TRUEBLUE REPORTS RECORD FOURTH QUARTER AND YEAR-END 2015 RESULTS
Organic Growth Accelerates, Two Recent Acquisitions Expand Services
 
TACOMA, WASH.--Feb. 3, 2016--TrueBlue, Inc. (NYSE:TBI) today announced fourth quarter and full-year 2015 results, including revenue in the fourth quarter of $811 million, up 17 percent from $691 million in the fourth quarter of 2014. Full-year revenue was a record $2.7 billion, an increase of 24 percent compared to 2014

TrueBlue’s fourth quarter adjusted net income per share* was $0.66, up from $0.62 in the same quarter last year. Full-year adjusted net income per share of $2.02 is an increase of 20 percent compared to 2014. Adjusted EBITDA* also rose to $46 million in the quarter, compared to $44 million for the fourth quarter of 2014.  Full-year, adjusted EBITDA increased 23 percent to $147 million
 
“I am pleased to report that we achieved 14 percent organic revenue growth for the fourth quarter and seven percent for 2015 compared to the prior year,” said TrueBlue CEO Steve Cooper. “In our core business, we saw widespread growth serving the specialized staffing needs of small- to mid-sized customers. Construction had a strong quarter with double-digit sales growth, and we saw improvement in manufacturing. These overall results confirm that our strategies, which focus on building organic growth and adding value through acquisitions, are working well.”
 
TrueBlue acquired SIMOS, a leading provider of on premise workforce management solutions, effective Dec. 1, 2015. TrueBlue also acquired Aon Hewitt’s recruitment process outsourcing (RPO) business, which provides scalable permanent recruiting solutions, at the beginning of 2016. 
 
“We continue to invest in business growth and our new acquisitions combine well with our existing business to put us in a strong position as we head into 2016,” Cooper said.  “We believe the RPO market has tremendous potential on a worldwide scale, which is why we are so pleased that we could bring the RPO operations of one of the industry’s global leaders to our RPO brand PeopleScout. In addition, the SIMOS acquisition really complements the work Staff Management | SMX is doing to offer businesses large scale, on premise management with a focus on improving productivity.”

Cooper said the company estimates adjusted EBITDA will grow nearly 30 percent in 2016 as a result of these two acquisitions and the increased momentum in organic growth.

TrueBlue estimates revenue in the range of $660 million to $675 million, an increase of 15 to 18 percent, and adjusted net income per diluted share of $0.23 to $0.28, for the first quarter of 2016.

TrueBlue estimates revenue of $3.1 billion, an increase of 16 percent, and adjusted net income per diluted share of $2.65.

Management will discuss fourth quarter and full-year 2015 results on a conference call at 2 p.m. PT (5 p.m. ET), today, Wednesday, Feb. 3. The conference call can be accessed on TrueBlue’s website: www.trueblue.com

*The definitions of Adjusted EPS and Adjusted EBITDA have been modified. See the financial statements accompanying the release and the company’s website for more information on non-GAAP terms.

About TrueBlue
TrueBlue (NYSE: TBI) is a leading provider of specialized workforce solutions, helping clients improve growth and performance by providing staffing, workforce management, and recruitment process outsourcing solutions. The company’s specialized workforce solutions meet clients’ needs for a reliable, efficient workforce in a wide variety of industries. TrueBlue connects as many as 750,000 people to work each year. Learn more at www.trueblue.com.
 
Forward-looking Statements
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “should,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates,” and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict.





Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Examples of such factors can be found in our reports filed with the SEC, including the information under the heading ‘Risk Factors’ in our Annual Report on Form 10-K for the fiscal year ended Dec. 26, 2014. Any forward-looking statement speaks only as of the date on which it is made, and 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. 
 
Management is providing full-year 2016 guidance on a one-time basis to enhance clarity around recent acquisitions and current expectations for the long-term performance potential of the business.  Please refer to the earnings release slides at www.trueblue.com for additional details and disclaimers.
 
Contact:
Derrek Gafford, EVP & CFO
253-680-8214






TRUEBLUE, INC.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
 
13 Weeks Ended
 
52 Weeks Ended
 
December 25, 2015
 
December 26, 2014
 
December 25, 2015
 
December 26, 2014
Revenue from services
$
810,733

 
$
691,390

 
$
2,695,680

 
$
2,174,045

Cost of services
625,729

 
533,152

 
2,060,007

 
1,637,066

Gross profit
185,004

 
158,238

 
635,673

 
536,979

Selling, general and administrative expenses
141,419

 
117,123

 
495,988

 
425,777

Depreciation and amortization
10,428

 
9,347

 
41,843

 
29,474

Income from operations
33,157

 
31,768

 
97,842

 
81,728

Interest and other income (expense), net
(293
)
 
(269
)
 
(1,395
)
 
116

Income before tax expense
32,864

 
31,499

 
96,447

 
81,844

Income tax expense
4,696

 
4,472

 
25,200

 
16,169

Net income
$
28,168

 
$
27,027

 
$
71,247

 
$
65,675

 
 
 
 
 
 
 
 
Net income per common share:
 
 
 
 
 
 
 
Basic
$
0.68

 
$
0.67

 
$
1.73

 
$
1.61

Diluted
$
0.67

 
$
0.65

 
$
1.71

 
$
1.59

 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
Basic
41,337

 
40,832

 
41,226

 
40,734

Diluted
41,748

 
41,317

 
41,622

 
41,176









TRUEBLUE, INC.
SEGMENT DATA
(Unaudited, in thousands)
 
13 Weeks Ended
 
52 Weeks Ended
 
December 25, 2015
 
December 26, 2014
 
December 25, 2015
 
December 26, 2014
Revenue from services
 
 
 
 
 
 
 
Staffing Services
$
783,732

 
$
668,082

 
$
2,591,166

 
$
2,125,915

Managed Services
27,001

 
23,308

 
104,514

 
48,130

Total Company
$
810,733

 
$
691,390

 
$
2,695,680

 
$
2,174,045

 
 
 
 
 
 
 
 
Adjusted EBITDA, current definition (1)
 
 
 
 
 
 
 
Staffing Services
$
52,903

 
$
46,056

 
$
167,198

 
$
141,225

Managed Services
1,365

 
2,215

 
12,344

 
5,937

 
54,268


48,271

 
179,542

 
147,162

Corporate unallocated
(7,925
)
 
(4,598
)
 
(32,370
)
 
(27,720
)
Adjusted EBITDA, current definition (1)
46,343


43,673

 
147,172

 
119,442

WOTC processing fees (2)
(1,410
)
 
(1,665
)
 
(2,352
)
 
(3,020
)
Adjusted EBITDA, as previously defined (3)
44,933

 
42,008

 
144,820

 
116,422

Non-recurring acquisition and integration costs (4)
(1,348
)

(893
)

(5,135
)

(5,220
)
EBITDA
43,585


41,115

 
139,685

 
111,202

 
 
 
 
 
 
 
 
Depreciation and amortization
10,428

 
9,347

 
41,843

 
29,474

Interest expense (income), net
293

 
269

 
1,395

 
(116
)
Income before tax expense
$
32,864



$
31,499

 
$
96,447

 
$
81,844


(1)
EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA excludes interest, taxes, depreciation and amortization from net income. Adjusted EBITDA further excludes from EBITDA non-recurring costs related to acquisition and integration costs, as well as, Work Opportunity Tax Credit third-party processing fees. EBITDA and Adjusted EBITDA are key measures used by management to evaluate performance. 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 GAAP, and may not be comparable to similarly titled measures of other companies.

(2)
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.

(3)
Adjusted EBITDA, as previously defined, included Work Opportunity Tax Credit third-party processing fees.

(4)
Non-recurring acquisition and integration costs consist of the acquisition and integration of Seaton, which was completed on June 30, 2014, the first business day of our third quarter of 2014, and the acquisition related costs for SIMOS and the recruitment process outsourcing business of Aon Hewitt, which were completed on December 1, 2015, and January 4, 2016, respectively.







TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)

 
December 25, 2015
 
December 26, 2014
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
31,741

 
$
19,666

Marketable securities

 
1,500

Accounts receivable, net
467,932

 
359,903

Other current assets
60,477

 
34,738

Total current assets
560,150

 
415,807

Property and equipment, net
57,530

 
61,392

Restricted cash and investments
187,153

 
168,426

Goodwill and intangible assets, net
436,313

 
378,415

Other assets, net
48,181

 
42,631

Total assets
$
1,289,327

 
$
1,066,671

 
 
 
 
Liabilities and shareholders' equity
 
 
 
Current liabilities
$
238,090

 
$
187,230

Long-term debt, less current portion
243,397

 
199,383

Other long-term liabilities
257,591

 
210,724

Total liabilities
739,078

 
597,337

Shareholders' equity
550,249

 
469,334

Total liabilities and shareholders' equity
$
1,289,327

 
$
1,066,671






TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
 
52 Weeks Ended
 
December 25, 2015
 
December 26, 2014
Cash flows from operating activities:
 
 
 
Net income
$
71,247

 
$
65,675

Adjustments to reconcile net income to net cash from operating activities:
 
 
 
Depreciation and amortization
41,843

 
29,474

Provision for doubtful accounts
7,132

 
11,815

Stock-based compensation
11,103

 
11,051

Deferred income taxes
5,176

 
12,663

Other operating activities
446

 
898

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(95,930
)
 
(77,629
)
Income tax receivable
(16,678
)
 
(5,696
)
Other assets
(6,398
)
 
(7,361
)
Accounts payable and other accrued expenses
29,979

 
(8,683
)
Accrued wages and benefits
12,203

 
12,069

Workers’ compensation claims reserve
14,736

 
1,579

Other liabilities
(827
)
 
1,670

Net cash provided by operating activities
74,032

 
47,525

 
 
 
 
Cash flows from investing activities:
 
 
 
Capital expenditures
(18,394
)
 
(16,918
)
Acquisition of businesses, net of cash acquired
(67,500
)
 
(305,876
)
Purchases of marketable securities

 
(25,057
)
Sales and maturities of marketable securities
1,500

 
44,167

Change in restricted cash and cash equivalents
18,374

 
(9,283
)
Purchases of restricted investments
(51,516
)
 
(18,196
)
Maturities of restricted investments
12,510

 
12,726

Net cash used in investing activities
(105,026
)
 
(318,437
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Net proceeds from stock option exercises and employee stock purchase plans
1,563

 
2,191

Common stock repurchases for taxes upon vesting of restricted stock
(3,869
)
 
(3,114
)
Net change in revolving credit facility
46,091

 
171,994

Payments on debt and other liabilities
(2,078
)
 
(2,267
)
Other
1,079

 
978

Net cash provided by financing activities
42,786

 
169,782

Effect of exchange rate changes on cash and cash equivalents
283

 
(1,207
)
Net change in cash and cash equivalents
12,075


(102,337
)
CASH AND CASH EQUIVALENTS, beginning of period
19,666

 
122,003

CASH AND CASH EQUIVALENTS, end of period
$
31,741

 
$
19,666







TRUEBLUE, INC.
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
RECONCILIATION OF GAAP NET INCOME PER DILUTED SHARE TO ADJUSTED NET INCOME PER DILUTED SHARE
(Unaudited, in thousands, except for per share data)
 
13 Weeks Ended
 
52 Weeks Ended
 
December 25, 2015
 
December 26, 2014
 
December 25, 2015
 
December 26, 2014
GAAP net income
$
28,168

 
$
27,027

 
$
71,247

 
$
65,675

Income tax expense
4,696

 
4,472

 
25,200

 
16,169

Interest expense (income), net
293

 
269

 
1,395

 
(116
)
Income from operations
33,157

 
31,768

 
97,842

 
81,728

 
 
 
 
 
 
 
 
Depreciation and amortization
10,428

 
9,347

 
41,843

 
29,474

EBITDA (1)
43,585

 
41,115

 
139,685

 
111,202

Non-recurring acquisition and integration costs (2)
1,348

 
893

 
5,135

 
5,220

Adjusted EBITDA, as previously defined (3)
44,933

 
42,008

 
144,820

 
116,422

Work Opportunity Tax Credit processing fees (4)
1,410

 
1,665

 
2,352

 
3,020

Adjusted EBITDA, current definition (1)
$
46,343

 
$
43,673

 
$
147,172

 
$
119,442

 
 
 
 
 
 
 
 
GAAP net income per diluted share
$
0.67

 
$
0.65

 
$
1.71

 
$
1.59

Non-recurring acquisition and integration costs, net of tax (2)
0.02

 
0.01

 
0.08

 
0.09

Work Opportunity Tax Credit processing fees, net of taxes (4)
0.02

 
0.03

 
0.04

 
0.05

Amortization of intangible assets of acquired businesses, net of tax (5)
0.09

 
0.07

 
0.33

 
0.20

Adjust income taxes to a normalized effective tax rate (6)
(0.14
)
 
(0.14
)
 
(0.14
)
 
(0.24
)
Adjusted net income per diluted share, current definition (7)
$
0.66

 
$
0.62

 
$
2.02

 
$
1.69

Adjusted net income per diluted share, as previously defined (8)
$
0.57

 
$
0.52

 
$
1.75

 
$
1.45

 
 
 
 
 
 
 
 
Diluted weighted average shares outstanding
41,748

 
41,317

 
41,622

 
41,176


(1)
EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA excludes interest, taxes, depreciation and amortization from net income. Adjusted EBITDA further excludes from EBITDA non-recurring costs related to acquisition and integration costs, as well as, Work Opportunity Tax Credit third-party processing fees. EBITDA and Adjusted EBITDA are key measures used by management to evaluate performance. 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 GAAP, and may not be comparable to similarly titled measures of other companies.

(2)
Non-recurring acquisition and integration costs consist of the acquisition and integration of Seaton, which was completed on June 30, 2014, the first business day of our third quarter of 2014, and the acquisition related costs for SIMOS and the recruitment process outsourcing business of Aon Hewitt, which were completed on December 1, 2015, and January 4, 2016, respectively.

(3)
Adjusted EBITDA, as previously defined, included Work Opportunity Tax Credit third-party processing fees.

(4)
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.

(5)
Amortization of intangible assets of acquired businesses, as well as, accretion expense related to acquisition earn-out.

(6)
Adjusts the effective income tax rate to the expected, ongoing rate of 32% including annual Work Opportunity Tax Credit benefits and excluding any discreet or unique items.

(7)
Adjusted net income per diluted share is a non-GAAP financial measure which excludes from net income on a per diluted share basis non-recurring costs related to acquisition and integration costs, net of tax, amortization of intangibles of acquired businesses, net of tax, accretion expense related to acquisition earn-out, net of tax, Work Opportunity Tax Credit third-party





processing fees, net of tax, and adjusts income taxes to the expected ongoing effective rate. Adjusted net income per diluted share is a key measure used by management to evaluate performance and communicate comparable results. Adjusted net income per diluted share should not be considered a measure of financial performance in isolation or as an alternative to net income per diluted share in the Consolidated Statements of Operations in accordance with GAAP, and may not be comparable to similarly titled measures of other companies.

(8)
Adjusted net income per diluted share, calculated as previously defined, was tax adjusted using a marginal tax rate of 40% and included the third-party processing fees associated with generating Work Opportunity Tax Credits.
 
13 Weeks Ended
 
52 Weeks Ended
 
December 25, 2015
 
December 26, 2014
 
December 25, 2015
 
December 26, 2014
GAAP net income per diluted share
$
0.67

 
$
0.65

 
$
1.71

 
$
1.59

Non-recurring acquisition and integration costs, net of tax
0.02

 
0.01

 
0.07

 
0.08

Amortization of intangible assets of acquired businesses, net of tax
0.08

 
0.06

 
0.29

 
0.18

Adjust income taxes to a marginal tax rate
(0.20
)
 
(0.20
)
 
(0.32
)
 
(0.40
)
Adjusted net income per diluted share, as previously defined
$
0.57

 
$
0.52

 
$
1.75

 
$
1.45

 
 
 
 
 
 
 
 
Diluted weighted average shares outstanding
41,748

 
41,317

 
41,622

 
41,176