|12 Months Ended|
Oct. 29, 2017
|Restructuring and Related Activities [Abstract]|
Impairment of Net Assets
During fiscal 2015, in conjunction with the initiative to exit certain non-core operations, the telephone directory publishing and printing business in Uruguay met the criteria to be classified as held for sale. As part of the required evaluation under the held for sale guidance, the Company determined that the approximate fair value less costs to sell the operations was significantly lower than the carrying value of the net assets. Consequently, the net assets of the business of $2.8 million were fully impaired and were recorded as an impairment charge. On July 31, 2015, the Company completed the sale of our telephone directory publishing and printing business in Uruguay to affiliates of FCR Media Group.
An impairment charge of $0.7 million in fiscal 2015 was recognized as a result of the required evaluation under the held for sale guidance related to the staffing reporting unit in Uruguay (“Lakyfor, S.A.”).
Impairment of Property, Equipment and Software
In an effort to reduce operating costs, the Company evaluated the efficiency of its current business delivery model, supply chain and back office support functions in light of existing and ongoing business requirements. The implementation of additional technology tools is expected to provide operating leverage and efficiencies. As a result of a system-wide upgrade to its operational and financial systems, the Company identified previously purchased software modules that will no longer be used and incurred impairment charges of $0.3 million and $0.4 million during the second quarter of fiscal 2017 and the fourth quarter of fiscal 2016, respectively.
During the third quarter of fiscal 2015, it was determined that $1.9 million of previously capitalized internally developed software within the North American Staffing segment was impaired as it was no longer expected to provide future value in light of the anticipated technology upgrade.
Impairment of Goodwill
The Company performs its annual impairment test for goodwill during the second quarter of the fiscal year and when a triggering event occurs between annual impairment tests. For the fiscal 2017 test performed in the second quarter, the Company elected to bypass the qualitative assessment and prepared a Step 1 analysis. Our Step 1 analysis used significant assumptions including expected revenue and expense growth rates, forecasted capital expenditures, working capital levels and a discount rate of 13%. Under the market-based approach significant assumptions included relevant comparable company earnings multiples including the determination of whether a premium or discount should be applied to those comparables. During the second quarter of fiscal 2017, it was determined that no adjustment to the carrying value of goodwill was required as our Step 1 analysis resulted in the fair value of the reporting unit exceeding its carrying value. There were no triggering events or changes in circumstances since the annual goodwill impairment assessment that caused the Company to perform an interim impairment assessment.
During fiscal 2017 and 2016, no adjustment to the carrying value of goodwill was required. Impairment charges in fiscal 2015 resulted from our goodwill related to our staffing reporting unit in Uruguay.
The following represents the change in the carrying amount of goodwill during each fiscal year (in thousands):
Restructuring and Severance Charges
During fiscal 2016, the Company implemented a cost reduction plan and incurred restructuring and severance costs primarily resulting from a reduction in workforce, facility consolidation and lease termination costs. The total costs since inception through fiscal 2017 are approximately $7.1 million consisting of $1.5 million in North American Staffing, $0.7 million in International Staffing, $0.4 million in Technology Outsourcing Services and Solutions and $4.5 million in Corporate and Other.
The Company incurred total restructuring and severance costs of approximately $1.4 million, $5.8 million and $3.6 million for fiscal 2017, 2016 and 2015, respectively.
The following table presents the restructuring and severance costs for the twelve months ended October 29, 2017 and October 30, 2016 (in thousands):
Accrued restructuring and severance costs are included in Accrued compensation and Accrued insurance and other in the Consolidated Balance Sheets. Activity for the fiscal years ended October 29, 2017 and October 30, 2016 are summarized as follows (in thousands):
The remaining balance as of October 29, 2017 of $0.3 million, primarily related to Corporate & Other, is expected to be paid through the second quarter of fiscal 2018.
The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.
Reference 1: http://www.xbrl.org/2003/role/presentationRef