TrueBlue Reports 2008 Fourth Quarter Results
TACOMA, Wash.--(BUSINESS WIRE)-- TrueBlue Inc. today reported a net loss of $46.0 million or $1.08 per diluted share for the quarter ended Dec. 26, 2008, a decrease from net income of $14.4 million or $0.33 per diluted share for the fourth quarter of 2007. EBITDA(a) for the fourth quarter of 2008 was $9.6 million compared to $24.0 million for the fourth quarter of 2007. Revenue for the quarter was $302 million, a decrease of 15 percent compared to the fourth quarter of 2007. The 15 percent revenue decline for the quarter consisted of a 13 percent growth from acquisitions completed within the last 12 months offset by a 28 percent decrease in organic revenue.
Fourth quarter 2008 results include a goodwill and intangible asset impairment charge of $61 million ($49.3 million after tax) or $1.15(b) per diluted share related to the company's acquisitions over the past five years. Excluding this impairment charge, net income would have been $3.3 million(b) or $0.08(b) per diluted share. The charge is largely a result of the adverse impact on expected future cash flows related to the state of the economy. The charge does not impact the company's cash, liquidity, or banking covenants.
"The decline in demand for our services accelerated in the fourth quarter," said TrueBlue CEO Steve Cooper. "We will continue our focus on aggressive cost management and on maintaining our strong financial position. Labor markets have made extreme adjustments during this recession, and we have made corresponding adjustments to our cost structure. We are committed to continuing to connect people to work through our five blue-collar brands and to help our customers manage their labor needs through these turbulent times."
In the fourth quarter, TrueBlue closed 70 branches bringing year-to-date branch closures for 2008 to 102 branches resulting in a total of 850 branches in operation at the end of the year.
For the first quarter of 2009, TrueBlue estimates revenue in the range of $220 to $230 million and loss per diluted share for the quarter of $0.15 to $0.20.
Management will discuss fourth quarter 2008 results on a conference call at 2 p.m. (PT), today, Wednesday Feb. 4, 2009. The conference call can be accessed on TrueBlue's web site: www.TrueBlueInc.com.
About TrueBlue
TrueBlue (NYSE: TBI) is the leading provider of blue-collar staffing with revenue of approximately $1.4 billion. Each year, TrueBlue connects approximately 500,000 people to work through the following brands: Labor Ready, Spartan Staffing, CLP Resources, PlaneTechs, and TLC. Headquartered in Tacoma, Wash., TrueBlue serves approximately 250,000 small to mid-sized businesses in the construction, warehousing, hospitality, landscaping, transportation, light manufacturing, retail, wholesale, facilities, sanitation, and aviation industries. For more information, visit TrueBlue's website at www.TrueBlueInc.com.
Forward-looking Statements
This news release contains forward-looking statements, such as statements about the ranges of revenues, gross margins and net income anticipated for future periods, improvements in safety and workers' compensation claims and costs, strategies for increasing revenue and net income, and other factors that may affect TrueBlue's financial results and operations in the future. TrueBlue's actual results are, however, subject to a number of risks, including without limitation the following: 1) national and global economic conditions, including the impact of changes in national and global credit markets and other changes on TrueBlue customers; 2) TrueBlue's ability to continue to attract and retain customers and maintain profit margins in the face of new and existing competition; 3) potential new laws and regulations that could have a materially adverse effect on TrueBlue's operations and financial results; 4) significant labor disturbances which could disrupt industries TrueBlue serves; 5) increased costs and collateral requirements in connection with TrueBlue's insurance obligations, including workers' compensation insurance; 6) the adequacy of TrueBlue's financial reserves; 7) TrueBlue's continuing ability to comply with financial covenants in its lines of credit and other financing agreements; 8) TrueBlue's ability to attract and retain competent employees in key positions or to find temporary employees or skilled trade workers to fulfill the needs of our customers; 9) TrueBlue's ability to successfully complete and integrate acquisitions that it may make from time to time; 10) TrueBlue's ability to timely execute strategies for acquired companies; and 11) other risks described in TrueBlue's filings with the Securities and Exchange Commission, including its most recent Form 10-K and Form 10-Q filings.
Definitions
(a) EBITDA is defined, discussed and reconciled to net income (loss) in the financial schedules filed with this release.
(b) The $1.15 impact per diluted share related to the goodwill and intangible asset impairment is calculated by taking $49.3 million, which is the net of tax impact of the impairment, and dividing it by the diluted number of shares for the fourth quarter of 2008. Net income of $3.3 million, which excludes the impairment, net of tax, is calculated by taking the net loss for the fourth quarter of $46 million and adding back the impairment, net of tax, of $49.3 million. Net income per diluted share of $0.08, which excludes the impairment, net of tax, is calculated by taking $3.3 million and dividing it by the diluted number of shares for the fourth quarter of 2008.
TrueBlue, Inc.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
In Thousands, except per share data
Thirteen Weeks Ended Fiscal Years Ended
December 26, December 28, December 26, December 28,
2008 2007 2008 2007
(Unaudited) (Unaudited) (Unaudited)
Revenue from services $ 301,629 $ 353,616 $ 1,384,269 $ 1,385,656
Cost of services 213,193 241,705 971,757 943,563
Gross profit 88,436 111,911 412,512 442,093
Selling, general and
administrative expenses 78,834 87,865 332,113 336,220
Goodwill and intangible
asset impairment (1) 61,000 - 61,000 -
Depreciation and 4,911 3,562 16,774 12,223
amortization
(Loss) income from (56,309 ) 20,484 2,625 93,650
operations
Interest and other 961 2,729 5,530 10,953
income, net
(Loss) income before tax (55,348 ) 23,213 8,155 104,603
(benefit) expense
Income tax (benefit) (9,325 ) 8,860 12,314 38,405
expense
Net (loss) income $ (46,023 ) $ 14,353 $ (4,159 ) $ 66,198
Net (loss) income per
common share:
Basic $ (1.08 ) $ 0.33 $ (0.10 ) $ 1.45
Diluted $ (1.08 ) $ 0.33 $ (0.10 ) $ 1.44
Weighted average shares
outstanding:
Basic 42,522 43,280 42,885 45,683
Diluted 42,763 43,513 43,073 45,960
(1) The goodwill and intangible asset impairment relates to our investments in
CLP, Spartan Staffing and TLC. The impact on net (loss) income is $49.3 million
after tax or $1.15 per diluted share for the thirteen weeks and fiscal year
ended December 26, 2008. Explanations for the calculation of the impact of the
impairment on diluted earnings per share are discussed in the press release and
associated 8K filing.
TrueBlue, Inc.
SUMMARY CONSOLIDATED BALANCE SHEETS
In Thousands
December 26, December 28,
2008 2007
(Unaudited)
Assets
Current assets
Cash and cash equivalents $ 108,102 $ 57,008
Marketable securities - 10,954
Accounts receivable, net 104,979 140,027
Other current assets 29,723 21,519
Total current assets 242,804 229,508
Property and equipment, net 61,542 44,909
Restricted cash 120,323 132,497
Other assets 95,006 138,335
Total assets $ 519,675 $ 545,249
Liabilities and shareholders' equity
Current liabilities $ 95,308 $ 114,538
Long-term liabilities 154,238 146,884
Total liabilities 249,546 261,422
Shareholders' equity 270,129 283,827
Total liabilities and shareholders' equity $ 519,675 $ 545,249
TrueBlue, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
Fiscal Years Ended
December 26, December 28,
2008 2007
(Unaudited)
Cash flows from operating activities:
Net (loss) income $ (4,159 ) $ 66,198
Adjustments to reconcile net (loss) income to net
cash provided by operating activities:
Depreciation and amortization 16,774 12,223
Goodwill and intangible asset impairment 61,000 -
Provision for doubtful accounts 9,374 9,987
Stock-based compensation 7,706 6,943
Excess tax benefits from stock-based compensation - (1,451 )
Deferred income taxes 2,960 (8,696 )
Other operating activities (311 ) 401
Changes in operating assets and liabilities,
exclusive of businesses acquired:
Accounts receivable 36,602 (10,897 )
Income taxes (25,170 ) 12,359
Other assets 3,133 3,734
Accounts payable and other accrued expenses (5,199 ) 270
Accrued wages and benefits (8,815 ) (2,541 )
Workers' compensation claims reserve 1,680 5,748
Other liabilities (3,137 ) 4,376
Net cash provided by operating activities 92,438 98,654
Cash flows from investing activities:
Capital expenditures (26,137 ) (21,040 )
Purchases of marketable securities (27,158 ) (191,032 )
Maturities of marketable securities 38,087 271,580
Acquisitions of businesses, net of cash acquired (22,390 ) (76,902 )
Change in restricted cash 12,174 11,234
Other (11 ) (167 )
Net cash used in investing activities (25,435 ) (6,327 )
Cash flows from financing activities:
Purchases and retirement of common stock (15,997 ) (150,310 )
Net proceeds from sale of stock through options and 3,488 5,712
employee benefit plans
Shares withheld for taxes upon vesting of restricted (1,018 ) (997 )
stock
Excess tax benefits from stock-based compensation - 1,451
Payments on debt (250 ) (909 )
Other (229 ) -
Net cash used in financing activities (14,006 ) (145,053 )
Effect of exchange rates on cash (1,903 ) 1,790
Net change in cash and cash equivalents 51,094 (50,936 )
CASH AND CASH EQUIVALENTS, beginning of year 57,008 107,944
CASH AND CASH EQUIVALENTS, end of year $ 108,102 $ 57,008
Source: TrueBlue Inc.
Released February 4, 2009