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Held for Sale | 6 Months Ended
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Jul. 03, 2022
Assets Held for Sale [Abstract] |
Held for Sale | Held for Sale Russia Operations In the second quarter of 2022, the Company announced its intention to transition its business in Russia. On June 30, 2022, the Company entered into a definitive agreement to sell its Russia operations ("disposal group"), which is included in the Company's International operating segment. As of the date of the agreement and until closing of the sale, the disposal group is classified as held for sale and measured at the lower of its carrying amount or fair value less estimated costs to sell. As of July 3, 2022, the assets and liabilities that have met the classification as held for sale are $38.4 million and $13.7 million, respectively. The fair value as of July 3, 2022 less costs to sell was estimated based on the terms of the definitive agreement and is $7.3 million. As a result, the Company has recorded a held for sale impairment charge of $18.5 million in the second quarter of 2022, which is recorded as a reduction to the assets in the assets held for sale in the consolidated balance sheet and in impairment of assets held for sale in the consolidated statements of earnings. The impairment charge includes $1.1 million for the anticipated liquidation of the cumulative translation adjustment. On July 20, 2022, subsequent to the end of the second quarter, the sale was completed and the Company no longer operates in Russia. The disposal group did not meet the requirements to be classified as discontinued operations as the sale will not have a material effect on the Company's operations and does not represent a strategic shift in the Company's strategy. Our consolidated earnings before taxes for the second quarter of 2022 and 2021 included $0.7 million and $0.8 million, respectively, from the Russia operations and for June year-to-date 2022 and 2021 included $1.1 million and $1.3 million, respectively, from the Russia operations. The major classes of assets and liabilities of the disposal group that have met the classification of held for sale as of July 3, 2022 are as follows (in millions of dollars):
|  | July 3, 2022
Assets held for sale |  |
Cash and equivalents |  | $ | 12.2 |
Trade accounts receivable, net |  | 23.9 |
Prepaid expenses and other current assets |  | 0.8 |
Property and equipment, net |  | 0.6 |
Operating lease right-of-use assets |  | 0.2 |
Deferred taxes |  | 0.4 |
Other assets |  | 0.3 |
Assets held for sale |  | 38.4 |
Liabilities held for sale |  |
Accounts payable and accrued liabilities |  | (0.5) |
Operating lease liabilities |  | (0.2) |
Accrued payroll and related taxes |  | (8.3) |
Income and other taxes |  | (4.7) |
Liabilities held for sale |  | (13.7) |
Disposal group, net |  | $ | 24.7 |
Cash and equivalents in the consolidated statements of cash flows as of the second quarter-end 2022 includes $12.2 million of cash that is included in the disposal group. The disposal group's cash is not reflected as cash and equivalents in the consolidated balance sheet as of second quarter-end 2022, as the assets of the disposal group are recognized net of the impairment charge as assets held for sale. Subsequent to the second quarter-end, the sale was completed and the Company received proceeds of $7.4 million, including purchase price adjustments, in July 2022. The assets and liabilities will be derecognized in the third quarter of 2022 as well as any adjustments to the loss on the sale. Real Property Kelly Properties, LLC, a wholly owned subsidiary of the Company, entered into an agreement on May 11, 2022 to sell real property located in Troy, Michigan. Accordingly, during the second quarter of 2022, the transaction met the criteria to classify the property as held for sale. The property held for sale includes the property and all improvements to the property, together with all rights and easements. Assets held for sale are recorded at the lower of their carrying value or fair value less estimated costs to sell, and depreciation is suspended on assets upon classification to held for sale. The carrying amount of the property held for sale as of the second quarter-end 2022 is $4.7 million, which is less than the sales price in the purchase agreement, less estimated costs to sell. The proceeds of the sale are expected to be approximately $5.6 million, net of commissions and transaction expenses. The Company has presented these assets as current assets held for sale in the consolidated balance sheet as of the second quarter-end 2022, as the property is expected to be sold in the fourth quarter of 2022 per terms of the purchase agreement.

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