Document

Second quarter revenue was $569 million, an increase of 10 percent compared to revenue of $516 million in the second quarter of 2021. Net income per diluted share was $0.72 compared to net income per diluted share of $0.45 in the second quarter of 2021. Second quarter adjusted net income1 per diluted share was $0.82 compared to adjusted net income per diluted share of $0.47 in the second quarter of 2021.

“Demand patterns were somewhat mixed during the quarter.” Mr. Cooper continued. “PeopleScout demand was exceptionally strong throughout the quarter as clients sought more help in addressing high employee turnover associated with tight labor pools. At PeopleReady, demand tapered during the quarter as customers reassessed their labor needs on new projects given the current economic climate, and PeopleManagement demand held steady.”

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.

This document contains forward-looking statements relating to our plans and expectations including, without limitation, statements regarding the future performance and operations of our business, and expected growth from our digital investments, 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 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				26 weeks ended
(in thousands, except per share data)	Jun 26, 2022		Jun 27, 2021		Jun 26, 2022		Jun 27, 2021
Revenue from services	$	569,253	$	515,955	$	1,120,768	$	974,661
Cost of services	410,722		379,487		822,392		727,619
Gross profit	158,531		136,468		298,376		247,042
Selling, general and administrative expense	122,034		110,508		242,602		207,909
Depreciation and amortization	7,245		7,017		14,532		13,979

Income from operations	29,252		18,943		41,242		25,154
Interest expense and other income, net	(110)		724		395		1,299
Income before tax expense	29,142		19,667		41,637		26,453
Income tax expense	5,129		3,783		7,105		3,671
Net income	$	24,013	$	15,884	$	34,532	$	22,782

Net income per common share:
Basic	$	0.73	$	0.46	$	1.04	$	0.66
Diluted	$	0.72	$	0.45	$	1.02	$	0.65

Weighted average shares outstanding:
Basic	32,707		34,818		33,318		34,746
Diluted	33,149		35,352		33,832		35,205


(in thousands)	Jun 26, 2022		Dec 26, 2021
ASSETS
Cash and cash equivalents	$	32,432	$	49,896
Accounts receivable, net	338,800		353,882
Other current assets	35,102		41,295
Total current assets	406,334		445,073
Property and equipment, net	90,091		88,090
Restricted cash and investments	205,769		221,026
Goodwill and intangible assets, net	112,993		116,749
Other assets, net	175,823		162,288
Total assets	$	991,010	$	1,033,226

LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable and other accrued expenses	$	66,396	$	77,172
Accrued wages and benefits	85,543		100,173
Current portion of workers’ compensation claims reserve	56,024		61,596

Other current liabilities	24,858		19,605
Total current liabilities	232,821		258,546
Workers’ compensation claims reserve, less current portion	211,574		194,598

Other long-term liabilities	80,662		87,015
Total liabilities	525,057		540,159
Shareholders’ equity	465,953		493,067
Total liabilities and shareholders’ equity	$	991,010	$	1,033,226


	26 weeks ended
(in thousands)	Jun 26, 2022		Jun 27, 2021
Cash flows from operating activities:
Net income	$	34,532	$	22,782
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	14,532		13,979

Provision for credit losses	2,572		2,094
Stock-based compensation	4,487		6,916
Deferred income taxes	2,117		652
Non-cash lease expense	6,518		7,853
Other operating activities	6,752		(1,473)
Changes in operating assets and liabilities:
Accounts receivable	12,524		(16,486)
Income tax receivable	(3,549)		1,103
Operating lease right-of-use-asset	—		6,135
Other assets	(8,486)		(2,495)
Accounts payable and other accrued expenses	(10,629)		(6,952)
Accrued wages and benefits	(14,638)		11,208
Deferred employer payroll taxes	—		2,810
Workers’ compensation claims reserve	11,404		(598)
Operating lease liabilities	(6,441)		(6,729)
Other liabilities	1,407		6,563
Net cash provided by operating activities	53,102		47,362
Cash flows from investing activities:
Capital expenditures	(13,992)		(19,868)




Purchases of restricted available-for-sale investments	—		(14)
Sales of restricted available-for-sale investments	—		452
Purchases of restricted held-to-maturity investments	(4,950)		—
Maturities of restricted held-to-maturity investments	17,826		15,143

Net cash used in investing activities	(1,116)		(4,287)
Cash flows from financing activities:
Purchases and retirement of common stock	(60,939)		—
Net proceeds from employee stock purchase plans	536		538
Common stock repurchases for taxes upon vesting of restricted stock	(4,132)		(2,686)



Other	(147)		(188)
Net cash used in financing activities	(64,682)		(2,336)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(494)		319
Net change in cash, cash equivalents, and restricted cash	(13,190)		41,058
Cash, cash equivalents and restricted cash, beginning of period	103,185		118,612
Cash, cash equivalents and restricted cash, end of period	$	89,995	$	159,670



	13 weeks ended
(in thousands)	Jun 26, 2022		Jun 27, 2021
Revenue from services:
PeopleReady	$	317,943	$	299,316
PeopleManagement	161,938		152,356
PeopleScout	89,372		64,283
Total company	$	569,253	$	515,955

Segment profit (1):
PeopleReady	$	20,325	$	18,437
PeopleManagement	4,228		3,221
PeopleScout	20,593		10,857
Total segment profit	45,146		32,515
Corporate unallocated expense	(6,531)		(7,307)
Total company Adjusted EBITDA (2)	38,615		25,208
Third-party processing fees for hiring tax credits (3)	(162)		(30)
Amortization of software as a service assets (4)	(699)		(646)



PeopleReady technology implementation costs (5)	(1,748)		—
COVID-19 government subsidies	—		2,296
Other adjustments, net (6)	491		(868)
EBITDA (2)	36,497		25,960
Depreciation and amortization	(7,245)		(7,017)
Interest expense and other income, net	(110)		724
Income before tax expense	29,142		19,667
Income tax expense	(5,129)		(3,783)
Net income	$	24,013	$	15,884

(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.

(6)Other adjustments for the 13 weeks ended June 26, 2022 include a benefit of $1.4 million from forfeited stock awards associated with the CEO transition that were expensed in prior years, partially offset by $0.8 million incurred to transition to a new third party claims administrator for workers’ compensation. Other adjustments for the 13 weeks ended June 27, 2021 primarily include costs of $0.8 million incurred while transitioning into our new Chicago office.

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

Adjusted net income and Adjusted net income per diluted share

Net income and net income per diluted share, excluding:

–amortization of intangibles,

–amortization of software as a service assets,

–accelerated depreciation,

–PeopleReady technology implementation 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.

–Provides a measure, among others, used in the determination of incentive compensation for management.

EBITDA and
Adjusted EBITDA

EBITDA excludes from net income:

–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,

–PeopleReady technology implementation 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 SG&A expense

Selling, general and administrative expense excluding:

–third-party processing fees for hiring tax credits,

–amortization of software as a service assets,

–PeopleReady technology implementation 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.



	13 weeks ended
(in thousands, except for per share data)	Jun 26, 2022		Jun 27, 2021
Net income	$	24,013	$	15,884
Amortization of intangible assets	1,495		1,810
Amortization of software as a service assets (1)	699		646


Accelerated depreciation (2)	540		—
PeopleReady technology implementation costs (3)	1,748		—
COVID-19 government subsidies	—		(2,296)
Other adjustments, net (4)	(491)		868
Tax effect of adjustments to net income (5)	(749)		(449)

Adjusted net income	$	27,255	$	16,463

Adjusted net income per diluted share	$	0.82	$	0.47

Diluted weighted average shares outstanding	33,149		35,352



	13 weeks ended
(in thousands)	Jun 26, 2022		Jun 27, 2021
Net income	$	24,013	$	15,884
Income tax expense	5,129		3,783
Interest expense and other (income), net	110		(724)
Depreciation and amortization	7,245		7,017
EBITDA	36,497		25,960
Third-party processing fees for hiring tax credits (6)	162		30
Amortization of software as a service assets (1)	699		646



PeopleReady technology implementation costs (3)	1,748		—
COVID-19 government subsidies	—		(2,296)
Other adjustments, net (4)	(491)		868
Adjusted EBITDA	$	38,615	$	25,208

Margin / % of revenue:
Net income	4.2%		3.1%
Adjusted EBITDA	6.8%		4.9%



	13 weeks ended
(in thousands)	Jun 26, 2022		Jun 27, 2021
Selling, general and administrative expense	$	122,034	$	110,508
Third-party processing fees for hiring tax credits (6)	(162)		(30)
Amortization of software as a service assets (1)	(699)		(646)


PeopleReady technology implementation costs (3)	(1,748)		—
COVID-19 government subsidies	—		2,296
Other adjustments, net (4)	491		(868)
Adjusted SG&A expense	$	119,916	$	111,260

(4)Other adjustments for the 13 weeks ended June 26, 2022 include a benefit of $1.4 million from forfeited stock awards associated with the CEO transition that were expensed in prior years, partially offset by $0.8 million incurred to transition to a new third party claims administrator for workers’ compensation. Other adjustments for the 13 weeks ended June 27, 2021 primarily include costs of $0.8 million incurred while transitioning into our new Chicago office.