UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

	
 	
FORM 8-K

	
 	
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 7, 2018

	

TRUEBLUE, INC.
(Exact Name of Registrant as Specified in Its Charter)

	
 	
Washington
(State or Other Jurisdiction
of Incorporation)

			
001-14543	 	91-1287341	
(Commission
File Number)	 	(IRS Employer
Identification No.)	

	
			
1015 A Street, Tacoma, Washington	 	98402	
(Address of Principal Executive Offices)	 	(Zip Code)	
(253) 383-9101
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

	
 	
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

		
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

		
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

		
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	

		
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ¨

					

	
		
Item 2.02.	Results of Operations and Financial Condition.	

On February 7, 2018 , TrueBlue, Inc. (the “company”) issued a press release (the “Press Release”) reporting its financial results for the fourth quarter ended December 31, 2017 , and revenue and earnings guidance for the first quarter of 2018 , a copy of which is attached hereto as Exhibit 99.1 and the contents of which are incorporated herein by this reference. Also attached to this report as Exhibit 99.2 is a slide presentation relating to the financial results for the fourth quarter and fiscal year ended December 31, 2017 (the “Earnings Results Presentation”), which will be discussed by management of the company on a live conference call at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on Wednesday, February 7, 2018 . The Earnings Results Presentation is also available on the company's website at www.trueblue.com.

In accordance with General Instruction B.2. of Form 8-K, the information contained above in this report (including the Press Release and the Earnings Results Presentation) shall not be deemed “Filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall the Press Release or the Earnings Results Presentation be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. This report will not be deemed a determination or an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD.

	
		
Item 7.01.	Regulation FD Disclosure.	
We are also attaching our Investor Presentation (the "Investor Presentation") to this report as Exhibit 99.3, which we will reference in our Q4 2017 earnings results discussion and which may be used in future investor conferences. The Investor Presentation is also available on the company's website at www.trueblue.com.
In accordance with General Instruction B.2. of Form 8-K, the information contained above in this report (including the Investor Presentation) shall not be deemed “Filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall the Investor Presentation be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. This report will not be deemed a determination or an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD.

		
Item 9.01.	Financial Statements and Exhibits.	
		
(d)	Exhibits	
		
99.1	Press Release dated February 7, 2018	
		
99.2	Earnings Results Presentation for February 7, 2018 conference call	
		
99.3	Investor Presentation	

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	

 	 	TRUEBLUE, INC.	
 	 	(Registrant)	
 	 	 	
Date:	2/7/2018	By:	 	/s/ Derrek L. Gafford	
 	 	 	 	Derrek L. Gafford	
 	 	 	 	Chief Financial Officer and Executive Vice President	

EXHIBIT INDEX

			
Exhibit
Number	Exhibit Description	Filed Herewith	
99.1	Press Release dated February 7, 2018	X	
99.2	Earnings Results Presentation for February 7, 2018 conference call	X	
99.3	Investor Presentation	X	

TRUEBLUE REPORTS FISCAL FOURTH QUARTER 2017 RESULTS

TACOMA, WA-February 7, 2018 -- TrueBlue, Inc. (NYSE:TBI) announced today its fiscal fourth quarter 2017 results.

Revenue was $670 million , a decrease of 9 percent , compared to revenue of $735 million in the fiscal fourth quarter of 2016 . Excluding the previously disclosed reduction in the scope of services provided to the company's former largest customer, revenue declined by 8 percent . Net income per diluted share was $0.40 compared to $0.43 in the fiscal fourth quarter of 2016 . Adjusted net income per diluted share 1 was $0.51 compared to $0.56 in the fiscal fourth quarter of 2016 .

The fiscal fourth quarter of 2016 included a 14 th week and two additional days from moving the week-ending date from Friday to Sunday. On a comparable basis, 2 revenue for the fiscal fourth quarter declined by 2 percent , or excluding the company's former largest customer, revenue declined by 1 percent .

“We saw improving fundamentals this quarter driven by strong execution across the business,” TrueBlue CEO Steve Cooper said. “The broad-based improvements in the PeopleReady and PeopleManagement third quarter revenue trends continued throughout the fourth quarter, and PeopleScout delivered another quarter of double-digit growth.
“We also made additional progress with our digital strategy. Adoption of JobStack TM , our PeopleReady mobile app, continued to climb, and we also launched Affinix TM in our PeopleScout business, a next generation technology that improves the candidate experience and streamlines the sourcing process.”

2018 Outlook

The company estimates revenue for the fiscal first quarter of 2018 will range from $557 million to $572 million . It also expects net income per diluted share will range from $0.03 to $0.11 . Adjusted net income per diluted share is expected to be $0.18 to $0.24 .
The company estimates its historical effective income tax rate of 28 percent will drop to roughly 16 percent in fiscal 2018 and 2019 as a result of recent tax reform legislation. The lower rate could extend beyond 2019 if Congress extends the Work Opportunity Tax Credit (WOTC). If the WOTC is not extended beyond 2019, the company estimates its effective income tax rate will return to roughly 28 percent.

Management will discuss fiscal fourth quarter 2017 results on a webcast at 2 p.m. PT (5 p.m. ET), today, Wednesday, Feb. 7. The webcast can be accessed on TrueBlue’s website:  www.trueblue.com .

About TrueBlue:

TrueBlue (NYSE: TBI) is a leading provider of specialized workforce solutions that help clients create growth, improve efficiency and increase reliability. TrueBlue connected approximately 740,000 people with work during 2017 in a wide variety of industries through its PeopleReady segment offering industrial staffing services, PeopleManagement segment offering contingent and productivity-based onsite staffing services, and PeopleScout segment offering Recruitment Process Outsourcing (RPO) and Managed Service Provider (MSP) solutions. Learn more at www.trueblue.com .

1 See the financial statements accompanying the release and the company’s website for more information on non-GAAP terms.
2 The comparable period in 2016 excludes the first week (ended Sept. 30) of the fourth quarter and the two additional days associated with the change in week-ending date.

Forward-looking Statements

This document contains forward-looking statements relating to our plans and expectations, all of which are subject to risks and uncertainties. Such statements are based on management’s expectations and assumptions as of the date of this release and involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied in our forward-looking statements including: (1) national and global economic conditions, (2) our ability to attract and retain customers, (3) our ability to maintain profit margins, (4) new laws and regulations that could have a material effect on our operations or financial results, (5) our ability to successfully complete and integrate acquisitions (6) our ability to attract sufficient qualified candidates and employees to meet the needs of our customers, (7) our ability to successfully execute on new business strategies and initiatives such as the consolidation of our service lines and leveraging of mobile technology, and (8) uncertainty surrounding the interpretation and application of the recent 2017 Tax Cuts and Jobs Act and any reduction or change in tax credits we utilize, including the Work Opportunity Tax Credit. Other information regarding factors that could affect our results is included in our Securities Exchange Commission (SEC) filings, including the company's most recent reports on Forms 10-K and 10-Q, copies of which may be obtained by visiting our website at www.trueblue.com under the Investor Relations section or the SEC's website at

www.sec.gov. We assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. Any other reference to future financial estimates are included for informational purposes only and subject to risk factors discussed in our most recent filings with the SEC.

In addition, we use several non-GAAP financial measures when presenting our financial results in this document. Please refer to the reconciliations between our GAAP and non-GAAP financial measures in the appendix to this document and on our website at www.trueblue.com under the Investor Relations section for a complete perspective on both current and historical periods. The presentation of these non-GAAP financial measures is used to enhance the understanding of certain aspects of our financial performance. It is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies.

Contact:
Derrek Gafford, EVP & CFO
253-680-8214

TRUEBLUE, INC.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	
														
 	Q4 2017	Q4 2016	 	2017	2016	
 	13 Weeks Ended	14 Weeks Ended (1)	 	52 Weeks Ended	53 Weeks Ended (1)	
(in thousands, except per share data)	Dec 31, 2017	Jan 1, 2017	 	Dec 31, 2017	Jan 1, 2017	
Revenue from services	$	669,625		$	734,951		 	$	2,508,771		$	2,750,640		
Cost of services	501,880		554,064		 	1,874,298		2,070,922		
Gross profit	167,745		180,887		 	634,473		679,718		
Selling, general and administrative expense	132,644		145,387		 	510,794		546,477		
Depreciation and amortization	11,465		12,019		 	46,115		46,692		
Goodwill and intangible asset impairment charge	—		—		 	—		103,544		
Income (loss) from operations	23,636		23,481		 	77,564		(16,995	)	
Interest and other income (expense), net	(24	)	(572	)	 	(14	)	(3,345	)	
Income (loss) before tax expense	23,612		22,909		 	77,550		(20,340	)	
Income tax expense (benefit)	7,185		4,822		 	22,094		(5,089	)	
Net income (loss)	$	16,427		$	18,087		 	$	55,456		$	(15,251	)	
 	 	 	 	 	 	
Net income (loss) per common share:	 	 	 	 	 	
Basic	$	0.41		$	0.43		 	$	1.35		$	(0.37	)	
Diluted	$	0.40		$	0.43		 	$	1.34		$	(0.37	)	
 	 	 	 	 	 	
Weighted average shares outstanding:	 	 	 	 	 	
Basic	40,545		41,638		 	41,202		41,648		
Diluted	40,856		41,980		 	41,441		41,648		

(1)	Our fiscal period ends on the Sunday closest to the last day of Dec. In fiscal years consisting of 53 weeks, the final quarter consists of 14 weeks, while in fiscal years consisting of 52 weeks, all quarters consist of 13 weeks.	

TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(Unaudited)

	
								
 	2017	 	2016	
(in thousands)	Dec 31, 2017	 	Jan 1, 2017	
ASSETS	 	 	 	
Cash and cash equivalents	$	28,780		 	$	34,970		
Accounts receivable, net	374,273		 	352,606		
Other current assets	25,226		 	40,227		
Total current assets	428,279		 	427,803		
Property and equipment, net	60,163		 	63,998		
Restricted cash and investments	239,231		 	231,193		
Goodwill and intangible assets, net	331,309		 	349,894		
Other assets, net	50,049		 	57,557		
Total assets	$	1,109,031		 	$	1,130,445		
 	 	 	 	
LIABILITIES AND SHAREHOLDERS’ EQUITY	 	 	 	
Current liabilities	212,419		 	251,135		
Long-term debt, less current portion	116,489		 	135,362		
Other long-term liabilities	225,276		 	218,769		
Total liabilities	554,184		 	605,266		
Shareholders' equity	554,847		 	525,179		
Total liabilities and shareholders' equity	$	1,109,031		 	$	1,130,445		

TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
( Unaudited)

								
 	2017	 	2016	
 	52 Weeks Ended	 	53 Weeks Ended	
(in thousands)	Dec 31, 2017	 	Jan 1, 2017	
Cash flows from operating activities:	 	 	 	
Net income (loss)	$	55,456		 	$	(15,251	)	
Adjustments to reconcile net income (loss)   to net cash provided by operating activities:	 	 	 	
Depreciation and amortization	46,115		 	46,692		
Goodwill and intangible asset impairment charge	—		 	103,544		
Provision for doubtful accounts	6,808		 	8,308		
Stock-based compensation	7,744		 	9,363		
Deferred income taxes	2,440		 	(25,355	)	
Other operating activities	2,066		 	7,910		
Changes in operating assets and liabilities, net of effects of acquisition of business:	 	 	 	
Accounts receivable	(28,483	)	 	112,785		
Income tax receivable	14,875		 	9,450		
Other assets	5,289		 	470		
Accounts payable and other accrued expenses	(10,569	)	 	(4,101	)	
Accrued wages and benefits	(2,888	)	 	(7,313	)	
Workers’ compensation claims reserve	(1,048	)	 	11,070		
Other liabilities	2,046		 	4,182		
Net cash provided by operating activities	99,851		 	261,754		
Cash flows from investing activities:	 	 	 	
Capital expenditures	(21,958	)	 	(29,042	)	
Acquisition of business	—		 	(72,476	)	
Change in restricted cash	21,505		 	(19,773	)	
Purchases of restricted investments	(50,601	)	 	(37,173	)	
Maturities of restricted investments	20,157		 	15,248		
Net cash used in investing activities	(30,897	)	 	(143,216	)	
Cash flows from financing activities:	 	 	 	
Purchases and retirement of common stock	(36,680	)	 	(5,748	)	
Net proceeds from stock option exercises and employee stock purchase plans	1,646		 	1,542		
Common stock repurchases for taxes upon vesting of restricted stock	(3,127	)	 	(2,851	)	
Net change in revolving credit facility	(16,607	)	 	(105,579	)	
Payments on debt	(2,267	)	 	(2,456	)	
Payment of contingent consideration at acquisition date fair value	(18,300	)	 	—		
Other	—		 	(29	)	
Net cash used in financing activities	(75,335	)	 	(115,121	)	
Effect of exchange rate changes on cash and cash equivalents	191		 	1,772		
Net change in cash and cash equivalents	(6,190	)	 	5,189		
Cash and cash equivalents, beginning of period	34,970		 	29,781		
Cash and cash equivalents, end of period	$	28,780		 	$	34,970		

TRUEBLUE, INC.
FISCAL 2016 COMPARABLE 13- AND 52-WEEK PERIODS
( Unaudited)

As previously reported, the company's 2016 fiscal fourth quarter includes a 14th week and two additional days from moving the week-ending date from Friday to Sunday. To facilitate comparison to the current year, the company is providing 13-week and 52-week comparable operating results.

								
 	Q4 2016	 	2016	
 	13-Week Comparable Period  (1)	 	52-Week Comparable Period (1)	
(in thousands, except per share data)		 		
Revenue from services	$	680,709		 	$	2,696,398		
Cost of services	512,501		 	2,029,359		
Gross profit	168,208		 	667,039		
Selling, general and administrative expense	135,435		 	536,525		
Depreciation and amortization	11,127		 	45,800		
Goodwill and intangible asset impairment charge	—		 	103,544		
Income (loss) from operations	21,646		 	(18,830	)	
Interest and other income (expense), net	(521	)	 	(3,294	)	
Income (loss) before tax expense	21,125		 	(22,124	)	
Income tax expense (benefit)	4,334		 	(5,577	)	
Net income (loss)	$	16,791		 	$	(16,547	)	
 	 	 	 	
Net income (loss) per common share:	 	 	 	
Basic	$	0.40		 	$	(0.40	)	
Diluted	$	0.40		 	$	(0.40	)	
 	 	 	 	
Weighted average shares outstanding:	 	 	 	
Basic	41,638		 	41,648		
Diluted	41,980		 	41,648		
		
(1)	The 13-week comparable period represents the 13 weeks ended Jan. 1 2017. The 52-week comparable period represents the sum of the 13 weeks ended Jan. 1, 2017 and the 39 weeks ended Sept. 23, 2016.	

TRUEBLUE, INC.
NON-GAAP FINANCIAL MEASURES AND NON-GAAP RECONCILIATIONS

In addition to financial measures presented in accordance with U.S. GAAP, we monitor certain non-GAAP key financial measures. The presentation of these non-GAAP financial measures is used to enhance the understanding of certain aspects of our financial performance. It is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies.

				
Non-GAAP Measure	Definition	 	Purpose of Adjusted Measures	
EBITDA and Adjusted EBITDA	EBITDA excludes from net income (loss) the effects of:
- interest expense,
- income taxes, and
- depreciation and amortization.

Adjusted EBITDA, further excludes the effects of:
- acquisition/integration and other costs,
- goodwill and intangible asset impairment charge, and
- Work Opportunity Tax Credit third-party processing fees.
	 	- Enhances comparability on a consistent basis and provides investors with useful insight into the underlying trends of the business.

- Used by management to assess performance and effectiveness of our business strategies by excluding certain non-cash charges.

- Provides a measure, among others, used in the determination of incentive compensation for management.	
Adjusted net income (loss) and Adjusted net income (loss), per diluted share	Net income (loss) and net income (loss) per diluted share, excluding the effects of:
- acquisition/integration and other costs,
- goodwill and intangible asset impairment charge,
- amortization of intangibles of acquired businesses, as well as accretion expense related to acquisition earn-out,
- tax effect of each adjustment to U.S. GAAP net income (loss), and
- adjusted income taxes to the expected effective tax rate.	 	- Enhances comparability on a consistent basis and provides investors with useful insight into the underlying trends of the business.

- Used by management to assess performance and effectiveness of our business strategies by excluding certain non-cash charges.

		
1.	RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME, PER DILUTED SHARE ON A FISCAL AND COMPARABLE PERIOD BASIS	
( Unaudited )

																			
 	Q4 2017	 	Q4 2016	 	Q1 2018 Outlook	
 	13 Weeks Ended	 	14 Weeks Ended	13-Week Comparable Period (6)	 	13 Weeks Ended	
(in thousands, except for per share data)*	Dec 31, 2017	 	Jan 1, 2017		 	Apr 1, 2018	
Net income	$	16,427		 	$	18,087		$	16,791		 	$	1,300		—	$	4,600		
Acquisition/integration and other costs (1)	162		 	4,002		4,002		 	2,000	—	1,000		
Amortization of intangible assets of acquired businesses (3)	5,331		 	6,391		5,934		 	5,200	
Tax effect of adjustments to net income (4)	(1,538	)	 	(2,910	)	(2,782	)	 	(1,200)	—	(1,000	)	
Adjust income taxes to normalized effective rate (5)	574		 	(1,593	)	(1,581	)	 	—	
Adjusted net income	$	20,956		 	$	23,977		$	22,364		 	$	7,300		—	$	9,800		
 	 	 	 	 	 	 	 	 	
Adjusted net income, per diluted share	$	0.51		 	$	0.56		$	0.52		 	$	0.18		—	$	0.24		
 	 	 	 	 	 	 	 	 	
Diluted weighted average shares outstanding	40,856		 	41,980		41,980		 	40,600	
* Totals   may not sum due to   rounding	 	 	 	 	 	 	 	 	

	
											
 	2017	 	2016	
 	52 Weeks Ended	 	53 Weeks Ended	52-Week	
(in thousands, except for per share data)*	Dec 31, 2017	 	Jan 1, 2017	Comparable Period (6)	
Net income (loss)	$	55,456		 	$	(15,251	)	$	(16,547	)	
Acquisition/integration and other costs (1)	162		 	12,223		12,223		
Goodwill and intangible asset impairment charge (2)	—		 	103,544		103,544		
Amortization of intangible assets of acquired businesses (3)	22,290		 	27,069		26,612		
Tax effect of adjustments to net income (4)	(6,287	)	 	(39,994	)	(39,866	)	
Adjust income taxes to normalized effective rate (5)	380		 	606		618		
Adjusted net income	$	72,001		 	$	88,197		$	86,584		
 	 	 	 	 	
Adjusted net income, per diluted share	$	1.74		 	$	2.10		$	2.06		
 	 	 	 	 	
Diluted weighted average shares outstanding	41,441		 	41,968		41,968		
* Totals   may not sum due to   rounding	 	 	 	 	

2.	RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA ON A FISCAL AND COMPARABLE PERIOD BASIS	
( Unaudited )

																			
 	Q4 2017	 	Q4 2016	 	Q1 2018 Outlook	
 	13 Weeks Ended	 	14 Weeks Ended	13-Week Comparable Period (6)	 	13 Weeks Ended	
(in thousands)*	Dec 31, 2017	 	Jan 1, 2017		 	Apr 1, 2018	
Net income	$	16,427		 	$	18,087		$	16,791		 	$	1,300		—	$	4,600		
Income tax expense	7,185		 	4,822		4,334		 	200		—	900		
Interest and other income (expense), net	24		 	572		521		 	(200)	
Depreciation and amortization	11,465		 	12,019		11,127		 	11,000	
EBITDA	35,101		 	35,500		32,773		 	12,300		—	16,300		
Acquisition/integration and other costs (1)	162		 	4,002		4,002		 	2,000	—	1,000		
Work Opportunity Tax Credit processing fees (7)	337		 	276		276		 	200	
Adjusted EBITDA	$	35,600		 	$	39,778		$	37,051		 	$	14,500		—	$	17,500		
* Totals may not sum due to rounding	 	 	 	 	 	 	 	 	

											
 	2017	 	2016	
 	52 Weeks Ended	 	53 Weeks Ended	52-Week	
(in thousands)*	Dec 31, 2017	 	Jan 1, 2017	Comparable Period (6)	
Net income (loss)	$	55,456		 	$	(15,251	)	$	(16,547	)	
Income tax expense (benefit)	22,094		 	(5,089	)	(5,577	)	
Interest and other income (expense), net	14		 	3,345		3,294		
Depreciation and amortization	46,115		 	46,692		45,800		
EBITDA	123,679		 	29,697		26,970		
Acquisition/integration and other costs (1)	162		 	12,223		12,223		
Goodwill and intangible asset impairment charge (2)	—		 	103,544		103,544		
Work Opportunity Tax Credit processing fees (7)	805		 	1,858		1,858		
Adjusted EBITDA	$	124,646		 	$	147,322		$	144,595		
* Totals may not sum due to rounding	 	 	 	 	

3.	RECONCILIATION OF U.S. GAAP REVENUE TO REVENUE EXCLUDING THE COMPANY'S FORMER LARGEST CUSTOMER ON A FISCAL AND COMPARABLE PERIOD BASIS	
( Unaudited )
Due to a previously announced reduction in the scope of services with its former largest customer, the company is providing results excluding this customer to help investors assess the company's underlying results with prior periods.

	
											
 	Q4 2017	 	Q4 2016	
 	13 Weeks Ended	 	14 Weeks Ended	13-Week Comparable Period (6)	
(in thousands)	Dec 31, 2017	 	Jan 1, 2017		
Revenue from services	$	669,625		 	$	734,951		$	680,709		
Former largest customer revenue	(24,052	)	 	(33,603	)	(31,687	)	
Revenue excluding former largest customer	$	645,573		 	$	701,348		$	649,022		

											
 	2017	 	2016	
 	52 Weeks Ended	 	53 Weeks Ended	52-Week	
(in thousands)	Dec 31, 2017	 	Jan 1, 2017	Comparable Period (6)	
Revenue from services	$	2,508,771		 	$	2,750,640		$	2,696,398		
Former largest customer revenue	(53,435	)	 	(171,164	)	(169,248	)	
Revenue excluding former largest customer	$	2,455,336		 	$	2,579,476		$	2,527,150		

4.	RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOWS	
(Unaudited)

								
 	2017	 	2016	
 	52 Weeks Ended	 	53 Weeks Ended	
(in thousands)	Dec 31, 2017	 	Jan 1, 2017	
Net cash provided by operating activities	$	99,851		 	$	261,754		
Capital expenditures	(21,958	)	 	(29,042	)	
Free cash flows	$	77,893		 	$	232,712		

(1)	Other charges for the 13 weeks and 52 weeks ended Dec. 31, 2017, include a workforce reduction charge of $2.5 million primarily associated with employee reductions in the PeopleReady business, offset by $2.3 million of workers' compensation benefit. The workers' compensation benefit is associated with the favorable settlement of insurance coverage associated with a former insurance company and other items not considered part of our core operations. For the prior year periods, acquisition/integration costs related to the acquisition of the recruitment process outsourcing business of Aon Hewitt, which was completed on Jan. 4, 2016. In addition, other charges include costs associated with our exit from the Amazon delivery business of $1.8 million, and branch signage write-offs of $1.6 million due to our re-branding to PeopleReady in the fiscal third quarter of 2016. Other charges included in the Q1 2018 outlook primarily relate to cloud-based financial system upgrades.	

(2)	The goodwill and intangible asset impairment charge in the prior year included the write-off of the CLP and Spartan reporting unit trade names/trademarks of $4.3 million due to our re-branding to PeopleReady during the fiscal third quarter of 2016, and $99.3 million of impairment charges recorded in the fiscal second quarter of 2016 relating to our Staff Management | SMX, hrX and PlaneTechs reporting units. Note, our PeopleScout and hrX service lines were combined during fiscal 2016 and now represent a single operating unit (PeopleScout).	

(3) Amortization of intangible assets of acquired businesses as well as accretion expense related to the SIMOS acquisition earn-out.

(4)	Total tax effect of each of the adjustments to U.S. GAAP net income (loss) per diluted share using the expected rate of 28 percent for 2017 and 2016. We expect the tax rate to be 16 percent in Q1 2018 due to the enacted U.S. Tax Cuts and Job Act.	

(5)	Adjusts the effective income tax rate to the expected rate of 28 percent for 2017 and 2016. We expect the tax rate to be 16 percent in Q1 2018 due to the enacted U.S. Tax Cuts and Job Act.	

(6)	Our fiscal period ends on the Sunday closest to the last day of Dec. In fiscal years consisting of 53 weeks, the final quarter consists of 14 weeks, while in fiscal years consisting of 52 weeks, all quarters consist of 13 weeks. The 13-week comparable period represents the 13 weeks ended Jan. 1 2017. The 52-week comparable period represents the sum of the 13 weeks ended Jan. 1, 2017 and the 39 weeks ended Sept. 23, 2016.	

(7)	These third-party processing fees are associated with generating the Work Opportunity Tax Credits, which are designed to encourage employers to hire workers from certain targeted groups with higher than average unemployment rates and reduce our income taxes.	

TRUEBLUE, INC.
SEGMENT INFORMATION

1. SEGMENT DATA
(Unaudited)

														
 	Q4 2017	Q4 2016	 	2017	2016	
 	13 Weeks Ended	14 Weeks Ended	 	52 Weeks Ended	53 Weeks Ended	
(in thousands)	Dec 31, 2017	Jan 1, 2017	 	Dec 31, 2017	Jan 1, 2017	
Revenue from services:	 	 	 	 	 	
PeopleReady	$	393,029		$	431,388		 	$	1,511,360		$	1,629,455		
PeopleManagement	225,865		257,848		 	807,273		940,453		
PeopleScout	50,731		45,715		 	190,138		180,732		
Total company	669,625		734,951		 	2,508,771		2,750,640		
 	 	 	 	 	 	
Adjusted Segment EBITDA  (1):	 	 	 	 	 	
PeopleReady	$	21,128		$	26,348		 	$	79,044		$	109,063		
PeopleManagement	8,457		11,903		 	27,216		27,557		
PeopleScout	10,283		6,589		 	39,354		34,285		
Total Adjusted Segment EBITDA	39,868		44,840		 	145,614		170,905		
Corporate unallocated expense	(4,268	)	(5,062	)	 	(20,968	)	(23,583	)	
Total company Adjusted EBITDA	35,600		39,778		 	124,646		147,322		
Acquisition/integration and other costs (2)	(162	)	(4,002	)	 	(162	)	(12,223	)	
Goodwill and intangible asset impairment charge (3)	—		—		 	—		(103,544	)	
Work Opportunity Tax Credit processing fees (4)	(337	)	(276	)	 	(805	)	(1,858	)	
EBITDA	35,101		35,500		 	123,679		29,697		
Depreciation and amortization	(11,465	)	(12,019	)	 	(46,115	)	(46,692	)	
Interest and other income (expense), net	(24	)	(572	)	 	(14	)	(3,345	)	
Income (loss) before tax expense	23,612		22,909		 	77,550		(20,340	)	
Income tax (expense) benefit	(7,185	)	(4,822	)	 	(22,094	)	5,089		
Net income (loss)	$	16,427		$	18,087		 	$	55,456		$	(15,251	)	

2. RECONCILIATION OF SEGMENT EBITDA TO ADJUSTED SEGMENT EBITDA
( Unaudited )

																				
 	Q4 2017	 	Q4 2016	
 	13 Weeks Ended	 	14 Weeks Ended	
 	Dec 31, 2017	 	Jan 1, 2017	
(in thousands)	PeopleReady	PeopleManagement	PeopleScout	 	PeopleReady	PeopleManagement	PeopleScout	
Segment EBITDA (1)	$	20,924		$	8,284		$	10,161		 	$	26,072		$	9,766		$	6,589		
Acquisition/integration and other costs (2)	(133	)	173		122		 	—		2,137		—		
Work Opportunity Tax Credit processing fees (4)	337		—		—		 	276		—		—		
Adjusted Segment EBITDA (1)	$	21,128		$	8,457		$	10,283		 	$	26,348		$	11,903		$	6,589		

	
																				
 	2017	 	2016	
 	52 Weeks Ended	 	53 Weeks Ended	
 	Dec 31, 2017	 	Jan 1, 2017	
(in thousands)	PeopleReady	PeopleManagement	PeopleScout	 	PeopleReady	PeopleManagement	PeopleScout	
Segment EBITDA (1)	$	78,372		$	27,043		$	39,232		 	$	101,270		$	(60,452	)	$	19,116		
Acquisition/integration and other costs (2)	(133	)	173		122		 	1,660		3,909		—		
Goodwill and intangible asset impairment charge (3)	—		—		—		 	4,275		84,100		15,169		
Work Opportunity Tax Credit processing fees (4)	805		—		—		 	1,858		—		—		
Adjusted Segment EBITDA (1)	$	79,044		$	27,216		$	39,354		 	$	109,063		$	27,557		$	34,285		

3. SEGMENT DATA FOR FISCAL 2016 COMPARABLE 13- AND 52-WEEK PERIODS
( Unaudited )
As previously reported, the company's 2016 fiscal fourth quarter includes a 14th week and two additional days from moving the week-ending date from Friday to Sunday. To facilitate comparison to the current year, the company is providing 13-week and 52-week comparable operating results.

							
 	13-Week Comparable Period (5)	52-Week Comparable Period (5)	
(in thousands)			
Revenue from services:	 	 	
PeopleReady	$	395,643		$	1,593,710		
PeopleManagement	240,989		923,594		
PeopleScout	44,077		179,094		
Total company	680,709		2,696,398		
 	 	 	
Adjusted Segment EBITDA  (1):	 	 	
PeopleReady	$	23,636		$	106,351		
PeopleManagement	11,299		26,953		
PeopleScout	6,621		34,317		
Total Adjusted Segment EBITDA	$	41,556		$	167,621		
		
4.	RECONCILIATION OF SEGMENT EBITDA TO ADJUSTED SEGMENT EBITDA FOR FISCAL 2016 COMPARABLE 13- AND 52-WEEK PERIODS	
( Unaudited )

																				
 	Q4 2016	 	2016	
 	13-Week	 	52-Week	
 	Comparable Period (5)	 	Comparable Period (5)	
(in thousands)	PeopleReady	PeopleManagement	PeopleScout	 	PeopleReady	PeopleManagement	PeopleScout	
Segment EBITDA (1)	$	23,360		$	9,162		$	6,621		 	$	98,558		$	(61,056	)	$	19,148		
Acquisition/integration and other costs (2)	—		2,137		—		 	1,660		3,909		—		
Goodwill and intangible asset impairment charge (3)	—		—		—		 	4,275		84,100		15,169		
Work Opportunity Tax Credit processing fees (4)	276		—		—		 	1,858		—		—		
Adjusted Segment EBITDA (1)	$	23,636		$	11,299		$	6,621		 	$	106,351		$	26,953		$	34,317		

		
(1)	Segment earnings before interest, taxes, depreciation and amortization ("Segment EBITDA") is a primary measure of segment performance. Segment EBITDA includes net sales to third parties, related cost of sales, selling, general and administrative expenses, and goodwill and intangible asset impairment charge directly attributable to the reportable segment together with certain allocated corporate general and administrative expenses. Segment EBITDA excludes unallocated corporate general and administrative expenses. Adjusted Segment EBITDA is a non-GAAP financial measure and further excludes acquisition/integration and other costs, goodwill and intangible asset impairment charge, and Work Opportunity Tax Credit third-party processing fees. Adjusted Segment EBITDA is a key measure used by management to assess performance and, in our opinion, enhances comparability and provides investors with useful insight into the underlying trends of the business. It is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies.	

(2)	Other charges for the 13 weeks and 52 weeks ended Dec. 31, 2017, include a workforce reduction charge of $2.5 million primarily associated with employee reductions in the PeopleReady business, offset by $2.3 million of workers' compensation benefit. The workers' compensation benefit is associated with the favorable settlement of insurance coverage associated with a former insurance company and other items not considered part of our core operations. For the prior year periods, acquisition/integration costs related to the acquisition of the recruitment process outsourcing business of Aon Hewitt, which was completed on Jan. 4, 2016. In addition, other charges include costs associated with our exit from the Amazon delivery business of $1.8 million, and branch signage write-offs of $1.6 million due to our re-branding to PeopleReady in the fiscal third quarter of 2016.	

(3)	The goodwill and intangible asset impairment charge in the prior year included the write-off of the CLP and Spartan reporting unit trade names/trademarks of $4.3 million due to our re-branding to PeopleReady during the fiscal third quarter of 2016, and $99.3 million of impairment charges recorded in the fiscal second quarter of 2016 relating to our Staff Management | SMX, hrX and PlaneTechs reporting units. Note, our PeopleScout and hrX service lines were combined during fiscal 2016 and now represent a single operating unit (PeopleScout).	

(4)	These third-party processing fees are associated with generating the Work Opportunity Tax Credits, which are designed to encourage employers to hire workers from certain targeted groups with higher than average unemployment rates and reduce our income taxes.	

(5)	Our fiscal period ends on the Sunday closest to the last day of Dec. In fiscal years consisting of 53 weeks, the final quarter consists of 14 weeks, while in fiscal years consisting of 52 weeks, all quarters consist of 13 weeks. The 13-week comparable period represents the 13 weeks ended Jan. 1 2017. The 52-week comparable period represents the sum of the 13 weeks ended Jan. 1, 2017 and the 39 weeks ended Sept. 23, 2016.	

 

Forward-Looking Statements 

 

1 The fiscal fourth quarter of 2016 included a 14th week and two additional days from moving the week-ending date from Friday to Sunday. The comparable period in 2016 excludes the first week (ended Sept. 30) of the fourth quarter and the two additional days associated with the change in week-ending date. 2 The lower effective tax rate could extend beyond 2019 if Congress extends the Work Opportunity Tax Credit (WOTC). If the WOTC is not extended, the effective tax rate is expected to return to the historical rate of roughly 28%. Q4 2017 Summary Improving revenue trends  Revenue -9% for the 13-week fiscal period or -2% on a comparable basis1  Improving trends in all segments  Double-digit growth for PeopleScout Solid gross margin performance  Eighth consecutive quarter of year-over-year gross margin expansion Favorable future impact from tax reform  Effective tax rate for 2018 and 2019 expected to be roughly 16%2 Return of capital  $7 million of common stock repurchased in Q4 2017, $37 million for the year The right strategic priorities to drive growth  PeopleReady – Innovative mobile strategy and simplified brand structure  PeopleManagement – Productivity solutions and e-commerce focus  PeopleScout – #1 in market, new proprietary technology, attractive margin 

 

Financial Summary Amounts in millions, except per share data Q4 2017 Fiscal Period Compar- able FY 2017 Fiscal Period Compar- able Revenue $670 -9% -8% Ex-Amazon1 -2% -1% Ex-Amazon1 $2,509 -9% 5% Ex-Amazon1 -7% -3% Ex-Amazon1 Net Income $16.4 -9% -2% $55.5 N/A N/A Net Income Per Diluted Share $0.40 -7% 1% $1.34 N/A N/A Adjusted Net Income2 $21.0 -13% -6% $72.0 -18% -17% Adj. Net Income Per Diluted Share2 $0.51 -9% -2% $1.74 -17% -16% Adjusted EBITDA2 $35.6 -11% -4% $124.6 -15% -14% Adjusted EBITDA Margin 5.3% -10 bps -10 bps 5.0% -40 bps -40 bps 1 Due to a previously announced reduction in the scope of services with Amazon, the company is providing results excluding this customer to help investors compare the company's underlying results with prior periods. 2 See the appendix to this presentation and “Financial Information” in the investors section of our website at www.trueblue.com for a definition and full reconciliation of non-GAAP financial measures to GAAP financial results. Y/Y Change Y/Y Change 

 

24.6% 25.1% 0.3% 0.2% Q4 2016 Workers' compensation Core business Q4 2017 Gross Margin and SG&A Bridges SG&A Amounts in millions $145 $133 $10 $4 $3 $1 Q4 2016 Q4-16 14th week Q4-16 acquisition integration & other costs Workforce reduction charge Core business Q4 2017 2 Gross Margin 1 These items are excluded from Adjusted Net Income and Adjusted EBITDA: a workforce reduction charge of $2.5 million associated with the PeopleReady business, offset by $2.3 million of workers' compensation benefit in cost of services. 2 Q4-16 SG&A included an increase in the SIMOS earn-out of $1.3 million, costs associated with the exit from the Amazon delivery business of $0.8 million, and branch signage write-offs due to our re-branding to PeopleReady. 1 1 

 

Amounts in millions PeopleReady PeopleManagement PeopleScout Q4-17 FY-17 Q4-17 FY-17 Q4-17 FY-17 Revenue $393 $1,511 $226 $807 $51 $190 Fiscal Period % Growth -9% -7% -12% (-10% ex-Amazon) -14% (-2% ex-Amazon) 11% 5% Comparable % Growth -1% -5% -6% (-4% ex-Amazon) -13% (Flat ex-Amazon) 15% 6% Adj. EBITDA $21 $79 $8 $27 $10 $39 Fiscal Period % Growth -20% -28% -29% -1% 56% 15% Comparable % Growth -11% -26% -25% 1% 55% 15% % Margin Y/Y Change 5.4% -70 bps 5.2% -150 bps 3.7% -90 bps 3.4% 40 bps 20.3% 590 bps 20.7% 170 bps Improving Q4 comparable revenue trends: Additional Q4 Notes: Note: Figures may not sum to consolidated totals due to rounding. Results by Segment  -1% growth in Q4 v. -5% for Q3  Adj. EBITDA comparison impacted by size of workers’ compensation benefit in Q4 2016 and higher contingent pay rates in Q4 2017  15% growth in Q4 v. 10% for Q3  Double digit revenue growth driven by new customer wins  Recruiting process efficiencies driving higher Adjusted EBITDA margin  -6% growth in Q4 v. -9% for Q3  Adj. EBITDA comparison impacted by favorable workers’ compensation benefit in Q4 2016 

 

Segment Strategy Highlights  Worker component of JobStackTM mobile app fully deployed  1,600 customers on JobStackTM – placing orders, rating associates and entering hours  Expect 10,000 customers to be actively using JobStackTM by the end of 2018  Productivity solutions enhance future growth prospects o Compelling value proposition o Differentiated service, attractive margin o Perfect fit with the growing world of e-commerce  Global RPO market experiencing double- digit growth  Industry leading proprietary technology – recently launched AffinixTM, a next- generation HR tool  Attractive margin business with compelling value proposition Cross-Selling: Leverage opportunities with key strategic accounts 

 

31% 21% 18% 2015 2016 2017 $216 $103 $90 $30 $35 $29 $246 $138 $119 2015 2016 2017 Net Debt Cash $77 $136 $117 $30 $35 $29 $107 $171 $146 2015 2016 2017 Borrowing Availability Cash Lower Debt and Ample Liquidity Total Debt Liquidity Debt to Total Capital1 Amounts in millions Amounts in millions Note: Balances as of fiscal period end. 1 Calculated as total debt divided by the sum of total debt plus shareholders’ equity. 

 

 

Q1 2018 Outlook Revenue Outlook % Growth Notes Total $557 to $572 -2% to 1% • Stable trends for PeopleReady and PeopleManagement • Continued double digit growth for PeopleScout; new revenue recognition standard will create a quarterly timing difference during 2018. Q1 negatively impacted by 3% PeopleReady $326 to $331 -2% to 0% PeopleManagement $183 to $188 -5% to -2% PeopleScout $48 to $53 10% to 20% Profitability & Capital Expenditures Outlook Notes Net income per diluted share $0.03 to $0.11 • Assumes an effective income tax rate of 16% • $1 million negative operating income impact from new revenue recognition standard in Q1; neutral impact on 2018 • $1-2 million of add-backs included in adjusted net income for financial system upgrades • Assumes diluted weighted average shares outstanding of 40.6 million Adjusted net income per diluted share $0.18 to $0.24 Capital Expenditures $5 Amounts in millions, except per share data 

 

 

NON-GAAP FINANCIAL MEASURES AND NON-GAAP RECONCILIATIONS 12 Non-GAAP Measure Definition Purpose of Adjusted Measures EBITDA and Adjusted EBITDA EBITDA excludes from net income (loss) the effects of: - interest expense, - income taxes, and - depreciation and amortization. Adjusted EBITDA, further excludes the effects of: - acquisition/integration and other costs, - goodwill and intangible asset impairment charge, and - Work Opportunity Tax Credit third-party processing fees. - Enhances comparability on a consistent basis and provides investors with useful insight into the underlying trends of the business. - Used by management to assess performance and effectiveness of our business strategies by excluding certain non-cash charges. - Provides a measure, among others, used in the determination of incentive compensation for management. Adjusted net income (loss) and Adjusted net income (loss), per diluted share Net income (loss) and net income (loss) per diluted share, excluding the effects of: - acquisition/integration and other costs, - goodwill and intangible asset impairment charge, - amortization of intangibles of acquired businesses, as well as accretion expense related to acquisition earn-out, - tax effect of each adjustment to U.S. GAAP net income (loss), and - adjusted income taxes to the expected effective tax rate. - Enhances comparability on a consistent basis and provides investors with useful insight into the underlying trends of the business. - Used by management to assess performance and effectiveness of our business strategies by excluding certain non-cash charges. In addition to financial measures presented in accordance with U.S. GAAP, we monitor certain non-GAAP key financial measures. The presentation of these non-GAAP financial measures is used to enhance the understanding of certain aspects of our financial performance. It is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies. 

 

1. RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME, PER DILUTED SHARE ON A FISCAL AND COMPARABLE PERIOD BASIS (Unaudited) 13 Q4 2017 Q4 2016 Q1 2018 Outlook 13 Weeks Ended 14 Weeks Ended 13-Week Comparable Period (6) 13 Weeks Ended (in thousands, except for per share data)* Dec 31, 2017 Jan 1, 2017 Apr 1, 2018 Net income $ 16,427 $ 18,087 $ 16,791 $ 1,300 — $ 4,600 Acquisition/integration and other costs (1) 162 4,002 4,002 2,000 — 1,000 Amortization of intangible assets of acquired businesses (3) 5,331 6,391 5,934 5,200 Tax effect of adjustments to net income (4) (1,538 ) (2,910 ) (2,782 ) (1,200) — (1,000 ) Adjust income taxes to normalized effective rate (5) 574 (1,593 ) (1,581 ) — Adjusted net income $ 20,956 $ 23,977 $ 22,364 $ 7,300 — $ 9,800 Adjusted net income, per diluted share $ 0.51 $ 0.56 $ 0.52 $ 0.18 — $ 0.24 Diluted weighted average shares outstanding 40,856 41,980 41,980 40,600 * Totals may not sum due to rounding 2017 2016 52 Weeks Ended 53 Weeks Ended 52-Week (in thousands, except for per share data)* Dec 31, 2017 Jan 1, 2017 Comparable Period (6) Net income (loss) $ 55,456 $ (15,251 ) $ (16,547 ) Acquisition/integration and other costs (1) 162 12,223 12,223 Goodwill and intangible asset impairment charge (2) — 103,544 103,544 Amortization of intangible assets of acquired businesses (3) 22,290 27,069 26,612 Tax effect of adjustments to net income (4) (6,287 ) (39,994 ) (39,866 ) Adjust income taxes to normalized effective rate (5) 380 606 618 Adjusted net income $ 72,001 $ 88,197 $ 86,584 Adjusted net income, per diluted share $ 1.74 $ 2.10 $ 2.06 Diluted weighted average shares outstanding 41,441 41,968 41,968 * Totals may not sum due to rounding See the last slide of the appendix for footnotes. 

 

2. RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA ON A FISCAL AND COMPARABLE PERIOD BASIS (Unaudited) 14 2017 2016 52 Weeks Ended 53 Weeks Ended 52-Week (in thousands)* Dec 31, 2017 Jan 1, 2017 Comparable Period (6) Net income (loss) $ 55,456 $ (15,251 ) $ (16,547 ) Income tax expense (benefit) 22,094 (5,089 ) (5,577 ) Interest and other income (expense), net 14 3,345 3,294 Depreciation and amortization 46,115 46,692 45,800 EBITDA 123,679 29,697 26,970 Acquisition/integration and other costs (1) 162 12,223 12,223 Goodwill and intangible asset impairment charge (2) — 103,544 103,544 Work Opportunity Tax Credit processing fees (7) 805 1,858 1,858 Adjusted EBITDA $ 124,646 $ 147,322 $ 144,595 * Totals may not sum due to rounding Q4 2017 Q4 2016 Q1 2018 Outlook 13 Weeks Ended 14 Weeks Ended 13-Week Comparable Period (6) 13 Weeks Ended (in thousands)* Dec 31, 2017 Jan 1, 2017 Apr 1, 2018 Net income $ 16,427 $ 18,087 $ 16,791 $ 1,300 — $ 4,600 Income tax expense 7,185 4,822 4,334 200 — 900 Interest and other income (expense), net 24 572 521 (200) Depreciation and amortization 11,465 12,019 11,127 11,000 EBITDA 35,101 35,500 32,773 12,300 — 16,300 Acquisition/integration and other costs (1) 162 4,002 4,002 2,000 — 1,000 Work Opportunity Tax Credit processing fees (7) 337 276 276 200 Adjusted EBITDA $ 35,600 $ 39,778 $ 37,051 $ 14,500 — $ 17,500 * Totals may not sum due to rounding See the last slide of the appendix for footnotes. 

 

3. RECONCILIATION OF U.S. GAAP REVENUE TO REVENUE EXCLUDING THE COMPANY'S FORMER LARGEST CUSTOMER ON A FISCAL AND COMPARABLE PERIOD BASIS (Unaudited) 15 4. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOWS (Unaudited) 2017 2016 52 Weeks Ended 53 Weeks Ended 52-Week (in thousands) Dec 31, 2017 Jan 1, 2017 Comparable Period (6) Revenue from services $ 2,508,771 $ 2,750,640 $ 2,696,398 Former largest customer revenue (53,435 ) (171,164 ) (169,248 ) Revenue excluding former largest customer $ 2,455,336 $ 2,579,476 $ 2,527,150 Q4 2017 Q4 2016 13 Weeks Ended 14 Weeks Ended 13-Week Comparable Period (6) (in thousands) Dec 31, 2017 Jan 1, 2017 Revenue from services $ 669,625 $ 734,951 $ 680,709 Former largest customer revenue (24,052 ) (33,603 ) (31,687 ) Revenue excluding former largest customer $ 645,573 $ 701,348 $ 649,022 2017 2016 52 Weeks Ended 53 Weeks Ended (in thousands) Dec 31, 2017 Jan 1, 2017 Net cash provided by operating activities $ 99,851 $ 261,754 Capital expenditures (21,958 ) (29,042 ) Free cash flows $ 77,893 $ 232,712 See the last slide of the appendix for footnotes. 

 

5. RECONCILIATION OF SEGMENT EBITDA TO ADJUSTED SEGMENT EBITDA ON A FISCAL AND COMPARABLE PERIOD BASIS (Unaudited) 16 Q4 2017 Q4 2016 13 Weeks Ended 14 Weeks Ended 13-Week Dec 31, 2017 Jan 1, 2017 Comparable Period (6) (in thousands) PeopleReady PeopleManagement PeopleScout PeopleReady PeopleManagement PeopleScout PeopleReady PeopleManag ement PeopleScout Segment EBITDA (8) $ 20,924 $ 8,284 $ 10,161 $ 26,072 $ 9,766 $ 6,589 $ 23,360 $ 9,162 $ 6,621 Acquisition/integration and other costs (1) (133 ) 173 122 — 2,137 — — 2,137 — Work Opportunity Tax Credit processing fees (7) 337 — — 276 — — 276 — — Adjusted Segment EBITDA (8) $ 21,128 $ 8,457 $ 10,283 $ 26,348 $ 11,903 $ 6,589 $ 23,636 $ 11,299 $ 6,621 2017 2016 52 Weeks Ended 53 Weeks Ended 52-Week Dec 31, 2017 Jan 1, 2017 Comparable Period (6) (in thousands) PeopleReady PeopleManagement PeopleScout PeopleReady PeopleManagement PeopleScout PeopleReady PeopleManag ement PeopleScout Segment EBITDA (8) $ 78,372 $ 27,043 $ 39,232 $ 101,270 $ (60,452 ) $ 19,116 $ 98,558 $ (61,056 ) $ 19,148 Acquisition/integration and other costs (1) (133 ) 173 122 1,660 3,909 — 1,660 3,909 — Goodwill and intangible asset impairment charge (2) — — — 4,275 84,100 15,169 4,275 84,100 15,169 Work Opportunity Tax Credit processing fees (7) 805 — — 1,858 — — 1,858 — — Adjusted Segment EBITDA (8) $ 79,044 $ 27,216 $ 39,354 $ 109,063 $ 27,557 $ 34,285 $ 106,351 $ 26,953 $ 34,317 See the last slide of the appendix for footnotes. 

 

17 Footnotes: 1. Other charges for the 13 weeks and 52 weeks ended Dec. 31, 2017, include a workforce reduction charge of $2.5 million primarily associated with employee reductions in the PeopleReady business, offset by $2.3 million of workers' compensation benefit. The workers' compensation benefit is associated with the favorable settlement of insurance coverage associated with a former insurance company and other items not considered part of our core operations. For the prior year periods, acquisition/integration costs related to the acquisition of the recruitment process outsourcing business of Aon Hewitt, which was completed on Jan. 4, 2016. In addition, other charges include costs associated with our exit from the Amazon delivery business of $1.8 million, and branch signage write-offs of $1.6 million due to our re-branding to PeopleReady in the fiscal third quarter of 2016. Other charges included in the Q1 2018 outlook primarily relate to cloud-based financial system upgrades. 2. The goodwill and intangible asset impairment charge in the prior year included the write-off of the CLP and Spartan reporting unit trade names/trademarks of $4.3 million due to our re-branding to PeopleReady during the fiscal third quarter of 2016, and $99.3 million of impairment charges recorded in the fiscal second quarter of 2016 relating to our Staff Management | SMX, hrX and PlaneTechs reporting units. Note, our PeopleScout and hrX service lines were combined during fiscal 2016 and now represent a single operating unit (PeopleScout). 3. Amortization of intangible assets of acquired businesses as well as accretion expense related to the SIMOS acquisition earn-out. 4. Total tax effect of each of the adjustments to U.S. GAAP net income (loss) per diluted share using the expected rate of 28 percent for 2017 and 2016. We expect the tax rate to be 16 percent in Q1 2018 due to the enacted U.S. Tax Cuts and Job Act. 5. Adjusts the effective income tax rate to the expected rate of 28 percent for 2017 and 2016. We expect the tax rate to be 16 percent in Q1 2018 due to the enacted U.S. Tax Cuts and Job Act. 6. Our fiscal period ends on the Sunday closest to the last day of Dec. In fiscal years consisting of 53 weeks, the final quarter consists of 14 weeks, while in fiscal years consisting of 52 weeks, all quarters consist of 13 weeks. The 13-week comparable period represents the 13 weeks ended Jan. 1 2017. The 52-week comparable period represents the sum of the 13 weeks ended Jan. 1, 2017 and the 39 weeks ended Sept. 23, 2016. 7. These third-party processing fees are associated with generating the Work Opportunity Tax Credits, which are designed to encourage employers to hire workers from certain targeted groups with higher than average unemployment rates and reduce our income taxes. 8. Segment earnings before interest, taxes, depreciation and amortization ("Segment EBITDA") is a primary measure of segment performance. Segment EBITDA includes net sales to third parties, related cost of sales, selling, general and administrative expenses, and goodwill and intangible asset impairment charge directly attributable to the reportable segment together with certain allocated corporate general and administrative expenses. Segment EBITDA excludes unallocated corporate general and administrative expenses. Adjusted Segment EBITDA is a non-GAAP financial measure and further excludes acquisition/integration and other costs, goodwill and intangible asset impairment charge, and Work Opportunity Tax Credit third-party processing fees. Adjusted Segment EBITDA is a key measure used by management to assess performance and, in our opinion, enhances comparability and provides investors with useful insight into the underlying trends of the business. It is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies. 

 

 

Forward-Looking Statements February 2018 

 

Investment Highlights February 2018 3 Track record of favorable growth and investor returns Strong free cash flow and balance sheet 

 

TrueBlue at a Glance February 2018 4 108,000 Customers served annually with strong diversity1 740,000 People connected to work during 2017 One of the largest U.S. industrial staffing providers #1 Global RPO provider2 2013-2017 Average Return on Equity3 2013-2017 Revenue CAGR $2.5B 2017 Revenue 11% Growth 16% Return PeopleScout named a Leader and Star Performer by Everest Group for service delivery, technology and buyer satisfaction HRO Today magazine repeatedly recognizes PeopleScout as a global market leader Thousands of veterans hired per year via internal programs as well as Hiring Our Heroes and Wounded Warriors Recognized as a Corporate Champion by the Women’s Forum of New York for board diversity 1 No single customer accounted for more than 3% of total revenue for FY 2017. 2 Source: Everest Group. Overall recruitment process outsourcing rankings by annual number of hires (2017). 3 Calculated as Adjusted Net Income divided by average shareholders’ equity over the prior four quarters. 

 

Three Specialized Segments Meet Diverse Customer Needs February 2018 On-site contingent workforce management solutions.1 1 We use the following distinct brands to market our PeopleManagement contingent workforce solutions: Staff Management | SMX, SIMOS Insourcing Solutions, PlaneTechs and Centerline. 2 Also includes managed service provider business, which provides customers with improved quality and spend management of their contingent labor vendors. 3 Revenue and Adjusted EBITDA calculations based on FY 2017; Adjusted EBITDA mix calculations exclude Corporate unallocated expenses. See the appendix to this presentation and “Financial Information” in the investors section of our website at www.trueblue.com for a definition and full reconciliation of non-GAAP financial measures to GAAP financial results. Revenue Mix3 60% 32% 8% Adj. EBITDA Mix3 54% 19% 27% Adj. EBITDA Margin3 5% 3% 21% Specialized Staffing Workforce Management Recruiting Solutions 

 

Solving Workforce Challenges Globally February 2018 6 complex global diverse age 65 will be almost double worker shortage growth robust workforce solutions 

 

Strong Position in Attractive Vertical Markets February 2018 7 Construction Manufacturing Transport & Wholesale Retail & Services In d u s tr y D y n a m ic s            FY-17 Business Mix: 23% FY-17 Business Mix: 26% FY-17 Business Mix: 22% FY-17 Business Mix: 20% Housing Starts Have Not Kept Pace U.S. Manufacturing Renaissance Wholesale Trade At New High E-commerce Growing % of Retail Sales Source: U.S. Census Bureau Source: U.S. Board of Governors of the Federal Reserve System (FRB) Source: Bureau of Labor Statistics Source: U.S. Census Bureau 60 65 70 75 80 85 90 95 100 105 110 19 90 19 93 19 96 19 99 20 02 20 05 20 08 20 11 20 14 20 17 Industrial Production Index 3.0 3.5 4.0 4.5 5.0 5.5 19 90 19 93 19 96 19 99 20 02 20 05 20 08 20 11 20 14 20 17 Transportation and Warehousing Employment Millions - 500 1,000 1,500 2,000 2,500 150 170 190 210 230 250 270 290 310 330 350 19 70 19 75 19 80 19 85 19 90 19 95 20 00 20 05 20 10 20 15 US Population Housing Permits Millions Thousands 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 19 93 19 96 19 99 20 02 20 05 20 08 20 11 20 14 20 17 E-commerce % of Retail Sales 

 

Powerful Secular Forces in Industrial Staffing February 2018 8 7% Growing Market       o o  o o      Positive Demographic Trends Temporary Help Penetration Growth Compelling Technology Rise of E-commerce On-Shoring Comeback 1 Source: Staffing Industry Analysts. 2 Source: TrueBlue estimate based on 6% CAGR from 2018 to 2025. 3 Source: Bureau of Labor Statistics. 

 

Segment Strategy Highlights February 2018 Boost shareholder returns through share repurchase Grow Productivity Solutions  Differentiated offering  Perfect fit with e-commerce  Attractive EBITDA margin (productivity solutions generated margins of 8% in 2017) Well Positioned  Recognized global leader  High growth market  Attractive EBITDA margin Leverage Digital Strategy  Best-in-class proprietary technology (Affinix™)  Mobile-first, AI-enabled, cloud-based platform  Streamlines the candidate sourcing process Leverage Digital Strategy  Compelling technology + established branch network  Value creation: 24/7 order fulfilment, enhanced customer/worker experience  15%+ EBITDA margins on incremental revenue 

 

JobStackTM Mobile App – A Competitive Differentiator February 2018 JobStackTM is a next generation mobile app that algorithmically matches workers with available jobs.  24/7 order creation  Real-time order fill rates  Associate ratings  Worksite ratings  Work week control Driving Value for TrueBlue Compelling Technology CUSTOMER ASSOCIATE  Round-the-clock revenue generation  Improved associate experience  Lift associate quality  Enhanced communication & safety  Tap into larger and more diverse talent pool 

 

Productivity Solutions and eCommerce February 2018 eCommerce Vertical Leadership  Labor intensive pick-and-pack movement v. traditional bulk pallets  Increasing demand for PeopleManagement's ability to deliver a flexible, fully sourced and managed workforce  Fastest growing segment is smaller e-retailers (<$100 million annual sales), which is a core strength for PeopleManagment Driving Productivity Solutions  High margin business with strong customer value proposition and high customer retention  Value-add solutions include cost per-unit pricing and process re- engineering to help customers reduce labor spend by 15% or more  SIMOS is PeopleManagement's highest margin business and a recognized leader in the productivity solutions space 

 

PeopleScout: Attractive Margin and Rapid Growth February 2018 21% 9% FY-17FY-15 Adjusted EBITDA Margin PeopleScout TBI Total  Industry Leadership o #1 global provider of enterprise RPO1 o Emerging healthcare vertical strength  Differentiated Service Proprietary technology drives value-add recruitment capabilities  Growing Market 12% global market growth CAGR2  Global Prospects Opportunity to broaden footprint in Europe and Asia Pacific 1 Source: Everest Group. Overall RPO rankings by annual number of hires (2017). 2 Source: NelsonHall (2018). Represents estimated market CAGR from 2017-2022. 4% 8% 5% 27% FY-15 FY-17 PeopleScout % of Total Company Results Revenue Adjusted EBITDA 3 

 

Well Positioned to Boost Shareholder Returns with Buybacks February 2018 1 $100 million stock repurchase authorization announced on 30 October, 2017. $93 million remaining under the authorization as of 31 December, 2017. 2 Calculated as net cash provided by operating activities, minus purchases for property and equipment. See the appendix to this presentation and “Financial Information” in the Investors section of our website at www.trueblue.com for a definition and full reconciliation of non-GAAP financial measures to GAAP financial results. 3 Calculated as Adjusted Net Income divided by average shareholders’ equity at the end of the prior four quarters.    $31 $54 $233 $78 2014 2015 2016 2017 1.7x 1.7x 0.9x 1.0x 2014 2015 2016 2017 17% 17% 17% 13% 2014 2015 2016 2017 millions 

 

 

February 2018 15 NON-GAAP FINANCIAL MEASURES AND NON-GAAP RECONCILIATIONS Non-GAAP Measure Definition Purpose of Adjusted Measures EBITDA and Adjusted EBITDA EBITDA excludes from net income (loss) the effects of: - interest expense, - income taxes, and - depreciation and amortization. Adjusted EBITDA, further excludes the effects of: - acquisition/integration and other costs, - goodwill and intangible asset impairment charge, and - Work Opportunity Tax Credit third-party processing fees. - Enhances comparability on a consistent basis and provides investors with useful insight into the underlying trends of the business. - Used by management to assess performance and effectiveness of our business strategies by excluding certain non-cash charges. - Provides a measure, among others, used in the determination of incentive compensation for management. Adjusted net income (loss) and Adjusted net income (loss), per diluted share Net income (loss) and net income (loss) per diluted share, excluding the effects of: - acquisition/integration and other costs, - goodwill and intangible asset impairment charge, - amortization of intangibles of acquired businesses, as well as accretion expense related to acquisition earn-out, - tax effect of each adjustment to U.S. GAAP net income (loss), and - adjusted income taxes to the expected effective tax rate. - Enhances comparability on a consistent basis and provides investors with useful insight into the underlying trends of the business. - Used by management to assess performance and effectiveness of our business strategies by excluding certain non-cash charges. In addition to financial measures presented in accordance with U.S. GAAP, we monitor certain non-GAAP key financial measures. The presentation of these non-GAAP financial measures is used to enhance the understanding of certain aspects of our financial performance. It is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies. 

 

RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME, PER DILUTED SHARE (Unaudited) February 2018 16 2017 2016 2015 2014 52 Weeks Ended 53 Weeks Ended 52 Weeks Ended 52 Weeks Ended (in thousands, except for per share data)* Dec 31, 2017 Jan 1, 2017 Dec 25, 2015 Dec 26, 2014 Net income $ 55,456 $ (15,251 ) $ 71,247 $ 65,675 Acquisition/integration and other costs (1) 162 12,223 5,135 5,220 Goodwill and intangible asset impairment charge (2) — 103,544 — — Amortization of intangible assets of acquired businesses (3) 22,290 27,069 19,903 12,046 Tax effect of adjustments to net income (4) (6,287 ) (39,994 ) (7,011 ) (4,834 ) Adjust income taxes to normalized effective rate (5) 380 606 (1,805 ) (6,747 ) Adjusted net income $ 72,001 $ 88,197 $ 87,469 $ 71,360 Adjusted net income, per diluted share $ 1.74 $ 2.10 $ 2.10 $ 1.73 Diluted weighted average shares outstanding 41,441 41,968 41,622 41,176 * Totals may not sum due to rounding RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (Unaudited) 2017 2016 2015 2014 52 Weeks Ended 53 Weeks Ended 52 Weeks Ended 52 Weeks Ended (in thousands) Dec 31, 2017 Jan 1, 2017 Dec 25, 2015 Dec 26, 2014 Net income $ 55,456 $ (15,251 ) $ 71,247 $ 65,675 Income tax expense 22,094 (5,089 ) 25,200 16,169 Interest and other expense, net 14 3,345 1,395 (116 ) Depreciation and amortization 46,115 46,692 41,843 29,474 EBITDA 123,679 29,697 139,685 111,202 Acquisition/integration and other costs (1) 162 12,223 5,135 5,220 Goodwill and intangible asset impairment charge (2) — 103,544 — — Work Opportunity Tax Credit processing fees (6) 805 1,858 2,352 3,020 Adjusted EBITDA $ 124,646 $ 147,322 $ 147,172 $ 119,442 See the last slide of the appendix for footnotes. 

 

RECONCILIATION OF SEGMENT EBITDA TO ADJUSTED SEGMENT EBITDA (Unaudited) February 2018 17 RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOWS (Unaudited) 2017 2016 52 Weeks Ended 53 Weeks Ended Dec 31, 2017 Jan 1, 2017 (in thousands) PeopleReady PeopleManagement PeopleScout PeopleReady PeopleManagement PeopleScout Segment EBITDA (7) $ 78,372 $ 27,043 $ 39,232 $ 101,270 $ (60,452 ) $ 19,116 Acquisition/integration and other costs (1) (133 ) 173 122 1,660 3,909 — Goodwill and intangible asset impairment charge (2) — — — 4,275 84,100 15,169 Work Opportunity Tax Credit processing fees (6) 805 — — 1,858 — — Adjusted Segment EBITDA (7) $ 79,044 $ 27,216 $ 39,354 $ 109,063 $ 27,557 $ 34,285 2017 2016 2015 2014 52 Weeks Ended 53 Weeks Ended 52 Weeks Ended 52 Weeks Ended (in thousands) Dec 31, 2017 Jan 1, 2017 Dec 25, 2015 Dec 26, 2014 Net cash provided by operating activities $ 99,851 $ 261,754 $ 72,072 $ 47,525 Capital expenditures (21,958 ) (29,042 ) (18,394 ) (16,918 ) Free cash flows $ 77,893 $ 232,712 $ 53,678 $ 30,607 See the last slide of the appendix for footnotes. 

 

February 2018 18 Footnotes: 1. Acquisition/integration and other costs related to the acquisition of the recruitment process outsourcing business of Aon Hewitt, which was completed on January 4, 2016, the acquisition of SIMOS, which was completed on December 1, 2015, the acquisition of Seaton, which was completed on June 30, 2014, the acquisition of MDT, which was completed on February 4, 2013, the acquisition of The Work Connection, which was completed October 1, 2013 and the acquisition of certain assets of Crowley Transportation Services, which was completed June 2013. In addition, other charges for the fiscal year ended December 31, 2017, include a workforce reduction charge of $2.5 million primarily associated with employee reductions in the PeopleReady business, offset by $2.3 million of workers' compensation benefit. The workers' compensation benefit is associated with the favorable settlement of insurance coverage associated with a former insurance company and other items not considered part of our core operations. Other charges for the fiscal year ended January 1, 2017, consist of costs of $2.6 million associated with our exit from the Amazon delivery business, $1.3 million adjustment to increase the earn-out associated with the acquisition of SIMOS, and branch signage write branch signage write- offs of $1.6 million due to our re-branding to PeopleReady. 2. The Goodwill and intangible asset impairment charge for the fiscal year ended January 1, 2017, included $99.3 million of impairment charges relating to our Staff Management | SMX, hrX, and PlaneTechs reporting units, and write-off of the CLP and Spartan reporting unit trade names/trademarks of $4.3 million due to the re- branding to PeopleReady. Note, our PeopleScout and hrX service lines were combined during fiscal 2016 and now represent a single operating unit (PeopleScout). 3. Amortization of intangible assets of acquired businesses as well as accretion expense related to the SIMOS acquisition earn-out. 4. Total tax effect of each of the adjustments to U.S. GAAP net income (loss) per diluted share using the expected rate of 28 percent for 2017 and 2016. We expect the tax rate to be 16 percent in Q1 2018 due to the enacted U.S. Tax Cuts and Job Act. 5. Adjusts the effective income tax rate to the expected rate of 28 percent for 2017 and 2016. We expect the tax rate to be 16 percent in Q1 2018 due to the enacted U.S. Tax Cuts and Job Act. 6. These third-party processing fees are associated with generating the Work Opportunity Tax Credits, which are designed to encourage employers to hire workers from certain targeted groups with higher than average unemployment rates and reduce our income taxes. 7. Segment earnings before interest, taxes, depreciation and amortization ("Segment EBITDA") is a primary measure of segment performance. Segment EBITDA includes net sales to third parties, related cost of sales, selling, general and administrative expenses, and goodwill and intangible asset impairment charge directly attributable to the reportable segment together with certain allocated corporate general and administrative expenses. Segment EBITDA excludes unallocated corporate general and administrative expenses. Adjusted Segment EBITDA is a non-GAAP financial measure and further excludes acquisition/integration and other costs, goodwill and intangible asset impairment charge, and Work Opportunity Tax Credit third-party processing fees. Adjusted Segment EBITDA is a key measure used by management to assess performance and, in our opinion, enhances comparability and provides investors with useful insight into the underlying trends of the business. It is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies.