Segment Disclosures

Our current reportable segments are (i) North American Staffing, (ii) International Staffing and (iii) Technology Outsourcing Services and Solutions. The non-reportable businesses are combined and disclosed with corporate services under the category Corporate and Other. Accordingly, all prior periods have been recast to reflect the current segment presentation. The change in reportable segments did not have any impact on previously reported consolidated financial results.

Segment operating income (loss) is comprised of segment net revenue less cost of services, selling, administrative and other operating costs, restructuring and severance costs, gain from divestitures and settlement and impairment charges. The Company allocates to the segments all operating costs except for costs not directly related to the operating activities such as corporate-wide general and administrative costs. These costs are not allocated because doing so would not enhance the understanding of segment operating performance and are not used by management to measure segment performance.

Effective in the first quarter of fiscal 2017, in an effort to simplify and refine its internal reporting, the Company modified its intersegment sales structure between North American Staffing and Technology Outsourcing Services and Solutions segments. The resulting changes were as follows:


•	Intersegment revenue for North American Staffing from Technology Outsourcing Services and Solutions is based on a set percentage of direct labor dollars for recruiting and administrative services; and


•	The direct labor costs associated with the contingent employees placed by North American Staffing on behalf of Technology Outsourcing Services and Solutions’ customers are directly borne by the Technology Outsourcing Services and Solutions segment instead of by North American Staffing.

To provide period over period comparability, the Company has reclassified the prior period segment data to conform to the current presentation. This change did not have any impact on the consolidated financial results for any period presented.

We report our segment information in accordance with the provisions of FASB ASC Topic 280. The Company is currently assessing potential changes to its reportable segments after the sale of the quality assurance business on October 27, 2017, and expects to complete this assessment in the first quarter of fiscal 2018.

Financial data concerning the Company’s segment revenue and operating income (loss) as well as results from Corporate and Other are summarized in the following tables (in thousands):



	Year Ended October 29, 2017
	Total			North American Staffing		International Staffing		Technology Outsourcing Services and Solutions		Corporate and Other (1)			Eliminations (2)
Net revenue	$	1,194,436		$	919,260	$	119,762	$	100,847	$	61,025		$	(6,458	)
Cost of services	1,007,041			782,405		101,064		80,358		49,672			(6,458		)
Gross margin	187,395			136,855		18,698		20,489		11,353			—

Selling, administrative and other operating costs	197,130			119,320		15,836		14,496		47,478			—
Restructuring and severance costs	1,379			382		14		39		944			—
Gain from divestitures	(51,971		)	—		—		—		(51,971		)	—
Settlement and impairment charges	1,694			—		—		—		1,694			—
Operating income	39,163			17,153		2,848		5,954		13,208			—
Other income (expense), net	(6,950		)
Income tax provision	3,388
Net income from continuing operations	28,825
Loss from discontinued operations, net of income taxes	(1,693		)
Net income	$	27,132



	Year Ended October 30, 2016
	Total			North American Staffing		International Staffing		Technology Outsourcing Services and Solutions		Corporate and Other (1)			Eliminations (2)
Net revenue	$	1,334,747		$	994,346	$	131,496	$	106,585	$	114,772		$	(12,452	)
Cost of services	1,132,253			847,483		112,035		87,731		97,456			(12,452		)
Gross margin	202,494			146,863		19,461		18,854		17,316			—

Selling, administrative and other operating costs	203,930			122,576		16,402		13,029		51,923			—
Restructuring and severance costs	5,752			1,117		702		327		3,606			—
Gain from divestitures	(1,663		)	—		—		—		(1,663		)	—
Settlement and impairment charges	364			—		—		—		364			—
Operating income (loss)	(5,889		)	23,170		2,357		5,498		(36,914		)	—
Other income (expense), net	(6,506		)
Income tax provision	2,175
Net loss	$	(14,570	)



	Year Ended November 1, 2015
	Total			North American Staffing		International Staffing		Technology Outsourcing Services and Solutions		Corporate and Other (1)			Eliminations (2)
Net revenue	$	1,496,897		$	1,059,847	$	147,649	$	135,886	$	168,422		$	(14,907	)
Cost of services	1,268,363			907,422		127,699		108,309		139,840			(14,907		)
Gross margin	228,534			152,425		19,950		27,577		28,582			—

Selling, administrative and other operating costs	231,033			131,277		18,990		15,545		65,221			—
Restructuring and severance costs	3,635			705		357				2,573			—
Settlement and impairment charges	6,626			1,900		—		—		4,726			—
Operating income (loss)	(12,760		)	18,543		603		12,032		(43,938		)	—
Other income (expense), net	(2,380		)
Income tax provision	4,646
Net loss from continuing operations	(19,786		)
Loss from discontinued operations, net of income taxes	(4,834		)
Net loss	$	(24,620	)

(1) Revenues are primarily derived from managed service programs and information technology infrastructure services.

(2) The majority of intersegment sales results from North American Staffing providing resources to Technology Outsourcing Services and Solutions.

Assets of the Company by reportable operating segment are summarized in the following table (in thousands):



	October 29, 2017		October 30, 2016
Assets:
North American Staffing	$	128,695	$	135,620
International Staffing	36,773		36,279
Technology Outsourcing Services and Solutions (a)	12,095		34,038
Corporate & Other	107,246		92,948
Total segments	284,809		298,885
Held for sale	—		17,580
Total Assets	$	284,809	$	316,465

(a) As of October 29, 2017, excludes the assets sold with the quality assurance business.

Sales to external customers and long-lived assets of the Company by geographic area are as follows (in thousands):



	Year Ended
	October 29, 2017		October 30, 2016		November 1, 2015
Net Revenue:
Domestic	$	1,036,567	$	1,148,254	$	1,273,971
International, principally Europe	157,869		186,493		222,926
Total Net Revenue	$	1,194,436	$	1,334,747	$	1,496,897



	October 29, 2017		October 30, 2016
Long-Lived Assets:
Domestic	$	27,777	$	27,113
International	1,344		3,020
Total Long-Lived Assets	$	29,121	$	30,133

Capital expenditures and depreciation and amortization by the Company’s operating segments are as follows (in thousands):



	Year Ended
	October 29, 2017		October 30, 2016		November 1, 2015
Capital Expenditures:
North American Staffing	$	279	$	480	$	422
International Staffing	144		893		324
Technology Outsourcing Services and Solutions	899		1,339		2,265
Corporate & Other	7,990		14,838		5,541
Total Capital Expenditures	$	9,312	$	17,550	$	8,552

Depreciation and Amortization:
North American Staffing	$	543	$	517	$	619
International Staffing	374		345		332
Technology Outsourcing Services and Solutions	1,659		1,728		1,172
Corporate & Other	5,449		3,379		4,688
Total Depreciation and Amortization	$	8,025	$	5,969	$	6,811