|
|
|
|
|
|
|
Purchase Price Allocation | |||
Cash purchase price, net of working capital adjustment | $ | 71,863 | |
Purchase price allocated as follows: | |||
Accounts receivable | $ | 12,272 | |
Prepaid expenses, deposits and other current assets | 281 | ||
Customer relationships (1) | 34,900 | ||
Technologies | 400 | ||
Total assets acquired | 47,853 | ||
Accrued wages and benefits (1) | 1,025 | ||
Other long-term liabilities (1) | 456 | ||
Total liabilities assumed | 1,481 | ||
Net identifiable assets acquired | 46,372 | ||
Goodwill (2) | 25,491 | ||
Total consideration allocated | $ | 71,863 |
(1) | The preliminary purchase price allocation was adjusted for changes resulting in a net reduction in goodwill of $0.5 million. |
(2) | Goodwill represents the expected synergies with our existing business, the acquired assembled workforce, potential new customers, and future cash flows after the acquisition of the RPO business of Aon Hewitt. Goodwill is deductible for income tax purposes over 15 years as of January 4, 2016. |
Estimated Fair Value | Estimated Useful Lives in Years | ||||
Customer relationships | $ | 34,900 | 9.0 | ||
Technologies | 400 | 3.0 | |||
Total acquired identifiable intangible assets | $ | 35,300 |
Purchase Price Allocation | |||
Purchase price: | |||
Cash purchase price, net of working capital adjustment | $ | 66,603 | |
Contingent consideration | 18,300 | ||
Total consideration | $ | 84,903 | |
Purchase price allocated as follows: | |||
Accounts receivable (1) | $ | 19,207 | |
Prepaid expenses, deposits and other current assets | 461 | ||
Property and equipment | 464 | ||
Customer relationships | 39,000 | ||
Trade name/trademarks | 800 | ||
Technologies | 100 | ||
Restricted cash | 4,277 | ||
Other non-current assets | 2,439 | ||
Total assets acquired | 66,748 | ||
Accounts payable and other accrued expenses | 3,741 | ||
Accrued wages and benefits | 4,075 | ||
Workers' compensation liability | 8,520 | ||
Total liabilities assumed | 16,336 | ||
Net identifiable assets acquired | 50,412 | ||
Goodwill (2) | 34,491 | ||
Total consideration allocated | $ | 84,903 |
(1) | The gross contractual amount of accounts receivable was $19.3 million of which $0.1 million was estimated to be uncollectible. |
(2) | Goodwill represents the expected synergies with our existing business, the acquired assembled workforce, potential new customers, and future cash flows after the acquisition of SIMOS. Goodwill is deductible for income tax purposes over 15 years as of December 1, 2015. |
Estimated Fair Value | Estimated Useful Lives in Years | ||||
Customer relationships | $ | 39,000 | 9.0 | ||
Trade name/trademarks | 800 | 3.0 | |||
Technologies | 100 | 2.0 | |||
Total acquired identifiable intangible assets | $ | 39,900 |
|
June 24, 2016 | |||||||||||||||
Total Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Financial assets: | |||||||||||||||
Cash and cash equivalents (1) | $ | 21,772 | $ | 21,772 | $ | — | $ | — | |||||||
Restricted cash and cash equivalents (1) | 51,643 | 51,643 | — | — | |||||||||||
Other restricted assets (2) | 14,320 | 14,320 | — | — | |||||||||||
Restricted investments classified as held-to-maturity | 142,553 | — | 142,553 | — | |||||||||||
Financial liabilities: | |||||||||||||||
Contingent consideration (3) | 19,300 | — | — | 19,300 |
December 25, 2015 | |||||||||||||||
Total Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Financial assets: | |||||||||||||||
Cash and cash equivalents (1) | $ | 29,781 | $ | 29,781 | $ | — | $ | — | |||||||
Restricted cash and cash equivalents (1) | 49,680 | 49,680 | — | — | |||||||||||
Other restricted assets (2) | 11,944 | 11,944 | — | — | |||||||||||
Restricted investments classified as held to maturity | 128,245 | — | 128,245 | — | |||||||||||
Financial liabilities: | |||||||||||||||
Contingent consideration (3) | 19,300 | — | — | 19,300 |
(1) | Cash equivalents and restricted cash equivalents consist of money market funds, deposits, and investments with original maturities of three months or less. |
(2) | Other restricted assets primarily consist of deferred compensation plan accounts, which are comprised of mutual funds classified as available-for-sale securities. |
(3) | The estimated fair value of the contingent consideration associated with the acquisition of SIMOS, which was estimated using a probability-adjusted discounted cash flow model. Refer to Note 2: Acquisitions for further details regarding the SIMOS acquisition. |
Fair value measurement at beginning of period | $ | 19,300 | ||
Contingent consideration liability adjustment recorded for final purchase price valuation | (1,000 | ) | ||
Accretion on contingent consideration | 1,000 | |||
Fair value measurement at end of period | $ | 19,300 |
June 24, 2016 | |||||||||||||||||||
Total Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Impairment Loss | |||||||||||||||
Goodwill | $ | 42,629 | $ | — | $ | — | $ | 42,629 | $ | (65,869 | ) | ||||||||
Customer relationships | 11,100 | — | — | 11,100 | (28,900 | ) | |||||||||||||
Trade names/trademarks | 3,600 | — | — | 3,600 | (4,500 | ) | |||||||||||||
Total | $ | (99,269 | ) |
|
June 24, 2016 | December 25, 2015 | ||||||
Cash collateral held by insurance carriers | $ | 26,438 | $ | 23,634 | |||
Cash and cash equivalents held in Trust | 25,205 | 26,046 | |||||
Investments held in Trust | 138,391 | 126,788 | |||||
Other (1) | 14,320 | 11,944 | |||||
Total restricted cash and investments | $ | 204,354 | $ | 188,412 |
(1) | Primarily consists of deferred compensation plan accounts, which are comprised of mutual funds classified as available-for-sale securities. |
June 24, 2016 | |||||||||||||||
Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Municipal debt securities | $ | 65,231 | $ | 2,587 | $ | — | $ | 67,818 | |||||||
Corporate debt securities | 66,007 | 1,461 | (2 | ) | 67,466 | ||||||||||
Agency mortgage-backed securities | 7,153 | 117 | (1 | ) | 7,269 | ||||||||||
$ | 138,391 | $ | 4,165 | $ | (3 | ) | $ | 142,553 |
December 25, 2015 | |||||||||||||||
Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Municipal debt securities | $ | 67,948 | $ | 1,345 | $ | (4 | ) | $ | 69,289 | ||||||
Corporate debt securities | 50,462 | 226 | (152 | ) | 50,536 | ||||||||||
Agency mortgage-backed securities | 8,378 | 73 | (31 | ) | 8,420 | ||||||||||
$ | 126,788 | $ | 1,644 | $ | (187 | ) | $ | 128,245 |
June 24, 2016 | |||||||
Amortized Cost | Fair Value | ||||||
Due in one year or less | $ | 16,580 | $ | 16,649 | |||
Due after one year through five years | 68,592 | 69,916 | |||||
Due after five years through ten years | 53,219 | 55,988 | |||||
$ | 138,391 | $ | 142,553 |
|
June 24, 2016 | December 25, 2015 | ||||||
Buildings and land | $ | 33,234 | $ | 32,258 | |||
Computers and software | 129,321 | 126,003 | |||||
Furniture and equipment | 12,102 | 12,362 | |||||
Construction in progress | 12,742 | 4,757 | |||||
Gross property and equipment | 187,399 | 175,380 | |||||
Less accumulated depreciation | (127,084 | ) | (117,850 | ) | |||
Property and equipment, net | $ | 60,315 | $ | 57,530 |
|
Staffing Services | Managed Services | Total Company | |||||||||
Balance at December 25, 2015 | |||||||||||
Goodwill before impairment | $ | 210,281 | $ | 104,424 | $ | 314,705 | |||||
Accumulated impairment loss | (46,210 | ) | — | (46,210 | ) | ||||||
Goodwill, net | 164,071 | 104,424 | 268,495 | ||||||||
Acquired goodwill and other (1) | (3,831 | ) | 25,491 | 21,660 | |||||||
Impairment loss | (50,700 | ) | (15,169 | ) | (65,869 | ) | |||||
Foreign currency translation | — | 942 | 942 | ||||||||
Balance at June 24, 2016 | |||||||||||
Goodwill before impairment | 206,450 | 130,857 | 337,307 | ||||||||
Accumulated impairment loss | (96,910 | ) | (15,169 | ) | (112,079 | ) | |||||
Goodwill, net | $ | 109,540 | $ | 115,688 | $ | 225,228 |
June 24, 2016 | December 25, 2015 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Finite-lived intangible assets (1): | |||||||||||||||||||||||
Customer relationships (2) | $ | 166,983 | $ | (46,499 | ) | $ | 120,484 | $ | 161,376 | $ | (36,846 | ) | $ | 124,530 | |||||||||
Trade names/trademarks | 10,859 | (4,841 | ) | 6,018 | 5,179 | (3,447 | ) | 1,732 | |||||||||||||||
Non-compete agreements | 1,800 | (1,357 | ) | 443 | 1,800 | (1,177 | ) | 623 | |||||||||||||||
Technologies | 17,209 | (7,872 | ) | 9,337 | 17,310 | (6,536 | ) | 10,774 | |||||||||||||||
Total finite-lived intangible assets | $ | 196,851 | $ | (60,569 | ) | $ | 136,282 | $ | 185,665 | $ | (48,006 | ) | $ | 137,659 |
(1) | Excludes assets that are fully amortized. |
(2) | Balance at June 24, 2016, is net of impairment loss of $28.9 million. |
Remainder of 2016 | $ | 12,454 | |
2016 | 23,150 | ||
2017 | 21,792 | ||
2018 | 17,363 | ||
2019 | 15,687 | ||
Thereafter | 45,836 | ||
Total future amortization | $ | 136,282 |
• | Staff Management | SMX (Exclusive recruitment and on-premise management of a facility's contingent industrial workforce) - In April 2016, we were notified by Amazon and reported their plans to reduce the use of contingent labor and realign their contingent labor vendors for warehousing. They are reducing the use of our services for their warehouse fulfillment centers in the United States and focus our services on their planned expansion of distribution service sites to a national network for delivery direct to the customer. Amazon is our largest customer and represented approximately $354 million, or 13.1%, of total company revenues for the fiscal year ended December 25, 2015, and $106 million, or 8.0%, of total company revenues for the twenty-six weeks ended June 24, 2016, and $125 million, or 10.4%, for the comparable period in the prior year. We estimate that the change in scope of our services will decrease revenues for the remainder of 2016 by approximately $125 million, compared to the prior year. We have lowered our future expectations, which triggered a goodwill impairment of $33.7 million. |
• | PlaneTechs (Skilled mechanics and technicians to the aviation and transportation industries) - Year-to-date revenues have declined in excess of 30% compared to the prior year as significant projects have been completed for a major aviation customer and their supply chain. There currently are no significant projects in the pipeline. PlaneTechs has been diversifying from providing services to one primary customer without offsetting growth in the broader aviation and transportation marketplace. As a result of significantly underperforming against current year expectations and increased future uncertainty, we have lowered our future expectations, which triggered a goodwill impairment of $17.0 million. |
• | hrX - (Outsourced recruitment of permanent employees on behalf of clients) - Sales of this service line include our internally developed applicant tracking software (“ATS”). Actual stand alone ATS sales and service were $3.4 million for fiscal 2015 and have recently declined. ATS sales and prospects have underperformed against our expectations. As a result of underperforming against our current year expectations and increased future uncertainty in customer demand, we lowered our future expectations, which triggered a goodwill impairment of $15.2 million. |
|
June 24, 2016 | December 25, 2015 | ||||||
Undiscounted workers’ compensation reserve | $ | 292,742 | $ | 284,306 | |||
Less discount on workers' compensation reserve | 18,624 | 18,026 | |||||
Workers' compensation reserve, net of discount | 274,118 | 266,280 | |||||
Less current portion | 66,216 | 69,308 | |||||
Long-term portion | $ | 207,902 | $ | 196,972 |
• | 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. |
|
June 24, 2016 | December 25, 2015 | |||||||
Revolving Credit Facility | $ | 123,900 | $ | 218,086 | ||||
Term Loan | 26,445 | 27,578 | ||||||
Total debt | 150,345 | 245,664 | ||||||
Less current portion | 2,267 | 2,267 | ||||||
Long-term debt, less current portion | $ | 148,078 | $ | 243,397 |
|
June 24, 2016 | December 25, 2015 | ||||||
Cash collateral held by workers' compensation insurance carriers | $ | 25,938 | $ | 23,133 | |||
Cash and cash equivalents held in Trust | 25,205 | 26,046 | |||||
Investments held in Trust | 138,391 | 126,788 | |||||
Letters of credit (1) | 4,520 | 4,520 | |||||
Surety bonds (2) | 17,992 | 17,946 | |||||
Total collateral commitments | $ | 212,046 | $ | 198,433 |
(1) | We have agreements with certain financial institutions to issue letters of credit as collateral. |
(2) | Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which are determined by each independent surety carrier. These fees do not exceed 2.0% of the bond amount, subject to a minimum charge. The terms of these bonds are subject to review and renewal every one to four years and most bonds can be canceled by the sureties with as little as 60 days' notice. |
|
Shares | Weighted- average grant-date price | |||||
Non-vested at beginning of period | 1,218 | $ | 22.63 | |||
Granted | 540 | $ | 21.63 | |||
Vested | (415 | ) | $ | 20.04 | ||
Forfeited | (47 | ) | $ | 19.90 | ||
Non-vested at the end of the period | 1,296 | $ | 23.04 |
|
|
|
Thirteen weeks ended | Twenty-six weeks ended | ||||||||||||||
June 24, 2016 | June 26, 2015 | June 24, 2016 | June 26, 2015 | ||||||||||||
Net income (loss) | $ | (63,735 | ) | $ | 17,273 | $ | (56,767 | ) | $ | 22,989 | |||||
Weighted average number of common shares used in basic net income (loss) per common share | 41,688 | 41,240 | 41,595 | 41,135 | |||||||||||
Dilutive effect of non-vested restricted stock | — | 235 | — | 337 | |||||||||||
Weighted average number of common shares used in diluted net income (loss) per common share | 41,688 | 41,475 | 41,595 | 41,472 | |||||||||||
Net income (loss) per common share: | |||||||||||||||
Basic | $ | (1.53 | ) | $ | 0.42 | $ | (1.36 | ) | $ | 0.56 | |||||
Diluted | $ | (1.53 | ) | $ | 0.42 | $ | (1.36 | ) | $ | 0.55 | |||||
Anti-dilutive shares | 527 | 106 | 446 | 189 |
|
Foreign currency translation adjustment | Unrealized gain (loss) on investments (1) | Total other comprehensive income (loss), net of tax | |||||||||
Balance at beginning of period | $ | (13,514 | ) | $ | (499 | ) | $ | (14,013 | ) | ||
Current-period other comprehensive income | 2,094 | 162 | 2,256 | ||||||||
Balance at end of period | $ | (11,420 | ) | $ | (337 | ) | $ | (11,757 | ) |
(1) | Consists of deferred compensation plan accounts, which are comprised of mutual funds classified as available-for-sale securities. The tax impact on unrealized gain on marketable securities was de minimis for the twenty-six weeks ended June 24, 2016. |
|
Twenty-six weeks ended | |||||||
June 24, 2016 | June 26, 2015 | ||||||
Cash paid (received) during the period for: | |||||||
Interest | $ | 1,981 | $ | 1,863 | |||
Income taxes | $ | (3,845 | ) | $ | 3,939 |
|
• | Labor Ready: On-demand general labor; |
• | Spartan Staffing: Skilled manufacturing and logistics labor; |
• | CLP Resources: Skilled trades for commercial, industrial, and energy construction as well as building and plant maintenance; |
• | PlaneTechs: Skilled mechanics and technicians to the aviation and transportation industries; |
• | Centerline Drivers: Temporary and dedicated drivers to the transportation and distribution industries; |
• | Staff Management | SMX: Exclusive recruitment and on-premise management of a facility's contingent industrial workforce; and, |
• | SIMOS: On-premise management and recruitment of a facility's contingent industrial workforce. |
• | PeopleScout: Outsourced recruitment of permanent employees on behalf of clients; and |
• | Staff Management (MSP): Management of multiple third party staffing vendors on behalf of clients. |
Thirteen weeks ended | Twenty-six weeks ended | ||||||||||||||
June 24, 2016 | June 26, 2015 | June 24, 2016 | June 26, 2015 | ||||||||||||
Revenue from services | |||||||||||||||
Staffing Services | $ | 625,660 | $ | 601,103 | $ | 1,228,113 | $ | 1,150,815 | |||||||
Managed Services | 46,952 | 26,611 | 90,479 | 50,214 | |||||||||||
Total Company | $ | 672,612 | $ | 627,714 | $ | 1,318,592 | $ | 1,201,029 | |||||||
Income (loss) from operations | |||||||||||||||
Staffing Services | $ | (49,453 | ) | $ | 38,834 | $ | (30,248 | ) | $ | 63,117 | |||||
Managed Services | (2,935 | ) | 4,326 | 5,895 | 7,750 | ||||||||||
Depreciation and amortization | (11,694 | ) | (10,397 | ) | (22,983 | ) | (20,917 | ) | |||||||
Corporate unallocated | (12,744 | ) | (9,053 | ) | (20,891 | ) | (18,517 | ) | |||||||
Total Company | (76,826 | ) | 23,710 | (68,227 | ) | 31,433 | |||||||||
Interest and other expense, net | (887 | ) | (202 | ) | (1,906 | ) | (736 | ) | |||||||
Income (loss) before tax expense | $ | (77,713 | ) | $ | 23,508 | $ | (70,133 | ) | $ | 30,697 |
|
|
|
Purchase Price Allocation | |||
Cash purchase price, net of working capital adjustment | $ | 71,863 | |
Purchase price allocated as follows: | |||
Accounts receivable | $ | 12,272 | |
Prepaid expenses, deposits and other current assets | 281 | ||
Customer relationships (1) | 34,900 | ||
Technologies | 400 | ||
Total assets acquired | 47,853 | ||
Accrued wages and benefits (1) | 1,025 | ||
Other long-term liabilities (1) | 456 | ||
Total liabilities assumed | 1,481 | ||
Net identifiable assets acquired | 46,372 | ||
Goodwill (2) | 25,491 | ||
Total consideration allocated | $ | 71,863 |
(1) | The preliminary purchase price allocation was adjusted for changes resulting in a net reduction in goodwill of $0.5 million. |
(2) | Goodwill represents the expected synergies with our existing business, the acquired assembled workforce, potential new customers, and future cash flows after the acquisition of the RPO business of Aon Hewitt. Goodwill is deductible for income tax purposes over 15 years as of January 4, 2016. |
Estimated Fair Value | Estimated Useful Lives in Years | ||||
Customer relationships | $ | 34,900 | 9.0 | ||
Technologies | 400 | 3.0 | |||
Total acquired identifiable intangible assets | $ | 35,300 |
Purchase Price Allocation | |||
Purchase price: | |||
Cash purchase price, net of working capital adjustment | $ | 66,603 | |
Contingent consideration | 18,300 | ||
Total consideration | $ | 84,903 | |
Purchase price allocated as follows: | |||
Accounts receivable (1) | $ | 19,207 | |
Prepaid expenses, deposits and other current assets | 461 | ||
Property and equipment | 464 | ||
Customer relationships | 39,000 | ||
Trade name/trademarks | 800 | ||
Technologies | 100 | ||
Restricted cash | 4,277 | ||
Other non-current assets | 2,439 | ||
Total assets acquired | 66,748 | ||
Accounts payable and other accrued expenses | 3,741 | ||
Accrued wages and benefits | 4,075 | ||
Workers' compensation liability | 8,520 | ||
Total liabilities assumed | 16,336 | ||
Net identifiable assets acquired | 50,412 | ||
Goodwill (2) | 34,491 | ||
Total consideration allocated | $ | 84,903 |
(1) | The gross contractual amount of accounts receivable was $19.3 million of which $0.1 million was estimated to be uncollectible. |
(2) | Goodwill represents the expected synergies with our existing business, the acquired assembled workforce, potential new customers, and future cash flows after the acquisition of SIMOS. Goodwill is deductible for income tax purposes over 15 years as of December 1, 2015. |
Estimated Fair Value | Estimated Useful Lives in Years | ||||
Customer relationships | $ | 39,000 | 9.0 | ||
Trade name/trademarks | 800 | 3.0 | |||
Technologies | 100 | 2.0 | |||
Total acquired identifiable intangible assets | $ | 39,900 |
|
June 24, 2016 | |||||||||||||||||||
Total Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Impairment Loss | |||||||||||||||
Goodwill | $ | 42,629 | $ | — | $ | — | $ | 42,629 | $ | (65,869 | ) | ||||||||
Customer relationships | 11,100 | — | — | 11,100 | (28,900 | ) | |||||||||||||
Trade names/trademarks | 3,600 | — | — | 3,600 | (4,500 | ) | |||||||||||||
Total | $ | (99,269 | ) |
June 24, 2016 | |||||||||||||||
Total Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Financial assets: | |||||||||||||||
Cash and cash equivalents (1) | $ | 21,772 | $ | 21,772 | $ | — | $ | — | |||||||
Restricted cash and cash equivalents (1) | 51,643 | 51,643 | — | — | |||||||||||
Other restricted assets (2) | 14,320 | 14,320 | — | — | |||||||||||
Restricted investments classified as held-to-maturity | 142,553 | — | 142,553 | — | |||||||||||
Financial liabilities: | |||||||||||||||
Contingent consideration (3) | 19,300 | — | — | 19,300 |
December 25, 2015 | |||||||||||||||
Total Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Financial assets: | |||||||||||||||
Cash and cash equivalents (1) | $ | 29,781 | $ | 29,781 | $ | — | $ | — | |||||||
Restricted cash and cash equivalents (1) | 49,680 | 49,680 | — | — | |||||||||||
Other restricted assets (2) | 11,944 | 11,944 | — | — | |||||||||||
Restricted investments classified as held to maturity | 128,245 | — | 128,245 | — | |||||||||||
Financial liabilities: | |||||||||||||||
Contingent consideration (3) | 19,300 | — | — | 19,300 |
(1) | Cash equivalents and restricted cash equivalents consist of money market funds, deposits, and investments with original maturities of three months or less. |
(2) | Other restricted assets primarily consist of deferred compensation plan accounts, which are comprised of mutual funds classified as available-for-sale securities. |
(3) | The estimated fair value of the contingent consideration associated with the acquisition of SIMOS, which was estimated using a probability-adjusted discounted cash flow model. Refer to Note 2: Acquisitions for further details regarding the SIMOS acquisition. |
Fair value measurement at beginning of period | $ | 19,300 | ||
Contingent consideration liability adjustment recorded for final purchase price valuation | (1,000 | ) | ||
Accretion on contingent consideration | 1,000 | |||
Fair value measurement at end of period | $ | 19,300 |
|
June 24, 2016 | December 25, 2015 | ||||||
Cash collateral held by insurance carriers | $ | 26,438 | $ | 23,634 | |||
Cash and cash equivalents held in Trust | 25,205 | 26,046 | |||||
Investments held in Trust | 138,391 | 126,788 | |||||
Other (1) | 14,320 | 11,944 | |||||
Total restricted cash and investments | $ | 204,354 | $ | 188,412 |
(1) | Primarily consists of deferred compensation plan accounts, which are comprised of mutual funds classified as available-for-sale securities. |
June 24, 2016 | |||||||||||||||
Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Municipal debt securities | $ | 65,231 | $ | 2,587 | $ | — | $ | 67,818 | |||||||
Corporate debt securities | 66,007 | 1,461 | (2 | ) | 67,466 | ||||||||||
Agency mortgage-backed securities | 7,153 | 117 | (1 | ) | 7,269 | ||||||||||
$ | 138,391 | $ | 4,165 | $ | (3 | ) | $ | 142,553 |
December 25, 2015 | |||||||||||||||
Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Municipal debt securities | $ | 67,948 | $ | 1,345 | $ | (4 | ) | $ | 69,289 | ||||||
Corporate debt securities | 50,462 | 226 | (152 | ) | 50,536 | ||||||||||
Agency mortgage-backed securities | 8,378 | 73 | (31 | ) | 8,420 | ||||||||||
$ | 126,788 | $ | 1,644 | $ | (187 | ) | $ | 128,245 |
June 24, 2016 | |||||||
Amortized Cost | Fair Value | ||||||
Due in one year or less | $ | 16,580 | $ | 16,649 | |||
Due after one year through five years | 68,592 | 69,916 | |||||
Due after five years through ten years | 53,219 | 55,988 | |||||
$ | 138,391 | $ | 142,553 |
|
June 24, 2016 | December 25, 2015 | ||||||
Buildings and land | $ | 33,234 | $ | 32,258 | |||
Computers and software | 129,321 | 126,003 | |||||
Furniture and equipment | 12,102 | 12,362 | |||||
Construction in progress | 12,742 | 4,757 | |||||
Gross property and equipment | 187,399 | 175,380 | |||||
Less accumulated depreciation | (127,084 | ) | (117,850 | ) | |||
Property and equipment, net | $ | 60,315 | $ | 57,530 |
|
Staffing Services | Managed Services | Total Company | |||||||||
Balance at December 25, 2015 | |||||||||||
Goodwill before impairment | $ | 210,281 | $ | 104,424 | $ | 314,705 | |||||
Accumulated impairment loss | (46,210 | ) | — | (46,210 | ) | ||||||
Goodwill, net | 164,071 | 104,424 | 268,495 | ||||||||
Acquired goodwill and other (1) | (3,831 | ) | 25,491 | 21,660 | |||||||
Impairment loss | (50,700 | ) | (15,169 | ) | (65,869 | ) | |||||
Foreign currency translation | — | 942 | 942 | ||||||||
Balance at June 24, 2016 | |||||||||||
Goodwill before impairment | 206,450 | 130,857 | 337,307 | ||||||||
Accumulated impairment loss | (96,910 | ) | (15,169 | ) | (112,079 | ) | |||||
Goodwill, net | $ | 109,540 | $ | 115,688 | $ | 225,228 |
June 24, 2016 | December 25, 2015 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Finite-lived intangible assets (1): | |||||||||||||||||||||||
Customer relationships (2) | $ | 166,983 | $ | (46,499 | ) | $ | 120,484 | $ | 161,376 | $ | (36,846 | ) | $ | 124,530 | |||||||||
Trade names/trademarks | 10,859 | (4,841 | ) | 6,018 | 5,179 | (3,447 | ) | 1,732 | |||||||||||||||
Non-compete agreements | 1,800 | (1,357 | ) | 443 | 1,800 | (1,177 | ) | 623 | |||||||||||||||
Technologies | 17,209 | (7,872 | ) | 9,337 | 17,310 | (6,536 | ) | 10,774 | |||||||||||||||
Total finite-lived intangible assets | $ | 196,851 | $ | (60,569 | ) | $ | 136,282 | $ | 185,665 | $ | (48,006 | ) | $ | 137,659 |
(1) | Excludes assets that are fully amortized. |
(2) | Balance at June 24, 2016, is net of impairment loss of $28.9 million. |
Remainder of 2016 | $ | 12,454 | |
2016 | 23,150 | ||
2017 | 21,792 | ||
2018 | 17,363 | ||
2019 | 15,687 | ||
Thereafter | 45,836 | ||
Total future amortization | $ | 136,282 |
|
June 24, 2016 | December 25, 2015 | ||||||
Undiscounted workers’ compensation reserve | $ | 292,742 | $ | 284,306 | |||
Less discount on workers' compensation reserve | 18,624 | 18,026 | |||||
Workers' compensation reserve, net of discount | 274,118 | 266,280 | |||||
Less current portion | 66,216 | 69,308 | |||||
Long-term portion | $ | 207,902 | $ | 196,972 |
|
June 24, 2016 | December 25, 2015 | |||||||
Revolving Credit Facility | $ | 123,900 | $ | 218,086 | ||||
Term Loan | 26,445 | 27,578 | ||||||
Total debt | 150,345 | 245,664 | ||||||
Less current portion | 2,267 | 2,267 | ||||||
Long-term debt, less current portion | $ | 148,078 | $ | 243,397 |
|
June 24, 2016 | December 25, 2015 | ||||||
Cash collateral held by workers' compensation insurance carriers | $ | 25,938 | $ | 23,133 | |||
Cash and cash equivalents held in Trust | 25,205 | 26,046 | |||||
Investments held in Trust | 138,391 | 126,788 | |||||
Letters of credit (1) | 4,520 | 4,520 | |||||
Surety bonds (2) | 17,992 | 17,946 | |||||
Total collateral commitments | $ | 212,046 | $ | 198,433 |
(1) | We have agreements with certain financial institutions to issue letters of credit as collateral. |
(2) | Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which are determined by each independent surety carrier. These fees do not exceed 2.0% of the bond amount, subject to a minimum charge. The terms of these bonds are subject to review and renewal every one to four years and most bonds can be canceled by the sureties with as little as 60 days' notice. |
|
Shares | Weighted- average grant-date price | |||||
Non-vested at beginning of period | 1,218 | $ | 22.63 | |||
Granted | 540 | $ | 21.63 | |||
Vested | (415 | ) | $ | 20.04 | ||
Forfeited | (47 | ) | $ | 19.90 | ||
Non-vested at the end of the period | 1,296 | $ | 23.04 |
|
Thirteen weeks ended | Twenty-six weeks ended | ||||||||||||||
June 24, 2016 | June 26, 2015 | June 24, 2016 | June 26, 2015 | ||||||||||||
Net income (loss) | $ | (63,735 | ) | $ | 17,273 | $ | (56,767 | ) | $ | 22,989 | |||||
Weighted average number of common shares used in basic net income (loss) per common share | 41,688 | 41,240 | 41,595 | 41,135 | |||||||||||
Dilutive effect of non-vested restricted stock | — | 235 | — | 337 | |||||||||||
Weighted average number of common shares used in diluted net income (loss) per common share | 41,688 | 41,475 | 41,595 | 41,472 | |||||||||||
Net income (loss) per common share: | |||||||||||||||
Basic | $ | (1.53 | ) | $ | 0.42 | $ | (1.36 | ) | $ | 0.56 | |||||
Diluted | $ | (1.53 | ) | $ | 0.42 | $ | (1.36 | ) | $ | 0.55 | |||||
Anti-dilutive shares | 527 | 106 | 446 | 189 |
|
Foreign currency translation adjustment | Unrealized gain (loss) on investments (1) | Total other comprehensive income (loss), net of tax | |||||||||
Balance at beginning of period | $ | (13,514 | ) | $ | (499 | ) | $ | (14,013 | ) | ||
Current-period other comprehensive income | 2,094 | 162 | 2,256 | ||||||||
Balance at end of period | $ | (11,420 | ) | $ | (337 | ) | $ | (11,757 | ) |
(1) | Consists of deferred compensation plan accounts, which are comprised of mutual funds classified as available-for-sale securities. The tax impact on unrealized gain on marketable securities was de minimis for the twenty-six weeks ended June 24, 2016. |
|
Twenty-six weeks ended | |||||||
June 24, 2016 | June 26, 2015 | ||||||
Cash paid (received) during the period for: | |||||||
Interest | $ | 1,981 | $ | 1,863 | |||
Income taxes | $ | (3,845 | ) | $ | 3,939 |
|
Thirteen weeks ended | Twenty-six weeks ended | ||||||||||||||
June 24, 2016 | June 26, 2015 | June 24, 2016 | June 26, 2015 | ||||||||||||
Revenue from services | |||||||||||||||
Staffing Services | $ | 625,660 | $ | 601,103 | $ | 1,228,113 | $ | 1,150,815 | |||||||
Managed Services | 46,952 | 26,611 | 90,479 | 50,214 | |||||||||||
Total Company | $ | 672,612 | $ | 627,714 | $ | 1,318,592 | $ | 1,201,029 | |||||||
Income (loss) from operations | |||||||||||||||
Staffing Services | $ | (49,453 | ) | $ | 38,834 | $ | (30,248 | ) | $ | 63,117 | |||||
Managed Services | (2,935 | ) | 4,326 | 5,895 | 7,750 | ||||||||||
Depreciation and amortization | (11,694 | ) | (10,397 | ) | (22,983 | ) | (20,917 | ) | |||||||
Corporate unallocated | (12,744 | ) | (9,053 | ) | (20,891 | ) | (18,517 | ) | |||||||
Total Company | (76,826 | ) | 23,710 | (68,227 | ) | 31,433 | |||||||||
Interest and other expense, net | (887 | ) | (202 | ) | (1,906 | ) | (736 | ) | |||||||
Income (loss) before tax expense | $ | (77,713 | ) | $ | 23,508 | $ | (70,133 | ) | $ | 30,697 |
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