TrueBlue, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the True Blue second quarter 2020 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Garrett Gafford. Please go ahead.

Good afternoon, everyone, and thank you for joining today's call. I'm joined by 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 to risks and uncertainties, and we assume no obligation to update or revise any forward-looking statements. These risks and uncertainties, some of which are described in today's press release and in our SEC filings, could cause actual results to differ materially from those in our forward-looking statements. We use non-GAAP measures when presenting our financial results. We encourage you to review the non-GAAP reconciliations in today's earnings release or at TrueBlue.com under the Investor Relations section for a complete understanding of these terms and their purpose. Any comparisons made today are based on a comparison to 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 this afternoon as we all navigate these unpredictable times. I want to thank our employees, associates, and clients Thank you for joining us today. We saw moderate demand improvement toward the end of the quarter, which continued into July. In light of these trends, we expect the second quarter to be our trough, though full recovery will take time and the pace of recovery may vary by segment. On that note, Let's turn to our segment results. PeopleReady is a leading provider of on-demand labor and skilled trades in the North American industrial staffing market. PeopleReady's revenue was down 43% during the quarter, and we saw modest intra-quarter improvement with revenue down 39% in June versus down 46% in April. PeopleManagement is a provider of contingent on-site industrial staffing and commercial driving services in the North American industrial staffing market. Revenue for People Management was down 23% during the quarter and snapped back well as the quarter progressed, with the top line down 16% in June versus down 30% in April. In comparing People Ready and People Management's performance, there are two key points to note. First is client mix. People Ready has a higher exposure to hard-hit sectors such as hospitality and construction. whereas people management's client mix tilts more favorably, supporting e-commerce supply chains, for instance. Second is an outsourced versus supplemental dynamic. The essence of a typical people management engagement is supplying an outsourced workforce that involves multi-year, multi-million dollar on-site relationships. These types of client engagements tend not to be impacted as much as PeopleReady's typical engagement, which involves supplying supplemental labor were shorter duration assignments. We saw this dynamic in the previous recession as well. Turning to our last segment, PeopleScout is a global leader in filling permanent positions through our recruitment process outsourcing and managed service provider offerings. Revenue was down 53% during the quarter. PeopleScout results were particularly impacted by exposure to large travel and leisure clients. I'd like to shift gears and talk in more detail The good news is is that these plans are working. I won't go into all the detail on this call, but here are a few highlights. First, True Blue is providing masks for all its staff and associates. Since the start of the crisis, we've distributed approximately 120,000 masks across our staffing range. Second, we have symptom checks before entering the building at all of our on-site locations, and we've distributed over 600 infrared thermometers for branch offices and job sites that requested or required them. Third, as in any crisis, communications is essential. We've established a resource center for staff and safety specialists regularly meet with operational teams and clients to discuss the latest guidelines. Fourth, we're creatively adapting the way we run the business, including the introduction of drive-in job fairs and supporting our corporate staff so they can work from home. Turning to our key initiatives, the progress we've made on our digital strategies is more important than ever in helping us serve our clients by connecting people with work. We filled 551,000 shifts via Jobstack in Q2 2020, representing an all-time high digital fill rate of 53%. Our client user count ended the quarter 24,300, up 38% versus Q2 2019. JobSec has the obvious advantage of allowing us to remotely dispatch workers straight from home to the job site. But it has also become a cornerstone to keep our contingent employees safe by providing routine and job-specific health and safety notifications. The other initiative we've been working on is digital onboarding, which allows associates to complete their application entirely on their smartphone rather than physically going into a branch office. This new technology has been deployed in all 50 states, and early results are favorable. Digital onboarding has resulted in PeopleReady cutting the medium time to complete an application in half. And not surprisingly, we're seeing substantially higher percentages of workers completing the hiring process and being put to work. It's still early days for digital onboarding, and we'll have more to share in coming months. Last quarter, I mentioned that our sales and operation teams were developing formal bounce-back strategies to ensure we are well-positioned when our economies begin their reopening efforts. And I'd like to take another minute to share a few highlights. At PeopleReady, we're focusing our sales efforts on high-need areas, such as reconfigurations for social distancing and change-outs for out-of-season merchandise. We've won several new client engagements from these efforts. We've also implemented centralized tracking of competitor closures so we can target customers who need a new supplier of labor. In addition, we're working on tapping a broader worker pool as digital onboarding becomes a reality. At People Management, we're targeting essential manufacturers and leveraging our strength in e-commerce. These are verticals that have held up well relative to the decline in non-essential goods at traditional bricks-and-mortar retailers. At the same time, we're also focused on consolidating client wallet share, since consolidation brings natural economies of scale. Finally, at PeopleScout, we're supporting clients that laid off their in-house recruitment teams and have had some recent successes focused on project hiring. In closing, I'll remind everyone that even if the COVID-19 pandemic and economic crisis have forced everyone to rethink Thank you, Patrick.