(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbols | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer (Do not check if a smaller reporting company) | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Page Number | |||||
13 Weeks Ended | |||||||||||
April 3, 2022 | April 4, 2021 | ||||||||||
Revenue from services | $ | $ | |||||||||
Cost of services | |||||||||||
Gross profit | |||||||||||
Selling, general and administrative expenses | |||||||||||
Earnings (loss) from operations | |||||||||||
Gain (loss) on investment in Persol Holdings | ( | ||||||||||
Loss on currency translation from liquidation of subsidiary | ( | ||||||||||
Other income (expense), net | ( | ||||||||||
Earnings (loss) before taxes and equity in net earnings (loss) of affiliate | ( | ||||||||||
Income tax expense (benefit) | ( | ||||||||||
Net earnings (loss) before equity in net earnings (loss) of affiliate | ( | ||||||||||
Equity in net earnings (loss) of affiliate | ( | ||||||||||
Net earnings (loss) | $ | ( | $ | ||||||||
Basic earnings (loss) per share | $ | ( | $ | ||||||||
Diluted earnings (loss) per share | $ | ( | $ | ||||||||
Average shares outstanding (millions): | |||||||||||
Basic | |||||||||||
Diluted |
13 Weeks Ended | |||||||||||
April 3, 2022 | April 4, 2021 | ||||||||||
Net earnings (loss) | $ | ( | $ | ||||||||
Other comprehensive income (loss), net of tax: | |||||||||||
Foreign currency translation adjustments, net of tax expense of $0.1 and $0.5, respectively | ( | ( | |||||||||
Less: Reclassification adjustments included in net earnings (loss) - liquidation of Japan subsidiary | |||||||||||
Less: Reclassification adjustments included in net earnings (loss) - equity method investment and other | |||||||||||
Foreign currency translation adjustments | ( | ||||||||||
Other comprehensive income (loss) | ( | ||||||||||
Comprehensive income (loss) | $ | ( | $ |
April 3, 2022 | January 2, 2022 | ||||||||||
Assets | |||||||||||
Current Assets | |||||||||||
Cash and equivalents | $ | $ | |||||||||
Trade accounts receivable, less allowances of $12.2 and $12.6, respectively | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Noncurrent Assets | |||||||||||
Property and equipment: | |||||||||||
Property and equipment | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Net property and equipment | |||||||||||
Operating lease right-of-use assets | |||||||||||
Deferred taxes | |||||||||||
Goodwill, net | |||||||||||
Investment in Persol Holdings | |||||||||||
Investment in equity affiliate | |||||||||||
Other assets | |||||||||||
Total noncurrent assets | |||||||||||
Total Assets | $ | $ |
April 3, 2022 | January 2, 2022 | ||||||||||
Liabilities and Stockholders’ Equity | |||||||||||
Current Liabilities | |||||||||||
Short-term borrowings | $ | $ | |||||||||
Accounts payable and accrued liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Accrued payroll and related taxes | |||||||||||
Accrued workers’ compensation and other claims | |||||||||||
Income and other taxes | |||||||||||
Total current liabilities | |||||||||||
Noncurrent Liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Accrued payroll and related taxes | |||||||||||
Accrued workers’ compensation and other claims | |||||||||||
Accrued retirement benefits | |||||||||||
Other long-term liabilities | |||||||||||
Total noncurrent liabilities | |||||||||||
Commitments and contingencies (see Contingencies footnote) | |||||||||||
Stockholders’ Equity | |||||||||||
Capital stock, $1.00 par value | |||||||||||
Class A common stock, 100.0 shares authorized; 35.1 shares issued at 2022 and 36.7 shares issued at 2021 | |||||||||||
Class B common stock, 10.0 shares authorized; 3.4 shares issued at 2022 and 2021 | |||||||||||
Treasury stock, at cost | |||||||||||
Class A common stock, 0.6 shares at 2022 and 0.7 shares at 2021 | ( | ( | |||||||||
Class B common stock | ( | ( | |||||||||
Paid-in capital | |||||||||||
Earnings invested in the business | |||||||||||
Accumulated other comprehensive income (loss) | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total Liabilities and Stockholders’ Equity | $ | $ |
13 Weeks Ended | |||||||||||
April 3, 2022 | April 4, 2021 | ||||||||||
Capital Stock | |||||||||||
Class A common stock | |||||||||||
Balance at beginning of period | $ | $ | |||||||||
Conversions from Class B | — | — | |||||||||
Share retirement | ( | ||||||||||
Balance at end of period | |||||||||||
Class B common stock | |||||||||||
Balance at beginning of period | |||||||||||
Conversions to Class A | — | — | |||||||||
Balance at end of period | |||||||||||
Treasury Stock | |||||||||||
Class A common stock | |||||||||||
Balance at beginning of period | ( | ( | |||||||||
Net issuance of stock awards | |||||||||||
Balance at end of period | ( | ( | |||||||||
Class B common stock | |||||||||||
Balance at beginning of period | ( | ( | |||||||||
Net issuance of stock awards | |||||||||||
Balance at end of period | ( | ( | |||||||||
Paid-in Capital | |||||||||||
Balance at beginning of period | |||||||||||
Net issuance of stock awards | ( | ( | |||||||||
Balance at end of period | |||||||||||
Earnings Invested in the Business | |||||||||||
Balance at beginning of period | |||||||||||
Net earnings (loss) | ( | ||||||||||
Dividends | ( | ||||||||||
Share retirement | ( | ||||||||||
Balance at end of period | |||||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||||
Balance at beginning of period | ( | ( | |||||||||
Other comprehensive income (loss), net of tax | ( | ||||||||||
Balance at end of period | ( | ( | |||||||||
Stockholders’ Equity at end of period | $ | $ |
13 Weeks Ended | |||||||||||
April 3, 2022 | April 4, 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net earnings (loss) | $ | ( | $ | ||||||||
Adjustments to reconcile net earnings (loss) to net cash from operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Operating lease asset amortization | |||||||||||
Provision for credit losses and sales allowances | ( | ||||||||||
Stock-based compensation | |||||||||||
(Gain) loss on investment in Persol Holdings | ( | ||||||||||
Loss on currency translation from liquidation of subsidiary | |||||||||||
Gain on foreign currency remeasurement | ( | ||||||||||
Equity in net (earnings) loss of PersolKelly Pte. Ltd. | ( | ||||||||||
Other, net | |||||||||||
Changes in operating assets and liabilities, net of acquisitions | ( | ||||||||||
Net cash (used in) from operating activities | ( | ||||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Acquisition of companies, net of cash received | ( | ||||||||||
Proceeds from company-owned life insurance | |||||||||||
Proceeds from sale of Persol Holdings investment | |||||||||||
Proceeds from sale of equity method investment | |||||||||||
Other investing activities | |||||||||||
Net cash from investing activities | |||||||||||
Cash flows from financing activities: | |||||||||||
Net change in short-term borrowings | |||||||||||
Financing lease payments | ( | ( | |||||||||
Dividend payments | ( | ||||||||||
Payments of tax withholding for stock awards | ( | ( | |||||||||
Buyback of common shares | ( | ||||||||||
Contingent consideration payments | ( | ||||||||||
Net cash (used in) from financing activities | ( | ||||||||||
Effect of exchange rates on cash, cash equivalents and restricted cash | ( | ( | |||||||||
Net change in cash, cash equivalents and restricted cash | |||||||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period (1) | $ | $ |
13 Weeks Ended | |||||||||||
April 3, 2022 | April 4, 2021 | ||||||||||
Reconciliation of cash, cash equivalents and restricted cash: | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash included in prepaid expenses and other current assets | |||||||||||
Noncurrent assets: | |||||||||||
Restricted cash included in other assets | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ |
First Quarter | ||||||||||||||
2022 | 2021 | |||||||||||||
Professional & Industrial | ||||||||||||||
Staffing services | $ | $ | ||||||||||||
Permanent placement | ||||||||||||||
Outcome-based services | ||||||||||||||
Total Professional & Industrial | ||||||||||||||
Science, Engineering & Technology | ||||||||||||||
Staffing services | ||||||||||||||
Permanent placement | ||||||||||||||
Outcome-based services | ||||||||||||||
Total Science, Engineering & Technology | ||||||||||||||
Education | ||||||||||||||
Staffing services | ||||||||||||||
Permanent placement | ||||||||||||||
Total Education | ||||||||||||||
Outsourcing & Consulting | ||||||||||||||
Talent solutions | ||||||||||||||
Total Outsourcing & Consulting | ||||||||||||||
International | ||||||||||||||
Staffing services | ||||||||||||||
Permanent placement | ||||||||||||||
Talent solutions | ||||||||||||||
Total International | ||||||||||||||
Total Intersegment | ( | ( | ||||||||||||
Total Revenue from Services | $ | $ |
First Quarter | ||||||||||||||
2022 | 2021 | |||||||||||||
Americas | ||||||||||||||
United States | $ | $ | ||||||||||||
Canada | ||||||||||||||
Puerto Rico | ||||||||||||||
Mexico | ||||||||||||||
Total Americas Region | ||||||||||||||
Europe | ||||||||||||||
Switzerland | ||||||||||||||
France | ||||||||||||||
Portugal | ||||||||||||||
Russia | ||||||||||||||
Italy | ||||||||||||||
United Kingdom | ||||||||||||||
Other | ||||||||||||||
Total Europe Region | ||||||||||||||
Total Asia-Pacific Region | ||||||||||||||
Total Kelly Services, Inc. | $ | $ |
First Quarter | ||||||||||||||
2022 | 2021 | |||||||||||||
Science, Engineering & Technology | ||||||||||||||
Americas | $ | $ | ||||||||||||
Europe | ||||||||||||||
Total Science, Engineering & Technology | $ | $ | ||||||||||||
Outsourcing & Consulting | ||||||||||||||
Americas | $ | $ | ||||||||||||
Europe | ||||||||||||||
Asia-Pacific | ||||||||||||||
Total Outsourcing & Consulting | $ | $ | ||||||||||||
International | ||||||||||||||
Americas | $ | $ | ||||||||||||
Europe | ||||||||||||||
Total International | $ | $ |
First Quarter | |||||||||||
2022 | 2021 | ||||||||||
Allowance for credit losses: | |||||||||||
Beginning balance | $ | $ | |||||||||
Current period provision | ( | ||||||||||
Currency exchange effects | ( | ( | |||||||||
Write-offs | ( | ( | |||||||||
Ending balance | $ | $ |
Cash consideration paid | $ | ||||
Additional consideration payable | |||||
Contingent consideration | |||||
Total consideration | $ |
Cash | $ | ||||
Trade accounts receivable | |||||
Prepaid expenses and other current assets | |||||
Net property and equipment | |||||
Goodwill | |||||
Intangibles | |||||
Accounts payable and accrued liabilities, current | ( | ||||
Accrued payroll and related taxes, current | ( | ||||
Other long-term liabilities | ( | ||||
Total consideration, including working capital adjustments | $ |
Cash consideration paid | $ | ||||
Additional consideration payable | |||||
Net working capital adjustment | ( | ||||
Total consideration | $ |
As of First Quarter-End 2022 | ||||||||||||||||||||||||||
Description | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
(In millions of dollars) | ||||||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | ||||||||||||||||||||||
Investment in Persol Holdings | ||||||||||||||||||||||||||
Total assets at fair value | $ | $ | $ | $ | ||||||||||||||||||||||
Brazil indemnification | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||
Greenwood/Asher earnout | ( | ( | ||||||||||||||||||||||||
RocketPower earnout | ( | ( | ||||||||||||||||||||||||
Total liabilities at fair value | $ | ( | $ | $ | $ | ( |
As of Year-End 2021 | ||||||||||||||||||||||||||
Description | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
(In millions of dollars) | ||||||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | ||||||||||||||||||||||
Investment in Persol Holdings | ||||||||||||||||||||||||||
Total assets at fair value | $ | $ | $ | $ | ||||||||||||||||||||||
Brazil indemnification | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||
Greenwood/Asher earnout | ( | ( | ||||||||||||||||||||||||
Total liabilities at fair value | $ | ( | $ | $ | $ | ( |
Severance Costs | Lease Termination Costs | Total | |||||||||||||||
Professional & Industrial | $ | $ | $ | ||||||||||||||
Education | |||||||||||||||||
Outsourcing & Consulting | |||||||||||||||||
Corporate | |||||||||||||||||
Total | $ | $ | $ |
Balance as of year-end 2021 | $ | ||||
Additions charged to Professional & Industrial | |||||
Additions charged to Outsourcing & Consulting | |||||
Additions charged to Education | |||||
Additions charged to Corporate | |||||
Reductions for cash payments related to all restructuring activities | ( | ||||
Balance as of first quarter-end 2022 | $ | ||||
As of Year-End 2021 | Additions to Goodwill | Impairment Adjustments | As of First Quarter-End 2022 | |||||||||||||||||||||||
(In millions of dollars) | ||||||||||||||||||||||||||
Science, Engineering & Technology | $ | $ | $ | $ | ||||||||||||||||||||||
Education | ||||||||||||||||||||||||||
Outsourcing & Consulting | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
First Quarter | |||||||||||
2022 | 2021 | ||||||||||
(In millions of dollars) | |||||||||||
Foreign currency translation adjustments: | |||||||||||
Beginning balance | $ | ( | $ | ( | |||||||
Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) - liquidation of Japan subsidiary | |||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) - equity method investment and other | |||||||||||
Net current-period other comprehensive income (loss) | ( | ||||||||||
Ending balance | ( | ( | |||||||||
Pension liability adjustments: | |||||||||||
Beginning balance | ( | ( | |||||||||
Other comprehensive income (loss) before reclassifications | |||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | |||||||||||
Net current-period other comprehensive income (loss) | |||||||||||
Ending balance | ( | ( | |||||||||
Total accumulated other comprehensive income (loss) | $ | ( | $ | ( |
First Quarter | |||||||||||
2022 | 2021 | ||||||||||
Net earnings (loss) | $ | ( | $ | ||||||||
Less: earnings allocated to participating securities | ( | ||||||||||
Net earnings (loss) available to common shareholders | $ | ( | $ | ||||||||
Average shares outstanding (millions): | |||||||||||
Basic | |||||||||||
Dilutive share awards | |||||||||||
Diluted | |||||||||||
Basic earnings (loss) per share | $ | ( | $ | ||||||||
Diluted earnings (loss) per share | $ | ( | $ |
Financial Measure Performance Shares | |||||||||||
Shares | Weighted Average Grant Date Fair Value | ||||||||||
Nonvested at year-end 2021 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Vesting adjustment | ( | ||||||||||
Nonvested at first quarter-end 2022 | $ |
Shares | Weighted Average Grant Date Fair Value | ||||||||||
Nonvested at year-end 2021 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Nonvested at first quarter-end 2022 | $ | ||||||||||
First Quarter | |||||||||||
2022 | 2021 | ||||||||||
(In millions of dollars) | |||||||||||
Interest income | $ | $ | |||||||||
Interest expense | ( | ( | |||||||||
Foreign exchange gains (losses) | ( | ||||||||||
Other | ( | ( | |||||||||
Other income (expense), net | $ | $ | ( |
First Quarter | |||||||||||
2022 | 2021 | ||||||||||
(In millions of dollars) | |||||||||||
Revenue from Services: | |||||||||||
Professional & Industrial | $ | $ | |||||||||
Science, Engineering & Technology | |||||||||||
Education | |||||||||||
Outsourcing & Consulting | |||||||||||
International | |||||||||||
Less: Intersegment revenue | ( | ( | |||||||||
Consolidated Total | $ | $ |
First Quarter | |||||||||||
2022 | 2021 | ||||||||||
(In millions of dollars) | |||||||||||
Earnings (loss) from Operations: | |||||||||||
Professional & Industrial gross profit | $ | $ | |||||||||
Professional & Industrial SG&A expenses | ( | ( | |||||||||
Professional & Industrial earnings (loss) from operations | |||||||||||
Science, Engineering & Technology gross profit | |||||||||||
Science, Engineering & Technology SG&A expenses | ( | ( | |||||||||
Science, Engineering & Technology earnings (loss) from operations | |||||||||||
Education gross profit | |||||||||||
Education SG&A expenses | ( | ( | |||||||||
Education earnings (loss) from operations | |||||||||||
Outsourcing & Consulting gross profit | |||||||||||
Outsourcing & Consulting SG&A expenses | ( | ( | |||||||||
Outsourcing & Consulting earnings (loss) from operations | |||||||||||
International gross profit | |||||||||||
International SG&A expenses | ( | ( | |||||||||
International earnings (loss) from operations | |||||||||||
Corporate | ( | ( | |||||||||
Consolidated Total | |||||||||||
Gain (loss) on investment in Persol Holdings | ( | ||||||||||
Loss on currency translation from liquidation of subsidiary | ( | ||||||||||
Other income (expense), net | ( | ||||||||||
Earnings (loss) before taxes and equity in net earnings (loss) of affiliate | $ | ( | $ |
First Quarter | |||||||||||
2022 | 2021 | ||||||||||
(In millions of dollars) | |||||||||||
Depreciation and amortization: | |||||||||||
Professional & Industrial | $ | $ | |||||||||
Science, Engineering & Technology | |||||||||||
Education | |||||||||||
Outsourcing & Consulting | |||||||||||
International |
First Quarter | ||||||||||||||||||||||||||
2022 | 2021 | % Change | ||||||||||||||||||||||||
Revenue from services | $ | 1,296.4 | $ | 1,205.9 | 7.5 | % | ||||||||||||||||||||
Gross profit | 258.6 | 213.3 | 21.2 | |||||||||||||||||||||||
Total SG&A expenses | 235.2 | 202.7 | 16.0 | |||||||||||||||||||||||
Earnings (loss) from operations | 23.4 | 10.6 | 120.5 | |||||||||||||||||||||||
Gain (loss) on investment in Persol Holdings | (67.2) | 30.0 | NM | |||||||||||||||||||||||
Loss on currency translation from liquidation of subsidiary | (20.4) | — | NM | |||||||||||||||||||||||
Other income (expense), net | 2.8 | (3.4) | 181.7 | |||||||||||||||||||||||
Earnings (loss) before taxes and equity in net earnings (loss) of affiliate | (61.4) | 37.2 | NM | |||||||||||||||||||||||
Income tax expense (benefit) | (13.0) | 10.5 | (223.9) | |||||||||||||||||||||||
Equity in net earnings (loss) of affiliate | 0.8 | (1.1) | NM | |||||||||||||||||||||||
Net earnings (loss) | $ | (47.6) | $ | 25.6 | NM | % | ||||||||||||||||||||
Gross profit rate | 19.9 | % | 17.7 | % | 2.2 | pts. | ||||||||||||||||||||
First Quarter | ||||||||||||||||||||
2022 | 2021 | % Change | ||||||||||||||||||
Revenue from Services: | ||||||||||||||||||||
Professional & Industrial | $ | 444.3 | $ | 467.6 | (5.0) | % | ||||||||||||||
Science, Engineering & Technology | 317.1 | 254.7 | 24.5 | |||||||||||||||||
Education | 173.4 | 111.6 | 55.4 | |||||||||||||||||
Outsourcing & Consulting | 109.1 | 99.3 | 9.8 | |||||||||||||||||
International | 252.8 | 272.9 | (7.4) | |||||||||||||||||
Less: Intersegment revenue | (0.3) | (0.2) | 60.3 | |||||||||||||||||
Consolidated Total | $ | 1,296.4 | $ | 1,205.9 | 7.5 | % |
First Quarter | ||||||||||||||||||||
2022 | 2021 | Change | ||||||||||||||||||
Gross Profit: | ||||||||||||||||||||
Professional & Industrial | $ | 83.1 | $ | 75.9 | 9.4 | % | ||||||||||||||
Science, Engineering & Technology | 73.8 | 53.2 | 38.8 | |||||||||||||||||
Education | 26.6 | 17.2 | 54.8 | |||||||||||||||||
Outsourcing & Consulting | 37.3 | 31.3 | 19.0 | |||||||||||||||||
International | 37.8 | 35.7 | 6.0 | |||||||||||||||||
Consolidated Total | $ | 258.6 | $ | 213.3 | 21.2 | % | ||||||||||||||
Gross Profit Rate: | ||||||||||||||||||||
Professional & Industrial | 18.7 | % | 16.2 | % | 2.5 | pts. | ||||||||||||||
Science, Engineering & Technology | 23.3 | 20.9 | 2.4 | |||||||||||||||||
Education | 15.3 | 15.4 | (0.1) | |||||||||||||||||
Outsourcing & Consulting | 34.2 | 31.5 | 2.7 | |||||||||||||||||
International | 15.0 | 13.1 | 1.9 | |||||||||||||||||
Consolidated Total | 19.9 | % | 17.7 | % | 2.2 | pts. | ||||||||||||||
First Quarter | ||||||||||||||||||||
2022 | 2021 | % Change | ||||||||||||||||||
SG&A Expenses: | ||||||||||||||||||||
Professional & Industrial | $ | 71.4 | $ | 69.4 | 2.8 | % | ||||||||||||||
Science, Engineering & Technology | 53.2 | 35.7 | 49.0 | |||||||||||||||||
Education | 18.6 | 14.2 | 31.2 | |||||||||||||||||
Outsourcing & Consulting | 34.3 | 28.4 | 20.5 | |||||||||||||||||
International | 33.2 | 33.1 | 0.4 | |||||||||||||||||
Corporate expenses | 24.5 | 21.9 | 11.9 | |||||||||||||||||
Consolidated Total | $ | 235.2 | $ | 202.7 | 16.0 | % | ||||||||||||||
First Quarter | ||||||||||||||||||||
2022 | 2021 | % Change | ||||||||||||||||||
Earnings (Loss) from Operations: | ||||||||||||||||||||
Professional & Industrial | $ | 11.7 | $ | 6.5 | 79.6 | % | ||||||||||||||
Science, Engineering & Technology | 20.6 | 17.5 | 18.0 | |||||||||||||||||
Education | 8.0 | 3.0 | 166.1 | |||||||||||||||||
Outsourcing & Consulting | 3.0 | 2.9 | 4.3 | |||||||||||||||||
International | 4.6 | 2.6 | 75.2 | |||||||||||||||||
Corporate | (24.5) | (21.9) | (11.9) | |||||||||||||||||
Consolidated Total | $ | 23.4 | $ | 10.6 | 120.5 | % |
Period | Total Number of Shares (or Units) Purchased (1) | Average Price Paid per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (2) | Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs (in millions of dollars) | ||||||||||||||||||||||
January 3, 2022 through February 6, 2022 | 1,881 | $ | 18.39 | — | $ | — | ||||||||||||||||||||
February 7, 2022 through March 6, 2022 | 34,757 | 20.78 | 1,577,614 | $ | — | |||||||||||||||||||||
March 7, 2022 through April 3, 2022 | 3,496 | 21.38 | — | $ | — | |||||||||||||||||||||
Total | 40,134 | $ | 20.72 | 1,577,614 |
Exhibit No. | Description | |||||||
Employment Agreement between Kelly Services Management Sarl and Olivier Thirot. | ||||||||
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. | ||||||||
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101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||
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101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
KELLY SERVICES, INC. | |||||
Date: May 12, 2022 | |||||
/s/ Olivier G. Thirot | |||||
Olivier G. Thirot | |||||
Executive Vice President and | |||||
Chief Financial Officer | |||||
(Principal Financial Officer) |
Date: May 12, 2022 | |||||
/s/ Laura S. Lockhart | |||||
Laura S. Lockhart | |||||
Vice President, Corporate Controller | |||||
and Chief Accounting Officer | |||||
(Principal Accounting Officer) |
The Employee | Kelly Services Management Sarl | ||||
/s/ Olivier Thirot | /s/ Dinette Koolhaas | ||||
Olivier Thirot | Dinette Koolhaas | ||||
Senior Vice President & President, | |||||
Kelly International | |||||
/s/ Silvan Hoevenaars | |||||
Silvan Hoevenaars | |||||
Vice President, Finance International |
Date: May 12, 2022 | ||||||||||||||
/s/ Peter W. Quigley | ||||||||||||||
Peter W. Quigley | ||||||||||||||
President and Chief Executive Officer |
Date: May 12, 2022 | ||||||||||||||
/s/ Olivier G. Thirot | ||||||||||||||
Olivier G. Thirot | ||||||||||||||
Executive Vice President and Chief Financial Officer |
Date: May 12, 2022 | ||||||||||||||
/s/ Peter W. Quigley | ||||||||||||||
Peter W. Quigley | ||||||||||||||
President and Chief Executive Officer |
Date: May 12, 2022 | ||||||||||||||
/s/ Olivier G. Thirot | ||||||||||||||
Olivier G. Thirot | ||||||||||||||
Executive Vice President and Chief Financial Officer |
Contingencies |
3 Months Ended |
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Apr. 03, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company is continuously engaged in litigation, threatened litigation, claims, audits or investigations arising in the ordinary course of its business, such as matters alleging employment discrimination, wage and hour violations, claims for indemnification or liability, violations of privacy rights, anti-competition regulations, commercial and contractual disputes, and tax-related matters which could result in a material adverse outcome. We record accruals for loss contingencies when we believe it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Such accruals are recorded in accounts payable and accrued liabilities and in accrued workers’ compensation and other claims in the consolidated balance sheet. At first quarter-end 2022 and year-end 2021, the gross accrual for litigation costs amounted to $1.8 million and $1.4 million, respectively. The Company maintains insurance coverage which may cover certain losses. When losses exceed the applicable policy deductible and realization of recovery of the loss from existing insurance policies is deemed probable, the Company records receivables from the insurance company for the excess amount, which are included in prepaid expenses and other current assets in the consolidated balance sheet. At first quarter-end 2022, the related insurance receivables amounted to $0.6 million. At year-end 2021, there were no related insurance receivables. The Company estimates the aggregate range of reasonably possible losses, in excess of amounts accrued, is $0.5 million to $9.1 million as of first quarter-end 2022. This range includes matters where a liability has been accrued but it is reasonably possible that the ultimate loss may exceed the amount accrued and for matters where a loss is believed to be reasonably possible, but a liability has not been accrued. The aggregate range only represents matters in which we are currently able to estimate a range of loss and does not represent our maximum loss exposure. The estimated range is subject to significant judgment and a variety of assumptions and only based upon currently available information. For other matters, we are currently not able to estimate the reasonably possible loss or range of loss. 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.
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New Accounting Pronouncements |
3 Months Ended |
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Apr. 03, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted In October 2021, the FASB issued Accounting Standards Update ("ASU") 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, to require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and should be applied prospectively to business combinations that occur after the effective date. We early adopted this standard in the first quarter of 2022 and the adoption did not have a material impact to our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 was effective for the Company in the first quarter of fiscal 2021. The adoption of this standard did not have a material impact to our consolidated financial statements. In January 2020, the FASB issued ASU 2020-01 which clarifies the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. The guidance clarifies how to account for the transition into and out of the equity method of accounting when considering observable transactions under the measurement alternative. The ASU is effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those annual periods, with early adoption permitted. The adoption of this standard did not have a material impact to our consolidated financial statements. In December 2019, the FASB issued ASU 2019-12 simplifying various aspects related to the accounting for income taxes. The guidance removes exceptions to the general principles in Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The ASU is effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those annual periods, with early adoption permitted. The adoption of this standard did not have a material impact to our consolidated financial statements. Not Yet Adopted 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.
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Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |
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Apr. 03, 2022 |
Apr. 04, 2021 |
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Statement of Comprehensive Income [Abstract] | ||
Net earnings (loss) | $ (47.6) | $ 25.6 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments, net of tax expense of $0.1 and $0.5, respectively | (9.9) | (13.6) |
Less: Reclassification adjustments included in net earnings (loss) - liquidation of Japan subsidiary | 20.4 | 0.0 |
Less: Reclassification adjustments included in net earnings (loss) - equity method investment and other | 2.5 | 0.0 |
Foreign currency translation adjustments | 13.0 | (13.6) |
Other comprehensive income (loss) | 13.0 | (13.6) |
Comprehensive income (loss) | $ (34.6) | $ 12.0 |
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
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Apr. 03, 2022 |
Apr. 04, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||
Foreign currency translation adjustments, tax expense (benefit) | $ 0.1 | $ 0.5 |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Millions, $ in Millions |
Apr. 03, 2022 |
Jan. 02, 2022 |
---|---|---|
Allowance for trade accounts receivables | $ 12.2 | $ 12.6 |
Class A Common Stock | ||
Capital stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
Common stock, shares authorized (in shares) | 100.0 | 100.0 |
Common stock, shares issued (in shares) | 35.1 | 36.7 |
Treasury stock, common stock (in shares) | 0.6 | 0.7 |
Class B Common Stock | ||
Capital stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
Common stock, shares authorized (in shares) | 10.0 | 10.0 |
Common stock, shares issued (in shares) | 3.4 | 3.4 |
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Millions |
Total |
Common Stock
Capital Stock, Class A common stock
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Common Stock
Capital Stock, Class B common stock
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Treasury Stock
Capital Stock, Class A common stock
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Treasury Stock
Treasury Stock, Class A common stock
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Treasury Stock
Treasury Stock, Class B common stock
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Paid-in Capital |
Earnings Invested in the Business |
Accumulated Other Comprehensive Income (Loss) |
---|---|---|---|---|---|---|---|---|---|
Stockholders' Equity Attributable to Parent, Beginning Balance at Jan. 03, 2021 | $ 36.7 | $ 3.4 | $ (16.5) | $ (0.6) | $ 21.3 | $ 1,162.9 | $ (4.2) | ||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net issuance of stock awards | 1.4 | 0.0 | (0.7) | ||||||
Net earnings (loss) | $ 25.6 | 25.6 | |||||||
Dividends | 0.0 | ||||||||
Other comprehensive income (loss), net of tax | (13.6) | (13.6) | |||||||
Share retirement | $ 0.0 | 0.0 | |||||||
Stockholders' Equity Attributable to Parent, Ending Balance at Apr. 04, 2021 | 1,215.7 | 36.7 | 3.4 | (15.1) | (0.6) | 20.6 | 1,188.5 | (17.8) | |
Increase (Decrease) in Stockholders' Equity | |||||||||
Earnings invested in the business | 1,315.0 | ||||||||
Stockholders' Equity Attributable to Parent, Beginning Balance at Jan. 02, 2022 | 1,336.2 | 36.7 | 3.4 | (14.5) | (0.6) | 23.9 | 1,315.0 | (27.7) | |
Increase (Decrease) in Stockholders' Equity | |||||||||
Net issuance of stock awards | 2.1 | 0.0 | (1.1) | ||||||
Net earnings (loss) | (47.6) | (47.6) | |||||||
Dividends | (1.9) | ||||||||
Other comprehensive income (loss), net of tax | 13.0 | 13.0 | |||||||
Share retirement | (1.6) | (25.6) | |||||||
Stockholders' Equity Attributable to Parent, Ending Balance at Apr. 03, 2022 | 1,273.5 | $ 35.1 | $ 3.4 | $ (12.4) | $ (0.6) | $ 22.8 | $ 1,239.9 | $ (14.7) | |
Increase (Decrease) in Stockholders' Equity | |||||||||
Earnings invested in the business | $ 1,239.9 |
Subsequent Event |
3 Months Ended |
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Apr. 03, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On May 2, 2022, the Company acquired 100% of the membership interests of Pediatric Therapeutic Services for $82.1 million of cash, subject to working capital adjustments. Pediatric Therapeutic Services is a specialty firm that provides and manages various state and federally mandated in-school therapy services and will be included in our Education segment. The related acquisition costs incurred through the end of the first quarter, which are included in other income (expense), net in the consolidated statements of earnings, were $0.3 million. The initial accounting for the business combination is incomplete at the time of this filing due to the limited amount of time since the acquisition date and the ongoing status of the valuation. Therefore, it is impracticable for the Company to provide the major classes of assets acquired and liabilities assumed or pro forma revenue and earnings. Subsequent to the end of the first quarter, Management initiated plans to actively explore an orderly transition of our operations in Russia in full compliance with International and Russian law. Such a transition may result in a loss up to the carrying value of our net assets in Russia. As of the end of the first quarter of 2022, assets in Russia totaled $28.4 million, liabilities totaled $13.0 million and accumulated other comprehensive loss totaled $10.1 million. For the year ended January 2, 2022, revenue in Russia was $132.2 million and earnings from operations were $5.3 million.
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Basis of Presentation |
3 Months Ended |
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Apr. 03, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of PresentationThe 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 January 2, 2022, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 17, 2022 (the 2021 consolidated financial statements). There were no changes in accounting policies as disclosed in the Form 10-K, with the exception of those described in the New Accounting Pronouncements footnote. The Company’s first fiscal quarter ended on April 3, 2022 (2022) and April 4, 2021 (2021), each of which contained 13 weeks. |
Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue Revenue Disaggregated by Service Type Kelly has five operating segments: Professional & Industrial (“P&I”), Science, Engineering & Technology (“SET”), Education, Outsourcing & Consulting Group ("Outsourcing & Consulting," "OCG") and International. Other than OCG, each segment delivers talent through staffing services, permanent placement or outcome-based services. Our OCG segment delivers talent solutions including managed service provider ("MSP"), payroll process outsourcing ("PPO"), recruitment process outsourcing ("RPO"), and talent advisory services. International also delivers RPO talent solutions within its local markets. The following table presents our segment revenues disaggregated by service type (in millions of dollars):
Revenue Disaggregated by Geography Our operations are subject to different economic and regulatory environments depending on geographic location. Our P&I and Education segments operate in the Americas region, our SET segment operates in the Americas and Europe regions, and OCG operates in the Americas, Europe and Asia-Pacific regions. The International segment includes Europe and our Mexico operations, which are included in the Americas region. The below table presents our revenues disaggregated by geography (in millions of dollars):
The below table presents our SET, OCG and International segment revenues disaggregated by geographic region (in millions of dollars):
Deferred Costs Deferred fulfillment costs, which are included in prepaid expenses and other current assets in the consolidated balance sheet, were $1.7 million as of first quarter-end 2022 and $1.3 million as of year-end 2021. Amortization expense for the deferred costs for the first quarter of 2022 was $1.9 million and in the first quarter of 2021 was $6.8 million.
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Credit Losses |
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Credit Losses | Credit Losses The rollforward of our allowance for credit losses related to trade accounts receivable, which is recorded in trade accounts receivable, less allowance in the consolidated balance sheet, is as follows (in millions of dollars):
Write-offs are presented net of recoveries, which were not material for first quarter-end 2022 and 2021. We were engaged in litigation with a customer over a disputed accounts receivable balance for certain services rendered more than five years ago, which was recorded as a long-term receivable in other assets in the consolidated balance sheet as of first quarter-end 2021. The related allowance for credit losses on this long-term customer receivable was $10.9 million and represented the likelihood of collection as of first quarter-end 2021. Based on a final ruling in the case in favor of the customer, we wrote off the entire receivable balance in the third quarter of 2021. No other allowances related to other receivables were material for first quarter-end 2022.
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Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions In the first quarter of 2022, the Company acquired Rocket Power Holdings LLC and Rocket Power Ops LLC (collectively, "RocketPower"), as detailed below. In the second quarter of 2021, the Company acquired Softworld, Inc. ("Softworld"), as detailed below. RocketPower On March 7, 2022, the Company acquired 100% of the issued and outstanding membership interests of RocketPower for a purchase price of $59.3 million. RocketPower is a leading provider of RPO and other outsourced talent solutions to U.S. high-tech companies. This acquisition will expand OCG's RPO solution and delivery offering and enhance the specialty RPO strategy and expertise within the high-tech industry. Under terms of the purchase agreement, the purchase price was adjusted for cash held by RocketPower at the closing date and estimated working capital adjustments resulting in the Company paying cash of $61.8 million. Total consideration includes $1.1 million of additional consideration that is payable to the seller in 2023 related to employee retention credits and contingent consideration with an estimated fair value of $0.6 million related to an earnout payment with a maximum potential cash payment of $31.8 million in the event certain financial metrics are met per the terms of the agreement. The initial fair value of the earnout was established using a Black Scholes model (see Fair Value Measurements footnote). The earnout is expected to be paid in 2023 and 2024 after each earn-out year pursuant to the terms of the purchase agreement. The total consideration is as follows (in millions of dollars):
Due to the limited amount of time that has passed since acquiring RocketPower, the purchase price allocation for this acquisition is preliminary and could change. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the date of the acquisition (in millions of dollars):
The fair value of the acquired receivables represents the contractual value. Included in the assets purchased in the RocketPower acquisition was $15.8 million of intangible assets, made up of $7.5 million in customer relationships, $6.6 million associated with RocketPower's trade names and $1.7 million for non-compete agreements. Customer relationships will be amortized over three years with no residual value, trade names will be amortized over 10 years with no residual value, and the non-compete agreements will be amortized over six years with no residual value. Goodwill generated from the acquisition was primarily attributable to expected synergies from combining operations and expanding market potential and was assigned to the OCG operating segment (see Goodwill footnote). The amount of goodwill expected to be deductible for tax purposes is approximately $28.0 million. RocketPower's results of operations will be included in the OCG segment in 2022 on a one-month lag. Accordingly, for the first quarter-end 2022, our consolidated revenues and net earnings did not include any results from RocketPower. Pro forma results of operations for this acquisition have not been presented as it is not material to the consolidated statements of earnings. Softworld On April 5, 2021, the Company acquired 100% of the shares of Softworld for a purchase price of $215.0 million. Softworld is a leading technology staffing and workforce solutions firm that serves clients across several end-markets, including financial services, life sciences, aerospace, defense, insurance, retail and IT consulting. This acquisition is intended to expand our capabilities, scale and solution set in our technology specialty. Under terms of the purchase agreement, the purchase price was adjusted for cash held by Softworld at the closing date and estimated working capital adjustments resulting in the Company paying cash of $220.4 million. Total consideration includes $2.6 million of additional consideration that is payable to the seller in 2022. In the third quarter of 2021, the Company received cash for a post-close working capital adjustment of $6.0 million. The total consideration is as follows (in millions of dollars):
As of first quarter-end 2022, the purchase price allocation for this acquisition is final. Our consolidated revenue from services and earnings from operations for the first quarter of 2022 included $37.9 million and $3.5 million, respectively, from Softworld. Goodwill generated from the acquisition was primarily attributable to expanding market potential and the expected revenue synergies and was assigned to the SET operating segment (see Goodwill footnote). All of the goodwill is expected to be deductible for tax purposes.
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Investment in Persol Holdings |
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Apr. 03, 2022 | |
Investment in Persol Holdings [Abstract] | |
Investment in Persol Holdings | Investment in Persol Holdings Prior to February 2022, the Company had a yen-denominated investment through the Company's subsidiary, Kelly Services Japan, Inc., in the common stock of Persol Holdings Co., Ltd. ("Persol Holdings"), the 100% owner of Persol Asia Pacific Pte. Ltd., the Company’s joint venture partner in PersolKelly Pte. Ltd. (the "JV"). In February 2022, the Company's board approved a series of transactions that ended the cross-shareholding agreement with Persol Holdings. On February 14, 2022, the Company repurchased 1,576,169 Class A and 1,475 Class B common shares held by Persol Holdings for $27.2 million. The purchase price was based on the average closing price of the last five business days prior to the transaction. The shares were subsequently retired and returned to an authorized, unissued status. In accordance with the Company's policy, the amount paid to repurchase the shares in excess of par value of $25.6 million was recorded to earnings invested in the business on the consolidated balance sheet at the time of the share retirement. On February 15, 2022, Kelly Services Japan, Inc. sold the investment in the common stock of Persol Holdings in an open-market transaction for proceeds of $196.9 million, net of transaction fees. As our investment was a noncontrolling interest in Persol Holdings, the investment was recorded at fair value based on the quoted market price of Persol Holdings stock on the Tokyo Stock Exchange through the date of the transaction (see Fair Value Measurements footnote). The $67.2 million loss in the first quarter of 2022 recorded in gain (loss) on investment in Persol Holdings in the consolidated statements of earnings included $52.4 million for losses related to changes in fair value up to the date of the transaction and $14.8 million for the discount from the market price on the date of the sale and transaction costs. The gain on the investment of $30.0 million in the first quarter 2021 was recorded in gain (loss) on investment in Persol Holdings in the consolidated statements of earnings. Subsequent to the transaction discussed above, the Company commenced the dissolution process of its Kelly Services Japan, Inc. subsidiary, which was considered substantially liquidated as of first quarter-end 2022. As a result, the Company recognized a $20.4 million cumulative translation adjustment loss in the first quarter of 2022, which is recorded in loss on currency translation from liquidation of subsidiary in the consolidated statements of earnings. The Company also recognized a $5.5 million foreign exchange gain related to U.S.-denominated cash equivalents held by Kelly Services Japan, Inc. following the sale of the Persol Holdings shares and prior to a dividend payment to the Company in the first quarter of 2022. The foreign exchange gain is recorded in other income (expense), net in the consolidated statements of earnings.
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Investment in PersolKelly Pte Ltd. |
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Equity Method Investments and Joint Ventures [Abstract] | |
Investment in PersolKelly Pte Ltd. | Investment in PersolKelly Pte. Ltd. Prior to February 2022, the Company had a 49% ownership interest in the JV (see Investment in Persol Holdings footnote above), a staffing services business operating in ten geographies in the Asia-Pacific region. On February 14, 2022, the Company entered into an agreement to sell 95% of the Company's shares in the JV to Persol Asia Pacific Pte. Ltd. On March 1, 2022, the Company received cash proceeds of $119.5 million. The carrying value of the shares sold was $117.6 million. In addition, the Company had $1.9 million of accumulated other comprehensive income representing the Company's share of the JV's other comprehensive income over time related to the shares sold that was realized upon the sale, offsetting the $1.9 million gain that resulted from the proceeds in excess of the carrying value. The operating results of the Company’s interest in the JV were accounted for on a one-quarter lag under the equity method and were reported in equity in net earnings (loss) of affiliate in the consolidated statements of earnings through the date of the sale. Such amounts were earnings of $0.8 million in the first quarter of 2022 and a loss of $1.1 million in the first quarter of 2021. After the sale, the Company has a 2.5% ownership interest in the JV and has discontinued its use of equity method accounting. The remaining investment will be accounted for as an equity investment without a readily determinable fair value (see Fair Value Measurements footnote). The equity investment, included in other assets on the Company’s consolidated balance sheet, totaled $6.4 million as of first quarter-end 2022 and the investment in equity affiliate on the Company's consolidated balance sheet totaled $123.4 million as of year-end 2021.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 and Liabilities Measured at Fair Value on a Recurring Basis The following tables present assets and liabilities measured at fair value on a recurring basis as of first quarter-end 2022 and year-end 2021 in the consolidated balance sheet 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 represent investments in money market funds that hold government securities, of which $7.3 million as of first quarter-end 2022 and $6.5 million as of year-end 2021, are restricted as to use and are included in other assets in 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 remaining money market funds as of first quarter-end 2022 and year-end 2021 are included in cash and equivalents in the consolidated balance sheet. The valuations of money market funds are based on quoted market prices of those accounts as of the respective period end. On February 15, 2022, Kelly Services Japan, Inc. sold the investment in the common stock of Persol Holdings in an open-market transaction. The valuation of the investment was based on the quoted market price of Persol Holdings stock on the Tokyo Stock Exchange as of year-end 2021, and the related changes in fair value were recorded in the consolidated statements of earnings (see Investment in Persol Holdings footnote). The cost of this yen-denominated investment, which fluctuated based on foreign exchange rates, was $18.0 million at year-end 2021. As of first quarter-end 2022 and year-end 2021, the Company had an indemnification liability of $2.9 million and $2.4 million, respectively, in other long-term liabilities on the consolidated balance sheet related to the 2020 sale of the Brazil operations. As part of the sale, the Company agreed to indemnify the buyer for losses and costs incurred in connection with certain events or occurrences initiated within a six-year period after closing. The aggregate losses for which the Company will provide indemnification shall not exceed $8.8 million. The valuation of the indemnification liability was established using a discounted cash flow methodology based on probability weighted-average cash flows discounted by weighted-average cost of capital. The valuation, which represents the fair value, is considered a Level 3 liability, and is being measured on a recurring basis. During the first quarter of 2022, the Company recognized an increase of $0.5 million to the indemnification liability related to exchange rate fluctuations in other income (expense), net in the consolidated statements of earnings. The Company recorded an earnout liability relating to the 2020 acquisition of Greenwood/Asher, totaling $2.3 million at first quarter-end 2022 in accounts payable and accrued liabilities and $4.6 million at year-end 2021 with $2.3 million in accounts payable and accrued liabilities and $2.3 million in other long-term liabilities in the consolidated balance sheet. The initial valuation of the earnout liability was established using a Black Scholes model and represented the fair value and is considered a Level 3 liability. During the first quarter of 2022, the Company paid the year one portion of the earnout totaling $2.3 million. In the consolidated statements of cash flows, $0.7 million of the payment is reflected as a financing activity representing the initial fair value of the earnout, with the remainder flowing through operating activities. The Company recorded an earnout liability relating to the 2022 acquisition of RocketPower, totaling $0.6 million at first quarter-end 2022 with $0.5 million in accounts payable and accrued liabilities and $0.1 million in other long-term liabilities in the consolidated balance sheet (see Acquisitions footnote). The maximum total cash payments which may be due related to the earnout liability is $31.8 million. The initial valuation of the earnout liability was established using a Black Scholes model and represents the fair value and is considered a Level 3 liability. Equity Investment Without Readily Determinable Fair Value On March 1, 2022, the Company sold the majority of its investment in the JV (see Investment in PersolKelly Pte. Ltd. footnote), with the remaining 2.5% interest now being measured using the measurement alternative for equity investments without a readily determinable fair value. The measurement alternative represents cost, less impairment, plus or minus observable price changes. The sale of the shares of the JV represented an observable transaction requiring the Company to calculate the current fair value based on the purchase price of the shares, in which the resulting adjustment was not material. The investment totaled $6.4 million as of first quarter-end 2022, representing total cost plus observable price changes to date. Prior to April 2021, the Company had a minority investment in Business Talent Group, LLC, which was included in other assets in the consolidated balance sheet. The investment was also measured using the measurement alternative for equity investments without a readily determinable fair value as described above. In the second quarter of 2021, BTG entered into a merger agreement which resulted in all of the Company's shares of BTG being automatically canceled upon approval of the merger and resulted in the receipt of $5.0 million in cash, which was equal to the carrying value and purchase price of the BTG investment. Prior to March 2021, the Company had a minority investment in Kenzie Academy Inc., which was included in other assets in the consolidated balance sheet. The investment was also measured using the measurement alternative for equity investments without a readily determinable fair value as described above. On March 8, 2021, Kenzie entered into a transaction to sell its assets. As of the date of the sale, the investment had a carrying value of $1.4 million, representing total cost plus observable price changes to date. In the first quarter of 2021, the asset was written down as a result of the sale and the loss of $1.4 million was recorded in other income (expense), net in the consolidated statements of earnings.
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Restructuring |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring In the first quarter of 2022, the Company took restructuring actions designed to increase efficiency. There were no restructuring charges incurred in the first quarter of 2021. Restructuring costs incurred in the first quarter of 2022 totaled $1.7 million and were recorded entirely in SG&A expenses in the consolidated statements of earnings, as detailed below (in millions of dollars):
A summary of the global restructuring balance sheet accrual, included in accrued payroll and related taxes and accounts payable and accrued liabilities in the consolidated balance sheet, is detailed below (in millions of dollars):
The remaining balance of $2.6 million as of first quarter-end 2022 primarily represents severance costs, and the majority is expected to be paid by second quarter-end 2022. No material adjustments are expected to be recorded.
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Goodwill |
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Goodwill | Goodwill The changes in the carrying amount of goodwill as of first quarter-end 2022 are included in the table below. The goodwill resulting from the acquisition of RocketPower during the first quarter of 2022 (see Acquisitions footnote) was allocated to the OCG reportable segment.
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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 first quarter 2022 and 2021 are included in the table below. Amounts in parentheses indicate debits. Reclassification adjustments out of accumulated other comprehensive income (loss) related to the liquidation of the Japan subsidiary, as shown in the table below, were recorded in the loss on currency translation from liquidation of subsidiary line item in the consolidated statements of earnings. Reclassification adjustments out of accumulated other comprehensive income (loss) related to the equity method investment and other, as shown in the table below, which includes $1.9 million related to the investment in PersolKelly Pte. Ltd., were recorded in the other income (expense), net line item in the consolidated statement of earnings. See Investment in PersolKelly Pte. Ltd. footnote for more details.
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Earnings (Loss) Per Share |
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Earnings (Loss) Per Share | Earnings (Loss) Per Share The reconciliation of basic and diluted earnings (loss) per share on common stock for the first quarter 2022 and 2021 follows (in millions of dollars except per share data):
Potentially dilutive shares outstanding are primarily related to deferred common stock related to the non-employee directors deferred compensation plan for the first quarter of 2021. Dividends paid per share for Class A and Class B common stock were $0.05 for the first quarter 2022 and $0.00 for the first quarter 2021.
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Stock-Based Compensation |
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Stock-Based Compensation | Stock-Based Compensation For the first quarter of 2022, the Company recognized stock compensation expense of $2.1 million, and a related tax benefit of $0.3 million. For the first quarter of 2021, the Company recognized stock compensation expense of $1.4 million, and a related tax benefit of $0.1 million. Performance Shares During the first quarter of 2022, the Company granted performance share awards associated with the Company’s Class A common stock to certain senior officers. The payment of performance share awards, which will be satisfied with the issuance of shares out of treasury stock, is contingent upon the achievement of specific revenue growth and earnings before interest, taxes, depreciation and amortization ("EBITDA") margin performance goals ("financial measure performance share awards") 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 three one-year performance periods: 2022, 2023 and 2024, with the payout for each performance period based on separate financial measure goals that are set in February of each of the three performance periods. Earned shares during each performance period will cliff vest in February 2025 after approval of the financial results by the Compensation Committee, if not forfeited by the recipient. No dividends are paid on these performance shares. A summary of the status of all nonvested performance shares at target as of first quarter-end 2022 and changes during this period is presented as follows below (in thousands of shares except per share data). The vesting adjustment in the table below represents the 2019 and a portion of the 2021 financial measure performance shares that did not vest because actual achievement was below the threshold level and resulted in no payout.
Restricted Stock A summary of the status of nonvested restricted stock as of first quarter-end 2022 and changes during this period is presented as follows below (in thousands of shares except per share data).
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Other Income (Expense), Net |
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Other Income (Expense), Net | Other Income (Expense), Net Included in other income (expense), net for the first quarter 2022 and 2021 are the following:
Included in foreign exchange gains (losses) for the first quarter of 2022 is a $5.5 million foreign exchange gain on a U.S. dollar-denominated cash balance held by the Company's Japan entity (see Investment in Persol Holdings footnote). Included in Other for the first quarter of 2021 is a loss from the sale of the assets related to our minority investment in Kenzie Academy (see Fair Value Measurements footnote) and transaction-related expenses from the April 2021 acquisition of Softworld (see Acquisitions footnote).
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Income Taxes |
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Apr. 03, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax benefit was $13.0 million for the first quarter of 2022 and income tax expense was $10.5 million for the first quarter of 2021. These amounts were impacted by changes in the fair value of the Company's investment in Persol Holdings, which resulted in a benefit of $18.4 million and a charge of $9.2 million for the first quarter of 2022 and 2021, respectively. The quarterly amounts are also impacted by changes in earnings from operations. 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 tax exempt 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, the tax effects of stock compensation, and changes in the fair value of the Company's investment in Persol Holdings, which are treated as discrete since they cannot be estimated. The Company provides valuation allowances against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. At this time, we have no valuation allowance against our Mexican deferred tax asset of $3.9 million, though it is possible this may change as we continue to assess the impacts of the new labor laws effective as of the third quarter of 2021 on our Mexican business operations throughout the remainder of the year.
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Segment Disclosures |
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Segment Disclosures | Segment Disclosures The Company’s operating segments, which also represent its reporting segments, are based on the organizational structure for which financial results are regularly evaluated by the Company’s chief operating decision-maker ("CODM", the Company’s CEO) to determine resource allocation and assess performance. The Company’s five reportable segments, (1) Professional & Industrial, (2) Science, Engineering & Technology, (3) Education, (4) Outsourcing & Consulting, and (5) International, reflect the specialty services the Company provides to customers and represent how the business is organized internally. Intersegment revenue represents revenue earned between the reportable segments and is eliminated from total segment revenue from services. The following tables present information about the reported revenue from services and gross profit of the Company by reportable segment, along with a reconciliation to earnings (loss) before taxes and equity in net earnings (loss) of affiliate, for the first quarter 2022 and 2021. Asset information by reportable segment is not presented, since the Company does not produce such information internally nor does it use such information to manage its business.
Depreciation and amortization expense included in SG&A expenses by segment above are as follows:
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New Accounting Pronouncements (Policies) |
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Apr. 03, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted In October 2021, the FASB issued Accounting Standards Update ("ASU") 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, to require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and should be applied prospectively to business combinations that occur after the effective date. We early adopted this standard in the first quarter of 2022 and the adoption did not have a material impact to our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 was effective for the Company in the first quarter of fiscal 2021. The adoption of this standard did not have a material impact to our consolidated financial statements. In January 2020, the FASB issued ASU 2020-01 which clarifies the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. The guidance clarifies how to account for the transition into and out of the equity method of accounting when considering observable transactions under the measurement alternative. The ASU is effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those annual periods, with early adoption permitted. The adoption of this standard did not have a material impact to our consolidated financial statements. In December 2019, the FASB issued ASU 2019-12 simplifying various aspects related to the accounting for income taxes. The guidance removes exceptions to the general principles in Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The ASU is effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those annual periods, with early adoption permitted. The adoption of this standard did not have a material impact to our consolidated financial statements. Not Yet Adopted 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.
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Revenue (Tables) |
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Disaggregation of Revenue | The following table presents our segment revenues disaggregated by service type (in millions of dollars):
The below table presents our revenues disaggregated by geography (in millions of dollars):
The below table presents our SET, OCG and International segment revenues disaggregated by geographic region (in millions of dollars):
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Credit Losses (Tables) |
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Accounts Receivable, Allowance for Credit Loss | The rollforward of our allowance for credit losses related to trade accounts receivable, which is recorded in trade accounts receivable, less allowance in the consolidated balance sheet, is as follows (in millions of dollars):
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Acquisitions (Tables) |
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Business Combination, Schedule of Purchase Price | The total consideration is as follows (in millions of dollars):
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the date of the acquisition (in millions of dollars):
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Assets Measured on Recurring Basis |
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Restructuring (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | Restructuring costs incurred in the first quarter of 2022 totaled $1.7 million and were recorded entirely in SG&A expenses in the consolidated statements of earnings, as detailed below (in millions of dollars):
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Schedule of Restructuring Balance Sheet Accrual | A summary of the global restructuring balance sheet accrual, included in accrued payroll and related taxes and accounts payable and accrued liabilities in the consolidated balance sheet, is detailed below (in millions of dollars):
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Goodwill (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the Net Carrying Amount of Goodwill | The changes in the carrying amount of goodwill as of first quarter-end 2022 are included in the table below. The goodwill resulting from the acquisition of RocketPower during the first quarter of 2022 (see Acquisitions footnote) was allocated to the OCG reportable segment.
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Accumulated Other Comprehensive Income (Loss) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 first quarter 2022 and 2021 are included in the table below. Amounts in parentheses indicate debits. Reclassification adjustments out of accumulated other comprehensive income (loss) related to the liquidation of the Japan subsidiary, as shown in the table below, were recorded in the loss on currency translation from liquidation of subsidiary line item in the consolidated statements of earnings. Reclassification adjustments out of accumulated other comprehensive income (loss) related to the equity method investment and other, as shown in the table below, which includes $1.9 million related to the investment in PersolKelly Pte. Ltd., were recorded in the other income (expense), net line item in the consolidated statement of earnings. See Investment in PersolKelly Pte. Ltd. footnote for more details.
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Earnings (Loss) Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 first quarter 2022 and 2021 follows (in millions of dollars except per share data):
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Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Performance Shares and Restricted Stock | A summary of the status of all nonvested performance shares at target as of first quarter-end 2022 and changes during this period is presented as follows below (in thousands of shares except per share data). The vesting adjustment in the table below represents the 2019 and a portion of the 2021 financial measure performance shares that did not vest because actual achievement was below the threshold level and resulted in no payout.
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Restricted Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Performance Shares and Restricted Stock | A summary of the status of nonvested restricted stock as of first quarter-end 2022 and changes during this period is presented as follows below (in thousands of shares except per share data).
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Other Income (Expense), Net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Income (Expense), Net | Included in other income (expense), net for the first quarter 2022 and 2021 are the following:
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Segment Disclosures (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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 reportable segment, along with a reconciliation to earnings (loss) before taxes and equity in net earnings (loss) of affiliate, for the first quarter 2022 and 2021. Asset information by reportable segment is not presented, since the Company does not produce such information internally nor does it use such information to manage its business.
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Segment Earnings From Operations |
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Depreciation and Amortization by Segment | Depreciation and amortization expense included in SG&A expenses by segment above are as follows:
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Subsequent Event - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
May 02, 2022 |
Apr. 03, 2022 |
Apr. 04, 2021 |
Jan. 02, 2022 |
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Subsequent Event [Line Items] | ||||
Assets | $ 2,785.6 | $ 2,894.2 | ||
Accumulated other comprehensive income (loss) | (14.7) | (27.7) | ||
Revenue | 1,296.4 | $ 1,205.9 | ||
Net earnings (loss) | (47.6) | 25.6 | ||
Earnings (loss) from operations | 23.4 | 10.6 | ||
Russia | ||||
Subsequent Event [Line Items] | ||||
Assets | 28.4 | |||
Liabilities | 13.0 | |||
Accumulated other comprehensive income (loss) | 10.1 | |||
Revenue | $ 29.7 | $ 32.6 | 132.2 | |
Earnings (loss) from operations | $ 5.3 | |||
Subsequent Event | Pediatric Therapeutic Services | ||||
Subsequent Event [Line Items] | ||||
Ownership percentage acquired | 100.00% | |||
Purchase price paid at closing | $ 82.1 | |||
Acquisition related costs | $ 0.3 |
Revenue - Narrative (Details) - Deferred Fulfillment Costs - USD ($) $ in Millions |
3 Months Ended | ||
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Apr. 03, 2022 |
Apr. 04, 2021 |
Jan. 02, 2022 |
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Revenue from Contract with Customer [Line Items] | |||
Capitalized contract cost, net | $ 1.7 | $ 1.3 | |
Capitalized contract cost, amortization | $ 1.9 | $ 6.8 |
Credit Losses - Allowance for Credit Losses Related to Trade Accounts Receivable (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2022 |
Apr. 04, 2021 |
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Allowance for credit losses: | ||
Beginning balance | $ 9.4 | $ 9.8 |
Current period provision | 0.4 | (0.2) |
Currency exchange effects | (0.1) | (0.2) |
Write-offs | (1.2) | (0.3) |
Ending balance | $ 8.5 | $ 9.1 |
Credit Losses - Narrative (Details) $ in Millions |
Apr. 04, 2021
USD ($)
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Other Assets | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Financing receivable, allowance for credit loss | $ 10.9 |
Acquisitions - Schedule of Purchase Price (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 07, 2022 |
Apr. 05, 2021 |
Oct. 03, 2021 |
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RocketPower | |||
Business Acquisition [Line Items] | |||
Cash consideration paid | $ 61.8 | ||
Additional consideration payable | 1.1 | ||
Contingent consideration | 0.6 | ||
Total consideration, including working capital adjustments | $ 63.5 | ||
Softworld, Inc. | |||
Business Acquisition [Line Items] | |||
Cash consideration paid | $ 220.4 | ||
Additional consideration payable | 2.6 | ||
Net working capital adjustment | (6.0) | $ (6.0) | |
Total consideration, including working capital adjustments | $ 217.0 |
Acquisitions - Fair Value of Assets Assumed and Liabilities Acquired (Details) - USD ($) $ in Millions |
Mar. 07, 2022 |
Apr. 03, 2022 |
Jan. 02, 2022 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 155.8 | $ 114.8 | |
RocketPower | |||
Business Acquisition [Line Items] | |||
Cash | $ 3.5 | ||
Trade accounts receivable | 6.9 | ||
Prepaid expenses and other current assets | 1.8 | ||
Net property and equipment | 0.1 | ||
Goodwill | 41.0 | ||
Intangibles | 15.8 | ||
Accounts payable and accrued liabilities, current | (2.9) | ||
Accrued payroll and related taxes, current | (1.5) | ||
Other long-term liabilities | (1.2) | ||
Total consideration, including working capital adjustments | $ 63.5 |
Restructuring - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2022 |
Jan. 02, 2022 |
|
Restructuring and Related Activities [Abstract] | ||
Restructuring costs | $ 1.7 | |
Restructuring accrual | $ 2.6 | $ 2.9 |
Restructuring - Schedule of Restructuring and Related Costs (Details) $ in Millions |
3 Months Ended |
---|---|
Apr. 03, 2022
USD ($)
| |
Restructuring Cost and Reserve [Line Items] | |
Severance Costs | $ 1.5 |
Lease Termination Costs | 0.2 |
Total | 1.7 |
Corporate, Non-Segment | |
Restructuring Cost and Reserve [Line Items] | |
Severance Costs | 0.8 |
Lease Termination Costs | 0.0 |
Total | 0.8 |
Professional & Industrial | |
Restructuring Cost and Reserve [Line Items] | |
Severance Costs | 0.1 |
Lease Termination Costs | 0.2 |
Total | 0.3 |
Education | |
Restructuring Cost and Reserve [Line Items] | |
Severance Costs | 0.4 |
Lease Termination Costs | 0.0 |
Total | 0.4 |
Outsourcing & Consulting | |
Restructuring Cost and Reserve [Line Items] | |
Severance Costs | 0.2 |
Lease Termination Costs | 0.0 |
Total | $ 0.2 |
Restructuring - Restructuring Reserve (Details) $ in Millions |
3 Months Ended |
---|---|
Apr. 03, 2022
USD ($)
| |
Restructuring Cost and Reserve [Line Items] | |
Beginning balance | $ 2.9 |
Restructuring costs | 1.7 |
Reductions for cash payments related to all restructuring activities | (2.0) |
Ending balance | 2.6 |
Corporate, Non-Segment | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring costs | 0.8 |
Professional & Industrial | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring costs | 0.3 |
Outsourcing & Consulting | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring costs | 0.2 |
Education | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring costs | $ 0.4 |
Goodwill - Changes in the Net Carrying Amount of Goodwill (Details) $ in Millions |
3 Months Ended |
---|---|
Apr. 03, 2022
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 114.8 |
Additions to Goodwill | 41.0 |
Impairment Adjustments | 0.0 |
Goodwill, ending balance | 155.8 |
Science, Engineering & Technology | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 111.3 |
Additions to Goodwill | 0.0 |
Impairment Adjustments | 0.0 |
Goodwill, ending balance | 111.3 |
Education | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 3.5 |
Additions to Goodwill | 0.0 |
Impairment Adjustments | 0.0 |
Goodwill, ending balance | 3.5 |
Outsourcing & Consulting | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 0.0 |
Additions to Goodwill | 41.0 |
Impairment Adjustments | 0.0 |
Goodwill, ending balance | $ 41.0 |
Accumulated Other Comprehensive Income (Loss) - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 01, 2022 |
Apr. 03, 2022 |
Apr. 04, 2021 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Amounts reclassified from accumulated other comprehensive income (loss) | $ (1.9) | ||
Equity Method Investment and Other | Foreign currency translation adjustments: | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Amounts reclassified from accumulated other comprehensive income (loss) | $ (2.5) | $ 0.0 | |
PersolKelly Pte. Ltd. | Equity Method Investment and Other | Foreign currency translation adjustments: | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Amounts reclassified from accumulated other comprehensive income (loss) | $ (1.9) |
Earnings (Loss) Per Share - Reconciliation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2022 |
Apr. 04, 2021 |
|
Earnings Per Share [Abstract] | ||
Net earnings (loss) | $ (47.6) | $ 25.6 |
Less: earnings allocated to participating securities | 0.0 | (0.2) |
Net earnings (loss) available to common shareholders | $ (47.6) | $ 25.4 |
Average shares outstanding (millions): | ||
Basic (in shares) | 38.6 | 39.3 |
Dilutive share awards (in shares) | 0.0 | 0.2 |
Diluted (in shares) | 38.6 | 39.5 |
Basic earnings (loss) per share on common stock (in dollars per share) | $ (1.23) | $ 0.65 |
Diluted earnings (loss) per share on common stock (in dollars per share) | $ (1.23) | $ 0.64 |
Earnings (Loss) Per Share - Narrative (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Apr. 03, 2022 |
Apr. 04, 2021 |
|
Class A Common Stock | ||
Dividends Payable [Line Items] | ||
Dividends per share (in dollars per share) | $ 0.05 | $ 0.00 |
Class B Common Stock | ||
Dividends Payable [Line Items] | ||
Dividends per share (in dollars per share) | $ 0.05 | $ 0.00 |
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2022 |
Apr. 04, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense (benefit) | $ 2.1 | $ 1.4 |
Related tax benefit (expense) | $ 0.3 | $ 0.1 |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum number of shares that can be earned, percentage | 200.00% |
Stock-Based Compensation - Schedule of Nonvested Performance Shares (Details) - Financial Measure Performance Shares shares in Thousands |
3 Months Ended |
---|---|
Apr. 03, 2022
$ / shares
shares
| |
Shares | |
Nonvested, beginning balance (in shares) | shares | 708 |
Granted (in shares) | shares | 186 |
Vested (in shares) | shares | (48) |
Forfeited (in shares) | shares | (6) |
Vesting adjustment (in shares) | shares | (142) |
Nonvested, ending balance (in shares) | shares | 698 |
Weighted Average Grant Date Fair Value | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 20.03 |
Granted (in dollars per share) | $ / shares | 21.19 |
Vested (in dollars per share) | $ / shares | 22.55 |
Forfeited (in dollars per share) | $ / shares | 16.81 |
Vesting adjustment (in dollars per share) | $ / shares | 24.45 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 19.39 |
Stock-Based Compensation - Schedule of Nonvested Restricted Stock (Details) - Restricted Stock shares in Thousands |
3 Months Ended |
---|---|
Apr. 03, 2022
$ / shares
shares
| |
Shares | |
Nonvested, beginning balance (in shares) | shares | 403 |
Granted (in shares) | shares | 259 |
Vested (in shares) | shares | (96) |
Forfeited (in shares) | shares | (22) |
Nonvested, ending balance (in shares) | shares | 544 |
Weighted Average Grant Date Fair Value | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 21.24 |
Granted (in dollars per share) | $ / shares | 21.74 |
Vested (in dollars per share) | $ / shares | 22.34 |
Forfeited (in dollars per share) | $ / shares | 22.43 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 21.24 |
Other Income (Expense), Net - Schedule of Other Nonoperating Income (Expense) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2022 |
Apr. 04, 2021 |
|
Other Income and Expenses [Abstract] | ||
Interest income | $ 0.1 | $ 0.1 |
Interest expense | (0.6) | (0.6) |
Foreign exchange gains (losses) | 4.7 | (0.2) |
Other expense | (1.4) | (2.7) |
Other income (expense), net | $ 2.8 | $ (3.4) |
Other Income (Expense), Net - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2022 |
Apr. 04, 2021 |
|
Other Income (Expense) [Line Items] | ||
Foreign currency transaction gain | $ 5.5 | $ 0.0 |
Kelly Services Japan, Inc. | ||
Other Income (Expense) [Line Items] | ||
Foreign currency transaction gain | $ 5.5 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2022 |
Apr. 04, 2021 |
|
Income Taxes [Line Items] | ||
Income tax expense (benefit) | $ (13.0) | $ 10.5 |
Mexico | ||
Income Taxes [Line Items] | ||
Deferred tax asset | 3.9 | |
Persol Holdings | ||
Income Taxes [Line Items] | ||
Income tax expense (benefit) | $ (18.4) | $ 9.2 |
Contingencies - Narrative (Details) - USD ($) $ in Millions |
Apr. 03, 2022 |
Jan. 02, 2022 |
---|---|---|
Loss Contingencies [Line Items] | ||
Accrual for litigation costs | $ 1.8 | $ 1.4 |
Loss Contingency, Receivable | 0.6 | $ 0.0 |
Minimum | ||
Loss Contingencies [Line Items] | ||
Loss contingency, portion not accrued | 0.5 | |
Maximum | ||
Loss Contingencies [Line Items] | ||
Loss contingency, portion not accrued | $ 9.1 |
Segment Disclosures - Narrative (Details) |
3 Months Ended |
---|---|
Apr. 03, 2022
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 5 |
Segment Disclosures - Segment Revenue From Service (Details) - Service - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2022 |
Apr. 04, 2021 |
|
Revenue from Services | ||
Segment revenue from services | $ 1,296.4 | $ 1,205.9 |
Less: Intersegment revenue | ||
Revenue from Services | ||
Segment revenue from services | (0.3) | (0.2) |
Professional & Industrial | Reporting Segments | ||
Revenue from Services | ||
Segment revenue from services | 444.3 | 467.6 |
Science, Engineering & Technology | Reporting Segments | ||
Revenue from Services | ||
Segment revenue from services | 317.1 | 254.7 |
Education | Reporting Segments | ||
Revenue from Services | ||
Segment revenue from services | 173.4 | 111.6 |
Outsourcing & Consulting | Reporting Segments | ||
Revenue from Services | ||
Segment revenue from services | 109.1 | 99.3 |
International | Reporting Segments | ||
Revenue from Services | ||
Segment revenue from services | $ 252.8 | $ 272.9 |
Segment Disclosures - Depreciation and Amortization Expense Included in SG&A Expenses (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2022 |
Apr. 04, 2021 |
|
Earnings (loss) from Operations | ||
Depreciation and amortization | $ 7.5 | $ 5.9 |
Professional & Industrial | ||
Earnings (loss) from Operations | ||
Depreciation and amortization | 1.1 | 1.4 |
Science, Engineering & Technology | ||
Earnings (loss) from Operations | ||
Depreciation and amortization | 3.1 | 1.0 |
Education | ||
Earnings (loss) from Operations | ||
Depreciation and amortization | 0.8 | 1.0 |
Outsourcing & Consulting | ||
Earnings (loss) from Operations | ||
Depreciation and amortization | 0.2 | 0.2 |
International | ||
Earnings (loss) from Operations | ||
Depreciation and amortization | $ 0.5 | $ 0.5 |
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