Q4 2024 TrueBlue Inc Earnings Call
Greetings and welcome to the true Blue fourth quarter, 'twenty 'twenty four earnings call.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
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Hi, There Minder This conference is being recorded.
At this time I would like to remind everyone that today's call and slide presentation contain forward looking statements.
All of which are subject to risks and uncertainties and management assumes 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 at the SEC filings could cause actual results to differ materially from those in the forward looking statements.
Management uses non-GAAP measures when presenting financial results you are encouraged to review the non-GAAP reconciliation in today's earnings release or true Blue Dot 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 year unless otherwise stated.
Lastly, a copy of the company's prepared remarks will be provided on true blues investor website at the conclusion of today's call.
And a full transcript of the audio replay will be available soon after the call.
Parenthood: It is now my pleasure to turn the call over to Parenthood, President and Chief Executive Officer. Please go ahead.
Speaker Change: Thank you operator, and welcome everyone to today's call I am joined by our Chief Financial Officer Carlos twice.
Parenthood: We appreciate you being here with us.
Parenthood: 'twenty 'twenty four was a challenging year and I'm incredibly proud of how the team navigated with agility and discipline.
Parenthood: Our teams are doing tremendous work as customers seek improved market confidence before making significant adjustments to their workforce strategies.
Uncertainty and caution continue to weigh on the staffing industry with reduced business, Ben and curved hiring trends, but we remain focused on the areas we can control.
Parenthood: Our teams are staying highly engaged with clients to address their immediate need with short duration and flexible solutions.
Parenthood: I'll also ensuring we are well positioned to support demand estimates the expense.
For example, our onsite business stepped in to serve as a supplemental staffing provider for an international transportation and logistics company and driven by the team's exceptional service. We have expanded the serve as their primary staffing provider in four locations and their sole provider into additional facilities.
Parenthood: Another example comes from our commercial driving business, where our long standing customer requested our exclusive partnership to service their new account with a fortune 50 technology company, resulting in our expansion to 10 additional sites across the Midwest.
Parenthood: These examples demonstrate the strength of our client relationships and the agility of our teams and meeting today's need while also creating opportunities for growth.
Parenthood: 2024 was also a transformative year for Triple S. We made significant progress executing on our strategic priorities and positioning the company for strong growth and expanded profitability when customer demand volumes return.
Parenthood: We achieved a critical milestone in the digital transformation of our business with the launch of our new proprietary job stock app, allowing us to control our roadmap and continuously expand the value we bring to our customers and associates.
Parenthood: We also delivered strong performance and attractive skilled markets, including commercial driving and energy work and we made notable progress diversifying our apio business in attractive vertical such as health care and higher skilled professional placement.
Parenthood: Our actions to simplify our organizational structure, including the sale of our on demand labor business in Canada, and consolidation of our onsite and global leadership structures strategically strategically position us to better leverage our inherent strengths as we look to capture growth opportunities ahead.
Parenthood: As we turn to 2025, we remain committed to capturing market share and enhancing our long term profitability are clear strategic priorities focused on topline growth and margin expansion and as you may have seen we are off to a fast start.
Parenthood: We will continue to advance our digital transformation with a focus on enhancing the user experience and creating efficiencies.
Parenthood: Our proprietary technologies, including jobs backing up the next allow us to accelerate innovation and implement enhancements quickly to address evolving user needs.
Parenthood: For example, we recently introduced AI assistant on demand digital interviewing and self scheduling using our Phoenix technology, which has shown to reduce processing times up to seven days well job stack latest Ravi match technology instantly matches job requirements with a pool of reliable qualified individuals making.
Parenthood: It easy for customers to invite the best fit workers to the job and optimizing success rate.
Parenthood: The digital transformation of our business positions us to drive growth and expand our reach by combining our expansive market presence and expertise with our proprietary technology to deliver a more customized differentiated experience.
Parenthood: We are also focused on expanding our presence in high growth and Underpenetrated end markets as well as high value roll the capitalize on secular growth opportunities.
Parenthood: We continue to improve our strong position in skilled trades with our skilled staffing businesses outpacing the broader market in recent years as well as our workouts and apprenticeship programs, providing skill development opportunities for workers to build careers and skilled trades, while bolstering our talent pool to fill critical market gaps.
Parenthood: We have additional opportunities to drive revenue expansion with our growing momentum in healthcare and professional services.
Parenthood: Our recent acquisition of health care staffing professionals marks a key milestone in advancing our strategic expansion in the healthcare space.
Parenthood: We are excited to welcome hsp to the true Blue team as we look to realize untapped growth potential and enhanced value by combining their expertise and fast growing roster of long term clients with our significant footprint technology and recruiting agility.
Parenthood: Our people Scout team also recently announced a landmark talent advisory when having been selected as a delivery partner to provide employer brands in candidate attraction services for the U K armed forces further expanding our presence in the government sector.
Parenthood: With a traditional end markets, we serve poised for growth and our continued expansion in Underpenetrated markets, we are well positioned for a strong rebound and accelerated growth.
Parenthood: Another key priority is to optimize our business model to drive enhanced sales focus ultimately accelerate our growth and improved profitability.
Parenthood: We have simplified our organizational structure to eliminate silos and create efficiencies that brought our teams closer to each other and to our customers, resulting in increased synergies and cross selling.
For example, our people ready and people management team recently won a joint pursuit, serving our global environmental services company to staff temporary warehouse positions as well as long term supervisor skilled and administrative roles, which speaks to the strength of our teams as they work closer and collaboration.
Parenthood: Looking forward, we are focused on new and differentiated ways to enhance growth and capture demand for example, and people ready we are aligning our on demand organization into territories that include one or more branches working in collaboration to grow our customer base.
Parenthood: Sales representatives will be added across the country to implement targeted sales strategies in each territory and by the end of the summer we will have increased the number of field.
Parenthood: Sales representatives by 50%.
Parenthood: The addition of dedicated sales representatives combined with focused responsibilities for both operations and sale and complemented by the digital capabilities of our jobs back up is expected to improve results across our on demand field network.
Parenthood: We will make this investment in a cost neutral way, thanks to our disciplined cost actions to create a more simplified structure.
Parenthood: Optimizing our business model allows us to better leverage our strengths and assets to deliver long term profitable growth.
Parenthood: Well currently bear market dynamics are challenging evolving workforce needs and structural staffing shortage shortages create compelling opportunities for our business.
Parenthood: The long term staffing outlook remains positive and we are managing through the cycle with the discipline and agility needed to ensure we are strategically positioned for strong growth and profitability as conditions improve.
Parenthood: We're excited about the opportunities ahead and are confident that our strategic priorities in combination with our many strengths and assets will enable us to advance our mission to connect people and work, while delivering long term shareholder value.
Parenthood: I will now pass the call over to Carl who will share further details around our financial results and outlook.
Carl: Thank you Karen.
Carl: Total revenue for the quarter was $386 million a decline of 22% with six percentage points driven by the extra 14th week in the prior year, resulting in a 16% decline on a comparable 13 week basis.
Carl: As expected temporary labor and permanent hiring volumes continue to be suppressed as clients remain uncertain.
Carl: Workforce needs and cautious around business back.
Carl: While these factors led to overall softness in market demand our teams continued to capitalize on growing verticals.
Carl: For example, our commercial driving services delivered double digit growth for the second consecutive quarter and our people Scott team continued to outperform prior year, new business wins, especially in professional Walsh.
Carl: Gross margin was 26, 6% for the quarter up 50 basis points.
Carl: Lower workers' compensation costs, driven by favorable development of prior year reserves contributed a 170 basis points of expansion.
Carl: This was partially offset by changes in revenue mix with more favorable trends in our lower margin people management segment as well as the decline in our highest margin business people Scott.
Carl: Which drove a decline of 80 basis points.
Carl: Pricing pressures consistent with the current market environment contributed another 20 basis points of the decline in software depreciation now recorded in cost of services drove another 20 basis points of decline.
Carl: Keep in mind software depreciation is noncash and excluded from our EBITDA and adjusted EBITDA calculations.
Carl: We reduced SG&A by 18% as we remain disciplined and committed to enhancing our profitability.
Carl: With the transition to our proprietary job stack App, we accelerated the recognition of third party software licensing fees associated with the previous version, resulting in $6 million of additional noncash expense in the fourth quarter.
Carl: This accelerated expense as well as other costs associated with upgrading our legacy people ready technology are excluded from our adjusted net income and adjusted EBITDA calculations.
Carl: Adjusted basis, we reduced SG&A by 24% output.
Carl: Outpacing our revenue decline as we continue to focus on areas, we can control.
Carl: While our profitability can traditionally expanse quickly as revenue grows our lean cost structure and improved efficiencies mean that we are even better positioned to deliver enhanced profitability as the demand environment rebounds.
Carl: We reported a net loss of $12 million this quarter, which included $2 million of income tax expense, primarily associated with our foreign operations and essentially zero income tax benefit on U S operations due to the valuation allowance and effect on our U S deferred tax assets.
Carl: As a reminder, the valuation allowance has no impact on our operations liquidity or debt covenants.
Carl: Adjusted net loss was $1 million, while adjusted EBITDA was positive $9 million.
Carl: Now, let's turn to the specifics of our segments people ready revenue decreased 21% on a comparable 13 week basis.
Carl: Which includes two points of decline from the sale of our on demand business in Canada.
Carl: Or 14th week in the prior year contributed six points of additional year over year decline, resulting in reported revenue decline of 27%.
Carl: Lower client volumes continued across most verticals and geographies.
Carl: We have yet to see a meaningful shift in our overall sequential trends, but we are encouraged to see momentum building in skilled trades with an improvement to underlying trends as we exited the quarter.
Carl: People ready segment profit margin was up 80 basis points, largely driven by favorable workers compensation reserve adjustments, which were partially offset by lower operating leverage as revenue declined.
Scott: People, Scott revenue decreased 30% on a comparable 13 week basis.
Scott: Which includes eight points of decline from the client loss, we discussed last quarter.
Scott: The extra 14th week in the prior year contributed one point of additional year over year decline, resulting in reported revenue decline of 31%.
Scott: We saw reduced client volumes as businesses continue to navigate challenging market dynamics.
Scott: Customers are hesitant to make significant investments in their workforce strategies as they faced cost pressures and uncertainty around their workforce needs.
Scott: These factors led to subdued client volumes, our teams continue to outperform and new business wins, and we expect these relationships to drive further revenue expansion.
Scott: As customers hiring volumes return.
Scott: People Scoff segment profit margin was down 220 basis points due to the lower operating leverage as revenue declined.
Scott: People management revenue decreased 2% on a comparable 13 week basis with the extra 14th week in the prior year contributing seven points of additional year over year decline, resulting in a reported decline of 9%.
Scott: The decline in demand was driven by lower onsite client volumes consistent with the macro conditions in the verticals we serve.
Scott: This was partially offset by continued strength in our commercial driving services, which delivered its second consecutive quarter of double digit growth.
Scott: Management segment profit margin was up 220 basis points, primarily due to disciplined cost management actions to drive improved efficiencies.
Scott: Now, let's turn to the balance sheet, we finished the quarter with $23 million in cash $8 million of debt and $119 million of borrowing availability.
Scott: We are diligently balanced strategic investments and returning excess capital to shareholders with maintaining a strong liquidity position to pursue growth opportunities.
Scott: This focus capital strategy enabled our recent acquisition of health care staffing professionals, where we leveraged our strong balance sheet to take on a modest amount of debt on attractive terms to capitalize on the strategic opportunity.
Scott: Health care staffing professionals or.
Scott: Or hsp was purchased on January 31, $42 million with the possibility of an additional $14 million of consideration. If favorable results are achieved over the next two years, we expect the hsp business to produce segment profit of $5 million to $7 million over the next 12 months, which corresponds with a forward looking multiple of six to eight times.
Scott: We're excited to bring <unk>, the true Blue Ford portfolio, as we work together to accelerate growth and enhance shareholder value.
Scott: Turning to our outlook for the first quarter, we expect a revenue decline of 13% to 7%.
Scott: This includes one percentage point of headwind from the sale of our on demand business in Canada offset by three percentage points of inorganic growth from the acquisition of HSBC.
Scott: Our outlook reflects a continuation of current market trends because while there are encouraging signs for the new year, we've yet to see a definitive indication as to when overall demand trends will turn.
Scott: We expect SG&A of $93 million to $97 million, which represents an improvement of roughly $12 million compared to the prior year period.
Scott: As we manage through this market cycle with a commitment to enhance our profitability and to ensure that we are well positioned as conditions improve.
Scott: Additional information on our outlook can be found in our earnings presentation shared on our website today.
Darren: Before we open up the call for questions I want to turn it back over to Darren for some closing remarks.
Speaker Change: Thank you Carl as you have heard from US today, we remain committed to advancing our strategic priorities and managing through this challenging market cycle with the agility and discipline needed to ensure we are positioned to capitalize on the growth opportunities ahead.
Speaker Change: We're confident that we have the right people technology and resources to drive our strategic priorities forward enhancing shareholder value and advancing our mission to connect people and work.
Speaker Change: This concludes our prepared remarks, operator, please open the call now for questions.
Speaker Change: Okay.
Speaker Change: Thank you well now be conducting a question and answer session. 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'd like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up your handset before.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Our first question is from will Burnham with Northcoast Research. Please proceed with your question.
Will Burnham: Hey, How's it going guys.
Speaker Change: Hi will.
Speaker Change: So congrats on the Hsp acquisition I was going to ask you. Your press release, you referred to <unk> high growth and I was wondering if you could tell us a little bit more specifically about your expectations on revenue growth.
Speaker Change: What hsp's growth has looked like in recent years and how the pressures that are in the health care industry has experienced plays.
Speaker Change: Into expectations.
Speaker Change: Thank you for the question will we are thrilled to welcome the <unk> team and customer base to true Blue.
Speaker Change: The healthcare staffing market has seen some pressure over the last couple of years and aging population and secular growth offer long term potential opportunity is making health care, an attractive end market for true blue that we're excited to participate in.
Speaker Change: HFC has outperformed the health care industry growth rates over periods of both expansion and contraction and we feel really good about their ability to continue that trend.
Speaker Change: They have long term clients many of which are in the government and educational sectors, which typically provide more stability through various market cycles and then finally.
Speaker Change: <unk> strong track record and niche service in the healthcare space opens doors for us at <unk> to expand into new markets. While at the same time, our geographical footprint technology and recruitment sophistication will help accelerate hsp's potential growth opportunities.
And just to add a little onto their two as Youre talking about revenue we put this in the investor deck as well, but just over the next 12 months we.
Speaker Change: We will have about 11 months of impact in 2025, well, but we think anywhere between 75 and $85 million of revenue and about $5 7 million of EBITDA.
Speaker Change: Really in the high single digit margins higher than our traditional staffing businesses today.
Speaker Change: Okay great.
Speaker Change: Alright, I just have one more for you if you could provide.
Speaker Change: <unk> some more details about the U K armed forces contract.
Speaker Change: The revenue potential of the length of the contract and the margins as well.
Speaker Change: Yeah. Thanks, well, we're very happy to report that people Scout talent advisory team secured.
Speaker Change: What is the significant new wins to provide employer brand in candidate attraction services for the U K armed forces will be one of several delivery partners for Serco, which is an international provider of government services and this is part of a multiyear contract.
Speaker Change: Scope that we have here include their recruitment marketing to fill the pipelines for hires across the U K armed forces. If you think about the British Navy Royal Navy and the Royal Air Force are included here.
Speaker Change: 2025, and 2026 will be transition years with implementation work where.
Speaker Change: Where we will see some revenue, but the full service of the contract will begin in 2027.
Speaker Change: It's a seven year contract with an option to extend for an additional three years. After that initial period in terms of deal size, we expect them to be one of our top clients within people Scout Theres. Some media revenue within scope, which comes at a bit of a lower margin, but the deal.
We will be certainly a contributor to bringing people scout back to a double digit segment profit margins.
Speaker Change: Alright, great. Thank you guys I appreciate it.
Speaker Change: Thanks will.
Speaker Change: Okay.
Speaker Change: Our next question is from Mark Marcon with Baird. Please proceed with your question.
Mark Marcon: Good afternoon, and thanks for taking my questions.
Mark Marcon: Wondering with regards to the people ready business can you discuss any sort of regional differences.
Speaker Change: Differences that you are currently seeing any signs.
Mark Marcon: Of improvement.
Mark Marcon: Certainly seems small business confidence index indices.
Speaker Change: Prove just wondering if youre seeing any of that translate to revenue at all.
That's the first question.
Mark Marcon: Thanks for the question Mark Yeah, Let me just talk kind of revenue trends.
Mark Marcon: So far and then I'll, let kind of turn add some color in there as well.
Mark Marcon: As you kind of know our largest geographic opportunities, California, Florida, Texas right. That's about a third of people ready as trailing 12 months revenue our trends in California, Texas, We're pretty closely aligned to what we're seeing in our end markets.
Mark Marcon: But we are seeing some improved trends.
Mark Marcon: Florida during Q4, and we've also seen kind of some bright spots in specific markets that have not been impacted by weather throughout the country.
Mark Marcon: If I could add to that Mark we are encouraged by some positive trends that we're seeing within people ready here and are in the new year, where weekly sequential revenue trends have improved in February after a slow start in January.
Mark Marcon: Which was really impacted by the holiday as well as some significant weather that we've seen also important to note that we're seeing some increased growth in our southern border states along with a handful of other pockets around the country we.
Mark Marcon: We believe that the focus on migration issues with the new administration has impacted our demand trends positively over the last month.
Mark Marcon: Our teams in those areas are reporting that our clients are experiencing some high absentee rates and turning to us to fill those jobs. So.
Mark Marcon: A couple of weeks of data, but we're certainly encouraged by those signs.
Speaker Change: Sharon could you expand on that a little bit just in terms of.
How widespread that is and how much of a volume benefit you are getting in some of those particular regions.
Mark Marcon: Let me maybe I'll just add on this one first Mark look I think it's from a first couple weeks of February right.
Mark Marcon: They are back kind of in line with sequential trends, which is a good thing after we talked about kind of that weather and holiday impact in January.
Mark Marcon: From an outlook standpoint, I would say if we see this continue there could be some upside to our outlook, but I think it's still too soon to call. This a trend as you know.
Mark Marcon: What we're seeing.
Mark Marcon: It's hard to it's only a couple of weeks in February here Yeah.
Mark Marcon: Okay and then.
Mark Marcon: Speaking of.
Mark Marcon: Things that have been in the news obviously, there's been a tragedy in southern California.
Mark Marcon: Parts of it.
Mark Marcon: Western Carolina are still.
Speaker Change: Dealing with with all sorts of issues did you see any sort of pickup in terms of business in terms of remediation of those disasters or.
Speaker Change: Are you not participating in that.
Mark Marcon: Yes. Thank you for the question Mark.
Mark Marcon: Participating in that are people ready business provides on demand support in disaster recovery efforts, we are working to support those efforts and North Carolina, and Florida and in California. We have started the work now we're working with Ford.
Mark Marcon: 14 different organizations that are focused on those cleanup effort. Then we would expect in the upcoming months and California's construction plans are approved and permits are awarded that people ready skill trades will play a role in the restoration and rebuild there in California, as we are in Florida, and North Carolina.
Mark Marcon: Okay.
Mark Marcon: Great and then any sort of commentary from.
Mark Marcon: From an industry perspective in terms of areas of.
Mark Marcon: Particular strength or weakness, particularly as it relates to two people ready.
Mark Marcon: Well I'd say one thing just as the skilled business for US continues to be a bright spot right. We talked about this a little bit in prepared remarks as well.
Mark Marcon: Kind of what we're doing in energy and then I'd also say transportation to from an end market. So I think transportation and distribution not just in people ready, but across the portfolio for us has been.
Mark Marcon: Doing better than in Q4, and we've got a good foothold in that market and industry and expect for that to continue for us.
Mark Marcon: Great and then just lastly on the SG&A.
Mark Marcon: Did a nice job in terms of.
Mark Marcon: Reducing your SG&A expenses can you talk a little bit about the actions that you ended up taking.
Mark Marcon: Is that something that we should expect to stabilize as the year unfolds or how should we think about that.
Speaker Change: Yes. Thanks for the question on that one to Mark. So we did we over performed a little bit of what our guidance was here in Q4, I think by probably a point I think our adjusted.
Speaker Change: SG&A was expected to be about down 23, and we ended up being down 24. It is important to note that there was from a GAAP basis just about.
Speaker Change: About $6 million of third party software licenses that.
Speaker Change: Hit in Q4 that will be noncash in Q4, an adjustment to EBITDA.
Speaker Change: But as Youre thinking about the longer term, we have guided to about a midpoint of $95 million, which is down about 11% that includes about $1 million of SG&A for our hsp acquisition.
Speaker Change: I would say is as we kind of look forward to the year, we will make some selected investments as we find some opportunities for growth, but nothing material. So I think that's a pretty good run rate from a cost standpoint. You also asked just kind of where these have been similar to what we've talked about this is about simplifying the organization not necessarily our field teams are closest to our.
Speaker Change: <unk> and our associates.
Speaker Change: Really looking at kind of support structure and others that we've mentioned where we've taken action.
Speaker Change: If I could just add to that one of the opportunities that has come from us is our ability to.
Speaker Change: Re align our people already on demand organization into our sales territories in a cost neutral manner. So each of our territories will be under single leadership with a dedicated sales representatives here moving forward. Those territories are gonna be comprised of one branch or multiple branches work.
<unk> together.
Speaker Change: Two to grow our customer base so.
Speaker Change: If you think about we have 480 branches today those will be organized into 360 territories as we move forward and we will increase our sales head count out in the field by 50% by by mid summer and again some of the cost actions that we took of have enabled us to do this.
Speaker Change: Great. Thank you.
Bernard: Thanks Bernard.
Speaker Change: Yeah.
Speaker Change: Our next question is from Jeff Silber with BMO capital markets. Please proceed with your question.
Speaker Change: As Ryan on for Jeff just to start off with a quick numbers question. I was wondering if you could quantify the revenue guidance by the different segments. And then also if you had the exit rates coming out of the quarter.
Speaker Change: Yes, Thanks, Ryan for the question, so I'm going to just give kind of the mid points here right. We were minus 13 to minus seven from a true blue standpoint that the midpoint of minus 10 for true Blue is.
Speaker Change: Important to note that that includes a positive three point impact due to the acquisition of Hsp at.
Speaker Change: At the end of January.
Speaker Change: But the mid points for each one of our segments people ready down about 16%.
Speaker Change: Management down, 3% and people scout down 27%.
Speaker Change: Just another a couple of two other reminders and there are Canadian divestitures, approximately one point of headwind for both true blue and people ready and we're going to lapse over those comps as we exit Q1 here.
Speaker Change: And then also the hospitality client loss that we discussed last quarter creates about a one point headwind for true blue and about eight points for people Scout, which we'll lap those comps as we exited Q2 as well.
Speaker Change: Got it thank you very much and then.
Speaker Change: Just piggybacking.
Speaker Change: On one of the prior questions I was curious if youre seeing a.
Speaker Change: Material impact yet from from some of the Trump policies regarding deportation and then if you have any outlook on how that might kind of trend as we progressed through the year. Thank you.
Speaker Change: Yeah. Thanks. Thanks, Ryan in addition to what I talked about earlier related to the people ready business and some of that demand that we're seeing due to increased absentee rates.
Speaker Change: We have customers across multiple industries that are increasingly performing internal audit to ensure that their workforce complies with the current regulations, many customers and prospects are increasingly looking to true blue to ensure that they have a workforce that is authorized to work in the United States and this has led to some of the new one.
Speaker Change: And momentum that we're seeing particularly in our onsite business.
Just a note in our onsite business, we've actually closed more deals in 2025 than in all of 2024, and we think that the.
Speaker Change: Yes.
Speaker Change: I'm focused on ensuring that the workforces meet the policy is contributing to that.
Speaker Change: And maybe just to add on to that one too Ryan just from a kind of a carrot perspective in a short term look we don't know how this is going to play out but there could be some increases in input costs other supply chain challenges that might affect some some labor needs for our customers, but just as a reminder, triple who has got about 25% exposure across our brands in manufacturing and this is what we are good.
Speaker Change: To support his onshore manufacturing here.
Speaker Change: And so we feel good about the long term nature of where we're positioned.
Speaker Change: And what that ultimately can do for our business.
Speaker Change: Understood. Thank you very much.
Ryan: Thanks Ryan.
Thank you. Our next question is from Marc Riddick with Sidoti. Please proceed with your question.
Marc Riddick: Hey, good afternoon.
Speaker Change: Hi, Mark.
Mark Marcon: So wanted to touch a little bit on the acquisition and congratulations on an on Hfcs I wanted to touch a little bit.
Mark Marcon: More bolt on the attractiveness of the health care market, which which seems.
Mark Marcon: Seems encouraging I think also there is a regional mix component.
Mark Marcon: That's expected to be beneficial and then maybe on a broader scope you can maybe spend a little time on thoughts around the current.
Mark Marcon: Maybe what the acquisition pipeline looks like within the space and maybe levels of attractiveness at this point.
Speaker Change: Yes. Thanks, So we're excited about this one and thanks Mark.
Speaker Change: I would just add this rate hsp is gonna be immediately accretive to our financials right from a P&L and a cash flow standpoint.
Speaker Change: We took on.
Speaker Change: A bit of that here on a variable term loan that will carry you know anywhere from 6% to 8% interest.
Speaker Change: So think about a couple of million dollars $2 million to $3 million of interest expense a year.
Speaker Change: And this business should be able to generate anywhere between $5 7 million of EBITDA.
Speaker Change: Also just from a kind of a synergy standpoint. This is all this would all be kind of upside to our kind of initial valuation. We think that there is a lot of opportunity with our expansive recruiting network within our people scale business to help assist and fill their exclusive open orders in the longer term, we think that theres some opportunities to join <unk>.
Speaker Change: Bid on non health care roll So think of what we're really good at and are people ready business janitorial and cafeteria type works with their current and future prospects and I would also say just from.
Speaker Change: A cost synergies perspective, anything that we'd be able to save here really the intent would be redeploying any of those savings into additional investments and growth resources to help accelerate the growth trajectory that <unk> been experiencing.
Speaker Change: Great and then I was wondering if you could spend a little time talking about sort of the progress you're making with the with the job stack rollout. Thanks.
Mark Marcon: Yeah. Thanks for the question Mark.
Mark Marcon: As you know last year, we successfully rolled out our new proprietary Java jobs Act, app, which really positions us well to control our roadmap and ensure that we are addressing.
Mark Marcon: The needs of our of our users our roadmap for 2025 includes significant enhancements.
Mark Marcon: Designed to increase operational efficiency improved sales effectiveness and drive revenue growth.
Mark Marcon: By delivering just a continued enhanced customer experience just a couple of things that that I'll call out that have been successes so far.
One we rolled out our ready match technology within job stack that instantly matches job requirements with a pool of candidates. It makes it really easy for both our customers and our field to invite best fit workers to the job well.
Mark Marcon: We launched our digital Onboarding experience that allows our candidates to quickly join our workforce. We're also able to now onboard customers in a completely digital manner. If that is the way in which they choose to engage with us.
Mark Marcon: Our customers are able to enter orders are in it in a digital manner and have immediate access to our associate base and <unk>.
Mark Marcon: Finally, we've also added a customer and associate referral program that allows both our customers and associates to refer to people ready.
Mark Marcon: Excellent. Thank you very much.
Mark Marcon: Thank you Mark Thanks, Mark.
Speaker Change: Thank you there are no further questions at this time I would like to hand, the floor back over to Terry Owen for any closing comments.
Speaker Change: Thank you operator, and thank you everyone for joining us today I want to take another moment to welcome our newest colleagues at Hsp to the true Blue team. We're excited to have you on board and look forward to working together I also want to take this opportunity to thank the entire true-blue team for their tremendous efforts in providing our customers and associates.
Speaker Change: Yes, with exceptional service and their dedication to advancing our mission to connect people and work.
Speaker Change: We look forward to speaking with you all at upcoming Investor events and on our next quarterly call. If you have any questions. Please don't hesitate to reach out and have a great evening.
Speaker Change: This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.