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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 24, 2017



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-36704

BG STAFFING, INC.

(exact name of registrant as specified in its charter)



Delaware	26-0656684
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5850 Granite Parkway, Suite 730

Plano, Texas 75024

(972) 692-2400

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer	¨		Accelerated filer	þ
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	¨
			Emerging growth company	þ

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

The number of shares outstanding of the registrant’s common stock as of October 30, 2017 was 8,759,376.

TABLE OF CONTENTS



PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	4
	Unaudited Consolidated Balance Sheets	4
	Unaudited Consolidated Statements of Income	5
	Unaudited Consolidated Statement of Changes in Stockholders' Equity	6
	Unaudited Consolidated Statements of Cash Flows	7
	Notes to Unaudited Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32

PART II	OTHER INFORMATION	34
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	34
Item 6.	Exhibits	35

Forward-Looking Statements

This Quarterly Report on Form-10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including, but not limited to, statements regarding:


•	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.

You can identify these and other forward-looking statements by the use of words such as "aim," "potential," “may,” “could,” “would,” “might,” “will,” “expect,” “intend,” “plan,” “budget,” “scheduled,” “estimate,” “anticipate,” “believe,” “forecast,” “future” or “continue” or the negative thereof or similar variations.

These forward-looking statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q and our current expectations, forecasts and assumptions and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date. Future performance cannot be ensured. Actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include:


•	the availability of workers’ compensation insurance coverage at commercially reasonable terms;


•	the availability of qualified temporary workers;


•	compliance with federal, state and local 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 25, 2016.

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we do not undertake any obligation to update or release any revisions to these forward-looking statements to reflect any events or circumstances, whether as a result of new information, future events, changes in assumptions or otherwise, after the date hereof.

Where You Can Find Other Information

Our website is www.bgstaffing.com. Information contained on our website is not part of this Quarterly Report on Form 10-Q. Information that we file with or furnish to the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to or exhibits included in these reports are available for download, free of charge, on our website soon after such reports are filed with or furnished to the SEC. These reports and other information, including exhibits filed or furnished therewith, are also available at the SEC’s website at www.sec.gov. You may also obtain and copy any document we file with or furnish to the SEC at the SEC’s public reference room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the SEC’s public reference facilities by calling the SEC at 1-800-SEC-0330. You may request copies of these documents, upon payment of a duplicating fee, by writing to the SEC at its principal office at 100 F Street, NE, Room 1580, Washington, D.C. 20549.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

BG Staffing, Inc. and Subsidiaries

UNAUDITED CONSOLIDATED BALANCE SHEETS



			September 24, 2017		December 25, 2016
ASSETS
Current assets
	Accounts receivable (net of allowance for doubtful accounts of $473,573 at 2017 and 2016)		$	40,618,312	$	33,328,900
	Prepaid expenses		529,469		950,696
	Other current assets		98,261		154,673
		Total current assets	41,246,042		34,434,269

Property and equipment, net			1,700,470		1,910,858

Other assets
	Deposits		2,799,813		2,657,517
	Deferred income taxes, net		9,916,170		9,512,455
	Intangible assets, net		38,803,342		23,514,376
	Goodwill		17,826,199		9,184,659
		Total other assets	69,345,524		44,869,007
	Total assets		$	112,292,036	$	81,214,134

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
	Long-term debt, current portion (net of deferred finance fees of $142,090 and $-0- for 2017 and 2016, respectively)		$	2,614,160	$	—
	Accrued interest		308,979		100,868
	Accounts payable		1,946,662		951,672
	Accrued payroll and expenses		12,566,637		9,668,475
	Accrued workers’ compensation		281,237		754,556
	Contingent consideration, current portion		5,535,068		3,580,561
	Other current liabilities		317,294		—
	Income taxes payable		437,337		193,264
		Total current liabilities	24,007,374		15,249,396

Line of credit (net of deferred finance fees of $791,699 and $264,520 for 2017 and 2016, respectively)			19,598,722		23,618,194
Long-term debt, less current portion (net of deferred finance fees of $277,750 and $-0- for 2017 and 2016, respectively)			21,466,000		—
Contingent consideration, less current portion			4,891,847		1,586,324
Other long-term liabilities			219,061		271,766
	Total liabilities		70,183,004		40,725,680

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,8,759,376 and 8,668,485 shares issued and outstanding for 2017 and 2016, respectively			87,594		86,685
Additional paid in capital			37,585,052		36,142,688
Retained earnings			4,436,386		4,259,081
	Total stockholders’ equity		42,109,032		40,488,454
	Total liabilities and stockholders’ equity		$	112,292,036	$	81,214,134

The accompanying notes are an integral part of these unaudited consolidated financial statements.

BG Staffing, Inc. and Subsidiaries

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

For the Thirteen and Thirty-nine Week Periods Ended September 24, 2017 and September 25, 2016



		Thirteen Weeks Ended						Thirty-nine Weeks Ended
		2017			2016			2017			2016
Revenues		$	71,281,674		$	67,407,350		$	196,899,224		$	189,573,350
Cost of services		53,033,615			50,975,462			147,752,650			144,610,307
	Gross profit	18,248,059			16,431,888			49,146,574			44,963,043
Selling, general and administrative expenses		11,175,596			10,291,746			31,562,377			28,668,466
Depreciation and amortization		1,436,279			1,673,546			4,672,755			5,181,456
	Operating income	5,636,184			4,466,596			12,911,442			11,113,121
Loss on extinguishment of debt		—			—			—			(404,119		)
Interest expense, net		(883,668		)	(701,968		)	(2,279,652		)	(3,278,182		)
	Income before income taxes	4,752,516			3,764,628			10,631,790			7,430,820
Income tax expense		1,615,653			1,416,773			3,908,570			2,852,346
	Net income	$	3,136,863		$	2,347,855		$	6,723,220		$	4,578,474

Net income per share:
	Basic	$	0.36		$	0.27		$	0.77		$	0.58
	Diluted	$	0.35		$	0.26		$	0.75		$	0.56

Weighted-average shares outstanding:
	Basic	8,759,376			8,658,061			8,724,811			7,920,000
	Diluted	9,077,147			9,028,398			9,019,878			8,219,876

The accompanying notes are an integral part of these unaudited consolidated financial statements.

BG Staffing, Inc. and Subsidiaries

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Thirty-nine Week Period Ended September 24, 2017



			Common Stock
	Preferred Stock		Shares	Par Value		Additional Paid in Capital		Retained Earnings			Total
Stockholders’ equity, December 25, 2016	$	—	8,668,485	$	86,685	$	36,142,688	$	4,259,081		$	40,488,454
Share-based compensation	—		—	—		357,024		—			357,024
Issuance of shares, net of offering costs	—		70,670	707		991,793		—			992,500
Exercise of common stock options	—		20,221	202		93,547		—			93,749
Cash dividend declared ($0.25 per share)	—		—	—		—		(6,545,915		)	(6,545,915		)
Net income	—		—	—		—		6,723,220			6,723,220
Stockholders’ equity, September 24, 2017	$	—	8,759,376	$	87,594	$	37,585,052	$	4,436,386		$	42,109,032

The accompanying notes are an integral part of these unaudited consolidated financial statements.

BG Staffing, Inc. and Subsidiaries

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Thirty-nine Week Periods Ended September 24, 2017 and September 25, 2016



				2017			2016
Cash flows from operating activities
	Net income			$	6,723,220		$	4,578,474
		Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation		428,155			355,833
		Amortization		4,244,600			4,825,623
		Loss on disposal of property and equipment		17,373			10,192
		Loss on extinguishment of debt, net		—			404,119
		Contingent consideration adjustment		—			24,642
		Amortization of deferred financing fees		168,797			80,049
		Amortization of debt discounts		—			32,355
		Interest expense on contingent consideration payable		907,340			1,449,316
		Provision for doubtful accounts		88,000			209,528
		Share-based compensation		357,024			252,972
		Deferred income taxes		(403,715		)	(1,101,702		)
		Net changes in operating assets and liabilities, net of effects of acquisitions:
			Accounts receivable	(1,803,486		)	(3,362,087		)
			Prepaid expenses	519,859			285,304
			Other current assets	72,150			30,547
			Deposits	(137,726		)	(321,925		)
			Accrued interest	208,111			(291,954		)
			Accounts payable	(518,921		)	(324,372		)
			Accrued payroll and expenses	1,252,864			1,024,696
			Accrued workers’ compensation	(473,319		)	(56,101		)
			Other current liabilities	120,569			(945,382		)
			Income taxes payable	244,072			(7,159		)
			Other long-term liabilities	(52,703		)	(41,398		)
		Net cash provided by operating activities		11,962,264			7,111,570

Cash flows from investing activities
	Business acquired, net of cash received			(24,500,000		)	—
	Capital expenditures			(895,989		)	(618,157		)
	Proceeds from the sale of property and equipment			1,500			7,587
		Net cash used in investing activities		(25,394,489		)	(610,570		)



			2017			2016

Cash flows from financing activities
	Net (payments) borrowings under line of credit		(3,492,293		)	3,041,612
	Proceeds from issuance of long-term debt		25,000,000			—
	Principal payments on long-term debt		(500,000		)	(15,281,657		)
	Payments of dividends		(6,545,915		)	(5,863,801		)
	Net proceeds from issuance of common stock		86,249			15,254,406
	Contingent consideration paid		—			(3,498,197		)
	Deferred financing costs		(1,115,816		)	(153,363		)
		Net cash provided by (used in) financing activities	13,432,225			(6,501,000		)
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		$	930,811		$	2,221,430
	Cash paid for taxes, net of refunds		$	4,058,353		$	3,961,226

The accompanying notes are an integral part of these unaudited consolidated financial statements.

BG Staffing, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - 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. We now have 63 branch offices and 15 on-site locations located across 26 states.

The Multifamily segment provides front office and maintenance temporary workers to various apartment communities, in 23 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") and finance and accounting customer projects.

The Commercial segment provides temporary workers primarily to logistics, distribution, and call center customers needing a flexible workforce in Illinois, Wisconsin, New Mexico, Texas, Tennessee and Mississippi.

Our business experiences seasonal fluctuations. Our quarterly operating results are affected by the number of billing days in a quarter, as well as the seasonality of our customers’ business. Demand for our Multifamily staffing services increase in the second and is highest during the third quarter of the year due to the increased turns in multifamily units during the summer months when schools are not in session. Demand for our Commercial staffing services increases during the third quarter of the year and peaks in the fourth quarter. Demand for our Commercial staffing services is lower during the first quarter, in part due to customer shutdowns and adverse weather conditions in the winter months. In addition, our cost of services typically increases in the first quarter primarily due to the reset of payroll taxes.

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 GAAP 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 25, 2016, included in its Annual Report on Form 10-K.

NOTE 2 - 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 September 24, 2017 and December 25, 2016, and include the thirteen and thirty-nine week periods ended September 24, 2017 and September 25, 2016. The thirty-nine weeks ended September 24, 2017 and September 25, 2016 are referred to herein as Fiscal 2017 and 2016, respectively.

Reclassifications

Certain reclassifications have been made to the 2016 financial statements to conform with the 2017 presentation.

BG Staffing, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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, intangible assets and contingent consideration obligations related to acquisitions. Additionally, the valuation of share based compensation option expense uses a model based upon interest rates, stock prices, maturity estimates, volatility and other factors. The Company believes these estimates and assumptions are reliable. However, these estimates and assumptions may change in the future based on actual experience as well as market conditions.

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 and contingent consideration. The carrying values of cash and cash equivalents, accounts receivables, prepaid expenses, accounts payable, accrued liabilities, 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 and term loan 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's 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 September 24, 2017 and December 25, 2016 or revenue for the thirty-nine week periods ended September 24, 2017 and September 25, 2016. Geographic revenue in excess of 10% of the Company's consolidated revenue in Fiscal 2017 and the related percentage for Fiscal 2016 was generated in the following areas:



	Thirty-nine Weeks Ended
	September 24, 2017		September 25, 2016
Maryland	12	%	13	%
Tennessee	11	%	5	%
Texas	30	%	32	%

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 expected 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.

BG Staffing, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Changes in the allowance for doubtful accounts are as follows:



	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	September 24, 2017			September 25, 2016			September 24, 2017			September 25, 2016
Beginning balance	$	473,573		$	449,823		$	473,573		$	446,548
Provision for doubtful accounts	75,772			162,612			88,000			209,528
Amounts written off, net	(75,772		)	(162,612		)	(88,000		)	(206,253		)
Ending balance	$	473,573		$	449,823		$	473,573		$	449,823

Property and Equipment

Property and equipment are stated net of accumulated depreciation and amortization of $1,213,156 and $1,301,295 at September 24, 2017 and December 25, 2016, respectively. During the thirty-nine week periods ended September 24, 2017, the Company disposed of fully depreciated assets primarily not in use with an original cost of $426,066.

Deposits

The Company maintains guaranteed costs policies for workers' compensation coverage in the states in which it operates, with minimal loss retention for employees in the commercial segment. Under these policies, the Company is required to maintain refundable deposits of $2,565,817 and $2,476,201, which are included in Deposits the accompanying consolidated balance sheets as of September 24, 2017 and December 25, 2016, 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 Fiscal 2017 and Fiscal 2016.

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 ten years, based on a pattern in which the economic benefit of the respective intangible asset is realized.

The Company capitalizes purchased software and internal payroll costs directly incurred in the modification of software for internal use. Software maintenance and training costs are expensed in the period incurred.

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.

BG Staffing, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Paid-in-kind Interest

The Company recorded 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 are amortized on 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 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. Prior to Fiscal 2017, 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. For acquisitions beginning in Fiscal 2017, based on new valuation methodology, the fair value calculation of the expected future payments uses a discount rate that is commensurate with the risks of the expected cash flow. The resulting discount is amortized as interest expense over the outstanding period using the effective interest method.

Revenue Recognition

The Company derives its revenues from three segments: Multifamily, Professional, and Commercial. The Company provides temporary 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 from services and the related direct costs on a gross basis in accordance with the accounting guidance on reporting revenue gross as a principal versus net as an agent.

Temporary staffing revenues - Our revenues are generated based on negotiated rates and invoiced on a per-hour basis. Accordingly, temporary staffing revenues are recognized on the hours worked when the services are rendered by the Company’s temporary workers.

Permanent placement staffing revenues - Permanent placement staffing revenues are recognized when employment candidates start their 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 income 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. Antidilutive shares are excluded from the calculation of diluted earnings per share.

BG Staffing, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following is a reconciliation of the number of shares used in the calculation of basic and diluted earnings per share for the respective periods:



		Thirteen Weeks Ended		Thirty-nine Weeks Ended
		September 24, 2017	September 25, 2016	September 24, 2017	September 25, 2016
Weighted-average number of common shares outstanding:		8,759,376	8,658,061	8,724,811	7,920,000
Effect of dilutive securities:
	Stock options	279,735	323,313	260,404	263,915
	Warrants	38,036	47,024	34,663	35,961
Weighted-average number of diluted common shares outstanding		9,077,147	9,028,398	9,019,878	8,219,876

	Stock options	178,000	50,000	178,000	50,000
	Warrants	32,250	—	32,250	—
Antidilutive shares		210,250	50,000	210,250	50,000

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. The Company recognizes any penalties when necessary as part of selling, general and administrative expenses. Goodwill is deductible for tax purposes.

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.

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 Fiscal 2017 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 offset by a Work Opportunity Tax Credit.

Income tax expense attributable to income from operations for Fiscal 2016 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.

BG Staffing, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") ASU 2014-09, Revenue from Contracts with Customers. Since May 2014, the FASB has issued additional and amended authoritative guidance regarding revenue from contracts with customers in order to clarify and improve the understanding of the implementation guidance. As amended, the new guidance requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The new standard is effective for annual and interim periods beginning after December 15, 2017. The Company is in the process of evaluating the impact of adoption. Based on the progress to date, the Company does not believe the adoption of this accounting guidance will have a material impact on the Company's financial condition or results of operations.

In April 2015, the FASB issued ASU 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” which provides more specific guidance related to how companies account for cloud computing costs. In December 2016, the FASB issued ASU 2016-19, “Technical Corrections and Improvements” to clarify guidance, correct errors and make minor improvements to the Accounting Standards Codification (“ASC”) which amends ASC 350-40 to clarify that after ASU 2015-05 is adopted, companies are required to record an intangible asset for the license acquired in a software licensing arrangement. The asset for the software license is required to be recognized and measured at cost. The Company adopted both ASUs on a prospective basis in the second quarter of fiscal 2017 which did not have a material impact on the consolidated financial statements.

In March 2016, the FASB issued ASU 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 was effective for the Company beginning with the first quarter of 2017. The Company adopted this ASU on a prospective basis which had no impact on the consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04 Intangibles-Goodwill and Other Simplifying the Test for Goodwill Impairment, which provides guidance to simplify the subsequent measurement of goodwill by eliminating the Step 2 procedure from the goodwill impairment test. The new standard is effective for the Company beginning with the fourth quarter of 2020. The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on the Company's financial condition or results of operations.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. The new standard is effective for the Company beginning with the first quarter 2018. The Company does not anticipate the adoption of ASU 2017-09 will have a material impact on the Company's financial condition or results of operations.

NOTE 3 - ACQUISITIONS

Zycron, Inc.

On April 3, 2017, the Company acquired substantially all of the assets and assumed certain liabilities of Zycron, Inc. (“Zycron”) for an initial cash consideration paid of $18.5 million and issued $1.0 million (70,670 shares privately placed) of the Company's common stock at closing. An additional $0.5 million was held back as partial security for post-closing purchase price adjustments and indemnification obligations. The purchase agreement further provides for contingent consideration of up to $3.0 million based on the performance of the acquired business for the two years following the date of acquisition. The purchase agreement contained a provision for a “true up” of acquired working capital under a process that is currently in progress.

The net assets acquired were assigned to the Professional segment. The acquisition of Zycron allows the Company to strengthen and expand its IT operations throughout the southeastern U.S. region and selected markets across the country with talent and project management services.

BG Staffing, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The 2016 consolidated statement of operations does not include any operating results of Zycron. 13 and 25 weeks of Zycron operations are included in the thirteen and thirty-nine week periods ended September 24, 2017, which is approximately $9.0 million and $17.6 million, respectively, of revenue and and $0.9 million and $1.6 million, respectively, of operating income. The preliminary purchase price has been allocated to the assets acquired and liabilities assumed as of the date of acquisition as follows:



Accounts receivable	$	4,345,312
Prepaid expenses and other assets	82,122
Property and equipment	128,431
Intangible assets	13,818,474
Goodwill	6,901,101
Liabilities assumed	(2,983,222		)
Total net assets acquired	$	22,292,218

Cash	$	18,500,000
Hold back	500,000
Common stock	1,000,000
Working capital adjustment	(299,835		)
Fair value of contingent consideration	2,592,053
Total fair value of consideration transferred for acquired business	$	22,292,218



	Estimated Fair Value		Estimated Useful Lives
Covenants not to compete	$	475,000	5 years
Trade name	5,006,000		Indefinite
Customer list	8,337,474		10 years
Total	$	13,818,474

Smart Resources, Inc.

On September 18, 2017, the Company acquired substantially all of the assets and assumed certain liabilities of Smart Resources, Inc. and Accountable Search, LLC (collectively, "Smart") for an initial cash consideration paid of $6.0 million. The purchase agreement provides for contingent consideration of up to $2.0 million based on the performance of the acquired business for the two years following the date of acquisition. The purchase agreement contained a provision for a “true up” of acquired working capital under a process that will begin approximately 90 days after the closing date.

The net assets acquired were assigned to the Professional segment. The acquisition of Smart allows the Company to strengthen and expand its finance and accounting operations in the Chicago market with temporary and direct hire services.

The 2016 consolidated statement of income does not include any operating results of Smart. One (1) week of Smart operations are included in the thirteen and thirty-nine week periods ended September 24, 2017, which is approximately $0.2 million of revenue and $-0- of operating income. The preliminary purchase price has been allocated to the assets acquired and liabilities assumed as of the date of acquisition as follows:

BG Staffing, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



Accounts receivable	$	1,228,614
Prepaid expenses and other assets	36,816
Property and equipment	40,626
Intangible assets	4,927,045
Goodwill	1,740,439
Liabilities assumed	(216,343		)
Total net assets acquired	$	7,757,197

Cash	$	6,000,000
Working capital adjustment	(3,440		)
Fair value of contingent consideration	1,760,637
Total fair value of consideration transferred for acquired business	$	7,757,197

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 Zycron and Smart acquisitions had taken place on the first day of the Company's 2016 fiscal year would be as follows (dollars in thousands, except per share amounts):



	Thirteen Weeks Ended				Thirty-nine Weeks Ended
	September 24, 2017		September 25, 2016		September 24, 2017		September 25, 2016
Revenues	$	73,782	$	80,519	$	214,659	$	228,577
Gross profit	$	19,196	$	18,428	$	54,391	$	54,034
Net income	$	3,203	$	2,933	$	6,992	$	5,270
Income per share:
Basic	$	0.37	$	0.34	$	0.80	$	0.67
Diluted	$	0.35	$	0.32	$	0.78	$	0.64

Pro forma net income includes amortization of identifiable intangible assets, interest expense on additional borrowings on the Revolving Facility at a rate of 4.5% and tax expense of the pro forma adjustments at an effective tax rate of approximately 36.8% for Fiscal 2017 and 38.4% for Fiscal 2016. The pro forma information presented includes adjustments that will have a continuing impact on the operations that management considers non-recurring in assessing Zycron and Smart's historical performances.

Amounts set forth above are not necessarily indicative of the results that would have been attained had the Zycron and Smart acquisitions taken place on the first day of the Company’s 2016 fiscal year or of the results that may be achieved by the combined enterprise in the future.

NOTE 4 - INTANGIBLE ASSETS

Intangible assets are stated net of accumulated amortization of $34,501,414 and $30,205,434 at September 24, 2017 and December 25, 2016, respectively. During the thirty-nine week periods ended September 24, 2017, the Company added $440,668 and reclassified $347,379 of software assets from property and equipment. Total amortization expense for the thirteen week periods ended September 24, 2017 and September 25, 2016 was $1,291,925 and $1,548,914, respectively. Total amortization expense for the thirty-nine week periods ended September 24, 2017 and September 25, 2016 was $4,244,600 and $4,825,623, respectively.

BG Staffing, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - ACCRUED PAYROLL AND EXPENSES AND CONTINGENT CONSIDERATION

Accrued payroll and expenses consist of the following at:



	September 24, 2017		December 25, 2016
Temporary worker payroll	$	6,672,200	$	5,547,161
Temporary worker payroll related	2,570,505		2,033,602
Accrued bonuses and commissions	1,181,071		892,742
Other	2,142,861		1,194,970
	$	12,566,637	$	9,668,475

The following is a schedule of future estimated contingent consideration payments to various parties as of September 24, 2017:



	Estimated Cash Payment		Discount			Net
Due in:
Less than one year	$	5,750,000	$	(214,932	)	$	5,535,068
One to two years	3,250,000		(727,741		)	2,522,259
Two to three years	2,500,000		(130,412		)	2,369,588
Contingent consideration	$	11,500,000	$	(1,073,085	)	$	10,426,915

As of September 24, 2017, the Zycron hold back balance of $158,072, included in other current liabilities, was a partial security for post-closing purchase price adjustments and indemnification obligations and also contained the working capital adjustment and other amounts paid or received on behalf of the either party to the acquisition.

NOTE 6 - DEBT

The Company had a credit agreement (the “Credit Agreement”) with TCB providing for a 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 $35.0 million.

In connection with the acquisition of the assets of Zycron described above, on April 3, 2017, the Company entered into an Amended and Restated Credit Agreement (the “Amended Credit Agreement”) with TCB with an aggregate commitment of $55.0 million. The Amended Credit Agreement provides for a revolving credit facility maturing April 3, 2022 (the “Revolving Facility”), 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 $35.0 million and also provides for a term loan maturing April 3, 2022 (the “Term Loan”) in the amount of $20.0 million with principal payable quarterly, based on an annual percentage of the original principal amount as defined in the Amended Credit Agreement. TCB may also make loans (“Swing Line Loans”) not to exceed the lesser of $7.5 million or the aggregate commitment. Additionally, the Amended Credit Agreement provides for the Company to increase the commitment with a $20.0 million accordion feature.

The Company borrowed $20.0 million on the Term Loan in conjunction with the closing of the Zycron acquisition on April 3, 2017. Proceeds from the foregoing loan arrangements were used to pay off existing indebtedness of the Company on the revolving credit facility under the Credit Agreement, dated as of August 21, 2015, as amended, with TCB. The Company borrowed $5.0 million on the accordion in conjunction with the closing of the Smart acquisition on September 18, 2017.

The Revolving Facility and Term Loan bear interest either at the Base Rate plus the Applicable Margin or LIBOR plus the Applicable Margin (as such terms are defined in the Amended Credit Agreement). Swing Line Loans bear interest at the Base Rate plus the Applicable Margin. All interest and commitment fees are generally paid quarterly. The Company’s obligations under the Amended Credit Agreement are secured by a first priority security interest in substantially all tangible and intangible property of the Company and its subsidiaries.

BG Staffing, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The Amended Credit Agreement's customary affirmative and negative covenants remain substantially the same as those in effect under the Credit Agreement including 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 and the Company must comply with certain financial covenants. The Company may not permit the Leverage Ratio (as defined in the Amended Credit Agreement) to be greater than the following: 2.50 to 1.0 (April 3, 2017 to end of fiscal March 2018), 2.00 to 1.0 (March 31, 2018 to end of fiscal March 2019), 1.50 to 1.0 (March 31, 2019 to end of fiscal March 2020), 1.0 to 1.0 (From and after end of fiscal March, 2020). Moreover, the Company may not permit, for any four fiscal quarter period, the Fixed Charge Coverage Ratio (as defined in the Amended Credit Agreement) to be less than 1.50 to 1.00, and may not permit the Dividend Fixed Charge Coverage Ratio (as defined in the Amended Credit Agreement) to be less than (a) 1.10 to 1.00 for any four fiscal quarter period ending on or before September 30, 2017 or (b) 1.20 to 1.00 for any four fiscal quarter period thereafter. As of September 24, 2017, the Company was in compliance with these covenants.

Line of Credit

At September 24, 2017 and December 25, 2016, $20.4 million and $23.9 million, respectively, was outstanding on the Revolving Facility with TCB. Borrowings under the Revolving Facility bore interest equal to Base Rate or LIBOR plus the Applicable Margin (as such terms are defined in the Amended Credit Agreement or Credit Amendment, respectively). Additionally, the Company pays an unused commitment fee on the unfunded portion of the Revolving Facility.

Borrowings under the Revolving Facility bore interest at:



	September 24, 2017				December 25, 2016
Base Rate	$	5,390,421	5.25	%	$	8,882,714	4.25	%
LIBOR	5,000,000		4.05	%	5,000,000		3.95	%
LIBOR	5,000,000		4.06	%	5,000,000		3.99	%
LIBOR	5,000,000		4.07	%	5,000,000		4.16	%
Total	$	20,390,421			$	23,882,714

Long-Term Debt

Long-term debt consists of and bore interest at:



	September 24, 2017					December 25, 2016
Base Rate	$	700,000		5.25	%	$	—	—	%
LIBOR	6,500,000			4.30	%	—		—	%
LIBOR	6,500,000			4.31	%	—		—	%
LIBOR	6,000,000			4.32	%	—		—	%
LIBOR	4,800,000			4.33	%	—		—	%
Less current portion on long-term debt	(2,756,250		)			—
Long-term debt, less current portion	$	21,743,750				$	—

NOTE 7 - 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;

BG Staffing, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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:

Amounts Recorded at Fair Value

Financial Statement Classification

Fair Value Hierarchy

September 24,
2017

December 25,
2016

Contingent consideration, net

Contingent consideration, net - current and long-term

Level 3

10,426,915

5,166,885

The changes in the Level 3 fair value measurements from December 25, 2016 to September 24, 2017 relate to $4.4 million in the Zycron and Smart acquisitions and $0.9 million in accretion. The key inputs in determining the fair value of the contingent consideration as of September 24, 2017 and December 25, 2016 included discount rates of ranging from 8% and 22% as well as management's estimates of future sales volumes and EBITDA.

NOTE 8 - 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.

NOTE 9 – 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.

On April 3, 2017, the Company issued 70,670 shares of common stock, $0.01 par value per share, in a private placement for a value of $1 million at the closing of the Zycron acquisition. The Company incurred $7,500 in offering costs.

BG Staffing, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 – SHARE-BASED COMPENSATION

Stock Options

On May 16, 2017, the stockholders of the Company approved and made effective an amendment to the BG Staffing, Inc. 2013 Long-Term Incentive Plan to add an additional 250,000 shares of common stock available for issuance. The board of directors of the Company had previously approved the amendment subject to stockholder approval. A total of 900,000 shares of common stock were originally reserved for issuance, which brings the new total available for issuance to 1,150,000 shares of common stock.

For the thirteen week periods ended September 24, 2017 and September 25, 2016, the Company recognized $92,293 and $111,134 of compensation cost related to stock option awards, respectively. For the thirty-nine week periods ended September 24, 2017 and September 25, 2016, the Company recognized $357,024 and $252,972 of compensation cost related to stock option awards, respectively. Unamortized stock compensation expense as of September 24, 2017 amounted to $680,321, which is expected to be recognized over the next 2.6 years.

A summary of stock option activity is presented as follows:



	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 25, 2016	678,411		$	8.95	7.8	$	4,511
Granted	128,000		$	16.76
Exercised	(28,800	)	$	7.71
Forfeited / Canceled	(12,200	)	$	11.00
Options outstanding at September 24, 2017	765,411		$	10.27	7.5	$	5,096

Options exercisable at December 25, 2016	395,911		$	8.01	7.6	$	2,965
Options exercisable at September 24, 2017	479,611		$	8.65	7.0	$	3,963



	Number of Shares	Weighted Average Grant Date Fair Value
Nonvested outstanding at December 25, 2016	282,500	$	2.57
Nonvested outstanding at September 24, 2017	285,800	$	3.01

For the thirty-nine week periods ended September 24, 2017, the Company issued 5,221 shares of common stock upon the cashless exercise of 9,402 stock options.

Warrant Activity

For the thirteen and thirty-nine week periods ended September 24, 2017 and September 25, 2016, the Company did not recognize compensation cost related to warrants. There was no unamortized stock compensation expense to be recognized as of September 24, 2017.

BG Staffing, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

A summary of warrant activity is presented as follows:



	Number of Shares	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Total Intrinsic Value of Options (in thousands)
Warrants outstanding at December 25, 2016	123,984	$	11.51	2.8	$	532
Warrants outstanding at September 24, 2017	123,984	$	11.89	2.6	$	494

Warrants exercisable at December 25, 2016	91,734	$	9.65	2.2	$	532
Warrants exercisable at September 24, 2017	123,984	$	11.89	2.6	$	494



	Number of Shares	Weighted Average Grant Date Fair Value
Nonvested outstanding at December 25, 2016	32,250	$	—
Nonvested outstanding at September 24, 2017	—	$	—

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.

NOTE 11 - 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 $232,863 and $217,103 to the 401(k) Plan for the thirteen week periods ended September 24, 2017 and September 25, 2016, respectively. The Company contributed $657,623 and $622,772 to the 401(k) Plan for the thirty-nine week periods ended September 24, 2017 and September 25, 2016, respectively.

NOTE 12 - 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, in 23 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 IT and finance and accounting customer projects. The Commercial segment provides temporary workers primarily to logistics, distribution, and call center customers needing a flexible workforce in Illinois, Wisconsin, New Mexico, Texas, Tennessee and Mississippi.

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, fixed assets, deferred tax assets, and other assets.

BG Staffing, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated results for the periods indicated:



	Thirteen Weeks Ended				Thirty-nine Weeks Ended
	September 24, 2017		September 25, 2016		September 24, 2017		September 25, 2016
Revenue:
Multifamily	$	21,758,642	$	18,889,265	$	51,436,393	$	43,556,297
Professional	31,739,816		25,821,676		91,769,877		80,828,787
Commercial	17,783,216		22,696,409		53,692,954		65,188,266
Total	$	71,281,674	$	67,407,350	$	196,899,224	$	189,573,350

Depreciation:
Multifamily	$	23,255	$	17,122	$	70,159	$	40,577
Professional	44,261		39,071		129,968		113,482
Commercial	27,690		23,018		80,231		68,447
Corporate	49,148		45,421		147,797		133,327
Total	$	144,354	$	124,632	$	428,155	$	355,833



Amortization:
Multifamily	$	—		$	—		$	—		$	62,848
Professional	1,222,402			1,454,293			3,993,474			4,399,296
Commercial	66,151			94,621			245,903			363,479
Corporate	3,372			—			5,223			—
Total	$	1,291,925		$	1,548,914		$	4,244,600		$	4,825,623

Operating income:
Multifamily	$	4,020,995		$	3,331,981		$	8,524,536		$	6,859,318
Professional	2,119,550			1,163,674			6,344,222			4,737,610
Commercial	1,108,842			1,364,353			3,000,444			4,070,037
Corporate - selling	(119,097		)	—			(371,906		)	—
Corporate - general and administrative	(1,494,106		)	(1,393,412		)	(4,585,854		)	(4,553,844		)
Total	$	5,636,184		$	4,466,596		$	12,911,442		$	11,113,121

Capital expenditures:
Multifamily	$	3,947		$	23,185		$	76,542		$	119,592
Professional	52,987			73,168			501,928			82,336
Commercial	2,463			19,908			71,262			60,229
Corporate	—			71,194			246,257			356,000
Total	$	59,397		$	187,455		$	895,989		$	618,157

BG Staffing, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



	September 24, 2017		December 25, 2016
Total Assets:
Multifamily	$	13,283,021	$	9,320,335
Professional	70,887,537		39,548,308
Commercial	17,359,515		21,574,855
Corporate	10,761,963		10,770,636
Total	$	112,292,036	$	81,214,134

NOTE 13 - SUBSEQUENT EVENTS

Dividend

On October 20, 2017, 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 November 7, 2017 to all shareholders of record as of the close of business on November 2, 2017.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our accompanying Unaudited Consolidated Financial Statements and related notes thereto. Comparative segment revenues and related financial information are discussed herein and are presented in Note 12 to our Unaudited Consolidated Financial Statements. See “Forward Looking Statements” on page 3 of this report and “Risk Factors” included in our filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended December 25, 2016, for a description of important factors that could cause actual results to differ from expected results.

Overview

We are a leading national provider of professional temporary staffing services and have completed a series of acquisitions including the acquisition of BG Personnel, LP and B G Staff Services Inc. in June 2010, and substantially all of the assets of JNA Staffing, Inc. in December 2010, Extrinsic, LLC in December 2011, American Partners, Inc. in December 2012, InStaff Holding Corporation and InStaff Personnel, LLC in June 2013, D&W Talent, LLC ("D&W") in March 2015, Vision Technology Services, Inc., Vision Technology Services, LLC, and VTS-VM, LLC (collectively, “VTS”) in October 2015, Zycron, Inc. in April 2017, and Smart Resources, Inc. and Accountable Search, LLC in September 2017. We operate within three industry segments: Multifamily, Professional, and Commercial. We provide services to customers primarily within the United States of America. We now have 63 branch offices and 15 on-site locations located across 26 states.

The Professional segment provides skilled temporary workers on a nationwide basis for information technology ("IT") and finance and accounting customer projects.

Results of Operations

The following tables summarize key components of our results of operations for the periods indicated, both in dollars and as a percentage of revenues, and have been derived from our unaudited consolidated financial statements.



		Thirteen Weeks Ended						Thirty-nine Weeks Ended
		September 24, 2017			September 25, 2016			September 24, 2017			September 25, 2016
		(dollars in thousands)
Revenues		$	71,282		$	67,407		$	196,899		$	189,573
Cost of services		53,034			50,975			147,753			144,610
	Gross profit	18,248			16,432			49,146			44,963
Selling, general and administrative expenses		11,175			10,291			31,561			28,670
Depreciation and amortization		1,436			1,674			4,673			5,181
	Operating income	5,637			4,467			12,912			11,112
Loss on extinguishment of debt		—			—			—			(404		)
Interest expense, net		(884		)	(702		)	(2,280		)	(3,278		)
	Income before income tax	4,753			3,765			10,632			7,430
Income tax expense		1,616			1,417			3,909			2,852
	Net income	$	3,137		$	2,348		$	6,723		$	4,578

Revenues		100.0		%	100.0		%	100.0		%	100.0		%
Cost of services		74.4		%	75.6		%	75.0		%	76.3		%
	Gross profit	25.6		%	24.4		%	25.0		%	23.7		%
Selling, general and administrative expenses		15.7		%	15.3		%	16.0		%	15.1		%
Depreciation and amortization		2.0		%	2.5		%	2.4		%	2.7		%
	Operating income	7.9		%	6.6		%	6.6		%	5.9		%
Loss on extinguishment of debt		—		%	—		%	—		%	(0.2		)%
Interest expense, net		(1.2		)%	(1.0		)%	(1.2		)%	(1.7		)%
	Income before income tax	6.7		%	5.6		%	5.4		%	3.9		%
Income tax expense		2.3		%	2.1		%	2.0		%	1.5		%
	Net income	4.4		%	3.5		%	3.4		%	2.4		%

Thirteen Week Fiscal Period Ended September 24, 2017 (Fiscal Quarter 2017) Compared with Thirteen Week Fiscal Period Ended September 25, 2016 (Fiscal Quarter 2016)



Revenues:		Thirteen Weeks Ended
		September 24, 2017				September 25, 2016
		(dollars in thousands)
Revenues by segment:
	Multifamily	$	21,759	30.5	%	$	18,889	28.0	%
	Professional	31,740		44.5	%	25,822		38.3	%
	Commercial	17,783		25.0	%	22,696		33.7	%
	Total Revenues	$	71,282	100.0	%	$	67,407	100.0	%

Multifamily Revenues: Multifamily revenues increased approximately $2.9 million (15.2%), due to our continued geographic expansion plan. Revenue from branches outside of Texas accounted for approximately $1.6 million of the increase and revenue from branches in Texas increased approximately $1.3 million. The increase was due to an 8.5% increase in billed hours and a 6.0% increase in average bill rate. Revenue from existing offices accounted for approximately $1.2 million of the increase and revenue from new offices provided approximately $1.7 million.

Professional Revenues: Professional revenues increased approximately $5.9 million (22.9%), primarily from Zycron, which contributed approximately $9.0 million of new revenues. The remaining IT group decreased $2.1 million and the finance and accounting group decreased $0.9 million. The overall increase was due to a 26.8% increase in billed hours and increased permanent placements of $0.2 million, offset by a 3.2% decrease in average bill rate.

Commercial Revenues: Commercial revenues decreased approximately $4.9 million (21.6%). Texas branches decreased $3.1 million, other branches outside of the Midwest decreased $2.1 million, while the Illinois and Wisconsin locations increased $0.3 million. The overall revenue decrease was due to a 25% decrease in billed hours, offset by a 4.5% increase in average bill rate.

Gross Profit:

Gross profit represents revenues from services less cost of services expenses, which consist of payroll, payroll taxes, payroll-related insurance, temporary worker costs, and reimbursable costs.



		Thirteen Weeks Ended
		September 24, 2017				September 25, 2016
		(dollars in thousands)
Gross Profit by segment:
	Multifamily	$	8,198	44.9	%	$	7,009	42.7	%
	Professional	7,487		41.0	%	6,198		37.7	%
	Commercial	2,563		14.1	%	3,225		19.6	%
	Total Gross Profit	$	18,248	100.0	%	$	16,432	100.0	%



		Thirteen Weeks Ended
		September 24, 2017		September 25, 2016
Gross Profit Percentage by segment:
	Multifamily	37.7	%	37.1	%
	Professional	23.6	%	24.0	%
	Commercial	14.4	%	14.2	%
	Company Gross Profit	25.6	%	24.4	%

Overall, our gross profit has increased approximately $1.8 million (11.1%) due primarily to Zycron ($1.8 million) and growth in our Multifamily segment, offset by decreased revenues in our Commercial segment. As a percentage of revenue, gross profit has increased to 25.6% from 24.4% primarily due to a greater percentage of revenues coming from our Multifamily and Professional segments.

We determine spread as the difference between average bill rate and average pay rate.

Multifamily Gross Profit: Multifamily gross profit increased approximately $1.2 million (17.0%) in line with the increase in revenue. The increase in gross profit percentage of 0.6% was due primarily to 6.3% increase in average spread.

Professional Gross Profit: Professional gross profit increased approximately $1.3 million (20.8%), due to Zycron of $1.8 million, a 2.3% increase in average spread, offset by a $0.3 million decrease in the remaining IT group and a $0.2 million decrease in the finance and accounting group.

Commercial Gross Profit: Commercial gross profit decreased approximately $0.6 million (20.5%) due to a decrease in the corresponding revenue. The average spread increased 5.2%.

Selling, General and Administrative Expenses: Selling, general and administrative expenses increased approximately $0.9 million (8.6%) primarily related to an increase in Professional of $0.9 million from Zycron offest by a $0.6 million decrease in the remaining IT group and a $0.3 million increase in the finance and accounting group. Multifamily increased approximately $0.5 million from growth and new office expansion, partially offset by a decrease in Commercial of approximately $0.3 million from decreased revenues.

Depreciation and Amortization: Depreciation and amortization charges decreased approximately $0.2 million (14.3%). The decrease in depreciation and amortization is primarily due to Professional segment fully amortized intangible assets related to the 2011 Extrinsic, LLC acquisition.

Interest Expense, net: Interest expense, net increased approximately $0.2 million (25.9%) primarily due the new term note.

Income Taxes: Income tax expense increased approximately $0.2 million primarily due to higher pre-tax income offset by a decrease in the effective rate.

Thirty-nine Week Fiscal Period Ended September 24, 2017 ("Fiscal 2017") Compared with Thirty-nine Week Fiscal Period Ended September 25, 2016 ("Fiscal 2016")



Revenues:		Thirty-nine Weeks Ended
		September 24, 2017				September 25, 2016
		(dollars in thousands)
Revenues by segment:
	Multifamily	$	51,436	26.1	%	$	43,556	23.0	%
	Professional	91,770		46.6	%	80,829		42.6	%
	Commercial	53,693		27.3	%	65,188		34.4	%
	Total Revenues	$	196,899	100.0	%	$	189,573	100.0	%

Multifamily Revenues: Multifamily revenues increased approximately $7.9 million (18.1%) due to our continued geographic expansion plan. Revenue from branches outside of Texas accounted for approximately $5.5 million of the increase and revenue from branches in Texas increased approximately $2.4 million. The increase was due to a 11.3% increase in billed hours and a 5.9% increase in average bill rate. Revenue from existing offices accounted for approximately $4.8 million of the increase and revenue from new offices provided approximately $3.1 million.

Professional Revenues: Professional revenues increased approximately $10.9 million (13.5%), primarily from Zycron, which contributed approximately $17.6 million of new revenues. The remaining IT group decreased $5.1 million and the finance and accounting group decreased $1.6 million. The overall increase was due to a 11.9% increase in billed hours, an increase of 0.4% in average bill rate, and increased permanent placements of $0.5 million.

Commercial Revenues: Commercial revenues decreased approximately $11.5 million (17.6%). Texas branches decreased $6.8 million and other branches outside of the Midwest decreased $5.1 million, which were offset by Illinois and Wisconsin locations increased $0.4 million. The overall revenue decrease was due to a 22.1% decrease in billed hours that was offset by a 5.6% increase in average bill rate.

Gross Profit:

Gross profit represents revenues from services less cost of services expenses, which consist of payroll, payroll taxes, payroll-related insurance, temporary worker costs, and reimbursable costs.



		Thirty-nine Weeks Ended
		September 24, 2017				September 25, 2016
		(dollars in thousands)
Gross Profit by segment:
	Multifamily	$	19,506	39.7	%	$	16,172	36.0	%
	Professional	21,984		44.7	%	19,450		43.3	%
	Commercial	7,656		15.6	%	9,341		20.7	%
	Total Gross Profit	$	49,146	100.0	%	$	44,963	100.0	%



		Thirty-nine Weeks Ended
		September 24, 2017		September 25, 2016
Gross Profit Percentage by segment:
	Multifamily	37.9	%	37.1	%
	Professional	24.0	%	24.1	%
	Commercial	14.3	%	14.3	%
	Company Gross Profit	25.0	%	23.7	%

Overall, our gross profit has increased approximately $4.1 million (9.3%) due primarily to Zycron ($3.8 million) and increased revenues in our Multifamily segment, offset by decreased revenues in our Commercial segment. As a percentage of revenue, gross profit has increased to 25.0% from 23.7% primarily due to a higher percentage of our revenues from our Multifamily and Professional segments.

We determine spread as the difference between average bill rate and average pay rate.

Multifamily Gross Profit: Multifamily gross profit increased approximately $3.3 million (20.6%) consistent with the increase in revenue. The increase in gross profit percentage of 0.8% was due primarily to 6.6% increase in average spread.

Professional Gross Profit: Professional gross profit increased approximately $2.5 million (13.0%), due to Zycron of $3.8 million, a 5.4% increase in average spread, offset by a $0.9 million decrease in the remaining IT group and a $0.4 million decrease in the finance and accounting group.

Commercial Gross Profit: Commercial gross profit decreased approximately $1.7 million (18.0%) due to the corresponding decreased revenue. The average spread increased 5.7%.

Selling, General and Administrative Expenses: Selling, general and administrative expenses increased approximately $2.9 million (10.1%) related to an increase in Multifamily of $1.7 million from growth, including $0.7 million of new office expansion, and an increase in Professional of $1.8 million from Zycron.

Depreciation and Amortization: Depreciation and amortization charges decreased approximately $0.5 million (9.8%). The decrease in depreciation and amortization is primarily due to Professional segment fully amortized intangible assets related to the 2011 Extrinsic, LLC acquisition of $0.9 million that was partially offset by an increase in the Professional segment intangible assets acquired in the Zycron acquisition of $0.4 million.

Interest Expense, net: Interest expense, net decreased approximately $1.0 million (30.4%) primarily due to the decrease in the interest of $1.2 million related to the payoff of the 13% subordinated debt, the decrease in contingent consideration discounts of $0.5 million, partially offset by the increase of $0.4 million in new term debt and the increase of $0.2 million in the revolver.

Income Taxes: Income tax expense increased approximately $1.1 million primarily due to higher pre-tax income offset by a decrease in the effective rate.

Use of Non-GAAP Financial Measures

We present Adjusted EBITDA (defined below), a measure that is not in accordance with generally accepted accounting principles (non-GAAP), in this Quarterly Report to provide investors with a supplemental measure of our operating performance. We believe that Adjusted EBITDA is a useful performance measure and is used by us to facilitate a comparison of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under GAAP can provide alone. Our board and management also use Adjusted EBITDA as one of the primary methods for planning and forecasting overall expected performance and for evaluating on a quarterly and annual basis actual results against such expectations, and as a performance evaluation metric in determining achievement of certain compensation programs and plans for company management. In addition, certain financial covenants in our Amended Credit Agreement (as defined below) are based on this measure.

We define “Adjusted EBITDA” as earnings before interest expense, income taxes, depreciation and amortization expense, and other non-cash expenses such as the loss on extinguishment of debt and share-based compensation expense. Omitting interest, taxes and the other items provides a financial measure that facilitates comparisons of our results of operations with those of

companies having different capital structures. Since the levels of indebtedness and tax structures that other companies have are different from ours, we omit these amounts to facilitate investors’ ability to make these comparisons. Similarly, we omit depreciation and amortization because other companies may employ a greater or lesser amount of property and intangible assets. We also believe that investors, analysts and other interested parties view our ability to generate Adjusted EBITDA as an important measure of our operating performance and that of other companies in our industry. Adjusted EBITDA should not be considered as an alternative to net income for the periods indicated as a measure of our performance. Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

The use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider this performance measure in isolation from, or as an alternative to, GAAP measures such as net income (loss). Adjusted EBITDA is not a measure of liquidity under GAAP or otherwise, and is not an alternative to cash flow from continuing operating activities. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by the expenses that are excluded from that term or by unusual or non-recurring items. The limitations of Adjusted EBITDA include: (i) it does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) it does not reflect changes in, or cash requirements for, our working capital needs; (iii) it does not reflect income tax payments we may be required to make; and (iv) it does not reflect the cash requirements necessary to service interest or principal payments associated with indebtedness.

To properly and prudently evaluate our business, we encourage you to review our unaudited consolidated financial statements included elsewhere in this report and the reconciliation to Adjusted EBITDA from net income, the most directly comparable financial measure presented in accordance with GAAP, set forth in the following table. All of the items included in the reconciliation from net income to Adjusted EBITDA are either (i) non-cash items or (ii) items that management does not consider in assessing our on-going operating performance. In the case of the non-cash items, management believes that investors may find it useful to assess our comparative operating performance because the measures without such items are less susceptible to variances in actual performance resulting from depreciation, amortization and other non-cash charges and more reflective of other factors that affect operating performance. In the case of the other items that management does not consider in assessing our on-going operating performance, management believes that investors may find it useful to assess our operating performance if the measures are presented without these items because their financial impact may not reflect on-going operating performance.



	Thirteen Weeks Ended				Thirty-nine Weeks Ended
	September 24, 2017		September 25, 2016		September 24, 2017		September 25, 2016
	(dollars in thousands)
Net income	$	3,137	$	2,348	$	6,723	$	4,578
Interest expense, net	884		702		2,280		3,278
Income tax expense	1,616		1,417		3,909		2,852
Loss on extinguishment of debt	—		—		—		404
Operating income	5,637		4,467		12,912		11,112
Depreciation and amortization	1,436		1,674		4,673		5,181
Share-based compensation	92		111		357		253
Adjusted EBITDA	$	7,165	$	6,252	$	17,942	$	16,546

Liquidity and Capital Resources

Our working capital requirements are primarily driven by temporary worker payments and customer accounts receivable receipts. Since receipts from customers lag payments to temporary workers, working capital requirements increase substantially in periods of growth.

Our primary sources of liquidity are cash generated from operations and borrowings under our credit agreement (the “Amended Credit Agreement”) with Texas Capital Bank, National Association (“TCB”) as amended and restated that provides for a revolving credit facility maturing April 3, 2022 (the “Revolving Facility”). Our primary uses of cash are payments to temporary workers, employees, related payroll liabilities, operating expenses, capital expenditures, cash interest, cash taxes, dividends and contingent consideration payments. We believe that the cash generated from operations, together with the borrowing availability under our Revolving Facility, will be sufficient to meet our normal working capital needs for at least the next twelve months, including investments made, and expenses incurred, in connection with opening new branches throughout the next year. Our ability to continue to fund these items may be affected by general economic, competitive and other factors, many of which are outside of

our control. If our future cash flow from operations and other capital resources are insufficient to fund our liquidity needs, we may be forced to obtain additional debt or equity capital or refinance all or a portion of our debt.

While we believe we have sufficient liquidity and capital resources to meet our current operating requirements and expansion plans, we may elect to pursue additional growth opportunities within the next year that could require additional debt or equity financing. If we are unable to secure additional financing at favorable terms in order to pursue such additional growth opportunities, our ability to pursue such opportunities could be materially adversely affected.

The Company has an effective Form S-3 shelf registration statement allowing for the offer and sale of up to approximately $34 million of common stock. There is no guarantee that we will be able to consummate any offering on terms we consider acceptable or at all.

A summary of our operating, investing and financing activities are shown in the following table:



	Thirty-nine Weeks Ended
	September 24, 2017			September 25, 2016
	(dollars in thousands)
Net cash provided by operating activities	$	11,962		$	7,112
Net cash used in investing activities	(25,394		)	(611		)
Net cash provided by (used in) financing activities	13,432			(6,501		)
Net change in cash and cash equivalents	$	—		$	—

Operating Activities

Cash provided by operating activities consists of net income adjusted for non-cash items, including depreciation and amortization, share-based compensation expense, interest expense on contingent consideration payable, and the effect of working capital changes. The primary drivers of cash inflows and outflows are accounts receivable and other current liabilities.

During Fiscal 2017, net cash provided by operating activities was $12.0 million an increase of $4.9 million compared with $7.1 million for Fiscal 2016. This increase is primarily attributable to the timing of payments on accounts receivable and other current liabilities.

Investing Activities

Cash used in investing activities consists primarily of cash paid for businesses acquired and capital expenditures.

In Fiscal 2017, we paid $24.5 million in connection with the Zycron and Smart acquisitions and we made capital expenditures of $0.9 million mainly related to computer equipment and software purchased in the ordinary course of business. In Fiscal 2016, we made capital expenditures of approximately $0.6 million mainly related to computer equipment purchased in the ordinary course of business.

Financing Activities

Cash flows from financing activities consisted principally of borrowings and payments under our Amended Credit Agreement, payment of dividends and contingent consideration paid.

For Fiscal 2017, we received proceeds from issuance of the $25.0 million term loan mainly to fund the Zycron acquisition. We reduced our revolving line of credit by $3.5 million, paid $6.5 million in cash dividends on our common stock, paid $1.1 million in deferred financing costs related to the Amended Credit Agreement, and paid $0.5 million in principal payment on the term loan.

For Fiscal 2016, we borrowed $3.0 million under our revolving line of credit and received net proceeds from issuance of common stock of $15.3 million mainly to pay off the Senior Subordinated Credit Agreement of $15.3 million. We paid $5.9 million in cash dividends on our common stock and we paid $3.5 million of contingent consideration related to the March 2015 D&W acquisition.

Credit Agreements

We had a Credit Agreement with TCB. The Credit Agreement provided for a Revolving Facility, maturing August 21, 2019, permitting us to borrow funds from time to time in an aggregate amount equal to the lesser of the borrowing base amount, which was 85% of eligible accounts, and TCB’s commitment of $35.0 million.

In connection with the acquisition of the assets of Zycron described above, on April 3, 2017, we entered into an Amended and Restated Credit Agreement (the “Amended Credit Agreement”) with TCB with an aggregate commitment of $55.0 million. The Amended Credit Agreement provides for a revolving credit facility maturing April 3, 2022 (the “Revolving Facility”), permitting us 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 $35.0 million and also provides for a term loan maturing April 3, 2022 (the “Term Loan”) in the amount of $20.0 million with principal payable quarterly, based on an annual percentage of the original principal amount as defined in the Amended Credit Agreement. TCB may also make loans (“Swing Line Loans”) not to exceed the lesser of $7.5 million or the aggregate commitment. Additionally, the Amended Credit Agreement provides for us to increase the commitment with a $20.0 million accordion feature.

We borrowed $20.0 million on the Term Loan in conjunction with the closing of the Zycron acquistion on April 3, 2017. Proceeds from the foregoing loan arrangements were used to pay off our existing indebtedness on the revolving credit facility under the Credit Agreement, dated as of August 21, 2015, as amended, with TCB. We borrowed $5.0 million on the accordion in conjunction with the closing of the Smart acquisition on September 18, 2017.

The Revolving Facility and Term Loan bear interest either at the Base Rate plus the Applicable Margin or LIBOR plus the Applicable Margin (as such terms are defined in the Amended Credit Agreement). Swing Line Loans bear interest at the Base Rate plus the Applicable Margin. All interest and commitment fees are generally paid quarterly. Our obligations under the Amended Credit Agreement are secured by a first priority security interest in substantially all of our tangible and intangible property and our subsidiaries.

The Amended Credit Agreement's customary affirmative and negative covenants remain substantially the same as those in effect under the Credit Agreement including restricting the ability of us 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 our business and we must comply with certain financial covenants. We may not permit the Leverage Ratio (as defined in the Amended Credit Agreement) to be greater than the following: 2.50 to 1.0 (April 3, 2017 to end of fiscal March 2018), 2.00 to 1.0 (March 31, 2018 to end of fiscal March 2019), 1.50 to 1.0 (March 31, 2019 to end of fiscal March 2020), 1.0 to 1.0 (From and after end of fiscal March, 2020). Moreover, we may not permit, for any four fiscal quarter period, the Fixed Charge Coverage Ratio (as defined in the Amended Credit Agreement) to be less than 1.50 to 1.00, and may not permit the Dividend Fixed Charge Coverage Ratio (as defined in the Amended Credit Agreement) to be less than (a) 1.10 to 1.00 for any four fiscal quarter period ending on or before September 30, 2017 or (b) 1.20 to 1.00 for any four fiscal quarter period thereafter. As of September 24, 2017, we were in compliance with these covenants.

Off-Balance Sheet Arrangements

We are not party to any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with GAAP. In connection with the preparation of our consolidated financial statements, we are required to make assumptions and estimates about future events, and apply judgments that affect the reported amount of assets, liabilities, revenue, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends, and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. On a regular basis, management reviews the accounting policies, estimates, assumptions and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

Our significant accounting policies are discussed in Note 2, Summary of Significant Accounting Policies, of the Notes to Unaudited Consolidated Financial Statements included in “Item 1. Financial Statements.” Please also refer to our Annual Report on Form 10-K for the fiscal year ended December 25, 2016 for a more detailed discussion of our critical accounting policies.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements and their potential effect on our results of operations and financial condition, refer to Note 2 in the Notes to the Unaudited Consolidated Financial Statements in this Quarterly Report on Form 10-Q and Note 2 in the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 25, 2016.

JOBS Act

The Jumpstart Our Business Startups Act of 2012 provides that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We may elect to delay the adoption of new or revised accounting pronouncements applicable to public and private companies until such pronouncements become mandatory for private companies. As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public and private companies.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to certain market risks from transactions we enter into in the normal course of business. Our primary market risk exposure relates to interest rate risk.

Interest Rates

Our Revolving Facility and Term Loan are priced at variable interest rates. Accordingly, future interest rate increases could potentially put us at risk for an adverse impact on future earnings and cash flows.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, our CEO and CFO have concluded that, as of the end of such period, our disclosure controls and procedures are effective, at a reasonable assurance level, in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act and are effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls Over Financial Reporting

For the fiscal quarter ended September 24, 2017, there have been no changes in our internal control over financial reporting identified in connection with the evaluations required by Rule 13a-15(d) or Rule 15d-15(d) under the Exchange Act that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our CEO and our CFO, do not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

No change from the information provided in ITEM 3. LEGAL PROCEEDINGS included in our Annual Report on Form 10-K for the year ended December 25, 2016.

ITEM 1A. RISK FACTORS

In evaluating us and our common stock, we urge you to carefully consider the risks and other information in this Quarterly Report on Form 10-Q, as well as the risk factors disclosed in Item 1A. of Part I of our Annual Report on Form 10-K for the year ended December 25, 2016 (our “2016 Form 10-K”), and filed with the SEC on March 6, 2017. There have been no material changes from the risk factors as previously disclosed in our 2016 Form 10-K. Any of the risks discussed in this Quarterly Report on Form 10-Q or any of the risks disclosed in Item 1A. of Part I of our 2016 Form 10-K, as well as additional risks and uncertainties not currently known to us or that we currently deem immaterial, could materially and adversely affect our results of operations or financial condition.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

Item 6. Exhibits

The following exhibits are filed or furnished with this Quarterly Report on Form 10-Q.



Exhibit Number		Description

2.1		Asset Purchase Agreement, dated, as of April 3, 2017, by and between BG Staffing, Inc., BG Staffing, LLC, Zycron Inc., and Darrell S. Freeman (incorporated by reference to the Company’s Current Report on Form 8-K filed on April 6, 2017).
2.2		Asset Purchase Agreement, dated as of September 18, 2017, by and between BG Finance and Accounting, Inc., Smart Resources, Inc. and Accountable Search, LLC, and Timothy J. Flood and Margaret L. Francis (incorporated by reference to the Company’s Current Report on Form 8-K filed on September 22, 2017).
3.1		Certificate of Incorporation of BG Staffing, Inc. (incorporated by reference from Amendment No. 2 to the registrant’s registration statement on Form S-1 (File No. 333-191683) filed on November 4, 2013).
3.2		Bylaws of BG Staffing, Inc. (incorporated by reference from Amendment No. 2 to the registrant’s registration statement on Form S-1 (File No. 333-191683) filed on November 4, 2013).
4.1		Form of Common Stock Certificate (incorporated by reference from Amendment No. 1 to the registrant’s registration statement on Form S-1 (File No. 333-191683) filed on October 28, 2013).
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.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	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)

Date: October 30, 2017



1		I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 24, 2017 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.



1		I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 24, 2017 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.

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 24, 2017	Oct. 30, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	BG Staffing, Inc.
Entity Central Index Key	0001474903
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Trading Symbol	BGSF
Entity Common Stock, Shares Outstanding		8,759,376
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 24, 2017
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2017

UNAUDITED CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($)	Sep. 24, 2017	Dec. 25, 2016
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable, current	$ 473,573	$ 473,573
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)	8,759,376	8,668,485
Common stock, shares outstanding (in shares)	8,759,376	8,668,485
Deferred finance costs, line of credit arrangements, net	$ 791,699	$ 264,520
Deferred finance costs, current	142,090	0
Deferred finance costs, noncurrent	$ 277,750	$ 0

NATURE OF OPERATIONS	9 Months Ended
NATURE OF OPERATIONS	Sep. 24, 2017
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. We now have 63 branch offices and 15 on-site locations located across 26 states. The Multifamily segment provides front office and maintenance temporary workers to various apartment communities, in 23 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") and finance and accounting customer projects. The Commercial segment provides temporary workers primarily to logistics, distribution, and call center customers needing a flexible workforce in Illinois, Wisconsin, New Mexico, Texas, Tennessee and Mississippi. Our business experiences seasonal fluctuations. Our quarterly operating results are affected by the number of billing days in a quarter, as well as the seasonality of our customers’ business. Demand for our Multifamily staffing services increase in the second and is highest during the third quarter of the year due to the increased turns in multifamily units during the summer months when schools are not in session. Demand for our Commercial staffing services increases during the third quarter of the year and peaks in the fourth quarter. Demand for our Commercial staffing services is lower during the first quarter, in part due to customer shutdowns and adverse weather conditions in the winter months. In addition, our cost of services typically increases in the first quarter primarily due to the reset of payroll taxes. 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 GAAP 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 25, 2016, included in its Annual Report on Form 10-K.


(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.

UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 24, 2017	Dec. 25, 2016
Current assets
Accounts receivable (net of allowance for doubtful accounts of $473,573 at 2017 and 2016)	$ 40,618,312	$ 33,328,900
Prepaid expenses	529,469	950,696
Other current assets	98,261	154,673
Total current assets	41,246,042	34,434,269
Property and equipment, net	1,700,470	1,910,858
Other assets
Deposits	2,799,813	2,657,517
Deferred income taxes, net	9,916,170	9,512,455
Intangible assets, net	38,803,342	23,514,376
Goodwill	17,826,199	9,184,659
Total other assets	69,345,524	44,869,007
Total assets	112,292,036	81,214,134
Current liabilities
Long-term debt, current portion (net of deferred finance fees of $142,090 and $-0- for 2017 and 2016, respectively)	2,614,160	0
Accrued interest	308,979	100,868
Accounts payable	1,946,662	951,672
Accrued expenses	12,566,637	9,668,475
Accrued workers’ compensation	281,237	754,556
Contingent consideration, current portion	5,535,068	3,580,561
Other current liabilities	317,294	0
Income taxes payable	437,337	193,264
Total current liabilities	24,007,374	15,249,396
Line of credit (net of deferred finance fees of $791,699 and $264,520 for 2017 and 2016, respectively)	19,598,722	23,618,194
Long-term debt, less current portion (net of deferred finance fees of $277,750 and $-0- for 2017 and 2016, respectively)	21,466,000	0
Contingent consideration, less current portion	4,891,847	1,586,324
Other long-term liabilities	219,061	271,766
Total liabilities	70,183,004	40,725,680
Commitments and contingencies
Preferred stock, $0.01 par value per share, 500,000 shares authorized, -0- shares issued and outstanding	0	0
Common stock, $0.01 par value per share; 19,500,000 shares authorized,8,759,376 and 8,668,485 shares issued and outstanding for 2017 and 2016, respectively	87,594	86,685
Additional paid in capital	37,585,052	36,142,688
Retained earnings	4,436,386	4,259,081
Total stockholders’ equity	42,109,032	40,488,454
Total liabilities and stockholders’ equity	$ 112,292,036	$ 81,214,134

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME - USD ($)	3 Months Ended		9 Months Ended
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME - USD ($)	Sep. 24, 2017	Sep. 25, 2016	Sep. 24, 2017	Sep. 25, 2016
Income Statement [Abstract]
Revenues	$ 71,281,674	$ 67,407,350	$ 196,899,224	$ 189,573,350
Cost of services	53,033,615	50,975,462	147,752,650	144,610,307
Gross profit	18,248,059	16,431,888	49,146,574	44,963,043
Selling, general and administrative expenses	11,175,596	10,291,746	31,562,377	28,668,466
Depreciation and amortization	1,436,279	1,673,546	4,672,755	5,181,456
Operating income	5,636,184	4,466,596	12,911,442	11,113,121
Loss on extinguishment of debt, net	0	0	0	(404,119)
Interest expense, net	(883,668)	(701,968)	(2,279,652)	(3,278,182)
Income (loss) before income taxes	4,752,516	3,764,628	10,631,790	7,430,820
Income tax expense	1,615,653	1,416,773	3,908,570	2,852,346
Net income (loss)	$ 3,136,863	$ 2,347,855	$ 6,723,220	$ 4,578,474
Net income per share:
Basic (in dollars per share)	$ 0.36	$ 0.27	$ 0.77	$ 0.58
Diluted (in dollars per share)	$ 0.35	$ 0.26	$ 0.75	$ 0.56
Weighted-average shares outstanding:
Basic (shares)	8,759,376	8,658,061	8,724,811	7,920,000
Diluted (shares)	9,077,147	9,028,398	9,019,878	8,219,876

UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 9 months ended Sep. 24, 2017 - USD ($)	Total	Preferred Stock	Common Stock	Additional Paid in Capital	Retained Earnings
Stockholders’ equity, December 25, 2016 at Dec. 25, 2016	$ 40,488,454	$ 0	$ 86,685	$ 36,142,688	$ 4,259,081
Stockholders’ equity, December 25, 2016 (in shares) at Dec. 25, 2016			8,668,485
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation	357,024			357,024
Issuance of shares, net of offering costs	992,500		$ 707	991,793
Issuance of shares, net of offering costs (in shares)			70,670
Exercise of common stock options	93,749		$ 202	93,547
Exercise of common stock options and warrants (in shares)			20,221
Cash dividend declared ($0.25 per share)	$ (6,545,915)				(6,545,915)
Common stock, dividends, per share, declared	$ 0.25
Net income (loss)	$ 6,723,220				6,723,220
Stockholders’ equity, September 24, 2017 at Sep. 24, 2017	$ 42,109,032	$ 0	$ 87,594	$ 37,585,052	$ 4,436,386
Stockholders’ equity, June 25, 2017 (in shares) at Sep. 24, 2017			8,759,376

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 24, 2017	Sep. 25, 2016
Cash flows from operating activities
Net income	$ 6,723,220	$ 4,578,474
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	428,155	355,833
Amortization	4,244,600	4,825,623
Loss on disposal of property and equipment	17,373	10,192
Loss on extinguishment of debt, net	0	(404,119)
Contingent consideration adjustment	0	(24,642)
Amortization of deferred financing fees	168,797	80,049
Amortization of debt discounts	0	32,355
Interest expense on earn out payable	907,340	1,449,316
Provision for doubtful accounts	88,000	209,528
Stock-based compensation	357,024	252,972
Deferred income taxes	(403,715)	(1,101,702)
Net changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable	(1,803,486)	(3,362,087)
Prepaid expenses	519,859	285,304
Other current assets	72,150	30,547
Deposits	(137,726)	(321,925)
Accrued interest	208,111	(291,954)
Accounts payable	(518,921)	(324,372)
Accrued expenses	1,252,864	1,024,696
Accrued workers’ compensation	(473,319)	(56,101)
Other current liabilities	120,569	(945,382)
Accrued taxes	244,072	(7,159)
Other long-term liabilities	(52,703)	(41,398)
Net cash provided by operating activities	11,962,264	7,111,570
Cash flows from investing activities
Business acquired, net of cash received	24,500,000	0
Capital expenditures	(895,989)	(618,157)
Proceeds from the sale of property and equipment	1,500	7,587
Net cash used in investing activities	(25,394,489)	(610,570)
Cash flows from financing activities
Net (payments) borrowings under line of credit	(3,492,293)	3,041,612
Proceeds from issuance of long-term debt	25,000,000	0
Principal payments on long-term debt	500,000	15,281,657
Payments of dividends	(6,545,915)	(5,863,801)
Net proceeds from issuance of common stock	86,249	15,254,406
Contingent consideration paid	0	(3,498,197)
Deferred financing costs	1,115,816	153,363
Net cash provided by (used in) financing activities	13,432,225	(6,501,000)
Net change in cash and cash equivalents	0	0
Cash and cash equivalents, beginning of period	0	0
Cash and cash equivalents, end of period	0	0
Supplemental cash flow information:
Cash paid for interest	930,811	2,221,430
Cash paid for taxes, net of refunds	4,058,353	3,961,226
Proceeds from issuance of long-term debt	$ 25,000,000	$ 0

INTANGIBLE ASSETS	9 Months Ended
INTANGIBLE ASSETS	Sep. 24, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	INTANGIBLE ASSETS Intangible assets are stated net of accumulated amortization of $34,501,414 and $30,205,434 at September 24, 2017 and December 25, 2016, respectively. During the thirty-nine week periods ended September 24, 2017, the Company added $440,668 and reclassified $347,379 of software assets from property and equipment. Total amortization expense for the thirteen week periods ended September 24, 2017 and September 25, 2016 was $1,291,925 and $1,548,914, respectively. Total amortization expense for the thirty-nine week periods ended September 24, 2017 and September 25, 2016 was $4,244,600 and $4,825,623, respectively.

CONTINGENCIES	9 Months Ended
CONTINGENCIES	Sep. 24, 2017
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	9 Months Ended
EQUITY	Sep. 24, 2017
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. On April 3, 2017, the Company issued 70,670 shares of common stock, $0.01 par value per share, in a private placement for a value of $1 million at the closing of the Zycron acquisition. The Company incurred $7,500 in offering costs.

EMPLOYEE BENEFIT PLAN	9 Months Ended
EMPLOYEE BENEFIT PLAN	Sep. 24, 2017
Retirement Benefits [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 $232,863 and $217,103 to the 401(k) Plan for the thirteen week periods ended September 24, 2017 and September 25, 2016, respectively. The Company contributed $657,623 and $622,772 to the 401(k) Plan for the thirty-nine week periods ended September 24, 2017 and September 25, 2016, respectively.

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Sep. 24, 2017
Subsequent Events [Abstract]
Subsequent Events	SUBSEQUENT EVENTS Dividend On October 20, 2017, 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 November 7, 2017 to all shareholders of record as of the close of business on November 2, 2017.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Sep. 24, 2017
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 September 24, 2017 and December 25, 2016, and include the thirteen and thirty-nine week periods ended September 24, 2017 and September 25, 2016
Reclassifications	Reclassifications Certain reclassifications have been made to the 2016 financial statements to conform with the 2017 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, intangible assets and contingent consideration obligations related to acquisitions. Additionally, the valuation of share based compensation option expense uses a model based upon interest rates, stock prices, maturity estimates, volatility and other factors. The Company believes these estimates and assumptions are reliable. However, these estimates and assumptions may change in the future based on actual experience as well as market conditions.
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 and contingent consideration. The carrying values of cash and cash equivalents, accounts receivables, prepaid expenses, accounts payable, accrued liabilities, 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 and term loan 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 expected 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 $1,213,156 and $1,301,295 at September 24, 2017 and December 25, 2016, respectively.
Deposits	Deposits The Company maintains guaranteed costs policies for workers' compensation coverage in the states in which it operates, with minimal loss retention for employees in the commercial segment. Under these policies, the Company is required to maintain refundable deposits of $2,565,817 and $2,476,201, which are included in Deposits the accompanying consolidated balance sheets as of September 24, 2017 and December 25, 2016, 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 Fiscal 2017 and Fiscal 2016.
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 ten years, based on a pattern in which the economic benefit of the respective intangible asset is realized. The Company capitalizes purchased software and internal payroll costs directly incurred in the modification of software for internal use. Software maintenance and training costs are expensed in the period incurred. 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 recorded 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 fees are amortized on 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 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. Prior to Fiscal 2017, 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. For acquisitions beginning in Fiscal 2017, based on new valuation methodology, the fair value calculation of the expected future payments uses a discount rate that is commensurate with the risks of the expected cash flow. The resulting discount is amortized as interest expense over the outstanding period using the effective interest method.
Revenue Recognition	Revenue Recognition The Company derives its revenues from three segments: Multifamily, Professional, and Commercial. The Company provides temporary 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 from services and the related direct costs on a gross basis in accordance with the accounting guidance on reporting revenue gross as a principal versus net as an agent. Temporary staffing revenues - Our revenues are generated based on negotiated rates and invoiced on a per-hour basis. Accordingly, temporary staffing revenues are recognized on the hours worked when the services are rendered by the Company’s temporary workers. Permanent placement staffing revenues - Permanent placement staffing revenues are recognized when employment candidates start their 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 income 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. Antidilutive shares are excluded from the calculation of diluted earnings per share.
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. The Company recognizes any penalties when necessary as part of selling, general and administrative expenses. Goodwill is deductible for tax purposes. 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. 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 Fiscal 2017 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 offset by a Work Opportunity Tax Credit. Income tax expense attributable to income from operations for Fiscal 2016 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.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") ASU 2014-09, Revenue from Contracts with Customers. Since May 2014, the FASB has issued additional and amended authoritative guidance regarding revenue from contracts with customers in order to clarify and improve the understanding of the implementation guidance. As amended, the new guidance requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The new standard is effective for annual and interim periods beginning after December 15, 2017. The Company is in the process of evaluating the impact of adoption. Based on the progress to date, the Company does not believe the adoption of this accounting guidance will have a material impact on the Company's financial condition or results of operations. In April 2015, the FASB issued ASU 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” which provides more specific guidance related to how companies account for cloud computing costs. In December 2016, the FASB issued ASU 2016-19, “Technical Corrections and Improvements” to clarify guidance, correct errors and make minor improvements to the Accounting Standards Codification (“ASC”) which amends ASC 350-40 to clarify that after ASU 2015-05 is adopted, companies are required to record an intangible asset for the license acquired in a software licensing arrangement. The asset for the software license is required to be recognized and measured at cost. The Company adopted both ASUs on a prospective basis in the second quarter of fiscal 2017 which did not have a material impact on the consolidated financial statements. In March 2016, the FASB issued ASU 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 was effective for the Company beginning with the first quarter of 2017. The Company adopted this ASU on a prospective basis which had no impact on the consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04 Intangibles-Goodwill and Other Simplifying the Test for Goodwill Impairment, which provides guidance to simplify the subsequent measurement of goodwill by eliminating the Step 2 procedure from the goodwill impairment test. The new standard is effective for the Company beginning with the fourth quarter of 2020. The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on the Company's financial condition or results of operations. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. The new standard is effective for the Company beginning with the first quarter 2018. The Company does not anticipate the adoption of ASU 2017-09 will have a material impact on the Company's financial condition or results of operations.

NATURE OF OPERATIONS (Details Textual)	9 Months Ended
NATURE OF OPERATIONS (Details Textual)	Sep. 24, 2017 segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of reportable segments	3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual)	9 Months Ended
	Sep. 24, 2017 USD ($) segment	Sep. 25, 2016 USD ($)	Dec. 25, 2016 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Accumulated depreciation and amortization, property, plant, and equipment	$ 1,213,156		$ 1,301,295
Original cost of fully depreciated assets disposed of	426,066
Deposit contracts, assets	2,565,817		$ 2,476,201
Impairment of long-lived assets	$ 0	$ 0
Number of reportable segments \| segment	3
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	10 years

ACQUISITIONS (Details Textual) - USD ($)			3 Months Ended	9 Months Ended
ACQUISITIONS (Details Textual) - USD ($)	Sep. 18, 2017	Apr. 03, 2017	Sep. 24, 2017	Sep. 24, 2017	Sep. 25, 2016	Dec. 25, 2016
Business Acquisition [Line Items]
Revenue of acquiree since acquisition date, actual				$ 8,700,000
Goodwill			$ 17,826,199	17,826,199		$ 9,184,659
Zycron, Inc.
Business Acquisition [Line Items]
Initial cash paid for acquisition		$ 18,500,000
Stock issued during period, value, acquisitions		1,000,000
Escrow deposit		500,000
Contingent consideration		$ 3,000,000
Business combination, period of contingency		2 years
Revenue of acquiree since acquisition date, actual			17,600,000	9,000,000
Operating income of acquiree since acquisition date, actual			1,600,000	$ 900,000
Goodwill		$ 6,901,101
Smart, Inc.
Business Acquisition [Line Items]
Initial cash paid for acquisition	$ 6,000,000
Contingent consideration	$ 2,000,000
Business combination, period of contingency	2 years
Business combination, period for true-up of acquired working capital	90 days
Revenue of acquiree since acquisition date, actual			200,000
Operating income of acquiree since acquisition date, actual			$ 0
Goodwill	$ 1,740,439
Private Placement \| Zycron, Inc.
Business Acquisition [Line Items]
Stock issued during period, shares, acquisitions		70,670
Pro Forma
Business Acquisition [Line Items]
Effective income tax rate reconciliation, percent				36.80%	38.40%

ACQUISITIONS - Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination (Details) - USD ($)	Sep. 18, 2017	Apr. 03, 2017
Smart, Inc.
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets	$ 4,927,045
Smart, Inc. \| Covenants not to compete
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangibles acquired	$ 20,000
Acquired finite-lived Intangible Assets, weighted average useful life	5 years
Smart, Inc. \| Customer list
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangibles acquired	$ 4,907,045
Acquired finite-lived Intangible Assets, weighted average useful life	10 years
Zycron, Inc.
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets		$ 13,818,474
Zycron, Inc. \| Covenants not to compete
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangibles acquired		$ 475,000
Acquired finite-lived Intangible Assets, weighted average useful life		5 years
Zycron, Inc. \| Customer list
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangibles acquired		$ 8,337,474
Acquired finite-lived Intangible Assets, weighted average useful life		10 years
Trade name \| Zycron, Inc.
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived intangibles acquired		$ 5,006,000

INTANGIBLE ASSETS (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
INTANGIBLE ASSETS (Details Textual) - USD ($)	Sep. 24, 2017	Sep. 25, 2016	Sep. 24, 2017	Sep. 25, 2016	Dec. 25, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible assets, accumulated amortization	$ 34,501,414		$ 34,501,414		$ 30,205,434
Capitalized computer software, additions			440,668
Capitalized computer software, gross			347,379
Amortization of intangible assets	$ 1,291,925	$ 1,548,914	$ 4,244,600	$ 4,825,623

ACCRUED PAYROLL AND EXPENSES AND CONTINGENT CONSIDERATION - Accrued Payroll and Expenses (Details) - USD ($)	Sep. 24, 2017	Dec. 25, 2016
Accrued Liabilities, Current [Abstract]
Temporary worker payroll	$ 6,672,200	$ 5,547,161
Temporary worker payroll related	2,570,505	2,033,602
Accrued bonuses and commissions	1,181,071	892,742
Other	2,142,861	1,194,970
Accrued liabilities, current	$ 12,566,637	$ 9,668,475

ACCRUED PAYROLL AND EXPENSES AND CONTINGENT CONSIDERATION - Schedule of Future Estimated Earn Out Payments (Details) - USD ($)	Sep. 24, 2017	Dec. 25, 2016
Accrued Liabilities, Current [Abstract]
Contingent consideration, current portion	$ 5,750,000
Contingent consideration, liability in year two	3,250,000
Contingent consideration, liability in year three	2,500,000
Contingent consideration, liability, total	11,500,000
Interest expense, earn out payable, current portion	(214,932)
Interest expense, earn out payable in year two	(727,741)
Interest expense, earn out payable in year three	(130,412)
Interest expense, earn out payable, total	1,073,085
Contingent consideration, current portion, net	5,535,068	$ 3,580,561
Contingent consideration, liability in year two, net	2,522,259
Contingent consideration, liability in year three, net	2,369,588
Contingent consideration, liability, total, net	$ 10,426,915

ACCRUED PAYROLL AND EXPENSES AND CONTINGENT CONSIDERATION - Narrative (Details)	Sep. 24, 2017 USD ($)
Accrued Liabilities, Current [Abstract]
Other liabilities, current	$ 158,072

DEBT (Details Textual)			9 Months Ended
DEBT (Details Textual)	Apr. 03, 2017 USD ($)	Sep. 21, 2016 USD ($)	Sep. 24, 2017 USD ($)	Sep. 18, 2017 USD ($)	Dec. 25, 2016 USD ($)
Debt Instrument [Line Items]
Minimum fixed charge coverage ratio			1.50
Credit Agreement \| Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, borrowing capacity, percentage		85.00%
Line of credit facility, maximum borrowing capacity		$ 35,000,000
Credit Agreement \| Texas Capital Bank, National Association (TCB) \| Revolving Credit Facility
Debt Instrument [Line Items]
Long-term line of credit			$ 20,390,421		$ 23,882,714
Amended Credit Agreement \| Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, borrowing capacity, percentage	85.00%
Line of credit facility, maximum borrowing capacity	$ 35,000,000
Amended Credit Agreement
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	55,000,000
Senior Notes \| Term Loan
Debt Instrument [Line Items]
Long term debt	20,000,000			$ 5,000,000
Maximum \| Bridge Loan \| Term Loan
Debt Instrument [Line Items]
Long term debt	7,500,000
Maximum \| Commitments to Extend Credit \| Amended Credit Agreement
Debt Instrument [Line Items]
Long term debt	$ 20,000,000
April 3rd 2017 to March 31st 2018
Debt Instrument [Line Items]
Maximum leverage ratio			2.50
March 31st 2018 to March 31st 2019
Debt Instrument [Line Items]
Maximum leverage ratio			2.00
March 31st 2019, to March 31st 2020
Debt Instrument [Line Items]
Maximum leverage ratio			1.50
After March 31st 2020
Debt Instrument [Line Items]
Maximum leverage ratio			1.0
September 30th 2016 to September 30th 2017
Debt Instrument [Line Items]
Minimum dividend fixed charge coverage ratio			1.10
After September 30th 2017
Debt Instrument [Line Items]
Minimum dividend fixed charge coverage ratio			1.20

DEBT - Borrowings Under Revolving Facility (Details) - Credit Agreement - Texas Capital Bank, National Association (TCB) - Revolving Credit Facility - USD ($)	Sep. 24, 2017	Dec. 25, 2016
Line of Credit Facility [Line Items]
Initial borrowing amount	$ 5,390,421	$ 8,882,714
Debt Instrument, Interest Rate, Effective Percentage for Initial Borrowing Amount	5.25%	4.25%
Second borrowing amount	$ 5,000,000	$ 5,000,000
Debt Instrument, Interest Rate, Effective Percentage for Second Borrowing Amount	4.05%	3.95%
Third borrowing amount	$ 5,000,000	$ 5,000,000
Debt Instrument, Interest Rate, Effective Percentage for Third Borrowing Amount	4.06%	3.99%
Fourth borrowing amount	$ 5,000,000	$ 5,000,000
Debt Instrument, Interest Rate, Effective Percentage for Fourth Borrowing Amount	4.07%	4.16%
Total borrowing amount	$ 20,390,421	$ 23,882,714

DEBT - Borrowing Under Term Loan (Details) - USD ($)	Sep. 24, 2017	Dec. 25, 2016
Debt Instrument [Line Items]
Less current portion on long-term debt	$ (2,614,160)	$ 0
Texas Capital Bank, National Association (TCB) \| Revolving Credit Facility \| Credit Agreement
Debt Instrument [Line Items]
Long-Term Debt, Gross, Initial Borrowing	$ 700,000	$ 0
Debt Instrument, Interest Rate, Effective Percentage for Initial Borrowing Amount	5.25%	0.00%
Long-Term Debt, Gross, Second Borrowing Amount	$ 6,500,000	$ 0
Debt Instrument, Interest Rate, Effective Percentage for Second Borrowing Amount	4.30%	0.00%
Long-Term Debt, Gross, Third Borrowing Amount	$ 6,500,000	$ 0
Debt Instrument, Interest Rate, Effective Percentage for Third Borrowing Amount	4.31%	0.00%
Long-Term Debt, Gross, Fourth Borrowing Amount	$ 6,000,000	$ 0
Debt Instrument, Interest Rate, Effective Percentage for Fourth Borrowing Amount	4.32%	0.00%
Long-Term Debt, Gross, Fifth Borrowing Amount	$ 4,800,000
Debt Instrument, Interest Rate, Effective Percentage for Fifth Borrowing Amount	4.33%
Less current portion on long-term debt	$ (2,756,250)	$ 0
Long-term debt, less current portion	$ 21,743,750	$ 0

FAIR VALUE MEASUREMENTS (Details) - USD ($)	9 Months Ended
FAIR VALUE MEASUREMENTS (Details) - USD ($)	Sep. 24, 2017	Sep. 25, 2016	Dec. 25, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	$ 10,426,915
Interest expense on earn out payable	907,340	$ 1,449,316
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	$ 10,426,915		$ 5,166,885
Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rate (percentage)	8.00%
Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rate (percentage)	22.00%
Zycron and Smart, Inc.
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent liability	$ 4,400,000

EQUITY (Details Textual) - USD ($)		9 Months Ended
EQUITY (Details Textual) - USD ($)	Apr. 03, 2017	Sep. 24, 2017	Dec. 25, 2016
Class of Stock [Line Items]
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
Common Stock
Class of Stock [Line Items]
Payments of stock issuance costs		$ 7,500
Zycron, Inc.
Class of Stock [Line Items]
Stock issued during period, value, acquisitions	$ 1,000,000
Private Placement \| Zycron, Inc.
Class of Stock [Line Items]
Stock issued during period, shares, acquisitions	70,670

SHARE-BASED COMPENSATION (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
SHARE-BASED COMPENSATION (Details Textual) - USD ($)	Sep. 24, 2017	Sep. 25, 2016	Sep. 24, 2017	Sep. 25, 2016	May 16, 2017	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options converted			9,402
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost related to stock awards	$ 92,293	$ 111,134	$ 357,024	$ 252,972
Unamortized stock compensation expense	680,321		$ 680,321
Unamortized stock compensation expense, recognition period			2 years 6 months 28 days
Shares issued in period			5,221
Options converted			28,800
Warrant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost related to stock awards	0	$ 0
Unamortized warrant compensation expense	$ 0		$ 0
Long Term Incentive Plan 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional capital shares reserved for future issuance					250,000
Capital shares reserved for future issuance					1,150,000	900,000

EMPLOYEE BENEFIT PLAN (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
EMPLOYEE BENEFIT PLAN (Details Textual) - USD ($)	Sep. 24, 2017	Sep. 25, 2016	Sep. 24, 2017	Sep. 25, 2016
Defined Benefit Plan Disclosure [Line Items]
Defined contribution plan, cost recognized	$ 232,863	$ 217,103	$ 657,623	$ 622,772
First 3% Employee Compensation
Defined Benefit Plan Disclosure [Line Items]
Defined contribution plan, employer matching contribution, percent of match			100.00%
Defined contribution plan, employer matching contribution, percent of employees' gross pay			3.00%
Next 2% Employee Compensation
Defined Benefit Plan Disclosure [Line Items]
Defined contribution plan, employer matching contribution, percent of match			50.00%
Defined contribution plan, employer matching contribution, percent of employees' gross pay			2.00%

BUSINESS SEGMENTS (Details Textual)	9 Months Ended
BUSINESS SEGMENTS (Details Textual)	Sep. 24, 2017 segment
Segment Reporting [Abstract]
Number of reportable segments	3

SUBSEQUENT EVENTS - Narrative (Details) - $ / shares		9 Months Ended
SUBSEQUENT EVENTS - Narrative (Details) - $ / shares	Oct. 20, 2017	Sep. 24, 2017
Subsequent Event [Line Items]
Common stock, dividends, per share, declared		$ 0.25
Subsequent Event
Subsequent Event [Line Items]
Dividend payable date	Oct. 20, 2017
Common stock, dividends, per share, declared	$ 0.25
Dividend declared date	Nov. 07, 2017
Dividend payable date of record	Nov. 02, 2017