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): April 29, 2019

	

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 April 29, 2019 , TrueBlue, Inc. (the “company”) issued a press release (the “Press Release”) reporting its financial results for the first quarter ended March 31, 2019 , and revenue and earnings outlook for the second quarter of 2019 , 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 first quarter ended March 31, 2019 (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, April 29, 2019 . 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 Q1 2019 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 April 29, 2019	
		
99.2	Earnings Results Presentation for April 29, 2019 conference call	
		
99.3	Investor Roadshow Presentation	

EXHIBIT INDEX

			
Exhibit
Number	Exhibit Description	Filed Herewith	
99.1	Press Release dated April 29, 2019	X	
99.2	Earnings Results Presentation for April 29, 2019 conference call	X	
99.3	Investor Roadshow Presentation	X	

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:	April 29, 2019	By:	 	/s/ Derrek L. Gafford	
 	 	 	 	Derrek L. Gafford	
 	 	 	 	Chief Financial Officer and Executive Vice President	

TRUEBLUE REPORTS FIRST QUARTER 2019 RESULTS

TACOMA, WASH. - Apr. 29, 2019 -- TrueBlue (NYSE:TBI) today announced its first quarter results for 2019 .

First quarter revenue was $552 million , roughly flat compared to revenue of $554 million in the first quarter of 2018 . Net income per diluted share was $0.21 , a decrease of 5 percent , compared to $0.22 in the first quarter of 2018 . Adjusted net income 1 per diluted share was $0.27 , a decrease of 13 percent , compared to $0.31 in the first quarter of 2018 .

“Our revenue trend improved from the prior quarter despite challenging weather conditions, and bottom line results exceeded our expectation,” said Patrick Beharelle, CEO of TrueBlue. “PeopleReady delivered its fourth consecutive quarter of revenue growth and our focus on reducing cost of services produced our thirteenth consecutive quarter of consolidated gross margin expansion.

“We see a favorable market for human capital services and are pleased with both the progress and opportunity associated with our strategies,” Mr. Beharelle continued. “Our JobStack TM and Affinix TM technologies are leading our business into a digital future. JobStack dispatches continue to increase and we are accelerating our deployment of Affinix. We remain focused on organic growth, disciplined cost management, and returning capital to shareholders.”

2019 Outlook

TrueBlue estimates revenue for the second quarter of 2019 will range from $606 million to $623 million . The company also estimates net income per diluted share will range from $0.39 to $0.46 and adjusted net income per diluted share will range from $0.55 to $0.62 .

Management will discuss first quarter 2019 results on a webcast at 2 p.m. PDT (5 p.m. EDT), today, Monday, Apr 29, 2019 . 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. In 2018, we connected approximately 730,000 people with work. Our 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 clients, (3) our ability to attract sufficient qualified candidates and employees to meet the needs of our clients, (4) our ability to maintain profit margins, (5) new laws and regulations that could affect our operations or financial results, (6) our ability to successfully complete and integrate acquisitions, (7) our ability to successfully execute on business strategies to further digitize our business model, and (8) 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 additional information 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	
(in thousands, except per share data)	Mar 31, 2019	Apr 1, 2018	
Revenue from services	$	552,352		$	554,388		
Cost of services	403,976		411,120		
Gross profit	148,376		143,268		
Selling, general and administrative expense	129,661		125,763		
Depreciation and amortization	9,952		10,090		
Income from operations	8,763		7,415		
Interest and other income (expense), net	553		2,204		
Income before tax expense	9,316		9,619		
Income tax expense	1,040		864		
Net income	$	8,276		$	8,755		
 	 	 	
Net income per common share:	 	 	
Basic	$	0.21		$	0.22		
Diluted	$	0.21		$	0.22		
 	 	 	
Weighted average shares outstanding:	 	 	
Basic	39,366		40,443		
Diluted	39,735		40,694		

TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(Unaudited)

	
							
(in thousands)	Mar 31, 2019	Dec 30, 2018	
ASSETS	 	 	
Cash and cash equivalents	$	26,328		$	46,988		
Accounts receivable, net	327,038		355,373		
Other current assets	32,620		27,466		
Total current assets	385,986		429,827		
Property and equipment, net	57,898		57,671		
Restricted cash and investments	229,743		235,443		
Goodwill and intangible assets, net	324,547		328,695		
Operating lease right-of-use assets	38,717		—		
Other assets, net	63,125		63,208		
Total assets	$	1,100,016		$	1,114,844		
 	 	 	
LIABILITIES AND SHAREHOLDERS’ EQUITY	 	 	
Current liabilities	$	215,321		$	225,526		
Long-term debt, less current portion	42,200		80,000		
Operating lease long-term liabilities	26,723		—		
Other long-term liabilities	217,485		217,879		
Total liabilities	501,729		523,405		
Shareholders’ equity	598,287		591,439		
Total liabilities and shareholders’ equity	$	1,100,016		$	1,114,844		

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

							
 	13 Weeks Ended	
(in thousands)	Mar 31, 2019	Apr 1, 2018	
Cash flows from operating activities:	 	 	
Net income	$	8,276		$	8,755		
Adjustments to reconcile net income   to net cash provided by operating activities:	 	 	
Depreciation and amortization	9,952		10,090		
Provision for doubtful accounts	1,778		2,209		
Stock-based compensation	3,606		3,409		
Deferred income taxes	3,209		1,370		
Non-cash lease expense	3,565		—		
Other operating activities	(1,841	)	(572	)	
Changes in operating assets and liabilities:	 	 	
Accounts receivable	26,558		42,679		
Income tax receivable	(3,645	)	(2,842	)	
Other assets	(5,274	)	(1,964	)	
Accounts payable and other accrued expenses	(9,878	)	(5,232	)	
Accrued wages and benefits	(10,266	)	(10,125	)	
Workers’ compensation claims reserve	(4,380	)	(4,579	)	
Operating lease liabilities	(3,414	)	—		
Other liabilities	3,268		1,637		
Net cash provided by operating activities	21,514		44,835		
Cash flows from investing activities:	 	 	
Capital expenditures	(5,862	)	(1,911	)	
Divestiture of business	—		8,500		
Purchases of restricted investments	(3,070	)	(3,299	)	
Maturities of restricted investments	10,337		6,417		
Net cash provided by investing activities	1,405		9,707		
Cash flows from financing activities:	 	 	
Purchases and retirement of common stock	(5,303	)	—		
Net proceeds from employee stock purchase plans	380		395		
Common stock repurchases for taxes upon vesting of restricted stock	(1,438	)	(2,086	)	
Net change in revolving credit facility	(37,800	)	(46,301	)	
Payments on debt	—		(567	)	
Other	(69	)	—		
Net cash used in financing activities	(44,230	)	(48,559	)	
Effect of exchange rate changes on cash, cash equivalents and restricted cash	314		(760	)	
Net change in cash, cash equivalents, and restricted cash	(20,997	)	5,223		
Cash, cash equivalents and restricted cash, beginning of period	102,450		73,831		
Cash, cash equivalents and restricted cash, end of period	$	81,453		$	79,054		

TRUEBLUE, INC.
SEGMENT DATA
(Unaudited)

	
								
 	13 Weeks Ended	
(in thousands)	Mar 31, 2019	 	Apr 1, 2018	
Revenue from services:	 	 	 	
PeopleReady	$	326,868		 	$	316,835		
PeopleManagement	158,044		 	183,892		
PeopleScout	67,440		 	53,661		
Total company	$	552,352		 	$	554,388		
 	 	 	 	
Segment profit  (1):	 	 	 	
PeopleReady	$	11,470		 	$	9,525		
PeopleManagement	2,306		 	5,649		
PeopleScout	10,427		 	11,905		
	24,203		 	27,079		
Corporate unallocated expense	(7,277	)	 	(7,664	)	
Total company Adjusted EBITDA  (2)	16,926		 	19,415		
Work Opportunity Tax Credit processing fees (3)	(240	)	 	(195	)	
Acquisition/integration costs (4)	(577	)	 	—		
Other adjustments (5)	2,606		 	(1,715	)	
EBITDA (2)	18,715		 	17,505		
Depreciation and amortization	(9,952	)	 	(10,090	)	
Interest and other income (expense), net	553		 	2,204		
Income before tax expense	9,316		 	9,619		
Income tax expense	(1,040	)	 	(864	)	
Net income	$	8,276		 	$	8,755		
		
(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.	
		
(2)	See the Non-GAAP Financial Measures table on the next page for definitions of EBITDA and Adjusted EBITDA.	

(3)	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.	

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

(5)	Other adjustments for the periods presented include implementation costs for cloud-based systems. For the 13 weeks ended March 31, 2019, other adjustments also include amortization of software as a service assets, which is reported in selling, general and administrative expense, these costs are offset by $3.9 million of workers’ compensation benefit related to additional insurance coverage associated with former workers’ compensation carriers that are in liquidation.	

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 adjustments.	 	- 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:
- gain on divestiture,
- amortization of intangibles of acquired businesses,
- acquisition/integration costs,
- other adjustments,
- 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.	
Free cash flow	Net cash provided by operating activities, minus cash purchases for property and equipment.	 	- Used by management to assess cash flows.	
		
1.	RECONCILIATION OF U.S. GAAP NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME, PER DILUTED SHARE	
( Unaudited )

										
 	Q1 2019	 	Q1 2018	 	Q2 2019 Outlook*	
 	13 Weeks Ended	 	13 Weeks Ended	 	13 Weeks Ended	
(in thousands, except for per share data)	Mar 31, 2019	 	Apr 1, 2018	 	Jun 30, 2019	
Net income	$	8,276		 	$	8,755		 	$ 15,500 — $ 18,100	
Gain on divestiture (1)	—		 	(1,393	)	 	—	
Amortization of intangible assets of acquired businesses (2)	5,081		 	5,221		 	5,000	
Acquisition/integration costs (3)	577		 	—		 	800	
Other adjustments (4)	(2,606	)	 	1,715		 	1,600	
Tax effect of adjustments to net income (5)	(427	)	 	(887	)	 	(1,000)	
Adjustment of income taxes to normalized effective rate (6)	(264	)	 	(675	)	 	—	
Adjusted net income	$	10,637		 	$	12,736		 	$ 21,800 — $ 24,400	
 	 	 	 	 	 	
Adjusted net income, per diluted share	$	0.27		 	$	0.31		 	$ 0.55 — $ 0.62	
 	 	 	 	 	 	
Diluted weighted average shares outstanding	39,735		 	40,694		 	39,500	
*Totals may not sum due to rounding	 	 	 	 	 	

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

										
 	Q1 2019	 	Q1 2018	 	Q2 2019 Outlook*	
 	13 Weeks Ended	 	13 Weeks Ended	 	13 Weeks Ended	
(in thousands)	Mar 31, 2019	 	Apr 1, 2018	 	Jun 30, 2019	
Net income	$	8,276		 	$	8,755		 	$ 15,500 — $ 18,100	
Income tax expense	1,040		 	864		 	2,500 — 2,900	
Interest and other (income) expense, net	(553	)	 	(2,204	)	 	(400)	
Depreciation and amortization	9,952		 	10,090		 	9,800	
EBITDA	18,715		 	17,505		 	27,500 — 30,500	
Work Opportunity Tax Credit processing fees (7)	240		 	195		 	200	
Acquisition/integration costs (3)	577		 	—		 	800	
Other adjustments (4)	(2,606	)	 	1,715		 	1,600	
Adjusted EBITDA	$	16,926		 	$	19,415		 	$ 30,000 — $ 33,000	
* Totals may not sum due to rounding	 	 	 	 	 	
		
3.	RECONCILIATION OF U.S. GAAP REVENUE TO ORGANIC REVENUE	
( Unaudited )

																
 	Total company	 	PeopleScout	
	Q1 2019	 	Q1 2018	 	Q1 2019	 	Q1 2018	
 	13 Weeks Ended	 	13 Weeks Ended	 	13 Weeks Ended	 	13 Weeks Ended	
(in thousands)	Mar 31, 2019	 	Apr 1, 2018	 	Mar 31, 2019	 	Apr 1, 2018	
Revenue from services	$	552,352		 	$	554,388		 	$	67,440		 	$	53,661		
Acquired entity revenue (3)	(14,289	)	 	—		 	(14,289	)	 	—		
Organic revenue	538,063		 	554,388		 	53,151		 	53,661		
		
4.	RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOWS	
(Unaudited)

																
 	Q1 2019	 	2018	 	2017	 	2016	
 	13 Weeks Ended	 	52 Weeks Ended	 	52 Weeks Ended	 	53 Weeks Ended	
(in thousands)	Mar 31, 2019	 	Dec 30, 2018	 	Dec 31, 2017	 	Jan 1, 2017	
Net cash provided by operating activities	$	21,514		 	$	125,692		 	$	100,134		 	$	260,703		
Capital expenditures	(5,862	)	 	(17,054	)	 	(21,958	)	 	(29,042	)	
Free cash flows	$	15,652		 	$	108,638		 	$	78,176		 	$	231,661		

(1)	Gain on the divestiture of our PlaneTechs business sold mid-March 2018.	

(2)	Amortization of intangible assets of acquired businesses.	

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

(4)	Other adjustments for the periods presented include implementation costs for cloud-based systems. For the 13 weeks ended March 31, 2019 and June 30, 2019, other adjustments also include amortization of software as a service assets, which is reported in selling, general and administrative expense. For the 13 weeks ended March 31, 2019, these costs are offset by $3.9 million of workers’ compensation benefit related to additional insurance coverage associated with former workers’ compensation carriers that are in liquidation.	

(5)	Total tax effect of each of the adjustments to U.S. GAAP net income using the expected ongoing rate of 14 percent for 2019 and 16 percent for 2018.	

(6)	Adjustment of the effective income tax rate to the expected ongoing rate of 14 percent for 2019 and 16 percent for 2018.	

		
(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.	

Q1 2019 Earnings April 2019 www.TrueBlue.com

 

Forward-looking statements

 

Q1 2019 summary Improving revenue trend  Total revenue flat, up from -3% in Q4 2018  Organic revenue -3%, up from -5% in Q4 20181 EPS exceeded company outlook  EPS of $0.21 exceeded high-end of company outlook by $0.10  Outperformance driven by lower workers’ compensation expense2  EPS -5% and adjusted EPS1 -13%  Thirteenth consecutive quarter of gross margin expansion Strategic progress and return of capital to shareholders  PeopleReady: 800k shifts via JobStackTM in Q1 2019 with digital fill rates of 40%  PeopleManagment: Attractive on-site solution for larger clients with strategic needs  PeopleScout: Leveraging AffinixTM and global strategy to drive long-term growth  Share Repurchases: $5M in Q1; $53M remaining under current authorization 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. 2 $3.9 million of workers' compensation benefit from favorable developments associated with prior insurance carriers. Favorability excluded from adjusted EBITDA and adjusted net income.

 

Financial summary Amounts in millions, except per share data Q1 2019 % Change Revenue $552 Flat (-3% organic1) Gross Profit $148 4% Net Income $8.3 -5% Net Income Per Diluted Share $0.21 -5% Adjusted Net Income1 $10.6 -16% Adj. Net Income Per Diluted Share $0.27 -13% Adjusted EBITDA1 $16.9 -13% Adjusted EBITDA Margin 3.1% -40 bps  Revenue growth muted by challenging weather in Feb. (approx. -1% growth impact)  Gross profit and net income in Q1 2019 benefited from lower workers’ compensation expense  Net income in Q1 2018 benefited from gain on divestiture of PlaneTechs 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 0.8% 0.5% 0.7% 26.9% 25.8% Gross Margin Q1 2018 Workers' compensation1 Staffing RPO Q1 2019 Amounts in millions $3 $2 $1 $130 SG&A $126 Q1 2018 TMP PlaneTechs (divested) Core business Q1 2019 (acquired) Figures may not sum due to rounding. 1 $3.9 million of workers' compensation benefit from favorable developments associated with prior insurance carriers. Favorability excluded from adjusted EBITDA and adjusted net income.

 

Q1 2019 results by segment Amounts in millions PeopleReady PeopleManagement PeopleScout Revenue $327 $158 $67 % Growth 3% -14% 26% (-1% organic) Segment Profit1 $11 $2 $10 % Growth 20% -59% -12% % Margin 3.5% 1.5% 15.5% Change 50 bps -160 bps -670 bps  Growth constrained by Notes:  Revenue growth of 3% v. 2%  Growth constrained by previously disclosed last quarter previously disclosed headwinds4  Fourth consecutive quarter headwinds3  Margin compression primarily with revenue growth  Margin compression primarily due to the acquisition of TMP  Segment margin up primarily due to previously disclosed (~200 bps) and previously from lower workers’ headwinds (~100 bps from disclosed headwinds (~200 compensation expense2 Amazon and ~100 bps from bps); remaining compression another retail client) due to quarterly timing differences 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. 2 Year-over-year margin expanded after excluding the $3.9 million benefit primarily due to lower workers’ compensation expense. 3 PeopleManagment revenue headwind from loss of Amazon Canadian business in Q3 2018 (-6% revenue growth headwind), divestiture of PlaneTechs in Q1 2018 (-4% headwind) and volume / price reductions at another retail client (-3% headwind). Associated segment profit headwind of approximately $3M. 4 PeopleScout revenue headwind from one client lost after being acquired and less volume / lower margins on a large account that was re-priced to reflect a multi-year arrangement (-2% combined revenue growth headwind). Associated segment profit headwind of approximately $1M.

 

Leading our business into a digital future JobStack TM Industry leading mobile app that connects our Industry leading platform for sourcing, screening workers with jobs and delivering a permanent workforce Before Affinix After  80% worker adoption 30% applicant 80%+ applicant conversion rate1 conversion rate and 15,000 clients using Quick apply  4.6 stars in iOS app 50% of candidates Not mobile enabled apply with mobile store (worker app) Mobile enabled  800k shifts via JobStack Limited passive 40 candidates sourcing sourced per job in Q1 2019 with digital fill Efficient sourcing rates of 40% >35 days to fill 25 days to fill Virtual screening Note: figures represent initial improvements experienced across a small portion our client base that has been fully implemented on Affinix and tracks relevant statistics. 1 Applicant conversion rate represents the number of completed applications over the number of applications initiated.

 

Strong balance sheet and return of capital Total Debt Debt to Total Capital1 Amounts in millions Net Debt Cash $138 $119 $35 $29 $80 21% $42 18% $103 $90 $47 12% $26 7% $33 $16 2016 2017 2018 Q1 2019 2016 2017 2018 Q1 2019 Liquidity Share Repurchase % of Free Cash Flow2 Amounts in millions Borrowing Availability Cash 50% $277 45% $260 $26 40% $47 35% $171 30% $146 $35 25% 47% $29 $251 20% $213 15% 32% 34% $136 $117 10% 5% 2% 2016 2017 2018 Q1 2019 0% 2016 2017 2018 Q1 2019 Note: Figures may not sum to consolidated totals due to rounding. Balances as of fiscal period end. 1 Calculated as total debt divided by the sum of total debt plus shareholders’ equity. 2 Free cash flow calculated as net cash provided by operating activities less capital expenditures. 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.

 

 

Q2 outlook Amounts in millions, except per share data Revenue Notes • Previously disclosed headwinds start to diminish in Q2: 1 $606 to $623 Total TrueBlue -1% to 1% growth o Revenue headwind of $13 (-2% growth impact) v. $26 in Q1 (-5% growth impact) -3% to 0% organic o Adjusted EBITDA headwind of $4 PeopleReady $378 to $386 • Growth outlook reflects recent favorable trends, but facing more difficult year-over-year comparison in Q2 v. Q1 0% to 2% growth • Retail headwinds due to loss of Amazon Canadian business effective Sept. 1, 2018 and volume / price reduction PeopleManagement $160 to $166 at another retail client ($11 revenue impact, or -6% growth impact) -11% to -7% growth • No headwind from PlaneTechs divestiture (completed in Q1 2018) $68 to $71 • Client headwinds due to one client lost after being acquired and less volume / lower margins on a large account PeopleScout 17% to 23% growth that was re-priced to reflect multi-year arrangement ($2 revenue impact, or -4% growth impact) -3% to 3% organic Total Outlook Notes Net income per diluted share $0.39 to $0.46 • Assumes an effective income tax rate of 14% Adjusted net income per diluted share $0.55 to $0.62 • Assumes diluted weighted average shares outstanding of 39.5 Capital expenditures $4 1 Figures may not sum to consolidated totals due to rounding.

 

Select 2019 outlook information Amounts in millions PeopleScout Clients1 Retail Client (PeopleManagment) -$26 Amazon (PeopleManagment) -5 PlaneTechs (PeopleManagment) -$13 -$13 -12 -2 -4 -5 -3 -$5 Revenue Headwinds -8 -6 -6 -4 Q1-19 (Actual) Q2-19 Q3-19 Q4-19 -$5 -$5 -$4 -1 -$3 -4 -2 -2 -3 -1 -1 -2 -1 Segment Profit Headwinds Q1-19 (Actual) Q2-19 Q3-19 Q4-19 Note: Figures may not sum to consolidated totals due to rounding. Please see the outlook section of our Q4 2018 earnings presentation for additional background information. 1 PeopleScout client headwinds due to one client lost after being acquired and less volume / lower margins on a large account that was re-priced to reflect multi-year arrangement.

 

 

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 EBITDA excludes from net income: - Enhances comparability on a consistent basis and provides investors with Adjusted EBITDA - interest and other income (expense), net, useful insight into the underlying trends of the business. - income taxes, and - depreciation and amortization. - Used by management to assess performance and effectiveness of our business strategies. Adjusted EBITDA, further excludes: - Work Opportunity Tax Credit third-party processing fees, - Provides a measure, among others, used in the determination of incentive - acquisition/integration costs and compensation for management. - other adjustments. Adjusted net income and Net income and net income per diluted share, excluding: - Enhances comparability on a consistent basis and provides investors with Adjusted net income, per - gain on divestiture, useful insight into the underlying trends of the business. diluted share - amortization of intangibles of acquired businesses, - acquisition/integration costs, - Used by management to assess performance and effectiveness of our - other adjustments, business strategies. - tax effect of each adjustment to U.S. GAAP net income, and - adjust income taxes to the expected effective tax rate. 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. Free cash flow Net cash provided by operating activities, minus cash purchases for property and - Used by management to assess cash flows. equipment. 13

 

1. RECONCILIATION OF U.S. GAAP NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME, PER DILUTED SHARE (Unaudited) Q1 2019 Q1 2018 Q2 2019 Outlook* 13 Weeks Ended 13 Weeks Ended 13 Weeks Ended (in thousands, except for per share data) Mar 31, 2019 Apr 1, 2018 Jun 30, 2019 Net income $ 8,276 $ 8,755 $ 15,500 — $ 18,100 Gain on divestiture (1) — (1,393) — Amortization of intangible assets of acquired businesses (2) 5,081 5,221 5,000 Acquisition/integration costs (3) 577 — 800 Other adjustments (4) (2,606) 1,715 1,600 Tax effect of adjustments to net income (5) (427) (887) (1,000) Adjustment of income taxes to normalized effective rate (6) (264) (675) — Adjusted net income $ 10,637 $ 12,736 $ 21,800 — $ 24,400 *Totals may not sum due to rounding Adjusted net income, per diluted share $ 0.27 $ 0.31 $ 0.55 — $ 0.62 Diluted weighted average shares outstanding 39,735 40,694 39,500 2. RECONCILIATION OF U.S. GAAP NET INCOME TO EBITDA AND ADJUSTED EBITDA (Unaudited) Q1 2019 Q1 2018 Q2 2019 Outlook* 13 Weeks Ended 13 Weeks Ended 13 Weeks Ended (in thousands) Mar 31, 2019 Apr 1, 2018 Jun 30, 2019 Net income $ 8,276 $ 8,755 $ 15,500 — $ 18,100 Income tax expense 1,040 864 2,500 — 2,900 Interest and other (income) expense, net (553) (2,204) (400) Depreciation and amortization 9,952 10,090 9,800 EBITDA 18,715 17,505 27,500 — 30,500 Work Opportunity Tax Credit processing fees (7) 240 195 200 Acquisition/integration costs (3) 577 — 800 Other adjustments (4) (2,606) 1,715 1,600 Adjusted EBITDA $ 16,926 $ 19,415 $ 30,000 — $ 33,000 * Totals may not sum due to rounding See the last slide of the appendix for footnotes. 14

 

3. RECONCILIATION OF U.S. GAAP REVENUE TO ORGANIC REVENUE (Unaudited) Total company PeopleScout Q1 2019 Q1 2018 Q1 2019 Q1 2018 13 Weeks Ended 13 Weeks Ended 13 Weeks Ended 13 Weeks Ended (in thousands) Mar 31, 2019 Apr 1, 2018 Mar 31, 2019 Apr 1, 2018 Revenue from services $ 552,352 $ 554,388 $ 67,440 $ 53,661 Acquired entity revenue (3) (14,289) — (14,289) — Organic revenue 538,063 554,388 53,151 53,661 4. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOWS (Unaudited) Q1 2019 2018 2017 2016 13 Weeks Ended 52 Weeks Ended 52 Weeks Ended 53 Weeks Ended (in thousands) Mar 31, 2019 Dec 30, 2018 Dec 31, 2017 Jan 1, 2017 Net cash provided by operating activities $ 21,514 $ 125,692 $ 100,134 $ 260,703 Capital expenditures (5,862) (17,054) (21,958) (29,042) Free cash flows $ 15,652 $ 108,638 $ 78,176 $ 231,661 See the last slide of the appendix for footnotes. 15

 

Footnotes: 1. Gain on the divestiture of our PlaneTechs business sold mid-March 2018. 2. Amortization of intangible assets of acquired businesses. 3. Acquisition/integration costs and acquired entity revenue relate to the acquisition of TMP Holdings LTD completed on June 12, 2018. 4. Other adjustments for the periods presented include implementation costs for cloud-based systems. For the 13 weeks ended March 31, 2019 and June 30, 2019, other adjustments also include amortization of software as a service assets, which is reported in selling, general and administrative expense. For the 13 weeks ended March 31, 2019, these costs are offset by $3.9 million of workers’ compensation benefit related to additional insurance coverage associated with former workers’ compensation carriers that are in liquidation. 5. Total tax effect of each of the adjustments to U.S. GAAP net income using the expected ongoing rate of 14 percent for 2019 and 16 percent for 2018. 6. Adjustment of the effective income tax rate to the expected ongoing rate of 14 percent for 2019 and 16 percent for 2018. 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. 16

 

Investor Roadshow Presentation April 2019 www.TrueBlue.com

 

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 151,000 730,000 #1 Clients served annually People connected to One of the largest U.S. industrial Global 1 with strong diversity work during 2018 staffing providers RPO provider2 2013-2018 2013-2018 Average Return Revenue CAGR on Equity3 8% 16% $2.5B Growth Return 2018 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 client accounted for more than 3% of total revenue for FY 2018. 2 Source: Everest Group. Overall recruitment process outsourcing rankings by annual number of hires (2018). 3 Calculated as adjusted net income divided by average shareholders’ equity over the prior four quarters. 4

 

Three specialized segments meet diverse client needs On-site contingent workforce management solutions1 Revenue mix3 61% 29% 10% Segment profit3 55% 14% 31% Margin 6% 3% 19% 1 We use the following distinct brands to market our PeopleManagement contingent workforce solutions: Staff Management | SMX, SIMOS Insourcing Solutions and Centerline Drivers. 2 Also includes managed service provider business, which provides clients with improved quality and spend management of their contingent labor vendors. 3 Revenue and segment profit calculations based on FY 2018. 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 and will global workforce outnumber 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: Projected Number of Children and Older Adults (2018). 6

 

Strong position in attractive vertical markets Construction Manufacturing Transport & Wholesale Retail & Services            Industry Dynamics Industry FY-18 Business Mix: 23% FY-18 Business Mix: 26% FY-18 Business Mix: 22% FY-18 Business Mix: 18% 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 2,500 120 330 5.5 14% 13% 310 2,000 110 5.0 12% 290 100 11% 270 1,500 4.5 10% 250 90 9% 230 1,000 4.0 8% 210 80 7% 190 500 3.5 6% 70 170 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  15%+ potential operating  Attractive on-site solution  Compelling value margin on incremental proposition with  Perfect fit for larger attractive margins revenue clients with longer- duration / strategic need  Global RPO market  JobStackTM creating for contingent workers experiencing strong favorable differentiation growth with clients and  Strength in the associates e-commerce vertical  Leverage TMP acquisition to compete  Focused on new client  Goal to dispatch 4.5 on global opportunities wins and margin million shifts via expansion  Industry leading JobStack in 2019 (1 proprietary technology – worker every 7 seconds) rolling out AffinixTM, a with 50% digital fill rates next-generation HR tool Boost shareholder returns through share repurchase

 

Leading our business into a digital future JobStack TM Industry leading mobile app that connects our Industry leading platform for sourcing, screening workers with jobs and delivering a permanent workforce  Driving value via higher candidate  Competitive satisfaction, faster conversion differentiation enhances rates, reduced time to fill and client and worker loyalty client scalability  Highly rated in iOS and  Winner of the 2018 HRO Today Android app stores TekTonic Award for Candidate Experience  Continuing to grow digital fill rates  Winner of the 2018 Brandon Hall Award for Best Advance in RPO Technology

 

PeopleScout: attractive margin and rapid growth  Industry Leadership Segment Profit Margin 1 o #1 global provider of enterprise RPO PeopleScout 19% o Emerging healthcare vertical strength TBI Total 9%  Differentiated Service o Proprietary technology drives value-add recruitment capabilities FY-15 FY-18  Growing Market o 12% global market growth CAGR2  Global Prospects PeopleScout % of Total Company Results o Opportunity to broaden footprint in Revenue Segment Profit 31% Europe and Asia Pacific o Acquired TMP Holdings LTD, in June 2018 increasing PeopleScout’s ability 10% to compete for more global business 4% 5% FY-15 FY-18 1 Source: Everest Group. Overall RPO rankings by annual number of hires (2017). 2 Source: NelsonHall (2018). Represents estimated market CAGR from 2017-2022.

 

Well-Positioned to Boost Shareholder Returns with Buybacks millions 1.7x 1.7x $233 0.9x 1.0x $109 0.6x $78 $54 $31 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2 Total Debt to Adjusted EBITDA1 Free Cash Flow Solid return on equity4 millions $37 17% 17% 17% $35 16% 13% $6 $0 $0 2014 2015 2016 2017 2018 Share Repurchases3 2014 2015 2016 2017 2018 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. 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 Currently utilizing $100 million stock repurchase authorization announced on 30 October, 2017. $58 million remaining under the authorization as of December 31, 2018. 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 EBITDA excludes from net income (loss): - Enhances comparability on a consistent basis and provides Adjusted EBITDA - interest and other income (expense), net, investors with useful insight into the underlying trends of the - income taxes, and business. - depreciation and amortization. - Used by management to assess performance and effectiveness of Adjusted EBITDA, further excludes: our business strategies. - acquisition/integration costs, - goodwill and intangible asset impairment charge, and - Provides a measure, among others, used in the determination of - Work Opportunity Tax Credit third-party processing fees and incentive compensation for management. - other costs. Adjusted net income Net income (loss) and net income (loss) per diluted share, excluding: - Enhances comparability on a consistent basis and provides and Adjusted net - adjustment to the gain on divestiture, investors with useful insight into the underlying trends of the income, per diluted - acquisition/integration costs, business. share - goodwill and intangible asset impairment charge, - amortization of intangibles of acquired businesses, as well as accretion expense - Used by management to assess performance and effectiveness of related to acquisition earn-out, our business strategies. - other costs, - 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, minus cash purchases for property and - Used by management to assess cash flows. equipment. 14

 

1. RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME, PER DILUTED SHARE (Unaudited) 2018 2017 2016 2015 2014 52 Weeks Ended 52 Weeks Ended 53 Weeks Ended 52 Weeks Ended 52 Weeks Ended (in thousands, except for per share data)* Dec 30, 2018 Dec 31, 2017 Jan 1, 2017 Dec 25, 2015 Dec 26, 2014 Net income (loss) $ 65,754 $ 55,456 $ (15,251) $ 71,247 $ 65,675 Adjustment to gain on divestiture (1) (718) ———— Acquisition and integration costs (2) 2,672 — 6,654 5,135 5,220 Goodwill and intangible asset impairment charge (3) — — 103,544 — — Amortization of intangible assets of acquired businesses (4) 20,750 22,290 27,069 19,903 12,046 Other costs (5) 10,317 162 5,569 — — Tax effect of adjustments to net income (loss) (6) (5,074) (6,287) (39,994) (7,011) (4,834) Adjustment of income taxes to normalized effective rate (7) (1,843) 380 606 (1,805) (6,747) Adjusted net income $ 91,858 $ 72,001 $ 88,197 $ 87,469 $ 71,360 Adjusted net income, per diluted share $ 2.28 $ 1.74 $ 2.10 $ 2.10 $ 1.73 Diluted weighted average shares outstanding 40,275 41,441 41,968 41,622 41,176 2. RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (Unaudited) 2018 2017 2016 2015 2014 52 Weeks Ended 52 Weeks Ended 53 Weeks Ended 52 Weeks Ended 52 Weeks Ended (in thousands) Dec 30, 2018 Dec 31, 2017 Jan 1, 2017 Dec 25, 2015 Dec 26, 2014 Net income (loss) $ 65,754 $ 55,456 $ (15,251) $ 71,247 $ 65,675 Income tax expense (benefit) 9,909 22,094 (5,089) 25,200 16,169 Interest and other (income) expense, net (1,744) 14 3,345 1,395 (116) Depreciation and amortization 41,049 46,115 46,692 41,843 29,474 EBITDA 114,968 123,679 29,697 139,685 111,202 Acquisition and integration costs (2) 2,672 — 6,654 5,135 5,220 Goodwill and intangible asset impairment charge (3) — — 103,544 — — Work Opportunity Tax Credit processing fees (8) 985 805 1,858 2,352 3,020 Other costs (5) 10,317 162 5,569 — — Adjusted EBITDA $ 128,942 $ 124,646 $ 147,322 $ 147,172 $ 119,442 See the last slide of the appendix for footnotes. 15

 

3. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOWS (Unaudited) 2018 2017 2016 2015 2014 52 Weeks Ended 52 Weeks Ended 53 Weeks Ended 52 Weeks Ended 52 Weeks Ended (in thousands) Dec 30, 2018 Dec 31, 2017 Jan 1, 2017 Dec 25, 2015 Dec 26, 2014 Net cash provided by operating activities $ 125,692 $ 100,134 $ 260,703 $ 72,072 $ 47,525 Capital expenditures (17,054) (21,958) (29,042) (18,394) (16,918) Free cash flows $ 108,638 $ 78,176 $ 231,661 $ 53,678 $ 30,607 Footnotes: 1. Gain on the divestiture of our PlaneTechs business sold mid-March 2018. 2. Acquisition and integration costs related to the acquisition of TMP Holdings LTD, which was completed on June 12, 2018, 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, and the acquisition of Seaton, which was completed on June 30, 2014. 3. 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). 4. Amortization of intangible assets of acquired businesses, as well as accretion expense related to the SIMOS acquisition earn-out in fiscal years 2017 and 2016. 5. Other charges for the fiscal year ended December 30, 2018 include implementation costs for cloud-based systems of $6.7 million and accelerated vesting of stock associated with the CEO transition of $3.6 million. 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. 6. Total tax effect of each of the adjustments to U.S. GAAP net income (loss) 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 all other periods presented. 7. 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 all other periods presented. 8. 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. 16