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What changed in TrueBlue, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of TrueBlue, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+275 added−238 removedSource: 10-K (2024-02-21) vs 10-K (2023-02-15)

Top changes in TrueBlue, Inc.'s 2023 10-K

275 paragraphs added · 238 removed · 186 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

57 edited+16 added−10 removed29 unchanged
Biggest changeDuring 2022, our employees completed nearly 37,000 training courses. Supplementing our Full Performance program, we launched an enterprise-wide Global Mentorship Program in 2020. The program is designed to pair mentees with mentors based on a common area of interest for personal and professional development.
Biggest changeThe program is designed to pair mentees with mentors based on a common area of interest for personal and professional development. In 2022, we introduced the Diversity, Equity & Inclusion stream, which gave employees the opportunity to be paired based on alignment with common personal characteristics. In 2022, we launched the Leadership BluePrint program, available to all global people leaders.
The Council sponsors training to build diversity and inclusion awareness, and supports our Employee Resource Groups (“ERGs”). ERGs are employee-led groups that create opportunities for employees to collaborate based on shared characteristics or life experiences to support each other for enhanced career and personal development.
The Council sponsors training to build diversity and inclusion awareness, and supports our Employee Resource Groups (“ERGs”). Our ERGs are employee-led groups that create opportunities for employees to collaborate based on shared characteristics or life experiences to support each other for enhanced career and personal development.
The fragmented talent technology ecosystem is becoming more crowded, with significant investments flowing in and new technology coming online rapidly. Associates are demanding more flexibility in how, when and where they work, as well as access to contingent work opportunities through mobile technology. Available associates are in high demand and have more power to find the employment situation they desire.
The fragmented talent technology ecosystem is becoming more crowded, with significant investments flowing in and new technology coming online. Associates are demanding more flexibility in how, when and where they work, as well as access to contingent work opportunities through mobile technology. Available associates are in high demand and have more power to find the employment situation they desire.
Client contracts are generally multi-year in duration and pricing is typically composed of a fee for each hire and talent consulting fees. Pricing is impacted by factors such as geography, volume, job type, degree of recruiting difficulty, and the scope of outsourced recruitment and employer branding services included.
Client contracts are generally multi-year in duration and pricing is typically composed of a fee for each hire and/or talent consulting fees. Pricing is impacted by factors such as geography, volume, job type, degree of recruiting difficulty, and the scope of outsourced recruitment and employer branding services included.
The human resource outsourcing industry includes our RPO and MSP businesses, which allow clients to more effectively find and engage high-quality talent, leverage talent acquisition technology and scale their talent acquisition function to keep pace with changing business needs.
The human resource outsourcing industry includes our RPO and MSP services, which allow clients to more effectively find and engage high-quality talent, leverage talent acquisition technology and scale their talent acquisition function to keep pace with changing business needs.
We have developed an integrated risk management program that focuses on loss analysis, education and safety improvement programs to reduce the risk of injury to our associates. We designed an employee incentive compensation program tied to metrics that promote associate safety.
We have developed an integrated risk management program that focuses on loss analysis, education and safety improvement programs to reduce the risk of injury to our associates. We implemented an employee incentive compensation program tied to metrics that promote associate safety.
To assess and improve our culture, we utilize an independent third-party to measure how favorably our employees view our organizational culture and engagement. These surveys include corporate culture assessments, as well as feedback on employee engagement and employee-management relations.
To assess and improve our culture, we utilize an independent third-party survey provider to measure how favorably our employees view our organizational culture and engagement. These surveys include corporate culture assessments, as well as feedback on employee engagement and employee-management relations.
PeopleScout also includes our MSP business, which manages our clients’ contingent labor programs including vendor selection, performance management, compliance monitoring and risk management. As the client’s exclusive MSP, we have dedicated service delivery teams, which work as an integrated partner with our clients to increase the productivity of their contingent workforce program.
PeopleScout also includes our managed service provider (“MSP”) business, which manages our clients’ contingent labor programs including vendor selection, performance management, compliance monitoring and risk management. As the client’s exclusive MSP, we have dedicated service delivery teams, which work as an integrated partner with our clients to increase the productivity of their contingent workforce program.
The most significant competitive factors for RPO services are the ability to attract top talent, reduce cost per hire, improve retention, deploy best-in-class technology solutions and improve employment branding.
The most significant competitive factors for RPO services are the ability to attract top talent, reduce cost per hire, improve retention, deploy best-in-class technology solutions and improve employer branding.
Our tailored solutions, client partnerships, proprietary technologies and service delivery are key differentiators from many of our competitors. CLIENTS Our clients range from small businesses to Fortune 100 companies. During fiscal 2022, we served approximately 84,000 clients in industries including construction, manufacturing and logistics, warehousing and distribution, waste and recycling, energy, transportation, retail, hospitality and general labor.
Our tailored solutions, client partnerships, proprietary technologies and service delivery are key differentiators from many of our competitors. CLIENTS Our clients range from small businesses to Fortune 100 companies. During fiscal 2023, we served approximately 67,000 clients in industries including construction, manufacturing and logistics, warehousing and distribution, waste and recycling, energy, transportation, retail, hospitality and general labor.
ERGs seek to maximize employee engagement and contribute to our overall business objectives by offering diverse perspectives, networking opportunities and increased cultural awareness. We have eight ERGs for employees sharing similar ethnicity, nationality, gender, or life experience and their respective allies. Through these initiatives, we learn how our differences build stronger teams and how our histories reveal similarities.
These ERGs seek to maximize employee engagement and contribute to our overall business objectives by offering diverse perspectives, networking opportunities and increased cultural awareness. We have nine ERGs for employees sharing similar ethnicity, nationality, gender, or life experiences and their respective allies. Through these initiatives, we learn how our differences build stronger teams and how our histories reveal similarities.
In fiscal 2022, PeopleReady provided approximately 83,000 clients with dependable access to qualified associates for their on-demand, contingent general and skilled labor needs to supplement their permanent workforce. Our services range from providing one associate to hundreds, and are generally short-term in nature as they are filling the contingent staffing needs of our clients.
In fiscal 2023, PeopleReady provided approximately 66,000 clients with dependable access to qualified associates for their on-demand, contingent general and skilled labor needs to supplement their permanent workforce. Our services range from providing one associate to hundreds, and are generally short-term in nature as they are filling the contingent staffing needs of our clients.
BUSINESS STRATEGY Our business strategy is focused on growth in each of our business segments by investing in innovative technology and initiatives that drive organic growth and improve the client and candidate experience. Our clients have a variety of challenges in running their businesses, each of which are unique to the competitive pressures of their industries.
BUSINESS STRATEGY Our business strategy is focused on investing in innovative technology and initiatives that will drive organic growth and improve the client, candidate and associate experience. Our clients have a variety of challenges in running their businesses, each of which are unique to the competitive pressures of their industries.
We believe we derive a competitive advantage from our service history, our specialized approach in serving the industries of our clients, and our mobile apps, which connect associates with jobs and create virtual exchanges between our associates and clients.
We have a competitive advantage from our service history, our specialized approach in serving the industries of our clients, and our mobile apps, which connect associates with jobs and create virtual exchanges between our associates and clients.
Centerline offers three solutions for clients: Our Flexible Drivers solution, which is an on-demand service helping clients find drivers where and when they need them; our Driver Management Services solution, which offers fully outsourced recruitment, management and supervision of drivers for a client; and our Mobile Drivers solution, which provides short-term relocation of qualified, experienced drivers for special projects or to high-need markets or remote locations where drivers are unavailable.
Centerline offers three solutions for clients: • Flexible Drivers solution: On-demand service helping clients find drivers where and when they need them. • Driver Management Services solution: Fully outsourced recruitment, management and supervision of drivers for a client. • Mobile Drivers solution: Short-term relocation of qualified, experienced drivers for special projects or to high-need markets or remote locations where drivers are unavailable.
Our business segments are industry leaders dedicated to workforce solutions tailored to our clients’ needs and the industries in which they operate.
Our business segments are dedicated to workforce solutions tailored to our clients’ needs and the industries in which they operate.
We have a network of approximately 600 branches across all 50 states in the U.S., Canada and Puerto Rico. Augmenting our branch network and consolidated service centers is our industry-leading mobile app, JobStack TM , which connects people with work 24 hours a day, seven days a week.
We have a network of approximately 600 branches across all 50 states in the United States (“U.S.”), Canada and Puerto Rico. Augmenting our branch network and consolidated service centers is our industry-leading mobile app, JobStack ® , which connects people with work 24 hours a day, seven days a week.
Item 1. BUSINESS OUR COMPANY TrueBlue, Inc. (the “company,” “TrueBlue,” “we,” “us” and “our”) is a leading provider of specialized workforce solutions that help our clients improve productivity and grow their businesses. We began operations in 1989 and are headquartered in Tacoma, Washington. BUSINESS OVERVIEW In 2022, we connected approximately 611,000 people with work and served approximately 84,000 clients.
Item 1. BUSINESS OUR COMPANY TrueBlue, Inc. (the “company,” “TrueBlue,” “we,” “us” and “our”) is a leading provider of specialized workforce solutions that help our clients improve productivity and grow their businesses. We began operations in 1989 and are headquartered in Tacoma, Washington. BUSINESS OVERVIEW In 2023, we connected approximately 464,000 people with work and served approximately 67,000 clients.
Page - 5 Table of Contents Our workforce solutions address the following key industry and market trends contributing to anticipated growth: • Workforce flexibility and scalability: The staffing industry continues to experience dynamic shifts between the permanent and flexible workforce based on competitive and economic pressures to reduce costs, seasonal demands and in response to rapidly changing market conditions.
Our workforce solutions address the following key industry and market trends contributing to anticipated growth: • Workforce flexibility and scalability: The staffing industry continues to experience dynamic shifts between the permanent and flexible workforce based on competitive and economic pressures to reduce costs, seasonal demands, and in response to rapidly changing market conditions.
We ensure our differentiated solutions keep pace with the changing needs of our clients while driving growth through the following strategies: • We continue to invest in technology to gain market share, accelerate revenue growth, reduce the cost of delivering our services, and increase our ability to attract and retain clients, employees and associates.
We ensure our differentiated solutions keep pace with the changing needs of our clients while driving growth through the following strategies: • We continue to invest in technology to accelerate revenue growth, reduce the cost of delivering our services, and increase our ability to attract and retain clients, candidates and associates.
Page - 7 Table of Contents Human resource outsourcing Our strongest competitors are companies who specialize in RPO services, as well as companies who offer broader human resource outsourcing solutions, which include RPO services. No single provider dominates the market. Competition also includes companies that choose to perform recruiting in-house.
Human resource outsourcing Our strongest competitors are companies who specialize in RPO services, as well as companies who offer broader human resource outsourcing solutions, which include RPO services. No single provider dominates the market. Competition also includes companies that choose to perform recruiting in-house.
As a consequence, our revenue from services tends to increase quickly when the economy begins to grow. Conversely, our revenue from services decreases quickly when the economy begins to weaken and contingent staff positions are eliminated, permanent hiring is frozen, and turnover replacement diminishes. Our business experiences seasonal fluctuations for contingent staffing services.
As a consequence, our revenue tends to increase quickly when the economy begins to grow. Conversely, our revenue decreases quickly when the economy begins to weaken and contingent staff positions are eliminated, permanent hiring is frozen, and turnover replacement diminishes. Page - 8 Table of Contents Our business experiences seasonal fluctuations for contingent staffing services.
The productivity-based pricing leverages a strategically engineered on-site solution to incentivize performance improvements in cost, quality and on-time delivery using a fixed price-per-unit approach. Both hourly and productivity-based pricing are impacted by factors such as geography, volume, job type and degree of recruiting difficulty.
We offer hourly and productivity-based (cost-per-unit) pricing options for industrial staffing solutions. The productivity-based pricing leverages a strategically engineered on-site solution to incentivize performance improvements in cost, quality and on-time delivery using a fixed price-per-unit approach. Both hourly and productivity-based pricing are impacted by factors such as geography, volume, job type and degree of recruiting difficulty.
Our proprietary technology platform (Affinix TM ) uses artificial intelligence and machine learning to rapidly source a qualified talent pool within minutes rather than days, and further engages candidates through a seamless digital experience. Affinix provides real-time insights into our clients, helping our dedicated service delivery teams efficiently and effectively manage the entire recruitment process.
Our proprietary technology platform, Affinix ® , uses machine learning to rapidly source a qualified talent pool within minutes, and further engages candidates through a seamless digital experience. Affinix provides real-time insights to our clients, helping our dedicated service delivery teams efficiently and effectively manage the entire recruitment process.
We continue to make significant investments in technology to improve the access, speed and ease of connecting our clients with high-quality contingent and permanent employee workforce solutions. ◦ Augmenting our PeopleReady branch network is our JobStack platform, which connects our associates and clients through a real-time 24 hours a day, seven days a week digital exchange with an easy-to-use mobile app.
Our technological innovations improve the access, speed and ease of connecting our clients with high-quality contingent and permanent employee workforce solutions. ◦ Augmenting our PeopleReady branch network is our JobStack platform, which connects our associates and clients through a real-time 24 hours a day, seven days a week digital exchange with an easy-to-use mobile app.
Client demand for contingent staffing services is dependent on the overall strength of the economy, specific industry and sector performance, and workforce flexibility trends. This creates volatility for the staffing industry based on overall economic conditions.
Client demand for contingent staffing services is heavily influenced by the overall strength of the economy and labor market, specific industry and sector performance, and workforce flexibility trends. This creates volatility for the staffing industry based on overall economic conditions.
Our ten largest clients accounted for 19.2% of total revenue for fiscal 2022, 17.2% for fiscal 2021 and 19.0% for fiscal 2020. Our single largest client for fiscal 2022 accounted for 3.1% of total company revenue. No single client represented more than 10.0% of total company revenue for fiscal 2022, 2021 or 2020.
Our ten largest clients accounted for 20.5% of total revenue for fiscal 2023, 19.2% for fiscal 2022 and 17.2% for fiscal 2021. No single client represented more than 10.0% of total company revenue for fiscal 2023, 2022 or 2021.
We compete primarily with local and regional companies, as well as internet-based companies providing a variety of flexible workforce solutions. The strongest staffing services competitor in a particular market is a company with established relationships and a track record of meeting the clients’ needs.
No single company has a dominant share of the industry. We compete primarily with local and regional companies, as well as online and app-based companies providing a variety of flexible workforce solutions. The strongest staffing services competitor in a particular market is a company with established relationships and a track record of meeting the clients’ needs.
We are considered the legal employer of our associates, and laws regulating the employment relationship are applicable to our operations. We believe we have an overall positive relationship with our associates. Page - 10 Table of Contents Safety We remain committed to associate safety.
We are considered the legal employer of our associates, and laws regulating the employment relationship are applicable to our operations. We believe we have an overall positive relationship with our associates. Safety We are committed to our associates’ safety.
PeopleReady connected approximately 220,000 people with work in fiscal 2022 within a broad range of industries that include construction, transportation, manufacturing, retail, hospitality and renewable energy. We connected individuals looking for general temporary, temp-to-hire and skilled trade positions with our vast network of clients.
Our operations are managed as three business segments: PeopleReady, PeopleScout and PeopleManagement. PeopleReady connected approximately 195,000 people with work in fiscal 2023 within a broad range of industries that included construction, transportation, manufacturing, retail, hospitality and renewable energy. We connected individuals looking for general temporary, temp-to-hire and skilled trade positions with our vast network of clients.
Today, 75% of our Board is comprised of members from under-represented groups. As of December 25, 2022, approximately 65% of our global FTE employee population and 50% of our directors and above were female. Approximately 50% of our total domestic FTE employee population and 20% of our directors and above consider themselves ethnically diverse.
Today, 78% of our Board is comprised of members from under-represented groups. As of December 31, 2023, approximately 64% of our global FTE employee population and 48% of our directors and above were female. Approximately 48% of our total domestic FTE employee population and 19% of our directors and above consider themselves ethnically diverse.
Page - 4 Table of Contents Our PeopleScout business, a global leader in RPO services, connected approximately 335,000 people with work in fiscal 2022. Our RPO solutions are multi-year in duration, highly scalable and provide clients the support they need as their hiring volumes fluctuate.
Page - 4 Table of Contents PeopleScout, a global leader in recruitment process outsourcing (“RPO”) services, connected approximately 224,000 people with work in fiscal 2023, primarily in the U.S., Canada, the United Kingdom and Australia. Our RPO solutions are generally multi-year in duration, highly scalable and provide clients the support they need as their hiring volumes fluctuate.
The Code applies to members of the Board of Directors (the “Board”), officers and all other employees who work for TrueBlue and its affiliates worldwide. We require all of our employees to complete our Code training, as well as courses about sexual harassment awareness and prevention.
The Code applies to members of the Board, officers and all other employees who work for TrueBlue and its affiliates worldwide. We require all of our employees to complete our Code training, as well as courses about sexual harassment awareness and prevention and cybersecurity awareness. Culture and engagement We believe a strong corporate culture includes an emphasis on employee engagement.
While we believe we have assembled a diverse internal employee workforce, we are committed to making further improvements. Health and wellness We provide our employees and their families with flexible health and wellness programs, including competitive benefits. Our benefits include health, dental and vision insurance, health savings and flexible spending accounts, paid time off, family leave, and family care resources.
While we believe we have assembled a diverse internal employee workforce, we are committed to making further improvements. Health and wellness We provide our employees and their families with flexible health and wellness programs, including competitive benefits.
JobStack creates a digital exchange between our associates and clients, and allows our branch resources to expand their recruiting, sales and service delivery efforts. JobStack is competitively differentiating our services, expanding our reach into new demographics, and improving our service delivery and fill rates, as we continue to execute our digital strategy.
JobStack enables our branches to expand their recruiting and sales efforts. JobStack is competitively differentiating our services, expanding our reach into new demographics, and improving both service delivery and work order fill rates as we continue to execute our digital strategy.
The skills, experience and industry knowledge of our employees significantly benefit our operations and performance. As of December 25, 2022, we employed approximately 6,500 full-time equivalent (“FTE”) employees. We have approximately 4,900 FTE employees in North America, of which approximately 96% are in the U.S., 1,200 FTE employees in Asia Pacific, and 400 FTE employees in Europe.
The skills, experience and industry knowledge of our employees significantly benefit our operations and performance. As of December 31, 2023, we employed approximately 5,000 full-time equivalent (“FTE”) employees. We have approximately 3,700 FTE employees in North America, of which approximately 97% are in the U.S., 1,000 FTE employees in Asia Pacific, and 300 FTE employees in Europe.
Developing our people In order to retain talented employees, our Full Performance program focuses on personal development and career growth through setting and monitoring performance goals, continuous learning, and the creation of internal career opportunities. Employees create individual development plans, identify specific skill gaps and development goals, and chart a path for career growth.
Page - 9 Table of Contents Developing our people In order to retain talented employees, our Full Performance program focuses on personal development and career growth through setting and monitoring performance goals, continuous learning, and the creation of internal career opportunities.
Culture and engagement We believe a strong corporate culture includes an emphasis on employee engagement. As we have continued to utilize a hybrid work model, we have utilized live and recorded video town hall meetings to ensure employees throughout the company remain engaged, connected to leadership, and focused on our values and business strategies.
As we have continued to maintain remote and hybrid work models, we have utilized live virtual and recorded video town hall meetings to ensure employees throughout the company remain engaged, connected to leadership, and focused on our values and business strategies.
Page - 6 Table of Contents ◦ Augmenting our PeopleScout dedicated service delivery teams is our Affinix platform used for sourcing, screening and delivering a permanent workforce to our clients. Affinix creates a consumer-like candidate experience and streamlines the sourcing process.
We continue to expand and build functionality within the mobile app to enhance the overall driver experience. ◦ Augmenting our PeopleScout dedicated service delivery teams is our Affinix platform used for sourcing, screening and delivering a permanent workforce to our clients. Affinix creates a consumer-like candidate experience and streamlines the sourcing process.
We use a variety of proprietary programs and methods for identifying and assessing the skill level of our associates when selecting a particular individual for a specific assignment and retaining those associates for future assignments.
This enables our clients to obtain immediate value by placing a highly productive employee on the job site. We use a variety of proprietary programs and methods for identifying and assessing the skill level of our associates when selecting a particular individual for a specific assignment and retaining those associates for future assignments.
Our PeopleReady JobStack and PeopleManagement Stafftrack mobile apps are helping to competitively differentiate our services, expand our reach into new demographics, and improve our recruiting, sales and service delivery.
Our JobStack and Stafftrack mobile apps are competitively differentiating our services, expanding our reach into new demographics, and improving our recruiting, sales and service delivery.
None of our permanent employees are represented by a labor union. We have not experienced work stoppages and believe that our employee relations are in good standing, as evidenced by our semi-annual employee engagement survey results. Our Compensation Committee of the Board of Directors regularly receives reports regarding the progress on our key human capital initiatives.
None of our permanent employees are represented by a labor union. We have not experienced work stoppages and believe that our employee relations are in good standing, as evidenced by our periodic employee engagement survey results.
In 2022, we launched live unconscious bias training for employees facilitated by our Chief Diversity Officer. Our focus on diversity, equity and inclusion creates an environment where every employee can experience merit-based career growth, receive the training and development they need to succeed, gain access to new opportunities, and be their authentic selves.
In 2023, we launched the Global Culture Awareness campaign, which focused on the unique cultures of six countries we operate in. Our focus on diversity, equity and inclusion creates an environment where every employee can experience merit-based career growth, receive the training and development they need to succeed, gain access to new opportunities, and be their authentic selves.
The results of these surveys are reported and distributed throughout management and the Board, and are used to create actionable plans to improve employee engagement and retention. Our October 2022 survey achieved an engagement score of 78, consistent with our October 2021 survey, which exceeds the benchmark score of 75 set by the independent third-party survey provider.
The results of these surveys are reported and distributed throughout management and the Board, and are used to create actionable plans to improve employee engagement and retention. Our August 2023 survey delivered an engagement score of 77, which exceeded the target benchmark score of 74 set by the survey provider.
Stafftrack has robust, near real-time analytics that drive dynamic supply chain and workforce strategies, which allow clients faster, more precise hiring and help drive operational improvements and efficiencies.
Stafftrack is a proprietary hiring and workforce management software that enables us to recruit and connect the best candidates with on-site assignments. Stafftrack has robust, near real-time analytics that drive dynamic supply chain and workforce strategies, which allow clients faster, more precise hiring and help drive operational improvements and efficiencies.
PeopleManagement connected approximately 56,000 people with work in fiscal 2022. Our On-Site business provides and manages contingent associates at clients’ facilities through our Staff Management | SMX (“Staff Management”) and SIMOS Insourcing Solutions (“SIMOS”) branded services. Our client engagements are generally multi-location and multi-year, and include scalable recruiting, screening, hiring and management of the contingent workforce.
PeopleManagement connected approximately 45,000 people with work in fiscal 2023. Our On-Site business provides and manages contingent associates at clients’ facilities through our Staff Management | SMX (“Staff Management”) and SIMOS Insourcing Solutions (“SIMOS”) branded services throughout the U.S., Canada and Puerto Rico.
We aim to strengthen skills that transfer across roles, business segments and functions. Managers meet regularly with employees to discuss their plans, and yearly assessments provide a formal process for tracking progress. This standardized process also ensures employees in similar positions are similarly evaluated.
Employees are encouraged to create individual development plans, identify specific skill gaps and development goals, and chart a path for career growth. We aim to strengthen skills that transfer across roles, business segments and functions. Managers meet regularly with employees to discuss their plans, and yearly assessments provide a formal process for tracking progress.
Staffing companies act as intermediaries to match available associates with employer work assignments. Work assignments vary widely in duration, skill level and required experience. The human resource outsourcing industry, which includes our PeopleScout services, involves transitioning various functions handled by internal human resources and labor procurement to outside service providers on a permanent or project basis.
The human resource outsourcing industry, which includes our PeopleScout business, involves transitioning various functions handled by internal human resources and labor procurement departments to outside service providers on a permanent or project basis.
Once operational, we deploy dedicated management and service teams that work side-by-side with a client’s full-time workforce. Our teams are an integral part of the production and logistics process, and specialize in labor-intensive manufacturing, warehousing and distribution. We offer hourly and productivity-based (cost-per-unit) pricing options for industrial staffing solutions.
Our client engagements are generally multi-location and multi-year, and include scalable recruiting, screening, hiring and management of the contingent workforce. We deploy dedicated management and service teams that work side-by-side with a client’s full-time workforce. Our teams are an integral part of the production and logistics process, and specialize in labor-intensive manufacturing, warehousing and distribution.
Our working capital requirements are primarily driven by our associate payroll and client accounts receivable. Since receipts from clients lag payroll to associates, working capital requirements increase substantially in periods of growth. HUMAN CAPITAL MANAGEMENT Our employees We believe our success as a company depends on our ability to attract, develop and retain talented employees.
Our working capital requirements are primarily driven by our associate payroll and client accounts receivable. Since receipts from clients lag payroll to associates, working capital requirements increase substantially in periods of growth. HUMAN CAPITAL MANAGEMENT TrueBlue is The People Company ® . We specialize in connecting people with work and discovering solutions to our clients’ workforce needs.
Our associates Associates are the individuals who make up our contingent workforce to serve the needs of our staffing clients. We attract our pool of associates through our proprietary mobile apps, online resources, extensive internal databases, advertising, job fairs, community-based organizations and various other methods.
We attract our pool of associates through our proprietary mobile apps, online resources, extensive internal databases, advertising, job fairs, community-based organizations and various other methods. We identify the skills, knowledge, abilities and personal characteristics of our associates and match their competencies and capabilities to our clients’ requirements.
These reports inform discussions regarding the development, retention and engagement of our employees. Some of our key human capital management initiatives are discussed below. Page - 8 Table of Contents Values and ethics Our commitment to certain core values are what we believe attract and more importantly retain individuals who live these values.
Some of our key human capital management initiatives are discussed below. Values and ethics Our commitment to certain core values is what we believe attracts and, more importantly, retains individuals who live these values. Our values are: • Be Optimistic – We believe there is a solution to every problem.
To support employee growth, we provide access to a wide range of training courses to enable more effective onboarding, work performance, compliance and advancement of corporate initiatives. This strategy supports our intent to foster a culture that enables all employees to realize their full professional potential and cultivates a qualified network of future leaders.
This strategy supports our intent to foster a culture that enables all employees to realize their full professional potential and cultivates a qualified network of future leaders. During 2023, our employees completed nearly 21,000 trainings. Supplementing our Full Performance program, we launched an enterprise-wide Global Mentorship Program in 2020.
In fiscal 2021, 58% of completed shifts were dispatched via JobStack. We continue to expand functionality to further leverage this technology to transform our business by reducing expenses, accelerating revenue growth and enhancing our client and associate retention.
Through the new version of JobStack, we will continue to periodically add features and Page - 6 Table of Contents enhancements to expand functionality to further leverage this technology to transform our business by reducing expenses, accelerating revenue growth and enhancing our client and associate retention. ◦ Augmenting our Staff Management and SIMOS dedicated on-site teams is Stafftrack ® .
We will continue to focus our sales and marketing efforts to reach new clients as the demand for outsourced recruiting support increases. COMPETITION Contingent staffing services The staffing industry is large and highly fragmented with large publicly-held companies as well as privately-owned companies on a national, regional and local level. No single company has a dominant share of the industry.
With a more focused structure, we will be better able to leverage our strengths and assets to deliver long-term, profitable growth. Page - 7 Table of Contents COMPETITION Contingent staffing services The staffing industry is large and highly fragmented, including large publicly-held companies as well as privately-owned companies on a national, regional and local level.
We continue to expand and build functionality within the mobile app to enhance the overall driver experience. • We continue to evaluate opportunities to expand our market presence for specialized blue-collar staffing services, expand our geographical reach, provide a broad range of general staffing services, and dispatch our associates without the use of a physical location within our branch network.
We continue to invest in Affinix to further improve our ability to quickly and efficiently source the most attractive talent at the best price. • We continue to evaluate opportunities to expand our market presence for specialized blue-collar staffing services, expand our geographical and industry reach, provide a broad range of general staffing services, and dispatch our associates by leveraging a combination of technology and local market presence.
INDUSTRY AND MARKET DYNAMICS The staffing industry, which includes our PeopleReady and PeopleManagement businesses, supplies contingent workforce solutions to minimize the cost and effort of hiring and managing permanent employees. This allows for rapid response to changes in business conditions through the ability to replace absent employees, fill new positions, and convert fixed or permanent labor costs to variable costs.
This allows for a rapid response to changes in business conditions through the ability to replace absent employees, fill new positions, and convert fixed or permanent labor costs to variable costs. Staffing companies act as intermediaries to match available associates with employer work assignments. Work assignments vary widely in duration, skill level and required experience.
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Our operations are managed as three business segments: PeopleReady, PeopleManagement and PeopleScout. • PeopleReady offers general, industrial and skilled trade staffing throughout the United States of America (“U.S.”), Canada and Puerto Rico. • PeopleScout offers recruitment process outsourcing (“RPO”), talent advisory services and managed service provider (“MSP”) solutions to a wide variety of industries, primarily in the U.S., Canada, the United Kingdom and Australia. • PeopleManagement offers contingent, on-site industrial staffing and commercial driver services throughout the U.S., Canada and Puerto Rico.
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JobStack creates a digital exchange between our associates and clients, competitively differentiates us, and allows our branch resources to expand their sales, recruiting and service delivery efforts.
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We tailor our services based on individual client needs, including sourcing, screening, hiring and onboarding, to improve the candidate experience and regulatory compliance, and ultimately lower their recruiting costs.
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Our services are designed to lower client recruiting costs while improving the candidate experience by creating strategies that facilitate our clients’ talent acquisition, development and retention goals.
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We are committed to leveraging technology to improve the experience of our associates, candidates, clients and permanent employees. Our technological innovations make it easier for our clients to do business with us, and easier to connect associates with work opportunities and candidates to permanent employment opportunities.
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To do so, we tailor our services to individual client needs by offering multiple solutions, including the following: • Full-cycle RPO solution: Provides oversight of the entire talent acquisition strategy, including sourcing, screening, hiring and onboarding of candidates. • Project RPO solution: Brings a full-scale RPO model to solve a specific client challenge for a defined scope of work and time. • Recruiter on demand solution: Provides access to a network of highly-skilled talent acquisition experts, giving clients the option to choose the type of support they need with less cost and complexity than ramping up their internal teams. • Talent advisory solution: Provides employer branding, recruitment marketing, talent insights, diversity, equity and inclusion consulting, candidate assessment services and talent acquisition strategy consulting.
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JobStack enables our branches to expand their recruiting and sales efforts. JobStack is helping to competitively differentiate our services, expand our reach into new demographics, and improve both service delivery and work order fill rates as we continue to execute our digital strategy. Currently 97% of PeopleReady’s associates use JobStack to find on-demand work.
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Page - 5 Table of Contents INDUSTRY AND MARKET DYNAMICS The staffing industry, which includes our PeopleReady and PeopleManagement businesses, plays a key role in many employers’ talent strategies. Staffing companies supply contingent workforce solutions to ensure the best return on talent investment, optimize talent for business circumstances, and reduce the cost and effort of hiring and managing permanent employees.
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By the end of 2022, over 30,000 of our clients were using JobStack to place orders for associates, rate their performance, and approve their time worked, an increase of 2% compared to the prior year. During fiscal 2022, PeopleReady associates completed approximately 3.4 million shifts dispatched via JobStack, which represented 64% of all completed shifts.
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We are in the early stages of launching a new, proprietary version of JobStack that provides a more customized experience for our clients and associates. During fiscal 2023, we made the new JobStack app accessible to a limited number of PeopleReady branches, and will continue the rollout to additional branches in fiscal 2024.
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We continue to invest in Affinix to further improve our ability to quickly and efficiently source the most attractive talent at the best price. ◦ Augmenting our PeopleManagement dedicated on-site contingent workforce management is Stafftrack ® . Stafftrack is a proprietary hiring and workforce management software that enables us to recruit and connect the best candidates with on-site assignments.
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We will continue to focus our sales and marketing efforts to reach new clients as the demand for outsourced recruiting support increases. • Our fiscal 2024 business strategy is focused on accelerating business growth to capture market share, while enhancing our profitability.
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Our values are: • Be Optimistic – We believe there is a solution to every problem.
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Key elements of this strategy include advancement of our digital transformation, expansion in high-growth and under-penetrated end markets, and evaluating and simplifying our operating structure.
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In 2022, we introduced the Diversity, Equity & Inclusion stream, which gave employees the opportunity to be paired based on alignment with common personal characteristics. Page - 9 Table of Contents Diversity, equity and inclusion We are dedicated to fostering, recognizing and embracing diversity at every level of the organization.
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While we will continue to go to market under our current, well-established brands, streamlining our organization will create opportunities to reduce inefficiencies and bring our teams closer to our clients and associates, enabling greater focus on operational excellence, cross-selling and innovation.
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We identify the skills, knowledge, abilities and personal characteristics of our associates and match their competencies and capabilities to our clients’ requirements. This enables our clients to obtain immediate value by placing a highly productive employee on the job site.
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Our team has extensive experience in a variety of industries, and is highly focused on the safety of our workforce. Human capital management is at the heart of what we do every day. Our employees We believe our success as a company depends on our ability to attract, develop and retain talented employees.
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Through our Bridges to Work program, we provide work opportunities for individuals that have been under-represented in the workforce, such as the long-term unemployed or those with challenging backgrounds. Through our Work-Up program, we provide skills training and career development for associates.
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The appropriate committees of the Board of Directors (“Board”) regularly receive reports directly from the Chief People Officer and Chief Diversity Officer regarding the progress on our key human capital initiatives, including updates on diversity, equity and inclusion initiatives and progress. These reports inform discussions regarding the development, retention and engagement of our employees.
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This standardized process also ensures employees in similar positions are similarly evaluated. To support employee growth, we provide access to a wide range of training and development programs to enable more effective onboarding, work performance, compliance and advancement of corporate initiatives.
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In 2023, we offered targeted and bespoke programs to senior leadership teams and select high-potential leaders. These leadership development programs, solutions, and services were designed to build leadership capabilities and behaviors in alignment with our internal competency model. This demonstrates our commitment to growing internal talent, while enhancing leadership proficiency, and positioning TrueBlue leadership for current and future roles.
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Diversity, equity and inclusion We are dedicated to fostering, recognizing and embracing diversity at every level of the organization. Our focus on diversity, equity and inclusion demonstrates that we believe human capital is one of our most valuable assets. We strive to create an environment that supports and values our people.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe loss of our workers’ compensation insurance coverage would prevent us from operating as a staffing services business in the majority of our markets. Further, we cannot be certain that our current and former insurance carriers will be able to pay claims we make under such policies.
Biggest changeWe cannot be certain we will be able to obtain appropriate types or levels of insurance in the future or that adequate replacement policies will be available on acceptable terms. The loss of our workers’ compensation insurance coverage would prevent us from operating as a staffing services business in the majority of our markets.
These claims may harm our reputation, result in financial liability and prevent us from offering some services or products to clients. Page - 16 Table of Contents Our efforts to maintain adequate compliance policies and controls may not prevent violations that could result in significant fines and penalties.
These claims may harm our reputation, result in financial liability or prevent us from offering some services or products to clients. Page - 16 Table of Contents Our efforts to maintain adequate compliance policies and controls may not prevent violations that could result in significant fines and penalties.
The loss of, continued reduction in or substantial decline in revenue from larger clients or certain industries could have a material adverse effect on our revenues, profitability and liquidity. We experience revenue concentration with large clients and in certain industries. Generally, our contracts do not contain guarantees of minimum duration, revenue levels, or profitability.
The loss of, continued reduction in or substantial decline in revenue from larger clients or certain industries could have a material adverse effect on our revenues, profitability and liquidity. We experience a degree of revenue concentration with large clients and in certain industries. Generally, our contracts do not contain guarantees of minimum duration, revenue levels, or profitability.
We cannot guarantee that trade secret, trademark, and copyright law protections are adequate to deter misappropriation of our intellectual property, which is an important part of our business. We may be unable to detect the unauthorized use of our intellectual property and take the necessary steps to enforce our rights.
We cannot guarantee that trade secret, trademark, patent, and copyright law protections are adequate to deter misappropriation of our intellectual property, which is an important part of our business. We may be unable to detect the unauthorized use of our intellectual property and take the necessary steps to enforce our rights.
Our success depends upon our ability to attract, develop and retain a sufficient number of qualified employees, including management, sales, recruiting, service, technology and administrative personnel. The turnover rate in the employment services industry is high, and qualified individuals may be difficult to attract and hire.
Our success depends upon our ability to attract, onboard, develop and retain a sufficient number of qualified employees, including management, sales, recruiting, service, technology and administrative personnel. The turnover rate in the employment services industry is high, and qualified individuals may be difficult to attract and hire.
New business initiatives, including initiatives outside of our workforce solutions business, in new markets, or new geographies, could involve significant unanticipated challenges and risks including not advancing our business strategy, not realizing our anticipated return on investment, experiencing difficulty in implementing initiatives, or diverting management’s attention from our other businesses.
New business initiatives, including initiatives outside of our workforce solutions business, in new end markets, or new geographies, could involve significant unanticipated challenges and risks including not advancing our business strategy, not realizing our anticipated return on investment, experiencing difficulty in implementing initiatives, or diverting management’s attention from our other businesses.
Our associates, candidates and clients increasingly demand technological innovation to improve the access to and delivery of our services. Our clients increasingly rely on automation, artificial intelligence, machine learning and other new technologies to reduce their dependence on labor needs, which may reduce demand for our services and impact our operations.
Our associates, candidates and clients increasingly demand technological innovation to improve the access to and delivery of our services. Our clients increasingly rely on automation, artificial intelligence, generative artificial intelligence, machine learning and other new technologies to reduce their dependence on labor needs, which may reduce demand for our services and impact our operations.
We could also be exposed to fines and penalties under U.S. or foreign laws, such as the Foreign Corrupt Practices Act and/or the UK Anti-Bribery Act, which prohibits improper payments to governmental officials and others for the purpose of obtaining or retaining business.
We could also be exposed to fines and penalties under U.S. or foreign laws, such as the Foreign Corrupt Practices Act and/or the UK Anti-Bribery Act, which prohibit improper payments to governmental officials and others for the purpose of obtaining or retaining business.
We use information technology and other computer resources to carry out operational and support activities and maintain our business records. We rely on information technology systems to process, transmit, and store electronic information and to communicate among our locations around the world and with our clients, partners, associates, and employees.
We use information technology and other computer resources to carry out operational and support activities and maintain our business records. We rely on information technology systems to process, transmit, and store electronic information and to communicate among our locations around the world and with our clients, vendors, associates, and employees.
If general market conditions or wage inflation increase the wage rates required to attract and retain associates, and we are unable to pass those costs through to our clients, it could materially and adversely affect our business.
If general market conditions or wage inflation increases the wage rates required to attract and retain associates, and we are unable to pass those costs through to our clients, it could materially and adversely affect our business.
Our primary computer systems, headquarters, support facilities and operations are vulnerable to damage or interruption from power outages, employee errors, security breaches, natural disasters, extreme weather conditions, civil unrest and catastrophic events.
Our primary technology systems, headquarters, support facilities and operations are vulnerable to damage or interruption from power outages, employee errors, security breaches, natural disasters, extreme weather conditions, civil unrest and catastrophic events.
National and global economic activity is slowed by many factors, including rising interest rates, recessionary periods, inflation, political and legislative changes, international conflict or instability, epidemics, other significant health concerns, and global trade uncertainties. As economic activity slows, companies tend to reduce their use of associates and recruitment of new employees.
National and global economic activity is slowed by many factors, including rising interest rates, recessionary periods, inflation, declining consumer confidence, political and legislative changes, international conflict or instability, epidemics, other significant health concerns, and global trade uncertainties. As economic activity slows, companies tend to reduce their use of associates and recruitment of new employees.
We are subject to the risks associated with the vendors’ inability to provide these services in a manner that meets our needs and the risks associated with changing vendors or in sourcing these aspects of our business.
We are subject to the risks associated with the vendors’ inability to provide these services in a manner that meets our needs and the risks associated with changing vendors or insourcing these aspects of our business.
Failure to constantly improve our technology to meet the expectations of clients, associates, candidates and employees could have a negative impact on our financial position and results of operations. The increased use of internet-based and mobile technology is attracting additional technology-oriented companies and resources to our industry.
Failure to constantly improve our technology to meet the expectations of clients, associates, candidates and employees could have a negative impact on our financial position and results of operations. The increased use of internet-based and mobile technology is attracting additional online and app-based companies and resources to our industry.
Although the Board has authorized a share repurchase program, the share repurchase program does not obligate the company to repurchase any specific dollar amount or to acquire any specific number of shares.
Although the Board has authorized a share repurchase program, the share repurchase program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares.
In addition, if we do not maintain adequate financial, technology, and management personnel, processes and controls, we may not be able to accurately report our financial performance on a timely basis, which could cause our stock price to decline.
In addition, if we do not maintain adequate financial, technology, and management personnel, processes and controls, we may not be able to accurately report our financial performance on a timely basis, or prevent fraud which could cause our stock price to decline.
If we are unsuccessful in executing any of these strategies, or if these strategies fail to address the changing demands of the market, we may not achieve our goal of revenue and profit growth, which could negatively impact financial results. Page - 14 Table of Contents Outsourcing certain aspects of our business could result in disruption and increased costs.
If we are unsuccessful in executing any of these strategies, or if these strategies fail to address the changing demands of the market, we may not achieve our goal of revenue and profit growth, which could negatively impact financial results. Outsourcing certain aspects of our business could result in disruption and increased costs.
A material incident involving system failure, data loss or security breach and the resulting could harm our reputation and subject us to significant monetary damages or losses, litigation, negative publicity, regularity enforcement actions, fines, criminal prosecution, as well as liability under our contracts and laws that protect personal and/or confidential data.
A material incident involving system failure, data loss or security breach could harm our reputation and subject us to significant monetary damages or losses, litigation, negative publicity, regulatory enforcement actions, fines, criminal prosecution, as well as liability under our contracts and laws that protect personal and/or confidential data.
Further, changes in U.S. laws and policies governing foreign investment and use of foreign operations or workers, and any negative sentiments towards the U.S. resulting from such changes, could adversely affect our operations. The price of our common stock may fluctuate significantly, which may result in losses for investors.
Further, changes in U.S. laws and policies governing foreign investment and use of foreign operations or workers, and any negative sentiments towards the U.S. resulting from such changes, could adversely affect our operations. Page - 20 Table of Contents The price of our common stock may fluctuate significantly, which may result in losses for investors.
The potential loss of key executives, employees, clients, suppliers, vendors, and other business partners of businesses we acquire may adversely impact the value of the assets, operations, or business we acquire. These events could cause material harm to our business, operating results or financial condition. We face risks in operating internationally.
The potential loss of key executives, employees, clients, suppliers, vendors, and other business partners of businesses we acquire may adversely impact the value of the assets, operations, or business we acquire. These events could cause material harm to our business, operating results or financial condition.
We may have difficulty integrating acquired companies into our operating, financial planning, and financial reporting systems and may not effectively manage acquired companies to achieve expected growth. Page - 19 Table of Contents Future acquisitions could result in incurring additional debt and contingent liabilities, an increase in interest expense, amortization expense, and charges related to integration costs.
We may have difficulty integrating acquired companies into our operating, financial planning, and financial reporting systems and may not effectively manage acquired companies to achieve expected growth. Future acquisitions could result in incurring additional debt and contingent liabilities, an increase in interest expense, amortization expense, and charges related to integration costs.
Although we have implemented policies and procedures designed to monitor and ensure compliance with these various regulations, we cannot be sure that our employees, contractors, vendors, or agents will not violate such policies. Any such violations could materially damage our reputation, brand, business and operating results.
Although we have implemented policies, procedures and training programs designed to monitor, ensure compliance with and build awareness of these various regulations, we cannot be sure that our employees, contractors, vendors, or agents will not violate such policies. Any such violations could materially damage our reputation, brand, business and operating results.
RISKS RELATED TO OUR FINANCIAL POSITION We cannot guarantee that we will repurchase our common stock pursuant to our share repurchase program or that our share repurchase program will enhance long-term shareholder value. Our Board of Directors (the “Board”) has authorized a share repurchase program.
Page - 14 Table of Contents RISKS RELATED TO OUR FINANCIAL POSITION We cannot guarantee that we will repurchase our common stock pursuant to our share repurchase program or that our share repurchase program will enhance long-term shareholder value. Our Board of Directors (the “Board”) has authorized a share repurchase program.
Further deterioration in economic conditions, as a result of COVID-19, global supply chain issues, political instability, rising energy prices, a recession or fear of a recession, and the related governmental responses to these concerns, or otherwise, could lead to a prolonged decline in demand for our services and negatively impact our business.
A deterioration in economic conditions, global supply chain issues, political instability, rising energy prices, a recession or fear of a recession, and the related governmental responses to these concerns, or otherwise, could lead to a prolonged decline in demand for our services and negatively impact our business.
Page - 17 Table of Contents RISKS RELATED TO CYBERSECURITY, DATA PRIVACY AND INFORMATION SECURITY Cybersecurity vulnerabilities and incidents could lead to the improper disclosure of information about our clients, candidates, associates and employees. Our business requires the use, processing, and storage of confidential information about candidates, associates, employees and clients.
RISKS RELATED TO CYBERSECURITY, DATA PRIVACY AND INFORMATION SECURITY Cybersecurity vulnerabilities and incidents could lead to the improper disclosure of information about our clients, candidates, associates and employees. Our business requires the use, processing, and storage of confidential information about candidates, associates, employees and clients.
Our systems and networks, and the systems and networks of our vendors and clients, are vulnerable to computer viruses, malware, hackers and other security issues, including physical and electronic break-ins, disruptions from unauthorized access and tampering, social engineering attacks, impersonation of authorized users and coordinated denial-of-services attacks.
Our systems and networks, and the systems and networks of our vendors and clients, are vulnerable to computer viruses, malware, ransomware, hackers and other malicious activity, including physical and electronic break-ins, disruptions from unauthorized access and tampering, social engineering attacks, impersonation of authorized users and coordinated denial-of-services attacks.
Our business strategy focuses on driving growth in our PeopleReady, PeopleScout and PeopleManagement business segments by investing in innovative technology and initiatives which drive organic growth. These investments may not achieve our desired results or may be impacted by matters outside of our control.
Our business strategy focuses on driving growth in our business segments by investing in innovative technology and initiatives which drive organic growth. These investments may not achieve our desired results, may be distracting to management or may be impacted by matters outside of our control.
Our competitors offer a variety of flexible workforce solutions. Therefore, there is no assurance that we will be able to retain clients or market share in the future, nor can there be any assurance that we will, in light of competitive pressures, be able to remain profitable or maintain our current profit margins.
Therefore, there is no assurance that we will be able to retain clients or market share in the future, nor can there be any assurance that we will, in light of competitive pressures, be able to remain profitable or maintain our current profit margins.
In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated to the operating performance of listed companies. These broad market and industry factors may impact the price of our common stock, regardless of our operating performance. Item 1B. UNRESOLVED STAFF COMMENTS Not applicable.
In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated to the operating performance of listed companies. These broad market and industry factors may impact the price of our common stock, regardless of our operating performance.
An increasing remote workforce and flexible workplace practices may increase these risks, for example with the use of home networks that may lack encryption or secure password protection.
Even with increased security training, an increasingly remote workforce and flexible workplace practices may increase these risks, for example with the use of home networks that may lack encryption or secure password protection.
We depend on the efforts of our executive officers and certain key personnel. Our failure to develop an adequate succession plan for one or more of our executive officers or other key positions could deplete our institutional knowledge base and erode our competitive advantage during a transition.
Our failure to develop an adequate succession plan for one or more of our executive officers or other key positions could deplete our institutional knowledge base and erode our competitive advantage during a transition.
Managing and cascading these changes throughout the company will continue to require the further attention of our management team and refinements to our operational, financial and management controls, reporting systems and procedures. These activities will require ongoing expenditures and allocation of valuable management and employee resources.
We believe these efforts are important to our long-term success. Managing and cascading these changes throughout the company will continue to require the further attention of our management team and refinements to our operational, financial and management controls, reporting systems and procedures. These activities will require ongoing expenditures and allocation of valuable management and employee resources.
We may continue making acquisitions as part of our business strategy. However this strategy may be impeded and we may not achieve our long-term growth goals if we cannot identify suitable acquisition candidates or if acquisition candidates are not available under acceptable terms.
Acquisitions may have an adverse effect on our business. We may make acquisitions as part of our business strategy. However, this strategy may be impeded and we may not achieve our long-term growth goals if we cannot identify suitable acquisition candidates or if acquisition candidates are not available under acceptable terms.
We have significantly changed our operations and internal processes in recent periods, such as our continued development of technology to leverage our operational effectiveness, and we will continue making similar changes to improve our operational effectiveness. These efforts strain our systems, management, administrative, operations and financial infrastructure. We believe these efforts are important to our long-term success.
We have significantly changed our operations, support center structure and internal processes in recent periods, such as our continued development of technology to leverage our operational effectiveness, and we will continue making similar changes to improve our operational effectiveness. These efforts could strain our systems, management, administrative, operations and financial infrastructure.
We have recently experienced a CEO transition, and could have additional executive leadership changes as part of our overall succession plans. Such leadership transitions can be inherently difficult to manage, and an inadequate transition could cause disruption to our business, including our relationships with our clients and employees. Acquisitions may have an adverse effect on our business.
We have recently experienced a CEO and CFO transition, and could have additional executive leadership changes as part of our overall succession plans. Such leadership transitions can be inherently difficult to manage, and an inadequate transition could cause disruption to our business, including our relationships with our clients and employees and fluctuations in the price of our stock.
Such a shortage of associates and candidates can increase the cost to employ or recruit these individuals, cause us to be unable to fulfill our clients’ needs, and otherwise negatively impact our business.
We have experienced shortages of qualified associates and candidates and may experience such shortages in the future. Such a shortage of associates and candidates can increase the cost to employ or recruit these individuals, cause us to be unable to fulfill our clients’ needs, or otherwise negatively impact our business.
Delayed expansion, significant increases in employee turnover rates, failure to keep our staff healthy or significant increases in labor costs could have a material adverse effect on our business, financial condition and results of operations. Loss of our executive officers or other key personnel or other changes to our management team could disrupt our operations or harm our business.
Significant increases in employee turnover rates, failure to keep our staff healthy or significant increases in labor costs could have a material adverse effect on our business, financial condition and results of operations.
Failure to protect the integrity and security of such confidential and/or proprietary information could expose us to regulatory fines, litigation, contractual liability, damage to our reputation and increased compliance costs. Page - 18 Table of Contents Failure of our information technology systems could adversely affect our operating results.
Failure to protect the integrity and security of such confidential and/or proprietary information could expose us to regulatory fines, litigation, contractual liability, damage to our reputation and increased compliance costs. Failure of our information technology systems could adversely affect our operating results. The efficient operation of our business applications and services we provide is dependent on reliable technology.
Perceptions that we or our vendors do not adequately protect the privacy of information could harm our relationship with clients and employees. Data security, data privacy and data protection laws and other technology regulations increase our costs. Laws and regulations related to privacy and data protection are evolving and generally becoming more stringent.
Perceptions that we or our vendors do not adequately protect the privacy of information could harm our relationship with clients and employees. Page - 18 Table of Contents Data security, data privacy, data protection and artificial intelligence usage laws and other technology regulations increase our costs.
Our workers’ compensation insurance policies are renewed annually. The majority of our insurance policies are with AIG. Our insurance carriers require us to collateralize a significant portion of our workers’ compensation obligation. The majority of our collateral is held in trust by a third-party for the payment of these claims.
Our insurance carriers require us to collateralize a significant portion of our workers’ compensation obligation. The majority of our collateral is held in trust by a third-party for the payment of these claims. The loss or decline in the value of our collateral could require us to seek additional sources of capital to pay our workers’ compensation claims.
Page - 12 Table of Contents We are dependent on obtaining workers’ compensation and other insurance coverage at commercially reasonable terms. Unexpected changes in claim trends on our workers’ compensation or an inability to obtain appropriate insurance coverage may negatively impact our financial condition. Our contingent staffing services employ associates for which we provide workers’ compensation insurance.
Unexpected changes in claim trends on our workers’ compensation or an inability to obtain appropriate insurance coverage may negatively impact our financial condition. Our contingent staffing services employ associates for which we provide workers’ compensation insurance. Our workers’ compensation insurance policies are renewed annually. The majority of our insurance policies are with AIG.
Page - 15 Table of Contents We may have additional tax liabilities that exceed our estimates. We are subject to federal taxes, a multitude of state and local taxes in the United States of America (“U.S.”), and taxes in foreign jurisdictions.
We may have additional tax liabilities that exceed our estimates. We are subject to federal taxes, a multitude of state and local taxes in the United States of America (“U.S.”), and taxes in foreign jurisdictions. Changes in the mix of our taxable income by jurisdiction could have a material impact on our financial condition or results of operations.
Acquiring technological resources and expertise to develop new technologies for our business may require us to incur significant expenses and capital costs. For some solutions, we depend on key vendors and partners to provide technology and support. If these third parties fail to perform their obligations or cease to work with us, our business operations could be negatively affected.
Acquiring technological resources and expertise to develop new technologies for our business may require us to incur significant expenses and capital costs. For some Page - 12 Table of Contents solutions, we depend on key vendors and partners to provide technology and support.
Also, in the ordinary course of our business, there are transactions and calculations where the ultimate tax determination is uncertain. We are regularly subject to audit by tax authorities. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical tax provisions and accruals.
Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical tax provisions and accruals. The results of an audit or litigation with tax authorities could materially harm our business.
We may fail to implement practices and procedures that comply with increasing foreign and domestic privacy regulations, such as the General Data Protection Regulations or the California Consumer Privacy Act. Several additional U.S. states and foreign countries where we operate have issued cybersecurity regulations that outline a variety of required security measures for protection of data.
Several additional U.S. states and foreign countries where we operate have issued cybersecurity and data security regulations that outline a variety of required security measures for protection of data.
The loss or decline in the value of our collateral could require us to seek additional sources of capital to pay our workers’ compensation claims. As our business grows or financial results deteriorate, we have seen the amount of collateral required increase and the timing of providing collateral accelerate, which could occur again in the future.
As our business grows or financial results deteriorate, we have seen the amount of collateral required increase and the timing of providing collateral accelerate, which could occur again in the future. Resources to meet these requirements may not be available.
The wage rates we pay to associates are based on many factors including government-mandated increases to minimum wage requirements, payroll-related taxes and benefits. If we are not able to increase the fees charged to clients to absorb any increased costs related to these factors, our results of operations and financial condition could be adversely affected.
If we are not able to increase the fees charged to clients to absorb any increased costs related to these factors, our results of operations and financial condition could be adversely affected. We may be unable to attract sufficient qualified associates and candidates to meet the needs of our clients.
We rely heavily on proprietary and third-party information technology systems, mobile device technology, data centers, cloud-based environments and other technology.
We rely on our information technology systems to monitor and control our operations, adjust to changing market conditions, implement strategic initiatives and provide services to clients. We rely heavily on proprietary and third-party information technology systems, mobile device technology, data centers, cloud-based environments and other technology.
When unemployment in the U.S. is low, it is challenging to find sufficient eligible associates and candidates to meet our clients’ orders. Government responses to COVID-19, including generous unemployment benefits, stimulus payments and other direct payments to individuals, negatively impacted our ability to recruit qualified associates and candidates.
Government responses to COVID-19, including generous unemployment benefits, stimulus payments and other direct payments to individuals, negatively impacted our ability to recruit qualified associates and candidates. A return to similar benefits in the future could further negatively impact our ability to recruit qualified associates and candidates.
We self-insure, or otherwise bear financial responsibility for, a significant portion of expected losses under our workers’ compensation program.
Further, we cannot be certain that our current and former insurance carriers will be able to pay claims we make under such policies. We self-insure, or otherwise bear financial responsibility for, a significant portion of expected losses under our workers’ compensation program.
We may be unable to attract sufficient qualified associates and candidates to meet the needs of our clients. We compete to meet our clients’ needs for workforce solutions; therefore, we must continually attract qualified associates and candidates to fill positions.
We compete to meet our clients’ needs for workforce solutions; therefore, we must continually attract qualified associates and candidates to fill positions. Attracting qualified associates and candidates depends on factors such as desirability of the assignment, position requirements, location, the associated wages and other benefits.
The results of an audit or litigation with tax authorities could materially harm our business. Failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting.
Failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting or fail to prevent fraud.
Attracting qualified associates and candidates depends on factors such as desirability of the assignment, position requirements, location, the associated wages and other benefits. Many of these factors are outside of our control, including the reputational effects of unfavorable comments on social media outlets about our business or a work site.
Many of these factors are outside of our control, including the reputational effects of unfavorable comments on social media outlets about our business or a work site. When unemployment in the U.S. is low, it is challenging to find sufficient eligible associates and candidates to meet our clients’ orders.
Taxing authorities may challenge our methodologies for valuing intercompany arrangements or may change their laws, which could increase our worldwide effective tax rate and harm our financial position and results of operation. We face continued uncertainty surrounding ongoing hiring tax credits we utilize, and for the recent business tax incentives related to measures taken to soften the impact of COVID-19.
Changes in interpretation of existing laws and regulations by a taxing authority could result in penalties and increased costs in the future. Taxing authorities may challenge our methodologies for valuing intercompany arrangements or may change their laws, which could increase our worldwide effective tax rate and harm our financial position and results of operation.
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Resources to meet these requirements may not be available. We cannot be certain we will be able to obtain appropriate types or levels of insurance in the future or that adequate replacement policies will be available on acceptable terms.
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If these third parties fail to perform their obligations or cease to work with us, our business operations could be negatively affected.
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Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social and governance (“ESG”) practices and disclosures. Our reputation could be associated with our position, or silence, regarding various corporate ESG initiatives, including goals for sustainability, diversity, equity and inclusion.
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The development, adoption, and use of generative artificial intelligence are still in their early stages and ineffective, insufficient, or inadequate development or deployment practices by us or third-party vendors could result in harm to our business, financial condition and results of operations.
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Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, and harm our business.
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For example, algorithms and models utilized by generative artificial intelligence that we use may have limitations, including bias, errors, and the inability to handle certain data sets. Furthermore, there is risk of system failures, disruptions, or vulnerabilities that could compromise the integrity, security, or privacy of generated content.
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Changes in the mix of our taxable income by jurisdiction could have a material impact on our financial condition or results of operations. Changes in interpretation of existing laws and regulations by a taxing authority could result in penalties and increased costs in the future.
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These limitations or failures could result in reputational damage, legal liabilities, or loss of user confidence. Developing, testing, and deploying these systems may require additional investment and increase our costs. We are dependent on obtaining workers’ compensation and other insurance coverage at commercially reasonable terms.
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A return to similar benefits in the future could further negatively impact our ability to recruit qualified associates and candidates. We have experienced shortages of qualified associates and candidates and may experience such shortages in the future.
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We face continued uncertainty surrounding ongoing hiring tax credits we utilize, and for the recent business tax incentives related to measures taken to soften the impact of COVID-19. Also, in the ordinary course of our business, there are transactions and calculations where the ultimate tax determination is uncertain. We are regularly subject to audit by tax authorities.
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The efficient operation of our business applications and services we provide is dependent on reliable technology. We rely on our information technology systems to monitor and control our operations, adjust to changing market conditions, implement strategic initiatives and provide services to clients.
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Page - 15 Table of Contents The Organization for Economic Co-operation and Development (“OECD”) has introduced a framework to implement a global minimum corporate tax of 15%, referred to as “Pillar Two” or “the minimum tax directive.” Many aspects of the minimum tax directive will be effective beginning in fiscal years 2025 and 2026.
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While it is uncertain whether the United States will enact legislation responding to Pillar Two, certain countries in which we operate have or are in the process of adopting minimum tax legislation.
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While we do not currently expect the minimum tax directive to have a material impact on our effective tax rate, our analysis is ongoing as additional guidance is released. It is possible that these legislative changes could have an adverse impact on our effective tax rates or operations.
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From time to time, the contingent staffing industry, in which we operate, has come under criticism from organizations and regulatory agencies which maintain that employment protections, such as wages and benefits, are subverted when clients use our services.
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For example, some states have addressed these concerns by making it more challenging for clients to use our services, or adding additional administrative burden to our industry. Our business is dependent on contingent staffing arrangements continuing to be a viable source of flexible labor for our clients and flexible employment opportunities for our associates.
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If additional jurisdictions adopt regulations to our industry due to pressure from organized labor, political groups, or regulatory agencies, it could have a material adverse impact on our business, results of operations and financial conditions. The wage rates we pay to associates are based on many factors including government-mandated increases to minimum wage requirements, payroll-related taxes and benefits.
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New entrants to the market include online and app-based staffing providers. Our competitors offer a variety of flexible workforce solutions.
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Page - 17 Table of Contents Our business is subject to evolving regulations and stakeholders’ expectations, including environmental, social and governance (“ESG”) matters, that could expose us to numerous risks.
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Institutional, individual and other investors, proxy advisor services, regulatory authorities, clients, employees and other stakeholders are increasingly focused on the ESG practices of companies, including sustainability, diversity, equity and inclusion, human capital management, data privacy and security, supply chains (including human rights issues) and climate change, among other topics.
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Our reputation could be affected by our position, or silence, regarding one or more of these ESG initiatives.
Added
These evolving stakeholder expectations and our efforts and ability to respond to and manage these issues, provide updates on them, and establish and meet appropriate goals, commitments and targets related to ESG initiatives present numerous operational, regulatory, reputational, financial, legal, and other risks and impacts.
Added
Our efforts in this area may result in a significant increase in costs and may nevertheless not meet, or conflict with, investor, client or other stakeholder expectations and evolving standards or regulatory requirements.
Added
Such costs or conflicts may negatively impact our financial results, our reputation, our ability to attract and retain employees, our attractiveness as a service provider, investment or business partner, or may expose us to government enforcement actions, litigation, and actions by shareholders or stakeholders.
Added
Laws and regulations related to privacy, data protection and artificial intelligence usage are evolving and generally becoming more stringent and complex. We may fail to implement practices and procedures that comply with increasing foreign and domestic privacy regulations, such as the General Data Protection Regulations, the European Union Artificial Intelligence Act or the California Consumer Privacy Act.
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Page - 19 Table of Contents Loss of our executive officers or other key personnel or other changes to our management team could disrupt our operations or harm our business. We depend on the efforts of our executive officers and certain key personnel.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe continued to utilize a hybrid work model for the majority of our other employees who continue to work-from-home, while utilizing our support center facilities when necessary or beneficial. Management believes all our facilities are currently suitable for their intended use.
Biggest changeWe continued to utilize a remote or hybrid work model for our headquarters’ and U.S.-based support employees, while utilizing our support center facilities when necessary or beneficial. While management believes all our facilities are currently suitable for their intended use, we continually evaluate our business and facilities and may decide to expand or dispose of facilities in the future.
Item 2. PROPERTIES We lease building space for all our PeopleReady branches, except for two that we own in Florida. In addition, we lease office spaces to support our PeopleManagement operations and PeopleScout centralized support functions. Under the majority of our leases, we have the right to terminate the lease with 90 days’ notice.
Item 2. PROPERTIES We lease building space for all our PeopleReady branches, except for two that we own in Florida. In addition, we lease domestic and international office space to support our operations and centralized support functions. Under the majority of our branch leases, we have the right to terminate the lease with 90 days’ notice.
We do not anticipate any difficulty in renewing these leases or in finding alternative sites in the ordinary course of business. We own an office building in Tacoma, Washington, which serves as our corporate headquarters. During 2022, the majority of our staffing operations’ employees returned to work in branches or on-site facilities.
We do not anticipate any difficulty in renewing these leases or in finding alternative sites in the ordinary course of business. We own an office building in Tacoma, Washington, which serves as our corporate headquarters.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCOMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN (1) Total return analysis 2017 2018 2019 2020 2021 2022 TrueBlue, Inc. $ 100 $ 79 $ 86 $ 70 $ 100 $ 70 S&P SmallCap 600 Index 100 91 112 125 157 133 S&P 1500 Human Resources and Employment Services Index 100 83 102 105 154 117 (1) Graphic prepared by Zacks Investment Research, Inc.
Biggest changeCOMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN (1) Total return analysis 2018 2019 2020 2021 2022 2023 TrueBlue, Inc. $ 100 $ 108 $ 88 $ 127 $ 88 $ 70 S&P SmallCap 600 Index $ 100 $ 123 $ 138 $ 172 $ 147 $ 170 S&P 1500 Human Resources and Employment Services Index $ 100 $ 124 $ 127 $ 186 $ 142 $ 151 (1) Graphic prepared by Zacks Investment Research, Inc.
All indices shown in the graph have been reset to a base of 100 as of December 31, 2017, and assume an investment of $100 on that date and the reinvestment of dividends, if any, paid since that date.
All indices shown in the graph have been reset to a base of 100 as of December 30, 2018, and assume an investment of $100 on that date and the reinvestment of dividends, if any, paid since that date.
Used with permission. All rights reserved. Copyright 1980-2022. Index Data: Copyright Standard and Poor’s, Inc. Used with permission. All rights reserved.
Used with permission. All rights reserved. Copyright 1980-2024. Index Data: Copyright Standard and Poor’s, Inc. Used with permission. All rights reserved.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market information Our common stock is listed on the New York Stock Exchange under the ticker symbol TBI. Holders of the corporation’s common stock We had approximately 387 shareholders of record as of February 8, 2023.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market information Our common stock is listed on the New York Stock Exchange under the ticker symbol TBI. Holders of the corporation’s common stock We had approximately 364 shareholders of record as of February 14, 2024.
Stock repurchases The table below includes repurchases of our common stock pursuant to publicly announced plans or programs and those not made pursuant to publicly announced plans or programs during the thirteen weeks ended December 25, 2022.
Stock repurchases The table below includes repurchases of our common stock pursuant to publicly announced plans or programs and those not made pursuant to publicly announced plans or programs during the fourteen weeks ended December 31, 2023.
Page - 21 Table of Contents TrueBlue stock comparative performance graph The following graph depicts our stock price performance from December 31, 2017 through December 25, 2022, relative to the performance of the S&P SmallCap 600 Index and S&P 1500 Human Resources and Employment Services Index.
Page - 24 Table of Contents TrueBlue stock comparative performance graph The following graph depicts our stock price performance from December 30, 2018 through December 31, 2023, relative to the performance of the S&P SmallCap 600 Index and S&P 1500 Human Resources and Employment Services Index.
The share repurchase program does not obligate us to acquire any particular amount of common stock and does not have an expiration date. As of December 25, 2022, $89.0 million remains available for repurchase under the existing authorization.
The share repurchase program does not obligate us to acquire any particular amount of common stock and does not have an expiration date. As of December 31, 2023, $55.1 million remains available for repurchase under the existing authorization.
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 Approximate dollar value that may yet be purchased under plans or programs at period end (3) 9/26/2022 through 10/23/2022 1,731 $19.08 — $89.0 million 10/24/2022 through 11/20/2022 1,048 $19.66 — $89.0 million 11/21/2022 through 12/25/2022 1,846 $21.22 — $89.0 million Total 4,625 $20.06 — (1) During the thirteen weeks ended December 25, 2022, we purchased 4,625 shares in order to satisfy employee tax withholding obligations upon the vesting of restricted stock.
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 Approximate dollar value that may yet be purchased under plans or programs at period end (3) 09/25/2023 through 10/22/2023 1,279 $14.67 — $55.1 million 10/23/2023 through 11/19/2023 554 $11.40 — $55.1 million 11/20/2023 through 12/31/2023 1,500 $14.70 — $55.1 million Total 3,333 $14.14 — (1) During the fourteen weeks ended December 31, 2023, we purchased 3,333 shares in order to satisfy employee tax withholding obligations upon the vesting of restricted stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changePage - 23 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Total company results The following table presents selected financial data: (in thousands, except percentages and per share data) 2022 % of revenue 2021 % of revenue Revenue from services $ 2,254,184 $ 2,173,622 Gross profit 602,144 26.7 % 560,320 25.8 % Selling, general and administrative expense 500,686 22.2 % 464,322 21.4 % Depreciation and amortization 29,273 1.3 % 27,556 1.3 % Income from operations 72,185 3.2 % 68,442 3.1 % Interest expense and other income, net 1,231 5,408 Income before tax expense 73,416 73,850 Income tax expense 11,143 12,216 Net income $ 62,273 2.8 % $ 61,634 2.8 % Net income per diluted share $ 1.86 $ 1.74 Revenue from services (in thousands, except percentages) 2022 Growth % Segment % of total 2021 Segment % of total Revenue from services: PeopleReady $ 1,272,852 0.2 % 56.5 % $ 1,270,928 58.5 % PeopleScout 317,518 20.8 14.1 262,953 12.1 PeopleManagement 663,814 3.8 29.4 639,741 29.4 Total company $ 2,254,184 3.7 % 100.0 % $ 2,173,622 100.0 % Total company revenue grew 3.7% to $2.3 billion for the fiscal year ended December 25, 2022, compared to the prior year.
Biggest changePage - 26 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Total company results The following table presents selected financial data: (in thousands, except percentages and per share data) 2023 % of revenue 2022 % of revenue Revenue from services $ 1,906,243 $ 2,254,184 Gross profit 506,059 26.5 % 602,144 26.7 % Selling, general and administrative expense 494,603 25.9 500,686 22.2 Depreciation and amortization 25,821 1.4 29,273 1.3 Goodwill and intangible asset impairment charge 9,485 0.5 — — Income (loss) from operations (23,850) (1.3) % 72,185 3.2 % Interest and other income (expense), net 3,205 1,231 Income (loss) before tax expense (benefit) (20,645) 73,416 Income tax expense (benefit) (6,472) 11,143 Net income (loss) $ (14,173) (0.7) % $ 62,273 2.8 % Net income (loss) per diluted share $ (0.45) $ 1.86 Revenue from services (in thousands, except percentages) 2023 Growth % Segment % of total 2022 Segment % of total Revenue from services: PeopleReady $ 1,096,318 (13.9) % 57.5 % $ 1,272,852 56.5 % PeopleScout 229,334 (27.8) % 12.0 317,518 14.1 PeopleManagement 580,591 (12.5) % 30.5 663,814 29.4 Total company $ 1,906,243 (15.4) % 100.0 % $ 2,254,184 100.0 % Total company revenue declined 15.4% to $1.9 billion for the fiscal year ended December 31, 2023, compared to the prior year.
See Note 1: Summary of Significant Accounting Policies and Note 12: Income Taxes , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for additional information. Segment performance We evaluate performance based on segment revenue and segment profit.
See Note 1: Summary of Significant Accounting Policies and Note 12: Income Taxes , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for additional information. Segment performance We evaluate segment performance based on segment revenue and segment profit.
Segment profit should not be considered a measure of financial performance in isolation or as an alternative to net income in the Consolidated Statements of Operations and Comprehensive Income (Loss) in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and may not be comparable to similarly titled measures of other companies.
Segment profit should not be considered a measure of financial performance in isolation or as an alternative to net income (loss) in the Consolidated Statements of Operations and Comprehensive Income (Loss) in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and may not be comparable to similarly titled measures of other companies.
For fiscal 2022 claims, a 5% change in one or more of the above factors would result in a change to workers’ compensation cost of approximately $2 million. Our reserve balances have been positively impacted primarily by the success of our accident prevention programs.
For fiscal 2023 claims, a 5% change in one or more of the above factors would result in a change to workers’ compensation cost of approximately $2 million. Our reserve balances have been positively impacted primarily by the success of our accident prevention programs.
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.
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.
We expect diminishing favorable adjustments to our workers’ compensation liabilities as the opportunity for significant reduction to the frequency and severity of accident rates diminishes. Restricted cash and investments also includes collateral to support our non-qualified deferred compensation plan in the form of company-owned life insurance policies.
We expect diminishing favorable adjustments to our workers’ compensation liabilities as the opportunity for significant reduction to the frequency and severity of accident rates has diminished. Restricted cash and investments also includes collateral to support our non-qualified deferred compensation plan in the form of company-owned life insurance policies.
Segment profit includes revenue, related cost of services, and ongoing operating expenses directly attributable to the reportable segment. Segment profit excludes goodwill and intangible asset impairment charges, depreciation and amortization expense, unallocated corporate general and administrative expense, interest expense, other income and expense, income taxes, and other adjustments not considered to be ongoing.
Segment profit includes revenue, related cost of services, and ongoing operating expenses directly attributable to the reportable segment. Segment profit excludes goodwill and intangible asset impairment charges, depreciation and amortization expense, unallocated corporate general and administrative expense, interest expense, other income and expense, income taxes, and other costs and benefits not considered to be ongoing.
Determining the fair value of a reporting unit when performing a quantitative impairment test involves the use of significant estimates and assumptions to evaluate the impact of operational and macroeconomic changes on each reporting unit. We estimate the fair value of each reporting unit using a weighted average of the income and market valuation approaches.
Determining the fair value of a reporting unit when performing a quantitative impairment test involves the use of significant estimates and assumptions to evaluate the impact of operational and macroeconomic changes on each reporting unit. We estimate the fair value of each reporting unit using a weighting of the income and market valuation approaches.
This analysis requires significant estimates and judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested.
This analysis requires significant estimates and judgments, including estimation of future cash flows, which is dependent on internally-developed forecasts of revenue and profitability, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested.
Based on our deferred tax asset realizability analysis, we have determined that a valuation allowance is appropriate for certain tax credits and net operating losses (“NOLs”) that we expect will not be utilized within the permitted carryforward periods as of December 25, 2022 and December 26, 2021.
Based on our deferred tax asset realizability analysis, we have determined that a valuation allowance is appropriate for certain tax credits and net operating losses that we expect will not be utilized within the permitted carryforward periods as of December 31, 2023 and December 25, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations , found in Part II of the Annual Report on Form 10-K for the fiscal year ended December 26, 2021 for discussion of fiscal 2021 compared to fiscal 2020.
Management’s Discussion and Analysis of Financial Condition and Results of Operations , found in Part II of the Annual Report on Form 10-K for the fiscal year ended December 25, 2022 for discussion of fiscal 2022 compared to fiscal 2021.
Cash flows from financing activities Financing cash flows consist primarily of repurchases of common stock as part of our publicly announced share repurchase program, amounts to satisfy employee tax withholding obligations upon the vesting of restricted stock, the net change in our Revolving Credit Facility, and proceeds from the sale of common stock through our employee stock purchase plans.
Page - 33 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS Cash flows from financing activities Financing cash flows consist primarily of repurchases of common stock as part of our publicly announced share repurchase program, amounts to satisfy employee tax withholding obligations upon the vesting of restricted stock, the net change in our Revolving Credit Facility, and proceeds from the sale of common stock through our employee stock purchase plans.
Our principal ongoing cash needs are to finance working capital, fund capital expenditures, repay outstanding Revolving Credit Facility balances, and execute share repurchases. We manage working capital through timely collection of accounts receivable, which we achieve through focused collection efforts and tightly monitoring trends in days sales outstanding.
Cash generated through our core operations is our primary source of liquidity. Our principal ongoing cash needs are to finance working capital, fund capital expenditures, repay outstanding Revolving Credit Facility balances, and execute share repurchases. We manage working capital through timely collection of accounts receivable, which we achieve through focused collection efforts and tightly monitoring trends in days sales outstanding.
Page - 31 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS Business combinations We account for our business acquisitions using the acquisition method of accounting. The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition.
Business combinations We account for our business acquisitions using the acquisition method of accounting. The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition.
Management’s Discussion and Analysis of Financial Condition and Results of Operations , found in Part II of the Annual Report on Form 10-K for the fiscal year ended December 26, 2021 for discussion of fiscal 2021 compared to fiscal 2020. Page - 27 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS FUTURE OUTLOOK The following highlights represent our operating outlook.
Management’s Discussion and Analysis of Financial Condition and Results of Operations , found in Part II of the Annual Report on Form 10-K for the fiscal year ended December 25, 2022 for discussion of fiscal 2022 compared to fiscal 2021. FUTURE OUTLOOK The following highlights represent our operating outlook.
Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income. For Page - 25 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS example, the impact of tax credits and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower.
Additionally, our effective tax rate can be more or less volatile based on the amount of our pre-tax income. For example, the impact of tax credits and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower.
In the event that we are not able to further reduce our accident rates, the positive impacts to our reserve balance will diminish. Management evaluates the adequacy of the workers’ compensation reserves in conjunction with an independent quarterly actuarial assessment.
In the event that we are not able to further reduce our accident rates, the positive impacts to our reserve balance will diminish. Page - 34 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS Management evaluates the adequacy of the workers’ compensation reserves in conjunction with an independent quarterly actuarial assessment.
When an impairment charge is recognized, the carrying amount of the asset is reduced to its estimated fair value based on discounted cash flow analysis or other valuation techniques. Page - 33 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS No impairment charge was recorded during fiscal 2022 or 2021.
When an impairment charge is recognized, the carrying amount of the asset is reduced to its estimated fair value based on discounted cash flow analysis or other valuation techniques. No impairment charge was recorded during fiscal 2023, 2022 or 2021.
Income taxes The income tax expense and the effective income tax rate were as follows: (in thousands, except percentages) 2022 2021 Income tax expense $ 11,143 $ 12,216 Effective income tax rate 15.2 % 16.5 % Our tax provision and our effective tax rate are subject to variation due to several factors, including variability in accurately predicting our pre-tax and taxable income and loss by jurisdiction, tax credits, government audit developments, changes in laws, regulations and administrative practices, and relative changes of expenses or losses for which tax benefits are not recognized.
Income taxes The income tax expense (benefit) and the effective income tax rate were as follows: (in thousands, except percentages) 2023 2022 Income tax expense (benefit) $ (6,472) $ 11,143 Effective income tax rate 31.3 % 15.2 % Our tax provision and our effective tax rate are subject to variation due to several factors, including variability in our pre-tax and taxable income and loss by jurisdiction, tax credits, government audit developments, changes in laws, regulations and administrative practices, and relative changes of expenses or losses for which tax benefits are not recognized.
Net cash used in financing activities during the fiscal year ended December 25, 2022 was primarily due to the repurchase of $60.9 million of our common stock in the open market. During the fiscal year ended December 26, 2021, we repurchased $16.7 million of our common stock in the open market.
Net cash used in financing activities during the fiscal year ended December 31, 2023 was primarily due to use of $34.2 million to repurchase our common stock in the open market. During the fiscal year ended December 25, 2022, we used $60.9 million to repurchase our common stock in the open market.
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 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.
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.
For those investments rated by nationally recognized statistical rating organizations the minimum ratings at time of purchase are: S&P Moody’s Fitch Short-term rating A-1/SP-1 P-1/MIG-1 F-1 Long-term rating A A2 A Total collateral commitments decreased $3.1 million during the fiscal year ended December 25, 2022 primarily due to lower collateral requirements from our insurance carriers and the use of collateral to satisfy workers’ compensation claims.
For those investments rated by nationally recognized statistical rating organizations the minimum ratings at time of purchase are: Page - 32 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS S&P Moody’s Fitch Short-term rating A-1/SP-1 P-1/MIG-1 F-1 Long-term rating A A2 A Total collateral commitments decreased $25.2 million during the fiscal year ended December 31, 2023 primarily due to a decrease in collateral levels required by our insurance carriers, as well as the use of collateral to satisfy workers’ compensation claims.
Indefinite-lived intangible assets We have indefinite-lived intangible assets related to our Staff Management and PeopleScout trade names. 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.
Page - 35 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS 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.
However, as the economy emerges from periods of uncertainty, contingent labor providers are uniquely positioned to respond quickly to increasing demand for labor and rapidly fill new or temporary positions, replace absent employees, and convert fixed labor costs to variable costs.
However, as the economy emerges from periods of uncertainty, contingent labor providers are uniquely positioned to respond quickly to increasing demand for labor and rapidly fill new or temporary positions, replace absent employees, and convert fixed labor costs to variable costs. Similarly, companies turn to hybrid or fully outsourced recruiting models during periods of rapid re-hiring and high employee turnover.
We confirm the reasonableness of the valuation conclusions by comparing the indicated values of all the reporting units to the overall company value indicated by the stock price and outstanding shares as of the valuation date, or market capitalization. We performed our annual goodwill impairment test as of the first day of our fiscal second quarter of 2022.
We confirm the reasonableness of the valuation conclusions by comparing the indicated values of all the reporting units to the overall company value indicated by the stock price and outstanding shares as of the valuation date, or market capitalization.
PeopleManagement segment performance was as follows: (in thousands, except percentages) 2022 2021 Revenue from services $ 663,814 $ 639,741 Segment profit $ 15,811 $ 13,196 Percentage of revenue 2.4 % 2.1 % PeopleManagement segment profit grew 19.8% or $2.6 million and improved as a percentage of revenue for the fiscal year ended December 25, 2022, compared to the prior year.
PeopleManagement segment performance was as follows: (in thousands, except percentages) 2023 2022 Revenue from services $ 580,591 $ 663,814 Segment profit $ 6,963 $ 15,811 Percentage of revenue 1.2 % 2.4 % PeopleManagement segment profit declined 56.0% or $8.8 million and declined as a percentage of revenue for the fiscal year ended December 31, 2023, compared to the prior year.
Selling, general and administrative expense (in thousands, except percentages) 2022 2021 Selling, general and administrative expense $ 500,686 $ 464,322 Percentage of revenue 22.2 % 21.4 % Total company SG&A expense increased by $36.4 million or 7.8% for the fiscal year ended December 25, 2022, compared to the prior year.
Selling, general and administrative expense (in thousands, except percentages) 2023 2022 Selling, general and administrative expense $ 494,603 $ 500,686 Percentage of revenue 25.9 % 22.2 % Total company SG&A expense decreased by $6.1 million or 1.2% for the fiscal year ended December 31, 2023, compared to the prior year.
Gross profit (in thousands, except percentages) 2022 2021 Gross profit $ 602,144 $ 560,320 Percentage of revenue 26.7 % 25.8 % Gross profit as a percentage of revenue expanded 90 basis points to 26.7% for the fiscal year ended December 25, 2022, compared to 25.8% for the prior year.
Gross profit (in thousands, except percentages) 2023 2022 Gross profit $ 506,059 $ 602,144 Percentage of revenue 26.5 % 26.7 % Gross profit as a percentage of revenue contracted 20 basis points to 26.5% for the fiscal year ended December 31, 2023, compared to 26.7% for the prior year.
The primary market multiples to which we compare are revenue and earnings before interest, taxes, depreciation, and amortization. We base fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates.
We base fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates.
Page - 26 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS PeopleScout segment performance was as follows: (in thousands, except percentages) 2022 2021 Revenue from services $ 317,518 $ 262,953 Segment profit $ 44,771 $ 36,163 Percentage of revenue 14.1 % 13.8 % PeopleScout segment profit grew 23.8% or $8.6 million and improved as a percentage of revenue for the fiscal year ended December 25, 2022, compared to the prior year.
Page - 30 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS PeopleScout segment performance was as follows: (in thousands, except percentages) 2023 2022 Revenue from services $ 229,334 $ 317,518 Segment profit $ 26,922 $ 44,771 Percentage of revenue 11.7 % 14.1 % PeopleScout segment profit declined 39.9% or $17.8 million and declined as a percentage of revenue for the fiscal year ended December 31, 2023, compared to the prior year.
No impairment charge was recorded during fiscal 2021 or 2020. Finite-lived intangible assets and other long-lived assets We review intangible assets that have finite useful lives and other long-lived assets whenever an event or change in circumstances indicates that the carrying value of the asset may not be recoverable.
Page - 37 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS Finite-lived intangible assets and other long-lived assets We review intangible assets that have finite useful lives and other long-lived assets whenever an event or change in circumstances indicates that the carrying value of the asset may not be recoverable.
As of December 25, 2022, $89.0 million remains available for repurchase under existing authorizations. FISCAL 2021 AS COMPARED TO FISCAL 2020 See Item 7.
As of December 31, 2023, $55.1 million remains available for repurchase under existing authorization. FISCAL 2022 AS COMPARED TO FISCAL 2021 See Item 7.
Accrued wages and benefits can fluctuate based on whether the period end requires the accrual of one or two weeks of payroll, the amount and timing of bonus payments, and timing of payroll tax payments.
As client demand for our services declines, the result is a deleveraging of accounts receivable and accounts payable. Accrued wages and benefits can fluctuate based on whether the period end requires the accrual of one or two weeks of payroll, the amount and timing of bonus payments, and timing of payroll tax payments.
In addition, we continue to transition our back-office technology from on-premise software platforms to cloud-based software solutions, to increase automation and the efficiency of running our business.
We continue to make investments in online and mobile apps to increase the competitive differentiation of our services over the long term and improve the efficiency of our service delivery model. In addition, we continue to transition our back-office technology from on-premise software platforms to cloud-based software solutions, to increase automation and the efficiency of running our business.
PeopleReady segment performance was as follows: (in thousands, except percentages) 2022 2021 Revenue from services $ 1,272,852 $ 1,270,928 Segment profit $ 87,743 $ 82,398 Percentage of revenue 6.9 % 6.5 % PeopleReady segment profit grew 6.5% or $5.3 million and improved as a percentage of revenue for the fiscal year ended December 25, 2022, compared to the prior year.
PeopleReady segment performance was as follows: (in thousands, except percentages) 2023 2022 Revenue from services $ 1,096,318 $ 1,272,852 Segment profit $ 26,606 $ 87,743 Percentage of revenue 2.4 % 6.9 % PeopleReady segment profit declined 69.7% or $61.1 million and declined as a percentage of revenue for the fiscal year ended December 31, 2023, compared to the prior year.
A summary of our cash flows for each period are as follows: Fifty-two weeks ended (in thousands) Dec 25, 2022 Dec 26, 2021 Net cash provided by operating activities $ 120,503 $ 20,440 Net cash used in investing activities (20,945) (16,220) Net cash used in financing activities (64,692) (19,126) Effect of exchange rate changes on cash, cash equivalents and restricted cash (2,420) (521) Net change in cash, cash equivalents and restricted cash $ 32,446 $ (15,427) Page - 29 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS Cash flows from operating activities Cash provided by operating activities consists of net income adjusted for non-cash benefits and expenses, and changes in operating assets and liabilities.
A summary of our cash flows for each period are as follows: Fiscal year ended (in thousands) Dec 31, 2023 Dec 25, 2022 Net cash provided by operating activities $ 34,754 $ 120,503 Net cash used in investing activities (32,322) (20,945) Net cash used in financing activities (37,583) (64,692) Change in cash, cash equivalents and restricted cash reclassified to assets held-for-sale (300) — Effect of exchange rate changes on cash, cash equivalents and restricted cash (874) (2,420) Net change in cash, cash equivalents and restricted cash $ (36,325) $ 32,446 Cash flows from operating activities Cash provided by operating activities consists of net income (loss) adjusted for non-cash benefits and expenses, and changes in operating assets and liabilities.
Additionally, we did not identify any events or conditions that make it more likely than not that an impairment may have occurred during the period from March 28, 2022 to December 25, 2022. Accordingly, no impairment loss was recognized during fiscal 2022. There was no goodwill impairment charge recorded during fiscal 2021.
Additionally, following performance of the annual impairment test, we did not identify any events or conditions that make it more likely than not that an additional impairment may have occurred during the fiscal year ended December 31, 2023. No impairment charge was recorded during fiscal 2022 nor 2021.
During fiscal 2020, we recorded a non-cash impairment charge for our PeopleScout RPO and PeopleManagement On-Site client relationship intangible assets of $34.7 million. See Note 5: Goodwill and Intangible Assets , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for additional details on the 2020 intangible asset impairments.
See Note 5: Goodwill and Intangible Assets , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for additional details on the 2023 indefinite-lived intangible asset impairment.
Depreciation and amortization (in thousands, except percentages) 2022 2021 Depreciation and amortization $ 29,273 $ 27,556 Percentage of revenue 1.3 % 1.3 % Depreciation and amortization increased primarily due to certain assets placed into service during fiscal 2022 and 2021, partially offset by other assets becoming fully amortized during those years.
Depreciation and amortization (in thousands, except percentages) 2023 2022 Depreciation and amortization $ 25,821 $ 29,273 Percentage of revenue 1.4 % 1.3 % Depreciation and amortization decreased primarily due to certain assets becoming fully depreciated and amortized during fiscal 2022.
Page - 30 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS Workers’ compensation reserve We maintain reserves for workers’ compensation claims, including the estimated expenses related to claims above our self-insured limits (“excess claims”), using actuarial estimates of the future cost of claims and related expenses.
Such estimates and assumptions are subject to inherent uncertainties, which may result in actual future amounts differing from reported estimated amounts. Workers’ compensation reserve We maintain reserves for workers’ compensation claims, including the estimated expenses related to claims above our self-insured limits (“excess claims”), using actuarial estimates of the future cost of claims and related expenses.
The items creating differences between income taxes computed at the statutory federal income tax rate and income taxes reported on the Consolidated Statements of Operations and Comprehensive Income (Loss) are as follows: (in thousands, except percentages) 2022 % 2021 % Income tax expense based on statutory rate $ 15,417 21.0 % $ 15,508 21.0 % Increase (decrease) resulting from: State income taxes, net of federal benefit 3,008 4.1 3,548 4.8 Hiring tax credits, net (7,911) (10.8) (7,582) (10.3) CARES Act (1) — — (468) (0.6) Uncertain tax positions (1,336) (1.8) (391) (0.5) Non-deductible and non-taxable items 1,377 1.9 589 0.8 Foreign taxes 654 0.9 211 0.3 Other, net (66) (0.1) 801 1.0 Total tax expense $ 11,143 15.2 % $ 12,216 16.5 % (1) The Coronavirus Aid, Relief and Economic Security Act ("CARES Act") enacted in the U.S. on March 27, 2020.
Page - 29 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS The items creating differences between income taxes computed at the statutory federal income tax rate and income taxes reported on the Consolidated Statements of Operations and Comprehensive Income (Loss) are as follows: (in thousands, except percentages) 2023 % 2022 % Income tax expense (benefit) based on statutory rate $ (4,335) 21.0 % $ 15,417 21.0 % Increase (decrease) resulting from: State income taxes, net of federal benefit (1,384) 6.7 3,008 4.1 Hiring tax credits, net (4,997) 24.2 (7,911) (10.8) Uncertain tax positions (206) 1.0 (1,336) (1.8) Non-deductible goodwill impairment charge 2,287 (11.1) — — Non-deductible and non-taxable items 1,178 (5.7) 1,377 1.9 Foreign taxes 587 (2.9) 654 0.9 Other, net 398 (1.9) (66) (0.1) Total income tax expense (benefit) $ (6,472) 31.3 % $ 11,143 15.2 % Our effective tax rate for the fiscal year ended December 31, 2023 was 31.3% compared to 15.2% for the prior year.
During fiscal 2020, we recorded an impairment charge of $140.5 million with respect to our PeopleScout RPO, PeopleScout MSP and PeopleManagement On-Site reporting units. See Note 5: Goodwill and Intangible Assets , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for additional details on the 2020 goodwill impairments.
No further impairment loss was recognized during the fiscal year ended December 31, 2023. The remaining goodwill balance for PeopleScout MSP was $0.8 million as of December 31, 2023. See Note 5: Goodwill and Intangible Assets , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for additional details.
During the same period, net cash was used to repay deferred employer payroll taxes as allowed by the CARES Act. Cash flows from investing activities Investing cash flows consist of capital expenditures and purchases, sales and maturities of restricted investments, which are managed in line with our workers’ compensation collateral funding requirements and timing of claim payments.
In addition, our workers’ compensation claims reserve for estimated claims decreases as contingent labor services decline, as was the case in fiscal 2023. Cash flows from investing activities Investing cash flows consist of capital expenditures and purchases, sales and maturities of restricted investments, which are managed in line with our workers’ compensation collateral funding requirements and timing of claim payments.
As of December 25, 2022, we are in a strong financial position with cash and cash equivalents of $72.1 million, no outstanding debt, and $292.8 million available under our revolving credit agreement (“Revolving Credit Facility”), for total liquidity of $364.9 million.
As of December 31, 2023, we had cash and cash equivalents of $61.9 million, no outstanding debt, and $85.9 million available under the most restrictive covenant of our revolving credit agreement (“Revolving Credit Facility”), for total liquidity of $147.8 million.
For additional discussion on our business and strategy, refer to Business , found in Part I, Item 1 of this Annual Report on Form 10-K. Fiscal 2022 highlights Total company revenue grew 3.7% to $2.3 billion for the fiscal year ended December 25, 2022, compared to the prior year.
For additional discussion on our business and strategy, refer to Business , found in Part I, Item 1 of this Annual Report on Form 10-K. Fiscal 2023 highlights Our 2023 fiscal year contained 53 weeks, with the 53rd week falling in the fiscal fourth quarter, while our 2022 and 2021 fiscal years contained 52 weeks.
Examples include PeopleReady’s JobStack mobile app and PeopleScout’s Affinix TM talent acquisition technology. LIQUIDITY AND CAPITAL RESOURCES We believe we have a strong financial position and sufficient sources of funding to meet our short and long term obligations. As of December 25, 2022, we had $72.1 million in cash and cash equivalents.
Page - 31 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES We believe we have a strong financial position and sufficient sources of funding to meet our short and long term obligations. As of December 31, 2023, we had $61.9 million in cash and cash equivalents and no debt outstanding.
Page - 24 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS PeopleManagement PeopleManagement revenue grew 3.8% to $663.8 million for the fiscal year ended December 25, 2022, compared to the prior year.
Page - 27 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS PeopleManagement PeopleManagement revenue declined 12.5% to $580.6 million for the fiscal year ended December 31, 2023, compared to the prior year. The 53rd week contributed an additional $7.6 million in revenue.
We also apply a market approach, which compares TrueBlue, Inc. to comparable publicly traded companies Page - 32 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS and develops a correlation, referred to as a multiple, to apply to the operating results of the reporting units.
We also apply a market approach, which develops a value correlation based on the market capitalization of similar publicly traded companies, referred to as a multiple, to apply to the operating results of the reporting units. The primary market multiples to which we compare are revenue and earnings before interest, taxes, depreciation, and amortization.
Liquidity outlook • Capital expenditures and spending for software as a service assets for the fiscal first quarter of 2023 are expected to be approximately $11 million, and between $36 million and $40 million for fiscal 2023. We remain committed to technological innovation to transform our business for a digital future.
Liquidity outlook • Capital expenditures and spending for software as a service assets are expected to be between $23 million and $27 million for fiscal 2024, with approximately $4 million of this amount relating to spending for software as a service assets for fiscal 2024.
This was partially offset by net cash used for payments on accounts payable and accrued expenses, as well as net cash used for payments of accrued wages and benefits primarily due to the timing and amount of annual bonus payments to employees and COVID-19 government assistance.
Net cash provided by accounts receivable collections through deleveraging during the fiscal year ended December 31, 2023 was partially offset by net cash used for payments on accounts payable and accrued expenses. Net cash used for payments on accrued wages and benefits was primarily due to lower annual employee bonuses.
If the carrying value exceeds the fair value, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value. Management uses considerable judgment to determine key assumptions, including projected revenue, royalty rates and appropriate discount rates.
The quantitative impairment test, if necessary, utilizes the relief from royalty method to determine the fair value of each of our trade names. If the carrying value exceeds the fair value, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value.
We performed our annual impairment test as of the first day of our fiscal second quarter of 2022. Based on our assessment of qualitative factors, we concluded it was more likely than not that the fair value of our indefinite-lived intangible assets exceeded their carrying value and were not impaired.
Indefinite-lived intangible assets We performed our annual impairment test as of the first day of our fiscal second quarter of 2023.
Our staffing businesses contributed 100 basis points of expansion, of which 60 basis points were attributable to higher client bill rates, which have increased ahead of associate pay rates. An additional 50 basis points were attributable to lower workers’ compensation costs from a combination of favorable development on prior year reserves and fewer workplace injuries.
The contraction was partially offset by an expansion of 40 basis points from lower workers’ compensation costs and 40 basis points from higher bill rates in our staffing businesses, which have increased ahead of pay rates.
As such, it was not necessary to perform a quantitative impairment analysis. Additionally, we did not identify any events or conditions that make it more likely than not that an impairment may have occurred during the period from March 28, 2022 to December 25, 2022. Accordingly, no impairment loss was recognized during fiscal 2022.
Operating results have declined compared to our expectations as of the date of the annual impairment test; however, we did not identify any events or conditions that make it more likely than not that an additional impairment may have occurred during the fiscal year ended December 31, 2023.
Also included in the current year were $4.2 million in accelerated costs related to exiting non-critical software contracts . These increases were partially offset by the reversal of $3.3 million in accrued compensation costs related to the resignation of our former Chief Executive Officer.
SG&A expense in the prior year included a benefit of $3.3 million for the reversal of accrued compensation related to the resignation of a former Chief Executive Officer.
Other differences between the statutory federal income tax rate of 21.0% and our effective tax rate include benefits of hiring tax credits, partially offset by state and foreign income taxes, and certain non-deductible market losses related to company-owned life insurance policies.
The higher effective tax rate in the current year was primarily due to benefits of hiring tax credits, partially offset by certain non-deductible and non-taxable items and foreign income taxes.
Revenue at PeopleManagement, our second largest segment by revenue, grew 3.8%, fueled by demand for commercial trucking services. Total company gross profit as a percentage of revenue for the fiscal year ended December 25, 2022 improved 90 basis points to 26.7%, compared to 25.8% for the prior year.
Total company gross profit as a percentage of revenue for the fiscal year ended December 31, 2023 declined 20 basis points to 26.5%, compared to 26.7% for the prior year. This decrease was primarily driven by changes in revenue mix favoring our lower margin staffing businesses.
Based on our assessment of qualitative factors, we concluded it was more likely than not that the fair value of each reporting unit exceeded its carrying value, and the goodwill associated with each reporting unit was not impaired. As such, it was not necessary to perform a quantitative impairment analysis.
Based on our annual impairment test, we concluded the fair value of all other reporting units were substantially in excess of their carrying value, and the goodwill associated with those reporting units was not impaired.
This expectation does not include the impact of potential share repurchases. • We expect our effective income tax rate for fiscal 2023 to be between 10% and 14%. • Fiscal 2023 will include a 53rd week, which we expect will add between $22 million and $27 million in revenue, but is not expected to contribute significant net income due to it falling during a low point between the Christmas and New Year holidays.
This expectation does not include the impact of potential share repurchases. • We expect our statutory income tax rate for fiscal 2024 to be between 24% and 28%. For fiscal 2024, we also expect an income tax benefit related to our hiring tax credits of between $5 million and $9 million.
Operating outlook • We expect revenue for the fiscal first quarter of 2023 to decline between 18% and 13% as compared to the same period in the prior year, due to the continuation of lower demand for our services as we experienced during the last half of fiscal 2022.
The decline was primarily due to the decline in revenue and the associated impact from lower operating leverage. We took actions during each quarter of 2023 to reduce operating costs to better align with demand. FISCAL 2022 AS COMPARED TO FISCAL 2021 See Item 7.
Removed
Similarly, companies often reduce their in-house recruiting teams during economic downturns, and turn to hybrid or fully outsourced recruiting models during periods of rapid re-hiring and high employee turnover.
Added
Our business strategy is focused on growth in each of our business segments by investing in innovative technology and initiatives that drive organic growth and improve the client and candidate experience. We have implemented these core strategies for each of our business segments: PeopleReady, PeopleScout and PeopleManagement.
Removed
In order to competitively differentiate our services in these highly fragmented industries, we are committed to executing our digital strategies, combined with a focus on improving operational efficiencies in order to gain market share. We have implemented these core strategies for each of our business segments: PeopleReady, PeopleScout and PeopleManagement.
Added
Total company revenue declined 15.4% to $1.9 billion for the fiscal year ended December 31, 2023, compared to the prior year. The 53rd week contributed an additional $20.3 million in revenue. The decline was primarily driven by continued economic uncertainty impacting demand trends across all three segments.
Removed
Overall growth was driven by increased demand for our services during the first half of the year, partially offset by a decrease in demand during the second half of the year as economic uncertainty grew.
Added
Our contingent staffing clients are focused on employee retention and cost reduction, causing them to become increasingly selective in the positions they fill using outsourced labor providers. The decline in demand has impacted most industries and markets, especially retail, hospitality and services.
Removed
Revenue at PeopleReady, our largest segment by revenue, remained relatively unchanged as growth from higher client bill rates and improved worker supply trends were offset by lower client demand due to economic uncertainty.
Added
Total company selling, general and administrative (“SG&A”) expense decreased 1.2% to $494.6 million for the fiscal year ended December 31, 2023, compared to the prior year. The 53rd week added an additional $6.6 million of expense. During the year, cost management actions were taken to adjust our operating cost structure to better align with reduced client demand.
Removed
Revenue at PeopleScout, our smallest segment by revenue but largest by segment profit as a percentage of revenue, grew 20.8% driven by higher volumes at existing clients and project work for new clients who were utilizing our services to fulfill short-term hiring needs.
Added
The resulting cost savings exceeded both the cost to execute these actions and inflation of certain employee costs, most notably medical benefits. We remain focused on managing costs to enhance profitability, while maintaining our operational strengths to prepare for demand recovery.
Removed
This increase was primarily driven by the higher rates we bill our clients in our staffing businesses, which have increased ahead of the rates we pay our associates, and lower workers’ compensation costs. Total company selling, general and administrative (“SG&A”) expense increased 7.8% to $500.7 million for the fiscal year ended December 25, 2022, compared to the prior year.
Added
We recorded a goodwill and intangible asset impairment charge of $9.5 million ($9.3 million net of tax), for the fiscal year ended December 31, 2023, primarily within our PeopleScout MSP reporting unit.
Removed
A portion of the increase in SG&A expense was to support revenue growth of 3.7%, with the remaining increase primarily related to costs incurred for investments in technology and the absence of benefits from government incentive programs related to the coronavirus pandemic (“COVID-19”) received in the prior year.
Added
The items described above contributed to our net loss of $14.2 million for the fiscal year ended December 31, 2023, compared to net income of $62.3 million in the prior year.
Removed
Revenue growth, along with an improvement in gross profit as a percentage of revenue, was offset by additional SG&A expense, which resulted in net income remaining relatively unchanged at $62.3 million for the fiscal year ended December 25, 2022, compared to the prior year.
Added
The 53rd week contributed an additional $20.3 million in revenue. The decline was primarily driven by continued economic uncertainty impacting demand trends across all three segments. Our contingent staffing clients are focused on employee retention and cost reduction, causing them to become increasingly selective in the positions they fill using outsourced labor providers.
Removed
Overall growth was driven by higher client bill rates and improved worker supply trends within our staffing businesses, which includes our PeopleReady and PeopleManagement segments, as well as increased demand for our services during the first half of the year.
Added
Our PeopleScout clients continue to face uncertain future workforce needs, and have reduced volumes in an attempt to manage costs. PeopleReady PeopleReady revenue declined 13.9% to $1.1 billion for the fiscal year ended December 31, 2023, compared to the prior year. The 53rd week contributed an additional $11.9 million in revenue.
Removed
This growth was partially offset by a decrease in demand for our services during the second half of the year as economic uncertainty grew. PeopleReady PeopleReady revenue was relatively unchanged at $1.3 billion for the fiscal year ended December 25, 2022, compared to the prior year.
Added
Revenue declined as a result of continued economic uncertainty, leading our clients to reduce their dependence on variable labor in order to manage their costs. Our clients are focused on employee retention, causing them to become increasingly selective in the positions they fill using outsourced labor providers.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+1 added−2 removed4 unchanged
Biggest changeInterest rate risks Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio and our revolving credit facility. The interest on our revolving credit agreement is based on the U.S.
Biggest changeInterest rate risks Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio and our revolving credit facility. The interest on our revolving credit agreement is based on the Secured Overnight Financing Rate (“SOFR”), plus an adjustment of 0.10%, plus an applicable spread between 1.25% and 3.50%.
The collateral typically takes the form of cash and cash equivalents and highly rated investment grade securities, primarily in municipal debt securities, corporate debt securities and agency mortgage-backed securities. The majority of our collateral obligations are held in a trust (“Trust”) at the Bank of New York Mellon.
The collateral typically takes the form of cash and cash equivalents and highly rated investment grade securities, primarily in municipal debt securities, corporate debt securities and agency mortgage-backed securities. The majority of our collateral obligations are held in a trust at the Bank of New York Mellon (“Trust”).
We have not hedged our foreign currency translation risk. We have the ability to hold our foreign currency denominated assets indefinitely and do not expect that a sudden or significant change in foreign exchange rates will have a material impact on future operating results or cash flows. Page - 35 Table of Contents
We have not hedged our foreign currency translation risk. We have the ability to hold our foreign currency denominated assets indefinitely and do not expect that a sudden or significant change in foreign exchange rates will have a material impact on future operating results or cash flows. Page - 39 Table of Contents
Page - 34 Table of Contents Trust assets Restricted cash and investments consist principally of 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 the workers’ compensation obligation.
Trust assets Restricted cash and investments consist principally of 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 the workers’ compensation obligation.
Removed
Dollar London Interbank Offered Rate (“LIBOR”) or, at our option, the higher of the prime rate (as announced by Bank of America) or the federal funds rate. The publication of the LIBOR reference rate was to be discontinued beginning on or around the end of 2021.
Added
Alternatively, at our option, we may pay interest based on a base rate plus an applicable spread between 0.25% and 1.50%. The base rate is the higher of the prime rate (as announced by Bank of America) or the federal funds rate plus 0.50%.
Removed
However, the ICE Benchmark Administration Limited, in its capacity as administrator of LIBOR, has announced that it intends to extend publication of LIBOR (other than one-week and two-month tenors) through June 2023. TrueBlue and its lenders have committed to identify and implement a LIBOR successor reference rate ahead of the LIBOR discontinuation date.

Other TBI 10-K year-over-year comparisons