|
Washington
|
|
91-1287341
|
(State of incorporation)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
1015 A Street, Tacoma, Washington
|
|
98402
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock no par value
|
|
The New York Stock Exchange
|
Large accelerated filer
|
x
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
|
Emerging growth company
|
¨
|
|
|
|
|
|
Page
|
PART I. FINANCIAL INFORMATION
|
||
Item 1.
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
PART II. OTHER INFORMATION
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
|
|
|
Item 1.
|
CONSOLIDATED FINANCIAL STATEMENTS
|
(in thousands, except par value data)
|
October 1,
2017 |
January 1,
2017 |
||||
ASSETS
|
|
|
||||
Current assets:
|
|
|
||||
Cash and cash equivalents
|
$
|
35,055
|
|
$
|
34,970
|
|
Accounts receivable, net of allowance for doubtful accounts of $5,741 and $5,160
|
380,473
|
|
352,606
|
|
||
Prepaid expenses, deposits and other current assets
|
18,923
|
|
21,373
|
|
||
Income tax receivable
|
5,945
|
|
18,854
|
|
||
Total current assets
|
440,396
|
|
427,803
|
|
||
Property and equipment, net
|
63,079
|
|
63,998
|
|
||
Restricted cash and investments
|
244,173
|
|
231,193
|
|
||
Deferred income taxes, net
|
1,037
|
|
6,770
|
|
||
Goodwill
|
226,771
|
|
224,223
|
|
||
Intangible assets, net
|
109,963
|
|
125,671
|
|
||
Other assets, net
|
46,931
|
|
50,787
|
|
||
Total assets
|
$
|
1,132,350
|
|
$
|
1,130,445
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
||||
Current liabilities:
|
|
|
||||
Accounts payable and other accrued expenses
|
$
|
67,364
|
|
$
|
66,758
|
|
Accrued wages and benefits
|
79,607
|
|
79,782
|
|
||
Current portion of workers’ compensation claims reserve
|
76,406
|
|
79,126
|
|
||
Contingent consideration
|
—
|
|
21,600
|
|
||
Current portion of long-term debt
|
23,422
|
|
2,267
|
|
||
Other current liabilities
|
1,408
|
|
1,602
|
|
||
Total current liabilities
|
248,207
|
|
251,135
|
|
||
Workers’ compensation claims reserve, less current portion
|
202,929
|
|
198,225
|
|
||
Long-term debt, less current portion
|
111,408
|
|
135,362
|
|
||
Other long-term liabilities
|
26,033
|
|
20,544
|
|
||
Total liabilities
|
588,577
|
|
605,266
|
|
||
|
|
|
||||
Commitments and contingencies (Note 5)
|
|
|
||||
|
|
|
||||
Shareholders’ equity:
|
|
|
||||
Preferred stock, $0.131 par value, 20,000 shares authorized; No shares issued and outstanding
|
—
|
|
—
|
|
||
Common stock, no par value, 100,000 shares authorized; 41,339 and 42,171 shares issued and outstanding
|
1
|
|
1
|
|
||
Accumulated other comprehensive loss
|
(6,880
|
)
|
(11,433
|
)
|
||
Retained earnings
|
550,652
|
|
536,611
|
|
||
Total shareholders’ equity
|
543,773
|
|
525,179
|
|
||
Total liabilities and shareholders’ equity
|
$
|
1,132,350
|
|
$
|
1,130,445
|
|
|
|
Thirteen weeks ended
|
|
Thirty-nine weeks ended
|
||||||||||
(in thousands, except per share data)\
|
October 1,
2017 |
September 23,
2016 |
|
October 1,
2017 |
September 23,
2016 |
||||||||
Revenue from services
|
$
|
660,780
|
|
$
|
697,097
|
|
|
$
|
1,839,146
|
|
$
|
2,015,689
|
|
Cost of services
|
488,761
|
|
518,702
|
|
|
1,372,418
|
|
1,516,858
|
|
||||
Gross profit
|
172,019
|
|
178,395
|
|
|
466,728
|
|
498,831
|
|
||||
Selling, general and administrative expense
|
131,552
|
|
134,679
|
|
|
378,150
|
|
401,090
|
|
||||
Depreciation and amortization
|
11,189
|
|
11,690
|
|
|
34,650
|
|
34,673
|
|
||||
Goodwill and intangible asset impairment charge
|
—
|
|
4,275
|
|
|
—
|
|
103,544
|
|
||||
Income (loss) from operations
|
29,278
|
|
27,751
|
|
|
53,928
|
|
(40,476
|
)
|
||||
Interest expense
|
(1,365
|
)
|
(1,721
|
)
|
|
(3,893
|
)
|
(5,430
|
)
|
||||
Interest and other income
|
1,146
|
|
854
|
|
|
3,903
|
|
2,657
|
|
||||
Interest and other income (expense), net
|
(219
|
)
|
(867
|
)
|
|
10
|
|
(2,773
|
)
|
||||
Income (loss) before tax expense
|
29,059
|
|
26,884
|
|
|
53,938
|
|
(43,249
|
)
|
||||
Income tax expense (benefit)
|
7,838
|
|
3,455
|
|
|
14,909
|
|
(9,911
|
)
|
||||
Net income (loss)
|
$
|
21,221
|
|
$
|
23,429
|
|
|
$
|
39,029
|
|
$
|
(33,338
|
)
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share:
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.52
|
|
$
|
0.56
|
|
|
$
|
0.94
|
|
$
|
(0.80
|
)
|
Diluted
|
$
|
0.51
|
|
$
|
0.56
|
|
|
$
|
0.94
|
|
$
|
(0.80
|
)
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
||||||||
Basic
|
41,046
|
|
41,762
|
|
|
41,420
|
|
41,651
|
|
||||
Diluted
|
41,276
|
|
42,056
|
|
|
41,671
|
|
41,651
|
|
||||
|
|
|
|
|
|
||||||||
Other comprehensive income:
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
$
|
1,143
|
|
$
|
1,247
|
|
|
$
|
3,483
|
|
$
|
3,341
|
|
Unrealized gain on investments, net of tax
|
424
|
|
784
|
|
|
1,070
|
|
946
|
|
||||
Total other comprehensive income, net of tax
|
1,567
|
|
2,031
|
|
|
4,553
|
|
4,287
|
|
||||
Comprehensive income (loss)
|
$
|
22,788
|
|
$
|
25,460
|
|
|
$
|
43,582
|
|
$
|
(29,051
|
)
|
|
|
Thirty-nine weeks ended
|
|||||
(in thousands)
|
October 1,
2017 |
September 23,
2016 |
||||
Cash flows from operating activities:
|
|
|
||||
Net income (loss)
|
$
|
39,029
|
|
$
|
(33,338
|
)
|
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
|
|
|
||||
Depreciation and amortization
|
34,650
|
|
34,673
|
|
||
Goodwill and intangible asset impairment charge
|
—
|
|
103,544
|
|
||
Provision for doubtful accounts
|
6,321
|
|
6,361
|
|
||
Stock-based compensation
|
6,161
|
|
7,443
|
|
||
Deferred income taxes
|
4,890
|
|
(23,874
|
)
|
||
Other operating activities
|
2,563
|
|
5,603
|
|
||
Changes in operating assets and liabilities, net of effects of acquisition of business:
|
|
|
||||
Accounts receivable
|
(34,198
|
)
|
102,722
|
|
||
Income tax receivable
|
12,788
|
|
4,018
|
|
||
Other assets
|
6,306
|
|
(3,563
|
)
|
||
Accounts payable and other accrued expenses
|
(784
|
)
|
(3,764
|
)
|
||
Accrued wages and benefits
|
(176
|
)
|
(3,254
|
)
|
||
Workers’ compensation claims reserve
|
1,985
|
|
11,938
|
|
||
Other liabilities
|
1,086
|
|
4,740
|
|
||
Net cash provided by operating activities
|
80,621
|
|
213,249
|
|
||
Cash flows from investing activities:
|
|
|
||||
Capital expenditures
|
(16,303
|
)
|
(17,766
|
)
|
||
Acquisition of business
|
—
|
|
(71,863
|
)
|
||
Change in restricted cash and cash equivalents
|
8,623
|
|
732
|
|
||
Purchases of restricted investments
|
(36,015
|
)
|
(35,940
|
)
|
||
Maturities of restricted investments
|
15,042
|
|
12,273
|
|
||
Net cash used in investing activities
|
(28,653
|
)
|
(112,564
|
)
|
||
Cash flows from financing activities:
|
|
|
||||
Purchases and retirement of common stock
|
(29,371
|
)
|
—
|
|
||
Net proceeds from stock option exercises and employee stock purchase plans
|
1,179
|
|
1,183
|
|
||
Common stock repurchases for taxes upon vesting of restricted stock
|
(2,956
|
)
|
(2,692
|
)
|
||
Net change in Revolving Credit Facility
|
(1,099
|
)
|
(104,586
|
)
|
||
Payments on debt
|
(1,700
|
)
|
(1,700
|
)
|
||
Payment of contingent consideration at acquisition date fair value
|
(18,300
|
)
|
—
|
|
||
Other
|
—
|
|
20
|
|
||
Net cash used in financing activities
|
(52,247
|
)
|
(107,775
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
364
|
|
2,090
|
|
||
Net change in cash and cash equivalents
|
85
|
|
(5,000
|
)
|
||
Cash and cash equivalents, beginning of period
|
34,970
|
|
29,781
|
|
||
Cash and cash equivalents, end of period
|
$
|
35,055
|
|
$
|
24,781
|
|
Supplemental disclosure of cash flow information:
|
|
|
||||
Cash paid (received) during the period for:
|
|
|
||||
Interest
|
$
|
2,612
|
|
$
|
3,071
|
|
Income taxes
|
(2,972
|
)
|
8,801
|
|
||
Non-cash transactions:
|
|
|
||||
Property, plant, and equipment purchased but not yet paid
|
2,863
|
|
2,244
|
|
||
Non-cash acquisition adjustments
|
—
|
|
3,783
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE 1:
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
|
|
NOTE 2:
|
FAIR VALUE MEASUREMENT
|
|
October 1, 2017
|
|||||||||||
(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)
|
||||||||
Financial assets:
|
|
|
|
|
||||||||
Cash and cash equivalents (1)
|
$
|
35,055
|
|
$
|
35,055
|
|
$
|
—
|
|
$
|
—
|
|
Restricted cash and cash equivalents (1)
|
59,788
|
|
59,788
|
|
—
|
|
—
|
|
||||
Other restricted assets (2)
|
21,115
|
|
21,115
|
|
—
|
|
—
|
|
||||
Restricted investments classified as held-to-maturity
|
165,053
|
|
—
|
|
165,053
|
|
—
|
|
|
January 1, 2017
|
|||||||||||
(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)
|
||||||||
Financial assets:
|
|
|
|
|
||||||||
Cash and cash equivalents (1)
|
$
|
34,970
|
|
$
|
34,970
|
|
$
|
—
|
|
$
|
—
|
|
Restricted cash and cash equivalents (1)
|
67,751
|
|
67,751
|
|
—
|
|
—
|
|
||||
Other restricted assets (2)
|
16,925
|
|
16,925
|
|
—
|
|
—
|
|
||||
Restricted investments classified as held-to-maturity
|
145,953
|
|
—
|
|
145,953
|
|
—
|
|
||||
|
|
|
|
|
||||||||
Financial liabilities:
|
|
|
|
|
||||||||
Contingent consideration (3)
|
21,600
|
|
—
|
|
—
|
|
21,600
|
|
(1)
|
Cash equivalents and restricted cash equivalents consist of money market funds, deposits, and investments with original maturities of three months or less.
|
(2)
|
Other restricted assets primarily consist of deferred compensation plan accounts, which are comprised of mutual funds classified as available-for-sale securities.
|
(3)
|
The estimated fair value of the contingent consideration associated with the acquisition of SIMOS Insourcing Solutions Corporation (“SIMOS”), which was estimated using a probability-adjusted discounted cash flow model.
|
|
NOTE 3:
|
RESTRICTED CASH AND INVESTMENTS
|
(in thousands)
|
October 1,
2017 |
January 1,
2017 |
||||
Cash collateral held by insurance carriers
|
$
|
29,122
|
|
$
|
34,910
|
|
Cash and cash equivalents held in Trust
|
30,666
|
|
32,841
|
|
||
Investments held in Trust
|
163,270
|
|
146,517
|
|
||
Other (1)
|
21,115
|
|
16,925
|
|
||
Total restricted cash and investments
|
$
|
244,173
|
|
$
|
231,193
|
|
(1)
|
Primarily consists of deferred compensation plan accounts, which are comprised of mutual funds classified as available-for-sale securities.
|
|
October 1, 2017
|
|||||||||||
(in thousands)
|
Amortized Cost
|
Gross Unrealized Gain
|
Gross Unrealized Loss
|
Fair Value
|
||||||||
Municipal debt securities
|
$
|
76,373
|
|
$
|
1,561
|
|
$
|
(233
|
)
|
$
|
77,701
|
|
Corporate debt securities
|
81,395
|
|
572
|
|
(166
|
)
|
81,801
|
|
||||
Agency mortgage-backed securities
|
4,502
|
|
36
|
|
(13
|
)
|
4,525
|
|
||||
U.S. government and agency securities
|
1,000
|
|
26
|
|
—
|
|
1,026
|
|
||||
|
$
|
163,270
|
|
$
|
2,195
|
|
$
|
(412
|
)
|
$
|
165,053
|
|
|
January 1, 2017
|
|||||||||||
(in thousands)
|
Amortized Cost
|
Gross Unrealized Gain
|
Gross Unrealized Loss
|
Fair Value
|
||||||||
Municipal debt securities
|
$
|
71,618
|
|
$
|
443
|
|
$
|
(865
|
)
|
$
|
71,196
|
|
Corporate debt securities
|
68,934
|
|
212
|
|
(352
|
)
|
68,794
|
|
||||
Agency mortgage-backed securities
|
5,965
|
|
30
|
|
(32
|
)
|
5,963
|
|
||||
|
$
|
146,517
|
|
$
|
685
|
|
$
|
(1,249
|
)
|
$
|
145,953
|
|
|
October 1, 2017
|
|||||
(in thousands)
|
Amortized Cost
|
Fair Value
|
||||
Due in one year or less
|
$
|
16,796
|
|
$
|
16,816
|
|
Due after one year through five years
|
83,156
|
|
83,764
|
|
||
Due after five years through ten years
|
63,318
|
|
64,473
|
|
||
|
$
|
163,270
|
|
$
|
165,053
|
|
|
(in thousands)
|
October 1,
2017 |
January 1,
2017 |
||||
Undiscounted workers’ compensation reserve
|
$
|
295,969
|
|
$
|
292,169
|
|
Less discount on workers’ compensation reserve
|
16,634
|
|
14,818
|
|
||
Workers' compensation reserve, net of discount
|
279,335
|
|
277,351
|
|
||
Less current portion
|
76,406
|
|
79,126
|
|
||
Long-term portion
|
$
|
202,929
|
|
$
|
198,225
|
|
NOTE 5:
|
COMMITMENTS AND CONTINGENCIES
|
(in thousands)
|
October 1,
2017 |
January 1,
2017 |
||||
Cash collateral held by workers’ compensation insurance carriers
|
$
|
28,343
|
|
$
|
28,066
|
|
Cash and cash equivalents held in Trust
|
30,666
|
|
32,841
|
|
||
Investments held in Trust
|
163,270
|
|
146,517
|
|
||
Letters of credit (1)
|
7,748
|
|
7,982
|
|
||
Surety bonds (2)
|
19,524
|
|
20,440
|
|
||
Total collateral commitments
|
$
|
249,551
|
|
$
|
235,846
|
|
(1)
|
We have agreements with certain financial institutions to issue letters of credit as collateral.
|
(2)
|
Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which are determined by each independent surety carrier. These fees do not exceed
2.0%
of the bond amount, subject to a minimum charge.
|
|
NOTE 6:
|
INCOME TAXES
|
NOTE 7:
|
NET INCOME (LOSS) PER SHARE
|
|
Thirteen weeks ended
|
|
Thirty-nine weeks ended
|
||||||||||
(in thousands, except per share amounts)
|
October 1,
2017 |
September 23,
2016 |
|
October 1,
2017 |
September 23,
2016 |
||||||||
Net income (loss)
|
$
|
21,221
|
|
$
|
23,429
|
|
|
$
|
39,029
|
|
$
|
(33,338
|
)
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares used in basic net income (loss) per common share
|
41,046
|
|
41,762
|
|
|
41,420
|
|
41,651
|
|
||||
Dilutive effect of non-vested restricted stock
|
230
|
|
294
|
|
|
251
|
|
—
|
|
||||
Weighted average number of common shares used in diluted net income (loss) per common share
|
41,276
|
|
42,056
|
|
|
41,671
|
|
41,651
|
|
||||
Net income (loss) per common share:
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.52
|
|
$
|
0.56
|
|
|
$
|
0.94
|
|
$
|
(0.80
|
)
|
Diluted
|
$
|
0.51
|
|
$
|
0.56
|
|
|
$
|
0.94
|
|
$
|
(0.80
|
)
|
|
|
|
|
|
|
||||||||
Anti-dilutive shares
|
354
|
|
302
|
|
|
388
|
|
521
|
|
|
NOTE 8:
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
Thirteen weeks ended
|
||||||||||||||||||
|
October 1, 2017
|
September 23, 2016
|
|||||||||||||||||
(in thousands)
|
Balance at beginning of period
|
Current period other comprehensive income
|
Balance at end of period
|
|
Balance at beginning of period
|
Current period other comprehensive income
|
Balance at end of period
|
||||||||||||
Foreign currency translation adjustment
|
$
|
(9,344
|
)
|
$
|
1,143
|
|
$
|
(8,201
|
)
|
|
$
|
(11,420
|
)
|
$
|
1,247
|
|
$
|
(10,173
|
)
|
Unrealized gain (loss) on investments (1)
|
897
|
|
424
|
|
1,321
|
|
|
(337
|
)
|
784
|
|
447
|
|
||||||
Total other comprehensive income (loss), net of tax
|
$
|
(8,447
|
)
|
$
|
1,567
|
|
$
|
(6,880
|
)
|
|
$
|
(11,757
|
)
|
$
|
2,031
|
|
$
|
(9,726
|
)
|
|
Thirty-nine weeks ended
|
||||||||||||||||||
|
October 1, 2017
|
September 23, 2016
|
|||||||||||||||||
(in thousands)
|
Balance at beginning of period
|
Current period other comprehensive income
|
Balance at end of period
|
|
Balance at beginning of period
|
Current period other comprehensive income
|
Balance at end of period
|
||||||||||||
Foreign currency translation adjustment
|
$
|
(11,684
|
)
|
$
|
3,483
|
|
$
|
(8,201
|
)
|
|
$
|
(13,514
|
)
|
$
|
3,341
|
|
$
|
(10,173
|
)
|
Unrealized gain (loss) on investments (1)
|
251
|
|
1,070
|
|
1,321
|
|
|
(499
|
)
|
946
|
|
447
|
|
||||||
Total other comprehensive income (loss), net of tax
|
$
|
(11,433
|
)
|
$
|
4,553
|
|
$
|
(6,880
|
)
|
|
$
|
(14,013
|
)
|
$
|
4,287
|
|
$
|
(9,726
|
)
|
(1)
|
Consists of deferred compensation plan accounts, which are comprised of mutual funds classified as available-for-sale securities. The tax impact on unrealized gain (loss) on available-for-sale securities was de minimis for the thirteen and
thirty-nine weeks ended
October 1, 2017
and
September 23, 2016
, respectively.
|
NOTE 9:
|
SEGMENT INFORMATION
|
•
|
Staff Management | SMX
: Exclusive recruitment and on-premise management of a facility’s contingent industrial workforce;
|
•
|
SIMOS Insourcing Solutions
: On-premise management and recruitment of warehouse/distribution operations;
|
|
•
|
Centerline Drivers
: Recruitment and management of temporary and dedicated drivers to the transportation and distribution industries; and
|
•
|
PlaneTechs
: Recruitment and on-premise management of skilled mechanics and technicians to the aviation and transportation industries.
|
•
|
PeopleScout
: Outsourced recruitment of permanent employees on behalf of clients; and
|
•
|
PeopleScout MSP
: Management of multiple third party staffing vendors on behalf of clients.
|
|
Thirteen weeks ended
|
|
Thirty-nine weeks ended
|
||||||||||
(in thousands)
|
October 1,
2017 |
September 23,
2016 |
|
October 1,
2017 |
September 23,
2016 |
||||||||
Revenue from services:
|
|
|
|
|
|
||||||||
PeopleReady
|
$
|
414,995
|
|
$
|
435,783
|
|
|
$
|
1,118,331
|
|
$
|
1,198,067
|
|
PeopleManagement
|
196,835
|
|
216,834
|
|
|
581,408
|
|
682,605
|
|
||||
PeopleScout
|
48,950
|
|
44,480
|
|
|
139,407
|
|
135,017
|
|
||||
Total Company
|
$
|
660,780
|
|
$
|
697,097
|
|
|
$
|
1,839,146
|
|
$
|
2,015,689
|
|
|
Thirteen weeks ended
|
|
Thirty-nine weeks ended
|
||||||||||
(in thousands)
|
October 1,
2017 |
September 23,
2016 |
|
October 1,
2017 |
September 23,
2016 |
||||||||
Segment EBITDA (1):
|
|
|
|
|
|
||||||||
PeopleReady
|
$
|
28,572
|
|
$
|
34,100
|
|
|
$
|
57,448
|
|
$
|
75,198
|
|
PeopleManagement
|
6,940
|
|
3,520
|
|
|
18,759
|
|
(70,218
|
)
|
||||
PeopleScout
|
10,277
|
|
8,358
|
|
|
29,071
|
|
12,527
|
|
||||
|
45,789
|
|
45,978
|
|
|
105,278
|
|
17,507
|
|
||||
Corporate unallocated
|
(5,322
|
)
|
(6,537
|
)
|
|
(16,700
|
)
|
(23,310
|
)
|
||||
Depreciation and amortization
|
(11,189
|
)
|
(11,690
|
)
|
|
(34,650
|
)
|
(34,673
|
)
|
||||
Income (loss) from operations
|
29,278
|
|
27,751
|
|
|
53,928
|
|
(40,476
|
)
|
||||
Interest and other income (expense), net
|
(219
|
)
|
(867
|
)
|
|
10
|
|
(2,773
|
)
|
||||
Income (loss) before tax expense
|
$
|
29,059
|
|
$
|
26,884
|
|
|
$
|
53,938
|
|
$
|
(43,249
|
)
|
(1)
|
Segment EBITDA was previously referred to as segment income (loss) from operations. This change had no impact on the amounts reported.
|
|
Item 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
|
•
|
PeopleReady
is our branch-based blue-collar industrial staffing service. PeopleReady provides a wide range of staffing solutions for contingent, on-demand, general and skilled labor to a broad range of industries that include retail, manufacturing, warehousing, logistics, energy, construction, hospitality, and others. PeopleReady helped approximately
122,000
businesses in 2016 to be more productive by providing easy access to dependable contingent labor. Additionally, we connected over
414,000
people with work in 2016. At the end of the
third
quarter of fiscal 2017, we had a network of
628
branches across all 50 states, Puerto Rico, and Canada.
|
|
•
|
PeopleManagement
predominantly encompasses our on-site placement and management services and provides a wide range of workforce management solutions for blue-collar, contingent, on-premise staffing and management of a facility’s workforce. We use distinct brands to market our PeopleManagement contingent workforce solutions and operate as Staff Management | SMX (“Staff Management”), SIMOS Insourcing Solutions (“SIMOS”), PlaneTechs, and Centerline Drivers. Staff Management specializes in exclusive recruitment and on-premise management of a facility’s contingent industrial workforce. SIMOS specializes in exclusive recruitment and on-premise management of warehouse/distribution operations to meet the growing demand for e-commerce and scalable supply chain solutions. PlaneTechs specializes in recruitment and on-premise management of temporary skilled mechanics and technicians to the aviation and transportation industries. Centerline Drivers specializes in dedicated and temporary truck drivers to the transportation and distribution industries. PeopleManagement helped approximately
900
businesses in 2016 to be more productive by providing easy access to dependable blue-collar contingent workforce solutions. Additionally, we connected over
133,000
people with work in 2016. At the end of the
third
quarter of fiscal 2017, we had
233
on-premise locations at customers’ facilities.
|
•
|
PeopleScout
provides outsourced recruitment for permanent employees for all major industries and jobs. Our dedicated recruitment process outsourcing service delivery teams work as an integrated partner with our clients in providing end-to-end talent acquisition services from sourcing candidates to on-boarding employees. In 2016, PeopleScout placed over
268,000
individuals into permanent jobs with
200
clients. Our PeopleScout segment also includes a management service provider business, which provides clients with improved quality and spend management of their contingent labor vendors.
|
|
|
|
Thirteen weeks ended
|
|
Thirty-nine weeks ended
|
||||||||||||||||||
(in thousands, except percentages and per share amounts)
|
October 1,
2017 |
% of revenue
|
September 23,
2016 |
% of revenue
|
|
October 1,
2017 |
% of revenue
|
September 23,
2016 |
% of revenue
|
||||||||||||
Revenue from services
|
$
|
660,780
|
|
|
$
|
697,097
|
|
|
|
$
|
1,839,146
|
|
|
$
|
2,015,689
|
|
|
||||
Total revenue growth (decline) %
|
(5.2
|
)%
|
|
1.9
|
%
|
|
|
(8.8
|
)%
|
|
6.9
|
%
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross profit
|
$
|
172,019
|
|
26.0
|
%
|
$
|
178,395
|
|
25.6
|
%
|
|
$
|
466,728
|
|
25.4
|
%
|
$
|
498,831
|
|
24.7
|
%
|
Selling, general and administrative expense
|
131,552
|
|
19.9
|
%
|
134,679
|
|
19.3
|
%
|
|
378,150
|
|
20.6
|
%
|
401,090
|
|
19.9
|
%
|
||||
Depreciation and amortization
|
11,189
|
|
1.7
|
%
|
11,690
|
|
1.7
|
%
|
|
34,650
|
|
1.9
|
%
|
34,673
|
|
1.7
|
%
|
||||
Goodwill and intangible asset impairment charge
|
—
|
|
|
4,275
|
|
0.6
|
%
|
|
—
|
|
|
103,544
|
|
5.1
|
%
|
||||||
Income (loss) from operations
|
29,278
|
|
4.4
|
%
|
27,751
|
|
4.0
|
%
|
|
53,928
|
|
2.9
|
%
|
(40,476
|
)
|
(2.0
|
)%
|
||||
Interest and other income (expense), net
|
(219
|
)
|
|
(867
|
)
|
|
|
10
|
|
|
(2,773
|
)
|
|
||||||||
Income (loss) before tax expense
|
29,059
|
|
|
26,884
|
|
|
|
53,938
|
|
|
|
(43,249
|
)
|
|
|||||||
Income tax expense (benefit)
|
7,838
|
|
|
3,455
|
|
|
|
14,909
|
|
|
(9,911
|
)
|
|
||||||||
Net income (loss)
|
$
|
21,221
|
|
3.2
|
%
|
$
|
23,429
|
|
3.4
|
%
|
|
$
|
39,029
|
|
2.1
|
%
|
$
|
(33,338
|
)
|
(1.7
|
)%
|
Net income (loss) per diluted share
|
$
|
0.51
|
|
|
$
|
0.56
|
|
|
|
$
|
0.94
|
|
|
$
|
(0.80
|
)
|
|
|
Thirteen weeks ended
|
|
Thirty-nine weeks ended
|
||||||||||||||||||||||
(in thousands, except percentages)
|
October 1,
2017 |
Decline %
|
Segment % of Total
|
September 23,
2016 |
Segment % of Total
|
|
October 1,
2017 |
Decline %
|
Segment % of Total
|
September 23,
2016 |
Segment % of Total
|
||||||||||||||
Revenue from services:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
PeopleReady
|
$
|
414,995
|
|
(4.8
|
)%
|
62.8
|
%
|
$
|
435,783
|
|
62.5
|
%
|
|
$
|
1,118,331
|
|
(6.7
|
)%
|
60.8
|
%
|
$
|
1,198,067
|
|
59.4
|
%
|
PeopleManagement
|
196,835
|
|
(9.2
|
)%
|
29.8
|
%
|
216,834
|
|
31.1
|
%
|
|
581,408
|
|
(14.8
|
)%
|
31.6
|
%
|
682,605
|
|
33.9
|
%
|
||||
PeopleScout
|
48,950
|
|
10.0
|
%
|
7.4
|
%
|
44,480
|
|
6.4
|
%
|
|
139,407
|
|
3.3
|
%
|
7.6
|
%
|
135,017
|
|
6.7
|
%
|
||||
Total Company
|
$
|
660,780
|
|
(5.2
|
)%
|
100.0
|
%
|
$
|
697,097
|
|
100.0
|
%
|
|
$
|
1,839,146
|
|
(8.8
|
)%
|
100.0
|
%
|
$
|
2,015,689
|
|
100.0
|
%
|
|
|
Thirteen weeks ended
|
|
Thirty-nine weeks ended
|
||||||||||
(in thousands, except percentages)
|
October 1, 2017
|
September 23, 2016
|
|
October 1, 2017
|
September 23, 2016
|
||||||||
Gross profit
|
$
|
172,019
|
|
$
|
178,395
|
|
|
$
|
466,728
|
|
$
|
498,831
|
|
Percentage of revenue
|
26.0
|
%
|
25.6
|
%
|
|
25.4
|
%
|
24.7
|
%
|
|
|
Thirteen weeks ended
|
|
Thirty-nine weeks ended
|
||||||||||
(in thousands, except percentages)
|
October 1, 2017
|
September 23, 2016
|
|
October 1, 2017
|
September 23, 2016
|
||||||||
Selling, general and administrative expense
|
$
|
131,552
|
|
$
|
134,679
|
|
|
$
|
378,150
|
|
$
|
401,090
|
|
Percentage of revenue
|
19.9
|
%
|
19.3
|
%
|
|
20.6
|
%
|
19.9
|
%
|
|
Thirteen weeks ended
|
|
Thirty-nine weeks ended
|
||||||||||
(in thousands, except percentages)
|
October 1, 2017
|
September 23, 2016
|
|
October 1, 2017
|
September 23, 2016
|
||||||||
Goodwill and intangible asset impairment charge
|
$
|
—
|
|
$
|
4,275
|
|
|
$
|
—
|
|
$
|
103,544
|
|
Percentage of revenue
|
|
0.6
|
%
|
|
|
5.1
|
%
|
|
Thirteen weeks ended
|
|
Thirty-nine weeks ended
|
||||||||||
(in thousands, except percentages)
|
October 1, 2017
|
September 23, 2016
|
|
October 1, 2017
|
September 23, 2016
|
||||||||
Depreciation and amortization
|
$
|
11,189
|
|
$
|
11,690
|
|
|
$
|
34,650
|
|
$
|
34,673
|
|
Percentage of revenue
|
1.7
|
%
|
1.7
|
%
|
|
1.9
|
%
|
1.7
|
%
|
|
|
Thirteen weeks ended
|
|
Thirty-nine weeks ended
|
||||||||||
(in thousands, except percentages)
|
October 1, 2017
|
September 23, 2016
|
|
October 1, 2017
|
September 23, 2016
|
||||||||
Income tax expense (benefit)
|
$
|
7,838
|
|
$
|
3,455
|
|
|
$
|
14,909
|
|
$
|
(9,911
|
)
|
Effective income tax rate
|
27.0
|
%
|
12.9
|
%
|
|
27.6
|
%
|
22.9
|
%
|
|
Thirteen weeks ended
|
|
Thirty-nine weeks ended
|
||||||
|
October 1, 2017
|
September 23, 2016
|
|
October 1, 2017
|
September 23, 2016
|
||||
Effective income tax rate without adjustments below
|
38.6
|
%
|
39.0
|
%
|
|
39.2
|
%
|
41.3
|
%
|
Hiring credits estimate from current year wages
|
(10.2
|
)
|
(14.0
|
)
|
|
(10.2
|
)
|
(14.0
|
)
|
Additional hiring credits from prior year wages
|
(1.4
|
)
|
(12.1
|
)
|
|
(1.7
|
)
|
(9.9
|
)
|
Tax effect of share based compensation
|
—
|
|
—
|
|
|
0.3
|
|
—
|
|
Goodwill and intangible asset impairment impact
|
—
|
|
—
|
|
|
—
|
|
5.5
|
|
Effective income tax rate
|
27.0
|
%
|
12.9
|
%
|
|
27.6
|
%
|
22.9
|
%
|
|
|
Thirteen weeks ended
|
|
Thirty-nine weeks ended
|
||||||||||
(in thousands, except for percentages)
|
October 1, 2017
|
September 23, 2016
|
|
October 1, 2017
|
September 23, 2016
|
||||||||
Revenue from services
|
$
|
414,995
|
|
$
|
435,783
|
|
|
$
|
1,118,331
|
|
$
|
1,198,067
|
|
Segment EBITDA
|
28,572
|
|
34,100
|
|
|
57,448
|
|
75,198
|
|
||||
Percentage of revenue
|
6.9
|
%
|
7.8
|
%
|
|
5.1
|
%
|
6.3
|
%
|
|
Thirteen weeks ended
|
|
Thirty-nine weeks ended
|
||||||||||
(in thousands, except for percentages)
|
October 1, 2017
|
September 23, 2016
|
|
October 1, 2017
|
September 23, 2016
|
||||||||
Revenue from services
|
$
|
196,835
|
|
$
|
216,834
|
|
|
$
|
581,408
|
|
$
|
682,605
|
|
Segment EBITDA
|
6,940
|
|
3,520
|
|
|
18,759
|
|
(70,218
|
)
|
||||
Percentage of revenue
|
3.5
|
%
|
1.6
|
%
|
|
3.2
|
%
|
(10.3
|
)%
|
|
Thirteen weeks ended
|
|
Thirty-nine weeks ended
|
||||||||||
(in thousands, except for percentages)
|
October 1, 2017
|
September 23, 2016
|
|
October 1, 2017
|
September 23, 2016
|
||||||||
Revenue from services
|
$
|
48,950
|
|
$
|
44,480
|
|
|
$
|
139,407
|
|
$
|
135,017
|
|
Segment EBITDA
|
10,277
|
|
8,358
|
|
|
29,071
|
|
12,527
|
|
||||
Percentage of revenue
|
21.0
|
%
|
18.8
|
%
|
|
20.9
|
%
|
9.3
|
%
|
|
•
|
Revenue has declined during the first three quarters of 2017 primarily due to the decrease in revenue from our former largest customer and weakness in the residential construction, manufacturing, and various other service industries in many of the geographies we serve. Within our staffing businesses, wage growth has accelerated due to various minimum wage increases and a need for higher wages to attract talent in tight labor markets. We have increased bill rates to compensate for the higher wages, payroll burdens, and our traditional mark-up. While we believe our pricing strategy is the right long-term decision, these actions impact our revenue trends in the near term. Additionally, we implemented cost reduction programs in the prior year which we continued in the current year to address revenue declines and preserve operating margin without sacrificing strategic initiatives to drive future growth. We will continue to monitor and manage our SG&A costs.
|
•
|
We have re-aligned our business around three distinct segments: PeopleReady, PeopleManagement, and PeopleScout. By simplifying our specialized service offerings and clarifying our branding structure, we have laid the foundation for expanding our cross-selling efforts. PeopleReady performance continues to be impacted by temporary disruptions from operational changes related to our consolidation of Labor Ready, CLP Resources, and Spartan Staffing into one specialized workforce solutions service in order to create a more seamless experience for our customers to access all of our blue-color contingent on-demand general and skilled labor service offerings. We are actively working to complete the transition. We are also sharpening our focus on strategic accounts, developing comprehensive account plans, and building institutional capacity to ingrain cross-selling as part of the TrueBlue culture. These efforts are well underway and we believe will drive favorable results.
|
•
|
Our productivity based solutions within our PeopleManagement segment specialize in exclusive recruitment and on-premise management of warehouse/distribution operations to meet the growing demand for e-commerce and scalable supply chain solutions. This business model is based on a productivity-based pricing model where the customer outsources a complete work cell to us and through a combination of process redesign and best practices, we increase the efficiency of a customer’s contingent workforce and align the cost of the workforce with the level of demand within a customer’s business. We believe this adds an appealing solution to certain parts of our existing on-premise business as well as opportunities in the broader marketplace. We believe that productivity based solutions will continue to deliver growth with its compelling value proposition.
|
•
|
PeopleScout is a recognized industry leader of RPO services, which are in the early stages of their adoption cycles. We expect continued organic growth with a differentiated service that leverages innovative technology for high-volume, scalable sourcing and dedicated client service teams for connecting the best talent to work opportunity, reducing the cost of hiring, and delivering a better outcome for the client. Additionally, we are focused on growth through the disciplined pursuit of international acquisitions to improve win rates on multi-continent deals.
|
•
|
We are committed to technology innovation that makes it easier for our customers to do business with us and easier to connect people with work. We continue making investments in our online tools and our mobile application ("JobStack") to improve access, speed, and ease of connecting our customers and workers. We began the rollout of the JobStack worker application ("app") earlier this year. The worker functionality is now live in approximately 450 branches, or about 70% of our overall PeopleReady branch network. We began piloting the onboarding of clients to the JobStack client app at the end of Q2 2017 and are receiving positive feedback. We expect JobStack will increase the competitive differentiation of our services, expand our reach into new demographics, improve both service delivery and work-order fill rates, and ultimately reduce our dependence on local branches to find temporary workers and connect them with work.
|
|
|
Thirty-nine weeks ended
|
|||||
(in thousands)
|
October 1, 2017
|
September 23, 2016
|
||||
Net income (loss)
|
$
|
39,029
|
|
$
|
(33,338
|
)
|
Adjustments to reconcile net income (loss) to net cash from operating activities:
|
|
|
||||
Depreciation and amortization
|
34,650
|
|
34,673
|
|
||
Goodwill and intangible asset impairment charge
|
—
|
|
103,544
|
|
||
Provision for doubtful accounts
|
6,321
|
|
6,361
|
|
||
Stock-based compensation
|
6,161
|
|
7,443
|
|
||
Deferred income taxes
|
4,890
|
|
(23,874
|
)
|
||
Other operating activities
|
2,563
|
|
5,603
|
|
||
Changes in operating assets and liabilities, net of effects of acquisition of business:
|
|
|
||||
Accounts receivable
|
(34,198
|
)
|
102,722
|
|
||
Income tax receivable
|
12,788
|
|
4,018
|
|
||
Accounts payable and other accrued expenses
|
(784
|
)
|
(3,764
|
)
|
||
Accrued wages and benefits
|
(176
|
)
|
(3,254
|
)
|
||
Workers' compensation claims reserve
|
1,985
|
|
11,938
|
|
||
Other assets and liabilities
|
7,392
|
|
1,177
|
|
||
Net cash provided by operating activities
|
$
|
80,621
|
|
$
|
213,249
|
|
•
|
The goodwill and intangible asset impairment charge of
$104 million
in the prior year was primarily driven by a change in the scope of services with our former largest customer and the impact of other changes in outlook reflecting changes to economic and industry conditions which lowered future expectations. In addition, it includes a
$4.3 million
trade name impairment charge in connection with the consolidation of our retail branch network under a common brand name.
|
•
|
The change to deferred income taxes is due primarily to the goodwill and intangible asset impairment charge in the comparable period in the prior year.
|
•
|
Accounts receivable followed normal season patterns through the third quarter of 2017 by increasing from the beginning of the year. Our business experiences seasonal fluctuations. Demand for our PeopleReady services is higher during the second and third quarters of the year with demand peaking in the third quarter. In addition, days sales outstanding increased due to revenue mix and slowed collections. Accounts receivable for the comparable prior year period declined primarily due to a decline in revenue and associated receivables from our former largest customer. The record fourth quarter of fiscal 2015 and seasonal de-leveraging that followed was in large part due to this customer who substantially insourced their recruitment and management of contingent labor for their warehouse fulfillment centers and distribution sites in the United States commencing in the second quarter of fiscal 2016. Revenues from our former largest customer declined by $140 million between the fourth quarter of fiscal 2015 and the third quarter of fiscal 2016. Revenues from our former largest customer declined by $22 million between the fourth quarter of fiscal 2016 and the third quarter of fiscal 2017.
|
•
|
The decline in accounts payable and other accrued expenses is primarily due to cost control programs together with normal seasonal patterns and timing of payments.
|
•
|
The decline in accrued wages and benefits is primarily due to the lower volume of activity from revenue declines, which require reductions in the flex workforce to align with client volume changes.
|
•
|
Generally, our workers’ compensation claims reserve for estimated claims increases as contingent labor services increase and decreases as contingent labor services decline.
|
|
•
|
During the second quarter of 2017, we paid
$23 million
relating to the contingent consideration associated with our acquisition of SIMOS. The payment included
$18 million
related to the final purchase price fair value, which is reflected in cash flows used in financing activities. The remaining balance of
$4 million
is recognized in cash flows used in operating activities as a decrease in Other assets and liabilities.
|
|
Thirty-nine weeks ended
|
|||||
(in thousands)
|
October 1, 2017
|
September 23, 2016
|
||||
Capital expenditures
|
$
|
(16,303
|
)
|
$
|
(17,766
|
)
|
Acquisition of business, net of cash acquired
|
—
|
|
(71,863
|
)
|
||
Change in restricted cash and investments
|
(12,350
|
)
|
(22,935
|
)
|
||
Net cash used in investing activities
|
$
|
(28,653
|
)
|
$
|
(112,564
|
)
|
•
|
Cash used in investing activities of
$72 million
for the
thirty-nine weeks ended
September 23, 2016
, was for the acquisition of the RPO business of Aon Hewitt, effective January 4, 2016.
|
•
|
Restricted cash and investments consists primarily of collateral that has been provided or pledged to insurance carriers and state workers’ compensation programs. The change in cash used in investing activities was primarily due to a decrease in collateral requirements paid to our workers’ compensation insurance providers due to a decline in contingent labor services, as well as the timing of collateral payments.
|
|
Thirty-nine weeks ended
|
|||||
(in thousands)
|
October 1, 2017
|
September 23, 2016
|
||||
Purchases and retirement of common stock
|
$
|
(29,371
|
)
|
$
|
—
|
|
Net proceeds from stock option exercises and employee stock purchase plans
|
1,179
|
|
1,183
|
|
||
Common stock repurchases for taxes upon vesting of restricted stock
|
(2,956
|
)
|
(2,692
|
)
|
||
Net change in Revolving Credit Facility
|
(1,099
|
)
|
(104,586
|
)
|
||
Payments on debt and other liabilities
|
(1,700
|
)
|
(1,700
|
)
|
||
Payment of contingent consideration at acquisition date fair value
|
(18,300
|
)
|
—
|
|
||
Other
|
—
|
|
20
|
|
||
Net cash used in financing activities
|
$
|
(52,247
|
)
|
$
|
(107,775
|
)
|
•
|
Purchases and retirement of common stock totaled
$29 million
under our prior share repurchase program during the
thirty-nine weeks ended
October 1, 2017
. On September 15, 2017, our Board of Directors authorized a new
$100 million
share repurchase program of our outstanding common stock. The share repurchase program does not obligate us to acquire any particular amount of common stock and does not have an expiration date. There have been no repurchases under this new program through the period ending
October 1, 2017
.
|
•
|
Payment of
$23 million
related to contingent consideration during the
thirty-nine weeks ended
October 1, 2017
was made in connection with the acquisition of SIMOS. The total contingent consideration payment included
$18 million
related to the final purchase price fair value, which is reflected in cash flows used in financing activities. The remaining balance of
$4 million
is recognized in cash flows used in operating activities as a decrease in Other assets and liabilities.
|
|
•
|
The net change in the Revolving Credit Facility in the prior year is due to repayments.
|
•
|
Our Revolving Credit Facility of up to a maximum of $300 million expires on June 30, 2019. The Revolving Credit Facility is an asset backed facility, which is secured by a pledge of substantially all of the assets of TrueBlue, Inc. and material U.S. domestic subsidiaries. The additional amount available to borrow at
October 1, 2017
was
$118 million
. We believe the Revolving Credit Facility provides adequate borrowing availability.
|
•
|
We had cash and cash equivalents of
$35 million
at
October 1, 2017
.
|
•
|
The majority of our workers’ compensation payments are made from restricted cash rather than cash from operations. At
October 1, 2017
, we had restricted cash and investments totaling
$244 million
.
|
|
S&P
|
Moody's
|
Fitch
|
Short-term rating
|
A-1/SP-1
|
P-1/MIG-1
|
F-1
|
Long-term rating
|
A
|
A2
|
A
|
|
(in thousands)
|
October 1, 2017
|
January 1, 2017
|
||||
Cash collateral held by workers’ compensation insurance carriers
|
$
|
28,343
|
|
$
|
28,066
|
|
Cash and cash equivalents held in Trust
|
30,666
|
|
32,841
|
|
||
Investments held in Trust
|
163,270
|
|
146,517
|
|
||
Letters of credit (1)
|
7,748
|
|
7,982
|
|
||
Surety bonds (2)
|
19,524
|
|
20,440
|
|
||
Total collateral commitments
|
$
|
249,551
|
|
$
|
235,846
|
|
(1)
|
We have agreements with certain financial institutions to issue letters of credit as collateral.
|
(2)
|
Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which is determined by each independent surety carrier. These fees do not exceed
2.0%
of the bond amount, subject to a minimum charge. The terms of these bonds are subject to review and renewal every
one
to
four
years and most bonds can be canceled by the sureties with as little as
60
days’ notice.
|
(in thousands)
|
October 1, 2017
|
January 1, 2017
|
||||
Total workers’ compensation reserve
|
$
|
279,335
|
|
$
|
277,351
|
|
Add back discount on workers’ compensation reserve (1)
|
16,634
|
|
14,818
|
|
||
Less excess claims reserve (2)
|
(50,655
|
)
|
(52,930
|
)
|
||
Reimbursable payments to insurance provider (3)
|
14,736
|
|
10,193
|
|
||
Less portion of workers’ compensation not requiring collateral (4)
|
(10,499
|
)
|
(13,586
|
)
|
||
Total collateral commitments
|
$
|
249,551
|
|
$
|
235,846
|
|
(1)
|
Our workers’ compensation reserves are discounted to their estimated net present value while our collateral commitments are based on the gross, undiscounted reserve.
|
(2)
|
Excess claims reserve includes the estimated obligation for claims above our deductible limits. These are the responsibility of the insurance carriers against which there are no collateral requirements.
|
|
(3)
|
This amount is included in restricted cash and represents a timing difference between claim payments made by our insurance carrier and the reimbursement from cash held in the Trust. When claims are paid by our carrier, the amount is removed from the workers’ compensation reserve but not removed from collateral until reimbursed to the carrier.
|
(4)
|
Represents deductible and self-insured reserves where collateral is not required.
|
•
|
changes in medical and time loss (“indemnity”) costs;
|
•
|
changes in mix between medical only and indemnity claims;
|
•
|
regulatory and legislative developments impacting benefits and settlement requirements;
|
•
|
type and location of work performed;
|
•
|
the impact of safety initiatives; and
|
•
|
positive or adverse development of claims.
|
|
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4.
|
CONTROLS AND PROCEDURES
|
|
Item 1.
|
LEGAL PROCEEDINGS
|
Item 1A.
|
RISK FACTORS
|
|
|
|
|
Item 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
Total number
of shares
purchased (1)
|
Weighted
average price
paid per
share (2)
|
Total number of shares
purchased as part of
publicly announced plans
or programs (3)
|
Maximum number of shares (or
approximate dollar value) that
may yet be purchased under
plans or programs at period
end (4)
|
||||
07/03/2017 through 07/30/2017
|
79
|
|
|
$27.90
|
|
—
|
|
$13.9 million
|
07/31/2017 through 09/03/2017
|
1,598
|
|
|
$22.20
|
|
444,440
|
|
$5.0 million
|
09/04/2017 through 10/01/2017
|
2,179
|
|
|
$20.55
|
|
237,413
|
|
$100.0 million
|
Total
|
3,856
|
|
|
$21.38
|
|
681,853
|
|
|
(1)
|
During the
thirty-nine weeks ended
October 1, 2017
, we purchased
3,856
shares in order to satisfy employee tax withholding obligations upon the vesting of restricted stock awards and performance share units. These shares were not acquired pursuant to any publicly announced purchase plan or program.
|
(2)
|
Weighted average price paid per share does not include any adjustments for commissions.
|
(3)
|
The weighted average price per share for the shares repurchased under our prior share repurchase program during the period was
$20.30
.
|
(4)
|
In September 2017, we repurchased the remaining
$13.9 million
available under our
$75.0 million
share repurchase program. On September 15, 2017, our Board of Directors authorized a $100 million share repurchase program of our outstanding common stock. The share repurchase program does not obligate us to acquire any particular amount of common stock and does not have an expiration date. There have been no repurchases under this new program during the
thirteen weeks ended
October 1, 2017
.
|
Item 5.
|
OTHER INFORMATION
|
•
|
clarify the Board’s right to postpone, reschedule or cancel previously scheduled annual meetings of shareholders;
|
•
|
provide for additional disclosure and other requirements for advance notices of director nominations and shareholder proposals;
|
•
|
specify the powers of the chairman of a shareholder meeting over the conduct of such meeting;
|
•
|
specify the requirements for written and electronic notice under the Bylaws.
|
|
Item 6
|
EXHIBITS
|
|
|
|
TrueBlue, Inc.
|
|
|
|
|
|
|
|
|
|
/s/ Steven C. Cooper
|
10/30/2017
|
|
|
|
Signature
|
Date
|
|
|
By:
|
Steven C. Cooper, Director and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
/s/ Derrek L. Gafford
|
10/30/2017
|
|
|
|
Signature
|
Date
|
|
|
By:
|
Derrek L. Gafford, Chief Financial Officer and
Executive Vice President
|
|
|
|
|
|
|
|
|
|
/s/ Norman H. Frey
|
10/30/2017
|
|
|
|
Signature
|
Date
|
|
|
By:
|
Norman H. Frey, Chief Accounting Officer and
Senior Vice President |
|
|
|
|
|
/s/ James E. Defebaugh
|
|
|
|
|
|
James E. Defebaugh
|
|
|
Secretary
|
1.
|
I have reviewed this
Quarterly
Report on Form
10-Q
of TrueBlue, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Steven C. Cooper
|
Steven C. Cooper
|
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this
Quarterly
Report on Form
10-Q
of TrueBlue, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Derrek L. Gafford
|
Derrek L. Gafford
|
Chief Financial Officer (Principal Financial Officer)
|
(1)
|
The
Quarterly
Report of the Company on Form
10-Q
, for the fiscal period ended
October 1, 2017
(the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
/s/ Steven C. Cooper
|
|
/s/ Derrek L. Gafford
|
Steven C. Cooper
|
|
Derrek L. Gafford
|
Chief Executive Officer
|
|
Chief Financial Officer
|
(Principal Executive Officer)
|
|
(Principal Financial Officer)
|