TRUEBLUE REPORTS FIRST QUARTER 2016 RESULTS
 
TACOMA, WA-April 20, 2016--TrueBlue, Inc. (NYSE:TBI) announced today that revenue for the first quarter of 2016 was $646 million, an increase of 13 percent, compared to revenue of $573 million for the first quarter of 2015. Net income for the first quarter was $7 million, compared to $6 million in the same quarter last year. Adjusted net income per share* for the first quarter of 2016 was $0.26, up from $0.23 a year ago. Adjusted EBITDA* for the first quarter of 2016 was $21 million, an increase of 9 percent, compared to $20 million a year ago.  

"Our revenue growth slowed throughout the quarter, resulting in less overall revenue than expected," TrueBlue CEO Steve Cooper said. "The current environment, which combines slowing demand with rising labor and sourcing costs, has created some sensitivity in pricing. That makes it more difficult to pass these higher costs along to customers.”

The company estimates revenue in the range of $675 million to $690 million and adjusted net income per diluted share of $0.42 to $0.47 for the second quarter of 2016. Adjusted EBITDA is expected to be in the range of $33 million to $36 million for the second quarter.

The company estimates revenue in the range of $2.8 billion to $2.9 billion and adjusted net income per diluted share of $2.10 to $2.35 for the full year of 2016. Adjusted EBITDA is expected to be in the range of $158 million to $172 million for the full year of 2016. 
 
“Our outlook for revenue growth has been impacted by mixed trends,” Cooper said. “We have seen growth among our small- and medium-sized customers, and we are pleased with the results we are seeing in construction. However, we have experienced a slowing with our largest customers, and manufacturing and related industries remain sluggish.” 

Management will discuss first quarter 2016 results on a conference call at 2 p.m. PT (5 p.m. ET), today, Wednesday, April 20. The conference call can be accessed on TrueBlue’s web site: 
www.trueblue.com

*The definitions of Adjusted EPS and Adjusted EBITDA have been modified to add back Work Opportunity Tax Credit third party processing fees and adjust the effective income tax rate to the expected, ongoing rate of 32 percent. These modifications were introduced in the fourth quarter of 2015 and have been used thereafter. Prior year amounts for the first quarter of 2015 have been stated on a comparable basis. 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 including staffing, large-volume on-site workforce management, and recruitment process outsourcing to fill full-time positions. Based in Tacoma, Wash., TrueBlue serves clients globally and connects as many as 840,000 people to work each year in a wide variety of industries. 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. 25, 2015. 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. 
 
Contacts:
Derrek Gafford, EVP & CFO





253-680-8214








TRUEBLUE, INC.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
 
13 Weeks Ended
 
March 25, 2016
 
March 27, 2015
Revenue from services
$
645,980

 
$
573,315

Cost of services
495,468

 
443,479

Gross profit
150,512

 
129,836

Selling, general and administrative expenses
130,624

 
111,593

Depreciation and amortization
11,289

 
10,520

Income from operations
8,599

 
7,723

Interest and other expense, net
(1,019
)
 
(534
)
Income before tax expense
7,580

 
7,189

Income tax expense
612

 
1,473

Net income
$
6,968

 
$
5,716

 
 
 
 
Net income per common share:
 
 
 
Basic
$
0.17

 
$
0.14

Diluted
$
0.17

 
$
0.14

 
 
 
 
Weighted average shares outstanding:
 
 
 
Basic
41,502

 
41,031

Diluted
41,798

 
41,362









TRUEBLUE, INC.
SEGMENT DATA
(Unaudited, in thousands)
 
13 Weeks Ended
 
March 25, 2016
 
March 27, 2015
Revenue from services
 
 
 
Staffing Services
$
602,453

 
$
549,712

Managed Services
43,527

 
23,603

Total Company
$
645,980

 
$
573,315

 
 
 
 
Adjusted EBITDA (1)
 
 
 
Staffing Services
$
19,682

 
$
24,559

Managed Services
8,830

 
3,478

 
28,512

 
28,037

Corporate unallocated
(7,087
)
 
(8,308
)
Adjusted EBITDA
21,425

 
19,729

Work Opportunity Tax Credit processing fees (2)
(477
)
 
(330
)
Non-recurring acquisition and integration costs (3)
(1,060
)
 
(1,156
)
EBITDA
19,888

 
18,243

 
 
 
 
Depreciation and amortization
11,289

 
10,520

Interest expense, net
1,019

 
534

Income before tax expense
$
7,580

 
$
7,189


(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)
For the quarter ended March 25, 2016, Non-recurring acquisition and integration costs related to the acquisition of the recruitment process outsourcing business of Aon Hewitt, which was completed on January 4, 2016. For the quarter ended March 27, 2015, these costs related to the acquisition of Seaton, which was completed on June 30, 2014.







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

 
March 25, 2016
 
December 25, 2015
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
21,888

 
$
29,781

Accounts receivable, net
325,297

 
461,476

Other current assets
38,508

 
51,708

Total current assets
385,693

 
542,965

Property and equipment, net
58,561

 
57,530

Restricted cash and investments
202,684

 
188,412

Goodwill and intangible assets, net
475,023

 
422,354

Other assets, net
50,682

 
48,181

Total assets
$
1,172,643

 
$
1,259,442

 
 
 
 
Liabilities and shareholders' equity
 
 
 
Current liabilities
$
202,454

 
$
227,976

Long-term debt, less current portion
163,653

 
243,397

Other long-term liabilities
259,920

 
252,496

Total liabilities
626,027

 
723,869

Shareholders' equity
546,616

 
535,573

Total liabilities and shareholders' equity
$
1,172,643

 
$
1,259,442






TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
 
13 Weeks Ended
 
March 25, 2016
 
March 27, 2015
Cash flows from operating activities:
 
 
 
Net income
$
6,968

 
$
5,716

Adjustments to reconcile net income to net cash from operating activities:
 
 
 
Depreciation and amortization
11,289

 
10,520

Provision for doubtful accounts
1,308

 
1,745

Stock-based compensation
3,179

 
3,389

Deferred income taxes
(1,083
)
 
(299
)
Other operating activities
1,014

 
(316
)
Changes in operating assets and liabilities, net of acquisitions:
 
 
 
Accounts receivable
147,067

 
67,411

Income tax receivable
14,742

 
943

Other assets
(3,668
)
 
4,496

Accounts payable and other accrued expenses
(9,681
)
 
4,369

Accrued wages and benefits
(16,153
)
 
(3,999
)
Workers’ compensation claims reserve
3,731

 
159

Other liabilities
1,792

 
1,626

Net cash provided by operating activities
160,505

 
95,760

 
 
 
 
Cash flows from investing activities:
 
 
 
Capital expenditures
(3,876
)
 
(3,458
)
Acquisition of business
(72,000
)
 

Maturities of marketable securities

 
1,500

Change in restricted cash and cash equivalents
(6,570
)
 
(8,215
)
Purchases of restricted investments
(8,244
)
 

Maturities of restricted investments
3,164

 
4,288

Net cash used in investing activities
(87,526
)
 
(5,885
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Net proceeds from stock option exercises and employee stock purchase plans
477

 
411

Common stock repurchases for taxes upon vesting of restricted stock
(2,229
)
 
(3,026
)
Net change in revolving credit facility
(78,988
)
 
(88,000
)
Payments on debt
(756
)
 
(566
)
Other
171

 
865

Net cash used in financing activities
(81,325
)
 
(90,316
)
Effect of exchange rates on cash
453

 
(1,446
)
Net change in cash and cash equivalents
(7,893
)
 
(1,887
)
CASH AND CASH EQUIVALENTS, beginning of period
29,781

 
19,666

CASH AND CASH EQUIVALENTS, end of period
$
21,888

 
$
17,779







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
 
March 25, 2016
 
March 27, 2015
GAAP net income
$
6,968

 
$
5,716

Income tax expense
612


1,473

Interest expense, net
1,019


534

Income from operations
8,599


7,723

Depreciation and amortization
11,289

 
10,520

EBITDA (1)
19,888


18,243

Non-recurring acquisition and integration costs (2)
1,060

 
1,156

Work Opportunity Tax Credit processing fees (3)
477

 
330

Adjusted EBITDA (1)
$
21,425


$
19,729

 
 
 
 
GAAP net income per diluted share
$
0.17

 
$
0.14

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

 
0.02

Work Opportunity Tax Credit processing fees, net of tax (3)
0.01

 
0.01

Amortization of intangible assets of acquired businesses, net of tax (4)
0.10

 
0.08

Adjust income taxes to a normalized effective tax rate (5)
(0.04
)
 
(0.02
)
Adjusted net income per diluted share (6)
$
0.26

 
$
0.23

 
 
 
 
Diluted weighted average shares outstanding
41,798

 
41,362


(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)
For the quarter ended March 25, 2016, Non-recurring acquisition and integration costs related to the acquisition of the recruitment process outsourcing business of Aon Hewitt, which was completed on January 4, 2016. For the quarter ended March 27, 2015, these costs related to the acquisition of Seaton, which was completed on June 30, 2014.

(3)
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.

(4)
Amortization of intangible assets of acquired businesses, as well as accretion expense related to acquisition earn-out.

(5)
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.

(6)
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.