þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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26-0656684
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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¨
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Accelerated filer
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þ
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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þ
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•
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future financial performance and growth targets or expectations;
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•
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market and industry trends and developments; and
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•
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the benefits of our completed and future merger, acquisition and disposition transactions.
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•
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the availability of workers’ compensation insurance coverage at commercially reasonable terms;
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•
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the availability of qualified temporary workers;
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•
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compliance with federal, state and local labor and employment laws and regulations and changes in such laws and regulations;
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•
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the ability to compete with new competitors and competitors with superior marketing and financial resources;
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•
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management team changes;
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•
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the favorable resolution of current or future litigation;
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•
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the impact of outstanding indebtedness on the ability to fund operations or obtain additional financing;
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•
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the ability to leverage the benefits of recent acquisitions and successfully integrate newly acquired operations;
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•
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adverse changes in the economic conditions of the industries or markets that we serve;
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•
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disturbances in world financial, credit, and stock markets;
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•
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unanticipated changes in regulations affecting the company’s business;
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•
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a decline in consumer confidence and discretionary spending;
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•
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the general performance of the U.S. and global economies;
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•
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continued or escalated conflict in the Middle East; and
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•
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other risks referenced from time to time in our past and future filings with the Securities and Exchange Commission (“SEC”), including in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2017
.
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September 30,
2018 |
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December 31, 2017
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||||
ASSETS
|
|
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||||||
Current assets
|
|
|
|
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||||
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Accounts receivable (net of allowance for doubtful accounts of $473,573 at 2018 and 2017)
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|
$
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39,691,279
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|
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$
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36,707,885
|
|
|
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Prepaid expenses
|
|
1,339,763
|
|
|
947,968
|
|
|||
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Income taxes receivable
|
|
—
|
|
|
190,912
|
|
|||
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Other current assets
|
|
709,058
|
|
|
143,237
|
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|||
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Total current assets
|
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41,740,100
|
|
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37,990,002
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|
|
|
|
|
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||||
Property and equipment, net
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2,517,234
|
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|
2,039,935
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||||
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|||||
Other assets
|
|
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||||
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Deposits
|
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3,194,739
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2,907,104
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|||
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Deferred income taxes, net
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5,317,371
|
|
|
6,402,513
|
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|||
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Intangible assets, net
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34,076,543
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37,323,286
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|||
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Goodwill
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17,983,549
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17,970,049
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|||
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Total other assets
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60,572,202
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64,602,952
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||
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Total assets
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$
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104,829,536
|
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$
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104,632,889
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LIABILITIES AND STOCKHOLDERS' EQUITY
|
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||||||
Current liabilities
|
|
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||||
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Long-term debt, current portion (net of deferred finance fees of $56,572 and $138,801 for 2018 and 2017, respectively)
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$
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3,924,678
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$
|
2,923,699
|
|
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Accrued interest
|
|
348,820
|
|
|
330,630
|
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|||
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Accounts payable
|
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261,083
|
|
|
1,909,612
|
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|||
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Accrued payroll and expenses
|
|
11,721,113
|
|
|
11,540,806
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|||
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Accrued workers’ compensation
|
|
430,165
|
|
|
592,121
|
|
|||
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Contingent consideration, current portion
|
|
3,598,340
|
|
|
4,299,184
|
|
|||
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Other current liabilities
|
|
—
|
|
|
74,052
|
|
|||
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Income taxes payable
|
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26,525
|
|
|
—
|
|
|||
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Total current liabilities
|
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20,310,724
|
|
|
21,670,104
|
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||
|
|
|
|
|
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|
||||
Line of credit (net of deferred finance fees of $615,766 and $747,716 for 2018 and 2017, respectively)
|
|
13,082,185
|
|
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20,620,352
|
|
||||
Long-term debt, less current portion (net of deferred finance fees of $81,703 and $246,030 for 2018 and 2017, respectively)
|
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6,976,797
|
|
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20,578,970
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||||
Contingent consideration, less current portion
|
|
906,959
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|
2,178,486
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|
||||
Other long-term liabilities
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698,439
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|
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450,298
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||||
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Total liabilities
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41,975,104
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65,498,210
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|||
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Commitments and contingencies
|
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||||
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||||
Preferred stock, $0.01 par value per share, 500,000 shares authorized, -0- shares issued and outstanding
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—
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—
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||||
Common stock, $0.01 par value per share; 19,500,000 shares authorized, 10,157,877 and 8,759,376 shares issued and outstanding for 2018 and 2017, respectively, net of treasury stock, at cost, 828 shares and -0- shares for 2018 and 2017, respectively
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|
77,552
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|
|
87,594
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|
||||
Additional paid in capital
|
|
56,563,068
|
|
|
37,675,329
|
|
||||
Retained earnings
|
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6,213,812
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|
1,371,756
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||||
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Total stockholders’ equity
|
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62,854,432
|
|
|
39,134,679
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|||
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Total liabilities and stockholders’ equity
|
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$
|
104,829,536
|
|
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$
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104,632,889
|
|
|
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Thirteen Weeks Ended
|
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Thirty-nine Weeks Ended
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||||||||||||
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2018
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2017
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2018
|
|
2017
|
||||||||
Revenues
|
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$
|
77,062,137
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$
|
71,281,674
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|
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$
|
214,863,045
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|
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$
|
196,899,224
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Cost of services
|
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55,689,112
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53,033,615
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156,987,810
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147,752,650
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|||||
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Gross profit
|
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21,373,025
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18,248,059
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57,875,235
|
|
|
49,146,574
|
|
||||
Selling, general and administrative expenses
|
|
13,034,161
|
|
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11,175,596
|
|
|
36,370,008
|
|
|
31,562,377
|
|
|||||
Depreciation and amortization
|
|
1,247,537
|
|
|
1,436,279
|
|
|
3,801,425
|
|
|
4,672,755
|
|
|||||
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Operating income
|
|
7,091,327
|
|
|
5,636,184
|
|
|
17,703,802
|
|
|
12,911,442
|
|
||||
Interest expense, net
|
|
661,683
|
|
|
883,668
|
|
|
2,274,575
|
|
|
2,279,652
|
|
|||||
|
Income before income taxes
|
|
6,429,644
|
|
|
4,752,516
|
|
|
15,429,227
|
|
|
10,631,790
|
|
||||
Income tax expense
|
|
1,368,258
|
|
|
1,615,653
|
|
|
2,732,386
|
|
|
3,908,570
|
|
|||||
|
Net income
|
|
$
|
5,061,386
|
|
|
$
|
3,136,863
|
|
|
$
|
12,696,841
|
|
|
$
|
6,723,220
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
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Basic
|
|
$
|
0.50
|
|
|
$
|
0.36
|
|
|
$
|
1.36
|
|
|
$
|
0.77
|
|
|
Diluted
|
|
$
|
0.49
|
|
|
$
|
0.35
|
|
|
$
|
1.32
|
|
|
$
|
0.75
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Basic
|
|
10,109,791
|
|
|
8,759,376
|
|
|
9,368,840
|
|
|
8,724,811
|
|
||||
|
Diluted
|
|
10,342,559
|
|
|
9,077,147
|
|
|
9,638,616
|
|
|
9,019,878
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per common share
|
|
$
|
0.30
|
|
|
$
|
0.25
|
|
|
$
|
0.85
|
|
|
$
|
0.75
|
|
|
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
Preferred
Stock
|
|
Shares
|
|
Par
Value
|
|
Treasury Stock Amount
|
|
Additional Paid in Capital
|
|
Retained
Earnings
|
|
Total
|
|||||||||||||
Stockholders’ equity, December 31, 2017
|
|
$
|
—
|
|
|
8,759,376
|
|
|
$
|
87,594
|
|
|
$
|
—
|
|
|
$
|
37,675,329
|
|
|
$
|
1,371,756
|
|
|
$
|
39,134,679
|
|
Share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
873,186
|
|
|
—
|
|
|
873,186
|
|
||||||
Additional shares of common stock available for issuance in the 2013 Long-Term Incentive Plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,500
|
)
|
|
—
|
|
|
(7,500
|
)
|
||||||
Issuance of shares, net of offering costs
|
|
—
|
|
|
1,293,750
|
|
|
12,938
|
|
|
—
|
|
|
21,347,200
|
|
|
—
|
|
|
21,360,138
|
|
||||||
Issuance of restricted shares, net of 828 shares of treasury stock
|
|
—
|
|
|
41,172
|
|
|
412
|
|
|
(24,027
|
)
|
|
(412
|
)
|
|
—
|
|
|
(24,027
|
)
|
||||||
Exercise of common stock options and warrants
|
|
—
|
|
|
63,579
|
|
|
635
|
|
|
—
|
|
|
10,434
|
|
|
—
|
|
|
11,069
|
|
||||||
L. Allen Baker, Jr. option cancellation agreement
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,335,169
|
)
|
|
—
|
|
|
(3,335,169
|
)
|
||||||
Cash dividend declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,854,785
|
)
|
|
(7,854,785
|
)
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,696,841
|
|
|
12,696,841
|
|
||||||
Stockholders’ equity, September 30, 2018
|
|
$
|
—
|
|
|
10,157,877
|
|
|
$
|
101,579
|
|
|
$
|
(24,027
|
)
|
|
$
|
56,563,068
|
|
|
$
|
6,213,812
|
|
|
$
|
62,854,432
|
|
|
|
|
|
|
2018
|
|
2017
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
|||||
|
Net income
|
|
$
|
12,696,841
|
|
|
$
|
6,723,220
|
|
||
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|||
|
|
Depreciation
|
|
545,751
|
|
|
428,155
|
|
|||
|
|
Amortization
|
|
3,255,674
|
|
|
4,244,600
|
|
|||
|
|
Loss on disposal of property and equipment
|
|
15,554
|
|
|
17,373
|
|
|||
|
|
Contingent consideration adjustment
|
|
(2,160,307
|
)
|
|
—
|
|
|||
|
|
Amortization of deferred financing fees
|
|
382,025
|
|
|
168,797
|
|
|||
|
|
Interest expense on contingent consideration payable
|
|
515,932
|
|
|
907,339
|
|
|||
|
|
Provision for doubtful accounts
|
|
39,389
|
|
|
88,000
|
|
|||
|
|
Share-based compensation
|
|
873,186
|
|
|
357,024
|
|
|||
|
|
Deferred income taxes
|
|
1,085,142
|
|
|
(403,715
|
)
|
|||
|
|
Net changes in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
|
|||
|
|
|
Accounts receivable
|
|
(3,022,783
|
)
|
|
(1,803,486
|
)
|
||
|
|
|
Prepaid expenses
|
|
(391,795
|
)
|
|
519,859
|
|
||
|
|
|
Other current assets
|
|
(565,821
|
)
|
|
72,151
|
|
||
|
|
|
Deposits
|
|
(287,636
|
)
|
|
(137,726
|
)
|
||
|
|
|
Accrued interest
|
|
18,190
|
|
|
208,111
|
|
||
|
|
|
Accounts payable
|
|
(1,648,529
|
)
|
|
(518,921
|
)
|
||
|
|
|
Accrued payroll and expenses
|
|
180,308
|
|
|
1,252,864
|
|
||
|
|
|
Accrued workers’ compensation
|
|
(161,956
|
)
|
|
(473,319
|
)
|
||
|
|
|
Other current liabilities
|
|
(87,552
|
)
|
|
120,569
|
|
||
|
|
|
Income taxes payable
|
|
217,437
|
|
|
244,072
|
|
||
|
|
|
Other long-term liabilities
|
|
(118,062
|
)
|
|
(52,703
|
)
|
||
|
|
Net cash provided by operating activities
|
|
11,380,988
|
|
|
11,962,264
|
|
|||
|
|
|
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|||||
|
Business acquired, net of cash received
|
|
—
|
|
|
(24,500,000
|
)
|
||||
|
Capital expenditures
|
|
(681,333
|
)
|
|
(895,989
|
)
|
||||
|
Proceeds from the sale of property and equipment
|
|
—
|
|
|
1,500
|
|
||||
|
|
Net cash used in investing activities
|
|
(681,333
|
)
|
|
(25,394,489
|
)
|
|
|
|
|
|
2018
|
|
2017
|
||||
|
|
|
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
|
|||||
|
Net payments under line of credit
|
|
(7,670,117
|
)
|
|
(3,492,293
|
)
|
||||
|
Proceeds from issuance of long-term debt
|
|
—
|
|
|
25,000,000
|
|
||||
|
Principal payments on long-term debt
|
|
(12,847,750
|
)
|
|
(500,000
|
)
|
||||
|
Payments of dividends
|
|
(7,854,785
|
)
|
|
(6,545,915
|
)
|
||||
|
Issuance of shares under the 2013 Long-Term Incentive Plan and Form S-3 registration statement, net of exercises
|
|
21,339,680
|
|
|
86,249
|
|
||||
|
L. Allen Baker, Jr. option cancellation agreement
|
|
(3,335,169
|
)
|
|
—
|
|
||||
|
Contingent consideration paid
|
|
(327,996
|
)
|
|
—
|
|
||||
|
Deferred financing costs
|
|
(3,518
|
)
|
|
(1,115,816
|
)
|
||||
|
|
Net cash (used in) provided by financing activities
|
|
(10,699,655
|
)
|
|
13,432,225
|
|
|||
Net change in cash and cash equivalents
|
|
—
|
|
|
—
|
|
|||||
Cash and cash equivalents, beginning of period
|
|
—
|
|
|
—
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
|
|
|
|||||
|
Cash paid for interest
|
|
$
|
1,396,182
|
|
|
$
|
930,811
|
|
||
|
Cash paid for taxes, net of refunds
|
|
$
|
1,378,890
|
|
|
$
|
4,058,353
|
|
||
Non-cash transactions:
|
|
|
|
|
|
|
|||||
|
Leasehold improvements funded by landlord incentives
|
|
$
|
366,202
|
|
|
$
|
—
|
|
|
|
Thirteen Weeks Ended
|
|
Thirty-nine Weeks Ended
|
||||||||||||
|
|
September 30, 2018
|
|
September 24, 2017
|
|
September 30, 2018
|
|
September 24, 2017
|
||||||||
Beginning balance
|
|
$
|
473,573
|
|
|
$
|
473,573
|
|
|
$
|
473,573
|
|
|
$
|
473,573
|
|
Provision for doubtful accounts
|
|
21,514
|
|
|
75,772
|
|
|
39,389
|
|
|
88,000
|
|
||||
Amounts written off, net
|
|
(21,514
|
)
|
|
(75,772
|
)
|
|
(39,389
|
)
|
|
(88,000
|
)
|
||||
Ending balance
|
|
$
|
473,573
|
|
|
$
|
473,573
|
|
|
$
|
473,573
|
|
|
$
|
473,573
|
|
|
|
|
Thirteen Weeks Ended
|
|
Thirty-nine Weeks Ended
|
||||||||
|
|
|
September 30,
2018 |
|
September 24,
2017 |
|
September 30,
2018 |
|
September 24,
2017 |
||||
Weighted-average number of common shares outstanding:
|
|
10,109,791
|
|
|
8,759,376
|
|
|
9,368,840
|
|
|
8,724,811
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|||||
|
Stock options and restricted stock
|
|
181,012
|
|
|
279,735
|
|
|
227,846
|
|
|
260,404
|
|
|
Warrants
|
|
51,756
|
|
|
38,036
|
|
|
41,930
|
|
|
34,663
|
|
Weighted-average number of diluted common shares outstanding
|
|
10,342,559
|
|
|
9,077,147
|
|
|
9,638,616
|
|
|
9,019,878
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Stock options and restricted stock
|
|
175,000
|
|
|
178,000
|
|
|
175,000
|
|
|
178,000
|
|
|
Warrants
|
|
—
|
|
|
32,250
|
|
|
—
|
|
|
32,250
|
|
Antidilutive shares
|
|
175,000
|
|
|
210,250
|
|
|
175,000
|
|
|
210,250
|
|
|
|
September 24, 2017
|
||||||
|
|
Thirteen Weeks Ended
|
|
Thirty-nine Weeks Ended
|
||||
Revenues
|
|
$
|
73,782
|
|
|
$
|
214,659
|
|
Gross profit
|
|
$
|
19,196
|
|
|
$
|
54,391
|
|
Net income
|
|
$
|
3,203
|
|
|
$
|
6,992
|
|
Income per share:
|
|
|
|
|
||||
Basic
|
|
$
|
0.37
|
|
|
$
|
0.80
|
|
Diluted
|
|
$
|
0.35
|
|
|
$
|
0.78
|
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Temporary worker payroll
|
|
$
|
6,211,368
|
|
|
$
|
5,124,908
|
|
Temporary worker payroll related
|
|
1,848,140
|
|
|
2,454,539
|
|
||
Accrued bonuses and commissions
|
|
1,717,838
|
|
|
1,172,497
|
|
||
Other
|
|
1,943,767
|
|
|
2,788,862
|
|
||
|
|
$
|
11,721,113
|
|
|
$
|
11,540,806
|
|
|
Estimated Cash Payment
|
|
Discount
|
|
Net
|
||||||
Due in:
|
|
|
|
|
|
||||||
Less than one year
|
$
|
3,750,000
|
|
|
$
|
(151,660
|
)
|
|
$
|
3,598,340
|
|
One to two years
|
1,000,000
|
|
|
(93,041
|
)
|
|
906,959
|
|
|||
Contingent consideration
|
$
|
4,750,000
|
|
|
$
|
(244,701
|
)
|
|
$
|
4,505,299
|
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||||||
Base Rate
|
|
$
|
3,697,951
|
|
6.25
|
%
|
|
$
|
6,368,068
|
|
5.50
|
%
|
LIBOR
|
|
5,000,000
|
|
5.09
|
%
|
|
5,000,000
|
|
4.09
|
%
|
||
LIBOR
|
|
5,000,000
|
|
5.09
|
%
|
|
5,000,000
|
|
4.13
|
%
|
||
LIBOR
|
|
—
|
|
—
|
%
|
|
5,000,000
|
|
4.24
|
%
|
||
Total
|
|
$
|
13,697,951
|
|
|
|
$
|
21,368,068
|
|
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||||||
Base Rate
|
|
$
|
1,039,750
|
|
6.25
|
%
|
|
$
|
687,500
|
|
5.50
|
%
|
LIBOR
|
|
6,500,000
|
|
5.34
|
%
|
|
6,500,000
|
|
4.34
|
%
|
||
LIBOR
|
|
3,500,000
|
|
5.34
|
%
|
|
6,500,000
|
|
4.38
|
%
|
||
LIBOR
|
|
—
|
|
—
|
%
|
|
6,000,000
|
|
4.49
|
%
|
||
LIBOR
|
|
—
|
|
—
|
%
|
|
4,200,000
|
|
4.64
|
%
|
||
Long-term debt
|
|
$
|
11,039,750
|
|
|
|
$
|
23,887,500
|
|
|
Amounts Recorded at Fair Value
|
|
Financial Statement Classification
|
|
Fair Value
Hierarchy
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Contingent consideration, net
|
|
Contingent consideration, net - current and long-term
|
|
Level 3
|
|
$
|
4,505,299
|
|
|
$
|
6,477,670
|
|
|
Number of
Shares
|
|
Weighted Average Exercise Price Per Share
|
|
Weighted Average Remaining Contractual Life
|
|
Total Intrinsic Value of Awards
(in thousands)
|
|||||
Awards outstanding at December 31, 2017
|
765,411
|
|
|
$
|
10.27
|
|
|
7.3
|
|
$
|
4,521
|
|
Granted
|
217,000
|
|
|
$
|
20.73
|
|
|
|
|
|
||
Exercised
|
(89,953
|
)
|
|
$
|
8.23
|
|
|
|
|
|
||
Forfeited / Canceled
|
(292,088
|
)
|
|
$
|
6.71
|
|
|
|
|
|
||
Awards outstanding at September 30, 2018
|
600,370
|
|
|
$
|
16.09
|
|
|
7.0
|
|
$
|
6,672
|
|
|
|
|
|
|
|
|
|
|||||
Awards exercisable at December 31, 2017
|
498,611
|
|
|
$
|
8.74
|
|
|
6.8
|
|
$
|
3,640
|
|
Awards exercisable at September 30, 2018
|
292,470
|
|
|
$
|
13.97
|
|
|
7.0
|
|
$
|
3,871
|
|
|
|
Number of
Shares |
|
Weighted Average Grant Date Fair Value
|
|||
Nonvested outstanding at December 31, 2017
|
|
266,800
|
|
|
$
|
3.09
|
|
Nonvested outstanding at September 30, 2018
|
|
307,900
|
|
|
$
|
18.10
|
|
|
Number of
Shares
|
|
Weighted Average Exercise Price Per Share
|
|
Weighted Average Remaining Contractual Life
|
|
Total Intrinsic Value of Options
(in thousands)
|
|||||
Warrants outstanding at December 31, 2017
|
123,984
|
|
|
$
|
11.51
|
|
|
2.2
|
|
$
|
577
|
|
Exercised
|
(30,768
|
)
|
|
$
|
11.27
|
|
|
|
|
|
||
Warrants outstanding at September 30, 2018
|
93,216
|
|
|
$
|
11.59
|
|
|
1.5
|
|
$
|
1,455
|
|
|
|
|
|
|
|
|
|
|||||
Warrants exercisable at December 31, 2017
|
123,984
|
|
|
$
|
11.51
|
|
|
2.2
|
|
$
|
577
|
|
Warrants exercisable at September 30, 2018
|
93,216
|
|
|
$
|
11.59
|
|
|
1.5
|
|
$
|
1,455
|
|
|
|
Thirteen Weeks Ended
|
|
Thirty-nine Weeks Ended
|
||||||||||||
|
|
September 30,
2018 |
|
September 24,
2017 |
|
September 30,
2018 |
|
September 24,
2017 |
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Real Estate
|
|
$
|
26,531,283
|
|
|
$
|
21,758,642
|
|
|
$
|
65,864,097
|
|
|
$
|
51,436,393
|
|
Professional
|
|
29,171,990
|
|
|
31,739,816
|
|
|
90,394,110
|
|
|
91,769,877
|
|
||||
Light Industrial
|
|
21,358,864
|
|
|
17,783,216
|
|
|
58,604,838
|
|
|
53,692,954
|
|
||||
Total
|
|
$
|
77,062,137
|
|
|
$
|
71,281,674
|
|
|
$
|
214,863,045
|
|
|
$
|
196,899,224
|
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Real Estate
|
|
$
|
44,784
|
|
|
$
|
23,255
|
|
|
$
|
125,819
|
|
|
$
|
70,159
|
|
Professional
|
|
74,488
|
|
|
44,261
|
|
|
190,952
|
|
|
129,968
|
|
||||
Light Industrial
|
|
23,446
|
|
|
27,690
|
|
|
76,372
|
|
|
80,231
|
|
||||
Corporate
|
|
51,923
|
|
|
49,148
|
|
|
152,608
|
|
|
147,797
|
|
||||
Total
|
|
$
|
194,641
|
|
|
$
|
144,354
|
|
|
$
|
545,751
|
|
|
$
|
428,155
|
|
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Professional
|
|
1,047,511
|
|
|
1,222,402
|
|
|
$
|
3,132,372
|
|
|
$
|
3,993,474
|
|
||
Light Industrial
|
|
—
|
|
|
66,151
|
|
|
110,251
|
|
|
245,903
|
|
||||
Corporate
|
|
5,385
|
|
|
3,372
|
|
|
13,051
|
|
|
5,223
|
|
||||
Total
|
|
$
|
1,052,896
|
|
|
$
|
1,291,925
|
|
|
$
|
3,255,674
|
|
|
$
|
4,244,600
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income:
|
|
|
|
|
|
|
|
|
||||||||
Real Estate
|
|
$
|
4,958,373
|
|
|
$
|
4,020,995
|
|
|
$
|
11,285,951
|
|
|
$
|
8,524,536
|
|
Professional
|
|
2,143,425
|
|
|
2,119,550
|
|
|
6,499,285
|
|
|
6,344,222
|
|
||||
Light Industrial
|
|
1,560,895
|
|
|
1,108,842
|
|
|
3,948,874
|
|
|
3,000,444
|
|
||||
Corporate - selling
|
|
(212,877
|
)
|
|
(119,097
|
)
|
|
(541,467
|
)
|
|
(371,906
|
)
|
||||
Corporate - general and administrative
|
|
(1,358,489
|
)
|
|
(1,494,106
|
)
|
|
(3,488,841
|
)
|
|
(4,585,854
|
)
|
||||
Total
|
|
$
|
7,091,327
|
|
|
$
|
5,636,184
|
|
|
$
|
17,703,802
|
|
|
$
|
12,911,442
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures:
|
|
|
|
|
|
|
|
|
||||||||
Real Estate
|
|
$
|
37,681
|
|
|
$
|
3,947
|
|
|
$
|
114,990
|
|
|
$
|
76,542
|
|
Professional
|
|
121,170
|
|
|
52,987
|
|
|
382,925
|
|
|
501,928
|
|
||||
Light Industrial
|
|
44,018
|
|
|
2,463
|
|
|
87,990
|
|
|
71,262
|
|
||||
Corporate
|
|
25,945
|
|
|
—
|
|
|
95,428
|
|
|
246,257
|
|
||||
Total
|
|
$
|
228,814
|
|
|
$
|
59,397
|
|
|
$
|
681,333
|
|
|
$
|
895,989
|
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Total Assets:
|
|
|
|
|
|
|
||
Real Estate
|
|
$
|
15,755,175
|
|
|
$
|
11,678,908
|
|
Professional
|
|
64,084,428
|
|
|
67,089,681
|
|
||
Light Industrial
|
|
18,660,558
|
|
|
18,075,307
|
|
||
Corporate
|
|
6,329,375
|
|
|
7,788,993
|
|
||
Total
|
|
$
|
104,829,536
|
|
|
$
|
104,632,889
|
|
|
|
|
Thirteen Weeks Ended
|
|
Thirty-nine Weeks Ended
|
||||||||||||
|
|
|
September 30, 2018
|
|
September 24, 2017
|
|
September 30,
2018 |
|
September 24, 2017
|
||||||||
|
|
|
(dollars in thousands)
|
||||||||||||||
Revenues
|
|
$
|
77,062
|
|
|
$
|
71,282
|
|
|
$
|
214,863
|
|
|
$
|
196,899
|
|
|
Cost of services
|
|
55,689
|
|
|
53,034
|
|
|
156,988
|
|
|
147,753
|
|
|||||
|
Gross profit
|
|
21,373
|
|
|
18,248
|
|
|
57,875
|
|
|
49,146
|
|
||||
Selling, general and administrative expenses
|
|
13,034
|
|
|
11,175
|
|
|
36,370
|
|
|
31,561
|
|
|||||
Depreciation and amortization
|
|
1,248
|
|
|
1,436
|
|
|
3,801
|
|
|
4,673
|
|
|||||
|
Operating income
|
|
7,091
|
|
|
5,637
|
|
|
17,704
|
|
|
12,912
|
|
||||
Interest expense, net
|
|
662
|
|
|
884
|
|
|
2,275
|
|
|
2,280
|
|
|||||
|
Income before income tax
|
|
6,429
|
|
|
4,753
|
|
|
15,429
|
|
|
10,632
|
|
||||
Income tax expense
|
|
1,368
|
|
|
1,616
|
|
|
2,732
|
|
|
3,909
|
|
|||||
|
Net income
|
|
$
|
5,061
|
|
|
$
|
3,137
|
|
|
$
|
12,697
|
|
|
$
|
6,723
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|||||
Cost of services
|
|
72.3
|
%
|
|
74.4
|
%
|
|
73.1
|
%
|
|
75.0
|
%
|
|||||
|
Gross profit
|
|
27.7
|
%
|
|
25.6
|
%
|
|
26.9
|
%
|
|
25.0
|
%
|
||||
Selling, general and administrative expenses
|
|
16.9
|
%
|
|
15.7
|
%
|
|
16.9
|
%
|
|
16.0
|
%
|
|||||
Depreciation and amortization
|
|
1.6
|
%
|
|
2.0
|
%
|
|
1.8
|
%
|
|
2.4
|
%
|
|||||
|
Operating income
|
|
9.2
|
%
|
|
7.9
|
%
|
|
8.2
|
%
|
|
6.6
|
%
|
||||
Interest expense, net
|
|
0.9
|
%
|
|
1.2
|
%
|
|
1.1
|
%
|
|
1.2
|
%
|
|||||
|
Income before income tax
|
|
8.3
|
%
|
|
6.7
|
%
|
|
7.2
|
%
|
|
5.4
|
%
|
||||
Income tax expense
|
|
1.8
|
%
|
|
2.3
|
%
|
|
1.3
|
%
|
|
2.0
|
%
|
|||||
|
Net income
|
|
6.6
|
%
|
|
4.4
|
%
|
|
5.9
|
%
|
|
3.4
|
%
|
Revenues:
|
|
Thirteen Weeks Ended
|
|||||||||||||
|
|
|
September 30,
2018 |
|
September 24,
2017 |
||||||||||
|
|
|
(dollars in thousands)
|
||||||||||||
Revenues by segment:
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Real Estate
|
|
$
|
26,531
|
|
|
34.4
|
%
|
|
$
|
21,759
|
|
|
30.5
|
%
|
|
Professional
|
|
29,172
|
|
|
37.9
|
%
|
|
31,740
|
|
|
44.5
|
%
|
||
|
Light Industrial
|
|
21,359
|
|
|
27.7
|
%
|
|
17,783
|
|
|
25.0
|
%
|
||
|
Total Revenues
|
|
$
|
77,062
|
|
|
100.0
|
%
|
|
$
|
71,282
|
|
|
100.0
|
%
|
|
|
|
Thirteen Weeks Ended
|
||||||||||||
|
|
|
September 30,
2018 |
|
September 24,
2017 |
||||||||||
|
|
|
(dollars in thousands)
|
||||||||||||
Gross Profit by segment:
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Real Estate
|
|
$
|
10,045
|
|
|
47.0
|
%
|
|
$
|
8,198
|
|
|
44.9
|
%
|
|
Professional
|
|
8,110
|
|
|
37.9
|
%
|
|
7,487
|
|
|
41.0
|
%
|
||
|
Light Industrial
|
|
3,218
|
|
|
15.1
|
%
|
|
2,563
|
|
|
14.1
|
%
|
||
|
Total Gross Profit
|
|
$
|
21,373
|
|
|
100.0
|
%
|
|
$
|
18,248
|
|
|
100.0
|
%
|
|
|
|
Thirteen Weeks Ended
|
||||
|
|
|
September 30,
2018 |
|
September 24,
2017 |
||
Gross Profit Percentage by segment:
|
|
|
|
|
|
|
|
|
Real Estate
|
|
37.9
|
%
|
|
37.7
|
%
|
|
Professional
|
|
27.8
|
%
|
|
23.6
|
%
|
|
Light Industrial
|
|
15.1
|
%
|
|
14.4
|
%
|
|
Company Gross Profit
|
|
27.7
|
%
|
|
25.6
|
%
|
Revenues:
|
|
Thirty-nine Weeks Ended
|
|||||||||||||
|
|
|
September 30,
2018 |
|
September 24,
2017 |
||||||||||
|
|
|
(dollars in thousands)
|
||||||||||||
Revenues by segment:
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Real Estate
|
|
$
|
65,864
|
|
|
30.6
|
%
|
|
$
|
51,436
|
|
|
26.1
|
%
|
|
Professional
|
|
90,394
|
|
|
42.1
|
%
|
|
91,770
|
|
|
46.6
|
%
|
||
|
Light Industrial
|
|
58,605
|
|
|
27.3
|
%
|
|
53,693
|
|
|
27.3
|
%
|
||
|
Total Revenues
|
|
$
|
214,863
|
|
|
100.0
|
%
|
|
$
|
196,899
|
|
|
100.0
|
%
|
|
|
|
Thirty-nine Weeks Ended
|
||||||||||||
|
|
|
September 30,
2018 |
|
September 24,
2017 |
||||||||||
|
|
|
(dollars in thousands)
|
||||||||||||
Gross Profit by segment:
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Real Estate
|
|
$
|
25,044
|
|
|
43.2
|
%
|
|
$
|
19,506
|
|
|
39.7
|
%
|
|
Professional
|
|
24,056
|
|
|
41.6
|
%
|
|
21,984
|
|
|
44.7
|
%
|
||
|
Light Industrial
|
|
8,775
|
|
|
15.2
|
%
|
|
7,656
|
|
|
15.6
|
%
|
||
|
Total Gross Profit
|
|
$
|
57,875
|
|
|
100.0
|
%
|
|
$
|
49,146
|
|
|
100.0
|
%
|
|
|
|
Thirty-nine Weeks Ended
|
||||
|
|
|
September 30,
2018 |
|
September 24,
2017 |
||
Gross Profit Percentage by segment:
|
|
|
|
|
|
|
|
|
Real Estate
|
|
38.0
|
%
|
|
37.9
|
%
|
|
Professional
|
|
26.6
|
%
|
|
24.0
|
%
|
|
Light Industrial
|
|
15.0
|
%
|
|
14.3
|
%
|
|
Company Gross Profit
|
|
26.9
|
%
|
|
25.0
|
%
|
|
|
Thirteen Weeks Ended
|
|
Thirty-nine Weeks Ended
|
||||||||||||
|
|
September 30,
2018 |
|
September 24,
2017 |
|
September 30,
2018 |
|
September 24,
2017 |
||||||||
|
|
(dollars in thousands)
|
||||||||||||||
Net income
|
|
$
|
5,061
|
|
|
$
|
3,137
|
|
|
$
|
12,697
|
|
|
$
|
6,723
|
|
Interest expense, net
|
|
662
|
|
|
884
|
|
|
2,275
|
|
|
2,280
|
|
||||
Income tax expense
|
|
1,368
|
|
|
1,616
|
|
|
2,732
|
|
|
3,909
|
|
||||
Operating income
|
|
7,091
|
|
|
5,637
|
|
|
17,704
|
|
|
12,912
|
|
||||
Depreciation and amortization
|
|
1,248
|
|
|
1,436
|
|
|
3,801
|
|
|
4,673
|
|
||||
Contingent consideration adjustment
|
|
(988
|
)
|
|
—
|
|
|
(2,160
|
)
|
|
—
|
|
||||
Share-based compensation
|
|
758
|
|
|
92
|
|
|
873
|
|
|
357
|
|
||||
Adjusted EBITDA
|
|
$
|
8,109
|
|
|
$
|
7,165
|
|
|
$
|
20,218
|
|
|
$
|
17,942
|
|
|
|
Thirty-nine Weeks Ended
|
||||||
|
|
September 30,
2018 |
|
September 24,
2017 |
||||
|
|
(dollars in thousands)
|
||||||
Net cash provided by operating activities
|
|
$
|
11,381
|
|
|
$
|
11,962
|
|
Net cash used in investing activities
|
|
(681
|
)
|
|
(25,394
|
)
|
||
Net cash (used in) provided by financing activities
|
|
(10,700
|
)
|
|
13,432
|
|
||
Net change in cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
—
|
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
10.1
|
|
|
10.2*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32.1†
|
|
|
|
|
|
101.INS *
|
|
XBRL Instance Document.
|
101.SCH *
|
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL *
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF *
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB *
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE *
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
*
|
Filed herewith.
|
|
†
|
This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
|
|
BG STAFFING, INC.
|
|
|
|
|
|
|
/s/ Beth Garvey
|
|
Name:
|
Beth Garvey
|
|
Title:
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ Dan Hollenbach
|
|
Name:
|
Dan Hollenbach
|
|
Title:
|
Chief Financial Officer and Secretary
|
|
|
(Principal Financial Officer)
|
|
|
|
Name of Participant:
|
|
Number of Restricted Shares:
|
|
Date of Grant:
|
|
Vesting Date(s):
|
__% of the Restricted Shares vest on _________;
__% of the Restricted Shares vest on _________;
__% of the Restricted Shares vest on _________; and
__% of the Restricted Shares vest on _________;
|
1
|
|
I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2018 of BG Staffing, 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.
|
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.
|
By:
|
/s/ Beth Garvey
|
|
Name:
|
Beth Garvey
|
|
Title:
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
1
|
|
I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2018 of BG Staffing, 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.
|
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.
|
By:
|
/s/ Dan Hollenbach
|
|
Name:
|
Dan Hollenbach
|
|
Title:
|
Chief Financial Officer and Secretary
|
|
|
(Principal Financial Officer)
|
|
(1)
|
The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ Beth Garvey
|
|
By:
|
/s/ Dan Hollenbach
|
Name:
|
Beth Garvey
|
|
Name:
|
Dan Hollenbach
|
Title:
|
President and Chief Executive Officer
|
|
Title:
|
Chief Financial Officer and Secretary
|
|
(Principal Executive Officer)
|
|
|
(Principal Financial Officer)
|