TrueBlue (TBI) 4 Nov 242024 Q3 Earnings call transcript

Greetings, and welcome to the TrueBlue Third 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. Management uses non-GAAP measures when presenting financial results.

You are encouraged to review the non-GAAP reconciliations in today's earnings release or at trueblue.com under the Investor Relations section for a complete understanding of these terms and their purpose. Any comparisons made today are based on a comparison to the same period in the prior year, unless otherwise stated.

audio the website remarks today's at a transcript of on be call, copy available full investor be TrueBlue's the and a company's the will prepared provided and soon Lastly, after will call. replay conclusion of my now the turn President to Taryn call Officer. Chief Executive pleasure to Owen, is It over and

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

their for the as expected, was conditions caution market business challenging. Revenue curb trends. Customers client to process. This staffing both at year workforce As apparent in down are engagement as spend trends million, prior continue an volumes is elongated strategy. the decision before hiring compared reduced uncertainty for looking quarter XX% confidence to leading on remain $XXX client to hesitancy current to market as levels following starting grow industry, and to with the weigh and new well subdued business adjustments making significant

labor as at are the areas meet are can we current we expand. dynamics needs support play, focused to the of to demand and positioned on ensure control well the market we workforce needs the Given

today tremendous customers work, Our while teams are doing duration where with they and establishing relationships meeting growth. that future are new short also solutions flexible will drive

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additional relationship our a examples professional food to encompass company. client team's an testament through team, and comes recently multinational services. ability by the in for engagement RPO These create expanded are year search example adapt our execution, MSP Driven our that products and with has service to growth. and a secured exceptional early who opportunities to Another PeopleScout

volumes highly managing customer stay and also both teams our positioned as we align and current the the to current efficiencies address ensure discipline our cycle with are delivering to as operating we with the evolving while structure engaged market better agility to improve. labor ensure even ready scaling dynamics, clients demands immediate As their We we return. we understand through are and needed to are are conditions with needs,

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Our national and expansive local sets market apart technology presence a powered as our us footprint leader. differentiating by

transition marks app rolled and goal. This proprietary base, well a have our of significant in network We ahead milestone across account digital national proprietary JobStack our ease our the us. technology the successfully out needs, new user year-end associates engage in control which business and address quickly our with allows of and transformation evolving to the map road increasing as customers our brand us

insights success early We to as enhancements. our the of real-time by excited are launch implement we leverage

that implement market associate connects value and developing associates services our technology an look differentiated using competitive position us our insights additional work features get invite we with expanding with expertise. forward shared continually enhancements quickly presence way expansive and we on experience and to the easy allow a as market faster, to associates. We For fast strengthen to responded seamless our our high-performing rapidly bring customers and that combines back sites, the to through products an feature for and customer the desire example, experience. These their improving a customers exclusive our their to and we

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remains we well in pipeline not projects up client these grow the in further digits did space. double positioning and our this the is nature renewable While in capture volumes expected us quarter, to year. Fluctuation of for are energy opportunities healthy, the work the given growth

continued have search technology higher and diversify to leverage end growth including skilled and our services. markets also as professional business opportunities solutions flexible into in placements, We such our attractive to capture RPO professional

by success, relationships high-value We serving existing expanding skilled and with and are new deals energized markets. high-growth and our early winning roles end higher

these of opportunities reduce third drive and further to deliver expansion. A operational our focus, creates clients scale the opportunities priority to simplifying for revenue return, drive is structure strategic and teams associates to brings our and our organizational volumes will to Streamlining customer profitability. excellence. engagements inefficiencies enhanced As growth closer

in We operating this and continue with growth. We we XX% cross-selling focus scale our that, specialties. future seeing from we are costs our on form realize to the have our eliminate quarter. look and by made synergies we reduced discipline operate benefits for as strides efforts enhance our agility to in flexibility area beyond create to core increased and And to of silos notable the and already as greater

staffing outlook labor the positive. current Although market dynamics challenging, are long-term remains

shortages and are discipline customer for we demand cycle workforce the us even well priorities clear ensure growth. staffing growth through compelling position and profitability create return. Evolving agility our and tremendous managing volumes for assets and strategic will needs are for strength, structural stronger positioned our when strategically needed to and competitive the opportunities with We business

our enhancing around resources our and people connect technology I who strategic and drive further are people, forward, We about over pass we details have the mission call the are advancing our will and financial to and excited to work. results opportunities to Carl, priorities we will the and value now ahead, that outlook. right share confident shareholder

Thank decline for the and full-time on suppressed for labor demand hiring workforce focus their due their temporary XX%. costs quarter to and hires million, was as you, permanent clients Taryn. operating a of hesitant to make reducing be $XXX revenue continues Overall needs. in Total uncertainty to remain market

factors by profitability. committed in PeopleScout, well development of points expansion from for client segment Gross the margin more another flat compared to momentum, lower of market for for continues the prior of environment the Changes and our additional costs XX favorable margin While commercial decline decline. of were SG&A of to a driven to lower-margin of capitalize This we opportunities these revenue on strength, year. There our to by team our growth quarter points subdued services services, as XX.X% pursuing reserves. We XXX trends driving offset for basis this marks our current this reduced factors overall was highest growth a third quarter. and mix, pressures double-digit business, as as consecutive delivering components XX the basis remain enhancing contributed favorable growth PeopleManagement decline year led quarter basis driving by showed points. Pricing XX% couple our These from commercial the the quarter. drove in were prior in our both this compensation consistent in space. offsetting volumes, workers' with

demand We align industry creating on disciplined to client is can as are better rebounds. scale flexibility focused we the demand with our also which demonstrated cost actions control, greater areas by structure to our while

We have made structure significant creating are progress simplifying improved that efficiencies driving our organizational results. and already

conditions reported the revenue of as lean due quarter, expense quickly our deliver of million our expands which associated as $X net cost assets. loss foreign zero efficiencies, on traditionally even on we grows, profitability operations the profitability our this positioned our to to are deferred but and in U.S. allowance forward, a effect primarily improved tax income essentially structure Looking included with better valuation with enhanced $X U.S operations improve. We million tax income benefit and tax

net operations, while was debt reminder, has impact adjusted loss the a million. was million, our $X EBITDA allowance As on or covenants. $X valuation liquidity Adjusted no

turn business to continued build of points which most the includes sequential our demand verticals did in continued return was across trends the of quarter Lower let's reduced segment and margin typical points. we profit but drive behind geographies. specifics progressed which decreased to from X XX%, on-demand sequential and September. decline as basis sale in revenue client We quarter, volumes July entered the Canada, we August Now, XXX and our to in historical the through down our segments. PeopleReady of

starts. project solar well United temperatures in on we energy work, to as in mainly volume renewable lower For south-west didn't projects, the the as quarter States, existing delayed driven the by new high due the grow

Given are energy of the in and fluctuations nature of these these types projects, renewable volumes delays expected.

hiring The is strategy points. declined. PeopleScout clients a of X opportunities as already decision loss double produce challenging needs. Results to high-volume the loss a time, and demand strong was roles a navigate adding revenue as doing volumes XXX and lower portfolio growth client, for responding and new businesses decline pressures points revenue due leverage to profit contraction in-source cost digit the as in we around year great team was the basis large workforce secular lower the the for has broader At a capitalize was to the the position. for change. client's impacted to The same of on by operating XX% growth by margin accounted quarter the year by the down revenue uncertainty prior part with client business of in job decreased also our continue market perspective, were hospitality driven the From their wins. segment to continued margin driven We decline. as outperformed a to the was which dynamics, largely market the of

by services, margin management segment these up X% to conditions consecutive in hiring evident to macro offset improve subdued the client expansion our in client margin in contraction quarter retail. decreased was serve, of third are profit actions we many commercial demand revenue driven revenue with return. This its While growth driving cost verticals was profit customers' was digit volumes, decline as align leverage these margin better partially lower levels, as disciplined expect the with delivered by starting basis volumes XX further declined. PeopleManagement cost and The which was efficiencies. at structure on-site segment lower driven we as drive operating such double while points. due expanded revenue to in demand of QX. PeopleManagement's growth our consistent by wins new relationships The

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

by changes the we associated balance revenue a driven sheet largely cash flexibility solid us provides drive down, operating in mix a While we future have This to flows strong are and with working as growth capital, opportunities. and position. liquidity look great

outlook the business expect of as week in XXth the XX percent. fourth last XX X in from headwind Turning to due quarter, well Canada. fiscal quarter to percentage for extra decline the a we year points our point of fourth sale as of to This on-demand the includes X percentage revenue our

Our to turn. outlook while indication trends when signs see current reflects will because as and some of continuation we bright have market improvement, demand are yet of there to spots a overall trends an

manage with $XXX through our We cycle the reduction the a $XX expect and we to positioned to SG&A million which prior we compared of as environment to rebounds. well of represents enhance profitability ensure roughly are commitment period year demand this a market million, as $XX

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

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

you, Carl. Thank

advancing strategically priorities to heard discipline stronger As market cycle from position for profitability and you with committed through to we have the demand our this even us remain rebounds. and managing growth us and agility today, challenging strategic industry when needed

our to questions. prepared enable strategic while to priorities, for shareholder and confident We open connect long-term strengths with advance work our combination are remarks. in mission call now value. This Operator, and that the us please will delivering people our our concludes assets, many

first And Silber Jeff our comes question Instructions]. [Operator with BMO Capital from Markets.

how Ryan This count wondering was for Jeff. moving. been could on is for if I just customer feel a you has the provide

about is volume perhaps whether trending to more this can than understood, has attrition time, retention weakness understand customer demand well of going a driven playing I the down been how there customer versus customer the us on? X issue it weakness net the Just trying those of think and up Is have this into additionally, market anything is anything year? the how then at revenue issue. And point but been current is the in or that's count? secular number volume you tell labor pretty wins,

as to as quarter then PeopleManagement expansions healthcare are for on-demand grow trend the new total quarters the logo retain business, continues last although growth returns as quarter you customer And Ryan, a favorably sequentially of double-digit is are to into for we an digit which subdued our for thank that now new annualized existing time annualized quarter demand, Despite when and being attractive that, well did portfolio. as TrueBlue prior year. market, quarter. In in wins And and X, X, professional customer existing to continued comparison with as challenges Centerline, so the And volume saw as X the ongoing and to continue Hi, to row. roles. wins count sequentially PeopleReady well those win up growth customer doubled volumes. Within business much business, that in double are our wins customer a customers, business, we like skilled from the new of mentioned, question. to nearly wins positioning from year-to-date delivering in declined outperform higher revenue our our many markets both PeopleScout teams added relationships continuing growth levels. In the in that has well of for historical significant win our the as market on new the business, consecutive significant this quarter expand

scope share bringing board. the retention, we're market that new our strong levels, expansion normalized current certainly, and customer nicely the both volumes positioning very return customer to as us is and capture to on new customers wins customers So, with

you then the you And spread if revenue have if by bill pay provide for have quarter. And typically growth then that. the just segment. rate was wondering the you I

for course. question. of Thanks the Yes,

then on comparable just We've of Ryan, give call to I'm XX%. is a it of QX at want kind through. start to yes, when kind with I So, QX walk guidance, and on basis. guidance, midpoints out, and then if look couple But got a here, we give that I'll but TrueBlue, of to going minus about I'm us thinking TrueBlue you're going items

then We get over that's PeopleReady, QX X causing a And it's as here. and a total comps also negative of our of point an decline for have that's TrueBlue about in just about points will point had headwind QX of which X year Canada for extra lapse we growth creating on week, and reminder, TrueBlue. then in prior of also, a X points those

XX% midpoints down you asked down on PeopleReady, pay for are TrueBlue, it then down for spreads. those also comparable So, take to PeopleManagement for about XX% XX% of basis, a for PeopleReady, XX% down a down kind on PeopleManagement, of TrueBlue, midpoint take down When down GAAP X% it basis, for XX% QX, for down PeopleScout. PeopleScout. And for for bill XX% you for and back, XX%

Just were in PeopleReady were about rates while our on X.X%, rates bill up pay spreads, X.X% up so our bill business. our pay

mentioned we're 'XX. in seen we That about on trend moderated well kind get pay our into expect in the X% in last margin. to October. and lower that QX, this from growth led a pay continue pay pandemic. We at growth prepared trend this to we've basis As that points talked in rate to We'd XX% of post for in And and sitting that were rate same continue like And as in growth of 'XX, the is decline now X.X%. throughout to Ryan, all-time to year. call, I experienced moderate highs the continue XX kind about the seen we've we've rate the remarks, as

Marcon comes Baird. Our next from Mark with question

both One, to of can had of around relative I PeopleReady one lot just anybody questions. positives. wondering a of about who Obviously, hurricane couple a different impacts, Sarasota. terms the and at that there's branches see in negatives of Tampa maps looks

seeing? And up work. getting end you the lot getting? work disruption did into factoring cleanup that much So, how cleanup wondering is of are How much then guide? how sometimes you end a And up you

for question. you thank the Mark,

is situation hurricanes, cleanup in play critical more and members resume role play in because in our PeopleReady the focused recovery like all months, the regards provide in as than permits possible on-demand are to able be operations that role We're XX a skilled with upcoming in dealing of a first are to on support currently our our and to serve. PeopleReady impacted quickly will we're rebuilding. In In and able just Milton we resume this our really communities the ensure efforts. were As as approved support operations restoration specifically, team to to Helen staff priority efforts working a always we safety we which plans those the cleanup as provides with impacted trades construction the do awarded, areas. in business disaster are efforts. and and organizations in quickly

Our Asheville, branch was damaged. North office in Carolina

And the unit working continuity of critical the teams customers' meet from for the in business traveling pool the play our that in be to team because in area. associate supporting limited brought a have mobile able we quite to role and is needs Asheville, the community. So, again, is

Mark, to I $XXX,XXX the Taryn was kind for of, have QX of have QX an October Milton for for financial timing talking on impact. you're a These tend negative we with and slight It was net with both of just here. and impact about about. The efforts to Helen you're neutral, them. approximately did impact as $XXX,XXX be, slightly hurricanes a standpoint, for us impact cleanup of about to it, on that these those of QX in typically And and a know negative immediate asking call then from for kind us, positive they add that, do

terms rebound think the to negative work all don't the in of be subsequent than you that what the significantly more is going was? And

mean, look is, would I do. net where positive over all it I are. it cleanup efforts we at say, is of again, We depending if this and the time, impact neutral our to on kind of net

in our have into to that's We of and that over those come recoveries in, see outlook. start our longer those and would included we guidance, a as period time

particularly the a to expect it's you slowed cooler? mean getting renewables Can impacts. the weather it bit about But do understandable little I talk and mentioned resume, you quickly that how down you business? in little a terms of now bit that that

our four new a strong. those I'll our in for pipeline secured will logos perspective, renewable solar in We From utility start. quarter, renewable's in revenue actually large-scale which remains bring certainly, XXXX. PeopleReady business the projects

So, hot this we is lumpy opportunity impact where long-term and in really large mid- confident we had the wins and in business the very here. have PeopleReady was PeopleReady still that we would couple a feel some addition of It some Mark, just business, but states some sites in weather outside a to weather. I say about talked well. as started to see of historically, renewable we've

secured Our manufacturing wins a New Mexico. panel solar solar PeopleManagement with in company does business that

that beyond. And where and solar hire in about roles. well finally, then skilled and excited clean electrical we're we'll new energy a roles to another company So, provide as with recent win as win PeopleScout had a engineering

focus talked renewable much to as on continue outside are about, we as starting of business some well. that that as get So, opportunities we we've to the

your RPO form but Promoter what other much Can greater what about And Net to trending it some terms them? How seeing maintaining to that move resources contracts with of lastly, internal clients? of sounds of to feedback? continued the in with discussions in-sourcing. How or just of use that's clients your a that broad-based large just other towards Scores you hospitality regards making you're are like then of they're any extent? talk existing some a your with the them company, And with is are have

Yes. the outsource client or would customers it from Thanks change hospitality and I for for we outlier outsourced strategy our expect an to we And, the rest And those have in-house business we've business, to the nature the are to close to we of will we solution we down seen hiring volumes, of other as and recruitment volumes this customer volumes. we're to to clients in exceed in-house business keep was of experiencing volumes cases RPO our and ability that up effort to them their return recruiting recruiting long-term and This are the to unique we customers, of once our to are base, part growth a staying lower during extremely talking in in be from prior in believe an various the cycles and question. rather decision, historical retain them. take support we've their terms teams. for busy. We're call long what in-source as capacity built customers' by some contracts return the in-house of do low, scale been these recruiting that where and alive. see their really seeing of And teams seeing RPO And fully well. Really rates. term. Across

we're their from check customers. the expand. with as well them So, certainly support positioned in to great and and them change We feedback needs getting we're regularly,

with question Mehta Research. next comes from Kartik Our Northcoast

Maybe thoughts feel just trended how what in saw business get how been. for trends a the you October, on have Carl, maybe and to just quarter

the Yes. Thanks, Kartik, for question.

really midpoint when and trended in kind where those I of about line October mentioned, our kind QX guides, guide, of As gave October earlier. with think we I

minus comparable X% for PeopleReady, minus for PeopleManagement, for a XX% for on basis, XX% minus minus XX% PeopleScout. So, TrueBlue,

with in and right outlook our So, guidance. line

because of Taryn, holiday season the maybe just your business react, And that any curious trending taking how I'm X December, impact is this of kind wondering business. maybe having weeks odd is to day, if on how business. in of out your year customers

certainty to planning continue certainly an environment. confident And, caution that more as Well, for in needs. overall, customer customers mindful they're being feel far point, of They're uncertain workforce say future I as inflection it's plans. really and their just those using would perspective, workforce from an our a they communicate looking just sentiment so that can

say help. is that best our Our customers they need our indicator when

positioned, close highly to well ensure the customers reflects now we're workforce and their that. guidance the really through end engaged our that around staying to we're and we're needs of year, and our so, And

this one I just Carl. last last talked business. leverage which the about question, quarter, is little And bit in a the know we

taken as gets wondering, at to get actions the to revenue for obviously, of we back and wondering growth. lower kind in let's expect incremental XX%? revenue of XX%, type you when normalize growth of some You've business industry you'll I'm margins see the the margins cost. what some and would look incremental business this And increased say, you if, I'm

Thanks, Yes. Kartik, again for the question.

So, yes, to I $XX job costs cost will think lead year of of year, continued to think improved We've we've out we good cost done a margins. this guided management. do really taken kind million it we managing as over and this

if to about the of revenue this So, I business, well.  But you we've if a to our indication talked see seen. historically to incremental they of when expect of of still the where took We XX work model, yet of margin anywhere just do the margin XX%. from we it, growth XX% to kind kind that just we're across segment of it maybe that comes points XX% But those of feel historically going pleased actions bit XX% look improvement with be across profitability for but XX%, we even XX%, there, of a that basis levels. in. the returning think like of as took cost we've than XX do, last kind we'd historical margins.  So, higher call depending But our demand at kind to even to north have made, done little you that we're with on the call to we've on better kind we'd

and we've that, the quarter, I benefit win won as well.  Just joint to key an We're cross-selling metal metrics, increased in serving a just there's wins to our add in safety from come a and new we utilization, as a of structure management rates, from org of couple associate secured our company. with PeopleScout seeing work has And that fill that a examples PeopleReady client organization. serve And pursuit another a by efforts improved partnership PeopleManagement scrap have our like scores improvement several if could people done pharmaceutical team. and the things

the these some and of have teams silos break to down So, real has benefit. a closer in working ability been collaboration our

from Instructions]. Our Company. Marc & [Operator Sidoti question with next comes Riddick

the I So, Maybe are with timing encouraging certainly about the rollout. And commentary it's wondering from if and and things JobStack the was you sounds little talk about perspective. we bit a like talk an bit could could it. how it initial a around going little

I think ahead there's guess what was about can it the would sort little could being great. that you or areas you as pressures are then initial a commentary your maybe any I you're there talk that of be bit far that if feedback receiving schedule.  And of as share

of schedule. network are out Thanks account well very and Yes, base we to successfully branch for the proprietary have ahead question, happy Marc. our rolled our new JobStack national across app

working for give to initial search as already streamlines a in ability to to from as rates more app process user quickly engage and map and our we've turning address are And gaining couple just enhances evolving to version candidates them. as user-friendly allows side, our us just both that their we're needs, user as on more job and which very easy that is the to order of implemented quickly their the adoption the And services.  And, a to we control this candidates the tech side. an improvement well some it months, on customer first makes made easier to customer for seen our the really with experience examples. First, associate ultimately momentum it feedback extend customer needs.  So, intuitive, launch the new site their we've a reminder, an an extension Just making road couple I'll their positive our address feature associate the on for feature and easier with of access our supply in new our app a essentially enhanced a customer way. the

forward we is functionality and on to really that's features enable map growth designed a have organization. move As robust we that for road here, focused the

it and anxious on this to about excited So, we're to asset. really build continue

of any around certain of made as And share think was of certain and that viewed wondering bit be maybe prepared thoughts in some or or commentary bright then sort our about areas where some I wise, is sort can this talk the to you spots remarks, at I focused might geographically places as about we thinking I are industry bright maybe little spots. could sector if point? was a focus that you your

there. had about move PeopleReady serve prepare we're in outside continued to recent in we in new X as we've we've then so customer we've wins pharmaceutical and space and we side, PeopleManagement, PeopleScout business, seen Yes. And forward would businesses to a mentioned our in we couple our talked in A we've skilled where about.  On with for positions as of expansions I placements. expand new variety finally, supporting wins really that I here skilled year, further a get a the some of secured the trucking growth is renewable. in some the growth win company is in health care.  And health I'll that to that nice care, wins started. clinical excited earlier far business efforts something care driver supporting us roles logo seeing has this PeopleReady get And had health highlight roles. in PeopleScout commercial wins we in this hire some

technology with won and U.S. insurance deal and their to in U.S.-based hire firm, RPO in we'll report Australia, to beyond. in a India, PeopleScout move cycle full a further and expand support technical where And we'll professional services business hires XXX so, then global that happy recently

progress in So, as that making well. some good really area

time, this at showing I'm additional questions. And no

hand you. it Owen Taryn So, for Thank remarks. to closing I'll back

service upcoming thank everyone, and commitment mission exceptional to team quarterly on next advancing with for to also efforts forward associates customers our want thank for opportunity and today. the our for their look you to their I you, and speaking people to joining investor and work. We and TrueBlue to take to entire Thank events this connect call. you, our tremendous providing at in operator, us

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

may parties Thanks. And disconnect. concludes today's that call. All