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Key takeaways from the earnings call:
TrueBlue’s CFO, Derrek Gafford, discussed the challenges in providing guidance due to the lack of visibility in the staffing industry. He highlighted that while July’s performance was as expected, revenue declined in August, particularly in the retail, transportation, and manufacturing sectors. However, September showed signs of improvement, with most verticals surpassing their sequential revenue run rate. Looking ahead to the fourth quarter, Gafford anticipates that trends will continue based on the last five weeks of performance.
TrueBlue has significantly focused on cost management actions, cutting $35 million in costs this year and reducing its workforce by 1,200 employees. The company finished the quarter with no debt, $47 million in cash, and over $120 million of borrowing availability. Gafford also discussed further cost management plans, including lowering service delivery costs through centralization, process improvements, and technology actions by 2024.
The company’s cash flow and cash usage prioritization is focused on investing back into the business, particularly in technology for digital transformation. TrueBlue plans to maintain a strong balance sheet and return capital to shareholders, with the possibility of share repurchases and future acquisitions. The company also announced the addition of a new Chief People Officer, Greg Netolicky.
TrueBlue has made several improvements to its app and platform, including the ability for associates to approve time directly in the app, which saves time and allows for quicker payment. They have also improved job searching capabilities and visibility for internal staff. The company expects a rebound in free cash flow in the fourth quarter and aims to maintain a margin of 10% or higher.
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