Good morning, ladies and gentlemen. Welcome to Kelly Services’ Third Quarter Earnings Conference Call. All parties will be on listen-only until the question-and-answer portion of the presentation. Today’s call is being recorded at the request of Kelly Services. (Operator Instructions) I would now like to turn the meeting over to your host, Mr. Carl Camden, President and CEO. Sir, you may begin.

Thank you, John and good morning. Welcome to Kelly Services 2013 Q3 conference call. With me on today’s call is Patricia Little, our CFO. Let me remind you that any comments made during this call, including the Q&A may include forward-looking statements about our expectations for future performance. Actual results could differ materially from those suggested by our comments and we have no obligation to update the statements made on this call. Please refer to our SEC filings for a description of the risk factors that could influence the company’s actual future performance. Turning to Kelly’s third quarter results. I am pleased to report that our performance was better than our expectations. Revenue was down 1% year-over-year. Expenses were down 2% year-over-year while continuing to make targeted investments for long-term growth and we achieved adjusted earnings from operations of $21 million. Our gross profit rate for the third quarter was 16.4%, up from the 16.1% delivered last quarter, but down from the 16.8% reported in Q3 of 2012. Kelly’s adjusted third quarter earnings from continuing operations were $0.51 per share, a nice jump compared to adjusted earnings of $0.43 per share for the same period last year. Now, let’s take a closer look at our third quarter performance in each of our business segments beginning with the Americas. We experienced continued softening in revenue demand in the Americas, as improvement in the temporary employment markets in which we are engaged has remained modest. Combined revenue for the region was down roughly 4% year-over-year for the third quarter, down from the 2% year-over-year decline in the second quarter. Americas commercial revenue was down 4% year-over-year for the third quarter. This compares to the 3% decrease we reported in Q2. Light industrial revenue was up 1% from a year ago and up…

Thank you, Carl. Revenue totaled $1.3 billion, down 1% compared to the third quarter last year and down 2% sequentially. Worldwide, our fees were up 2% year-over-year and sequentially. Our gross profit rate was 16.4%, down 40 basis points compared to the third quarter last year. As Carl noted, we saw declines in all three regions and in OCG. On a sequential basis, our gross profit rate was up 30 basis points, primarily due to improvements in OCG. During the third quarter, we recorded restructuring charges of $500,000 primarily related to our previously announced plans in Europe. At this point, we have substantially completed our restructuring in Europe although we do have a small amount of expense which has been delayed into the fourth quarter. Excluding restructuring, expenses were down 2% year-over-year and down 1% sequentially. As a result of our continued efforts in controlling expenses, we were able to continue to offset the investments we have been making in PT, centralization and technology. Excluding the restructuring charges, earnings from operations were $20.7 million compared to 2012 adjusted earnings of $24 million. Income tax expense for the third quarter was $100,000 compared to expense of $6.7 million in 2012. So our tax rate was 0.3% for the quarter compared to a rate of 29% last year. U.S. work opportunity credits provided a significant reduction to income tax expense and delivered $5.8 million of benefit in the third quarter of 2013 compared to $1.8 million in the third quarter of 2012 when the credits were generally not available for new hires. 2013 also benefited from strong returns on tax-free investments and company-owned life insurance policies that are used to fund non-qualified retirement plans and on the mix of income between jurisdictions. Diluted earnings per share from continuing operations, excluding restructuring charges…

Thank you, Patricia. Our third quarter results confirmed that Kelly is on the right track in making solid strategic progress towards our long-term success. Our OCG segment continues to exceed expectations, delivering strong revenue fee and earning results, winning profitable new business and expanding the current relationships Kelly has with many of the world’s premier brands. We have pioneered the talent supply chain management approach that is gaining traction and recognition in the crowded outsourcing and consulting marketplace while bringing in high-margin business for Kelly. As competition intensifies for the limited supply of skilled talent around the world we also continue to sharpen our focus on higher margin profession and technical staffing solutions. Though year-over-year PT revenue was down, the third showed healthy improvements in PT fees in the Americas. And we believe our success in key areas of OCG particularly our engineering and science oriented BPO is a heightening awareness of Kelly’s overall PT capabilities. Finally, we continue to keep a tight rein on expenses making targeted cuts and investments to support long-term growth while delivering an operating profit in the phase of relatively flat revenue. All told, Kelly’s progress confirms that our strategy is responding to what the modern labor market demands more holistic work force solutions, access to highly skilled talent and work force models that help companies achieve their short and long-term business goals. We are especially pleased that the Americas region reversed the PT fee declines we saw on previous quarters, delivering solid double-digit year-over-year growth in PT fees despite an uncertain economic climate and sluggish hiring condition conditions. Still, while we are proud of our teams and pleased with Kelly’s third quarter results we are realistic about the current climate. There are larger forces at play that continue to impact our business 2013 has…

(Operator Instructions) And we will go to line of Ty Govatos with TG Research. Please go ahead.

Hi Ty.

How are you? Patricia I am sorry could you go through some of the guidance numbers again, my fingers just aren’t that fast?

I have to talk slower. We expect revenue to be down 1% to 3% flat sequentially more pressure on GP down slightly year-over-year and sequentially, SG&A to be flat to up slightly year-over-year and up 2% to 4% sequentially and an under 10% tax rate for the full year.

There you go, and a question this one is for Carl or yourself Patricia do you notice over the last 18 months that most of the growth in the U.S. market is coming from small accounts and large accounts tend to have been pulling back?

All starts, large accounts have been pulling back but primarily as we said in the script because we are not engaging in investment projects, launching new products, building out new production capabilities and so on. We have been putting a different and focused effort in the marketplace against large accounts and small accounts. So I am not certain that what we see would be particularly indicative of the market, the marketplace in general. We are trying to produce some outsized growth in both segments.

Fair enough. Thanks an awful lot.

Thanks Ty.

(Operator Instructions) We’ll go to the line of Tobey Summer with SunTrust. Please go ahead.

Hi Tobey.

Hi, good morning.

Good morning.

Carl, what are your thoughts about the internal capability you have to expand operating margins if the economy and job growth don’t change?

So partly the strategic initiatives focusing on higher end PT movement and OCG are designed both to take advantage of where the marketplace is going and have a corollary effect of expanding operating margins as they gain traction. You are seeing that in particular right now in the OCG space as we are achieving leverage and gaining some good momentum on the sales side, not seeing as much it on the PT side although the fees in the America as well as a good hopeful indicator of what could be done. The question I think you are really asking though is what type of expense you know management can be done in the future. And a lot of it will depend upon where growth happens and where growth doesn’t happen and what we succeed and the third strategic initiative that we didn’t talk in depth about, but you heard Patricia and I both mentioned which was the centralization of our service delivery system is designed to ultimately reduce expense cost and has been doing so, where we do more and more of our service delivery out of centralized hubs rather than a distributed branch network, which we hope also has the effect, Tobey, of freeing up the distributed branch network to pursue the local business when I talked about we are trying to make focusing on both in two different ways with two different delivery systems.

So is that to say that you think you can expand margins in a static economic and job growth environment?

Yes, primarily from mix right, if PT and PT related fees continue to expand and OCG does what it’s supposed to do, then well we should be able to expand margins.

Okay. Within OCG, were there differences in kind of geographic growth rates or is it primarily end markets and skill sets, because I think you highlighted your engineering and scientific capability?

Yes. So I think we are at the phase now, Tobey. As you know, where lots of companies are shifting the procurement model and shifting the talent management model to the supply chain approach. So right now we are seeing growth around the world. We are seeing growth across the U.S. marketplaces and we are seeing growth in almost every industry segment that you could – that you can think of. In particular, you see a lot of growth in those that are IT heavy, but that’s because in a lot of companies IT represents 40%, 50% of the external work for us, but we are seeing growth and demand whether it’s healthcare or whether they are healthcare professional, heavy finance professional or engineering heavy. Right now, this is a grow everywhere, grow everything stage supply chain management.

Carl, in the BPO spaces that are you taking away work from other providers or is the growth that you called out primarily new work to the market?

Partly, you have an adoption curve taking place where there are aspects of work that companies are moving to do in inside of BPO solution. So we see – you see kind of new BPO opportunities emerging, particularly in those that are using professional and technical workers, because kind of the first stage of BPO was often pretty heavy in the use of commercial type of workers and now it’s moving up the skill sets, but we are seeing growth and everything from the most basic fundamental of our BPO, traditional products now to the newer ones better engineering and science driven.

Thanks and my last question has to do with commercial staffing gross margins that it seems you are providing a bit of a headwind in what do you think are the triggers we should look for the stabilization or expansion of those margins?

In this quarter I would say that the fundamentals are reasonably stable. We saw impacts from things like prior year adjustment to workers comp which I wouldn’t view as a real driver or a signal. I will say going forward that the real impact will start hitting and the interesting question will be once we have all rolled out ACA and how that will impact our gross margins. And we strongly believe that we can recover the ACA costs that we have, but that is probably the biggest unknown we have for Americas commercial gross margins.

Thank you very much

Thank you

And Mr. Camden, there are no further questions in queue.

Great. Thank you, John and thank you all for joining in on the call.