Strong performance in renewable energy and
disciplined cost management delivered results at high end of
company outlook
TrueBlue (NYSE:TBI) today announced its fourth quarter and
full-year results for 2023.
Fourth Quarter 2023 Financial Highlights
- Revenue decreased 12 percent to $492 million compared to prior
year period
- Fiscal fourth quarter consisted of 14 weeks versus 13 weeks in
the fiscal fourth quarter of 2022
- Revenue decreased 15 percent on a comparable 13-week basis
- Net loss of $3 million
- Adjusted EBITDA1 of $5 million and adjusted net income of $3
million
- Zero debt, cash of $62 million and $86 million of borrowing
availability
- Renewal of 5-year credit facility effective February 9, 2024
increased borrowing availability to approximately $140 million
Commentary
“We are managing through this market cycle with agility and
discipline,” said Taryn Owen, President and CEO of TrueBlue. “While
general market demand remains soft with hiring trends impacted by
reduced business spend, we are capitalizing on attractive
verticals, such as renewable energy, and maintaining a high level
of engagement with clients to ensure we are well positioned as
conditions improve.”
“As we enter 2024, we are laser-focused on leveraging our
inherent strengths to capture market share and managing our cost
structure with discipline to enhance our long-term profitability,”
continued Ms. Owen. “Key components to this strategy include
advancement of our digital transformation, expansion in high-growth
and under-penetrated end markets, and enhanced focus through a
simplified organizational structure. These priorities position us
to drive efficiencies and secure opportunities to deliver
long-term, profitable growth.”
Results
Fourth quarter revenue was $492 million, a decrease of 12
percent compared to revenue of $558 million in the fourth quarter
of 2022. Net loss per diluted share was $0.08 compared to net
income per diluted share of $0.21 in the prior year period.
Adjusted net income1 per diluted share was $0.08 compared to
adjusted net income per diluted share of $0.39 in the prior year
period.
Full-year revenue was $1.9 billion, a decrease of 15 percent
compared to revenue of $2.3 billion in 2022. Net loss per diluted
share was $0.45 compared to net income per diluted share of $1.86
in 2022. Adjusted net income per diluted share was $0.28 compared
to adjusted net income per diluted share of $2.36 in 2022.
2024 Outlook
TrueBlue is providing certain forward-looking information to
help investors form their own estimates, which can be found in the
quarterly earnings presentation filed today.
Management will discuss fourth quarter 2023 results on a webcast
at 2:00 p.m. PT (5:00 p.m. ET), today, Wednesday, Feb. 21,
2024. The webcast can be accessed on the Investor Relations
section of the TrueBlue website: investor.trueblue.com.
About TrueBlue
TrueBlue (NYSE: TBI) is a leading provider of specialized
workforce solutions that help clients achieve business growth and
improve productivity. In 2023, TrueBlue served approximately 67,000
clients and connected approximately 464,000 people with work. Its
PeopleReady segment offers on-demand, industrial staffing,
PeopleScout offers recruitment process outsourcing (RPO) and
managed service provider (MSP) solutions, and PeopleManagement
offers contingent, on-site industrial staffing and commercial
driver services. Learn more at www.trueblue.com.
1 Refer to the financial statements accompanying this release
for more information regarding non-GAAP terms.
Forward-looking statements and non-GAAP financial
measures
This document contains forward-looking statements relating to
our plans and expectations including, without limitation,
statements regarding the future performance and operations of our
business, expectations regarding stabilization in demand, and
expected growth from our digital investments, all of which are
subject to risks and uncertainties. Such statements are based on
management’s expectations and assumptions as of the date of this
release and involve many risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
in our forward-looking statements including: (1) national and
global economic conditions which can be negatively impacted by
factors such as rising interest rates, inflation, political
instability, epidemics and global trade uncertainty, (2) our
ability to maintain profit margins, (3) our ability to successfully
execute on business strategies and further digitalize our business
model, (4) our ability to attract sufficient qualified candidates
and employees to meet the needs of our clients, (5) our ability to
attract and retain clients, (6) our ability to access sufficient
capital to finance our operations, including our ability to comply
with covenants contained in our revolving credit facility, (7) new
laws, regulations, and government incentives that could affect our
operations or financial results, (8) any reduction or change in tax
credits we utilize, including the Work Opportunity Tax Credit, and
(9) the timing and amount of common stock repurchases, if any,
which will be determined at management’s discretion and depend upon
several factors, including market and business conditions, the
trading price of our common stock and the nature of other
investment opportunities. Other information regarding factors that
could affect our results is included in our Securities Exchange
Commission (SEC) filings, including the company’s most recent
reports on Forms 10-K and 10-Q, copies of which may be obtained by
visiting our website at www.trueblue.com under the Investor
Relations section or the SEC’s website at www.sec.gov. We assume no
obligation to update or revise any forward-looking statement,
whether as a result of new information, future events, or
otherwise, except as required by law. Any other references to
future financial estimates are included for informational purposes
only and subject to risk factors discussed in our most recent
filings with the SEC.
In addition, we use several non-GAAP financial measures when
presenting our financial results in this document. Please refer to
the reconciliations between our GAAP and non-GAAP financial
measures in the appendix to this document and on our website at
www.trueblue.com under the Investor Relations section for
additional information on both current and historical periods. The
presentation of these non-GAAP financial measures is used to
enhance the understanding of certain aspects of our financial
performance. It is not meant to be considered in isolation,
superior to, or as a substitute for the directly comparable
financial measures prepared in accordance with U.S. GAAP, and may
not be comparable to similarly titled measures of other
companies.
TRUEBLUE, INC.
SUMMARY CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
Q4 2023
Q4 2022
2023
2022
14 weeks ended (1)
13 weeks ended
53 weeks ended (1)
52 weeks ended
(in thousands, except per share
data)
Dec 31, 2023
Dec 25, 2022
Dec 31, 2023
Dec 25, 2022
Revenue from services
$
492,171
$
557,695
$
1,906,243
$
2,254,184
Cost of services
363,889
409,846
1,400,184
1,652,040
Gross profit
128,282
147,849
506,059
602,144
Selling, general and administrative
expense
129,961
133,733
494,603
500,686
Depreciation and amortization
6,946
7,258
25,821
29,273
Goodwill and intangible asset impairment
charge
—
—
9,485
—
Income (loss) from operations
(8,625
)
6,858
(23,850
)
72,185
Interest and other income (expense),
net
1,223
133
3,205
1,231
Income (loss) before tax expense
(benefit)
(7,402
)
6,991
(20,645
)
73,416
Income tax expense (benefit)
(4,851
)
(54
)
(6,472
)
11,143
Net income (loss)
$
(2,551
)
$
7,045
$
(14,173
)
$
62,273
Net (loss) income per common
share:
Basic
$
(0.08
)
$
0.22
$
(0.45
)
$
1.89
Diluted
$
(0.08
)
$
0.21
$
(0.45
)
$
1.86
Weighted average shares
outstanding:
Basic
31,079
32,486
31,317
32,889
Diluted
31,079
33,014
31,317
33,447
(1)
Our fiscal period ends on the
Sunday closest to the last day of Dec. In fiscal years consisting
of 53 weeks, the final quarter consists of 14 weeks, while in
fiscal years consisting of 52 weeks, all quarters consist of 13
weeks.
TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(in thousands)
Dec 31, 2023
Dec 25, 2022
ASSETS
Cash and cash equivalents
$
61,885
$
72,054
Accounts receivable, net
252,538
314,275
Other current assets
40,570
43,883
Total current assets
354,993
430,212
Property and equipment, net
104,906
95,823
Restricted cash and investments
192,985
213,734
Goodwill and intangible assets, net
94,639
109,989
Other assets, net
151,860
169,650
Total assets
$
899,383
$
1,019,408
LIABILITIES AND SHAREHOLDERS’
EQUITY
Accounts payable and other accrued
expenses
$
56,401
$
76,644
Accrued wages and benefits
80,120
92,237
Current portion of workers’ compensation
claims reserve
44,866
50,005
Other current liabilities
22,712
23,989
Total current liabilities
204,099
242,875
Workers’ compensation claims reserve, less
current portion
151,649
201,005
Other long-term liabilities
85,762
79,213
Total liabilities
441,510
523,093
Shareholders’ equity
457,873
496,315
Total liabilities and shareholders’
equity
$
899,383
$
1,019,408
TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
53 weeks ended
(in thousands)
Dec 31, 2023
Dec 25, 2022
Cash flows from operating
activities:
Net income (loss)
$
(14,173
)
$
62,273
Adjustments to reconcile net income
(loss) to net cash provided by operating activities:
Depreciation and amortization
25,821
29,273
Goodwill and intangible asset impairment
charge
9,485
—
Provision for credit losses
4,972
4,462
Stock-based compensation
13,907
9,687
Deferred income taxes
(9,902
)
3,933
Non-cash lease expense
12,591
12,920
Other operating activities
(3,831
)
7,862
Changes in operating assets and
liabilities:
Accounts receivable
56,761
34,765
Income taxes receivable and payable
(1,317
)
(2,665
)
Operating lease right-of-use-asset
—
118
Other assets
31,366
(16,142
)
Accounts payable and other accrued
expenses
(19,210
)
(1,501
)
Accrued wages and benefits
(12,113
)
(7,938
)
Workers’ compensation claims reserve
(54,495
)
(5,184
)
Operating lease liabilities
(12,796
)
(13,052
)
Other liabilities
7,688
1,692
Net cash provided by operating
activities
34,754
120,503
Cash flows from investing
activities:
Capital expenditures
(31,276
)
(30,626
)
Payments for company-owned life
insurance
(2,347
)
—
Proceeds from company-owned life
insurance
1,662
—
Purchases of restricted held-to-maturity
investments
(34,110
)
(18,031
)
Maturities of restricted held-to-maturity
investments
33,749
27,712
Net cash used in investing
activities
(32,322
)
(20,945
)
Cash flows from financing
activities:
Purchases and retirement of common
stock
(34,178
)
(60,939
)
Net proceeds from employee stock purchase
plans
856
980
Common stock repurchases for taxes upon
vesting of restricted stock
(4,161
)
(4,480
)
Other
(100
)
(253
)
Net cash used in financing
activities
(37,583
)
(64,692
)
Change in cash, cash equivalents and
restricted cash reclassified to assets held-for-sale
(300
)
—
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(874
)
(2,420
)
Net change in cash, cash equivalents,
and restricted cash
(36,325
)
32,446
Cash, cash equivalents and restricted
cash, beginning of period
135,631
103,185
Cash, cash equivalents and restricted
cash, end of period
$
99,306
$
135,631
TRUEBLUE, INC.
SEGMENT DATA
(Unaudited)
Q4 2023
Q4 2022
2023
2022
14 weeks ended (1)
13 weeks ended
53 weeks ended (1)
52 weeks ended
(in thousands)
Dec 31, 2023
Dec 25, 2022
Dec 31, 2023
Dec 25, 2022
Revenue from services:
PeopleReady
$
285,185
$
314,580
$
1,096,318
$
1,272,852
PeopleScout
47,204
68,676
229,334
317,518
PeopleManagement
159,782
174,439
580,591
663,814
Total company
$
492,171
$
557,695
$
1,906,243
$
2,254,184
Segment profit (2):
PeopleReady
$
7,920
$
22,467
$
26,606
$
87,743
PeopleScout
2,910
2,499
26,922
44,771
PeopleManagement
2,781
4,141
6,963
15,811
Total segment profit
13,611
29,107
60,491
148,325
Corporate unallocated expense
(8,462
)
(8,101
)
(31,507
)
(31,326
)
Total company Adjusted EBITDA
(3)
5,149
21,006
28,984
116,999
Third-party processing fees for hiring tax
credits (4)
67
(108
)
(253
)
(594
)
Amortization of software as a service
assets (5)
(1,233
)
(810
)
(4,117
)
(2,985
)
Goodwill and intangible asset impairment
charge
—
—
(9,485
)
—
PeopleReady technology upgrade costs
(6)
(440
)
(1,779
)
(1,342
)
(7,935
)
Executive leadership transition (7)
(3,296
)
—
(5,788
)
1,422
Other adjustments, net (8)
(1,926
)
(4,193
)
(6,028
)
(5,449
)
EBITDA (3)
(1,679
)
14,116
1,971
101,458
Depreciation and amortization
(6,946
)
(7,258
)
(25,821
)
(29,273
)
Interest and other income (expense),
net
1,223
133
3,205
1,231
Income (loss) before tax benefit
(expense)
(7,402
)
6,991
(20,645
)
73,416
Income tax benefit (expense)
4,851
54
6,472
(11,143
)
Net income (loss)
$
(2,551
)
$
7,045
$
(14,173
)
$
62,273
(1)
Our fiscal period ends on the
Sunday closest to the last day of Dec. In fiscal years consisting
of 53 weeks, the final quarter consists of 14 weeks, while in
fiscal years consisting of 52 weeks, all quarters consist of 13
weeks.
(2)
We evaluate performance based on
segment revenue and segment profit. Segment profit includes
revenue, related cost of services, and ongoing operating expenses
directly attributable to the reportable segment. Segment profit
excludes depreciation and amortization expense, unallocated
corporate general and administrative expense, interest expense,
other income, income taxes, and other adjustments not considered to
be ongoing.
(3)
See the Non-GAAP Financial
Measures table on the next page for definitions of EBITDA and
Adjusted EBITDA.
(4)
These third-party processing fees
are associated with generating hiring tax credits.
(5)
Amortization of software as a
service assets is reported in selling, general and administrative
expense.
(6)
Costs associated with upgrading
legacy PeopleReady technology.
(7)
Cost associated with our CEO and
CFO transitions, including accelerated vesting of stock awards and
other separation related payments.
(8)
Other adjustments for the 14 and
53 weeks ended December 31, 2023 primarily include workforce
reduction costs of $1.8 million and $5.1 million, respectively. The
53 weeks ended December 31, 2023 also includes adjustments to
COVID-19 government subsidies of $0.5 million. Other adjustments
for the 13 and 52 weeks ended December 25, 2022 primarily include
accelerated software costs of $4.2 million. The 52 weeks ended
December 25, 2022 also includes costs of $1.1 million incurred
while transitioning to a new third party administrator for workers’
compensation.
TRUEBLUE, INC. NON-GAAP FINANCIAL
MEASURES AND NON-GAAP RECONCILIATIONS
In addition to financial measures presented in accordance with
U.S. GAAP, we monitor certain non-GAAP key financial measures. The
presentation of these non-GAAP financial measures is used to
enhance the understanding of certain aspects of our financial
performance. It is not meant to be considered in isolation,
superior to, or as a substitute for the directly comparable
financial measures prepared in accordance with U.S. GAAP, and may
not be comparable to similarly titled measures of other
companies.
Non-GAAP measure
Definition
Purpose of adjusted
measures
Adjusted net income and
Adjusted net income per diluted
share
Net income (loss) and net income (loss)
per diluted share, excluding:
– amortization of intangibles,
– amortization of software as a service
assets,
– goodwill and intangible asset impairment
charge,
– accelerated depreciation,
– PeopleReady technology upgrade
costs,
– executive leadership transition,
– other adjustments, net, and
– tax effect of the adjustments to U.S.
GAAP.
– Enhances comparability on a consistent
basis and provides investors with useful insight into the
underlying trends of the business.
– Used by management to assess performance
and effectiveness of our business strategies.
– Provides a measure, among others, used
in the determination of incentive compensation for management.
EBITDA and
Adjusted EBITDA
EBITDA excludes from net income
(loss):
– income tax expense (benefit),
– interest and other (income) expense,
net, and
– depreciation and amortization.
Adjusted EBITDA, further excludes:
– third-party processing fees for hiring
tax credits,
– amortization of software as a service
assets,
– goodwill and intangible asset impairment
charge,
– PeopleReady technology upgrade
costs,
– executive leadership transition,
– other adjustments, net.
– Enhances comparability on a consistent
basis and provides investors with useful insight into the
underlying trends of the business.
– Used by management to assess performance
and effectiveness of our business strategies.
– Provides a measure, among others, used
in the determination of incentive compensation for management.
Adjusted SG&A expense
Selling, general and administrative
expense excluding:
– third-party processing fees for hiring
tax credits,
– amortization of software as a service
assets,
– PeopleReady technology upgrade
costs,
– executive leadership transition,
– other adjustments, net.
– Enhances comparability on a consistent
basis and provides investors with useful insight into the
underlying trends of the business.
1.
RECONCILIATION OF U.S. GAAP NET INCOME
(LOSS) TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED
SHARE
(Unaudited)
Q4 2023
Q4 2022
2023
2022
14 weeks ended (1)
13 weeks ended
53 weeks ended (1)
52 weeks ended
(in thousands, except for per share
data)
Dec 31, 2023
Dec 25, 2022
Dec 31, 2023
Dec 25, 2022
Net income (loss)
$
(2,551
)
$
7,045
$
(14,173
)
$
62,273
Amortization of intangible assets
1,355
1,265
5,175
5,746
Amortization of software as a service
assets (2)
—
810
—
2,985
Goodwill and intangible asset impairment
charge
—
—
9,485
—
Accelerated depreciation (3)
—
—
—
1,658
PeopleReady technology upgrade costs
(4)
440
1,779
1,342
7,935
Executive leadership transition costs
(5)
3,296
—
5,788
(1,422
)
Other adjustments, net (6)
1,926
4,193
6,028
5,449
Tax effect of adjustments to net income
(loss) (7)
(1,824
)
(2,092
)
(4,920
)
(5,811
)
Adjusted net income
$
2,642
$
13,000
$
8,725
$
78,813
Adjusted net income per diluted
share
$
0.08
$
0.39
$
0.28
$
2.36
Diluted weighted average shares
outstanding
31,450
33,014
31,590
33,447
Margin / % of revenue:
Net income (loss)
(0.5
) %
1.3
%
(0.7
) %
2.8
%
Adjusted net income
0.5
%
2.3
%
0.5
%
3.5
%
2.
RECONCILIATION OF U.S. GAAP NET INCOME
(LOSS) TO EBITDA AND ADJUSTED EBITDA
(Unaudited)
Q4 2023
Q4 2022
2023
2022
14 weeks ended (1)
13 weeks ended
53 weeks ended (1)
52 weeks ended
(in thousands)
Dec 31, 2023
Dec 25, 2022
Dec 31, 2023
Dec 25, 2022
Net income (loss)
$
(2,551
)
$
7,045
$
(14,173
)
$
62,273
Income tax expense (benefit)
(4,851
)
(54
)
(6,472
)
11,143
Interest and other (income) expense,
net
(1,223
)
(133
)
(3,205
)
(1,231
)
Depreciation and amortization
6,946
7,258
25,821
29,273
EBITDA
(1,679
)
14,116
1,971
101,458
Third-party processing fees for hiring tax
credits (8)
(67
)
108
253
594
Amortization of software as a service
assets (2)
1,233
810
4,117
2,985
Goodwill and intangible asset impairment
charge
—
—
9,485
—
PeopleReady technology upgrade costs
(4)
440
1,779
1,342
7,935
Executive leadership transition costs
(5)
3,296
—
5,788
(1,422
)
Other adjustments, net (6)
1,926
4,193
6,028
5,449
Adjusted EBITDA
$
5,149
$
21,006
$
28,984
$
116,999
Margin / % of revenue:
Net income (loss)
(0.5
) %
1.3
%
(0.7
) %
2.8
%
Adjusted EBITDA
1.0
%
3.8
%
1.5
%
5.2
%
3.
RECONCILIATION OF U.S. GAAP SELLING,
GENERAL AND ADMINISTRATIVE EXPENSE TO ADJUSTED SG&A
EXPENSE
(Unaudited)
Q4 2023
Q4 2022
2023
2022
14 weeks ended (1)
13 weeks ended
53 weeks ended (1)
52 weeks ended
(in thousands)
Dec 31, 2023
Dec 25, 2022
Dec 31, 2023
Dec 25, 2022
Selling, general and administrative
expense
$
129,961
$
133,733
$
494,603
$
500,686
Third-party processing fees for hiring tax
credits (8)
67
(108
)
(253
)
(594
)
Amortization of software as a service
assets (2)
(1,233
)
(810
)
(4,117
)
(2,985
)
PeopleReady technology upgrade costs
(4)
(440
)
(1,779
)
(1,342
)
(7,935
)
Executive leadership transition costs
(5)
(3,296
)
—
(5,788
)
1,422
Other adjustments, net (6)
(1,246
)
(4,193
)
(4,145
)
(5,449
)
Adjusted SG&A expense
$
123,813
$
126,843
$
478,958
$
485,145
% of revenue:
Selling, general and administrative
expense
26.4
%
24.0
%
25.9
%
22.2
%
Adjusted SG&A expense
25.2
%
22.7
%
25.1
%
21.5
%
(1)
Our fiscal period ends on the
Sunday closest to the last day of December. In fiscal years
consisting of 53 weeks, the final quarter consists of 14 weeks,
while in fiscal years consisting of 52 weeks, all quarters consist
of 13 weeks.
(2)
Amortization of software as a
service assets is reported in selling, general and administrative
expense. Note, amortization of software as a service assets was
included as an adjustment to net income during transitory periods
ending with fiscal 2022 and is only considered an adjustment to
EBITDA going forward to be consistent with the treatment of
depreciation and amortization.
(3)
Accelerated depreciation for the
existing systems being replaced by the upgraded PeopleReady
technology platform.
(4)
Costs associated with upgrading
legacy PeopleReady technology.
(5)
Cost associated with our CEO and
CFO transitions, including accelerated vesting of stock awards and
other separation related payments.
(6)
Other adjustments for the 14 and
53 weeks ended December 31, 2023 primarily include workforce
reduction costs of $1.8 million and $5.1 million, respectively. The
53 weeks ended December 31, 2023 also includes adjustments to
COVID-19 government subsidies of $0.5 million. Other adjustments
for the 13 and 52 weeks ended December 25, 2022 primarily include
accelerated software costs of $4.2 million. The 52 weeks ended
December 25, 2022 also includes costs of $1.1 million incurred
while transitioning to a new third party administrator for workers’
compensation.
(7)
Tax effect of the adjustments to
U.S. GAAP net income (loss). The tax effect includes the
application of our statutory rate of 26% to all taxable /
deductible adjustments. Note, prior periods were reported using the
effective rate for the respective period and have been recast to
conform to the current presentation for comparability. Please refer
to the reconciliations on the financial results page under the
investor relations section of our website for additional
information on comparable historical periods.
(8)
These third-party processing fees
are associated with generating hiring tax credits.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240221160802/en/
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