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TrueBlue Reports Fourth Quarter and Full-Year 2021 Results

02/02/2022

Fourth quarter results exceed pre-pandemic 2019 levels

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

Fourth quarter revenue was $622 million, an increase of 20 percent compared to revenue of $519 million in the fourth quarter of 2020 and an increase of 5 percent compared to revenue of $591 million in the fourth quarter of 20191. Net income per diluted share was $0.57 compared to net income per diluted share of $0.23 in the fourth quarters of 2020 and 2019. Fourth quarter adjusted net income2 per diluted share was $0.69 compared to adjusted net income per diluted share of $0.33 in the fourth quarter of 2020 and $0.39 in the fourth quarter of 2019.

Full-year revenue was $2.2 billion, an increase of 18 percent compared to 2020 and a decline of 8 percent compared to 2019. Net income per diluted share was $1.74 compared to net loss per diluted share of $4.01 in 2020 and net income per diluted share of $1.61 in 2019. Adjusted net incomeper diluted share was $2.00 compared to adjusted net income per diluted share of $0.43 in 2020 and $2.05 in 2019.

“We are pleased to announce that fourth quarter results surpassed the comparable 2019 period,” said Patrick Beharelle, CEO of TrueBlue. “Our digital investments are differentiating us from the competition and are helping us capitalize on the rising demand for our services as businesses turn to flexible solutions to solve their workforce challenges. Numerous operating enhancements made over the last two years have lowered the cost of delivering our services and increased our agility in responding to customer needs.

“The fourth quarter marked the third consecutive quarter of double-digit revenue growth,” Mr. Beharelle continued. “PeopleReady’s revenue growth accelerated throughout the quarter driven by improving worker supply and strong results within the retail sector, while same customer demand and new customer wins continued to produce impressive PeopleScout results. Momentum from our finish to the year has TrueBlue well-positioned in 2022 and beyond.”

The company also announced that its Board of Directors authorized $100 million of share repurchases which the company intends to complete over the next three years. “Our balance sheet is in great shape and the business is producing strong cash flow,” said Derrek Gafford, CFO of TrueBlue. “This authorization reflects confidence in our growth prospects and ability to create long-term value for our shareholders.”

2022 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 and full-year 2021 results on a webcast at 2:30 p.m. PT (5:30 p.m. ET), today, Wednesday, Feb. 2, 2022. 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 2021, TrueBlue connected approximately 615,000 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 Refer to our previously filed reports on Forms 10-K and 8-K for the 2019 consolidated statements of operations.

2 Refer to the financial statements accompanying this release and the company’s website for more information regarding non-GAAP terms.

Forward-looking statements

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, expected growth from our digital investments, and the expected amount and timing of any share repurchases, 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 attract sufficient qualified candidates and employees to meet the needs of our clients, (4) our ability to attract and retain clients, (5) our ability to maintain profit margins, (6) our ability to successfully execute on business strategies to further digitalize our business model, (7) 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, (8) new laws, regulations, and government incentives that could affect our operations or financial results, (9) our ability to access sufficient capital to finance our operations, including our ability to comply with covenants contained in our revolving credit facility, and (10) 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

 

52 weeks ended

(in thousands, except per share data)

Dec 26, 2021

 

Dec 27, 2020

 

Dec 26, 2021

 

Dec 27, 2020

Revenue from services

$

621,930

 

$

518,634

 

$

2,173,622

 

$

1,846,360

 

Cost of services

 

455,154

 

 

397,837

 

 

1,613,302

 

 

1,405,715

 

Gross profit

 

166,776

 

 

120,797

 

 

560,320

 

 

440,645

 

Selling, general and administrative expense

 

137,665

 

 

103,626

 

 

464,322

 

 

408,307

 

Depreciation and amortization

 

7,151

 

 

8,029

 

 

27,556

 

 

32,031

 

Goodwill and intangible asset impairment charge

 

 

 

 

 

 

 

175,189

 

Income (loss) from operations

 

21,960

 

 

9,142

 

 

68,442

 

 

(174,882

)

Interest expense and other income, net

 

3,528

 

 

1,943

 

 

5,408

 

 

1,620

 

Income (loss) before tax expense (benefit)

 

25,488

 

 

11,085

 

 

73,850

 

 

(173,262

)

Income tax expense (benefit)

 

5,278

 

 

3,059

 

 

12,216

 

 

(31,421

)

Net income (loss)

$

20,210

 

$

8,026

 

$

61,634

 

$

(141,841

)

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

Basic

$

0.58

 

$

0.23

 

$

1.77

 

$

(4.01

)

Diluted

$

0.57

 

$

0.23

 

$

1.74

 

$

(4.01

)

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

 

34,809

 

 

34,529

 

 

34,798

 

 

35,365

 

Diluted

 

35,621

 

 

34,954

 

 

35,434

 

 

35,365

 

TRUEBLUE, INC.

SUMMARY CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(in thousands)

Dec 26, 2021

 

Dec 27, 2020

ASSETS

 

 

 

Cash and cash equivalents

$

49,896

 

$

62,507

Accounts receivable, net

 

353,882

 

 

278,343

Other current assets

 

41,295

 

 

38,035

Total current assets

 

445,073

 

 

378,885

Property and equipment, net

 

88,090

 

 

71,734

Restricted cash and investments

 

221,026

 

 

240,534

Goodwill and intangible assets, net

 

116,749

 

 

123,802

Other assets, net

 

162,288

 

 

165,622

Total assets

$

1,033,226

 

$

980,577

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Accounts payable and other accrued expenses

$

77,172

 

$

58,447

Accrued wages and benefits

 

100,173

 

 

122,657

Current portion of workers’ compensation claims reserve

 

61,596

 

 

66,007

Other current liabilities

 

19,605

 

 

21,856

Total current liabilities

 

258,546

 

 

268,967

Workers’ compensation claims reserve, less current portion

 

194,598

 

 

189,486

Other long-term liabilities

 

87,015

 

 

84,934

Total liabilities

 

540,159

 

 

543,387

Shareholders’ equity

 

493,067

 

 

437,190

Total liabilities and shareholders’ equity

$

1,033,226

 

$

980,577

TRUEBLUE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

52 weeks ended

(in thousands)

Dec 26, 2021

 

Dec 27, 2020

Cash flows from operating activities:

 

 

 

Net income (loss)

$

61,634

 

 

$

(141,841

)

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

 

 

 

Depreciation and amortization

 

27,556

 

 

 

32,031

 

Goodwill and intangible asset impairment charge

 

 

 

 

175,189

 

Provision for credit losses

 

6,493

 

 

 

6,300

 

Stock-based compensation

 

13,943

 

 

 

9,113

 

Deferred income taxes

 

752

 

 

 

(26,791

)

Non-cash lease expense

 

14,446

 

 

 

15,195

 

Other operating activities

 

(1,968

)

 

 

(686

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(81,616

)

 

 

57,146

 

Income tax receivable

 

1,602

 

 

 

(1,122

)

Operating lease right-of-use-asset

 

8,080

 

 

 

 

Other assets

 

(13,715

)

 

 

(2,124

)

Accounts payable and other accrued expenses

 

16,425

 

 

 

(6,561

)

Other accrued wages and benefits

 

34,581

 

 

 

(2,012

)

Deferred employer payroll taxes

 

(57,065

)

 

 

57,065

 

Workers’ compensation claims reserve

 

701

 

 

 

(125

)

Operating lease liabilities

 

(13,457

)

 

 

(14,562

)

Other liabilities

 

2,048

 

 

 

(3,684

)

Net cash provided by operating activities

 

20,440

 

 

 

152,531

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(35,006

)

 

 

(27,066

)

Payments for company-owned life insurance

 

(4,000

)

 

 

(12,031

)

Proceeds from company-owned life insurance

 

832

 

 

 

 

Purchases of restricted available-for-sale investments

 

(43

)

 

 

(2,896

)

Sales of restricted available-for-sale investments

 

7,333

 

 

 

12,311

 

Purchases of restricted held-to-maturity investments

 

(9,411

)

 

 

(32,495

)

Maturities of restricted held-to-maturity investments

 

23,935

 

 

 

27,561

 

Other

 

140

 

 

 

205

 

Net cash used in investing activities

 

(16,220

)

 

 

(34,411

)

Cash flows from financing activities:

 

 

 

Purchases and retirement of common stock

 

(16,678

)

 

 

(52,346

)

Net proceeds from employee stock purchase plans

 

1,135

 

 

 

922

 

Common stock repurchases for taxes upon vesting of restricted stock

 

(3,238

)

 

 

(2,438

)

Net change in revolving credit facility

 

 

 

 

(37,100

)

Other

 

(345

)

 

 

(1,540

)

Net cash used in financing activities

 

(19,126

)

 

 

(92,502

)

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

 

(521

)

 

 

623

 

Net change in cash, cash equivalents, and restricted cash

 

(15,427

)

 

 

26,241

 

Cash, cash equivalents and restricted cash, beginning of period

 

118,612

 

 

 

92,371

 

Cash, cash equivalents and restricted cash, end of period

$

103,185

 

 

$

118,612

 

TRUEBLUE, INC.

SEGMENT DATA

(Unaudited)

 

 

 

 

 

13 weeks ended

 

52 weeks ended

(in thousands)

Dec 26, 2021

 

Dec 27, 2020

 

Dec 26, 2021

 

Dec 27, 2020

Revenue from services:

 

 

 

 

 

 

 

PeopleReady

$

362,164

 

 

$

297,471

 

 

$

1,270,928

 

 

$

1,099,462

 

PeopleManagement

 

177,842

 

 

 

179,306

 

 

 

639,741

 

 

 

586,822

 

PeopleScout

 

81,924

 

 

 

41,857

 

 

 

262,953

 

 

 

160,076

 

Total company

$

621,930

 

 

$

518,634

 

 

$

2,173,622

 

 

$

1,846,360

 

 

 

 

 

 

 

 

 

Segment profit (1):

 

 

 

 

 

 

 

PeopleReady

$

27,411

 

 

$

16,198

 

 

$

82,398

 

 

$

43,200

 

PeopleManagement

 

4,499

 

 

 

5,654

 

 

 

13,196

 

 

 

11,717

 

PeopleScout

 

11,491

 

 

 

4,450

 

 

 

36,163

 

 

 

4,525

 

Total segment profit

 

43,401

 

 

 

26,302

 

 

 

131,757

 

 

 

59,442

 

Corporate unallocated expense

 

(7,344

)

 

 

(4,608

)

 

 

(27,937

)

 

 

(20,714

)

Total company Adjusted EBITDA (2)

 

36,057

 

 

 

21,694

 

 

 

103,820

 

 

 

38,728

 

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

 

(150

)

 

 

(186

)

 

 

(734

)

 

 

(495

)

Amortization of software as a service assets (4)

 

(720

)

 

 

(615

)

 

 

(2,709

)

 

 

(2,307

)

Goodwill and intangible asset impairment charge

 

 

 

 

 

 

 

 

 

 

(175,189

)

Gain on deferred compensation assets (5)

 

(2,897

)

 

 

(1,725

)

 

 

(2,897

)

 

 

(1,725

)

Workforce reduction costs (6)

 

(1,799

)

 

 

19

 

 

 

(1,993

)

 

 

(12,570

)

COVID-19 government subsidies, net (7)

 

91

 

 

 

(964

)

 

 

4,222

 

 

 

6,211

 

Other adjustments, net (8)

 

(1,471

)

 

 

(1,052

)

 

 

(3,711

)

 

 

4,496

 

EBITDA (2)

 

29,111

 

 

 

17,171

 

 

 

95,998

 

 

 

(142,851

)

Depreciation and amortization

 

(7,151

)

 

 

(8,029

)

 

 

(27,556

)

 

 

(32,031

)

Interest expense and other income, net

 

3,528

 

 

 

1,943

 

 

 

5,408

 

 

 

1,620

 

Income before tax expense

 

25,488

 

 

 

11,085

 

 

 

73,850

 

 

 

(173,262

)

Income tax expense (benefit)

 

(5,278

)

 

 

(3,059

)

 

 

(12,216

)

 

 

31,421

 

Net income

$

20,210

 

 

$

8,026

 

 

$

61,634

 

 

$

(141,841

)

(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)

Gain realized on sale of deferred compensation mutual funds to purchase corporate owned life insurance policies.

 

(6)

Workforce reduction costs for the 13 and 52 weeks ended December 26, 2021 in selling, general and administrative expense primarily include costs to streamline our delivery teams within our PeopleReady and PeopleScout segments. Workforce reduction costs for the 13 and 52 weeks ended December 27, 2020 were primarily due to employee reductions as part of our cost management actions in response to COVID-19 ($3.7 million in cost of services and $8.9 million in selling, general and administrative expense for the full-year).

 

(7)

Net impact of COVID-19 related government subsidies. For the 13 and 52 weeks ended December 27, 2020, we received government subsidies of $2.7 million and $9.9 million, respectively. We elected to distribute a portion of the total benefit for the year to our employees in the form of a $3.7 million bonus, resulting in a net cost of $1.0 million for Q4 and a net benefit of $6.2 million for the fiscal year. These subsidies extended into 2021, providing a benefit of $4.2 million for the 52 weeks ended December 26, 2021.

 

(8)

Other adjustments for the 13 and 52 weeks ended December 26, 2021 primarily include implementation costs for cloud-based systems of $1.4 million and $1.7 million, respectively and costs incurred while transitioning into our new Chicago office of $0.1 million and $1.8 million, respectively. Other adjustments for the 13 and 52 weeks ended December 27, 2020 primarily include costs of $0.7 million incurred while transitioning into our new Chicago office and implementation costs for cloud-based systems of $0.1 million and $0.9 million, respectively. For the 52 weeks ended December 27, 2020, these expenses were 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:

- third-party processing fees for hiring tax credits,

- amortization of software as a service assets,

- goodwill and intangible asset impairment charge,

- gain on deferred compensation assets,

- workforce reductions 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 net income and Adjusted net income 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, net,

- other adjustments, net,

- tax effect of each adjustment to U.S. GAAP, and

- adjustment of income taxes to normalized effective 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)

 

 

Q4 2021

 

Q4 2020

 

Q4 2019

 

13 weeks ended

(in thousands, except for per share data)

Dec 26, 2021

 

Dec 27, 2020

 

Dec 29, 2019

Net income

$

20,210

 

 

$

8,026

 

 

$

8,715

 

Amortization of intangible assets of acquired businesses

 

1,503

 

 

 

2,028

 

 

 

4,003

 

Amortization of software as a service assets (1)

 

720

 

 

 

615

 

 

 

513

 

Acquisition/integration costs

 

 

 

 

 

 

 

(50

)

Workforce reduction costs (2)

 

1,799

 

 

 

(19

)

 

 

2,829

 

COVID-19 government subsidies, net (3)

 

(91

)

 

 

964

 

 

 

 

Other adjustments, net (4)

 

1,471

 

 

 

1,052

 

 

 

571

 

Tax effect of adjustments to net income (5)

 

(1,014

)

 

 

(1,280

)

 

 

(1,102

)

Adjustment of income taxes to normalized effective rate (6)

 

 

 

 

 

 

 

(671

)

Adjusted net income

$

24,598

 

 

$

11,386

 

 

$

14,808

 

 

 

 

 

 

 

Adjusted net income per diluted share

$

0.69

 

 

$

0.33

 

 

$

0.39

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

35,621

 

 

 

34,954

 

 

 

38,348

 

 

2021

 

2020

 

2019

 

52 weeks ended

(in thousands, except for per share data)

Dec 26, 2021

 

Dec 27, 2020

 

Dec 29, 2019

Net income (loss)

$

61,634

 

 

$

(141,841

)

 

$

63,073

 

Amortization of intangible assets of acquired businesses

 

6,704

 

 

 

10,144

 

 

 

17,899

 

Amortization of software as a service assets (1)

 

2,709

 

 

 

2,307

 

 

 

1,624

 

Acquisition/integration costs

 

 

 

 

 

 

 

1,562

 

Goodwill and intangible asset impairment charge

 

 

 

 

175,189

 

 

 

 

Workforce reduction costs (2)

 

1,993

 

 

 

12,570

 

 

 

3,301

 

COVID-19 government subsidies, net (3)

 

(4,222

)

 

 

(6,211

)

 

 

 

Other adjustments, net (4)

 

3,711

 

 

 

(4,496

)

 

 

(1,010

)

Tax effect of adjustments to net income (loss) (5)

 

(1,802

)

 

 

(28,729

)

 

 

(3,273

)

Adjustment of income taxes to normalized effective rate (6)

 

 

 

 

(3,719

)

 

 

(2,835

)

Adjusted net income

$

70,727

 

 

$

15,214

 

 

$

80,341

 

 

 

 

 

 

 

Adjusted net income per diluted share

$

2.00

 

 

$

0.43

 

 

$

2.05

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

35,429

 

 

 

35,658

 

 

 

39,179

 

 

 

 

 

 

 

2.

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

(Unaudited)

 

 

Q4 2021

 

Q4 2020

 

Q4 2019

 

13 weeks ended

(in thousands)

Dec 26, 2021

 

Dec 27, 2020

 

Dec 29, 2019

Net income

$

20,210

 

 

$

8,026

 

 

$

8,715

 

Income tax expense

 

5,278

 

 

 

3,059

 

 

 

638

 

Interest expense and other (income), net

 

(3,528

)

 

 

(1,943

)

 

 

(2,014

)

Depreciation and amortization

 

7,151

 

 

 

8,029

 

 

 

9,021

 

EBITDA

 

29,111

 

 

 

17,171

 

 

 

16,360

 

Third-party processing fees for hiring tax credits (7)

 

150

 

 

 

186

 

 

 

240

 

Amortization of software as a service assets (1)

 

720

 

 

 

615

 

 

 

513

 

Acquisition/integration costs

 

 

 

 

 

 

 

(50

)

Gain on deferred compensation assets (8)

 

2,897

 

 

 

1,725

 

 

 

495

 

Workforce reduction costs (2)

 

1,799

 

 

 

(19

)

 

 

2,829

 

COVID-19 government subsidies, net (3)

 

(91

)

 

 

964

 

 

 

 

Other adjustments, net (4)

 

1,471

 

 

 

1,052

 

 

 

571

 

Adjusted EBITDA

$

36,057

 

 

$

21,694

 

 

$

20,958

 

 

 

 

 

 

 

Margin / % of revenue:

 

 

 

 

 

Net income

 

3.2

%

 

 

1.5

%

 

 

1.5

%

Adjusted EBITDA

 

5.8

%

 

 

4.2

%

 

 

3.5

%

 

2021

 

2020

 

2019

 

52 weeks ended

(in thousands)

Dec 26, 2021

 

Dec 27, 2020

 

Dec 29, 2019

Net income (loss)

$

61,634

 

 

$

(141,841

)

 

$

63,073

 

Income tax expense (benefit)

 

12,216

 

 

 

(31,421

)

 

 

6,971

 

Interest expense and other (income), net

 

(5,408

)

 

 

(1,620

)

 

 

(3,865

)

Depreciation and amortization

 

27,556

 

 

 

32,031

 

 

 

37,549

 

EBITDA

 

95,998

 

 

 

(142,851

)

 

 

103,728

 

Third-party processing fees for hiring tax credits (7)

 

734

 

 

 

495

 

 

 

960

 

Amortization of software as a service assets (1)

 

2,709

 

 

 

2,307

 

 

 

1,624

 

Acquisition/integration costs

 

 

 

 

 

 

 

1,562

 

Goodwill and intangible asset impairment charge

 

 

 

 

175,189

 

 

 

 

Gain on deferred compensation assets (8)

 

2,897

 

 

 

1,725

 

 

 

495

 

Workforce reduction costs (2)

 

1,993

 

 

 

12,570

 

 

 

3,301

 

COVID-19 government subsidies, net (3)

 

(4,222

)

 

 

(6,211

)

 

 

 

Other adjustments, net (4)

 

3,711

 

 

 

(4,496

)

 

 

(1,010

)

Adjusted EBITDA

$

103,820

 

 

$

38,728

 

 

$

110,660

 

 

 

 

 

 

 

Margin / % of revenue:

 

 

 

 

 

Net income (loss)

 

2.8

%

 

 

(7.7

) %

 

 

2.7

%

Adjusted EBITDA

 

4.8

%

 

 

2.1

%

 

 

4.7

%

(1)

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

 

(2)

Workforce reduction costs for the 13 and 52 weeks ended December 26, 2021 in selling, general and administrative expense primarily include costs to streamline our delivery teams within our PeopleReady and PeopleScout segments. Workforce reduction costs for the 13 and 52 weeks ended December 27, 2020 were primarily due to employee reductions as part of our cost management actions in response to COVID-19 ($3.7 million in cost of services and $8.9 million in selling, general and administrative expense for the full-year). Workforce reduction costs for the 13 and 52 weeks ended December 29, 2019 were primarily associated with employee reductions in the PeopleReady business.

 

(3)

Net impact of COVID-19 related government subsidies. For the 13 and 52 weeks ended December 27, 2020, we received government subsidies of $2.7 million and $9.9 million, respectively. We elected to distribute a portion of the total benefit for the year to our employees in the form of a $3.7 million bonus, resulting in a net cost of $1.0 million for Q4 and a net benefit of $6.2 million for the fiscal year. These subsidies extended into 2021, providing a benefit of $4.2 million for the 52 weeks ended December 26, 2021.

 

(4)

Other adjustments for the 13 and 52 weeks ended December 26, 2021 primarily include implementation costs for cloud-based systems of $1.4 million and $1.7 million, respectively and costs incurred while transitioning into our new Chicago office of $0.1 million and $1.8 million, respectively. Other adjustments for the 13 and 52 weeks ended December 27, 2020 primarily include costs of $0.7 million incurred while transitioning into our new Chicago office and implementation costs for cloud-based systems of $0.1 million and $0.9 million, respectively. For the 52 weeks ended December 27, 2020, these expenses were offset by a $6.3 million benefit from a reduction in expected costs to comply with the Affordable Care Act. Other adjustments for the 13 and 52 weeks ended December 29, 2019 primarily include implementation costs for cloud-based systems of $0.6 million and $3.2 million, respectively. For the 52 weeks ended December 29, 2019, these expenses were offset by $3.9 million of workers’ compensation benefit related to additional insurance coverage associated with former workers’ compensation carriers in liquidation.

 

(5)

Total tax effect of each of the adjustments to U.S. GAAP net income (loss) using the effective income tax rate for the respective periods in 2021 and 2020, and the expected long-term ongoing rate of 14 percent for Q4 and fiscal year 2019.

 

(6)

Beginning in Q2 2020, we decided not to adjust our GAAP tax rate to an expected long-term ongoing rate in our adjusted net income calculation. Thus the adjustment for fiscal year 2020 relates to the Q1 2020 adjustment of the effective income tax rate to the long-term ongoing rate of 12 percent expected at that time. The adjustment for Q4 and fiscal year 2019 reflects the adjustment of the effective income tax rate to the long-term ongoing rate of 14 percent expected at that time.

 

(7)

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

 

(8)

Gain realized on sale of deferred compensation mutual funds to purchase corporate owned life insurance policies.

 

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 2021, TrueBlue connected approximately 615,000 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.