DELAWARE | 38-1510762 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer [ ] | Accelerated filer [X] |
Non-accelerated filer [ ] (Do not check if a smaller reporting company) | Smaller reporting company [ ] |
Emerging growth company [ ] |
Page Number | |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||
July 1, 2018 | July 2, 2017 | July 1, 2018 | July 2, 2017 | ||||||||||||
Revenue from services | $ | 1,386.9 | $ | 1,333.6 | $ | 2,756.8 | $ | 2,623.3 | |||||||
Cost of services | 1,146.4 | 1,104.8 | 2,278.1 | 2,162.9 | |||||||||||
Gross profit | 240.5 | 228.8 | 478.7 | 460.4 | |||||||||||
Selling, general and administrative expenses | 220.1 | 208.5 | 446.3 | 423.7 | |||||||||||
Earnings from operations | 20.4 | 20.3 | 32.4 | 36.7 | |||||||||||
Loss on investment in Persol Holdings | (52.5 | ) | — | (28.8 | ) | — | |||||||||
Other income (expense), net | 0.6 | (0.5 | ) | (1.1 | ) | (2.1 | ) | ||||||||
Earnings (loss) before taxes and equity in net earnings (loss) of affiliate | (31.5 | ) | 19.8 | 2.5 | 34.6 | ||||||||||
Income tax (benefit) expense | (15.6 | ) | 1.5 | (9.2 | ) | 4.2 | |||||||||
Net earnings (loss) before equity in net earnings (loss) of affiliate | (15.9 | ) | 18.3 | 11.7 | 30.4 | ||||||||||
Equity in net earnings (loss) of affiliate | 0.5 | 0.4 | 2.0 | 0.5 | |||||||||||
Net earnings (loss) | $ | (15.4 | ) | $ | 18.7 | $ | 13.7 | $ | 30.9 | ||||||
Basic earnings (loss) per share | $ | (0.40 | ) | $ | 0.48 | $ | 0.35 | $ | 0.79 | ||||||
Diluted earnings (loss) per share | $ | (0.40 | ) | $ | 0.47 | $ | 0.35 | $ | 0.78 | ||||||
Dividends per share | $ | 0.075 | $ | 0.075 | $ | 0.15 | $ | 0.15 | |||||||
Average shares outstanding (millions): | |||||||||||||||
Basic | 38.8 | 38.3 | 38.7 | 38.3 | |||||||||||
Diluted | 38.8 | 38.8 | 38.8 | 38.7 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||
July 1, 2018 | July 2, 2017 | July 1, 2018 | July 2, 2017 | ||||||||||||
Net earnings (loss) | $ | (15.4 | ) | $ | 18.7 | $ | 13.7 | $ | 30.9 | ||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Foreign currency translation adjustments, net of tax expense of $0.6, $0.0, $0.6 and $0.1, respectively | (14.8 | ) | 6.9 | (0.8 | ) | 12.6 | |||||||||
Less: Reclassification adjustments included in net earnings | — | — | — | — | |||||||||||
Foreign currency translation adjustments | (14.8 | ) | 6.9 | (0.8 | ) | 12.6 | |||||||||
Unrealized gains on investment, net of tax expense of $0.4 and $9.0 in 2017, respectively | — | 0.9 | — | 19.8 | |||||||||||
Other comprehensive income (loss) | (14.8 | ) | 7.8 | (0.8 | ) | 32.4 | |||||||||
Comprehensive income (loss) | $ | (30.2 | ) | $ | 26.5 | $ | 12.9 | $ | 63.3 |
ASSETS | July 1, 2018 | December 31, 2017 | |||||
CURRENT ASSETS: | |||||||
Cash and equivalents | $ | 33.9 | $ | 32.5 | |||
Trade accounts receivable, less allowances of $13.1 and $12.9, respectively | 1,248.9 | 1,286.7 | |||||
Prepaid expenses and other current assets | 64.5 | 65.1 | |||||
Total current assets | 1,347.3 | 1,384.3 | |||||
NONCURRENT ASSETS: | |||||||
Property and equipment: | |||||||
Property and equipment | 292.7 | 291.8 | |||||
Accumulated depreciation | (208.0 | ) | (205.7 | ) | |||
Net property and equipment | 84.7 | 86.1 | |||||
Deferred taxes | 191.7 | 183.4 | |||||
Goodwill | 107.3 | 107.1 | |||||
Investment in Persol Holdings | 203.2 | 228.1 | |||||
Investment in equity affiliate | 122.0 | 117.4 | |||||
Other assets | 278.4 | 271.8 | |||||
Total noncurrent assets | 987.3 | 993.9 | |||||
TOTAL ASSETS | $ | 2,334.6 | $ | 2,378.2 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | July 1, 2018 | December 31, 2017 | |||||
CURRENT LIABILITIES: | |||||||
Short-term borrowings | $ | 1.7 | $ | 10.2 | |||
Accounts payable and accrued liabilities | 505.5 | 537.7 | |||||
Accrued payroll and related taxes | 284.7 | 287.4 | |||||
Accrued insurance | 25.3 | 25.7 | |||||
Income and other taxes | 60.7 | 65.2 | |||||
Total current liabilities | 877.9 | 926.2 | |||||
NONCURRENT LIABILITIES: | |||||||
Accrued insurance | 49.2 | 49.9 | |||||
Accrued retirement benefits | 182.2 | 178.1 | |||||
Other long-term liabilities | 64.4 | 72.5 | |||||
Total noncurrent liabilities | 295.8 | 300.5 | |||||
Commitments and contingencies (see contingencies footnote) | |||||||
STOCKHOLDERS’ EQUITY: | |||||||
Capital stock, $1.00 par value | |||||||
Class A common stock, shares issued 36.6 at 2018 and 2017 | 36.6 | 36.6 | |||||
Class B common stock, shares issued 3.5 at 2018 and 2017 | 3.5 | 3.5 | |||||
Treasury stock, at cost | |||||||
Class A common stock,1.3 shares at 2018 and 1.7 shares at 2017 | (26.8 | ) | (34.6 | ) | |||
Class B common stock | (0.6 | ) | (0.6 | ) | |||
Paid-in capital | 23.4 | 32.2 | |||||
Earnings invested in the business | 1,134.8 | 983.6 | |||||
Accumulated other comprehensive income (loss) | (10.0 | ) | 130.8 | ||||
Total stockholders’ equity | 1,160.9 | 1,151.5 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,334.6 | $ | 2,378.2 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||
July 1, 2018 | July 2, 2017 | July 1, 2018 | July 2, 2017 | ||||||||||||
Capital Stock | |||||||||||||||
Class A common stock | |||||||||||||||
Balance at beginning of period | $ | 36.6 | $ | 36.6 | $ | 36.6 | $ | 36.6 | |||||||
Conversions from Class B | — | — | — | — | |||||||||||
Balance at end of period | 36.6 | 36.6 | 36.6 | 36.6 | |||||||||||
Class B common stock | |||||||||||||||
Balance at beginning of period | 3.5 | 3.5 | 3.5 | 3.5 | |||||||||||
Conversions to Class A | — | — | — | — | |||||||||||
Balance at end of period | 3.5 | 3.5 | 3.5 | 3.5 | |||||||||||
Treasury Stock | |||||||||||||||
Class A common stock | |||||||||||||||
Balance at beginning of period | (27.3 | ) | (37.5 | ) | (34.6 | ) | (38.4 | ) | |||||||
Issuance of stock awards | 0.5 | 0.5 | 7.8 | 1.4 | |||||||||||
Balance at end of period | (26.8 | ) | (37.0 | ) | (26.8 | ) | (37.0 | ) | |||||||
Class B common stock | |||||||||||||||
Balance at beginning of period | (0.6 | ) | (0.6 | ) | (0.6 | ) | (0.6 | ) | |||||||
Issuance of stock awards | — | — | — | — | |||||||||||
Balance at end of period | (0.6 | ) | (0.6 | ) | (0.6 | ) | (0.6 | ) | |||||||
Paid-in Capital | |||||||||||||||
Balance at beginning of period | 21.1 | 31.5 | 32.2 | 28.6 | |||||||||||
Issuance of stock awards | 2.3 | (0.4 | ) | (8.8 | ) | 2.5 | |||||||||
Balance at end of period | 23.4 | 31.1 | 23.4 | 31.1 | |||||||||||
Earnings Invested in the Business | |||||||||||||||
Balance at beginning of period | 1,153.2 | 932.9 | 983.6 | 923.6 | |||||||||||
Cumulative-effect adjustment from adoption of ASU 2016-01, Financial Instruments | — | — | 140.0 | — | |||||||||||
Cumulative-effect adjustment from adoption of ASU 2014-09, Revenue | — | — | 3.4 | — | |||||||||||
Net earnings (loss) | (15.4 | ) | 18.7 | 13.7 | 30.9 | ||||||||||
Dividends | (3.0 | ) | (2.9 | ) | (5.9 | ) | (5.8 | ) | |||||||
Balance at end of period | 1,134.8 | 948.7 | 1,134.8 | 948.7 | |||||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
Balance at beginning of period | 4.8 | 83.3 | 130.8 | 58.7 | |||||||||||
Cumulative-effect adjustment from adoption of ASU 2016-01, Financial Instruments | — | — | (140.0 | ) | — | ||||||||||
Other comprehensive income (loss), net of tax | (14.8 | ) | 7.8 | (0.8 | ) | 32.4 | |||||||||
Balance at end of period | (10.0 | ) | 91.1 | (10.0 | ) | 91.1 | |||||||||
Stockholders’ Equity at end of period | $ | 1,160.9 | $ | 1,073.4 | $ | 1,160.9 | $ | 1,073.4 |
26 Weeks Ended | |||||||
July 1, 2018 | July 2, 2017 | ||||||
Cash flows from operating activities: | |||||||
Net earnings | $ | 13.7 | $ | 30.9 | |||
Noncash adjustments: | |||||||
Depreciation and amortization | 12.9 | 10.6 | |||||
Provision for bad debts | 1.5 | 2.9 | |||||
Stock-based compensation | 4.7 | 4.2 | |||||
Loss on investment in Persol Holdings | 28.8 | — | |||||
Other, net | (2.6 | ) | (0.5 | ) | |||
Changes in operating assets and liabilities | (25.8 | ) | (3.7 | ) | |||
Net cash from operating activities | 33.2 | 44.4 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (10.3 | ) | (7.3 | ) | |||
Other investing activities | (0.6 | ) | — | ||||
Net cash used in investing activities | (10.9 | ) | (7.3 | ) | |||
Cash flows from financing activities: | |||||||
Net change in short-term borrowings | (8.4 | ) | 0.7 | ||||
Dividend payments | (5.9 | ) | (5.8 | ) | |||
Payments of tax withholding for stock awards | (6.2 | ) | (0.5 | ) | |||
Other financing activities | — | (0.1 | ) | ||||
Net cash used in financing activities | (20.5 | ) | (5.7 | ) | |||
Effect of exchange rates on cash, cash equivalents and restricted cash | (0.1 | ) | (0.2 | ) | |||
Net change in cash, cash equivalents and restricted cash | 1.7 | 31.2 | |||||
Cash, cash equivalents and restricted cash at beginning of period | 36.9 | 34.3 | |||||
Cash, cash equivalents and restricted cash at end of period (1) | $ | 38.6 | $ | 65.5 |
Reconciliation of cash, cash equivalents and restricted cash: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 33.9 | $ | 60.8 | |||
Restricted cash included in prepaid expenses and other current assets | 0.3 | 0.3 | |||||
Noncurrent assets: | |||||||
Restricted cash included in other assets | 4.4 | 4.4 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 38.6 | $ | 65.5 |
Second Quarter | June Year to Date | |||||||
2018 | 2018 | |||||||
Branch-Delivered Staffing | ||||||||
Americas Staffing | ||||||||
Staffing Solutions | ||||||||
Commercial | $ | 414.5 | $ | 812.9 | ||||
Educational Staffing | 110.0 | 240.1 | ||||||
Professional/Technical | 70.1 | 137.5 | ||||||
Permanent Placement | 9.4 | 17.8 | ||||||
Total Americas Staffing | 604.0 | 1,208.3 | ||||||
International Staffing | ||||||||
Staffing Solutions | 279.1 | 556.0 | ||||||
Permanent Placement | 7.5 | 15.3 | ||||||
Total International Staffing | 286.6 | 571.3 | ||||||
Global Talent Solutions | ||||||||
Talent Fulfillment | ||||||||
Staffing Solutions | 288.3 | 572.5 | ||||||
Permanent Placement | 0.4 | 0.8 | ||||||
Talent Solutions | 88.9 | 173.9 | ||||||
Total Talent Fulfillment | 377.6 | 747.2 | ||||||
Outcome-Based Services | 123.1 | 239.3 | ||||||
Total Global Talent Solutions | 500.7 | 986.5 | ||||||
Total Intersegment | (4.4 | ) | (9.3 | ) | ||||
Total Revenue from Services | $ | 1,386.9 | $ | 2,756.8 |
Second Quarter | June Year to Date | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Americas | ||||||||||||||||
United States | $ | 981.2 | $ | 970.1 | $ | 1,955.9 | $ | 1,925.7 | ||||||||
Canada | 37.0 | 34.6 | 70.6 | 68.7 | ||||||||||||
Mexico | 30.0 | 28.3 | 60.4 | 52.1 | ||||||||||||
Puerto Rico | 26.2 | 17.6 | 46.0 | 35.3 | ||||||||||||
Brazil | 9.0 | 12.7 | 18.5 | 26.0 | ||||||||||||
Total Americas | 1,083.4 | 1,063.3 | 2,151.4 | 2,107.8 | ||||||||||||
EMEA | ||||||||||||||||
France | 72.0 | 68.3 | 143.9 | 129.1 | ||||||||||||
Switzerland | 52.8 | 53.9 | 102.5 | 102.2 | ||||||||||||
Portugal | 51.2 | 41.7 | 102.3 | 78.0 | ||||||||||||
United Kingdom | 28.5 | 20.8 | 57.5 | 41.0 | ||||||||||||
Russia | 25.6 | 24.0 | 51.7 | 46.8 | ||||||||||||
Italy | 19.3 | 15.7 | 39.8 | 29.4 | ||||||||||||
Germany | 14.8 | 14.6 | 31.2 | 27.8 | ||||||||||||
Ireland | 11.7 | 7.4 | 23.0 | 15.1 | ||||||||||||
Norway | 9.2 | 8.4 | 17.6 | 16.0 | ||||||||||||
Other | 12.8 | 11.0 | 25.2 | 21.4 | ||||||||||||
Total EMEA | 297.9 | 265.8 | 594.7 | 506.8 | ||||||||||||
Total APAC | 5.6 | 4.5 | 10.7 | 8.7 | ||||||||||||
Total Kelly Services, Inc. | $ | 1,386.9 | $ | 1,333.6 | $ | 2,756.8 | $ | 2,623.3 |
Fair Value Measurements on a Recurring Basis As of Second Quarter-End 2018 | ||||||||||||||||
Description | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
(In millions of dollars) | ||||||||||||||||
Money market funds | $ | 13.6 | $ | 13.6 | $ | — | $ | — | ||||||||
Investment in Persol Holdings | 203.2 | 203.2 | — | — | ||||||||||||
Total assets at fair value | $ | 216.8 | $ | 216.8 | $ | — | $ | — |
Fair Value Measurements on a Recurring Basis As of Year-End 2017 | ||||||||||||||||
Description | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
(In millions of dollars) | ||||||||||||||||
Money market funds | $ | 4.3 | $ | 4.3 | $ | — | $ | — | ||||||||
Investment in Persol Holdings | 228.1 | 228.1 | — | — | ||||||||||||
Total assets at fair value | $ | 232.4 | $ | 232.4 | $ | — | $ | — |
As of Year-End 2017 | Additions to Goodwill | As of Second Quarter-End 2018 | |||||||||
(In millions of dollars) | |||||||||||
Americas Staffing | $ | 44.6 | $ | 0.2 | $ | 44.8 | |||||
Global Talent Solutions | 62.5 | — | 62.5 | ||||||||
International Staffing | — | — | — | ||||||||
$ | 107.1 | $ | 0.2 | $ | 107.3 |
Second Quarter | June Year to Date | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(In millions of dollars) | |||||||||||||||
Foreign currency translation adjustments: | |||||||||||||||
Beginning balance | $ | 7.1 | $ | (17.6 | ) | $ | (6.9 | ) | $ | (23.3 | ) | ||||
Other comprehensive income (loss) before classifications | (14.8 | ) | 6.9 | (0.8 | ) | 12.6 | |||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | — | — | |||||||||||
Net current-period other comprehensive income (loss) | (14.8 | ) | 6.9 | (0.8 | ) | 12.6 | |||||||||
Ending balance | (7.7 | ) | (10.7 | ) | (7.7 | ) | (10.7 | ) | |||||||
Unrealized gains and losses on investment: | |||||||||||||||
Beginning balance | — | 102.7 | 140.0 | 83.8 | |||||||||||
Cumulative-effect adjustment from adoption of ASU 2016-01, Financial Instruments | — | — | (140.0 | ) | — | ||||||||||
Other comprehensive income (loss) before classifications | — | 0.9 | — | 19.8 | |||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | — | — | |||||||||||
Net current-period other comprehensive income (loss) | — | 0.9 | (140.0 | ) | 19.8 | ||||||||||
Ending balance | — | 103.6 | — | 103.6 | |||||||||||
Pension liability adjustments: | |||||||||||||||
Beginning balance | (2.3 | ) | (1.8 | ) | (2.3 | ) | (1.8 | ) | |||||||
Other comprehensive income (loss) before classifications | — | — | — | — | |||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | — | — | |||||||||||
Net current-period other comprehensive income (loss) | — | — | — | — | |||||||||||
Ending balance | (2.3 | ) | (1.8 | ) | (2.3 | ) | (1.8 | ) | |||||||
Total accumulated other comprehensive income (loss) | $ | (10.0 | ) | $ | 91.1 | $ | (10.0 | ) | $ | 91.1 |
Second Quarter | June Year to Date | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net earnings (loss) | $ | (15.4 | ) | $ | 18.7 | $ | 13.7 | $ | 30.9 | ||||||
Less: earnings allocated to participating securities | — | (0.3 | ) | (0.2 | ) | (0.6 | ) | ||||||||
Net earnings (loss) available to common shareholders | $ | (15.4 | ) | $ | 18.4 | $ | 13.5 | $ | 30.3 | ||||||
Average shares outstanding (millions): | |||||||||||||||
Basic | 38.8 | 38.3 | 38.7 | 38.3 | |||||||||||
Dilutive share awards | — | 0.5 | 0.1 | 0.4 | |||||||||||
Diluted | 38.8 | 38.8 | 38.8 | 38.7 | |||||||||||
Basic earnings (loss) per share | $ | (0.40 | ) | $ | 0.48 | $ | 0.35 | $ | 0.79 | ||||||
Diluted earnings (loss) per share | $ | (0.40 | ) | $ | 0.47 | $ | 0.35 | $ | 0.78 |
Financial Measure Performance Shares | TSR Performance Shares | ||||||||||||
Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | ||||||||||
Nonvested at year-end 2017 | 592 | $ | 22.32 | 240 | $ | 18.17 | |||||||
Granted | 163 | 28.64 | 59 | 31.38 | |||||||||
Vested | (229 | ) | 16.62 | (109 | ) | 16.01 | |||||||
Forfeited | (20 | ) | 27.78 | (8 | ) | 22.75 | |||||||
Nonvested at second quarter-end 2018 | 506 | $ | 24.67 | 182 | $ | 23.54 |
Shares | Weighted Average Grant Date Fair Value | |||||
Nonvested at year-end 2017 | 440 | $ | 18.76 | |||
Granted | 146 | 29.17 | ||||
Vested | (96 | ) | 19.61 | |||
Forfeited | (26 | ) | 20.07 | |||
Nonvested at second quarter-end 2018 | 464 | $ | 21.79 |
Second Quarter | June Year to Date | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(In millions of dollars) | |||||||||||||||
Interest income | $ | 0.2 | $ | 0.2 | $ | 0.4 | $ | 0.3 | |||||||
Interest expense | (0.8 | ) | (0.6 | ) | (1.6 | ) | (1.1 | ) | |||||||
Dividend income | 0.8 | 0.7 | 0.8 | 0.7 | |||||||||||
Foreign exchange gain (loss) | 0.4 | (0.8 | ) | (0.7 | ) | (2.0 | ) | ||||||||
Other income (expense), net | $ | 0.6 | $ | (0.5 | ) | $ | (1.1 | ) | $ | (2.1 | ) |
Second Quarter | June Year to Date | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(In millions of dollars) | |||||||||||||||
Revenue from Services: | |||||||||||||||
Americas Staffing | $ | 604.0 | $ | 575.6 | $ | 1,208.3 | $ | 1,148.7 | |||||||
Global Talent Solutions | 500.7 | 505.5 | 986.5 | 992.8 | |||||||||||
International Staffing | 286.6 | 256.8 | 571.3 | 490.4 | |||||||||||
Less: Intersegment revenue | (4.4 | ) | (4.3 | ) | (9.3 | ) | (8.6 | ) | |||||||
Consolidated Total | $ | 1,386.9 | $ | 1,333.6 | $ | 2,756.8 | $ | 2,623.3 |
Second Quarter | June Year to Date | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(In millions of dollars) | |||||||||||||||
Earnings from Operations: | |||||||||||||||
Americas Staffing gross profit | $ | 108.5 | $ | 103.8 | $ | 216.5 | $ | 209.1 | |||||||
Americas Staffing SG&A expenses | (90.7 | ) | (83.4 | ) | (182.6 | ) | (167.5 | ) | |||||||
Americas Staffing Earnings from Operations | 17.8 | 20.4 | 33.9 | 41.6 | |||||||||||
Global Talent Solutions gross profit | 92.7 | 88.7 | 184.5 | 179.2 | |||||||||||
Global Talent Solutions SG&A expenses | (75.0 | ) | (73.4 | ) | (150.8 | ) | (148.6 | ) | |||||||
Global Talent Solutions Earnings from Operations | 17.7 | 15.3 | 33.7 | 30.6 | |||||||||||
International Staffing gross profit | 39.9 | 36.8 | 79.0 | 73.2 | |||||||||||
International Staffing SG&A expenses | (33.5 | ) | (32.7 | ) | (67.6 | ) | (63.9 | ) | |||||||
International Staffing Earnings from Operations | 6.4 | 4.1 | 11.4 | 9.3 | |||||||||||
Less: Intersegment gross profit | (0.6 | ) | (0.5 | ) | (1.3 | ) | (1.1 | ) | |||||||
Less: Intersegment SG&A expenses | 0.6 | 0.5 | 1.3 | 1.1 | |||||||||||
Net Intersegment Activity | — | — | — | — | |||||||||||
Corporate | (21.5 | ) | (19.5 | ) | (46.6 | ) | (44.8 | ) | |||||||
Consolidated Total | 20.4 | 20.3 | 32.4 | 36.7 | |||||||||||
Loss on investment in Persol Holdings | (52.5 | ) | — | (28.8 | ) | — | |||||||||
Other income (expense), Net | 0.6 | (0.5 | ) | (1.1 | ) | (2.1 | ) | ||||||||
Earnings (loss) before taxes and equity in net earnings (loss) of affiliate | $ | (31.5 | ) | $ | 19.8 | $ | 2.5 | $ | 34.6 |
• | Continue to build our core strengths in staffing in key markets where we have scale or specialization; |
• | Maintain our position as a market-leading provider of talent management solutions; and |
• | Lower our costs through deployment of technology and efficient service delivery models. |
• | Revenue grew 4.0%, or 3.0% in constant currency |
• | Earnings from operations for the second quarter of 2018 totaled $20.4 million, compared to $20.3 million in 2017 |
• | The gross profit rate increased 10 basis points and we delivered gross profit growth of $12 million in the second quarter of 2018 |
• | Conversion rate, or return on gross profit, was 8.5%, compared to the 2017 conversion rate of 8.9% |
• | During the second quarter, cash from operating activities and free cash flow generation increased from the first quarter |
• | Grow higher margin professional and technical specialty and outsourced solutions, creating a more balanced portfolio that yields benefits from an improved mix; |
• | Build on our core strength in staffing; |
• | Accelerate our ongoing investments in specialty solutions with significant growth opportunities, such as our acquisition of Teachers On Call to augment our Kelly Educational Staffing business in the U.S.; |
• | Deliver structural improvements in costs through investments in technology and process automation that ensure a return from our delivery infrastructure and, as a result; |
• | Improve our conversion rate. |
2018 | 2017 | Change | CC Change | |||||||||||
Revenue from services | $ | 1,386.9 | $ | 1,333.6 | 4.0 | % | 3.0 | % | ||||||
Gross profit | 240.5 | 228.8 | 5.1 | 4.2 | ||||||||||
Total SG&A expenses | 220.1 | 208.5 | 5.6 | 4.9 | ||||||||||
Earnings from operations | 20.4 | 20.3 | 0.1 | |||||||||||
Permanent placement income (included in revenue from services) | 17.3 | 13.7 | 25.7 | 24.1 | ||||||||||
Gross profit rate | 17.3 | % | 17.2 | % | 0.1 | pts. | ||||||||
Conversion rate | 8.5 | 8.9 | (0.4 | ) | ||||||||||
Return on sales | 1.5 | 1.5 | — |
2018 | 2017 | Change | CC Change | |||||||||||
Revenue from services | $ | 604.0 | $ | 575.6 | 4.9 | % | 5.2 | % | ||||||
Gross profit | 108.5 | 103.8 | 4.5 | 4.7 | ||||||||||
Total SG&A expenses | 90.7 | 83.4 | 8.7 | 8.9 | ||||||||||
Earnings from operations | 17.8 | 20.4 | (12.8 | ) | ||||||||||
Gross profit rate | 18.0 | % | 18.0 | % | — | pts. | ||||||||
Conversion rate | 16.4 | 19.7 | (3.3 | ) | ||||||||||
Return on sales | 2.9 | 3.5 | (0.6 | ) |
2018 | 2017 | Change | CC Change | |||||||||||
Revenue from services | $ | 500.7 | $ | 505.5 | (0.9 | )% | (1.2 | )% | ||||||
Gross profit | 92.7 | 88.7 | 4.5 | 4.0 | ||||||||||
Total SG&A expenses | 75.0 | 73.4 | 2.2 | 1.8 | ||||||||||
Earnings from operations | 17.7 | 15.3 | 15.9 | |||||||||||
Gross profit rate | 18.5 | % | 17.5 | % | 1.0 | pts. | ||||||||
Conversion rate | 19.1 | 17.2 | 1.9 | |||||||||||
Return on sales | 3.5 | 3.0 | 0.5 |
2018 | 2017 | Change | CC Change | |||||||||||
Revenue from services | $ | 286.6 | $ | 256.8 | 11.6 | % | 6.6 | % | ||||||
Gross profit | 39.9 | 36.8 | 8.3 | 3.5 | ||||||||||
Total SG&A expenses | 33.5 | 32.7 | 2.4 | (1.3 | ) | |||||||||
Earnings from operations | 6.4 | 4.1 | 54.2 | |||||||||||
Gross profit rate | 13.9 | % | 14.3 | % | (0.4 | ) | pts. | |||||||
Conversion rate | 16.0 | 11.2 | 4.8 | |||||||||||
Return on sales | 2.2 | 1.6 | 0.6 |
2018 | 2017 | Change | CC Change | |||||||||||
Revenue from services | $ | 2,756.8 | $ | 2,623.3 | 5.1 | % | 3.2 | % | ||||||
Gross profit | 478.7 | 460.4 | 4.0 | 2.3 | ||||||||||
SG&A expenses excluding restructuring charges | 446.3 | 421.3 | 5.9 | 4.5 | ||||||||||
Restructuring charges | — | 2.4 | (100.0 | ) | (100.0 | ) | ||||||||
Total SG&A expenses | 446.3 | 423.7 | 5.3 | 3.9 | ||||||||||
Earnings from operations | 32.4 | 36.7 | (11.7 | ) | ||||||||||
Earnings from operations excluding restructuring charges | 32.4 | 39.1 | (17.1 | ) | ||||||||||
Permanent placement income (included in revenue from services) | 33.9 | 27.2 | 24.4 | 20.6 | ||||||||||
Gross profit rate | 17.4 | % | 17.6 | % | (0.2 | ) | pts. | |||||||
Conversion rate | 6.8 | 8.0 | (1.2 | ) | ||||||||||
Conversion rate excluding restructuring charges | 6.8 | 8.5 | (1.7 | ) | ||||||||||
Return on sales | 1.2 | 1.4 | (0.2 | ) | ||||||||||
Return on sales excluding restructuring charges | 1.2 | 1.5 | (0.3 | ) |
2018 | 2017 | Change | CC Change | |||||||||||
Revenue from services | $ | 1,208.3 | $ | 1,148.7 | 5.2 | % | 5.1 | % | ||||||
Gross profit | 216.5 | 209.1 | 3.6 | 3.5 | ||||||||||
SG&A expenses excluding restructuring charges | 182.6 | 167.1 | 9.3 | 9.2 | ||||||||||
Restructuring charges | — | 0.4 | (100.0 | ) | (100.0 | ) | ||||||||
Total SG&A expenses | 182.6 | 167.5 | 9.1 | 9.0 | ||||||||||
Earnings from operations | 33.9 | 41.6 | (18.6 | ) | ||||||||||
Earnings from operations excluding restructuring charges | 33.9 | 42.0 | (19.3 | ) | ||||||||||
Gross profit rate | 17.9 | % | 18.2 | % | (0.3 | ) | pts. | |||||||
Conversion rate | 15.6 | 19.9 | (4.3 | ) | ||||||||||
Conversion rate excluding restructuring charges | 15.6 | 20.1 | (4.5 | ) | ||||||||||
Return on sales | 2.8 | 3.6 | (0.8 | ) | ||||||||||
Return on sales excluding restructuring charges | 2.8 | 3.7 | (0.9 | ) |
2018 | 2017 | Change | CC Change | |||||||||||
Revenue from services | $ | 986.5 | $ | 992.8 | (0.6 | )% | (1.0 | )% | ||||||
Gross profit | 184.5 | 179.2 | 3.0 | 2.2 | ||||||||||
SG&A expenses excluding restructuring charges | 150.8 | 146.6 | 2.9 | 2.0 | ||||||||||
Restructuring charges | — | 2.0 | (100.0 | ) | (100.0 | ) | ||||||||
Total SG&A expenses | 150.8 | 148.6 | 1.5 | 0.6 | ||||||||||
Earnings from operations | 33.7 | 30.6 | 10.4 | |||||||||||
Earnings from operations excluding restructuring charges | 33.7 | 32.6 | 3.7 | |||||||||||
Gross profit rate | 18.7 | % | 18.0 | % | 0.7 | pts. | ||||||||
Conversion rate | 18.3 | 17.1 | 1.2 | |||||||||||
Conversion rate excluding restructuring charges | 18.3 | 18.2 | 0.1 | |||||||||||
Return on sales | 3.4 | 3.1 | 0.3 | |||||||||||
Return on sales excluding restructuring charges | 3.4 | 3.3 | 0.1 |
2018 | 2017 | Change | CC Change | |||||||||||
Revenue from services | $ | 571.3 | $ | 490.4 | 16.5 | % | 7.7 | % | ||||||
Gross profit | 79.0 | 73.2 | 7.8 | (0.3 | ) | |||||||||
Total SG&A expenses | 67.6 | 63.9 | 5.8 | (1.4 | ) | |||||||||
Earnings from operations | 11.4 | 9.3 | 21.2 | |||||||||||
Gross profit rate | 13.8 | % | 14.9 | % | (1.1 | ) | pts. | |||||||
Conversion rate | 14.4 | 12.8 | 1.6 | |||||||||||
Return on sales | 2.0 | 1.9 | 0.1 |
Period | Total Number of Shares (or Units) Purchased | Average Price Paid per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs (in millions of dollars) | ||||||||||
April 2, 2018 through May 6, 2018 | 1,389 | $ | 30.05 | — | $ | — | ||||||||
May 7, 2018 through June 3, 2018 | 2,172 | 24.50 | — | $ | — | |||||||||
June 4, 2018 through July 1, 2018 | 458 | 22.45 | — | $ | — | |||||||||
Total | 4,019 | $ | 26.18 | — |
KELLY SERVICES, INC. | |
Date: August 8, 2018 | |
/s/ Olivier G. Thirot | |
Olivier G. Thirot | |
Executive Vice President and | |
Chief Financial Officer | |
(Principal Financial Officer) |
Date: August 8, 2018 | |
/s/ Laura S. Lockhart | |
Laura S. Lockhart | |
Vice President, Corporate Controller | |
and Chief Accounting Officer | |
(Principal Accounting Officer) |
Exhibit No. | Description | |
Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act, as amended. | ||
Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act, as amended. | ||
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
1. | I have reviewed this quarterly report on Form 10-Q of Kelly Services, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: August 8, 2018 | ||||
/s/ George S. Corona | ||||
George S. Corona | ||||
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Kelly Services, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: August 8, 2018 | ||||
/s/ Olivier G. Thirot | ||||
Olivier G. Thirot | ||||
Executive Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 8, 2018 | ||||
/s/ George S. Corona | ||||
George S. Corona | ||||
President and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 8, 2018 | ||||
/s/ Olivier G. Thirot | ||||
Olivier G. Thirot | ||||
Executive Vice President and Chief Financial Officer |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jul. 01, 2018 |
Jul. 30, 2018 |
|
Document Information [Line Items] | ||
Entity Registrant Name | KELLY SERVICES INC | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-30 | |
Amendment Flag | false | |
Entity Central Index Key | 0000055135 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Jul. 01, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 35,372,584 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 3,431,972 |
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2018 |
Jul. 02, 2017 |
Jul. 01, 2018 |
Jul. 02, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net earnings (loss) | $ (15.4) | $ 18.7 | $ 13.7 | $ 30.9 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments, net of tax expense of $0.6, $0.0, $0.6 and $0.1, respectively | (14.8) | 6.9 | (0.8) | 12.6 |
Less: Reclassification adjustments included in net earnings | 0.0 | 0.0 | 0.0 | 0.0 |
Foreign currency translation adjustments | (14.8) | 6.9 | (0.8) | 12.6 |
Unrealized gains on investment, net of tax expense of $0.4 and $9.0 in 2017, respectively | 0.0 | 0.9 | 0.0 | 19.8 |
Other comprehensive income (loss) | (14.8) | 7.8 | (0.8) | 32.4 |
Comprehensive income (loss) | $ (30.2) | $ 26.5 | $ 12.9 | $ 63.3 |
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2018 |
Jul. 02, 2017 |
Jul. 01, 2018 |
Jul. 02, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustments, tax expense (benefit) | $ 0.6 | $ 0.0 | $ 0.6 | $ 0.1 |
Unrealized gains (losses) on investments, tax expense (benefit) | $ 0.0 | $ 0.4 | $ 0.0 | $ 9.0 |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Millions, $ in Millions |
Jul. 01, 2018 |
Dec. 31, 2017 |
---|---|---|
Allowance for trade accounts receivables | $ 13.1 | $ 12.9 |
Class A Common Stock | ||
Capital stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
Common stock, shares issued (in shares) | 36.6 | 36.6 |
Treasury stock, common stock (in shares) | 1.3 | 1.7 |
Class B Common Stock | ||
Capital stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
Common stock, shares issued (in shares) | 3.5 | 3.5 |
Basis of Presentation |
6 Months Ended |
---|---|
Jul. 01, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements of Kelly Services, Inc. (the “Company,” “Kelly,” “we” or “us”) have been prepared in accordance with Rule 10-01 of Regulation S-X and do not include all the information and notes required by generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair statement of the results of the interim periods, have been made. The results of operations for such interim periods are not necessarily indicative of results of operations for a full year. The unaudited consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal year ended December 31, 2017, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 20, 2018 (the 2017 consolidated financial statements). The Company’s second fiscal quarter ended on July 1, 2018 (2018) and July 2, 2017 (2017), each of which contained 13 weeks. The corresponding June year to date periods for 2018 and 2017 each contained 26 weeks. Certain reclassifications have been made to the prior years’ consolidated financial statements to conform to the current year’s presentation. |
Revenue |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue Adoption of ASC Topic 606, Revenue from Contracts with Customers On January 1, 2018, we adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. We recorded a net increase to opening earnings invested in the business of $3.4 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The impact is primarily driven by the deferral of contract costs related to our customer contracts of $5.2 million, partially offset by deferring revenue billed at a point in time for services performed over time of $0.6 million and a deferred tax liability of $1.2 million. As of and for the three and six month periods ended July 1, 2018, the consolidated financial statements were not materially impacted as a result of the application of Topic 606 compared to Topic 605. Revenue Recognition Revenues are recognized when control of the promised services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled, to in exchange for those services. Our revenues are recorded net of any sales, value added, or similar taxes collected from our customers. We generate revenue from: the hourly sales of services by our temporary employees to customers (“staffing solutions” revenue), the recruiting of permanent employees for our customers (“permanent placement” revenue), and through our talent fulfillment and outcome-based activities (“talent solutions” and “outcome-based services” revenue). We record revenues from sales of services and the related direct costs in accordance with the accounting guidance on reporting revenue gross as a principal versus net as an agent. When Kelly is the principal, we demonstrate control over the service by being the employer of record for the individuals performing the service, by being primarily responsible to our customers and by having a level of discretion in establishing pricing in which the gross amount is recorded as revenues. When Kelly arranges for other contingent labor suppliers and/or service providers to perform services for the customer, we do not control those services before they are transferred, and therefore, the amounts billed to our customers are net of the amounts paid to the secondary suppliers/service providers and the net amount is recorded as revenues. Staffing Solutions Revenue Staffing solutions can be branch-delivered (Americas and EMEA regions) or centrally-delivered (within Global Talent Solutions (“GTS”)). Our Americas Staffing segment is organized to deliver services in a number of specialty staffing solutions, which are summarized as: commercial, specialized professional/technical (“PT”) and educational staffing. Staffing solutions contracts are short-term in nature. Billings are generally negotiated and invoiced on a per-hour or per-unit basis as the temporary staffing services are transferred to the customer. Revenue from the majority of our staffing solutions services continues to be recognized over time as the customer simultaneously receives and consumes the services we provide. We have applied the practical expedient to recognize revenue for these services over the term of the agreement in proportion to the amount we have the right to invoice the customer. Permanent Placement Revenue Permanent placement solutions can be branch-delivered (Americas and EMEA regions) or centrally-delivered (within GTS). Our permanent placement revenue is recorded at the point in time the permanent placement candidate begins full-time employment. On the candidate start date, the customer accepts the candidate and can direct the use of the candidate as well as obtains the significant risk and rewards of the candidate. As such, we consider this the point the control transfers to the customer. Talent Solutions and Outcome-Based Services Revenue In addition to centrally-delivered staffing services, our GTS segment also includes talent solutions (contingent workforce outsourcing “CWO”, payroll process outsourcing “PPO” and recruitment process outsourcing “RPO”) and outcome-based services (business process outsourcing “BPO”, KellyConnect, career transition/outplacement services and talent advisory services). Billings are generally negotiated and invoiced on a measure of time (hours, weeks, months) or per-unit basis for our services performed. We continue to recognize revenue from the majority of our talent solutions services and our outcome-based services over time as the customer simultaneously receives and consumes the services we provide. We have applied the practical expedient to recognize revenue for these services over the term of the agreement in proportion to the amount we have the right to invoice the customer. The following table presents our segment revenues disaggregated by service type (in millions):
Our operations are subject to different economic and regulatory environments depending on geographic location. Our GTS segment operates in Americas, EMEA and APAC regions. In the second quarter of 2018 and 2017, GTS made up $483.9 million and $492.0 million in total Americas, respectively, $11.2 million and $9.0 million in total EMEA, respectively, and the entire balance in APAC. For June year to date in 2018 and 2017, GTS made up $952.5 million and $967.7 million in total Americas, respectively, $23.3 million and $16.4 million in total EMEA, respectively, and the entire balance in APAC. The below table presents our revenues disaggregated by geography (in millions):
Variable Consideration Certain customers may receive cash-based incentives or credits, which are accounted for as a form of variable consideration. We estimate these amounts based on the expected or likely amount to be provided to customers and reduce revenues recognized to the extent that it is probable that a significant reversal of such adjustment will not occur. Provisions for sales allowances (billing adjustments related to errors, service issues and compromises on billing disputes), based on historical experience, are recognized at the time the related sale is recognized as a reduction in revenue from services. Payment Terms Customer payments are typically due within 60 days of invoicing, but may be shorter or longer depending on contract terms. Management does not assess whether a contract has a significant financing component if the expectation at contract inception is that the period between payment by the customer and the transfer of the services to the customer will be less than one year. We do not have any significant financing components or extended payment terms. Deferred Revenue Items which are billed to the customer at a point in time, rather than billed over time as the services are delivered to the customer, are assessed for potential revenue deferral. At this time, the balance of the contract liability as well as the amount of revenue recognized in the reporting period that was included in the deferred revenue balance at the beginning of the period is not material. Deferred Costs Sales commissions paid at initial contract inception and upon contract renewal by our sales team are considered incremental and recoverable costs of obtaining a contract with a customer. The sales commissions (and related fringe benefits such as taxes and benefits) are deferred and then amortized on a straight-line basis over an appropriate period of benefit that we have determined to be contract duration. We determined the period of benefit by taking into consideration our customer contracts and other relevant factors. Anticipated renewal periods are not included in the amortization period of the initial commission. Amortization expense is included in selling, general and administrative (“SG&A”) expenses on the consolidated statement of earnings. As a practical expedient, sales commissions with amortization periods of 12 months or less are expensed as incurred. These costs are recorded in SG&A expenses on the consolidated statement of earnings. Deferred sales commissions, which are included in other assets on the consolidated balance sheet, were $2.6 million as of second quarter-end 2018 and $3.2 million as of January 1, 2018. Amortization expense for the deferred costs was $0.4 million and $0.8 million for the second quarter and June year to date 2018, respectively. There was no impairment loss in relation to the costs capitalized for the second quarter and June year to date 2018. Occasionally, fulfillment costs are incurred after obtaining a contract in order to generate a resource that will be used to provide our services. These costs are considered incremental and recoverable costs to fulfill our contract with the customer. These costs to fulfill a contract are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to be the average length of assignment of the employees. We determined the period of benefit by taking into consideration our customer contracts, attrition rates and other relevant factors. Amortization expense is included in SG&A expenses on the consolidated statement of earnings. Deferred fulfillment costs, which are included in prepaid expenses and other current assets on the consolidated balance sheet, were $3.4 million as of second quarter-end 2018 and $2.0 million as of January 1, 2018. Amortization expense for the deferred costs was $2.5 million and $4.6 million for the second quarter and June year to date 2018, respectively. There was no impairment loss in relation to the costs capitalized for the second quarter and June year to date 2018. Unsatisfied Performance Obligations The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. |
Acquisition |
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Jul. 01, 2018 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition On September 5, 2017, Kelly Services USA, LLC, a wholly owned subsidiary of the Company, acquired 100% of the issued and outstanding shares of Teachers On Call, Inc. (“TOC”), an educational staffing firm in the U.S. for a purchase price of $41.0 million. Under terms of the purchase agreement, the purchase price was adjusted for cash held by TOC at the closing date less an estimated working capital adjustment resulting in the Company paying cash of $39.0 million at closing. In the first quarter of 2018, the Company paid a working capital adjustment of $0.2 million, resulting in an increase of goodwill (see Goodwill footnote). The purchase price allocation for this acquisition is preliminary and could change, but will be finalized in September, 2018. Goodwill generated from this acquisition is primarily attributable to expected synergies from combining operations and expanding market potential, and is assigned to the Americas Staffing reporting unit. The amount of goodwill expected to be deductible for tax purposes is approximately $18.8 million as of the second quarter-end 2018. An indemnification asset of $2.8 million was recognized as of the acquisition date related to pre-acquisition tax liabilities. As of the second quarter end 2018, the indemnification asset is $0.1 million with the change driven by cash received from the seller to pay pre-acquisition tax liabilities. |
Investment in Persol Holdings Investment in Persol Holdings |
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Investment in Persol Holdings [Abstract] | |
Investment in Persol Holdings | Investment in Persol Holdings The Company has a yen-denominated investment in the common stock of Persol Holdings, the Company’s joint venture partner in PersolKelly Asia Pacific. As our investment is a noncontrolling interest in Persol Holdings, this investment is recorded at fair value based on the quoted market price of Persol Holdings stock on the Tokyo Stock Exchange as of the period end (see Fair Value Measurements footnote). The Company adopted ASU 2016-01 and as a result, effective January 1, 2018, all changes in fair value on the investment are recognized in net earnings which previously were recorded in other comprehensive income. Accordingly, for the second quarter-end and June year to date 2018, a loss on the investment of $52.5 million and $28.8 million, respectively, was recorded entirely in the Loss on Investment in Persol Holdings in the consolidated statements of earnings. During the second quarter-end and June year to date 2017, an unrealized gain, net of tax, of $0.9 million and $19.8 million, respectively, was recorded in other comprehensive income, and in accumulated other comprehensive income, a component of stockholders’ equity. A cumulative catch-up adjustment of the prior net unrealized gains previously recorded in other comprehensive income, and in accumulated other comprehensive income, a component of stockholders’ equity, was recorded in earnings invested in the business as of January 1, 2018 for $140.0 million, net of $69.9 million of taxes. |
Investment in Equity Affiliate |
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Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Equity Affiliate | Investment in Equity Affiliate The Company has a 49% ownership interest in PersolKelly Asia Pacific. The operating results of the Company’s interest in PersolKelly Asia Pacific are accounted for on a one-quarter lag under the equity method and are reported in the equity in net earnings (loss) of affiliate in the consolidated statement of earnings. This investment is evaluated for indicators of impairment on a periodic basis or whenever events or circumstances indicate the carrying amount may be other-than-temporarily impaired. If we conclude that there is an other-than-temporary impairment of this equity investment, we will adjust the carrying amount of the investment to the current fair value. The investment in equity affiliate on the Company’s consolidated balance sheet totaled $122.0 million as of second quarter-end 2018 and $117.4 million as of year-end 2017. The net amount due to PersolKelly Asia Pacific, a related party, was $1.0 million as of the second quarter-end 2018 and $2.3 million as of year-end 2017. The amount included in trade accounts payable for staffing services provided by PersolKelly Asia Pacific as a supplier to CWO programs was $1.7 million as of second quarter-end 2018 and $2.5 million as of year-end 2017. |
Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements Trade accounts receivable, short-term borrowings, accounts payable, accrued liabilities and accrued payroll and related taxes approximate their fair values due to the short-term maturities of these assets and liabilities. Assets Measured at Fair Value on a Recurring Basis The following tables present assets measured at fair value on a recurring basis on the consolidated balance sheet as of second quarter-end 2018 and year-end 2017 by fair value hierarchy level, as described below. Level 1 measurements consist of unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 measurements include quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 3 measurements include significant unobservable inputs.
Money market funds as of second quarter-end 2018 represents investments in money market accounts, of which $9.3 million is included in cash and equivalents on the consolidated balance sheet and $4.3 million is restricted as to use and included in other assets on the consolidated balance sheet. Money market funds as of year-end 2017 represents investments in money market accounts, all of which are restricted as to use and included as restricted cash within other assets on the consolidated balance sheet. The money market funds that are restricted as to use account for the majority of our restricted cash balance and represents cash balances that are required to be maintained to fund disability claims in California. The valuations of money market funds were based on quoted market prices of those accounts as of the respective period end. The valuation of the investment in Persol Holdings is based on the quoted market price of Persol Holdings stock on the Tokyo Stock Exchange as of the period end. Effective January 1, 2018, the changes in fair value of this investment are recorded in the consolidated statements of earnings (see Investment in Persol Holdings footnote). In 2017, changes in fair value were recorded in other comprehensive income, and in accumulated other comprehensive income, a component of stockholders’ equity. The cost of this yen-denominated investment, which fluctuates based on foreign exchange rates, was $18.7 million as of the second quarter-end 2018 and $18.4 million at year-end 2017. |
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Goodwill | Goodwill The changes in the carrying amount of goodwill as of second quarter-end 2018 are included in the table below. See Acquisition footnote for a description of the change in goodwill.
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Accumulated Other Comprehensive Income (Loss) |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) by component, net of tax, for the second quarter and June year to date 2018 and 2017 are included in the table below. Amounts in parentheses indicate debits. See Investment in Persol Holdings footnote for a description of the cumulative-effect adjustment from the adoption of ASU 2016-01.
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Earnings Per Share |
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Earnings Per Share | Earnings Per Share The reconciliation of basic and diluted earnings (loss) per share on common stock for the second quarter and June year to date 2018 and 2017 follows (in millions of dollars except per share data):
Potentially dilutive shares outstanding are primarily related to performance shares for the second quarter and June year to date 2018 and 2017. |
Stock-Based Compensation |
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Stock-Based Compensation | Stock-Based Compensation For the second quarter of 2018, the Company recognized stock compensation expense of $2.2 million, and related tax benefit of $0.5 million. For the second quarter 2017, the Company recognized stock compensation benefit of $0.2 million, and related tax expense of $0.1 million, which included the impact of forfeitures related to the retirement of the Company’s former President and Chief Executive Officer in the second quarter of 2017. For June year to date 2018, the Company recognized stock compensation expense of $4.7 million, and related tax benefit of $3.2 million. For June year to date 2017, the Company recognized stock compensation expense of $4.2 million, and related tax benefit of $1.8 million. Performance Shares During 2018, the Company granted performance awards associated with the Company’s Class A stock to certain senior officers. The payment of performance shares, which will be satisfied with the issuance of shares out of treasury stock, is contingent upon the achievement of specific operating and pretax earnings and total shareholder return (“TSR”) goals over a stated period of time. The maximum number of performance shares that may be earned is 200% of the target shares originally granted. These awards have a three-year performance period and will cliff vest after the approval by the Compensation Committee, if not forfeited by the recipient. No dividends are paid on these performance shares. The financial measure performance shares may be earned upon the achievement of two financial goals. For each of the two financial measures, there are annual goals set in February of each year, with the total award payout for 2018 grants based on a cumulative measure of the 2018, 2019 and 2020 goals. Accordingly, the Company remeasures the fair value of the 2018 and 2017 financial measure performance shares each reporting period until the third year goals are set, after which the grant date fair value will be fixed for the remaining performance period. As of second quarter-end 2018, for both the financial measure performance shares granted in 2018 and 2017, the current fair value for the financial measure performance shares was $21.59. In addition, during the first quarter 2018, the final year of goals was set for the performance shares granted in 2016. Therefore, the grant date fair value for the 2016 financial measure performance shares was set at $28.40, and will remain fixed for the remaining performance period. TSR performance shares may be earned based on the Company’s TSR relative to the S&P SmallCap 600 Index. The 2018 TSR performance shares have an estimated fair value of $31.38, which was computed using a Monte Carlo simulation model incorporating assumptions for inputs of expected stock price volatility, dividend yield and risk-free interest rate. A summary of the status of all nonvested performance shares at target as of second quarter-end 2018 and year-to-date changes is presented as follows below (in thousands of shares except per share data). The majority of the vested shares below is related to the 2015 performance share grant, which cliff-vested after approval from the Compensation Committee during the first quarter of 2018.
Restricted Stock A summary of the status of nonvested restricted stock as of second quarter-end 2018 and year-to-date changes is presented as follows below (in thousands of shares except per share data).
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Other Income (Expense), Net | Other Income (Expense), Net Included in other income (expense), net for the second quarter and June year to date 2018 and 2017 are the following:
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Income Taxes |
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Jul. 01, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax benefit was $15.6 million for the second quarter of 2018 and income tax expense was $1.5 million for the second quarter of 2017. Income tax benefit was $9.2 million for June year to date 2018 and income tax expense was $4.2 million for June year to date 2017. Income taxes in the second quarter and June year to date of 2018 benefited from a lower U.S. tax rate and a loss on the Persol Holdings investment. Our tax expense is affected by recurring items, such as the amount of pretax income and its mix by jurisdiction, U.S. work opportunity credits and the change in cash surrender value of non-taxable investments in life insurance policies. It is also affected by discrete items that may occur in any given period but are not consistent from period to period, such as tax law changes, changes in judgment regarding the realizability of deferred tax assets, or the tax effects of stock compensation. With the Company’s adoption of ASU 2016-01 in the first quarter of 2018, changes in the fair value of the Company’s investment in Persol Holdings are now recognized in the consolidated statements of earnings. These investment gains or losses are treated as discrete since they cannot be estimated. |
Contingencies |
6 Months Ended |
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Jul. 01, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies In the ordinary course of business, the Company is continuously engaged in litigation, threatened ligation, or investigations arising in the ordinary course of its business, such as matters alleging employment discrimination, wage and hour violations, or violations of privacy rights or anti-competition regulations, which could result in a material adverse outcome. There are matters that are currently stayed pending a decision from the United States Supreme Court, regarding the enforceability of class action waivers in favor of arbitration. On May 21, 2018, the Court determined that class action waivers in employment contracts are enforceable. We are still assessing how the recent Supreme Court ruling affects our litigation strategy. We record accruals for loss contingencies when we believe it is probable that liability has been incurred and the amount of loss can be reasonably estimated. Such accruals are recorded in accounts payable and accrued liabilities on the consolidated balance sheet. While the ultimate outcome of these matters cannot be predicted with certainty, we believe that the resolution of any such proceedings will not have a material adverse effect on our financial condition, results of operations or cash flows. |
Segment Disclosures |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Disclosures | Segment Disclosures The Company’s segments are based on the organizational structure for which financial results are regularly evaluated by the CODM (the Company’s CEO) to determine resource allocation and assess performance. The Company’s three reportable segments, (1) Americas Staffing, (2) GTS and (3) International Staffing, reflect how the Company delivers services to customers and how its business is organized internally. Intersegment revenue represents revenue earned between the reportable segments and is eliminated from total segment revenue from services. Americas Staffing represents the Company’s branch-delivered staffing business in the U.S., Canada, Puerto Rico, Mexico and Brazil. International Staffing represents the EMEA region branch-delivered staffing business. Americas Staffing and International Staffing both deliver temporary staffing, as well as direct-hire placement services, in office-clerical, educational, light industrial, and professional and technical specialties within their geographic regions. GTS combines the delivery structure of the Company’s outsourcing and consulting group and centrally-delivered staffing business. It reflects the trend of customers towards the adoption of holistic talent supply chain solutions which combine contingent labor, full-time hiring and outsourced services. GTS includes centrally-delivered staffing, RPO, CWO, BPO, PPO, KellyConnect, career transition/outplacement services and talent advisory services. Corporate expenses that directly support the operating units have been allocated to Americas Staffing, GTS and International Staffing based on work effort, volume or, in the absence of a readily available measurement process, proportionately based on gross profit realized. Unallocated corporate expenses include those related to incentive compensation, law and risk management, certain finance and accounting functions, executive management, corporate campus facilities, IT production support, certain legal costs, and expenses related to corporate initiatives that do not directly benefit a specific operating segment. The following tables present information about the reported revenue from services and gross profit of the Company by segment, along with a reconciliation to consolidated earnings (loss) before taxes and equity in net earnings (loss) of affiliate, for the second quarter and June year to date 2018 and 2017. Asset information by reportable segment is not presented, since the Company does not produce such information internally nor does it use such data to manage its business.
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New Accounting Pronouncements |
6 Months Ended |
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Jul. 01, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07 simplifying the accounting for nonemployee share-based payment awards by expanding the scope of ASC Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. Under the new standard, most of the guidance on stock compensation payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The ASU is effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU 2018-02 allowing reclassification from accumulated other comprehensive income to retained earnings for the income tax effects resulting from the Act enacted by the U.S. federal government in December 2017. The new guidance eliminates the stranded tax effects resulting from the Act and will improve the usefulness of information reported to financial statement users. It also requires certain disclosures about stranded tax effects. ASU 2018-02 relates only to the reclassification of the income tax effects of the Act and does not change the underlying guidance requiring that the effect of a change in tax laws or rates be included in income from continuing operations. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. It should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Act is recognized. Early adoption is permitted. We adopted this guidance during the second quarter of 2018. We elected not to reclassify the income tax effects of the Act from accumulated other comprehensive income to retained earnings. In May 2017, the FASB issued ASU 2017-09 clarifying when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications. It does not change the accounting for modifications. The ASU was effective prospectively for reporting periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. The adoption of this ASU did not have an impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04 simplifying the accounting for goodwill impairment for all entities. The new guidance eliminates the requirement to calculate the implied fair value of goodwill (Step 2 of the current two-step goodwill impairment test under ASC 350). Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (Step 1 of the current two-step goodwill impairment test). The ASU is effective prospectively for reporting periods beginning after December 15, 2019, with early adoption permitted for annual and interim goodwill impairment testing dates after January 1, 2017. We are currently evaluating the impact of the new guidance on our goodwill impairment testing process and consolidated financial statements. In November 2016, the FASB issued ASU 2016-18 amending the presentation of restricted cash within the statement of cash flows. The new guidance requires that restricted cash be included within cash and cash equivalents on the statement of cash flows. The ASU was effective retrospectively for reporting periods beginning after December 15, 2017, with early adoption permitted. We adopted this guidance effective January 1, 2018. In August 2016, the FASB issued ASU 2016-15 clarifying how entities should classify certain cash receipts and payments on the statement of cash flows. The new guidance addresses classification of cash flows related to the following transactions: 1) debt prepayment or debt extinguishment costs; 2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; 3) contingent consideration payments made after a business combination; 4) proceeds from the settlement of insurance claims; 5) proceeds from the settlement of corporate-owned life insurance policies; 6) distributions received from equity method investees; and 7) beneficial interests in securitization transactions. ASU 2016-15 also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. This ASU was effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 and required retrospective application. Early adoption was permitted. We adopted this guidance effective January 1, 2018 and the impact related to this implementation was immaterial. In June 2016, the FASB issued ASU 2016-13 amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. Under this model, an entity recognizes an allowance for expected credit losses based on historical experience, current conditions and forecasted information rather than the current methodology of delaying recognition of credit losses until it is probable a loss has been incurred. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019 with early adoption permitted for annual reporting periods beginning after December 15, 2018. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. This ASU applies to trade accounts receivable and may have an impact on our calculation of the allowance for uncollectible accounts receivable. In February 2016, the FASB issued ASU 2016-02 amending the existing accounting standards for lease accounting and requiring lessees to recognize lease assets and lease liabilities for all leases with lease terms of more than 12 months, including those classified as operating leases. Both the asset and liability will initially be measured at the present value of the future minimum lease payments, with the asset being subject to adjustments such as initial direct costs. Consistent with current U.S. GAAP, the presentation of expenses and cash flows will depend primarily on the classification of the lease as either a finance or an operating lease. The new standard also requires additional quantitative and qualitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases in order to provide additional information about the nature of an organization’s leasing activities. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 and requires modified retrospective application. Early adoption is permitted. A cross-functional implementation team is working to assess the impact of the standard. We are currently in the process of upgrading our lease accounting software and developing processes to determine key judgments, such as the discount rates to be used for required present value calculations. We believe that our adoption of this standard will likely have a material impact to our consolidated balance sheets for the recognition of certain operating leases as right-of-use assets and lease liabilities. Our operating lease obligations are described in the Commitments footnote of our 2017 Form 10-K. Based on our preliminary assessment, we do not expect this standard to have a material impact to our consolidated statement of earnings. In January 2016, the FASB issued ASU 2016-01 amending the current guidance for how entities measure certain equity investments, the accounting for financial liabilities under the fair value option, and the presentation and disclosure requirements relating to financial instruments. The new guidance requires entities to use fair value measurement for equity investments in unconsolidated entities, excluding equity method investments, and to recognize the changes in fair value in net income at the end of each reporting period. Under the new standard, for any financial liabilities in which the fair value option has been elected, the changes in fair value due to instrument-specific credit risk must be recognized separately in other comprehensive income. Presentation and disclosure requirements under the new guidance require public business entities to use the exit price when measuring the fair value of financial instruments measured at amortized cost. In addition, financial assets and liabilities must now be presented separately in the notes to the financial statements and grouped by measurement category and form of financial asset. This ASU was effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption was only permitted for the financial liability provision. We adopted this guidance effective January 1, 2018. See Investment in Persol Holdings footnote for the impact on the financial statements. In May 2014, the FASB issued new revenue recognition guidance under ASU 2014-09 that superseded the existing revenue recognition guidance under U.S. GAAP. The new standard focused on creating a single source of revenue guidance for revenue arising from contracts with customers for all industries. The objective of the new standard was for companies to recognize revenue when it transfers the promised goods or services to its customers at an amount that represents what the company expects to be entitled to in exchange for those goods or services. In July 2015, the FASB deferred the effective date by one year (ASU 2015-14). This ASU was effective for annual periods, and interim periods within those annual periods, beginning on or after December 15, 2017. Since the issuance of the original standard, the FASB issued several other subsequent updates including the following: 1) clarification of the implementation guidance on principal versus agent considerations (ASU 2016-08); 2) further guidance on identifying performance obligations in a contract as well as clarifications on the licensing implementation guidance (ASU 2016-10); 3) rescission of several SEC Staff Announcements that are codified in Topic 605 (ASU 2016-11); 4) additional guidance and practical expedients in response to identified implementation issues (ASU 2016-12); and 5) technical corrections and improvements (ASU 2016-20). We adopted this guidance with the modified retrospective approach effective January 1, 2018. See Revenue footnote for the impact on the financial statements. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. |
New Accounting Pronouncements (Policies) |
6 Months Ended |
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Jul. 01, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07 simplifying the accounting for nonemployee share-based payment awards by expanding the scope of ASC Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. Under the new standard, most of the guidance on stock compensation payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The ASU is effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU 2018-02 allowing reclassification from accumulated other comprehensive income to retained earnings for the income tax effects resulting from the Act enacted by the U.S. federal government in December 2017. The new guidance eliminates the stranded tax effects resulting from the Act and will improve the usefulness of information reported to financial statement users. It also requires certain disclosures about stranded tax effects. ASU 2018-02 relates only to the reclassification of the income tax effects of the Act and does not change the underlying guidance requiring that the effect of a change in tax laws or rates be included in income from continuing operations. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. It should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Act is recognized. Early adoption is permitted. We adopted this guidance during the second quarter of 2018. We elected not to reclassify the income tax effects of the Act from accumulated other comprehensive income to retained earnings. In May 2017, the FASB issued ASU 2017-09 clarifying when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications. It does not change the accounting for modifications. The ASU was effective prospectively for reporting periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. The adoption of this ASU did not have an impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04 simplifying the accounting for goodwill impairment for all entities. The new guidance eliminates the requirement to calculate the implied fair value of goodwill (Step 2 of the current two-step goodwill impairment test under ASC 350). Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (Step 1 of the current two-step goodwill impairment test). The ASU is effective prospectively for reporting periods beginning after December 15, 2019, with early adoption permitted for annual and interim goodwill impairment testing dates after January 1, 2017. We are currently evaluating the impact of the new guidance on our goodwill impairment testing process and consolidated financial statements. In November 2016, the FASB issued ASU 2016-18 amending the presentation of restricted cash within the statement of cash flows. The new guidance requires that restricted cash be included within cash and cash equivalents on the statement of cash flows. The ASU was effective retrospectively for reporting periods beginning after December 15, 2017, with early adoption permitted. We adopted this guidance effective January 1, 2018. In August 2016, the FASB issued ASU 2016-15 clarifying how entities should classify certain cash receipts and payments on the statement of cash flows. The new guidance addresses classification of cash flows related to the following transactions: 1) debt prepayment or debt extinguishment costs; 2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; 3) contingent consideration payments made after a business combination; 4) proceeds from the settlement of insurance claims; 5) proceeds from the settlement of corporate-owned life insurance policies; 6) distributions received from equity method investees; and 7) beneficial interests in securitization transactions. ASU 2016-15 also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. This ASU was effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 and required retrospective application. Early adoption was permitted. We adopted this guidance effective January 1, 2018 and the impact related to this implementation was immaterial. In June 2016, the FASB issued ASU 2016-13 amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. Under this model, an entity recognizes an allowance for expected credit losses based on historical experience, current conditions and forecasted information rather than the current methodology of delaying recognition of credit losses until it is probable a loss has been incurred. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019 with early adoption permitted for annual reporting periods beginning after December 15, 2018. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. This ASU applies to trade accounts receivable and may have an impact on our calculation of the allowance for uncollectible accounts receivable. In February 2016, the FASB issued ASU 2016-02 amending the existing accounting standards for lease accounting and requiring lessees to recognize lease assets and lease liabilities for all leases with lease terms of more than 12 months, including those classified as operating leases. Both the asset and liability will initially be measured at the present value of the future minimum lease payments, with the asset being subject to adjustments such as initial direct costs. Consistent with current U.S. GAAP, the presentation of expenses and cash flows will depend primarily on the classification of the lease as either a finance or an operating lease. The new standard also requires additional quantitative and qualitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases in order to provide additional information about the nature of an organization’s leasing activities. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 and requires modified retrospective application. Early adoption is permitted. A cross-functional implementation team is working to assess the impact of the standard. We are currently in the process of upgrading our lease accounting software and developing processes to determine key judgments, such as the discount rates to be used for required present value calculations. We believe that our adoption of this standard will likely have a material impact to our consolidated balance sheets for the recognition of certain operating leases as right-of-use assets and lease liabilities. Our operating lease obligations are described in the Commitments footnote of our 2017 Form 10-K. Based on our preliminary assessment, we do not expect this standard to have a material impact to our consolidated statement of earnings. In January 2016, the FASB issued ASU 2016-01 amending the current guidance for how entities measure certain equity investments, the accounting for financial liabilities under the fair value option, and the presentation and disclosure requirements relating to financial instruments. The new guidance requires entities to use fair value measurement for equity investments in unconsolidated entities, excluding equity method investments, and to recognize the changes in fair value in net income at the end of each reporting period. Under the new standard, for any financial liabilities in which the fair value option has been elected, the changes in fair value due to instrument-specific credit risk must be recognized separately in other comprehensive income. Presentation and disclosure requirements under the new guidance require public business entities to use the exit price when measuring the fair value of financial instruments measured at amortized cost. In addition, financial assets and liabilities must now be presented separately in the notes to the financial statements and grouped by measurement category and form of financial asset. This ASU was effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption was only permitted for the financial liability provision. We adopted this guidance effective January 1, 2018. See Investment in Persol Holdings footnote for the impact on the financial statements. In May 2014, the FASB issued new revenue recognition guidance under ASU 2014-09 that superseded the existing revenue recognition guidance under U.S. GAAP. The new standard focused on creating a single source of revenue guidance for revenue arising from contracts with customers for all industries. The objective of the new standard was for companies to recognize revenue when it transfers the promised goods or services to its customers at an amount that represents what the company expects to be entitled to in exchange for those goods or services. In July 2015, the FASB deferred the effective date by one year (ASU 2015-14). This ASU was effective for annual periods, and interim periods within those annual periods, beginning on or after December 15, 2017. Since the issuance of the original standard, the FASB issued several other subsequent updates including the following: 1) clarification of the implementation guidance on principal versus agent considerations (ASU 2016-08); 2) further guidance on identifying performance obligations in a contract as well as clarifications on the licensing implementation guidance (ASU 2016-10); 3) rescission of several SEC Staff Announcements that are codified in Topic 605 (ASU 2016-11); 4) additional guidance and practical expedients in response to identified implementation issues (ASU 2016-12); and 5) technical corrections and improvements (ASU 2016-20). We adopted this guidance with the modified retrospective approach effective January 1, 2018. See Revenue footnote for the impact on the financial statements. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. |
Revenue (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The below table presents our revenues disaggregated by geography (in millions):
The following table presents our segment revenues disaggregated by service type (in millions):
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Assets Measured on Recurring Basis |
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Goodwill (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the Net Carrying Amount of Goodwill | The changes in the carrying amount of goodwill as of second quarter-end 2018 are included in the table below. See Acquisition footnote for a description of the change in goodwill.
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Accumulated Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income by Component, Net of Tax | The changes in accumulated other comprehensive income (loss) by component, net of tax, for the second quarter and June year to date 2018 and 2017 are included in the table below. Amounts in parentheses indicate debits. See Investment in Persol Holdings footnote for a description of the cumulative-effect adjustment from the adoption of ASU 2016-01.
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Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Basic and Diluted Earnings Per Share | The reconciliation of basic and diluted earnings (loss) per share on common stock for the second quarter and June year to date 2018 and 2017 follows (in millions of dollars except per share data):
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Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Performance Shares and Restricted Stock | A summary of the status of nonvested restricted stock as of second quarter-end 2018 and year-to-date changes is presented as follows below (in thousands of shares except per share data).
A summary of the status of all nonvested performance shares at target as of second quarter-end 2018 and year-to-date changes is presented as follows below (in thousands of shares except per share data). The majority of the vested shares below is related to the 2015 performance share grant, which cliff-vested after approval from the Compensation Committee during the first quarter of 2018.
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Other Income (Expense), Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Income (Expense), Net | Included in other income (expense), net for the second quarter and June year to date 2018 and 2017 are the following:
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Segment Disclosures (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Revenue from Services | The following tables present information about the reported revenue from services and gross profit of the Company by segment, along with a reconciliation to consolidated earnings (loss) before taxes and equity in net earnings (loss) of affiliate, for the second quarter and June year to date 2018 and 2017. Asset information by reportable segment is not presented, since the Company does not produce such information internally nor does it use such data to manage its business.
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Segment Earnings From Operations |
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Acquisition - Narrative (Details) - Teachers On Call, Inc. - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Sep. 05, 2017 |
Apr. 01, 2018 |
Jul. 01, 2018 |
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Business Acquisition [Line Items] | |||
Ownership percentage acquired | 100.00% | ||
Purchase price of acquisition | $ 41.0 | ||
Purchase price paid at closing | 39.0 | ||
Working capital adjustment | $ 0.2 | ||
Goodwill expected to be deductible | $ 18.8 | ||
Indemnification asset recognized at acquisition | $ 2.8 | ||
Indemnification assets | $ 0.1 |
Investment in Persol Holdings - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
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Jul. 01, 2018 |
Jul. 02, 2017 |
Jul. 01, 2018 |
Jul. 02, 2017 |
Jan. 01, 2018 |
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Gain (Loss) on Securities [Line Items] | |||||
Loss on investment in Persol Holdings | $ (52.5) | $ 0.0 | $ (28.8) | $ 0.0 | |
Unrealized gains on investment, net of tax | $ 0.0 | 0.9 | $ 0.0 | 19.8 | |
Persol Holdings Investment | |||||
Gain (Loss) on Securities [Line Items] | |||||
Unrealized gains on investment, net of tax | $ 0.9 | $ 19.8 | |||
OCI & AOCI | |||||
Gain (Loss) on Securities [Line Items] | |||||
Cumulative effect adjustment | $ 140.0 | ||||
Cumulative effect adjustment, taxes | $ 69.9 |
Investment in PersolKelly Asia Pacific (Details) - USD ($) $ in Millions |
Jul. 01, 2018 |
Dec. 31, 2017 |
---|---|---|
Schedule of Equity Method Investments [Line Items] | ||
Investment in equity affiliate | $ 122.0 | $ 117.4 |
Accounts payable and accrued liabilities | $ 505.5 | 537.7 |
PersolKelly Asia Pacific [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investment, ownership percentage | 49.00% | |
Due to PersolKelly Asia Pacific | $ 1.0 | 2.3 |
PersolKelly Asia Pacific [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Accounts payable and accrued liabilities | $ 1.7 | $ 2.5 |
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions |
Jul. 01, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deposits, Money Market Deposits | $ 9.3 | |
Restricted Cash and Cash Equivalents | 4.3 | |
Persol Holdings Investment | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost of equity securities | $ 18.7 | $ 18.4 |
Goodwill - Changes in the Net Carrying Amount of Goodwill (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jul. 01, 2018 |
Dec. 31, 2017 |
|
Goodwill [Roll Forward] | ||
Additions to Goodwill | $ 0.2 | |
Goodwill | 107.3 | $ 107.1 |
Americas Staffing | ||
Goodwill [Line Items] | ||
Goodwill, Purchase Accounting Adjustments | 0.2 | |
Goodwill [Roll Forward] | ||
Goodwill | 44.8 | 44.6 |
Global Talent Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill | 62.5 | 62.5 |
International Staffing | ||
Goodwill [Roll Forward] | ||
Goodwill | $ 0.0 | $ 0.0 |
Earnings Per Share - Reconciliation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2018 |
Jul. 02, 2017 |
Jul. 01, 2018 |
Jul. 02, 2017 |
|
Earnings Per Share [Abstract] | ||||
Net earnings (loss) | $ (15.4) | $ 18.7 | $ 13.7 | $ 30.9 |
Less: earnings allocated to participating securities | 0.0 | (0.3) | (0.2) | (0.6) |
Net earnings (loss) available to common shareholders | $ (15.4) | $ 18.4 | $ 13.5 | $ 30.3 |
Average shares outstanding (millions): | ||||
Basic (in shares) | 38.8 | 38.3 | 38.7 | 38.3 |
Dilutive share awards (in shares) | 0.0 | 0.5 | 0.1 | 0.4 |
Diluted (in shares) | 38.8 | 38.8 | 38.8 | 38.7 |
Basic earnings (loss) per share on common stock (in dollars per share) | $ (0.40) | $ 0.48 | $ 0.35 | $ 0.79 |
Diluted earnings (loss) per share on common stock (in dollars per share) | $ (0.40) | $ 0.47 | $ 0.35 | $ 0.78 |
Stock-Based Compensation - Schedule of Nonvested Restricted Stock (Details) - Restricted Stock shares in Thousands |
6 Months Ended |
---|---|
Jul. 01, 2018
$ / shares
shares
| |
Shares | |
Nonvested, beginning balance (in shares) | shares | 440 |
Granted (in shares) | shares | 146 |
Vested (in shares) | shares | (96) |
Forfeited (in shares) | shares | (26) |
Nonvested, ending balance (in shares) | shares | 464 |
Weighted Average Grant Date Fair Value | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 18.76 |
Granted (in dollars per share) | $ / shares | 29.17 |
Vested (in dollars per share) | $ / shares | 19.61 |
Forfeited (in dollars per share) | $ / shares | 20.07 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 21.79 |
Other Income (Expense), Net - Schedule of Other Nonoperating Income (Expense) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2018 |
Jul. 02, 2017 |
Jul. 01, 2018 |
Jul. 02, 2017 |
|
Other Income and Expenses [Abstract] | ||||
Interest income | $ 0.2 | $ 0.2 | $ 0.4 | $ 0.3 |
Interest expense | (0.8) | (0.6) | (1.6) | (1.1) |
Dividend income | 0.8 | 0.7 | 0.8 | 0.7 |
Foreign exchange gain (loss) | 0.4 | (0.8) | (0.7) | (2.0) |
Other income (expense), net | $ 0.6 | $ (0.5) | $ (1.1) | $ (2.1) |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2018 |
Jul. 02, 2017 |
Jul. 01, 2018 |
Jul. 02, 2017 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax (benefit) expense | $ 15.6 | $ (1.5) | $ 9.2 | $ (4.2) |
Segment Disclosures - Narrative (Details) |
6 Months Ended |
---|---|
Jul. 01, 2018
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Disclosures - Segment Revenue From Service (Details) - Service - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2018 |
Jul. 02, 2017 |
Jul. 01, 2018 |
Jul. 02, 2017 |
|
Revenue from Services | ||||
Segment revenue from services | $ 1,386.9 | $ 1,333.6 | $ 2,756.8 | $ 2,623.3 |
Less: Intersegment revenue | ||||
Revenue from Services | ||||
Segment revenue from services | (4.4) | (4.3) | (9.3) | (8.6) |
Americas Staffing | Reporting Segments | ||||
Revenue from Services | ||||
Segment revenue from services | 604.0 | 575.6 | 1,208.3 | 1,148.7 |
Global Talent Solutions | Reporting Segments | ||||
Revenue from Services | ||||
Segment revenue from services | 500.7 | 505.5 | 986.5 | 992.8 |
International Staffing | Reporting Segments | ||||
Revenue from Services | ||||
Segment revenue from services | $ 286.6 | $ 256.8 | $ 571.3 | $ 490.4 |
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