TRUEBLUE, INC., 10-Q filed on 8/5/2015
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 26, 2015
Jul. 13, 2015
Document and Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Jun. 26, 2015 
 
Document Fiscal Year Focus
2015 
 
Document Fiscal Period Focus
Q2 
 
Trading Symbol
TBI 
 
Entity Registrant Name
TrueBlue, Inc. 
 
Entity Central Index Key
0000768899 
 
Current Fiscal Year End Date
--12-25 
 
Entity Well-Known Seasoned Issuer
No 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
41,958,517 
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Jun. 26, 2015
Dec. 26, 2014
Current assets:
 
 
Cash and cash equivalents
$ 21,288 
$ 19,666 
Marketable securities
0 
1,500 
Accounts receivable, net of allowance for doubtful accounts of $7,226 and $7,603
324,021 
359,903 
Prepaid expenses, deposits and other current assets
15,811 
18,778 
Income tax receivable
6,442 
10,516 
Deferred income taxes, net
6,123 
5,444 
Total current assets
373,685 
415,807 
Property and equipment, net
56,805 
61,392 
Restricted cash and investments
164,673 
168,426 
Goodwill
241,855 
241,855 
Intangible assets, net
126,835 
136,560 
Other assets, net
44,124 
42,631 
Total assets
1,007,977 
1,066,671 
Current liabilities:
 
 
Accounts payable and other accrued expenses
55,377 
50,256 
Accrued wages and benefits
72,295 
69,692 
Current portion of workers' compensation claims reserve
61,753 
64,556 
Other current liabilities
2,691 
2,726 
Total current liabilities
192,116 
187,230 
Workers’ compensation claims reserve, less current portion
185,549 
178,283 
Long-term debt, less current portion
99,750 
199,383 
Deferred income taxes, net
18,911 
19,768 
Other long-term liabilities
15,215 
12,673 
Total liabilities
511,541 
597,337 
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; 41,962 and 41,530 shares issued and outstanding
1 
1 
Accumulated other comprehensive income
600 
871 
Retained earnings
495,835 
468,462 
Total shareholders’ equity
496,436 
469,334 
Total liabilities and shareholders’ equity
$ 1,007,977 
$ 1,066,671 
CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $)
In Thousands, except Share data, unless otherwise specified
Jun. 26, 2015
Dec. 26, 2014
Allowance for doubtful accounts
$ 7,226 
$ 7,603 
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
41,962,000 
41,530,000 
Common stock, shares outstanding
41,962,000 
41,530,000 
CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 26, 2015
Jun. 27, 2014
Jun. 26, 2015
Jun. 27, 2014
Revenue from services
$ 627,714 
$ 453,227 
$ 1,201,029 
$ 849,290 
Cost of services
475,748 
333,644 
919,227 
630,148 
Gross profit
151,966 
119,583 
281,802 
219,142 
Selling, general and administrative expenses
117,859 
96,354 
229,452 
188,336 
Depreciation and amortization
10,397 
5,247 
20,917 
10,408 
Income from operations
23,710 
17,982 
31,433 
20,398 
Interest expense
(881)
(322)
(2,047)
(585)
Interest and other income
679 
772 
1,311 
1,379 
Interest and other income (expense), net
(202)
450 
(736)
794 
Income before tax expense
23,508 
18,432 
30,697 
21,192 
Income tax expense
6,235 
2,350 
7,708 
3,453 
Net income
17,273 
16,082 
22,989 
17,739 
Net income per common share:
 
 
 
 
Basic (in dollars per share)
$ 0.42 
$ 0.39 
$ 0.56 
$ 0.44 
Diluted (in dollars per share)
$ 0.42 
$ 0.39 
$ 0.55 
$ 0.43 
Weighted average shares outstanding:
 
 
 
 
Basic (in shares)
41,240 
40,739 
41,135 
40,655 
Diluted (in shares)
41,475 
40,969 
41,472 
40,934 
Other comprehensive income (loss):
 
 
 
 
Foreign currency translation adjustment, net of tax
587 
333 
(825)
89 
Unrealized gain on investments, net of tax
387 
406 
554 
453 
Total other comprehensive income (loss), net of tax
974 
739 
(271)1
542 
Comprehensive income
$ 18,247 
$ 16,821 
$ 22,718 
$ 18,281 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 26, 2015
Jun. 27, 2014
Cash flows from operating activities:
 
 
Net income
$ 22,989 
$ 17,739 
Adjustments to reconcile net income to net cash from operating activities:
 
 
Depreciation and amortization
20,917 
10,408 
Provision for doubtful accounts
3,976 
6,286 
Stock-based compensation
5,769 
4,987 
Deferred income taxes
(1,537)
(4,088)
Other operating activities
678 
(54)
Changes in operating assets and liabilities:
 
 
Accounts receivable
31,906 
(15,180)
Income taxes
5,035 
3,647 
Other assets
1,474 
(66)
Accounts payable and other accrued expenses
5,919 
(566)
Accrued wages and benefits
2,603 
5,291 
Workers’ compensation claims reserve
4,463 
(792)
Other liabilities
2,506 
1,310 
Net cash provided by operating activities
106,698 
28,922 
Cash flows from investing activities:
 
 
Capital expenditures
(7,459)
(6,113)
Purchases of marketable securities
0 
(25,057)
Sales and maturities of marketable securities
1,500 
36,175 
Change in restricted cash and cash equivalents
8,227 
19,007 
Purchases of restricted investments
(12,959)
(18,196)
Maturities of restricted investments
7,504 
7,202 
Net cash provided by (used in) investing activities
(3,187)
13,018 
Cash flows from financing activities:
 
 
Net proceeds from stock option exercises and employee stock purchase plans
837 
1,349 
Common stock repurchases for taxes upon vesting of restricted stock
(3,183)
(2,665)
Net change in revolving credit facility
(98,500)
0 
Payments on debt and other liabilities
(1,133)
(1,133)
Other
961 
1,269 
Net cash used in financing activities
(101,018)
(1,180)
Effect of exchange rate changes on cash and cash equivalents
(871)
86 
Net change in cash and cash equivalents
1,622 
40,846 
CASH AND CASH EQUIVALENTS, beginning of period
19,666 
122,003 
CASH AND CASH EQUIVALENTS, end of period
$ 21,288 
$ 162,849 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
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 26, 2014. The results of operations for the twenty-six weeks ended June 26, 2015 are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period.

Recently issued accounting pronouncements not yet adopted

In April 2015, the Financial Accounting Standards Board ("FASB") issued a new accounting standard intended to simplify the presentation of debt issuance costs. The standard requires that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with the presentation for debt discounts. The recognition and measurement guidance for debt issuance costs is not affected. This guidance is effective for annual periods beginning after December 15, 2015 (Q1 2016 for TrueBlue), including interim periods within those annual periods and must be applied on a retrospective basis with early adoption permitted. TrueBlue plans to adopt the new standard on the effective date. This standard is not expected to have a material impact on our consolidated financial statements.

In April 2015, the FASB issued a new accounting standard designed to assist customers in their determination of whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 (Q1 2016 for TrueBlue). Early adoption is permitted and may be applied retrospectively or prospectively to arrangements entered into, or materially modified, after the effective date. TrueBlue plans to adopt the new standard prospectively on the effective date. This standard is not expected to have a material impact on our consolidated financial statements.

In May 2014, the FASB issued a new accounting standard that sets forth a five-step revenue recognition model, which supersedes current revenue recognition guidance, including industry-specific revenue recognition guidance. 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 additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The new standard provides two methods of initial adoption: retrospective for all periods presented, or through a cumulative adjustment in the year of adoption. On July 9, 2015, the FASB approved a one year deferral of the effective date of the standard. The new effective date is for annual periods beginning after December 15, 2017 (Q1 2018 for TrueBlue), including interim periods within those annual periods. Early adoption is permitted one year prior to the effective date. 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.
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") and 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 values of our accounts receivable, accounts payable and other accrued expenses, and accrued wages and benefits approximate 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. We hold long-term debt with variable interest rates that approximate fair value. For additional information, see Note 8: Long-term Debt.
The following tables present the fair value and hierarchy for our financial assets (in thousands):
 
June 26, 2015
 
Carrying Value
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
Cash and cash equivalents (1)
$
21,288

 
$
21,288

 
$
21,288

 
$
—

 
$
—

Restricted cash and cash equivalents (1)
58,226

 
58,226

 
58,226

 
—

 
—

Other restricted assets (2)
11,849

 
11,849

 
11,849

 
—

 
—

Restricted investments classified as held-to-maturity
94,598

 
95,198

 
—

 
95,198

 
—

 
December 26, 2014
 
Carrying Value
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
Cash and cash equivalents (1)
$
19,666

 
$
19,666

 
$
19,666

 
$
—

 
$
—

Marketable securities classified as available-for-sale (3)
1,500

 
1,500

 
—

 
1,500

 

Restricted cash and cash equivalents (1)
68,359

 
68,359

 
68,359

 
—

 
—

Other restricted assets (2)
9,972

 
9,972

 
9,972

 
—

 
—

Restricted investments classified as held-to-maturity
90,095

 
91,066

 
—

 
91,066

 
—


(1)
Cash equivalents and restricted cash equivalents consist of money market funds, deposits, and investments with original maturities of three months or less.
(2)
Other restricted assets primarily consist of deferred compensation plan accounts, which are comprised of mutual funds.
(3)
At June 26, 2015 we held no marketable securities. At December 26, 2014, all our marketable securities, which consisted of CDs, had stated maturities of less than one year.
MARKETABLE SECURITIES
MARKETABLE SECURITIES
MARKETABLE SECURITIES
We held no marketable securities as of June 26, 2015. Gross unrealized gains and losses were de minimis for the thirteen and twenty-six weeks ended June 26, 2015.
As of December 26, 2014, the amortized cost and fair value of our marketable securities, which were all CDs with stated maturities of less than one year, were $1.5 million. Gross unrealized gains and losses were de minimis for the thirteen and twenty-six weeks ended June 27, 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 of our restricted cash and investments (in thousands):
 
June 26,
2015
 
December 26,
2014
Cash collateral held by insurance carriers
$
22,305

 
$
22,639

Cash and cash equivalents held in Trust
34,057

 
43,856

Investments held in Trust
94,598

 
90,095

Cash collateral backing letters of credit
1,864

 
1,864

Other (1)
11,849

 
9,972

Total restricted cash and investments
$
164,673

 
$
168,426


(1)
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):
 
June 26, 2015
 
Amortized Cost
 
Gross Unrealized Gain
 
Gross Unrealized Loss
 
Fair Value
Municipal debt securities
$
52,213

 
$
664

 
$
(155
)
 
$
52,722

Corporate debt securities
33,683

 
155

 
(134
)
 
33,704

Asset-backed securities
8,702

 
103

 
(33
)
 
8,772

 
$
94,598

 
$
922

 
$
(322
)
 
$
95,198

 
December 26, 2014
 
Amortized Cost
 
Gross Unrealized Gain
 
Gross Unrealized Loss
 
Fair Value
Municipal debt securities
$
52,406

 
$
882

 
$
(92
)
 
$
53,196

Corporate debt securities
27,715

 
179

 
(144
)
 
27,750

Asset-backed securities
9,974

 
157

 
(11
)
 
10,120

 
$
90,095

 
$
1,218

 
$
(247
)
 
$
91,066


The amortized cost and fair value by contractual maturity of our held-to-maturity investments are as follows (in thousands):
 
June 26, 2015
 
Amortized Cost
 
Fair Value
Due in one year or less
$
10,129

 
$
10,200

Due after one year through five years
47,209

 
47,407

Due after five years through ten years
37,260

 
37,591

 
$
94,598

 
$
95,198


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. We have no significant concentrations of counterparties in our held-to-maturity investment portfolio.
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):
 
June 26,
2015
 
December 26,
2014
Buildings and land
$
30,992

 
$
30,381

Computers and software
118,601

 
115,419

Furniture and equipment
11,853

 
11,690

Construction in progress
6,980

 
5,415

 
168,426

 
162,905

Less accumulated depreciation
(111,621
)
 
(101,513
)
 
$
56,805

 
$
61,392


Capitalized software costs, net of accumulated depreciation, were $25.8 million and $30.2 million as of June 26, 2015 and December 26, 2014, 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 $5.8 million and $3.7 million for the thirteen weeks ended June 26, 2015 and June 27, 2014, respectively. Depreciation expense of property and equipment totaled $11.2 million and $7.4 million for the twenty-six weeks ended June 26, 2015 and June 27, 2014, respectively.
GOODWILL AND INTANGIBLE ASSETS
Goodwill and Intangible Assets
GOODWILL AND INTANGIBLE ASSETS
Goodwill

The following table reflects goodwill at June 26, 2015 and December 26, 2014 (in thousands):
 
Staffing Services
 
Managed Services
 
Unallocated Goodwill
 
Total Company
Balance at December 26, 2014
 
 
 
 
 
 
 
Goodwill before impairment
$
128,449

 
$
—

 
$
159,616

 
$
288,065

Accumulated impairment loss
(46,210
)
 
—

 
—

 
(46,210
)
Goodwill, net
82,239

 
—

 
159,616

 
241,855

 
 
 
 
 
 
 
 
Allocated goodwill
42,730

 
116,886

 
(159,616
)
 
—

 
 
 
 
 
 
 
 
Balance at June 26, 2015
 
 
 
 
 
 
 
Goodwill before impairment
171,179

 
116,886

 
—

 
288,065

Accumulated impairment loss
(46,210
)
 
—

 
—

 
(46,210
)
Goodwill, net
$
124,969

 
$
116,886

 
$
—

 
$
241,855


Effective June 30, 2014, we acquired Staffing Solutions Holdings, Inc. ("Seaton"). The goodwill associated with the acquisition has been allocated to our reportable segments. For additional information regarding our segments, see Note 16: Segment Information.
Intangible assets
The following table presents our purchased finite-lived intangible assets (in thousands):
 
June 26, 2015
 
December 26, 2014
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Finite-lived intangible assets (1):
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
$
123,940

 
$
(29,709
)
 
$
94,231

 
$
123,940

 
$
(22,195
)
 
$
101,745

Trade names/trademarks
4,422

 
(3,201
)
 
1,221

 
4,422

 
(2,878
)
 
1,544

Non-compete agreements
1,800

 
(997
)
 
803

 
1,800

 
(817
)
 
983

Technologies
18,300

 
(3,920
)
 
14,380

 
18,300

 
(2,212
)
 
16,088

Total finite-lived intangible assets
$
148,462

 
$
(37,827
)
 
$
110,635

 
$
148,462

 
$
(28,102
)
 
$
120,360


(1)
Excludes assets that are fully amortized.

Amortization of our finite-lived intangible assets was $4.6 million and $1.5 million for the thirteen weeks ended June 26, 2015 and June 27, 2014, respectively, and $9.7 million and $3.0 million for the twenty-six weeks ended June 26, 2015 and June 27, 2014, respectively.
The following table provides the estimated future amortization of finite-lived intangible assets as of June 26, 2015 (in thousands):
Remainder of 2015
$
9,187

2016
18,186

2017
16,157

2018
14,638

2019
12,017

Thereafter
40,450

Total future amortization
$
110,635


We also held indefinite-lived trade names/trademarks of $16.2 million as of June 26, 2015 and December 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 discount rate was 1.6% and 1.7% at June 26, 2015 and December 26, 2014, respectively. Payments made against self-insured claims are made over a weighted average period of approximately 4.5 years at June 26, 2015.
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):
 
June 26,
2015
 
December 26,
2014
Undiscounted workers’ compensation reserve
$
261,582

 
$
256,220

Less discount on workers' compensation reserve
14,280

 
13,381

Workers' compensation reserve, net of discount
247,302

 
242,839

Less current portion
61,753

 
64,556

Long-term portion
$
185,549

 
$
178,283


Payments made against self-insured claims were $34.4 million and $29.8 million for the twenty-six weeks ended June 26, 2015 and June 27, 2014, respectively.
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 14.7 years. The discounted workers’ compensation reserve for excess claims was $44.5 million and $42.6 million as of June 26, 2015 and December 26, 2014, respectively. The discounted receivables from insurance companies, net of valuation allowance, were $40.6 million and $38.7 million as of June 26, 2015 and December 26, 2014, 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 $22.9 million and $17.5 million was recorded in Cost of services for the thirteen weeks ended June 26, 2015 and June 27, 2014, respectively. Workers’ compensation expense of $44.4 million and $33.5 million was recorded in Cost of services for the twenty-six weeks ended June 26, 2015 and June 27, 2014, respectively.
LONG-TERM DEBT
Long-term Debt
LONG-TERM DEBT

The components of our borrowings were as follows (in thousands):
 
 
June 26,
2015
 
December 26, 2014
Revolving Credit Facility
 
$
73,494

 
$
171,994

Term Loan
 
28,523

 
29,656

Total debt
 
102,017

 
201,650

Less current portion
 
2,267

 
2,267

Long-term debt, less current portion
 
$
99,750

 
$
199,383



Second amended and restated credit agreement

Effective June 30, 2014, we entered into a Second Amended and Restated Revolving 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 ("Revolving Credit Facility") in connection with our acquisition of Seaton. The Revolving 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 Revolving 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. As of June 26, 2015, the Tacoma headquarters office building liquidation value totaled $16.1 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. Each borrowing has a stated maturity of 90 days or less. At June 26, 2015, $261.6 million was available under the Revolving Credit Facility, $73.5 million was utilized as a draw on the facility, and $4.9 million was utilized by outstanding standby letters of credit, leaving $183.2 million available for additional borrowings. The letters of credit collateralize a portion of our workers' compensation obligation.

The Revolving 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 Revolving 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 June 26, 2015 was $183.2 million and the amount of cash, cash equivalents and certain marketable securities under control agreements was $21.3 million, for a total of $204.5 million, which is well in excess of the liquidity requirement. We are currently in compliance with all covenants related to the Revolving Credit Facility.

Under the terms of the Revolving 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%. At June 26, 2015, the applicable spread on LIBOR was 1.50% and the applicable spread on the base rate was 0.5%. As of June 26, 2015, the interest rate was 1.75%.

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

Obligations under the Revolving Credit Facility are guaranteed by TrueBlue and material U.S. domestic subsidiaries, and are secured by a pledge of substantially all of the assets of TrueBlue and material U.S. domestic subsidiaries. The Revolving Credit Facility has variable rate interest and approximates fair value as of June 26, 2015 and December 26, 2014.
Term loan agreement
On February 4, 2013, we entered into an unsecured Term Loan Agreement (“Term Loan”) with Synovus Bank in the principal amount of $34.0 million. The Term 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 Term Loan by five consecutive one-year extensions. At June 26, 2015, the interest rate for the Term Loan was 1.68%.
At June 26, 2015 and December 26, 2014, the remaining balance of the Term Loan was $28.5 million and $29.7 million, respectively, of which $2.3 million is current and is included in Other current liabilities on our Consolidated Balance Sheets. The Term Loan has variable rate interest and approximates fair value as of June 26, 2015 and December 26, 2014.
Our obligations under the Term Loan may be accelerated upon the occurrence of an event of default under the Term Loan, which includes customary events of default, as well as cross-defaults related to indebtedness under our Revolving Credit Facility and other Term Loan specific defaults. The Term Loan contains customary negative covenants applicable to the Company and our subsidiaries such as indebtedness, certain dispositions of property, the imposition of restrictions on payments under the Term Loan, and other Term Loan specific covenants. We are currently in compliance with all covenants related to the Term 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.
We have provided our insurance carriers and certain states with commitments in the form and amounts listed below (in thousands):
 
June 26,
2015
 
December 26,
2014
Cash collateral held by insurance carriers
$
22,305

 
$
22,639

Cash and cash equivalents held in Trust
34,057

 
43,856

Investments held in Trust
94,598

 
90,095

Letters of credit (1)
6,731

 
6,513

Surety bonds (2)
16,905

 
16,861

Total collateral commitments
$
174,596

 
$
179,964



(1)
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 June 26, 2015 and December 26, 2014.
(2)
Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which are 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 liabilities included in our financial statements reflect the probable loss that can be reasonably estimated. 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 awards and performance share units
Under the Incentive Plan, restricted stock awards are granted to executive officers and key employees and vest annually over three or four years. Unrestricted stock awards granted to our Board of Directors vest 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 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 awards and performance share units activity for the twenty-six weeks ended June 26, 2015, was as follows (shares in thousands):
 
Shares
 
Weighted- average grant-date price
Non-vested at beginning of period
1,547

 
$
20.03

Granted
487

 
$
22.11

Vested
(518
)
 
$
17.16

Forfeited
(265
)
 
$
14.87

Non-vested at the end of the period
1,251

 
$
22.44


As of June 26, 2015, total unrecognized stock-based compensation expense related to non-vested restricted stock was approximately $12.0 million, which is estimated to be recognized over a weighted average period of 1.78 years. As of June 26, 2015, total unrecognized stock-based compensation expense related to performance share units was approximately $4.6 million which is estimated to be recognized over a weighted average period of 1.87 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 years from the date of grant. Stock option activity was de minimis for the thirteen weeks ended June 26, 2015.
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 85% of the lesser 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 twenty-six weeks ended June 26, 2015 and June 27, 2014, participants purchased approximately 34,000 and 30,000 shares from the plan, for cash proceeds of $0.7 million each period.
Stock-based compensation expense
Total stock-based compensation expense, which is included in Selling, general and administrative expenses on our Consolidated Statements of Operations and Comprehensive Income, was $2.4 million and $1.9 million for the thirteen weeks ended June 26, 2015 and June 27, 2014, respectively, and $5.8 million and $5.0 million for the twenty-six weeks ended June 26, 2015 and June 27, 2014, respectively.
DEFINED CONTRIBUTION PLANS
DEFINED CONTRIBUTION PLANS
DEFINED CONTRIBUTION PLANS

We offer both qualified and non-qualified 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 non-qualified plans was $12.2 million and $10.1 million as of June 26, 2015 and December 26, 2014, 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 our Consolidated Balance Sheets, and is largely offset by restricted investments recorded in Restricted cash and investments on our 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 are 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 twenty-six weeks ended June 26, 2015 was 25.1%. The principal difference between the statutory federal income tax rate of 35.0% and our effective income tax rate of 25.1% results from federal and state job credits earned in 2015 for prior year hires. These job credits include the federal Work Opportunity Tax Credit ("WOTC") and the California Enterprise Zone Tax Credit. We generated substantially more prior year credits in 2015 because the federal WOTC application due date was extended to April 30, 2015 for 2014 hires, and more workers with higher credits were certified than expected. These factors generated additional tax benefits of approximately $3.7 million, which were recognized as of June 26, 2015. This tax credit benefit decreased our effective tax rate on income for the twenty-six weeks ended June 26, 2015 from our expected 2015 rate of 37.3% to 25.1%. Other differences between the statutory federal income tax rate of 35.0% and our effective tax rate of 25.1% result from state and foreign income taxes and certain non-deductible expenses.

Our effective tax rate on earnings for the twenty-six weeks ended June 27, 2014, was 16.3%. The principal difference between the statutory federal income tax rate of 35.0% and our effective income tax rate of 16.3%, results from the 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 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 $5.0 million, which were recognized as of June 27, 2014. This tax credit benefit decreased our effective tax rate on income for the twenty-six weeks ended June 27, 2014 from our expected rate of 39.9% to 16.3%. Other differences between the statutory federal income tax rate of 35.0% result from state income taxes and certain non-deductible expenses.
As of June 26, 2015 and December 26, 2014, we had gross unrecognized tax benefits of $2.1 million and $2.0 million, respectively, 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
 
Twenty-six weeks ended
 
June 26,
2015

June 27,
2014
 
June 26,
2015
 
June 27,
2014
Net income
$
17,273

 
$
16,082

 
$
22,989

 
$
17,739

 
 
 
 
 
 
 
 
Weighted average number of common shares used in basic net income per common share
41,240

 
40,739

 
41,135

 
40,655

Dilutive effect of outstanding stock options and non-vested restricted stock
235

 
230

 
337

 
279

Weighted average number of common shares used in diluted net income per common share
41,475

 
40,969

 
41,472

 
40,934

Net income per common share:
 
 
 
 
 
 
 
Basic
$
0.42

 
$
0.39

 
$
0.56

 
$
0.44

Diluted
$
0.42

 
$
0.39

 
$
0.55

 
$
0.43

 
 
 
 
 
 
 
 
Anti-dilutive shares
106

 
3

 
189

 
2


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 stock options, vested and non-vested restricted stock, performance share units, and shares issued under the employee stock purchase plan, except where their inclusion would be anti-dilutive.
Anti-dilutive shares include non-vested restricted stock and outstanding stock 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 (LOSS)
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 twenty-six weeks ended June 26, 2015 were as follows (in thousands):
 
Foreign currency translation adjustment
 
Unrealized gain on marketable securities (1)
 
Total other comprehensive income, net of tax
Balance at beginning of period
$
848

 
$
23

 
$
871

Current-period other comprehensive income (loss) (2)
(825
)
 
554

 
(271
)
Balance at end of period
$
23

 
$
577

 
$
600


(1)
Consists of deferred compensation plan accounts, which include mutual funds.
(2)
The tax impact on foreign currency translation adjustment and unrealized gain on marketable securities was de minimis for the period ending June 26, 2015.

There were no material reclassifications out of accumulated other comprehensive income during the fiscal period presented.
SUPPLEMENTAL CASH FLOW INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosure of cash flow information (in thousands):
 
Twenty-six weeks ended
 
June 26, 2015
 
June 27, 2014
Cash paid during the period for:
 
 
 
Interest
$
1,863

 
$
540

Income taxes
$
3,939

 
$
5,820

As of June 26, 2015 and June 27, 2014 we had acquired $0.2 million and $0.4 million, respectively, of property, plant and equipment on account that was not yet paid. These are considered non-cash investing items.
SEGMENT INFORMATION
SEGMENT INFORMATION
SEGMENT INFORMATION

Our operating segments are based on the organizational structure for which financial results are regularly evaluated by the chief operating decision maker, our Chief Executive Officer, to determine resource allocation and assess performance. Our service lines are our operating segments. Our reportable segments are described below:

Our Staffing Services segment provides temporary staffing through the following service lines:
•
Labor Ready: On-demand general labor;
•
Spartan Staffing: Skilled manufacturing and logistics labor;
•
CLP Resources: Skilled trades for commercial, industrial, and energy construction as well as building and plant maintenance;
•
PlaneTechs: Skilled mechanics and technicians to the aviation and transportation industries;
•
Centerline Drivers: Temporary and dedicated drivers to the transportation and distribution industries; and
•
Staff Management On-premise Staffing: Exclusive recruitment and on-premise management of a facility's contingent industrial workforce.

Our Managed Services segment provides high-volume permanent employee recruitment process outsourcing and management of outsourced labor service providers through the following service lines:
•
PeopleScout and hrX: Outsourced recruitment of permanent employees on behalf of clients; and
•
Staff Management: Management of multiple third party staffing vendors on behalf of clients.

We have two measures of segment performance; revenue from services and income from operations. Income from operations for each segment includes net sales to third parties, related cost of sales, and operating expenses directly attributable to the segment. Costs excluded from segment income from operations include various corporate general and administrative expenses, depreciation and amortization expense, interest and other income (expense), and income taxes. Asset information by reportable segment is not presented, since we do not manage our segments on a balance sheet basis. There are no material internal revenue transactions between our reporting segments.

Revenue from services and income from operations associated with our segments were as follows (in thousands):
 
Thirteen weeks ended
 
Twenty-six weeks ended
 
June 26, 2015
 
June 27, 2014
 
June 26, 2015
 
June 27, 2014
Revenue from services
 
 
 
 
 
 
 
Staffing Services
$
601,103

 
$
453,227

 
$
1,150,815

 
$
849,290

Managed Services
26,611

 
—

 
50,214

 
—

Total Company
$
627,714

 
$
453,227

 
$
1,201,029

 
$
849,290

 
 
 
 
 
 
 
 
Income from operations
 
 
 
 
 
 
 
Staffing Services
$
38,834

 
$
32,195

 
$
63,117

 
$
47,739

Managed Services
4,326

 
—

 
7,750

 
—

Depreciation and amortization
(10,397
)
 
(5,247
)
 
(20,917
)
 
(10,408
)
Corporate unallocated
(9,053
)
 
(8,966
)
 
(18,517
)
 
(16,933
)
Total Company
23,710

 
17,982

 
31,433

 
20,398

Interest and other income (expense), net
(202
)
 
450

 
(736
)
 
794

Income before tax expense
$
23,508

 
$
18,432

 
$
30,697

 
$
21,192

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.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (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.
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 26, 2014. The results of operations for the twenty-six weeks ended June 26, 2015 are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period.
Recently issued accounting pronouncements not yet adopted 
Recently issued accounting pronouncements not yet adopted

In April 2015, the Financial Accounting Standards Board ("FASB") issued a new accounting standard intended to simplify the presentation of debt issuance costs. The standard requires that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with the presentation for debt discounts. The recognition and measurement guidance for debt issuance costs is not affected. This guidance is effective for annual periods beginning after December 15, 2015 (Q1 2016 for TrueBlue), including interim periods within those annual periods and must be applied on a retrospective basis with early adoption permitted. TrueBlue plans to adopt the new standard on the effective date. This standard is not expected to have a material impact on our consolidated financial statements.

In April 2015, the FASB issued a new accounting standard designed to assist customers in their determination of whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 (Q1 2016 for TrueBlue). Early adoption is permitted and may be applied retrospectively or prospectively to arrangements entered into, or materially modified, after the effective date. TrueBlue plans to adopt the new standard prospectively on the effective date. This standard is not expected to have a material impact on our consolidated financial statements.

In May 2014, the FASB issued a new accounting standard that sets forth a five-step revenue recognition model, which supersedes current revenue recognition guidance, including industry-specific revenue recognition guidance. 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 additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The new standard provides two methods of initial adoption: retrospective for all periods presented, or through a cumulative adjustment in the year of adoption. On July 9, 2015, the FASB approved a one year deferral of the effective date of the standard. The new effective date is for annual periods beginning after December 15, 2017 (Q1 2018 for TrueBlue), including interim periods within those annual periods. Early adoption is permitted one year prior to the effective date. 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.
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") and 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 values of our accounts receivable, accounts payable and other accrued expenses, and accrued wages and benefits approximate 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. We hold long-term debt with variable interest rates that approximate fair value. For additional information, see Note 8: Long-term Debt.
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):
 
June 26, 2015
 
Carrying Value
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
Cash and cash equivalents (1)
$
21,288

 
$
21,288

 
$
21,288

 
$
—

 
$
—

Restricted cash and cash equivalents (1)
58,226

 
58,226

 
58,226

 
—

 
—

Other restricted assets (2)
11,849

 
11,849

 
11,849

 
—

 
—

Restricted investments classified as held-to-maturity
94,598

 
95,198

 
—

 
95,198

 
—

 
December 26, 2014
 
Carrying Value
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
Cash and cash equivalents (1)
$
19,666

 
$
19,666

 
$
19,666

 
$
—

 
$
—

Marketable securities classified as available-for-sale (3)
1,500

 
1,500

 
—

 
1,500

 

Restricted cash and cash equivalents (1)
68,359

 
68,359

 
68,359

 
—

 
—

Other restricted assets (2)
9,972

 
9,972

 
9,972

 
—

 
—

Restricted investments classified as held-to-maturity
90,095

 
91,066

 
—

 
91,066

 
—


(1)
Cash equivalents and restricted cash equivalents consist of money market funds, deposits, and investments with original maturities of three months or less.
(2)
Other restricted assets primarily consist of deferred compensation plan accounts, which are comprised of mutual funds.
(3)
At June 26, 2015 we held no marketable securities. At December 26, 2014, all our marketable securities, which consisted of CDs, had stated maturities of less than one year.
RESTRICTED CASH AND INVESTMENTS (Tables)
Schedule of restricted cash and investments 
The following is a summary of our restricted cash and investments (in thousands):
 
June 26,
2015
 
December 26,
2014
Cash collateral held by insurance carriers
$
22,305

 
$
22,639

Cash and cash equivalents held in Trust
34,057

 
43,856

Investments held in Trust
94,598

 
90,095

Cash collateral backing letters of credit
1,864

 
1,864

Other (1)
11,849

 
9,972

Total restricted cash and investments
$
164,673

 
$
168,426


(1)
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):
 
June 26, 2015
 
Amortized Cost
 
Gross Unrealized Gain
 
Gross Unrealized Loss
 
Fair Value
Municipal debt securities
$
52,213

 
$
664

 
$
(155
)
 
$
52,722

Corporate debt securities
33,683

 
155

 
(134
)
 
33,704

Asset-backed securities
8,702

 
103

 
(33
)
 
8,772

 
$
94,598

 
$
922

 
$
(322
)
 
$
95,198

 
December 26, 2014
 
Amortized Cost
 
Gross Unrealized Gain
 
Gross Unrealized Loss
 
Fair Value
Municipal debt securities
$
52,406

 
$
882

 
$
(92
)
 
$
53,196

Corporate debt securities
27,715

 
179

 
(144
)
 
27,750

Asset-backed securities
9,974

 
157

 
(11
)
 
10,120

 
$
90,095

 
$
1,218

 
$
(247
)
 
$
91,066

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):
 
June 26, 2015
 
Amortized Cost
 
Fair Value
Due in one year or less
$
10,129

 
$
10,200

Due after one year through five years
47,209

 
47,407

Due after five years through ten years
37,260

 
37,591

 
$
94,598

 
$
95,198

PROPERTY AND EQUIPMENT, NET (Tables)
Schedule of property and equipment
Property and equipment are stated at cost and consist of the following (in thousands):
 
June 26,
2015
 
December 26,
2014
Buildings and land
$
30,992

 
$
30,381

Computers and software
118,601

 
115,419

Furniture and equipment
11,853

 
11,690

Construction in progress
6,980

 
5,415

 
168,426

 
162,905

Less accumulated depreciation
(111,621
)
 
(101,513
)
 
$
56,805

 
$
61,392

GOODWILL AND INTANGIBLE ASSETS (Tables)
Schedule of Goodwill 
The following table reflects goodwill at June 26, 2015 and December 26, 2014 (in thousands):
 
Staffing Services
 
Managed Services
 
Unallocated Goodwill
 
Total Company
Balance at December 26, 2014
 
 
 
 
 
 
 
Goodwill before impairment
$
128,449

 
$
—

 
$
159,616

 
$
288,065

Accumulated impairment loss
(46,210
)
 
—

 
—

 
(46,210
)
Goodwill, net
82,239

 
—

 
159,616

 
241,855

 
 
 
 
 
 
 
 
Allocated goodwill
42,730

 
116,886

 
(159,616
)
 
—

 
 
 
 
 
 
 
 
Balance at June 26, 2015
 
 
 
 
 
 
 
Goodwill before impairment
171,179

 
116,886

 
—

 
288,065

Accumulated impairment loss
(46,210
)
 
—

 
—

 
(46,210
)
Goodwill, net
$
124,969

 
$
116,886

 
$
—

 
$
241,855


Schedule of finite-lived intangible assets 
The following table presents our purchased finite-lived intangible assets (in thousands):
 
June 26, 2015
 
December 26, 2014
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Finite-lived intangible assets (1):
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
$
123,940

 
$
(29,709
)
 
$
94,231

 
$
123,940

 
$
(22,195
)
 
$
101,745

Trade names/trademarks
4,422

 
(3,201
)
 
1,221

 
4,422

 
(2,878
)
 
1,544

Non-compete agreements
1,800

 
(997
)
 
803

 
1,800

 
(817
)
 
983

Technologies
18,300

 
(3,920
)
 
14,380

 
18,300

 
(2,212
)
 
16,088

Total finite-lived intangible assets
$
148,462

 
$
(37,827
)
 
$
110,635

 
$
148,462

 
$
(28,102
)
 
$
120,360


(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 June 26, 2015 (in thousands):
Remainder of 2015
$
9,187

2016
18,186

2017
16,157

2018
14,638

2019
12,017

Thereafter
40,450

Total future amortization
$
110,635

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):
 
June 26,
2015
 
December 26,
2014
Undiscounted workers’ compensation reserve
$
261,582

 
$
256,220

Less discount on workers' compensation reserve
14,280

 
13,381

Workers' compensation reserve, net of discount
247,302

 
242,839

Less current portion
61,753

 
64,556

Long-term portion
$
185,549

 
$
178,283

LONG-TERM DEBT (Tables)
Schedule of Long-term Debt Instruments
The components of our borrowings were as follows (in thousands):
 
 
June 26,
2015
 
December 26, 2014
Revolving Credit Facility
 
$
73,494

 
$
171,994

Term Loan
 
28,523

 
29,656

Total debt
 
102,017

 
201,650

Less current portion
 
2,267

 
2,267

Long-term debt, less current portion
 
$
99,750

 
$
199,383

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):
 
June 26,
2015
 
December 26,
2014
Cash collateral held by insurance carriers
$
22,305

 
$
22,639

Cash and cash equivalents held in Trust
34,057

 
43,856

Investments held in Trust
94,598

 
90,095

Letters of credit (1)
6,731

 
6,513

Surety bonds (2)
16,905

 
16,861

Total collateral commitments
$
174,596

 
$
179,964



(1)
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 June 26, 2015 and December 26, 2014.
(2)
Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which are 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 awards and performance share units activity for the twenty-six weeks ended June 26, 2015, was as follows (shares in thousands):
 
Shares
 
Weighted- average grant-date price
Non-vested at beginning of period
1,547

 
$
20.03

Granted
487

 
$
22.11

Vested
(518
)
 
$
17.16

Forfeited
(265
)
 
$
14.87

Non-vested at the end of the period
1,251

 
$
22.44

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
 
Twenty-six weeks ended
 
June 26,
2015

June 27,
2014
 
June 26,
2015
 
June 27,
2014
Net income
$
17,273

 
$
16,082

 
$
22,989

 
$
17,739

 
 
 
 
 
 
 
 
Weighted average number of common shares used in basic net income per common share
41,240

 
40,739

 
41,135

 
40,655

Dilutive effect of outstanding stock options and non-vested restricted stock
235

 
230

 
337

 
279

Weighted average number of common shares used in diluted net income per common share
41,475

 
40,969

 
41,472

 
40,934

Net income per common share:
 
 
 
 
 
 
 
Basic
$
0.42

 
$
0.39

 
$
0.56

 
$
0.44

Diluted
$
0.42

 
$
0.39

 
$
0.55

 
$
0.43

 
 
 
 
 
 
 
 
Anti-dilutive shares
106

 
3

 
189

 
2

ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables)
Schedule of Comprehensive Income (Loss)
Changes in the balance of each component of accumulated other comprehensive income during the twenty-six weeks ended June 26, 2015 were as follows (in thousands):
 
Foreign currency translation adjustment
 
Unrealized gain on marketable securities (1)
 
Total other comprehensive income, net of tax
Balance at beginning of period
$
848

 
$
23

 
$
871

Current-period other comprehensive income (loss) (2)
(825
)
 
554

 
(271
)
Balance at end of period
$
23

 
$
577

 
$
600


(1)
Consists of deferred compensation plan accounts, which include mutual funds.
(2)
The tax impact on foreign currency translation adjustment and unrealized gain on marketable securities was de minimis for the period ending June 26, 2015.
SUPPLEMENTAL CASH FLOW INFORMATION (Tables)
Schedule of supplemental cash flow information
Supplemental disclosure of cash flow information (in thousands):
 
Twenty-six weeks ended
 
June 26, 2015
 
June 27, 2014
Cash paid during the period for:
 
 
 
Interest
$
1,863

 
$
540

Income taxes
$
3,939

 
$
5,820

SEGMENT INFORMATION (Tables)
Schedule of Segment Information
Revenue from services and income from operations associated with our segments were as follows (in thousands):
 
Thirteen weeks ended
 
Twenty-six weeks ended
 
June 26, 2015
 
June 27, 2014
 
June 26, 2015
 
June 27, 2014
Revenue from services
 
 
 
 
 
 
 
Staffing Services
$
601,103

 
$
453,227

 
$
1,150,815

 
$
849,290

Managed Services
26,611

 
—

 
50,214

 
—

Total Company
$
627,714

 
$
453,227

 
$
1,201,029

 
$
849,290

 
 
 
 
 
 
 
 
Income from operations
 
 
 
 
 
 
 
Staffing Services
$
38,834

 
$
32,195

 
$
63,117

 
$
47,739

Managed Services
4,326

 
—

 
7,750

 
—

Depreciation and amortization
(10,397
)
 
(5,247
)
 
(20,917
)
 
(10,408
)
Corporate unallocated
(9,053
)
 
(8,966
)
 
(18,517
)
 
(16,933
)
Total Company
23,710

 
17,982

 
31,433

 
20,398

Interest and other income (expense), net
(202
)
 
450

 
(736
)
 
794

Income before tax expense
$
23,508

 
$
18,432

 
$
30,697

 
$
21,192

FAIR VALUE MEASUREMENT (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 26, 2015
Dec. 26, 2014
Fair Value Measurement [Line Items]
 
 
Other restricted assets
$ 11,849 1
$ 9,972 1
Restricted investments classified as held-to-maturity
95,198 
91,066 
Certificate of deposits
 
 
Fair Value Measurement [Line Items]
 
 
Marketable securities classified as available-for-sale
 
1,500 2
Carrying Value
 
 
Fair Value Measurement [Line Items]
 
 
Cash and cash equivalents
21,288 3
19,666 3
Carrying Value |
Restricted Assets
 
 
Fair Value Measurement [Line Items]
 
 
Restricted cash and cash equivalents
58,226 3
68,359 3
Other restricted assets
11,849 4
9,972 4
Restricted investments classified as held-to-maturity
94,598 
90,095 
Total Fair Value
 
 
Fair Value Measurement [Line Items]
 
 
Cash and cash equivalents
21,288 3
19,666 3
Total Fair Value |
Certificate of deposits
 
 
Fair Value Measurement [Line Items]
 
 
Marketable securities classified as available-for-sale
 
1,500 2
Total Fair Value |
Restricted Assets
 
 
Fair Value Measurement [Line Items]
 
 
Restricted cash and cash equivalents
58,226 3
68,359 3
Other restricted assets
11,849 4
9,972 4
Restricted investments classified as held-to-maturity
95,198 
91,066 
Level 1
 
 
Fair Value Measurement [Line Items]
 
 
Cash and cash equivalents
21,288 3
19,666 3
Marketable securities classified as available-for-sale
 
0 2
Level 1 |
Restricted Assets
 
 
Fair Value Measurement [Line Items]
 
 
Restricted cash and cash equivalents
58,226 3
68,359 3
Other restricted assets
11,849 4
9,972 4
Restricted investments classified as held-to-maturity
0 
0 
Level 2
 
 
Fair Value Measurement [Line Items]
 
 
Cash and cash equivalents
0 3
0 3
Level 2 |
Restricted Assets
 
 
Fair Value Measurement [Line Items]
 
 
Restricted cash and cash equivalents
0 3
0 3
Other restricted assets
0 4
0 4
Restricted investments classified as held-to-maturity
95,198 
91,066 
Level 3
 
 
Fair Value Measurement [Line Items]
 
 
Cash and cash equivalents
0 3
0 3
Marketable securities classified as available-for-sale
 
   2
Level 3 |
Restricted Assets
 
 
Fair Value Measurement [Line Items]
 
 
Restricted cash and cash equivalents
0 3
0 3
Other restricted assets
0 4
0 4
Restricted investments classified as held-to-maturity
$ 0 
$ 0 
MARKETABLE SECURITIES - Available-for-sale Securities (Details) (Certificate of deposits, USD $)
Dec. 26, 2014
Schedule of Available-for-sale Securities [Line Items]
 
Fair Value
$ 1,500,000 1
Due in one year [Member]
 
Schedule of Available-for-sale Securities [Line Items]
 
Amortized Cost
$ 1,500,000 
RESTRICTED CASH AND INVESTMENTS (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 26, 2015
Dec. 26, 2014
Restricted Cash and Investments [Line Items]
 
 
Cash collateral held by insurance carriers
$ 22,305 
$ 22,639 
Cash and cash equivalents held in Trust
34,057 
43,856 
Investments held in Trust
94,598 
90,095 
Cash collateral backing letters of credit
1,864 
1,864 
Other
11,849 1
9,972 1
Restricted cash and investments
164,673 
168,426 
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract]
 
 
Amortized Cost
94,598 
90,095 
Gross Unrealized Gain
922 
1,218 
Gross Unrealized Loss
(322)
(247)
Fair Value
95,198 
91,066 
Held-to-maturity Securities, Investment Maturities, Amortized Cost [Abstract]
 
 
Amortized Cost
94,598 
90,095 
Held-to-maturity Securities, Investment Maturities, Fair Value [Abstract]
 
 
Fair Value
95,198 
91,066 
Municipal debt securities
 
 
Restricted Cash and Investments [Line Items]
 
 
Investments held in Trust
52,213 
52,406 
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract]
 
 
Amortized Cost
52,213 
52,406 
Gross Unrealized Gain
664 
882 
Gross Unrealized Loss
(155)
(92)
Fair Value
52,722 
53,196 
Held-to-maturity Securities, Investment Maturities, Amortized Cost [Abstract]
 
 
Amortized Cost
52,213 
52,406 
Held-to-maturity Securities, Investment Maturities, Fair Value [Abstract]
 
 
Fair Value
52,722 
53,196 
Corporate debt securities
 
 
Restricted Cash and Investments [Line Items]
 
 
Investments held in Trust
33,683 
27,715 
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract]
 
 
Amortized Cost
33,683 
27,715 
Gross Unrealized Gain
155 
179 
Gross Unrealized Loss
(134)
(144)
Fair Value
33,704 
27,750 
Held-to-maturity Securities, Investment Maturities, Amortized Cost [Abstract]
 
 
Amortized Cost
33,683 
27,715 
Held-to-maturity Securities, Investment Maturities, Fair Value [Abstract]
 
 
Fair Value
33,704 
27,750 
Asset-backed securities
 
 
Restricted Cash and Investments [Line Items]
 
 
Investments held in Trust
8,702 
9,974 
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract]
 
 
Amortized Cost
8,702 
9,974 
Gross Unrealized Gain
103 
157 
Gross Unrealized Loss
(33)
(11)
Fair Value
8,772 
10,120 
Held-to-maturity Securities, Investment Maturities, Amortized Cost [Abstract]
 
 
Amortized Cost
8,702 
9,974 
Held-to-maturity Securities, Investment Maturities, Fair Value [Abstract]
 
 
Fair Value
8,772 
10,120 
Restricted Cash and Investments
 
 
Restricted Cash and Investments [Line Items]
 
 
Investments held in Trust
94,598 
 
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract]
 
 
Amortized Cost
94,598 
 
Fair Value
95,198 
 
Held-to-maturity Securities, Investment Maturities, Amortized Cost [Abstract]
 
 
Due in one year or less
10,129 
 
Due after one year through five years
47,209 
 
Due after five years through ten years
37,260 
 
Amortized Cost
94,598 
 
Held-to-maturity Securities, Investment Maturities, Fair Value [Abstract]
 
 
Due in one year or less
10,200 
 
Due after one year through five years
47,407 
 
Due after five years through ten years
37,591 
 
Fair Value
$ 95,198 
 
PROPERTY AND EQUIPMENT, NET (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 26, 2015
Dec. 26, 2014
Property and Equipment, Net, by Type [Abstract]
 
 
Property and equipment, gross
$ 168,426 
$ 162,905 
Less accumulated depreciation and amortization
(111,621)
(101,513)
Property and equipment, net
56,805 
61,392 
Buildings and land
 
 
Property and Equipment, Net, by Type [Abstract]
 
 
Property and equipment, gross
30,992 
30,381 
Computers and software
 
 
Property and Equipment, Net, by Type [Abstract]
 
 
Property and equipment, gross
118,601 
115,419 
Furniture and equipment
 
 
Property and Equipment, Net, by Type [Abstract]
 
 
Property and equipment, gross
11,853 
11,690 
Construction in progress
 
 
Property and Equipment, Net, by Type [Abstract]
 
 
Property and equipment, gross
$ 6,980 
$ 5,415 
PROPERTY AND EQUIPMENT, NET (NARRATIVE) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 26, 2015
Jun. 27, 2014
Jun. 26, 2015
Jun. 27, 2014
Dec. 26, 2014
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Capitalized computer software, net
$ 25.8 
 
$ 25.8 
 
$ 30.2 
Depreciation expense
$ 5.8 
$ 3.7 
$ 11.2 
$ 7.4 
 
- Changes in Carrying Amount of Goodwill (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 26, 2015
Dec. 26, 2014
Goodwill [Line Items]
 
 
Goodwill before impairment
$ 288,065 
$ 288,065 
Accumulated impairment loss
(46,210)
(46,210)
Goodwill, net
241,855 
241,855 
Allocated goodwill
0 
 
Staffing Services
 
 
Goodwill [Line Items]
 
 
Goodwill before impairment
171,179 
128,449 
Accumulated impairment loss
(46,210)
(46,210)
Goodwill, net
124,969 
82,239 
Allocated goodwill
42,730 
 
Managed Services
 
 
Goodwill [Line Items]
 
 
Goodwill before impairment
116,886 
0 
Accumulated impairment loss
0 
0 
Goodwill, net
116,886 
0 
Allocated goodwill
116,886 
 
Unallocated Goodwill
 
 
Goodwill [Line Items]
 
 
Goodwill before impairment
0 
159,616 
Accumulated impairment loss
0 
0 
Goodwill, net
0 
159,616 
Allocated goodwill
$ (159,616)
 
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets Other Than Goodwill (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 26, 2015
Dec. 26, 2014
Amortizable intangible assets (1):
 
 
Gross Carrying Amount
$ 148,462 1
$ 148,462 1
Accumulated Amortization
(37,827)1
(28,102)1
Net Carrying Amount
110,635 1
120,360 1
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
Remainder of 2015
9,187 
 
2016
18,186 
 
2017
16,157 
 
2018
14,638 
 
2019
12,017 
 
Thereafter
40,450 
 
Net Carrying Amount
110,635 1
120,360 1
Customer relationships
 
 
Amortizable intangible assets (1):
 
 
Gross Carrying Amount
123,940 1
123,940 1
Accumulated Amortization
(29,709)1
(22,195)1
Net Carrying Amount
94,231 1
101,745 1
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
Net Carrying Amount
94,231 1
101,745 1
Trade names/trademarks
 
 
Amortizable intangible assets (1):
 
 
Gross Carrying Amount
4,422 1
4,422 1
Accumulated Amortization
(3,201)1
(2,878)1
Net Carrying Amount
1,221 1
1,544 1
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
Net Carrying Amount
1,221 1
1,544 1
Non-compete agreements
 
 
Amortizable intangible assets (1):
 
 
Gross Carrying Amount
1,800 1
1,800 1
Accumulated Amortization
(997)1
(817)1
Net Carrying Amount
803 1
983 1
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
Net Carrying Amount
803 1
983 1
Technologies
 
 
Amortizable intangible assets (1):
 
 
Gross Carrying Amount
18,300 1
18,300 1
Accumulated Amortization
(3,920)1
(2,212)1
Net Carrying Amount
14,380 1
16,088 1
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
Net Carrying Amount
$ 14,380 1
$ 16,088 1
GOODWILL AND INTANGIBLE ASSETS - Narrative Finite Intangibles (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 26, 2015
Jun. 27, 2014
Jun. 26, 2015
Jun. 27, 2014
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Amortization of intangible assets
$ 4.6 
$ 1.5 
$ 9.7 
$ 3.0 
GOODWILL AND INTANGIBLE ASSETS - Narrative Indefinite-lived Intangible Assets (Details) (Trademarks and Trade Names [Member], USD $)
In Millions, unless otherwise specified
Jun. 26, 2015
Trademarks and Trade Names [Member]
 
Indefinite-lived Intangible Assets [Line Items]
 
Indefinite-lived trade name/trademarks
$ 16.2 
WORKERS' COMPENSATION INSURANCE AND RESERVES - Reconciliation of Workers' Compensation Claims Reserve (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 26, 2015
Dec. 26, 2014
Workers' Compensation Deductible Limit [Line Items]
 
 
Undiscounted workers’ compensation reserve
$ 261,582 
$ 256,220 
Less discount on workers' compensation reserve
14,280 
13,381 
Workers' compensation reserve, net of discount
247,302 
242,839 
Less current portion
61,753 
64,556 
Long-term portion
$ 185,549 
$ 178,283 
WORKERS' COMPENSATION INSURANCE AND RESERVES - Narrative (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended 6 Months Ended 12 Months Ended
Jun. 26, 2015
Jun. 27, 2014
Jun. 26, 2015
Jun. 27, 2014
Dec. 26, 2014
Jun. 26, 2015
Below limit
Dec. 26, 2014
Below limit
Workers' Compensation Deductible Limit [Line Items]
 
 
 
 
 
 
 
Workers' compensation claim deductible limit
 
 
$ 2.0 
 
 
 
 
Weighted average rate
 
 
 
 
 
1.60% 
1.70% 
Weighted average period - claim payments below deductible limit
 
 
4 years 6 months 
 
 
 
 
Payments made against self-insured claims
 
 
34.4 
29.8 
 
 
 
Weighted average period - claim payments and receivables above deductible limit
 
 
14 years 8 months 12 days 
 
 
 
 
Excess claims
44.5 
 
44.5 
 
42.6 
 
 
Workers' compensation claim receivables net of valuation allowance
40.6 
 
40.6 
 
38.7 
 
 
Workers' compensation expense
$ 22.9 
$ 17.5 
$ 44.4 
$ 33.5 
 
 
 
LONG-TERM DEBT Summary of long-term debt (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 26, 2015
Dec. 26, 2014
Debt Instrument [Line Items]
 
 
Long-term debt
$ 102,017 
$ 201,650 
Long-term debt, less current portion
99,750 
199,383 
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
 
 
Debt Instrument [Line Items]
 
 
Long-term debt
73,494 
171,994 
Synovus Bank [Member]
 
 
Debt Instrument [Line Items]
 
 
Long-term debt
28,523 
29,656 
Long-term debt, current maturities
$ 2,267 
$ 2,267 
LONG-TERM DEBT Revolving Credit Facility Narrative (Details) (USD $)
0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended
Jun. 26, 2015
Dec. 26, 2014
Jun. 30, 2014
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Jun. 26, 2015
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Dec. 26, 2014
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Jun. 30, 2014
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Jun. 26, 2015
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Jun. 30, 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]
Jun. 30, 2014
Percent of Eligible Accounts Receivable [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Jun. 30, 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]
Jun. 30, 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]
Jun. 26, 2015
Liquidation Value of Tacoma Headquarters Office Building [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Jun. 26, 2015
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]
Jun. 26, 2015
London Interbank Offered Rate (LIBOR) [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Jun. 30, 2014
Base rate [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Jun. 26, 2015
Base rate [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Jun. 30, 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]
Jun. 30, 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]
Jun. 30, 2014
Minimum [Member]
Base rate [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Jun. 30, 2014
Maximum
London Interbank Offered Rate (LIBOR) [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Jun. 30, 2014
Maximum
Base rate [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Jun. 30, 2014
Less than 25% utilization [Member]
Bank of America, N.A. and Wells Fargo Capital Finance, LLC [Member]
Revolving Credit Facility [Member]
Jun. 30, 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]
Revolving Credit Facility [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving 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
 
 
 
 
 
 
 
 
 
 
 
16,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility, current borrowing capacity
 
 
 
 
 
 
261,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
102,017,000 
201,650,000 
 
73,494,000 
171,994,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility, amount outstanding
 
 
 
 
 
 
4,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility, remaining borrowing capacity
 
 
 
 
 
 
 
 
 
 
 
 
183,200,000 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility, cash and cash equivalents under control agreements
 
 
 
 
 
 
 
 
 
 
 
 
21,300,000 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility, total liquidity
 
 
 
 
 
 
 
 
 
 
 
 
204,500,000 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility, unused capacity, commitment fee percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.375% 
0.25% 
Debt Instrument, basis spread on variable rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.25% 
0.25% 
2.00% 
1.00% 
 
 
Revolving Credit Facility, liquidity requirement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 37,500,000 
 
 
 
 
 
 
Revolving Credit Facility, additional base rate
 
 
 
 
 
 
 
 
 
 
 
 
 
1.00% 
1.50% 
0.50% 
0.50% 
 
 
 
 
 
 
 
Revolving Credit Facility, interest rate description
 
 
one-month 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility, interest rate at period end
 
 
 
1.75% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility, utilization threshold
 
 
 
 
 
25.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Letters of Credit, additional basis rate
 
 
 
 
 
 
 
 
 
 
 
 
 
0.125% 
 
 
 
 
 
 
 
 
 
 
LONG-TERM DEBT Term Loan Agreement (Details) (USD $)
0 Months Ended
Feb. 4, 2013
extension
Jun. 26, 2015
Dec. 26, 2014
Debt Instrument [Line Items]
 
 
 
Long-term debt
 
$ 102,017,000 
$ 201,650,000 
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 
 
 
Term Loan, 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
 
1.68% 
 
Long-term debt
 
28,523,000 
29,656,000 
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 $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 26, 2015
Dec. 26, 2014
Workers' Compensation Commitments [Line Items]
 
 
Cash collateral held by insurance carriers
$ 22,305 
$ 22,639 
Cash and cash equivalents held in Trust
34,057 
43,856 
Investments held in Trust
94,598 
90,095 
Letters of credit
6,731 1
6,513 1
Surety bonds
16,905 2
16,861 2
Total collateral commitments
174,596 
179,964 
Cash collateral backing letters of credit
$ 1,864 
$ 1,864 
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
 
 
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
6 Months Ended
Jun. 26, 2015
Jun. 26, 2015
Restricted stock
Jun. 26, 2015
Performance shares
Jun. 26, 2015
Minimum
Restricted stock
Jun. 26, 2015
Maximum
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)
1,547,000 
 
 
 
 
 
Granted (in shares)
487,000 
 
 
 
 
 
Vested (in shares)
(518,000)
 
 
 
 
 
Forfeited (in shares)
(265,000)
 
 
 
 
 
Non-vested at the end of the period (in shares)
1,251,000 
 
 
 
 
 
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 start of the period (in dollars per share)
$ 20.03 
 
 
 
 
 
Granted (in dollars per share)
$ 22.11 
 
 
 
 
 
Vested (in dollars per share)
$ 17.16 
 
 
 
 
 
Forfeited (in dollars per share)
$ 14.87 
 
 
 
 
 
Non-vested at end of the period (in dollars per share)
$ 22.44 
 
 
 
 
 
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 
 
 
 
 
 
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options
 
$ 12.0 
$ 4.6 
 
 
 
Unrecognized stock-based compensation expense, period for recognition
 
1 year 9 months 11 days 
1 year 10 months 13 days 
 
 
 
STOCK-BASED COMPENSATION - Stock Option (Details) (Stock option)
6 Months Ended
Jun. 26, 2015
Stock option
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Option expiration period
7 years 
STOCK-BASED COMPENSATION - Employee Stock Purchase Plan (Details) (Employee stock purchase plan, USD $)
In Millions, except Share data, unless otherwise specified
6 Months Ended
Jun. 26, 2015
Jun. 27, 2014
Employee stock purchase plan
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
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 During Period, Shares, Employee Stock Purchase Plans
34,000 
30,000 
Proceeds from Issuance of Shares under Incentive and Share-based Compensation Plans, Excluding Stock Options
$ 0.7 
$ 0.7 
STOCK-BASED COMPENSATION - Stock-based compensation expense (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 26, 2015
Jun. 27, 2014
Jun. 26, 2015
Jun. 27, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
 
Total stock-based compensation expense
$ 2.4 
$ 1.9 
$ 5.8 
$ 5.0 
DEFINED CONTRIBUTION PLANS (Details) (USD $)
In Millions, unless otherwise specified
Jun. 26, 2015
Dec. 26, 2014
Compensation and Retirement Disclosure [Abstract]
 
 
Deferred compensation liability, current and noncurrent
$ 12.2 
$ 10.1 
INCOME TAXES - Narrative (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 26, 2015
Jun. 27, 2014
Dec. 26, 2014
Income Tax Disclosure [Abstract]
 
 
 
Effective Income Tax Rate Reconciliation, Percent
25.10% 
16.30% 
 
Discrete tax benefits
$ (3.7)
$ (5.0)
 
Effective Income Tax Rate Reconciliation, Expected Rate, Percent
0.373 
0.399 
 
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent
35.00% 
35.00% 
 
Unrecognized Tax Benefits
$ 2.1 
 
$ 2.0 
NET INCOME PER SHARE (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 26, 2015
Jun. 27, 2014
Jun. 26, 2015
Jun. 27, 2014
Earnings Per Share [Abstract]
 
 
 
 
Net income
$ 17,273 
$ 16,082 
$ 22,989 
$ 17,739 
Weighted average number of common shares used in basic net income per common share
41,240 
40,739 
41,135 
40,655 
Dilutive effect of outstanding stock options and non-vested restricted stock
235 
230 
337 
279 
Weighted average number of common shares used in diluted net income per common share
41,475 
40,969 
41,472 
40,934 
Net income per common share:
 
 
 
 
Basic (in dollars per share)
$ 0.42 
$ 0.39 
$ 0.56 
$ 0.44 
Diluted (in dollars per share)
$ 0.42 
$ 0.39 
$ 0.55 
$ 0.43 
Anti-dilutive shares
106 
3 
189 
2 
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 26, 2015
Jun. 27, 2014
Jun. 26, 2015
Jun. 27, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Foreign currency translation adjustment, net of tax
$ 587 
$ 333 
$ (825)
$ 89 
Unrealized gain (loss) on investments, net of tax
387 
406 
554 
453 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
 
Balance at beginning of period
 
 
871 
 
Current-period other comprehensive income
974 
739 
(271)1
542 
Balance at end of period
600 
 
600 
 
Foreign currency translation adjustment
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Foreign currency translation adjustment, net of tax
 
 
(825)1
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
 
Balance at beginning of period
 
 
848 
 
Balance at end of period
23 
 
23 
 
Unrealized gain (loss) on marketable securities
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Unrealized gain (loss) on investments, net of tax
 
 
554 1 2
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
 
Balance at beginning of period
 
 
23 
 
Balance at end of period
$ 577 
 
$ 577 
 
SUPPLEMENTAL CASH FLOW INFORMATION (Details) (USD $)
6 Months Ended
Jun. 26, 2015
Jun. 27, 2014
Cash paid during the period for:
 
 
Interest
$ 1,863,000 
$ 540,000 
Income taxes
3,939,000 
5,820,000 
Property, plant and equipment on account that was not yet paid
$ 200,000 
$ 400,000 
SEGMENT INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 26, 2015
Jun. 27, 2014
Jun. 26, 2015
Jun. 27, 2014
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
$ 627,714 
$ 453,227 
$ 1,201,029 
$ 849,290 
Depreciation and amortization
(10,397)
(5,247)
(20,917)
(10,408)
Income from operations
23,710 
17,982 
31,433 
20,398 
Interest and other income (expense), net
(202)
450 
(736)
794 
Income before tax expense
23,508 
18,432 
30,697 
21,192 
Corporate Segment
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Income from operations
(9,053)
(8,966)
(18,517)
(16,933)
Staffing Services
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
601,103 
453,227 
1,150,815 
849,290 
Income from operations
38,834 
32,195 
63,117 
47,739 
Managed Services
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
26,611 
0 
50,214 
0 
Income from operations
$ 4,326 
$ 0 
$ 7,750 
$ 0