TrueBlue Reports Fourth Quarter 2016 Results

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TACOMA, Wash.--(BUSINESS WIRE)-- TrueBlue, Inc. (NYSE:TBI) announced today fourth quarter 2016 results.

Revenue for the fiscal 14-week1 fourth quarter of 2016 was $735 million, a decrease of 9% compared to the fiscal 13-week fourth quarter of 2015. Net income per diluted share for the fiscal 14-week fourth quarter of 2016 was $0.43 compared to $0.67 per diluted share for the fiscal 13-week fourth quarter of 2015.

On a comparable2 13-week basis, revenue for the fourth quarter of 2016 was $701 million, a decrease of 14%, or an increase of 5% excluding the company’s largest customer. On a comparable 13-week basis, adjusted net income per diluted share3 was $0.58, or $0.57 excluding the company’s largest customer, compared to $0.67 per diluted share for the fiscal fourth quarter of 2015, or $0.48 excluding the company’s largest customer.

"Revenue on a comparable 13-week basis was up five percent excluding our largest customer,” TrueBlue CEO Steve Cooper said. “We remain highly focused on profit margins through disciplined pricing, ongoing cost containment, and capturing synergies with our acquired businesses.

“Our recent acquisitions have accelerated our growth strategy. The recruitment process outsourcing business acquired from Aon Hewitt makes PeopleScout the RPO leader in the U.S., as well as a global leader, positioning us for continued long-term success in this fast-growing, high-margin business. The SIMOS acquisition enhances our PeopleManagement business with productivity-based pricing that is highly appealing to customers."

Cooper continued, “Along with our recent branding changes, these acquisitions position us better than ever to respond to a broad assortment of customer needs, whether it’s on-demand staffing from PeopleReady, strategic workforce management solutions from PeopleManagement, RPO from PeopleScout, or a total talent solution.”

2017 Outlook

The company estimates revenue for the fiscal first quarter of 2017 will range from $560 million to $575 million. It also expects net income (loss) per diluted share will range from ($0.01) to $0.04 or $0.09 to $0.14 on an adjusted net income per diluted share basis.

Management will discuss fourth quarter and full-year 2016 results on a webcast at 2 p.m. PT (5 p.m. ET), today, Wednesday, Feb. 8. The webcast can be accessed on TrueBlue’s web site: www.trueblue.com.

About TrueBlue:

TrueBlue (NYSE:TBI) is a leading provider of specialized workforce solutions that help clients create growth, improve efficiency and increase reliability. TrueBlue connected over 815,000 people with work during 2016 to clients in a wide variety of industries through its staffing, on-site workforce management and recruitment process outsourcing services. Learn more at www.trueblue.com.

1 As previously communicated, the company’s fiscal fourth quarter includes a 14th week and the fiscal year includes a 53rd week, and the week-ending date has been moved from Friday to the following Sunday, Jan. 1, 2017, to better align with the work week of our customers. To facilitate comparison, the company is providing 14-week GAAP and 13-week comparable revenue results.

2 Due to a previously announced reduction in the scope of services with its largest customer, the company is providing results on a comparable 13-week and 52-week basis excluding the results of this customer to help investors assess the company's underlying results. See the financial statements accompanying the release and the company’s website for more information on non-GAAP terms.

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

Forward-looking Statements

This release 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. We presently consider the following to be among important factors that could cause actual results to differ materially from the company’s expectations: (1) national and global economic conditions, (2) our ability to attract and retain customers, (3) our ability to maintain profit margins, (4) new laws and regulations that could have a material effect on our operations or financial results, (5) our ability to successfully complete and integrate acquisitions. Other information regarding factors that could materially affect our results is included in our 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 on our website at www.trueblue.com under the Investor Relations section or the SEC's website at www.sec.gov. We assume no duty to update or revise any forward-looking statements contained in this release.

In addition, we use several non-GAAP financial measures when presenting our financial results in this release. Please refer to the reconciliations between our GAAP and non-GAAP financial measures included below and on our website at www.trueblue.com under the Investor Relations section for a complete perspective on both current and historical periods. Any comparisons made to other periods today are based on a comparison to the same period in the prior year unless otherwise stated.

       
TRUEBLUE, INC.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

 
Q4 2016 Fiscal 2016 Q4 2015 Fiscal 2015
14 Weeks Ended (1) 13 Weeks Ended 53 Weeks Ended (1) 52 Weeks Ended

Jan 1, 2017

Dec 25, 2015

Jan 1, 2017

Dec 25, 2015

Revenue from services $ 734,951 $ 810,733 $ 2,750,640 $ 2,695,680
Cost of services 554,064   625,729   2,070,922   2,060,007  
Gross profit 180,887 185,004 679,718 635,673
Selling, general and administrative expense 145,387 141,419 546,477 495,988
Depreciation and amortization 12,019 10,428 46,692 41,843
Goodwill and intangible asset impairment charge (2) —   —   103,544   —  
Income (loss) from operations 23,481 33,157 (16,995 ) 97,842
Interest and other expense, net (572 ) (293 ) (3,345 ) (1,395 )
Income (loss) before tax expense 22,909 32,864 (20,340 ) 96,447
Income tax expense (benefit) 4,822   4,696   (5,089 ) 25,200  
Net income (loss) $ 18,087   $ 28,168   $ (15,251 ) $ 71,247  
 
Net income (loss) per common share:
Basic $ 0.43 $ 0.68 $ (0.37 ) $ 1.73
Diluted $ 0.43 $ 0.67 $ (0.37 ) $ 1.71
 
Weighted average shares outstanding:
Basic 41,638 41,337 41,648 41,226
Diluted 41,980 41,748 41,648 41,622
(1)   The company changed its fiscal period end day from the last Friday in December to the Sunday closest to the last day of December. Our fiscal quarters also end on Sunday. This change was effective with our fourth quarter ended January 1, 2017. In fiscal years consisting of 53 weeks, the final quarter will consist of 14 weeks while in 52-week years all quarters will consist of 13 weeks.
(2) The Goodwill and intangible asset impairment charge for the 53-weeks ended January 1, 2017, included the write-off of the CLP and Spartan reporting unit trade names/trademarks of $4.3 million due to the re-branding to PeopleReady during the third quarter of 2016, and $99.3 million of impairment charges recorded in the second quarter of 2016 relating to our Staff Management | SMX, hrX, and PlaneTechs reporting units.
   
TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

 
Fiscal 2016 Fiscal 2015

Jan 1, 2017

Dec 25, 2015

Assets
Cash and cash equivalents $ 34,970 $ 29,781
Accounts receivable, net 352,606 461,476
Other current assets 40,227   51,708
Total current assets 427,803 542,965
Property and equipment, net 63,998 57,530
Restricted cash and investments 231,193 188,412
Goodwill and intangible assets, net 349,894 422,354
Other assets, net 57,557     48,181
Total assets $ 1,130,445   $ 1,259,442
 
Liabilities and shareholders' equity
Current liabilities $ 251,135 $ 227,976
Long-term debt, less current portion 135,362 243,397
Other long-term liabilities 218,769   252,496
Total liabilities 605,266 723,869
Shareholders' equity 525,179   535,573
Total liabilities and shareholders' equity $ 1,130,445   $ 1,259,442
   
TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 
Fiscal 2016 Fiscal 2015
53 Weeks Ended 52 Weeks Ended

Jan 1, 2017

Dec 25, 2015

Cash flows from operating activities:
Net income (loss) $ (15,251 ) $ 71,247
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization 46,692 41,843
Goodwill and intangible asset impairment charges 103,544 —
Provision for doubtful accounts 8,308 7,132
Stock-based compensation 9,363 11,103
Deferred income taxes (25,355 ) 5,176
Other operating activities 7,910 446
Changes in operating assets and liabilities:
Accounts receivable 112,785 (89,474 )
Income tax receivable 9,450 (16,678 )
Other assets 470 (6,398 )
Accounts payable and other accrued expenses (4,101 ) 23,261
Accrued wages and benefits (7,313 ) 12,203
Workers’ compensation claims reserve 11,070 14,736
Other liabilities 4,182   (2,525 )
Net cash provided by operating activities 261,754   72,072  
 
Cash flows from investing activities:
Capital expenditures (29,042 ) (18,394 )
Acquisitions of businesses (72,476 ) (67,500 )
Sales and maturities of marketable securities — 1,500
Change in restricted cash and cash equivalents (19,773 ) 18,374
Purchases of restricted investments (37,173 ) (51,516 )
Maturities of restricted investments 15,248   12,510  
Net cash used in investing activities (143,216 ) (105,026 )
 
Cash flows from financing activities:
Purchases and retirement of common stock (5,748 ) —
Net proceeds from stock option exercises and employee stock purchase plans 1,542 1,563
Common stock repurchases for taxes upon vesting of restricted stock (2,851 ) (3,869 )
Net change in revolving credit facility (105,579 ) 46,091
Payments on debt (2,456 ) (2,078 )
Other (29 ) 1,079  
Net cash provided by (used in) financing activities (115,121 ) 42,786  
Effect of exchange rate changes on cash and cash equivalents 1,772   283  
Net change in cash and cash equivalents 5,189 10,115
CASH AND CASH EQUIVALENTS, beginning of period 29,781   19,666  
CASH AND CASH EQUIVALENTS, end of period $ 34,970   $ 29,781  
 

TRUEBLUE, INC.

NON-GAAP RECONCILIATIONS

(Unaudited, in thousands, except for per share data)

1. COMPARABLE 13 AND 52 WEEK PERIODS

As previously communicated, the company’s fiscal fourth quarter includes a 14th week and the fiscal year includes a 53rd week, and the week-ending date has been moved from Friday to the following Sunday, Jan. 1, 2017, to better align with the work week of our customers. To facilitate comparison to the prior year, the company is providing 13-week and 52-week comparable operating results. The impact of the added work days is an operating loss of approximately $1 million, as the final week of December is one of the lowest volume weeks of the year and the associated gross profit is more than offset by operating expenses.

 

Q4 2016

  2016
13 Weeks Ended 52 Weeks Ended
Dec 23, 2016   Dec 23, 2016
Revenue from services $ 700,819 $ 2,716,508
Cost of services 526,858   2,043,716  
Gross profit 173,961 672,792
Selling, general and administrative expense 137,682 538,772
Depreciation and amortization 11,160 45,833
Goodwill and intangible asset impairment charge (5) —   103,544  
Income (loss) from operations 25,119 (15,357 )
Interest and other expense, net (531 ) (3,304 )
Income (loss) before tax expense 24,588 (18,661 )
Income tax expense (benefit) 5,242   (4,669 )
Net income (loss) $ 19,346   $ (13,992 )
 
Net income (loss) per common share:
Basic $ 0.46 $ (0.34 )
Diluted $ 0.46 $ (0.34 )
 
Weighted average shares outstanding:
Basic 41,638 41,648
Diluted 41,980 41,648

2. RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE ON A COMPARABLE BASIS

Adjusted net income and Adjusted net income per diluted share are key measures used by management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. Accordingly, the schedule below reconciles the 13-week and 52-week net income (loss) to adjusted net income and adjusted net income per diluted share on a basis comparable to prior year periods.

  Q4 2016   2016   Q1 2017 Outlook*
13 Weeks Ended 52 Weeks Ended 13 Weeks Ended
Dec 23, 2016   Dec 23, 2016 Apr 2, 2017
Net income (loss) $ 19,346 $ (13,992 ) $ (400 )

—

$

1,800
Acquisition/integration and other costs (1) 4,002 12,223

 

—

Goodwill and intangible asset impairment charge (5) — 103,544

 

—

Amortization of intangible assets of acquired businesses (2) 5,934 26,612

 

5,500

Tax effective of adjustments to net income (loss) (3) (2,782 ) (39,866 )

 

(1,500)

Adjust income taxes to normalized effective rate (4) (1,643 ) 556  

 

—

 
Adjusted net income (7) $ 24,857   $ 89,077   $ 3,600  

—

$ 5,800
 
Adjusted net income, per diluted share (7) $ 0.58 $ 2.12 $ 0.09

—

$ 0.14
 
Diluted weighted average shares outstanding 41,980 41,968

 

42,400

* Totals may not sum due to rounding

3. RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA

EBITDA and Adjusted EBITDA are key measures used by management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. Accordingly, the schedule below reconciles the 13-week and 52-week net income (loss) to EBITDA and Adjusted EBITDA on a basis comparable to prior year periods.

  Q4 2016   2016   Q1 2017 Outlook*
13 Weeks Ended   52 Weeks Ended   13 Weeks Ended
Dec 23, 2016 Dec 23, 2016 Apr 2, 2017
Net income (loss) $ 19,346 $ (13,992 ) $ (400 ) — $ 1,800
Income tax expense (benefit) 5,242 (4,669 ) (100 ) — 500

Interest expense, net

531 3,304 100 100
Depreciation and amortization 11,160   45,833  

 

 

12,000

 
EBITDA (8) 36,279 30,476 11,600 — 14,400
Acquisition/integration and other costs (1)

4,002

 

12,223

 

—

Goodwill and intangible asset impairment charge (5) — 103,544

 

—

Work Opportunity Tax Credit processing fees (6) 276   1,858  

 

 

500

 
Adjusted EBITDA (8) $ 40,557   $ 148,101   $ 12,000   — $ 15,000

* Totals may not sum due to rounding

4. RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE EXCLUDING THE COMPANY'S LARGEST CUSTOMER

Due to a previously announced reduction in the scope of services with its largest customer, the company is providing results on a comparable 13-week and 52-week basis excluding the results of this customer to help investors assess the company's underlying results with prior periods.

  Q4 2016   Q4 2015   Fiscal 2016   Fiscal 2015
13 Weeks Ended 52 Weeks Ended
Dec 23, 2016 Dec 25, 2015 Dec 23, 2016 Dec 25, 2015
 
Net income (loss) $ 19,346 $ 28,168 $ (13,992 ) $ 71,247
Acquisition/integration and other costs (1) 4,002 1,348 12,223 5,135
Goodwill and intangible asset impairment charge (5) — — 103,544 —
Amortization of intangible assets of acquired businesses (2) 5,934 5,585

26,612

19,903
Largest customer income before taxes (9) (705 ) (11,393 ) (5,040 ) (24,016 )
Tax effective of adjustments to net income (3) excluding largest customer

(2,585

) 1,249

(38,455

) (286 )
Adjust income taxes to normalized effective rate (4) (1,643 ) (4,506 ) 556   (1,805 )
Adjusted net income (7) on a 13-week comparable basis, excluding largest customer $

24,349

  $ 20,451   $

85,448

  $ 70,178  
 
Adjusted net income, per diluted share (7), excluding largest customer $ 0.57 $ 0.48 $ 2.03 $ 1.68
 
Diluted weighted average shares outstanding 41,980 41,748 41,968 41,622

(1)

 

Acquisition/integration relate to the acquisition of the recruitment process outsourcing business of Aon Hewitt, which was completed on January 4, 2016, and the acquisition of SIMOS, which was completed on December 1, 2015. In addition, other charges include an increase in the SIMOS earn-out of $1.3 million, costs associated with the exit from the Amazon delivery business of $0.8 million in the fourth quarter of 2016 and $1.8 million in the third quarter of 2016, and branch signage write-offs of $1.6 million due to our re-branding to PeopleReady in the third quarter of 2016.

(2)

Amortization of intangible assets of acquired businesses as well as accretion expense related to the SIMOS acquisition earn-out.

(3)

Total tax effect of each of the adjustments to U.S. GAAP Net income (loss) per diluted share using the ongoing rate of 28%.

(4) Adjusts the effective income tax rate to the expected ongoing rate of 28%.
(5)

The Goodwill and intangible asset impairment charge for the 53 weeks ended January 1, 2017, included the write-off of the CLP and Spartan reporting unit trade names/trademarks of $4.3 million due to the re-branding to PeopleReady during the third quarter of 2016, and $99.3 million of impairment charges recorded in the second quarter of 2016 relating to our Staff Management | SMX, hrX, and PlaneTechs reporting units.

(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 and reduce our income taxes.
(7) Adjusted net income and Adjusted net income per diluted share are non-GAAP financial measures, which exclude from Net income (loss) and Net income (loss) on a per diluted share basis, costs related to acquisition/integration and other costs, goodwill and intangible asset impairment charges, amortization of intangibles of acquired businesses as well as accretion expense related to acquisition earn-out, tax effect of each adjustment to U.S. GAAP Net income (loss), and adjusts income taxes to the expected ongoing effective tax rate. Adjusted net income and Adjusted net income per diluted share are key measures used by management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. Adjusted net income and Adjusted net income per diluted share should not be considered measures of financial performance in isolation or as an alternative to net income or net income per diluted share in the Consolidated Statements of Operations in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies. Adjusted net income and net income per diluted share previously excluded the third-party processing fees associated with generating Work Opportunity Tax Credits.
(8) EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA excludes interest, taxes, depreciation and amortization. Adjusted EBITDA further excludes from EBITDA costs related to acquisition/integration and other costs, goodwill and intangible asset impairment charges, and Work Opportunity Tax Credit third-party processing fees. EBITDA and Adjusted EBITDA are key measures used by management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. EBITDA and Adjusted EBITDA should not be considered measures of financial performance in isolation or as an alternative to Income from operations in the Consolidated Statements of Operations in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies.
(9)

The impact of our largest customer.

 

TRUEBLUE, INC.

NON-GAAP RECONCILIATIONS

(Unaudited, in thousands, except for per share data)

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

  Q4   Fiscal Year
14 Weeks Ended   13 Weeks Ended 53 Weeks Ended   52 Weeks Ended
Jan 1, 2017 Dec 25, 2015 Jan 1, 2017 Dec 25, 2015
Net income (loss) $ 18,087 $ 28,168 $ (15,251 ) $ 71,247
Acquisition/integration and other costs (1) 4,002 1,348 12,223 5,135
Goodwill and intangible asset impairment charge (5) — — 103,544 —
Amortization of intangible assets of acquired businesses (2) 6,391 5,585 27,069 19,903
Tax effective of adjustments to net income (loss) (3) (2,910 ) (1,941 ) (39,994 ) (7,011 )
Adjust income taxes to normalized effective rate (4) (1,593 ) (4,506 ) 606   (1,805 )
Adjusted net income (7) $ 23,977   $ 28,654   $ 88,197   $ 87,469  
 
Adjusted net income, per diluted share (7) $ 0.56 $ 0.67 $ 2.10 $ 2.10
 
Diluted weighted average shares outstanding 41,980 41,748 41,968 41,622
 

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

Q4   Fiscal Year
14 Weeks Ended   13 Weeks Ended 53 Weeks Ended   52 Weeks Ended
Jan 1, 2017 Dec 25, 2015 Jan 1, 2017 Dec 25, 2015
Net income (loss) $ 18,087 $ 28,168 $ (15,251 ) $ 71,247
Income tax expense (benefit) 4,822 4,696 (5,089 ) 25,200
Interest expense, net 572 293 3,345 1,395
Depreciation and amortization 12,019   10,428   46,692   41,843
EBITDA (8) 35,500 43,585 29,697 139,685
Acquisition/integration and other costs (1) 4,002

 

1,348 12,223 5,135
Goodwill and intangible asset impairment charge (5) — — 103,544 —
Work Opportunity Tax Credit processing fees (6) 276   1,410   1,858   2,352
Adjusted EBITDA (8) $ 39,778   $ 46,343   $ 147,322   $ 147,172
(1)   Acquisition/integration relate to the acquisition of the recruitment process outsourcing business of Aon Hewitt, which was completed on January 4, 2016, and the acquisition of SIMOS, which was completed on December 1, 2015. In addition, other charges include; an increase in the SIMOS earn-out of $1.3 million, costs associated with the exit from the Amazon delivery business of $0.8 million in the fourth quarter of 2016 and $1.8 million in the third quarter of 2016, and branch signage write-offs of $1.6 million due to our re-branding to PeopleReady in the third quarter of 2016.
(2) Amortization of intangible assets of acquired businesses as well as accretion expense related to the SIMOS acquisition earn-out.
(3) Total tax effect of each of the adjustments to U.S. GAAP Net income (loss) per diluted share using the ongoing rate of 28%.
(4) Adjusts the effective income tax rate to the expected ongoing rate of 28%.
(5)

The Goodwill and intangible asset impairment charge for the 53 weeks ended January 1, 2017, included the write-off of the CLP and Spartan reporting unit trade names/trademarks of $4.3 million due to the re-branding to PeopleReady during the third quarter of 2016, and $99.3 million of impairment charges recorded in the second quarter of 2016 relating to our Staff Management | SMX, hrX, and PlaneTechs reporting units.

(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 and reduce our income taxes.

(7)

Adjusted net income and Adjusted net income per diluted share are non-GAAP financial measures, which exclude from Net income (loss) and Net income (loss) on a per diluted share basis, costs related to acquisition/integration and other costs, goodwill and intangible asset impairment charges, amortization of intangibles of acquired businesses as well as accretion expense related to acquisition earn-out, tax effect of each adjustment to U.S. GAAP Net income (loss), and adjusts income taxes to the expected ongoing effective tax rate. Adjusted net income and Adjusted net income per diluted share are key measures used by management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. Adjusted net income and Adjusted net income per diluted share should not be considered measures of financial performance in isolation or as an alternative to net income or net income per diluted share in the Consolidated Statements of Operations in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies. Adjusted net income and net income per diluted share previously excluded the third-party processing fees associated with generating Work Opportunity Tax Credits.

(8)

EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA excludes interest, taxes, depreciation and amortization. Adjusted EBITDA further excludes from EBITDA costs related to acquisition/integration and other costs, goodwill and intangible asset impairment charges, and Work Opportunity Tax Credit third-party processing fees. EBITDA and Adjusted EBITDA are key measures used by management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. EBITDA and Adjusted EBITDA should not be considered measures of financial performance in isolation or as an alternative to Income from operations in the Consolidated Statements of Operations in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies.

       

TRUEBLUE, INC.

SEGMENT DATA

(Unaudited, in thousands)

 

Q4 2016

Fiscal 2016

Q4 2015

Fiscal 2015

14 Weeks Ended 13 Weeks Ended 53 Weeks Ended 52 Weeks Ended
Jan 1, 2017 Dec 25, 2015 Jan 1, 2017 Dec 25, 2015
Revenue from services
PeopleReady $ 431,388 $ 436,044 $ 1,629,455 $ 1,625,817
PeopleManagement 257,848 347,688 940,453 965,331
PeopleScout 45,715   27,001   180,732   104,532  
Total Company 734,951   810,733   2,750,640   2,695,680  
 
Adjusted EBITDA (1)
PeopleReady $ 26,348 $ 32,753 $ 109,063

 

$ 126,251
PeopleManagement 11,903 19,334 27,557 36,512
PeopleScout 6,589   279   34,285   9,324  
44,840 52,366 170,905 172,087
Corporate unallocated expense (2) (5,062 ) (6,023 ) (23,583 ) (24,915 )
Total company Adjusted EBITDA 39,778 46,343 147,322 147,172
Acquisition/integration and other costs (3) (4,002 ) (1,348 ) (12,223 ) (5,135 )
Goodwill and intangible asset impairment charge (4) — — (103,544 ) —
Work Opportunity Tax Credit processing fees (5) (276 ) (1,410 ) (1,858 ) (2,352 )
EBITDA (1) 35,500 43,585 29,697 139,685
Depreciation and amortization (12,019 ) (10,428 ) (46,692 ) (41,843 )
Interest and other expense, net (572 ) (293 ) (3,345 ) (1,395 )
Income (loss) before tax expense 22,909 32,864 (20,340 ) 96,447
Income tax (expense) benefit (4,822 ) (4,696 ) 5,089   (25,200 )
Net income (loss) $ 18,087   $ 28,168   $ (15,251 ) $ 71,247  

Due to the extra week of results in the fiscal fourth quarter of 2016, the company is also providing results on a 13-week and 52-week basis to enhance comparability with prior year periods, as follows:

  U.S. GAAP   Non-GAAP   U.S. GAAP   Non-GAAP
Q4 2016 Fiscal 2016
14 Weeks Ended 13 Weeks Ended 53 Weeks Ended 52 Weeks Ended

Jan 1, 2017

Dec 23, 2016

Jan 1, 2017

Dec 23, 2016

Revenue from services
PeopleReady $ 431,388 $ 410,936 $ 1,629,455 $ 1,609,003
PeopleManagement 257,848 246,048 940,453 928,653
PeopleScout 45,715   43,835   180,732   178,852
Total Company 734,951   700,819   2,750,640   2,716,508
 
Adjusted EBITDA (1)
PeopleReady $ 26,348 $ 26,013 $ 109,063

 

$ 108,728
PeopleManagement 11,903 11,978 27,557 27,632
PeopleScout 6,589   7,128   34,285   34,824
$ 44,840   $ 45,119   $ 170,905   $ 171,184
(1)   EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA excludes interest, taxes, depreciation and amortization. Adjusted EBITDA further excludes from EBITDA costs related to acquisition/integration and other costs, goodwill and intangible asset impairment charges, and Work Opportunity Tax Credit third-party processing fees. EBITDA and Adjusted EBITDA are key measures used by management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. EBITDA and Adjusted EBITDA should not be considered measures of financial performance in isolation or as an alternative to Income from operations in the Consolidated Statements of Operations in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies.
(2) Beginning in the fourth quarter of 2016, we changed our methodology for allocating certain corporate costs to our segments, which decreased our corporate unallocated expenses. We have adjusted the prior year amounts to reflect this change for consistency purposes.
(3) Acquisition/integration relate to the acquisition of the recruitment process outsourcing business of Aon Hewitt, which was completed on January 4, 2016, and the acquisition of SIMOS, which was completed on December 1, 2015. In addition, other charges include; an increase in the SIMOS earn-out of $1.3 million, costs associated with the exit from the Amazon delivery business of $0.8 million in the fourth quarter of 2016 and $1.8 million in the third quarter of 2016, and branch signage write-offs of $1.6 million due to our re-branding to PeopleReady in the third quarter of 2016.
(4)

The Goodwill and intangible asset impairment charge for the 53 weeks ended January 1, 2017, included the write-off of the CLP and Spartan reporting unit trade names/trademarks of $4.3 million due to the re-branding to PeopleReady during the third quarter of 2016, and $99.3 million of impairment charges recorded in the second quarter of 2016 relating to our Staff Management | SMX, hrX, and PlaneTechs reporting units.

(5) 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 and reduce our income taxes.

TrueBlue, Inc.
Derrek Gafford, 253-680-8214
EVP & CFO

Source: TrueBlue, Inc.

Released February 8, 2017