Trueblue, Inc. · NYSE:TBI
Trueblue — Labor Ready — Investor Presentation (February 2004)
33 slides from Trueblue's investor presentation, Feb 26, 2004
Slide 1: Labor Ready Investor Presentation 1st Quarter 2004
LABOR READY Dependable Temporary Labor. INVESTOR PRESENTATION 1ST QUARTER 2004 We Put People to Work.
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT Cautionary Note about Forward-Looking Statements Certain statements made by us in this presentation that are historical facts or that relate to future plans, events or perform are forward-looking statements within the meaning of the fede securities laws. Our actual results may
Slide 3: Senior Management Team
SENIOR MANAGEMENT TEAM Years of Experience Labor Ready Professional Joe Sambataro 7 32 CEO, president Steve Cooper | 18 CFO Tim Adams 3 17 General Counsel John Hopkins 7 12 VP, Operations Gary North | 19 VP, Operations Tom Stonich 8 27 VP, Human Resources Rick Christmas 1 27 cio
Slide 4: Equity Snapshot
EQUITY SNAPSHOT = Exchange/Symbol NYSE/LR} * Share Price as 2/6/2004 $13.50 = Fully Diluted Shares 51.7M = Average Volume (3-month avg.) 357,000 = Market Capitalization $600 M = 2003 Revenues $891 M = 2003 Operating Income $ 32M
Slide 5: Company Overview
COMPANY OVERVIEW “We Put People to Work.” = Largest supplier of temporary day labor in the U.S. = Nearly 600,000 people employed annually = 780 branches throughout the U.S., Canada and the U.K. =" Headquarters in Tacoma, WA.
Slide 6: Fragmented, Growth Industry
FRAGMENTED, GROWTH INDUSTRY = Staffing: $95 billion industry ® = Industrial staffing: $16 billion @ = Day labor market: $5 billion © Day Labor Market Breakdown Tops Labor Ready Competitors 14% 13% Untapped Demand 31% Other (@) 2003 Staffing Industry Sourcebook Competitors (b) Research estimates 42%
Slide 7: Diversified Customer Base
DIVERSIFIED CUSTOMER BASE = Nearly 275,000 customers " Largest customer represents less than 2% of sales ™ Average yearly sales per customer of $3,000 = Over 400 industry classifications Sales by Industry | Manufacturing 0% Transportation 10% Retail 7%
Slide 8: Branch Office Model
BRANCH OFFICE MODEL = Real-time matching of customer and worker needs BRANCH OFFICE: + Process work orders + Assign work orders + Provide safety equipment and arrange transportation| WORK SITE: + Work performed + Customer endorses work order BRANCH OFFICE: + Workers exchange work order for payment
Slide 9: Strong Value Proposition
STRONG VALUE PROPOSITION = Elimination of workers’ comp = and payroll tax administration = National scale and multiple locations = Dependable, temporary labor = Just-in-Time = President’s 100% Satisfaction Guarantee = Flexibility = Work Today — Paid Today = Bridge to Permanent Employment = Safety Tr
Slide 10: Rapid Branch Expansion
RAPID BRANCH EXPANSION a Number of Branch Offices ™ 40% CAGR | | | | 1959997 L9e 19992000 0020022003200 ™ Quickly developed branch footprint = Optimizing investment to extract leverage
Slide 11: Labor Ready has 780 offices
LABOR READY Dependable Temporary Labor. y c Labor Ready has 780 offi Canada and
Slide 12: Key Business Strategies
KEY BUSINESS STRATEGIES = Grow current branch revenues and profits = Expand in smaller markets in the United States and Canada = Expand in the United Kingdom
Slide 13: Grow Current Branch Revenues & Profits
GROW CURRENT BRANCH REVENUES & PROFI = Increase same-branch revenues * Current branches at 50% of recruiting capacity = Improve Branch Manager tenure * Compensation tied to Profits ° Enhanced Training ° Mentoring and Development = Improve customer service = Pricing and cost controls
Slide 14: Smaller Markets Expansion
SMALLER MARKETS EXPANSION Opened 25 new branches in U.S. and Canada in 20! Plan to open 25 in 2004 Smaller market branch model Smaller footprint with less cost ° Populations of approx. 50,000 ° Minimal impact on existing branches
Slide 15: Smaller Market Branch Locations
SMALLER MARKET BRANCH LOCATIO. a omy eee Looe genie i) calnada — MONTANA, aoa ot Set, “ = ae cea ere > oe ay ° some | smnnene | — wot) cee oO wer, a ono 1 @ PA -Brntaderpnia oom | PUWT PEs 5 — pana a a: a Ce |Los angetes™ —e ea ae some! — a ote ‘Pacific ates oA Ft — Texng es na ‘Rtonio ° Mexico ou o
Slide 16: United Kingdom Expansion
UNITED KINGDOM EXPANSION " Estimated 100 - 125 locations available = Currently operating close to 50 branch locations ™ Expanded geographic reach for core business
Slide 17: United Kingdom Expansion
UNITED KINGDOM EXPANSION O aberdeen @ ‘SconLavio broth ATLANTIC la, oD ao al "s 5 Ocagz pz @ sundertena OCEAN ay n | Middlesbrough Roscommon, Navan| ipatway ie Tutemare’ N Be. dein con ioe a RR! van Os @ Current locations © Projected locations ie Sa@oymenh: english channel
Slide 18: Financial Highlights
FINANCIAL HIGHLIGHTS = Improving revenue and profitability = Consistent gross margins = Controlled operating costs = Significant operating leverage = Strong balance sheet
Slide 19: Financial Performance
FINANCIAL PERFORMANCE 2004 2001 | 2002 | 2003 | Forecast = Revenue $917M | $863M | $891M | $940-$960M + Growth (-6%) | (-6%) 3% 7% "EPS $0.23 | $0.28 $0.41 | $0.49-$0.52, = Operating Income $14M $ 21M $32M | $39M-$42M ° Growth (-15%) AT% 54% 28% (@) Based on management guidance issued on February 4,
Slide 20: Long-Term Growth
LONG-TERM GROWTH ingw_ Annual Revenue and Operating Income insu 1,200 45 40 1,900 3% 800 30 g 2 8 2 23 2 600 D 3 ms 4 s 400 6 0 oO 200 5 ° ° 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004E (@) Based on management guidance issued on February 4, 2004
Slide 21: Seasonal Business
SEASONAL BUSINESS insm Quarterly Revenue 300 250 200 160 100 60 ao aio2 202 @an2 e402 «Ging © az03. aang AMOS TOE @ EPS $0.09) $0.08 $0.18 $0.08 $0.08) $0.12 $022 $0.12 $40.02) (@) Based on management guidance issued on February 4, 2004
Slide 22: Year Trends in Temporary Staffing
% Growth (# of Employees) 20 YEAR TRENDS IN TEMPORARY STAFFING U.S. Help Supply Total Non-m Labor Fores Grow —Hilp supplz rh "9, "00, "Aa, "Ay “00, "Yay "qty, to, “0, Cycle Expansions and Contractions: (1) Economic expansion began in November 1982; (2) Economie contract began in July 1990 and expans
Slide 23: Three Year Trends in Temporary Staffing
THREE YEAR TRENDS IN TEMPORARY STAI 15.00% “e- LRW US. Sales Growth BLS Help Supply Year over Year Growth * 10.00% 5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% IFMAMIJASONDJFMAMIJASONDJ FMAMIJASO ‘ol w 3 * Not seasonally adjusted.
Slide 24: Bill Rate Economics
BILL RATE ECONOMICS $12.25/hr. Bill Rate Illustration @ Workers’ Wages $12.25 per hour Workers’ o bill rate Compensation Payroll Taxes Gross Margin ~ 30% (2 Musttaton enly. Amounts could vary depending on neato, job type and stage of economic cycle
Slide 25: Consistent Gross Margins
CONSISTENT GROSS MARGINS 32% 31% 30% + 29% 28% 27% 26% 25% Gross Margins As a Percentage of Revenue 1994 1995 1998 1997 1998 1999 2000 2001 2002 2003
Slide 26: Gross Margin Trends
GROSS MARGIN TRENDS Q2 Q3 O04 QI Q2 Q3 Q4 QI Q2 Q3 Q4 Ql 2001 2001 2001 2002 2002 2002 2002 003 2003 2003 2003 2004E E- Based on management guidance issued on February 4, 2004
Slide 27: Selling, General & Admin. Costs
SELLING, GENERAL & ADMIN. COSTS Trailing four quarters as a percentage of sales 28% 27% 26% 25% 24% | 23% Ql 92 93 O24 Qt 02 93 Q4 Qt ici 200220022002 2002. 20032003) 2003 2003 2004E. E- Based on management guidance issued on February 4, 2004
Slide 28: Branch Maturity Drives Revenue
BRANCH MATURITY DRIVES REVENUE 2003 Branch Revenue and Maturity insm $1,800 25% $1.1 Million $1,400 per Branch in 2003 20% $1,200 $1,000 15% Revenue $800 % of Offices, $600 OK $400 5% $200 $0 0% Tv. 2¥s. 3¥. 4¥is. SVs, BMS, T Ys, BYES.
Slide 29: Branch Maturity Drives Revenue
BRANCH MATURITY DRIVES REVENUE am Estimated Branch Revenue and Maturity in $M $1,600 25% $1.4 Million $1,400 per Branch 20% 15% i s Ba 5% $1,200 $1,000 Revenue $800 $600 $400 $200 $0 0% Tv 2¥e. 3¥e. 4¥e. SVs. 8M. TY, BYKS.
Slide 30: Branch Profit Potential
BRANCH PROFIT POTENTIAL Sensitivity analysis based o| j= 6f Revenue $1,100,000 — $1,300,01 Gross Profit 330,000 390, 0 Gross Profit Margin 30% Branch Expenses 200,000 210, As a % of Revenue 18% Operating Income $130,000 $180,0 Operating Income Margin
Slide 31: Operating Leverage Drives Profit
OPERATING LEVERAGE DRIVES PROFIT Earnings Per Share Sensitivity Analysis $200 $180 $1.60 $140 wn) ae $1.00 : 80 90.60 40 9020 1 90.00 s12 $13 «41ST 8B Average Revenue per Branch ($ Millions) Earnings per Share Assumption (2) Eamings per share sensitvty analysis based on 720 ofces, 30% gross profit m
Slide 32: Strong Balance Sheet
STRONG BALANCE SHEET Q4 2003) 42002 = Cash and investments $108M $91M = Current ratio 2.9 3.0 = Restricted cash $111M $95M = Workers’ compensation reserve $101M $86M = Long term debt $75M $76M = Shareholders’ equity $154M $132M = DSOs ~30 days ~ 30 days
Slide 33: Searchable text section of graphics
Searchable text section of graphics shown above [ LOG O] INVESTOR PRESENTATION 1 ST QUARTER 2004 [GRAPHIC] We Put People to Work. SAF E HARBOR STATEMENT Cautionary Note about Forward-Looking Statements Certain statements made by us in this presentation that are not historical facts or that relate to