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TrueBlue Reports Third Quarter 2010 Results

TrueBlue, Inc. (NYSE:TBI) today reported revenue for the third quarter ended Sept. 24, 2010 of $313 million, an increase of 10 percent from $285 million for the third quarter of 2009. Net income for the third quarter was $10.2 million or $0.23 per diluted share, an increase of 24 percent as compared to $8.2 million or $0.19 per diluted share for the third quarter of 2009.

“We are pleased to see double-digit revenue growth for the second straight quarter this year,” TrueBlue CEO Steve Cooper said. “We are also encouraged by the increased monthly rate of revenue growth we have experienced during the third quarter. Businesses are increasing their use of temporary staffing and we will continue to invest in our sales and customer service initiatives to capitalize on this growth opportunity.”

TrueBlue closed 13 branches, resulting in 726 branches in operation at the end of the quarter.

For the fourth 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 $0.07 to $0.12.

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 that reflect management’s current outlook for future periods, including statements regarding economic trends and future profitability. These forward-looking statements are based upon TrueBlue’s current expectations, and TrueBlue’s actual results may differ materially from those described or contemplated in the forward–looking statements. Factors that may cause TrueBlue’s actual results to differ materially from those contained in the forward-looking statements, include 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; and 10) 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 Thirty-Nine Weeks Ended
September 24, September 25, September 24, September 25,
2010 2009 2010 2009
 
Revenue from services $ 312,769 $ 284,843 $ 837,424 $ 756,268
Cost of services   228,181   202,220   615,882   538,144
Gross profit 84,588 82,623 221,542 218,124
Selling, general and administrative expenses 64,442 64,950 186,926 196,644
Depreciation and amortization   3,874   4,237   11,888   12,662
Income from operations 16,272 13,436 22,728 8,818
Interest and other income, net   144   240   663   2,153
Income before tax expense 16,416 13,676 23,391 10,971
Income tax expense   6,197   5,437   7,511   4,305
Net income $ 10,219 $ 8,239 $ 15,880 $ 6,666
 
Net income per common share:
Basic $ 0.24 $ 0.19 $ 0.37 $ 0.16
Diluted $ 0.23 $ 0.19 $ 0.37 $ 0.16
 
Weighted average shares outstanding:
Basic 43,269 42,906 43,196 42,808
Diluted 43,509 43,121 43,456 42,930
 
TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
         
 
September 24, December 25,
2010 2009
Assets
Current assets:
Cash and cash equivalents $ 138,981 $ 124,377
Accounts receivable, net 133,775 105,246
Other current assets   13,866   18,440
Total current assets 286,622 248,063
Property and equipment, net 55,534 60,353
Restricted cash 117,654 124,012
Other assets, net   85,093   85,701
Total assets $ 544,903 $ 518,129
 
Liabilities and shareholders' equity
Current liabilities $ 88,149 $ 84,835
Long-term liabilities   150,521   147,862
Total liabilities 238,670 232,697
Shareholders' equity   306,233   285,432
Total liabilities and shareholders' equity $ 544,903 $ 518,129
 
   
 
TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
 
Thirty-Nine Weeks Ended
September 24, September 25,
2010 2009
 
Cash flows from operating activities:

Net income
$ 15,880 $ 6,666
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 11,888 12,662
Provision for doubtful accounts 5,828 11,337
Stock-based compensation 5,412 5,597
Deferred income taxes 1,986 4,081
Other operating activities (141 ) 1,037
Changes in operating assets and liabilities:
Accounts receivable (34,357 ) (36,873 )
Income taxes 1,345 12,917
Other assets 253 (1,095 )
Accounts payable and other accrued expenses 1,489 (4,225 )
Accrued wages and benefits 4,560 1,803
Workers' compensation claims reserve 83 (9,094 )
Other liabilities   123     (152 )
Net cash provided by operating activities   14,349     4,661  
 
Cash flows from investing activities:
Capital expenditures (5,256 ) (10,540 )
Change in restricted cash 6,358 (5,860 )
Other   (297 )   85  
Net cash provided by (used in) investing activities   805     (16,315 )
 
Cash flows from financing activities:
Net proceeds from sale of stock through options and employee benefit plans 755 838
Common stock repurchases for taxes upon vesting of restricted stock (1,467 ) (820 )
Payments on debt (282 ) (304 )
Other   48     (996 )
Net cash used in financing activities   (946 )   (1,282 )
 
Effect of exchange rates on cash   396     356  
 
Net change in cash and cash equivalents 14,604 (12,580 )
 
CASH AND CASH EQUIVALENTS, beginning of period   124,377     108,102  
CASH AND CASH EQUIVALENTS, end of period $ 138,981   $ 95,522  
 
TRUEBLUE, INC.
Analysis of Revenue Growth / (Decline)
(Unaudited)
     
 
Thirteen Weeks Ended Thirty-Nine Weeks Ended
September 24, September 25, September 24, September 25,
2010 2009 2010 2009
Major Revenue Trends
Organic revenue growth / (decline) 9.8% (26.6%) 10.7% (31.9%)
Acquisitions within last 12 months 0.0% 0.0% 0.0% 1.8%
Total revenue growth / (decline) 9.8% (26.6%) 10.7% (30.1%)
 
Organic Revenue Trends*
Same branch 11.1% (18.8%) 13.2% (25.8%)
Same branch excluding largest customer** 22.6% (27.8%) 16.7% (31.5%)
New branches 1.1% 0.1% 1.1% 0.1%
Closed branches (2.2%) (9.1%) (3.4%) (7.4%)
Currency 0.2% (0.4%) 0.4% (0.5%)
 

* 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%
July 2010 9.3%
August 2010 10.3%
September 2010 13.1%
Q-3 2010 11.1%

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