SEGMENT INFORMATION

3 Months Ended

Apr. 02, 2017

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

Commencing in the fourth quarter of 2016, we changed our internal reporting structure to better align our operations with customer needs and how our chief operating decision maker, our Chief Executive Officer, currently evaluates financial results to determine resource allocation and assess performance. As a result of this change, our former Staffing Services reportable segment has been separated into two reportable segments, PeopleReady and PeopleManagement, and our former Managed Services reportable segment has been renamed PeopleScout. In addition, we changed our methodology for allocating certain corporate costs to our segments, which decreased our corporate unallocated expenses. The prior year amounts have been recast to reflect this change for consistency purposes.

Our service lines, which are our operating segments, and our reportable segments are described below:

Our PeopleReady reportable segment provides blue-collar contingent staffing through the PeopleReady service line. PeopleReady provides on-demand and skilled labor in the retail, manufacturing, warehousing, logistics, energy, construction, hospitality, and others industries.

Our PeopleManagement reportable segment provides primarily on-premise contingent staffing and on-premise management of those contingent staffing services through the following operating segments, which we aggregated into one reportable segment in accordance with U.S. GAAP:

• Staff Management | SMX: Exclusive recruitment and on-premise management of a facility’s contingent industrial workforce;

• SIMOS Insourcing Solutions: On-premise management and recruitment of warehouse/distribution operations;

• Centerline Drivers: Recruitment and management of temporary and dedicated drivers to the transportation and distribution industries; and

• PlaneTechs: Skilled mechanics and technicians, including on-premise management thereof, to the aviation and transportation industries.

Our PeopleScout reportable segment provides high-volume permanent employee recruitment process outsourcing and management of outsourced labor service providers through the following operating segments, which we aggregated into one reportable segment in accordance with U.S. GAAP:

• PeopleScout: Outsourced recruitment of permanent employees on behalf of clients; and

• PeopleScout MSP: Management of multiple third party staffing vendors on behalf of clients.

We have two primary measures of segment performance: revenue from services and segment earnings before interest, taxes, depreciation and amortization (“Segment EBITDA”). Segment EBITDA includes net sales to third parties, related cost of sales, and selling, general and administrative expenses directly attributable to the reportable segment together with certain allocated corporate general and administrative expenses. Segment EBITDA excludes unallocated corporate general and administrative expenses.

The following table presents a reconciliation of segment revenue from services to total company revenue (in thousands):

	Thirteen weeks ended
	April 2, 2017		March 25, 2016
Revenue from services (1)
PeopleReady	$	332,624	$	356,010
PeopleManagement	191,686		246,427
PeopleScout	43,934		43,543
Total Company	$	568,244	$	645,980

(1) There were no material revenue transactions between our reportable segments.

The following table presents a reconciliation of Segment EBITDA to income before tax expense (in thousands):

	Thirteen weeks ended
	April 2, 2017			March 25, 2016
Segment EBITDA (1)
PeopleReady	$	9,722		$	11,555
PeopleManagement	5,533			6,353
PeopleScout	8,665			8,010
	23,920			25,918
Corporate unallocated	(6,335		)	(6,030		)
Depreciation and amortization	(11,174		)	(11,289		)
Income from operations	6,411			8,599
Interest and other income (expense), net	74			(1,019		)
Income before tax expense	$	6,485		$	7,580

(1) Segment EBITDA was previously referred to as segment income from operations. This change had no impact on the amounts reported.

Asset information by reportable segment is not presented since we do not manage our segments on a balance sheet basis.