EHS Investments urges TrueBlue board changes after stock declines

EHS Investments, which owns 2.4% of TrueBlue Inc. shares, sent a public letter to the staffing company's board outlining concerns about persistent underperformance and governance issues.

The investment firm cited TrueBlue's shareholder returns of negative 56%, 69%, 63% and 74% over two, three, five and 10-year periods respectively. EHS attributed the poor performance to capital allocation failures and operational missteps.

Since 2013, TrueBlue has spent nearly $490 million on acquisitions that were later written off or impaired, according to the letter. The company's EBITDA declined from $72 million in 2012 to $11 million in 2024. TrueBlue also repurchased over $300 million in stock since 2016 at an average price of $20 per share, compared to the current share price of $6.

EHS highlighted TrueBlue's recent acquisition of Healthcare Staffing Professionals, which generated $16 million in second-quarter revenue versus management's $20 million guidance. The firm projects HSP will deliver approximately $60 million in first-year revenues, below TrueBlue's promised range of $75-85 million.

The letter noted TrueBlue's market share in light industrial staffing dropped from roughly 7% to 5% between 2019 and 2024. The company's client count for its PeopleReady division declined 64% from approximately 150,000 in 2018 to 54,000 in 2024.

EHS proposed a 10-point turnaround plan including a moratorium on mergers and acquisitions, sales force reorganization focused on small and medium businesses, branch network investment, selective franchising, geographical realignment, and improved cost management.

The investment firm called for board enhancements, including shareholder representation, and suggested TrueBlue consider strategic alternatives if no progress occurs within a year. EHS projected potential EBITDA of $180 million and earnings per share exceeding $5 by 2030 if the industry recovers and the company executes its turnaround plan.

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