TRUEBLUE REPORTS THIRD QUARTER 2021 RESULTS
Second consecutive quarter of double-digit revenue growth

TACOMA, WASH. - Oct. 25, 2021 -- TrueBlue (NYSE:TBI) today announced its third quarter results for 2021.

Third quarter revenue was $577 million, an increase of 22 percent compared to revenue of $475 million in the third quarter of 2020. Net income per diluted share was $0.53 compared to net income per diluted share of $0.25 in the third quarter of 2020. Third quarter adjusted net income1 per diluted share was $0.59 compared to adjusted net income per diluted share of $0.24 in the third quarter of 2020.

“Net income per diluted share more than doubled as a result of strong demand combined with gross margin expansion,” said Patrick Beharelle, CEO of TrueBlue. “We are seeing businesses of all types turning to flexible workforce solutions as they grapple with worker supply challenges and a variety of uncertainties related to the Covid-19 business environment. PeopleScout exceeded pre-pandemic revenue during the quarter, PeopleManagement new business wins have been exceptionally strong throughout the year and PeopleReady revenue growth accelerated as we entered October.

“Investing in technology remains at the center of our strategy.” Mr. Beharelle continued. “Our digital platforms have us well-positioned to create differentiated value for our customers and workers. Given the strength of our strategies as well as a favorable environment for flexible labor solutions, we are increasingly optimistic about our prospects to deliver sustainable long-term growth.”

2021 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 third quarter 2021 results on a webcast at 2:30 p.m. PT (5:30 p.m. ET), today, Monday, Oct. 25, 2021. 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 2020, TrueBlue connected approximately 490,000 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 and the company’s website for more information regarding non-GAAP terms.

Forward-looking statements

This document 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 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 access sufficient capital to finance our operations, including our ability to comply with covenants contained in our revolving credit facility, (4) our ability to attract and retain clients, (5) our ability to attract sufficient qualified candidates and employees to meet the needs of our clients, (6) our ability to maintain profit margins, (7) new laws, regulations, and government incentives that could affect our operations or financial results, (8) our ability to successfully execute on business strategies to further digitalize our business model, and (9) 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.

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


TRUEBLUE, INC.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
13 weeks ended
39 weeks ended
(in thousands, except per share data)Sep 26, 2021Sep 27, 2020Sep 26, 2021Sep 27, 2020
Revenue from services$577,031 $474,530 $1,551,692 $1,327,726 
Cost of services430,529 364,066 1,158,148 1,007,878 
Gross profit146,502 110,464 393,544 319,848 
Selling, general and administrative expense118,748 90,100 326,657 304,681 
Depreciation and amortization6,426 7,652 20,405 24,002 
Goodwill and intangible asset impairment charge— — — 175,189 
Income (loss) from operations21,328 12,712 46,482 (184,024)
Interest expense and other income, net581 (174)1,880 (323)
Income (loss) before tax expense (benefit)21,909 12,538 48,362 (184,347)
Income tax expense (benefit)3,267 3,743 6,938 (34,480)
Net income (loss)$18,642 $8,795 $41,424 $(149,867)
Net income (loss) per common share:
Basic$0.53 $0.25 $1.19 $(4.20)
Diluted$0.53 $0.25 $1.17 $(4.20)
Weighted average shares outstanding:
Basic34,873 34,597 34,788 35,643 
Diluted35,475 34,904 35,255 35,643 


TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)Sep 26, 2021Dec 27, 2020
ASSETS
Cash and cash equivalents$49,173 $62,507 
Accounts receivable, net330,705 278,343 
Other current assets37,631 38,035 
Total current assets417,509 378,885 
Property and equipment, net86,414 71,734 
Restricted cash and investments223,832 240,534 
Goodwill and intangible assets, net118,384 123,802 
Other assets, net163,653 165,622 
Total assets$1,009,792 $980,577 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable and other accrued expenses$62,706 $58,447 
Accrued wages and benefits89,870 122,657 
Current portion of workers’ compensation claims reserve60,936 66,007 
Other current liabilities25,272 21,856 
Total current liabilities238,784 268,967 
Workers’ compensation claims reserve, less current portion197,633 189,486 
Other long-term liabilities87,699 84,934 
Total liabilities524,116 543,387 
Shareholders’ equity485,676 437,190 
Total liabilities and shareholders’ equity$1,009,792 $980,577 


























TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
39 weeks ended
(in thousands)Sep 26, 2021Sep 27, 2020
Cash flows from operating activities:
Net income (loss)$41,424 $(149,867)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization20,405 24,002 
Goodwill and intangible asset impairment charge— 175,189 
Provision for credit losses2,881 6,582 
Stock-based compensation10,149 6,762 
Deferred income taxes445 (25,955)
Non-cash lease expense11,173 11,115 
Other operating activities(1,484)1,944 
Changes in operating assets and liabilities:
Accounts receivable(53,626)55,408 
Income tax receivable963 (4,928)
Operating lease right-of-use-asset7,150 — 
Other assets(7,003)(2,646)
Accounts payable and other accrued expenses3,212 (12,723)
Other accrued wages and benefits24,278 (7,395)
Deferred employer payroll taxes(57,066)36,312 
Workers’ compensation claims reserve3,075 (824)
Operating lease liabilities(10,017)(11,410)
Other liabilities4,598 (2,798)
Net cash provided by operating activities557 98,768 
Cash flows from investing activities:
Capital expenditures(28,772)(16,244)
Purchases of restricted available-for-sale investments(29)(2,310)
Sales of restricted available-for-sale investments793 3,212 
Purchases of restricted held-to-maturity investments— (32,495)
Maturities of restricted held-to-maturity investments18,346 24,358 
Net cash used in investing activities(9,662)(23,479)
Cash flows from financing activities:
Purchases and retirement of common stock— (52,346)
Net proceeds from employee stock purchase plans754 734 
Common stock repurchases for taxes upon vesting of restricted stock(3,035)(2,331)
Net change in revolving credit facility— (35,600)
Other(270)(1,436)
Net cash used in financing activities(2,551)(90,979)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(613)(466)
Net change in cash, cash equivalents, and restricted cash(12,269)(16,156)
Cash, cash equivalents and restricted cash, beginning of period118,612 92,371 
Cash, cash equivalents and restricted cash, end of period$106,343 $76,215 



TRUEBLUE, INC.
SEGMENT DATA
(Unaudited)

13 weeks ended
(in thousands)Sep 26, 2021Sep 27, 2020
Revenue from services:
PeopleReady$349,056 $293,546 
PeopleManagement157,789 147,241 
PeopleScout70,186 33,743 
Total company$577,031 $474,530 
Segment profit (1):
PeopleReady$24,690 $18,714 
PeopleManagement2,360 4,574 
PeopleScout9,778 349 
Total segment profit36,828 23,637 
Corporate unallocated expense(7,667)(5,968)
Total company Adjusted EBITDA (2)
29,161 17,669 
Third-party processing fees for hiring tax credits (3)(419)(174)
Amortization of software as a service assets (4)(670)(575)
Workforce reduction costs (5)(110)(270)
COVID-19 government subsidies92 4,071 
Other adjustments, net (6)(300)(357)
EBITDA (2)
27,754 20,364 
Depreciation and amortization (6,426)(7,652)
Interest expense and other income, net581 (174)
Income before tax expense21,909 12,538 
Income tax expense(3,267)(3,743)
Net income$18,642 $8,795 
(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)Workforce reduction costs for the 13 weeks ended September 27, 2020 were primarily due to employee reductions as part of our cost management actions in response to COVID-19 ($0.2 million in cost of services and $0.1 million in selling, general and administrative expense).
(6)Other adjustments for the 13 weeks ended September 26, 2021 primarily include costs of $0.2 million incurred while transitioning into our new Chicago office and implementation costs for cloud-based systems of $0.1 million. Other adjustments for the 13 weeks ended September 27, 2020 primarily include lease exit costs of $0.2 million and implementation costs for cloud-based systems of $0.1 million.


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 measureDefinitionPurpose of adjusted measures
EBITDA and
Adjusted EBITDA
EBITDA excludes from net income (loss):
- 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,
- workforce reductions costs,
- COVID-19 government subsidies, 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 net income and Adjusted net income per diluted share
Net income (loss) and net income (loss) per diluted share, excluding:
- amortization of intangibles of acquired businesses,
- amortization of software as a service assets,
- workforce reduction costs,
- COVID-19 government subsidies
- 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.
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)Sep 26, 2021Sep 27, 2020
Net income$18,642 $8,795 
Amortization of intangible assets of acquired businesses1,506 2,041 
Amortization of software as a service assets (1)670 575 
Workforce reduction costs (2)110 270 
COVID-19 government subsidies(92)(4,071)
Other adjustments, net (3)300 357 
Tax effect of adjustments to net income (loss) (4)(372)247 
Adjusted net income$20,764 $8,214 
Adjusted net income per diluted share$0.59 $0.24 
Diluted weighted average shares outstanding35,475 34,904 


2.RECONCILIATION OF U.S. GAAP NET INCOME TO EBITDA AND ADJUSTED EBITDA
(Unaudited)
13 weeks ended
(in thousands)Sep 26, 2021Sep 27, 2020
Net income$18,642 $8,795 
Income tax expense3,267 3,743 
Interest expense and other (income), net(581)174 
Depreciation and amortization6,426 7,652 
EBITDA27,754 20,364 
Third-party processing fees for hiring tax credits (5)419 174 
Amortization of software as a service assets (1)670 575 
Workforce reduction costs (2)110 270 
COVID-19 government subsidies(92)(4,071)
Other adjustments, net (3)300 357 
Adjusted EBITDA $29,161 $17,669 

(1)Amortization of software as a service assets is reported in selling, general and administrative expense.

(2)Workforce reduction costs for the 13 weeks ended September 27, 2020 were primarily due to employee reductions as part of our cost management actions in response to COVID-19 ($0.2 million in cost of services and $0.1 million in selling, general and administrative expense).

(3)Other adjustments for the 13 weeks ended September 26, 2021 primarily include costs of $0.2 million incurred while transitioning into our new Chicago office and implementation costs for cloud-based systems of $0.1 million. Other adjustments for the 13 weeks ended September 27, 2020 primarily include lease exit costs of $0.2 million and implementation costs for cloud-based systems of $0.1 million.

(4)Total tax effect of each of the adjustments to U.S. GAAP net income (loss) using the expected income tax rate of 14 percent for 2021 and the effective income tax rate of 30 percent for Q3 2020.

(5)These third-party processing fees are associated with generating hiring tax credits.