TrueBlue Reports First Quarter 2022 Results

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Strong results driven by revenue growth across all segments and operating margin expansion

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

First quarter revenue was $552 million, an increase of 20 percent compared to revenue of $459 million in the first quarter of 2021. Net income per diluted share was $0.30 compared to net income per diluted share of $0.20 in the first quarter of 2021. First quarter adjusted net income1 per diluted share was $0.44 compared to adjusted net income per diluted share of $0.25 in the first quarter of 2021.

“We are off to a strong start to the year with our fourth consecutive quarter of double-digit revenue growth and continued operating margin expansion,” said Patrick Beharelle, CEO of TrueBlue. “I’m pleased to report revenue growth across all three segments as we continue to capitalize on widespread demand for our services. PeopleReady revenue growth benefited from bill rate increases and worker supply improvement, while PeopleScout delivered a fourth consecutive quarter of growth driven by new and existing client demand. We are also pleased with the revenue growth in our PeopleManagement business despite global supply chain challenges.

“Our ongoing commitment to our digital strategies combined with our focus on improving operational efficiencies are driving operating margin expansion and creating a competitive advantage for us in the market,” Mr. Beharelle continued. “With these strategies in place, we are well-positioned for long-term, profitable growth.”

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 first quarter 2022 results on a webcast at 2:30 p.m. PT (5:30 p.m. ET), today, Monday, Apr. 25, 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

(in thousands, except per share data)

Mar 27, 2022

 

Mar 28, 2021

Revenue from services

$

551,515

 

$

458,706

Cost of services

 

411,670

 

 

348,132

Gross profit

 

139,845

 

 

110,574

Selling, general and administrative expense

 

120,568

 

 

97,401

Depreciation and amortization

 

7,287

 

 

6,962

Income from operations

 

11,990

 

 

6,211

Interest expense and other income, net

 

505

 

 

575

Income before tax expense (benefit)

 

12,495

 

 

6,786

Income tax expense (benefit)

 

1,976

 

 

(112)

Net income

$

10,519

 

$

6,898

 

 

 

 

Net income per common share:

 

 

 

Basic

$

0.31

 

$

0.20

Diluted

$

0.30

 

$

0.20

 

 

 

 

Weighted average shares outstanding:

 

 

 

Basic

 

33,929

 

 

34,674

Diluted

 

34,544

 

 

35,066

 

TRUEBLUE, INC.

SUMMARY CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(in thousands)

Mar 27, 2022

 

Dec 26, 2021

ASSETS

 

 

 

Cash and cash equivalents

$

        36,720

 

$

        49,896

Accounts receivable, net

 

        325,197

 

 

        353,882

Other current assets

 

         36,432

 

 

         41,295

Total current assets

 

        398,349

 

 

        445,073

Property and equipment, net

 

         87,751

 

 

         88,090

Restricted cash and investments

 

        216,163

 

 

        221,026

Goodwill and intangible assets, net

 

        115,383

 

 

        116,749

Other assets, net

 

        163,273

 

 

        162,288

Total assets

$

      980,919

 

$

   1,033,226

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Accounts payable and other accrued expenses

$

        63,544

 

$

        77,172

Accrued wages and benefits

 

         81,142

 

 

        100,173

Current portion of workers’ compensation claims reserve

 

         58,890

 

 

         61,596

Other current liabilities

 

         22,321

 

 

         19,605

Total current liabilities

 

        225,897

 

 

        258,546

Workers’ compensation claims reserve, less current portion

 

        197,472

 

 

        194,598

Long-term debt, less current portion

 

           4,000

 

 

                —

Other long-term liabilities

 

         85,999

 

 

         87,015

Total liabilities

 

        513,368

 

 

        540,159

Shareholders’ equity

 

        467,551

 

 

        493,067

Total liabilities and shareholders’ equity

$

      980,919

 

$

   1,033,226

 

TRUEBLUE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

13 weeks ended

(in thousands)

Mar 27, 2022

 

Mar 28, 2021

Cash flows from operating activities:

 

 

 

Net income

$

10,519

 

$

6,898

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

 

 

 

Depreciation and amortization

 

7,287

 

 

6,962

Provision for credit losses

 

989

 

 

207

Stock-based compensation

 

3,812

 

 

3,343

Deferred income taxes

 

1,258

 

 

(5,002)

Non-cash lease expense

 

3,281

 

 

3,920

Other operating activities

 

2,608

 

 

(438)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

27,702

 

 

18,025

Income tax receivable

 

(1,252)

 

 

4,910

Operating lease right-of-use-asset

 

—

 

 

3,501

Other assets

 

4,267

 

 

(4,578)

Accounts payable and other accrued expenses

 

(13,257)

 

 

(9,633)

Accrued wages and benefits

 

(19,031)

 

 

4,249

Workers’ compensation claims reserve

 

168

 

 

(1,499)

Operating lease liabilities

 

(3,319)

 

 

(3,320)

Other liabilities

 

1,410

 

 

338

Net cash provided by operating activities

 

26,442

 

 

27,883

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(5,779)

 

 

(10,003)

Purchases of restricted available-for-sale investments

 

—

 

 

(14)

Sales of restricted available-for-sale investments

 

—

 

 

452

Maturities of restricted held-to-maturity investments

 

6,034

 

 

6,371

Net cash provided by (used in) investing activities

 

255

 

 

(3,194)

Cash flows from financing activities:

 

 

 

Purchases and retirement of common stock

 

(36,326)

 

 

—

Net proceeds from employee stock purchase plans

 

319

 

 

255

Common stock repurchases for taxes upon vesting of restricted stock

 

(3,970)

 

 

(2,555)

Net change in revolving credit facility

 

4,000

 

 

—

Other

 

(72)

 

 

(94)

Net cash used in financing activities

 

(36,049)

 

 

(2,394)

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

 

(57)

 

 

262

Net change in cash, cash equivalents, and restricted cash

 

(9,409)

 

 

22,557

Cash, cash equivalents and restricted cash, beginning of period

 

103,185

 

 

118,612

Cash, cash equivalents and restricted cash, end of period

$

93,776

 

$

141,169

 

TRUEBLUE, INC.

SEGMENT DATA

(Unaudited)

 

 

13 weeks ended

(in thousands)

Mar 27, 2022

 

Mar 28, 2021

Revenue from services:

 

 

 

PeopleReady

$

305,690

 

$

260,392

PeopleManagement

 

163,819

 

 

151,754

PeopleScout

 

82,006

 

 

46,560

Total company

$

551,515

 

$

458,706

 

 

 

 

Segment profit (1):

 

 

 

PeopleReady

$

16,219

 

$

11,860

PeopleManagement

 

2,979

 

 

3,116

PeopleScout

 

10,972

 

 

4,037

Total segment profit

 

30,170

 

 

19,013

Corporate unallocated expense

 

(7,298)

 

 

(5,619)

Total company Adjusted EBITDA (2)

 

22,872

 

 

13,394

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

 

(162)

 

 

(135)

Amortization of software as a service assets (4)

 

(747)

 

 

(673)

PeopleReady technology implementation costs (5)

 

(2,550)

 

 

—

COVID-19 government subsidies, net

 

—

 

 

1,743

Other adjustments, net (6)

 

(136)

 

 

(1,156)

EBITDA (2)

 

19,277

 

 

13,173

Depreciation and amortization

 

(7,287)

 

 

(6,962)

Interest expense and other income, net

 

505

 

 

575

Income before tax benefit (expense)

 

12,495

 

 

6,786

Income tax benefit (expense)

 

(1,976)

 

 

112

Net income

$

10,519

 

$

6,898

  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. Implementation costs associated with upgrading legacy PeopleReady technology with a new platform.
  6. Other adjustments for the 13 weeks ended March 27, 2022 include costs of $0.1 million incurred while transitioning to a new third party administrator for workers’ compensation. Other adjustments for the 13 weeks ended March 28, 2021 primarily include costs of $0.8 million incurred while transitioning into our new Chicago office.

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 implementation costs,

– COVID-19 government subsidies, net,

– 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:

– 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,

– PeopleReady technology implementation costs,

– COVID-19 government subsidies, net, and

– other adjustments, net.

 

 

– Enhances comparability on a consistent basis and provides investors with useful insight into the underlying trends of the business.

– Used by management to assess performance and effectiveness of our business strategies.

– Provides a measure, among others, used in the determination of incentive compensation for management.

Adjusted SG&A expenses

 

Selling, general and administrative expenses excluding:

– third-party processing fees for hiring tax credits,

– amortization of software as a service assets,

– PeopleReady technology implementation costs,

– COVID-19 government subsidies, net, and

– other adjustments, net.

 

 

– Enhances comparability on a consistent basis and provides investors with useful insight into the underlying trends of the business.

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

 

 

13 weeks ended

(in thousands, except for per share data)

Mar 27, 2022

 

Mar 28, 2021

Net income

$

10,519

 

$

6,898

Amortization of intangible assets

 

1,502

 

 

1,885

Amortization of software as a service assets (1)

 

747

 

 

673

Accelerated depreciation (2)

 

516

 

 

—

PeopleReady technology implementation costs (3)

 

2,550

 

 

—

COVID-19 government subsidies, net (4)

 

—

 

 

(1,743)

Other adjustments, net (5)

 

136

 

 

1,156

Tax effect of adjustments to net income (6)

 

(862)

 

 

33

Adjusted net income

$

15,108

 

$

8,902

 

 

 

 

Adjusted net income per diluted share

$

0.44

 

$

0.25

 

 

 

 

Diluted weighted average shares outstanding

 

34,544

 

 

35,066

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

(Unaudited)

 

 

13 weeks ended

(in thousands)

Mar 27, 2022

 

Mar 28, 2021

Net income

$

10,519

 

$

6,898

Income tax expense

 

1,976

 

 

(112)

Interest expense and other (income), net

 

(505)

 

 

(575)

Depreciation and amortization

 

7,287

 

 

6,962

EBITDA

 

19,277

 

 

13,173

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

 

162

 

 

135

Amortization of software as a service assets (1)

 

747

 

 

673

PeopleReady technology implementation costs (3)

 

2,550

 

 

—

COVID-19 government subsidies, net (4)

 

—

 

 

(1,743)

Other adjustments, net (5)

 

136

 

 

1,156

Adjusted EBITDA

$

22,872

 

$

13,394

 

 

 

 

Margin / % of revenue:

 

 

 

Net income

 

1.9 %

 

 

1.5 %

Adjusted EBITDA

 

4.1 %

 

 

2.9 %

3. RECONCILIATION OF U.S. GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSES TO ADJUSTED SG&A EXPENSES

(Unaudited)

 

 

13 weeks ended

(in thousands)

Mar 27, 2022

 

Mar 28, 2021

Selling, general and administrative expenses

$

120,568

 

$

97,401

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

 

(162)

 

 

(135)

Amortization of software as a service assets (1)

 

(747)

 

 

(673)

PeopleReady technology implementation costs (3)

 

(2,550)

 

 

—

COVID-19 government subsidies, net (4)

 

—

 

 

1,618

Other adjustments, net (5)

 

(136)

 

 

(1,156)

Adjusted SG&A expenses

$

116,973

 

$

97,055

  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 new PeopleReady technology platform.
  3. Implementation costs associated with upgrading legacy PeopleReady technology with a new platform.
  4. Net impact of COVID-19 related government subsidies of $1.7 million ($0.1 million in cost of services and $1.6 million in selling, general and administrative expenses).
  5. Other adjustments for the 13 weeks ended March 27, 2022 include costs of $0.1 million incurred while transitioning to a new third party administrator for workers’ compensation. Other adjustments for the 13 weeks ended March 28, 2021 primarily include costs of $0.8 million incurred while transitioning into our new Chicago office.
  6. Total tax effect of each of the adjustments to U.S. GAAP net income using the effective income tax rate for the respective periods.
  7. These third-party processing fees are associated with generating hiring tax credits.

 

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

Source: TrueBlue

Released April 25, 2022