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What changed in TrueBlue, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of TrueBlue, Inc.'s 2023 and 2024 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 2024 report.

+303 added−290 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-21)

Top changes in TrueBlue, Inc.'s 2024 10-K

303 paragraphs added · 290 removed · 232 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeNo 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.
Biggest changeCOMPETITION 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. 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.
In addition to our values, our Code of Conduct & Business Ethics (the “Code”) describes the expectations we hold for each employee, from our commitment to treat each other kindly to our zero tolerance for fraud, bribery or corruption. It reflects who we are, how we work, and is based on our core values and the law.
In addition to our values, our Code of Conduct & Business Ethics (the “Code”) describes our expectations for each employee, from our commitment to treat each other kindly to our zero tolerance for fraud, bribery or corruption. It reflects who we are and how we work and is based on our core values and the law.
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.
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 Our success as a company depends on our ability to attract, develop and retain talented employees.
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.
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, candidate assessment services and talent acquisition strategy consulting.
By being innovative and working together, we can find new ways to get results. • Be Passionate – We believe in what we do, are committed to doing good, and will go above and beyond the call of duty for our clients and workers. • Be Accountable – We empower our people to take personal responsibility and make an impact. • Be Respectfu l – We listen and learn from each other, embrace diverse views and experiences, and know that finding successful solutions comes from working together. • Be True – We are true to who we are and what our clients need.
By being innovative and working together, we can find new ways to get results. • Be Passionate – We believe in what we do, are committed to doing good, and will go above and beyond the call of duty for our clients and workers. • Be Accountable – We empower our people to take personal responsibility and make an impact. • Be Respectful – We listen and learn from each other, embrace diverse views and experiences, and know that finding successful solutions comes from working together. • Be True – We are true to who we are and what our clients need.
Human resource departments are faced with increasingly complex operational and regulatory requirements, increased candidate expectations, an expanding talent technology landscape, and pressure to achieve efficiencies, which increase the need to migrate non-core functions to outsourced providers.
Human resource departments are faced with increasingly complex operational and regulatory requirements, higher candidate expectations, an expanding talent technology landscape, and pressure to achieve efficiencies, which increase the need to migrate non-core functions to outsourced providers.
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.
Page - 4 Table of Contents PeopleScout, a global leader in recruitment process outsourcing (“RPO”) services, connected approximately 143,000 people with work in fiscal 2024, 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.
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.
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 2024, we served approximately 55,000 clients in industries including construction, manufacturing and logistics, warehousing and distribution, waste and recycling, energy, transportation, retail, hospitality and general labor.
The Stafftrack associate mobile app provides associates the ability to search for a job, view schedules, add shifts, receive real-time notifications, and earn perks through our Stafftrack Rewards program, which incentivizes associates for perfect attendance and referrals.
The Stafftrack associate mobile app provides associates the ability to search for a job, view schedules, add shifts, receive real-time notifications, and earn perks through our Stafftrack Rewards program, which incentivizes associates for good attendance and initiating referrals.
Through our WorkUp program, we provide skills training and career development for associates. We are expanding the program into select markets where we operate. During 2023, we established an approved apprenticeship program to support skills development and long-term employment in the renewable energy industry, and launched a commercial truck driver training scholarship for female truck drivers.
Through our WorkUp program, we provide skills training and career development for associates. We are expanding the program into select markets where we operate. We have an approved apprenticeship program to support skills development and long-term employment in the renewable energy industry, and launched a commercial truck driver training scholarship for female truck drivers.
We distribute educational materials to our clients and provide safety training to all associates. We also perform client site visits to identify and address specific safety risks unique to an industry or job site. REGULATION Our services are subject to a variety of complex federal, state, and foreign laws and regulations.
We distribute educational materials to our clients and provide safety training to all associates. We also perform client site visits to identify and address specific safety risks unique to an industry or job site. Page - 10 Table of Contents REGULATION Our services are subject to a variety of complex federal, state, and foreign laws and regulations.
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 continue to expand and build functionality within the mobile app to enhance the overall driver experience. ◦ Our Affinix platform is utilized by our PeopleScout dedicated service delivery teams for sourcing, screening and delivering a permanent workforce to our clients. Affinix creates a consumer-like candidate experience and streamlines the sourcing process.
Competitive forces have historically limited our ability to raise our prices to immediately and fully offset the increased costs of doing business, some of which include increased associate wages, workers’ compensation costs, unemployment insurance and health care.
Competitive forces in any economic environment have historically limited our ability to raise our prices to immediately and fully offset the increased costs of doing business, some of which include increased associate wages, workers’ compensation costs, unemployment insurance and health care.
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.
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. Our business experiences seasonal fluctuations for contingent staffing services.
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.
Page - 7 Table of Contents 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.
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.
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 fiscal 2024, we connected approximately 336,000 people with work and served approximately 55,000 clients.
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.
PeopleManagement connected approximately 40,000 people with work in fiscal 2024. Our OnSite 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.
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.
Our ten largest clients accounted for 22.4% of total revenue for fiscal 2024, 20.5% for fiscal 2023 and 19.2% for fiscal 2022. No single client represented more than 10.0% of total company revenue for fiscal 2024, 2023 or 2022.
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.
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.
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.
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. To assess and improve engagement, we utilize an independent third-party survey provider.
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.
Our technological innovations improve the access, speed and ease of connecting our clients with high-quality contingent and permanent employee workforce solutions. ◦ Our JobStack platform supplements our PeopleReady branch network by connecting 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, allowing our branches to expand their recruiting and sales efforts.
We continuously track injuries to our associates at our client job sites across regions, industries and brands to identify trends that allow us to focus our safety resources on the types of jobs that may lead to more injuries. Costs associated with accidents are charged to each branch or location, providing additional incentive to promote safety.
We continuously track injuries to our associates at our client job sites across regions, industries and brands to identify trends that allow us to focus our safety resources on injury prevention efforts at higher-risk job sites. Costs associated with accidents are charged to each branch or location, providing additional incentive to promote safety.
Historically, in periods of economic growth, the number of companies providing contingent workforce solutions has increased due to low barriers to entry, whereas, during recessionary periods, the number of companies has decreased through consolidation, bankruptcies or other events.
This creates volatility for the staffing industry based on a range of overall economic conditions. Historically, in periods of economic growth, the number of companies providing contingent workforce solutions has increased due to low barriers to entry, whereas, during recessionary periods, the number of companies has decreased through consolidation, bankruptcies or other events.
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.
The appropriate committees of the Board of Directors (“Board”) regularly receive reports directly from the Chief People Officer regarding the progress on our key human capital initiatives. These reports inform discussions regarding employee development, retention and engagement. Some of our key human capital management initiatives are discussed below.
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.
Page - 8 Table of Contents 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.
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.
The Code applies to officers and all other employees of TrueBlue and its affiliates worldwide, and is fully endorsed by the Board. We require all of our employees to complete our Code training, as well as courses about sexual harassment awareness and prevention and cybersecurity awareness. Employee engagement We place strong emphasis on employee engagement.
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.
Our employees’ skills, experience and industry knowledge significantly benefit our operations and performance. As of December 29, 2024, we employed approximately 4,200 full-time equivalent (“FTE”) employees. We have approximately 3,100 FTE employees in North America, almost entirely in the U.S., 800 FTE employees in Asia Pacific, and 300 FTE employees in Europe.
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.
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.
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.
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.
The most significant competitive factors are price, ability to promptly fill client orders, success in meeting clients’ expectations of recruiting qualified associates, quality of client and associate technology tools, and appropriately addressing client service issues. Staffing companies compete both to recruit and retain a supply of associates, and to attract and retain clients who will utilize these associates.
The strongest staffing services competitor in a particular market is a company with established relationships and a track record of meeting the clients’ needs. The most significant competitive factors are price, ability to promptly fill client orders, success in meeting clients’ expectations of recruiting qualified associates, quality of client and associate technology tools, and appropriately addressing client service issues.
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.
Our PeopleReady brand connects our clients with individuals looking for on-demand, general temporary and temp-to-hire positions through our vast network of approximately 500 branches across all 50 states in the United States (“U.S.”) and Puerto Rico. Augmenting our branch network, our mobile app, JobStack ® , connects people with on-demand work 24 hours a day, seven days a week.
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.
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.
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.
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.
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.
Staffing companies compete both to recruit and retain a supply of associates, and to attract and retain clients who will utilize these associates. 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.
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.
These surveys include assessments and feedback on employee engagement and employee-management relations. The results of these surveys are reported and distributed throughout management and the Board. The survey results are used to create actionable plans to improve employee engagement and retention.
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.
These ERGs seek to maximize employee engagement and contribute to our overall business objectives by offering varying perspectives, networking opportunities and increased awareness. Our focus on culture and belonging 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.
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.
To support overall 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. These training and development programs support our intent to foster a culture that enables all employees to realize their full professional potential and cultivates a qualified network of future leaders.
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.
During 2024, we successfully launched a new, proprietary version of JobStack that provides a more customized experience for our clients and associates. We will continue to add features with a focus on enhancing the user experience and creating efficiencies, which will help drive growth and expand our reach.
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.
BUSINESS STRATEGY Our fiscal 2025 business strategy is focused on accelerating business growth to capture market share, while enhancing our long-term profitability.
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.
Employees are encouraged to create individual development plans, leveraging the behaviors defined in the leadership competency model, to identify both knowledge and behavior gaps, and set individual goals designed to enhance career progression. We aim to strengthen skills that transfer across roles, business segments and functions.
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.
Our April 2024 survey delivered an engagement score of 76, which exceeded the target benchmark score of 74 set by the survey provider. Culture and belonging We are dedicated to fostering a culture that supports our belief that human capital is our most valuable asset. We strive to create an environment that supports and values our people.
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.
JobStack creates a digital exchange between our associates and clients, and allows our branch resources to focus on sales, recruiting and service delivery efforts. PeopleReady also connects skilled tradespeople with temporary work across a wide range of trades, including carpentry, electrical, plumbing, welding and energy installation positions through our PeopleReady Skilled Trades and RenewableWorks brands.
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.
Page - 9 Table of Contents Developing our people We utilize a performance management process that is focused on both performance and development of our employees in an effort to retain our talented employees.
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.
Our operations are managed as three business segments: PeopleReady, PeopleScout and PeopleManagement. PeopleReady connected approximately 153,000 people with work and served approximately 54,000 clients in fiscal 2024.
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.
Key elements of this strategy include advancement of our digital transformation, expansion in high-growth, less cyclical and under-penetrated end markets as well as high-value roles, and optimization of our business model to drive enhanced sales focus. • Digital transformation: 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.
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.
Our ability to promote inclusivity and belonging for all employees helps to attract and retain excellent talent, boost innovation, foster collaboration, increase employee engagement, and ultimately improve business performance. Our Employee Resource Groups (“ERGs”) are employee-led groups that create opportunities for employees to collaborate based on shared characteristics or life experiences.
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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.
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PeopleReady provides clients with dependable access to qualified associates for their on-demand, contingent general and skilled labor needs to supplement their permanent workforce, across a broad range of industries including construction, transportation, manufacturing, retail, hospitality and energy.
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Our business segments are dedicated to workforce solutions tailored to our clients’ needs and the industries in which they operate.
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Page - 6 Table of Contents ◦ Stafftrack ® , a proprietary hiring and workforce management software, enables our Staff Management, SIMOS and RenewableWorks brands to recruit and connect the best candidates with on-site assignments.
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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.
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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. • Expansion : We continue to evaluate opportunities to expand our market presence in high-growth, less cyclical and under-penetrated end markets, as well as high-value roles. ◦ Investments in skills development programs within our contingent staffing businesses will continue to enhance our strong position in attractive skilled trades areas, including energy and commercial driving.
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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 ® .
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Also, we have opportunities to drive revenue expansion with our growing momentum in health care, including from our recent acquisition of Healthcare Staffing Professionals, Inc. ◦ Within our human resource outsourcing business, we continue to leverage our strong brand reputation and innovative technology to expand into higher-skilled placements, including professional search.
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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. • 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.
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We are also focused on capturing growth opportunities in attractive end markets such as technology and professional services. • Optimize our business model to enable greater focus on sales : We will continue to optimize our business model and leverage our technology investments to enable a renewed focus on sales growth, including cross-selling opportunities across our brands.
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Continued investment in specialized sales, recruiting and service expertise will create a more seamless experience for our clients to access all our services with more comprehensive solutions to enhance their performance and our growth.
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For example, our new, proprietary version of JobStack is allowing us to realize operational efficiencies, offering our PeopleReady employees time to concentrate on growing sales. In addition, we are aligning our PeopleReady branches to newly established territories, each with dedicated sales resources to expand sales coverage and optimize our footprint.
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Our business segments offer complementary workforce solutions with unique value propositions to meet our clients’ demands for talent. • Our RPO business continues to leverage our strong brand and innovative technology for high-volume sourcing and dedicated client service teams for connecting people to opportunities.
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In fiscal 2024, we enhanced the process by creating a new leadership competency model, emphasizing that how we accomplish our work is just as important as the work we accomplish. Our leadership competency model outlines and defines expected behaviors for how we work and provides the foundation for successful performance and development.
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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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Our performance management process consists of four stages to guide our employees through goal setting, ongoing monitoring, and formal performance discussions, which directly impact the annual merit process. This standardized process also ensures that employees in comparable positions are similarly evaluated. Our performance management process is also designed for ongoing career growth, including succession planning.
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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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During 2024, our employees completed nearly 9,000 trainings. Health and wellness We emphasize a commitment to health and wellness as a key component of our comprehensive total rewards approach to attract, motivate and retain top talent.
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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.
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We prioritize offering a range of health and wellness benefits, including wellness initiatives, retirement and financial resources, comprehensive health care coverage and resources to support work-life balance. These initiatives are designed to enhance employee well-being, boost productivity and align with our goal of fostering a thriving and engaged workforce to maintain a competitive edge in the industry.
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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.
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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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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.
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The 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.
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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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TrueBlue’s ability to embrace inclusion helps to attract and retain excellent talent, boost innovation, foster collaboration, and increase employee engagement. Because our client population is comprised of a wide variety of demographics and backgrounds, having a diverse workforce boosts client perception of the organization, improves the client experience, helps us be responsive to our clients’ needs, and increases client satisfaction.
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Our Chief Executive Officer and executive team are committed to having opportunities and a career path for everyone in the organization. Our Chief Diversity Officer leads the Diversity, Equity & Inclusion Council (the “Council”). The Council is a group of employees across multiple service lines who design and launch initiatives that advance acceptance and foster a diverse and inclusive workplace.
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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.
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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.
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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.
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Our benefits include health, dental and vision insurance, health savings and flexible spending accounts, paid time off, family leave, mental health resources and family care resources. Page - 10 Table of Contents Our associates Associates are the individuals who make up our contingent workforce to serve the needs of our staffing clients.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf our debt level significantly increases in the future, it could have significant consequences for the operation of our business including requiring us to dedicate a significant portion of our cash flow from operations to servicing our debt rather than using it for our operations; limiting our ability to obtain additional debt financing for future working capital, capital expenditures, or other corporate purposes; limiting our ability to take advantage of significant business opportunities, such as acquisitions; limiting our ability to react to changes in market or industry conditions; and putting us at a disadvantage compared to competitors with less debt.
Biggest changeIt could also limit our ability to obtain additional debt financing for future working capital, capital expenditures, or other corporate purposes; our ability to take advantage of significant business opportunities, such as acquisitions; our ability to react to changes in market or industry conditions; and put us at a disadvantage compared to competitors with less debt.
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.
Acquiring technological resources and Page - 12 Table of Contents 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.
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.
We face continued uncertainty surrounding ongoing hiring tax credits we utilize, and for the 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.
Activist shareholders who disagree with the composition of the Board, our strategy or the way the Company is managed may seek to effect change through various strategies and channels, such as through commencing a proxy contest, making public statements critical of our performance or business, or engaging in other similar activities.
Activist shareholders or others who disagree with the composition of the Board, our strategy or the way the Company is managed may seek to effect change through various strategies and channels, such as through commencing a proxy contest, making public statements critical of our performance or business, or engaging in other similar activities.
Failure to protect our intellectual property could harm our business, and we face the risk that our services or products may infringe upon the intellectual property rights of others. We have invested in developing specialized technology and intellectual property, proprietary systems, processes and methodologies that we believe provide us a competitive advantage in serving clients.
Failure to protect our intellectual property could harm our business, and we face the risk that our services or products may infringe upon the intellectual property rights or contractual rights of others. We have invested in developing specialized technology and intellectual property, proprietary systems, processes and methodologies that we believe provide us a competitive advantage in serving clients.
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.
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, inclusion and belonging, human capital management, data privacy and security, supply chains (including human rights issues) and climate change, among other topics.
Client concentration exposes us to concentrated credit risk, as a significant portion of our accounts receivable may be from a small number of clients. If we are unable to collect our receivables, or are required to take additional reserves, our results and cash flows will be adversely affected.
Client concentration also exposes us to concentrated credit risk, as a significant portion of our accounts receivable may be from a small number of clients. If we are unable to collect our receivables, or are required to take additional reserves, our results and cash flows will be adversely affected.
Negative perceptions or publicity regarding our employees, business practices, vendors, clients, or business partners may adversely affect our brand and reputation. We may not be successful in detecting, preventing, or negating all changes in or impacts on our reputation, including reputational effects of negative social media use by our clients, employees, or associates.
Negative perceptions or publicity regarding our employees, business practices, vendors, clients, or business partners may adversely affect our brand and reputation. We may not be successful in detecting, preventing, or negating all changes in or impacts on our reputation, including reputational effects of negative social media use by our clients, employees, candidates, or associates.
We cannot be sure that our services and products, or the products of others that we offer to our clients, do not infringe on the intellectual property rights of third parties, and we may have infringement claims asserted against us or our clients.
We cannot be sure that our services and products, or the products of others that we offer to our clients, do not infringe on the intellectual property rights or contractual rights of third parties, and we may have infringement claims, contractual claims, or intellectual property claims asserted against us or our clients.
It is difficult for us to forecast future demand for our services due to the inherent uncertainty in forecasting the direction and strength of economic cycles and the project nature of our staffing assignments.
It is difficult for us to forecast future demand for our services due to the inherent uncertainty in forecasting the direction and strength of economic cycles and the project-based nature of our staffing assignments.
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.
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 - 21 Table of Contents The price of our common stock may fluctuate significantly, which may result in losses for investors.
The uncertainty can be exacerbated by volatile economic conditions, which has caused and may continue to cause clients to reduce or defer projects for which they utilize our services. The negative impact to our business can occur before, during or after a decline in economic activity is seen in the broader economy.
The uncertainty can be exacerbated by volatile economic conditions, which have caused and may continue to cause clients to reduce or defer projects for which they utilize our services. The negative impact to our business can occur before, during or after a decline in economic activity is seen in the broader economy.
When it is difficult for us to accurately forecast future demand, we may not be able to determine the optimal level of personnel and investment necessary to profitably manage our business in light of opportunities and risks we face. Advances in technology may disrupt the labor and recruiting markets.
When it is difficult for us to accurately forecast future demand, we may not be able to determine the optimal level of personnel and investment necessary to profitably manage our business in light of opportunities and risks we face. Advances in technology may disrupt the labor and recruiting markets and weaken the demand for our services.
Our principal sources of liquidity are funds generated from operating activities, available cash and cash equivalents, and borrowings under our Revolving Credit Facility. We must have sufficient sources of liquidity to meet our working capital requirements, fund our workers’ compensation collateral requirements, service our outstanding indebtedness, and finance investment opportunities.
Our principal sources of liquidity are funds generated from operating activities, available cash and cash equivalents, and borrowings under our Revolving Credit Facility. We must have sufficient sources of liquidity to meet our working capital requirements, fund any increases to our workers’ compensation collateral requirements, service our outstanding indebtedness, and finance investment opportunities.
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 systems and networks, and those 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.
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.
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.
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.
Page - 18 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.
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 business strategy is focused 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.
These factors include, but are not limited to, changes in general economic conditions, including those caused by COVID-19; social unrest; announcement of new services or acquisitions by us or our competitors; changes in financial estimates or other statements by securities analysts; changes in industry trends or conditions; regulatory developments; and any major change in our Board, leadership team or management.
These factors include, but are not limited to, changes in general economic conditions, including social unrest; announcement of new services or acquisitions by us or our competitors; changes in financial estimates or other statements by securities analysts; changes in industry trends or conditions; regulatory developments; and any major change in our Board, leadership team or management.
With operations in every state and multiple foreign countries, we are subject to numerous risks outside of our control, including risks arising from natural disasters, such as fires, earthquakes, hurricanes, floods, tornadoes, unusual weather conditions, pandemic outbreaks such as the COVID-19 pandemic and other global health emergencies, unplanned utility outages, terrorist acts or disruptive global political events including war, or similar disruptions that could materially adversely affect our business and financial performance.
With operations in every state and multiple foreign countries, we are subject to numerous risks outside of our control, including risks arising from natural disasters, such as fires, earthquakes, hurricanes, floods, tornadoes, unusual weather conditions, other impacts of climate change, pandemic outbreaks and other global health emergencies, unplanned utility outages, terrorist acts or disruptive global political events including war, or similar disruptions that could materially adversely affect our business and financial performance.
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.
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, app-based companies and other non-traditional competitors and resources to our industry.
In particular, we are making significant investments to advance our technology, and we cannot be sure that those initiatives will be successful, will not interrupt our operations, or that we will achieve a return on our investment. These events could cause material harm to our business, operating results or financial condition.
In particular, we have made significant investments to advance our technology, and we cannot be sure that those initiatives will be successful, will not interrupt our operations, or that we will achieve a return on our investment. These events could cause material harm to our business, operating results or financial condition.
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.
New business initiatives in new end markets or new geographies, including initiatives outside of our core business offerings, 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.
The cost to comply, and any inability to comply with government regulation, could have a material adverse effect on our business and financial results. Increases or changes in government regulation of the workplace, contingent staffing, the employer-employee relationship, or judicial or administrative proceedings related to such regulation, could materially harm our business.
The cost to comply, and any inability to comply with government regulation, could have a material adverse effect on our business and financial results. Increases or changes in government regulation of the workplace, contingent staffing, the employer-employee relationship, immigration laws, procedures, and enforcement practices, or judicial or administrative proceedings related to such regulation, could materially harm our business.
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.
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.
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.
Our associates, candidates and clients increasingly demand technological innovation to improve access to and delivery of our services. Our clients increasingly rely on automation, artificial intelligence (“AI”), machine learning and other new technologies to reduce their dependence on labor needs, which may reduce demand for our staffing and recruiting services and impact our operations.
If any factor, including unethical behavior, illegal conduct, poor performance or negative publicity, whether or not true, hurts our reputation, we may experience negative repercussions which could harm our business. We may not achieve the intended effects of our business strategy which could negatively impact our results.
If any factor, including unethical behavior, illegal conduct, poor performance or negative publicity, whether or not true, hurts our reputation, we may experience reduced demand for our services, which could harm our business. We may not achieve the intended effects of our business strategy which could negatively impact our results.
RISKS RELATED TO OUR INDUSTRY Our workforce solutions are subject to extensive government regulation and the imposition of additional regulations, which could materially harm our future earnings. Our workforce solutions are subject to extensive federal, state, local and foreign government regulation.
Page - 17 Table of Contents RISKS RELATED TO OUR INDUSTRY Our workforce solutions are subject to extensive government regulation and the imposition of additional regulations, which could materially harm our future earnings. Our workforce solutions are subject to extensive federal, state, local and foreign government regulation.
We actively manage the safety of our associates through our safety programs and actively control costs with our network of workers’ compensation related service providers. These activities have had a positive impact creating favorable adjustments to workers’ compensation liabilities recorded in the current and prior periods.
We actively manage the safety of our associates through our safety programs and actively control costs with our network of workers’ compensation related service providers. These activities have had a positive impact creating favorable adjustments to workers’ compensation liabilities recorded in recent years.
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.
These claims may harm our reputation, result in financial liability or prevent us from offering some services or products to clients. Our efforts to maintain adequate compliance policies and controls may not prevent violations that could result in significant fines and penalties.
Our clients have in the past and could in the future terminate their contracts or materially reduce their requested levels of service at any time. Although we have no client that represents over 10% of our consolidated revenue, there are a few clients that exceed 10% of revenues within some of our reportable segments.
Our clients have in the past and could in the future terminate their contracts or materially reduce their requested levels of service at any time. Although we have no client that represents over 10% of our consolidated revenue, there may be clients that exceed 10% of revenue within some of our reportable segments.
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.
A material incident involving system failure, data loss or security breach could harm our reputation, disrupt our operations and the services we provide to clients, 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.
Reduced demand for our services from larger clients or certain industries, or supply interruptions for manufacturing, have had, and in the future could have, a material adverse effect on our business, financial condition, and results of operations.
Reduced demand for our services from larger clients or certain industries, or supply interruptions for manufacturing, have had, and could continue to have, a material adverse effect on our business, financial condition, and results of operations.
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.
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.
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.
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.
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 USE OF TECHNOLOGY Cybersecurity vulnerabilities and other incidents could lead to the improper disclosure of information about our clients, candidates, associates and employees, which could materially harm our business. Our business requires the use, processing, and storage of confidential information about candidates, associates, employees and clients.
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.
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 businesses we acquire. These events could cause material harm to our business, operating results or financial condition. Outsourcing certain aspects of our business could result in disruption and increased costs.
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.
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.
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 significantly changed our operating 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 believe these efforts are important to our long-term success.
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.
We are subject to federal taxes, a multitude of state and local taxes in the United States (“U.S.”), and taxes in foreign jurisdictions. Changes in the mix of our taxable income by jurisdiction, or an increase in the rate of those taxes, could have a material impact on our financial condition or results of operations.
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.
Managing and implementing 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.
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.
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.
Additional indebtedness could also include covenants or other restrictions that would impede our ability to manage our operations. We may also issue equity securities to pay for an acquisition, which could result in dilution to our shareholders. Any acquisitions we announce could be viewed negatively by investors, which may adversely affect the price of our common stock.
We may also issue equity securities to pay for an acquisition, which could result in dilution to our shareholders. Any acquisitions we announce could be viewed negatively by investors, which may adversely affect the price of our common stock.
Acquisitions can also result in the addition of goodwill and intangible assets to our financial statements and we may be required to record a significant charge in our financial statements during the period in which we determine an impairment of our acquired goodwill and intangible assets has occurred, which would negatively impact our financial results.
Future acquisitions may result in the addition of goodwill and intangible assets to our balance sheet. Future events or changes in circumstances may require us to record a significant charge in our financial statements during the period in which we determine an impairment of our acquired goodwill and intangible assets has occurred, which would negatively impact our financial results.
Our inability to recruit, train, motivate, retain, integrate and provide a safe working environment to a sufficient number of qualified individuals may delay or affect the speed and quality of our strategy execution and planned growth.
The turnover rate in the employment services industry is high, and qualified individuals may be difficult to attract and hire. Our inability to recruit, train, motivate, retain, integrate and provide a safe working environment to a sufficient number of qualified individuals may delay or affect the speed and quality of our strategy execution and planned growth.
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.
We use both internally developed AI, as well as various products into which our vendors have incorporated AI. The development, adoption, and use of AI 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.
Although our share repurchase program is intended to enhance long-term shareholder value, there is no assurance that it will do so and short-term stock price fluctuations could reduce the program’s effectiveness. Our level of debt and restrictions in our credit agreement could negatively affect our operations and limit our liquidity and our ability to react to changes in the economy.
Although our share repurchase program is intended to enhance long-term shareholder value, there is no assurance that it will do so and short-term stock price fluctuations could reduce the program’s effectiveness.
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.
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. Acquisitions may have an adverse effect on our business. We may make additional acquisitions as part of our business strategy.
Improper disclosure of, or access to, our clients’ information could materially harm our business. Our associates and employees may have access or exposure to confidential information about candidates, associates, employees and clients.
Our associates and employees may have access or exposure to confidential information about candidates, associates, employees and clients.
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.
Our systems and networks are also vulnerable to unintentional events such as fires, storms, floods, power loss, computer and network failures, and human error. 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 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.
We rely heavily on proprietary and third-party information technology systems, mobile device technology, data centers, cloud-based environments and other technology.
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.
While it is uncertain whether the U.S. will enact legislation responding to Pillar Two, certain countries in which we operate have or are in the process of adopting minimum tax legislation. 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.
The extent to which global pandemics impact our financial condition or results of operations will depend on factors such as the duration and scope of the pandemic, as well as whether there is a material impact on the businesses or productivity of our clients, employees, associates and other partners.
Global pandemics may impact our financial condition or results of operations and could have a material impact on the businesses or productivity of our clients, employees, associates and other partners.
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.
For example, algorithms and models utilized by generative AI that we use may have limitations, including bias, errors, and the inability to handle certain data sets.
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 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. We may be subject to actions of activist shareholders, which could disrupt our business and impact the trading value of our securities.
New entrants to the market include online and app-based staffing providers. Our competitors offer a variety of flexible workforce solutions.
New entrants to the market include online and app-based staffing providers. Our competitors offer a variety of flexible workforce solutions. Our clients in the past have decided, and we face the risk that our current or prospective clients may in the future decide, to insource the services we provide.
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.
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 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.
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.
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. Unexpected changes in claim trends on our workers’ compensation or an inability to obtain appropriate insurance coverage may negatively impact our financial condition.
We may be subject to actions of activist shareholders, which could disrupt our business and impact the trading value of our securities. We value constructive input from investors and regularly engage in dialogue with our shareholders regarding strategy and performance.
We value constructive input from investors and regularly engage in dialogue with our shareholders regarding strategy and performance.
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.
Page - 19 Table of Contents 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 and complex. We may fail to implement practices and procedures that comply with increasing foreign and domestic privacy regulations.
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.
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. Additionally, perceptions that we or our vendors do not adequately protect the privacy of information could harm our relationship with clients and employees.
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.
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. Our insurance carriers require us to collateralize a significant portion of our workers’ compensation obligation.
Failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting or fail to prevent fraud.
It is possible that these legislative changes could have an adverse impact on our effective tax rates or operations. Page - 16 Table of Contents Failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting or fail to prevent fraud.
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.
We believe our competitive advantage is providing unique solutions for each client, which requires us to have trained and engaged employees. 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.
Failure of our systems, or damage to our facilities, may cause significant interruption to our business and require significant additional capital and management resources to resolve, causing material harm to our business. GENERAL RISK FACTORS Our results of operations could materially deteriorate if we fail to attract, develop and retain qualified employees.
Failure of our systems, or damage to our facilities, may cause significant interruption to our business and require significant additional capital and management resources to resolve, causing material harm to our business. Our development and use of AI technology involves risks and uncertainties that could expose us to legal, reputational and financial harm.
Our reputation could be affected by our position, or silence, regarding one or more of these ESG initiatives.
These requirements, expectations, and/or frameworks, which can include assessments and ratings published by third-party firms, are not synchronized and vary by stakeholder, industry, and geography. Our reputation could be affected by our position, or silence, regarding one or more of these ESG initiatives.
If these third parties fail to perform their obligations or cease to work with us, our business operations could be negatively affected.
If these third parties fail to perform their obligations or cease to work with us, our business operations could be negatively affected. Furthermore, there is risk of system failures, disruptions, or vulnerabilities that could compromise the integrity, security, or privacy of generated content. These limitations or failures could result in reputational damage, legal liabilities, or loss of user confidence.
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.
Page - 14 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. Additional indebtedness could also impact financial covenants or other restrictions that would impede our ability to manage our operations.
Our performance is dependent on attracting and retaining qualified employees who are able to meet the needs of our clients. We believe our competitive advantage is providing unique solutions for each client, which requires us to have trained and engaged employees.
Page - 20 Table of Contents GENERAL RISK FACTORS Our results of operations could materially deteriorate if we fail to attract, develop and retain qualified employees. Our performance is dependent on attracting and retaining qualified employees who are able to meet the needs of our clients.
Removed
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.
Added
Despite diligence and integration planning, acquisitions may also present challenges in bringing together different work cultures and personnel. Difficulties in integrating our acquisitions, including attracting and retaining talent to grow and manage these acquired businesses, may adversely affect our results of operations.
Removed
The security controls over sensitive or confidential information and other practices we and our third-party vendors follow may not prevent the improper access to, disclosure of, or loss of such information. Continued investments in cybersecurity will increase our costs and a failure to prevent access to our systems could lead to penalties, litigation, and damage to our reputation.
Added
As a result of past acquisitions, we have maintained goodwill and intangible assets on our balance sheet that may decrease our earnings or increase our losses if we recognize an impairment. All of our acquisitions have involved purchase prices in excess of tangible net asset values, resulting in the creation of goodwill and other intangible assets.
Removed
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.
Added
Page - 15 Table of Contents Our level of debt and restrictions in our credit agreement could negatively affect our operations and limit our liquidity and our ability to react to changes in the economy.
Removed
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.
Added
If our debt level significantly increases in the future, it could have significant consequences for the operation of our business including requiring us to dedicate a significant portion of our cash flow from operations to servicing our debt rather than using it for our operations.
Removed
Any public health emergencies, including a real or potential global pandemic such as those caused by COVID-19 or even a particularly virulent flu or respiratory virus could decrease demand for our services or our ability to provide such services.
Added
We may not be able to align our cost structure with our current revenue level, which in turn may require additional financing in the future that may not be available or may be available only on unfavorable terms. Our efforts to align our cost structure with the current state of the staffing and recruitment markets may not be successful.
Added
When revenue is negatively impacted by weakening client demand, we have and may again find it necessary to take cost cutting measures to minimize the impact on our profitability, such as the workforce reductions we experienced in fiscal 2024.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

7 edited+0 added−1 removed13 unchanged
Biggest changeAt least quarterly, management provides the I&T Committee with updates regarding our cybersecurity risks, threats, and efforts focused on mitigating those risks. These updates are provided by our Chief Technology Officer (“CTO”) and our CISO, and include recent developments in cybersecurity, the company’s actual experience with cybersecurity incidents, and the systems and processes in place to defend against cyberattacks.
Biggest changeThese updates are provided by our Chief Digital Officer (“CDO”) and our CISO, and include recent developments in cybersecurity, the company’s actual experience with cybersecurity incidents, and the systems and processes in place to defend against cyberattacks. Should a material or potentially material cybersecurity incident occur, the Board will immediately be notified of such event by the company’s CEO.
Additional information We describe how the risks related to cybersecurity could materially impact our business strategy, results of operations, or financial condition, in more detail under the heading “Risks Related to Cybersecurity, Data Privacy and Information Security,” see Item 1A. Risk Factors of this Annual Report on Form 10-K.
Page - 23 Table of Contents Additional information We describe how the risks related to cybersecurity could materially impact our business strategy, results of operations, or financial condition, in more detail under the heading “Risks Related to Cybersecurity, Data Privacy and Information Security,” see Item 1A. Risk Factors of this Annual Report on Form 10-K.
Page - 21 Table of Contents Ongoing activities To provide for the availability of critical data and systems, maintain regulatory compliance, manage our material risks from cybersecurity threats, and protect against, detect, and respond to cybersecurity incidents, we undertake the following activities: • Perform an annual review of all of our policies related to cybersecurity; • Monitor emerging data protection laws and implement changes to our policies to remain compliant; • Run tabletop exercises with the cybersecurity incident response team, including executive team members, to simulate a response to a cybersecurity incident and use the findings to improve our processes and technologies; • Conduct regular phishing email simulations and quarterly security awareness trainings for all employees to enhance awareness and responsiveness to such possible threats; • Require all employees to review and acknowledge the company’s information security policies upon hiring and annually thereafter; • Leverage the company’s incident response plan framework and a full set of cybersecurity technology tools, processes and procedures including, for example, security incident and cyber event management, endpoint detection and response, extended detection and response, e-mail gateway, and vulnerability management to monitor any cyber threats and to proactively detect, respond and recover when there is an actual or potential cybersecurity incident; • Carry insurance that provides protection against the potential losses arising from a cybersecurity incident; • Conduct annual penetration testing of our external technology and systems perimeter, including remediation and retesting; • Conduct security assessments for code level vulnerabilities of all our internally developed business-critical applications; and • Engage independent third parties to perform penetration testing of select business applications.
Page - 22 Table of Contents Ongoing activities To provide for the availability of critical data and systems, maintain regulatory compliance, manage our material risks from cybersecurity threats, and protect against, detect, and respond to cybersecurity incidents, we undertake the following activities: • Perform an annual review of all of our policies related to cybersecurity; • Collaborate with the legal department for awareness of emerging data protection laws and implement changes to our policies to remain compliant; • Run tabletop exercises with the cybersecurity incident response team, including executive team members, to simulate a response to a cybersecurity incident and use the findings to improve our processes and technologies; • Conduct monthly phishing email simulations and quarterly security awareness trainings for all employees to enhance awareness and responsiveness to such possible threats; • Require all employees to review and acknowledge the company’s information security policies upon hiring and annually thereafter; • Send periodic company-wide communications to raise employee awareness of social engineering and other forms of attack and how to guard against those; • Leverage the company’s incident response plan framework and a full set of cybersecurity technology tools, processes and procedures including, for example, security incident and cyber event management, endpoint detection and response, extended detection and response, e-mail gateway, and vulnerability management to monitor any cyber threats and to proactively detect, respond and recover when there is an actual or potential cybersecurity incident; • Carry insurance that provides protection against the potential losses arising from a cybersecurity incident; • Conduct annual penetration testing of our external technology and systems perimeter, including remediation and retesting; • Conduct security assessments for code level vulnerabilities of all our internally developed business-critical applications; and • Engage independent third parties to perform penetration testing of select business applications.
In addition, we assess our cybersecurity threat risks by conducting periodic internal and external risk assessments and annual external penetration testing, as well as maintaining an active vulnerability management program to assess threats at the network, systems and application levels.
In 2024, we recertified our ISO 27001 Information Security Management certification to the new 2022 standard. In addition, we assess our cybersecurity threat risks by conducting periodic internal and external risk assessments and annual external penetration testing, as well as maintaining an active vulnerability management program to assess threats at the network, systems and application levels.
Page - 22 Table of Contents In the last three fiscal years, we have not experienced any cybersecurity incidents that have materially impacted or are reasonably likely to materially impact our business strategy, results of operations, or financial condition.
In the last three fiscal years, we have not experienced any cybersecurity incidents that have materially impacted or are reasonably likely to materially impact our business strategy, results of operations, or financial condition. CYBERSECURITY GOVERNANCE Cybersecurity is an important part of our risk management processes and an area of focus for our Board and management.
CYBERSECURITY GOVERNANCE Cybersecurity is an important part of our risk management processes and an area of focus for our Board and management. Our Innovation and Technology (“I&T”) Committee of the Board is responsible for the oversight of risks from cybersecurity threats. All of our Board members are members of the I&T Committee.
Our Innovation and Technology (“I&T”) Committee of the Board is responsible for the oversight of risks from cybersecurity threats. All of our Board members are members of the I&T Committee. At least quarterly, management provides the I&T Committee with updates regarding our cybersecurity risks, threats, and efforts focused on mitigating those risks.
Should a material or potentially material cybersecurity incident occur, the Board will immediately be notified of such event by the company’s CEO. Our CTO and CISO frequently communicate with affected business and finance leaders regarding any cybersecurity related event. Our cybersecurity risk management and strategy processes are led by our CTO and our CISO.
Our CDO and CISO frequently communicate with affected business and finance leaders regarding any cybersecurity related event. Our cybersecurity risk management and strategy processes are led by our CDO and our CISO.
Removed
In September 2021, we received our ISO 27001 Information Security Management certification. In fiscal 2022 and 2023, management performed procedures to validate our continued conformity with the ISO 27001 standard and concluded that existing controls continued to operate effectively.

Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−0 removed1 unchanged
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.
Biggest changeWhile 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.
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.
We do not anticipate any difficulty in renewing these leases or in finding alternative sites in the ordinary course of business. We continue 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.
Added
We own an office building in Tacoma, Washington, which serves as our corporate headquarters. The Tacoma headquarters is currently being marketed for sale. See Note 5: Supplemental Balance Sheet Information, to our consolidated financial statements found in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+0 added−0 removed2 unchanged
Biggest changePeriod 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.
Biggest changePeriod 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) 09/30/2024 through 10/27/2024 896 $7.71 — $33.5 million 10/28/2024 through 11/24/2024 231 $7.60 — $33.5 million 11/25/2024 through 12/29/2024 — $— — $33.5 million Total 1,127 $7.69 — (1) During the thirteen weeks ended December 29, 2024, we purchased 1,127 shares in order to satisfy employee tax withholding obligations upon the vesting of restricted stock.
These shares were not acquired pursuant to our publicly announced share repurchase program. (2) Weighted average price paid per share does not include any adjustments for commissions. (3) On January 31, 2022, our Board of Directors authorized a $100.0 million share repurchase program of our outstanding common stock.
These shares were not acquired pursuant to our publicly announced share repurchase program. (2) Weighted average price paid per share does not include any adjustments for commissions or excise tax on share repurchases. (3) On January 31, 2022, our Board of Directors authorized a $100.0 million share repurchase program of our outstanding common stock.
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.
All indices shown in the graph have been reset to a base of 100 as of December 29, 2019, 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 1980-2024. Index Data: Copyright Standard and Poor’s, Inc. Used with permission. All rights reserved.
Used with permission. All rights reserved. Copyright 1980-2025. 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 364 shareholders of record as of February 14, 2024.
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 232 shareholders of record as of February 12, 2025.
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.
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 29, 2024.
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.
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 29, 2024, $33.5 million remains available for repurchase under the existing authorization.
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.
Page - 25 Table of Contents TrueBlue stock comparative performance graph The following graph depicts our stock price performance from December 29, 2019 through December 29, 2024, relative to the performance of the S&P SmallCap 600 Index and S&P 1500 Human Resources and Employment Services Index.
COMPARISON 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.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN (1) Total return analysis 2019 2020 2021 2022 2023 2024 TrueBlue, Inc. $ 100 $ 81 $ 117 $ 81 $ 65 $ 33 S&P SmallCap 600 Index $ 100 $ 112 $ 140 $ 119 $ 138 $ 151 S&P 1500 Human Resources and Employment Services Index $ 100 $ 103 $ 151 $ 115 $ 122 $ 146 (1) Graphic prepared by Zacks Investment Research, Inc.

Item 7. Management's Discussion & Analysis

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

91 edited+41 added−32 removed41 unchanged
Biggest changeOperating outlook • We expect revenue for the fiscal first quarter of 2024 to decline between 16% and 10% as compared to the same period in the prior year, primarily due to our clients’ continued response to macroeconomic uncertainty. • We anticipate gross profit as a percentage of revenue to decline between 210 and 170 basis points for the fiscal first quarter of 2024, compared to the same period in the prior year, primarily due to the change in business mix and higher workers’ compensation expense. • For the fiscal first quarter of 2024, we anticipate SG&A expense to be between $109 million and $113 million. • We expect basic weighted average shares outstanding to be approximately 31 million for the fiscal first quarter of 2024.
Biggest change(“HSP”) in late January 2025. • For the fiscal first quarter of 2025 we anticipate gross profit as a percentage of revenue to decline between 70 and 30 basis points as compared to the same period in the prior year, primarily due to continued changes in business mix. • For the fiscal first quarter of 2025, we anticipate SG&A expense to be between $93 million and $97 million, representing improvement compared to the same period in the prior year, and the result of our ongoing cost management efforts. • For the fiscal first quarter of 2025 we expect basic weighted average shares outstanding to be approximately 30 million.
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.
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 and other income (expense), income taxes, and other costs and benefits not considered to be ongoing.
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.
Page - 37 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.
These events or circumstances could include a significant change in general economic conditions, deterioration in industry environment, changes in cost factors, declining operating performance indicators, legal factors, competition, client engagement, changes in the carrying amount of net assets, sale or disposition of a significant portion of a reporting unit, or a sustained decrease in share price.
These events or circumstances could include a significant change in general economic conditions, deterioration in industry environment, changes in cost factors, declining operating performance indicators, legal factors, competition, client engagement, changes in the carrying amount of net assets, sale or disposition of a significant portion of a reporting unit, or a sustained decrease in stock price.
Goodwill acquired in business combinations is assigned to the reporting unit(s) expected to benefit from the combination as of the acquisition date. Acquisition-related costs are expensed as incurred. Our acquisitions may include contingent consideration, which require us to recognize the fair value of the estimated liability at the time of the acquisition.
Goodwill acquired in business combinations is assigned to the reporting unit(s) expected to benefit from the combination as of the acquisition date. Acquisition-related costs are expensed as incurred. Our acquisitions may include contingent consideration, which requires us to recognize the fair value of the estimated liability at the time of the acquisition.
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.
Page - 39 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.
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.
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 economic changes on each reporting unit. We estimate the fair value using a weighting of the income and market valuation approaches.
See Note 12: Income Taxes , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for details on our current valuation allowance. NEW ACCOUNTING STANDARDS See Note 1: Summary of Significant Accounting Policies, to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
See Note 13: Income Taxes , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for details on our current valuation allowance. NEW ACCOUNTING STANDARDS See Note 1: Summary of Significant Accounting Policies, to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
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.
Based on our interim 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.
As a result of this impairment test, we concluded that a trade name/trademark related to our PeopleManagement segment exceeded its estimated fair value and we recorded a non-cash impairment charge of $0.6 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended December 31, 2023.
As a result of this impairment test, we concluded that a trade name/trademark related to our PeopleManagement segment exceeded its estimated fair value and we recorded a non-cash impairment charge of $0.6 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended December 29, 2024.
As a result of this impairment test, we concluded that a trade name/trademark related to the PeopleManagement segment exceeded its estimated fair value and we recorded a non-cash impairment charge of $0.6 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended December 31, 2023.
As a result of this impairment test, we concluded that a trade name/trademark related to the PeopleManagement segment exceeded its estimated fair value and we recorded a non-cash impairment charge of $0.6 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended December 29, 2024.
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.
We continue to make investments in online and mobile apps to increase the competitive differentiation of our services long-term and improve the efficiency of our service delivery model. In addition, we continue to transition our technology from on-premise software platforms to cloud-based software solutions, to increase automation and the efficiency of running our business.
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.
As client demand 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.
While client payment terms are generally 90 days or less, we pay our associates weekly, so additional financing through the use of our Revolving Credit Facility is sometimes necessary to support revenue growth. We also manage working capital through efficient cost management and strategically timing payments of accounts payable.
While client payment terms are generally 90 days or less, we pay our associates daily and weekly, so additional financing through the use of our Revolving Credit Facility is sometimes necessary to support working capital needs in times of revenue growth. We also manage working capital through efficient cost management and strategically timing payments of accounts payable.
See Note 8: Commitments and Contingencies , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for additional details on our workers’ compensation commitments. We continue to actively manage workers’ compensation cost by focusing on improving our associates’ safety programs, and actively control costs with our network of service providers.
See Note 9: Commitments and Contingencies , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for additional details on our workers’ compensation commitments. We continue to actively manage workers’ compensation costs by focusing on improving our associate safety programs, and actively control costs with our network of service providers.
If the carrying value of the reporting unit exceeds its fair value, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value of the goodwill. We consider a reporting unit’s fair value to be substantially in excess of its carrying value at a 20% premium or greater.
If the carrying value exceeds the fair value, we recognize an impairment charge in an amount equal to the excess, not to exceed the carrying value of the goodwill. We consider a reporting unit’s fair value to be substantially in excess of its carrying value at a 20% premium or greater.
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.
The quantitative impairment test, if necessary, utilizes the relief from royalty method to determine the fair value of each of our trade names/trademarks. If the carrying value exceeds the fair value, we recognize an impairment charge in an amount equal to the excess, not to exceed the carrying value.
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.
Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss. For example, the impact of discrete items, tax credits, and non-deductible expenses on our effective tax rate is greater when our pre-tax income or loss is lower.
Based on an analysis of the risk characteristics of our clients and associated receivables, we have concluded our pools are as follows: • PeopleReady and Centerline Drivers (“Centerline”) have a large, diverse set of clients, generally with frequent, low dollar invoices due to the daily nature of the work we perform.
Based on an analysis of the risk characteristics of our clients and associated receivables, we have concluded our pools are as follows: • PeopleReady has a large, diverse set of clients, generally with frequent, low dollar invoices due to the daily nature of the work we perform.
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.
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.
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.
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 31, 2023 for discussion of fiscal 2023 compared to fiscal 2022. FUTURE OUTLOOK The following highlights represent our operating outlook.
See Note 14: Segment Information , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for additional details on our reportable segments, as well as a reconciliation of segment profit to income (loss) before tax expense (benefit).
See Note 15: Segment Information , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for additional details on our reportable segments, including a reconciliation of segment profit to income (loss) before tax expense (benefit).
See Note 6: Workers' Compensation Insurance and Reserves , and Note 3: Restricted Cash and Investments , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for details on our workers’ compensation program as well as the restricted cash and investments held in Trust.
See Note 7: Workers' Compensation Insurance and Reserves , and Note 4: Restricted Cash, Cash Equivalents and Investments , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for details on our workers’ compensation program as well as the restricted cash, cash equivalents and investments held in Trust.
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.
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 charges were recorded during fiscal 2024, 2023 or 2022.
SUMMARY OF CRITICAL ACCOUNTING ESTIMATES Management’s discussion and analysis of financial condition and results of operations discusses our financial statements, which have been prepared in accordance with U.S. GAAP.
Page - 35 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS SUMMARY OF CRITICAL ACCOUNTING ESTIMATES Management’s discussion and analysis of financial condition and results of operations discusses our financial statements, which have been prepared in accordance with U.S. GAAP.
These actions have had a positive impact creating favorable adjustments to workers’ compensation liabilities recorded in the prior periods. Continued favorable adjustments to our prior year workers’ compensation liabilities are dependent on our ability to continue to aggressively lower accident rates and costs of our claims.
These actions have had a positive impact creating favorable adjustments to workers’ compensation liabilities recorded in the prior periods, as well as lowering our required collateral levels. Continued favorable adjustments to our prior year workers’ compensation liabilities are dependent on our ability to continue to aggressively lower accident rates and costs of our claims.
The fair value of the trade name/trademark related to the PeopleScout segment was substantially in excess of its carrying value of $2.1 million, and therefore did not result in an impairment.
As of our impairment testing date, the fair value of the trade name/trademark related to the PeopleScout segment was substantially in excess of its carrying amount of $2.1 million, and therefore did not result in an impairment.
Such amounts can increase or decrease independent of our assessments and reserves. We continue to have risk that these collateral requirements may be increased by our insurers due to our loss history and market dynamics. We generally anticipate that our collateral commitments will continue to grow as we grow our business.
Such amounts can increase or decrease independent of our assessments and reserves. We continue to have risk that these collateral requirements may be increased by our insurers due to our loss history and market dynamics. We generally anticipate that our collateral commitments will grow as our business grows. We pay our premiums and deposit our collateral, if required, in installments.
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.
See Note 1: Summary of Significant Accounting Policies and Note 13: Income Taxes , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for additional information. Page - 31 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS Segment performance We evaluate segment performance based on segment revenue and segment profit.
As a result of this impairment test, we concluded that the carrying amount of our PeopleScout MSP reporting unit exceeded its fair value and we recorded a non-cash goodwill impairment charge of $8.9 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended December 31, 2023.
As a result of this impairment test, we concluded that the carrying amount of our PeopleReady reporting unit exceeded its fair value and we recorded a non-cash goodwill impairment charge of $59.1 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended December 29, 2024.
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.
For fiscal 2024 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 and our focus on resolving open claims in a timely manner.
Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit. If the fair value exceeds the carrying value, we conclude that no goodwill impairment has occurred.
The quantitative impairment test, if necessary, involves comparing the fair value of each reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit. If the fair value exceeds the carrying value, we conclude that no goodwill impairment has occurred.
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.
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 $24.5 million during the fiscal year ended December 29, 2024 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.
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.
FISCAL 2023 AS COMPARED TO FISCAL 2022 See Item 7. 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 31, 2023 for discussion of fiscal 2023 compared to fiscal 2022.
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.
Our principal ongoing cash needs are to finance working capital, fund capital expenditures, repay outstanding Revolving Credit Facility balances, and execute share repurchases. We may also need cash to fund future acquisitions. 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.
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.
Indefinite-lived intangible assets We have indefinite-lived intangible assets for trade names/trademarks related to businesses within our PeopleScout and PeopleManagement segments. We evaluate our indefinite-lived intangible assets for impairment on an annual basis as of the first day of our fiscal second quarter, or whenever events or circumstances make it more likely than not that an impairment may have occurred.
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.
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, and the net change in our Revolving Credit Facility.
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.
See Note 6: 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 2024 and 2023 indefinite-lived intangible asset impairment. There were no indefinite-lived intangible asset impairment charges recorded during fiscal 2022.
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.
A summary of our cash flows for each period are as follows: Fiscal year ended (in thousands) Dec 29, 2024 Dec 31, 2023 Net cash (used in) provided by operating activities $ (17,058) $ 34,754 Net cash used in investing activities (2,453) (32,322) Net cash used in financing activities (17,087) (37,583) Change in cash, cash equivalents and restricted cash and cash equivalents reclassified to assets held-for-sale — (300) Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents (1,608) (874) Net change in cash, cash equivalents and restricted cash and cash equivalents $ (38,206) $ (36,325) Cash flows from operating activities Operating cash flows consist of net income (loss) adjusted for non-cash benefits and expenses, and changes in operating assets and liabilities.
We monitor the existence of potential impairment indicators throughout the fiscal year. Goodwill We test for goodwill impairment at the reporting unit level. We consider our operating segments to be our reporting units for goodwill impairment testing. Our operating segments with remaining goodwill are PeopleReady, PeopleManagement Centerline, PeopleScout RPO and PeopleScout MSP.
We monitor the existence of potential impairment indicators throughout the fiscal year. Goodwill We test for goodwill impairment at the reporting unit level. We consider our operating segments to be our reporting units for goodwill impairment testing.
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.
Additionally, following performance of the 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 29, 2024.
We consider available positive and negative evidence when making such determination, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted, and results of recent operations.
We consider available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of existing deferred tax assets when making such determination, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted, and results of recent operations.
Accounts receivable allowance for credit losses We establish an estimate for the allowance for credit losses resulting from the failure of our clients to make required payments by applying an aging schedule to pools of assets with similar risk characteristics.
Page - 36 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS Accounts receivable allowance for credit losses Accounts receivable are recorded at the invoiced amount. We establish an estimate for the allowance for credit losses resulting from the failure of our clients to make required payments by applying an aging schedule to pools of assets with similar risk characteristics.
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.
The items described above contributed to our net loss of $125.7 million for the fiscal year ended December 29, 2024, compared to net loss of $14.2 million in 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.
Selling, general and administrative expense (in thousands, except percentages) 2024 2023 Selling, general and administrative expense $ 410,870 $ 494,603 Percentage of revenue 26.2 % 25.9 % Total company SG&A expense decreased by $83.7 million or 16.9% for the fiscal year ended December 29, 2024, compared to the prior year.
Management uses considerable judgment to determine key assumptions, including projected revenue, royalty rates and appropriate discount rates. Annual impairment test We performed our annual indefinite-lived intangible asset impairment test as of the first day of our fiscal second quarter of 2023.
Management uses considerable judgment to determine key assumptions, including forecasted future revenue, royalty rates and appropriate discount rates. Impairment test We performed an indefinite-lived intangible asset impairment test during our fiscal second quarter of 2024.
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.
In the event that we are not able to further reduce our accident rates or resolve open claims in a timely manner, 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.
Page - 36 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS As a result of our annual impairment test, we concluded that the carrying amount of the PeopleScout MSP reporting unit exceeded its fair value and we recorded a non-cash goodwill impairment charge of $8.9 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended December 31, 2023.
Page - 38 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS Based on the results of our interim impairment test, we concluded that the carrying amount of goodwill for the PeopleReady reporting unit exceeded the estimated fair value and we recorded a non-cash impairment charge of $59.1 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended December 29, 2024.
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.
Gross profit (in thousands, except percentages) 2024 2023 Gross profit $ 406,393 $ 506,059 Percentage of revenue 25.9 % 26.5 % Gross profit as a percentage of revenue contracted 60 basis points to 25.9% for the fiscal year ended December 29, 2024, compared to 26.5% for the prior year.
Past due or delinquent balances are identified based upon a review of aged receivables performed by collections and operations. Past due balances are written off when it is probable the receivable will not be collected. Changes in the allowance for credit losses are recorded in SG&A expense on the Consolidated Statements of Operations and Comprehensive Income (Loss).
The allowance for credit loss is reviewed and represents our best estimate of the amount of expected credit losses. Past due or delinquent balances are identified based upon a review of aged receivables performed by collections and operations. Past due balances are written off when it is probable the receivable will not be collected.
Annual impairment test We performed our annual goodwill impairment test as of the first day of our fiscal second quarter of 2023. The weighted average cost of capital used in our most recent impairment test was risk-adjusted to reflect the specific risk profile of the reporting units and ranged from 13.0% to 13.5%.
The weighted average cost of capital used in our most recent impairment test was risk-adjusted to reflect the specific risk profile of the reporting units and ranged from 13.5% to 14.5%.
Restricted cash and investments supporting our self-insured workers’ compensation obligation are held in a trust at the Bank of New York Mellon (“Trust”), and are used to pay workers’ compensation claims as they are filed.
The collateral typically takes the form of cash and cash-backed instruments, highly rated investment grade securities, letters of credit, and surety bonds. Restricted cash, cash equivalents and investments supporting our self-insured workers’ compensation obligation are held in a trust at the Bank of New York Mellon (“Trust”) and are used to pay workers’ compensation claims as they are filed.
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.
Net cash used in financing activities during the fiscal year ended December 29, 2024 was primarily due to use of $21.3 million to repurchase our common stock in the open market.
Page - 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.
Page - 27 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) 2024 % of revenue 2023 % of revenue Revenue from services $ 1,567,393 $ 1,906,243 Gross profit 406,393 25.9 % 506,059 26.5 % Selling, general and administrative expense 410,870 26.2 494,603 25.9 Depreciation and amortization 28,624 1.8 25,821 1.4 Goodwill and intangible asset impairment charge 59,674 3.8 9,485 0.5 Income (loss) from operations (92,775) (5.9) % (23,850) (1.3) % Interest and other income (expense), net 4,251 3,205 Income (loss) before tax expense (benefit) (88,524) (20,645) Income tax expense (benefit) 37,224 (6,472) Net income (loss) $ (125,748) (8.0) % $ (14,173) (0.7) % Net income (loss) per diluted share $ (4.17) $ (0.45) Revenue from services (in thousands, except percentages) 2024 Growth % Segment % of total 2023 Segment % of total Revenue from services: PeopleReady $ 868,549 (20.8) % 55.4 % $ 1,096,318 57.5 % PeopleScout 156,643 (31.7) % 10.0 229,334 12.0 PeopleManagement 542,201 (6.6) % 34.6 580,591 30.5 Total company $ 1,567,393 (17.8) % 100.0 % $ 1,906,243 100.0 % Total company revenue declined 17.8% to $1.6 billion for the fiscal year ended December 29, 2024, compared to the prior year.
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 - 33 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.
Under the Revolving Credit Facility, $6.2 million was utilized by outstanding standby letters of credit, leaving $293.8 million unused , which is constrained by our most restrictive covenant making $85.9 million available for additional borrowing.
An additional $2.7 million of the Revolving Credit Facility was utilized by outstanding standby letters of credit, leaving $244.7 million unused, of which $118.5 million is available for additional borrowing after considering our most restrictive covenant.
If, after assessing the totality of events and circumstances, we determine that it is more likely than not the fair value of the reporting unit is greater than its carrying amount, the quantitative impairment test is unnecessary. The quantitative impairment test, if necessary, involves comparing the fair value of each reporting unit to its carrying value, including goodwill.
Qualitative factors include macroeconomic conditions, industry and market conditions and overall company financial performance. If, after assessing the totality of events and circumstances, we determine that it is more likely than not the fair value of the reporting unit is greater than its carrying amount, the quantitative impairment test is unnecessary.
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.
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) 2024 % 2023 % Income tax expense (benefit) based on statutory rate $ (18,590) 21.0 % $ (4,335) 21.0 % Increase (decrease) resulting from: State income taxes, net of federal benefit 591 (0.7) (1,384) 6.7 Hiring tax credits, net (4,123) 4.7 (4,997) 24.2 Valuation allowance 56,792 (64.1) — — Uncertain tax positions (99) 0.1 (206) 1.0 Non-deductible goodwill impairment charge — — 2,287 (11.1) Non-deductible and non-taxable items 664 (0.8) 1,178 (5.7) Foreign taxes 446 (0.5) 587 (2.9) Other, net 1,543 (1.7) 398 (1.9) Total income tax expense (benefit) $ 37,224 (42.0) % $ (6,472) 31.3 % Significant fluctuations in our effective tax rate for the fiscal year ended December 29, 2024 were primarily due to changes in the valuation allowance against our U.S. federal, state and certain foreign deferred tax assets, as well as tax benefits from hiring credits.
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.
Additionally, following performance of the interim 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 29, 2024.
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.
No further impairment charges were recognized during the fiscal year ended December 29, 2024. See Note 6: Goodwill and Intangible Assets , to our consolidated financial statements found in Item 8 of this Annual Report on Form 10-K, for additional details. Indefinite-lived intangible assets We performed an impairment test during our fiscal second quarter of 2024.
Page - 28 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS Goodwill and intangible asset impairment charge A summary of the goodwill and intangible asset impairment charge for the fiscal year ended December 31, 2023, by reportable segment, is as follows: (in thousands) PeopleScout PeopleManagement Total company Goodwill $ 8,885 $ — $ 8,885 Trade names/trademark — 600 600 Total $ 8,885 $ 600 $ 9,485 Goodwill We performed our annual impairment test as of the first day of our fiscal second quarter of 2023.
Page - 29 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS Goodwill and intangible asset impairment charge A summary of the goodwill and intangible asset impairment charges for the fiscal year ended December 29, 2024, by reportable segment, is as follows: (in thousands) PeopleReady PeopleScout PeopleManagement Total company Goodwill $ 59,074 $ — $ — $ 59,074 Trade names/trademark — — 600 600 Total $ 59,074 $ — $ 600 $ 59,674 Goodwill We performed an interim impairment test as of the last day of fiscal May 2024 following the determination by management that a triggering event had occurred.
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.
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. Capital expenditures for the fiscal year ended December 29, 2024 included continued investments to upgrade our PeopleReady technology platform.
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.
Page - 30 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS Income taxes 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 or loss by jurisdiction, tax credits, government audit developments, changes in laws, regulations and administrative practices, valuation allowances recorded on deferred tax assets, and relative changes in expenses or losses for which tax benefits are not recognized.
When evaluating goodwill for impairment, we may first assess qualitative factors to determine whether it is more likely than not the fair value of a reporting unit is less than its carrying amount. Qualitative factors include macroeconomic conditions, industry and market conditions and overall company financial performance.
Our reporting units with remaining goodwill as of the first day of our fiscal second quarter of 2024 were PeopleReady, Centerline, PeopleScout RPO and PeopleScout MSP. When evaluating goodwill for impairment, we may first assess qualitative factors to determine whether it is more likely than not the fair value of a reporting unit is less than its carrying amount.
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.
PeopleManagement segment performance was as follows: (in thousands, except percentages) 2024 % of revenue 2023 % of revenue Revenue from services $ 542,201 $ 580,591 Cost of services 456,096 84.1 % 488,692 84.2 % Selling, general and administrative expense 70,986 13.1 % 84,936 14.6 % Segment profit $ 15,119 2.8 % $ 6,963 1.2 % PeopleManagement segment profit grew $8.2 million and grew as a percentage of revenue for the fiscal year ended December 29, 2024, compared to the prior year.
We determine the estimated fair values after review and consideration of relevant information including discounted cash flows, quoted market prices and estimates made by management. Determining the fair value of an acquired company is judgmental in nature and involves the use of significant estimates and assumptions.
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. We determine the estimated fair values after review and consideration of relevant information including discounted cash flows, quoted market prices and estimates made by management.
Further declines in our projected operating performance, or a sustained decrease in our stock price, could give rise to a future impairment. 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 goodwill impairment.
See Note 6: 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 2024 and 2023 goodwill impairment. There were no goodwill impairment charges recorded during fiscal 2022.
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.
PeopleReady segment performance was as follows: (in thousands, except percentages) 2024 % of revenue 2023 % of revenue Revenue from services $ 868,549 $ 1,096,318 Cost of services 614,860 70.8 % 772,058 70.4 % Selling, general and administrative expense 247,906 28.5 % 297,654 27.2 % Segment profit $ 5,783 0.7 % $ 26,606 2.4 % PeopleReady segment profit declined $20.8 million and declined as a percentage of revenue for the fiscal year ended December 29, 2024, compared to the prior year.
The credit loss rates applied to each aging category by pool are based on current collection efforts, historical collection trends, write-off experience, client credit risk, current economic data and forecasted information. The allowance for credit loss is reviewed and represents our best estimate of the amount of expected credit losses.
When specific clients are identified as no longer sharing the same risk profile as their current pool, they are removed from the pool and evaluated separately. The credit loss rates applied to each aging category by pool are based on current collection efforts, historical collection trends, write-off experience, client credit risk, current economic data and forecasted information.
This results in high turnover in accounts receivable. • PeopleManagement On-Site has a smaller number of clients and follows a contractual billing schedule. The invoice amounts are higher than that of PeopleReady and Centerline, with longer payment terms. • PeopleScout has a smaller number of clients, and generally sends invoices on a consolidated basis for a client.
Payment terms are slightly longer than PeopleReady. • PeopleScout has a smaller number of clients, and generally sends monthly invoices on a consolidated basis for a client.
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.
Based on our deferred tax asset realizability assessments during the year ended December 29, 2024, we determined that a valuation allowance was appropriate against our U.S. federal, state and certain foreign deferred tax assets that we expect will not be utilized within the permitted carryforward periods.
The combined fair values for all reporting units were then reconciled to our aggregate market value of our shares of common stock on the date of valuation, resulting in a control premium of 27.9%.
The income and market approaches for each reporting unit were equally weighted in our most recent annual impairment test, except for PeopleScout MSP which relied only on the income approach. The combined fair values for all reporting units were then reconciled to the aggregate market value of our shares of common stock on the date of valuation.
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.
As of December 29, 2024, we had cash and cash equivalents of $22.5 million and $118.5 million available under the most restrictive covenant of our revolving credit agreement (“Revolving Credit Facility”), for total liquidity of $141.1 million. As of December 29, 2024, $7.6 million was drawn on the Revolving Credit Facility as a Swingline loan.
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.
Page - 34 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS Restricted cash, cash equivalents and investments also includes collateral to support our non-qualified deferred compensation plan in the form of company-owned life insurance policies.
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.
Liquidity outlook • For fiscal 2025, capital expenditures and spending for software as a service assets are expected to be between $19 million and $23 million, with approximately $3 million of this amount relating to spending for software as a service assets. • To help fund the acquisition of HSP in late January, we borrowed $35.0 million under the Revolving Credit Facility as a Term Secured Overnight Financing Rate (“SOFR’) loan.
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.
The additional week in fiscal 2023 contributed $6.6 million of expense. We recorded a goodwill and intangible asset impairment charge of $59.7 million during the fiscal year ended December 29, 2024, primarily related to our PeopleReady reporting unit.
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.
PeopleScout segment performance was as follows: (in thousands, except percentages) 2024 % of revenue 2023 % of revenue Revenue from services $ 156,643 $ 229,334 Cost of services 91,484 58.4 % 137,551 60.0 % Selling, general and administrative expense 53,007 33.8 % 64,861 28.3 % Segment profit $ 12,152 7.8 % $ 26,922 11.7 % PeopleScout segment profit declined $14.8 million and declined as a percentage of revenue for the fiscal year ended December 29, 2024, compared to 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.
Total company gross profit as a percentage of revenue for the fiscal year ended December 29, 2024 contracted 60 basis points to 25.9%, compared to the prior year. Changes in revenue mix towards our lower margin staffing businesses and pricing pressures were partially offset by lower workers’ compensation costs and recognition of certain COVID-19 government subsidies.
The 2024 Revolving Credit Facility provides for a revolving line of credit of up to $255.0 million, with an option to increase the amount to $405.0 million, subject to lender approval.
We have an option to increase the total line of credit amount under the Revolving Credit Facility from $255.0 million to $405.0 million, subject to lender approval. Cash generated through our core operations is generally our primary source of liquidity.
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.
The additional week in fiscal 2023 contributed $11.9 million in revenue. PeopleScout PeopleScout revenue declined 31.7% to $156.6 million for the fiscal year ended December 29, 2024, compared to the prior year. Revenue declined as clients are experiencing less employee turnover, and labor market conditions are leading to uncertainty around future workforce needs.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe have the positive intent and ability to hold these investments until maturity and accordingly have classified them as held-to-maturity. For additional information, see Note 3: Restricted Cash and Investments, to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Biggest changeFor additional information, see Note 4: Restricted Cash, Cash Equivalents and Investments, to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K. Foreign currency exchange rate risk The majority of our revenue, expense, liabilities and capital purchasing activities are transacted in U.S. dollars.
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
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 - 41 Table of Contents
Interest 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%.
Interest 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”), for a one-, three- or six-month term, plus an adjustment of 0.10%, plus an applicable spread between 1.75% and 3.50%.
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%.
Alternatively, at our option, we may pay interest based on a base rate plus an applicable spread between 0.75% and 2.50%. The base rate is the greater of the one-month Term SOFR Screen Rate two days prior plus 1.0%, the prime rate (as announced by Bank of America) or the federal funds rate plus 0.50%.
Foreign currency exchange rate risk The majority of our revenue, expense, liabilities and capital purchasing activities are transacted in U.S. dollars. However, because a portion of our operations consists of activities outside of the United States of America, we have minimal transactions in other currencies, primarily the Canadian and Australian dollars, British pound sterling and Indian rupee.
However, because a portion of our operations consists of activities outside of the United States of America, we have minimal transactions in other currencies, primarily the Canadian and Australian dollars, British pound sterling and Indian rupee. We have not hedged our foreign currency translation risk.
The individual investments within the Trust are subject to credit risk due to possible rating changes, default or impairment. We monitor the portfolio to ensure this risk does not exceed prudent levels. We consistently apply and adhere to our investment policy of holding high-quality, diversified securities.
The majority of our collateral obligations are held in a trust at the Bank of New York Mellon (“Trust”). The individual investments within the Trust are subject to credit risk due to possible rating changes, default or impairment. We monitor the portfolio to ensure this risk does not exceed prudent levels.
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.
The applicable spread is determined by our consolidated leverage ratio, as defined in the Revolving Credit Facility. Trust assets Restricted cash, cash equivalents and investments consist principally of collateral that has been provided or pledged to insurance carriers for workers’ compensation and state workers’ compensation programs.
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”).
Our insurance carriers and certain state workers’ compensation programs require us to collateralize a portion of the workers’ compensation obligation. 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.
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We consistently apply and adhere to our investment policy of holding high-quality, diversified securities. We have the positive intent and ability to hold these investments until maturity and accordingly have classified them as held-to-maturity.

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