Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 27, 2015 | Nov. 02, 2015 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | BG Staffing, Inc. | |
Entity Central Index Key | 1,474,903 | |
Current Fiscal Year End Date | --12-27 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | BGSF | |
Entity Common Stock, Shares Outstanding | 7,379,473 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 27, 2015 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 27, 2015 | Dec. 28, 2014 |
Current assets | ||
Cash and cash equivalents | $ 64,832 | $ 0 |
Accounts receivable (net of allowance for doubtful accounts of $739,860 and $748,187 at 2015 and 2014, respectively) | 29,828,732 | 22,030,342 |
Prepaid expenses | 378,233 | 624,975 |
Other current assets | 646,136 | 617,992 |
Total current assets | 30,917,933 | 23,273,309 |
Property and equipment, net | 1,286,425 | 667,597 |
Other assets | ||
Deposits | 2,178,405 | 1,847,029 |
Deferred financing charges | 656,315 | 496,608 |
Deferred income taxes | 7,656,773 | 7,359,590 |
Intangible assets, net | 18,476,141 | 13,724,068 |
Goodwill | 7,089,257 | 6,404,367 |
Total other assets | 36,056,891 | 29,831,662 |
Total assets | 68,261,249 | 53,772,568 |
Current liabilities | ||
Long-term debt, current portion | 0 | 2,250,000 |
Accrued interest | 277,135 | 266,133 |
Accounts payable | 1,240,628 | 1,114,594 |
Accrued expenses | 10,299,313 | 7,127,335 |
Accrued workers’ compensation | 1,058,265 | 1,353,539 |
Contingent consideration | 1,550,000 | 840,536 |
Other current liabilities | 531,324 | 708,322 |
Dividend payable | 0 | 989,722 |
Accrued taxes | 858,955 | 0 |
Total current liabilities | 15,815,620 | 14,650,181 |
Line of credit | 9,750,000 | 4,900,000 |
Long-term debt, less current portion | 15,000,000 | 14,937,500 |
Other long-term liabilities | 2,424,174 | 2,921,595 |
Total liabilities | $ 42,989,794 | $ 37,409,276 |
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, 7,379,473 and 6,598,145 shares issued and outstanding for 2015 and 2014, respectively | 73,795 | 65,982 |
Additional paid in capital | 19,449,896 | 10,734,438 |
Retained earnings | 5,747,764 | 5,562,872 |
Total stockholders’ equity | 25,271,455 | 16,363,292 |
Total liabilities and stockholders’ equity | $ 68,261,249 | $ 53,772,568 |
CONSOLIDATED BALANCE SHEETS _Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) | Sep. 27, 2015 | Dec. 28, 2014 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current | $ 739,860 | $ 748,187 |
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 19,500,000 | 19,500,000 |
Common stock, shares issued (in shares) | 7,379,473 | 6,598,145 |
Common stock, shares outstanding (in shares) | 7,379,473 | 6,598,145 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2015 | Sep. 28, 2014 | Sep. 27, 2015 | Sep. 28, 2014 | |
Income Statement [Abstract] | ||||
Revenues | $ 60,170,823 | $ 48,007,610 | $ 150,836,360 | $ 129,875,186 |
Cost of services | 46,315,310 | 38,021,871 | 117,773,906 | 103,712,581 |
Gross profit | 13,855,513 | 9,985,739 | 33,062,454 | 26,162,605 |
Selling, general and administrative expenses | 7,703,447 | 6,222,793 | 20,929,397 | 18,387,274 |
Depreciation and amortization | 1,294,137 | 1,053,304 | 3,734,414 | 3,586,477 |
Operating income | 4,857,929 | 2,709,642 | 8,398,643 | 4,188,854 |
Loss on extinguishment of debt | (438,507) | 0 | (438,507) | 0 |
Loss on extinguishment of related party debt | 0 | 0 | 0 | (986,835) |
Interest expense, net | (660,590) | (634,239) | (1,751,083) | (1,854,587) |
Interest expense, net – related party | 0 | 0 | 0 | (213,322) |
Change in fair value of put option | (102,821) | (954,605) | 66,560 | (1,180,846) |
Income (loss) before income taxes | 3,656,011 | 1,120,798 | 6,275,613 | (46,736) |
Income tax expense | 1,441,333 | 755,635 | 2,434,692 | 871,664 |
Net income (loss) | $ 2,214,678 | $ 365,163 | $ 3,840,921 | $ (918,400) |
Net income (loss) per share: | ||||
Basic (in dollars per share) | $ 0.30 | $ 0.07 | $ 0.55 | $ (0.16) |
Diluted (in dollars per share) | $ 0.29 | $ 0.06 | $ 0.53 | $ (0.16) |
Weighted-average shares outstanding: | ||||
Basic (shares) | 7,359,632 | 5,608,301 | 6,978,309 | 5,602,160 |
Dilutive effect (shares) | 213,898 | 144,013 | 203,209 | 0 |
Diluted (shares) | 7,573,530 | 5,752,314 | 7,181,518 | 5,602,160 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 9 months ended Sep. 27, 2015 - USD ($) | Total | Preferred Stock | Common Stock | Additional Paid in Capital | Retained Earnings |
Stockholders’ equity, December 28, 2014 at Dec. 28, 2014 | $ 16,363,292 | $ 0 | $ 65,982 | $ 10,734,438 | $ 5,562,872 |
Stockholders’ equity, December 28, 2014 (in shares) at Dec. 28, 2014 | 6,598,145 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation | 231,563 | 0 | $ 0 | 231,563 | 0 |
Share-based compensation (in shares) | 0 | ||||
Issuance of shares, net of offering costs | 6,334,610 | 0 | $ 6,365 | 6,328,245 | 0 |
Issuance of shares, net of offering costs (in shares) | 636,500 | ||||
Retirement of put options | 1,466,326 | 1,466,326 | |||
Exercise of common stock options and warrants | 690,772 | 0 | $ 1,448 | 689,324 | 0 |
Exercise of common stock options and warrants (in shares) | 144,828 | ||||
Cash dividend declared ($0.25 per share) | $ (3,656,029) | 0 | $ 0 | 0 | (3,656,029) |
Common stock, dividends, per share, declared | $ 0.25 | ||||
Net income (loss) | $ 3,840,921 | 0 | 0 | 0 | 3,840,921 |
Stockholders’ equity, September 27, 2015 at Sep. 27, 2015 | $ 25,271,455 | $ 0 | $ 73,795 | $ 19,449,896 | $ 5,747,764 |
Stockholders’ equity, September 27, 2015 (in shares) at Sep. 27, 2015 | 7,379,473 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 27, 2015 | Sep. 28, 2014 | |
Cash flows from operating activities | ||
Net income (loss) | $ 3,840,921 | $ (918,400) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 3,734,414 | 3,586,477 |
Loss on disposal of property and equipment | 1,380 | 894 |
Loss on extinguishment of debt | 438,507 | 0 |
Loss on extinguishment of related party debt | 0 | 986,835 |
Earn out adjustment | (8,688) | (212,000) |
Amortization of deferred financing costs | 129,141 | 133,038 |
Amortization of debt discounts | 32,355 | 77,230 |
Interest expense on earn out payable | 208,263 | 169,697 |
Put option adjustment | (66,560) | 1,180,846 |
Provision for doubtful accounts | 371,953 | 312,333 |
Stock-based compensation | 231,563 | 1,118,129 |
Deferred income taxes | 18,376 | (809,536) |
Net changes in operating assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable | (5,706,619) | (5,083,325) |
Prepaid expenses | 251,541 | 729,464 |
Other current assets | (343,703) | 358,171 |
Deposits | (331,375) | (272,665) |
Accrued interest | 11,002 | (128,440) |
Accounts payable | 125,348 | (629,111) |
Accrued expenses | 2,560,233 | 1,566,768 |
Accrued workers’ compensation | (295,451) | (160,617) |
Other current liabilities | (176,998) | 171,800 |
Accrued taxes | 858,955 | 1,150,602 |
Other long-term liabilities | 10,188 | 0 |
Net cash provided by operating activities | 5,894,746 | 3,328,190 |
Cash flows from investing activities | ||
Business acquired, net of cash received | (8,781,091) | 0 |
Capital expenditures | (510,403) | (261,530) |
Proceeds from the sale of property and equipment | 1,259 | 0 |
Net cash used in investing activities | (9,290,235) | (261,530) |
Cash flows from financing activities | ||
Net borrowings under line of credit | 4,850,000 | 178,529 |
Proceeds from issuance of long-term debt | 15,000,000 | 0 |
Principal payments on long-term debt | (17,187,500) | (1,698,194) |
Payments on other long-term liabilities | 0 | (500,000) |
Payments of dividends | (4,645,751) | 0 |
Net proceeds from issuance of common stock | 7,025,382 | 0 |
Contingent consideration paid | (854,454) | (995,457) |
Other | 0 | (6,746) |
Deferred financing costs | (727,356) | (44,792) |
Net cash provided by (used in) financing activities | 3,460,321 | (3,066,660) |
Net change in cash | 64,832 | 0 |
Cash and cash equivalents, beginning of period | 0 | 0 |
Cash and cash equivalents, end of period | 64,832 | 0 |
Supplemental cash flow information: | ||
Cash paid for interest | 1,144,221 | 1,878,623 |
Cash paid for taxes, net of refunds | 1,947,636 | 149,961 |
Non-cash transactions: | ||
Prepaid offering costs | 0 | 87,163 |
Contingent consideration paid through relief of accounts receivable | 0 | 596,079 |
Dividends declared | 3,656,029 | 0 |
Retirement of put options | 1,466,326 | 0 |
Leasehold improvements funded by landlord incentives | $ 321,450 | $ 0 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 9 Months Ended |
Sep. 27, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | NATURE OF OPERATIONS BG Staffing, Inc. is a provider of temporary staffing services that operates, along with its wholly owned subsidiaries BG Staffing, LLC, B G Staff Services Inc., BG Personnel, LP and BG Finance and Accounting, Inc. (“BGFA”) (collectively, the “Company”), within the United States of America in three industry segments: Commercial, Multifamily, and Professional Staffing. The Commercial segment provides temporary workers primarily to distributions and logistics costumers needing a flexible workforce. The Multifamily segment provides front office and maintenance temporary workers to various apartment communities, via property management companies responsible for the apartment communities day to day operations. The Professional Staffing segment provides temporary workers for IT customer projects and finance and accounting demands. The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles in the United States (“GAAP”), pursuant to the applicable rules and regulations of the SEC. The information furnished herein reflects all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary to present a fair statement of the financial position and operating results of the Company as of and for the respective periods. However, these operating results are not necessarily indicative of the results expected for a full fiscal year or any other future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. However, management of the Company believes, to the best of their knowledge, that the disclosures herein are adequate to make the information presented not misleading. The Company has determined that there were no subsequent events that would require disclosure or adjustments to the accompanying consolidated financial statements through the date the financial statements were issued. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the fiscal year ended December 28, 2014 , included in its Annual Report on Form 10-K. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 27, 2015 | |
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 27, 2015 and December 28, 2014 , and include the thirteen and thirty-nine week periods ended September 27, 2015 and September 28, 2014 . Reclassifications Certain reclassifications have been made to the 2014 financial statements to conform with the 2015 presentation. Management Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less. Concentration of Credit Risk Concentration of credit risk is limited due to the Company’s diverse customer base and their dispersion across many different industries and geographic locations nation-wide. No single customer accounted for more than 10% of the Company’s revenue or accounts receivable for the thirty-nine week periods ended September 27, 2015 and September 28, 2014 . Geographic revenue in excess of 10% of the Company's consolidated revenue was generated in the following areas: Thirty-nine Weeks Ended September 27, 2015 September 28, 2014 North Carolina 12 % 14 % Rhode Island 19 % 22 % Texas 43 % 32 % Consequently, weakness in economic conditions in these regions could have a material adverse effect on the Company’s financial position and results of future operations. Accounts Receivable The Company extends credit to its customers in the normal course of business. Accounts receivable represents unpaid balances due from customers. The Company maintains an allowance for doubtful accounts for 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 September 27, 2015 September 28, 2014 September 27, 2015 September 28, 2014 Allowance at beginning of the period $ 812,964 $ 518,518 $ 748,187 $ 439,886 Provision for doubtful accounts 146,291 136,066 371,953 312,333 Amounts written off, net of recoveries (219,395 ) (136,066 ) (380,280 ) (233,701 ) Allowance at end of the period $ 739,860 $ 518,518 $ 739,860 $ 518,518 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 27, 2015 and September 28, 2014 , the Company recognized $42,441 and $40,265 , respectively, of amortization expense as a component of interest expense related to deferred financing charges. During the thirty-nine week periods ended September 27, 2015 and September 28, 2014 , the Company recognized $129,141 and $133,038 , respectively of amortization expense as a component of interest expense related to deferred financing charges. Property and Equipment Property and equipment are stated net of accumulated depreciation and amortization of $735,053 and $564,331 at September 27, 2015 and December 28, 2014 , respectively. Intangible Assets The Company holds intangible assets with indefinite and finite lives. Intangible assets with indefinite useful lives are not amortized. Intangible assets with finite useful lives are amortized over their respective estimated useful lives, ranging from three to five years, based on a pattern in which the economic benefit of the respective intangible asset is realized. The Company annually evaluates the remaining useful lives of all intangible assets to determine whether events and circumstances warrant a revision to the remaining period of amortization. Goodwill Goodwill is not amortized, but instead is evaluated at the reporting unit level for impairment annually at the end of each fiscal year, or more frequently if conditions indicate an earlier review is necessary. If the Company has determined that it is more likely than not that the fair value for one or more reporting units is greater than their carrying value, the Company may use a qualitative assessment for the annual impairment test. Revenue Recognition The Company derives its revenues from three segments: commercial, multifamily and professional staffing. The Company provides temporary and consultant staffing and permanent placement services. Revenues as presented on the Unaudited Consolidated Statements of Operations represent services rendered to customers less sales adjustments and allowances. Reimbursements, including those related to out-of-pocket expenses, are also included in revenues, and equivalent amounts of reimbursable expenses are included in cost of services. The Company and its customers enter into agreements that outline the general terms and conditions of the staffing arrangement. Revenue is recognized as services are performed and associated costs have been incurred. The Company records revenue on a gross basis as a principal versus on a net basis as an agent in the presentation of revenues and expenses. The Company has concluded that gross reporting is appropriate because the Company (i) has the risk of identifying and hiring qualified workers, (ii) has the discretion to select the workers and establish their price and duties and (iii) bears the risk for services that are not fully paid for by customers. Temporary and consultant staffing revenues - Temporary and consultant staffing revenues are recognized when the services are rendered by the Company’s temporary workers or consultants. The Company assumes the risk of acceptability of its workers to its customers. Permanent placement staffing revenues - Permanent placement staffing revenues are recognized when employment candidates accept offers of permanent employment. The Company estimates the effect of permanent placement candidates who do not remain with its customers through the guarantee period (generally 90 days) based on historical experience. Allowances are established to estimate these losses. Fees to customers are generally calculated as a percentage of the new worker’s annual compensation. No fees for permanent placement services are charged to employment candidates. Share-Based Compensation The Company recognizes compensation expense in selling, general and administrative expenses over the service period for options that are expected to vest and records adjustments to compensation expense at the end of the service period if actual forfeitures differ from original estimates. Earnings Per Share Basic earnings (loss) per common share are computed by dividing net earnings (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period adjusted to reflect potentially dilutive securities. The following is a reconciliation of the number of shares used in the calculation of basic and diluted earnings per share Thirteen Weeks Ended Thirty-nine Weeks Ended September 27, 2015 September 28, 2014 September 27, 2015 September 28, 2014 Weighted-average number of common shares outstanding: 7,359,632 5,608,301 6,978,309 5,602,160 Effect of dilutive securities: Stock options 181,810 74,612 181,810 — Warrants 21,399 69,401 21,399 — Dilutive potential common shares 7,573,530 5,752,314 7,181,518 5,602,160 Excluded from dilutive weighted-average shares outstanding: Stock options 21,042 51,042 21,042 383,892 Warrants — 87,900 77,970 143,771 Antidilutive 21,042 138,942 99,012 527,663 Income Taxes The current provision for income taxes represents estimated amounts payable or refundable on tax returns filed or to be filed for the year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the consolidated balance sheets. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. The overall change in deferred tax assets and liabilities for the period measures the deferred tax expense or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to tax expense in the period of enactment. When appropriate, we record a valuation allowance against net deferred tax assets to offset future tax benefits that may not be realized. In determining whether a valuation allowance is appropriate, we consider whether it is more likely than not that all or some portion of our deferred tax assets will not be realized, based in part upon management’s judgments regarding future events and past operating results. The Company follows the guidance of Accounting Standards Codification ("ASC") Topic 740, Accounting for Uncertainty in Income Taxes. ASC Topic 740 prescribes a more-likely-than-not measurement methodology to reflect the financial statement impact of uncertain tax positions taken or expected to be taken in a tax return. Income tax expense attributable to income from operations for 2015 differed from the amount computed by the applying the U.S. federal income tax rate of 34% to income before income taxes primarily as a result of state taxes. Income tax expense attributable to income from operations for 2014 differed from the amount computed by the applying the U.S. federal income tax rate of 34% to income before income taxes primarily as a result of state taxes, and permanent differences related to extinguishment of debt, share-based compensation and the fair value put option adjustment. Recent Accounting Pronouncements In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-16, Business Combinations (Topic 805), which replaces the requirement that an acquirer in a business combination account for measurement period adjustments retrospectively with a requirement that an acquirer recognize adjustments to the provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 requires that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. For public business entities, ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The guidance is to be applied prospectively to adjustments to provisional amounts that occur after the effective date of the guidance, with earlier application permitted for financial statements that have not been issued. The Company does not anticipate the adoption of ASU 2015-16 will have a material impact on the Company's financial condition or results of operations. In August 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which adds comments from the SEC addressing ASU 2015-03, as discussed below, and debt issuance costs related to line-of-credit arrangements. The SEC commented it would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company does not anticipate the adoption of ASU 2015-15 will have a material impact on the Company's financial condition or results of operations. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The Company does not anticipate the adoption of ASU 2015-03 will have a material impact on the Company's financial condition or results of operations. In May 2014, the FASB issued 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. In July 2015, the effective date was extended by one year by ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The new standard is effective for the Company on January 1, 2018. The Company is currently evaluating the impact of our pending adoption of ASU 2014-9 on the Company's consolidated financial statements and have not yet determined the method by which the Company will adopt the standard in 2017. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 27, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS D&W Talent, LLC On February 23, 2015 , the Company acquired substantially all of the assets and assumed certain liabilities of D&W Talent, LLC (“D&W”) for an initial cash consideration paid of $8.5 million and contingent consideration of up to $3.5 million based on the performance of D&W for the three years following the date of acquisition. The fair value of the contingent consideration at the acquisition date was $2.0 million 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, D&W would pay the Company the amount of the difference. On June 26, 2015 , the Company paid an additional $281,091 for the working capital adjustment. The Company incurred costs of $272,687 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 D&W operations from the date of acquisition. D&W operations contributed approximately $6.0 million and $13.8 million of revenue for the thirteen and thirty-nine weeks period ended September 27, 2015 , respectively. The assets acquired from D&W were assigned to the Professional Staffing segment. The acquisition of D&W allows the Company to strengthen and expand its professional operations through finance and accounting personnel. The following table presents the latest preliminary allocation of purchase price as of the date of acquisition. The preliminary purchase price has been allocated to the assets acquired and liabilities assumed as of the date of acquisition as follows: Accounts receivable $ 2,463,724 Property and equipment 22,100 Prepaid expenses and other current assets 3,299 Intangible assets 8,254,000 Goodwill 684,890 Liabilities assumed (611,108 ) Total net assets acquired $ 10,816,905 Cash $ 8,781,091 Fair value of contingent consideration 2,035,814 Total fair value of consideration transferred for acquired business $ 10,816,905 The allocation of the intangible assets is as follows: Estimated Fair Value Estimated Useful Lives Covenants not to compete $ 250,000 5 years Trade name 4,508,000 Indefinite Customer list 3,496,000 5 years Total $ 8,254,000 The Company estimates that the revenues and net income (loss) for the periods below that would have been reported if the D&W acquisition had taken place on the first day of Fiscal 2014 would be as follows (dollars in thousands, except per share amounts): Thirteen Weeks Ended Thirty-nine Weeks Ended September 27, 2015 September 28, 2014 September 27, 2015 September 28, 2014 Revenues $ 60,171 $ 53,438 $ 153,890 $ 142,099 Net income (loss) $ 2,215 $ 716 $ 4,027 $ (455 ) Income per share: Basic $ 0.30 $ 0.13 $ 0.58 $ (0.08 ) Diluted $ 0.29 $ 0.12 $ 0.56 $ (0.08 ) |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 27, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | INTANGIBLE ASSETS Intangible assets are stated net of accumulated amortization of $22,255,670 and $18,753,742 at September 27, 2015 and December 28, 2014 , respectively. In May 2014, due to a remarketing launch, the Company identified remaining name recognition and distinctiveness in its Extrinsic and American Partners 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 27, 2015 and December 28, 2014 , these trade names have a remaining unamortized value of $2,537,566 . For the thirty-nine week period ended September 27, 2015 , the increase in amortization expense associated with this change would have been $595,500 and the decrease in basic and diluted net income per share associated with this change would have been approximately $0.09 and $0.08 per share, respectively. Gross intangible assets increased in the thirty-nine weeks ended September 27, 2015 due to the D&W acquisition (See Note 3 for details). Total amortization expense for the thirteen week periods ended September 27, 2015 and September 28, 2014 was $1,197,449 and $1,004,598 , respectively. Total amortization expense for the thirty-nine week periods ended September 27, 2015 and September 28, 2014 was $3,501,928 and $3,455,141 , respectively. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 27, 2015 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses | ACCRUED EXPENSES Accrued expenses consist of the following at: September 27, December 28, Temporary worker payable $ 4,103,077 $ 3,014,315 Accrued bonuses and commissions 1,101,356 503,024 Payroll and payroll related 5,054,121 2,949,958 Other 40,759 660,038 $ 10,299,313 $ 7,127,335 |
DEBT
DEBT | 9 Months Ended |
Sep. 27, 2015 | |
Debt Disclosure [Abstract] | |
Debt | DEBT On August 21, 2015, the Company entered into a credit agreement (the “Credit Agreement”) with Texas Capital Bank, National Association (“TCB”). The Credit Agreement provides for a revolving credit facility maturing August 21, 2019 (the “Revolving Facility”) permitting the Company to borrow funds from time to time in an aggregate amount equal to the lesser of the borrowing base amount, which is 85% of eligible accounts, and TCB’s commitment of $25.0 million , and is secured by all assets of the Company. The Company also entered into a senior subordinated credit agreement (the “Senior Subordinated Credit Agreement”) with Patriot Capital III SBIC, L.P. and Patriot Capital III, L.P. (together, “PC Subordinated Debt”), pursuant to which the foregoing lenders made term loans of $14,250,000 and $750,000 , respectively, with a maturity date of February 21, 2020, and is secured by all assets of the Company. Proceeds from the foregoing loan arrangements were used to pay off existing indebtedness of the Company under the Fifth Third Bank senior credit facility described below, as amended and $438,507 was recorded as a loss on extinguishment of debt in the third quarter 2015. The Company entered into a senior credit facility effective May 24, 2010, as amended with Fifth Third Bank. On January 29, 2014 , the Company entered into an amendment with its lenders under the senior credit facility, which provided 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 certain senior subordinated loans (“Subordinated Loans”) described below and $986,835 was recorded as a loss on extinguishment of related party debt in the first quarter of 2014. On December 12, 2014, the Company executed an amendment to the senior credit facility that removed the limitation on the Company to pay dividends while the Term Loan B was outstanding. In connection with the acquisition of the assets of D&W (see Note 3) on February 23, 2015 , the Company entered into an amendment with its lenders under senior credit facility to add BGFA as an additional borrower under the agreement and increased the borrowing base amount from 80% to 85% of eligible receivables. The Company had Subordinated Loans with two private lenders that also held equity interests of the Company, and therefore, were related parties. The full amount of the Subordinated Loans was repaid on January 29, 2014 through additional borrowings on the senior credit facility with Fifth Third Bank. At September 27, 2015 , $9.8 million was outstanding on the Revolving Facility with TCB. Borrowings under the Revolving Facility bear interest equal to (i) Base Rate plus 0.05% (the higher of Prime Rate, Federal Funds Rate plus 0.5% , or LIBOR plus 1.0% ) or (ii) LIBOR plus 3.25% . Borrowings under the Revolving Facility bore interest as follows at September 27, 2015 : $ 750,000 Base Rate 3.75 % $ 3,000,000 LIBOR 3.46 % $ 3,000,000 LIBOR 3.52 % $ 3,000,000 LIBOR 3.59 % Additionally, the Company pays a unused commitment fee of 0.25% on the unfunded portion of the Revolving Facility. At December 28, 2014 , $4.9 million was outstanding on the Revolver with Fifth Third Bank. Borrowings under the Revolver, bore interest at the 30-day LIBOR plus a margin that ranged from 3.00% to 3.75% . The Credit Agreement and the Senior Subordinated Credit Agreement contain customary affirmative covenants as well as negative covenants restricting the ability of the Company and its subsidiaries to, among other things (with certain exceptions): (i) incur indebtedness; (ii) incur liens; (iii) enter into mergers, consolidations, or similar transactions; (iv) pay dividends or make distributions (except for permitted distributions as defined in the agreement); (v) make loans; (vi) dispose of assets; (vii) enter into transactions with affiliates; or (viii) change the nature of their business. In addition, the Company must comply with certain financial covenants, including minimum debt service coverage ratio, minimum current ratio and ratio of funded indebtedness to EBITDA. As of September 27, 2015 , the Company was in compliance with these covenants. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 27, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The estimated fair value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities and other current assets and 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 27, 2015 and December 28, 2014 approximated the carrying value as the debt bears market rates of interest. 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 to certain holders of equity in BG Staffing, Inc. which is carried at fair market value in other long-term liabilities on the unaudited consolidated balance sheets. The fair value of the put option was $964,129 and $2,497,014 at September 27, 2015 and December 28, 2014 , respectively. The decrease is partially the result of the sale of 133,741 shares that contained the put right to third parties which caused the put rights on those shares to expire. 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 based on the closing share price. Changes in fair value are recorded as non-cash, non-operating income (expense) in the Company’s consolidated statements of operations. The liability was transferred from Level 3 to Level 2 during the thirteen week period ended September 27, 2015 due to an increased active market. The liability calculation of fair market value was based on the closing price of the Company's stock on September 27, 2015 . There were no substantive changes to the valuation techniques and related inputs used to measure fair value during the thirty-nine week period ended September 27, 2015 . In October 2015, the remaining shares were sold that contained the put right to a third party which caused the put rights on those shares to expire. |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 27, 2015 | |
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 consolidated financial position, consolidated results of operations or consolidated cash flow. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 27, 2015 | |
Stockholders' Equity Note [Abstract] | |
Equity | EQUITY Authorized capital stock consists of 19,500,000 shares of common stock, par value $0.01 per share and 500,000 shares of undesignated preferred stock, par value $0.01 per share. On May 6, 2015, the Company issued and sold 636,500 shares of common stock, $0.01 par value per share, to various investors in a registered offering for an aggregate purchase price of $7,001,500 in cash. The purchase price was $11.00 per share, which constituted approximately 9.6% of the total of issued and outstanding shares of common stock immediately before the initial execution of the Securities Purchase Agreement. In connection with the closing, the Company incurred $667,256 in offering costs, which included a commission of $420,090 paid to Taglich Brothers, Inc. the placement agent. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 27, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION Stock Issued For the thirty-nine week period ended September 28, 2014 , the Company recognized $65,120 of compensation costs related to a 2014 stock issuance. Stock Options For the thirteen week periods ended September 27, 2015 and September 28, 2014 , the Company recognized $48,564 and $78,859 of compensation cost related to stock awards, respectively. For the thirty-nine week periods ended September 27, 2015 and September 28, 2014 , the Company recognized $225,039 and $961,747 of compensation cost related to stock awards, respectively. Unamortized stock compensation expense as of September 27, 2015 amounted to $644,485 which is expected to be recognized over the next 3.0 years. The following assumptions were used to estimate the fair value of share options granted for the thirty-nine week periods ended: September 27, September 28, Weighted-average fair value of options $ 2.61 $ 2.84 Weighted-average risk-free interest rate 1.0 % 1.0 % Dividend yield 8.4 % — % Weighted-average volatility factor 47.0 % 49.0 % Weighted-average expected life 5.7 yrs 5.6 yrs A summary of stock option activity is presented as follows: Number of Shares Weighted Average Exercise Price Per Share Total Intrinsic Value of Options (in thousands) Options outstanding at December 29, 2013 — $ — $ — Granted 596,363 $ 6.51 $ 3,268 Exercised (5,000 ) $ 6.25 $ (29 ) Options outstanding at September 28, 2014 591,363 $ 6.52 $ 3,235 Options exercisable at September 28, 2014 303,263 $ 6.70 $ 1,604 Options outstanding at December 28, 2014 585,466 $ 6.52 $ 3,204 Granted 179,000 $ 11.00 $ 294 Exercised (48,800 ) $ 6.48 $ (258 ) Forfeited (45,000 ) $ 6.25 $ (279 ) Options outstanding at September 27, 2015 670,666 $ 7.73 $ 3,343 Options exercisable at September 27, 2015 358,266 $ 7.01 $ 2,015 The intrinsic value in the table above is the amount by which the market value of the underlying stock exceeded the exercise price of outstanding options, before applicable income taxes and represents the amount optionees would have realized if all in-the-money options had been exercised on the last business day of the period indicated. Warrant Activity For the thirteen week periods ended September 27, 2015 and September 28, 2014 , the Company recognized $1 and $12,624 of compensation cost related to warrants, respectively. For the thirty-nine week periods ended September 27, 2015 and September 28, 2014 , the Company recognized $6,524 and $91,262 of compensation cost related to warrants, respectively. There was no unamortized stock compensation expense to be recognized as of September 27, 2015 . The following assumptions were used to estimate the fair value of warrants for the thirty-nine week periods ended: September 27, September 28, Weighted-average fair value of warrants $ 1.62 $ 1.76 Weighted-average risk-free interest rate 0.5 % 0.1 % Dividend yield 8.2 % — % Weighted-average volatility factor 49.0 % 49.0 % Weighted-average expected life 2.5 yrs 2.4 yrs A summary of warrant activity is presented as follows: Number of Shares Weighted Average Exercise Price Per Share Total Intrinsic Value of Options (in thousands) Warrants outstanding at December 29, 2013 224,205 $ 7.08 $ 1,126 Granted 25,000 $ 10.00 $ 50 Exercised (799 ) $ 4.51 $ (6 ) Warrants outstanding at September 28, 2014 248,406 $ 7.38 $ 1,145 Warrants exercisable at September 28, 2014 223,406 $ 7.09 $ 1,095 Warrants outstanding at December 28, 2014 326,822 $ 8.04 $ 1,226 Granted 77,970 $ 11.85 $ 62 Exercised (96,029 ) $ 4.58 $ (755 ) Forfeited (168,443 ) $ 10.85 $ (105 ) Warrants outstanding at September 27, 2015 140,320 $ 10.03 $ 366 Warrants exercisable at September 27, 2015 62,350 $ 7.75 $ 305 The intrinsic value in the table above is the amount by which the market value of the underlying stock exceeded the exercise price of outstanding options, before applicable income taxes and represents the amount optionees would have realized if all in-the-money options had been exercised on the last business day of the period indicated. In connection with a public offering of the Company's common stock that closed in May 2015, the terms of warrants issued in December 2014 during a private placement were amended to decrease the aggregate number of shares issuable upon exercise of the private placement to 77,970 , increase the exercise price to $11.85 per share, and to provide that the warrants can be exercised during the period commencing six months after the commencement of sales in the offering and expiring on the fifth anniversary of the commencement of sales in the offering and that the holders will not be entitled to registration rights. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 27, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Through ownership of the common stock of BG Staffing, Inc., the Company is affiliated with multiple investors. Two of these investors were private lenders that also held the Subordinated Loans (see Note 6), which were repaid on January 29, 2014 and $986,835 was recorded as a loss on extinguishment of related party debt. |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 9 Months Ended |
Sep. 27, 2015 | |
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 $69,405 and $60,111 to the 401(k) Plan in the thirteen week periods ended September 27, 2015 and September 28, 2014 , respectively. The Company contributed $187,856 and $159,518 to the 401(k) Plan in the thirty-nine week periods ended September 27, 2015 and September 28, 2014 , respectively. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 9 Months Ended |
Sep. 27, 2015 | |
Segment Reporting [Abstract] | |
Business Segments | BUSINESS SEGMENTS The Company operates within three industry segments: Commercial, Multifamily and Professional Staffing. The Commercial segment provides temporary workers primarily to distribution and logistics customers needing a flexible workforce. The Multifamily segment provides front office and maintenance temporary workers to various apartment communities, via property management companies responsible for the apartment communities day to day operations. The Professional Staffing segment provides temporary workers for IT customer projects and finance and accounting demands. The Company provides services through 40 offices in 15 states to customers primarily within the United States of America. Segment operating income includes all revenue and cost of services, direct selling expenses, depreciation and amortization expense and excludes all general and administrative (corporate) expenses. Assets of corporate include cash, unallocated prepaid expenses, deferred tax assets, and other assets. The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated results for the periods indicated: Thirteen Weeks Ended Thirty-nine Weeks Ended September 27, 2015 September 28, 2014 September 27, 2015 September 28, 2014 Revenue: Commercial $ 23,927,189 $ 21,419,076 $ 62,354,584 $ 59,853,064 Multifamily 14,073,077 11,602,845 31,743,075 25,967,611 Professional Staffing 22,170,557 14,985,689 56,738,701 44,054,511 Total $ 60,170,823 $ 48,007,610 $ 150,836,360 $ 129,875,186 Depreciation: Commercial $ 23,460 $ 19,756 $ 68,608 $ 55,364 Multifamily 8,342 (20,393 ) 36,745 18,245 Professional Staffing 19,100 7,730 43,309 16,115 Corporate 45,786 41,613 83,824 41,612 Total $ 96,688 $ 48,706 $ 232,486 $ 131,336 Amortization: Commercial $ 159,041 $ 197,189 $ 540,703 $ 768,249 Multifamily 37,708 37,708 113,125 113,125 Professional Staffing 1,000,700 769,701 2,848,100 2,573,767 Corporate — — — — Total $ 1,197,449 $ 1,004,598 $ 3,501,928 $ 3,455,141 Operating income: Commercial $ 1,592,570 $ 1,173,812 $ 3,658,154 $ 3,070,475 Multifamily 2,405,266 1,704,319 4,731,719 3,152,583 Professional Staffing 2,041,230 866,703 3,918,553 1,812,638 Corporate (1,181,137 ) (1,035,192 ) (3,909,783 ) (3,846,842 ) Total $ 4,857,929 $ 2,709,642 $ 8,398,643 $ 4,188,854 Capital expenditures: Commercial $ 30,541 $ 14,300 $ 136,672 $ 64,826 Multifamily 15,219 7,911 73,779 19,274 Professional Staffing 88,572 41,347 142,590 83,501 Corporate 16,075 30,991 157,362 93,929 Total $ 150,407 $ 94,549 $ 510,403 $ 261,530 September 27, December 28, Total Assets: Commercial $ 20,275,954 $ 19,810,747 Multifamily 8,522,420 6,072,296 Professional Staffing 30,270,499 18,810,198 Corporate 9,192,376 9,079,327 Total $ 68,261,249 $ 53,772,568 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 27, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Vision Technology Services On September 28, 2015 , the Company acquired substantially all of the assets and assumed certain liabilities of Vision Technology Services, Inc., Vision Technology Services, LLC, and VTS-VM (collectively, “VTS”) for an initial cash consideration paid of $10.0 million and contingent earn-out consideration of up to $10.8 million based on the performance of the acquired business for the three years following the date of acquisition. The purchase agreement contained a provision for a “true up” of acquired working capital 120 days after the closing date. If actual working capital is greater than the target working capital, the Company will pay additional consideration in the amount of the difference. If actual working capital is less than target working capital, VTS will pay the Company the amount of the difference. The net assets acquired from the acquired business were assigned to the Professional Staffing segment. The acquisition of the assets of VTS allows the Company to strengthen and expand its IT operations through mid-Atlantic region and selected markets across the country with talent and project management services. As the transaction was recently completed, the initial accounting for the acquisition, including estimating the fair values of assets and liabilities acquired, has not been completed. Unaudited revenues of VTS for the periods indicated are presented below (in thousands): Thirty-nine Weeks Ended Nine Months Ended September 27, 2015 September 30, 2014 Revenues $ 25,226 $ 25,353 Dividend On October 27, 2015, the Company's board of directors declared a quarterly cash dividend in the amount of $0.25 per share of common stock to be paid on November 20, 2015 to all shareholders of record as of the close of business on November 9, 2015. |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 27, 2015 | |
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 27, 2015 and December 28, 2014 , and include the thirteen and thirty-nine week periods ended September 27, 2015 and September 28, 2014 . |
Reclassifications | Reclassifications Certain reclassifications have been made to the 2014 financial statements to conform with the 2015 presentation. |
Management Estimates | Management Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less. |
Accounts Receivable | Accounts Receivable The Company extends credit to its customers in the normal course of business. Accounts receivable represents unpaid balances due from customers. The Company maintains an allowance for doubtful accounts for estimated losses resulting from customers’ non-payment of balances due to the Company. The Company’s determination of the allowance for uncollectible amounts is based on management’s judgments and assumptions, including general economic conditions, portfolio composition, prior loss experience, evaluation of credit risk related to certain individual customers and the Company’s ongoing examination process. Receivables are written off after they are deemed to be uncollectible after all means of collection have been exhausted. Recoveries of receivables previously written off are recorded when received. |
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 27, 2015 and September 28, 2014 , the Company recognized $42,441 and $40,265 , respectively, of amortization expense as a component of interest expense related to deferred financing charges. During the thirty-nine week periods ended September 27, 2015 and September 28, 2014 , the Company recognized $129,141 and $133,038 , respectively of amortization expense as a component of interest expense related to deferred financing charges. |
Property and Equipment | Property and Equipment Property and equipment are stated net of accumulated depreciation and amortization of $735,053 and $564,331 at September 27, 2015 and December 28, 2014 , respectively. |
Intangible Assets | Intangible Assets The Company holds intangible assets with indefinite and finite lives. Intangible assets with indefinite useful lives are not amortized. Intangible assets with finite useful lives are amortized over their respective estimated useful lives, ranging from three to five years, based on a pattern in which the economic benefit of the respective intangible asset is realized. The Company annually evaluates the remaining useful lives of all intangible assets to determine whether events and circumstances warrant a revision to the remaining period of amortization. |
Goodwill | Goodwill Goodwill is not amortized, but instead is evaluated at the reporting unit level for impairment annually at the end of each fiscal year, or more frequently if conditions indicate an earlier review is necessary. If the Company has determined that it is more likely than not that the fair value for one or more reporting units is greater than their carrying value, the Company may use a qualitative assessment for the annual impairment test. |
Revenue Recognition | Revenue Recognition The Company derives its revenues from three segments: commercial, multifamily and professional staffing. The Company provides temporary and consultant staffing and permanent placement services. Revenues as presented on the Unaudited Consolidated Statements of Operations represent services rendered to customers less sales adjustments and allowances. Reimbursements, including those related to out-of-pocket expenses, are also included in revenues, and equivalent amounts of reimbursable expenses are included in cost of services. The Company and its customers enter into agreements that outline the general terms and conditions of the staffing arrangement. Revenue is recognized as services are performed and associated costs have been incurred. The Company records revenue on a gross basis as a principal versus on a net basis as an agent in the presentation of revenues and expenses. The Company has concluded that gross reporting is appropriate because the Company (i) has the risk of identifying and hiring qualified workers, (ii) has the discretion to select the workers and establish their price and duties and (iii) bears the risk for services that are not fully paid for by customers. Temporary and consultant staffing revenues - Temporary and consultant staffing revenues are recognized when the services are rendered by the Company’s temporary workers or consultants. The Company assumes the risk of acceptability of its workers to its customers. Permanent placement staffing revenues - Permanent placement staffing revenues are recognized when employment candidates accept offers of permanent employment. The Company estimates the effect of permanent placement candidates who do not remain with its customers through the guarantee period (generally 90 days) based on historical experience. Allowances are established to estimate these losses. Fees to customers are generally calculated as a percentage of the new worker’s annual compensation. No fees for permanent placement services are charged to employment candidates. |
Share-based Compensation | Share-Based Compensation The Company recognizes compensation expense in selling, general and administrative expenses over the service period for options that are expected to vest and records adjustments to compensation expense at the end of the service period if actual forfeitures differ from original estimates. |
Earnings Per Share | Earnings Per Share Basic earnings (loss) per common share are computed by dividing net earnings (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period adjusted to reflect potentially dilutive securities. |
Income Taxes | Income Taxes The current provision for income taxes represents estimated amounts payable or refundable on tax returns filed or to be filed for the year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the consolidated balance sheets. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. The overall change in deferred tax assets and liabilities for the period measures the deferred tax expense or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to tax expense in the period of enactment. When appropriate, we record a valuation allowance against net deferred tax assets to offset future tax benefits that may not be realized. In determining whether a valuation allowance is appropriate, we consider whether it is more likely than not that all or some portion of our deferred tax assets will not be realized, based in part upon management’s judgments regarding future events and past operating results. The Company follows the guidance of Accounting Standards Codification ("ASC") Topic 740, Accounting for Uncertainty in Income Taxes. ASC Topic 740 prescribes a more-likely-than-not measurement methodology to reflect the financial statement impact of uncertain tax positions taken or expected to be taken in a tax return. Income tax expense attributable to income from operations for 2015 differed from the amount computed by the applying the U.S. federal income tax rate of 34% to income before income taxes primarily as a result of state taxes. Income tax expense attributable to income from operations for 2014 differed from the amount computed by the applying the U.S. federal income tax rate of 34% to income before income taxes primarily as a result of state taxes, and permanent differences related to extinguishment of debt, share-based compensation and the fair value put option adjustment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-16, Business Combinations (Topic 805), which replaces the requirement that an acquirer in a business combination account for measurement period adjustments retrospectively with a requirement that an acquirer recognize adjustments to the provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 requires that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. For public business entities, ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The guidance is to be applied prospectively to adjustments to provisional amounts that occur after the effective date of the guidance, with earlier application permitted for financial statements that have not been issued. The Company does not anticipate the adoption of ASU 2015-16 will have a material impact on the Company's financial condition or results of operations. In August 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which adds comments from the SEC addressing ASU 2015-03, as discussed below, and debt issuance costs related to line-of-credit arrangements. The SEC commented it would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company does not anticipate the adoption of ASU 2015-15 will have a material impact on the Company's financial condition or results of operations. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The Company does not anticipate the adoption of ASU 2015-03 will have a material impact on the Company's financial condition or results of operations. In May 2014, the FASB issued 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. In July 2015, the effective date was extended by one year by ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The new standard is effective for the Company on January 1, 2018. The Company is currently evaluating the impact of our pending adoption of ASU 2014-9 on the Company's consolidated financial statements and have not yet determined the method by which the Company will adopt the standard in 2017. |
SUMMARY OF SIGNIFICANT ACCOUN22
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 27, 2015 | |
Accounting Policies [Abstract] | |
Revenue from External Customers by Geographic Areas | Geographic revenue in excess of 10% of the Company's consolidated revenue was generated in the following areas: Thirty-nine Weeks Ended September 27, 2015 September 28, 2014 North Carolina 12 % 14 % Rhode Island 19 % 22 % Texas 43 % 32 % |
Summary of Valuation Allowance | The allowance for doubtful accounts consists of the following: Thirteen Weeks Ended Thirty-nine Weeks Ended September 27, 2015 September 28, 2014 September 27, 2015 September 28, 2014 Allowance at beginning of the period $ 812,964 $ 518,518 $ 748,187 $ 439,886 Provision for doubtful accounts 146,291 136,066 371,953 312,333 Amounts written off, net of recoveries (219,395 ) (136,066 ) (380,280 ) (233,701 ) Allowance at end of the period $ 739,860 $ 518,518 $ 739,860 $ 518,518 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following is a reconciliation of the number of shares used in the calculation of basic and diluted earnings per share Thirteen Weeks Ended Thirty-nine Weeks Ended September 27, 2015 September 28, 2014 September 27, 2015 September 28, 2014 Weighted-average number of common shares outstanding: 7,359,632 5,608,301 6,978,309 5,602,160 Effect of dilutive securities: Stock options 181,810 74,612 181,810 — Warrants 21,399 69,401 21,399 — Dilutive potential common shares 7,573,530 5,752,314 7,181,518 5,602,160 Excluded from dilutive weighted-average shares outstanding: Stock options 21,042 51,042 21,042 383,892 Warrants — 87,900 77,970 143,771 Antidilutive 21,042 138,942 99,012 527,663 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 27, 2015 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The preliminary purchase price has been allocated to the assets acquired and liabilities assumed as of the date of acquisition as follows: Accounts receivable $ 2,463,724 Property and equipment 22,100 Prepaid expenses and other current assets 3,299 Intangible assets 8,254,000 Goodwill 684,890 Liabilities assumed (611,108 ) Total net assets acquired $ 10,816,905 Cash $ 8,781,091 Fair value of contingent consideration 2,035,814 Total fair value of consideration transferred for acquired business $ 10,816,905 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The allocation of the intangible assets is as follows: Estimated Fair Value Estimated Useful Lives Covenants not to compete $ 250,000 5 years Trade name 4,508,000 Indefinite Customer list 3,496,000 5 years Total $ 8,254,000 |
Business Acquisition, Pro Forma Information | The Company estimates that the revenues and net income (loss) for the periods below that would have been reported if the D&W acquisition had taken place on the first day of Fiscal 2014 would be as follows (dollars in thousands, except per share amounts): Thirteen Weeks Ended Thirty-nine Weeks Ended September 27, 2015 September 28, 2014 September 27, 2015 September 28, 2014 Revenues $ 60,171 $ 53,438 $ 153,890 $ 142,099 Net income (loss) $ 2,215 $ 716 $ 4,027 $ (455 ) Income per share: Basic $ 0.30 $ 0.13 $ 0.58 $ (0.08 ) Diluted $ 0.29 $ 0.12 $ 0.56 $ (0.08 ) |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 27, 2015 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consist of the following at: September 27, December 28, Temporary worker payable $ 4,103,077 $ 3,014,315 Accrued bonuses and commissions 1,101,356 503,024 Payroll and payroll related 5,054,121 2,949,958 Other 40,759 660,038 $ 10,299,313 $ 7,127,335 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 27, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit Facilities | Borrowings under the Revolving Facility bore interest as follows at September 27, 2015 : $ 750,000 Base Rate 3.75 % $ 3,000,000 LIBOR 3.46 % $ 3,000,000 LIBOR 3.52 % $ 3,000,000 LIBOR 3.59 % |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 27, 2015 | |
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: September 27, September 28, Weighted-average fair value of options $ 2.61 $ 2.84 Weighted-average risk-free interest rate 1.0 % 1.0 % Dividend yield 8.4 % — % Weighted-average volatility factor 47.0 % 49.0 % Weighted-average expected life 5.7 yrs 5.6 yrs |
Schedule of Share-based Compensation, Activity | A summary of stock option activity is presented as follows: Number of Shares Weighted Average Exercise Price Per Share Total Intrinsic Value of Options (in thousands) Options outstanding at December 29, 2013 — $ — $ — Granted 596,363 $ 6.51 $ 3,268 Exercised (5,000 ) $ 6.25 $ (29 ) Options outstanding at September 28, 2014 591,363 $ 6.52 $ 3,235 Options exercisable at September 28, 2014 303,263 $ 6.70 $ 1,604 Options outstanding at December 28, 2014 585,466 $ 6.52 $ 3,204 Granted 179,000 $ 11.00 $ 294 Exercised (48,800 ) $ 6.48 $ (258 ) Forfeited (45,000 ) $ 6.25 $ (279 ) Options outstanding at September 27, 2015 670,666 $ 7.73 $ 3,343 Options exercisable at September 27, 2015 358,266 $ 7.01 $ 2,015 |
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: September 27, September 28, Weighted-average fair value of warrants $ 1.62 $ 1.76 Weighted-average risk-free interest rate 0.5 % 0.1 % Dividend yield 8.2 % — % Weighted-average volatility factor 49.0 % 49.0 % Weighted-average expected life 2.5 yrs 2.4 yrs |
Schedule of Share-based Compensation, Activity | A summary of warrant activity is presented as follows: Number of Shares Weighted Average Exercise Price Per Share Total Intrinsic Value of Options (in thousands) Warrants outstanding at December 29, 2013 224,205 $ 7.08 $ 1,126 Granted 25,000 $ 10.00 $ 50 Exercised (799 ) $ 4.51 $ (6 ) Warrants outstanding at September 28, 2014 248,406 $ 7.38 $ 1,145 Warrants exercisable at September 28, 2014 223,406 $ 7.09 $ 1,095 Warrants outstanding at December 28, 2014 326,822 $ 8.04 $ 1,226 Granted 77,970 $ 11.85 $ 62 Exercised (96,029 ) $ 4.58 $ (755 ) Forfeited (168,443 ) $ 10.85 $ (105 ) Warrants outstanding at September 27, 2015 140,320 $ 10.03 $ 366 Warrants exercisable at September 27, 2015 62,350 $ 7.75 $ 305 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 9 Months Ended |
Sep. 27, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated results for the periods indicated: Thirteen Weeks Ended Thirty-nine Weeks Ended September 27, 2015 September 28, 2014 September 27, 2015 September 28, 2014 Revenue: Commercial $ 23,927,189 $ 21,419,076 $ 62,354,584 $ 59,853,064 Multifamily 14,073,077 11,602,845 31,743,075 25,967,611 Professional Staffing 22,170,557 14,985,689 56,738,701 44,054,511 Total $ 60,170,823 $ 48,007,610 $ 150,836,360 $ 129,875,186 Depreciation: Commercial $ 23,460 $ 19,756 $ 68,608 $ 55,364 Multifamily 8,342 (20,393 ) 36,745 18,245 Professional Staffing 19,100 7,730 43,309 16,115 Corporate 45,786 41,613 83,824 41,612 Total $ 96,688 $ 48,706 $ 232,486 $ 131,336 Amortization: Commercial $ 159,041 $ 197,189 $ 540,703 $ 768,249 Multifamily 37,708 37,708 113,125 113,125 Professional Staffing 1,000,700 769,701 2,848,100 2,573,767 Corporate — — — — Total $ 1,197,449 $ 1,004,598 $ 3,501,928 $ 3,455,141 Operating income: Commercial $ 1,592,570 $ 1,173,812 $ 3,658,154 $ 3,070,475 Multifamily 2,405,266 1,704,319 4,731,719 3,152,583 Professional Staffing 2,041,230 866,703 3,918,553 1,812,638 Corporate (1,181,137 ) (1,035,192 ) (3,909,783 ) (3,846,842 ) Total $ 4,857,929 $ 2,709,642 $ 8,398,643 $ 4,188,854 Capital expenditures: Commercial $ 30,541 $ 14,300 $ 136,672 $ 64,826 Multifamily 15,219 7,911 73,779 19,274 Professional Staffing 88,572 41,347 142,590 83,501 Corporate 16,075 30,991 157,362 93,929 Total $ 150,407 $ 94,549 $ 510,403 $ 261,530 September 27, December 28, Total Assets: Commercial $ 20,275,954 $ 19,810,747 Multifamily 8,522,420 6,072,296 Professional Staffing 30,270,499 18,810,198 Corporate 9,192,376 9,079,327 Total $ 68,261,249 $ 53,772,568 |
SUBSEQUENT EVENTS (Tables)
SUBSEQUENT EVENTS (Tables) | 9 Months Ended |
Sep. 27, 2015 | |
Subsequent Events [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | Unaudited revenues of VTS for the periods indicated are presented below (in thousands): Thirty-nine Weeks Ended Nine Months Ended September 27, 2015 September 30, 2014 Revenues $ 25,226 $ 25,353 |
NATURE OF OPERATIONS (Details T
NATURE OF OPERATIONS (Details Textual) | 9 Months Ended |
Sep. 27, 2015Segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 27, 2015 | Sep. 28, 2014 | Sep. 27, 2015 | Sep. 28, 2014 | Dec. 28, 2014 | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Accumulated depreciation and amortization, property, plant, and equipment | $ 735,053 | $ 735,053 | $ 564,331 | ||
Amortization of financing costs | $ 42,441 | $ 40,265 | $ 129,141 | $ 133,038 | |
Federal statutory income tax rate, percent | 34.00% | 34.00% | |||
Minimum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Fiscal period, length | 364 days | 364 days | |||
Useful life | 3 years | ||||
Maximum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Fiscal period, length | 371 days | 371 days | |||
Useful life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Credit Concentration Risk | 9 Months Ended | |
Sep. 27, 2015 | Sep. 28, 2014 | |
North Carolina | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 12.00% | |
Rhode Island | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 19.00% | |
Texas | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 43.00% | |
Sales Revenue, Net | North Carolina | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 14.00% | |
Sales Revenue, Net | Rhode Island | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 22.00% | |
Sales Revenue, Net | Texas | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 32.00% |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2015 | Sep. 28, 2014 | Sep. 27, 2015 | Sep. 28, 2014 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||
Allowance at beginning of the period | $ 812,964 | $ 518,518 | $ 748,187 | $ 439,886 |
Provision for doubtful accounts | 146,291 | 136,066 | 371,953 | 312,333 |
Amounts written off, net of recoveries | (219,395) | (136,066) | (380,280) | (233,701) |
Allowance at end of the period | $ 739,860 | $ 518,518 | $ 739,860 | $ 518,518 |
SUMMARY OF SIGNIFICANT ACCOUN33
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2015 | Sep. 28, 2014 | Sep. 27, 2015 | Sep. 28, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Basic (shares) | 7,359,632 | 5,608,301 | 6,978,309 | 5,602,160 |
Effect of dilutive securities: | ||||
Stock options | 181,810 | 74,612 | 181,810 | 0 |
Warrants | 21,399 | 69,401 | 21,399 | 0 |
Dilutive potential common shares | 7,573,530 | 5,752,314 | 7,181,518 | 5,602,160 |
Excluded from dilutive weighted-average shares outstanding: | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 21,042 | 138,942 | 99,012 | 527,663 |
Employee Stock Option | ||||
Excluded from dilutive weighted-average shares outstanding: | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 21,042 | 51,042 | 21,042 | 383,892 |
Warrant | ||||
Excluded from dilutive weighted-average shares outstanding: | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 0 | 87,900 | 77,970 | 143,771 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) | Feb. 23, 2015 | Sep. 27, 2015 | Dec. 28, 2014 |
Business Acquisition [Line Items] | |||
Goodwill | $ 7,089,257 | $ 6,404,367 | |
D&W Talent, LLC | |||
Business Acquisition [Line Items] | |||
Accounts receivable | $ 2,463,724 | ||
Property and equipment | 22,100 | ||
Prepaid expenses and other current assets | 3,299 | ||
Intangible assets | 8,254,000 | ||
Goodwill | 684,890 | ||
Liabilities assumed | (611,108) | ||
Total net assets acquired | 10,816,905 | ||
Cash | 8,781,091 | ||
Fair value of contingent consideration | 2,035,814 | ||
Total fair value of consideration transferred for acquired business | $ 10,816,905 |
ACQUISITIONS (Details 1)
ACQUISITIONS (Details 1) - D&W Talent, LLC - USD ($) | Feb. 23, 2015 | Sep. 27, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Total | $ 8,254,000 | |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets acquired | 4,508,000 | |
Covenants not to compete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | 250,000 | |
Useful life | 5 years | |
Customer list | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | $ 3,496,000 | |
Useful life | 5 years |
ACQUISITIONS (Details 2)
ACQUISITIONS (Details 2) - D&W Talent, LLC - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2015 | Sep. 28, 2014 | Sep. 27, 2015 | Sep. 28, 2014 | |
Business Acquisition [Line Items] | ||||
Revenues | $ 60,171 | $ 53,438 | $ 153,890 | $ 142,099 |
Net income (loss) | $ 2,215 | $ 716 | $ 4,027 | $ (455) |
Income (loss) per share: | ||||
Basic (in dollar per share) | $ 0.30 | $ 0.13 | $ 0.58 | $ (0.08) |
Diluted (in dollar per share) | $ 0.29 | $ 0.12 | $ 0.56 | $ (0.08) |
ACQUISITIONS (Details Textual)
ACQUISITIONS (Details Textual) - USD ($) | Jun. 26, 2015 | Feb. 23, 2015 | Sep. 27, 2015 | Sep. 28, 2014 | Sep. 27, 2015 | Sep. 28, 2014 |
Business Acquisition [Line Items] | ||||||
Revenues | $ 60,170,823 | $ 48,007,610 | $ 150,836,360 | $ 129,875,186 | ||
D&W Talent, LLC | ||||||
Business Acquisition [Line Items] | ||||||
Initial cash paid for acquisition | $ 8,500,000 | |||||
Business combination contingent consideration | $ 3,500,000 | |||||
Business combination, period of contingency | 3 years | |||||
Fair value of contingent consideration | $ 2,035,814 | |||||
Period for true-up of acquired working capital | 120 days | |||||
Payments to acquire businesses, gross, working capital adjustment | $ 281,091 | |||||
Acquisition related costs | $ 272,687 | |||||
Revenues | $ 6,000,000 | $ 13,800,000 |
INTANGIBLE ASSETS (Details Text
INTANGIBLE ASSETS (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 27, 2015 | Sep. 28, 2014 | Sep. 27, 2015 | Sep. 28, 2014 | Dec. 28, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible assets, accumulated amortization | $ 22,255,670 | $ 22,255,670 | $ 18,753,742 | ||
Amortization of intangible assets | 1,197,449 | $ 1,004,598 | 3,501,928 | $ 3,455,141 | |
Trade name | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Decrease in amortization expense | $ 595,500 | ||||
Decrease in earnings per share, basic | $ 0.09 | ||||
Decrease in earnings per share, diluted | $ 0.08 | ||||
Professional Staffing | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Indefinite-lived trade names | $ 2,537,566 | $ 2,537,566 | $ 2,537,566 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Sep. 27, 2015 | Dec. 28, 2014 |
Accrued Liabilities, Current [Abstract] | ||
Temporary worker payable | $ 4,103,077 | $ 3,014,315 |
Accrued bonuses and commissions | 1,101,356 | 503,024 |
Payroll and payroll related | 5,054,121 | 2,949,958 |
Other | 40,759 | 660,038 |
Accrued liabilities, current | $ 10,299,313 | $ 7,127,335 |
DEBT (Details Textual)
DEBT (Details Textual) | Aug. 21, 2015USD ($) | Feb. 23, 2015 | Feb. 22, 2015 | Jan. 29, 2014USD ($) | Sep. 27, 2015USD ($)Private_lender | Sep. 28, 2014USD ($) | Mar. 30, 2014USD ($) | Sep. 27, 2015USD ($)Private_lender | Sep. 28, 2014USD ($) | Dec. 28, 2014USD ($) | Jan. 28, 2014USD ($) |
Debt Instrument [Line Items] | |||||||||||
Loss on extinguishment of debt | $ 986,835 | $ 438,507 | $ 0 | $ 438,507 | $ 0 | ||||||
Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, borrowing capacity, percentage | 85.00% | 80.00% | |||||||||
Line of credit facility, maximum borrowing capacity | $ 20,000,000 | ||||||||||
Loss on extinguishment of debt | $ 438,507 | ||||||||||
Long-term line of credit | $ 4,900,000 | ||||||||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate | 3.00% | ||||||||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate | 3.75% | ||||||||||
Term Loan A | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, maximum borrowing capacity | 11,300,000 | ||||||||||
Expiration date | Jan. 29, 2014 | ||||||||||
Line of credit facility, previous borrowing capacity | $ 7,100,000 | ||||||||||
Term Loan B | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Subordinated debt | $ 8,000,000 | ||||||||||
Senior Subordinated Loans | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Loss on extinguishment of debt | $ 986,835 | ||||||||||
Subordinated Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Number of private lenders | Private_lender | 2 | 2 | |||||||||
Credit Agreement | Texas Capital Bank, National Association (TCB) | Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, borrowing capacity, percentage | 85.00% | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 | ||||||||||
Long-term line of credit | $ 9,800,000 | $ 9,800,000 | |||||||||
Debt instrument, basis spread on variable rate | 0.05% | ||||||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.25% | ||||||||||
Credit Agreement | Texas Capital Bank, National Association (TCB) | Revolving Credit Facility | Federal Funds Rate | Scenario One | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate | 0.50% | ||||||||||
Credit Agreement | Texas Capital Bank, National Association (TCB) | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate | 3.25% | ||||||||||
Credit Agreement | Texas Capital Bank, National Association (TCB) | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Scenario Two | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate | 1.00% | ||||||||||
Senior Subordinated Credit Agreement | Patriot Capital III SBIC, L.P. | Senior Subordinated Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | 14,250,000 | $ 14,250,000 | |||||||||
Senior Subordinated Credit Agreement | Patriot Capital III, L.P. | Senior Subordinated Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 750,000 | $ 750,000 |
DEBT (Details)
DEBT (Details) - Credit Agreement - Texas Capital Bank, National Association (TCB) - Revolving Credit Facility | Sep. 27, 2015USD ($) |
Line of Credit Facility [Line Items] | |
Initial borrowing amount | $ 750,000 |
Debt instrument, interest rate, stated percentage for initial borrowing amount | 3.75% |
Second borrowing amount | $ 3,000,000 |
Debt instrument, interest rate, stated percentage for second borrowing amount | 3.46% |
Third borrowing amount | $ 3,000,000 |
Debt instrument, interest rate, stated percentage for third borrowing amount | 3.52% |
Fourth borrowing amount | $ 3,000,000 |
Debt instrument, interest rate, stated percentage for fourth borrowing amount | 3.59% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | 9 Months Ended | |
Sep. 27, 2015 | Dec. 28, 2014 | |
Fair Value Disclosures [Abstract] | ||
Put option liability | $ 964,129 | $ 2,497,014 |
Number of shares sold on open market, shares containing put right | 133,741 |
EQUITY (Details Textual)
EQUITY (Details Textual) - USD ($) | May. 06, 2015 | Sep. 27, 2015 | Sep. 28, 2014 | Dec. 28, 2014 |
Equity [Line Items] | ||||
Common stock, shares authorized (in shares) | 19,500,000 | 19,500,000 | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 | ||
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||
Common stock, shares issued (in shares) | 7,379,473 | 6,598,145 | ||
Net proceeds from issuance of common stock | $ 7,025,382 | $ 0 | ||
Private Placement | ||||
Equity [Line Items] | ||||
Common stock, par value (in USD per share) | $ 0.01 | |||
Common stock, shares issued (in shares) | 636,500 | |||
Net proceeds from issuance of common stock | $ 7,001,500 | |||
Debt issuance costs incurred during noncash or partial noncash transaction | 667,256 | |||
Payments for commissions | $ 420,090 | |||
Private Placement | Common Stock | ||||
Equity [Line Items] | ||||
Shares issued (in dollars per share) | $ 11 | |||
Sale of stock, percentage of investors ownership before transaction | 9.60% |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - Employee Stock Option - $ / shares | 9 Months Ended | |
Sep. 27, 2015 | Sep. 28, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value of options (in dollars per share) | $ 2.61 | $ 2.84 |
Weighted-average risk-free interest rate | 1.00% | 1.00% |
Dividend yield | 8.40% | 0.00% |
Weighted-average volatility factor | 47.00% | 49.00% |
Weighted average expected life (in years) | 5 years 8 months 9 days | 5 years 7 months 2 days |
SHARE-BASED COMPENSATION (Det45
SHARE-BASED COMPENSATION (Details 1) - Employee Stock Option - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 27, 2015 | Sep. 28, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Beginning number of Shares, outstanding | 585,466 | 0 |
Granted | 179,000 | 596,363 |
Exercised | (48,800) | (5,000) |
Forfeited | (45,000) | |
Number of Shares, outstanding | 670,666 | 591,363 |
Ending number of shares, options exercisable | 358,266 | 303,263 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Beginning balance of options outstanding | $ 6.52 | $ 0 |
Granted | 11 | 6.51 |
Exercised | 6.48 | 6.25 |
Forfeited | 6.25 | |
Ending balance of options outstanding | 7.73 | 6.52 |
Options exercisable at end of period | $ 7.01 | $ 6.70 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Intrinsic Value [Abstract] | ||
Beginning balance of options outstanding | $ 3,204 | $ 0 |
Granted | 294 | 3,268 |
Exercised | (258) | (29) |
Forfeited | (279) | |
Ending balance of options outstanding | 3,343 | 3,235 |
Options exercisable at end of period | $ 2,015 | $ 1,604 |
SHARE-BASED COMPENSATION (Det46
SHARE-BASED COMPENSATION (Details 2) - Warrant - $ / shares | 9 Months Ended | |
Sep. 27, 2015 | Sep. 28, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value of warrants (in dollars per share) | $ 1.62 | $ 1.76 |
Weighted-average risk-free interest rate | 0.50% | 0.10% |
Dividend yield | 8.20% | 0.00% |
Weighted-average volatility factor | 49.00% | 49.00% |
Weighted average expected life (in years) | 2 years 5 months 23 days | 2 years 4 months 24 days |
SHARE-BASED COMPENSATION (Det47
SHARE-BASED COMPENSATION (Details 3) - Warrant - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 27, 2015 | Sep. 28, 2014 | Dec. 28, 2014 | Dec. 29, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||||
Number of warrants, outstanding | 326,822 | 224,205 | 224,205 | |
Granted | 77,970 | 25,000 | ||
Exercised | (96,029) | (799) | ||
Forfeited | (168,443) | |||
Number of warrants, outstanding | 140,320 | 248,406 | 326,822 | 224,205 |
Number of warrants, exercisable | 62,350 | 223,406 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Weighted Average Exercise Price [Roll Forward] | ||||
Outstanding warrants, weighted average exercise price (in dollars per share) | $ 10.03 | $ 7.38 | $ 8.04 | $ 7.08 |
Granted warrants, weighted average exercise price (in dollars per share) | 11.85 | 10 | ||
Exercised warrants, weighted average exercise price (in dollars per share) | 4.58 | 4.51 | ||
Forfeited warrants, weighted average exercise price (in dollars per share) | 10.85 | |||
Outstanding warrants, weighted average exercise price (in dollars per share) | 10.03 | 7.38 | $ 8.04 | $ 7.08 |
Exercisable warrants, weighted average exercise price (in dollars per share) | $ 7.75 | $ 7.09 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Intrinsic Value [Roll Forward] | ||||
Outstanding warrants, intrinsic value | $ 1,226 | $ 1,126 | $ 1,126 | |
Granted warrants, intrinsic value | 62 | 50 | ||
Exercised warrants, intrinsic value | (755) | (6) | ||
Forfeited warrants, intrinsic value | (105) | |||
Outstanding warrants, intrinsic value | 366 | 1,145 | $ 1,226 | $ 1,126 |
Exercisable warrants, intrinsic value | $ 305 | $ 1,095 |
SHARE-BASED COMPENSATION (Det48
SHARE-BASED COMPENSATION (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2015 | Sep. 28, 2014 | Sep. 27, 2015 | Sep. 28, 2014 | |
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost related to stock awards | $ 65,120 | |||
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost related to stock awards | $ 48,564 | $ 78,859 | $ 225,039 | 961,747 |
Unamortized stock compensation expense | 644,485 | $ 644,485 | ||
Unamortized stock compensation expense, recognition period | 2 years 11 months 27 days | |||
Warrant | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost related to stock awards | 1 | $ 12,624 | $ 6,524 | $ 91,262 |
Unamortized warrant compensation expense | $ 0 | $ 0 | ||
Granted | 77,970 | 25,000 | ||
Granted warrants, weighted average exercise price (in dollars per share) | $ 11.85 | $ 10 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Textual) | Jan. 29, 2014USD ($) | Sep. 27, 2015USD ($) | Sep. 28, 2014USD ($) | Sep. 27, 2015USD ($)Investor | Sep. 28, 2014USD ($) |
Related Party Transactions [Abstract] | |||||
Related party, number of investors | Investor | 2 | ||||
Loss on extinguishment of debt | $ 986,835 | $ 438,507 | $ 0 | $ 438,507 | $ 0 |
EMPLOYEE BENEFIT PLAN (Details)
EMPLOYEE BENEFIT PLAN (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2015 | Sep. 28, 2014 | Sep. 27, 2015 | Sep. 28, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined contribution plan, cost recognized | $ 69,405 | $ 60,111 | $ 187,856 | $ 159,518 |
First 3% Employee Compensation | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined contribution plan, employer matching contribution, percent of match | 100.00% | |||
Defined contribution plan, employer matching contribution, percent of employees' gross pay | 3.00% | |||
Next 2% Employee Compensation | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined contribution plan, employer matching contribution, percent of match | 50.00% | |||
Defined contribution plan, employer matching contribution, percent of employees' gross pay | 2.00% |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 27, 2015USD ($)stateoffice | Sep. 28, 2014USD ($) | Sep. 27, 2015USD ($)stateofficeSegment | Sep. 28, 2014USD ($) | Dec. 28, 2014USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | Segment | 3 | ||||
Number of offices | office | 40 | 40 | |||
Number of states in which entity operates | state | 15 | 15 | |||
Revenues | $ 60,170,823 | $ 48,007,610 | $ 150,836,360 | $ 129,875,186 | |
Depreciation | 96,688 | 48,706 | 232,486 | 131,336 | |
Amortization | 1,197,449 | 1,004,598 | 3,501,928 | 3,455,141 | |
Operating income | 4,857,929 | 2,709,642 | 8,398,643 | 4,188,854 | |
Capital expenditures | 150,407 | 94,549 | 510,403 | 261,530 | |
Total assets | 68,261,249 | 68,261,249 | $ 53,772,568 | ||
Operating Segments | Commercial | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 23,927,189 | 21,419,076 | 62,354,584 | 59,853,064 | |
Depreciation | 23,460 | 19,756 | 68,608 | 55,364 | |
Amortization | 159,041 | 197,189 | 540,703 | 768,249 | |
Operating income | 1,592,570 | 1,173,812 | 3,658,154 | 3,070,475 | |
Capital expenditures | 30,541 | 14,300 | 136,672 | 64,826 | |
Total assets | 20,275,954 | 20,275,954 | 19,810,747 | ||
Operating Segments | Multifamily | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 14,073,077 | 11,602,845 | 31,743,075 | 25,967,611 | |
Depreciation | 8,342 | (20,393) | 36,745 | 18,245 | |
Amortization | 37,708 | 37,708 | 113,125 | 113,125 | |
Operating income | 2,405,266 | 1,704,319 | 4,731,719 | 3,152,583 | |
Capital expenditures | 15,219 | 7,911 | 73,779 | 19,274 | |
Total assets | 8,522,420 | 8,522,420 | 6,072,296 | ||
Operating Segments | Professional Staffing | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 22,170,557 | 14,985,689 | 56,738,701 | 44,054,511 | |
Depreciation | 19,100 | 7,730 | 43,309 | 16,115 | |
Amortization | 1,000,700 | 769,701 | 2,848,100 | 2,573,767 | |
Operating income | 2,041,230 | 866,703 | 3,918,553 | 1,812,638 | |
Capital expenditures | 88,572 | 41,347 | 142,590 | 83,501 | |
Total assets | 30,270,499 | 30,270,499 | 18,810,198 | ||
Corporate, Non-Segment | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation | 45,786 | 41,613 | 83,824 | 41,612 | |
Amortization | 0 | 0 | 0 | 0 | |
Operating income | (1,181,137) | (1,035,192) | (3,909,783) | (3,846,842) | |
Capital expenditures | 16,075 | $ 30,991 | 157,362 | $ 93,929 | |
Total assets | $ 9,192,376 | $ 9,192,376 | $ 9,079,327 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Oct. 27, 2015 | Sep. 28, 2015 | Sep. 27, 2015 | Sep. 28, 2014 | Sep. 27, 2015 | Sep. 28, 2014 |
Business Acquisition [Line Items] | ||||||
Revenues | $ 60,170,823 | $ 48,007,610 | $ 150,836,360 | $ 129,875,186 | ||
Common stock, dividends, per share, declared | $ 0.25 | |||||
Subsequent Event | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, dividends, per share, declared | $ 0.25 | |||||
Technology Services, Inc., Vision Technology Services, LLC, and VTS-VM | ||||||
Business Acquisition [Line Items] | ||||||
Revenues | $ 25,226,000 | $ 25,353,000 | ||||
Technology Services, Inc., Vision Technology Services, LLC, and VTS-VM | Subsequent Event | ||||||
Business Acquisition [Line Items] | ||||||
Initial cash paid for acquisition | $ 10,000,000 | |||||
Business combination contingent consideration | $ 10,800,000 | |||||
Business combination, period of contingency | 3 years | |||||
Business acquisition, period of provisional true-up of acquired working capital | 120 days |