tbi-20250330

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: March 30, 2025

☐ 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 April 27, 2025, there were 29,864,024 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	20
Item 3.	Quantitative and qualitative disclosures about market risk	28
Item 4.	Controls and procedures	29

PART II. OTHER INFORMATION
Item 1.	Legal proceedings	30
Item 1A.	Risk factors	30
Item 2.	Unregistered sales of equity securities and use of proceeds	31
Item 3.	Defaults upon senior securities	31
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)	March 30, 2025		December 29, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	23,059	$	22,536
Accounts receivable, net of allowance of $861 and $1,009, respectively	219,056		214,704
Prepaid expenses and other current assets	31,260		31,786
Income tax receivable	7,672		8,067
Total current assets	281,047		277,093
Property and equipment, net	87,851		89,602
Restricted cash, cash equivalents and investments	170,208		179,916
Deferred income taxes, net	875		886
Goodwill	42,281		24,543
Intangible assets, net	20,392		5,863
Operating lease right-of-use assets, net	46,086		47,334
Workers’ compensation claims receivable, net	32,667		38,343
Other assets, net	11,064		11,796
Total assets	$	692,471	$	675,376
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and other accrued expenses	$	38,026	$	45,599
Accrued wages and benefits	66,339		61,380
Income tax payable	4,079		315
Current portion of workers’ compensation claims reserve	31,397		34,729

Current operating lease liabilities	11,023		11,127
Other current liabilities	5,460		6,975
Total current liabilities	156,324		160,125
Workers’ compensation claims reserve, less current portion	91,531		105,063
Long-term debt	57,800		7,600

Long-term deferred compensation liabilities	36,910		38,109
Long-term operating lease liabilities	46,396		47,805

Other long-term liabilities	1,293		1,315
Total liabilities	390,254		360,017

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; 29,832,747 and 29,588,363 shares issued and outstanding	1		1
Accumulated other comprehensive loss	(22,222)		(22,193)
Retained earnings	324,438		337,551
Total shareholders’ equity	302,217		315,359
Total liabilities and shareholders’ equity	$	692,471	$	675,376

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
(in thousands, except per share data)	March 30, 2025		March 31, 2024
Revenue from services	$	370,254	$	402,853
Cost of services	283,912		303,467
Gross profit	86,342		99,386
Selling, general and administrative expense	94,621		106,937
Depreciation and amortization (exclusive of depreciation included in cost of services)	5,844		7,958

Income (loss) from operations	(14,123)		(15,509)


Interest and other income (expense), net	193		1,599
Income (loss) before tax expense (benefit)	(13,930)		(13,910)
Income tax expense (benefit)	418		(12,212)
Net income (loss)	$	(14,348)	$	(1,698)

Net income (loss) per common share:
Basic	$	(0.48)	$	(0.05)
Diluted	$	(0.48)	$	(0.05)

Weighted average shares outstanding:
Basic	29,698		31,102
Diluted	29,698		31,102

Other comprehensive income (loss):
Foreign currency translation adjustment	$	(29)	$	(58)
Comprehensive income (loss)	$	(14,377)	$	(1,756)

See accompanying notes to consolidated financial statements

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TRUEBLUE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Thirteen weeks ended
(in thousands)	March 30, 2025		March 31, 2024
Cash flows from operating activities:
Net income (loss)	$	(14,348)	$	(1,698)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization (inclusive of depreciation included in cost of services)	6,810		7,958

Provision for credit losses	250		370
Stock-based compensation	2,060		2,102
Deferred income taxes	—		(12,206)
Non-cash lease expense	2,753		3,036
Other operating activities	1,486		(2,980)
Changes in operating assets and liabilities:
Accounts receivable	9,133		8,292
Income taxes receivable and payable	373		975

Other assets	7,150		1,571
Accounts payable and other accrued expenses	(9,580)		(11,515)
Accrued wages and benefits	(5,418)		480

Workers’ compensation claims reserve	(16,865)		(8,669)
Operating lease liabilities	(3,035)		(3,204)
Other liabilities	(2,884)		1,249
Net cash used in operating activities	(22,115)		(14,239)
Cash flows from investing activities:
Capital expenditures	(4,680)		(7,375)
Acquisition of business, net of cash acquired	(30,044)		—
Proceeds from business divestiture, net	—		2,928




Purchases of restricted held-to-maturity investments	—		(10,180)
Maturities of restricted held-to-maturity investments	10,756		15,546

Net cash (used in) provided by investing activities	(23,968)		919
Cash flows from financing activities:
Purchases and retirement of common stock	—		(10,067)
Net proceeds from employee stock purchase plans	70		220
Common stock repurchases for taxes upon vesting of restricted stock	(895)		(2,012)
Net change in revolving credit facility	50,200		—


Other	(6)		(1,803)
Net cash provided by (used in) financing activities	49,369		(13,662)
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents	(230)		(604)
Net change in cash, cash equivalents and restricted cash and cash equivalents	3,056		(27,586)
Cash, cash equivalents and restricted cash and cash equivalents, beginning of period	61,100		99,306
Cash, cash equivalents and restricted cash and cash equivalents, end of period	$	64,156	$	71,720

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	355	$	244
Income taxes, net of refunds	$	116	$	(1,082)
Operating lease liabilities	$	3,593	$	3,948
Non-cash transactions:
Property and equipment purchased but not yet paid	$	1,305	$	2,046
Divestiture non-cash consideration	$	—	$	600
Right-of-use assets obtained in exchange for new operating lease liabilities	$	1,454	$	3,711

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. The results of operations for the thirteen weeks ended March 30, 2025 are not necessarily indicative of the results expected for the full fiscal year nor for any other fiscal period.

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 29, 2024. The following has been updated to reflect changes in our application of certain significant accounting policies during the thirteen weeks ended March 30, 2025.

Accounts receivable and allowance for credit losses

Accounts receivable are recorded at the invoiced amount. We establish an estimate for the allowance for credit losses resulting from the failure of our clients to make required payments by applying an aging schedule to pools of assets with similar risk characteristics. Based on an analysis of the risk characteristics of our clients and associated receivables, we have concluded our pools are as follows:

•PeopleReady (excluding RenewableWorks) has a large, diverse set of clients, generally with frequent, low dollar invoices due to the daily nature of the work we perform. This results in high turnover in accounts receivable.

•Centerline Drivers (“Centerline”) has a mix of client sizes, many with low dollar weekly invoices, but other clients that are invoiced on a consolidated basis, resulting in a high concentration of revenue related to its top 10 clients. Payment terms are slightly longer than PeopleReady.

•Our PeopleScout and Healthcare Staffing Professionals (“HSP”) brands have a smaller number of clients in a variety of industries, and are generally invoiced monthly on a consolidated basis. Invoice amounts are generally higher for these brands than our other businesses, with longer payment terms than PeopleReady and Centerline. These businesses also have significant balances due from governmental entities.

•Our Staff Management | SMX and SIMOS Insourcing Solutions brands have a smaller number of clients, and follow a contractual billing schedule. These clients generally operate in the manufacturing, warehousing and distribution industries and have longer payment terms than our other businesses.

•Our RenewableWorks brand has a small number of large clients that operate in the energy industry, generally with high dollar invoices, and follows a contractual billing schedule. Payment terms are slightly longer than most of our other businesses.

When specific clients are identified as no longer sharing the same risk profile as their current pool, they are removed from the pool and evaluated separately. The credit loss rates applied to each aging category by pool are based on current collection efforts, historical collection trends, write-off experience, client credit risk, current economic data and forecasted information. The allowance for credit loss is reviewed and represents our best estimate of the amount of expected credit losses. Past due or delinquent balances are identified based upon a review of aged receivables performed by collections and operations. Past due balances are written off when it is probable the receivable will not be collected. Changes in the allowance for credit losses are recorded in selling, general and administrative (“SG&A”) expense on the Consolidated Statements of Operations and Comprehensive Income (Loss).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Goodwill

We test for goodwill impairment at the reporting unit level. We consider our reporting units to be our operating segments or one level below (the component level) based on our organizational structure. Our reporting units with remaining goodwill as of March 30, 2025 were Centerline, PeopleScout RPO, PeopleScout MSP, and HSP.

During the fiscal first quarter of 2025, we continued to see decreased demand for many of our services, as well as overall economic uncertainty and a sustained decrease in our stock price. Future events and changing market conditions may impact management's assumptions used to estimate each reporting units’ fair value and could give rise to an impairment. We will continue to closely monitor the operational performance of our reporting units with goodwill balances.

Recently adopted accounting standards

There were no new accounting standards adopted during the thirteen weeks ended March 30, 2025 that had a material impact on our financial statements.

Recently issued accounting standards and disclosure rules not yet adopted

Disaggregation of income statement expenses

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03, “Income Statement (Subtopic 220-40): Disaggregation of Income Statement Expenses,” and in January 2025, the FASB issued ASU 2025-01, “Income Statement (Subtopic 220-40): Clarifying the Effective Date.” ASU 2024-03 requires disclosures about specific types of expenses included in the expense captions presented in the income statement as well as disclosure about selling expenses. ASU 2024-03, as clarified by ASU 2025-01, is effective for fiscal years beginning after December 15, 2026 (2027 for TrueBlue) and interim periods beginning after December 15, 2027 (Q1 2028 for TrueBlue). 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 2: ACQUISITION

Effective January 31, 2025, we acquired all of the outstanding equity interests of HSP. HSP is a long-term staffing and permanent hiring solutions provider, primarily focused on health care positions in the U.S. This acquisition allows us to expand revenue in the health care end-market while also diversifying our business.

Under the terms of the share purchase agreement, the base purchase price of $42.0 million was adjusted for estimated unpaid pre-close liabilities of the selling shareholders, cash acquired, and estimated excess working capital. The purchase price allocated to acquired assets and liabilities was cash consideration of $35.1 million. The purchase price is subject to further adjustment based on HSP’s final pre-close liabilities and working capital amounts. As part of the share purchase agreement, certain HSP employees can earn up to an additional $14.0 million based on the financial performance of the business over the next two years, which we have concluded should be treated as compensation expense. Any amounts probable of being paid out under the agreement are expensed over the required service period. We incurred acquisition-related costs of $0.7 million for the thirteen weeks ended March 30, 2025, which are included in SG&A expense on the Consolidated Statements of Operations and Comprehensive Income (Loss).

The following table reflects our preliminary allocation of the purchase price to our best estimate of the fair value of assets acquired and liabilities assumed using information available as of the acquisition date. Our preliminary purchase price allocation may be adjusted as more information becomes available about facts and circumstances that existed as of the acquisition date, including related to the value of acquired intangible assets and settlement of assets and liabilities acquired.


(in thousands)	Purchase price allocation


Purchase price allocated as follows:
Cash and cash equivalents	$	5,042
Accounts receivable	13,735
Prepaid expenses, deposits and other current assets	216
Operating lease right-of-use assets	97
Intangible assets	14,900
Total assets acquired	33,990

Accounts payable and other accrued expenses	2,125
Accrued wages and benefits	10,375
Income tax payable	3,789
Other current liabilities	90
Operating lease liabilities	97
Total liabilities assumed	16,476

Net identifiable assets acquired	17,514
Goodwill (1)	17,572
Total cash consideration transferred	$	35,086

(1) Goodwill represents the expected synergies with our existing businesses, the acquired assembled workforce, potential new clients and future cash flows after the acquisition of HSP, and is deductible for income tax purposes.

Intangible assets include identifiable intangible assets for customer relationships and trade names/trademarks. We estimated the preliminary fair value of the acquired identifiable intangible assets, which are subject to straight line amortization, using an income approach. These fair value measurements were based on Level 3 inputs under the fair value hierarchy.

The following table sets forth the components of identifiable intangible assets acquired as of January 31, 2025:


(in thousands, except for estimated useful lives, in years)	Estimated fair value		Estimated useful life in years	Valuation Method	Discount Rate
Customer relationships	$	14,250	6	Multi-period excess earnings	17%
Trade names/trademarks	650		7	Relief from royalty	17%
Total acquired identifiable intangible assets	$	14,900

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The acquired assets and assumed liabilities of HSP are included on our Consolidated Balance Sheet as of March 30, 2025, and the results of its operations are reported on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the period from February 1, 2025 to March 30, 2025. The amount of revenue and income from operations for HSP included on our Consolidated Statements of Operations and Comprehensive Income (Loss) was $11.3 million and $0.2 million, respectively. HSP results have been combined with our historical PeopleScout segment, which has been renamed PeopleSolutions. We concluded the acquisition of HSP was not material to our consolidated results of operations and as such, pro forma financial information was not required.

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:


	March 30, 2025
(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	$	23,059	$	23,059	$	—	$	—
Restricted cash and cash equivalents	41,097		41,097		—		—
Cash, cash equivalents and restricted cash and cash equivalents (1)	$	64,156	$	64,156	$	—	$	—

Municipal debt securities	$	20,627	$	—	$	20,627	$	—
Corporate debt securities	55,606		—		55,606		—
Agency mortgage-backed securities	11,290		—		11,290		—
U.S. government and agency securities	980		—		980		—
Restricted investments classified as held-to-maturity (2)	$	88,503	$	—	$	88,503	$	—


	December 29, 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	$	22,536	$	22,536	$	—	$	—
Restricted cash and cash equivalents	38,564		38,564		—		—
Cash, cash equivalents and restricted cash and cash equivalents (1)	$	61,100	$	61,100	$	—	$	—

Municipal debt securities	$	22,355	$	—	$	22,355	$	—
Corporate debt securities	63,512		—		63,512		—
Agency mortgage-backed securities	11,754		—		11,754		—
U.S. government and agency securities	971		—		971		—
Restricted investments classified as held-to-maturity (2)	$	98,592	$	—	$	98,592	$	—

(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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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)	March 30, 2025		December 29, 2024
Cash collateral held by insurance carriers	$	22,559	$	22,387
Cash and cash equivalents held in Trust	18,229		15,406
Investments held in Trust	88,671		99,506

Company-owned life insurance policies	40,440		41,846
Other restricted cash and cash equivalents	309		771
Total restricted cash, cash equivalents and investments	$	170,208	$	179,916

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 each of our held-to-maturity investments held in Trust, aggregated by investment category as of March 30, 2025 and December 29, 2024, were as follows:


	March 30, 2025
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Municipal debt securities	$	20,696	$	—	$	(69)	$	20,627
Corporate debt securities	55,842		339		(575)		55,606
Agency mortgage-backed securities	11,133		157		—		11,290
U.S. government and agency securities	1,000		—		(20)		980
Total held-to-maturity investments	$	88,671	$	496	$	(664)	$	88,503


	December 29, 2024
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Municipal debt securities	$	22,490	$	—	$	(135)	$	22,355
Corporate debt securities	64,313		144		(945)		63,512
Agency mortgage-backed securities	11,703		68		(17)		11,754
U.S. government and agency securities	1,000		—		(29)		971
Total held-to-maturity investments	$	99,506	$	212	$	(1,126)	$	98,592

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


	March 30, 2025
(in thousands)	Amortized cost		Fair value
Due in one year or less	$	23,772	$	23,605
Due after one year through five years	55,489		55,337
Due after five years through ten years	3,941		3,984
Due after ten years	5,469		5,577
Total held-to-maturity investments	$	88,671	$	88,503

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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 March 30, 2025 and March 31, 2024, which are included in SG&A expense on our Consolidated Statements of Operations and Comprehensive Income (Loss), were as follows:


	Thirteen weeks ended
(in thousands)	March 30, 2025		March 31, 2024
Unrealized gains (losses)	$	(1,405)	$	2,419

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:


	Thirteen weeks ended
(in thousands)	March 30, 2025		March 31, 2024
Beginning balance	$	1,009	$	2,005

Current period provision	250		370
Write-offs	(398)		(1,179)
Foreign currency translation	—		(1)
Ending balance	$	861	$	1,195

Prepaid expenses and other current assets

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


(in thousands)	March 30, 2025		December 29, 2024
Prepaid software agreements	$	8,838	$	8,501
Other prepaid expenses	6,652		6,329
Assets held-for-sale	11,759		11,759
Other current assets	4,011		5,197
Prepaid expenses and other current assets	$	31,260	$	31,786

Assets held-for-sale

As of March 30, 2025 and December 29, 2024, all criteria for classifying our Tacoma headquarters office building as held-for-sale were met. Completion of the sale of the building is expected within a year from March 30, 2025. The estimated fair value of the disposal group, less costs to sell, continues to exceed its carrying value of $11.8 million, and therefore no impairment charge was recorded during the thirteen weeks ended March 30, 2025.

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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		PeopleManagement		PeopleSolutions		Total company
Balance at	December 29, 2024
Goodwill before impairment		$	105,284	$	81,092	$	141,694	$	328,070
Accumulated impairment charge		(105,284)		(79,601)		(118,642)		(303,527)
Goodwill		—		1,491		23,052		24,543


Acquired goodwill (1)		—		—		17,572		17,572
Foreign currency translation		—		—		166		166

Balance at	March 30, 2025
Goodwill before impairment		105,284		81,092		159,432		345,808
Accumulated impairment charge		(105,284)		(79,601)		(118,642)		(303,527)
Goodwill		$	—	$	1,491	$	40,790	$	42,281

(1)Effective January 31, 2025, the company acquired Healthcare Staffing Professionals, Inc. The goodwill associated with the acquisition has been assigned to the HSP reporting unit, and included within the PeopleSolutions reportable segment (previously known as PeopleScout) based on our preliminary purchase price allocation. Refer to Note 2: Acquisition for additional details.

Intangible assets

Finite-lived intangible assets

The following table presents our purchased finite-lived intangible assets:


	March 30, 2025						December 29, 2024
(in thousands)	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Finite-lived intangible assets (1):
Customer relationships	$	16,970	$	(2,887)	$	14,083	$	2,637	$	(2,448)	$	189
Trade names/trademarks	2,334		(825)		1,509		1,632		(758)		874


Total finite-lived intangible assets	$	19,304	$	(3,712)	$	15,592	$	4,269	$	(3,206)	$	1,063

(1)Excludes assets that are fully amortized.

The gross carrying amounts as of March 30, 2025 include preliminary fair valuation of customer relationships and trade names/trademarks of $14.3 million and $0.7 million, respectively, related to the acquisition of HSP. Refer to Note 2: Acquisition for additional details.

Amortization expense of our finite-lived intangible assets was $0.4 million and $1.5 million for the thirteen weeks ended March 30, 2025 and March 31, 2024, respectively.

Indefinite-lived intangible assets

We held indefinite-lived trade names/trademarks of $4.8 million as of March 30, 2025 and December 29, 2024, related to brands within our PeopleManagement and PeopleSolutions segments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 7: WORKERS' COMPENSATION INSURANCE AND RESERVES

We provide workers’ compensation insurance for our associates and permanent employees. The majority of our current workers’ compensation insurance policies cover claims for a particular event above our $5.0 million deductible limit, on a “per occurrence” basis. This results in our business being substantially self-insured.

Our workers’ compensation reserve for claims below the deductible limit is discounted to its estimated net present value. The discount rates used to estimate net present value are based on average returns of “risk-free” U.S. Treasury instruments available during the year in which the liability was incurred and the weighted average duration of the payments against the self-insured claims. Payments made against self-insured claims are made over a weighted average period of approximately 4.5 years as of March 30, 2025. The weighted average discount rate was 2.8% and 2.7% at March 30, 2025 and December 29, 2024, respectively.

The following table presents a reconciliation of the undiscounted workers’ compensation reserve to the discounted workers’ compensation reserve for the periods presented:


(in thousands)	March 30, 2025		December 29, 2024
Undiscounted workers’ compensation reserve (1)	$	134,614	$	152,803
Less discount on workers’ compensation reserve	11,686		13,011
Workers’ compensation reserve, net of discount	122,928		139,792
Less current portion	31,397		34,729
Long-term portion	$	91,531	$	105,063

(1)Amounts shown are net of discount related to claims above our self-insured limits (“excess claims”).

Payments made against self-insured claims were $10.6 million and $10.3 million for the thirteen weeks ended March 30, 2025 and March 31, 2024, respectively.

Our workers’ compensation reserve includes estimated expenses related to claims above our self-insured limits (“excess claims”), and we record a corresponding receivable for the insurance coverage on excess claims based on the contractual policy agreements we have with insurance carriers. We discount this reserve and corresponding receivable to its estimated net present value using the discount rates based on average returns of “risk-free” U.S. Treasury instruments available during the year in which the liability was incurred and the weighted average duration of the payments against the excess claims. The discounted workers’ compensation reserve for excess claims was $32.7 million and $38.6 million as of March 30, 2025 and December 29, 2024, respectively. The discounted receivables from insurance companies, net of valuation allowance, were $32.7 million and $38.3 million as of March 30, 2025 and December 29, 2024, respectively.

Workers’ compensation cost consists primarily of changes in self-insurance reserves net of changes in discount, monopolistic jurisdictions’ premiums, insurance premiums and other miscellaneous expenses. Workers’ compensation cost of $1.2 million and $5.3 million was recorded in cost of services on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen weeks ended March 30, 2025 and March 31, 2024, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 8: LONG-TERM DEBT

We have a revolving credit agreement with Bank of America, N.A., PNC Bank, N.A., HSBC Bank USA, N.A., Wells Fargo Bank, N.A., and Key Bank, N.A. dated as of February 9, 2024 (the “Revolving Credit Facility”). The Revolving Credit Facility provides for a revolving line of credit of up to $255.0 million, and matures on February 9, 2029. We have an option to increase the amount to $405.0 million, subject to lender approval. Included in the Revolving Credit Facility is a $25.0 million sub-limit for “Swingline” loans and a $25.0 million sub-limit for letters of credit. As of March 30, 2025, $57.8 million was drawn on the Revolving Credit Facility, which included $42.0 million of one-month Term Secured Overnight Financing Rate (“SOFR”) Loans, $15.8 million of Swingline loans, and $2.7 million utilized by outstanding standby letters of credit, leaving $194.5 million unused under the Revolving Credit Facility. We are constrained by our most restrictive covenant, making $70.9 million available for additional borrowing. As of December 29, 2024, $7.6 million was drawn on the Revolving Credit Facility as a Swingline loan and $2.7 million was utilized by outstanding standby letters of credit.

Under the terms of the Revolving Credit Facility, we have the option to borrow funds under the revolving line of credit as a Term SOFR Loan, for a one-, three- or six-month term, or as a Base Rate Loan, as defined in the Revolving Credit Facility. Under a Term SOFR Loan, we are required to pay a variable rate of interest on funds borrowed based on the Term SOFR Screen Rate two days prior for the equivalent term, plus an adjustment of 0.10%, plus an applicable spread between 1.75% and 3.50%. Under a Base Rate Loan we are required to pay a variable rate of interest on funds borrowed based on a base rate plus an applicable spread between 0.75% and 2.50%. The base rate is the greater of the one-month Term SOFR Screen Rate two days prior plus 1.00%, the prime rate (as announced by Bank of America), or the federal funds rate plus 0.50%. The applicable spread is determined by the consolidated leverage ratio, as defined in the Revolving Credit Facility. As of March 30, 2025, the outstanding balance under Term SOFR loans carried an applicable spread on the base rate of 1.75% and a base rate of 4.42%, resulting in an interest rate of 6.17%. The Term SOFR loans were primarily used to fund the acquisition of HSP.

Under a Swingline loan, we are required to pay a variable rate of interest on funds borrowed based on the base rate plus applicable spread between 0.75% and 2.50%, as described above. As of March 30, 2025, the applicable spread on the base rate was 0.75% and the base rate was 7.50%, resulting in an interest rate of 8.25%.

A commitment fee between 0.35% and 0.50% is applied against the Revolving Credit Facility’s unused borrowing capacity, with the specific rate determined by the consolidated leverage ratio, as defined in the Revolving Credit Facility. Letters of credit are priced at a margin between 1.50% and 3.25%, with the specific rate determined by the consolidated leverage ratio, plus a fronting fee of 0.25%.

Obligations under the Revolving Credit Facility are guaranteed by TrueBlue and material U.S. domestic subsidiaries, and are secured by substantially all of the assets of TrueBlue and material U.S. domestic subsidiaries. The Revolving Credit Facility contains customary representations and warranties, events of default, and affirmative and negative covenants, including, among others, financial covenants.

The following financial covenants, as defined in the Revolving Credit Facility, were in effect as of March 30, 2025:

•Consolidated fixed charge coverage ratio greater than 1.25, defined as the trailing twelve months bank-adjusted cash flow divided by cash interest expense. As of March 30, 2025, our consolidated fixed charge coverage ratio was 2.14.

•Asset coverage ratio of greater than 1.00, defined as the ratio of (a) 60% of accounts receivable to (b) total debt outstanding less unrestricted cash in excess of $50.0 million, subject to certain minimums. Under this covenant we are limited to $25.0 million in aggregate share repurchases in any twelve-month period. As of March 30, 2025, our asset coverage ratio was 2.17.

The following financial covenant, as defined in the Revolving Credit Facility, will replace the asset coverage ratio beginning the fiscal first quarter of 2026, or earlier at our discretion, subject to the terms of the agreement:

•Consolidated leverage ratio less than 3.00, defined as our funded indebtedness divided by trailing twelve months consolidated EBITDA, as defined in the Revolving Credit Facility.

As of March 30, 2025, we were in compliance with all effective covenants related to the Revolving Credit Facility.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 9: COMMITMENTS AND CONTINGENCIES

Workers’ compensation commitments

We have provided our insurance carriers and certain states with commitments in the form and amounts listed below:


(in thousands)	March 30, 2025		December 29, 2024
Cash collateral held by workers’ compensation insurance carriers	$	18,255	$	18,082
Cash and cash equivalents held in Trust	18,229		15,406
Investments held in Trust	88,671		99,506
Letters of credit (1)	2,605		2,605
Surety bonds (2)	19,809		19,831
Total collateral commitments	$	147,569	$	155,430

(1)We have agreements with certain financial institutions to issue letters of credit as collateral.

(2)Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which are determined by each independent surety carrier. These fees do not exceed 2.0% of the bond amount, subject to a minimum charge. The terms of these bonds are subject to review and renewal every one to four years and most bonds can be canceled by the sureties with as little as 60 days’ notice.

Legal contingencies and developments

We are involved in various proceedings arising in the normal course of conducting business. We believe the liabilities included in our financial statements reflect the probable loss that can be reasonably estimated and are immaterial. We also believe that the aggregate range of reasonably possible losses for the Company's exposure in excess of the amount accrued is expected to be immaterial to the Company. It remains possible that despite our current belief, material differences in actual outcomes or changes in management's evaluation or predictions could arise that could have a material effect on the Company's financial condition, results of operations or cash flows.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 10: SHAREHOLDERS' EQUITY

Changes in the balance of each component of shareholders’ equity during the reporting periods were as follows:


	Thirteen weeks ended
(in thousands)	March 30, 2025		March 31, 2024

Common stock shares
Beginning balance	29,588		31,246
Purchases and retirement of common stock	—		(857)
Net issuance under equity plans, including tax benefits	245		165

Ending balance	29,833		30,554

Common stock amount
Beginning balance	$	1	$	1
Current period activity	—		—
Ending balance	1		1

Retained earnings
Beginning balance	337,551		478,584
Net income (loss)	(14,348)		(1,698)
Purchases and retirement of common stock (1)	—		(10,067)
Net issuance under equity plans, including tax benefits	(825)		(1,788)
Stock-based compensation	2,060		2,102

Ending balance	324,438		467,133

Accumulated other comprehensive income (loss)
Beginning balance, net of tax	(22,193)		(20,712)
Foreign currency translation adjustment before reclassification	(29)		915
Reclassified from accumulated other comprehensive income (loss) (2)	—		(973)
Foreign currency translation adjustment	(29)		(58)
Ending balance, net of tax	(22,222)		(20,770)

Total shareholders’ equity ending balance	$	302,217	$	446,364

(1)Under applicable Washington State law, shares purchased are not displayed separately as treasury stock on our Consolidated Balance Sheets and are treated as authorized but unissued shares. It is our accounting policy to first record these purchases and the related excise tax as a reduction to our common stock account. Once the common stock account has been reduced to a nominal balance, remaining purchases are recorded as a reduction to our retained earnings. Furthermore, activity in our common stock account related to stock-based compensation is also recorded to retained earnings until such time as the reduction to retained earnings due to stock repurchases has been recovered.

(2)Foreign currency translation adjustments related to Labour Ready Temporary Services, Ltd. (“PeopleReady Canada”) that were recognized through net income (loss) upon the divestiture of the business during the thirteen weeks ended March 31, 2024.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 11: INCOME TAXES

Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for any discrete items that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate and, if our estimated tax rate changes, we make a cumulative adjustment. Our quarterly tax provision and quarterly estimate of our annual effective tax rate are subject to variation due to several factors, including variability in accurately predicting our full year pre-tax income or loss by jurisdiction, tax credits, government audit developments, changes in laws, regulations and administrative practices, valuation allowances recorded on deferred tax assets, and relative changes in expenses or losses for which tax benefits are not recognized. Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss. For example, the impact of discrete items, tax credits, and non-deductible expenses on our effective tax rate is greater when our pre-tax income or loss is lower.

We recognize deferred tax assets to the extent we believe it is more likely than not the asset will be realized. Quarterly, management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of existing deferred tax assets, including future reversals of existing taxable temporary differences, projected taxable income, tax-planning strategies, carryback potential if permitted, and the results of recent operations. A significant piece of objective negative evidence is the existence of a three-year cumulative loss. Such objective negative evidence limits the ability of management to consider other subjective evidence, such as projected taxable income. When appropriate, we record a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized.

During the thirteen weeks ended March 30, 2025, we performed our deferred tax asset realizability assessments, and as a result we maintained a valuation allowance against our U.S. federal, state and certain foreign deferred tax assets. Our conclusion was driven by U.S. and foreign pre-tax losses beginning in 2023, combined with the non-cash goodwill impairment charge of $59.1 million recorded during fiscal 2024.

Our effective income tax rate for the thirteen weeks ended March 30, 2025 was (3.0)%. The difference between the statutory federal income tax rate of 21.0% and our effective tax rate was primarily due to the valuation allowance against our U.S. federal, state and certain foreign deferred tax assets.

NOTE 12: NET INCOME (LOSS) PER SHARE

Diluted common shares were calculated as follows:


	Thirteen weeks ended
(in thousands, except per share data)	March 30, 2025		March 31, 2024
Net income (loss)	$	(14,348)	$	(1,698)

Weighted average number of common shares used in basic net income (loss) per common share	29,698		31,102
Dilutive effect of non-vested stock-based awards	—		—
Weighted average number of common shares used in diluted net income (loss) per common share	29,698

SEC Form 10-Q filed by TrueBlue Inc.