Attached files
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| EX-99.3 - TRUEBLUE INVESTOR PRESENTATION - TrueBlue, Inc. | investorroadshowpresenta.htm |
| EX-99.1 - TRUEBLUE PRESS RELEASE - TrueBlue, Inc. | tbi2017q2pressreleaseexhib.htm |
| 8-K - TRUEBLUE FORM 8-K - TrueBlue, Inc. | tbi2017q2pressrelease.htm |
www.TrueBlue.com
www.TrueBlue.com
Forward-Looking Statements
www.TrueBlue.com
Q2 2017 Summary
Revenue consistent with management expectation
Total revenue decline of -9% or -5% excluding Amazon1
o PeopleReady -9%
o PeopleManagement -12%, or +2% excluding Amazon
o PeopleScout -1%
Disciplined pricing and expense management
Gross margin up +20 bps
Operating expense down -8%
Effective management of capital
Total debt down -$26 million from 2016, multiple to TTM Adjusted EBITDA2 of 0.8x
$16 million of common stock repurchased
The right strategic priorities
PeopleReady – Simplified brand structure and innovative mobile strategy (JobStack)
PeopleManagement – Productivity solutions and e-commerce focus
PeopleScout – High growth market, global leadership position, attractive margins
1 Due to a previously announced reduction in the scope of services with Amazon, the company is providing results excluding this customer to help investors compare the company's underlying results with prior periods.
2 See the appendix to this presentation and “Financial Information” in the Investors section of our website at www.trueblue.com for a definition and full reconciliation of non-GAAP financial measures to GAAP financial results.
www.TrueBlue.com
Financial Summary
Revenue -9% largely driven by Amazon, -5% excluding Amazon
o Stable intra-quarter trends
Adjusted EBITDA and margin down from negative operating leverage
o Q2 2017 was the first quarter without an Adjusted EBITDA headwind from Amazon
o No Amazon headwind expected in back half of 2017 (Adjusted EBITDA from Amazon
was flat in the back half of 2016)
Amounts in millions, except per share data Q2 2017 Y/Y Change
Revenue $610
-9%
-5% ex-Amazon
Net Income $13 NM
Net Income Per Diluted Share $0.31 NM
Adjusted Net Income1 $17 -22%
Adj. Net Income Per Diluted Share1 $0.42 -22%
Adjusted EBITDA1 $31 -17%
Adjusted EBITDA Margin 5.0% -50 bps
1 See the appendix to this presentation and “Financial Information” in the Investors section of our website at www.trueblue.com for a definition and full reconciliation of non-GAAP financial measures to GAAP financial results.
www.TrueBlue.com
Gross Margin and SG&A Bridges
SG&A
Amounts in millions
Gross Margin
25.3% 25.5%
0.3% 0.5%
Q2 2016 PeopleScout Staffing Q2 2017
$136
$125
$2
$5
$4
Q2 2016 EBITDA Addbacks Amazon Core Business Ex-
Amazon
Q2 2017
1
1 Staffing includes our PeopleReady and PeopleManagement segments.
2 Primarily acquisition and integration costs associated with our acquisition of the RPO division of Aon Hewitt.
2
www.TrueBlue.com
Note: Figures may not sum to consolidated totals due to rounding.
1 Since the business was acquired in June 2014.
Results by Segment
Amounts in millions PeopleReady PeopleManagement PeopleScout
Revenue $371 $193 $47
% Growth -9% -12%
+2% ex-Amazon
-1%
Adj. EBITDA $19 $6 $10
% Margin
Y/Y Change
5.2%
-220 bps
3.3%
+140 bps
21.8%
-230 bps
Notes: Volume headwinds from
pricing strategy
Declining sales trends in
manufacturing
Execution on mobile strategy
with promising early results
Revenue growth excluding
Amazon
Year-over-year Adjusted
EBITDA margin expansion
Amazon EBITDA headwinds
are fully behind us and
revenue headwinds are
diminishing
Volume declines at select
customers, expect growth in
Q3
Second highest Adjusted
EBITDA margin on record1
Year-over-year Adjusted
EBITDA margin down due to
acquisition related benefit in
Q2 2016
www.TrueBlue.com
$216
$103 $82
$30
$35
$29
$246
$138
$111
2015 2016 Q2 2017
Net Debt Cash
$77
$136 $128
$30
$35
$29
$107
$171
$157
2015 2016 Q2 2017
Borrowing Availability Cash
Lower Debt and Ample Liquidity
31%
21% 17%
2015 2016 Q2 2017
Total Debt
Liquidity
Debt to Total
Capital1
Amounts in millions
Amounts in millions
Note: Balances as of fiscal period end.
1 Calculated as total debt divided by the sum of total debt plus shareholders’ equity.
www.TrueBlue.com
Segment Strategy Highlights
Rollout of mobile
strategy continues
(JobStack)
o Worker app is being
rolled out across
branch network
o Promising trends on
worker app adoption
o Recently launched
new client app
Productivity solutions
enhance future growth
prospects
o Compelling value
proposition
o SIMOS acquisition at
the end of 2015
bolstered our existing
capabilities
o Differentiated service,
high EBITDA margin
o Perfect fit with the
growing world of
e-commerce
Attractive margin
business with
compelling value
proposition
Global RPO market
currently experiencing
double-digit growth
Actively pursuing
organic revenue growth
plus opportunistic
international
acquisitions to improve
win rates on multi-
continent deals
www.TrueBlue.com
www.TrueBlue.com
Q3 2017 Outlook
Amounts in millions, except per share data Outlook Comments
Revenue
Growth Ranges
Total Revenue
PeopleReady
PeopleManagement
PeopleScout
$645 to $660
-7% to -5%
-8% to -6%
-9% to -7%
5% to 8%
• Total revenue decline was -9% in Q2 2017
• Ex-Amazon growth of -4% to -2% v. -5% in Q2 2017
EPS
Adjusted EPS
$0.46 to $0.51
$0.55 to $0.60
• Assumes income tax rate of 28%
• Assumes diluted weighted average shares outstanding of 41.5 million
Adjusted EBITDA $38.5 to $41.5
D&A / CapEx $12 / $7
www.TrueBlue.com
www.TrueBlue.com
Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted Net Income
and Adjusted Net Income Per Share
* Totals may not sum due to rounding.
1. Acquisition and integration costs relate to the acquisition of the recruitment process outsourcing business of Aon Hewitt, which was completed on January 4, 2016, and the acquisition of SIMOS, which
was completed on December 1, 2015.
2. The goodwill and intangible asset impairment charge for the thirteen weeks ended June 24, 2016, relate to our Staff Management | SMX, hrX, and PlaneTechs reporting units. The impairment charge of
$99 million is equivalent to $80 million after tax or $1.91 per diluted share.
3. Amortization of intangible assets of acquired businesses as well as accretion expense related to the SIMOS acquisition earn-out.
4. Total tax effect of each of the adjustments to U.S. GAAP Net income (loss) per diluted share using the ongoing rate of 28%.
5. Adjusts the effective income tax rate to the expected ongoing rate of 28%.
6. Adjusted net income and Adjusted net income per diluted share are non-GAAP financial measures, which exclude from Net income (loss) and Net income (loss) on a per diluted share basis, acquisition
and integration costs, goodwill and intangible asset impairment charge, amortization of intangibles of acquired businesses as well as accretion expense related to acquisition earn-out, tax effect of each
adjustment to U.S. GAAP Net income (loss), and adjust income taxes to the expected ongoing effective tax rate. Adjusted net income and Adjusted net income per diluted share are key measures used by
management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. Adjusted net income and Adjusted net
income per diluted share should not be considered measures of financial performance in isolation or as an alternative to net income (loss) or net income (loss) per diluted share in the Consolidated
Statements of Operations in accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies. Adjusted net income and Adjusted net income per diluted share
previously excluded the third-party processing fees associated with generating Work Opportunity Tax Credits.
13 Weeks Ended
Jul 2, 2017 Jun 24, 2016 Q3 2017 Outlook*
Net income (loss) $ 13,134 $ (63,735 ) $ 19,000 — $ 21,100
Acquisition and integration costs (1) — 2,319 —
Goodwill and intangible asset impairment charge (2) — 99,269 —
Amortization of intangible assets of acquired businesses (3) 5,742 7,112 5,300
Tax effective of adjustments to net income (loss) (4) (1,608 ) (30,436 ) (1,500)
Adjust income taxes to normalized effective rate (5) 110 7,782 —
Adjusted net income (6) $ 17,378 $ 22,311 $ 22,800 — $ 25,000
Adjusted net income, per diluted share (6) $ 0.42 $ 0.54 $ 0.55 — $ 0.60
Diluted weighted average shares outstanding 41,856 41,880 41,500
(Unaudited, in thousands, except for per share data)
www.TrueBlue.com
Reconciliation of U.S. GAAP Net Income (Loss) to EBITDA and Adjusted EBITDA
Note : See prior slide for footnotes (1) and (2).
7. EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA excludes from Net income (loss) interest, taxes, depreciation and amortization. Adjusted EBITDA further excludes from
EBITDA acquisition and integration costs, goodwill and intangible asset impairment charge, and Work Opportunity Tax Credit third-party processing fees. EBITDA and Adjusted EBITDA are key
measures used by management to assess performance and, in our opinion, enhance comparability and provide investors with useful insight into the underlying trends of the business. EBITDA and
Adjusted EBITDA should not be considered measures of financial performance in isolation or as an alternative to Income (loss) from operations in the Consolidated Statements of Operations in
accordance with U.S. GAAP, and may not be comparable to similarly titled measures of other companies.
8. These third-party processing fees are associated with generating the Work Opportunity Tax Credits, which are designed to encourage employers to hire workers from certain targeted groups with higher
than average unemployment rates and reduce our income taxes.
* Totals may not sum due to rounding.
13 Weeks Ended
Jul 2, 2017 Jun 24, 2016 Q3 2017 Outlook*
Net income (loss) $ 13,134 $ (63,735 ) $ 19,000 — $ 21,100
Income tax expense (benefit) 5,260 (13,978 ) 7,400 — 8,200
Interest and other expense (income), net (155 ) 887 (200)
Depreciation and amortization 12,287 11,694 12,200
EBITDA (7) 30,526 (65,132 ) 38,300 — 41,300
Acquisition and integration costs (1) — 2,319 —
Goodwill and intangible asset impairment charge (2) — 99,269 —
Work Opportunity Tax Credit processing fees (8) 16 351 200
Adjusted EBITDA (7) $ 30,542 $ 36,807 $ 38,500 — $ 41,500
(Unaudited, in thousands)
www.TrueBlue.com
Reconciliation of Segment EBITDA to Adjusted EBITDA
13 Weeks Ended
Jul 2, 2017 Jun 24, 2016
PeopleReady PeopleManagement PeopleScout PeopleReady PeopleManagement PeopleScout
Segment EBITDA (1) $ 19,154 $ 6,286 $ 10,129 $ 29,543 $ (80,091 ) $ (3,841 )
Goodwill and intangible
asset impairment charge (2) — — — — 84,100 15,169
Work Opportunity Tax
Credit processing fees (3) 16 — — 351 — —
Adjusted EBITDA (1) $ 19,170 $ 6,286 $ 10,129 $ 29,894 $ 4,009 $ 11,328
1. Segment earnings before interest, taxes, depreciation and amortization ("Segment EBITDA") is a primary measure of segment performance. Segment EBITDA includes net sales to third parties, related
cost of sales, and selling, general and administrative expenses directly attributable to the reportable segment together with certain allocated corporate general and administrative expenses. Segment
EBITDA excludes unallocated corporate general and administrative expenses. Adjusted EBITDA by segment is a non-GAAP financial measure and further excludes acquisition/integration and other costs,
goodwill and intangible asset impairment charge, and Work Opportunity Tax Credit third-party processing fees. Adjusted EBITDA by segment is a key measure used by management to assess
performance and, in our opinion, enhances comparability and provides investors with useful insight into the underlying trends of the business. Adjusted EBITDA by segment should not be considered a
measure of financial performance in isolation or as an alternative to Income (loss) from operations in the Consolidated Statements of Operations in accordance with U.S. GAAP, and may not be
comparable to similarly titled measures of other companies.
2. The goodwill and intangible asset impairment charge for the thirteen weeks ended June 24, 2016, relate to our Staff Management | SMX, hrX, and PlaneTechs reporting units. The impairment charge of
$99 million is equivalent to $80 million after tax or $1.91 per diluted share.
3. These third-party processing fees are associated with generating the Work Opportunity Tax Credits, which are designed to encourage employers to hire workers from certain targeted groups with higher
than average unemployment rates and reduce our income taxes.
(Unaudited, in thousands)