TrueBlue, Inc. (NYSE:TBI) reported results today for the second quarter of 2014.

  • Second quarter revenue increased by seven percent to $453 million compared to revenue of $422 million for the same quarter in 2013.
  • Net income was $16.1 million, or $0.39 per diluted share, compared to net income of $12.5 million, or $0.31 per diluted share, for the second quarter of 2013.
  • Adjusted EBITDA* was $25.2 million, compared to $24.3 million in the second quarter of 2013.

“We are pleased with our growth in the second quarter along with the momentum we have seen in June as seasonal business ramps up,” TrueBlue CEO Steve Cooper said. “Our organic growth continues to be strong, and the acquisitions we made in 2013 are performing to our expectations.

“We’re particularly excited about our recent acquisition of Seaton, which is off to a great start and getting favorable reactions from our customers,” Cooper added. “We’re looking forward to offering a broader range of outsourcing workforce solutions to all our customers. In addition to the temporary staffing services we’ve traditionally provided, we can now do more for customers through sourcing, screening and onboarding their on-premise temporary workers and permanent employees.”

TrueBlue completed its acquisition of Seaton June 30, the first day of its third quarter, and is now the largest industrial staffing provider in the U.S. Through the acquisition, TrueBlue added industry leaders PeopleScout, Staff Management | SMX and Australia-based HRX to its service lines. According to Cooper, the new service lines are expected to add approximately $730 million to $750 million of revenue and $35 million to $39 million of Adjusted EBITDA** to the company’s consolidated results over the next four quarters.

For the third quarter of 2014, TrueBlue estimates revenue in the range of $634 million to $647 million and net income per diluted share for the quarter of $0.38 to $0.46.

Management will discuss second quarter 2014 results on a conference call at 6 a.m. (PT), today, Thursday, July 24, 2014. The conference call can be accessed on TrueBlue’s web site: www.trueblue.com

* This is a non-GAAP financial measure for which a reconciliation is provided along with the financial statements accompanying this release.
** This is a non-GAAP financial measure for which a reconciliation is provided as part of our Q2 2014 Earnings Release Presentation filed on Form 8-K together with the press 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 assigns as many as 100,000 people to work each day, drawing from a data base of hundreds of thousands of candidates, and places more than 250,000 people in permanent positions 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 26 Weeks Ended
June 27, 2014 June 28, 2013 June 27, 2014 June 28, 2013
Revenue from services $ 453,227 $ 422,310 $ 849,290 $ 768,809
Cost of services   333,644   310,437   630,148   570,296  
Gross profit 119,583 111,873 219,142 198,513
Selling, general and administrative expenses 96,354 89,339 188,336 177,771
Depreciation and amortization   5,247   5,203   10,408   10,362  
Income from operations 17,982 17,331 20,398 10,380
Interest and other income, net   450   275   794   752  
Income before tax expense (benefit) 18,432 17,606 21,192 11,132
Income tax expense (benefit)   2,350   5,069   3,453   (330 )
Net income $ 16,082 $ 12,537 $ 17,739 $ 11,462  
 
Net income per common share
Basic 0.39 0.31 0.44 0.29
Diluted 0.39 0.31 0.43 0.28
 
Weighted average shares outstanding
Basic 40,739 40,140 40,655 39,962
Diluted 40,969 40,421 40,934 40,248
 
 
TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
         
 
June 27, 2014 December 27, 2013
Assets
Current assets:
Cash and cash equivalents $ 162,849 $ 122,003
Marketable securities 4,997 14,745
Accounts receivable, net 208,413 199,519
Other current assets   18,320   20,191
Total current assets 394,579 356,458
Property and equipment, net 53,181 54,473
Restricted cash and investments 145,908 154,558
Other assets, net   153,087   153,972
Total assets $ 746,755 $ 719,461
 
Liabilities and shareholders' equity
Current liabilities $ 125,275 $ 121,409
Long-term liabilities   205,114   204,692
Total liabilities 330,389 326,101
Shareholders' equity   416,366   393,360
Total liabilities and shareholders' equity $ 746,755 $ 719,461
 
 
TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
         
26 Weeks Ended
June 27, 2014 June 28, 2013
Cash flows from operating activities
Net income $ 17,739 $ 11,462

Adjustments to reconcile net income to net cash from operating activities

Depreciation and amortization 10,408 10,362
Provision for doubtful accounts 6,286 6,415
Stock-based compensation 4,987 4,594
Deferred income taxes (4,088 ) (2,564 )
Other operating activities (54 ) 848
 
Changes in operating assets and liabilities, net of acquisition

 

Accounts receivable (15,180 ) (8,528 )
Income taxes 3,647 (143 )
Other assets (66 ) 341
Accounts payable and other accrued expenses (566 ) (7,496 )
Accrued wages and benefits 5,291 7,053
Workers' compensation claims reserve (792 ) 1,583
Other liabilities   1,310     186  
Net cash provided by operating activities   28,922     24,113  
 
Cash flows from investing activities
Capital expenditures (6,113 ) (7,200 )
Acquisition of business, net of cash acquired — (54,873 )
Purchases of marketable securities (25,057 ) (19,915 )
Sales and maturities of marketable securities 36,175 -
Change in restricted cash and cash equivalents 19,007 3,709
Purchases of restricted investments (18,196 ) (6,789 )
Maturities of restricted investments   7,202     10,871  
Net cash provided by (used in) investing activities   13,018     (74,197 )
 
Cash flows from financing activities

Net proceeds from stock option exercises and employee stock purchase plans

1,349 6,023

Common stock repurchases for taxes upon vesting of restricted stock

(2,665

)

(2,182

)

Proceeds from note payable — 34,000
Payments on debt and other liabilities (1,133 ) (1,115 )
Other   1,269     478  
 
Net cash provided by (used in) financing activities   (1,180 )   37,204  
 
Effect of exchange rates on cash   86     (544 )
 
Net change in cash and cash equivalents 40,846 (13,424 )
 
CASH AND CASH EQUIVALENTS, beginning of period   122,003     129,513  
CASH AND CASH EQUIVALENTS, end of period $ 162,849   $ 116,089  
 
 
TRUEBLUE, INC.
NET INCOME TO EBITDA AND ADJUSTED EBITDA RECONCILIATION
(Unaudited, in thousands)
         
13 Weeks Ended
June 27, 2014 June 28, 2013
 
Net income $ 16,082 $ 12,537
Income tax expense 2,350 5,069
Interest and other income, net (450 ) (275 )
Depreciation and amortization   5,247     5,203  
EBITDA (1) $ 23,229 $ 22,534
Non-recurring acquisition costs   1,987     1,760  
Adjusted EBITDA (1) $ 25,216   $ 24,294  
 

(1) 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 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.