XML 24 R10.htm IDEA: XBRL DOCUMENT
v3.20.1

ACQUISITIONS | 12 Months Ended
--- | ---
Dec. 29, 2019
Business Combinations [Abstract] |
ACQUISITIONS | ACQUISITIONS L.J. Kushner & Associates, L.L.C. On December 13, 2019, the Company acquired substantially all of the assets and assumed certain liabilities of L.J. Kushner & Associates, L.L.C. (“LJK”) for cash consideration of $8.5 million and issued $1.0 million (47,403 shares privately placed) of the Company's common stock at closing. $1.0 million was held back as partial security for certain post-closing liabilities. The purchase agreement further provides for contingent consideration of up to $2.5 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 LJK allows the Company to strengthen and expand its IT operations through cybersecurity retained search services specializing in recruiting high and mid-level security professionals. The Fiscal 2019 consolidated statement of operations includes two weeks of LJK operations and there are no revenues and minimal operating expenses. 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 preliminary allocation is as follows:
Accounts receivable |  | $ | 187,000 |
Prepaid expenses and other assets |  | 14,000 |
Intangible assets |  | 4,249,430 |
Goodwill |  | 7,211,090 |
Total net assets acquired |  | $ | 11,661,520 |
Cash |  | $ | 7,500,000 |
Hold back (included in Other current liabilities) |  | 1,000,000 |
Common stock |  | 1,000,000 |
Fair value of contingent consideration |  | 2,161,520 |
Total fair value of consideration transferred for acquired business |  | $ | 11,661,520 |
The preliminary allocation of the intangible assets is as follows:
|  | Estimated Fair Value |  | Estimated Useful Lives
Covenants not to compete |  | $ | 500,000 |  |  | 5 years
Trade name |  | 3,000,000 |  |  | Indefinite
Client partner list |  | 749,430 |  |  | 5 years
Total |  | $ | 4,249,430 |  |  |
The Company incurred costs of $0.1 million related to the LJK acquisition. These costs were expensed as incurred in selling, general and administrative expenses in 2019. 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 LJK acquisition had taken place on the first day of Fiscal 2018 would be as follows (dollars in thousands, except per share amounts):
|  | 2019 |  | 2018
Revenues |  | $ | 297,362 |  |  | $ | 290,195 |
Gross profit |  | $ | 83,730 |  |  | $ | 79,927 |
Net income |  | $ | 14,089 |  |  | $ | 18,329 |
Net income per share: |  |  |  |  |
Basic |  | $ | 1.38 |  |  | $ | 1.91 |
Diluted |  | $ | 1.36 |  |  | $ | 1.87 |
Pro forma net income includes amortization of identifiable intangible assets, interest expense on additional borrowings on the Term Loan at a rate of 4.0% and tax expense of the pro forma adjustments at an effective tax rate of 24.5% for Fiscal 2019 and 18.0% for Fiscal 2018. The pro forma information presented includes adjustments that will have a continuing impact on the operations that management considers non-recurring in assessing LJK's historical performances. Amounts set forth above are not necessarily indicative of the results that would have been attained had the LJK acquisition taken place on the first day of Fiscal 2018 or of the results that may be achieved by the combined enterprise in the future.

X
- 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
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration