Attached files
| file | filename |
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| EX-99.2 - TRUEBLUE EARNINGS RELEASE PRESENTATION - TrueBlue, Inc. | earningspresentationq120.htm |
| EX-99.1 - TRUEBLUE PRESS RELEASE - TrueBlue, Inc. | tbi2018q1pressreleaseexhib.htm |
| 8-K - TRUEBLUE FORM 8-K - TrueBlue, Inc. | tbi2018q1pressrelease.htm |
April 2018
Forward-Looking Statements
April 2018
Investment Highlights
April 2018 3
Track record of favorable growth and investor returns
Strong free cash flow and balance sheet
TrueBlue at a Glance
April 2018 4
108,000
Customers served annually
with strong diversity1
740,000
People connected to
work during 2017
One of the largest U.S. industrial
staffing providers
#1
Global
RPO provider2
2013-2017 Average Return
on Equity3
2013-2017
Revenue CAGR
$2.5B
2017 Revenue
11%
Growth
16%
Return
PeopleScout named a Leader and
Star Performer by Everest Group for
service delivery, technology and
buyer satisfaction
HRO Today magazine repeatedly
recognizes PeopleScout as a global
market leader
Thousands of veterans hired per
year via internal programs as well as
Hiring Our Heroes and Wounded
Warriors
Recognized as a Corporate
Champion by the Women’s Forum of
New York for board diversity
1 No single customer accounted for more than 3% of total revenue for FY 2017.
2 Source: Everest Group. Overall recruitment process outsourcing rankings by annual number of hires (2017).
3 Calculated as adjusted net income divided by average shareholders’ equity over the prior four quarters.
Three Specialized Segments Meet Diverse Customer Needs
April 2018
On-site contingent
workforce management
solutions1
1 We use the following distinct brands to market our PeopleManagement contingent workforce solutions: Staff Management | SMX, SIMOS Insourcing Solutions and Centerline.
2 Also includes managed service provider business, which provides customers with improved quality and spend management of their contingent labor vendors.
3 Revenue and segment profit calculations based on FY 2017. Starting in FY 2018, we are evaluating performance based on segment revenue and segment profit. Segment profit is comparable to segment adjusted EBITDA amounts reported in prior
periods, and this change did not impact the mix of profit by segment. Segment profit includes revenue, related cost of services, and ongoing operating expenses directly attributable to the reportable segment. Segment profit excludes goodwill and
intangible impairment charges, depreciation and amortization expense, unallocated corporate general and administrative expense, interest, other income and expense, income taxes, and costs not considered to be ongoing costs of the segment.
Revenue mix3 60% 32% 8%
Segment profit3 54% 19% 27%
Margin 5% 3% 21%
Solving Workforce Challenges Globally
April 2018 6
complex
global
diverse
age 65
will be almost
double
worker
shortage
growth
1 Bureau of Labor Statistics Employment Projections: Occupations with the most job growth, 2016-2026. Industrial staffing and RPO jobs: #2: food prep/serving workers, #8: labor, freight, stock, and material movers, #12: construction laborers and
#16: customer service representatives.
2 U.S. Census Bureau, An Aging Nation: The Older Population in the United States (2014).
robust
workforce
solutions
Strong Position in Attractive Vertical Markets
April 2018 7
Construction Manufacturing Transport & Wholesale Retail & Services
In
d
u
s
tr
y
D
y
n
a
m
ic
s
FY-17 Business Mix: 23% FY-17 Business Mix: 26% FY-17 Business Mix: 22% FY-17 Business Mix: 20%
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
-
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%
14%
19
93
19
96
19
99
20
02
20
05
20
08
20
11
20
14
20
17
E-commerce % of Retail Sales
Powerful Secular Forces in Industrial Staffing
April 2018 8
6%
Growing Market
o
o
o
o
Positive
Demographic
Trends
Temporary Help
Penetration Growth
Compelling
Technology
Rise of
E-commerce
On-Shoring
Comeback
1 Source: Staffing Industry Analysts.
2 Source: TrueBlue estimate based on 6% CAGR from 2018 to 2025.
3 Source: Bureau of Labor Statistics.
Segment Strategy Highlights
April 2018
Boost shareholder returns through share repurchase
Grow On-Premise
Solutions
Differentiated offering
Perfect fit for larger
customers with
longer-duration /
strategic need for
contingent workers
Strength in the e-
commerce vertical
Well Positioned
Recognized global leader
High growth market
Attractive margins
Leverage Digital Strategy
Best-in-class proprietary
technology (Affinix™)
Mobile-first, AI-enabled,
cloud-based platform
Streamlines the candidate
sourcing process
Leverage Digital
Strategy
Compelling technology
+ established branch
network
Value creation: 24/7
order fulfilment,
enhanced
customer/worker
experience
15%+ margins on
incremental revenue
JobStackTM Mobile App – A Competitive Differentiator
April 2018
JobStackTM is a next generation mobile app that algorithmically matches workers with
available jobs.
24/7 order creation
Real-time order fill rates
Associate ratings
Worksite ratings
Work week control
Driving Value for TrueBlue Compelling Technology CUSTOMER
ASSOCIATE
Round-the-clock revenue generation
Improved associate experience
Lift associate quality
Enhanced communication & safety
Tap into larger and more diverse talent pool
On-premise and E-commerce
April 2018
E-commerce
Vertical Leadership
Labor intensive pick-and-pack
movement v. traditional bulk pallets
Increasing demand for
PeopleManagement's ability to
deliver a flexible, fully sourced and
managed workforce
Driving
On-premise
Perfect fit for larger customers
with longer-duration / strategic need
for contingent workers
Staff Management is
PeopleManagement's flagship on-
premise solution and a recognized
industry leader
PeopleScout: Attractive Margin and Rapid Growth
April 2018
21%
9%
FY-17FY-15
Segment Profit Margin
PeopleScout
TBI Total
Industry Leadership
o #1 global provider of enterprise RPO1
o Emerging healthcare vertical strength
Differentiated Service
Proprietary technology drives
value-add recruitment capabilities
Growing Market
12% global market growth CAGR2
Global Prospects
Opportunity to broaden footprint in
Europe and Asia Pacific
1 Source: Everest Group. Overall RPO rankings by annual number of hires (2017).
2 Source: NelsonHall (2018). Represents estimated market CAGR from 2017-2022.
4%
8%
5%
27%
FY-15 FY-17
PeopleScout % of Total Company Results
Revenue Segment Profit
Well Positioned to Boost Shareholder Returns with Buybacks
1 $100 million stock repurchase authorization announced on 30 October, 2017. $93 million remaining under the authorization as of 31 March, 2017.
2 Calculated as net cash provided by operating activities, minus purchases for property and equipment.
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 shareholders’ equity at the end of the prior four quarters.
$31
$54
$233
$78
2014 2015 2016 2017
1.7x 1.7x
0.9x 1.0x
2014 2015 2016 2017
17% 17% 17%
13%
2014 2015 2016 2017
millions
April 2018 15
NON-GAAP FINANCIAL MEASURES AND NON-GAAP RECONCILIATIONS
In addition to financial measures presented in accordance with U.S. GAAP, we monitor certain non-GAAP key financial measures. The presentation of these
non-GAAP financial measures is used to enhance the understanding of certain aspects of our financial performance. It is not meant to be considered in
isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP, and may not be comparable to
similarly titled measures of other companies.
Non-GAAP Measure Definition Purpose of Adjusted Measures
EBITDA and Adjusted EBITDA EBITDA excludes from net income (loss):
- interest and other income (expense), net,
- income taxes, and
- depreciation and amortization.
Adjusted EBITDA, further excludes:
- acquisition/integration and other costs,
- goodwill and intangible asset impairment
charge, and
- Work Opportunity Tax Credit third-party
processing fees.
- Enhances comparability on a consistent
basis and provides investors with useful
insight into the underlying trends of the
business.
- Used by management to assess
performance and effectiveness of our
business strategies.
- Provides a measure, among others, used
in the determination of incentive
compensation for management.
Adjusted net income and Adjusted net
income, per diluted share
Net income (loss) and net income (loss) per
diluted share, excluding:
- 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
- adjusted income taxes to the expected
effective tax rate.
- Enhances comparability on a consistent
basis and provides investors with useful
insight into the underlying trends of the
business.
- Used by management to assess
performance and effectiveness of our
business strategies.
Free cash flow Net cash provided by operating activities,
minus cash purchases for property and
equipment.
- Used by management to assess cash
flows
1. RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO ADJUSTED NET
INCOME AND ADJUSTED NET INCOME, PER DILUTED SHARE (Unaudited)
April 2018 16
2017 2016 2015 2014
52 Weeks Ended 53 Weeks Ended 52 Weeks Ended 52 Weeks Ended
(in thousands, except for per share data)* Dec 31, 2017 Jan 1, 2017 Dec 25, 2015 Dec 26, 2014
Net income (loss) $ 55,456 $ (15,251 ) $ 71,247 $ 65,675
Acquisition/integration and other costs (1) 162 12,223 5,135 5,220
Goodwill and intangible asset impairment charge (2) — 103,544 — —
Amortization of intangible assets of acquired businesses (3) 22,290 27,069 19,903 12,046
Tax effect of adjustments to net income (loss) (4) (6,287 ) (39,994 ) (7,011 ) (4,834 )
Adjustment of income taxes to normalized effective rate (5) 380 606 (1,805 ) (6,747 )
Adjusted net income $ 72,001 $ 88,197 $ 87,469 $ 71,360
Adjusted net income, per diluted share $ 1.74 $ 2.10 $ 2.10 $ 1.73
Diluted weighted average shares outstanding 41,441 41,968 41,622 41,176
2. RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO EBITDA AND
ADJUSTED EBITDA (Unaudited)
2017 2016 2015 2014
52 Weeks Ended 53 Weeks Ended 52 Weeks Ended 52 Weeks Ended
(in thousands) Dec 31, 2017 Jan 1, 2017 Dec 25, 2015 Dec 26, 2014
Net income (loss) $ 55,456 $ (15,251 ) $ 71,247 $ 65,675
Income tax expense (benefit) 22,094 (5,089 ) 25,200 16,169
Interest and other income (expense), net 14 3,345 1,395 (116 )
Depreciation and amortization 46,115 46,692 41,843 29,474
EBITDA 123,679 29,697 139,685 111,202
Acquisition/integration and other costs (1) 162 12,223 5,135 5,220
Goodwill and intangible asset impairment charge (2) — 103,544 — —
Work Opportunity Tax Credit processing fees (6) 805 1,858 2,352 3,020
Adjusted EBITDA $ 124,646 $ 147,322 $ 147,172 $ 119,442
See the last slide of the appendix for footnotes.
April 2018 17
3. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO
FREE CASH FLOWS (Unaudited)
2017 2016 2015 2014
52 Weeks Ended 53 Weeks Ended 52 Weeks Ended 52 Weeks Ended
(in thousands) Dec 31, 2017 Jan 1, 2017 Dec 25, 2015 Dec 26, 2014
Net cash provided by operating activities $ 99,851 $ 261,754 $ 72,072 $ 47,525
Capital expenditures (21,958 ) (29,042 ) (18,394 ) (16,918 )
Free cash flows $ 77,893 $ 232,712 $ 53,678 $ 30,607
See the last slide of the appendix for footnotes.
April 2018 18
Footnotes:
1. Acquisition/integration and other costs related 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 December 31, 2017, include a workforce
reduction charge of $2.5 million primarily associated with employee reductions in the PeopleReady business, offset by $2.3 million of workers' compensation benefit.
The workers' compensation benefit is associated with the favorable settlement of insurance coverage associated with a former insurance company and other items not
considered part of our core operations. 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. 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. Note, our PeopleScout and hrX service lines were combined during fiscal 2016 and now represent a single operating unit (PeopleScout).
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) using the expected rate of 28 percent.
5. Adjustment of the effective income tax rate to the expected rate of 28 percent.
6. 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.