Acquisitions propelled first-quarter revenue at industrial staffing firm TrueBlue Inc. (NYSE: TBI), but net income fell 14.9%. The company, formerly known as Labor Ready Inc., reported earnings per share of 20 cents, in-line with analysts' estimates.

CEO Steve Cooper said same-branch sales fell 2% in the first quarter with the rate of decline accelerating in the final weeks of the quarter and into the first two weeks of the second quarter.

"Our customers continue to face difficult economic conditions, and growth in the industrial staffing sector will be a challenge in the short term," Cooper said.

The Tacoma WA-based staffing firm reported first-quarter net income of $8.8 million, compared with $10.3 million in the first quarter of 2007.

In a conference call with analysts, Cooper said the decrease in net income was brought on by wages rising faster than costs could be passed on to clients, higher operating expenses brought on by acquisitions, higher amortization costs, and lower interest income.

First-quarter revenue rose 11.6% to $324.0 million from $290.2 million in the same period last year.

TrueBlue said a 15-percentage point increase in revenue came from acquisitions made in the last 12 months, including PlaneTechs, a provider of aviation maintenance staffing, and Skilled Service Corp. TrueBlue said Wednesday it also acquired truck driver-staffing firm TLC at the end of the first quarter.

In addition, TrueBlue reported Wednesday it struck a deal to buy Personnel Management Inc., a Greenwood IN-based light industrial staffing firm, for $19 million. Staffing Industry Analysts ranked Personnel Management at No. 82 on last year's list of largest staffing firms.

TrueBlue's first-quarter increase in revenue from acquisitions, however, was offset by a three-percentage point decline in comparable operations, the company said.

Its first-quarter gross margin narrowed to 30.4% year-over-year from 32.0%.

TrueBlue estimated second-quarter revenue of between $350 million to $355 million, a difference of between -0.3% and +1.1% from second-quarter revenue in 2007. That does not include the company's acquisition of Personnel Management, which could add $20 million in revenue to the second quarter, CFO Derrek Gafford said in a conference call with analysts.

The company's brands include Labor Ready, Spartan Staffing, and CLP Resources.

TrueBlue Inc. (NYSE: TBI)
For the first quarter ended March 28, 2008, compared with the same period in 2007.
Revenue: $324.0 million, +11.6%
Net income: $8.8 million, -14.9%