TrueBlue Reports 2014 Third Quarter Results

10/23/2014

TACOMA, Wash.--(BUSINESS WIRE)--Oct. 23, 2014-- TrueBlue, Inc. (NYSE:TBI) today reported results for the third quarter of 2014.

  • Revenue was $633 million, up 40 percent compared to revenue of $451 million for the third quarter in 2013.
  • Net income was $21 million compared to $19 million for the third quarter of 2013.
  • Adjusted net income* was $22 million, or $0.54 per diluted share, compared to $19 million, or $0.48 per diluted share, for the third quarter of 2013.
  • Adjusted EBITDA* was $42 million, up 25 percent compared to $33 million for the third quarter of 2013.

“We are pleased with the success of our growth strategies, which produced strong revenue and profit growth this quarter,” TrueBlue CEO Steve Cooper said. “Our team continues to focus on providing more value to customers through the specialized services we offer. In addition, we have a proven track record of acquiring companies with complementary service offerings that enable our customers to better manage their workforce.”

TrueBlue completed its acquisition of Seaton on June 30, 2014, the first day of its third quarter. TrueBlue refers to Seaton’s industry-leading brands, Staff Management | SMX, PeopleScout and HRX, as its Outsourcing Solutions group. TrueBlue is now the largest industrial staffing provider in the U.S.

“We are excited about the opportunities to expand our EBITDA margin through operational efficiency and the use of technology,” Cooper said. “This reduces the dependency on our branch footprint while allowing us to still deliver excellent service.”

TrueBlue has consolidated 52 branches year to date, resulting in 708 branches in operation at the end of the quarter.

TrueBlue estimates revenue in the range of $695 million to $705 million and adjusted net income* per diluted share of $0.44 to $0.49 for the fourth quarter of 2014.

Management will discuss third quarter 2014 results on a conference call at 6 a.m. PT (9 a.m. ET), today, Thursday, Oct. 23. The conference call can be accessed on TrueBlue’s web site: www.trueblue.com.

* This is a non-GAAP financial measure that excludes non-recurring acquisition and integration costs for which a reconciliation is provided along with the financial statements accompanying this release.

About TrueBlue

TrueBlue (NYSE: TBI) is a leading staffing, recruiting and workforce management company. The company fills individual positions on demand, staffs entire facilities, and manages outsourced recruiting processes and staffing vendor programs for a wide variety of clients. The company’s specialized workforce solutions meet clients’ needs for a reliable, efficient workforce, and it serves a wide variety of industries. TrueBlue connects as many as 500,000 people to work each year. Learn more about TrueBlue 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. 27, 2013. Additional risk factors resulting from the acquisition of Seaton will be included in our Form 10-Q. 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 26

September 27

September 26

September 27




2014

2013

2014

2013
Revenue from services


$ 633,365


$ 451,169

$ 1,482,655

$ 1,219,977
Cost of services


  473,766  

  327,641

  1,103,914

  897,937
Gross profit



159,599



123,528


378,741


322,040
Selling, general and administrative expenses



120,318



90,767


308,654


268,538
Depreciation and amortization


  9,719  

  4,771

  20,126

  15,133
Income from operations



29,562



27,990


49,961


38,369
Interest and other income (expense), net


  (409 )

  416

  385

  1,167
Income before tax expense



29,153



28,406


50,346


39,536
Income tax expense


  8,243  

  9,454

  11,696

  9,124
Net income


$ 20,910  

$ 18,952

$ 38,650

$ 30,412













 
Net income per common share












Basic


$ 0.51


$ 0.47

$ 0.95

$ 0.76
Diluted


$ 0.51


$ 0.47

$ 0.94

$ 0.75













 
Weighted average shares outstanding












Basic



40,793



40,330


40,701


40,085
Diluted



41,038



40,670


40,971


40,395













 
 
TRUEBLUE, INC.
SELECTED FINANCIAL DATA
(Unaudited, in thousands)

     
   
   
   




13 Weeks Ended      




September 26, 2014

September 27, 2013





Legacy TrueBlue

Seaton (1)

Total Company

Legacy TrueBlue
Revenue from services


$ 484,729

$ 148,636

$ 633,365


$ 451,169













 
Adjusted EBITDA (2)



34,932


6,688


41,620



33,394
Non-recurring acquisition costs (3)








  2,339  

  633
EBITDA (2)









39,281



32,761
Depreciation and amortization









9,719



4,771
Interest income (expense), net








  (409 )

  416
Income before tax expense








$ 29,153  

$ 28,406













 
(1) Seaton was acquired effective June 30, 2014. Therefore, the comparative prior year amounts are not presented.
 
(2) EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA excludes interest, taxes, depreciation and amortization from net income (loss). Adjusted EBITDA further excludes from EBITDA non-recurring costs related to the purchase, integration, reorganization and shutdown activities related to acquisitions. EBITDA and Adjusted EBITDA are key measures used by management in evaluating performance. EBITDA and Adjusted EBITDA should not be considered a measure of financial performance in isolation or as an alternative to income from operations in the Consolidated Statements of Operations in accordance with GAAP, and, as presented, may not be comparable to similarly titled measures of other companies.
 
(3) Non-recurring acquisition costs for the 13 weeks ended September 26, 2014 related to the acquisition and integration of Seaton. The acquisition was completed effective June 30, 2014, the first day of our third quarter. The non-recurring acquisition costs for the prior year related to the acquisition and integration of TWC.
 
 
TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)

     
   




September 26

December 27




2014

 


2013
Assets






Current assets:






Cash and cash equivalents


$ 29,244

$ 122,003
Marketable securities



1,746


14,745
Accounts receivable, net



310,926


199,519
Other current assets


  35,629

  20,191
Total current assets



377,545


356,458
Property and equipment, net



79,304


54,473
Restricted cash and investments



152,281


154,558
Other assets, net


  391,597

  153,972
Total assets


$ 1,000,727

$ 719,461







 
Liabilities and shareholders' equity






Current liabilities


$ 177,958

$ 121,409
Long-term debt



174,950


29,656
Other long-term liabilities


  207,853

  175,036
Total liabilities



560,761


326,101
Shareholders' equity


  439,966

  393,360
Total liabilities and shareholders' equity


$ 1,000,727

$ 719,461







 
 
TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)

     
   




39 Weeks Ended




September 26

September 27




2014

2013
Cash flows from operating activities






Net income


$ 38,650


$ 30,412
Adjustments to reconcile net income to net cash from operating activities






Depreciation and amortization



20,126



15,133
Provision for doubtful accounts



9,619



8,785
Stock-based compensation



8,902



6,428
Deferred income taxes



6,077



(1,694 )
Other operating activities



(148 )


1,213
Changes in operating assets and liabilities, net of acquisition






Accounts receivable



(26,391 )


(24,776 )
Income taxes



(3,179 )


6,580
Other assets



(6,510 )


(4,703 )
Accounts payable and other accrued expenses



(1,687 )


(6,728 )
Accrued wages and benefits



11,373



11,419
Workers' compensation claims reserve



532



2,785
Other liabilities


  2,539  

  423  
Net cash provided by operating activities


  59,903  

  45,277  







 
Cash flows from investing activities






Capital expenditures



(10,213 )


(10,350 )
Acquisition of business, net of cash acquired



(307,972 )


(54,872 )
Purchases of marketable securities



(25,057 )


(35,300 )
Sales and maturities of marketable securities



43,917



205
Change in restricted cash and cash equivalents



10,020



(1,338 )
Purchases of restricted investments



(18,196 )


(9,175 )
Maturities of restricted investments


  10,588  

  13,337  
Net cash used in investing activities


  (296,913 )

  (97,493 )







 
Cash flows from financing activities






Net proceeds from stock option exercises and employee stock purchase plans



1,673



8,731
Common stock repurchases for taxes upon vesting of restricted stock



(3,021 )


(2,653 )
Proceeds from note payable



186,994



34,000
Payments on debt and other liabilities



(41,700 )


(8,115 )
Other


  1,242  

  720  
Net cash provided by financing activities



145,188



32,683







 
Effect of exchange rates on cash


  (937 )

  (435 )
Net change in cash and cash equivalents



(92,759 )


(19,968 )
CASH AND CASH EQUIVALENTS, beginning of period


  122,003  

  129,513  
CASH AND CASH EQUIVALENTS, end of period


$ 29,244  

$ 109,545  







 
 
TRUEBLUE, INC.
RECONCILIATION OF GAAP NET INCOME PER DILUTED SHARE TO ADJUSTED NET INCOME PER DILUTED SHARE
(Unaudited)

     
   




13 Weeks Ended




September 26

September 27




2014

2013
GAAP Net income


$ 20,910

$ 18,952
Non-recurring acquisition costs, net of income tax (1)


  1,404

  380
Adjusted Net income


$ 22,314

$ 19,332







 
GAAP Net income per diluted share


$ 0.51

$ 0.47
Non-recurring acquisition costs per diluted share, net of income tax (1)


  0.03

  0.01
Adjusted net income per diluted share (2)


$ 0.54

$ 0.48







 
(1) Non-recurring acquisition costs for the current quarter related to the acquisition and integration of Seaton. The acquisition was completed on June 30, 2014, the first business day of our third quarter. The non-recurring acquisition costs for the prior year related to the acquisition and integration of TWC. The impact on net income per diluted share is net of income taxes at 40%.
 
(2) Adjusted net income and adjusted net income per diluted share are non-GAAP financial measures which exclude non-recurring costs for the purchase, integration, reorganization, and shutdown activities related to acquisitions, and which is used by management in communicating comparable performance. 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 and net income per share in the Consolidated Statements of Operations in accordance with GAAP, and, as presented, may not be comparable to similarly titled measures of other companies.

Source: TrueBlue, Inc.

TrueBlue, Inc.
Derrek Gafford, 253-680-8214
EVP & CFO
or
Stacey Burke, 253-680-8291
VP of Corporate Communications

IR CONTACT

Derrek Gafford

Chief Financial Officer

Phone: 1-253-680-8214

InvestorRelations@TrueBlue.com

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About TrueBlue

TrueBlue (NYSE: TBI) is a leading provider of specialized workforce solutions, helping clients improve growth and performance by providing staffing, workforce management, and recruitment process outsourcing solutions. The company’s specialized workforce solutions meet clients’ needs for a reliable, efficient workforce in a wide variety of industries. TrueBlue connects as many as 840,000 people to work each year.