Business Wire | Apr 26, 2021 04:05PM EDT

TrueBlue Reports First Quarter 2021 Results

Apr. 26, 2021

TACOMA, Wash.--(BUSINESS WIRE)--Apr. 26, 2021--TrueBlue (NYSE:TBI) today announced its first quarter results for 2021.

First quarter revenue was $459 million, a decrease of 7 percent compared to revenue of $494 million in the first quarter of 2020. Net income per diluted share was $0.20 compared to net loss per diluted share of $4.04 in the first quarter of 2020. Included in the results for the first quarter of 2020 is a non-cash goodwill and intangible asset impairment charge of $175 million, which is equivalent to $152 million after tax or $4.08 per diluted share. First quarter adjusted net income1 per diluted share was $0.25 compared to adjusted net loss per diluted share of $0.01 in the first quarter of 2020.

"We had a strong start to the year driven by revenue recovery across all segments and disciplined cost management," said Patrick Beharelle, CEO of TrueBlue. "We are seeing encouraging new business wins and recovery of existing client volumes, including some of the markets that were hit the hardest last year. Our focus on efficiently managing costs while ensuring we continue to invest in sales resources and digital strategies has allowed us to accelerate our strategic priorities and emerge stronger as the economy begins to shift back to growth.

"Our efforts are producing competitive differentiation and in the case of PeopleReady, JobStack heavy client users continue to show higher revenue growth compared to the rest of the customer base," Mr. Beharelle continued. "We are excited about our market positioning and ability to increase market share."

2021 Outlook

TrueBlue is providing certain forward-looking information to help investors form their own estimates, which can be found in the quarterly earnings presentation filed today.

Management will discuss first quarter 2021 results on a webcast at 2:30 p.m. PT (5:30 p.m. ET), today, Monday, Apr. 26, 2021. The webcast can be accessed on TrueBlue's website: www.trueblue.com.

About TrueBlue

TrueBlue (NYSE: TBI) is a leading provider of specialized workforce solutions that help clients achieve business growth and improve productivity. In 2020, TrueBlue connected approximately 490,000 people with work. Its PeopleReady segment offers on-demand, industrial staffing, PeopleManagement offers contingent, on-site industrial staffing and commercial driver services, and PeopleScout offers recruitment process outsourcing (RPO) and managed service provider (MSP) solutions to a wide variety of industries. Learn more at www.trueblue.com.

1 See the financial statements accompanying the release and the company's website for more information on non-GAAP terms.

Forward-looking statements

This document contains forward-looking statements relating to our plans and expectations, all of which are subject to risks and uncertainties. Such statements are based on management's expectations and assumptions as of the date of this release and involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied in our forward-looking statements including: (1) national and global economic conditions, (2) the continued impact of COVID-19 and related economic impact and governmental response, (3) our ability to access sufficient capital to finance our operations, including our ability to comply with covenants contained in our revolving credit facility, (4) our ability to attract and retain clients, (5) our ability to attract sufficient qualified candidates and employees to meet the needs of our clients, (6) our ability to maintain profit margins, (7) new laws, regulations, and government incentives that could affect our operations or financial results, (8) our ability to successfully execute on business strategies to further digitalize our business model, and (9) any reduction or change in tax credits we utilize, including the Work Opportunity Tax Credit. Other information regarding factors that could affect our results is included in our Securities Exchange Commission (SEC) filings, including the company's most recent reports on Forms 10-K and 10-Q, copies of which may be obtained by visiting our website at www.trueblue.com under the Investor Relations section or the SEC's website at www.sec.gov. We assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. Any other references to future financial estimates are included for informational purposes only and subject to risk factors discussed in our most recent filings with the SEC.

In addition, we use several non-GAAP financial measures when presenting our financial results in this document. Please refer to the reconciliations between our GAAP and non-GAAP financial measures in the appendix to this document and on our website at www.trueblue.com under the Investor Relations section for additional information on both current and historical periods. The presentation of these non-GAAP financial measures is used to enhance the understanding of certain aspects of our financial performance. It is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies.

TRUEBLUE, INC.

SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

13 weeks ended

(in thousands, except per share data) Mar 28, 2021 Mar 29, 2020

Revenue from services $ 458,706 $ 494,252

Cost of services 348,132 368,093

Gross profit 110,574 126,159

Selling, general and administrative expense 97,401 117,381

Depreciation and amortization 6,962 9,094

Goodwill and intangible asset impairment charge - 175,189

Income (loss) from operations 6,211 (175,505 )

Interest expense and other income, net 575 263

Income (loss) before tax expense (benefit) 6,786 (175,242 )

Income tax benefit (112 ) (24,748 )

Net income (loss) $ 6,898 $ (150,494 )



Net income (loss) per common share:

Basic $ 0.20 $ (4.04 )

Diluted $ 0.20 $ (4.04 )



Weighted average shares outstanding:

Basic 34,674 37,255

Diluted 35,066 37,255

TRUEBLUE, INC.

SUMMARY CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)

Mar 28, 2021

Dec 27, 2020

ASSETS

Cash and cash equivalents

$

88,006

$

62,507

Accounts receivable, net

260,108

278,343

Other current assets

35,897

38,035

Total current assets

384,011

378,885

Property and equipment, net

76,109

71,734

Restricted cash and investments

231,178

240,534

Goodwill and intangible assets, net

122,038

123,802

Other assets, net

166,101

165,622

Total assets

$

979,437

$

980,577

LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable and other accrued expenses

$

48,168

$

58,447

Accrued wages and benefits

126,906

122,657

Current portion of workers' compensation claims reserve

62,005

66,007

Other current liabilities

21,410

21,856

Total current liabilities

258,489

268,967

Workers' compensation claims reserve, less current portion

191,989

189,486

Other long-term liabilities

83,332

84,934

Total liabilities

533,810

543,387

Shareholders' equity

445,627

437,190

Total liabilities and shareholders' equity

$

979,437

$

980,577

TRUEBLUE, INC.

SUMMARY CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands) Mar 28, Dec 27, 2021 2020

ASSETS

Cash and cash equivalents $ 88,006 $ 62,507

Accounts receivable, net 260,108 278,343

Other current assets 35,897 38,035

Total current assets 384,011 378,885

Property and equipment, net 76,109 71,734

Restricted cash and investments 231,178 240,534

Goodwill and intangible assets, net 122,038 123,802

Other assets, net 166,101 165,622

Total assets $ 979,437 $ 980,577



LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable and other accrued expenses $ 48,168 $ 58,447

Accrued wages and benefits 126,906 122,657

Current portion of workers' compensation claims 62,005 66,007 reserve

Other current liabilities 21,410 21,856

Total current liabilities 258,489 268,967

Workers' compensation claims reserve, less current 191,989 189,486 portion

Other long-term liabilities 83,332 84,934

Total liabilities 533,810 543,387

Shareholders' equity 445,627 437,190

Total liabilities and shareholders' equity $ 979,437 $ 980,577

TRUEBLUE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

13 weeks ended

(in thousands)

Mar 28, 2021

Mar 29, 2020

Cash flows from operating activities:

Net income (loss)

$

6,898

$

(150,494

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

6,962

9,094

Goodwill and intangible asset impairment charge

-

175,189

Allowance for credit losses

207

3,289

Stock-based compensation

3,343

1,508

Deferred income taxes

(5,002

)

(23,432

)

Non-cash lease expense

3,920

3,763

Other operating activities

(438

)

5,375

Changes in operating assets and liabilities:

Accounts receivable

18,025

45,407

Income tax receivable

4,910

435

Operating lease right-of-use-asset

3,501

-

Other assets

(4,578

)

5,958

Accounts payable and other accrued expenses

(9,633

)

(28,443

)

Accrued wages and benefits

4,249

(11,733

)

Workers' compensation claims reserve

(1,499

)

(2,163

)

Operating lease liabilities

(3,320

)

(3,811

)

Other liabilities

338

(2,334

)

Net cash provided by operating activities

27,883

27,608

Cash flows from investing activities:

Capital expenditures

(10,003

)

(7,028

)

Purchases of restricted available-for-sale investments

(14

)

(1,149

)

Sales of restricted available-for-sale investments

452

1,269

Maturities of restricted held-to-maturity investments

6,371

6,168

Net cash used in investing activities

(3,194

)

(740

)

Cash flows from financing activities:

Purchases and retirement of common stock

-

(52,348

)

Net proceeds from employee stock purchase plans

255

323

Common stock repurchases for taxes upon vesting of restricted stock

(2,555

)

(1,792

)

Net change in revolving credit facility

-

256,400

Other

(94

)

(508

)

Net cash provided by (used in) financing activities

(2,394

)

202,075

Effect of exchange rate changes on cash, cash equivalents and restricted cash

262

(1,738

)

Net change in cash, cash equivalents, and restricted cash

22,557

227,205

Cash, cash equivalents and restricted cash, beginning of period

118,612

92,371

Cash, cash equivalents and restricted cash, end of period

$

141,169

$

319,576

TRUEBLUE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

13 weeks ended

(in thousands) Mar 28, Mar 29, 2020 2021

Cash flows from operating activities:

Net income (loss) $ 6,898 $ (150,494 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 6,962 9,094

Goodwill and intangible asset impairment charge - 175,189

Allowance for credit losses 207 3,289

Stock-based compensation 3,343 1,508

Deferred income taxes (5,002 ) (23,432 )

Non-cash lease expense 3,920 3,763

Other operating activities (438 ) 5,375

Changes in operating assets and liabilities:

Accounts receivable 18,025 45,407

Income tax receivable 4,910 435

Operating lease right-of-use-asset 3,501 -

Other assets (4,578 ) 5,958

Accounts payable and other accrued expenses (9,633 ) (28,443 )

Accrued wages and benefits 4,249 (11,733 )

Workers' compensation claims reserve (1,499 ) (2,163 )

Operating lease liabilities (3,320 ) (3,811 )

Other liabilities 338 (2,334 )

Net cash provided by operating activities 27,883 27,608

Cash flows from investing activities:

Capital expenditures (10,003 ) (7,028 )

Purchases of restricted available-for-sale (14 ) (1,149 )investments

Sales of restricted available-for-sale investments 452 1,269

Maturities of restricted held-to-maturity 6,371 6,168 investments

Net cash used in investing activities (3,194 ) (740 )

Cash flows from financing activities:

Purchases and retirement of common stock - (52,348 )

Net proceeds from employee stock purchase plans 255 323

Common stock repurchases for taxes upon vesting of (2,555 ) (1,792 )restricted stock

Net change in revolving credit facility - 256,400

Other (94 ) (508 )

Net cash provided by (used in) financing activities (2,394 ) 202,075

Effect of exchange rate changes on cash, cash 262 (1,738 )equivalents and restricted cash

Net change in cash, cash equivalents, and 22,557 227,205 restricted cash

Cash, cash equivalents and restricted cash, 118,612 92,371 beginning of period

Cash, cash equivalents and restricted cash, end of $ 141,169 $ 319,576 period

TRUEBLUE, INC.

SEGMENT DATA

(Unaudited)

13 weeks ended

(in thousands)

Mar 28, 2021

Mar 29, 2020

Revenue from services:

PeopleReady

$

260,392

$

299,294

PeopleManagement

151,754

141,614

PeopleScout

46,560

53,344

Total company

$

458,706

$

494,252

Segment profit (loss) (1):

PeopleReady

$

11,860

$

7,655

PeopleManagement

3,116

(314

)

PeopleScout

4,037

2,508

Total segment profit

19,013

9,849

Corporate unallocated expense

(5,619

)

(5,209

)

Total company Adjusted EBITDA (2)

13,394

4,640

Work Opportunity Tax Credit processing fees (3)

(135

)

(135

)

Amortization of software as a service assets (4)

(673

)

(552

)

Goodwill and intangible asset impairment charge

-

(175,189

)

Workforce reduction costs (5)

(70

)

(1,308

)

COVID-19 government subsidies

1,743

-

Other adjustments, net (6)

(1,086

)

6,133

EBITDA (2)

13,173

(166,411

)

Depreciation and amortization

(6,962

)

(9,094

)

Interest expense and other income, net

575

263

Income (loss) before tax benefit

6,786

(175,242

)

Income tax benefit

112

24,748

Net income (loss)

$

6,898

$

(150,494

)

TRUEBLUE, INC.

SEGMENT DATA

(Unaudited)

13 weeks ended

(in thousands) Mar 28, 2021 Mar 29, 2020

Revenue from services:

PeopleReady $ 260,392 $ 299,294

PeopleManagement 151,754 141,614

PeopleScout 46,560 53,344

Total company $ 458,706 $ 494,252



Segment profit (loss) (1):

PeopleReady $ 11,860 $ 7,655

PeopleManagement 3,116 (314 )

PeopleScout 4,037 2,508

Total segment profit 19,013 9,849

Corporate unallocated expense (5,619 ) (5,209 )

Total company Adjusted EBITDA (2) 13,394 4,640

Work Opportunity Tax Credit processing fees (3) (135 ) (135 )

Amortization of software as a service assets (4) (673 ) (552 )

Goodwill and intangible asset impairment charge - (175,189 )

Workforce reduction costs (5) (70 ) (1,308 )

COVID-19 government subsidies 1,743 -

Other adjustments, net (6) (1,086 ) 6,133

EBITDA (2) 13,173 (166,411 )

Depreciation and amortization (6,962 ) (9,094 )

Interest expense and other income, net 575 263

Income (loss) before tax benefit 6,786 (175,242 )

Income tax benefit 112 24,748

Net income (loss) $ 6,898 $ (150,494 )

(1)

We evaluate performance based on segment revenue and segment profit. Segment profit includes revenue, related cost of services, and ongoing operating expenses directly attributable to the reportable segment. Segment profit excludes depreciation and amortization expense, unallocated corporate general and administrative expense, interest expense, other income, income taxes, and other adjustments not considered to be ongoing.

(2)

See the Non-GAAP Financial Measures table on the next page for definitions of EBITDA and Adjusted EBITDA.

(3)

These third-party processing fees are associated with generating the Work Opportunity Tax Credits, which are designed to encourage employers to hire workers from certain targeted groups with higher than average unemployment rates.

(4)

Amortization of software as a service assets is reported in selling, general and administrative expense.

(5)

Workforce reduction costs for the 13 weeks ended March 31, 2020 were primarily due to employee reductions as part of our cost management actions in response to COVID-19.

(6)

Other adjustments for the 13 weeks ended March 28, 2021 primarily include lease expense of $0.8 million incurred during the build-out phase of our Chicago office and implementation costs for cloud-based systems of $0.1 million. Other adjustments for the 13 weeks ended March 31, 2020 primarily include implementation costs for cloud-based systems of $0.5 million, offset by a $6.3 million benefit from a reduction in expected costs to comply with the Affordable Care Act.

We evaluate performance based on segment revenue and segment profit. Segment profit includes revenue, related cost of services, and ongoing(1) operating expenses directly attributable to the reportable segment. Segment profit excludes depreciation and amortization expense, unallocated corporate general and administrative expense, interest expense, other income, income taxes, and other adjustments not considered to be ongoing.

(2) See the Non-GAAP Financial Measures table on the next page for definitions of EBITDA and Adjusted EBITDA.

These third-party processing fees are associated with generating the Work(3) Opportunity Tax Credits, which are designed to encourage employers to hire workers from certain targeted groups with higher than average unemployment rates.

(4) Amortization of software as a service assets is reported in selling, general and administrative expense.

Workforce reduction costs for the 13 weeks ended March 31, 2020 were(5) primarily due to employee reductions as part of our cost management actions in response to COVID-19.

Other adjustments for the 13 weeks ended March 28, 2021 primarily include lease expense of $0.8 million incurred during the build-out phase of our Chicago office and implementation costs for cloud-based systems of $0.1(6) million. Other adjustments for the 13 weeks ended March 31, 2020 primarily include implementation costs for cloud-based systems of $0.5 million, offset by a $6.3 million benefit from a reduction in expected costs to comply with the Affordable Care Act.

TRUEBLUE, INC.

NON-GAAP FINANCIAL MEASURES AND NON-GAAP RECONCILIATIONS

In addition to financial measures presented in accordance with U.S. GAAP, we monitor certain non-GAAP key financial measures. The presentation of these non-GAAP financial measures is used to enhance the understanding of certain aspects of our financial performance. It is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies.

Non-GAAP Measure

Definition

Purpose of Adjusted Measures

EBITDA and Adjusted EBITDA

EBITDA excludes from net income (loss):

- interest expense and other income, net,

- income taxes, and

- depreciation and amortization.

Adjusted EBITDA, further excludes:

- Work Opportunity Tax Credit third-party processing fees,

- amortization of software as a service assets,

- goodwill and intangible asset impairment charge,

- workforce reductions costs,

- COVID-19 government subsidies, and

- other adjustments, net.

- Enhances comparability on a consistent basis and provides investors with useful insight into the underlying trends of the business.

- Used by management to assess performance and effectiveness of our business strategies.

- Provides a measure, among others, used in the determination of incentive compensation for management.

Adjusted net income (loss) and Adjusted net income (loss) per diluted share

Net income (loss) and net income (loss) per diluted share, excluding:

- amortization of intangibles of acquired businesses,

- amortization of software as a service assets,

- goodwill and intangible asset impairment charge,

- workforce reduction costs,

- COVID-19 government subsidies

- other adjustments, net,

- tax effect of each adjustment to U.S. GAAP net income (loss), and

- adjustment of income taxes to our normalized long-term expected tax rate for periods prior to Q2 2020.

- Enhances comparability on a consistent basis and provides investors with useful insight into the underlying trends of the business.

- Used by management to assess performance and effectiveness of our business strategies.

TRUEBLUE, INC.

NON-GAAP FINANCIAL MEASURES AND NON-GAAP RECONCILIATIONS

In addition to financial measures presented in accordance with U.S. GAAP, wemonitor certain non-GAAP key financial measures. The presentation of thesenon-GAAP financial measures is used to enhance the understanding of certainaspects of our financial performance. It is not meant to be considered inisolation, superior to, or as a substitute for the directly comparablefinancial measures prepared in accordance with U.S. GAAP, and may not becomparable to similarly titled measures of other companies.

Non-GAAP Measure Definition Purpose of Adjusted Measures

EBITDA excludes from net income (loss):

- interest expense and other income, net,

- income taxes, and - Enhances comparability on a - depreciation and consistent basis and provides amortization. investors with useful insight into the underlying trends of the business.

Adjusted EBITDA, further excludes: - Used by management toEBITDA and Adjusted - Work Opportunity Tax assess performance andEBITDA Credit third-party effectiveness of our business processing fees, strategies.

- amortization of software as a service assets, - Provides a measure, among others, used in the - goodwill and intangible determination of incentive asset impairment charge, compensation for management.

- workforce reductions costs,

- COVID-19 government subsidies, and

- other adjustments, net.

Net income (loss) and net income (loss) per diluted share, excluding:

- amortization of intangibles of acquired businesses,

- amortization of software as a service assets, - Enhances comparability on a - goodwill and intangible consistent basis and provides asset impairment charge, investors with useful insight into the underlying trends ofAdjusted net income - workforce reduction the business.(loss) and Adjusted costs, net income (loss) per diluted share - COVID-19 government subsidies - Used by management to assess performance and - other adjustments, net, effectiveness of our business strategies. - tax effect of each adjustment to U.S. GAAP net income (loss), and

- adjustment of income taxes to our normalized long-term expected tax rate for periods prior to Q2 2020.



1.

RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE

(Unaudited)

13 weeks ended

(in thousands, except for per share data)

Mar 28, 2021

Mar 29, 2020

Net income (loss)

$

6,898

$

(150,494

)

Amortization of intangible assets of acquired businesses

1,885

4,004

Amortization of software as a service assets (1)

673

552

Goodwill and intangible asset impairment charge

-

175,189

Workforce reduction costs (2)

70

1,308

COVID-19 government subsidies

(1,743

)

-

Other adjustments, net (3)

1,086

(6,133

)

Tax effect of adjustments to net income (loss) (4)

33

(20,990

)

Adjustment of income taxes to normalized effective rate (5)

-

(3,719

)

Adjusted net income (loss)

$

8,902

$

(283

)

Adjusted net income (loss) per diluted share

$

0.25

$

(0.01

)

Diluted weighted average shares outstanding

35,066

37,255

1. RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE

(Unaudited)

13 weeks ended

(in thousands, except for per share data) Mar 28, Mar 29, 2020 2021

Net income (loss) $ 6,898 $ (150,494 )

Amortization of intangible assets of acquired 1,885 4,004 businesses

Amortization of software as a service assets 673 552 (1)

Goodwill and intangible asset impairment charge - 175,189

Workforce reduction costs (2) 70 1,308

COVID-19 government subsidies (1,743 ) -

Other adjustments, net (3) 1,086 (6,133 )

Tax effect of adjustments to net income (loss) 33 (20,990 ) (4)

Adjustment of income taxes to normalized - (3,719 ) effective rate (5)

Adjusted net income (loss) $ 8,902 $ (283 )



Adjusted net income (loss) per diluted share $ 0.25 $ (0.01 )



Diluted weighted average shares outstanding 35,066 37,255

2.

RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA

(Unaudited)

13 weeks ended

(in thousands)

Mar 28, 2021

Mar 29, 2020

Net income (loss)

$

6,898

$

(150,494)

Income tax benefit

(112)

(24,748)

Interest expense and other (income), net

(575)

(263)

Depreciation and amortization

6,962

9,094

EBITDA

13,173

(166,411)

Work Opportunity Tax Credit processing fees (6)

135

135

Amortization of software as a service assets (1)

673

552

Goodwill and intangible asset impairment charge

-

175,189

Workforce reduction costs (2)

70

1,308

COVID-19 government subsidies

(1,743)

-

Other adjustments, net (3)

1,086

(6,133)

Adjusted EBITDA

$

13,394

$

4,640

2. RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA

(Unaudited)

13 weeks ended

(in thousands) Mar 28, Mar 29, 2020 2021

Net income (loss) $ 6,898 $ (150,494)

Income tax benefit (112) (24,748)

Interest expense and other (income), net (575) (263)

Depreciation and amortization 6,962 9,094

EBITDA 13,173 (166,411)

Work Opportunity Tax Credit processing fees 135 135 (6)

Amortization of software as a service assets 673 552 (1)

Goodwill and intangible asset impairment - 175,189 charge

Workforce reduction costs (2) 70 1,308

COVID-19 government subsidies (1,743) -

Other adjustments, net (3) 1,086 (6,133)

Adjusted EBITDA $ 13,394 $ 4,640

(1)

Amortization of software as a service assets is reported in selling, general and administrative expense.

(2)

Workforce reduction costs for the 13 weeks ended March 31, 2020 were primarily due to employee reductions as part of our cost management actions in response to COVID-19.

(3)

Other adjustments for the 13 weeks ended March 28, 2021 primarily include lease expense of $0.8 million incurred during the build-out phase of our Chicago office and implementation costs for cloud-based systems of $0.1 million. Other adjustments for the 13 weeks ended March 31, 2020 primarily include implementation costs for cloud-based systems of $0.5 million, offset by a $6.3 million benefit from a reduction in expected costs to comply with the Affordable Care Act.

(4)

Total tax effect of each of the adjustments to U.S. GAAP net income (loss) using the effective income tax rate benefit of 2 percent for Q1 2021 and the expected long-term ongoing income tax rate expense of 12 percent for Q1 2020.

(5)

Adjustment of the effective income tax rate to the expected long-term ongoing rate of 12 percent for Q1 2020. Beginning in Q2 2020, we decided not to adjust our GAAP tax rate in our adjusted net income (loss) calculation until our profitability rises to a more substantial level.

(6)

These third-party processing fees are associated with generating the Work Opportunity Tax Credits, which are designed to encourage employers to hire workers from certain targeted groups with higher than average unemployment rates.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210426005715/en/

CONTACT: Derrek Gafford, Executive Vice President and CFO 253-680-8214