TrueBlue, Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>TrueBlue, Inc. has filed its quarterly report (10-Q) for the period ending March 31, 2024.</b>

AI Summary

TrueBlue, Inc. (TBI) filed a Quarterly Report (10-Q) with the SEC on May 6, 2024. TrueBlue, Inc. filed a 10-Q report for the period ending March 31, 2024. The filing covers the first quarter of 2024. The company's fiscal year ends on December 29th. TrueBlue, Inc. was formerly known as Labor Ready Inc. The company is incorporated in Washington state.

Why It Matters

For investors and stakeholders tracking TrueBlue, Inc., this filing contains several important signals. This filing provides investors with an update on the company's financial performance and operational status for the first quarter of 2024. Understanding the details within this 10-Q is crucial for assessing TrueBlue's current financial health and future prospects in the labor services industry.

Risk Assessment

Risk Level: low — TrueBlue, Inc. shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain immediate, significant financial events or disclosures that would elevate the risk level.

Analyst Insight

Review the detailed financial statements and management's discussion and analysis within the 10-Q to understand TrueBlue's performance in Q1 2024.

Key Numbers

• 2024-03-31 — Reporting Period End Date (The 10-Q covers the period ending on this date.)
• 2024-05-06 — Filing Date (The date the 10-Q was filed with the SEC.)
• 12/29 — Fiscal Year End (TrueBlue, Inc.'s fiscal year concludes on this date annually.)

Key Players & Entities

• TrueBlue, Inc. (company) — Filer of the 10-Q report.
• Labor Ready Inc. (company) — Former name of TrueBlue, Inc.
• 2024-03-31 (date) — Reporting period end date for the 10-Q.
• 2024-05-06 (date) — Filing date of the 10-Q.
• Washington (location) — State of incorporation for TrueBlue, Inc.

FAQ

Risk Factors

• Disposal of LabourReady Temporary Services Ltd. [medium — operational]: The company disposed of LabourReady Temporary Services Ltd. on February 26, 2024, which may impact future financial results.

Industry Context

TrueBlue, Inc. operates in the services sector, specifically in help supply services (SIC code 7363), indicating its role in providing temporary and permanent staffing solutions.

Regulatory Implications

The filing is made under the Securities Exchange Act of 1934, requiring public companies to submit regular financial disclosures to the SEC.

What Investors Should Do

1. Analyze TrueBlue's revenue and profitability trends for Q1 2024.
2. Examine any disclosed changes in operational strategy or market conditions.
3. Assess the impact of the disposal of LabourReady Temporary Services Ltd. on the company's future performance.

Key Dates

• 2024-03-31: Quarterly Period End — Marks the end of the reporting period for the 10-Q filing.
• 2024-05-06: Filing Date — The date the 10-Q was officially submitted to the SEC.

Year-Over-Year Comparison

This is the initial 10-Q filing for the 2024 fiscal year, following the 2023 annual report.

Filing Documents

• tbi-20240331.htm (10-Q) — 773KB
• tbi10q033124ex101.htm (EX-10.1) — 110KB
• tbi10q033124ex102.htm (EX-10.2) — 58KB
• tbi10q033124ex103.htm (EX-10.3) — 113KB
• tbi10q033124ex106.htm (EX-10.6) — 36KB
• tbi10q033124ex107.htm (EX-10.7) — 42KB
• tbi10q033123ex311.htm (EX-31.1) — 9KB
• tbi10q033124ex312.htm (EX-31.2) — 10KB
• tbi10q033124ex321.htm (EX-32.1) — 6KB
• tbi-20240331_g1.jpg (GRAPHIC) — 11KB
• 0000768899-24-000085.txt (&nbsp;) — 5444KB
• tbi-20240331.xsd (EX-101.SCH) — 38KB
• tbi-20240331_cal.xml (EX-101.CAL) — 71KB
• tbi-20240331_def.xml (EX-101.DEF) — 133KB
• tbi-20240331_lab.xml (EX-101.LAB) — 509KB
• tbi-20240331_pre.xml (EX-101.PRE) — 321KB
• tbi-20240331_htm.xml (XML) — 622KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Consolidated financial statements (unaudited)

Item 1. Consolidated financial statements (unaudited) 3 Consolidated Balance Sheets 3 Consolidated Statements of Operations and Comprehensive Income (Loss) 4 Consolidated Statements of Cash Flows 5

Notes to consolidated financial statements

Notes to consolidated financial statements 6

Management's discussion and analysis of financial condition and results of operations

Item 2. Management's discussion and analysis of financial condition and results of operations 16

Quantitative and qualitative disclosures about market risk

Item 3. Quantitative and qualitative disclosures about market risk 25

Controls and procedures

Item 4. Controls and procedures 25

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal proceedings

Item 1. Legal proceedings 26

Risk factors

Item 1A. Risk factors 26

Unregistered sales of equity securities and use of proceeds

Item 2. Unregistered sales of equity securities and use of proceeds 26

Defaults upon senior securities

Item 3. Defaults upon senior securities 26

Mine safety disclosures

Item 4. Mine safety disclosures 26

Other information

Item 5. Other information 26

Index to exhibits

Item 6. Index to exhibits 27

Signatures

Signatures 28 Page - 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1. CONSOLIDATED FINANCIAL STATEMENTS TRUEBLUE, INC. CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands, except par value and share count data) March 31, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 36,184 $ 61,885 Accounts receivable, net of allowance of $ 1,195 and $ 2,005 244,184 252,538 Prepaid expenses and other current assets 24,979 28,894 Income tax receivable 10,056 11,676 Total current assets 315,403 354,993 Property and equipment, net 104,449 104,906 Restricted cash, cash equivalents and investments 187,969 192,985 Deferred income taxes, net 50,934 35,465 Goodwill 83,869 84,114 Intangible assets, net 8,995 10,525 Operating lease right-of-use assets, net 50,454 49,819 Workers' compensation claims receivable, net 51,998 53,841 Other assets, net 14,515 12,735 Total assets $ 868,586 $ 899,383 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and other accrued expenses $ 43,623 $ 56,401 Accrued wages and benefits 81,008 80,120 Income tax payable — 439 Current portion of workers' compensation claims reserve 41,303 44,866 Current operating lease liabilities 11,936 11,902 Other current liabilities 6,090 10,371 Total current liabilities 183,960 204,099 Workers' compensation claims reserve, less current portion 146,544 151,649 Long-term deferred compensation liabilities 37,086 35,205 Long-term operating lease liabilities 49,869 49,434 Other long-term liabilities 4,763 1,123 Total liabilities 422,222 441,510 Commitments and contingencies (Note 8) Shareholders' equity: Preferred stock, $ 0.131 par value, 20,000,000 shares authorized; No shares issued and outstanding — — Common stock, no par value, 100,000,000 shares authorized; 30,554,364 and 31,245,732 shares issued and outstanding 1 1 Accumulated other comprehensive loss ( 20,770 ) ( 20,712 ) Retained earnings 467,133 478,584 Total shareholders' equity 446,364 457,873 To

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Financial statement preparation The accompanying unaudited consolidated financial statements ("financial statements") of TrueBlue, Inc. (the "company," "TrueBlue," "we," "us," and "our") are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, certain information and footnote disclosures usually found in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The financial statements reflect all adjustments which, in the opinion of management, are necessary to fairly state the financial statements for the interim periods presented. We follow the same accounting policies for preparing both quarterly and annual financial statements. The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. These financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The results of operations for the thirteen weeks ended March 31, 2024 are not necessarily indicative of the results expected for the full fiscal year nor for any other fiscal period. Goodwill We evaluate goodwill and indefinite-lived intangible assets for impairment on an annual basis as of the first day of our fiscal second quarter, or whenever events or circumstances make it more likely than not that an impairment may have occurred. These events or circumstances could include a significant change in general economic conditions, deterioration in indus

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Further economic uncertainty impacting the contingent staffing industry and demand for our services, could give rise to an impairment. Future events and changing market conditions may impact management's assumptions used to estimate the reporting units' fair value. While the assumptions used for our interim impairment test reflect our current expectations and maximize the use of observable inputs, a lack of recovery or further deterioration in market conditions from current levels, a sustained trend of weaker than anticipated financial performance, a lack of recovery or further decline in our stock price from current levels, or an increase in the market-based weighted average cost of capital, among other factors, could significantly impact the results of our impairment analysis. Should any one of these events occur, we may need to record an impairment loss to goodwill for the amount by which the carrying value exceeds the reporting unit's fair value, not to exceed the total amount of goodwill. We will continue to closely monitor the operational performance of this reporting unit. Recently adopted accounting standards There were no new accounting standards adopted during the thirteen weeks ended March 31, 2024 that had a material impact on our financial statements. Recently issued accounting standards and disclosure rules not yet adopted Segments In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ," which requires disclosure of incremental segment information on an interim and annual basis, primarily regarding significant segment expenses and information used to assess segment performance. This ASU is effective for fiscal years beginning after December 15, 2023 (2024 for TrueBlue), and interim periods beginning after December 15, 2024 (Q1 2025 for TrueBlue). Re

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 3: FAIR VALUE MEASUREMENT Assets measured at fair value on a recurring basis Our assets measured at fair value on a recurring basis consisted of the following: March 31, 2024 (in thousands) Total fair value Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Cash and cash equivalents $ 36,184 $ 36,184 $ — $ — Restricted cash and cash equivalents 35,536 35,536 — — Cash, cash equivalents and restricted cash and cash equivalents (1) $ 71,720 $ 71,720 $ — $ — Municipal debt securities $ 28,981 $ — $ 28,981 $ — Corporate debt securities 72,439 — 72,439 — Agency mortgage-backed securities 12,523 — 12,523 — U.S. government and agency securities 956 — 956 — Restricted investments classified as held-to-maturity (2) $ 114,899 $ — $ 114,899 $ — December 31, 2023 (in thousands) Total fair value Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Cash and cash equivalents $ 61,885 $ 61,885 $ — $ — Restricted cash and cash equivalents 37,421 37,421 — — Cash, cash equivalents and restricted cash and cash equivalents (1) $ 99,306 $ 99,306 $ — $ — Municipal debt securities $ 31,804 $ — $ 31,804 $ — Corporate debt securities 74,912 — 74,912 — Agency mortgage-backed securities 13,235 — 13,235 — U.S. government and agency securities 962 — 962 — Restricted investments classified as held-to-maturity (2) $ 120,913 $ — $ 120,913 $ — (1) Cash, cash equivalents and restricted cash and cash equivalents include money market funds and deposits. (2) Refer to Note 4: Restricted Cash, Cash Equivalents and Investments for additional details on our held-to-maturity debt securities. NOTE 4: RESTRICTED CASH, CASH EQUIVALENTS AND INVESTMENTS The following is a summary of the carrying value of our restricted cash,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Held-to-maturity Restricted cash, cash equivalents and investments include collateral that has been provided or pledged to insurance carriers for workers' compensation and state workers' compensation programs. Our insurance carriers and certain state workers' compensation programs require us to collateralize a portion of our workers' compensation obligation. The collateral typically takes the form of cash and cash equivalents and highly rated investment grade securities, primarily in debt and asset-backed securities. The majority of our collateral obligations are held in a trust at the Bank of New York Mellon ("Trust"). The amortized cost and estimated fair value of our held-to-maturity investments held in Trust, aggregated by investment category as of March 31, 2024 and December 31, 2023, were as follows: March 31, 2024 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Fair value Municipal debt securities $ 29,359 $ — $ ( 378 ) $ 28,981 Corporate debt securities 74,318 107 ( 1,986 ) 72,439 Agency mortgage-backed securities 12,434 110 ( 21 ) 12,523 U.S. government and agency securities 998 — ( 42 ) 956 Total held-to-maturity investments $ 117,109 $ 217 $ ( 2,427 ) $ 114,899 December 31, 2023 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Fair value Municipal debt securities $ 32,042 $ 4 $ ( 242 ) $ 31,804 Corporate debt securities 76,578 333 ( 1,999 ) 74,912 Agency mortgage-backed securities 13,039 196 — 13,235 U.S. government and agency securities 1,000 — ( 38 ) 962 Total held-to-maturity investments $ 122,659 $ 533 $ ( 2,279 ) $ 120,913 The amortized cost and fair value by contractual maturity of our held-to-maturity investments are as follows: March 31, 2024 (in thousands) Amortized cost Fair value Due in one year or less $ 26,700 $ 26,204 Due after one year through five years 75,500 73,719 Due after five years through ten ye

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 5: SUPPLEMENTAL BALANCE SHEET INFORMATION Accounts receivable allowance for credit losses The activity related to the accounts receivable allowance for credit losses was as follows: Thirteen weeks ended (in thousands) March 31, 2024 March 26, 2023 Beginning balance $ 2,005 $ 3,212 Current period provision 370 1,382 Write-offs ( 1,179 ) ( 956 ) Foreign currency translation ( 1 ) ( 1 ) Ending balance $ 1,195 $ 3,637 Prepaid expenses and other current assets The balance of prepaid expenses and other current assets was made up of the following: (in thousands) March 31, 2024 December 31, 2023 Prepaid software agreements $ 10,237 $ 8,435 Other prepaid expenses 9,125 9,355 Assets held-for-sale — 4,845 Other current assets 5,617 6,259 Prepaid expenses and other current assets $ 24,979 $ 28,894 NOTE 6: WORKERS' COMPENSATION INSURANCE AND RESERVES We provide workers' compensation insurance for our associates and permanent employees. The majority of our current workers' compensation insurance policies cover claims for a particular event above our $ 5.0 million deductible limit, on a "per occurrence" basis. This results in our business being substantially self-insured. Our workers' compensation reserve for claims below the deductible limit is discounted to its estimated net present value. The discount rates used to estimate net present value are based on average returns of "risk-free" U.S. Treasury instruments available during the year in which the liability was incurred and the weighted average duration of the payments against the self-insured claims. Payments made against self-insured claims are made over a weighted average period of approximately 5.5 years as of March 31, 2024. The weighted average discount rate was 2.5 % and 2.4 % at March 31, 2024 and December 31, 2023, respectively. The following table presents a reconciliation of the undiscounted workers' compensation reserve to the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Our workers' compensation reserve includes estimated expenses related to claims above our self-insured limits ("excess claims"), and we record a corresponding receivable for the insurance coverage on excess claims based on the contractual policy agreements we have with insurance carriers. We discount this reserve and corresponding receivable to its estimated net present value using the discount rates based on average returns of "risk-free" U.S. Treasury instruments available during the year in which the liability was incurred and the weighted average duration of the payments against the excess claims. The claim payments are made and the corresponding reimbursements from our insurance carriers are received over an estimated weighted average period of approximately 18 years. The rates used to discount excess claims incurred during the thirteen weeks ended March 31, 2024 and fifty-three weeks ended December 31, 2023 were 4.3 % and 4.1 %, respectively. The discounted workers' compensation reserve for excess claims was $ 53.0 million and $ 54.9 million as of March 31, 2024 and December 31, 2023, respectively. The discounted receivables from insurance companies, net of valuation allowance, were $ 52.0 million and $ 53.8 million as of March 31, 2024 and December 31, 2023, respectively. Workers' compensation cost consists primarily of changes in self-insurance reserves net of changes in discount, monopolistic jurisdictions' premiums, insurance premiums and other miscellaneous expenses. Workers' compensation cost of $ 5.3 million and $ 4.8 million was recorded in cost of services on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen weeks ended March 31, 2024 and March 26, 2023, respectively . NOTE 7: LONG-TERM DEBT We have a revolving credit agreement with Bank of America, N.A., PNC Bank, N.A., HSBC Bank USA, N.A., Wells Fargo Bank, N.A., and Key Bank, N.A. dated as of Febru

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