(State or other jurisdiction | (Commission | (IRS Employer | ||||||
of incorporation) | File Number) | Identification No.) | ||||||
Title of each class | Trading Symbols | Name of each exchange on which registered | ||||||
Exhibit No. | Description | ||||
Consent of Grant Thornton LLP. | |||||
The audited consolidated financial statements of MRP Topco, Inc. as of and for the years ended December 31, 2023 and December 31, 2022 and the related notes. | |||||
The unaudited consolidated financial statements of MRP Topco, Inc. as of and for the three months ended March 31, 2024 and March 31, 2023 and the related notes. | |||||
The unaudited pro forma condensed combined financial information of the Company, giving effect to the acquisition of MRP Topco, which includes the unaudited pro forma condensed combined balance sheet as of March 31, 2024, the unaudited pro forma combined statement of earnings for the year ended December 31, 2023 and for the three months ended March 31, 2024 and the related notes. | |||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
July 30, 2024 | ||||||||
/s/ Olivier G. Thirot Olivier G. Thirot Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
Contents | Page | ||||
Condensed Consolidated Financial Statements | |||||
Consolidated balance sheets | 5 | ||||
Consolidated statements of income (loss) | 7 | ||||
Consolidated statements of comprehensive income (loss) | 8 | ||||
Consolidated statements of shareholders’ equity (deficiency) | 9 | ||||
Consolidated statements of cash flows | 11 | ||||
Notes to condensed consolidated financial statements | 13 |
MRP TOPCO, INC. | |||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||
MARCH 31, 2024 AND DECEMBER 31, 2023 | |||||||||||
UNAUDITED | |||||||||||
(In thousands, except per share amounts) | |||||||||||
March 31, 2024 | December 31, 2023 | ||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 7,886 | $ | 11,124 | |||||||
Accounts receivable, net of allowance for placement fall-offs and credit losses of $2,392 and $2,622 as of March 31, 2024 and December 31, 2023, respectively | 69,137 | 69,412 | |||||||||
Unbilled receivables | 21,791 | 18,905 | |||||||||
Prepaid expenses and other current assets | 3,739 | 4,241 | |||||||||
Prepaid income taxes | 1,612 | 1,437 | |||||||||
Cloud computing costs | 2,147 | 2,324 | |||||||||
Total current assets | 106,312 | 107,443 | |||||||||
Property and equipment, net | 3,848 | 3,947 | |||||||||
Security deposits | 1,081 | 1,334 | |||||||||
Right-of-use assets, net | 12,528 | 13,502 | |||||||||
Goodwill | 148,684 | 148,684 | |||||||||
Deferred tax asset, net | — | — | |||||||||
Interest rate cap | 49 | 49 | |||||||||
Intangible assets, net | 9,183 | 9,452 | |||||||||
Cloud computing costs, net of current portion | 12,585 | 13,168 | |||||||||
Total assets | $ | 294,270 | $ | 297,579 | |||||||
LIABILITIES AND MEMBERS' EQUITY (DEFICIENCY) | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 18,593 | $ | 14,664 | |||||||
Accrued expenses | 15,168 | 15,534 | |||||||||
Lease liabilities, current portion | 4,026 | 4,137 | |||||||||
Deferred tax liability, net | 3,330 | 3,330 | |||||||||
Asset-based line of credit | 3,000 | 6,000 | |||||||||
Total current liabilities | 44,117 | 43,665 | |||||||||
Long-term debt | 227,600 | 227,176 | |||||||||
Lease liabilities, net of current portion | 9,576 | 10,512 | |||||||||
Total liabilities | 281,293 | 281,353 | |||||||||
Shareholders' equity (deficiency) | |||||||||||
Common stock, $0.001 par value per share, 110,000 shares authorized; 65,469 shares issued and outstanding as of March 31, 2024 and December 31, 2023 | — | — | |||||||||
Additional paid-in capital | 153,592 | 153,418 | |||||||||
Accumulated deficit | (140,466) | (137,068) | |||||||||
Accumulated other comprehensive loss | (149) | (124) | |||||||||
Total shareholders' equity (deficiency) | 12,977 | 16,226 | |||||||||
Total liabilities and shareholders' equity (deficiency) | $ | 294,270 | $ | 297,579 |
MRP TOPCO, INC. | |||||||||||
CONSOLIDATED STATEMENTS OF INCOME (LOSS) | |||||||||||
THREE MONTHS ENDED MARCH 31, 2024 AND 2023 | |||||||||||
UNAUDITED | |||||||||||
(In thousands) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2024 | March 31, 2023 | ||||||||||
Net revenues | $ | 130,518 | $ | 144,054 | |||||||
Cost of services | 113,775 | 123,016 | |||||||||
Gross profit | 16,743 | 21,038 | |||||||||
Operating expenses | 12,073 | 13,124 | |||||||||
Merger and acquisition expenses | — | 19 | |||||||||
Share-based compensation expense | 174 | 172 | |||||||||
Related party management fees | 80 | 59 | |||||||||
Income from operations | 4,416 | 7,664 | |||||||||
Other income (expense) | |||||||||||
Interest expense and amortization of debt issuance costs | (7,894) | (7,034) | |||||||||
Interest income | 46 | 129 | |||||||||
(Loss) gain on foreign exchange | (8) | 34 | |||||||||
(Loss) Income before income tax (benefit) expense | (3,440) | 793 | |||||||||
Income tax (benefit) expense | (42) | 192 | |||||||||
NET (LOSS) INCOME | $ | (3,398) | $ | 601 |
MRP TOPCO, INC. | |||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||
THREE MONTHS ENDED MARCH 31, 2024 AND 2023 | |||||||||||
UNAUDITED | |||||||||||
(In thousands) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2024 | March 31, 2023 | ||||||||||
Net (loss) income | $ | (3,398) | $ | 601 | |||||||
Other comprehensive loss | |||||||||||
Translation loss on net assets and operations of foreign subsidiary | (25) | (47) | |||||||||
COMPREHENSIVE (LOSS) INCOME | $ | (3,423) | $ | 554 |
MRP TOPCO, INC. | |||||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIENCY) | |||||||||||||||||||||||||||||||||||
THREE MONTHS ENDED MARCH 31, 2024 AND 2023 | |||||||||||||||||||||||||||||||||||
UNAUDITED | |||||||||||||||||||||||||||||||||||
(In thousands, except shares) | |||||||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||
Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Shareholders' Equity (Deficiency) | ||||||||||||||||||||||||||||||
Shareholders' equity (deficiency) at December 31, 2022 | $ | 65,401 | $ | — | $ | 152,666 | $ | (130,429) | $ | (175) | $ | 22,062 | |||||||||||||||||||||||
Repurchase of shares | — | — | (15) | — | — | (15) | |||||||||||||||||||||||||||||
Share-based compensation | — | — | 172 | — | — | 172 | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (47) | (47) | |||||||||||||||||||||||||||||
Net income | — | — | — | 601 | — | 601 | |||||||||||||||||||||||||||||
Shareholders' equity (deficiency) at March 31, 2023 | $ | 65,401 | $ | — | $ | 152,823 | $ | (129,828) | $ | (222) | $ | 22,773 | |||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||
Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Shareholders' Equity (Deficiency) | ||||||||||||||||||||||||||||||
Shareholders' equity (deficiency) at December 31, 2023 | $ | 65,469 | $ | — | $ | 153,418 | $ | (137,068) | $ | (124) | $ | 16,226 | |||||||||||||||||||||||
Share-based compensation | — | — | 174 | — | — | 174 | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (25) | (25) | |||||||||||||||||||||||||||||
Net loss | — | — | — | (3,398) | — | (3,398) | |||||||||||||||||||||||||||||
Shareholders' equity (deficiency) at March 31, 2024 | $ | 65,469 | $ | — | $ | 153,592 | $ | (140,466) | $ | (149) | $ | 12,977 |
MRP TOPCO, INC. | |||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||||||||
THREE MONTHS ENDED MARCH 31, 2024 AND 2023 | |||||||||||||||||||||||
UNAUDITED | |||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
March 31, 2024 | March 31, 2023 | ||||||||||||||||||||||
Cash flow from operating activities: | |||||||||||||||||||||||
Net (loss) income | $ | (3,398) | $ | 601 | |||||||||||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||||||||||||||
Depreciation and amortization | 938 | 790 | |||||||||||||||||||||
Amortization of debt issuance costs | 424 | 424 | |||||||||||||||||||||
Amortization of right-of-use assets | 974 | 1,144 | |||||||||||||||||||||
Amortization of capitalized software costs | 583 | 32 | |||||||||||||||||||||
Write off of capitalized software costs | 39 | — | |||||||||||||||||||||
Stock compensation expense | 174 | 172 | |||||||||||||||||||||
Provision for fall-off and credit losses | — | 716 | |||||||||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||||
Accounts receivable | 275 | 2,198 | |||||||||||||||||||||
Unbilled receivable | (2,886) | (972) | |||||||||||||||||||||
Prepaid expenses and other current assets | 527 | (3,742) | |||||||||||||||||||||
Prepaid income taxes | (200) | (582) | |||||||||||||||||||||
Deferred income taxes | — | (105) | |||||||||||||||||||||
Security deposits | 253 | 200 | |||||||||||||||||||||
Cloud computing costs | 138 | (1,826) | |||||||||||||||||||||
Accounts payable | 3,929 | (582) | |||||||||||||||||||||
Accrued expenses and other long term liabilities | (366) | (10,317) | |||||||||||||||||||||
Operating lease liability | (1,047) | (1,215) | |||||||||||||||||||||
Net cash provided by (used in) operating activities | 357 | (13,064) | |||||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||
Purchase of property and equipment | (570) | (971) | |||||||||||||||||||||
— | |||||||||||||||||||||||
Net cash used in investing activities | (570) | (971) | |||||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||
Repayments of long-term debt | — | (606) | |||||||||||||||||||||
Proceeds from asset-based line of credit | 20,000 | — | |||||||||||||||||||||
Repayments of asset-based line of credit | (23,000) | — | |||||||||||||||||||||
Repurchase of shares | — | (15) | |||||||||||||||||||||
Net cash used in financing activities | (3,000) | (621) | |||||||||||||||||||||
Effect of exchange rates changes on cash and cash equivalents | (25) | (47) | |||||||||||||||||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (3,238) | (14,703) | |||||||||||||||||||||
Cash and cash equivalents, beginning | 11,124 | 31,547 | |||||||||||||||||||||
Cash and Cash equivalents, ending | $ | 7,886 | $ | 16,844 | |||||||||||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||||||||
Cash paid for interest | $ | 3,528 | $ | 6,580 | |||||||||||||||||||
Cash paid for income taxes | $ | 117 | $ | 1,329 |
2024 | 2023 | ||||||||||
Computer equipment | $ | 9,326 | $ | 8,928 | |||||||
Furniture and fixtures | 3,063 | 3,029 | |||||||||
Leasehold improvements | 2,965 | 2,827 | |||||||||
15,354 | 14,784 | ||||||||||
Accumulated depreciation | (11,506) | (10,837) | |||||||||
Property and equipment, net | $ | 3,848 | $ | 3,947 |
2024 | 2023 | ||||||||||
IT Staffing and Consulting | $ | 117,429 | $ | 117,429 | |||||||
Federal IT Staffing | 29,605 | 29,605 | |||||||||
Recruit Process Outsourcing and Managed Service Provider | 1,650 | 1,650 | |||||||||
Total | $ | 148,684 | $ | 148,684 |
2024 | 2023 | ||||||||||
Amortizing intangible assets | |||||||||||
Customer relationships | $ | 9,400 | $ | 9,400 | |||||||
Tradename - The Goal | 4,500 | 4,500 | |||||||||
Total | 13,900 | 13,900 | |||||||||
Less: accumulated amortization | |||||||||||
Customer relationships | (3,329) | (3,173) | |||||||||
Tradename - The Goal | (1,388) | (1,275) | |||||||||
Total | (4,717) | (4,448) | |||||||||
Intangible assets, net | $ | 9,183 | $ | 9,452 |
Period Ending March 31, 2024 | |||||
2024 | $ | 808 | |||
2025 | 1,077 | ||||
2026 | 1,077 | ||||
2027 | 1,077 | ||||
2028 | 1,077 | ||||
Thereafter | 4,067 | ||||
Total | $ | 9,183 |
2024 | 2023 | ||||||||||
Employee compensation | $ | 8,689 | $ | 13,434 | |||||||
Other | 6,545 | 2,100 | |||||||||
Accrued expenses | $ | 15,234 | $ | 15,534 |
2024 | 2023 | ||||||||||
Term loan | $ | 230,603 | $ | 230,603 | |||||||
Less: current maturities | — | — | |||||||||
Less: unamortized bank fees | (3,003) | (3,427) | |||||||||
Long-term debt, net of current portion | $ | 227,600 | $ | 227,176 |
2024 | $ | — | |||
2025 | 230,603 | ||||
Total | $ | 230,603 |
Unaudited Pro Forma Condensed Combined Balance Sheet As of March 31, 2024 (In millions of dollars) | ||||||||||||||||||||||||||||||||||||||||||||
Historical | ||||||||||||||||||||||||||||||||||||||||||||
Kelly Services, Inc. | MRP Topco, Inc. (See Note 4) | Debt Financing Transaction Adjustments | Note 5 | Transaction Accounting Adjustments | Note 5 | Pro Forma Combined | ||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||||
Current Assets | ||||||||||||||||||||||||||||||||||||||||||||
Cash and equivalents | $ | 200.7 | $ | 7.9 | $ | 263.0 | a | $ | (448.0) | b | $ | 23.6 | ||||||||||||||||||||||||||||||||
Trade accounts receivable, less allowances | 1,152.9 | 90.9 | — | — | 1,243.8 | |||||||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 83.2 | 7.5 | — | 0.2 | c | 90.9 | ||||||||||||||||||||||||||||||||||||||
Total current assets | 1,436.8 | 106.3 | 263.0 | (447.8) | 1,358.3 | |||||||||||||||||||||||||||||||||||||||
Noncurrent Assets | ||||||||||||||||||||||||||||||||||||||||||||
Net property and equipment | 25.5 | 3.9 | — | — | 29.4 | |||||||||||||||||||||||||||||||||||||||
Operating lease right-of-use assets | 46.3 | 12.5 | — | — | 58.8 | |||||||||||||||||||||||||||||||||||||||
Deferred taxes | 318.9 | (3.3) | — | (16.7) | d | 298.9 | ||||||||||||||||||||||||||||||||||||||
Retirement plan assets | 243.7 | — | — | 243.7 | ||||||||||||||||||||||||||||||||||||||||
Goodwill, net | 151.1 | 148.7 | — | 80.7 | e | 380.5 | ||||||||||||||||||||||||||||||||||||||
Intangibles, net | 132.5 | 9.2 | — | 136.7 | f | 278.4 | ||||||||||||||||||||||||||||||||||||||
Other assets | 40.6 | 16.7 | 1.1 | a | (6.4) | c,g | 52.0 | |||||||||||||||||||||||||||||||||||||
Total noncurrent assets | 958.6 | 187.7 | 1.1 | 194.3 | 1,341.7 | |||||||||||||||||||||||||||||||||||||||
Total Assets | $ | 2,395.4 | $ | 294.0 | $ | 264.1 | $ | (253.5) | $ | 2,700.0 |
Unaudited Pro Forma Condensed Combined Balance Sheet As of March 31, 2024 (In millions of dollars) | ||||||||||||||||||||||||||||||||||||||||||||
Historical | ||||||||||||||||||||||||||||||||||||||||||||
Kelly Services, Inc. | MRP Topco, Inc. (See Note 4) | Debt Financing Transaction Adjustments | Note 5 | Transaction Accounting Adjustments | Note 5 | Pro Forma Combined | ||||||||||||||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||
Current Liabilities | ||||||||||||||||||||||||||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 581.2 | $ | 25.1 | $ | — | $ | 1.1 | h | $ | 607.4 | |||||||||||||||||||||||||||||||||
Operating lease liabilities | 8.4 | 4.0 | — | — | 12.4 | |||||||||||||||||||||||||||||||||||||||
Accrued payroll and related taxes | 165.9 | 8.7 | — | — | 174.6 | |||||||||||||||||||||||||||||||||||||||
Accrued workers’ compensation and other claims | 22.0 | — | — | — | 22.0 | |||||||||||||||||||||||||||||||||||||||
Income and other taxes | 20.0 | — | — | 20.0 | ||||||||||||||||||||||||||||||||||||||||
Total current liabilities | 797.5 | 37.8 | — | 1.1 | 836.4 | |||||||||||||||||||||||||||||||||||||||
Noncurrent Liabilities | ||||||||||||||||||||||||||||||||||||||||||||
Operating lease liabilities | 42.0 | 9.6 | — | — | 51.6 | |||||||||||||||||||||||||||||||||||||||
Accrued workers’ compensation and other claims | 40.9 | — | — | — | 40.9 | |||||||||||||||||||||||||||||||||||||||
Accrued retirement benefits | 229.5 | — | — | — | 229.5 | |||||||||||||||||||||||||||||||||||||||
Other long-term liabilities | 8.7 | 233.6 | 264.1 | a | (233.6) | i | 272.8 | |||||||||||||||||||||||||||||||||||||
Total noncurrent liabilities | 321.1 | 243.2 | 264.1 | (233.6) | 594.8 | |||||||||||||||||||||||||||||||||||||||
Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||
Capital stock, $1.00 par value | ||||||||||||||||||||||||||||||||||||||||||||
Class A common stock, 100.0 shares authorized; 35.2 million shares issued at 2024 | 35.2 | — | — | — | 35.2 | |||||||||||||||||||||||||||||||||||||||
Class B common stock, 10.0 shares authorized; 3.0 million shares issued at 2024 | 3.3 | — | — | — | 3.3 | |||||||||||||||||||||||||||||||||||||||
Treasury stock, at cost | — | |||||||||||||||||||||||||||||||||||||||||||
Class A common stock, 3.0 million shares at 2024 | (52.5) | — | — | — | (52.5) | |||||||||||||||||||||||||||||||||||||||
Class B common stock | (0.6) | — | — | — | (0.6) | |||||||||||||||||||||||||||||||||||||||
Paid-in capital | 27.1 | 153.6 | — | (153.6) | j | 27.1 | ||||||||||||||||||||||||||||||||||||||
Earnings invested in the business | 1,264.8 | (140.5) | — | 132.5 | k | 1,256.8 | ||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive income (loss) | (0.5) | (0.1) | — | 0.1 | j | (0.5) | ||||||||||||||||||||||||||||||||||||||
Total stockholders’ equity | 1,276.8 | 13.0 | — | (21.0) | 1,268.8 | |||||||||||||||||||||||||||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 2,395.4 | $ | 294.0 | $ | 264.1 | $ | (253.5) | $ | 2,700.0 |
Unaudited Pro Forma Combined Statement of Earnings For the Year Ended December 31, 2023 (In millions of dollars except per share data) | ||||||||||||||||||||||||||||||||||||||||||||
Historical | ||||||||||||||||||||||||||||||||||||||||||||
Kelly Services, Inc. | MRP Topco, Inc. (See Note 4) | Debt Financing Transaction Adjustments | Note 5 | Transaction Accounting Adjustments | Note 5 | Pro Forma Combined | ||||||||||||||||||||||||||||||||||||||
Revenue from services | $ | 4,835.7 | $ | 554.1 | $ | — | $ | — | $ | 5,389.8 | ||||||||||||||||||||||||||||||||||
Cost of services | 3,874.3 | 386.6 | — | — | 4,260.9 | |||||||||||||||||||||||||||||||||||||||
Gross profit | 961.4 | 167.5 | — | — | 1,128.9 | |||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 934.7 | 136.5 | — | 12.2 | bb | 1,083.4 | ||||||||||||||||||||||||||||||||||||||
Asset impairment charge | 2.4 | — | — | — | 2.4 | |||||||||||||||||||||||||||||||||||||||
Earnings (loss) from operations | 24.3 | 31.0 | — | (12.2) | 43.1 | |||||||||||||||||||||||||||||||||||||||
Unrealized loss on forward contract | (3.6) | — | — | — | (3.6) | |||||||||||||||||||||||||||||||||||||||
Other income (expense), net | 4.2 | (28.6) | (18.5) | aa | 21.0 | cc, dd | (21.9) | |||||||||||||||||||||||||||||||||||||
Earnings (loss) before taxes | 24.9 | 2.4 | (18.5) | 8.8 | 17.6 | |||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) | (11.5) | 9.0 | (4.7) | ee | (4.9) | ee | (12.1) | |||||||||||||||||||||||||||||||||||||
Net earnings (loss) | $ | 36.4 | $ | (6.6) | $ | (13.8) | $ | 13.7 | $ | 29.7 | ||||||||||||||||||||||||||||||||||
Basic earnings (loss) per share | $ | 0.99 | $ | 0.83 | ||||||||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.98 | $ | 0.82 | ||||||||||||||||||||||||||||||||||||||||
Average shares outstanding (millions): | ||||||||||||||||||||||||||||||||||||||||||||
Basic | 35.9 | 35.9 | ||||||||||||||||||||||||||||||||||||||||||
Diluted | 36.3 | 36.3 |
Unaudited Pro Forma Condensed Combined Statement of Earnings For the Three Months ended March 31, 2024 (In millions of dollars except per share data) | ||||||||||||||||||||||||||||||||||||||||||||
Historical | ||||||||||||||||||||||||||||||||||||||||||||
Kelly Services, Inc. | MRP Topco, Inc. (See Note 4) | Debt Financing Transaction Adjustments | Note 5 | Transaction Accounting Adjustments | Note 5 | Pro Forma Combined | ||||||||||||||||||||||||||||||||||||||
Revenue from services | $ | 1,045.1 | $ | 130.5 | $ | — | $ | — | $ | 1,175.6 | ||||||||||||||||||||||||||||||||||
Cost of services | 839.4 | 94.1 | — | — | 933.5 | |||||||||||||||||||||||||||||||||||||||
Gross profit | 205.7 | 36.4 | — | — | 242.1 | |||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 190.5 | 32.0 | — | 3.1 | bbb | 225.6 | ||||||||||||||||||||||||||||||||||||||
Gain on sale of EMEA staffing operations | (11.6) | — | — | — | (11.6) | |||||||||||||||||||||||||||||||||||||||
Earnings (loss) from operations | 26.8 | 4.4 | — | (3.1) | 28.1 | |||||||||||||||||||||||||||||||||||||||
Gain on forward contract | 1.2 | — | — | — | 1.2 | |||||||||||||||||||||||||||||||||||||||
Other income (expense), net | 1.8 | (7.9) | (4.6) | aaa | 7.9 | ccc | (2.8) | |||||||||||||||||||||||||||||||||||||
Earnings (loss) before taxes | 29.8 | (3.5) | (4.6) | 4.8 | 26.5 | |||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) | 4.0 | — | (1.2) | ddd | 0.3 | ddd | 3.1 | |||||||||||||||||||||||||||||||||||||
Net earnings (loss) | $ | 25.8 | $ | (3.5) | $ | (3.4) | $ | 4.5 | $ | 23.4 | ||||||||||||||||||||||||||||||||||
Basic earnings (loss) per share | $ | 0.71 | $ | 0.66 | ||||||||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.70 | $ | 0.65 | ||||||||||||||||||||||||||||||||||||||||
Average shares outstanding (millions): | ||||||||||||||||||||||||||||||||||||||||||||
Basic | 35.4 | 35.4 | ||||||||||||||||||||||||||||||||||||||||||
Diluted | 35.8 | 35.8 |
Cash consideration paid | $ | 425.0 | |||
Estimated cash acquired | 13.6 | ||||
Estimated net working capital adjustment | 1.4 | ||||
Total cash consideration | 440.0 | ||||
Additional consideration payable | 3.4 | ||||
Total consideration | $ | 443.4 |
Assets acquired: | |||||
Cash and equivalents | $ | 7.9 | |||
Trade accounts receivable, less allowances | 90.9 | ||||
Prepaid expenses and other current assets | 7.7 | ||||
Net property and equipment | 3.9 | ||||
Operating lease right-of-use assets | 12.5 | ||||
Goodwill, net | 229.4 | ||||
Intangibles, net | 145.9 | ||||
Other assets | 10.3 | ||||
Total assets acquired | $ | 508.5 | |||
Liabilities assumed: | |||||
Accounts payable and accrued liabilities | $ | 22.8 | |||
Operating lease liabilities | 4.0 | ||||
Accrued payroll and related taxes | 8.7 | ||||
Operating lease liabilities (noncurrent) | 9.6 | ||||
Other long-term liabilities | 20.0 | ||||
Total liabilities assumed | 65.1 | ||||
Net assets acquired | $ | 443.4 |
Historical MRP as of March 31, 2024 | Reclassification Adjustments | Note 4 | Historical MRP as of March 31, 2024 as reclassified | ||||||||||||||||||||
Assets | |||||||||||||||||||||||
Current assets | |||||||||||||||||||||||
Cash and equivalents | $ | 7.9 | $ | — | $ | 7.9 | |||||||||||||||||
Accounts receivable, net of allowance for placement fall-offs and credit losses | 69.1 | (69.1) | (a) | — | |||||||||||||||||||
Trade accounts receivable, less allowances | 90.9 | (a),(b) | 90.9 | ||||||||||||||||||||
Unbilled receivables | 21.8 | (21.8) | (b) | — | |||||||||||||||||||
Prepaid expenses and other current assets | 3.7 | 3.8 | (c) | 7.5 | |||||||||||||||||||
Prepaid income taxes | 1.6 | (1.6) | (c) | — | |||||||||||||||||||
Cloud computing costs | 2.2 | (2.2) | (c) | — | |||||||||||||||||||
Total current assets | 106.3 | — | 106.3 | ||||||||||||||||||||
Property and equipment, net | 3.9 | (3.9) | (a) | — | |||||||||||||||||||
Net property and equipment | 3.9 | (a) | 3.9 | ||||||||||||||||||||
Security deposits | 1.1 | (1.1) | (d) | — | |||||||||||||||||||
Right-of-use assets, net | 12.5 | (12.5) | (a) | — | |||||||||||||||||||
Operating lease right-of-use assets | 12.5 | (a) | 12.5 | ||||||||||||||||||||
Goodwill | 148.7 | (148.7) | (a) | — | |||||||||||||||||||
Goodwill, net | 148.7 | (a) | 148.7 | ||||||||||||||||||||
Deferred taxes | (3.3) | (a) | (3.3) | ||||||||||||||||||||
Intangible assets, net | 9.2 | (9.2) | (a) | — | |||||||||||||||||||
Intangibles, net | 9.2 | (a) | 9.2 | ||||||||||||||||||||
Other assets | 16.7 | (d),(h) | 16.7 | ||||||||||||||||||||
Cloud computing costs, net of current portion | 12.6 | (12.6) | (d) | — | |||||||||||||||||||
Total Assets | $ | 294.3 | $ | (0.3) | $ | 294.0 | |||||||||||||||||
Historical MRP as of March 31, 2024 | Reclassification Adjustments | Note 4 | Historical MRP as of March 31, 2024 as reclassified | ||||||||||||||||||||
Liabilities and Shareholders' Equity (Deficiency) | |||||||||||||||||||||||
Current Liabilities | |||||||||||||||||||||||
Accounts payable | $ | 18.6 | $ | (18.6) | (e) | $ | — | ||||||||||||||||
Accrued expenses | 15.2 | (15.2) | (e), (f) | — | |||||||||||||||||||
Accounts payable and accrued liabilities | 25.1 | (e), (f) | 25.1 | ||||||||||||||||||||
Lease liabilities, current portion | 4.0 | (4.0) | (a) | — | |||||||||||||||||||
Operating lease liabilities | 4.0 | (a) | 4.0 | ||||||||||||||||||||
Deferred tax liability, net | 3.3 | (3.3) | (a) | — | |||||||||||||||||||
Accrued payroll and related taxes | 8.7 | (f) | 8.7 | ||||||||||||||||||||
Asset-based line of credit | 3.0 | (3.0) | (g) | — | |||||||||||||||||||
Total current liabilities | 44.1 | (6.3) | 37.8 | ||||||||||||||||||||
Long-term debt, net of current portion | 227.6 | (227.6) | (g), (h) | — | |||||||||||||||||||
Lease liabilities, net of current portion | 9.6 | (9.6) | (a) | — | |||||||||||||||||||
Operating lease liabilities (noncurrent) | 9.6 | (a) | 9.6 | ||||||||||||||||||||
Other long-term liabilities | 233.6 | (a), (g) | 233.6 | ||||||||||||||||||||
Total Liabilities | 281.3 | (0.3) | 281.0 | ||||||||||||||||||||
Shareholders' equity (deficiency) | |||||||||||||||||||||||
Additional paid-in capital | 153.6 | (153.6) | (a) | — | |||||||||||||||||||
Paid-in capital | 153.6 | (a) | 153.6 | ||||||||||||||||||||
Accumulated deficit | (140.5) | 140.5 | (a) | — | |||||||||||||||||||
Earnings invested in the business | (140.5) | (a) | (140.5) | ||||||||||||||||||||
Accumulated other comprehensive loss | (0.1) | 0.1 | (a) | — | |||||||||||||||||||
Accumulated other comprehensive income (loss) | (0.1) | (a) | (0.1) | ||||||||||||||||||||
Total shareholders' equity (deficiency) | 13.0 | — | 13.0 | ||||||||||||||||||||
Total liabilities and shareholders' equity (deficiency) | $ | 294.3 | $ | (0.3) | $ | 294.0 |
Historical MRP for the year ended December 31, 2023 | Reclassification Adjustments | Note 4 | Historical MRP for the year ended December 31, 2023, as reclassified | ||||||||||||||||||||
Net revenues | $ | 554.1 | $ | (554.1) | (a) | $ | — | ||||||||||||||||
Revenue from services | — | 554.1 | (a) | 554.1 | |||||||||||||||||||
Cost of services | 470.1 | (83.5) | (b) | 386.6 | |||||||||||||||||||
Gross profit | 84.0 | 83.5 | 167.5 | ||||||||||||||||||||
Selling, general and administrative expenses | — | 136.5 | (a),(b) | 136.5 | |||||||||||||||||||
Operating expenses | 51.9 | (51.9) | (a) | — | |||||||||||||||||||
Merger and acquisition expenses | 0.2 | (0.2) | (a) | — | |||||||||||||||||||
Share-based compensation expense | 0.6 | (0.6) | (a) | — | |||||||||||||||||||
Related party management fees | 0.3 | (0.3) | (a) | — | |||||||||||||||||||
Earnings from operations | 31.0 | — | 31.0 | ||||||||||||||||||||
Other income (expense), net | — | (28.6) | (a) | (28.6) | |||||||||||||||||||
Interest expense and amortization of debt issuance costs | (29.0) | 29.0 | (a) | — | |||||||||||||||||||
Interest income | 0.4 | (0.4) | (a) | — | |||||||||||||||||||
Earnings before tax expense | 2.4 | — | 2.4 | ||||||||||||||||||||
Income tax expense (benefit) | 9.0 | — | 9.0 | ||||||||||||||||||||
Net earnings (loss) | $ | (6.6) | $ | — | $ | (6.6) |
Historical MRP for the three months ended March 31, 2024 | Reclassification Adjustments | Note 4 | Historical MRP for the three months ended March 31, 2024, as reclassified | ||||||||||||||||||||
Net revenues | $ | 130.5 | $ | (130.5) | (a) | $ | — | ||||||||||||||||
Revenue from services | — | 130.5 | (a) | 130.5 | |||||||||||||||||||
Cost of services | 113.8 | (19.7) | (b) | 94.1 | |||||||||||||||||||
Gross profit | 16.7 | 19.7 | 36.4 | ||||||||||||||||||||
Selling, general and administrative expenses | — | 32.0 | (a),(b) | 32.0 | |||||||||||||||||||
Operating expenses | 12.0 | (12.0) | (a) | — | |||||||||||||||||||
Share-based compensation expense | 0.2 | (0.2) | (a) | — | |||||||||||||||||||
Related party management fees | 0.1 | (0.1) | (a) | — | |||||||||||||||||||
Earnings from operations | 4.4 | — | 4.4 | ||||||||||||||||||||
Other income (expense), net | — | (7.9) | (a) | (7.9) | |||||||||||||||||||
Interest expense and amortization of debt issuance costs | (7.9) | 7.9 | (a) | — | |||||||||||||||||||
Earnings before tax expense | (3.5) | — | (3.5) | ||||||||||||||||||||
Income tax expense (benefit) | — | — | — | ||||||||||||||||||||
Net earnings (loss) | $ | (3.5) | $ | — | $ | (3.5) |
Estimated fair value (in millions) | Useful life (Years) | ||||||||||
Customer relationships | $ | 88.1 | 15 | ||||||||
Trade names | 56.5 | 10-15 | |||||||||
Non-compete agreements | 1.3 | 4 | |||||||||
Total | $ | 145.9 |
Estimated fair value (in millions) | Useful life (Years) | Amortization for the year ended December 31, 2023 (in millions) | |||||||||||||||
Customer relationships | $ | 88.1 | 15 | $ | 5.9 | ||||||||||||
Trade names | 56.5 | 10-15 | 5.3 | ||||||||||||||
Non-compete agreements | 1.3 | 4 | 0.3 | ||||||||||||||
Software | 11.5 | 5 | 2.3 | ||||||||||||||
Total | $ | 157.4 | $ | 13.8 |
Estimated fair value (in millions) | Useful life (Years) | Amortization for the three months ended March 31, 2024 (in millions) | |||||||||||||||
Customer relationships | $ | 88.1 | 15 | $ | 1.5 | ||||||||||||
Trade names | 56.5 | 10-15 | 1.3 | ||||||||||||||
Non-compete agreements | 1.3 | 4 | 0.1 | ||||||||||||||
Software | 11.5 | 5 | 0.6 | ||||||||||||||
Total | $ | 157.4 | $ | 3.5 |
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