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ACQUISITIONS | 12 Months Ended
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Dec. 30, 2018
Business Combinations [Abstract] |
ACQUISITIONS | ACQUISITIONS Zycron, Inc. On April 3, 2017, the Company acquired substantially all of the assets and assumed certain liabilities of Zycron, Inc. (“Zycron”) for an initial cash consideration paid of $18.5 million and issued $1.0 million (70,670 shares privately placed) of the Company's common stock at closing. An additional $0.5 million was held back as partial security for post-closing purchase price adjustments and indemnification obligations, which was paid on October 24, 2017 net of a working capital adjustment. The purchase agreement further provides for contingent consideration of up to $3.0 million based on the performance of the acquired business for the two years following the date of acquisition. The purchase agreement contained a provision for a “true up” of acquired working capital 120 days after the closing date. The net assets acquired were assigned to the Professional segment. The acquisition of Zycron allows the Company to strengthen and expand its IT operations throughout the southeastern U.S. region and selected markets across the country with talent and project management services. The Fiscal 2017 consolidated statement of operations includes 39 weeks of Zycron operations, which is approximately $27.1 million of revenue and $2.2 million of operating income. The purchase price has been allocated to the assets acquired and liabilities assumed as of the date of acquisition. All amounts recorded to goodwill are expected to be deductible for tax purposes. The allocation is as follows:
Accounts receivable |  | $ | 4,345,312 |
Prepaid expenses and other assets |  | 82,122 |
Property and equipment |  | 128,431 |
Intangible assets |  | 13,818,475 |
Goodwill |  | 7,037,271 |
Liabilities assumed |  | (2,997,027 | )
Total net assets acquired |  | $ | 22,414,584 |
Cash |  | $ | 18,500,000 |
Hold back |  | 500,000 |
Common stock |  | 1,000,000 |
Working capital adjustment |  | (177,469 | )
Fair value of contingent consideration |  | 2,592,053 |
Total fair value of consideration transferred for acquired business |  | $ | 22,414,584 |
The allocation of the intangible assets is as follows:
|  | Estimated Fair Value |  | Estimated Useful Lives
Covenants not to compete |  | $ | 475,000 |  |  | 5 years
Trade name |  | 5,006,000 |  |  | Indefinite
Client partner list |  | 8,337,475 |  |  | 10 years
Total |  | $ | 13,818,475 |  |  |
Smart Resources, Inc. On September 18, 2017, the Company acquired substantially all of the assets and assumed certain liabilities of Smart Resources, Inc. and Accountable Search, LLC (collectively, "Smart") for an initial cash consideration paid of $6.0 million. The purchase agreement provides for contingent consideration of up to $2.0 million based on the performance of the acquired business for the two years following the date of acquisition. The purchase agreement contained a provision for a “true up” of acquired working capital 90 days after the closing date. The net assets acquired were assigned to the Professional segment. The acquisition of Smart allows the Company to strengthen and expand its finance and accounting operations in the Chicago market with temporary and direct hire services. The Fiscal 2017 consolidated statement of operations includes 15 weeks of Smart operations, which is approximately $3.2 million of revenue and $0.1 million of operating income. The preliminary purchase price has been allocated to the assets acquired and liabilities assumed as of the date of acquisition. All amounts recorded to goodwill are expected to be deductible for tax purposes. The allocation is as follows:
Accounts receivable |  | $ | 1,228,614 |
Prepaid expenses and other assets |  | 38,150 |
Property and equipment |  | 38,270 |
Intangible assets |  | 4,903,602 |
Goodwill |  | 1,748,119 |
Liabilities assumed |  | (144,906 | )
Total net assets acquired |  | $ | 7,811,849 |
Cash |  | $ | 6,000,000 |
Working capital adjustment |  | 51,212 |
Fair value of contingent consideration |  | 1,760,637 |
Total fair value of consideration transferred for acquired business |  | $ | 7,811,849 |
The allocation of the intangible assets is as follows:
|  | Estimated Fair Value |  | Estimated Useful Lives
Covenants not to compete |  | $ | 20,000 |  |  | 5 years
Client partner list |  | 4,883,602 |  |  | 10 years
Total |  | $ | 4,903,602 |  |  |
The Company incurred costs of $0.3 million related to the Zycron and Smart acquisitions. These costs were expensed as incurred in selling, general and administrative expenses in 2017. Supplemental Unaudited Pro Forma Information The Company estimates that the revenues and net income for the period below that would have been reported if the Zycron and Smart acquisitions had taken place on the first day of Fiscal 2017 would be as follows (dollars in thousands, except per share amounts):
|  | 2017
Revenues |  | $ | 290,359 |
Gross profit |  | $ | 73,647 |
Net income |  | $ | 6,117 |
Income per share: |  |  |
Basic |  | $ | 0.70 |
Diluted |  | $ | 0.68 |
Pro forma net income includes amortization of identifiable intangible assets, interest expense on additional borrowings on the Revolving Facility at a rate of 4.50% and tax expense of the pro forma adjustments at an effective tax rate of approximately 36.8%. The pro forma information presented includes adjustments that will have a continuing impact on the operations that management considers non-recurring in assessing Zycron and Smart's historical performances. Amounts set forth above are not necessarily indicative of the results that would have been attained had the Zycron and Smart acquisitions taken place on the first day of Fiscal 2017 or of the results that may be achieved by the combined enterprise in the future.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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- References No definition available. + Details
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