Kelly Services Plunges to $150M Loss on Goodwill Impairment

TL;DR

**Kelly's massive goodwill impairment and revenue drop signal deep trouble; sell now before it gets worse.**

AI Summary

KELLY SERVICES INC reported a significant net loss of $150.1 million for the 13 weeks ended September 28, 2025, a sharp decline from a net income of $0.8 million in the prior-year quarter. This substantial loss was primarily driven by a $102.0 million goodwill impairment charge. Revenue from services decreased by 10% to $935.0 million for the quarter, down from $1,038.1 million in the same period last year. For the 39 weeks ended September 28, 2025, the company posted a net loss of $125.3 million, compared to a net income of $31.2 million in the prior year, despite a slight increase in year-to-date revenue to $3,201.7 million from $3,140.7 million. The company restructured its operating segments in Q1 2025, combining Professional & Industrial (P&I) and Outsourcing & Consulting Group (OCG) into Enterprise Talent Management (ETM) and integrating the Sevenstep business into ETM. Cash and equivalents decreased to $30.1 million from $39.0 million at December 29, 2024, and long-term debt decreased significantly from $239.4 million to $118.4 million.

Why It Matters

This filing reveals a challenging period for Kelly Services, marked by a substantial net loss and declining quarterly revenue, which could signal broader headwinds in the staffing industry. The $102.0 million goodwill impairment charge suggests that previous acquisitions or investments are not performing as expected, potentially impacting investor confidence and future strategic decisions. For employees, a struggling company might lead to job insecurity or reduced growth opportunities. Customers could see changes in service offerings or pricing as Kelly navigates its financial challenges, potentially affecting its competitive standing against rivals like Randstad and Adeptco.

Risk Assessment

Risk Level: high — The company reported a net loss of $150.1 million for the 13 weeks ended September 28, 2025, primarily due to a $102.0 million goodwill impairment charge. This significant impairment, coupled with a 10% decline in quarterly revenue from services to $935.0 million, indicates substantial operational and financial distress. The negative earnings from operations of $102.1 million further underscore the high risk.

Analyst Insight

Investors should consider reducing or exiting their positions in KELYB given the significant net loss, goodwill impairment, and declining quarterly revenue. Monitor future filings closely for signs of stabilization in revenue and profitability, and assess the impact of the segment restructuring on long-term performance before considering re-entry.

Financial Highlights

debt To Equity

N/A

revenue

$3,201.7M

operating Margin

N/A

total Assets

N/A

total Debt

$118.4M

net Income

$ (125.3)M

eps

$ (3.56)

gross Margin

20.5%

cash Position

$30.1M

revenue Growth

+1.9%

Revenue Breakdown

Key Numbers

• $150.1M — Net Loss (13 weeks) (Significant decline from $0.8M net earnings in prior year, driven by impairment.)
• $102.0M — Goodwill Impairment Charge (Primary driver of the net loss for the quarter.)
• $935.0M — Revenue from Services (13 weeks) (10% decrease from $1,038.1M in the prior-year quarter.)
• $125.3M — Net Loss (39 weeks) (Shift from $31.2M net earnings in prior year, reflecting ongoing challenges.)
• $3,201.7M — Revenue from Services (39 weeks) (Slight increase from $3,140.7M in prior year, despite quarterly decline.)
• $118.4M — Long-term Debt (Significant reduction from $239.4M at December 29, 2024.)
• $30.1M — Cash and Equivalents (Decrease from $39.0M at December 29, 2024.)
• $425.0M — MRP Acquisition Purchase Price (Total cash consideration for Motion Recruitment Partners acquisition.)
• $21.8M — Proceeds from EMEA Staffing Operations Sale (Net cash received from disposition in 2025.)
• ($102.1M) — Earnings (loss) from operations (13 weeks) (Significant operational loss compared to $2.6M gain in prior year.)

Key Players & Entities

• KELLY SERVICES INC (company) — registrant
• Gi Group Holdings S.P.A. (company) — acquirer of EMEA staffing operations
• Motion Recruitment Partners, LLC (company) — acquired company
• Children's Therapy Center (company) — acquired company
• Nasdaq Stock Market LLC (regulator) — exchange for KELYA and KELYB
• SEC (regulator) — filing authority
• $150.1 million (dollar_amount) — net loss for 13 weeks ended September 28, 2025
• $102.0 million (dollar_amount) — goodwill impairment charge
• $935.0 million (dollar_amount) — revenue from services for 13 weeks ended September 28, 2025
• $125.3 million (dollar_amount) — net loss for 39 weeks ended September 28, 2025

FAQ

Risk Factors

• Significant Net Loss and Goodwill Impairment [high — financial]: The company reported a net loss of $150.1 million for the 13 weeks ended September 28, 2025, primarily due to a $102.0 million goodwill impairment charge. This indicates a substantial deterioration in financial performance compared to the prior year's net income of $0.8 million.
• Revenue Decline in Key Segments [high — operational]: Revenue from services decreased by 10% to $935.0 million for the quarter. The Enterprise Talent Management segment, which is now larger due to restructuring, saw a 7.0% decrease in revenue year-to-date.
• Decreasing Cash Position [medium — financial]: Cash and equivalents decreased to $30.1 million from $39.0 million at December 29, 2024. This reduction, coupled with significant debt, could impact liquidity and operational flexibility.
• Debt Reduction and Acquisition Funding [medium — financial]: Long-term debt was significantly reduced from $239.4 million to $118.4 million. However, the company funded the $425.0 million MRP acquisition, which may have implications for future cash flows and debt levels.
• Segment Restructuring and Integration [medium — operational]: The company restructured its operating segments in Q1 2025, combining P&I and OCG into ETM and integrating Sevenstep. While intended to improve strategy, such integrations can present operational challenges and integration risks.

Industry Context

The staffing and talent solutions industry is highly competitive and sensitive to economic cycles. Companies like Kelly Services face pressure from both large global players and specialized niche providers. Trends include a growing demand for contingent labor, specialized skill sets (especially in tech and healthcare), and integrated talent management solutions. Economic uncertainty and labor market shifts can significantly impact demand for services.

Regulatory Implications

As a global employer, Kelly Services is subject to various labor laws, regulations, and compliance requirements in each jurisdiction it operates. Changes in employment laws, tax regulations, or data privacy rules (like GDPR) can impact operational costs and compliance efforts. The company's recent acquisitions also bring integration challenges related to differing regulatory environments.

What Investors Should Do

1. Monitor the impact of the goodwill impairment charge on future earnings and investor confidence.
2. Analyze the performance of the newly structured Enterprise Talent Management (ETM) segment.
3. Assess the integration progress and financial contribution of the Motion Recruitment Partners (MRP) acquisition.
4. Evaluate the company's cash flow generation and liquidity management.

Key Dates

• 2025-09-28: End of Q3 2025 reporting period — Reported a significant net loss of $150.1 million, driven by a $102.0 million goodwill impairment charge.
• 2025-05-31: Acquisition of Motion Recruitment Partners (MRP) — Acquisition for $425.0 million, intended to strengthen the company's solutions portfolio. The integration and its financial impact are ongoing.
• 2025-01-01: Restructuring of operating segments — Combined P&I and OCG into ETM, integrated Sevenstep. This change impacts comparability of segment data.
• 2024-11-13: Acquisition of Children's Therapy Center (CTC) — Acquisition for $3.1 million to expand therapeutic services, adding goodwill of $2.9 million.
• 2024-02-13: Filing of 2024 Form 10-K — Provided the basis for comparison for the current interim financial statements.

Glossary

Goodwill Impairment Charge

A non-cash expense recognized when the carrying value of goodwill on a company's balance sheet exceeds its fair value, indicating a loss in value. (This was the primary driver of Kelly's significant net loss in the current quarter ($102.0 million).)

Enterprise Talent Management (ETM)

A restructured operating segment combining Professional & Industrial (P&I) and Outsourcing & Consulting Group (OCG), along with the Sevenstep business. (Represents a significant portion of Kelly's business and its performance is key to overall results.)

Revenue from Services

The total income generated from the company's core business operations, which involve providing staffing and talent solutions. (A key top-line metric that showed a 10% decline in the current quarter.)

Staffing Services

A core service offering where Kelly provides temporary or contract workers to clients. (A major component of revenue, with the ETM segment's staffing services revenue decreasing year-to-date.)

Outcome-based Services

Services where Kelly is compensated based on achieving specific results or outcomes for clients, rather than just providing labor. (A growing area of focus, though its contribution to total revenue is smaller than staffing services.)

Motion Recruitment Partners (MRP)

A recently acquired company that provides global talent solutions, integrated into Kelly's portfolio. (A significant acquisition that impacts the company's scale and future growth strategy.)

Year-Over-Year Comparison

Compared to the prior year's comparable period, Kelly Services has experienced a significant downturn. Revenue from services for the 13 weeks ended September 28, 2025, decreased by 10% to $935.0 million from $1,038.1 million. More critically, net income has swung from a profit of $0.8 million to a substantial net loss of $150.1 million, largely due to a $102.0 million goodwill impairment charge. While year-to-date revenue saw a slight increase to $3,201.7 million from $3,140.7 million, the overall profitability trend is sharply negative, with year-to-date net income falling from $31.2 million to a loss of $125.3 million.

Key Financial Figures

• $1.00 — which registered Class A Common Stock, $1.00 par value per share KELYA The Nasdaq St
• $0.0 — ion adjustments, net of tax benefits of $0.0 and $0.1, tax expense of $0.6 and tax b
• $0 — tments, net of tax benefits of $0.0 and $0.1, tax expense of $0.6 and tax benefit
• $0.6 — nefits of $0.0 and $0.1, tax expense of $0.6 and tax benefit of $0.1, respectively (
• $0.4 — lity adjustments, net of tax benefit of $0.4 — — — — Less: Reclassification adjustm

Filing Documents

• kelya-20250928.htm (10-Q) — 1473KB
• a20250928-10qxexh311.htm (EX-31.1) — 10KB
• a20250928-10qxexh312.htm (EX-31.2) — 10KB
• a20250928-10qxexh321.htm (EX-32.1) — 5KB
• a20250928-10qxexh322.htm (EX-32.2) — 6KB
• 0000055135-25-000080.txt ( ) — 8500KB
• kelya-20250928.xsd (EX-101.SCH) — 47KB
• kelya-20250928_cal.xml (EX-101.CAL) — 83KB
• kelya-20250928_def.xml (EX-101.DEF) — 308KB
• kelya-20250928_lab.xml (EX-101.LAB) — 607KB
• kelya-20250928_pre.xml (EX-101.PRE) — 481KB
• kelya-20250928_htm.xml (XML) — 1523KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 4

Financial Statements (unaudited)

Item 1. Financial Statements (unaudited) . 4 Consolidated Statements of Earnings 4 Consolidated Statements of Comprehensive Income (Loss) 5 Consolidated Balance Sheets 6 Consolidated Statements of Stockholders' Equity 8 Consolidated Statements of Cash Flows 9

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 11

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . 32

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk . 42

Controls and Procedures

Item 4. Controls and Procedures . 42

OTHER INFORMATION

PART II. OTHER INFORMATION 43

Legal Proceedings

Item 1. Legal Proceedings . 43

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds . 43

Other Information

Item 5. Other Information . 43

Exhibits

Item 6. Exhibits . 44

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. KELLY SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (in millions, except per share data) 13 Weeks Ended 39 Weeks Ended September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024 Revenue from services $ 935.0 $ 1,038.1 $ 3,201.7 $ 3,140.7 Cost of services 741.0 816.4 2,545.7 2,499.6 Gross profit 194.0 221.7 656.0 641.1 Selling, general and administrative expenses 194.4 219.0 627.4 601.0 Goodwill impairment charge 102.0 — 102.0 — Asset impairment charge — — — 5.5 (Gain) loss on sale of EMEA staffing operations ( 0.3 ) — ( 4.3 ) ( 1.6 ) (Gain) loss on sale of assets — 0.1 — ( 5.4 ) Earnings (loss) from operations ( 102.1 ) 2.6 ( 69.1 ) 41.6 Gain on forward contract — — — 1.2 Other income (expense), net ( 1.6 ) ( 4.4 ) ( 7.1 ) ( 9.1 ) Earnings (loss) before taxes ( 103.7 ) ( 1.8 ) ( 76.2 ) 33.7 Income tax expense (benefit) 46.4 ( 2.6 ) 49.1 2.5 Net earnings (loss) $ ( 150.1 ) $ 0.8 $ ( 125.3 ) $ 31.2 Basic earnings (loss) per share $ ( 4.26 ) $ 0.02 $ ( 3.56 ) $ 0.86 Diluted earnings (loss) per share $ ( 4.26 ) $ 0.02 $ ( 3.56 ) $ 0.85 Average shares outstanding (millions): Basic 35.3 35.6 35.2 35.5 Diluted 35.3 36.0 35.2 35.9 See accompanying unaudited Notes to Consolidated Financial Statements. 4 KELLY SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (in millions) 13 Weeks Ended 39 Weeks Ended September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024 Net earnings (loss) $ ( 150.1 ) $ 0.8 $ ( 125.3 ) $ 31.2 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments, net of tax benefits of $0.0 and $0.1, tax expense of $0.6 and tax benefit of $0.1, respectively ( 0.2 ) 1.2 6.1 ( 1.3 ) Less: Reclassification adjustments included in net earnings — — — ( 0.6 ) Foreign currency translation adjustments ( 0.2 ) 1.2 6.1 ( 1.9 ) Pension liabil

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. 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 December 29, 2024, included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 13, 2025 (the 2024 consolidated financial statements). There were no changes in accounting policies from those disclosed in the Form 10-K. The Company's third fiscal quarter ended on September 28, 2025 and September 29, 2024, each of which contained 13 weeks. The corresponding September year-to-date periods for 2025 and 2024 each contained 39 weeks. Certain reclassifications have been made to the prior year's consolidated financial statements to conform to the current year's presentation. Specifically, as discussed in the Revenue and Segment Disclosures footnotes, the Company made a change to its reportable segments during the first quarter of 2025. 2. Revenue Revenue Disaggregated by Service Type In 2025, Kelly has three operating segments: Enterprise Talent Management ("ETM"), Science, Engineering & Technology ("SET"), and Education. The ETM segment combines two former reportable segments, Professional & Industrial ("P&I") and Outsourcing & Consultin

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (UNAUDITED) Third Quarter 2024 Staffing Services Outcome-based Services Talent Solutions Permanent Placement Total Enterprise Talent Management $ 299.0 $ 130.9 $ 129.1 $ 2.6 $ 561.6 Science, Engineering & Technology 211.1 113.7 — 10.2 335.0 Education 141.4 — — 0.7 142.1 Total Segment Revenue $ 651.5 $ 244.6 $ 129.1 $ 13.5 $ 1,038.7 Intersegment ( 0.6 ) Total Revenue from Services $ 1,038.1 September Year-to-Date 2025 Staffing Services Outcome-based Services Talent Solutions Permanent Placement Total Enterprise Talent Management $ 800.4 $ 362.5 $ 371.9 $ 7.3 $ 1,542.1 Science, Engineering & Technology 597.4 321.0 — 26.2 944.6 Education 713.1 — — 4.5 717.6 Total Segment Revenue $ 2,110.9 $ 683.5 $ 371.9 $ 38.0 $ 3,204.3 Intersegment ( 2.6 ) Total Revenue from Services $ 3,201.7 September Year-to-Date 2024 Staffing Services Outcome-based Services Talent Solutions Permanent Placement Total Enterprise Talent Management $ 877.1 $ 390.5 $ 351.7 $ 7.6 $ 1,626.9 Science, Engineering & Technology 515.8 296.3 — 20.2 832.3 Education 678.7 — — 4.4 683.1 Total Segment Revenue $ 2,071.6 $ 686.8 $ 351.7 $ 32.2 $ 3,142.3 Intersegment ( 1.6 ) Total Revenue from Services $ 3,140.7 12 KELLY SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (UNAUDITED) Revenue Disaggregated by Geography The Company's operations are subject to different economic and regulatory environments depending on geographic location. The Company's Education segment operates in the Americas region, the SET segment operates in the Americas and Europe regions, and the ETM segment operates in the Americas, Europe and Asia-Pacific regions. The table below presents the Company's revenues disaggregated by geography (in millions): Third Quarter September Year-to-Date 2025 2024 2025 2024 Americas United States $ 823.9 $ 923.6 $ 2,867.4 $ 2,801.4 Other 83.0 88.6 252.5 267.8 Total Americas Region 906.9 1,012.2 3,119.9 3,069.2 Total Europe Region 10.9 10.1 32.4 31.7 Total Asia-Pacific Region 17.2 15.8 49.4 39.8 Total Kelly Services, Inc. $ 935.0 $ 1,038.1 $ 3,201.7 $ 3,140.7 Deferred Costs Deferred fulfillment costs, which are included in prepaid expenses and other current assets in the consolidated balance sheet, were zero as of third quarter-end 2025 and $ 1.8 million as of year-end 2024. Amortization expense for the deferred costs in the third quarter and September year-to-date 2025 was $ 0.1 million and $ 1.9 million, respectively. Amortization expense for the deferred costs in the third quarter and September year-to-date 2024 was $ 1.3 million and $ 5.4 million, respectively. 3. Credit Losses The rollforward of the Company's allowance for credit losses related to trade accounts receivable, which is recorded in trade accounts receivable, less allowance in the consolidated balance sheet, is as follows (in millions): September Year-to-Date 2025 2024 Allowance for credit losses: Beginning balance $ 4.9 $ 8.0 Current period provision 3.4 1.0 Currency exchange effects 0.1 ( 0.2 ) Disposition of EMEA staffing operations — ( 2.4 ) Write-offs ( 0.7 ) ( 0.7 ) Ending balance $ 7.7 $ 5.7 Write-offs are presented net of recoveries, which were not material f

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (UNAUDITED) 4. Acquisitions and Disposition Acquisitions Children's Therapy Center On November 13, 2024, Kelly Services USA, LLC ("KSU"), a wholly owned subsidiary of the Company, acquired 100 % of the issued and outstanding limited liability company interests of Children's Therapy Center ("CTC"). CTC specializes in occupational, physical, and speech therapy for children and expands the Company's growth opportunities in therapeutic services. Under terms of the purchase agreement, the purchase price of $ 3.3 million was adjusted for cash held by CTC at the closing date and estimated working capital adjustments, resulting in the company paying cash of $ 3.1 million. In the first quarter of 2025, the Company received a post-close net working capital adjustment of $ 0.1 million. Goodwill generated from the acquisition of $ 2.9 million, net of the net working capital adjustment, was primarily attributable to expanding market potential and was assigned to the Education operating segment (see Goodwill footnote). CTC's results of operations are included in the Education segment. Motion Recruitment Partners On May 31, 2024, the Company indirectly acquired 100 % of the equity interests in Motion Recruitment Partners, LLC ("MRP") by way of a merger with MRP Merger Sub, Inc. ("Merger Sub"), a newly-formed, wholly owned subsidiary of the Company, with and into MRP Topco ("Topco"), the indirect parent company of MRP and Littlejohn Fund V, L.P. ("Littlejohn"), with Topco surviving the merger (the "Merger"). MRP is a parent company to a group of leading global talent solutions providers and the acquisition is expected to strengthen the scale and capabilities of Kelly's solutions portfolio. Under terms of the merger agreement, the $ 425.0 million purchase price was adjusted for estimated cash held by MRP at the closing date and estimated working capital adjustments, resulting in the Company paying cash of $ 440.0 million

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (UNAUDITED) As of May 2025, the purchase price allocation for this acquisition is final. None of the goodwill generated from the acquisition is expected to be deductible for tax purposes. MRP's results of operations are included in the ETM and SET segments, with MRP's Sevenstep business included in ETM and the remaining operations in SET. Disposition of EMEA Staffing Operations On January 2, 2024, the Company completed the sale of its EMEA staffing operations ("disposal group"), which was included in the Company's former International operating segment, to Gi Group Holdings S.P.A. ("Gi"). Upon closing, the Company received cash proceeds of $ 110.6 million, or $ 77.1 million net of cash disposed, which was included in investing activities in the consolidated statements of cash flows. The Company will not receive any proceeds from the contingent consideration opportunity associated with the transaction. In the first quarter of 2024, the Company recorded a euro-denominated receivable from Gi of $ 26.9 million, representing working capital and other adjustments that were determinable and expected to be received under the cash-free, debt-free transaction structure. In the second quarter of 2024, the Company recorded negative working capital and other adjustments of $ 10.1 million, which reduced the net receivable from Gi and was recognized in (gain) loss on sale of EMEA staffing operations in the consolidated statements of earnings. In the second quarter of 2025, the Company received proceeds of $ 21.8 million in connection with this receivable. The proceeds exceeded the amount previously recorded due to favorable resolution of certain reconciliations under the terms of the purchase agreement. As a result, $ 4.8 million was recognized in the consolidated statements of earnings in the second quarter of 2025, with $ 4.0 million recorded in (gain) loss on sale of EMEA staffing operations and $ 0.8 million recorded

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (UNAUDITED) As of Year-End 2024 Description Total Level 1 Level 2 Level 3 (in millions) Money market funds $ 6.4 $ 6.4 $ — $ — Total assets at fair value $ 6.4 $ 6.4 $ — $ — Interest rate swaps $ ( 0.4 ) $ — $ ( 0.4 ) $ — EMEA staffing indemnification ( 2.0 ) — — ( 2.0 ) Brazil indemnification ( 1.7 ) — — ( 1.7 ) Total liabilities at fair value $ ( 4.1 ) $ — $ ( 0.4 ) $ ( 3.7 ) Money Market Funds Money market funds represent investments in money market funds that hold government securities, all of which are restricted as of third quarter-end 2025 and year-end 2024, and are included in other assets in the consolidated balance sheet. These restricted funds represent cash balances that are required to be maintained to fund disability claims in California. The valuations of money market funds are based on quoted market prices of those accounts as of the respective period end. Interest Rate Swaps On July 17, 2024, the Company entered into two interest rate swaps with a notional value of $ 50.0 million each to manage Secured Overnight Financing Rate ("SOFR") fluctuations on the securitization facility (see Debt footnote). These contracts were not designated as hedging instruments; therefore, the mark-to-market fair value changes and the cash settlements on the swaps are recognized in earnings. The Company's interest rate swaps were valued with assistance from a third party based on pricing models using observable inputs, such as SOFR forward rates, and are considered level 2 liabilities, which are remeasured quarterly. The 12-month interest rate swap was settled in the second quarter of 2025 (see Debt footnote). As of third quarter-end 2025 and year-end 2024, the Comp

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