What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-03-11 compared with 2020-03-12 · 62 added, 59 removed, 103 unchanged (54% of the section changed)

1 unchanged sentence

Stock Performance Graph

The following graph compares, through December 29, 2019 , the cumulative total return of the Company’s common stock, a peer group index of certain publicly traded employment services companies, and the Russell 2000.

The following graph compares, through December 27, 2020, the cumulative total return of the Company’s common stock, a peer group index of certain publicly traded workforce solutions companies, and the Russell 2000.

The graph assumes the investment of $100 at the beginning of the period depicted in the chart and reinvestment of all dividends.

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The following graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.

This peer group index represents the cumulative total return of the Company and the following corporations providing field talent or permanent employment services:

Periodically, we review companies within our peer group and decide if we need to make any changes.

The new peer group index represents the cumulative total return of the Company and the following corporations providing field talent or permanent employment workforce solutions:

GEE Group, Mastech Digital, Resources Connection, Inc., and Staffing 360 Solutions.

The old peer group index represents:

GEE Group, Mastech Digital, RCM Technologies, and Staffing 360 Solutions.

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September 29, 2019 $ 20.00 $ 16.00

April 1, 2018

As of February 5, 2020 , the last reported sales price for our common stock was $20.39 per share.

As of February 5, 2020 , there were approximately 4,789 holders of record of our common stock.

June 30, 2019 $ 23.99 $ 15.91

March 30, 2019 $ 28.01 $ 19.25

As of January 15, 2021, the last reported sales price for our common stock was $13.64 per share.

As of January 15, 2021, there were approximately 3,892 holders of record of our common stock.

The board of directors has declared or paid the following cash dividends during the fiscal years ended 2020, 2019, and 2018:

Declared Date

Distribution Date

Dividend per Share

January 26, 2017

February 13, 2017

February 20, 2017

April 20, 2017

July 20, 2017

July 31, 2017

August 7, 2017

October 23, 2017

November 2, 2017

November 7, 2017

February 1, 2018

February 12, 2018

February 20, 2018

July 25, 2018

August 6, 2018

August 13, 2018

October 26, 2018

November 5, 2018

November 13, 2018

February 6, 2019

February 19, 2019

February 26, 2019

April 25, 2019

July 31, 2019

August 12, 2019

August 19, 2019

October 29, 2019

November 11, 2019

November 18, 2019

On January 30, 2020 , the Company's board of directors declared a cash dividend in the amount of $0.30 per share of common stock to be paid on February 18, 2020 to all shareholders of record as of the close of business on February 10, 2020 .

Declared Date Record Date Distribution Date Dividend per Share Amount Paid

February 1, 2018 February 12, 2018 February 20, 2018 $0.25 $ 2,189,844

May 10, 2018 May 21, 2018 May 29, 2018 $0.30 2,638,232

July 25, 2018 August 6, 2018 August 13, 2018 $0.30 3,026,709

October 26, 2018 November 5, 2018 November 13, 2018 $0.30 3,067,124

Total $ 10,921,909

February 6, 2019 February 19, 2019 February 26, 2019 $0.30 $ 3,068,847

April 25, 2019 May 6, 2019 May 13, 2019 $0.30 3,068,974

July 31, 2019 August 12, 2019 August 19, 2019 $0.30 3,071,862

October 29, 2019 November 11, 2019 November 18, 2019 $0.30 3,072,659

Total $ 12,282,342

January 30, 2020 February 10, 2020 February 18, 2020 $0.30 $ 3,092,771

May 7, 2020 May 20, 2020 May 27, 2020 $0.05 515,349

August 5, 2020 August 18, 2020 August 25, 2020 $0.05 515,349

November 5, 2020 November 16, 2020 November 23, 2020 $0.10 1,031,679

Total $ 5,155,148

On February 3, 2021, the Company's board of directors declared a cash dividend in the amount of $0.10 per share of common stock to be paid on February 26, 2021 to all shareholders of record as of the close of business on February 18, 2021.

Prior to December 19, 2014, we had not paid cash dividends on our common stock.

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The following equity compensation plan information is provided as of December 27, 2020:

Plan Category

Number of Securities to be

Plan Category Number of Securities to be

Issued upon Exercise of

Outstanding Options,

Warrants and Rights (a)

Weighted-average

Warrants and Rights (a) Weighted-average

Exercise Price of

Outstanding Options,

Warrants and Rights

Number of Securities

Warrants and Rights Number of Securities

Remaining Available for

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in Column (a))

Equity Compensation Plans Approved by Security Holders (2013 Long-Term Incentive Plan)

Equity Compensation Plans Approved by Security Holders

2013 Long-Term Incentive Plan 692,279 $16.63 396,460

2020 Employee Stock Purchase Plan — $0.00 250,000

Total 692,279 $16.63 646,460

A description of the equity compensation plan is incorporated by reference to Note 14 in the Notes to Consolidated Financial Statements included in Item 8 in this Annual Report on Form 10-K.

Recent Sales of Unregistered Securities

In December 2019, we issued 47,403 shares of common stock in a private placement for a value of $1.0 million at the closing of the LJK acquisition.

During 2019, we issued 20,059 shares of common stock in a cashless exercise of 28,734 outstanding warrants.

The warrants had an original weighted average exercise price of $6.56.

The foregoing issuances of securities were exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

There were no unregistered securities during the fiscal year ended 2020.

Share Repurchases

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Fiscal Years Ended

2020 December 29,

2019 December 30,

2018 December 31,

2017 December 25,

(dollars in thousands, except per share data)

Statement of Operations Data:

Revenues $ 277,891 $ 294,314 $ 286,863 $ 272,600 $ 253,852

Gross profit $ 76,220 $ 80,681 $ 76,595 $ 68,402 $ 60,073

Selling, general and administrative expenses $ 60,558 $ 56,199 $ 51,066 $ 44,576 $ 37,971

(Gain) Loss on contingent consideration

Gain on contingent consideration $ (76) $ — $ (3,775) $ (226) $ (167)

Impairment losses $ 7,240 $ — $ — $ — $ —

Depreciation and amortization $ 4,960 $ 4,820 $ 5,044 $ 6,292 $ 6,733

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Interest expense, net $ 1,584 $ 1,569 $ 2,850 $ 3,253 $ 3,962

Change in fair value of put option

Income before income taxes $ 1,954 $ 17,552 $ 21,410 $ 14,507 $ 11,170

Income tax expense $ 513 $ 4,305 $ 3,860 $ 8,659 (1)

Net income $ 1,441 $ 13,247 $ 17,550 $ 5,848 $ 6,882

Net Income Per Share:

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Adjusted EBITDA (2)

$ 18,689 $ 26,590 $ 27,106 $ 24,737 $ 22,643

Same Day EBITDA (2)

$ 18,689 $ 26,590 $ 27,106 $ 24,216 $ 22,643

Cash dividends declared per common share $ 0.50 $ 1.20 $ 1.15 $ 1.00 $ 1.00

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Working capital $ 25,385 $ 27,030 $ 20,555 $ 16,320 $ 19,185

Total assets $ 130,278 $ 115,586 $ 100,269 $ 104,633 $ 81,214

Total outstanding borrowings, net $ 34,634 $ 27,494 $ 20,089 $ 44,123 $ 23,618

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(1) Includes a $3.3 million re-measurement of the net deferred tax assets as a result of the TCJA.

We present Adjusted EBITDA and Same Day EBITDA (defined below), measures that are not in accordance with generally accepted accounting principles (“non-GAAP”), in this Annual Report on Form 10-K to provide investors with a supplemental measure of our operating performance.

We believe that Adjusted EBITDA and Same Day EBITDA are useful performance measures and are used by us to facilitate comparisons of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under generally accepted accounting principles (“GAAP”) can provide alone.

Our board and management also use Adjusted EBITDA and Same Day EBITDA as some of the primary methods for planning and forecasting overall expected performance and for evaluating on a quarterly and annual basis actual results against such expectations, and as a performance evaluation

metric in determining achievement of certain compensation programs and plans for our management.

In addition, the financial covenants in our credit agreements are based on EBITDA as defined in the credit agreements.

We define “Adjusted EBITDA” as earnings before interest expense, income taxes, depreciation and amortization expense, transaction fees and other non-capital information technology project expenses (“IT roadmap”) and certain non-cash expenses such as share-based compensation expense.

(2) We present Adjusted EBITDA and Same Day EBITDA (defined below), measures that are not in accordance with accounting principles generally accepted in the United States of America (“non-GAAP”), in this Annual Report on Form 10-K to provide investors with a supplemental measure of our operating performance.

We believe that Adjusted EBITDA and Same Day EBITDA are useful performance measures and are used by us to facilitate comparisons of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under accounting principles generally accepted in the United States of America (“GAAP”) can provide alone.

determining achievement of certain compensation programs and plans for our management.

In addition, the financial covenants in our credit agreement are based on EBITDA as defined in the credit agreement.

We define “Adjusted EBITDA” as earnings before interest expense, income taxes, depreciation and amortization expense, impairment losses, transaction fees and other non-capital information technology project (“IT roadmap”) and certain non-cash expenses such as share-based compensation expense.

Omitting interest, taxes and the other items provides a financial measure that facilitates comparisons of our results of operations with those of companies having different capital structures.

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Adjusted EBITDA should not be considered as an alternative to net income for the periods indicated as a measure of our performance.

Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

We define “Same Day EBITDA” as Adjusted EBITDA on a fifty-two week fiscal year basis.

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Fiscal Years Ended

2020 December 29,

2019 December 30,

2018 December 31,

2017 December 25,

(dollars in thousands)

Net income $ 1,441 $ 13,247 $ 17,550 $ 5,848 $ 6,882

Interest expense, net 1,584 1,569 2,850 3,253 3,962

1 unchanged sentence

Loss on extinguishment of debt — 541 — — 404

Change in fair value of put option

Operating income 3,538 19,662 24,260 17,760 15,536

Depreciation and amortization 4,960 4,820 5,044 6,292 6,733

(Gain) Loss on contingent consideration

Gain on contingent consideration (76) — (3,775) (226) (167)

Impairment losses 7,240 (2)

Share-based compensation 849 953 1,069 447 314

Transaction fees 615 434 508 464 227

IT roadmap 1,563 721 — — —

Adjusted EBITDA 18,689 26,590 27,106 24,737 22,643

2 unchanged sentences

(1) Includes a $3.3 million re-measurement of the net deferred tax assets as a result of the TCJA.

(2) In the professional segment, we recognized a $3.7 million trade name impairment loss and a $3.5 million client partner list impairment loss during the thirteen week period ended June 28, 2020.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity