Welcome to TrueBlue Q4 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Derrek Gafford, Chief Financial Officer. Thank you. You may begin. Good afternoon, everyone, and thank you for joining today's call. I'm joined by our Chief Executive Officer, Steve Cooper, and our President and Chief Operating Officer, Taryn Owen. Before we begin, I want to remind everyone that today's call and slide presentation contain forward-looking statements, all of which are subject to risks and uncertainties, and we assume no obligation to update or revise any forward-looking statements. These risks and uncertainties, some of which are described in today's press release and in our SEC filings, could cause actual results to differ materially from those in our forward-looking statements. We use non-GAAP measures when presenting our financial results. We encourage you to review the non-GAAP reconciliations in today's earnings release or at trueblue.com under the Investor Relations section for a complete understanding of these terms and their purpose. Any comparisons made today are based on a comparison to the same period in the prior, unless otherwise stated. Lastly, we will be providing a copy of our prepared remarks on our website at the conclusion of today's call, and a full transcript and audio replay will also be available soon after the call. Okay, now let's turn the call over to Steve. Thank you, Derrek, and welcome everyone to today's call. First, I want to welcome Taryn Owen to the call. Taryn joined PeopleScout in 2010 and has served as President of PeopleScout since 2012. Taryn has also served as President of PeopleReady since 2019. In 2022, Taryn became President and Chief Operating Officer of TrueBlue. In this new role, Taryn is responsible for all operating brands, along with our people and technology strategies. We plan to have Taryn join us going forward to offer additional insight into our operational performance, along with our people and technology strategies. Before discussing our fourth results, I'm going to take a moment to reflect on 2022. The year was marked by one of change, not only at TrueBlue, but also within the business environment. Since returning as CEO in June, what has been clear is the strength of our people, who possess an unwavering commitment to serve our clients and the people we put to work. We started the year, demand for our services was high as clients needed supplemental labor to support growth. The year progressed, the impact of inflation, combined with higher interest rates, fueled economic uncertainty, leaving certain buyers to take a wait and see approach to hiring. However, the labor market has remained historically tight, with over 10 million job openings across the United States, many of which are for blue-collar positions in which we specialize. Despite the economy slowing in 2022, I'm pleased with our performance over the past 12 months, with revenue growth of 4% and operating income growth of 5%. Moving on to results for the quarter. Total revenue was $558 million, down 10% compared to Q4 2021. Results across the business segments were mixed. We saw steady underlying revenue trends at PeopleReady and at PeopleManagement in Q4. At PeopleScout, we started to see the need for permanent staff at our clients begin to slow. While operating income and margin were lower due to decline in revenue, we maintained pricing discipline at our staffing segments and remained focused on costs across the company. Turning to the segments. PeopleReady is our largest segment. It represents 57% of total trailing twelve-month revenue and 59% of total segment profit. PeopleReady is a leading provider of on-demand labor and skilled trades in the North American industrial staffing market. We service our clients via a national footprint of physical branch locations, along with consolidated service centers, both supported by our JobStack mobile app. Revenue for the quarter was down 13%. If you recall, in the Q4 of 2021, PeopleReady benefited from a demand surge across the business as our customers found themselves in desperate need for labor during the peak of a post-COVID recovery, creating a year-over-year headwind this year. Setting this factor aside, our sequential revenue trends remain consistent with typical historical patterns. PeopleScout is our highest margin segment, representing 14% of total trailing twelve-month revenue and 30% of total segment profit. PeopleScout is a global leader in filling permanent positions through our recruitment process outsourcing services. PeopleScout revenue declined 16% in Q4 this year. Changes in demand for RPO services typically lag our traditional staffing business, and we're seeing this dynamic play out today, which is being compounded by more normalized hiring volumes. People Management represents 29% of total trailing twelve-month revenue and 11% of total segment profit. People Management provides on-site industrial staffing and commercial driver services in North America. The essence of a typical People Management engagement is supplying an outsourced workforce that involves multi-year, multi-million dollar on-site and driver relationships. Revenue is down 2% in Q4, with monthly revenue trends holding steady throughout the quarter. I'm gonna spend the next few minutes talking about our strategies, and will then pass things over to Taryn to talk about a couple of our operating priorities for 2023. Our strategy at PeopleReady is to digitize the business model to gain market share and improve efficiency. The United States temporary day labor market is highly fragmented, with the bulk of the market made up of smaller companies in the industrial staffing segment where PeopleReady operates. These smaller, more regional companies not only lack an expansive branch network, but also are typically unable to invest in digital applications like JobStack. With over 90% associate adoption and 30,000+ client users, JobStack provides a frictionless user experience for associates and clients and has driven operational efficiencies. The technology and the brick-and-mortar combination makes us a one-stop shop for national and local accounts, and is what makes us a leading provider within the on-demand industrial staffing market. We believe the market for general labor has the best opportunity for digitalization as it is less complex than other types of staffing. By further investing in JobStack, we will be able to increase our traction and improve our appeal with clients and associates. At PeopleScout, our aim is to capitalize on a strong brand reputation and ability to hire in high volumes to gain market share within the RPO industry. It has consistently produced double-digit annual revenue growth in favorable economic conditions. In 2022, PeopleScout achieved record revenue as companies sought our expertise to find talent in tight labor markets. A big reason for the success was Affinix, our recruiting platform, which has allowed us to place better talent faster. As we move forward, we plan to further diversify our hiring mix and target high growth sectors such as life sciences and technology. Our positive track record penetrating healthcare, depth of experience, and Affinix make this possible. PeopleManagement strategies to supplement our traditional on-site staffing services with higher margin product offerings like on-site workflow solutions and commercial trucking, expand geographically within the United States to increase market share. I'd like to turn the call over to Taryn, who will discuss specifics on some key priorities as we enter 2023. Thank you, Steve. I'm pleased to be here today to provide some insight on key priorities that are underpinning our strategy. Before I get into the details, I want to share some bigger picture perspective on how we are approaching our priorities. As Steve mentioned, we have been on a multi-year journey to digitalitize our business. This strategy is based on worker expectations for fast and frictionless access to jobs and client requirements for efficient access to talent and to recruiting and staffing platforms that offer a superior candidate experience. At the same time, we are a people business, and our relationships with our clients, candidates, and associates remain essential. Our field team members, salespeople, and recruiters all play a vital role in building those relationships, and we are working hard to ensure that our teams have the tools and resources they need to succeed. By striking the right balance between relationship-driven service and technology enablement, we will remain well-positioned to help our clients access the talent they need through our on-demand and outsourced solutions. It should come as no surprise for 2023 that our people and technology will remain the primary focus for TrueBlue. We are a people business, so ensuring that we have an engaged and high-performing team is a top priority. In order to attract and retain talent, we continue to build and enhance programs designed to enrich our employee experience and to emphasize learning and development. We are also making focused investments in new positions to maintain sustainable staffing levels and strengthen our ability to deliver the services our customers expect. We are augmenting learning paths and development planning across the business. For instance, an important focus in 2023 will be ensuring our sales training is scalable and repeatable in all sales roles throughout the organization. With this training, we emphasize effective client interactions and win angles, as well as a thoughtful approach to driving repeat business and customer reactivation. Coupled with training and development are targeted investments in field-based positions to provide greater geographic and vertical coverage. At PeopleReady, we are placing account managers in new markets to capitalize on staffing demands in skilled trades. We are also providing our branch managers with expanded sales training and increasing their capacity to sell our services. At PeopleManagement, we will continue to target market expansions to respond to ongoing demands for drivers. Finally, at PeopleScout, we are augmenting our sales team to enable greater specialization in the healthcare vertical. These investments are directed towards increasing sales activity and enabling operational excellence. This will enable us to capture top-line growth in the short term and will ensure that we are well positioned to expand market share when our customers return to growth. Now shifting to technology. It is imperative we continue to invest in platforms to better service our clients, attract workers, and support our people. Through our PeopleReady JobStack application and PeopleScout Affinix recruiting platforms, we have brought differentiated experiences to those we serve. With JobStack, we are focused on improving the associate experience in the near term. We are making upgrades to the application, which will allow associates to register faster and reduce the time it takes to get them to work. We are improving the ease of time entry so our associates can be paid more quickly. Finally, we will be introducing conditional dispatches. This functionality allows associates to accept a job prior to fulfilling all requirements, such as documentation of a specific certification, and to subsequently be dispatched once they have met the requirement. These product enhancements are aimed at improving the quality and quantity of supply. They position us to improve associate retention and increase our client fill rates, both of which will lead to higher customer satisfaction and ultimately more wallet share. Affinix is our PeopleScout recruiting platform designed to meet candidate expectations for a seamless experience. Affinix combines many facets of the recruiting process, including recruitment marketing, applicant tracking, candidate relationship management, and interviewing to quickly bring a highly qualified talent pool to our clients. Affinix has been instrumental in securing new client wins, renewals, and expansions. As we look forward, the relevance of Affinix will continue to increase as clients further prioritize the candidate's experience, providing us with a catalyst for future growth. I look forward to providing an update on the progress we make on both fronts on future calls. I'll now pass the call over to Derrek, who will share further details around our financial results. Thank you, Taryn. Total revenue for Q4 2022 was $558 million, a decrease of 10% compared to Q4 last year. As Steve mentioned, PeopleReady benefited from a demand surge in the prior year period as the peak of the post-COVID recovery left our customers in desperate need for labor. As expected, the surge did not repeat this year, contributing 6 percentage points of total revenue decline year-over-year. The remaining four-point decline reflects the company's underlying revenue trend, a decrease from our Q3 2022 total revenue results, which were flat. In the Q4, our PeopleScout business experienced lower volume from existing clients, and to a lesser extent, so did our PeopleManagement business. As you might recall, our PeopleReady business was the 1st business unit to see a meaningful reduction in demand earlier this year. PeopleReady is typically where we first see an impact from macroeconomic conditions, given the short duration and supplemental nature of the job assignments. We were pleased to see stable weekly sequential revenue trends for PeopleReady during the Q4 that were in line with typical historical patterns, which have continued into January. Net income declined 65% and adjusted EBITDA declined 42%, while net income and adjusted EBITDA margins declined 190 and 200 basis points, respectively. The decline in profitability was primarily driven by the revenue decline, operational deleveraging associated with the revenue decline, and changes to business mix, given the larger drop in revenue within our PeopleScout and PeopleReady businesses, which carry a higher margin than our PeopleManagement business. Adjusted EBITDA margin contracted less than net income margin due to certain PeopleReady technology costs, which were excluded from our adjusted results. Gross margin for Q4 2022 of 26.5% was down 30 basis points. As mentioned earlier, a change in business mix had a contracting impact on gross margin, which was partially offset by lower workers' compensation expense and a positive bill pay spread. The better workers' compensation results are from a combination of favorable development on prior year reserves and fewer workplace injuries this year. The positive bill pay spread results are due to disciplined pricing efforts in our PeopleReady business. SG&A decreased $4 million or 3% compared to Q4 last year as we remained focused on cost management. SG&A increased as a percentage of revenue due to operational deleveraging associated with the revenue decline. Our effective income tax rate was a benefit of 1% due to hiring tax credits exceeding the income tax expense associated with our pre-tax income. Now, let's turn to the specific results of our segments. PeopleReady revenue decreased 13%, while segment profit decreased 18%, and segment profit margin was down 50 basis points. As we've mentioned, PeopleReady benefited from a demand surge in the prior year period, which accounted for 11 points of the year-over-year decline. The remaining decline of two points. Reflects PeopleReady's underlying revenue trend for the quarter, which was roughly in line with the total revenue decline for this business unit in Q3 2022. The drop in segment profit and related margin came from the revenue decline and operational de-leveraging, which were partially offset by lower workers' compensation expense and favorable bill pay spreads. Pay rate inflation in the PeopleReady business has moderated during the back of 2022. Bill pay spreads have continued to be robust. Bill rates grew 8.4%, while pay rates grew 6.4%, resulting in a positive spread of 200 basis points. PeopleScout revenue decreased 16%, while segment profit decreased 78%, and segment profit margin was down 10 percentage points. During the quarter, we saw RPO business volumes at some clients revert back to pre-COVID levels, while others reduced hiring as a result of the macroeconomic environment. In addition, we made a revenue reserve adjustment which dropped straight to the bottom line. Segment profit and related margin were down due to the revenue decline, revenue reserve adjustments and operational de-leveraging. PeopleManagement revenue decreased 2%, while segment profit decreased 8%, and segment profit margin was down 10 basis points. Monthly revenue trends were steady during the quarter, performing in line with historical patterns. The decline in segment profit and related margin was mainly due to the decrease in revenue. Let's turn to the balance sheet and cash flows. We finished the year with $72 million in cash and no outstanding debt. The business is producing strong cash flow, with full year cash flow from operations totaling $121 million. We returned $61 million of capital through share repurchases during the year, leaving $89 million authorized. I'd like to take a moment to provide additional color on some forward-looking items. We expect a revenue decline of 18%-13% in Q1 2023. Similar to Q4 of 2022, Q1 of 2023 is also facing a demand surge of 7% in the prior period comparison, which translates into an underlying revenue decline of 8% based on the midpoint of our Q1 2023 outlook. The Q1 2023 underlying revenue decline is expected to be a bit larger than it was in Q4 2022. This is primarily due to an expectation of less year-over-year growth in our green energy business in Q1 2023, associated with an inherent lumpiness in the timing of projects rather than a more pessimistic view of future revenue opportunities. As we look forward, Q2 2023 will also face a headwind of four points due to the demand surge in the prior year. I'll also highlight one change to our adjustments to net income. As we transition certain on-premise technologies to the cloud, we felt an adjustment for software as a service amortization was helpful for comparability purposes. Now that this cost has somewhat stabilized, we will no longer be including it as an add back in our adjusted net income calculation. However, it will continue to be included in our adjusted EBITDA calculation, given that these costs are reported in SG&A and are taking the place of depreciation for former on-premise technologies. One last item before we wrap up. As a reminder, the 2023 fiscal year will have 53 weeks, which is a typical occurrence every five to six years since we operate on a 52-week fiscal year versus a calendar year. This extra week will provide incremental revenue for the year of $22 million - $27 million, but will not contribute additional profit as it is an annual low point for weekly revenue. For additional details on our outlook, please see our earnings presentation filed today. This concludes our prepared remarks. Operator, please open the call now for questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Kartik Mehta with Northcoast Research. Please proceed. Good afternoon. Derrek, maybe or just any, I guess anyone on the management team, I apologize. Just your thoughts on kind of the economic outlook. I know, you know, I think you've talked about labor market being tight, obviously. I'm just wondering, in relationship to kind of where you thought the economy was maybe in the Q4 or you kind of see it now and just thoughts going forward? Hey, thanks, Kartik. This is Steve. You know, I think that's in the middle of the bull's eye, that question about where are we going and how fast in this economy. As Derrek said in his remarks, you know, it's hard to grow this business without a good economy. We've all seen the impact of interest rates and the slowing that that has done. We've also seen this powerful news of how many job openings that we have. Balancing those two and trying to figure out where spend will be is part of us supplying the resources in the right spot at the right time. We're feeling good about it, that this trend that PeopleReady has been on of consistency for over a quarter, you know, four, five months of a pretty consistent pattern, except for the prior year surge that Derrek called out. That gives us a lot of confidence that we are participating in a pretty good economy where we are, except for the prior year surge that had happened. Second to come with that is full-time hiring. These positions are open, yet there's a lot of companies, I don't know if it's a freeze is the right word, but some caution in their hiring is out there that we know of. We're in a, we're in a spot of, I don't know if we're at equilibrium yet, that we're ready to start growing through all of it, but we're pretty happy with where our industrial staffing business sits, and we're watching carefully where our RPO business sits. That's what I'll say about that. The interest rates have definitely hurt buying activity and the movement of goods, we'll see where that ends up later in the year too. I don't know if Derrek wants to add anything to that. I'll add a little bit to it. I'm glad you asked the question, Kartik. You know, if we're looking to 2023, we're still approaching it with caution. We're planning our business that there's gonna be softer macroeconomic conditions. We think that's a prudent thing to do. Where we stand today, if we're talking about, well, how are we feeling today about the future for 2023 to where we were a quarter ago, we are incrementally more optimistic about it from where we were. As Steve mentioned, the activity that's going on with jobs, I mean, the number of open jobs just went up to 11 million. The job hiring activity has been relatively strong. You know, we saw the ADP report. They say that's weather. We'll all stay tuned on that. You take a look at that in a strong GDP quarter that just finished, you know, given all the interest rates hikes and inflation coming down. It's just suggesting to us, from what we can see, the labor markets, which we think is a really important part of the economy, is navigating its way through some of these challenges that have been presented this year. I think that's that's our overall take right there. No, that's helpful. Just one last question. Just on SG&A, you know, if there's an unfortunate incident and the economy starts kind of trailing off faster than anybody's anticipating, I guess, how quickly can you adjust on cost, and how quickly would you? Well, I think it would depend on what we actually experience in the severity of a downturn. We, you know, as I talked about earlier, we are expecting softer macroeconomic conditions. We put out annual guidance for at least on the SG&A line that's relatively close to how we finished up 2022. You know, we took $40 million of costs out in 2020. $30 million of that still sits, remains outside of our cost structure. A lot of that's in the PeopleReady business. We've really slimmed that business down to the minimums of what it takes to keep these operations open. Cutting any more there, we're really concerned for if we cut $1 of SG&A, we're gonna lose even more in gross profit dollars. We're really trying to look at managing this business to maximize the amount of profit over a complete economic cycle. With where labor conditions are and the tightness of the labor pool, that's not just for our customers, it's for us too. As much advancements that we've made from a digital perspective, from a technology perspective, we still need people and relationships with customers. It's sold face-to-face. Things happen service-wise that need adjustments. We need good people that know our business, know our technology, know our processes. Most importantly, you know, our customers' needs change through the year. We have to stay close to that. We're being very mindful to not take that too far. Now, if we get into a deeper, darker recession, we're gonna have to take another look at that. That's not our plans, as we sit here today. Yeah. I appreciate the question there, Kartik, because it's balanced with your first question on the thoughts of the outlook. The fact that we're playing this SG&A card to run strong and as Taryn had mentioned, keep people trained and keep our staff in line is we're playing the card that we believe we're ready to bounce, and that we're ready to take advantage of the upswing. Your second question, though, is how fast we can react if something different happens. Really built into our model is that our recruiters at PeopleScout, that's a variable cost. To some degree, depending on how bad it gets at PeopleReady, that becomes a variable cost based on how many branches we have running and how many people we have in those branches. We have a lot of variability, and then all of our bonus programs that we're paying these recruiters and staffing specialists is all on a variable model also. This will ramp up and down, and we'll watch very closely. For now, we like the card we're playing because we wanna be ready on the bounce back. Perfect. Thank you so much. I really appreciate it. Our next question is from Jeff Silber with BMO Capital Markets. Please proceed. Thanks so much. I just wanted to welcome Taryn to the call as well. Before I ask my question, I just wanted to state something publicly. It looks like the data services had an incorrect estimate for us for the quarter. We were actually at $0.38, not the $0.69 that they show, which mean consensus was probably closer to $0.41, not $0.52, 'cause the headlines say that you missed report consensus estimates. You might have actually reported a slight beat. We're trying to have this corrected. I just wanted to let everybody know that first. Yeah. Just moving on with my question. Appreciate that. Thank you. No worries. Just moving on to my questions. Can we talk about trends inter-quarter and what you've seen in January? If it's possible to give that by segment, that'll be great. Yeah, let's talk about it. You know, our PeopleManagement trends, the quarterly trends were very consistent. Actually, for all three segments, the quarterly trends, or excuse me, the monthly trends were pretty consistent throughout the quarter. There's nothing really to point out through the quarter. Now, as we go into January, that continued for PeopleReady business. The underlying trends still hold or holding up quite steady. You know, our PeopleManagement business was low double single digit in growth in the Q4. That held on a monthly basis. Going in the Q1, though, we're seeing some softening there. You know, we've got clients that are in retail and transportation that they're just saying we're expecting to have a little bit lower volumes. Retail held up quite well in Q4 compared to their original expectations, where they're gonna be, but some of that was through discounting and promotions of inventory, which won't carry into the Q1. For PeopleScout, we don't bill on a weekly basis. You know, as you saw from our results here in Q4, we were down about 16%. In Q4, we're looking at about the same trajectory in Q1. Now, I will say that, you know, PeopleScout's 16% decline, half of that was from one client that is having its own challenges. We're still expecting, though, about the same amount of revenue decline in our outlook for the Q1 for January. We're seeing, you know, clients coming back and saying, "Hey, we're gonna hold for this month. We're gonna delay till next month." There's some softness coming from that. I'll also say we're not surprised by that. Our PeopleReady business leads. You know, we saw that in the second and Q3. We talked about that. It's holding steady and seeing some softness falling in the, in the perm area is not a surprise to us at this point. All right. That's helpful. If I can dig down a bit further in PeopleScout, I don't think you broke that brand out separately in prior recessions, but you had it during the pandemic. In looking at my model, PeopleScout revenues fell over 40% in Q1, but recovered fairly quickly. Should we expect that kind of volatility if we are heading into a recession? Would this be the most volatile of your three segments? Well, I would be really surprised if we had anything as volatile as what we had in 2020. Remember when we had that significant decline that you just mentioned, most of that was around different forms of hospitality. Airlines, hospitality, hotels. That was a third of the mix of our business. As you know, in 2020, that segment got really hammered. I wouldn't expect that kind of volatility. Now, the PeopleScout business in and of itself is a little bit more lumpy because, you know, the revenue per customer is is the proportions to the total revenues is a higher. There's not near as many customers there as there is in, say, a PeopleReady business. It can be lumpy at times, but I wouldn't... I'd be really surprised to see that kind of revenue decline again on a year-over-year basis. Okay. That's, that's really helpful. If I could just stick in one quick one. You mentioned a revenue reserve as to adjustment in PeopleScout in the quarter. Can you just quantify what that was for us? Sure. That was, maybe about $3 million. You know, when it comes to revenue recognition for our PeopleScout business, it's pretty straightforward. We go and find candidates. We turn over some candidates to a hiring manager. They select one and right around that point, revenue gets recognized. Now, with that said, we do have other agreements with those same customers around volumes, annual volumes that have to be estimated, certain turnover ratios, different things that are built into these. We've always had some form of what we refer to as a revenue reserve, adjustments that are made. There's usually a few little ones that go one way, a few that go the other way. This particular quarter, they just all seem to go one way. This is the first time that we've talked about it in 10 years, and I wouldn't be surprised if we didn't talk about this for another 10 years. I hope so. All right. Thanks so much. Our next question is from Mark Marcon with Baird. Please proceed. Hey, I just wanna follow up on some of Jeff's questions. you know, with regards to just PeopleScout, Taryn, welcome to the call. I'm wondering, you know, given your expertise in the area, can you describe a little bit more about like what you were seeing there just in terms of the one large client that accounts for half? Is that kind of a temporary one-time thing? Or, you know, were they just over-hiring post-COVID, and now it's getting back to normal. What did you see with the other players? Were there any clients that have been lost or anything along those lines? Thank you so much for the welcome. Excited to be here. Related to the customer that had the decline this quarter, it's a large retail customer who had declining volumes within their business in the quarter. We helped this customer with their surge hiring during the holiday season and during other periods of surges within their business. We had a combination of a couple of things going on. First, they didn't need to hire as many people. Secondly, they didn't have as many people that are on staff busy with work on the sales floor. They had those individuals supplement by doing some recruitment themselves. That's what drove that decline in this quarter with the large customer. Great. What are you seeing with the others? Is it fairly steady? Have you retained all of your customers, or are there any sort of, you know, contracts that might be terminated or winding down or anything along those lines? Yeah. I would say just overall, the sentiment that we're hearing from our customers is really around uncertainty about their short-term staffing needs. In RPO, specifically, customers, we're seeing a lot of activity from first-time buyers. They're really interested in getting support with their hiring. However, they've been slower to make long-term hiring decisions. We're seeing a surge in some of our shorter-term offerings, like Recruiter on Demand and some project RPO work, where we're able to support our customers rapidly with their needs now, while they sort through what their hiring volumes are going to be for the long-term. Otherwise, as Derrek mentioned, we have some customers that are slowing down their hiring. They're being more hesitant. They're going on and off holds and really just trying to sort through what their hiring volumes are gonna look like this year. Otherwise, we are, you know, just in current course of business, trying to support them with the needs that they have right in front of them. Yeah., when it comes to the PeopleScout business, this is really a story about our customers' hiring volumes coming down. Interestingly enough, it's not because they don't still have open jobs. They do. A lot of these customers are not sure where things are going. You know what? At a company, one of your worst fears is you hire some people, and two, three, four, six months later, you're going back to those people and saying, "We're sorry. We gotta let you go." That's not good for the people. It's not good for the business. There are many of our customers that are in that spot, trying to understand where things are going, and they're saying, "We're gonna just hold, or we're gonna pause, we're gonna delay this a month, and everybody..." Just talking to their employees. Everybody else, you're just gonna have to get by. Everybody's gonna have to get by till we get some more direction on where our own business is headed. That's what we're seeing. Yeah. I would just add one more point. We saw volumes in 2022 with our customers that were really high because they were experiencing turnover like they had never experienced before. Many of those customers have put good plans in place to bring that turnover down, which is just naturally bringing down that turnover and the hiring volume accordingly. That's great color. Just given the comment with regards to the one large one, you know, having that surge in Q4, you know, the prior year and not having it this year. Does that mean that how should we think about, you know, the, the revenue decline that we ended up seeing here in the Q4? Should that continue into the Q1? Because presumably, that retail client wouldn't have had the same level of surge hiring in Q1, a year ago. We're expecting the revenue decline in Q1 for the PeopleScout business to be pretty close to what we had this quarter, albeit from a different path. If you took the 16 points of revenue decline and you adjust it for this one customer we talked about, we'd be more at about 9%, you know, excluding that customer. You know, going into the Q1, we're hearing from more clients, not anything big, but more pauses. We're expecting to be at about the same revenue decline. It's just getting there through a slightly different path than what you saw in Q4. Okay. Great. Then how should we think about the staffing levels, you know, internally within TrueBlue for the PeopleScout division? How should we think about the expense profile of that business if things are gonna continue along this kind of path? Yeah. The great news at PeopleScout is that the model is built to scale up and down to meet the hiring volumes of our customers. From a recruiter and a recruiting coordinator perspective, we do have flexible staff that we are able to scale based on that hiring volume. It's, it's built into the model. It's a big reason that customers choose to outsource to us so that we can bring them that level of scalability. Taryn gave you the most important big picture. I'll just give you just a little bit of geography. Just to also understand, as we make those adjustments, it won't show up in our SG&A. Our recruiters are actually in our cost of sales. What Taryn's talking about are actions that will be taken as it's needed, as volumes come down, to scale the recruiting resources to the amount of demand, to keep the gross profit percentage in that business whole. Great. Then can you give us a little bit more granularity with regards to, you know, to PeopleReady, just in terms of like what you're seeing in different regions, different end markets, just in terms of what's going a little bit softer, aside from the retailers that you had already mentioned, and prepared us for. You know, what else seems to be, you know, either changing on the margin? Are you seeing any green shoots in terms of areas that are picking up more? Yeah. If we talk from a geographic perspective, there's not much news there. If you take a look at the states and the trends there, you take a look at them. It's just very close to the aggregate for the overall PeopleReady business. You take a look at by industry, there are some different bands. You know, the areas where we see the most pressure, you know, if you're taking a look at year-over-year trends, transportation, services and retail, those would be the leaders of the pack. Those declines would be higher than the aggregate percentage revenue decline that we reported. Areas that are not experiencing as much pressure and would be below that would be construction, manufacturing, hospitality. Still having some declines, holding up, you know, better. The green energy space is one that's been growing for us this year. That's a bright spot. Canada's been a bright spot for us. You know, Taryn could probably elaborate a little bit more on our green energy plan, you know, with the some of the legislation that was passed in the Inflation Reduction Act, there's a lot of incentive around green energy, that's an area that we're pretty bullish on. Great. Steve, can you talk a little bit about how you're thinking about just the, you know, the office program with regards to, you know, PeopleReady? You know, it sounds like we put some things on hold in terms of centralization. Any updates in terms of there or stats with regards to JobStack and what percentage of the volume is being filled through JobStack now? Yeah. I'll kick off that, and I'll let Taryn add a little color to that. We recognize the importance of these branches. This is what's worked for us for 30 years, and we understand that. Taking care of the employees that take care of the customers when they're out there doing two for Tuesday, two people, two for two days, and that blocking and tackling that it takes to run that business. It's a very contact sport where you've got to have your teams focused on the right things. Taryn and her leaders in PeopleReady are doing that, where we're focused on local accounts, growing local accounts. I was in a market last week and seeing, you know, seven, eight different branch managers, two or three of them that are really great at blocking and tackling and winning local accounts. It's very possible. That's where our energy is right now. Centralization is a great idea, and it's a great way to save some costs, but not at the cost of losing revenue and losing employees. We are calling a timeout there for a bit until we have a few more of our ducks in a row on what it really takes to roll that out with the power that is good for our customers and good for our associates. We're close, but we just didn't quite hit the nail on the head. We're gonna pause that for a bit, and we're gonna stay focused on these branches. That's where we've been. Where we do have service centers, they're okay, and we'll ensure that we're doing okay. There's, you know, one big area of our PeopleReady that went first, and we closed branches, and actually the results are holding pretty steady to the rest of the company. The reason to not go faster is we've got to do better for our customers and our associates when having the right technology and having the right training programs employee in those centers. We'll come back to it, Mark, but you're not gonna hear us beat that drum a lot until we're prepared and do a bit better. Let me have Taryn give a little color there, and she can also talk about how we're doing with JobStack. Yeah, absolutely. Steve said it well. We're just squarely focused right now to ensure that we are providing great service to our customers and keeping our relationships strong. I'll talk about JobStack. JobStack, as you know, has been a critical component of the PeopleReady business, really helping us connect with our clients and associates through that digital experience. Operating in a tight labor market, JobStack has allowed us to maintain constant contact with our associates. We've got 90% of our associates that are using the app, and client adoption continues to increase as well. We've got about 30,000 clients engaged through the JobStack app at this point. It's certainly helping us with the connection point, and it's also enabled us to achieve some of those cost efficiencies that Derrek talked about earlier, in the dollars that we were able to remove from operations in 2020. That's terrific. Thank you. As a reminder to star one on your telephone keypad if you would like to ask a question. Our next question is from Marc Riddick with Sidoti. Please proceed. Good evening, everyone. Hey, Marc. Hey, Marc. I wanna echo everyone's comments and welcome Taryn. It's good to hear you on the call and looking forward to working with you going forward. Thank you. I wanted to touch a little bit on. We've talked quite a bit about the transactions. I wonder if you talk a little bit about cash flow and cash management prioritization and, you know, certainly it's nice to have a good balance sheet in complicated times. I was wondering if you talk a little bit about maybe where your thoughts are there for this year, and then I have a couple of follow-ups. Well, when it comes to, you know, our capital strategy, not a lot has changed. We are very glad we got such a strong balance sheet, taking a look at where things might go economically, but we're well prepared for that. That's not a concern of ours on the longevity of the business, if we needed to do something with capital and pull it to support the business. Put a check mark behind that one. You know, when it comes to acquisitions, we're less interested in acquisitions in our, in our staffing businesses. You know, we think our biggest opportunity right now is continue to digitalize this business, increase our relevance with customers, increase our relevance with candidates and with the workforce. That's really our best return right now. We're really pleased with our progress. Acquiring into that, we think would be a distraction, and there's just not any opportunity out there to pull another business into that, opportunity-wise, that we can see can outrank what we're doing with our digital strategies. Maybe if there was some technology that would enhance that'd be a different story, but just going out and buying more staffing firms and tucking them in isn't really something we're particularly interested in. When it comes to the RPO business, that's a different story. You know, with the RPO business, there's areas like life sciences or technology that we'd be very interested in getting a bigger presence in. We have those presence actually with many of our clients. They have technology positions, we're filling them. What we're talking about is adding more specialization and more street credibility from a logo perspective, to technology firms or to life science firms. Having that really helps us in the landing the deals. When it comes to stock repurchase, that's something that we've continued to be interested in. We do like to be opportunistic in our stock repurchase program. That's all I'll say on that, but those are our three broad categories of where we wanna spend our money, and nothing has really changed from those three. Okay, great. I was wondering if you touch a little bit about the, the pricing environment and what you're seeing in the businesses and whether or not there's been any impact. I understand the client hesitancy. Maybe if you could talk a little bit about, you know, what we're seeing with the rates and, if there's been any changes or anything noticeable there as well. I think that the standout from a pricing perspective really is our PeopleReady business. You know, our PeopleReady business, these are smaller jobs oftentimes. They're supplemental, they're project, that's one dynamic we have going for us is we get to reprice this business all the time. Our business units are really doing a great job on it. I just was looking before I came in here to the call, I was looking back at some history on positive bill pay spread. I had one that went back 10 years and, you know, we've the positive bill pay spread for the year here at PeopleReady has been 180 basis points. There was nothing that even came close to it. You know, we're the business is really pricing it based on the value that we're contributing to the customers. We think that we're delivering a really good value as far as the quality of what we're presenting. You know, supply, demand imbalance aids in some of that. Our folks are needing us even more than they've ever needed us before in trying to find good candidates. The markets are tight. We know how to find that, and it's coming through in the pricing. I don't know. I'll pass it over to Taryn. Maybe Taryn, see if you wanna add anything to that and make any comments about PeopleManagement or PeopleScout. Yeah. I'll echo your sentiment, Derrek. We've just had great success at making sure we're able to get the right pay rates to our associates and then the bill rates to get the jobs filled on their behalf. Great. Thank you very much. That will end our question and answer session, so we may conclude today's conference. Thank you for your participation, and have a wonderful day.