UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: March 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-14543 ____________________________________ TrueBlue, Inc. (Exact name of registrant as specified in its charter) ______________________________________ Washington 91-12873 ...

TRUEBLUE REPORTS FIRST QUARTER 2024 RESULTS TACOMA, WASH. - May 6, 2024 -- TrueBlue (NYSE:TBI) today announced its first quarter results for 2024. First quarter revenue was $403 million, a decrease of 13 percent compared to revenue of $465 million in the first quarter of 2023. Net loss per diluted share was $0.05 compared to net loss per diluted share of $0.13 in the prior year period. Adjusted net income per diluted share was $0.03 compared to adjusted net loss per diluted share of $0.07 in the prior year ...

TrueBlue, Inc. (NYSE:TBI) Q4 2023 Earnings Call Transcript February 21, 2024 5:00 PM ET Company Participants Taryn Owen - President and CEO Carl Schweihs - CFO Conference Call Participants Jeff Silber - BMO Capital Markets Mark Marcon - Baird Will Brunemann - Northcoast Research Marc Riddick - Sidoti & Company Operator Greetings and welcome to the TrueBlue Fourth Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal p ...

This presentation 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 presentation and involve many risks and uncertainties that could ca ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) TrueBlue, Inc. provides specialized workforce solutions through three segments, connecting 464,000 people with work in 2023 [Business Overview](index=5&type=section&id=Business%20Overview) In fiscal 2023, TrueBlue connected 464,000 people with work for 67,000 clients across its three core segments 2023 Operational Highlights by Segment | Segment | People Connected with Work | Key Services | | :--- | :--- | :--- | | **PeopleReady** | ~195,000 | General temporary, temp-to-hire, skilled trades | | **PeopleScout** | ~224,000 | Recruitment Process Outsourcing (RPO), Managed Service Provider (MSP) | | **PeopleManagement** | ~45,000 | On-site contingent staffing, commercial driver services | - The company utilizes proprietary technology platforms to enhance service delivery across its segments: JobStack for PeopleReady, Affinix for PeopleScout, and Stafftrack for PeopleManagement's on-site services[19](index=19&type=chunk)[21](index=21&type=chunk)[32](index=32&type=chunk) [Business Strategy](index=7&type=section&id=Business%20Strategy) The company's strategy focuses on organic growth through technology investments to enhance client and associate experience and improve profitability - A core part of the strategy is continued investment in technology platforms like JobStack, Stafftrack, and Affinix to differentiate services and improve efficiency[30](index=30&type=chunk)[32](index=32&type=chunk) - The fiscal 2024 strategy emphasizes accelerating business growth, enhancing profitability, and simplifying the operating structure to improve operational excellence and innovation[32](index=32&type=chunk) [Competition](index=9&type=section&id=Competition) The staffing and human resource outsourcing industries are highly fragmented and competitive, with TrueBlue competing on price, speed, quality, and technology - The staffing industry is large, highly fragmented, and includes competition from local, regional, national, and online/app-based companies[33](index=33&type=chunk) - Significant competitive factors are price, ability to promptly fill orders, quality of associates, and technology tools[33](index=33&type=chunk) - TrueBlue's competitive differentiators include its specialized industry approach, national presence, investment in technology, and proprietary mobile apps[35](index=35&type=chunk) [Clients](index=9&type=section&id=Clients) In fiscal 2023, TrueBlue served approximately 67,000 clients, with the top ten accounting for 20.5% of total revenue Top 10 Client Revenue Concentration | Fiscal Year | % of Total Revenue | | :--- | :--- | | 2023 | 20.5% | | 2022 | 19.2% | | 2021 | 17.2% | - No single client accounted for more than **10.0% of total company revenue** in fiscal 2023, 2022, or 2021[38](index=38&type=chunk) [Human Capital Management](index=10&type=section&id=Human%20Capital%20Management) As of December 31, 2023, TrueBlue employed approximately 5,000 FTEs globally, emphasizing DEI, talent development, and associate safety - The company employed approximately **5,000 FTE employees** as of December 31, 2023, with about **3,700 in North America**[41](index=41&type=chunk) - As of year-end 2023, approximately **64% of the global FTE employee population** and **48% of directors and above were female**. **78% of the Board** is comprised of members from under-represented groups[50](index=50&type=chunk) - The company has a strong focus on associate safety, with an integrated risk management program, employee incentive compensation tied to safety metrics, and client site visits to address safety risks[54](index=54&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20factors) The company faces significant operational, financial, legal, industry, and cybersecurity risks, including economic dependency and technology failure - **Operational Risk**: Demand for workforce solutions is highly dependent on economic conditions, and a slowdown can significantly decrease revenues and profits[60](index=60&type=chunk) - **Technology Risk**: Failure to invest in and improve technology to meet client and associate expectations, especially with the rise of AI and online platforms, could negatively impact financial results[63](index=63&type=chunk)[64](index=64&type=chunk) - **Insurance Risk**: The business is dependent on obtaining workers' compensation insurance at reasonable terms, and unexpected changes could negatively impact financial condition[66](index=66&type=chunk) - **Cybersecurity Risk**: The business requires storing confidential information, making systems vulnerable to security breaches which could lead to litigation, financial loss, and reputational harm[96](index=96&type=chunk)[97](index=97&type=chunk) - **Regulatory Risk**: The workforce solutions industry is subject to extensive and changing government regulations, which could increase costs and harm future earnings[89](index=89&type=chunk) [Cybersecurity](index=21&type=section&id=Item%201C.%20Cybersecurity) TrueBlue manages cybersecurity risks through a NIST-aligned, ISO 27001 certified program, with Board oversight and no material incidents in three years - The company's cybersecurity risk management approach is aligned with the National Institute of Standards and Technology (NIST) and is **ISO 27001 certified**[114](index=114&type=chunk) - The Innovation and Technology (I&T) Committee of the Board, comprising all board members, is responsible for overseeing cybersecurity risks and receives quarterly updates from management[121](index=121&type=chunk) - In the last three fiscal years, the company has not experienced any cybersecurity incidents that have materially impacted its business strategy, results of operations, or financial condition[119](index=119&type=chunk) [Properties](index=23&type=section&id=Item%202.%20Properties) TrueBlue owns its Tacoma corporate headquarters and two Florida branches, leasing most other locations, and utilizes a remote/hybrid work model - The company owns its corporate headquarters in Tacoma, Washington, but leases the vast majority of its branch and office spaces[123](index=123&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=24&type=section&id=Item%205.%20Market%20for%20registrant's%20common%20equity%2C%20related%20stockholder%20matters%20and%20issuer%20purchases%20of%20equity%20securities) TrueBlue's common stock trades on the NYSE, with $55.1 million remaining for share repurchases and no cash dividends declared to date - As of December 31, 2023, **$55.1 million** remains available for repurchase under the company's **$100.0 million share repurchase program** authorized in January 2022[132](index=132&type=chunk) - No cash dividends have been declared on common stock to date[129](index=129&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%207.%20Management's%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) TrueBlue's fiscal 2023 revenue declined 15.4% to $1.9 billion, resulting in a net loss of $14.2 million amid economic uncertainty [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Fiscal 2023 revenue decreased 15.4% to $1.9 billion across all segments, leading to a $14.2 million net loss and a 20 basis point gross margin contraction Fiscal 2023 Financial Highlights (vs. 2022) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Revenue | $1,906.2M | $2,254.2M | -15.4% | | Gross Profit | $506.1M | $602.1M | -16.0% | | Gross Margin | 26.5% | 26.7% | -20 bps | | Income (Loss) from Operations | ($23.9M) | $72.2M | -133.0% | | Net Income (Loss) | ($14.2M) | $62.3M | -122.7% | | Diluted EPS | ($0.45) | $1.86 | -124.2% | Fiscal 2023 Revenue by Segment (vs. 2022) | Segment | 2023 Revenue | 2022 Revenue | Change | | :--- | :--- | :--- | :--- | | PeopleReady | $1,096.3M | $1,272.9M | -13.9% | | PeopleScout | $229.3M | $317.5M | -27.8% | | PeopleManagement | $580.6M | $663.8M | -12.5% | - A non-cash goodwill and intangible asset impairment charge of **$9.5 million** was recorded in fiscal 2023, primarily within the PeopleScout MSP reporting unit[144](index=144&type=chunk)[155](index=155&type=chunk) [Future Outlook](index=31&type=section&id=Future%20Outlook) For Q1 2024, revenue is expected to decline 10-16% year-over-year, with gross profit margin decreasing due to business mix and higher workers' compensation expense - Q1 2024 revenue is expected to decline between **10% and 16%** year-over-year[168](index=168&type=chunk) - Q1 2024 gross profit as a percentage of revenue is expected to decline between **170 and 210 basis points** compared to the prior year period[168](index=168&type=chunk) - Full-year 2024 capital expenditures are expected to be between **$23 million and $27 million**[168](index=168&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2023, TrueBlue maintained strong liquidity with $61.9 million in cash and no debt, with a new $255.0 million revolving credit facility secured in February 2024 Cash Flow Summary (Fiscal Year Ended Dec 31, 2023) | Cash Flow Activity | Amount (in thousands) | | :--- | :--- | | Net cash provided by operating activities | $34,754 | | Net cash used in investing activities | ($32,322) | | Net cash used in financing activities | ($37,583) | - At year-end 2023, the company had **$61.9 million in cash**, no outstanding debt, and total liquidity of **$147.8 million**[145](index=145&type=chunk)[169](index=169&type=chunk) - In February 2024, the company entered into a new five-year, **$255.0 million revolving credit facility**, replacing the previous one[170](index=170&type=chunk) [Summary of Critical Accounting Estimates](index=34&type=section&id=Summary%20of%20Critical%20Accounting%20Estimates) Critical accounting estimates include workers' compensation reserves, credit loss allowances, business combinations, and goodwill impairment, with an $8.9 million goodwill charge in 2023 - Key critical accounting estimates include workers' compensation reserves, allowance for credit losses, business combinations, and impairment of goodwill and intangible assets[185](index=185&type=chunk) - The workers' compensation reserve is a significant estimate, with a **5% change in claim factors** for fiscal 2023 potentially impacting costs by approximately **$2 million**[188](index=188&type=chunk) - The 2023 annual goodwill impairment test resulted in an **$8.9 million charge** for the PeopleScout MSP reporting unit due to revised, lower revenue projections and a strategic lack of technology investment[201](index=201&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%207A.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) The company is exposed to market risk from interest rate changes and foreign currency fluctuations but does not use derivative financial instruments for hedging - Primary market risks are related to interest rate changes affecting the investment portfolio and revolving credit facility, and foreign currency exchange rate fluctuations[215](index=215&type=chunk) - The company does not currently use derivative financial instruments to hedge market risks[215](index=215&type=chunk) [Financial Statements and Supplementary Data](index=40&type=section&id=Item%208.%20Financial%20statements%20and%20supplementary%20data) This section presents TrueBlue's audited consolidated financial statements for fiscal 2023, with an unqualified auditor's opinion on both financials and internal controls [Consolidated Financial Statements](index=43&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements for fiscal 2023 report total assets of $899.4 million, a net loss of $14.2 million, and $34.8 million in operating cash flow Consolidated Balance Sheet Highlights (As of Dec 31, 2023) | Account | Amount (in thousands) | | :--- | :--- | | Total Current Assets | $354,993 | | Total Assets | $899,383 | | Total Current Liabilities | $204,099 | | Total Liabilities | $441,510 | | Total Shareholders' Equity | $457,873 | Consolidated Statement of Operations Highlights (Fiscal Year 2023) | Account | Amount (in thousands) | | :--- | :--- | | Revenue from services | $1,906,243 | | Gross profit | $506,059 | | Income (loss) from operations | ($23,850) | | Net income (loss) | ($14,173) | [Notes to Consolidated Financial Statements](index=47&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies, including the $8.9 million goodwill impairment, workers' compensation reserves, and the classification of the Canadian subsidiary as held-for-sale - The company's Canadian subsidiary, Labour Ready Temporary Services, Ltd. (LRTS), was classified as held-for-sale as of December 31, 2023, with a definitive sale agreement reached on February 20, 2024[327](index=327&type=chunk)[330](index=330&type=chunk) - An annual impairment test resulted in a non-cash goodwill impairment charge of **$8.9 million** for the PeopleScout MSP reporting unit and a **$0.6 million impairment** for a trade name in the PeopleManagement segment[334](index=334&type=chunk)[339](index=339&type=chunk) - The undiscounted workers' compensation reserve was **$214.6 million** as of December 31, 2023, compared to **$270.5 million** at the end of fiscal 2022[343](index=343&type=chunk) [Controls and Procedures](index=73&type=section&id=Item%209A.%20Controls%20and%20procedures) Management concluded that both disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with an unqualified auditor's opinion - Management concluded that both disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2023[390](index=390&type=chunk)[392](index=392&type=chunk) - The independent auditor, Deloitte & Touche LLP, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting[392](index=392&type=chunk)[396](index=396&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, and Principal Accountant Fees](index=76&type=section&id=Items%2010-14) Information on directors, executive officers, corporate governance, compensation, and principal accountant fees is incorporated by reference from the 2024 proxy statement - Information regarding directors, executive officers, corporate governance, executive compensation, security ownership, and principal accountant fees is incorporated by reference from the company's definitive proxy statement for the 2024 Annual Meeting of Shareholders[407](index=407&type=chunk)[408](index=408&type=chunk)[409](index=409&type=chunk) Part IV [Exhibits](index=77&type=section&id=Item%2015.%20Exhibits) This section contains the financial statements and a comprehensive index of all exhibits filed with the Form 10-K - This section contains the financial statements and a comprehensive index of all exhibits filed with the Form 10-K[413](index=413&type=chunk)[415](index=415&type=chunk)

Financial Performance - Fourth quarter revenue was $492 million, a decrease of 12% compared to $558 million in Q4 2022, and a 15% decrease on a comparable 13-week basis [4]. - Full-year revenue for 2023 was $1.9 billion, down 15% from $2.3 billion in 2022 [4]. - Net loss per diluted share for Q4 2023 was $0.08, compared to net income of $0.21 per diluted share in Q4 2022; full-year net loss per diluted share was $0.45 compared to net income of $1.86 in 2022 [4]. - The company reported a net loss of $3 million in Q4 2023, with adjusted EBITDA of $5 million [6]. - Total company revenue for Q4 2023 was $492,171,000, a decrease of 11.7% compared to $557,695,000 in Q4 2022 [18]. - Adjusted EBITDA for Q4 2023 was $5,149,000, down 75.5% from $21,006,000 in Q4 2022 [22]. - Net income for Q4 2023 was a loss of $2,551,000, compared to a profit of $7,045,000 in Q4 2022 [21]. - Adjusted net income for Q4 2023 was $2,642,000, compared to $13,000,000 in Q4 2022, a decline of 79.7% [21]. - Total segment profit for Q4 2023 was $13,611,000, down 53.3% from $29,107,000 in Q4 2022 [18]. Segment Performance - PeopleReady segment revenue decreased to $285,185,000 in Q4 2023 from $314,580,000 in Q4 2022, a decline of 9.4% [18]. - PeopleManagement segment revenue was $159,782,000 in Q4 2023, down from $174,439,000 in Q4 2022, representing a decrease of 8.4% [18]. Expenses and Costs - Q4 2023 selling, general and administrative (SG&A) expense was $129,961,000, a decrease from $133,733,000 in Q4 2022 [23]. - Adjusted SG&A expense for Q4 2023 was $123,813,000, compared to $126,843,000 in Q4 2022, reflecting a reduction of 2.4% [23]. - SG&A expense as a percentage of revenue increased to 26.4% in Q4 2023 from 24.0% in Q4 2022 [23]. - Adjusted SG&A expense as a percentage of revenue rose to 25.2% in Q4 2023, up from 22.7% in Q4 2022 [23]. - Total SG&A expense for the fiscal year 2023 was $494,603,000, slightly down from $500,686,000 in 2022 [23]. - Adjusted SG&A expense for the fiscal year 2023 was $478,958,000, compared to $485,145,000 in 2022, indicating a decrease of 1.5% [23]. - The company incurred $1.8 million in workforce reduction costs during Q4 2023 [23]. - Executive leadership transition costs for the fiscal year 2023 totaled $5,788,000 [23]. - The company reported third-party processing fees related to hiring tax credits of $67,000 in Q4 2023 [23]. Organizational Strategy - TrueBlue served approximately 67,000 clients and connected about 464,000 people with work in 2023 [6]. - TrueBlue maintains zero debt, with cash of $62 million and $86 million of borrowing availability, which increased to approximately $140 million after renewing a 5-year credit facility [6]. - The company is focused on digital transformation and expansion into high-growth markets to enhance long-term profitability [3]. - Management anticipates stabilization in demand and growth from digital investments as part of their forward-looking strategy [8]. - TrueBlue's organizational strategy includes a simplified structure to drive efficiencies and secure long-term growth opportunities [3]. Fiscal Year Adjustments - The fiscal fourth quarter consisted of 14 weeks compared to 13 weeks in the prior year, impacting revenue comparisons [12]. - The fiscal year 2023 included adjustments to COVID-19 government subsidies amounting to $0.5 million [23].

Financial Performance - Q3 2023 - Revenue decreased by 18% to $473 million compared to $576 million in Q3 2022[4] - Net income was $0 million, a significant decrease from $20.7 million in Q3 2022[4] - Adjusted net income decreased by 80% to $4.9 million compared to $24.3 million in Q3 2022[4] - Adjusted EBITDA decreased by 71% to $9.9 million compared to $34.5 million in Q3 2022[4] - Net income margin decreased by 360 bps to 0.0% from 3.6% in Q3 2022[4] - Adjusted net income margin decreased by 320 bps to 1.0% from 4.2% in Q3 2022[4] - Adjusted EBITDA margin decreased by 390 bps to 2.1% from 6.0% in Q3 2022[4] Segment Performance - Q3 2023 - PeopleReady revenue decreased by 15% to $283 million[35] - PeopleScout revenue decreased by 32% to $53 million[35] - PeopleManagement revenue decreased by 16% to $137 million[35] Liquidity and Capital Allocation - The company has zero debt and $47 million in cash, with $123 million of borrowing availability[31] Q4 2023 Outlook (13-week basis) - Revenue is projected to be between $450 million and $475 million, a decrease of 19% to 15% compared to the prior year[22]

TrueBlue, Inc. (NYSE:TBI) Q3 2023 Earnings Conference Call October 23, 2023 5:30 PM ET Company Participants Derrek Gafford - EVP & CFO Taryn Owen - President & CEO Conference Call Participants Jeffrey Silber - BMO Capital Markets Kartik Mehta - Northcoast Research Marc Riddick - Sidoti Mark Marcon - Baird Operator Greetings, and welcome to TrueBlue Third Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentati ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents TrueBlue, Inc.'s unaudited consolidated financial statements and management's discussion and analysis for the periods ended September 24, 2023 [Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Consolidated%20financial%20statements%20(unaudited)) This section presents TrueBlue, Inc.'s unaudited consolidated financial statements, including the Balance Sheets, Statements of Operations and Comprehensive Income (Loss), and Statements of Cash Flows, along with detailed notes on significant accounting policies, fair value measurements, restricted cash and investments, and other financial disclosures for the periods ended September 24, 2023 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets reflect a decrease in total assets and liabilities, alongside a reduction in shareholders' equity, from December 2022 to September 2023 | Metric | Sep 24, 2023 (in thousands) | Dec 25, 2022 (in thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | | **ASSETS** | | | | Total current assets | $359,606 | $430,212 | | Total assets | $915,031 | $1,019,408 | | **LIABILITIES AND SHAREHOLDERS' EQUITY** | | | | Total current liabilities | $200,574 | $242,875 | | Total liabilities | $458,405 | $523,093 | | Total shareholders' equity | $456,626 | $496,315 | | Total liabilities and shareholders' equity | $915,031 | $1,019,408 | - Total assets decreased by approximately **$104.4 million** from December 25, 2022, to September 24, 2023, primarily driven by reductions in current assets like accounts receivable and cash[11](index=11&type=chunk) - Total liabilities decreased by approximately **$64.7 million**, mainly due to lower accounts payable, accrued expenses, and workers' compensation claims reserves[11](index=11&type=chunk) [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) The statements of operations show a significant decline in revenue and a shift from net income to net loss for both the thirteen and thirty-nine-week periods ended September 24, 2023 | Metric | 13 Weeks Ended Sep 24, 2023 (in thousands) | 13 Weeks Ended Sep 25, 2022 (in thousands) | 39 Weeks Ended Sep 24, 2023 (in thousands) | 39 Weeks Ended Sep 25, 2022 (in thousands) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Revenue from services | $473,196 | $575,721 | $1,414,072 | $1,696,489 | | Gross profit | $124,173 | $155,919 | $377,777 | $454,295 | | Income (loss) from operations | $(2,726) | $24,085 | $(15,225) | $65,327 | | Net income (loss) | $(10) | $20,696 | $(11,622) | $55,228 | | Basic EPS | $0.00 | $0.64 | $(0.37) | $1.67 | | Diluted EPS | $0.00 | $0.63 | $(0.37) | $1.65 | - For the thirteen weeks ended September 24, 2023, revenue from services decreased by **17.8% year-over-year**, leading to a net loss of **$10 thousand** compared to a net income of **$20.7 million** in the prior year[13](index=13&type=chunk) - For the thirty-nine weeks ended September 24, 2023, the company reported a net loss of **$11.6 million**, a significant decline from the **$55.2 million** net income in the same period of the prior year, primarily due to decreased revenue and an impairment charge[13](index=13&type=chunk) [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows indicate a substantial decrease in cash provided by operating activities and an increase in cash used in investing activities for the thirty-nine weeks ended September 24, 2023 | Cash Flow Activity | 39 Weeks Ended Sep 24, 2023 (in thousands) | 39 Weeks Ended Sep 25, 2022 (in thousands) | | :----------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net cash provided by operating activities | $19,569 | $80,074 | | Net cash used in investing activities | $(26,556) | $(3,938) | | Net cash used in financing activities | $(37,329) | $(64,709) | | Net change in cash, cash equivalents and restricted cash | $(45,073) | $8,945 | | Cash, cash equivalents and restricted cash, end of period | $90,558 | $112,130 | - Net cash provided by operating activities significantly decreased to **$19.6 million** for the thirty-nine weeks ended September 24, 2023, from **$80.1 million** in the prior year, primarily due to lower net income[15](index=15&type=chunk) - Net cash used in investing activities increased to **$26.6 million**, driven by higher capital expenditures and purchases of restricted held-to-maturity investments[15](index=15&type=chunk) - Net cash used in financing activities decreased to **$37.3 million**, mainly due to reduced common stock repurchases[15](index=15&type=chunk) [Notes to Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20consolidated%20financial%20statements) These notes provide detailed disclosures on the company's accounting policies, fair value measurements, restricted cash, goodwill, workers' compensation, debt, commitments, equity, and income taxes [NOTE 1: Summary of Significant Accounting Policies](index=6&type=section&id=NOTE%201:%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the basis of financial statement preparation and the impact of new accounting standards - The financial statements are prepared in accordance with U.S. GAAP and SEC rules for interim financial information, with certain disclosures condensed or omitted[16](index=16&type=chunk) - No new accounting standards adopted during the thirty-nine weeks ended September 24, 2023, had a material impact, and no unadopted standards are expected to have a significant impact[19](index=19&type=chunk)[20](index=20&type=chunk) [NOTE 2: Fair Value Measurement](index=6&type=section&id=NOTE%202:%20FAIR%20VALUE%20MEASUREMENT) This note details the fair value of financial assets and liabilities, including impairment charges recognized during the period | Asset Category | Sep 24, 2023 Total Fair Value (in thousands) | Dec 25, 2022 Total Fair Value (in thousands) | | :--------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Cash, cash equivalents and restricted cash | $90,558 | $135,631 | | Restricted investments classified as held-to-maturity | $121,050 | $119,525 | - The company recognized a non-cash goodwill impairment charge of **$8.9 million** for the PeopleScout MSP reporting unit and a **$0.6 million** impairment charge for a trade name/trademark in the PeopleManagement segment for the thirty-nine weeks ended September 24, 2023[25](index=25&type=chunk)[26](index=26&type=chunk) [NOTE 3: Restricted Cash and Investments](index=7&type=section&id=NOTE%203:%20RESTRICTED%20CASH%20AND%20INVESTMENTS) This note provides a breakdown of restricted cash and investments, primarily held as collateral for insurance and workers' compensation programs | Category | Sep 24, 2023 (in thousands) | Dec 25, 2022 (in thousands) | | :----------------------------------- | :-------------------------- | :-------------------------- | | Cash collateral held by insurance carriers | $24,727 | $29,567 | | Cash and cash equivalents held in Trust | $17,842 | $30,857 | | Investments held in Trust | $125,379 | $123,678 | | Company-owned life insurance policies | $30,005 | $26,479 | | Other restricted cash and cash equivalents | $876 | $3,153 | | Total restricted cash and investments | $198,829 | $213,734 | - Restricted cash and investments primarily serve as collateral for workers' compensation and state workers' compensation programs, with the majority held in a trust[28](index=28&type=chunk) - Unrealized gains related to company-owned life insurance policies were **$1.482 million** for the thirty-nine weeks ended September 24, 2023, compared to unrealized losses of **$7.076 million** in the prior year[30](index=30&type=chunk) [NOTE 4: Supplemental Balance Sheet Information](index=9&type=section&id=NOTE%204:%20SUPPLEMENTAL%20BALANCE%20SHEET%20INFORMATION) This note provides additional details on accounts receivable allowance and other current assets | Metric | 39 Weeks Ended Sep 24, 2023 (in thousands) | 39 Weeks Ended Sep 25, 2022 (in thousands) | | :---------------------------------- | :--------------------------------------- | :--------------------------------------- | | Accounts receivable allowance (beginning balance) | $3,212 | $6,687 | | Current period provision | $3,254 | $3,352 | | Write-offs | $(3,702) | $(6,731) | | Accounts receivable allowance (ending balance) | $2,762 | $3,286 | | Category | Sep 24, 2023 (in thousands) | Dec 25, 2022 (in thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Prepaid software agreements | $8,626 | $9,994 | | Other prepaid expenses | $8,640 | $9,455 | | Other current assets | $5,755 | $13,081 | | Total prepaid expenses and other current assets | $23,021 | $32,530 | [NOTE 5: Goodwill and Intangible Assets](index=10&type=section&id=NOTE%205:%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) This note details the changes in goodwill and intangible assets, including impairment charges recognized during the period | Segment | Goodwill, net (Dec 25, 2022) (in thousands) | Impairment charge (in thousands) | Goodwill, net (Sep 24, 2023) (in thousands) | | :----------------- | :---------------------------------------- | :------------------------------- | :---------------------------------------- | | PeopleReady | $60,094 | — | $60,094 | | PeopleScout | $32,199 | $(8,885) | $23,168 | | PeopleManagement | $1,491 | — | $1,491 | | Total company | $93,784 | $(8,885) | $84,753 | - A non-cash goodwill impairment charge of **$8.9 million** was recorded for the PeopleScout MSP reporting unit due to revised internal revenue projections and a strategic lack of technology investment in a competitive market[35](index=35&type=chunk) - A non-cash impairment charge of **$0.6 million** was recorded for a trade name/trademark in the PeopleManagement segment, primarily due to an increased discount rate and lower projected revenues[38](index=38&type=chunk) [NOTE 6: Workers' Compensation Insurance and Reserves](index=11&type=section&id=NOTE%206:%20WORKERS'%20COMPENSATION%20INSURANCE%20AND%20RESERVES) This note describes the company's self-insurance program for workers' compensation and the associated reserve balances - The company is substantially self-insured for workers' compensation claims, with policies covering claims above a **$5.0 million** deductible limit[41](index=41&type=chunk) | Metric | Sep 24, 2023 (in thousands) | Dec 25, 2022 (in thousands) | | :----------------------------------- | :-------------------------- | :-------------------------- | | Undiscounted workers' compensation reserve | $237,242 | $270,468 | | Less discount on workers' compensation reserve | $19,790 | $19,458 | | Workers' compensation reserve, net of discount | $217,452 | $251,010 | | Long-term portion | $173,361 | $201,005 | - Workers' compensation cost for the thirty-nine weeks ended September 24, 2023, was **$18.5 million**, a decrease from **$28.0 million** in the prior year[45](index=45&type=chunk) [NOTE 7: Long-Term Debt](index=13&type=section&id=NOTE%207:%20LONG-TERM%20DEBT) This note outlines the company's revolving credit facility and its compliance with financial covenants - The company has a **$300.0 million** Revolving Credit Facility, maturing on March 16, 2025, with an option to increase to **$450.0 million**[46](index=46&type=chunk) - As of September 24, 2023, **$7.2 million** was utilized by standby letters of credit, leaving **$292.8 million** unused, with **$123.0 million** available for additional borrowing due to the most restrictive covenant[46](index=46&type=chunk) - The company was in compliance with all financial covenants, including a consolidated leverage ratio of **0.17** (less than 3.00) and a consolidated fixed charge coverage ratio of **27.83** (greater than 1.25)[51](index=51&type=chunk)[52](index=52&type=chunk) [NOTE 8: Commitments and Contingencies](index=14&type=section&id=NOTE%208:%20COMMITMENTS%20AND%20CONTINGENCIES) This note details the company's collateral commitments and its assessment of legal proceedings | Commitment Type | Sep 24, 2023 (in thousands) | Dec 25, 2022 (in thousands) | | :------------------------------------------ | :-------------------------- | :-------------------------- | | Cash collateral held by workers' compensation insurance carriers | $18,872 | $23,716 | | Cash and cash equivalents held in Trust | $17,842 | $30,857 | | Investments held in Trust | $125,379 | $123,678 | | Letters of credit | $6,077 | $6,077 | | Surety bonds | $20,725 | $20,806 | | Total collateral commitments | $188,895 | $205,134 | - Total collateral commitments decreased by **$16.2 million** during the thirty-nine weeks ended September 24, 2023, primarily due to reduced collateral requirements from insurance carriers and the use of collateral for workers' compensation claims[103](index=103&type=chunk) - The company believes that liabilities for legal proceedings are immaterial and that the aggregate range of reasonably possible losses in excess of accrued amounts is also immaterial[55](index=55&type=chunk) [NOTE 9: Shareholders' Equity](index=15&type=section&id=NOTE%209:%20SHAREHOLDERS'%20EQUITY) This note provides a summary of changes in shareholders' equity, including common stock shares and retained earnings | Metric | 39 Weeks Ended Sep 24, 2023 (in thousands) | 39 Weeks Ended Sep 25, 2022 (in thousands) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | | Common stock shares (beginning balance) | 32,730 | 34,861 | | Common stock shares (ending balance) | 31,109 | 32,693 | | Retained earnings (beginning balance) | $516,332 | $508,813 | | Net income (loss) | $(11,622) | $55,228 | | Purchases and retirement of common stock | $(34,178) | $(60,939) | | Total shareholders' equity ending balance | $456,626 | $486,814 | - Shareholders' equity decreased from **$496.3 million** at December 25, 2022, to **$456.6 million** at September 24, 2023, influenced by net loss and common stock repurchases[11](index=11&type=chunk)[57](index=57&type=chunk) - The company repurchased **$34.2 million** of common stock during the thirty-nine weeks ended September 24, 2023[112](index=112&type=chunk) [NOTE 10: Income Taxes](index=15&type=section&id=NOTE%2010:%20INCOME%20TAXES) This note explains the effective income tax rate and the factors contributing to its difference from the statutory federal rate - The effective income tax rate for the thirty-nine weeks ended September 24, 2023, was **12.2%**, lower than the statutory federal rate of **21.0%**[59](index=59&type=chunk) - The difference in the effective tax rate was primarily due to a non-deductible goodwill impairment charge and the federal Work Opportunity Tax Credit (WOTC)[59](index=59&type=chunk)[89](index=89&type=chunk) | Tax Impact Factor | 39 Weeks Ended Sep 24, 2023 (%) | 39 Weeks Ended Sep 25, 2022 (%) | | :------------------------------------ | :------------------------------ | :------------------------------ | | Federal income tax expense (benefit) at statutory rate | 21.0% | 21.0% | | State income taxes, net of federal benefit | 3.3% | 4.2% | | Non-deductible goodwill impairment charge | (17.3)% | — | | Hiring tax credits, net | 12.0% | (9.8)% | | Non-deductible and non-taxable items | (2.8)% | 3.0% | | Stock-based compensation | (4.7)% | (0.9)% | | Other, net | 0.7% | (0.6)% | | Income tax expense (benefit) | 12.2% | 16.9% | [NOTE 11: Net Income (Loss) Per Share](index=16&type=section&id=NOTE%2011:%20NET%20INCOME%20(LOSS)%20PER%20SHARE) This note presents the basic and diluted net income (loss) per share for the thirteen and thirty-nine-week periods | Metric | 13 Weeks Ended Sep 24, 2023 | 13 Weeks Ended Sep 25, 2022 | 39 Weeks Ended Sep 24, 2023 | 39 Weeks Ended Sep 25, 2022 | | :------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income (loss) (in thousands) | $(10) | $20,696 | $(11,622) | $55,228 | | Weighted average common shares (basic, in thousands) | 30,932 | 32,434 | 31,397 | 33,023 | | Weighted average common shares (diluted, in thousands) | 30,932 | 32,818 | 31,397 | 33,511 | | Basic EPS | $0.00 | $0.64 | $(0.37) | $1.67 | | Diluted EPS | $0.00 | $0.63 | $(0.37) | $1.65 | - Diluted EPS for the thirteen weeks ended September 24, 2023, was **$0.00**, down from **$0.63** in the prior year, reflecting the net loss[60](index=60&type=chunk) - For the thirty-nine weeks ended September 24, 2023, diluted EPS was **$(0.37)**, a significant decrease from **$1.65** in the prior year[60](index=60&type=chunk) [NOTE 12: Segment Information](index=16&type=section&id=NOTE%2012:%20SEGMENT%20INFORMATION) This note provides financial information by reportable segment, including revenue and profit contributions - TrueBlue operates through three reportable segments: PeopleReady (blue-collar contingent staffing), PeopleScout (RPO, MSP, and talent advisory services), and PeopleManagement (contingent labor and outsourced industrial workforce solutions)[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) | Segment | 13 Weeks Ended Sep 24, 2023 Revenue (in thousands) | 13 Weeks Ended Sep 25, 2022 Revenue (in thousands) | 39 Weeks Ended Sep 24, 2023 Revenue (in thousands) | 39 Weeks Ended Sep 25, 2022 Revenue (in thousands) | | :---------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | PeopleReady | $283,187 | $334,639 | $811,133 | $958,272 | | PeopleManagement | $137,065 | $163,618 | $420,809 | $489,375 | | PeopleScout | $52,944 | $77,464 | $182,130 | $248,842 | | Total company | $473,196 | $575,721 | $1,414,072 | $1,696,489 | | Segment | 13 Weeks Ended Sep 24, 2023 Profit (in thousands) | 13 Weeks Ended Sep 25, 2022 Profit (in thousands) | 39 Weeks Ended Sep 24, 2023 Profit (in thousands) | 39 Weeks Ended Sep 25, 2022 Profit (in thousands) | | :---------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | PeopleReady | $9,656 | $28,732 | $18,686 | $65,276 | | PeopleManagement | $2,134 | $4,463 | $4,182 | $11,670 | | PeopleScout | $6,272 | $10,707 | $24,012 | $42,272 | | Total segment profit | $18,062 | $43,902 | $46,880 | $119,218 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) This section provides management's perspective on TrueBlue's financial performance and condition, highlighting the impact of economic uncertainty on revenue and profitability across its segments. It details the results of operations for the thirteen and thirty-nine weeks ended September 24, 2023, including revenue declines, gross profit changes, SG&A expenses, and impairment charges, alongside an outlook for the fiscal fourth quarter and a discussion of liquidity and critical accounting estimates [Comment on Forward-Looking Statements](index=18&type=section&id=COMMENT%20ON%20FORWARD-LOOKING%20STATEMENTS) This section advises that the report contains forward-looking statements subject to risks and uncertainties, with no duty to update them - The report contains forward-looking statements subject to risks and uncertainties, and the company undertakes no duty to update them[66](index=66&type=chunk) [Business Overview](index=18&type=section&id=BUSINESS%20OVERVIEW) TrueBlue is a leading provider of specialized workforce solutions, leveraging digital strategies to enhance client and employee engagement and reduce service delivery costs across its three core segments - TrueBlue is a leading provider of specialized workforce solutions, with client demand heavily influenced by economic strength and labor market trends[67](index=67&type=chunk) - The company is committed to digital strategies to attract and retain clients and employees, and reduce service delivery costs across its PeopleReady, PeopleScout, and PeopleManagement segments[67](index=67&type=chunk) [PeopleReady](index=18&type=section&id=PeopleReady) PeopleReady specializes in providing on-demand and skilled blue-collar labor across various industries, utilizing its JobStack mobile app for efficient service delivery - PeopleReady provides on-demand and skilled blue-collar labor across various industries, leveraging its mobile app JobStack for digital exchange and improved service delivery[68](index=68&type=chunk) [PeopleScout](index=19&type=section&id=PeopleScout) PeopleScout offers RPO, MSP solutions, and talent advisory services, employing its proprietary AI/machine learning platform Affinix for rapid talent sourcing - PeopleScout offers RPO, MSP solutions, and talent advisory services, utilizing its proprietary AI/machine learning platform Affinix for rapid talent sourcing[69](index=69&type=chunk) [PeopleManagement](index=19&type=section&id=PeopleManagement) PeopleManagement delivers on-site management and recruitment for contingent industrial workforces and dedicated commercial drivers through its Centerline Drivers brand - PeopleManagement provides on-site management and recruitment for contingent industrial workforces and dedicated commercial drivers through its Centerline Drivers brand[70](index=70&type=chunk) [Fiscal Third Quarter of 2023 Summary](index=19&type=section&id=Fiscal%20third%20quarter%20of%202023%20summary) The fiscal third quarter of 2023 saw a significant revenue decline and a net loss, primarily due to economic uncertainty, despite the company maintaining substantial liquidity - Total company revenue declined **17.8%** to **$473.2 million** for the thirteen weeks ended September 24, 2023, due to economic uncertainty impacting demand across all segments[71](index=71&type=chunk) - Gross profit as a percentage of revenue decreased by **90 basis points** to **26.2%**, driven by a shift towards lower-margin staffing businesses[72](index=72&type=chunk) - The company reported a net loss of **$0.0 million** for the quarter, compared to a net income of **$20.7 million** in the prior year[74](index=74&type=chunk) - As of September 24, 2023, the company had **$47.1 million** in cash and cash equivalents, no debt, and **$123.0 million** available under its revolving credit agreement, totaling **$170.1 million** in liquidity[74](index=74&type=chunk) [Results of Operations](index=20&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, detailing revenue, gross profit, SG&A expenses, and impairment charges for the reported periods [Total Company Results](index=20&type=section&id=Total%20company%20results) The total company results show a decline in revenue and a shift to net loss for both the thirteen and thirty-nine-week periods ended September 24, 2023 | Metric | 13 Weeks Ended Sep 24, 2023 | 13 Weeks Ended Sep 25, 2022 | 39 Weeks Ended Sep 24, 2023 | 39 Weeks Ended Sep 25, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Revenue from services (in thousands) | $473,196 | $575,721 | $1,414,072 | $1,696,489 | | Gross profit % of revenue | 26.2% | 27.1% | 26.7% | 26.8% | | SG&A expense % of revenue | 25.5% | 21.6% | 25.8% | 21.6% | | Income (loss) from operations (in thousands) | $(2,726) | $24,085 | $(15,225) | $65,327 | | Net income (loss) (in thousands) | $(10) | $20,696 | $(11,622) | $55,228 | | Diluted EPS | $0.00 | $0.63 | $(0.37) | $1.65 | [Revenue from Services](index=20&type=section&id=Revenue%20from%20services) Revenue from services experienced an overall decline across all segments due to economic uncertainty, prompting clients to reduce outsourced labor and manage costs | Segment | 13 Weeks Ended Sep 24, 2023 Revenue (in thousands) | YoY Growth (Decline) % | 39 Weeks Ended Sep 24, 2023 Revenue (in thousands) | YoY Growth (Decline) % | | :---------------- | :--------------------------------------- | :--------------------- | :--------------------------------------- | :--------------------- | | PeopleReady | $283,187 | (15.4)% | $811,133 | (15.4)% | | PeopleScout | $52,944 | (31.7)% | $182,130 | (26.8)% | | PeopleManagement | $137,065 | (16.2)% | $420,809 | (14.0)% | | Total company | $473,196 | (17.8)% | $1,414,072 | (16.6)% | - Overall revenue decline was primarily due to continued economic uncertainty, leading clients to reduce reliance on outsourced labor and manage costs[76](index=76&type=chunk) [PeopleReady Revenue](index=20&type=section&id=PeopleReady%20(Revenue)) PeopleReady revenue declined by 15.4% for both the thirteen and thirty-nine-week periods, as clients reduced variable labor amidst economic uncertainty - PeopleReady revenue declined **15.4%** for both the thirteen and thirty-nine weeks ended September 24, 2023, as clients reduced variable labor to manage costs amid economic uncertainty[77](index=77&type=chunk) [PeopleScout Revenue](index=21&type=section&id=PeopleScout%20(Revenue)) PeopleScout revenue declined significantly by 31.7% and 26.8% for the thirteen and thirty-nine-week periods, respectively, as clients reduced hiring volumes due to economic uncertainty - PeopleScout revenue declined **31.7%** for the thirteen weeks and **26.8%** for the thirty-nine weeks ended September 24, 2023, as clients responded to economic uncertainty by reducing hiring volumes and initiating hiring freezes[78](index=78&type=chunk) [PeopleManagement Revenue](index=21&type=section&id=PeopleManagement%20(Revenue)) PeopleManagement revenue declined by 16.2% and 14.0% for the thirteen and thirty-nine-week periods, respectively, as clients reduced their dependence on variable labor - PeopleManagement revenue declined **16.2%** for the thirteen weeks and **14.0%** for the thirty-nine weeks ended September 24, 2023, as clients reduced dependence on variable labor[79](index=79&type=chunk) [Gross Profit](index=21&type=section&id=Gross%20profit) Gross profit as a percentage of revenue declined due to unfavorable revenue shifts towards lower-margin businesses and higher workers' compensation costs, partially offset by disciplined pricing - Gross profit as a percentage of revenue declined **90 basis points** to **26.2%** for the thirteen weeks ended September 24, 2023, primarily due to unfavorable revenue shifts towards lower-margin staffing businesses and higher workers' compensation costs, partially offset by disciplined pricing[80](index=80&type=chunk) - For the thirty-nine weeks, gross profit as a percentage of revenue declined **10 basis points** to **26.7%**, with contraction from revenue mix partially offset by lower workers' compensation costs and higher bill rates[81](index=81&type=chunk) [SG&A Expense](index=21&type=section&id=SG%26A%20expense) SG&A expense decreased for both periods due to cost-cutting measures, partially offset by inflation in employee medical benefits and executive leadership transition costs - Total company SG&A expense decreased by **$3.6 million (2.9%)** for the thirteen weeks ended September 24, 2023, due to **$12 million** in cost-cutting measures, partially offset by inflation in employee medical benefits and **$2.5 million** in executive leadership transition costs[82](index=82&type=chunk) - For the thirty-nine weeks, SG&A expense decreased by **$2.3 million (0.6%)**, with **$17 million** in cost savings offset by inflation, executive transition costs, and a prior-year benefit from a compensation accrual reversal[83](index=83&type=chunk) [Depreciation and Amortization](index=22&type=section&id=Depreciation%20and%20amortization) Depreciation and amortization decreased for both the thirteen and thirty-nine-week periods as certain assets became fully depreciated or amortized in the prior year - Depreciation and amortization decreased for both the thirteen and thirty-nine weeks ended September 24, 2023, compared to prior periods, as certain assets became fully depreciated or amortized in 2022[84](index=84&type=chunk) [Goodwill and Intangible Asset Impairment Charge](index=22&type=section&id=Goodwill%20and%20intangible%20asset%20impairment%20charge) The company recorded significant non-cash impairment charges for goodwill and a trade name/trademark due to revised projections and market conditions | Asset Type | Segment | 39 Weeks Ended Sep 24, 2023 Impairment Charge (in thousands) | | :-------------------- | :-------------- | :------------------------------------------------------- | | Goodwill | PeopleScout | $8,885 | | Trade names/trademark | PeopleManagement | $600 | | Total | | $9,485 | - An **$8.9 million** goodwill impairment charge was recorded for PeopleScout MSP due to revised revenue projections and underperformance from a lack of technology investment[86](index=86&type=chunk) - A **$0.6 million** impairment charge was recorded for a PeopleManagement trade name/trademark, driven by an increased discount rate and lower projected revenues[87](index=87&type=chunk) [Income Tax Expense](index=23&type=section&id=Income%20tax%20expense) The effective income tax rate for the thirty-nine weeks ended September 24, 2023, was 12.2%, primarily influenced by a non-deductible goodwill impairment charge and the Work Opportunity Tax Credit - The effective income tax rate for the thirty-nine weeks ended September 24, 2023, was **12.2%**, influenced by a non-deductible goodwill impairment charge and the Work Opportunity Tax Credit (WOTC)[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk) | Tax Impact Factor | 13 Weeks Ended Sep 24, 2023 (%) | 13 Weeks Ended Sep 25, 2022 (%) | 39 Weeks Ended Sep 24, 2023 (%) | 39 Weeks Ended Sep 25, 2022 (%) | | :------------------------------------ | :------------------------------ | :------------------------------ | :------------------------------ | :------------------------------ | | Federal income tax expense (benefit) at statutory rate | 21.0% | 21.0% | 21.0% | 21.0% | | State income taxes, net of federal benefit | (4.6)% | 5.0% | 3.3% | 4.2% | | Non-deductible goodwill impairment charge | — | — | (17.3)% | — | | Hiring tax credits, net | 123.9% | (10.8)% | 12.0% | (9.8)% | | Income tax expense (benefit) | 99.6% | 16.5% | 12.2% | 16.9% | [Segment Performance](index=24&type=section&id=Segment%20performance) Segment profit is evaluated based on revenue, cost of services, and direct operating expenses, excluding impairment charges, depreciation, unallocated corporate expenses, and other non-ongoing costs - Segment profit is evaluated based on revenue, cost of services, and direct operating expenses, excluding impairment charges, depreciation, unallocated corporate expenses, and other non-ongoing costs[92](index=92&type=chunk) [PeopleReady Segment Performance](index=24&type=section&id=PeopleReady%20segment%20performance) PeopleReady segment profit declined significantly due to decreased revenue, high fixed-to-variable SG&A costs, and a shift towards lower-margin renewable energy business | Metric | 13 Weeks Ended Sep 24, 2023 | 13 Weeks Ended Sep 25, 2022 | 39 Weeks Ended Sep 24, 2023 | 39 Weeks Ended Sep 25, 2022 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Revenue from services (in thousands) | $283,187 | $334,639 | $811,133 | $958,272 | | Segment profit (in thousands) | $9,656 | $28,732 | $18,686 | $65,276 | | Segment profit % of revenue | 3.4% | 8.6% | 2.3% | 6.8% | - PeopleReady segment profit declined significantly due to decreased revenue, high fixed-to-variable SG&A costs, and a shift towards lower-margin renewable energy business[93](index=93&type=chunk) [PeopleScout Segment Performance](index=24&type=section&id=PeopleScout%20segment%20performance) PeopleScout segment profit declined due to reduced revenue, though workforce reductions helped mitigate the impact on operating costs | Metric | 13 Weeks Ended Sep 24, 2023 | 13 Weeks Ended Sep 25, 2022 | 39 Weeks Ended Sep 24, 2023 | 39 Weeks Ended Sep 25, 2022 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Revenue from services (in thousands) | $52,944 | $77,464 | $182,130 | $248,842 | | Segment profit (in thousands) | $6,272 | $10,707 | $24,012 | $42,272 | | Segment profit % of revenue | 11.8% | 13.8% | 13.2% | 17.0% | - PeopleScout segment profit declined due to reduced revenue, though workforce reductions helped mitigate the impact on operating costs[94](index=94&type=chunk) [PeopleManagement Segment Performance](index=24&type=section&id=PeopleManagement%20segment%20performance) PeopleManagement segment profit declined due to decreased revenue and the associated impact of higher operating leverage, despite cost reduction actions | Metric | 13 Weeks Ended Sep 24, 2023 | 13 Weeks Ended Sep 25, 2022 | 39 Weeks Ended Sep 24, 2023 | 39 Weeks Ended Sep 25, 2022 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Revenue from services (in thousands) | $137,065 | $163,618 | $420,809 | $489,375 | | Segment profit (in thousands) | $2,134 | $4,463 | $4,182 | $11,670 | | Segment profit % of revenue | 1.6% | 2.7% | 1.0% | 2.4% | - PeopleManagement segment profit declined due to decreased revenue and the associated impact of higher operating leverage, despite cost reduction actions[95](index=95&type=chunk) [Future Outlook](index=25&type=section&id=FUTURE%20OUTLOOK) The company projects a revenue decline for Q4 2023 due to macroeconomic uncertainty, with an expected income tax benefit from hiring tax credits - The fiscal fourth quarter of 2023 will include a 14th week, expected to add **$17 million to $22 million** in revenue but contribute a small net loss due to slow demand during holidays[97](index=97&type=chunk) - Revenue for Q4 2023 (on a comparable 13-week basis) is projected to decline between **19% and 15%** year-over-year due to continued macroeconomic uncertainty[98](index=98&type=chunk) - Gross profit as a percentage of revenue is anticipated to remain relatively consistent for Q4 2023 compared to the prior year[98](index=98&type=chunk) - An income tax benefit between **$4 million and $6 million** is expected for Q4 2023, primarily from hiring tax credits[98](index=98&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company maintains strong liquidity with significant cash and available credit, focusing on working capital, capital expenditures, and strategic technology investments - As of September 24, 2023, the company had **$47.1 million** in cash and cash equivalents, no debt, and **$123.0 million** available under its Revolving Credit Facility, totaling **$170.1 million** in liquidity[99](index=99&type=chunk) - Primary cash needs include working capital, capital expenditures, Revolving Credit Facility repayment, and share repurchases[100](index=100&type=chunk) - Investments are ongoing in online/mobile apps and cloud-based back-office technology to enhance competitive differentiation and operational efficiency[101](index=101&type=chunk) - Total collateral commitments for workers' compensation decreased by **$16.2 million** during the thirty-nine-week period, due to reduced requirements and use of collateral for claims[103](index=103&type=chunk) [Summary of Critical Accounting Estimates](index=27&type=section&id=SUMMARY%20OF%20CRITICAL%20ACCOUNTING%20ESTIMATES) This section outlines the company's critical accounting estimates, particularly concerning goodwill and intangible assets, which involve significant judgment and assumptions [Goodwill and Indefinite-Lived Intangible Assets](index=29&type=section&id=Goodwill%20and%20indefinite-lived%20intangible%20assets) Goodwill and indefinite-lived intangible assets are evaluated for impairment annually and when events or circumstances indicate potential impairment - Goodwill and indefinite-lived intangible assets are evaluated for impairment annually and when events or circumstances indicate potential impairment[115](index=115&type=chunk)[125](index=125&type=chunk) [Goodwill](index=29&type=section&id=Goodwill%20(Detailed)) Goodwill impairment testing is performed at the reporting unit level, involving significant estimates and judgments in fair value measurement - Goodwill impairment testing is performed at the reporting unit level (PeopleReady, PeopleManagement Centerline, PeopleScout RPO, PeopleScout MSP)[116](index=116&type=chunk) - The fair value of reporting units is estimated using a weighting of income and market valuation approaches, with significant estimates and judgments involved[119](index=119&type=chunk) - A non-cash goodwill impairment charge of **$8.9 million** was recorded for the PeopleScout MSP reporting unit due to revised revenue projections and underperformance[122](index=122&type=chunk) [Indefinite-Lived Intangible Assets](index=30&type=section&id=Indefinite-lived%20intangible%20assets%20(Detailed)) Indefinite-lived intangible assets, such as trade names and trademarks, are evaluated for impairment using the relief from royalty method - Indefinite-lived intangible assets (trade names/trademarks) are evaluated for impairment using the relief from royalty method[127](index=127&type=chunk) - A non-cash impairment charge of **$0.6 million** was recorded for a PeopleManagement trade name/trademark due to an increased discount rate and lower projected revenues[128](index=128&type=chunk) [Finite-Lived Intangible Assets and Other Long-Lived Assets](index=31&type=section&id=Finite-lived%20intangible%20assets%20and%20other%20long-lived%20assets) Finite-lived intangible assets and other long-lived assets are reviewed for impairment when circumstances indicate that their carrying value may not be recoverable - Finite-lived intangible assets and other long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable[131](index=131&type=chunk) - No impairment was identified for finite-lived intangible assets or other long-lived assets during the thirteen or thirty-nine weeks ended September 24, 2023[132](index=132&type=chunk) [New Accounting Standards](index=31&type=section&id=NEW%20ACCOUNTING%20STANDARDS) This section refers to Note 1 for details on new accounting standards, indicating no material impact from recently adopted or unadopted standards - Refer to Note 1 for details on new accounting standards, indicating no material impact from recently adopted standards and no significant impact expected from unadopted standards[133](index=133&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) This section states that there have been no material changes to the company's quantitative and qualitative disclosures about market risk since its Annual Report on Form 10-K for the fiscal year ended December 25, 2022 - No material changes in quantitative and qualitative disclosures about market risk since the prior fiscal year's 10-K[134](index=134&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20procedures) Management concluded that TrueBlue's disclosure controls and procedures were effective at a reasonable assurance level as of September 24, 2023. There were no material changes in internal control over financial reporting during the fiscal third quarter of 2023 - Disclosure controls and procedures were effective at a reasonable assurance level as of September 24, 2023[136](index=136&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal third quarter of 2023[137](index=137&type=chunk) [PART II. OTHER INFORMATION](index=32&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, defaults, mine safety, other information, and an index to exhibits [Legal Proceedings](index=32&type=section&id=Item%201.%20LEGAL%20PROCEEDINGS) This section refers to Note 8 of the consolidated financial statements for details on legal proceedings, indicating that the company believes liabilities for such matters are immaterial - Legal proceedings are discussed in Note 8, with liabilities believed to be immaterial[139](index=139&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20RISK%20FACTORS) The company reports no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 25, 2022 - No material changes to risk factors previously disclosed in the Annual Report on Form 10-K[140](index=140&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=32&type=section&id=Item%202.%20Unregistered%20sales%20of%20equity%20securities,%20use%20of%20proceeds,%20and%20issuer%20purchases%20of%20equity%20securities) This section details the company's common stock repurchases during the thirteen weeks ended September 24, 2023, including shares purchased to satisfy employee tax withholding obligations and the remaining authorization under the share repurchase program | Period | Total Shares Purchased (1) | Weighted Average Price Paid Per Share (2) | Approximate Dollar Value Remaining Under Program (3) | | :-------------------------- | :------------------------- | :---------------------------------------- | :--------------------------------------------------- | | 6/26/2023 through 7/23/2023 | 3,067 | $17.73 | $55.1 million | | 7/24/2023 through 8/20/2023 | 2,647 | $15.25 | $55.1 million | | 8/21/2023 through 9/24/2023 | 891 | $15.10 | $55.1 million | | Total | 6,605 | $16.38 | | - **6,605 shares** were purchased to satisfy employee tax withholding obligations upon vesting of restricted stock, not under the publicly announced repurchase program[142](index=142&type=chunk) - As of September 24, 2023, **$55.1 million** remains available for repurchase under the existing share repurchase authorization[143](index=143&type=chunk) [Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This item is marked as 'Not applicable,' indicating no defaults upon senior securities - No defaults upon senior securities[144](index=144&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20MINE%20SAFETY%20DISCLOSURES) This item is marked as 'Not applicable,' indicating no mine safety disclosures are required - No mine safety disclosures are applicable[145](index=145&type=chunk) [Other Information](index=32&type=section&id=Item%205.%20OTHER%20INFORMATION) This section states that none of the company's directors or executive officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the fiscal third quarter of 2023 - No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal third quarter of 2023[146](index=146&type=chunk) [Index to Exhibits](index=33&type=section&id=Item%206.%20Index%20to%20exhibits) This section provides a comprehensive list of exhibits filed with the Form 10-Q, including articles of incorporation, bylaws, employment agreements, certifications, and financial statements formatted as Inline XBRL - Includes certifications from the CEO and CFO (Exhibits 31.1, 31.2, 32.1) and financial statements formatted as Inline XBRL (Exhibit 101)[147](index=147&type=chunk) [SIGNATURES](index=34&type=section&id=SIGNATURES) This section contains the signatures of TrueBlue, Inc.'s Chief Executive Officer and President, Chief Financial Officer and Executive Vice President, and Chief Accounting Officer, Treasurer and Senior Vice President, certifying the filing of the report on October 23, 2023 - The report was signed by Taryn R. Owen (CEO and President), Derrek L. Gafford (CFO and Executive Vice President), and Richard B. Christensen (Chief Accounting Officer, Treasurer and Senior Vice President) on October 23, 2023[150](index=150&type=chunk)

TrueBlue, Inc. (NYSE:TBI) Q2 2023 Results Conference Call July 24, 2023 5:30 PM ET Company Participants Steve Cooper - CEO Derrek Gafford - EVP and CFO Taryn Owen - President and COO Conference Call Participants Jeff Silber - BMO Capital Markets Marc Riddick - Sidoti Kartik Mehta - Northcoast Research Mark Marcon - Baird Operator Greetings, and welcome to the TrueBlue Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow ...