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GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended
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Dec. 29, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill The following table reflects changes in the carrying amount of goodwill during the period by reportable segments:
(in thousands) | PeopleReady | PeopleScout | PeopleManagement | Total company
Balance at | December 25, 2022 |  |  |  |
Goodwill before impairment | $ | 106,304 |  | $ | 141,956 |  | $ | 81,092 |  | $ | 329,352 |
Accumulated impairment charge | (46,210) |  | (109,757) |  | (79,601) |  | (235,568) |
Goodwill | 60,094 |  | 32,199 |  | 1,491 |  | 93,784 |
Goodwill reclassified as held-for-sale (1) | (1,020) |  | — |  | — |  | (1,020) |
Impairment charge | — |  | (8,885) |  | — |  | (8,885) |
Foreign currency translation | — |  | 235 |  | — |  | 235 |
Balance at | December 31, 2023 |  |  |  |
Goodwill before impairment | 105,284 |  | 142,191 |  | 81,092 |  | 328,567 |
Accumulated impairment charge | (46,210) |  | (118,642) |  | (79,601) |  | (244,453) |
Goodwill | 59,074 |  | 23,549 |  | 1,491 |  | 84,114 |
Impairment charge | (59,074) |  | — |  | — |  | (59,074) |
Foreign currency translation | — |  | (497) |  | — |  | (497) |
Balance at | December 29, 2024 |  |  |  |
Goodwill before impairment | 105,284 |  | 141,694 |  | 81,092 |  | 328,070 |
Accumulated impairment charge | (105,284) |  | (118,642) |  | (79,601) |  | (303,527) |
Goodwill | $ | — |  | $ | 23,052 |  | $ | 1,491 |  | $ | 24,543 |
(1) Goodwill was allocated based on the relative fair value of PeopleReady Canada to the total PeopleReady reporting unit prior to being reclassified as held-for-sale. Refer to Note 2: Divestiture for additional details. 2024 impairments Annual impairment test We performed an interim impairment test as of the last day of the fiscal first quarter of 2024, as management determined that a triggering event had occurred as a result of continued decline for our services, overall economic uncertainty, and a sustained decrease in our stock price, which did not result in impairment of goodwill for any reporting unit. Given the proximity of our first quarter interim impairment measurement date to our annual goodwill impairment measurement date (first day of the fiscal second quarter), we performed a qualitative assessment to determine whether it was more likely than not that the fair value of any of our reporting units was less than the carrying value. We considered the current and expected future economic and market conditions and concluded it was unlikely the goodwill associated with our reporting units was impaired as of the first day of our fiscal second quarter. Interim impairment test During the fiscal second quarter of 2024, subsequent to our annual test as of the first day of our fiscal second quarter, management determined that a triggering event had occurred as a result of additional decline in demand for our services, prolonged economic uncertainty, and a further decrease in our stock price. Therefore, we performed an interim impairment test as of the last day of fiscal May 2024 for our reporting units with remaining goodwill. The fair value of each reporting unit was estimated using a weighting of the income and market valuation approaches. The income approach applied a fair value methodology to each reporting unit based on discounted cash flows. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internally-developed forecasts of revenue and profitability, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested. The weighted average cost of capital used in our most recent impairment test ranged from 13.5% to 14.5%. We also applied a market approach, which develops a value correlation based on the market capitalization of similar publicly traded companies, referred to as a multiple, to apply to the forecasted future operating results of the reporting units. The primary market multiples considered for the market approach are revenue and earnings before interest, taxes, depreciation, and amortization. In our most recent impairment test, the market multiples were based on earnings before interest, taxes, depreciation, and amortization for Centerline and PeopleScout RPO, while market multiples based on revenue were used for PeopleReady. The income and market approaches for each reporting unit were equally weighted in our most recent annual impairment test, except for PeopleScout MSP which relied only on the income approach. The combined fair values for all reporting units were then reconciled to the aggregate market value of our shares of common stock on the date of valuation, while considering a reasonable control premium. We consider a reporting unit’s fair value to be substantially in excess of its carrying value at a 20% premium or greater. Based on our most recent impairment test, all of our reporting units’ fair values were substantially in excess of their respective carrying values, except PeopleReady. As a result of our May 2024 interim impairment test, we concluded that the carrying amount of the PeopleReady reporting unit exceeded its fair value. Thus, we recorded a non-cash goodwill impairment charge of $59.1 million, representing the remaining goodwill balance for PeopleReady, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended December 29, 2024. The goodwill impairment was primarily driven by recent performance of the PeopleReady reporting unit and the temporary industrial staffing industry since our annual impairment testing date, as well as a delay in the projected timing of recovery. Additionally, following performance of the annual impairment test, we did not identify any events or conditions that make it more likely than not that an additional impairment may have occurred. Accordingly, no further impairment charges were recognized during the fiscal year ended December 29, 2024. 2023 impairments Annual impairment test As a result of our 2023 annual impairment test, we concluded that the carrying amount of the PeopleScout MSP reporting unit exceeded its fair value and we recorded a non-cash goodwill impairment charge of $8.9 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended December 31, 2023. The PeopleScout MSP goodwill impairment was related to our revised internal revenue projections, which anticipated the 2023 declining trends would continue into future periods. These projections were updated based on our then-current outlook and recent industry analysis, which indicated that our business would underperform due to a strategic lack of investment in technology within an increasingly competitive market. The weighted average cost of capital used in the 2023 annual impairment test ranged from 13.0% to 13.5%. The remaining goodwill balance for the PeopleScout MSP reporting unit was $0.8 million as of December 31, 2023. There were no goodwill impairment charges recorded during fiscal 2022. Intangible assets Finite-lived intangible assets The following table presents our purchased finite-lived intangible assets:
| December 29, 2024 |  | December 31, 2023
(in thousands) | Gross carrying amount | Accumulated amortization | Net carrying amount |  | Gross carrying amount | Accumulated amortization | Net carrying amount
Finite-lived intangible assets (1): |  |  |  |  |  |  |
Customer relationships | $ | 2,637 |  | $ | (2,448) |  | $ | 189 |  |  | $ | 94,270 |  | $ | (90,149) |  | $ | 4,121 |
Trade names/trademarks | 1,632 |  | (758) |  | 874 |  |  | 1,653 |  | (649) |  | 1,004 |
Total finite-lived intangible assets | $ | 4,269 |  | $ | (3,206) |  | $ | 1,063 |  |  | $ | 95,923 |  | $ | (90,798) |  | $ | 5,125 |
(1)Excludes assets that are fully amortized. Amortization expense of our finite-lived intangible assets was $4.1 million, $5.2 million and $5.7 million for the fiscal years ended December 29, 2024, December 31, 2023 and December 25, 2022, respectively. The following table provides the estimated future amortization of finite-lived intangible assets as of December 29, 2024:
(in thousands) |
2025 | $ | 305 |
2026 | 117 |
2027 | 117 |
2028 | 117 |
2029 | 117 |
Thereafter | 290 |
Total future amortization | $ | 1,063 |
We did not identify any events or conditions that make it more likely than not that an impairment of our finite-lived intangible assets may have occurred for the fiscal year ended December 29, 2024. Indefinite-lived intangible assets We held indefinite-lived trade names/trademarks of $4.8 million and $5.4 million as of December 29, 2024 and December 31, 2023, respectively, related to businesses within our PeopleScout and PeopleManagement segments. 2024 impairments During the fiscal second quarter of 2024, we concluded that the carrying amount of a trade name/trademark related to the PeopleManagement segment exceeded its estimated fair value and recorded a non-cash impairment charge of $0.6 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended December 29, 2024. The charge was primarily driven by recent revenue performance of the related business given a decline in demand and overall economic uncertainty. The remaining balance for this trade name/trademark was $2.7 million as of December 29, 2024. As of our fiscal second quarter impairment test, the fair value of the trade name/trademark related to the PeopleScout segment was substantially in excess of its carrying amount of $2.1 million, and therefore did not result in an impairment. Additionally, following performance of the annual impairment test, we did not identify any additional events or conditions that make it more likely than not that an additional impairment may have occurred. Accordingly, no further impairment charges were recognized during the fiscal year ended December 29, 2024. 2023 impairments As a result of our 2023 annual impairment test, we concluded that the carrying amount of a trade name/trademark related to the PeopleManagement segment exceeded its estimated fair value and recorded a non-cash impairment charge of $0.6 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended December 31, 2023. The charge was primarily the result of an increase in the discount rate, as well as lower projected revenues given our then-current outlook. The remaining balance for this trade name/trademark was $3.3 million as of December 31, 2023. There were no intangible asset impairment charges recorded during fiscal 2022.

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