TrueBlue, Inc.

Greetings. Welcome to True Blue, fourth quarter 2022 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Derek Edford, Chief Financial Officer. Thank you. You may begin.

Good afternoon, everyone. and thank you for joining today's call. I'm joined by our Chief Executive Officer, Steve Cooper, and our President and Chief Operating Officer, Taryn Owen. Before we begin, I want to remind everyone that today's call and slide presentation contain 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. Okay, now let's turn the call over to Steve.

Thank you, Derek, and welcome everyone to today's call. First, I want to welcome Taryn Owen to the call. Taryn joined PeopleScout in 2010 and has served as president of PeopleScout since 2012. Taryn has also served as president of PeopleReady since 2019. In 2022, Taryn became president and chief operating officer of TrueBlue. In this new role, Taryn is responsible for all operating brands, along with our people and technology strategies. We plan to have Taryn join us going forward to offer additional insight into our operational performance, along with our people and technology strategies. Before discussing our fourth quarter results, I'm going to take a moment to reflect on 2022. The year was marked by one of change, not only at True Blue, but also within the business environment. Since returning as CEO in June, what has been clear is the strength of our people. who possess an unwavering commitment to serve our clients and the people we put to work. As we started the year, demand for our services was high as clients needed supplemental labor to support growth. As the year progressed, the impact of inflation combined with higher interest rates fueled economic uncertainty, leading certain buyers to take a wait and see approach to hiring. However, the labor market has remained historically tight with over 10 million job openings across the United States, many of which are for blue collar positions in which we specialize. Despite the economy slowing in 2022, I'm pleased with our performance over the past 12 months with revenue growth of 4% and operating income growth of 5%. Moving on to results for the quarter, total revenue was $558 million, down 10% compared to Q4 2021. Results across the business segments were mixed. We saw steady underlying revenue trends at PeopleReady and at PeopleManagement in Q4. At PeopleScout, we started to see the need for permanent staff at our clients begin to slow. While operating income and margin were lower due to decline in revenue, we maintained pricing discipline at our staffing segments and remain focused on costs across the company. Turning to the segments, PeopleReady is our largest segment. It represents 57% of total trading 12-month revenue and 59% of total segment profit. PeopleReady is a leading provider of on-demand labor and skilled trades in the North American industrial staffing market. We service our clients via a national footprint of physical branch locations, along with consolidated service centers, both supported by our job stack mobile app. Revenue for the quarter was down 13%. If you recall in the fourth quarter of 2021, people already benefited from a demand surge across the business as our customers found themselves in desperate need for labor during the peak of a post COVID recovery. creating a year-over-year headwind this year. Setting this factor aside, our sequential revenue trends remain consistent with typical historical patterns. PeopleScout is our highest margin segment, representing 14% of total trading 12-month revenue and 30% of total segment profit. PeopleScout is a global leader in filling permanent positions through our recruitment process outsourcing services. PeopleScout revenue declined 16% in Q4 this year. Changes in demand for RPO services typically lag our traditional staffing business. We're seeing this dynamic play out today, which is being compounded by more normalized hiring volumes. People management represents 29% of total trading 12-month revenue. and 11% of total segment profit. People management provides onsite industrial staffing and commercial driver services in North America. The essence of a typical people management engagement is supplying an outsourced workforce that involves multi-year, multi-million dollar onsite and driver relationships. Revenue is down 2% in Q4, with monthly revenue trends holding steady throughout the quarter. I'm going to spend the next few minutes talking about our strategies, and we'll then pass things over to Taryn to talk about a couple of our operating priorities for 2023. Our strategy at PeopleReady is to digitize the business model to gain market share and improve efficiency. The United States temporary day labor market is highly fragmented. with the bulk of the market made up of smaller companies in the industrial staffing segment where PeopleReady operates. These smaller, more regional companies not only lack an expansive branch network, but also are typically unable to invest in digital applications like Jobstack. With over 90% associate adoption and 30,000 plus client users, Jobstack provides a frictionless user experience for associates and clients and has driven operational efficiencies. The technology and the brick and mortar combination makes us a one-stop shop for national and local accounts and is what makes us a leading provider within the on-demand industrial staffing market. We believe the market for general labor has the best opportunity for digitalization as it is less complex than other types of staffing, And by further investing in Jobstack, we will be able to increase our traction and improve our appeal with clients and associates. At PeopleScout, our aim is to capitalize on a strong brand reputation and ability to hire in high volumes to gain market share within the RPO industry. It has consistently produced double-digit annual revenue growth in favorable economic conditions. In 2022, PeopleScout achieved record revenue as companies sought our expertise to find talent in tight labor markets. The big reason for the success was Affinix, our recruiting platform, which has allowed us to place better talent faster. As we move forward, we plan to further diversify our hiring mix and target high growth sectors, such as life sciences and technology. Our positive track record penetrating healthcare, depth of experience, and aesthetics make this possible. People management strategies to supplement our traditional onsite staffing services with higher margin product offerings, like onsite workflow solutions and commercial trucking, and expand geographically within the United States to increase market share. Now I'd like to turn the call over to Taryn. who will discuss specifics on some key priorities as we enter 2023.