Good day, everyone, and welcome to TrueBlue's conference call. Today's call is being recorded. Joining us today is TrueBlue's CEO, Steve Cooper; and CFO, Derrek Gafford. They will discuss TrueBlue's 2013 First Quarter Earnings Results, which were announced today. At this time, I would like to hand the call over to Stacey Burke for the reading of the Safe Harbor. Please go ahead, Ms. Burke.

Thank you. Here with me today is TrueBlue's CEO and President, Steve Cooper; and CFO, Derrek Gafford. They will be discussing TrueBlue's Q1 2013 results, which were announced after market closed today. Please note that slides providing additional background on our results were included in our 8-K filing today. The company's press release, the accompanying financial statements and the results slides are now available on our website at www.trueblue.com. Before I hand you over to Steve, I ask for your attention as I read the following Safe Harbor. Please note that on this conference call, management will reiterate forward-looking statements contained in today's press release and may make or refer to additional forward-looking statements relating to the company's financial results and operations in the future. Although we believe the expectations reflected in these statements are reasonable, actual results may be materially different. Additional information concerning factors which could cause results to differ materially is contained in the press release and in the company's filings with Securities and Exchange Commission, including our most recent Form 10-K. I'll now hand this call over to TrueBlue's CEO, Steve Cooper.

Thank you, Stacey. Hello, everyone. Today, we reported 2013 first quarter revenue grew 11% to $346 million. The first quarter results include the acquisition of MDT Personnel. The integration has gone well. All sales and service operations integration is complete and the support center integration is on track to be completed during the second quarter. We quickly integrated our teams in the field and closed 65 offices with great success. Given we integrated so quickly and seamlessly, we cannot break out our results separately between our core business and our acquired business. What I can say though, is the combined business is performing well. And as you can see in our results today, our revenue came in at the high-end of our estimates, which is related to how well our blended teams are performing. As we discussed at the beginning of the quarter, our results also include the impact of our work with Boeing slowing. Net of our revenue from Boeing, we experienced growth of 19% in Q1. For the second quarter, our estimated revenue growth of approximately 19% also includes the impact of acquired business from MDT. Net of our business from Boeing, we are estimating Q2 revenue growth of 23%. We are pleased with the growth we are experiencing, and feel our teams across all areas of our service are taking advantage of a solid business environment where demand is strong. We saw steady growth in demand for our services across most industries and locations. And we are especially encouraged by an increase in construction activity. Our recent growth across a broad mix of business is building a more sustainable revenue string for us. The increased business activity we are seeing in our results indicate positive signs for business improvement this year. Derrek will walk through more details regarding our results of gross margins, operating expenses and our adjusted EBITDA results and expectations. Although it is somewhat difficult to clearly see the details of the impact of mix of items creating our results, we are estimating for the year as a whole, adjusted EBITDA margins will be equal or slightly better than EBITDA margins in 2012. Without the impact of the Boeing project, our EBITDA margins would not have only held strong, they would expand 50 basis points during 2013. And as we move into 2014, we expect to see further expansion in our EBITDA margins, as a result of the leverage gains from our core business growing, and the synergy impact of this significant acquisition in 2013. I will now turn the call over to our CFO, Derrek Gafford, for further analysis. After which, I will make some comments regarding our growth opportunities. Derrek?

Thanks, Steve. I'll start off today with a high level discussion of this quarter's results, followed by an update on the integration of the MDT acquisition, then we'll jump into a deeper discussion of our business trends and expectations for the future. In my commentary, any reference to our performance is based on a comparison to the same period a year ago unless stated otherwise. Revenue of $346 million was at the high-end of our expectation driven by additional revenue spread across the business. Diluted loss per share of $0.03 was lower than our high-end expectation of breakeven, due to lower gross margin and timing differences of nonrecurring acquisition costs. Now I'll speak to our Q1 profitability compared to the same period last year on an adjusted EBITDA basis, which excludes nonrecurring costs from the MDT acquisition. Q1 adjusted EBITDA of $2 million was $5 million lower than Q1 last year. The decline is largely due to a $20 million expected drop in revenue from Boeing in Q1 this year, resulting in $4 million less in adjusted EBITDA. There's also $4 million of less adjusted EBITDA due to more expense in our organic business. However, $2 million of this expense is temporary and will not be present after this quarter. As a reminder, on MDT, while the acquisition is accretive to adjusted EBITDA for 2013, its impact to Q1 is neutral due to MDT's seasonally lower revenue and related profitability. Now let's talk more about the MDT acquisition. In February this year, we purchased MDT, which was an industrial staffing company very similar to our Labor Ready business. It's a great addition that significantly increases the scale of our general labor presence and the size of our field-based talent pool. From an integration perspective, substantial progress has been made. We…

Great. Thanks, Derrek, for the analysis on the first quarter and our second quarter outlook. Growing adjusted EBITDA 20% in 2013 in the midst of winding down the large project with Boeing is a great result for our team. As you have heard here today in our estimates, the current economic climate allows us to continue to pursue further acquisitions, while we also aggressively pursue organic growth through the execution of our sales strategies. Our main criteria for selecting acquisition opportunities continues to be: First, ensuring it fits our strategy; second, can we get the expected ROI on the opportunity; and third, can we integrate the target into our organization to ensure all our objectives are met, especially expanding opportunities to better serve our customers. There seems to be an adequate supply of opportunities available for us to continue to seek growth through acquiring strong companies that will expand our vision to be the leading provider of blue-collar staffing. We are even more encouraged by opportunities to grow our revenue organically. We are encouraged by the new housing starts we are beginning to see. We remain well equipped and ready to serve contractors as new housing starts develop and show growth. Our overall construction revenue is approximately 40% lower than our peak prior to the recession 5 years ago. This is approximately $170 million of revenue difference, which could produce $25 million to $30 million of additional EBITDA, should we return to that peak revenue in construction. During 2012, our construction gross margins were over 4% higher than the average of all other business combined. Construction remains a very promising upside for us. We are seeing our strategies in 2 areas work well. First, our sales and service strategy, it has expanded over the last few years to bring more…

[Operator Instructions] First question we have comes from the line of Paul Ginocchio of Deutsche Bank.

Just a couple of sort of housekeeping questions. I know you're not commenting on organic revenue growth, but maybe you could just make a comment. I think you were organic ex-Boeing was around 5% in the fourth quarter. My calculations, based on your last quarter's comments and the revenue at MDT, I would have thought revenue growth was up 2 to 3 points organically in the first quarter versus the fourth quarter. Does that sound about right? Then, just a couple of follow-ups. You made a mention of workers' comp. Can you -- what was workers' comp expense in the quarter? And can you give the all-in construction growth rate in the first quarter, just remind us what it was in the fourth quarter.

Yes. Yes, thank you, Paul, for that. Yes, we didn't comment on the organic growth because it would be a bit misleading since we blended those teams so quickly along the way. But with the strong growth of the quarter and then we throw in how much of the Boeing revenue backed off, I believe the organic growth is closer to 5% to 6%, not the 2% to 3%. Again, it's an estimate of where we need to be.

Yes, I'll hit these other 2 here, Paul, and just to follow-on to Steve's comment. Boeing came in about $2 million or $3 million more than we expected. So it -- all of our upside wasn't from the organic portion of the business. So that's why we're still settling on the 5% expectation that we thought we hit this quarter. Work comp. Your second question was what it was for the quarter. It was 3.8% of revenue. And then in regard to construction. Our construction trends have been pretty similar to what they were last quarter. And I think the best measure here is understanding what's going on in our Labor Ready business that was running construction, that's running in the low teens or so last quarter, and very similar growth trends this quarter.

When you say low teens, that's a percentage exposure?

No, that's -- it's a growth rate.

Okay. Sorry, Steve, when you talked about the organic growth, I thought it might be -- your organic growth rate might more like be 6%, 7% in the first quarter, it sounds like it's 5% or 6%.

Yes. You just got it. I'm just saying that, that $6 million beat, we had $3 million in Boeing. So if you take [indiscernible], you're going to end up back closer to what we said last quarter.

Okay. Great. And, Steve, it sounded like you're a little more -- obviously, MDT is going well. It sounds like you're a little more excited about acquisitions. Do you think you would wait a few more quarters to make sure MDT is bedded down right before you do anything? Or are you preparing us for something sooner than that?

No, no. I think it's just an overall environment that we see ourselves in. I think that the fact that we closed MDT, and we're successful with it, it did 2 things: One, it brought confidence to other sellers that their businesses would be treated similar and that they have an exit plan. And it has definitely kicked in a lot of conversations with sellers that we have been tracking for years, and even some new ones. And they're great conversations for us to start analyzing and try to determine where to go next.

If I could sneak -- sorry, is there investor presentation this quarter, Derrek, or there isn't? I can't find it.

Well, there's a slide deck on our earnings results, Paul, that's out, that was filed with the 8-K. So that's out there.

Your next question comes from the line of Kevin McVeigh from Macquarie.

You were pretty clear on the component. Can you just run through the component to the SG&A again, where it was heavy, just the 3 components of the $6 million to $4 million. And then I think it was $6 million again and just how that lays out?

Sure. I think what you're referring to is the year-over-year SG&A growth breakdown I gave. So SG&A for Q1 was $16 million higher than Q1 last year and that breaks down into 3 categories. The first is ongoing operations from MDT, that's an estimate but that's probably pretty close. So this is on ongoing operations of running the business. The second bucket is $4 million of nonrecurring costs. This is related to doing the deal, the integration, et cetera. And then the third is $6 million of cost in our organic business, $2 million of which is related to our tax benefit and processing fees and a few other miscellaneous items that will drop out of our run rate going forward. $6 million, $4 million and $6 million.

Got it. So as we think about Q2 coming off, is it $8 million that will -- rather $10 million that recurs, if you will, based on those 3 components?

Yes. It's a little bumpy understanding the run rate because we've got nonrecurring costs in both quarters. And I think the best thing, Kevin, is give that SG&A range that I gave in my commentary, as far as a percentage of revenue as your guide post.

Got it. And then, Derrick, as you commented about the $85 million of adjusted EBITDA, is that relative to where consensus was at $81.3 million or is there -- is that apples-to-apples? Or are there other adjustments in that $85 million that we should factor in as we bridge it to consensus? I guess what I'm saying is you're suggesting there's upside to the $81.3 million or are there one-time items that bridge to the $85 million?

Well, it's hard for me to comment exactly on consensus because some consensus has one-time in and some has it out. But what I can comment to, Kevin, is that what we talked about last quarter was $85 million of adjusted EBITDA. And our breakdown of really, of what that is and what it's comprised of, that has not changed since we talked last.

Next question comes from the line of John Healy.

I wanted to ask Steve about some of the comments you made on acquisitions. I think the second thing you pointed to was the ROI would have to fit your criteria. And I was hoping you could give us a little bit of color in terms of how you guys are measuring that, as well as kind of how you guys are thinking about accretive dilution, timing, and how all that can play out in terms of how you size some of these opportunities.

All right. Yes, thanks, John. We really look at a cash-on-cash return on that. And that's probably our largest major in the -- the largest driver is what we believe that cash-on-cash return can be. And therefore, in the MDT transaction, where we assume some debt and the cash is paid out 10 years later, that drives great ROI on that, it gives us the ability to leverage the rest of our balance sheet better. Everyone, obviously, is different because we have to assess risk. What's the risk of integration? What's the risk of loss? What's the risk of something happening there? And obviously, with the more risk, the higher ROI we have to start with. So we don't have one target number that we look at. When it comes to whether it's accretive are not to EPS, that's probably one of the later decisions that we consider. It's really not a financial driver of great returns for shareholders. We're more in, that's why we speak to EBITDA. It's a little bit closer, a proxy for cash flow, not exactly, but closer than the EPS is, for sure. So whether we're taking on additional amortization or something like that doesn't usually drive our decision. We look a lot closer to the cash-on-cash returns.

Is there a minimum threshold on the cash-on-cash return on ROI that you do need to see before you pull a trigger on a deal?

I wouldn't -- well, obviously, our own internal -- where we are on our own return on equity starts coming into play. That will be have to be a really risk-free deal though, for us to pay close to our own ROE. Why wouldn't we just buy our own stock? Why wouldn't we just make the investment back in ourselves? And so, we're trying to get a spread there off of that and again it has to be risk assessed, how much work of integration and risk of keeping the teams and the customers focused and growing. The more risk, the higher that needs to be. And we planned it, some with high ROIs and we executed well on them. But we've also brought some in that have lower ROIs but they were easy to integrate and they didn't have as much risk associated with them.

That's fair enough. Had 2 housekeeping questions for Derrek. I might have missed it, but did you say, Derrek, what the WOTC credit from '12 was that hit in the first quarter? And then how should we think about MDT's revenue maybe in 2Q '13 -- 2Q '12 last year in terms of just thinking about kind of the baseline to compare future results to how the 2 businesses might have performed a year ago?

Yes. So it was -- with WOTC, there is $3 million of benefit in our income tax expense this quarter. So you can kind of use that, you take that out and you'll see our underlying rate is pretty close to 35, which is where we think we'll be on an ongoing basis here this year. When it comes to MDT revenue, Q2 last year, I mean, we just haven't really talked about where the revenue was last year for a variety of reasons. I think that the right thing to do here is to focus on our guidance for the quarter. One way you can get some comfort around the guidance here is that we were growing at 17% in March of this year and that's with MDT all in. And our revenue forecast for Q2, which we shared with you here today, is 19%. So that gives you, I think, the best idea of where the momentum is in the business, and certainly, MDT is a big part of that.

Next question comes from the line of Mark Marcon of Robert W. Baird. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: I was wondering if you could talk just a little bit more with regards to the technology improvements that you're implementing across the system. What percentage of your offices now seem like they're up to where you're at least, your testing capabilities were, when we talked about it last quarter?

Right. Well, thank you for that, Mark. Really, it's broader than just what's going on inside of our branch network. Over this last 5 years, we have acquired PlaneTechs, they do all of their business out of one office. We acquired Centerline group, that's growing quickly, and they have a mixture of how much is done from one central location versus what the sales team and the recruiters do out in the field. And they try to push as much of the operations or the support back into one centralized location. And we're learning inside of our branch network that we can pull certain customers out of that network and serve them better from a central location. And so, roughly 7% or so, maybe 5 years ago in the Labor Ready brand was served from a central location here in our support center. And that's grown to be close to 25% of our accounts are handled in service by national accounts in a generalized way. So that's really where it starts. And now, we are out there in the field seeing how can we take some of these ideas that have been powerful and move them closer to the local selling opportunity? So when you have a large national account that expands across the territory or a large vertical account, it's really easy to centralize the service. It's easier to centralize the service for that one account. Now we're on the hunt to say, well, all of the local businesses, how could we support it more centralized? And so, making sure that we're breaking down those processes that are performed inside the branches properly. And then, ensuring that we can move them out. And so, your question is really good. I just wanted to answer a broader picture there so…

Yes. Absolutely. If we can be in touch with the workforce and they've got a cell phone in their pocket wherever they are, and we can contact them and ask them if they're ready to go to work to a location, close to either where they are or we know where they live, tomorrow, do you want an opportunity close to your house? Removing that necessity to be in the branch to get an assignment is increasing the population of those that are willing to work for us. It's a huge, huge barrier that has been in play. And now, we are finding an opportunity to gather up a different workforce. That changing dynamic, I don't know where that one settles, Mark. All I know is it's net-net-net positive all the way around, better workforce, more capable, more mobile, more of them. And they fulfill the customers assignments better. So that's on the revenue side and the recruiting side. I believe it's powerful. The cost side. Well, that's where we're really embarking because now this technology is been really used right where you're asking your question. And I think over the next 3 months, we will know more. We knew this coming summer was our big time period to have these tools out there, right aimed at that population you're talking about. And I think as we let another couple of quarters develop, we're going to be able to give you some pretty strong answers about how much cost we believe we can take out of the system, and how much extra revenue we're picking up because we're in contact with a larger workforce. That's the direction we're headed and we believe there's great upside in both those categories. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Great. And then, can you just remind us, construction is currently about 20% of revenue? Is that right?

Yes, that's right, Mark. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Okay. And with regards to alternative energy, where -- how's that looking?

It's looking pretty consistent with last year. So there's maybe a couple of thoughts here on the energy side. The pipeline on alternative energy still looks quite strong for us. We're still expecting that to be a significant part of the revenue this year. And our teams are looking at other forms of energy where we do not have a foothold yet. Probably still a little green to talk about any revenue wins that might come out of that but it's an area that we're quite interested in. I think we can leverage into. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Great. And are you seeing any signs of a slowdown? I mean, aside from Boeing, which is obvious, but I mean, when you take a look at your manufacturing footprints, Spartan, some of the reports have been a little bit more mixed from some of the other players within the industry. Are you seeing any signs of slowing from your perspective?

Well, it's spotty, Mark and it has been for a long time. We'll see a great push in both our distribution business, our retail business will take off, and then it pulls back a bit and maybe there's pockets that are growing here or there. I believe all that mixed, we've had our moments over the last couple of years of wondering is this thing going to grow or not? And I think we're in a period of time where things speed up and slow down faster, than they did 10 years ago. And so the spotty nature of our business, I think, it's here to stay. And that's powerful for those that have learned how to use just-in-time inventory, they're also learning how to use just-in-time labor. And when they have an order, there's -- they take it, when they don't, they don't. It's more seasonal based and it's a really interesting environment out there right now, Mark, that's changed compared to where it was.

[Operator Instructions] The next question comes from the line of Paul Condra of BMO.

Just one quick one. Did you give us your monthly sales trends?

I did not give them. How about I give those to you?

That would be great.

So for the month of January, our revenue was down about 1%. For February, a growth of 15%; and March, growth of 17%. So all on a year-over-year basis.

Can you make any comments, just looking at April, I don't know, if you can make any trend comments or anything, what you're seeing there.

I think what we see going into April, I think March was a good month for us. Growth was still consistent in most areas. Geographically, the reach was good. And going into April, I mean, we had a little bit less of future perspective here because of the way Easter moved around. But coming into April, I think things looked just like they were in March.

Next question comes from the line of Randy Reece of Avondale.

I was wondering if you could talk a little bit about -- I have no idea whether you asked this, 2 conference calls going at once, trends in Labor Ready. The Labor Ready business was kind of slow in the second half of 2012 and I was wondering how it has been progressing. And if there's any differences in customer verticals so far this year?

The business has picked up from where we finished the back half of '12. We've talked about some organic numbers here today and the momentum and our enthusiasm about what we're seeing across industries, and locations. Is it driven by any one? We've shown some enthusiasm here towards construction, that's still a pretty small base and growing. Manufacturing has been a bit spotty, we're thrilled with our energy work that grew last year. Really through about the third quarter of last year is where that energy business somewhat leveled off. We probably had some hesitancy in our voice last fall about how far and how deep that will continue into '13. And we're pleased, we're growing off of last year's number and that we're not going backwards in that energy business. So that's exciting for us. And not only is the current business there growing, there's the pipeline growing of those that are interested in getting involved here. So we believe that's going to hold up well. We know that in the third and fourth quarter is when we started really losing our Boeing business. And that's why through the first quarter and second quarter of this year, we're still -- have this tough headwind, we're fighting there and get through the second quarter of this year and we've got that one off our tails. We're proud that even weaning that much business off of that large of an account, Boeing, that drove so much EBITDA for us that we balanced this thing and held forward and that really drives our comments about being well diversified in our approach to markets and industries. So I kind of like our balanced portfolio we have right now. We see great upside in construction though, and we'll take a little more mix leaning in that direction, back into our portfolio. And I think it will be nice. Other than that, things are going well.

I don't know if you remember. I used to work for a staffing company, it was just a little bit less well managed than yours. I can't imagine what it would be like to go through the process of consolidating offices in a market, especially a decent size market. What are the mechanics of pulling that off? And what are the important handoffs that you have to do?

Well, number one is it's all about these folks that are sourcing customers and recruiting our workers, and working with them, and as Derrek mentioned, the fact that when we consolidated these MDT offices, these 65 this last quarter, looking them in the eyes, sending an executive into every location and saying, we want you on our team. And then circling back and reminding them, we want you in our team. And quickly following up with process to show them how they're going to be paid, and how they're going to be welcomed here was -- is always very important. So when we are doing consolidations at this point in the cycle, we're wanting all of our employees to stay with us. And as we introduce new technologies, and we talk about the good things of -- the productivity we could gain and the cost we could save later this year with some further consolidations, it's going to be the same way that we're gonna ask those employees to stay with us. We've already told them it's coming. We've been socializing this for over a year that this is on its way and building trust with them that we're going to be open, and that they know we're going to be open. So those are the starters. You've got to go there and then you've got do what you say. And the second we change in our approach is the second we lose confidence, but we haven't. And we remain committed to that approach of bringing these employees over. Obviously, our track record in 2008, 2009, when we were all about controlling cost because we didn't know where the economy was going, those involved layoffs, those consolidations. And they didn't work out so well, by the way. If you lay…

I'd now like to turn the call over to Steve Cooper, CEO, for closing remarks.

Yes, thank you. We sure appreciate your questions today and being able to update you on our results and our outlook for the second quarter and we look forward to talking to you as the quarter proceeds. Have a good day.

Thank you. Thank you for your participation in today's conference. And this concludes the presentation. You may now disconnect. Have a good day.