TrueBlue, Inc. (NYSE:TBI) Q3 2023 Earnings Call Transcript - Page 7 of 7 - InvestingChannel

TrueBlue, Inc. (NYSE:TBI) Q3 2023 Earnings Call Transcript

Derrek Gafford: No, I don’t think so, Mark. When — as you know, that’s a big cost for us. It’s a big item on our balance sheet, and it’s a really long-tail liability. And just like you would have with any other insurance company, there’s adjustments that can kind of go back and forth, and it could be a little lumpy at times. And so — that’s really it. There were just — there were less favorable adjustments to prior year reserves this quarter than what we saw the same quarter last year. However, when you take a look at the expense, there’s a lot of consistency in it. I mean, workers’ comp as a percentage of revenue came in about 1.7% this quarter. It was 1.7% last quarter. It was 1.7% in Q2 of last year. Just in Q3 of last year, it was lower than that because there were — there was a nice lumpy benefit — larger benefit hitting the work comp line.

Mark Marcon: Okay. Great. And then on the balance sheet and cash flows, when we take a look at the accounts receivables, how are DSOs trending? Because it looked like receivables were a use of funds of cash, we didn’t get the normal harvest that we typically get on revenue declines. What’s occurring there?

Derrek Gafford: Well, when it comes to accounts receivable, at least for the year, you may be doing your own math on the quarter for the year, it’s $35 million to the positive.

Mark Marcon: Right. But I was talking about, for the quarter sequentially.

Derrek Gafford: Yeah. Well, for the year-over-year, if we just kind of get to your question, DSO is up about one day, year-over-year. So we’re not really seeing a big slide on the accounts receivable side. We just saw — if you take a look from Q2 to Q3, our revenue dollars were about the same this year. And so we didn’t have anything — where we went from Q2 to Q3 seeing any kind of decline. They were just stable. So we had one day of DSO increase year-over-year. Sequentially, it was up a bit more than that. but Q2 of this year was unseasonably low as well.

Mark Marcon: Okay. But I mean, we should end up having some harvesting here in the fourth quarter. I mean, free cash flow should — there’s just a timing difference in free cash flow — should rebound pretty nicely in the fourth quarter, no?

Derrek Gafford: That’s right. That’s exactly right.

Mark Marcon: Okay. Great. Look forward to talking to you on – post call. Thanks.

Operator: There are no further questions at this time. I’d like to turn the floor back over to Taryn for closing comments. .

Taryn Owen: Thank you, operator, and thank you, everyone, for joining us today. I look forward to meeting many of you at investor events over the coming year and keeping you updated on our progress. I also want to thank the entire TrueBlue team for their tremendous efforts and continued focus on fulfilling our mission to connect people and work. If you have any questions, please don’t hesitate to reach out. Have a great evening.

Operator: Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

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