Document

Fourth quarter revenue was $622 million, an increase of 20 percent compared to revenue of $519 million in the fourth quarter of 2020 and an increase of 5 percent compared to revenue of $591 million in the fourth quarter of 20191. Net income per diluted share was $0.57 compared to net income per diluted share of $0.23 in the fourth quarters of 2020 and 2019. Fourth quarter adjusted net income2 per diluted share was $0.69 compared to adjusted net income per diluted share of $0.33 in the fourth quarter of 2020 and $0.39 in the fourth quarter of 2019.

“We are pleased to announce that fourth quarter results surpassed the comparable 2019 period,” said Patrick Beharelle, CEO of TrueBlue. “Our digital investments are differentiating us from the competition and are helping us capitalize on the rising demand for our services as businesses turn to flexible solutions to solve their workforce challenges. Numerous operating enhancements made over the last two years have lowered the cost of delivering our services and increased our agility in responding to customer needs.

“The fourth quarter marked the third consecutive quarter of double-digit revenue growth,” Mr. Beharelle continued. “PeopleReady’s revenue growth accelerated throughout the quarter driven by improving worker supply and strong results within the retail sector, while same customer demand and new customer wins continued to produce impressive PeopleScout results. Momentum from our finish to the year has TrueBlue well-positioned in 2022 and beyond.”

TrueBlue (NYSE: TBI) is a leading provider of specialized workforce solutions that help clients achieve business growth and improve productivity. In 2021, TrueBlue connected approximately 615,000 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.

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 attract sufficient qualified candidates and employees to meet the needs of our clients, (4) our ability to attract and retain clients, (5) our ability to maintain profit margins, (6) our ability to successfully execute on business strategies to further digitalize our business model, (7) the timing and amount of common stock repurchases, if any, which will be determined at management’s discretion and depend upon several factors, including market and business conditions, the trading price of our common stock and the nature of other investment opportunities, (8) new laws, regulations, and government incentives that could affect our operations or financial results, (9) our ability to access sufficient capital to finance our operations, including our ability to comply with covenants contained in our revolving credit facility, and (10) 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.



	13 weeks ended				52 weeks ended
(in thousands, except per share data)	Dec 26, 2021		Dec 27, 2020		Dec 26, 2021		Dec 27, 2020
Revenue from services	$	621,930	$	518,634	$	2,173,622	$	1,846,360
Cost of services	455,154		397,837		1,613,302		1,405,715
Gross profit	166,776		120,797		560,320		440,645
Selling, general and administrative expense	137,665		103,626		464,322		408,307
Depreciation and amortization	7,151		8,029		27,556		32,031
Goodwill and intangible asset impairment charge	—		—		—		175,189
Income (loss) from operations	21,960		9,142		68,442		(174,882)
Interest expense and other income, net	3,528		1,943		5,408		1,620
Income (loss) before tax expense (benefit)	25,488		11,085		73,850		(173,262)
Income tax expense (benefit)	5,278		3,059		12,216		(31,421)
Net income (loss)	$	20,210	$	8,026	$	61,634	$	(141,841)

Net income (loss) per common share:
Basic	$	0.58	$	0.23	$	1.77	$	(4.01)
Diluted	$	0.57	$	0.23	$	1.74	$	(4.01)

Weighted average shares outstanding:
Basic	34,809		34,529		34,798		35,365
Diluted	35,621		34,954		35,434		35,365


(in thousands)	Dec 26, 2021		Dec 27, 2020
ASSETS
Cash and cash equivalents	$	49,896	$	62,507
Accounts receivable, net	353,882		278,343
Other current assets	41,295		38,035
Total current assets	445,073		378,885
Property and equipment, net	88,090		71,734
Restricted cash and investments	221,026		240,534
Goodwill and intangible assets, net	116,749		123,802
Other assets, net	162,288		165,622
Total assets	$	1,033,226	$	980,577

LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable and other accrued expenses	$	77,172	$	58,447
Accrued wages and benefits	100,173		122,657
Current portion of workers’ compensation claims reserve	61,596		66,007

Other current liabilities	19,605		21,856
Total current liabilities	258,546		268,967
Workers’ compensation claims reserve, less current portion	194,598		189,486

Other long-term liabilities	87,015		84,934
Total liabilities	540,159		543,387
Shareholders’ equity	493,067		437,190
Total liabilities and shareholders’ equity	$	1,033,226	$	980,577


	52 weeks ended
(in thousands)	Dec 26, 2021		Dec 27, 2020
Cash flows from operating activities:
Net income (loss)	$	61,634	$	(141,841)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	27,556		32,031
Goodwill and intangible asset impairment charge	—		175,189
Provision for credit losses	6,493		6,300
Stock-based compensation	13,943		9,113
Deferred income taxes	752		(26,791)
Non-cash lease expense	14,446		15,195
Other operating activities	(1,968)		(686)
Changes in operating assets and liabilities:
Accounts receivable	(81,616)		57,146
Income tax receivable	1,602		(1,122)
Operating lease right-of-use-asset	8,080		—
Other assets	(13,715)		(2,124)
Accounts payable and other accrued expenses	16,425		(6,561)
Other accrued wages and benefits	34,581		(2,012)
Deferred employer payroll taxes	(57,065)		57,065
Workers’ compensation claims reserve	701		(125)
Operating lease liabilities	(13,457)		(14,562)
Other liabilities	2,048		(3,684)
Net cash provided by operating activities	20,440		152,531
Cash flows from investing activities:
Capital expenditures	(35,006)		(27,066)


Payments for company-owned life insurance	(4,000)		(12,031)
Proceeds from company-owned life insurance	832		—
Purchases of restricted available-for-sale investments	(43)		(2,896)
Sales of restricted available-for-sale investments	7,333		12,311
Purchases of restricted held-to-maturity investments	(9,411)		(32,495)
Maturities of restricted held-to-maturity investments	23,935		27,561
Other	140		205
Net cash used in investing activities	(16,220)		(34,411)
Cash flows from financing activities:
Purchases and retirement of common stock	(16,678)		(52,346)
Net proceeds from employee stock purchase plans	1,135		922
Common stock repurchases for taxes upon vesting of restricted stock	(3,238)		(2,438)
Net change in revolving credit facility	—		(37,100)


Other	(345)		(1,540)
Net cash used in financing activities	(19,126)		(92,502)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(521)		623
Net change in cash, cash equivalents, and restricted cash	(15,427)		26,241
Cash, cash equivalents and restricted cash, beginning of period	118,612		92,371
Cash, cash equivalents and restricted cash, end of period	$	103,185	$	118,612



	13 weeks ended				52 weeks ended
(in thousands)	Dec 26, 2021		Dec 27, 2020		Dec 26, 2021		Dec 27, 2020
Revenue from services:
PeopleReady	$	362,164	$	297,471	$	1,270,928	$	1,099,462
PeopleManagement	177,842		179,306		639,741		586,822
PeopleScout	81,924		41,857		262,953		160,076
Total company	$	621,930	$	518,634	$	2,173,622	$	1,846,360

Segment profit (1):
PeopleReady	$	27,411	$	16,198	$	82,398	$	43,200
PeopleManagement	4,499		5,654		13,196		11,717
PeopleScout	11,491		4,450		36,163		4,525
Total segment profit	43,401		26,302		131,757		59,442
Corporate unallocated expense	(7,344)		(4,608)		(27,937)		(20,714)
Total company Adjusted EBITDA (2)	36,057		21,694		103,820		38,728
Third-party processing fees for hiring tax credits (3)	(150)		(186)		(734)		(495)
Amortization of software as a service assets (4)	(720)		(615)		(2,709)		(2,307)

Goodwill and intangible asset impairment charge	—		—		—		(175,189)
Gain on deferred compensation assets (5)	(2,897)		(1,725)		(2,897)		(1,725)
Workforce reduction costs (6)	(1,799)		19		(1,993)		(12,570)
COVID-19 government subsidies, net (7)	91		(964)		4,222		6,211
Other adjustments, net (8)	(1,471)		(1,052)		(3,711)		4,496
EBITDA (2)	29,111		17,171		95,998		(142,851)
Depreciation and amortization	(7,151)		(8,029)		(27,556)		(32,031)
Interest expense and other income, net	3,528		1,943		5,408		1,620
Income before tax expense	25,488		11,085		73,850		(173,262)
Income tax expense (benefit)	(5,278)		(3,059)		(12,216)		31,421
Net income	$	20,210	$	8,026	$	61,634	$	(141,841)

(6)Workforce reduction costs for the 13 and 52 weeks ended December 26, 2021 in selling, general and administrative expense primarily include costs to streamline our delivery teams within our PeopleReady and PeopleScout segments. Workforce reduction costs for the 13 and 52 weeks ended December 27, 2020 were primarily due to employee reductions as part of our cost management actions in response to COVID-19 ($3.7 million in cost of services and $8.9 million in selling, general and administrative expense for the full-year).

(7)Net impact of COVID-19 related government subsidies. For the 13 and 52 weeks ended December 27, 2020, we received government subsidies of $2.7 million and $9.9 million, respectively. We elected to distribute a portion of the total benefit for the year to our employees in the form of a $3.7 million bonus, resulting in a net cost of $1.0 million for Q4 and a net benefit of $6.2 million for the fiscal year. These subsidies extended into 2021, providing a benefit of $4.2 million for the 52 weeks ended December 26, 2021.

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 measure

Definition

Purpose 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,

- goodwill and intangible asset impairment charge,

- gain on deferred compensation assets,

- workforce reductions costs,

- COVID-19 government subsidies, net, 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,

- goodwill and intangible asset impairment charge,

- workforce reduction costs,

- COVID-19 government subsidies, net,

- other adjustments, net,

- tax effect of each adjustment to U.S. GAAP, and

- adjustment of income taxes to normalized effective rate for periods prior to Q2 2020.

- 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.


	Q4 2021		Q4 2020		Q4 2019
	13 weeks ended
(in thousands, except for per share data)	Dec 26, 2021		Dec 27, 2020		Dec 29, 2019
Net income	$	20,210	$	8,026		$	8,715
Amortization of intangible assets of acquired businesses	1,503		2,028		4,003
Amortization of software as a service assets (1)	720		615		513
Acquisition/integration costs	—		—		(50)

Workforce reduction costs (2)	1,799		(19)		2,829
COVID-19 government subsidies, net (3)	(91)		964		—
Other adjustments, net (4)	1,471		1,052		571
Tax effect of adjustments to net income (5)	(1,014)		(1,280)		(1,102)
Adjustment of income taxes to normalized effective rate (6)	—		—			(671)
Adjusted net income	$	24,598	$	11,386		$	14,808

Adjusted net income per diluted share	$	0.69	$	0.33		$	0.39

Diluted weighted average shares outstanding	35,621		34,954		38,348


	2021		2020		2019
	52 weeks ended
(in thousands, except for per share data)	Dec 26, 2021		Dec 27, 2020		Dec 29, 2019
Net income (loss)	$	61,634	$	(141,841)	$	63,073
Amortization of intangible assets of acquired businesses	6,704		10,144		17,899
Amortization of software as a service assets (1)	2,709		2,307		1,624
Acquisition/integration costs	—		—		1,562
Goodwill and intangible asset impairment charge	—		175,189		—
Workforce reduction costs (2)	1,993		12,570		3,301
COVID-19 government subsidies, net (3)	(4,222)		(6,211)		—
Other adjustments, net (4)	3,711		(4,496)		(1,010)
Tax effect of adjustments to net income (loss) (5)	(1,802)		(28,729)		(3,273)
Adjustment of income taxes to normalized effective rate (6)	—		(3,719)		(2,835)
Adjusted net income	$	70,727	$	15,214	$	80,341

Adjusted net income per diluted share	$	2.00	$	0.43	$	2.05

Diluted weighted average shares outstanding	35,429		35,658		39,179


	Q4 2021		Q4 2020			Q4 2019
	13 weeks ended
(in thousands)	Dec 26, 2021			Dec 27, 2020			Dec 29, 2019
Net income	$	20,210		$	8,026		$	8,715
Income tax expense	5,278			3,059			638
Interest expense and other (income), net	(3,528)			(1,943)			(2,014)
Depreciation and amortization	7,151			8,029			9,021
EBITDA	29,111			17,171			16,360
Third-party processing fees for hiring tax credits (7)	150			186			240
Amortization of software as a service assets (1)	720			615			513
Acquisition/integration costs	—			—			(50)

Gain on deferred compensation assets (8)	2,897			1,725			495
Workforce reduction costs (2)	1,799			(19)			2,829
COVID-19 government subsidies, net (3)	(91)			964			—
Other adjustments, net (4)	1,471			1,052			571
Adjusted EBITDA	$	36,057		$	21,694		$	20,958


Margin / % of revenue:
Net income	3.2%			1.5%			1.5%
Adjusted EBITDA	5.8%			4.2%			3.5%


	2021		2020			2019
	52 weeks ended
(in thousands)	Dec 26, 2021			Dec 27, 2020			Dec 29, 2019
Net income (loss)	$	61,634		$	(141,841)		$	63,073
Income tax expense (benefit)	12,216			(31,421)			6,971
Interest expense and other (income), net	(5,408)			(1,620)			(3,865)
Depreciation and amortization	27,556			32,031			37,549
EBITDA	95,998			(142,851)			103,728
Third-party processing fees for hiring tax credits (7)	734			495			960
Amortization of software as a service assets (1)	2,709			2,307			1,624
Acquisition/integration costs	—			—			1,562
Goodwill and intangible asset impairment charge	—			175,189			—
Gain on deferred compensation assets (8)	2,897			1,725			495
Workforce reduction costs (2)	1,993			12,570			3,301
COVID-19 government subsidies, net (3)	(4,222)			(6,211)			—
Other adjustments, net (4)	3,711			(4,496)			(1,010)
Adjusted EBITDA	$	103,820		$	38,728		$	110,660


Margin / % of revenue:
Net income (loss)	2.8%			(7.7)%			2.7%
Adjusted EBITDA	4.8%			2.1%			4.7%

(2)Workforce reduction costs for the 13 and 52 weeks ended December 26, 2021 in selling, general and administrative expense primarily include costs to streamline our delivery teams within our PeopleReady and PeopleScout segments. Workforce reduction costs for the 13 and 52 weeks ended December 27, 2020 were primarily due to employee reductions as part of our cost management actions in response to COVID-19 ($3.7 million in cost of services and $8.9 million in selling, general and administrative expense for the full-year). Workforce reduction costs for the 13 and 52 weeks ended December 29, 2019 were primarily associated with employee reductions in the PeopleReady business.

(3)Net impact of COVID-19 related government subsidies. For the 13 and 52 weeks ended December 27, 2020, we received government subsidies of $2.7 million and $9.9 million, respectively. We elected to distribute a portion of the total benefit for the year to our employees in the form of a $3.7 million bonus, resulting in a net cost of $1.0 million for Q4 and a net benefit of $6.2 million for the fiscal year. These subsidies extended into 2021, providing a benefit of $4.2 million for the 52 weeks ended December 26, 2021.

(4)Other adjustments for the 13 and 52 weeks ended December 26, 2021 primarily include implementation costs for cloud-based systems of $1.4 million and $1.7 million, respectively and costs incurred while transitioning into our new Chicago office of $0.1 million and $1.8 million, respectively. Other adjustments for the 13 and 52 weeks ended December 27, 2020 primarily include costs of $0.7 million incurred while transitioning into our new Chicago office and implementation costs for cloud-based systems of $0.1 million and $0.9 million, respectively. For the 52 weeks ended December 27, 2020, these expenses were offset by a $6.3 million benefit from a reduction in expected costs to comply with the Affordable Care Act. Other adjustments for the 13 and 52 weeks ended December 29, 2019 primarily include implementation costs for cloud-based systems of $0.6 million and $3.2 million, respectively. For the 52 weeks ended December 29, 2019, these expenses were offset by $3.9 million of workers’ compensation benefit related to additional insurance coverage associated with former workers’ compensation carriers in liquidation.

(6)Beginning in Q2 2020, we decided not to adjust our GAAP tax rate to an expected long-term ongoing rate in our adjusted net income calculation. Thus the adjustment for fiscal year 2020 relates to the Q1 2020 adjustment of the effective income tax rate to the long-term ongoing rate of 12 percent expected at that time. The adjustment for Q4 and fiscal year 2019 reflects the adjustment of the effective income tax rate to the long-term ongoing rate of 14 percent expected at that time.