Company: KELYB
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0000055135-25-000016
Chunk: 9

Company: KELLY SERVICES INC
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 9
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 completed the sale of its EMEA staffing operations (“disposal group”), which was included in the Company's former International operating segment, to Gi Group Holdings S.P.A. (“Gi”).  Upon closing, the Company received cash proceeds of $110.6 million, or $77.1 million net of cash disposed, which was included in investing activities in the consolidated statements of cash flows.  The total gain on the transaction as of first quarter-end 2024 was $11.6 million, which was recorded in the gain on sale of EMEA staffing operations in the consolidated statements of earnings.  The Company expects to receive additional net cash proceeds to reflect the cash-free, debt-free transaction basis, as well as working capital and other adjustments.  The Company will not receive any proceeds from the contingent consideration opportunity associated with the transaction.  In the first quarter of 2024, the Company recorded a euro-denominated receivable from Gi of $26.9 million representing the adjustments that were determinable and expected to be received.  In the second quarter of 2024, the Company recorded negative working capital and other adjustments of $10.1 million, which reduced the net receivable from Gi.  As of first quarter-end 2025, the net receivable was $17.0 million, compared to $16.4 million as of year-end 2024, with the change of $0.6 million related to foreign currency remeasurements during the first quarter of 2025.  The Company is actively reconciling the receivable in accordance with the purchase agreement and expects it to be settled upon completion of this process.  The receivable is included in prepaid expenses and other current assets in the consolidated balance sheet and included in the gain on the transaction.The disposal group did not meet the requirements to be classified as discontinued operations as the sale did not have a material effect on the Company's operations and did not represent a strategic shift in the Company's strategy.

5. Fair Value MeasurementsTrade 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 BasisThe following tables present assets and liabilities measured at fair value on a recurring basis as of