Attached files
| file | filename |
|---|---|
| EX-99.3 - TRUEBLUE INVESTOR PRESENTATION - TrueBlue, Inc. | investorroadshowpresenta.htm |
| EX-99.2 - TRUEBLUE Q4 2016 EARNINGS RELEASE PRESENTATION - TrueBlue, Inc. | earningspresentationq420.htm |
| 8-K - TRUEBLUE FORM 8-K - TrueBlue, Inc. | tbi2016q4pressrelease.htm |
TRUEBLUE REPORTS FOURTH QUARTER 2016 RESULTS
TACOMA, WA-Feb. 8, 2017--TrueBlue, Inc. (NYSE:TBI) announced today fourth quarter 2016 results.
Revenue for the fiscal 14-week1 fourth quarter of 2016 was $735 million, a decrease of 9% compared to the fiscal 13-week fourth quarter of 2015. Net Income per diluted share was $0.43 for the fiscal 14-week1 fourth quarter of 2016 compared to $0.67 per diluted share for the fiscal 13-week fourth quarter of 2015.
On a comparable2 13-week basis, revenue for the fourth quarter of 2016 was $701 million, a decrease of 14%, or an increase of 5% excluding the company’s largest customer. On a comparable 13-week basis, adjusted net income per diluted share3 was $0.58, or $0.57 excluding the company’s largest customer, compared to $0.67 per diluted share for the fiscal fourth quarter of 2015, or $0.48 excluding the company’s largest customer.
"Revenue on a comparable 13-week basis was up five percent excluding our largest customer,” TrueBlue CEO Steve Cooper said. “We remain highly focused on profit margins through disciplined pricing, ongoing cost containment, and capturing synergies with our acquired businesses.
“Our recent acquisitions have accelerated our growth strategy. The recruitment process outsourcing business acquired from Aon Hewitt makes PeopleScout the RPO leader in the U.S., as well as a global leader, positioning us for continued long-term success in this fast-growing, high-margin business. The SIMOS acquisition enhances our PeopleManagement business with productivity-based pricing that is highly appealing to customers."
Cooper continued, “Along with our recent branding changes, these acquisitions position us better than ever to respond to a broad assortment of customer needs, whether it’s on-demand staffing from PeopleReady, strategic workforce management solutions from PeopleManagement, RPO from PeopleScout, or a total talent solution.”
2017 Outlook
The company estimates revenue for the fiscal first quarter of 2017 will range from $560 million to $575 million. It also expects net income (loss) per diluted share will range from $(0.01) to $0.04 or $0.09 to $0.14 on an adjusted net income per diluted share basis.
Management will discuss fourth quarter and full-year 2016 results on a webcast at 2 p.m. PT (5 p.m. ET), today, Wednesday, Feb. 8. The webcast can be accessed on TrueBlue’s web site: www.trueblue.com.
About TrueBlue:
TrueBlue (NYSE: TBI) is a leading provider of specialized workforce solutions that help clients create growth, improve efficiency and increase reliability. TrueBlue connected over 815,000 people with work during 2016 to clients in a wide variety of industries through its staffing, on-site workforce management and recruitment process outsourcing services. Learn more at www.trueblue.com.
1As previously communicated, the company’s fiscal fourth quarter includes a 14th week and the fiscal year includes a 53rd week, and the week-ending date has been moved from Friday to the following Sunday, Jan. 1, 2017, to better align with the work week of our customers. To facilitate comparison, the company is providing 14-week GAAP and 13-week comparable revenue results.
2 Due to a previously announced reduction in the scope of services with its largest customer, the company is providing results on a comparable 13-week and 52-week basis excluding the results of this customer to help investors assess the company's underlying results. See the financial statements accompanying the release and the company’s website for more information on non-GAAP terms.
3 See the financial statements accompanying the release and the company’s website for more information on non-GAAP terms.
Forward-looking Statements
This release 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. We presently consider the following to be among important factors that could cause actual results to differ materially from the company’s expectations: (1) national and global economic conditions, (2) our ability to attract and retain customers, (3) our ability to maintain profit margins, (4) new laws and regulations that could have a material effect on our operations or financial results, (5) our ability to successfully complete and integrate acquisitions. Other information regarding factors that could materially affect our results is included in our 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 on our website at www.trueblue.com under the Investor Relations section or the SEC's website at www.sec.gov. We assume no duty to update or revise any forward-looking statements contained in this release.
In addition, we use several non-GAAP financial measures when presenting our financial results in this release. Please refer to the reconciliations between our GAAP and non-GAAP financial measures included below and on our website at www.trueblue.com under the Investor Relations section for a complete perspective on both current and historical periods. Any comparisons made to other periods today are based on a comparison to the same period in the prior year unless otherwise stated.
Contact:
Derrek Gafford, EVP & CFO
253-680-8214
TRUEBLUE, INC.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
Q4 2016 | Fiscal 2016 | Q4 2015 | Fiscal 2015 | ||||||||||||
14 Weeks Ended (1) | 13 Weeks Ended | 53 Weeks Ended (1) | 52 Weeks Ended | ||||||||||||
Jan 1, 2017 | Dec 25, 2015 | Jan 1, 2017 | Dec 25, 2015 | ||||||||||||
Revenue from services | $ | 734,951 | $ | 810,733 | $ | 2,750,640 | $ | 2,695,680 | |||||||
Cost of services | 554,064 | 625,729 | 2,070,922 | 2,060,007 | |||||||||||
Gross profit | 180,887 | 185,004 | 679,718 | 635,673 | |||||||||||
Selling, general and administrative expense | 145,387 | 141,419 | 546,477 | 495,988 | |||||||||||
Depreciation and amortization | 12,019 | 10,428 | 46,692 | 41,843 | |||||||||||
Goodwill and intangible asset impairment charge (2) | — | — | 103,544 | — | |||||||||||
Income (loss) from operations | 23,481 | 33,157 | (16,995 | ) | 97,842 | ||||||||||
Interest and other expense, net | (572 | ) | (293 | ) | (3,345 | ) | (1,395 | ) | |||||||
Income (loss) before tax expense | 22,909 | 32,864 | (20,340 | ) | 96,447 | ||||||||||
Income tax expense (benefit) | 4,822 | 4,696 | (5,089 | ) | 25,200 | ||||||||||
Net income (loss) | $ | 18,087 | $ | 28,168 | $ | (15,251 | ) | $ | 71,247 | ||||||
Net income (loss) per common share: | |||||||||||||||
Basic | $ | 0.43 | $ | 0.68 | $ | (0.37 | ) | $ | 1.73 | ||||||
Diluted | $ | 0.43 | $ | 0.67 | $ | (0.37 | ) | $ | 1.71 | ||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 41,638 | 41,337 | 41,648 | 41,226 | |||||||||||
Diluted | 41,980 | 41,748 | 41,648 | 41,622 | |||||||||||
(1) | The company changed its fiscal period end day from the last Friday in December to the Sunday closest to the last day of December. Our fiscal quarters also end on Sunday. This change was effective with our fourth quarter ended January 1, 2017. In fiscal years consisting of 53 weeks, the final quarter will consist of 14 weeks while in 52-week years all quarters will consist of 13 weeks. |
(2) | The Goodwill and intangible asset impairment charge for the 53-weeks ended January 1, 2017, included the write-off of the CLP and Spartan reporting unit trade names/trademarks of $4.3 million due to the re-branding to PeopleReady during the third quarter of 2016, and $99.3 million of impairment charges recorded in the second quarter of 2016 relating to our Staff Management | SMX, hrX, and PlaneTechs reporting units. |
TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
Fiscal 2016 | Fiscal 2015 | ||||||
Jan 1, 2017 | Dec 25, 2015 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 34,970 | $ | 29,781 | |||
Accounts receivable, net | 352,606 | 461,476 | |||||
Other current assets | 40,227 | 51,708 | |||||
Total current assets | 427,803 | 542,965 | |||||
Property and equipment, net | 63,998 | 57,530 | |||||
Restricted cash and investments | 231,193 | 188,412 | |||||
Goodwill and intangible assets, net | 349,894 | 422,354 | |||||
Other assets, net | 57,557 | 48,181 | |||||
Total assets | $ | 1,130,445 | $ | 1,259,442 | |||
Liabilities and shareholders' equity | |||||||
Current liabilities | $ | 251,135 | $ | 227,976 | |||
Long-term debt, less current portion | 135,362 | 243,397 | |||||
Other long-term liabilities | 218,769 | 252,496 | |||||
Total liabilities | 605,266 | 723,869 | |||||
Shareholders' equity | 525,179 | 535,573 | |||||
Total liabilities and shareholders' equity | $ | 1,130,445 | $ | 1,259,442 | |||
TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Fiscal 2016 | Fiscal 2015 | ||||||
53 Weeks Ended | 52 Weeks Ended | ||||||
Jan 1, 2017 | Dec 25, 2015 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (15,251 | ) | $ | 71,247 | ||
Adjustments to reconcile net income (loss) to net cash from operating activities: | |||||||
Depreciation and amortization | 46,692 | 41,843 | |||||
Goodwill and intangible asset impairment charges | 103,544 | — | |||||
Provision for doubtful accounts | 8,308 | 7,132 | |||||
Stock-based compensation | 9,363 | 11,103 | |||||
Deferred income taxes | (25,355 | ) | 5,176 | ||||
Other operating activities | 7,910 | 446 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 112,785 | (89,474 | ) | ||||
Income tax receivable | 9,450 | (16,678 | ) | ||||
Other assets | 470 | (6,398 | ) | ||||
Accounts payable and other accrued expenses | (4,101 | ) | 23,261 | ||||
Accrued wages and benefits | (7,313 | ) | 12,203 | ||||
Workers’ compensation claims reserve | 11,070 | 14,736 | |||||
Other liabilities | 4,182 | (2,525 | ) | ||||
Net cash provided by operating activities | 261,754 | 72,072 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (29,042 | ) | (18,394 | ) | |||
Acquisitions of businesses | (72,476 | ) | (67,500 | ) | |||
Sales and maturities of marketable securities | — | 1,500 | |||||
Change in restricted cash and cash equivalents | (19,773 | ) | 18,374 | ||||
Purchases of restricted investments | (37,173 | ) | (51,516 | ) | |||
Maturities of restricted investments | 15,248 | 12,510 | |||||
Net cash used in investing activities | (143,216 | ) | (105,026 | ) | |||
Cash flows from financing activities: | |||||||
Purchases and retirement of common stock | (5,748 | ) | — | ||||
Net proceeds from stock option exercises and employee stock purchase plans | 1,542 | 1,563 | |||||
Common stock repurchases for taxes upon vesting of restricted stock | (2,851 | ) | (3,869 | ) | |||
Net change in revolving credit facility | (105,579 | ) | 46,091 | ||||
Payments on debt | (2,456 | ) | (2,078 | ) | |||
Other | (29 | ) | 1,079 | ||||
Net cash provided by (used in) financing activities | (115,121 | ) | 42,786 | ||||
Effect of exchange rate changes on cash and cash equivalents | 1,772 | 283 | |||||
Net change in cash and cash equivalents | 5,189 | 10,115 | |||||
CASH AND CASH EQUIVALENTS, beginning of period | 29,781 | 19,666 | |||||
CASH AND CASH EQUIVALENTS, end of period | $ | 34,970 | $ | 29,781 | |||
TRUEBLUE, INC.
NON-GAAP RECONCILIATIONS
(Unaudited, in thousands, except for per share data)
1. | COMPARABLE 13 AND 52 WEEK PERIODS |
As previously communicated, the company’s fiscal fourth quarter includes a 14th week and the fiscal year includes a 53rd week, and the week-ending date has been moved from Friday to the following Sunday, Jan. 1, 2017, to better align with the work week of our customers. To facilitate comparison, the company is providing 13-week and 52-week comparable operating results. The impact of the added work days is an operating loss of approximately $1 million, as the final week of December is one of the lowest volume weeks of the year and the associated gross profit is more than offset by operating expenses.
2016 | |||||||
13 Weeks Ended | 52 Weeks Ended | ||||||
Dec 23, 2016 | Dec 23, 2016 | ||||||
Revenue from services | $ | 700,819 | $ | 2,716,508 | |||
Cost of services | 526,858 | 2,043,716 | |||||
Gross profit | 173,961 | 672,792 | |||||
Selling, general and administrative expense | 137,682 | 538,772 | |||||
Depreciation and amortization | 11,160 | 45,833 | |||||
Goodwill and intangible asset impairment charge (5) | — | 103,544 | |||||
Income (loss) from operations | 25,119 | (15,357 | ) | ||||
Interest and other expense, net | (531 | ) | (3,304 | ) | |||
Income (loss) before tax expense | 24,588 | (18,661 | ) | ||||
Income tax expense (benefit) | 5,242 | (4,669 | ) | ||||
Net income (loss) | $ | 19,346 | $ | (13,992 | ) | ||
Net income (loss) per common share: | |||||||
Basic | $ | 0.46 | $ | (0.34 | ) | ||
Diluted | $ | 0.46 | $ | (0.34 | ) | ||
Weighted average shares outstanding: | |||||||
Basic | 41,638 | 41,648 | |||||
Diluted | 41,980 | 41,648 | |||||
2. | RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE ON A COMPARABLE BASIS |
Adjusted net income and Adjusted net income per diluted share are key measures used by management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. Accordingly, the schedule below reconciles the 13-week and 52-week net income (loss) to adjusted net income and adjusted net income per diluted share on a basis comparable to prior year periods.
Q4 2016 | 2016 | Q1 2017 Outlook* | |||||||||||||
13 Weeks Ended | 52 Weeks Ended | 13 Weeks Ended | |||||||||||||
Dec 23, 2016 | Dec 23, 2016 | Apr 2, 2017 | |||||||||||||
Net income (loss) | $ | 19,346 | $ | (13,992 | ) | $ | (400 | ) | — | $ | 1,800 | ||||
Acquisition/integration and other costs (1) | 4,002 | 12,223 | — | ||||||||||||
Goodwill and intangible asset impairment charge (5) | — | 103,544 | — | ||||||||||||
Amortization of intangible assets of acquired businesses (2) | 5,934 | 26,612 | 5,500 | ||||||||||||
Tax effective of adjustments to net income (loss) (3) | (2,782 | ) | (39,866 | ) | (1,500) | ||||||||||
Adjust income taxes to normalized effective rate (4) | (1,643 | ) | 556 | — | |||||||||||
Adjusted net income (7) | $ | 24,857 | $ | 89,077 | $ | 3,600 | — | $ | 5,800 | ||||||
Adjusted net income, per diluted share (7) | $ | 0.58 | $ | 2.12 | $ | 0.09 | — | $ | 0.14 | ||||||
Diluted weighted average shares outstanding | 41,980 | 41,968 | 42,400 | ||||||||||||
* Totals may not sum due to rounding
3. | RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA |
EBITDA and Adjusted EBITDA are key measures used by management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. Accordingly, the schedule below reconciles the 13-week and 52-week net income (loss) to EBITDA and Adjusted EBITDA on a basis comparable to prior year periods.
Q4 2016 | 2016 | Q1 2017 Outlook* | ||||||||||||||
13 Weeks Ended | 52 Weeks Ended | 13 Weeks Ended | ||||||||||||||
Dec 23, 2016 | Dec 23, 2016 | Apr 2, 2017 | ||||||||||||||
Net income (loss) | $ | 19,346 | $ | (13,992 | ) | $ | (400 | ) | — | $ | 1,800 | |||||
Income tax expense (benefit) | 5,242 | (4,669 | ) | (100 | ) | — | 500 | |||||||||
Interest expense, net | 531 | 3,304 | 100 | |||||||||||||
Depreciation and amortization | 11,160 | 45,833 | 12,000 | |||||||||||||
EBITDA (8) | 36,279 | 30,476 | 11,600 | — | 14,400 | |||||||||||
Acquisition/integration and other costs (1) | 4,002 | — | 12,223 | — | ||||||||||||
Goodwill and intangible asset impairment charge (5) | — | 103,544 | — | |||||||||||||
Work Opportunity Tax Credit processing fees (6) | 276 | 1,858 | 500 | |||||||||||||
Adjusted EBITDA (8) | $ | 40,557 | $ | 148,101 | $ | 12,000 | — | $ | 15,000 | |||||||
* Totals may not sum due to rounding
4. | RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE EXCLUDING THE COMPANY'S LARGEST CUSTOMER |
Due to a previously announced reduction in the scope of services with its largest customer, the company is providing results on a comparable 13-week and 52-week basis excluding the results of this customer to help investors assess the company's underlying results with prior periods.
Q4 2016 | Q4 2015 | Fiscal 2016 | Fiscal 2015 | ||||||||||||
13 Weeks Ended | 52 Weeks Ended | ||||||||||||||
Dec 23, 2016 | Dec 25, 2015 | Dec 23, 2016 | Dec 25, 2015 | ||||||||||||
Net income (loss) | $ | 19,346 | $ | 28,168 | $ | (13,992 | ) | $ | 71,247 | ||||||
Acquisition/integration and other costs (1) | 4,002 | 1,348 | 12,223 | 5,135 | |||||||||||
Goodwill and intangible asset impairment charge (5) | — | — | 103,544 | — | |||||||||||
Amortization of intangible assets of acquired businesses (2) | 5,934 | 5,585 | 26,612 | 19,903 | |||||||||||
Largest customer income before taxes (9) | (705 | ) | (11,393 | ) | (5,040 | ) | (24,016 | ) | |||||||
Tax effective of adjustments to net income (3) excluding largest customer | (2,585 | ) | 1,249 | (38,455 | ) | (286 | ) | ||||||||
Adjust income taxes to normalized effective rate (4) | (1,643 | ) | (4,506 | ) | 556 | (1,805 | ) | ||||||||
Adjusted net income (7) on a 13-week comparable basis, excluding largest customer | $ | 24,349 | $ | 20,451 | $ | 85,448 | $ | 70,178 | |||||||
Adjusted net income, per diluted share (7), excluding largest customer | $ | 0.57 | $ | 0.48 | $ | 2.03 | $ | 1.68 | |||||||
Diluted weighted average shares outstanding | 41,980 | 41,748 | 41,968 | 41,622 | |||||||||||
(1) | Acquisition/integration relate to the acquisition of the recruitment process outsourcing business of Aon Hewitt, which was completed on January 4, 2016, and the acquisition of SIMOS, which was completed on December 1, 2015. In addition, other charges include an increase in the SIMOS earn-out of $1.3 million, costs associated with the exit from the Amazon delivery business of $0.8 million in the fourth quarter of 2016 and $1.8 million in the third quarter of 2016, and branch signage write-offs of $1.6 million due to our re-branding to PeopleReady in the third quarter of 2016. |
(2) | Amortization of intangible assets of acquired businesses as well as accretion expense related to the SIMOS acquisition earn-out. |
(3) | Total tax effect of each of the adjustments to U.S. GAAP Net income (loss) per diluted share using the ongoing rate of 28%. |
(4) | Adjusts the effective income tax rate to the expected ongoing rate of 28%. |
(5) | The Goodwill and intangible asset impairment charge for the 53-weeks ended January 1, 2017, included the write-off of the CLP and Spartan reporting unit trade names/trademarks of $4.3 million due to the re-branding to PeopleReady during the third quarter of 2016, and $99.3 million of impairment charges recorded in the second quarter of 2016 relating to our Staff Management | SMX, hrX, and PlaneTechs reporting units. |
(6) | 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 and reduce our income taxes. |
(7) | Adjusted net income and Adjusted net income per diluted share are non-GAAP financial measures, which exclude from Net income (loss) and Net income (loss) on a per diluted share basis, costs related to acquisition/integration and other costs, goodwill and intangible asset impairment charges, amortization of intangibles of acquired businesses as well as accretion expense related to acquisition earn-out, tax effect of each adjustment to U.S. GAAP Net income (loss), and adjusts income taxes to the expected ongoing effective tax rate. Adjusted net income and Adjusted net income per diluted share are key measures used by management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. 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 or net income per diluted share in the Consolidated Statements of Operations in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies. Adjusted net income and net income per diluted share previously excluded the third-party processing fees associated with generating Work Opportunity Tax Credits. |
(8) | EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA excludes interest, taxes, depreciation and amortization. Adjusted EBITDA further excludes from EBITDA costs related to acquisition/integration and other costs, goodwill and intangible asset impairment charges, and Work Opportunity Tax Credit third-party processing fees. EBITDA and Adjusted EBITDA are key measures used by management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. 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 U.S. GAAP, and may not be comparable to similarly titled measures of other companies. |
(9) | The impact of our largest customer. |
TRUEBLUE, INC.
NON-GAAP RECONCILIATIONS
(Unaudited, in thousands, except for per share data)
1. | RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE |
Q4 | Fiscal Year | ||||||||||||||
14 Weeks Ended | 13 Weeks Ended | 53 Weeks Ended | 52 Weeks Ended | ||||||||||||
Jan 1, 2017 | Dec 25, 2015 | Jan 1, 2017 | Dec 25, 2015 | ||||||||||||
Net income (loss) | $ | 18,087 | $ | 28,168 | $ | (15,251 | ) | $ | 71,247 | ||||||
Acquisition/integration and other costs (1) | 4,002 | 1,348 | 12,223 | 5,135 | |||||||||||
Goodwill and intangible asset impairment charge (5) | — | — | 103,544 | — | |||||||||||
Amortization of intangible assets of acquired businesses (2) | 6,391 | 5,585 | 27,069 | 19,903 | |||||||||||
Tax effective of adjustments to net income (loss) (3) | (2,910 | ) | (1,941 | ) | (39,994 | ) | (7,011 | ) | |||||||
Adjust income taxes to normalized effective rate (4) | (1,593 | ) | (4,506 | ) | 606 | (1,805 | ) | ||||||||
Adjusted net income (7) | $ | 23,977 | $ | 28,654 | $ | 88,197 | $ | 87,469 | |||||||
Adjusted net income, per diluted share (7) | $ | 0.56 | $ | 0.67 | $ | 2.10 | $ | 2.10 | |||||||
Diluted weighted average shares outstanding | 41,980 | 41,748 | 41,968 | 41,622 | |||||||||||
2. | RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA |
Q4 | Fiscal Year | |||||||||||||||
14 Weeks Ended | 13 Weeks Ended | 53 Weeks Ended | 52 Weeks Ended | |||||||||||||
Jan 1, 2017 | Dec 25, 2015 | Jan 1, 2017 | Dec 25, 2015 | |||||||||||||
Net income (loss) | $ | 18,087 | $ | 28,168 | $ | (15,251 | ) | $ | 71,247 | |||||||
Income tax expense (benefit) | 4,822 | 4,696 | (5,089 | ) | 25,200 | |||||||||||
Interest expense, net | 572 | 293 | 3,345 | 1,395 | ||||||||||||
Depreciation and amortization | 12,019 | 10,428 | 46,692 | 41,843 | ||||||||||||
EBITDA (8) | 35,500 | 43,585 | 29,697 | 139,685 | ||||||||||||
Acquisition/integration and other costs (1) | 4,002 | — | 1,348 | 12,223 | 5,135 | |||||||||||
Goodwill and intangible asset impairment charge (5) | — | — | 103,544 | — | ||||||||||||
Work Opportunity Tax Credit processing fees (6) | 276 | 1,410 | 1,858 | 2,352 | ||||||||||||
Adjusted EBITDA (8) | $ | 39,778 | $ | 46,343 | $ | 147,322 | $ | 147,172 | ||||||||
(1) | Acquisition/integration relate to the acquisition of the recruitment process outsourcing business of Aon Hewitt, which was completed on January 4, 2016, and the acquisition of SIMOS, which was completed on December 1, 2015. In addition, other charges include; an increase in the SIMOS earn-out of $1.3 million, costs associated with the exit from the Amazon delivery business of $0.8 million in the fourth quarter of 2016 and $1.8 million in the third quarter of 2016, and branch signage write-offs of $1.6 million due to our re-branding to PeopleReady in the third quarter of 2016. |
(2) | Amortization of intangible assets of acquired businesses as well as accretion expense related to the SIMOS acquisition earn-out. |
(3) | Total tax effect of each of the adjustments to U.S. GAAP Net income (loss) per diluted share using the ongoing rate of 28%. |
(4) | Adjusts the effective income tax rate to the expected ongoing rate of 28%. |
(5) | The Goodwill and intangible asset impairment charge for the 53-weeks ended January 1, 2017, included the write-off of the CLP and Spartan reporting unit trade names/trademarks of $4.3 million due to the re-branding to PeopleReady during the third quarter of 2016, and $99.3 million of impairment charges recorded in the second quarter of 2016 relating to our Staff Management | SMX, hrX, and PlaneTechs reporting units. |
(6) | 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 and reduce our income taxes. |
(7) | Adjusted net income and Adjusted net income per diluted share are non-GAAP financial measures, which exclude from Net income (loss) and Net income (loss) on a per diluted share basis, costs related to acquisition/integration and other costs, goodwill and intangible asset impairment charges, amortization of intangibles of acquired businesses as well as accretion expense related to acquisition earn-out, tax effect of each adjustment to U.S. GAAP Net income (loss), and adjusts income taxes to the expected ongoing effective tax rate. Adjusted net income and Adjusted net income per diluted share are key measures used by management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. 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 or net income per diluted share in the Consolidated Statements of Operations in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies. Adjusted net income and net income per diluted share previously excluded the third-party processing fees associated with generating Work Opportunity Tax Credits. |
(8) | EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA excludes interest, taxes, depreciation and amortization. Adjusted EBITDA further excludes from EBITDA costs related to acquisition/integration and other costs, goodwill and intangible asset impairment charges, and Work Opportunity Tax Credit third-party processing fees. EBITDA and Adjusted EBITDA are key measures used by management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. 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 U.S. GAAP, and may not be comparable to similarly titled measures of other companies. |
TRUEBLUE, INC.
SEGMENT DATA
(Unaudited, in thousands)
Q4 2016 | Fiscal 2016 | Q4 2015 | Fiscal 2015 | ||||||||||||
14 Weeks Ended | 13 Weeks Ended | 53 Weeks Ended | 52 Weeks Ended | ||||||||||||
Jan 1, 2017 | Dec 25, 2015 | Jan 1, 2017 | Dec 25, 2015 | ||||||||||||
Revenue from services | |||||||||||||||
PeopleReady | $ | 431,388 | $ | 436,044 | $ | 1,629,455 | $ | 1,625,817 | |||||||
PeopleManagement | 257,848 | 347,688 | 940,453 | 965,331 | |||||||||||
PeopleScout | 45,715 | 27,001 | 180,732 | 104,532 | |||||||||||
Total Company | 734,951 | 810,733 | 2,750,640 | 2,695,680 | |||||||||||
Adjusted EBITDA (1) | |||||||||||||||
PeopleReady | $ | 26,348 | $ | 32,753 | $ | 109,063 | $ | 126,251 | |||||||
PeopleManagement | 11,903 | 19,334 | 27,557 | 36,512 | |||||||||||
PeopleScout | 6,589 | 279 | 34,285 | 9,324 | |||||||||||
44,840 | 52,366 | 170,905 | 172,087 | ||||||||||||
Corporate unallocated expense (2) | (5,062 | ) | (6,023 | ) | (23,583 | ) | (24,915 | ) | |||||||
Total company Adjusted EBITDA | 39,778 | 46,343 | 147,322 | 147,172 | |||||||||||
Acquisition/integration and other costs (3) | (4,002 | ) | (1,348 | ) | (12,223 | ) | (5,135 | ) | |||||||
Goodwill and intangible asset impairment charge (4) | — | — | (103,544 | ) | — | ||||||||||
Work Opportunity Tax Credit processing fees (5) | (276 | ) | (1,410 | ) | (1,858 | ) | (2,352 | ) | |||||||
EBITDA (1) | 35,500 | 43,585 | 29,697 | 139,685 | |||||||||||
Depreciation and amortization | (12,019 | ) | (10,428 | ) | (46,692 | ) | (41,843 | ) | |||||||
Interest and other expense, net | (572 | ) | (293 | ) | (3,345 | ) | (1,395 | ) | |||||||
Income (loss) before tax expense | 22,909 | 32,864 | (20,340 | ) | 96,447 | ||||||||||
Income tax (expense) benefit | (4,822 | ) | (4,696 | ) | 5,089 | (25,200 | ) | ||||||||
Net income (loss) | $ | 18,087 | $ | 28,168 | $ | (15,251 | ) | $ | 71,247 | ||||||
Due to the extra week of results in the fiscal fourth quarter of 2016, the company is also providing results on a 13-week and 52-week basis to enhance comparability with prior year periods, as follows:
U.S. GAAP | Non-GAAP | U.S. GAAP | Non-GAAP | ||||||||||||
Q4 2016 | Fiscal 2016 | ||||||||||||||
14 Weeks Ended | 13 Weeks Ended | 53 Weeks Ended | 52 Weeks Ended | ||||||||||||
Jan 1, 2017 | Dec 23, 2016 | Jan 1, 2017 | Dec 23, 2016 | ||||||||||||
Revenue from services | |||||||||||||||
PeopleReady | $ | 431,388 | $ | 410,936 | $ | 1,629,455 | $ | 1,609,003 | |||||||
PeopleManagement | 257,848 | 246,048 | 940,453 | 928,653 | |||||||||||
PeopleScout | 45,715 | 43,835 | 180,732 | 178,852 | |||||||||||
Total Company | 734,951 | 700,819 | 2,750,640 | 2,716,508 | |||||||||||
Adjusted EBITDA (1) | |||||||||||||||
PeopleReady | $ | 26,348 | $ | 26,013 | $ | 109,063 | $ | 108,728 | |||||||
PeopleManagement | 11,903 | 11,978 | 27,557 | 27,632 | |||||||||||
PeopleScout | 6,589 | 7,128 | 34,285 | 34,824 | |||||||||||
$ | 44,840 | $ | 45,119 | $ | 170,905 | $ | 171,184 | ||||||||
(1) | EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA excludes interest, taxes, depreciation and amortization. Adjusted EBITDA further excludes from EBITDA costs related to acquisition/integration and other costs, goodwill and intangible asset impairment charges, and Work Opportunity Tax Credit third-party processing fees. EBITDA and Adjusted EBITDA are key measures used by management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. 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 U.S. GAAP, and may not be comparable to similarly titled measures of other companies. |
(2) | Beginning in the fourth quarter of 2016, we changed our methodology for allocating certain corporate costs to our segments, which decreased our corporate unallocated expenses. We have adjusted the prior year amounts to reflect this change for consistency purposes. |
(3) | Acquisition/integration relate to the acquisition of the recruitment process outsourcing business of Aon Hewitt, which was completed on January 4, 2016, and the acquisition of SIMOS, which was completed on December 1, 2015. In addition, other charges include; an increase in the SIMOS earn-out of $1.3 million, costs associated with the exit from the Amazon delivery business of $0.8 million in the fourth quarter of 2016 and $1.8 million in the third quarter of 2016, and branch signage write-offs of $1.6 million due to our re-branding to PeopleReady in the third quarter of 2016. |
(4) | The Goodwill and intangible asset impairment charge for the 53-weeks ended January 1, 2017, included the write-off of the CLP and Spartan reporting unit trade names/trademarks of $4.3 million due to the re-branding to PeopleReady during the third quarter of 2016, and $99.3 million of impairment charges recorded in the second quarter of 2016 relating to our Staff Management | SMX, hrX, and PlaneTechs reporting units. |
(5) | 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 and reduce our income taxes. |