TrueBlue (NYSE:TBI, Financial) today announced its third quarter results for 2023.
Third quarter revenue was $473 million, a decrease of 18 percent compared to revenue of $576 million in the third quarter of 2022. Net loss per diluted share was $0.00 compared to net income per diluted share of $0.63 in the third quarter of 2022. Third quarter adjusted net income1 per diluted share was $0.16 compared to adjusted net income per diluted share of $0.74 in the third quarter of 2022.
“While the operating environment remains soft, we are starting to see signs of potential stabilization in the demand trends for certain parts of our business,” said Taryn Owen, President and CEO of TrueBlue. “We are focused on staying highly engaged with our clients to meet their current needs and to be ready to meet higher demand when business conditions improve.
“We also continue to be disciplined in the pricing of our services and with cost management, while preserving our operational and balance sheet strengths,” continued Ms. Owen. “These actions position us well to achieve strong operating leverage and financial flexibility when demand rebounds.”
2023 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 2023 results on a webcast at 2:30 p.m. PT (5:30 p.m. ET), today, Monday, Oct. 23, 2023. 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 2022, TrueBlue connected approximately 611,000 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 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 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 | 39 weeks ended | ||||||||||||
(in thousands, except per share data) | Sep 24, 2023 | Sep 25, 2022 | Sep 24, 2023 | Sep 25, 2022 | |||||||||
Revenue from services | $ | 473,196 | $ | 575,721 | $ | 1,414,072 | $ | 1,696,489 | |||||
Cost of services | 349,023 | 419,802 | 1,036,295 | 1,242,194 | |||||||||
Gross profit | 124,173 | 155,919 | 377,777 | 454,295 | |||||||||
Selling, general and administrative expense | 120,715 | 124,351 | 364,642 | 366,953 | |||||||||
Depreciation and amortization | 6,184 | 7,483 | 18,875 | 22,015 | |||||||||
Goodwill and intangible asset impairment charge | — | — | 9,485 | — | |||||||||
Income (loss) from operations | (2,726 | ) | 24,085 | (15,225 | ) | 65,327 | |||||||
Interest and other income (expense), net | 390 | 703 | 1,982 | 1,098 | |||||||||
Income (loss) before tax expense (benefit) | (2,336 | ) | 24,788 | (13,243 | ) | 66,425 | |||||||
Income tax expense (benefit) | (2,326 | ) | 4,092 | (1,621 | ) | 11,197 | |||||||
Net income (loss) | $ | (10 | ) | $ | 20,696 | $ | (11,622 | ) | $ | 55,228 | |||
Net (loss) income per common share: | |||||||||||||
Basic | $ | 0.00 | $ | 0.64 | $ | (0.37 | ) | $ | 1.67 | ||||
Diluted | $ | 0.00 | $ | 0.63 | $ | (0.37 | ) | $ | 1.65 | ||||
Weighted average shares outstanding: | |||||||||||||
Basic | 30,932 | 32,434 | 31,397 | 33,023 | |||||||||
Diluted | 30,932 | 32,818 | 31,397 | 33,511 | |||||||||
TRUEBLUE, INC. SUMMARY CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||
(in thousands) | Sep 24, 2023 | Dec 25, 2022 | |||
ASSETS | |||||
Cash and cash equivalents | $ | 47,113 | $ | 72,054 | |
Accounts receivable, net | 276,233 | 314,275 | |||
Other current assets | 36,260 | 43,883 | |||
Total current assets | 359,606 | 430,212 | |||
Property and equipment, net | 102,809 | 95,823 | |||
Restricted cash and investments | 198,829 | 213,734 | |||
Goodwill and intangible assets, net | 96,576 | 109,989 | |||
Other assets, net | 157,211 | 169,650 | |||
Total assets | $ | 915,031 | $ | 1,019,408 | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
Accounts payable and other accrued expenses | $ | 48,879 | $ | 76,644 | |
Accrued wages and benefits | 87,080 | 92,237 | |||
Current portion of workers’ compensation claims reserve | 44,091 | 50,005 | |||
Other current liabilities | 20,524 | 23,989 | |||
Total current liabilities | 200,574 | 242,875 | |||
Workers’ compensation claims reserve, less current portion | 173,361 | 201,005 | |||
Other long-term liabilities | 84,470 | 79,213 | |||
Total liabilities | 458,405 | 523,093 | |||
Shareholders’ equity | 456,626 | 496,315 | |||
Total liabilities and shareholders’ equity | $ | 915,031 | $ | 1,019,408 | |
TRUEBLUE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||
39 weeks ended | |||||||
(in thousands) | Sep 24, 2023 | Sep 25, 2022 | |||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (11,622 | ) | $ | 55,228 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation and amortization | 18,875 | 22,015 | |||||
Goodwill and intangible asset impairment charge | 9,485 | — | |||||
Provision for credit losses | 3,254 | 3,352 | |||||
Stock-based compensation | 10,219 | 7,675 | |||||
Deferred income taxes | (3,344 | ) | 2,046 | ||||
Non-cash lease expense | 9,449 | 9,694 | |||||
Other operating activities | (1,661 | ) | 8,772 | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 34,790 | 21,388 | |||||
Income taxes receivable and payable | (3,001 | ) | 186 | ||||
Other assets | 26,795 | (564 | ) | ||||
Accounts payable and other accrued expenses | (26,879 | ) | (22,935 | ) | |||
Accrued wages and benefits | (5,156 | ) | (10,277 | ) | |||
Workers’ compensation claims reserve | (33,558 | ) | (4,304 | ) | |||
Operating lease liabilities | (9,498 | ) | (9,673 | ) | |||
Other liabilities | 1,421 | (2,529 | ) | ||||
Net cash provided by operating activities | 19,569 | 80,074 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (23,095 | ) | (22,685 | ) | |||
Payments for company-owned life insurance | (2,347 | ) | — | ||||
Proceeds from company-owned life insurance | 1,662 | — | |||||
Purchases of restricted held-to-maturity investments | (26,894 | ) | (4,950 | ) | |||
Maturities of restricted held-to-maturity investments | 24,118 | 23,697 | |||||
Net cash used in investing activities | (26,556 | ) | (3,938 | ) | |||
Cash flows from financing activities: | |||||||
Purchases and retirement of common stock | (34,178 | ) | (60,939 | ) | |||
Net proceeds from employee stock purchase plans | 704 | 780 | |||||
