TRUEBLUE REPORTS FOURTH QUARTER 2016 RESULTS



TACOMA, WA-Feb. 8, 2017--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 was $0.43 for the fiscal 14-week1 fourth quarter of 2016 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.

1As 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.



 
Contact:
Derrek Gafford, EVP & CFO
253-680-8214







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, 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.
 
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
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.