Corporate Resource Services, Inc.

CIK:0000943110|SEC Filings

Accumulated Other Comprehensive Income

9 Months Ended

Oct. 03, 2014

Note 10 – Accumulated Other Comprehensive Income

Beginning with our acquisition of FlexPlus in the United Kingdom in Fiscal Year 2013, we became subject to the guidance ASC 830 - Foreign Currency Matters. This requires us to translate our assets and liabilities from the functional currency, British Pounds, to reporting currency, which is United States Dollars. These translation adjustments are recorded as other comprehensive income and aggregated in accumulated other comprehensive income.

The components of accumulated other comprehensive income are (in thousands):

October 3, 2014 (unaudited)	Gross		Taxes		Net
Translation adjustments		104		-		104
Accumulated other comprehensive income		104		-		104

January 3, 2014	Gross		Taxes		Net
Translation adjustments		74		-		74
Accumulated other comprehensive income		74		-		74

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Oct. 03, 2014	Oct. 04, 2013
Cash flows from operating activities:
Net income (loss)	$ (285)	$ 2,580
Adjustments to reconcile net (loss) income to net cash from operating activities:
Depreciation and amortization	2,919	1,211
Bad debt expense	1,722	394
Non-cash stock-based compensation	3,619	2,864
Accrued interest on outstanding loans	291
Change in fair value of contingent consideration	782	120
Loss on equity investment	1,421	504
Deferred tax liabilities	296	(1,044)
Deferred rent	28	(137)
Changes in operating assets and liabilities, net of effect of acquisitions:
Trade accounts receivable including unbilled receivables	(26,737)	(8,102)
Prepaid expenses	(178)	(1,273)
Other assets	78	79
Accrued wages and related obligations - due related party	9,470	5,508
Accounts payable and accrued liabilities	1,410	1,237
Net cash provided by (used in) operating activities	(5,164)	3,941
Cash flows from investing activities:
Purchase of property and equipment	(841)	(665)
Equity investment	(5,856)	(1,280)
Cash paid for business combinations	(6,000)	(828)
Net cash provided by (used in) investing activities	(12,697)	(2,773)
Cash flows from financing activities:
Principal payments on long-term debt	(2,993)	(1,582)
Short term borrowings	(1,600)	650
Loan payable - related party, net	21,939	2,772
Proceeds from (payments on) asset-based facility, net	882	(2,333)
Payments on contingent consideration	(152)	(251)
Net cash provided by (used in) financing activities	18,076	(744)
Foreign currency exchange rate effect on cash flows	(91)
Net change in cash	124	424
Cash at beginning of period	32	154
Cash at end of period	156	578
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	4,011	3,529
Cash paid for taxes	84	24
Non-cash investing and financing activities:
Financing on acquisitions	6,519
Assets acquired for issuance of debt		$ 72

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Oct. 03, 2014	Jan. 03, 2014
Current assets
Cash	$ 156	$ 32
Accounts receivable, net of allowance for doubtful accounts of $3,928 and $2,291 as of October 3, 2014 and January 3, 2014, respectively	113,217	96,739
Unbilled receivables	19,351	10,815
Related party receivable	1,536	2,335
Other current assets	1,398	1,220
Total current assets	135,658	111,141
Equity investment	6,389	1,952
Property and equipment, net	1,282	1,285
Intangible assets, net	15,402	8,546
Goodwill	24,710	19,682
Other assets	442	520
Total assets	183,883	143,126
Current liabilities
Accounts payable and accrued liabilities	8,987	7,578
Accrued wages and related obligations - due to related party	18,919	9,449
Borrowings under receivables-based credit facility	74,342	73,460
Long-term debt - related party	21,888	748
Loan payable		1,600
Deferred income tax liability	310
Contingent consideration	615	658
Long-term debt	4,718	2,159
Total current liabilities	129,779	95,652
Long-term debt, net of current portion	2,320	1,069
Long-term debt - related party, net of current portion	15,000	15,000
Contingent consideration, net of current portion	4,397	2,615
Deferred income tax liabilities	2,085	1,880
Other liabilities	64	36
Total liabilities	153,645	116,252
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.0001 par value, 5,000 shares authorized; zero shares issued and outstanding
Common stock, $0.0001 par value, 225,000 shares authorized and 158,015 shares issued and outstanding as of October 3, 2014 and January 3, 2014	16	16
Additional paid-in capital	35,379	31,760
Retained earnings (accumulated deficit)	(5,261)	(4,976)
Accumulated other comprehensive income	104	74
Total stockholders' equity	30,238	26,874
Total liabilities and stockholders' equity	$ 183,883	$ 143,126