Slide 1: TrueBlue Investor Presentation Q4 2011
[ 2011 Q4 TRUE BLUE Investor Presentation
Slide 2: Cautionary Note About Forward-Looking Statements
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 that reflect management’s current outlook for future periods, including statements
Slide 3: TrueBlue Investment Highlights
TrueBlue Investment Highlights Specialized approach in serving the market Compelling growth potential for staffing industry Unique industry-related drivers for TrueBlue relate More opportunities to serve the staffing market Multiple growth strategies Strong operating leverage Solid bal
Slide 4: A Leading Provider of Blue-Collar Staffing
A Leading Provider of Blue-Collar Staffing Every day, we use our specialized approach to the market to find new opportunities to better serve customers and workers at all skill levels . 4
Slide 5: Blue-Collar Specialties
Blue-Collar Specialties General labor, on demand Specialized skills for manufacturing & logistics Skilled trades for energy, industrial, & construction projects Aviation mechanics & technicians Truck drivers 5
Slide 6: The Leading Provider of Blue-Collar Staffing
The Leading Provider of Blue-Collar Staffing 2011 Revenues = $1.3 Billion* * 2011 forecasted revenue per guidance issued on Oct. 26, 2011. Brand revenue estimated amounts rounded to the nearest $5 million. 6
Slide 7: Sales by Industry
Sales by Industry 2011 TTM* 2006 Construction 23% 37% Manufacturing 21% 17% Transportation 12% 9% Wh l l T d 9% 10%o esa e ra e Retail 7% 8% Services & Other 16% 19% Aviation 12% 0% 7 * 2011 TTM – Trailing 12 month business mix as a percentage of total revenue for the period October 2010 through Sep
Slide 8: TrueBlue Recognized as a Credible Industry Leader
TrueBlue Recognized as a Credible Industry Leader “ “Forbes Most T t th “VIP program to t lBest practices by DHS/ICE Partner” rus wor y Companies” promo e emp oyee fairness and safety” “Platinum 400” “Award of Excellence” “Hot Growth Company” “National Universal Agreement to Mediate” 8
Slide 9: Blue-Collar Staffing: A Sizable Industry
Blue-Collar Staffing: A Sizable Industry Other Healthcare Industrial/ Blue-Collar Finance $20 Billion Office IT $75 Billi on 9 Staffing Industry Analysts 2010 forecast, rounded
Slide 10: Staffing Industry and TrueBlue-Specific Growth Drivers
Staffing Industry and TrueBlue-Specific Growth Drivers Attractive Drivers for Staffing Industry Unique Industry Drivers Economic volatility & uncertainty Construction rebound uncertaint Greater need for flexibility & agility Growing need & shortage of truck drivers Increased government regulation Ma
Slide 11: Blue-Collar Staffing – Strong Future Growth
Blue-Collar Staffing – Strong Future Growth $20B 2015 Market Forecast2010 Market Source: Staffing Industry Analysts, Moody’s economic forecasts, TrueBlue estimates 11
Slide 12: Staffing Industry Still in Early Innings of Growth
Staffing Industry Still in Early Innings of Growth Well Beneath the Peak of the Last Cycle Source: Bureau of Labor Statistics. Temporary penetration rate defined as temporary help employment as a percentage of total U.S. non-farm employment. Seasonally adjusted. Yellow shaded areas represent officia
Slide 13: Construction Poised to Rebound
Construction Poised to Rebound Construction Employment As a percentage of total non-farm employment A construction rebound should provide additional revenue growth and higher gross margin for TrueBlue.* 5.1% Historical Average (1950 – 2010) “Construction is projected to be the fastest growing goods-
Slide 14: Transportation Employment Poised for Growth
Transportation Employment Poised for Growth U.S. Transportation Employment 000s 20-yr average. Bureau of Labor Statistics, 2018 Employment Projections Rosalyn Wilson, Council of Supply Chain Management Professionals Source: Bureau of Labor Statistics. Seasonally adjusted. 14
Slide 15: New Boom Ahead for U.S. Manufacturing
New Boom Ahead for U.S. Manufacturing Purchasing Managers Index PMI 65 55 60 Boston Consulting Group, May 5, 201150 40 45 30 35 Source: Federal Reserve Bank of St. Louis. A PMI reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent that it is gener
Slide 16: More Opportunities to Serve the Market
More Opportunities to Serve the Market 2006 2011 Labor Ready CLP CLP (11%) Spartan (11%) PlaneTechs (11%) $1.35B Revenue (89%) (11%) $1 3B Labor C t li. Revenue Ready (63%) en er ne (4%) $5 Billion Market $13 Billion Market 16 Percentages in parentheses represent the mix of total company revenue by
Slide 17: Market Share Opportunities
Market Share Opportunities 1 2 $4 Billion (20%) Market Size & (Market Share) $7 Billion (2%) $1 Billion (15%) $800 Million (19%) $500 Million (10%) 1 Staffing Industry Analysts 2010 forecast, 2 Market share (%) based on TrueBlue estimates 17
Slide 18: Multiple Growth Strategies
Multiple Growth Strategies Focus HowWhy Organic Growth in Existing Geographies +++ Operating Leverage • Vertical Market Specialization • Brand Leadership Geographic Expansion + Market Share • Sales Tools and Training • On-site Management • Multi-Branded Locations P i il T k iAcquisitions + Market Sh
Slide 19: Vertical Market Specialization
Vertical Market Specialization Dedicated sales leaders with expertise in the specific industries we serve Specialized national sales and service teams deliver tailored solutions to our national customers Industry selling and service Best Practices used by branch staff to serve local customers
Slide 20: Strong Operating Leverage from Organic Revenue
Strong Operating Leverage from Organic Revenue O i th f i ti hi Incremental Revenue $100 rgan c grow rom ex s ng geograp es = 15% - 18% incremental EBITDA margins* Gross Profit Generated $25- $26 Operating Expense Associated with Incremental Revenue $(8) – (11) Incremental EBITDA $15 - 18 * Reflects
Slide 21: Geographic Expansion Opportunities
Geographic Expansion Opportunities Existing markets KEY 21
Slide 22: Successful Acquisition Record
Successful Acquisition Record A i iti R lt H W V t A i iticqu s on esu s ow e e cqu s ons Does it fit our strategy? Does it exceed our return on investment requirements? Does it fit our culture and operational structure? Does it bring unnecessary financial or legal risks? 22
Slide 23: Financial Review
| Financial Review TRUE BLUE oa ele ou“ in,
Slide 24: Recent Revenue Trends
Recent Revenue Trends 18% normal- ized growth* 24 * Q4 2011 mid-point revenue forecast issued on Oct. 26, 2011 of 9% growth -- or 18% growth on a comparable week basis. Q4 ’10 was a 14 -week quarter vs. 13 weeks for Q4 ‘11.
Slide 25: Financial Summary
Financial Summary Q 3 2011 Q 3 2010 G th %- - row Revenue $ 371 $ 313 19% Gross profit $ 100 $ 85 18% % of Revenue 26.9% 27.0% SG&A expense $ 73 $ 64 14% % of Revenue 19 7% 20 6% . . Depreciation/amortization $ 4 $ 4 9% % of Revenue 1.1% 1.2% Income from operations $ 22 $ 16 38% % of Revenue 6.0% 5.
Slide 26: Gross Margin Change
Gross Margin Change 28% +0.3%-0.4% 26% 24% 27.0% 26.9% 22% Q3 2010 Actual 2010 HIRE Act Credits Pricing Q3 2011 Actual 26TrueBlue™ (NYSE:TBI) Q4 2011 Investor Presentation
Slide 27: SG&A Expense Change
SG&A Expense Change $70 $80 +$6M +$2M +$1M $50 $60 $30 $40 $64M $73M $10 $20 $0 Q3 2010 Actual Variable Expenses People Investments Other Q3 2011 Actual 27TrueBlue™ (NYSE:TBI) Q4 2011 Investor Presentation
Slide 28: 2011 Stock Buyback Activity
2011 Stock Buyback Activity Purchases Shares Total Cost Q-2 ’11 0 9 million $13 million . Q-3 ’11 3.0 million $37 million Q-4 ‘11* 0.4 million $ 5 million 2011 Total 4.3 million $55 million Remaining Authorization* $42 million (*) As of Oct. 26, 2011 28TrueBlue™ (NYSE:TBI) Q4 2011 Investor Presentat
Slide 29: Solid Balance Sheet
Solid Balance Sheet In millions Q-3 2011 Q-4 2010 Cash & investments $99 $163 Accounts receivable $174 $109 Current ratio 2.3 3.4 Restricted cash & investments $137 $120 Workers’ comp reserve $188 $187 Debt $0 $0 Shareholders’ equity $291 $313 29
Slide 30: Appendix
( Appendix TRUE BLUE PYLE 2 oe |
Slide 31: Reconciliation of EBITDA to Net Income
Reconciliation of EBITDA to Net Income $ $ $ $ $ $ $ $ $ *EBITDA is non-GAAP financial measure which excludes interest, taxes, depreciation and amortization from net income. EBITDA is a key measure used by management in evaluating performance. EBITDA should not be considered a measure of financia