TrueBlue, Inc.

Greetings and welcome to the True Blue first quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Derek Gafford, Chief Financial Officer. Thank you, Derek. 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 financial 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, let's turn the call over to Steve.

Thank you, Derek, and welcome everyone to today's call. Given the macroeconomic climate, we are pleased that demand for our services was right in line with our expectations. Our People Ready business is one of the first to feel the impact from a change in macroeconomic conditions, given the short duration of job assignments and the project-based nature of its services. After experiencing the first signs of a slowing demand during the second quarter last year, the underlying revenue trends at People Ready have been steady since October. As we expected, our people scout and people management businesses followed suit with slower demand trends during the first quarter this year, as some clients trimmed their human capital spending due to macroeconomic uncertainty, despite many clients having open positions. This led to overall revenue of $465 million, down 16%, compared to Q1 2022. Because these anticipated trends, the people scouts and people management teams were proactive, taking swift actions late in the quarter to reduce costs to ensure the operating structure was more in line with demand. Our teams were also able to maintain pricing discipline throughout the quarter and deliver another quarter of positive bill pay spreads in our people-ready business. Turning to the segments, PeopleReady is our largest segment. It represents 56% of total trading 12-month revenue and 57% 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 supported by our JobStack mobile app. Revenue for the quarter was down 17%. As a reminder, in the first quarter of 2022, people already benefited from a demand surge across the business as our customers were in desperate need of labor during the post-COVID recovery, creating a year-over-year headwind. Setting this factor aside, our sequential revenue trends remain consistent with typical historical patterns. People Scout is our highest margin segment. representing 14% of trading 12-month revenue and 33% of total segment profit. PeopleScout is a global leader in filling permanent positions through our recruitment process outsourcing services. PeopleScout revenue declined 15% in Q1 as a result of a reduction of permanent job openings at our clients. We have seen some clients slow hiring while others have paused activities altogether. People management represents 30% of trillion 12-month revenue and 10% of total segment profit. People management provides on-site 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 on-site or driver relationships. Revenue is down 13% in Q1. We have seen less volume at the e-commerce warehouses for on-site retail clients as consumer spending patterns have shifted. Now I'm going to spend a few minutes talking about our strategies. Our strategy at PeopleReady is to digitalize the business model to gain market share, improve efficiency, and take the friction out of each step of the transaction with associates and customers. The United States temporary day labor market is highly fragmented and primarily made up of smaller competitors in the industrial staffing segment where PeopleReady operates. This market is also less complex than other types of staffing and has the best opportunity for digitalization. Our smaller, more regional competitors lack the ability to invest in digital applications like Jobstack. When combined with our expansive brick and mortar branch network, we are a one-stop shop for national and local accounts, making us a leading provider within the on-demand industrial staffing market. At PeopleScout, our aim is to capitalize on a strong service reputation and ability to hire in high volumes to gain market share within the RPO industry. that has consistently produced double-digit annual revenue growth in favorable economic conditions. PeopleScout is a market leader in the RPO space as a result of its people and Affinix, our recruiting platform. Both enable us to place better talent faster in all types of market conditions. As we move forward, we plan to target new high-growth sectors for us, such as life sciences and technology. Our positive track record of penetrating healthcare, depth of experience, and our technology makes this possible. Depot management strategy is to supplement our traditional on-site staffing services with higher margin product offerings, like on-site workflow solutions and commercial trucking, as well as expand geographically within the United States to increase market share. We believe we are positioned well for a strong recovery as we serve customers in some of the fastest growing segments. And we have taken the proper steps to be nimble, yet strong in our preparation to be the supplier of choice in connecting people and work. Now we'll turn the call over to Taryn. We'll discuss specifics on some key priorities this year.