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TrueBlue Reports First Quarter 2021 Results

04/26/2021

Broad-based revenue recovery underway across all segments

TACOMA, Wash.--(BUSINESS WIRE)-- TrueBlue (NYSE:TBI) today announced its first quarter results for 2021.

First quarter revenue was $459 million, a decrease of 7 percent compared to revenue of $494 million in the first quarter of 2020. Net income per diluted share was $0.20 compared to net loss per diluted share of $4.04 in the first quarter of 2020. Included in the results for the first quarter of 2020 is a non-cash goodwill and intangible asset impairment charge of $175 million, which is equivalent to $152 million after tax or $4.08 per diluted share. First quarter adjusted net income1 per diluted share was $0.25 compared to adjusted net loss per diluted share of $0.01 in the first quarter of 2020.

“We had a strong start to the year driven by revenue recovery across all segments and disciplined cost management,” said Patrick Beharelle, CEO of TrueBlue. “We are seeing encouraging new business wins and recovery of existing client volumes, including some of the markets that were hit the hardest last year. Our focus on efficiently managing costs while ensuring we continue to invest in sales resources and digital strategies has allowed us to accelerate our strategic priorities and emerge stronger as the economy begins to shift back to growth.

“Our efforts are producing competitive differentiation and in the case of PeopleReady, JobStack heavy client users continue to show higher revenue growth compared to the rest of the customer base,” Mr. Beharelle continued. “We are excited about our market positioning and ability to increase market share.”

2021 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 first quarter 2021 results on a webcast at 2:30 p.m. PT (5:30 p.m. ET), today, Monday, Apr. 26, 2021. The webcast can be accessed on TrueBlue’s website: www.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 2020, TrueBlue connected approximately 490,000 people with work. Its PeopleReady segment offers on-demand, industrial staffing, PeopleManagement offers contingent, on-site industrial staffing and commercial driver services, and PeopleScout offers recruitment process outsourcing (RPO) and managed service provider (MSP) solutions to a wide variety of industries. Learn more at www.trueblue.com.

1 See the financial statements accompanying the release and the company’s website for more information on non-GAAP terms.

Forward-looking statements

This document contains forward-looking statements relating to our plans and expectations, 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, (2) the continued impact of COVID-19 and related economic impact and governmental response, (3) our ability to access sufficient capital to finance our operations, including our ability to comply with covenants contained in our revolving credit facility, (4) our ability to attract and retain clients, (5) our ability to attract sufficient qualified candidates and employees to meet the needs of our clients, (6) our ability to maintain profit margins, (7) new laws, regulations, and government incentives that could affect our operations or financial results, (8) our ability to successfully execute on business strategies to further digitalize our business model, and (9) any reduction or change in tax credits we utilize, including the Work Opportunity Tax Credit. 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)

 

 

13 weeks ended

(in thousands, except per share data)

Mar 28, 2021

 

Mar 29, 2020

Revenue from services

$

458,706

 

 

$

494,252

 

Cost of services

 

348,132

 

 

 

368,093

 

Gross profit

 

110,574

 

 

 

126,159

 

Selling, general and administrative expense

 

97,401

 

 

 

117,381

 

Depreciation and amortization

 

6,962

 

 

 

9,094

 

Goodwill and intangible asset impairment charge

 

 

 

 

175,189

 

Income (loss) from operations

 

6,211

 

 

 

(175,505

)

Interest expense and other income, net

 

575

 

 

 

263

 

Income (loss) before tax expense (benefit)

 

6,786

 

 

 

(175,242

)

Income tax benefit

 

(112

)

 

 

(24,748

)

Net income (loss)

$

6,898

 

 

$

(150,494

)

 

 

 

 

Net income (loss) per common share:

 

 

 

Basic

$

0.20

 

 

$

(4.04

)

Diluted

$

0.20

 

 

$

(4.04

)

 

 

 

 

Weighted average shares outstanding:

 

 

 

Basic

 

34,674

 

 

 

37,255

 

Diluted

 

35,066

 

 

 

37,255

 

TRUEBLUE, INC.

SUMMARY CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(in thousands)

Mar 28, 2021

 

Dec 27, 2020

ASSETS

 

 

 

Cash and cash equivalents

$

88,006

 

 

$

62,507

 

Accounts receivable, net

260,108

 

 

278,343

 

Other current assets

35,897

 

 

38,035

 

Total current assets

384,011

 

 

378,885

 

Property and equipment, net

76,109

 

 

71,734

 

Restricted cash and investments

231,178

 

 

240,534

 

Goodwill and intangible assets, net

122,038

 

 

123,802

 

Other assets, net

166,101

 

 

165,622

 

Total assets

$

979,437

 

 

$

980,577

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Accounts payable and other accrued expenses

$

48,168

 

 

$

58,447

 

Accrued wages and benefits

126,906

 

 

122,657

 

Current portion of workers’ compensation claims reserve

62,005

 

 

66,007

 

Other current liabilities

21,410

 

 

21,856

 

Total current liabilities

258,489

 

 

268,967

 

Workers’ compensation claims reserve, less current portion

191,989

 

 

189,486

 

Other long-term liabilities

83,332

 

 

84,934

 

Total liabilities

533,810

 

 

543,387

 

Shareholders’ equity

445,627

 

 

437,190

 

Total liabilities and shareholders’ equity

$

979,437

 

 

$

980,577

 

TRUEBLUE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

13 weeks ended

(in thousands)

Mar 28, 2021

 

Mar 29, 2020

Cash flows from operating activities:

 

 

 

Net income (loss)

$

6,898

 

 

$

(150,494

)

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

 

 

 

Depreciation and amortization

 

6,962

 

 

 

9,094

 

Goodwill and intangible asset impairment charge

 

 

 

 

175,189

 

Allowance for credit losses

 

207

 

 

 

3,289

 

Stock-based compensation

 

3,343

 

 

 

1,508

 

Deferred income taxes

 

(5,002

)

 

 

(23,432

)

Non-cash lease expense

 

3,920

 

 

 

3,763

 

Other operating activities

 

(438

)

 

 

5,375

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

18,025

 

 

 

45,407

 

Income tax receivable

 

4,910

 

 

 

435

 

Operating lease right-of-use-asset

 

3,501

 

 

 

 

Other assets

 

(4,578

)

 

 

5,958

 

Accounts payable and other accrued expenses

 

(9,633

)

 

 

(28,443

)

Accrued wages and benefits

 

4,249

 

 

 

(11,733

)

Workers’ compensation claims reserve

 

(1,499

)

 

 

(2,163

)

Operating lease liabilities

 

(3,320

)

 

 

(3,811

)

Other liabilities

 

338

 

 

 

(2,334

)

Net cash provided by operating activities

 

27,883

 

 

 

27,608

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(10,003

)

 

 

(7,028

)

Purchases of restricted available-for-sale investments

 

(14

)

 

 

(1,149

)

Sales of restricted available-for-sale investments

 

452

 

 

 

1,269

 

Maturities of restricted held-to-maturity investments

 

6,371

 

 

 

6,168

 

Net cash used in investing activities

 

(3,194

)

 

 

(740

)

Cash flows from financing activities:

 

 

 

Purchases and retirement of common stock

 

 

 

 

(52,348

)

Net proceeds from employee stock purchase plans

 

255

 

 

 

323

 

Common stock repurchases for taxes upon vesting of restricted stock

 

(2,555

)

 

 

(1,792

)

Net change in revolving credit facility

 

 

 

 

256,400

 

Other

 

(94

)

 

 

(508

)

Net cash provided by (used in) financing activities

 

(2,394

)

 

 

202,075

 

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

 

262

 

 

 

(1,738

)

Net change in cash, cash equivalents, and restricted cash

 

22,557

 

 

 

227,205

 

Cash, cash equivalents and restricted cash, beginning of period

 

118,612

 

 

 

92,371

 

Cash, cash equivalents and restricted cash, end of period

$

141,169

 

 

$

319,576

 

TRUEBLUE, INC.

SEGMENT DATA

(Unaudited)

 

 

13 weeks ended

(in thousands)

Mar 28, 2021

 

Mar 29, 2020

Revenue from services:

 

 

 

PeopleReady

$

260,392

 

 

$

299,294

 

PeopleManagement

 

151,754

 

 

 

141,614

 

PeopleScout

 

46,560

 

 

 

53,344

 

Total company

$

458,706

 

 

$

494,252

 

 

 

 

 

Segment profit (loss) (1):

 

 

 

PeopleReady

$

11,860

 

 

$

7,655

 

PeopleManagement

 

3,116

 

 

 

(314

)

PeopleScout

 

4,037

 

 

 

2,508

 

Total segment profit

 

19,013

 

 

 

9,849

 

Corporate unallocated expense

 

(5,619

)

 

 

(5,209

)

Total company Adjusted EBITDA (2)

 

13,394

 

 

 

4,640

 

Work Opportunity Tax Credit processing fees (3)

 

(135

)

 

 

(135

)

Amortization of software as a service assets (4)

 

(673

)

 

 

(552

)

Goodwill and intangible asset impairment charge

 

 

 

 

(175,189

)

Workforce reduction costs (5)

 

(70

)

 

 

(1,308

)

COVID-19 government subsidies

 

1,743

 

 

 

 

Other adjustments, net (6)

 

(1,086

)

 

 

6,133

 

EBITDA (2)

 

13,173

 

 

 

(166,411

)

Depreciation and amortization

 

(6,962

)

 

 

(9,094

)

Interest expense and other income, net

 

575

 

 

 

263

 

Income (loss) before tax benefit

 

6,786

 

 

 

(175,242

)

Income tax benefit

 

112

 

 

 

24,748

 

Net income (loss)

$

6,898

 

 

$

(150,494

)

(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 the Work Opportunity Tax Credits, which are designed to encourage employers to hire workers from certain targeted groups with higher than average unemployment rates.

 

(4)

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

 

(5)

Workforce reduction costs for the 13 weeks ended March 31, 2020 were primarily due to employee reductions as part of our cost management actions in response to COVID-19.

 

(6)

Other adjustments for the 13 weeks ended March 28, 2021 primarily include lease expense of $0.8 million incurred during the build-out phase of our Chicago office and implementation costs for cloud-based systems of $0.1 million. Other adjustments for the 13 weeks ended March 31, 2020 primarily include implementation costs for cloud-based systems of $0.5 million, offset by a $6.3 million benefit from a reduction in expected costs to comply with the Affordable Care Act.

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

EBITDA and Adjusted EBITDA

EBITDA excludes from net income (loss):

- interest expense and other income, net,

- income taxes, and

- depreciation and amortization.

 

Adjusted EBITDA, further excludes:

- Work Opportunity Tax Credit third-party processing fees,

- amortization of software as a service assets,

- goodwill and intangible asset impairment charge,

- workforce reductions costs,

- COVID-19 government subsidies, 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 net income (loss) and Adjusted net income (loss) per diluted share

Net income (loss) and net income (loss) per diluted share, excluding:

- amortization of intangibles of acquired businesses,

- amortization of software as a service assets,

- goodwill and intangible asset impairment charge,

- workforce reduction costs,

- COVID-19 government subsidies

- other adjustments, net,

- tax effect of each adjustment to U.S. GAAP net income (loss), and

- adjustment of income taxes to our normalized long-term expected tax rate for periods prior to Q2 2020.

 

 

- 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.

1.

RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE

(Unaudited)

 

 

13 weeks ended

(in thousands, except for per share data)

Mar 28, 2021

 

Mar 29, 2020

Net income (loss)

$

6,898

 

 

 

$

(150,494

)

Amortization of intangible assets of acquired businesses

1,885

 

 

 

4,004

 

Amortization of software as a service assets (1)

673

 

 

 

552

 

Goodwill and intangible asset impairment charge

 

 

 

175,189

 

Workforce reduction costs (2)

70

 

 

 

1,308

 

COVID-19 government subsidies

(1,743

)

 

 

 

Other adjustments, net (3)

1,086

 

 

 

(6,133

)

Tax effect of adjustments to net income (loss) (4)

33

 

 

 

(20,990

)

Adjustment of income taxes to normalized effective rate (5)

 

 

 

(3,719

)

Adjusted net income (loss)

$

8,902

 

 

 

$

(283

)

 

 

 

 

Adjusted net income (loss) per diluted share

$

0.25

 

 

 

$

(0.01

)

 

 

 

 

Diluted weighted average shares outstanding

35,066

 

 

 

37,255

 

2.

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

(Unaudited)

 

 

13 weeks ended

(in thousands)

Mar 28, 2021

 

Mar 29, 2020

Net income (loss)

$

6,898

 

 

$

(150,494)

 

Income tax benefit

(112)

 

 

(24,748)

 

Interest expense and other (income), net

(575)

 

 

(263)

 

Depreciation and amortization

6,962

 

 

9,094

 

EBITDA

13,173

 

 

(166,411)

 

Work Opportunity Tax Credit processing fees (6)

135

 

 

135

 

Amortization of software as a service assets (1)

673

 

 

552

 

Goodwill and intangible asset impairment charge

 

 

175,189

 

Workforce reduction costs (2)

70

 

 

1,308

 

COVID-19 government subsidies

(1,743)

 

 

 

Other adjustments, net (3)

1,086

 

 

(6,133)

 

Adjusted EBITDA

$

13,394

 

 

$

4,640

 

(1)

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

 

 

(2)

Workforce reduction costs for the 13 weeks ended March 31, 2020 were primarily due to employee reductions as part of our cost management actions in response to COVID-19.

 

 

(3)

Other adjustments for the 13 weeks ended March 28, 2021 primarily include lease expense of $0.8 million incurred during the build-out phase of our Chicago office and implementation costs for cloud-based systems of $0.1 million. Other adjustments for the 13 weeks ended March 31, 2020 primarily include implementation costs for cloud-based systems of $0.5 million, offset by a $6.3 million benefit from a reduction in expected costs to comply with the Affordable Care Act.

 

 

(4)

Total tax effect of each of the adjustments to U.S. GAAP net income (loss) using the effective income tax rate benefit of 2 percent for Q1 2021 and the expected long-term ongoing income tax rate expense of 12 percent for Q1 2020.

 

 

(5)

Adjustment of the effective income tax rate to the expected long-term ongoing rate of 12 percent for Q1 2020. Beginning in Q2 2020, we decided not to adjust our GAAP tax rate in our adjusted net income (loss) calculation until our profitability rises to a more substantial level.

 

 

(6)

These third-party processing fees are associated with generating the Work Opportunity Tax Credits, which are designed to encourage employers to hire workers from certain targeted groups with higher than average unemployment rates.

 

Derrek Gafford, Executive Vice President and CFO
253-680-8214

Source: TrueBlue

IR CONTACT

Derrek Gafford

Chief Financial Officer

Phone: 1-253-680-8214

InvestorRelations@TrueBlue.com

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About TrueBlue

TrueBlue (NYSE: TBI) is a leading provider of specialized workforce solutions that help clients achieve business growth and improve productivity. In 2020, TrueBlue connected approximately 490,000 people with work. Its PeopleReady segment offers on-demand, industrial staffing, PeopleManagement offers contingent, on-site industrial staffing and commercial driver services, and PeopleScout offers recruitment process outsourcing (RPO) and managed service provider (MSP) solutions to a wide variety of industries.