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Greetings and welcome to the TrueBlue, Inc. Fourth Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. At this time, 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 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 actual results to differ materially from those in the forward-looking statements. Management uses non-GAAP measures when presenting 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, Inc.'s investor website at the conclusion of today's call, and a full transcript and audio replay will be available soon after the call. I will now turn the call over to Taryn R. Owen, President and Chief Executive Officer. Please go ahead.

Thank you, Operator, and welcome, everyone, to today's call. I am joined by our Chief Financial Officer, Carl R. Schweihs. Before we discuss our fourth quarter results, I would like to take a step back and reflect on the year. During 2025, we executed on our strategic priorities with discipline and focus, forming a strong foundation to build upon as we advance towards sustainable, profitable growth. We restructured our business model to expand our sales capability, unlock additional growth opportunities, and improve profitability while tightly managing costs. For our on-demand staffing business, we executed a comprehensive reorganization of our operating model, transitioning to a more efficient, territory-based structure and investing in sales resources to expand our reach in key markets. This structure and increased sales capacity enable more targeted, localized sales strategies and deeper client engagement. As a result, our sales-enabled territories continue to deliver stronger sequential performance. We have also focused on strategic partnerships and cross-selling initiatives as we continue to prioritize our return to growth. We launched an enterprise-wide strategic partnership with a leading group purchasing organization, unlocking new client acquisition channels and fueling a growing pipeline of multi-brand opportunities across our portfolio. This partnership has led to approximately $15,000,000 of annualized new business wins and continues to build momentum as we expand the relationship into new sectors. We are also fostering stronger partnerships across our brand portfolio. Greater enterprise alignment and collaboration continue to create more cross-selling opportunities, allowing us to better serve client needs and accelerate growth with our full spectrum of specialized workforce solutions. For example, collaboration between our PeopleReady and PeopleManagement teams continues to deliver results, with our commercial driver business securing three additional new locations serving a leading energy solutions manufacturer. Market expansion was a significant performance contributor over the past year as we leveraged our strong market position and expertise to capture demand in attractive verticals with strong growth drivers. Our energy sector revenue grew 60% while our commercial driver business continued to outperform the broader market, delivering its second consecutive year of double-digit growth. Structural labor shortages and strong secular forces in the energy space signal further growth potential as we continue to capture market share with our skilled businesses both geographically as well as in adjacent subsectors such as the construction of energy storage facilities and data centers. Our RPO solutions continue to expand coverage in attractive verticals such as engineering and technology through higher skilled roles. We increased our professional hires this year, building momentum as we diversify our business mix to grow market share. Healthcare also remains a significant long-term market opportunity with strong secular growth drivers. We have made meaningful progress expanding our presence in the healthcare market with new business wins spanning across our brands, as well as the addition of healthcare staffing professionals to the TrueBlue, Inc. portfolio. Since joining TrueBlue, Inc., HSB has expanded into three new states, and we are committed to thoughtfully scaling this business to capture sustained demand. Leveraging our deep expertise, extensive reach, and sophisticated technology, we continue to strengthen our position in the U.S. healthcare market. A key factor in our ability to deliver a differentiated user experience while also driving operational efficiencies is our portfolio of proprietary technology platforms. We have made significant progress enhancing the capabilities of our digital ecosystem with advancements that include embedded AI-powered job matching, predictive analytics, and behavioral insights across the talent lifecycle. Recently, we launched an AI-enabled bill rate feature within our jobs app that provides personalized, data-driven bill rates in seconds, supporting businesses in making faster, more confident staffing decisions. Our technology is a key contributor in delivering smarter workforce solutions, creating greater value for the customers and talent we serve, supporting efficiency at scale. It enables us to reduce operating costs, extend our reach, and continue investing in strategic sales initiatives as we accelerate growth. We are confident our strategic plan to enhance our sales model, expand our share in attractive end markets, and accelerate efficiency with technology and operational excellence positions us well to capitalize on the growth opportunities ahead. Our continued actions to drive top-line growth and margin expansion underpin our overarching commitment to realize long-term sustainable value for our shareholders. Our ability to execute this strategy is strengthened by the experience and expertise of our Board and leadership team, who are committed to serving the best interests of all shareholders and positioning TrueBlue, Inc. for long-term success. Now let us review our fourth quarter performance. We delivered our second consecutive quarter of organic revenue growth, driven by continued success growing our skilled businesses and greater stability in general demand trends. While we further grow the top line, we remain committed to driving improved profitability, as evidenced by our continued cost discipline leading to reduced operating costs for the quarter. As our strategic focus drives improved results, we are well positioned to capitalize on the untapped potential of the staffing market and deliver greater shareholder value. I will now turn the call over to Carl R. Schweihs, who will share further details around our financial results and outlook.

Thank you, Taryn. Total revenue for the quarter was $418,000,000, up 8% and near the high end of our outlook range. Organic revenue increased 5%, with the acquired HSB business contributing three percentage points of growth. Robust results in skilled trades fueled organic growth, as overall market conditions showed ongoing signs of stabilization. Our skilled businesses continue to outperform the broader market, delivering double-digit growth for the third consecutive quarter, driven by our team's success in capturing rising demand in the energy vertical. Our other business lines are also showing improved trends and solid momentum going into 2026 as we maintain our strategic focus on accelerating growth. Gross margin was 21.5% for the quarter, down from 26.6% in the prior-year period, primarily due to less favorability in the prior-year workers’ compensation reserve adjustments and the changes in revenue mix. As you may recall, last year’s gross margin benefited from a significant reduction in workers’ compensation costs due to favorable development of prior-year reserves. As expected, that degree of favorability did not repeat this year. For the revenue mix impact, this stems from more favorable trends in our staffing businesses and outsized growth in PeopleReady renewable energy work. As a reminder, renewable energy work carries a lower gross margin than the general PeopleReady business due to pass-through travel costs involved. Outside of these costs, the underlying margin for renewable energy work is consistent with other large PeopleReady accounts. We successfully reduced SG&A by 11%, even while revenue grew 8% for the quarter. This improved leverage demonstrates our continued commitment to managing costs and delivering enhanced profitability. We have made significant progress creating greater flexibility to scale and driving efficiencies that position us well to deliver strong incremental margins as industry demand rebounds and we further advance our growth initiatives. We reported a net loss of $32,000,000 this quarter, which included a non-cash long-lived asset impairment charge of $18,000,000 associated with the sublease of our Chicago support office. As a reminder, this reduction in corporate office space unlocks over $30,000,000 of cash flow over the remaining ten years of the lease, providing greater flexibility as we target compelling growth opportunities. Our results also included a small amount of income tax expense primarily associated with our foreign operations and essentially zero income tax benefit on U.S. operations due to the valuation allowance in effect on our U.S. deferred tax assets. As a reminder, the impairment charge and valuation allowance have no impact on our operations or liquidity. Adjusted net loss was $8,000,000 while adjusted EBITDA was $2,000,000 for the quarter. Now let us turn to our segments. PeopleReady grew 11%, driven by continued outperformance in the energy sector. Revenue more than doubled in the energy vertical for the second consecutive quarter, as our strong market position and deep client relationships continue to drive success in this growing market. Our on-demand business is also showing improved trends, especially in our local business where we have invested in sales resources, signaling building momentum as we enter 2026. PeopleReady segment profit margin was down 370 basis points, mainly due to the favorable prior-year workers’ compensation reserve adjustments not repeating at the same level, as well as changes in business mix with outsized growth in renewable energy work as I mentioned earlier. PeopleManagement revenue declined 2% due to lower on-site volumes, primarily in the retail vertical and consistent with the macro conditions in that space. While client volumes declined for the quarter, our teams are building momentum with 13 new sites launched during the quarter and continued success in new wins, positioning the business well to drive revenue expansion in 2026. Our commercial driver business also continues to outperform, delivering its eighth consecutive quarter of growth as we leverage our strong client relationships and expertise to capture rising demand. PeopleManagement segment profit margin was up 50 basis points due to disciplined cost management actions to drive improved efficiencies and greater scalability. PeopleSolutions revenue grew 42%, with HSB performing in line with expectations and driving the year-over-year growth. On an organic basis, PeopleSolutions was flat to the prior year, as overall hiring volumes remained subdued. While clients continue to navigate budget restraints and evolving workforce needs, we are encouraged to see signs of stabilization with our new business wins and expansions. We continue to win and expand with new clients, especially with higher skilled roles and serving growing end markets with long-term secular tailwinds. PeopleSolutions segment profit margin was up 180 basis points, primarily driven by cost actions to deliver efficiencies and greater operating leverage. Now let us turn to the balance sheet. We finished the quarter with $25,000,000 in cash, $66,000,000 of debt, and $68,000,000 of borrowing availability, resulting in total liquidity of $92,000,000. During the quarter, we reduced our debt position by $2,000,000 while increasing working capital by $2,000,000 as we maintain our focus on delivering operational efficiency and enhanced financial flexibility. With the recent amendment to our credit facility effective January 30, we have increased our borrowing availability for the remainder of the agreement term by transitioning to an asset-backed structure. We remain committed to managing a strong liquidity position and foundation to ensure we are well positioned to capitalize as market demand rebounds. Looking ahead to 2026, we expect revenue growth of 3% to 9% year over year as we continue to build on the success we have achieved in recent quarters. This includes one percentage point of inorganic growth from HSB. I would also like to provide additional context around workers’ compensation reflected in our first quarter margin outlook. As we have discussed, prior-year periods benefited from outsized favorability in workers’ compensation reserve adjustments. These trends have since normalized, resulting in year-over-year margin compression for the fourth quarter and a similar headwind expected for 2026. This represents a return to a more normalized run rate, rather than a change in underlying trends. Given the expected revenue mix and the fact that the first quarter is seasonally our lowest revenue quarter, we expect a lower margin in the first quarter, but our lean cost structure will drive improved margins as we move through the year. Additional information on our outlook can be found in our earnings presentation shared on our website today. Before we open up the call for questions, I will turn it back over to Taryn for some closing remarks to the prepared section.

Thank you, Carl. Before turning to Q&A, I want to touch briefly on the recently announced changes to our Board of Directors. Over the course of several months, TrueBlue, Inc. engaged with shareholders as part of a deliberate board refreshment process. In early 2026, we welcomed two highly qualified independent directors with deep operational and commercial experience and announced that two current directors would step down at or before our 2026 annual meeting. This refreshment strengthens and broadens the Board's capabilities while reinforcing our commitment to shareholder engagement and effective oversight. As you have heard from us today, we have a clear strategy to drive long-term sustainable value, and it is producing results. We have executed on this strategy with discipline and focus, strengthening our market position, diligently managing our cost structure, and building momentum to fuel future growth. In 2026, we are acutely focused on capturing market share as we further strengthen our sales reach and expand in growing markets, leveraging our efficient and scalable operating structure to deliver improved profitability. We are confident we have the right people, structure, and strategy to drive TrueBlue, Inc. forward, accelerating our growth, enhancing shareholder value, and advancing our mission to connect people and work. This concludes our prepared remarks. Operator, please open the call now for questions.

Thank you. We will now open for questions. One moment while we poll for questions. Thank you. Our first question is from Marc Frye Riddick with Sidoti & Company.

Hi, good evening. Hey, Marc. Hi, Marc.

So I wanted to maybe start where you left off there with the margin discussion. Maybe you could talk a little bit about how, given the sort of the different rates that we are seeing of business recovery and client demand improvements, how that might impact the overall firm-wide margin trajectory as we sort of move forward through the year. And this is a—we are putting aside the prior-year workers’ comp part of the conversation, but maybe you could sort of talk about the margin trajectory going forward.

Yes. Thanks for the question, Marc. I will take that. We have done a really good job managing costs, in controlling what we can in this market. And we have mentioned this in the past, we feel like with the optimized fixed cost base that we have, we are poised for significant incremental margins and expanding our profitability as demand rebounds. Just historically, our incremental margins have been between 15% to 20% across the portfolio. But with the actions that we have made, we believe we will do a little bit north of that range, depending on, obviously, the segment in which it comes in. So, all told, if we are in that normalized industry growth rate, we would expect to expand our EBITDA margin percentage upon those sort of growth rates. Right now, our entire focus is really around controlling what we can control. Whether or not we see a faster recovery or slower recovery, we are going to continue to be driving growth and productivity and focused on driving increased profitability in the business.

Okay. Great. And then maybe you could sort of shift over to the energy activity and renewables in particular. With the top-line growth that you are seeing there, can you talk a little bit about the visibility and sustainability of that growth and activity? And then maybe you could talk a little bit about what you are seeing as far as new business wins and the current pipeline and maybe sort of the strategic approach that you are taking there to maintain growth going forward there?

Thanks for the question, Marc. We are very encouraged by the momentum in our energy business, especially in renewables. Expanding in high-growth, underpenetrated markets is a key strategic priority for us across the brand portfolio, and energy is a great example of this. We are seeing strength across commercial solar and full-scale renewable projects, and we are also focused on expanding into nonrenewable energy sectors as well. As mentioned in our prepared remarks, our energy business more than doubled the second quarter in a row, really driven by our expertise and the strong client relationships that we have built with these clients over the past decade. In quarter four alone, we secured several multimillion-dollar project wins, and our pipeline remains very healthy, positioning us very well for continued growth in this space.

Yes, if I could just add a couple of points here. And Taryn mentioned that decade of experience here, so we feel good about what we have done. But it does expand just beyond the renewables. And energy as an end market for us reached 15% of our portfolio at 2025. It was 10% as of 2024. We do not think the energy usage here in the U.S. is going down anytime soon, so we feel good about that opportunity as we move forward.

Okay. Great. And then you made a commentary during your prepared remarks around the contributions with HSB and what you are seeing in healthcare-wise. Can you maybe talk a little bit about how you view that vertical and, as an offshoot, as far as potential cash usage, is there room for inorganic pursuits in that space or any that you see as attractive at this point?

Yes. Thanks for the question, Marc. Let me take that first one. So yes, in Q4, HSB delivered about $40,000,000 of inorganic growth, reflecting really our growing traction in that market and strength of our integration work. We remain confident in the strategic value of the acquisition and intend to continue our expansion in the high-growth end markets. This acquisition was accretive to us. It allows us to continue to capitalize on secular growth opportunities in the healthcare space and think that that is going to be a long-term driver for our business. As we just look back on the original strategy with our HSB acquisition, it was a regional West Coast-based firm that we had plans to expand into more states and more geographies. And as Taryn mentioned in prepared remarks, we added another state. So we are in our third new state since launch and feel good about this one continuing to be a good driver for us going forward.

And, Marc, to answer your question regarding M&A, right now we are not prioritizing M&A, but instead focusing on managing the business to cash flow positive. We will continuously, of course, evaluate any opportunities to enhance shareholder value and position TrueBlue, Inc. for long-term success.

Great. Thank you very much.

Thanks, Marc.

Our next question is from Mark Steven Marcon with Baird. Good afternoon, and thanks for taking my questions.

Just want to start with the energy business. So, Carl, you said it is 15% of the total portfolio at this point? Is that correct?

That is energy as an end market. So that is across all of our portfolios. It is 15% across PeopleSolutions, PeopleManagement, PeopleReady as well.

Got it. And what about just the renewable energy within—

Within PeopleReady? Yes. That is about a third of our business probably.

And just—

Trying to dig down into the gross margins. If we take a look at that—

That business, because you have got—

You know, some pass-through, how much of that business is pass-through?

Yes. No. Great question. It does—

Pass-through costs, and that is what we called out in the remarks as well. Mark, as you think about that significant growth, it resulted in about 200 bps of gross margin contraction. We have got those pass-through costs that go into that business. So our on-demand business obviously has a bit higher gross margin. But it is important to note that this is still a high EBITDA margin business for us.

And what percentage of the revenue from that is pass-through? What percentage of the revenue of that is pass—

Through?

Yes. Is that the question?

Yes.

I do not have the numbers in front of me, Mark, but it is about a third. And I would say the gross margins, you know—

Probably—

60% of the rate of our on-demand business.

Okay. That is helpful. Great. And then can you talk just in PeopleReady—we are starting to hear and see some signs of economic recovery. If we strip out that renewable energy business, and maybe even stripping out the commercial driver business on the PeopleReady side, what are you seeing in terms of organic growth outside of those two spaces? Are you seeing any signs of improvement—

Yes. Thanks for the question, Mark. So, yes, PeopleReady did see improved trends with our weekly sequential revenue growth during the quarter. Now it was driven by the skilled businesses that we had talked about. Just to put this in perspective, we exited Q4 at a similar rate to Q3. So we were plus 16% in Q4, plus 18% in Q3. I will give a couple of other trends across the portfolio as well. Our PeopleManagement business, those monthly trends were largely in line with our quarterly results. And then as we move into January—I know this is to be one of the ones you are thinking about—it is strong results in January as well. They were offset by a little bit of weather impact that we saw across the country. The last thing that I would call out here too, Mark, is in our PeopleReady on-demand business, which is one of your questions, we did see stronger performance in our local business versus our national accounts, really driven by a lot of the sales investments that we have made there. And then from an end-market perspective, I would say the biggest improvements we saw across our portfolio were energy, hospitality, manufacturing.

And then just going back to the gross margins, what was the difference in terms of what changed the level of favorability in terms of the accrual reversals a year ago relative to this year?

No change in our expectations. So we guided to that as well. It had about a 290 basis points impact to Q4 results, Mark. But we called those out Q4 of 2024 as well. They were really our prior-year reserve credits that impacted it. So that is the impact.

I am just trying to get to what caused the change. In other words, are you starting to see a higher level of workers’ comp claims? Are the cost of the claims potentially changing at all? What is going on underneath the surface?

Great question. So, no. From a worker safety perspective, this is really important to our business. We continue to manage our safety and claims processes very, very closely. A lot of what we saw was some of the mix shift in business that we have through our energy business that we talked about, lower revenue models in our on-demand versus our renewables. But nothing changed to the underlying fundamentals. Once we work through Q1, which we guided to as well, this normalizes.

Okay. So it will normalize starting in Q2?

That is right.

Okay. Great. And then you mentioned the non-cash impairment charge of $18,000,000 with regards to the Chicago support center. How much is that going to save you in cash going forward?

$30,000,000 over the next ten years.

Is that $3,000,000 per year?

It will, with rent escalations, a little bit. So I would say between $3,000,000 and $5,000,000 through those terms. The other thing to call out here is ongoing SG&A savings, about $1,000,000 in 2026. We will have about $3,000,000 in 2027, and then following those cash savings that we talked about is $3,000,000 to $5,000,000 thereafter.

And then are you including a WOTC credit in your projections for 2026 or not?

We do. We have small WOTC credits included in there.

Why? It has not passed legislation yet.

Not in our guidance. We do not have anything in our guidance, Mark.

Okay. Great. Thanks. I will jump back in the queue.

Thank you, Mark.

Thanks.

Our next question is from Jessica Luce with Northcoast Research.

Hi. Good evening.

Hi, thank you for taking the question. I wanted to comment—I know that you mentioned that there are some stronger signs within the local business, and I am curious how you would characterize your conversations with customers today versus if you look back about six months ago?

Yes, great question. Thank you. I would say, overall, our customer sentiment remains cautious due to ongoing uncertainties in the environment. With that said, we are encouraged to see the positive momentum in the business and signs of stabilization, particularly in our on-demand business with our second quarter of organic revenue growth here in Q4. We are seeing momentum and a return to growth among some clients and geographies, with our teams securing new wins and customer expansions—really all good signs that customers are beginning to experience positive momentum, tempered with some of that uncertainty we talked about.

Okay. Perfect. Thank you so much for the clarity. And then just one brief follow-up. How would you describe the current pricing environment? Is there anything that stands out right now?

Yes. Thank you for the question. From a pricing standpoint, we continue to see some pricing pressure in the business. We had our pay rates up about 3.8% in the quarter while bill rates were up 2.5%. It led to about a 40 bps decline in our margin during the quarter. Really, pay rates were largely in line with where they were in Q3, Jessica, and increasingly driven by role-specific skills rather than general labor shortages. So while there is still some pricing pressure in the business that we would expect in this environment, we continue to be disciplined with pricing to ensure that we are not pricing ourselves out of the market, feeling good about being able to pass through our bill rate increases.

Alright. Perfect. Thank you so much.

Thank you.

Thank you. There are no further questions at this time. I would like to hand the floor back over to management for any closing comments.

Thank you, Operator, and thank you, everyone, for joining us today. I want to take this opportunity to thank the entire TrueBlue, Inc. team for their tremendous effort providing our customers and associates with exceptional service and for their commitment to advancing our mission to connect people and work. We look forward to speaking with you at upcoming investor events and on our next quarterly call. If you have any questions, please do not hesitate to reach out.