Attached files
| file | filename |
|---|---|
| EX-99.2 - TRUEBLUE EARNINGS RELEASE PRESENTATION - TrueBlue, Inc. | earningspresentationq220.htm |
| EX-99.1 - TRUEBLUE PRESS RELEASE - TrueBlue, Inc. | tbi2017q2pressreleaseexhib.htm |
| 8-K - TRUEBLUE FORM 8-K - TrueBlue, Inc. | tbi2017q2pressrelease.htm |
Forward-Looking Statements
July 2017
TrueBlue at a Glance
July 2017 3
124,000
Clients served annually
with strong diversity1
815,000
People connected to
work during 2016
One of the largest U.S.
industrial staffing providers
#1
Largest global
RPO provider2
2012-2016 Average Return
on Equity4
2012-2016 Adjusted
EBITDA CAGR3
$2.8B
2016 Revenue
20%
Growth
16%
Return
PeopleScout recognized as a
Leader and Star Performer by
Everest, Leader by NelsonHall and
consistently ranked as a Top
Provider by HRO Today
TrueBlue has been named to
Forbes’ list of America’s Most
Trustworthy Companies
Founding member of the
U.S. Chamber of Commerce
Veterans Employment
Advisory Council
Staff Management | SMX charter
member of the U.S. Immigration and
Customs Enforcement IMAGE
Program
1 No single customer accounts for more than 2% of total revenue on a TTM 1/1/17 basis, pro forma for reductions in use of contingent labor by Amazon announced in 2016.
2 Source: Everest Group overall service provider share distribution by annual number of hires (2016).
3 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.
4 Calculated as Adjusted Net Income divided by average shareholder’s equity over the prior four quarters.
Investment Highlights
Specialized Service Offerings to Meet Client Needs
July 2017
7% of Revenue / 20% of Adj. EBITDA2 34% of Revenue / 16% of Adj. EBITDA2 59% of Revenue / 64% of Adj. EBITDA2
1 Also includes management of service provider business, which provides customers with improved quality and spend management of their contingent labor vendors.
2 Revenue and Adjusted EBITDA mix calculations based on FY-2016; Adjusted EBITDA mix calculations exclude Corporate unallocated expenses.
Solving Workforce Challenges Globally
July 2017
complex
global
diverse
age 65
will be almost
double
worker
shortage
growth
robust
workforce
solutions
Construction Manufacturing Transport & Wholesale Retail
In
d
u
s
tr
y
D
y
n
a
m
ic
s
Housing Starts Have Not Kept Pace U.S. Manufacturing Renaissance Wholesale Trade At New High E-commerce Growing % of Retail Sales
Source: U.S. Census Bureau Source: U.S. Board of Governors of the Federal Reserve System (FRB) Source: Bureau of Labor Statistics Source: U.S. Census Bureau
60
65
70
75
80
85
90
95
100
105
110
19
90
19
93
19
96
19
99
20
02
20
05
20
08
20
11
20
14
20
17
Industrial Production
Index
3.0
3.5
4.0
4.5
5.0
5.5
19
90
19
93
19
96
19
99
20
02
20
05
20
08
20
11
20
14
20
17
Transportation and Warehousing Employment
Millions
Strong Position in Attractive Vertical Markets
July 2017
-
500
1,000
1,500
2,000
2,500
150
170
190
210
230
250
270
290
310
330
350
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
20
10
20
15
US Population Housing Permits
Millions Thousands
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
19
93
19
96
19
99
20
02
20
05
20
08
20
11
20
14
20
17
E-commerce % of Retail Sales
7%
Growing Market
Capitalizing on Secular Forces in Industrial Staffing
July 2017
o
o
o
o
Positive
Demographic
Trends
Temp Penetration
Growth
Compelling
Technology
Rise of
E-commerce
On-Shoring
Comeback
1 Source: Staffing Industry Analysts.
2 Source: TrueBlue estimate based on 7% CAGR from 2016 to 2020.
3 Source: Bureau of Labor Statistics.
Strength of TrueBlue’s PeopleScout Business
July 2017
4%
7%
5%
20%
FY-15 FY-16
PeopleScout % of Total Company Results
Revenue Adjusted EBITDA
18%
9%
FY-16FY-15
Adjusted EBITDA Margin3
PeopleScout
TBI Total
(~15% of 2016 revenue came from placements beyond North America)
1 PeopleScout offers recruitment process outsourcing (RPO) as well as management of services providers.
2 Source: Nelson Hall.
3 We have two primary measures of segment performance: revenue from services and segment earnings before interest, taxes, depreciation and amortization (“Segment EBITDA”). There is no difference between
Segment EBITDA and Adjusted EBITDA for PeopleScout for FY 2015; see reconciliation for FY 2016 in the appendix.
3
Disciplined Cash Management and Strong Balance Sheet
July 2017
1 Calculated as net cash provided by operating activities, minus purchases for property and equipment. 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
2 Calculated as Adjusted Net Income divided by average shareholders’ equity at the end of the prior four quarters.
$34
$73
$31
$54
$233
2012 2013 2014 2015 2016
No Debt
0.4x
1.7x 1.7x
0.9x
2012 2013 2014 2015 2016
13%
14%
17% 17% 17%
2012 2013 2014 2015 2016
millions
Strategic Priorities
July 2017
PeopleReady Transition
July 2017
Legacy branch based business transitioned to one brand/one system.
Expanding Scope of Services
• Within our legacy structure, only 12 of
our top 40 markets had access to all 3
service lines.
• PeopleReady will bring more
specialized services to more markets
while leveraging central resources to
streamline operations.
Increasing Operational Agility
• >50% of PeopleReady’s revenue is
generated from customers who
already work with multiple brands;
single point of contact makes it easier.
• One set of operating procedures and
systems provide a better customer
experience empowering staff to move
quickly and capture market share.
Larger Talent Pool
• Associates and customers benefit
from scale when information is visible
across all systems.
• Common information systems and
compelling new technology platforms
(i.e. mobile app) increases our ability
to attract a more diverse population of
workers.
Str
a
tegic R
a
ti
o
nal
e
Priorit
ie
s
JobStack Mobile App – A Competitive Differentiator
July 2017
CUSTOMER
ASSOCIATE
Mobile Technology Feature… Driving Value for TrueBlue…
24/7 order creation / viewing Round-the-clock revenue generation
Real-time order fill rates Improved customer and experience
ratings Lift quality
Worksite ratings Enhanced communication and safety
Control work week / set availability Tap into larger and more diverse talent pool
Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted Net Income
July 2017
53 Weeks
Ended
52 Weeks
Ended
52 Weeks
Ended
52 Weeks
Ended
52 Weeks
Ended
Jan 1, 2017
Dec 25,
2015
Dec 26,
2014
Dec 27,
2013
Dec 28,
2012
Net income (loss) $ (15,251 ) $ 71,247 $ 65,675 $ 44,924 $ 33,629
Acquisition/integration and other costs (1) 12,223 5,135 5,220 7,375 —
Amortization of intangible assets of acquired businesses (2) 27,069 19,903 12,046 4,939 3,095
Goodwill and intangible impairment charge (3) 103,544 — — — —
Tax effective of adjustments to net income (loss) (4) (39,994 ) (7,011 ) (4,834 ) (3,448 ) (867 )
Adjust income taxes to normalized effective rate (5) 606 (1,805 ) (6,747 ) (1,049 ) 5,687
Adjusted net income (6) $ 88,197 $ 87,469 $ 71,360 $ 52,741 $ 41,544
Adjusted net income, per diluted share (6) $ 2.10 $ 2.10 $ 1.73 $ 1.30 $ 1.04
Diluted weighted average shares outstanding 41,968 41,622 41,176 40,502 39,862
1. Acquisition/integration and other costs relate to the acquisition of the recruitment process outsourcing business of Aon Hewitt, which was completed on January 4, 2016, the acquisition of SIMOS, which
was completed on December 1, 2015, the acquisition of Seaton, which was completed on June 30, 2014, the acquisition of MDT, which was completed on February 4, 2013, the acquisition of The Work
Connection, which was completed October 1, 2013 and the acquisition of certain assets of Crowley Transportation Services, which was completed June 2013. In addition, other charges for the fiscal year
ended January 1, 2017, consist of costs of $2.6 million associated with our exit from the Amazon delivery business, $1.3 million adjustment to increase the earn-out associated with the acquisition of
SIMOS, and branch signage write branch signage write-offs of $1.6 million due to our re-branding to PeopleReady.
2. Amortization of intangible assets of acquired businesses as well as accretion expense related to the SIMOS acquisition earn-out.
3. The Goodwill and intangible asset impairment charge for the fiscal year ended January 1, 2017, included $99.3 million of impairment charges relating to our Staff Management | SMX, hrX, and
PlaneTechs reporting units, and write-off of the CLP and Spartan reporting unit trade names/trademarks of $4.3 million due to the re-branding to PeopleReady.
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, costs related
to acquisition/integration and other 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 adjusts 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 net income per diluted share
previously excluded the third-party processing fees associated with generating Work Opportunity Tax Credits.
(Unaudited, in thousands, except per share data)
Reconciliation of U.S. GAAP Net Income (Loss) to EBITDA and Adjusted EBITDA
July 2017
1. 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 costs related to acquisition/integration and other 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 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. Acquisition/integration and other costs relate to the acquisition of the recruitment process outsourcing business of Aon Hewitt, which was completed on January 4, 2016, the acquisition of SIMOS, which
was completed on December 1, 2015, the acquisition of Seaton, which was completed on June 30, 2014, the acquisition of MDT, which was completed on February 4, 2013, the acquisition of The Work
Connection, which was completed October 1, 2013 and the acquisition of certain assets of Crowley Transportation Services, which was completed June 2013. In addition, other charges for the fiscal year
ended January 1, 2017, consist of costs of $2.6 million associated with our exit from the Amazon delivery business, $1.3 million adjustment to increase the earn-out associated with the acquisition of
SIMOS, and branch signage write branch signage write-offs of $1.6 million due to our re-branding to PeopleReady.
3. The Goodwill and intangible asset impairment charge for the fiscal year ended January 1, 2017, included $99.3 million of impairment charges relating to our Staff Management | SMX, hrX, and
PlaneTechs reporting units, and write-off of the CLP and Spartan reporting unit trade names/trademarks of $4.3 million due to the re-branding to PeopleReady.
4. 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.
53 Weeks
Ended
52 Weeks
Ended
52 Weeks
Ended
52 Weeks
Ended
52 Weeks
Ended
Jan. 1 2017 Dec. 25, 2015
Dec. 26,
2014 Dec 27, 2013 Dec 28, 2012
Net income (loss) $ (15,251 ) $ 71,247 $ 65,675 $ 44,924 $ 33,629
Income tax expense (benefit) (5,089 ) 25,200 16,169 16,013 20,976
Interest and other expense (income), net 3,345 1,395 (116 ) (1,354 ) (1,569 )
Depreciation and amortization 46,692 41,843 29,474 20,472 18,890
EBITDA (1) 29,697 139,685 111,202 80,055 71,926
Acquisition/integration and other costs (2) 12,223 5,135 5,220 7,375 —
Goodwill and intangible asset impairment charge (3) 103,544 — — — —
Work Opportunity Tax Credit processing fees (4) 1,858 2,352 3,020 1,276 —
Adjusted EBITDA (1) $ 147,322 $ 147,172 $ 119,442 $ 88,706 $ 71,926
(Unaudited, in thousands)
Reconciliation of Segment EBITDA to Adjusted EBITDA
July 2017
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 charges 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.
4. 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. In addition, other costs for the fiscal year ended January 1, 2017, consist of $2.6 million costs associated with our exit from the Amazon delivery business, $1.3
million adjustment to increase the earn-out associated with the acquisition of SIMOS, and branch signage write-offs of $1.6 million due to our re-branding to PeopleReady.
(Unaudited, in thousands)
53 Weeks Ended
Jan 1, 2017
PeopleReady PeopleManagement PeopleScout
Segment EBITDA (1) $ 101,270 $ (60,452 ) $ 19,116
Goodwill and intangible asset impairment charge (2) 4,275 84,100 15,169
Work Opportunity Tax Credit processing fees (3) 1,858 — —
Acquisition/integration and other costs (4) 1,660 3,909 —
Adjusted EBITDA (1) $ 109,063 $ 27,557 $ 34,285
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flows
(Unaudited, in thousands)
53 Weeks
Ended
52 Weeks
Ended
52 Weeks
Ended
52 Weeks
Ended
52 Weeks
Ended
Jan 1, 2017 Dec 25, 2015 Dec 26, 2014 Dec 27, 2013 Dec 28, 2012
Net cash provided by operating activities $ 261,754 $ 72,072 $ 47,525 $ 86,068 $ 52,323
Capital expenditures (29,042 ) (18,394 ) (16,918 ) (13,003 ) (17,826 )
Free cash flows $ 232,712 $ 53,678 $ 30,607 $ 73,065 $ 34,497