Third Quarter 2024 Financial Highlights
-
Revenue of
$382 million compared to$473 million in the prior year period -
Net loss of
$8 million compared to net loss of$0 million in the prior year period-
SG&A expense reduced by 17 percent to
$100 million compared to$121 million in the prior year period -
Adjusted EBITDA1 of
$5 million compared to$10 million in the prior year period
-
SG&A expense reduced by 17 percent to
-
Zero debt, cash of
$15 million and$133 million of borrowing availability at period end -
$4 million in share repurchases with$34 million remaining under authorization
Commentary
“As expected, market conditions remained challenging but we continue to manage through the cycle with the discipline and agility needed to ensure we are even better positioned as conditions improve,” said
“We continue to leverage our deep expertise and expansive service offerings to address clients’ immediate and evolving needs and we remain committed to advancing our strategic priorities to capture market share and enhance our long-term profitability,” continued
Results
Third quarter revenue was
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 third quarter 2024 results on a webcast at
The quarterly earnings presentation and 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
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
In addition, we use several non-GAAP financial measures when presenting our financial results in this document. Please refer to the reconciliations between our
|
|
|||||||||||
|
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||
|
(Unaudited) |
|||||||||||
|
|
13 weeks ended |
|
39 weeks ended |
||||||||
|
(in thousands, except per share data) |
|
|
|
|
|
|
|
||||
|
Revenue from services |
$ |
382,357 |
|
$ |
473,196 |
|
$ |
1,181,440 |
|
$ |
1,414,072 |
|
Cost of services |
|
282,320 |
|
|
349,023 |
|
|
877,594 |
|
|
1,036,295 |
|
Gross profit |
|
100,037 |
|
|
124,173 |
|
|
303,846 |
|
|
377,777 |
|
Selling, general and administrative expense |
|
99,973 |
|
|
120,715 |
|
|
303,928 |
|
|
364,642 |
|
Depreciation and amortization |
|
6,967 |
|
|
6,184 |
|
|
22,616 |
|
|
18,875 |
|
|
|
— |
|
|
— |
|
|
59,674 |
|
|
9,485 |
|
Loss from operations |
|
(6,903) |
|
|
(2,726) |
|
|
(82,372) |
|
|
(15,225) |
|
Interest and other income (expense), net |
|
521 |
|
|
390 |
|
|
3,861 |
|
|
1,982 |
|
Loss before tax expense (benefit) |
|
(6,382) |
|
|
(2,336) |
|
|
(78,511) |
|
|
(13,243) |
|
Income tax expense (benefit) |
|
1,253 |
|
|
(2,326) |
|
|
35,532 |
|
|
(1,621) |
|
Net loss |
$ |
(7,635) |
|
$ |
(10) |
|
$ |
(114,043) |
|
$ |
(11,622) |
|
|
|
|
|
|
|
|
|
||||
|
Net loss per common share: |
|
|
|
|
|
|
|
||||
|
Basic |
$ |
(0.26) |
|
$ |
0.00 |
|
$ |
(3.75) |
|
$ |
(0.37) |
|
Diluted |
$ |
(0.26) |
|
$ |
0.00 |
|
$ |
(3.75) |
|
$ |
(0.37) |
|
|
|
|
|
|
|
|
|
||||
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||
|
Basic |
|
29,704 |
|
|
30,932 |
|
|
30,384 |
|
|
31,397 |
|
Diluted |
|
29,704 |
|
|
30,932 |
|
|
30,384 |
|
|
31,397 |
|
|
|||||
|
SUMMARY CONSOLIDATED BALANCE SHEETS |
|||||
|
(Unaudited) |
|||||
|
(in thousands) |
|
|
|
||
|
ASSETS |
|
|
|
||
|
Cash and cash equivalents |
$ |
14,505 |
|
$ |
61,885 |
|
Accounts receivable, net |
|
225,376 |
|
|
252,538 |
|
Other current assets |
|
45,419 |
|
|
40,570 |
|
Total current assets |
|
285,300 |
|
|
354,993 |
|
Property and equipment, net |
|
91,078 |
|
|
104,906 |
|
Restricted cash, cash equivalents and investments |
|
180,124 |
|
|
192,985 |
|
|
|
31,713 |
|
|
94,639 |
|
Other assets, net |
|
114,161 |
|
|
151,860 |
|
Total assets |
$ |
702,376 |
|
$ |
899,383 |
|
|
|
|
|
||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||
|
Accounts payable and other accrued expenses |
$ |
35,770 |
|
$ |
56,401 |
|
Accrued wages and benefits |
|
64,888 |
|
|
80,120 |
|
Current portion of workers’ compensation claims reserve |
|
36,971 |
|
|
44,866 |
|
Other current liabilities |
|
16,952 |
|
|
22,712 |
|
Total current liabilities |
|
154,581 |
|
|
204,099 |
|
Workers’ compensation claims reserve, less current portion |
|
129,475 |
|
|
151,649 |
|
Other long-term liabilities |
|
91,168 |
|
|
85,762 |
|
Total liabilities |
|
375,224 |
|
|
441,510 |
|
Shareholders’ equity |
|
327,152 |
|
|
457,873 |
|
Total liabilities and shareholders’ equity |
$ |
702,376 |
|
$ |
899,383 |
|
|
|||||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||
|
(Unaudited) |
|||||
|
|
39 weeks ended |
||||
|
(in thousands) |
|
|
|
||
|
Cash flows from operating activities: |
|
|
|
||
|
Net loss |
$ |
(114,043) |
|
$ |
(11,622) |
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|
|
|
||
|
Depreciation and amortization |
|
22,616 |
|
|
18,875 |
|
|
|
59,674 |
|
|
9,485 |
|
Provision for credit losses |
|
1,577 |
|
|
3,254 |
|
Stock-based compensation |
|
5,676 |
|
|
10,219 |
|
Deferred income taxes |
|
34,694 |
|
|
(3,344) |
|
Non-cash lease expense |
|
9,145 |
|
|
9,449 |
|
Other operating activities |
|
(5,052) |
|
|
(1,661) |
|
Changes in operating assets and liabilities: |
|
|
|
||
|
Accounts receivable |
|
25,802 |
|
|
34,790 |
|
Income taxes receivable and payable |
|
219 |
|
|
(3,001) |
|
Other assets |
|
8,719 |
|
|
26,795 |
|
Accounts payable and other accrued expenses |
|
(18,771) |
|
|
(26,879) |
|
Accrued wages and benefits |
|
(15,640) |
|
|
(5,156) |
|
Workers’ compensation claims reserve |
|
(30,069) |
|
|
(33,558) |
|
Operating lease liabilities |
|
(9,236) |
|
|
(9,498) |
|
Other liabilities |
|
1,500 |
|
|
1,421 |
|
Net cash (used in) provided by operating activities |
|
(23,189) |
|
|
19,569 |
|
Cash flows from investing activities: |
|
|
|
||
|
Capital expenditures |
|
(18,874) |
|
|
(23,095) |
|
Proceeds from business divestiture, net |
|
2,928 |
|
|
— |
|
Payments for company-owned life insurance |
|
(4,000) |
|
|
(2,347) |
|
Proceeds from company-owned life insurance |
|
— |
|
|
1,662 |
|
Purchases of restricted held-to-maturity investments |
|
(10,180) |
|
|
(26,894) |
|
Maturities of restricted held-to-maturity investments |
|
28,688 |
|
|
24,118 |
|
Net cash used in investing activities |
|
(1,438) |
|
|
(26,556) |
|
Cash flows from financing activities: |
|
|
|
||
|
Purchases and retirement of common stock |
|
(21,301) |
|
|
(34,178) |
|
Net proceeds from employee stock purchase plans |
|
564 |
|
|
704 |
|
Common stock repurchases for taxes upon vesting of restricted stock |
|
(2,221) |
|
|
(3,759) |
|
Other |
|
(1,807) |
|
|
(96) |
|
Net cash used in financing activities |
|
(24,765) |
|
|
(37,329) |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents |
|
(638) |
|
|
(757) |
|
Net change in cash, cash equivalents, and restricted cash and cash equivalents |
|
(50,030) |
|
|
(45,073) |
|
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 |
$ |
49,276 |
|
$ |
90,558 |
|
|
|||||
|
SEGMENT DATA |
|||||
|
(Unaudited) |
|||||
|
|
13 weeks ended |
||||
|
(in thousands) |
|
|
|
||
|
Revenue from services: |
|
|
|
||
|
|
$ |
214,792 |
|
$ |
283,187 |
|
PeopleScout |
|
36,713 |
|
|
52,944 |
|
PeopleManagement |
|
130,852 |
|
|
137,065 |
|
Total company |
$ |
382,357 |
|
$ |
473,196 |
|
|
|
|
|
||
|
Segment profit (1): |
|
|
|
||
|
|
$ |
3,043 |
|
$ |
9,656 |
|
PeopleScout |
|
2,542 |
|
|
6,272 |
|
PeopleManagement |
|
3,278 |
|
|
2,134 |
|
Total segment profit |
|
8,863 |
|
|
18,062 |
|
Corporate unallocated expense |
|
(4,184) |
|
|
(8,122) |
|
Total company Adjusted EBITDA (2) |
|
4,679 |
|
|
9,940 |
|
Third-party processing fees for hiring tax credits (3) |
|
30 |
|
|
(90) |
|
Amortization of software as a service assets (4) |
|
(1,615) |
|
|
(1,064) |
|
|
|
(65) |
|
|
(696) |
|
COVID-19 government subsidies, net |
|
— |
|
|
(525) |
|
Executive leadership transition costs |
|
— |
|
|
(2,492) |
|
Other adjustments, net (6) |
|
(2,965) |
|
|
(1,615) |
|
EBITDA (2) |
|
64 |
|
|
3,458 |
|
Depreciation and amortization |
|
(6,967) |
|
|
(6,184) |
|
Interest and other income (expense), net |
|
521 |
|
|
390 |
|
Loss before tax (expense) benefit |
|
(6,382) |
|
|
(2,336) |
|
Income tax (expense) benefit |
|
(1,253) |
|
|
2,326 |
|
Net loss |
$ |
(7,635) |
|
$ |
(10) |
(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
(6) Other adjustments for the 13 weeks ended
NON-GAAP FINANCIAL MEASURES AND NON-GAAP RECONCILIATIONS
In addition to financial measures presented in accordance with
|
Non-GAAP measure |
|
Definition |
|
Purpose of adjusted measures |
||
|
Adjusted net income
|
|
Net loss and net loss per diluted share, excluding: – gain on divestiture, – amortization of intangibles,
– – COVID-19 government subsidies, net, – Executive leadership transition costs, – 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
|
|
EBITDA excludes from net loss: – income tax expense (benefit), – 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,
– – COVID-19 government subsidies, net, – Executive leadership transition costs, 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,
– – COVID-19 government subsidies, net, – Executive leadership transition costs, 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
(Unaudited)
|
|
13 weeks ended |
||||
|
(in thousands, except for per share data) |
|
|
|
||
|
Net loss |
$ |
(7,635) |
|
$ |
(10) |
|
Gain on divestiture |
|
29 |
|
|
— |
|
Amortization of intangible assets |
|
672 |
|
|
1,276 |
|
|
|
65 |
|
|
696 |
|
COVID-19 government subsidies, net |
|
— |
|
|
525 |
|
Executive leadership transition costs |
|
— |
|
|
2,492 |
|
Other adjustments, net (2) |
|
2,965 |
|
|
1,615 |
|
Tax effect of adjustments and deferred tax asset valuation allowance (3) |
|
573 |
|
|
(1,717) |
|
Adjusted net income (loss) |
$ |
(3,331) |
|
$ |
4,877 |
|
|
|
|
|
||
|
Adjusted net income (loss) per diluted share |
$ |
(0.11) |
|
$ |
0.16 |
|
|
|
|
|
||
|
Diluted weighted average shares outstanding |
|
29,704 |
|
|
31,239 |
|
|
|
|
|
||
|
Margin / % of revenue: |
|
|
|
||
|
Net loss |
|
(2.0) % |
|
|
— % |
|
Adjusted net income (loss) |
|
(0.9) % |
|
|
1.0 % |
2. RECONCILIATION OF
(Unaudited)
|
|
13 weeks ended |
||||
|
(in thousands) |
|
|
|
||
|
Net loss |
$ |
(7,635) |
|
$ |
(10) |
|
Income tax expense (benefit) |
|
1,253 |
|
|
(2,326) |
|
Interest and other (income) expense, net |
|
(521) |
|
|
(390) |
|
Depreciation and amortization |
|
6,967 |
|
|
6,184 |
|
EBITDA |
|
64 |
|
|
3,458 |
|
Third-party processing fees for hiring tax credits (4) |
|
(30) |
|
|
90 |
|
Amortization of software as a service assets (5) |
|
1,615 |
|
|
1,064 |
|
|
|
65 |
|
|
696 |
|
COVID-19 government subsidies, net |
|
— |
|
|
525 |
|
Executive leadership transition costs |
|
— |
|
|
2,492 |
|
Other adjustments, net (2) |
|
2,965 |
|
|
1,615 |
|
Adjusted EBITDA |
$ |
4,679 |
|
$ |
9,940 |
|
|
|
|
|
||
|
Margin / % of revenue: |
|
|
|
||
|
Net loss |
|
(2.0) % |
|
|
— % |
|
Adjusted EBITDA |
|
1.2 % |
|
|
2.1 % |
3. RECONCILIATION OF
(Unaudited)
|
|
13 weeks ended |
||||
|
(in thousands) |
|
|
|
||
|
Selling, general and administrative expense |
$ |
99,973 |
|
$ |
120,715 |
|
Third-party processing fees for hiring tax credits (4) |
|
30 |
|
|
(90) |
|
Amortization of software as a service assets (5) |
|
(1,615) |
|
|
(1,064) |
|
|
|
(65) |
|
|
(696) |
|
COVID-19 government subsidies, net |
|
— |
|
|
(525) |
|
Executive leadership transition costs |
|
— |
|
|
(2,492) |
|
Other adjustments, net (2) |
|
(2,757) |
|
|
(795) |
|
Adjusted SG&A expense |
$ |
95,566 |
|
$ |
115,053 |
|
|
|
|
|
||
|
% of revenue: |
|
|
|
||
|
Selling, general and administrative expense |
|
26.1 % |
|
|
25.5 % |
|
Adjusted SG&A expense |
|
25.0 % |
|
|
24.3 % |
(1) Costs associated with upgrading legacy
(2) Other adjustments for the 13 weeks ended
(3) The tax effect includes the application of our statutory rate of 26% to all taxable / deductible adjustments. For the thirteen weeks ended
(4) These third-party processing fees are associated with generating hiring tax credits.
(5) Amortization of software as a service assets is reported in selling, general and administrative expense.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241104295746/en/
Investor Relations
InvestorRelations@trueblue.com
Source: TrueBlue
