Impairment Charges

12 Months Ended

Nov. 03, 2019

Restructuring and Related Activities [Abstract]

Impairment of Property, Equipment and Software

In fiscal 2019, there was a $0.3 million impairment of equipment used in the customer care solutions business, which was exited in June 2019. In addition, the Company recorded a $0.3 million impairment charge for previously purchased software that will no longer be used, as well as a $0.1 million impairment charge on equipment from closed facilities. In fiscal 2018, the Company recorded an impairment charge of $0.5 million for previously purchased software no longer in use.

Impairment of Goodwill

The Company performs its annual impairment test for goodwill during the second quarter of the fiscal year and when a triggering event occurs between annual impairment tests. For the fiscal 2019 test performed in the second quarter, we elected to bypass the qualitative assessment and prepared a Step 1 analysis. Our Step 1 analysis used significant assumptions including expected revenue and expense growth rates, forecasted capital expenditures, working capital levels and a discount rate of 15%. Under the market-based approach significant assumptions included relevant comparable company earnings multiples including the determination of whether a premium or discount should be applied to those comparables. During the second quarter of fiscal 2019, it was determined that no adjustment to the carrying value of goodwill of $5.4 million was required as our Step 1 analysis resulted in the fair value of the reporting unit exceeding its carrying value.

The following represents the change in the carrying amount of goodwill during each fiscal year (in thousands):



	International Staffing
	October 28, 2018			Foreign Currency Translation Adjustment		November 3, 2019
Aggregate goodwill acquired	$	10,483		$	—	$	10,483
Accumulated impairment losses	(3,733		)	—		(3,733		)
Foreign currency translation adjustment	(1,399		)	46		(1,353		)
Goodwill, net of impairment losses	$	5,351		$	46	$	5,397

Restructuring and Severance Charges

The Company incurred total restructuring and severance costs of $4.7 million and $8.2 million for fiscal 2019 and 2018, respectively.

2018 Restructuring Plan

On October 16, 2018, the Company approved a restructuring plan (the “2018 Plan”) based on an organizational and process redesign intended to optimize the Company’s strategic growth initiatives and overall business performance. In connection with the 2018 Plan, the Company incurred restructuring charges comprised of severance and benefit costs and facility and lease termination costs. The 2018 Plan was completed by the end of fiscal 2019. The total costs since inception through November 3, 2019 were approximately $5.4 million, consisting of $1.1 million in North American Staffing, $0.4 million in International Staffing and $3.9 million in Corporate and Other. As of November 3, 2019, the Company anticipates payments of $0.9 million will be made in fiscal 2020. The remaining $1.3 million related to facility and lease termination costs will be paid through December 2025.

Change in Executive Management

Effective June 6, 2018, Michael Dean departed from his role as President and Chief Executive Officer of the Company and is no longer a member of the Board of Directors of the Company (the “Board of Directors”). The Company and Mr. Dean subsequently executed a separation agreement, effective June 29, 2018. The Company incurred related severance costs of $2.6 million in the third quarter of fiscal 2018, which is payable over a period of 24 months.

Effective August 23, 2019, Paul Tomkins stepped down from his role as Senior Vice President and Chief Financial Officer of the Company. The Company and Mr. Tomkins subsequently executed a separation agreement, effective September 11, 2019. The Company incurred related severance costs of $0.9 million in the fourth quarter of fiscal 2019, which is payable over a period of 12 months beginning November 2019.

Exit of Customer Care Solutions Business

In June 2019, the Company exited its customer care solutions business, which is currently reported as a part of the Corporate and Other category. This exit will enable the Company to further strengthen its focus on its core staffing business, align its resources to streamline operations, improve cost competitiveness and increase profitability. As a result of this exit, the Company incurred restructuring and severance costs of $2.1 million during fiscal 2019.

Other Restructuring Costs

During fiscal 2019 and 2018, there were other restructuring actions taken by the Company as part of its continued efforts to reduce costs and achieve operational efficiency. The Company recorded severance costs of $0.7 million and $1.3 million, respectively, primarily resulting from the elimination of certain positions.

The following tables present the restructuring and severance and benefit costs for the twelve months ended November 3, 2019 and October 28, 2018 (in thousands):



	Year Ended November 3, 2019
	Total		North American Staffing		International Staffing		North American MSP		Corporate & Other
Severance and benefit costs	$	803	$	200	$	404	$	—	$	199
Other	260		37		33		14		176
2018 Plan	1,063		237		437		14		375

Severance and benefit costs	212		—		—		—		212
Other	1,849		—		—		—		1,849
Exit of Customer Care Solutions Business	2,061		—		—		—		2,061

Severance and benefit costs	493		390		48		—		55
Other	171		92		25		54		—
Other	664		482		73		54		55

Change in Executive Management	868		—		—		—		868
Total	$	4,656	$	719	$	510	$	68	$	3,359



	Year Ended October 28, 2018
	Total		North American Staffing		International Staffing		North American MSP		Corporate & Other
Severance and benefit costs	$	1,526	$	401	$	—	$	—	$	1,125
Other	2,826		428		—		—		2,398
2018 Plan	4,352		829		—		—		3,523

Severance and benefit costs	1,009		103		210		37		659
Other	246		—		118		108		20
Other	1,255		103		328		145		679

Change in Executive Management	2,635		—		—		—		2,635
Total	$	8,242	$	932	$	328	$	145	$	6,837

Accrued restructuring and severance costs are included in Accrued compensation and Accrued insurance and other in the Consolidated Balance Sheets. Activity for the fiscal years ended November 3, 2019 and October 28, 2018 are summarized as follows (in thousands):



	November 3, 2019			October 28, 2018
Balance, beginning of year	$	5,702		$	297
Charged to expense	4,656			8,242
Cash payments	(6,513		)	(2,837		)
Ending Balance	$	3,845		$	5,702

The remaining balance at November 3, 2019 of $3.8 million, primarily related to Corporate and Other, includes $1.6 million related to the cost reduction plan implemented in fiscal 2018, $1.5 million related to change in executive management, $0.6 million related to the exit of the customer care solutions business and $0.1 million of other restructuring and severance charges.