Company: KELYB
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000055135-25-000080
Chunk: 73

Company: KELLY SERVICES INC
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 73
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 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.

6. Integration, Realignment and Restructuring2025 ActionsIn the first quarter of 2025, the Company launched various initiatives aimed at integrating MRP and other prior acquisitions, combining operating segments, and further aligning processes and technology across the Company.  The costs incurred related to these integration and realignment initiatives totaled $3.5 million and $20.3 million during the third quarter and September 

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KELLY SERVICES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)(UNAUDITED)

year-to-date 2025, respectively.  For the third quarter 2025, integration and realignment costs consisted of $2.1 million of IT-related charges and $1.4 million of fees and other costs to execute the initiatives.  For September year-to-date 2025, integration and realignment costs consisted of $9.1 million of IT-related charges, $6.5 million of severance and $4.7 million of fees and other costs to execute the initiatives.  The severance costs incurred as a part of these efforts are primarily accounted for in accordance with ASC 712 Compensation - Nonretirement Postemployment Benefits.  The integration and realignment costs are recorded in selling, general and administrative (“SG&A”) expenses in the consolidated statements of earnings.The integration and realignment costs included in SG&A are detailed below for the third quarter and September year-to-date 2025 (in millions):Third Quarter 2025IT-related ChargesSeveranceFees and OtherTotalEnterprise Talent Management$— $(0.1)$0.1 $— Science, Engineering & Technology0.4 — 0.1 0.5 Education— 0.1 —