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NOTE 1: | ACCOUNTING PRINCIPLES AND PRACTICES |
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NOTE 2: | FAIR VALUE MEASUREMENT |
• | Level 1: Inputs are valued using quoted market prices in active markets for identical assets or liabilities. Our Level 1 assets primarily include cash and cash equivalents, mutual funds and United States Treasury Securities. |
• | Level 2: Inputs are valued based upon quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active. Our Level 2 assets are restricted investments which primarily consist of Municipal Securities, Corporate Securities, U.S. Agency Mortgages and U.S. Agency Debentures. We obtain our inputs from quoted market prices and independent pricing vendors. |
• | Level 3: Inputs are generally unobservable and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability. We currently have no Level 3 assets or liabilities. |
September 28, 2012 | December 30, 2011 | ||||||
Level 1: | |||||||
Cash equivalents (1) | $ | 86.3 | $ | 55.5 | |||
Restricted cash equivalents (1) | 26.6 | 31.2 | |||||
Restricted investments classified as held-to-maturity (2) | — | 1.0 | |||||
Other restricted investments (3) | 3.8 | 2.2 | |||||
Level 2: | |||||||
Restricted investments classified as held-to-maturity (4) | 81.9 | 78.0 |
(1) | Cash equivalents and restricted cash equivalents consist of money market funds, deposits and investments with original maturities of three months or less. |
(2) | Level 1 restricted investments classified as held-to-maturity consist of United States Treasury Securities. |
(3) | Level 1 other restricted investments consist of deferred compensation investments which are comprised of mutual funds. We have an equal and offsetting accrued liability related to the deferred compensation plan. |
(4) | Level 2 restricted investments classified as held-to-maturity consist of Municipal Securities, Corporate Securities, U.S. Agency Mortgages and U.S. Agency Debentures. |
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NOTE 3: | RESTRICTED CASH AND INVESTMENTS |
September 28, 2012 | December 30, 2011 | ||||||
Cash collateral held by insurance carriers | $ | 21.5 | $ | 21.3 | |||
Cash and cash equivalents held in Trust (1) | 21.7 | 19.2 | |||||
Investments held in Trust | 80.0 | 78.0 | |||||
Cash collateral backing letters of credit | 1.8 | 5.9 | |||||
Other (2) | 7.1 | 6.1 | |||||
Total restricted cash and investments | $ | 132.1 | $ | 130.5 |
(1) | Included in this amount is $0.8 million of accrued interest at both September 28, 2012 and December 30, 2011. |
(2) | Primarily consists of restricted cash in money market accounts and deferred compensation plan accounts which are comprised of mutual funds. |
September 28, 2012 | |||||||||||||||
Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Municipal securities | $ | 49.7 | $ | 1.2 | $ | — | $ | 50.9 | |||||||
Corporate bonds | 14.2 | 0.4 | — | 14.6 | |||||||||||
Asset backed bonds | 16.1 | 0.3 | — | 16.4 | |||||||||||
$ | 80.0 | $ | 1.9 | $ | — | $ | 81.9 |
December 30, 2011 | |||||||||||||||
Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Municipal securities | $ | 42.8 | $ | 0.8 | $ | (0.1 | ) | $ | 43.5 | ||||||
Corporate bonds | 16.1 | 0.2 | — | 16.3 | |||||||||||
Asset backed bonds | 13.6 | 0.1 | — | 13.7 | |||||||||||
State government and agency securities | 4.5 | — | — | 4.5 | |||||||||||
United States Treasury securities | 1.0 | — | — | 1.0 | |||||||||||
$ | 78.0 | $ | 1.1 | $ | (0.1 | ) | $ | 79.0 |
September 28, 2012 | |||||||
Amortized Cost | Fair Value | ||||||
Due in one year or less | $ | 11.3 | $ | 11.4 | |||
Due after one year through five years | 40.1 | 41.1 | |||||
Due after five years through ten years | 28.6 | 29.4 | |||||
$ | 80.0 | $ | 81.9 |
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NOTE 4: | PROPERTY AND EQUIPMENT, NET |
September 28, 2012 | December 30, 2011 | ||||||
Buildings and land | $ | 26.0 | $ | 24.5 | |||
Computers and software | 88.2 | 80.5 | |||||
Cash dispensing machines | 4.2 | 4.5 | |||||
Furniture and equipment | 8.8 | 8.7 | |||||
Construction in progress | 6.7 | 3.6 | |||||
133.9 | 121.8 | ||||||
Less accumulated depreciation and amortization | (76.5 | ) | (65.6 | ) | |||
$ | 57.4 | $ | 56.2 |
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NOTE 5: | INTANGIBLE ASSETS |
September 28, 2012 | December 30, 2011 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Amortizable intangible assets (1): | |||||||||||||||||||||||
Customer relationships | $ | 19.1 | $ | (9.9 | ) | $ | 9.2 | $ | 19.1 | $ | (8.3 | ) | $ | 10.8 | |||||||||
Trade name/trademarks | 3.6 | (1.6 | ) | 2.0 | 3.3 | (1.3 | ) | 2.0 | |||||||||||||||
Non-compete agreements | 2.5 | (2.1 | ) | 0.4 | 2.5 | (1.7 | ) | 0.8 | |||||||||||||||
$ | 25.2 | $ | (13.6 | ) | $ | 11.6 | $ | 24.9 | $ | (11.3 | ) | $ | 13.6 | ||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||
Trade name/trademarks | $ | 5.8 | $ | — | $ | 5.8 | $ | 5.8 | $ | — | $ | 5.8 |
Remainder of 2012 | $ | 0.8 | |
2013 | 2.7 | ||
2014 | 2.7 | ||
2015 | 2.7 | ||
2016 | 2.3 | ||
2017 | 0.4 | ||
$ | 11.6 |
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NOTE 6: | WORKERS’ COMPENSATION INSURANCE AND RESERVES |
• | Changes in medical and time loss (“indemnity”) costs; |
• | Mix changes between medical only and indemnity claims; |
• | Regulatory and legislative developments that have increased benefits and settlement requirements; |
• | Type and location of work performed; |
• | The impact of safety initiatives; and, |
• | Positive or adverse development of claim reserves. |
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NOTE 7: | COMMITMENTS AND CONTINGENCIES |
Excess Liquidity: | Prime Rate Loans: | LIBOR Rate Loans: |
Greater than $40 million | 0.50% | 1.50% |
Between $20 million and $40 million | 0.75% | 1.75% |
Less than $20 million | 1.00% | 2.00% |
September 28, 2012 | December 30, 2011 | ||||||
Cash collateral held by insurance carriers | $ | 21.5 | $ | 21.3 | |||
Cash and cash equivalents held in Trust (1) | 21.7 | 19.2 | |||||
Investments held in Trust | 80.0 | 78.0 | |||||
Letters of credit (2) | 9.0 | 16.7 | |||||
Surety bonds (3) | 16.2 | 16.2 | |||||
Total collateral commitments | $ | 148.4 | $ | 151.4 |
(1) | Included in this amount is $0.8 million of accrued interest at both September 28, 2012 and December 30, 2011. |
(2) | We have agreements with certain financial institutions to issue letters of credit as collateral. We had $1.8 million and $5.9 million of restricted cash collateralizing our letters of credit at September 28, 2012 and December 30, 2011, respectively. |
(3) | Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which is determined by each independent surety carrier, but do not exceed 2.0% of the bond amount, subject to a minimum charge. The terms of these bonds are subject to review and renewal every one to four years and most bonds can be canceled by the sureties with as little as 60 days notice. |
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NOTE 8: | STOCK-BASED COMPENSATION |
Thirteen weeks ended | Thirty-nine weeks ended | ||||||||||||||
September 28, 2012 | September 30, 2011 | September 28, 2012 | September 30, 2011 | ||||||||||||
Restricted and unrestricted stock and performance share units expense | $ | 1.4 | $ | 1.3 | $ | 6.0 | $ | 5.1 | |||||||
Stock option expense | — | 0.1 | 0.1 | 0.3 | |||||||||||
ESPP expense | 0.1 | 0.1 | 0.2 | 0.2 | |||||||||||
Total stock-based compensation expense | $ | 1.5 | $ | 1.5 | $ | 6.3 | $ | 5.6 |
Thirty-nine weeks ended | ||||||
September 28, 2012 | ||||||
Shares | Price (1) | |||||
Non-vested at beginning of period | 1,266 | $ | 13.92 | |||
Granted | 614 | $ | 16.84 | |||
Vested | (362 | ) | $ | 13.81 | ||
Forfeited | (98 | ) | $ | 13.80 | ||
Non-vested at the end of the period | 1,420 | $ | 15.21 |
(1) | Weighted average market price on grant-date. |
Thirty-nine weeks ended | ||||||
September 28, 2012 | ||||||
Shares | Price (1) | |||||
Outstanding, December 31, 2011 | 1,110 | $ | 15.64 | |||
Granted | — | $ | — | |||
Exercised | (255 | ) | $ | 9.71 | ||
Expired/Forfeited | (153 | ) | $ | 18.04 | ||
Outstanding, September 28, 2012 | 702 | $ | 17.28 | |||
Exercisable, September 28, 2012 | 697 | $ | 17.33 | |||
Options expected to vest, September 28, 2012 | 5 | $ | 9.08 |
(1) | Weighted average exercise price. |
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NOTE 9: | STOCK REPURCHASES |
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NOTE 10: | INCOME TAXES |
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NOTE 11: | NET INCOME PER SHARE |
Thirteen weeks ended | Thirty-nine weeks ended | ||||||||||||||
September 28, 2012 | September 30, 2011 | September 28, 2012 | September 30, 2011 | ||||||||||||
Net income | $ | 14.3 | $ | 13.9 | $ | 26.2 | $ | 23.2 | |||||||
Weighted average number of common shares used in basic net income per common share | 39.5 | 41.6 | 39.5 | 42.8 | |||||||||||
Dilutive effect of outstanding stock options and non-vested restricted stock | 0.4 | 0.4 | 0.3 | 0.4 | |||||||||||
Weighted average number of common shares used in diluted net income per common share | 39.9 | 42.0 | 39.8 | 43.2 | |||||||||||
Net income per common share: | |||||||||||||||
Basic | $ | 0.36 | $ | 0.33 | $ | 0.66 | $ | 0.54 | |||||||
Diluted | $ | 0.36 | $ | 0.33 | $ | 0.66 | $ | 0.54 | |||||||
Anti-dilutive shares | 0.7 | 1.1 | 0.7 | 0.7 |
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NOTE 12: | SUPPLEMENTAL CASH FLOW INFORMATION |
Thirty-nine weeks ended | |||||||
September 28, 2012 | September 30, 2011 | ||||||
Cash paid during the period for: | |||||||
Interest | $ | 0.5 | $ | 0.7 | |||
Income taxes | $ | 13.8 | $ | 6.9 |
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NOTE 13: | SUBSEQUENT EVENTS |
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September 28, 2012 | December 30, 2011 | ||||||
Level 1: | |||||||
Cash equivalents (1) | $ | 86.3 | $ | 55.5 | |||
Restricted cash equivalents (1) | 26.6 | 31.2 | |||||
Restricted investments classified as held-to-maturity (2) | — | 1.0 | |||||
Other restricted investments (3) | 3.8 | 2.2 | |||||
Level 2: | |||||||
Restricted investments classified as held-to-maturity (4) | 81.9 | 78.0 |
(1) | Cash equivalents and restricted cash equivalents consist of money market funds, deposits and investments with original maturities of three months or less. |
(2) | Level 1 restricted investments classified as held-to-maturity consist of United States Treasury Securities. |
(3) | Level 1 other restricted investments consist of deferred compensation investments which are comprised of mutual funds. We have an equal and offsetting accrued liability related to the deferred compensation plan. |
(4) | Level 2 restricted investments classified as held-to-maturity consist of Municipal Securities, Corporate Securities, U.S. Agency Mortgages and U.S. Agency Debentures. |
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September 28, 2012 | December 30, 2011 | ||||||
Cash collateral held by insurance carriers | $ | 21.5 | $ | 21.3 | |||
Cash and cash equivalents held in Trust (1) | 21.7 | 19.2 | |||||
Investments held in Trust | 80.0 | 78.0 | |||||
Cash collateral backing letters of credit | 1.8 | 5.9 | |||||
Other (2) | 7.1 | 6.1 | |||||
Total restricted cash and investments | $ | 132.1 | $ | 130.5 |
(1) | Included in this amount is $0.8 million of accrued interest at both September 28, 2012 and December 30, 2011. |
(2) | Primarily consists of restricted cash in money market accounts and deferred compensation plan accounts which are comprised of mutual funds. |
September 28, 2012 | |||||||||||||||
Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Municipal securities | $ | 49.7 | $ | 1.2 | $ | — | $ | 50.9 | |||||||
Corporate bonds | 14.2 | 0.4 | — | 14.6 | |||||||||||
Asset backed bonds | 16.1 | 0.3 | — | 16.4 | |||||||||||
$ | 80.0 | $ | 1.9 | $ | — | $ | 81.9 |
December 30, 2011 | |||||||||||||||
Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Municipal securities | $ | 42.8 | $ | 0.8 | $ | (0.1 | ) | $ | 43.5 | ||||||
Corporate bonds | 16.1 | 0.2 | — | 16.3 | |||||||||||
Asset backed bonds | 13.6 | 0.1 | — | 13.7 | |||||||||||
State government and agency securities | 4.5 | — | — | 4.5 | |||||||||||
United States Treasury securities | 1.0 | — | — | 1.0 | |||||||||||
$ | 78.0 | $ | 1.1 | $ | (0.1 | ) | $ | 79.0 |
September 28, 2012 | |||||||
Amortized Cost | Fair Value | ||||||
Due in one year or less | $ | 11.3 | $ | 11.4 | |||
Due after one year through five years | 40.1 | 41.1 | |||||
Due after five years through ten years | 28.6 | 29.4 | |||||
$ | 80.0 | $ | 81.9 |
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September 28, 2012 | December 30, 2011 | ||||||
Buildings and land | $ | 26.0 | $ | 24.5 | |||
Computers and software | 88.2 | 80.5 | |||||
Cash dispensing machines | 4.2 | 4.5 | |||||
Furniture and equipment | 8.8 | 8.7 | |||||
Construction in progress | 6.7 | 3.6 | |||||
133.9 | 121.8 | ||||||
Less accumulated depreciation and amortization | (76.5 | ) | (65.6 | ) | |||
$ | 57.4 | $ | 56.2 |
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September 28, 2012 | December 30, 2011 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Amortizable intangible assets (1): | |||||||||||||||||||||||
Customer relationships | $ | 19.1 | $ | (9.9 | ) | $ | 9.2 | $ | 19.1 | $ | (8.3 | ) | $ | 10.8 | |||||||||
Trade name/trademarks | 3.6 | (1.6 | ) | 2.0 | 3.3 | (1.3 | ) | 2.0 | |||||||||||||||
Non-compete agreements | 2.5 | (2.1 | ) | 0.4 | 2.5 | (1.7 | ) | 0.8 | |||||||||||||||
$ | 25.2 | $ | (13.6 | ) | $ | 11.6 | $ | 24.9 | $ | (11.3 | ) | $ | 13.6 | ||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||
Trade name/trademarks | $ | 5.8 | $ | — | $ | 5.8 | $ | 5.8 | $ | — | $ | 5.8 |
Remainder of 2012 | $ | 0.8 | |
2013 | 2.7 | ||
2014 | 2.7 | ||
2015 | 2.7 | ||
2016 | 2.3 | ||
2017 | 0.4 | ||
$ | 11.6 |
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Excess Liquidity: | Prime Rate Loans: | LIBOR Rate Loans: |
Greater than $40 million | 0.50% | 1.50% |
Between $20 million and $40 million | 0.75% | 1.75% |
Less than $20 million | 1.00% | 2.00% |
September 28, 2012 | December 30, 2011 | ||||||
Cash collateral held by insurance carriers | $ | 21.5 | $ | 21.3 | |||
Cash and cash equivalents held in Trust (1) | 21.7 | 19.2 | |||||
Investments held in Trust | 80.0 | 78.0 | |||||
Letters of credit (2) | 9.0 | 16.7 | |||||
Surety bonds (3) | 16.2 | 16.2 | |||||
Total collateral commitments | $ | 148.4 | $ | 151.4 |
(1) | Included in this amount is $0.8 million of accrued interest at both September 28, 2012 and December 30, 2011. |
(2) | We have agreements with certain financial institutions to issue letters of credit as collateral. We had $1.8 million and $5.9 million of restricted cash collateralizing our letters of credit at September 28, 2012 and December 30, 2011, respectively. |
(3) | Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which is determined by each independent surety carrier, but do not exceed 2.0% of the bond amount, subject to a minimum charge. The terms of these bonds are subject to review and renewal every one to four years and most bonds can be canceled by the sureties with as little as 60 days notice. |
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Thirteen weeks ended | Thirty-nine weeks ended | ||||||||||||||
September 28, 2012 | September 30, 2011 | September 28, 2012 | September 30, 2011 | ||||||||||||
Restricted and unrestricted stock and performance share units expense | $ | 1.4 | $ | 1.3 | $ | 6.0 | $ | 5.1 | |||||||
Stock option expense | — | 0.1 | 0.1 | 0.3 | |||||||||||
ESPP expense | 0.1 | 0.1 | 0.2 | 0.2 | |||||||||||
Total stock-based compensation expense | $ | 1.5 | $ | 1.5 | $ | 6.3 | $ | 5.6 |
Thirty-nine weeks ended | ||||||
September 28, 2012 | ||||||
Shares | Price (1) | |||||
Non-vested at beginning of period | 1,266 | $ | 13.92 | |||
Granted | 614 | $ | 16.84 | |||
Vested | (362 | ) | $ | 13.81 | ||
Forfeited | (98 | ) | $ | 13.80 | ||
Non-vested at the end of the period | 1,420 | $ | 15.21 |
(1) | Weighted average market price on grant-date. |
Thirty-nine weeks ended | ||||||
September 28, 2012 | ||||||
Shares | Price (1) | |||||
Outstanding, December 31, 2011 | 1,110 | $ | 15.64 | |||
Granted | — | $ | — | |||
Exercised | (255 | ) | $ | 9.71 | ||
Expired/Forfeited | (153 | ) | $ | 18.04 | ||
Outstanding, September 28, 2012 | 702 | $ | 17.28 | |||
Exercisable, September 28, 2012 | 697 | $ | 17.33 | |||
Options expected to vest, September 28, 2012 | 5 | $ | 9.08 |
(1) | Weighted average exercise price. |
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Thirteen weeks ended | Thirty-nine weeks ended | ||||||||||||||
September 28, 2012 | September 30, 2011 | September 28, 2012 | September 30, 2011 | ||||||||||||
Net income | $ | 14.3 | $ | 13.9 | $ | 26.2 | $ | 23.2 | |||||||
Weighted average number of common shares used in basic net income per common share | 39.5 | 41.6 | 39.5 | 42.8 | |||||||||||
Dilutive effect of outstanding stock options and non-vested restricted stock | 0.4 | 0.4 | 0.3 | 0.4 | |||||||||||
Weighted average number of common shares used in diluted net income per common share | 39.9 | 42.0 | 39.8 | 43.2 | |||||||||||
Net income per common share: | |||||||||||||||
Basic | $ | 0.36 | $ | 0.33 | $ | 0.66 | $ | 0.54 | |||||||
Diluted | $ | 0.36 | $ | 0.33 | $ | 0.66 | $ | 0.54 | |||||||
Anti-dilutive shares | 0.7 | 1.1 | 0.7 | 0.7 |
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Thirty-nine weeks ended | |||||||
September 28, 2012 | September 30, 2011 | ||||||
Cash paid during the period for: | |||||||
Interest | $ | 0.5 | $ | 0.7 | |||
Income taxes | $ | 13.8 | $ | 6.9 |
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