TRUEBLUE REPORTS SECOND QUARTER 2024 RESULTS

TACOMA, WASH. - Aug. 5, 2024 -- TrueBlue (NYSE:TBI) today announced its second quarter results for 2024.

Second Quarter 2024 Financial Highlights

•Revenue of $396 million compared to $476 million in the prior year period
•Net loss of $105 million compared to net loss of $7 million in the prior year period
◦Includes non-cash goodwill and intangible asset impairment charge of $45 million after tax and a related valuation allowance charge of $55 million on deferred tax assets
◦SG&A expense reduced by 20 percent to $97 million compared to $121 million in the prior year period
◦Adjusted EBITDA1 of $1 million and adjusted net loss of $11 million
• Zero debt, cash of $26 million and $132 million of borrowing availability
•$7 million in share repurchases with $38 million remaining under authorization

Commentary

“We are managing through the current market cycle with discipline and agility as economic uncertainty and client caution continue to weigh on the temporary staffing industry,” said Taryn Owen, President and CEO of TrueBlue. “Our teams are staying highly engaged with clients to address their immediate and evolving needs. While current market dynamics are challenging, evolving workforce needs and structural staffing shortages will create compelling opportunities for our business that align with our competitive strengths.”

“We have made significant progress advancing our strategic priorities which will enable us to capture market share, deliver more sustainable growth and enhance our long-term profitability,” continued Ms. Owen. “Our commitment to digital transformation with the continued rollout of our new, proprietary JobStack app, along with expansion in attractive end markets such as skilled trades and healthcare will fuel our growth as demand rebounds. Additionally, simplifying our organizational structure and taking decisive cost actions not only aligns TrueBlue with the current environment, but ensures we are even better positioned to capitalize on growth opportunities and expand our profitability as conditions improve.”

Results

Second quarter revenue was $396 million, a decrease of 17 percent compared to revenue of $476 million in the second quarter of 2023. Net loss per diluted share was $3.45 compared to net loss per diluted share of $0.24 in the prior year period. Adjusted net loss1 per diluted share was $0.35 compared to adjusted net income per diluted share of $0.11 in the prior year period.

2024 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 second quarter 2024 results on a webcast at 2:00 p.m. PT (5:00 p.m. ET), today, Monday, Aug. 5, 2024. The webcast can be accessed on the Investor Relations section of the TrueBlue website: investor.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 2023, TrueBlue served approximately 67,000 clients and connected approximately 464,000 people with work. Its PeopleReady segment offers on-demand, industrial staffing, PeopleScout offers recruitment process outsourcing (RPO) and managed service provider (MSP) solutions, and PeopleManagement offers contingent, on-site industrial staffing and commercial driver services. 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, expectations regarding stabilization in demand, 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, which can be negatively impacted by factors such as rising interest rates, inflation, political instability, epidemics and global trade uncertainty, (2) our ability to maintain profit margins, (3) our ability to successfully execute on business strategies and further digitalize our business model, (4) our ability to attract sufficient qualified candidates and employees to meet the needs of our clients, (5) our ability to attract and retain clients, (6) our ability to access sufficient capital to finance our operations, including our ability to comply with covenants contained in our revolving credit facility, (7) new laws, regulations, and government incentives that could affect our operations or financial results, (8) any reduction or change in tax credits we utilize, including the Work Opportunity Tax Credit, and (9) 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. Other information regarding factors that could affect our results is included in our Securities and 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 U.S. 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

Investor Relations
InvestorRelations@trueblue.com


TRUEBLUE, INC.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
13 weeks ended
26 weeks ended
(in thousands, except per share data)Jun 30, 2024Jun 25, 2023Jun 30, 2024Jun 25, 2023
Revenue from services$396,230 $475,588 $799,083 $940,876 
Cost of services291,807 345,097 595,274 687,272 
Gross profit104,423 130,491 203,809 253,604 
Selling, general and administrative expense97,018 121,282 203,955 243,927 
Depreciation and amortization7,691 6,280 15,649 12,691 
Goodwill and intangible asset impairment charge59,674 9,485 59,674 9,485 
Loss from operations(59,960)(6,556)(75,469)(12,499)
Interest and other income (expense), net
1,741 578 3,340 1,592 
Loss before tax expense
(58,219)(5,978)(72,129)(10,907)
Income tax expense
46,491 1,345 34,279 705 
Net loss
$(104,710)$(7,323)$(106,408)$(11,612)
Net loss per common share:
Basic$(3.45)$(0.24)$(3.46)$(0.37)
Diluted$(3.45)$(0.24)$(3.46)$(0.37)
Weighted average shares outstanding:
Basic30,349 30,966 30,725 31,629 
Diluted30,349 30,966 30,725 31,629 


TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)Jun 30, 2024Dec 31, 2023
ASSETS
Cash and cash equivalents$26,400 $61,885 
Accounts receivable, net231,064 252,538 
Other current assets43,180 40,570 
Total current assets300,644 354,993 
Property and equipment, net92,100 104,906 
Restricted cash, cash equivalents and investments
183,352 192,985 
Goodwill and intangible assets, net31,941 94,639 
Other assets, net115,656 151,860 
Total assets$723,693 $899,383 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable and other accrued expenses$36,107 $56,401 
Accrued wages and benefits65,774 80,120 
Current portion of workers’ compensation claims reserve38,728 44,866 
Other current liabilities17,380 22,712 
Total current liabilities157,989 204,099 
Workers’ compensation claims reserve, less current portion139,251 151,649 
Other long-term liabilities88,689 85,762 
Total liabilities385,929 441,510 
Shareholders’ equity337,764 457,873 
Total liabilities and shareholders’ equity$723,693 $899,383 


























TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
26 weeks ended
(in thousands)Jun 30, 2024Jun 25, 2023
Cash flows from operating activities:
Net loss$(106,408)$(11,612)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization15,649 12,691 
Goodwill and intangible asset impairment charge59,674 9,485 
Provision for credit losses630 2,408 
Stock-based compensation4,844 5,294 
Deferred income taxes33,997 (22)
Non-cash lease expense6,200 6,249 
Other operating activities(3,118)(1,099)
Changes in operating assets and liabilities:
Accounts receivable21,061 43,915 
Income taxes receivable and payable430 (3,039)
Other assets8,246 15,053 
Accounts payable and other accrued expenses(18,849)(26,968)
Accrued wages and benefits(14,753)(9,277)
Workers’ compensation claims reserve(18,537)(19,899)
Operating lease liabilities(6,139)(6,295)
Other liabilities1,011 3,980 
Net cash (used in) provided by operating activities
(16,062)20,864 
Cash flows from investing activities:
Capital expenditures(13,279)(15,738)
Proceeds from business divestiture, net
2,928 — 
Payments for company-owned life insurance(4,000)(2,347)
Purchases of restricted held-to-maturity investments(10,180)(9,955)
Maturities of restricted held-to-maturity investments19,220 15,613 
Net cash used in investing activities
(5,311)(12,427)
Cash flows from financing activities:
Purchases and retirement of common stock(16,986)(34,200)
Net proceeds from employee stock purchase plans417 509 
Common stock repurchases for taxes upon vesting of restricted stock(2,143)(2,514)
Other(1,807)(91)
Net cash used in financing activities(20,519)(36,296)
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents
(557)(20)
Net change in cash, cash equivalents, and restricted cash and cash equivalents
(42,449)(27,879)
Cash, cash equivalents and restricted cash and cash equivalents, beginning of period
99,306 135,631 
Cash, cash equivalents and restricted cash and cash equivalents, end of period
$56,857 $107,752 



TRUEBLUE, INC.
SEGMENT DATA
(Unaudited)

13 weeks ended
(in thousands)Jun 30, 2024Jun 25, 2023
Revenue from services:
PeopleReady$223,409 $275,318 
PeopleScout41,070 59,710 
PeopleManagement131,751 140,560 
Total company$396,230 $475,588 
Segment profit (1):
PeopleReady$394 $8,158 
PeopleScout3,430 8,817 
PeopleManagement3,395 2,250 
Total segment profit7,219 19,225 
Corporate unallocated expense(6,150)(8,215)
Total company Adjusted EBITDA (2)
1,069 11,010 
Third-party processing fees for hiring tax credits (3)
(90)(110)
Amortization of software as a service assets (4)(1,452)(952)
Goodwill and intangible asset impairment charge(59,674)(9,485)
PeopleReady technology upgrade costs (5)(39)(174)
COVID-19 government subsidies, net (6)
9,696 — 
Other adjustments, net (7)(1,779)(565)
EBITDA (2)
(52,269)(276)
Depreciation and amortization (7,691)(6,280)
Interest and other income (expense), net
1,741 578 
Loss before tax expense
(58,219)(5,978)
Income tax expense
(46,491)(1,345)
Net loss$(104,710)$(7,323)
(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)COVID-19 government subsidies net of related fees ($2.9 million in cost of services and $6.8 million in selling, general and administrative expense).
(7)Other adjustments for the 13 weeks ended June 30, 2024 and June 25, 2023 primarily include workforce reduction costs of $1.5 million ($0.2 million in cost of services and $1.3 million in selling, general and administrative expense) and $0.6 million ($0.2 million in cost of services and $0.4 million in selling, general and administrative expense), respectively.


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 measure
Definition
Purpose of adjusted measures
Adjusted net income (loss) and
Adjusted net income (loss) per diluted share
Net loss and net loss per diluted share, excluding:
–amortization of intangibles,
–goodwill and intangible asset impairment charge,
–PeopleReady technology upgrade costs,
–COVID-19 government subsidies, net,
–other adjustments, net, and
–tax effect of the adjustments and deferred tax asset valuation allowance.

–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 loss:
–income tax expense,
–interest and other (income) expense, net, 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,
–PeopleReady technology upgrade 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 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, net 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 LOSS TO ADJUSTED NET INCOME (LOSS) AND ADJUSTED NET INCOME (LOSS) PER DILUTED SHARE
(Unaudited)
13 weeks ended
(in thousands, except for per share data)Jun 30, 2024Jun 25, 2023
Net loss
$(104,710)$(7,323)
Amortization of intangible assets
1,369 1,274 
Goodwill and intangible asset impairment charge
59,674 9,485 
PeopleReady technology upgrade costs (1)
39 174 
COVID-19 government subsidies, net (2)
(9,696)— 
Other adjustments, net (3)
1,779 565 
Tax effect of adjustments and deferred tax asset valuation allowance (4)
40,855 (677)
Adjusted net income (loss)
$(10,690)$3,498 
Adjusted net income (loss) per diluted share
$(0.35)$0.11 
Diluted weighted average shares outstanding30,349 31,185 
Margin / % of revenue:
Net loss
(26.4)%(1.5)%
Adjusted net income (loss)
(2.7)%0.7%
2.RECONCILIATION OF U.S. GAAP NET LOSS TO EBITDA AND ADJUSTED EBITDA
(Unaudited)
13 weeks ended
(in thousands)Jun 30, 2024Jun 25, 2023
Net loss
$(104,710)$(7,323)
Income tax expense
46,491 1,345 
Interest and other (income) expense, net
(1,741)(578)
Depreciation and amortization
7,691 6,280 
EBITDA
(52,269)(276)
Third-party processing fees for hiring tax credits (5)
90 110 
Amortization of software as a service assets (6)
1,452 952 
Goodwill and intangible asset impairment charge59,674 9,485 
PeopleReady technology upgrade costs (1)39 174 
COVID-19 government subsidies, net (2)
(9,696)— 
Other adjustments, net (3)1,779 565 
Adjusted EBITDA
$1,069 $11,010 
Margin / % of revenue:
Net loss
(26.4)%(1.5)%
Adjusted EBITDA
0.3%2.3%


3.RECONCILIATION OF U.S. GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSE TO ADJUSTED SG&A EXPENSE
(Unaudited)
13 weeks ended
(in thousands)Jun 30, 2024Jun 25, 2023
Selling, general and administrative expense
$97,018 $121,282 
Third-party processing fees for hiring tax credits (5)(90)(110)
Amortization of software as a service assets (6)(1,452)(952)
PeopleReady technology upgrade costs (1)(39)(174)
COVID-19 government subsidies, net (2)
6,803 — 
Other adjustments, net (3)(1,608)(390)
Adjusted SG&A expense
$100,632 $119,656 
% of revenue:
Selling, general and administrative expense
24.5%25.5%
Adjusted SG&A expense
25.4%25.2%
(1)Costs associated with upgrading legacy PeopleReady technology.
(2)COVID-19 government subsidies net of related fees ($2.9 million in cost of services and $6.8 million in selling, general and administrative expense).
(3)Other adjustments for the 13 weeks ended June 30, 2024 and June 25, 2023 primarily include workforce reduction costs of $1.5 million ($0.2 million in cost of services and $1.3 million in selling, general and administrative expense) and $0.6 million ($0.2 million in cost of services and $0.4 million in selling, general and administrative expense), respectively.
(4)The tax effect includes the application of our statutory rate of 26% to all taxable / deductible adjustments. The tax effect for the thirteen weeks ended June 30, 2024 also includes the $55 million valuation allowance recorded against the U.S. federal and state deferred tax assets. Note, prior periods were reported using the effective rate for the respective period and have been recast to conform to the current presentation for comparability. Please refer to the reconciliations on the financial results page under the investor relations section of our website for additional information on comparable historical periods.
(5)These third-party processing fees are associated with generating hiring tax credits.
(6)Amortization of software as a service assets is reported in selling, general and administrative expense.