TrueBlue, Inc. (NYSE:TBI) announced today its fiscal third
quarter results for the period ending Sept. 23, 2016.
Revenue for the fiscal third quarter of 2016 was $697 million,
an increase of two percent, compared to $684 million for the fiscal
third quarter of 2015. Net income was $23 million or $0.56 per
diluted share, compared to $20 million or $0.48 per diluted share
for the fiscal third quarter of 2015. Adjusted net income* was
$30 million or $0.70 per diluted share, compared to $26 million or
$0.60 per diluted share for the fiscal third quarter of 2015.
"Our team delivered growth in revenue and net income this
quarter while sustaining a high level of service quality with our
customers," TrueBlue CEO Steve Cooper said. "Given the challenging
growth environment, we have maintained a sharp focus on the
management of our expenses."
Cooper continued, "Our cost management actions have been
decisive and balanced as we remain committed to our long-term
technology and growth strategies. We are taking the right steps to
preserve our profitability while maintaining our readiness to
accelerate growth."
The company also shared its outlook for the fiscal fourth
quarter of 2016 on a comparable 13-week basis. The company
estimates revenue in the range of $670 million to $686 million and
net income per diluted share of $0.40 to $0.45 ($0.54 to $0.59 on
an adjusted basis*). The company's fiscal fourth quarter of 2016
will include a 14th week and the company plans to change its
week-ending date from Friday to the following Sunday to better
align its week-ending date with that of its customers. This will
result in our year-end being the Sunday closest to Dec. 31st every
year, with our 2016 fiscal year-end occurring on Jan. 1st, 2017.
Further discussion on the financial impact of the additional week
and week-ending date can be found in the financial schedules
following this release and on the company's website at
www.trueblue.com.
Management will discuss fiscal third quarter 2016 results on a
conference call at 2 p.m. PT (5 p.m. ET), today, Wednesday,
Oct. 19. The conference call can be accessed on TrueBlue’s web
site: www.trueblue.com
*See the financial statements accompanying the release and the
company’s website for more information on non-GAAP definitions.
About TrueBlue:
TrueBlue (NYSE:TBI) is a leading provider of specialized
workforce solutions including staffing, large-volume on-site
workforce management, and recruitment process outsourcing to fill
full-time positions. Based in Tacoma, Wash., TrueBlue serves
clients globally and connects as many as 840,000 people to work
each year in a wide variety of industries. Learn more
at www.trueblue.com.
Forward-looking Statements
This document contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
Words such as “may,” “will,” “should,” “expects,” “intends,”
“projects,” “plans,” “believes,” “estimates,” “targets,”
“anticipates,” and similar expressions are used to identify these
forward-looking statements. Examples of forward-looking statements
include statements relating to our future financial condition and
operating results, as well as any other statement that does not
directly relate to any historical or current fact. Forward-looking
statements are based on our current expectations and assumptions,
which may not prove to be accurate. These statements are not
guarantees and are subject to risks, uncertainties, and changes in
circumstances that are difficult to predict. Many factors could
cause actual results to differ materially and adversely from these
forward-looking statements. Examples of such factors can be
found in our reports filed with the SEC, including the information
under the heading ‘Risk Factors’ in our Annual Report on Form 10-K
for the fiscal year ended Dec. 25, 2015. Any forward-looking
statement speaks only as of the date on which it is made, and 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.
TRUEBLUE, INC. SUMMARY CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per
share data)
13 Weeks Ended 39 Weeks Ended
September 23, September 25, September
23, September 25, 2016 2015
2016 2015 Revenue from services
$
697,097 $ 683,918
$ 2,015,689 $ 1,884,947 Cost
of services
518,702 515,051
1,516,858
1,434,278 Gross profit
178,395 168,867
498,831 450,669 Selling, general and administrative expenses
134,679 125,117
401,090 354,569 Depreciation and
amortization
11,690 10,498
34,673 31,415 Goodwill and
intangible asset impairment charge (1)
4,275 —
103,544 — Income (loss) from operations
27,751 33,252
(40,476 ) 64,685 Interest and
other expense, net
(867 ) (366 )
(2,773
) (1,102 ) Income (loss) before tax expense
26,884
32,886
(43,249 ) 63,583 Income tax expense (benefit)
3,455 12,796
(9,911 ) 20,504
Net income (loss)
$ 23,429 $ 20,090
$ (33,338 ) $ 43,079 Net
income (loss) per common share: Basic
$ 0.56 $ 0.49
$ (0.80 ) $ 1.05 Diluted
$ 0.56
$ 0.48
$ (0.80 ) $ 1.04 Weighted
average shares outstanding: Basic
41,762 41,296
41,651 41,189 Diluted
42,056 41,620
41,651
41,546 (1) The goodwill and intangible asset
impairment charge for the thirteen weeks ended September 23, 2016,
relates to the CLP and Spartan reporting unit trade
names/trademarks of $4.3 million that were written-off due to the
re-branding to PeopleReady. The goodwill and intangible asset
impairment charge for the thirty-nine weeks ended September 23,
2016, further includes $99.3 million of impairment charges recorded
in the second quarter of 2016 relating to our Staff Management |
SMX, hrX, and PlaneTechs reporting units.
TRUEBLUE, INC. SUMMARY CONSOLIDATED BALANCE
SHEETS
(Unaudited, in thousands)
September 23, December 25, 2016
2015 Assets Cash and cash equivalents
$ 24,781
$ 29,781 Accounts receivable, net
364,618 461,476 Other
current assets
46,437 51,708 Total current assets
435,836 542,965 Property and equipment, net
59,898
57,530 Restricted cash and investments
212,968 188,412
Goodwill and intangible assets, net
357,733 422,354 Other
assets, net
57,673 48,181 Total assets
$ 1,124,108 $ 1,259,442 Liabilities and
shareholders' equity Current liabilities
$ 243,427 $
227,976 Long-term debt, less current portion
137,111 243,397
Other long-term liabilities
231,095 252,496 Total
liabilities
611,633 723,869 Shareholders' equity
512,475 535,573 Total liabilities and shareholders'
equity
$ 1,124,108 $ 1,259,442
TRUEBLUE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
39 Weeks Ended
September 23, September 25, 2016
2015 Cash flows from operating activities: Net income (loss)
$ (33,338 ) $ 43,079 Adjustments to reconcile
net income (loss) to net cash from operating activities:
Depreciation and amortization
34,673 31,415 Goodwill and intangible asset impairment
charges
103,544 — Provision for doubtful accounts
6,361 4,483 Stock-based compensation
7,443 8,283
Deferred income taxes
(23,874 ) (6,029 ) Other
operating activities
5,603 20 Changes in operating assets
and liabilities: Accounts receivable
102,722 (6,597 ) Income
tax receivable
4,018 9,673 Other assets
(3,563
) (3,685 ) Accounts payable and other accrued expenses
(3,764 ) 17,453 Accrued wages and benefits
(3,254 ) 10,315 Workers’ compensation claims reserve
11,938 10,024 Other liabilities
4,740 1,883
Net cash provided by operating activities
213,249
120,317 Cash flows from investing activities:
Capital expenditures
(17,766 ) (12,590 ) Acquisition
of business
(71,863 ) — Sales and maturities of
marketable securities
— 1,500 Change in restricted cash and
cash equivalents
732 13,070 Purchases of restricted
investments
(35,940 ) (38,818 ) Maturities of
restricted investments
12,273 11,047 Net cash
used in investing activities
(112,564 ) (25,791 )
Cash flows from financing activities: Net proceeds from
stock option exercises and employee stock purchase plans
1,183 1,164 Common stock repurchases for taxes upon vesting
of restricted stock
(2,692 ) (3,725 ) Net change in
revolving credit facility
(104,586 ) (85,994 )
Payments on debt
(1,700 ) (1,700 ) Other
20
1,134 Net cash used in financing activities
(107,775 ) (89,121 ) Effect of exchange rate changes
on cash and cash equivalents
2,090 (1,839 ) Net
change in cash and cash equivalents
(5,000 ) 3,566
CASH AND CASH EQUIVALENTS, beginning of period
29,781
19,666 CASH AND CASH EQUIVALENTS, end of period
$
24,781 $ 23,232
TRUEBLUE, INC. SEGMENT DATA
(Unaudited, in thousands)
13 Weeks Ended 39 Weeks Ended
September 23,2016
September 25,2015
September 23,2016
September 25,2015
Revenue from services Staffing Services
$ 652,617 $
656,619
$ 1,880,730 $ 1,807,434 Managed Services
44,480 27,299
134,959 77,513
Total Company
697,097 683,918
2,015,689 1,884,947
Adjusted EBITDA (1)
Staffing Services
$ 47,181 $ 50,437
$
101,861
$ 114,295 Managed Services
9,260 3,175
30,324 10,979
56,441 53,612
132,185 125,274 Corporate unallocated
(7,129 )
(9,715 )
(24,641 ) (24,445 ) Total company Adjusted
EBITDA
49,312 43,897
107,544 100,829 Acquisition and
integration costs (2)
(1,410 ) —
(4,789
) (3,787 )
Goodwill and intangible asset impairment
charge (3)
(4,275 ) —
(103,544 ) —
Work Opportunity Tax Credit processing
fees (4)
(754 ) (147 )
(1,582 ) (942 ) Other
charges (5)
(3,432 ) —
(3,432 )
— EBITDA (1)
39,441 43,750
(5,803 )
96,100 Depreciation and amortization
11,690 10,498
34,673 31,415 Interest and other expense, net
867
366
2,773
1,102 Income (loss) before tax expense
26,884
32,886
(43,249 )
63,583 Income tax expense (benefit)
3,455 12,796
(9,911 ) 20,504 Net income (loss)
$ 23,429 $ 20,090
$
(33,338 ) $ 43,079 (1) EBITDA
and Adjusted EBITDA are non-GAAP financial measures. EBITDA
excludes interest, taxes, depreciation and amortization. Adjusted
EBITDA further excludes from EBITDA, costs related to acquisition
and integration, goodwill and intangible asset impairment charges,
other charges, and Work Opportunity Tax Credit third-party
processing fees. EBITDA and Adjusted EBITDA are key measures used
by management to assess performance and, in our opinion, enhance
comparability and provide investors with useful insight into the
underlying trends of the business. EBITDA and Adjusted EBITDA
should not be considered measures of financial performance in
isolation or as an alternative to Income from operations in the
Consolidated Statements of Operations in accordance with U.S. GAAP,
and may not be comparable to similarly titled measures of other
companies. (2)
Acquistion and integration costs relate to
the acquisition of the recruitment process outsourcing business of
Aon Hewitt, which was completed on January 4, 2016.
(3) The goodwill and intangible asset impairment charge for
the thirteen weeks ended September 23, 2016, relates to the CLP and
Spartan reporting unit trade names/trademarks of $4.3 million that
were written-off due to the re-branding to PeopleReady. The
goodwill and intangible asset impairment charge for the thirty-nine
weeks ended September 23, 2016, further includes $99.3 million of
impairment charges recorded in the second quarter of 2016 relating
to our Staff Management | SMX, hrX, and PlaneTechs reporting units.
(4) These third-party processing fees are associated with
generating the Work Opportunity Tax Credits, which are designed to
encourage employers to hire workers from certain targeted groups
with higher than average unemployment rates and reduce our income
taxes. (5) These charges primarily consist of branch signage
write-offs of $1.6 million due to our re-branding to PeopleReady as
well as costs of $1.8 million associated with our exit from the
Amazon delivery business.
TRUEBLUE, INC.
RECONCILIATION OF U.S. GAAP NET INCOME TO ADJUSTED NET INCOME
AND
RECONCILIATION OF U.S. GAAP NET INCOME
PER DILUTED SHARE TO ADJUSTED NET INCOME PER
DILUTED SHARE
13 Weeks Ended September 23, 2016
September 25, 2015 (Unaudited, in thousands, except
for per share data)
Amount
PerDilutedShare
Amount
PerDilutedShare
Net income
$ 23,429 $ 0.56 $ 20,090 $
0.48 Acquisition and integration costs (1)
1,410 0.03
— — Goodwill and intangible asset impairment charge (2)
4,275 0.10 — — Other charges (3)
3,432
0.08 — — Work Opportunity Tax Credit processing fees (4)
754 0.02 147 — Amortization of intangible assets of
acquired businesses (5)
6,831 0.16 4,593 0.11 Tax
effective of adjustments to net income (6)
(5,345 )
(0.13 ) (1,517 ) (0.04 ) Adjust income taxes to
normalized effective rate (7)
(5,148 ) (0.12
) 2,272 0.05 Adjusted net income (8)
$
29,638 $ 0.70 $ 25,585 $
0.60 Diluted weighted average shares outstanding
42,056 41,620
Outlook * 13 Weeks
Ended December 25, 2016 (Unaudited, in thousands, except
for per share data)
Amount
Per DilutedShare
Net income
$
17,000 — $19,000
$
0.40 — $0.45
Acquisition and integration costs (1)
1,800 0.04 Work
Opportunity Tax Credit processing fees (4)
300 0.01
Amortization of intangible assets of acquired businesses (5)
6,200
0.15
Tax effective of adjustments to net income (6)
(2,700)
(0.06)
Adjusted net income (8)
$
22,600 — $24,700
$
0.54 — $0.59
Diluted weighted average shares
outstanding
42,100
RECONCILIATION OF U.S. GAAP NET INCOME
TO EBITDA AND ADJUSTED EBITDA
13 Weeks Ended (Unaudited, in thousands)
September
23, 2016 September 25, 2015 Net income
$
23,429 $ 20,090 Income tax expense
3,455 12,796
Interest expense, net
867 366 Depreciation and amortization
11,690 10,498 EBITDA (9)
39,441 43,750 Acquisition
and integration costs (1)
1,410 — Goodwill and intangible
asset impairment charge (2)
4,275 — Other charges (3)
3,432 — Work Opportunity Tax Credit processing fees (4)
754 147 Adjusted EBITDA (9)
$ 49,312 $ 43,897
Outlook *
13 Weeks Ended (Unaudited, in thousands)
December 25,
2016 Net income
$
17,000 — $19,000
Income tax expense
8,000 — 9,000
Interest expense, net
900 Depreciation and amortization
10,000
EBITDA (9)
35,900 — 38,900
Acquisition and integration costs (1)
1,800
Work Opportunity Tax Credit processing
fees (4)
300
Adjusted EBITDA (9)
$
38,000 — $41,000
* Neutral impact on profit due to low seasonal volume for the 14th
week ending January 1, 2017. Figures may not sum due to rounding.
(1)
Acquisition and integration costs relate
to the acquisition of the recruitment process outsourcing business
of Aon Hewitt, which was completed on January 4, 2016.
(2)
The intangible asset impairment charge for
the thirteen weeks ended September 23, 2016, relates to the CLP and
Spartan reporting unit trade names/trademarks which were
written-off due to the re-branding to PeopleReady.
(3) These charges primarily consist of branch signage
write-offs of $1.6 million due to our re-branding to PeopleReady as
well as costs of $1.8 million associated with our exit from the
Amazon delivery business. (4) These third-party processing
fees are associated with generating the Work Opportunity Tax
Credits, which are designed to encourage employers to hire workers
from certain targeted groups with higher than average unemployment
rates and reduce our income taxes. (5) Amortization of
intangible assets of acquired businesses as well as accretion
expense related to acquisition earn-out. (6) Total tax
effect of each of the adjustments to U.S. GAAP net income per
diluted share using the ongoing rate of 32%. (7) Adjusts the
effective income tax rate to the expected, ongoing rate of 32%.
(8) Adjusted net income and adjusted net income per diluted
share are non-GAAP financial measures which exclude from net income
and net income on a per diluted share basis costs related to
acquisition and integration, goodwill and intangible asset
impairment charges, other charges, Work Opportunity Tax Credit
third-party processing fees, amortization of intangibles of
acquired businesses as well as accretion expense related to
acquisition earn-out, tax effect of each adjustment to U.S. GAAP
net income, and adjusts income taxes to the expected ongoing
effective tax rate. Adjusted net income and adjusted net income per
diluted share are key measures used by management to assess
performance and, in our opinion, enhance comparability and provide
investors with useful insight into the underlying trends of the
business. Adjusted net income and adjusted net income per diluted
share should not be considered measures of financial performance in
isolation or as an alternative to net income or net income per
diluted share in the Consolidated Statements of Operations in
accordance with U.S. GAAP, and may not be comparable to similarly
titled measures of other companies. (9) EBITDA and Adjusted
EBITDA are non-GAAP financial measures. EBITDA excludes interest,
taxes, depreciation and amortization. Adjusted EBITDA further
excludes from EBITDA, costs related to acquisition and integration,
goodwill and intangible asset impairment charges, other charges,
and Work Opportunity Tax Credit third-party processing fees. EBITDA
and Adjusted EBITDA are key measures used by management to assess
performance and, in our opinion, enhance comparability and provide
investors with useful insight into the underlying trends of the
business. EBITDA and Adjusted EBITDA should not be considered
measures of financial performance in isolation or as an alternative
to Income from operations in the Consolidated Statements of
Operations in accordance with U.S. GAAP, and may not be comparable
to similarly titled measures of other companies.
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version on businesswire.com: http://www.businesswire.com/news/home/20161019005451/en/
TrueBlue, Inc.Derrek Gafford, 253-680-8214EVP & CFO
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