þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 26-0656684 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | ¨ | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ | (Do not check if a smaller reporting company) | Smaller reporting company | þ |
• | future financial performance and growth targets or expectations; |
• | market and industry trends and developments; and |
• | the benefits of our completed and future merger, acquisition and disposition transactions. |
• | the availability of workers’ compensation insurance coverage at commercially reasonable terms; |
• | the availability of qualified temporary workers; |
• | compliance with federal and state labor and employment laws and regulations and changes in such laws and regulations; |
• | the ability to compete with new competitors and competitors with superior marketing and financial resources; |
• | management team changes; |
• | the favorable resolution of current or future litigation; |
• | the impact of outstanding indebtedness on the ability to fund operations or obtain additional financing; |
• | the ability to leverage the benefits of recent acquisitions and successfully integrate newly acquired operations; |
• | adverse changes in the economic conditions of the industries or markets that we serve; |
• | disturbances in world financial, credit, and stock markets; |
• | unanticipated changes in regulations affecting the company’s business; |
• | a decline in consumer confidence and discretionary spending; |
• | the general performance of the U.S. and global economies; |
• | continued or escalated conflict in the Middle East; and |
• | other risks referenced from time to time in our past and future filings with the Securities and Exchange Commission (“SEC”), including in our Annual Report on Form 10-K for the fiscal year ended December 27, 2015. |
March 27, 2016 | December 27, 2015 | |||||||||
ASSETS | ||||||||||
Current assets | ||||||||||
Accounts receivable (net of allowance for doubtful accounts of $449,823 and $446,548 at 2016 and 2015, respectively) | $ | 30,128,744 | $ | 32,324,284 | ||||||
Prepaid expenses | 863,231 | 861,146 | ||||||||
Other current assets | 203,491 | 134,170 | ||||||||
Total current assets | 31,195,466 | 33,319,600 | ||||||||
Property and equipment, net | 1,614,705 | 1,489,061 | ||||||||
Other assets | ||||||||||
Deposits | 2,339,743 | 2,233,410 | ||||||||
Deferred income taxes, net | 8,699,932 | 8,411,792 | ||||||||
Intangible assets, net | 28,090,227 | 29,761,035 | ||||||||
Goodwill | 9,184,659 | 9,184,659 | ||||||||
Total other assets | 48,314,561 | 49,590,896 | ||||||||
Total assets | $ | 81,124,732 | $ | 84,399,557 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
Current liabilities | ||||||||||
Accrued interest | $ | 601,839 | $ | 627,638 | ||||||
Accounts payable | 1,014,270 | 1,572,195 | ||||||||
Accrued payroll and expenses | 12,231,374 | 11,554,868 | ||||||||
Accrued workers’ compensation | 953,453 | 788,878 | ||||||||
Contingent consideration, current portion | 5,546,208 | 6,856,121 | ||||||||
Other current liabilities | 513,101 | 1,459,838 | ||||||||
Income taxes payable | 881,671 | 444,165 | ||||||||
Total current liabilities | 21,741,916 | 23,303,703 | ||||||||
Line of credit (net of deferred finance fees of $163,556 and $175,524 for 2016 and 2015, respectively) | 14,902,444 | 16,041,476 | ||||||||
Long-term debt (net of deferred finance fees of $420,304 and $443,800 for 2016 and 2015, respectively) | 14,746,339 | 14,607,450 | ||||||||
Contingent consideration, less current portion | 4,426,842 | 4,191,160 | ||||||||
Other long-term liabilities | 321,717 | 327,344 | ||||||||
Total liabilities | 56,139,258 | 58,471,133 | ||||||||
Commitments and Contingencies | ||||||||||
Preferred stock, $0.01 par value per share, 500,000 shares authorized, -0- shares issued and outstanding | — | — | ||||||||
Common stock, $0.01 par value per share; 19,500,000 shares authorized, 7,393,762 and 7,387,955 shares issued and outstanding for 2016 and 2015, respectively | 73,938 | 73,880 | ||||||||
Additional paid in capital | 20,517,791 | 20,446,948 | ||||||||
Retained earnings | 4,393,745 | 5,407,596 | ||||||||
Total stockholders’ equity | 24,985,474 | 25,928,424 | ||||||||
Total liabilities and stockholders’ equity | $ | 81,124,732 | $ | 84,399,557 |
Thirteen Weeks Ended | |||||||||
2016 | 2015 | ||||||||
Revenues | $ | 59,550,986 | $ | 40,884,144 | |||||
Cost of services | 46,204,356 | 32,543,122 | |||||||
Gross profit | 13,346,630 | 8,341,022 | |||||||
Selling, general and administrative expenses | 8,902,999 | 6,348,428 | |||||||
Depreciation and amortization | 1,781,470 | 1,128,593 | |||||||
Operating income | 2,662,161 | 864,001 | |||||||
Interest expense, net | (1,279,657 | ) | (531,716 | ) | |||||
Change in fair value of put option | — | (21,089 | ) | ||||||
Income before income taxes | 1,382,504 | 311,196 | |||||||
Income tax expense | 549,366 | 146,960 | |||||||
Net income | $ | 833,138 | $ | 164,236 | |||||
Net income per share: | |||||||||
Basic | $ | 0.11 | $ | 0.02 | |||||
Diluted | $ | 0.11 | $ | 0.02 | |||||
Weighted-average shares outstanding: | |||||||||
Basic | 7,388,536 | 6,598,145 | |||||||
Diluted | 7,646,726 | 6,935,949 |
Common Stock | |||||||||||||||||||||||
Preferred Stock | Shares | Par Value | Additional Paid in Capital | Retained Earnings | Total | ||||||||||||||||||
Stockholders’ equity, December 27, 2015 | $ | — | 7,387,955 | $ | 73,880 | $ | 20,446,948 | $ | 5,407,596 | $ | 25,928,424 | ||||||||||||
Share-based compensation | — | — | — | 70,901 | — | 70,901 | |||||||||||||||||
Exercise of common stock options | — | 5,807 | 58 | (58 | ) | — | — | ||||||||||||||||
Cash dividend declared ($0.25 per share) | — | — | — | — | (1,846,989 | ) | (1,846,989 | ) | |||||||||||||||
Net income | — | — | — | — | 833,138 | 833,138 | |||||||||||||||||
Stockholders’ equity, March 27, 2016 | $ | — | 7,393,762 | $ | 73,938 | $ | 20,517,791 | $ | 4,393,745 | $ | 24,985,474 |
2016 | 2015 | ||||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 833,138 | $ | 164,236 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 1,781,470 | 1,128,593 | |||||||||
Gain on disposal of property and equipment | (7,576 | ) | — | ||||||||
Amortization of deferred financing fees | 35,463 | 42,786 | |||||||||
Amortization of debt discounts | 10,785 | 10,785 | |||||||||
Interest expense on earn out payable | 542,594 | 65,346 | |||||||||
Paid-in-kind interest | 115,014 | 121,667 | |||||||||
Put option adjustment | — | 21,089 | |||||||||
Provision for doubtful accounts | — | 69,756 | |||||||||
Share-based compensation | 70,901 | 59,935 | |||||||||
Deferred income taxes | (288,140 | ) | (151,165 | ) | |||||||
Net changes in operating assets and liabilities, net of effects of acquisitions: | |||||||||||
Accounts receivable | 2,195,540 | 533,186 | |||||||||
Prepaid expenses | (2,085 | ) | 60,001 | ||||||||
Other current assets | (69,321 | ) | (30,706 | ) | |||||||
Deposits | (106,332 | ) | (108,669 | ) | |||||||
Accrued interest | (25,420 | ) | (113,393 | ) | |||||||
Accounts payable | (557,925 | ) | (101,659 | ) | |||||||
Accrued payroll and expenses | 618,890 | 443,595 | |||||||||
Accrued workers’ compensation | 164,575 | (239,729 | ) | ||||||||
Other current liabilities | (899,907 | ) | (1,215 | ) | |||||||
Income taxes payable | 437,506 | 244,525 | |||||||||
Other long-term liabilities | (5,626 | ) | — | ||||||||
Net cash provided by operating activities | 4,843,544 | 2,218,964 | |||||||||
Cash flows from investing activities | |||||||||||
Business acquired, net of cash received | — | (8,500,000 | ) | ||||||||
Capital expenditures | (236,305 | ) | (198,586 | ) | |||||||
Proceeds from the sale of property and equipment | 7,576 | — | |||||||||
Net cash used in investing activities | (228,729 | ) | (8,698,586 | ) |
2016 | 2015 | ||||||||||
Cash flows from financing activities | |||||||||||
Net (payments) borrowings under line of credit | (1,151,000 | ) | 8,400,000 | ||||||||
Principal payments on long-term debt | — | (562,500 | ) | ||||||||
Payments of dividends | (1,846,989 | ) | (989,722 | ) | |||||||
Net proceeds from issuance of common stock | — | (5,712 | ) | ||||||||
Contingent consideration paid | (1,616,826 | ) | (318,568 | ) | |||||||
Deferred financing costs | — | (43,876 | ) | ||||||||
Net cash (used in) provided by financing activities | (4,614,815 | ) | 6,479,622 | ||||||||
Net change in cash and cash equivalents | — | — | |||||||||
Cash and cash equivalents, beginning of period | — | — | |||||||||
Cash and cash equivalents, end of period | $ | — | $ | — | |||||||
Supplemental cash flow information: | |||||||||||
Cash paid for interest | $ | 567,315 | $ | 375,427 | |||||||
Cash paid for taxes, net of refunds | $ | 400,000 | $ | 53,600 |
Thirteen Weeks Ended | ||||||
March 27, 2016 | March 29, 2015 | |||||
North Carolina | 10 | % | 13 | % | ||
Maryland | 14 | % | — | % | ||
Rhode Island | 15 | % | 19 | % | ||
Texas | 36 | % | 38 | % |
Thirteen Weeks Ended | ||||||||
March 27, 2016 | March 29, 2015 | |||||||
Beginning balance | $ | 446,548 | $ | 748,187 | ||||
Provision for doubtful accounts | — | 69,756 | ||||||
Amounts collected (written off) | 3,275 | (140,972 | ) | |||||
Ending balance | $ | 449,823 | $ | 676,971 |
Thirteen Weeks Ended | |||||||
March 27, 2016 | March 29, 2015 | ||||||
Weighted-average number of common shares outstanding: | 7,388,536 | 6,598,145 | |||||
Effect of dilutive securities: | |||||||
Stock options | 228,987 | 237,699 | |||||
Warrants | 29,203 | 100,105 | |||||
Weighted-average number of diluted common shares outstanding | 7,646,726 | 6,935,949 |
Thirteen Weeks Ended | ||||
March 29, 2015 | ||||
Revenues | $ | 52,121 | ||
Gross profit | $ | 11,326 | ||
Net income | $ | 576 | ||
Income per share: | ||||
Basic | $ | 0.09 | ||
Diluted | $ | 0.08 |
March 27, 2016 | December 27, 2015 | |||||||
Temporary worker payable | $ | 4,968,433 | $ | 4,314,069 | ||||
Accrued bonuses and commissions | 897,227 | 1,050,495 | ||||||
Payroll and payroll related | 4,180,834 | 3,611,507 | ||||||
Other | 2,184,880 | 2,578,797 | ||||||
$ | 12,231,374 | $ | 11,554,868 |
Estimated Cash Payment | Discount | Net | |||||||||
Fiscal year ending: | |||||||||||
2016 | $ | 5,982,013 | $ | (435,805 | ) | $ | 5,546,208 | ||||
2017 | 4,250,000 | (1,172,842 | ) | 3,077,158 | |||||||
2018 | 2,250,000 | (900,316 | ) | 1,349,684 | |||||||
Contingent consideration | $ | 12,482,013 | $ | (2,508,963 | ) | $ | 9,973,050 |
March 27, 2016 | December 27, 2015 | |||||||||||
Base Rate | $ | 5,066,000 | 4.00 | % | $ | 6,217,000 | 4.00 | % | ||||
LIBOR | 3,000,000 | 3.87 | % | 3,000,000 | 3.57 | % | ||||||
LIBOR | 4,000,000 | 3.87 | % | 4,000,000 | 3.61 | % | ||||||
LIBOR | 3,000,000 | 3.89 | % | 3,000,000 | 3.77 | % | ||||||
Total | $ | 15,066,000 | $ | 16,217,000 |
Amounts Recorded at Fair Value | Financial Statement Classification | Fair Value Hierarchy | March 27, 2016 | December 27, 2015 | ||||||||
Contingent consideration, net | Contingent consideration, net - current and long-term | Level 3 | $ | 9,973,050 | $ | 11,047,281 |
Number of Shares | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life | Total Intrinsic Value of Options (in thousands) | |||||||||
Options outstanding at December 27, 2015 | 775,666 | $ | 8.19 | 8.7 | $ | 5,246 | ||||||
Exercised | (14,000 | ) | $ | 7.61 | 8.2 | |||||||
Options outstanding at March 27, 2016 | 761,666 | $ | 8.20 | 8.4 | $ | 3,810 | ||||||
Options exercisable at December 27, 2015 | 377,666 | $ | 7.30 | 8.3 | $ | 2,889 | ||||||
Options exercisable at March 27, 2016 | 415,066 | $ | 7.16 | 8.0 | $ | 2,507 |
Number of Shares | Weighted Average Grant Date Fair Value | ||||||
Nonvested outstanding at December 27, 2015 | 398,000 | $ | 2.34 | ||||
Nonvested outstanding at March 27, 2016 | 346,600 | $ | 2.24 |
Number of Shares | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life | Total Intrinsic Value of Options (in thousands) | |||||||||
Warrants outstanding and exercisable at December 27, 2015 | 133,833 | $ | 10.21 | 3.5 | $ | 634 | ||||||
Warrants outstanding and exercisable at March 27, 2016 | 133,833 | $ | 10.21 | 3.3 | $ | 610 |
Thirteen Weeks Ended | ||||||||
March 27, 2016 | March 29, 2015 | |||||||
Revenue: | ||||||||
Multifamily | $ | 10,736,765 | $ | 7,827,046 | ||||
Professional | 27,642,629 | 14,457,590 | ||||||
Commercial | 21,171,592 | 18,599,508 | ||||||
Total | $ | 59,550,986 | $ | 40,884,144 | ||||
Depreciation: | ||||||||
Multifamily | $ | 9,744 | $ | 19,440 | ||||
Professional | 37,149 | 10,890 | ||||||
Commercial | 21,939 | 22,361 | ||||||
Corporate | 41,829 | 16,671 | ||||||
Total | $ | 110,661 | $ | 69,362 |
Thirteen Weeks Ended | ||||||||
March 27, 2016 | March 29, 2015 | |||||||
Amortization: | ||||||||
Multifamily | $ | 37,708 | $ | 37,708 | ||||
Professional | 1,490,710 | 824,334 | ||||||
Commercial | 142,391 | 197,189 | ||||||
Total | $ | 1,670,809 | $ | 1,059,231 | ||||
Operating income: | ||||||||
Multifamily | $ | 1,464,992 | $ | 911,748 | ||||
Professional | 1,592,035 | 487,372 | ||||||
Commercial | 1,280,086 | 905,404 | ||||||
Corporate | (1,674,952 | ) | (1,440,523 | ) | ||||
Total | $ | 2,662,161 | $ | 864,001 | ||||
Capital expenditures: | ||||||||
Multifamily | $ | 18,949 | $ | 54,376 | ||||
Professional | — | 41,467 | ||||||
Commercial | 33,321 | 56,541 | ||||||
Corporate | 184,035 | 46,202 | ||||||
Total | $ | 236,305 | $ | 198,586 |
March 27, 2016 | December 27, 2015 | |||||||
Total Assets: | ||||||||
Multifamily | $ | 6,764,936 | $ | 7,394,459 | ||||
Professional | $ | 45,734,310 | $ | 46,750,518 | ||||
Commercial | 18,873,285 | 20,820,483 | ||||||
Corporate | 9,752,201 | 9,434,097 | ||||||
Total | $ | 81,124,732 | $ | 84,399,557 |
Thirteen Weeks Ended | |||||||||
March 27, 2016 | March 29, 2015 | ||||||||
(dollars in thousands) | |||||||||
Revenues | $ | 59,551 | $ | 40,884 | |||||
Cost of services | 46,204 | 32,543 | |||||||
Gross profit | 13,347 | 8,341 | |||||||
Selling, general and administrative expenses | 8,904 | 6,348 | |||||||
Depreciation and amortization | 1,781 | 1,129 | |||||||
Operating income | 2,662 | 864 | |||||||
Interest expense, net | (1,280 | ) | (532 | ) | |||||
Change in fair value of put option | — | (21 | ) | ||||||
Income (loss) before income tax | 1,382 | 311 | |||||||
Income tax expense | 549 | 147 | |||||||
Net income (loss) | $ | 833 | $ | 164 | |||||
Revenues | 100.0 | % | 100.0 | % | |||||
Cost of services | 77.6 | % | 79.6 | % | |||||
Gross profit | 22.4 | % | 20.4 | % | |||||
Selling, general and administrative expenses | 15.0 | % | 15.5 | % | |||||
Depreciation and amortization | 3.0 | % | 2.8 | % | |||||
Operating income | 4.5 | % | 2.1 | % | |||||
Interest expense, net | (2.1 | )% | (1.3 | )% | |||||
Change in fair value of put option | — | % | (0.1 | )% | |||||
Income (loss) before income tax | 2.3 | % | 0.8 | % | |||||
Income tax expense | 0.9 | % | 0.4 | % | |||||
Net income (loss) | 1.4 | % | 0.4 | % |
Revenues: | Thirteen Weeks Ended | ||||||||||||||
March 27, 2016 | March 29, 2015 | ||||||||||||||
(dollars in thousands) | |||||||||||||||
Revenues by segment: | |||||||||||||||
Multifamily | $ | 10,737 | 18.0 | % | $ | 7,827 | 19.1 | % | |||||||
Professional | 27,643 | 46.4 | % | 14,458 | 35.4 | % | |||||||||
Commercial | 21,171 | 35.6 | % | 18,599 | 45.5 | % | |||||||||
Total Revenues | $ | 59,551 | 100.0 | % | $ | 40,884 | 100.0 | % |
Thirteen Weeks Ended | |||||||||
March 27, 2016 | March 29, 2015 | ||||||||
(dollars in thousands) | |||||||||
Gross Profit by segment: | |||||||||
Multifamily | $ | 3,952 | $ | 2,713 | |||||
Professional | 6,386 | 3,099 | |||||||
Commercial | 3,009 | 2,529 | |||||||
Total Gross Profit | $ | 13,347 | $ | 8,341 |
Thirteen Weeks Ended | |||||||
March 27, 2016 | March 29, 2015 | ||||||
Gross Profit Percentage by segment: | |||||||
Multifamily | 36.8 | % | 34.7 | % | |||
Professional | 23.1 | % | 21.4 | % | |||
Commercial | 14.2 | % | 13.6 | % | |||
Company Gross Profit Percentage | 22.4 | % | 20.4 | % |
Thirteen Weeks Ended | ||||||||
March 27, 2016 | March 29, 2015 | |||||||
(dollars in thousands) | ||||||||
Net income | $ | 833 | $ | 164 | ||||
Interest expense, net | 1,280 | 532 | ||||||
Income tax expense | 549 | 147 | ||||||
Change in fair value of put option | — | 21 | ||||||
Operating income | 2,662 | 864 | ||||||
Depreciation and amortization | 1,781 | 1,129 | ||||||
Share-based compensation | 71 | 60 | ||||||
Adjusted EBITDA | $ | 4,514 | $ | 2,053 |
Thirteen Weeks Ended | ||||||||
March 27, 2016 | March 29, 2015 | |||||||
(dollars in thousands) | ||||||||
Net cash provided by operating activities | $ | 4,844 | $ | 2,219 | ||||
Net cash used in investing activities | (229 | ) | (8,699 | ) | ||||
Net cash (used in) provided by financing activities | (4,615 | ) | 6,480 | |||||
Net change in cash and cash equivalents | $ | — | $ | — |
Exhibit Number | Description | |
10.1 | Executive Employment Agreement, entered into January 26, 2016 to be effective as of December 28, 2015, between B G Staff Services, Inc. and L. Allen Baker, Jr. (incorporated by reference from registrant’s Form 8-K filed February 1, 2016) | |
10.2 | Second Amendment to Asset Purchase Agreement, dated as of March 9, 2016, among BG Finance and Accounting, Inc., D&W Talent, LLC and Willis Group, LLC (incorporated by reference from Amendment No. 1 to the registrant's Annual Report on Form 10-K filed on April 25, 2016) | |
31.1* | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 implementing Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 implementing Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1† | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS * | XBRL Instance Document. | |
101.SCH * | XBRL Taxonomy Extension Schema Document. | |
101.CAL * | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF * | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB * | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE * | XBRL Taxonomy Extension Presentation Linkbase Document. |
* | Filed herewith. | |
† | This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act. |
BG STAFFING, INC. | ||
/s/ L. Allen Baker, Jr. | ||
Name: | L. Allen Baker, Jr. | |
Title: | President and Chief Executive Officer | |
(Principal Executive Officer) | ||
/s/ Dan Hollenbach | ||
Name: | Dan Hollenbach | |
Title: | Chief Financial Officer and Secretary | |
(Principal Financial Officer) | ||
1 | I have reviewed this quarterly report on Form 10-Q for the quarterly period ended March 27, 2016 of BG Staffing, Inc. | |
2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4 | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. | |
5 | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ L. Allen Baker, Jr. | |
Name: | L. Allen Baker, Jr. | |
Title: | President and Chief Executive Officer |
1 | I have reviewed this quarterly report on Form 10-Q for the quarterly period ended March 27, 2016 of BG Staffing, Inc. | |
2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4 | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. | |
5 | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Dan Hollenbach | |
Name: | Dan Hollenbach | |
Title: | Chief Financial Officer and Secretary |
(1) | The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ L. Allen Baker, Jr. | By: | /s/ Dan Hollenbach | |
Name: | L. Allen Baker, Jr. | Name: | Dan Hollenbach | |
Title: | President and Chief Executive Officer | Title: | Chief Financial Officer and Secretary | |
(Principal Executive Officer) | (Principal Financial Officer) |
Document And Entity Information - shares |
3 Months Ended | |
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Mar. 27, 2016 |
Apr. 28, 2016 |
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Document And Entity Information [Abstract] | ||
Entity Registrant Name | BG Staffing, Inc. | |
Entity Central Index Key | 0001474903 | |
Current Fiscal Year End Date | --12-27 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | BGSF | |
Entity Common Stock, Shares Outstanding | 7,398,762 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 27, 2016 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2016 |
CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) |
Mar. 27, 2016 |
Dec. 27, 2015 |
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Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current | $ 449,823 | $ 446,548 |
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 19,500,000 | 19,500,000 |
Common stock, shares issued (in shares) | 7,393,762 | 7,387,955 |
Common stock, shares outstanding (in shares) | 7,393,762 | 7,387,955 |
Deferred finance costs, gross | $ 163,556 | $ 175,524 |
Deferred finance costs, noncurrent, net | $ 420,304 | $ 443,800 |
CONSOLIDATED STATEMENTS OF INCOME - USD ($) |
3 Months Ended | |
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Mar. 27, 2016 |
Mar. 29, 2015 |
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Income Statement [Abstract] | ||
Revenues | $ 59,550,986 | $ 40,884,144 |
Cost of services | 46,204,356 | 32,543,122 |
Gross profit | 13,346,630 | 8,341,022 |
Selling, general and administrative expenses | 8,902,999 | 6,348,428 |
Depreciation and amortization | 1,781,470 | 1,128,593 |
Operating income | 2,662,161 | 864,001 |
Interest expense, net | (1,279,657) | (531,716) |
Change in fair value of put option | 0 | (21,089) |
Income (loss) before income taxes | 1,382,504 | 311,196 |
Income tax expense | 549,366 | 146,960 |
Net income (loss) | $ 833,138 | $ 164,236 |
Net income per share: | ||
Basic (in dollars per share) | $ 0.11 | $ 0.02 |
Diluted (in dollars per share) | $ 0.11 | $ 0.02 |
Weighted-average shares outstanding: | ||
Basic (shares) | 7,388,536 | 6,598,145 |
Diluted (shares) | 7,646,726 | 6,935,949 |
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 3 months ended Mar. 27, 2016 - USD ($) |
Total |
Preferred Stock |
Common Stock |
Additional Paid in Capital |
Retained Earnings |
---|---|---|---|---|---|
Stockholders’ equity, December 27, 2015 at Dec. 27, 2015 | $ 25,928,424 | $ 0 | $ 73,880 | $ 20,446,948 | $ 5,407,596 |
Stockholders’ equity, December 27, 2015 (in shares) at Dec. 27, 2015 | 7,387,955 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation | 70,901 | 70,901 | |||
Exercise of common stock options | 0 | $ 58 | (58) | ||
Exercise of common stock options and warrants (in shares) | 5,807 | ||||
Cash dividend declared ($0.25 per share) | $ (1,846,989) | (1,846,989) | |||
Common stock, dividends, per share, declared | $ 0.25 | ||||
Net income (loss) | $ 833,138 | 833,138 | |||
Stockholders’ equity, March 27, 2016 at Mar. 27, 2016 | $ 24,985,474 | $ 0 | $ 73,938 | $ 20,517,791 | $ 4,393,745 |
Stockholders’ equity, March 27, 2016 (in shares) at Mar. 27, 2016 | 7,393,762 |
NATURE OF OPERATIONS |
3 Months Ended |
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Mar. 27, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | NATURE OF OPERATIONS BG Staffing, Inc. is a provider of temporary staffing services that operates, along with its wholly owned subsidiaries BG Staffing, LLC, B G Staff Services Inc., BG Personnel, LP and BG Finance and Accounting, Inc. (“BGFA”) (collectively, the “Company”), primarily within the United States of America in three industry segments: Multifamily, Professional, and Commercial. The Multifamily segment provides front office and maintenance temporary workers to various apartment communities, in Texas and other states, via property management companies responsible for the apartment communities day to day operations. The Professional segment provides skilled temporary workers on a nationwide basis for information technology ("IT") customer projects, and finance and accounting needs in Texas and Louisiana. The Commercial segment provides temporary workers primarily to logistics costumers needing a flexible workforce in Illinois, Wisconsin, New Mexico, Texas, Tennessee and Mississippi. The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles in the United States (“GAAP”), pursuant to the applicable rules and regulations of the SEC. The information furnished herein reflects all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary to present a fair statement of the financial position and operating results of the Company as of and for the respective periods. However, these operating results are not necessarily indicative of the results expected for a full fiscal year or any other future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. However, management of the Company believes, to the best of their knowledge, that the disclosures herein are adequate to make the information presented not misleading. The Company has determined that there were no subsequent events that would require disclosure or adjustments to the accompanying consolidated financial statements through the date the financial statements were issued. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the fiscal year ended December 27, 2015, included in its Annual Report on Form 10-K. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements include the accounts of the Company. All significant intercompany transactions and balances have been eliminated in consolidation. Fiscal Periods The Company has a 52/53 week fiscal year. Fiscal periods for the consolidated financial statements included herein are as of March 27, 2016 and December 27, 2015, and include the thirteen week periods ended March 27, 2016 and March 29, 2015. Reclassifications Certain reclassifications have been made to the 2015 financial statements to conform with the 2016 presentation. Management Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates affecting the financial statements include goodwill and intangible assets and earn out obligations related to acquisitions and put option valuation. Financial Instruments The Company uses fair value measurements in areas that include, but are not limited to: the allocation of purchase price consideration to tangible and identifiable intangible assets, contingent consideration and put option liability. The carrying values of cash and cash equivalents, accounts receivables, accounts payable, and other current assets and liabilities approximate their fair values because of the short-term nature of these instruments. The carrying value of the bank debt approximates fair value due to the variable nature of the interest rates under the credit agreement with Texas Capital Bank, National Association (“TCB”) that provides for a revolving credit facility (“Revolving Facility”) and current rates available to the Company for debt with similar terms and risk. Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less. Concentration of Credit Risk Concentration of credit risk is limited due to the Company diverse customer base and their dispersion across many different industries and geographic locations nationwide. No single customer accounted for more than 10% of the Company’s accounts receivable as of March 27, 2016 and December 27, 2015 or revenue for the thirteen week periods ended March 27, 2016 and March 29, 2015. Geographic revenue in excess of 10% of the Company consolidated revenue was generated in the following areas:
Consequently, weakness in economic conditions in these regions could have a material adverse effect on the Company’s financial position and results of future operations. Accounts Receivable The Company extends credit to its customers in the normal course of business. Accounts receivable represents unpaid balances due from customers. The Company maintains an allowance for doubtful accounts for estimated losses resulting from customers’ non-payment of balances due to the Company. The Company’s determination of the allowance for uncollectible amounts is based on management’s judgments and assumptions, including general economic conditions, portfolio composition, prior loss experience, evaluation of credit risk related to certain individual customers and the Company’s ongoing examination process. Receivables are written off after they are deemed to be uncollectible after all means of collection have been exhausted. Recoveries of receivables previously written off are recorded when received. Changes in the allowance for doubtful accounts are as follows:
Property and Equipment Property and equipment are stated net of accumulated depreciation and amortization of $961,323 and $859,274 at March 27, 2016 and December 27, 2015, respectively. Long-Lived Assets The Company reviews its long-lived assets, primarily fixed assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. The Company looks primarily to the undiscounted future cash flows in its assessment of whether or not long-lived assets have been impaired. There were no impairments during 2016 and 2015. Intangible Assets The Company holds intangible assets with indefinite and finite lives. Intangible assets with indefinite useful lives are not amortized. Intangible assets with finite useful lives are amortized over their respective estimated useful lives, ranging from three to five years, based on a pattern in which the economic benefit of the respective intangible asset is realized. The Company annually evaluates the remaining useful lives of all intangible assets to determine whether events and circumstances warrant a revision to the remaining period of amortization. Goodwill Goodwill is not amortized, but instead is evaluated at the reporting unit level for impairment annually at the end of each fiscal year, or more frequently if conditions indicate an earlier review is necessary. If the Company has determined that it is more likely than not that the fair value for one or more reporting units is greater than their carrying value, the Company may use a qualitative assessment for the annual impairment test. Deferred Rent The Company recognizes rental expense on a straight-line basis over the life of the agreement. Deferred rent is recognized as the difference between cash payments and rent expense, including any landlord incentives. Paid-in-kind Interest The Company records paid-in-kind interest on a monthly basis to accrued interest. The first month following a quarter, the paid-in-kind accrued interest is reclassed to the related debt principal if not paid. Deferred Financing Fees Deferred financing charges are amortized on a straight-line basis, which approximates the effective interest method, over the term of the respective loans. Debt issuance costs related to a recognized debt liability are presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability. Contingent Consideration The Company historically has obligations, to be paid in cash, related to its acquisitions if certain future operating and financial goals are met. The fair value of this contingent consideration is determined using expected cash flows and present value technique. The calculation of the fair value of the expected future payments uses a discount rate that approximates the Company's weighted average cost of capital. Put Option The Company granted a put option to certain holders of equity in BG Staffing, Inc. which was carried at fair market value in other long-term liabilities on the consolidated balance sheet. Prior to second quarter 2015, the liability was revalued at each balance sheet date at the greater of an adjusted earnings before income taxes, depreciation and amortization method or the fair market value. During third quarter 2015, the liability calculation of fair market value was based on the closing price of the Company's stock. Changes in fair value are recorded as non-cash, non-operating income (expense) in the Company’s consolidated statements of operations. Revenue Recognition The Company derives its revenues from three segments: Multifamily, Professional, and Commercial. The Company provides temporary and consultant staffing and permanent placement services. Revenues as presented on the consolidated statements of operations represent services rendered to customers less sales adjustments and allowances. Reimbursements, including those related to out-of-pocket expenses, are also included in revenues, and equivalent amounts of reimbursable expenses are included in cost of services. The Company and its customers enter into agreements that outline the general terms and conditions of the staffing arrangement. Revenue is recognized as services are performed and associated costs have been incurred. The Company records revenue on a gross basis as a principal versus on a net basis as an agent in the presentation of revenues and expenses. The Company has concluded that gross reporting is appropriate because the Company (i) has the risk of identifying and hiring qualified workers, (ii) has the discretion to select the workers and establish their price and duties and (iii) bears the risk for services that are not fully paid for by customers. Temporary and consultant staffing revenues - Temporary and consultant staffing revenues are recognized when the services are rendered by the Company’s temporary workers or consultants. The Company assumes the risk of acceptability of its workers to its customers. Permanent placement staffing revenues - Permanent placement staffing revenues are recognized when employment candidates accept offers of permanent employment. The Company estimates the effect of permanent placement candidates who do not remain with its customers through the guarantee period (generally 90 days) based on historical experience. Allowances are established to estimate these losses. Fees to customers are generally calculated as a percentage of the new worker’s annual compensation. No fees for permanent placement services are charged to employment candidates. Share-Based Compensation The Company recognizes compensation expense in selling, general and administrative expenses over the service period for options that are expected to vest and records adjustments to compensation expense at the end of the service period if actual forfeitures differ from original estimates. Earnings Per Share Basic earnings per common share are computed by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period adjusted to reflect potentially dilutive securities. In October 2015, the remaining shares were sold that contained the put right to third parties which caused the put rights on those shares to expire. The following is a reconciliation of the number of shares used in the calculation of basic and diluted earnings per share at:
There were no outstanding securities excluded from the calculation of earnings per share as the effect of the assumed exercise would be anti-dilutive. Income Taxes The current provision for income taxes represents estimated amounts payable or refundable on tax returns filed or to be filed for the year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts are classified as noncurrent in the consolidated balance sheets. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. The overall change in deferred tax assets and liabilities for the period measures the deferred tax expense or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to tax expense in the period of enactment. The Company recognizes any penalties and interest when necessary as part of selling, general and administrative expenses. When appropriate, we record a valuation allowance against net 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. The Company follows the guidance of Accounting Standards Codification ("ASC") Topic 740, Accounting for Uncertainty in Income Taxes. ASC Topic 740 prescribes a more-likely-than-not measurement methodology to reflect the financial statement impact of uncertain tax positions taken or expected to be taken in a tax return. Income tax expense attributable to income from operations for 2016 and differed from the amount computed by applying the U.S. federal income tax rate of 34% to income before income taxes primarily as a result of state taxes, and permanent differences related to share-based compensation. Income tax expense attributable to income from operations for 2015 differed from the amount computed by applying the U.S. federal income tax rate of 34% to income before income taxes primarily as a result of state taxes, and permanent differences related to share-based compensation and the fair value of the put option adjustment. Recent Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification of related amounts within the statement of cash flows. The new standard will become effective for the Company beginning with the first quarter of 2017, with early adoption permitted. The Company is currently evaluating the impacts the adoption of this accounting guidance will have on the consolidated financial statements. |
ACQUISITIONS |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | ACQUISITIONS D&W Talent, LLC On February 23, 2015, the Company acquired substantially all of the assets and assumed certain liabilities of D&W Talent, LLC (“D&W”) for an initial cash consideration paid of $8.5 million and an undiscounted contingent consideration of up to $3.5 million based on the performance of the acquired business for the three years following the date of acquisition. The fair value of the contingent consideration at the acquisition date was $2.0 million. The purchase agreement contained a provision for a “true up” of acquired working capital 120 days after the closing date. The 2015 consolidated statements of operations include the operating results of D&W operations for 4 weeks from the date of acquisition. D&W operations contributed approximately $4.9 million and $2.0 million of revenue for the thirteen weeks period ended March 27, 2016 and March 29, 2015, respectively. Vision Technology Services On September 28, 2015, the Company acquired substantially all of the assets and assumed certain liabilities of Vision Technology Services, Inc., Vision Technology Services, LLC, and VTS-VM, LLC (collectively, “VTS”) for an initial cash consideration paid of $10.0 million and an undiscounted contingent consideration of up to $10.75 million based on the performance of the acquired business for the three years following the date of acquisition. The fair value of the contingent consideration at the acquisition date was $7.3 million. The 2015 consolidated statements of operations does not include the operating results of VTS. VTS operations contributed approximately $8.5 million of revenue for the thirteen weeks period ended March 27, 2016. Supplemental Unaudited Pro Forma Information The Company estimates that the revenues and net income for the periods below that would have been reported if the D&W and VTS acquisitions had taken place on the first day of the Company's 2015 fiscal year would be as follows (dollars in thousands, except per share amounts):
Pro forma net income includes amortization of identifiable intangible assets, interest expense on additional borrowings on the Revolving Facility at a rate of 3.75% and tax expense of the pro forma adjustments at an effective tax rate of approximately 38.6%. |
INTANGIBLE ASSETS |
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Mar. 27, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | INTANGIBLE ASSETS Intangible assets are stated net of accumulated amortization of $25,629,584 and $23,958,775 at March 27, 2016 and December 27, 2015, respectively. Total amortization expense for the thirteen week periods ended March 27, 2016 and March 29, 2015 was $1,670,809 and $1,059,231, respectively. |
ACCRUED PAYROLL AND EXPENSES AND CONTINGENT CONSIDERATION |
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Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | ACCRUED PAYROLL AND EXPENSES AND CONTINGENT CONSIDERATION Accrued payroll and expenses consist of the following at:
The following is a schedule of future estimated earn out payments to various parties as of March 27, 2016:
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DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT On August 21, 2015, the Company entered into a credit agreement (the “Credit Agreement”) with Texas Capital Bank, National Association (“TCB”). The Credit Agreement provides for the Revolving Facility maturing August 21, 2019 permitting the Company to borrow funds from time to time in an aggregate amount equal to the lesser of the borrowing base amount, which is 85% of eligible accounts, and TCB’s commitment of $25.0 million. The Company's obligations are secured by a first priority security interest in all assets of the Company. The Company also entered into a senior subordinated credit agreement (the “Senior Subordinated Credit Agreement”) with Patriot Capital III SBIC, L.P. and Patriot Capital III, L.P. (together, “PC Subordinated Debt”), pursuant to which the foregoing lenders made term loans of $14,250,000 and $750,000, respectively, with a maturity date of February 21, 2020. The Company's obligations are secured by a security interest in all assets of the Company. Proceeds from the foregoing loan arrangements were used to pay off existing indebtedness of the Company under the Fifth Third Bank senior credit facility described below. On January 29, 2014, the Company amended the senior credit facility, which provided for a revolving line of credit of $20.0 million, increased the original principal amount of the term loan facility from $7.1 million to $11.3 million and added $8.0 million of subordinated debt (“Term Loan B”). On December 12, 2014, the Company executed an amendment to the senior credit facility that removed the limitation on the Company to pay dividends while the Term Loan B was outstanding. In connection with the acquisition of the assets of D&W (see Note 3) on February 23, 2015, the Company entered into an amendment with its lenders under senior credit facility to add BGFA as an additional borrower under the agreement and increased the borrowing base amount from 80% to 85% of eligible receivables. Line of Credit At March 27, 2016 and December 27, 2015, $15.1 million and $16.2 million, respectively, was outstanding on the Revolving Facility with TCB. Borrowings under the Revolving Facility bear interest equal to (i) Base Rate (the higher of Prime Rate, Federal Funds Rate plus 0.5%, or LIBOR plus 1.0%) plus 0.5% or (ii) LIBOR plus 3.25%. Additionally, the Company pays an unused commitment fee of 0.25% on the unfunded portion of the Revolving Facility. Borrowings under the Revolving Facility bore interest as follows:
The Credit Agreement and the Senior Subordinated Credit Agreement contain customary affirmative covenants as well as negative covenants restricting the ability of the Company and its subsidiaries to, among other things (with certain exceptions): (i) incur indebtedness; (ii) incur liens; (iii) enter into mergers, consolidations, or similar transactions; (iv) pay dividends or make distributions (except for permitted distributions as defined in the agreements); (v) make loans; (vi) dispose of assets; (vii) enter into transactions with affiliates; or (viii) change the nature of their business. In addition, the Company must comply with certain financial covenants, including minimum debt service coverage ratio, minimum current ratio and maximum leverage ratio. As of March 27, 2016, the Company was in compliance with these covenants. |
FAIR VALUE MEASUREMENTS |
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Fair Value Measurements | FAIR VALUE MEASUREMENTS The accounting standard for fair value measurements defines fair value, and establishes a market-based framework or hierarchy for measuring fair value. The standard is applicable whenever assets and liabilities are measured at fair value. The fair value hierarchy established in the standard prioritizes the inputs used in valuation techniques into three levels as follows: Level 1 - Observable inputs - quoted prices in active markets for identical assets and liabilities; Level 2 - Observable inputs other than the quoted prices in active markets for identical assets and liabilities - includes quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets, and amounts derived from valuation models where all significant inputs are observable in active markets, for substantially the full term of the financial instrument; and Level 3 - Unobservable inputs - includes amounts derived from valuation models where one or more significant inputs are unobservable and require us to develop relevant assumptions. The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis and the level they fall within the fair value hierarchy:
In connection with the acquisition of substantially all of the assets and assumption of certain liabilities of InStaff Holding Corporation and InStaff Personnel, LLC, a wholly owned subsidiary of InStaff Holding Corporation (collectively, “InStaff”), the Company granted a put option to certain holders of equity in BG Staffing, Inc. The liability was transferred from Level 3 to Level 2 during the third quarter 2015 due to an increased active market. In October 2015, the remaining shares were sold that contained the put right to third parties which caused the put rights on those shares to expire. |
CONTINGENCIES |
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Mar. 27, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | CONTINGENCIES The Company is engaged from time to time in legal matters and proceedings arising out of its normal course of business. The Company establishes a liability related to its legal proceedings and claims when it has determined that it is probable that the Company has incurred a liability and the related amount can be reasonably estimated. If the Company determines that an obligation is reasonably possible, the Company will, if material, disclose the nature of the loss contingency and the estimated range of possible loss, or include a statement that no estimate of the loss can be made. The Company is not currently a party to any material litigation; however in the ordinary course of our business the Company is periodically threatened with or named as a defendant in various lawsuits or actions. The principal risks that the Company insures against, subject to and upon the terms and conditions of various insurance policies, are workers’ compensation, general liability, automobile liability, property damage, professional liability, employment practices, fiduciary liability, fidelity losses and director and officer liability. Under the Company's bylaws, the Company’s directors and officers are indemnified against certain liabilities arising out of the performance of their duties to the Company. The Company also has an insurance policy for our directors and officers to insure them against liabilities arising from the performance of their positions with the Company or its subsidiaries. The Company has also entered into indemnification agreements with its directors and certain officers. |
EQUITY |
3 Months Ended |
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Mar. 27, 2016 | |
Stockholders' Equity Note [Abstract] | |
Equity | EQUITY Authorized capital stock consists of 19,500,000 shares of common stock, par value $0.01 per share and 500,000 shares of undesignated preferred stock, par value $0.01 per share. |
SHARE-BASED COMPENSATION |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | SHARE-BASED COMPENSATION Stock Options For the thirteen week periods ended March 27, 2016 and March 29, 2015, the Company recognized $70,901 and $53,412 of compensation cost related to stock awards, respectively. Unamortized stock compensation expense as of March 27, 2016 amounted to $660,564 which is expected to be recognized over the next 2.8 years. A summary of stock option activity is presented as follows:
For the thirteen week periods ended March 27, 2016, the Company issued 5,807 shares of common stock in the form of a cashless exercise from the conversion of 14,000 shares of stock options. Warrant Activity For the thirteen week periods ended March 27, 2016 and March 29, 2015, the Company recognized $-0- and $6,523 of compensation cost related to warrants, respectively. There was no unamortized stock compensation expense to be recognized as of March 27, 2016. All warrants were vested at March 27, 2016 and December 27, 2015. A summary of warrant activity is presented as follows:
The intrinsic value in the tables above is the amount by which the market value of the underlying stock exceeded the exercise price of outstanding options or warrants, before applicable income taxes and represents the amount holders would have realized if all in-the-money options or warrants had been exercised on the last business day of the period indicated. |
EMPLOYEE BENEFIT PLAN |
3 Months Ended |
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Mar. 27, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plan | EMPLOYEE BENEFIT PLAN The Company provides a defined contribution plan (the “401(k) Plan”) for the benefit of its eligible full-time employees. The 401(k) Plan allows employees to make contributions subject to applicable statutory limitations. The Company matches employee contributions 100% up to the first 3% and 50% of the next 2% of an employee’s compensation. The Company contributed $178,638 and $61,474 to the 401(k) Plan in the thirteen week periods ended March 27, 2016 and March 29, 2015, respectively. |
BUSINESS SEGMENTS |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | BUSINESS SEGMENTS The Company operates within three industry segments: Multifamily, Professional, and Commercial. The Multifamily segment provides front office and maintenance temporary workers to various apartment communities, via property management companies responsible for the apartment communities' day to day operations. The Professional segment provides temporary workers for IT customer projects and finance and accounting needs. The Commercial segment provides temporary workers primarily to logistics customers needing a flexible workforce. Segment operating income includes all revenue and cost of services, direct selling expenses, depreciation and amortization expense and excludes all general and administrative (corporate) expenses. Assets of corporate include cash, unallocated prepaid expenses, deferred tax assets, and other assets. The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated results for the periods indicated:
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SUBSEQUENT EVENTS |
3 Months Ended |
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Mar. 27, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On April 28, 2016, the Company's board of directors declared a cash dividend in the amount of $0.25 per share of common stock to be paid on May 16, 2016 to all shareholders of record as of the close of business on May 9, 2016. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
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Mar. 27, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of the Company. All significant intercompany transactions and balances have been eliminated in consolidation. |
Fiscal Year | Fiscal Periods The Company has a 52/53 week fiscal year. Fiscal periods for the consolidated financial statements included herein are as of March 27, 2016 and December 27, 2015, and include the thirteen week periods ended March 27, 2016 and March 29, 2015. |
Reclassifications | Reclassifications Certain reclassifications have been made to the 2015 financial statements to conform with the 2016 presentation. |
Management Estimates | Management Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates affecting the financial statements include goodwill and intangible assets and earn out obligations related to acquisitions and put option valuation. |
Financial Instruments | Financial Instruments The Company uses fair value measurements in areas that include, but are not limited to: the allocation of purchase price consideration to tangible and identifiable intangible assets, contingent consideration and put option liability. The carrying values of cash and cash equivalents, accounts receivables, accounts payable, and other current assets and liabilities approximate their fair values because of the short-term nature of these instruments. The carrying value of the bank debt approximates fair value due to the variable nature of the interest rates under the credit agreement with Texas Capital Bank, National Association (“TCB”) that provides for a revolving credit facility (“Revolving Facility”) and current rates available to the Company for debt with similar terms and risk. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less. |
Accounts Receivable | Accounts Receivable The Company extends credit to its customers in the normal course of business. Accounts receivable represents unpaid balances due from customers. The Company maintains an allowance for doubtful accounts for estimated losses resulting from customers’ non-payment of balances due to the Company. The Company’s determination of the allowance for uncollectible amounts is based on management’s judgments and assumptions, including general economic conditions, portfolio composition, prior loss experience, evaluation of credit risk related to certain individual customers and the Company’s ongoing examination process. Receivables are written off after they are deemed to be uncollectible after all means of collection have been exhausted. Recoveries of receivables previously written off are recorded when received. |
Property and Equipment | Property and Equipment Property and equipment are stated net of accumulated depreciation and amortization of $961,323 and $859,274 at March 27, 2016 and December 27, 2015, respectively. |
Long-Lived Assets | Long-Lived Assets The Company reviews its long-lived assets, primarily fixed assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. The Company looks primarily to the undiscounted future cash flows in its assessment of whether or not long-lived assets have been impaired. There were no impairments during 2016 and 2015. |
Intangible Assets | Intangible Assets The Company holds intangible assets with indefinite and finite lives. Intangible assets with indefinite useful lives are not amortized. Intangible assets with finite useful lives are amortized over their respective estimated useful lives, ranging from three to five years, based on a pattern in which the economic benefit of the respective intangible asset is realized. The Company annually evaluates the remaining useful lives of all intangible assets to determine whether events and circumstances warrant a revision to the remaining period of amortization. |
Goodwill | Goodwill Goodwill is not amortized, but instead is evaluated at the reporting unit level for impairment annually at the end of each fiscal year, or more frequently if conditions indicate an earlier review is necessary. If the Company has determined that it is more likely than not that the fair value for one or more reporting units is greater than their carrying value, the Company may use a qualitative assessment for the annual impairment test. |
Deferred Rent | Deferred Rent The Company recognizes rental expense on a straight-line basis over the life of the agreement. Deferred rent is recognized as the difference between cash payments and rent expense, including any landlord incentives. |
Paid-in-kind Interest | Paid-in-kind Interest The Company records paid-in-kind interest on a monthly basis to accrued interest. The first month following a quarter, the paid-in-kind accrued interest is reclassed to the related debt principal if not paid. |
Deferred Financing Fees | Deferred Financing Fees Deferred financing charges are amortized on a straight-line basis, which approximates the effective interest method, over the term of the respective loans. Debt issuance costs related to a recognized debt liability are presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability. |
Contingent Consideration | Contingent Consideration The Company historically has obligations, to be paid in cash, related to its acquisitions if certain future operating and financial goals are met. The fair value of this contingent consideration is determined using expected cash flows and present value technique. The calculation of the fair value of the expected future payments uses a discount rate that approximates the Company's weighted average cost of capital. |
Put Option | Put Option The Company granted a put option to certain holders of equity in BG Staffing, Inc. which was carried at fair market value in other long-term liabilities on the consolidated balance sheet. Prior to second quarter 2015, the liability was revalued at each balance sheet date at the greater of an adjusted earnings before income taxes, depreciation and amortization method or the fair market value. During third quarter 2015, the liability calculation of fair market value was based on the closing price of the Company's stock. Changes in fair value are recorded as non-cash, non-operating income (expense) in the Company’s consolidated statements of operations. |
Revenue Recognition | Revenue Recognition The Company derives its revenues from three segments: Multifamily, Professional, and Commercial. The Company provides temporary and consultant staffing and permanent placement services. Revenues as presented on the consolidated statements of operations represent services rendered to customers less sales adjustments and allowances. Reimbursements, including those related to out-of-pocket expenses, are also included in revenues, and equivalent amounts of reimbursable expenses are included in cost of services. The Company and its customers enter into agreements that outline the general terms and conditions of the staffing arrangement. Revenue is recognized as services are performed and associated costs have been incurred. The Company records revenue on a gross basis as a principal versus on a net basis as an agent in the presentation of revenues and expenses. The Company has concluded that gross reporting is appropriate because the Company (i) has the risk of identifying and hiring qualified workers, (ii) has the discretion to select the workers and establish their price and duties and (iii) bears the risk for services that are not fully paid for by customers. Temporary and consultant staffing revenues - Temporary and consultant staffing revenues are recognized when the services are rendered by the Company’s temporary workers or consultants. The Company assumes the risk of acceptability of its workers to its customers. Permanent placement staffing revenues - Permanent placement staffing revenues are recognized when employment candidates accept offers of permanent employment. The Company estimates the effect of permanent placement candidates who do not remain with its customers through the guarantee period (generally 90 days) based on historical experience. Allowances are established to estimate these losses. Fees to customers are generally calculated as a percentage of the new worker’s annual compensation. No fees for permanent placement services are charged to employment candidates. |
Share-based Compensation | Share-Based Compensation The Company recognizes compensation expense in selling, general and administrative expenses over the service period for options that are expected to vest and records adjustments to compensation expense at the end of the service period if actual forfeitures differ from original estimates. |
Earnings Per Share | Earnings Per Share Basic earnings per common share are computed by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period adjusted to reflect potentially dilutive securities. In October 2015, the remaining shares were sold that contained the put right to third parties which caused the put rights on those shares to expire. |
Income Taxes | Income Taxes The current provision for income taxes represents estimated amounts payable or refundable on tax returns filed or to be filed for the year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts are classified as noncurrent in the consolidated balance sheets. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. The overall change in deferred tax assets and liabilities for the period measures the deferred tax expense or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to tax expense in the period of enactment. The Company recognizes any penalties and interest when necessary as part of selling, general and administrative expenses. When appropriate, we record a valuation allowance against net 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. The Company follows the guidance of Accounting Standards Codification ("ASC") Topic 740, Accounting for Uncertainty in Income Taxes. ASC Topic 740 prescribes a more-likely-than-not measurement methodology to reflect the financial statement impact of uncertain tax positions taken or expected to be taken in a tax return. Income tax expense attributable to income from operations for 2016 and differed from the amount computed by applying the U.S. federal income tax rate of 34% to income before income taxes primarily as a result of state taxes, and permanent differences related to share-based compensation. Income tax expense attributable to income from operations for 2015 differed from the amount computed by applying the U.S. federal income tax rate of 34% to income before income taxes primarily as a result of state taxes, and permanent differences related to share-based compensation and the fair value of the put option adjustment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification of related amounts within the statement of cash flows. The new standard will become effective for the Company beginning with the first quarter of 2017, with early adoption permitted. The Company is currently evaluating the impacts the adoption of this accounting guidance will have on the consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customers by Geographic Areas | Geographic revenue in excess of 10% of the Company consolidated revenue was generated in the following areas:
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Summary of Valuation Allowance | he allowance for doubtful accounts are as follows:
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following is a reconciliation of the number of shares used in the calculation of basic and diluted earnings per share at:
There were no outstanding securities excluded from the calculation of earnings per share as the effect of the assumed exercise would be anti-dilutive. |
ACQUISITIONS (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information | The Company estimates that the revenues and net income for the periods below that would have been reported if the D&W and VTS acquisitions had taken place on the first day of the Company's 2015 fiscal year would be as follows (dollars in thousands, except per share amounts):
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ACCRUED PAYROLL AND EXPENSES AND CONTINGENT CONSIDERATION (Tables) |
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Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses |
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Schedule of Future Estimated Earnout Payments | The following is a schedule of future estimated earn out payments to various parties as of March 27, 2016:
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DEBT (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Line of Credit Facilities | Borrowings under the Revolving Facility bore interest as follows:
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FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis and the level they fall within the fair value hierarchy:
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SHARE-BASED COMPENSATION (Tables) |
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Share Activity |
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Employee Stock Option | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Share-based Compensation, Activity | A summary of stock option activity is presented as follows:
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Warrant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Share-based Compensation, Activity | A summary of warrant activity is presented as follows:
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BUSINESS SEGMENTS (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated results for the periods indicated:
|
NATURE OF OPERATIONS (Details Textual) |
3 Months Ended |
---|---|
Mar. 27, 2016
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 27, 2016 |
Mar. 29, 2015 |
Dec. 27, 2015 |
|
Summary Of Significant Accounting Policies [Line Items] | |||
Accumulated depreciation and amortization, property, plant, and equipment | $ 961,323 | $ 859,274 | |
Federal statutory income tax rate, percent | 34.00% | 34.00% | |
Minimum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Fiscal period, length | 364 days | 364 days | |
Useful life | 3 years | ||
Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Fiscal period, length | 371 days | 371 days | |
Useful life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Credit Concentration Risk |
3 Months Ended | |
---|---|---|
Mar. 27, 2016 |
Mar. 29, 2015 |
|
North Carolina | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 10.00% | |
Maryland | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 14.00% | |
Rhode Island | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 15.00% | |
Texas | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 36.00% | |
Sales Revenue, Net | North Carolina | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 13.00% | |
Sales Revenue, Net | Maryland | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 0.00% | |
Sales Revenue, Net | Rhode Island | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 19.00% | |
Sales Revenue, Net | Texas | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 38.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 27, 2016 |
Mar. 29, 2015 |
|
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Beginning balance | $ 446,548 | $ 748,187 |
Provision for doubtful accounts | 0 | 69,756 |
Amounts collected (written off) | (3,275) | (140,972) |
Ending balance | $ 449,823 | $ 676,971 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - shares |
3 Months Ended | |
---|---|---|
Mar. 27, 2016 |
Mar. 29, 2015 |
|
Schedule of Weighted Average Number of Shares, Diluted [Line Items] | ||
Basic (shares) | 7,388,536 | 6,598,145 |
Effect of dilutive securities: | ||
Weighted-average number of diluted common shares outstanding | 7,646,726 | 6,935,949 |
Antidilutive securities excluded from computation of earnings per share, amount | 0 | |
Employee Stock Option | ||
Effect of dilutive securities: | ||
Stock options | 228,987 | 237,699 |
Warrant | ||
Effect of dilutive securities: | ||
Warrants | 29,203 | 100,105 |
ACQUISITIONS (Supplemental Unaudited Pro Forma Information) (Details) - D&W Talent, LLC, Technology Services, Inc., Vision Technology Services, LLC, and VTS-VM [Member] $ / shares in Units, $ in Thousands |
3 Months Ended |
---|---|
Mar. 29, 2015
USD ($)
$ / shares
| |
Business Acquisition [Line Items] | |
Revenues | $ 52,121 |
Gross profit | 11,326 |
Net income (loss) | $ 576 |
Income (loss) per share: | |
Basic (in dollar per share) | $ / shares | $ 0.09 |
Diluted (in dollar per share) | $ / shares | $ 0.08 |
INTANGIBLE ASSETS (Details Textual) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 27, 2016 |
Mar. 29, 2015 |
Dec. 27, 2015 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Intangible assets, accumulated amortization | $ 25,629,584 | $ 23,958,775 | |
Amortization of intangible assets | $ 1,670,809 | $ 1,059,231 |
ACCRUED PAYROLL AND EXPENSES AND CONTINGENT CONSIDERATION (Details) - USD ($) |
Mar. 27, 2016 |
Dec. 27, 2015 |
---|---|---|
Accrued Liabilities, Current [Abstract] | ||
Temporary worker payable | $ 4,968,433 | $ 4,314,069 |
Accrued bonuses and commissions | 897,227 | 1,050,495 |
Accrued Salaries, Current | 4,180,834 | 3,611,507 |
Other | 2,184,880 | 2,578,797 |
Accrued liabilities, current | $ 12,231,374 | $ 11,554,868 |
ACCRUED PAYROLL AND EXPENSES AND CONTINGENT CONSIDERATION (Details 2) - USD ($) |
Mar. 27, 2016 |
Dec. 27, 2015 |
---|---|---|
Accrued Liabilities, Current [Abstract] | ||
Contingent consideration, current portion | $ 5,982,013 | |
Contingent consideration, liability in year two | 4,250,000 | |
Contingent consideration, liability in year three | 2,250,000 | |
Contingent consideration, liability, total | 12,482,013 | |
Interest expense, earn out payable, current portion | (435,805) | |
Interest expense, earn out payable in year two | (1,172,842) | |
Interest expense, earn out payable in year three | (900,316) | |
Interest expense, earn out payable, total | 2,508,963 | |
Contingent consideration, current portion, net | 5,546,208 | $ 6,856,121 |
Contingent consideration, liability in year two, net | 3,077,158 | |
Contingent consideration, liability in year three, net | 1,349,684 | |
Contingent consideration, liability, total, net | $ 9,973,050 |
DEBT (Details) - Credit Agreement - Texas Capital Bank, National Association (TCB) - Revolving Credit Facility - USD ($) $ in Thousands |
Mar. 27, 2016 |
Dec. 27, 2015 |
---|---|---|
Line of Credit Facility [Line Items] | ||
Initial borrowing amount | $ 5,066 | $ 6,217 |
Debt instrument, interest rate, stated percentage for initial borrowing amount | 4.00% | 4.00% |
Second borrowing amount | $ 3,000 | $ 3,000 |
Debt instrument, interest rate, stated percentage for second borrowing amount | 3.87% | 3.57% |
Third borrowing amount | $ 4,000 | $ 4,000 |
Debt instrument, interest rate, stated percentage for third borrowing amount | 3.87% | 3.61% |
Fourth borrowing amount | $ 3,000 | $ 3,000 |
Debt instrument, interest rate, stated percentage for fourth borrowing amount | 3.89% | 3.77% |
Total borrowing amount | $ 15,066 | $ 16,217 |
FAIR VALUE MEASUREMENTS (Details) - USD ($) |
Mar. 27, 2016 |
Dec. 27, 2015 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 9,973,050 | |
Fair Value, Inputs, Level 3 | Contingent Consideration | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 9,973,050 | $ 11,047,281 |
EQUITY (Details Textual) - $ / shares |
Mar. 27, 2016 |
Dec. 27, 2015 |
---|---|---|
Stockholders' Equity Note [Abstract] | ||
Common stock, shares authorized (in shares) | 19,500,000 | 19,500,000 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
SHARE-BASED COMPENSATION (Details Textual) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 27, 2016 |
Mar. 29, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares issued in period | 5,807 | |
Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost related to stock awards | $ 70,901 | $ 53,412 |
Unamortized stock compensation expense | $ 660,564 | |
Unamortized stock compensation expense, recognition period | 2 years 9 months 18 days | |
Options converted | 14,000 | |
Warrant | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost related to stock awards | $ 0 | $ 6,523 |
Unamortized warrant compensation expense | $ 0 |
SUBSEQUENT EVENTS (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Apr. 28, 2016 |
Mar. 27, 2016 |
|
Subsequent Event [Line Items] | ||
Common stock, dividends, per share, declared | $ 0.25 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Dividend declared date | Apr. 28, 2016 | |
Common stock, dividends, per share, declared | $ 0.25 | |
Dividend payable date | May 16, 2016 | |
Dividend payable date of record | May 09, 2016 |
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