Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 01, 2017 | Oct. 30, 2017 | |
Document Information [Line Items] | ||
Entity Registrant Name | KELLY SERVICES INC | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Central Index Key | 55,135 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Oct. 1, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 34,991,496 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 3,434,362 |
Consolidated Statements of Earn
Consolidated Statements of Earnings (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
Income Statement [Abstract] | ||||
Revenue from services | $ 1,328.8 | $ 1,247.8 | $ 3,952.1 | $ 3,972.4 |
Cost of services | 1,098.1 | 1,032.7 | 3,261 | 3,294.1 |
Gross profit | 230.7 | 215.1 | 691.1 | 678.3 |
Selling, general and administrative expenses | 212.5 | 196.3 | 636.2 | 634.9 |
Earnings from operations | 18.2 | 18.8 | 54.9 | 43.4 |
Gain on investment in TS Kelly Asia Pacific | 0 | 87.2 | 0 | 87.2 |
Other expense, net | (0.4) | (0.4) | (2.5) | (1.3) |
Earnings before taxes and equity in net earnings (loss) of affiliate | 17.8 | 105.6 | 52.4 | 129.3 |
Income tax (benefit) expense | (4.1) | 24.7 | 0.1 | 28.2 |
Net earnings before equity in net earnings (loss) of affiliate | 21.9 | 80.9 | 52.3 | 101.1 |
Equity in net earnings (loss) of affiliate | 1.1 | 0 | 1.6 | (0.1) |
Net earnings | $ 23 | $ 80.9 | $ 53.9 | $ 101 |
Basic earnings per share (in dollars per share) | $ 0.59 | $ 2.08 | $ 1.38 | $ 2.59 |
Diluted earnings per share (in dollars per share) | 0.58 | 2.06 | 1.37 | 2.58 |
Dividends per share (in dollars per share) | $ 0.075 | $ 0.075 | $ 0.225 | $ 0.20 |
Average shares outstanding (millions): | ||||
Basic (in shares) | 38.3 | 38.1 | 38.3 | 38 |
Diluted (in shares) | 38.8 | 38.4 | 38.8 | 38.3 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 23 | $ 80.9 | $ 53.9 | $ 101 |
Other comprehensive income, net of tax: | ||||
Foreign currency translation adjustments, net of tax expense of $0.2, tax benefit of $1.8, tax expense of $0.3 and tax benefit of $1.7, respectively | 3.4 | 1.8 | 16 | 13.1 |
Less: Reclassification adjustments included in net earnings | 0 | 0.2 | 0 | (0.1) |
Foreign currency translation adjustments | 3.4 | 2 | 16 | 13 |
Unrealized gains on investment, net of tax expense of $12.9, $0.6, $21.9 and $4.3, respectively | 28.8 | 1.3 | 48.6 | 8.8 |
Other comprehensive income | 32.2 | 3.3 | 64.6 | 21.8 |
Comprehensive income | $ 55.2 | $ 84.2 | $ 118.5 | $ 122.8 |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustments, tax expense (benefit) | $ 0.2 | $ (1.8) | $ 0.3 | $ (1.7) |
Unrealized gains (losses) on investments, tax expense (benefit) | $ 12.9 | $ 0.6 | $ 21.9 | $ 4.3 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Oct. 01, 2017 | Jan. 01, 2017 |
CURRENT ASSETS: | ||
Cash and equivalents | $ 22.2 | $ 29.6 |
Trade accounts receivable, less allowances of $13.1 and $12.5, respectively | 1,271.7 | 1,138.3 |
Prepaid expenses and other current assets | 70 | 46.7 |
Total current assets | 1,363.9 | 1,214.6 |
Property and equipment: | ||
Property and equipment | 285 | 270 |
Accumulated depreciation | (203.6) | (189.2) |
Net property and equipment | 81.4 | 80.8 |
Deferred taxes | 192 | 180.1 |
Goodwill | 107.1 | 88.4 |
Investment in equity affiliate | 116.4 | 114.8 |
Other assets | 475.9 | 349.4 |
Total noncurrent assets | 972.8 | 813.5 |
TOTAL ASSETS | 2,336.7 | 2,028.1 |
CURRENT LIABILITIES: | ||
Short-term borrowings | 23.9 | 0 |
Accounts payable and accrued liabilities | 496.1 | 455.1 |
Accrued payroll and related taxes | 312.6 | 241.5 |
Accrued insurance | 25.6 | 23.4 |
Income and other taxes | 60 | 51.1 |
Total current liabilities | 918.2 | 771.1 |
NONCURRENT LIABILITIES: | ||
Accrued insurance | 49.7 | 45.5 |
Accrued retirement benefits | 175 | 157.4 |
Other long-term liabilities | 66.8 | 42.1 |
Total noncurrent liabilities | 291.5 | 245 |
Commitments and contingencies (see contingencies footnote) | ||
Treasury stock, at cost | ||
Paid-in capital | 30 | 28.6 |
Earnings invested in the business | 968.8 | 923.6 |
Accumulated other comprehensive income | 123.3 | 58.7 |
Total stockholders’ equity | 1,127 | 1,012 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 2,336.7 | 2,028.1 |
Class A Common Stock | ||
Capital stock, $1.00 par value | ||
Common stock, value | 36.6 | 36.6 |
Treasury stock, at cost | ||
Treasury stock, value | (34.6) | (38.4) |
Class B Common Stock | ||
Capital stock, $1.00 par value | ||
Common stock, value | 3.5 | 3.5 |
Treasury stock, at cost | ||
Treasury stock, value | $ (0.6) | $ (0.6) |
Consolidated Balance Sheets (U6
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Millions, $ in Millions | Oct. 01, 2017 | Jan. 01, 2017 |
Allowance for trade accounts receivables | $ 13.1 | $ 12.5 |
Class A Common Stock | ||
Capital stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares issued (in shares) | 36.6 | 36.6 |
Treasury stock, common stock (in shares) | 1.7 | 1.9 |
Class B Common Stock | ||
Capital stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares issued (in shares) | 3.5 | 3.5 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Millions | Total | Common StockCapital Stock, Class A common stock | Common StockCapital Stock, Class B common stock | Treasury StockTreasury Stock, Class A common stock | Treasury StockTreasury Stock, Class B common stock | Paid-in Capital | Earnings Invested in the Business | Accumulated Other Comprehensive Income |
Beginning balance at Jan. 03, 2016 | $ 36.6 | $ 3.5 | $ (43.7) | $ (0.6) | $ 25.4 | $ 813.5 | $ 60.7 | |
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of restricted stock and other | 5.2 | 0 | 0.8 | |||||
Net earnings | $ 101 | 101 | ||||||
Dividends | (7.7) | |||||||
Other comprehensive income, net of tax | 21.8 | 21.8 | ||||||
Ending balance at Oct. 02, 2016 | 1,016.5 | 36.6 | 3.5 | (38.5) | (0.6) | 26.2 | 906.8 | 82.5 |
Beginning balance at Jul. 03, 2016 | 36.6 | 3.5 | (41.5) | (0.6) | 28.1 | 828.8 | 79.2 | |
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of restricted stock and other | 3 | 0 | (1.9) | |||||
Net earnings | 80.9 | 80.9 | ||||||
Dividends | (2.9) | |||||||
Other comprehensive income, net of tax | 3.3 | 3.3 | ||||||
Ending balance at Oct. 02, 2016 | 1,016.5 | 36.6 | 3.5 | (38.5) | (0.6) | 26.2 | 906.8 | 82.5 |
Beginning balance at Jan. 01, 2017 | 1,012 | 36.6 | 3.5 | (38.4) | (0.6) | 28.6 | 923.6 | 58.7 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of restricted stock and other | 3.8 | 0 | 1.4 | |||||
Net earnings | 53.9 | 53.9 | ||||||
Dividends | (8.7) | |||||||
Other comprehensive income, net of tax | 64.6 | 64.6 | ||||||
Ending balance at Oct. 01, 2017 | 1,127 | 36.6 | 3.5 | (34.6) | (0.6) | 30 | 968.8 | 123.3 |
Beginning balance at Jul. 02, 2017 | 36.6 | 3.5 | (37) | (0.6) | 31.1 | 948.7 | 91.1 | |
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of restricted stock and other | 2.4 | 0 | (1.1) | |||||
Net earnings | 23 | 23 | ||||||
Dividends | (2.9) | |||||||
Other comprehensive income, net of tax | 32.2 | 32.2 | ||||||
Ending balance at Oct. 01, 2017 | $ 1,127 | $ 36.6 | $ 3.5 | $ (34.6) | $ (0.6) | $ 30 | $ 968.8 | $ 123.3 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 01, 2017 | Oct. 02, 2016 | |
Cash flows from operating activities: | ||
Net earnings | $ 53.9 | $ 101 |
Noncash adjustments: | ||
Depreciation and amortization | 16.5 | 16 |
Provision for bad debts | 3.6 | 6.1 |
Stock-based compensation | 6.8 | 7.6 |
Gain on investment in TS Kelly Asia Pacific equity affiliate | 0 | (87.2) |
Other, net | (2.3) | (2.2) |
Changes in operating assets and liabilities, net of acquisition | (45.6) | (13.1) |
Net cash from operating activities | 32.9 | 28.2 |
Cash flows from investing activities: | ||
Capital expenditures | (14.7) | (7.8) |
Acquisition of company, net of cash received | (37.2) | 0 |
Net cash proceeds from investment in TS Kelly Asia Pacific equity affiliate | 0 | 18.8 |
Proceeds from repayment of loan to TS Kelly equity affiliate | 0.6 | 0 |
Other investing activities | 0 | (0.4) |
Net cash (used in) from investing activities | (51.3) | 10.6 |
Cash flows from financing activities: | ||
Net change in short-term borrowings | 23.9 | (47.8) |
Dividend payments | (8.7) | (7.7) |
Payments of tax withholding for restricted shares | (1.7) | (2.1) |
Other financing activities | (0.1) | 0.4 |
Net cash from (used in) financing activities | 13.4 | (57.2) |
Effect of exchange rates on cash and equivalents | (2.4) | 3.8 |
Net change in cash and equivalents | (7.4) | (14.6) |
Cash and equivalents at beginning of period | 29.6 | 42.2 |
Cash and equivalents at end of period | $ 22.2 | $ 27.6 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Oct. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements of Kelly Services, Inc. (the “Company,” “Kelly,” “we” or “us”) have been prepared in accordance with Rule 10-01 of Regulation S-X and do not include all the information and notes required by generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair statement of the results of the interim periods, have been made. The results of operations for such interim periods are not necessarily indicative of results of operations for a full year. The unaudited consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal year ended January 1, 2017 , included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 17, 2017 (the 2016 consolidated financial statements). The Company’s third fiscal quarter ended on October 1, 2017 ( 2017 ) and October 2, 2016 ( 2016 ), each of which contained 13 weeks. The corresponding September year to date periods for 2017 and 2016 each contained 39 weeks. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. SG&A expenses for the 13 and 39 weeks ended October 1, 2017 include a $2.8 million and $1.4 million , respectively, benefit resulting from an out-of-period correction of expenses that were overstated in prior periods. The out-of-period errors and adjustments did not have a material effect on any of the periods impacted. Certain reclassifications have been made to the prior years’ consolidated financial statements to conform to the current year’s presentation. |
Acquisition
Acquisition | 9 Months Ended |
Oct. 01, 2017 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition On September 5, 2017, Kelly Services USA, LLC, a wholly owned subsidiary of the Company, acquired 100% of the issued and outstanding shares of Teachers On Call, Inc. (“TOC”), an educational staffing firm in the U.S. for a purchase price of $41.0 million . Under terms of the purchase agreement, the purchase price was adjusted for cash held by TOC at the closing date less an estimated working capital adjustment resulting in the Company paying cash of $39.0 million at closing. The final purchase price is subject to a final working capital adjustment calculation, which is not expected to be material. The purchase price allocation for this acquisition is preliminary and could change. This acquisition will increase our market share in the educational staffing market in the U.S. TOC’s results of operations are included in the Americas Staffing segment as of the 2017 third quarter end. Pro forma results of operations for this acquisition have not been presented as it is not material to the consolidated statement of earnings. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the date of the acquisition (in millions of dollars): Cash $ 1.8 Other current assets 3.6 Goodwill 18.7 Intangibles 18.3 Other noncurrent assets 0.5 Current liabilities (3.9 ) Purchase price paid at closing $ 39.0 Included in the assets purchased was approximately $18.3 million of intangible assets, made up of $12.0 million in customer relationships, $4.8 million associated with TOC’s trademark and $1.5 million for a candidate database. The customer relationships will be amortized over 10 years with no residual value and the database will be amortized over four years with no residual value. The trademark has an indefinite life. Goodwill generated from this acquisition is primarily attributable to expected synergies from combining operations and expanding market potential, and is assigned to the Americas Staffing reporting unit (see Goodwill footnote). The amount of goodwill expected to be deductible for tax purposes is approximately $18.3 million . An indemnification asset of $2.8 million was recognized as of the acquisition date related to pre-acquisition tax liabilities. |
Investment in TS Kelly Asia Pac
Investment in TS Kelly Asia Pacific | 9 Months Ended |
Oct. 01, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in TS Kelly Asia Pacific | Investment in TS Kelly Asia Pacific The Company has a 49% ownership interest in TS Kelly Asia Pacific. The operating results of the Company’s interest in TS Kelly Asia Pacific are accounted for on a one-quarter lag under the equity method and are reported in the equity in net earnings (loss) of affiliate in the consolidated statement of earnings. These operating results include the operating results of the Company’s interest in TS Kelly Workforce Solutions, a previous joint venture in which the Company held a 49% interest, which was transferred to TS Kelly Asia Pacific during the first quarter of 2017. In the third quarter of 2016, the Company recorded a pretax gain of $87.2 million on the investment in TS Kelly Asia Pacific in the consolidated statement of earnings, which represented the fair value of the Company’s retained investment in TS Kelly Asia Pacific in addition to the cash received less the carrying value of net assets transferred to the joint venture. The investment in equity affiliate on the Company’s consolidated balance sheet totaled $116.4 million as of third quarter-end 2017 and $114.8 million as of year-end 2016 . The net amount due to TS Kelly Asia Pacific, a related party, was $3.8 million as of the third quarter-end 2017 and $1.1 million as of year-end 2016 . The amount included in trade accounts payable for staffing services provided by TS Kelly Asia Pacific as a supplier to CWO programs was $2.4 million as of third quarter-end 2017 and $3.1 million as of year-end 2016 . |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Oct. 01, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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. Assets Measured at Fair Value on a Recurring Basis The following tables present assets measured at fair value on a recurring basis on the consolidated balance sheet as of third quarter-end 2017 and year-end 2016 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. Fair Value Measurements on a Recurring Basis Description Total Level 1 Level 2 Level 3 (In millions of dollars) Money market funds $ 4.2 $ 4.2 $ — $ — Available-for-sale investment 212.4 212.4 — — Total assets at fair value $ 216.6 $ 216.6 $ — $ — Fair Value Measurements on a Recurring Basis Description Total Level 1 Level 2 Level 3 (In millions of dollars) Money market funds $ 4.0 $ 4.0 $ — $ — Available-for-sale investment 141.2 141.2 — — Total assets at fair value $ 145.2 $ 145.2 $ — $ — Money market funds as of third quarter-end 2017 and 2016 represent investments in money market accounts, all of which are restricted as to use and included in other assets on the consolidated balance sheet. The valuations of money market funds were based on quoted market prices of those accounts as of the respective period end. Available-for-sale investment represents the Company’s investment in Persol Holdings (formerly Temp Holdings), the Company’s joint venture partner in TS Kelly Asia Pacific, and is included in other assets on the consolidated balance sheet. The valuation is based on the quoted market price of Persol Holdings stock on the Tokyo Stock Exchange as of the period end. The unrealized gain, net of tax, of $28.8 million for the third quarter of 2017 and $1.3 million for the third quarter of 2016 was recorded in other comprehensive income, and in accumulated other comprehensive income, a component of stockholders’ equity. The unrealized gain, net of tax, of $48.6 million for September year to date 2017 and $8.8 million for September year to date 2016 was recorded in other comprehensive income, as well as in accumulated other comprehensive income. The cost of this yen-denominated investment, which fluctuates based on foreign exchange rates, was $18.4 million as of the third quarter-end 2017 and $17.7 million at year-end 2016 . Assets Measured at Fair Value on a Nonrecurring Basis We test goodwill for impairment annually and whenever events or circumstances make it more likely than not that an impairment may have occurred. U.S. GAAP requires that goodwill be tested for impairment at a reporting unit level. We have determined that our reporting units are the same as our operating and reportable segments. The realignment of the Company’s operations into three reportable segments effective with the first quarter of 2017 (see Goodwill and Segment Disclosures footnotes) resulted in a change in our reporting units. As a result, we completed a step one quantitative test for our new reporting units with goodwill. We determined the estimated fair value of each reporting unit tested exceeded its related carrying value. As a result of these quantitative assessments, we determined it was more likely than not that the fair value of each of the reporting units was in excess of its carrying value. |
Restructuring
Restructuring | 9 Months Ended |
Oct. 01, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In the first quarter of 2017, the Company took restructuring actions in Global Talent Solutions and Americas Staffing to optimize service delivery models and deliver cost savings in 2017. Restructuring costs incurred in the first quarter of 2017 totaled $2.4 million . Global Talent Solutions incurred $2.0 million and Americas Staffing incurred $0.4 million . All costs, which are primarily severance costs, were recorded entirely in selling, general and administrative (“SG&A”) expenses in the consolidated statement of earnings. A summary of the global restructuring balance sheet accrual, primarily included in accrued payroll and related taxes, is detailed below (in millions of dollars). Balance as of year-end 2016 $ 0.5 Additions charged to Global Talent Solutions 2.0 Additions charged to Americas Staffing 0.4 Reductions for cash payments related to all restructuring activities (0.7 ) Balance as of first quarter-end 2017 2.2 Reductions for cash payments related to all restructuring activities (1.3 ) Balance as of second quarter-end 2017 0.9 Reductions for cash payments related to all restructuring activities (0.4 ) Balance as of third quarter-end 2017 $ 0.5 The remaining balance of $0.5 million as of third quarter-end 2017 represents primarily severance costs, and the majority is expected to be paid by the end of 2017. No material adjustments are expected to be recorded. |
Goodwill
Goodwill | 9 Months Ended |
Oct. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill As discussed in the Segment Disclosures footnote, during the first quarter of 2017 the Company’s chief operating decision maker (“CODM”) changed the way he regularly reviews information for purposes of allocating resources and assessing performance, which resulted in a change in our operating segments and reporting units. We allocated goodwill to our new reporting units using a relative fair value approach. In addition, as discussed in the Fair Value Measurements footnote, we completed an assessment of any potential goodwill impairment for all reporting units with goodwill and determined that no impairment existed. See Acquisition footnote for a description of the additions to goodwill in the third quarter of 2017. The additions in the carrying amount of goodwill for the third quarter-end 2017 are included in the table below. As of Year-End 2016 As of Third Quarter-End 2017 Goodwill, Accumulated Impairment Losses Goodwill, Allocation of Goodwill Additions to Goodwill Goodwill (In millions of dollars) Americas Commercial $ 40.0 $ (16.4 ) $ 23.6 $ (23.6 ) $ — $ — Americas PT 37.9 — 37.9 (37.9 ) — — EMEA Commercial 50.4 (50.4 ) — — — — EMEA PT 22.0 (22.0 ) — — — — APAC Commercial 12.1 (12.1 ) — — — — APAC PT — — — — — — OCG 26.9 — 26.9 (26.9 ) — — Americas Staffing — — — 25.9 18.7 44.6 Global Talent Solutions — — — 62.5 — 62.5 International Staffing — — — — — — $ 189.3 $ (100.9 ) $ 88.4 $ — $ 18.7 $ 107.1 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Oct. 01, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The changes in accumulated other comprehensive income by component, net of tax, for the third quarter and September year to date 2017 and 2016 are included in the tables below. Amounts in parentheses indicate debits. Reclassification adjustments out of accumulated other comprehensive income, as shown in the tables below, were recorded in the other expense, net line item in the consolidated statement of earnings. Third Quarter 2017 Foreign Unrealized Pension Total (In millions of dollars) Beginning balance $ (10.7 ) $ 103.6 $ (1.8 ) $ 91.1 Other comprehensive income before reclassifications 3.4 28.8 — 32.2 Amounts reclassified from accumulated other comprehensive income — — — — Net current-period other comprehensive income 3.4 28.8 — 32.2 Ending balance $ (7.3 ) $ 132.4 $ (1.8 ) $ 123.3 September Year to Date 2017 Foreign Unrealized Pension Total (In millions of dollars) Beginning balance $ (23.3 ) $ 83.8 $ (1.8 ) $ 58.7 Other comprehensive income before reclassifications 16.0 48.6 — 64.6 Amounts reclassified from accumulated other comprehensive income — — — — Net current-period other comprehensive income 16.0 48.6 — 64.6 Ending balance $ (7.3 ) $ 132.4 $ (1.8 ) $ 123.3 Third Quarter 2016 Foreign Unrealized Pension Total (In millions of dollars) Beginning balance $ (11.6 ) $ 92.4 $ (1.6 ) $ 79.2 Other comprehensive income before reclassifications 1.8 1.3 — 3.1 Amounts reclassified from accumulated other comprehensive income 0.2 — — 0.2 Net current-period other comprehensive income 2.0 1.3 — 3.3 Ending balance $ (9.6 ) $ 93.7 $ (1.6 ) $ 82.5 September Year to Date 2016 Foreign Currency Translation Adjustments Unrealized Gains and Losses on Investment Pension Liability Adjustments Total (In millions of dollars) Beginning balance $ (22.6 ) $ 84.9 $ (1.6 ) $ 60.7 Other comprehensive income before reclassifications 13.1 8.8 — 21.9 Amounts reclassified from accumulated other comprehensive income (0.1 ) — — (0.1 ) Net current-period other comprehensive income 13.0 8.8 — 21.8 Ending balance $ (9.6 ) $ 93.7 $ (1.6 ) $ 82.5 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Oct. 01, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The reconciliation of basic and diluted earnings per share on common stock for the third quarter and September year to date 2017 and 2016 follows (in millions of dollars except per share data): Third Quarter September Year to Date 2017 2016 2017 2016 Net earnings $ 23.0 $ 80.9 $ 53.9 $ 101.0 Less: earnings allocated to participating securities (0.3 ) (1.8 ) (0.9 ) (2.3 ) Net earnings available to common shareholders $ 22.7 $ 79.1 $ 53.0 $ 98.7 Average shares outstanding (millions): Basic 38.3 38.1 38.3 38.0 Dilutive share awards 0.5 0.3 0.5 0.3 Diluted 38.8 38.4 38.8 38.3 Basic earnings per share $ 0.59 $ 2.08 $ 1.38 $ 2.59 Diluted earnings per share $ 0.58 $ 2.06 $ 1.37 $ 2.58 Potentially dilutive shares outstanding are primarily related to performance shares for the third quarter and September year to date 2017 and 2016 . Stock options excluded from the computation of diluted earnings per share due to their anti-dilutive effect for September year to date 2016 were not significant, and all remaining stock options expired in the second quarter 2016. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Oct. 01, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation For the third quarter 2017 and 2016 , respectively, the Company recognized stock compensation expense of $2.6 million and $2.4 million , and related tax benefit of $1.5 million and $0.9 million . For September year to date 2017 and 2016 , respectively, the Company recognized stock compensation expense of $6.8 million and $7.6 million , and related tax benefit of $3.3 million and $2.9 million . Performance Shares During 2017, the Company granted performance awards associated with the Company’s Class A stock to certain senior officers. The payment of performance shares, which will be satisfied with the issuance of shares out of treasury stock, is contingent upon the achievement of specific performance goals over a stated period of time. The maximum number of performance shares that may be earned is 200% of the target shares originally granted. These awards have a three -year performance period and will cliff vest after the approval by the Compensation Committee, if not forfeited by the recipient. No dividends are paid on these performance shares. Financial measure performance goals may be earned upon the achievement of two financial goals and had a weighted average grant date fair value of $21.07 . For each of the two financial measures, there are annual goals set in February of each year, with the total award payout based on a cumulative average of the 2017, 2018 and 2019 goals. Accordingly, the Company remeasures the fair value of the 2017 and 2016 financial measure performance shares each reporting period until the third year goals are set, after which the fair value will be fixed for the remaining performance period. As of third quarter-end 2017 , for the performance shares granted in 2017 and 2016, the current fair value for the financial measure performance shares was $24.22 and $24.29 , respectively. Total shareholder return (“TSR”) performance shares may be earned based on the Company’s TSR relative to the S&P SmallCap 600 Index. The TSR performance shares have an estimated fair value of $20.16 , which was computed using a Monte Carlo simulation model incorporating assumptions for inputs of expected stock price volatility, dividend yield and risk-free interest rate. A summary of the status of all nonvested performance shares at target for September year to date 2017 is presented as follows below (in thousands of shares except per share data). Forfeitures primarily relate to the retirement of the Company’s former President and Chief Executive Officer in the second quarter of 2017. Financial Measure Performance Shares TSR Performance Shares Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Nonvested at year-end 2016 499 $ 19.17 208 $ 17.49 Granted 286 21.32 101 20.16 Vested — — — — Forfeited (182 ) 20.32 (65 ) 18.99 Nonvested at third quarter-end 2017 603 $ 21.19 244 $ 18.20 Restricted Stock A summary of the status of nonvested restricted stock as of third quarter-end 2017 and year-to-date changes, is presented as follows below (in thousands of shares except per share data). Forfeitures primarily relate to the retirement of the Company’s former President and Chief Executive Officer during the second quarter of 2017. Shares Weighted Average Grant Date Fair Value Nonvested at year-end 2016 653 $ 16.58 Granted 189 21.90 Vested (74 ) 17.25 Forfeited (163 ) 16.91 Nonvested at second quarter-end 2017 605 18.07 Granted 19 21.85 Vested (164 ) 16.73 Forfeited (2 ) 19.82 Nonvested at third quarter-end 2017 458 $ 18.71 |
Other Expense, Net
Other Expense, Net | 9 Months Ended |
Oct. 01, 2017 | |
Other Income and Expenses [Abstract] | |
Other Expense, Net | Other Expense, Net Included in other expense, net for the third quarter and September year to date 2017 and 2016 are the following: Third Quarter September Year to Date 2017 2016 2017 2016 (In millions of dollars) Interest income $ 0.2 $ 0.2 $ 0.5 $ 0.3 Interest expense (0.7 ) (0.9 ) (1.8 ) (2.7 ) Dividend income — — 0.7 0.6 Foreign exchange gain (loss) 0.1 0.3 (1.9 ) 0.5 Other expense, net $ (0.4 ) $ (0.4 ) $ (2.5 ) $ (1.3 ) |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 01, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax benefit was $4.1 million (a (22.9)% effective tax rate) for the third quarter of 2017 and income tax expense was $24.7 million (a 23.4% effective tax rate) for the third quarter of 2016 . Income tax expense was $0.1 million (a 0.2% effective tax rate) for September year to date 2017 and $28.2 million (a 21.8% effective tax rate) for September year to date 2016 . Our tax expense is affected by recurring items, such as the amount of pretax income and its mix by jurisdiction, U.S. work opportunity credits and the change in cash surrender value of non-taxable investments in life insurance policies. It is also affected by discrete items that may occur in any given period but are not consistent from period to period, such as tax law changes, or changes in judgment regarding the realizability of deferred tax assets. Income tax expense in the third quarter of 2017 included a $5.1 million benefit from the release of a valuation allowance in Germany, while the third quarter of 2016 included a $23.5 million charge from the gain on the investment in TS Kelly Asia Pacific. For September year to date 2017, income tax expense also benefitted from the release of a valuation allowance in Norway in the second quarter. |
Contingencies
Contingencies | 9 Months Ended |
Oct. 01, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies In the ordinary course of business the Company is the subject of, or party to, various pending or threatened legal actions which could result in a material adverse outcome for which the related damages may not be estimable. As previously disclosed, the Company entered into a settlement with plaintiffs in Hillson et. al. v Kelly Services in order to avoid the cost of continued litigation. On August 17, 2017, the District Court approved the settlement and entered a Final Order of Judgment and Dismissal. The Company made the final payment, which was accrued in 2015, on September 19, 2017. In addition, the Company is continuously engaged in litigation arising in the ordinary course of its business, such as matters alleging employment discrimination, alleging wage and hour violations, or enforcing the restrictive covenants in the Company’s employment agreements. There are matters that are currently stayed pending a decision from the Supreme Court of the United States on whether the Company’s arbitration provision is enforceable. We record accruals for loss contingencies when we believe it is probable that liability has been incurred and the amount of loss can be reasonably estimated. Such accruals are recorded in accounts payable and accrued liabilities on the consolidated balance sheet. While the ultimate outcome of these matters cannot be predicted with certainty, we believe that the resolution of any such proceedings will not have a material adverse effect on our financial condition, results of operations or cash flows. |
Segment Disclosures
Segment Disclosures | 9 Months Ended |
Oct. 01, 2017 | |
Segment Reporting [Abstract] | |
Segment Disclosures | Segment Disclosures The Company’s segments are based on the organizational structure for which financial results are regularly evaluated by the CODM to determine resource allocation and assess performance. During the first quarter of 2017, the Company’s CODM, who was previously the Company’s Chief Executive Officer (“CEO”) and Chief Operating Officer, was determined to be the Company’s CEO. The Company regularly assesses its organizational structure, product/service offerings and information evaluated by the CODM to determine whether any changes have occurred that would impact its segment reporting structure. During the first quarter of 2017, the Company realigned its business into three reportable segments, which reflect how the Company delivers services to customers and how its business is organized internally. These segments are: (1) Americas Staffing, (2) Global Talent Solutions (“GTS”) and (3) International Staffing. Accordingly, prior year’s segment information was recast to conform to the current presentation. Intersegment revenue represents revenue earned between the reportable segments and is eliminated from total segment revenue from services. Americas Staffing represents the Company’s branch-delivered staffing business in the U.S., Canada, Puerto Rico, Mexico and Brazil. International Staffing represents the EMEA region branch-delivered staffing business, as well as the Company’s APAC region staffing business prior to the transaction to form the TS Kelly Asia Pacific joint venture in July 2016. Americas Staffing and International Staffing both deliver temporary staffing, as well as direct-hire placement services, in office-clerical, educational, light industrial and professional and technical specialties within their geographic regions. GTS combines the delivery structure of the Company’s outsourcing and consulting group and centrally delivered staffing business. It reflects the trend of customers towards the adoption of holistic talent supply chain solutions which combine contingent labor, full-time hiring and outsourced services. GTS includes centrally delivered staffing, recruitment process outsourcing (“RPO”), contingent workforce outsourcing (“CWO”), business process outsourcing (“BPO”), payroll process outsourcing (“PPO”), executive placement, career transition/outplacement services and advisory services. Corporate expenses that directly support the operating units have been allocated to Americas Staffing, GTS and International Staffing based on work effort, volume or, in the absence of a readily available measurement process, proportionately based on gross profit realized. In connection with the realignment of the segment structure, we reassessed the allocation of corporate expenses to the operating segments and updated the allocation method for corporate expenses which do not have a readily available measurement from revenue to gross profit. Prior periods have been recast to reflect the current period allocation method. The update had no impact on the consolidated financial information. The following tables present information about the reported revenue from services and gross profit of the Company by segment, along with a reconciliation to consolidated earnings before taxes and equity in net earnings (loss) of affiliate, for the third quarter and September year to date 2017 and 2016 . Asset information by reportable segment is not presented, since the Company does not produce such information internally nor does it use such data to manage its business. Third Quarter September Year to Date 2017 2016 2017 2016 (In millions of dollars) Revenue from Services: Americas Staffing $ 554.8 $ 518.2 $ 1,703.5 $ 1,614.7 Global Talent Solutions 503.0 495.0 1,495.8 1,486.5 International Staffing 275.6 239.3 766.0 885.6 Less: Intersegment revenue (4.6 ) (4.7 ) (13.2 ) (14.4 ) Consolidated Total $ 1,328.8 $ 1,247.8 $ 3,952.1 $ 3,972.4 Third Quarter September Year to Date 2017 2016 2017 2016 (In millions of dollars) Earnings from Operations: Americas Staffing gross profit $ 98.8 $ 95.0 $ 307.9 $ 292.9 Americas Staffing SG&A expenses (85.5 ) (80.7 ) (253.0 ) (245.9 ) Americas Staffing Earnings from Operations 13.3 14.3 54.9 47.0 Global Talent Solutions gross profit 93.0 86.2 272.2 257.2 Global Talent Solutions SG&A expenses (72.2 ) (70.2 ) (220.8 ) (213.6 ) Global Talent Solutions Earnings from Operations 20.8 16.0 51.4 43.6 International Staffing gross profit 39.5 35.0 112.7 131.4 International Staffing SG&A expenses (32.3 ) (30.5 ) (96.2 ) (116.3 ) International Staffing Earnings from Operations 7.2 4.5 16.5 15.1 Less: Intersegment gross profit (0.6 ) (1.1 ) (1.7 ) (3.2 ) Less: Intersegment SG&A expenses 0.6 1.1 1.7 3.2 Net Intersegment Activity — — — — Corporate (23.1 ) (16.0 ) (67.9 ) (62.3 ) Consolidated Total 18.2 18.8 54.9 43.4 Gain on investment in TS Kelly Asia Pacific — 87.2 — 87.2 Other Expense, Net (0.4 ) (0.4 ) (2.5 ) (1.3 ) Earnings before taxes and equity in net earnings (loss) of affiliate $ 17.8 $ 105.6 $ 52.4 $ 129.3 |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Oct. 01, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-09 clarifying when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications. It does not change the accounting for modifications. The ASU is effective prospectively for reporting periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. We do not expect the adoption of this ASU will have a material impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04 simplifying the accounting for goodwill impairment for all entities. The new guidance eliminates the requirement to calculate the implied fair value of goodwill (Step 2 of the current two-step goodwill impairment test under ASC 350). Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (Step 1 of the current two-step goodwill impairment test). The ASU is effective prospectively for reporting periods beginning after December 15, 2019, with early adoption permitted for annual and interim goodwill impairment testing dates after January 1, 2017. We are currently evaluating the impact of the new guidance on our goodwill impairment testing process and consolidated financial statements. In November 2016, the FASB issued ASU 2016-18 amending the presentation of restricted cash within the statement of cash flows. The new guidance requires that restricted cash be included within cash and cash equivalents on the statement of cash flows. The ASU is effective retrospectively for reporting periods beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact of the new guidance and we do not expect it to have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15 clarifying how entities should classify certain cash receipts and payments on the statement of cash flows. The new guidance addresses classification of cash flows related to the following transactions: 1) debt prepayment or debt extinguishment costs; 2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; 3) contingent consideration payments made after a business combination; 4) proceeds from the settlement of insurance claims; 5) proceeds from the settlement of corporate-owned life insurance policies; 6) distributions received from equity method investees; and 7) beneficial interests in securitization transaction. ASU 2016-15 also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 and requires retrospective application. Early adoption is permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13 amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model which is a new impairment model based on expected losses. Under this model, an entity recognizes an allowance for expected credit losses based on historical experience, current conditions and forecasted information rather than the current methodology of delaying recognition of credit losses until it is probable a loss has been incurred. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019 with early adoption permitted for annual reporting periods beginning after December 15, 2018. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. This ASU applies to trade accounts receivable and may have an impact on our calculation of the allowance for uncollectible accounts receivable. In March 2016, the FASB issued ASU 2016-09 amending several aspects of share-based payment accounting. This guidance requires all excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled, with prospective application required. The guidance also changes the classification of such tax benefits or tax deficiencies on the statement of cash flows from a financing activity to an operating activity, with retrospective or prospective application allowed. Additionally, the guidance requires the classification of employee taxes paid when an employer withholds shares for tax-withholding purposes as a financing activity on the statement of cash flows, with retrospective application required. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. Early adoption is permitted. We adopted this guidance effective January 2, 2017, and the adoption did not have a material effect on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 amending the existing accounting standards for lease accounting and requiring lessees to recognize lease assets and lease liabilities for all leases with lease terms of more than 12 months, including those classified as operating leases. Both the asset and liability will initially be measured at the present value of the future minimum lease payments, with the asset being subject to adjustments such as initial direct costs. Consistent with current U.S. GAAP, the presentation of expenses and cash flows will depend primarily on the classification of the lease as either a finance or an operating lease. The new standard also requires additional quantitative and qualitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases in order to provide additional information about the nature of an organization’s leasing activities. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 and requires modified retrospective application. Early adoption is permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. As our branch operations are primarily conducted in leased facilities, this ASU will likely have a material impact on our consolidated balance sheet, may have a material impact to our consolidated statement of earnings and will require us to disclose additional information about our leasing activities. We established a cross-functional implementation team to further assess the impact of the standard. In January 2016, the FASB issued ASU 2016-01 amending the current guidance for how entities measure certain equity investments, the accounting for financial liabilities under the fair value option, and the presentation and disclosure requirements relating to financial instruments. The new guidance requires entities to use fair value measurement for equity investments in unconsolidated entities, excluding equity method investments, and to recognize the changes in fair value in net income at the end of each reporting period. Under the new standard, for any financial liabilities in which the fair value option has been elected, the changes in fair value due to instrument-specific credit risk must be recognized separately in other comprehensive income. Presentation and disclosure requirements under the new guidance require public business entities to use the exit price when measuring the fair value of financial instruments measured at amortized cost. In addition, financial assets and liabilities must now be presented separately in the notes to the financial statements and grouped by measurement category and form of financial asset. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is only permitted for the financial liability provision. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. We expect to implement the standard with the modified retrospective method and the cumulative reclassification adjustment between other comprehensive income and retained earnings on the consolidated balance sheet is expected to be material. This standard will impact how we recognize changes in the fair value of our available-for-sale investment and could have a material impact on our consolidated financial statements. In May 2014, the FASB issued new revenue recognition guidance under ASU 2014-09 that will supersede the existing revenue recognition guidance under U.S. GAAP. The new standard focuses on creating a single source of revenue guidance for revenue arising from contracts with customers for all industries. The objective of the new standard is for companies to recognize revenue when it transfers the promised goods or services to its customers at an amount that represents what the company expects to be entitled to in exchange for those goods or services. In July 2015, the FASB deferred the effective date by one year (ASU 2015-14). This ASU will now be effective for annual periods, and interim periods within those annual periods, beginning on or after December 15, 2017. Since the issuance of the original standard, the FASB has issued several other subsequent updates including the following: 1) clarification of the implementation guidance on principal versus agent considerations (ASU 2016-08); 2) further guidance on identifying performance obligations in a contract as well as clarifications on the licensing implementation guidance (ASU 2016-10); 3) rescission of several SEC Staff Announcements that are codified in Topic 605 (ASU 2016-11); 4) additional guidance and practical expedients in response to identified implementation issues (ASU 2016-12); and 5) technical corrections and improvements (ASU 2016-20). The new standard will be effective for us beginning January 1, 2018. We established a cross-functional implementation team consisting of representatives from across our business segments and various departments. We utilized a bottom-up approach to analyze the impact of the standard on our various revenue streams by reviewing our current contracts with customers, accounting policies and business practices to identify potential differences that would result from applying the requirements of the new standard. In addition, we identified, and are in the process of implementing, appropriate changes to our business processes, systems and controls to support recognition and disclosure under the new standard. We have been closely monitoring FASB activity related to the new standard to conclude on specific interpretive issues. During 2016 and 2017, we have made significant progress toward completing our evaluation of the potential impact that adopting the new standard will have on our consolidated financial statements. Based on our preliminary analysis, revenue from our temporary staffing contracts and substantially all of our other contracts with customers will continue to be recognized over time as services are rendered. The primary impact of adopting ASU 2014-09 is anticipated to be the deferral of contract costs. Additionally, we anticipate expanded disclosures around the nature, amount, timing and uncertainty of revenue and cash flows arising from our contracts with customers. We will continue to evaluate the impact of this guidance on our consolidated financial statements, disclosures and internal controls. Our preliminary assessments are subject to change. We expect to implement the standard with the modified retrospective approach beginning January 1, 2018, which recognizes the cumulative effect of application recognized on that date. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 9 Months Ended |
Oct. 01, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-09 clarifying when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications. It does not change the accounting for modifications. The ASU is effective prospectively for reporting periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. We do not expect the adoption of this ASU will have a material impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04 simplifying the accounting for goodwill impairment for all entities. The new guidance eliminates the requirement to calculate the implied fair value of goodwill (Step 2 of the current two-step goodwill impairment test under ASC 350). Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (Step 1 of the current two-step goodwill impairment test). The ASU is effective prospectively for reporting periods beginning after December 15, 2019, with early adoption permitted for annual and interim goodwill impairment testing dates after January 1, 2017. We are currently evaluating the impact of the new guidance on our goodwill impairment testing process and consolidated financial statements. In November 2016, the FASB issued ASU 2016-18 amending the presentation of restricted cash within the statement of cash flows. The new guidance requires that restricted cash be included within cash and cash equivalents on the statement of cash flows. The ASU is effective retrospectively for reporting periods beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact of the new guidance and we do not expect it to have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15 clarifying how entities should classify certain cash receipts and payments on the statement of cash flows. The new guidance addresses classification of cash flows related to the following transactions: 1) debt prepayment or debt extinguishment costs; 2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; 3) contingent consideration payments made after a business combination; 4) proceeds from the settlement of insurance claims; 5) proceeds from the settlement of corporate-owned life insurance policies; 6) distributions received from equity method investees; and 7) beneficial interests in securitization transaction. ASU 2016-15 also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 and requires retrospective application. Early adoption is permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13 amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model which is a new impairment model based on expected losses. Under this model, an entity recognizes an allowance for expected credit losses based on historical experience, current conditions and forecasted information rather than the current methodology of delaying recognition of credit losses until it is probable a loss has been incurred. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019 with early adoption permitted for annual reporting periods beginning after December 15, 2018. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. This ASU applies to trade accounts receivable and may have an impact on our calculation of the allowance for uncollectible accounts receivable. In March 2016, the FASB issued ASU 2016-09 amending several aspects of share-based payment accounting. This guidance requires all excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled, with prospective application required. The guidance also changes the classification of such tax benefits or tax deficiencies on the statement of cash flows from a financing activity to an operating activity, with retrospective or prospective application allowed. Additionally, the guidance requires the classification of employee taxes paid when an employer withholds shares for tax-withholding purposes as a financing activity on the statement of cash flows, with retrospective application required. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. Early adoption is permitted. We adopted this guidance effective January 2, 2017, and the adoption did not have a material effect on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 amending the existing accounting standards for lease accounting and requiring lessees to recognize lease assets and lease liabilities for all leases with lease terms of more than 12 months, including those classified as operating leases. Both the asset and liability will initially be measured at the present value of the future minimum lease payments, with the asset being subject to adjustments such as initial direct costs. Consistent with current U.S. GAAP, the presentation of expenses and cash flows will depend primarily on the classification of the lease as either a finance or an operating lease. The new standard also requires additional quantitative and qualitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases in order to provide additional information about the nature of an organization’s leasing activities. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 and requires modified retrospective application. Early adoption is permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. As our branch operations are primarily conducted in leased facilities, this ASU will likely have a material impact on our consolidated balance sheet, may have a material impact to our consolidated statement of earnings and will require us to disclose additional information about our leasing activities. We established a cross-functional implementation team to further assess the impact of the standard. In January 2016, the FASB issued ASU 2016-01 amending the current guidance for how entities measure certain equity investments, the accounting for financial liabilities under the fair value option, and the presentation and disclosure requirements relating to financial instruments. The new guidance requires entities to use fair value measurement for equity investments in unconsolidated entities, excluding equity method investments, and to recognize the changes in fair value in net income at the end of each reporting period. Under the new standard, for any financial liabilities in which the fair value option has been elected, the changes in fair value due to instrument-specific credit risk must be recognized separately in other comprehensive income. Presentation and disclosure requirements under the new guidance require public business entities to use the exit price when measuring the fair value of financial instruments measured at amortized cost. In addition, financial assets and liabilities must now be presented separately in the notes to the financial statements and grouped by measurement category and form of financial asset. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is only permitted for the financial liability provision. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. We expect to implement the standard with the modified retrospective method and the cumulative reclassification adjustment between other comprehensive income and retained earnings on the consolidated balance sheet is expected to be material. This standard will impact how we recognize changes in the fair value of our available-for-sale investment and could have a material impact on our consolidated financial statements. In May 2014, the FASB issued new revenue recognition guidance under ASU 2014-09 that will supersede the existing revenue recognition guidance under U.S. GAAP. The new standard focuses on creating a single source of revenue guidance for revenue arising from contracts with customers for all industries. The objective of the new standard is for companies to recognize revenue when it transfers the promised goods or services to its customers at an amount that represents what the company expects to be entitled to in exchange for those goods or services. In July 2015, the FASB deferred the effective date by one year (ASU 2015-14). This ASU will now be effective for annual periods, and interim periods within those annual periods, beginning on or after December 15, 2017. Since the issuance of the original standard, the FASB has issued several other subsequent updates including the following: 1) clarification of the implementation guidance on principal versus agent considerations (ASU 2016-08); 2) further guidance on identifying performance obligations in a contract as well as clarifications on the licensing implementation guidance (ASU 2016-10); 3) rescission of several SEC Staff Announcements that are codified in Topic 605 (ASU 2016-11); 4) additional guidance and practical expedients in response to identified implementation issues (ASU 2016-12); and 5) technical corrections and improvements (ASU 2016-20). The new standard will be effective for us beginning January 1, 2018. We established a cross-functional implementation team consisting of representatives from across our business segments and various departments. We utilized a bottom-up approach to analyze the impact of the standard on our various revenue streams by reviewing our current contracts with customers, accounting policies and business practices to identify potential differences that would result from applying the requirements of the new standard. In addition, we identified, and are in the process of implementing, appropriate changes to our business processes, systems and controls to support recognition and disclosure under the new standard. We have been closely monitoring FASB activity related to the new standard to conclude on specific interpretive issues. During 2016 and 2017, we have made significant progress toward completing our evaluation of the potential impact that adopting the new standard will have on our consolidated financial statements. Based on our preliminary analysis, revenue from our temporary staffing contracts and substantially all of our other contracts with customers will continue to be recognized over time as services are rendered. The primary impact of adopting ASU 2014-09 is anticipated to be the deferral of contract costs. Additionally, we anticipate expanded disclosures around the nature, amount, timing and uncertainty of revenue and cash flows arising from our contracts with customers. We will continue to evaluate the impact of this guidance on our consolidated financial statements, disclosures and internal controls. Our preliminary assessments are subject to change. We expect to implement the standard with the modified retrospective approach beginning January 1, 2018, which recognizes the cumulative effect of application recognized on that date. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Oct. 01, 2017 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Pro forma results of operations for this acquisition have not been presented as it is not material to the consolidated statement of earnings. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the date of the acquisition (in millions of dollars): Cash $ 1.8 Other current assets 3.6 Goodwill 18.7 Intangibles 18.3 Other noncurrent assets 0.5 Current liabilities (3.9 ) Purchase price paid at closing $ 39.0 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Oct. 01, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Assets Measured on Recurring Basis | Fair Value Measurements on a Recurring Basis Description Total Level 1 Level 2 Level 3 (In millions of dollars) Money market funds $ 4.2 $ 4.2 $ — $ — Available-for-sale investment 212.4 212.4 — — Total assets at fair value $ 216.6 $ 216.6 $ — $ — Fair Value Measurements on a Recurring Basis Description Total Level 1 Level 2 Level 3 (In millions of dollars) Money market funds $ 4.0 $ 4.0 $ — $ — Available-for-sale investment 141.2 141.2 — — Total assets at fair value $ 145.2 $ 145.2 $ — $ — |
Restructuring Restructuring (Ta
Restructuring Restructuring (Tables) | 9 Months Ended |
Oct. 01, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Balance Sheet Accrual | A summary of the global restructuring balance sheet accrual, primarily included in accrued payroll and related taxes, is detailed below (in millions of dollars). Balance as of year-end 2016 $ 0.5 Additions charged to Global Talent Solutions 2.0 Additions charged to Americas Staffing 0.4 Reductions for cash payments related to all restructuring activities (0.7 ) Balance as of first quarter-end 2017 2.2 Reductions for cash payments related to all restructuring activities (1.3 ) Balance as of second quarter-end 2017 0.9 Reductions for cash payments related to all restructuring activities (0.4 ) Balance as of third quarter-end 2017 $ 0.5 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Oct. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the Net Carrying Amount of Goodwill | The additions in the carrying amount of goodwill for the third quarter-end 2017 are included in the table below. As of Year-End 2016 As of Third Quarter-End 2017 Goodwill, Accumulated Impairment Losses Goodwill, Allocation of Goodwill Additions to Goodwill Goodwill (In millions of dollars) Americas Commercial $ 40.0 $ (16.4 ) $ 23.6 $ (23.6 ) $ — $ — Americas PT 37.9 — 37.9 (37.9 ) — — EMEA Commercial 50.4 (50.4 ) — — — — EMEA PT 22.0 (22.0 ) — — — — APAC Commercial 12.1 (12.1 ) — — — — APAC PT — — — — — — OCG 26.9 — 26.9 (26.9 ) — — Americas Staffing — — — 25.9 18.7 44.6 Global Talent Solutions — — — 62.5 — 62.5 International Staffing — — — — — — $ 189.3 $ (100.9 ) $ 88.4 $ — $ 18.7 $ 107.1 |
Accumulated Other Comprehensi28
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Oct. 01, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income by Component, Net of Tax | The changes in accumulated other comprehensive income by component, net of tax, for the third quarter and September year to date 2017 and 2016 are included in the tables below. Amounts in parentheses indicate debits. Reclassification adjustments out of accumulated other comprehensive income, as shown in the tables below, were recorded in the other expense, net line item in the consolidated statement of earnings. Third Quarter 2017 Foreign Unrealized Pension Total (In millions of dollars) Beginning balance $ (10.7 ) $ 103.6 $ (1.8 ) $ 91.1 Other comprehensive income before reclassifications 3.4 28.8 — 32.2 Amounts reclassified from accumulated other comprehensive income — — — — Net current-period other comprehensive income 3.4 28.8 — 32.2 Ending balance $ (7.3 ) $ 132.4 $ (1.8 ) $ 123.3 September Year to Date 2017 Foreign Unrealized Pension Total (In millions of dollars) Beginning balance $ (23.3 ) $ 83.8 $ (1.8 ) $ 58.7 Other comprehensive income before reclassifications 16.0 48.6 — 64.6 Amounts reclassified from accumulated other comprehensive income — — — — Net current-period other comprehensive income 16.0 48.6 — 64.6 Ending balance $ (7.3 ) $ 132.4 $ (1.8 ) $ 123.3 Third Quarter 2016 Foreign Unrealized Pension Total (In millions of dollars) Beginning balance $ (11.6 ) $ 92.4 $ (1.6 ) $ 79.2 Other comprehensive income before reclassifications 1.8 1.3 — 3.1 Amounts reclassified from accumulated other comprehensive income 0.2 — — 0.2 Net current-period other comprehensive income 2.0 1.3 — 3.3 Ending balance $ (9.6 ) $ 93.7 $ (1.6 ) $ 82.5 September Year to Date 2016 Foreign Currency Translation Adjustments Unrealized Gains and Losses on Investment Pension Liability Adjustments Total (In millions of dollars) Beginning balance $ (22.6 ) $ 84.9 $ (1.6 ) $ 60.7 Other comprehensive income before reclassifications 13.1 8.8 — 21.9 Amounts reclassified from accumulated other comprehensive income (0.1 ) — — (0.1 ) Net current-period other comprehensive income 13.0 8.8 — 21.8 Ending balance $ (9.6 ) $ 93.7 $ (1.6 ) $ 82.5 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Oct. 01, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic and Diluted Earnings Per Share | The reconciliation of basic and diluted earnings per share on common stock for the third quarter and September year to date 2017 and 2016 follows (in millions of dollars except per share data): Third Quarter September Year to Date 2017 2016 2017 2016 Net earnings $ 23.0 $ 80.9 $ 53.9 $ 101.0 Less: earnings allocated to participating securities (0.3 ) (1.8 ) (0.9 ) (2.3 ) Net earnings available to common shareholders $ 22.7 $ 79.1 $ 53.0 $ 98.7 Average shares outstanding (millions): Basic 38.3 38.1 38.3 38.0 Dilutive share awards 0.5 0.3 0.5 0.3 Diluted 38.8 38.4 38.8 38.3 Basic earnings per share $ 0.59 $ 2.08 $ 1.38 $ 2.59 Diluted earnings per share $ 0.58 $ 2.06 $ 1.37 $ 2.58 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Oct. 01, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Nonvested Performance Shares and Restricted Stock | A summary of the status of all nonvested performance shares at target for September year to date 2017 is presented as follows below (in thousands of shares except per share data). Forfeitures primarily relate to the retirement of the Company’s former President and Chief Executive Officer in the second quarter of 2017. Financial Measure Performance Shares TSR Performance Shares Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Nonvested at year-end 2016 499 $ 19.17 208 $ 17.49 Granted 286 21.32 101 20.16 Vested — — — — Forfeited (182 ) 20.32 (65 ) 18.99 Nonvested at third quarter-end 2017 603 $ 21.19 244 $ 18.20 A summary of the status of nonvested restricted stock as of third quarter-end 2017 and year-to-date changes, is presented as follows below (in thousands of shares except per share data). Forfeitures primarily relate to the retirement of the Company’s former President and Chief Executive Officer during the second quarter of 2017. Shares Weighted Average Grant Date Fair Value Nonvested at year-end 2016 653 $ 16.58 Granted 189 21.90 Vested (74 ) 17.25 Forfeited (163 ) 16.91 Nonvested at second quarter-end 2017 605 18.07 Granted 19 21.85 Vested (164 ) 16.73 Forfeited (2 ) 19.82 Nonvested at third quarter-end 2017 458 $ 18.71 |
Other Expense, Net (Tables)
Other Expense, Net (Tables) | 9 Months Ended |
Oct. 01, 2017 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Expense, Net | Included in other expense, net for the third quarter and September year to date 2017 and 2016 are the following: Third Quarter September Year to Date 2017 2016 2017 2016 (In millions of dollars) Interest income $ 0.2 $ 0.2 $ 0.5 $ 0.3 Interest expense (0.7 ) (0.9 ) (1.8 ) (2.7 ) Dividend income — — 0.7 0.6 Foreign exchange gain (loss) 0.1 0.3 (1.9 ) 0.5 Other expense, net $ (0.4 ) $ (0.4 ) $ (2.5 ) $ (1.3 ) |
Segment Disclosures (Tables)
Segment Disclosures (Tables) | 9 Months Ended |
Oct. 01, 2017 | |
Segment Reporting [Abstract] | |
Segment Revenue Per Service | Third Quarter September Year to Date 2017 2016 2017 2016 (In millions of dollars) Revenue from Services: Americas Staffing $ 554.8 $ 518.2 $ 1,703.5 $ 1,614.7 Global Talent Solutions 503.0 495.0 1,495.8 1,486.5 International Staffing 275.6 239.3 766.0 885.6 Less: Intersegment revenue (4.6 ) (4.7 ) (13.2 ) (14.4 ) Consolidated Total $ 1,328.8 $ 1,247.8 $ 3,952.1 $ 3,972.4 |
Segment Earnings From Operations | Third Quarter September Year to Date 2017 2016 2017 2016 (In millions of dollars) Earnings from Operations: Americas Staffing gross profit $ 98.8 $ 95.0 $ 307.9 $ 292.9 Americas Staffing SG&A expenses (85.5 ) (80.7 ) (253.0 ) (245.9 ) Americas Staffing Earnings from Operations 13.3 14.3 54.9 47.0 Global Talent Solutions gross profit 93.0 86.2 272.2 257.2 Global Talent Solutions SG&A expenses (72.2 ) (70.2 ) (220.8 ) (213.6 ) Global Talent Solutions Earnings from Operations 20.8 16.0 51.4 43.6 International Staffing gross profit 39.5 35.0 112.7 131.4 International Staffing SG&A expenses (32.3 ) (30.5 ) (96.2 ) (116.3 ) International Staffing Earnings from Operations 7.2 4.5 16.5 15.1 Less: Intersegment gross profit (0.6 ) (1.1 ) (1.7 ) (3.2 ) Less: Intersegment SG&A expenses 0.6 1.1 1.7 3.2 Net Intersegment Activity — — — — Corporate (23.1 ) (16.0 ) (67.9 ) (62.3 ) Consolidated Total 18.2 18.8 54.9 43.4 Gain on investment in TS Kelly Asia Pacific — 87.2 — 87.2 Other Expense, Net (0.4 ) (0.4 ) (2.5 ) (1.3 ) Earnings before taxes and equity in net earnings (loss) of affiliate $ 17.8 $ 105.6 $ 52.4 $ 129.3 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Oct. 01, 2017 | Oct. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Quantifying Misstatement in Current Year Financial Statements, Amount | $ 2.8 | $ 1.4 |
Acquisition - Narrative (Detail
Acquisition - Narrative (Details) - Teachers On Call, Inc. $ in Millions | Sep. 05, 2017USD ($)Rate |
Business Acquisition [Line Items] | |
Ownership percentage acquired | Rate | 100.00% |
Purchase price of acquisition | $ 41 |
Purchase price paid at closing | 39 |
Intangible assets acquired | 18.3 |
Goodwill expected to be deductible | 18.3 |
Indemnification asset recognized | 2.8 |
Trademarks | |
Business Acquisition [Line Items] | |
Indefinite-lived intangibles | 4.8 |
Customer relationships | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | $ 12 |
Useful life of intangible assets acquired | 10 years |
Candidate database | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | $ 1.5 |
Useful life of intangible assets acquired | 4 years |
Acquisition - Fair Value of Ass
Acquisition - Fair Value of Assets Assumed and Liabilities Acquired (Details) - USD ($) $ in Millions | Oct. 01, 2017 | Sep. 05, 2017 | Jan. 01, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 107.1 | $ 88.4 | |
Teachers On Call, Inc. | |||
Business Acquisition [Line Items] | |||
Cash | $ 1.8 | ||
Other current assets | 3.6 | ||
Goodwill | 18.7 | ||
Intangibles | 18.3 | ||
Other noncurrent assets | 0.5 | ||
Current liabilities | (3.9) | ||
Purchase price paid at closing | $ 39 |
Investment in TS Kelly Asia P36
Investment in TS Kelly Asia Pacific (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | Jan. 01, 2017 | |
Schedule of Equity Method Investments [Line Items] | |||||
Gain on investment in TS Kelly Asia Pacific | $ 0 | $ 87.2 | $ 0 | $ 87.2 | |
Investment in equity affiliate | 116.4 | 116.4 | $ 114.8 | ||
Accounts payable and accrued liabilities | $ 496.1 | $ 496.1 | 455.1 | ||
TS Kelly Asia Pacific | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investment, ownership percentage | 49.00% | 49.00% | |||
Gain on investment in TS Kelly Asia Pacific | $ 87.2 | ||||
Due to TS Kelly Asia Pacific | $ 3.8 | $ 3.8 | 1.1 | ||
TS Kelly Workforce Solutions | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investment, ownership percentage | 49.00% | 49.00% | |||
TS Kelly Asia Pacific | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Accounts payable and accrued liabilities | $ 2.4 | $ 2.4 | $ 3.1 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets Measured at Fair Value on a Recurring Basis (Details) - Measured on Recurring Basis - USD ($) $ in Millions | Oct. 01, 2017 | Jan. 01, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 4.2 | $ 4 |
Available-for-sale investment | 212.4 | 141.2 |
Total assets at fair value | 216.6 | 145.2 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 4.2 | 4 |
Available-for-sale investment | 212.4 | 141.2 |
Total assets at fair value | 216.6 | 145.2 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 0 | 0 |
Available-for-sale investment | 0 | 0 |
Total assets at fair value | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 0 | 0 |
Available-for-sale investment | 0 | 0 |
Total assets at fair value | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2017USD ($) | Oct. 02, 2016USD ($) | Oct. 01, 2017USD ($)segment | Oct. 02, 2016USD ($) | Jan. 01, 2017USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Unrealized gain (loss) on available-for-sale investments, net of tax | $ 28.8 | $ 1.3 | $ 48.6 | $ 8.8 | |
Number of reportable segments | segment | 3 | ||||
Temp Holdings Investment | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Unrealized gain (loss) on available-for-sale investments, net of tax | 28.8 | $ 1.3 | $ 48.6 | $ 8.8 | |
Cost of available-for-sale investments | $ 18.4 | $ 18.4 | $ 17.7 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Apr. 02, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Jan. 01, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 2.4 | |||
Restructuring accrual | 2.2 | $ 0.5 | $ 0.9 | $ 0.5 |
Global Talent Solutions | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 2 | |||
Severance costs | 2 | |||
Americas Staffing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 0.4 | |||
Severance costs | $ 0.4 |
Restructuring - Restructuring R
Restructuring - Restructuring Reserve (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | |
Restructuring Reserve [Roll Forward] | |||
Beginning balance | $ 0.9 | $ 2.2 | $ 0.5 |
Additions charged | 2.4 | ||
Reductions for cash payments related to all restructuring activities | (0.4) | (1.3) | (0.7) |
Ending balance | $ 0.5 | $ 0.9 | 2.2 |
Global Talent Solutions | |||
Restructuring Reserve [Roll Forward] | |||
Additions charged | 2 | ||
Americas Staffing | |||
Restructuring Reserve [Roll Forward] | |||
Additions charged | $ 0.4 |
Goodwill - Changes in the Net C
Goodwill - Changes in the Net Carrying Amount of Goodwill (Details) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 01, 2017 | Jan. 01, 2017 | |
Goodwill [Roll Forward] | ||
Goodwill, Gross | $ 189.3 | |
Accumulated Impairment Losses | (100.9) | |
Allocation of Goodwill | $ 0 | |
Additions to Goodwill | 18.7 | |
Goodwill | 107.1 | 88.4 |
Americas Commercial | ||
Goodwill [Roll Forward] | ||
Goodwill, Gross | 40 | |
Accumulated Impairment Losses | (16.4) | |
Allocation of Goodwill | (23.6) | |
Goodwill | 0 | 23.6 |
Americas PT | ||
Goodwill [Roll Forward] | ||
Goodwill, Gross | 37.9 | |
Accumulated Impairment Losses | 0 | |
Allocation of Goodwill | (37.9) | |
Goodwill | 0 | 37.9 |
EMEA Commercial | ||
Goodwill [Roll Forward] | ||
Goodwill, Gross | 50.4 | |
Accumulated Impairment Losses | (50.4) | |
Allocation of Goodwill | 0 | |
Goodwill | 0 | 0 |
EMEA PT | ||
Goodwill [Roll Forward] | ||
Goodwill, Gross | 22 | |
Accumulated Impairment Losses | (22) | |
Allocation of Goodwill | 0 | |
Goodwill | 0 | 0 |
APAC Commercial | ||
Goodwill [Roll Forward] | ||
Goodwill, Gross | 12.1 | |
Accumulated Impairment Losses | (12.1) | |
Allocation of Goodwill | 0 | |
Goodwill | 0 | 0 |
APAC PT | ||
Goodwill [Roll Forward] | ||
Goodwill, Gross | 0 | |
Accumulated Impairment Losses | 0 | |
Allocation of Goodwill | 0 | |
Goodwill | 0 | 0 |
OCG | ||
Goodwill [Roll Forward] | ||
Goodwill, Gross | 26.9 | |
Accumulated Impairment Losses | 0 | |
Allocation of Goodwill | (26.9) | |
Goodwill | 0 | 26.9 |
Americas Staffing | ||
Goodwill [Roll Forward] | ||
Goodwill, Gross | 0 | |
Accumulated Impairment Losses | 0 | |
Allocation of Goodwill | 25.9 | |
Additions to Goodwill | 18.7 | |
Goodwill | 44.6 | 0 |
Global Talent Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill, Gross | 0 | |
Accumulated Impairment Losses | 0 | |
Allocation of Goodwill | 62.5 | |
Goodwill | 62.5 | 0 |
International Staffing | ||
Goodwill [Roll Forward] | ||
Goodwill, Gross | 0 | |
Accumulated Impairment Losses | 0 | |
Allocation of Goodwill | 0 | |
Goodwill | $ 0 | $ 0 |
Accumulated Other Comprehensi42
Accumulated Other Comprehensive Income - Schedule of Accumulated Other Comprehensive Income by Component, Net of Tax (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,012 | |||
Other comprehensive income | $ 32.2 | $ 3.3 | 64.6 | $ 21.8 |
Ending balance | 1,127 | 1,016.5 | 1,127 | 1,016.5 |
Foreign Currency Translation Adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (10.7) | (11.6) | (23.3) | (22.6) |
Other comprehensive income before reclassifications | 3.4 | 1.8 | 16 | 13.1 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0.2 | 0 | (0.1) |
Other comprehensive income | 3.4 | 2 | 16 | 13 |
Ending balance | (7.3) | (9.6) | (7.3) | (9.6) |
Unrealized Gains and Losses on Investment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 103.6 | 92.4 | 83.8 | 84.9 |
Other comprehensive income before reclassifications | 28.8 | 1.3 | 48.6 | 8.8 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | 0 | 0 |
Other comprehensive income | 28.8 | 1.3 | 48.6 | 8.8 |
Ending balance | 132.4 | 93.7 | 132.4 | 93.7 |
Pension Liability Adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (1.8) | (1.6) | (1.8) | (1.6) |
Other comprehensive income before reclassifications | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | 0 | 0 |
Other comprehensive income | 0 | 0 | 0 | 0 |
Ending balance | (1.8) | (1.6) | (1.8) | (1.6) |
Accumulated Other Comprehensive Income | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 91.1 | 79.2 | 58.7 | 60.7 |
Other comprehensive income before reclassifications | 32.2 | 3.1 | 64.6 | 21.9 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0.2 | 0 | (0.1) |
Other comprehensive income | 32.2 | 3.3 | 64.6 | 21.8 |
Ending balance | $ 123.3 | $ 82.5 | $ 123.3 | $ 82.5 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
Earnings Per Share [Abstract] | ||||
Net earnings | $ 23 | $ 80.9 | $ 53.9 | $ 101 |
Less: earnings allocated to participating securities | (0.3) | (1.8) | (0.9) | (2.3) |
Net earnings available to common shareholders | $ 22.7 | $ 79.1 | $ 53 | $ 98.7 |
Average shares outstanding (millions): | ||||
Basic (in shares) | 38.3 | 38.1 | 38.3 | 38 |
Dilutive share awards (in shares) | 0.5 | 0.3 | 0.5 | 0.3 |
Diluted (in shares) | 38.8 | 38.4 | 38.8 | 38.3 |
Basic earnings per share on common stock (in dollars per share) | $ 0.59 | $ 2.08 | $ 1.38 | $ 2.59 |
Diluted earnings per share on common stock (in dollars per share) | $ 0.58 | $ 2.06 | $ 1.37 | $ 2.58 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 15, 2017 | Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | Jan. 01, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation expense | $ 2.6 | $ 2.4 | $ 6.8 | $ 7.6 | ||
Related tax benefit | $ 1.5 | $ 0.9 | $ 3.3 | $ 2.9 | ||
Performance shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period | 3 years | |||||
Performance Shares, Financial Goals | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted average grant date fair value (in dollars per share) | $ 21.07 | |||||
TSR Performance Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted average grant date fair value (in dollars per share) | $ 18.20 | $ 18.20 | $ 17.49 | |||
Monte Carlo Fair Value | TSR Performance Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted average grant date fair value (in dollars per share) | $ 20.16 | |||||
Maximum shares eligible to earn | Performance shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 200.00% | |||||
2017 grant | Performance Shares, Financial Goals | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted average grant date fair value (in dollars per share) | 24.22 | 24.22 | ||||
2016 grant | Performance Shares, Financial Goals | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted average grant date fair value (in dollars per share) | $ 24.29 | $ 24.29 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Nonvested Performance Shares (Details) shares in Thousands | 9 Months Ended |
Oct. 01, 2017$ / sharesshares | |
Financial Measure Performance Shares | |
Shares | |
Nonvested, beginning balance (in shares) | shares | 499 |
Granted (in shares) | shares | 286 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | (182) |
Nonvested, ending balance (in shares) | shares | 603 |
Weighted Average Grant Date Fair Value | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 19.17 |
Granted (in dollars per share) | $ / shares | 21.32 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 20.32 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 21.19 |
TSR Performance Shares | |
Shares | |
Nonvested, beginning balance (in shares) | shares | 208 |
Granted (in shares) | shares | 101 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | (65) |
Nonvested, ending balance (in shares) | shares | 244 |
Weighted Average Grant Date Fair Value | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 17.49 |
Granted (in dollars per share) | $ / shares | 20.16 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 18.99 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 18.20 |
Stock-Based Compensation - Sc46
Stock-Based Compensation - Schedule of Nonvested Restricted Stock (Details) - Restricted Stock - $ / shares shares in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Oct. 01, 2017 | Jul. 02, 2017 | Oct. 01, 2017 | |
Shares | |||
Nonvested, beginning balance (in shares) | 605 | 653 | 653 |
Granted (in shares) | 19 | 189 | |
Vested (in shares) | (164) | (74) | |
Forfeited (in shares) | (2) | (163) | |
Nonvested, ending balance (in shares) | 458 | 605 | 458 |
Weighted Average Grant Date Fair Value | |||
Nonvested, beginning balance (in dollars per share) | $ 18.07 | $ 16.58 | $ 16.58 |
Granted (in dollars per share) | 21.85 | 21.90 | |
Vested (in dollars per share) | 16.73 | 17.25 | |
Forfeited (in dollars per share) | 19.82 | 16.91 | |
Nonvested, ending balance (in dollars per share) | $ 18.71 | $ 18.07 | $ 18.71 |
Other Expense, Net - Schedule o
Other Expense, Net - Schedule of Other Nonoperating Income (Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
Other Income and Expenses [Abstract] | ||||
Interest income | $ 0.2 | $ 0.2 | $ 0.5 | $ 0.3 |
Interest expense | (0.7) | (0.9) | (1.8) | (2.7) |
Dividend income | 0 | 0 | 0.7 | 0.6 |
Foreign exchange gain (loss) | 0.1 | 0.3 | (1.9) | 0.5 |
Other expense, net | $ (0.4) | $ (0.4) | $ (2.5) | $ (1.3) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income tax (benefit) expense | $ (4.1) | $ 24.7 | $ 0.1 | $ 28.2 |
Effective tax rate | (22.90%) | 23.40% | 0.20% | 21.80% |
Tax benefit from release of valuation allowance | $ 5.1 | |||
Tax expense on gain on investment in TS Kelly Asia Pacific equity affiliate | $ 23.5 |
Segment Disclosures - Narrative
Segment Disclosures - Narrative (Details) | 9 Months Ended |
Oct. 01, 2017segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Disclosures - Segment R
Segment Disclosures - Segment Revenue Per Service (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
Revenue from Services | ||||
Segment revenue from services | $ 1,328.8 | $ 1,247.8 | $ 3,952.1 | $ 3,972.4 |
Less: Intersegment revenue | ||||
Revenue from Services | ||||
Segment revenue from services | (4.6) | (4.7) | (13.2) | (14.4) |
Americas Staffing | Reporting Segments | ||||
Revenue from Services | ||||
Segment revenue from services | 554.8 | 518.2 | 1,703.5 | 1,614.7 |
Global Talent Solutions | Reporting Segments | ||||
Revenue from Services | ||||
Segment revenue from services | 503 | 495 | 1,495.8 | 1,486.5 |
International Staffing | Reporting Segments | ||||
Revenue from Services | ||||
Segment revenue from services | $ 275.6 | $ 239.3 | $ 766 | $ 885.6 |
Segment Disclosures - Segment E
Segment Disclosures - Segment Earnings From Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
Earnings from Operations | ||||
Gross profit | $ 230.7 | $ 215.1 | $ 691.1 | $ 678.3 |
SG&A expenses | (212.5) | (196.3) | (636.2) | (634.9) |
Earnings from operations | 18.2 | 18.8 | 54.9 | 43.4 |
Gain on investment in TS Kelly Asia Pacific | 0 | 87.2 | 0 | 87.2 |
Other Expense, Net | (0.4) | (0.4) | (2.5) | (1.3) |
Earnings before taxes and equity in net earnings (loss) of affiliate | 17.8 | 105.6 | 52.4 | 129.3 |
Less: Intersegment | ||||
Earnings from Operations | ||||
Gross profit | (0.6) | (1.1) | (1.7) | (3.2) |
SG&A expenses | 0.6 | 1.1 | 1.7 | 3.2 |
Earnings from operations | 0 | 0 | 0 | 0 |
Corporate | ||||
Earnings from Operations | ||||
Earnings from operations | (23.1) | (16) | (67.9) | (62.3) |
Americas Staffing | Reporting Segments | ||||
Earnings from Operations | ||||
Gross profit | 98.8 | 95 | 307.9 | 292.9 |
SG&A expenses | (85.5) | (80.7) | (253) | (245.9) |
Earnings from operations | 13.3 | 14.3 | 54.9 | 47 |
Global Talent Solutions | Reporting Segments | ||||
Earnings from Operations | ||||
Gross profit | 93 | 86.2 | 272.2 | 257.2 |
SG&A expenses | (72.2) | (70.2) | (220.8) | (213.6) |
Earnings from operations | 20.8 | 16 | 51.4 | 43.6 |
International Staffing | Reporting Segments | ||||
Earnings from Operations | ||||
Gross profit | 39.5 | 35 | 112.7 | 131.4 |
SG&A expenses | (32.3) | (30.5) | (96.2) | (116.3) |
Earnings from operations | $ 7.2 | $ 4.5 | $ 16.5 | $ 15.1 |