Press Release Details

TROY, MI (April 24, 2007) -- Kelly Services, Inc., a global provider of staffing services, today announced results for the first quarter ended April 1, 2007.

Carl T. Camden, President and Chief Executive Officer, announced revenue for the first quarter of 2007 totaled $1.351 billion, a 1.1% increase compared to the $1.336 billion for the corresponding quarter in 2006. On a constant currency basis revenue decreased 1.1%.

Net earnings for the first quarter of 2007 totaled $11.9 million, a 39.2% increase compared to $8.6 million reported for the first quarter of 2006. Effective March 31, 2007, the Company sold its Home Care business unit for cash proceeds of $12.5 million and recorded an after tax gain on sale of $6.2 million. During the first quarter the Company also incurred after tax costs of $2.6 million related to the restructuring of its UK operations. Excluding the gain on sale of the Home Care business and the UK restructuring charges, net earnings were $8.4 million, a 2.0% decrease compared to last year.

Diluted earnings per share in the first quarter of 2007 were $0.32, an increase of 33.3% as compared to first quarter 2006 earnings of $0.24 per share. Excluding the $0.17 per share after tax gain on sale of the Home Care business, and the $0.07 per share after tax cost of the UK restructuring, diluted earnings were $0.23 per share, a 4.2% decrease compared to last year.

Commenting on the results, Camden said, "Despite continued slowing in the Americas staffing markets, we're pleased that we delivered solid profitable results. We also accomplished a number of key strategic objectives during the first quarter. We moved aggressively to diversify geographically and move into higher margin fee based businesses.

• We acquired Talents Technology, a permanent placement and executive search firm with operations in the Czech Republic and Poland.
   
• In support of our expansion into the Asia-Pacific markets, we acquired the remaining 51% interest in our Tempstaff - Kelly joint venture. Kelly now owns 100% of this $40 million annual revenue operation in Japan.
   
• We also acquired CGR/seven, a creative services staffing and placement firm with operations in New York. This acquisition adds a new higher margin business to our professional staffing portfolio.

"Although these acquisitions did not have any significant financial impact on the first quarter, they position us well for enhanced growth and profitability going forward.

"Effective with the first quarter, we have realigned our operations into four reporting segments: Americas Commercial, Americas Professional, Technical and Staffing Alternatives (PTSA), International Commercial, and International PTSA. The Americas include our U.S. operations, as well as Canada, Mexico and Puerto Rico, which were previously included in International. In addition, we have allocated corporate expenses that directly support the operating units to the results of the four segments. This change provides greater transparency in our financial reporting and allows more accountability by our segment leadership for total business performance. Reclassified historical financial statements reflecting these changes are available on the Company's investor relations web site.

"Revenue in our Americas Commercial segment, which accounted for 51% of total sales, decreased 4.3% year over year in the first quarter. Operating earnings totaled $21.1 million, essentially flat to last year.

"Revenue in our Americas PTSA segment, which accounted for 19% of total sales, decreased 6.2% year over year in the first quarter. Operating earnings totaled $13.6 million and decreased 6.5% on a year over year basis.

"Revenue in our International Commercial segment, which accounted for 27% of total sales, increased 16.3% year over year in the first quarter. On a constant currency basis revenue increased 7.3%. The reported segment operating loss totaled $4.5 million. Excluding the $2.6 million of UK restructuring charges, the operating loss was $1.9 million, a 20.5% improvement compared to the prior year.

"Revenue in our International PTSA segment, which accounted for 3% of total sales, increased 40.0% year over year in the first quarter. On a constant currency basis revenue increased 29.4%. Operating earnings totaled $248 thousand, a 37.8% increase compared to last year.

"Corporate expenses totaled $19.9 million and decreased 3.9% compared to last year.

"Earnings from operations totaled $10.5 million. Excluding the $2.6 million of UK restructuring charges, earnings from operations totaled $13.1 million and increased 2.6% on a year over year basis.

"The effective tax rate from continuing operations for the first quarter was 52.9%, compared to 36.3% last year. The increase in the effective tax rate is primarily due to the impact of the UK restructuring charges, where the tax benefit is not recognized because of valuation allowances recorded against existing UK tax loss carry forwards.

Mr. Camden added, "We expect second quarter 2007 earnings to be in the range of $0.35 to $0.40 per share, as compared to $0.33 per share from continuing operations in the second quarter of 2006. Not included in this guidance are additional planned restructuring costs of approximately $3 million, or $0.08 per share related primarily to the completion of the branch closings and headquarters consolidation in our UK operation."

Mr. Camden concluded, "For the full year of 2007, we are currently forecasting that earnings will range between $1.65 and $1.80 per share, compared to $1.56 per share from continuing operations in 2006. The range excludes the gain on the sale of the Home Care business and UK restructuring costs. This guidance reflects our view that the U.S. economy will avoid a recession in 2007, and that our Americas staffing segments will resume positive revenue growth in the 3rd quarter of this year. "

In conjunction with its first quarter earnings release, Kelly Services, Inc. will host a conference call at 9:00 a.m. (ET) on April 24, 2007 to review the results and answer questions. The call may be accessed in one of the following ways:

Via the Telephone:

U.S. 1-800-288-8961

International 1-612-332-0632

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 projections contained herein.

Kelly Services, Inc. (NASDAQ: KELYA, KELYB) is a Fortune 500 company headquartered in Troy, Mich., offering staffing solutions that include temporary staffing services, outsourcing, vendor on-site and full-time placement. Kelly operates in 32 countries and territories. Kelly provides employment to more than 750,000 employees annually, with skills including office services, accounting, engineering, information technology, law, science, marketing, creative services, light industrial, education, and health care. Revenue in 2006 was $5.6 billion. Visit www.kellyservices.com.

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

MEDIA CONTACT:
Renee Walker
(248) 244-5362
renee_walker@kellyservices.com