TrueBlue Inc. (TBI), a leading provider of specialized workforce solutions, has reported a 13% decline in revenue for the first quarter of 2024, meeting market expectations amidst challenging conditions and reduced business spending. The company is actively managing through the market cycle by focusing on short-term offerings and targeting high-growth end markets.
Despite a drop in demand, TrueBlue has seen improved profitability in its PeopleManagement segment and is progressing with strategic initiatives such as the rollout of its JobStack app and organizational simplification. For the second quarter of 2024, TrueBlue forecasts a revenue decline of 16% to 10%, with some end markets showing signs of improvement but no overall turnaround in demand.
Key Takeaways
- TrueBlue's revenue fell by 13% in Q1 2024, matching expectations during tough market conditions.
- The company's PeopleManagement segment reported increased profitability.
- TrueBlue anticipates a 16% to 10% revenue decline in Q2 2024, with mixed signals in different end markets.
- Strategic priorities include digital transformation, market expansion, and organizational simplification.
- The JobStack app rollout and selective investments are ongoing, despite the need for cost reductions.
- TrueBlue repurchased $10 million in shares in Q1 and plans to buy back $30.5 million in Q2.
- Transportation and manufacturing sectors show growth, while retail and service industries remain weak.
- Talent availability is strong, with high fill rates due to effective recruitment strategies.
Company Outlook
- Expecting revenue to decline between 16% and 10% in the second quarter.
- Improved revenue and operating leverage anticipated in Q2, with continued margin improvements.
- Statutory income tax rate before job tax credits projected to be 24% to 28% for the year.
- Job tax credits estimated to be between $4 million and $8 million.
Bearish Highlights
- Overall customer sentiment is uncertain, and pricing pressures are starting to emerge.
- Ongoing need to reduce costs in SG&A, despite selective investments.
- Most industry verticals, especially retail and service, are experiencing continued softness.
Bullish Highlights
- Positive trends in renewable, transportation, and manufacturing businesses.
- High talent fill rates in the high 80% range, an improvement over previous periods.
- Success in the healthcare sector with new deals and partnerships.
Misses
- Revenue decline in Q1 2024, though in line with market expectations.
- No indication of a turnaround in overall demand trends for the near future.
Q&A Highlights
- The company is managing a tax matter with a $3 million cost in sales and $7 million in SG&A.
- TrueBlue remains focused on advancing strategic priorities despite market challenges.
TrueBlue's commitment to strategic growth is evident in its investment in digital tools like the JobStack app, which has already shown benefits such as reduced deployment time for associates and enhanced job search capabilities. CEO Taryn Owen emphasized the company's success in the healthcare sector and the importance of streamlining operations to improve efficiency and drive growth. The company's proactive approach to share repurchases reflects confidence in its long-term strategy, with $10 million in shares already purchased in Q1 and an additional $30.5 million planned for Q2. TrueBlue's agility in managing through the cycle, coupled with its targeted growth initiatives, positions it to navigate the current market conditions while laying the groundwork for future success.
InvestingPro Insights
TrueBlue Inc. continues to navigate a challenging market environment, as reflected in its recent financial performance. According to the latest data from InvestingPro, the company's market capitalization stands at $332.41 million, indicating the scale of its operations in the specialized workforce solutions sector. Despite the bearish sentiment suggested by the company's recent revenue decline, there are positive signs in its financial health and market valuation.
InvestingPro Data shows that TrueBlue is trading at a low revenue valuation multiple, with a Price / Book value in the last twelve months as of Q4 2023 of 0.72. This could suggest that the stock is potentially undervalued relative to its assets. Moreover, the company's management appears to be confident in its future, as evidenced by aggressive share buybacks, which is a positive signal for investors. In Q1 2024 alone, TrueBlue repurchased $10 million in shares, with plans to buy back an additional $30.5 million in Q2.
Further reinforcing the company's financial stability are two critical InvestingPro Tips: TrueBlue holds more cash than debt on its balance sheet, and its liquid assets exceed short-term obligations. These factors highlight the company's ability to meet its financial obligations and suggest a degree of resilience in the face of economic headwinds.
However, analysts are cautious about the company's near-term revenue prospects. They anticipate a sales decline in the current year, aligning with TrueBlue's own forecast of a revenue decline of 16% to 10% in Q2 2024. Additionally, the company is not expected to be profitable this year, as reflected in the negative P/E Ratio of -23.38. This aligns with the bearish highlights of the article, which underscore ongoing challenges such as uncertain customer sentiment and pricing pressures.
For readers looking to delve deeper into TrueBlue's financial metrics and gain access to more strategic insights, InvestingPro offers a comprehensive suite of tools and additional tips. To enhance your research experience, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. For those interested in TrueBlue's complete profile, there are 11 additional InvestingPro Tips available, providing a more nuanced understanding of the company's financial health and market position.
Full transcript - TrueBlue Inc (TBI) Q1 2024:
Operator: Greetings, and welcome to the TrueBlue First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. At this time, I'd like to remind everyone that today's call and slide presentations contain forward-looking statements, all of which are subject to risks and uncertainties, and management assumes 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 SEC filings could cause the actual results to differ materially from those in these forward-looking statements. Management uses non-GAAP measures when presented financial results. You are encouraged 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, a copy of the company's prepared remarks will be provided on TrueBlue's Investors website at the conclusion of today's call, and a full transcript and audio replay will be available soon after the call. It is now my pleasure to turn the call over to Taryn Owen, President and Chief Executive Officer.
Taryn Owen: Thank you, operator, and welcome, everyone, to today's call. I am joined by our Chief Financial Officer, Carl Schweihs. We appreciate you being here with us today. As we expected, the challenging market conditions we discussed on our last call continued in the first quarter. Revenue for the quarter was $403 million, down 13% compared to the prior year, and right in line with our outlook as economic uncertainty continued to weigh on businesses, leading to reduced spend and curve hiring trends. While current demand levels are subdued, we continue to manage through this market cycle with agility and discipline. Our teams are staying highly engaged with clients to address their current needs and ensure we are well positioned to support them as their needs change or expand. We are leveraging our flexible and short duration offerings for those clients that are hesitant to make long-term workforce commitments and tapping into opportunities in high-growth and attractive end markets. We are committed to growing sales by providing excellent service and responding to our clients' immediate and evolving needs. Alongside our commitment to meet the needs of the market today, we are progressing the strategic priorities we outlined last quarter, which will enable us to capture market share and enhance our long-term profitability. Positioning our contingent staffing business to compete in a digital forward future is a key component to our strategic plans. During the quarter, we continued the rollout of our new proprietary JobStack app, which allows us to control our road map and quickly address evolving user needs. We are excited about the opportunities this real-time insight creates, allowing us to implement competitive enhancements faster and making it easier for our customers and associates to engage with us. We are on track to complete the rollout this year, which will represent a significant achievement in the digital transformation of our business as we remain focused on driving efficiencies and strengthening our market position through a differentiated experience that combines our technology with our expansive market presence and expertise. Expansion in high growth, less cyclical and under penetrated end markets is a key strategic priority to capitalize on secular growth opportunities. We are leveraging our deep expertise, flexible solutions and expansive service offerings to capture growth opportunities in attractive end markets such as skilled trades and health care. Within skilled trades, we continue to excel in the renewable energy vertical with strong demand in the first quarter and a healthy pipeline for continued growth potential. Within RPO, we are encouraged to see our efforts gaining momentum with recent wins serving the health care market and diversifying into higher skilled placements. These wins help us to increase our market presence and grow our experience to drive further growth opportunities in high-value and high-growth end markets. As we said last quarter, another key element of our strategic plan is the simplification of our organizational structure to drive enhanced focus and profitability. During the quarter, we completed the sale of our on-demand labor business in Canada, which allows greater focus on our U.S. staffing operations where we are an industry leader. We also increased synergies within our staffing business through greater leverage of our technology assets across brands and consolidated leadership within our on-site business. Combining these actions with our cost discipline is already driving results with improved profitability for our PeopleManagement segment this quarter despite the weakness in demand. In PeopleScout, we made strides in driving enhanced focus by streamlining our global leadership structure. We further eliminated silos amongst our project management and internal talent acquisition teams enterprise-wide to better leverage experience and synergies and driving innovation across the organization. While we will continue to go to market under our current well established brands, we are aligning our internal organization around two core specialties; commercial staffing and direct hire. When we talk about commercial staffing, this encompasses our on-demand and on-site industrial staffing services as well as our skilled trades and commercial driving services. Direct hire includes our go-to-market brand PeopleScout with its strong growth and margin prospects, simplifying our organizational structure creates opportunities to drive efficiencies and bring our teams closer to our clients and associates allowing us to reduce costs, eliminate silos and better leverage our combined strengths to deliver long-term profitable growth. As we move forward, we remain laser-focused on leveraging our inherent streaks to capture market share and managing our cost structure with discipline to enhance our long-term profitability. While current market dynamics are challenging, the long-term staffing outlook remains positive. Structural staffing shortages and evolving workforce needs create compelling long-term opportunities for our business, and we are well positioned to capitalize with our competitive strengths, tremendous assets and clear strategic priorities. We are excited about the opportunities ahead and we are confident that we have the right people, technology and resources to drive our strategic priorities forward, enhancing shareholder value and advancing our mission to connect people and work. I will now pass the call over to Carl, who will share further details around our financial results and outlook.
Carl Schweihs: Thank you, Taryn. Total revenue for the quarter was $403 million a decline of 13% and right in line with our outlook. As expected, weakness in demand trends continued in the first quarter with businesses focused on reducing costs and asking more from their existing teams. While economic pressures led to overall softness in market demand, there were some pockets of strength. For example, we roughly doubled our renewable energy work again this quarter. This marks the seventh straight quarter of revenue growth in this vertical and we expect continued success in this space with an attractive pipeline and our strong market position. Gross margin was 24.7% for the quarter, down 180 basis points. The primary driver of the decline was unfavorable changes in revenue mix both from increased renewable energy work as well as a decline in our highest margin business PeopleScout. The increase in PeopleReady's renewable energy work reduced our total gross margin, because of the pass-through travel costs involved in that business. Outside of these costs, the underlying margin for renewable energy work is consistent with other large PeopleReady accounts and the impact to total gross margin will normalize as we lapse low-value comparable periods. We reduced SG&A by 13%, matching our revenue decline for the quarter. We are operating with discipline and focus in the areas we can control, as demonstrated by our actions to reduce costs and better align our cost structure with client demand. We are confident in our ability to manage through this market cycle with a focus on enhancing our profitability and ensuring we are well-positioned as conditions improve. We reported a net loss of $2 million this quarter versus a net loss of $4 million last year. Included in our results for the quarter was an income tax benefit of $12 million due to the favorable impact of job tax credits. Adjusted net income was $1 million versus an adjusted net loss of $2 million last year, while adjusted EBITDA declined to minus $3 million versus positive $3 million last year. Now let's turn to the specifics of our segments. PeopleReady revenue decreased 12% and segment profit margin was down 260 basis points. Softness in demand trends continued in the first quarter as client volumes declined across most verticals and geographies with the largest being in retail, hospitality and service industries. General market decline was partially offset by continued growth in renewable energy work which roughly doubled for the quarter. From a margin perspective, the contraction was largely driven by lower operating leverage as revenue declined as well as increased revenue mix from renewable energy work, which includes more pass-through costs. After more than 10 quarters of favorable spread between bill and pay rate inflation, we are beginning to see the type of pricing pressure we would expect in this type of economic environment with bill rates up 5.8% and pay rates up 6.1%. This dynamic is normal for our industry, as customers look to cut costs and staffing companies compete in the lower demand environment. We continue to demonstrate strong pricing discipline and we expect this to improve as the business environment returns to growth demand rebounds. PeopleScout revenue decreased 33% and segment profit margin was down 230 basis points. The decline in demand was driven by lower client volumes, as businesses continue to face economic cost pressures, leading to current hiring trends. Businesses are seeing less churn in their employee base and many remain uncertain around their workforce needs, making them more selective in the roles they choose to fill. For some, hiring volumes have declined to a level where they're relying more heavily on internal resources to fill jobs. All these factors are playing into the reduced market demand. The margin contraction was driven by lower operating leverage as revenue declined. PeopleManagement revenue decreased 7%, while segment profit margin was up 220 basis points. The decline in demand was primarily within onsite services driven by lower retail client volumes consistent with the macro conditions evident in that vertical. Meanwhile, we're encouraged to see our commercial driving services returned to growth in the quarter, Peoplemanagement segment profit margin expanded due to disciplined cost management actions to better align our cost structure with client demand. Now let's turn to the balance sheet. We finished the quarter with no debt $36 million in cash and $140 million of borrowing availability. We repurchased $10 million of common stock during the quarter leaving $45 million remaining under our authorization. Our balance sheet is in excellent shape providing a strong liquidity position and great flexibility to support future growth opportunities. Turning to our outlook for the second quarter of 2024, we expect a revenue decline of 16% to 10%. This includes a one point drag on total company revenue growth due to the sale of our on-demand business in Canada. While there are signs of improvement in certain end markets such as transportation and manufacturing, we have yet to see an indication as to when the overall demand trends will turn. Our outlook reflects a continuation of current market trends in the second quarter against a less challenging prior year comparison. We expect a $10 million COVID-19 government subsidy benefit in the second quarter from the resolution of a payroll tax matter with $3 million flowing through cost of sales and $7 million in SG&A. Keep in mind with the seasonality of our business, we typically see our highest volumes in the second half of the year. While we expect improved revenue and operating leverage in the second quarter, our lean cost structure will drive additional margin improvement as we move through the year. It's also important to note that our effective tax rate is highly sensitive in periods of low profitability for tax credits can drive significant movement. We expect a statutory income tax rate before job tax credits of 24% to 28% for the year with job tax credits of $4 million to $8 million. Additional information on our outlook can be found in the earnings presentation shared on our website today. Before we open the call up for questions, I'm going to turn it back over to Taryn for some closing remarks.
Taryn Owen: Thank you, Carl. As you have heard from us today, we remain committed to advancing our strategic priorities and managing through this challenging market cycle with the agility and discipline needed to return to profitable growth. We understand the current market dynamics and the needs of our customers. And we are taking decisive actions to preserve and enhance our strengths, ensuring we are well positioned to capitalize on growth opportunities as conditions improve. We are confident that combining our strategic priorities with our many strengths and assets will enable us to advance our mission to connect people and work, while delivering long-term value. This concludes our prepared remarks. Operator, please open the call now for questions.
Operator: Thank you. [Operator Instructions] Thank you. Our first question comes from the line of Jeff Silber with BMO Capital Markets. Please proceed with your question.
Jeff Silber: Thanks so much. I was wondering if you can give us a little bit of color on the intra-quarter trends in the first quarter and what's happened so far in the second quarter if there's been any change>
Carl Schweihs: Yes, absolutely. Thanks Jeff for the question. First, and as we kind of think back on the quarter look we ended at minus 13% with a PeopleReady at minus 12%, if you exclude Canada that was around 11%. People Management was down 7% and PeopleScout was down 33%. It was right in line with our outlook right at minus 13% for the total Company, minus 11% for PeopleReady, minus 6% for PeopleManagement and minus 35% for PeopleScout. As we look to Q2, whereas we're down 13% which includes a point from Canada as well. And total Company, PeopleReady is down 15% for the quarter which includes two points of headwind from Canada. PeopleManagement, the midpoints at minus 4% and PeopleScout at minus 28% Jeff, as you're asking about kind of results intra-quarter, the results from staffing are really comparable kind of each month to the quarter results. And we are seeing very similar results in April which is in line with our outlook. I think the one item that's important to note is we are seeing a sequential build in PeopleReady from March to April. However, it's a bit softer than our kind of pre-pandemic historical averages which is also reflected in our outlook.
Jeff Silber: Okay. That's really helpful. You actually asked my second question about the outlook by segment and then generally, when you talk to customers, are you seeing any signs of kind of a light at the end of the tunnel or it's still kind of steady as she goes.
Taryn Owen: Hi Jeff. This is Taryn. I -- we have a couple of bright spots within our customer base renewable which we spoke about in our prepared remarks. Transportation returned to growth in the quarter as did manufacturing in our people management on-site business. And so there those are a couple of bright spots that we are encouraged by. However, when we're out talking to customers more broadly, they're still in a place of uncertainty and are really waiting for economic conditions to improve before they make long-term workforce decisions, so that continues to be what we are hearing from our customers overall.
Jeff Silber: Okay, thanks. I'll jump back in the queue.
Carl Schweihs: Thanks, Jeff.
Operator: Thank you. Our next question comes from the line of Kartik Mehta with Northcoast Research. Please proceed with your question.
Kartik Mehta: Thank you. I think Taryn, you might have said something about price competition finally coming into the market. I was wondering, if you would be able to elaborate? Is this something new, is it started at the beginning of the year? And what is it look like now compared to what you've seen in the past.
Carl Schweihs: Thanks for the question, Kartik. I'll hop in here and let Taryn add any additional color if he or she has some. But from really bill-pay spread, we talked about this the last couple of quarters, right? After more than 10 quarters of favorable spreads, we are beginning to see some of the type of pricing pressure that we'd expect in this type of economic environment, right? This quarter our pay rates were up 6.1% or bill rates were up 5.8%. That only lead to about a 10 basis points impact in our margin for the quarter. We expect our results to be slightly better in Q2 really because of signs of pay rate softening in some parts of the country which is really leading the kind of will lead to improved bill pay spread in the second half of the year. Just to kind of put this in perspective, Kartik, look if you look at kind of where we saw pay rates increase in '22, we were up like 8%. In '23, we were up around 7% in the first quarter we're seeing 6%. So we see that continuing to moderate and we don't think that's going to be a big headwind for us. But just like with any pricing, we make sure that we're priced competitively for our customers and also that they know that our bill rates are competitive in the market and they provide value for the services we provide.
Taryn Owen: And Kartik, just to add to that that pricing is becoming an increasing part of the conversation, particularly when we look in our PeopleScout business and our PeopleManagement business where our customers are going out to bid and we're seeing an increase in RFPs that are coming to market. A lot of that is driven by customers looking at pricing in the market as they continue to be under pressure themselves.
Kartik Mehta: And then when you look at some of the metrics for the business such as job orders and other indicators you look at, particularly job orders, are they declining at the same rate as revenue or is there a difference -- may be based on the type of jobs you're seeing now versus a year ago?
Taryn Owen: It's similar in terms of the type of jobs that we're seeing a year ago with the exception of the progress that we've made in renewable that we mentioned transportation our center line business returned to growth. So, we're seeing an increase in orders there and customer activity as well as our manufacturing in the U.S. in the on-site business.
Kartik Mehta: Perfect. Thank you very much. I appreciate it.
Taryn Owen: Thanks Kartik.
Operator: Thank you. Our next question comes from the line of Mark Marcon with Baird. Please proceed with your question.
Mark Marcon: Hey good afternoon. The renewables business you mentioned, it doubled. What's the size of it now? And what would the size be if we strip out the pass-through costs?
Carl Schweihs: Thanks Mark, I'll take that. Yes, it did nearly double. We haven't kind of given the full of our renewable business. It's stuck within our kind of skilled trades business within PeopleReady. I think the best way to kind of think about that that's roughly about 20% of total company revenue in our skilled trades. If you add in our Centerline business as well, it's about 25%. And then as we talked about last week from a pass-through perspective, there is pass-through travel costs within that business. However, if you exclude those pass-through travel costs, the renewable business is very similar to other large PeopleReady customer accounts.
Mark Marcon: Okay. And then I'm just trying to get a sense for you mentioned renewables has continued to be strong transportation and manufacturing have actually turned. And so I was trying to get a consolidated view in terms of the portions of the business that have turned that seem like they are getting a little bit better relative to the rest? I'm just trying to think through when the overall business would likely turn?
Carl Schweihs: Yes, and I think that's really we're right kind of point out that skilled business, right? That kind of takes our skilled field network, our renewable business, Centerline, which is our driver business, and that's really where we're starting to see better demand trends. Taryn also mentioned earlier that we've seen manufacturing start to grow within our onsite business, so that's another bright spot that we've seen across the portfolio.
Mark Marcon: Great. And you did a nice job in terms of managing SG&A. Can you talk a little bit about like what your expectations would be for SG&A as we look towards the second quarter?
Carl Schweihs: Yes absolutely. So, yes, we just kind of look back on Q1, right, we guided to about 9% decline year-over-year, we overdelivered on those cost actions and got to a minus 13%. We were guiding to a midpoint of $99 million, which is roughly down call it 18% year-over-year. It is important to note, Mark, that that includes kind of a $7 million one-time benefit from our COVID subsidies as we talked about in the prepared remarks. So, if you adjust that out, it's really in line with Q1 at roughly down 13% or about $106 million for the quarter. We expect that to carry through the year. We will make some selective investments as we see opportunities to accelerate growth, but it's not going to be anything material. We actually -- we feel like we've made really good progress on SG&A over the past year and many of these reductions are going to be permanent. Some will come back, obviously, as we get higher revenue, but we feel like when we look at the overall business, we deliver anywhere between 17% and 22% across all of the segments. And segment profit, we think on a blended average with the actions we've take, we'd expect to be on the high side of that range as revenue recovers.
Taryn Owen: Yes, Mark, just to add to that. An important element of our strategy is to simplify our organization structure. So, we're really looking at making structural changes to the business that will help drive efficiencies, bring us closer to our customers, and not only increased profitability, but also get our business and teams closer together, so that we are increasing cross-selling opportunities as well.
Mark Marcon: Great. And then the balance sheet is in really good shape. Can you talk a little bit about simplification and structural? And what sort of potential strategic changes you're contemplating at this point?
Taryn Owen: Sure. We're really focused on three strategic priorities. One is advancing our digital transformation across the enterprise. We made really good progress on that in the last quarter with our continued rollout of our own proprietary JobStack app. So, really pleased with the project there. The second is expansion of market presence into high-growth under-penetrated market. So we have some wins to share there around wins in health care and our PeopleScout business. Just a couple of examples, we won a deal with a hearing health care provider where we're hiring both retail roles and audiologists in Australia, New Zealand and in India. We won to deal with a home health care provider, where we're going to hire 300 clinical roles across 15 states in our RPO business. And we've just engaged with private and charter schools to help them hire staff nurses within their schools, so really good progress around that strategic initiative. And then finally, as you mentioned, simplifying our org structure is really our third priority that we're focused on. And we've made good progress there, as Carl mentioned and is reflected in the SG&A reduction. Just a couple of examples, we brought together leadership of our two on-site businesses to help maximize synergies within those two businesses. We brought together our Centerline and our PeopleReady skilled trades brands under single leadership, as we think there's an opportunity there for additional synergies and cross-selling opportunities. And as I mentioned in the prepared remarks, we've streamlined our reporting structure and PeopleScout as well with our EMEA and APAC managing directors reporting directly to our PeopleScout president. So with that org structure alignment not only are we able to better leverage our cost structure, but we're starting to see some wins come to life through bringing our teams closer together between each of our brands, so good progress on those three priorities.
Mark Marcon: That's good to hear. And can you elaborate a little bit with regards to digital in terms of the transformation? And putting the JobStack on your proprietary system, what are the actual on-the-ground benefits that you're actually seeing from that? Is it easier from a candidate's perspective, easier from a client's perspective? Are the people sticking through the entire sign-on process? What are you seeing there?
Taryn Owen: Great. Thank you for that question, Mark. I'll just start with the strategy around having our own version of JobStack allows us to control our road map and implement competitive enhancements and quickly address the evolving needs of our customers and our associates that are unique to our business, and this is the level of control that we did not have in the past. Around improved usability, there are a couple of things that I can point to in our initial release. The first is that our associates can now complete an application and onboarding paperwork fully in the digital application, ultimately reducing the time that it takes for them to be deployed to an assignment. It also has more robust job searching and ability to filter based on location proximity for our associates. For our customers, we are able to respond very quickly to their feedback. So for example, we have a new time approval workflow in the new JobStack. And we got some feedback early on that when a customer had multiple associates on assignment it was too cumbersome to ultimately approve the time. And so we were able to very quickly change that workflow and address the customers' needs. So those are a couple of examples. The third I would give is for our internal staff, our field employees who are working so hard every day to put people to work. It has improved visibility for our field staff into orders and associates that are available through the desktop application. So those are a couple of highlights for you.
Mark Marcon: That's great. Thank you.
Taryn Owen: Thank you, Mark.
Operator: Thank you. Our next question comes from the line of Marc Riddick with Sidoti. Please proceed with your question.
Marc Riddick: Hi. Good evening.
Taryn Owen: Hi, Mark.
Carl Schweihs: Hey, Mark.
Marc Riddick: So I wanted to touch -- one of the things that I sort of noticed the -- for the 2Q guide on the share count that you're using that's below where you finish the -- where first quarter average was, I was wondering if you could talk a little bit about, is that a function of the cadence of the timing of share repurchases? Or are we looking at a pickup in the pace of share repurchase activity in the second quarter?
Carl Schweihs: Yes, you're right with your first response there, Marc. So we did -- we purchased $10 million worth of shares in Q1, which is roughly around 3% of kind of overall share count. So you're seeing that weighted average and in our guide, I think we had $30.5 million as what the numbers to use for Q2.
Marc Riddick: Got you. And then I was wondering as far as -- the commentary as far as obviously, the client spending kind of situation is what it is. Are you getting a sense that there are any particular groups or industry verticals that might be sort of first to move or first to be more active and maybe whether it's interest rates that would drive that or not? But are there any particular client verticals that you're looking at that you think would sort of be first to sort of get moving in a positive direction?
Carl Schweihs: Yeah, Marc, I can take that one. So like kind of in the quarter, we saw most verticals in geography kind of continue to see that softness with the largest kind of being in retail and service industries. We mentioned some of the bright spots we're seeing, particularly in transportation and manufacturing. And I think that we're seeing those in kind of broader industry metrics as well, which we're happy to be able to see that kind of return to growth in ours. So I'd say that, those are probably the bright spots that we're seeing. And traditionally, that's what we've seen at least in the supply chain, right? You make goods, you transfer those goods, and that's what starts to pick up. So we're not seeing the full increase in demand, but happy to see those things turn to growth in the quarter.
Marc Riddick: Great. And then the last one for me, I was wondering if you could just sort of maybe an update on your thoughts and views around talent availability if we're starting to see any pickup there? Or if so, any particular areas where you're starting to see maybe a little more talent there, maybe at the beginning of the year? Or is it about the same as it was then? Thank you.
Taryn Owen: I would say, Marc that our fill rates are in the high 80%, which is really strong for us compared to prior periods. And so we continue to see high fill rates, and our teams are certainly staying connected to our associates and continually recruiting. So there -- that continues to stay strong for us, and we expect for that to continue as demands return based on the recruiting work that we're doing in the interim here.
Carl Schweihs: Yeah. Maybe just to add on to that one, too, Marc. Taryn is absolutely right, right? We've seen that increase in our fill rate. Look, recruiting is what we do at our core. We've continued to recruit talent and see that available talent and be as evidenced by increased fill rate. If you think about kind of where we were in 2023, though, high 70s, low 80s. So, it is an improvement that we're seeing here in Q4 or Q1 of 2024. So I just wanted to add that, so you had kind of the prior year numbers.
Marc Riddick: Much appreciate it. Thank you very much.
Taryn Owen: Thank you, Marc.
Operator: Thank you. There are no further questions at this time. I'd like to turn the call back over to Taryn Owen for closing remarks.
Taryn Owen: Thank you, operator, and thank you, everyone, for joining us today. I do want to take a moment to thank the entire TrueBlue team for their tremendous efforts and commitment to advancing our mission to connect people and work. We look forward to speaking with you at upcoming investor events and our next quarterly call. If you have any questions, please don't hesitate to reach out. Have a great evening.
Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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