XML 26 R15.htm IDEA: XBRL DOCUMENT v3.25.3
Fair Value Measurements
 9 Months Ended
Sep. 28, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements
5. 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. Long-term debt is related to revolving credit agreements and their carrying values approximate fair value as the interest rates are variable and reflect current market rates.

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 third quarter-end 2025 and year-end 2024 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.

 As of Third Quarter-End 2025
DescriptionTotalLevel 1Level 2Level 3
 (in millions)
Money market funds$4.7 $4.7 $— $— 
Total assets at fair value$4.7 $4.7 $— $— 
Interest rate swaps$(0.1)$— $(0.1)$— 
EMEA staffing indemnification(1.2)— — (1.2)
Brazil indemnification(1.0)— — (1.0)
Total liabilities at fair value$(2.3)$— $(0.1)$(2.2)
 As of Year-End 2024
DescriptionTotalLevel 1Level 2Level 3
 (in millions)
Money market funds$6.4 $6.4 $— $— 
Total assets at fair value$6.4 $6.4 $— $— 
Interest rate swaps$(0.4)$— $(0.4)$— 
EMEA staffing indemnification(2.0)— — (2.0)
Brazil indemnification(1.7)— — (1.7)
Total liabilities at fair value$(4.1)$— $(0.4)$(3.7)

Money Market Funds

Money market funds represent investments in money market funds that hold government securities, all of which are restricted as of third quarter-end 2025 and year-end 2024, and are included in other assets in the consolidated balance sheet. These restricted funds represent cash balances that are required to be maintained to fund disability claims in California. The valuations of money market funds are based on quoted market prices of those accounts as of the respective period end.

Interest Rate Swaps

On July 17, 2024, the Company entered into two interest rate swaps with a notional value of $50.0 million each to manage Secured Overnight Financing Rate (“SOFR”) fluctuations on the securitization facility (see Debt footnote). These contracts were not designated as hedging instruments; therefore, the mark-to-market fair value changes and the cash settlements on the swaps are recognized in earnings. The Company's interest rate swaps were valued with assistance from a third party based on pricing models using observable inputs, such as SOFR forward rates, and are considered level 2 liabilities, which are remeasured quarterly. The 12-month interest rate swap was settled in the second quarter of 2025 (see Debt footnote). As of third quarter-end 2025 and year-end 2024, the Company recorded a liability totaling $0.1 million and $0.4 million, respectively, related to the mark-to-market fair value of the interest rate swaps in accounts payable and accrued liabilities in the consolidated balance sheet. The net gains and losses recorded in other income (expense), net in the consolidated statements of earnings related to these swaps were not significant as of the third quarter-end 2025.

Indemnification Liabilities

As of third quarter-end 2025 and year-end 2024, the Company had an indemnification liability totaling $1.2 million and $2.0 million, respectively, relating to the sale of the EMEA staffing operations in January 2024, with the decrease attributable to exchange rate fluctuations. In the third quarter of 2025, the indemnification liability was reassessed, and as a result of this reassessment, $0.3 million was recorded in (gain) loss on sale of EMEA staffing operations in the consolidated statements of earnings. The liability is included in other long-term liabilities in the consolidated balance sheet and the associated expense is included in the gain on sale of EMEA staffing operations in the consolidated statements of earnings. As part of the sale, the Company agreed to indemnify the buyer for losses and costs incurred in connection with certain events or occurrences for an indefinite term. The Company's maximum exposure under these indemnifications is not estimable at this time due to uncertainties to potential outcomes and the facts and circumstances involved in the agreement. Management believes the risk of material exposure is remote. The initial 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 measured on a recurring basis.

As of third quarter-end 2025, the Company has an indemnification liability totaling $1.0 million in other long-term liabilities, and $1.7 million at year-end 2024, with $0.9 million in accounts payable and accrued liabilities and $0.8 million in other long-term liabilities in 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.
Earnout Liabilities

In the second quarter of 2024, the Company recorded an earnout liability relating to the 2024 acquisition of MRP totaling $3.4 million (see Acquisitions and Disposition footnote). The valuation of the earnout liability was initially established using the Monte Carlo simulation model and represented the fair value and is considered a level 3 liability. The maximum total cash payment related to the earnout liability was $60.0 million. In the fourth quarter of 2024, the liability was reassessed and the fair value was determined to be zero. The earnout period concluded in the first quarter of 2025 and no further liability will be recognized.

Equity Investment Without Readily Determinable Fair Value

In 2022, the Company invested in equity securities with an initial investment of $0.4 million, which was included in other assets in the consolidated balance sheet. This investment is 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. In the fourth quarter of 2024, the Company entered into a transaction to sell a portion of its shares and as a result of the sale, the value of the remaining investment was remeasured at $3.5 million as of year-end 2024. As of third quarter-end 2025, the value of the investment was $3.5 million, representing total cost plus observable price changes to date.

In the first quarter of 2025, the Company sold its 2.5% interest in PersolKelly Pte. Ltd. for cash proceeds of $6.4 million. The investment was measured using the measurement alternative for equity investments without a readily determinable fair value and had a carrying value of $6.4 million as of year-end 2024 and at the time of the sale, representing total cost plus observable price changes to date. As a result, the sale had no impact on other income (expense), net in the consolidated statements of earnings.

Assets Measured at Fair Value on a Nonrecurring Basis

In addition to assets that are recorded at fair value on a recurring basis, annual and interim impairment tests may subject the Company’s reporting units with goodwill and long-lived assets to nonrecurring fair value measurement. We perform an annual impairment test for goodwill in the fourth quarter of each year and for long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

During the third quarter of 2025, we concluded that there was a triggering event due to declines in the business performance related to the MRP and Softworld reporting units as a result of dynamic macroeconomic conditions and projected growth rates were revised accordingly. As a result of the MRP and Softworld quantitative assessments, the Company determined that both MRP and Softworld’s estimated fair value of the reporting units no longer exceeded the carrying value. The Company recorded goodwill impairment charges of $102.0 million.

These changes in circumstances were also indicators that the respective long-lived assets may not be recoverable. The Company performed long-lived asset recoverability tests for MRP and Softworld and determined that undiscounted future cash flows exceeded the carrying amount of the asset groups and were recoverable.

The various inputs to the fair value models are considered level 3. The Company engaged third-party valuation specialists and used industry-accepted valuation models and criteria that were reviewed and approved by various levels of management.

Refer to the Goodwill footnote for additional details on impairment charges related to the third quarter of 2025 as well as the valuation methodologies and inputs used to measure fair value.