tbi-20220925

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 25, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-14543

____________________________________

TrueBlue, Inc.

(Exact name of registrant as specified in its charter)

______________________________________

Washington

91-1287341

(State of incorporation)

(I.R.S. employer identification no.)

1015 A Street, Tacoma, Washington 98402

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (253) 383-9101

______________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, no par value	TBI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 18, 2022, there were 32,718,640 shares of the registrant’s common stock outstanding.

TrueBlue, Inc.

Table of Contents


		Page
PART I. FINANCIAL INFORMATION
Item 1.	Consolidated financial statements (unaudited)	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations and Comprehensive Income	4
	Consolidated Statements of Cash Flows	5
	Notes to consolidated financial statements	6
Item 2.	Management’s discussion and analysis of financial condition and results of operations	15
Item 3.	Quantitative and qualitative disclosures about market risk	25
Item 4.	Controls and procedures	25

PART II. OTHER INFORMATION
Item 1.	Legal proceedings	26
Item 1A.	Risk factors	26
Item 2.	Unregistered sales of equity securities and use of proceeds	34
Item 3.	Defaults upon senior securities	34
Item 4.	Mine safety disclosures	34
Item 5.	Other information	35
Item 6.	Index to exhibits	35

	Signatures	36

Page - 2

Table of Contents

PART I. FINANCIAL INFORMATION


Item 1.			CONSOLIDATED FINANCIAL STATEMENTS

TRUEBLUE, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)


(in thousands, except par value data)	September 25, 2022		December 26, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	43,779	$	49,896
Accounts receivable, net of allowance of $3,286 and $6,687	328,763		353,882
Prepaid expenses and other current assets	26,464		31,614
Income tax receivable	9,624		9,681
Total current assets	408,630		445,073
Property and equipment, net	92,324		88,090
Restricted cash and investments	208,659		221,026
Deferred income taxes, net	27,614		29,330
Goodwill	93,441		94,538
Intangible assets, net	17,300		22,211
Operating lease right-of-use assets, net	51,338		55,197
Workers’ compensation claims receivable, net	64,768		61,386
Other assets, net	18,707		16,375
Total assets	$	982,781	$	1,033,226
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and other accrued expenses	$	53,838	$	77,172
Accrued wages and benefits	89,899		100,173
Income tax payable	2,017		—
Current portion of workers’ compensation claims reserve	55,574		61,596

Current operating lease liabilities	11,995		12,097
Other current liabilities	9,747		7,508
Total current liabilities	223,070		258,546
Workers’ compensation claims reserve, less current portion	196,315		194,598


Long-term deferred compensation liabilities	23,888		28,806
Long-term operating lease liabilities	51,074		54,927

Other long-term liabilities	1,620		3,282
Total liabilities	495,967		540,159

Commitments and contingencies (Note 7)

Shareholders’ equity:
Preferred stock, $0.131 par value, 20,000 shares authorized; No shares issued and outstanding	—		—
Common stock, no par value, 100,000 shares authorized; 32,693 and 34,861 shares issued and outstanding	1		1
Accumulated other comprehensive loss	(20,397)		(15,747)
Retained earnings	507,210		508,813
Total shareholders’ equity	486,814		493,067
Total liabilities and shareholders’ equity	$	982,781	$	1,033,226

See accompanying notes to consolidated financial statements

Page - 3

Table of Contents

TRUEBLUE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(unaudited)


	Thirteen weeks ended				Thirty-nine weeks ended
(in thousands, except per share data)	September 25, 2022		September 26, 2021		September 25, 2022		September 26, 2021
Revenue from services	$	575,721	$	577,031	$	1,696,489	$	1,551,692
Cost of services	419,802		430,529		1,242,194		1,158,148
Gross profit	155,919		146,502		454,295		393,544
Selling, general and administrative expense	124,351		118,748		366,953		326,657
Depreciation and amortization	7,483		6,426		22,015		20,405

Income from operations	24,085		21,328		65,327		46,482


Interest expense and other income, net	703		581		1,098		1,880
Income before tax expense	24,788		21,909		66,425		48,362
Income tax expense	4,092		3,267		11,197		6,938
Net income	$	20,696	$	18,642	$	55,228	$	41,424

Net income per common share:
Basic	$	0.64	$	0.53	$	1.67	$	1.19
Diluted	$	0.63	$	0.53	$	1.65	$	1.17

Weighted average shares outstanding:
Basic	32,434		34,873		33,023		34,788
Diluted	32,818		35,475		33,511		35,255

Other comprehensive income (loss):
Foreign currency translation adjustment	$	(3,053)	$	(1,296)	$	(4,650)	$	(806)
Comprehensive income	$	17,643	$	17,346	$	50,578	$	40,618

See accompanying notes to consolidated financial statements

Page - 4

Table of Contents

TRUEBLUE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Thirty-nine weeks ended
(in thousands)	September 25, 2022		September 26, 2021
Cash flows from operating activities:
Net income	$	55,228	$	41,424
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	22,015		20,405

Provision for credit losses	3,352		2,881
Stock-based compensation	7,675		10,149
Deferred income taxes	2,046		445
Non-cash lease expense	9,694		11,173
Other operating activities	8,772		(1,484)
Changes in operating assets and liabilities:
Accounts receivable	21,388		(53,626)
Income taxes receivable and payable	186		963
Operating lease right-of-use asset	—		7,150
Other assets	(564)		(7,003)
Accounts payable and other accrued expenses	(22,935)		3,212
Accrued wages and benefits	(10,277)		24,278
Deferred employer payroll taxes	—		(57,066)
Workers’ compensation claims reserve	(4,304)		3,075
Operating lease liabilities	(9,673)		(10,017)
Other liabilities	(2,529)		4,598
Net cash provided by operating activities	80,074		557
Cash flows from investing activities:
Capital expenditures	(22,685)		(28,772)




Purchases of restricted available-for-sale investments	—		(29)
Sales of restricted available-for-sale investments	—		793
Purchases of restricted held-to-maturity investments	(4,950)		—
Maturities of restricted held-to-maturity investments	23,697		18,346

Net cash used in investing activities	(3,938)		(9,662)
Cash flows from financing activities:
Purchases and retirement of common stock	(60,939)		—
Net proceeds from employee stock purchase plans	780		754
Common stock repurchases for taxes upon vesting of restricted stock	(4,347)		(3,035)



Other	(203)

SEC Form 10-Q filed by TrueBlue Inc.