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Washington
|
|
91-1287341
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(State of Incorporation)
|
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(IRS Employer ID)
|
|
|
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1015 A Street, Tacoma, Washington
|
|
98402
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(Address of principal executive offices)
|
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(Zip Code)
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Title of each class
|
|
Name of each exchange on which registered
|
Common Stock no par value
|
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The New York Stock Exchange
|
Large accelerated filer
|
x
|
Accelerated filer
|
¨
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Non-accelerated filer
|
¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
|
¨
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Page
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PART I
|
||
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
PART II
|
||
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
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||
PART III
|
||
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
PART IV
|
||
Item 15.
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||
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||
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Item 1.
|
BUSINESS
|
•
|
Labor Ready for on-demand, general labor;
|
•
|
Spartan Staffing for skilled manufacturing, assembly, and logistics labor;
|
•
|
CLP Resources for skilled trades for commercial, industrial, and energy construction as well as building and plant maintenance;
|
•
|
PlaneTechs for skilled mechanics and technicians for the aviation and transportation industries;
|
•
|
Centerline Drivers for temporary and dedicated drivers for the transportation and distribution industries; and
|
•
|
Staff Management | SMX ("Staff Management") for on-premise staffing and management of a facility's contingent workforce for manufacturing, assembly, and logistics. Newly acquired SIMOS will expand our on-premise contingent workforce staffing and management operations for warehousing and distribution.
|
•
|
Provide blue-collar contingent labor services to our customers;
|
•
|
Build a contingent workforce through recruiting, screening, and on-boarding using a broad network of local branch locations, customer on-premise locations, and national service centers;
|
•
|
Assign contingent workers to customers' work sites and facilities where they ultimately work under the supervision of our customers;
|
•
|
Drive profitability by managing the bill rates to our customers and the pay rates to our workers. Profitable growth requires increased volume, bill rates that grow faster than pay rates, and/or leveraging our cost structure;
|
•
|
Utilize centralized support services to serve our customers; and
|
•
|
Use innovative technology to improve our ability to recruit quality workers, effectively match workers to the needs of our customers, manage our contingent workforce, and meet our customers' needs to efficiently and effectively improve productivity.
|
•
|
Cost:
The majority of customers are able to reduce costs associated with their internal human resource cost structure by deploying an RPO solution for some or all of their recruiting needs. Companies are increasingly viewing RPO as an attractive and cost effective alternative to contingent search firms.
|
•
|
Scalability:
RPO providers can add significant scalability to a company's recruiting and hiring efforts, including accommodating seasonal, irregular, and burst hiring without being overstaffed during less busy periods. Providers also help customers increase efficiency by standardizing processes and facilitating transitions for candidates and employees.
|
•
|
Access to Talent:
RPO programs can access numerous sources to prospect for the best talent more quickly, thereby delivering a better outcome for the customer. RPO solutions are typically able to source higher quality candidates well suited to the position, leading to a lower turnover rate. RPO offers technology-enabled recruiting to address the rapidly changing employment demographics, shortage of skilled professional workers, and dynamic changes to how workers connect to work opportunities.
|
•
|
Vendor Consolidation:
As an organization's spend on contingent workforces rises, it becomes increasingly interested in reducing the administrative burden of managing multiple outside vendors, having consistency among contractors and processes, and maintaining robust performance tracking and analytics.
|
•
|
Access to Talent:
An MSP solution allows a company access to a large variety of vendors with the efficiency of working with one supplier. An MSP can access numerous vendors to find the best talent at the best price more quickly, thereby delivering a better outcome for the customer.
|
•
|
Cost Savings
: Vendor consolidation can achieve significant efficiencies through enhanced scale and cost advantages such as single point of contact, standardized contracts, and consolidated invoicing and reporting. MSP programs achieve cost savings through economies of scale with suppliers that would not be obtainable otherwise.
|
•
|
Compliance Pressure
: Demand for contingent employee sourcing and workforce management solutions is driven by increasing work eligibility legislation, and compliance monitoring to ensure correct worker classification in order to properly address tax withholding, overtime, Social Security, unemployment, and healthcare obligations to avoid government penalties and lawsuits. Our MSP solution addresses these needs.
|
•
|
The addition of Seaton and the expansion of our services with the acquisition of the SIMOS on-premise workforce management solutions and the Aon Hewitt RPO services added new services and capabilities to better meet our objective of providing customers with the talent and flexible workforce solutions they need to enhance business performance.
|
•
|
We remain committed to building the specialization of our sales, recruiting, and service teams, while creating a more seamless experience for our customers to access all of our services with more comprehensive solutions to enhance their performance and our growth. Our service lines offer complementary workforce solutions with unique value propositions to meet our customers' demand for talent.
|
•
|
We remain committed to advancing the use of mobile technology in sourcing and connecting talent to customers and meeting their need for both contingent and permanent employee workforce solutions. We expect that mobile technology and digitizing our business model will differentiate us from the competition and allow us to provide greater access to high-quality talent, connect that talent with our customers, and meet our customers' needs for both contingent workers and permanent employees. It will also lower the cost of our delivery model.
|
•
|
As the economy grows, we will continue to evaluate opportunities to expand our market presence for staffing services. All of our multi-location service lines have opportunities to expand their geographical reach through new physical
|
•
|
Our MSP solution is focused on domestic middle market companies with a growing dependence on contingent labor. We are uniquely positioned to supply blue-collar contingent workers to our customers and with our MSP solution to manage the full range of their contingent labor needs.
|
•
|
We are recognized as an industry leader for RPO services. RPO services are in the early stages of their adoption cycle and therefore we believe they have significant growth potential. The success of early adopters is generating greater opportunity to expand our service offering. We have a differentiated service that leverages innovative technology for high-volume sourcing and dedicated client service teams for connecting people to opportunities. We have a track record of helping our customers reduce the cost of hiring, adding significant scalability to recruiting and hiring, and accessing numerous sources to prospect for the best talent quickly, thereby delivering a better outcome for the customer. Companies are facing rapidly changing employment demographics, shortage of talent, and dynamic changes to how people connect to work opportunities. Our solution addresses these growing challenges. Global companies are looking for global solutions. The addition of the Aon Hewitt RPO services will accelerate our global expansion of RPO services.
|
Item 1A.
|
RISK FACTORS
|
Item 1B.
|
UNRESOLVED STAFF COMMENTS
|
Item 2.
|
PROPERTIES
|
Item 3.
|
LEGAL PROCEEDINGS
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Item 5.
|
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
High
|
|
Low
|
||||
2015
|
|
|
|
||||
Fourth Quarter
|
$
|
30.25
|
|
|
$
|
21.64
|
|
Third Quarter
|
$
|
31.11
|
|
|
$
|
21.58
|
|
Second Quarter
|
$
|
31.50
|
|
|
$
|
23.99
|
|
First Quarter
|
$
|
25.50
|
|
|
$
|
19.82
|
|
2014
|
|
|
|
||||
Fourth Quarter
|
$
|
27.03
|
|
|
$
|
20.00
|
|
Third Quarter
|
$
|
31.30
|
|
|
$
|
24.88
|
|
Second Quarter
|
$
|
30.64
|
|
|
$
|
25.38
|
|
First Quarter
|
$
|
29.53
|
|
|
$
|
22.50
|
|
Period
|
Total number
of shares
purchased (1)
|
|
Weighted
average price
paid per
share (2)
|
|
Total number of shares
purchased as part of
publicly announced plans
or programs
|
|
Maximum number of shares (or
approximate dollar value) that
may yet be purchased under
plans or programs at period
end (3)
|
||||
9/26/15 through 10/23/15
|
3,225
|
|
|
|
$23.34
|
|
|
—
|
|
|
$35.2 million
|
10/24/15 through 11/20/15
|
692
|
|
|
|
$28.75
|
|
|
—
|
|
|
$35.2 million
|
11/21/15 through 12/25/15
|
1,635
|
|
|
|
$29.81
|
|
|
—
|
|
|
$35.2 million
|
Total
|
5,552
|
|
|
|
$25.92
|
|
|
—
|
|
|
|
(1)
|
During the thirteen weeks ended
December 25, 2015
, we purchased
5,552
shares in order to satisfy employee tax withholding obligations upon the vesting of restricted stock. These shares were not acquired pursuant to any publicly announced purchase plan or program.
|
(2)
|
Weighted average price paid per share does not include any adjustments for commissions.
|
(3)
|
Our Board of Directors authorized a $75.0 million share repurchase program in July 2011 that does not have an expiration date. As of
December 25, 2015
,
$35.2 million
remains available for repurchase of our common stock under the current authorization.
|
Total Return Analysis
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||||||
TrueBlue, Inc.
|
$
|
100
|
|
|
$
|
77
|
|
|
$
|
86
|
|
|
$
|
144
|
|
|
$
|
126
|
|
|
$
|
147
|
|
S&P SmallCap 600 Index
|
100
|
|
|
101
|
|
|
115
|
|
|
166
|
|
|
177
|
|
|
175
|
|
||||||
S&P 1500 Human Resources and Employment Services Index
|
100
|
|
|
85
|
|
|
93
|
|
|
167
|
|
|
170
|
|
|
180
|
|
Item 6.
|
SELECTED FINANCIAL DATA
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue from services
|
$
|
2,695,680
|
|
|
$
|
2,174,045
|
|
|
$
|
1,668,929
|
|
|
$
|
1,389,530
|
|
|
$
|
1,316,013
|
|
Cost of services
|
2,060,007
|
|
|
1,637,066
|
|
|
1,226,626
|
|
|
1,017,145
|
|
|
968,967
|
|
|||||
Gross profit
|
635,673
|
|
|
536,979
|
|
|
442,303
|
|
|
372,385
|
|
|
347,046
|
|
|||||
Selling, general and administrative expenses
|
495,988
|
|
|
425,777
|
|
|
362,248
|
|
|
300,459
|
|
|
282,828
|
|
|||||
Depreciation and amortization
|
41,843
|
|
|
29,474
|
|
|
20,472
|
|
|
18,890
|
|
|
16,384
|
|
|||||
Interest and other income (expense), net
|
(1,395
|
)
|
|
116
|
|
|
1,354
|
|
|
1,569
|
|
|
1,490
|
|
|||||
Income before tax expenses
|
96,447
|
|
|
81,844
|
|
|
60,937
|
|
|
54,605
|
|
|
49,324
|
|
|||||
Income tax expense
|
25,200
|
|
|
16,169
|
|
|
16,013
|
|
|
20,976
|
|
|
18,533
|
|
|||||
Net income
|
$
|
71,247
|
|
|
$
|
65,675
|
|
|
$
|
44,924
|
|
|
$
|
33,629
|
|
|
$
|
30,791
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per diluted share
|
$
|
1.71
|
|
|
$
|
1.59
|
|
|
$
|
1.11
|
|
|
$
|
0.84
|
|
|
$
|
0.73
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average diluted shares outstanding
|
41,622
|
|
|
41,176
|
|
|
40,502
|
|
|
39,862
|
|
|
42,322
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At Fiscal Year End
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
|
$
|
322,382
|
|
|
$
|
228,577
|
|
|
$
|
235,049
|
|
|
$
|
203,610
|
|
|
$
|
168,326
|
|
Total assets
|
1,266,835
|
|
|
1,066,671
|
|
|
719,461
|
|
|
601,743
|
|
|
560,769
|
|
|||||
Long-term liabilities
|
503,286
|
|
|
410,107
|
|
|
204,692
|
|
|
154,513
|
|
|
154,901
|
|
|||||
Total liabilities
|
731,262
|
|
|
597,337
|
|
|
326,101
|
|
|
268,069
|
|
|
267,190
|
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
The year ended December 25, 2015 included a full year of Staffing Solutions Holdings, Inc. ("Seaton") revenue of
$810.8 million
or
18.1%
of our revenue growth or 15.8% excluding organic revenue growth. The Seaton acquisition was completed in the prior year, effective June 30, 2014, the first business day of the third quarter. Revenue was
$394.4 million
from the date of acquisition through our year ended December 26, 2014. The acquisition of Seaton added full service lines for on-premise staffing for large scale exclusive sourcing, screening, recruitment, and management of a customer's on-premise contingent labor workforce; recruitment process outsourcing for high-volume sourcing, screening, and recruiting of permanent employees for all major industries and jobs; and managed service provider solutions, which provides customers with improved quality and spend management of their contingent labor vendors. In the first year of operations, Seaton delivered on our expectations for revenue and income from operations, and continues to deliver organic revenue growth.
|
•
|
Organic revenue growth for the year ended December 25, 2015 was
7.2%
. Quarterly year over year organic revenue growth was
0.4%
for the first quarter,
1.4%
for the second quarter,
8.0%
for the third quarter, and
14.1%
for the fourth quarter. The annual and accelerating quarterly organic revenue growth was driven by widespread improvement across most of our service lines, geographies, and the industries we serve. The construction industry saw considerable growth driven by improving momentum in both residential and commercial construction as well as green energy projects. Rapid growth in online commerce resulted in considerable growth in warehousing and distribution. Demand by the transportation industry for our driver workforce solutions continues to see double digit growth. We saw improving trends with small to medium sized customers and continued growth with our national customers. The positive trends are partially offset by continued pressure on the manufacturing industry, which continues to face a challenging export market.
|
•
|
Effective
December 1, 2015
, we acquired SIMOS Insourcing Solutions (“SIMOS”), a leading provider of on-premise workforce management solutions. SIMOS specializes in helping clients streamline warehouse/distribution operations to meet the growing demand for online commerce and supply chain solutions. SIMOS will expand our existing services for on-premise staffing and management of a facility's contingent workforce. SIMOS contributed $22.2 million in revenue or 1.0% of our revenue growth for the fiscal year ended December 25, 2015.
|
|
Years ended
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue from services
|
$
|
2,695,680
|
|
|
$
|
2,174,045
|
|
|
$
|
1,668,929
|
|
Total revenue growth %
|
24.0
|
%
|
|
30.3
|
%
|
|
20.1
|
%
|
|||
|
|
|
|
|
|
||||||
Gross profit
|
$
|
635,673
|
|
|
$
|
536,979
|
|
|
$
|
442,303
|
|
Gross profit as a % of revenue
|
23.6
|
%
|
|
24.7
|
%
|
|
26.5
|
%
|
|||
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
$
|
495,988
|
|
|
$
|
425,777
|
|
|
$
|
362,248
|
|
Selling, general and administrative expenses as a % of revenue
|
18.4
|
%
|
|
19.6
|
%
|
|
21.7
|
%
|
|||
|
|
|
|
|
|
||||||
Depreciation and amortization
|
$
|
41,843
|
|
|
$
|
29,474
|
|
|
$
|
20,472
|
|
Depreciation and amortization as a % of revenue
|
1.6
|
%
|
|
1.4
|
%
|
|
1.2
|
%
|
|||
|
|
|
|
|
|
||||||
Income from operations
|
$
|
97,842
|
|
|
$
|
81,728
|
|
|
$
|
59,583
|
|
Income from operations as a % of revenue
|
3.6
|
%
|
|
3.8
|
%
|
|
3.6
|
%
|
|||
|
|
|
|
|
|
||||||
Interest and other income (expense), net
|
$
|
(1,395
|
)
|
|
$
|
116
|
|
|
$
|
1,354
|
|
|
|
|
|
|
|
||||||
Net income
|
$
|
71,247
|
|
|
$
|
65,675
|
|
|
$
|
44,924
|
|
Net income per diluted share
|
$
|
1.71
|
|
|
$
|
1.59
|
|
|
$
|
1.11
|
|
|
Years ended
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue from services
|
$
|
2,695,680
|
|
|
$
|
2,174,045
|
|
|
$
|
1,668,929
|
|
Total revenue growth %
|
24.0
|
%
|
|
30.3
|
%
|
|
20.1
|
%
|
|
Years ended
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Gross profit
|
$
|
635,673
|
|
|
$
|
536,979
|
|
|
$
|
442,303
|
|
Percentage of revenue
|
23.6
|
%
|
|
24.7
|
%
|
|
26.5
|
%
|
|
Years ended
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Selling, general and administrative expenses
|
$
|
495,988
|
|
|
$
|
425,777
|
|
|
$
|
362,248
|
|
Percentage of revenue
|
18.4
|
%
|
|
19.6
|
%
|
|
21.7
|
%
|
|
Years ended
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Depreciation and amortization
|
$
|
41,843
|
|
|
$
|
29,474
|
|
|
$
|
20,472
|
|
Percentage of revenue
|
1.6
|
%
|
|
1.4
|
%
|
|
1.2
|
%
|
|
Years ended
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Interest and other income (expense), net
|
$
|
(1,395
|
)
|
|
$
|
116
|
|
|
$
|
1,354
|
|
|
Years ended
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Income tax expense
|
$
|
25,200
|
|
|
$
|
16,169
|
|
|
$
|
16,013
|
|
Effective income tax rate
|
26.1
|
%
|
|
19.8
|
%
|
|
26.3
|
%
|
|
Years ended
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Effective income tax rate without hiring credits
|
41.6
|
%
|
|
41.1
|
%
|
|
43.4
|
%
|
Hiring credits estimate from current year wages
|
(10.5
|
)
|
|
(10.7
|
)
|
|
(9.5
|
)
|
Effective income tax rate before prior year adjustments
|
31.1
|
|
|
30.4
|
|
|
33.9
|
|
Additional hiring credits from prior year wages
|
(5.0
|
)
|
|
(10.6
|
)
|
|
(7.6
|
)
|
Effective income tax rate with hiring credits
|
26.1
|
%
|
|
19.8
|
%
|
|
26.3
|
%
|
|
Years ended
|
||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Revenue from services
|
|
|
Revenue growth %
|
|
|
|
Revenue growth %
|
|
|
|
Revenue growth %
|
||||||
Staffing Services
|
$
|
2,591,166
|
|
|
21.9%
|
|
$
|
2,125,915
|
|
|
27.4%
|
|
$
|
1,668,929
|
|
|
20.1%
|
Managed Services
|
104,514
|
|
|
117.1%
|
|
48,130
|
|
|
|
|
—
|
|
|
|
|||
Total Company
|
$
|
2,695,680
|
|
|
24.0%
|
|
$
|
2,174,045
|
|
|
30.3%
|
|
$
|
1,668,929
|
|
|
20.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income from operations
|
|
|
% of revenue
|
|
|
|
% of revenue
|
|
|
|
% of revenue
|
||||||
Staffing Services
|
$
|
164,846
|
|
|
6.4%
|
|
$
|
138,205
|
|
|
6.5%
|
|
$
|
113,230
|
|
|
6.8%
|
Managed Services
|
12,344
|
|
|
11.8%
|
|
5,937
|
|
|
12.3%
|
|
—
|
|
|
|
|||
Depreciation and amortization
|
(41,843
|
)
|
|
|
|
(29,474
|
)
|
|
|
|
(20,472
|
)
|
|
|
|||
Corporate unallocated
|
(37,505
|
)
|
|
|
|
(32,940
|
)
|
|
|
|
(33,175
|
)
|
|
|
|||
Total Company
|
97,842
|
|
|
3.6%
|
|
81,728
|
|
|
3.8%
|
|
59,583
|
|
|
3.6%
|
|||
Interest and other income (expense), net
|
(1,395
|
)
|
|
|
|
116
|
|
|
|
|
1,354
|
|
|
|
|||
Income before tax expense
|
$
|
96,447
|
|
|
|
|
$
|
81,844
|
|
|
|
|
$
|
60,937
|
|
|
|
•
|
Effective December 1, 2015, we acquired SIMOS, a leading provider of on-premise workforce management solutions. The acquired operations expand and complement our Staff Management | SMX on-premise services. We expect SIMOS to produce annual revenue of approximately $185 million, or 5.6% of total revenue growth, and operating income of approximately $9 million for fiscal 2016.
|
•
|
Effective January 4, 2016, we acquired Aon Hewitt’s RPO business, a leading provider of recruitment process outsourcing services. The acquired operations expand and complement our PeopleScout services and will be fully integrated with this service line in 2016. We expect the acquired RPO business of Aon Hewitt to produce annual revenue of approximately $65 million, or 2.4% of total revenue growth, and operating income of approximately $10 million for fiscal 2016.
|
•
|
We expect total organic revenue growth of approximately 8% for fiscal 2016 as compared to the prior year. The organic revenue growth expectation of 8% is comparable to that achieved in fiscal 2015 of 7.2%. Our expectations for fiscal 2016 are less than the peak revenue growth of approximately 14% for the fourth quarter of 2015 as compared to the prior year. Revenue growth slowed toward the end of the fourth quarter of 2015. This slowing, which was especially pronounced
|
|
Years ended
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net income
|
$
|
71,247
|
|
|
$
|
65,675
|
|
|
$
|
44,924
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
41,843
|
|
|
29,474
|
|
|
20,472
|
|
|||
Provision for doubtful accounts
|
7,132
|
|
|
11,815
|
|
|
12,063
|
|
|||
Stock-based compensation
|
11,103
|
|
|
11,051
|
|
|
8,412
|
|
|||
Deferred income taxes
|
5,176
|
|
|
12,663
|
|
|
(3,844
|
)
|
|||
Other operating activities
|
446
|
|
|
898
|
|
|
2,116
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(89,474
|
)
|
|
(77,629
|
)
|
|
(4,181
|
)
|
|||
Income tax receivable
|
(16,678
|
)
|
|
(5,696
|
)
|
|
4,113
|
|
|||
Accounts payable and other accrued expenses
|
23,261
|
|
|
(8,683
|
)
|
|
(3,592
|
)
|
|||
Accrued wages and benefits
|
12,203
|
|
|
12,069
|
|
|
(3,643
|
)
|
|||
Workers’ compensation claims reserve
|
14,736
|
|
|
1,579
|
|
|
9,859
|
|
|||
Other assets and liabilities
|
(8,923
|
)
|
|
(5,691
|
)
|
|
(631
|
)
|
|||
Net cash provided by operating activities
|
$
|
72,072
|
|
|
$
|
47,525
|
|
|
$
|
86,068
|
|
•
|
An increase in net income of
$5.6 million
due to a combination of a full year of legacy Seaton results and legacy TrueBlue organic growth.
|
•
|
An increase in accounts payable and other accrued expenses of
$31.9 million
, primarily due to organic revenue growth in the fourth quarter of
14.1%
and timing of payments. Additionally, the prior year accounts payable and accrued expenses were lower due to accelerated vendor payments to facilitate the transition of Seaton to TrueBlue's ERP system.
|
•
|
An increase in workers' compensation claims reserve ("reserve") of
$13.2 million
, primarily due to increased delivery of services. The reserve generally increases as our staffing services increase and decreases when staffing services decline.
|
•
|
An increase in depreciation and amortization of
$12.4 million
due to a full year of amortization of acquired finite-lived intangible assets in connection with our acquisition of Seaton, as compared to half a year in 2014.
|
•
|
An increase in accounts receivable of
$11.8 million
, primarily due to organic revenue growth in the fourth quarter of
14.1%
compared to the same period in the prior year.
|
•
|
An increase in income tax receivable of
$11.0 million
, primarily driven by restoring the Work Opportunity Tax Credit ("WOTC"). WOTC is designed to encourage the hiring of workers from certain disadvantaged targeted categories. The Protecting Americans from Tax Hikes Act was signed into law on December 18, 2015, which restored these WOTC benefits retrospectively from January 1, 2015.
|
•
|
An increase in net income of
$20.8 million
, primarily due to the acquisition of Seaton.
|
•
|
An increase in accounts receivable of
$73.4 million
, primarily due to revenue growth related to the acquisition of Seaton. Demand for Staff Management on-premise services is significantly higher during the fourth quarter in connection with manufacturing and distributing for the holiday season. Historically, legacy TrueBlue accounts receivable peaked in the third quarter and de-leveraged in the fourth quarter.
|
•
|
An increase in deferred taxes of
$16.5 million
, primarily due to nondeductible intangibles acquired in connection with the acquisition of Seaton.
|
|
Years ended
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Capital expenditures
|
$
|
(18,394
|
)
|
|
$
|
(16,918
|
)
|
|
$
|
(13,003
|
)
|
Acquisition of businesses, net of cash acquired
|
(67,500
|
)
|
|
(305,876
|
)
|
|
(77,560
|
)
|
|||
Purchases of marketable securities
|
—
|
|
|
(25,057
|
)
|
|
(40,800
|
)
|
|||
Sales and maturities of marketable securities
|
1,500
|
|
|
44,167
|
|
|
20,050
|
|
|||
Changes in restricted cash, cash equivalents, and investments
|
(20,632
|
)
|
|
(14,753
|
)
|
|
(13,952
|
)
|
|||
Net cash used in investing activities
|
$
|
(105,026
|
)
|
|
$
|
(318,437
|
)
|
|
$
|
(125,265
|
)
|
•
|
Cash used in investing activities of $67.5 million in 2015 was for the acquisition of SIMOS. In the prior year, we acquired Seaton for $305.9 million.
|
•
|
Restricted cash and investments consist primarily of collateral that has been provided or pledged to insurance carriers and state workers' compensation programs. Changes in restricted cash, cash equivalents, and investments increased to $20.6 million for the year ended December 25, 2015 compared to $14.8 million for the same period in the prior year. This increase in cash used in investing activities was primarily due to an increase in collateral requirements paid to our workers' compensation insurance providers due to both organic growth in operations and acquisitions.
|
•
|
Cash used in investing activities increased primarily due to the acquisition of Seaton for $305.9 million.
|
•
|
We sold the majority of our marketable securities during the third quarter of 2014 to help fund our acquisition of Seaton.
|
•
|
Restricted cash and investments consist primarily of collateral that has been provided or pledged to insurance carriers and state workers' compensation programs. Changes in restricted cash, cash equivalents, and investments increased by $14.8 million for fiscal 2014. This increase is primarily due to an increase in the collateral requirements by our workers' compensation insurance providers related to the acquisition of Seaton.
|
|
Years ended
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net proceeds from stock option exercises and employee stock purchase plans
|
$
|
1,563
|
|
|
$
|
2,191
|
|
|
$
|
9,136
|
|
Common stock repurchases for taxes upon vesting of restricted stock
|
(3,869
|
)
|
|
(3,114
|
)
|
|
(2,800
|
)
|
|||
Net change in revolving credit facility
|
46,091
|
|
|
171,994
|
|
|
—
|
|
|||
Proceeds from long-term debt
|
—
|
|
|
—
|
|
|
34,000
|
|
|||
Payments on debt and other liabilities
|
(2,078
|
)
|
|
(2,267
|
)
|
|
(8,681
|
)
|
|||
Other
|
1,079
|
|
|
978
|
|
|
713
|
|
|||
Net cash provided by financing activities
|
$
|
42,786
|
|
|
$
|
169,782
|
|
|
$
|
32,368
|
|
•
|
On January 4, 2016, in connection with the acquisition of the RPO business of Aon Hewitt, we entered into a Third Amendment to the Second Amended and Restated Credit Agreement dated June 30, 2014. The Amendment provides for a temporary
$30 million
increase in our existing
$300 million
revolving line of credit, for a total of
$330 million
. The temporary increase will expire in
$10 million
increments on April 1, May 1, and June 1 of 2016. The Revolving Credit Facility is an asset-backed facility, which is secured by a pledge of substantially all of the assets of TrueBlue, Inc. and material U.S. domestic subsidiaries. The additional amount available to borrow at
December 25, 2015
was
$77.3 million
. We believe the Revolving Credit Facility provides adequate borrowing capacity.
|
•
|
We had cash and cash equivalents of
$29.8 million
at
December 25, 2015
. We expect to continue to apply excess cash towards the outstanding balance on our Revolving Credit Facility. Of the total cash and cash equivalents of
$29.8 million
, $5.7 million resides in our international subsidiaries.
|
•
|
The majority of our workers’ compensation payments are made from restricted cash rather than cash from operations. At
December 25, 2015
, we had restricted cash and investments totaling
$188.4 million
.
|
|
|
S&P
|
|
Moody's
|
|
Fitch
|
Short-term rating
|
|
A-1/SP-1
|
|
P-1/MIG-1
|
|
F-1
|
Long-term rating
|
|
A-
|
|
A3
|
|
A-
|
|
2015
|
|
2014
|
||||
Cash collateral held by insurance carriers
|
$
|
23,133
|
|
|
$
|
22,639
|
|
Cash and cash equivalents held in Trust
|
26,046
|
|
|
43,856
|
|
||
Investments held in Trust
|
126,788
|
|
|
90,095
|
|
||
Letters of credit (1)
|
4,520
|
|
|
6,513
|
|
||
Surety bonds (2)
|
17,946
|
|
|
16,861
|
|
||
Total collateral commitments
|
$
|
198,433
|
|
|
$
|
179,964
|
|
(1)
|
We have agreements with certain financial institutions to issue letters of credit as collateral.
|
(2)
|
Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which is determined by each independent surety carrier. These fees do not exceed 2.0% of the bond amount, subject to a minimum charge. The terms of these bonds are subject to review and renewal every one to four years and most bonds can be canceled by the sureties with as little as 60 days' notice.
|
|
2015
|
|
2014
|
||||
Total workers’ compensation reserve
|
$
|
266,280
|
|
|
$
|
242,839
|
|
Add back discount on workers' compensation reserve (1)
|
18,026
|
|
|
13,381
|
|
||
Less excess claims reserve (2)
|
(49,026
|
)
|
|
(42,612
|
)
|
||
Reimbursable payments to insurance provider (3)
|
10,610
|
|
|
8,336
|
|
||
Less portion of workers' compensation not requiring collateral (4)
|
(47,457
|
)
|
|
(41,980
|
)
|
||
Total collateral commitments
|
$
|
198,433
|
|
|
$
|
179,964
|
|
(1)
|
Our workers’ compensation reserves are discounted to their estimated net present value while our collateral commitments are based on the gross, undiscounted reserve.
|
(2)
|
Excess claims reserve includes the estimated obligation for claims above our deductible limits. These are the responsibility of the insurance carriers against which there are no collateral requirements.
|
(3)
|
This amount is included in restricted cash and represents a timing difference between claim payments made by our insurance carrier and the reimbursement from cash held in the Trust. When claims are paid by our carrier, the amount is removed from the workers' compensation reserve but not removed from collateral until reimbursed to the carrier.
|
(4)
|
Represents deductible and self-insured reserves where collateral is not required.
|
•
|
Changes in medical and time loss (“indemnity”) costs.
|
•
|
Changes in mix between medical only and indemnity claims.
|
•
|
Regulatory and legislative developments impacting benefits and settlement requirements.
|
•
|
Type and location of work performed.
|
•
|
The impact of safety initiatives.
|
•
|
Positive or adverse development of claims.
|
|
Years ended
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Beginning balance
|
$
|
242,839
|
|
|
$
|
214,829
|
|
|
$
|
195,588
|
|
Self-insurance reserve expenses related to current year, net (1)
|
93,138
|
|
|
82,102
|
|
|
68,249
|
|
|||
Payments related to current year claims (2)
|
(19,519
|
)
|
|
(17,482
|
)
|
|
(14,784
|
)
|
|||
Payments related to claims from prior years (2)
|
(51,232
|
)
|
|
(43,164
|
)
|
|
(34,329
|
)
|
|||
Changes to prior years’ self-insurance reserve, net (3)
|
(10,117
|
)
|
|
(22,426
|
)
|
|
(19,092
|
)
|
|||
Amortization of prior years’ discount (4)
|
(1,293
|
)
|
|
6,182
|
|
|
3,767
|
|
|||
Net change in excess claims reserve (5)
|
3,976
|
|
|
2,216
|
|
|
7,032
|
|
|||
Liability assumed from acquired business, net (6)
|
8,488
|
|
|
20,582
|
|
|
8,398
|
|
|||
Ending balance
|
266,280
|
|
|
242,839
|
|
|
214,829
|
|
|||
Less current portion
|
69,308
|
|
|
64,556
|
|
|
49,942
|
|
|||
Long-term portion
|
$
|
196,972
|
|
|
$
|
178,283
|
|
|
$
|
164,887
|
|
(1)
|
Our self-insurance reserves are discounted to their estimated net present value using discount rates based on returns of “risk-free” U.S. Treasury instruments with maturities comparable to the weighted average lives of our workers’ compensation claims. At
December 25, 2015
, the weighted average rate was
1.8%
.
|
(2)
|
Payments made against self-insured claims are made over a weighted average period of approximately
5.0
years.
|
(3)
|
Changes in reserve estimates are reflected in the statement of operations in the period when the changes in estimates are made.
|
(4)
|
The discount is amortized over the estimated weighted average life. In addition, any changes to the estimated weighted average lives and corresponding discount rates for actual payments made are reflected in the statement of operations in the period when the changes in estimates are made.
|
(5)
|
Changes to our excess claims are discounted to its estimated net present value using the risk-free rates associated with the actuarially determined weighted average lives of our excess claims. Certain workers’ compensation insurance companies with which we formerly did business are in liquidation and have failed to pay a number of excess claims to date. We have recorded a valuation allowance against all of the insurance receivables from the insurance companies in liquidation.
|
(6)
|
Effective
December 1, 2015
, we acquired SIMOS, including
$8.5 million
of workers' compensation liability. For the period ended
December 25, 2015
, the assumed liability was reduced for payments and changes to actuarial estimates. Effective June 30, 2014, we acquired Seaton, including
$26.4 million
of workers' compensation liability. For the period ended
December 26, 2014
, the assumed liability was reduced for payments and changes to actuarial estimates. Effective February 4, 2013, we acquired substantially all of the assets and assumed certain liabilities of MDT, including $9.4 million of workers' compensation liability. For the period ended
December 27, 2013
, the assumed liability was reduced for payments and changes to actuarial estimates.
|
|
|
Payments Due by Period
(
in thousands
)
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Long-term debt obligations, including interest and fees (1):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revolving Credit Facility
|
|
$
|
234,210
|
|
|
$
|
4,632
|
|
|
$
|
9,263
|
|
|
$
|
220,315
|
|
|
$
|
—
|
|
Term Loan
|
|
28,641
|
|
|
2,782
|
|
|
25,859
|
|
|
—
|
|
|
—
|
|
|||||
Workers' compensation claims (2)
|
|
235,280
|
|
|
71,607
|
|
|
69,842
|
|
|
29,649
|
|
|
64,182
|
|
|||||
Deferred compensation (3)
|
|
1,531
|
|
|
549
|
|
|
472
|
|
|
246
|
|
|
264
|
|
|||||
Operating leases (4)
|
|
25,290
|
|
|
6,788
|
|
|
9,788
|
|
|
7,091
|
|
|
1,623
|
|
|||||
Purchase obligations (5)
|
|
12,093
|
|
|
8,613
|
|
|
3,229
|
|
|
251
|
|
|
—
|
|
|||||
Contingent consideration (6)
|
|
22,500
|
|
|
—
|
|
|
22,500
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
|
$
|
559,545
|
|
|
$
|
94,971
|
|
|
$
|
140,953
|
|
|
$
|
257,552
|
|
|
$
|
66,069
|
|
(1)
|
Interest and fees are calculated based on the rates in effect at December 25, 2015. Our Revolving Credit Facility expires in 2019. For additional information, see Note 9:
Long-term Debt
to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
|
(2)
|
Excludes estimated expenses related to claims above our self-insured limits, for which we have a corresponding receivable based on the contractual policy agreements we have with insurance carriers. For additional information, see Note 8:
Workers' Compensation Insurance
to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
|
(3)
|
Represents scheduled distributions based on the elections of plan participants. Additional payments may be made if plan participants terminate, retire, or schedule distributions during the periods presented. For additional information, see Note 13:
Defined Contribution Plans
to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
|
(4)
|
Excludes all payments related to branch leases with short-term cancellation provisions, typically within 90 days. For additional information, see Note 10:
Commitments and Contingencies
to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
|
(5)
|
Purchase obligations include agreements to purchase goods and services that are enforceable, legally binding, and specify all significant terms. Purchase obligations do not include agreements that are cancelable without significant penalty.
|
(6)
|
An additional cash payment of
$22.5 million
of contingent consideration may be payable in 2017, depending on the performance of SIMOS through fiscal 2016. For additional information, see Note 2:
Acquisitions
to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Consolidated Financial Statements
|
|
Years ended
|
||||||
|
2015
|
|
2014
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
29,781
|
|
|
$
|
19,666
|
|
Marketable securities
|
—
|
|
|
1,500
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $5,902 and $7,603
|
461,476
|
|
|
359,903
|
|
||
Prepaid expenses, deposits and other current assets
|
23,553
|
|
|
18,778
|
|
||
Income tax receivable
|
28,155
|
|
|
10,516
|
|
||
Deferred income taxes, net
|
7,393
|
|
|
5,444
|
|
||
Total current assets
|
550,358
|
|
|
415,807
|
|
||
Property and equipment, net
|
57,530
|
|
|
61,392
|
|
||
Restricted cash and investments
|
188,412
|
|
|
168,426
|
|
||
Goodwill
|
268,495
|
|
|
241,855
|
|
||
Intangible assets, net
|
153,859
|
|
|
136,560
|
|
||
Other assets, net
|
48,181
|
|
|
42,631
|
|
||
Total assets
|
$
|
1,266,835
|
|
|
$
|
1,066,671
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and other accrued expenses
|
$
|
69,727
|
|
|
$
|
50,256
|
|
Accrued wages and benefits
|
86,070
|
|
|
69,692
|
|
||
Current portion of workers' compensation claims reserve
|
69,308
|
|
|
64,556
|
|
||
Other current liabilities
|
2,871
|
|
|
2,726
|
|
||
Total current liabilities
|
227,976
|
|
|
187,230
|
|
||
Workers’ compensation claims reserve, less current portion
|
196,972
|
|
|
178,283
|
|
||
Long-term debt, less current portion
|
243,397
|
|
|
199,383
|
|
||
Deferred income taxes, net
|
26,892
|
|
|
19,768
|
|
||
Other long-term liabilities
|
36,025
|
|
|
12,673
|
|
||
Total liabilities
|
731,262
|
|
|
597,337
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 10)
|
|
|
|
||||
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, $0.131 par value, 20,000 shares authorized; No shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, no par value, 100,000 shares authorized; 42,024 and 41,530 shares issued and outstanding
|
1
|
|
|
1
|
|
||
Accumulated other comprehensive income (loss)
|
(14,013
|
)
|
|
871
|
|
||
Retained earnings
|
549,585
|
|
|
468,462
|
|
||
Total shareholders’ equity
|
535,573
|
|
|
469,334
|
|
||
Total liabilities and shareholders’ equity
|
$
|
1,266,835
|
|
|
$
|
1,066,671
|
|
|
Years ended
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue from services
|
$
|
2,695,680
|
|
|
$
|
2,174,045
|
|
|
$
|
1,668,929
|
|
Cost of services
|
2,060,007
|
|
|
1,637,066
|
|
|
1,226,626
|
|
|||
Gross profit
|
635,673
|
|
|
536,979
|
|
|
442,303
|
|
|||
Selling, general and administrative expenses
|
495,988
|
|
|
425,777
|
|
|
362,248
|
|
|||
Depreciation and amortization
|
41,843
|
|
|
29,474
|
|
|
20,472
|
|
|||
Income from operations
|
97,842
|
|
|
81,728
|
|
|
59,583
|
|
|||
Interest expense
|
(4,160
|
)
|
|
(3,156
|
)
|
|
(1,248
|
)
|
|||
Interest and other income
|
2,765
|
|
|
3,272
|
|
|
2,602
|
|
|||
Interest and other income (expense), net
|
(1,395
|
)
|
|
116
|
|
|
1,354
|
|
|||
Income before tax expense
|
96,447
|
|
|
81,844
|
|
|
60,937
|
|
|||
Income tax expense
|
25,200
|
|
|
16,169
|
|
|
16,013
|
|
|||
Net income
|
$
|
71,247
|
|
|
$
|
65,675
|
|
|
$
|
44,924
|
|
|
|
|
|
|
|
||||||
Net income per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
1.73
|
|
|
$
|
1.61
|
|
|
$
|
1.12
|
|
Diluted
|
$
|
1.71
|
|
|
$
|
1.59
|
|
|
$
|
1.11
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
41,226
|
|
|
40,734
|
|
|
40,166
|
|
|||
Diluted
|
41,622
|
|
|
41,176
|
|
|
40,502
|
|
|||
|
|
|
|
|
|
||||||
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustment, net of tax
|
$
|
(14,362
|
)
|
|
$
|
(1,281
|
)
|
|
$
|
(689
|
)
|
Unrealized gain (loss) on investments, net of tax
|
(522
|
)
|
|
119
|
|
|
(96
|
)
|
|||
Total other comprehensive loss, net of tax
|
(14,884
|
)
|
|
(1,162
|
)
|
|
(785
|
)
|
|||
Comprehensive income
|
$
|
56,363
|
|
|
$
|
64,513
|
|
|
$
|
44,139
|
|
|
Common stock
|
|
|
|
Accumulated other comprehensive income
|
|
Total shareholders' equity
|
|||||||||||
|
Shares
|
|
Amount
|
|
Retained earnings
|
|
|
|||||||||||
Balances, December 28, 2012
|
40,220
|
|
|
$
|
1
|
|
|
$
|
330,855
|
|
|
$
|
2,818
|
|
|
$
|
333,674
|
|
Net income
|
|
|
|
|
44,924
|
|
|
|
|
44,924
|
|
|||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
(785
|
)
|
|
(785
|
)
|
|||||||
Issuances under equity plans, including tax benefits
|
865
|
|
|
|
|
7,135
|
|
|
|
|
7,135
|
|
||||||
Stock-based compensation
|
|
|
|
|
8,412
|
|
|
|
|
8,412
|
|
|||||||
Balances, December 27, 2013
|
41,085
|
|
|
1
|
|
|
391,326
|
|
|
2,033
|
|
|
393,360
|
|
||||
Net income
|
|
|
|
|
65,675
|
|
|
|
|
65,675
|
|
|||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
(1,162
|
)
|
|
(1,162
|
)
|
|||||||
Issuances under equity plans, including tax benefits
|
445
|
|
|
|
|
410
|
|
|
|
|
410
|
|
||||||
Stock-based compensation
|
|
|
|
|
11,051
|
|
|
|
|
11,051
|
|
|||||||
Balances, December 26, 2014
|
41,530
|
|
|
1
|
|
|
468,462
|
|
|
871
|
|
|
469,334
|
|
||||
Net income
|
|
|
|
|
71,247
|
|
|
|
|
71,247
|
|
|||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
(14,884
|
)
|
|
(14,884
|
)
|
|||||||
Issuances under equity plans, including tax benefits
|
494
|
|
|
|
|
(1,227
|
)
|
|
|
|
(1,227
|
)
|
||||||
Stock-based compensation
|
|
|
|
|
11,103
|
|
|
|
|
11,103
|
|
|||||||
Balances, December 25, 2015
|
42,024
|
|
|
$
|
1
|
|
|
$
|
549,585
|
|
|
$
|
(14,013
|
)
|
|
$
|
535,573
|
|
|
Years ended
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
71,247
|
|
|
$
|
65,675
|
|
|
$
|
44,924
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
41,843
|
|
|
29,474
|
|
|
20,472
|
|
|||
Provision for doubtful accounts
|
7,132
|
|
|
11,815
|
|
|
12,063
|
|
|||
Stock-based compensation
|
11,103
|
|
|
11,051
|
|
|
8,412
|
|
|||
Deferred income taxes
|
5,176
|
|
|
12,663
|
|
|
(3,844
|
)
|
|||
Other operating activities
|
446
|
|
|
898
|
|
|
2,116
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(89,474
|
)
|
|
(77,629
|
)
|
|
(4,181
|
)
|
|||
Income tax receivable
|
(16,678
|
)
|
|
(5,696
|
)
|
|
4,113
|
|
|||
Other assets
|
(6,398
|
)
|
|
(7,361
|
)
|
|
(7,341
|
)
|
|||
Accounts payable and other accrued expenses
|
23,261
|
|
|
(8,683
|
)
|
|
(3,592
|
)
|
|||
Accrued wages and benefits
|
12,203
|
|
|
12,069
|
|
|
(3,643
|
)
|
|||
Workers’ compensation claims reserve
|
14,736
|
|
|
1,579
|
|
|
9,859
|
|
|||
Other liabilities
|
(2,525
|
)
|
|
1,670
|
|
|
6,710
|
|
|||
Net cash provided by operating activities
|
72,072
|
|
|
47,525
|
|
|
86,068
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(18,394
|
)
|
|
(16,918
|
)
|
|
(13,003
|
)
|
|||
Acquisition of businesses, net of cash acquired
|
(67,500
|
)
|
|
(305,876
|
)
|
|
(77,560
|
)
|
|||
Purchases of marketable securities
|
—
|
|
|
(25,057
|
)
|
|
(40,800
|
)
|
|||
Sales and maturities of marketable securities
|
1,500
|
|
|
44,167
|
|
|
20,050
|
|
|||
Change in restricted cash and cash equivalents
|
18,374
|
|
|
(9,283
|
)
|
|
(16,122
|
)
|
|||
Purchases of restricted investments
|
(51,516
|
)
|
|
(18,196
|
)
|
|
(13,411
|
)
|
|||
Maturities of restricted investments
|
12,510
|
|
|
12,726
|
|
|
15,581
|
|
|||
Net cash used in investing activities
|
(105,026
|
)
|
|
(318,437
|
)
|
|
(125,265
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Net proceeds from stock option exercises and employee stock purchase plans
|
1,563
|
|
|
2,191
|
|
|
9,136
|
|
|||
Common stock repurchases for taxes upon vesting of restricted stock
|
(3,869
|
)
|
|
(3,114
|
)
|
|
(2,800
|
)
|
|||
Net change in revolving credit facility
|
46,091
|
|
|
171,994
|
|
|
—
|
|
|||
Proceeds from long-term debt
|
—
|
|
|
—
|
|
|
34,000
|
|
|||
Payments on debt and other liabilities
|
(2,078
|
)
|
|
(2,267
|
)
|
|
(8,681
|
)
|
|||
Other
|
1,079
|
|
|
978
|
|
|
713
|
|
|||
Net cash provided by financing activities
|
42,786
|
|
|
169,782
|
|
|
32,368
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
283
|
|
|
(1,207
|
)
|
|
(681
|
)
|
|||
Net change in cash and cash equivalents
|
10,115
|
|
|
(102,337
|
)
|
|
(7,510
|
)
|
|||
CASH AND CASH EQUIVALENTS, beginning of period
|
19,666
|
|
|
122,003
|
|
|
129,513
|
|
|||
CASH AND CASH EQUIVALENTS, end of period
|
$
|
29,781
|
|
|
$
|
19,666
|
|
|
$
|
122,003
|
|
•
|
We maintain the direct contractual relationship with the customer.
|
•
|
We have discretion in selecting and assigning the contingent worker to a particular job and establishing their billing rate.
|
•
|
We bear the risk and rewards of the transaction, including credit risk, if the customer fails to pay for services performed.
|
|
Years
|
Buildings
|
40
|
Computers and software
|
3 - 10
|
Furniture and equipment
|
3 - 10
|
NOTE 2:
|
ACQUISITIONS
|
|
Purchase Price Allocation
|
||
Purchase price:
|
|
||
Cash purchase price
|
$
|
67,500
|
|
Contingent consideration (1)
|
19,300
|
|
|
Total consideration
|
$
|
86,800
|
|
|
|
||
Purchase price allocated as follows:
|
|
||
Accounts receivable (2)
|
$
|
19,230
|
|
Prepaid expenses, deposits and other current assets
|
2,501
|
|
|
Property and equipment
|
464
|
|
|
Customer relationships
|
38,400
|
|
|
Trade name/trademarks
|
800
|
|
|
Technologies
|
100
|
|
|
Other non-current assets
|
2,500
|
|
|
Total assets acquired
|
63,995
|
|
|
Accounts payable and other accrued expenses
|
3,603
|
|
|
Accrued wages and benefits
|
4,174
|
|
|
Workers' compensation liability
|
8,520
|
|
|
Total liabilities assumed
|
16,297
|
|
|
Net identifiable assets acquired
|
47,698
|
|
|
Goodwill (3)
|
39,102
|
|
|
Total consideration allocated
|
$
|
86,800
|
|
(1)
|
The purchase price included contingent consideration of
zero
to
$22.5 million
depending on achieving a fiscal 2016 earnings before interest, taxes, depreciation and amortization target ("EBITDA target"), which will be paid out in mid fiscal 2017. Actual results must be in excess of
87.5%
of the EBITDA target before any amounts are earned. The preliminary undiscounted fair value of the contingent consideration as of the acquisition date was determined to be
$22.2 million
. Using a risk adjusted weighted average cost of capital of
10.0%
, the present value of the contingent consideration was estimated to be
$19.3 million
, as of the acquisition date. The contingent consideration liability was based on a probability weighted fair value measurement using unobservable inputs (Level 3) which rely on management's estimates of assumptions that market participants would use in pricing the liability. The valuation is judgmental in nature and involves the use of significant estimates and assumptions in forecasting fiscal 2016 results.
|
(2)
|
The gross contractual amount of accounts receivable was
$19.3 million
of which
$0.1 million
was estimated to be uncollectible.
|
(3)
|
Goodwill represents the expected synergies with our existing business, the acquired assembled workforce, potential new customers, and future cash flows after the acquisition of SIMOS. Goodwill is deductible for income tax purposes over
15
years as of
December 1, 2015
.
|
|
Estimated Fair Value
|
|
Estimated Useful Lives in Years
|
||
Customer relationships
|
$
|
38,400
|
|
|
9.0
|
Trade name/trademarks
|
800
|
|
|
3.0
|
|
Technologies
|
100
|
|
|
2.0
|
|
Total intangible assets
|
$
|
39,300
|
|
|
|
|
Purchase Price Allocation
|
||
Accounts receivable (1)
|
$
|
94,571
|
|
Prepaid expenses, deposits and other current assets
|
7,111
|
|
|
Property and equipment
|
6,957
|
|
|
Other non-current assets
|
7,848
|
|
|
Restricted cash
|
1,227
|
|
|
Intangible assets
|
117,100
|
|
|
Total assets acquired
|
234,814
|
|
|
|
|
||
Accounts payable and other accrued expenses (2)
|
28,916
|
|
|
Accrued wages and benefits
|
18,528
|
|
|
Workers' compensation claims reserve (3)
|
26,433
|
|
|
Deferred tax liability
|
13,514
|
|
|
Other long-term liabilities
|
1,163
|
|
|
Total liabilities assumed
|
88,554
|
|
|
|
|
||
Net identifiable assets acquired
|
146,260
|
|
|
Goodwill (4)
|
159,616
|
|
|
Net assets acquired
|
$
|
305,876
|
|
(1)
|
The gross contractual amount of accounts receivable was
$96.7 million
of which
$2.1 million
was estimated to be uncollectible.
|
(2)
|
The preliminary purchase price allocation for accounts payable and accrued expenses was increased by approximately
$9.6 million
related to additional commitments and obligations assumed.
|
(3)
|
The preliminary purchase price allocation for the workers' compensation liability was increased by approximately
$7.8 million
for estimated excess claims with a corresponding receivable due from the insurance provider.
|
(4)
|
Goodwill is attributable to the acquired workforce, the expected synergies, and future cash flows after the acquisition of Seaton. Synergies consist primarily of increasing service capacity through acquiring workforce and facilities, increasing market share and economies of scale, increasing operational efficiency and expertise, and leveraging technology investments.
|
|
Estimated Fair Value
|
|
Weighted Average Estimated Useful Lives in Years
|
||
Trade name/trademarks
|
$
|
10,500
|
|
|
Indefinite
|
Trade name/trademarks
|
300
|
|
|
4.0
|
|
Technologies
|
18,300
|
|
|
4.6
|
|
Customer relationships
|
88,000
|
|
|
9.7
|
|
Total intangible assets
|
$
|
117,100
|
|
|
|
|
|
Years ended
|
||||||
|
|
2014
|
|
2013
|
||||
Revenue from services
|
|
$
|
2,472,289
|
|
|
$
|
2,274,742
|
|
Net income
|
|
$
|
64,713
|
|
|
$
|
47,464
|
|
Net income per common share - diluted
|
|
$
|
1.57
|
|
|
$
|
1.17
|
|
|
|
Purchase Price Allocation
|
||
Accounts receivable (1)
|
|
$
|
29,910
|
|
Prepaid expenses, deposits and other current assets
|
|
614
|
|
|
Property and equipment
|
|
299
|
|
|
Restricted cash
|
|
6,877
|
|
|
Intangible assets
|
|
10,200
|
|
|
Total assets acquired
|
|
47,900
|
|
|
|
|
|
||
Accounts payable and other accrued expenses
|
|
6,273
|
|
|
Accrued wages and benefits
|
|
4,781
|
|
|
Workers' compensation claims reserve
|
|
9,381
|
|
|
Other long-term liabilities
|
|
76
|
|
|
Total liabilities assumed
|
|
20,511
|
|
|
|
|
|
||
Net identifiable assets acquired
|
|
27,389
|
|
|
Goodwill (2)
|
|
25,686
|
|
|
Net assets acquired
|
|
$
|
53,075
|
|
(1)
|
The gross contractual amount of accounts receivable was
$32.9 million
of which
$3.0 million
was estimated to be uncollectible.
|
(2)
|
Goodwill is deductible for income tax purposes over
15
years as of March 29, 2013.
|
|
Estimated Fair Value
|
|
Weighted Average Estimated Useful Lives in Years
|
||
Customer relationships
|
$
|
7,800
|
|
|
8.0
|
Trade name/trademarks
|
1,000
|
|
|
1.5
|
|
Non-compete agreement
|
1,400
|
|
|
5.0
|
|
Total intangible assets
|
$
|
10,200
|
|
|
|
|
Years ended
|
||||||
|
2013
|
|
2012
|
||||
Revenue from services
|
$
|
1,693,073
|
|
|
$
|
1,612,467
|
|
Net income
|
$
|
48,988
|
|
|
$
|
25,939
|
|
Net income per common share - diluted
|
$
|
1.21
|
|
|
$
|
0.65
|
|
|
|
Purchase Price Allocation
|
||
Accounts receivable (1)
|
|
$
|
10,198
|
|
Prepaid expenses
|
|
41
|
|
|
Plant and equipment
|
|
107
|
|
|
Intangible assets
|
|
8,200
|
|
|
Total assets acquired
|
|
18,546
|
|
|
|
|
|
||
Accounts payable
|
|
614
|
|
|
Accrued wages and benefits
|
|
2,853
|
|
|
Total liabilities assumed
|
|
3,467
|
|
|
|
|
|
||
Net identifiable assets acquired
|
|
15,079
|
|
|
Goodwill
|
|
7,610
|
|
|
Net assets acquired
|
|
$
|
22,689
|
|
(1)
|
The gross contractual amount of accounts receivable was
$10.4 million
of which
$0.2 million
was estimated to be uncollectible.
|
NOTE 3:
|
FAIR VALUE MEASUREMENT
|
|
2015
|
||||||||||||||||||
|
Carrying Value
|
|
Total Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents (1)
|
$
|
29,781
|
|
|
$
|
29,781
|
|
|
$
|
29,781
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash and cash equivalents (1)
|
49,680
|
|
|
49,680
|
|
|
49,680
|
|
|
—
|
|
|
—
|
|
|||||
Other restricted assets (2)
|
11,944
|
|
|
11,944
|
|
|
11,944
|
|
|
—
|
|
|
—
|
|
|||||
Restricted investments classified as held-to-maturity
|
126,788
|
|
|
128,245
|
|
|
—
|
|
|
128,245
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Contingent consideration (4)
|
$
|
19,300
|
|
|
$
|
19,300
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,300
|
|
|
2014
|
||||||||||||||||||
|
Carrying Value
|
|
Total Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents (1)
|
$
|
19,666
|
|
|
$
|
19,666
|
|
|
$
|
19,666
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Marketable securities classified as available-for-sale (3)
|
1,500
|
|
|
1,500
|
|
|
—
|
|
|
1,500
|
|
|
|
||||||
Restricted cash and cash equivalents (1)
|
68,359
|
|
|
68,359
|
|
|
68,359
|
|
|
—
|
|
|
—
|
|
|||||
Other restricted assets (2)
|
9,972
|
|
|
9,972
|
|
|
9,972
|
|
|
—
|
|
|
—
|
|
|||||
Restricted investments classified as held-to-maturity
|
90,095
|
|
|
91,066
|
|
|
—
|
|
|
91,066
|
|
|
—
|
|
(1)
|
Cash and cash equivalents and restricted cash equivalents consist of money market funds, deposits, and investments with original maturities of three months or less.
|
(2)
|
Other restricted assets primarily consist of deferred compensation plan accounts, which are comprised of mutual funds classified as available-for-sale securities.
|
(3)
|
At
December 25, 2015
, we held no marketable securities. At
December 26, 2014
, all of our marketable securities, which consisted of CDs, had stated maturities of less than one year.
|
(4)
|
The estimated preliminary fair value of the contingent consideration associated with the acquisition of SIMOS which was estimated using a probability-adjusted discounted cash flow model. Refer to Note 2:
Acquisitions
for further details regarding the SIMOS acquisition.
|
NOTE 4:
|
MARKETABLE SECURITIES
|
NOTE 5:
|
RESTRICTED CASH AND INVESTMENTS
|
|
2015
|
|
2014
|
||||
Cash collateral held by insurance carriers
|
$
|
23,634
|
|
|
$
|
22,639
|
|
Cash and cash equivalents held in Trust
|
26,046
|
|
|
43,856
|
|
||
Investments held in Trust
|
126,788
|
|
|
90,095
|
|
||
Other (1)
|
11,944
|
|
|
11,836
|
|
||
Total restricted cash and investments
|
$
|
188,412
|
|
|
$
|
168,426
|
|
(1)
|
Primarily consists of deferred compensation plan accounts, which are comprised of mutual funds classified as available-for-sale securities.
|
|
2015
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
|
|
Fair Value
|
||||||||
Municipal debt securities
|
$
|
67,948
|
|
|
$
|
1,345
|
|
|
$
|
(4
|
)
|
|
$
|
69,289
|
|
Corporate debt securities
|
50,462
|
|
|
226
|
|
|
(152
|
)
|
|
50,536
|
|
||||
Agency mortgage-backed securities
|
8,378
|
|
|
73
|
|
|
(31
|
)
|
|
8,420
|
|
||||
|
$
|
126,788
|
|
|
$
|
1,644
|
|
|
$
|
(187
|
)
|
|
$
|
128,245
|
|
|
2014
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
|
|
Fair Value
|
||||||||
Municipal debt securities
|
$
|
52,406
|
|
|
$
|
882
|
|
|
$
|
(92
|
)
|
|
$
|
53,196
|
|
Corporate debt securities
|
27,715
|
|
|
179
|
|
|
(144
|
)
|
|
27,750
|
|
||||
Agency mortgage-backed securities
|
9,974
|
|
|
157
|
|
|
(11
|
)
|
|
10,120
|
|
||||
|
$
|
90,095
|
|
|
$
|
1,218
|
|
|
$
|
(247
|
)
|
|
$
|
91,066
|
|
|
2015
|
||||||
|
Amortized Cost
|
|
Fair Value
|
||||
Due in one year or less
|
$
|
11,441
|
|
|
$
|
11,504
|
|
Due after one year through five years
|
55,986
|
|
|
56,253
|
|
||
Due after five years through ten years
|
59,361
|
|
|
60,488
|
|
||
|
$
|
126,788
|
|
|
$
|
128,245
|
|
NOTE 6:
|
PROPERTY AND EQUIPMENT, NET
|
|
2015
|
|
2014
|
||||
Buildings and land
|
$
|
32,258
|
|
|
$
|
30,381
|
|
Computers and software
|
126,003
|
|
|
115,419
|
|
||
Furniture and equipment
|
12,362
|
|
|
11,690
|
|
||
Construction in progress
|
4,757
|
|
|
5,415
|
|
||
Gross property and equipment
|
175,380
|
|
|
162,905
|
|
||
Less accumulated depreciation
|
(117,850
|
)
|
|
(101,513
|
)
|
||
Property and equipment, net
|
$
|
57,530
|
|
|
$
|
61,392
|
|
NOTE 7:
|
GOODWILL AND INTANGIBLE ASSETS
|
|
Staffing Services
|
|
Managed Services
|
|
Unallocated Goodwill
|
|
Total Company
|
||||||||
Balance at December 26, 2014
|
|
|
|
|
|
|
|
||||||||
Goodwill before impairment
|
$
|
128,449
|
|
|
$
|
—
|
|
|
$
|
159,616
|
|
|
$
|
288,065
|
|
Accumulated impairment loss
|
(46,210
|
)
|
|
—
|
|
|
—
|
|
|
(46,210
|
)
|
||||
Goodwill, net
|
82,239
|
|
|
—
|
|
|
159,616
|
|
|
241,855
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Allocated goodwill (1)
|
42,730
|
|
|
116,886
|
|
|
(159,616
|
)
|
|
—
|
|
||||
Acquired goodwill (2)
|
39,102
|
|
|
—
|
|
|
—
|
|
|
39,102
|
|
||||
Other (3)
|
—
|
|
|
(12,462
|
)
|
|
—
|
|
|
(12,462
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance at December 25, 2015
|
|
|
|
|
|
|
|
||||||||
Goodwill before impairment
|
210,281
|
|
|
104,424
|
|
|
—
|
|
|
314,705
|
|
||||
Accumulated impairment loss
|
(46,210
|
)
|
|
—
|
|
|
—
|
|
|
(46,210
|
)
|
||||
Goodwill, net
|
$
|
164,071
|
|
|
$
|
104,424
|
|
|
$
|
—
|
|
|
$
|
268,495
|
|
|
2015
|
|
2014
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Finite-lived intangible assets (1):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
161,376
|
|
|
$
|
(36,846
|
)
|
|
$
|
124,530
|
|
|
$
|
123,940
|
|
|
$
|
(22,195
|
)
|
|
$
|
101,745
|
|
Trade names/trademarks
|
5,179
|
|
|
(3,447
|
)
|
|
1,732
|
|
|
4,422
|
|
|
(2,878
|
)
|
|
1,544
|
|
||||||
Non-compete agreements
|
1,800
|
|
|
(1,177
|
)
|
|
623
|
|
|
1,800
|
|
|
(817
|
)
|
|
983
|
|
||||||
Technologies
|
17,310
|
|
|
(6,536
|
)
|
|
10,774
|
|
|
18,300
|
|
|
(2,212
|
)
|
|
16,088
|
|
||||||
Total finite-lived intangible assets
|
$
|
185,665
|
|
|
$
|
(48,006
|
)
|
|
$
|
137,659
|
|
|
$
|
148,462
|
|
|
$
|
(28,102
|
)
|
|
$
|
120,360
|
|
(1)
|
Excludes assets that are fully amortized.
|
2016
|
$
|
22,003
|
|
2017
|
19,664
|
|
|
2018
|
18,333
|
|
|
2019
|
15,971
|
|
|
2020
|
14,448
|
|
|
Thereafter
|
47,240
|
|
|
Total future amortization
|
$
|
137,659
|
|
|
2015
|
|
2014
|
||||
Undiscounted workers’ compensation reserve
|
$
|
284,306
|
|
|
$
|
256,220
|
|
Less discount on workers' compensation reserve
|
18,026
|
|
|
13,381
|
|
||
Workers' compensation reserve, net of discount
|
266,280
|
|
|
242,839
|
|
||
Less current portion
|
69,308
|
|
|
64,556
|
|
||
Long-term portion
|
$
|
196,972
|
|
|
$
|
178,283
|
|
•
|
Changes in medical and time loss (“indemnity”) costs.
|
•
|
Changes in mix between medical only and indemnity claims.
|
•
|
Regulatory and legislative developments impacting benefits and settlement requirements.
|
•
|
Type and location of work performed.
|
•
|
Impact of safety initiatives.
|
•
|
Positive or adverse development of claims.
|
2016
|
$
|
69,308
|
|
2017
|
40,080
|
|
|
2018
|
24,492
|
|
|
2019
|
15,231
|
|
|
2020
|
10,375
|
|
|
Thereafter
|
57,768
|
|
|
Sub-total
|
217,254
|
|
|
Excess claims (1)
|
49,026
|
|
|
Total
|
$
|
266,280
|
|
(1)
|
Estimated expenses related to claims above our self-insured limits for which we have a corresponding receivable for the insurance coverage based on contractual policy agreements.
|
NOTE 9:
|
LONG-TERM DEBT
|
|
|
2015
|
|
2014
|
||||
Revolving Credit Facility
|
|
$
|
218,086
|
|
|
$
|
171,994
|
|
Term Loan
|
|
27,578
|
|
|
29,656
|
|
||
Total debt
|
|
245,664
|
|
|
201,650
|
|
||
Less current portion
|
|
2,267
|
|
|
2,267
|
|
||
Long-term debt, less current portion
|
|
$
|
243,397
|
|
|
$
|
199,383
|
|
2016
|
$
|
2,267
|
|
2017
|
2,267
|
|
|
2018
|
23,044
|
|
|
Total
|
$
|
27,578
|
|
NOTE 10:
|
COMMITMENTS AND CONTINGENCIES
|
|
2015
|
|
2014
|
||||
Cash collateral held by insurance carriers
|
$
|
23,133
|
|
|
$
|
22,639
|
|
Cash and cash equivalents held in Trust
|
26,046
|
|
|
43,856
|
|
||
Investments held in Trust
|
126,788
|
|
|
90,095
|
|
||
Letters of credit (1)
|
4,520
|
|
|
6,513
|
|
||
Surety bonds (2)
|
17,946
|
|
|
16,861
|
|
||
Total collateral commitments
|
$
|
198,433
|
|
|
$
|
179,964
|
|
(1)
|
We have agreements with certain financial institutions to issue letters of credit as collateral.
|
(2)
|
Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which are determined by each independent surety carrier. These fees do not exceed
2.0%
of the bond amount, subject to a minimum charge. The terms of these bonds are subject to review and renewal every
one
to
four
years and most bonds can be canceled by the sureties with as little as
60
days' notice.
|
2016
|
$
|
6,788
|
|
2017
|
5,126
|
|
|
2018
|
4,662
|
|
|
2019
|
3,952
|
|
|
2020
|
3,139
|
|
|
Thereafter
|
1,623
|
|
|
Total future non-cancelable minimum lease payments
|
$
|
25,290
|
|
NOTE 11:
|
STOCKHOLDERS' EQUITY
|
NOTE 12:
|
STOCK-BASED COMPENSATION
|
|
Shares
|
|
Average Price Per
Share |
|||
Issued during fiscal year 2015
|
68
|
|
|
$
|
20.65
|
|
Issued during fiscal year 2014
|
64
|
|
|
$
|
21.55
|
|
Issued during fiscal year 2013
|
69
|
|
|
$
|
17.10
|
|
NOTE 13:
|
DEFINED CONTRIBUTION PLANS
|
NOTE 14:
|
INCOME TAXES
|
|
2015
|
|
2014
|
|
2013
|
||||||
Current taxes:
|
|
|
|
|
|
||||||
Federal
|
$
|
12,665
|
|
|
$
|
(161
|
)
|
|
$
|
14,174
|
|
State
|
5,611
|
|
|
2,614
|
|
|
5,196
|
|
|||
Foreign
|
1,882
|
|
|
951
|
|
|
488
|
|
|||
Total current taxes
|
20,158
|
|
|
3,404
|
|
|
19,858
|
|
|||
Deferred taxes:
|
|
|
|
|
|
||||||
Federal
|
4,963
|
|
|
10,198
|
|
|
(2,819
|
)
|
|||
State
|
81
|
|
|
2,481
|
|
|
(1,026
|
)
|
|||
Foreign
|
(2
|
)
|
|
86
|
|
|
—
|
|
|||
Total deferred taxes
|
5,042
|
|
|
12,765
|
|
|
(3,845
|
)
|
|||
Provision for income taxes
|
$
|
25,200
|
|
|
$
|
16,169
|
|
|
$
|
16,013
|
|
|
2015
|
|
%
|
|
2014
|
|
%
|
|
2013
|
|
%
|
|||||||||
Income tax expense based on statutory rate
|
$
|
33,745
|
|
|
35.0
|
%
|
|
$
|
28,641
|
|
|
35.0
|
%
|
|
$
|
21,328
|
|
|
35.0
|
%
|
Increase (decrease) resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
State income taxes, net of federal benefit
|
4,175
|
|
|
4.3
|
|
|
3,213
|
|
|
3.9
|
|
|
2,536
|
|
|
4.2
|
|
|||
Tax credits, net
|
(14,483
|
)
|
|
(15.0
|
)
|
|
(18,564
|
)
|
|
(22.6
|
)
|
|
(10,790
|
)
|
|
(17.7
|
)
|
|||
Non-deductible/non-taxable items
|
2,456
|
|
|
2.5
|
|
|
1,983
|
|
|
2.4
|
|
|
2,124
|
|
|
3.5
|
|
|||
Foreign taxes
|
(933
|
)
|
|
(1.0
|
)
|
|
1,037
|
|
|
1.3
|
|
|
488
|
|
|
0.8
|
|
|||
Other, net
|
240
|
|
|
0.3
|
|
|
(141
|
)
|
|
(0.2
|
)
|
|
327
|
|
|
0.5
|
|
|||
Total taxes on income
|
$
|
25,200
|
|
|
26.1
|
%
|
|
$
|
16,169
|
|
|
19.8
|
%
|
|
$
|
16,013
|
|
|
26.3
|
%
|
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
|
|
||||
Allowance for doubtful accounts
|
$
|
2,295
|
|
|
$
|
2,255
|
|
Workers’ compensation
|
—
|
|
|
1,135
|
|
||
Accounts payable and other accrued expenses
|
4,896
|
|
|
2,641
|
|
||
Net operating loss carryforwards
|
2,385
|
|
|
7,277
|
|
||
Tax credit carryforwards
|
8,315
|
|
|
7,343
|
|
||
Accrued wages and benefits
|
10,791
|
|
|
7,918
|
|
||
Foreign currency translation adjustment
|
—
|
|
|
86
|
|
||
Deferred compensation
|
5,156
|
|
|
2,991
|
|
||
Other
|
1,057
|
|
|
1,577
|
|
||
Total
|
34,895
|
|
|
33,223
|
|
||
Valuation allowance
|
(3,227
|
)
|
|
(2,844
|
)
|
||
Total deferred tax asset, net of valuation allowance
|
31,668
|
|
|
30,379
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Prepaid expenses, deposits and other current assets
|
(3,141
|
)
|
|
(2,888
|
)
|
||
Depreciation and amortization
|
(44,383
|
)
|
|
(40,804
|
)
|
||
Workers’ compensation
|
(3,643
|
)
|
|
—
|
|
||
Taxes on undistributed foreign earnings
|
—
|
|
|
(1,011
|
)
|
||
Total deferred tax liabilities
|
(51,167
|
)
|
|
(44,703
|
)
|
||
Net deferred tax (liabilities) asset, end of year
|
(19,499
|
)
|
|
(14,324
|
)
|
||
Net deferred tax asset, current
|
7,393
|
|
|
5,444
|
|
||
Net deferred tax (liabilities) asset, non-current
|
$
|
(26,892
|
)
|
|
$
|
(19,768
|
)
|
|
Carryover Tax Benefit
|
|
Valuation Allowance
|
|
Expected Benefit
|
|
Year Expiration Begins
|
||||||
Year end tax attributes:
|
|
|
|
|
|
|
|
||||||
Seaton federal WOTCs
|
$
|
6,408
|
|
|
$
|
—
|
|
|
$
|
6,408
|
|
|
2024
|
Seaton state NOLs
|
1,385
|
|
|
(1,385
|
)
|
|
—
|
|
|
Various
|
|||
Seaton foreign NOLs
|
510
|
|
|
(498
|
)
|
|
12
|
|
|
Various
|
|||
Puerto Rico NOLs
|
488
|
|
|
(488
|
)
|
|
—
|
|
|
2016
|
|||
California zone credits (1)
|
1,554
|
|
|
(855
|
)
|
|
699
|
|
|
2023
|
|||
Foreign tax credits
|
355
|
|
|
—
|
|
|
355
|
|
|
2024
|
|||
Total
|
$
|
10,700
|
|
|
$
|
(3,226
|
)
|
|
$
|
7,474
|
|
|
|
(1)
|
The California Zone Credits fully expire in 2023.
|
|
2015
|
|
2014
|
|
2013
|
||||||
Balance, beginning of fiscal year
|
$
|
2,039
|
|
|
$
|
2,035
|
|
|
$
|
1,884
|
|
Increases for tax positions related to the current year
|
436
|
|
|
389
|
|
|
402
|
|
|||
Reductions due to lapsed statute of limitations
|
(280
|
)
|
|
(385
|
)
|
|
(251
|
)
|
|||
Balance, end of fiscal year
|
$
|
2,195
|
|
|
$
|
2,039
|
|
|
$
|
2,035
|
|
NOTE 15:
|
NET INCOME PER SHARE
|
|
Years ended
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net income
|
$
|
71,247
|
|
|
$
|
65,675
|
|
|
$
|
44,924
|
|
|
|
|
|
|
|
||||||
Weighted average number of common shares used in basic net income per common share
|
41,226
|
|
|
40,734
|
|
|
40,166
|
|
|||
Dilutive effect of outstanding stock options and non-vested restricted stock
|
396
|
|
|
442
|
|
|
336
|
|
|||
Weighted average number of common shares used in diluted net income per common share
|
41,622
|
|
|
41,176
|
|
|
40,502
|
|
|||
Net income per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
1.73
|
|
|
$
|
1.61
|
|
|
$
|
1.12
|
|
Diluted
|
$
|
1.71
|
|
|
$
|
1.59
|
|
|
$
|
1.11
|
|
|
|
|
|
|
|
||||||
Anti-dilutive shares
|
89
|
|
|
58
|
|
|
78
|
|
NOTE 16:
|
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
|
Foreign currency translation adjustment (1)
|
|
Unrealized gain (loss) on investments (2)
|
|
Total other comprehensive income (loss), net of tax
|
||||||
Balance at December 27, 2013
|
$
|
2,129
|
|
|
$
|
(96
|
)
|
|
$
|
2,033
|
|
Current-period other comprehensive income (loss)
|
(1,281
|
)
|
|
119
|
|
|
(1,162
|
)
|
|||
Balance at December 26, 2014
|
$
|
848
|
|
|
$
|
23
|
|
|
$
|
871
|
|
Current-period other comprehensive loss
|
(14,362
|
)
|
|
(522
|
)
|
|
(14,884
|
)
|
|||
Balance at December 25, 2015
|
$
|
(13,514
|
)
|
|
$
|
(499
|
)
|
|
$
|
(14,013
|
)
|
(1)
|
During 2015, we made a U.S. tax election for our Australian subsidiary that caused our permanent intercompany loan to be settled for tax purposes, resulting in a tax impact of
$3.0 million
on foreign currency translation adjustments. The tax impact on foreign currency translation adjustments for the fiscal years ended
2014
and
2013
was de minimis.
|
(2)
|
Consists of deferred compensation plan accounts, which are comprised of mutual funds classified as available-for-sale securities. The tax impact on unrealized gain (loss) on marketable securities was de minimis for the fiscal years ended
2015
,
2014
, and
2013
.
|
NOTE 17:
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
Fiscal years ended
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
3,504
|
|
|
$
|
2,483
|
|
|
$
|
1,058
|
|
Income taxes
|
34,401
|
|
|
9,140
|
|
|
15,565
|
|
NOTE 18:
|
SEGMENT INFORMATION
|
•
|
Labor Ready
: On-demand general labor;
|
•
|
Spartan Staffing
: Skilled manufacturing and logistics labor;
|
•
|
CLP Resources
: Skilled trades for commercial, industrial, and energy construction as well as building and plant maintenance;
|
•
|
PlaneTechs
: Skilled mechanics and technicians for the aviation and transportation industries;
|
•
|
Centerline Drivers:
Temporary and dedicated drivers for the transportation and distribution industries; and
|
•
|
Staff Management On-premise Staffing
: Exclusive recruitment and on-premise management of a facility's contingent industrial workforce. Effective
December 1, 2015
, we acquired SIMOS Insourcing Solutions, which will be fully integrated into our existing on-premise staffing operations.
|
•
|
PeopleScout and hrX
: Outsourced recruitment of permanent employees on behalf of clients; and
|
•
|
Staff Management
: Management of multiple third party staffing vendors on behalf of clients.
|
|
2015
|
|
2014
|
|
2013
|
|||||||
Revenue from services
|
|
|
|
|
|
|||||||
Staffing Services
|
$
|
2,591,166
|
|
|
$
|
2,125,915
|
|
|
$
|
1,668,929
|
|
|
Managed Services
|
104,514
|
|
|
48,130
|
|
|
—
|
|
||||
Total Company
|
$
|
2,695,680
|
|
|
$
|
2,174,045
|
|
|
$
|
1,668,929
|
|
|
|
|
|
|
|
|
|||||||
Income from operations
|
|
|
|
|
|
|||||||
Staffing Services
|
$
|
164,846
|
|
|
$
|
138,205
|
|
|
$
|
113,230
|
|
|
Managed Services
|
12,344
|
|
|
5,937
|
|
|
—
|
|
||||
Depreciation and amortization
|
(41,843
|
)
|
—
|
|
(29,474
|
)
|
|
(20,472
|
)
|
|||
Corporate unallocated
|
(37,505
|
)
|
|
(32,940
|
)
|
|
(33,175
|
)
|
||||
Total Company
|
97,842
|
|
|
81,728
|
|
|
59,583
|
|
||||
Interest and other income (expense), net
|
(1,395
|
)
|
|
116
|
|
|
1,354
|
|
||||
Income before tax expense
|
$
|
96,447
|
|
|
$
|
81,844
|
|
|
$
|
60,937
|
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
United States (including Puerto Rico)
|
$
|
2,603,085
|
|
|
96.6
|
%
|
|
$
|
2,096,958
|
|
|
96.5
|
%
|
|
$
|
1,617,884
|
|
|
96.9
|
%
|
International operations
|
92,595
|
|
|
3.4
|
%
|
|
77,087
|
|
|
3.5
|
%
|
|
51,045
|
|
|
3.1
|
%
|
|||
Total revenue from services
|
$
|
2,695,680
|
|
|
100.0
|
%
|
|
$
|
2,174,045
|
|
|
100.0
|
%
|
|
$
|
1,668,929
|
|
|
100.0
|
%
|
NOTE 19:
|
SELECTED QUARTERLY FINANCIAL DATA
(unaudited; in thousands, except per share data)
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
2015
|
|
|
|
|
|
|
|
||||||||
Revenue from services
|
$
|
573,315
|
|
|
$
|
627,714
|
|
|
$
|
683,918
|
|
|
$
|
810,733
|
|
Cost of services
|
443,479
|
|
|
475,748
|
|
|
515,051
|
|
|
625,729
|
|
||||
Gross profit
|
129,836
|
|
|
151,966
|
|
|
168,867
|
|
|
185,004
|
|
||||
Selling, general and administrative expenses
|
111,593
|
|
|
117,859
|
|
|
125,117
|
|
|
141,419
|
|
||||
Depreciation and amortization
|
10,520
|
|
|
10,397
|
|
|
10,498
|
|
|
10,428
|
|
||||
Income from operations
|
7,723
|
|
|
23,710
|
|
|
33,252
|
|
|
33,157
|
|
||||
Interest expense
|
(1,166
|
)
|
|
(881
|
)
|
|
(933
|
)
|
|
(1,180
|
)
|
||||
Interest and other income
|
632
|
|
|
679
|
|
|
567
|
|
|
887
|
|
||||
Interest expense, net
|
(534
|
)
|
|
(202
|
)
|
|
(366
|
)
|
|
(293
|
)
|
||||
Income before tax expense
|
7,189
|
|
|
23,508
|
|
|
32,886
|
|
|
32,864
|
|
||||
Income tax expense
|
1,473
|
|
|
6,235
|
|
|
12,796
|
|
|
4,696
|
|
||||
Net income
|
$
|
5,716
|
|
|
$
|
17,273
|
|
|
$
|
20,090
|
|
|
$
|
28,168
|
|
Net income per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.14
|
|
|
$
|
0.42
|
|
|
$
|
0.49
|
|
|
$
|
0.68
|
|
Diluted
|
$
|
0.14
|
|
|
$
|
0.42
|
|
|
$
|
0.48
|
|
|
$
|
0.67
|
|
2014
|
|
|
|
|
|
|
|
||||||||
Revenue from services
|
$
|
396,063
|
|
|
$
|
453,227
|
|
|
$
|
633,365
|
|
|
$
|
691,390
|
|
Cost of services
|
296,504
|
|
|
333,644
|
|
|
473,766
|
|
|
533,152
|
|
||||
Gross profit
|
99,559
|
|
|
119,583
|
|
|
159,599
|
|
|
158,238
|
|
||||
Selling, general and administrative expenses
|
91,982
|
|
|
96,354
|
|
|
120,318
|
|
|
117,123
|
|
||||
Depreciation and amortization
|
5,161
|
|
|
5,247
|
|
|
9,719
|
|
|
9,347
|
|
||||
Income from operations
|
2,416
|
|
|
17,982
|
|
|
29,562
|
|
|
31,768
|
|
||||
Interest expense
|
(263
|
)
|
|
(322
|
)
|
|
(1,140
|
)
|
|
(1,431
|
)
|
||||
Interest and other income
|
607
|
|
|
772
|
|
|
731
|
|
|
1,162
|
|
||||
Interest and other income (expense), net
|
344
|
|
|
450
|
|
|
(409
|
)
|
|
(269
|
)
|
||||
Income before tax expense
|
2,760
|
|
|
18,432
|
|
|
29,153
|
|
|
31,499
|
|
||||
Income tax expense
|
1,104
|
|
|
2,350
|
|
|
8,243
|
|
|
4,472
|
|
||||
Net income
|
$
|
1,656
|
|
|
$
|
16,082
|
|
|
$
|
20,910
|
|
|
$
|
27,027
|
|
Net income per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.04
|
|
|
$
|
0.39
|
|
|
$
|
0.51
|
|
|
$
|
0.67
|
|
Diluted
|
$
|
0.04
|
|
|
$
|
0.39
|
|
|
$
|
0.51
|
|
|
$
|
0.65
|
|
NOTE 20:
|
SUBSEQUENT EVENTS
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
Item 9B.
|
OTHER INFORMATION
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Item 11.
|
EXECUTIVE COMPENSATION
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
Item 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICE
|
Item 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
a)
|
Exhibits and Financial Statement Schedules
|
1.
|
Financial Statements can be found under Item 8 of Part II of this Form 10-K.
|
2.
|
Financial Statement Schedule II can be found on page 76 of this Form 10-K. Financial Statement Schedules I, III, IV and V have been omitted as they are not applicable.
|
3.
|
The Exhibit Index is found on page 78 of this Form 10-K.
|
|
2015
|
|
2014
|
|
2013
|
||||||
Balance, beginning of the year
|
$
|
7,603
|
|
|
$
|
5,710
|
|
|
$
|
4,999
|
|
Charged to expense
|
7,132
|
|
|
11,815
|
|
|
12,063
|
|
|||
Write-offs
|
(8,833
|
)
|
|
(9,922
|
)
|
|
(11,352
|
)
|
|||
Balance, end of year
|
$
|
5,902
|
|
|
$
|
7,603
|
|
|
$
|
5,710
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Balance, beginning of the year
|
$
|
3,933
|
|
|
$
|
5,652
|
|
|
$
|
5,639
|
|
Charged to expense
|
(59
|
)
|
|
(1,719
|
)
|
|
13
|
|
|||
Balance, end of year
|
$
|
3,874
|
|
|
$
|
3,933
|
|
|
$
|
5,652
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Balance, beginning of the year
|
$
|
2,844
|
|
|
$
|
844
|
|
|
$
|
558
|
|
Seaton acquisition
|
—
|
|
|
2,068
|
|
|
—
|
|
|||
Charged to expense
|
383
|
|
|
(68
|
)
|
|
286
|
|
|||
Balance, end of year
|
$
|
3,227
|
|
|
$
|
2,844
|
|
|
$
|
844
|
|
|
|
TrueBlue, Inc.
|
|
|
|
|
|
|
|
/s/ Steven C. Cooper
|
2/22/2016
|
|
|
Signature
|
Date
|
|
By:
|
Steven C. Cooper, Director and Chief Executive Officer
|
|
|
|
|
|
|
|
/s/ Derrek L. Gafford
|
2/22/2016
|
|
|
Signature
|
Date
|
|
By:
|
Derrek L. Gafford, Chief Financial Officer and
Executive Vice President
|
|
|
|
|
|
|
|
/s/ Norman H. Frey
|
2/22/2016
|
|
|
Signature
|
Date
|
|
By:
|
Norman H. Frey, Chief Accounting Officer and
Senior Vice President |
|
/s/ Steven C. Cooper
|
|
2/22/2016
|
|
/s/ Joseph P. Sambataro, Jr.
|
|
2/22/2016
|
Signature
|
|
Date
|
|
Signature
|
|
Date
|
Steven C. Cooper, Director, Chief Executive Officer and President
|
|
|
|
Joseph P. Sambataro, Jr., Chairman of the Board
|
|
|
|
|
|
|
|
|
|
/s/ Craig E. Tall
|
|
2/22/2016
|
|
/s/ Jeffrey B. Sakaguchi
|
|
2/22/2016
|
Signature
|
|
Date
|
|
Signature
|
|
Date
|
Craig E. Tall, Director
|
|
|
|
Jeffrey B. Sakaguchi, Director
|
|
|
|
|
|
|
|
|
|
/s/ Thomas E. McChesney
|
|
2/22/2016
|
|
/s/ William W. Steele
|
|
2/22/2016
|
Signature
|
|
Date
|
|
Signature
|
|
Date
|
Thomas E. McChesney, Director
|
|
|
|
William W. Steele, Director
|
|
|
|
|
|
|
|
|
|
/s/ Gates McKibbin
|
|
2/22/2016
|
|
/s/ Bonnie W. Soodik
|
|
2/22/2016
|
Signature
|
|
Date
|
|
Signature
|
|
Date
|
Gates McKibbin, Director
|
|
|
|
Bonnie W. Soodik, Director
|
|
|
|
|
|
|
|
|
|
/s/ Colleen B. Brown
|
|
2/22/2016
|
|
|
|
|
Signature
|
|
Date
|
|
|
|
|
Colleen B. Brown, Director
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit
Number
|
Exhibit Description
|
Filed Herewith
|
Form
|
|
File No.
|
|
Date of First Filing
|
|
|
|
|
|
|
|
|
3.1
|
Amended and Restated Articles of Incorporation.
|
|
8-K
|
|
001-14543
|
|
6/16/2009
|
|
|
|
|
|
|
|
|
3.2
|
Amended and Restated Company Bylaws.
|
|
8-K
|
|
001-14543
|
|
9/17/2008
|
|
|
|
|
|
|
|
|
10.1
|
Assumption and Novation Agreement among TrueBlue, Inc. and Lumbermen's Mutual Casualty Company, American Motorist Insurance Company, American Protection Insurance Company and American Manufacturers Mutual Insurance Company and National Union Fire Insurance Company of Pittsburgh, PA, dated December 29, 2004.
|
|
10-K
|
|
001-14543
|
|
3/11/2005
|
|
|
|
|
|
|
|
|
10.2
|
Indemnification Agreement between TrueBlue, Inc. and National Union Fire Insurance Company of Pittsburgh, PA dated December 29, 2004.
|
|
10-K
|
|
001-14543
|
|
3/11/2005
|
|
|
|
|
|
|
|
|
10.3*
|
Executive Employment Agreement between TrueBlue, Inc. and James E. Defebaugh, dated August 3, 2005.
|
|
8-K
|
|
001-14543
|
|
8/9/2005
|
|
|
|
|
|
|
|
|
10.4*
|
First Amendment to the Executive Employment Agreement between TrueBlue, Inc. and James E. Defebaugh, dated December 31, 2006.
|
|
10-Q
|
|
001-14543
|
|
5/4/2007
|
|
|
|
|
|
|
|
|
10.5*
|
Executive Employment Agreement between TrueBlue, Inc. and Derrek L. Gafford, dated December 31, 2006.
|
|
10-Q
|
|
001-14543
|
|
5/4/2007
|
|
|
|
|
|
|
|
|
10.6*
|
Executive Employment Agreement between TrueBlue, Inc. and Wayne W. Larkin, dated December 31, 2006.
|
|
10-Q
|
|
001-14543
|
|
5/4/2007
|
|
|
|
|
|
|
|
|
10.7*
|
Form Executive Non-Competition Agreement between TrueBlue, Inc. and Steven C. Cooper, Jim E. Defebaugh, Derrek L. Gafford, Wayne W. Larkin, Kimberly Cannon, and Patrick Beharelle.
|
|
10-Q
|
|
001-14543
|
|
5/4/2007
|
|
|
|
|
|
|
|
|
10.8*
|
Form Executive Indemnification Agreement between TrueBlue, Inc. and Steven C. Cooper, Jim E. Defebaugh, Derrek L. Gafford, and Wayne W. Larkin, Kimberly Cannon, and Patrick Beharelle.
|
|
10-Q
|
|
001-14543
|
|
5/4/2007
|
|
|
|
|
|
|
|
|
10.9*
|
Form Executive Change in Control Agreement between TrueBlue, Inc. and Steven C. Cooper, Jim E. Defebaugh, Derrek L. Gafford, Wayne W. Larkin, Kimberly Cannon, and Patrick Beharelle.
|
|
10-Q
|
|
001-14543
|
|
5/4/2007
|
|
|
|
|
|
|
|
|
10.10*
|
Amended and Restated Non-Competition Agreement between TrueBlue, Inc. and Steven C. Cooper, dated November 16, 2009.
|
|
8-K
|
|
001-14543
|
|
11/19/2009
|
|
|
|
|
|
|
|
|
10.11*
|
Equity Retainer And Deferred Compensation Plan For Non- Employee Directors, effective January 1, 2010.
|
|
S-8
|
|
333-164614
|
|
2/1/2010
|
|
|
|
|
|
|
|
|
10.12
|
2010 Employee Stock Purchase Plan.
|
|
S-8
|
|
333-167770
|
|
6/25/2010
|
|
|
|
|
|
|
|
|
10.13*
|
Executive Employment Agreement between TrueBlue, Inc. and Kimberly Cannon, dated November 8, 2010.
|
|
10-K
|
|
001-14543
|
|
2/2/2012
|
|
|
|
|
|
|
|
|
10.14*
|
TrueBlue, Inc. Nonqualified Deferred Compensation Plan.
|
|
10-K
|
|
001-14543
|
|
2/22/2012
|
|
|
|
|
|
|
|
|
10.15
|
Term Loan Agreement by and among TrueBlue, Inc., The Lenders That Are Signatories hereto, and Synovus Bank dated as of February 4, 2013
|
|
10-K
|
|
001-14543
|
|
2/21/2013
|
|
|
|
|
|
|
|
|
10.16*
|
Amended and Restated 2005 Long-Term Equity Incentive Plan
|
|
S-8
|
|
333-190220
|
|
7/29/2013
|
|
|
|
|
|
|
|
|
10.17
|
Stock Purchase Agreement by and among TrueBlue, Inc., Staffing Solutions Holdings, Inc., the Holders of the Company’s Preferred Stock, Common Stock, Preferred Warrants and Common Warrants, and the Security holder Representative dated as of June 1, 2014.
|
|
10-Q
|
|
001-14543
|
|
7/28/2014
|
|
|
|
|
||||
|
|
|
Incorporated by Reference
|
||||
|
|
Filed Herewith
|
Form
|
|
File No.
|
|
Date of First Filing
|
10.18
|
Second Amended and Restated Credit Agreement by and among Bank of America, N.A., Wells Fargo Bank, N.A., PNC Bank, National Association and TrueBlue, Inc. dated as of June 30, 2014.
|
|
10-Q
|
|
001-14543
|
|
7/28/2014
|
|
|
|
|
|
|
|
|
10.19*
|
Executive Employment Agreement between TrueBlue, Inc. and Patrick Beharelle, effective June 30, 2014.
|
X
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
10.20*
|
Amended and Restated Executive Employment Agreements Executive Employment Agreement between TrueBlue, Inc. and Steven C. Cooper, effective October 21, 2015.
|
X
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
10.21
|
Third Amendment to Second Restated Credit Agreement by and Among Bank of America, N.A., Wells Fargo Bank, N.A., PNC Bank, National Association and TrueBlue, Inc. dated January 4, 2016.
|
X
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
18.1
|
Preferability Letter Regarding Change in Accounting Policy Related to Goodwill.
|
|
10-Q
|
|
001-14543
|
|
4/28/2014
|
|
|
|
|
|
|
|
|
21.1
|
Subsidiaries of TrueBlue, Inc.
|
X
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
23.1
|
Consent of Deloitte & Touche LLP - Independent Registered Public Accounting Firm.
|
X
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
31.1
|
Certification of Steven C. Cooper, Chief Executive Officer of TrueBlue, Inc., Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
31.2
|
Certification of Derrek L. Gafford, Chief Financial Officer of TrueBlue, Inc., Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
32.1**
|
Certification of Steven C. Cooper, Chief Executive Officer of TrueBlue, Inc. and Derrek L. Gafford, Chief Financial Officer of TrueBlue, Inc., Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
X
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
101.INS
|
XBRL Instance Document.
|
X
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema.
|
X
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase.
|
X
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase.
|
X
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase.
|
X
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase.
|
X
|
—
|
|
—
|
|
—
|
*
|
Indicates a management contract or compensatory plan or arrangement
|
**
|
Furnished herewith.
|
I.
|
COMPENSATION AND POSITION.
|
II.
|
TERMS AND CONDITIONS.
|
III.
|
CONFIDENTIAL INFORMATION.
|
IV.
|
ASSIGNMENT OF INVENTIONS.
|
V.
|
COMPLIANCE WITH LAWS AND COMPANY’S CODE OF CONDUCT AND CORPORATE GOVERNANCE GUIDELINES.
|
VI.
|
MISCELLANEOUS.
|
EXECUTIVE
Signed:
/s/ A. Patrick Beharelle
Name:
Patrick Beharelle
By signing this Agreement, I accept and acknowledge that I will abide by the terms and conditions of this Agreement. I agree and understand that nothing in this Agreement shall confer any right with respect to continuation of employment by Company, nor shall it interfere in any way with my right or Company’s right to terminate my employment at any time, with or without cause.
|
|
COMPANY
By:
/s/ Jim Defebaugh
Name:
Jim Defebaugh
Title:
EVP, General Counsel, Secretary
|
|
|
|
|
|
|
|
|
(a)
|
the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year.
|
(b)
|
any reimbursement of an eligible expense shall be paid to the Executive on or before the last day of the calendar year following the calendar year in which the expense was incurred; and
|
(c)
|
any right to reimbursements or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit.
|
BORROWERS
:
TRUEBLUE, INC.,
a Washington corporation
By: _
/s/ Derrek Gafford
______________________________
Name: Derrek Gafford
Title: Executive Vice President and Chief Financial Officer
|
AGENT
:
BANK OF AMERICA, N.A.,
as Agent
By:
/s/ Gregory A. Jones
Name: Gregory A. Jones
Title: Senior Vice President
|
LENDER
:
BANK OF AMERICA, N.A.,
as Lender
By:
/s/ Gregory A. Jones
Name: Gregory A. Jones
Title: Senior Vice President
|
CORPORATE NAME
|
|
Incorporated in
State/Country of:
|
CLP Holdings Corp
|
|
Nevada
|
CLP Resources, Inc.
|
|
Delaware
|
Centerline Drivers, LLC
|
|
Nevada
|
HRX Pty, Ltd
|
|
Australia
|
Labor Ready Northwest, Inc.
|
|
Washington
|
Labor Ready Southwest, Inc.
|
|
Washington
|
Labor Ready Central, Inc.
|
|
Washington
|
Labor Ready Holdings, Inc.
|
|
Nevada
|
Labor Ready Midwest, Inc.
|
|
Washington
|
Labor Ready Mid-Atlantic, Inc.
|
|
Washington
|
Labor Ready Northeast, Inc.
|
|
Washington
|
Labor Ready Southeast, Inc.
|
|
Washington
|
Labour Ready Temporary Services, Ltd.
|
|
Canada
|
People Scout, Inc.
|
|
Delaware
|
PlaneTechs, LLC
|
|
Nevada
|
Simos Insourcing Solutions, LLC
|
|
Delaware
|
SMX, LLC
|
|
Illinois
|
Spartan Staffing, LLC
|
|
Nevada
|
Spartan Staffing Puerto Rico, LLC
|
|
Puerto Rico
|
Staff Management Solutions, LLC
|
|
Illinois
|
Staffing Solutions Holdings, Inc.
|
|
Delaware
|
TrueBlue Enterprises, Inc.
|
|
Nevada
|
Worker’s Assurance of Hawaii, Inc.
|
|
Hawaii
|
1.
|
I have reviewed this
Annual
Report on Form
10-K
of TrueBlue, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Steven C. Cooper
|
Steven C. Cooper
|
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this
Annual
Report on Form
10-K
of TrueBlue, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ Derrek L. Gafford
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Derrek L. Gafford
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Chief Financial Officer (Principal Executive Officer)
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(1)
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The
Annual
Report of the Company on Form
10-K
, for the fiscal period ended
December 25, 2015
(the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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/s/ Steven C. Cooper
|
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/s/ Derrek L. Gafford
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Steven C. Cooper
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Derrek L. Gafford
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Chief Executive Officer
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Chief Financial Officer
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(Principal Executive Officer)
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(Principal Financial Officer)
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