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TrueBlue Reports 2010 Second Quarter Results

TrueBlue, Inc. (NYSE:TBI) today reported net income of $7.9 million or $0.18 per diluted share for the second quarter of 2010, compared to net income of $3.7 million or $0.09 per diluted share for the second quarter of 2009. Revenue for the quarter was $285 million, a 15 percent increase compared to revenue of $247 million for the second quarter of 2009.

Included in net income for the second quarter of 2010 was $1.3 million or $0.03 per diluted share of income tax benefit related to the favorable development of a prior period tax matter.

“We experienced strong revenue growth throughout the quarter,” said TrueBlue CEO Steve Cooper. “Our revenue growth combined with our continued ability to successfully manage costs resulted in substantial profit growth.”

Cooper continued, “We are seeing customers increase their use of temporary labor to improve the flexibility of their workforce. With our highly-trained sales force and strong service offering, we believe TrueBlue is well positioned to meet this growing need.”

TrueBlue closed a net of eight branches in the second quarter, resulting in 739 branches in operation at the end of the quarter.

For the third quarter of 2010, TrueBlue estimates revenue in the range of $295 million to $305 million and net income per diluted share for the quarter of $0.15 to $0.20.

Management will discuss second quarter 2010 results on a conference call at 2 p.m. (PT), today, Wednesday, July 21, 2010. The conference call can be accessed on TrueBlue’s web site: www.TrueBlueInc.com.

About TrueBlue

TrueBlue, Inc. is a leading provider of blue-collar staffing. In 2009, TrueBlue connected approximately 300,000 people to work through the following brands: Labor Ready, Spartan Staffing, CLP Resources, PlaneTechs, and Centerline, and served approximately 175,000 businesses in the services, retail, wholesale, manufacturing, transportation, and construction industries. TrueBlue, Inc. is headquartered in Tacoma, Wash. For more information, visit TrueBlue’s website at www.TrueBlueInc.com.

Forward-looking Statements

This news release contains forward-looking statements, such as statements about the ranges of revenues, gross margins and net income/(loss) anticipated for future periods, improvements in safety and workers’ compensation claims and costs, strategies for increasing revenue and net income, and other factors that may affect TrueBlue’s financial results and operations in the future. TrueBlue’s actual results are, however, subject to a number of risks, including without limitation the following: 1) national and global economic conditions, including the impact of changes in national and global credit markets and other changes on TrueBlue customers; 2) TrueBlue’s ability to continue to attract and retain customers and maintain profit margins in the face of new and existing competition; 3) new laws and regulations that could have a materially adverse effect on TrueBlue’s operations and financial results; 4) significant labor disturbances which could disrupt industries TrueBlue serves; 5) increased costs and collateral requirements in connection with TrueBlue’s insurance obligations, including workers’ compensation insurance; 6) the adequacy of TrueBlue’s financial reserves; 7) TrueBlue’s continuing ability to comply with financial covenants in its lines of credit and other financing agreements; 8) TrueBlue’s ability to attract and retain competent employees in key positions or to find temporary employees to fulfill the needs of our customers; 9) TrueBlue’s ability to successfully complete and integrate acquisitions that it may make from time to time; 10) TrueBlue’s ability to timely execute strategies for acquired companies; and 11) other risks described in TrueBlue’s filings with the Securities and Exchange Commission, including its most recent Form 10-K and Form 10-Q filings.

TRUEBLUE, INC.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
In Thousands, except per share data
(Unaudited)
     
 
Thirteen Weeks Ended Twenty-Six Weeks Ended
June 25, June 26, June 25, June 26,
2010 2009 2010 2009
 
Revenue from services $ 284,804 $ 247,011 $ 524,655 $ 471,425
Cost of services   208,974   174,181   387,700   335,924  
Gross profit 75,830 72,830 136,955 135,501
Selling, general and administrative expenses 61,269 63,383 122,484 131,694
Depreciation and amortization   3,919   4,280   8,014   8,425  
Income (loss) from operations 10,642 5,167 6,457 (4,618 )
Interest and other income, net   190   712   518   1,913  
Income (loss) before tax benefit 10,832 5,879 6,975 (2,705 )

Income tax expense (benefit)

  2,911   2,149   1,314   (1,132 )
Net income (loss) $ 7,921 $ 3,730 $ 5,661 $ (1,573 )
 
Net income (loss) per common share:
Basic $ 0.18 $ 0.09 $ 0.13 $ (0.04 )
Diluted $ 0.18 $ 0.09 $ 0.13 $ (0.04 )
 
Weighted average shares outstanding:
Basic 43,223 42,836 43,160 42,759
Diluted 43,502 42,921 43,439 42,759
 
 
TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
         
 
June 25, December 25,
2010 2009
Assets
Current assets:
Cash and cash equivalents $ 140,927 $ 124,377
Accounts receivable, net 115,822 105,246
Other current assets   17,194   18,440
Total current assets 273,943 248,063
Property and equipment, net 55,965 60,353
Restricted cash 114,464 124,012
Other assets, net   85,087   85,701
Total assets $ 529,459 $ 518,129
 
Liabilities and shareholders' equity
Current liabilities $ 87,007 $ 84,835
Long-term liabilities   148,261   147,862
Total liabilities 235,268 232,697
Shareholders' equity   294,191   285,432
Total liabilities and shareholders' equity $ 529,459 $ 518,129
 
 
TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
   
Twenty-Six Weeks Ended
June 25, June 26,
2010 2009
 
Cash flows from operating activities:
Net income (loss) $ 5,661 $ (1,573 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 8,014 8,425
Provision for doubtful accounts 4,328 6,444
Stock-based compensation 3,915 4,024
Deferred income taxes 2,782 3,561
Other operating activities 63 1,181
Changes in operating assets and liabilities:
Accounts receivable (14,904 ) (9,490 )
Income taxes (2,450 ) 7,610
Other assets 312 (1,143 )
Accounts payable and other accrued expenses (406 ) (4,793 )
Accrued wages and benefits 5,514 (985 )
Workers' compensation claims reserve (2,511 ) (5,406 )
Other liabilities   167     (134 )
Net cash provided by operating activities   10,485     7,721  
 
Cash flows from investing activities:
Capital expenditures (2,457 ) (7,329 )
Change in restricted cash 9,548 (3,026 )
Other   29     (71 )
Net cash provided by (used in) investing activities   7,120     (10,426 )
 
Cash flows from financing activities:
Net proceeds from sale of stock through options and employee benefit plans 536 529
Common stock repurchases for taxes upon vesting of restricted stock (1,360 ) (749 )
Payments on debt (186 ) (207 )
Other   61     (960 )
Net cash used in financing activities   (949 )   (1,387 )
 
Effect of exchange rates on cash   (106 )   (68 )
 
Net change in cash and cash equivalents 16,550 (4,160 )
 
CASH AND CASH EQUIVALENTS, beginning of period   124,377     108,102  
CASH AND CASH EQUIVALENTS, end of period $ 140,927   $ 103,942  
 
 
TRUEBLUE, INC.
Analysis of Revenue Growth / (Decline)
(Unaudited)
     
 
Thirteen Weeks Ended Twenty-Six Weeks Ended
June 25, June 26, June 25, June 26,
2010 2009 2010 2009
Major Revenue Trends
Organic revenue growth / (decline) 15.3 % (34.2 %) 11.3 % (32.9 %)
Acquisitions within last 12 months 0.0 % 0.8 % 0.0 % 0.8 %
Total revenue growth / (decline) 15.3 % (33.4 %) 11.3 % (32.1 %)
 
Organic Revenue Trends*
Same branch 17.1 % (27.4 %) 14.5 % (29.6 %)
Same branch excluding largest customer** 23.1 % (34.3 %) 13.3 % (33.1 %)
New branches 1.2 % 0.2 % 1.1 % 0.2 %
Closed branches (3.0 %) (8.2 %) (4.2 %) (6.7 %)
Currency 0.5 % (0.4 %) 0.5 % (0.6 %)
 
 

*Percentages for organic revenue components do not sum to total organic revenue growth / (decline) as same branch growth is determined off a revenue base of branches open for 12 or more months, whereas other organic revenue growth components are measured off a total revenue base.

 
**Excludes revenue from The Boeing Company and affiliates.
 
 
TRUEBLUE, INC.
Schedule of Year-Over-Year Same Branch Revenue Growth
(Unaudited)
   
January 2010 5.2%
February 2010 12.7%
March 2010 15.4%
Q-1 2010 11.5%
April 2010

18.3%

May 2010

22.9%

June 2010 11.9%
Q-2 2010 17.1%




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