TrueBlue Files Q3 2024 10-Q, Reports on Operations

TL;DR

TrueBlue's Q3 10-Q is in, showing operational updates and a disposal of a subsidiary.

AI Summary

TrueBlue, Inc. filed its 10-Q for the period ending September 29, 2024. The company reported financial results for the third quarter and the first nine months of the year. Notably, the filing mentions the disposal of Labour Ready Temporary Services Ltd. on February 26, 2024.

Why It Matters

This filing provides investors with an update on TrueBlue's financial performance and operational changes, including asset disposals, which can impact future revenue and profitability.

Risk Assessment

Risk Level: medium — The filing details operational performance and potential asset disposals, which can carry inherent business risks.

Key Players & Entities

• TrueBlue, Inc. (company) — Filer of the 10-Q
• September 29, 2024 (date) — End of the reporting period
• Labour Ready Temporary Services Ltd. (company) — Subsidiary disposed of on February 26, 2024
• February 26, 2024 (date) — Date of disposal of Labour Ready Temporary Services Ltd.

FAQ

Filing Documents

• tbi-20240929.htm (10-Q) — 996KB
• tbi10q092924ex311.htm (EX-31.1) — 9KB
• tbi10q092924ex312.htm (EX-31.2) — 10KB
• tbi10q092924ex321.htm (EX-32.1) — 6KB
• tbi-20240929_g1.jpg (GRAPHIC) — 11KB
• 0000768899-24-000120.txt ( ) — 5917KB
• tbi-20240929.xsd (EX-101.SCH) — 41KB
• tbi-20240929_cal.xml (EX-101.CAL) — 76KB
• tbi-20240929_def.xml (EX-101.DEF) — 170KB
• tbi-20240929_lab.xml (EX-101.LAB) — 535KB
• tbi-20240929_pre.xml (EX-101.PRE) — 366KB
• tbi-20240929_htm.xml (XML) — 818KB

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 20

Quantitative and qualitative disclosures about market risk

Item 3. Quantitative and qualitative disclosures about market risk 32

Controls and procedures

Item 4. Controls and procedures 32

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal proceedings

Item 1. Legal proceedings 34

Risk factors

Item 1A. Risk factors 34

Unregistered sales of equity securities and use of proceeds

Item 2. Unregistered sales of equity securities and use of proceeds 34

Defaults upon senior securities

Item 3. Defaults upon senior securities 34

Mine safety disclosures

Item 4. Mine safety disclosures 34

Other information

Item 5. Other information 34

Index to exhibits

Item 6. Index to exhibits 35

Signatures

Signatures 36 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) September 29, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 14,505 $ 61,885 Accounts receivable, net of allowance of $ 1,508 and $ 2,005 , respectively 225,376 252,538 Prepaid expenses and other current assets 34,532 28,894 Income tax receivable 10,887 11,676 Total current assets 285,300 354,993 Property and equipment, net 91,078 104,906 Restricted cash, cash equivalents and investments 180,124 192,985 Deferred income taxes, net 728 35,465 Goodwill 25,285 84,114 Intangible assets, net 6,428 10,525 Operating lease right-of-use assets, net 51,821 49,819 Workers' compensation claims receivable, net 48,607 53,841 Other assets, net 13,005 12,735 Total assets $ 702,376 $ 899,383 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and other accrued expenses $ 35,770 $ 56,401 Accrued wages and benefits 64,888 80,120 Income tax payable — 439 Current portion of workers' compensation claims reserve 36,971 44,866 Current operating lease liabilities 11,856 11,902 Other current liabilities 5,096 10,371 Total current liabilities 154,581 204,099 Workers' compensation claims reserve, less current portion 129,475 151,649 Long-term deferred compensation liabilities 38,298 35,205 Long-term operating lease liabilities 51,421 49,434 Other long-term liabilities 1,449 1,123 Total liabilities 375,224 441,510 Commitments and contingencies (Note 9) 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; 29,497,872 and 31,245,732 shares issued and outstanding 1 1 Accumulated other comprehensive loss ( 20,112 ) ( 20,712 ) Retained earnings 347,263 478,584 Total shareholders' equity 327,

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 ("SEC") 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 thirty-nine weeks ended September 29, 2024 are not necessarily indicative of the results expected for the full fiscal year nor for any other fiscal period. Goodwill and indefinite-lived intangible assets 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Indefinite-lived intangible assets We have indefinite-lived intangible assets for trade names/trademarks related to businesses within our PeopleScout and PeopleManagement segments. We evaluate our 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 significant change in general economic conditions, deterioration in industry environment, changes in cost factors, declining operating performance indicators, legal factors, competition, client engagement, or sale or disposition of a significant portion of the business. We monitor the existence of potential impairment indicators throughout the fiscal year. When evaluating indefinite-lived intangible assets for impairment, we may first assess qualitative factors to determine whether it is more likely than not the fair value of the indefinite-lived intangible asset is less than its carrying amount. Qualitative factors include macroeconomic conditions, industry and market conditions and overall company financial performance. If, after assessing the totality of events and circumstances, we determine that it is more likely than not the fair value of the indefinite-lived intangible asset is greater than its carrying amount, the quantitative impairment test is unnecessary. The quantitative impairment test, if necessary, utilizes the relief from royalty method to determine the fair value of each of our trade names/trademarks. If the carrying value exceeds the fair value, we recognize an impairment charge in an amount equal to the excess, not to exceed the carrying value. During the fiscal second quarter of 2024, we performed an impairment test for indefinite-lived intangible assets. Refer to Note 6: Goodwill and Intangible Assets for additional details on the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 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 (fiscal 2024 for TrueBlue), and interim periods beginning after December 15, 2024 (Q1 2025 for TrueBlue). Retrospective application is required for all periods presented. We are currently evaluating the impact of this ASU on our required disclosures. Income Taxes In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740) - Improvements to Income Tax Disclosures ," which requires enhancements and further transparency to certain income tax disclosures, primarily to the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 (fiscal 2025 for TrueBlue), on a prospective basis with retrospective application permitted. We are currently evaluating the impact of this ASU on our required disclosures. Climate In March 2024, the SEC issued its final climate disclosure rule, which requires the disclosure of Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics in annual reports and registration statements, when material. Disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2025. While the SEC issued an order to stay the final rule in April 2024 due to certain legal challenges, we continue to evaluate the impact of this new rule on our required disclosures. There are no other accounting standards which have not yet been adopted that

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: September 29, 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 $ 14,505 $ 14,505 $ — $ — Restricted cash and cash equivalents 34,771 34,771 — — Cash, cash equivalents and restricted cash and cash equivalents (1) $ 49,276 $ 49,276 $ — $ — Municipal debt securities $ 23,546 $ — $ 23,546 $ — Corporate debt securities 67,736 — 67,736 — Agency mortgage-backed securities 11,495 — 11,495 — U.S. government and agency securities 983 — 983 — Restricted investments classified as held-to-maturity (2) $ 103,760 $ — $ 103,760 $ — 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. Assets measured at fair value on a nonrecurring basis In addition to assets that are recorded at fair value on a recurring basis

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) For our indefinite-lived intangible asset impairment test performed during the fiscal second quarter of 2024, the fair values of our trade names/trademarks were estimated utilizing the relief from royalty method. The various inputs to this fair value model are considered Level 3. As a result of the test, one of our trade names/trademarks with a carrying value of $ 3.3 million was written down to its fair value, and an impairment charge of $ 0.6 million was recognized on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirty-nine weeks ended September 29, 2024. NOTE 4: RESTRICTED CASH, CASH EQUIVALENTS AND INVESTMENTS The following is a summary of the carrying value of our restricted cash, cash equivalents and investments: (in thousands) September 29, 2024 December 31, 2023 Cash collateral held by insurance carriers $ 22,215 $ 23,598 Cash and cash equivalents held in Trust 12,187 12,703 Investments held in Trust 103,627 122,659 Company-owned life insurance policies 41,726 32,905 Other restricted cash and cash equivalents 369 1,120 Total restricted cash, cash equivalents and investments $ 180,124 $ 192,985 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 each of our held-to-maturity investments held in Trust, aggregated by investment category as of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) The amortized cost and fair value by contractual maturity of our held-to-maturity investments are as follows: September 29, 2024 (in thousands) Amortized cost Fair value Due in one year or less $ 28,069 $ 27,869 Due after one year through five years 63,408 63,346 Due after five years through ten years 6,212 6,415 Due after ten years 5,938 6,130 Total held-to-maturity investments $ 103,627 $ 103,760 Actual maturities may differ from contractual maturities because the issuers of certain debt securities have the right to call or prepay their obligations without penalty. We have no significant concentrations of counterparties in our held-to-maturity investment portfolio. Company-owned life insurance policies We hold company-owned life insurance policies to support our deferred compensation liability. Unrealized gains and losses related to investments still held at September 29, 2024 and September 24, 2023, which are included in SG&A expense on our Consolidated Statements of Operations and Comprehensive Income (Loss), were as follows: Thirteen weeks ended Thirty-nine weeks ended (in thousands) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023 Unrealized gains (losses

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