TrueBlue, Inc.

Thank you for calling and welcome to the True Blue Third Quarter 2019 Earning Call. I will now turn the call over to Derek Gafford, Executive Vice President and Chief Financial Officer. Please go ahead.

Good afternoon, everyone, and thank you for joining today's call. I'm here with our Chief Executive Officer, Patrick Burrell. Before we begin, I want to remind everyone that today's call and slide presentation contains several forward-looking statements, all of which are subject and many more. Any comparisons made today are based on a comparison of the same period in the prior year, unless otherwise stated. Lastly, we will be providing a copy of our prepared remarks on our website at the conclusion of today's call, and a full transcript and audio replay will also be available soon after the call. With that, I'll turn the call over to Patrick.

Thank you, Derek, and welcome everyone to today's call. We appreciate you joining us. Strong execution drove better-than-expected top-line and bottom-line results this quarter. While revenue growth has yet to return, we were pleased to see monthly revenue trends were consistent during the quarter, and we delivered another quarter of earnings growth. TrueBlue has been driving digital disruption within the staffing industry with our JobStack and Affinix offerings, and we continue to experience favorable employee and customer adoption. We remain squarely focused on client expansion and retention, disciplined cost management, and investing in our digital strategies to differentiate our service offerings. We also announced today that our board of directors approved an additional $100 million of share repurchase. Our board remains highly supportive of our focus on opportunistically repurchasing shares and returning capital to shareholders. Now I'd like to update you on the financial results and strategic initiatives within each of our segments, starting with our largest segment, People Ready. People Ready is the leading provider of on-demand labor and skilled trades in the North American industrial staffing market and represents 62% of trailing 12-month total company revenue and 59% of segment profit. People Ready's revenue was down 4% during the quarter due to lower business activity across our client base. Growth at People Ready was favorably impacted in Q3 by project work at one of our clients, creating a 2% year-over-year growth benefit. Excluding the project work I just mentioned, underlying monthly revenue trends at People Ready were consistent throughout the quarter. Consistent with our focus on managing costs across the business, we've been taking a hard look at People Ready's cost structure. Since our last earnings call, we've taken cost actions that are expected to result in approximately $10 million of net annualized savings. It's important to note that these reductions were focused on mid-level management and support positions and did not impact branch staff or sales resources. Derek will provide additional information, including the expected impact to Q4, in conjunction with our outlook. As always, our objective is to balance smart cost management with strategic investments to build our client base and drive growth. One example we touched on last quarter is PeopleReady's new client experience team. This is a team of seasoned operational and sales leaders who are dedicated to enhancing client satisfaction by proactively reaching out in the critical early days and helping clients move up the curve in terms of job stack usage. While the program is still in its infancy, the feedback from our branch-based colleagues and our customers has been overwhelmingly positive. The team is also helping us proactively drive more activity through our strategic cross-selling program, which continues to drive revenue growth year over year for TrueBlue. We have several customers where overall we've uncovered millions of dollars in additional revenue. Our digital transformation via our Jobstack mobile app remains one of the most important strategic initiatives within PeopleReady. Our Jobstack mobile app is transforming the way we do business. Over the past several quarters, we've seen disproportionately high revenue growth from clients that are heavy users of Jobstack. We've been working hard to build the critical mass we need within the app, and we're very pleased with the progress we've made on that front. We've deployed more than 1 million shifts via Jobstack during the quarter, representing a digital fill rate in excess of 40%, up from approximately 30% as recently as the fourth quarter of 2018. Associate adoption is now 87%, and we have approximately 19,000 clients using the app, up from 13,000 in December. We also recently announced a new strategic relationship with UberWorks. UberWorks is separate and distinct from Jobstack. and this new venture represents another step forward in our digital strategy for temporary staffing. UberWorks is a platform that connects workers with businesses that need to fill available shifts. Now, while UberWorks has a great platform, one area they don't have experience is paying and managing W-2 employees. So UberWorks turned to TrueBlue for help and we've created a new business venture called PeopleWorks to serve as an employer and payroll service provider for workers booking jobs on the UberWorks app. It's early days for the PeopleWorks venture, and we don't know yet if there will be a longer-term material impact. But it's clear that UberWorks' choice to work with TrueBlue is a testament to the strength of our payroll offering, world-class service, and decades of expertise in on-demand staffing. Turning to our next segment, PeopleManagement provides on-site workforce solutions in the North American industrial staffing market that offers compelling value, and are a perfect fit for larger clients with longer duration strategic needs for contingent workers. This business represents 27% of trailing 12-month total company revenue and 10% of segment profit. Revenue is down 12%. Roughly half of this decline is due to previously disclosed headwinds, namely the loss of Amazon's Canadian business and volume and price reductions at another retail client. The remainder is due to less same customer demand Thank you for joining us today. primarily due to previously disclosed headwinds, namely one client that was lost after being acquired and less volume and lower margins at another large account that was repriced to reflect a multi-year arrangement. In spite of these recent headwinds, we like the strength of our service offerings and are getting good traction. During Q3, PeopleScout was recognized as an enterprise RPO leader in HRO Today's 2019 Baker's Dozen customer satisfaction rankings. PeopleScout was also ranked as a healthcare RPO leader on this year's survey. Additionally, People Scout was identified by Nelson Hall as a leader in every category in their 2019 evaluation of the RPO marketplace. Our strategy for People Scout is unchanged and is aimed at capitalizing on our leadership position in the North American RPO market to expand our global capabilities and differentiate our service offerings through technology. Affinix is our proprietary next-generation HR tool that is improving our ability to compete in the marketplace. For example, in several recent winning sales pursuits, our PO buyers shared with us that Affinix was a clear differentiator and a key reason for People Scout being selected. Moreover, clients fully implemented on Affinix are experiencing improved time to fill, candidate flow, and candidate satisfaction. Summarizing our performance, we're executing on our three primary initiatives of putting our segments on a path towards sustainable growth, managing our costs to enhance profitability, and leveraging excess free cash flow to return capital to shareholders. These areas of focus, along with our strategic use of technology, which is something that our clients are embracing regardless of the ebbs and flows of their own businesses, will help us capture the many opportunities ahead in the changing world of work. I'll now pass the call over to Derek, who will share greater detail around our financial results.