TrueBlue (NYSE:TBI) today announced its first quarter results
for 2019.
First quarter revenue was $552 million, roughly flat compared to
revenue of $554 million in the first quarter of 2018. Net income
per diluted share was $0.21, a decrease of 5 percent, compared to
$0.22 in the first quarter of 2018. Adjusted net income1 per
diluted share was $0.27, a decrease of 13 percent, compared to
$0.31 in the first quarter of 2018.
“Our revenue trend improved from the prior quarter despite
challenging weather conditions, and bottom line results exceeded
our expectation,” said Patrick Beharelle, CEO of TrueBlue.
“PeopleReady delivered its fourth consecutive quarter of revenue
growth and our focus on reducing cost of services produced our
thirteenth consecutive quarter of consolidated gross margin
expansion.
“We see a favorable market for human capital services and are
pleased with both the progress and opportunity associated with our
strategies,” Mr. Beharelle continued. “Our JobStack™ and Affinix™
technologies are leading our business into a digital future.
JobStack dispatches continue to increase and we are accelerating
our deployment of Affinix. We remain focused on organic growth,
disciplined cost management, and returning capital to
shareholders.”
2019 Outlook
TrueBlue estimates revenue for the second quarter of 2019 will
range from $606 million to $623 million. The company also estimates
net income per diluted share will range from $0.39 to $0.46 and
adjusted net income per diluted share will range from $0.55 to
$0.62.
Management will discuss first quarter 2019 results on a
webcast at 2 p.m. PDT (5 p.m. EDT), today, Monday,
Apr 29, 2019. The webcast can be accessed on TrueBlue’s
website: www.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 2018, we connected approximately 730,000
people with work. Our PeopleReady segment offers industrial
staffing services, PeopleManagement offers contingent and
productivity-based on-site industrial staffing services, and
PeopleScout offers recruitment process outsourcing (RPO) and
managed service provider (MSP) solutions to a wide variety of
industries. Learn more at www.trueblue.com.
1 See the financial statements accompanying the release and the
company’s website for more information on non-GAAP terms.
Forward-looking statements
This document contains forward-looking statements relating to
our plans and expectations, 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, (2) our ability to attract and retain clients,
(3) our ability to attract sufficient qualified candidates and
employees to meet the needs of our clients, (4) our ability to
maintain profit margins, (5) new laws and regulations that could
affect our operations or financial results, (6) our ability to
successfully complete and integrate acquisitions, (7) our ability
to successfully execute on business strategies to further digitize
our business model, and (8) any reduction or change in tax credits
we utilize, including the Work Opportunity Tax Credit. 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 reference 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 (in thousands, except per share data)
Mar 31, 2019 Apr 1, 2018 Revenue from services
$ 552,352 $ 554,388 Cost of services
403,976 411,120
Gross profit
148,376 143,268 Selling, general and administrative expense
129,661 125,763 Depreciation and amortization
9,952 10,090
Income from operations
8,763 7,415 Interest and other income (expense), net
553 2,204
Income before tax expense
9,316 9,619 Income tax expense
1,040
864
Net income $ 8,276
$ 8,755
Net income per common share: Basic
$ 0.21 $ 0.22 Diluted
$ 0.21 $ 0.22
Weighted average shares outstanding: Basic
39,366 40,443 Diluted
39,735 40,694
TRUEBLUE, INC. SUMMARY CONSOLIDATED BALANCE SHEETS
(Unaudited) (in thousands) Mar 31,
2019 Dec 30, 2018 ASSETS
Cash and cash equivalents
$ 26,328 $ 46,988 Accounts
receivable, net
327,038 355,373 Other current assets
32,620 27,466
Total current assets
385,986 429,827 Property and equipment, net
57,898
57,671 Restricted cash and investments
229,743 235,443
Goodwill and intangible assets, net
324,547 328,695
Operating lease right-of-use assets
38,717 — Other assets,
net
63,125 63,208
Total assets
$ 1,100,016 $ 1,114,844
LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities
$ 215,321 $ 225,526 Long-term debt, less current
portion
42,200 80,000 Operating lease long-term liabilities
26,723 — Other long-term liabilities
217,485
217,879
Total liabilities 501,729
523,405 Shareholders’ equity
598,287
591,439
Total liabilities and shareholders’ equity
$ 1,100,016 $ 1,114,844
TRUEBLUE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) 13 Weeks Ended (in
thousands) Mar 31, 2019 Apr 1, 2018
Cash flows from operating activities: Net income
$ 8,276 $ 8,755
Adjustments to reconcile net
income to net cash provided by operating activities:
Depreciation and amortization
9,952 10,090 Provision for
doubtful accounts
1,778 2,209 Stock-based compensation
3,606 3,409 Deferred income taxes
3,209 1,370
Non-cash lease expense
3,565
— Other operating activities
(1,841 ) (572 )
Changes in operating assets and liabilities: Accounts
receivable
26,558 42,679 Income tax receivable
(3,645
) (2,842 ) Other assets
(5,274
) (1,964 ) Accounts payable and other accrued expenses
(9,878 ) (5,232 ) Accrued wages and benefits
(10,266 ) (10,125 ) Workers’ compensation claims
reserve
(4,380 ) (4,579 ) Operating lease liabilities
(3,414
) — Other liabilities
3,268
1,637
Net cash provided by operating activities
21,514 44,835 Cash
flows from investing activities: Capital expenditures
(5,862 ) (1,911 ) Divestiture of business
—
8,500 Purchases of restricted investments
(3,070 )
(3,299 ) Maturities of restricted investments
10,337
6,417
Net cash provided by investing
activities 1,405 9,707
Cash flows from financing activities: Purchases and
retirement of common stock
(5,303 ) — Net proceeds
from employee stock purchase plans
380 395 Common stock
repurchases for taxes upon vesting of restricted stock
(1,438 ) (2,086 ) Net change in revolving credit
facility
(37,800 ) (46,301 ) Payments on debt
— (567 ) Other
(69 ) —
Net cash used in financing activities (44,230
) (48,559 ) Effect of exchange rate changes on cash, cash
equivalents and restricted cash
314
(760 )
Net change in cash, cash equivalents, and restricted
cash (20,997 ) 5,223
Cash, cash equivalents
and restricted cash, beginning of period 102,450
73,831
Cash, cash equivalents and
restricted cash, end of period $ 81,453
$ 79,054
TRUEBLUE, INC.
SEGMENT DATA (Unaudited) 13 Weeks
Ended (in thousands) Mar 31, 2019
Apr 1, 2018 Revenue from services: PeopleReady
$ 326,868 $ 316,835 PeopleManagement
158,044
183,892 PeopleScout
67,440 53,661
Total company $ 552,352 $
554,388
Segment profit (1): PeopleReady
$ 11,470 $ 9,525 PeopleManagement
2,306 5,649
PeopleScout
10,427 11,905
24,203
27,079 Corporate unallocated expense
(7,277 )
(7,664 )
Total company Adjusted EBITDA (2)
16,926
19,415 Work Opportunity Tax Credit processing fees (3)
(240
) (195 ) Acquisition/integration costs (4)
(577
) — Other adjustments (5)
2,606 (1,715
)
EBITDA (2)
18,715 17,505 Depreciation and
amortization
(9,952 ) (10,090 ) Interest and other
income (expense), net
553 2,204 Income
before tax expense
9,316 9,619 Income tax expense
(1,040 ) (864 )
Net income $
8,276 $ 8,755 (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 goodwill and intangible impairment charges,
depreciation and amortization expense, unallocated corporate
general and administrative expense, interest, other income and
expense, income taxes, and costs not considered to be ongoing costs
of the segment. (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 the Work Opportunity Tax Credits, which are
designed to encourage employers to hire workers from certain
targeted groups with higher than average unemployment rates.
(4) Acquisition/integration costs relate to the acquisition of TMP
Holdings LTD completed on June 12, 2018. (5) Other
adjustments for the periods presented include implementation costs
for cloud-based systems. For the 13 weeks ended March 31, 2019,
other adjustments also include amortization of software as a
service assets, which is reported in selling, general and
administrative expense, these costs are offset by $3.9 million of
workers’ compensation benefit related to additional insurance
coverage associated with former workers’ compensation carriers that
are in liquidation.
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 EBITDA andAdjusted EBITDA
EBITDA excludes from net income:
- interest and other income (expense),
net,
- income taxes, and
- depreciation and amortization.
Adjusted EBITDA, further excludes:
- Work Opportunity Tax Credit third-party
processing fees,
- acquisition/integration costs and
- other adjustments.
- 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 net income and Adjusted net income, per diluted
share Net income and net income per diluted share, excluding:
- gain on divestiture,
- amortization of intangibles of acquired
businesses,
- acquisition/integration costs,
- other adjustments,
- tax effect of each adjustment to U.S.
GAAP net income, and
- adjust income taxes to the expected
effective tax rate.
- 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.
Organic
revenue Revenue from services excluding acquired entity
revenue. - 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.
Free cash
flow Net cash provided by operating activities, minus cash
purchases for property and equipment. - Used by management to
assess cash flows.
1. RECONCILIATION OF U.S. GAAP NET
INCOME TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME, PER DILUTED
SHARE
(Unaudited)
Q1 2019 Q1 2018 Q2
2019 Outlook* 13 Weeks Ended 13 Weeks Ended 13
Weeks Ended (in thousands, except for per share data)
Mar 31, 2019 Apr 1, 2018 Jun 30, 2019
Net income
$ 8,276 $ 8,755 $ 15,500 — $ 18,100 Gain
on divestiture (1)
— (1,393 ) — Amortization of intangible
assets of acquired businesses (2)
5,081 5,221 5,000
Acquisition/integration costs (3)
577 — 800 Other
adjustments (4)
(2,606 ) 1,715 1,600 Tax effect of
adjustments to net income (5)
(427 ) (887 ) (1,000)
Adjustment of income taxes to normalized effective rate (6)
(264 ) (675 ) —
Adjusted net income
$ 10,637 $ 12,736 $ 21,800 — $ 24,400
Adjusted net income, per diluted share $
0.27 $ 0.31 $ 0.55 — $ 0.62
Diluted weighted
average shares outstanding 39,735 40,694 39,500
*Totals may not sum due to rounding
2. RECONCILIATION OF U.S. GAAP NET
INCOME TO EBITDA AND ADJUSTED EBITDA
(Unaudited)
Q1 2019 Q1 2018 Q2 2019
Outlook* 13 Weeks Ended 13 Weeks Ended 13
Weeks Ended (in thousands) Mar 31, 2019
Apr 1, 2018 Jun 30, 2019 Net income
$
8,276 $ 8,755 $ 15,500 — $ 18,100 Income tax expense
1,040 864 2,500 — 2,900 Interest and other (income) expense,
net
(553 ) (2,204 ) (400) Depreciation and
amortization
9,952 10,090 9,800
EBITDA 18,715 17,505 27,500 — 30,500 Work Opportunity
Tax Credit processing fees (7)
240 195 200
Acquisition/integration costs (3)
577 — 800 Other
adjustments (4)
(2,606 ) 1,715 1,600
Adjusted EBITDA $ 16,926 $
19,415 $ 30,000 — $ 33,000 * Totals may not sum due to
rounding
3. RECONCILIATION OF U.S. GAAP REVENUE
TO ORGANIC REVENUE
(Unaudited)
Total company PeopleScout Q1
2019 Q1 2018 Q1 2019 Q1 2018
13 Weeks Ended 13 Weeks Ended 13 Weeks Ended
13 Weeks Ended (in thousands) Mar 31,
2019 Apr 1, 2018 Mar 31, 2019 Apr 1, 2018
Revenue from services
$ 552,352 $ 554,388
$
67,440 $ 53,661 Acquired entity revenue (3)
(14,289 ) —
(14,289 ) —
Organic revenue 538,063 554,388
53,151 53,661
4. RECONCILIATION OF NET CASH PROVIDED
BY OPERATING ACTIVITIES TO FREE CASH FLOWS
(Unaudited)
Q1 2019 2018 2017
2016 13 Weeks Ended 52 Weeks Ended
52 Weeks Ended 53 Weeks Ended (in thousands)
Mar 31, 2019 Dec 30, 2018 Dec 31, 2017
Jan 1, 2017 Net cash provided by operating activities
$ 21,514 $ 125,692 $ 100,134 $ 260,703 Capital
expenditures
(5,862 ) (17,054 ) (21,958 )
(29,042 )
Free cash flows $ 15,652
$ 108,638 $ 78,176 $ 231,661 (1)
Gain on the divestiture of our PlaneTechs business sold
mid-March 2018. (2) Amortization of intangible assets of
acquired businesses. (3) Acquisition/integration costs and
acquired entity revenue relate to the acquisition of TMP Holdings
LTD completed on June 12, 2018. (4) Other adjustments for
the periods presented include implementation costs for cloud-based
systems. For the 13 weeks ended March 31, 2019 and June 30, 2019,
other adjustments also include amortization of software as a
service assets, which is reported in selling, general and
administrative expense. For the 13 weeks ended March 31, 2019,
these costs are offset by $3.9 million of workers’ compensation
benefit related to additional insurance coverage associated with
former workers’ compensation carriers that are in liquidation.
(5) Total tax effect of each of the adjustments to U.S. GAAP
net income using the expected ongoing rate of 14 percent for 2019
and 16 percent for 2018. (6) Adjustment of the effective
income tax rate to the expected ongoing rate of 14 percent for 2019
and 16 percent for 2018. (7) 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190429005115/en/
Derrek Gafford, Executive Vice President and CFO253-680-8214
TrueBlue (NYSE:TBI)
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