Company: KELYB
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000055135-25-000007
Chunk: 31

Company: KELLY SERVICES INC
Filing Date: 2025-02-13
Form: 10-K
Item: Item 8
Chunk 31
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 the asset group and were recoverable.  Based on the result of our annual goodwill impairment test, we recorded an impairment charge of $72.8 million, which was included in goodwill impairment charge in the consolidated statements of earnings for the year ended 2024, to write-off a portion of Softworld's goodwill balance.  Included in the impairment charge was an $18.4 million tax benefit associated with the impairment.  The remaining goodwill balance for the Softworld reporting unit was $38.5 million as of year-end 2024.  If current expectations of future revenue and profit margins are not met, or if market factors outside of our control change significantly, including discount rate, then the goodwill of the Softworld reporting unit may be further impaired in the future, resulting in goodwill impairment charges.2023 Goodwill Impairment AssessmentIn the fourth quarter of 2023, we performed our annual goodwill impairment testing, which included a step one quantitative test for the Softworld and PTS reporting units.  As a result of the quantitative assessment, we determined that the estimated fair value of the Softworld and PTS reporting units was more than its carrying value.  Additionally, we performed a step zero qualitative analysis for the Education reporting unit to determine whether a further quantitative analysis was necessary and concluded that a step one quantitative analysis was not necessary.  As a result of the quantitative and qualitative assessments, the Company determined goodwill related to these reporting units was not impaired.  As of year-end 2023, the estimated fair value of the Softworld reporting unit exceeded the carrying value by less than 10%.2022 Goodwill ImpairmentRocketPower was acquired during the first quarter of 2022 was allocated to the OCG reportable segment and was deemed to be a separate reporting unit.  During the second half of 2022, customers within the high-tech industry vertical, in which RocketPower specializes, reduced or eliminated their full-time hiring, reducing demand for RocketPower’s services, and on-going economic uncertainty had more broadly impacted the growth in demand for RPO in the near-term.  These changes in market conditions therefore caused triggering events requiring interim impairment tests for both long-lived assets and goodwill as of the third and fourth quarters of 2022.  We performed a long-lived asset recoverability tests for RocketPower and determined that undiscounted future cash flows exceeded the carrying amount of the asset group and were recoverable.  We performed interim step one quantitative tests for RocketPower’s goodwill and determined that the estimated fair value of the