TrueBlue(US:TBI)2025-08-04 20:50PART I. FINANCIAL INFORMATION This section presents the company's consolidated financial statements, management's discussion, market risk, and internal controls Item 1. Consolidated Financial Statements Presents TrueBlue, Inc.'s unaudited consolidated financial statements, including balance sheets, income, cash flows, and notes Consolidated Balance Sheets Total assets decreased to $672.8 million, liabilities increased to $367.6 million, impacting shareholders' equity Consolidated Balance Sheet Highlights (in thousands) | Account | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | Total current assets | $286,854 | $277,093 | | Goodwill | $42,569 | $24,543 | | Intangible assets, net | $19,410 | $5,863 | | Total assets | $672,784 | $675,376 | | Total current liabilities | $148,056 | $160,125 | | Long-term debt | $53,800 | $7,600 | | Total liabilities | $367,592 | $360,017 | | Total shareholders' equity | $305,192 | $315,359 | Consolidated Statements of Operations and Comprehensive Income (Loss) Net loss for the quarter was $0.2 million, a significant improvement from the prior year's $104.7 million loss Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Thirteen Weeks Ended June 29, 2025 | Thirteen Weeks Ended June 30, 2024 | Twenty-six Weeks Ended June 29, 2025 | Twenty-six Weeks Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue from services | $396,299 | $396,230 | $766,553 | $799,083 | | Gross profit | $93,564 | $104,423 | $179,906 | $203,809 | | Income (loss) from operations | $(2,941) | $(59,960) | $(17,064) | $(75,469) | | Net income (loss) | $(160) | $(104,710) | $(14,508) | $(106,408) | | Diluted EPS | $(0.01) | $(3.45) | $(0.49) | $(3.46) | Consolidated Statements of Cash Flows Net cash used in operations increased to $33.9 million, with financing providing $45.1 million for the HSP acquisition Cash Flow Summary (in thousands) | Cash Flow Activity | Twenty-six weeks ended June 29, 2025 | Twenty-six weeks ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(33,909) | $(16,062) | | Net cash used in investing activities | $(19,791) | $(5,311) | | Net cash provided by (used in) financing activities | $45,118 | $(20,519) | | Net change in cash, cash equivalents and restricted cash | $(8,652) | $(42,449) | Notes to Consolidated Financial Statements Notes detail accounting policies, the HSP acquisition, asset impairment, debt, and a shareholder rights agreement - Acquired Healthcare Staffing Professionals (HSP) for cash consideration of $35.2 million, adding $17.5 million in goodwill353638 - Recorded a $0.2 million impairment charge on the SMX trademark during the annual impairment test in the second quarter of 2025284666 - Adopted a limited duration shareholder rights agreement on May 14, 2025, set to expire on May 13, 2026, unless extended or terminated earlier9092 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses Q2 2025 financial performance, segment results, cost management, liquidity, and Q3 2025 outlook Business Overview and Q2 2025 Summary Q2 2025 revenue was flat at $396.3 million, gross margin declined to 23.6%, and net loss improved to $0.2 million - The company's business strategy focuses on accelerating digital transformation, expanding in high-growth markets, optimizing sales, and maintaining operational excellence110 Q2 2025 Financial Highlights vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenue | $396.3M | $396.2M | | Gross Profit % | 23.6% | 26.4% | | SG&A Expense | $89.8M | $97.0M | | Net Loss | $(0.2)M | $(104.7)M | Results of Operations Total revenue was flat, gross margin contracted by 280 basis points, and SG&A expense decreased by 7.4% Revenue by Segment - Q2 2025 vs Q2 2024 (in thousands) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | Growth (Decline) % | | :--- | :--- | :--- | :--- | | PeopleReady | $213,226 | $223,409 | (4.6)% | | PeopleManagement | $133,895 | $131,751 | 1.6% | | PeopleSolutions | $49,178 | $41,070 | 19.7% | | Total Company | $396,299 | $396,230 | 0.0% | - Gross profit margin declined by 280 basis points, primarily due to a 250 basis point contraction from revenue mix shifts toward lower-margin staffing businesses125 - SG&A expense improved by $7.2 million (7.4%) due to operational cost management actions, resulting in a leaner cost structure127 Future Outlook Q3 2025 revenue is projected to grow 5-11%, with gross margin declining and SG&A between $93 million and $97 million - Q3 2025 revenue growth is expected to be between 5% and 11% YoY, including ~4% inorganic growth from the HSP acquisition140 - Q3 2025 gross profit as a percentage of revenue is expected to decline between 240 and 280 basis points YoY140 - Anticipated SG&A expense for Q3 2025 is projected to be between $93 million and $97 million140 Liquidity and Capital Resources Total liquidity was $100.9 million, with cash used in operations and investing offset by financing activities - As of June 29, 2025, the company had $21.9 million in cash, $53.8 million in debt, and $79.0 million available for borrowing, for a total liquidity of $100.9 million119141 - The primary use of cash for investing activities in the first half of 2025 was the acquisition of HSP151 - Draws on the Revolving Credit Facility were primarily used to fund the HSP acquisition and finance working capital needs153 Item 3. Quantitative and Qualitative Disclosures About Market Risk No material changes to market risk disclosures have occurred since the last annual report - There have been no material changes in market risk disclosures since the last annual report170 Item 4. Controls and Procedures Management concluded disclosure controls were effective, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the quarter172 - No material changes were made to the company's internal control over financial reporting during the most recent fiscal quarter173 PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, other information, and an index to exhibits Item 1. Legal Proceedings The company believes liabilities from legal proceedings are immaterial and have been appropriately accrued - The company believes that liabilities from legal proceedings are immaterial and that the range of reasonably possible losses in excess of amounts accrued is also expected to be immaterial86 Item 1A. Risk Factors Updated risk factors include economic dependency, acquisition impacts, the shareholder rights plan, and unsolicited proposals - Demand for workforce solutions is highly dependent on the state of the economy, and a deterioration in economic conditions could negatively impact the business179180 - The shareholder rights plan adopted on May 14, 2025, has anti-takeover effects and could discourage transactions that shareholders may consider favorable186189 - The company has been subject to unsolicited acquisition proposals, such as the one from HireQuest, Inc. on May 13, 2025, which can cause significant expense and business disruption191192 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No shares were repurchased under the public program, with $33.5 million remaining available for future repurchases - No shares were repurchased under the publicly announced plan during the quarter193 - $33.5 million remains available for repurchase under the company's share repurchase program as of June 29, 2025195 Item 5. Other Information No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the second fiscal quarter - No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the second quarter of 2025198 Item 6. Index to Exhibits This section provides an index of all exhibits filed as part of the Form 10-Q report