EHS Plans to Nominate New Directors for TrueBlue Shareholders
Highlights Operational and Financial Concerns
Points to Disconnect Between Board’s Self-Perception and Company Reality
Commits to Putting Forth Highly Qualified Nominees for Shareholder Value
NEW YORK — EHS Investments (“EHS”), a significant shareholder of TrueBlue, Inc. (NYSE: TBI), has announced its intent to put forward a list of capable director candidates for election to the Company’s Board of Directors at the 2026 Annual Meeting of Shareholders.
Eric H. Su, Managing Partner at EHS Investments, stated, "TrueBlue is currently experiencing challenging operational performance leading to falling share prices. It is evident that a transformative change at the Board level is now essential.”
“The nominees we propose will introduce invaluable operational experience, fresh ideas, and enhanced governance across critical areas, ensuring a focus on maximizing shareholder value,” Su remarked. He expressed eagerness to provide insight into their candidate slate in the following weeks.
Additionally, EHS has communicated directly with the Board members regarding their intentions. The complete letter has also been made available through EHS’s official website.
Dear Members of the Board,
I am writing to express our intention to nominate highly qualified candidates for the Board of Directors of TrueBlue, Inc. during the upcoming 2026 Annual Meeting of Shareholders. This choice entails a significant commitment and comes after observing continued operational and financial setbacks coupled with a troubling lack of meaningful engagement from the Board.
Conversations with other shareholders, sector specialists, and former employees have only deepened my conviction that substantial change is urgently required. The operational reports further substantiate our concerns. TrueBlue's recent earnings show a slight return to revenue growth, but after a long stretch of decline, this is less reassuring. While we recorded an increase of $49 million in revenue compared to the previous year, gross profits fell by $2 million, raising serious questions about the integrity of reported growth amid past challenges.
Despite these small modifications, major issues persist. The performance of PeopleReady continues to decline, and PeopleSolutions is facing even more significant challenges with an alarming -11% year-over-year revenue decrease. Projections for the upcoming quarter suggest minimal future improvements, forecasting only a modest 2-3% growth, following a substantial contraction earlier.
Moreover, the operational distress has influenced our cash flow; we've experienced a burn of $17 million in free cash flow for the quarter, resulting in limitations on capital allocation. Our cash reserves have diminished to $95 million, creating new challenges. The acquisition of Healthcare Staffing Professionals (HSP) has only complicated these financial hurdles, as its growth metrics are falling short of expectations.
I have further been troubled by legal concerns recently raised against TrueBlue. If the allegations therein hold any truth, they signify severe mismanagement and a troubling disconnect between Board oversight and company initiatives, particularly surrounding the Jobstack project. The financial commitments made towards this project have been staggering - reported costs exceeding $70 million with no viable solution produced, raising questions about governance and capital allocation.
Furthermore, the Board's previous reluctance to engage significant offers, such as the $12.30 per share bid in early 2025, surfaced as a misalignment of interests as the current stock price sinks to around $5 per share.
All of these factors create a widening gap, highlighting a serious need for objective reassessment within the Board. It is crucial that we direct our focus towards maximizing shareholder interests.
In response to these escalating issues, our plan for the nomination of directors aims to introduce individuals with crucial operational background and insight, focusing on three main areas:
- Staffing Excellence
- Digital Transformation
- Disciplined Capital Allocation
This strategic refresh will lead to comprehensive business reviews and evaluations to explore transformative paths forward. Our aim is to collaboratively engage the entire Board to ensure TrueBlue’s long-term viability and success.
In closing, I remain optimistic about TrueBlue’s inherent potential and am committed to enhancing its mission of bridging people with work, despite the current challenges.
Sincerely,
Eric H. Su
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
EHS Management LLC, along with stakeholders named herein, intends to file preliminary materials with relevant regulatory authorities for the nomination of its director candidates at the annual meeting of stockholders of TrueBlue, Inc. Shareholders are encouraged to carefully review these materials for crucial information.
Frequently Asked Questions
What is the primary objective of EHS Investments?
EHS Investments aims to nominate qualified directors to drive operational improvements and enhance shareholder value for TrueBlue, Inc.
Why does EHS believe a Board change is necessary?
They assert that ongoing operational and financial deterioration signifies a critical need for new leadership to realign company strategies with shareholder interests.
What are the core areas of focus for the nominated directors?
The nominees will emphasize staffing excellence, digital transformation, and disciplined capital allocation.
How has TrueBlue’s performance impacted its stock price?
TrueBlue’s stock has seen a significant decline, which EHS attributes to the company’s operational challenges and the Board’s effectiveness.
What is the expected next step from EHS Investments?
They plan to move forward with director nominations and share more details regarding their candidate slate in the near future.
