| 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 fiscal year ended December 28, 2018. The results of operations for the twenty-six weeks ended June 28, 2019
are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period. Consolidation: Use of estimates: Concentrations: Revenue recognition: Below are summaries of our revenue disaggregated
by industry (in thousands, except percentages):
Thirteen weeks ended
June 28, 2019 June 29, 2018
Industrial, manufacturing and warehousing $ 7,323 29.5 % $ 8,557 35.4 %
Transportation 4,665 18.8 % 3,503 14.5 %
Construction 4,662 18.8 % 4,442 18.4 %
Hospitality 4,379 17.6 % 4,046 16.7 %
Retail and Other 3,809 15.3 % 3,628 15.0 %
Total $ 24,838 100.0 % $ 24,176 100.0 %
Twenty-six weeks ended
June 28, 2019 June 29, 2018
Industrial, manufacturing and warehousing $ 13,919 29.9 % $ 17,185 36.8 %
Construction 9,353 20.1 % 7,252 15.5 %
Hospitality 8,664 18.6 % 8,486 18.2 %
Transportation 8,013 17.2 % 7,794 16.7 %
Retail and Other 6,643 14.3 % 5,926 12.7 %
Total $ 46,593 100.0 % $ 46,643 100.0 % Leases: Operating leases are included in right-of-use
assets and lease current and long-term liabilities. Lease expense for operating leases is recognized on a straight-line basis over
the lease term, and is included in selling, general and administrative expense. Some of our leases require variable payments of
property taxes, insurance, and common area maintenance, in addition to base rent. The variable portion of these lease payments
is not included in our right-of-use assets or lease liabilities. These variable payments are expensed when the obligation for those
payments is incurred and are included in lease expense in selling, general and administrative expense. Lease right-of-use assets and lease liabilities
are measured using the present value of future minimum lease payments over the lease term at the lease commencement date. The right-of-use
asset also includes any lease payments made on or before the commencement date of the lease, less any lease incentives received.
We use our incremental borrowing rate based on the information available at the lease commencement date in determining the present
value of lease payments. The incremental borrowing rates used are estimated based on what we would be required to pay for a collateralized
loan over a similar term. Accounts Receivable and Allowance for
Doubtful Accounts: Recently adopted accounting pronouncements: We have elected the three practical expedients
allowed for implementation of the new standard, but have not utilized the hindsight practical expedient. Accordingly, we did not
reassess: 1) whether any expired or existing contracts are or contain leases; 2) the lease classification for any expired or existing
leases; 3) initial direct costs for any existing leases. As a result of adopting this guidance, we recognized
a right-of-use asset, and corresponding lease liability, of approximately $2.1 million as of the first day of our first fiscal
quarter of 2019. The adoption of this guidance did not have a material impact on expense recognition. The difference between
the right-of-use assets and lease liabilities relates to the deferred rent liability balance as of the end of fiscal 2018 associated
with the leases capitalized. The deferred rent liability, which was the difference between the straight-line lease expense and
cash paid, reduced the right-of-use asset upon adoption. In January 2017, the FASB issued guidance to
simplify the subsequent measurement of goodwill by eliminating the requirement to perform a Step 2 impairment test to compute the
implied fair value of goodwill. As a result, entities 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. 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 early adopted this guidance for
our fiscal 2018 annual impairment test. The adoption of the new standard did not have any impact to our consolidated financial
statements. Recently issued accounting pronouncements: Other accounting standards that have been issued
by the FASB or other standards-setting bodies are not expected to have a material impact on our financial position, results of
operations, and cash flows. |
