GlobeNewswire Inc | Aug 12, 2021 07:30AM EDT

August 12, 2021

Financial Highlights

-- Q2 revenue up 29.0%; 26.2% in constant currency -- Q2 operating earnings of $13.7 million; up 24.1% from a year ago -- Q2 earnings per share of $0.60 down from $1.04 a year ago; adjusted EPS of $0.49 compared to $0.51

TROY, Mich., Aug. 12, 2021 (GLOBE NEWSWIRE) -- Kelly (Nasdaq: KELYA) (Nasdaq: KELYB), a leading specialty talent solutions provider, today announced results for the second quarter of 2021.

Peter Quigley, president and chief executive officer, announced revenue for the second quarter of 2021 totaled $1.3 billion, a 29.0% increase compared to the corresponding quarter of 2020. Revenue improved year-over-year in the quarter reflecting increased customer demand compared to the COVID-19-impacted prior year period.

Earnings from operations in the second quarter of 2021 totaled $13.7 million, compared to earnings of $11.1 million reported in the second quarter of 2020.

Diluted earnings per share in the second quarter of 2021 were $0.60 compared to $1.04 per share in the second quarter of 2020. Included in the earnings per share is a non-cash gain per share, net of tax, on Kellys investment in Persol Holdings common stock of $0.11 in the second quarter of 2021 and $0.52 in the second quarter of 2020. On an adjusted basis, earnings per share were $0.49 in the second quarter of 2021 compared to $0.51 in the corresponding quarter of 2020.

All five of our operating segmentsProfessional & Industrial (P&I); Science, Engineering & Technology (SET); Education; OCG; and Internationaldelivered organic year-over-year revenue growth in the second quarter as the recovery gained momentum, said Quigley. OCG continues to exceed pre-COVID growth rates; Education exited the quarter on track with 2019 revenue; our International and SET segments delivered solid specialty growth; and our Softworld acquisition is already delivering top- and bottom-line results for the enterprise. Demand is strong in our P&I segment, though it will take longer to fully recover. Were encouraged by the healthy sales pipelines and new wins we're seeing across all of our businesses. Our reinstatement of a dividend for the quarter reflects the progress we're making with our specialization and M&A strategies, and our confidence in the economic recovery. Kelly is well-positioned for the future and ready for whats next.

Kelly also reported that on August 11, its board of directors declared a dividend of $0.05 per share. The dividend is payable on September 7, 2021 to stockholders of record as of the close of business on August 25, 2021.

In conjunction with its second quarter earnings release, Kelly has published a financial presentation on the Investor Relations page of its public website and will host a conference call at 9 a.m. ET on August 12 to review the results and answer questions. The call may be accessed in one of the following ways:

Via the Internet:Kellyservices.com

Via the Telephone (877) 692-8955 (toll free) or (234) 720-6979 (caller paid)Enter access code 5728672After the prompt, please enter #

A recording of the conference call will be available after 2:30 p.m. ET on August 12, 2021, at (866) 207-1041 (toll-free) and (402) 970-0847 (caller-paid). The access code is 8454029#. The recording will also be available at kellyservices.com during this period.

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, changing market and economic conditions, the recent novel coronavirus (COVID-19) outbreak, competitive market pressures including pricing and technology introductions and disruptions, disruption in the labor market and weakened demand for human capital resulting from technological advances, competition law risks, the impact of changes in laws and regulations (including federal, state and international tax laws), unexpected changes in claim trends on workers compensation, unemployment, disability and medical benefit plans, or the risk of additional tax liabilities in excess of our estimates, our ability to achieve our business strategy, our ability to successfully develop new service offerings, material changes in demand from or loss of large corporate customers as well as changes in their buying practices, risks particular to doing business with government or government contractors, the risk of damage to our brand, our exposure to risks associated with services outside traditional staffing, including business process outsourcing, services of licensed professionals and services connecting talent to independent work, our increasing dependency on third parties for the execution of critical functions, our ability to effectively implement and manage our information technology strategy, the risks associated with past and future acquisitions, including risk of related impairment of goodwill and intangible assets, exposure to risks associated with investments in equity affiliates including PersolKelly Pte. Ltd., risks associated with conducting business in foreign countries, including foreign currency fluctuations, the exposure to potential market and currency exchange risks relating to our investment in Persol Holdings, risks associated with violations of anti-corruption, trade protection and other laws and regulations, availability of qualified full-time employees, availability of temporary workers with appropriate skills required by customers, liabilities for employment-related claims and losses, including class action lawsuits and collective actions, our ability to sustain critical business applications through our key data centers, risks arising from failure to preserve the privacy of information entrusted to us or to meet our obligations under global privacy laws, the risk of cyberattacks or other breaches of network or information technology security, our ability to realize value from our tax credit and net operating loss carryforwards, 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 Companys filings with the Securities and Exchange Commission. Actual results may differ materially from any forward-looking statements contained herein, and we undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Companys expectations.

About Kelly

Kelly Services, Inc. (Nasdaq: KELYA, KELYB) connects talented people to companies in need of their skills in areas including Science, Engineering, Education, Office, Contact Center, Light Industrial, and more. Were always thinking about whats next in the evolving world of work, and we help people ditch the script on old ways of thinking and embrace the value of all workstyles in the workplace. We directly employ nearly 370,000 people around the world, and we connect thousands more with work through our global network of talent suppliers and partners in our outsourcing and consulting practice. Revenue in 2020 was $4.5 billion. Visit kellyservices.com and let us help with whats next for you.

MEDIA CONTACT: ANALYST CONTACT:Jane Stehney James Polehna(248) 765-6864 (248) 244-4586stehnja@kellyservices.com james.polehna@kellyservices.com

KELLY SERVICES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF EARNINGSFOR THE 13 WEEKS ENDED JULY 4, 2021 AND JUNE 28, 2020(UNAUDITED)(In millions of dollars except per share data) % CC % 2021 2020 Change Change Change Revenue from $ 1,258.1 $ 975.3 $ 282.8 29.0 % 26.2 %services Cost of 1,027.1 786.1 241.0 30.7 services Gross profit 231.0 189.2 41.8 22.1 19.6 Selling,general and 217.3 178.1 39.2 21.9 19.8 administrativeexpenses Earnings(loss) from 13.7 11.1 2.6 24.1 operations Gain (loss) oninvestment in 6.3 29.6 (23.3 ) (78.8 ) PersolHoldings Other income (0.3 ) 2.6 (2.9 ) (109.0 ) (expense), net Earnings(loss) beforetaxes andequity in net 19.7 43.3 (23.6 ) (54.4 ) earnings(loss) ofaffiliate Income taxexpense (2.6 ) 0.9 (3.5 ) (406.2 ) (benefit) Net earnings(loss) beforeequity in net 22.3 42.4 (20.1 ) (47.2 ) earnings(loss) ofaffiliate Equity in netearnings 1.7 (1.3 ) 3.0 NM (loss) ofaffiliate Net earnings $ 24.0 $ 41.1 $ (17.1 ) (41.6 ) (loss) Basic earnings(loss) per $ 0.60 $ 1.04 $ (0.44 ) (42.3 ) shareDilutedearnings $ 0.60 $ 1.04 $ (0.44 ) (42.3 ) (loss) pershare STATISTICS: Permanentplacementrevenue $ 18.6 $ 7.6 $ 11.0 146.1 % 139.8 %(included inrevenue fromservices) Gross profit 18.4 % 19.4 % (1.0 ) pts. rate Conversion 5.9 % 5.8 % 0.1 pts. rate Adjusted $ 22.2 $ 16.9 $ 5.3 EBITDAAdjusted 1.8 % 1.7 % 0.1 pts. EBITDA margin Effectiveincome tax (13.5 ) % 2.0 % (15.5 ) pts. rate Average numberof shares outstanding(millions):Basic 39.4 39.3 Diluted 39.5 39.4

KELLY SERVICES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF EARNINGSFOR THE 26 WEEKS ENDED JULY 4, 2021 AND JUNE 28, 2020(UNAUDITED)(In millions of dollars except per share data) % CC % 2021 2020 Change Change Change Revenue from $ 2,464.0 $ 2,236.4 $ 227.6 10.2 % 8.3 %services Cost of services 2,019.7 1,823.9 195.8 10.7 Gross profit 444.3 412.5 31.8 7.7 5.9 Selling, generaland administrative 420.0 397.6 22.4 5.6 4.0 expenses Goodwill impairment ? 147.7 (147.7 ) NM charge Gain on sale of ? (32.1 ) 32.1 NM assets Earnings (loss) 24.3 (100.7 ) 125.0 NM from operations Gain (loss) oninvestment in 36.3 (48.2 ) 84.5 NM Persol Holdings Other income (3.7 ) 4.3 (8.0 ) (185.8 ) (expense), net Earnings (loss)before taxes andequity in net 56.9 (144.6 ) 201.5 NM earnings (loss) ofaffiliate Income tax expense 7.9 (35.3 ) 43.2 122.2 (benefit) Net earnings (loss)before equity in 49.0 (109.3 ) 158.3 NM net earnings (loss)of affiliate Equity in netearnings (loss) of 0.6 (2.8 ) 3.4 NM affiliate Net earnings (loss) $ 49.6 $ (112.1 ) $ 161.7 NM Basic earnings $ 1.25 $ (2.86 ) $ 4.11 NM (loss) per shareDiluted earnings $ 1.25 $ (2.86 ) $ 4.11 NM (loss) per share STATISTICS: Permanent placementrevenue (included $ 34.6 $ 19.8 $ 14.8 74.1 % 70.0 %in revenue fromservices) Gross profit rate 18.0 % 18.4 % (0.4 ) pts. Conversion rate 5.5 % (24.4 ) % 29.9 pts. Adjusted EBITDA $ 39.1 $ 35.4 $ 3.7 Adjusted EBITDA 1.6 % 1.6 % ? pts. margin Effective income 13.8 % 24.5 % (10.7 ) pts. tax rate Average number ofshares outstanding (millions):Basic 39.4 39.2 Diluted 39.5 39.2

KELLY SERVICES, INC. AND SUBSIDIARIESRESULTS OF OPERATIONS BY SEGMENT(UNAUDITED)(In millions of dollars) Second Quarter % CC % 2021 2020 Change Change Professional & Industrial Revenue from services $ 466.5 $ 406.4 14.8 % 14.0 %Gross profit 75.2 78.9 (4.7 ) (5.5 ) SG&A expenses excluding 69.0 64.6 6.8 6.2 restructuring chargesRestructuring charges ? ? NM NM Total SG&A expenses 69.0 64.6 6.9 6.2 Earnings (loss) from operations 6.2 14.3 (57.0 ) Earnings (loss) from operations 6.2 14.3 (56.9 ) excluding restructuring charges Gross profit rate 16.1 % 19.4 % (3.3 ) pts. Science, Engineering & TechnologyRevenue from services $ 298.2 $ 247.3 20.6 % 20.1 %Gross profit 66.5 50.6 31.5 31.1 SG&A expenses excluding 46.9 31.3 49.7 49.3 restructuring chargesRestructuring charges ? ? NM NM Total SG&A expenses 46.9 31.3 49.7 49.3 Earnings (loss) from operations 19.6 19.3 1.8 Earnings (loss) from operations 19.6 19.3 1.8 excluding restructuring charges Gross profit rate 22.3 % 20.4 % 1.9 pts. Education Revenue from services $ 105.9 $ 25.1 322.1 % 322.1 %Gross profit 16.8 4.3 291.1 291.1 SG&A expenses excluding 15.3 9.6 60.0 60.0 restructuring chargesRestructuring charges ? (0.1 ) NM NM Total SG&A expenses 15.3 9.5 60.5 60.5 Earnings (loss) from operations 1.5 (5.2 ) NM Earnings (loss) from operations 1.5 (5.3 ) NM excluding restructuring charges Gross profit rate 15.8 % 17.1 % (1.3 ) pts. Outsourcing & Consulting Revenue from services $ 107.3 $ 83.6 28.2 % 26.1 %Gross profit 34.8 29.2 19.3 15.7 SG&A expenses excluding 30.1 25.1 19.8 17.0 restructuring chargesRestructuring charges ? ? NM NM Total SG&A expenses 30.1 25.1 19.7 17.0 Earnings (loss) from operations 4.7 4.1 16.2 Earnings (loss) from operations 4.7 4.1 15.9 excluding restructuring charges Gross profit rate 32.5 % 34.9 % (2.4 ) pts. International Revenue from services $ 280.4 $ 213.0 31.6 % 21.6 %Gross profit 37.7 26.2 43.8 32.9 SG&A expenses excluding 34.6 28.3 22.3 13.3 restructuring chargesRestructuring charges ? ? NM NM Total SG&A expenses 34.6 28.3 22.3 13.3 Earnings (loss) from operations 3.1 (2.1 ) NM Earnings (loss) from operations 3.1 (2.1 ) NM excluding restructuring charges Gross profit rate 13.4 % 12.3 % 1.1 pts.

KELLY SERVICES, INC. AND SUBSIDIARIESRESULTS OF OPERATIONS BY SEGMENT(UNAUDITED)(In millions of dollars) June Year to Date % CC % 2021 2020 Change Change Professional & Industrial Revenue from services $ 934.1 $ 900.2 3.8 % 3.2 %Gross profit 151.1 164.0 (7.9 ) (8.4 ) SG&A expenses excluding 138.4 140.7 (1.7 ) (2.1 ) restructuring chargesRestructuring charges ? 4.4 NM NM Total SG&A expenses 138.4 145.1 (4.6 ) (5.0 ) Earnings (loss) from operations 12.7 18.9 (32.9 ) Earnings (loss) from operations 12.7 23.3 (45.4 ) excluding restructuring charges Gross profit rate 16.2 % 18.2 % (2.0 ) pts. Science, Engineering & Technology Revenue from services $ 552.9 $ 517.5 6.8 % 6.5 %Gross profit 119.7 105.3 13.7 13.4 SG&A expenses excluding 82.6 67.3 22.8 22.5 restructuring chargesRestructuring charges ? 0.5 NM NM Total SG&A expenses 82.6 67.8 21.8 21.5 Earnings (loss) from operations 37.1 37.5 (1.1 ) Earnings (loss) from operations 37.1 38.0 (2.5 ) excluding restructuring charges Gross profit rate 21.6 % 20.3 % 1.3 pts. Education Revenue from services $ 217.5 $ 167.6 29.8 % 29.8 %Gross profit 34.0 24.7 37.6 37.6 SG&A expenses excluding 29.5 25.3 16.8 16.8 restructuring chargesRestructuring charges ? 0.8 NM NM Total SG&A expenses 29.5 26.1 12.9 12.9 Earnings (loss) from operations 4.5 (1.4 ) NM Earnings (loss) from operations 4.5 (0.6 ) NM excluding restructuring charges Gross profit rate 15.6 % 14.7 % 0.9 pts. Outsourcing & Consulting Revenue from services $ 206.6 $ 173.1 19.3 % 17.5 %Gross profit 66.1 58.0 14.1 11.0 Total SG&A expenses 58.5 53.7 8.9 6.6 Earnings (loss) from operations 7.6 4.3 78.9 Gross profit rate 32.0 % 33.5 % (1.5 ) pts. International Revenue from services $ 553.3 $ 478.2 15.7 % 9.0 %Gross profit 73.4 60.5 21.3 13.9 SG&A expenses excluding 67.7 60.4 12.0 5.1 restructuring chargesRestructuring charges ? 1.1 NM NM Total SG&A expenses 67.7 61.5 10.1 3.3 Earnings (loss) from operations 5.7 (1.0 ) NM Earnings (loss) from operations 5.7 0.1 NM excluding restructuring charges Gross profit rate 13.3 % 12.7 % 0.6 pts.

KELLY SERVICES, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(UNAUDITED)(In millions of dollars) July 4, January 3, June 28, 2021 2021 2020Current Assets Cash and equivalents $ 64.4 $ 223.0 $ 216.2 Trade accounts receivable, less allowances of$12.5, $13.3, and $11.2, 1,362.5 1,265.2 1,085.0 respectivelyPrepaid expenses and other current 82.4 61.4 76.0 assetsTotal current assets 1,509.3 1,549.6 1,377.2 Noncurrent Assets Property and equipment, net 37.7 41.0 41.6 Operating lease right-of-use assets 83.2 83.2 85.8 Deferred taxes 302.9 282.0 265.9 Goodwill, net 114.8 3.5 ? Investment in Persol Holdings 187.7 164.2 127.2 Investment in equity affiliate 120.0 118.5 113.6 Other assets 391.3 319.9 307.4 Total noncurrent assets 1,237.6 1,012.3 941.5 Total Assets $ 2,746.9 $ 2,561.9 $ 2,318.7 Current Liabilities Short-term borrowings $ 0.1 $ 0.3 $ 0.3 Accounts payable and accrued 612.6 536.8 463.6 liabilitiesOperating lease liabilities 19.6 19.6 19.5 Accrued payroll and related taxes 337.0 293.0 210.7 Accrued workers' compensation and 22.0 22.7 25.6 other claimsIncome and other taxes 62.6 53.2 71.7 Total current liabilities 1,053.9 925.6 791.4 Noncurrent Liabilities Operating lease liabilities 67.1 67.5 69.9 Accrued payroll and related taxes 58.5 58.5 38.4 Accrued workers' compensation and 40.8 42.2 45.6 other claimsAccrued retirement benefits 214.6 205.8 180.8 Other long-term liabilities 68.2 59.3 47.0 Total noncurrent liabilities 449.2 433.3 381.7 Stockholders' Equity Common stock 40.1 40.1 40.1 Treasury stock (15.3 ) (17.1 ) (17.3 ) Paid-in capital 22.3 21.3 20.5 Earnings invested in the business 1,212.5 1,162.9 1,122.8 Accumulated other comprehensive (15.8 ) (4.2 ) (20.5 ) income (loss)Total stockholders' equity 1,243.8 1,203.0 1,145.6 Total Liabilities and Stockholders' $ 2,746.9 $ 2,561.9 $ 2,318.7 Equity STATISTICS: Working Capital $ 455.4 $ 624.0 $ 585.8 Current Ratio 1.4 1.7 1.7 Debt-to-capital % 0.0 % 0.0 % 0.0 %Global Days Sales Outstanding 60 64 61 Year-to-Date Free Cash Flow $ 42.7 $ 170.5 $ 170.4



KELLY SERVICES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE 26 WEEKS ENDED JULY 4, 2021 AND JUNE 28, 2020(UNAUDITED)(In millions of dollars) 2021 2020Cash flows from operating activities: Net earnings (loss) $ 49.6 $ (112.1 )Adjustments to reconcile net earnings (loss) to net cash from operating activities:Goodwill impairment charge ? 147.7 Deferred income taxes on goodwill impairment charge ? (23.0 )Depreciation and amortization 14.1 12.0 Operating lease asset amortization 10.7 10.5 Provision for credit losses and sales allowances ? 0.1 Stock-based compensation 2.8 2.4 (Gain) loss on investment in Persol Holdings (36.3 ) 48.2 Gain on sale of assets ? (32.1 )Equity in net (earnings) loss of PersolKelly Pte. Ltd. (0.6 ) 2.8 Other, net 2.2 0.8 Changes in operating assets and liabilities, net of 5.1 120.8 acquisitions Net cash from operating activities 47.6 178.1 Cash flows from investing activities: Capital expenditures (4.9 ) (7.7 )Proceeds from company-owned life insurance 10.4 2.3 Proceeds from sale of assets ? 55.5 Acquisition of companies, net of cash received (219.0 ) (36.4 )Proceeds (payments) related to loans with equity affiliate 5.8 ? Proceeds from (investment in) equity securities 5.0 ? Other investing activities 1.0 (0.4 ) Net cash (used in) from investing activities (201.7 ) 13.3 Cash flows from financing activities: Net change in short-term borrowings (0.1 ) (1.4 )Financing lease payments (0.3 ) (0.6 )Payments of tax withholding for stock awards (0.6 ) (1.1 )Dividend payments ? (3.0 )Other financing activities ? (0.1 ) Net cash used in financing activities (1.0 ) (6.2 ) Effect of exchange rates on cash, cash equivalents and (2.3 ) 5.7 restricted cash Net change in cash, cash equivalents and restricted cash (157.4 ) 190.9 Cash, cash equivalents and restricted cash at beginning of 228.1 31.0 period Cash, cash equivalents and restricted cash at end of $ 70.7 $ 221.9 period

KELLY SERVICES, INC. AND SUBSIDIARIESREVENUE FROM SERVICES BY GEOGRAPHY(UNAUDITED)(In millions of dollars) Second Quarter % CC % 2021 2020 Change Change Americas United States $ 894.6 $ 700.1 27.8 % 27.8 %Canada 39.5 25.6 54.4 36.8 Mexico 33.1 22.5 47.2 26.2 Puerto Rico 26.9 20.0 34.3 34.3 Brazil ? 6.1 NM NM Total Americas Region 994.1 774.3 Europe France 57.5 39.9 44.2 31.7 Switzerland 54.0 47.4 13.8 7.5 Portugal 40.6 23.8 70.7 55.9 Russia 33.7 29.3 15.2 17.9 Italy 19.4 13.3 46.1 33.6 United Kingdom 17.7 17.8 (0.6 ) (11.8 ) Germany 8.5 7.1 20.6 10.3 Ireland 6.3 4.1 53.5 40.2 Other 17.0 11.5 47.7 32.9 Total Europe Region 254.7 194.2 31.2 22.3 Total Asia-Pacific Region 9.3 6.8 34.5 20.9 Total Kelly Services, Inc. $ 1,258.1 $ 975.3 29.0 % 26.2 %

KELLY SERVICES, INC. AND SUBSIDIARIESREVENUE FROM SERVICES BY GEOGRAPHY(UNAUDITED)(In millions of dollars) June Year to Date % CC % 2021 2020 Change Change Americas United States $ 1,753.1 $ 1,628.6 7.6 % 7.6 %Canada 73.6 58.4 26.0 15.1 Mexico 67.7 51.2 32.3 25.3 Puerto Rico 51.1 37.7 35.3 35.3 Brazil ? 15.2 NM NM Total Americas Region 1,945.5 1,791.1 8.6 8.1 Europe France 111.8 92.4 21.0 10.7 Switzerland 106.7 91.6 16.4 9.6 Portugal 84.3 67.4 25.1 14.5 Russia 66.3 61.4 8.1 15.9 Italy 37.5 28.0 33.9 22.6 United Kingdom 34.7 40.1 (13.4 ) (21.4 ) Germany 15.6 15.1 3.6 (5.2 ) Ireland 11.4 9.1 25.6 14.9 Other 32.6 26.7 22.1 11.9 Total Europe Region 500.9 431.8 16.0 9.2 Total Asia-Pacific Region 17.6 13.5 29.8 16.9 Total Kelly Services, Inc. $ 2,464.0 $ 2,236.4 10.2 % 8.3 %

KELLY SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP MEASURESSECOND QUARTER(UNAUDITED)(In millions of dollars) 2021 2020SG&A Expenses: As Reported AdjustedProfessional & Industrial $ 69.0 $ 64.6 Science, Engineering & Technology 46.9 31.3 Education 15.3 9.6 Outsourcing & Consulting 30.1 25.1 International 34.6 28.3 Corporate 21.4 19.4 Total Company $ 217.3 $ 178.3

2021 2020Earnings (loss) from Operations: As Reported AdjustedProfessional & Industrial $ 6.2 $ 14.3 Science, Engineering & Technology 19.6 19.3 Education 1.5 (5.3 )Outsourcing & Consulting 4.7 4.1 International 3.1 (2.1 )Corporate (21.4 ) (19.4 )Total Company $ 13.7 $ 10.9

KELLY SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP MEASURESSECOND QUARTER(UNAUDITED)(In millions of dollars) 2020SG&A Expenses: As Reported Restructuring^(4) AdjustedProfessional & Industrial $ 64.6 $ ? $ 64.6 Science, Engineering & Technology 31.3 ? 31.3 Education 9.5 0.1 9.6 Outsourcing & Consulting 25.1 ? 25.1 International 28.3 ? 28.3 Corporate 19.3 0.1 19.4 Total Company $ 178.1 $ 0.2 $ 178.3

2020Earnings (loss) from Operations: As Reported Restructuring^(4) AdjustedProfessional & Industrial $ 14.3 $ ? $ 14.3 Science, Engineering & Technology 19.3 ? 19.3 Education (5.2 ) (0.1 ) (5.3 )Outsourcing & Consulting 4.1 ? 4.1 International (2.1 ) ? (2.1 )Corporate (19.3 ) (0.1 ) (19.4 )Total Company $ 11.1 $ (0.2 ) $ 10.9

KELLY SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP MEASURESJUNE YEAR TO DATE(UNAUDITED)(In millions of dollars) 2021 2020SG&A Expenses: As Reported AdjustedProfessional & Industrial $ 138.4 $ 140.7 Science, Engineering & Technology 82.6 67.3 Education 29.5 25.3 Outsourcing & Consulting 58.5 53.7 International 67.7 60.4 Corporate 43.3 41.7 Total Company $ 420.0 $ 389.1

2021 2020Earnings (loss) from Operations: As Reported AdjustedProfessional & Industrial $ 12.7 $ 23.3 Science, Engineering & Technology 37.1 38.0 Education 4.5 (0.6 )Outsourcing & Consulting 7.6 4.3 International 5.7 0.1 Corporate (43.3 ) (41.7 )Total Company $ 24.3 $ 23.4

KELLY SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP MEASURESJUNE YEAR TO DATE(UNAUDITED)(In millions of dollars) 2020SG&A Expenses: As Reported Restructuring^(4) AdjustedProfessional & Industrial $ 145.1 $ (4.4 ) $ 140.7 Science, Engineering & Technology 67.8 (0.5 ) 67.3 Education 26.1 (0.8 ) 25.3 Outsourcing & Consulting 53.7 ? 53.7 International 61.5 (1.1 ) 60.4 Corporate 43.4 (1.7 ) 41.7 Total Company $ 397.6 $ (8.5 ) $ 389.1

2020 Goodwill Gain onEarnings (loss) As impairment^ sale Restructuring Adjustedfrom Operations: Reported (1) of assets ^(4) ^(3)Professional & $ 18.9 $ ? $ ? $ 4.4 $ 23.3 IndustrialScience,Engineering & 37.5 ? ? 0.5 38.0 TechnologyEducation (1.4 ) ? ? 0.8 (0.6 )Outsourcing & 4.3 ? ? ? 4.3 ConsultingInternational (1.0 ) ? ? 1.1 0.1 Corporate (159.0 ) 147.7 (32.1 ) 1.7 (41.7 )Total Company $ (100.7 ) $ 147.7 $ (32.1 ) $ 8.5 $ 23.4

KELLY SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP MEASURES (continued)(UNAUDITED)(In millions of dollars except per share data) Second Quarter June Year to Date 2021 2020 2021 2020Income tax expense (benefit) $ (2.6 ) $ 0.9 $ 7.9 $ (35.3 )Taxes on goodwill impairment ? ? ? 23.0 charge^(1)Taxes on investment in Persol (1.9 ) (9.0 ) (11.1 ) 14.8 Holdings^(2)Taxes on gain on sale of assets^ ? ? ? (8.1 )(3)Taxes on restructuring charges^ ? ? ? 2.2 (4)Adjusted income tax expense $ (4.5 ) $ (8.1 ) $ (3.2 ) $ (3.4 )(benefit) Second Quarter June Year to Date 2021 2020 2021 2020Net earnings (loss) $ 24.0 $ 41.1 $ 49.6 $ (112.1 )Goodwill impairment charge, net ? ? ? 124.7 of taxes^(1)(Gain) loss on investment in (4.4 ) (20.6 ) (25.2 ) 33.4 Persol Holdings, net of taxes^(2)Gain on sale of assets, net of ? ? ? (24.0 )taxes^(3)Restructuring charges, net of ? (0.2 ) ? 6.3 taxes^(4)Adjusted net earnings $ 19.6 $ 20.3 $ 24.4 $ 28.3 Second Quarter June Year to Date 2021 2020 2021 2020 Per Share Per ShareNet earnings (loss) $ 0.60 $ 1.04 $ 1.25 $ (2.86 )Goodwill impairment charge, net ? ? ? 3.18 of taxes^(1)(Gain) loss on investment in (0.11 ) (0.52 ) (0.63 ) 0.85 Persol Holdings, net of taxes^(2)Gain on sale of assets, net of ? ? ? (0.61 )taxes^(3)Restructuring charges, net of ? ? ? 0.16 taxes^(4)Adjusted net earnings $ 0.49 $ 0.51 $ 0.61 $ 0.72

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.

KELLY SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP MEASURES (continued)(UNAUDITED)(In millions of dollars) Second Quarter June Year to Date 2021 2020 2021 2020Net earnings (loss) $ 24.0 $ 41.1 $ 49.6 $ (112.1 ) Other (income) expense, net 0.3 (2.6 ) 3.7 (4.3 ) Income tax expense (benefit) (2.6 ) 0.9 7.9 (35.3 ) Depreciation and amortization 8.5 6.0 14.8 12.0 EBITDA 30.2 45.4 76.0 (139.7 ) Equity in net (earnings) loss of (1.7 ) 1.3 (0.6 ) 2.8 affiliateGoodwill impairment charge^(1) ? ? ? 147.7 (Gain) loss on investment in (6.3 ) (29.6 ) (36.3 ) 48.2 Persol Holdings^(2)Gain on sale of assets^(3) ? ? ? (32.1 ) Restructuring^(4) ? (0.2 ) ? 8.5 Adjusted EBITDA $ 22.2 $ 16.9 $ 39.1 $ 35.4 Adjusted EBITDA margin 1.8 % 1.7 % 1.6 % 1.6 %

KELLY SERVICES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP MEASURES(UNAUDITED)

Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the 2020 goodwill impairment charge, the 2021 and 2020 gains and losses on the investment in Persol Holdings, the 2020 gain on sale of assets and the 2020 restructuring charges, are useful to understand the Company's fiscal 2021 financial performance and increases comparability. Specifically, Management believes that removing the impact of these items allows for a meaningful comparison of current period operating performance with the operating results of prior periods. Management also believes that such measures are used by those analyzing performance of companies in the staffing industry to compare current performance to prior periods and to assess future performance.

Management uses Adjusted EBITDA (adjusted earnings before interest, taxes, depreciation and amortization) and Adjusted EBITDA Margin (percent of total GAAP revenue) which Management believes is useful to compare operating performance compared to prior periods and uses it in conjunction with GAAP measures to assess performance. Our calculation of Adjusted EBITDA may not be consistent with similarly titled measures of other companies and should be used in conjunction with GAAP measurements.

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) The goodwill impairment charge is the result of an interim impairment test the Company performed during the first quarter of 2020, due to a triggering event caused by a decline in the Company's common stock price.

(2) The gains and losses on the investment in Persol Holdings represent the change in fair value of the investment during the period presented and the related tax expense and benefit.

(3) Gain on sale of assets in 2020 primarily represents the excess of the proceeds over the cost of the headquarters properties sold during the first quarter of 2020.

(4) Restructuring charges in 2020 represent severance costs and lease terminations in preparation for the new operating model adopted in the third quarter of 2020.