TBI - Earnings call 4 2023

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Operator

Greetings and welcome to the TrueBlue Fourth Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.At this time, I want to remind everyone that today's call and slide presentation contain forward-looking statements, all of which are subject to risks and uncertainties, and management assumes no obligation to update or revise any forward-looking statements. These risks and uncertainties, some of which are described in today's press release and SEC filings, could cause actual results to differ materially from those in forward-looking statements.Management uses non-GAAP measures when presenting financial results.

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

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

Taryn Owen

welcome, today's and operator, you, everyone call. to Thank Chief Carl Schweihs. am joined Officer, our by I Financial We being operating and many be appreciate that of environment you challenging. our here with customers are in to economic continues us.The we, led and leading companies costs, choose full-time their teams positions to on selective more fill. from many to more they to be a for in Uncertainty focus internal reducing greater ask the to temporary down quarter XX% demand market to across staffing was reduced $XXX as in the million, impacting hiring year constraining resulted dynamics prior trends. These persisted, business compared and industry.Revenue the the uncertainty for economic spend

We teams are favorably and through market highly sales, growing are are opportunities service positioned current clients' and cycle with on managing focused meeting responding immediate on our discipline, clients' we excellent to this our and providing evolving to improve.Our ensuring and conditions needs needs. capitalize agility as

As current are companies short needs long-term flexible our make as clients expand. and offerings change commitments, and leveraging are their or needs workforce we hesitate to support to to ensure satisfy duration ready we

staffing reflect and demand, to renewable and high-growth in sectors opportunities trades.While in areas markets remains outlook energy end Additionally, we most targeted continue such with long-term seek as the positive. attractive skilled expansion softened

skilled to needs and of understand also see expand. well positioned dynamics retire, in customers, to continue We urgency structural We market Boomers are we our our understand current the fill the trades improvement as trends results. and shortages shortages the and Baby some the see staffing work of home in we from

our on our of to forward staffing structure efforts enhance and market capture contingent and future. digital you strategy dialogue inherent we our strengths to cost the business progress.As positioning is with are profitability.One about our managing committed components to compete XXXX, to are a of and in We a this core long-term our discipline transparency with maintaining we leveraging enter laser-focused share providing

a business, our technology our achieved efficiencies transformation reach advance and differentiated our recently presence continue expand our JobStack app. of address market new to road enhancements needs. us a digital positioning and significant new, through with allows to the milestone of implement and our drive map, version our expansive us evolving combines control the We of quickly launch with proprietary competitive the expertise.We initial to This user that experience platform

high-growth, priority proven on are already underpenetrated growth markets excited position year capitalize is the less technology position.Another as priority further this transformation the a success of strong our strategic in capture market and We digital cyclical continue of and our strategic have opportunities. of roll-out next secular We with to that in to to energy market. to opportunities end key a track renewable growth record work acceleration remains a over strengthen expansion our key

plan expand presence healthcare.An We higher healthcare also Within see trades, are like profitability a simplified enhanced offerings verticals product ways through explore organizational attractive into an to specialized placements RPO, diversifying other this in opportunity hospitality. focus and key such element in is our focusing end markets to efforts important towards more skilled of our structure. and skill we as and

management our more teams which focus will on With strides operations create and an we Canada, will efficiencies a excellence, opportunities where organization to business market to streamlining made brands, needs energized our to environment strengths and clients to under are bring insider today's our on in by and continues for in enabling growth.While to Board buying challenges, greater on-demand area sale costs compelling part and opportunities While operating creates our allows able associates, structure, in company current, our workforce quarter. strengths go of we cross-selling present leader. this assets the leverage will well-established continue we our plays profitable of the and deliver drive that to to the in is and the reduce innovation.We of we industry shares our the better evolution be labor long-term, broad business. focused This focus U.S. optimism operational on increased to with closer the and our evident during are long-term have already fourth our

focus our the strategic ahead, opportunities our market who advance experience to to over presence, will people results confident and our take now our return further us outlook. we work.Building financial mission it tremendous around will and committed and pass growth.I our clear and are are to have help we the details We our that with assets, share people, shareholder and and profitable growth will discipline value call Carl, the priorities execute will to our enhance capitalize on to connect tools, strengths on

Carl Schweihs

On you, down of energy revenue end performance the high due Thank our strong Taryn. and a at week XX in renewable basis, comparable was XX% to work. outlook

prior businesses, straight Strength cost in or and an more vertical XX restricting the of incremental of than greater XX%.Renewable revenue to period, uncertainty hiring economic included of to of revenue demand doubled, focus continues as market quarter this reported decline million on weigh in helped million a delivering work softness in versus growth. quarter driving the driving its week offset cutting on trends. sixth XXth Our overall revenue extra energy the quarter weeks $XXX year and adding $XX fiscal for fourth

inflation.We the on-demand basis was ask retaining fill, positions leading more the due the energy work, PeopleReady's tight the positioned increase with gross renewable versus our and align the this market executive net and teams $X in incremental While tax emphasizes be the of $X PeopleReady results versus on quarter favorable quarter credits. million we segments. of of year, in XX the million in mix lower are general which loss the week million revenue disciplined profit decline of to points. to additional positive $XX offset their On to able ensure due XX lower spread on in $X decline talent, which costs of decreased for the of the versus year. was last profit adjusted tax million quarter. to segment specifics to carries impact and cost margin partially quarter last SG&A travel of a reported with XX%, than market.Gross revenue more costs, declined between causing let's margin in the and for the $XX business job a EBITDA rate a overall These income income mix basis in resulting rebound.We revenue bill PeopleReady decline reduce $X an adding the pass-through revenue million the million. reported The benefit better from were they consecutive income margin our pay of million points. by $X margin comparable basis, costs transitions by selective XX.X% as down $XX net $X with pricing adjusted extra associated XXX million cost week X%, extra operational to our business, client Included week Adjusted driven while profitability. labor million balanced maintaining comparable well a unfavorable highest turn was enhance structure businesses for X% of We our of well contributing to XX% down to XX million more with to by as factors segment net revenue our quarter, expense, while basis demand a with to the remain XXth X% our its PeopleScout. pressures business, decreased managing year.Now, staffing week of leadership for our in our $X XXth were we of a are importance due to These strengths actions was and focused last demand, for decreased are are delivered

quarter, churn revenue revenue was in basis quarter X%.PeopleScout businesses as inflation, between workforce hiring bill well on remain fill, growing in to X%, and XX%, implementing elongated choose Clients segment On declined mentioned, relying bill and and XX%, revenue up jobs. pay XX and with being base in up in more their they the profit our $X general and industries.From most favorable As an decreased driven contraction employee rate offsetting volumes and as revenue adding hospitality verticals, extra These margin resources more level to volumes selective mix The to freezes largest needs, demand. processes.As partially have roles costs. XXX% retail, the the are was decline in by as internal environment. a outperformed operating profit market less adopting declined, their being disciplined hiring basis, of a XX%, businesses renewable perspective, around decline week while the which incremental to offset are renewable client more driven by heavily with includes lower continue energy revenue by in some demand week which lower work across of as margin a hiring service was leverage where partially million. to comparable navigate some uncertain points. the energy factors declined we've were largely with Client declined others XXX fill see up rates with and volumes pay rates pricing, spread another delivered increased from increased work, pass-through which segment this uncertain

macro The availability. million. both services, serve, and XX with X%, contraction such expanded margin evident $X well lower and to the profit XX commercial the last in to with in margin resulted and basis comparable We operating consistent due the Demand revenue actions a as as and XX%, we decreased revenue sheet. segment year week the lower driving retail turn million taken profit decline week points. transportation. $XX borrowing debt, segment on-site adding down year.PeopleManagement was the verticals $XX decreased declined.Now, declined in the was On revenue profit of let's as cost reserve PeopleScout's balance incremental in leverage as basis, no operating million decreased revenue by margin XX% While while driven conditions with the cash revenue extra this over of segment quarter revenue adjustment finished recorded the in leverage,

With effective the of $XXX X, we February recent facility to our year roughly renewal million. credit X increased our borrowing availability have

XXXX, our providing and support the expect position first decline quarter is flexibility liquidity future of strong sheet of excellent in balance shape, a we XX% revenue to for great Our growth XX%. to a opportunities.Turning outlook to

improvement the a in driven current continue as into reflects year QX, it's While are to expected prior conditions less comparison market quarter. this challenging comparable decline primarily by first an to the

expect roughly to expect that adjustments reserve points well are XXX cost in expected mix the structure due as more changes as we we repeat.While important work strength gross drive It workers' lean to our expected with energy margin not renewable creates basis in compensation is operating continued be revenue as lowest on the business We QX, with year to down will improved quarters. that leverage to prior revenue lower the year-over-year year. our impact decline QX in note quarter, move a other profitability through relative margins seasonally is pronounced to which

sensitive of effective where significant periods highly low movement. can Our in credits drive rate profitability tax is tax

rate I million We for statutory questions, income to expect open call million.Additional back shared today.Before job XX% tax for the our before to on of $X of closing a the job for presentation year our can Taryn in some to credits it we the information XX% to be over with found earnings turn $X outlook credits tax want on website remarks. tax

Taryn Owen

Carl. you, Thank

current I market we our up, to want deliver are and value. enhance reiterate preserve to wrap strengths taking while actions are long-term that we conditions decisive to Before challenging,

XXXX share capitalize well market to growth as positioning clear entering priorities, opportunities on capture improve. a strong strategic and sheet are with We us conditions balance and

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

Operator

Instructions] Capital Silber first Our Jeff BMO [Operator is with question from Markets.

Jeffrey Silber

your on the different a bit by revenue focus Is on little for your the to possible to side wanted outlook color it segments? get more I first quarter.

Carl Schweihs

The a PeopleManagement on minus decline to a XX%, prior slight is for around midpoint Thanks, was comparison. improvement QX here. from minus XX%. is The around XX%. tied and the Jeff, year midpoint PeopleScout question revenue for challenging less Yes. X%, is PeopleReady The really

January due the in think slightly with of line the were piece, As outlooks it's renewables quarter, we where our are. about for -- about expectations lower kind to but think trends

Jeffrey Silber

at I Okay. least it That's basis, great. is that be And segments none the assume reported will to but safe profitable understand the seasonality, is in a first on it's correct? that of quarter?

Carl Schweihs

think a about it. that's way Yes, good to

Jeffrey Silber

between it's business, in grown. now is margin the see gross renewable how business? great the other it mentioned businesses quantify you you this much roughly right large Can difference and is And to right. All your it's and what how

Carl Schweihs

Yes.

of in the kind for if there business the about our mix carries in lower fourth quarter, basis really So, points PeopleReady a prepared begin at pass-through gross we'll -- to business basis said that we -- I really remarks, look points our and on-demand due as margin but as XXX due XXX to normalize the renewable to mix to energy back QX, continue was we that unfavorable our look travel lap comparisons. year-over-year general costs.As about Jeff, renewable, will it's at for we more business,

costs of in margin is mind, high these as keep Just geographies vertical, carries to lower gross renewable projects. it pass-through many the of for due remote

us. large accounts, for it's you those If GM an pass-through business really is other costs, with attractive and really line exclude in

north million quarter, renewable. we're little $XX in about the a For of

Taryn Owen

Jeff, business, our expecting and And to seeing are year. could if as continue this add, success I move that renewable certainly, grow we we're Yes. we to double-digits through in significant

Jeffrey Silber

Sorry, little a you clarify, million, correct? just that north million, to $XX is said $XX of

Carl Schweihs

$XX yes. quarter, million the for

Operator

Our from Mark Marcon with is next Baird. question

Mark Marcon

Jeff, terms the in of well asked my questions as of a lot renewables.

component? what Just typically that bill pass-through the does sort rates just run? And is big of in terms how -- of the

Carl Schweihs

we Kind Well, don't comparable. it's of specific I as mentioned, share bill rates. just

large you remove business. costs, to pass-through comparable accounts, it's If our those PeopleReady

Mark Marcon

pass-through How what that Okay. the pass-through? So percentage is the big $XX million, is of component? of

Carl Schweihs

the to I numbers I of me. in you those don't have after get can that front back call.

Mark Marcon

anything down still to as be on think of then you out job stays relatively going -- stabilize?" as horizon that on in as see XX%. you do projecting the a you're pattern? And there's as going that say, PeopleScout, to would the we're this Do it's "Hey, lot Or Okay. long uncertainty low, probably there churn and long

Taryn Owen

they're Taryn. focused is our reducing Thanks questions. on in really and lower volumes. the Yes. customers space, they this have the costs, Mark, Certainly, for PeopleScout hiring

that internal fill is seeing we're they're relying their positions. what more on so And resources to

to cases, So customers, hiring while with we're have.One our themselves many the they lower were that to talent volume. are teams that help able they of remained our they're drive teams doing acquisition all this as definitely may as they we've solutions aren't many as some flexible they keep time where they them part their hiring not challenging the engaged have to or things in revenue those to utilize, be offering making hires busy. to that -- we're prepared handle customers internal with And during can as trying outsource of their function

So supplement offerings and to them X an service an of recruiter they example too, strategy in their capacity.Just that is and recruiter that on-demand acquisition actually and technology consulting their bring recruitment some needed to divisions, were on-demand customer into of company support terms to some helping providing split need their of a that teams that life, example that solution. talent develop we there's recruiting provide their they customer excess we our help that when

ultimately, of that to ] them they make the so their positioned increased that of our just provided PeopleScout RPO recruiter as to we're customers to solution do well a finery. things to that we close in provide some that consulting well offering we're example service able And stay when help [ current sure on-demand we're And and have needs, an to multi-year that them. as doing that award.So expand that meeting contract so, that's was resulted

Mark Marcon

Great.

it's you've of the they're they've what terminated it in last this side? even like And retain PeopleScout their the greater like complete Taryn, the it's relationship reducing like year, the get of take with the if so, majority did from vast I with work, of not -- on year not on that, to you clients of just percentage like January clarity January you clients,

Taryn Owen

Yes.

they're are It's really So which the customers. retaining we us. around our in volume utilizing

client much definitely a Some this retention side. hiring we're have not on volume and perhaps, but gone again, But alternative right as a help under challenge remain as with is to now. X, them their engaged solutions issue to we contract,

Mark Marcon

we PeopleReady, and terms hit, of And would think you with can about are about terms the give see how regards were any the Okay. areas retail then that differences some that anything -- if -- with would of regional to on us think or hardest just What you there? balance stabilization? you in horizon in of example, for you PeopleReady. the So the year of

Carl Schweihs

challenging Yes. of business. I reported. followed market we through we kind this particularly obviously, we've on PeopleReady year, say, similar most results of was seen in kind if us, of the back kind by services the has which as would look the for and quarter, end transportation, Retail, continued

state might we've as to about the also seen in well pretty trends. as asking overall You close the markets be January. in end Those look just what

Just business as [ Texas, of make those a kind our XX% biggest there of in geographic PeopleReady. up PeopleReady, Florida, just over California, opportunities ] reminder, our CTM in

Taryn Owen

add were trend just to the QX, we've entered PeopleReady And hospitality -- first has Yes. as has really construction quarter in continued that that, and and dominated to wins in here.

Operator

Brunemann from question next Our Will is Northcoast Research. with

Will Brunemann

I you more the environment bit Are competitive demand business you guys little the just changed changes any if wanted in PeopleScout And seeing at environment? could all? wondering, a for has provide -- color. the

Taryn Owen

regional there of continue to terms there. a players remained compete larger to app. the And good say Certainly, our competitive say, both consistent. pretty would at I as as certainly, as the firms. similarly, our we've JobStack we offer with of and PeopleReady of seen the our a advancements has well we in combination new other presence. our made I look market competitive that staffing launch wouldn't with And some have expansive compete technology we've business, landscape And change with environment, there businesses, we both In well small we our

Operator

Marc from Company. & with question next Sidoti is Our Riddick

Marc Riddick

-- that maybe outlook the this wondering could with a then given little of the sort follow-up And -- on register light that. that if I quick commentary? you morning, announcement shed So how after was how transaction a the might could or have I and

Taryn Owen

priorities. and cycle on that take Marc, back client that agility execution navigate been and addition we're this the delivery have you X challenging we what strategic now as we as we growth, on just we've But and at we're in a focused discipline If organization. for step thank asking question. about. that, look clear #X, talking an with to focused

and Canada part first The structure really that. ready our for to is on-demand of in organization is people simplify business the sale the of

digital finally, Secondly, the market and our at enterprise simplifying focus number advancing underpenetrated across structure, made into transformation the a high-growth our and our look we've then expanding of markets.If here. presence around we strides org

growth our on-demand really our on allowing U.S. sure of labor where and in capitals that some both -- opportunities. are is And an leader business to make Canada our kind and operations, highest financials are we focus human us we of on focusing our industry

addition really management we're have businesses.And that, on-site strides we really our the made in some synergistic In X working entire then us help the CMOs leverage organization. that together and between to we've businesses to other maximize under brought We single this assets finally, a opportunities of with those leadership some area. the to staff better technology hard across

in the is, just our example technology of support an scale we the started in So growth business renewables. that and seeing on-site to we we're utilizing that have that

opportunity. simplifying in and laser-focused where see just was sale long-term making So on remaining about sure Canadian the we're business areas of the organization really growth that we

Carl Schweihs

to to an QX, more perspective. deal the add TrueBlue said, to as on the in and from we share here outlook just close operations are going we'll Canadian immaterial And PeopleReady's Taryn operations Marc, then, what And our to forward. both

Marc Riddick

far of or given as on industry? -- the give is wondering year, if the the of views could and I Great. as acquisitions an cash [ of of sheet, table the you the prioritization ] on was LICA update the you if And not -- given balance or especially a as I use could us finished wondering was of whether bit state you the then potentially strength sort

Carl Schweihs

return In thanks. strategic investments, via capital economic ample to focused shareholders current excess Yes, our on balancing and we're the we'll making cycle, repurchases. share liquidity,

got $XX we've about enter also technology. in then targets say, kind reminder, I'd investments, not our current in our resilient authorizations. as And we're high end acquisitions, But but those strategic diversify and those as we in virtually under a talked capital pursuing of that million verticals. investments as growth Just still hiring -- are actively the now, Marc, can our market mix right interested we're help and all we

Operator

I to are Thank you. back hand no closing to There time. the comments. further would Owen this questions at Taryn floor for like

Taryn Owen

Great. work. to missions take entire the everyone, this events Thank to you, investor and speaking want I upcoming today. next and fulfilling to team next and -- for you you, at dedication look opportunity resilience us TrueBlue people quarterly forward joining thank our operator, for our connect to their and do our and on call. thank to with We

have you Thanks don't questions, If out. much, evening. and have so hesitate please reach to a great

TrueBlue (TBI) 21 Feb 242023 Q4 Earnings call transcript