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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
__x__ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED) For the fiscal year ended December 31, 1995
OR
_____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _____________________ to _____________________
Commission file number 0-1088
_________________KELLY SERVICES, INC._________________
(Exact Name of Registrant as specified in its Charter)
________Delaware________ __________38-1510762________
(State of Incorporation) (IRS Employer Identification
Number)
___999 West Big Beaver Road, Troy, Michigan___ ____48084___
(Address of Principal Executive Office) (Zip Code)
___________________(810) 362-4444___________________
(Registrant's Telephone Number, Including Area Code)
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
Title of each class Name of each exchange on which registered
Class A Common NASDAQ/NMS
Class B Common NASDAQ/NMS
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes __X__ No _____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. _____
The aggregate market value of the Class B common stock, par value $1.00, the
only class of the registrant's securities with voting rights, held by
non-affiliates of the registrant on March 6, 1996, based upon the last price on
that date of $32.00 was $12,163,392, as reported by the Wall
Street Journal.
Registrant had 34,418,204 shares of Class A and 3,598,520 of Class B
common stock, par value $1.00, outstanding as of March 22, 1996.
Documents Incorporated by Reference
The proxy statement of the registrant with respect to the 1996 Annual Meeting
of Stockholders is incorporated by reference in Part III.
Dated: March 27, 1996
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
(a) General Development of Business. Registrant, a successor to the
business established by William R. Kelly in 1946, was incorporated under the
laws of Delaware on August 27, 1952. Throughout its existence, registrant has
been engaged in the temporary help service business. During the last fiscal
year, registrant continued to provide temporary help services and other
staffing and human resources services to a diversified group of customers.
(b) Financial Information about Industry Segments. Registrant operates
in a single industry segment of providing temporary help services. The
financial information concerning registrant is included in Item 8 in Part II of
this filing.
(c) Narrative Description of Business.
(i) Principal Services Rendered. Registrant, and its subsidiaries,
which are service organizations, provide temporary office clerical, marketing,
professional, technical, light industrial, home care services (to those who
need help with their daily living needs and personal care), management services
and other business services to a diversified group of customers through offices
located in major cities of the United States, Canada, United Kingdom, Ireland,
Denmark, France, Luxembourg (acquired subsequent to December 31, 1995), The
Netherlands, Norway, Switzerland, Australia, New Zealand, and Mexico. These
services are generally furnished under the name of Kelly Temporary Services,
with the following specific services provided: office clerical, marketing,
professional, technical, semi-skilled light industrial and management services.
Staff leasing services are provided under the name of Your Staff, a wholly
owned subsidiary of the registrant. Home care services to those who need help
with their daily living needs and personal care are furnished under the name of
Kelly Assisted Living Services, Inc., which is a wholly owned subsidiary of
registrant. Legal staffing services are provided under the name of The Wallace
Law Registry, a wholly owned subsidary of the registrant. Registrant performs
these services through its temporary employees by assigning them to work on the
premises of registrant's customers.
The temporary services furnished by registrant afford economies and
flexibility in meeting uneven or peak work loads caused by such predictable
factors as vacations, inventories, month-end activities, special projects or
new promotions and such non-predictable factors as illnesses or emergencies.
When work peaks occur which cannot be handled by the customer's normal staff,
the customer can temporarily supplement regular personnel by the use of
registrant's services. The cost and inconvenience to the customer of hiring
additional employees, including advertising, interviewing, screening, testing
and training are eliminated. Also, recordkeeping is simplified because the
customer pays an hourly rate, based on hours of service furnished by
registrant.
Registrant serves a wide cross-section of customers from industry,
commerce, the professions, government, and individuals. During recent years
approximately 215,000 customers, including the largest corporations in the
world, use the registrant's services. There have been no significant
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changes in the services rendered or in the markets or methods of distribution
since the beginning of registrant's fiscal year.
Registrant operates through approximately 1,300 domestic and foreign
offices located in all 50 states, the District of Columbia and Puerto Rico; and
Canada, United Kingdom, Ireland, Denmark, France, Luxembourg (acquired
subsequent to December 31, 1995), The Netherlands, Norway, Switzerland,
Australia, New Zealand, and Mexico. Each office provides the services of one
or more of the divisions or subsidiaries. At fiscal year-end 1995 all of the
offices were operated directly by the registrant, as the remaining licensed
branches were converted to direct operated branches in February 1995.
(ii) New Services. There are no new industry segments that the
registrant is planning to enter or new service areas that will require a
material investment of assets.
(iii) Raw Materials. Registrant is involved in a service business and
raw materials are nonexistent in the business.
(iv) Service Marks. Registrant is the owner of several service marks,
which are registered with the United States Patent and Trade Mark Office and in
a number of foreign countries. The most significant marks are "Kelly" and
"Kelly Girl", which have indeterminable duration.
(v) Seasonal Business Implications. Registrant's business is not
seasonal.
(vi) Working Capital. Registrant believes there are no unusual or
special working capital requirements in the temporary help industry.
(vii) Customers. The business of registrant and its subsidiaries is not
dependent upon either a single customer or a limited number of customers.
(viii) Backlog. Backlog of orders is not material to the business of
registrant.
(ix) Government Contracts. Although registrant conducts business under
various government contracts, that portion of registrant's business is not
significant.
(x) Competition. Registrant is one of the largest suppliers of
temporary help services in the United States. Several companies which operate
nationally offer services competitive to those provided by registrant, and a
large number of organizations operating regionally or locally compete in
varying degrees in different localities where registrant operates branch
offices. The most significant competitive factors are price and service to
customers in the form of timely, efficient and reliable temporary help.
(xi) Research Activities. Registrant's expenditure for research and the
number of people involved are not material.
(xii) Environmental Matters. Registrant is involved in a service
business and is not affected by federal, state and local provisions regulating
the discharge of materials into the environment.
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(xiii) Employees. Registrant and subsidiaries employ on a full time basis
approximately 1,000 persons at its headquarters in Troy, Michigan, and
approximately 4,600 persons in branch offices operated directly by registrant.
Registrant employed in the last fiscal year 655,000 men and women for temporary
periods. As the employer, registrant is responsible for and pays Social
Security and Medicare taxes, workers' compensation, federal and state
unemployment compensation taxes, liability insurance and other similar costs,
and is responsible for payroll deductions of Social Security, Medicare and
income taxes. Although the work may be done in the office of the registrant's
customer, registrant remains the employer of its temporary employees with
responsibility for their assignment and reassignment.
(d) Foreign Operations. For information regarding sales, earnings or
loss from operations and identifiable assets by domestic and foreign
operations, reference is made to the information presented in the Summary of
Significant Accounting Policies note to the consolidated financial statements
presented in Item 8 in Part II of this report.
ITEM 2. PROPERTIES.
Registrant owns the premises in Troy, Michigan, from which its
headquarters, subsidiaries and divisional offices are presently operated.
Registrant purchased the original headquarters building in Troy, Michigan, in
1977 and has expanded operations into an adjacent building that was purchased
in 1991. The combined floor space for the headquarters complex approximates
206,000 square feet, plus leased space nearby of 27,000 square feet. The
buildings are in good condition, are considered to be adequate for the uses to
which they are being put and are in regular use. In addition, registrant owns
vacant land in Troy and northern Oakland County, Michigan, for future
expansion. Registrant's branch offices are conducted from premises which are
leased. A majority of the leases are for fixed terms, from one to five years.
Registrant owns virtually all office furniture and equipment used in its
headquarters building and branch offices.
ITEM 3. LEGAL PROCEEDINGS.
In 1992 the Internal Revenue Service (IRS) proposed the imposition of an
accumulated earnings tax totaling $49 million for 1988, 1989 and 1990 in
connection with an audit of the Company's consolidated federal tax liability.
The proposed amount has been subsequently reduced to $6.5 million. The Company
believes there is no factual or legal basis for the imposition of any
accumulated earnings tax and that the Company is fully justified in making
provision to meet the present and future needs of its expanding business
operations. The Company is defending its position through the IRS appeal
process and into the courts if necessary. In the opinion of the Company, the
ultimate resolution of this issue will not materially affect its financial
statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of security holders in the
fourth quarter of 1995.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS.
Kelly Services' stock is traded over-the-counter in the NASDAQ National
Market System (NMS). The high and low selling prices for the Class A common
stock and Class B common stock as quoted by the National Association of
Securities Dealers, Inc. and the dividends paid on the common stock for each
quarterly period in the last two fiscal years are reported below:
Per share amounts (in dollars)
----------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- -------
1995
- ----
Stock Prices
Class A common
High . . . . . . . . $37 $36 3/4 $31 3/4 $28 1/2 $37
Low . . . . . . . . 26 1/2 25 1/4 25 5/8 24 1/2 24 1/2
Class B common
High . . . . . . . . 34 34 31 1/2 29 34
Low . . . . . . . . 27 1/4 30 31 1/2 28 27 1/4
Dividends. . . . . . . . .18 .20 .20 .20 .78
1994
- ----
Stock Prices
Class A common
High . . . . . . . . $31 1/4 $29 $32 $30 1/2 $32
Low . . . . . . . . 23 23 24 25 3/4 23
Class B common
High . . . . . . . . 34 33 1/2 33 1/2 29 1/2 34
Low . . . . . . . . 28 28 29 27 1/4 27 1/4
Dividends. . . . . . . . .16 .18 .18 .18 .70
The number of holders of record of the Class A and Class B common stock, par
value $1.00, of registrant were 1,222 and 274, respectively, as of March 22,
1996.
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ITEM 6. SELECTED FINANCIAL DATA.
The following table summarizes selected financial information of Kelly
Services, Inc. and its subsidiaries for each of the six fiscal years ended
December 31, 1995. This table should be read in conjunction with other
financial information of the registrant including "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and financial
statements included elsewhere herein.
(In millions except (1)
per share amounts) 1995 1994 1993 1992 1991 1990
- ------------------- ---- ---- ---- ---- ---- ----
Sales of services . . . . $2,689.8 $2,362.6 $1,954.5 $1,712.7 $1,424.3 $1,456.3
Earnings before taxes . . 113.3 98.5 70.9 61.0 60.2 113.0
Net earnings. . . . . . . 69.5 61.1 44.6 39.2 38.6 71.2
Per share data:
Earnings . . . . . . . $ 1.83 $ 1.61 $ 1.18 $ 1.04 $ 1.03 $ 1.89
Dividends . . . . . . .
Class A common. . . . .78 .70 .63 .58 .57 .53
Class B common. . . . .78 .70 .63 .58 .57 .53
Working capital . . . . . $ 316.0 $ 315.8 $ 291.2 $ 279.8 $ 287.0 $ 287.2
Total assets. . . . . . . 718.7 642.4 542.1 496.1 479.4 443.8
(1) Fiscal year included 53 weeks.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Results of Operations
1995 versus 1994
Sales reached a record level of $2.69 billion in 1995, an increase of 14%
over 1994. International sales grew most rapidly, accounting for 19% of total
company sales, up from 15% in 1994.
Cost of services, representing payroll and related taxes and benefits for
temporary employees, increased 13%. Increases in pay rates, payroll taxes and
other direct costs accounted for these changes. Overall, the percentage of
gross profit to sales increased to 20.1% in 1995 from 19.6% in 1994.
Selling, general and administrative expenses increased 18% over 1994. As
a percentage of sales, expenses increased to 16.2%, up from 15.7% in 1994.
The increase principally reflects the opening of new offices, the effect of
acquired companies for full years and normal growth.
Earnings from operations in 1995 totaled just over $105 million, a new
record for the Company, and an increase of 15% over 1994. These earnings were
3.9% of sales, the same as in 1994.
-7-
Interest income increased to $8.2 million in 1995 which was 22% higher
than the $6.7 million earned in 1994. The increase resulted from higher rates
of return on investments.
Earnings before income taxes were a record $113.3 million, an increase of
15% over 1994. Pre-tax margins as a percentage of sales were 4.2% in both
years. Income taxes increased 17% over 1994 with an effective tax rate of
38.7% of pre-tax income. The current tax rate rose primarily as a result of
higher state and local taxes and higher foreign tax rates.
Net earnings were $69.5 million in 1995, 14% higher than the 1994 results
of $61.1 million. The rate of return on sales was 2.6% in both 1995 and 1994.
Earnings per share were $1.83, a 14% increase over the $1.61 per share earned
in 1994.
1994 versus 1993
Sales reached a record level of $2.36 billion in 1994, an increase of 21%
over 1993. Increases in domestic sales, acquisitions completed during the
year, and the strengthening of worldwide economies all contributed to this
growth.
Cost of services, representing payroll and related taxes and benefits for
temporary employees, increased 21%. Strong sales volume and increases in pay
rates and payroll taxes accounted for this change. Gross profit, as a percent
of sales, rose from 19.5% in 1993 to 19.6% in 1994. Excluding the effect of
our employee leasing business acquired in 1994, gross profit averaged 20.1%
during 1994.
Selling, general and administrative expenses rose 17% during 1994. This
increase principally reflected costs added by acquired companies, opening of
new offices and normal growth. As a percent of sales, expenses declined from
16.2% to 15.7% in 1994. Excluding the effects of the employee leasing
business (with its inherently lower cost structure), the expense to sales
relationship was 16.1% in 1994. Earnings from operations in 1994 totaled
approximately $92 million, an increase of 44% over 1993.
Interest income for 1994 was $6.7 million, down 3.6% from the 1993 level
of $7.0 million. The reduction in the interest rates accounted for the slight
decline in interest income during the year.
Earnings before taxes were $98.5 million, an increase of 39%. Pretax
margins were 4.2% in 1994, improved from 3.6% in 1993. Income taxes increased
42% over 1993, with an effective tax rate of 38.0%, compared to a 37.1% rate
in 1993. The current year tax rate rose primarily as a result of the
reduction in tax exempt interest income and the absence in 1994 of a credit
from revaluing deferred taxes due to the 1% increase in the U.S. statutory
corporate tax rate in 1993.
Net earnings were $61.1 million in 1994, 37% above the 1993 results of
$44.6 million. The rate of return on sales was 2.6%, up from the 1993 return
of 2.3%. Earnings per share were $1.61 in 1994 and $1.18 in 1993.
-8-
Liquidity and Capital Resources
During 1995, capital expenditures were made primarily for new office
equipment, expansion of the branch office network in the U.S. and Europe,
business acquisitions and new customer services, including the new "PinPoint"
software training product. The foregoing capital expenditures, along with cash
dividends, were financed internally with $29 million from operating activities
and a reduction in short-term investments. In 1994 and 1993, net cash flows
from operating activities of $69 million and $46 million, respectively, were
directed primarily toward purchases of equipment, dividend payments and the
acquisition of businesses.
The Company's working capital remained unchanged from 1994 at $316
million. The current ratio averaged 2.3 in 1995, 2.5 in 1994 and 2.9 in 1993.
The current ratios have declined over this period due principally to the use
of current assets to finance continued business expansion including the
acquistion of businesses and investment in additional computing capability in
branch offices.
Stockholders' equity grew 10% in 1995, following a 12% growth in 1994 and
a 5% increase in 1993. The return on average stockholders' equity was 15.3%
in 1995, 14.9% in 1994 and 11.8% in 1993. Stockholders' equity per share was
$12.52, an increase of 10% over 1994. Dividends paid per share were $.78 in
1995, an increase of 11% over 1994.
The Company's financial position continues to be strong. The Company
believes that this strength, including the absence of any long-term debt, will
allow it to aggressively pursue growth opportunities. Capital requirements
are expected to be financed internally.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements and supplementary data required by this Item are
set in the accompanying index on page 14 of this filing and are presented in
pages 15-26.
ITEM 9. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
None.
PART III
Information required by Part III with respect to Directors and Executive
Officers of the registrant, except as set forth under the title "Executive
Officers of the Registrant" which is included on page 9, (Item 10), Executive
Compensation (Item 11), Security Ownership of Certain Beneficial Owners and
Management (Item 12), and Certain Relationships and Related Transactions (Item
13) is to be included in a definitive proxy statement filed by the registrant
not later than 120 days after the close of its fiscal year and such proxy
statement, when filed, is incorporated herein by reference.
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ITEM 10
EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------
Served as an Business Experience
Name/Office Age Officer Since (2) During Last 5 Years
- ------------------------ ---------------- ----------------- --------------------------------
William R. Kelly 90 1952 Served as officer of registrant.
Chairman of the Board
Terence E. Adderley (1) 62 1961 Served as officer of registrant.
President and Chief
Executive Officer
Christopher A. Arnette 39 1995 Served as officer of registrant
Senior Vice President since January, 1995. Prior
thereto, served as Vice
President and Chief
Information Officer of
Ameritech Advertising Services
since 1992. Prior thereto,
served as Vice President,
Information Systems of Dun &
Bradstreet Corporation.
Robert G. Barranco 55 1989 Served as officer of registrant
Executive Vice President or one of its operating
divisions.
Donald A. Bobo 54 Served as officer of operating
Senior Vice President division since April, 1992.
and General Manager, Prior thereto, served as Vice
Kelly Temporary President of Staff Services at
Services Division John Labatt Foods.
Carl T. Camden 41 1995 Served as officer of registrant
Senior Vice President since April, 1995. From 1993
served as Senior Vice President
at Society Management Company,
the parent of Key Bank and
Society Bank Groups. Prior
thereto, served as Co-President
of Wyse Advertising.
Carolyn R. Fryar 53 Served as officer of operating
Senior Vice President division.
and General Manager,
Kelly Temporary
Services Division
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ITEM 10
EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------
(continued)
Served as an Business Experience
Name/Office Age Officer Since (2) During Last 5 Years
- ------------------------ --------------- ----------------- --------------------------------
Paul K. Geiger 62 1993 Served as officer of registrant
Senior Vice President since April, 1993. Prior
thereto, served as
Vice President and Chief
Financial Officer of the
University of Detroit Mercy.
Eugene L. Hartwig 62 1990 Served as officer of registrant.
Senior Vice President,
General Counsel and
Secretary
Michael J. McGowan 42 Served as officer of operating
Senior Vice President division since January, 1995.
and General Manager, Prior thereto, served in various
Kelly Temporary capacities at The MEDSTAT
Services Division Group since 1992. From 1977 to
1992 served in various
capacities at Automated Data
Processing.
Robert H. McNabb 48 Served as officer of operating
Senior Vice President division since September, 1994.
and General Manager, From 1993, served as President
Kelly Temporary of Performa Solutions, Inc.
Services Division Prior thereto, served in a
variety of executive positions
at Talent Tree Personnel
Services, Inc.
Alfredo Maselli 55 Served as officer of operating
Senior Vice President division since September, 1995.
and General Manager, Prior thereto, served as
International Division Corporate Vice President,
International and in other
capacities at Honeywell,
Inc. since 1969.
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ITEM 10
EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------
(continued)
Served as an Business Experience
Name/Office Age Officer Since (2) During Last 5 Years
- ------------------------ --------------- ----------------- ---------------------------------
Joanne E. Start 51 1989 Served as officer of registrant.
Senior Vice President
Robert E. Thompson 53 1982 Served as officer of registrant.
Executive Vice President
Tommi A. White 45 1993 Served as officer of registrant
Senior Vice President since November, 1993. From
1992, served as Vice President
of Automated Data Processing.
Prior thereto, served as Chief
Information Officer at Skandia
Direct Operations Corporation.
(1) Mr. Adderley is Mr. William R. Kelly's son.
(2) Each officer serves continuously until removed by the Board of Directors.
-12-
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial statements -
Report of Independent Accountants
Balance Sheets at December 31, 1995, January 1, 1995 and
January 2, 1994
Statements of Earnings for the three fiscal years ended
December 31, 1995
Statements of Cash Flows for the three fiscal years ended
December 31, 1995
Statements of Stockholders' Equity for the three fiscal years ended
December 31, 1995
Notes to Financial Statements
2. Financial Statement Schedule -
For the three fiscal years ended December 31, 1995:
II - Valuation Reserves
3. The Exhibits are listed in the Index to Exhibits Required by Item 601
of Regulation S-K at Item (c) below and included at page 27 which is
incorporated herein by reference.
All other schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
No additional financial information has been provided for the registrant as an
individual company since the total amount of net assets of subsidiaries which
are restricted as to transfer to the registrant through intercompany loans,
advances or cash dividends does not exceed 25 percent of total consolidated net
assets at December 31, 1995.
(b) No reports on Form 8-K were filed during the last quarter of the
period covered by this report.
(c) The Index to Exhibits and required Exhibits are included following
the Financial Statement Schedule beginning at page 27 of this
filing.
(d) The Index to Financial Statements and Supplemental Schedule is
included following the signatures beginning at page 14 of this
filing.
-13-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: March 27, 1996 KELLY SERVICES, INC.
Registrant
By /s/ P. K. Geiger
---------------------------------------
P. K. Geiger
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: March 27, 1996 * W. R. Kelly
--------------------------------------
W. R. Kelly
Chairman of the Board
Date: March 27, 1996 * T. E. Adderley
--------------------------------------
T. E. Adderley
President, Chief Executive Officer
and Director
(Principal Executive Officer)
Date: March 27, 1996 * C. V. Fricke
--------------------------------------
C. V. Fricke
Director
Date: March 27, 1996 * H. E. Guenther
--------------------------------------
H. E. Guenther
Director
Date: March 27, 1996 * V. G. Istock
--------------------------------------
V. G. Istock
Director
Date: March 27, 1996 * B. J. White
--------------------------------------
B. J. White
Director
Date: March 27, 1996 /s/ P. K. Geiger
--------------------------------------
P. K. Geiger
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
Date: March 27, 1996 *By /s/ P. K. Geiger
--------------------------------------
P. K. Geiger
Attorney-in-Fact
-14-
INDEX TO FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULE
Kelly Services, Inc. and Subsidiaries
Page Reference
in Report on
Form 10-K
--------------
Report of Independent Accountants 15
Balance Sheets at December 31, 1995, January 1, 1995
and January 2, 1994 16
Statements of Earnings for the three fiscal years ended
December 31, 1995 17
Statements of Cash Flows for the three fiscal years ended
December 31, 1995 18
Statements of Stockholders' Equity for the three fiscal
years ended December 31, 1995 19
Notes to Financial Statements 20 - 25
Financial Statement Schedule -
Schedule II - Valuation Reserves 26
-15-
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors,
Kelly Services, Inc.
In our opinion, the accompanying consolidated financial statements as listed in
Item 14(a) 1 and 2 of this Form 10-K present fairly, in all material respects,
the financial position of Kelly Services, Inc. and its subsidiaries at December
31, 1995, January 1, 1995 and January 2, 1994, and the results of their
operations and their cash flows for the years then ended, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
- ------------------------
Price Waterhouse LLP
Detroit, Michigan
January 31, 1996
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BALANCE SHEETS
Kelly Services, Inc. and Subsidiaries
1995 1994 1993
---------- ---------- ----------
(In thousands of dollars)
ASSETS
Current Assets
Cash and equivalents . . . . . . . . . . . . $ 52,811 $ 49,207 $ 36,020
Short-term investments . . . . . . . . . . . 74,737 142,723 144,988
Accounts receivable, less allowances of
$6,950, $5,660 and $4,735, respectively. . 397,534 307,514 248,161
Prepaid expenses and other current assets. . 33,520 27,259 17,881
---------- ---------- ----------
Total current assets. . . . . . . . . . 558,602 526,703 447,050
Property and Equipment
Land and buildings . . . . . . . . . . . . . 35,153 34,044 29,882
Equipment, furniture and leasehold
improvements . . . . . . . . . . . . . . . 113,521 90,868 82,227
Accumulated depreciation . . . . . . . . . . (64,286) (54,731) (43,827)
---------- ---------- ----------
Total property and equipment. . . . . . 84,388 70,181 68,282
Intangibles and Other Assets . . . . . . . . . 75,697 45,491 26,768
---------- ---------- ----------
Total Assets . . . . . . . . . . . . . . . . . $ 718,687 $ 642,375 $ 542,100
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable . . . . . . . . . . . . . . $ 53,013 $ 33,752 $ 24,621
Payroll and related taxes . . . . . . . . . 118,996 102,911 68,451
Accrued insurance. . . . . . . . . . . . . . 51,309 57,390 51,841
Income and other taxes . . . . . . . . . . . 19,265 16,806 10,968
---------- ---------- ----------
Total current liabilities . . . . . . . 242,583 210,859 155,881
Stockholders' Equity
Capital stock, $1.00 par value
Class A common stock, shares issued 36,512
in 1995, 36,507 in 1994 and 1993 . . . . 36,512 36,507 36,507
Class B common stock, shares issued 3,604
in 1995, 3,609 in 1994 and 1993. . . . . 3,604 3,609 3,609
Treasury stock, at cost
Class A common stock, 2,101 shares in
1995, 2,153 in 1994 and 2,361 in 1993. . (6,327) (6,186) (6,702)
Paid-in capital. . . . . . . . . . . . . . . 7,215 5,868 679
Earnings invested in the business. . . . . . 435,100 391,718 352,126
---------- ---------- ----------
Total stockholders' equity. . . . . . . 476,104 431,516 386,219
---------- ---------- ----------
Total Liabilities and Stockholders' Equity . . $ 718,687 $ 642,375 $ 542,100
========== ========== ==========
See accompanying Notes to Financial Statements.
-17-
STATEMENTS OF EARNINGS
Kelly Services, Inc. and Subsidiaries
1995 1994 1993
------------- ------------- -------------
(In thousands of dollars except per share items)
Sales of services. . . . . . . . . . . . . . . . $ 2,689,799 $ 2,362,561 $ 1,954,534
Cost of services . . . . . . . . . . . . . . . . 2,148,406 1,899,552 1,573,797
------------ ------------ ------------
Gross profit . . . . . . . . . . . . . . . . . . 541,393 463,009 380,737
Selling, general and administrative expenses . . 436,308 371,262 316,838
------------ ------------ ------------
Earnings from operations . . . . . . . . . . . . 105,085 91,747 63,899
Interest income . . . . . . . . . . . . . . . . 8,206 6,710 6,960
------------ ------------ ------------
Earnings before income taxes . . . . . . . . . . 113,291 98,457 70,859
Income taxes:
Federal . . . . . . . . . . . . . . . . . . . 34,645 29,915 20,595
State and other . . . . . . . . . . . . . . . 9,155 7,485 5,705
------------ ------------ ------------
Total income taxes . . . . . . . . . . . . . . . 43,800 37,400 26,300
------------ ------------ ------------
Net earnings . . . . . . . . . . . . . . . . . . $ 69,491 $ 61,057 $ 44,559
============ ============ ============
Earnings per share . . . . . . . . . . . . . . . $1.83 $1.61 $1.18
Dividends per share . . . . . . . . . . . . . . $ .78 $ .70 $ .63
Average shares outstanding (thousands) . . . . . 37,993 37,956 37,728
See accompanying Notes to Financial Statements.
-18-
STATEMENTS OF CASH FLOWS
Kelly Services, Inc. and Subsidiaries
1995 1994 1993
--------- --------- ---------
(In thousands of dollars)
Cash flows from operating activities
Net earnings . . . . . . . . . . . . . . . . . . $ 69,491 $ 61,057 $ 44,559
Noncash adjustments:
Depreciation and amortization. . . . . . . . . 22,685 19,105 17,539
Changes in certain working capital components. (62,952) (11,000) (16,300)
--------- --------- ---------
Net cash from operating activities . . . . . 29,224 69,162 45,798
Cash flows from investing activities
Capital expenditures . . . . . . . . . . . . . . (33,982) (18,433) (16,056)
Short-term investments . . . . . . . . . . . . . 67,986 2,265 9,614
Increase in intangibles and other assets . . . . (31,192) (13,610) (10,221)
--------- --------- ---------
Net cash from investing activities . . . . . 2,812 (29,778) (16,663)
Cash flows from financing activities
Dividend payments. . . . . . . . . . . . . . . . (29,638) (26,570) (23,846)
Exercise of stock options and restricted stock
awards . . . . . . . . . . . . . . . . . . . . 1,206 373 1,049
Fractional shares paid . . . . . . . . . . . . . -- -- (18)
--------- --------- ---------
Net cash from financing activities . . . . . (28,432) (26,197) (22,815)
Net change in cash and equivalents . . . . . . . . 3,604 13,187 6,320
Cash and equivalents at beginning of year. . . . . 49,207 36,020 29,700
--------- --------- ---------
Cash and equivalents at end of year. . . . . . . . $ 52,811 $ 49,207 $ 36,020
========= ========= =========
See accompanying Notes to Financial Statements.
-19-
STATEMENTS OF STOCKHOLDERS' EQUITY
Kelly Services, Inc. and Subsidiaries
1995 1994 1993
---------- ---------- ----------
(In thousands of dollars)
Capital Stock
Class A common stock
Balance at beginning of year . . . . . . . . $ 36,507 $ 36,507 $ 29,195
Conversions from Class B . . . . . . . . . . 5 -- 11
Five-for-four stock split. . . . . . . . . . -- -- 7,301
--------- --------- ---------
Balance at end of year . . . . . . . . . . . 36,512 36,507 36,507
Class B common stock
Balance at beginning of year . . . . . . . . 3,609 3,609 2,898
Conversions to Class A . . . . . . . . . . (5) -- (11)
Five-for-four stock split. . . . . . . . . . -- -- 722
--------- --------- ---------
Balance at end of year . . . . . . . . . . . 3,604 3,609 3,609
Treasury Stock
Balance at beginning of year . . . . . . . . (6,186) (6,702) (6,736)
Exercise of stock options. . . . . . . . . . (184) (13) 34
Restricted stock awards. . . . . . . . . . . 43 -- --
Treasury stock issued for acquistion . . . . -- 529 --
--------- --------- ---------
Balance at end of year . . . . . . . . . . . (6,327) (6,186) (6,702)
Paid-in Capital
Balance at beginning of year . . . . . . . . 5,868 679 3,629
Exercise of stock options. . . . . . . . . . 977 386 1,015
Restricted stock awards . . . . . . . . . . 370 -- --
Treasury stock issued for acquistion . . . . -- 4,803 --
Five-for-four stock split. . . . . . . . . . -- -- (3,965)
--------- --------- ---------
Balance at end of year . . . . . . . . . . . 7,215 5,868 679
Earnings Invested in the Business
Balance at beginning of year . . . . . . . . 391,718 352,126 338,273
Net earnings . . . . . . . . . . . . . . . . 69,491 61,057 44,559
Cash dividends . . . . . . . . . . . . . . . (29,638) (26,570) (23,846)
Five-for-four stock split. . . . . . . . . . -- -- (4,058)
Fractional shares paid . . . . . . . . . . . -- -- (18)
Equity adjustment for foreign currency
translation; cumulative credit of $2,121
in 1995; cumulative charge of $1,408 in
1994 and $6,513 in 1993 . . . . . . . . . 3,529 5,105 (2,784)
--------- --------- ---------
Balance at end of year . . . . . . . . . . . 435,100 391,718 352,126
Stockholders' Equity at end of year. . . . . . . $476,104 $431,516 $386,219
========= ========= =========
See accompanying Notes to Financial Statements.
-20-
NOTES TO FINANCIAL STATEMENTS
Kelly Services, Inc. and Subsidiaries
(In thousands of dollars except share and per share items)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company's fiscal year ends on the Sunday nearest to December 31.
The three most recent years ended on December 31, 1995 (1995), January 1,
1995 (1994) and January 2, 1994 (1993).
The Company operates in the single industry segment of providing
temporary help services to a diversified group of customers.
The financial statements consolidate the accounts and operations of the
Company and its subsidiaries, all of which are wholly owned, after
elimination of all intercompany accounts and transactions.
The accounts of the Company's foreign operations are translated at
appropriate rates of exchange. Foreign operations are conducted in Canada,
United Kingdom, Ireland, Denmark, France, Luxembourg (acquired subsequent to
December 31, 1995), The Netherlands, Norway, Switzerland, Australia, New
Zealand and Mexico. Domestic and foreign sales, earnings or loss from
operations and identifiable assets were as follows:
1995 1994 1993
------------ ------------ ------------
Sales:
Domestic Operations... $ 2,172,100 $ 2,005,500 $ 1,719,300
Foreign Operations.... 517,700 357,100 235,200
------------ ------------ ------------
Total................. $ 2,689,800 $ 2,362,600 $ 1,954,500
============ ============ ============
Earnings (loss) from
operations:
Domestic Operations... $ 96,300 $ 87,200 $ 66,400
Foreign Operations.... 8,800 4,500 (2,500)
------------ ------------ ------------
Total.................. $ 105,100 $ 91,700 $ 63,900
============ ============ ============
Identifiable assets:
Domestic Operations... $ 548,300 $ 524,800 $ 471,200
Foreign Operations.... 170,400 117,600 70,900
------------ ------------ ------------
Total.................. $ 718,700 $ 642,400 $ 542,100
============ ============ ============
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses. Actual results could differ from those estimates.
Certain prior year amounts have been reclassified to conform with the
current presentation.
-21-
NOTES TO FINANCIAL STATEMENTS (continued)
Kelly Services, Inc. and Subsidiaries
(In thousands of dollars except share and per share items)
CURRENT ASSETS
Cash and equivalents are stated at cost, which approximates market.
Included are highly liquid debt instruments with original maturities of three
months or less.
Short-term investments are debt instruments having original maturities
of more than three months. Of these investments, federal, state and local
government obligations comprised approximately 90% in 1995 and 80% in 1994.
Short-term investments due within one year totaled $67,000 in 1995 and
$119,000 in 1994. The balance is due within two years and is available for
sale. The difference between carrying amounts and market was not material at
December 31, 1995 and January 1, 1995.
Cash flows from short-term investments for 1995, 1994 and 1993 were as
follows:
1995 1994 1993
--------- ----------- ---------
Sales/Maturities. . $ 951,817 $ 1,279,383 $ 927,805
Purchases . . . . . (883,831) (1,277,118) (918,191)
--------- ----------- ---------
Total . . . . . . . $ 67,986 $ 2,265 $ 9,614
========= =========== =========
CHANGES IN CERTAIN WORKING CAPITAL COMPONENTS
Changes in certain working capital components, as disclosed in the
statements of cash flows, for the years 1995, 1994, and 1993 are as follows:
1995 1994 1993
-------- -------- --------
Increase in accounts
receivable . . . . . . . $(86,512) $(54,571) $(41,136)
Increase in prepaid
expenses and other
current assets . . . . . (5,522) (8,350) (3,212)
Increase in accounts
payable. . . . . . . . . 18,304 8,076 11,874
Increase in payroll and
related taxes. . . . . . 15,030 33,008 14,910
Increase (decrease) in
accrued insurance. . . . (6,101) 5,512 3,004
Increase (decrease) in
income and other taxes . 1,849 5,325 (1,740)
-------- -------- --------
Total. . . . . . . . . . . $(62,952) $(11,000) $(16,300)
======== ======== ========
PROPERTY AND EQUIPMENT
Properties are stated at cost and include expenditures for additions and
major improvements. Fully depreciated assets are eliminated from the
accounts. For financial reporting purposes, assets are depreciated over
their estimated useful lives, principally by the straight-line method.
-22-
NOTES TO FINANCIAL STATEMENTS (continued)
Kelly Services, Inc. and Subsidiaries
(In thousands of dollars except share and per share items)
The Company conducts its field operations primarily from leased
facilities. The following are future minimum lease commitments for the
five-year period commencing in 1996: $29,700, $23,800, $17,400, $11,900 and
$8,800. Lease expense for 1995, 1994 and 1993 amounted to $29,800, $26,700
and $24,900, respectively.
INTANGIBLES AND OTHER ASSETS
Intangibles and other assets include goodwill of $55,400, $32,000 and
$14,400 at year-ends 1995, 1994 and 1993, respectively. Goodwill, which
represents the excess of cost over net assets of businesses acquired, is
amortized on a straight-line basis over periods not exceeding 40 years.
Accumulated amortization at 1995, 1994 and 1993 was $3,100, $1,900 and
$1,200, respectively.
The Company periodically reviews the specific carrying amounts of
goodwill and has determined that no impairments have occurred. Such reviews
are based on various analyses including profitability projections and
management's judgment of the related business' ability to achieve sufficient
profitability.
Other assets include deposits and cash values of life insurance on the
lives of officers and key employees.
CAPITALIZATION AND STOCK SPLITS
The authorized capital stock of the Company is 100,000,000 shares of
Class A common stock and 10,000,000 shares of Class B common stock. Class A
shares have no voting rights and are not convertible. Class B shares have
voting rights and are convertible into Class A shares on a share-for-share
basis at any time. Both classes of stock have identical rights in the event
of liquidation.
In May 1993, the Board of Directors declared a five-for-four split of
the Class A and Class B common stock. At the same time, the stockholders
approved an increase in the number of authorized Class A shares to
100,000,000, from 50,000,000. All per share and share data in the
accompanying financial statements and notes have been restated to give effect
to stock splits.
Earnings per share are based on the average number of Class A and Class
B common shares outstanding during the year.
PERFORMANCE INCENTIVE PLAN
In May 1992, the stockholders approved the Performance Incentive Plan
(the "Plan") to replace the Incentive Stock Option Plan which expired earlier
that year. Under the Plan, stock options (both incentive and nonqualified),
Stock Appreciation Rights (SARs), restricted awards, and performance awards
may be granted to key employees, utilizing the Company's Class A stock.
Stock options may not be granted at prices less than the fair market value on
the date of grant, nor for a term to exceed 10 years.
The Plan provides that the maximum number of shares available for grants
is five percent of the outstanding Class A stock, adjusted for Plan activity
over the preceding five years.
-23-
NOTES TO FINANCIAL STATEMENTS (continued)
Kelly Services, Inc. and Subsidiaries
(In thousands of dollars except share and per share items)
As of December 31, 1995, no SARs or performance awards have been granted
under the Plan. Restricted awards totaling 66,800 and 53,000 shares were
granted under the Plan during 1995 and 1994, respectively.
The combined activity under the plans identified above is as follows:
Number of Exercise
Class A Price Range
Activity Shares Per Share
----------------------------- --------- ---------------
Outstanding at
January 3, 1993 . . . . . . 158,040 $21.60 - $33.80
Granted . . . . . . . . . . . 367,271 $24.75 - $33.60
Exercised . . . . . . . . . . (53,653) $21.60 - $22.60
Cancelled . . . . . . . . . . (16,300) $21.60 - $29.20
Outstanding at --------
January 2, 1994 . . . . . . 455,358 $21.92 - $33.80
Granted . . . . . . . . . . . 307,929 $24.50 - $30.25
Exercised . . . . . . . . . . (19,150) $21.92 - $24.80
Cancelled . . . . . . . . . . (46,123) $24.75 - $33.80
Outstanding at --------
January 1, 1995 . . . . . . 698,014 $22.60 - $33.80
Granted . . . . . . . . . . . 244,900 $26.25 - $30.50
Exercised . . . . . . . . . . (63,903) $22.60 - $30.25
Cancelled . . . . . . . . . . (84,210) $22.60 - $33.80
Outstanding at --------
December 31, 1995 . . . . . 794,801 $24.50 - $33.80
========
At the end of 1995, there were 910,674 shares available for future
grants.
During 1995, the Financial Accounting Standards Board issued SFAS No.
123, Accounting for Stock-Based Compensation. This statement sets forth
standards for accounting for stock-based compensation or allows companies to
continue to account for stock-based compensation under the requirements of
Accounting Principles Board (APB) Opinion No. 25 and make additional
disclosure in the notes to the financial statements. It is the Company's
intention to continue to account for stock-based compensation in accordance
with APB Opinion No. 25 and provide additional disclosure in the notes to the
financial statements beginning in 1996.
RETIREMENT BENEFITS
The Company provides a qualified defined contribution plan covering
substantially all full-time employees, except officers and certain other
management employees. Upon approval by the Board of Directors, a
contribution based on eligible wages is funded annually. The plan offers a
savings feature with Company matching contributions. Assets of this plan are
held by an independent trustee for the sole benefit of participating
employees.
-24-
NOTES TO FINANCIAL STATEMENTS (continued)
Kelly Services, Inc. and Subsidiaries
(In thousands of dollars except share and per share items)
A nonqualified defined contribution plan is provided for officers and
certain other management employees. Upon approval by the Board of Directors,
a contribution based on eligible wages is set aside annually. This plan also
includes provisions for salary deferrals and Company matching contributions.
The total amounts provided for retirement benefits amounted to $4,440 in
1995, $3,916 in 1994 and $3,430 in 1993.
INCOME TAXES
The following summarizes the differences between income taxes for
financial reporting purposes and the United States statutory tax rate for the
years 1995, 1994 and 1993.
1995 1994 1993
---- ---- ----
Statutory rate . . . . . . . . . . . . 35.0% 35.0% 35.0%
State and local taxes, net of
federal benefit. . . . . . . . . . . 5.3 4.9 5.2
Tax exempt income and other tax
credits. . . . . . . . . . . . . . . (2.6) (2.2) (2.6)
Other. . . . . . . . . . . . . . . . . 1.0 0.3 (0.5)
----- ----- -----
Effective tax rate . . . . . . . . . . 38.7% 38.0% 37.1%
===== ===== =====
Deferred taxes are related to the effect of temporary differences between
financial and tax reporting. These differences are related principally to
depreciation, benefit plan costs, provisions for workers' compensation claims,
full-time and temporary employee vacation costs and provisions for doubtful
accounts.
In 1992 the Internal Revenue Service (IRS) proposed the imposition of an
accumulated earnings tax totaling $49 million for 1988, 1989 and 1990 in
connection with an audit of the Company's consolidated federal tax liability.
The proposed amount has been subsequently reduced to $6.5 million. The
Company believes there is no factual or legal basis for the imposition of any
accumulated earnings tax and that the Company is fully justified in making
provision to meet the present and future needs of its expanding business
operations. The Company is defending its position through the IRS appeal
process and into the courts if necessary. In the opinion of the Company, the
ultimate resolution of this issue will not materially affect its financial
statements.
The Company paid income taxes of $52,900 in 1995, $43,300 in 1994 and
$34,800 in 1993.
-25-
NOTES TO FINANCIAL STATEMENTS (continued)
Kelly Services, Inc. and Subsidiaries
SELECTED QUARTERLY FINANCIAL DATA (unaudited)
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- ----------
(In thousands of dollars except per share items)
Sales of services
1995 . . . . . . . . . $620,685 $652,417 $698,453 $718,244 $2,689,799
1994 . . . . . . . . . 530,191 570,813 630,196 631,361 2,362,561
1993 . . . . . . . . . 450,654 482,034 517,585 504,261 1,954,534
Cost of services
1995 . . . . . . . . . 498,667 519,739 555,968 574,032 2,148,406
1994 . . . . . . . . . 428,374 461,093 505,668 504,417 1,899,552
1993 . . . . . . . . . 364,724 388,906 416,904 403,263 1,573,797
Selling, general and
administrative
1995 . . . . . . . . . 104,305 107,789 111,125 113,089 436,308
1994 . . . . . . . . . 88,424 88,111 95,070 99,657 371,262
1993 . . . . . . . . . 77,196 79,178 79,541 80,923 316,838
Net earnings
1995 . . . . . . . . . 12,262 16,660 20,373 20,196 69,491
1994 . . . . . . . . . 9,233 14,420 19,289 18,115 61,057
1993 . . . . . . . . . 6,879 10,009 14,028 13,643 44,559
Earnings per share
1995 . . . . . . . . . .32 .44 .54 .53 1.83
1994 . . . . . . . . . .24 .38 .51 .48 1.61
1993 . . . . . . . . . .18 .27 .37 .36 1.18
Dividends per share
1995 . . . . . . . . . .180 .200 .200 .200 .780
1994 . . . . . . . . . .160 .180 .180 .180 .700
1993 . . . . . . . . . .152 .160 .160 .160 .632
-26-
SCHEDULE II - VALUATION RESERVES
Kelly Services, Inc. and Subsidiaries
DECEMBER 31, 1995
(In thousands of dollars)
Additions
------------------------
Balance at Charged to Charged to Deductions - Balance at
beginning costs and other uncollectible end
of year expenses accounts* accounts of year
---------- ---------- ---------- ------------- ----------
Description
- -----------
Fifty-two weeks ended December 31, 1995:
Reserve deducted in the balance sheet
from the assets to which it applies -
Allowance for doubtful accounts $5,660 $4,240 -- $2,950 $6,950
====== ====== ====== ======
Fifty-two weeks ended January 1, 1995:
Reserve deducted in the balance sheet
from the assets to which it applies -
Allowance for doubtful accounts $4,735 $4,005 $280 $3,360 $5,660
====== ====== ==== ====== ======
Fifty-two weeks ended January 2, 1994:
Reserve deducted in the balance sheet
from the assets to which it applies -
Allowance for doubtful accounts $3,325 $4,345 -- $2,935 $4,735
====== ====== ====== ======
* Allowance of companies acquired.
-27-
INDEX TO EXHIBITS
REQUIRED BY ITEM 601,
REGULATION S-K
Exhibit
No. Description Page
- ------- ----------- ----
3.1 Certificate of Incorporation. (Reference is made to Exhibit 3.2
to the Form 10-Q for the quarterly period ended October 3, 1993,
filed with the Commission in November, 1993, which is incorporated
herein by reference).
3.2 By-laws. (Reference is made to Exhibit 3.3 to the Form 10-Q for
the quarterly period ended October 3, 1993, filed with the
Commission in November, 1993, which is incorporated herein by
reference).
4 Rights of security holders are defined in Articles Fourth, Fifth,
Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth, Thirteenth,
Fourteenth and Fifteenth of the Certificate of Incorporation.
(Reference is made to Exhibit 3.2 to the Form 10-Q for the
quarterly period ended October 3, 1993, filed with the Commission
in November, 1993, which is incorporated herein by reference).
10.1 Short-Term Incentive Plan. (Reference is made to Exhibit 10.3 to
the Form 10-K for the fiscal year ended January 3, 1993, filed
with the Commission in March, 1993, which is incorporated herein
by reference.)
10.2 Kelly Services, Inc. 1982 Incentive Stock Option Plan. (Reference
is made to Exhibit 10.3 to the Form 10-K for the fiscal year
ended January 2, 1994, filed with the Commission in March, 1994,
which is incorporated herein by reference.)
10.3 Kelly Services, Inc. Performance Incentive Plan. (Reference is
made to Appendix to the Definitive Proxy for the fiscal year ended
December 30, 1991, filed with the Commission in April, 1992, which
is incorporated herein by reference).
10.4 Kelly Services, Inc. Non-employee Director Stock Award Plan. (Reference
is made to Exhibit A to the Definitive Proxy for the fiscal year ended
January 1, 1995, filed with the Commission in April, 1995, which is
incorporated herein by reference).
11 Additional Earnings Per Share Information. 1
(Document 2)
21 Subsidiaries of Registrant. 1
(Document 3)
23 Consent of Independent Accountants. 1
(Document 4)
24 Powers of Attorney. 1
(Document 5)
27 Financial Data Schedule 1
(Document 6)