TRUEBLUE REPORTS THIRD QUARTER 2022 RESULTS
Gross margin strength drives bottom-line results

TACOMA, WASH. - Oct. 24, 2022 -- TrueBlue (NYSE:TBI) today announced its third quarter results for 2022.

Third quarter revenue was $576 million, roughly flat compared to revenue of $577 million in the third quarter of 2021. Net income per diluted share was $0.63 compared to net income per diluted share of $0.53 in the third quarter of 2021. Third quarter adjusted net income1 per diluted share was $0.75 compared to adjusted net income per diluted share of $0.59 in the third quarter of 2021.

“Given the uncertainty businesses face regarding their workforce needs, we are pleased with our results this quarter,” said Steve Cooper, CEO of TrueBlue. “While demand slowed, we filled a higher proportion of orders due to continued improvement in worker supply. Tight labor pools are playing to our favor with the strongest bill/pay spreads in recent history resulting in higher operating income and related margin.

“Over the near-term, we believe economic uncertainty will increase and demand for our services will soften,” continued Mr. Cooper. “Ultimately, we see secular strength for our workforce solutions. We expect low labor participation rates and an increasing preference to work from home to further constrain blue-collar labor supply. We will continue to invest in our operational and technology strengths to ensure we are well-positioned for the economic recovery and beyond.”

2022 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 2022 results on a webcast at 2:30 p.m. PT (5:30 p.m. ET), today, Monday, Oct. 24, 2022. 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 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.

1 Refer to the financial statements accompanying this release for more information regarding non-GAAP terms.

Forward-looking statements and non-GAAP financial measures

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.

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 25, 2022Sep 26, 2021Sep 25, 2022Sep 26, 2021
Revenue from services$575,721 $577,031 $1,696,489 $1,551,692 
Cost of services419,802 430,529 1,242,194 1,158,148 
Gross profit155,919 146,502 454,295 393,544 
Selling, general and administrative expense124,351 118,748 366,953 326,657 
Depreciation and amortization7,483 6,426 22,015 20,405 
Income from operations24,085 21,328 65,327 46,482 
Interest expense and other income, net703 581 1,098 1,880 
Income before tax expense24,788 21,909 66,425 48,362 
Income tax expense4,092 3,267 11,197 6,938 
Net income$20,696 $18,642 $55,228 $41,424 
Net income per common share:
Basic$0.64 $0.53 $1.67 $1.19 
Diluted$0.63 $0.53 $1.65 $1.17 
Weighted average shares outstanding:
Basic32,434 34,873 33,023 34,788 
Diluted32,818 35,475 33,511 35,255 


TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)Sep 25, 2022Dec 26, 2021
ASSETS
Cash and cash equivalents$43,779 $49,896 
Accounts receivable, net328,763 353,882 
Other current assets36,088 41,295 
Total current assets408,630 445,073 
Property and equipment, net92,324 88,090 
Restricted cash and investments208,659 221,026 
Goodwill and intangible assets, net110,741 116,749 
Other assets, net162,427 162,288 
Total assets$982,781 $1,033,226 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable and other accrued expenses$53,838 $77,172 
Accrued wages and benefits89,899 100,173 
Current portion of workers’ compensation claims reserve55,574 61,596 
Other current liabilities23,759 19,605 
Total current liabilities223,070 258,546 
Workers’ compensation claims reserve, less current portion196,315 194,598 
Other long-term liabilities76,582 87,015 
Total liabilities495,967 540,159 
Shareholders’ equity486,814 493,067 
Total liabilities and shareholders’ equity$982,781 $1,033,226 


























TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
39 weeks ended
(in thousands)Sep 25, 2022Sep 26, 2021
Cash flows from operating activities:
Net income$55,228 $41,424 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization22,015 20,405 
Provision for credit losses3,352 2,881 
Stock-based compensation7,675 10,149 
Deferred income taxes2,046 445 
Non-cash lease expense9,694 11,173 
Other operating activities8,772 (1,484)
Changes in operating assets and liabilities:
Accounts receivable21,388 (53,626)
Income taxes receivable and payable186 963 
Operating lease right-of-use-asset— 7,150 
Other assets(564)(7,003)
Accounts payable and other accrued expenses(22,935)3,212 
Accrued wages and benefits(10,277)24,278 
Deferred employer payroll taxes— (57,066)
Workers’ compensation claims reserve(4,304)3,075 
Operating lease liabilities(9,673)(10,017)
Other liabilities(2,529)4,598 
Net cash provided by operating activities80,074 557 
Cash flows from investing activities:
Capital expenditures(22,685)(28,772)
Purchases of restricted available-for-sale investments— (29)
Sales of restricted available-for-sale investments— 793 
Purchases of restricted held-to-maturity investments(4,950)— 
Maturities of restricted held-to-maturity investments23,697 18,346 
Net cash used in investing activities(3,938)(9,662)
Cash flows from financing activities:
Purchases and retirement of common stock(60,939)— 
Net proceeds from employee stock purchase plans780 754 
Common stock repurchases for taxes upon vesting of restricted stock(4,347)(3,035)
Other(203)(270)
Net cash used in financing activities(64,709)(2,551)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(2,482)(613)
Net change in cash, cash equivalents, and restricted cash8,945 (12,269)
Cash, cash equivalents and restricted cash, beginning of period103,185 118,612 
Cash, cash equivalents and restricted cash, end of period$112,130 $106,343 



TRUEBLUE, INC.
SEGMENT DATA
(Unaudited)

13 weeks ended
(in thousands)Sep 25, 2022Sep 26, 2021
Revenue from services:
PeopleReady$334,639 $349,056 
PeopleManagement163,618 157,789 
PeopleScout77,464 70,186 
Total company$575,721 $577,031 
Segment profit (1):
PeopleReady$28,732 $24,690 
PeopleManagement4,463 2,360 
PeopleScout10,707 9,778 
Total segment profit43,902 36,828 
Corporate unallocated expense(9,396)(7,667)
Total company Adjusted EBITDA (2)
34,506 29,161 
Third-party processing fees for hiring tax credits (3)(162)(419)
Amortization of software as a service assets (4)(729)(670)
PeopleReady technology upgrade costs (5)(1,858)— 
COVID-19 government subsidies— 92 
Other adjustments, net (6)(189)(410)
EBITDA (2)
31,568 27,754 
Depreciation and amortization (7,483)(6,426)
Interest expense and other income, net703 581 
Income before tax expense24,788 21,909 
Income tax expense(4,092)(3,267)
Net income$20,696 $18,642 
(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)Costs associated with upgrading legacy PeopleReady technology.
(6)Other adjustments for the 13 weeks ended September 25, 2022 include $0.2 million incurred to transition to a new third-party claims administrator for workers’ compensation. 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.


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
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 upgrade 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:
–income taxes,
–interest expense and other income, net, 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 upgrade 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 upgrade 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.


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 25, 2022Sep 26, 2021
Net income$20,696 $18,642 
Amortization of intangible assets1,484 1,506 
Amortization of software as a service assets (1)729 670 
Accelerated depreciation (2)602 — 
PeopleReady technology upgrade costs (3)1,858 — 
COVID-19 government subsidies— (92)
Other adjustments, net (4)189 410 
Tax effect of adjustments to net income (5)(800)(372)
Adjusted net income$24,758 $20,764 
Adjusted net income per diluted share$0.75 $0.59 
Diluted weighted average shares outstanding32,818 35,475 
Margin / % of revenue:
Net income3.6%3.2%
Adjusted net income4.3%3.6%
2.RECONCILIATION OF U.S. GAAP NET INCOME TO EBITDA AND ADJUSTED EBITDA
(Unaudited)
13 weeks ended
(in thousands)Sep 25, 2022Sep 26, 2021
Net income$20,696 $18,642 
Income tax expense4,092 3,267 
Interest expense and other (income), net(703)(581)
Depreciation and amortization7,483 6,426 
EBITDA31,568 27,754 
Third-party processing fees for hiring tax credits (6)162 419 
Amortization of software as a service assets (1)729 670 
PeopleReady technology upgrade costs (3)1,858 — 
COVID-19 government subsidies— (92)
Other adjustments, net (4)189 410 
Adjusted EBITDA $34,506 $29,161 
Margin / % of revenue:
Net income3.6%3.2%
Adjusted EBITDA 6.0%5.1%


3.RECONCILIATION OF U.S. GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSE TO ADJUSTED SG&A EXPENSE
(Unaudited)
13 weeks ended
(in thousands)Sep 25, 2022Sep 26, 2021
Selling, general and administrative expense$124,351 $118,748 
Third-party processing fees for hiring tax credits (6)(162)(419)
Amortization of software as a service assets (1)(729)(670)
PeopleReady technology upgrade costs (3)(1,858)— 
COVID-19 government subsidies— 92 
Other adjustments, net (4)(189)(410)
Adjusted SG&A expense$121,413 $117,341 

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

(2)Accelerated depreciation for the existing systems being replaced by the upgraded PeopleReady technology platform.

(3)Costs associated with upgrading legacy PeopleReady technology.

(4)Other adjustments for the 13 weeks ended September 25, 2022 include $0.2 million incurred to transition to a new third-party claims administrator for workers’ compensation. 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.

(5)Total tax effect of each of the adjustments to U.S. GAAP net income using the effective income tax rate for the respective periods.

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