tbi-20240630

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: June 30, 2024

☐ 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 July 28, 2024, there were 29,827,117 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 (Loss)	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	19
Item 3.	Quantitative and qualitative disclosures about market risk	30
Item 4.	Controls and procedures	30

PART II. OTHER INFORMATION
Item 1.	Legal proceedings	32
Item 1A.	Risk factors	32
Item 2.	Unregistered sales of equity securities and use of proceeds	32
Item 3.	Defaults upon senior securities	32
Item 4.	Mine safety disclosures	32
Item 5.	Other information	32
Item 6.	Index to exhibits	33

	Signatures	34

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PART I. FINANCIAL INFORMATION


Item 1.			CONSOLIDATED FINANCIAL STATEMENTS

TRUEBLUE, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)


(in thousands, except par value and share count data)	June 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	26,400	$	61,885
Accounts receivable, net of allowance of $849 and $2,005	231,064		252,538
Prepaid expenses and other current assets	32,567		28,894
Income tax receivable	10,613		11,676
Total current assets	300,644		354,993
Property and equipment, net	92,100		104,906
Restricted cash, cash equivalents and investments	183,352		192,985
Deferred income taxes, net	1,381		35,465
Goodwill	24,914		84,114
Intangible assets, net	7,027		10,525
Operating lease right-of-use assets, net	50,241		49,819
Workers’ compensation claims receivable, net	50,367		53,841
Other assets, net	13,667		12,735
Total assets	$	723,693	$	899,383
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and other accrued expenses	$	36,107	$	56,401
Accrued wages and benefits	65,774		80,120
Income tax payable	—		439
Current portion of workers’ compensation claims reserve	38,728		44,866

Current operating lease liabilities	11,976		11,902
Other current liabilities	5,404		10,371
Total current liabilities	157,989		204,099
Workers’ compensation claims reserve, less current portion	139,251		151,649


Long-term deferred compensation liabilities	37,502		35,205
Long-term operating lease liabilities	49,848		49,434

Other long-term liabilities	1,339		1,123
Total liabilities	385,929		441,510

Commitments and contingencies (Note 9)

Shareholders’ equity:
Preferred stock, $0.131 par value, 20,000,000 shares authorized; No shares issued and outstanding	—		—
Common stock, no par value, 100,000,000 shares authorized; 29,959,143 and 31,245,732 shares issued and outstanding	1		1
Accumulated other comprehensive loss	(20,549)		(20,712)
Retained earnings	358,312		478,584
Total shareholders’ equity	337,764		457,873
Total liabilities and shareholders’ equity	$	723,693	$	899,383

See accompanying notes to consolidated financial statements

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TRUEBLUE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(unaudited)


	Thirteen weeks ended				Twenty-six weeks ended
(in thousands, except per share data)	June 30, 2024		June 25, 2023		June 30, 2024		June 25, 2023
Revenue from services	$	396,230	$	475,588	$	799,083	$	940,876
Cost of services	291,807		345,097		595,274		687,272
Gross profit	104,423		130,491		203,809		253,604
Selling, general and administrative expense	97,018		121,282		203,955		243,927
Depreciation and amortization	7,691		6,280		15,649		12,691
Goodwill and intangible asset impairment charge	59,674		9,485		59,674		9,485
Income (loss) from operations	(59,960)		(6,556)		(75,469)		(12,499)


Interest and other income (expense), net	1,741		578		3,340		1,592
Income (loss) before tax expense	(58,219)		(5,978)		(72,129)		(10,907)
Income tax expense	46,491		1,345		34,279		705
Net income (loss)	$	(104,710)	$	(7,323)	$	(106,408)	$	(11,612)

Net income (loss) per common share:
Basic	$	(3.45)	$	(0.24)	$	(3.46)	$	(0.37)
Diluted	$	(3.45)	$	(0.24)	$	(3.46)	$	(0.37)

Weighted average shares outstanding:
Basic	30,349		30,966		30,725		31,629
Diluted	30,349		30,966		30,725		31,629

Other comprehensive income (loss):
Foreign currency translation adjustment	$	221	$	506	$	163	$	253
Comprehensive income (loss)	$	(104,489)	$	(6,817)	$	(106,245)	$	(11,359)

See accompanying notes to consolidated financial statements

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TRUEBLUE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Twenty-six weeks ended
(in thousands)	June 30, 2024		June 25, 2023
Cash flows from operating activities:
Net income (loss)	$	(106,408)	$	(11,612)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization	15,649		12,691
Goodwill and intangible asset impairment charge	59,674		9,485
Provision for credit losses	630		2,408
Stock-based compensation	4,844		5,294
Deferred income taxes	33,997		(22)
Non-cash lease expense	6,200		6,249
Other operating activities	(3,118)		(1,099)
Changes in operating assets and liabilities:
Accounts receivable	21,061		43,915
Income taxes receivable and payable	430		(3,039)

Other assets	8,246		15,053
Accounts payable and other accrued expenses	(18,849)		(26,968)
Accrued wages and benefits	(14,753)		(9,277)

Workers’ compensation claims reserve	(18,537)		(19,899)
Operating lease liabilities	(6,139)		(6,295)
Other liabilities	1,011		3,980
Net cash (used in) provided by operating activities	(16,062)		20,864
Cash flows from investing activities:
Capital expenditures	(13,279)		(15,738)

Proceeds from business divestiture, net	2,928		—
Payments for company-owned life insurance	(4,000)		(2,347)



Purchases of restricted held-to-maturity investments	(10,180)		(9,955)
Maturities of restricted held-to-maturity investments	19,220		15,613

Net cash used in investing activities	(5,311)		(12,427)
Cash flows from financing activities:
Purchases and retirement of common stock	(16,986)		(34,200)
Net proceeds from employee stock purchase plans	417		509
Common stock repurchases for taxes upon vesting of restricted stock	(2,143)		(2,514)



Other	(1,807)		(91)
Net cash used in financing activities	(20,519)		(36,296)
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents	(557)		(20)
Net change in cash, cash equivalents and restricted cash and cash equivalents	(42,449)		(27,879)
Cash, cash equivalents and restricted cash and cash equivalents, beginning of period	99,306		135,631
Cash, cash equivalents and restricted cash and cash equivalents, end of period	$	56,857	$	107,752

Supplemental disclosure of cash flow information:
Cash paid (received) during the period for:
Interest	$	498	$	453
Income taxes	$	(199)	$	3,760
Operating lease liabilities	$	7,635	$	7,793
Non-cash transactions:
Property and equipment purchased but not yet paid	$	1,864	$	3,345
Divestiture non-cash consideration	$	600	$	—
Right-of-use assets obtained in exchange for new operating lease liabilities	$	6,654	$	8,124

See accompanying notes to consolidated financial statements

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Financial statement preparation

The accompanying unaudited consolidated financial statements (“financial statements”) of TrueBlue, Inc. (the “company,” “TrueBlue,” “we,” “us,” and “our”) are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, certain information and footnote disclosures usually found in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The financial statements reflect all adjustments which, in the opinion of management, are necessary to fairly state the financial statements for the interim periods presented. We follow the same accounting policies for preparing both quarterly and annual financial statements.

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

These financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The results of operations for the twenty-six weeks ended June 30, 2024 are not necessarily indicative of the results expected for the full fiscal year nor for any other fiscal period.

Goodwill and indefinite-lived intangible assets

We evaluate goodwill and indefinite-lived intangible assets for impairment on an annual basis as of the first day of our fiscal second quarter, or whenever events or circumstances make it more likely than not that an impairment may have occurred. These events or circumstances could include a significant change in general economic conditions, deterioration in industry environment, changes in cost factors, declining operating performance indicators, legal factors, competition, client engagement, changes in the carrying amount of net assets, sale or disposition of a significant portion of a reporting unit, or a sustained decrease in stock price. We monitor the existence of potential impairment indicators throughout the fiscal year.

Goodwill

We test for goodwill impairment at the reporting unit level. We consider our operating segments to be our reporting units for goodwill impairment testing. Our reporting units with remaining goodwill as of the first day of our fiscal second quarter were PeopleReady, Centerline, PeopleScout RPO and PeopleScout MSP.

When evaluating goodwill for impairment, we may first assess qualitative factors to determine whether it is more likely than not the fair value of a reporting unit is less than its carrying amount. Qualitative factors include macroeconomic conditions, industry and market conditions and overall company financial performance. If, after assessing the totality of events and circumstances, we determine that it is more likely than not the fair value of the reporting unit is greater than its carrying amount, the quantitative impairment test is unnecessary.

The quantitative impairment test, if necessary, involves comparing the fair value of each reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit. If the fair value exceeds the carrying value, we conclude that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its fair value, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value of the goodwill. We consider a reporting unit’s fair value to be substantially in excess of its carrying value at a 20% premium or greater.

We performed an interim impairment test as of the last day of the first fiscal quarter of 2024, as well as a qualitative assessment for our annual impairment test one day later, which did not result in impairment of goodwill for any reporting unit. During the second fiscal quarter of 2024, management determined that a triggering event had occurred as a result of additional decline in demand for our services, prolonged economic uncertainty, and a further decrease in our stock price. Therefore, we performed an additional interim impairment test as of the last day of fiscal May 2024. Refer to Note 6: Goodwill and Intangible Assets for additional details on the interim impairment test, valuation methodologies, and inputs used in the fair value measurements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Indefinite-lived intangible assets

We have indefinite-lived intangible assets for trade names/trademarks related to businesses within our PeopleScout and PeopleManagement segments. We evaluate our indefinite-lived intangible assets for impairment on an annual basis as of the first day of our fiscal second quarter, or whenever events or circumstances make it more likely than not that an impairment may have occurred. These events or circumstances could include significant change in general economic conditions, deterioration in industry environment, changes in cost factors, declining operating performance indicators, legal factors, competition, client engagement, or sale or disposition of a significant portion of the business. We monitor the existence of potential impairment indicators throughout the fiscal year.

When evaluating indefinite-lived intangible assets for impairment, we may first assess qualitative factors to determine whether it is more likely than not the fair value of the indefinite-lived intangible asset is less than its carrying amount. Qualitative factors include macroeconomic conditions, industry and market conditions and overall company financial performance. If, after assessing the totality of events and circumstances, we determine that it is more likely than not the fair value of the indefinite-lived intangible asset is greater than its carrying amount, the quantitative impairment test is unnecessary.

The quantitative impairment test, if necessary, utilizes the relief from royalty method to determine the fair value of each of our trade names. If the carrying value exceeds the fair value, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value.

During the fiscal second quarter of 2024, we performed an impairment test for indefinite-lived intangible assets. Refer to Note 6: Goodwill and Intangible Assets for additional details on the impairment test, valuation methodologies, and inputs used in the fair value measurements.

Government assistance

As there is limited U.S. GAAP accounting guidance for for-profit business entities that receive government assistance, we have elected to analogize to International Financial Reporting Standards (“IFRS”), specifically International Accounting Standards (“IAS”) 20, Accounting for Government Grants and Disclosures of Government Assistance. Following IAS 20, we recognize government assistance on a systematic basis over the periods in which we recognize the related costs for which the grant is intended to compensate, but only when there is reasonable assurance we will comply with all conditions attached to the grant and there is reasonable assurance the assistance will be received. We have interpreted “reasonable assurance” to mean “probable,” as defined in loss contingencies guidance in U.S. GAAP.

During the second fiscal quarter of 2024, management determined the reasonable assurance criteria was met for certain payroll tax credits for which recognition was previously deferred. As a result, $2.9 million and $7.6 million were recognized within cost of services and selling, general and administrative (“SG&A”) expense, respectively, on the Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen and twenty-six weeks ended June 30, 2024. Also, this resulted in a reversal of previously accrued interest related to these benefits of $1.1 million, offset by recognition of related professional fees of $0.8 million, which were recorded within interest and other income (expense), net and SG&A expense, respectively, on the Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen and twenty-six weeks ended June 30, 2024.

As of June 30, 2024, we have $15.1 million within accrued wages and benefits on our Consolidated Balance Sheets related to deferred recognition of certain payroll tax credits, including accrued interest, until recognition becomes probable.

Recently adopted accounting standards

There were no new accounting standards adopted during the twenty-six weeks ended June 30, 2024 that had a material impact on our financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Recently issued accounting standards and disclosure rules not yet adopted

Segments

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires disclosure of incremental segment information on an interim and annual basis, primarily regarding significant segment expenses and information used to assess segment performance. This ASU is effective for fiscal years beginning after December 15, 2023 (fiscal 2024 for TrueBlue), and interim periods beginning after December 15, 2024 (Q1 2025 for TrueBlue). Retrospective application is required for all periods presented. We are currently evaluating the impact of this ASU on our required disclosures.

Income Taxes

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures,” which requires enhancements and further transparency to certain income tax disclosures, primarily to the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 (fiscal 2025 for TrueBlue), on a prospective basis with retrospective application permitted. We are currently evaluating the impact of this ASU on our required disclosures.

Climate

In March 2024, the SEC issued its final climate disclosure rule, which requires the disclosure of Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics in annual reports and registration statements, when material. Disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2025. While the SEC issued an order to stay the final rule in April 2024 due to certain legal challenges, we continue to evaluate the impact of this new rule on our required disclosures.

There are no other accounting standards which have not yet been adopted that are expected to have a significant impact on our financial statements and related disclosures.

NOTE 2: DIVESTITURE

Effective February 26, 2024, we entered into a share purchase agreement (the “Agreement”) to sell Labour Ready Temporary Services, Ltd. (“PeopleReady Canada”) to Vertical Staffing Resources (“Vertical”) for a preliminary sale price of $4.3 million, plus contingent consideration of up to $2.5 million based on the achievement of the results of the business as specified in the Agreement. The sale price is subject to adjustment based on the closing working capital of the divested business. We received cash proceeds of $2.9 million, net of $0.8 million of transaction costs and $0.6 million held in escrow until finalization of the closing working capital and expiration of the indemnification period. We recognized a pre-tax gain on the divestiture of $0.7 million, which is included in interest and other income (expense), net on the Consolidated Statements of Operations and Comprehensive Income (Loss) for the twenty-six weeks ended June 30, 2024. The operating results for PeopleReady Canada were reported in the PeopleReady reportable segment through the closing date, including $2.6 million in revenue. The divestiture of PeopleReady Canada did not represent a strategic shift with a major effect on the company's operations and financial results and, therefore was not reported as a discontinued operation, nor was it an individually significant component of the company.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 3: FAIR VALUE MEASUREMENT

Assets measured at fair value on a recurring basis

Our assets measured at fair value on a recurring basis consisted of the following:


	June 30, 2024
(in thousands)	Total fair value		Quoted prices in active markets for identical assets (level 1)		Significant other observable inputs (level 2)		Significant unobservable inputs (level 3)
Cash and cash equivalents	$	26,400	$	26,400	$	—	$	—
Restricted cash and cash equivalents	30,457		30,457		—		—
Cash, cash equivalents and restricted cash and cash equivalents (1)	$	56,857	$	56,857	$	—	$	—

Municipal debt securities	$	28,834	$	—	$	28,834	$	—
Corporate debt securities	69,537		—		69,537		—
Agency mortgage-backed securities	11,843		—		11,843		—
U.S. government and agency securities	957		—		957		—
Restricted investments classified as held-to-maturity (2)	$	111,171	$	—	$	111,171	$	—


	December 31, 2023
(in thousands)	Total fair value		Quoted prices in active markets for identical assets (level 1)		Significant other observable inputs (level 2)		Significant unobservable inputs (level 3)
Cash and cash equivalents	$	61,885	$	61,885	$	—	$	—
Restricted cash and cash equivalents	37,421		37,421		—		—
Cash, cash equivalents and restricted cash and cash equivalents (1)	$	99,306	$	99,306	$	—	$	—

Municipal debt securities	$	31,804	$	—	$	31,804	$	—
Corporate debt securities	74,912		—		74,912		—
Agency mortgage-backed securities	13,235		—		13,235		—
U.S. government and agency securities	962		—		962		—
Restricted investments classified as held-to-maturity (2)	$	120,913	$	—	$	120,913	$	—

(1)Cash, cash equivalents and restricted cash and cash equivalents include money market funds and deposits.

(2)Refer to Note 4: Restricted Cash, Cash Equivalents and Investments for additional details on our held-to-maturity debt securities.

Assets measured at fair value on a nonrecurring basis

In addition to assets that are recorded at fair value on a recurring basis, annual and interim impairment tests may subject our reporting units with goodwill and other intangible assets to nonrecurring fair value measurement. We performed impairment tests for goodwill and indefinite-lived intangible assets during our fiscal second quarter of 2024. Refer to Note 6: Goodwill and Intangible Assets for additional details on the impairment charges, valuation methodologies, and inputs used in the fair value measurements.

For our interim goodwill impairment test as of the last day of fiscal May 2024, the fair value of each reporting unit was estimated using an equal weighting of the income and market approaches, except for PeopleScout MSP, which relied only on the income approach. The various inputs to these fair value models are considered Level 3. As a result of the test, goodwill with a carrying value of $59.1 million associated with the PeopleReady reporting unit was impaired, and an impairment charge of $59.1 million was recognized on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen and twenty-six weeks ended June 30, 2024.

For our indefinite-lived intangible asset impairment test performed during the fiscal second quarter of 2024, the fair value of our trade names/trademarks were estimated utilizing the relief from royalty method. The various inputs to this fair value model are considered Level 3. As a result of the test, one of our trade names/trademarks with a carrying value of $3.3 million was

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

written down to its fair value, and an impairment charge of $0.6 million was recognized on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen and twenty-six weeks ended June 30, 2024.

NOTE 4: RESTRICTED CASH, CASH EQUIVALENTS AND INVESTMENTS

The following is a summary of the carrying value of our restricted cash, cash equivalents and investments:


(in thousands)	June 30, 2024		December 31, 2023
Cash collateral held by insurance carriers	$	23,896	$	23,598
Cash and cash equivalents held in Trust	5,816		12,703
Investments held in Trust	113,268		122,659

Company-owned life insurance policies	39,627		32,905
Other restricted cash and cash equivalents	745		1,120
Total restricted cash, cash equivalents and investments	$	183,352	$	192,985

Held-to-maturity

Restricted cash, cash equivalents and investments include collateral that has been provided or pledged to insurance carriers for workers’ compensation and state workers’ compensation programs. Our insurance carriers and certain state workers’ compensation programs require us to collateralize a portion of our workers’ compensation obligation. The collateral typically takes the form of cash and cash equivalents and highly rated investment grade securities, primarily in debt and asset-backed securities. The majority of our collateral obligations are held in a trust at the Bank of New York Mellon (“Trust”).

The amortized cost and estimated fair value of our held-to-maturity investments held in Trust, aggregated by investment category as of June 30, 2024 and December 31, 2023, were as follows:


	June 30, 2024
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Municipal debt securities	$	29,150	$	—	$	(316)	$	28,834
Corporate debt securities	71,296		71		(1,830)		69,537
Agency mortgage-backed securities	11,823		53		(33)		11,843
U.S. government and agency securities	999		—		(42)		957
Total held-to-maturity investments	$	113,268	$	124	$	(2,221)	$	111,171


	December 31, 2023
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Municipal debt securities	$	32,042	$	4	$	(242)	$	31,804
Corporate debt securities	76,578		333		(1,999)		74,912
Agency mortgage-backed securities	13,039		196		—		13,235
U.S. government and agency securities	1,000		—		(38)		962
Total held-to-maturity investments	$	122,659	$	533	$	(2,279)	$	120,913

The amortized cost and fair value by contractual maturity of our held-to-maturity investments are as follows:


	June 30, 2024
(in thousands)	Amortized cost		Fair value
Due in one year or less	$	26,153	$	25,810
Due after one year through five years	74,731		73,005
Due after five years through ten years	6,207		6,145
Due after ten years	6,177		6,211
Total held-to-maturity investments	$	113,268	$	111,171

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Actual maturities may differ from contractual maturities because the issuers of certain debt securities have the right to call or prepay their obligations without penalty. We have no significant concentrations of counterparties in our held-to-maturity investment portfolio.

Company-owned life insurance policies

We hold company-owned life insurance policies to support our deferred compensation liability. Unrealized gains and losses related to investments still held at June 30, 2024 and June 25, 2023, which are included in SG&A expense on our Consolidated Statements of Operations and Comprehensive Income (Loss), were as follows:


	Thirteen weeks ended				Twenty-six weeks ended
(in thousands)	June 30, 2024		June 25, 2023		June 30, 2024		June 25, 2023
Unrealized gains (losses)	$	303	$	1,558	$	2,722	$	1,975

NOTE 5: SUPPLEMENTAL BALANCE SHEET INFORMATION

Accounts receivable allowance for credit losses

The activity related to the accounts receivable allowance for credit losses was as follows:


	Twenty-six weeks ended
(in thousands)	June 30, 2024		June 25, 2023
Beginning balance	$	2,005	$	3,212

Current period provision	630		2,408
Write-offs	(1,785)		(2,130)
Foreign currency translation	(1)		3
Ending balance	$	849	$	3,493

Prepaid expenses and other current assets

The balance of prepaid expenses and other current assets was made up of the following:


(in thousands)	June 30, 2024		December 31, 2023
Prepaid software agreements	$	9,666	$	8,435
Other prepaid expenses	6,023		9,355
Assets held-for-sale	11,785		4,845
Other current assets	5,093		6,259
Prepaid expenses and other current assets	$	32,567	$	28,894

Assets held-for-sale

On April 11, 2024, following an evaluation of our office space and business requirements, management, with approval from the Board of Directors, entered into an agreement to sell our Tacoma headquarters building for $15.0 million. The sale is expected to be finalized within one year, subject to customary closing conditions. As a result, during the fiscal second quarter ending June 30, 2024, we classified these assets as held-for-sale and ceased recording depreciation. As the estimated fair value of the disposal group, less costs to sell, exceeded its carrying value of $11.8 million, no impairment loss was recorded for the thirteen or twenty-six weeks ended June 30, 2024.

Assets held-for-sale as of December 31, 2023 represented the assets included as part of the disposal group related to the eventual divestiture of Labour Ready Temporary Services, Ltd., which was finalized during the fiscal first quarter of 2024. Refer to Note 2: Divestiture for additional details.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 6: GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following table reflects changes in the carrying amount of goodwill during the period by reportable segment:


(in thousands)		PeopleReady		PeopleScout		PeopleManagement		Total company
Balance at	December 31, 2023
Goodwill before impairment		$	105,284	$	142,191	$	81,092	$	328,567
Accumulated impairment charge		(46,210)		(118,642)		(79,601)		(244,453)
Goodwill, net		59,074		23,549		1,491		84,114

Impairment charge		(59,074)		—		—		(59,074)
Foreign currency translation		—		(126)		—		(126)

Balance at	June 30, 2024
Goodwill before impairment		105,284		142,065		81,092		328,441
Accumulated impairment charge		(105,284)		(118,642)		(79,601)		(303,527)
Goodwill, net		$	—	$	23,423	$	1,491	$	24,914

Annual impairment test

We performed an interim impairment test as of the last day of the fiscal first quarter of 2024 as management determined that a triggering event had occurred as a result of continued decline for our services, overall economic uncertainty, and a sustained decrease in our stock price, which did not result in impairment of goodwill for any reporting unit. Given the proximity of our first quarter interim impairment measurement date to our annual goodwill impairment measurement date (first day of the fiscal second quarter), we performed a qualitative assessment to determine whether it was more likely than not that the fair value of any of our reporting units was less than the carrying value. We considered the current and expected future economic and market conditions and concluded it was unlikely the goodwill associated with our reporting units was impaired as of the first day of our fiscal second quarter.

Interim impairment test

During the fiscal second quarter of 2024, subsequent to our annual test as of the first day of our fiscal second quarter, management determined that a triggering event had occurred as a result of additional decline in demand for our services, prolonged economic uncertainty, and a further decrease in our stock price. Therefore, we performed an interim impairment test as of the last day of fiscal May 2024 f

SEC Form 10-Q filed by TrueBlue Inc.