TrueBlue Reports Q4 and Full-Year 2014 Results

02/05/2015

Adjusted EBITDA Growth of 53 Percent for Fourth Quarter 2014

TACOMA, Wash.--(BUSINESS WIRE)--Feb. 5, 2015-- TrueBlue, Inc. (NYSE:TBI) announced today that revenue for the fourth quarter of 2014 was $691 million, an increase of 54 percent, compared to revenue of $449 million for the fourth quarter of 2013. Net income for the fourth quarter of 2014 was $0.65 per diluted share, compared to $0.36 for the fourth quarter of 2013. Adjusted net income per diluted share* for the fourth quarter of 2014 was $0.52, compared to $0.35 for the fourth quarter of 2013. Adjusted EBITDA* for the fourth quarter of 2014 was $42 million, an increase of 53 percent, compared to $27 million in the fourth quarter of 2013.

The company also reported record annual revenue of $2.2 billion, an increase of 30 percent, compared to $1.7 billion for 2013. Net income for 2014 was $1.59 per diluted share, compared to $1.11 for 2013. Adjusted net income per diluted share was $1.45 for 2014, compared to $1.08 for 2013. Adjusted EBITDA for 2014 was $116 million, an increase of 33 percent, compared to $87 million in 2013.

“Our focus has always been on providing customers with workforce solutions to improve the performance of their business,” TrueBlue CEO Steve Cooper said. “The acquisition of Seaton added new industry-leading service lines in recruitment process outsourcing (RPO), managed service provider (MSP) solutions, and on-premise staffing, which are meeting all of our performance expectations. Combined with our specialized staffing service lines, we now offer more solutions to meet our customers’ increasingly complex talent needs.”

TrueBlue acquired Seaton’s service lines, including Staff Management | SMX, PeopleScout and HRX, on June 30, 2014.

“Our teams delivered impressive results this quarter with revenue and Adjusted EBITDA growth of more than 50 percent,” Cooper added. “We are excited about the opportunities for growth in our specialized staffing business, and also about the new workforce solutions we have to connect people and work.”

TrueBlue estimates revenue in the range of $556 million to $570 million and adjusted net income per diluted share of $0.10 to $0.15 for the first quarter of 2015.

Management will discuss fourth quarter and full-year 2014 results on a conference call at 2 p.m. PT (5 p.m. ET), today, Thursday, Feb. 5. 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 and, in the case of adjusted net income per diluted share, also adjusts income taxes to a marginal rate of 40 percent. See the financial statements accompanying the release for more information on non-GAAP terms.

About TrueBlue

TrueBlue (NYSE: TBI) is a leading provider of specialized workforce solutions, helping clients improve growth and performance by providing staffing, recruitment process outsourcing and managed service provider 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 750,000 people and 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. 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       52 Weeks Ended



December       December


December       December



26, 2014


27, 2013


26, 2014  

27, 2013
Revenue from services

$ 691,390



$ 448,952


$ 2,174,045


$ 1,668,929
Cost of services

  533,152  


  328,689


  1,637,066  

  1,226,626
Gross profit


158,238




120,263



536,979



442,303
Selling, general and administrative expenses


117,123




93,710



425,777



362,248
Depreciation and amortization

  9,348  


  5,339


  29,474  

  20,472
Income from operations


31,767




21,214



81,728



59,583
Interest and other income (expense), net

  (270 )


  186


  116  

  1,354
Income before tax expense


31,497




21,400



81,844



60,937
Income tax expense

  4,473  


  6,889


  16,169  

  16,013
Net income

$ 27,024  


$ 14,511


$ 65,675  

$ 44,924















 
Net income per common share














Basic

$ 0.66



$ 0.36


$ 1.61


$ 1.12
Diluted

$ 0.65



$ 0.36


$ 1.59


$ 1.11















 
Weighted average shares outstanding














Basic


40,832




40,412



40,734



40,166
Diluted


41,317




40,775



41,176



40,502




















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

    13 Weeks Ended




      December 27,



December 26, 2014


2013



Legacy      
     



Legacy



TrueBlue  

Seaton (1)  

Total Company  

TrueBlue
Revenue from services

$ 445,351


$ 246,039


$ 691,390


$ 448,952















 
Adjusted EBITDA (2)


26,587



15,421



42,008



27,378
 
(1) Seaton was acquired effective June 30, 2014. Therefore, the comparative prior year amounts are not presented.
 

(2) Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA excludes from net income, interest, taxes, depreciation and amortization, non-recurring costs related to the purchase, integration, reorganization, and shutdown activities related to acquisitions. See reconciliation of GAAP Net income to Adjusted EBITDA below.

 
 
TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
 
 

    December 26,     December 27,



2014

2013
Assets





Current assets:





Cash and cash equivalents

$ 18,314

$ 122,003
Marketable securities


1,500


14,745
Accounts receivable, net


359,903


199,519
Other current assets

  34,738

  20,191

Total current assets




414,455


356,458
Property and equipment, net


61,392


54,473
Restricted cash and investments


168,426


154,558
Other assets, net

  421,046

  153,972
Total assets

$ 1,065,319

$ 719,461






 
Liabilities and shareholders' equity





Current liabilities

$ 186,093

$ 121,409
Long-term debt


199,383


29,656
Other long-term liabilities

  210,724

  175,036
Total liabilities


596,200


326,101
Shareholders' equity

  469,119

  393,360
Total liabilities and shareholders' equity

$ 1,065,319

$ 719,461








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

      Years Ended




December 26,     December 27,




2014

2013
Cash flows from operating activities






Net income


$ 65,675


$ 44,924
Adjustments to reconcile net income to net cash from operating activities:






Depreciation and amortization



29,474



20,472
Provision for doubtful accounts



11,815



12,063
Stock-based compensation



11,049



8,412
Deferred income taxes



12,663



(3,844 )
Other operating activities



898



2,116
Changes in operating assets and liabilities, net of acquisitions:






Accounts receivable



(77,629 )


(4,181 )
Income taxes



(5,696 )


4,113
Other assets



(7,361 )


(7,341 )
Accounts payable and other accrued expenses



(10,364 )


(3,592 )
Accrued wages and benefits



12,400



(3,643 )
Workers' compensation claims reserve



1,579



9,859
Other liabilities


  1,670  

  6,710  
Net cash provided by operating activities


  46,173  

  86,068  
Cash flows from investing activities






Capital expenditures



(16,918 )


(13,003 )
Acquisition of businesses, net of cash acquired



(305,876 )


(77,560 )
Purchases of marketable securities



(25,057 )


(40,800 )
Sales and maturities of marketable securities



44,167



20,050
Change in restricted cash and cash equivalents



(9,283 )


(16,122 )
Purchases of restricted investments



(18,196 )


(13,411 )
Maturities of restricted investments


  12,726  

  15,581  
Net cash used in investing activities


  (318,437 )

  (125,265 )
Cash flows from financing activities






Net proceeds from stock option exercises and employee stock purchase plans



2,191



9,136
Common stock repurchases for taxes upon vesting of restricted stock



(3,114 )


(2,800 )
Net change in revolving credit facility



171,994



-
Proceeds from note payable



-



34,000
Payments on debt and other liabilities



(2,267 )


(8,681 )
Other


  978  

  713  
Net cash provided by financing activities


  169,782  

  32,368  
Effect of exchange rates on cash


  (1,207 )

  (681 )
Net change in cash and cash equivalents



(103,689 )


(7,510 )
CASH AND CASH EQUIVALENTS, beginning of period


  122,003  

  129,513  
CASH AND CASH EQUIVALENTS, end of period


$ 18,314  

$ 122,003  











 
 
TRUEBLUE, INC.
RECONCILIATION OF GAAP NET INCOME TO EBITDA AND ADJUSTED EBITDA
RECONCILIATION OF GAAP NET INCOME PER DILUTED SHARE TO ADJUSTED NET INCOME PER DILUTED SHARE
(Unaudited, in thousands, except for per share data)
 

    13 Weeks Ended     52 Weeks Ended



Dec 26, 2014

   

Dec 27, 2013



Dec 26, 2014

   

Dec 27, 2013

GAAP net income

$ 27,024


$ 14,511


$ 65,675


$ 44,924
Income tax expense


4,473



6,889



16,169



16,013
Interest expense (income), net

  270  

  (186 )

  (116 )

  (1,354 )
Income from operations


31,767



21,214



81,728



59,583












 
Depreciation and amortization

  9,348  

  5,339  

  29,474  

  20,472  

EBITDA (4)




41,115



26,553



111,202



80,055
Non-recurring acquisition and integration costs (1)

  893  

  825  

  5,220  

  7,375  
Adjusted EBITDA (4)

$ 42,008  

$ 27,378  

$ 116,422  

$ 87,430  












 
GAAP net income per diluted share

$ 0.65


$ 0.36


$ 1.59


$ 1.11
Non-recurring acquisition and integration costs, net of tax (1)


0.01



0.01



0.08



0.11
Amortization of intangible assets of acquired businesses, net of tax (2)


0.06



0.02



0.18



0.07
Adjust income taxes to marginal rate (3)

 

(0.20

)

 

(0.04

)

 

(0.40

)

 

(0.21

)
Adjusted net income per diluted share (5)

$

0.52

 

$

0.35

 

$

1.45

 

$

1.08

 












 
Diluted weighted average shares outstanding


41,317



40,775



41,176



40,502
 

(1) Non-recurring acquisition costs for the current quarter and year include the acquisition of Seaton, which was completed on June 30, 2014, the first business day of our third quarter of fiscal 2014. The non-recurring acquisition costs for the prior year related to the acquisition of TWC, which was completed on Oct. 1, 2013 and MDT, which was completed Feb. 4, 2013. The integration of MDT was completed during the third quarter of fiscal 2013 and TWC was completed during the fourth quarter of fiscal 2013.

 
(2) Amortization of intangible assets of acquired businesses
 
(3) Adjust income taxes to a marginal rate of 40%
 

(4) EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA excludes interest, taxes, depreciation and amortization from net income. 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 measures 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.

 

(5) Adjusted net income per diluted share is a non-GAAP financial measure which excludes non-recurring costs related to the purchase, integration, reorganization and shutdown activities related to acquisitions net of tax, amortization of intangibles of acquired businesses net of tax and adjusts income taxes to a marginal rate of 40%, which is used by management in evaluating performance and communicating comparable results. Adjusted net income per diluted share should not be considered a measure of financial performance in isolation or as an alternative to Net income per diluted 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
Derrek Gafford, EVP & CFO
253-680-8214
or
Stacey Burke, VP of Corporate Communications
253-680-8291

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.