Company Quick10K Filing
Trueblue
Price20.98 EPS2
Shares39 P/E12
MCap828 P/FCF16
Net Debt-32 EBIT82
TEV797 TEV/EBIT10
TTM 2019-09-29, in MM, except price, ratios
10-Q 2021-03-28 Filed 2021-04-26
10-K 2020-12-27 Filed 2021-02-22
10-Q 2020-09-27 Filed 2020-10-26
10-Q 2020-06-28 Filed 2020-07-27
10-Q 2020-03-29 Filed 2020-05-04
10-K 2019-12-29 Filed 2020-02-24
10-Q 2019-09-29 Filed 2019-10-28
10-Q 2019-06-30 Filed 2019-07-30
10-Q 2019-03-31 Filed 2019-04-29
10-K 2018-12-30 Filed 2019-02-22
10-Q 2018-09-30 Filed 2018-11-05
10-Q 2018-07-01 Filed 2018-07-30
10-Q 2018-04-01 Filed 2018-04-30
10-K 2017-12-31 Filed 2018-02-26
10-Q 2017-10-01 Filed 2017-10-30
10-Q 2017-07-02 Filed 2017-07-31
10-Q 2017-04-02 Filed 2017-05-01
10-K 2017-01-01 Filed 2017-02-24
10-Q 2016-09-23 Filed 2016-10-24
10-Q 2016-06-24 Filed 2016-07-25
10-Q 2016-03-25 Filed 2016-04-25
10-K 2015-12-25 Filed 2016-02-22
10-Q 2015-09-25 Filed 2015-10-26
10-Q 2015-06-26 Filed 2015-08-05
10-Q 2015-03-27 Filed 2015-04-29
10-K 2014-12-26 Filed 2015-02-23
10-Q 2014-09-26 Filed 2014-10-27
10-Q 2014-06-27 Filed 2014-07-28
10-Q 2014-03-28 Filed 2014-04-28
10-K 2013-12-27 Filed 2014-02-20
10-Q 2013-09-27 Filed 2013-10-28
10-Q 2013-06-28 Filed 2013-07-29
10-Q 2013-03-29 Filed 2013-04-29
10-K 2012-12-28 Filed 2013-02-21
10-Q 2012-09-28 Filed 2012-10-29
10-Q 2012-06-29 Filed 2012-07-30
10-Q 2012-03-30 Filed 2012-04-30
10-K 2011-12-30 Filed 2012-02-23
10-Q 2011-09-30 Filed 2011-10-31
10-Q 2011-07-01 Filed 2011-08-01
10-Q 2011-04-01 Filed 2011-05-06
10-K 2010-12-31 Filed 2011-02-22
10-Q 2010-09-24 Filed 2010-10-29
10-Q 2010-06-25 Filed 2010-07-30
10-Q 2010-03-26 Filed 2010-04-30
10-K 2009-12-25 Filed 2010-02-16
8-K 2020-10-26
8-K 2020-07-27
8-K 2020-07-27
8-K 2020-06-24
8-K 2020-05-13
8-K 2020-05-04
8-K 2020-04-06
8-K 2020-03-26
8-K 2020-03-16
8-K 2020-03-02
8-K 2020-02-05
8-K 2019-11-11
8-K 2019-10-28
8-K 2019-10-28
8-K 2019-08-15
8-K 2019-07-29
8-K 2019-05-17
8-K 2019-04-29
8-K 2019-02-07
8-K 2018-12-13
8-K 2018-11-05
8-K 2018-09-18
8-K 2018-07-30
8-K 2018-07-30
8-K 2018-07-13
8-K 2018-06-13
8-K 2018-05-14
8-K 2018-04-30
8-K 2018-02-07
8-K 2018-01-04

TBI 10Q Quarterly Report

Part I. Financial Information
Item 1. Consolidated Financial Statements
Note 1: Summary of Significant Accounting Policies
Note 2: Fair Value Measurement
Note 3: Restricted Cash and Investments
Note 4: Supplemental Balance Sheet Information
Note 5: Workers' Compensation Insurance and Reserves
Note 6: Commitments and Contingencies
Note 7: Shareholders' Equity
Note 8: Income Taxes
Note 9: Net Income (Loss) per Share
Note 10: Segment Information
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Index To Exhibits
EX-31.1 tbi10k32821ex311.htm
EX-31.2 tbi10q32821ex312.htm
EX-32.1 tbi10k32821ex321.htm

Trueblue Earnings 2021-03-28

Balance SheetIncome StatementCash Flow
1.31.00.80.50.30.02012201420172020
Assets, Equity
0.90.70.50.30.1-0.12012201420172020
Rev, G Profit, Net Income
0.20.1-0.0-0.2-0.3-0.42012201420172020
Ops, Inv, Fin

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 28, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-14543
____________________________________ 
tbi-20210328_g1.jpg
TrueBlue, Inc.
(Exact name of registrant as specified in its charter)
______________________________________ 
Washington91-1287341
(State of incorporation)(I.R.S. employer identification no.)

1015 A Street, Tacoma, Washington 98402
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code:    (253383-9101
______________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, no par valueTBINew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.        Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
 Non-accelerated filer
Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of April 12, 2021, there were 35,471,339 shares of the registrant’s common stock outstanding.



TrueBlue, Inc.
Table of Contents
  
  
Page
PART I. FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.






Page - 2

Table of Contents

PART I. FINANCIAL INFORMATION
Item 1.
CONSOLIDATED FINANCIAL STATEMENTS
TRUEBLUE, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except par value data)March 28,
2021
December 27,
2020
ASSETS
Current assets:
Cash and cash equivalents$88,006 $62,507 
Accounts receivable, net of allowance of $2,462 and $2,921
260,108 278,343 
Prepaid expenses and other current assets29,436 26,137 
Income tax receivable6,461 11,898 
Total current assets384,011 378,885 
Property and equipment, net76,109 71,734 
Restricted cash and investments231,178 240,534 
Deferred income taxes, net35,058 30,019 
Goodwill94,937 94,873 
Intangible assets, net27,101 28,929 
Operating lease right-of-use assets, net60,101 65,940 
Workers’ compensation claims receivable, net53,547 52,934 
Other assets, net17,395 16,729 
Total assets$979,437 $980,577 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and other accrued expenses$48,168 $58,447 
Accrued wages and benefits126,906 122,657 
Current portion of workers’ compensation claims reserve62,005 66,007 
Current operating lease liabilities13,308 13,938 
Other current liabilities8,102 7,918 
Total current liabilities258,489 268,967 
Workers’ compensation claims reserve, less current portion191,989 189,486 
Long-term deferred compensation liabilities26,470 26,361 
Long-term operating lease liabilities53,657 54,797 
Other long-term liabilities3,205 3,776 
Total liabilities533,810 543,387 
Commitments and contingencies (Note 6)
Shareholders’ equity:
Preferred stock, $0.131 par value, 20,000 shares authorized; No shares issued and outstanding
  
Common stock, no par value, 100,000 shares authorized; 35,474 and 35,493 shares issued and outstanding
1 1 
Accumulated other comprehensive loss(14,332)(14,828)
Retained earnings459,958 452,017 
Total shareholders’ equity445,627 437,190 
Total liabilities and shareholders’ equity$979,437 $980,577 
See accompanying notes to consolidated financial statements
Page - 3

Table of Contents

TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
Thirteen weeks ended
(in thousands, except per share data)March 28,
2021
March 29,
2020
Revenue from services$458,706 $494,252 
Cost of services 348,132 368,093 
Gross profit110,574 126,159 
Selling, general and administrative expense97,401 117,381 
Depreciation and amortization6,962 9,094 
Goodwill and intangible asset impairment charge 175,189 
Income (loss) from operations6,211 (175,505)
Interest expense and other income, net575 263 
Income (loss) before tax expense (benefit)6,786 (175,242)
Income tax benefit(112)(24,748)
Net income (loss)$6,898 $(150,494)
Net income (loss) per common share:
Basic$0.20 $(4.04)
Diluted$0.20 $(4.04)
Weighted average shares outstanding:
Basic34,674 37,255 
Diluted35,066 37,255 
Other comprehensive income (loss):
Foreign currency translation adjustment$496 $(6,625)
Comprehensive income (loss)$7,394 $(157,119)
See accompanying notes to consolidated financial statements
Page - 4

Table of Contents

TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Thirteen weeks ended
(in thousands)March 28,
2021
March 29,
2020
Cash flows from operating activities:
Net income (loss)$6,898 $(150,494)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization6,962 9,094 
Goodwill and intangible asset impairment charge 175,189 
Allowance for credit losses207 3,289 
Stock-based compensation3,343 1,508 
Deferred income taxes(5,002)(23,432)
Non-cash lease expense3,920 3,763 
Other operating activities(438)5,375 
Changes in operating assets and liabilities:
Accounts receivable18,025 45,407 
Income tax receivable4,910 435 
Operating lease right-of-use asset3,501  
Other assets(4,578)5,958 
Accounts payable and other accrued expenses(9,633)(28,443)
Accrued wages and benefits4,249 (11,733)
Workers’ compensation claims reserve(1,499)(2,163)
Operating lease liabilities(3,320)(3,811)
Other liabilities338 (2,334)
Net cash provided by operating activities27,883 27,608 
Cash flows from investing activities:
Capital expenditures(10,003)(7,028)
Purchases of restricted available-for-sale investments(14)(1,149)
Sales of restricted available-for-sale investments452 1,269 
Maturities of restricted held-to-maturity investments6,371 6,168 
Net cash used in investing activities(3,194)(740)
Cash flows from financing activities:
Purchases and retirement of common stock (52,348)
Net proceeds from employee stock purchase plans 255 323 
Common stock repurchases for taxes upon vesting of restricted stock(2,555)(1,792)
Net change in revolving credit facility 256,400 
Other(94)(508)
Net cash provided by (used in) financing activities(2,394)202,075 
Effect of exchange rate changes on cash, cash equivalents and restricted cash262 (1,738)
Net change in cash, cash equivalents and restricted cash22,557 227,205 
Cash, cash equivalents and restricted cash, beginning of period118,612 92,371 
Cash, cash equivalents and restricted cash, end of period$141,169 $319,576 
Supplemental disclosure of cash flow information:
Cash paid (received) during the period for:
Interest$477 $394 
Income taxes(20)(1,751)
Operating lease liabilities4,142 4,440 
Non-cash transactions:
Property and equipment purchased but not yet paid702 322 
Right-of-use assets obtained in exchange for new operating lease liabilities1,453 2,422 
See accompanying notes to consolidated financial statements
Page - 5

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE 1:    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial statement preparation
The accompanying unaudited consolidated financial statements (“financial statements”) of TrueBlue, Inc. (the “company,” “TrueBlue,” “we,” “us,” and “our”) are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, certain information and footnote disclosures usually found in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The financial statements reflect all adjustments which, in the opinion of management, are necessary to fairly state the financial statements for the interim periods presented. We follow the same accounting policies for preparing both quarterly and annual financial statements.
The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The severity, magnitude and duration, as well as the economic consequences of the COVID-19 pandemic, are uncertain, rapidly changing and difficult to predict. Therefore, our accounting estimates and assumptions might change materially in future periods.
These financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 27, 2020. The results of operations for the thirteen weeks ended March 28, 2021 are not necessarily indicative of the results expected for the full fiscal year nor for any other fiscal period.
Reclassifications
Certain previously reported immaterial prior year amounts have been reclassified within current liabilities on our Consolidated Balance Sheets to conform to current year presentation.
Recently adopted accounting standards
There were no new accounting pronouncements adopted during the period that had an impact on our financial statements.
Recently issued accounting pronouncements not yet adopted
There are no accounting pronouncements which have not yet been adopted that are expected to have a significant impact on our financial statements and related disclosures.
NOTE 2:    FAIR VALUE MEASUREMENT
Assets measured at fair value on a recurring basis
Our assets measured at fair value on a recurring basis consisted of the following:
March 28, 2021
(in thousands)Total fair valueQuoted prices in active markets for identical assets (level 1)Significant other observable inputs (level 2)Significant unobservable inputs (level 3)
Cash and cash equivalents$88,006 $88,006 $ $ 
Restricted cash and cash equivalents53,163 53,163   
Cash, cash equivalents and restricted cash (1)$141,169 $141,169 $ $ 
Municipal debt securities$68,720 $ $68,720 $ 
Corporate debt securities79,754  79,754  
Agency mortgage-backed securities365  365  
U.S. government and agency securities1,097  1,097  
Restricted investments classified as held-to-maturity (2)$149,936 $ $149,936 $ 
Deferred compensation investments (3)$5,821 $5,821 $ $ 
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December 27, 2020
(in thousands)Total fair valueQuoted prices in active markets for identical assets (level 1)Significant other observable inputs (level 2)Significant unobservable inputs (level 3)
Cash and cash equivalents$62,507 $62,507 $ $ 
Restricted cash and cash equivalents56,105 56,105   
Cash, cash equivalents and restricted cash (1)$118,612 $118,612 $ $ 
Municipal debt securities$70,723 $ $70,723 $ 
Corporate debt securities85,937  85,937  
Agency mortgage-backed securities512  512  
U.S. government and agency securities1,124  1,124  
Restricted investments classified as held-to-maturity (2)$158,296 $ $158,296 $ 
Deferred compensation investments (3)$5,915 $5,915 $ $ 
(1)Cash, cash equivalents and restricted cash include money market funds and deposits.
(2)Refer to Note 3: Restricted Cash and Investments for additional details on our held-to-maturity debt securities.
(3)Deferred compensation investments consist of mutual funds and money market funds. Refer to Note 3: Restricted Cash and Investments for additional details on these investments.
NOTE 3:    RESTRICTED CASH AND INVESTMENTS
The following is a summary of the carrying value of our restricted cash and investments:
(in thousands)March 28,
2021
December 27,
2020
Cash collateral held by insurance carriers$26,745 $26,025 
Cash and cash equivalents held in Trust 25,586 29,410 
Investments held in Trust145,244 152,247 
Deferred compensation investments5,821 5,915 
Company owned life insurance policies26,950 26,267 
Other restricted cash and cash equivalents832 670 
Total restricted cash and investments$231,178 $240,534 
Held-to-maturity
Restricted cash and investments include collateral that has been provided or pledged to insurance carriers for workers’ compensation and state workers’ compensation programs. Our insurance carriers and certain state workers’ compensation programs require us to collateralize a portion of our workers’ compensation obligation. The collateral typically takes the form of cash and cash equivalents and highly rated investment grade securities, primarily in debt and asset-backed securities. The majority of our collateral obligations are held in a trust at the Bank of New York Mellon (“Trust”).
The amortized cost and estimated fair value of our held-to-maturity investments held in Trust, aggregated by investment category as of March 28, 2021 and December 27, 2020, were as follows:
March 28, 2021
(in thousands)Amortized costGross unrealized gainsGross unrealized lossesFair value
Municipal debt securities$65,840 $2,880 $ $68,720 
Corporate debt securities78,056 1,974 (276)79,754 
Agency mortgage-backed securities351 14  365 
U.S. government and agency securities997 100  1,097 
Total held-to-maturity investments$145,244 $4,968 $(276)$149,936 
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December 27, 2020
(in thousands)Amortized costGross unrealized gainsGross unrealized lossesFair value
Municipal debt securities$67,287 $3,436 $ $70,723 
Corporate debt securities83,467 2,511 (41)85,937 
Agency mortgage-backed securities493 19  512 
U.S. government and agency securities1,000 124  1,124 
Total held-to-maturity investments$152,247 $6,090 $(41)$158,296 
The amortized cost and fair value by contractual maturity of our held-to-maturity investments are as follows:
March 28, 2021
(in thousands)Amortized costFair value
Due in one year or less$22,519 $22,675 
Due after one year through five years109,541 113,285 
Due after five years through ten years13,184 13,976 
Total held-to-maturity investments$145,244 $149,936 
Actual maturities may differ from contractual maturities because the issuers of certain debt securities have the right to call or prepay their obligations without penalty. We have no significant concentrations of counterparties in our held-to-maturity investment portfolio.
Deferred compensation investments and company owned life insurance policies
We hold mutual funds, money market funds and company owned life insurance policies to support our deferred compensation liability. Unrealized gains and losses related to these investments still held at March 28, 2021 and March 29, 2020, included in selling general and administrative expense on our Consolidated Statements of Operations and Comprehensive Income (Loss), were as follows:
Thirteen weeks ended
(in thousands)March 28,
2021
March 29,
2020
Unrealized gains (losses)$877 $(4,841)
NOTE 4:    SUPPLEMENTAL BALANCE SHEET INFORMATION
Accounts receivable allowance
The activity related to the allowance for accounts receivable was as follows:
Thirteen weeks ended
(in thousands)March 28,
2021
March 29,
2020
Beginning balance$2,921 $4,288 
Cumulative-effect adjustment (1) 524 
Current period provision207 3,289 
Write-offs(669)(1,699)
Foreign currency translation3 (23)
Ending balance$2,462 $6,379 
(1)As a result of our adoption of the accounting standard for credit losses, we recognized a cumulative-effect adjustment to our account receivable allowance of $0.5 million as of the beginning of the first quarter of 2020.
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Prepaid expenses and other current assets
(in thousands)March 28,
2021
December 27,
2020
Prepaid software agreements$9,637 $8,643 
Other prepaid expenses9,105 8,631 
Other current assets10,694 8,863 
Prepaid expenses and other current assets$29,436 $26,137 

Accrued wages and benefits
(in thousands)March 28,
2021
December 27,
2020
Deferred employer payroll tax$58,230 $55,420 
Other accrued wages and benefits68,676 67,237 
Accrued wages and benefits$126,906 $122,657 
On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief and Economic Security Act, which among other things, provided employer payroll tax credits for wages paid to employees who were unable to work during the COVID-19 outbreak. Additionally, we were allowed to delay payments for the employer portion of social security taxes (6.2% of taxable wages) incurred between March 27, 2020 and December 31, 2020, for both our temporary associates and permanent employees. We anticipate the deferred amount will be paid by September 15, 2021.
NOTE 5:    WORKERS’ COMPENSATION INSURANCE AND RESERVES
We provide workers’ compensation insurance for our associates and permanent employees. The majority of our current workers’ compensation insurance policies cover claims for a particular event above a $2.0 million deductible limit, on a “per occurrence” basis. This results in our being substantially self-insured.
Our workers’ compensation reserve for claims below the deductible limit is discounted to its estimated net present value using discount rates based on average returns of “risk-free” U.S. Treasury instruments available during the year in which the liability was incurred. The weighted average discount rate was 1.7% and 1.8% at March 28, 2021 and December 27, 2020, respectively. Payments made against self-insured claims are made over a weighted average period of approximately 5.5 years as of March 28, 2021.
The following table presents a reconciliation of the undiscounted workers’ compensation reserve to the discounted workers’ compensation reserve for the periods presented:
(in thousands)March 28,
2021
December 27,
2020
Undiscounted workers’ compensation reserve$271,593 $273,502 
Less discount on workers’ compensation reserve17,599 18,009 
Workers’ compensation reserve, net of discount253,994 255,493 
Less current portion62,005 66,007 
Long-term portion$191,989 $189,486 
Payments made against self-insured claims were $11.2 million and $14.6 million for the thirteen weeks ended March 28, 2021 and March 29, 2020, respectively.
Our workers’ compensation reserve includes estimated expenses related to claims above our self-insured limits (“excess claims”), and we record a corresponding receivable for the insurance coverage on excess claims based on the contractual policy agreements we have with insurance carriers. We discount this reserve and corresponding receivable to its estimated net present value using the discount rates based on average returns of “risk-free” U.S. Treasury instruments available during the year in which the liability was incurred. At March 28, 2021 and December 27, 2020, the weighted average rate was 1.2% and 1.3%, respectively. The claim payments are made and the corresponding reimbursements from our insurance carriers are received over an estimated weighted average period of approximately 17 years. The discounted workers’ compensation reserve for excess claims was $54.6 million and $54.0 million, and the corresponding gross receivable for the insurance on excess claims was $53.6 million and $52.9 million as of March 28, 2021 and December 27, 2020, respectively.
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Workers’ compensation cost consists primarily of changes in self-insurance reserves net of changes in discount, monopolistic jurisdictions’ premiums, insurance premiums and other miscellaneous expenses. Workers’ compensation cost of $10.1 million and $14.3 million was recorded in cost of services on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen weeks ended March 28, 2021 and March 29, 2020, respectively.
NOTE 6:    COMMITMENTS AND CONTINGENCIES
Workers’ compensation commitments
We have provided our insurance carriers and certain states with commitments in the form and amounts listed below:
(in thousands)March 28,
2021
December 27,
2020
Cash collateral held by workers’ compensation insurance carriers$22,434 $22,253 
Cash and cash equivalents held in Trust25,586 29,410 
Investments held in Trust145,244 152,247 
Letters of credit (1)6,095 6,095 
Surety bonds (2)20,831 20,616 
Total collateral commitments$220,190 $230,621 
(1)We have agreements with certain financial institutions to issue letters of credit as collateral.
(2)Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which are determined by each independent surety carrier. These fees do not exceed 2.0% of the bond amount, subject to a minimum charge. The terms of these bonds are subject to review and renewal every one to four years and most bonds can be canceled by the sureties with as little as 60 days’ notice.
Legal contingencies and developments
We are involved in various proceedings arising in the normal course of conducting business. We believe the liabilities included in our financial statements reflect the probable loss that can be reasonably estimated. The amounts recorded are immaterial and resolution of those proceedings are not expected to have a material effect on our results of operations, financial condition nor cash flows.
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NOTE 7:    SHAREHOLDERS’ EQUITY
Changes in the balance of each component of shareholders’ equity during the reporting periods were as follows:
Thirteen weeks ended
(in thousands)March 28,
2021
March 29,
2020
Common stock shares
Beginning balance35,493 38,593 
Purchases and retirement of common stock (2,930)
Net issuance under equity plans, including tax benefits(23)415 
Stock-based compensation4 50 
Ending balance35,474 36,128 
Common stock amount
Beginning balance$1 $1 
Current period activity— — 
Ending balance1 1 
Retained earnings
Beginning balance452,017 639,210 
Net income (loss)6,898 (150,494)
Purchases and retirement of common stock (1) (52,346)
Net issuance under equity plans, including tax benefits(2,300)(1,471)
Stock-based compensation3,343 1,507 
Change in accounting standard cumulative-effect adjustment (2) (602)
Ending balance459,958 435,804 
Accumulated other comprehensive loss
Beginning balance, net of tax(14,828)(13,238)
Foreign currency translation adjustment496 (6,625)
Ending balance, net of tax(14,332)(19,863)
Total shareholders’ equity ending balance$445,627 $415,942 
(1)Under applicable Washington State law, shares purchased are not displayed separately as treasury stock on our Consolidated Balance Sheets and are treated as authorized but unissued shares. It is our accounting policy to first record these purchases as a reduction to our common stock account. Once the common stock account has been reduced to a nominal balance, remaining purchases are recorded as a reduction to our retained earnings. Furthermore, activity in our common stock account related to stock-based compensation is also recorded to retained earnings until such time as the reduction to retained earnings due to stock repurchases has been recovered.
(2)As a result of our adoption of the accounting standard for credit losses, we recognized a cumulative-effect adjustment to retained earnings of $0.6 million in the first quarter of 2020.
NOTE 8:    INCOME TAXES
Our income tax provision or benefit for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate and, if our estimated tax rate changes, we make a cumulative adjustment. Our quarterly tax provision and quarterly estimate of our annual effective tax rate are subject to variation due to several factors, including variability in accurately predicting our full year pre-tax income and loss by jurisdiction, tax credits, government audit developments, changes in laws, regulations and administrative practices, and relative changes in expenses or losses for which tax benefits are not recognized. Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income. For example, the impact of discrete items, tax credits, and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower.
Our effective tax rate benefit for the thirteen weeks ended March 28, 2021 was 1.7%. The difference between the statutory federal income tax rate of 21% and our effective income tax rate results primarily from the federal Work Opportunity Tax Credit (“WOTC”). WOTC is designed to encourage employers to hire workers from certain targeted groups with higher than
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average unemployment rates. Other differences between the statutory federal income tax rate result from state and foreign income taxes, certain non-deductible and non-taxable items, and tax effects of stock-based compensation.
NOTE 9:    NET INCOME (LOSS) PER SHARE
Diluted common shares were calculated as follows:
Thirteen weeks ended
(in thousands, except per share data)March 28,
2021
March 29,
2020
Net income (loss)$6,898 $(150,494)
Weighted average number of common shares used in basic net income (loss) per common share34,674 37,255 
Dilutive effect of non-vested restricted stock392  
Weighted average number of common shares used in diluted net income (loss) per common share35,066 37,255 
Net income (loss) per common share:
Basic$0.20 $(4.04)
Diluted$0.20 $(4.04)
Anti-dilutive shares345 602 
NOTE 10:    SEGMENT INFORMATION
Our operating segments and reportable segments are described below:
Our PeopleReady reportable segment provides blue-collar, contingent staffing through the PeopleReady operating segment. PeopleReady provides on-demand and skilled labor in a broad range of industries that include construction, manufacturing and logistics, warehousing and distribution, retail, waste and recycling, energy, hospitality, and general labor.
Our PeopleManagement reportable segment provides contingent labor and outsourced industrial workforce solutions, primarily on-site at the client’s facility, through the following operating segments, which we have aggregated into one reportable segment in accordance with U.S. GAAP:
On-Site: On-site management and recruitment for the contingent industrial workforce of manufacturing, warehouse, and distribution facilities; and
Centerline: Recruitment and management of contingent and dedicated commercial drivers to the transportation and distribution industries.
Our PeopleScout reportable segment provides high-volume, permanent employee recruitment process outsourcing, employer branding services and management of outsourced labor service providers through the following operating segments, which we have aggregated into one reportable segment in accordance with U.S. GAAP:
PeopleScout RPO: Outsourced recruitment of permanent employees on behalf of clients and employer branding services; and
PeopleScout MSP: Management of multiple third-party staffing vendors on behalf of clients.
The following table presents our revenue disaggregated by major source and segment and a reconciliation of segment revenue from services to total company revenue:
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Thirteen weeks ended
(in thousands)March 28,
2021
March 29,
2020
Revenue from services:
Contingent staffing
PeopleReady$260,392 $299,294 
PeopleManagement151,754 141,614 
Human resource outsourcing
PeopleScout46,560 53,344 
Total company$458,706 $494,252 
The following table presents a reconciliation of segment profit to income (loss) before tax expense (benefit):
Thirteen weeks ended
(in thousands)March 28,
2021
March 29,
2020
Segment profit (loss):
PeopleReady$11,860 $7,655 
PeopleManagement3,116 (314)
PeopleScout4,037 2,508 
Total segment profit19,013 9,849 
Corporate unallocated (5,619)(5,209)
Work Opportunity Tax Credit processing fees(135)(135)
Amortization of software as a service assets(673)(552)
Goodwill and intangible asset impairment charge (175,189)
Workforce reduction costs(70)(1,308)
COVID-19 government subsidies, net1,743  
Other benefits (costs)(1,086)6,133 
Depreciation and amortization (6,962)(9,094)
Income (loss) from operations6,211 (175,505)
Interest expense and other income, net575 263 
Income (loss) before tax expense (benefit)$6,786 $(175,242)
Asset information by reportable segment is not presented since we do not manage our segments on a balance sheet basis.

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Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
COMMENT ON FORWARD LOOKING STATEMENTS
Certain statements in this Form 10-Q, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, the impact of and our ongoing response to COVID-19, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements involve risks and uncertainties, and future events and circumstances could differ significantly from those anticipated in the forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “goal,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially from those expressed or implied in our forward-looking statements, including the risks and uncertainties described in “Management’s Discussion and Analysis of Financial Condition and results of Operations” (Part I, Item 2 of this Form 10-Q),“Quantitative and Qualitative Disclosures about Market Risk” (Part I, Item 3 of this Form 10-Q), and “Risk Factors” (Part II, Item 1A of this Form 10-Q). We undertake no duty to update or revise publicly any of the forward-looking statements after the date of this report or to conform such statements to actual results or to changes in our expectations, whether because of new information, future events, or otherwise.
OVERVIEW
TrueBlue, Inc. (the “company,” “TrueBlue,” “we,” “us” and “our”) is a leading provider of specialized workforce solutions that help our clients achieve business growth and improve productivity . Our operations are managed as three business segments: PeopleReady, PeopleManagement and PeopleScout. Our PeopleReady segment offers on-demand, industrial staffing; our PeopleManagement segment offers contingent, on-site industrial staffing and commercial driver services; and our PeopleScout segment offers recruitment process outsourcing (“RPO”) and managed service provider (“MSP”) solutions. See Note 10: Segment Information, to our consolidated financial statements found in Item 1 of this Quarterly Report on Form 10-Q, for additional details on our operating segments and reportable segments.
The COVID-19 pandemic
Since early 2020, the coronavirus (“COVID-19”) outbreak, characterized as a pandemic by the World Health Organization on March 11, 2020, has caused significant economic disruptions globally. Throughout the pandemic, our business has remained open and we have continued to provide key services to essential businesses and other businesses as COVID-19 restrictions were lifted. Nevertheless, the preventative measures and individual precautions taken to help curb the spread of COVID-19, and the resulting negative impact on economic activity, continue to have an adverse impact on client demand for our services, availability of qualified associates and our business results. In early 2020, we implemented comprehensive measures across our businesses to keep our associates, employees and clients healthy and safe. We remain committed to prioritizing the health and well-being of our associates, employees and clients. Our employees and management team have successfully operated the business with our work-from-home arrangements. We have no plans to return to our support center offices prior to the Fall of 2021. Thereafter, the timing and phased reentry plans will vary by location and employee.
In December 2020, two COVID-19 vaccines were approved for emergency use by the Food and Drug Administration to be administered in the United States (“U.S.”) and since then an additional vaccine has been approved. While initial quantities of the vaccines were limited, the speed of vaccinations throughout the first quarter exceeded initial governmental targets. While the ongoing effects of the COVID-19 pandemic continue to negatively impact our results and year-over-year comparisons, we are seeing improving volumes from existing clients, including clients in industries that were disproportionately impacted by COVID-19, such as travel and leisure, as well as encouraging new business wins. In addition, our focus on efficiently managing costs while ensuring we continue to invest in digital strategies and sales resources has allowed us to accelerate our strategic priorities and emerge stronger as the economy begins to shift back to growth.
Our strong balance sheet and operational flexibility have helped us successfully manage through the ongoing impacts of the COVID-19 pandemic to date while protecting our cash flow and liquidity. We continue to evaluate the nature and extent of changes to the market and economic conditions related to the COVID-19 pandemic and will assess the potential impact on our business and financial position. We expect that the pandemic will continue to have an adverse effect on our results, although the magnitude, duration and full effects of the pandemic are difficult to predict at this time. For additional discussion on the uncertainties and business risks associated with COVID-19, refer to “Risk Factors” in Part II, Item 1A of this Form 10-Q.
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First quarter of 2021 highlights
Revenue from services
Total company revenue declined 7.2% to $458.7 million for the thirteen weeks ended March 28, 2021, compared to the same period in the prior year. The decline was due to reduced client demand for our services primarily associated with the continued negative impact of the COVID-19 pandemic. Revenue trends have improved compared to the fiscal fourth quarter of 2020, which had revenue declines of 12.3%, compared to the same period in the prior year. This improvement is primarily driven by improving volumes from existing clients, including clients in industries that were disproportionately impacted by COVID-19, as well as new business wins.
PeopleReady, our largest segment, experienced a revenue decline of 13.0% for the thirteen weeks ended March 28, 2021, compared to the same period in the prior year. PeopleReady provides a wide range of staffing solutions for on-demand contingent general and skilled labor. PeopleReady has seen improved demand for contingent labor, but the supply of workers is a challenge in certain markets, which we believe is temporarily impacted by stimulus checks and elevated federal unemployment benefits, which are set to expire on September 6, 2021. PeopleManagement, our lowest margin segment, experienced revenue growth of 7.2% for the thirteen weeks ended March 28, 2021, compared to the same period in the prior year. PeopleManagement supplies an outsourced workforce that involves multi-year, multi-million dollar on-site and driver relationships. These types of client engagements are often more resilient in an economic downturn. PeopleScout, our highest margin segment, experienced a revenue decline of 12.7% for the thirteen weeks ended March 28, 2021, compared to the same period in the prior year. PeopleScout has a large number of clients in industries that were disproportionately impacted by COVID-19 and, while volumes are improving, these industries continued to be disproportionately impacted by COVID-19 during the fiscal first quarter of 2021.
Gross profit margin
Total company gross profit as a percentage of revenue for the thirteen weeks ended March 28, 2021 decreased by 140 basis points to 24.1%, compared to 25.5% for the same period in the prior year. Our staffing businesses contributed 150 basis points of compression, with 130 basis points from a non-recurring benefit in the prior year related to a reduction in expected costs to comply with the Affordable Care Act. The remaining 20 basis points of compression from our staffing business was driven by a 90 basis point compression due to the differential between amounts billed to clients and paid to associates (“bill pay spreads”), offset by a benefit of 70 basis points due to lower workers’ compensation expense as a result of a reduction to reserves largely associated with favorable patterns in claim development. Our PeopleScout business helped offset overall margin compression with an approximate 10 basis point expansion.
Selling, general and administrative (“SG&A”) expense
Total company SG&A expense decreased by $20.0 million to $97.4 million, or 21.2% of revenue for the thirteen weeks ended March 28, 2021, compared to $117.4 million, or 23.7% of revenue for the same period in the prior year. We took steps during fiscal 2020 to reduce SG&A expense while preserving our operational strengths, to ensure the business is well-positioned for growth as economic conditions improve. The decrease in SG&A expense benefited from $1.4 million of employee retention subsidies made available under the temporary Canada Emergency Wage Subsidy during the thirteen weeks ended March 28, 2021.
Income from operations
Total company income from operations was $6.2 million for the thirteen weeks ended March 28, 2021, compared to a loss from operations of $175.5 million for the same period in the prior year. The increase in income from operations was primarily due to a goodwill and intangible asset impairment charge of $175.2 million recorded in the fiscal first quarter of 2020. The charge was a result of the adverse impact on expected future cash flows related to the state of the economy at the time and the expected impact of COVID-19 on our business. The remaining increase was driven by improving revenue trends led by improving industry performance, including those disproportionately impacted by COVID-19, a series of new client wins, and disciplined cost management.
Net income
Net income was $6.9 million, or $0.20 per diluted share for the thirteen weeks ended March 28, 2021, compared to a net loss of $150.5 million, or $4.04 per diluted share, which included a non-cash impairment charge of $151.9 million, net of tax, for the same period in the prior year. Net income for the thirteen weeks ended March 28, 2021 includes a nominal income tax benefit as a result of the federal Work Opportunity Tax Credit (“WOTC”) more than offsetting income tax expense. This resulted in an effective tax rate benefit of 1.7% for the period. WOTC is designed to encourage employers to hire associates from certain
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targeted groups with higher than average unemployment rates. The net loss for the thirteen weeks ended March 29, 2020 included an income tax benefit of $24.7 million, $21.8 million of which was due to the goodwill and intangible asset impairment, resulting in an effective tax rate benefit of 14.1%.
Additional highlights
We continue to focus on capital management. As of March 28, 2021, we are in a strong financial position with cash and cash equivalents of $88.0 million, no outstanding debt and $150.0 million available under the most restrictive covenant of our Revolving Credit Facility for total liquidity of $238.0 million.
RESULTS OF OPERATIONS
We report our business as three reportable segments described below and in Note 10: Segment Information, to our consolidated financial statements found in Item 1 of this Quarterly Report on Form 10-Q.
PeopleReady provides access to qualified associates through a wide range of staffing solutions for on-demand contingent general and skilled labor. PeopleReady connects people with work in a broad range of industries that include construction, manufacturing and logistics, warehousing and distribution, waste and recycling, energy, retail and hospitality. As of December 27, 2020, we had a network of 629 branches across all 50 states, Canada and Puerto Rico. Complementing our branch network is our industry-leading mobile app, JobStackTM, which connects people with work 24/7. This creates a virtual exchange between our associates and clients, and allows our branch resources to expand their recruiting, sales and service delivery efforts. JobStack is competitively differentiating our services, expanding our reach into new demographics, and improving our service delivery and work order fill rates, as we embrace a digital future.
PeopleManagement provides recruitment and on-site management of a facility’s contingent industrial workforce throughout the U.S., Canada and Puerto Rico. In comparison with PeopleReady, services are larger in scale and longer in duration, and dedicated service teams are located at the client’s facility. We provide scalable solutions to meet the volume requirements of labor-intensive manufacturing, distribution and fulfillment facilities. Our dedicated service teams work closely with on-site management as an integral part of the production and logistics process, managing all or a subset of the contingent labor for a facility or operational function. Our on-site staffing solutions provide large-scale sourcing, screening, recruiting and management of the contingent workforce at a client’s facility in order to achieve faster hiring, lower total workforce cost, increase safety and compliance, improve retention, create greater volume flexibility, and enhance strategic decision-making through robust reporting and analytics. Our On-Site business includes our Staff Management | SMX and SIMOS Insourcing Solutions branded service offerings, which provide hourly and productivity-based (cost per unit) pricing options for industrial staffing solutions. Client contracts are generally multi-year in duration. The productivity-based pricing leverages a strategically engineered on-site solution to incentivize performance improvements in cost, quality and on-time delivery using a fixed price-per-unit approach. Both hourly and productivity-based pricing are impacted by factors such as geography, volume, job type, and degree of recruiting difficulty.
PeopleManagement also provides dedicated and contingent commercial truck drivers to the transportation and distribution industries through our Centerline Drivers (“Centerline”) brand. Centerline delivers drivers specifically matched to each client’s needs, allowing them to improve productivity, control costs, ensure compliance, and deliver improved service.
PeopleScout offers RPO and MSP solutions to a wide variety of industries and geographies, primarily in the U.S., Canada, the United Kingdom and Australia. PeopleScout provides RPO services that manage talent solutions spanning the global economy and talent advisory capabilities supporting total workforce needs. We are recognized as an industry leader for RPO services. Our solution is highly scalable and flexible, which allows for outsourcing of all or a subset of skill categories across a series of recruitment, hiring and onboarding steps. Our solution delivers improved talent quality and candidate experience, faster hiring, increased scalability, lower cost of recruitment, greater flexibility, and increased compliance. Our clients outsource the recruitment process to PeopleScout in all major industries and jobs. We leverage our proprietary technology platform (AffinixTM) for sourcing, screening and delivering a permanent workforce, along with dedicated service delivery teams to work as an integrated partner with our clients. Affinix uses artificial intelligence and machine learning to search the web and source candidates, which means we can create the first slate of candidates for a job posting within minutes rather than days. Client contracts are generally multi-year in duration and pricing is typically composed of a fee for each hire and talent consulting fees.
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Pricing is impacted by factors such as geography, volume, job type, degree of recruiting difficulty, and the scope of outsourced recruitment and employer branding services included.
PeopleScout also includes our MSP business, which manages our clients’ contingent labor programs including vendor selection, performance management, compliance monitoring and risk management. As the client’s exclusive MSP, we have dedicated service delivery teams which work as an integrated partner with our clients to increase the productivity of their contingent workforce program.
Total company results

The following table presents selected financial data:
Thirteen weeks ended
(in thousands, except percentages and per share data)Mar 28,
2021
% of revenueMar 29,
2020
% of revenue
Revenue from services$458,706 $494,252 
Gross profit$110,574 24.1 %$126,159 25.5 %
Selling, general and administrative expense97,401 21.2 117,381 23.7 
Depreciation and amortization6,962 1.5 9,094 1.8 
Goodwill and intangible asset impairment charge— 175,189 
Income (loss) from operations6,211 1.4 %(175,505)(35.5)%
Interest expense and other income, net575 263 
Income (loss) before tax expense (benefit)6,786 (175,242)
Income tax benefit(112)(24,748)
Net income (loss)$6,898 1.5 %$(150,494)(30.4)%
Net income (loss) per diluted share$0.20 $(4.04)
Revenue from services
Revenue from services by reportable segment was as follows:
Thirteen weeks ended
(in thousands, except percentages)Mar 28,
2021
Growth (decline)
%
Segment % of totalMar 29,
2020
Segment % of total
Revenue from services:
PeopleReady $260,392 (13.0)%56.8 %$299,294 60.5 %
PeopleManagement151,754 7.2 33.1 141,614 28.7 
PeopleScout46,560 (12.7)10.1 53,344 10.8 
          Total company$458,706 (7.2)%100.0 %$494,252 100.0 %
The workforce solutions business is dependent on the overall strength of the labor market. Clients tend to use contingent workers to supplement their existing workforce and generally hire permanent workers when long-term demand is expected to increase. As a consequence, our revenue from services tends to increase quickly when the economy begins to grow. Conversely, our revenue decreases quickly when the economy begins to weaken and thus contingent staff positions are eliminated, permanent hiring is frozen and turnover replacement diminishes.
Total company revenue declined 7.2% to $458.7 million for the thirteen weeks ended March 28, 2021, compared to the same period in the prior year. The decline was due to reduced client demand primarily associated with the continued negative impact of the COVID-19 pandemic. Revenue trends have improved compared to the fiscal fourth quarter of 2020, which had revenue declines of 12.3%, compared to the same period in the prior year. This improvement is driven by improving volumes from existing clients, including clients in industries that were disproportionately impacted by COVID-19, as well as encouraging new business wins.
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PeopleReady
PeopleReady revenue declined to $260.4 million for the thirteen weeks ended March 28, 2021, a 13.0% decrease compared to the same period in the prior year. The decline was due to reduced client demand primarily associated with the continued negative impact of the COVID-19 pandemic. Revenue trends have improved compared to the fiscal fourth quarter of 2020, which had revenue declines of 18.5%, compared to the same period in the prior year. PeopleReady experienced intra-quarter revenue trend improvement in the fiscal first quarter of 2021 as revenue declined 3.1% in March compared to 18.3% in January, compared to the same periods in the prior year. PeopleReady provides a wide range of staffing solutions for on-demand contingent general and skilled labor. PeopleReady has seen improved demand for contingent labor, but the supply of workers is a challenge in certain markets, which we believe is temporarily impacted by stimulus checks and elevated federal unemployment benefits, which are set to expire on September 6, 2021.
We believe the revenue decline was moderated by the use of our industry-leading JobStack mobile app that digitally connects workers with jobs. During the first quarter of 2021, PeopleReady dispatched approximately 716,000 shifts via JobStack and achieved a digital fill rate of 58%, an improvement of seven percentage points compared to the same period in the prior year. JobStack had approximately 26,500 client users as of March 28, 2021, or an increase of 13% compared to March 29, 2020. We are focused on encouraging clients to become JobStack heavy client users, which we define as clients with 50 or more touches on JobStack per month. Heavy client users have consistently posted better year-over-year growth rates compared to other PeopleReady clients. Our heavy client user mix increased from 20% of PeopleReady’s business in the fiscal first quarter of 2020 to 31% in the fiscal first quarter of 2021.
PeopleManagement
PeopleManagement revenue grew to $151.8 million for the thirteen weeks ended March 28, 2021, a 7.2% increase compared to the same period in the prior year. PeopleManagement supplies an outsourced workforce that involves multi-year, multi-million dollar on-site or driver relationships. These types of client engagements are often more resilient in an economic downturn. Revenue trends have improved compared to the fiscal fourth quarter of 2020, which had revenue growth of 4.6%, compared to the same period in the prior year. PeopleManagement experienced intra-quarter revenue trend improvement in the fiscal first quarter of 2021 as revenue grew 15% in March compared to 5% in January, compared to the same periods in the prior year. This improvement in the first quarter was broad-based across most of the industries we serve.
PeopleScout
PeopleScout revenue declined to $46.6 million for the thirteen weeks ended March 28, 2021, a 12.7% decrease compared to the same period in the prior year. The revenue decline was primarily due to reduced demand from existing clients resulting from the economic disruption caused by the impact of COVID-19. PeopleScout clients in the travel and leisure industries were especially impacted. These clients, which represented approximately 24% of the client mix in the prior year, were disproportionately impacted resulting in a 44% decrease in revenue from these clients compared to the same period in the prior year. Revenue trends for the business as a whole have improved compared to the fiscal fourth quarter of 2020, which had revenue declines of 23.8%, compared to the same period in the prior year. PeopleScout experienced intra-quarter revenue trend improvement in the fiscal first quarter of 2021 as revenue grew 4% in March compared to a decline of 25% in January, compared to the same periods in the prior year. This improvement is driven by improving volumes from existing clients, including clients in industries that were disproportionately impacted by COVID-19, as well as encouraging new business wins.
Gross profit margin
Gross profit was as follows:
Thirteen weeks ended
(in thousands, except percentages)Mar 28, 2021Mar 29, 2020
Gross profit$110,574 $126,159 
Percentage of revenue24.1 %25.5 %
Gross profit as a percentage of revenue declined to 24.1%, or 140 basis points for the thirteen weeks ended March 28, 2021, compared to 25.5% for the same period in the prior year. Our staffing businesses contributed 150 basis points of compression, with 130 basis points from a non-recurring benefit in the prior year related to a reduction in expected costs to comply with the Affordable Care Act. The remaining 20 basis points of compression from our staffing business was driven by a 90 basis point compression due to bill pay spreads, offset by a benefit of 70 basis points due to lower workers compensation expense as a result of a reduction to reserves largely associated with favorable patterns in claim development. Our PeopleScout business helped offset overall margin compression with an approximately 10 basis point expansion.
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SG&A expense
SG&A expense was as follows:
Thirteen weeks ended
(in thousands, except percentages)Mar 28, 2021Mar 29, 2020
Selling, general and administrative expense$97,401 $117,381 
Percentage of revenue21.2 %23.7 %
Total company SG&A expense decreased by $20.0 million, or 17.0% for the thirteen weeks ended March 28, 2021, compared to the same period in the prior year. We took steps during fiscal 2020 to reduce SG&A expense while preserving our operational strengths, to ensure the business is well-positioned for growth as economic conditions improve. The decrease in SG&A expense benefited from $1.4 million of employee retention subsidies made available under the temporary Canada Emergency Wage Subsidy during the thirteen weeks ended March 28, 2021. Our focus on efficiently managing costs while ensuring we continue to invest in sales resources and digital strategies have allowed us to accelerate our strategic priorities and emerge stronger as the economy begins to shift back to growth.
Depreciation and amortization
Depreciation and amortization was as follows:
Thirteen weeks ended
(in thousands, except percentages)Mar 28, 2021Mar 29, 2020
Depreciation and amortization$6,962 $9,094 
Percentage of revenue1.5 %1.8 %
Depreciation and amortization decreased for the thirteen weeks ended March 28, 2021 compared to the same period in the prior year primarily due to the impairment to our acquired client relationships intangible assets of $34.7 million in the first quarter of 2020, which resulted in a decline in amortization expense.
Goodwill and intangible asset impairment charge
Goodwill and intangible asset impairment charge was as follows:
Thirteen weeks ended
(in thousands, except percentages)Mar 28, 2021Mar 29, 2020
Goodwill and intangible asset impairment charge$— $175,189 
As a result of the decrease in demand for our services primarily due to the economic impact caused by COVID-19, we lowered our future expectations, which was the primary trigger of an impairment of our goodwill and acquired client relationships intangible assets recorded in the thirteen weeks ended March 29, 2020. As a result of our interim impairment test in the first quarter of 2020, we concluded that the carrying amounts of goodwill for PeopleScout RPO, PeopleScout MSP and PeopleManagement On-Site reporting units exceeded their implied fair values and we recorded a non-cash impairment loss of $140.5 million. The total goodwill carrying value of $45.9 million for PeopleManagement On-Site reporting unit was fully impaired. The goodwill impairment charge for PeopleScout RPO and PeopleScout MSP was $92.2 million and $2.4 million, respectively. The impairment to our acquired client relationships intangible assets for our PeopleScout RPO and PeopleManagement On-Site reporting units was $34.7 million.
Income taxes
The income tax expense and the effective income tax rate were as follows:
Thirteen weeks ended
(in thousands, except percentages)Mar 28, 2021Mar 29, 2020
Income tax benefit$(112)$(24,748)
Effective income tax rate(1.7)%14.1 %
Our tax provision and our effective tax rate are subject to variation due to several factors, including variability in accurately predicting our full year pre-tax income and loss by jurisdiction, tax credits, government audit developments, changes in laws, regulations and administrative practices, and relative changes of expenses or losses for which tax benefits are not recognized.
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Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income and loss. For example, the impact of discrete items, tax credits and non-deductible expenses on our effective tax rate is greater when our pre-tax income or loss is lower.
The items creating a difference between income taxes computed at the statutory federal income tax rate and income taxes reported on the Consolidated Statements of Operations and Comprehensive Income (Loss) are as follows:
Thirteen weeks ended
(in thousands, except percentages)Mar 28, 2021%Mar 29, 2020%
Income (loss) before tax expense (benefit)$6,786 $(175,242)
Federal income tax expense (benefit) at statutory rate$1,425 21.0%$(36,801)21.0%
Increase (decrease) resulting from:
State income taxes, net of federal benefit288 4.2(6,776)3.9
Non-deductible goodwill impairment charge— 21,849 (12.5)
CARES Act impact136 2.0(2,108)1.2
WOTC and other tax credits, net(2,737)(40.3)(79)
Non-deductible and non-taxable items133 2.0— 
Stock-based compensation shortfall291 4.3765 (0.4)
Foreign taxes and other, net352 5.1(1,598)0.9
Income tax benefit$(112)(1.7)%$(24,748)14.1%
Significant fluctuations in our effective rate for the thirteen weeks ended March 28, 2021 are primarily due to WOTC hiring credits. Other differences between the statutory federal income tax rate result from state and foreign income taxes, certain non-deductible and non-taxable items, and tax effects of stock-based compensation. The tax benefit of $24.7 million for the thirteen weeks ended March 29, 2020 was primarily the result of a non-deductible goodwill and intangible asset impairment charge.
WOTC is designed to encourage employers to hire workers from certain targeted groups with higher than average unemployment rates. WOTC is generally calculated as a percentage of wages over a twelve-month period up to worker maximums by targeted groups. Based on historical results and business trends, we estimate the amount of WOTC we expect to earn related to wages of the current year. However, the estimate is subject to variation because 1) a small percentage of our workers qualify for one or more of the many targeted groups; 2) the targeted groups are subject to different incentive credit rates and limitations; 3) credits fluctuate depending on economic conditions and qualified worker retention periods; and 4) state and federal offices can delay their credit certification processing and have inconsistent certification rates. We recognize an adjustment to prior year hiring credits if credits certified by government offices differ from original estimates. WOTC has been approved through the end of 2025.
Segment performance
We evaluate performance based on segment revenue and segment profit. Segment profit includes revenue, related cost of services, and ongoing operating expenses directly attributable to the reportable segment. Segment profit excludes goodwill and intangible impairment charges, depreciation and amortization expense, unallocated corporate general and administrative expense, interest, other income and expense, income taxes, and other adjustments not considered to be ongoing. See Note 10: Segment Information, to our consolidated financial statements found in Item 1 of this Quarterly Report on Form 10-Q, for additional details on our reportable segments, as well as a reconciliation of segment profit to income (loss) before tax expense (benefit).
Segment profit should not be considered a measure of financial performance in isolation nor as an alternative to net income (loss) in the Consolidated Statements of Operations and Comprehensive Income (Loss) in accordance with accounting principles generally accepted in the United States of America, and may not be comparable to similarly titled measures of other companies.
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PeopleReady segment performance was as follows:
Thirteen weeks ended
(in thousands, except percentages)Mar 28, 2021Mar 29, 2020
Revenue from services$260,392 $299,294 
Segment profit11,860 7,655 
Percentage of revenue4.6 %2.6 %
PeopleReady segment profit grew $4.2 million for the thirteen weeks ended March 28, 2021, compared to the same period in the prior year. The growth was primarily due to cost reductions outpacing revenue declines. Revenue declines were primarily due to less demand from existing clients resulting from economic disruption caused by COVID-19 and pressure on our fill rates from stimulus benefits available to associates.
We believe our segment profit benefited by the strategic use of our industry-leading JobStack mobile app that digitally connects workers with jobs. JobStack is helping us safely connect people with work.
PeopleManagement segment performance was as follows:
Thirteen weeks ended
(in thousands, except percentages)Mar 28, 2021Mar 29, 2020
Revenue from services$