Trueblue, Inc. · NYSE:TBI
Trueblue — Investor Presentation (February 2013)
34 slides from Trueblue's investor presentation, Feb 26, 2013
Slide 1: Q1 2013 Investor Presentation
Q1 2013 Investor Presentation
Slide 2: Forward-Looking Statement
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 that reflect management’s current outlook for future periods, including statements regarding future financial performance. These forw
Slide 3: TrueBlue Investment Highlights
TrueBlue Investment Highlights • Specialized leader in blue-collar staffing • Well-positioned in growing staffing market • Significant upside as construction market rebounds • Compelling organic growth strategies • Successful acquisition strategy • Strong operating leverage • Solid balance sheet sup
Slide 4: Specialized Leader in Blue-Collar Staffing
Specialized Leader in Blue-Collar Staffing General labor, on demand Specialized skills for manufacturing & logistics Skilled trades for energy, industrial, & construction projects Aviation mechanics & technicians Truck drivers page 4
Slide 5: A Credible Business Leader
A Credible Business Leader Best Practices by DHS/ICE Partner National Agreement Forbes Most Trustworthy Companies page 5
Slide 6: Revenue and Industry Mix
Revenue and Industry Mix *Brand revenue amounts rounded to the nearest $5 million. page 6 2012 Sales by Industry Energy and Industrial 10% Wholesale Trade 8% Retail 7% Services & Other 14% Aviation 9% Construction 20% Transportation 12% Manufacturing 20% Labor Ready $835M Centerline $60M CLP $230M S
Slide 7: Blue-Collar Staffing: $29 Billion Industry
Blue-Collar Staffing: $29 Billion Industry $25 Billion Industrial/ Blue-Collar Other Finance Healthcare Office IT Blue-Collar/Industrial Source: Staffing Industry Analysts 2012 forecast as of September 2012 $29 Billion $100 Billion Overall Industry page 7
Slide 8: Blue-Collar Staffing: Strong Future Growth
Blue-Collar Staffing: Strong Future Growth 2016 Market Forecast 2012 Market page 8 $36B $29B Source: Staffing Industry Analysts, Moody’s economic forecasts, TrueBlue estimates
Slide 9: Staffing Industry: Current Growth Drivers
Staffing Industry: Current Growth Drivers • Economic volatility & uncertainty • Skilled labor shortages • Increased government regulation • Aging workforce • Flexible workforce • Improve productivity • Compliance with regulations • Access talent page 9 STAFFING INDUSTRY SOLUTIONS BUSINESS DISRUPTORS
Slide 10: Customers Double Use of Temp Staffing
Customers Double Use of Temp Staffing 2009 Recovery 1991 Recovery 2003 Recovery 2x Temp Jobs as Percentage of Total Jobs Added page 10 16% 8% 8% Source: Bureau of Labor Statistics. Measures number of jobs added from help supply services as a percentage of total non-farm payroll. Timeframe measured i
Slide 11: Staffing Industry Growth Drivers: Affordable Care Act Focus
Staffing Industry Growth Drivers: Affordable Care Act Focus How Affordable Care Act • Employers with more than 50 full-time employees (30+ hours per week) must either offer affordable health coverage or pay a penalty • Provide employers with flexible solutions to comply with ACA law page 11 Opportun
Slide 12: Staffing Industry Growth Driver: Construction Focus
Staffing Industry Growth Driver: Construction Focus How Situation Opportunity Construction • Construction employment near historic lows • Positive momentum for housing starts; construction employment to follow page 12 • Significant construction revenue increase • Multiplier effect on logistics, reta
Slide 13: Poised for Construction Rebound
Poised for Construction Rebound page 13 Source: BofA Merrill Lynch Research, BLS, Census Bureau Ho u sin g Starts (1000s; lags fi v e q trs. ) Constru c tion Jobs (as pe rc e nt of labo r forc e ) Construction Jobs Lag Housing Starts
Slide 14: TrueBlue: Strong Construction Upside
TrueBlue: Strong Construction Upside page 14 Historic Construction Trends 2006 2012 Construction Upside Scenario 1 Scenario 2 Mix 33% 20% 25% 30% Revenue $ 450M $ 280M $ 435M $ 525M Incremental EBITDA* $ 30M+ $ 50M+ * Based on incremental construction EBITDA margin assumptions of 20 percent. See 201
Slide 15: Staffing Industry Growth Driver: Manufacturing Focus
Staffing Industry Growth Driver: Manufacturing Focus How Situation Opportunity Manufacturing • U.S. Manufacturing Renaissance • Increased incentives to “reshore” including increasing wages in China, offshore product quality concerns • Decline in energy costs • Provide flexible, skilled labor force •
Slide 16: Staffing Industry Growth Driver: Transportation Focus
Staffing Industry Growth Driver: Transportation Focus Situation Transportation • High driver turnover • New safety regulations create need for more drivers • 100,000 new drivers needed per year, over the next 10 years* page 16 • Access to hard-to-find talent • Safety and compliance leadership • Flex
Slide 17: Staffing Industry Growth Driver: Energy Focus
Staffing Industry Growth Driver: Energy Focus How • Growing energy independence • Skilled worker shortages • More than 100,000 new jobs in the solar industry by 2016* • Deliver and manage skilled work force in remote areas • Deep technical knowledge within green industries • Partner with green indus
Slide 18: TrueBlue Growth Strategies: Specialization
TrueBlue Growth Strategies Focus How page 18 Specialization • Industry expertise • Local sales strategies • National sales and service Specialization Current • Additional vertical experts • More local sales people • Account executives • Permanent placement business Future Consideration
Slide 19: TrueBlue Growth Strategies: Technology
TrueBlue Growth Strategies Focus How Technology • Texting • Electronic placement • Pay cards • Fill more orders, faster • Higher quality, more workers page 19 Technology Current Opportunity • Electronic hiring process • Social media recruiting • Enhanced database Future Consideration
Slide 20: TrueBlue Growth Strategies: Centralization
TrueBlue Growth Strategies Focus How Why How Technology page 20 Centralization • Branch consolidations • Common processes • Specialized job duties Centralization Current Opportunity • Satellite recruiting branches • National recruiting efficiencies • Additional branch consolidations Future Considera
Slide 21: Successful Acquisition Strategy
Successful Acquisition Strategy Focus How Considerations Technology page 21 • ROIC* • Strategic fit • Cultural fit • Limited financial risk • New business capabilities • Talent • • • • * Return on invested capital Acquisitions Considerations Results
Slide 22: MDT Acquisition
MDT Acquisition
Slide 23: MDT Business Overview
MDT Business Overview • Third largest general labor staffing firm in the U.S. • $200 million annual revenue • 105 branches and 15 on-site locations in 25 states • Strongest presence in the Southeastern U.S. • Diversified customer base • Customer industries served similar to TrueBlue’s current busine
Slide 24: Combined Business
Combined Business • Annual revenue of $1.6 billion • MDT integration with Labor Ready creates $1 billion revenue general labor staffing business • Footprint of 800 branches at acquisition • Integration includes about 60 branch consolidations • Integration to be complete in Q2 2013 page 24
Slide 25: Strategic Rationale
Strategic Rationale • Significant market share growth • Increases scale in our general labor staffing business • Branch consolidation synergies drive operating leverage • Attractive purchase price at 4x EBITDA* • Infusion of new talent, including industry-experienced sales force • Good cultural fit
Slide 26: Deal Summary
Deal Summary Purchase Price: $48 Million* Consideration: $12 Million cash $36 Million debt Note Terms: Five-year term + five one-year extensions 15-year principal amortization schedule LIBOR, plus 150 basis points Structure: Asset Purchase $8 Million Tax Asset * Additional $7 million paid at closing
Slide 27: Financial Review
Financial Review
Slide 28: Strong Operating Leverage
Strong Operating Leverage Incremental Revenue $100 Gross Profit Generated $26 Operating Expense Associated with Incremental Revenue $(9) – (11) Incremental EBITDA ≈$15 * Reflects an approximation of the incremental EBITDA that management believes can be achieved, in general, with favorable revenue g
Slide 29: Annual Summary of Results
Annual Summary of Results Dollar amounts in millions , except EPS amounts 2012 2011 Change Revenue $ 1,389 $ 1,316 6% Gross profit $ 372 $ 347 7% % of Revenue 26.8% 26.4% SG&A expense $ 300 $ 283 6% % of Revenue 21.6% 21.5% Depreciation & amortization $ 19 $ 16 15% % of Revenue 1.4% 1.2% Income from
Slide 30: Solid Balance Sheet
Solid Balance Sheet 2012 2011 Cash & investments $ 130 $ 109 Strong cash position to fund acquisition strategy Debt* $ 0 $ 0 Low financial leverage balances strong operating leverage page 30 Dollar amounts in millions * The company took on $34M of debt in 2013 with the acquisition of MDT.
Slide 31: Q1 2013 Expectations
Q1 2013 Expectations Total revenue of $335M - $345M or growth of about 9%* • Organic revenue decline of ≈(1%)* • Organic revenue growth excluding large customer project ≈5%* Net loss per diluted share in Q1 2013 of ($0.05) – $0.00 • Includes Worker Opportunity Tax Credit (WOTC) benefit from 2012 of
Slide 32: 2013 Full-Year Outlook
2013 Full-Year Outlook * Represents the expected year over year reduction in project work in 2013 for our top aviation-related customer. ** Centralization of common operating processes and deployment of mobile technology offerings. *** Integration costs related to the MDT acquisition and one-time re
Slide 33: 2013 Outlook Operating Income to EBITDA Reconciliation
2013 Outlook Operating Income to EBITDA Reconciliation *Adjusted EBITDA excludes one-time integration costs related to the MDT acquisition and one-time reorganization costs related to branch efficiencies from EBITDA. EBITDA and Adjusted EBITDA are key measures used by management in evaluating perfor
Slide 34: TrueBlue Investment Highlights
TrueBlue Investment Highlights • Specialized leader in blue-collar staffing • Well-positioned in growing staffing market • Significant upside as construction market rebounds • Compelling organic growth strategies • Successful acquisition strategy • Strong operating leverage • Solid balance sheet sup