HireQuest (HQI) 10-Q 9 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 30, 2018	May 08, 2018
Document And Entity Information
Entity Registrant Name	Command Center, Inc.
Entity Central Index Key	1,140,102
Document Type	10-Q
Document Period End Date	Mar. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-28
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		4,971,211
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,018

Statement - Consolidated Conden

Statement - Consolidated Condensed Balance Sheets (Unaudited) (USD $) - USD ($)	Mar. 30, 2018	Dec. 29, 2017
Current assets
Cash and cash equivalents	$ 6,708,742	$ 7,768,631
Restricted cash	36,868	12,853
Accounts receivable, net of allowance for doubtful accounts	9,255,325	9,394,376
Prepaid expenses, deposits and other	649,907	740,280
Prepaid workers' compensation	287,019	167,597
Current portion of workers’ compensation risk pool deposits	99,624	99,624
Total current assets	17,037,485	18,183,361
Property and equipment, net	400,836	372,145
Deferred tax asset	1,218,220	721,602
Workers' compensation risk pool deposit, less current portion	201,563	201,563
Workers' compensation risk pool deposit in receivership, net	260,000	1,800,000
Goodwill and other intangible assets, net	4,031,490	4,085,576
Total assets	23,149,594	25,364,247
Current liabilities
Accounts payable	238,571	563,402
Account purchase agreement facility	181,968	853,562
Other current liabilities	615,499	898,809
Accrued wages and benefits	2,132,880	1,503,688
Current portion of workers' compensation premiums and claims liability	1,031,500	1,031,500
Total current liabilities	4,200,418	4,850,961
Workers compensation claims liability, less current portion	917,497	917,497
Total liabilities	5,117,915	5,768,458
Commitments and contingencies (Note 9)
Stockholders' equity
Preferred stock - $0.001 par value, 416,666 shares authorized; none issued	0	0
Common stock - $0.001 par value, 8,333,333 shares, authorized; 4,971,211 and 4,993,672 shares issued and outstanding, respectively	4,971	4,994
Additional paid-in capital	55,868,750	56,211,837
Accumulated deficit	(37,842,042)	(36,621,042)
Total stockholders' equity	18,031,679	19,595,789
Total liabilities and stockholders' equity	$ 23,149,594	$ 25,364,247

Statement - Consolidated Conde3

Statement - Consolidated Condensed Balance Sheets (USD $) (Parenthetical) - $ / shares	Mar. 30, 2018	Dec. 29, 2017
Stockholders' equity
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	416,666	416,666
Preferred stock shares issued	0	0
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	8,333,333	8,333,333
Common stock shares issued	4,971,211	4,993,672
Common stock shares outstanding	4,971,211	4,993,672

Consolidated Condensed Statemen

Consolidated Condensed Statements of Income (Operations) (Unaudited) - USD ($)	3 Months Ended
	Mar. 30, 2018	Mar. 31, 2017
Income Statement [Abstract]
Revenue	$ 22,467,398	$ 22,348,249
Cost of staffing services	16,873,331	16,610,015
Gross profit	5,594,067	5,738,234
Selling, general, and administrative expenses	7,213,620	5,343,607
Depreciation and amortization	92,591	95,550
Income from operations	(1,712,144)	299,077
Interest expense and other financing expense	2,163	4
Net (loss) income before income taxes	(1,714,307)	299,073
Provision for income taxes	(496,618)	116,621
Net (loss) income	$ (1,217,689)	$ 182,452
Earnings per share:
Basic	$ (.24)	$ 0.04
Diluted	$ (.24)	$ 0.04
Weighted average shares outstanding:
Basic	4,983,157	5,052,888
Diluted	4,983,157	5,113,785

Condensed Consolidated Statemen

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 30, 2018	Mar. 31, 2017
Cash flows from operating activities
Net (loss) income	$ (1,217,689)	$ 182,452
Adjustments to reconcile net (loss) income to net cash (used in) provided by operations
Depreciation and amortization	92,591	95,550
Provision for bad debt	(10,995)	18,875
Reserve on workers' compensation risk pool deposit in receivership	1,540,000	0
Stock based compensation	26,593	9,906
Cumulative effect of accounting change	(3,311)	0
Deferred tax asset	(496,618)	116,621
Changes in operating assets and liabilities
Accounts receivable	150,046	800,836
Prepaid expenses, deposits and other	90,372	146,087
Prepaid workers' compensation	(119,422)	464,907
Accounts payable	(324,831)	(363,322)
Other current liabilities	(283,310)	185,314
Accrued wages and benefits	388,523	(139,236)
Workers' compensation risk pool deposits	0	15
Workers' compensation claims liability	0	(130,055)
Net cash (used in) provided by operating activities	(168,051)	1,387,950
Cash flows from investing activities
Purchase of property and equipment	(67,197)	(92,463)
Net cash used in investing activities	(67,197)	(92,463)
Cash flows from financing activities:
Net change in account purchase agreement facility	(671,594)	(589,531)
Purchase of treasury stock	(129,032)	0
Net cash used in financing activities	(800,626)	(589,531)
Net (decrease) increase in cash	(1,035,874)	705,956
Cash, beginning of period	7,781,484	3,047,417
Cash, end of period	6,745,610	3,753,373
Supplemental disclosure of non-cash activities
Purchase of vested stock options	240,670	0
Supplemental disclosure of cash flow information
Interest paid	2,163	4
Income taxes paid	$ (3,252)	$ 912

1. BASIS OF PRESENTATION AND SU

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 30, 2018
Accounting Policies [Abstract]
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	The accompanying unaudited consolidated financial statements have been prepared by Command Center, Inc. ("Command Center,” the “Company,” “we,” "us," or “our”) in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP for interim financial reporting and rules and regulations of the Securities and Exchange Commission, or the SEC. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of our management, all adjustments, consisting of only normal recurring accruals, necessary for a fair presentation of the financial position, results of operations, and cash flows for the fiscal periods presented have been included. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report filed on Form 10-K for the year ended December 29, 2017. The results of operations for the thirteen weeks ended March 30, 2018 are not necessarily indicative of the results expected for the full fiscal year, or for any other fiscal period. Consolidation: Use of estimates: Note 9 – Commitments and Contingencies Reclassifications: Concentrations: Revenue recognition: Below is a summary of our revenue disaggregated by industry (in thousands, except percentages): Thirteen weeks ended March 30, 2018 March 31, 2017 Industrial, manufacturing and warehousing $ 8,628 38.4 % $ 7,256 32.5 % Construction 4,044 18.0 % 4,114 18.4 % Transportation 3,749 16.7 % 3,623 16.2 % Hospitality 3,748 16.7 % 4,273 19.1 % Retail and other 2,298 10.2 % 3,082 13.8 % Total $ 22,467 100.0 % $ 22,348 100.0 % Recently adopted accounting pronouncements: The new standard became effective for us beginning December 30, 2017. We implemented the standard using the modified retrospective approach which recognized the cumulative effect of application on that date. As a result of adopting this new standard, we made an adjustment that increased Revenue on our Consolidated Statement of Operations and decreased Accumulated deficit on our Consolidated Balance Sheet by approximately $3,000. We have applied the guidance in this new standard to all contracts at the date of initial application. Recent accounting pronouncements: In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The new guidance simplifies the subsequent measurement of goodwill by eliminating the requirement to perform a Step 2 impairment test to compute the implied fair value of goodwill. Instead, companies will only compare the fair value of a reporting unit to its carrying value (Step 1) and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized may not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. This amended guidance is effective for fiscal years and interim periods beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We plan to adopt this guidance for our 2018 annual impairment test and do not expect the adoption to have a material impact on our financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today's “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This guidance is effective for annual periods beginning after December 15, 2019, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. Other accounting standards that have been issued by the Financial Accounting Standards Board or other standards-setting bodies are not expected to have a material impact on our financial position, results of operations, and cash flows. For the period ended March 30, 2018, the adoption of other accounting standards had no material impact on our financial positions, results of operations, or cash flows.

2. EARNINGS PER SHARE

2. EARNINGS PER SHARE	3 Months Ended
	Mar. 30, 2018
Earnings per share:
EARNINGS PER SHARE	Basic earnings per share is calculated by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding, and does not include the impact of any potentially dilutive common stock equivalents. Diluted earnings per share reflect the potential dilution of securities that could share in our earnings through the conversion of common shares issuable via outstanding stock options except where their inclusion would be anti-dilutive. For the thirteen weeks ended March 30, 2018, there were 66,383 outstanding stock options that were excluded from the diluted earnings per share calculation because their inclusion would have been anti-dilutive. Total outstanding common stock equivalents at March 30, 2018 and March 31, 2017, were 254,995 and 197,208, respectively. Diluted common shares outstanding were calculated using the treasury stock method and are as follows: Thirteen weeks ended March 30, 2018 March 31, 2017 Weighted average number of common shares used in basic net income per common share 4,983,157 5,052,888 Dilutive effects of stock options - 60,897 Weighted average number of common shares used in diluted net income per common share 4,983,157 5,113,785

3. ACCOUNT PURCHASE AGREEMENT &

3. ACCOUNT PURCHASE AGREEMENT & LINE OF CREDIT FACILITY	3 Months Ended
	Mar. 30, 2018
Account Purchase Agreement Line Of Credit Facility
ACCOUNT PURCHASE AGREEMENT & LINE OF CREDIT FACILITY	In May 2016, we signed an account purchase agreement with our lender, Wells Fargo Bank, N.A, which allows us to sell eligible accounts receivable for 90% of the invoiced amount on a full recourse basis up to the facility maximum, or $14.0 million on March 30, 2018 and December 29, 2017. When the receivable is paid by our customers, the remaining 10% is paid to us, less applicable fees and interest. Eligible accounts receivable are generally defined to include accounts that are not more than ninety days past due. Pursuant to this agreement, we owed approximately $182,000 and $854,000 at March 30, 2018 and December 29, 2017, respectively. The current agreement bears interest at the Daily One Month London Interbank Offered Rate plus 2.50% per annum. At March 30, 2018 the effective interest rate was 4.38%. Interest is payable on the actual amount advanced. Additional charges include an annual facility fee equal to 0.50% of the facility threshold in place and lockbox fees. As collateral for repayment of any and all obligations, we granted Wells Fargo Bank, N.A. a security interest in all of our property including, but not limited to, accounts receivable, intangible assets, contract rights, deposit accounts, and other such assets. The agreement requires that the sum of our unrestricted cash plus net accounts receivable must at all times be greater than the sum of the amount outstanding under the agreement plus accrued payroll and accrued payroll taxes. At March 30, 2018 and December 29, 2017 we were in compliance with this covenant. As of March 30, 2018, we have a letter of credit with Wells Fargo for approximately $6.0 million that secures our obligations to our workers’ compensation insurance carrier and reduces the amount available to us under the account purchase agreement. On April 11, 2018 this letter of credit was increased to approximately $6.2 million. For additional information related to this letter of credit, see Note 5 – Workers’ Compensation Insurance and Reserves

4. GOODWILL AND OTHER INTANGIBL

4. GOODWILL AND OTHER INTANGIBLE ASSETS	3 Months Ended
	Mar. 30, 2018
Goodwill And Other Intangible Assets
GOODWILL AND OTHER INTANGIBLE ASSETS	Goodwill and other intangible assets are stated net of accumulated amortization. The following table summarizes the goodwill and intangible asset balances: March 30, 2018 December 29, 2017 Goodwill $ 3,777,568 $ 3,777,568 Intangible assets 659,564 659,564 Accumulated amortization (405,642 ) (351,556 ) Goodwill and other intangible assets, net $ 4,031,490 $ 4,085,576 Amortization expense for the thirteen weeks ended March 30, 2018 and March 31, 2017 was approximately $54,000 and $56,000, respectively.

5. WORKERS' COMPENSATION INSURA

5. WORKERS' COMPENSATION INSURANCE AND RESERVES	3 Months Ended
	Mar. 30, 2018
Workers Compensation Insurance And Reserves
WORKERS' COMPENSATION INSURANCE AND RESERVES	In April 2014, we changed our workers’ compensation carrier to ACE American Insurance Company, or ACE, in all states in which we operate other than Washington and North Dakota. The ACE policy is a large deductible policy where we have primary responsibility for all claims. ACE provides insurance for covered losses and expenses in excess of $500,000 per incident. Under this large deductible program, we are largely self-insured. Per our contractual agreements with ACE, we must provide a collateral deposit of $6.0 million, which is accomplished through a letter of credit under our account purchase agreement with Wells Fargo. For workers’ compensation claims originating in Washington and North Dakota, we pay workers’ compensation insurance premiums and obtain full coverage under mandatory state government administered programs. Our liability associated with claims in these jurisdictions is limited to the payment of premiums, which are based upon the amount of payroll paid within the particular state. Accordingly, our consolidated financial statements reflect only the mandated workers’ compensation insurance premium liability for workers’ compensation claims in these jurisdictions. As part of our large deductible workers’ compensation programs, our carriers require that we collateralize a portion of our future workers’ compensation obligations in order to secure future payments made on our behalf. This collateral is typically in the form of cash and cash equivalents. At March 30, 2018, we had cash collateral deposits of approximately $301,000, of which approximately $100,000 is included in current assets. With the addition of the $6.0 million letter of credit, our cash and non-cash collateral totaled approximately $6.3 million at March 30, 2018. Workers’ compensation expense for our field team members is recorded as a component of our cost of services and consists of the following components: changes in our self-insurance reserves as determined by our third party actuary, actual claims paid, insurance premiums and administrative fees paid to our workers’ compensation carrier(s), and premiums paid to mandatory state government administered programs. Workers’ compensation expense for our temporary workers totaled approximately $1.0 million and $0.8 million for the quarter ended March 30, 2018 and March 31, 2017, respectively.

6. STOCK BASED COMPENSATION

6. STOCK BASED COMPENSATION	3 Months Ended
	Mar. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK BASED COMPENSATION	Employee Stock Incentive Plan: Command Center, Inc. 2016 Stock Incentive Plan The following table summarizes our stock options outstanding at December 29, 2017 and changes during the period ended March 30, 2018: Number of shares under options Weighted average exercise price per share Weighted average grant date fair value Outstanding, December 29, 2017 254,995 $ 4.49 $ 2.68 Granted - - - Outstanding, March 30, 2018 254,995 4.49 The following table summarizes our non-vested stock options outstanding at December 29, 2017, and changes during the period ended March 30, 2018: Number of options Weighted average exercise price per share Weighted average grant date fair value Non-vested, December 29, 2017 63,539 $ 5.47 $ 2.86 Granted - - - Vested - - - Non-vested, March 30, 2018 63,539 5.47 2.86 The following table summarizes information about our stock options outstanding, and reflects the intrinsic value recalculated based on the closing price of our common stock of $5.70 at March 30, 2018: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding 254,995 $ 4.49 5.98 $ 785,298 Exercisable 191,456 4.17 5.04 423,125 The following table summarizes information about our stock options outstanding, and reflects weighted average contractual life at March 30, 2018: Outstanding options Vested options Range of exercise prices Number of shares outstanding Weighted average contractual life Number of shares exercisable Weighted average contractual life $ 2.40 - 4.80 158,332 5.87 133,333 5.19 $ 4.81 - 8.76 96,663 6.17 58,123 4.70 254,995 5.98 191,456 5.04 At March 30, 2018, there was unrecognized stock-based compensation expense totaling approximately $115,000 relating to non-vested options that will be recognized over the next 2.5 years.

7. STOCKHOLDERS_ EQUITY

7. STOCKHOLDERS’ EQUITY	3 Months Ended
	Mar. 30, 2018
Stockholders' equity
STOCKHOLDERS’ EQUITY	Stock Repurchase: Total shares purchased during the thirteen weeks ended March 30, 2018 Average price per share Total number of shares purchased as part of publicly announced plan Approximate dollar value of shares that may be purchased under the plan Period 1 (December 30, 2017 to January 26, 2018) 4,820 $ 5.75 585,892 $ 4,598,243 Period 2 (January 27, 2018 to February 23, 2018) 10,541 5.83 596,433 4,536,840 Period 3 (February 24, 2018 to March 30, 2018) 7,100 5.62 603,533 4,496,949 Total 22,461

8. INCOME TAX

8. INCOME TAX	3 Months Ended
	Mar. 30, 2018
Income Tax
INCOME TAX	Income tax expense during interim periods is based on applying an estimated annual effective income tax rate to year-to-date income, plus any significant unusual or infrequently occurring items which are recorded in the interim period. The provision for income taxes for the period ended March 30, 2018 and March 31, 2017 differs from the amount that would be provided by applying the statutory U.S. federal income tax rate to pre-tax income primarily because of state income taxes. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year and change in tax law and tax rates. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, additional information becomes known or as the tax environment changes. On December 22, 2017, Congress signed Public Law No 115-97, commonly referred to as the Tax Cut and Jobs Act of 2017. The passage of this legislation resulted in the U.S. federal corporate tax rate decreasing from 35% to 21% beginning in January 2018, the elimination of the corporate alternative minimum tax, the acceleration of depreciation for U.S. tax purposes, creating a new limitations on deductible interest expense, and changing the rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017.

9. COMMITMENTS AND CONTINGENCIE

9. COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	Freestone Insurance Company Liquidation From April 2012 through March 2014, our workers’ compensation insurance coverage was provided by Dallas National Insurance, who changed its corporate name to Freestone Insurance Company. Under the terms of the policies we were required to provide cash collateral of $900,000 per year, for a total of $1.8 million, as a non-depleting fund to secure our payment up to the deductible amount. In April 2014, the Insurance Commissioner of the State of Delaware placed Freestone in receivership due to concerns about its financial condition. In August 2014, the receivership was converted to a liquidation proceeding. In late 2015, we filed timely proofs of claim with the receiver. One proof of claim is filed as a priority claim seeking return of the full amount of our collateral deposits. The other proof of claim is a general claim covering non-collateral items. If it is ultimately determined that our claim is not a priority claim, or if there are insufficient assets in the liquidation to satisfy the priority claims, we may not receive any or all of our collateral. During the second quarter of 2015 and the first quarter of 2016, it became apparent that there was significant uncertainty related to the collectability of the $500,000 deposit with AMS provided related to our insurance coverage from July 2008 through April 2011. Because of this, we recorded a reserve of $250,000 in each of those quarters, fully reserving this deposit. In conjunction with recent management, board, and audit committee changes, we have reviewed the estimated costs and potential benefits of pursuing priority claimant status in the liquidation proceeding and have altered our planned long-term strategy. Given that Freestone has negative equity, the complexity of this matter, our experience to date, and the amount of time this matter has remained unresolved, we believe the continuation of our efforts to achieve priority status will not necessarily prove cost-effective. While we will continue to seek priority status, we have determined that our stockholders will be best served by a more measured investment in the recovery effort. While we are hopeful for a more positive outcome, we believe that without significant investment it is more likely than not that we will be treated in a similar manner as other creditors, resulting in our priority claim having no value. Based on court filings and other information made available to us, we estimate the ratio between Freestone’s liquid assets and liabilities to be approximately 20%. We now believe this ratio applied to our deposit represents the best estimate of the high end of the range of our ultimate recovery. Accordingly, we have increased the reserve on this asset by approximately $1.5 million resulting in a net carrying amount of $260,000. We believe that our recovery, if any, of the deposits placed with Freestone and it's affiliates will be the greater of: (i) the amount determined and allowed resulting from a tracing analysis of our collateral deposits; or (ii) the amount we would receive in distribution as a general unsecured claimant based on the amount of our collateral deposit. The Company and its counsel, in conjunction and coordination with counsel for other potentially aggrieved collateral depositors, are working diligently in order to maximize our recovery of collateral deposits previously made to Freestone and achieve the best possible outcome for our stockholders. Ultimately, the amount of the collateral deposit to be returned will be determined by the Chancery Court in Delaware, after hearing evidence and arguments from all engaged parties. Management reviews these deposits at each balance sheet date and estimates the future range in loss related to this matter could be as high as $260,000, the net balance of the deposit. Legal Proceedings:

1. BASIS OF PRESENTATION AND 15

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 30, 2018
Accounting Policies [Abstract]
Basis of Presentation	The accompanying unaudited consolidated financial statements have been prepared by Command Center, Inc. ("Command Center,” the “Company,” “we,” "us," or “our”) in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP for interim financial reporting and rules and regulations of the Securities and Exchange Commission, or the SEC. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of our management, all adjustments, consisting of only normal recurring accruals, necessary for a fair presentation of the financial position, results of operations, and cash flows for the fiscal periods presented have been included. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report filed on Form 10-K for the year ended December 29, 2017. The results of operations for the thirteen weeks ended March 30, 2018 are not necessarily indicative of the results expected for the full fiscal year, or for any other fiscal period.
Consolidation	The consolidated financial statements include the accounts of Command Center and all of our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates	The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the allowance for doubtful accounts, workers’ compensation risk pool deposits, and workers’ compensation claims liability. For additional information related to our workers' compensation risk pool deposits, see Note 9 – Commitments and Contingencies
Reclassifications	Certain financial statement amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on net income or accumulated deficit as previously reported.
Concentrations	At March 30, 2018, 14.7% of accounts receivable were due from a single client. For the period ended March 30, 2018, 10.5% of our total revenue came from that same client.
Revenue Recognition	Revenue recognition: Below is a summary of our revenue disaggregated by industry (in thousands, except percentages): Thirteen weeks ended March 30, 2018 March 31, 2017 Industrial, manufacturing and warehousing $ 8,628 38.4 % $ 7,256 32.5 % Construction 4,044 18.0 % 4,114 18.4 % Transportation 3,749 16.7 % 3,623 16.2 % Hospitality 3,748 16.7 % 4,273 19.1 % Retail and other 2,298 10.2 % 3,082 13.8 % Total $ 22,467 100.0 % $ 22,348 100.0 %
Recently Adopted Accounting Pronouncements	Recently adopted accounting pronouncements: The new standard became effective for us beginning December 30, 2017. We implemented the standard using the modified retrospective approach which recognized the cumulative effect of application on that date. As a result of adopting this new standard, we made an adjustment that increased Revenue on our Consolidated Statement of Operations and decreased Accumulated deficit on our Consolidated Balance Sheet by approximately $3,000. We have applied the guidance in this new standard to all contracts at the date of initial application. Recent accounting pronouncements: In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The new guidance simplifies the subsequent measurement of goodwill by eliminating the requirement to perform a Step 2 impairment test to compute the implied fair value of goodwill. Instead, companies will only compare the fair value of a reporting unit to its carrying value (Step 1) and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized may not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. This amended guidance is effective for fiscal years and interim periods beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We plan to adopt this guidance for our 2018 annual impairment test and do not expect the adoption to have a material impact on our financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today's “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This guidance is effective for annual periods beginning after December 15, 2019, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. Other accounting standards that have been issued by the Financial Accounting Standards Board or other standards-setting bodies are not expected to have a material impact on our financial position, results of operations, and cash flows. For the period ended March 30, 2018, the adoption of other accounting standards had no material impact on our financial positions, results of operations, or cash flows.

1. BASIS OF PRESENTATION AND 16

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Mar. 30, 2018
Basis Of Presentation And Summary Of Significant Accounting Policies Tables
Summary of revenue	Thirteen weeks ended March 30, 2018 March 31, 2017 Industrial, manufacturing and warehousing $ 8,628 38.4 % $ 7,256 32.5 % Construction 4,044 18.0 % 4,114 18.4 % Transportation 3,749 16.7 % 3,623 16.2 % Hospitality 3,748 16.7 % 4,273 19.1 % Retail and other 2,298 10.2 % 3,082 13.8 % Total $ 22,467 100.0 % $ 22,348 100.0 %

2. EARNINGS PER SHARE (Tables)

2. EARNINGS PER SHARE (Tables)	3 Months Ended
	Mar. 30, 2018
Earnings per share:
Schedule of earnings per share	Thirteen weeks ended March 30, 2018 March 31, 2017 Weighted average number of common shares used in basic net income per common share 4,983,157 5,052,888 Dilutive effects of stock options - 60,897 Weighted average number of common shares used in diluted net income per common share 4,983,157 5,113,785

4. GOODWILL AND OTHER INTANGI18

4. GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	3 Months Ended
	Mar. 30, 2018
Goodwill And Other Intangible Assets Tables
Goodwill and other intangible assets	March 30, 2018 December 29, 2017 Goodwill $ 3,777,568 $ 3,777,568 Intangible assets 659,564 659,564 Accumulated amortization (405,642 ) (351,556 ) Goodwill and other intangible assets, net $ 4,031,490 $ 4,085,576

6. STOCK BASED COMPENSATION (Ta

6. STOCK BASED COMPENSATION (Tables)	3 Months Ended
	Mar. 30, 2018
Share-based Compensation [Abstract]
Schedule of stock options outstanding	Number of shares under options Weighted average exercise price per share Weighted average grant date fair value Outstanding, December 29, 2017 254,995 $ 4.49 $ 2.68 Granted - - - Outstanding, March 30, 2018 254,995 4.49
Nonvested stock options outstanding	Number of options Weighted average exercise price per share Weighted average grant date fair value Non-vested, December 29, 2017 63,539 $ 5.47 $ 2.86 Granted - - - Vested - - - Non-vested, March 30, 2018 63,539 5.47 2.86
Intrinsic value	Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding 254,995 $ 4.49 5.98 $ 785,298 Exercisable 191,456 4.17 5.04 423,125
Summary of stock by price range	Outstanding options Vested options Range of exercise prices Number of shares outstanding Weighted average contractual life Number of shares exercisable Weighted average contractual life $ 2.40 - 4.80 158,332 5.87 133,333 5.19 $ 4.81 - 8.76 96,663 6.17 58,123 4.70 254,995 5.98 191,456 5.04

7. STOCKHOLDERS_ EQUITY (Tables

7. STOCKHOLDERS’ EQUITY (Tables)	3 Months Ended
	Mar. 30, 2018
Stockholders Equity Tables
Summary of stock purchases	Total shares purchased during the thirteen weeks ended March 30, 2018 Average price per share Total number of shares purchased as part of publicly announced plan Approximate dollar value of shares that may be purchased under the plan Period 1 (December 30, 2017 to January 26, 2018) 4,820 $ 5.75 585,892 $ 4,598,243 Period 2 (January 27, 2018 to February 23, 2018) 10,541 5.83 596,433 4,536,840 Period 3 (February 24, 2018 to March 30, 2018) 7,100 5.62 603,533 4,496,949 Total 22,461

1. BASIS OF PRESENTATION AND 21

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2018	Mar. 31, 2017
Revenue	$ 22,467	$ 22,348
Revenue concentration	100.00%	100.00%
Industrial, manufacturing and warehousing
Revenue	$ 8,628	$ 7,256
Revenue concentration	38.40%	32.50%
Construction
Revenue	$ 4,044	$ 4,114
Revenue concentration	18.00%	18.40%
Transportation
Revenue	$ 3,749	$ 3,623
Revenue concentration	16.70%	16.20%
Hospitality
Revenue	$ 3,748	$ 4,273
Revenue concentration	16.70%	19.10%
Retail and other
Revenue	$ 2,298	$ 3,082
Revenue concentration	10.20%	13.80%

1. BASIS OF PRESENTATION AND 22

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)	3 Months Ended
	Mar. 30, 2018	Mar. 31, 2017
Concentration risk percent	100.00%	100.00%
Single Client | Accounts Receivable
Concentration risk percent	14.70%
Single Client | Revenue
Concentration risk percent	10.50%

2. EARNINGS PER SHARE (Details)

2. EARNINGS PER SHARE (Details) - shares	3 Months Ended
	Mar. 30, 2018	Mar. 31, 2017
Earnings per share:
Weighted average number of common shares used in basic net income per common share	4,983,157	5,052,888
Dilutive effects of stock options	0	60,897
Weighted average number of common shares used in diluted net income per common share	4,983,157	5,113,785

2. EARNINGS PER SHARE (Details

2. EARNINGS PER SHARE (Details Narrative) - USD ($)	3 Months Ended
	Mar. 30, 2018	Mar. 31, 2017
Earnings per share:
Anti-dilutive options not included in the calclutaion of earnings per share	66,383
Total outstanding common stock equivalents	$ 254,995	$ 197,208

3. ACCOUNT PURCHASE AGREEMENT25

3. ACCOUNT PURCHASE AGREEMENT & LINE OF CREDIT FACILITY (Details Narrative) - USD ($)	3 Months Ended
	Mar. 30, 2018	Apr. 11, 2018	Dec. 29, 2017
Note 3 - ACCOUNT PURCHASE AGREEMENT
Current financing agreement accounts receivable percentage for sale	90.00%
Percent paid to company after account is paid by customers	10.00%
Current facility Maximum	$ 14,000,000		$ 14,000,000
Account purchase agreement payable	$ 182,000		$ 854,000
Per annum rate added to Daily One Month London Interbank Offered Rate	2.50%
Effective interest rate	4.38%
Annual facility fee	0.50%
Letter of credit	$ 6,000,000	$ 6,200,000

4. GOODWILL AND OTHER INTANGI26

4. GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($)	Mar. 30, 2018	Dec. 29, 2017
Goodwill And Other Intangible Assets Details
Goodwill	$ 3,777,568	$ 3,777,568
Intangible assets	659,564	659,564
Accumulated amortization	(405,642)	(351,556)
Goodwill and other intangible assets, net	$ 4,031,490	$ 4,085,576

4. GOODWILL AND OTHER INTANGI27

4. GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 30, 2018	Mar. 31, 2017
Goodwill And Other Intangible Assets Details Narrative
Amortization of intangible assets	$ 54,000	$ 56,000

5. WORKERS' COMPENSATION INSU28

5. WORKERS' COMPENSATION INSURANCE AND RESERVES (Details Narrative) - USD ($)	3 Months Ended
	Mar. 30, 2018	Mar. 31, 2017	Apr. 11, 2018
Collateral deposit	$ 6,300,000
Cash collateral deposits	301,000
Cash collateral deposits included in current assets	100,000
Letter of credit	6,000,000		$ 6,200,000
Workers’ compensation expense	1,000,000	$ 800,000
ACE
Maximum amount covered by workers compensation insurance	500,000
Collateral deposit	$ 6,000,000

6. STOCK BASED COMPENSATION (De

6. STOCK BASED COMPENSATION (Details)	3 Months Ended
	Mar. 30, 2018$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Number of Options Outstanding, Beginning Balance | shares	254,995
Granted, Option | shares	0
Number of Options Outstanding, Ending Balance | shares	254,995
Weighted Average Exercise Price Per Share
Outstanding at beginning of period	$ 4.49
Granted	0
Outstanding at end of period	4.49
Weighted Average Grant Date Fair Value Per Share
Outstanding at beginning of period	2.68
Granted	$ 0

6. STOCK BASED COMPENSATION (30

6. STOCK BASED COMPENSATION (Details 1)	3 Months Ended
	Mar. 30, 2018$ / sharesshares
Stock Based Compensation Details 1
Number of Nonvested Options Outstanding, Beginning Balance | shares	63,539
Granted | shares	0
Vested | shares	0
Number of Nonvested Options Outstanding, Ending Balance | shares	63,539
Weighted Average Exercise Price Per share
Outstanding nonvested at beginning of period	$ 5.47
Granted	.00
Vested	0
Outstanding nonvested at end of period	5.47
Outstanding nonvested at beginning of period	2.86
Granted	0
Vested	0
Outstanding nonvested at end of period	$ 2.86

6. STOCK BASED COMPENSATION (31

6. STOCK BASED COMPENSATION (Details 2) - USD ($)	3 Months Ended
	Mar. 30, 2018	Dec. 29, 2017
Stock Based Compensation Details 2
Number of Options, outstanding	254,995	254,995
Weighted Average Exercise Price Per Share, Outstanding	$ 4.49	$ 4.49
Weighted Average Remaining Contractual Life (years), outstanding	5 years 11 months 23 days
Aggregate Intrinsic Value, outstanding	$ 785,298
Number of Options, Exercisable	191,456
Weighted Average Exercise Price Per Share, Exercisable	$ 4.17
Weighted Average Remaining Contractual Life (years), Exercisable	5 years 14 days
Aggregate Intrinsic Value, Exercisable	$ 423,125

6. STOCK BASED COMPENSATION (32

6. STOCK BASED COMPENSATION (Details 3) - shares	3 Months Ended
	Mar. 30, 2018	Dec. 29, 2017
Number of Options, Outstanding	254,995	254,995
Weighted Average Remaining Contractual Life (years), Outstanding	5 years 11 months 23 days
Number of Options, Exercisable	191,456
Weighted Average Remaining Contractual Life (years), Exercisable	5 years 14 days
2.40 - 4.80
Number of Options, Outstanding	158,332
Weighted Average Remaining Contractual Life (years), Outstanding	5 years 10 months 13 days
Number of Options, Exercisable	133,333
Weighted Average Remaining Contractual Life (years), Exercisable	5 years 2 months 8 days
4.81 - 8.76
Number of Options, Outstanding	96,663
Weighted Average Remaining Contractual Life (years), Outstanding	6 years 2 months 1 day
Number of Options, Exercisable	58,123
Weighted Average Remaining Contractual Life (years), Exercisable	4 years 8 months 12 days

6. STOCK BASED COMPENSATION (33

6. STOCK BASED COMPENSATION (Details Narrative) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 30, 2018	Dec. 29, 2017	Nov. 17, 2016
Unrecognized share-based compensation expense	$ 115,000
Unrecognized share-based compensation expense period of recogntion	2 years 6 months
2008 Stock Incentive Plan
Authorized shares under plan	533,333
2016 Stock Incentive Plan
Authorized shares under plan			500,000
Remaining life of plan	10 years
Options vested	191,456	191,456

7. STOCKHOLDERS_ EQUITY (Detail

7. STOCKHOLDERS’ EQUITY (Details) - USD ($)	1 Months Ended			3 Months Ended
	Mar. 30, 2018	Feb. 23, 2018	Jan. 26, 2018	Mar. 30, 2018
Stockholders Equity Details
Total shares purchased	7,100	10,541	4,820	22,461
Average price per share	$ 5.62	$ 5.83	$ 5.75
Total number of shares purchased as part of publicly announced plan	603,533	596,433	585,892
Approximate dollar value of shares that may yet be purchased under the plan	$ 4,496,949	$ 4,536,840	$ 4,598,243

7. STOCKHOLDERS_ EQUITY (Deta35

7. STOCKHOLDERS’ EQUITY (Details Narrative)	3 Months Ended
	Mar. 30, 2018USD ($)$ / sharesshares
Stockholders Equity Details Narrative
Stock repurchase authorized amount	$ 5,000,000
Shares purchased | shares	22,461
Shares purchased, amount	$ 129,000
Average price per share | $ / shares	$ 5.74
Stock repurchase remaining amount	$ 4,500,000

9. COMMITMENTS AND CONTINGENC36

9. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	3 Months Ended	12 Months Ended
	Jun. 26, 2015	Dec. 30, 2016	Mar. 30, 2018	Mar. 31, 2014	Apr. 01, 2011
Collateral deposit			$ 6,300,000
Total reserves on the deposit balance	$ 500,000
Total asset to total liability ratio		53.00%
Dallas National Insurance
Collateral deposit per year				$ 900,000
Collateral deposit				$ 1,800,000	$ 500,000