TrueBlue(US:TBI)2022-10-24 20:20Revenue Performance - Total company revenue for the thirteen weeks ended September 25, 2022, was $575.7 million, a slight decline of 0.2% compared to the same period in the prior year[67][74]. - PeopleReady revenue decreased by 4.1% to $334.6 million for the thirteen weeks ended September 25, 2022, primarily due to clients pausing the use of contingent labor[75]. - PeopleManagement revenue grew by 3.7% to $163.6 million for the same period, driven by demand for commercial driving services[78]. - PeopleScout revenue increased by 10.4% to $77.5 million for the thirteen weeks ended September 25, 2022, supported by high client employee turnover rates[79]. - PeopleManagement's revenue for the thirty-nine weeks ended September 25, 2022, grew by 5.9% to $489.4 million, despite global supply chain challenges[78]. - PeopleScout's revenue for the thirty-nine weeks ended September 25, 2022, grew by 37.5% to $248.8 million, driven by project work for new clients[79]. - Total company revenue remained relatively unchanged at $575.7 million for the thirteen weeks ended September 25, 2022, compared to $577.0 million for the same period in the prior year[67]. Profitability Metrics - Gross profit as a percentage of revenue increased by 170 basis points to 27.1% for the thirteen weeks ended September 25, 2022, compared to 25.4% in the prior year[68][80]. - Net income improved by 11.0% to $20.7 million for the thirteen weeks ended September 25, 2022, compared to $18.6 million in the prior year[70]. - Gross profit as a percentage of revenue increased by 140 basis points to 26.8% for the thirty-nine weeks ended September 25, 2022, compared to 25.4% for the same period in the prior year[81]. - PeopleReady segment profit grew by $10.3 million for the thirty-nine weeks ended September 25, 2022, with a segment profit margin of 6.8% compared to 6.1% in the prior year[90]. - PeopleManagement segment profit increased by $3.0 million for the thirty-nine weeks ended September 25, 2022, with a profit margin of 2.4% compared to 1.9% in the prior year[91]. - PeopleScout segment profit rose by $17.6 million for the thirty-nine weeks ended September 25, 2022, with a profit margin of 17.0% compared to 13.6% in the prior year[92]. Expenses and Financial Outlook - Total company SG&A expense rose by $40.3 million or 12.3% for the thirty-nine weeks ended September 25, 2022, driven by employee compensation and variable costs to support revenue growth of 9.3%[83]. - Revenue for the fiscal fourth quarter of 2022 is expected to decline between 12% and 8% compared to the same period in the prior year[95]. - Anticipated gross margin contraction of between 70 and 30 basis points for the fiscal fourth quarter of 2022 due to shifts in business mix and higher workers' compensation expense[95]. - SG&A expense for the fiscal fourth quarter of 2022 is projected to be between $129 million and $133 million, including $2 million for technology upgrades[95]. - The effective income tax rate for fiscal 2022 is expected to be between 14% and 18%[95]. Cash and Liquidity - Cash and cash equivalents stood at $43.8 million as of September 25, 2022, with no outstanding debt and total liquidity of $336.6 million[71]. - As of September 25, 2022, the company had $43.8 million in cash and cash equivalents and $292.8 million available under its $300 million Revolving Credit Facility[96]. - Net cash provided by operating activities for the thirty-nine weeks ended September 25, 2022, was $80.1 million, compared to $0.6 million for the same period in 2021[102]. - The company has an option to increase its Revolving Credit Facility from $300 million to $450 million, subject to bank approval[96]. Investments and Innovations - The company continues to invest in technological innovation, including online and mobile apps, to enhance service delivery and efficiency[98]. - The company has established investment policy directives prioritizing capital preservation, liquidity for claims, diversification, and maximizing after-tax returns[100]. - The company did not recognize any impairment loss for goodwill or indefinite-lived intangible assets for the thirty-nine weeks ended September 25, 2022[119][124]. Market and Operational Insights - The JobStack mobile app facilitated approximately 921,000 shifts dispatched during the third quarter of 2022, with a digital fill rate increase to 66% from 58% in the prior year[77]. - The company expects diminishing favorable adjustments to its workers' compensation liabilities as opportunities for significant reductions in accident rates decrease[100]. - Total collateral commitments decreased by $3.3 million during the thirty-nine weeks ended September 25, 2022, primarily due to lower collateral requirements from insurance carriers[100]. - The company’s insurance carriers may increase collateral requirements due to loss history and market dynamics, which could grow as the business expands[99].