TBI - Earnings call transcript Q4 2020

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Operator

Thank you for standing by, and welcome to the TrueBlue Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' remark, there will be question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Derrek Gafford. ahead. go Please

Derrek Gafford

and joined everyone, for today's joining Good our thank Chief I'm by Beharelle. Executive call. afternoon, you Officer, Patrick

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

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

Patrick Beharelle

Thank today's and Derrek, you, welcome, to everyone, call.

of quickly. a the the precipitously. revenue to year-over-year began decline impact I prepared as revenue April, a March reduced of back results, this I Management our to and by we our protect wanted reductions $XXX XXXX, recession In Many clients in. XXXX. clients. approximately take XX%. of employees, plan of on our April, and million the to or a reacted halted set to and XXXX, operations moment, workers care, we business client By exceeded. which SG&A level safety operational with difficult, COVID The for modified to were public cost implementing dive in they mind. with was country focus taken protocols capital. We long-term volumes quarterly demand our into XXXX across plans we Before In unveiled but the and on of compared and dropped temporarily moment actions had restrictions These us health, match jurisdictions have pre-existing reflect deployed and health to were reduce to right-size and lower helped preserve the

fully lost footprint fully benefits branch heavily as employees well-positioned the in and in improve, three so care For that To pandemic. paid to client we our are technologies for conditions scramble business of their of they we jobs, wouldn't kept the we're extended health have candidate-facing ensure coverage months provided the and midst investing new intact.

us sticking reward efforts to with our our our of Finally, one-time impact for are results. we this is in year, paying The a employees bonus. evident

Our the have revenue positive QX and been in posted improving fourth net income XXXX, quarters. quarter since third each we and trends

general selling, down full mitigate this by revenue XX%. the reduced we administrative and For To was year, expense decrease, XX%.

employee the largely reduction workforce for profitable morale quarter first quarter, an we charges incurred is in for we in second charge due engagement Of the high. were a net year. net impairment equal goodwill the and year, adjusted loss asset intangible and basis a income While the and to on importance,

higher the scores recent were most employee to September were Our than from prior engagement pandemic. they

profitability the growth restore our quarter and We right Now results. economy long-term to for the let's as the actions recover. Company position continues discuss fourth took to

sustained the XX% our XX% growth to down from in third we improving the to with addition versus of operations. quarter, income drive revenue trends in In discipline quarter cost fourth XX% year-over-year

staffing versus driver branch app. of supply during representing footprint segment, starting in skilled trades the segment, and relationships, of turn types as PeopleReady's in we fourth via our quarter, industrial multiyear, with multimillion-dollar XX% is revenue October. and our American of provider segment, revenue of largest let's XX-month our as of and PeopleReady in provides resilient down locations a PeopleManagement engagement. labor down compared up supplemental and more or QX, We XX% workforce down segment the an to versus XX% mobile XX% of on-demand when improvement on-site our second intra-quarter profit. North saw on-site improvement up engagements the The to was in driving December JobStack segment downturn clients with nature staffing client service physical trailing in X% revenue revenue industrial results PeopleManagement by North the well leading quarter returned is in typical these were trailing Now the PeopleManagement XX-month of essence PeopleReady December to XX% client outsourced X% growth X% PeopleManagement that a typical our PeopleReady. profit. in intra-quarter with the commercial of in XX% services October. representing revenue the a market. largest and down with American and the of staffing is national XX% industrial PeopleReady up engagement, and involves versus market. XX%

travel in to versus provider recruitment segment X% X% profit. service of Turning during third leisure global is XX% of particularly managed physicians quarter the results PeopleScout clients. outsourcing permanent XX-month XX% offerings. QX. process in to leader Revenue was trailing a represents and down through revenue filling down by were our and and PeopleScout PeopleScout large segment. exposure our impacted

Now, key PeopleReady. you with I'd strategies on update gears starting to our segment, and by shift like

are our have to at JobStack improve to long-term our the Most business share model of segment cost mom-and-pops market PeopleReady this in our or smaller, and that is deploy structure. scale something app. gain further Our strategy don't to the digitize efficiency capital competitors mobile our like of

in XXXX unique. JobStack, we now out began of us the digital XXXX, rate shifts app. launched in and of what footprint we fill filled is side XXX,XXX XX%. than makes We the rates XXXX, rolling more In client And fill using along have with We XX% via JobStack representing this of So associates. our the our clients nationwide a XX,XXX digital QX north app. to

at versus Our application the half. in results client we some In we quarter on-boarding QX XXXX. time cut up put work increased user to has introduced applicants. to count XX% versus led as of mid-XXXX, the to XX,XXX, ended associates great all operational new digital features ratio This

increase We worker XX%. approximately experience throughput continue to an of in

heavy PeopleReady. per We who focused moving on telling process. capabilities. competitors. an differential user and wallet is growth largely percentage supply-constrained back we client major whether have more reached This Heavy they revenue. driving share better exciting heavy or we year-over-year move on is the in same a heavy nonusers unique its JobStack is are throughput a user consistently on and with rating order, a to users posted December an peak translate expect growth The further is clients as JobStack's share to year-over-year worker the XX directly from point takeaways increased entering to now, users by to as approving it's fine-tune very us differential PeopleReady touches we will of due this growth customer a a user gross month, reason or This time. are growth. more are heavy Right client percentage driven XX to basis. environment, improve rates A toward JobStack has differential between compared rest over

in Our overall more heavy become growth material user focus results. our on is to beginning

for mix XXXX. doubled since in we For all of XXXX, the users, heavy business PeopleReady's from to XX% XXXX XX% up fiscal

our will the to is believe to stronger help in Of PeopleReady ready invest positive moment, emerge pandemic. we than overshadowed by course, approach prior strategic our the macro continue environment progress but the this to strategy and digital at

our PeopleReady We to As our approach. look different can go-to-market continues services. reduce our began strategy In of service tend our the at to we we XXXX few within technology altered XXXX, to and areas taking an expand testing testing more we're delivery utilization cost a to costs. include in a strategies further delivering where digital reduce mature,

I a this presence our value importance the underestimated. this front communities emphasize on time, down be move that we where to we more our of want do should our local As not services we reorient We an progress. improve see in update path, maintain to to branch network and the plans roles to same centralize job opportunity business. you to continue as and At client-focused do delivery. We'll need

Turning to PeopleManagement.

effort goods productivity sharpening in that e-commerce. strategy to in are at held grow to leverage to These verticals the decline on execution the already well Initiatives enhance manufacturers vertical client a Our also sales traditional relative include our to implemented our teams. focus of market made up concentrated target nonessential brick-and-mortar retailers. We've have base. and strength focus our and essential we've our is

integration to offer the our of to team completed SIMOS brand a of cost portfolio Staff and hourly and integrated clients. full sales we solutions per allowing unit Management the First, teams,

year-to-date Second, are Even the off. middle markets prior annualized secured initiatives in smaller this $XX the presence underserved. business we year paying wins prior in strategic new year. we are million business million $XX we PeopleManagement as in have already versus believe our of at new are expanding been versus of up These wins downturn, the XX%

our demand resources to momentum. we'll care and maintain environment sales the recovers, in client increasing investing be As programs

growth. to capture strong opportunities Turning to PeopleScout. for in The an our strategy poised reputation industry leverages brand

we we, with competitors our recovers. teams as in-sourcing, towards during of with back bringing in-house. in-house a towards or reduced the struck, along eliminated pandemic, more outsourcing and Many more experienced trend COVID some been functions recruitment Before reversal trend the clients the economy a expect have

Focusing on wallet take clients at capital priorities. the like our us existing on our industry moment I’d share touch diversify to this to portfolio. to within allocation allow mix our trend increase sales a our and teams will

of outstanding, favorable During our $XX stock, repurchased of the common X% of common stock half XXXX, prices. or first our million we at

lean clients. to the results. to resolve I’ll us and While the while connecting share easy and will and associates, by the greater together well-positioned a over TrueBlue the for a year, suppliers midst longevity our of around people in strategy in business vital an not proud employees, our actions was our even we the staying financial the continued we and entire retaining leadership XXXX. preserve to took call our operational to cost communities digital of right detail have demonstrated Thank I of structure who mission the By to pandemic. Investments Derrek pass team. coming service now all work, to strengths. our our true extremely and provide our you have of am XXXX

Derrek Gafford

income Thank adjusted and share, $X.XX Total net you, of posted representing per was $XXX or decline net million, of of $X.XX $X income We XX%. Patrick. million, per or XXXX for a revenue QX share. million, $XX

in management. XXXX or revenue and was year-over-year XXXX as from and of This basis QX net declined and the increase this the to X% further EBITDA as improvement revenue QX compared While margin operations QX was adjusted EBITDA million, part up due a down was income points. quarter Adjusted down $XX due XX year-over-year profitability SG&A XX% income basis tax margin XX was nearly quarter. percentage The of trends to operating twice was QX disciplined an down our for revenue decline than XX.X% decline effective much cost in points. was Gross XXX in income up the year-over-year large rate, to decline QX revenue was better compared X% higher to XX%. points increase

another bill from of points volume. had than pay lower Our and a of which PeopleReady the business, largely which and staffing revenue to PeopleManagement due our rates than from rates, in client revenue increasing business, sales our XXX XX businesses compression decline. growth gross faster contributed contributed a has to margin mix lower basis points PeopleScout primarily compression due basis mix

onset We we in margin expect quarter as the QX. in it expect but of to the pandemic first the of additional XXXX, moderate gross pressure anniversary

the bill a back our gross growth expect due economic strong back revenue we in Assuming of PeopleScout in half to our staffing with labor extent, cost its leverage in slack from a operating favorable margin margin experience and and with bounce in some sales, associated business growth businesses less in expansion of XXXX, the we pay gross rates assuming spreads lesser to associated supply. expansion the

another operational preserving discipline quarter is to with for delivered well-positioned SG&A $XX economic down to our conditions growth business cost or we expense, as XX%. We our improve. results expense million, strong strengths ensure while maintained of the Turning

PeopleReady centralizing geographic our further We our see repurposing costs while footprint the strength to also and a maintaining job opportunity reduce of the branch work use greater activities through roles. of of network, technology,

will lead will that the XXXX, and if We pilots additional efficiencies the early of XXXX. to planning are occur in stages successful, throughout in

are Patrick as their past and employees adjusted for This COVID mentioned, our this bonus, we adjusted well rewarding year. from extraordinary one-time government efforts subsidies, As EBITDA. as a bonus are income with COVID net excluded

was included to Our benefit in carry which in with effective loss QX. back QX, available operating associated years, XX% stronger tax performance prior net a to rate income additional less due expense to

the rate Excluding income effective was net loss X%. operating adjustment, the

Turning down to our XX%. saw in PeopleReady, was revenue XX% largest profit our an segment and segments, segment, decline

segment with As revenue the to X%, address PeopleManagement profit were and segment cost unique was QX management PeopleManagement in decline and last enacted to in up December December continued profit the growth steady saw creating in not this held X%. relatively additional a year threat, social with and into October. improve mandates was up much, this year-over-year government and trend experienced QX year. costs our to into in but half XXX%. attributable January half revenue XX%. from X% improvement, down where COVID-XX is compared encouraging revenue growth did and PeopleManagement About growth X% in comparison of revenue up favorable January Revenue intra-quarter growth continued has

XX% revenue points percentage segment project in down of revenue and benefit. provided decline profit PeopleScout, XX%. we saw six to Temporary Turning was work a

exposure As mix, of revenue XX% this made leisure which impacted prior noted, roughly the results PeopleScout was year by Patrick were adversely and travel down to and up XX%. vertical clients, for

balance Now flows. let’s turn sheet cash the to and

operations and year, perspective was largely Our Cash half comparison for in in year. receivable. last XX We QX in Outstanding outstanding year finished $XXX from from also down excellent a Days of accounts deleveraging in credit cash, capital with strong three an at XXXX coming the days us million no million prior increase a Sales the unused million, facility. with days, with from balance the It sheet shape. and flow $XX up is debt, the in was a or quarter from with working $XX

few information in providing own the found take I’d their a today. minutes earnings to investors forward-looking to Now discuss more and certain form information be This to like help we quarterly are estimates. filed presentation can

For the contraction of full for basis and to XXXX, we quarter margin basis to XX gross of XXX the XXX of points expect year contraction XX first points.

net in QX margin was and income benefits reminder, from adjusted there XXX gross a points As XXXX, that care from basis EBITDA. expansion health of were excluded adjusted

I from workforce of excluded XXXX, health less were year reduction adjusted the income XX costs full the basis EBITDA. was For and there net from that points net benefit benefit care mentioned, adjusted

non-GAAP You information can find more on these items our reconciliations. in

SG&A $XX XXXX. first the expect to quarter reduction a that also I’d of reduction For year-over-year of everyone actions most $XX April will cost anniversary to our million. of in of we XXXX, like we remind

first we year $X for our build expected the cash in our For reflected include expect and in million figures full be first reimbursements XXXX, The be million capital with to for million landlord from $XX quarter. Chicago quarter expenditures, respectively, our landlord out $XX which million million and approximately for the about operating center, in will These XXXX. by and the of $X costs $X $XX $XX for flows. will million support of reimbursed reimbursements QX

diluted semi-fixed fully rate the the weighted for opportunity the effective XXXX due million. an work outlook average annual is quarter tax outstanding outlook credit. XX.X first shares Our of nature to tax Providing for is income an of difficult for

full job is pre-tax expect of XX%, the lower credits, to Due possible to of rate an job $XX expense year job for be profitability. rate tax total income effective of to the instead have credits, about expected income be it size levels million. at XX to tax tax to benefit and income effective to we credits our expect We XXXX, $X tax before and

we where to COVID hit, work back do we to like before were made. get have more While progress we have to the we

we the is operational have the hard concludes where done and end improve about revenue balance the for started have prospect us. took opportunities actions advantage serve. which we And, than vaccinations markets enable XXXX will to potential This of improvements in with we meaningful our take of on hit without now steady so are our in strengths further We profitability, optimistic the We our the seen ability trends, horizon, of ended upside the losing our call the open and right prepared remarks. growth of the that or we technology sheet to Please stronger questions. a with momentum. year, ahead many

Operator

Markets. [Operator line Instructions] BMO with question first Capital We Silber Jeff have our the coming from of

is Your line open.

Jeff Silber

you revenue relatively in seeing than I trends you've have segment. detail areas lockdowns of You in markets, Can And the of in about you're strength know, sort type? have where comments of talk Thanks. of guys weeks terms don't terms where customer provided there? any more seen some if if just lot impact the of increased, of terms by end we geographically an a

Derrek Gafford

Derrek. Hi, on Jeff, here. out help this you I'll is this question

talk about let's both transportation, you where improvement manufacturing, talked areas those So retail. market an about, strength a that is of from where that seen we've challenges lot we're and and where we're of end seeing areas in services perspective seeing

perspective still those of we just challenge, compare were still where you mid-single digit, were decline we're markets improved. I was to mentioned. improvement that areas the of an Where for I where widespread forward improvements though the state opportunity in From XX%, making to or ,are geography overall high not energy across points in the our If remained of that was in improvement XX% X industrial whereas put our the X To digits, the which if Hospitality just and from has of running relative two was down what makes where the that. to this actually X of mentioned for others. compared majority vast that size, overall. around couple -- has hospitality. to I includes of the have And mix, biggest rate geographic to third one It's it but the the surprisingly, mid-XXs, amount of is up quarters, up we from would we for One, an challenge the retail back of in give Company operate. up way you our somewhere or relatively has the state, some most or last Construction XX% improvement the we California. which the mix. end times relative down California that practice, decline we that, pick us but QX, a our end about. that's All rate decline due down of looking in is perspectives. geographic other state quarter. of in some were biggest of be we it's for it more another that high elevated reflects, saw around talking perspective, have to times really, still the is trend markets been than down California we the areas That mentioned even about mid-single business XX% of XX% down in was of sizable were

of some our market big business, is us. it's certainly, construction also and related the impacting of to So in decline California many our for construction, in protocols the lockdown, it a

provides color some that help. hopefully, So

Jeff Silber

great. was really that that, Yes, appreciate I Derrek.

wondering, color Thanks. what for of specific quarter. something the the kind you terms I revenue like know get guidance, that some the but we quarter, if can us to not I quarter? gave was guidance, In of use last was first for you're giving fourth

Derrek Gafford

Sure. well, back let saw into Well, me what January, up. going we

in up the Meaning, bit, improvement quarter, saw were saw at in the improvement into nice fourth Coming monthly rate quarter-to-quarter, stall down the XX%. in You've things units. we PeopleReady. seen was nice quarter, from We ended of unit we we an most from XX%. that decline. least a third of where our The business perspective down the a improvement a

virtually. that take PeopleScout, like surprise unit. COVID us And done one When business you not a rose was so this in that most claims as has of to

of PeopleManagement. These the and space big logistics predominantly operations warehousing in You take manufacturing all much food. really retail are the

the And there's customers, contact person-to-person that's We it big cases saw to with similar improvement So very when us. was It's now. not those of little the spike to case a COVID operations this quite although or have the saw in very trend not as spiked PeopleReady. customers with face-to-face summertime, rate diminished them nearly as concern sophisticated We some. keep the running. whereas not

so, as saw January well. that And we into going

where a from see, bit at largely perspective, the not was was January. And December So materials, the which we December PeopleScout about in continue if people we management, for doesn't tad holiday into quite growth PeopleManagement you by at in look in much helped had run PeopleReady, into December. off our as then when a as season, we December our you than can because we're getting left where decline peak on rate worse it trending

quarter. all, fall March. some in So half a anniversary the you all mind keep that Also get in of color of off going as back into that bit gives we first to start the the we'll to

revenue March, So for us weeks declines range of company. two were running a in as the high the XX% last

small tuck for So use, you another away can see. that's as you detail

Jeff Silber

seasonally, That's really typically quick one is that helpful. your month follow-up. is weakest And correct? January just

Derrek Gafford

into the a costs. seasonal to you is category And also makes from also logistics That's which as that month the weakest right. profitability well, seasonally. perspective, January quite could sensitive our QX put fixed line

Jeff Silber

I'll into the just Okay, all queue. back so Thanks right. much. hop

Patrick Beharelle

what into their Jeff, is the long described clients on and we're or bit in of you add for Yes, to And of from just term, we're our strong And their we very term are clients except of to have chain online reset big and the nuggets little into of I and good wanted use, will first to the that Patrick. year. having they lumpiness were on term. then, manufacturer in talking the that same companies do on not kind events home food losers the COVID COVID a are are or continue. as manufacturing what tailwind been best those our for question those hearing in hospitality the travel, a the hearing probably throughout course, and the opposite first travel, bit with in headwind start a that to of fitness is, winners I back ease be about retailers, And end and easing there's near that this from half And but then in year, of the think whole hospitality look just going this when optimism signaling off volumes this our some of half markets our the supply and question next hopefully, QX, some clients, year. into off? more year will we continued as events and they're kind your question, headwinds wondering that degree end into to is color but QX firms

Operator

next Suisse. is the Credit question coming of line Our McVeigh Kevin from with

open. is line Your

Kevin McVeigh

clarify, PeopleScout just leisure revenue? you Derrek, to want did XX% travel of what say I was

Derrek Gafford

it what XX% mix know, yes, you and business year there. take a ago, where about there, the PeopleScout, decline quarter for and leisure we're we Yes, four at take, it's, travel we if of seeing that's was and XX% right. XX%, About the a

So do say, the math some you PeopleScout could revenue to those is of for points approximately decline percentage XX and industries. related

Kevin McVeigh

But particularly you any if footprint? hospitality, you branch was progress perspective? confirm kind made a like it of X%, I X% you to it how was seems the And -- thing, as one my I from a given Got but maybe technological just it longer obviously, was sounds It updates branch quarter, that like that because maybe are total is, the thought note of still lot need it term, was it you're capacity that. was last to revenue had capacity. about thinking want overall, maybe I success or -- of from folks I then seeing on some have wonder visibility.

Derrek Gafford

really you we've come of most operations. are our capacity Well, employees, doubt. know, That's, out no Yes. of our managed tightly and employees XXXX, our in costs through our most from as

XXX that talking when talking even we're capacity some locations fourth cost I'm But with quarter, we're capacity fourth more support our our we've in quarter. in out so the tight. the in about the units. and in that field ran the here about directly ended reductions add in talking our on-site we across are branches with business fourth that locations, people did We about quarter And our or serving the customers. employees

to we've added take think a all and opportunity lot the increased of across of still the look there. So some capacity the have medium we When our efficiency we we productivity a of operations. term,

at we've Patrick got sizable to, alluded PeopleReady, a As still very branch footprint.

the reducing for branch our so but And opportunity not the footprint, is us footprint. geographic

keeping employees So doing processing, repurposing activities that servicing branches, some operational our branches, some process roles, means dropping customers. some centralization were but larger in of job and in key still those engaged those heavily selling that in branches

the us those going operating innovation keep that to it help And those customers. more as think things. that to continue proprietary We're very true And But we so, tracking are differentiate comes need are spend what That's money to a little think those CRM, efficiencies to it to also on like will don't systems ones. to pay opportunities but Those lot which bit stay underneath there and systems, We well the move our also differentiator basic things. processes, get to when provide technology. standardized more some trying more today are processing some important have of to that's in a bill operational comes are our systems, there call productivity. technology. cloud, applicant help as that, to biggest from and then investing in JobStack We going when I'll systems, candidates things technology.

spending go-to-market strategy. it maintain by a virtual IT more those we're operations time takes reduce our with increase of capital time so all can more in our and to and helping then so, some same And that spend doing of we really those differentiated the at of technology, proportion the of productive there, human of branch reduce the become type some on

Kevin McVeigh

one the then quick get I'll queue. in And just back more and

any Just thoughts for to is any there's the as thoughts normal to of or a as if that? then that right, thoughts, that QX? and is I in at what's Is timing kind thoughts Any minimum to worse, ever getting of you've it bit was driven, wage versus Or driving pressure. of it any in seems XXX From a the gotten that? XXX And around like that start XXX little QX. pay little quarter just you bit rates? just bill

Derrek Gafford

try here. QX to the we've rate particular, to to guidance you about on given pay we've Of points. midpoint look surface which we spread, Yes, in I'll we'll I'm off things basis guided XXX of XXXX. go talk the in talk decline let's simplify a and that that about bill forward as of then the about -- is Well, then sizable going QX, it, that's to pretty

like of basis looks adjustments points that care this keep benefit mind of benefit it but getting XXX So, that health from we reserve year, lowered in costs QX some we to due had worse, it's from prior in year.

that's take actually points So had basis that, down to than which XXX overall. what basis compression, to less XXX excluded going at points you is of if I in we QX here

spreads. on the from progress. XXX What's pricing, the at just sometimes XXXX making safety are somewhat unemployment there that that's had we from got come take all more probably in other it of rates XXX to seen basis points, recessions somewhat that lower down back You points. rates went because that's lot, going work. than is have versus that's way unemployment up lower though and attractive than recession, stand even it hey, concerns, pay So negative all bill we pay about because there, at Largely, we're of a rates say, benefits what's pay If we've from basis to? a so

so place, substitute. in more got that have home dynamics to kids, them it those got takes you've to and away you've with money people know entice at you So, a

well rate pricing better PeopleScout higher driving mix All kind is you and XX XXX what of points to bit our a falls XXX another basis so. things our the mix, of gross way points of basically, compression is business into piece margin in are But in overall stand largely faring less and PeopleReady of those basis at and lowest of if to That got businesses to little at you XXXX that margin saw the pay PeopleManagement, higher gross XXXX, all and inflation. we faring from back category.

think PeopleScout that's fundamental that it's or think of are or we So, term, PeopleReady that more pressures long a timing. anything we of at don't the or matter

as created what then back mix really are we with jobs which of back growth. XXX staffing comes swings the points more as recessions. that have basis to will power seen from think the emergences have industry, -- adjusts, back is more start XXX prior as And in basis on that labor pricing, and the pricing we other more economic So slack points to come in less we other supply

Operator

have coming of our next Research. We question from Healy line Northcoast John the with

is line Your open.

John Healy

but standpoint, pay big lot to We picture kind of kind federal and Derrek how demand repercussions for not standpoint. I about question. of spread wage, and mandated minimum and Patrick, your $XX rates guys as the curious, a that just just so a from see a wanted business, interpret much bill just ask in a in news you even the

see You catalyst. as a it

it headwind point. as at that I this pretty it's You feel theoretical like see a

with of You it. a could go lot ways

see about to are feeling So, guys that? initially you how curious

Patrick Beharelle

wage. a I'll a goes ahead to automation versus pool comes more is term, take an us if that on market-based Yes go being not, that and minimum we $XX, currents minimum ends to tailwind for $X, generates an There's tailwind John, labor business $XX this businesses, off-shoring, cross Patrick. one, at guide up, perspective and good of at some or when work up it the $XX cases that going $XX, when around this jobs and But From strategically, also got lot a an hour, you've revenue. our are wage individual cases at change business back $XX, look longer of people's to hour. start change well $XX increased business or as to starts cases a

to scenario wage? in behavior and tell And can't clients big we too will see That is would with and as it where a be I it's pool, minimum be market-based so, around how buyer imagine the a to all need labor then react tailwinds to automation. And over early bang a at big business multiple headwinds would this larger years. once. unknown phased off-shoring,

be here. some adjust, will it's take think right challenges. be time to early a what a crosscurrents to too So, there degree or but on I headwind There's it position to strong would tailwind for us

John Healy

just JobStack guys one and the picture then When of sense kind one well. you approximately. question other about big a Make as talked

maybe kind is guys use theoretically, for And tool? a ever application of you know, companies or use it about do I was a as there said a internally for next competitive Just think JobStack using how way, smaller as of I for you firms about thinking that of see the application almost maybe to that years potentially don't scenario provide where parties, over an either kind an third as kind you to five internal curious it separate so. of business, the was, to kind opposed opposed kind know tool? as or I'm become staffing of even you and to

Derrek Gafford

when you like monetize complete, business a had internally what heavy users is But, JobStack what to on XXXX, that. the continuing lot focused and say XXXX we've drive of discussions never to shifts best to JobStack. Well, look and model we're in we to way more at never

application I are we've by the taken We've the those and digitalizing some disproportionate from seen away clients earlier, of that also and in using takeaways nice capabilities my growth among mentioned on-boarding tool. around share friction of that increased process comments process. revenue As lot the wallet a some

significant think on less to digitizing That's branches out, our as well. going become the allows will parts on begin by we of And end, dependent so cost and to our taking dependency in is business, branches. what

it's focused that, out and costs open an our XXXX. we're XXXX branch more So in our of taking heavy And on perspective, driving users beyond networks line. and from

Operator

the Josh question & line coming next Our Company. with is from Vogel Sidoti of

is line open. open. Vogel, Josh your line Your is

may You ask your question.

Josh Vogel

Yes. Can you me? hear

Derrek Gafford

Yes, we can hear you, Josh.

Josh Vogel

Okay, question bit bit, technical guys doing question. way. that I a of in little off wanted having Hope well. a different Thanks build for taking was you I a little my but sorry. last are to there. issues

you think to or from that service have when leverage the like technology potential So you to. about do door the competitors. is smaller more exposure that to markets average speeds We not currently ability opens you JobStack to assume share of other this

want the M&A? maybe exposure could to there? you And economy, share the So about either extend markets you opportunity didn't gig of some think the especially thoughts [indiscernible] or some growing when if organically like where through around that into for we you may because

Derrek Gafford

board, Well, that point, people discussion. we're markets, we've on focused the it's we're timing have light under adjacent But evaluating and staffing getting is going to of open we're that going not making. not this on on now, been industrial ready business, drawing Josh. we're an right announcements adjacent item But market But any evaluating just new and is out sector. the make have but the clients within we're to know whether the in it, the that prepared to at clients terms we primarily that

Josh Vogel

Understood. headwind Also outside you in know the in your you And I could there. being floated in of business? Are be see still it and one Washington minimum proposals out still hearing that the tailwind tandem Do questions, you or to does of thing? in to think some of the a anything the wage. changing earlier increase early, guard potential of it's but

Patrick Beharelle

color shot Well, Derrek, a you some take I'll to why then at it. And add that? don't first

Derrek Gafford

on increasing in don't any tax eye coming There's this that. few we've from that's got got Clearly, really on to the work Well, talks a There's on. talk more there's for a things headwind about complications lot talked that there perspective, our right country that that. immigration, we or a being got I people about. being out there's see eye our have our immigration rate eye we've from us. a

lot that a I a taxes, think all good. We but on of that's topic. there's can have on debate pontificating going

have point, least take. administration, that's perspective, It's other topics. think you but my don't a from just this Patrick, concern at might variety at this I And coming thoughts. of Josh, immediate are early anything still so with of have there I although days, So my

Patrick Beharelle

build potential near of got being out I laborers the yes, investments lot stimulus trades folks some would and see with tailwind help our that. in infrastructure. of what's see clients A infrastructure our the that for Well, focused on a would talked the that curious about, to term, happen. very are business. of a I'm that lot that of general a We've to in going of Josh, skilled lot as some and are

infrastructure spend it be tailwind big could benefits a a So, I businesses. that for generally think there's us our if

Josh Vogel

Like guidance just the the of how potential we in think year potential a you about December, about whatever about there? lot but in anniversary QX, we think should It should achieve? sounds great. SG&A as when gave And thinking for SG&A, step-up know I revenue growth that leverage the with we through How April. model you progress, finishes may

Patrick Beharelle

our Right. I'll guidance. haven't talk general Well, about we in since given

all You've them April, anniversaried things but that not when of we called our impact some we out in took hit actions majority April, of the did.

reconciliations. that's some we charges mind, sizable Two an quarter, and takes workforce that won't in number in about a our keep excluded SG&A it's gives took of the repeating. in on. reduction to and be the focus are we Also place non-GAAP clear been second in we So the have important had biggest that

But customers cost our Josh, us sure we're care and will subsidies that. So continue been It's out. government we investments fundamentally be We've all those, thinking with There SG&A to make clients. called to keep continue like SG&A investments been. going overall we're benefits technology going have on and the that efficiency. we on balanced exclude approach to just really that, on what's about be focusing we to some should continue for if have increase just with our grow our good is to supporting way disciplined also talking and have your we the going as eye to that we're be going we're of taking had We're But SG&A, to in in this, there. best some revenue. lower we to about

a margin gross with get maybe some be it that help it good back And for really very going industry. that's with accretion as year perspective revenue leverage So economic same back us growth. to if things good And comes would that -- been in been demand economic in the would of traditionally can as we've growth strong we the we for It's growth the half strong, revenue had happens. from more. when good it unfold on our that with expect

Josh Vogel

one right. size nice just you, to timing pay out. of curious And see a just to that flow the more cash quick you're stuck one, you're and with that perspective, going about the from just rewarding All employees bonus the that

Patrick Beharelle

Yes.

million, the the that will So year and the XXXX. size occur bonus quarter $X.X of is overall in of first

Derrek Gafford

other had to just this add. thing one Patrick. is I Josh,

Just on the bonus.

Company. executive Just XX% those this going nonexecutives all. be the so everyone to bonus doesn't at in is bonus dollars of of will kind think some

So any really the rank not employees and payout. a kind file of for executive and this bonus is

Operator

next Baird. Marcon from question comes [Operator the Instructions] Your with line Mark of

Your line is open.

Mark Marcon

I was about if a wondering PeopleScout. you could bit more little talk

those have would PeopleScout, able to What like being And win them they call since things did competitive them RFPS. the things that been, see in a to earlier caused sense hold have things we open that what outsource? up, you have terms clients basically discussions we of us in think might as lead Can mentioned to direct in-house, give some for You how more hold in-house? for just discovered that position you outsourcing. the

Patrick Beharelle

Yes. Patrick. one. take that I'll it's Mark,

a a So nature it situation of wasn't XX% XX% XX% just where to clients going with from going what going to outsourced the our the XX% were situation we was or outsourced with and we that of outsourced. start had probably were of first, outsourced in-sourcing zero. And clients to they're to we It's helpful they saw it's outsourced XX% more some where clients. had and

bringing positions, higher some often these at where critical, happening mission level, fill handled the in-house. was driven more CEO positions and more basically, to to have type were were be the in-house So tended mission clients critical is what harder was it strategy of to our and scope

a was of clients, handful a you that clients, ones. So of was strategy. they large were I this don't lot with it but think the And want of to pretty

teams went most And of hiring the pandemic got hit. happens built, they because And severely teams. the diminished. got and And the blown they so teams those built soon was up as is, what then

similar variable. prospects they we in are fixed And talked same those of they so instances, clients. a type said, several sitting we've other that And strategy conversations the experienced with the that strategy, and against RPO thoughts. cost structure, working been highly had with also And providers rethinking the having with in of we're

higher to So percentages, starts up necessarily those pick client before, higher that percentages, expect coming the so directly hiring mix will the shift is not are to I'd same we percentage but that back at conversations. from were

at we is high In volume, ourselves, in we've presence. European strong strong we're America. with Asia And honest the large global just for in competing presence requires struggled that a terms in of significant significant been and more and RFPs, type where really nonprofessional skills very North U.K. deals,

deals over those additional enhanced global So, we've capabilities got so some Europe last as has we've we've acquisition TMP of more couple our well component them, of that global been to compete the to building out that as in years a types sold been deals think our for referenceability. ability have of more with and we our

in of we year, confidence chances forward. a does him. quarter we tremendous fourth leader a brought amount new the like And have So, at in in who our PeopleScout, Brannon last of Lacey, going

compete think in best we we the the with so, And can world.

Mark Marcon

some think in a should little light of of can flow? of those how those envision the basically historic getting if how back perspective? a just sometime conversations clients timing world that about talk margin year, we and telling you're the you profile this we they're bit levels? would the second from to then the having business And to And Great. particularly what with half you about, assume in you opens revenues up that And PeopleScout's

Patrick Beharelle

back Well, than can down XXXX, And a to what QX is in going QX. The I'm travel on us. of to expecting look their We're half we trends basically with there's soon improving about give high for non-hospitality, them a leisure a forecast right with then, talk those you the back, couple leisure and There year, this. visibility chime bounce have we of XX% big to were if nice the in unknown and in maybe are particularly at clients. level ones some lot numbers. QX But not the clients. want as Yes. non-travel from QX in degree, you PeopleScout Derrek, biggest you overall, now. when And to we of to

in vaccine color the there's if to So directional of little much on of effectiveness depends rollout sitting and add lifting that. the of of uncertainty and lot the you back a a maybe just the second half? half want the around just on restrictions, Derrek, in

Derrek Gafford

Yes.

big just from a about talk margin me So perspective, a let picture.

staffing, how aspect the you PeopleScout low the then it very We competitive a Both from comes least there, that compared are on on our a bullish strategic world margin well. market, perspective perspective, on really take this, the we're at very, And of business. positioning. serves the bullish to look when to as the business out still it when at

important, it's more you structure. One staffing even cost in so scale, as PeopleScout fixed have is, far why And things cost that people with dynamic a we one have as of the maybe of mostly it's our by sales our what the at people. kind that, I same business, mean that's of

we So that profile we of cut the the it when directly the that. the people comes the downturns margin number gross revenue offset can on doesn't and have. back -- come, from But yes,

some and across margin margins in there. So space as leverage meaning more the a big expansion SG&A comes from volume the back, part comes gross of

running lot a of challenged business. well. for We've of job Now, We've centralization. as done lot that We've it's of done been that lot a of repurposing utilizing roles. good a activities, we're recruiters. us activities skilled lower There's higher we're positions, so general happened that more that's positions to of in get a down to our processing paid lot repurposing ways more effectively

tall the talking just forward to very as PeopleScout, it's order will to XXXX. optimistic think across see that the that overall, we margin. if the end as good about business on rebound of very margin we're But by are that we us beyond about don't for very something something would that medium-term next year. mid-to look that and be I think feel I be -- possibilities high-teens So, a things segment getting back expansion we a for to start

Mark Marcon

across a look the year-over-year businesses December, we perspective, January then it take little the a -- from three just track And all at relative of trends bit. short-term Great. when to kind changed a

there little point logistics bit that strong in some to in that's mix January. on also than some was business to? is it going shift So, that a to COVID with Was else Anything regards Or due being you of the all particularly shift? worse could December?

Derrek Gafford

it's Well, the at much that how the But how last We we projections. those Mark, some summer. of to about hard Yes. juxtaposed in University PeopleReady. with look always and the We analysis is Washington projections is industry. around tell, us were and much correlation surprised We shift PeopleReady. not slowdown saw the

that this December, for was expected growth When X%. look is this month But was. X% PeopleManagement, than PeopleReady. it's so we And at a revenue yes, take at any January, we other In higher -- it January X%. or

that into good carry doesn't a But a with that very I same, forward and as it's the season, with some And PeopleScout, And holiday part the it's far little yes, so, peak-ish as revenue December of peak any online dollars. fundamental. was is bit January. about but ordering wouldn't the of lower call

it's lumpy by nature. So

month too concerned about be into I So PeopleScout. wouldn't one for looking

what that out shared where mentioned. that all January be, I've things That's given we overall, So came the things you. expected about with of just we to

been of to year the like think way business unique of units those not So different across the we along a don't three us. we on. it's take COVID. going think least anything we the of trend overall course the the sound. move across dynamics, seen pauses this have remain at that going there's as what And this, It's way parts XXXX. with particularly the I fundamentals seeing concerning each early than of to We've

Mark Marcon

very much. up more I'll you thank Great, offline. follow

Operator

answer This back to presenters. concludes the will session. our I and question call now the turn over

Patrick Beharelle

of thank the of quarterly with you rest you, and call. just a associates everyone. in all Thank forward earnings we great the efforts closing, And our operator. week, I Have their for in next our to look to And throughout pandemic. like speaking employees

Operator

call. today's concludes conference This

disconnect. may You now

TrueBlue (TBI) 4 Feb 212020 Q4 Earnings call transcript