Goodwill and Intangible Assets

12 Months Ended

Dec. 29, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

9. Goodwill and Intangible Assets

Goodwill

The changes in the carrying amount of goodwill for the fiscal years 2024 and 2023 are included in the table below (in millions of dollars):


	Science, Engineering & Technology		Education		Total
Balance as of year-end 2022	$	111.3	$	39.8	$	151.1
Additions	—		—		—
Impairment adjustments	—		—		—
Balance as of year-end 2023	111.3		39.8		151.1
Additions	222.9		3.0		225.9
Impairment adjustments	(72.8)		—		(72.8)
Balance as of year-end 2024	$	261.4	$	42.8	$	304.2

Our SET reportable segment includes goodwill acquired in the second quarter of 2021 and 2024, related to our Softworld and MRP reporting units, respectively. Our Education reportable segment includes goodwill acquired in the fourth quarter of 2020, second quarter of 2022 and fourth quarter of 2024, related to our Education and PTS reporting units, respectively. (See the Acquisitions and Dispositions footnote for more details regarding each acquisition.)

The Company performs its annual goodwill impairment testing in the fourth quarter each year and regularly assesses whenever events or circumstances make it more likely than not that an impairment may have occurred. We also perform a qualitative review on a quarterly basis of our long-lived assets, comprised of net property and equipment and definite-lived intangible assets, to determine whether events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

2024 Goodwill Impairment Assessment

In the fourth quarter of 2024, we performed our annual goodwill impairment testing. For the PTS and Education reporting units, we performed step zero qualitative analyses and have concluded that there are no indications that the fair values of the PTS and Education reporting units are less than their respective carrying values and therefore no further testing was required. For the Softworld and MRP reporting units, our annual goodwill impairment testing included step one quantitative tests. As a result of the MRP quantitative assessment, we determined that the estimated fair value of the MRP reporting unit was more than its carrying value. The estimated fair value of the MRP reporting unit exceeded the carrying value by less than 10%. If current expectations of future revenue and profit margins are not met, or if market factors outside of our control change significantly, including discount rate, then the goodwill of the MRP reporting unit may be impaired in the future, resulting in goodwill impairment charges.

As a result of the Softworld quantitative assessment, the Company determined that Softworld's estimated fair value of the reporting unit no longer exceeded the carrying value. Softworld's 2024 financial performance was lower than internal projections due to continued challenging market conditions. As a result, management’s expectation for near-term financial performance and projected long-term growth rates were revised accordingly. These changes in circumstances were also indicators that the respective long-lived assets may not be recoverable. Softworld has definite-lived intangible assets, consisting of trade names, customer relationships and non-compete agreements, which are amortized over their estimated useful lives. We performed a long-lived asset recoverability test for Softworld and determined that undiscounted future cash flows exceeded the carrying amount of the asset group and were recoverable. Based on the result of our annual goodwill impairment test, we recorded an impairment charge of $72.8 million, which was included in goodwill impairment charge in the consolidated statements of earnings for the year ended 2024, to write-off a portion of Softworld's goodwill balance. Included in the impairment charge was an $18.4 million tax benefit associated with the impairment. The remaining goodwill balance for the Softworld reporting unit was $38.5 million as of year-end 2024. If current expectations of future revenue and profit margins are not met, or if market factors outside of our control change significantly, including discount rate, then the goodwill of the Softworld reporting unit may be further impaired in the future, resulting in goodwill impairment charges.

2023 Goodwill Impairment Assessment

In the fourth quarter of 2023, we performed our annual goodwill impairment testing, which included a step one quantitative test for the Softworld and PTS reporting units. As a result of the quantitative assessment, we determined that the estimated fair value of the Softworld and PTS reporting units was more than its carrying value. Additionally, we performed a step zero qualitative analysis for the Education reporting unit to determine whether a further quantitative analysis was necessary and concluded that a step one quantitative analysis was not necessary. As a result of the quantitative and qualitative assessments, the Company determined goodwill related to these reporting units was not impaired. As of year-end 2023, the estimated fair value of the Softworld reporting unit exceeded the carrying value by less than 10%.

2022 Goodwill Impairment

RocketPower was acquired during the first quarter of 2022 was allocated to the OCG reportable segment and was deemed to be a separate reporting unit. During the second half of 2022, customers within the high-tech industry vertical, in which RocketPower specializes, reduced or eliminated their full-time hiring, reducing demand for RocketPower’s services, and on-going economic uncertainty had more broadly impacted the growth in demand for RPO in the near-term. These changes in market conditions therefore caused triggering events requiring interim impairment tests for both long-lived assets and goodwill as of the third and fourth quarters of 2022. We performed a long-lived asset recoverability tests for RocketPower and determined that undiscounted future cash flows exceeded the carrying amount of the asset group and were recoverable. We performed interim step one quantitative tests for RocketPower’s goodwill and determined that the estimated fair value of the

reporting unit no longer exceeded the carrying value. Based on the result of our interim goodwill impairment tests, we recorded a total goodwill impairment charge of $41.0 million as of year-end 2022 to write-off all of RocketPower's goodwill balance.

Intangible Assets

Intangible assets, excluding fully-amortized intangibles, are included within other assets on our consolidated balance sheet and consist of the following (in millions of dollars):


		2024						2023
	Useful Lives	Gross Carrying Amount		Less: Accumulated Amortization		Net		Gross Carrying Amount		Less: Accumulated Amortization		Net
Customer relationships	10-15 years	$	229.2	$	65.9	$	163.3	$	141.1	$	47.7	$	93.4

Trade names	10-15 years	108.1		20.4		87.7		51.6		12.8		38.8
Non-compete agreements	5 years	5.6		2.7		2.9		4.3		1.7		2.6
Trademarks	10 years	4.8		2.4		2.4		4.8		1.9		2.9
Total		$	347.7	$	91.4	$	256.3	$	201.8	$	64.1	$	137.7

Intangible amortization expense, which is included in SG&A expenses in the consolidated statements of earnings, was $27.3 million, $20.9 million and $19.4 million in 2024, 2023 and 2022, respectively. The amortization expense is expected to be $30.1 million in 2025, $29.4 million in 2026, $28.8 million in 2027, $27.4 million in 2028 and $24.8 million in 2029.