Trueblue, Inc. · NYSE:TBI
Trueblue — Labor Ready — Investor Day (November 2007)
37 slides from Trueblue's investor day presentation, Nov 14, 2007
Slide 1: Labor Ready 5th Annual Analyst Day
Steve Cooper, CEO | Derrek Gafford, CFO LABOR READY 5th Annual Analyst Day Nov. 14, 2007
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 TrueBlue™ Cautionary Note About Forward-Looking Statements: Certain statements made by us in this presentation that are not historical facts or that relate to future plans, events or performances are forward-looking statements within the meaning of the federal securities laws
Slide 3: Agenda
Agenda INTRODUCTIONS STRATEGIC MILESTONES BUSINESS LINES INDUSTRY AND MARKET REVIEW STRATEGIES FINANCIAL REVIEW 3 TrueBlue™
Slide 4: TrueBlue business lines and 2007 revenue
4 Skilled Trades 15% General Labor 80% The largest supplier of general labor with 798 branch locations in the U.S., Canada and the U.K. Supplier of light industrial labor with 34 locations the U.S. Supplier of skilled trades people with 87 locations in the U.S. 2007 Revenue Approx. $1.4 billion Ligh
Slide 5: Temporary Staffing $100 billion
Temporary Staffing TrueBlue™ 5 $100 billion Staffing Industry Analysts 2007 estimate, rounded healthcare other Industrial / blue collar office IT finance
Slide 6: Temporary Staffing: Fifth Fastest Growing Industry
Temporary Staffing: Fifth Fastest Growing Industry CONTINGENT WORKFORCE TRENDS – FLEXIBILITY IS KEY Screening potential workers with a ”Working Interview” Variable or unpredictable workload levels Rapid growth of organization Difficulty finding quality people Bureau of Labor Statistics 2014 projecti
Slide 7: Industrial/Blue-collar Staffing
other finance healthcare office IT Industrial / blue collar Industrial / blue-collar Industrial/Blue-collar Staffing other finance healthcare office IT Industrial / blue collar 7 Staffing Industry Analysts 2007 estimate, rounded TrueBlue™
Slide 8: Perspectives in Blue-collar Staffing
Perspectives in Blue-collar Staffing BLUE COLLAR PROJECTED TO GROW AT 6-7% OVER THE NEXT DECADE 70% of fastest growth jobs are unskilled Construction is the only durable goods industry projected for growth 50% OF THE MANPOWER HOTTEST JOBS FOR 2007 ARE BLUE COLLAR 8 TrueBlue™ Staffing Industry Analys
Slide 9: General Labor Staffing
other finance healthcare office IT Industrial / blue collar General Labor Staffing $5 billion $1.15 billion 9 Staffing Industry Analysts and company estimates, rounded TrueBlue™
Slide 10: Light Industrial Staffing
other finance healthcare office IT Industrial / blue collar Light Industrial Staffing $9 billion $50 million 10 Staffing Industry Analysts and company estimates, rounded TrueBlue™
Slide 11: Skilled Trades Staffing
other finance healthcare office IT Industrial / blue collar Skilled Trades Staffing $2 billion $200 million 11 Staffing Industry Analysts and company estimate, rounded TrueBlue™
Slide 12: Business Line Approach
12 Business Line Approach General Labor Light Industrial Skilled Trades General labor across all industries Available on short notice around the clock Specialization in tough-to-fill, high turnover positions and short-term assignments Semi-skilled in manufacturing, warehousing and similar functions
Slide 13: Vision and Strategy
1. Grow Faster Than the Market 2. Be the Service Leader 3. Operate as One Company The Vision TO BE THE LEADING PROVIDER OF BLUE COLLAR STAFFING. Our Strategy 13 TrueBlue™
Slide 14: 1. Grow Faster Than the Market
1. Grow Faster Than the Market Business line Key methods of growth General Labor Same Branch Light Industrial Same Branch Acquisition Skilled Trades Same branch New Branch 14 TrueBlue™
Slide 15: Grow Faster: Same Branch Revenue
DMs Trained Sales Coaches District Level Sales Planning ASMs Certified Sales Trainers Branch Manager Training 1. Grow Faster Than the Market - Same Branch Revenue 15 TrueBlue™
Slide 16: Grow Faster: New Branches
OPEN UP TO 5%(1) OF BRANCH COUNT ANNUALLY: Limits dilution to current earnings Keeps field management focused on growing our existing branches Avoids over–investment in the event of economic downturn Consistent approach to levels of investment for new operations 1. Grow Faster Than the Market – New
Slide 17: Strategic Acquisitions: Light Industrial
1. Grow Faster Than the Market: Strategic Acquisitions Light Industrial ($9 billion total) .5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 US Industrial Staffing Revenue ($ B) Manpower, Adecco & Kelly $4.5 B Other Competitors $3.5 B Next Top 5 Competitors $1 B True Blue 10 20 30 40 50 60 70 80 90 100 0 0 Percent
Slide 18: Strategic Acquisitions: Acquisition Target
1. Grow Faster Than the Market: Strategic Acquisitions Light Industrial ($9 billion total) Manpower, Adecco & Kelly $4.5 B Other Competitors $3.5 B Next Top 5 Competitors $1 B True Blue 18 TrueBlue™ Acquisition Target .5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 US Industrial Staffing Revenue ($ B) 10 20 30 4
Slide 19: 2. Be the Service Leader
2. Be the Service Leader Workforce Focus Employee Focus Customer Retention 19 TrueBlue™
Slide 20: 3. Operate as One: Brand Support Services
3. Operate as One: Brand Support Services Tactical Strategic Proximity to customer Low High Likely to stay with the brand Likely to be a “shared service” 20 TrueBlue™
Slide 21: TrueBlue: Present & Future
2007 $1.4B(1) General Labor 80% Light Industrial 5% Skilled Trades 15% General Labor 60% Skilled Trades 20% Light Industrial 20% Strategy $3B(2) TrueBlue: Present & Future 21 TrueBlue™ (1) Rounded to nearest billion. (2) Management expects future net income as a percentage of revenue to be equal to
Slide 22: Financial Review
Financial Review 22 TrueBlue™
Slide 23: Revenue Growth by Year
Revenue Rounded to the nearest .5% 23 TrueBlue™ Year Over Year Growth 17% 5% 12% 18.5% 9.5% 9% 9% 4% 5% 2.5% 2% 0.5% FY 2004 FY 2005 FY 2006 FY 2007E Acquisition Growth Organic Growth
Slide 24: Revenue Growth by Quarter
Revenue Rounded to the nearest .5% 24 TrueBlue™ Year Over Year Growth 4% 4% 0.5% 0.5% -2.5% -2.5% 3.5% 2.5% 1% 4.5% 3% 1.5% 3% 2.5% 0.5% Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07E Acquisition Growth Organic Growth
Slide 25: Profitability: Net Income Percentage of Revenue
Profitability 25 TrueBlue™ Net Income – Percentage of Revenue 3.5% 5.0% 5.7% 4.8% 2004 2005 2006 2007E
Slide 26: Profitability: Diluted EPS
Profitability 26 TrueBlue™ Diluted EPS $ $0.75 $1.18 $1.45 $1.44 2004 2005 2006 2007E
Slide 27: Return on Assets
Return on Assets 27 TrueBlue™ 8% 11% 13% 12.5% 2004 2005 2006 2007E
Slide 28: Return on Equity
Return on Equity 28 TrueBlue™ 20.5% 23.0% 22.0% 21% 2004 2005 2006 2007E
Slide 29: Use of Capital
Use of Capital Cash Acquisitions Stock Buyback Return on Investment Return on Investment Decision (Driven by ROI) 29 TrueBlue™
Slide 30: Making Strategic Acquisitions
Making Strategic Acquisitions Qualitative Factors Quantitative Factors Other Factors Strong Management Comparable Culture Profitable Operations Strategic Fit Blue Collar Service Leader Growth Platform Return on Investment Financial decisions based on ROI Acquisition ROI must exceed TrueBlue’s ROE Fi
Slide 31: Stock Buyback Activity
Stock Buyback Activity Purchases Shares Total Cost 2006 FY 4.2 million $89 million 2007 YTD* 7.5 million $148 million Total 11.7 million $237 million Remaining Authorization* $40 million (*) As of Sept. 28, 2007 31 TrueBlue™
Slide 32: Operating Leverage Drives Profits
(a) Earnings per share sensitivity analysis based on 900 branches, 31.0% gross profit margins, management’s estimates of fixed and variable expenses, regional and back office overhead and related assumptions, at varying levels of per office revenues. 2004 $1.3M Operating Leverage Drives Profits 2005
Slide 33: New Branch Economics
33 New Branch Economics (a) Targeted branch-level profitability as a percentage of revenues in the fourth year of operation. Excludes regional and corporate costs, depreciation, amortization, interest and taxes. Gross Margins Initial Expense Structure Targeted Breakeven Period Mature Branch Profitab
Slide 34: Acquisition Economics
(a) Earnings per share model assumes an acquisition of a staffing firm with revenues of $100 million and operating income of $4 million. Post-acquisition assumptions were based on management’s estimates of gross margins, operating expenses, depreciation and amortization of intangible assets acquired
Slide 35: 2008 Financial Outlook
2008 Financial Outlook 2008 Estimate Branches in operation on Jan. 1, 2008 900 New branches 3 Revenue growth from 2007 SSC acquisition 1% Revenue loss from branches closed in 2007 -1% Reduction in SG&A from branch closures (1) $6 M Additional SG&A on incremental same branch revenue (2) 10% Gross Mar
Slide 36: Balance Sheet
Balance Sheet Q3 2007 Q4 2006 Cash and Investments $67M $199M Current Ratio 2.3 3.4 Restricted Cash $143M $144M Workers’ Compensation Reserve $197M $189M Long-term Debt $0M $1M Shareholders’ Equity $270M $353M 36 TrueBlue™
Slide 37: Investment Highlights
Investment Highlights Service leader in blue-collar staffing Growth platforms in place for two business lines Strong operating leverage Industry-leading return on assets and equity Available resources to invest in additional growth platforms Significant share buyback program 37 TrueBlue™