TBI TrueBlue Inc

TrueBlue (NYSE:TBI) today announced its second quarter results for 2024.

Second Quarter 2024 Financial Highlights

• Revenue of $396 million compared to $476 million in the prior year period
• Net loss of $105 million compared to net loss of $7 million in the prior year period
  • Includes non-cash goodwill and intangible asset impairment charge of $45 million after tax and a related valuation allowance charge of $55 million on deferred tax assets
  • SG&A expense reduced by 20 percent to $97 million compared to $121 million in the prior year period
  • Adjusted EBITDA1 of $1 million and adjusted net loss of $11 million
• Zero debt, cash of $26 million and $132 million of borrowing availability
• $7 million in share repurchases with $38 million remaining under authorization

Commentary

“We are managing through the current market cycle with discipline and agility as economic uncertainty and client caution continue to weigh on the temporary staffing industry,” said Taryn Owen, President and CEO of TrueBlue. “Our teams are staying highly engaged with clients to address their immediate and evolving needs. While current market dynamics are challenging, evolving workforce needs and structural staffing shortages will create compelling opportunities for our business that align with our competitive strengths.”

“We have made significant progress advancing our strategic priorities which will enable us to capture market share, deliver more sustainable growth and enhance our long-term profitability,” continued Ms. Owen. “Our commitment to digital transformation with the continued rollout of our new, proprietary JobStack app, along with expansion in attractive end markets such as skilled trades and healthcare will fuel our growth as demand rebounds. Additionally, simplifying our organizational structure and taking decisive cost actions not only aligns TrueBlue with the current environment, but ensures we are even better positioned to capitalize on growth opportunities and expand our profitability as conditions improve.”

Results

Second quarter revenue was $396 million, a decrease of 17 percent compared to revenue of $476 million in the second quarter of 2023. Net loss per diluted share was $3.45 compared to net loss per diluted share of $0.24 in the prior year period. Adjusted net loss1 per diluted share was $0.35 compared to adjusted net income per diluted share of $0.11 in the prior year period.

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 second quarter 2024 results on a webcast at 2:00 p.m. PT (5:00 p.m. ET), today, Monday, Aug. 5, 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 and 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 U.S. 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)

 

 

13 weeks ended

 

26 weeks ended

(in thousands, except per share data)

Jun 30, 2024

 

Jun 25, 2023

 

Jun 30, 2024

 

Jun 25, 2023

Revenue from services

$

396,230

 

 

$

475,588

 

 

$

799,083

 

 

$

940,876

 

Cost of services

 

291,807

 

 

 

345,097

 

 

 

595,274

 

 

 

687,272

 

Gross profit

 

104,423

 

 

 

130,491

 

 

 

203,809

 

 

 

253,604

 

Selling, general and administrative expense

 

97,018

 

 

 

121,282

 

 

 

203,955

 

 

 

243,927

 

Depreciation and amortization

 

7,691

 

 

 

6,280

 

 

 

15,649

 

 

 

12,691

 

Goodwill and intangible asset impairment charge

 

59,674

 

 

 

9,485

 

 

 

59,674

 

 

 

9,485

 

Loss from operations

 

(59,960

)

 

 

(6,556

)

 

 

(75,469

)

 

 

(12,499

)

Interest and other income (expense), net

 

1,741

 

 

 

578

 

 

 

3,340

 

 

 

1,592

 

Loss before tax expense

 

(58,219

)

 

 

(5,978

)

 

 

(72,129

)

 

 

(10,907

)

Income tax expense

 

46,491

 

 

 

1,345

 

 

 

34,279

 

 

 

705

 

Net loss

$

(104,710

)

 

$

(7,323

)

 

$

(106,408

)

 

$

(11,612

)

 

 

 

 

 

 

 

 

Net loss per common share:

 

 

 

 

 

 

 

Basic

$

(3.45

)

 

$

(0.24

)

 

$

(3.46

)

 

$

(0.37

)

Diluted

$

(3.45

)

 

$

(0.24

)

 

$

(3.46

)

 

$

(0.37

)

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

 

30,349

 

 

 

30,966

 

 

 

30,725

 

 

 

31,629

 

Diluted

 

30,349

 

 

 

30,966

 

 

 

30,725

 

 

 

31,629

 

TRUEBLUE, INC.

SUMMARY CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(in thousands)

Jun 30, 2024

 

Dec 31, 2023

ASSETS

 

 

 

Cash and cash equivalents

$

26,400

 

$

61,885

Accounts receivable, net

 

231,064

 

 

252,538

Other current assets

 

43,180

 

 

40,570

Total current assets

 

300,644

 

 

354,993

Property and equipment, net

 

92,100

 

 

104,906

Restricted cash, cash equivalents and investments

 

183,352

 

 

192,985

Goodwill and intangible assets, net

 

31,941

 

 

94,639

Other assets, net

 

115,656

 

 

151,860

Total assets

$

723,693

 

$

899,383

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Accounts payable and other accrued expenses

$

36,107

 

$

56,401

Accrued wages and benefits

 

65,774

 

 

80,120

Current portion of workers’ compensation claims reserve

 

38,728

 

 

44,866

Other current liabilities

 

17,380

 

 

22,712

Total current liabilities

 

157,989

 

 

204,099

Workers’ compensation claims reserve, less current portion

 

139,251

 

 

151,649

Other long-term liabilities

 

88,689

 

 

85,762

Total liabilities

 

385,929

 

 

441,510

Shareholders’ equity

 

337,764

 

 

457,873

Total liabilities and shareholders’ equity

$

723,693

 

$

899,383

TRUEBLUE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

26 weeks ended

(in thousands)

Jun 30, 2024

 

Jun 25, 2023

Cash flows from operating activities:

 

 

 

Net loss

$

(106,408

)

 

$

(11,612

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

Depreciation and amortization

 

15,649

 

 

 

12,691

 

Goodwill and intangible asset impairment charge

 

59,674

 

 

 

9,485

 

Provision for credit losses

 

630

 

 

 

2,408

 

Stock-based compensation

 

4,844

 

 

 

5,294

 

Deferred income taxes

 

33,997

 

 

 

(22

)

Non-cash lease expense

 

6,200

 

 

 

6,249

 

Other operating activities

 

(3,118

)

 

 

(1,099

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

21,061

 

 

 

43,915

 

Income taxes receivable and payable

 

430

 

 

 

(3,039

)

Other assets

 

8,246

 

 

 

15,053

 

Accounts payable and other accrued expenses

 

(18,849

)

 

 

(26,968

)

Accrued wages and benefits

 

(14,753

)

 

 

(9,277

)

Workers’ compensation claims reserve

 

(18,537

)

 

 

(19,899

)

Operating lease liabilities

 

(6,139

)

 

 

(6,295

)

Other liabilities

 

1,011

 

 

 

3,980

 

Net cash (used in) provided by operating activities

 

(16,062

)

 

 

20,864

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(13,279

)

 

 

(15,738

)

Proceeds from business divestiture, net

 

2,928

 

 

 

—

 

Payments for company-owned life insurance

 

(4,000

)

 

 

(2,347

)

Purchases of restricted held-to-maturity investments

 

(10,180

)

 

 

(9,955

)

Maturities of restricted held-to-maturity investments

 

19,220

 

 

 

15,613

 

Net cash used in investing activities

 

(5,311

)

 

 

(12,427

)

Cash flows from financing activities:

 

 

 

Purchases and retirement of common stock

 

(16,986

)

 

 

(34,200

)

Net proceeds from employee stock purchase plans

 

417

 

 

 

509

 

Common stock repurchases for taxes upon vesting of restricted stock

 

(2,143

)

 

 

(2,514

)

Other

 

(1,807

)

 

 

(91

)

Net cash used in financing activities

 

(20,519

)

 

 

(36,296

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents

 

(557

)

 

 

(20

)

Net change in cash, cash equivalents, and restricted cash and cash equivalents

 

(42,449

)

 

 

(27,879

)

Cash, cash equivalents and restricted cash and cash equivalents, beginning of period

 

99,306

 

 

 

135,631

 

Cash, cash equivalents and restricted cash and cash equivalents, end of period

$

56,857

 

 

$

107,752

 

TRUEBLUE, INC.

SEGMENT DATA

(Unaudited)

 

 

13 weeks ended

(in thousands)

Jun 30, 2024

 

Jun 25, 2023

Revenue from services:

 

 

 

PeopleReady

$

223,409

 

 

$

275,318

 

PeopleScout

 

41,070

 

 

 

59,710

 

PeopleManagement

 

131,751

 

 

 

140,560

 

Total company

$

396,230

 

 

$

475,588

 

 

 

 

 

Segment profit (1):

 

 

 

PeopleReady

$

394

 

 

$

8,158

 

PeopleScout

 

3,430

 

 

 

8,817

 

PeopleManagement

 

3,395

 

 

 

2,250

 

Total segment profit

 

7,219

 

 

 

19,225

 

Corporate unallocated expense

 

(6,150

)

 

 

(8,215

)

Total company Adjusted EBITDA (2)

 

1,069

 

 

 

11,010

 

Third-party processing fees for hiring tax credits (3)

 

(90

)

 

 

(110

)

Amortization of software as a service assets (4)

 

(1,452

)

 

 

(952

)

Goodwill and intangible asset impairment charge

 

(59,674

)

 

 

(9,485

)

PeopleReady technology upgrade costs (5)

 

(39

)

 

 

(174

)

COVID-19 government subsidies, net (6)

 

9,696

 

 

 

—

 

Other adjustments, net (7)

 

(1,779

)

 

 

(565

)

EBITDA (2)

 

(52,269

)

 

 

(276

)

Depreciation and amortization

 

(7,691

)

 

 

(6,280

)

Interest and other income (expense), net

 

1,741

 

 

 

578

 

Loss before tax expense

 

(58,219

)

 

 

(5,978

)

Income tax expense

 

(46,491

)

 

 

(1,345

)

Net loss

$

(104,710

)

 

$

(7,323

)

(1)

 

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.

(2)

 

See the Non-GAAP Financial Measures table on the next page for definitions of EBITDA and Adjusted EBITDA.

(3)

 

These third-party processing fees are associated with generating hiring tax credits.

(4)

 

Amortization of software as a service assets is reported in selling, general and administrative expense.

(5)

 

Costs associated with upgrading legacy PeopleReady technology.

(6)

 

COVID-19 government subsidies net of related fees ($2.9 million in cost of services and $6.8 million in selling, general and administrative expense).

(7)

 

Other adjustments for the 13 weeks ended June 30, 2024 and June 25, 2023 primarily include workforce reduction costs of $1.5 million ($0.2 million in cost of services and $1.3 million in selling, general and administrative expense) and $0.6 million ($0.2 million in cost of services and $0.4 million in selling, general and administrative expense), respectively.

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 (loss) and

Adjusted net income (loss) per diluted share

 

Net loss and net loss per diluted share, excluding:

– amortization of intangibles,

– goodwill and intangible asset impairment charge,

– PeopleReady technology upgrade costs,

– COVID-19 government subsidies, net,

– other adjustments, net, and

– tax effect of the adjustments and deferred tax asset valuation allowance.

 

 

– 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 loss:

– income tax expense,

– 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,

– COVID-19 government subsidies, net and

– 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,

– COVID-19 government subsidies, net and

– 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 LOSS TO ADJUSTED NET INCOME (LOSS) AND ADJUSTED NET INCOME (LOSS) PER DILUTED SHARE (Unaudited)

 

13 weeks ended

(in thousands, except for per share data)

Jun 30, 2024

 

Jun 25, 2023

Net loss

$

(104,710

)

 

$

(7,323

)

Amortization of intangible assets

 

1,369

 

 

 

1,274

 

Goodwill and intangible asset impairment charge

 

59,674

 

 

 

9,485

 

PeopleReady technology upgrade costs (1)

 

39

 

 

 

174

 

COVID-19 government subsidies, net (2)

 

(9,696

)

 

 

—

 

Other adjustments, net (3)

 

1,779

 

 

 

565

 

Tax effect of adjustments and deferred tax asset valuation allowance (4)

 

40,855

 

 

 

(677

)

Adjusted net income (loss)

$

(10,690

)

 

$

3,498

 

 

 

 

 

Adjusted net income (loss) per diluted share

$

(0.35

)

 

$

0.11

 

 

 

 

 

Diluted weighted average shares outstanding

 

30,349

 

 

 

31,185

 

 

 

 

 

Margin / % of revenue:

 

 

 

Net loss

 

(26.4

)%

 

 

(1.5

)%

Adjusted net income (loss)

 

(2.7

)%

 

 

0.7

%

2. RECONCILIATION OF U.S. GAAP NET LOSS TO EBITDA AND ADJUSTED EBITDA (Unaudited)

 

13 weeks ended

(in thousands)

Jun 30, 2024

 

Jun 25, 2023

Net loss

$

(104,710

)

 

$

(7,323

)

Income tax expense

 

46,491

 

 

 

1,345

 

Interest and other (income) expense, net

 

(1,741

)

 

 

(578

)

Depreciation and amortization

 

7,691

 

 

 

6,280

 

EBITDA

 

(52,269

)

 

 

(276

)

Third-party processing fees for hiring tax credits (5)

 

90

 

 

 

110

 

Amortization of software as a service assets (6)

 

1,452

 

 

 

952

 

Goodwill and intangible asset impairment charge

 

59,674

 

 

 

9,485

 

PeopleReady technology upgrade costs (1)

 

39

 

 

 

174

 

COVID-19 government subsidies, net (2)

 

(9,696

)

 

 

—

 

Other adjustments, net (3)

 

1,779

 

 

 

565

 

Adjusted EBITDA

$

1,069

 

 

$

11,010

 

 

 

 

 

Margin / % of revenue:

 

 

 

Net loss

 

(26.4

)%

 

 

(1.5

)%

Adjusted EBITDA

 

0.3

%

 

 

2.3

%

3 RECONCILIATION OF U.S. GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSE TO ADJUSTED SG&A EXPENSE (Unaudited)

 

13 weeks ended

(in thousands)

Jun 30, 2024

 

Jun 25, 2023

Selling, general and administrative expense

$

97,018

 

 

$

121,282

 

Third-party processing fees for hiring tax credits (5)

 

(90

)

 

 

(110

)

Amortization of software as a service assets (6)

 

(1,452

)

 

 

(952

)

PeopleReady technology upgrade costs (1)

 

(39

)

 

 

(174

)

COVID-19 government subsidies, net (2)

 

6,803

 

 

 

—

 

Other adjustments, net (3)

 

(1,608

)

 

 

(390

)

Adjusted SG&A expense

$

100,632

 

 

$

119,656

 

 

 

 

 

% of revenue:

 

 

 

Selling, general and administrative expense

 

24.5

%

 

 

25.5

%

Adjusted SG&A expense

 

25.4

%

 

 

25.2

%

(1)

 

Costs associated with upgrading legacy PeopleReady technology.

(2)

 

COVID-19 government subsidies net of related fees ($2.9 million in cost of services and $6.8 million in selling, general and administrative expense).

(3)

 

Other adjustments for the 13 weeks ended June 30, 2024 and June 25, 2023 primarily include workforce reduction costs of $1.5 million ($0.2 million in cost of services and $1.3 million in selling, general and administrative expense) and $0.6 million ($0.2 million in cost of services and $0.4 million in selling, general and administrative expense), respectively.

(4)

 

The tax effect includes the application of our statutory rate of 26% to all taxable / deductible adjustments. The tax effect for the thirteen weeks ended June 30, 2024 also includes the $55 million valuation allowance recorded against the U.S. federal and state deferred tax assets. 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.

(5)

 

These third-party processing fees are associated with generating hiring tax credits.

(6)

 

Amortization of software as a service assets is reported in selling, general and administrative expense.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240805280092/en/

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