TrueBlue, Inc.

Previous wording

TrueBlue, Inc. (the “company,” “TrueBlue,” “we,” “us” and “our”) is a leading provider of digitally-enabled, specialized workforce solutions that connect employers and talent with precision and scale. Backed by decades of experience, a national footprint, an expansive talent network, deep local market insight, and global RPO reach, TrueBlue delivers total workforce solutions across the world's largest staffing markets. Client demand for contingent workforce solutions and outsourced recruiting services is cyclical and dependent on the overall strength of the economy and labor market, as well as trends in workforce flexibility. During periods of rising economic uncertainty, clients reduce their contingent labor in response to lower volumes and reduced appetite for expanding production or inventory, which reduces the demand for our services. That environment also reduces demand for permanent placement recruiting, whether outsourced or in-house. However, as the economy emerges from periods of uncertainty, contingent labor providers are uniquely positioned to respond quickly to increasing demand for labor and rapidly fill new or temporary positions, replace absent employees, and convert fixed labor costs to variable costs. Similarly, companies turn to hybrid or fully outsourced recruiting models during periods of rapid re-hiring and high employee turnover. Our business strategy is focused on accelerating growth to capture market share, while enhancing our long-term profitability. Key elements of this strategy include accelerating our digital transformation across the enterprise; strategically expanding our presence in high-growth, under-penetrated end markets as well as high-skill, high-value talent segments; optimizing our sales function to accelerate growth and capture market demand; and maintaining operational excellence to deliver efficiencies and enhance long-term profitability.

Current wording

TrueBlue, Inc. (the “company,” “TrueBlue,” “we,” “us” and “our”) is a leading provider of digitally-enabled, specialized workforce solutions that connect employers and talent with precision and scale. Backed by decades of experience, a national footprint, an expansive talent network, deep local market insight, and global recruitment process outsourcing (“RPO”) reach, TrueBlue delivers total workforce solutions across the world's largest staffing markets. Client demand for contingent workforce solutions and outsourced recruiting services is cyclical and dependent on the overall strength of the economy and labor market, as well as trends in workforce flexibility. During periods of rising economic uncertainty, clients reduce their contingent labor in response to lower volumes and reduced appetite for expanding production or inventory, which reduces the demand for our services. That environment also reduces demand for permanent placement recruiting, whether outsourced or in-house. However, as the economy emerges from periods of uncertainty, contingent labor providers are uniquely positioned to respond quickly to increasing demand for labor and rapidly fill new or temporary positions, replace absent employees, and convert fixed labor costs to variable costs. Similarly, companies turn to hybrid or fully outsourced recruiting models during periods of rapid re-hiring and high employee turnover. Our business strategy is focused on accelerating growth to capture market share, while enhancing our long-term profitability. Key elements of this strategy include accelerating our digital transformation across the enterprise; strategically expanding our presence in high-growth, under-penetrated end markets as well as high-skill, high-value talent segments; optimizing our sales function to accelerate growth and capture market demand; and maintaining operational excellence to deliver efficiencies and enhance long-term profitability.

Previous wording

PeopleReady provides clients with dependable access to qualified associates for their on-demand, contingent general and skilled labor needs to supplement their permanent workforce, across a broad range of industries including construction, transportation, manufacturing, retail, hospitality and energy. Our services range from providing one associate to hundreds, and are generally short-term in nature as they are filling the contingent staffing needs of our clients. PeopleReady connects our clients with individuals looking for work through our network of branches across all 50 states in the United States (“U.S.”) and Puerto Rico. Augmenting our branch network, our mobile app, JobStack®, connects people with on-demand work 24 hours a day, seven days a week. JobStack creates a digital exchange between our associates and clients, and allows our field resources to focus on sales, recruiting, and service delivery efforts. PeopleReady also connects skilled tradespeople with temporary work across a wide range of trades, including carpentry, electrical, plumbing, welding and energy installation positions through our PeopleReady Skilled Trades and RenewableWorks brands. Our primary focus at PeopleReady is the continued development of JobStack app features to enhance the user experience and create operational efficiencies, expansion in attractive end markets, and optimization of our business model to enable a renewed focus on sales growth.

Current wording

PeopleReady provides clients with dependable access to qualified associates for their on-demand, contingent general and skilled labor needs to supplement their permanent workforce, across a broad range of industries including construction, transportation, manufacturing, retail, hospitality and energy. Our services range from providing one associate to hundreds, and are generally short-term in nature as they are filling the contingent staffing needs of our clients. PeopleReady connects our clients with individuals looking for work through our network of branches across all 50 states in the United States (“U.S.”) and Puerto Rico. Augmenting our branch network, our mobile app, JobStack®, connects people with on-demand work 24 hours a day, seven days a week. JobStack creates a digital exchange between our associates and clients, and allows our field resources to focus on sales, recruiting, and service delivery efforts. PeopleReady also connects skilled tradespeople with temporary work across a wide range of trades, including carpentry, electrical, plumbing, welding and energy installation positions through our PeopleReady Skilled Trades and RenewableWorks brands. Our primary focus at PeopleReady is the continued development of JobStack app features to enhance the user experience and create operational efficiencies, expansion in attractive end markets, and optimization of our business model to enable an enhanced focus on sales growth.

Previous wording

PeopleSolutions provides clients with services focusing on professional and specialized talent acquisition, as well as workforce management and compliance, across a wide variety of industries and primarily in the U.S., Canada, the United Kingdom and Australia. PeopleSolutions provides recruitment process outsourcing (“RPO”), healthcare talent acquisition services, managed service provider (“MSP”) solutions, and talent advisory services through our PeopleScout and Healthcare Staffing Professionals (“HSP”) brands. Our RPO solutions are generally multi-year in duration, highly scalable, and provide clients the support they need as their hiring volumes fluctuate. Our proprietary technology platform (Affinix®) uses artificial intelligence to rapidly source a qualified talent pool within minutes, and further engages candidates through a seamless digital experience. Our healthcare talent acquisition services include long-term staffing and permanent hiring solutions, primarily focused on serving governmental agencies and educational institutions. Our MSP business manages our clients’ contingent labor programs, including vendor selection, performance management, payrolling, compliance monitoring and risk management. Our primary focus at PeopleSolutions is leveraging our strong brand reputations, deep expertise, tailored solutions, expansive footprint and proprietary technology to continue gaining market share in high-growth and under-penetrated end-markets, and expanding in higher-skilled placements.

Current wording

PeopleSolutions provides clients with services focusing on professional and specialized talent acquisition, as well as workforce management and compliance, across a wide variety of industries and primarily in the U.S., Canada, the United Kingdom and Australia. PeopleSolutions provides RPO, healthcare talent acquisition services, managed service provider (“MSP”) solutions, and talent advisory services through our PeopleScout and Healthcare Staffing Professionals (“HSP”) brands. Our RPO solutions are generally multi-year in duration, highly scalable, and provide clients the support they need as their hiring volumes fluctuate. Our proprietary technology platform (Affinix®) uses artificial intelligence to rapidly source a qualified talent pool within minutes, and further engages candidates through a seamless digital experience. Our healthcare talent acquisition services include long-term staffing and permanent hiring solutions, primarily focused on serving governmental agencies and educational institutions. Our MSP business manages our clients’ contingent labor programs, including vendor selection, performance management, payrolling, compliance monitoring and risk management. Our primary focus at PeopleSolutions is leveraging our strong brand reputations, deep expertise, tailored solutions, expansive footprint and proprietary technology to continue gaining market share in high-growth and under-penetrated end-markets, and expanding in higher-skilled placements.

Previous wording

Fiscal second quarter of 2025 summary

Current wording

Fiscal third quarter of 2025 summary

Previous wording

Total company gross profit as a percentage of revenue declined to 23.6% for the thirteen weeks ended June 29, 2025, compared to 26.4% for the same period in the prior year. The decline was primarily due to changes in revenue mix toward our lower margin staffing businesses.

Current wording

Total company gross profit as a percentage of revenue declined to 22.7% for the thirteen weeks ended September 28, 2025, compared to 26.2% for the same period in the prior year. The decline was primarily due to changes in revenue mix toward our lower margin staffing businesses, as well as less favorability in prior year workers’ compensation reserve adjustments.

Previous wording

Total company selling, general and administrative (“SG&A”) expense improved 7.4% to $89.8 million for the thirteen weeks ended June 29, 2025, compared to the same period in the prior year. SG&A expense improved as a result of operational cost management actions taken in response to the decline in demand for our services.

Current wording

Total company selling, general and administrative (“SG&A”) expense improved 8.2% to $91.7 million for the thirteen weeks ended September 28, 2025, compared to the same period in the prior year. SG&A expense improved primarily as a result of operational cost management actions, which have simplified our cost structure and improved efficiency.

Previous wording

Income tax expense was $0.1 million for the thirteen weeks ended June 29, 2025, compared to $46.5 million for the same period in the prior year. We continue to maintain a valuation allowance against our U.S. federal, state and certain foreign deferred tax assets initially established in the fiscal second quarter of 2024, resulting in no current period income tax benefit for these jurisdictions.

Current wording

Income tax expense was $0.7 million for the thirteen weeks ended September 28, 2025, compared to $1.3 million for the same period in the prior year. We continue to maintain a valuation allowance against our U.S. federal, state and certain foreign deferred tax assets initially established in the fiscal second quarter of 2024, resulting in no current period income tax benefit for these jurisdictions.

Previous wording

The items above resulted in a net loss of $0.2 million for the thirteen weeks ended June 29, 2025, compared to a net loss of $104.7 million for the same period in the prior year.

Current wording

The items above resulted in a net loss of $1.9 million for the thirteen weeks ended September 28, 2025, compared to a net loss of $7.6 million for the same period in the prior year.

Previous wording

As of June 29, 2025, we had cash and cash equivalents of $21.9 million and outstanding debt of $53.8 million. As of June 29, 2025, $79.0 million was available under the most restrictive covenant of our revolving credit agreement (“Revolving Credit Facility”), for total liquidity of $100.9 million.

Current wording

As of September 28, 2025, we had cash and cash equivalents of $19.9 million and outstanding debt of $68.2 million. As of September 28, 2025, $75.2 million was available under the most restrictive covenant of our revolving credit agreement (“Revolving Credit Facility”), for total liquidity of $95.0 million.

Previous wording

PeopleManagement revenue grew 1.6% to $133.9 million for the thirteen weeks ended June 29, 2025, and grew 1.4% to $269.4 million for the twenty-six weeks ended June 29, 2025, compared to the same periods in the prior year. PeopleManagement revenue grew as a result of strong demand within our commercial driving business. Growth from commercial driving was partially offset by declines within our OnSite business, as clients continue to be cautious to make significant changes to their workforce strategies after taking steps to reduce their dependence on variable labor.

Current wording

PeopleManagement revenue grew 1.5% to $132.9 million for the thirteen weeks ended September 28, 2025, and grew 1.5% to $402.3 million for the thirty-nine weeks ended September 28, 2025, compared to the same periods in the prior year. PeopleManagement revenue grew as a result of strong demand within our commercial driving business. Growth from commercial driving was partially offset by volume declines within our OnSite business. OnSite new business wins during 2025 have significantly outperformed the prior year, positioning the business for future growth.

Previous wording

PeopleSolutions revenue grew 19.7% to $49.2 million for the thirteen weeks ended June 29, 2025, and grew 8.2% to $94.6 million for the twenty-six weeks ended June 29, 2025, compared to the same periods in the prior year. The acquisition of HSP in early 2025 contributed 39.9% and 31.7% of growth for the thirteen and twenty-six weeks ended June 29, 2025, respectively, compared to the same periods in the prior year. Organic revenue declined as labor market conditions have led to uncertainty around our clients future workforce needs, and clients continue to experience less employee turnover while also facing cost pressure. This has resulted in clients reducing hiring volumes, sourcing candidates with internal resources, and initiating hiring freezes to control costs. The decline in organic revenue was impacted by the loss of a large hospitality client in the prior year due to their decision to insource hiring for high-volume roles. Despite these challenges, we are executing our overall strategy of expanding into high-value professional roles and high-growth and under-penetrated end-markets with new business wins.

Current wording

PeopleSolutions revenue grew 27.9% to $47.0 million for the thirteen weeks ended September 28, 2025, and grew 14.1% to $141.6 million for the thirty-nine weeks ended September 28, 2025, compared to the same periods in the prior year. The acquisition of HSP in early 2025 contributed 38.6% and 33.7% of growth for the thirteen and thirty-nine weeks ended September 28, 2025, respectively. Organic revenue declined as labor market conditions have led to uncertainty around our clients’ future workforce needs, and clients continue to experience less employee turnover while also facing cost pressures. This has resulted in clients reducing hiring volumes, sourcing candidates with internal resources, and initiating hiring freezes to control costs. Despite these challenges, we have expanded existing and new client relationships into higher skilled roles and in attractive end markets such as healthcare, engineering, and technology. As clients’ hiring volumes return, the scale of these engagements position us well to for future growth.

Previous wording

Gross profit as a percentage of revenue declined 280 basis points to 23.6% for the thirteen weeks ended June 29, 2025, compared to the same period in the prior year. Changes in revenue mix resulted in a contraction of 250 basis points, driven by revenue shifts toward our lower margin staffing businesses. Additional depreciation of certain software within PeopleSolutions, reported in cost of services, contributed 30 basis points of contraction.

Current wording

Gross profit as a percentage of revenue declined 350 basis points to 22.7% for the thirteen weeks ended September 28, 2025, compared to the same period in the prior year. Changes in revenue mix resulted in a contraction of 190 basis points, driven by revenue shifts toward our lower margin staffing businesses. Higher workers’ compensation costs were driven by less favorable workers’ compensation reserve adjustments, which resulted in 140 basis points of contraction. Additional depreciation of certain software within PeopleSolutions, reported in cost of services, contributed 20 basis points of contraction.

Previous wording

Gross profit as a percentage of revenue declined 200 basis points to 23.5% for the twenty-six weeks ended June 29, 2025, compared to the same period in the prior year. Changes in revenue mix resulted in a contraction of 210 basis points, driven by revenue shifts toward our lower margin staffing businesses. Our staffing businesses contributed an additional 10 basis points of contraction as a result of pricing pressure typical of a low demand environment. Additional depreciation of certain software within PeopleSolutions, reported in cost of services, contributed 30 basis points of contraction. These contractions were partially offset by 50 basis points of expansion from lower workers’ compensation costs driven by favorable development of prior year reserves.

Current wording

Gross profit as a percentage of revenue declined 250 basis points to 23.2% for the thirty-nine weeks ended September 28, 2025, compared to the same period in the prior year. Changes in revenue mix resulted in a contraction of 200 basis points, driven by revenue shifts toward our lower margin staffing businesses. Additional depreciation of certain software within PeopleSolutions, reported in cost of services, contributed 30 basis points of contraction. Higher workers’ compensation costs were driven by less favorable workers’ compensation reserve adjustments, which resulted in an additional 20 basis points of contraction.

Previous wording

Total company SG&A expense improved by $7.2 million, or 7.4% for the thirteen weeks ended June 29, 2025, and improved by $19.5 million, or 9.6% for the twenty-six weeks ended June 29, 2025, compared to the same periods in the prior year. Operational cost management actions executed in response to the decline in demand for our services have resulted in a leaner cost structure, which strategically positions us to drive stronger profitability as industry demand rebounds. The thirteen and twenty-six weeks ended June 29, 2025 included a benefit, net of related fees, of $5.4 million for recognition of certain COVID-19 government subsidies, compared to $6.8 million for the same periods in the prior year.

Current wording

Total company SG&A expense improved by 8.2%, or $8.2 million, for the thirteen weeks ended September 28, 2025, and improved by 9.1%, or $27.8 million, for the thirty-nine weeks ended September 28, 2025, compared to the same periods in the prior year. Operational cost management actions have resulted in a leaner cost structure, which strategically positions us to drive stronger profitability as industry demand rebounds. The thirty-nine weeks ended September 28, 2025 included a benefit, net of related fees, of $5.4 million for recognition of certain COVID-19 government subsidies, compared to $6.8 million for the same period in the prior year.

Previous wording

Depreciation and amortization decreased for the thirteen and twenty-six weeks ended June 29, 2025, compared to the same periods in the prior year, as certain intangible assets were fully amortized during 2024, primarily related to customer relationships. In the current year, depreciation of certain software within PeopleSolutions has been included in cost of services on our Consolidated Statements of Operations and Comprehensive Income (Loss).

Current wording

Depreciation and amortization decreased for the thirteen and thirty-nine weeks ended September 28, 2025, compared to the same periods in the prior year, as certain intangible assets were fully amortized during 2024, primarily related to customer relationships. In the current year, depreciation of certain software within PeopleSolutions has been included in cost of services on our Consolidated Statements of Operations and Comprehensive Income (Loss).

Previous wording

We performed our annual impairment test as of the first day of our fiscal second quarter of 2025. As a result of this impairment test, we concluded that a trademark related to our PeopleManagement segment exceeded its estimated fair value and we recorded a non-cash impairment charge of $0.2 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen and twenty-six weeks ended June 29, 2025. The charge was primarily driven by an increase in the discount rate. The remaining balance for this trademark was $2.5 million as of June 29, 2025. See Note 6: Goodwill and Intangible Assets, to our consolidated financial statements found in Item 1 of this Quarterly Report on Form 10-Q, for additional details.

Current wording

We performed our annual impairment test as of the first day of our fiscal second quarter of 2025. As a result of this impairment test, we concluded that a trademark related to our PeopleManagement segment exceeded its estimated fair value and we recorded a non-cash impairment charge of $0.2 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirty-nine weeks ended September 28, 2025. The charge was primarily driven by an increase in the discount rate. The remaining balance for this trademark was $2.5 million as of September 28, 2025. See Note 6: Goodwill and Intangible Assets, to our consolidated financial statements found in Item 1 of this Quarterly Report on Form 10-Q, for additional details.

Previous wording

For the twenty-six weeks ended June 29, 2025, our income tax expense is related primarily to our foreign operations. We continue to maintain a valuation allowance against our U.S. federal, state and certain foreign deferred tax assets, initially established in the fiscal second quarter of 2024, resulting in no income tax benefit for these jurisdictions. Our conclusions to maintain a valuation allowance were driven by U.S. and foreign pre-tax losses beginning in 2023 and continuing into 2025, combined with the significant non-cash goodwill impairment charge of $59.1 million recorded during the twenty-six weeks ended June 30, 2024.

Current wording

For the thirty-nine weeks ended September 28, 2025, our income tax expense is related primarily to our foreign operations. We continue to maintain a valuation allowance against our U.S. federal, state and certain foreign deferred tax assets, initially established in the fiscal second quarter of 2024, resulting in no income tax benefit for these jurisdictions. Our conclusions to maintain a valuation allowance were driven by U.S. and foreign pre-tax losses beginning in 2023 and continuing into 2025, combined with the significant non-cash goodwill impairment charge of $59.1 million recorded during the thirty-nine weeks ended September 29, 2024.

Previous wording

PeopleReady segment profit (loss) improved $1.1 million and $3.2 million for the thirteen and twenty-six weeks ended June 29, 2025, and also improved as a percentage of revenue, compared to the same periods in the prior year, respectively. Improvement was primarily due to operational cost management actions executed in response to the decline in demand for our services, which have resulted in a more efficient cost structure.

Current wording

PeopleReady segment profit (loss) improved $5.1 million and $8.3 million for the thirteen and thirty-nine weeks ended September 28, 2025, and also improved as a percentage of revenue, compared to the same periods in the prior year, respectively. Improvement was primarily due to operational cost management actions, which have resulted in a more efficient cost structure, as well as growth within our skilled businesses, specifically the energy industry. These were partially offset by higher workers’ compensation costs driven by less favorable workers’ compensation reserve adjustments.

Previous wording

PeopleManagement segment profit grew $0.7 million and $0.8 million for the thirteen and twenty-six weeks ended June 29, 2025, and also improved as a percentage of revenue, compared to the same periods in the prior year, respectively. Growth was primarily driven by higher revenue from the commercial driving business, coupled with a reduction in SG&A expense, which was the result of disciplined cost management actions to streamline our organizational structure and improve efficiency.

Current wording

PeopleManagement segment profit grew $1.3 million and $2.1 million for the thirteen and thirty-nine weeks ended September 28, 2025, and also improved as a percentage of revenue, compared to the same periods in the prior year, respectively. Growth was primarily driven by higher revenue from our commercial driving business, coupled with a reduction in SG&A expense, which was the result of disciplined cost management actions to streamline our organizational structure and improve efficiency.

Previous wording

PeopleSolutions segment profit declined $0.9 million and $3.8 million for the thirteen and twenty-six weeks ended June 29, 2025, and also declined as a percentage of revenue, compared to the same periods in the prior year, respectively. These declines were a result of the decline in revenue, including the loss of a large hospitality client in the prior year due to their decision to insource hiring for high-volume roles, the effects of which were softened by our cost management actions and inorganic growth from the acquisition of HSP.

Current wording

PeopleSolutions segment profit declined $2.2 million for the thirty-nine weeks ended September 28, 2025, and also declined as a percentage of revenue, compared to the same period in the prior year. This decline was a result of the decline in revenue, including the loss of a large hospitality client in the prior year due to their decision to insource hiring for high-volume roles, the effects of which were softened by our cost management actions and inorganic growth from the acquisition of HSP.

Previous wording

•We expect revenue growth for the fiscal third quarter of 2025 to be between 5% and 11% as compared to the same period in the prior year. This range assumes current market conditions continue, and includes approximately 4% inorganic growth from the acquisition of HSP.

Current wording

•We expect revenue growth for the fiscal fourth quarter of 2025 to be between 4% and 10% as compared to the same period in the prior year. This range assumes current market conditions continue, and includes approximately 4% inorganic growth from the acquisition of HSP.

Previous wording

•We anticipate gross profit as a percentage of revenue to decline between 280 and 240 basis points for the fiscal third quarter of 2025, compared to the same period in the prior year, due to prior year workers’ compensation reserve adjustment benefits not expected to repeat at the same level in the current year, as well as changes in business mix.

Current wording

•We anticipate gross profit as a percentage of revenue to decline between 410 and 370 basis points for the fiscal fourth quarter of 2025, compared to the same period in the prior year, due to prior year workers’ compensation reserve adjustments not expected to repeat at the same level in the current year, as well as changes in business mix.

Previous wording

•For the fiscal third quarter of 2025, we anticipate SG&A expense to be between $93 million and $97 million, representing a decline compared to the same period in the prior year due to our cost management efforts.

Current wording

•For the fiscal fourth quarter of 2025, we anticipate SG&A expense to be between $91 million and $95 million, representing a decline compared to the same period in the prior year due to our cost management efforts. This estimate does not include the impact of an expected material impairment of the Chicago support center asset group, as described in Note 14: Subsequent Event, to our consolidated financial statements found in Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

•We expect basic weighted average shares outstanding to be approximately 30 million for the fiscal third quarter of 2025. This expectation does not include the impact of potential share repurchases.

Current wording

•We expect basic weighted average shares outstanding to be approximately 30 million for the fiscal fourth quarter of 2025. This expectation does not include the impact of potential share repurchases.

Previous wording

•Due to the valuation allowance against our U.S. federal, state and certain foreign deferred tax assets, we expect minimal income tax expense for the fiscal third quarter of 2025.

Current wording

•Due to the valuation allowance against our U.S. federal, state and certain foreign deferred tax assets, we expect minimal income tax expense for the fiscal fourth quarter of 2025.

Previous wording

•We expect capital expenditures and spending for software as a service assets to be between $17 million and $21 million for fiscal 2025. Approximately $3 million relates to spending for software as a service assets.

Current wording

•We expect capital expenditures and spending for software as a service assets to be between $17 million and $19 million for fiscal 2025. Approximately $2 million relates to spending for software as a service assets.

Previous wording

We believe we have a strong financial position and sufficient sources of funding to meet our short- and long-term obligations. As of June 29, 2025, we had $21.9 million in cash and cash equivalents and $53.8 million debt outstanding. Under the Revolving Credit Facility, $2.7 million was utilized by outstanding standby letters of credit, leaving $198.5 million unused, of which $79.0 million is available for additional borrowing after considering our most restrictive covenant. We have an option to increase the total line of credit amount under the Revolving Credit Facility from $255.0 million to $405.0 million, subject to lender approval.

Current wording

We believe we have a strong financial position and sufficient sources of funding to meet our short- and long-term obligations. As of September 28, 2025, we had $19.9 million in cash and cash equivalents and $68.2 million debt outstanding. Under the Revolving Credit Facility, $7.8 million was utilized by outstanding standby letters of credit, leaving $179.0 million unused, of which $75.2 million is available for additional borrowing after considering our most restrictive covenant. We have an option to increase the total line of credit amount under the Revolving Credit Facility from $255.0 million to $405.0 million, subject to lender approval.

Previous wording

Total collateral commitments decreased $25.6 million during the twenty-six-week period ended June 29, 2025, primarily due to a decrease in collateral levels required by our insurance carriers, as well as the use of collateral to satisfy workers’ compensation claims. See Note 9: Commitments and Contingencies, to our consolidated financial statements found in Item 1 of this Quarterly Report on Form 10-Q, for additional details on our workers’ compensation commitments. We continue to actively manage workers’ compensation cost by focusing on improving our associate safety programs, and actively control costs with our network of service providers. These actions have had a positive impact creating favorable adjustments to workers’ compensation liabilities recorded in the prior periods. Continued favorable adjustments to our prior year workers’ compensation liabilities are dependent on our ability to continue to aggressively lower accident rates and costs of our claims. Due to our progress in worker safety improvements and the resulting reduction in the frequency and severity of accident rates, we expect diminishing favorable adjustments to our workers' compensation liabilities going forward.

Current wording

Total collateral commitments decreased $32.2 million during the thirty-nine-week period ended September 28, 2025, primarily due to a decrease in collateral levels required by our insurance carriers, as well as the use of collateral to satisfy workers’ compensation claims. See Note 9: Commitments and Contingencies, to our consolidated financial statements found in Item 1 of this Quarterly Report on Form 10-Q, for additional details on our workers’ compensation commitments. We continue to actively manage workers’ compensation cost by focusing on improving our associate safety programs, and actively control costs with our network of service providers. These actions have had a positive impact creating favorable adjustments to workers’ compensation liabilities recorded in prior periods. Continued favorable adjustments to our prior year workers’ compensation liabilities are dependent on our ability to continue to aggressively lower accident rates and costs of our claims. Due to our progress in worker safety improvements and the resulting reduction in the frequency and severity of accident rates, we expect diminishing favorable adjustments to our workers' compensation liabilities going forward.

Previous wording

As client demand declines, the result is a deleveraging of accounts receivable and accounts payable. Accrued wages and benefits can fluctuate based on whether the period end requires the accrual of one or two weeks of payroll, the amount and timing of bonus payments, and timing of payroll tax payments.

Current wording

As client demand improves, the result is generally an increase in accounts receivable and accounts payable. Accrued wages and benefits can fluctuate based on whether the period end requires the accrual of one or two weeks of payroll, the amount and timing of bonus payments, and timing of payroll tax payments.

Previous wording

Net cash provided by accounts receivable collections through deleveraging during the twenty-six weeks ended June 29, 2025 was partially offset by an increase in days sales outstanding of approximately one day compared to the fiscal fourth quarter of 2024, primarily due to a higher percentage of receivables with longer payment terms. Net cash used for payments on accounts payable and accrued expenses was primarily related to timing of payments to vendors as well as a decrease in certain accrued expenses that fluctuate with revenue. In addition, our workers’ compensation claims reserve for estimated claims decreases as demand for contingent labor services decreases, and as a result of favorable adjustments to prior year reserves, both of which were the case in the current period.

Current wording

Net cash used by accounts receivable during the thirty-nine weeks ended September 28, 2025 was primarily due to increased revenue across the businesses, as well as an increase in days sales outstanding of approximately two days compared to the fiscal fourth quarter of 2024, primarily due to a higher percentage of receivables with longer payment terms. Net cash used for payments on accounts payable and accrued expenses during the thirty-nine weeks ended September 28, 2025 was primarily related to timing of payments to vendors. In addition, our workers’ compensation claims reserve for estimated claims decreases as claims are paid, and as a result of favorable adjustments of prior year reserves, both of which were the case in the current period.

Previous wording

The primary use of cash for investing activities during the twenty-six weeks ended June 29, 2025 was the acquisition of HSP. Capital expenditures also included continued investments to upgrade our PeopleReady on-demand technology platform. Cash used was partially offset by cash provided by maturities of restricted investments to pay workers’ compensation claims.

Current wording

The primary use of cash for investing activities during the thirty-nine weeks ended September 28, 2025 was the acquisition of HSP. Capital expenditures included continued investments to upgrade our PeopleReady on-demand technology platform. Cash used was partially offset by cash provided by maturities of restricted investments, which were not reinvested due to lower workers’ compensation collateral requirements.

Previous wording

Net cash provided by financing activities during the twenty-six weeks ended June 29, 2025 was due to draws on our Revolving Credit Facility, primarily to fund the acquisition of HSP and finance working capital needs. While we have not executed share repurchases during the twenty-six weeks ended June 29, 2025, $33.5 million remains available for repurchase under existing authorizations as of June 29, 2025. We are limited to $25.0 million in aggregate share repurchases in any twelve-month period by our financial covenants.

Current wording

Net cash provided by financing activities during the thirty-nine weeks ended September 28, 2025 was due to draws on our Revolving Credit Facility, primarily to fund the acquisition of HSP and to finance working capital needs as revenue increased. While we have not executed share repurchases during the thirty-nine weeks ended September 28, 2025, $33.5 million remains available for repurchase under existing authorizations as of September 28, 2025. We are limited to $25.0 million in aggregate share repurchases in any twelve-month period by our financial covenants.

Previous wording

Our critical accounting estimates are discussed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations; Summary of Critical Accounting Estimates” in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024. The following has been updated to reflect changes made during the twenty-six weeks ended June 29, 2025.

Current wording

Our critical accounting estimates are discussed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations; Summary of Critical Accounting Estimates” in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024. The following has been updated to reflect changes made during the thirty-nine weeks ended September 28, 2025.

Previous wording

•Centerline Drivers (“Centerline”) has a mix of client sizes, many with low dollar weekly invoices, but other clients that are invoiced on a consolidated basis, resulting in a high concentration of revenue related to its top 10 clients. Payment terms are slightly longer than PeopleReady.

Current wording

•Centerline Drivers (“Centerline”) has a mix of client sizes, many with low dollar weekly invoices, but others that are invoiced on a consolidated basis, resulting in a high concentration of revenue related to its top 10 clients. Payment terms are slightly longer than PeopleReady.

Previous wording

•Our PeopleScout and Healthcare Staffing Professionals (“HSP”) brands have a smaller number of clients in a variety of industries, and are generally invoiced monthly on a consolidated basis. Invoice amounts are generally higher for these brands than our other businesses, with longer payment terms than PeopleReady and Centerline. These businesses also have significant balances due from governmental entities.

Current wording

•Our PeopleScout and Healthcare Staffing Professionals (“HSP”) brands have a smaller number of clients in a variety of industries, and are generally invoiced monthly on a consolidated basis. Invoice amounts are generally higher for these brands than our other businesses, with longer payment terms than PeopleReady and Centerline. These businesses also have significant balances due from government entities.

Previous wording

Based on the results of our annual impairment test, all of our reporting units’ fair values were substantially in excess of their respective carrying values, except for HSP, for which the estimated fair value was in excess of its carrying value by approximately 5%. This level of headroom is expected, due to the short amount of time that has passed between the acquisition date, when the carrying value of the reporting unit approximated its fair value, and our annual impairment test as of the first day of our fiscal second quarter of 2025. A discount rate of 15.5% was used in calculating the fair value of the HSP reporting unit. In the event either the discount rate increases, forecasted revenue growth declines, or gross profit as a percentage of revenue declines by less than 1 percentage point, the carrying value of the reporting unit would exceed its fair value. Any significant adverse change in our near- or long-term projections or macroeconomic conditions could result in future impairment charges. The goodwill balance for HSP as of June 29, 2025 was $17.5 million. We will continue to closely monitor the operational performance of this reporting unit.

Current wording

Based on the results of our annual impairment test, all of our reporting units’ fair values were substantially in excess of their respective carrying values, except for HSP, for which the estimated fair value was in excess of its carrying value by approximately 5%. This level of headroom is expected, due to the short amount of time that has passed between the acquisition date, when the carrying value of the reporting unit approximated its fair value, and our annual impairment test as of the first day of our fiscal second quarter of 2025. A discount rate of 15.5% was used in calculating the fair value of the HSP reporting unit. In the event either the discount rate increases, forecasted revenue growth declines, or gross profit as a percentage of revenue declines by less than 1 percentage point, the carrying value of the reporting unit would exceed its fair value. Any significant adverse change in our near- or long-term projections or macroeconomic conditions could result in future impairment charges. The goodwill balance for HSP as of September 28, 2025 was $17.3 million. We will continue to closely monitor the operational performance of this reporting unit.

Previous wording

As a result of our annual impairment test as of the first day of our fiscal second quarter of 2025, we concluded that a trademark related to the PeopleManagement segment exceeded its estimated fair value and we recorded a non-cash impairment charge of $0.2 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the twenty-six weeks ended June 29, 2025. The charge was primarily driven by an increase in the discount rate of 1.0% since our last impairment test. The remaining balance for this trademark was $2.5 million as of June 29, 2025. As of our impairment testing date, the fair value of the trademark related to the PeopleSolutions segment was in excess of its carrying amount of $2.1 million, and therefore did not result in an impairment.

Current wording

As a result of our annual impairment test as of the first day of our fiscal second quarter of 2025, we concluded that a trademark related to the PeopleManagement segment exceeded its estimated fair value and we recorded a non-cash impairment charge of $0.2 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirty-nine weeks ended September 28, 2025. The charge was primarily driven by an increase in the discount rate of 1.0% since our last impairment test. The remaining balance for this trademark was $2.5 million as of September 28, 2025. As of our impairment testing date, the fair value of the trademark related to the PeopleSolutions segment was in excess of its carrying amount of $2.1 million, and therefore did not result in an impairment.