Financial News
TrueBlue Reports Fourth Quarter and Full-Year 2023 Results
Strong performance in renewable energy and disciplined cost management delivered results at high end of company outlook
TrueBlue (NYSE:TBI) today announced its fourth quarter and full-year results for 2023.
Fourth Quarter 2023 Financial Highlights
-
Revenue decreased 12 percent to $492 million compared to prior year period
- Fiscal fourth quarter consisted of 14 weeks versus 13 weeks in the fiscal fourth quarter of 2022
- Revenue decreased 15 percent on a comparable 13-week basis
-
Net loss of $3 million
- Adjusted EBITDA1 of $5 million and adjusted net income of $3 million
-
Zero debt, cash of $62 million and $86 million of borrowing availability
- Renewal of 5-year credit facility effective February 9, 2024 increased borrowing availability to approximately $140 million
Commentary
“We are managing through this market cycle with agility and discipline,” said Taryn Owen, President and CEO of TrueBlue. “While general market demand remains soft with hiring trends impacted by reduced business spend, we are capitalizing on attractive verticals, such as renewable energy, and maintaining a high level of engagement with clients to ensure we are well positioned as conditions improve.”
“As we enter 2024, we are laser-focused on leveraging our inherent strengths to capture market share and managing our cost structure with discipline to enhance our long-term profitability,” continued Ms. Owen. “Key components to this strategy include advancement of our digital transformation, expansion in high-growth and under-penetrated end markets, and enhanced focus through a simplified organizational structure. These priorities position us to drive efficiencies and secure opportunities to deliver long-term, profitable growth.”
Results
Fourth quarter revenue was $492 million, a decrease of 12 percent compared to revenue of $558 million in the fourth quarter of 2022. Net loss per diluted share was $0.08 compared to net income per diluted share of $0.21 in the prior year period. Adjusted net income1 per diluted share was $0.08 compared to adjusted net income per diluted share of $0.39 in the prior year period.
Full-year revenue was $1.9 billion, a decrease of 15 percent compared to revenue of $2.3 billion in 2022. Net loss per diluted share was $0.45 compared to net income per diluted share of $1.86 in 2022. Adjusted net income per diluted share was $0.28 compared to adjusted net income per diluted share of $2.36 in 2022.
2024 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 fourth quarter 2023 results on a webcast at 2:00 p.m. PT (5:00 p.m. ET), today, Wednesday, Feb. 21, 2024. 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 2023, TrueBlue served approximately 67,000 clients and connected approximately 464,000 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) |
||||||||||||||
|
Q4 2023 |
|
Q4 2022 |
|
2023 |
|
2022 |
|||||||
|
14 weeks ended (1) |
|
13 weeks ended |
|
53 weeks ended (1) |
|
52 weeks ended |
|||||||
(in thousands, except per share data) |
Dec 31, 2023 |
|
Dec 25, 2022 |
|
Dec 31, 2023 |
|
Dec 25, 2022 |
|||||||
Revenue from services |
$ |
492,171 |
|
|
$ |
557,695 |
|
|
$ |
1,906,243 |
|
|
$ |
2,254,184 |
Cost of services |
|
363,889 |
|
|
|
409,846 |
|
|
|
1,400,184 |
|
|
|
1,652,040 |
Gross profit |
|
128,282 |
|
|
|
147,849 |
|
|
|
506,059 |
|
|
|
602,144 |
Selling, general and administrative expense |
|
129,961 |
|
|
|
133,733 |
|
|
|
494,603 |
|
|
|
500,686 |
Depreciation and amortization |
|
6,946 |
|
|
|
7,258 |
|
|
|
25,821 |
|
|
|
29,273 |
Goodwill and intangible asset impairment charge |
|
— |
|
|
|
— |
|
|
|
9,485 |
|
|
|
— |
Income (loss) from operations |
|
(8,625 |
) |
|
|
6,858 |
|
|
|
(23,850 |
) |
|
|
72,185 |
Interest and other income (expense), net |
|
1,223 |
|
|
|
133 |
|
|
|
3,205 |
|
|
|
1,231 |
Income (loss) before tax expense (benefit) |
|
(7,402 |
) |
|
|
6,991 |
|
|
|
(20,645 |
) |
|
|
73,416 |
Income tax expense (benefit) |
|
(4,851 |
) |
|
|
(54 |
) |
|
|
(6,472 |
) |
|
|
11,143 |
Net income (loss) |
$ |
(2,551 |
) |
|
$ |
7,045 |
|
|
$ |
(14,173 |
) |
|
$ |
62,273 |
|
|
|
|
|
|
|
|
|||||||
Net (loss) income per common share: |
|
|
|
|
|
|
|
|||||||
Basic |
$ |
(0.08 |
) |
|
$ |
0.22 |
|
|
$ |
(0.45 |
) |
|
$ |
1.89 |
Diluted |
$ |
(0.08 |
) |
|
$ |
0.21 |
|
|
$ |
(0.45 |
) |
|
$ |
1.86 |
|
|
|
|
|
|
|
|
|||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|||||||
Basic |
|
31,079 |
|
|
|
32,486 |
|
|
|
31,317 |
|
|
|
32,889 |
Diluted |
|
31,079 |
|
|
|
33,014 |
|
|
|
31,317 |
|
|
|
33,447 |
(1) |
Our fiscal period ends on the Sunday closest to the last day of Dec. In fiscal years consisting of 53 weeks, the final quarter consists of 14 weeks, while in fiscal years consisting of 52 weeks, all quarters consist of 13 weeks. |
TRUEBLUE, INC. |
|||||
SUMMARY CONSOLIDATED BALANCE SHEETS |
|||||
(Unaudited) |
|||||
(in thousands) |
Dec 31, 2023 |
|
Dec 25, 2022 |
||
ASSETS |
|
|
|
||
Cash and cash equivalents |
$ |
61,885 |
|
$ |
72,054 |
Accounts receivable, net |
|
252,538 |
|
|
314,275 |
Other current assets |
|
40,570 |
|
|
43,883 |
Total current assets |
|
354,993 |
|
|
430,212 |
Property and equipment, net |
|
104,906 |
|
|
95,823 |
Restricted cash and investments |
|
192,985 |
|
|
213,734 |
Goodwill and intangible assets, net |
|
94,639 |
|
|
109,989 |
Other assets, net |
|
151,860 |
|
|
169,650 |
Total assets |
$ |
899,383 |
|
$ |
1,019,408 |
|
|
|
|
||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||
Accounts payable and other accrued expenses |
$ |
56,401 |
|
$ |
76,644 |
Accrued wages and benefits |
|
80,120 |
|
|
92,237 |
Current portion of workers’ compensation claims reserve |
|
44,866 |
|
|
50,005 |
Other current liabilities |
|
22,712 |
|
|
23,989 |
Total current liabilities |
|
204,099 |
|
|
242,875 |
Workers’ compensation claims reserve, less current portion |
|
151,649 |
|
|
201,005 |
Other long-term liabilities |
|
85,762 |
|
|
79,213 |
Total liabilities |
|
441,510 |
|
|
523,093 |
Shareholders’ equity |
|
457,873 |
|
|
496,315 |
Total liabilities and shareholders’ equity |
$ |
899,383 |
|
$ |
1,019,408 |
TRUEBLUE, INC. |
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(Unaudited) |
|||||||
|
53 weeks ended |
||||||
(in thousands) |
Dec 31, 2023 |
|
Dec 25, 2022 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income (loss) |
$ |
(14,173 |
) |
|
$ |
62,273 |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
25,821 |
|
|
|
29,273 |
|
Goodwill and intangible asset impairment charge |
|
9,485 |
|
|
|
— |
|
Provision for credit losses |
|
4,972 |
|
|
|
4,462 |
|
Stock-based compensation |
|
13,907 |
|
|
|
9,687 |
|
Deferred income taxes |
|
(9,902 |
) |
|
|
3,933 |
|
Non-cash lease expense |
|
12,591 |
|
|
|
12,920 |
|
Other operating activities |
|
(3,831 |
) |
|
|
7,862 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
56,761 |
|
|
|
34,765 |
|
Income taxes receivable and payable |
|
(1,317 |
) |
|
|
(2,665 |
) |
Operating lease right-of-use-asset |
|
— |
|
|
|
118 |
|
Other assets |
|
31,366 |
|
|
|
(16,142 |
) |
Accounts payable and other accrued expenses |
|
(19,210 |
) |
|
|
(1,501 |
) |
Accrued wages and benefits |
|
(12,113 |
) |
|
|
(7,938 |
) |
Workers’ compensation claims reserve |
|
(54,495 |
) |
|
|
(5,184 |
) |
Operating lease liabilities |
|
(12,796 |
) |
|
|
(13,052 |
) |
Other liabilities |
|
7,688 |
|
|
|
1,692 |
|
Net cash provided by operating activities |
|
34,754 |
|
|
|
120,503 |
|
Cash flows from investing activities: |
|
|
|
||||
Capital expenditures |
|
(31,276 |
) |
|
|
(30,626 |
) |
Payments for company-owned life insurance |
|
(2,347 |
) |
|
|
— |
|
Proceeds from company-owned life insurance |
|
1,662 |
|
|
|
— |
|
Purchases of restricted held-to-maturity investments |
|
(34,110 |
) |
|
|
(18,031 |
) |
Maturities of restricted held-to-maturity investments |
|
33,749 |
|
|
|
27,712 |
|
Net cash used in investing activities |
|
(32,322 |
) |
|
|
(20,945 |
) |
Cash flows from financing activities: |
|
|
|
||||
Purchases and retirement of common stock |
|
(34,178 |
) |
|
|
(60,939 |
) |
Net proceeds from employee stock purchase plans |
|
856 |
|
|
|
980 |
|
Common stock repurchases for taxes upon vesting of restricted stock |
|
(4,161 |
) |
|
|
(4,480 |
) |
Other |
|
(100 |
) |
|
|
(253 |
) |
Net cash used in financing activities |
|
(37,583 |
) |
|
|
(64,692 |
) |
Change in cash, cash equivalents and restricted cash reclassified to assets held-for-sale |
|
(300 |
) |
|
|
— |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(874 |
) |
|
|
(2,420 |
) |
Net change in cash, cash equivalents, and restricted cash |
|
(36,325 |
) |
|
|
32,446 |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
135,631 |
|
|
|
103,185 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
99,306 |
|
|
$ |
135,631 |
|
TRUEBLUE, INC. |
|||||||||||||||
SEGMENT DATA |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
Q4 2023 |
|
Q4 2022 |
|
2023 |
|
2022 |
||||||||
|
14 weeks ended (1) |
|
13 weeks ended |
|
53 weeks ended (1) |
|
52 weeks ended |
||||||||
(in thousands) |
Dec 31, 2023 |
|
Dec 25, 2022 |
|
Dec 31, 2023 |
|
Dec 25, 2022 |
||||||||
Revenue from services: |
|
|
|
|
|
|
|
||||||||
PeopleReady |
$ |
285,185 |
|
|
$ |
314,580 |
|
|
$ |
1,096,318 |
|
|
$ |
1,272,852 |
|
PeopleScout |
|
47,204 |
|
|
|
68,676 |
|
|
|
229,334 |
|
|
|
317,518 |
|
PeopleManagement |
|
159,782 |
|
|
|
174,439 |
|
|
|
580,591 |
|
|
|
663,814 |
|
Total company |
$ |
492,171 |
|
|
$ |
557,695 |
|
|
$ |
1,906,243 |
|
|
$ |
2,254,184 |
|
|
|
|
|
|
|
|
|
||||||||
Segment profit (2): |
|
|
|
|
|
|
|
||||||||
PeopleReady |
$ |
7,920 |
|
|
$ |
22,467 |
|
|
$ |
26,606 |
|
|
$ |
87,743 |
|
PeopleScout |
|
2,910 |
|
|
|
2,499 |
|
|
|
26,922 |
|
|
|
44,771 |
|
PeopleManagement |
|
2,781 |
|
|
|
4,141 |
|
|
|
6,963 |
|
|
|
15,811 |
|
Total segment profit |
|
13,611 |
|
|
|
29,107 |
|
|
|
60,491 |
|
|
|
148,325 |
|
Corporate unallocated expense |
|
(8,462 |
) |
|
|
(8,101 |
) |
|
|
(31,507 |
) |
|
|
(31,326 |
) |
Total company Adjusted EBITDA (3) |
|
5,149 |
|
|
|
21,006 |
|
|
|
28,984 |
|
|
|
116,999 |
|
Third-party processing fees for hiring tax credits (4) |
|
67 |
|
|
|
(108 |
) |
|
|
(253 |
) |
|
|
(594 |
) |
Amortization of software as a service assets (5) |
|
(1,233 |
) |
|
|
(810 |
) |
|
|
(4,117 |
) |
|
|
(2,985 |
) |
Goodwill and intangible asset impairment charge |
|
— |
|
|
|
— |
|
|
|
(9,485 |
) |
|
|
— |
|
PeopleReady technology upgrade costs (6) |
|
(440 |
) |
|
|
(1,779 |
) |
|
|
(1,342 |
) |
|
|
(7,935 |
) |
Executive leadership transition (7) |
|
(3,296 |
) |
|
|
— |
|
|
|
(5,788 |
) |
|
|
1,422 |
|
Other adjustments, net (8) |
|
(1,926 |
) |
|
|
(4,193 |
) |
|
|
(6,028 |
) |
|
|
(5,449 |
) |
EBITDA (3) |
|
(1,679 |
) |
|
|
14,116 |
|
|
|
1,971 |
|
|
|
101,458 |
|
Depreciation and amortization |
|
(6,946 |
) |
|
|
(7,258 |
) |
|
|
(25,821 |
) |
|
|
(29,273 |
) |
Interest and other income (expense), net |
|
1,223 |
|
|
|
133 |
|
|
|
3,205 |
|
|
|
1,231 |
|
Income (loss) before tax benefit (expense) |
|
(7,402 |
) |
|
|
6,991 |
|
|
|
(20,645 |
) |
|
|
73,416 |
|
Income tax benefit (expense) |
|
4,851 |
|
|
|
54 |
|
|
|
6,472 |
|
|
|
(11,143 |
) |
Net income (loss) |
$ |
(2,551 |
) |
|
$ |
7,045 |
|
|
$ |
(14,173 |
) |
|
$ |
62,273 |
|
(1) |
Our fiscal period ends on the Sunday closest to the last day of Dec. In fiscal years consisting of 53 weeks, the final quarter consists of 14 weeks, while in fiscal years consisting of 52 weeks, all quarters consist of 13 weeks. |
|
(2) |
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 depreciation and amortization expense, unallocated corporate general and administrative expense, interest expense, other income, income taxes, and other adjustments not considered to be ongoing. |
|
(3) |
See the Non-GAAP Financial Measures table on the next page for definitions of EBITDA and Adjusted EBITDA. |
|
(4) |
These third-party processing fees are associated with generating hiring tax credits. |
|
(5) |
Amortization of software as a service assets is reported in selling, general and administrative expense. |
|
(6) |
Costs associated with upgrading legacy PeopleReady technology. |
|
(7) |
Cost associated with our CEO and CFO transitions, including accelerated vesting of stock awards and other separation related payments. |
|
(8) |
Other adjustments for the 14 and 53 weeks ended December 31, 2023 primarily include workforce reduction costs of $1.8 million and $5.1 million, respectively. The 53 weeks ended December 31, 2023 also includes adjustments to COVID-19 government subsidies of $0.5 million. Other adjustments for the 13 and 52 weeks ended December 25, 2022 primarily include accelerated software costs of $4.2 million. The 52 weeks ended December 25, 2022 also includes costs of $1.1 million incurred while transitioning to a new third party administrator for workers’ compensation. |
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 |
Adjusted net income and Adjusted net income per diluted share |
|
Net income (loss) and net income (loss) per diluted share, excluding: – amortization of intangibles, – amortization of software as a service assets, – goodwill and intangible asset impairment charge, – accelerated depreciation, – PeopleReady technology upgrade costs, – executive leadership transition, – other adjustments, net, and – tax effect of the adjustments to U.S. GAAP.
|
|
– 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. |
EBITDA and Adjusted EBITDA |
|
EBITDA excludes from net income (loss): – income tax expense (benefit), – interest and other (income) expense, net, and – depreciation and amortization.
Adjusted EBITDA, further excludes: – third-party processing fees for hiring tax credits, – amortization of software as a service assets, – goodwill and intangible asset impairment charge, – PeopleReady technology upgrade costs, – executive leadership transition, – other adjustments, net.
|
|
– 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 SG&A expense |
|
Selling, general and administrative expense excluding: – third-party processing fees for hiring tax credits, – amortization of software as a service assets, – PeopleReady technology upgrade costs, – executive leadership transition, – other adjustments, net. |
|
– Enhances comparability on a consistent basis and provides investors with useful insight into the underlying trends of the business. |
1. |
RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE |
|||||||||||||||
(Unaudited) |
||||||||||||||||
|
Q4 2023 |
|
Q4 2022 |
|
|
2023 |
|
|
|
2022 |
|
|||||
|
14 weeks ended (1) |
|
13 weeks ended |
|
53 weeks ended (1) |
|
52 weeks ended |
|||||||||
(in thousands, except for per share data) |
Dec 31, 2023 |
|
Dec 25, 2022 |
|
Dec 31, 2023 |
|
Dec 25, 2022 |
|||||||||
Net income (loss) |
$ |
(2,551 |
) |
|
$ |
7,045 |
|
|
$ |
(14,173 |
) |
|
$ |
62,273 |
|
|
Amortization of intangible assets |
|
1,355 |
|
|
|
1,265 |
|
|
|
5,175 |
|
|
|
5,746 |
|
|
Amortization of software as a service assets (2) |
|
— |
|
|
|
810 |
|
|
|
— |
|
|
|
2,985 |
|
|
Goodwill and intangible asset impairment charge |
|
— |
|
|
|
— |
|
|
|
9,485 |
|
|
|
— |
|
|
Accelerated depreciation (3) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,658 |
|
|
PeopleReady technology upgrade costs (4) |
|
440 |
|
|
|
1,779 |
|
|
|
1,342 |
|
|
|
7,935 |
|
|
Executive leadership transition costs (5) |
|
3,296 |
|
|
|
— |
|
|
|
5,788 |
|
|
|
(1,422 |
) |
|
Other adjustments, net (6) |
|
1,926 |
|
|
|
4,193 |
|
|
|
6,028 |
|
|
|
5,449 |
|
|
Tax effect of adjustments to net income (loss) (7) |
|
(1,824 |
) |
|
|
(2,092 |
) |
|
|
(4,920 |
) |
|
|
(5,811 |
) |
|
Adjusted net income |
$ |
2,642 |
|
|
$ |
13,000 |
|
|
$ |
8,725 |
|
|
$ |
78,813 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Adjusted net income per diluted share |
$ |
0.08 |
|
|
$ |
0.39 |
|
|
$ |
0.28 |
|
|
$ |
2.36 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted weighted average shares outstanding |
|
31,450 |
|
|
|
33,014 |
|
|
|
31,590 |
|
|
|
33,447 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Margin / % of revenue: |
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
(0.5 |
) % |
|
|
1.3 |
% |
|
|
(0.7 |
) % |
|
|
2.8 |
% |
||
Adjusted net income |
|
0.5 |
% |
|
|
2.3 |
% |
|
|
0.5 |
% |
|
|
3.5 |
% |
|
2. |
RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA |
|||||||||||||||
(Unaudited) |
||||||||||||||||
|
Q4 2023 |
|
Q4 2022 |
|
|
2023 |
|
|
|
2022 |
|
|||||
|
14 weeks ended (1) |
|
13 weeks ended |
|
53 weeks ended (1) |
|
52 weeks ended |
|||||||||
(in thousands) |
Dec 31, 2023 |
|
Dec 25, 2022 |
|
Dec 31, 2023 |
|
Dec 25, 2022 |
|||||||||
Net income (loss) |
$ |
(2,551 |
) |
|
$ |
7,045 |
|
|
$ |
(14,173 |
) |
|
$ |
62,273 |
|
|
Income tax expense (benefit) |
|
(4,851 |
) |
|
|
(54 |
) |
|
|
(6,472 |
) |
|
|
11,143 |
|
|
Interest and other (income) expense, net |
|
(1,223 |
) |
|
|
(133 |
) |
|
|
(3,205 |
) |
|
|
(1,231 |
) |
|
Depreciation and amortization |
|
6,946 |
|
|
|
7,258 |
|
|
|
25,821 |
|
|
|
29,273 |
|
|
EBITDA |
|
(1,679 |
) |
|
|
14,116 |
|
|
|
1,971 |
|
|
|
101,458 |
|
|
Third-party processing fees for hiring tax credits (8) |
|
(67 |
) |
|
|
108 |
|
|
|
253 |
|
|
|
594 |
|
|
Amortization of software as a service assets (2) |
|
1,233 |
|
|
|
810 |
|
|
|
4,117 |
|
|
|
2,985 |
|
|
Goodwill and intangible asset impairment charge |
|
— |
|
|
|
— |
|
|
|
9,485 |
|
|
|
— |
|
|
PeopleReady technology upgrade costs (4) |
|
440 |
|
|
|
1,779 |
|
|
|
1,342 |
|
|
|
7,935 |
|
|
Executive leadership transition costs (5) |
|
3,296 |
|
|
|
— |
|
|
|
5,788 |
|
|
|
(1,422 |
) |
|
Other adjustments, net (6) |
|
1,926 |
|
|
|
4,193 |
|
|
|
6,028 |
|
|
|
5,449 |
|
|
Adjusted EBITDA |
$ |
5,149 |
|
|
$ |
21,006 |
|
|
$ |
28,984 |
|
|
$ |
116,999 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Margin / % of revenue: |
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
|
(0.5 |
) % |
|
|
1.3 |
% |
|
|
(0.7 |
) % |
|
|
2.8 |
% |
|
Adjusted EBITDA |
|
1.0 |
% |
|
|
3.8 |
% |
|
|
1.5 |
% |
|
|
5.2 |
% |
|
3. |
RECONCILIATION OF U.S. GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSE TO ADJUSTED SG&A EXPENSE |
|||||||||||||||
(Unaudited) |
||||||||||||||||
|
Q4 2023 |
|
Q4 2022 |
|
|
2023 |
|
|
|
2022 |
|
|||||
|
14 weeks ended (1) |
|
13 weeks ended |
|
53 weeks ended (1) |
|
52 weeks ended |
|||||||||
(in thousands) |
Dec 31, 2023 |
|
Dec 25, 2022 |
|
Dec 31, 2023 |
|
Dec 25, 2022 |
|||||||||
Selling, general and administrative expense |
$ |
129,961 |
|
|
$ |
133,733 |
|
|
$ |
494,603 |
|
|
$ |
500,686 |
|
|
Third-party processing fees for hiring tax credits (8) |
|
67 |
|
|
|
(108 |
) |
|
|
(253 |
) |
|
|
(594 |
) |
|
Amortization of software as a service assets (2) |
|
(1,233 |
) |
|
|
(810 |
) |
|
|
(4,117 |
) |
|
|
(2,985 |
) |
|
PeopleReady technology upgrade costs (4) |
|
(440 |
) |
|
|
(1,779 |
) |
|
|
(1,342 |
) |
|
|
(7,935 |
) |
|
Executive leadership transition costs (5) |
|
(3,296 |
) |
|
|
— |
|
|
|
(5,788 |
) |
|
|
1,422 |
|
|
Other adjustments, net (6) |
|
(1,246 |
) |
|
|
(4,193 |
) |
|
|
(4,145 |
) |
|
|
(5,449 |
) |
|
Adjusted SG&A expense |
$ |
123,813 |
|
|
$ |
126,843 |
|
|
$ |
478,958 |
|
|
$ |
485,145 |
|
|
|
|
|
|
|
|
|
|
|||||||||
% of revenue: |
|
|
|
|
|
|
|
|||||||||
Selling, general and administrative expense |
|
26.4 |
% |
|
|
24.0 |
% |
|
|
25.9 |
% |
|
|
22.2 |
% |
|
Adjusted SG&A expense |
|
25.2 |
% |
|
|
22.7 |
% |
|
|
25.1 |
% |
|
|
21.5 |
% |
|
(1) |
Our fiscal period ends on the Sunday closest to the last day of December. In fiscal years consisting of 53 weeks, the final quarter consists of 14 weeks, while in fiscal years consisting of 52 weeks, all quarters consist of 13 weeks. |
|
(2) |
Amortization of software as a service assets is reported in selling, general and administrative expense. Note, amortization of software as a service assets was included as an adjustment to net income during transitory periods ending with fiscal 2022 and is only considered an adjustment to EBITDA going forward to be consistent with the treatment of depreciation and amortization. |
|
(3) |
Accelerated depreciation for the existing systems being replaced by the upgraded PeopleReady technology platform. |
|
(4) |
Costs associated with upgrading legacy PeopleReady technology. |
|
(5) |
Cost associated with our CEO and CFO transitions, including accelerated vesting of stock awards and other separation related payments. |
|
(6) |
Other adjustments for the 14 and 53 weeks ended December 31, 2023 primarily include workforce reduction costs of $1.8 million and $5.1 million, respectively. The 53 weeks ended December 31, 2023 also includes adjustments to COVID-19 government subsidies of $0.5 million. Other adjustments for the 13 and 52 weeks ended December 25, 2022 primarily include accelerated software costs of $4.2 million. The 52 weeks ended December 25, 2022 also includes costs of $1.1 million incurred while transitioning to a new third party administrator for workers’ compensation. |
|
(7) |
Tax effect of the adjustments to U.S. GAAP net income (loss). The tax effect includes the application of our statutory rate of 26% to all taxable / deductible adjustments. Note, prior periods were reported using the effective rate for the respective period and have been recast to conform to the current presentation for comparability. Please refer to the reconciliations on the financial results page under the investor relations section of our website for additional information on comparable historical periods. |
|
(8) |
These third-party processing fees are associated with generating hiring tax credits. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240221160802/en/
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