DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 3 Months Ended | |
Mar. 29, 2020 | Apr. 13, 2020 | |
Entity Addresses [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 29, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-14543 | |
Entity Registrant Name | TrueBlue, Inc. | |
Entity Incorporation, State or Country Code | WA | |
Entity Tax Identification Number | 91-1287341 | |
Entity Address, Address Line One | 1015 A Street | |
Entity Address, City or Town | Tacoma | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 98402 | |
City Area Code | 253 | |
Local Phone Number | 383-9101 | |
Title of 12(b) Security | Common stock, no par value | |
Trading Symbol | TBI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Common Stock Shares Outstanding (in shares) | 36,126,189 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000768899 | |
Current Fiscal Year End Date | --12-27 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 29, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 265,260 | $ 37,608 |
Accounts receivable, net of allowance for doubtful accounts of $6,379 and $4,288 | 292,988 | 342,303 |
Prepaid expenses, deposits and other current assets | 24,987 | 30,717 |
Income tax receivable | 10,169 | 11,105 |
Total current assets | 593,404 | 421,733 |
Property and equipment, net | 67,036 | 66,150 |
Restricted cash and investments | 218,907 | 230,932 |
Deferred income taxes, net | 26,665 | 3,228 |
Goodwill | 93,290 | 237,498 |
Intangible assets, net | 34,630 | 73,673 |
Operating lease right-of-use assets | 39,234 | 41,082 |
Workers’ compensation claims receivable, net | 44,572 | 44,624 |
Other assets, net | 17,407 | 17,235 |
Total assets | 1,135,145 | 1,136,155 |
Current liabilities: | ||
Accounts payable and other accrued expenses | 39,291 | 68,406 |
Accrued wages and benefits | 55,871 | 67,604 |
Current portion of workers’ compensation claims reserve | 69,353 | 73,020 |
Operating lease current liabilities | 14,554 | 14,358 |
Other current liabilities | 7,980 | 7,418 |
Total current liabilities | 187,049 | 230,806 |
Workers’ compensation claims reserve, less current portion | 184,102 | 182,598 |
Long-term debt | 293,500 | 37,100 |
Long-term deferred compensation liabilities | 23,460 | 26,765 |
Operating lease long-term liabilities | 26,744 | 28,849 |
Other long-term liabilities | 4,348 | 4,064 |
Total liabilities | 719,203 | 510,182 |
Commitments and contingencies (Note 7) | ||
Shareholders’ equity: | ||
Preferred stock, $0.131 par value, 20,000 shares authorized; No shares issued and outstanding | 0 | 0 |
Common stock, no par value, 100,000 shares authorized; 36,128 and 38,593 shares issued and outstanding | 1 | 1 |
Accumulated other comprehensive loss | (19,863) | (13,238) |
Retained earnings | 435,804 | 639,210 |
Total shareholders’ equity | 415,942 | 625,973 |
Total liabilities and shareholders’ equity | $ 1,135,145 | $ 1,136,155 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 29, 2019 |
Allowance for doubtful accounts | $ 6,379 | $ 4,288 |
Preferred stock, par value (in dollars per share) | $ 0.131 | $ 0.131 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 36,128,000 | 38,593,000 |
Common stock, shares outstanding | 36,128,000 | 38,593,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue from services | $ 494,252 | $ 552,352 |
Cost of services | 368,093 | 405,657 |
Gross profit | 126,159 | 146,695 |
Selling, general and administrative expense | 117,381 | 127,980 |
Depreciation and amortization | 9,094 | 9,952 |
Goodwill and intangible asset impairment charge | 175,189 | 0 |
Income (loss) from operations | (175,505) | 8,763 |
Interest expense | (543) | (722) |
Interest and other income | 806 | 1,275 |
Interest and other income (expense), net | 263 | 553 |
Income (loss) before tax expense (benefit) | (175,242) | 9,316 |
Income tax expense (benefit) | (24,748) | 1,040 |
Net income (loss) | $ (150,494) | $ 8,276 |
Net income (loss) per common share: | ||
Basic (in dollars per share) | $ (4.04) | $ 0.21 |
Diluted (in dollars per share) | $ (4.04) | $ 0.21 |
Weighted average shares outstanding: | ||
Basic (in shares) | 37,255 | 39,366 |
Diluted (in shares) | 37,255 | 39,735 |
Other Comprehensive Income (Loss): | ||
Foreign currency translation adjustment | $ (6,625) | $ 1,326 |
Comprehensive income (loss) | $ (157,119) | $ 9,602 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (150,494) | $ 8,276 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 9,094 | 9,952 |
Goodwill and intangible asset impairment charge | 175,189 | 0 |
Provision for doubtful accounts | 2,660 | |
Provision for doubtful accounts | 3,289 | 1,778 |
Stock-based compensation | 1,508 | 3,606 |
Deferred income taxes | (23,432) | 3,209 |
Non-cash lease expense | 3,763 | 3,565 |
Other operating activities | 5,375 | (1,841) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 45,407 | 26,558 |
Income tax receivable | 435 | (3,645) |
Other assets | 5,958 | (5,274) |
Accounts payable and other accrued expenses | (28,443) | (9,878) |
Accrued wages and benefits | (11,733) | (10,266) |
Workers’ compensation claims reserve | (2,163) | (4,380) |
Operating lease liabilities | (3,811) | (3,414) |
Other liabilities | (2,334) | 3,268 |
Net cash provided by operating activities | 27,608 | 21,514 |
Cash flows from investing activities: | ||
Capital expenditures | (7,028) | (5,862) |
Purchases of restricted available-for-sale investments | (1,149) | (3,070) |
Sales of restricted available-for-sale investments | 1,269 | 1,886 |
Maturities of restricted held-to-maturity investments | 6,168 | 8,451 |
Net cash provided by (used in) investing activities | (740) | 1,405 |
Cash flows from financing activities: | ||
Purchases and retirement of common stock | (52,348) | (5,303) |
Net proceeds from employee stock purchase plans | 323 | 380 |
Common stock repurchases for taxes upon vesting of restricted stock | (1,792) | (1,438) |
Net change in Revolving Credit Facility | 256,400 | (37,800) |
Other | (508) | (69) |
Net cash provided by (used in) financing activities | 202,075 | (44,230) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,738) | 314 |
Net change in cash, cash equivalents and restricted cash | 227,205 | (20,997) |
Cash, cash equivalents and restricted cash, beginning of period | 92,371 | 102,450 |
Cash, cash equivalents and restricted cash, end of period | 319,576 | 81,453 |
Supplemental Cash Flow Information [Abstract] | ||
Interest | 394 | 667 |
Income taxes | (1,751) | 1,448 |
Operating lease liabilities | 4,440 | 4,344 |
Property and equipment purchased but not yet paid | 322 | 807 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 2,422 | $ 4,698 |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 3 Months Ended |
Mar. 29, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT Assets measured at fair value on a recurring basis Our assets measured at fair value on a recurring basis consisted of the following: March 29, 2020 (in thousands) Total fair value Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Cash and cash equivalents $ 265,260 $ 265,260 $ — $ — Restricted cash and cash equivalents 54,316 54,316 — — Cash, cash equivalents and restricted cash (1) $ 319,576 $ 319,576 $ — $ — Municipal debt securities $ 73,093 $ — $ 73,093 $ — Corporate debt securities 70,136 — 70,136 — Agency mortgage-backed securities 1,155 — 1,155 — U.S. government and agency securities 1,068 — 1,068 — Restricted investments classified as held-to-maturity $ 145,452 $ — $ 145,452 $ — Deferred compensation investments (2) $ 11,546 $ 11,546 $ — $ — December 29, 2019 (in thousands) Total fair value Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Cash and cash equivalents $ 37,608 $ 37,608 $ — $ — Restricted cash and cash equivalents 54,763 54,763 — — Cash, cash equivalents and restricted cash (1) $ 92,371 $ 92,371 $ — $ — Municipal debt securities $ 74,236 $ — $ 74,236 $ — Corporate debt securities 76,068 — 76,068 — Agency mortgage-backed securities 1,376 — 1,376 — U.S. government and agency securities 1,051 — 1,051 — Restricted investments classified as held-to-maturity $ 152,731 $ — $ 152,731 $ — Deferred compensation investments (2) $ 13,670 $ 13,670 $ — $ — (1) Cash, cash equivalents and restricted cash consist of money market funds, deposits and investments with original maturities of three months or less. (2) Deferred compensation investments consist of mutual funds and money market funds. There were no material transfers between level 1, level 2 and level 3 of the fair value hierarchy during the thirteen weeks ended March 29, 2020 or March 31, 2019 . Assets measured at fair value on a nonrecurring basis We measure the fair value of certain non-financial assets on a nonrecurring basis, including goodwill and certain intangible assets. During the first quarter of 2020, we performed an interim impairment test as of the last day of our first fiscal quarter due to current market conditions. As a result of that test, we recognized an impairment charge of $175.2 million during the thirteen weeks ended March 29, 2020 , comprised as follows: March 29, 2020 (in thousands) Total fair value Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Total impairment loss Goodwill $ 93,290 $ — $ — $ 93,290 $ (140,489 ) Client relationships $ 27,108 — — 27,108 (34,700 ) Total $ 120,398 $ — $ — $ 120,398 $ (175,189 ) Goodwill and client relationship intangible assets with a total carrying value of $295.6 million were written down to their fair value of $120.4 million , resulting in an impairment charge of $175.2 million , which was recorded in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen weeks ended March 29, 2020 . Refer to Note 4 : Goodwill and Intangible Assets for additional details on the impairment charge and valuation methodologies. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 29, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Financial statement preparation The accompanying unaudited consolidated financial statements (“financial statements”) of TrueBlue, Inc. (the “company,” “TrueBlue,” “we,” “us,” and “our”) are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, certain information and footnote disclosures usually found in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The financial statements reflect all adjustments which, in the opinion of management, are necessary to fairly state the financial statements for the interim periods presented. We follow the same accounting policies for preparing both quarterly and annual financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 29, 2019 . The results of operations for the thirteen weeks ended March 29, 2020 , are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period. Going concern assessment and management's plans Due to the adverse impacts of COVID-19 on our business operations, including anticipated future revenue and operating cash flow declines, we expect to fund operations over the next 12 months with funds borrowed on our revolving credit facility. However, if we continue to experience significant revenue declines, which is likely to occur, we would likely not meet one or more of our financial covenants under our revolving credit facility within the next 12 months. Our failure to comply with these covenants would result in an event of default, which, if not cured or waived, could require us to repay these borrowings before their due date. Refer to Note 6: Long-Term Debt for additional details of our revolving credit facility. We are actively working with our banks to seek an amendment or waiver. In the event we are unsuccessful in these efforts with our banks, management plans to take further action to expand the current cost reduction programs, eliminate all nonessential capital expenditure projects, accelerate working capital improvement initiatives, and complete the sale of certain assets to provide supplemental liquidity. In the absence of an amendment or waiver of covenants related to the revolving credit facility we believe our plans, if executed, would result in adequate cash flows to support our ongoing operations. Our financial statements have been prepared under the assumption that we will continue as a going concern. Recently adopted accounting standards Credit losses In June 2016, the FASB issued guidance on accounting for credit losses on financial instruments. This guidance sets forth a current expected credit loss model (“CECL”), which requires the measurement of credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. Under this model, an entity recognizes an allowance for expected credit losses based on historical experience, current conditions, and forecasted information rather than the previous methodology of delaying recognition of credit losses until it is probable a loss has been incurred. This guidance was adopted at the beginning of the first quarter of 2020. We were required to apply the new standard by means of a cumulative-effect adjustment to opening retained earnings as of the beginning of the first quarter of 2020. The total impact upon adoption to opening retained earnings was immaterial to both the individual financial assets affected as well as in the aggregate. The following policies have been updated to reflect our adoption of the new standard on accounting for credit losses on financial instruments. Accounts receivable and allowance for credit losses Accounts receivable are recorded at the invoiced amount. We establish an allowance for credit loss of estimated losses resulting from the failure of our clients to make required payments by applying an aging schedule to pools of assets with similar risk characteristics. Based on an analysis of the risk characteristics of our clients and associated receivables, we have concluded our pools are as follows: • PeopleReady and Centerline Drivers (“Centerline”) have a large, diverse set of clients, generally with frequent, low dollar invoices due to the daily nature of the work we perform. This results in high turnover in accounts receivable and lower rates of non-payment. • PeopleManagement On-site has a smaller number of clients, and follows a contractual billing schedule. The invoice amounts are higher than that of PeopleReady and Centerline, with longer payment terms. • PeopleScout has a smaller number of clients, and generally sends invoices on a consolidated basis for a client. Invoice amounts are generally higher for PeopleScout than for PeopleManagement On-site, with similar payment terms. When specific clients are identified as no longer sharing the same risk profile as their current pool, they are removed from the pool and evaluated separately. The credit loss rates applied to each aging category by pool are based on current collection efforts, historical collection trends, write-off experience, client credit risk and current economic data. The allowance for credit loss is reviewed quarterly and represents our best estimate of the amount of expected credit losses. Each month, past due or delinquent balances are identified based upon a review of aged receivables performed by collections and operations. Past due balances are written off when it is probable the receivable will not be collected. Changes in the allowance for credit losses are recorded in selling, general and administrative (“SG&A”) expense on the Consolidated Statements of Operations and Comprehensive Income (Loss). In response to the rapidly changing market conditions, we have taken all appropriate steps to assess the impact to our accounts receivable allowance for credit losses. Given the dynamic nature, it is difficult to estimate the economic impact caused by COVID–19 on this allowance. However, we believe the allowance for credit loss for accounts receivable as of March 29, 2020 , is our best estimate of the amount of expected credit losses. Should actual results deviate from what we have currently estimated, our allowance for credit losses could change significantly. The activity related to the allowance for credit losses for accounts receivable during the thirteen weeks ended March 29, 2020 was as follows: (in thousands) Beginning balance $ 4,288 Cumulative-effect adjustment (1) 524 Current period provision 2,660 Write-offs, net (2) (1,093 ) Ending balance $ 6,379 (1) As a result of our adoption of the accounting standard for credit losses, we recognized a cumulative-effect adjustment to our account receivable allowance of $0.5 million as of the beginning of the first quarter of 2020. (2) Write-offs charged against the allowance are presented net of recoveries collected as the recoveries were immaterial for the thirteen weeks ended March 29, 2020 . Restricted cash and investments We establish an allowance for credit loss for our held-to-maturity debt securities using a discounted cash flow method including a probability of default rate based on the issuer credit rating. We report the entire change in present value as credit loss expense (or reversal of credit loss expense) in cost of services on the Consolidated Statements of Operations and Comprehensive Income (Loss). The cumulative-effect adjustment to our held-to-maturity debt securities as a result of adopting CECL as of the beginning of the first quarter of 2020 was immaterial, as was the allowance as of March 29, 2020 . Workers’ compensation claims reserves We establish an allowance for credit loss for our insurance receivables using a probability of default and loss given default method, with the probability of default rate based on the third-party insurance carrier credit rating. Changes in the allowance for credit losses are recorded in cost of services on the Consolidated Statements of Operations and Comprehensive Income (Loss). The cumulative-effect adjustment to our workers’ compensation insurance receivables as a result of adopting CECL as of the beginning of the first quarter of 2020 was immaterial, as was the allowance as of March 29, 2020 . Reclassifications Certain previously reported amounts have been reclassified to conform to the current presentation. Specifically, the company has made certain reclassifications between cost of services and SG&A expense to more accurately reflect the costs of delivering our services. Such reclassifications did not have a significant impact on the company’s gross profit or SG&A expense. Certain immaterial prior year amounts have also been reclassified within cash flows from investing activities on our Consolidated Statements of Cash Flows to conform to current year presentation. Recently issued accounting pronouncements not yet adopted There are no accounting pronouncements which have not yet been adopted that are expected to have a significant impact on our financial statements and related disclosures. |
RESTRICTED CASH AND INVESTMENTS
RESTRICTED CASH AND INVESTMENTS | 3 Months Ended |
Mar. 29, 2020 | |
Restricted Cash and Investments [Abstract] | |
RESTRICTED CASH AND INVESTMENTS | RESTRICTED CASH AND INVESTMENTS The following is a summary of the carrying value of our restricted cash and investments: (in thousands) March 29, December 29, Cash collateral held by insurance carriers $ 24,684 $ 24,612 Cash and cash equivalents held in Trust 26,641 23,681 Investments held in Trust 142,761 149,373 Deferred compensation investments 11,546 13,670 Company owned life insurance policies 10,284 13,126 Other restricted cash and cash equivalents 2,991 6,470 Total restricted cash and investments $ 218,907 $ 230,932 Held-to-maturity Restricted cash and investments include collateral that has been provided or pledged to insurance carriers for workers’ compensation and state workers’ compensation programs. Our insurance carriers and certain state workers’ compensation programs require us to collateralize a portion of our workers’ compensation obligation. The collateral typically takes the form of cash and cash equivalents and highly rated investment grade securities, primarily in debt and asset-backed securities. The majority of our collateral obligations are held in a trust at the Bank of New York Mellon (“Trust”). The amortized cost and estimated fair value of our held-to-maturity investments held in Trust, aggregated by investment category as of March 29, 2020 and December 29, 2019 , were as follows: March 29, 2020 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Fair value Municipal debt securities $ 71,124 $ 1,969 $ — $ 73,093 Corporate debt securities 69,539 908 (311 ) 70,136 Agency mortgage-backed securities 1,116 39 — 1,155 U.S. government and agency securities 1,000 68 — 1,068 Total held-to-maturity investments $ 142,779 $ 2,984 $ (311 ) $ 145,452 December 29, 2019 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Fair value Municipal debt securities $ 72,017 $ 2,219 $ — $ 74,236 Corporate debt securities 75,000 1,102 (34 ) 76,068 Agency mortgage-backed securities 1,357 21 (2 ) 1,376 U.S. government and agency securities 999 52 — 1,051 Total held-to-maturity investments $ 149,373 $ 3,394 $ (36 ) $ 152,731 The estimated fair value and gross unrealized losses of all investments classified as held-to-maturity, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of March 29, 2020 and December 29, 2019 , were as follows: March 29, 2020 Less than 12 months 12 months or more Total (in thousands) Estimated fair value Unrealized losses Estimated fair value Unrealized losses Estimated fair value Unrealized losses Corporate debt securities $ 23,488 $ (311 ) $ — $ — $ 23,488 $ (311 ) Total held-to-maturity investments $ 23,488 $ (311 ) $ — $ — $ 23,488 $ (311 ) December 29, 2019 Less than 12 months 12 months or more Total (in thousands) Estimated fair value Unrealized losses Estimated fair value Unrealized losses Estimated fair value Unrealized losses Corporate debt securities $ 15,920 $ (32 ) $ 2,765 $ (2 ) $ 18,685 $ (34 ) Agency mortgage-backed securities — — 276 (2 ) 276 (2 ) Total held-to-maturity investments $ 15,920 $ (32 ) $ 3,041 $ (4 ) $ 18,961 $ (36 ) The total number of held-to-maturity securities in an unrealized loss position as of March 29, 2020 and December 29, 2019 were 16 and 17 , respectively. The unrealized losses were the result of net interest rate increases over the maturity of the respective securities. Since the decline in estimated fair value is attributable to changes in interest rates and not credit quality, and the company has the intent and ability to hold these debt securities until recovery of amortized cost or until maturity, we do not consider these investments other than temporarily impaired. The amortized cost and fair value by contractual maturity of our held-to-maturity investments are as follows: March 29, 2020 (in thousands) Amortized cost Fair value Due in one year or less $ 26,080 $ 26,145 Due after one year through five years 88,541 90,049 Due after five years through ten years 28,158 29,258 Total held-to-maturity investments $ 142,779 $ 145,452 Actual maturities may differ from contractual maturities because the issuers of certain debt securities have the right to call or prepay their obligations without penalty. We have no significant concentrations of counterparties in our held-to-maturity investment portfolio. Equity investments We hold mutual funds and money market funds to support our deferred compensation liability. Unrealized gains and losses related to equity investments still held at March 29, 2020 and March 31, 2019 , totaled a $2.9 million loss and a $2.4 million gain for the thirteen weeks then ended, respectively, and are included in SG&A expense on the Consolidated Statements of Operations and Comprehensive Income (Loss). |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 29, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill The following table reflects changes in the carrying amount of goodwill during the period by reportable segments: (in thousands) PeopleReady PeopleManagement PeopleScout Total company Balance at December 29, 2019 Goodwill before impairment 106,304 81,092 145,181 332,577 Accumulated impairment loss (46,210 ) (33,700 ) (15,169 ) (95,079 ) Goodwill, net 60,094 47,392 130,012 237,498 Impairment loss — (45,901 ) (94,588 ) (140,489 ) Foreign currency translation — — (3,719 ) (3,719 ) Balance at March 29, 2020 Goodwill before impairment 106,304 81,092 141,462 328,858 Accumulated impairment loss (46,210 ) (79,601 ) (109,757 ) (235,568 ) Goodwill, net $ 60,094 $ 1,491 $ 31,705 $ 93,290 Intangible assets Finite-lived intangible assets The following table presents our purchased finite-lived intangible assets: March 29, 2020 December 29, 2019 (in thousands) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated Net Finite-lived intangible assets (1): Client relationships (2) $ 98,181 $ (71,073 ) $ 27,108 $ 149,299 $ (83,317 ) $ 65,982 Trade names/trademarks 1,939 (467 ) 1,472 2,052 (441 ) 1,611 Technologies 600 (550 ) 50 600 (520 ) 80 Total finite-lived intangible assets $ 100,720 $ (72,090 ) $ 28,630 $ 151,951 $ (84,278 ) $ 67,673 (1) Excludes assets that are fully amortized. (2) Balance at March 29, 2020 is net of impairment loss of $34.7 million recorded in the thirteen weeks ended March 29, 2020 . Amortization expense of our finite-lived intangible assets was $4.0 million and $5.1 million for the thirteen weeks ended March 29, 2020 and March 31, 2019 , respectively. Indefinite-lived intangible assets We also held indefinite-lived trade names/trademarks of $6.0 million as of March 29, 2020 and December 29, 2019 . Impairments Goodwill We evaluate goodwill for impairment on an annual basis as of the first day of our fiscal second quarter, and whenever events or circumstances make it more likely than not that an impairment may have occurred. These events or circumstances could include a significant change in the business climate, operating performance indicators, competition, client engagement, legal factors, or sale or disposition of a significant portion of a reporting unit. We monitor the existence of potential impairment indicators throughout the fiscal year. During the first quarter of 2020, the following events made it more likely than not that an impairment had occurred and accordingly, we performed an interim impairment test as of the last day of our fiscal first quarter. We experienced a significant decline in our stock price during the first quarter of 2020. As a result of the decline in stock price, our market capitalization fell significantly below the recorded value of our consolidated net assets. The reduced market capitalization reflected the expected continued weakness in pricing and demand for our staffing services in a volatile economic climate. This was further impacted in March 2020 by the COVID-19 pandemic which created a sudden economic shock both globally and domestically. The response in the United States and Canada has generally been to require that the populous remain at home unless they are working in an “essential” role as defined by state governments. We are continuing to support our clients during this period of time, many of whom are essential businesses, but volumes have declined substantially. Most industries we serve have been impacted by a significant decrease in demand for their products and services, and as a result, demand for our services has decreased. We expect significant decreases to our revenues and corresponding operating results as we experience continued weakness in pricing and demand for our services during this severe economic downturn. While we expect to see demand recover in the future, our expectation is that the rate of recovery will vary by geography and industry depending on the economic impact caused by COVID-19 and the rate at which infections decline to a contained level. Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions to evaluate the impact of operating and macroeconomic changes on each reporting unit. The fair value of each reporting unit was estimated using a combination of a discounted cash flow methodology and the market valuation approach using publicly traded company multiples in similar businesses. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internally developed forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested. The weighted average cost of capital used in our most recent impairment test was risk-adjusted to reflect the specific risk profile of the reporting units and ranged from 11.5% to 12.0% . The combined fair values for all reporting units were then reconciled to our aggregate market value of our shares of common stock on the date of valuation, while considering a reasonable control premium. As a result of this impairment test, we concluded that the carrying amounts of goodwill for PeopleScout RPO, PeopleScout MSP and PeopleManagement On-Site reporting units exceeded their implied fair values and we recorded a non-cash impairment loss of $140.5 million , which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen weeks ended March 29, 2020 . The total goodwill carrying value of $45.9 million for PeopleManagement On-site reporting unit was fully impaired. The goodwill impairment charge for PeopleScout RPO and PeopleScout MSP was $92.2 million and $2.4 million , respectively, leaving a remaining goodwill balance of $22.0 million and $9.7 million , respectively as of March 29, 2020 . Should actual results decline further or longer than we have currently estimated, the remaining goodwill balances may be further impaired. We will continue to closely monitor the operational performance of these reporting units as it relates to goodwill impairment. Finite-lived intangible assets We generally record acquired intangible assets that have finite useful lives, such as client relationships, in connection with business combinations. We review intangible assets that have finite useful lives and other long-lived assets whenever an event or change in circumstances indicates that the carrying value of the asset may not be recoverable. Factors considered important that could result in an impairment review include, but are not limited to, significant underperformance relative to historical or planned operating results or significant changes in business strategies. We estimate the recoverability of these assets by comparing the carrying amount of the asset to the future undiscounted cash flows that we expect the asset to generate. An impairment loss is recognized when the estimated undiscounted cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset (if any) are less than the carrying value of the asset. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value based on discounted cash flow analysis or other valuation techniques. With the decrease in demand for our services due to the economic impact caused by the response to COVID-19, we lowered our future expectations, which was the primary trigger of an impairment to our acquired client relationships intangible assets for our PeopleScout RPO and PeopleManagement On-Site reporting units of $34.7 million , which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen weeks ended March 29, 2020 . The impairment charge for PeopleScout RPO and PeopleManagement On-site reporting units was $25.0 million and $9.7 million , respectively, leaving a remaining client relationship balance of $6.2 million and $8.5 million , respectively as of March 29, 2020 . Considerable management judgment was necessary to determine key assumptions, including projected revenue of acquired clients and an appropriate discount rate of 12.0% . Should actual results decline further or longer than we have currently estimated, the remaining goodwill balances may be further impaired. Indefinite-lived intangible assets We have indefinite-lived intangible assets related to our Staff Management and PeopleScout trade names. We test our trade names annually for impairment, and when indicators of potential impairment exist. We utilize the relief from royalty method to determine the fair value of each of our trade names. If the carrying value exceeds the fair value, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value. Management uses considerable judgment to determine key assumptions, including projected revenue, royalty rates and appropriate discount rates. We performed an interim impairment test of our indefinite-lived intangible assets as of the last day of our first fiscal quarter for 2020 and determined that the estimated fair values exceeded the carrying amounts for our indefinite-lived trade names. Accordingly, no impairment loss was recognized for the thirteen weeks ended March 29, 2020 . |
WORKERS' COMPENSATION INSURANCE
WORKERS' COMPENSATION INSURANCE AND RESERVES | 3 Months Ended |
Mar. 29, 2020 | |
Workers' Compensation Insurance and Reserves [Abstract] | |
WORKERS' COMPENSATION INSURANCE AND RESERVES | WORKERS’ COMPENSATION INSURANCE AND RESERVES We provide workers’ compensation insurance for our contingent and permanent employees. The majority of our current workers’ compensation insurance policies cover claims for a particular event above a $2.0 million deductible limit, on a “per occurrence” basis. This results in our being substantially self-insured. Our workers’ compensation reserve for claims below the deductible limit is discounted to its estimated net present value using discount rates based on average returns of “risk-free” U.S. Treasury instruments available during the year in which the liability was incurred. The weighted average discount rate was 2.0% at March 29, 2020 and December 29, 2019 . Payments made against self-insured claims are made over a weighted average period of approximately 5 years as of March 29, 2020 . The following table presents a reconciliation of the undiscounted workers’ compensation reserve to the discounted workers’ compensation reserve for the periods presented: (in thousands) March 29, December 29, Undiscounted workers’ compensation reserve $ 272,179 $ 274,934 Less discount on workers’ compensation reserve 18,724 19,316 Workers’ compensation reserve, net of discount 253,455 255,618 Less current portion 69,353 73,020 Long-term portion $ 184,102 $ 182,598 Payments made against self-insured claims were $14.6 million and $15.3 million for the thirteen weeks ended March 29, 2020 and March 31, 2019 , respectively. Our workers’ compensation reserve includes estimated expenses related to claims above our self-insured limits (“excess claims”), and we record a corresponding receivable for the insurance coverage on excess claims based on the contractual policy agreements we have with insurance carriers. We discount this reserve and corresponding receivable to its estimated net present value using the discount rates based on average returns of “risk-free” U.S. Treasury instruments available during the year in which the liability was incurred. At March 29, 2020 and December 29, 2019 , the weighted average rate was 2.2% and 2.4% , respectively. The claim payments are made and the corresponding reimbursements from our insurance carriers are received over an estimated weighted average period of approximately 17 years . The discounted workers’ compensation reserve for excess claims was $45.6 million and $45.3 million , and the corresponding gross receivable for the insurance on excess claims was $44.6 million and $45.3 million as of March 29, 2020 and December 29, 2019 , respectively. Workers’ compensation cost consists primarily of changes in self-insurance reserves net of changes in discount, monopolistic jurisdictions’ premiums, insurance premiums and other miscellaneous expenses. Workers’ compensation cost of $14.3 million and $11.9 million was recorded in cost of services on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen weeks ended March 29, 2020 and March 31, 2019 , respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 29, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Workers’ compensation commitments We have provided our insurance carriers and certain states with commitments in the form and amounts listed below: (in thousands) March 29, December 29, Cash collateral held by workers’ compensation insurance carriers $ 22,317 $ 22,256 Cash and cash equivalents held in Trust 26,641 23,681 Investments held in Trust 142,761 149,373 Letters of credit (1) 6,202 6,202 Surety bonds (2) 20,731 20,731 Total collateral commitments $ 218,652 $ 222,243 (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. Legal contingencies and developments We are involved in various proceedings arising in the normal course of conducting business. We believe the liabilities included in our financial statements reflect the probable loss that can be reasonably estimated. The resolution of those proceedings is not expected to have a material effect on our results of operations or financial condition. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 29, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT On March 16, 2020, we entered into a first amendment to our credit agreement with Bank of America, N.A., Wells Fargo Bank, N.A., PNC Bank, N.A., KeyBank, N.A. and HSBC Bank USA, N.A. dated as of July 13, 2018 (the “Amendment,” the existing credit agreement as amended by the Amendment, the “Credit Agreement,” and the revolving credit facility established thereunder, the “Revolving Credit Facility”). The Amendment extended the maturity of the Revolving Credit Facility to March 16, 2025, and modified certain other terms. The Credit Agreement provides for a revolving line of credit of up to $300.0 million with an option, subject to lender approval, to increase the amount to $450.0 million , and matures in five years . Included in the Credit Agreement is a $30.0 million sub-limit for Swingline loans and a $125.0 million sub-limit for letters of credit. At March 29, 2020 , $293.5 million was drawn on the Revolving Credit Facility, which included a $10.0 million Swingline loan, and $6.2 million of standby letters of credit, leaving $0.3 million available under the Revolving Credit Facility for additional borrowings. At December 29, 2019 , $37.1 million was drawn on the Revolving Credit Facility, which included a $17.1 million Swingline loan. Under the terms of the Credit Agreement, we pay a variable rate of interest on funds borrowed under the revolving line of credit in excess of the Swingline loans, based on the London Interbank Offered Rate (“LIBOR”) plus an applicable spread between 1.25% and 2.50% . Alternatively, at our option, we may pay interest based on a base rate plus an applicable spread between 0.25% and 1.50% . The base rate is the greater of the prime rate (as announced by Bank of America), or the federal funds rate plus 0.50% . The applicable spread is determined by the consolidated leverage ratio, as defined in the credit agreement. At March 29, 2020 , the applicable spread on LIBOR was 1.25% and the weighted average index rate was 1.00% , resulting in a weighted average interest rate of 2.25% . Under the terms of the Credit Agreement, we are required to pay a variable rate of interest on funds borrowed under the Swingline loan based on the base rate plus applicable spread between 0.25% and 1.50% , as described above. At March 29, 2020 , the applicable spread on the base rate was 0.25% and the base rate was 3.25% , resulting in an interest rate of 3.50% . A commitment fee between 0.250% and 0.375% is applied against the Revolving Credit Facility’s unused borrowing capacity, with the specific rate determined by the consolidated leverage ratio, as defined in the credit agreement. Letters of credit are priced at a margin between 1.00% and 2.25% , plus a fronting fee of 0.50% . Obligations under the Credit Agreement are guaranteed by TrueBlue and material U.S. domestic subsidiaries, and are secured by substantially all of the assets of TrueBlue and material U.S. domestic subsidiaries. The Credit Agreement contains customary representations and warranties, events of default, and affirmative and negative covenants, including, among others, financial covenants based on our leverage and fixed charge coverage ratios, as defined in the Credit Agreement. The leverage coverage ratio is our funded indebtedness divided by trailing twelve months consolidated EBITDA, as defined in the Credit Agreement, and we are required to maintain a ratio of less than 3.0 . The fixed charge coverage ratio is trailing twelve months bank-adjusted cash flow divided by cash interest expense which is required to be greater than 1.25 . As of March 29, 2020, we were in compliance with all covenants related to the Revolving Credit Facility as our leverage coverage ratio was 2.7 and our fixed charge coverage ratio was 40.8 . If we continue to experience significant revenue declines, which is likely to occur, we would not meet one or more of our financial covenants under our Revolving Credit Facility within the next 12 months. Our failure to comply with these restrictive covenants would result in an event of default, which, if not cured or waived, could require us to repay these borrowings before their due date. Refer to Note 1: Summary of Significant Accounting Policies - Going concern assessment and management’s plans for additional details. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 3 Months Ended |
Mar. 29, 2020 | |
Shareholders' Equity [Abstract] | |
SHAREHOLDER’S EQUITY | SHAREHOLDERS’ EQUITY Changes in the balance of each component of shareholders’ equity during the reporting periods were as follows: Thirteen weeks ended (in thousands) March 29, March 31, Common stock shares Beginning balance 38,593 40,054 Purchases and retirement of common stock (2,930 ) (234 ) Issuances under equity plans, including tax benefits 415 308 Stock-based compensation 50 24 Ending balance 36,128 40,152 Common stock amount Beginning balance $ 1 $ 1 Current period activity — — Ending balance 1 1 Retained earnings Beginning balance 639,210 606,087 Net income (loss) (150,494 ) 8,276 Purchases and retirement of common stock (1) (52,346 ) (5,303 ) Issuances under equity plans, including tax benefits (1,471 ) (1,057 ) Stock-based compensation 1,507 3,606 Change in accounting standard cumulative-effect adjustment (2) (602 ) — Ending balance 435,804 611,609 Accumulated other comprehensive loss Beginning balance, net of tax (13,238 ) (14,649 ) Foreign currency translation adjustment (6,625 ) 1,326 Ending balance, net of tax (19,863 ) (13,323 ) Total shareholders’ equity ending balance $ 415,942 $ 598,287 (1) Under applicable Washington State law, shares purchased are not displayed separately as treasury stock on our Consolidated Balance Sheets and are treated as authorized but unissued shares. It is our accounting policy to first record these purchases as a reduction to our common stock account. Once the common stock account has been reduced to a nominal balance, remaining purchases are recorded as a reduction to our retained earnings. Furthermore, activity in our common stock account related to stock-based compensation is also recorded to retained earnings until such time as the reduction to retained earnings due to stock repurchases has been recovered. (2) As a result of our adoption of the accounting standard for credit losses, we recognized a cumulative-effect adjustment to retained earnings of $0.6 million in the first quarter of 2020. Share repurchase plan On October 16, 2019, our Board of Directors authorized a $100.0 million share repurchase program of our outstanding common stock. The share repurchase program does not obligate us to acquire any particular amount of common stock and does not have an expiration date. We may choose to purchase shares in the open market, from individual holders, through an accelerated share repurchase program or otherwise. As of March 29, 2020 , $66.7 million remains available for repurchase of common stock under the existing authorization. As part of the existing share repurchase plan, on February 28, 2020 we entered into an accelerated share repurchase (“ASR”) agreement with a third-party financial institution to repurchase $40.0 million of our common stock. Under the ASR agreement, we paid $40.0 million to the financial institution and received an initial delivery of 2,150,538 shares, which represented 80% of the total shares we expect to receive based on the market price at the time of the initial delivery. This transaction was conducted prior to the medical community’s acknowledgment of the expected severity that COVID-19 would have on the United States . |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 29, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our income tax provision or benefit for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. Our quarterly tax provision and quarterly estimate of our annual effective tax rate are subject to variation due to several factors, including variability in accurately predicting our pre-tax and taxable income and loss by jurisdiction, tax credits, government audit developments, changes in laws, regulations and administrative practices, and relative changes in expenses or losses for which tax benefits are not recognized. Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income. For example, the impact of discrete items, tax credits, and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower. Our effective tax rate for the thirteen weeks ended March 29, 2020 was 14.1% . The difference between the statutory federal income tax rate of 21.0% and our effective income tax rate results primarily from a non-deductible goodwill and intangible asset impairment charge, the Coronavirus Aid, Relief and Economic Security Act, and the federal Work Opportunity Tax Credit (“WOTC”). WOTC is designed to encourage employers to hire workers from certain targeted groups with higher than average unemployment rates. Other differences between the statutory federal income tax rate of 21.0% and our effective tax rate of 14.1% result from state and foreign income taxes, certain non-deductible expenses, tax exempt interest, and tax effects of stock-based compensation. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 3 Months Ended |
Mar. 29, 2020 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) PER SHARE Diluted common shares were calculated as follows: Thirteen weeks ended (in thousands, except per share data) March 29, March 31, Net income (loss) $ (150,494 ) $ 8,276 Weighted average number of common shares used in basic net income (loss) per common share 37,255 39,366 Dilutive effect of non-vested restricted stock — 369 Weighted average number of common shares used in diluted net income (loss) per common share 37,255 39,735 Net income (loss) per common share: Basic $ (4.04 ) $ 0.21 Diluted $ (4.04 ) $ 0.21 Anti-dilutive shares 602 336 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 29, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Our operating segments are based on the organizational structure for which financial results are regularly reviewed by our chief operating decision-maker, our Chief Executive Officer, to determine resource allocation and assess performance. Our operating segments and reportable segments are described below: Our PeopleReady reportable segment provides blue-collar, contingent staffing through the PeopleReady operating segment. PeopleReady provides on-demand and skilled labor in a broad range of industries that include construction, manufacturing and logistics, warehousing and distribution, retail, waste and recycling, energy, hospitality, general labor and others. Our PeopleManagement reportable segment provides contingent labor and outsourced industrial workforce solutions, primarily on-site at the client’s facility, through the following operating segments, which we have aggregated into one reportable segment in accordance with U.S. GAAP: • On-site : On-site management and recruitment for the contingent industrial workforce of manufacturing, warehouse, and distribution facilities; and • Centerline Drivers : Recruitment and management of contingent and dedicated commercial drivers to the transportation and distribution industries. Our PeopleScout reportable segment provides high-volume, permanent employee recruitment process outsourcing, employer branding services and management of outsourced labor service providers through the following operating segments, which we have aggregated into one reportable segment in accordance with U.S. GAAP: • PeopleScout : Outsourced recruitment of permanent employees on behalf of clients; and • PeopleScout MSP : Management of multiple third-party staffing vendors on behalf of clients. We evaluate performance based on segment revenue and segment profit (loss). Inter-segment revenue is minimal. Segment profit (loss) includes revenue, related cost of services, and ongoing operating expenses directly attributable to the reportable segment. Segment profit (loss) excludes goodwill and intangible impairment charges, depreciation and amortization expense, unallocated corporate general and administrative expense, interest, other income and expense, income taxes, and other adjustments not considered to be ongoing. The following table presents our revenue disaggregated by major source and segment and a reconciliation of segment revenue from services to total company revenue: Thirteen weeks ended (in thousands) March 29, March 31, Revenue from services: Contingent staffing PeopleReady $ 299,294 $ 326,868 PeopleManagement 141,614 158,044 Human resource outsourcing PeopleScout 53,344 67,440 Total company $ 494,252 $ 552,352 The following table presents a reconciliation of segment profit to income (loss) before tax expense (benefit): Thirteen weeks ended (in thousands) March 29, March 31, Segment profit (loss): PeopleReady $ 7,655 $ 11,470 PeopleManagement (314 ) 2,306 PeopleScout 2,508 10,427 9,849 24,203 Corporate unallocated (5,209 ) (7,277 ) Work Opportunity Tax Credit processing fees (135 ) (240 ) Acquisition/integration costs — (577 ) Goodwill and intangible asset impairment charge (175,189 ) — Other costs 4,273 2,606 Depreciation and amortization (9,094 ) (9,952 ) Income (loss) from operations (175,505 ) 8,763 Interest and other income (expense), net 263 553 Income (loss) before tax expense (benefit) $ (175,242 ) $ 9,316 Asset information by reportable segment is not presented since we do not manage our segments on a balance sheet basis. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 3 Months Ended |
Mar. 29, 2020 | |
Subsequent Event [Line Items] | |
Subsequent Event | SUBSEQUENT EVENT On April 6, 2020, in connection with our plan to reduce costs as a result of the economic impact caused by the response to COVID-19, we announced a workforce reduction and notified approximately 645 employees of their termination and furloughed approximately 100 employees. We currently anticipate incurring severance-based charges of approximately $8 million . The severance expense related to the workforce reduction will be recognized in the second quarter of 2020. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 29, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | Financial statement preparation The accompanying unaudited consolidated financial statements (“financial statements”) of TrueBlue, Inc. (the “company,” “TrueBlue,” “we,” “us,” and “our”) are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, certain information and footnote disclosures usually found in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The financial statements reflect all adjustments which, in the opinion of management, are necessary to fairly state the financial statements for the interim periods presented. We follow the same accounting policies for preparing both quarterly and annual financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 29, 2019 . The results of operations for the thirteen weeks ended March 29, 2020 , are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period. |
Going concern | Going concern assessment and management's plans Due to the adverse impacts of COVID-19 on our business operations, including anticipated future revenue and operating cash flow declines, we expect to fund operations over the next 12 months with funds borrowed on our revolving credit facility. However, if we continue to experience significant revenue declines, which is likely to occur, we would likely not meet one or more of our financial covenants under our revolving credit facility within the next 12 months. Our failure to comply with these covenants would result in an event of default, which, if not cured or waived, could require us to repay these borrowings before their due date. Refer to Note 6: Long-Term Debt for additional details of our revolving credit facility. We are actively working with our banks to seek an amendment or waiver. In the event we are unsuccessful in these efforts with our banks, management plans to take further action to expand the current cost reduction programs, eliminate all nonessential capital expenditure projects, accelerate working capital improvement initiatives, and complete the sale of certain assets to provide supplemental liquidity. In the absence of an amendment or waiver of covenants related to the revolving credit facility we believe our plans, if executed, would result in adequate cash flows to support our ongoing operations. Our financial statements have been prepared under the assumption that we will continue as a going concern. |
Recently adopted accounting standards and recently issued accounting pronouncements not yet adopted | Recently issued accounting pronouncements not yet adopted There are no accounting pronouncements which have not yet been adopted that are expected to have a significant impact on our financial statements and related disclosures. Recently adopted accounting standards Credit losses In June 2016, the FASB issued guidance on accounting for credit losses on financial instruments. This guidance sets forth a current expected credit loss model (“CECL”), which requires the measurement of credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. Under this model, an entity recognizes an allowance for expected credit losses based on historical experience, current conditions, and forecasted information rather than the previous methodology of delaying recognition of credit losses until it is probable a loss has been incurred. This guidance was adopted at the beginning of the first quarter of 2020. We were required to apply the new standard by means of a cumulative-effect adjustment to opening retained earnings as of the beginning of the first quarter of 2020. The total impact upon adoption to opening retained earnings was immaterial to both the individual financial assets affected as well as in the aggregate. The following policies have been updated to reflect our adoption of the new standard on accounting for credit losses on financial instruments. Accounts receivable and allowance for credit losses Accounts receivable are recorded at the invoiced amount. We establish an allowance for credit loss of estimated losses resulting from the failure of our clients to make required payments by applying an aging schedule to pools of assets with similar risk characteristics. Based on an analysis of the risk characteristics of our clients and associated receivables, we have concluded our pools are as follows: • PeopleReady and Centerline Drivers (“Centerline”) have a large, diverse set of clients, generally with frequent, low dollar invoices due to the daily nature of the work we perform. This results in high turnover in accounts receivable and lower rates of non-payment. • PeopleManagement On-site has a smaller number of clients, and follows a contractual billing schedule. The invoice amounts are higher than that of PeopleReady and Centerline, with longer payment terms. • PeopleScout has a smaller number of clients, and generally sends invoices on a consolidated basis for a client. Invoice amounts are generally higher for PeopleScout than for PeopleManagement On-site, with similar payment terms. When specific clients are identified as no longer sharing the same risk profile as their current pool, they are removed from the pool and evaluated separately. The credit loss rates applied to each aging category by pool are based on current collection efforts, historical collection trends, write-off experience, client credit risk and current economic data. The allowance for credit loss is reviewed quarterly and represents our best estimate of the amount of expected credit losses. Each month, past due or delinquent balances are identified based upon a review of aged receivables performed by collections and operations. Past due balances are written off when it is probable the receivable will not be collected. Changes in the allowance for credit losses are recorded in selling, general and administrative (“SG&A”) expense on the Consolidated Statements of Operations and Comprehensive Income (Loss). In response to the rapidly changing market conditions, we have taken all appropriate steps to assess the impact to our accounts receivable allowance for credit losses. Given the dynamic nature, it is difficult to estimate the economic impact caused by COVID–19 on this allowance. However, we believe the allowance for credit loss for accounts receivable as of March 29, 2020 , is our best estimate of the amount of expected credit losses. Should actual results deviate from what we have currently estimated, our allowance for credit losses could change significantly. The activity related to the allowance for credit losses for accounts receivable during the thirteen weeks ended March 29, 2020 was as follows: (in thousands) Beginning balance $ 4,288 Cumulative-effect adjustment (1) 524 Current period provision 2,660 Write-offs, net (2) (1,093 ) Ending balance $ 6,379 (1) As a result of our adoption of the accounting standard for credit losses, we recognized a cumulative-effect adjustment to our account receivable allowance of $0.5 million as of the beginning of the first quarter of 2020. (2) Write-offs charged against the allowance are presented net of recoveries collected as the recoveries were immaterial for the thirteen weeks ended March 29, 2020 . Restricted cash and investments We establish an allowance for credit loss for our held-to-maturity debt securities using a discounted cash flow method including a probability of default rate based on the issuer credit rating. We report the entire change in present value as credit loss expense (or reversal of credit loss expense) in cost of services on the Consolidated Statements of Operations and Comprehensive Income (Loss). The cumulative-effect adjustment to our held-to-maturity debt securities as a result of adopting CECL as of the beginning of the first quarter of 2020 was immaterial, as was the allowance as of March 29, 2020 . Workers’ compensation claims reserves We establish an allowance for credit loss for our insurance receivables using a probability of default and loss given default method, with the probability of default rate based on the third-party insurance carrier credit rating. Changes in the allowance for credit losses are recorded in cost of services on the Consolidated Statements of Operations and Comprehensive Income (Loss). The cumulative-effect adjustment to our workers’ compensation insurance receivables as a result of adopting CECL as of the beginning of the first quarter of 2020 was immaterial, as was the allowance as of March 29, 2020 . |
Accounts receivable and allowance for credit losses | Accounts receivable and allowance for credit losses Accounts receivable are recorded at the invoiced amount. We establish an allowance for credit loss of estimated losses resulting from the failure of our clients to make required payments by applying an aging schedule to pools of assets with similar risk characteristics. Based on an analysis of the risk characteristics of our clients and associated receivables, we have concluded our pools are as follows: • PeopleReady and Centerline Drivers (“Centerline”) have a large, diverse set of clients, generally with frequent, low dollar invoices due to the daily nature of the work we perform. This results in high turnover in accounts receivable and lower rates of non-payment. • PeopleManagement On-site has a smaller number of clients, and follows a contractual billing schedule. The invoice amounts are higher than that of PeopleReady and Centerline, with longer payment terms. • PeopleScout has a smaller number of clients, and generally sends invoices on a consolidated basis for a client. Invoice amounts are generally higher for PeopleScout than for PeopleManagement On-site, with similar payment terms. When specific clients are identified as no longer sharing the same risk profile as their current pool, they are removed from the pool and evaluated separately. The credit loss rates applied to each aging category by pool are based on current collection efforts, historical collection trends, write-off experience, client credit risk and current economic data. The allowance for credit loss is reviewed quarterly and represents our best estimate of the amount of expected credit losses. Each month, past due or delinquent balances are identified based upon a review of aged receivables performed by collections and operations. Past due balances are written off when it is probable the receivable will not be collected. Changes in the allowance for credit losses are recorded in selling, general and administrative (“SG&A”) expense on the Consolidated Statements of Operations and Comprehensive Income (Loss). |
Restricted cash and investments | Restricted cash and investments We establish an allowance for credit loss for our held-to-maturity debt securities using a discounted cash flow method including a probability of default rate based on the issuer credit rating. We report the entire change in present value as credit loss expense (or reversal of credit loss expense) in cost of services on the Consolidated Statements of Operations and Comprehensive Income (Loss). The cumulative-effect adjustment to our held-to-maturity debt securities as a result of adopting CECL as of the beginning of the first quarter of 2020 was immaterial, as was the allowance as of March 29, 2020 . |
Workers' compensation claims reserves | Workers’ compensation claims reserves We establish an allowance for credit loss for our insurance receivables using a probability of default and loss given default method, with the probability of default rate based on the third-party insurance carrier credit rating. Changes in the allowance for credit losses are recorded in cost of services on the Consolidated Statements of Operations and Comprehensive Income (Loss). The cumulative-effect adjustment to our workers’ compensation insurance receivables as a result of adopting CECL as of the beginning of the first quarter of 2020 was immaterial, as was the allowance as of March 29, 2020 . |
Reclassifications | Reclassifications Certain previously reported amounts have been reclassified to conform to the current presentation. Specifically, the company has made certain reclassifications between cost of services and SG&A expense to more accurately reflect the costs of delivering our services. Such reclassifications did not have a significant impact on the company’s gross profit or SG&A expense. Certain immaterial prior year amounts have also been reclassified within cash flows from investing activities on our Consolidated Statements of Cash Flows to conform to current year presentation. |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | Assets measured at fair value on a recurring basis Our assets measured at fair value on a recurring basis consisted of the following: March 29, 2020 (in thousands) Total fair value Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Cash and cash equivalents $ 265,260 $ 265,260 $ — $ — Restricted cash and cash equivalents 54,316 54,316 — — Cash, cash equivalents and restricted cash (1) $ 319,576 $ 319,576 $ — $ — Municipal debt securities $ 73,093 $ — $ 73,093 $ — Corporate debt securities 70,136 — 70,136 — Agency mortgage-backed securities 1,155 — 1,155 — U.S. government and agency securities 1,068 — 1,068 — Restricted investments classified as held-to-maturity $ 145,452 $ — $ 145,452 $ — Deferred compensation investments (2) $ 11,546 $ 11,546 $ — $ — December 29, 2019 (in thousands) Total fair value Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Cash and cash equivalents $ 37,608 $ 37,608 $ — $ — Restricted cash and cash equivalents 54,763 54,763 — — Cash, cash equivalents and restricted cash (1) $ 92,371 $ 92,371 $ — $ — Municipal debt securities $ 74,236 $ — $ 74,236 $ — Corporate debt securities 76,068 — 76,068 — Agency mortgage-backed securities 1,376 — 1,376 — U.S. government and agency securities 1,051 — 1,051 — Restricted investments classified as held-to-maturity $ 152,731 $ — $ 152,731 $ — Deferred compensation investments (2) $ 13,670 $ 13,670 $ — $ — (1) Cash, cash equivalents and restricted cash consist of money market funds, deposits and investments with original maturities of three months or less. (2) Deferred compensation investments consist of mutual funds and money market funds. There were no material transfers between level 1, level 2 and level 3 of the fair value hierarchy during the thirteen weeks ended March 29, 2020 or March 31, 2019 . Assets measured at fair value on a nonrecurring basis We measure the fair value of certain non-financial assets on a nonrecurring basis, including goodwill and certain intangible assets. During the first quarter of 2020, we performed an interim impairment test as of the last day of our first fiscal quarter due to current market conditions. As a result of that test, we recognized an impairment charge of $175.2 million during the thirteen weeks ended March 29, 2020 , comprised as follows: March 29, 2020 (in thousands) Total fair value Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Total impairment loss Goodwill $ 93,290 $ — $ — $ 93,290 $ (140,489 ) Client relationships $ 27,108 — — 27,108 (34,700 ) Total $ 120,398 $ — $ — $ 120,398 $ (175,189 ) Goodwill and client relationship intangible assets with a total carrying value of $295.6 million were written down to their fair value of $120.4 million , resulting in an impairment charge of $175.2 million , which was recorded in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen weeks ended March 29, 2020 . Refer to Note 4 : Goodwill and Intangible Assets for additional details on the impairment charge and valuation methodologies. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance for credit losses (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Accounting Policies [Abstract] | |
Allowance for credit losses | The activity related to the allowance for credit losses for accounts receivable during the thirteen weeks ended March 29, 2020 was as follows: (in thousands) Beginning balance $ 4,288 Cumulative-effect adjustment (1) 524 Current period provision 2,660 Write-offs, net (2) (1,093 ) Ending balance $ 6,379 (1) As a result of our adoption of the accounting standard for credit losses, we recognized a cumulative-effect adjustment to our account receivable allowance of $0.5 million as of the beginning of the first quarter of 2020. (2) Write-offs charged against the allowance are presented net of recoveries collected as the recoveries were immaterial for the thirteen weeks ended March 29, 2020 . |
RESTRICTED CASH AND INVESTMEN_2
RESTRICTED CASH AND INVESTMENTS (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Restricted Cash and Investments [Abstract] | |
Schedule of restricted cash and investments | The following is a summary of the carrying value of our restricted cash and investments: (in thousands) March 29, December 29, Cash collateral held by insurance carriers $ 24,684 $ 24,612 Cash and cash equivalents held in Trust 26,641 23,681 Investments held in Trust 142,761 149,373 Deferred compensation investments 11,546 13,670 Company owned life insurance policies 10,284 13,126 Other restricted cash and cash equivalents 2,991 6,470 Total restricted cash and investments $ 218,907 $ 230,932 |
Schedule of held-to-maturity investments | The amortized cost and estimated fair value of our held-to-maturity investments held in Trust, aggregated by investment category as of March 29, 2020 and December 29, 2019 , were as follows: March 29, 2020 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Fair value Municipal debt securities $ 71,124 $ 1,969 $ — $ 73,093 Corporate debt securities 69,539 908 (311 ) 70,136 Agency mortgage-backed securities 1,116 39 — 1,155 U.S. government and agency securities 1,000 68 — 1,068 Total held-to-maturity investments $ 142,779 $ 2,984 $ (311 ) $ 145,452 December 29, 2019 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Fair value Municipal debt securities $ 72,017 $ 2,219 $ — $ 74,236 Corporate debt securities 75,000 1,102 (34 ) 76,068 Agency mortgage-backed securities 1,357 21 (2 ) 1,376 U.S. government and agency securities 999 52 — 1,051 Total held-to-maturity investments $ 149,373 $ 3,394 $ (36 ) $ 152,731 |
Schedule of continuous unrealized loss position | The estimated fair value and gross unrealized losses of all investments classified as held-to-maturity, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of March 29, 2020 and December 29, 2019 , were as follows: March 29, 2020 Less than 12 months 12 months or more Total (in thousands) Estimated fair value Unrealized losses Estimated fair value Unrealized losses Estimated fair value Unrealized losses Corporate debt securities $ 23,488 $ (311 ) $ — $ — $ 23,488 $ (311 ) Total held-to-maturity investments $ 23,488 $ (311 ) $ — $ — $ 23,488 $ (311 ) December 29, 2019 Less than 12 months 12 months or more Total (in thousands) Estimated fair value Unrealized losses Estimated fair value Unrealized losses Estimated fair value Unrealized losses Corporate debt securities $ 15,920 $ (32 ) $ 2,765 $ (2 ) $ 18,685 $ (34 ) Agency mortgage-backed securities — — 276 (2 ) 276 (2 ) Total held-to-maturity investments $ 15,920 $ (32 ) $ 3,041 $ (4 ) $ 18,961 $ (36 ) |
Schedule of held-to-maturity investments by contractual maturity | The amortized cost and fair value by contractual maturity of our held-to-maturity investments are as follows: March 29, 2020 (in thousands) Amortized cost Fair value Due in one year or less $ 26,080 $ 26,145 Due after one year through five years 88,541 90,049 Due after five years through ten years 28,158 29,258 Total held-to-maturity investments $ 142,779 $ 145,452 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The following table reflects changes in the carrying amount of goodwill during the period by reportable segments: (in thousands) PeopleReady PeopleManagement PeopleScout Total company Balance at December 29, 2019 Goodwill before impairment 106,304 81,092 145,181 332,577 Accumulated impairment loss (46,210 ) (33,700 ) (15,169 ) (95,079 ) Goodwill, net 60,094 47,392 130,012 237,498 Impairment loss — (45,901 ) (94,588 ) (140,489 ) Foreign currency translation — — (3,719 ) (3,719 ) Balance at March 29, 2020 Goodwill before impairment 106,304 81,092 141,462 328,858 Accumulated impairment loss (46,210 ) (79,601 ) (109,757 ) (235,568 ) Goodwill, net $ 60,094 $ 1,491 $ 31,705 $ 93,290 |
Schedule of finite-lived intangible assets | The following table presents our purchased finite-lived intangible assets: March 29, 2020 December 29, 2019 (in thousands) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated Net Finite-lived intangible assets (1): Client relationships (2) $ 98,181 $ (71,073 ) $ 27,108 $ 149,299 $ (83,317 ) $ 65,982 Trade names/trademarks 1,939 (467 ) 1,472 2,052 (441 ) 1,611 Technologies 600 (550 ) 50 600 (520 ) 80 Total finite-lived intangible assets $ 100,720 $ (72,090 ) $ 28,630 $ 151,951 $ (84,278 ) $ 67,673 (1) Excludes assets that are fully amortized. (2) Balance at March 29, 2020 is net of impairment loss of $34.7 million recorded in the thirteen weeks ended March 29, 2020 . |
WORKERS' COMPENSATION INSURAN_2
WORKERS' COMPENSATION INSURANCE AND RESERVES (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Workers' Compensation Insurance and Reserves [Abstract] | |
Reconciliation of workers' compensation claims reserve | The following table presents a reconciliation of the undiscounted workers’ compensation reserve to the discounted workers’ compensation reserve for the periods presented: (in thousands) March 29, December 29, Undiscounted workers’ compensation reserve $ 272,179 $ 274,934 Less discount on workers’ compensation reserve 18,724 19,316 Workers’ compensation reserve, net of discount 253,455 255,618 Less current portion 69,353 73,020 Long-term portion $ 184,102 $ 182,598 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of workers’ compensation collateral commitments | We have provided our insurance carriers and certain states with commitments in the form and amounts listed below: (in thousands) March 29, December 29, Cash collateral held by workers’ compensation insurance carriers $ 22,317 $ 22,256 Cash and cash equivalents held in Trust 26,641 23,681 Investments held in Trust 142,761 149,373 Letters of credit (1) 6,202 6,202 Surety bonds (2) 20,731 20,731 Total collateral commitments $ 218,652 $ 222,243 (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. |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Shareholders' Equity [Abstract] | |
Schedule of Stockholders Equity | Changes in the balance of each component of shareholders’ equity during the reporting periods were as follows: Thirteen weeks ended (in thousands) March 29, March 31, Common stock shares Beginning balance 38,593 40,054 Purchases and retirement of common stock (2,930 ) (234 ) Issuances under equity plans, including tax benefits 415 308 Stock-based compensation 50 24 Ending balance 36,128 40,152 Common stock amount Beginning balance $ 1 $ 1 Current period activity — — Ending balance 1 1 Retained earnings Beginning balance 639,210 606,087 Net income (loss) (150,494 ) 8,276 Purchases and retirement of common stock (1) (52,346 ) (5,303 ) Issuances under equity plans, including tax benefits (1,471 ) (1,057 ) Stock-based compensation 1,507 3,606 Change in accounting standard cumulative-effect adjustment (2) (602 ) — Ending balance 435,804 611,609 Accumulated other comprehensive loss Beginning balance, net of tax (13,238 ) (14,649 ) Foreign currency translation adjustment (6,625 ) 1,326 Ending balance, net of tax (19,863 ) (13,323 ) Total shareholders’ equity ending balance $ 415,942 $ 598,287 (1) Under applicable Washington State law, shares purchased are not displayed separately as treasury stock on our Consolidated Balance Sheets and are treated as authorized but unissued shares. It is our accounting policy to first record these purchases as a reduction to our common stock account. Once the common stock account has been reduced to a nominal balance, remaining purchases are recorded as a reduction to our retained earnings. Furthermore, activity in our common stock account related to stock-based compensation is also recorded to retained earnings until such time as the reduction to retained earnings due to stock repurchases has been recovered. (2) As a result of our adoption of the accounting standard for credit losses, we recognized a cumulative-effect adjustment to retained earnings of $0.6 million in the first quarter of 2020. |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of net income (loss) and diluted common shares | Diluted common shares were calculated as follows: Thirteen weeks ended (in thousands, except per share data) March 29, March 31, Net income (loss) $ (150,494 ) $ 8,276 Weighted average number of common shares used in basic net income (loss) per common share 37,255 39,366 Dilutive effect of non-vested restricted stock — 369 Weighted average number of common shares used in diluted net income (loss) per common share 37,255 39,735 Net income (loss) per common share: Basic $ (4.04 ) $ 0.21 Diluted $ (4.04 ) $ 0.21 Anti-dilutive shares 602 336 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment information | The following table presents our revenue disaggregated by major source and segment and a reconciliation of segment revenue from services to total company revenue: Thirteen weeks ended (in thousands) March 29, March 31, Revenue from services: Contingent staffing PeopleReady $ 299,294 $ 326,868 PeopleManagement 141,614 158,044 Human resource outsourcing PeopleScout 53,344 67,440 Total company $ 494,252 $ 552,352 The following table presents a reconciliation of segment profit to income (loss) before tax expense (benefit): Thirteen weeks ended (in thousands) March 29, March 31, Segment profit (loss): PeopleReady $ 7,655 $ 11,470 PeopleManagement (314 ) 2,306 PeopleScout 2,508 10,427 9,849 24,203 Corporate unallocated (5,209 ) (7,277 ) Work Opportunity Tax Credit processing fees (135 ) (240 ) Acquisition/integration costs — (577 ) Goodwill and intangible asset impairment charge (175,189 ) — Other costs 4,273 2,606 Depreciation and amortization (9,094 ) (9,952 ) Income (loss) from operations (175,505 ) 8,763 Interest and other income (expense), net 263 553 Income (loss) before tax expense (benefit) $ (175,242 ) $ 9,316 |
FAIR VALUE MEASUREMENT - Fair V
FAIR VALUE MEASUREMENT - Fair Value Measurement (Details) - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 29, 2019 | Mar. 31, 2019 | Dec. 30, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash, cash equivalents, restricted cash and restricted cash equivalents | $ 319,576 | $ 92,371 | $ 81,453 | $ 102,450 |
Restricted investments classified as held-to-maturity | 145,452 | 152,731 | ||
Deferred compensation investments | 11,546 | 13,670 | ||
Municipal debt securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 73,093 | 74,236 | ||
Corporate debt securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 70,136 | 76,068 | ||
Agency mortgage-backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 1,155 | 1,376 | ||
U.S. government and agency securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 1,068 | 1,051 | ||
Fair value, recurring [Member] | Total fair value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents | 265,260 | 37,608 | ||
Fair value, recurring [Member] | Total fair value | Restricted assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted cash and cash equivalents | 54,316 | 54,763 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents | 319,576 | 92,371 | ||
Restricted investments classified as held-to-maturity | 145,452 | 152,731 | ||
Deferred compensation investments | 11,546 | 13,670 | ||
Fair value, recurring [Member] | Total fair value | Restricted assets | Municipal debt securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 73,093 | 74,236 | ||
Fair value, recurring [Member] | Total fair value | Restricted assets | Corporate debt securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 70,136 | 76,068 | ||
Fair value, recurring [Member] | Total fair value | Restricted assets | Agency mortgage-backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 1,155 | 1,376 | ||
Fair value, recurring [Member] | Total fair value | Restricted assets | U.S. government and agency securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 1,068 | 1,051 | ||
Fair value, recurring [Member] | Quoted prices in active markets for identical assets (level 1) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents | 265,260 | 37,608 | ||
Fair value, recurring [Member] | Quoted prices in active markets for identical assets (level 1) | Restricted assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted cash and cash equivalents | 54,316 | 54,763 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents | 319,576 | 92,371 | ||
Restricted investments classified as held-to-maturity | 0 | 0 | ||
Deferred compensation investments | 11,546 | 13,670 | ||
Fair value, recurring [Member] | Quoted prices in active markets for identical assets (level 1) | Restricted assets | Municipal debt securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 0 | 0 | ||
Fair value, recurring [Member] | Quoted prices in active markets for identical assets (level 1) | Restricted assets | Corporate debt securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 0 | 0 | ||
Fair value, recurring [Member] | Quoted prices in active markets for identical assets (level 1) | Restricted assets | Agency mortgage-backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 0 | 0 | ||
Fair value, recurring [Member] | Quoted prices in active markets for identical assets (level 1) | Restricted assets | U.S. government and agency securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 0 | 0 | ||
Fair value, recurring [Member] | Significant other observable inputs (level 2) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents | 0 | 0 | ||
Fair value, recurring [Member] | Significant other observable inputs (level 2) | Restricted assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted cash and cash equivalents | 0 | 0 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents | 0 | 0 | ||
Restricted investments classified as held-to-maturity | 145,452 | 152,731 | ||
Deferred compensation investments | 0 | 0 | ||
Fair value, recurring [Member] | Significant other observable inputs (level 2) | Restricted assets | Municipal debt securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 73,093 | 74,236 | ||
Fair value, recurring [Member] | Significant other observable inputs (level 2) | Restricted assets | Corporate debt securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 70,136 | 76,068 | ||
Fair value, recurring [Member] | Significant other observable inputs (level 2) | Restricted assets | Agency mortgage-backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 1,155 | 1,376 | ||
Fair value, recurring [Member] | Significant other observable inputs (level 2) | Restricted assets | U.S. government and agency securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 1,068 | 1,051 | ||
Fair value, recurring [Member] | Significant unobservable inputs (level 3) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents | 0 | 0 | ||
Fair value, recurring [Member] | Significant unobservable inputs (level 3) | Restricted assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted cash and cash equivalents | 0 | 0 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents | 0 | 0 | ||
Restricted investments classified as held-to-maturity | 0 | 0 | ||
Deferred compensation investments | 0 | 0 | ||
Fair value, recurring [Member] | Significant unobservable inputs (level 3) | Restricted assets | Municipal debt securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 0 | 0 | ||
Fair value, recurring [Member] | Significant unobservable inputs (level 3) | Restricted assets | Corporate debt securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 0 | 0 | ||
Fair value, recurring [Member] | Significant unobservable inputs (level 3) | Restricted assets | Agency mortgage-backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | 0 | 0 | ||
Fair value, recurring [Member] | Significant unobservable inputs (level 3) | Restricted assets | U.S. government and agency securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Restricted investments classified as held-to-maturity | $ 0 | $ 0 |
FAIR VALUE MEASUREMENT - Assets
FAIR VALUE MEASUREMENT - Assets Measured at Fair Value on a Nonrecurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 29, 2020 | Mar. 31, 2019 | Dec. 29, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Goodwill impairment loss | $ (140,489) | ||
Impairment of finite-lived intangible assets | (34,700) | ||
Goodwill and intangible asset impairment charge | (175,189) | $ 0 | |
Fair value, nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Goodwill impairment loss | (140,489) | ||
Impairment of finite-lived intangible assets | (34,700) | ||
Goodwill and intangible asset impairment charge | (175,189) | ||
Fair value, nonrecurring [Member] | Quoted prices in active markets for identical assets (level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Goodwill | 0 | ||
Client relationships | 0 | ||
Total | 0 | ||
Fair value, nonrecurring [Member] | Significant other observable inputs (level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Goodwill | 0 | ||
Client relationships | 0 | ||
Total | 0 | ||
Fair value, nonrecurring [Member] | Significant unobservable inputs (level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Goodwill | 93,290 | ||
Client relationships | 27,108 | ||
Total | 120,398 | ||
Fair value, nonrecurring [Member] | Total fair value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Goodwill | 93,290 | ||
Client relationships | 27,108 | ||
Total | $ 120,398 | $ 295,600 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance for credit losses (Details) $ in Thousands | 3 Months Ended |
Mar. 29, 2020USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Beginning balance | $ 4,288 |
Cumulative-effect adjustment | 6,379 |
Provision for doubtful accounts | 2,660 |
Write-offs, net | (1,093) |
Ending balance | 6,379 |
Cumulative-effect adjustment | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Beginning balance | 524 |
Cumulative-effect adjustment | $ 524 |
FAIR VALUE MEASUREMENT - Narrat
FAIR VALUE MEASUREMENT - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 29, 2020 | Mar. 31, 2019 | Dec. 29, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Goodwill and intangible asset impairment charge | $ 175,189 | $ 0 | |
Fair value, nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Goodwill and intangible asset impairment charge | 175,189 | ||
Total fair value | Fair value, nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets fair value | $ 120,398 | $ 295,600 |
RESTRICTED CASH AND INVESTMEN_3
RESTRICTED CASH AND INVESTMENTS (Details) $ in Thousands | 3 Months Ended | ||
Mar. 29, 2020USD ($)security | Mar. 31, 2019USD ($) | Dec. 29, 2019USD ($)security | |
Restricted Cash and Investments [Line Items] | |||
Cash collateral held by insurance carriers | $ 24,684 | $ 24,612 | |
Cash and cash equivalents held in Trust | 26,641 | 23,681 | |
Investments held in Trust | 142,761 | 149,373 | |
Amortized cost of held-to-maturity investments | 142,779 | 149,373 | |
Deferred compensation investments | 11,546 | 13,670 | |
Company owned life insurance policies | 10,284 | 13,126 | |
Other restricted cash and cash equivalents | 2,991 | 6,470 | |
Restricted cash and investments | 218,907 | 230,932 | |
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract] | |||
Gross unrealized gains | 2,984 | 3,394 | |
Gross unrealized losses | (311) | (36) | |
Fair value | 145,452 | 152,731 | |
Estimated fair value | |||
Less than 12 months | 23,488 | 15,920 | |
12 months or more | 0 | 3,041 | |
Total | 23,488 | 18,961 | |
Unrealized losses | |||
Less than 12 months | (311) | (32) | |
12 months or more | 0 | (4) | |
Total | $ (311) | $ (36) | |
Number of securities in unrealized loss positions | security | 16 | 17 | |
Held-to-maturity securities, fair value [Abstract] | |||
Fair value | $ 145,452 | $ 152,731 | |
Unrealized loss | (2,900) | ||
Unrealized gain | $ 2,400 | ||
Municipal debt securities | |||
Restricted Cash and Investments [Line Items] | |||
Amortized cost of held-to-maturity investments | 71,124 | 72,017 | |
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract] | |||
Gross unrealized gains | 1,969 | 2,219 | |
Gross unrealized losses | 0 | 0 | |
Fair value | 73,093 | 74,236 | |
Held-to-maturity securities, fair value [Abstract] | |||
Fair value | 73,093 | 74,236 | |
Corporate debt securities | |||
Restricted Cash and Investments [Line Items] | |||
Amortized cost of held-to-maturity investments | 69,539 | 75,000 | |
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract] | |||
Gross unrealized gains | 908 | 1,102 | |
Gross unrealized losses | (311) | (34) | |
Fair value | 70,136 | 76,068 | |
Estimated fair value | |||
Less than 12 months | 23,488 | 15,920 | |
12 months or more | 0 | 2,765 | |
Total | 23,488 | 18,685 | |
Unrealized losses | |||
Less than 12 months | (311) | (32) | |
12 months or more | 0 | (2) | |
Total | (311) | (34) | |
Held-to-maturity securities, fair value [Abstract] | |||
Fair value | 70,136 | 76,068 | |
Agency mortgage-backed securities | |||
Restricted Cash and Investments [Line Items] | |||
Amortized cost of held-to-maturity investments | 1,116 | 1,357 | |
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract] | |||
Gross unrealized gains | 39 | 21 | |
Gross unrealized losses | 0 | (2) | |
Fair value | 1,155 | 1,376 | |
Estimated fair value | |||
Less than 12 months | 0 | ||
12 months or more | 276 | ||
Total | 276 | ||
Unrealized losses | |||
Less than 12 months | 0 | ||
12 months or more | (2) | ||
Total | (2) | ||
Held-to-maturity securities, fair value [Abstract] | |||
Fair value | 1,155 | 1,376 | |
U.S. government and agency securities | |||
Restricted Cash and Investments [Line Items] | |||
Amortized cost of held-to-maturity investments | 1,000 | 999 | |
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract] | |||
Gross unrealized gains | 68 | 52 | |
Gross unrealized losses | 0 | 0 | |
Fair value | 1,068 | 1,051 | |
Held-to-maturity securities, fair value [Abstract] | |||
Fair value | 1,068 | $ 1,051 | |
Restricted cash and investments | |||
Restricted Cash and Investments [Line Items] | |||
Amortized cost of held-to-maturity investments | 142,779 | ||
Held-to-maturity Securities, Reconciliation to Fair Value [Abstract] | |||
Fair value | 145,452 | ||
Held-to-maturity securities, amortized cost [Abstract] | |||
Due in one year or less | 26,080 | ||
Due after one year through five years | 88,541 | ||
Due after five years through ten years | 28,158 | ||
Held-to-maturity securities, fair value [Abstract] | |||
Due in one year or less | 26,145 | ||
Due after one year through five years | 90,049 | ||
Due after five years through ten years | 29,258 | ||
Fair value | $ 145,452 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Dec. 29, 2019 | |
Goodwill [Line Items] | ||
Goodwill before impairment | $ 328,858 | $ 332,577 |
Accumulated impairment loss | (235,568) | (95,079) |
Goodwill, net | 93,290 | 237,498 |
Goodwill impairment loss | (140,489) | |
Foreign currency translation | (3,719) | |
PeopleReady | ||
Goodwill [Line Items] | ||
Goodwill before impairment | 106,304 | 106,304 |
Accumulated impairment loss | (46,210) | (46,210) |
Goodwill, net | 60,094 | 60,094 |
Goodwill impairment loss | 0 | |
Foreign currency translation | 0 | |
PeopleManagement | ||
Goodwill [Line Items] | ||
Goodwill before impairment | 81,092 | 81,092 |
Accumulated impairment loss | (79,601) | (33,700) |
Goodwill, net | 1,491 | 47,392 |
Goodwill impairment loss | (45,901) | |
Foreign currency translation | 0 | |
PeopleScout | ||
Goodwill [Line Items] | ||
Goodwill before impairment | 141,462 | 145,181 |
Accumulated impairment loss | (109,757) | (15,169) |
Goodwill, net | 31,705 | 130,012 |
Goodwill impairment loss | (94,588) | |
Foreign currency translation | $ (3,719) | |
Minimum | ||
Goodwill [Line Items] | ||
Weighted average cost of capital | 11.50% | |
Maximum | ||
Goodwill [Line Items] | ||
Weighted average cost of capital | 12.00% | |
On-site [Member] | PeopleManagement | ||
Goodwill [Line Items] | ||
Goodwill, net | $ 45,900 | |
RPO [Member] | PeopleScout | ||
Goodwill [Line Items] | ||
Goodwill, net | $ 22,000 | |
Goodwill impairment loss | (92,200) | |
MSP [Member] | PeopleScout | ||
Goodwill [Line Items] | ||
Goodwill, net | 9,700 | |
Goodwill impairment loss | $ (2,400) |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 29, 2020 | Mar. 31, 2019 | Dec. 29, 2019 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross carrying amount | $ 100,720 | $ 151,951 | |
Accumulated amortization | (72,090) | (84,278) | |
Net carrying amount | 28,630 | 67,673 | |
Amortization of intangible assets | 4,000 | $ 5,100 | |
Impairment of finite-lived intangible assets | $ 34,700 | ||
Discount rate | 12.00% | ||
Customer relationships | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross carrying amount | $ 98,181 | 149,299 | |
Accumulated amortization | (71,073) | (83,317) | |
Net carrying amount | 27,108 | 65,982 | |
Trade names/trademarks | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross carrying amount | 1,939 | 2,052 | |
Accumulated amortization | (467) | (441) | |
Net carrying amount | 1,472 | 1,611 | |
Technologies | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross carrying amount | 600 | 600 | |
Accumulated amortization | (550) | (520) | |
Net carrying amount | 50 | $ 80 | |
PeopleScout | RPO [Member] | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Impairment of finite-lived intangible assets | 25,000 | ||
PeopleScout | RPO [Member] | Customer relationships | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Net carrying amount | 6,200 | ||
PeopleManagement | On-site [Member] | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Impairment of finite-lived intangible assets | 9,700 | ||
PeopleManagement | On-site [Member] | Customer relationships | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Net carrying amount | $ 8,500 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Millions | Mar. 29, 2020 | Dec. 29, 2019 |
Trade names/trademarks | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived trade names/trademarks | $ 6 | $ 6 |
WORKERS' COMPENSATION INSURAN_3
WORKERS' COMPENSATION INSURANCE AND RESERVES - Reconciliation of Workers' Compensation Claims Reserve (Details) - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 29, 2019 |
Workers' Compensation Insurance and Reserves [Abstract] | ||
Undiscounted workers’ compensation reserve | $ 272,179 | $ 274,934 |
Less discount on workers’ compensation reserve | 18,724 | 19,316 |
Workers' compensation reserve, net of discount | 253,455 | 255,618 |
Less current portion | 69,353 | 73,020 |
Long-term portion | $ 184,102 | $ 182,598 |
WORKERS' COMPENSATION INSURAN_4
WORKERS' COMPENSATION INSURANCE AND RESERVES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | Dec. 29, 2019 | |
Workers' Compensation Deductible Limit [Line Items] | |||
Workers' compensation claim deductible limit | $ 2 | ||
Weighted average period for claim payments below deductible limit | 5 years | ||
Payments made against self-insured claims | $ 14.6 | $ 15.3 | |
Weighted average period for claim payments and receivables above deductible limit | 17 years | ||
Workers' compensation reserve for excess claims | $ 45.6 | $ 45.3 | |
Worker's compensation receivable for excess claims | 44.6 | $ 45.3 | |
Workers compensation expense | $ 14.3 | $ 11.9 | |
Below limit | |||
Workers' Compensation Deductible Limit [Line Items] | |||
Workers' compensation discount | 2.00% | 2.00% | |
Above Limit | |||
Workers' Compensation Deductible Limit [Line Items] | |||
Workers' compensation discount | 2.20% | 2.40% |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) - USD ($) | Mar. 16, 2020 | Mar. 29, 2020 | Dec. 29, 2019 |
Revolving Credit Facility [Line Items] | |||
Long-term debt | $ 293,500,000 | $ 37,100,000 | |
Leverage ratio, threshold | 3 | ||
Fixed charge coverage ratio, threshold | 1.25 | ||
Leverage ratio | 2.7 | ||
Fixed charge coverage ratio | 40.8 | ||
Revolving Credit Facility | |||
Revolving Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 300,000,000 | ||
Maximum borrowing capacity subject to lender approval | $ 450,000,000 | ||
Debt instrument term | 5 years | ||
Long-term debt | $ 293,500,000 | 37,100,000 | |
Remaining borrowing capacity | $ 300,000 | ||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||
Revolving Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.25% | ||
Additional debt instrument base rate | 1.00% | ||
Effective interest rate | 2.25% | ||
Revolving Credit Facility | Base rate | |||
Revolving Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.25% | ||
Additional debt instrument base rate | 0.50% | 3.25% | |
Effective interest rate | 3.50% | ||
Revolving Credit Facility | Minimum | |||
Revolving Credit Facility [Line Items] | |||
Unused capacity commitment fee percentage | 0.25% | ||
Revolving Credit Facility | Minimum | London Interbank Offered Rate (LIBOR) | |||
Revolving Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.25% | ||
Revolving Credit Facility | Minimum | Base rate | |||
Revolving Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.25% | 0.25% | |
Revolving Credit Facility | Maximum | |||
Revolving Credit Facility [Line Items] | |||
Unused capacity commitment fee percentage | 0.375% | ||
Revolving Credit Facility | Maximum | London Interbank Offered Rate (LIBOR) | |||
Revolving Credit Facility [Line Items] | |||
Basis spread on variable rate | 2.50% | ||
Revolving Credit Facility | Maximum | Base rate | |||
Revolving Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.50% | 1.50% | |
Swingline loan | |||
Revolving Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 30,000,000 | ||
Long-term debt | $ 10,000,000 | $ 17,100,000 | |
Letters of credit outstanding | $ 6,200,000 | ||
Letter of credit | |||
Revolving Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 125,000,000 | ||
Letter of credit | London Interbank Offered Rate (LIBOR) | |||
Revolving Credit Facility [Line Items] | |||
Additional letters of credit base rate | 0.50% | ||
Letter of credit | Minimum | London Interbank Offered Rate (LIBOR) | |||
Revolving Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
Letter of credit | Maximum | London Interbank Offered Rate (LIBOR) | |||
Revolving Credit Facility [Line Items] | |||
Basis spread on variable rate | 2.25% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Dec. 29, 2019 | |
Workers' Compensation Commitments [Line Items] | ||
Cash collateral held by workers’ compensation insurance carriers | $ 22,317 | $ 22,256 |
Cash and cash equivalents held in Trust | 26,641 | 23,681 |
Investments held in Trust | 142,761 | 149,373 |
Letters of credit | 6,202 | 6,202 |
Surety bonds | 20,731 | 20,731 |
Total collateral commitments | $ 218,652 | $ 222,243 |
Surety bonds annual fee limit as a percentage of bond amount | 2.00% | |
Surety bonds required cancellation notice | 60 days | |
Minimum | ||
Workers' Compensation Commitments [Line Items] | ||
Surety bonds review and renewal period if elected | 1 year | |
Maximum | ||
Workers' Compensation Commitments [Line Items] | ||
Surety bonds review and renewal period if elected | 4 years |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) | Feb. 28, 2020 | Mar. 29, 2020 | Mar. 31, 2019 | Oct. 16, 2019 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance (in shares) | 38,593,000 | |||
Ending balance (in shares) | 36,128,000 | |||
Beginning balance | $ 625,973,000 | |||
Net income (loss) | (150,494,000) | $ 8,276,000 | ||
Foreign currency translation adjustment | (6,625,000) | 1,326,000 | ||
Ending balance, net of tax | 415,942,000 | $ 598,287,000 | ||
Stock repurchase program remaining authorized amount | $ 66,700,000 | |||
Percentage of stock repurchased during the period, Percentage | 80.00% | |||
Common stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance (in shares) | 38,593,000 | 40,054,000 | ||
Purchases and retirement of common stock (in shares) | (2,930,000) | (234,000) | ||
Issuances under equity plans, including tax benefits (in shares) | 415,000 | 308,000 | ||
Stock-based compensation (in shares) | 50,000 | 24,000 | ||
Ending balance (in shares) | 36,128,000 | 40,152,000 | ||
Beginning balance | $ 1,000 | $ 1,000 | ||
Ending balance, net of tax | 1,000 | 1,000 | ||
Retained earnings | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 639,210,000 | 606,087,000 | ||
Net income (loss) | (150,494,000) | 8,276,000 | ||
Purchases and retirement of common stock | (52,346,000) | (5,303,000) | ||
Issuances under equity plans, including tax benefits | (1,471,000) | (1,057,000) | ||
Stock-based compensation | 1,507,000 | 3,606,000 | ||
Change in accounting standard cumulative-effect adjustment | 602,000 | 0 | ||
Ending balance, net of tax | 435,804,000 | 611,609,000 | ||
Accumulated other comprehensive loss | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | (13,238,000) | (14,649,000) | ||
Foreign currency translation adjustment | (6,625,000) | 1,326,000 | ||
Ending balance, net of tax | $ (19,863,000) | $ (13,323,000) | ||
Common stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Purchases and retirement of common stock (in shares) | (2,150,538) | |||
Purchases and retirement of common stock | $ (40,000,000) | |||
Stock repurchase program authorized amount | $ 100,000,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended |
Mar. 29, 2020 | |
Income Tax Disclosure [Abstract] | |
Effective income tax rate | 14.10% |
Statutory federal income tax rate | 21.00% |
NET INCOME (LOSS) PER SHARE (De
NET INCOME (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net income (loss) | $ (150,494) | $ 8,276 |
Weighted average number of common shares used in basic net income (loss) per common share | 37,255 | 39,366 |
Dilutive effect of non-vested restricted stock | 0 | 369 |
Weighted average number of common shares used in diluted net income (loss) per common share | 37,255 | 39,735 |
Net income (loss) per common share: | ||
Basic (in dollars per share) | $ (4.04) | $ 0.21 |
Diluted (in dollars per share) | $ (4.04) | $ 0.21 |
Anti-dilutive shares | 602 | 336 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 494,252 | $ 552,352 |
Segment profit (loss) | 9,849 | 24,203 |
Work Opportunity Tax Credit processing fees | (135) | (240) |
Acquisition/integration costs | 0 | (577) |
Goodwill and intangible asset impairment charge | 175,189 | 0 |
Other costs | 4,273 | 2,606 |
Depreciation and amortization | (9,094) | (9,952) |
Income (loss) from operations | (175,505) | 8,763 |
Interest and other income (expense), net | 263 | 553 |
Income (loss) before tax expense (benefit) | (175,242) | 9,316 |
PeopleReady | ||
Segment Reporting Information [Line Items] | ||
Segment profit (loss) | 7,655 | 11,470 |
PeopleManagement | ||
Segment Reporting Information [Line Items] | ||
Segment profit (loss) | (314) | 2,306 |
PeopleScout | ||
Segment Reporting Information [Line Items] | ||
Segment profit (loss) | 2,508 | 10,427 |
Corporate unallocated | ||
Segment Reporting Information [Line Items] | ||
Corporate unallocated | (5,209) | (7,277) |
Contingent staffing | PeopleReady | ||
Segment Reporting Information [Line Items] | ||
Revenue | 299,294 | 326,868 |
Contingent staffing | PeopleManagement | ||
Segment Reporting Information [Line Items] | ||
Revenue | 141,614 | 158,044 |
Human resource outsourcing | PeopleScout | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 53,344 | $ 67,440 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - Subsequent Event [Member] $ in Millions | 3 Months Ended | |
Jun. 28, 2020USD ($) | Apr. 06, 2020employee | |
Subsequent Event [Line Items] | ||
Terminated workforce reduction | 645 | |
Furloughed workforce reduction | 100 | |
Severance costs | $ | $ 8 |