|
|
|
|
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|
|
Accounts receivable, net of allowance for doubtful accounts (1) | $ | 31.2 | |
Prepaid expenses, deposits and other current assets | 1.2 | ||
Property and equipment, net | 0.5 | ||
Restricted cash and investments | 6.9 | ||
Intangible assets, net | 10.2 | ||
Total assets acquired | 50.0 | ||
Accounts payable and other accrued expenses | 7.4 | ||
Accrued wages and benefits | 2.0 | ||
Workers' compensation claims reserve | 9.8 | ||
Other long-term liabilities | 0.1 | ||
Total liabilities assumed | 19.3 | ||
Net identifiable assets acquired | 30.7 | ||
Goodwill (2) | 22.5 | ||
Net assets acquired | $ | 53.2 |
(1) | The gross contractual amount of accounts receivable is $32.9 million and, of this amount, we expect $1.7 million to be uncollectible. |
(2) | Goodwill is deductible for income tax purposes over 15 years as of March 29, 2013. |
Estimated Fair Value | Estimated Useful Life | ||||
Customer relationships | $ | 7.8 | 8.0 | ||
Trade name/trademarks | 1.0 | 1.5 | |||
Non-compete agreements | 1.4 | 5.0 |
• | differences in our operating cost structure for workers compensation, payroll taxes and other costs of our respective temporary workforce. |
• | potential losses in gross profit due to revenue attrition from combining the two companies. |
• | any costs of restructuring and integration associated with the acquisition. |
Thirteen weeks ended | |||||||
March 29, 2013 | March 30, 2012 | ||||||
Revenue from services | $ | 370.6 | $ | 360.4 | |||
Net income (loss) | (0.2 | ) | 0.3 | ||||
Net income (loss) per common share - diluted | (0.01 | ) | 0.01 |
|
• | 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 restricted investments which primarily consist of Municipal Securities, Corporate Securities, U.S. Agency Mortgages and U.S. Agency Debentures. We obtain our inputs from quoted market prices and independent pricing vendors. |
• | Level 3: Inputs are generally unobservable and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability. We currently have no Level 3 assets or liabilities. |
March 29, 2013 | December 28, 2012 | ||||||
Level 1: | |||||||
Cash equivalents (1) | $ | 95.0 | $ | 94.6 | |||
Restricted cash equivalents (1) | 34.5 | 26.8 | |||||
Other restricted investments (2) | 4.4 | 3.5 | |||||
Level 2: | |||||||
Restricted investments classified as held-to-maturity (3) | 89.5 | 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) | Level 1 other restricted investments consist of deferred compensation investments which are comprised of mutual funds. We have an equal and offsetting accrued liability related to the deferred compensation plan. |
(3) | Level 2 restricted investments classified as held-to-maturity consist of Municipal Securities, Corporate Securities, U.S. Agency Mortgages and U.S. Agency Debentures. |
|
March 29, 2013 | December 28, 2012 | ||||||
Cash collateral held by insurance carriers | $ | 28.1 | $ | 21.5 | |||
Cash and cash equivalents held in Trust (1) | 17.6 | 14.8 | |||||
Investments held in Trust | 87.8 | 91.2 | |||||
Cash collateral backing letters of credit | 1.8 | 1.8 | |||||
Other (2) | 9.1 | 7.0 | |||||
Total restricted cash and investments | $ | 144.4 | $ | 136.3 |
(1) | Included in this amount is $0.9 million of accrued interest at both March 29, 2013 and December 28, 2012. |
(2) | Primarily consists of restricted cash in money market accounts and deferred compensation plan accounts which are comprised of mutual funds. |
March 29, 2013 | |||||||||||||||
Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Municipal securities | $ | 54.4 | $ | 1.1 | $ | (0.1 | ) | $ | 55.4 | ||||||
Corporate bonds | 18.6 | 0.3 | — | 18.9 | |||||||||||
Asset backed bonds | 14.8 | 0.4 | — | 15.2 | |||||||||||
$ | 87.8 | $ | 1.8 | $ | (0.1 | ) | $ | 89.5 |
December 28, 2012 | |||||||||||||||
Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Municipal securities | $ | 57.3 | $ | 1.0 | $ | (0.1 | ) | $ | 58.2 | ||||||
Corporate bonds | 17.9 | 0.3 | — | 18.2 | |||||||||||
Asset backed bonds | 16.0 | 0.3 | — | 16.3 | |||||||||||
$ | 91.2 | $ | 1.6 | $ | (0.1 | ) | $ | 92.7 |
March 29, 2013 | |||||||
Amortized Cost | Fair Value | ||||||
Due in one year or less | $ | 12.3 | $ | 12.3 | |||
Due after one year through five years | 43.7 | 44.7 | |||||
Due after five years through ten years | 31.8 | 32.5 | |||||
$ | 87.8 | $ | 89.5 |
|
March 29, 2013 | December 28, 2012 | ||||||
Buildings and land | $ | 26.0 | $ | 25.9 | |||
Computers and software | 92.8 | 91.7 | |||||
Cash dispensing machines | 1.0 | 1.0 | |||||
Furniture and equipment | 9.0 | 8.9 | |||||
Construction in progress | 9.7 | 7.7 | |||||
138.5 | 135.2 | ||||||
Less accumulated depreciation and amortization | (80.8 | ) | (77.0 | ) | |||
$ | 57.7 | $ | 58.2 |
|
Goodwill | Accumulated Impairment Losses | Goodwill, net | |||||||
Balance at December 28, 2012 | $ | 94.3 | $ | (46.2 | ) | $ | 48.1 | ||
Goodwill acquired during the year | 22.5 | — | 22.5 | ||||||
Impairment losses | — | — | — | ||||||
Balance at March 29, 2013 | $ | 116.8 | $ | (46.2 | ) | $ | 70.6 |
March 29, 2013 | December 28, 2012 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Amortizable intangible assets (1): | |||||||||||||||||||||||
Customer relationships (2) | $ | 26.9 | $ | (11.2 | ) | $ | 15.7 | $ | 19.1 | $ | (10.5 | ) | $ | 8.6 | |||||||||
Trade name/trademarks (2) | 4.9 | (2.2 | ) | 2.7 | 3.5 | (1.6 | ) | 1.9 | |||||||||||||||
Non-compete agreements (2) | 1.8 | (0.2 | ) | 1.6 | 1.8 | (1.4 | ) | 0.4 | |||||||||||||||
$ | 33.6 | $ | (13.6 | ) | $ | 20.0 | $ | 24.4 | $ | (13.5 | ) | $ | 10.9 | ||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||
Trade name/trademarks | $ | 5.7 | $ | 5.7 |
(1) | Excludes assets that are fully amortized. |
(2) | Includes customer relationships, trade name, and non-compete agreement resulting from the MDT acquisition with preliminary values of $7.8 million, $1.0 million, and $1.4 million, respectively. |
Remainder of 2013 | $ | 2.1 | |
2014 | 4.3 | ||
2015 | 3.9 | ||
2016 | 3.9 | ||
2017 | 2.4 | ||
Thereafter | 3.4 | ||
$ | 20.0 |
|
• | changes in medical and time loss (“indemnity”) costs; |
• | changes in mix between medical only and indemnity claims; |
• | regulatory and legislative developments that have increased benefits and settlement requirements; |
• | type and location of work performed; |
• | impact of safety initiatives; and |
• | positive or adverse development of claim reserves. |
|
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% |
March 29, 2013 | December 28, 2012 | ||||||
Cash collateral held by insurance carriers | $ | 28.1 | $ | 21.5 | |||
Cash and cash equivalents held in Trust (1) | 17.6 | 14.8 | |||||
Investments held in Trust | 87.8 | 91.2 | |||||
Letters of credit (2) | 8.5 | 9.0 | |||||
Surety bonds (3) | 15.9 | 16.2 | |||||
Total collateral commitments | $ | 157.9 | $ | 152.7 |
(1) | Included in this amount is $0.9 million of accrued interest at both March 29, 2013 and December 28, 2012. |
(2) | We have agreements with certain financial institutions to issue letters of credit as collateral. We had $1.8 million of restricted cash collateralizing our letters of credit at both March 29, 2013 and December 28, 2012. |
(3) | Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which is determined by each independent surety carrier, but do not exceed 2.0% of the bond amount, subject to a minimum charge. The terms of these bonds are subject to review and renewal every one to four years and most bonds can be canceled by the sureties with as little as 60 days notice. |
|
Thirteen weeks ended | |||||||
March 29, 2013 | March 30, 2012 | ||||||
Restricted and unrestricted stock and performance share units expense | $ | 2.8 | $ | 2.8 | |||
ESPP expense | 0.1 | 0.1 | |||||
Total stock-based compensation expense | $ | 2.9 | $ | 2.9 |
Shares | Price (1) | |||||
Non-vested at beginning of period | 1,435 | $ | 15.23 | |||
Granted | 548 | $ | 18.31 | |||
Vested | (396 | ) | $ | 15.36 | ||
Forfeited | (72 | ) | $ | 17.65 | ||
Non-vested at the end of the period | 1,515 | $ | 16.20 |
(1) | Weighted average market price on grant-date. |
Shares | Weighted Average Exercise Price | |||||
Outstanding, December 28, 2012 | 639 | $ | 16.91 | |||
Exercised | (152 | ) | $ | 13.31 | ||
Expired/Forfeited | (124 | ) | $ | 21.04 | ||
Outstanding, March 29, 2013 | 363 | $ | 17.02 | |||
Exercisable, March 29, 2013 | 363 | $ | 17.02 |
|
|
Thirteen weeks ended | |||||||
March 29, 2013 | March 30, 2012 | ||||||
Net income (loss) | $ | (1.1 | ) | $ | 1.5 | ||
Weighted average number of common shares used in basic net income (loss) per common share | 39.8 | 39.4 | |||||
Dilutive effect of outstanding stock options and non-vested restricted stock | — | 0.5 | |||||
Weighted average number of common shares used in diluted net income (loss) per common share | 39.8 | 39.9 | |||||
Net income (loss) per common share: | |||||||
Basic | $ | (0.03 | ) | $ | 0.04 | ||
Diluted | $ | (0.03 | ) | $ | 0.04 | ||
Anti-dilutive shares | 0.3 | 0.7 |
|
Thirteen weeks ended | |||||||
March 29, 2013 | March 30, 2012 | ||||||
Cash paid during the period for: | |||||||
Interest | $ | 0.2 | $ | 0.2 | |||
Income taxes | $ | 0.2 | $ | 0.8 |
|
|
|
Thirteen weeks ended | |||||||
March 29, 2013 | March 30, 2012 | ||||||
Revenue from services | $ | 370.6 | $ | 360.4 | |||
Net income (loss) | (0.2 | ) | 0.3 | ||||
Net income (loss) per common share - diluted | (0.01 | ) | 0.01 |
Accounts receivable, net of allowance for doubtful accounts (1) | $ | 31.2 | |
Prepaid expenses, deposits and other current assets | 1.2 | ||
Property and equipment, net | 0.5 | ||
Restricted cash and investments | 6.9 | ||
Intangible assets, net | 10.2 | ||
Total assets acquired | 50.0 | ||
Accounts payable and other accrued expenses | 7.4 | ||
Accrued wages and benefits | 2.0 | ||
Workers' compensation claims reserve | 9.8 | ||
Other long-term liabilities | 0.1 | ||
Total liabilities assumed | 19.3 | ||
Net identifiable assets acquired | 30.7 | ||
Goodwill (2) | 22.5 | ||
Net assets acquired | $ | 53.2 |
(1) | The gross contractual amount of accounts receivable is $32.9 million and, of this amount, we expect $1.7 million to be uncollectible. |
(2) | Goodwill is deductible for income tax purposes over 15 years as of March 29, 2013. |
Estimated Fair Value | Estimated Useful Life | ||||
Customer relationships | $ | 7.8 | 8.0 | ||
Trade name/trademarks | 1.0 | 1.5 | |||
Non-compete agreements | 1.4 | 5.0 |
|
March 29, 2013 | December 28, 2012 | ||||||
Level 1: | |||||||
Cash equivalents (1) | $ | 95.0 | $ | 94.6 | |||
Restricted cash equivalents (1) | 34.5 | 26.8 | |||||
Other restricted investments (2) | 4.4 | 3.5 | |||||
Level 2: | |||||||
Restricted investments classified as held-to-maturity (3) | 89.5 | 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) | Level 1 other restricted investments consist of deferred compensation investments which are comprised of mutual funds. We have an equal and offsetting accrued liability related to the deferred compensation plan. |
(3) | Level 2 restricted investments classified as held-to-maturity consist of Municipal Securities, Corporate Securities, U.S. Agency Mortgages and U.S. Agency Debentures. |
|
March 29, 2013 | December 28, 2012 | ||||||
Cash collateral held by insurance carriers | $ | 28.1 | $ | 21.5 | |||
Cash and cash equivalents held in Trust (1) | 17.6 | 14.8 | |||||
Investments held in Trust | 87.8 | 91.2 | |||||
Cash collateral backing letters of credit | 1.8 | 1.8 | |||||
Other (2) | 9.1 | 7.0 | |||||
Total restricted cash and investments | $ | 144.4 | $ | 136.3 |
(1) | Included in this amount is $0.9 million of accrued interest at both March 29, 2013 and December 28, 2012. |
(2) | Primarily consists of restricted cash in money market accounts and deferred compensation plan accounts which are comprised of mutual funds. |
March 29, 2013 | |||||||||||||||
Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Municipal securities | $ | 54.4 | $ | 1.1 | $ | (0.1 | ) | $ | 55.4 | ||||||
Corporate bonds | 18.6 | 0.3 | — | 18.9 | |||||||||||
Asset backed bonds | 14.8 | 0.4 | — | 15.2 | |||||||||||
$ | 87.8 | $ | 1.8 | $ | (0.1 | ) | $ | 89.5 |
December 28, 2012 | |||||||||||||||
Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||
Municipal securities | $ | 57.3 | $ | 1.0 | $ | (0.1 | ) | $ | 58.2 | ||||||
Corporate bonds | 17.9 | 0.3 | — | 18.2 | |||||||||||
Asset backed bonds | 16.0 | 0.3 | — | 16.3 | |||||||||||
$ | 91.2 | $ | 1.6 | $ | (0.1 | ) | $ | 92.7 |
March 29, 2013 | |||||||
Amortized Cost | Fair Value | ||||||
Due in one year or less | $ | 12.3 | $ | 12.3 | |||
Due after one year through five years | 43.7 | 44.7 | |||||
Due after five years through ten years | 31.8 | 32.5 | |||||
$ | 87.8 | $ | 89.5 |
|
March 29, 2013 | December 28, 2012 | ||||||
Buildings and land | $ | 26.0 | $ | 25.9 | |||
Computers and software | 92.8 | 91.7 | |||||
Cash dispensing machines | 1.0 | 1.0 | |||||
Furniture and equipment | 9.0 | 8.9 | |||||
Construction in progress | 9.7 | 7.7 | |||||
138.5 | 135.2 | ||||||
Less accumulated depreciation and amortization | (80.8 | ) | (77.0 | ) | |||
$ | 57.7 | $ | 58.2 |
|
Goodwill | Accumulated Impairment Losses | Goodwill, net | |||||||
Balance at December 28, 2012 | $ | 94.3 | $ | (46.2 | ) | $ | 48.1 | ||
Goodwill acquired during the year | 22.5 | — | 22.5 | ||||||
Impairment losses | — | — | — | ||||||
Balance at March 29, 2013 | $ | 116.8 | $ | (46.2 | ) | $ | 70.6 |
March 29, 2013 | December 28, 2012 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Amortizable intangible assets (1): | |||||||||||||||||||||||
Customer relationships (2) | $ | 26.9 | $ | (11.2 | ) | $ | 15.7 | $ | 19.1 | $ | (10.5 | ) | $ | 8.6 | |||||||||
Trade name/trademarks (2) | 4.9 | (2.2 | ) | 2.7 | 3.5 | (1.6 | ) | 1.9 | |||||||||||||||
Non-compete agreements (2) | 1.8 | (0.2 | ) | 1.6 | 1.8 | (1.4 | ) | 0.4 | |||||||||||||||
$ | 33.6 | $ | (13.6 | ) | $ | 20.0 | $ | 24.4 | $ | (13.5 | ) | $ | 10.9 | ||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||
Trade name/trademarks | $ | 5.7 | $ | 5.7 |
(1) | Excludes assets that are fully amortized. |
(2) | Includes customer relationships, trade name, and non-compete agreement resulting from the MDT acquisition with preliminary values of $7.8 million, $1.0 million, and $1.4 million, respectively. |
Remainder of 2013 | $ | 2.1 | |
2014 | 4.3 | ||
2015 | 3.9 | ||
2016 | 3.9 | ||
2017 | 2.4 | ||
Thereafter | 3.4 | ||
$ | 20.0 |
|
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% |
March 29, 2013 | December 28, 2012 | ||||||
Cash collateral held by insurance carriers | $ | 28.1 | $ | 21.5 | |||
Cash and cash equivalents held in Trust (1) | 17.6 | 14.8 | |||||
Investments held in Trust | 87.8 | 91.2 | |||||
Letters of credit (2) | 8.5 | 9.0 | |||||
Surety bonds (3) | 15.9 | 16.2 | |||||
Total collateral commitments | $ | 157.9 | $ | 152.7 |
(1) | Included in this amount is $0.9 million of accrued interest at both March 29, 2013 and December 28, 2012. |
(2) | We have agreements with certain financial institutions to issue letters of credit as collateral. We had $1.8 million of restricted cash collateralizing our letters of credit at both March 29, 2013 and December 28, 2012. |
(3) | Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which is determined by each independent surety carrier, but do not exceed 2.0% of the bond amount, subject to a minimum charge. The terms of these bonds are subject to review and renewal every one to four years and most bonds can be canceled by the sureties with as little as 60 days notice. |
|
Thirteen weeks ended | |||||||
March 29, 2013 | March 30, 2012 | ||||||
Restricted and unrestricted stock and performance share units expense | $ | 2.8 | $ | 2.8 | |||
ESPP expense | 0.1 | 0.1 | |||||
Total stock-based compensation expense | $ | 2.9 | $ | 2.9 |
Shares | Price (1) | |||||
Non-vested at beginning of period | 1,435 | $ | 15.23 | |||
Granted | 548 | $ | 18.31 | |||
Vested | (396 | ) | $ | 15.36 | ||
Forfeited | (72 | ) | $ | 17.65 | ||
Non-vested at the end of the period | 1,515 | $ | 16.20 |
(1) | Weighted average market price on grant-date. |
Shares | Weighted Average Exercise Price | |||||
Outstanding, December 28, 2012 | 639 | $ | 16.91 | |||
Exercised | (152 | ) | $ | 13.31 | ||
Expired/Forfeited | (124 | ) | $ | 21.04 | ||
Outstanding, March 29, 2013 | 363 | $ | 17.02 | |||
Exercisable, March 29, 2013 | 363 | $ | 17.02 |
|
Thirteen weeks ended | |||||||
March 29, 2013 | March 30, 2012 | ||||||
Net income (loss) | $ | (1.1 | ) | $ | 1.5 | ||
Weighted average number of common shares used in basic net income (loss) per common share | 39.8 | 39.4 | |||||
Dilutive effect of outstanding stock options and non-vested restricted stock | — | 0.5 | |||||
Weighted average number of common shares used in diluted net income (loss) per common share | 39.8 | 39.9 | |||||
Net income (loss) per common share: | |||||||
Basic | $ | (0.03 | ) | $ | 0.04 | ||
Diluted | $ | (0.03 | ) | $ | 0.04 | ||
Anti-dilutive shares | 0.3 | 0.7 |
|
Thirteen weeks ended | |||||||
March 29, 2013 | March 30, 2012 | ||||||
Cash paid during the period for: | |||||||
Interest | $ | 0.2 | $ | 0.2 | |||
Income taxes | $ | 0.2 | $ | 0.8 |
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