TrueBlue (NYSE:TBI) reported first-quarter financial results on Tuesday. The transcript from the company’s first-quarter earnings call has been provided below.
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The full earnings call is available at https://event.choruscall.com/mediaframe/webcast.html?webcastid=lHMQeuuq
Summary
TrueBlue reported a net loss of $20 million for the quarter, including a $4 million non-cash goodwill impairment charge, with an adjusted net loss of $12 million and adjusted EBITDA of negative $3 million.
PeopleReady segment grew by 19% driven by strong performance in the energy vertical, with profit margins up 10 basis points due to cost efficiencies.
People Management revenue declined by 6%, but secured $13 million in new business wins, with profit margins up 50 basis points.
People Solutions revenue grew by 2%, with segment profit margins up 150 basis points, driven by operational efficiencies and expansion in higher-skilled markets.
The company reported $24 million in cash and $74 million in debt, transitioning its credit agreement to an asset-backed structure for greater flexibility.
TrueBlue expects 2% to 8% revenue growth in the second quarter of 2016, with anticipated growth across skilled business segments and improved profitability.
Management highlighted the strategic use of AI to improve efficiency and growth, particularly in data centers and skilled trades related to energy projects.
Company’s focus remains on managing costs, achieving operational efficiencies, and maintaining a strong liquidity position to capitalize on growth opportunities.
Full Transcript
OPERATOR
For the quarter. This improved leverage demonstrates our commitment to effectively manage costs and deliver enhanced profitability. We’ve made significant progress creating greater flexibility to scale and driving efficiencies that position us well to deliver strong incremental margins as industry demand improves and we continue to advance our growth initiatives. We reported a net loss of 20 million this quarter which included a non cash goodwill impairment charge of $4 million driven largely by our lower share price and market capitalization during the quarter. Our results also included a small amount of income tax expense primarily associated with our foreign operations and essentially zero income tax benefit on US Operations due to the valuation allowance in effect on our US Deferred tax assets. As a reminder, the impairment charge and valuation allowance have no impact on our operations or liquidity. Adjusted net loss was 12 million while adjusted EBITDA was negative 3 million for the quarter. Now let’s turn to our segments. PeopleReady grew 19% driven by continued outperformance in the energy vertical. Revenue in the energy sector more than doubled for the third consecutive quarter as our team continues to leverage our strong market position and deep client relationships to capture share in this growing market. Our on demand business is also showing improved trends, especially in the territories where we have invested in sales resources and we were encouraged to see the east region of the U.S. return to growth this quarter despite the workers compensation headwind I mentioned earlier. PeopleReady segment profit margin was up 10 basis points driven by targeted cost actions to deliver efficiencies and improved profitability. People management revenue declined 6% due to lower on site volumes, primarily in the retail vertical and consistent with the macro conditions in that space. While client volumes declined for the quarter, we are building momentum having secured 13 million in annualized new business wins during the first quarter alone and positioning the business well to drive revenue expansion. Our commercial driver business also continues to outperform, delivering its ninth consecutive quarter of growth as our strong client relationships and deep expertise drive continued success capturing rising demand. People Management segment Profit margin was up 50 basis points due to disciplined cost management actions to drive improved efficiencies and greater scalability. People Solutions revenue grew 2% with HSP performing in line with expectations and driving the year over year growth on an organic basis. People Solutions declined 7% as overall hiring volumes remain subdued. While clients continue to navigate evolving market conditions, we are encouraged to see signs of stabilization with growing momentum in new business wins and expansions. We are adding new clients to our portfolio and expanding existing relationships especially with higher skilled roles and serving growing end markets with long term secular tailwinds as client hiring volumes return. The scale of these engagements positioned us well to accelerate growth. People Solutions segment profit margin was up 150 basis points, primarily driven by cost actions to deliver efficiencies and greater operating leverage. Now let’s turn to the balance sheet. We finished the quarter with $24 million in cash, $74 million of debt and 36 million unused on our borrowing base resulting in total liquidity of 60 million effective January 30th. We transitioned our revolving credit agreement to an asset backed structure creating greater flexibility given our strong working capital position. We also reduced the size of the facility to better align with our capital priorities resulting in cost savings as we lowered the fees associated with the unused portion of the facility. We remain committed to managing a strong liquidity position and financial foundation to ensure we are well positioned to capitalize on the growth opportunities ahead. Looking ahead to the second quarter of 2016, we expect revenue growth of 2% to 8% year over year as we continue to build on our success in recent quarters. With strong momentum in attractive markets, we expect growth across all of our skilled businesses and a return to double digit segment profit margins for our People Solutions segment. We expect sequential gross margin expansion of 130 to 170 basis points paired with continued cost discipline leading to improved profitability. Also keep in mind that we typically see our highest volumes in the second half of the year due to the seasonality of our business. So while we expect improved operating leverage in the second quarter, our lean cost structure will lead to further margin improvement as we move through 2026. Additional information on our outlook can be found in our earnings presentation shared on our website today. Before we open the call up for questions, I want to turn it back over to Taryn for some closing remarks.
Taryn
Thank you Carl. And as you have heard from us today, our strategic focus is producing meaningful results and there is still more work to be done. We are executing our growth strategy with discipline and focus, strengthening our market position with an enhanced sales model and market expansion while unlocking efficiencies through technology and operational excellence to deliver sustainable, profitable growth. We have the right people structure and strategy to propel TrueBlue forward and as our focused actions drive improved results, we are well positioned to deliver on our commitment to accelerate growth, enhance shareholder value and advance our mission to connect people and work. This concludes our prepared remarks. Operator Please open the call now for questions.
OPERATOR
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two to remove yourself from the queue. For participants using the speaker equipment, it may be necessary to pick up the handset before pressing the star keys. We’ll pause for …
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