TrueBlue (TBI) 5 Aug 242024 Q2 Earnings call transcript

Greetings, and welcome to the TrueBlue Second Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

At this time, I want to remind everyone that today's call and slide presentation contain forward-looking statements, all of which are subject to risks and uncertainties, and management assumes no obligation to update or revise any forward-looking statements. These risks and uncertainties, some of which are described in today's press release and SEC filings could cause actual results to differ materially from those in the forward-looking statements. when results. measures non-GAAP uses presenting financial Management

terms You today's under earnings to review of the reconciliations in the non-GAAP these understanding release complete Relations for are their section purpose. encouraged Investor a and or at trueblue.com

based today unless same year, a comparison stated. Any period are to the in comparisons on made prior otherwise the

replay of be will transcript Investor website TrueBlue's a of copy on full after soon the Lastly, available a the be company's today's conclusion the provided and and prepared audio remarks will call, at call.

pleasure It is Officer. turn now to over Taryn President my Executive to Chief the call and Owen,

Thank you, joined Carl am Financial operator, I Officer, and us. welcome, Schweihs. We today's being call. our you Chief to by appreciate everyone, with here

last challenging call, environment caution our operating staffing the client and on with uncertainty to current is wait continuing on industry. temporary the discussed we economic As

managing We profitability. our current and advance with cycle we and are our as share to through agility the market enhance priorities discipline strategic market capture long-term

Revenue and quarter as rates, trends. and the hiring interest to uncertainty to around down prior inflation million, for curb XX% was factors reduced business year continued drive spend the other compared $XXX

quarter sequential Our business. over did declined the typical seasonal we revenue see build trends not on-demand our in as

we on serve and we ensuring We labor agility on sales our are and the is dynamics are teams have customer returns. current capitalizing and laser-focused flexibility took volume We priorities. operating decisive which understand and scale market every organization the cost structure actions our current as to when efficiencies simultaneously operating to aligned needed demand, driving reduce strategic customers. opportunity we market only across have greater Not costs, to deliver consistent our with created with our

needs, teams stay significant have priorities. made we advancing evolving their clients our and our address highly strategic progress As immediate to with engaged

more digital us and sustainable markets capture market transformation, to attractive will deliver enable and share, Our enhance profitability. our to organizational long-term our expanding structure our end growth commitment and accelerating simplifying

forward future strategic our to Positioning staffing key our business contingent a is in the component digital of better compete plan.

our the we We complete this of are to app year. rollout the during continued quarter, proprietary rollout new on and the track JobStack

initial early already with usability and associates have application changes had and insights with some implement our us. a form leverage associates process our it as our improved real-time success fully customers to in using for of the easier for launch to onboarding ability our as well engage and make to We our digital

technology and control with We the our business, are The evolving the excited proprietary creates our significant platform a and that to our allowing road will us strengthen quickly about expansive technology address and of successful experience transformation in map expertise. digital the that position achievement differentiated opportunities our future needs. rollout represent us combines and implement our a presence competitive through market market with to providing enhancements user

in Another growth, to secular key markets our end cyclical underpenetrated and priority opportunities. growth is strategic on less expansion capitalize high

grown skilled such services. as progress in deep leveraging care. trades, apprenticeship program services renewable by renewable expanded and health our skilled solid have our We have energy driver and attractive work such made Within offerings, driving markets we and as in commercial service energy management and end expertise trades our

including skilled RPO also skilled into both engagements. organization, our and government with have diversifying recent existing expanding commercial higher serving corporate positions. the and higher RPO, across expanding technology in We with roles, progress the continue made sector presence relationships care placements we health engineering, in wins Within and staffing

in We markets. and high-growth our deals are by expanding energized end new early this and success count winning high-value customer

return, volumes further these will expansion. revenue confident as scale opportunities that of customer are We the drive

profitability. and structure organizational plan of our focus, element is to the simplification our third of drive strategic growth The enhanced

silos notable have our area structures on-demand support on-site elimination in the global and functions. labor consolidation of and Canada, We our leadership this of and of with business sale made amongst in our teams strides technology

mentioned, a simplified opportunities enhanced focus Streamline enable driving to and have as and creating cost inefficiencies innovation future look greater reduce to more I taken we operational profitability. long-term actions, disciplined structure we As and growth. increased also excellence realize on

are commercial increased internal our core efforts cross-selling staffing in seeing already of X and We we and benefits direct form from specialties, around align the our organization synergies hire. as

industrial encompasses commercial this on-site and services skilled When we as on-demand services. our talk well as staffing about commercial trades staffing, and driving our

structure While allows we in core organizational well-established to aligning current will continue assets. leverage brands, our go our better strengths specialties, under us our market around to to our

Direct go-to-market a associates, growth leverage more our able focused to bring prospects. and allowing PeopleScout to our hire and With its our our combined are we strong teams margin brand reduce clients growth. structure, closer includes costs long-term to to better profitable with deliver and us strengths

actions and consistent taken and have create efficiencies tremendous return. our growth streamline and clear strategically to stronger And when strategic assets Evolving competitive compelling shortages opportunities profitability us with position priorities our workforce capitalize. needs even will Current operations, market customer remain well for and strength, structural create demand labor efforts challenging. to us staffing volumes our for to business, position and immediate dynamics we

the outlook strategic right forward. resources to drive people, staffing priorities and our positive, have long-term technology is The we and

about we We our opportunities work. are and committed as advancing remain and to enhancing shareholder connect to ahead the people excited mission value

who share pass to financial now will call the our over and outlook. details will results Carl, around further I

point our continued focus to a client trends Total you, quarter Overall, demand pressures year-over-year and trends. hiring range. of decline led sequential This for on-demand in PeopleReady in of resulting a weakness and in decline. economic driving restricting Thank build reducing costs million, greater with revenue Taryn. was on the business, lack larger outlook our X $XXX XX% of short

PeopleReady double-digit trends typically would growth. QX, historical in flat was to QX revenue result while low

industry, we're temporary on verticals. capitalizing economic While broader staffing continue uncertainty to client the weigh and caution growing on

driving for the work renewable quarter our with Our of delivered second its near quarter commercial QX. growth in revenue and growth energy grew double-digit consecutive services eighth

revenue the primary well was unfavorable highest-margin our Gross in decline a down changes XXX XX.X% from as was decline as of business, points. margin renewable the in mix, work for increased PeopleScout. basis both energy quarter, driver The

a than reminder, costs, due margin as underlying comparable energy other PeopleReady is the general renewable will As to a travel we gross the these carries total margin periods. accounts lower gross renewable lapse the business work involved. energy PeopleReady's impact large of normalize and margin low-volume pass-through to to consistent with work costs Outside the for

type offset certain by contributed These environment. from adjusted pricing adjusted our subsidies, COVID-XX economic which partially recognition manage bill pay decline are the net also we pressures were government as to of EBITDA margin Unfavorable rate and of inflation and this calculations. typical excluded income of

by client our cost with align COVID-XX demand by We the enhance structure XX%, the reduced disciplined subsidies X driven and and our government remaining with decline points profitability. SG&A to better actions from

We are better ability areas focus a through to operating our with confident manage improve. and commitment in positioned cycle in to discipline that this control, we enhance with our as the can market profitability and we are conditions ensure we are and

enhanced other be rebounds. we which industry organizational and of million we've of over end, reductions permanent that to many structure, $XX To of improved structure, expect our enhanced demand due efficiencies, means automation costs out and our profitability to these operating taken simplified as

which of and asset performance. $XXX reported of net weakness to million included charge quarter, by impairment a the driven after demand million a noncash goodwill intangible in our trends this We economic stock uncertainty $XX our and due loss tax recent

the charge valuation for in due quarter our results allowance incurred a loss impairment Also the of part the was deferred to charge. assets tax large from included million under $XX in

As have no a reminder, on these or our covenants. operations, charges debt impact liquidity

$X adjusted Adjusted EBITDA net million, loss $XX was while was million.

margin specifics X Now segment decreased points on-demand Canada, PeopleReady segments. XX%, decline and our in of points. to of the includes the sale was down revenue business basis of turn XXX let's from profit our which

mentioned As revenue lacked flat was larger-than-expected compared year-over-year earlier, to quarter our PeopleReady decline. build, to and the sequential prior a leading typical I

demand energy trends delivered work, quarter. for offset across growth margin Overall, continued growth and well which partially continued lower double-digit with From most in softness contraction the verticals by renewable client and perspective, volumes, a leverage bill geographies the renewable up bill declined rates from with the rates up by was as mix revenue largely inflation, increased lower X.X%. work rate pay pay and unfavorable driven operating X% and as energy as revenue

pressure expect this We would are in pricing of we of economic environment. type the facing type

look cut customers As companies demand in a lower to costs compete and environment. staffing

and We rebounds. demand improve business continue growth expect to this we demonstrate returns pricing discipline, environment to as to and the

economic hiring and pressure demand driven was revenue lower points. face and decline segment client as businesses to margin profit in challenges, The basis XXX XX% leading decreased down volumes volumes was by cost uncertainty they more ongoing PeopleScout declined internal fill Many in needs. workforce resources their base. a employee And some, on churn level seeing are around less their for jobs. to are relying heavily to where have

are hiring these The factors All leading curved demand. leverage overall reduced declined. margin was as operating by driven of revenue lower contraction market trends to and

basis segment macro in demand. profit client profit volumes growth align the in decreased demand the on-site up our offset to The was PeopleManagement XXX due actions structure with driving disciplined our by revenue points. while PeopleManagement the driven we X%, lower with segment decline was in verticals margin conditions consistent evident cost by management partially client services. margin and serve cost expanded commercial solid better to

in finished under We cash with during million no $XXX to quarter, million availability. turn repurchased $XX of leaving $XX the let's the the We and of our Now authorization. $X debt, million sheet. borrowing quarter common stock million balance remaining

a growth position solid future with us to have opportunities. great balance liquidity strong We flexibility sheet, support providing and

outlook our for to the Turning quarter. third

Canada. on revenue to XX% a revenue our in includes point company business growth X expect percentage on-demand We of sale drag XX%. the due to decline of This total

see market reflects on-demand by outlook year-over-year the lack quarter, in Our driven sequential a of build continuation that our a we with in decline largely typically current third business. the of trends

represents reduction $XX workforce our million We costs, to calculations. year prior net approximately $XXX which roughly million of $X driven and from cost management of adjusted the million and disciplined will $XX expect to by includes EBITDA period, income million, of which be reduction adjusted compared a SG&A excluded

enhanced cost mind, environment the move drive leverage rebounds. and structure will demand year will the operating drive margin we in improvement increased our as profitability our from through additional Keep lean efficiencies as heightened

be the information on on presentation Additional found shared today. in our outlook website the can earnings

back up closing I for call turn questions, some Taryn open Before remarks. it want to the to over we for

Thank Carl. you,

committed strategic priorities As challenging with this cycle you today, us our heard advancing through managing discipline. market agility and we from have remain and to

rebounds. efforts our stronger when to and industry growth profitability have decisive position us with and Consistent streamline efficiencies demand actions immediate strategically taken to create we for operations, even

strategic mission in to work us people value. We enable priorities will delivering assets are long-term our in many and combination advance strengths connect confident our that with our to while

open please now call Operator, remarks. the This for prepared concludes our questions.

first Our question of the Instructions] [Operator Baird. Marcon line with Mark comes from

Could customer most data are trends? macro suggest? basis? And Especially on the that what the recently. better a points month-to-month given fairly signals some worse? getting recent getting on conversations you Is we've in or it elaborate most What you been latest weak seeing are

in quarter June like of are And you how in And curious August? July? so terms I'm early the what of to to stages May June, the really progressed, seeing

Thank you for clients results. their our own on question, the to pressure Mark. bottom line still There's improve certainly

more We on leaning see with and full-time their and customers being more many in of fill. a that temporary both selective they're to choosing to the positions internal continue our costs reducing focus resources on

that when these to our cycles are and is have point know, increased hearing they the predict hiring that aren't best us yet. difficult you As clients needs, tell and we inflection

what can our we demand, strategic and controlling costs control, advancing driving on focused We're priorities.

here. I'll trends inter-quarter the Mark, -- on for question And the thanks, cover

market build in decline So trends, reflects with look, by largely the quarter, lack in outlook the our business. driven the year-over-year a typical sequential the PeopleReady current continuation our of third of

in averages, the and we're a which trend we June, we same in that our than pre-pandemic our outlook. are historical build is So just see seeing and as quarter, that's didn't softer walking in and July, sequential through May reflected

service. and look as market say that most kind continued of the we're in geographies state trends From state pretty end I'd and being saw perspective, in largest retail, an softness, And verticals represent hospitality well. trends our and close trends seeing end markets

That's really helpful.

state the regions did You any renewables? you Is difference end discernible retail across that hospitality aside seeing there from said mention is weakness and or markets trends.

or pointing about, we specific close. I state talking was was in kind exclude verticals renewables, to. seeing No, of which There's the that If trends we're I it's different. no any pretty that's trends either what

-- and just And your back to earlier go so to comments.

sequential correct? the essentially, without I the So as quarter progressed, actually the of lack year-over-year uptick, mean, trends worsened

into build perspective. look QX And year-over-year seeing you're a why from right, That's that's Yes. pretty our flat.

Okay. little a With you things. can regards -- to just different about -- talk bit X

a specifically of change made, $XX is adjusted? can That's cost adjustments in question. head one is much of there outline count, what there you that How was in you structure? just office the how change the million Specifically, a much in

got And follow-up to then a regards guidance. just the I've with

-- for vast headcount. Yes, from again, thanks -- $XX in costs majority people of of sure, our the a that Mark million, cost and look, are perspective

those And -- a area. are as point -- From say, I'd about there's costs so of out. look in just to I are, of as of that things just think we where I we our costs, though, do them kind a couple think X/X

cost Look, the on we made about good structure. the progress feel we've that

onetime to on this ] stay minus overdelivered to If We control are back things those We There the or guided that [ can XX% [ at [ quarter, not XX% on the was in the we of that COVID we but so market. X out we the [ X look -- minus continuing minus out. $X ], subsidies we've minus year-over-year. adjusted adjusted focused on that benefit ]. million ], we've

look of XX% is to costs $X third That which workforce year-over-year. to about into forward, onetime million of the we're related reductions we a quarter. When $XXX million, midpoint guiding includes

out, that million, would to carry through or year. XX% So which adjusting expect be down about the $XX we'd

From kind you, into think things those QX. the one the we're coming count, for us give it's down most too. XX% those of that And of going where of Year-over-year, head But incrementally I at that's so to are you cost future. can when roughly structures, about end help a out.

and I if to our could about closer on talking just that, get We've customers. add been And to structure to we've that our journey Mark. been a org simplify

structure, you when keeping around business, that that that while in cost so customers people support people leadership roles reduced are we back to invest closest reduced, think have think our about been and sales. office, And about our the that continuing the to have we our in priority --

Taryn any end just at was with quarter? than the count of to regards it -- offices, the office can today different the first the

Are you asking count? branch

Right.

on-demand see from XX No, The change our much around not change there's you a was that PeopleReady business, divestiture I be of branches, biggest would the QX. of which would believe. roughly

next Our from Northcoast the Mehta Research. question of line with Kartik comes

certain a specific it pricing. in And Taryn bit every I'm you And Or segment? Carl, guys wondering, little is there business? talked a about is trend to a

our So I PeopleReady talking was bill pay pricing that refers on business to the spread. about the

third And each they about Okay. for as then on you quarter? quarter, perspective declines just as -- the for would your second sequential of being we look the in same segment the anticipate were

decline? sequential The

what second about guess, in asking the was third Yes, decline as apologize, is -- same I guess be decline the the I in year-over-year the I quarter? quarter will it I'm

Yes.

you kind the by Let the give just me of outlook segments.

from a Kartik. think would I that helpful be midpoint perspective,

X%, Canada. point So QX be includes PeopleManagement X from minus from includes down points would X Canada. which XX%, down PeopleScout which down XX%, guidance PeopleReady XX%.

picture you, for Taryn. a big And just question

taking out. the currently. business to to the going you're done Obviously, happening what's market But to reflect really manage You job eventually, trying is guys have good costs a turn.

stands as all that the just returns. And costs of a today But the trying we for revenue? is like of mean the XX% now in does I'm right had what with kind there. the what a away look sense cost where structure trends the business to you've really know XX% considering I'm the are business? market eventually, I done, does that And increase to wondering, far the seems get and if outlook today

you cost made Kartik. progress our on feel for structure. the good question, the we yes, really Thank we've Yes. Again, about

we structure out million today, as of So taken $XX we've cost earlier, many permanent. mentioned of about kind look as reductions our being with those at of cost we

So to we'd points our a incremental is. expect of be performance what rebound our of couple margin the historical on north

XX expect you're historical to if anywhere an those of share. When call We'd it our cash run to free XX% flow margins from operating points per see improvement our talking you'd we EBITDA leverage. XX%, of enhanced to $X.XX basis $X.XX to and about XX additional Kartik, through model,

are. significant a improvement from where obviously, So you

Yes. And question. just one last

Just thoughts there been RPO saw demand. on you last in there's any what from change quarter? If

that, to we're Kartik. some current what customers that demand the And RPO with I volume that perspective, our customers. volumes take seeing I'll are an handle from is have teams today from our in would cases, internal reduced say able they have. they the

them do their so work when those those ability positioned we're to and well And exceed to certainly support to staying the themselves. close demands customers

The team implemented but additional levels. PeopleScout, hiring subdued the and really to being has done of good adding they're portfolio a at customers job

the the demand we're the that about as portfolio And because expand to able really excited when so retention customer relationships to well we'll that those adding be we're as customers returns. upon

account want Just grow to our as we to Kartik, sequentially from [ that our QX in QX one actually saw add to ] business. well PeopleScout

it's is So here. -- really volume it a story

from next Silber the Our line question with BMO Markets. Capital of comes Jeff

about You spread. highlighted anything anything there? your the Is you there there [ control is can driven, on that? -- do it's ] curious bill just pay I'm and under marked but Obviously, the pressure

Yes. hear Thanks. Jeff, nice to you. from

from expected market spread, seeing about we biggest this. So rate growth of are moderate. when The well pay pay bill this rate is the as impact rate have that a conditions talked are and what rate kind we're we increases the we've trends like as this perspective, bill

from of the trend so we've couple moderate years. seen July. And rate into seeing pay even We're continue last that that

paying as can. right as pricing we're sure and wages also capture much And to demand we so appropriately the making that our business

Okay. enough. That's fair

you're about talk what You we've in areas, in health you're Can of trades, doing skill less expansion doing on some cyclical the mentioned what or we planning care? got. your think I

type a there? of give somewhat the it's but some placing examples that of you're vertical, positioning different know of maybe I

question. for thank to -- wins. in PeopleScout care Happy just health business, a I'll of the of couple examples you our wins seeing some we're specifically. recent nice new Yes. Jeff, in give

talk quarter heard that we have the charter private actually health supporting last new schools. schools and roles in us engagement in care You clinician about a

asking customer That opportunity has RNs the to now them. for is us roles hire been where expanded, now professional LPNs, and

the expansion that's example. So client

In Europe niche the expand won really base. they are customer as deal roles looking to are where a we've hiring their we the in hard-to-fill hire space, biopharmaceutical just helping

to there. we're where PeopleScout And that so number some of more in a wins get we add like customer stories have portfolio business to continuing and our the

that too, strategy is, has -- Jeff, to PeopleScout we've And add to on on been one, Yes. hires. look, really just the in professional

And strides so good there. we've made really

So look of professional well kind the as if those. both roles in you that growth in of just in number professional placements of both are as our at of number double-digit we're base made, customers hiring

So making health only professional roles. in our care, for not drive good but in progress, more

Our next from Riddick question the & line comes Company. Sidoti Marc of with

talking time was your mentioned you year. through I progress So some and remarks could you're with making wondering -- you the about the if JobStack in spend rollout prepared the

maybe some get you're bit a don't can us I that things then seeing more little was maybe of sort that benefits as where and detail, seeing you year and a wondering things the planned the JobStack? shine if you the conditions, benefits of much you as maybe could the see have currently but you're that little some with given about economic give you you that through of the get to talk

the for Absolutely, question. Marc. Thanks

accounts, been on are out of branches Our new roll branches year. of track JobStack out of rolled before and national to end most this and the to our remainder we has the the app our

about excited So we're that.

rolled a any didn't out to business that the and team process, get Our phenomenal job have priority done app and has was in just to the that first we regard. disruption that in ensure the

we'll get able we features out, more really will competitive the release rolled more that of advancing start once to offer of a us And be advantage.

reducing through so give that and onboard now digital a associates for apply couple and far, the application, done are I'll ultimately the of time some to examples paid the of just takes dispatched of get them work. it able completely that things we've to in our

about And excited so that. we're

the engage text through on messaging. early in wanted got this from they process able to some feedback onboarding to that associates We be

just feature engage we so And last through allowing first the in implemented and to get that associates process. that via month, our text

that, we addition text to a launched just In reminder.

shift a us So get in reminder for they take can job today need and they to shift. they're to no, and goes call shift another or to to allowing our associates say, case going automatically the to a which show respond before yes, exchange, up that off, the their associate back

And showing first in the across business. just the results rate fill increased released month that the been an has we're that, is that early

feature. And certainly, that out rest about the we year. road to robust excited throughout as roll have to So this of that such map a enhancements continue

an for of the certainly And touched then that opportunity and with efficiencies pricing power and kind going to it like. you on grading was greater because seems give

competitive you maybe as sort a maybe can sort looking the like bit and the there? about for little Can build that advantages improved how and be the far utilized you're as the of and potential down maybe data of talk for sort that then -- road of analytics

part certainly that before. those is strategy the insights That's have didn't Absolutely. to we real-time have of

So a looking of couple that at. we're examples

shift from algorithm our likely to One is jobs rating and X-star associates customers. are complete most the that that the a to take help with an us serve shift will

to up for work. at ability reliability And predict that looking associates so really for showing the

So example. that's one

pricing, able the we're with app, real-time at looking question, at is that pricing Thanks the and looking for Marc. opportunities to we'll the with that utilize. Another data have we're that really analytics

And the Owen we Taryn session. over remarks. question-and-answer for the the of call closing have back reached turn now end I'll to

to advancing Thank take TrueBlue you, I us resilience want people and work. you, connect mission also thank for today. our a to and operator, for the joining thank to and moment team their to dedication entire everyone,

to forward and upcoming on investor our you quarterly call. events speaking with at look We next

don't to a please evening. Have have reach any you hesitate great out. If questions,

your This lines concludes Thank conference, this and your may participation. you. disconnect you time. you for today's at Thank