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): November 5, 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 November 5, 2018 , TrueBlue, Inc. (the “company”) issued a press release (the “Press Release”) reporting its financial results for the third quarter ended September 30, 2018 , and revenue and earnings outlook for the fourth 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 third quarter ended September 30, 2018 (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 Monday, November 5, 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 Roadshow Presentation to this report as Exhibit 99.3, which we will reference in our Q3 2018 earnings results discussion and which may be used in future investor conferences. The Investor Roadshow 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 Roadshow 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 Roadshow 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 November 5, 2018	
		
99.2	Earnings Results Presentation for November 5, 2018 conference call	
		
99.3	Investor Roadshow 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:	November 5, 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 November 5, 2018	X	
99.2	Earnings Results Presentation for November 5, 2018 conference call	X	
99.3	Investor Roadshow Presentation	X	

TRUEBLUE REPORTS FISCAL THIRD QUARTER 2018 RESULTS

TACOMA, WASH. -- Nov. 5, 2018 -- TrueBlue (NYSE:TBI) today announced its fiscal third quarter 2018 results.

Revenue was $680 million , an increase of 3 percent , compared to revenue of $661 million in the fiscal third quarter of 2017 . Net income per diluted share was $0.61 , an increase of 20 percent , compared to $0.51 in the fiscal third quarter of 2017 . Adjusted net income per diluted share 1 was $0.79 , an increase of 32 percent , compared to $0.60 in the fiscal third quarter of 2017 .

“Our team delivered another quarter of revenue growth, gross margin expansion and strong EPS growth,” said Patrick Beharelle, CEO of TrueBlue. “PeopleReady produced its second consecutive quarter of revenue growth, and PeopleScout achieved its fifth consecutive quarter of double-digit organic revenue growth. Our top line growth, gross margin expansion and share repurchases, combined with a lower income tax rate, are all contributing to strong EPS growth.”

“TrueBlue’s digital strategies are creating differentiation with clients and candidates. JobStack TM , our PeopleReady mobile staffing technology, is transforming how people find work and how businesses find people. Affinix TM , our PeopleScout proprietary talent acquisition technology, is receiving praise from current and prospective customers.”

2018 Outlook

The company estimates revenue for the fiscal fourth quarter of 2018 will range from $642 million to $659 million . The company also estimates net income per diluted share will range from $0.34 to $0.41 and adjusted net income per diluted share will range from $0.55 to $0.62 .
Management will discuss fiscal third quarter 2018 results on a webcast at 2 p.m. PST (5 p.m. EST), today, Monday, Nov. 5. 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 achieve business growth and improve productivity, while connecting approximately 740,000 people with work in 2017. TrueBlue's PeopleReady segment offers industrial staffing services, PeopleManagement offers contingent and productivity-based on-site industrial staffing services, and PeopleScout offers Recruitment Process Outsourcing (RPO) and Managed Service Provider (MSP) solutions to a wide variety of industries. 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.

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 business strategies and initiatives such as the consolidation of our businesses 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, Executive Vice President and CFO
253-680-8214

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

	
														
 	13 Weeks Ended	 	39 Weeks Ended	
(in thousands, except per share data)	Sep 30, 2018	Oct 1, 2017	 	Sep 30, 2018	Oct 1, 2017	
Revenue from services	$	680,371		$	660,780		 	$	1,849,060		$	1,839,146		
Cost of services	496,053		488,761		 	1,355,890		1,372,418		
Gross profit	184,318		172,019		 	493,170		466,728		
Selling, general and administrative expense	145,382		131,552		 	405,352		378,150		
Depreciation and amortization	10,586		11,189		 	30,777		34,650		
Income from operations	28,350		29,278		 	57,041		53,928		
Interest and other income (expense), net	(340	)	(219	)	 	896		10		
Income before tax expense	28,010		29,059		 	57,937		53,938		
Income tax expense	3,630		7,838		 	7,070		14,909		
Net income	$	24,380		$	21,221		 	$	50,867		$	39,029		
 	 	 	 	 	 	
Net income per common share:	 	 	 	 	 	
Basic	$	0.61		$	0.52		 	$	1.27		$	0.94		
Diluted	$	0.61		$	0.51		 	$	1.26		$	0.94		
 	 	 	 	 	 	
Weighted average shares outstanding:	 	 	 	 	 	
Basic	39,743		41,046		 	40,138		41,420		
Diluted	40,073		41,276		 	40,417		41,671		

TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(Unaudited)

	
							
(in thousands)	Sep 30, 2018	Dec 31, 2017	
ASSETS	 	 	
Cash and cash equivalents	$	34,736		$	28,780		
Accounts receivable, net	384,867		374,273		
Other current assets	33,520		25,226		
Total current assets	453,123		428,279		
Property and equipment, net	55,803		60,163		
Restricted cash and investments	240,634		239,231		
Goodwill and intangible assets, net	335,510		331,309		
Other assets, net	56,543		50,049		
Total assets	$	1,141,613		$	1,109,031		
 	 	 	
LIABILITIES AND SHAREHOLDERS’ EQUITY	 	 	
Current liabilities	$	223,681		$	212,419		
Long-term debt, less current portion	107,900		116,489		
Other long-term liabilities	224,877		225,276		
Total liabilities	556,458		554,184		
Shareholders’ equity	585,155		554,847		
Total liabilities and shareholders’ equity	$	1,141,613		$	1,109,031		

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

							
 	39 Weeks Ended	
(in thousands)	Sep 30, 2018	Oct 1, 2017	
Cash flows from operating activities:	 	 	
Net income	$	50,867		$	39,029		
Adjustments to reconcile net income   to net cash provided by operating activities:	 	 	
Depreciation and amortization	30,777		34,650		
Provision for doubtful accounts	10,140		6,321		
Stock-based compensation	9,552		6,161		
Deferred income taxes	2,638		4,890		
Other operating activities	526		2,724		
Changes in operating assets and liabilities:	 	 	
Accounts receivable	(17,960	)	(34,198	)	
Income tax receivable	(5,389	)	12,788		
Other assets	(12,110	)	6,306		
Accounts payable and other accrued expenses	1,624		(784	)	
Accrued wages and benefits	4,724		(176	)	
Workers’ compensation claims reserve	(8,405	)	1,985		
Other liabilities	1,642		1,086		
Net cash provided by operating activities	68,626		80,782		
Cash flows from investing activities:	 	 	
Capital expenditures	(10,313	)	(16,303	)	
Acquisition of business	(22,742	)	—		
Divestiture of business	10,414		—		
Purchases of restricted investments	(11,747	)	(36,015	)	
Maturities of restricted investments	17,021		15,042		
Net cash used in investing activities	(17,367	)	(37,276	)	
Cash flows from financing activities:	 	 	
Purchases and retirement of common stock	(24,818	)	(29,371	)	
Net proceeds from stock option exercises and employee stock purchase plans	1,146		1,179		
Common stock repurchases for taxes upon vesting of restricted stock	(2,539	)	(2,956	)	
Net change in revolving credit facility	12,000		(1,099	)	
Payments on debt	(22,855	)	(1,700	)	
Payment of contingent consideration at acquisition date fair value	—		(18,300	)	
Net cash used in financing activities	(37,066	)	(52,247	)	
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(583	)	364		
Net change in cash, cash equivalents, and restricted cash	13,610		(8,377	)	
Cash, cash equivalents and restricted cash, beginning of period	73,831		103,222		
Cash, cash equivalents and restricted cash, end of period	$	87,441		$	94,845		

TRUEBLUE, INC.
SEGMENT DATA
(Unaudited)

	
							
 	13 Weeks Ended	
(in thousands)	Sep 30, 2018	Oct 1, 2017	
Revenue from services:	 	 	
PeopleReady	$	428,665		$	414,995		
PeopleManagement	181,199		196,835		
PeopleScout	70,507		48,950		
Total company	$	680,371		$	660,780		
 	 	 	
Segment profit  (1):	 	 	
PeopleReady	$	31,230		$	28,752		
PeopleManagement	6,169		6,940		
PeopleScout	12,478		10,277		
Total segment profit	49,877		45,969		
Corporate unallocated expense	(6,469	)	(5,322	)	
Total company Adjusted EBITDA	43,408		40,647		
Work Opportunity Tax Credit processing fees (2)	(241	)	(180	)	
Acquisition/integration costs (3)	(1,226	)	—		
Other costs (4)	(3,005	)	—		
EBITDA	38,936		40,467		
Depreciation and amortization	(10,586	)	(11,189	)	
Interest and other income (expense), net	(340	)	(219	)	
Income before tax expense	28,010		29,059		
Income tax expense	(3,630	)	(7,838	)	
Net income	$	24,380		$	21,221		
		
(1)	We evaluate performance based on segment revenue and segment profit. Segment profit includes revenue, related cost of services, and ongoing operating expenses directly attributable to the reportable segment. Segment profit excludes goodwill and intangible impairment charges, depreciation and amortization expense, unallocated corporate general and administrative expense, interest, other income and expense, income taxes, and costs not considered to be ongoing costs of the segment. Segment profit is comparable to segment adjusted EBITDA amounts reported in prior years.	

(2)	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.	

(3)	Acquisition/integration costs relate to the acquisition of TMP Holdings LTD completed on June 12, 2018.	

(4)	Other costs include implementation costs for cloud-based systems and accelerated vesting of stock per the CEO’s employment contract associated with the leadership transition.	

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:
- interest and other income (expense), net,
- income taxes, and
- depreciation and amortization.

Adjusted EBITDA, further excludes:
- Work Opportunity Tax Credit third-party processing fees,
- acquisition/integration costs and
- other costs.

	 	- 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.

- Provides a measure, among others, used in the determination of incentive compensation for management.	
Adjusted net income and Adjusted net income, per diluted share	Net income and net income per diluted share, excluding:
- adjustment to the gain on divestiture,
- amortization of intangibles of acquired businesses,
- acquisition/integration costs,
- other costs,
- tax effect of each adjustment to U.S. GAAP net income, and
- adjust 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.
	
Organic revenue	Revenue from services excluding acquired entity revenue.	 	- 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.	

		
1.	RECONCILIATION OF U.S. GAAP NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME, PER DILUTED SHARE	
( Unaudited )

										
 	Q3 2018	 	Q3 2017	 	Q4 2018 Outlook*	
 	13 Weeks Ended	 	13 Weeks Ended	 	13 Weeks Ended	
(in thousands, except for per share data)	Sep 30, 2018	 	Oct 1, 2017	 	Dec 30, 2018	
Net income	$	24,380		 	$	21,221		 	$ 13,800 — $ 16,300	
Adjustment to the gain on divestiture (1)	385		 	—		 	—	
Amortization of intangible assets of acquired businesses	5,193		 	5,353		 	5,200	
Acquisition/integration costs (2)	1,226		 	—		 	1,500	
Other costs (3)	3,005		 	—		 	3,200	
Tax effect of adjustments to net income (4)	(1,569	)	 	(1,499	)	 	(1,600)	
Adjustment of income taxes to normalized effective rate (5)	(852	)	 	(299	)	 	—	
Adjusted net income	$	31,768		 	$	24,776		 	$ 22,100 — $ 24,600	
 	 	 	 	 	 	
Adjusted net income, per diluted share	$	0.79		 	$	0.60		 	$ 0.55 — $ 0.62	
 	 	 	 	 	 	
Diluted weighted average shares outstanding	40,073		 	41,276		 	40,000	

2.	RECONCILIATION OF U.S. GAAP NET INCOME TO EBITDA AND ADJUSTED EBITDA	
( Unaudited )

										
 	Q3 2018	 	Q3 2017	 	Q4 2018 Outlook*	
 	13 Weeks Ended	 	13 Weeks Ended	 	13 Weeks Ended	
(in thousands)	Sep 30, 2018	 	Oct 1, 2017	 	Dec 30, 2018	
Net income	$	24,380		 	$	21,221		 	$ 13,800 — $ 16,300	
Income tax expense	3,630		 	7,838		 	2,600 — 3,100	
Interest and other (income) expense, net	340		 	219		 	(400)	
Depreciation and amortization	10,586		 	11,189		 	10,100	
EBITDA	38,936		 	40,467		 	26,200 — 29,200	
Work Opportunity Tax Credit processing fees (6)	241		 	180		 	200	
Acquisition/integration costs (2)	1,226		 	—		 	1,500	
Other costs (3)	3,005		 	—		 	3,200	
Adjusted EBITDA	$	43,408		 	$	40,647		 	$ 31,100 — $ 34,100	
* Totals may not sum due to rounding	 	 	 	 	 	

3.	RECONCILIATION OF U.S. GAAP REVENUE TO ORGANIC REVENUE	
( Unaudited )

								
 	Q3 2018	 	Q3 2017	
 	13 Weeks Ended	 	13 Weeks Ended	
(in thousands)	Sep 30, 2018	 	Oct 1, 2017	
Revenue from services	$	680,371		 	$	660,780		
Acquired entity revenue	(15,032	)	 	—		
Organic revenue	$	665,339		 	$	660,780		

(1)	Adjustment to the gain on the divestiture of our PlaneTechs business as we continue to finalize actual costs incurred. PlaneTechs was sold mid-March 2018.	

(2)	Acquisition/integration costs relate to the acquisition of TMP Holdings LTD completed on June 12, 2018.	

(3)	Other costs include implementation costs for cloud-based systems and accelerated vesting of stock associated with the CEO transition.	

(4)	Total tax effect of each of the adjustments to U.S. GAAP net income using the expected ongoing rate of 16 percent for 2018, due to the enacted U.S. Tax Cuts and Jobs Act, and 28 percent for 2017.	

		
(5)	Adjustment of the effective income tax rate to the expected ongoing rate of 16 percent for 2018, due to the enacted U.S. Tax Cuts and Jobs Act, and 28 percent for 2017.	

(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.	

November 5, 2018 www.TrueBlue.com

 

Forward-looking statements

 

Q3 2018 summary Another quarter of revenue growth  Total revenue +3% v. +1% in Q2  Organic revenue1,2 +1% v. flat in Q2  PeopleReady, the largest segment, +3% v. +2% in Q2  PeopleManagement -8% v. -7% in Q2  PeopleScout +44% v. +25% in Q2 Strong EPS results  EPS +20% and adjusted EPS2 +32%  Programs to lower cost of sales are working – gross margin +110 bps  Adjusted EBITDA2 +7% and adjusted EBITDA margin +20 bps Acquisition of UK-based TMP in Q2-18 is on-track  Financial performance and PeopleScout integration are meeting expectations Returning capital to shareholders  $25M of stock repurchased YTD  $68M remaining under current authorization 1 Organic revenue excludes acquired revenue from TMP Holdings LTD. 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.

 

Financial summary Amounts in millions, except per share data Q3 2018 % Change Revenue $680 +3% Net Income $24.4 +15% Net Income Per Diluted Share $0.61 +20% Adjusted Net Income1 $31.8 +28% Adj. Net Income Per Diluted Share $0.79 +32% Adjusted EBITDA $43.4 +7% Adjusted EBITDA Margin 6.4% +20 bps  Organic revenue +1%, or +2% excluding PlaneTechs divestiture  Net income growth is higher than adjusted EBITDA growth due primarily to a lower income tax rate in 2018 and share repurchases 1 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.

 

Gross margin and SG&A bridges Gross Margin 0.8% 0.3% 27.1% 26.0% Q3 2017 RPO Staffing1 Q3 2018 Amounts in millions SG&A $145 $3 $6 $132 $4 Q3 2017 Adjusted EBITDA TMP Core business Q3 2018 exclusions2 1 Margin improvement primarily due to improvements in workers’ compensation expense. See 10-Q for additional information. 2 Adjusted EBITDA further excludes from EBITDA Work Opportunity Tax Credit third-party processing fees, acquisition/integration costs and other costs. 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.

 

Q3-18 segment update Amounts in millions PeopleReady PeopleManagement PeopleScout Revenue $429 $181 $71 % Growth +3% -8% +44% (Flat ex-Amazon and PlaneTechs) (+13% organic) Segment Profit1 $31.2 $6.2 $12.5 % Growth 9% -11% +21% % Margin 7.3% 3.4% 17.7% % Change +40 bps -10 bps -330 bps Notes:  Revenue trend  Revenue decline due to  Fifth consecutive quarter of improvement is broad- loss of Amazon Canadian double-digit revenue growth based across geographies business and divestiture of and industries PlaneTechs in Q1-18  Margin compression primarily from acquisition of lower-  Headwind of -2% from prior margin TMP business year hurricane and energy business benefits 1 We evaluate performance based on segment revenue and segment profit. Segment profit includes revenue, related cost of services, and ongoing operating expenses directly attributable to the reportable segment. Segment profit excludes goodwill and intangible impairment charges, depreciation and amortization expense, unallocated corporate general and administrative expense, interest, other income and expense, income taxes, and costs not considered 6 to be ongoing costs of the segment. Segment profitQ2-18 is comparab leStrategic to segment adjusted Messages EBITDA amounts reported in prior years. June 2018

 

Segment strategy highlights  JobStackTM creating  Attractive on-premise  Global RPO market favorable differentiation solution experiencing strong growth with customers and  Perfect fit for larger associates clients with longer-  Leverage TMP duration / strategic need acquisition to compete  30% of all jobs now filled for contingent workers for multi-continent by JobStack engagements  Strength in the  15%+ potential operating e-commerce vertical  Industry leading margin on incremental proprietary technology –  Focused on new client revenue rolling out AffinixTM, a wins and margin next-generation HR tool expansion  Attractive-margin business with compelling value proposition Boost shareholder returns through share repurchase

 

Lower debt and ample liquidity $246 $30 Amounts in millions $138 Total Debt $119 $108 $216 $35 $29 Net Debt Cash $35 $103 $90 $73 2015 2016 2017 Q3-18 Amounts in millions $220 $171 $35 Liquidity $146 Borrowing Availability Cash $35 $107 $29 $30 $185 $136 $117 $77 2015 2016 2017 Q3-18 Debt to Total 31% 1 21% Capital 18% 16% 2015 2016 2017 Q3-18 Note: Balances as of fiscal period end. 1 Calculated as total debt divided by the sum of total debt plus shareholders’ equity.

 

 

Q4 2018 outlook Amounts in millions, except per share data Revenue Outlook Growth Notes • Divested revenue (PlaneTechs) and acquired revenue (TMP) roughly off-set Total 1 $642 to $659 -4% to -2% • -3% headwind from energy business peak in Q4-17 • -4% headwind from loss of Amazon Canadian business PeopleReady $392 to $399 0% to 2% • -4% headwind from energy business peak in Q4-17 • -11% headwind from loss of Amazon Canadian business PeopleManagement $181 to $187 -20% to -17% • -5% headwind from divested PlaneTechs revenue PeopleScout $69 to $72 35% to 42% • Outlook reflects organic growth of 9% to 15% Profitability & Capital Expenditures Outlook Notes Net income per diluted share $0.34 to $0.41 • Assumes an effective income tax rate of 16% • $4.9M of add-backs related to integration and acquisition costs, Adjusted net income per diluted share $0.55 to $0.62 implementation costs for cloud-based systems and accelerated vesting of stock associated with the CEO transition Capital expenditures $4 • Assumes diluted weighted average shares outstanding of 40.0 million 1 Figures may not sum to consolidated totals due to rounding.

 

Select 2018 outlook information Amounts in millions PeopleManagement: Amazon  Loss of Amazon Canadian business effective September 1, 2018 is expected to create a revenue headwind of approximately $24M in Q4-18 (11% for PeopleManagement and 4% for total TBI) Memo: Amazon Historical Q4-17 Q1-18 Q2-18 Q3-18 Revenue $24 $12 $6 $6 Segment Profit 2.4 1.4 0.7 0.6 PeopleReady: Energy  The quarterly run-rate for this business is about $10M in 2018 and faces a prior year comparison of $26M in Q4-18; implied revenue headwind of approximately $16M in Q4-18 (4% for PeopleReady and 3% for total TBI) Memo: Energy Historical Q4-17 Q1-18 Q2-18 Q3-18 Revenue $26 $13 $8 $9 Note: Figures may not sum to consolidated totals due to rounding.

 

 

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: - Enhances comparability on a consistent - interest and other income (expense), net, basis and provides investors with useful - income taxes, and insight into the underlying trends of the - depreciation and amortization. business. Adjusted EBITDA, further excludes: - Used by management to assess - Work Opportunity Tax Credit third-party performance and effectiveness of our processing fees, business strategies. - acquisition/integration costs and - other costs. - Provides a measure, among others, used in the determination of incentive compensation for management. Adjusted net income and Adjusted net Net income and net income per diluted share, - Enhances comparability on a consistent income, per diluted share excluding: basis and provides investors with useful - adjustment to the gain on divestiture, insight into the underlying trends of the - amortization of intangibles of acquired business. businesses, - acquisition/integration costs, - Used by management to assess - other costs, performance and effectiveness of our - tax effect of each adjustment to U.S. GAAP business strategies. net income, and - adjust income taxes to the expected effective tax rate. Organic revenue Revenue from services excluding acquired - Enhances comparability on a consistent entity revenue. 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. 113

 

1. RECONCILIATION OF U.S. GAAP NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME, PER DILUTED SHARE (Unaudited) Q3 2018 Q3 2017 Q4 2018 Outlook* 13 Weeks Ended 13 Weeks Ended 13 Weeks Ended (in thousands, except for per share data) Sep 30, 2018 Oct 1, 2017 Dec 30, 2018 Net income $ 24,380 $ 21,221 $ 13,800 — $ 16,300 Adjustment to the gain on divestiture (1) 385 — — Amortization of intangible assets of acquired businesses 5,193 5,353 5,200 Acquisition/integration costs (2) 1,226 — 1,500 Other costs (3) 3,005 — 3,200 Tax effect of adjustments to net income (4) (1,569) (1,499) (1,600) Adjustment of income taxes to normalized effective rate (5) (852) (299) — Adjusted net income $ 31,768 $ 24,776 $ 22,100 — $ 24,600 Adjusted net income, per diluted share $ 0.79 $ 0.60 $ 0.55 — $ 0.62 Diluted weighted average shares outstanding 40,073 41,276 40,000 2. RECONCILIATION OF U.S. GAAP NET INCOME TO EBITDA AND ADJUSTED EBITDA (Unaudited) Q3 2018 Q3 2017 Q4 2018 Outlook* 13 Weeks Ended 13 Weeks Ended 13 Weeks Ended (in thousands) Sep 30, 2018 Oct 1, 2017 Dec 30, 2018 Net income $ 24,380 $ 21,221 $ 13,800 — $ 16,300 Income tax expense 3,630 7,838 2,600 — 3,100 Interest and other (income) expense, net 340 219 (400) Depreciation and amortization 10,586 11,189 10,100 EBITDA 38,936 40,467 26,200 — 29,200 Work Opportunity Tax Credit processing fees (6) 241 180 200 Acquisition/integration costs (2) 1,226 — 1,500 Other costs (3) 3,005 — 3,200 Adjusted EBITDA $ 43,408 $ 40,647 $ 31,100 — $ 34,100 * Totals may not sum due to rounding See the last slide of the appendix for footnotes. 114

 

3. RECONCILIATION OF U.S. GAAP REVENUE TO ORGANIC REVENUE (Unaudited) Q3 2018 Q3 2017 13 Weeks Ended 13 Weeks Ended (in thousands) Sep 30, 2018 Oct 1, 2017 Revenue from services $ 680,371 $ 660,780 Acquired entity revenue (15,032) — Organic revenue $ 665,339 $ 660,780 Footnotes: 1. Adjustment to the gain on the divestiture of our PlaneTechs business as we continue to finalize actual costs incurred. PlaneTechs was sold mid-March 2018. 2. Acquisition/integration costs relate to the acquisition of TMP Holdings LTD completed on June 12, 2018. 3. Other costs include implementation costs for cloud-based systems and accelerated vesting of stock associated with the CEO transition. 4. Total tax effect of each of the adjustments to U.S. GAAP net income using the expected ongoing rate of 16 percent for 2018, due to the enacted U.S. Tax Cuts and Jobs Act, and 28 percent for 2017. 5. Adjustment of the effective income tax rate to the expected ongoing rate of 16 percent for 2018, due to the enacted U.S. Tax Cuts and Jobs Act, and 28 percent for 2017. 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. 115

 

November 2018

 

Forward-Looking Statements

 

Investment Highlights Track record of favorable growth and investor returns Strong balance sheet and cash flow to support stock buybacks 3

 

TrueBlue at a Glance 108,000 740,000 #1 Customers served annually People connected to One of the largest U.S. industrial Global 1 with strong diversity work during 2017 staffing providers RPO provider2 2013-2017 2013-2017 Average Return Revenue CAGR on Equity3 11% 16% $2.5B Growth Return 2017 Revenue PeopleScout named a Leader and HRO Today magazine repeatedly Thousands of veterans hired each Recognized for breakthrough board Star Performer by Everest Group for recognizes PeopleScout as a global year via internal programs as well as practices that promote greater service delivery, technology and market leader Hiring Our Heroes and Wounded diversity and inclusion buyer satisfaction Warriors 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. 4

 

Three Specialized Segments Meet Diverse Customer Needs On-site contingent workforce management solutions1 Revenue mix3 60% 32% 8% Segment profit3 54% 19% 27% Margin 5% 3% 21% 1 We use the following distinct brands to market our PeopleManagement contingent workforce solutions: Staff Management | SMX, SIMOS Insourcing Solutions 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 segment profit calculations based on FY 2017. Starting in FY 2018 we are evaluating performance based on segment revenue and segment profit. Segment profit is comparable to segment adjusted EBITDA amounts reported in prior periods, and this change did not impact the mix of profit by segment. Segment profit includes revenue, related cost of services, and ongoing operating expenses directly attributable to the reportable segment. Segment profit excludes goodwill and intangible impairment charges, depreciation and amortization expense, unallocated corporate general and administrative expense, interest, other income and expense, income taxes, and costs not considered to be ongoing costs of the segment.

 

Solving Workforce Challenges Globally robust worker shortage age 65 complex will be almost global workforce double solutions growth diverse 1 Bureau of Labor Statistics Employment Projections: Occupations with the most job growth, 2016-2026. Industrial staffing and RPO jobs: #2: food prep/serving workers, #8: labor, freight, stock, and material movers, #12: construction laborers and #16: customer service representatives. 2 U.S. Census Bureau, An Aging Nation: The Older Population in the United States (2014). 6

 

Strong Position in Attractive Vertical Markets Construction Manufacturing Transport & Wholesale Retail & Services            Industry Dynamics Industry 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 US Population Housing Permits Industrial Production Transportation and Warehousing Employment E-commerce % of Retail Sales Millions Thousands Index Millions 350 2,500 110 330 105 5.5 14% 13% 310 2,000 100 5.0 12% 290 95 11% 270 1,500 90 4.5 10% 250 85 9% 230 1,000 80 4.0 8% 210 75 7% 190 500 70 3.5 6% 170 65 5% 3.0 150 - 60 4% 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 1993 1996 1999 2002 2005 2008 2011 2014 2017 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 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 7

 

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

 

Segment Strategy Highlights Leverage Digital Grow On-Premise Capitalize on Market Strategy Solutions Leadership  Compelling  Differentiated offering  Recognized global leader JobStack™ technology and established  Perfect fit for larger  High growth market branch network customers with longer-duration /  Attractive margins  Value creation: 24/7 strategic need for Leverage Digital Strategy order fulfilment, contingent workers enhanced  Best-in-class proprietary customer/worker  Strength in the technology (Affinix™) experience e-commerce vertical  Mobile-first, AI-enabled,  15%+ margins on cloud-based platform incremental revenue  Streamlines the candidate sourcing process Boost shareholder returns through share repurchase

 

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

 

On-premise and E-commerce Driving E-commerce On-premise Vertical Leadership  Perfect fit for larger customers  Labor intensive pick-and-pack with longer-duration / strategic need movement v. traditional bulk pallets for contingent workers  Increasing demand for  Staff Management is PeopleManagement's ability to PeopleManagement's flagship on- deliver a flexible, fully sourced and premise solution and a recognized managed workforce industry leader

 

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

 

TMP Strengthens PeopleScout’s European Presence1 + TMP Holdings LTD  Bolsters PeopleScout's position as #1 global provider of RPO services2  Global RPO market is expected to grow 12% over the next five years3  PeopleScout’s segment profit margin was >20% in 2017  30% of all RPO engagements are now multi-country3  UK presence improves our ability to compete on multi-continent RPO engagements  Employer branding present in >50% of all RPO engagements  Adds an appealing solution to our existing RPO services  UK RPO market is the 2nd largest in the world (after the US)  TMP is a recognized RPO provider in the UK 1 On June 12, 2018, TrueBlue acquired TMP Holdings LTD, a mid-sized RPO provider in the UK. See press release and presentation at trueblue.com for further details on the acquisition. 2 Source: Everest Group. Overall RPO rankings by annual number of hires (2017). 3 Source: NelsonHall. Estimated market CAGR from 2017-2022; % multi-country RPO contracts for 2016/2017.

 

Well Positioned to Boost Shareholder Returns with Buybacks millions $233  $78 $54  $31  2014 2015 2016 2017 1.7x 1.7x 17% 17% 17% 13% 0.9x 1.0x 2014 2015 2016 2017 2014 2015 2016 2017 1 $100 million stock repurchase authorization announced on 30 October, 2017. $68 million remaining under the authorization as of September 30, 2018. 2 Calculated as net cash provided by operating activities, minus purchases for property and equipment. 3 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. 4 Calculated as adjusted net income divided by average shareholders’ equity at the end of the prior four quarters.

 

 

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): - Enhances comparability on a consistent - interest and other income (expense), net, basis and provides investors with useful - income taxes, and insight into the underlying trends of the - depreciation and amortization. business. Adjusted EBITDA, further excludes: - Used by management to assess - acquisition/integration and other costs, performance and effectiveness of our - goodwill and intangible asset impairment business strategies. charge, and - Work Opportunity Tax Credit third-party - Provides a measure, among others, used processing fees. in the determination of incentive compensation for management. Adjusted net income and Adjusted net Net income (loss) and net income (loss) per - Enhances comparability on a consistent income, per diluted share diluted share, excluding: basis and provides investors with useful - acquisition/integration and other costs, insight into the underlying trends of the - goodwill and intangible asset impairment business. charge, - amortization of intangibles of acquired - Used by management to assess businesses, as well as accretion expense related performance and effectiveness of our to acquisition earn-out, business strategies. - tax effect of each adjustment to U.S. GAAP net income (loss), and - adjusted income taxes to the expected effective tax rate. Free cash flow Net cash provided by operating activities, - Used by management to assess cash minus cash purchases for property and flows equipment. 15

 

1. RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME, PER DILUTED SHARE (Unaudited) 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 (loss) $ 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 (loss) (4) (6,287) (39,994) (7,011) (4,834) Adjustment of 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 2. 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 (loss) $ 55,456 $ (15,251) $ 71,247 $ 65,675 Income tax expense (benefit) 22,094 (5,089) 25,200 16,169 Interest and other (income) 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. 16

 

3. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOWS (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 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. 17

 

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) using the expected rate of 28 percent. 5. Adjustment of the effective income tax rate to the expected rate of 28 percent. 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. 18