View all Press Releases

TrueBlue Reports Third Quarter 2022 Results

10/24/2022

Gross margin strength drives bottom-line results

TACOMA, Wash.--(BUSINESS WIRE)-- TrueBlue (NYSE:TBI) today announced its third quarter results for 2022.

Third quarter revenue was $576 million, roughly flat compared to revenue of $577 million in the third quarter of 2021. Net income per diluted share was $0.63 compared to net income per diluted share of $0.53 in the third quarter of 2021. Third quarter adjusted net income1 per diluted share was $0.75 compared to adjusted net income per diluted share of $0.59 in the third quarter of 2021.

“Given the uncertainty businesses face regarding their workforce needs, we are pleased with our results this quarter,” said Steve Cooper, CEO of TrueBlue. “While demand slowed, we filled a higher proportion of orders due to continued improvement in worker supply. Tight labor pools are playing to our favor with the strongest bill/pay spreads in recent history resulting in higher operating income and related margin.

“Over the near-term, we believe economic uncertainty will increase and demand for our services will soften,” continued Mr. Cooper. “Ultimately, we see secular strength for our workforce solutions. We expect low labor participation rates and an increasing preference to work from home to further constrain blue-collar labor supply. We will continue to invest in our operational and technology strengths to ensure we are well-positioned for the economic recovery and beyond.”

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 third quarter 2022 results on a webcast at 2:30 p.m. PT (5:30 p.m. ET), today, Monday, Oct. 24, 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 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, 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, (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

 

39 weeks ended

(in thousands, except per share data)

 

Sep 25, 2022

 

Sep 26, 2021

 

Sep 25, 2022

 

Sep 26, 2021

Revenue from services

 

$

575,721

 

$

577,031

 

$

1,696,489

 

$

1,551,692

Cost of services

 

 

419,802

 

 

430,529

 

 

1,242,194

 

 

1,158,148

Gross profit

 

 

155,919

 

 

146,502

 

 

454,295

 

 

393,544

Selling, general and administrative expense

 

 

124,351

 

 

118,748

 

 

366,953

 

 

326,657

Depreciation and amortization

 

 

7,483

 

 

6,426

 

 

22,015

 

 

20,405

Income from operations

 

 

24,085

 

 

21,328

 

 

65,327

 

 

46,482

Interest expense and other income, net

 

 

703

 

 

581

 

 

1,098

 

 

1,880

Income before tax expense

 

 

24,788

 

 

21,909

 

 

66,425

 

 

48,362

Income tax expense

 

 

4,092

 

 

3,267

 

 

11,197

 

 

6,938

Net income

 

$

20,696

 

$

18,642

 

$

55,228

 

$

41,424

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

Basic

 

$

0.64

 

$

0.53

 

$

1.67

 

$

1.19

Diluted

 

$

0.63

 

$

0.53

 

$

1.65

 

$

1.17

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

32,434

 

 

34,873

 

 

33,023

 

 

34,788

Diluted

 

 

32,818

 

 

35,475

 

 

33,511

 

 

35,255

 

TRUEBLUE, INC.

SUMMARY CONSOLIDATED BALANCE SHEETS

(Unaudited)

   

(in thousands)

 

Sep 25, 2022

 

Dec 26, 2021

ASSETS

 

 

 

 

Cash and cash equivalents

 

$

43,779

 

$

49,896

Accounts receivable, net

 

 

328,763

 

 

353,882

Other current assets

 

 

36,088

 

 

41,295

Total current assets

 

 

408,630

 

 

445,073

Property and equipment, net

 

 

92,324

 

 

88,090

Restricted cash and investments

 

 

208,659

 

 

221,026

Goodwill and intangible assets, net

 

 

110,741

 

 

116,749

Other assets, net

 

 

162,427

 

 

162,288

Total assets

 

$

982,781

 

$

1,033,226

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

Accounts payable and other accrued expenses

 

$

53,838

 

$

77,172

Accrued wages and benefits

 

 

89,899

 

 

100,173

Current portion of workers’ compensation claims reserve

 

 

55,574

 

 

61,596

Other current liabilities

 

 

23,759

 

 

19,605

Total current liabilities

 

 

223,070

 

 

258,546

Workers’ compensation claims reserve, less current portion

 

 

196,315

 

 

194,598

Other long-term liabilities

 

 

76,582

 

 

87,015

Total liabilities

 

 

495,967

 

 

540,159

Shareholders’ equity

 

 

486,814

 

 

493,067

Total liabilities and shareholders’ equity

 

$

982,781

 

$

1,033,226

 

TRUEBLUE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

   

 

 

39 weeks ended

(in thousands)

 

Sep 25, 2022

 

Sep 26, 2021

Cash flows from operating activities:

 

 

 

 

Net income

 

$

55,228

 

 

$

41,424

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

22,015

 

 

 

20,405

 

Provision for credit losses

 

 

3,352

 

 

 

2,881

 

Stock-based compensation

 

 

7,675

 

 

 

10,149

 

Deferred income taxes

 

 

2,046

 

 

 

445

 

Non-cash lease expense

 

 

9,694

 

 

 

11,173

 

Other operating activities

 

 

8,772

 

 

 

(1,484

)

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

21,388

 

 

 

(53,626

)

Income taxes receivable and payable

 

 

186

 

 

 

963

 

Operating lease right-of-use-asset

 

 

 

 

 

7,150

 

Other assets

 

 

(564

)

 

 

(7,003

)

Accounts payable and other accrued expenses

 

 

(22,935

)

 

 

3,212

 

Accrued wages and benefits

 

 

(10,277

)

 

 

24,278

 

Deferred employer payroll taxes

 

 

 

 

 

(57,066

)

Workers’ compensation claims reserve

 

 

(4,304

)

 

 

3,075

 

Operating lease liabilities

 

 

(9,673

)

 

 

(10,017

)

Other liabilities

 

 

(2,529

)

 

 

4,598

 

Net cash provided by operating activities

 

 

80,074

 

 

 

557

 

Cash flows from investing activities:

 

 

 

 

Capital expenditures

 

 

(22,685

)

 

 

(28,772

)

Purchases of restricted available-for-sale investments

 

 

 

 

 

(29

)

Sales of restricted available-for-sale investments

 

 

 

 

 

793

 

Purchases of restricted held-to-maturity investments

 

 

(4,950

)

 

 

 

Maturities of restricted held-to-maturity investments

 

 

23,697

 

 

 

18,346

 

Net cash used in investing activities

 

 

(3,938

)

 

 

(9,662

)

Cash flows from financing activities:

 

 

 

 

Purchases and retirement of common stock

 

 

(60,939

)

 

 

 

Net proceeds from employee stock purchase plans

 

 

780

 

 

 

754

 

Common stock repurchases for taxes upon vesting of restricted stock

 

 

(4,347

)

 

 

(3,035

)

Other

 

 

(203

)

 

 

(270

)

Net cash used in financing activities

 

 

(64,709

)

 

 

(2,551

)

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

 

 

(2,482

)

 

 

(613

)

Net change in cash, cash equivalents, and restricted cash

 

 

8,945

 

 

 

(12,269

)

Cash, cash equivalents and restricted cash, beginning of period

 

 

103,185

 

 

 

118,612

 

Cash, cash equivalents and restricted cash, end of period

 

$

112,130

 

 

$

106,343

 

   

TRUEBLUE, INC.

SEGMENT DATA

(Unaudited)

   

 

 

13 weeks ended 

(in thousands)

 

 Sep 25, 2022

 

 Sep 26, 2021

Revenue from services:

 

 

 

 

PeopleReady

 

$

334,639

 

 

$

349,056

 

PeopleManagement

 

 

163,618

 

 

 

157,789

 

PeopleScout

 

 

77,464

 

 

 

70,186

 

Total company

 

$

575,721

 

 

$

577,031

 

 

 

 

 

 

Segment profit (1):

 

 

 

 

PeopleReady

 

$

28,732

 

 

$

24,690

 

PeopleManagement

 

 

4,463

 

 

 

2,360

 

PeopleScout

 

 

10,707

 

 

 

9,778

 

Total segment profit

 

 

43,902

 

 

 

36,828

 

Corporate unallocated expense

 

 

(9,396

)

 

 

(7,667

)

Total company Adjusted EBITDA (2)

 

 

34,506

 

 

 

29,161

 

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

 

 

(162

)

 

 

(419

)

Amortization of software as a service assets (4)

 

 

(729

)

 

 

(670

)

PeopleReady technology upgrade costs (5)

 

 

(1,858

)

 

 

 

COVID-19 government subsidies

 

 

 

 

 

92

 

Other adjustments, net (6)

 

 

(189

)

 

 

(410

)

EBITDA (2)

 

 

31,568

 

 

 

27,754

 

Depreciation and amortization

 

 

(7,483

)

 

 

(6,426

)

Interest expense and other income, net

 

 

703

 

 

 

581

 

Income before tax expense

 

 

24,788

 

 

 

21,909

 

Income tax expense

 

 

(4,092

)

 

 

(3,267

)

Net income

 

$

20,696

 

 

$

18,642

(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)

 

Other adjustments for the 13 weeks ended September 25, 2022 include $0.2 million incurred to transition to a new third-party claims administrator for workers’ compensation. Other adjustments for the 13 weeks ended September 26, 2021 primarily include costs of $0.2 million incurred while transitioning into our new Chicago office and implementation costs for cloud-based systems of $0.1 million.

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 and net income per diluted share, excluding:
– amortization of intangibles,
– amortization of software as a service assets,
– accelerated depreciation,
– PeopleReady technology upgrade costs,
– COVID-19 government subsidies,
– other adjustments, net, and
– tax effect of each adjustment 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:
– income taxes,
– interest expense and other income, net, and
– depreciation and amortization

Adjusted EBITDA, further excludes:
– third-party processing fees for hiring tax credits,
– amortization of software as a service assets,
– PeopleReady technology upgrade 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 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, 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 INCOME TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE
(Unaudited)

 

 

13 weeks ended

(in thousands, except for per share data)

 

Sep 25, 2022

 

Sep 26, 2021

Net income

 

$

20,696

 

 

$

18,642

 

Amortization of intangible assets

 

 

1,484

 

 

 

1,506

 

Amortization of software as a service assets (1)

 

 

729

 

 

 

670

 

Accelerated depreciation (2)

 

 

602

 

 

 

 

PeopleReady technology upgrade costs (3)

 

 

1,858

 

 

 

 

COVID-19 government subsidies

 

 

 

 

 

(92

)

Other adjustments, net (4)

 

 

189

 

 

 

410

 

Tax effect of adjustments to net income (5)

 

 

(800

)

 

 

(372

)

Adjusted net income

 

$

24,758

 

 

$

20,764

 

 

 

 

 

 

Adjusted net income per diluted share

 

$

0.75

 

 

$

0.59

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

 

32,818

 

 

 

35,475

 

 

 

 

 

 

Margin / % of revenue:

 

 

 

 

Net income

 

 

3.6%

 

 

3.2%

Adjusted net income

 

 

4.3%

 

 

3.6%

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

 

 

13 weeks ended

(in thousands)

 

Sep 25, 2022

 

Sep 26, 2021

Net income

 

$

20,696

 

 

$

18,642

 

Income tax expense

 

 

4,092

 

 

 

3,267

 

Interest expense and other (income), net

 

 

(703

)

 

 

(581

)

Depreciation and amortization

 

 

7,483

 

 

 

6,426

 

EBITDA

 

 

31,568

 

 

 

27,754

 

Third-party processing fees for hiring tax credits (6)

 

 

162

 

 

 

419

 

Amortization of software as a service assets (1)

 

 

729

 

 

 

670

 

PeopleReady technology upgrade costs (3)

 

 

1,858

 

 

 

 

COVID-19 government subsidies

 

 

 

 

 

(92

)

Other adjustments, net (4)

 

 

189

 

 

 

410

 

Adjusted EBITDA

 

$

34,506

 

 

$

29,161

 

 

 

 

 

 

Margin / % of revenue:

 

 

 

 

Net income

 

 

3.6%

 

 

3.2%

Adjusted EBITDA

 

 

6.0%

 

 

5.1%

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

 

 

13 weeks ended

(in thousands)

 

Sep 25, 2022

 

Sep 26, 2021

Selling, general and administrative expense

 

$

124,351

 

 

$

118,748

 

Third-party processing fees for hiring tax credits (6)

 

 

(162

)

 

 

(419

)

Amortization of software as a service assets (1)

 

 

(729

)

 

 

(670

)

PeopleReady technology upgrade costs (3)

 

 

(1,858

)

 

 

 

COVID-19 government subsidies

 

 

 

 

 

92

 

Other adjustments, net (4)

 

 

(189

)

 

 

(410

)

Adjusted SG&A expense

 

$

121,413

 

 

$

117,341

(1)

 

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

 

 

(2)

 

Accelerated depreciation for the existing systems being replaced by the upgraded PeopleReady technology platform.

   

 

(3)

 

Costs associated with upgrading legacy PeopleReady technology.

   

 

(4)

 

Other adjustments for the 13 weeks ended September 25, 2022 include $0.2 million incurred to transition to a new third-party claims administrator for workers’ compensation. Other adjustments for the 13 weeks ended September 26, 2021 primarily include costs of $0.2 million incurred while transitioning into our new Chicago office and implementation costs for cloud-based systems of $0.1 million.

   

 

(5)

 

Total tax effect of each of the adjustments to U.S. GAAP net income using the effective income tax rate for the respective periods.

   

 

(6)

 

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

 

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

Email Alerts

Email Address *
Mailing Lists *





 
Enter the code shown above.
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.