Good morning, ladies and gentlemen, and welcome to Kelly Services First 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. If anyone has any objections you may disconnect at this time. I would now like to turn the meeting over to your host Mr. Carl Carmden, President and Chief Executive Officer. Please go ahead.

Thank you, John [ph]. Good morning, everyone, and welcome to Kelly Services 2014 Q1 Conference Call. And with me on the call today 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 the Kelly’s first quarter results, I’m pleased to report that our performance was clearly better than our expectations and confirm that we’re fully committed to making necessary strategic investments. Revenue was $1.3 billion, up 1% year-over-year, a slow but not surprising start given that the first quarter is typically the weakest in our industry cycle. Our gross profit rate for the first quarter was 16.7%, up 20 basis points from 16.5% delivered in the same period last year. Expenses were also up coming in at 3% higher year over year which was in line with our expectations for the quarter and reflects our planned investments. As anticipated, these investments cut into our first quarter earnings a bit. We achieved an operating profit of $6.3 million down compared to the $7.1 million for the first quarter last year and down from the $9.9 million in the fourth quarter. Kelly’s first quarter earnings from continuing operations were $0.07 per share compared to adjusted earnings of $0.30 per share for the same period of last year. Patricia will cover our quarterly performance in more detail a bit later. But I can tell you overall, we’re extremely pleased for Kelly’s performance during the first quarter.…

Thank you, Carl. Revenue totaled $1.3 billion up 1% compared to the first quarter last year. Staffing placement fees were down 7% year over year. Our gross profit rate was 16.7%, up 20 basis points compared to the first quarter of last year, in large part due to a 50 basis point improvement in the Americas. As Carl noted, the Americas improvement was primarily due to the improved pricing as well as lower payroll taxes and costs for employee benefits. On a sequential basis, our gross profit rate was flat. Overall, GP was up $5.5 million, about 3%. Expenses were up 3% year over year due to a number of factors including higher cost due to additional headcount related to investments in PT recruiters, OCG and centralized operations partially offset by a $3 million charge we took last year related to an unclaimed property settlement. Earnings from operations were $6.3 million compared with 2013 earnings of $7.1 million. Income tax expense for the first quarter was $2.1 million compared to a benefit of $6.8 million in 2013. The increase in income tax expense is primarily due to U.S. work opportunity credits. During the first quarter of 2013, work opportunity credits were instated for both 2012 and 2013. As a result in the first quarter of 2013, we recorded $11.1 million of work opportunity credits including $9.3 million related to 2012. Because work opportunity credits have once again expired, we recorded only $1.3 million in related credits in the first quarter of 2014 which related to employees hired in prior years. Diluted earnings per share for the first quarter of 2014 totaled $0.07 per share compared to $0.34 in 2013. Again, the decrease is due to work opportunity tax credits. Looking ahead to 2014, as I stated during the fourth quarter…

Thank you, Patricia. Looking back on Kelly’s first quarter performance, we’re pleased with our progress against some tended [ph] objectives. On moving forward, we targeted aggressive investments to adjust our operating models and intensify our focus on higher margin growth. And though job creation remains slow and economic recoveries is uneven across regions, our results confirm that Kelly’s strategy aligns with market needs and is positioning us for growth. Our OCG segment continuous to perform well consistently delivering strong revenue and fee results, winning new profitable business and expanding current relationships on large accounts. Our BPO and CWO specialties are performing above expectation and represent key elements of our talent supply chain management approach. As many of the world’s largest companies become more intentional and strategic in their approach to talent, we’re helping them design and deliver a holistic global workforce strategy that support their business calls. The year-over-year lag in OCG’s first quarter earnings performance reflects the significant investments we’re making to further accelerate the segment’s growth. As demand increases for integrated talent supply change across the company’s global enterprise, our investments remain focused on our predictive analytics that will drive workforce planning, a deeper and broader supplier network now numbering more than 4600 talent suppliers in 140 countries and the evolution of our independent contractor and statement of work solutions. Even as we pursue rapid growth in OCG, we’re also continuing the strength in our staffing solutions. As a market leader, Kelly’s commercial business is the cornerstone of the Kelly brand and our reputation for excellence continues to open doors to new and expanded customer relationships. Significantly, when it comes to professional and technical staffing our PT solutions are beginning to show early signs of improvement on the heels [ph] of our increased focus on these specialties in…

Certainly. (Operator instructions) Okay, will have Tobey Summer with SunTrust. Please go ahead.

Hey, Toby.

Hi, this is actually Frank [ph] in for Toby. I wanted to ask about the investments in the centralized operations. Can you give us any more color in terms of the implementation timeline and also what impact you see on the P&L as we move forward in the quarter?

Go ahead. Yeah, so on the centralized timeline it’s consonance [ph] on pieces. One is to transition or larger accounts into the centralized delivery model. We’re well on track with that and reaching the end of that process. The next area that we’re focusing on is improving the efficiency of the operations and ability to deliver our recruitment through that. The first step is moving, the next step is to get it more efficient and more productive in terms of the recruiters that we have. We’re really pleased with our progress in this area. We’ve had a good experience transitioning our large accounts to the space. The large accounts have been happy with the move and we’re well on track with our progress in terms of efficiency and productivity. In terms of results in the P&L, at this point as I said in the call, we’re still really in an investment phase. We expect higher growth from the strategy but it will certainly lag the investments.

Okay, that’s helpful. And then also in your prepared remarks you mentioned regulatory pressure related to ACA isn’t something that’s impacting, I believe, SG&A. Can you talk a little about that and how that’s unfolding in the outlooks for kind of the remainder of the year there?

Yes, happy to. As you know the ACA regulations were push off a year so that did allow us more time to make the necessary changes to our IT systems and we’re well on track with that, pleased with our progress there. We’re not worried about our ability to deliver against the regulatory situation when we need to offer the ACA offerings to our attempts starting next year. We had new regulations that came out relatively recently, those were, in fact, somewhat different than what the preliminary regulations had been. So we’re still, as is the rest of the staffing industry assessing those and figuring out how best to apply them to our circumstances. We’re encouraged by the fact that the regulations had specific – really a specific call out for the staffing industry because we’re a pretty unique operation and it was good to see that the regulators address that in their final promulgations.

Great, that’s helpful. And my last question is on OCG. You’ve seen a nice improvement there. You’re doing some investments there as well. Where do you see that business going in terms of either percentage or revenue or just part of the business? How is that going to fit in the portfolio in the longer term?

It depends how long the longer term is right then [ph]. Percentage of revenue is a tough thing to do in OCG because there’s business lines in which payroll dollar show up on the revenue line and business lines and which only the fees do. So if I look at it more as a percentage of our gross profit, dollars, it’s already sitting now around the sixth [ph] of the gross profit dollars. I think the – I think for us the long range goal would be to get to a more even balance between the OCG, GP and the staffing GP. The speed with which we get there depends on the adoption incurred with the supply chain model which is doing well. But primarily doing well among larger customers and the adoption curve well either will or won’t pick up speed as it begins to hit the medium-sized more national companies here in the U.S. and in Europe and I won’t know if what that speed is for a year or two.

I think one thing to keep in mind is that it’s both an offense and a defensive part of our strategy. It’s offense in the sense that it’s clearly what our customers want and one that we’re delivering to them. It’s also defense because we believe that it protects our staffing business. We can deliver through the talent supply chain the best staffing to our customers in many cases that includes Kelly staffing and we think that’s an important part of the strategy.

That makes sense. Thank you very much.

Thank you.

Next questions from John Healy with Northcoast Research. Please go ahead. John Healy – Northcoast Research: Thank you. Carl, I wanted to ask a little – I’ll ask you a question a little bit about – really into the top line guidance for the year. If I kind of think what you did in the first quarter and kind of like at the midpoint of what you’re expecting for 2Q, I mean, it assumes a pretty big pickup in 3Q and 4Q. And I’m trying to understand what’s embedded in that expectation as the contribution of the talents and then just a broader-based pickup and then something you see in the OCG business coming on. I’m trying to understand the roadmap to be able to get to that level of top line for the full year.

Pretty much yes, yes and yes. Okay, so we’ve already said we expect the overall job growth to slowly accelerate throughout the year. And we’ve already said that we see some of our customers beginning to make the right sounds and noises towards that. Patricia has already talked about and we’ve talked about the investments being made and then we expect that to lead to stronger growth and we continue to see especially a strong growth in the OCG business side. John Healy – Northcoast Research: So, I mean, is there a way to think about how much of that expectation is based upon the contribution of the new talent and the investments or and as well as the way to think about how much is it just market oriented?

I think it’s more market, John, honestly. And it’s consistent with what we’re seeing in the market so we feel – obviously we wouldn’t have reiterated it if we didn’t but we do continue to see traction. John Healy – Northcoast Research: Okay. And then I just wanted to ask on the investment side, is there a way to think about how much of that is in the U.S. and how much of that might be in the Europe? It seems like you’re starting to get some momentum across aboard internationally and then I was just trying to think if that make sense to be investing there to kind of push that business even further?

You have to consider [ph] a couple parts. So first of all, I would say that the bulk of the dollars that we’re spending and the things that we talk about are here in the Americas and a lot of them are concretely directed towards our business in the Americas as our biggest and most powerful segment, it’s really where we get the biggest bang for the buck in terms of our investment dollars. On OCG, the investments that you see really are global in nature and are confined to one geography. In fact, especially in areas like talent supply chain, they tend be more focused outside of the U.S. because it’s all about building up a network that’s global outside of the U.S. and Carl referenced the numbers on those. We have similar efforts under way internationally in terms of centralizing operations, in terms of investing in PT. They tend to be more country oriented and we’re really pleased with the progress and as you say traction that we’re seeing outside of the U.S. but they’re really big, multimillion dollar investments that we want to call out as something that we think is going to really drive our results are going to be primarily in America. So yes, we’re doing things outside of the U.S. as well but Americas’ ones will have the biggest direct input in stack. John Healy – Northcoast Research: Great. Thank you.

And next question is from Tag Valoff [ph] of TG Research, please go ahead.

Hi, Tag [ph]. Tag Valoff – TG Research: Hey, how are you doing?

(Inaudible). Tag Valoff – TG Research: Technical question, Patricia. Could you go through the second quarter guidance again?

Yes, happy too. I’ll just pull off the page here, a second. So what we’re saying for the second quarter is we expect revenue to be up 1% to 3% year over a year which will be – Tag Valoff – TG Research: Okay.

– 4% to 6% sequentially. GP rate to be off slightly year over year down slightly sequentially. And we expect the expenses to be 7% to 9% off which is driven partly by based – cost inflation that we have in our SG&A but partly driven by the investments that we’ve talked about so much on this call. Tag Valoff – TG Research: Okay. Second question if I can – a lot of the staffing companies had relativity weak January, February with strengthening in March extending into April, is that pretty much the trend that you’ve seen in the U.S.?

Yeah, broadly. Not – but it’s not – I don’t want to imply that there’s a sharp ramp there.

Yeah. Tag Valoff – TG Research: But somewhat better than normal seasonal trends?

Yes. Tag Valoff – TG Research: Okay. Thanks an awful lot. I appreciate the time.

Great.

(Operator instructions) And we have Josh Weldon [ph] with Sidoti & Company, please go ahead.

Hi, Josh [ph]. Josh Weldon – Sidoti & Company: Hey, good morning everyone. I was curious, what percent of your PT business is IT and finance?

Excellent question but I don’t the number off the top of my head here. I’ve got people rapidly going through books –

No. we haven’t – we have really it really wanted to layout the pieces that directly. I do want to say though that clearly for us engineering and science are where we do the bulk of our business. IT is a focus for us in terms of high growth area. Finance is the smallest piece and again it’s one where we would view it sort of as the fourth of the group. Josh Weldon – Sidoti & Company: Okay. Because I just want to get a handle on – I see a lot of other staffers out there putting a pretty strong results in IT and finance, just obviously a lot of demand there in the U.S. I’m just curious if your investments that you’re making in the PT recruiters are going to be focused on those markets at all or more so on science and engineering?

IT would probably be the single biggest area where we want to differentiate our – between our past performance and going forward. So it’s incredibly focus of where we’re going partly because it’s an attractive market in and of itself and also because frankly it’s an entry into the overall PT staffing for the large companies that we work with. Finance, again we’ve been small in finance. We’d like to get bigger. We want to improve that but it doesn’t have quite the focus of IT. In engineering and science, I mean, we’re strong leaders in that area and we just want to continue to build the communities in that and to continue to do really to play to our strengths that we already have in those markets.

And then we said – I said in the comments, we know and recognize that we underperformed in the finance and IT areas compared to other areas of the company which we touted as overperforming [indiscernible] scenario, we’ve got to step up improvement and again in particular IT is an area that we are investing in. Josh Weldon – Sidoti & Company: Okay, great. Just one other question, based off your Q2 commentary, with regard to tax, I was just curious if the work opportunity credits were not reinstated, what was your expectations for the tax rate in Q2?

I didn’t [indiscernible] for Q2 because we do that – you have to do the full year and then it wouldn’t change because we’ve assumed in the numbers that we’ve given you that the extenders would happen at the end of the year. Josh Weldon – Sidoti & Company: Okay.

And I think that looking at where we were this quarter it wouldn’t be this similar. Josh Weldon – Sidoti & Company: Okay, great. Thank you very much.

And Mr. Carmden, no further questions. Thank you.

Great, thank you. And thank you all.