5	)
SG&A expenses excluding restructuring charges		177.2			198.9			(11.0	)
Restructuring charges		4.4			7.2			(38.6	)
Total SG&A expenses		181.6			206.1			(11.9	)		(15.3	)
Earnings from operations		(1.6	)		(30.6	)		94.9
Earnings from operations excluding restructuring charges		2.8			(23.4	)	NM
Gross profit rate		15.9	%		16.8	%	(0.9		)pts.
Expense rates (excluding restructuring charges):
% of revenue		15.7			19.1			(3.4	)
% of gross profit		98.4			113.4			(15.0	)
Operating margin (excluding restructuring charges)		0.3			(2.2	)		2.5

6

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

	April 4,			January 3,			March 29,
	2010			2010			2009
Current Assets
Cash and equivalents	$	55.7		$	88.9		$	115.4
Trade accounts receivable, less allowances of $14.4, $15.0 and $17.2, respectively		727.3			717.9			706.3
Prepaid expenses and other current assets		79.7			70.6			55.8
Deferred taxes		18.4			21.0			29.2
Total current assets		881.1			898.4			906.7
Property and Equipment, Net		120.0			127.1			143.1
Noncurrent Deferred Taxes		76.9			77.5			39.8
Goodwill, Net		67.3			67.3			117.8
Other Assets		133.6			131.4			107.5
Total Assets	$	1,278.9		$	1,301.7		$	1,314.9
Current Liabilities
Short-term borrowings and current portion of long-term debt	$	68.2		$	79.6		$	16.9
Accounts payable and accrued liabilities		165.8			182.6			220.7
Accrued payroll and related taxes		218.2			208.3			209.5
Accrued insurance		19.2			19.7			25.5
Income and other taxes		46.5			47.4			26.3
Total current liabilities		517.9			537.6			498.9
Noncurrent Liabilities
Long-term debt		56.1			57.5			67.6
Accrued insurance		45.9			47.3			45.4
Accrued retirement benefits		77.7			76.9			59.2
Other long-term liabilities		15.5			16.0			15.2
Total noncurrent liabilities		195.2			197.7			187.4
Stockholders’ Equity
Common stock		40.1			40.1			40.1
Treasury stock		(106.7	)		(107.2	)		(110.5	)
Paid-in capital		37.4			36.9			36.3
Earnings invested in the business		569.5			571.5			660.5
Accumulated other comprehensive income		25.5			25.1			2.2
Total stockholders’ equity		565.8			566.4			628.6
Total Liabilities and Stockholders’ Equity	$	1,278.9		$	1,301.7		$	1,314.9
STATISTICS:
Working Capital	$	363.2		$	360.8		$	407.8
Current Ratio		1.7			1.7			1.8
Debt-to-capital %		18.0	%		19.5	%		11.9	%
Global Days Sales Outstanding		51			51			51

7

KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 13 WEEKS ENDED APRIL 4, 2010 AND MARCH 29, 2009
(UNAUDITED)
(In millions of dollars)

	2010			2009
Cash flows from operating activities
Net loss	$	(2.0	)	$	(15.5	)
Noncash adjustments:
Depreciation and amortization		9.1			10.6
Provision for bad debts		0.1			1.5
Stock-based compensation		1.1			1.3
Other, net		0.2			(1.9	)
Changes in operating assets and liabilities		(27.4	)		29.1
Net cash from operating activities		(18.9	)		25.1
Cash flows from investing activities
Capital expenditures		(1.4	)		(2.0	)
Acquisition of companies, net of cash received		—			(0.2	)
Other investing activities		0.1			—
Net cash from investing activities		(1.3	)		(2.2	)
Cash flows from financing activities
Net change in revolving line of credit		(11.2	)		(1.0	)
Repayment of debt		—			(22.9	)
Net cash from financing activities		(11.2	)		(23.9	)
Effect of exchange rates on cash and equivalents		(1.8	)		(1.9	)
Net change in cash and equivalents		(33.2	)		(2.9	)
Cash and equivalents at beginning of period		88.9			118.3
Cash and equivalents at end of period	$	55.7		$	115.4

8

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

	First Quarter (Commercial, PT and OCG)
					% Change
								Constant
	2010		2009		US$			Currency
Americas
United States	$	710.2	$	644.8		10.1	%		10.1	%
Canada		51.6		40.9		26.1			5.5
Mexico		19.0		14.7		28.9			14.3
Puerto Rico		14.7		15.7		(5.9	)		(5.9	)
Total Americas		795.5		716.1		11.1			9.6
EMEA
France		67.3		61.7		9.1			3.4
United Kingdom		37.6		62.6		(39.8	)		(44.5	)
Switzerland		31.4		28.5		10.0			1.7
Russia		23.3		13.9		67.7			47.9
Portugal		18.4		11.7		57.6			49.5
Italy		16.7		18.9		(11.7	)		(16.2	)
Germany		16.3		15.4		5.6			0.2
Norway		13.9		13.1		6.3			(9.4	)
Other		19.2		28.2		(32.0	)		(37.2	)
Total EMEA		244.1		254.0		(3.9	)		(10.9	)
APAC
Australia		27.6		20.4		35.6			(0.2	)
Singapore		18.9		14.9		26.4			17.4
Malaysia		14.6		12.1		20.4			11.7
India		13.7		7.0		96.7			81.6
Other		16.0		18.1		(11.5	)		(27.2	)
Total APAC		90.8		72.5		25.3			6.5
Total Kelly Services, Inc.	$	1,130.4	$	1,042.6		8.4	%		4.4	%

9

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

	First Quarter
	2010			2009
Pretax loss from operations	$	(1.6	)	$	(30.6	)
Restructuring charges (Note 1)		4.4			7.2
Litigation charges		—			0.9
Earnings (loss) from operations excluding restructuring and litigation charges	$	2.8		$	(22.5	)

	First Quarter
	2010						2009
	Amount			Per Share			Amount			Per Share
Loss from continuing operations, net of taxes	$	(2.0	)	$	(0.06	)	$	(16.1	)	$	(0.46	)
Restructuring charges, net of taxes (Note 1)		3.6			0.10			6.4			0.19
Litigation charges, net of taxes		—			—			0.6			0.02
Earnings (loss) from continuing operations excluding restructuring and litigation charges, net of taxes	$	1.6		$	0.05		$	(9.1	)	$	(0.26	)

10

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 and litigation charges is useful to understand the Company’s first quarter financial performance and increases comparability. Specifically, Management believes that excluding these items 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 represent global costs incurred in connection with the reduction in the number of permanent employees and the consolidation, sale or closure of branch locations. These costs include severance, lease terminations, asset write-offs and other miscellaneous costs.

11