TRUEBLUE, INC., 10-Q filed on 10/27/2014
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 26, 2014
Oct. 13, 2014
Entity Information [Line Items]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Sep. 26, 2014 
 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q3 
 
Trading Symbol
TBI 
 
Entity Registrant Name
TrueBlue, Inc. 
 
Entity Central Index Key
0000768899 
 
Current Fiscal Year End Date
--12-26 
 
Entity Well-Known Seasoned Issuer
Yes 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
42,515,269 
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Sep. 26, 2014
Dec. 27, 2013
Current assets:
 
 
Cash and cash equivalents
$ 29,244 
$ 122,003 
Marketable securities
1,746 
14,745 
Accounts receivable, net of allowance for doubtful accounts of $7,712 and $5,710
310,926 
199,519 
Prepaid expenses, deposits and other current assets
17,522 
9,491 
Income tax receivable
7,934 
3,060 
Deferred income taxes
10,173 
7,640 
Total current assets
377,545 
356,458 
Property and equipment, net
62,110 
54,473 
Restricted cash and investments
152,281 
154,558 
Deferred income taxes
0 
4,213 
Goodwill
232,293 
82,239 
Intangible assets, net
142,069 
31,505 
Other assets, net
34,429 
36,015 
Total assets
1,000,727 
719,461 
Current liabilities:
 
 
Accounts payable and other accrued expenses
47,697 
29,850 
Accrued wages and benefits
69,749 
39,094 
Current portion of workers' compensation claims reserve
57,739 
49,942 
Other current liabilities
2,773 
2,523 
Total current liabilities
177,958 
121,409 
Workers’ compensation claims reserve, less current portion
176,204 
164,887 
Long-term debt, less current portion
174,950 
29,656 
Deferred income taxes
19,321 
0 
Other long-term liabilities
12,328 
10,149 
Total liabilities
560,761 
326,101 
Commitments and contingencies
   
   
Shareholders’ equity:
 
 
Preferred stock, $0.131 par value, 20,000 shares authorized; No shares issued and outstanding
0 
0 
Common stock, no par value, 100,000 shares authorized; 41,505 and 41,085 shares issued and outstanding
1 
1 
Accumulated other comprehensive income
1,408 
2,033 
Retained earnings
438,557 
391,326 
Total shareholders’ equity
439,966 
393,360 
Total liabilities and shareholders’ equity
$ 1,000,727 
$ 719,461 
CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $)
In Thousands, except Share data, unless otherwise specified
Sep. 26, 2014
Dec. 27, 2013
Allowance for doubtful accounts
$ 7,712 
$ 5,710 
Preferred stock, par value (in dollars per share)
$ 0.131 
$ 0.131 
Preferred stock, shares authorized
20,000,000 
20,000,000 
Preferred stock, shares issued
0 
0 
Preferred stock, shares outstanding
0 
0 
Common stock, par value (in dollars per share)
$ 0 
$ 0 
Common stock, shares authorized
100,000,000 
100,000,000 
Common stock, shares issued
41,505,000 
41,085,000 
Common stock, shares outstanding
41,505,000 
41,085,000 
CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 26, 2014
Sep. 27, 2013
Sep. 26, 2014
Sep. 27, 2013
Revenue from services
$ 633,365 
$ 451,169 
$ 1,482,655 
$ 1,219,977 
Cost of services
473,766 
327,641 
1,103,914 
897,937 
Gross profit
159,599 
123,528 
378,741 
322,040 
Selling, general and administrative expenses
120,318 
90,767 
308,654 
268,538 
Depreciation and amortization
9,719 
4,771 
20,126 
15,133 
Income from operations
29,562 
27,990 
49,961 
38,369 
Interest expense
(1,140)
(350)
(1,725)
(919)
Interest and other income
731 
766 
2,110 
2,086 
Interest and other income (expense), net
(409)
416 
385 
1,167 
Income before tax expense
29,153 
28,406 
50,346 
39,536 
Income tax expense
8,243 
9,454 
11,696 
9,124 
Net income
20,910 
18,952 
38,650 
30,412 
Net income per common share:
 
 
 
 
Basic (in dollars per share)
$ 0.51 
$ 0.47 
$ 0.95 
$ 0.76 
Diluted (in dollars per share)
$ 0.51 
$ 0.47 
$ 0.94 
$ 0.75 
Weighted average shares outstanding:
 
 
 
 
Basic (in shares)
40,793 
40,330 
40,701 
40,085 
Diluted (in shares)
41,038 
40,670 
40,971 
40,395 
Other comprehensive income (loss):
 
 
 
 
Foreign currency translation adjustment, net of tax
(1,087)
109 
(997)
(439)
Unrealized gain (loss) on investments, net of tax
(81)
(30)
372 
(37)
Total other comprehensive income (loss), net of tax
(1,168)
79 
(625)1
(476)
Comprehensive income
$ 19,742 
$ 19,031 
$ 38,025 
$ 29,936 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 26, 2014
Sep. 27, 2013
Cash flows from operating activities:
 
 
Net income
$ 38,650 
$ 30,412 
Adjustments to reconcile net income to net cash from operating activities:
 
 
Depreciation and amortization
20,126 
15,133 
Provision for doubtful accounts
9,619 
8,785 
Stock-based compensation
8,902 
6,428 
Deferred income taxes
6,077 
(1,694)
Other operating activities
(148)
1,213 
Changes in operating assets and liabilities, net of acquisition:
 
 
Accounts receivable
(26,391)
(24,776)
Income taxes
(3,179)
6,580 
Other assets
(6,510)
(4,703)
Accounts payable and other accrued expenses
(1,687)
(6,728)
Accrued wages and benefits
11,373 
11,419 
Workers’ compensation claims reserve
532 
2,785 
Other liabilities
2,539 
423 
Net cash provided by operating activities
59,903 
45,277 
Cash flows from investing activities:
 
 
Capital expenditures
(10,213)
(10,350)
Acquisition of businesses, net of cash acquired
(307,972)
(54,872)
Purchases of marketable securities
(25,057)
(35,300)
Sales and maturities of marketable securities
43,917 
205 
Change in restricted cash and cash equivalents
10,020 
(1,338)
Purchases of restricted investments
(18,196)
(9,175)
Maturities of restricted investments
10,588 
13,337 
Net cash used in investing activities
(296,913)
(97,493)
Cash flows from financing activities:
 
 
Net proceeds from stock option exercises and employee stock purchase plans
1,673 
8,731 
Common stock repurchases for taxes upon vesting of restricted stock
(3,021)
(2,653)
Proceeds from long-term debt
186,994 
34,000 
Payments on debt and other liabilities
(41,700)
(8,115)
Other
1,242 
720 
Net cash provided by financing activities
145,188 
32,683 
Effect of exchange rates on cash
(937)
(435)
Net change in cash and cash equivalents
(92,759)
(19,968)
CASH AND CASH EQUIVALENTS, beginning of period
122,003 
129,513 
CASH AND CASH EQUIVALENTS, end of period
$ 29,244 
$ 109,545 
ACCOUNTING PRINCIPLES AND PRACTICES
ACCOUNTING PRINCIPLES AND PRACTICES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial statement preparation

The accompanying unaudited consolidated financial statements (“financial statements”) of TrueBlue, Inc. (the "Company", "we", "us", "our", and "TrueBlue") are prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures usually found in financial statements prepared in accordance with GAAP have been condensed or omitted. The financial statements reflect all adjustments which, in the opinion of management, are necessary to fairly state the financial statements for the interim periods presented. We follow the same accounting policies for preparing both quarterly and annual financial statements.

Effective June 30, 2014, we completed the acquisition of all of the outstanding equity interests of Staffing Solutions Holdings, Inc., ("Seaton") a Chicago-based corporation, for a cash purchase price of approximately $308.0 million, net of cash acquired. The Seaton acquisition expanded the scope of our services from specialized temporary blue-collar staffing services. Seaton provides high-volume permanent employee recruitment process outsourcing, outsourced workforce management, and management of outsourced labor service providers through its PeopleScout, hrX, and Staff Management | SMX service lines. Seaton's customers include a broad range of industries such as airline, financial services, retail, manufacturing, and transportation. Seaton's operations will continue to be managed and supported from Chicago.

The consolidated financial statements include the results of operations and cash flows of Seaton from the acquisition date to September 26, 2014 and not from any prior periods, except with respect to the Supplemental Unaudited Pro Forma Information included in Note 2: Acquisition.

These financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 27, 2013. The results of operations for the thirteen and thirty-nine weeks ended September 26, 2014 are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period.

Fiscal period end

Our fiscal period ends on the last Friday of the month. Seaton has a fiscal period end of the last Sunday of the month. Seaton’s results for the thirteen weeks ended September 28, 2014 have been combined with TrueBlue’s results for the thirteen weeks ended September 26, 2014.

Goodwill and intangible assets

We have historically evaluated our goodwill for impairment at the reporting unit level annually as of the last day of our fiscal third quarter or when indications of potential impairment exist. In the first quarter of 2014, we changed the date of our annual assessment of goodwill impairment to the first day of our fiscal second quarter of each year. This is a change in method of applying an accounting principle, which management believes is preferable because it better aligns the timing of the assessment with our planning and forecasting process and alleviates constraints on accounting resources during our annual reporting process. The change in the assessment date does not delay, accelerate, or avoid a potential impairment charge. Due to significant judgments and estimates utilized in our goodwill impairment analysis, management has determined that it is impracticable to objectively determine projected cash flows and related valuation estimates that would have been used as of the first day of the second quarter of each prior reporting period without the use of hindsight. As of the first day of our fiscal second quarter of 2014, we performed our annual assessment of goodwill impairment. Based on our assessment, all of our reporting units' fair values were significantly in excess of their carrying values. We consider a reporting unit’s fair value to be substantially in excess of its carrying value at 20% or greater. Accordingly, no impairment loss was required to be recognized.

Recently adopted accounting standards

Effective December 28, 2013, we adopted the accounting standard regarding the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The standard requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent when, for certain reasons, it is not available. The adoption of this standard did not have a material impact on our financial statements.

Effective December 28, 2013, we early adopted the accounting standard regarding reporting discontinued operations and disposals of components of an entity. Under the new guidance, only disposals representing a strategic shift in operations or that have a major effect on a company's operations and results of operations should be presented as discontinued operations. The standard amends the requirement for reporting discontinued operations and requires additional disclosures about disposals of individually material components that are not classified as discontinued operations. The standard is effective for fiscal year-ends beginning after December 15, 2014, however early adoption is permitted. The adoption of this standard did not have a material impact on our financial statements.

Recently issued accounting pronouncements

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2014-09 related to revenue recognition. This guidance sets forth a five-step revenue recognition model, which supersedes the prior revenue recognition guidance, as well as most industry-specific revenue recognition guidance that previously existed in GAAP. The underlying principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The ASU provides two methods of initial adoption: retrospective for all periods presented, or through a cumulative adjustment in the year of adoption. It is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods. Early adoption is not permitted. We have not yet determined which method of adoption will be applied and are currently evaluating the impact that this standard will have on our consolidated financial statements.
ACQUISITION ACQUISITION
ACQUISITION
ACQUISITION
We account for our business acquisitions using the purchase method of accounting. The fair value of the net assets acquired and the results of the acquired business are included in the financial statements from the acquisition date forward. We are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and results of operations during the reporting period. Estimates are used in accounting for, among other things, the fair value of acquired property and equipment, intangible assets, useful lives of property and equipment and amortizable lives for acquired intangible assets, as well as liabilities for workers' compensation and legal contingencies. Any excess of the purchase consideration over the identified fair value of the assets acquired and liabilities assumed is recognized as goodwill. All acquisition related costs are expensed as incurred and recorded in operating expenses. Additionally, we recognize liabilities for anticipated restructuring costs that will be necessary due to the elimination of excess capacity, redundant assets, or unnecessary functions and record them as operating expenses. We estimate the preliminary fair value of acquired assets and liabilities as of the date of acquisition based on information available at that time. The valuation of these tangible and identifiable intangible assets and liabilities is subject to further management review and may change between the preliminary allocation and the final allocation. Any changes to these estimates may have a material impact on our operating results or financial condition. The excess of the purchase price over the estimated fair values of the net assets acquired was recorded as goodwill and is not deductible for tax purposes.
Effective June 30, 2014, we completed the acquisition of all of the outstanding equity interests of Staffing Solutions Holdings, Inc., ("Seaton") a Chicago-based corporation, for a cash purchase price of approximately $308.0 million, net of cash acquired. The Seaton acquisition expanded the scope of our services from specialized temporary blue-collar staffing services. Seaton provides high-volume permanent employee recruitment process outsourcing, outsourced workforce management, and management of outsourced labor service providers through its PeopleScout, hrX, and Staff Management | SMX service lines. Seaton's customers include a broad range of industries such as airline, financial services, retail, manufacturing, and transportation. Seaton's operations will continue to be managed and supported from Chicago.

Effective June 30, 2014, we entered into a Second Amended and Restated Credit Agreement for a secured revolving credit facility of up to a maximum of $300.0 million, of which $187.0 million was used to fund a portion of the acquisition price. See Note 10: Debt, for details of our Second Amended and Restated credit facility.

We incurred acquisition and integration-related costs of $2.3 million and $4.3 million for the thirteen and thirty-nine weeks ended September 26, 2014, respectively. These costs are included in Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income and Cash flows from operating activities in the Consolidated Statements of Cash Flows. At September 26, 2014, we have a liability for incurred but not yet paid integration costs of $0.1 million included in Accounts payable and other accrued expenses in our Consolidated Balance Sheets.
Purchase price allocation
The estimated purchase price allocation is based on preliminary estimates of fair values, net of cash acquired, as of the acquisition date of June 30, 2014, as follows (in thousands):

Purchase Price Allocation
Accounts receivable (1)
$
94,635

Prepaid expenses, deposits and other current assets
6,348

Property and equipment
9,424

Other non-current assets
1,230

Intangible assets
118,200

  Total assets acquired
229,837

 
 
Accounts payable and other accrued expenses
37,247

Workers' compensation liability
18,584

Deferred tax liability
14,925

Other long-term liabilities
1,163

  Total liabilities assumed
71,919

 
 
Net identifiable assets acquired
157,918

Goodwill (2)
150,054

  Net assets acquired
$
307,972

(1)
The gross contractual amount of accounts receivable was $96.7 million of which $2.1 million was estimated to be uncollectible.
(2)
Goodwill is attributable to the acquired workforce, the expected synergies and future cash flows after the acquisition of Seaton.The goodwill is not deductible for tax purposes.

Intangible assets include identifiable intangible assets for customer relationships and trade name/trademarks. We estimated the fair value of the acquired identifiable intangible assets, which are subject to amortization using the income approach. The following table sets forth the components of identifiable intangible assets and their estimated useful lives as of June 30, 2014, (in thousands, except for weighted average estimated useful lives, in years):
 
Estimated Fair Value
 
Weighted Average Estimated Useful Lives in Years
Trade name/trademarks
$
10,500

 
Indefinite
Trade name/trademarks
300

 
4.0
Technologies
18,300

 
4.0
Customer relationships
89,100

 
10.6
Total intangible assets
$
118,200

 
 


The acquired assets and liabilities of Seaton are included in our Consolidated Balance Sheets as of September 26, 2014 and the results of its operations and cash flows are reported in our Consolidated Statements of Operations and Comprehensive Income and Consolidated Statements of Cash Flows for the period from June 30, 2014 to September 26, 2014.

The amount of revenues and income from operations of Seaton included in our Consolidated Statements of Operations and Comprehensive Income were $148.6 million and $2.1 million, respectively, for the thirteen weeks ended September 26, 2014. Income from operations includes depreciation and amortization of $4.6 million for acquired finite-lived intangible assets and developed technology pushed down to Seaton.

Unaudited pro forma financial information

The following table reflects the pro forma consolidated results of operations for the periods presented, as though the acquisition of Seaton had occurred as of the beginning of the period being reported on, after giving effect to related income taxes.

The unaudited pro forma financial information combines our results of operations with the unaudited financial information of Seaton used by Seaton management for internal reporting purposes. Seaton acquired hrX, an Australian based company, on January 31, 2014. The unaudited pro forma information of Seaton includes the results of operations for hrX as if it had been acquired at the beginning of the period being reported on. Any changes required by further procedures over the financial information of Seaton could be material. The unaudited pro forma financial information presented is for illustrative purposes only and is not indicative of the results of operations that would have been realized if the acquisition had been completed on the dates indicated, nor is it indicative of future operating results.

The unaudited pro forma consolidated results of operations includes differences in workers' compensation expense, interest expense on debt and amortization of debt issuance costs, amortization of developed technology and finite-lived intangible assets, and stock-based compensation. The unaudited pro forma consolidated results of operations do not include, among other items, the effects of potential losses in gross profit due to revenue attrition from combining the two companies, and differences in our operating costs structure and non-recurring costs of acquisition and integration related costs.

Unaudited pro forma financial data is presented below (in thousands, except per share data):
 
 
Thirteen weeks ended
 
Thirty-nine weeks ended
 
 
September 26,
2014
 
September 27,
2013
 
September 26,
2014
 
September 27,
2013
Revenue from services
 
$
633,365

 
$
588,399

 
$
1,929,537

 
$
1,605,933

Net income
 
22,314

 
18,952

 
40,871

 
29,744

Net income per common share - diluted
 
0.54

 
0.47

 
1.00

 
0.74

SEGMENT INFORMATION
SEGMENT INFORMATION
SEGMENT INFORMATION

We have historically operated as one reportable segment providing temporary blue-collar staffing services. We consider many factors including the nature of our services, customers served, and service delivery strategies in determining how to structure operating segments.

The Seaton acquisition expanded the scope of our services from specialized temporary staffing services to include specialized outsourcing solutions. Seaton provides high-volume permanent employee recruitment process outsourcing, outsourced workforce management, and management of outsourced labor service providers through its PeopleScout, hrX, and Staff Management | SMX service lines. Seaton's customers include a broad range of industries such as airline, financial services, retail, manufacturing, and transportation. Seaton's operations will continue to be managed and supported from Chicago. Results attributable to Seaton are being separately evaluated by management. We are in the process of integrating Seaton with our existing operations, therefore, for the quarter ended September 26, 2014, we are presenting our legacy TrueBlue reportable segment separately from the acquired Seaton results of operations.

Results from operations associated with legacy TrueBlue and acquired Seaton were as follows (in thousands):
 
Thirteen weeks ended
 
September 26, 2014
 
September 27, 2013
 
Legacy TrueBlue
 
Seaton
 
Total Company
 
Legacy TrueBlue
Revenue from services
$
484,729

 
$
148,636

 
$
633,365

 
$
451,169

 
 
 
 
 
 
 
 
Earnings before interest depreciation and amortization
$
32,593

 
$
6,688

 
39,281

 
32,761

Depreciation and amortization
 
 
 
 
9,719

 
4,771

Income from operations
 
 
 
 
29,562

 
27,990

Interest and other income (expense), net
 
 
 
 
(409
)
 
416

Income before tax expense
 
 
 
 
29,153

 
28,406

Income tax expense
 
 
 
 
8,243

 
9,454

Net income
 
 
 
 
$
20,910

 
$
18,952

FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT
Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We apply a fair value hierarchy that prioritizes the inputs used to measure fair value:
•
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 and mutual funds.
•
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 marketable securities, which may consist of certificates of deposit ("CDs"), variable-rate demand notes ("VRDNs"), commercial paper, and restricted investments, which consist of municipal debt securities, corporate debt securities, asset-backed securities, and U.S. agency debentures. Our investments consist of highly rated investment grade debt securities, which are rated A1/P1 or higher for short-term securities and A- or higher for long-term securities, by nationally recognized statistical rating organizations. 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 have no Level 3 assets or liabilities.
The carrying value of our accounts receivable, accounts payable and other accrued expenses, and accrued wages and benefits approximates fair value due to their short-term nature. We also hold certain restricted investments which collateralize workers' compensation programs and are classified as held-to-maturity and carried at amortized cost on our Consolidated Balance Sheets.
The following tables present the fair value and hierarchy for our financial assets (in thousands):
 
September 26, 2014
 
Carrying Value
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
Cash and cash equivalents (1)
$
29,244

 
$
29,244

 
$
29,244

 
$
—

 
$
—

Marketable securities classified as available-for-sale (2)
1,746

 
1,746

 
—

 
1,746

 
—

Restricted cash and cash equivalents (1)
50,313

 
50,313

 
50,313

 
—

 
—

Other restricted assets (3)
9,269

 
9,269

 
9,269

 
—

 
—

Restricted investments classified as held-to-maturity
92,699

 
93,751

 
—

 
93,751

 
—

 
December 27, 2013
 
Carrying Value
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
Cash and cash equivalents (1)
$
122,003

 
$
122,003

 
$
122,003

 
$
—

 
$
—

Marketable securities classified as available-for-sale (2)
20,650

 
20,650

 
—

 
20,650

 

Restricted cash and cash equivalents (1)
57,085

 
57,085

 
57,085

 
—

 
—

Other restricted assets (3)
10,795

 
10,795

 
10,795

 
—

 
—

Restricted investments classified as held-to-maturity
86,678

 
86,940

 
—

 
86,940

 
—


(1)
Cash equivalents and restricted cash equivalents consist of money market funds, deposits, and investments with original maturities of three months or less.
(2)
Marketable securities include CDs, VRDNs, and commercial paper, which are classified as available-for-sale. At September 26, 2014, all our marketable securities, which consist of CDs, had stated maturities of less than one year. At December 27, 2013, we had $6.0 million of CDs with maturities greater than one year, which are classified as Other assets on our Consolidated Balance Sheets. VRDNs with contractual maturities beyond one year are classified as short-term based on their highly liquid nature and because they represent the investment of cash that is available for current operations. Despite the long-term nature of their stated contractual maturities, we routinely buy and sell these securities and believe we have the ability to quickly sell them to the re-marketing agent at par value plus accrued interest in the event we decide to liquidate our investment in a particular VRDN.
(3)
Other restricted assets primarily consists of deferred compensation plan accounts, which are comprised of mutual funds.
MARKETABLE SECURITIES
MARKETABLE SECURITIES
MARKETABLE SECURITIES
The following tables present the amortized cost and fair value of our marketable securities, which are carried at fair value (in thousands):
 
September 26, 2014
 
December 27, 2013
 
Amortized Cost
 
Fair Value
 
Amortized Cost
 
Fair Value
Certificates of deposit (1)
$
1,750

 
$
1,746

 
$
10,000

 
$
9,900

Variable-rate demand notes
—

 
—

 
5,750

 
5,750

Commercial paper
—

 
—

 
5,000

 
5,000

 
$
1,750

 
$
1,746

 
$
20,750


$
20,650

(1)
As of September 26, 2014, all our certificate of deposits were due within one year.
Gross unrealized gains and loss were de minimis for the thirteen and thirty-nine weeks ended September 26, 2014 and September 27, 2013. Our marketable securities have not resulted in any other-than-temporary impairments as of September 26, 2014.
RESTRICTED CASH AND INVESTMENTS
RESTRICTED CASH AND INVESTMENTS
RESTRICTED CASH AND INVESTMENTS
Restricted cash and investments consist principally of collateral that has been provided or pledged to insurance carriers for workers' compensation and state workers' compensation programs. Our insurance carriers and certain state workers' compensation programs require us to collateralize a portion of our workers' compensation obligation. The collateral typically takes the form of cash and cash equivalents and highly rated investment grade securities, primarily in municipal debt securities, corporate debt securities, and asset-backed securities. The majority of our collateral obligations are held in a trust at the Bank of New York Mellon ("Trust"). Our investments have not resulted in any other-than-temporary impairments.
The following is a summary our Restricted cash and investments (in thousands):
 
September 26,
2014
 
December 27,
2013
Cash collateral held by insurance carriers
$
22,643

 
$
23,747

Cash and cash equivalents held in Trust (1)
25,806

 
31,474

Investments held in Trust
92,699

 
86,678

Cash collateral backing letters of credit
1,864

 
1,864

Other (2)
9,269

 
10,795

Total restricted cash and investments
$
152,281

 
$
154,558


(1)
Included in this amount is $0.9 million and $0.8 million of accrued interest at September 26, 2014 and December 27, 2013, respectively.
(2)
Primarily consists of deferred compensation plan accounts, which are comprised of mutual funds.
The following tables present fair value disclosures for our held-to-maturity investments, which are carried at amortized cost (in thousands):
 
September 26, 2014
 
Amortized Cost
 
Gross Unrealized Gain
 
Gross Unrealized Loss
 
Fair Value
Municipal debt securities
$
54,267

 
$
988

 
$
(86
)
 
$
55,169

Corporate debt securities
27,785

 
194

 
(145
)
 
27,834

Asset-backed securities
10,647

 
139

 
(38
)
 
10,748

 
$
92,699

 
$
1,321

 
$
(269
)
 
$
93,751

 
December 27, 2013
 
Amortized Cost
 
Gross Unrealized Gain
 
Gross Unrealized Loss
 
Fair Value
Municipal debt securities
$
54,133

 
$
722

 
$
(398
)
 
$
54,457

Corporate debt securities
19,694

 
180

 
(294
)
 
19,580

Asset-backed securities
12,851

 
141

 
(89
)
 
12,903

 
$
86,678

 
$
1,043

 
$
(781
)
 
$
86,940


The amortized cost and fair value by contractual maturity of our held-to-maturity investments are as follows (in thousands):
 
September 26, 2014
 
Amortized Cost
 
Fair Value
Due in one year or less
$
10,797

 
$
10,853

Due after one year through five years
41,358

 
41,874

Due after five years through ten years
40,544

 
41,024

 
$
92,699

 
$
93,751


Actual maturities may differ from contractual maturities because the issuers of certain debt securities have the right to call or prepay their obligations without penalty.
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET
Property and equipment are stated at cost and consist of the following (in thousands):
 
September 26,
2014
 
December 27,
2013
Buildings and land
$
28,377

 
$
27,008

Computers and software
111,114

 
101,852

Furniture and equipment
11,373

 
10,444

Construction in progress
7,821

 
2,869

 
158,685

 
142,173

Less accumulated depreciation and amortization
(96,575
)
 
(87,700
)
 
$
62,110

 
$
54,473


Capitalized software costs, net of accumulated amortization, were $29.5 million and $30.6 million as of September 26, 2014 and December 27, 2013, respectively, excluding amounts in Construction in progress. Construction in progress consists primarily of purchased and internally developed software.
Depreciation expense of property and equipment totaled $5.1 million and $3.6 million for the thirteen weeks ended September 26, 2014 and September 27, 2013, respectively. Depreciation expense of property and equipment totaled $12.5 million and $11.7 million for the thirty-nine weeks ended September 26, 2014 and September 27, 2013, respectively.
GOODWILL AND INTANGIBLE ASSETS
INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS
Goodwill

We are currently in the process of evaluating our reportable segments as a result of our acquisition of Seaton, effective June 30, 2014. Refer to Note 3: Segment Information, for further details. Therefore, we have summarized the carrying value of our goodwill by legacy TrueBlue and acquired Seaton as follows (in thousands):
 
Legacy TrueBlue
 
Seaton
 
Total Company
Balance at December 27, 2013
 
 
 
 
 
Goodwill before impairment
$
128,449

 
$
—

 
$
128,449

Accumulated impairment loss
(46,210
)
 
—

 
(46,210
)
Goodwill, net
82,239

 
—

 
82,239

 
 
 
 
 
 
Balance at September 26, 2014
 
 
 
 
 
Goodwill before impairment
128,449

 
150,054

 
278,503

Accumulated impairment loss
(46,210
)
 
—

 
(46,210
)
Goodwill, net
$
82,239

 
$
150,054

 
$
232,293

Intangible assets
The following table presents our purchased finite-lived intangible assets (in thousands):
 
September 26, 2014
 
December 27, 2013
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Finite-lived intangible assets (1):
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
$
125,040

 
$
(19,194
)
 
$
105,846

 
$
35,940

 
$
(13,942
)
 
$
21,998

Trade name/trademarks
4,572

 
(2,816
)
 
1,756

 
5,172

 
(2,708
)
 
2,464

Non-compete agreements
1,800

 
(727
)
 
1,073

 
1,800

 
(457
)
 
1,343

Technologies
18,300

 
(1,106
)
 
17,194

 
—

 
—

 
—

Total finite-lived intangible assets
$
149,712

 
$
(23,843
)
 
$
125,869

 
$
42,912

 
$
(17,107
)
 
$
25,805

(1)
Excludes assets that are fully amortized.

Intangible assets are amortized using the straight-line method over their estimated useful lives. Amortization of our finite-lived intangible assets was $4.6 million and $1.2 million for the thirteen weeks ended September 26, 2014 and September 27, 2013, respectively. Amortization of our finite-lived intangible assets was $7.6 million and $3.4 million for the thirty-nine weeks ended September 26, 2014 and September 27, 2013, respectively.

Finite-lived intangible assets include customer relationships, trade name/trademarks and technologies acquired of $89.1 million, $0.3 million and $18.3 million, respectively, based on our preliminary purchase price allocation, for our acquisition of Seaton. Refer to Note 2: Acquisition for additional information regarding this acquisition.
The following table provides the estimated future amortization of finite-lived intangible assets as of September 26, 2014 (in thousands):
Remainder of 2014
$
4,501

2015
17,702

2016
17,266

2017
15,237

2018
12,456

Thereafter
58,707

Total future amortization
$
125,869


We also held indefinite-lived trade name/trademarks of $16.2 million and $5.7 million as of September 26, 2014 and December 27, 2013, respectively. Indefinite-lived trade name/trademarks acquired in 2014 of $10.5 million are based on the preliminary purchase price allocation relating to our acquisition of Seaton.

We did not perform an interim impairment test of our goodwill and indefinite-lived intangible assets in the thirty-nine weeks ended September 26, 2014 as we noted no significant indicators of impairment as of September 26, 2014.
WORKERS' COMPENSATION INSURANCE AND RESERVES
WORKERS' COMPENSATION INSURANCE AND RESERVES
WORKERS’ COMPENSATION INSURANCE AND RESERVES
We provide workers’ compensation insurance for our temporary and permanent employees. The majority of our current workers’ compensation insurance policies cover claims for a particular event above a $2.0 million deductible limit, on a “per occurrence” basis. This results in our being substantially self-insured.
For workers’ compensation claims originating in Washington, North Dakota, Ohio, Wyoming, Canada, and Puerto Rico (our “monopolistic jurisdictions”), we pay workers’ compensation insurance premiums and obtain full coverage under government-administered programs (with the exception of our Labor Ready service line in the state of Ohio where we have a self-insured policy). Accordingly, because we are not the primary obligor, our financial statements do not reflect the liability for workers’ compensation claims in these monopolistic jurisdictions. Our workers’ compensation reserve is established using estimates of the future cost of claims and related expenses that have been reported but not settled, as well as those that have been incurred but not reported. Our workers’ compensation reserve for claims below the deductible limit is discounted to its estimated net present value using discount rates based on average returns of “risk-free” U.S. Treasury instruments available during the year in which the liability was incurred. The weighted average rate was 1.8% at September 26, 2014.
The table below presents a reconciliation of the undiscounted workers’ compensation claims reserve to the discounted workers' compensation reserve for the periods presented as follows (in thousands):
 
September 26,
2014
 
December 27,
2013
Undiscounted workers’ compensation reserve
$
252,016

 
$
234,453

Less discount on workers' compensation reserve
18,073

 
19,624

Workers' compensation reserve, net of discount
233,943

 
214,829

Less current portion
57,739

 
49,942

Long-term portion
$
176,204

 
$
164,887


Our workers’ compensation reserve includes estimated expenses related to claims above our self-insured limits (“excess claims”), and we record a corresponding receivable for the insurance coverage on excess claims based on the contractual policy agreements we have with insurance carriers. We discount this reserve and corresponding receivable to its estimated net present value using the discount rates based on average returns of “risk-free” U.S. Treasury instruments available during the year in which the liability was incurred. The claim payments are made and the corresponding reimbursements from our insurance carriers are received over an estimated weighted average period of approximately 15.5 years. The discounted workers’ compensation reserve for excess claims was $34.6 million and $34.1 million as of September 26, 2014 and December 27, 2013. The discounted receivables from insurance companies, net of valuation allowance, were $30.3 million and $28.4 million as of September 26, 2014 and December 27, 2013, respectively, and are included in Other assets, net on the accompanying Consolidated Balance Sheets.
Management evaluates the adequacy of the workers’ compensation reserves in conjunction with an independent quarterly actuarial assessment. Factors considered in establishing and adjusting these reserves include, among other things:
•
changes in medical and time loss (“indemnity”) costs;
•
changes in mix between medical only and indemnity claims;
•
regulatory and legislative developments impacting benefits and settlement requirements;
•
type and location of work performed;
•
impact of safety initiatives; and
•
positive or adverse development of claims.
Workers’ compensation expense consists primarily of changes in self-insurance reserves net of changes in discount, monopolistic jurisdictions’ premiums, insurance premiums, and other miscellaneous expenses. Workers’ compensation expense of $21.6 million and $16.7 million was recorded in Cost of services for the thirteen weeks ended September 26, 2014 and September 27, 2013, respectively. Workers’ compensation expense of $55.1 million and $46.4 million was recorded in Cost of services for the thirty-nine weeks ended September 26, 2014 and September 27, 2013, respectively.
DEBT (Notes)
Long-term Debt
LONG-TERM DEBT

The components of our borrowings were as follows (in thousands):
 
 
September 26, 2014
 
December 27, 2013
Secured revolving credit facility
 
$
146,995

 
$
—

Term loan
 
30,222

 
31,923

Total debt
 
177,217

 
31,923

Less: current portion
 
2,267

 
2,267

Long-term debt
 
$
174,950

 
$
29,656



Second amended and restated credit agreement

Effective June 30, 2014, we entered into a Second Amended and Restated Credit Agreement for a secured revolving credit facility of $300.0 million with Bank of America, N.A., Wells Fargo Bank, National Association, HSBC and PNC Capital Markets LLC (the "Amended Credit Facility") in connection with our acquisition of Seaton. The Amended Credit Facility, which matures June 30, 2019, amended and restated our previous credit facility, and replaced the Seaton credit facility.

The maximum amount we can borrow under the Amended Credit Facility is subject to certain borrowing limits. Specifically, we are limited to the sum of 90% of our eligible billed accounts receivable, plus 85% of our eligible unbilled accounts receivable limited to 15% of all our eligible receivables, plus the value of our Tacoma headquarters office building. The real estate lending limit is $17.4 million, and is reduced quarterly by $0.4 million beginning on October 1, 2014. As of September 26, 2014, the Tacoma headquarters office building liquidation value totaled $17.4 million. The borrowing limit is further reduced by the sum of a reserve in an amount equal to the payroll and payroll taxes for our temporary employees for one payroll cycle and other reserves, if deemed applicable. At September 26, 2014, $255.1 million was available under the Amended Credit Facility, $147.0 million was utilized as a draw on the facility and $20.8 million was utilized by outstanding standby letters of credit, leaving $87.3 million available for additional borrowings. The letters of credit collateralize a portion of our workers' compensation obligation.

The Amended Credit Facility requires that we maintain an excess liquidity of $37.5 million. Excess liquidity is an amount equal to the unused borrowing capacity under the Amended Credit Facility plus certain unrestricted cash, cash equivalents, and marketable securities. We are required to satisfy a fixed charge coverage ratio in the event we do not meet that requirement. The additional amount available to borrow at September 26, 2014 was $87.3 million and the amount of cash, cash equivalents and certain marketable securities under control agreements was $24.3 million for a total of $111.6 million, which is well in excess of the liquidity requirement. We are currently in compliance with all covenants related to the Amended Credit Facility.

Under the terms of the Amended Credit Facility, we pay a variable rate of interest on funds borrowed that is based on London Interbank Offered Rate (LIBOR) plus an applicable spread between 1.25% and 2.00%. Alternatively, at our option, we may pay interest based upon a base rate plus an applicable spread between 0.25% and 1.00%. The applicable spread is determined by certain liquidity to debt ratios. The base rate is the greater of the prime rate (as announced by Bank of America), the federal funds rate plus 0.50% or the one-month LIBOR rate plus 1.00%. Until October 1, 2014, the applicable spread on LIBOR was 1.75% and the applicable spread on the base rate was 0.75%. As of September 26, 2014, the interest rate was 2.00%.

A fee on unused borrowing capacity of 0.375% when utilization is less than 25%, or 0.25% when utilization is greater than or equal to 25%, is applied against the unused portion of the Amended Credit Facility. Letters of credit are priced at the margin in effect for LIBOR loans, plus a fronting fee of 0.125%.

Obligations under the Amended Credit Facility are secured by substantially all our domestic personal property and our headquarters located in Tacoma, Washington. The Amended Credit Facility has variable rate interest and approximates fair value as of September 26, 2014.
Term loan agreement
On February 4, 2013, we entered into an unsecured Term Loan Agreement (the “Loan”) with Synovus Bank in the principal amount of $34.0 million. The Loan has a five year maturity with fixed monthly principal payments, which total $2.3 million annually based on a loan amortization term of 15 years. Interest accrues at the one-month LIBOR index rate plus an applicable spread of 1.50%, which is paid in addition to the principal payments. At our discretion, we may elect to extend the term of the Loan by five consecutive one-year extensions. At September 26, 2014, the interest rate for the Loan was 1.7%.
At September 26, 2014, the remaining balance of the Loan was $30.2 million, of which $2.3 million is short-term and is included in Other current liabilities on our Consolidated Balance Sheets. The Loan has variable rate interest and approximates fair value as of September 26, 2014.
Our obligations under the Loan may be accelerated upon the occurrence of an event of default under the Loan, which includes customary events of default, as well as cross-defaults related to indebtedness under our Revolving Credit Facility and other Loan specific defaults. The Loan contains customary negative covenants applicable to the Company and its subsidiaries such as indebtedness, certain dispositions of property, the imposition of restrictions on payments under the Loan, and other Loan specific covenants. We are currently in compliance with all covenants related to the Loan.
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES
Workers’ compensation commitments
Our insurance carriers and certain state workers’ compensation programs require us to collateralize a portion of our workers’ compensation obligation, for which they become responsible should we become insolvent. The collateral typically takes the form of cash and cash equivalents, highly rated investment grade debt securities, letters of credit and/or surety bonds. On a regular basis these entities assess the amount of collateral they will require from us relative to our workers' compensation obligation. The majority of our collateral obligations are held in the Trust at the Bank of New York Mellon.
We have provided our insurance carriers and certain states with commitments in the form and amounts listed below (in thousands):
 
September 26,
2014
 
December 27,
2013
Cash collateral held by insurance carriers
$
22,643

 
$
23,747

Cash and cash equivalents held in Trust (1)
25,806

 
31,474

Investments held in Trust
92,699

 
86,678

Letters of credit (2)
22,573

 
7,867

Surety bonds (3)
15,742

 
16,099

Total collateral commitments
$
179,463

 
$
165,865


(1)
Included in this amount is $0.9 million and $0.8 million of accrued interest at September 26, 2014 and December 27, 2013, respectively.
(2)
We have agreements with certain financial institutions to issue letters of credit as collateral. We had $1.9 million of restricted cash collateralizing our letters of credit at September 26, 2014 and December 27, 2013, 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. These fees 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.
Legal contingencies and developments
We are involved in various proceedings arising in the normal course of conducting business. We believe the amounts provided in our financial statements are adequate in consideration of the probable and estimable liabilities. The resolution of those proceedings is not expected to have a material effect on our results of operations or financial condition.
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION
We record stock-based compensation expense for restricted and unrestricted stock awards, performance share units, stock options, and shares purchased under an employee stock purchase plan.

Our 2005 Long-Term Equity Incentive Plan, as amended and restated effective May 2013 ("Incentive Plan"), provides for the issuance or delivery of up to 7.95 million shares of our common stock over the full term of the Incentive Plan.

Restricted and unrestricted stock and performance share units
Under the Incentive Plan, restricted stock is granted to executive officers and key employees and vests annually over three or four years. Unrestricted stock granted to our board of directors vests immediately. Restricted and unrestricted stock-based compensation expense is calculated based on the grant-date market value. We recognize compensation expense on a straight-line basis over the vesting period, net of estimated forfeitures.

Performance share units have been granted to executive officers and certain key employees. Vesting of the performance share units is contingent upon the achievement of revenue and/or profitability growth goals at the end of each three year performance period. Each performance share unit is equivalent to one share of common stock. Compensation expense is calculated based on the grant-date market value of our stock and is recognized ratably over the performance period for the performance share units which are expected to vest. Our estimate of the performance units expected to vest is reviewed and adjusted as appropriate each quarter.
Restricted and unrestricted stock and performance share units activity for the thirty-nine weeks ended September 26, 2014 was as follows (shares in thousands):
 
Shares
 
Weighted- average grant-date price
Non-vested at beginning of period
1,544

 
$
16.66

Granted
515

 
$
26.11

Vested
(414
)
 
$
17.78

Forfeited
(39
)
 
$
18.58

Non-vested at the end of the period
1,606

 
$
19.35


As of September 26, 2014, total unrecognized stock-based compensation expense related to non-vested restricted stock was approximately $12.7 million, of which $11.1 million is estimated to be recognized over a weighted average period of 1.81 years. As of September 26, 2014, total unrecognized stock-based compensation expense related to performance share units, assuming achievement of maximum financial goals, was approximately $8.0 million, of which $4.5 million is estimated to be recognized over a weighted average period of 1.76 years.
Stock options
Our Incentive Plan provides for both nonqualified stock options and incentive stock options (collectively, “stock options”) for directors, officers, and certain employees. We issue new shares of common stock upon exercise of stock options. All of our stock options are vested and expire if not exercised within seven to ten years from the date of grant. Stock option activity was de minimis for the thirteen and thirty-nine weeks ended September 26, 2014.
Employee stock purchase plan

Our Employee Stock Purchase Plan (“ESPP”) reserves for purchase 1.0 million shares of common stock. The plan allows eligible employees to contribute up to 10% of their earnings toward the monthly purchase of the Company's common stock. The employee's purchase price is the lesser of 85% of the fair market value of shares on either the first day or the last day of each month. We consider our ESPP to be a component of our stock-based compensation and accordingly we recognize compensation expense over the requisite service period for stock purchases made under the plan. The requisite service period begins on the enrollment date and ends on the purchase date, the duration of which is one month.

During the thirty-nine weeks ended September 26, 2014 and September 27, 2013, participants purchased 45,000 and 54,000 shares from the plan, for cash proceeds of $1.0 million and $0.9 million, respectively.
Stock-based compensation expense
Total stock-based compensation expense was $3.9 million and $8.9 million for the thirteen and thirty-nine weeks ended September 26, 2014 and $1.8 million and $6.4 million for the thirteen and thirty-nine weeks ended September 27, 2013, respectively.
DEFINED CONTRIBUTION PLANS
DEFINED CONTRIBUTION PLANS
DEFINED CONTRIBUTION PLANS

We offer both qualified and nonqualified defined contribution plans to eligible employees. Participating employees may elect to defer and contribute a portion of their eligible compensation. The plans offer discretionary matching contributions. The liability for the nonqualified plan was $9.6 million and $6.6 million as of September 26, 2014 and December 27, 2013, respectively. The current and non-current portion of the deferred compensation liability is included in Other current liabilities and Other long-term liabilities, respectively, on the Consolidated Balance Sheets, and is largely offset by restricted investments recorded in Restricted cash and investments on the Consolidated Balance Sheets.
INCOME TAXES
INCOME TAXES
INCOME TAXES

Our tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, is subject to variation due to several factors, including variability in accurately predicting our pre-tax and taxable income and loss and the mix of jurisdictions to which they relate, audit developments, changes in law, regulations and administrative practices, and relative changes of expenses or losses for which tax benefits are not recognized. Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income. For example, the impact of discrete items, tax credits, and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower.

Our effective tax rate on earnings for the thirty-nine weeks ended September 26, 2014, was 23.2%. The principal difference between the statutory federal income tax rate of 35.0% and our effective income tax rate of 23.2%, results from the Work Opportunity Tax Credit ("WOTC") earned in 2014 for prior year hires. We generated substantially more prior year credits because more veterans with higher credits were certified than expected, our qualified workers worked longer generating more credits than expected, and many states processed a backlog of credit applications with higher than expected certification rates. These factors generated additional WOTC benefits of approximately $8 million, which were recognized as of September 26, 2014. This tax credit benefit decreased our effective tax rate on income for the thirty-nine weeks ended September 26, 2014 from our expected 2014 rate of 38.9% to 23.2%. WOTC expired in 2013 and has not been renewed by Congress for 2014 new hires. Other differences between the statutory federal income tax rate of 35.0% result from state and foreign income taxes and certain non-deductible expenses.

The effective tax rate of 23.1% on income for the thirty-nine weeks ended September 27, 2013, was due primarily to the retroactive restoration of the WOTC. The American Taxpayer Relief Act of 2012 ("the Act") was signed into law on January 2, 2013. The Act retroactively restored the WOTC. Because a change in tax law is accounted for in the period of enactment, the retroactive effect of the Act on our U.S. federal taxes for 2012 was recognized as of September 27, 2013. This tax credit benefit decreased our effective tax rate on income for the thirty-nine weeks ended September 27, 2013 from our expected 2013 rate of 33.6% to 23.1%.

As of September 26, 2014 and December 27, 2013, we had gross unrecognized tax benefits of $2.0 million recorded in accordance with current accounting guidance on uncertain tax positions.
NET INCOME PER SHARE
NET INCOME PER SHARE
NET INCOME PER SHARE
Diluted common shares were calculated as follows (in thousands, except per share amounts):
 
Thirteen weeks ended
 
Thirty-nine weeks ended
 
September 26, 2014

September 27, 2013
 
September 26, 2014
 
September 27, 2013
Net income
$
20,910

 
$
18,952

 
$
38,650

 
$
30,412

 
 
 
 
 
 
 
 
Weighted average number of common shares used in basic net income per common share
40,793

 
40,330

 
40,701

 
40,085

Dilutive effect of outstanding stock options and non-vested restricted stock
245

 
340

 
270

 
310

Weighted average number of common shares used in diluted net income per common share
41,038

 
40,670

 
40,971

 
40,395

   Net income per common share:
 
 
 
 
 
 
 
Basic
$
0.51

 
$
0.47

 
$
0.95

 
$
0.76

Diluted
$
0.51

 
$
0.47

 
$
0.94

 
$
0.75

 
 
 
 
 
 
 
 
Anti-dilutive shares
97

 
—

 
35

 
—


Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is calculated by dividing net income by the weighted average number of common shares and potential common shares outstanding during the period. Potential common shares include the dilutive effects of outstanding options, non-vested restricted stock, and performance share units, except where their inclusion would be anti-dilutive.
Anti-dilutive shares include unvested restricted stock, performance share units, and in-the-money options for which the sum of the assumed proceeds, including unrecognized compensation expense, exceeds the average stock price during the periods presented. Anti-dilutive shares associated with our stock options relate to those stock options with an exercise price higher than the average market value of our stock during the periods presented.
ACCUMULATED OTHER COMPREHENSIVE INCOME
ACCUMULATED OTHER COMPREHENSIVE INCOME
ACCUMULATED OTHER COMPREHENSIVE INCOME
Accumulated other comprehensive income is reflected as a net increase to shareholders’ equity. Changes in the balance of each component of accumulated other comprehensive income during the thirty-nine weeks ended September 26, 2014 were as follows (in thousands):
 
Foreign currency translation adjustment
 
Unrealized gain (loss) on marketable securities (1)
 
Total other comprehensive income, net of tax
Balance at beginning of period
$
2,129

 
$
(96
)
 
$
2,033

Current-period other comprehensive income (2)
(997
)
 
372

 
(625
)
Balance at end of period
$
1,132

 
$
276

 
$
1,408


(1)
Consists of deferred compensation plan accounts, which includes mutual funds and available-for-sale securities. Available-for-sale securities which give rise to gains and losses are limited to our investments in select certificates of deposit.
(2)
The tax impact of the components of other comprehensive income was immaterial.
SUPPLEMENTAL CASH FLOW INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosure of cash flow information (in thousands):
 
Thirty-nine weeks ended
 
September 26, 2014
 
September 27, 2013
Cash paid during the period for:
 
 
 
Interest
$
951

 
$
727

Income taxes
$
10,653

 
$
4,112


As of September 26, 2014 and September 27, 2013, we had acquired $1.0 million and $0.3 million of property, plant and equipment on account that was not yet paid. These are considered non-cash investing items.
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS

We evaluated events and transactions occurring after the balance sheet date through the date the financial statements were
issued, and noted no other events that were subject to recognition or disclosure.
ACCOUNTING PRINCIPLES AND PRACTICES (policies)
Financial Statement Preparation 
Financial statement preparation

The accompanying unaudited consolidated financial statements (“financial statements”) of TrueBlue, Inc. (the "Company", "we", "us", "our", and "TrueBlue") are prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures usually found in financial statements prepared in accordance with GAAP have been condensed or omitted. The financial statements reflect all adjustments which, in the opinion of management, are necessary to fairly state the financial statements for the interim periods presented. We follow the same accounting policies for preparing both quarterly and annual financial statements.

Effective June 30, 2014, we completed the acquisition of all of the outstanding equity interests of Staffing Solutions Holdings, Inc., ("Seaton") a Chicago-based corporation, for a cash purchase price of approximately $308.0 million, net of cash acquired. The Seaton acquisition expanded the scope of our services from specialized temporary blue-collar staffing services. Seaton provides high-volume permanent employee recruitment process outsourcing, outsourced workforce management, and management of outsourced labor service providers through its PeopleScout, hrX, and Staff Management | SMX service lines. Seaton's customers include a broad range of industries such as airline, financial services, retail, manufacturing, and transportation. Seaton's operations will continue to be managed and supported from Chicago.

The consolidated financial statements include the results of operations and cash flows of Seaton from the acquisition date to September 26, 2014 and not from any prior periods, except with respect to the Supplemental Unaudited Pro Forma Information included in Note 2: Acquisition.

These financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 27, 2013. The results of operations for the thirteen and thirty-nine weeks ended September 26, 2014 are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period.

Fiscal Period End 
Fiscal period end

Our fiscal period ends on the last Friday of the month. Seaton has a fiscal period end of the last Sunday of the month. Seaton’s results for the thirteen weeks ended September 28, 2014 have been combined with TrueBlue’s results for the thirteen weeks ended September 26, 2014.
Goodwill and intangible assets 
Goodwill and intangible assets

We have historically evaluated our goodwill for impairment at the reporting unit level annually as of the last day of our fiscal third quarter or when indications of potential impairment exist. In the first quarter of 2014, we changed the date of our annual assessment of goodwill impairment to the first day of our fiscal second quarter of each year. This is a change in method of applying an accounting principle, which management believes is preferable because it better aligns the timing of the assessment with our planning and forecasting process and alleviates constraints on accounting resources during our annual reporting process. The change in the assessment date does not delay, accelerate, or avoid a potential impairment charge. Due to significant judgments and estimates utilized in our goodwill impairment analysis, management has determined that it is impracticable to objectively determine projected cash flows and related valuation estimates that would have been used as of the first day of the second quarter of each prior reporting period without the use of hindsight. As of the first day of our fiscal second quarter of 2014, we performed our annual assessment of goodwill impairment. Based on our assessment, all of our reporting units' fair values were significantly in excess of their carrying values. We consider a reporting unit’s fair value to be substantially in excess of its carrying value at 20% or greater. Accordingly, no impairment loss was required to be recognized.
Recently Adopted Accounting Standards 
Recently adopted accounting standards

Effective December 28, 2013, we adopted the accounting standard regarding the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The standard requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent when, for certain reasons, it is not available. The adoption of this standard did not have a material impact on our financial statements.

Effective December 28, 2013, we early adopted the accounting standard regarding reporting discontinued operations and disposals of components of an entity. Under the new guidance, only disposals representing a strategic shift in operations or that have a major effect on a company's operations and results of operations should be presented as discontinued operations. The standard amends the requirement for reporting discontinued operations and requires additional disclosures about disposals of individually material components that are not classified as discontinued operations. The standard is effective for fiscal year-ends beginning after December 15, 2014, however early adoption is permitted. The adoption of this standard did not have a material impact on our financial statements.
Recently Issued Accounting Pronouncements 
Recently issued accounting pronouncements

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2014-09 related to revenue recognition. This guidance sets forth a five-step revenue recognition model, which supersedes the prior revenue recognition guidance, as well as most industry-specific revenue recognition guidance that previously existed in GAAP. The underlying principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The ASU provides two methods of initial adoption: retrospective for all periods presented, or through a cumulative adjustment in the year of adoption. It is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods. Early adoption is not permitted. We have not yet determined which method of adoption will be applied and are currently evaluating the impact that this standard will have on our consolidated financial statements.
ACQUISITION ACQUISITION (Policies)
Acquisition
We account for our business acquisitions using the purchase method of accounting. The fair value of the net assets acquired and the results of the acquired business are included in the financial statements from the acquisition date forward. We are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and results of operations during the reporting period. Estimates are used in accounting for, among other things, the fair value of acquired property and equipment, intangible assets, useful lives of property and equipment and amortizable lives for acquired intangible assets, as well as liabilities for workers' compensation and legal contingencies. Any excess of the purchase consideration over the identified fair value of the assets acquired and liabilities assumed is recognized as goodwill. All acquisition related costs are expensed as incurred and recorded in operating expenses. Additionally, we recognize liabilities for anticipated restructuring costs that will be necessary due to the elimination of excess capacity, redundant assets, or unnecessary functions and record them as operating expenses. We estimate the preliminary fair value of acquired assets and liabilities as of the date of acquisition based on information available at that time. The valuation of these tangible and identifiable intangible assets and liabilities is subject to further management review and may change between the preliminary allocation and the final allocation. Any changes to these estimates may have a material impact on our operating results or financial condition. The excess of the purchase price over the estimated fair values of the net assets acquired was recorded as goodwill and is not deductible for tax purposes.
FAIR VALUE MEASUREMENT Fair Value Measurement (Policies)
Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We apply a fair value hierarchy that prioritizes the inputs used to measure fair value:
•
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 and mutual funds.
•
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 marketable securities, which may consist of certificates of deposit ("CDs"), variable-rate demand notes ("VRDNs"), commercial paper, and restricted investments, which consist of municipal debt securities, corporate debt securities, asset-backed securities, and U.S. agency debentures. Our investments consist of highly rated investment grade debt securities, which are rated A1/P1 or higher for short-term securities and A- or higher for long-term securities, by nationally recognized statistical rating organizations. 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 have no Level 3 assets or liabilities.
The carrying value of our accounts receivable, accounts payable and other accrued expenses, and accrued wages and benefits approximates fair value due to their short-term nature. We also hold certain restricted investments which collateralize workers' compensation programs and are classified as held-to-maturity and carried at amortized cost on our Consolidated Balance Sheets.
ACQUISITION ACQUISITION (Tables)
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed 
The estimated purchase price allocation is based on preliminary estimates of fair values, net of cash acquired, as of the acquisition date of June 30, 2014, as follows (in thousands):

Purchase Price Allocation
Accounts receivable (1)
$
94,635

Prepaid expenses, deposits and other current assets
6,348

Property and equipment
9,424

Other non-current assets
1,230

Intangible assets
118,200

  Total assets acquired
229,837

 
 
Accounts payable and other accrued expenses
37,247

Workers' compensation liability
18,584

Deferred tax liability
14,925

Other long-term liabilities
1,163

  Total liabilities assumed
71,919

 
 
Net identifiable assets acquired
157,918

Goodwill (2)
150,054

  Net assets acquired
$
307,972

(1)
The gross contractual amount of accounts receivable was $96.7 million of which $2.1 million was estimated to be uncollectible.
(2)
Goodwill is attributable to the acquired workforce, the expected synergies and future cash flows after the acquisition of Seaton.The goodwill is not deductible for tax purposes.

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination 
The following table sets forth the components of identifiable intangible assets and their estimated useful lives as of June 30, 2014, (in thousands, except for weighted average estimated useful lives, in years):
 
Estimated Fair Value
 
Weighted Average Estimated Useful Lives in Years
Trade name/trademarks
$
10,500

 
Indefinite
Trade name/trademarks
300

 
4.0
Technologies
18,300

 
4.0
Customer relationships
89,100

 
10.6
Total intangible assets
$
118,200

 
 
Business Acquisition, Pro Forma Information 
Unaudited pro forma financial data is presented below (in thousands, except per share data):
 
 
Thirteen weeks ended
 
Thirty-nine weeks ended
 
 
September 26,
2014
 
September 27,
2013
 
September 26,
2014
 
September 27,
2013
Revenue from services
 
$
633,365

 
$
588,399

 
$
1,929,537

 
$
1,605,933

Net income
 
22,314

 
18,952

 
40,871

 
29,744

Net income per common share - diluted
 
0.54

 
0.47

 
1.00

 
0.74

SEGMENT INFORMATION (Tables)
Schedule of Results from Operations Associated with legacy TrueBlue and acquired Seaton
Results from operations associated with legacy TrueBlue and acquired Seaton were as follows (in thousands):
 
Thirteen weeks ended
 
September 26, 2014
 
September 27, 2013
 
Legacy TrueBlue
 
Seaton
 
Total Company
 
Legacy TrueBlue
Revenue from services
$
484,729

 
$
148,636

 
$
633,365

 
$
451,169

 
 
 
 
 
 
 
 
Earnings before interest depreciation and amortization
$
32,593

 
$
6,688

 
39,281

 
32,761

Depreciation and amortization
 
 
 
 
9,719

 
4,771

Income from operations
 
 
 
 
29,562

 
27,990

Interest and other income (expense), net
 
 
 
 
(409
)
 
416

Income before tax expense
 
 
 
 
29,153

 
28,406

Income tax expense
 
 
 
 
8,243

 
9,454

Net income
 
 
 
 
$
20,910

 
$
18,952

FAIR VALUE MEASUREMENT (Tables)
Schedule of fair value hierarchy for cash equivalents and restricted investments
The following tables present the fair value and hierarchy for our financial assets (in thousands):
 
September 26, 2014
 
Carrying Value
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
Cash and cash equivalents (1)
$
29,244

 
$
29,244

 
$
29,244

 
$
—

 
$
—

Marketable securities classified as available-for-sale (2)
1,746

 
1,746

 
—

 
1,746

 
—

Restricted cash and cash equivalents (1)
50,313

 
50,313

 
50,313

 
—

 
—

Other restricted assets (3)
9,269

 
9,269

 
9,269

 
—

 
—

Restricted investments classified as held-to-maturity
92,699

 
93,751

 
—

 
93,751

 
—

 
December 27, 2013
 
Carrying Value
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
Cash and cash equivalents (1)
$
122,003

 
$
122,003

 
$
122,003

 
$
—

 
$
—

Marketable securities classified as available-for-sale (2)
20,650

 
20,650

 
—

 
20,650

 

Restricted cash and cash equivalents (1)
57,085

 
57,085

 
57,085

 
—

 
—

Other restricted assets (3)
10,795

 
10,795

 
10,795

 
—

 
—

Restricted investments classified as held-to-maturity
86,678

 
86,940

 
—

 
86,940

 
—


(1)
Cash equivalents and restricted cash equivalents consist of money market funds, deposits, and investments with original maturities of three months or less.
(2)
Marketable securities include CDs, VRDNs, and commercial paper, which are classified as available-for-sale. At September 26, 2014, all our marketable securities, which consist of CDs, had stated maturities of less than one year. At December 27, 2013, we had $6.0 million of CDs with maturities greater than one year, which are classified as Other assets on our Consolidated Balance Sheets. VRDNs with contractual maturities beyond one year are classified as short-term based on their highly liquid nature and because they represent the investment of cash that is available for current operations. Despite the long-term nature of their stated contractual maturities, we routinely buy and sell these securities and believe we have the ability to quickly sell them to the re-marketing agent at par value plus accrued interest in the event we decide to liquidate our investment in a particular VRDN.
(3)
Other restricted assets primarily consists of deferred compensation plan accounts, which are comprised of mutual funds.
MARKETABLE SECURITIES (Tables)
Schedule of available-for-sale securities
The following tables present the amortized cost and fair value of our marketable securities, which are carried at fair value (in thousands):
 
September 26, 2014
 
December 27, 2013
 
Amortized Cost
 
Fair Value
 
Amortized Cost
 
Fair Value
Certificates of deposit (1)
$
1,750

 
$
1,746

 
$
10,000

 
$
9,900

Variable-rate demand notes
—

 
—

 
5,750

 
5,750

Commercial paper
—

 
—

 
5,000

 
5,000

 
$
1,750

 
$
1,746

 
$
20,750


$
20,650

(1)
As of September 26, 2014, all our certificate of deposits were due within one year.
RESTRICTED CASH AND INVESTMENTS (Tables)
Schedule of restricted cash and investments 
The following is a summary our Restricted cash and investments (in thousands):
 
September 26,
2014
 
December 27,
2013
Cash collateral held by insurance carriers
$
22,643

 
$
23,747

Cash and cash equivalents held in Trust (1)
25,806

 
31,474

Investments held in Trust
92,699

 
86,678

Cash collateral backing letters of credit
1,864

 
1,864

Other (2)
9,269

 
10,795

Total restricted cash and investments
$
152,281

 
$
154,558


(1)
Included in this amount is $0.9 million and $0.8 million of accrued interest at September 26, 2014 and December 27, 2013, respectively.
(2)
Primarily consists of deferred compensation plan accounts, which are comprised of mutual funds.
Schedule of held-to-maturity investments 
The following tables present fair value disclosures for our held-to-maturity investments, which are carried at amortized cost (in thousands):
 
September 26, 2014
 
Amortized Cost
 
Gross Unrealized Gain
 
Gross Unrealized Loss
 
Fair Value
Municipal debt securities
$
54,267

 
$
988

 
$
(86
)
 
$
55,169

Corporate debt securities
27,785

 
194

 
(145
)
 
27,834

Asset-backed securities
10,647

 
139

 
(38
)
 
10,748

 
$
92,699

 
$
1,321

 
$
(269
)
 
$
93,751

 
December 27, 2013
 
Amortized Cost
 
Gross Unrealized Gain
 
Gross Unrealized Loss
 
Fair Value
Municipal debt securities
$
54,133

 
$
722

 
$
(398
)
 
$
54,457

Corporate debt securities
19,694

 
180

 
(294
)
 
19,580

Asset-backed securities
12,851

 
141

 
(89
)
 
12,903

 
$
86,678

 
$
1,043

 
$
(781
)
 
$
86,940

Schedule of held-to-maturity investments by contractual maturity 
The amortized cost and fair value by contractual maturity of our held-to-maturity investments are as follows (in thousands):
 
September 26, 2014
 
Amortized Cost
 
Fair Value
Due in one year or less
$
10,797

 
$
10,853

Due after one year through five years
41,358

 
41,874

Due after five years through ten years
40,544

 
41,024

 
$
92,699

 
$
93,751

PROPERTY AND EQUIPMENT, NET (Tables)
Schedule of property and equipment
Property and equipment are stated at cost and consist of the following (in thousands):
 
September 26,
2014
 
December 27,
2013
Buildings and land
$
28,377

 
$
27,008

Computers and software
111,114

 
101,852

Furniture and equipment
11,373

 
10,444

Construction in progress
7,821

 
2,869

 
158,685

 
142,173

Less accumulated depreciation and amortization
(96,575
)
 
(87,700
)
 
$
62,110

 
$
54,473

GOODWILL AND INTANGIBLE ASSETS (Tables)
Schedule of Goodwill 
Therefore, we have summarized the carrying value of our goodwill by legacy TrueBlue and acquired Seaton as follows (in thousands):
 
Legacy TrueBlue
 
Seaton
 
Total Company
Balance at December 27, 2013
 
 
 
 
 
Goodwill before impairment
$
128,449

 
$
—

 
$
128,449

Accumulated impairment loss
(46,210
)
 
—

 
(46,210
)
Goodwill, net
82,239

 
—

 
82,239

 
 
 
 
 
 
Balance at September 26, 2014
 
 
 
 
 
Goodwill before impairment
128,449

 
150,054

 
278,503

Accumulated impairment loss
(46,210
)
 
—

 
(46,210
)
Goodwill, net
$
82,239

 
$
150,054

 
$
232,293

Schedule of finite-lived intangible assets 
The following table presents our purchased finite-lived intangible assets (in thousands):
 
September 26, 2014
 
December 27, 2013
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Finite-lived intangible assets (1):
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
$
125,040

 
$
(19,194
)
 
$
105,846

 
$
35,940

 
$
(13,942
)
 
$
21,998

Trade name/trademarks
4,572

 
(2,816
)
 
1,756

 
5,172

 
(2,708
)
 
2,464

Non-compete agreements
1,800

 
(727
)
 
1,073

 
1,800

 
(457
)
 
1,343

Technologies
18,300

 
(1,106
)
 
17,194

 
—

 
—

 
—

Total finite-lived intangible assets
$
149,712

 
$
(23,843
)
 
$
125,869

 
$
42,912

 
$
(17,107
)
 
$
25,805

(1)
Excludes assets that are fully amortized.

Schedule of estimated future amortization of definite-lived intangible assets 
The following table provides the estimated future amortization of finite-lived intangible assets as of September 26, 2014 (in thousands):
Remainder of 2014
$
4,501

2015
17,702

2016
17,266

2017
15,237

2018
12,456

Thereafter
58,707

Total future amortization
$
125,869

WORKERS' COMPENSATION INSURANCE AND RESERVES (Tables)
Reconciliation of workers' compensation claims reserve
The table below presents a reconciliation of the undiscounted workers’ compensation claims reserve to the discounted workers' compensation reserve for the periods presented as follows (in thousands):
 
September 26,
2014
 
December 27,
2013
Undiscounted workers’ compensation reserve
$
252,016

 
$
234,453

Less discount on workers' compensation reserve
18,073

 
19,624

Workers' compensation reserve, net of discount
233,943

 
214,829

Less current portion
57,739

 
49,942

Long-term portion
$
176,204

 
$
164,887

DEBT (Tables)
Schedule of Long-term Debt Instruments
The components of our borrowings were as follows (in thousands):
 
 
September 26, 2014
 
December 27, 2013
Secured revolving credit facility
 
$
146,995

 
$
—

Term loan
 
30,222

 
31,923

Total debt
 
177,217

 
31,923

Less: current portion
 
2,267

 
2,267

Long-term debt
 
$
174,950

 
$
29,656

COMMITMENTS AND CONTINGENCIES (Tables)
Schedule of workers’ compensation collateral commitments
We have provided our insurance carriers and certain states with commitments in the form and amounts listed below (in thousands):
 
September 26,
2014
 
December 27,
2013
Cash collateral held by insurance carriers
$
22,643

 
$
23,747

Cash and cash equivalents held in Trust (1)
25,806

 
31,474

Investments held in Trust
92,699

 
86,678

Letters of credit (2)
22,573

 
7,867

Surety bonds (3)
15,742

 
16,099

Total collateral commitments
$
179,463

 
$
165,865


(1)
Included in this amount is $0.9 million and $0.8 million of accrued interest at September 26, 2014 and December 27, 2013, respectively.
(2)
We have agreements with certain financial institutions to issue letters of credit as collateral. We had $1.9 million of restricted cash collateralizing our letters of credit at September 26, 2014 and December 27, 2013, 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. These fees 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.
STOCK-BASED COMPENSATION (Tables)
Schedule of restricted and unrestricted stock and performance share units activity
Restricted and unrestricted stock and performance share units activity for the thirty-nine weeks ended September 26, 2014 was as follows (shares in thousands):
 
Shares
 
Weighted- average grant-date price
Non-vested at beginning of period
1,544

 
$
16.66

Granted
515

 
$
26.11

Vested
(414
)
 
$
17.78

Forfeited
(39
)
 
$
18.58

Non-vested at the end of the period
1,606

 
$
19.35

NET INCOME PER SHARE (Tables)
Schedule of adjusted net income and diluted common shares
Diluted common shares were calculated as follows (in thousands, except per share amounts):
 
Thirteen weeks ended
 
Thirty-nine weeks ended
 
September 26, 2014

September 27, 2013
 
September 26, 2014
 
September 27, 2013
Net income
$
20,910

 
$
18,952

 
$
38,650

 
$
30,412

 
 
 
 
 
 
 
 
Weighted average number of common shares used in basic net income per common share
40,793

 
40,330

 
40,701

 
40,085

Dilutive effect of outstanding stock options and non-vested restricted stock
245

 
340

 
270

 
310

Weighted average number of common shares used in diluted net income per common share
41,038

 
40,670

 
40,971

 
40,395

   Net income per common share:
 
 
 
 
 
 
 
Basic
$
0.51

 
$
0.47

 
$
0.95

 
$
0.76

Diluted
$
0.51

 
$
0.47

 
$
0.94

 
$
0.75

 
 
 
 
 
 
 
 
Anti-dilutive shares
97

 
—

 
35

 
—

ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables)
Schedule of Comprehensive Income (Loss)
Changes in the balance of each component of accumulated other comprehensive income during the thirty-nine weeks ended September 26, 2014 were as follows (in thousands):
 
Foreign currency translation adjustment
 
Unrealized gain (loss) on marketable securities (1)
 
Total other comprehensive income, net of tax
Balance at beginning of period
$
2,129

 
$
(96
)
 
$
2,033

Current-period other comprehensive income (2)
(997
)
 
372

 
(625
)
Balance at end of period
$
1,132

 
$
276

 
$
1,408


(1)
Consists of deferred compensation plan accounts, which includes mutual funds and available-for-sale securities. Available-for-sale securities which give rise to gains and losses are limited to our investments in select certificates of deposit.
(2)
The tax impact of the components of other comprehensive income was immaterial.
SUPPLEMENTAL CASH FLOW INFORMATION (Tables)
Schedule of supplemental cash flow information
Supplemental disclosure of cash flow information (in thousands):
 
Thirty-nine weeks ended
 
September 26, 2014
 
September 27, 2013
Cash paid during the period for:
 
 
 
Interest
$
951

 
$
727

Income taxes
$
10,653

 
$
4,112

ACCOUNTING PRINCIPLES AND PRACTICES Financial statement preparation (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 26, 2014
Sep. 27, 2013
Accounting Policies [Abstract]
 
 
Payments to Acquire Businesses, Net of Cash Acquired
$ 307,972 
$ 54,872 
ACQUISITION ACQUISITION (Details) (USD $)
3 Months Ended 9 Months Ended 0 Months Ended 3 Months Ended 9 Months Ended
Sep. 26, 2014
Sep. 27, 2013
Sep. 26, 2014
Sep. 27, 2013
Sep. 26, 2014
Revolving Credit Facility [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Jun. 30, 2014
Staffing Solutions Holdings, Inc. (Seaton) [Member]
Sep. 26, 2014
Staffing Solutions Holdings, Inc. (Seaton) [Member]
Sep. 26, 2014
Staffing Solutions Holdings, Inc. (Seaton) [Member]
Jun. 30, 2014
Staffing Solutions Holdings, Inc. (Seaton) [Member]
Revolving Credit Facility [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
Revenue from services
$ 633,365,000 
$ 451,169,000 
$ 1,482,655,000 
$ 1,219,977,000 
 
 
 
 
 
Business Acquisition, Effective Date of Acquisition
 
 
 
 
 
Jun. 30, 2014 
 
 
 
Payments to Acquire Businesses, Net of Cash Acquired
 
 
307,972,000 
54,872,000 
 
308,000,000 
 
 
 
Line of Credit Facility, Maximum Borrowing Capacity
 
 
 
 
300,000,000 
 
 
 
 
Cash from credit facility used in business acquisition
 
 
 
 
 
 
 
 
187,000,000 
Acquisition-Related and integration Costs Associated with a Business Combination
 
 
 
 
 
 
2,300,000 
4,300,000 
 
Business Combination, Integration Related Costs Accrual
 
 
 
 
 
 
100,000 
100,000 
 
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual
 
 
 
 
 
 
148,600,000 
 
 
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual
 
 
 
 
 
 
2,100,000 
 
 
BUSINESS COMBINATION, DEPRECIATION AND AMORTIZATION OF ACQUIRED COMPANY INCLUDED
 
 
 
 
 
 
$ 4,600,000 
 
 
ACQUISITION PURCHASE PRICE ALLOCATION (Details) (USD $)
Sep. 26, 2014
Dec. 27, 2013
Jun. 30, 2014
Staffing Solutions Holdings, Inc. (Seaton) [Member]
Business Acquisition [Line Items]
 
 
 
Accounts receivable
 
 
$ 94,635,000 1
Prepaid expenses, deposits and other current assets
 
 
6,348,000 
Property and equipment
 
 
9,424,000 
Other non-current assets
 
 
1,230,000 
Intangible assets
 
 
118,200,000 
Total assets acquired
 
 
229,837,000 
Accounts payable and other accrued expenses
 
 
37,247,000 
Workers' compensation liability
 
 
18,584,000 
Deferred tax liability
 
 
14,925,000 
Other long-term liabilities
 
 
1,163,000 
Total liabilities assumed
 
 
71,919,000 
Net identifiable assets acquired
 
 
157,918,000 
Goodwill
232,293,000 
82,239,000 
150,054,000 2
Net assets acquired
 
 
307,972,000 
Gross contractual amount of accounts receivable
 
 
96,700,000 
Estimated uncollectible accounts receivable
 
 
$ 2,100,000 
ACQUISITION COMPONENTS OF ACQUIRED FINITE AND INDEFINITE LIVED INTANGIBLE ASSETS (Details) (Staffing Solutions Holdings, Inc. (Seaton) [Member], USD $)
In Thousands, unless otherwise specified
0 Months Ended
Jun. 30, 2014
Business Acquisition [Line Items]
 
Total intangible assets
$ 118,200 
Customer relationships
 
Business Acquisition [Line Items]
 
Customer relationships & Trade name/trademarks
89,100 
Weighted Average Life
10 years 7 months 
Trademarks and Trade Names [Member]
 
Business Acquisition [Line Items]
 
Customer relationships & Trade name/trademarks
300 
Weighted Average Life
4 years 
Technology-Based Intangible Assets [Member]
 
Business Acquisition [Line Items]
 
Customer relationships & Trade name/trademarks
18,300 
Weighted Average Life
4 years 
Trademarks and Trade Names [Member]
 
Business Acquisition [Line Items]
 
Trade name/trademarks
$ 10,500 
ACQUISITION PRO FORMA FINANCIALS (Details) (Staffing Solutions Holdings, Inc. (Seaton) [Member], USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 26, 2014
Sep. 27, 2013
Sep. 26, 2014
Sep. 27, 2013
Staffing Solutions Holdings, Inc. (Seaton) [Member]
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
Revenue from services
$ 633,365 
$ 588,399 
$ 1,929,537 
$ 1,605,933 
Net income
$ 22,314 
$ 18,952 
$ 40,871 
$ 29,744 
Net income per common share - diluted
$ 0.54 
$ 0.47 
$ 1.00 
$ 0.74 
SEGMENT INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 26, 2014
Sep. 27, 2013
Sep. 26, 2014
Sep. 27, 2013
Segment Reporting Information [Line Items]
 
 
 
 
Revenue from services
$ 633,365 
$ 451,169 
$ 1,482,655 
$ 1,219,977 
Earnings before interest depreciation and amortization
39,281 
 
 
 
Depreciation and amortization
9,719 
4,771 
20,126 
15,133 
Income from operations
29,562 
27,990 
49,961 
38,369 
Interest and other income (expense), net
(409)
416 
385 
1,167 
Income before tax expense
29,153 
28,406 
50,346 
39,536 
Income tax expense
8,243 
9,454 
11,696 
9,124 
Net income
20,910 
18,952 
38,650 
30,412 
Legacy TrueBlue [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue from services
484,729 
451,169 
 
 
Earnings before interest depreciation and amortization
32,593 
32,761 
 
 
Depreciation and amortization
 
4,771 
 
 
Income from operations
 
27,990 
 
 
Interest and other income (expense), net
 
416 
 
 
Income before tax expense
 
28,406 
 
 
Income tax expense
 
9,454 
 
 
Net income
 
18,952 
 
 
Staffing Solutions Holdings, Inc. (Seaton) [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue from services
148,636 
 
 
 
Earnings before interest depreciation and amortization
$ 6,688 
 
 
 
FAIR VALUE MEASUREMENT (Details) (USD $)
Sep. 26, 2014
Dec. 27, 2013
Fair Value Measurement [Line Items]
 
 
Marketable securities classified as available-for-sale
$ 1,746,000 
$ 20,650,000 
Restricted investments classified as held-to-maturity
93,751,000 
86,940,000 
Certificates of deposit (1)
 
 
Fair Value Measurement [Line Items]
 
 
Marketable securities classified as available-for-sale
1,746,000 1
9,900,000 1
Certificates of deposit (1) |
Other assets
 
 
Fair Value Measurement [Line Items]
 
 
Marketable securities classified as available-for-sale securities due after one year
 
6,000,000 
Carrying Value
 
 
Fair Value Measurement [Line Items]
 
 
Cash and cash equivalents
29,244,000 2
122,003,000 2
Marketable securities classified as available-for-sale
1,746,000 3
20,650,000 3
Carrying Value |
Restricted Assets
 
 
Fair Value Measurement [Line Items]
 
 
Restricted cash and cash equivalents
50,313,000 2
57,085,000 2
Other restricted assets
9,269,000 4
10,795,000 4
Restricted investments classified as held-to-maturity
92,699,000 
86,678,000 
Total Fair Value
 
 
Fair Value Measurement [Line Items]
 
 
Cash and cash equivalents
29,244,000 2
122,003,000 2
Marketable securities classified as available-for-sale
1,746,000 3
20,650,000 3
Total Fair Value |
Restricted Assets
 
 
Fair Value Measurement [Line Items]
 
 
Restricted cash and cash equivalents
50,313,000 2
57,085,000 2
Other restricted assets
9,269,000 4
10,795,000 4
Restricted investments classified as held-to-maturity
93,751,000 
86,940,000 
Level 1
 
 
Fair Value Measurement [Line Items]
 
 
Cash and cash equivalents
29,244,000 2
122,003,000 2
Marketable securities classified as available-for-sale
0 3
0 3
Level 1 |
Restricted Assets
 
 
Fair Value Measurement [Line Items]
 
 
Restricted cash and cash equivalents
50,313,000 2
57,085,000 2
Other restricted assets
9,269,000 4
10,795,000 4
Restricted investments classified as held-to-maturity
0 
0 
Level 2
 
 
Fair Value Measurement [Line Items]
 
 
Cash and cash equivalents
0 2
0 2
Marketable securities classified as available-for-sale
1,746,000 3
 
Level 2 |
Restricted Assets
 
 
Fair Value Measurement [Line Items]
 
 
Restricted cash and cash equivalents
0 2
0 2
Other restricted assets
0 4
0 4
Restricted investments classified as held-to-maturity
 
86,940,000 
Level 3
 
 
Fair Value Measurement [Line Items]
 
 
Cash and cash equivalents
0 2
0 2
Marketable securities classified as available-for-sale
0 3
   3
Level 3 |
Restricted Assets
 
 
Fair Value Measurement [Line Items]
 
 
Restricted cash and cash equivalents
0 2
0 2
Other restricted assets
0 4
0 4
Restricted investments classified as held-to-maturity
$ 0 
$ 0 
[3] Marketable securities include CDs, VRDNs, and commercial paper, which are classified as available-for-sale. At September 26, 2014, all our marketable securities, which consist of CDs, had stated maturities of less than one year. At December 27, 2013, we had $6.0 million of CDs with maturities greater than one year, which are classified as Other assets on our Consolidated Balance Sheets. VRDNs with contractual maturities beyond one year are classified as short-term based on their highly liquid nature and because they represent the investment of cash that is available for current operations. Despite the long-term nature of their stated contractual maturities, we routinely buy and sell these securities and believe we have the ability to quickly sell them to the re-marketing agent at par value plus accrued interest in the event we decide to liquidate our investment in a particular VRDN.
MARKETABLE SECURITIES - Available-for-sale Securities (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 26, 2014
Dec. 27, 2013
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
$ 1,750 
$ 20,750 1
Fair Value
1,746 
20,650 
Certificates of deposit (1)
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
1,750 1
10,000 1
Fair Value
1,746 1
9,900 1
Variable-rate demand notes
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
0 
5,750 
Fair Value
0 
5,750 
Commercial paper
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
0 
5,000 
Fair Value
$ 0 
$ 5,000 
RESTRICTED CASH AND INVESTMENTS (Details) (USD $)
Sep. 26, 2014
Dec. 27, 2013
Restricted Cash and Investments [Line Items]
 
 
Cash collateral held by insurance carriers
$ 22,643,000 
$ 23,747,000 
Cash and cash equivalents held in Trust
25,806,000 1
31,474,000 1
Investments held in Trust
92,699,000 
86,678,000 
Cash collateral backing letters of credit
1,864,000 
1,864,000 
Other
9,269,000 2
10,795,000 2
Restricted cash and investments
152,281,000 
154,558,000 
Accrued interest on trust investments
900,000 
800,000 
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract]
 
 
Amortized Cost
92,699,000 
86,678,000 
Gross Unrealized Gain
1,321,000 
1,043,000 
Gross Unrealized Loss
(269,000)
(781,000)
Fair Value
93,751,000 
86,940,000 
Held-to-maturity Securities, Investment Maturities, Amortized Cost [Abstract]
 
 
Amortized Cost
92,699,000 
86,678,000 
Held-to-maturity Securities, Investment Maturities, Fair Value [Abstract]
 
 
Fair Value
93,751,000 
86,940,000 
Municipal debt securities
 
 
Restricted Cash and Investments [Line Items]
 
 
Investments held in Trust
54,267,000 
54,133,000 
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract]
 
 
Amortized Cost
54,267,000 
54,133,000 
Gross Unrealized Gain
988,000 
722,000 
Gross Unrealized Loss
(86,000)
(398,000)
Fair Value
55,169,000 
54,457,000 
Held-to-maturity Securities, Investment Maturities, Amortized Cost [Abstract]
 
 
Amortized Cost
54,267,000 
54,133,000 
Held-to-maturity Securities, Investment Maturities, Fair Value [Abstract]
 
 
Fair Value
55,169,000 
54,457,000 
Corporate debt securities
 
 
Restricted Cash and Investments [Line Items]
 
 
Investments held in Trust
27,785,000 
19,694,000 
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract]
 
 
Amortized Cost
27,785,000 
19,694,000 
Gross Unrealized Gain
194,000 
180,000 
Gross Unrealized Loss
(145,000)
(294,000)
Fair Value
27,834,000 
19,580,000 
Held-to-maturity Securities, Investment Maturities, Amortized Cost [Abstract]
 
 
Amortized Cost
27,785,000 
19,694,000 
Held-to-maturity Securities, Investment Maturities, Fair Value [Abstract]
 
 
Fair Value
27,834,000 
19,580,000 
Asset-backed securities
 
 
Restricted Cash and Investments [Line Items]
 
 
Investments held in Trust
10,647,000 
12,851,000 
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract]
 
 
Amortized Cost
10,647,000 
12,851,000 
Gross Unrealized Gain
139,000 
141,000 
Gross Unrealized Loss
(38,000)
(89,000)
Fair Value
10,748,000 
12,903,000 
Held-to-maturity Securities, Investment Maturities, Amortized Cost [Abstract]
 
 
Amortized Cost
10,647,000 
12,851,000 
Held-to-maturity Securities, Investment Maturities, Fair Value [Abstract]
 
 
Fair Value
10,748,000 
12,903,000 
Restricted Cash and Investments
 
 
Restricted Cash and Investments [Line Items]
 
 
Investments held in Trust
92,699,000 
 
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract]
 
 
Amortized Cost
92,699,000 
 
Fair Value
93,751,000 
 
Held-to-maturity Securities, Investment Maturities, Amortized Cost [Abstract]
 
 
Due in one year or less
10,797,000 
 
Due after one year through five years
41,358,000 
 
Due after five years through ten years
40,544,000 
 
Amortized Cost
92,699,000 
 
Held-to-maturity Securities, Investment Maturities, Fair Value [Abstract]
 
 
Due in one year or less
10,853,000 
 
Due after one year through five years
41,874,000 
 
Due after five years through ten years
41,024,000 
 
Fair Value
$ 93,751,000 
 
PROPERTY AND EQUIPMENT, NET (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 26, 2014
Dec. 27, 2013
Property and Equipment, Net, by Type [Abstract]
 
 
Property and equipment, gross
$ 158,685 
$ 142,173 
Less accumulated depreciation and amortization
(96,575)
(87,700)
Property and equipment, net
62,110 
54,473 
Buildings and land
 
 
Property and Equipment, Net, by Type [Abstract]
 
 
Property and equipment, gross
28,377 
27,008 
Computers and software
 
 
Property and Equipment, Net, by Type [Abstract]
 
 
Property and equipment, gross
111,114 
101,852 
Furniture and equipment
 
 
Property and Equipment, Net, by Type [Abstract]
 
 
Property and equipment, gross
11,373 
10,444 
Construction in progress
 
 
Property and Equipment, Net, by Type [Abstract]
 
 
Property and equipment, gross
$ 7,821 
$ 2,869 
PROPERTY AND EQUIPMENT, NET (NARRATIVE) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 26, 2014
Sep. 27, 2013
Sep. 26, 2014
Sep. 27, 2013
Dec. 27, 2013
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Capitalized Computer Software, Net
$ 29.5 
 
$ 29.5 
 
$ 30.6 
Depreciation, Nonproduction
$ 5.1 
$ 3.6 
$ 12.5 
$ 11.7 
 
- Changes in Carrying Amount of Goodwill (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 26, 2014
Dec. 27, 2013
Goodwill [Line Items]
 
 
Goodwill before impairment
$ 278,503 
$ 128,449 
Accumulated impairment loss
(46,210)
(46,210)
Goodwill, net
232,293 
82,239 
Legacy TrueBlue [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill before impairment
128,449 
128,449 
Accumulated impairment loss
(46,210)
(46,210)
Goodwill, net
82,239 
82,239 
Staffing Solutions Holdings, Inc. (Seaton) [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill before impairment
150,054 
0 
Accumulated impairment loss
0 
0 
Goodwill, net
$ 150,054 
$ 0 
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets Other Than Goodwill (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 26, 2014
Dec. 27, 2013
Amortizable intangible assets (1):
 
 
Gross Carrying Amount
$ 149,712 1
$ 42,912 1
Accumulated Amortization
(23,843)1
(17,107)1
Net Carrying Amount
125,869 1
25,805 1
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
Remainder of 2014
4,501 
 
2015
17,702 
 
2016
17,266 
 
2017
15,237 
 
2018
12,456 
 
Thereafter
58,707 
 
Net Carrying Amount
125,869 1
25,805 1
Customer relationships
 
 
Amortizable intangible assets (1):
 
 
Gross Carrying Amount
125,040 1
35,940 1
Accumulated Amortization
(19,194)1
(13,942)1
Net Carrying Amount
105,846 1
21,998 1
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
Net Carrying Amount
105,846 1
21,998 1
Trade name/trademarks
 
 
Amortizable intangible assets (1):
 
 
Gross Carrying Amount
4,572 1
5,172 1
Accumulated Amortization
(2,816)1
(2,708)1
Net Carrying Amount
1,756 1
2,464 1
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
Net Carrying Amount
1,756 1
2,464 1
Non-compete agreements
 
 
Amortizable intangible assets (1):
 
 
Gross Carrying Amount
1,800 1
1,800 1
Accumulated Amortization
(727)1
(457)1
Net Carrying Amount
1,073 1
1,343 1
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
Net Carrying Amount
1,073 1
1,343 1
Technology-Based Intangible Assets [Member]
 
 
Amortizable intangible assets (1):
 
 
Gross Carrying Amount
18,300 1
0 1
Accumulated Amortization
(1,106)1
0 1
Net Carrying Amount
17,194 1
0 1
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
Net Carrying Amount
$ 17,194 1
$ 0 1
GOODWILL AND INTANGIBLE ASSETS - Narrative Finite Intangibles (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 26, 2014
Sep. 27, 2013
Sep. 26, 2014
Sep. 27, 2013
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Amortization of intangible assets
$ 4.6 
$ 1.2 
$ 7.6 
$ 3.4 
GOODWILL AND INTANGIBLE ASSETS - Narrative Indefinite-lived Intangible Assets (Details) (Trademarks and Trade Names [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended
Sep. 26, 2014
Dec. 27, 2013
Trademarks and Trade Names [Member]
 
 
Indefinite-lived Intangible Assets [Line Items]
 
 
Indefinite-lived trade name/trademarks
$ 16.2 
$ 5.7 
Indefinite-lived Intangible Assets Acquired
$ 10.5 
 
WORKERS' COMPENSATION INSURANCE AND RESERVES - Reconciliation of Workers' Compensation Claims Reserve (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 26, 2014
Dec. 27, 2013
Workers' Compensation Deductible Limit [Line Items]
 
 
Undiscounted workers’ compensation reserve
$ 252,016 
$ 234,453 
Less discount on workers' compensation reserve
18,073 
19,624 
Workers' compensation reserve, net of discount
233,943 
214,829 
Less current portion
57,739 
49,942 
Long-term portion
$ 176,204 
$ 164,887 
WORKERS' COMPENSATION INSURANCE AND RESERVES - Narrative (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 26, 2014
Sep. 27, 2013
Sep. 26, 2014
Sep. 27, 2013
Dec. 27, 2013
Workers' Compensation Deductible Limit [Line Items]
 
 
 
 
 
Workers' compensation claim deductible limit
 
 
$ 2.0 
 
 
Weighted average period - claim payments and receivables above deductible limit
 
 
15 years 6 months 
 
 
Workers' compensation claim receivables net of valuation allowance
30.3 
 
30.3 
 
28.4 
Workers' compensation expense
21.6 
16.7 
55.1 
46.4 
 
Below limit
 
 
 
 
 
Workers' Compensation Deductible Limit [Line Items]
 
 
 
 
 
Weighted average rate
 
 
1.80% 
 
 
Above limit
 
 
 
 
 
Workers' Compensation Deductible Limit [Line Items]
 
 
 
 
 
Discounted workers compensation reserve for excess claims
$ 34.6 
 
$ 34.6 
 
$ 34.1 
DEBT Summary of long-term debt (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 26, 2014
Dec. 27, 2013
Debt Instrument [Line Items]
 
 
Long-term Debt
$ 177,217 
$ 31,923 
Long-term debt, less current portion
174,950 
29,656 
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
 
 
Debt Instrument [Line Items]
 
 
Long-term Debt
146,995 
0 
Synovus Bank [Member]
 
 
Debt Instrument [Line Items]
 
 
Long-term Debt
30,222 
31,923 
Long-term Debt, Current Maturities
$ 2,267 
$ 2,267 
DEBT Revolving Credit Facility Narrative (Details) (USD $)
0 Months Ended 9 Months Ended 9 Months Ended 0 Months Ended 9 Months Ended 0 Months Ended 9 Months Ended
Sep. 26, 2014
Dec. 27, 2013
Jun. 30, 2014
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Sep. 26, 2014
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Dec. 27, 2013
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Sep. 26, 2014
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
Synovus Bank [Member]
Dec. 27, 2013
Synovus Bank [Member]
Sep. 26, 2014
Percent of Eligible Billed Accounts Receivable [Member] [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
Percent of Eligible Accounts Receivable [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
Percent of Eligible Unbilled Accounts Receivable [Member] [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
Liquidation Value of Tacoma Headquarters Office Building [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
Revolving Credit Facility, Liquidity Requirement Component [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Jun. 30, 2014
London Interbank Offered Rate (LIBOR) [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
London Interbank Offered Rate (LIBOR) [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Feb. 4, 2013
London Interbank Offered Rate (LIBOR) [Member]
Synovus Bank [Member]
Jun. 30, 2014
Base Rate [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
Minimum [Member]
Revolving Credit Facility, Liquidity Requirement Component [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
Minimum [Member]
London Interbank Offered Rate (LIBOR) [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
Minimum [Member]
Base Rate [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
Maximum [Member]
London Interbank Offered Rate (LIBOR) [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
Maximum [Member]
Base Rate [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
Less than 25% utilization [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
Greater than or equal to 25% utilization [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
October 1, 2014 [Member]
London Interbank Offered Rate (LIBOR) [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
October 1, 2014 [Member]
Base Rate [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of Credit Facility, Maximum Borrowing Capacity
 
 
 
 
 
$ 300,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility Borrowing Limits, Percent of Accounts Receivable
 
 
 
 
 
 
 
 
90.00% 
15.00% 
85.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility Borrowing Limits, Liquidation Value Requirement, Pledged Real Estate
 
 
 
 
 
 
 
 
 
 
 
17,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility Borrowing Limits, Quarterly Reduction, Liquidation Value of Pledged Real Estate
 
 
 
 
 
 
 
 
 
 
 
400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility Borrowing Limits, Liquidation Value of Pledged Real Estate
 
 
 
 
 
 
 
 
 
 
 
17,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of Credit Facility, Current Borrowing Capacity
 
 
 
 
 
255,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt
177,217,000 
31,923,000 
 
146,995,000 
0 
 
30,222,000 
31,923,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of Credit Facility, Amount Outstanding
 
 
 
 
 
20,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of Credit Facility, Remaining Borrowing Capacity
 
 
 
 
 
 
 
 
 
 
 
 
87,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility, Liquidity Requirement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
37,500,000 
 
 
 
 
 
 
 
 
Revolving Credit Facility, Cash and Cash Equivalents Under Control Agreements
 
 
 
 
 
 
 
 
 
 
 
 
24,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility, Total Liquidity
 
 
 
 
 
 
 
 
 
 
 
 
$ 111,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.375% 
0.25% 
 
 
Debt Instrument, Basis Spread on Variable Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.50% 
 
 
1.25% 
0.25% 
2.00% 
1.00% 
 
 
 
 
Revolving Credit Facility, Additional Base Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
1.00% 
 
 
0.50% 
 
 
 
 
 
 
 
1.75% 
0.75% 
Line of Credit Facility, Interest Rate Description
 
 
one-month 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of Credit Facility, Interest Rate at Period End
 
 
 
2.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving credit facility, utilization rate
 
 
 
 
 
25.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Letters of Credit, Additional Basis Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.125% 
 
 
 
 
 
 
 
 
 
 
 
DEBT Term Loan Agreement (Details) (USD $)
0 Months Ended
Feb. 4, 2013
extension
Sep. 26, 2014
Dec. 27, 2013
Debt Instrument [Line Items]
 
 
 
Long-term Debt
 
$ 177,217,000 
$ 31,923,000 
Synovus Bank [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Debt Instrument, Face Amount
34,000,000 
 
 
Debt Instrument, Term
5 years 
 
 
Debt Instrument, Periodic Payment, Principal
2,300,000 
 
 
Debt Instrument, Amortization Term
15 years 
 
 
Line of Credit Facility, Interest Rate Description
one-month 
 
 
Debt Instrument, Number of Extensions Available to Company
5 
 
 
Debt Instrument, Extension Period
1 year 
 
 
Debt Instrument, Interest Rate at Period End
 
1.70% 
 
Long-term Debt
 
30,222,000 
31,923,000 
Long-term Debt, Current Maturities
 
$ 2,267,000 
$ 2,267,000 
Synovus Bank [Member] |
London Interbank Offered Rate (LIBOR) [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Debt Instrument, Basis Spread on Variable Rate
1.50% 
 
 
COMMITMENTS AND CONTINGENCIES - Workers' Compensation Commitments (Details) (USD $)
9 Months Ended
Sep. 26, 2014
Dec. 27, 2013
Workers' Compensation Commitments [Line Items]
 
 
Cash collateral held by insurance carriers
$ 22,643,000 
$ 23,747,000 
Cash and cash equivalents held in Trust
25,806,000 1
31,474,000 1
Investments held in Trust
92,699,000 
86,678,000 
Letters of credit
22,573,000 2
7,867,000 2
Surety bonds
15,742,000 3
16,099,000 3
Total collateral commitments
179,463,000 
165,865,000 
Accrued interest on trust investments
900,000 
800,000 
Cash collateral backing letters of credit
$ 1,864,000 
$ 1,864,000 
Surety bonds annual fee limit, % of bond amount
2.00% 
 
Surety bonds required cancellation notice
60 days 
 
Minimum
 
 
Workers' Compensation Commitments [Line Items]
 
 
Surety bonds review and renewal period if elected
1 year 
 
Maximum [Member]
 
 
Workers' Compensation Commitments [Line Items]
 
 
Surety bonds review and renewal period if elected
4 years 
 
STOCK-BASED COMPENSATION - Restricted and Unrestricted Stock and Performance Share Units (Details) (USD $)
In Millions, except Share data, unless otherwise specified
9 Months Ended
Sep. 26, 2014
Sep. 26, 2014
Restricted stock
Sep. 26, 2014
Performance shares
Sep. 26, 2014
Minimum
Restricted stock
Sep. 26, 2014
Maximum [Member]
Restricted stock
May 31, 2013
Incentive Plan
Share-based Compensation by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
 
 
 
 
 
Non-vested at beginning of period (in shares)
1,544,000 
 
 
 
 
 
Granted (in shares)
515,000 
 
 
 
 
 
Vested (in shares)
(414,000)
 
 
 
 
 
Forfeited (in shares)
(39,000)
 
 
 
 
 
Non-vested at the end of the period (in shares)
1,606,000 
 
 
 
 
 
Share-based Compensation by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
 
 
 
 
 
 
Non-vested at beginning of period (in dollars per share)
$ 16.66 
 
 
 
 
 
Granted (in dollars per share)
$ 26.11 
 
 
 
 
 
Vested (in dollars per share)
$ 17.78 
 
 
 
 
 
Forfeited (in dollars per share)
$ 18.58 
 
 
 
 
 
Non-vested at end of the period (in dollars per share)
$ 19.35 
 
 
 
 
 
Shares authorized for issuance (in shares)
 
 
 
 
 
7,950,000 
Vesting period
 
 
3 years 
3 years 
4 years 
 
Number of common stock shares represented by each performance share
1 
 
 
 
 
 
Total unrecognized stock-based compensation expense
 
$ 12.7 
$ 8.0 
 
 
 
Unrecognized stock-based compensation expense for the period identified
 
$ 11.1 
$ 4.5 
 
 
 
Unrecognized stock-based compensation expense, period for recognition
 
1 year 9 months 21 days 
1 year 9 months 3 days 
 
 
 
STOCK-BASED COMPENSATION - Employee Stock Purchase Plan (Details) (Employee stock purchase plan, USD $)
In Millions, except Share data, unless otherwise specified
9 Months Ended
Sep. 26, 2014
Sep. 27, 2013
Employee stock purchase plan
 
 
Employee Stock Purchase Plan [Abstract]
 
 
ESPP shares reserved for purchase
1,000,000 
 
Maximum employee subscription rate
10.00% 
 
Purchase price of common stock, percent of market value
85.00% 
 
Employee stock purchase plan requisite service period
1 month 
 
Stock issued under employee stock purchase plan (in shares)
45,000 
54,000 
Proceeds from Issuance of Shares under Incentive and Share-based Compensation Plans, Excluding Stock Options
$ 1.0 
$ 0.9 
STOCK-BASED COMPENSATION Stock-based compensation expense (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 26, 2014
Sep. 27, 2013
Sep. 26, 2014
Sep. 27, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
 
Allocated Share-based Compensation Expense
$ 3.9 
$ 1.8 
$ 8.9 
$ 6.4 
DEFINED CONTRIBUTION PLANS (Details) (USD $)
In Millions, unless otherwise specified
Sep. 26, 2014
Dec. 27, 2013
Compensation and Retirement Disclosure [Abstract]
 
 
Deferred compensation liability, current and noncurrent
$ 9.6 
$ 6.6 
INCOME TAXES - Narrative (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 26, 2014
Sep. 27, 2013
Dec. 27, 2013
Income Tax Disclosure [Abstract]
 
 
 
Effective income tax rate
23.20% 
23.10% 
 
Statutory federal income tax rate
35.00% 
 
 
Tax benefit recognized due to change in tax laws
$ 8 
 
 
Estimated income tax rate, before the effect of tax benefit
38.90% 
33.60% 
 
Unrecognized tax benefits
$ 2.0 
 
$ 2.0 
NET INCOME PER SHARE (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 26, 2014
Sep. 27, 2013
Sep. 26, 2014
Sep. 27, 2013
Earnings Per Share [Abstract]
 
 
 
 
Net income
$ 20,910 
$ 18,952 
$ 38,650 
$ 30,412 
Weighted average number of common shares used in basic net income per common share
40,793 
40,330 
40,701 
40,085 
Dilutive effect of outstanding stock options and non-vested restricted stock
245 
340 
270 
310 
Weighted average number of common shares used in diluted net income per common share
41,038 
40,670 
40,971 
40,395 
Net income per common share:
 
 
 
 
Basic (in dollars per share)
$ 0.51 
$ 0.47 
$ 0.95 
$ 0.76 
Diluted (in dollars per share)
$ 0.51 
$ 0.47 
$ 0.94 
$ 0.75 
Anti-dilutive shares
97 
0 
35 
0 
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 26, 2014
Sep. 27, 2013
Sep. 26, 2014
Sep. 27, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax
$ (1,087)
$ 109 
$ (997)
$ (439)
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax
(81)
(30)
372 
(37)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
 
Balance at beginning of period
 
 
2,033 
 
Current-period other comprehensive income
(1,168)
79 
(625)1
(476)
Balance at end of period
1,408 
 
1,408 
 
Foreign currency translation adjustment
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax
 
 
(997)1
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
 
Balance at beginning of period
 
 
2,129 
 
Balance at end of period
1,132 
 
1,132 
 
Unrealized gain (loss) on marketable securities
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax
 
 
372 1 2
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
 
Balance at beginning of period
 
 
(96)2
 
Balance at end of period
$ 276 2
 
$ 276 2
 
SUPPLEMENTAL CASH FLOW INFORMATION (Details) (USD $)
9 Months Ended
Sep. 26, 2014
Sep. 27, 2013
Cash paid during the period for:
 
 
Interest
$ 951,000 
$ 727,000 
Income taxes
10,653,000 
4,112,000 
Property, plant and equipment on account that was not yet paid
$ 1,000,000 
$ 300,000