Slide 1: Q1 2016 Earnings Results
Q 1 2 0 1 6 E a r n i n g s R e s u l t s
Slide 2: Forward-Looking Statement
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 financi
Slide 3: Q1 2016 Highlights
Q1 2016 Highlights • Slower pace of organic revenue growth: o Slower growth with large customers o Acceleration with small to mid-sized customers o Continued strength in construction; drop in retail industry growth • Gross margin compression (excluding impact of acquisitions and sales mix): o Shrink
Slide 4: Financial Summary
Financial Summary 4 Amounts in millions, except for earnings per share $646 +13% $21 +9% -10bps $0.26 +13% • Total revenue growth of 13% (4% organic, 9% from acquisitions) • Adjusted EBITDA margin down from SG&A expense added to the organic business in 2015: o SG&A investments start to anniversary i
Slide 5: Gross Margin and SG&A Bridges
5 Gross Margin and SG&A Bridges 22.6% 23.3% 0.9% 0.3% 0.5% Q1 2015 Acquisitions Revenue Mix Higher Pay / Other Q1 2016 Q1 2016 Earnings Results | April 20, 2016 $112 $131 $9 $10 Q1 2015 Acquisitions Organic Business Q1 2016 SG&A Amounts in millions Gross Margin
Slide 6: Staffing Services Segment
Staffing Services Segment1 6 Amounts in millions $602 +10% $20 -20% -120bps • Year-over-year revenue growth of 10% (3% organic) o Step-down in organic revenue growth driven by large customers (flat growth) o Growth of about 10% in small to medium-sized customers and construction o Drop in retail ind
Slide 7: Managed Services Segment
Managed Services Segment1 7 Amounts in millions $44 +84% $9 +154% +560bps • Organic revenue growth of 17% • Acquired RPO business performing ahead of expectation • Adjusted EBITDA growth and margin expansion from recent RPO acquisition Q1 2016 Earnings Results | April 20, 2016 1 Managed Services pri
Slide 8: Debt and Liquidity Highlights
30% 31% 23% 2014 2015 Q1 2016 $180 $216 $144 $202 $246 $166 2014 2015 Q1 2016 Cash Net Debt Total Debt Liquidity Debt to Total Capital Amounts in millions Amounts in millions 8 Debt and Liquidity Highlights $101 $77 $93 $21 $30 $22 $123 $107 $115 2014 2015 Q1 2016 Cash Borrowing Availability Q1 2016
Slide 9: Outlook
Outlook
Slide 10: Full-year 2016 outlook and priorities
1 We are evaluating the impact of this Q2 event and may record an impairment charge in the second quarter which may be material to the consolidated financial statements. This evaluation corresponds with the timing of our annual impairment test completed in the second quarter. 2Taxes at 32%, $0.44 ad
Slide 11: Q2 2016 Outlook Assumptions
Assumptions Revenue Mid-point growth Total Revenue Staffing Services Managed Services $675M to $690M 9% (Flat organic) 7% (-1% organic) 62% (3% organic) • 4% organic revenue growth excluding the impact of largest customer for both total company and Staffing Services Adjusted EBITDA Staffing Services
Slide 12: Key Takeaways
Key Takeaways Q1 2016 Earnings Results | April 20, 2016 12 Strong secular trends (demographics, talent shortage, etc.) support long-term growth prospects Demonstrated history of achieving above-market growth
Slide 13: Appendix
Appendix
Slide 14: Non-GAAP financial measure definitions
EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA excludes interest, taxes, depreciation and amortization from net income. Adjusted EBITDA further excludes from EBITDA non-recurring costs related to acquisition and integration costs as well as Work Opportunity Tax Credit third party