TBI - Earnings call transcript Q4 2018

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Operator

Good afternoon, ladies and gentlemen. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the TrueBlue Fourth Quarter 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session. Instructions]. [Operator would of the TrueBlue. I Derrek over to CFO Gafford, like now, call turn to And Please ahead. go

Derrek Gafford

Good afternoon, Patrick everyone, call. I’m and thank you with Chief for our Executive Officer, Beharelle. here joining today’s

in statements. to section period We no Before we slide will obligation or of at and today’s in those are forward-looking We several for contain uncertainties any their to in comparisons some everyone which today’s today’s Relations results. statements, of non-GAAP or to made trueblue.com call presentation under revise materially terms our a all forward-looking encourage SEC remind and the the forward-looking measures subject begin, and our of are review stated. purpose. that when in and Investor want the otherwise press I to financial prior risks Any are and we update reconciliations comparison a earnings risks based presenting differ unless you release uncertainties, statements. cause to on and could in use which non-GAAP described release understanding today to actual same assume these our complete filings, year, These results the from

be call of turn soon we call, I’ll the also Patrick. on conclusion audio after Lastly, and and that, our of the to With the a a be available will our providing will copy replay today’s remarks call. prepared website at over full transcript

Patrick Beharelle

to Thank today’s And you, call. Derrek. welcome everyone

and toward ahead. we’re on we a broader on to in step what take dive back focused I sense, reflect into look XXXX the want we Before and a as year results, quarterly describe

also double-digit business progress in of growth our made several delivered at initiatives. and PeopleReady to showed many meaningful strategic organic improvement and Our returned XXXX We substantial PeopleScout. results growth on parts we

to just-in-time planning while the and same labor for becoming creating widespread take even to through shortages share our greater needs, lowering largest $XX our tightening of to connected time, free clients skill repurchases. excess has thousands solutions more manage margin higher are labor shareholders workers TrueBlue offered their focus to want The to world to million in with and baby this continuously cash to work return success solutions. flow in number business workforce placement run produce year temporary Millennials clients our future. the consecutive of and lives. XXXX, ongoing the XXX,XXX associates now by greater our the the spectrum when of gross by the their people one helped third we adapt adapting determined thoughtful market assignment and to Our a in our changing on US boomers expect tools three will or to costs are flexibility continue expansion, At The trends. leveraged We two on the capitalize force. permanent jobs. our are these ability generation The of need retirement businesses in strategic company our digital and the to of our from work. of and been the be

addition entire more process to technology In our also we’re and user-friendly. clients offering leveraging to make efficient solutions need, the

was and digitally. transforming competitive JobStack, via we are time-consuming Our advantage. competitive every the improvements XX,XXX demonstrate PeopleScout driving mobile PeopleReady three to all XXXX Affinix XX,XXX day. XX%, XXXX, shifts our app million we the and rates and fast and long-term enhanced visiting year-end our JobStack’s advantages. to the By enthusiasm achieved fill associates. and dispatched associates at branch our digital orders XX% of we the orders at In achieved rolled JobStack out platform processes we support XXXX, and are also more had with we the allows scale client transactions year using clients of manual begin which the end seeing adoption clients goal need into associates, market staff, of to app place our JobStack features, than and worker Thanks clients we’ve of to rate

XXXX forward, Looking technology experience on is enhancing capture the our revenue. the focus to for leveraging and user JobStack incremental

to to service client We also rates, will we enhance outside increasing and be and plan reach our we is retention. do also introduction adding clients equates one shifts strategically be year-over-year screening PeopleScout, XX% our business digital delivering worker platform industry-leading a sourcing, which broaden dispatch a further associate seven increase marketing attract scaling to for grow previously leveraging workforce. and both our to JobStack XXXX. million digital Technology Affinix of every associate By with in is at base our We’ll Affinix in dispatch functionality and permanent JobStack seconds. is our via XXXX, to X.X how and fill transforming the our network.

has We XXXX, Brandon buzz generating what’s for industry. lot about exciting the Affinix for been the But We’re Award it of Candidate several the Best HRO proprietary TekTonic and very it and Award Experience really Advance for awards Best Technology. won this a RPO within Today’s about the is excited business. Hall in what does including technology in

job candidates intelligence compile using a As candidates. to With crawl to artificial learning Affinix, the machine a and to example, five first and an it within before of of to minutes. the we’d slate web source creating could and days up slate candidates we’re Affinix, post take

increased higher seen and candidate already rates, satisfaction. positions conversion We’re reduced time-to-fill of evidence client

started we hope getting into Affinix, and just with more as share have to to XXXX. move We’re we

total PeopleScout in of number and our and opportunities segment to TrueBlue increasing PeopleScout significantly recruitment us our PeopleScout its United a serving importance business clients XX the creates RPO RPO more our services compete the across a truly for The of adapting In of and countries. fastest-growing that ability is XXXX, we Europe marketing announced acquisition our TMP, is to PeopleScout In enhances represented acquisition company is business, just undeniable. both than provider for X% June, global XXXX. in we’re margin to highest way XX% of through multi-continent profit, Kingdom. but strategy. leading now and business. in global Another segment is climbed TMP

segment. our brands traditional higher growth headwinds to and few going to and growth we Finally, to of to the hampered our from margin services, enable clients continue SIMOS. productivity staffing strong, market PlaneTechs, larger leverage help In specific our XXXX, solutions opportunities. contingent XXXX. client compelling Staff continue remains us industrial in was this offering staffing industry a forward. solutions lead to PeopleManagement present a offers divestiture brand, profit will which market, we Management demand But sophisticated range opportunities through by SMX further strategically workforce. of PeopleManagement higher March on value-added formally The focus part through sold on-site A

preparation an last the been as a Steve, their for smooth one run Executive Officer had the As Chief Operating TrueBlue becoming and planning of executive thank honor a Directors excellent for entire taking much I’m XXXX time in support The grateful on. and have it executing September, for TrueBlue. excited Team much and about a of was person CEO than the TrueBlue prospects spent and the very given accomplishments and opportunities like a more I also from was I of year for to Steve XXXX was in of who success, received. year it and Cooper, to of company, nearly humbled TrueBlue at of the all I’m and as XX Board The year given by I’d years. the all to was helm takes transition. the the I��ve role. But build transition. at efforts us assistance

dynamic work staying But meet propel reach right can have changing market is purpose with of connecting have rapidly innovative The changing. geographic our our will we technology, strategies shown us needs enable we and of We the the we’ll the and to of help world market. that true people work. and and us maintain growth leadership to

our earnings decreased turning results per EPS by expectations, in that with with performance, gross share delivered XX%. margin Earnings increased Now line line our per and by to were X%, expansion share growth. along adjusted while adjusted QX team top

take Let’s North American labor market. performance trades leading in skilled of of at PeopleReady and is of three the the a industrial staffing each the businesses. look closer provider our on-demand

further footprint total in company months’ of acceleration technology branch and help physical find and XX% quickly locations trailing use QX. and the industrial spite of we nationwide of contingent growing potential combined relationships, headwinds. XX labor grew XX% revenue energy during clients segment X% local efficiently. for PeopleReady Our And of see PeopleReady represents profit. of

PeopleManagement, and in accounts, combined underlying the growth confidence in growth our the with in of the was of sustainability business in was growth local Revenue the market. at which staffing our negative the industrial and increases American when provides of PlaneTechs pleased XX%, year. XX% trajectory solid North segment profit, completed the second first on-site largest XX% the account X% business, last third revenue with loss the that We’re divestiture excluding our growth. in solutions of of quarter of quarter workforce negative or the Amazon

second effective they in July, the XXXX. taking announced strategy be in of consistent they Xst, on we the As reminder, business Amazon, Canadian US would in half September a their employ in-house, the began with to

continues an through PeopleManagement workforce reduces offer on-site a proposition to Looking value costs labor compelling ahead, solution. that

of service profit permanent last XX%, revenue, organic represents process grew segment, we last provider XX% given its in attractive provider Revenue Turning acquired up our year, or our filling X%. combined managed through segment leader in and is PeopleScout positions global RPO the recruitment to UK-based XX% TMP, of was PeopleScout revenue and outsourcing the offerings. June excluding margin.

in have quickly ahead, not client XX and we With we in are will XXXX, momentarily. new about greater talent prospects us scope also discuss In but results proprietary in Affinix, Looking to service growing we our headwinds. further over our challenges, we’d spite walk headwinds some these Derrek our And growth like. continued the as of financial on brought detail. PeopleScout, recent acquisition new that, acquisition. XXXX, expect call differentiate logos logos I’ll near-term through as we specific TMP to do we been profitability technology, similar some as near-term have excited We leverage Derrek these as for the that through hand to the

Derrek Gafford

revenue right million you, with million. outlook $XXX to Total Patrick. was of Thank $XXX $XXX of in our million line

net peak of its share step-down. quarterly point the QX the $X.XX, X% in expectation was step-down of which or organic stepped points margin revenue by by tax strong $X.XX, decision year tax net adjusted effective produced last trend gross Amazon a per XX%, PeopleReady a decline growth to with per business less effective effective versus share business The of was by TMP Net a accounts rate. an in-source needs the of in experienced versus and quarter The our a in primarily third business performance in near for income contributed increased growth last high and business of comparison Canadian rate per the our down three end down. in of lower of PeopleManagement energy the from step-down rate. the rate. step income XXXX, revenue. point income PeopleScout acquired income from and a normal which additional for diluted the lower the with lastly, expectation, income customer income at lower $X.XX The a produced point step-down driven a to And seasonal period XX%. same disclosed $X.XX, the share their tax previously same was to Adjusted line quarter $X.XX last to due X% labor year. in expected, diluted As was

For was lower result XX%, Credits. income as of than Work tax our XX% a XXXX, our expectation Tax Opportunity fiscal rate effective higher

basis our income XX%. was our same EBITDA add-backs, of at and expect margin lower calculation Gross the margin million, adjusted XXXX. up primarily we workers’ was EBITDA SG&A expense of compensation divestitures, expense, rate XXth quarter about fourth business effective consecutive net from margin tax $XX by increase million expect addition in the was basis We operations. used $X and X%, forward, of representing of rate and about Adjusted remainder margin quarter do up improvement XXX gross higher acquisitions the $X Looking and income was million XX.X% the of points. this The for of with in from driven core to expansion. and PeopleScout. the impact down XX in an points, of was adjusted net lower related down the from payroll taxes

in business quarter, two energy our to creating Turning percentage X%. quarterly percentage in QX grew revenue QX one of peak point PeopleReady segments. The faced by experienced which in than headwind headwind is XXXX. points higher the XXXX, the a fourth

XX for on expect revenue margin QX accelerated X%. X% Amazon continues up XX%, trends their account. points. was down and to Amazon highs, of our makes we XX%, was consistent XX% which QX and and growth in the basis which staffing have revenue profit or, customer was workforces, XX% of points with were of PeopleManagement served. PlaneTechs in small to XX and an the this this after was to X% Segment down this geographies basis. quarter. up growth excluding organic divestiture, with profit margin the basis revenue business Now optimism business, QX with segment XXX anniversaried most was profit was which or QX year, providers Segment growth first profit was growth the includes X% acquisition accelerate account Small focused medium-sized market. the headwind that small standout profit One the Revenue US Segment we down June. coming percentage bodes is up segment the QX. in item, from versus largely X% XX%, down in industries of to in PeopleScout to points the divestiture up was and business. PlaneTechs in trend combined Growth TMP when up at slack record of the well in on X% amount in of due from and

of media these we’ve pass-through As recent in the TMP mentioned clients on of creates purchases and margin quarters, dilution. recruitment behalf costs nature certain

outstanding $XXX fourth flow million expenditures capital operations up million. to boosted quarter. segment $XXX TMP, free cash $XX a points. totaled and two from days cash day improvement XX Excluding operations Cash sales was was netting margin in were flow of million, flow basis Year-to-date from the by profit in

and returns continues representing sheet XX% X.X beginning beginning down to part XX-month ratio to cash at $XX of compared quarter Returning balance EBITDA trailing $XX year, one debt to total-capital million basis, is our total is year. of for an our compared of from X.X, capital at for stock totaled beginning to year. at in repurchased the million, at shareholder $XXX and multiple stands debt Our year boost free was third the flow improve. the a $XX the the of of repurchases Total the important the XX% million our strategy. the to debt-to-adjusted On the year. million of of is

a year-over-year QX these QX. see transparency, we is addition have headwinds for outlook to PeopleScout. pronounced demand an PeopleReady, To of consolidated also impact Let’s this trends. outlook. our The lowest are acceleration for quarter, turn a is outlooks but segment to combination in Since profit and on quarter our big and profitability expect picture expect to revenue headwinds providing in volume enhance our pricing for more we PeopleManagement

equivalent to As profit is a reminder, adjusted segment EBITDA.

for Now, the share outlook let me our quarter. in numbers consolidated the first

on $X.XX tax of We expect income effective to to to X%, and share to XX%. or $X.XX $X.XX rate $X.XX, which assumes net XX million a growth count and an of about share adjusted an income of of flat per be revenue expect basis,

million expect range, using talking a which, EBITDA on adjusted We the of to outlooks. of EBITDA $XX excluding this $X segment represents the $X TMP. I to about million, decline $XX by adjusted decline profit midpoint want or through provide million, some the color million of

in range and the but implication for PeopleScout, certain an should headwind million At the drop in going or is expect am segment million price midpoint be a precision of we this with to $X misconstrued client. not as excluding of to headwind each I volume speak the QX. TMP, $X of simplicity, a certainty. to For segment, tied profit of

was clients, being the project grew client project-based many this started business million hiring arrangement. is in a our from Also, with of reduced is this and that for multi-year in This a pricing account with exchange year we as and As is headwind rapidly. expecting the $X less after client case volume price a of there their acquired. lost have

expect of the beyond which We for QX these is headwind year. two total million for this $X clients, of million headwind year $XX about

in of first and a related business, headwind to in Amazon of movement year, customer segment between retail expect a volume, QX. surge the At headwind from to account split quarter do headwind expect experienced $X beyond clients the our QX we PeopleManagement, client expect Management we one hiring by million of additional $X and not SIMOS margin. business another Staff QX this our less last we but million in Lastly, which carries of from profit for our lower

for $X total Beyond year. is of the for QX, which we of additional year, expect headwind million million $X headwind an the

tailwind. we costs, of Moving and corporate to about expect million PeopleReady $X

We to growth first our of versus X% about quarter to QX X% on expect the outlook. details in accelerate earnings XXXX. revenue of release filed deck additional growth today in QX see for Please

there our the the Despite are near-term value business some the While segments in models challenges, are sound. of growth headwinds, XXXX. near-term planning propositions, for and business we strategies are

the perspective XX% Annual Let leader. expected PeopleScout for a well-recognized and a RPO little market on is future be me beyond the near-term. growth foreseeable our is of to share the

However, growth be can the of lumpy. timing

example, to in within three second X% For rallied revenue down grow of quarters. but the quarter was organic XXXX, XX%

know-how business. strong the we business continue right will have We and in our this of and further are growth differentiate the the record track investments Affinix believe this high-margin in right market,

offering PeopleManagement is for very a without model and traditional business, productivity-based offering. segment, a Our a delivery which through customers rate lowest-margin differentiates efficient our large outsourcing providing itself branches, bill

coming US our market small drive may model, on proven growth to a job increasingly conditions. under business of businesses, has which these require the part expansion mix it share While growth from is

also with variety and structure, small defined top leverage. particular various line a which the strategies focus, segment, powering deep the about with sales medium-sized including A robust optimistic strongest on-demand and focus and changes leadership This JobStack, and our growth, of trades, segment are the improvements skilled has in organizational businesses. has the itself. are flatter more of differentiate largest has We of acceleration a PeopleReady, a complexities right more and to knowledge on labor operating continues

to returning operator, remain see continues capital the sheet cash to now improve, capital call balance shareholder in committed With strong through a Lastly, we future. more to repurchase share that, that opportunity open flow to we and please boost returns. the With questions. for return

Operator

Suisse, Instructions]. Kevin [Operator with ahead. please Credit McVeigh go

line open. Your is

Kevin McVeigh

with, if your start year on reflect to downside, comments, wanted Wonder the some of as higher at just thoughts business seat upside, Hey, us first any kind you. Thank Patrick, could of and you congratulations. again, give the a Great. in thoughts you on kind level?

Patrick Beharelle

Thanks, Yes. appreciate question. Kevin. I the

Kevin McVeigh

Sure.

Patrick Beharelle

In of the and PeopleReady on is terms one in bullish of we’re JobStack. areas upside, most

one were We’re there some early now where in see out put we’ve creation multiple XX% in the had that in value filled the In digitally, we’ve we starting for that things up XX,XXX got to JobStack, quarter. of increases quarters positions get seeing is of XX% numbers We encouraged for that most of noticed And clients that are healthy signed we’ve that December, wallet working pretty by we’re share. on been with the our we over clients stages the JobStack. when using JobStack. QX,

post-JobStack In from increases in seeing position. a pre-JobStack fact, those double-digit position to clients we’re a

now. Long on very So, JobStack we’re really bullish right term, bullish PeopleScout. on we’re

we excited rolled position. happening in mentioned Affinix a that results prospects think we’ve that. talk clients remarks, We’ve pretty we’re that and and Derrek see technology out and When very high-growth we’ve As bullish out a are called with on. leadership high-margin with carved we’re about business Affinix, a his that the industry, got we

mostly concern, near of In term. it’s terms of in areas the

in a underlying at outlook pretty lumpiness terms perspective. clients headwinds. look our that EBITDA got that say mostly PeopleManagement, at the of and the with business, we’ve some wouldn’t revenue direction issues QX but and couple client-specific from got results in moving PeopleScout in and but and I a we’ve some are specific of are wrong for our headwinds. And QX we’ve they’re you look solid, If got you

with my and on that’s near term PeopleManagement of long So, and PeopleScout in area bullish very then PeopleScout. more is PeopleReady the and concern, term

Kevin McVeigh

we Is way of margin up that just then at The a terms more be fill process to to about could points Because, XX% And than type Patrick. of much how in the any of that? a Got leverage it. think accretion obviously, order that, way. think on certain terms fill, model? of historical there we electronically, about should expect associated following – to it’s fill efficient some in got with

Patrick Beharelle

Kevin, brick-and-mortar the would think pricing necessarily premium JobStack, is with of like long near clients retained, delivery structure we’re primarily focused clients, sort XX%. we specifically And That than when getting through more more term, I some XX% doesn’t through you term, answer road, down otherwise when going have But expansions, at it your north to model. digitally. and share out going more on we dependence premium-based than would clients is scope our reduce I the retaining or cost In gotten, a growth reduce. have our getting are fills otherwise XX% longer get yes. wallet earlier, the mentioned term of reduce of you on to starts revenue

I a cost of the so, more near-term the think and And on the more is side side. play play revenue longer-term on that’s

Kevin McVeigh

then, you clients some $XX prone help bit of client us total you And been seems just it from two if kind it time from more? of to to folks those there a PeopleScout. like And again, like was little it. about headwind have Can understand million heard you concentration. sounds in I time right, that Got

that these that? so to is to you And lumpiness, type the you’ll on of future, something of thoughts kind you any address try would? look maybe have in if Just don’t

Patrick Beharelle

comment there them, on of a on because each each different is I’ll story one. Yes,

things happen These time. time one, first an side just the from the on wrong of So we’re to acquisition.

an XX were this led multi-million to right hotel of ago, side dollar wrong we in-house In company an case, fact, The big a model. were side that the on the acquisition, it. In expansion. of a had we on months acquiring about chain

in-house decision go an Our model. PeopleScout, model client to a had and made outsourced to was an

acquisition was recently. the a wasn’t found we of just have situation it other that a and model It this case, company side one to side In where is And the sold in issue. performance a This an on the that client acquiring so the they being had. model we and about wrong wanted out was at work. throughout it lot of effect project-based was we throughout a right then that a project project-based was scope job still scope pricing end of significant And for the And originally expanded that a and XXXX, way. a was with in And that did a XXXX. small great in very we have deal client XXXX.

the it our client to agreed that of and to we both together don’t there partnership visibility to. have we So, us so multi-year that put don’t numbers a made reflect The any more include sense reality. project-based and work have pricing we’ve adjusted out that

what to It’s seeing some not was with it that is PeopleScout. in largest here work the XXXX. at a clients, did an project This our for as in of going this expectation So, client the adjustment, just by pricing still won’t that as XXXX. be repeat way one we’re we coupled of large is

Kevin McVeigh

That’s then, from impact helpful. the any Brexit? initial And kind of are you seeing

Patrick Beharelle

haven’t related Brexit. our seen up in numbers anything We to show

really. your So not answer question, to no,

Kevin McVeigh

Okay. Great. Thank you so much.

Patrick Beharelle

Thank you.

Operator

with Northcoast go ahead. please John Healy Research,

open. Your line is

John Healy

give Can Thank kind business, PeopleReady maybe the guys. about ask framework in bit to Wanted rate anything you, rates and some then in about Is performed in the a about bill of about you quarter on? market-driven? guys are the to and the on that that year, strong hours say it growth to how January business? X. of little it initiatives you context acceleration maybe you what if the maybe guys more drives the outlook there? of congrats three versus the working have in And Is a us confidence X% and

Derrek Gafford

thing. Sure It’s Derrek here. Hey, John.

first to the that us in rate. the gives question, in part of the outlook is PeopleReady is what at the already PeopleReady, really running underlying for So, regard the trend confidence

PeopleReady we QX a face bit shared energy hampered of business in at on you XXXX. in by peak the X% that that had we financials of with while So, a that grew today, our it’s the

So if X% headwind growing PeopleReady you out, at quarter. take for that was the

energy have so – XXXX, comp. we And there. as into the we primarily gives what don’t us turn confidence same the that That’s

really the scenes grew thing the fourth a up coming negative. we other quarter, of coming in confidence quarter the growth medium-sized X% customer in business. is about That If year two-thirds The not the from even small the the up customers. about coming which went from considerably to X% further back, It’s it It’s behind business, aspect, throughout large second that and to business that’s is which from growth. be would back from. building where predominantly been our would X% is third be at it makes quarter,

been it’s So, on nice a really trajectory.

So the widespread composition us gives the well. of nature as of the confidence it growth,

tough headwind. toward your our how weeks turned Going was into end to PeopleReady. some in January lower been question your here, last January three last part of weather out, have the The respect about of revenue range but had we’ve

get though confident that were growth of that at pretty when we rate passes, in same back weather we’re the fourth So, run quarter. the we’ll into that

John Healy

application. year I made you ask a think the revenue you million about of more just comment then about the branch year, year. benefits And thinking this JobStack wanted I it of like with earlier, not tailwinds But the just the if guys from network. that aspects of mentioned imply physical versus the point which that shifts that be that would maybe far around that me three mean, to off And XX% – to Great. I right the this getting Patrick’s I app, it’s know over about sounds to upside, the X.X the you’re to about million means would of of shifts last filled

might that just was next color hoping about guys thoughts, three could how give or some I you two So, the size, maybe branch transform over maybe physical footprint years?

Patrick Beharelle

that, for John. Thanks Yes.

transform, terms two to how going there’s it. it’s In of aspects to

that a spending those work bit good The in time match a doing first their type of JobStack dispatch were branches, group that folks prior is we’ve of to got activities. and

One of the more focused are we’re to revenue reorienting those doing on roles within we be that is the generation. branches things

the visiting reallocating prospects win going that been taking trying we’re trying to those type to more business, and so on out time scope, expand that’s branches, more service time spending and issue. and freed visiting to and time And more within going client clients out up their

of we have lot three these people. a in So branches, or four

So, to of three-fourths out a a person or it’s tough of person. cut half

reach those within is reoriented And though the some what what those plans there that’s out, their lower of of so consolidation higher There activities primarily come taken could we’ve revenue in on got are a making be them that right dispatch. branches. them being retrained, have in sure described focusing where activities I the of we’re the point generation. having initially, value-add roles and suggesting activities those focus will consolidation we just And to focus where compensation having has a that focus, – folks branches going and branches, there or down terms critical opposed that value-add we as on focused skills like I’m and just that initial that of down-the-road on a folks those match more is mass,

John Healy

allocation. helpful. question on capital Derek And for you. Got just That’s one then

you expect acquisitions to about be pretty think flow the to returning of would in years, any XX% last share of kind cash capital Without I to that your gone consistent has coming XX%, two free way, of sizable XXXX? the repurchases. shareholders

Derrek Gafford

take John. to a that continues got, want Yes. free we with If cash flow work. balance it that stronger we’ve put the we for the Thanks the to at question. to Hi, look and sheet, get

pointing to of history, And balance mentioned, really as and as much more acquisitions in our up want have you in versus our a strategies there. build to the toward organic growth we did of not lot here. with you’re more sheet not So, slack the going growth

free certain portion cash And quarter. So of a flow continuing to significant allocate well. to capacity the to then also on price in yes, the shareholders. want want back extent be to we active each we’re be We have a stock to some opportunistic planning as to

John Healy

guys. Thank you, Great.

Operator

Mark ahead. go Marcon with R.W. please Baird,

Your line is open.

Mark Marcon

the if It a giving. some and I more really just was the could make stats Good talk want dispatches to about sure interesting. little that I bit understand JobStack. sounded were you afternoon. of wondering you I

somebody actually is than shift? being filling actually how we – a you So, for full can a more a little bit dispatched dispatch should about talk actually a position

Patrick Beharelle

I earlier. answer with Thanks, and yes give of helpful quoted a And more is I that share on that to little color might be some then The story to the a it maybe stats question. Yes. think Mark. you

an you give I’ll So, example.

provider a need and in packers. client Massachusetts. a that’s pickers have warehouse They logistics We

call had so And so. a sales week or went over out next two need on going we’re we people said, and the they to

providers. And having so with we trouble they – some their existing were

how they showed And geolocate sort through went they and and nature sort could going and rate positions those stress filled how workers walked electronically them them of and those so this. improve time JobStack, we could and to two and of test they we we’re ahead and the XX/X said workers

business. XX to all the you of them to and filled filled used order going on did XX we’re give for our And an – day first going within send to the great going job other they XX, We’re tell, and you thereafter. we of XX we’re we those such shortly to a

thing, were particular next on people that this billing so you And at had client. we know, XX

So, business I take take JobStack. clients. with clients start then that’s and seeing thing with placing away when our now orders that way we’ve a in and a doing competitors it that right on up been quoted an sign was brick-and-mortar our not them on that uncommon we’re we existing manual statistic and from JobStack an they a earlier

JobStack. spike a been seeing volume within from them coming in they’ve first are since the signed up quarter, We on

more And hence, to more so filled that’s leading positions revenue. and business, more

to and is because capabilities areas us not are bullish a the what’s to would are confidence them about example hard of there across we have we a excited right have feeling statistically a JobStack difficult the pre post number But measure to have when to significant we we that new gives JobStack pretty digital won and acquisition. have. of related It’s now that JobStack anyway. client would clients, whether client JobStack, number are on very number be that won large lot An we measure. difficult know because some with some are would And that

Mark Marcon

that have That’s more say, willingly through JobStack your optimized, were about XXX then adopted and of branches? are great. as top fills percentage the in now And we what some think of more branches coming the

Patrick Beharelle

we XXX sort XX% XX% branches over and are of in now right are over in decile. that We

Mark Marcon

do? steps are take some optimize further. to to That’s great. are looking going And to things are that mentioned What you you’ve it you the

Patrick Beharelle

then is to functionality or gathering to different adding we to go because positions experience add which then on electronically. or that which people and required are have we that have couldn’t us certifications necessarily JobStack didn’t don’t, certifications them a One more couple all in been able specific we’ve adding some have we fields Well, positions years. information positions they previously know digitalize to workforce. be allows because fields match JobStack and some that if to we the so on And to our of for,

referral seen change. their putting clients to for workers, they some one easily that. pretty can we’ve capabilities to is good refer others for where been Everything that’s friends both the and place lift doing to piloting tool for colleagues, and in So been and where we’ve we’ve their

day putting more and just tool. the happens, functionality day every So that goes or into we’re that every out more

that and going numbers to We’re think the tool. we some through going will positions we’re put that to out of filled get X.X to be continue through that there XXXX, north we million

optionality you or a When us. lot got when perspective, of more positions jobs of are what just I of to on gives options side. in of start cost just north north the your that’s so when cost going that a a in that of of And do third for us that getting it you’ve XX%, get a happens, from of filled think in It’s lots XX%, subset terms digitally. XX% terms creates to being of hard the your we’re can do that XX%, positions. we number

Mark Marcon

businesses. about talk success And small can really a little mentioned seeing Great. then you’re with the – you you good bit

If just contracting? are headwinds medium-sized because large Is or that medium is non-small with and businesses you of the go just businesses. are an other there regards to the through the mentioned weighted math average, and that previously and that install implication

Derrek Gafford

Yes, It’s here. some other larger over customers, anything But similar the Mark. pace seen for And had. PeopleReady There’s with Derrek a significant standouts that slower with we Hi, we’ve necessarily. a to our we with with customers, out have energy not the of headwind that then segments we’ve any significant, on has slower business what do larger we’ve called like PeopleManagement pace. seen side. seen to

Mark Marcon

And talk SIMOS you Okay. that? clients the switched side, the from regular Why that just a over could little to bit on about that was PeopleManagement? over PeopleManagement

Patrick Beharelle

Yes.

space big the retail change is company this in leadership. a So, they a had and in

And margins There more for So, with in leadership, us business. and want control we the quite they the very lot responsibility a over labor SIMOS frankly, more model. more is business. us client change higher this a that that lot have with our was SIMOS large hey, control, in said, to came and to force for contingent

so we And have said, control. they want to more

a margin that model, is in more that risk. RFP a so staffing so put business. actually lower said RFP bit competed they ran want what a staffing sophisticated, out look, And model did carries which they just the won involves model is But SIMOS Staff we engineered-type traditional an onsite solution have to a And RFP and more more than an that traditional process. Management and and quite

significant that we’re And margin particular on client. haircut a pretty so taking

Mark Marcon

right. All

had So, ideas. in there different that new came was and just they leadership

Patrick Beharelle

Yes.

Mark Marcon

With your on Affinix PeopleScout clients of using it? are regard PeopleScout, percentage good. to sounds really What

Patrick Beharelle

started would XX using of And sort full-on pieces got Affinix. getting Affinix. as We’ve on got just XX clients clients we’re Affinix. describe Well, we that of today are that we’ve

process particular what minutes. in of client so excited and to the most time just fill days. between their converting client and all is, the fourth initial to positions sort Today, moving statistic quarter of by eight the take we’re the surface forward XX% an cut on and to particular Affinix. application. give eight used people has which seen the interesting process to I’ll to through way the the step. just them XX% The of was getting XX who the is application And the scratching Mark, this minutes example. in application Affinix on previous we in started you all, these application brought just terms significant that right takes been We this really on deal now here’s sold of a Affinix, about pretty we’re the And next actually and somewhere and

had rate drop-out less down they now. a that is Today, XX%. drop-out rate to XX%, than XX% of So,

So, through the clients XX% process. are getting of the over

streamlined like particular quality labor process all. for and application so this, what a lot the tight haven’t that And means more is a supply market we’ve in because that at client compromised

my time artificial and is opened about and reason in pool prepared using seeing rate we’re regs out are go collapsing of the as a intelligence example that a literally in how I is as in matter thing to an gave candidates recruiter’s the of scored in to inbox are other remarks The soon fill minutes. stack a have we

externally lot think going powerful is half really these at a the Award in sales deals of we in the looked it’s Award. I biggest they’ve some calls of lot awards think otherwise Hall TekTonic implication a is the And folks be for won. this, have And the win best with to long than prospects, tell tool would Brandon the and the and said to I we what so a I going And is tool. have what more seen. – we’re term, they is that back us won Affinix XXXX,

looking stake lot So, just at it’s some not people and wow are that sizzle, are tool this to wow, got there’s it saying, sort independently of factor it’s there. of

about So, the do we’re we’re going term. Affinix excited pretty started to is long is just there. headline what But getting

that of really We all haven’t we on to, get the clients tool. our seen going when we’re the near upside

Mark Marcon

Okay.

really Sounds good.

the page with of slide – to Just wondering, to regards deck. just clear XX I’m be Derrek,

to correctly, it mean, occurs a profit Just deck? in the if way interpret perspective biggest the slide headwinds I’m actually from Is interpreting right basically, the third I the that quarter.

Derrek Gafford

For PeopleScout or in total?

Mark Marcon

In total.

basically PeopleScout PeopleManagement together. So, putting and

Derrek Gafford

biggest. with the be It’s are. would where that – close we it’s yes, pretty Well,

hits million So, million on X.X X.X as million pointed PeopleManagement, a you add from you the together so quarter the that the peak in first million. from at three quarter, third X.X and out, two if numbers total up got yes, even then it PeopleScout, we

So, right. that’s

Mark Marcon

comparison just a perspective. Okay. purely from And that’s

the in side? peaked they of on those basically, basically the quarter clients third some lost PeopleScout So,

Derrek Gafford

That’s right.

Mark Marcon

Okay,

Derrek Gafford

clarify them lost. is that. one of Just Only to

The other client for very, is still very a large us.

Mark Marcon

all Thanks the the for for comments. it. Appreciate Got clarification. Thanks it.

Operator

reached will have session. back over question-and-answer I to the the of turn our Patrick. end call We now

Patrick Beharelle

appreciate to some to operator. results the listening anything add, to good I in on here I don’t everyone and looking taking QX. Thank time you. have forward in call

Operator

you conference This your today’s and concludes Thank may for participation you call. now disconnect.

TrueBlue (TBI) 8 Feb 192018 Q4 Earnings call transcript