Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 28, 2014 | Nov. 03, 2014 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'BG Staffing, Inc. | ' |
Entity Central Index Key | '0001474903 | ' |
Current Fiscal Year End Date | '--12-29 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Trading Symbol | 'BGSF | ' |
Entity Common Stock, Shares Outstanding | ' | 5,608,145 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 28-Sep-14 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 28, 2014 | Dec. 29, 2013 |
Current assets | ' | ' |
Accounts receivable (net of allowance for doubtful accounts of $627,292 and $439,886 at 2014 and 2013, respectively) | $27,512,495 | $23,347,449 |
Prepaid expenses | 593,033 | 1,465,741 |
Other current assets | 661,918 | 436,796 |
Total current assets | 28,767,446 | 25,249,986 |
Property and equipment, net | 652,660 | 523,360 |
Other assets | ' | ' |
Deposits | 1,466,273 | 1,193,608 |
Deferred financing charges | 536,873 | 362,960 |
Deferred income taxes | 7,481,407 | 7,255,164 |
Intangible assets, net | 14,728,666 | 18,183,807 |
Goodwill | 5,863,483 | 5,853,616 |
Total other assets | 30,076,702 | 32,849,155 |
Total assets | 59,496,808 | 58,622,501 |
Current liabilities | ' | ' |
Long-term debt, current portion | 2,250,000 | 2,378,333 |
Accrued interest | 247,814 | 72,711 |
Accrued interest – related party | 0 | 550,655 |
Accounts payable | 1,304,103 | 1,933,214 |
Accrued expenses | 7,871,222 | 7,122,875 |
Accrued payroll | 1,826,972 | 1,002,301 |
Accrued workers’ compensation | 981,869 | 1,142,486 |
Contingent consideration | 1,262,240 | 1,946,848 |
Other current liabilities | 726,300 | 560,750 |
Accrued taxes | 1,299,361 | 148,759 |
Total current liabilities | 17,769,881 | 16,858,932 |
Line of credit | 14,600,000 | 13,000,000 |
Long-term debt, less current portion | 15,500,000 | 2,378,333 |
Long-term debt – related party | 0 | 14,628,099 |
Other long-term liabilities | 3,418,433 | 3,654,463 |
Total liabilities | 51,288,314 | 50,519,827 |
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, 5,608,145 and 5,598,847 shares issued and outstanding for 2014 and 2013, respectively | 54,489 | 54,396 |
Additional paid in capital | 2,090,947 | 1,066,820 |
Retained earnings | 6,063,058 | 6,981,458 |
Total stockholders’ equity | 8,208,494 | 8,102,674 |
Total liabilities and stockholders’ equity | $59,496,808 | $58,622,501 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) | Sep. 28, 2014 | Dec. 29, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Allowance for doubtful accounts receivable, current | $627,292 | $439,886 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 19,500,000 | 19,500,000 |
Common stock, shares issued | 5,608,145 | 5,598,847 |
Common stock, shares outstanding | 5,608,145 | 5,598,847 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | |
Income Statement [Abstract] | ' | ' | ' | ' |
Revenues | $48,007,610 | $47,865,934 | $129,875,186 | $107,882,236 |
Cost of services | 38,021,871 | 38,755,915 | 103,712,581 | 87,254,263 |
Gross profit | 9,985,739 | 9,110,019 | 26,162,605 | 20,627,973 |
Selling, general and administrative expenses | 6,222,795 | 5,319,052 | 18,387,274 | 13,484,184 |
Depreciation and amortization | 1,053,304 | 1,218,831 | 3,586,477 | 3,382,497 |
Operating income | 2,709,640 | 2,572,136 | 4,188,854 | 3,761,292 |
Loss on extinguishment of related party debt | 0 | 0 | -986,835 | 0 |
Interest expense, net | -634,238 | -448,549 | -1,854,587 | -1,165,049 |
Interest expense, net – related party | 0 | -682,553 | -213,322 | -1,470,608 |
Change in fair value of put option | -954,605 | 0 | -1,180,846 | 0 |
Income (loss) before income taxes | 1,120,797 | 1,441,034 | -46,736 | 1,125,635 |
Income tax expense | 755,635 | 23,141 | 871,664 | 28,950 |
Net income (loss) | 365,162 | 1,417,893 | -918,400 | 1,096,685 |
Net income (loss) per share: | ' | ' | ' | ' |
Basic | $0.07 | $0 | ($0.16) | $0 |
Diluted | $0.06 | $0 | ($0.16) | $0 |
Weighted-average shares outstanding: | ' | ' | ' | ' |
Basic | 5,608,301 | 0 | 5,602,160 | 0 |
Dilutive effect | 144,013 | 0 | 0 | 0 |
Diluted | 5,752,314 | 0 | 5,602,160 | 0 |
Pro forma C corporation data: | ' | ' | ' | ' |
Income before taxes | 0 | 1,441,034 | 0 | 1,125,635 |
Pro forma income tax expense | 0 | 599,922 | 0 | 519,959 |
Pro forma income | $0 | $841,112 | $0 | $605,676 |
Pro forma income per share: | ' | ' | ' | ' |
Basic | $0 | $0.16 | $0 | $0.11 |
Diluted | $0 | $0.15 | $0 | $0.11 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 28, 2014 | Sep. 29, 2013 | |
Cash flows from operating activities | ' | ' |
Net loss | ($918,400) | $1,096,685 |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 3,586,477 | 3,382,497 |
Loss on disposal of property and equipment | 894 | 0 |
Loss on extinguishment of related party debt | 986,835 | 0 |
Gain on contingent consideration | -212,000 | 0 |
Amortization of deferred financing costs | 133,038 | 160,157 |
Amortization of debt discounts | 77,230 | 161,934 |
Interest expense on earn out payable | 169,697 | 0 |
Put option adjustment | 1,180,846 | 0 |
Provision for doubtful accounts | 312,333 | 170,726 |
Stock-based compensation | 1,118,129 | 0 |
Deferred income taxes | -809,536 | -13,782 |
Net changes in operating assets and liabilities, net of effects of acquisitions: | ' | ' |
Accounts receivable | -5,083,325 | -8,107,072 |
Prepaid expenses | 729,464 | -316,273 |
Other current assets | 358,171 | -25,315 |
Deposits | -272,665 | -259,066 |
Accrued interest | -128,440 | 352,200 |
Accrued interest – related party | 0 | 211,040 |
Accounts payable | -629,111 | 3,369,923 |
Accrued expenses | 742,097 | 200,856 |
Accrued payroll | 824,671 | -312,778 |
Accrued workers’ compensation | -160,617 | 104,001 |
Contingent consideration | 0 | 397,226 |
Other current liabilities | 171,800 | 125,410 |
Accrued taxes | 1,150,602 | -11,440 |
Net cash provided by operating activities | 3,328,190 | 686,929 |
Cash flows from investing activities | ' | ' |
Business acquired, net of cash received | 0 | -9,114,386 |
Capital expenditures | -261,530 | -151,636 |
Net cash used in investing activities | -261,530 | -9,266,022 |
Cash flows from financing activities | ' | ' |
Net borrowings under line of credit | 178,529 | 6,200,000 |
Proceeds from issuance of long-term debt | 0 | 6,000,000 |
Principal payments on long-term debt | -1,698,194 | -2,220,912 |
Payments on other long-term liabilities | -500,000 | 0 |
Contingent consideration paid | -995,457 | -1,051,679 |
Other | -6,746 | -26,377 |
Deferred financing costs | -44,792 | -321,939 |
Net cash provided by (used in) financing activities | -3,066,660 | 8,579,093 |
Net change in cash | 0 | 0 |
Cash, beginning of period | 0 | 0 |
Cash, end of period | 0 | 0 |
Supplemental cash flow information: | ' | ' |
Cash paid for interest | 1,878,623 | 1,258,804 |
Cash paid for taxes, net of refunds | 149,961 | 32,886 |
Non-cash transactions: | ' | ' |
Prepaid offering costs | 87,163 | 0 |
Contingent consideration paid through relief of accounts receivable | $596,079 | $0 |
NATURE_OF_OPERATIONS
NATURE OF OPERATIONS | 9 Months Ended |
Sep. 28, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Nature of Operations | ' |
NATURE OF OPERATIONS | |
BG Staffing, Inc. (formerly LTN Staffing, LLC, a Delaware limited liability company whose sole member was LTN Acquisition, LLC (the “Parent”)), is a provider of temporary staffing services that also operates, through its wholly owned subsidiaries BG Staffing, LLC, B G Staff Services Inc. and BG Personnel, LP (collectively, the “Company”), within the United States of America in three industry segments: Light Industrial, Multifamily, and IT Staffing. | |
In connection with BG Staffing, Inc’s filing of a registration statement with the Securities and Exchange Commission (the “SEC”) to register the resale of common stock of BG Staffing, Inc., the Company reorganized. The reorganization was completed with a merger of the Parent with and into LTN Staffing, LLC, with LTN Staffing, LLC continuing as the surviving entity. Immediately following this merger, LTN Staffing, LLC converted to a corporation for state law purposes and to a C corporation for federal income tax purposes on November 3, 2013. All unit, share, and per share amounts shown in these Consolidated Financial Statements reflect the affect of the conversion as of the earliest date shown. | |
The Light Industrial segment provides temporary workers primarily to distributions and logistics costumers needing a flexible workforce in Illinois, Wisconsin, Texas, Tennessee, and Mississippi. The Company completed an acquisition on May 28, 2013, that expanded its Light Industrial operations into Texas, Mississippi, and Tennessee. | |
The Multifamily segment provides front office and maintenance personnel on a temporary basis to various apartment communities, in Texas and other states, via property management companies responsible for the apartment communities day to day operations. | |
The IT Staffing segment provides skilled contract labor on a nationwide basis for IT implementation and maintenance projects. | |
The accompanying unaudited consolidated financial statements for the thirteen and thirty-nine week periods ended September 28, 2014 and September 29, 2013, 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. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. However, management of the Company believes, to the best of their knowledge, that the disclosures herein are adequate to make the information presented not misleading. The Company has determined that there were no subsequent events that would require disclosure or adjustments to the accompanying consolidated financial statements through the date the financial statements were issued. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited Consolidated Financial Statements of the Company for the fiscal year ended December 29, 2013, included in its Annual Report on Form 10-K. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | ||||||||||||||||
Sep. 28, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Summary Of Significant Accounting Policies | ' | ||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||
Basis of Presentation | |||||||||||||||||
The consolidated financial statements include the accounts of the Company. All significant intercompany transactions and balances have been eliminated in consolidation. | |||||||||||||||||
Fiscal Year | |||||||||||||||||
The Company has a 52/53 week fiscal year. Fiscal periods for the consolidated financial statements included herein are as of September 28, 2014 and December 29, 2013, and include the thirteen and thirty-nine week periods ended September 28, 2014 and September 29, 2013. | |||||||||||||||||
Reclassifications | |||||||||||||||||
Certain reclassifications have been made to the 2013 financial statements to conform with the 2014 presentation. | |||||||||||||||||
Accounts Receivable | |||||||||||||||||
The Company extends credit to its customers in the normal course of business. Accounts receivable represents unpaid balances due from customers. The Company maintains an allowance for doubtful accounts for estimated losses resulting from customers’ non-payment of balances due to the Company. The Company’s determination of the allowance for uncollectible amounts is based on management’s judgments and assumptions, including general economic conditions, portfolio composition, prior loss experience, evaluation of credit risk related to certain individual customers and the Company’s ongoing examination process. Receivables are written off after they are deemed to be uncollectible after all means of collection have been exhausted. Recoveries of receivables previously written off are recorded when received. The allowance for doubtful accounts consists of the following: | |||||||||||||||||
Thirteen Weeks Ended | Thirty-nine Weeks Ended | ||||||||||||||||
28-Sep-14 | 29-Sep-13 | 28-Sep-14 | 29-Sep-13 | ||||||||||||||
Allowance at beginning of the period | $ | 518,518 | $ | 119,098 | $ | 439,886 | $ | 214,012 | |||||||||
Provision for doubtful accounts | 159,926 | 170,726 | 312,333 | 170,726 | |||||||||||||
Amounts written off | (51,152 | ) | (45,814 | ) | (124,927 | ) | (140,728 | ) | |||||||||
Allowance at end of the period | $ | 627,292 | $ | 244,010 | $ | 627,292 | $ | 244,010 | |||||||||
Deferred Financing Charges | |||||||||||||||||
Deferred financing charges are amortized on a straight-line basis, which approximates the effective interest method, over the term of the respective loans payable. During the thirteen week periods ended September 28, 2014 and September 29, 2013, the Company recognized $40,265 and $76,992 of amortization expense as a component of interest expense related to deferred financing charges, respectively. During the thirty-nine week periods ended September 28, 2014 and September 29, 2013, the Company recognized $133,038 and $160,157 of amortization expense as a component of interest expense related to deferred financing charges, respectively. At September 28, 2014 and December 29, 2013, there were $536,873 and $362,960 of unamortized deferred financing charges, respectively. | |||||||||||||||||
Property and Equipment | |||||||||||||||||
The Company’s policy is to depreciate the cost of property and equipment over the estimated useful lives of the assets using the straight-line method. The cost of leasehold improvements is amortized over their useful lives, or the applicable lease term, if shorter. | |||||||||||||||||
Years | |||||||||||||||||
Leasehold improvements | 5-Jan | ||||||||||||||||
Furniture and fixtures | 7-May | ||||||||||||||||
Computer systems | 5 | ||||||||||||||||
Vehicles | 5 | ||||||||||||||||
Intangible Assets | |||||||||||||||||
The Company holds intangible assets with indefinite and finite lives. Intangible assets with indefinite useful lives are not amortized but are tested at least annually for impairment. Intangible assets with finite useful lives are amortized over their respective estimated useful lives, ranging from three to five years, based on a pattern in which the economic benefit of the respective intangible asset is realized. | |||||||||||||||||
Identifiable intangible assets recognized in conjunction with acquisitions are recorded at fair value. Significant unobservable inputs were used to determine the fair value of the identifiable intangible assets based on the income approach valuation model whereby the present worth and anticipated future benefits of the identifiable intangible assets were discounted back to their net present value. Goodwill represents the difference between the enterprise value/cash paid less the fair value of all recognized asset fair values including the identifiable intangible asset values. | |||||||||||||||||
In May 2014, due to a recent remarketing launch, the Company noticed significant remaining name recognition and distinctiveness in its IT Staffing segment’s trade names and decided to continue their use in operations indefinitely. The trade name assets’ useful lives were changed to indefinite lived intangible assets and were no longer amortized. At September 28, 2014, these trade names have a remaining unamortized value of $2,537,566. For the thirteen and thirty-nine week periods ended September 28, 2014, the decrease in amortization expense associated with this change was $198,500 and $330,833, respectively. For the thirteen week period ended September 28, 2014, the increase in basic and diluted net income per share associated with this change was approximately $0.04 and $0.03 per share, respectively. For the thirty-nine week period ended September 28, 2014, the decrease in basic and diluted net loss per share associated with this change was approximately $0.06 per share. The Company evaluates the recoverability of intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. The Company determined that there were no impairment indicators for these assets in 2014 and 2013. | |||||||||||||||||
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 measured 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. | |||||||||||||||||
In conducting the qualitative assessment, the Company assesses the totality of relevant events and circumstances that affect the fair value or carrying value of the reporting unit. Such events and circumstances may include macroeconomic conditions, industry and competitive environment conditions, overall financial performance, reporting unit specific events and market considerations. The Company may also consider recent valuations of the reporting unit, including the magnitude of the difference between the most recent fair value estimate and the carrying value, as well as both positive and adverse events and circumstances, and the extent to which each of the events and circumstances identified may affect the comparison of a reporting unit’s fair value with its carrying value. | |||||||||||||||||
For reporting units where the qualitative assessment is not used, goodwill is tested for impairment using a two-step process. In the first step, the estimated fair value of a reporting unit is compared to its carrying value. The fair value of the reporting unit is determined based on discounted cash flow projections. If the estimated fair value of a reporting unit exceeds the carrying value of the net assets assigned to a reporting unit, goodwill is not considered impaired and no further testing is required. | |||||||||||||||||
If the carrying value of the net assets assigned to a reporting unit exceeds the estimated fair value of a reporting unit, a second step of the impairment test is performed in order to determine the implied fair value of a reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, goodwill is deemed impaired and is written down to its implied fair value. | |||||||||||||||||
Based on our annual testing, the Company has determined that there was no goodwill impairment during the fiscal year ended December 29, 2013 (“Fiscal 2013”). As of September 28, 2014, the Company has allocated $4,483,937, $1,073,755, and $305,791 of total goodwill to our three separate reporting units: Light Industrial, Multifamily and IT Staffing, respectively. There were no events or changes in circumstances during the thirty-nine week period ended September 28, 2014 that caused the Company to perform an interim impairment assessment. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company provides temporary staffing solutions. The Company and its clients 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. Revenues include reimbursements of travel and out-of-pocket expenses with the equivalent amounts of expense recorded in cost of services. The Company considers revenue to be earned once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable, and collectibility is reasonably assured. | |||||||||||||||||
Income Taxes | |||||||||||||||||
Until November 3, 2013, the Company was treated as a partnership for federal income tax purposes except for B G Staff Services Inc., which are taxed as C corporations. Consequently, federal and state income taxes were not payable, or provided for, by the Company, except for those BG entities that were taxed as C corporations. Accordingly, the financial statements reflect the impact of income taxes for the taxable BG entities. Members were taxed individually on their share of the Company’s earnings, not earned in the C corporations, which were allocated among the members in accordance with the operating agreement of the Parent. | |||||||||||||||||
In connection with the Company’s reorganization (see Note 1), as of November 3, 2013, the Company is treated as a C corporation for federal income tax purposes. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. | |||||||||||||||||
The Company also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts. Management evaluates all positive and negative evidence and uses judgment regarding past and future event, including operating results, to help determine when it is more likely than not that all or some portion of the deferred tax assets may not be realized. When appropriate, a valuation allowance is recorded against deferred tax assets to off set future tax benefits that may not be realized. There was no valuation allowance recorded as of September 28, 2014 or December 29, 2013. | |||||||||||||||||
The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements was the largest benefit that had a greater than 50 percent likelihood of being realized upon settlement with the relevant tax authority. The Company assessed all tax positions for which the statute of limitations remain open. The Company had no unrecognized tax benefits as of September 28, 2014 or September 29, 2013. The Company is open to examination by tax authorities for federal, state or local income taxes for periods beginning after 2010. The Company recognizes any penalties and interest when necessary as part of selling, general and administrative expenses. | |||||||||||||||||
Stock Based Compensation | |||||||||||||||||
On December 20, 2013, the board of directors of BG Staffing, Inc. adopted the 2013 Long-Term Incentive Plan (the “2013 Plan”). Under the 2013 Plan employees and directors may receive incentive stock options and other awards. A total of 900,000 shares of the common stock of BG Staffing, Inc. were initially reserved for issuance pursuant to the 2013 Plan. The Company determines the fair value of options to purchase common stock using the Black-Scholes valuation model. 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. | |||||||||||||||||
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. | |||||||||||||||||
Cash Equivalents | |||||||||||||||||
Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less. | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
The estimated fair value of accounts receivable, accounts payable and accrued liabilities approximate their carrying amounts due to the relatively short period to maturity of these instruments. The estimated fair value of all debt at September 28, 2014 and December 29, 2013 approximated the carrying value as the debt bears market rates of interest. These fair values were estimated based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements, when quoted market prices were not available. The estimates are not necessarily indicative of the amounts that would be realized in a current market exchange. | |||||||||||||||||
Level 1 measurements consist of unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 measurements include quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 3 measurements include significant unobservable inputs. | |||||||||||||||||
In connection with the acquisition of substantially all of the assets and assumption of certain liabilities of InStaff Holding Corporation and InStaff Personnel, LLC (collectively, “InStaff”) on May 28, 2013, the Company granted a put option liability which is carried at fair market value in other long-term liabilities on the consolidated balance sheets. The fair value of the put option was $2,493,452 and $1,312,606 at September 28, 2014 and December 29, 2013, respectively. The put option liability is revalued at each balance sheet date at the greater of an adjusted earning before income taxes, depreciation and amortization (“EBITDA”) method or the fair market value. Changes in fair value are recorded as non-cash, non-operating income in the Company’s consolidated statements of operations. The liability is classified within Level 3 as the lack of an active market during 2013 with only a slight increase in activity during 2014 impacts the calculation of fair market value as an unobservable input used to value the put option. There were no changes in fair value during Fiscal 2013. There were no substantive changes to the valuation techniques and related inputs used to measure fair value during the thirty-nine weeks ended September 28, 2014. | |||||||||||||||||
The fair value is reviewed on a quarterly basis based on the most recent financial performance of the most recent fiscal quarter. An analysis is performed at the end of each fiscal quarter to compare actual results to forecasted financial performance. If performance has deviated from projected levels, the valuation is updated for the latest information available. For the thirteen and thirty-nine week periods ended September 28, 2014, the Company recognized $954,605 and $1,180,846 of expense related to the change in fair value of the put option liability, respectively. | |||||||||||||||||
Earnings Per Share | |||||||||||||||||
Basic earnings per share is calculated using our weighted-average outstanding common shares. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. For the thirteen and thirty-nine week periods ended September 28, 2014, the Company had 138,942 and 519,285 common stock equivalents that were antidilutive, respectively. As a result, these shares were excluded from the calculation of diluted loss per share. | |||||||||||||||||
Pro Forma Loss Per Share | |||||||||||||||||
In connection with the Company’s reorganization in Fiscal 2013 (see Note 1), the pro forma loss per share has been calculated as if the Company were a C corporation for federal income tax purposes. Pro forma loss per share was calculated using the weighted-average number of shares outstanding. The weighted-average shares outstanding used in the calculation of pro forma diluted loss per share includes the dilutive effect of options to purchase common shares using the treasury stock method. The calculation of pro forma loss per share was calculated as follows: | |||||||||||||||||
September 29, 2013 | |||||||||||||||||
Thirteen Weeks Ended | Thirty-nine Weeks Ended | ||||||||||||||||
Income before taxes | $ | 1,441,034 | $ | 1,125,635 | |||||||||||||
Pro forma income tax expense | (599,922 | ) | (519,959 | ) | |||||||||||||
Pro forma net income | $ | 841,112 | $ | 605,676 | |||||||||||||
Shares: | |||||||||||||||||
Basic weighted-average shares | 5,419,642 | 5,419,642 | |||||||||||||||
Dilutive effect of potential common shares | 299,620 | 242,741 | |||||||||||||||
Diluted weighted-average shares | 5,719,262 | 5,662,383 | |||||||||||||||
Pro forma basic earnings per share | $ | 0.16 | $ | 0.11 | |||||||||||||
Pro forma diluted earnings per share | $ | 0.15 | $ | 0.11 | |||||||||||||
For the thirteen and thirty-nine week periods ended September 29, 2013, giving effect to the reorganization and conversion to C corporation status as if they had occurred on the first day of Fiscal 2013, the Company had 63,000 and 63,000 common stock equivalents that were antidilutive, respectively. As a result, the assumed shares under the treasury stock method have been excluded from the calculation of diluted loss per share. | |||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-9, Revenue from Contracts with Customers (ASU 2014-9), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-9 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-9 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. | |||||||||||||||||
The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-9 recognized at the date of adoption (which includes additional footnote disclosures). We are currently evaluating the impact of our pending adoption of ASU 2014-9 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard in 2017. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended | ||||||
Sep. 28, 2014 | |||||||
Business Combinations [Abstract] | ' | ||||||
Acquisitions | ' | ||||||
ACQUISITIONS | |||||||
On May 28, 2013, the Company acquired substantially all of the assets of InStaff for an initial cash consideration paid of $9,000,000 and contingent consideration of $1,000,000 based on the performance of InStaff for the two years following the date of acquisition. The fair value of the contingent consideration at the acquisition date was $800,000 based on a discounted cash flow analysis. The purchase agreement contained a provision for a “true up” of acquired working capital 120 days after the closing date. If actual working capital were greater than the target working capital, the Company would pay additional consideration in the amount of the difference. If actual working capital were less than target working capital, InStaff would pay the Company the amount of the difference. On November 29, 2013, the Company paid an additional of $436,528 for the working capital adjustment. The Company incurred costs of approximately $420,000 related to the acquisition. These costs were expensed as incurred in selling, general and administrative expenses. | |||||||
The consolidated statements of operations include the operating results of InStaff from the date of acquisition. InStaff operations contributed approximately $39.7 million of revenue for the thirty-nine week period ended September 28, 2014. The assets acquired from InStaff were assigned to the Light Industrial segment. The acquisition of InStaff allows the Company to strengthen and expand its operations in the Light Industrial segment. The purchase price has been allocated to the assets acquired and liabilities assumed as of the date of acquisition as follows: | |||||||
Accounts receivable | $ | 4,437,896 | |||||
Property and equipment | 136,993 | ||||||
Prepaid expenses and other current assets | 790,715 | ||||||
Deposits and other assets | 909,756 | ||||||
Intangible assets | 4,729,000 | ||||||
Goodwill | 1,035,032 | ||||||
Liabilities assumed | (1,802,864 | ) | |||||
Total net assets acquired | $ | 10,236,528 | |||||
Cash | $ | 9,436,528 | |||||
Fair value of contingent consideration | 800,000 | ||||||
Total fair value of consideration transferred for acquired business | $ | 10,236,528 | |||||
The allocation of the intangible assets is as follows: | |||||||
Estimated Fair | Estimated | ||||||
Value | Useful Lives | ||||||
Covenants not to compete | $ | 483,000 | 5 years | ||||
Trade name | $ | 1,648,000 | Indefinite | ||||
Customer list | $ | 2,598,000 | 5 years | ||||
Total | $ | 4,729,000 | |||||
The Company estimates that the revenues and net loss for the thirty-nine week period ended September 29, 2013 that would have been reported if the acquisition of InStaff had taken place on the first day of Fiscal 2013 would be as follows (dollars in thousands): | |||||||
Revenues | $ | 128,806 | |||||
Net income | $ | 1,016 | |||||
Loss per share: | |||||||
Basic | $ | 0.19 | |||||
Diluted | $ | 0.18 | |||||
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 9 Months Ended | ||||||||||||
Sep. 28, 2014 | |||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||
Intangible Assets | ' | ||||||||||||
INTANGIBLE ASSETS | |||||||||||||
In May 2014, due to recent remarketing launch, the Company noticed significant remaining name recognition and distinctiveness in its IT Staffing segment’s trade names and decided to continue their use in operations indefinitely. The trade name assets’ useful lives were changed to indefinite lived intangible assets and were no longer amortized. At September 28, 2014, these trade names have a remaining unamortized value of $2,537,566. For the thirteen and thirty-nine week periods ended September 28, 2014, the increase in amortization expense associated with this change was $198,500 and $330,833, respectively. For the thirteen week period ended September 28, 2014, the decrease in basic and diluted net income per share associated with this change was approximately $0.04 and $0.03 per share, respectively. For the thirty-nine week period ended September 28, 2014, the decrease in basic and diluted net loss per share associated with this change was approximately $0.06 per share. Finite and indefinite lived intangible assets consist of the following: | |||||||||||||
September 28, 2014 | |||||||||||||
Gross Value | Accumulated | Net | |||||||||||
Amortization | Carrying | ||||||||||||
Value | |||||||||||||
Finite lives: | |||||||||||||
Customer lists | $ | 25,786,810 | $ | 15,891,576 | $ | 9,895,234 | |||||||
Covenant not to compete | 1,073,000 | 425,134 | 647,866 | ||||||||||
26,859,810 | 16,316,710 | 10,543,100 | |||||||||||
Indefinite lives: | |||||||||||||
Trade names | 5,618,000 | 1,432,434 | 4,185,566 | ||||||||||
Total | $ | 32,477,810 | $ | 17,749,144 | $ | 14,728,666 | |||||||
December 29, 2013 | |||||||||||||
Gross Value | Accumulated | Net | |||||||||||
Amortization | Carrying | ||||||||||||
Value | |||||||||||||
Finite lives: | |||||||||||||
Customer lists | $ | 25,786,810 | $ | 12,862,053 | $ | 12,924,757 | |||||||
Trade names | 3,970,000 | 1,167,767 | 2,802,233 | ||||||||||
Covenant not to compete | 1,073,000 | 264,183 | 808,817 | ||||||||||
30,829,810 | 14,294,003 | 16,535,807 | |||||||||||
Indefinite lives: | |||||||||||||
Trade names | 1,648,000 | — | 1,648,000 | ||||||||||
Total | $ | 32,477,810 | $ | 14,294,003 | $ | 18,183,807 | |||||||
Estimated future amortization expense for the next five years is as follows: | |||||||||||||
Fiscal Year Ending: | |||||||||||||
2014 | $ | 1,004,599 | |||||||||||
2015 | 3,926,815 | ||||||||||||
2016 | 3,497,031 | ||||||||||||
2017 | 2,004,404 | ||||||||||||
2018 | 110,251 | ||||||||||||
Thereafter | — | ||||||||||||
$ | 10,543,100 | ||||||||||||
Total amortization expense for the thirteen week periods ended September 28, 2014 and September 29, 2013 was $1,004,598 and $1,185,558, respectively. Total amortization expense for the thirty-nine week periods ended September 28, 2014 and September 29, 2013 was $3,455,141 and $3,297,781, respectively. |
ACCRUED_EXPENSES
ACCRUED EXPENSES | 9 Months Ended | ||||||||
Sep. 28, 2014 | |||||||||
Accrued Liabilities, Current [Abstract] | ' | ||||||||
Accrued Expenses | ' | ||||||||
ACCRUED EXPENSES | |||||||||
Accrued expenses consist of the following: | |||||||||
28-Sep-14 | 29-Dec-13 | ||||||||
Subcontractor payable | $ | 3,813,168 | $ | 2,367,131 | |||||
Accrued bonuses and commissions | 710,759 | 696,207 | |||||||
Payroll taxes | 2,115,935 | 2,947,134 | |||||||
Other | 1,231,360 | 1,112,403 | |||||||
$ | 7,871,222 | $ | 7,122,875 | ||||||
DEBT
DEBT | 9 Months Ended | ||||||||
Sep. 28, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Debt | ' | ||||||||
DEBT | |||||||||
The Company has a senior credit facility effective May 24, 2010, as amended. On January 29, 2014, the Company entered into an amendment with its lenders under the senior credit facility. The amendment provides for a revolving line of credit (“Revolver”) of $20.0 million, increased the original principal amount of the term loan facility (“Term Loan A”) from $7.1 million to $11.3 million and added $8.0 million of subordinated debt (“Term Loan B”). Borrowings under the Revolver and Term Loan A were partially used to repay the senior subordinated loans (“Subordinated Loans”) and $1.0 million was recorded as a loss on extinguishment of related party debt in the first quarter of 2014. | |||||||||
As of September 28, 2014 and December 29, 2013, $14.6 million and $13.0 million were outstanding on the Revolver, respectively. Borrowings under the Revolver are subject to a borrowing base, bear interest at the 30-day LIBOR plus a margin that ranges from 3.00% to 3.75% (3.5% at September 28, 2014), and are secured by all assets of the Company. On April 28, 2014, the Company executed an amendment to the senior credit facility that temporarily increased the borrowing base amount from 80% to 85% of receivables through August 31, 2014 and made other minor documentation modifications. The additional receivables increased the available borrowings under the Revolver from $2.3 million to $3.7 million at March 30, 2014. The Revolver matures on January 29, 2018. | |||||||||
At December 29, 2013, the Company had Subordinated Loans with two private lenders. The holders of these Subordinated Loans also hold equity interests of the Company, and therefore, are related parties. The Subordinated Loans required an annual mandatory prepayment of principal to be made if specific thresholds were met. The Company made such a mandatory prepayment of approximately $0.5 million in the first quarter of 2013. As noted above, the full amount of the Subordinated Loans was repaid on January 29, 2014 through additional borrowings on the senior credit facility. | |||||||||
Long-term debt consists of the following: | |||||||||
28-Sep-14 | 29-Dec-13 | ||||||||
Term Loan A, payable to a bank in monthly installments of principal and interest with a maturity date of January 29, 2018 and is secured by all assets of the Company. Interest is paid on a monthly basis at an annual interest rate of LIBOR plus a margin of 3.75% to 4.5%, determined by certain thresholds (4.25% at September 28, 2014). | $ | 9,750,000 | $ | 4,756,666 | |||||
Subordinated Loans, payable to private parties that accrued interest monthly at an annual rate of 14%, of which 12% is paid quarterly in cash and 2% is paid in kind. The Subordinated Loans were paid-in-full on January 29, 2014. | — | 14,628,099 | |||||||
Term Loan B, payable to a bank with principal due in a one lump-sum payment along with a compounding deferred fee of 1.5% per annum with a maturity date of January 29, 2018. Interest is paid monthly at an annual rate of 11%. | 8,000,000 | — | |||||||
Total long-term debt | 17,750,000 | 19,384,765 | |||||||
Less current portion | (2,250,000 | ) | (2,378,333 | ) | |||||
Long-term debt non-current portion | $ | 15,500,000 | $ | 17,006,432 | |||||
For all of its borrowings, the Company must comply with certain financial covenants, including a minimum debt service financial covenant and a senior funded indebtedness to EBITDA covenant. As of September 28, 2014, the Company was in compliance with these covenants. | |||||||||
Maturities on the Revolver and long-term debt obligations as of September 28, 2014, are as follows: | |||||||||
Fiscal Year Ending: | |||||||||
2014 | $ | 562,500 | |||||||
2015 | 2,250,000 | ||||||||
2016 | 3,281,250 | ||||||||
2017 | 3,375,000 | ||||||||
2018 | 22,881,250 | ||||||||
Thereafter | — | ||||||||
$ | 32,350,000 | ||||||||
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 28, 2014 | |
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. While uncertainties are inherent in the final outcome of such matters, the Company believes that there are no pending proceedings in which the Company is currently involved that will have a material effect on its financial position, results of operations or cash flow. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 28, 2014 | |
Stockholders' Equity Note [Abstract] | ' |
Equity | ' |
EQUITY | |
Following the Company’s conversion to a corporation (see Note 1), 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 December 19, 2013, the subordinated debt holders exercised their warrants to purchase 179,205 shares for a total of $200. As of September 28, 2014 and December 29, 2013, the Company has 5,608,145 and 5,598,847 shares of common stock outstanding and no shares of preferred stock outstanding. | |
Prior to the merger of the Parent with and into LTN Staffing, LLC, the Company was 100% owned by its Parent, who was the sole member. |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended | ||||||||||||
Sep. 28, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||
Stock-Based Compensation | ' | ||||||||||||
STOCK-BASED COMPENSATION | |||||||||||||
Stock Issued | |||||||||||||
On June 24, 2014, under the 2013 Plan, the board of directors authorized and issued a total of 8,800 shares of restricted stock to all the Company’s employees with a stock price of $7.40 per share. The shares are fully vested and must be held for a period of one year. For the thirteen and thirty-nine week periods ended September 28, 2014, the Company recognized $-0- and $65,120, respectively, of compensation costs related to the stock issuance. | |||||||||||||
Stock Options | |||||||||||||
For the thirteen week periods ended September 28, 2014 and September 29, 2013, the Company recognized $78,859 and $-0- of compensation cost related to stock awards, respectively. For the thirty-nine week periods ended September 28, 2014 and September 29, 2013, the Company recognized $961,747 and $-0- of compensation cost related to stock awards, respectively. Unamortized stock compensation expense as of September 28, 2014 amounted to $733,014 which is expected to be recognized over the next 3.3 years. | |||||||||||||
The following assumptions were used to estimate the fair value of share options granted for the thirty-nine week periods ended: | |||||||||||||
28-Sep-14 | 29-Sep-13 | ||||||||||||
Weighted-average fair value of options | $ | 2.84 | $ | — | |||||||||
Weighted-average risk-free interest rate | 1 | % | — | % | |||||||||
Dividend yield | — | % | — | % | |||||||||
Weighted-average volatility factor | 49 | % | — | % | |||||||||
Weighted-average expected life | 5.6 | yrs | 0 | yrs | |||||||||
A summary of stock option activity is presented as follows: | |||||||||||||
Number of | |||||||||||||
Shares | |||||||||||||
Options outstanding at December 29, 2013 | — | ||||||||||||
Granted | 596,363 | ||||||||||||
Exercised | (5,000 | ) | |||||||||||
Options outstanding at September 28, 2014 | 591,363 | ||||||||||||
Options exercisable at September 28, 2014 | 303,263 | ||||||||||||
Weighted-average exercise price at September 28, 2014 | $ | 6.51 | |||||||||||
Warrant Activity | |||||||||||||
For the thirteen week periods ended September 28, 2014 and September 29, 2013, the Company recognized $12,624 and $-0- of compensation cost related to warrants. For the thirty-nine week periods ended September 28, 2014 and September 29, 2013, the Company recognized $91,262 and $-0- of compensation cost related to warrants, respectively. Unamortized stock compensation expense as of September 28, 2014 amounted to $25,671 which is expected to be recognized over the next 0.4 years. | |||||||||||||
The following assumptions were used to estimate the fair value of warrants for the thirty-nine week periods ended: | |||||||||||||
28-Sep-14 | 29-Sep-13 | ||||||||||||
Weighted-average fair value of warrants | $ | 1.76 | $ | — | |||||||||
Weighted-average risk-free interest rate | 0.1 | % | — | % | |||||||||
Dividend yield | — | % | — | % | |||||||||
Weighted-average volatility factor | 49 | % | — | % | |||||||||
Weighted-average expected life | 2.4 | yrs | 0 | yrs | |||||||||
A summary of warrant activity is presented as follows: | |||||||||||||
Number of | |||||||||||||
Shares | |||||||||||||
Warrants outstanding at December 29, 2013 | 182,632 | ||||||||||||
Granted | 66,573 | ||||||||||||
Exercised | (799 | ) | |||||||||||
Warrants outstanding at September 28, 2014 | 248,406 | ||||||||||||
Warrants exercisable at September 28, 2014 | 223,406 | ||||||||||||
Weighted-average exercise price at September 28, 2014 | $ | 7.38 | |||||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 28, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
RELATED PARTY TRANSACTIONS | |
Through ownership of the Parent (prior to the reorganization of the Company) and through ownership of the common stock of BG Staffing, Inc., the Company is affiliated with multiple investors. Two of these investors are private lenders that also held the Subordinated Loans of $14,628,099 at December 29, 2013 (see Note 6), which were repaid on January 29, 2014 and $986,835 was recorded as a loss on extinguishment of related party debt. Interest payments totaling $-0- and $354,897 were made to these investors during the thirteen week periods ended September 28, 2014 and September 29, 2013, respectively. Interest payments totaling $471,990 and $739,325 were made to these investors during the thirty-nine week periods ended September 28, 2014 and September 29, 2013, respectively. Accrued interest of $-0- and $550,655 was due to these investors as of September 28, 2014 and December 29, 2013, respectively. | |
Until November 3, 2013, the Company was under a Management Services Agreement with a firm associated with one of the investors. The Company paid $-0- and $43,750 in management fees during the thirteen week periods ended September 28, 2014 and September 29, 2013, respectively. The Company paid $-0- and $131,250 in management fees during the thirty-nine week periods ended September 28, 2014 and September 29, 2013, respectively. |
CONCENTRATION_OF_CREDIT_RISK
CONCENTRATION OF CREDIT RISK | 9 Months Ended |
Sep. 28, 2014 | |
Risks and Uncertainties [Abstract] | ' |
Concentration Of Risk Disclosure | ' |
CONCENTRATION OF CREDIT RISK | |
Concentration of credit risk is limited due to the Company’s diverse customer base. No single customer accounted for more than 10% of the Company’s revenue or accounts receivable for the thirty-nine week periods ended September 28, 2014 and September 29, 2013. |
EMPLOYEE_BENEFIT_PLAN
EMPLOYEE BENEFIT PLAN | 9 Months Ended |
Sep. 28, 2014 | |
Compensation and Retirement Disclosure [Abstract] | ' |
Employee Benefit Plan | ' |
EMPLOYEE BENEFIT PLAN | |
The Company provides a defined contribution plan (the “401(k) Plan”) for the benefit of its eligible full-time employees. The 401(k) Plan allows employees to make contributions subject to applicable statutory limitations. The Company matches employee contributions 100% up to the first 3% and 50% of the next 2% of an employee’s compensation. The Company contributed $60,111 and $39,299 to the 401(k) Plan in the thirteen week periods ended September 28, 2014 and September 29, 2013, respectively. The Company contributed $159,518 and $112,233 to the 401(k) Plan in the thirty-nine week periods ended September 28, 2014 and September 29, 2013, respectively. |
BUSINESS_SEGMENTS
BUSINESS SEGMENTS | 9 Months Ended | ||||||||||||||||
Sep. 28, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Business Segments | ' | ||||||||||||||||
BUSINESS SEGMENTS | |||||||||||||||||
The Company operates within three industry segments: Light Industrial, Multifamily and IT Staffing. The Light Industrial segment provides temporary workers primarily to distribution and logistics customers needing a flexible workforce in Illinois, Wisconsin, Texas, Tennessee, and Mississippi. The Multifamily segment provides front office and maintenance personnel on a temporary basis to various apartment communities, in Texas and other states, via property management companies responsible for the apartment communities day to day operations. The IT Staffing segment provides skilled contract labor on a nationwide basis for IT implementations and maintenance projects. The Company provides services to customers primarily within the United States of America. | |||||||||||||||||
Segment profit (loss) includes all revenue and cost of services, direct selling expenses, depreciation and amortization expense, and income tax benefit (expense) and excludes all general and administrative (corporate) expenses. Assets of corporate include cash, unallocated prepaid expenses, deferred tax assets, and other assets. | |||||||||||||||||
Thirteen Weeks Ended | Thirty-nine Weeks Ended | ||||||||||||||||
28-Sep-14 | 29-Sep-13 | 28-Sep-14 | 29-Sep-13 | ||||||||||||||
Revenue: | |||||||||||||||||
Light Industrial | $ | 21,419,076 | $ | 24,457,244 | $ | 59,853,064 | $ | 47,528,077 | |||||||||
Multifamily | 11,602,845 | 7,892,330 | 25,967,611 | 17,548,439 | |||||||||||||
IT Staffing | 14,985,689 | 15,516,360 | 44,054,511 | 42,805,720 | |||||||||||||
Total | $ | 48,007,610 | $ | 47,865,934 | $ | 129,875,186 | $ | 107,882,236 | |||||||||
Net income (loss): | |||||||||||||||||
Light Industrial | $ | 421,476 | $ | 1,424,651 | $ | 2,215,960 | $ | 2,277,685 | |||||||||
Multifamily | 1,713,839 | 1,111,578 | 3,165,179 | 2,482,253 | |||||||||||||
IT Staffing | 866,704 | 768,217 | 1,812,639 | 1,534,792 | |||||||||||||
Corporate | (2,002,619 | ) | (755,451 | ) | (6,044,269 | ) | (2,562,388 | ) | |||||||||
Interest expense, net | (634,238 | ) | (1,131,102 | ) | (2,067,909 | ) | (2,635,657 | ) | |||||||||
Total | $ | 365,162 | $ | 1,417,893 | $ | (918,400 | ) | $ | 1,096,685 | ||||||||
Depreciation: | |||||||||||||||||
Light Industrial | $ | 19,756 | $ | 17,145 | $ | 55,364 | $ | 43,179 | |||||||||
Multifamily | 6,495 | 6,393 | 18,245 | 15,004 | |||||||||||||
IT Staffing | 7,731 | 3,050 | 16,115 | 7,045 | |||||||||||||
Corporate | 14,724 | 6,685 | 41,612 | 19,488 | |||||||||||||
Total | $ | 48,706 | $ | 33,273 | $ | 131,336 | $ | 84,716 | |||||||||
Amortization: | |||||||||||||||||
Light Industrial | $ | 197,189 | $ | 179,650 | $ | 768,249 | $ | 266,617 | |||||||||
Multifamily | 24,887 | 24,887 | 74,662 | 83,829 | |||||||||||||
IT Staffing | 769,701 | 968,200 | 2,573,768 | 2,904,150 | |||||||||||||
Corporate | 12,821 | 12,821 | 38,462 | 43,185 | |||||||||||||
Total | $ | 1,004,598 | $ | 1,185,558 | $ | 3,455,141 | $ | 3,297,781 | |||||||||
Capital Expenditures: | |||||||||||||||||
Light Industrial | $ | 64,826 | $ | 7,121 | $ | 64,826 | $ | 7,121 | |||||||||
Multifamily | 19,274 | 14,737 | 19,274 | 36,769 | |||||||||||||
IT Staffing | 83,501 | 1,485 | 83,501 | 40,255 | |||||||||||||
Corporate | 93,929 | 42,603 | 93,929 | 67,491 | |||||||||||||
Total | $ | 261,530 | $ | 65,946 | $ | 261,530 | $ | 151,636 | |||||||||
28-Sep-14 | 29-Dec-13 | ||||||||||||||||
Total Assets: | |||||||||||||||||
Light Industrial | $ | 20,327,796 | $ | 21,187,881 | |||||||||||||
Multifamily | 7,623,796 | 5,806,948 | |||||||||||||||
IT Staffing | 22,589,412 | 23,644,464 | |||||||||||||||
Corporate | 8,955,804 | 7,983,208 | |||||||||||||||
Total | $ | 59,496,808 | $ | 58,622,501 | |||||||||||||
PRO_FORMA_C_CORPORATION_DATA
PRO FORMA C CORPORATION DATA | 9 Months Ended |
Sep. 28, 2014 | |
Pro Forma C Corporation Data [Abstract] | ' |
Pro Forma C Corporation Data | ' |
PRO FORMA C CORPORATION DATA | |
In connection with the BG Staffing, Inc.’s filing of a registration statement with the SEC to register the resale of common stock of BG Staffing, Inc., the Company reorganized. The reorganization was completed with a merger of the Parent with and into LTN Staffing, LLC, with LTN Staffing, LLC continuing as the surviving entity. Immediately following this merger, LTN Staffing, LLC converted to a corporation for state law purposes and to a C corporation for federal income tax purposes. Upon conversion, the Company established a net current deferred tax assets of $431,032 and net long-term deferred tax assets of $7,045,837. The pro forma C corporation data for the thirteen and thirty-nine week periods ended September 29, 2013, are based on the historical consolidated statements of operations and give effect to pro forma taxes as if the Company were a C corporation for the entire duration of the period presented. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | ||||||||||||||||
Sep. 28, 2014 | |||||||||||||||||
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 Year | |||||||||||||||||
The Company has a 52/53 week fiscal year. Fiscal periods for the consolidated financial statements included herein are as of September 28, 2014 and December 29, 2013, and include the thirteen and thirty-nine week periods ended September 28, 2014 and September 29, 2013. | |||||||||||||||||
Reclassifications | ' | ||||||||||||||||
Reclassifications | |||||||||||||||||
Certain reclassifications have been made to the 2013 financial statements to conform with the 2014 presentation. | |||||||||||||||||
Accounts Receivable | ' | ||||||||||||||||
Accounts Receivable | |||||||||||||||||
The Company extends credit to its customers in the normal course of business. Accounts receivable represents unpaid balances due from customers. The Company maintains an allowance for doubtful accounts for estimated losses resulting from customers’ non-payment of balances due to the Company. The Company’s determination of the allowance for uncollectible amounts is based on management’s judgments and assumptions, including general economic conditions, portfolio composition, prior loss experience, evaluation of credit risk related to certain individual customers and the Company’s ongoing examination process. Receivables are written off after they are deemed to be uncollectible after all means of collection have been exhausted. Recoveries of receivables previously written off are recorded when received. The allowance for doubtful accounts consists of the following: | |||||||||||||||||
Thirteen Weeks Ended | Thirty-nine Weeks Ended | ||||||||||||||||
28-Sep-14 | 29-Sep-13 | 28-Sep-14 | 29-Sep-13 | ||||||||||||||
Allowance at beginning of the period | $ | 518,518 | $ | 119,098 | $ | 439,886 | $ | 214,012 | |||||||||
Provision for doubtful accounts | 159,926 | 170,726 | 312,333 | 170,726 | |||||||||||||
Amounts written off | (51,152 | ) | (45,814 | ) | (124,927 | ) | (140,728 | ) | |||||||||
Allowance at end of the period | $ | 627,292 | $ | 244,010 | $ | 627,292 | $ | 244,010 | |||||||||
Deferred Financing Charges | ' | ||||||||||||||||
Deferred Financing Charges | |||||||||||||||||
Deferred financing charges are amortized on a straight-line basis, which approximates the effective interest method, over the term of the respective loans payable. During the thirteen week periods ended September 28, 2014 and September 29, 2013, the Company recognized $40,265 and $76,992 of amortization expense as a component of interest expense related to deferred financing charges, respectively. During the thirty-nine week periods ended September 28, 2014 and September 29, 2013, the Company recognized $133,038 and $160,157 of amortization expense as a component of interest expense related to deferred financing charges, respectively. At September 28, 2014 and December 29, 2013, there were $536,873 and $362,960 of unamortized deferred financing charges, respectively. | |||||||||||||||||
Property and Equipment | ' | ||||||||||||||||
Property and Equipment | |||||||||||||||||
The Company’s policy is to depreciate the cost of property and equipment over the estimated useful lives of the assets using the straight-line method. The cost of leasehold improvements is amortized over their useful lives, or the applicable lease term, if shorter. | |||||||||||||||||
Years | |||||||||||||||||
Leasehold improvements | 5-Jan | ||||||||||||||||
Furniture and fixtures | 7-May | ||||||||||||||||
Computer systems | 5 | ||||||||||||||||
Vehicles | 5 | ||||||||||||||||
Intangible Assets | ' | ||||||||||||||||
Intangible Assets | |||||||||||||||||
The Company holds intangible assets with indefinite and finite lives. Intangible assets with indefinite useful lives are not amortized but are tested at least annually for impairment. Intangible assets with finite useful lives are amortized over their respective estimated useful lives, ranging from three to five years, based on a pattern in which the economic benefit of the respective intangible asset is realized. | |||||||||||||||||
Identifiable intangible assets recognized in conjunction with acquisitions are recorded at fair value. Significant unobservable inputs were used to determine the fair value of the identifiable intangible assets based on the income approach valuation model whereby the present worth and anticipated future benefits of the identifiable intangible assets were discounted back to their net present value. Goodwill represents the difference between the enterprise value/cash paid less the fair value of all recognized asset fair values including the identifiable intangible asset values. | |||||||||||||||||
In May 2014, due to a recent remarketing launch, the Company noticed significant remaining name recognition and distinctiveness in its IT Staffing segment’s trade names and decided to continue their use in operations indefinitely. The trade name assets’ useful lives were changed to indefinite lived intangible assets and were no longer amortized. At September 28, 2014, these trade names have a remaining unamortized value of $2,537,566. For the thirteen and thirty-nine week periods ended September 28, 2014, the decrease in amortization expense associated with this change was $198,500 and $330,833, respectively. For the thirteen week period ended September 28, 2014, the increase in basic and diluted net income per share associated with this change was approximately $0.04 and $0.03 per share, respectively. For the thirty-nine week period ended September 28, 2014, the decrease in basic and diluted net loss per share associated with this change was approximately $0.06 per share. The Company evaluates the recoverability of intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. The Company determined that there were no impairment indicators for these assets in 2014 and 2013. | |||||||||||||||||
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 measured 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. | |||||||||||||||||
In conducting the qualitative assessment, the Company assesses the totality of relevant events and circumstances that affect the fair value or carrying value of the reporting unit. Such events and circumstances may include macroeconomic conditions, industry and competitive environment conditions, overall financial performance, reporting unit specific events and market considerations. The Company may also consider recent valuations of the reporting unit, including the magnitude of the difference between the most recent fair value estimate and the carrying value, as well as both positive and adverse events and circumstances, and the extent to which each of the events and circumstances identified may affect the comparison of a reporting unit’s fair value with its carrying value. | |||||||||||||||||
For reporting units where the qualitative assessment is not used, goodwill is tested for impairment using a two-step process. In the first step, the estimated fair value of a reporting unit is compared to its carrying value. The fair value of the reporting unit is determined based on discounted cash flow projections. If the estimated fair value of a reporting unit exceeds the carrying value of the net assets assigned to a reporting unit, goodwill is not considered impaired and no further testing is required. | |||||||||||||||||
If the carrying value of the net assets assigned to a reporting unit exceeds the estimated fair value of a reporting unit, a second step of the impairment test is performed in order to determine the implied fair value of a reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, goodwill is deemed impaired and is written down to its implied fair value. | |||||||||||||||||
Based on our annual testing, the Company has determined that there was no goodwill impairment during the fiscal year ended December 29, 2013 (“Fiscal 2013”). As of September 28, 2014, the Company has allocated $4,483,937, $1,073,755, and $305,791 of total goodwill to our three separate reporting units: Light Industrial, Multifamily and IT Staffing, respectively. There were no events or changes in circumstances during the thirty-nine week period ended September 28, 2014 that caused the Company to perform an interim impairment assessment. | |||||||||||||||||
Revenue Recognition | ' | ||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company provides temporary staffing solutions. The Company and its clients 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. Revenues include reimbursements of travel and out-of-pocket expenses with the equivalent amounts of expense recorded in cost of services. The Company considers revenue to be earned once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable, and collectibility is reasonably assured. | |||||||||||||||||
Income Taxes | ' | ||||||||||||||||
Income Taxes | |||||||||||||||||
Until November 3, 2013, the Company was treated as a partnership for federal income tax purposes except for B G Staff Services Inc., which are taxed as C corporations. Consequently, federal and state income taxes were not payable, or provided for, by the Company, except for those BG entities that were taxed as C corporations. Accordingly, the financial statements reflect the impact of income taxes for the taxable BG entities. Members were taxed individually on their share of the Company’s earnings, not earned in the C corporations, which were allocated among the members in accordance with the operating agreement of the Parent. | |||||||||||||||||
In connection with the Company’s reorganization (see Note 1), as of November 3, 2013, the Company is treated as a C corporation for federal income tax purposes. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. | |||||||||||||||||
The Company also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts. Management evaluates all positive and negative evidence and uses judgment regarding past and future event, including operating results, to help determine when it is more likely than not that all or some portion of the deferred tax assets may not be realized. When appropriate, a valuation allowance is recorded against deferred tax assets to off set future tax benefits that may not be realized. There was no valuation allowance recorded as of September 28, 2014 or December 29, 2013. | |||||||||||||||||
The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements was the largest benefit that had a greater than 50 percent likelihood of being realized upon settlement with the relevant tax authority. The Company assessed all tax positions for which the statute of limitations remain open. The Company had no unrecognized tax benefits as of September 28, 2014 or September 29, 2013. The Company is open to examination by tax authorities for federal, state or local income taxes for periods beginning after 2010. The Company recognizes any penalties and interest when necessary as part of selling, general and administrative expenses. | |||||||||||||||||
Share-based Compensation | ' | ||||||||||||||||
Stock Based Compensation | |||||||||||||||||
On December 20, 2013, the board of directors of BG Staffing, Inc. adopted the 2013 Long-Term Incentive Plan (the “2013 Plan”). Under the 2013 Plan employees and directors may receive incentive stock options and other awards. A total of 900,000 shares of the common stock of BG Staffing, Inc. were initially reserved for issuance pursuant to the 2013 Plan. The Company determines the fair value of options to purchase common stock using the Black-Scholes valuation model. 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. | |||||||||||||||||
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. | |||||||||||||||||
Cash Equivalents | ' | ||||||||||||||||
Cash Equivalents | |||||||||||||||||
Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less. | |||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
Fair Value Measurements | |||||||||||||||||
The estimated fair value of accounts receivable, accounts payable and accrued liabilities approximate their carrying amounts due to the relatively short period to maturity of these instruments. The estimated fair value of all debt at September 28, 2014 and December 29, 2013 approximated the carrying value as the debt bears market rates of interest. These fair values were estimated based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements, when quoted market prices were not available. The estimates are not necessarily indicative of the amounts that would be realized in a current market exchange. | |||||||||||||||||
Level 1 measurements consist of unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 measurements include quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 3 measurements include significant unobservable inputs. | |||||||||||||||||
In connection with the acquisition of substantially all of the assets and assumption of certain liabilities of InStaff Holding Corporation and InStaff Personnel, LLC (collectively, “InStaff”) on May 28, 2013, the Company granted a put option liability which is carried at fair market value in other long-term liabilities on the consolidated balance sheets. The fair value of the put option was $2,493,452 and $1,312,606 at September 28, 2014 and December 29, 2013, respectively. The put option liability is revalued at each balance sheet date at the greater of an adjusted earning before income taxes, depreciation and amortization (“EBITDA”) method or the fair market value. Changes in fair value are recorded as non-cash, non-operating income in the Company’s consolidated statements of operations. The liability is classified within Level 3 as the lack of an active market during 2013 with only a slight increase in activity during 2014 impacts the calculation of fair market value as an unobservable input used to value the put option. There were no changes in fair value during Fiscal 2013. There were no substantive changes to the valuation techniques and related inputs used to measure fair value during the thirty-nine weeks ended September 28, 2014. | |||||||||||||||||
The fair value is reviewed on a quarterly basis based on the most recent financial performance of the most recent fiscal quarter. An analysis is performed at the end of each fiscal quarter to compare actual results to forecasted financial performance. If performance has deviated from projected levels, the valuation is updated for the latest information available. For the thirteen and thirty-nine week periods ended September 28, 2014, the Company recognized $954,605 and $1,180,846 of expense related to the change in fair value of the put option liability, respectively. | |||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||
Earnings Per Share | |||||||||||||||||
Basic earnings per share is calculated using our weighted-average outstanding common shares. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. For the thirteen and thirty-nine week periods ended September 28, 2014, the Company had 138,942 and 519,285 common stock equivalents that were antidilutive, respectively. As a result, these shares were excluded from the calculation of diluted loss per share. | |||||||||||||||||
Pro Forma Loss Per Share | ' | ||||||||||||||||
Pro Forma Loss Per Share | |||||||||||||||||
In connection with the Company’s reorganization in Fiscal 2013 (see Note 1), the pro forma loss per share has been calculated as if the Company were a C corporation for federal income tax purposes. Pro forma loss per share was calculated using the weighted-average number of shares outstanding. The weighted-average shares outstanding used in the calculation of pro forma diluted loss per share includes the dilutive effect of options to purchase common shares using the treasury stock method. The calculation of pro forma loss per share was calculated as follows: | |||||||||||||||||
September 29, 2013 | |||||||||||||||||
Thirteen Weeks Ended | Thirty-nine Weeks Ended | ||||||||||||||||
Income before taxes | $ | 1,441,034 | $ | 1,125,635 | |||||||||||||
Pro forma income tax expense | (599,922 | ) | (519,959 | ) | |||||||||||||
Pro forma net income | $ | 841,112 | $ | 605,676 | |||||||||||||
Shares: | |||||||||||||||||
Basic weighted-average shares | 5,419,642 | 5,419,642 | |||||||||||||||
Dilutive effect of potential common shares | 299,620 | 242,741 | |||||||||||||||
Diluted weighted-average shares | 5,719,262 | 5,662,383 | |||||||||||||||
Pro forma basic earnings per share | $ | 0.16 | $ | 0.11 | |||||||||||||
Pro forma diluted earnings per share | $ | 0.15 | $ | 0.11 | |||||||||||||
For the thirteen and thirty-nine week periods ended September 29, 2013, giving effect to the reorganization and conversion to C corporation status as if they had occurred on the first day of Fiscal 2013, the Company had 63,000 and 63,000 common stock equivalents that were antidilutive, respectively. As a result, the assumed shares under the treasury stock method have been excluded from the calculation of diluted loss per share. | |||||||||||||||||
Recent Accounting Pronouncements | ' | ||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-9, Revenue from Contracts with Customers (ASU 2014-9), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-9 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-9 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. | |||||||||||||||||
The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-9 recognized at the date of adoption (which includes additional footnote disclosures). We are currently evaluating the impact of our pending adoption of ASU 2014-9 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard in 2017. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 28, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Summary of Valuation Allowance | ' | ||||||||||||||||
The allowance for doubtful accounts consists of the following: | |||||||||||||||||
Thirteen Weeks Ended | Thirty-nine Weeks Ended | ||||||||||||||||
28-Sep-14 | 29-Sep-13 | 28-Sep-14 | 29-Sep-13 | ||||||||||||||
Allowance at beginning of the period | $ | 518,518 | $ | 119,098 | $ | 439,886 | $ | 214,012 | |||||||||
Provision for doubtful accounts | 159,926 | 170,726 | 312,333 | 170,726 | |||||||||||||
Amounts written off | (51,152 | ) | (45,814 | ) | (124,927 | ) | (140,728 | ) | |||||||||
Allowance at end of the period | $ | 627,292 | $ | 244,010 | $ | 627,292 | $ | 244,010 | |||||||||
Property and Equipment, Estimated Useful Lives | ' | ||||||||||||||||
The cost of leasehold improvements is amortized over their useful lives, or the applicable lease term, if shorter. | |||||||||||||||||
Years | |||||||||||||||||
Leasehold improvements | 5-Jan | ||||||||||||||||
Furniture and fixtures | 7-May | ||||||||||||||||
Computer systems | 5 | ||||||||||||||||
Vehicles | 5 | ||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | ' | ||||||||||||||||
The calculation of pro forma loss per share was calculated as follows: | |||||||||||||||||
September 29, 2013 | |||||||||||||||||
Thirteen Weeks Ended | Thirty-nine Weeks Ended | ||||||||||||||||
Income before taxes | $ | 1,441,034 | $ | 1,125,635 | |||||||||||||
Pro forma income tax expense | (599,922 | ) | (519,959 | ) | |||||||||||||
Pro forma net income | $ | 841,112 | $ | 605,676 | |||||||||||||
Shares: | |||||||||||||||||
Basic weighted-average shares | 5,419,642 | 5,419,642 | |||||||||||||||
Dilutive effect of potential common shares | 299,620 | 242,741 | |||||||||||||||
Diluted weighted-average shares | 5,719,262 | 5,662,383 | |||||||||||||||
Pro forma basic earnings per share | $ | 0.16 | $ | 0.11 | |||||||||||||
Pro forma diluted earnings per share | $ | 0.15 | $ | 0.11 | |||||||||||||
ACQUISITIONS_Tables
ACQUISITIONS (Tables) | 9 Months Ended | ||||||
Sep. 28, 2014 | |||||||
Business Combinations [Abstract] | ' | ||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | ' | ||||||
The purchase price has been allocated to the assets acquired and liabilities assumed as of the date of acquisition as follows: | |||||||
Accounts receivable | $ | 4,437,896 | |||||
Property and equipment | 136,993 | ||||||
Prepaid expenses and other current assets | 790,715 | ||||||
Deposits and other assets | 909,756 | ||||||
Intangible assets | 4,729,000 | ||||||
Goodwill | 1,035,032 | ||||||
Liabilities assumed | (1,802,864 | ) | |||||
Total net assets acquired | $ | 10,236,528 | |||||
Cash | $ | 9,436,528 | |||||
Fair value of contingent consideration | 800,000 | ||||||
Total fair value of consideration transferred for acquired business | $ | 10,236,528 | |||||
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | ' | ||||||
The allocation of the intangible assets is as follows: | |||||||
Estimated Fair | Estimated | ||||||
Value | Useful Lives | ||||||
Covenants not to compete | $ | 483,000 | 5 years | ||||
Trade name | $ | 1,648,000 | Indefinite | ||||
Customer list | $ | 2,598,000 | 5 years | ||||
Total | $ | 4,729,000 | |||||
Business Acquisition, Pro Forma Information | ' | ||||||
The Company estimates that the revenues and net loss for the thirty-nine week period ended September 29, 2013 that would have been reported if the acquisition of InStaff had taken place on the first day of Fiscal 2013 would be as follows (dollars in thousands): | |||||||
Revenues | $ | 128,806 | |||||
Net income | $ | 1,016 | |||||
Loss per share: | |||||||
Basic | $ | 0.19 | |||||
Diluted | $ | 0.18 | |||||
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 9 Months Ended | ||||||||||||
Sep. 28, 2014 | |||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||
Schedule of Finite-Lived Intangible Assets | ' | ||||||||||||
Finite and indefinite lived intangible assets consist of the following: | |||||||||||||
September 28, 2014 | |||||||||||||
Gross Value | Accumulated | Net | |||||||||||
Amortization | Carrying | ||||||||||||
Value | |||||||||||||
Finite lives: | |||||||||||||
Customer lists | $ | 25,786,810 | $ | 15,891,576 | $ | 9,895,234 | |||||||
Covenant not to compete | 1,073,000 | 425,134 | 647,866 | ||||||||||
26,859,810 | 16,316,710 | 10,543,100 | |||||||||||
Indefinite lives: | |||||||||||||
Trade names | 5,618,000 | 1,432,434 | 4,185,566 | ||||||||||
Total | $ | 32,477,810 | $ | 17,749,144 | $ | 14,728,666 | |||||||
December 29, 2013 | |||||||||||||
Gross Value | Accumulated | Net | |||||||||||
Amortization | Carrying | ||||||||||||
Value | |||||||||||||
Finite lives: | |||||||||||||
Customer lists | $ | 25,786,810 | $ | 12,862,053 | $ | 12,924,757 | |||||||
Trade names | 3,970,000 | 1,167,767 | 2,802,233 | ||||||||||
Covenant not to compete | 1,073,000 | 264,183 | 808,817 | ||||||||||
30,829,810 | 14,294,003 | 16,535,807 | |||||||||||
Indefinite lives: | |||||||||||||
Trade names | 1,648,000 | — | 1,648,000 | ||||||||||
Total | $ | 32,477,810 | $ | 14,294,003 | $ | 18,183,807 | |||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | ' | ||||||||||||
Estimated future amortization expense for the next five years is as follows: | |||||||||||||
Fiscal Year Ending: | |||||||||||||
2014 | $ | 1,004,599 | |||||||||||
2015 | 3,926,815 | ||||||||||||
2016 | 3,497,031 | ||||||||||||
2017 | 2,004,404 | ||||||||||||
2018 | 110,251 | ||||||||||||
Thereafter | — | ||||||||||||
$ | 10,543,100 | ||||||||||||
ACCRUED_EXPENSES_Tables
ACCRUED EXPENSES (Tables) | 9 Months Ended | ||||||||
Sep. 28, 2014 | |||||||||
Accrued Liabilities, Current [Abstract] | ' | ||||||||
Schedule of Accrued Expenses | ' | ||||||||
Accrued expenses consist of the following: | |||||||||
28-Sep-14 | 29-Dec-13 | ||||||||
Subcontractor payable | $ | 3,813,168 | $ | 2,367,131 | |||||
Accrued bonuses and commissions | 710,759 | 696,207 | |||||||
Payroll taxes | 2,115,935 | 2,947,134 | |||||||
Other | 1,231,360 | 1,112,403 | |||||||
$ | 7,871,222 | $ | 7,122,875 | ||||||
DEBT_Tables
DEBT (Tables) | 9 Months Ended | ||||||||
Sep. 28, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Schedule of Long-term Debt Instruments | ' | ||||||||
Long-term debt consists of the following: | |||||||||
28-Sep-14 | 29-Dec-13 | ||||||||
Term Loan A, payable to a bank in monthly installments of principal and interest with a maturity date of January 29, 2018 and is secured by all assets of the Company. Interest is paid on a monthly basis at an annual interest rate of LIBOR plus a margin of 3.75% to 4.5%, determined by certain thresholds (4.25% at September 28, 2014). | $ | 9,750,000 | $ | 4,756,666 | |||||
Subordinated Loans, payable to private parties that accrued interest monthly at an annual rate of 14%, of which 12% is paid quarterly in cash and 2% is paid in kind. The Subordinated Loans were paid-in-full on January 29, 2014. | — | 14,628,099 | |||||||
Term Loan B, payable to a bank with principal due in a one lump-sum payment along with a compounding deferred fee of 1.5% per annum with a maturity date of January 29, 2018. Interest is paid monthly at an annual rate of 11%. | 8,000,000 | — | |||||||
Total long-term debt | 17,750,000 | 19,384,765 | |||||||
Less current portion | (2,250,000 | ) | (2,378,333 | ) | |||||
Long-term debt non-current portion | $ | 15,500,000 | $ | 17,006,432 | |||||
Schedule of Maturities of Long-term Debt | ' | ||||||||
Maturities on the Revolver and long-term debt obligations as of September 28, 2014, are as follows: | |||||||||
Fiscal Year Ending: | |||||||||
2014 | $ | 562,500 | |||||||
2015 | 2,250,000 | ||||||||
2016 | 3,281,250 | ||||||||
2017 | 3,375,000 | ||||||||
2018 | 22,881,250 | ||||||||
Thereafter | — | ||||||||
$ | 32,350,000 | ||||||||
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended | ||||||||||||
Sep. 28, 2014 | |||||||||||||
Employee Stock Option | ' | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | ' | ||||||||||||
The following assumptions were used to estimate the fair value of share options granted for the thirty-nine week periods ended: | |||||||||||||
28-Sep-14 | 29-Sep-13 | ||||||||||||
Weighted-average fair value of options | $ | 2.84 | $ | — | |||||||||
Weighted-average risk-free interest rate | 1 | % | — | % | |||||||||
Dividend yield | — | % | — | % | |||||||||
Weighted-average volatility factor | 49 | % | — | % | |||||||||
Weighted-average expected life | 5.6 | yrs | 0 | yrs | |||||||||
Schedule of Share-based Compensation, Activity | ' | ||||||||||||
A summary of stock option activity is presented as follows: | |||||||||||||
Number of | |||||||||||||
Shares | |||||||||||||
Options outstanding at December 29, 2013 | — | ||||||||||||
Granted | 596,363 | ||||||||||||
Exercised | (5,000 | ) | |||||||||||
Options outstanding at September 28, 2014 | 591,363 | ||||||||||||
Options exercisable at September 28, 2014 | 303,263 | ||||||||||||
Weighted-average exercise price at September 28, 2014 | $ | 6.51 | |||||||||||
Warrant | ' | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | ' | ||||||||||||
The following assumptions were used to estimate the fair value of warrants for the thirty-nine week periods ended: | |||||||||||||
28-Sep-14 | 29-Sep-13 | ||||||||||||
Weighted-average fair value of warrants | $ | 1.76 | $ | — | |||||||||
Weighted-average risk-free interest rate | 0.1 | % | — | % | |||||||||
Dividend yield | — | % | — | % | |||||||||
Weighted-average volatility factor | 49 | % | — | % | |||||||||
Weighted-average expected life | 2.4 | yrs | 0 | yrs | |||||||||
Schedule of Share-based Compensation, Activity | ' | ||||||||||||
A summary of warrant activity is presented as follows: | |||||||||||||
Number of | |||||||||||||
Shares | |||||||||||||
Warrants outstanding at December 29, 2013 | 182,632 | ||||||||||||
Granted | 66,573 | ||||||||||||
Exercised | (799 | ) | |||||||||||
Warrants outstanding at September 28, 2014 | 248,406 | ||||||||||||
Warrants exercisable at September 28, 2014 | 223,406 | ||||||||||||
Weighted-average exercise price at September 28, 2014 | $ | 7.38 | |||||||||||
BUSINESS_SEGMENTS_Tables
BUSINESS SEGMENTS (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 28, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Schedule of Segment Reporting Information, by Segment | ' | ||||||||||||||||
Thirteen Weeks Ended | Thirty-nine Weeks Ended | ||||||||||||||||
28-Sep-14 | 29-Sep-13 | 28-Sep-14 | 29-Sep-13 | ||||||||||||||
Revenue: | |||||||||||||||||
Light Industrial | $ | 21,419,076 | $ | 24,457,244 | $ | 59,853,064 | $ | 47,528,077 | |||||||||
Multifamily | 11,602,845 | 7,892,330 | 25,967,611 | 17,548,439 | |||||||||||||
IT Staffing | 14,985,689 | 15,516,360 | 44,054,511 | 42,805,720 | |||||||||||||
Total | $ | 48,007,610 | $ | 47,865,934 | $ | 129,875,186 | $ | 107,882,236 | |||||||||
Net income (loss): | |||||||||||||||||
Light Industrial | $ | 421,476 | $ | 1,424,651 | $ | 2,215,960 | $ | 2,277,685 | |||||||||
Multifamily | 1,713,839 | 1,111,578 | 3,165,179 | 2,482,253 | |||||||||||||
IT Staffing | 866,704 | 768,217 | 1,812,639 | 1,534,792 | |||||||||||||
Corporate | (2,002,619 | ) | (755,451 | ) | (6,044,269 | ) | (2,562,388 | ) | |||||||||
Interest expense, net | (634,238 | ) | (1,131,102 | ) | (2,067,909 | ) | (2,635,657 | ) | |||||||||
Total | $ | 365,162 | $ | 1,417,893 | $ | (918,400 | ) | $ | 1,096,685 | ||||||||
Depreciation: | |||||||||||||||||
Light Industrial | $ | 19,756 | $ | 17,145 | $ | 55,364 | $ | 43,179 | |||||||||
Multifamily | 6,495 | 6,393 | 18,245 | 15,004 | |||||||||||||
IT Staffing | 7,731 | 3,050 | 16,115 | 7,045 | |||||||||||||
Corporate | 14,724 | 6,685 | 41,612 | 19,488 | |||||||||||||
Total | $ | 48,706 | $ | 33,273 | $ | 131,336 | $ | 84,716 | |||||||||
Amortization: | |||||||||||||||||
Light Industrial | $ | 197,189 | $ | 179,650 | $ | 768,249 | $ | 266,617 | |||||||||
Multifamily | 24,887 | 24,887 | 74,662 | 83,829 | |||||||||||||
IT Staffing | 769,701 | 968,200 | 2,573,768 | 2,904,150 | |||||||||||||
Corporate | 12,821 | 12,821 | 38,462 | 43,185 | |||||||||||||
Total | $ | 1,004,598 | $ | 1,185,558 | $ | 3,455,141 | $ | 3,297,781 | |||||||||
Capital Expenditures: | |||||||||||||||||
Light Industrial | $ | 64,826 | $ | 7,121 | $ | 64,826 | $ | 7,121 | |||||||||
Multifamily | 19,274 | 14,737 | 19,274 | 36,769 | |||||||||||||
IT Staffing | 83,501 | 1,485 | 83,501 | 40,255 | |||||||||||||
Corporate | 93,929 | 42,603 | 93,929 | 67,491 | |||||||||||||
Total | $ | 261,530 | $ | 65,946 | $ | 261,530 | $ | 151,636 | |||||||||
28-Sep-14 | 29-Dec-13 | ||||||||||||||||
Total Assets: | |||||||||||||||||
Light Industrial | $ | 20,327,796 | $ | 21,187,881 | |||||||||||||
Multifamily | 7,623,796 | 5,806,948 | |||||||||||||||
IT Staffing | 22,589,412 | 23,644,464 | |||||||||||||||
Corporate | 8,955,804 | 7,983,208 | |||||||||||||||
Total | $ | 59,496,808 | $ | 58,622,501 | |||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | |
Accounting Policies [Abstract] | ' | ' | ' | ' |
Allowance at beginning of the period | $518,518 | $119,098 | $439,886 | $214,012 |
Provision for doubtful accounts | 159,926 | 170,726 | 312,333 | 170,726 |
Amounts written off | -51,152 | -45,814 | -124,927 | -140,728 |
Allowance at end of the period | $627,292 | $244,010 | $627,292 | $244,010 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 9 Months Ended |
Sep. 28, 2014 | |
Leasehold improvements | Minimum | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | 'P1Y |
Leasehold improvements | Maximum | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | 'P5Y |
Furniture and fixtures | Minimum | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | 'P5Y |
Furniture and fixtures | Maximum | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | 'P7Y |
Computer systems | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | 'P5Y |
Vehicles | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | 'P5Y |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | |
Accounting Policies [Abstract] | ' | ' | ' | ' |
Income before taxes | $0 | $1,441,034 | $0 | $1,125,635 |
Pro forma income tax expense | 0 | -599,922 | 0 | -519,959 |
Pro forma income | $0 | $841,112 | $0 | $605,676 |
Shares: | ' | ' | ' | ' |
Basic weighted average shares (in shares) | ' | 5,419,642 | ' | 5,419,642 |
Dilutive effect of potential common shares (in shares) | ' | 299,620 | ' | 242,741 |
Diluted weighted average shares (in shares) | ' | 5,719,262 | ' | 5,662,383 |
Pro forma basic earnings per share (in dollar per share) | $0 | $0.16 | $0 | $0.11 |
Pro forma diluted earnings per share (in dollar per share) | $0 | $0.15 | $0 | $0.11 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | Dec. 29, 2013 | Sep. 28, 2014 | 28-May-13 | Sep. 28, 2014 | Sep. 28, 2014 | Sep. 28, 2014 | Sep. 28, 2014 | Sep. 28, 2014 | Sep. 28, 2014 | Sep. 28, 2014 | |
2013 Plan | InStaff Holding Corporation | Light Industrial | Multifamily | Information Technology Staffing | Trade names | Trade names | Minimum | Maximum | ||||||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Useful life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | '5 years |
Goodwill | $5,863,483 | ' | $5,863,483 | ' | $5,853,616 | ' | $1,035,032 | $4,483,937 | $1,073,755 | $305,791 | ' | ' | ' | ' |
Amortization of Financing Costs | 40,265 | 76,992 | 133,038 | 160,157 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred Finance Costs, Noncurrent, Net | 536,873 | ' | 536,873 | ' | 362,960 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 138,942 | 63,000 | 519,285 | 63,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Capital Shares Reserved for Future Issuance | ' | ' | ' | ' | ' | 900,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Decrease in earnings per share, basic and diluted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.01 | $0.06 | ' | ' |
Decrease in amortization expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 198,500 | 330,833 | ' | ' |
Indefinite-lived Intangible Assets, Period Increase (Decrease) | ' | ' | 2,537,566 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Put Option Liability | 2,493,452 | ' | 2,493,452 | ' | 1,312,606 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Put option adjustment | $954,605 | $0 | $1,180,846 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Decrease in earnings per share, basic | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.04 | ' | ' | ' |
Decrease in earnings per share, diluted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.03 | ' | ' | ' |
ACQUISITIONS_Details
ACQUISITIONS (Details) (USD $) | Sep. 28, 2014 | Dec. 29, 2013 | 28-May-13 | Nov. 29, 2013 | 28-May-13 |
InStaff Holding Corporation | InStaff Holding Corporation | InStaff Holding Corporation | |||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Accounts receivable | ' | ' | ' | ' | $4,437,896 |
Property and equipment | ' | ' | ' | ' | 136,993 |
Prepaid expenses and other current assets | ' | ' | ' | ' | 790,715 |
Deposits and other assets | ' | ' | ' | ' | 909,756 |
Intangible assets | ' | ' | ' | ' | 4,729,000 |
Goodwill | 5,863,483 | 5,853,616 | ' | ' | 1,035,032 |
Liabilities assumed | ' | ' | ' | ' | -1,802,864 |
Total net assets acquired | ' | ' | ' | ' | 10,236,528 |
Cash | ' | ' | 9,000,000 | 9,436,528 | ' |
Fair value of contingent consideration | ' | ' | ' | ' | 800,000 |
Total fair value of consideration transferred for acquired business | ' | ' | $10,236,528 | ' | ' |
ACQUISITIONS_Details_1
ACQUISITIONS (Details 1) (InStaff Holding Corporation, USD $) | 0 Months Ended | 9 Months Ended |
28-May-13 | Sep. 28, 2014 | |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Total | $4,729,000 | ' |
Trade names | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Indefinite-lived Intangible Assets Acquired | 1,648,000 | ' |
Covenant not to compete | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived Intangible Assets Acquired | 483,000 | ' |
Useful life | ' | '5 years |
Customer lists | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived Intangible Assets Acquired | $2,598,000 | ' |
Useful life | ' | '5 years |
ACQUISITIONS_Details_2
ACQUISITIONS (Details 2) (InStaff Holding Corporation, USD $) | 9 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Sep. 29, 2013 |
InStaff Holding Corporation | ' |
Business Acquisition [Line Items] | ' |
Revenues | $128,806 |
Net income | $1,016 |
Loss per share: | ' |
Basic (in dollar per share) | $0.19 |
Diluted (in dollar per share) | $0.18 |
ACQUISITIONS_Details_Textual
ACQUISITIONS (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | 28-May-13 | Nov. 29, 2013 | Sep. 28, 2014 | 28-May-13 | |
InStaff Holding Corporation | InStaff Holding Corporation | InStaff Holding Corporation | InStaff Holding Corporation | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Effective date of acquisition | ' | ' | ' | ' | ' | ' | 28-May-13 | ' |
Cash paid for acquisition | ' | ' | ' | ' | $9,000,000 | $9,436,528 | ' | ' |
Business Combination Contingent Consideration | ' | ' | ' | ' | 1,000,000 | ' | ' | ' |
Fair value of contingent consideration | ' | ' | ' | ' | ' | ' | ' | 800,000 |
Payments for Previous Acquisition | ' | ' | ' | ' | 436,528 | ' | ' | ' |
Acquisition related costs | ' | ' | ' | ' | ' | ' | 420,000 | ' |
Revenues | $48,007,610 | $47,865,934 | $129,875,186 | $107,882,236 | ' | ' | $39,700,000 | ' |
INTANGIBLE_ASSETS_Details
INTANGIBLE ASSETS (Details) (USD $) | Sep. 28, 2014 | Dec. 29, 2013 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lives, Gross Value | $26,859,810 | $30,829,810 |
Finite lives, Accumulated Amortization | 16,316,710 | 14,294,003 |
Finite lives, Net Carrying Value | 10,543,100 | 16,535,807 |
Total Gross Value | 32,477,810 | 32,477,810 |
Total Accumulated Amortization | 17,749,144 | 14,294,003 |
Total Net Carrying Value | 14,728,666 | 18,183,807 |
Trade names | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Indefinite lives, Gross Value | 5,618,000 | 1,648,000 |
Indefinite lives, Accumulated Amortization | 1,432,434 | 0 |
Indefinite lives, Net Carrying Value | 4,185,566 | 1,648,000 |
Customer lists | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lives, Gross Value | 25,786,810 | 25,786,810 |
Finite lives, Accumulated Amortization | 15,891,576 | 12,862,053 |
Finite lives, Net Carrying Value | 9,895,234 | 12,924,757 |
Covenant not to compete | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lives, Gross Value | 1,073,000 | 1,073,000 |
Finite lives, Accumulated Amortization | 425,134 | 264,183 |
Finite lives, Net Carrying Value | 647,866 | 808,817 |
Trade names | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite lives, Gross Value | ' | 3,970,000 |
Finite lives, Accumulated Amortization | ' | 1,167,767 |
Finite lives, Net Carrying Value | ' | 2,802,233 |
IT Staffing | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Indefinite-Lived Trade Names | $2,537,566 | ' |
INTANGIBLE_ASSETS_Details_1
INTANGIBLE ASSETS (Details 1) (USD $) | Sep. 28, 2014 | Dec. 29, 2013 |
Fiscal Year Ending: | ' | ' |
2014 | $1,004,599 | ' |
2015 | 3,926,815 | ' |
2016 | 3,497,031 | ' |
2017 | 2,004,404 | ' |
2018 | 110,251 | ' |
Thereafter | 0 | ' |
Finite lives, Net Carrying Value | $10,543,100 | $16,535,807 |
INTANGIBLE_ASSETS_Details_Text
INTANGIBLE ASSETS (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | Dec. 29, 2013 | |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Remaining unamortized value | $10,543,100 | ' | $10,543,100 | ' | $16,535,807 |
Amortization of intangible assets | 1,004,598 | 1,185,558 | 3,455,141 | 3,297,781 | ' |
Trade names | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Remaining unamortized value | ' | ' | ' | ' | 2,802,233 |
Decrease in amortization expense | 198,500 | ' | ' | ' | ' |
Decrease in earnings per share, basic and diluted | $0.01 | ' | $0.06 | ' | ' |
Trade names | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Decrease in amortization expense | $198,500 | ' | $330,833 | ' | ' |
Decrease in earnings per share, basic | $0.04 | ' | ' | ' | ' |
Decrease in earnings per share, basic and diluted | $0.01 | ' | $0.06 | ' | ' |
Decrease in earnings per share, diluted | $0.03 | ' | ' | ' | ' |
ACCRUED_EXPENSES_Details
ACCRUED EXPENSES (Details) (USD $) | Sep. 28, 2014 | Dec. 29, 2013 |
Accrued Liabilities, Current [Abstract] | ' | ' |
Subcontractor payable | $3,813,168 | $2,367,131 |
Accrued bonuses and commissions | 710,759 | 696,207 |
Payroll taxes | 2,115,935 | 2,947,134 |
Other | 1,231,360 | 1,112,403 |
Accrued Liabilities, Current | $7,871,222 | $7,122,875 |
DEBT_Details
DEBT (Details) (USD $) | 9 Months Ended | |
Sep. 28, 2014 | Dec. 29, 2013 | |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | $17,750,000 | $19,384,765 |
Less current portion | -2,250,000 | -2,378,333 |
Long-term debt non-current portion | 15,500,000 | 17,006,432 |
Revolving Credit Facility | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Line of Credit Facility, Interest Rate Description | 'Borrowings under the Revolver are subject to a borrowing base, bear interest at the 30-day LIBOR plus a margin that ranges from 3.00% to 3.75% (3.5% at June 29, 2014) | ' |
Expiration date | 29-Jan-18 | ' |
Term Loan A | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Line of Credit Facility, Interest Rate Description | 'Interest is paid on a monthly basis at an annual interest rate of LIBOR plus a margin of 3.75% to 4.5%, determined by certain thresholds (4.25% at June 29 2014). | ' |
Total long-term debt | 9,750,000 | 4,756,666 |
Expiration date | 29-Jan-14 | ' |
Subordinated Loans, Payable to Private Parties | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | 0 | 14,628,099 |
Interest rate | 14.00% | ' |
Expiration date | 29-Jan-14 | ' |
Frequency of payments | 'monthly | ' |
Term Loan B | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | $8,000,000 | $0 |
Interest rate | 11.00% | ' |
Expiration date | 29-Jan-18 | ' |
Commitment fee, rate | 1.50% | ' |
DEBT_Details_1
DEBT (Details 1) (USD $) | Sep. 28, 2014 |
Long Term Debt, Fiscal Year Maturity [Line Items] | ' |
2014 | $562,500 |
2015 | 2,250,000 |
2016 | 3,281,250 |
2017 | 3,375,000 |
2018 | 22,881,250 |
Thereafter | 0 |
Long-term Debt, Total | $32,350,000 |
DEBT_Details_Textual
DEBT (Details Textual) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | 9 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||
In Millions, unless otherwise specified | Apr. 28, 2014 | Mar. 31, 2013 | Apr. 28, 2014 | Sep. 28, 2014 | Mar. 30, 2014 | Dec. 29, 2013 | Mar. 30, 2014 | Sep. 28, 2014 | Sep. 28, 2014 | Sep. 28, 2014 | Sep. 28, 2014 | Sep. 28, 2014 | Mar. 30, 2014 | Sep. 28, 2014 | Sep. 28, 2014 | Sep. 28, 2014 | Sep. 28, 2014 |
First Amendment | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Term Loan A | Subordinated Debt, Payable to Private Parties | Subordinated Debt, Payable to Private Parties | Subordinated Debt, Payable to Private Parties | Term Loan B | Senior Subordinated Loans | Minimum | Minimum | Maximum | Maximum | |||
First Amendment | Subordinated Borrowing, Interest Rate, Payable In Cash | Subordinated Borrowing, Interest Rate, Payable in Kind | London Interbank Offered Rate (LIBOR) | London Interbank Offered Rate (LIBOR) | London Interbank Offered Rate (LIBOR) | London Interbank Offered Rate (LIBOR) | |||||||||||
Term Loan A | Term Loan A | ||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Interest Rate at Period End | ' | ' | ' | 3.50% | ' | ' | ' | 4.30% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Subordinated Borrowing, Interest Rate | ' | ' | ' | ' | ' | ' | ' | ' | 14.00% | 12.00% | 2.00% | 11.00% | ' | ' | ' | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity | ' | ' | ' | $20 | ' | ' | ' | $11.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Previous Borrowing Capacity | ' | ' | ' | ' | ' | ' | ' | 7.1 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Line of Credit | ' | ' | ' | 14.6 | ' | 13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Basis Spread on Variable Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.00% | 3.75% | 3.75% | 4.50% |
Subordinated Debt, Total | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' | ' | ' | ' | ' |
Extinguishment of Debt, Gain (Loss), Net of Tax | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' |
Line of Credit Facility, Expiration Date | ' | ' | ' | 29-Jan-18 | ' | ' | ' | 29-Jan-14 | 29-Jan-14 | ' | ' | 29-Jan-18 | ' | ' | ' | ' | ' |
Line of Credit Facility, Remaining Borrowing Capacity | ' | ' | ' | ' | 2.3 | ' | 3.7 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayments of Convertible Debt | ' | $0.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Frequency of payments | ' | ' | ' | ' | ' | ' | ' | 'secured by all assets of the Company. | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Borrowing Capacity, Percentage | 80.00% | ' | 85.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
EQUITY_Details
EQUITY (Details) (USD $) | Sep. 28, 2014 | Dec. 29, 2013 | Dec. 29, 2013 |
Subordinated Debt | |||
Equity [Line Items] | ' | ' | ' |
Common stock, shares authorized | 19,500,000 | 19,500,000 | ' |
Common stock, par value | $0.01 | $0.01 | ' |
Preferred stock, shares authorized | 500,000 | 500,000 | ' |
Preferred stock, par value | $0.01 | $0.01 | ' |
Debt Conversion, Converted Instrument, Shares Issued | ' | ' | 179,205 |
Subordinated Debt Conversion Converted Instrument Amount | ' | ' | $200 |
Common stock, shares outstanding | 5,608,145 | 5,598,847 | ' |
STOCKBASED_COMPENSATION_Detail
STOCK-BASED COMPENSATION (Details) (Employee Stock Option, USD $) | 9 Months Ended | |
Sep. 28, 2014 | Sep. 29, 2013 | |
Employee Stock Option | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Weighted average fair value of options (in dollars per share) | $2.84 | $0 |
Weighted average risk-free interest rate | 1.00% | 0.00% |
Dividend yield | 0.00% | 0.00% |
Weighted average volatility factor | 49.00% | 0.00% |
Weighted average expected life (in years) | '5 years 7 months 6 days | '0 years |
STOCKBASED_COMPENSATION_Detail1
STOCK-BASED COMPENSATION (Details 1) (Employee Stock Option, USD $) | 9 Months Ended | |
Sep. 28, 2014 | Sep. 28, 2014 | |
Employee Stock Option | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of Shares, outstanding | 0 | 591,363 |
Granted | 596,363 | ' |
Exercised | -5,000 | ' |
Number of Shares, Options exercisable | 303,263 | ' |
Weighted average exercise price (in dollars per share) | $6.51 | ' |
STOCKBASED_COMPENSATION_Detail2
STOCK-BASED COMPENSATION (Details 2) (Warrant, USD $) | 9 Months Ended | |
Sep. 28, 2014 | Sep. 29, 2013 | |
Warrant | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Weighted average fair value of warrants (in dollars per share) | $1.76 | $0 |
Weighted average risk-free interest rate | 0.10% | 0.00% |
Dividend yield | 0.00% | 0.00% |
Weighted average volatility factor | 49.00% | 0.00% |
Weighted average expected life (in years) | '2 years 4 months 24 days | '0 years |
STOCKBASED_COMPENSATION_Detail3
STOCK-BASED COMPENSATION (Details 3) (Warrant, USD $) | 9 Months Ended | |
Sep. 28, 2014 | Dec. 29, 2013 | |
Warrant | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number Of Warrants, Outstanding | 248,406 | 182,632 |
Granted | 66,573 | ' |
Exercised | -799 | ' |
Number of Warrants, exercisable | 223,406 | ' |
Weighted average exercise price (in dollars per share) | $7.38 | ' |
STOCKBASED_COMPENSATION_Detail4
STOCK-BASED COMPENSATION (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | |
Restricted Stock | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Allocated Share-based Compensation Expense | $0 | ' | $65,120 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | ' | ' | 8,800 | ' |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | ' | ' | $7.40 | ' |
Employee Stock Option | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Allocated Share-based Compensation Expense | 78,859 | 0 | 961,747 | 0 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total | 733,014 | ' | 733,014 | ' |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | ' | ' | '3 years 3 months 18 days | ' |
Warrant | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Allocated Share-based Compensation Expense | 12,624 | 0 | 91,262 | 0 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total | $25,671 | ' | $25,671 | ' |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | ' | ' | '0 years 4 months 24 days | ' |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | Dec. 29, 2013 | |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' |
Due to Related Parties, Noncurrent | $0 | ' | $0 | ' | $14,628,099 |
Loss on extinguishment of related party debt | 0 | 0 | 986,835 | 0 | ' |
Interest Paid, Total | ' | ' | 1,878,623 | 1,258,804 | ' |
Due to Related Parties, Current | 0 | ' | 0 | ' | 550,655 |
Investor | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' |
Interest Paid, Total | 0 | 354,897 | 471,990 | 739,325 | ' |
Payment for Management Fee | $0 | $43,750 | $0 | $131,250 | ' |
EMPLOYEE_BENEFIT_PLAN_Details
EMPLOYEE BENEFIT PLAN (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' |
Defined Contribution Plan, Cost Recognized | $60,111 | $39,299 | $159,518 | $112,233 |
First 3% Employee Compensation | ' | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' |
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | ' | ' | 100.00% | ' |
Next 2% Employee Compensation | ' | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' |
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | ' | ' | 50.00% | ' |
BUSINESS_SEGMENTS_Details
BUSINESS SEGMENTS (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | Dec. 29, 2013 | |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | $48,007,610 | $47,865,934 | $129,875,186 | $107,882,236 | ' |
Net Income (Loss) | 365,162 | 1,417,893 | -918,400 | 1,096,685 | ' |
Interest expense, net | 634,238 | 1,131,102 | 2,067,909 | 2,635,657 | ' |
Depreciation | 48,706 | 33,273 | 131,336 | 84,716 | ' |
Amortization | 1,004,598 | 1,185,558 | 3,455,141 | 3,297,781 | ' |
Capital Expenditures | 261,530 | 65,946 | 261,530 | 151,636 | ' |
Total Assets | 59,496,808 | ' | 59,496,808 | ' | 58,622,501 |
Light Industrial | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | 21,419,076 | 24,457,244 | 59,853,064 | 47,528,077 | ' |
Net Income (Loss) | 421,476 | 1,424,651 | 2,215,960 | 2,277,685 | ' |
Depreciation | 19,756 | 17,145 | 55,364 | 43,179 | ' |
Amortization | 197,189 | 179,650 | 768,249 | 266,617 | ' |
Capital Expenditures | 64,826 | 7,121 | 64,826 | 7,121 | ' |
Total Assets | 20,327,796 | ' | 20,327,796 | ' | 21,187,881 |
Multifamily | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | 11,602,845 | 7,892,330 | 25,967,611 | 17,548,439 | ' |
Net Income (Loss) | 1,713,839 | 1,111,578 | 3,165,179 | 2,482,253 | ' |
Depreciation | 6,495 | 6,393 | 18,245 | 15,004 | ' |
Amortization | 24,887 | 24,887 | 74,662 | 83,829 | ' |
Capital Expenditures | 19,274 | 14,737 | 19,274 | 36,769 | ' |
Total Assets | 7,623,796 | ' | 7,623,796 | ' | 5,806,948 |
IT Staffing | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | 14,985,689 | 15,516,360 | 44,054,511 | 42,805,720 | ' |
Net Income (Loss) | 866,704 | 768,217 | 1,812,639 | 1,534,792 | ' |
Depreciation | 7,731 | 3,050 | 16,115 | 7,045 | ' |
Amortization | 769,701 | 968,200 | 2,573,768 | 2,904,150 | ' |
Capital Expenditures | 83,501 | 1,485 | 83,501 | 40,255 | ' |
Total Assets | 22,589,412 | ' | 22,589,412 | ' | 23,644,464 |
Corporate | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net Income (Loss) | -2,002,619 | -755,451 | -6,044,269 | -2,562,388 | ' |
Depreciation | 14,724 | 6,685 | 41,612 | 19,488 | ' |
Amortization | 12,821 | 12,821 | 38,462 | 43,185 | ' |
Capital Expenditures | 93,929 | 42,603 | 93,929 | 67,491 | ' |
Total Assets | $8,955,804 | ' | $8,955,804 | ' | $7,983,208 |
PRO_FORMA_C_CORPORATION_DATA_D
PRO FORMA C CORPORATION DATA (Details Textual) (USD $) | Sep. 28, 2014 |
Pro Forma C Corporation Data [Abstract] | ' |
Current pro-forma deferred tax assets, net | $431,032 |
Non-current pro-forma deferred tax assets, net | $7,045,837 |