TRUEBLUE, INC., 10-K filed on 2/20/2014
Annual Report
Document and Entity Information (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 27, 2013
Feb. 7, 2014
Jun. 28, 2013
Entity Information [Line Items]
 
 
 
Document Type
10-K 
 
 
Amendment Flag
false 
 
 
Document Period End Date
Dec. 27, 2013 
 
 
Document Fiscal Year Focus
2013 
 
 
Document Fiscal Period Focus
FY 
 
 
Trading Symbol
TBI 
 
 
Entity Registrant Name
TrueBlue, Inc. 
 
 
Entity Central Index Key
0000768899 
 
 
Current Fiscal Year End Date
--12-27 
 
 
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
 
41,101,622 
 
Entity Public Float
 
 
$ 834 
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Dec. 27, 2013
Dec. 28, 2012
Current assets:
 
 
Cash and cash equivalents
$ 122,003 
$ 129,513 
Marketable securities
14,745 
0 
Accounts receivable, net of allowance for doubtful accounts of $5,710 and $4,999
199,519 
167,292 
Prepaid expenses, deposits and other current assets
9,491 
8,541 
Income tax receivable
3,060 
6,373 
Deferred income taxes
7,640 
5,447 
Total current assets
356,458 
317,166 
Property and equipment, net
54,473 
58,171 
Restricted cash and investments
154,558 
136,259 
Deferred income taxes
4,213 
2,562 
Goodwill
82,239 
48,079 
Intangible assets, net
31,505 
16,554 
Other assets, net
36,015 
22,952 
Total assets
719,461 
601,743 
Current liabilities:
 
 
Accounts payable and other accrued expenses
29,850 
27,292 
Accrued wages and benefits
39,094 
35,102 
Current portion of workers' compensation claims reserve
49,942 
44,652 
Other current liabilities
2,523 
6,510 
Total current liabilities
121,409 
113,556 
Workers’ compensation claims reserve, less current portion
164,887 
150,937 
Note payable, less current portion
29,656 
0 
Other long-term liabilities
10,149 
3,576 
Total liabilities
326,101 
268,069 
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; 41,085 and 40,220 shares issued and outstanding
1 
1 
Accumulated other comprehensive income
2,033 
2,818 1
Retained earnings
391,326 
330,855 
Total shareholders’ equity
393,360 
333,674 
Total liabilities and shareholders’ equity
$ 719,461 
$ 601,743 
CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $)
In Thousands, except Share data, unless otherwise specified
Dec. 27, 2013
Dec. 28, 2012
Allowance for doubtful accounts
$ 5,710 
$ 4,999 
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
41,085,000 
40,220,000 
Common stock, shares outstanding
41,085,000 
40,220,000 
CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Revenue from services
$ 1,668,929 
$ 1,389,530 
$ 1,316,013 
Cost of services
1,226,626 
1,017,145 
968,967 
Gross profit
442,303 
372,385 
347,046 
Selling, general and administrative expenses
362,248 
300,459 
282,828 
Depreciation and amortization
20,472 
18,890 
16,384 
Income from operations
59,583 
53,036 
47,834 
Interest expense
(1,248)
(1,131)
(1,207)
Interest and other income
2,602 
2,700 
2,697 
Interest and other income, net
1,354 
1,569 
1,490 
Income (loss) before tax expense
60,937 
54,605 
49,324 
Income tax expense
16,013 
20,976 
18,533 
Net income
44,924 
33,629 
30,791 
Net income per common share:
 
 
 
Basic (in dollars per share)
$ 1.12 
$ 0.85 
$ 0.73 
Diluted (in dollars per share)
$ 1.11 
$ 0.84 
$ 0.73 
Weighted average shares outstanding:
 
 
 
Basic (in shares)
40,166 
39,548 
41,961 
Diluted (in shares)
40,502 
39,862 
42,322 
Foreign currency translation adjustment, net of tax
(689)
175 
(263)
Unrealized loss on investments, net of tax
(96)
0 
0 
Total other comprehensive income (loss), net of tax
(785)1
175 
(263)
Comprehensive income
$ 44,139 
$ 33,804 
$ 30,528 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $)
Total
Common stock
Retained earnings
Accumulated other comprehensive income
Beginning balance at Dec. 31, 2010
$ 312,707,000 
$ 1,000 
$ 309,800,000 
$ 2,906,000 
Beginning balance (in shares) at Dec. 31, 2010
 
44,086,000 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
Net income
30,791,000 
 
30,791,000 
 
Foreign currency translation adjustment, net of tax
(263,000)
 
 
(263,000)
Purchases and retirement of common stock
(56,932,000)
 
(56,932,000)
 
Purchases and retirement of common stock (in shares)
(4,455,000)
 
 
 
Issuances under equity plans, including tax benefits
(156,000)
 
(156,000)
 
Issuances under equity plans, including tax benefits (in shares)
302,000 
 
 
 
Stock-based compensation
7,432,000 
 
7,432,000 
 
Unrealized loss on investments, net of tax
0 
 
 
 
Ending balance at Dec. 30, 2011
293,579,000 
1,000 
290,935,000 
2,643,000 
Ending balance (in shares) at Dec. 30, 2011
 
39,933,000 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
Net income
33,629,000 
 
33,629,000 
 
Foreign currency translation adjustment, net of tax
175,000 
 
 
175,000 
Purchases and retirement of common stock
(4,386,000)
 
(4,386,000)
 
Purchases and retirement of common stock (in shares)
(306,000)
 
 
 
Issuances under equity plans, including tax benefits
2,760,000 
 
2,760,000 
 
Issuances under equity plans, including tax benefits (in shares)
593,000 
 
 
 
Stock-based compensation
7,917,000 
 
7,917,000 
 
Unrealized loss on investments, net of tax
0 
 
 
 
Ending balance at Dec. 28, 2012
333,674,000 
1,000 
330,855,000 
2,818,000 
Ending balance (in shares) at Dec. 28, 2012
40,220,000 
40,220,000 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
Net income
44,924,000 
 
 
44,924,000 
Foreign currency translation adjustment, net of tax
(689,000)
 
 
(689,000)
Purchases and retirement of common stock
0 
 
 
 
Purchases and retirement of common stock (in shares)
0 
 
 
 
Issuances under equity plans, including tax benefits
7,135,000 
 
7,135,000 
 
Issuances under equity plans, including tax benefits (in shares)
 
865,000 
 
 
Stock-based compensation
8,412,000 
 
8,412,000 
 
Unrealized loss on investments, net of tax
(96,000)
 
 
(96,000)
Ending balance at Dec. 27, 2013
$ 393,360,000 
$ 1,000 
$ 391,326,000 
$ 2,033,000 
Ending balance (in shares) at Dec. 27, 2013
41,085,000 
41,085,000 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Cash flows from operating activities:
 
 
 
Net income
$ 44,924 
$ 33,629 
$ 30,791 
Adjustments to reconcile net income to net cash from operating activities:
 
 
 
Depreciation and amortization
20,472 
18,890 
16,384 
Provision for doubtful accounts
12,063 
6,994 
6,638 
Stock-based compensation
8,412 
7,917 
7,432 
Deferred income taxes
(3,844)
3,091 
(1,910)
Other operating activities
2,116 
1,946 
(473)
Changes in operating assets and liabilities, net of acquisitions:
 
 
 
Accounts receivable
(4,181)
(20,408)
(51,824)
Income taxes
4,113 
(3,748)
3,513 
Other assets
(7,341)
(1,214)
(1,244)
Accounts payable and other accrued expenses
(3,592)
1,524 
5,423 
Accrued wages and benefits
(3,643)
(182)
10,793 
Workers’ compensation claims reserve
9,859 
3,746 
4,537 
Other liabilities
6,710 
138 
529 
Net cash provided by operating activities
86,068 
52,323 
30,589 
Cash flows from investing activities:
 
 
 
Capital expenditures
(13,003)
(17,826)
(9,707)
Acquisition of businesses, net of cash acquired
(77,560)
0 
0 
Purchases of marketable securities
(40,800)
0 
0 
Sales and maturities of marketable securities
20,050 
0 
0 
Change in restricted cash and cash equivalents
(16,122)
7,587 
68,504 
Purchases of restricted investments
(13,411)
(33,778)
(88,173)
Maturities of restricted investments
15,581 
18,116 
9,238 
Other
0 
(250)
(6,800)
Net cash used in investing activities
(125,265)
(26,151)
(26,938)
Cash flows from financing activities:
 
 
 
Purchases and retirement of common stock
0 
(4,386)
(56,932)
Net proceeds from stock option exercises and employee stock purchase plans
9,136 
4,164 
1,131 
Common stock repurchases for taxes upon vesting of restricted stock
(2,800)
(2,154)
(1,776)
Proceeds from note payable
34,000 
0 
0 
Payments on debt and other liabilities
(8,681)
(4,548)
(302)
Other
713 
751 
664 
Net cash provided by (used in) financing activities
32,368 
(6,173)
(57,215)
Effect of exchange rates on cash
(681)
203 
(278)
Net change in cash and cash equivalents
(7,510)
20,202 
(53,842)
CASH AND CASH EQUIVALENTS, beginning of period
129,513 
109,311 
163,153 
CASH AND CASH EQUIVALENTS, end of period
$ 122,003 
$ 129,513 
$ 109,311 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING PRINCIPLES AND PRACTICES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of business
TrueBlue, Inc. (“TrueBlue,” “we,” “us,” “our”) is a leading provider of temporary blue-collar staffing services. We help over 130,000 businesses be more productive through easy access to dependable temporary labor. We provide a wide range of specialized blue-collar staffing services to industries that include construction, manufacturing, transportation, waste, hospitality, retail, energy, and many more. We operate as: Labor Ready for general labor, Spartan Staffing for light industrial, CLP Resources for skilled trades, PlaneTechs for aviation and diesel mechanics and technicians, and Centerline Drivers for dedicated and temporary drivers. We have a network of 757 branches in all 50 states, Puerto Rico and Canada. We also have customer on-site locations, which are generally dedicated to one customer, and national service centers that supply our customers with temporary workers.
We began operations in 1989 under the name Labor Ready, Inc. providing on-demand, general labor staffing services. We became a public company in 1995. In 2004 we began acquiring additional brands to expand our service offerings to customers in the blue-collar staffing market. Effective December 18, 2007, Labor Ready, Inc. changed its name to TrueBlue, Inc. We are headquartered in Tacoma, Washington.
Basis of presentation
The consolidated financial statements include the accounts of TrueBlue, Inc. and all of its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Our TrueBlue service lines are our operating segments and are aggregated into one reportable segment in accordance with U.S. GAAP. Our operations are all in the blue-collar staffing market of the temporary staffing industry and supply customers with temporary workers. All our service lines have the following similar characteristics:
•
They provide blue-collar temporary labor services;
•
They serve customers who have a need for temporary staff to perform tasks, which do not require a permanent employee;
•
They each build a temporary workforce through recruiting, screening, and hiring. Temporary workers are dispatched to customers where they work under the supervision of our customers;
•
They each drive profitability by managing the bill rates to our customers and the pay rates to our workers. Profitable growth is also driven by leveraging our cost structure across all service lines.
Our long-term performance expectations of all our service lines are similar as are the underlying financial and economic metrics used to manage those service lines.
Our international operations are not significant to our total operations for segment reporting purposes. Total revenues from our international operations were 3.1%, 3.5%, and 3.8% of our total revenues for fiscal years ending 2013, 2012, and 2011, respectively.
Fiscal year end
Our fiscal year ends on the last Friday of December.
Revenue recognition
Revenue from temporary staffing services is recognized at the time the service is provided and is net of adjustments related to customer credits. Revenue also includes billable travel and other reimbursable costs. Customer discounts or other incentives are recognized in the period the related revenue is earned. We discontinued the use of all domestic cash dispensing machines in fiscal 2012. Revenues are reported net of sales, use, or other transaction taxes collected from customers and remitted to taxing authorities.
We record revenue on a gross basis as a principal versus on a net basis as an agent in the consolidated statement of operations. We have determined that gross reporting as a principal is the appropriate treatment based upon the following key factors:
•
We maintain the direct contractual relationship with the customer.
•
We have discretion in selecting and assigning the temporary workers to particular jobs and establishing their billing rate.
•
We bear the risk and rewards of the transaction including credit risk if the customer fails to pay for services performed.
Cost of services
Cost of services primarily includes wages of temporary workers and related payroll taxes and workers’ compensation expenses. Cost of services also includes billable travel and other reimbursable costs.
Advertising costs
Advertising costs consist primarily of print and other promotional activities. We expense advertisements as of the first date the advertisements take place. Advertising expenses included in selling, general and administrative expenses were $4.0 million, $3.7 million, and $3.6 million in 2013, 2012, and 2011, respectively.
Cash and cash equivalents and marketable securities
We consider all highly liquid instruments purchased with an original maturity of three months or less at date of purchase to be cash equivalents. Investments with original maturities greater than three months are classified as marketable securities. Our marketable securities consist of certificates of deposit ("CDs"), variable-rate demand notes ("VRDNs"), and commercial paper. All of our marketable securities are classified as available-for-sale and are reported at fair value, with any unrealized gains and losses, net of tax, recorded in Other comprehensive income (loss). We do not buy and hold securities principally for the purpose of selling them in the near future. Our investment policy is focused on the preservation of capital, liquidity and return. From time to time, we may sell certain securities but the objectives are generally not to generate profits on short-term differences in price. We manage our cash equivalents and marketable securities as a single portfolio of highly liquid securities.
Accounts receivable and allowance for doubtful accounts
Accounts receivable are recorded at the invoiced amount together with interest for certain past due accounts. We establish an allowance for doubtful accounts for estimated losses resulting from the failure of our customers to make required payments. The allowance for doubtful accounts is determined based on current collection efforts, historical collection trends, write-off experience, customer credit risk, and current economic data. The allowance for doubtful accounts is reviewed quarterly and represents our best estimate of the amount of probable credit losses. Past due balances are written-off when it is probable the receivable will not be collected. Our allowance for doubtful accounts was $5.7 million and $5.0 million as of December 27, 2013 and December 28, 2012, respectively.
Restricted cash and investments
Cash and investments pledged as collateral and restricted to use for workers' compensation insurance programs are included as restricted cash and investments on our Consolidated Balance Sheets. Our investments consist of highly rated investment grade debt securities which are rated A or higher by nationally recognized statistical rating organizations. We have the positive intent and ability to hold all these investments until maturity in accordance with our investment policy and accordingly all of our investments are classified as held-to-maturity. In the event that an investment is downgraded, it is replaced with a highly rated investment grade security. We review for impairment on a quarterly basis and do not consider temporary unrealized losses to be impaired.
In 2011, we entered into an agreement with AIG and the Bank of New York Mellon creating a trust ("Trust"), which holds the majority of our collateral obligations under existing workers' compensation insurance policies. Placing the collateral in the Trust allows us to manage the investment of the assets and provides greater protection of those assets.
Fair value of financial instruments and investments
The carrying value of cash and cash equivalents and restricted cash approximates fair value because of the short-term maturity of those instruments. The fair value of our restricted investments is based upon the quoted market price on the last business day of the fiscal reporting period. Where an observable quoted market price for a security does not exist, we estimate fair value using a variety of valuation methodologies, which include observable inputs for comparable instruments and unobservable inputs. There are inherent limitations when estimating the fair value of financial instruments and the fair values reported are not necessarily indicative of the amounts that would be realized in current market transactions.
Property and equipment
Property and equipment are recorded at cost. We compute depreciation using the straight-line method over the estimated useful lives of the assets.
 
Years  
Buildings
40
Computers and software
3 - 10    
Furniture and equipment
3 - 10    

Leasehold improvements are amortized over the shorter of the related non-cancelable lease term, which is typically 90 days, or their estimated useful lives.
Non-capital expenditures associated with opening new branch locations are expensed as incurred.
When property is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss, net of proceeds, is reflected in the Consolidated Statements of Operations & Comprehensive Income.
Repairs and maintenance costs are charged directly to expense as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated.
Costs associated with the acquisition or development of software for internal use are capitalized and amortized over the expected useful life of the software, from three to ten years. A subsequent addition, modification, or upgrade to internal-use software is capitalized to the extent that it enhances the software's functionality or extends its useful life. Software maintenance and training costs are expensed in the period incurred.
Leases
We conduct our branch office operations from leased locations. The leases require payment of real estate taxes, insurance and common area maintenance, in addition to rent. The terms of our lease agreements generally range from three to five years with options to cancel with 90 day notification. Most of the leases contain renewal options and escalation clauses.
For leases that contain predetermined fixed escalations of the minimum rent, we recognize the related rent expense on a straight-line basis from the date we take possession of the property to the end of the minimum lease term. We record any difference between the straight-line rent amounts and amounts payable under the leases as part of deferred rent, in accrued liabilities or long-term liabilities, as appropriate.
Cash or lease incentives received upon entering into certain branch leases ("tenant allowances") are recognized on a straight-line basis as a reduction to rent from the date we take possession of the property through the end of the initial lease term. We record the unamortized portion of tenant allowances as a part of deferred rent, in accrued liabilities or long-term liabilities, as appropriate.
Goodwill and intangible assets
Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. We allocated goodwill to reporting units based on the reporting units that are expected to benefit from the business combination. We do not amortize goodwill but test it for impairment annually as of the last day of our fiscal third quarter, or when indications of potential impairment exist. We monitor the existence of potential impairment indicators throughout the fiscal year.
We test for goodwill impairment at the reporting unit level. We consider our service lines; Labor Ready, Spartan Staffing, CLP Resources, PlaneTechs and Centerline; to be reporting units for goodwill impairment testing. In fiscal 2013, 2012, and 2011, there were no changes to our reporting units.
The impairment test involves comparing the fair value of each reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit. If the fair value exceeds carrying value, then we conclude that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its fair value, a second step is required to measure possible goodwill impairment loss. The second step includes hypothetically valuing the tangible and intangible assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit's goodwill is compared to the carrying value of that goodwill. If the carrying value of the reporting unit's goodwill exceeds the implied fair value of the goodwill, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value.
Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions to evaluate the impact of operating and macroeconomic changes on each reporting unit. The fair value of each reporting unit is estimated using a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested. We also identify similar publicly traded companies and develop a correlation, referred to as a multiple, to apply to the operating results of the reporting units. The primary market multiples we compare to are revenue and earnings before interest, taxes, depreciation, and amortization. These combined fair values are then reconciled to our aggregate market value of our shares of common stock on the date of valuation, while considering a reasonable control premium. We base fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates.
The blue-collar staffing market is subject to volatility based on overall economic conditions. As a consequence, our revenues tend to increase quickly when the economy begins to grow. Conversely, our revenues also decrease quickly when the economy begins to weaken, as occurred during the most recent recession. If actual results were to significantly deviate from management's estimates and assumptions of future performance, we could experience a material impairment to our goodwill.
We have indefinite-lived intangible assets related to our CLP Resources and Spartan Staffing trade names. We test our indefinite-lived intangible assets annually for impairment, or when indications of potential impairment exist. We utilize the relief from royalty method to determine the fair value of each of our trade names. If the carrying value exceeds the fair value, we recognize an impairment loss in an amount equal to the excess. Considerable management judgment is necessary to determine key assumptions, including projected revenue, royalty rates, and appropriate discount rates.
Long-lived asset impairment
Long-lived assets include property and equipment and definite-lived intangible assets. Definite-lived intangible assets consist of customer relationships, trade names and non-compete agreements. Long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Factors considered important that could result in an impairment review include, but are not limited to, significant under performance relative to historical or planned operating results, significant changes in the manner of use of the assets or significant changes in our business strategies. Long-lived assets are grouped at the lowest level at which identifiable cash flows are largely independent when assessing impairment. Our branch assets, including property and equipment, and customer relationship intangibles, are grouped and evaluated at the individual branch level. All other property and equipment and definite-lived intangibles are grouped at either the service line or corporate level as appropriate based on the identifiable cash flows. An impairment loss is recognized when the estimated undiscounted cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset (if any) are less than the carrying value of the asset. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value based on quoted market prices or other valuation techniques (e.g., discounted cash flow analysis). Considerable management judgment is necessary to estimate future after-tax cash flows, including cash flows from continuing use and terminal value. Accordingly, actual future results could vary from our estimates.
Branch closures and exit costs
We routinely evaluate our branch network and close under-performing branches. We classify closed branches in discontinued operations when the operations and cash flows of the branch have been or will be eliminated from ongoing operations. To determine if cash flows have been or will be eliminated from ongoing operations, we evaluate a number of qualitative and quantitative factors, including, but not limited to, proximity to remaining open branches and estimates of revenue migration from the closed branch to any branch remaining open. The estimated revenue migration is based on historical estimates of our revenue migration upon opening or closing a branch in a similar market. Branch closings meeting the criteria for discontinued operations were not material, individually or cumulatively, for any reporting year presented. Assets related to planned branch closures or other exit activities are evaluated for impairment in accordance with our impairment policy, giving consideration to revised estimates of future cash flows.
Workers’ compensation reserves
We maintain reserves for workers’ compensation claims using actuarial estimates of the future cost of claims and related expenses. These estimates include claims that have been reported but not settled and claims that have been incurred but not reported. These reserves, which reflect potential liabilities to be paid in future periods based on estimated payment patterns, are discounted to estimated net present value using discount rates based on average returns of “risk-free” U.S. Treasury instruments, which are evaluated on a quarterly basis. We evaluate the reserves regularly throughout the year and make adjustments accordingly. If the actual cost of such claims and related expenses exceed the amounts estimated, additional reserves may be required. Changes in reserve estimates are reflected in the Consolidated Statements of Operations & Comprehensive Income in the period when the changes in estimates are made.
Our workers’ compensation reserves include estimated expenses related to claims above our self-insured limits (“excess claims”) and a corresponding receivable for the insurance coverage on excess claims based on the contractual policy agreements we have with insurance companies. We discount the liability and its corresponding receivable to its estimated net present value using the “risk-free” rates associated with the actuarially determined weighted average lives of our excess claims. When appropriate, based on our best estimate, we record a valuation allowance against the insurance receivable to reflect amounts that may not be realized.
Reserves for contingent legal and regulatory liabilities
From time to time we are subject to compliance audits by federal, state and local authorities relating to a variety of regulations including wage and hour laws, taxes, workers’ compensation, immigration, and safety. From time to time we are also subject to legal proceedings in the ordinary course of our operations. We establish reserves for contingent legal and regulatory liabilities when our management determines that it is probable that a legal claim will result in an adverse outcome and the amount of liability can be reasonably estimated. To the extent that an insurance company is contractually obligated to reimburse us for a liability, we record a receivable for the amount of the probable reimbursement. We evaluate our reserve regularly throughout the year and make adjustments as needed. If the actual outcome of these matters is different than expected, an adjustment is charged or credited to expense in the period the outcome occurs or the period in which the estimate changes.
Income taxes and related valuation allowance
We account for income taxes by recording taxes payable or receivable for the current year and deferred tax assets and liabilities for the future tax consequences of events that have been recognized in our financial statements or tax returns. These expected future tax consequences are measured based on provisions of tax law as currently enacted; the effects of future changes in tax laws are not anticipated. Future tax law changes, such as changes to the federal and state corporate tax rates and the mix of states and their taxable income, could have a material impact on our financial condition or results of operations. When appropriate, we record a valuation allowance against deferred tax assets to offset future tax benefits that may not be realized. In determining whether a valuation allowance is appropriate, we consider whether it is more likely than not that all or some portion of our deferred tax assets will not be realized, based in part upon management’s judgments regarding future events and past operating results. Based on that analysis, we have determined that a valuation allowance is appropriate for certain foreign net operating losses and state tax credits that we expect will not be utilized within the permitted carry forward periods as of December 27, 2013 and December 28, 2012.
Stock-based compensation
Under various plans, officers, employees and non-employee directors have received or may receive grants of stock, restricted stock awards, performance share units, or options to purchase common stock. We also have an employee stock purchase plan (“ESPP”).
Compensation expense for restricted stock awards and performance share units is generally recognized on a straight-line basis over the vesting period, based on the stock’s fair market value on the grant date. For restricted stock grants issued with performance conditions, compensation expense is recognized over each vesting period based on assessment of the likelihood of meeting these conditions. We recognize compensation expense for only the portion of restricted stock and performance share units that is expected to vest, rather than record forfeitures when they occur. If the actual number of forfeitures differs from those estimated by management, additional adjustments to compensation expense may be required in the future periods. We determine the fair value of options to purchase common stock using the Black-Scholes valuation model, which requires the input of subjective assumptions. We recognize expense over the service period for options that are expected to vest and record adjustments to compensation expense at the end of the service period if actual forfeitures differ from original estimates.
Foreign currency
Cumulative foreign currency translation adjustments relate to our consolidated foreign subsidiary. Assets and liabilities recorded in foreign currencies are translated at the applicable exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the year.
Purchases and retirement of our common stock
Purchases of our common stock are not displayed separately as treasury stock on the Consolidated Balance Sheets in accordance with the Washington Business Corporation Act, which requires the retirement of purchased shares. As a result, shares of our common stock that we purchase are retired immediately. It is our accounting policy to first record these purchases as a reduction to our common stock account. Once the common stock account has been reduced to a nominal balance, remaining purchases are recorded as a reduction to our Retained earnings account. Furthermore, activity in our common stock account related to stock-based compensation is also recorded to Retained earnings until such time as the reduction to Retained earnings due to stock repurchases has been recovered.
Shares outstanding
Shares outstanding include shares of unvested restricted stock. Unvested restricted stock included in reportable shares outstanding was 0.7 million and 0.6 million shares as of December 27, 2013 and December 28, 2012, respectively. Shares of unvested restricted stock are excluded from our calculation of basic weighted average shares outstanding, but their dilutive impact is added back in the calculation of diluted weighted average shares outstanding.
Use of estimates
Preparing financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Examples include, but are not limited to, allowance for doubtful accounts, estimates for asset and goodwill impairments, stock-based performance awards, assumptions underlying self-insurance reserves, and the potential outcome of future tax consequences of events that have been recognized in the financial statements. Actual results and outcomes may differ from these estimates and assumptions.
Recently issued accounting pronouncements not yet adopted
In July 2013, the FASB issued authoritative guidance for the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent when, for certain reasons, it is not available. The guidance will be effective for our first quarter of fiscal 2014. Management does not expect the adoption of this guidance to have a material impact on our financial statements.
ACQUISITION
ACQUISITIONS
ACQUISITIONS
We account for our business acquisitions using the purchase method of accounting. The fair value of the net assets acquired and the results of the acquired business are included in the financial statements from the acquisition date forward. We are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and results of operations during the reporting period. Estimates are used in accounting for, among other things, the fair value of acquired net operating assets, property and equipment, intangible assets, useful lives of property and equipment and amortizable lives for acquired intangible assets. Any excess of the purchase consideration over the identified fair value of the assets acquired and liabilities assumed is recognized as goodwill. All acquisition related costs are expensed as incurred and recorded in operating expenses. Additionally, we recognize liabilities for anticipated restructuring costs that will be necessary due to the elimination of excess capacity, redundant assets, or unnecessary functions and record them as operating expenses. We estimate the preliminary fair value of acquired assets and liabilities as of the date of acquisition based on information available at that time. The valuation of these tangible and identifiable intangible assets and liabilities is subject to further management review and may change between the preliminary allocation and the final allocation. Any changes to these estimates may have a material impact on our operating results or financial condition. The excess of the purchase price over the estimated fair values of the net assets acquired was recorded as goodwill and are entirely deductible for tax purposes.
MDT Personnel, LLC
Effective February 4, 2013, we acquired substantially all of the assets and assumed certain liabilities of MDT Personnel, LLC and its subsidiaries ("MDT") for $53.4 million in cash. Assets acquired included finite-lived intangible assets of $10.2 million. The excess of the purchase price over the estimated fair values of the net assets acquired in the amount of $25.7 million was recorded as goodwill and primarily represents synergies with our existing business, the acquired assembled workforce, and potential new customers. Through its network of 105 branches in 25 states, MDT supplied blue-collar labor to industries similar to those served by TrueBlue, including construction, event staffing, disaster recovery, hospitality, and manufacturing.
We incurred acquisition and integration-related costs of $6.0 million.We have fully integrated and blended MDT's operations with our existing service lines. MDT was primarily integrated into the Labor Ready service line. The integration of the MDT sales and branch operations was completed during the first quarter of 2013. We consolidated 65 branches, blended our sales and service teams and fully integrated all former MDT locations into our enterprise systems to optimize our combined operational efficiencies during the first quarter of 2013. We completed the integration of all remaining administrative services during the second quarter of 2013. These activities consisted of integrating our branch network capacity, sales and services teams and infrastructure and included closing, consolidating and relocating certain branch offices and administrative operations, eliminating redundant assets, and reducing excess administrative workforce and capacity. These integration costs are included in Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income and Cash flows from operating activities in the Consolidated Statements of Cash Flows for the year ended December 27, 2013.
Purchase price allocation
The following table summarizes the final allocation of the MDT purchase price, based on the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date of February 4, 2013 (in millions):
 
 
Purchase Price Allocation
Cash
 
$
0.4

Accounts receivable (1)
 
29.9

Prepaid expenses, deposits and other current assets
 
0.6

Property and equipment
 
0.3

Restricted cash
 
6.9

Intangible assets
 
10.2

  Total assets acquired
 
48.3

 
 
 
Accounts payable and other accrued expenses
 
6.3

Accrued wages and benefits
 
4.8

Workers' compensation claims reserve
 
9.4

Other long-term liabilities
 
0.1

  Total liabilities assumed
 
20.6

 
 
 
Net identifiable assets acquired
 
27.7

Goodwill
 
25.7

  Net assets acquired
 
$
53.4

(1)
The gross contractual amount of accounts receivable was $32.9 million of which $3.0 million was estimated to be uncollectible.

Intangible assets include identifiable intangible assets for customer relationships, the trade name/trademarks and a non-compete agreement. We estimated the fair value of the acquired identifiable intangible assets, which are subject to amortization using the income approach. No residual value is estimated for any of the intangible assets. The following table sets forth the components of identifiable intangible assets and their estimated useful lives as of February 4, 2013 (in millions, except for estimated useful lives, in years):
 
Estimated Fair Value
 
Estimated Useful Life
Customer relationships
$
7.8

 
8.0
Trade name/trademarks
$
1.0

 
1.5
Non-compete agreement
$
1.4

 
5.0

The acquired assets and liabilities of MDT are included in our Consolidated Balance Sheets as of December 27, 2013 and the results of its operations and cash flows are reported in our Consolidated Statements of Operations and Comprehensive Income and Consolidated Statements of Cash Flows from February 4, 2013.
MDT operations have been fully integrated with our existing operations and our customers, temporary workforce, field employees, and locations have been merged. The nature of the customers and the services provided by TrueBlue and the former MDT are substantially the same. We competed in the marketplace for the same customers, temporary workers, and sales and service personnel. Accordingly, subsequent to merging our operations, it is not possible to segregate and to accurately estimate the revenues and expenses related exclusively to the former MDT operations.
Pro forma financial information (unaudited)
The following table reflects the pro forma consolidated results of operations for the periods presented, as though the acquisition of MDT had occurred as of the beginning of the period being reported on, after giving effect to related income taxes.
The pro forma financial information combines our results of operations with the unaudited financial information of MDT used by MDT management for internal reporting purposes. Any changes required by an audit of the MDT financial information could be material. The unaudited pro forma financial information presented is for illustrative purposes only and is not indicative of the results of operations that would have been realized if the acquisition had been completed on the dates indicated, nor is it indicative of future operating results.
The unaudited pro forma consolidated results of operations do not include, among other items, the effects of potential losses in gross profit due to revenue attrition from combining the two companies, and differences in our operating costs structure. It does include differences in workers' compensation and certain payroll taxes for temporary employees, and amortization of finite-lived intangible assets. 2013 pro forma net income was adjusted to exclude $6.0 million of acquisition and integration-related costs incurred in 2013. 2012 pro forma earnings were adjusted to include these charges. 
Pro forma financial data (unaudited) is presented below (in millions, except per share data).
 
2013
 
2012
Revenue from services
$
1,693.1

 
$
1,612.5

Net income
$
49.0

 
$
25.9

Net income per common share - diluted
$
1.21

 
$
0.65


The Work Connection, Inc.
Effective October 1, 2013, we acquired certain assets and liabilities of The Work Connection, Inc. ("TWC"). TWC was founded in 1986 and provided light industrial services out of 37 branches in nine states. This acquisition provides us geographic expansion into new markets for our Spartan Staffing service line. TWC’s operations were integrated with those of our Spartan Staffing service line during the fourth quarter ended December 27, 2013. The acquisition of TWC was not material individually or in the aggregate to our consolidated results of operations and as such, pro forma financial statements were not required. The total cost of the acquisition was $22.7 million. We incurred acquisition and integration-related costs of $1.2 million for the purchase of TWC. Assets acquired included finite-lived intangible assets of $8.2 million. The excess of the purchase price over the estimated fair values of the net assets acquired in the amount of $7.6 million was recorded as goodwill and primarily represents synergies with our existing business, acquired assembled workforce, and potential new customers.
The following table summarizes the final allocation of the TWC purchase price, based on the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date of October 1, 2013 (in millions):
 
 
Purchase Price Allocation
Accounts receivable (1)
 
$
10.2

Plant and equipment
 
0.2

Intangible assets
 
8.2

  Total assets acquired
 
18.6

 
 
 
Accounts payable
 
0.6

Accrued wages and benefits
 
2.9

  Total liabilities assumed
 
3.5

 
 
 
Net identifiable assets acquired
 
15.1

Goodwill
 
7.6

  Net assets acquired
 
$
22.7

(1)
The gross contractual amount of accounts receivable was $10.4 million of which $0.2 million was estimated to be uncollectible.

Other immaterial acquisition
We acquired certain assets of Crowley Transportation Services, LLC ("CTS") in June 2013. The total cost of the acquisition was $2.4 million, including contingent consideration of $0.6 million. The acquisition of CTS was not material individually or in the aggregate to our consolidated results of operations and as such, pro forma financial statements were not required.
See Note 7 to the consolidated financial statements for further discussion of goodwill and intangible assets acquired during 2013.
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 primarily consist of CDs, VRDNs, commercial paper, and restricted investments, which primarily 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 A- or higher 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 currently have no Level 3 assets or liabilities.
The carrying value of our accounts receivable and accounts payable approximates fair value due to their short-term nature. We also hold certain restricted investments, which collateralize workers' compensation programs and are classified as held-to-maturity and carried at amortized cost on our Consolidated Balance Sheets.
The following tables present the fair value and hierarchy for our financial assets (in millions):
 
December 27, 2013
 
Carrying Value
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents (1)
$
122.0

 
$
122.0

 
$
122.0

 
$
—

 
$
—

Marketable securities classified as available-for-sale (2)
20.7

 
20.7

 
—

 
20.7

 
—

Restricted cash and cash equivalents (1)
57.1

 
57.1

 
57.1

 
—

 
—

Other restricted assets (3)
10.8

 
10.8

 
10.8

 
—

 
—

Restricted investments classified as held-to-maturity (4)
86.7

 
86.9

 
—

 
86.9

 
—

 
December 28, 2012
 
Carrying Value
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents (1)
$
129.5

 
$
129.5

 
$
129.5

 
$
—

 
$
—

Restricted cash and cash equivalents (1)
38.1

 
38.1

 
38.1

 
—

 
—

Other restricted assets (3)
7.0

 
7.0

 
7.0

 
—

 
—

Restricted investments classified as held-to-maturity (4)
91.2

 
92.7

 
—

 
92.7

 
—


(1)
Cash equivalents and restricted cash equivalents consist of money market funds, deposits, and investments with original maturities of three months or less.
(2)
Marketable securities include CDs, VRDNs, and commercial paper, which are classified as available-for-sale. Our CDs include $6.0 million with maturities greater than one year and are classified as Other assets on our Consolidated Balance Sheets. VRDNs with contractual maturities beyond one year are classified as short-term based on their highly liquid nature and because they represent the investment of cash that is available for current operations. Despite the long-term nature of their stated contractual maturities, we routinely buy and sell these securities and believe we have the ability to quickly sell them to the re-marketing agent at par value plus accrued interest in the event we decide to liquidate our investment in a particular VRDN.
(3)
Primarily consists of restricted cash in money market accounts and deferred compensation plan accounts, which are comprised of mutual funds.
(4)
Restricted investments classified as held-to-maturity consist of highly rated investment grade securities, primarily in municipal-debt securities, corporate-debt securities, asset-backed securities, and U.S. agency debentures.
MARKETABLE SECURITIES
MARKETABLE SECURITIES
MARKETABLE SECURITIES

Marketable securities consist of CDs, VRDNs, and commercial paper, which are classified as available-for-sale. VRDNs are long-term municipal and corporate securities with an interest rate that is reset frequently. All of the VRDNs currently in our portfolio are backed by a bank Letter of Credit. Our VRDNs may be tendered at any time with a typical settlement date of less than one week. We did not hold any marketable securities at December 28, 2012.
The following table presents the amortized cost and fair value of our available-for-sale investments, which are carried at fair value (in millions):
 
December 27, 2013
 
Amortized Cost
 
Fair Value
Certificates of deposit
$
10.0

 
$
9.9

Variable-rate demand notes
5.8

 
5.8

Commercial paper
5.0

 
5.0

 
$
20.8

 
$
20.7


Gross unrealized gains and loss were de minimis for the year ended December 27, 2013. We held no available-for-sale securities during the year ended December 28, 2012. Our marketable securities have not resulted in any other-than-temporary impairments for the year ended December 27, 2013.
The amortized cost and fair value by contractual maturity of our available-for-sale investments are as follows (in millions):
 
December 27, 2013
 
Amortized Cost
 
Fair Value
Due in one year or less (1)
$
14.8

 
$
14.7

Due after one year (2)
6.0

 
6.0

 
$
20.8

 
$
20.7



(1)
Amounts due in one year or less include CDs, VRDNs, and commercial paper. The VRDNs have contractual terms ranging from two to 19 years. Although these securities are issued as long-term securities, they are priced and traded as short-term instruments because of the high liquidity provided through the tender feature. It is not our intent to hold to maturity.
(2)
Amounts due after one year include CDs with maturities between one and two years and are recorded in Other assets on the Consolidated Balance Sheets.
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, asset-backed securities, and U.S. agency debentures. Our investments have not resulted in any other-than-temporary impairments.
The following is a summary of restricted cash and investments (in millions):
 
December 27,
2013
 
December 28,
2012
Cash collateral held by insurance carriers
$
23.7

 
$
21.5

Cash and cash equivalents held in Trust (1)
31.5

 
14.8

Investments held in Trust
86.7

 
91.2

Cash collateral backing letters of credit
1.9

 
1.8

Other (2)
10.8

 
7.0

Total restricted cash and investments
$
154.6

 
$
136.3


(1)
Included in this amount is $0.8 million and $0.9 million of accrued interest at December 27, 2013 and December 28, 2012, respectively.
(2)
Primarily consists of restricted cash in money market accounts and 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 millions):
 
December 27, 2013
 
Amortized Cost
 
Gross Unrealized Gain
 
Gross Unrealized Loss
 
Fair Value
Municipal debt securities
$
54.1

 
$
0.7

 
$
(0.4
)
 
$
54.4

Corporate debt securities
19.7

 
0.2

 
(0.3
)
 
19.6

Asset-backed securities
12.9

 
0.1

 
(0.1
)
 
12.9

 
$
86.7

 
$
1.0

 
$
(0.8
)
 
$
86.9

 
December 28, 2012
 
Amortized Cost
 
Gross Unrealized Gain
 
Gross Unrealized Loss
 
Fair Value
Municipal debt securities
$
57.3

 
$
1.0

 
$
(0.1
)
 
$
58.2

Corporate debt securities
17.9

 
0.3

 
—

 
18.2

Asset-backed securities
16.0

 
0.3

 
—

 
16.3

 
$
91.2

 
$
1.6

 
$
(0.1
)
 
$
92.7


The amortized cost and fair value by contractual maturity of our held-to-maturity investments are as follows (in millions):
 
December 27, 2013
 
Amortized Cost
 
Fair Value
Due in one year or less
$
10.2

 
$
10.2

Due after one year through five years
42.1

 
42.8

Due after five years through ten years
34.4

 
33.9

 
$
86.7

 
$
86.9


Actual maturities may differ from contractual maturities because the issuers of certain debt securities have the right to call or prepay their obligations without penalty.
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET
Property and equipment are stated at cost and consist of the following (in millions):
 
December 27,
2013
 
December 28,
2012
Buildings and land
$
27.0

 
$
25.9

Computers and software
101.9

 
91.7

Cash dispensing machines
1.0

 
1.0

Furniture and equipment
9.4

 
8.9

Construction in progress
2.9

 
7.7

 
142.2

 
135.2

Less accumulated depreciation and amortization
(87.7
)
 
(77.0
)
 
$
54.5

 
$
58.2


Capitalized software costs, net of accumulated amortization, were $30.6 million and $30.9 million as of December 27, 2013 and December 28, 2012, 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 $15.5 million, $15.8 million, and $13.5 million for 2013, 2012, and 2011, respectively.
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS
Goodwill
The changes in the carrying amount of goodwill were as follows (in millions):
 
Goodwill
 
Accumulated Impairment Losses
 
Goodwill
Balance at December 28, 2012
$
94.3

 
$
(46.2
)
 
$
48.1

Goodwill acquired year to date (1)
34.1

 
—

 
34.1

Balance at December 27, 2013
$
128.4


$
(46.2
)
 
$
82.2


(1)
Goodwill acquired includes $25.7 million, $0.8 million, and $7.6 million due to the acquisitions of MDT, CTS, and TWC, respectively.
Intangible assets
The following table presents our purchased finite-lived intangible assets (in millions):
 
December 27, 2013
 
December 28, 2012
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Finite-lived intangible assets (1):
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
$
35.9

 
$
(13.9
)
 
$
22.0

 
$
19.1

 
$
(10.5
)
 
$
8.6

Trade name/trademarks
5.2

 
(2.7
)
 
2.5

 
3.5

 
(1.6
)
 
1.9

Non-compete agreements
1.8

 
(0.5
)
 
1.3

 
1.8

 
(1.4
)
 
0.4

Total finite-lived intangible assets
$
42.9

 
$
(17.1
)
 
$
25.8

 
$
24.4

 
$
(13.5
)
 
$
10.9


(1)
Excludes assets that are fully amortized.

The components of intangible assets acquired for the fiscal year ended December 27, 2013, were as follows (in millions):
 
 
MDT
 
CTS
 
TWC
 
Total Acquired Intangible Assets
 
Weighted Average Life
Customer relationships
 
$
7.8

 
$
1.4

 
$
7.6

 
$
16.8

 
8
Trade name/trademarks
 
1.0

 
0.1

 
0.6

 
1.7

 
1
Non-compete agreements
 
1.4

 
—

 
—

 
1.4

 
5
Total intangible assets acquired
 
$
10.2

 
$
1.5

 
$
8.2

 
$
19.9

 
 

Intangible assets are amortized using the straight-line method over their estimated useful lives. Amortization of our finite-lived intangible assets was $4.9 million, $3.1 million, and $2.9 million for 2013, 2012, and 2011, respectively.
The following table provides the estimated future amortization of finite-lived intangible assets as of December 27, 2013 (in millions):
2014
$
5.8

2015
5.1

2016
4.6

2017
2.6

2018
2.1

Thereafter
5.6

Total future amortization
$
25.8


Finite-lived intangible assets are reviewed for impairment whenever events and circumstances indicate the carrying value may not be recoverable. We noted no such event or circumstance and accordingly no impairment loss was recognized during 2013, 2012, or 2011.
We also held indefinite lived trade name/trademarks of $5.7 million as of December 27, 2013 and December 28, 2012. We test goodwill and indefinite lived intangible assets for impairment at least annually. We performed our annual goodwill impairment test as of the last day of our fiscal third quarter of 2013 and determined that the estimated fair value exceeded the carrying amount of goodwill for all our reporting units. Accordingly, no impairment loss was required to be recognized during 2013. We had no goodwill impairment losses during 2012 or 2011.
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.
In connection with the acquisition of MDT, we assumed certain workers' compensation insurance policies, which cover claims for the policy year ended February 13, 2013.
For workers’ compensation claims originating in Washington, North Dakota, Ohio, Wyoming, Canada, and Puerto Rico (our “monopolistic jurisdictions”), we pay workers’ compensation insurance premiums and obtain full coverage under government-administered programs (with the exception of our Labor Ready service line in the state of Ohio where we have a self-insured policy). Accordingly, because we are not the primary obligor, our financial statements do not reflect the liability for workers’ compensation claims in these monopolistic jurisdictions.
Our workers’ compensation reserve is established using estimates of the future cost of claims and related expenses that have been reported but not settled, as well as those that have been incurred but not reported. Our workers’ compensation reserve for claims below the deductible limit is discounted to its estimated net present value using discount rates based on average returns of “risk-free” U.S. Treasury instruments available during the year in which the liability was incurred. The weighted average rate was 2.1% and 2.4% at December 27, 2013 and December 28, 2012, respectively.
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 millions):
 
December 27,
2013
 
December 28,
2012
Undiscounted workers’ compensation reserve
$
234.4

 
$
216.0

Less discount on workers' compensation reserve
19.6

 
20.4

Workers' compensation reserve, net of discount
214.8

 
195.6

Less current portion
49.9

 
44.7

Long-term portion
$
164.9

 
$
150.9


The table below presents the estimated future payout of our discounted workers' compensation claims reserve for the next five years and thereafter as of December 27, 2013 (in millions):
2014
$
49.9

2015
29.5

2016
18.6

2017
12.9

2018
9.9

2019 and thereafter
59.9

Sub-total
180.7

Excess claims reserve
34.1

Total
$
214.8


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. At December 27, 2013, the weighted average rate was 3.9%. The claim payments are made and the corresponding reimbursements from our insurance carriers are received over an estimated weighted average period of approximately 15.5 years. The discounted workers’ compensation reserve for excess claims and the corresponding receivable for the insurance on excess claims were $34.1 million and $27.1 million as of December 27, 2013 and December 28, 2012, respectively.
Certain workers’ compensation insurance companies (“Troubled Insurance Companies”) with which we formerly did business are in liquidation and have failed to pay a number of excess claims to date. These excess claims have been presented to the state guaranty funds of the states in which the claims originated. Some of these excess claims have been rejected by the state guaranty funds due to statutory eligibility limitations. We have recorded a valuation allowance of $5.7 million and $5.6 million against all receivables from Troubled Insurance Companies for the excess claims that have primarily been rejected by the state guaranty as of December 27, 2013 and December 28, 2012, respectively. Total discounted receivables from insurance companies, net of the valuation allowance, were $28.4 million and $21.4 million as of December 27, 2013 and December 28, 2012, respectively, and are included in Other assets, net in 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 of $63.2 million, $52.3 million, and $51.2 million was recorded in Cost of services for 2013, 2012 and 2011, respectively. 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.
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES
Revolving credit facility
We have a credit agreement with Bank of America, N.A. and Wells Fargo Capital Finance, LLC for a secured revolving credit facility of up to a maximum of $80.0 million (the “Revolving Credit Facility”). The Revolving Credit Facility expires in September 2016.
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 85% of our eligible accounts receivable and the liquidation value of our Tacoma headquarters office building. The liquidation value is not to exceed $15.0 million, and is reduced quarterly by $0.4 million. As of December 27, 2013, the Tacoma headquarters office building liquidation value totaled $12.0 million. The borrowing limit is further reduced by the sum of a reserve in an amount equal to the payroll and payroll taxes for our temporary employees for one payroll cycle and other reserves, if deemed applicable. At December 27, 2013, $80.0 million was available under the Revolving Credit Facility, and $6.0 million was utilized by outstanding standby letters of credit, leaving $74.0 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 liquidity in excess of $12.0 million. Liquidity is defined as the amount we are entitled to borrow as advances under the Revolving Credit Facility plus the amount of cash, cash equivalents, and certain marketable securities held in accounts subject to a control agreement benefiting the lenders. We are required to satisfy a fixed charge coverage ratio in the event we do not meet that requirement. The amount we were entitled to borrow at December 27, 2013 was $74.0 million and the amount of cash, cash equivalents and certain marketable securities under control agreements was $124.5 million for a total of $198.5 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) or the Prime Rate, at our option, plus an applicable spread based on excess liquidity as set forth below:
Excess Liquidity
 
Prime Rate Loans
 
LIBOR Rate Loans
Greater than $40 million
 
0.50%
 
1.50%
Between $20 million and $40 million
 
0.75%
 
1.75%
Less than $20 million
 
1.00%
 
2.00%

A fee on borrowing availability of 0.25% is also applied against the unused portion of the Revolving Credit Facility. Letters of credit are priced at the margin in effect for LIBOR loans, plus a fronting fee of 0.125%.
Obligations under the Revolving Credit Facility are secured by substantially all of our domestic personal property and our headquarters located in Tacoma, Washington.
Term Loan Agreement
On February 4, 2013, we entered into an unsecured Term Loan Agreement (the “Loan”) with Synovus Bank in the principal amount of $34.0 million. The Loan has a five year maturity with fixed monthly principal payments, which total $2.3 million annually based on a loan amortization term of fifteen years. Interest accrues at the one-month LIBOR index rate plus an applicable spread of 1.50%, which is paid in addition to the principal payments. At our discretion, we may elect to extend the term of the Loan by five consecutive one-year extensions. At December 27, 2013, the interest rate for the term loan was 1.7%.
At December 27, 2013, the remaining balance of the Loan was $32.0 million, of which, $2.3 million is short-term and is included in Other current liabilities on our Consolidated Balance Sheets. The long term portion of $29.7 million is reported as Note payable on our Consolidated Balance Sheets. The loan has variable rate interest and approximates fair value as of December 27, 2013.
Scheduled principal payments for debt for the next five years are as follows (in millions):
2014
$
2.3

2015
2.3

2016
2.3

2017
2.3

2018
22.8

Total principal payments
$
32.0


Our obligations under the Loan may be accelerated upon the occurrence of an event of default under the Loan, which includes customary events of default, as well as cross-defaults related to indebtedness under our Revolving Credit Facility, and other Loan specific defaults. The Loan contains customary negative covenants applicable to the Company and its subsidiaries such as indebtedness, certain dispositions of property, the imposition of restrictions on payments under the Loan, and other Loan specific covenants. We are in compliance with all covenants related to the Loan as of December 27, 2013.
Workers’ compensation commitments
Our insurance carriers and certain state workers’ compensation programs require us to collateralize a portion of our workers’ compensation obligation, for which they become responsible should we become insolvent. The collateral typically takes the form of cash and cash equivalents, highly rated investment grade debt securities, letters of credit and/or surety bonds. On a regular basis these entities assess the amount of collateral they will require from us relative to our workers' compensation obligation. The majority of our collateral obligations are held in the Trust at the Bank of New York Mellon.
We have provided our insurance carriers and certain states with commitments in the form and amounts listed below (in millions):
 
December 27,
2013
 
December 28,
2012
Cash collateral held by insurance carriers
$
23.7

 
$
21.5

Cash and cash equivalents held in Trust (1)
31.5

 
14.8

Investments held in Trust
86.7

 
91.2

Letters of credit (2)
7.9

 
9.0

Surety bonds (3)
16.1

 
16.2

Total collateral commitments
$
165.9

 
$
152.7


(1)
Included in this amount is $0.8 million and $0.9 million of accrued interest at December 27, 2013 and December 28, 2012, respectively.
(2)
We have agreements with certain financial institutions to issue letters of credit as collateral. We had $1.9 million and $1.8 million of restricted cash collateralizing our letters of credit at December 27, 2013 and December 28, 2012, respectively.
(3)
Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which is determined by each independent surety carrier. These fees do not exceed 2.0% of the bond amount, subject to a minimum charge. The terms of these bonds are subject to review and renewal every one to four years and most bonds can be canceled by the sureties with as little as 60 days notice.
Capital leases
We had property held under non-cancelable capital leases reported in Property and equipment, net on the Consolidated Balance Sheets totaling $0.1 million, net of accumulated depreciation at December 28, 2012. At December 27, 2013 we held no capital leases. Our capital lease obligations were reported in Other current liabilities on the Consolidated Balance Sheets.
Operating leases
We have contractual commitments in the form of operating leases related to branch offices and equipment. Future non-cancelable minimum lease payments under our operating lease commitments as of December 27, 2013 are as follows for each of the next five years and thereafter (in millions):
2014
$
1.8

2015
1.0

2016
0.5

2017
0.2

2018
0.1

Total future non-cancelable minimum lease payments
$
3.6


The majority of operating leases pertaining to our branch offices provide for renewal options ranging from three to five years. Operating leases are generally renewed in the normal course of business, and most of the options are negotiated at the time of renewal. However, for the majority of our leases, both parties to the lease have the right to cancel the lease with 90 days notice. Accordingly, we have not included the leases with 90 day cancellation provisions in our disclosure of future minimum lease payments.
Total branch office rent expense for 2013, 2012, and 2011 was $22.5 million, $22.0 million and $22.1 million, respectively.
Purchase Obligations
Purchase obligations include agreements to purchase goods and services in the ordinary course of business that are enforceable, legally binding and specify all significant terms. Purchase obligations do not include agreements that are cancelable without significant penalty. We had $16.8 million of purchase obligations as of December 27, 2013, of which $8.9 million are expected to be paid in 2014.
Legal contingencies and developments
We are involved in various proceedings arising in the normal course of conducting business. We believe the amounts provided in our financial statements are adequate in consideration of the probable and estimable liabilities. The resolution of those proceedings is not expected to have a material effect on our results of operations or financial condition.
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY
Common Stock
In July 2011, our Board of Directors approved a program to repurchase $75 million of our outstanding common stock. As of December 27, 2013, $35.2 million remained available for repurchase of common stock under the current authorization, which has no expiration date.
During 2013, we did not repurchase or retire any shares of our common stock under our authorized stock repurchase program. During 2012, we repurchased and retired 0.3 million shares of our common stock for a total amount of $4.4 million, including commissions.
Purchases of our common stock are not displayed separately as treasury stock on the Consolidated Balance Sheets in accordance with the Washington Business Corporation Act, which requires the retirement of purchased shares. As a result, shares of our common stock that we purchase are retired immediately. It is our policy to first record these purchases as a reduction to our common stock account. Once the common stock account has been reduced to a nominal balance, remaining purchases are recorded as a reduction to retained earnings.
Preferred Stock
We have authorized 20 million shares of blank check preferred stock. The blank check preferred stock is issuable in one or more series, each with such designations, preferences, rights, qualifications, limitations and restrictions as our Board of Directors may determine and set forth in supplemental resolutions at the time of issuance, without further shareholder action.
The initial series of blank check preferred stock authorized by the Board of Directors was designated as Series A Preferred Stock. We had no outstanding shares of preferred stock in any of the years presented.
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.
Stock-based compensation expense was as follows (in millions):
 
2013
 
2012
 
2011
Restricted and unrestricted stock and performance share units
$
8.1

 
$
7.5

 
$
6.7

Stock options
—

 
0.1

 
0.4

Employee stock purchase plan
0.3

 
0.3

 
0.3

Total stock-based compensation
$
8.4

 
$
7.9

 
$
7.4

 
 
 


 
 
Total related tax benefit recognized
$
2.9

 
$
2.9

 
$
2.8


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.
No capitalized stock-based compensation was included in Property and equipment, net on the Consolidated Balance Sheets for 2013, 2012 or 2011.
Restricted and unrestricted stock and performance share units
Under the Incentive Plan, restricted stock is granted to executive officers and key employees and vests annually over three or four years. Unrestricted stock granted to our directors vests immediately. Restricted and unrestricted stock-based compensation expense is calculated based on the grant-date market value. We recognize compensation expense on a straight-line basis over the vesting period, net of estimated forfeitures.

Performance share units have been granted to executive officers and certain key employees since 2010. Vesting of the performance share units is contingent upon the achievement of revenue and/or profitability growth goals at the end of each three year performance period. Each performance share unit is equivalent to one share of common stock. Compensation expense is calculated based on the grant-date market value of our stock and is recognized ratably over the performance period for the performance share units which are expected to vest. Our estimate of the performance units expected to vest is reviewed and adjusted as appropriate each quarter.
Restricted and unrestricted stock and performance share units activity for the year ended December 27, 2013 was as follows (shares in thousands):
 
Shares
 
Weighted- average grant-date price
Non-vested at beginning of period
1,435

 
$
15.23

Granted
643

 
$
19.00

Vested
(437
)
 
$
15.25

Forfeited
(97
)
 
$
17.45

Non-vested at the end of the period
1,544

 
$
16.66


The weighted average grant-date price of restricted and unrestricted stock and performance share units granted during the years 2013, 2012 and 2011 was $19.00, $16.72, and $14.72, respectively. As of December 27, 2013, total unrecognized stock-based compensation expense related to non-vested restricted stock was approximately $8.3 million, of which $7.4 million is estimated to be recognized over a weighted average period of 1.7 years through 2017. As of December 27, 2013, total unrecognized stock-based compensation expense related to performance share units, assuming achievement of maximum financial goals, was approximately $8.1 million, of which $2.8 million is currently estimated to be recognized over a weighted average period of 1.6 years through 2015. The total fair value of restricted shares vesting during 2013, 2012 and 2011 was $4.8 million, $5.3 million and $5.2 million, respectively.
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. The maximum contractual term for our outstanding option awards is ten years.
There were no stock options granted during fiscal 2013, 2012 or 2011.
Stock option activity was as follows (shares in thousands):
 
Shares
 
Weighted Average Exercise Price
 
Weighted Average Remaining Contractual Life
 
Aggregate Intrinsic Value (in millions)
Outstanding, December 28, 2012
639

 
$
16.91

 
 
 
 
Exercised
(454
)
 
$
16.12

 
 
 
 
Expired/Forfeited
(111
)
 
$
21.24

 
 
 
 
Outstanding, December 27, 2013
74

 
$
14.99

 
1.65
 
$
0.8

Exercisable, December 27, 2013
74

 
$
14.99

 
1.65
 
$
0.8

The aggregate intrinsic value in the table above is the amount by which the market value of the underlying stock exceeded the exercise price of outstanding options, before applicable income taxes and represents the amount optionees would have realized if all in-the-money options had been exercised on the last business day of the period indicated. The closing per share market value of the Company’s stock on December 27, 2013 was $25.92.
Total unrecognized stock-based compensation expense related to non-vested stock options was de minimis as of December 27, 2013. The total intrinsic value of options exercised was $3.0 million and $1.9 million, in 2013 and 2012, respectively, and was de minimis in 2011, determined as of the date of exercise.
Cash received from option exercises, net of tax withholdings, during 2013, 2012 and 2011 was $7.3 million, $2.5 million and $0.1 million, respectively. The actual tax benefit realized for the deduction from option exercises was $1.0 million and $0.6 million in 2013 and 2012, respectively, and was de minimis for 2011.
Employee stock purchase plan
Our Employee Stock Purchase Plan (“ESPP”) reserves for purchase 1.0 million shares of common stock. The plan allows eligible employees to contribute up to 10% of their earnings toward the monthly purchase of the Company's common stock. The employee's purchase price is the lesser of 85% of the fair market value of shares on either the first day or the last day of each month. We consider our ESPP to be a component of our stock-based compensation and accordingly we recognize compensation expense over the requisite service period for stock purchases made under the plan. The requisite service period begins on the enrollment date and ends on the purchase date, the duration of which is one month.
The following table summarizes transactions under our ESPP from fiscal year 2011 through 2013 (shares in thousands):
 
Shares    
 
Average Price Per    
Share
Issued during fiscal year 2013
69

 
$
17.10

Issued during fiscal year 2012
95

 
$
12.41

Issued during fiscal year 2011
83

 
$
11.95

INCOME TAXES
INCOME TAXES
INCOME TAXES
The provision for income taxes is comprised of the following (in millions):
 
2013
 
2012
 
2011
Current taxes:
 
 
 
 
 
Federal
$
14.2

 
$
14.9

 
$
16.3

State
5.1

 
2.7

 
2.9

Foreign
0.5

 
0.3

 
0.4

Total current taxes
19.8

 
17.9

 
19.6

Deferred taxes:
 
 
 
 
 
Federal
(2.8
)
 
2.7

 
(1.3
)
State
(1.0
)
 
0.4

 
0.1

Foreign
—

 
—

 
0.1

Total deferred taxes
(3.8
)
 
3.1

 
(1.1
)
Provision for income taxes
$
16.0

 
$
21.0

 
$
18.5


The items accounting for the difference between income taxes computed at the statutory federal income tax rate and income taxes reported in the Consolidated Statements of Operations & Comprehensive Income are as follows (in millions except percentages):
 
2013
 
%
 
2012
 
%
 
2011
 
%
Income tax expense based on statutory rate
$
21.3

 
35.0
 %
 
$
19.1

 
35.0
 %
 
$
17.2

 
35.0
 %
Increase (decrease) resulting from:
 
 
 
 
 
 
 
 
 
 
 
State income taxes, net of federal benefit
2.5

 
4.2
 %
 
1.8

 
3.3
 %
 
1.9

 
3.9
 %
Tax credits, net
(10.8
)
 
(17.7
)%
 
(1.9
)
 
(3.5
)%
 
(3.5
)
 
(7.2
)%
Nondeductible/nontaxable items
2.1

 
3.5
 %
 
2.3

 
4.2
 %
 
2.9

 
5.8
 %
Other, net
0.9

 
1.3
 %
 
(0.3
)
 
(0.6
)%
 
—

 
0.1
 %
Total taxes on income
$
16.0

 
26.3
 %
 
$
21.0

 
38.4
 %
 
$
18.5

 
37.6
 %


The primary difference between the statutory federal income tax rate of 35.0% and our annual effective income tax rate of 26.3%, excluding the prior year WOTC benefits, is from estimated current year WOTC, state income taxes, and certain non-deductible expenses.
Our effective tax rate on earnings for the year ended December 27, 2013, was 26.3% compared to 38.4% for the same period in 2012. The decrease in the effective tax rate is due primarily to the federal Work Opportunity Tax Credit (“WOTC”). The effective tax rate for 2012 excluded benefits of WOTC because it had largely expired at the end of 2011. The American Taxpayer Relief Act of 2012 (the “Act”) was signed into law on January 2, 2013, and retroactively restored the WOTC for 2012 and extended it through 2013. This tax credit is designed to encourage employers to hire workers from certain targeted groups with higher than average unemployment rates. Because a change in the law is accounted for in the period of enactment, the retroactive effect of the Act on our U.S. federal taxes for 2012 was recognized in the year ended December 27, 2013. The effective tax rate was also favorably impacted by the estimated increase to our WOTC benefits from the IRS extension of the 2012 WOTC certification request deadline to April 29, 2013, and by receipt of additional WOTC certification approvals related to years prior to 2012.
The components of deferred tax assets and liabilities were as follows (in millions):
 
December 27, 2013
 
December 28, 2012
Deferred tax assets:
 
 
 
Allowance for doubtful accounts
$
2.2

 
$
2.0

Workers’ compensation claims reserve
10.4

 
10.1

Accounts payable and other accrued expenses
2.2

 
2.4

Net operating loss and tax credits carry-forwards
1.1

 
0.6

Accrued wages and benefits
6.8

 
5.9

Deferred compensation
2.2

 
1.5

Other
1.0

 
0.5

Total
25.9

 
23.0

Valuation allowance
(0.8
)
 
(0.6
)
Total deferred tax asset, net of valuation allowance
25.1

 
22.4

Deferred tax liabilities:
 
 
 
Prepaid expenses, deposits and other current assets
(1.7
)
 
(1.6
)
Depreciation and amortization
(10.4
)
 
(11.9
)
Other
(1.2
)
 
(0.9
)
Total deferred tax liabilities
(13.3
)
 
(14.4
)
Net deferred tax asset, end of year
11.8

 
8.0

Net deferred tax asset, current
7.6

 
5.4

Net deferred tax asset, non-current
$
4.2

 
$
2.6



At December 27, 2013, Spartan Staffing Puerto Rico, LLC, a wholly-owned subsidiary of TrueBlue, Inc., had net operating loss carry-forwards of approximately $2.7 million expiring in 2015 through 2022. Additionally, Labor Ready Southwest, Inc. and its affiliates, wholly-owned subsidiaries of TrueBlue, Inc., had California enterprise zone tax credit carry-forwards of approximately $1.0 million expiring in 2023. Valuation allowances have been established against our carry-forward tax benefits based on our history.
Deferred taxes related to our foreign currency translation were de minimis for 2013, 2012 and 2011.
As of December 27, 2013, our liability for unrecognized tax benefits was $2.0 million, if recognized, $1.3 million would impact our effective tax rate. We do not believe the amounts of unrecognized tax benefits will significantly increase or decrease within 12 months of the year ended December 27, 2013. This liability is recorded in Other non-current liabilities on our Consolidated Balance Sheets. In general, the tax years 2010 through 2012 remain open to examination by the major taxing jurisdictions where we conduct business.
The following table summarizes the activity related to our unrecognized tax benefits (in millions):
 
2013
 
2012
 
2011
Balance, beginning of fiscal year
$
1.9

 
$
1.7

 
$
1.6

Increases for tax positions related to the current year
0.4

 
0.5

 
0.3

Reductions due to lapsed statute of limitations
(0.3
)
 
(0.3
)
 
(0.2
)
Balance, end of fiscal year
$
2.0

 
$
1.9

 
$
1.7


We recognize interest and penalties related to unrecognized tax benefits within Income tax expense on the accompanying Consolidated Statements of Operations & Comprehensive Income. Accrued interest and penalties are included within Other long-term liabilities on the Consolidated Balance Sheets. Related to the unrecognized tax benefits noted above, we accrued a de minimis amount for interest and penalties during 2013 and in total, as of December 27, 2013, have recognized a liability for penalties of$0.2 million and interest of $0.7 million.
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 nonqualified plan was $6.6 million and $4.2 million as of December 27, 2013 and December 28, 2012, respectively. The current and non-current portion of the deferred compensation liability is included in Other current liabilities and Other long-term liabilities, respectively, on the Consolidated Balance Sheets, and is largely offset by restricted investments recorded in Restricted cash and investments on the Consolidated Balance Sheets. The expense for our qualified and nonqualified deferred compensation plans, including our discretionary matching contributions, totaled $1.4 million, $1.2 million, and $1.1 million for 2013, 2012, and 2011, respectively, and is recorded in Selling, general and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income.
NET INCOME PER SHARE
NET INCOME PER SHARE
NET INCOME PER SHARE
Adjusted net income and diluted common shares were calculated as follows (in millions, except per share amounts):
 
2013
 
2012
 
2011
Net income
$
44.9

 
$
33.6

 
$
30.8

 
 
 
 
 
 
Weighted average number of common shares used in basic net income per common share
40.2

 
39.5

 
42.0

Dilutive effect of outstanding stock options and non-vested restricted stock
0.3

 
0.4

 
0.3

Weighted average number of common shares used in diluted net income per common share
40.5

 
39.9

 
42.3

   Net income per common share:
 
 
 
 
 
Basic
$
1.12

 
$
0.85

 
$
0.73

Diluted
$
1.11

 
$
0.84

 
$
0.73

 
 
 
 
 
 
Anti-dilutive shares
0.1

 
0.7

 
1.0


Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is calculated by dividing net income by the weighted average number of common shares and potential common shares outstanding during the period. Potential common shares include the dilutive effects of outstanding options, non-vested restricted stock, and performance share units, except where their inclusion would be anti-dilutive.
Anti-dilutive shares include unvested restricted stock, performance share units and in-the-money options for which the sum of the assumed proceeds, including unrecognized compensation expense, exceeds the average stock price during the periods presented. Anti-dilutive shares associated with our stock options relate to those stock options with an exercise price higher than the average market value of our stock during the periods presented.
OTHER COMPREHENSIVE INCOME (LOSS)
OTHER COMPREHENSIVE INCOME (LOSS)
OTHER COMPREHENSIVE INCOME (LOSS)
Other comprehensive income (loss) is reflected as a net increase (decrease) to shareholders’ equity. Changes in the balances of each component of accumulated comprehensive income (loss) during the year ended December 27, 2013 were as follows (in millions):
 
Foreign currency translation adjustment
 
Unrealized loss on marketable securities (1)
 
Total other comprehensive income (loss), net of tax (2)
Balance as of December 28, 2012
$
2.8

 
$
0.0

 
$
2.8

Current-period other comprehensive loss
(0.7
)
 
(0.1
)
 
(0.8
)
Balance as of December 27, 2013
$
2.1

 
$
(0.1
)
 
$
2.0


(1)
Consists of deferred compensation plan accounts, which are comprised of mutual funds, and available-for-sale securities, which are comprised of certificates of deposits.
(2)
The tax impact of the components of other comprehensive income (loss) was immaterial.
SUPPLEMENTAL CASH FLOW INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosure of cash flow information (in millions):
 
2013
 
2012
 
2011
Cash paid during the period for:
 
 
 
 
 
Interest
$
1.1

 
$
0.7

 
$
0.8

Income taxes
$
15.6

 
$
21.3

 
$
16.1


As of December 27, 2013 and December 28, 2012, we had acquired $0.5 million and $1.6 million, respectively, of property, plant and equipment on account that was not yet paid. These are considered non-cash investing items.
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
We evaluated events and transactions occurring after the balance sheet date through the date the financial statements were issued, and noted no other events that were subject to recognition or disclosure.
QUARTERLY FINANCIAL DATA (UNAUDITED)
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
IN THOUSANDS (EXCEPT PER SHARE DATA)

 
First
 
Second
 
Third
 
Fourth
2013
 
 
 
 
 
 
 
Revenue from services
$
346,498

 
$
422,310

 
$
451,169

 
$
448,952

Cost of services
259,859

 
310,437

 
327,641

 
328,689

Gross profit
86,639

 
111,873

 
123,528

 
120,263

Selling, general and administrative expenses
88,432

 
89,339

 
90,767

 
93,710

Depreciation and amortization
5,159

 
5,203

 
4,771

 
5,339

Income (loss) from operations
(6,952
)
 
17,331

 
27,990

 
21,214

Interest expense
(233
)
 
(336
)
 
(350
)
 
(329
)
Interest and other income
710

 
611

 
766

 
515

Interest and other income, net
477

 
275

 
416

 
186

Income (loss) before tax expense
(6,475
)
 
17,606

 
28,406

 
21,400

Income tax expense (benefit)
(5,399
)
 
5,069

 
9,454

 
6,889

Net income (loss)
$
(1,076
)
 
$
12,537

 
$
18,952

 
$
14,511

Net income (loss) per common share:
 
 
 
 
 
 
 
Basic
$
(0.03
)
 
$
0.31

 
$
0.47

 
$
0.36

Diluted
$
(0.03
)
 
$
0.31

 
$
0.47

 
$
0.36

2012
 
 
 
 
 
 
 
Revenue from services
$
311,187

 
$
354,261

 
$
379,467

 
$
344,615

Cost of services
231,952

 
260,725

 
274,237

 
250,231

Gross profit
79,235

 
93,536

 
105,230

 
94,384

Selling, general and administrative expenses
72,082

 
71,526

 
77,634

 
79,217

Depreciation and amortization
4,768

 
4,729

 
4,660

 
4,733

Income from operations
2,385

 
17,281

 
22,936

 
10,434

Interest expense
(391
)
 
(244
)
 
(266
)
 
(230
)
Interest and other income
655

 
656

 
675

 
714

Interest and other income, net
264

 
412

 
409

 
484

Income before tax expense
2,649

 
17,693

 
23,345

 
10,918

Income tax expense
1,119

 
7,356

 
8,998

 
3,503

Net income
$
1,530

 
$
10,337

 
$
14,347

 
$
7,415

Net income per common share:
 
 
 
 
 
 
 
Basic
$
0.04

 
$
0.26

 
$
0.36

 
$
0.19

Diluted
$
0.04

 
$
0.26

 
$
0.36

 
$
0.19

FINANCIAL STATEMENT SCHEDULES
FINANCIAL STATEMENT SCHEDULES
FINANCIAL STATEMENT SCHEDULES
Schedule II, Valuation and Qualifying Accounts (in millions)
Allowance for doubtful accounts activity was as follows:
 
 
2013
 
2012
 
2011
Balance, beginning of the year
$
5.0

 
$
5.8

 
$
6.4

Charged to expense
12.1

 
7.0

 
6.6

Write-offs
(11.4
)
 
(7.8
)
 
(7.2
)
Balance, end of year
$
5.7

 
$
5.0

 
$
5.8

Insurance receivable valuation allowance activity was as follows:
 
 
2013
 
2012
 
2011
Balance, beginning of the year
$
5.6

 
$
7.3

 
$
7.6

Charged to expense
0.1

 
(1.7
)
 
(0.3
)
Balance, end of year
$
5.7

 
$
5.6

 
$
7.3

Income tax valuation allowance additions (reductions) were as follows:
 
 
2013
 
2012
 
2011
Balance, beginning of the year
$
0.6

 
$
0.5

 
$
0.7

Charged to expense
0.2

 
0.1

 
(0.2
)
Balance, end of year
$
0.8

 
$
0.6

 
$
0.5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
Basis of presentation 
Basis of presentation
The consolidated financial statements include the accounts of TrueBlue, Inc. and all of its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Segment reporting 
Our TrueBlue service lines are our operating segments and are aggregated into one reportable segment in accordance with U.S. GAAP. Our operations are all in the blue-collar staffing market of the temporary staffing industry and supply customers with temporary workers. All our service lines have the following similar characteristics:
•
They provide blue-collar temporary labor services;
•
They serve customers who have a need for temporary staff to perform tasks, which do not require a permanent employee;
•
They each build a temporary workforce through recruiting, screening, and hiring. Temporary workers are dispatched to customers where they work under the supervision of our customers;
•
They each drive profitability by managing the bill rates to our customers and the pay rates to our workers. Profitable growth is also driven by leveraging our cost structure across all service lines.
Our long-term performance expectations of all our service lines are similar as are the underlying financial and economic metrics used to manage those service lines.
Our international operations are not significant to our total operations for segment reporting purposes. Total revenues from our international operations were 3.1%, 3.5%, and 3.8% of our total revenues for fiscal years ending 2013, 2012, and 2011, respectively.
Fiscal year end 
Fiscal year end
Our fiscal year ends on the last Friday of December.
Revenue recognition 
Revenue recognition
Revenue from temporary staffing services is recognized at the time the service is provided and is net of adjustments related to customer credits. Revenue also includes billable travel and other reimbursable costs. Customer discounts or other incentives are recognized in the period the related revenue is earned. We discontinued the use of all domestic cash dispensing machines in fiscal 2012. Revenues are reported net of sales, use, or other transaction taxes collected from customers and remitted to taxing authorities.
We record revenue on a gross basis as a principal versus on a net basis as an agent in the consolidated statement of operations. We have determined that gross reporting as a principal is the appropriate treatment based upon the following key factors:
•
We maintain the direct contractual relationship with the customer.
•
We have discretion in selecting and assigning the temporary workers to particular jobs and establishing their billing rate.
•
We bear the risk and rewards of the transaction including credit risk if the customer fails to pay for services performed.
Cost of services
Cost of services primarily includes wages of temporary workers and related payroll taxes and workers’ compensation expenses. Cost of services also includes billable travel and other reimbursable costs.
Advertising costs 
Advertising costs
Advertising costs consist primarily of print and other promotional activities. We expense advertisements as of the first date the advertisements take place. Advertising expenses included in selling, general and administrative expenses were $4.0 million, $3.7 million, and $3.6 million in 2013, 2012, and 2011, respectively.
Cash and Cash Equivalents and Marketable Securities 
Cash and cash equivalents and marketable securities
We consider all highly liquid instruments purchased with an original maturity of three months or less at date of purchase to be cash equivalents. Investments with original maturities greater than three months are classified as marketable securities. Our marketable securities consist of certificates of deposit ("CDs"), variable-rate demand notes ("VRDNs"), and commercial paper. All of our marketable securities are classified as available-for-sale and are reported at fair value, with any unrealized gains and losses, net of tax, recorded in Other comprehensive income (loss). We do not buy and hold securities principally for the purpose of selling them in the near future. Our investment policy is focused on the preservation of capital, liquidity and return. From time to time, we may sell certain securities but the objectives are generally not to generate profits on short-term differences in price. We manage our cash equivalents and marketable securities as a single portfolio of highly liquid securities.
Accounts receivable and allowance for doubtful accounts 
Accounts receivable and allowance for doubtful accounts
Accounts receivable are recorded at the invoiced amount together with interest for certain past due accounts. We establish an allowance for doubtful accounts for estimated losses resulting from the failure of our customers to make required payments. The allowance for doubtful accounts is determined based on current collection efforts, historical collection trends, write-off experience, customer credit risk, and current economic data. The allowance for doubtful accounts is reviewed quarterly and represents our best estimate of the amount of probable credit losses. Past due balances are written-off when it is probable the receivable will not be collected. Our allowance for doubtful accounts was $5.7 million and $5.0 million as of December 27, 2013 and December 28, 2012, respectively.
Restricted cash and investments 
Restricted cash and investments
Cash and investments pledged as collateral and restricted to use for workers' compensation insurance programs are included as restricted cash and investments on our Consolidated Balance Sheets. Our investments consist of highly rated investment grade debt securities which are rated A or higher by nationally recognized statistical rating organizations. We have the positive intent and ability to hold all these investments until maturity in accordance with our investment policy and accordingly all of our investments are classified as held-to-maturity. In the event that an investment is downgraded, it is replaced with a highly rated investment grade security. We review for impairment on a quarterly basis and do not consider temporary unrealized losses to be impaired.
In 2011, we entered into an agreement with AIG and the Bank of New York Mellon creating a trust ("Trust"), which holds the majority of our collateral obligations under existing workers' compensation insurance policies. Placing the collateral in the Trust allows us to manage the investment of the assets and provides greater protection of those assets.
Fair value of financial instruments and investments 
Fair value of financial instruments and investments
The carrying value of cash and cash equivalents and restricted cash approximates fair value because of the short-term maturity of those instruments. The fair value of our restricted investments is based upon the quoted market price on the last business day of the fiscal reporting period. Where an observable quoted market price for a security does not exist, we estimate fair value using a variety of valuation methodologies, which include observable inputs for comparable instruments and unobservable inputs. There are inherent limitations when estimating the fair value of financial instruments and the fair values reported are not necessarily indicative of the amounts that would be realized in current market transactions.
Property and equipment 
Property and equipment
Property and equipment are recorded at cost. We compute depreciation using the straight-line method over the estimated useful lives of the assets.
 
Years  
Buildings
40
Computers and software
3 - 10    
Furniture and equipment
3 - 10    

Leasehold improvements are amortized over the shorter of the related non-cancelable lease term, which is typically 90 days, or their estimated useful lives.
Non-capital expenditures associated with opening new branch locations are expensed as incurred.
When property is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss, net of proceeds, is reflected in the Consolidated Statements of Operations & Comprehensive Income.
Repairs and maintenance costs are charged directly to expense as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated.
Costs associated with the acquisition or development of software for internal use are capitalized and amortized over the expected useful life of the software, from three to ten years. A subsequent addition, modification, or upgrade to internal-use software is capitalized to the extent that it enhances the software's functionality or extends its useful life. Software maintenance and training costs are expensed in the period incurred.
Leases 
Leases
We conduct our branch office operations from leased locations. The leases require payment of real estate taxes, insurance and common area maintenance, in addition to rent. The terms of our lease agreements generally range from three to five years with options to cancel with 90 day notification. Most of the leases contain renewal options and escalation clauses.
For leases that contain predetermined fixed escalations of the minimum rent, we recognize the related rent expense on a straight-line basis from the date we take possession of the property to the end of the minimum lease term. We record any difference between the straight-line rent amounts and amounts payable under the leases as part of deferred rent, in accrued liabilities or long-term liabilities, as appropriate.
Cash or lease incentives received upon entering into certain branch leases ("tenant allowances") are recognized on a straight-line basis as a reduction to rent from the date we take possession of the property through the end of the initial lease term. We record the unamortized portion of tenant allowances as a part of deferred rent, in accrued liabilities or long-term liabilities, as appropriate.
Goodwill and intangible assets 
Goodwill and intangible assets
Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. We allocated goodwill to reporting units based on the reporting units that are expected to benefit from the business combination. We do not amortize goodwill but test it for impairment annually as of the last day of our fiscal third quarter, or when indications of potential impairment exist. We monitor the existence of potential impairment indicators throughout the fiscal year.
We test for goodwill impairment at the reporting unit level. We consider our service lines; Labor Ready, Spartan Staffing, CLP Resources, PlaneTechs and Centerline; to be reporting units for goodwill impairment testing. In fiscal 2013, 2012, and 2011, there were no changes to our reporting units.
The impairment test involves comparing the fair value of each reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit. If the fair value exceeds carrying value, then we conclude that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its fair value, a second step is required to measure possible goodwill impairment loss. The second step includes hypothetically valuing the tangible and intangible assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit's goodwill is compared to the carrying value of that goodwill. If the carrying value of the reporting unit's goodwill exceeds the implied fair value of the goodwill, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value.
Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions to evaluate the impact of operating and macroeconomic changes on each reporting unit. The fair value of each reporting unit is estimated using a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested. We also identify similar publicly traded companies and develop a correlation, referred to as a multiple, to apply to the operating results of the reporting units. The primary market multiples we compare to are revenue and earnings before interest, taxes, depreciation, and amortization. These combined fair values are then reconciled to our aggregate market value of our shares of common stock on the date of valuation, while considering a reasonable control premium. We base fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates.
The blue-collar staffing market is subject to volatility based on overall economic conditions. As a consequence, our revenues tend to increase quickly when the economy begins to grow. Conversely, our revenues also decrease quickly when the economy begins to weaken, as occurred during the most recent recession. If actual results were to significantly deviate from management's estimates and assumptions of future performance, we could experience a material impairment to our goodwill.
We have indefinite-lived intangible assets related to our CLP Resources and Spartan Staffing trade names. We test our indefinite-lived intangible assets annually for impairment, or when indications of potential impairment exist. We utilize the relief from royalty method to determine the fair value of each of our trade names. If the carrying value exceeds the fair value, we recognize an impairment loss in an amount equal to the excess. Considerable management judgment is necessary to determine key assumptions, including projected revenue, royalty rates, and appropriate discount rates.
Long-lived asset impairment 
Long-lived asset impairment
Long-lived assets include property and equipment and definite-lived intangible assets. Definite-lived intangible assets consist of customer relationships, trade names and non-compete agreements. Long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Factors considered important that could result in an impairment review include, but are not limited to, significant under performance relative to historical or planned operating results, significant changes in the manner of use of the assets or significant changes in our business strategies. Long-lived assets are grouped at the lowest level at which identifiable cash flows are largely independent when assessing impairment. Our branch assets, including property and equipment, and customer relationship intangibles, are grouped and evaluated at the individual branch level. All other property and equipment and definite-lived intangibles are grouped at either the service line or corporate level as appropriate based on the identifiable cash flows. An impairment loss is recognized when the estimated undiscounted cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset (if any) are less than the carrying value of the asset. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value based on quoted market prices or other valuation techniques (e.g., discounted cash flow analysis). Considerable management judgment is necessary to estimate future after-tax cash flows, including cash flows from continuing use and terminal value. Accordingly, actual future results could vary from our estimates.
Branch closures and exit costs 
Branch closures and exit costs
We routinely evaluate our branch network and close under-performing branches. We classify closed branches in discontinued operations when the operations and cash flows of the branch have been or will be eliminated from ongoing operations. To determine if cash flows have been or will be eliminated from ongoing operations, we evaluate a number of qualitative and quantitative factors, including, but not limited to, proximity to remaining open branches and estimates of revenue migration from the closed branch to any branch remaining open. The estimated revenue migration is based on historical estimates of our revenue migration upon opening or closing a branch in a similar market. Branch closings meeting the criteria for discontinued operations were not material, individually or cumulatively, for any reporting year presented. Assets related to planned branch closures or other exit activities are evaluated for impairment in accordance with our impairment policy, giving consideration to revised estimates of future cash flows.
Workers’ compensation reserves 
Workers’ compensation reserves
We maintain reserves for workers’ compensation claims using actuarial estimates of the future cost of claims and related expenses. These estimates include claims that have been reported but not settled and claims that have been incurred but not reported. These reserves, which reflect potential liabilities to be paid in future periods based on estimated payment patterns, are discounted to estimated net present value using discount rates based on average returns of “risk-free” U.S. Treasury instruments, which are evaluated on a quarterly basis. We evaluate the reserves regularly throughout the year and make adjustments accordingly. If the actual cost of such claims and related expenses exceed the amounts estimated, additional reserves may be required. Changes in reserve estimates are reflected in the Consolidated Statements of Operations & Comprehensive Income in the period when the changes in estimates are made.
Our workers’ compensation reserves include estimated expenses related to claims above our self-insured limits (“excess claims”) and a corresponding receivable for the insurance coverage on excess claims based on the contractual policy agreements we have with insurance companies. We discount the liability and its corresponding receivable to its estimated net present value using the “risk-free” rates associated with the actuarially determined weighted average lives of our excess claims. When appropriate, based on our best estimate, we record a valuation allowance against the insurance receivable to reflect amounts that may not be realized.
Reserves for contingent legal and regulatory liabilities 
Reserves for contingent legal and regulatory liabilities
From time to time we are subject to compliance audits by federal, state and local authorities relating to a variety of regulations including wage and hour laws, taxes, workers’ compensation, immigration, and safety. From time to time we are also subject to legal proceedings in the ordinary course of our operations. We establish reserves for contingent legal and regulatory liabilities when our management determines that it is probable that a legal claim will result in an adverse outcome and the amount of liability can be reasonably estimated. To the extent that an insurance company is contractually obligated to reimburse us for a liability, we record a receivable for the amount of the probable reimbursement. We evaluate our reserve regularly throughout the year and make adjustments as needed. If the actual outcome of these matters is different than expected, an adjustment is charged or credited to expense in the period the outcome occurs or the period in which the estimate changes.
Income taxes and related valuation allowance 
Income taxes and related valuation allowance
We account for income taxes by recording taxes payable or receivable for the current year and deferred tax assets and liabilities for the future tax consequences of events that have been recognized in our financial statements or tax returns. These expected future tax consequences are measured based on provisions of tax law as currently enacted; the effects of future changes in tax laws are not anticipated. Future tax law changes, such as changes to the federal and state corporate tax rates and the mix of states and their taxable income, could have a material impact on our financial condition or results of operations. When appropriate, we record a valuation allowance against deferred tax assets to offset future tax benefits that may not be realized. In determining whether a valuation allowance is appropriate, we consider whether it is more likely than not that all or some portion of our deferred tax assets will not be realized, based in part upon management’s judgments regarding future events and past operating results. Based on that analysis, we have determined that a valuation allowance is appropriate for certain foreign net operating losses and state tax credits that we expect will not be utilized within the permitted carry forward periods as of December 27, 2013 and December 28, 2012.
Stock-based compensation 
Stock-based compensation
Under various plans, officers, employees and non-employee directors have received or may receive grants of stock, restricted stock awards, performance share units, or options to purchase common stock. We also have an employee stock purchase plan (“ESPP”).
Compensation expense for restricted stock awards and performance share units is generally recognized on a straight-line basis over the vesting period, based on the stock’s fair market value on the grant date. For restricted stock grants issued with performance conditions, compensation expense is recognized over each vesting period based on assessment of the likelihood of meeting these conditions. We recognize compensation expense for only the portion of restricted stock and performance share units that is expected to vest, rather than record forfeitures when they occur. If the actual number of forfeitures differs from those estimated by management, additional adjustments to compensation expense may be required in the future periods. We determine the fair value of options to purchase common stock using the Black-Scholes valuation model, which requires the input of subjective assumptions. We recognize expense over the service period for options that are expected to vest and record adjustments to compensation expense at the end of the service period if actual forfeitures differ from original estimates.
Foreign currency 
Foreign currency
Cumulative foreign currency translation adjustments relate to our consolidated foreign subsidiary. Assets and liabilities recorded in foreign currencies are translated at the applicable exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the year.
Purchases and retirement of our common stock 
Purchases and retirement of our common stock
Purchases of our common stock are not displayed separately as treasury stock on the Consolidated Balance Sheets in accordance with the Washington Business Corporation Act, which requires the retirement of purchased shares. As a result, shares of our common stock that we purchase are retired immediately. It is our accounting policy to first record these purchases as a reduction to our common stock account. Once the common stock account has been reduced to a nominal balance, remaining purchases are recorded as a reduction to our Retained earnings account. Furthermore, activity in our common stock account related to stock-based compensation is also recorded to Retained earnings until such time as the reduction to Retained earnings due to stock repurchases has been recovered.
Shares outstanding 
Shares outstanding
Shares outstanding include shares of unvested restricted stock. Unvested restricted stock included in reportable shares outstanding was 0.7 million and 0.6 million shares as of December 27, 2013 and December 28, 2012, respectively. Shares of unvested restricted stock are excluded from our calculation of basic weighted average shares outstanding, but their dilutive impact is added back in the calculation of diluted weighted average shares outstanding.
Use of estimates 
Use of estimates
Preparing financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Examples include, but are not limited to, allowance for doubtful accounts, estimates for asset and goodwill impairments, stock-based performance awards, assumptions underlying self-insurance reserves, and the potential outcome of future tax consequences of events that have been recognized in the financial statements. Actual results and outcomes may differ from these estimates and assumptions.
Recently Issued Accounting Pronouncements not yet Adopted 
Recently issued accounting pronouncements not yet adopted
In July 2013, the FASB issued authoritative guidance for the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent when, for certain reasons, it is not available. The guidance will be effective for our first quarter of fiscal 2014. Management does not expect the adoption of this guidance to have a material impact on our financial statements.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
Schedule of property and equipment
 
Years  
Buildings
40
Computers and software
3 - 10    
Furniture and equipment
3 - 10    
Property and equipment are stated at cost and consist of the following (in millions):
 
December 27,
2013
 
December 28,
2012
Buildings and land
$
27.0

 
$
25.9

Computers and software
101.9

 
91.7

Cash dispensing machines
1.0

 
1.0

Furniture and equipment
9.4

 
8.9

Construction in progress
2.9

 
7.7

 
142.2

 
135.2

Less accumulated depreciation and amortization
(87.7
)
 
(77.0
)
 
$
54.5

 
$
58.2

ACQUISITION (Tables)
Schedule of pro forma financial data 
Pro forma financial data (unaudited) is presented below (in millions, except per share data).
 
2013
 
2012
Revenue from services
$
1,693.1

 
$
1,612.5

Net income
$
49.0

 
$
25.9

Net income per common share - diluted
$
1.21

 
$
0.65

Schedule of allocation of fair value of the assets acquired and liabilities assumed 
The following table summarizes the final allocation of the MDT purchase price, based on the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date of February 4, 2013 (in millions):
 
 
Purchase Price Allocation
Cash
 
$
0.4

Accounts receivable (1)
 
29.9

Prepaid expenses, deposits and other current assets
 
0.6

Property and equipment
 
0.3

Restricted cash
 
6.9

Intangible assets
 
10.2

  Total assets acquired
 
48.3

 
 
 
Accounts payable and other accrued expenses
 
6.3

Accrued wages and benefits
 
4.8

Workers' compensation claims reserve
 
9.4

Other long-term liabilities
 
0.1

  Total liabilities assumed
 
20.6

 
 
 
Net identifiable assets acquired
 
27.7

Goodwill
 
25.7

  Net assets acquired
 
$
53.4

(1)
The gross contractual amount of accounts receivable was $32.9 million of which $3.0 million was estimated to be uncollectible.

Schedule of estimate for the components of identifiable intangible assets and their estimated useful lives (in millions) 
The following table sets forth the components of identifiable intangible assets and their estimated useful lives as of February 4, 2013 (in millions, except for estimated useful lives, in years):
 
Estimated Fair Value
 
Estimated Useful Life
Customer relationships
$
7.8

 
8.0
Trade name/trademarks
$
1.0

 
1.5
Non-compete agreement
$
1.4

 
5.0
Schedule of allocation of fair value of the assets acquired and liabilities assumed 
The following table summarizes the final allocation of the TWC purchase price, based on the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date of October 1, 2013 (in millions):
 
 
Purchase Price Allocation
Accounts receivable (1)
 
$
10.2

Plant and equipment
 
0.2

Intangible assets
 
8.2

  Total assets acquired
 
18.6

 
 
 
Accounts payable
 
0.6

Accrued wages and benefits
 
2.9

  Total liabilities assumed
 
3.5

 
 
 
Net identifiable assets acquired
 
15.1

Goodwill
 
7.6

  Net assets acquired
 
$
22.7

(1)
The gross contractual amount of accounts receivable was $10.4 million of which $0.2 million was estimated to be uncollectible.
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 millions):
 
December 27, 2013
 
Carrying Value
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents (1)
$
122.0

 
$
122.0

 
$
122.0

 
$
—

 
$
—

Marketable securities classified as available-for-sale (2)
20.7

 
20.7

 
—

 
20.7

 
—

Restricted cash and cash equivalents (1)
57.1

 
57.1

 
57.1

 
—

 
—

Other restricted assets (3)
10.8

 
10.8

 
10.8

 
—

 
—

Restricted investments classified as held-to-maturity (4)
86.7

 
86.9

 
—

 
86.9

 
—

 
December 28, 2012
 
Carrying Value
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents (1)
$
129.5

 
$
129.5

 
$
129.5

 
$
—

 
$
—

Restricted cash and cash equivalents (1)
38.1

 
38.1

 
38.1

 
—

 
—

Other restricted assets (3)
7.0

 
7.0

 
7.0

 
—

 
—

Restricted investments classified as held-to-maturity (4)
91.2

 
92.7

 
—

 
92.7

 
—


(1)
Cash equivalents and restricted cash equivalents consist of money market funds, deposits, and investments with original maturities of three months or less.
(2)
Marketable securities include CDs, VRDNs, and commercial paper, which are classified as available-for-sale. Our CDs include $6.0 million with maturities greater than one year and are classified as Other assets on our Consolidated Balance Sheets. VRDNs with contractual maturities beyond one year are classified as short-term based on their highly liquid nature and because they represent the investment of cash that is available for current operations. Despite the long-term nature of their stated contractual maturities, we routinely buy and sell these securities and believe we have the ability to quickly sell them to the re-marketing agent at par value plus accrued interest in the event we decide to liquidate our investment in a particular VRDN.
(3)
Primarily consists of restricted cash in money market accounts and deferred compensation plan accounts, which are comprised of mutual funds.
(4)
Restricted investments classified as held-to-maturity consist of highly rated investment grade securities, primarily in municipal-debt securities, corporate-debt securities, asset-backed securities, and U.S. agency debentures.
MARKETABLE SECURITIES (Tables)
Schedule of available-for-sale securities 
The following table presents the amortized cost and fair value of our available-for-sale investments, which are carried at fair value (in millions):
 
December 27, 2013
 
Amortized Cost
 
Fair Value
Certificates of deposit
$
10.0

 
$
9.9

Variable-rate demand notes
5.8

 
5.8

Commercial paper
5.0

 
5.0

 
$
20.8

 
$
20.7

Schedule of available-for-sale securities by contractual maturity 
The amortized cost and fair value by contractual maturity of our available-for-sale investments are as follows (in millions):
 
December 27, 2013
 
Amortized Cost
 
Fair Value
Due in one year or less (1)
$
14.8

 
$
14.7

Due after one year (2)
6.0

 
6.0

 
$
20.8

 
$
20.7

The amortized cost and fair value by contractual maturity of our held-to-maturity investments are as follows (in millions):
 
December 27, 2013
 
Amortized Cost
 
Fair Value
Due in one year or less
$
10.2

 
$
10.2

Due after one year through five years
42.1

 
42.8

Due after five years through ten years
34.4

 
33.9

 
$
86.7

 
$
86.9

RESTRICTED CASH AND INVESTMENTS (Tables)
Schedule of restricted cash and investments 
The following is a summary of restricted cash and investments (in millions):
 
December 27,
2013
 
December 28,
2012
Cash collateral held by insurance carriers
$
23.7

 
$
21.5

Cash and cash equivalents held in Trust (1)
31.5

 
14.8

Investments held in Trust
86.7

 
91.2

Cash collateral backing letters of credit
1.9

 
1.8

Other (2)
10.8

 
7.0

Total restricted cash and investments
$
154.6

 
$
136.3


(1)
Included in this amount is $0.8 million and $0.9 million of accrued interest at December 27, 2013 and December 28, 2012, respectively.
(2)
Primarily consists of restricted cash in money market accounts and 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 millions):
 
December 27, 2013
 
Amortized Cost
 
Gross Unrealized Gain
 
Gross Unrealized Loss
 
Fair Value
Municipal debt securities
$
54.1

 
$
0.7

 
$
(0.4
)
 
$
54.4

Corporate debt securities
19.7

 
0.2

 
(0.3
)
 
19.6

Asset-backed securities
12.9

 
0.1

 
(0.1
)
 
12.9

 
$
86.7

 
$
1.0

 
$
(0.8
)
 
$
86.9

 
December 28, 2012
 
Amortized Cost
 
Gross Unrealized Gain
 
Gross Unrealized Loss
 
Fair Value
Municipal debt securities
$
57.3

 
$
1.0

 
$
(0.1
)
 
$
58.2

Corporate debt securities
17.9

 
0.3

 
—

 
18.2

Asset-backed securities
16.0

 
0.3

 
—

 
16.3

 
$
91.2

 
$
1.6

 
$
(0.1
)
 
$
92.7

Schedule of held-to-maturity investments by contractual maturity 
The amortized cost and fair value by contractual maturity of our available-for-sale investments are as follows (in millions):
 
December 27, 2013
 
Amortized Cost
 
Fair Value
Due in one year or less (1)
$
14.8

 
$
14.7

Due after one year (2)
6.0

 
6.0

 
$
20.8

 
$
20.7

The amortized cost and fair value by contractual maturity of our held-to-maturity investments are as follows (in millions):
 
December 27, 2013
 
Amortized Cost
 
Fair Value
Due in one year or less
$
10.2

 
$
10.2

Due after one year through five years
42.1

 
42.8

Due after five years through ten years
34.4

 
33.9

 
$
86.7

 
$
86.9

PROPERTY AND EQUIPMENT, NET (Tables)
Schedule of property and equipment
 
Years  
Buildings
40
Computers and software
3 - 10    
Furniture and equipment
3 - 10    
Property and equipment are stated at cost and consist of the following (in millions):
 
December 27,
2013
 
December 28,
2012
Buildings and land
$
27.0

 
$
25.9

Computers and software
101.9

 
91.7

Cash dispensing machines
1.0

 
1.0

Furniture and equipment
9.4

 
8.9

Construction in progress
2.9

 
7.7

 
142.2

 
135.2

Less accumulated depreciation and amortization
(87.7
)
 
(77.0
)
 
$
54.5

 
$
58.2

GOODWILL AND INTANGIBLE ASSETS (Tables)
Schedule of goodwill 
The changes in the carrying amount of goodwill were as follows (in millions):
 
Goodwill
 
Accumulated Impairment Losses
 
Goodwill
Balance at December 28, 2012
$
94.3

 
$
(46.2
)
 
$
48.1

Goodwill acquired year to date (1)
34.1

 
—

 
34.1

Balance at December 27, 2013
$
128.4


$
(46.2
)
 
$
82.2


(1)
Goodwill acquired includes $25.7 million, $0.8 million, and $7.6 million due to the acquisitions of MDT, CTS, and TWC, respectively.
Schedule of finite-lived intangible assets 
The following table presents our purchased finite-lived intangible assets (in millions):
 
December 27, 2013
 
December 28, 2012
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Finite-lived intangible assets (1):
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
$
35.9

 
$
(13.9
)
 
$
22.0

 
$
19.1

 
$
(10.5
)
 
$
8.6

Trade name/trademarks
5.2

 
(2.7
)
 
2.5

 
3.5

 
(1.6
)
 
1.9

Non-compete agreements
1.8

 
(0.5
)
 
1.3

 
1.8

 
(1.4
)
 
0.4

Total finite-lived intangible assets
$
42.9

 
$
(17.1
)
 
$
25.8

 
$
24.4

 
$
(13.5
)
 
$
10.9


(1)
Excludes assets that are fully amortized.

Schedule of components of intangible assets acquired 
The components of intangible assets acquired for the fiscal year ended December 27, 2013, were as follows (in millions):
 
 
MDT
 
CTS
 
TWC
 
Total Acquired Intangible Assets
 
Weighted Average Life
Customer relationships
 
$
7.8

 
$
1.4

 
$
7.6

 
$
16.8

 
8
Trade name/trademarks
 
1.0

 
0.1

 
0.6

 
1.7

 
1
Non-compete agreements
 
1.4

 
—

 
—

 
1.4

 
5
Total intangible assets acquired
 
$
10.2

 
$
1.5

 
$
8.2

 
$
19.9

 
 
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 December 27, 2013 (in millions):
2014
$
5.8

2015
5.1

2016
4.6

2017
2.6

2018
2.1

Thereafter
5.6

Total future amortization
$
25.8

WORKERS' COMPENSATION INSURANCE AND RESERVES Workers' Compensation Insurance (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 millions):
 
December 27,
2013
 
December 28,
2012
Undiscounted workers’ compensation reserve
$
234.4

 
$
216.0

Less discount on workers' compensation reserve
19.6

 
20.4

Workers' compensation reserve, net of discount
214.8

 
195.6

Less current portion
49.9

 
44.7

Long-term portion
$
164.9

 
$
150.9

Schedule of estimated future payout of our discounted workers' compensation claims reserve 
The table below presents the estimated future payout of our discounted workers' compensation claims reserve for the next five years and thereafter as of December 27, 2013 (in millions):
2014
$
49.9

2015
29.5

2016
18.6

2017
12.9

2018
9.9

2019 and thereafter
59.9

Sub-total
180.7

Excess claims reserve
34.1

Total
$
214.8

COMMITMENTS AND CONTINGENCIES (Tables)
Schedule of applicable spread based on excess liquidity 
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) or the Prime Rate, at our option, plus an applicable spread based on excess liquidity as set forth below:
Excess Liquidity
 
Prime Rate Loans
 
LIBOR Rate Loans
Greater than $40 million
 
0.50%
 
1.50%
Between $20 million and $40 million
 
0.75%
 
1.75%
Less than $20 million
 
1.00%
 
2.00%
Schedule principal payments of debt for the next five years 
Scheduled principal payments for debt for the next five years are as follows (in millions):
2014
$
2.3

2015
2.3

2016
2.3

2017
2.3

2018
22.8

Total principal payments
$
32.0

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 millions):
 
December 27,
2013
 
December 28,
2012
Cash collateral held by insurance carriers
$
23.7

 
$
21.5

Cash and cash equivalents held in Trust (1)
31.5

 
14.8

Investments held in Trust
86.7

 
91.2

Letters of credit (2)
7.9

 
9.0

Surety bonds (3)
16.1

 
16.2

Total collateral commitments
$
165.9

 
$
152.7


(1)
Included in this amount is $0.8 million and $0.9 million of accrued interest at December 27, 2013 and December 28, 2012, respectively.
(2)
We have agreements with certain financial institutions to issue letters of credit as collateral. We had $1.9 million and $1.8 million of restricted cash collateralizing our letters of credit at December 27, 2013 and December 28, 2012, respectively.
(3)
Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which is determined by each independent surety carrier. These fees do not exceed 2.0% of the bond amount, subject to a minimum charge. The terms of these bonds are subject to review and renewal every one to four years and most bonds can be canceled by the sureties with as little as 60 days notice.
Schedule of future non-cancelable minimum lease payments under our operating lease commitments 
Future non-cancelable minimum lease payments under our operating lease commitments as of December 27, 2013 are as follows for each of the next five years and thereafter (in millions):
2014
$
1.8

2015
1.0

2016
0.5

2017
0.2

2018
0.1

Total future non-cancelable minimum lease payments
$
3.6

STOCK-BASED COMPENSATION (Tables)
Schedule of stock-based compensation expense 
Stock-based compensation expense was as follows (in millions):
 
2013
 
2012
 
2011
Restricted and unrestricted stock and performance share units
$
8.1

 
$
7.5

 
$
6.7

Stock options
—

 
0.1

 
0.4

Employee stock purchase plan
0.3

 
0.3

 
0.3

Total stock-based compensation
$
8.4

 
$
7.9

 
$
7.4

 
 
 


 
 
Total related tax benefit recognized
$
2.9

 
$
2.9

 
$
2.8

Schedule of restricted and unrestricted stock and performance share units activity 
Restricted and unrestricted stock and performance share units activity for the year ended December 27, 2013 was as follows (shares in thousands):
 
Shares
 
Weighted- average grant-date price
Non-vested at beginning of period
1,435

 
$
15.23

Granted
643

 
$
19.00

Vested
(437
)
 
$
15.25

Forfeited
(97
)
 
$
17.45

Non-vested at the end of the period
1,544

 
$
16.66

Schedule of stock option activity 
Stock option activity was as follows (shares in thousands):
 
Shares
 
Weighted Average Exercise Price
 
Weighted Average Remaining Contractual Life
 
Aggregate Intrinsic Value (in millions)
Outstanding, December 28, 2012
639

 
$
16.91

 
 
 
 
Exercised
(454
)
 
$
16.12

 
 
 
 
Expired/Forfeited
(111
)
 
$
21.24

 
 
 
 
Outstanding, December 27, 2013
74

 
$
14.99

 
1.65
 
$
0.8

Exercisable, December 27, 2013
74

 
$
14.99

 
1.65
 
$
0.8

Schedule of transactions under ESPP 
The following table summarizes transactions under our ESPP from fiscal year 2011 through 2013 (shares in thousands):
 
Shares    
 
Average Price Per    
Share
Issued during fiscal year 2013
69

 
$
17.10

Issued during fiscal year 2012
95

 
$
12.41

Issued during fiscal year 2011
83

 
$
11.95

INCOME TAXES (Tables)
Schedule of components of income tax expense 
The provision for income taxes is comprised of the following (in millions):
 
2013
 
2012
 
2011
Current taxes:
 
 
 
 
 
Federal
$
14.2

 
$
14.9

 
$
16.3

State
5.1

 
2.7

 
2.9

Foreign
0.5

 
0.3

 
0.4

Total current taxes
19.8

 
17.9

 
19.6

Deferred taxes:
 
 
 
 
 
Federal
(2.8
)
 
2.7

 
(1.3
)
State
(1.0
)
 
0.4

 
0.1

Foreign
—

 
—

 
0.1

Total deferred taxes
(3.8
)
 
3.1

 
(1.1
)
Provision for income taxes
$
16.0

 
$
21.0

 
$
18.5

Schedule of income tax reconciliation 
The items accounting for the difference between income taxes computed at the statutory federal income tax rate and income taxes reported in the Consolidated Statements of Operations & Comprehensive Income are as follows (in millions except percentages):
 
2013
 
%
 
2012
 
%
 
2011
 
%
Income tax expense based on statutory rate
$
21.3

 
35.0
 %
 
$
19.1

 
35.0
 %
 
$
17.2

 
35.0
 %
Increase (decrease) resulting from:
 
 
 
 
 
 
 
 
 
 
 
State income taxes, net of federal benefit
2.5

 
4.2
 %
 
1.8

 
3.3
 %
 
1.9

 
3.9
 %
Tax credits, net
(10.8
)
 
(17.7
)%
 
(1.9
)
 
(3.5
)%
 
(3.5
)
 
(7.2
)%
Nondeductible/nontaxable items
2.1

 
3.5
 %
 
2.3

 
4.2
 %
 
2.9

 
5.8
 %
Other, net
0.9

 
1.3
 %
 
(0.3
)
 
(0.6
)%
 
—

 
0.1
 %
Total taxes on income
$
16.0

 
26.3
 %
 
$
21.0

 
38.4
 %
 
$
18.5

 
37.6
 %
Schedule of deferred tax assets and liabilities 
The components of deferred tax assets and liabilities were as follows (in millions):
 
December 27, 2013
 
December 28, 2012
Deferred tax assets:
 
 
 
Allowance for doubtful accounts
$
2.2

 
$
2.0

Workers’ compensation claims reserve
10.4

 
10.1

Accounts payable and other accrued expenses
2.2

 
2.4

Net operating loss and tax credits carry-forwards
1.1

 
0.6

Accrued wages and benefits
6.8

 
5.9

Deferred compensation
2.2

 
1.5

Other
1.0

 
0.5

Total
25.9

 
23.0

Valuation allowance
(0.8
)
 
(0.6
)
Total deferred tax asset, net of valuation allowance
25.1

 
22.4

Deferred tax liabilities:
 
 
 
Prepaid expenses, deposits and other current assets
(1.7
)
 
(1.6
)
Depreciation and amortization
(10.4
)
 
(11.9
)
Other
(1.2
)
 
(0.9
)
Total deferred tax liabilities
(13.3
)
 
(14.4
)
Net deferred tax asset, end of year
11.8

 
8.0

Net deferred tax asset, current
7.6

 
5.4

Net deferred tax asset, non-current
$
4.2

 
$
2.6

Schedule of unrecognized tax benefits activity 
The following table summarizes the activity related to our unrecognized tax benefits (in millions):
 
2013
 
2012
 
2011
Balance, beginning of fiscal year
$
1.9

 
$
1.7

 
$
1.6

Increases for tax positions related to the current year
0.4

 
0.5

 
0.3

Reductions due to lapsed statute of limitations
(0.3
)
 
(0.3
)
 
(0.2
)
Balance, end of fiscal year
$
2.0

 
$
1.9

 
$
1.7

NET INCOME PER SHARE (Tables)
Schedule of adjusted net income and diluted common shares
Adjusted net income and diluted common shares were calculated as follows (in millions, except per share amounts):
 
2013
 
2012
 
2011
Net income
$
44.9

 
$
33.6

 
$
30.8

 
 
 
 
 
 
Weighted average number of common shares used in basic net income per common share
40.2

 
39.5

 
42.0

Dilutive effect of outstanding stock options and non-vested restricted stock
0.3

 
0.4

 
0.3

Weighted average number of common shares used in diluted net income per common share
40.5

 
39.9

 
42.3

   Net income per common share:
 
 
 
 
 
Basic
$
1.12

 
$
0.85

 
$
0.73

Diluted
$
1.11

 
$
0.84

 
$
0.73

 
 
 
 
 
 
Anti-dilutive shares
0.1

 
0.7

 
1.0

OTHER COMPREHENSIVE INCOME (LOSS) (Tables)
Schedule of Comprehensive Income (Loss)
Changes in the balances of each component of accumulated comprehensive income (loss) during the year ended December 27, 2013 were as follows (in millions):
 
Foreign currency translation adjustment
 
Unrealized loss on marketable securities (1)
 
Total other comprehensive income (loss), net of tax (2)
Balance as of December 28, 2012
$
2.8

 
$
0.0

 
$
2.8

Current-period other comprehensive loss
(0.7
)
 
(0.1
)
 
(0.8
)
Balance as of December 27, 2013
$
2.1

 
$
(0.1
)
 
$
2.0


(1)
Consists of deferred compensation plan accounts, which are comprised of mutual funds, and available-for-sale securities, which are comprised of certificates of deposits.
(2)
The tax impact of the components of other comprehensive income (loss) was immaterial.
SUPPLEMENTAL CASH FLOW INFORMATION (Tables)
Schedule of supplemental cash flow information
Supplemental disclosure of cash flow information (in millions):
 
2013
 
2012
 
2011
Cash paid during the period for:
 
 
 
 
 
Interest
$
1.1

 
$
0.7

 
$
0.8

Income taxes
$
15.6

 
$
21.3

 
$
16.1

QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables)
Schedule of quarterly financial information
 
First
 
Second
 
Third
 
Fourth
2013
 
 
 
 
 
 
 
Revenue from services
$
346,498

 
$
422,310

 
$
451,169

 
$
448,952

Cost of services
259,859

 
310,437

 
327,641

 
328,689

Gross profit
86,639

 
111,873

 
123,528

 
120,263

Selling, general and administrative expenses
88,432

 
89,339

 
90,767

 
93,710

Depreciation and amortization
5,159

 
5,203

 
4,771

 
5,339

Income (loss) from operations
(6,952
)
 
17,331

 
27,990

 
21,214

Interest expense
(233
)
 
(336
)
 
(350
)
 
(329
)
Interest and other income
710

 
611

 
766

 
515

Interest and other income, net
477

 
275

 
416

 
186

Income (loss) before tax expense
(6,475
)
 
17,606

 
28,406

 
21,400

Income tax expense (benefit)
(5,399
)
 
5,069

 
9,454

 
6,889

Net income (loss)
$
(1,076
)
 
$
12,537

 
$
18,952

 
$
14,511

Net income (loss) per common share:
 
 
 
 
 
 
 
Basic
$
(0.03
)
 
$
0.31

 
$
0.47

 
$
0.36

Diluted
$
(0.03
)
 
$
0.31

 
$
0.47

 
$
0.36

2012
 
 
 
 
 
 
 
Revenue from services
$
311,187

 
$
354,261

 
$
379,467

 
$
344,615

Cost of services
231,952

 
260,725

 
274,237

 
250,231

Gross profit
79,235

 
93,536

 
105,230

 
94,384

Selling, general and administrative expenses
72,082

 
71,526

 
77,634

 
79,217

Depreciation and amortization
4,768

 
4,729

 
4,660

 
4,733

Income from operations
2,385

 
17,281

 
22,936

 
10,434

Interest expense
(391
)
 
(244
)
 
(266
)
 
(230
)
Interest and other income
655

 
656

 
675

 
714

Interest and other income, net
264

 
412

 
409

 
484

Income before tax expense
2,649

 
17,693

 
23,345

 
10,918

Income tax expense
1,119

 
7,356

 
8,998

 
3,503

Net income
$
1,530

 
$
10,337

 
$
14,347

 
$
7,415

Net income per common share:
 
 
 
 
 
 
 
Basic
$
0.04

 
$
0.26

 
$
0.36

 
$
0.19

Diluted
$
0.04

 
$
0.26

 
$
0.36

 
$
0.19

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)
Share data in Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2013
segment
customer
branch
state
Dec. 28, 2012
Dec. 30, 2011
Description of business [Abstract]
 
 
 
Number of customers
130,000 
 
 
Number of network branches operated by the Company
757 
 
 
Number of states in which Company operates
50 
 
 
Segment reporting [Abstract]
 
 
 
Number of reportable segments
1 
 
 
Percentage of revenue from international operations
3.10% 
3.50% 
3.80% 
Advertising costs [Abstract]
 
 
 
Advertising expense
$ 4,000,000 
$ 3,700,000 
$ 3,600,000 
Accounts receivable and allowance for doubtful accounts [Abstract]
 
 
 
Allowance for doubtful accounts
$ 5,710,000 
$ 4,999,000 
 
Shares outstanding [Abstract]
 
 
 
Unvested restricted stock included in shares outstanding
0.7 
0.6 
 
Buildings
 
 
 
Plant and equipment [Abstract]
 
 
 
Estimated useful life
40 years 
 
 
Minimum |
Computers and software
 
 
 
Plant and equipment [Abstract]
 
 
 
Estimated useful life
3 years 
 
 
Minimum |
Furniture and equipment
 
 
 
Plant and equipment [Abstract]
 
 
 
Estimated useful life
3 years 
 
 
Maximum |
Computers and software
 
 
 
Plant and equipment [Abstract]
 
 
 
Estimated useful life
10 years 
 
 
Maximum |
Furniture and equipment
 
 
 
Plant and equipment [Abstract]
 
 
 
Estimated useful life
10 years 
 
 
ACQUISITION - Final Allocation of Fair Value of Assets Acquired and Liabilities Assumed (Details) (USD $)
Dec. 27, 2013
Dec. 28, 2012
Dec. 27, 2013
MDT Personnel, LLC
Feb. 4, 2013
MDT Personnel, LLC
Dec. 27, 2013
The Work Connection, Inc.
Oct. 2, 2013
The Work Connection, Inc.
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
 
 
 
 
 
 
Cash
 
 
 
$ 400,000 
 
 
Accounts receivable (1)
 
 
 
29,900,000 1
 
10,200,000 2
Prepaid expenses, deposits and other current assets
 
 
 
600,000 
 
 
Property and equipment
 
 
 
300,000 
 
200,000 
Restricted cash
 
 
 
6,900,000 
 
 
Intangible assets
19,900,000 
 
10,200,000 
10,200,000 
8,200,000 
8,200,000 
Total assets acquired
 
 
 
48,300,000 
 
18,600,000 
Accounts payable
 
 
 
 
 
600,000 
Accounts payable and other accrued expenses
 
 
 
6,300,000 
 
 
Accrued wages and benefits
 
 
 
4,800,000 
 
2,900,000 
Workers' compensation claims reserve
 
 
 
9,400,000 
 
 
Other long-term liabilities
 
 
 
100,000 
 
 
Total liabilities assumed
 
 
 
20,600,000 
 
3,500,000 
Net identifiable assets acquired
 
 
 
27,700,000 
 
15,100,000 
Goodwill
82,239,000 
48,079,000 
 
25,700,000 
 
7,600,000 
Net assets acquired
 
 
 
53,400,000 
 
22,700,000 
Business Combination, Acquired Receivables [Abstract]
 
 
 
 
 
 
Gross contractual accounts receivable
 
 
 
32,900,000 
 
10,400,000 
Estimated uncollectible accounts receivable
 
 
 
$ 3,000,000 
 
$ 200,000 
ACQUISITION - Final Estimate for the Components of Identifiable Intangible Assets and Their Estimated Useful Lives (Details) (USD $)
12 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended
Dec. 27, 2013
Dec. 27, 2013
Customer relationships
Dec. 27, 2013
Trade name/trademarks
Dec. 27, 2013
Non-compete agreement
Dec. 27, 2013
MDT Personnel, LLC
Feb. 4, 2013
MDT Personnel, LLC
Feb. 4, 2013
MDT Personnel, LLC
Customer relationships
Dec. 27, 2013
MDT Personnel, LLC
Customer relationships
Feb. 4, 2013
MDT Personnel, LLC
Trade name/trademarks
Dec. 27, 2013
MDT Personnel, LLC
Trade name/trademarks
Feb. 4, 2013
MDT Personnel, LLC
Non-compete agreement
Dec. 27, 2013
MDT Personnel, LLC
Non-compete agreement
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Estimated Fair Value
$ 19,900,000 
$ 16,800,000 
$ 1,700,000 
$ 1,400,000 
$ 10,200,000 
$ 10,200,000 
$ 7,800,000 
$ 7,800,000 
 
$ 1,000,000 
$ 1,400,000 
$ 1,400,000 
Estimated Useful Life
 
8 years 
1 year 
5 years 
 
 
8 years 
 
1 year 6 months 
 
5 years 
 
ACQUISITION - Pro Forma Financial Data (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Business Acquisition, Pro Forma Information [Abstract]
 
 
Revenue from services
$ 1,693.1 
$ 1,612.5 
Net income
$ 49.0 
$ 25.9 
Net income per common share - diluted (in dollars per share)
$ 1.21 
$ 0.65 
ACQUISITION - Narrative (Details) (USD $)
0 Months Ended 12 Months Ended 1 Months Ended 3 Months Ended 12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Feb. 4, 2013
MDT Personnel, LLC
branch
state
Dec. 27, 2013
MDT Personnel, LLC
Jun. 30, 2013
Crowley Transportation Services, LLC
Dec. 27, 2013
Crowley Transportation Services, LLC
Dec. 27, 2013
The Work Connection, Inc.
Dec. 27, 2013
The Work Connection, Inc.
Oct. 2, 2013
The Work Connection, Inc.
branch
state
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
Acquisition cost, cash paid
 
 
$ 53,400,000 
 
 
 
 
 
 
Estimated Fair Value
19,900,000 
 
10,200,000 
10,200,000 
 
1,500,000 
8,200,000 
8,200,000 
8,200,000 
Number of branch locations operated by acquiree
 
 
105 
 
 
 
 
 
37 
Number of states in which acquiree operates
 
 
25 
 
 
 
 
 
9 
Acquisition-related and integration costs associated with a business combination
 
 
 
6,000,000 
 
 
 
1,200,000 
 
Number of acquired entity's branches consolidated
 
 
65 
 
 
 
 
 
 
Goodwill acquired
82,239,000 
48,079,000 
25,700,000 
 
 
 
 
 
7,600,000 
Accounts receivable (1)
 
 
29,900,000 1
 
 
 
 
 
10,200,000 2
Accrued wages payable
 
 
4,800,000 
 
 
 
 
 
2,900,000 
Total consideration paid
 
 
 
 
2,400,000 
 
22,700,000 
 
 
Contingent consideration
 
 
 
 
$ 600,000 
 
 
 
 
FAIR VALUE MEASUREMENT (Details) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2013
Dec. 28, 2012
Financial assets:
 
 
Marketable securities classified as available-for-sale
$ 20.7 
 
Restricted investments classified as held-to-maturity
86.9 
92.7 
Marketable securities classified as available-for-sale securities due after one year
6.0 1
 
Certificates of deposit
 
 
Financial assets:
 
 
Marketable securities classified as available-for-sale
9.9 
 
Certificates of deposit |
Other assets
 
 
Financial assets:
 
 
Marketable securities classified as available-for-sale securities due after one year
6.0 1
 
Carrying Value
 
 
Financial assets:
 
 
Cash and cash equivalents
122.0 2
129.5 2
Marketable securities classified as available-for-sale
20.7 3
 
Carrying Value |
Restricted Assets
 
 
Financial assets:
 
 
Cash and cash equivalents
57.1 2
38.1 2
Other restricted assets
10.8 4
7.0 4
Restricted investments classified as held-to-maturity
86.7 5
91.2 5
Total Fair Value
 
 
Financial assets:
 
 
Cash and cash equivalents
122.0 2
129.5 2
Marketable securities classified as available-for-sale
20.7 3
 
Total Fair Value |
Restricted Assets
 
 
Financial assets:
 
 
Cash and cash equivalents
57.1 2
38.1 2
Other restricted assets
10.8 4
7.0 4
Restricted investments classified as held-to-maturity
86.9 5
92.7 5
Level 1
 
 
Financial assets:
 
 
Cash and cash equivalents
122.0 2
129.5 2
Marketable securities classified as available-for-sale
0 3
 
Level 1 |
Restricted Assets
 
 
Financial assets:
 
 
Cash and cash equivalents
57.1 2
38.1 2
Other restricted assets
10.8 4
7.0 4
Restricted investments classified as held-to-maturity
0 5
0 5
Level 2
 
 
Financial assets:
 
 
Cash and cash equivalents
0 2
0 2
Marketable securities classified as available-for-sale
20.7 3
 
Level 2 |
Restricted Assets
 
 
Financial assets:
 
 
Cash and cash equivalents
0 2
0 2
Other restricted assets
0 4
0 4
Restricted investments classified as held-to-maturity
86.9 5
92.7 5
Level 3
 
 
Financial assets:
 
 
Cash and cash equivalents
0 2
0 2
Marketable securities classified as available-for-sale
0 3
 
Level 3 |
Restricted Assets
 
 
Financial assets:
 
 
Cash and cash equivalents
0 2
0 2
Other restricted assets
0 4
0 4
Restricted investments classified as held-to-maturity
$ 0 5
$ 0 5
MARKETABLE SECURITIES - Available-for-sale Securities (Details) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2013
Schedule of Available-for-sale Securities [Line Items]
 
Amortized Cost
$ 20.8 
Fair Value
20.7 
Certificates of deposit
 
Schedule of Available-for-sale Securities [Line Items]
 
Amortized Cost
10.0 
Fair Value
9.9 
Variable-rate demand notes
 
Schedule of Available-for-sale Securities [Line Items]
 
Amortized Cost
5.8 
Fair Value
5.8 
Commercial paper
 
Schedule of Available-for-sale Securities [Line Items]
 
Amortized Cost
5.0 
Fair Value
$ 5.0 
MARKETABLE SECURITIES - Available-for-sale Securities by Contractual Maturity (Details) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2013
Available-for-sale Securities, Amortized Cost
 
Due in one year or less
$ 14.8 1
Due after one year
6.0 2
Total
20.8 
Available-for-sale Securities, Fair Value
 
Due in one year or less
14.7 1
Due after one year
6.0 2
Total
$ 20.7 
MARKETABLE SECURITIES - Marketable Securities, Other Disclosure Items (Details)
12 Months Ended
Dec. 27, 2013
Variable-rate demand notes
 
Available-for-sale Securities, Other Disclosure Items [Abstract]
 
Available-for-sale securities, settlement period (less than)
7 days 
Variable-rate demand notes |
Minimum
 
Available-for-sale Securities, Other Disclosure Items [Abstract]
 
Available-for-sale securities due in one year or less, contractual term
2 years 
Variable-rate demand notes |
Maximum
 
Available-for-sale Securities, Other Disclosure Items [Abstract]
 
Available-for-sale securities due in one year or less, contractual term
19 years 
Certificates of deposit |
Minimum
 
Available-for-sale Securities, Other Disclosure Items [Abstract]
 
Available-for-sale securities due after one year, maturity term
1 year 
Certificates of deposit |
Maximum
 
Available-for-sale Securities, Other Disclosure Items [Abstract]
 
Available-for-sale securities due after one year, maturity term
2 years 
RESTRICTED CASH AND INVESTMENTS (Details) (USD $)
Dec. 27, 2013
Dec. 28, 2012
Restricted Cash and Investments [Line Items]
 
 
Cash collateral held by insurance carriers
$ 23,700,000 
$ 21,500,000 
Cash and cash equivalents held in Trust
31,500,000 
14,800,000 1
Cash collateral backing letters of credit
1,900,000 
1,800,000 
Other
10,800,000 
7,000,000 2
Total restricted cash and investments
154,558,000 
136,259,000 
Accrued interest on trust investments
800,000 
900,000 
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract]
 
 
Amortized Cost
86,700,000 
91,200,000 
Gross Unrealized Gain
1,000,000 
1,600,000 
Gross Unrealized Loss
(800,000)
(100,000)
Fair Value
86,900,000 
92,700,000 
Held-to-maturity Securities, Investment Maturities, Amortized Cost [Abstract]
 
 
Due in one year or less
10,200,000 
 
Due after one year through five years
42,100,000 
 
Due after five years through ten years
34,400,000 
 
Amortized Cost
86,700,000 
91,200,000 
Held-to-maturity Securities, Investment Maturities, Fair Value [Abstract]
 
 
Due in one year or less
10,200,000 
 
Due after one year through five years
42,800,000 
 
Due after five years through ten years
33,900,000 
 
Fair Value
86,900,000 
92,700,000 
Municipal debt securities
 
 
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract]
 
 
Amortized Cost
54,100,000 
57,300,000 
Gross Unrealized Gain
700,000 
1,000,000 
Gross Unrealized Loss
(400,000)
(100,000)
Fair Value
54,400,000 
58,200,000 
Held-to-maturity Securities, Investment Maturities, Amortized Cost [Abstract]
 
 
Amortized Cost
54,100,000 
57,300,000 
Held-to-maturity Securities, Investment Maturities, Fair Value [Abstract]
 
 
Fair Value
54,400,000 
58,200,000 
Corporate debt securities
 
 
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract]
 
 
Amortized Cost
19,700,000 
17,900,000 
Gross Unrealized Gain
200,000 
300,000 
Gross Unrealized Loss
(300,000)
0 
Fair Value
19,600,000 
18,200,000 
Held-to-maturity Securities, Investment Maturities, Amortized Cost [Abstract]
 
 
Amortized Cost
19,700,000 
17,900,000 
Held-to-maturity Securities, Investment Maturities, Fair Value [Abstract]
 
 
Fair Value
19,600,000 
18,200,000 
Asset-backed securities
 
 
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract]
 
 
Amortized Cost
12,900,000 
16,000,000 
Gross Unrealized Gain
100,000 
300,000 
Gross Unrealized Loss
(100,000)
0 
Fair Value
12,900,000 
16,300,000 
Held-to-maturity Securities, Investment Maturities, Amortized Cost [Abstract]
 
 
Amortized Cost
12,900,000 
16,000,000 
Held-to-maturity Securities, Investment Maturities, Fair Value [Abstract]
 
 
Fair Value
$ 12,900,000 
$ 16,300,000 
PROPERTY AND EQUIPMENT, NET (Details) (USD $)
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Property and Equipment, Net, by Type [Abstract]
 
 
 
Property and equipment, gross
$ 142,200,000 
$ 135,200,000 
 
Less accumulated depreciation and amortization
(87,700,000)
(77,000,000)
 
Property and equipment, net
54,473,000 
58,171,000 
 
Capitalized software costs, net of accumulated amortization
30,600,000 
30,900,000 
 
Depreciation and amortization of property and equipment
15,500,000 
15,800,000 
13,500,000 
Buildings and land
 
 
 
Property and Equipment, Net, by Type [Abstract]
 
 
 
Property and equipment, gross
27,000,000 
25,900,000 
 
Computers and software
 
 
 
Property and Equipment, Net, by Type [Abstract]
 
 
 
Property and equipment, gross
101,900,000 
91,700,000 
 
Cash dispensing machines
 
 
 
Property and Equipment, Net, by Type [Abstract]
 
 
 
Property and equipment, gross
1,000,000 
1,000,000 
 
Furniture and equipment
 
 
 
Property and Equipment, Net, by Type [Abstract]
 
 
 
Property and equipment, gross
9,400,000 
8,900,000 
 
Construction in progress
 
 
 
Property and Equipment, Net, by Type [Abstract]
 
 
 
Property and equipment, gross
$ 2,900,000 
$ 7,700,000 
 
GOODWILL AND INTANGIBLE ASSETS - Changes in Carrying Amount of Goodwill (Details) (USD $)
12 Months Ended
Dec. 27, 2013
Goodwill, gross
 
Balance at December 28, 2012
$ 94,300,000 
Goodwill acquired year to date
34,100,000 1
Balance at December 27, 2013
128,400,000 
Accumulated Impairment Losses
 
Balance at December 28, 2012
(46,200,000)
Balance at December 27, 2013
(46,200,000)
Goodwill
 
Balance at December 28, 2012
48,079,000 
Goodwill acquired year to date
34,100,000 1
Balance at December 27, 2013
$ 82,239,000 
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets Other Than Goodwill (Details) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2013
Dec. 28, 2012
Amortizable intangible assets (1):
 
 
Gross Carrying Amount
$ 42.9 1
$ 24.4 1
Accumulated Amortization
(17.1)1
(13.5)1
Net Carrying Amount
25.8 1
10.9 1
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
2014
5.8 
 
2014
5.1 
 
2015
4.6 
 
2016
2.6 
 
2017
2.1 
 
Thereafter
5.6 
 
Net Carrying Amount
25.8 1
10.9 1
Trade name/trademarks
 
 
Indefinite-lived intangible assets:
 
 
Indefinite-lived trade name/trademarks
5.7 
5.7 
Customer relationships
 
 
Amortizable intangible assets (1):
 
 
Gross Carrying Amount
35.9 1
19.1 1
Accumulated Amortization
(13.9)1
(10.5)1
Net Carrying Amount
22.0 1
8.6 1
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
Net Carrying Amount
22.0 1
8.6 1
Trade name/trademarks
 
 
Amortizable intangible assets (1):
 
 
Gross Carrying Amount
5.2 1
3.5 1
Accumulated Amortization
(2.7)1
(1.6)1
Net Carrying Amount
2.5 1
1.9 1
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
Net Carrying Amount
2.5 1
1.9 1
Non-compete agreements
 
 
Amortizable intangible assets (1):
 
 
Gross Carrying Amount
1.8 1
1.8 1
Accumulated Amortization
(0.5)1
(1.4)1
Net Carrying Amount
1.3 1
0.4 1
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
Net Carrying Amount
$ 1.3 1
$ 0.4 1
GOODWILL AND INTANGIBLE ASSETS - Components of Intangible Assets Acquired (Details) (USD $)
12 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended
Dec. 27, 2013
Dec. 27, 2013
Customer relationships
Dec. 27, 2013
Trade name/trademarks
Dec. 27, 2013
Non-compete agreements
Dec. 27, 2013
MDT Personnel, LLC
Feb. 4, 2013
MDT Personnel, LLC
Feb. 4, 2013
MDT Personnel, LLC
Customer relationships
Dec. 27, 2013
MDT Personnel, LLC
Customer relationships
Feb. 4, 2013
MDT Personnel, LLC
Trade name/trademarks
Dec. 27, 2013
MDT Personnel, LLC
Trade name/trademarks
Feb. 4, 2013
MDT Personnel, LLC
Non-compete agreements
Dec. 27, 2013
MDT Personnel, LLC
Non-compete agreements
Dec. 27, 2013
Crowley Transportation Services, LLC
Dec. 27, 2013
Crowley Transportation Services, LLC
Customer relationships
Dec. 27, 2013
Crowley Transportation Services, LLC
Trade name/trademarks
Dec. 27, 2013
Crowley Transportation Services, LLC
Non-compete agreements
Dec. 27, 2013
The Work Connection, Inc.
Oct. 2, 2013
The Work Connection, Inc.
Dec. 27, 2013
The Work Connection, Inc.
Customer relationships
Dec. 27, 2013
The Work Connection, Inc.
Trade name/trademarks
Dec. 27, 2013
The Work Connection, Inc.
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Estimated Fair Value
$ 19,900,000 
$ 16,800,000 
$ 1,700,000 
$ 1,400,000 
$ 10,200,000 
$ 10,200,000 
$ 7,800,000 
$ 7,800,000 
 
$ 1,000,000 
$ 1,400,000 
$ 1,400,000 
$ 1,500,000 
$ 1,400,000 
$ 100,000 
$ 0 
$ 8,200,000 
$ 8,200,000 
$ 7,600,000 
$ 600,000 
$ 0 
Weighted Average Life
 
8 years 
1 year 
5 years 
 
 
8 years 
 
1 year 6 months 
 
5 years 
 
 
 
 
 
 
 
 
 
 
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Intangible Assets [Line Items]
 
 
 
Goodwill acquired year to date
$ 34.1 1
 
 
Amortization of intangible assets
4.9 
3.1 
2.9 
Trade name/trademarks
 
 
 
Intangible Assets [Line Items]
 
 
 
Indefinite-lived trade name/trademarks
5.7 
5.7 
 
MDT Personnel, LLC
 
 
 
Intangible Assets [Line Items]
 
 
 
Goodwill acquired year to date
25.7 
 
 
Crowley Transportation Services, LLC
 
 
 
Intangible Assets [Line Items]
 
 
 
Goodwill acquired year to date
0.8 
 
 
The Work Connection, Inc.
 
 
 
Intangible Assets [Line Items]
 
 
 
Goodwill acquired year to date
$ 7.6 
 
 
WORKERS' COMPENSATION INSURANCE AND RESERVES - Reconciliation of Workers' Compensation Claims Reserve (Details) (USD $)
Dec. 27, 2013
Dec. 28, 2012
Workers' Compensation Insurance and Reserves [Abstract]
 
 
Undiscounted workers’ compensation reserve
$ 234,400,000 
$ 216,000,000 
Less discount on workers' compensation reserve
19,600,000 
20,400,000 
Workers' compensation reserve, net of discount
214,800,000 
195,600,000 
Less current portion
49,942,000 
44,652,000 
Long-term portion
$ 164,887,000 
$ 150,937,000 
WORKERS' COMPENSATION INSURANCE AND RESERVES - Expected Future Workers' Compensation Payments (Details) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2013
Dec. 28, 2012
Expected Future Workers' Compensation Payments, Fiscal Year Maturity [Abstract]
 
 
2014
$ 49.9 
 
2015
29.5 
 
2016
18.6 
 
2017
12.9 
 
2018
9.9 
 
2019 and thereafter
59.9 
 
Sub-total
180.7 
 
Excess claims reserve
34.1 
 
Workers' compensation reserve, net of discount
$ 214.8 
$ 195.6 
WORKERS' COMPENSATION INSURANCE AND RESERVES - Narrative (Details) (USD $)
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Workers' Compensation Deductible Limit [Line Items]
 
 
 
Workers' compensation claim deductible limit
$ 2,000,000.0 
 
 
Undiscounted workers’ compensation reserve
234,400,000 
216,000,000 
 
Weighted average period - claim payments and receivables above deductible limit
15 years 6 months 
 
 
Workers compensation valuation allowance
5,700,000 
5,600,000 
 
Workers' compensation claim receivables net of valuation allowance
28,400,000 
21,400,000 
 
Workers' compensation expense
63,200,000 
52,300,000 
51,200,000 
Below limit
 
 
 
Workers' Compensation Deductible Limit [Line Items]
 
 
 
Weighted average discount rate - claims below deductible limit
2.10% 
2.40% 
 
Above limit
 
 
 
Workers' Compensation Deductible Limit [Line Items]
 
 
 
Undiscounted workers’ compensation reserve
34,100,000 
27,100,000 
 
Weighted average discount rate - claims and receivables above deductible limit
3.90% 
 
 
Workers' compensation liability - claims receivable from insurance carriers
$ 34,100,000 
$ 27,100,000 
 
COMMITMENTS AND CONTINGENCIES - Revolving Credit Facility (Details) (Revolving credit facility, Bank of America, N.A. and Wells Fargo Capital Finance, LLC, USD $)
12 Months Ended
Dec. 27, 2013
Revolving Credit Facility [Line Items]
 
Maximum borrowing capacity
$ 80,000,000 
Remaining borrowing capacity
80,000,000.0 
Amount outstanding
6,000,000 
Unused capacity commitment fee percentage
0.25% 
Excess Liquidity Greater than $40 million |
Minimum
 
Revolving Credit Facility [Line Items]
 
Revolving credit facility, excess liquidity
40,000,000 
Excess Liquidity Between $20 million and $40 million |
Minimum
 
Revolving Credit Facility [Line Items]
 
Revolving credit facility, excess liquidity
20,000,000 
Excess Liquidity Between $20 million and $40 million |
Maximum
 
Revolving Credit Facility [Line Items]
 
Revolving credit facility, excess liquidity
40,000,000 
Excess Liquidity Less than $20 million |
Maximum
 
Revolving Credit Facility [Line Items]
 
Revolving credit facility, excess liquidity
20,000,000 
Liquidity requirement component
 
Revolving Credit Facility [Line Items]
 
Remaining borrowing capacity
74,000,000 
Cash and cash equivalents under control agreements
124,500,000 
Revolving credit facility, total liquidity
198,500,000 
Liquidity requirement component |
Minimum
 
Revolving Credit Facility [Line Items]
 
Revolving credit facility, liquidity requirement
12,000,000 
Percent of eligible accounts receivable
 
Revolving Credit Facility [Line Items]
 
Revolving credit facility borrowing limits, % of accounts receivable
85.00% 
Liquidation value of pledged real estate
 
Revolving Credit Facility [Line Items]
 
Revolving credit facility borrowing limits, pledged real estate
15,000,000 
Revolving credit facility borrowing limits, quarterly reduction of pledged real estate
400,000 
Revolving credit facility borrowing limits, liquidation value of pledged real estate
$ 12,000,000 
Prime Rate |
Excess Liquidity Greater than $40 million
 
Revolving Credit Facility [Line Items]
 
Basis spread on variable rate
0.50% 
Prime Rate |
Excess Liquidity Between $20 million and $40 million
 
Revolving Credit Facility [Line Items]
 
Basis spread on variable rate
0.75% 
Prime Rate |
Excess Liquidity Less than $20 million
 
Revolving Credit Facility [Line Items]
 
Basis spread on variable rate
1.00% 
LIBOR Rate
 
Revolving Credit Facility [Line Items]
 
Basis spread on variable rate
0.125% 
LIBOR Rate |
Excess Liquidity Greater than $40 million
 
Revolving Credit Facility [Line Items]
 
Basis spread on variable rate
1.50% 
LIBOR Rate |
Excess Liquidity Between $20 million and $40 million
 
Revolving Credit Facility [Line Items]
 
Basis spread on variable rate
1.75% 
LIBOR Rate |
Excess Liquidity Less than $20 million
 
Revolving Credit Facility [Line Items]
 
Basis spread on variable rate
2.00% 
COMMITMENTS AND CONTINGENCIES - Term Loan Agreement (Details) (USD $)
0 Months Ended 12 Months Ended 0 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Feb. 4, 2013
Synovus Bank
extension
Dec. 27, 2013
Synovus Bank
Feb. 4, 2013
LIBOR Rate
Synovus Bank
Debt Instrument [Line Items]
 
 
 
 
 
Total Borrowing to finance acquisition
 
 
$ 34,000,000 
 
 
Loan maturity period
 
 
5 years 
15 years 
 
Monthly principal payments
 
 
2,300,000 
 
 
Basis spread on variable rate
 
 
 
 
1.50% 
Number of extensions available to Company
 
 
5 
 
 
Extension period
 
 
1 year 
 
 
Interest rate percentage for the term loan at period end
 
 
 
1.70% 
 
Total loan
 
 
 
32,000,000 
 
Short-term loan
 
 
 
2,300,000 
 
Long-term loan
$ 29,656,000 
$ 0 
 
$ 29,700,000 
 
COMMITMENTS AND CONTINGENCIES - Scheduled Principal Repayments (Details) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2013
Long-term Debt, Fiscal Year Maturity [Abstract]
 
2014
$ 2.3 
2015
2.3 
2016
2.3 
2017
2.3 
2018
22.8 
Total principal payments
$ 32.0 
COMMITMENTS AND CONTINGENCIES - Workers' Compensation Commitments (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Workers' Compensation Commitments [Line Items]
 
 
Cash collateral held by insurance carriers
$ 23.7 
$ 21.5 
Cash and cash equivalents held in Trust
31.5 
14.8 1
Investments held in Trust
86.7 
91.2 
Letters of credit
7.9 2
9.0 2
Surety bonds
16.1 3
16.2 3
Total collateral commitments
165.9 
152.7 
Accrued interest on trust investments
0.8 
0.9 
Cash collateral backing letters of credit
$ 1.9 
$ 1.8 
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 
 
COMMITMENTS AND CONTINGENCIES - Capital Leases (Details) (USD $)
Dec. 27, 2013
Dec. 28, 2012
Leases, Capital [Abstract]
 
 
Property held under non-cancelable capital leases
$ 0 
$ 100,000 
COMMITMENTS AND CONTINGENCIES - Operating Leases (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
 
 
 
2014
$ 1.8 
 
 
2015
1.0 
 
 
2016
0.5 
 
 
2017
0.2 
 
 
2018
0.1 
 
 
Total future non-cancelable minimum lease payments
3.6 
 
 
Maximum period afforded to each party to cancel operating lease agreements
90 days 
 
 
Cancellation provision in effect for leases excluded from amounts, maximum period
90 days 
 
 
Rent expense
$ 22.5 
$ 22.0 
$ 22.1 
Minimum
 
 
 
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
 
 
 
Operating leases renewal option period
3 years 
 
 
Maximum
 
 
 
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
 
 
 
Operating leases renewal option period
5 years 
 
 
COMMITMENTS AND CONTINGENCIES - Purchase Obligations (Details) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2013
Contractual Obligation, Fiscal Year Maturity Schedule [Abstract]
 
Purchase obligations
$ 16.8 
Purchase obligations due in 2014
$ 8.9 
STOCKHOLDERS' EQUITY (Details) (USD $)
1 Months Ended 12 Months Ended
Jul. 31, 2011
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Equity [Abstract]
 
 
 
 
Stock repurchase program, authorized amount
$ 75,000,000 
 
 
 
Stock repurchase program, remaining authorized repurchase amount
 
35,200,000 
 
 
Common stock purchased and retired (in shares)
 
0 
306,000 
4,455,000 
Common stock purchased and retired, amount
 
$ 0 
$ 4,386,000 
$ 56,932,000 
Preferred stock, shares authorized
 
20,000,000 
20,000,000 
 
STOCK-BASED COMPENSATION - Components of Stock-based Compensation Expense (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation
$ 8.4 
$ 7.9 
$ 7.4 
Total related tax benefit recognized
2.9 
2.9 
2.8 
Restricted and unrestricted stock and performance share units
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation
8.1 
7.5 
6.7 
Stock options
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation
0 
0.1 
0.4 
Employee stock purchase plan
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation
$ 0.3 
$ 0.3 
$ 0.3 
STOCK-BASED COMPENSATION - Restricted and Unrestricted Stock and Performance Share Units (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended 12 Months Ended
Dec. 27, 2013
May 31, 2013
Incentive Plan
Dec. 27, 2013
Restricted stock
Dec. 28, 2012
Restricted stock
Dec. 30, 2011
Restricted stock
Dec. 27, 2013
Performance shares
Dec. 30, 2011
Performance shares
Dec. 27, 2013
Minimum
Restricted stock
Dec. 27, 2013
Maximum
Restricted stock
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)
1,435,000 
 
 
 
 
 
 
 
 
Granted (in shares)
643,000 
 
 
 
 
 
 
 
 
Vested (in shares)
(437,000)
 
 
 
 
 
 
 
 
Forfeited (in shares)
(97,000)
 
 
 
 
 
 
 
 
Non-vested at the end of the period (in shares)
1,544,000 
 
 
 
 
 
 
 
 
Share-based Compensation by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
 
 
 
 
 
 
 
 
 
Non-vested at beginning of period (in dollars per share)
$ 15.23 
 
 
 
 
 
 
 
 
Granted (in dollars per share)
$ 19.00 
 
 
$ 16.72 
 
 
$ 14.72 
 
 
Vested (in dollars per share)
$ 15.25 
 
 
 
 
 
 
 
 
Forfeited (in dollars per share)
$ 17.45 
 
 
 
 
 
 
 
 
Non-vested at end of the period (in dollars per share)
$ 16.66 
 
 
 
 
 
 
 
 
Shares authorized for issuance (in shares)
 
7,950,000 
 
 
 
 
 
 
 
Vesting period
 
 
 
 
 
3 years 
 
3 years 
4 years 
Number of common stock shares represented by each performance share
1 
 
 
 
 
 
 
 
 
Total unrecognized stock-based compensation expense
 
 
$ 8.3 
 
 
$ 8.1 
 
 
 
Unrecognized stock-based compensation expense for the period identified
 
 
7.4 
 
 
2.8 
 
 
 
Unrecognized stock-based compensation expense, period for recognition
 
 
1 year 8 months 12 days 
 
 
1 year 7 months 6 days 
 
 
 
Fair value of shares vested during period
 
 
$ 4.8 
$ 5.3 
$ 5.2 
 
 
 
 
STOCK-BASED COMPENSATION - Stock Options (Details) (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Closing per share market value of stock (in dollars per share)
$ 25.92 
 
 
Total intrinsic value of options exercised
$ 3.0 
$ 1.9 
 
Cash received form exercise of stock options, net of tax
7.3 
2.5 
0.1 
Tax benefit realized for the deduction from option exercise
1.0 
0.6 
 
Shares
 
 
 
Outstanding, December 28, 2012 (in shares)
639 
 
 
Exercised (in shares)
(454)
 
 
Expired/Forfeited (in shares)
(111)
 
 
Outstanding, December 27, 2013 (in shares)
74 
639 
 
Weighted Average Exercise Price
 
 
 
Outstanding, December 28, 2012 (in dollars per share)
$ 16.91 
 
 
Exercised (in dollars per share)
$ 16.12 
 
 
Expired/Forfeited (in dollars per share)
$ 21.24 
 
 
Outstanding, December 27, 2013 (in dollars per share)
$ 14.99 
$ 16.91 
 
Additional Information on Options Outstanding, December 27, 2013
 
 
 
Weighted Average Remaining Contractual Life
1 year 7 months 24 days 
 
 
Aggregate Intrinsic Value
0.8 
 
 
Exercisable, December 27, 2013
 
 
 
Shares
74 
 
 
Weighted Average Exercise Price (in dollars per share)
$ 14.99 
 
 
Weighted Average Remaining Contractual Life
1 year 7 months 24 days 
 
 
Aggregate Intrinsic Value
$ 0.8 
 
 
Stock option
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Option maximum contractual term
7 years 
 
 
Maximum |
Stock option
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Option maximum contractual term
10 years 
 
 
STOCK-BASED COMPENSATION - Employee Stock Purchase Plan (Details) (Employee stock purchase plan, USD $)
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Employee stock purchase plan
 
 
 
Employee Stock Purchase Plan [Abstract]
 
 
 
ESPP shares reserved for purchase
1,000,000.0 
 
 
Maximum employee subscription rate
10.00% 
 
 
Purchase price of common stock, percent of market value
85.00% 
 
 
Employee stock purchase plan requisite service period
1 month 
 
 
Stock issued under employee stock purchase plan (in shares)
69,000 
95,000 
83,000 
Average Price Per Share
$ 17.10 
$ 12.41 
$ 11.95 
INCOME TAXES - Provision for Income Taxes (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 27, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 28, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Current taxes:
 
 
 
 
 
 
 
 
 
 
 
Federal
 
 
 
 
 
 
 
 
$ 14,200,000 
$ 14,900,000 
$ 16,300,000 
State
 
 
 
 
 
 
 
 
5,100,000 
2,700,000 
2,900,000 
Foreign
 
 
 
 
 
 
 
 
500,000 
300,000 
400,000 
Total current taxes
 
 
 
 
 
 
 
 
19,800,000 
17,900,000 
19,600,000 
Deferred taxes:
 
 
 
 
 
 
 
 
 
 
 
Federal
 
 
 
 
 
 
 
 
(2,800,000)
2,700,000 
(1,300,000)
State
 
 
 
 
 
 
 
 
(1,000,000)
400,000 
100,000 
Foreign
 
 
 
 
 
 
 
 
0 
0 
100,000 
Total deferred taxes
 
 
 
 
 
 
 
 
(3,800,000)
3,100,000 
(1,100,000)
Provision for income taxes
$ 6,889,000 
$ 9,454,000 
$ 5,069,000 
$ (5,399,000)
$ 3,503,000 
$ 8,998,000 
$ 7,356,000 
$ 1,119,000 
$ 16,013,000 
$ 20,976,000 
$ 18,533,000 
INCOME TAXES - Income Tax Reconciliation (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 27, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 28, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Effective Income Tax Rate Reconciliation, Amount [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Income tax expense based on statutory rate
 
 
 
 
 
 
 
 
$ 21,300,000 
$ 19,100,000 
$ 17,200,000 
Increase (decrease) resulting from:
 
 
 
 
 
 
 
 
 
 
 
State income taxes, net of federal benefit
 
 
 
 
 
 
 
 
2,500,000 
1,800,000 
1,900,000 
Tax credits, net
 
 
 
 
 
 
 
 
(10,800,000)
(1,900,000)
(3,500,000)
Nondeductible/nontaxable items
 
 
 
 
 
 
 
 
2,100,000 
2,300,000 
2,900,000 
Other, net
 
 
 
 
 
 
 
 
900,000 
(300,000)
0 
Provision for income taxes
$ 6,889,000 
$ 9,454,000 
$ 5,069,000 
$ (5,399,000)
$ 3,503,000 
$ 8,998,000 
$ 7,356,000 
$ 1,119,000 
$ 16,013,000 
$ 20,976,000 
$ 18,533,000 
Effective Income Tax Rate Reconciliation, Percent [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Income tax expense based on statutory rate
 
 
 
 
 
 
 
 
35.00% 
 
35.00% 
Increase (decrease) resulting from:
 
 
 
 
 
 
 
 
 
 
 
State income taxes, net of federal benefit
 
 
 
 
 
 
 
 
4.20% 
3.30% 
3.90% 
Tax credits, net
 
 
 
 
 
 
 
 
(17.70%)
(3.50%)
(7.20%)
Nondeductible/nontaxable items
 
 
 
 
 
 
 
 
3.50% 
4.20% 
5.80% 
Other, net
 
 
 
 
 
 
 
 
1.30% 
(0.60%)
0.10% 
Total taxes on income
 
 
 
 
 
 
 
 
26.30% 
38.40% 
37.60% 
INCOME TAXES - Deferred Tax Asses and Liabilities (Details) (USD $)
Dec. 27, 2013
Dec. 28, 2012
Deferred tax assets:
 
 
Allowance for doubtful accounts
$ 2,200,000 
$ 2,000,000 
Workers’ compensation claims reserve
10,400,000 
10,100,000 
Accounts payable and other accrued expenses
2,200,000 
2,400,000 
Net operating loss and tax credits carry-forwards
1,100,000 
600,000 
Accrued wages and benefits
6,800,000 
5,900,000 
Deferred compensation
2,200,000 
1,500,000 
Other
1,000,000 
500,000 
Total
25,900,000 
23,000,000 
Valuation allowance
(800,000)
(600,000)
Total deferred tax asset, net of valuation allowance
25,100,000 
22,400,000 
Deferred tax liabilities:
 
 
Prepaid expenses, deposits and other current assets
(1,700,000)
(1,600,000)
Depreciation and amortization
(10,400,000)
(11,900,000)
Other
(1,200,000)
(900,000)
Total deferred tax liabilities
(13,300,000)
(14,400,000)
Net deferred tax asset, end of year
11,800,000 
8,000,000 
Net deferred tax asset, current
7,640,000 
5,447,000 
Net deferred tax asset, non-current
$ 4,213,000 
$ 2,562,000 
INCOME TAXES - Unrecognized Tax Benefits Roll Forward (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Reconciliation of Unrecognized Tax Benefits [Roll Forward]
 
 
 
Balance, beginning of fiscal year
$ 1.9 
$ 1.7 
$ 1.6 
Increases for tax positions related to the current year
0.4 
0.5 
0.3 
Reductions due to lapsed statute of limitations
(0.3)
(0.3)
(0.2)
Balance, end of fiscal year
$ 2.0 
$ 1.9 
$ 1.7 
INCOME TAXES - Narrative (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Dec. 31, 2010
Income Tax Disclosures [Line Items]
 
 
 
 
Effective tax rate
26.30% 
38.40% 
37.60% 
 
Statutory federal income tax rate
35.00% 
 
35.00% 
 
Net operating loss and tax credits carry-forwards
$ 1.1 
$ 0.6 
 
 
Unrecognized tax benefits
2.0 
1.9 
1.7 
1.6 
Unrecognized tax benefits that would impact effective tax rate
1.3 
 
 
 
Income tax penalties accrued
0.2 
 
 
 
Interest on income tax penalties recognized
0.7 
 
 
 
Spartan Staffing Puerto Rico, LLC
 
 
 
 
Income Tax Disclosures [Line Items]
 
 
 
 
Net operating loss carryforwards
2.7 
 
 
 
Labor Ready Southwest, Inc. |
CALIFORNIA
 
 
 
 
Income Tax Disclosures [Line Items]
 
 
 
 
Net operating loss and tax credits carry-forwards
$ 1.0 
 
 
 
DEFINED CONTRIBUTION PLANS (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Compensation and Retirement Disclosure [Abstract]
 
 
 
Deferred compensation liability, current and noncurrent
$ 6.6 
$ 4.2 
 
Deferred compensation expense
$ 1.4 
$ 1.2 
$ 1.1 
NET INCOME PER SHARE (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 28, 2012
Dec. 28, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Earnings Per Share [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$ 14,511 
$ 18,952 
$ 12,537 
$ (1,076)
$ 7,415 
 
$ 14,347 
$ 10,337 
$ 1,530 
$ 44,924 
$ 33,629 
$ 30,791 
Weighted average number of common shares used in basic net income per common share
 
 
 
 
 
 
 
 
 
40,166,000 
39,548,000 
41,961,000 
Dilutive effect of outstanding stock options and non-vested restricted stock
 
 
 
 
 
 
 
 
 
336,000 
364,000 
341,000 
Weighted average number of common shares used in diluted net income per common share
 
 
 
 
 
 
 
 
 
40,502,000 
39,862,000 
42,322,000 
Net income per common share:
 
 
 
 
 
 
 
 
 
 
 
 
Basic (in dollars per share)
$ 0.36 
$ 0.47 
$ 0.31 
$ (0.03)
$ 0.19 
 
$ 0.36 
$ 0.26 
$ 0.04 
$ 1.12 
$ 0.85 
$ 0.73 
Diluted (in dollars per share)
$ 0.36 
$ 0.47 
$ 0.31 
$ (0.03)
$ 0.19 
 
$ 0.36 
$ 0.26 
$ 0.04 
$ 1.11 
$ 0.84 
$ 0.73 
Anti-dilutive shares
 
 
 
 
 
700,000 
 
 
 
100,000 
700,000 
1,000,000 
OTHER COMPREHENSIVE INCOME (LOSS) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
Balance as of December 28, 2012
$ 2,033 
$ 2,818 1
 
Current-period other comprehensive loss
(785)1
175 
(263)
Balance as of December 27, 2013
2,818 1
 
 
Foreign currency translation adjustment
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
Balance as of December 28, 2012
2,100 
 
 
Current-period other comprehensive loss
(689)
 
 
Balance as of December 27, 2013
2,818 
 
 
Unrealized loss on marketable securities
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
Balance as of December 28, 2012
(100)2
 
 
Current-period other comprehensive loss
(96)2
 
 
Balance as of December 27, 2013
$ 0 2
 
 
SUPPLEMENTAL CASH FLOW INFORMATION (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Cash paid during the period for:
 
 
 
Interest
$ 1.1 
$ 0.7 
$ 0.8 
Income taxes
15.6 
21.3 
16.1 
Property, plant and equipment on account that was not yet paid
$ 0.5 
$ 1.6 
 
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 28, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Revenue from services
$ 448,952 
$ 451,169 
$ 422,310 
$ 346,498 
$ 344,615 
$ 379,467 
$ 354,261 
$ 311,187 
$ 1,668,929 
$ 1,389,530 
$ 1,316,013 
Cost of services
328,689 
327,641 
310,437 
259,859 
250,231 
274,237 
260,725 
231,952 
1,226,626 
1,017,145 
968,967 
Gross profit
120,263 
123,528 
111,873 
86,639 
94,384 
105,230 
93,536 
79,235 
442,303 
372,385 
347,046 
Selling, general and administrative expenses
93,710 
90,767 
89,339 
88,432 
79,217 
77,634 
71,526 
72,082 
362,248 
300,459 
282,828 
Depreciation and amortization
5,339 
4,771 
5,203 
5,159 
4,733 
4,660 
4,729 
4,768 
20,472 
18,890 
16,384 
Income from operations
21,214 
27,990 
17,331 
(6,952)
10,434 
22,936 
17,281 
2,385 
59,583 
53,036 
47,834 
Interest expense
(329)
(350)
(336)
(233)
(230)
(266)
(244)
(391)
(1,248)
(1,131)
(1,207)
Interest and other income
515 
766 
611 
710 
714 
675 
656 
655 
2,602 
2,700 
2,697 
Interest and other income, net
186 
416 
275 
477 
484 
409 
412 
264 
1,354 
1,569 
1,490 
Income (loss) before tax expense
21,400 
28,406 
17,606 
(6,475)
10,918 
23,345 
17,693 
2,649 
60,937 
54,605 
49,324 
Income tax expense
6,889 
9,454 
5,069 
(5,399)
3,503 
8,998 
7,356 
1,119 
16,013 
20,976 
18,533 
Net income
$ 14,511 
$ 18,952 
$ 12,537 
$ (1,076)
$ 7,415 
$ 14,347 
$ 10,337 
$ 1,530 
$ 44,924 
$ 33,629 
$ 30,791 
Net income per common share:
 
 
 
 
 
 
 
 
 
 
 
Basic (in dollars per share)
$ 0.36 
$ 0.47 
$ 0.31 
$ (0.03)
$ 0.19 
$ 0.36 
$ 0.26 
$ 0.04 
$ 1.12 
$ 0.85 
$ 0.73 
Diluted (in dollars per share)
$ 0.36 
$ 0.47 
$ 0.31 
$ (0.03)
$ 0.19 
$ 0.36 
$ 0.26 
$ 0.04 
$ 1.11 
$ 0.84 
$ 0.73 
FINANCIAL STATEMENT SCHEDULES (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2013
Dec. 28, 2012
Dec. 30, 2011
Allowance for doubtful accounts
 
 
 
Activity in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance, beginning of the year
$ 5.0 
$ 5.8 
$ 6.4 
Charged to expense
12.1 
7.0 
6.6 
Write-offs
(11.4)
(7.8)
(7.2)
Balance, end of year
5.7 
5.0 
5.8 
Allowance for insurance receivable
 
 
 
Activity in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance, beginning of the year
5.6 
7.3 
7.6 
Charged to expense
0.1 
(1.7)
(0.3)
Balance, end of year
5.7 
5.6 
7.3 
Income tax valuation allowance
 
 
 
Activity in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance, beginning of the year
0.6 
0.5 
0.7 
Charged to expense
0.2 
0.1 
(0.2)
Balance, end of year
$ 0.8 
$ 0.6 
$ 0.5