TrueBlue (NYSE:TBI) today announced its second quarter results
for 2024.
Second Quarter 2024 Financial Highlights
- Revenue of $396 million compared to $476 million in the prior
year period
- Net loss of $105 million compared to net loss of $7 million in
the prior year period
- Includes non-cash goodwill and intangible asset impairment
charge of $45 million after tax and a related valuation allowance
charge of $55 million on deferred tax assets
- SG&A expense reduced by 20 percent to $97 million compared
to $121 million in the prior year period
- Adjusted EBITDA1 of $1 million and adjusted net loss of $11
million
- Zero debt, cash of $26 million and $132 million of borrowing
availability
- $7 million in share repurchases with $38 million remaining
under authorization
Commentary
“We are managing through the current market cycle with
discipline and agility as economic uncertainty and client caution
continue to weigh on the temporary staffing industry,” said Taryn
Owen, President and CEO of TrueBlue. “Our teams are staying highly
engaged with clients to address their immediate and evolving needs.
While current market dynamics are challenging, evolving workforce
needs and structural staffing shortages will create compelling
opportunities for our business that align with our competitive
strengths.”
“We have made significant progress advancing our strategic
priorities which will enable us to capture market share, deliver
more sustainable growth and enhance our long-term profitability,”
continued Ms. Owen. “Our commitment to digital transformation with
the continued rollout of our new, proprietary JobStack app, along
with expansion in attractive end markets such as skilled trades and
healthcare will fuel our growth as demand rebounds. Additionally,
simplifying our organizational structure and taking decisive cost
actions not only aligns TrueBlue with the current environment, but
ensures we are even better positioned to capitalize on growth
opportunities and expand our profitability as conditions
improve.”
Results
Second quarter revenue was $396 million, a decrease of 17
percent compared to revenue of $476 million in the second quarter
of 2023. Net loss per diluted share was $3.45 compared to net loss
per diluted share of $0.24 in the prior year period. Adjusted net
loss1 per diluted share was $0.35 compared to adjusted net income
per diluted share of $0.11 in the prior year period.
2024 Outlook
TrueBlue is providing certain forward-looking information to
help investors form their own estimates, which can be found in the
quarterly earnings presentation filed today.
Management will discuss second quarter 2024 results on a webcast
at 2:00 p.m. PT (5:00 p.m. ET), today, Monday, Aug. 5, 2024.
The webcast can be accessed on the Investor Relations section of
the TrueBlue website: investor.trueblue.com.
About TrueBlue
TrueBlue (NYSE: TBI) is a leading provider of specialized
workforce solutions that help clients achieve business growth and
improve productivity. In 2023, TrueBlue served approximately 67,000
clients and connected approximately 464,000 people with work. Its
PeopleReady segment offers on-demand, industrial staffing,
PeopleScout offers recruitment process outsourcing (RPO) and
managed service provider (MSP) solutions, and PeopleManagement
offers contingent, on-site industrial staffing and commercial
driver services. Learn more at www.trueblue.com.
1 Refer to the financial statements accompanying this release
for more information regarding non-GAAP terms.
Forward-looking statements and non-GAAP financial
measures
This document contains forward-looking statements relating to
our plans and expectations including, without limitation,
statements regarding the future performance and operations of our
business, expectations regarding stabilization in demand, and
expected growth from our digital investments, all of which are
subject to risks and uncertainties. Such statements are based on
management’s expectations and assumptions as of the date of this
release and involve many risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
in our forward-looking statements including: (1) national and
global economic conditions, which can be negatively impacted by
factors such as rising interest rates, inflation, political
instability, epidemics and global trade uncertainty, (2) our
ability to maintain profit margins, (3) our ability to successfully
execute on business strategies and further digitalize our business
model, (4) our ability to attract sufficient qualified candidates
and employees to meet the needs of our clients, (5) our ability to
attract and retain clients, (6) our ability to access sufficient
capital to finance our operations, including our ability to comply
with covenants contained in our revolving credit facility, (7) new
laws, regulations, and government incentives that could affect our
operations or financial results, (8) any reduction or change in tax
credits we utilize, including the Work Opportunity Tax Credit, and
(9) the timing and amount of common stock repurchases, if any,
which will be determined at management’s discretion and depend upon
several factors, including market and business conditions, the
trading price of our common stock and the nature of other
investment opportunities. Other information regarding factors that
could affect our results is included in our Securities and Exchange
Commission (SEC) filings, including the company’s most recent
reports on Forms 10-K and 10-Q, copies of which may be obtained by
visiting our website at www.trueblue.com under the Investor
Relations section or the SEC’s website at www.sec.gov. We assume no
obligation to update or revise any forward-looking statement,
whether as a result of new information, future events, or
otherwise, except as required by law. Any other references to
future financial estimates are included for informational purposes
only and subject to risk factors discussed in our most recent
filings with the SEC.
In addition, we use several non-GAAP financial measures when
presenting our financial results in this document. Please refer to
the reconciliations between our U.S. GAAP and non-GAAP financial
measures in the appendix to this document and on our website at
www.trueblue.com under the Investor Relations section for
additional information on both current and historical periods. The
presentation of these non-GAAP financial measures is used to
enhance the understanding of certain aspects of our financial
performance. It is not meant to be considered in isolation,
superior to, or as a substitute for the directly comparable
financial measures prepared in accordance with U.S. GAAP, and may
not be comparable to similarly titled measures of other
companies.
TRUEBLUE, INC.
SUMMARY CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
13 weeks ended
26 weeks ended
(in thousands, except per share
data)
Jun 30, 2024
Jun 25, 2023
Jun 30, 2024
Jun 25, 2023
Revenue from services
$
396,230
$
475,588
$
799,083
$
940,876
Cost of services
291,807
345,097
595,274
687,272
Gross profit
104,423
130,491
203,809
253,604
Selling, general and administrative
expense
97,018
121,282
203,955
243,927
Depreciation and amortization
7,691
6,280
15,649
12,691
Goodwill and intangible asset impairment
charge
59,674
9,485
59,674
9,485
Loss from operations
(59,960
)
(6,556
)
(75,469
)
(12,499
)
Interest and other income (expense),
net
1,741
578
3,340
1,592
Loss before tax expense
(58,219
)
(5,978
)
(72,129
)
(10,907
)
Income tax expense
46,491
1,345
34,279
705
Net loss
$
(104,710
)
$
(7,323
)
$
(106,408
)
$
(11,612
)
Net loss per common share:
Basic
$
(3.45
)
$
(0.24
)
$
(3.46
)
$
(0.37
)
Diluted
$
(3.45
)
$
(0.24
)
$
(3.46
)
$
(0.37
)
Weighted average shares
outstanding:
Basic
30,349
30,966
30,725
31,629
Diluted
30,349
30,966
30,725
31,629
TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(in thousands)
Jun 30, 2024
Dec 31, 2023
ASSETS
Cash and cash equivalents
$
26,400
$
61,885
Accounts receivable, net
231,064
252,538
Other current assets
43,180
40,570
Total current assets
300,644
354,993
Property and equipment, net
92,100
104,906
Restricted cash, cash equivalents and
investments
183,352
192,985
Goodwill and intangible assets, net
31,941
94,639
Other assets, net
115,656
151,860
Total assets
$
723,693
$
899,383
LIABILITIES AND SHAREHOLDERS’
EQUITY
Accounts payable and other accrued
expenses
$
36,107
$
56,401
Accrued wages and benefits
65,774
80,120
Current portion of workers’ compensation
claims reserve
38,728
44,866
Other current liabilities
17,380
22,712
Total current liabilities
157,989
204,099
Workers’ compensation claims reserve, less
current portion
139,251
151,649
Other long-term liabilities
88,689
85,762
Total liabilities
385,929
441,510
Shareholders’ equity
337,764
457,873
Total liabilities and shareholders’
equity
$
723,693
$
899,383
TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
26 weeks ended
(in thousands)
Jun 30, 2024
Jun 25, 2023
Cash flows from operating
activities:
Net loss
$
(106,408
)
$
(11,612
)
Adjustments to reconcile net loss to
net cash (used in) provided by operating activities:
Depreciation and amortization
15,649
12,691
Goodwill and intangible asset impairment
charge
59,674
9,485
Provision for credit losses
630
2,408
Stock-based compensation
4,844
5,294
Deferred income taxes
33,997
(22
)
Non-cash lease expense
6,200
6,249
Other operating activities
(3,118
)
(1,099
)
Changes in operating assets and
liabilities:
Accounts receivable
21,061
43,915
Income taxes receivable and payable
430
(3,039
)
Other assets
8,246
15,053
Accounts payable and other accrued
expenses
(18,849
)
(26,968
)
Accrued wages and benefits
(14,753
)
(9,277
)
Workers’ compensation claims reserve
(18,537
)
(19,899
)
Operating lease liabilities
(6,139
)
(6,295
)
Other liabilities
1,011
3,980
Net cash (used in) provided by
operating activities
(16,062
)
20,864
Cash flows from investing
activities:
Capital expenditures
(13,279
)
(15,738
)
Proceeds from business divestiture,
net
2,928
—
Payments for company-owned life
insurance
(4,000
)
(2,347
)
Purchases of restricted held-to-maturity
investments
(10,180
)
(9,955
)
Maturities of restricted held-to-maturity
investments
19,220
15,613
Net cash used in investing
activities
(5,311
)
(12,427
)
Cash flows from financing
activities:
Purchases and retirement of common
stock
(16,986
)
(34,200
)
Net proceeds from employee stock purchase
plans
417
509
Common stock repurchases for taxes upon
vesting of restricted stock
(2,143
)
(2,514
)
Other
(1,807
)
(91
)
Net cash used in financing
activities
(20,519
)
(36,296
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash and cash equivalents
(557
)
(20
)
Net change in cash, cash equivalents,
and restricted cash and cash equivalents
(42,449
)
(27,879
)
Cash, cash equivalents and restricted
cash and cash equivalents, beginning of period
99,306
135,631
Cash, cash equivalents and restricted
cash and cash equivalents, end of period
$
56,857
$
107,752
TRUEBLUE, INC.
SEGMENT DATA
(Unaudited)
13 weeks ended
(in thousands)
Jun 30, 2024
Jun 25, 2023
Revenue from services:
PeopleReady
$
223,409
$
275,318
PeopleScout
41,070
59,710
PeopleManagement
131,751
140,560
Total company
$
396,230
$
475,588
Segment profit (1):
PeopleReady
$
394
$
8,158
PeopleScout
3,430
8,817
PeopleManagement
3,395
2,250
Total segment profit
7,219
19,225
Corporate unallocated expense
(6,150
)
(8,215
)
Total company Adjusted EBITDA
(2)
1,069
11,010
Third-party processing fees for hiring tax
credits (3)
(90
)
(110
)
Amortization of software as a service
assets (4)
(1,452
)
(952
)
Goodwill and intangible asset impairment
charge
(59,674
)
(9,485
)
PeopleReady technology upgrade costs
(5)
(39
)
(174
)
COVID-19 government subsidies, net (6)
9,696
—
Other adjustments, net (7)
(1,779
)
(565
)
EBITDA (2)
(52,269
)
(276
)
Depreciation and amortization
(7,691
)
(6,280
)
Interest and other income (expense),
net
1,741
578
Loss before tax expense
(58,219
)
(5,978
)
Income tax expense
(46,491
)
(1,345
)
Net loss
$
(104,710
)
$
(7,323
)
(1)
We evaluate performance based on segment
revenue and segment profit. Segment profit includes revenue,
related cost of services, and ongoing operating expenses directly
attributable to the reportable segment. Segment profit excludes
depreciation and amortization expense, unallocated corporate
general and administrative expense, interest expense, other income,
income taxes, and other adjustments not considered to be
ongoing.
(2)
See the Non-GAAP Financial Measures table
on the next page for definitions of EBITDA and Adjusted EBITDA.
(3)
These third-party processing fees are
associated with generating hiring tax credits.
(4)
Amortization of software as a service
assets is reported in selling, general and administrative
expense.
(5)
Costs associated with upgrading legacy
PeopleReady technology.
(6)
COVID-19 government subsidies net of
related fees ($2.9 million in cost of services and $6.8 million in
selling, general and administrative expense).
(7)
Other adjustments for the 13 weeks ended
June 30, 2024 and June 25, 2023 primarily include workforce
reduction costs of $1.5 million ($0.2 million in cost of services
and $1.3 million in selling, general and administrative expense)
and $0.6 million ($0.2 million in cost of services and $0.4 million
in selling, general and administrative expense), respectively.
TRUEBLUE, INC. NON-GAAP FINANCIAL
MEASURES AND NON-GAAP RECONCILIATIONS
In addition to financial measures presented in accordance with
U.S. GAAP, we monitor certain non-GAAP key financial measures. The
presentation of these non-GAAP financial measures is used to
enhance the understanding of certain aspects of our financial
performance. It is not meant to be considered in isolation,
superior to, or as a substitute for the directly comparable
financial measures prepared in accordance with U.S. GAAP, and may
not be comparable to similarly titled measures of other
companies.
Non-GAAP measure
Definition
Purpose of adjusted
measures
Adjusted net income (loss) and
Adjusted net income (loss) per diluted
share
Net loss and net loss per diluted share,
excluding:
– amortization of intangibles,
– goodwill and intangible asset impairment
charge,
– PeopleReady technology upgrade
costs,
– COVID-19 government subsidies, net,
– other adjustments, net, and
– tax effect of the adjustments and
deferred tax asset valuation allowance.
– Enhances comparability on a consistent
basis and provides investors with useful insight into the
underlying trends of the business.
– Used by management to assess performance
and effectiveness of our business strategies.
– Provides a measure, among others, used
in the determination of incentive compensation for management.
EBITDA and
Adjusted EBITDA
EBITDA excludes from net loss:
– income tax expense,
– interest and other (income) expense,
net, and
– depreciation and amortization.
Adjusted EBITDA further excludes:
– third-party processing fees for hiring
tax credits,
– amortization of software as a service
assets,
– goodwill and intangible asset impairment
charge,
– PeopleReady technology upgrade
costs,
– COVID-19 government subsidies, net
and
– other adjustments, net.
– Enhances comparability on a consistent
basis and provides investors with useful insight into the
underlying trends of the business.
– Used by management to assess performance
and effectiveness of our business strategies.
– Provides a measure, among others, used
in the determination of incentive compensation for management.
Adjusted SG&A expense
Selling, general and administrative
expense excluding:
– third-party processing fees for hiring
tax credits,
– amortization of software as a service
assets,
– PeopleReady technology upgrade
costs,
– COVID-19 government subsidies, net
and
– other adjustments, net.
– Enhances comparability on a consistent
basis and provides investors with useful insight into the
underlying trends of the business.
1. RECONCILIATION OF U.S. GAAP NET LOSS TO ADJUSTED NET
INCOME (LOSS) AND ADJUSTED NET INCOME (LOSS) PER DILUTED SHARE
(Unaudited)
13 weeks ended
(in thousands, except for per share
data)
Jun 30, 2024
Jun 25, 2023
Net loss
$
(104,710
)
$
(7,323
)
Amortization of intangible assets
1,369
1,274
Goodwill and intangible asset impairment
charge
59,674
9,485
PeopleReady technology upgrade costs
(1)
39
174
COVID-19 government subsidies, net (2)
(9,696
)
—
Other adjustments, net (3)
1,779
565
Tax effect of adjustments and deferred tax
asset valuation allowance (4)
40,855
(677
)
Adjusted net income (loss)
$
(10,690
)
$
3,498
Adjusted net income (loss) per diluted
share
$
(0.35
)
$
0.11
Diluted weighted average shares
outstanding
30,349
31,185
Margin / % of revenue:
Net loss
(26.4
)%
(1.5
)%
Adjusted net income (loss)
(2.7
)%
0.7
%
2. RECONCILIATION OF U.S. GAAP NET LOSS TO EBITDA AND
ADJUSTED EBITDA (Unaudited)
13 weeks ended
(in thousands)
Jun 30, 2024
Jun 25, 2023
Net loss
$
(104,710
)
$
(7,323
)
Income tax expense
46,491
1,345
Interest and other (income) expense,
net
(1,741
)
(578
)
Depreciation and amortization
7,691
6,280
EBITDA
(52,269
)
(276
)
Third-party processing fees for hiring tax
credits (5)
90
110
Amortization of software as a service
assets (6)
1,452
952
Goodwill and intangible asset impairment
charge
59,674
9,485
PeopleReady technology upgrade costs
(1)
39
174
COVID-19 government subsidies, net (2)
(9,696
)
—
Other adjustments, net (3)
1,779
565
Adjusted EBITDA
$
1,069
$
11,010
Margin / % of revenue:
Net loss
(26.4
)%
(1.5
)%
Adjusted EBITDA
0.3
%
2.3
%
3 RECONCILIATION OF U.S. GAAP SELLING, GENERAL AND
ADMINISTRATIVE EXPENSE TO ADJUSTED SG&A EXPENSE
(Unaudited)
13 weeks ended
(in thousands)
Jun 30, 2024
Jun 25, 2023
Selling, general and administrative
expense
$
97,018
$
121,282
Third-party processing fees for hiring tax
credits (5)
(90
)
(110
)
Amortization of software as a service
assets (6)
(1,452
)
(952
)
PeopleReady technology upgrade costs
(1)
(39
)
(174
)
COVID-19 government subsidies, net (2)
6,803
—
Other adjustments, net (3)
(1,608
)
(390
)
Adjusted SG&A expense
$
100,632
$
119,656
% of revenue:
Selling, general and administrative
expense
24.5
%
25.5
%
Adjusted SG&A expense
25.4
%
25.2
%
(1)
Costs associated with upgrading legacy
PeopleReady technology.
(2)
COVID-19 government subsidies net of
related fees ($2.9 million in cost of services and $6.8 million in
selling, general and administrative expense).
(3)
Other adjustments for the 13 weeks ended
June 30, 2024 and June 25, 2023 primarily include workforce
reduction costs of $1.5 million ($0.2 million in cost of services
and $1.3 million in selling, general and administrative expense)
and $0.6 million ($0.2 million in cost of services and $0.4 million
in selling, general and administrative expense), respectively.
(4)
The tax effect includes the application of
our statutory rate of 26% to all taxable / deductible adjustments.
The tax effect for the thirteen weeks ended June 30, 2024 also
includes the $55 million valuation allowance recorded against the
U.S. federal and state deferred tax assets. Note, prior periods
were reported using the effective rate for the respective period
and have been recast to conform to the current presentation for
comparability. Please refer to the reconciliations on the financial
results page under the investor relations section of our website
for additional information on comparable historical periods.
(5)
These third-party processing fees are
associated with generating hiring tax credits.
(6)
Amortization of software as a service
assets is reported in selling, general and administrative
expense.
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