Form 8-K TrueBlue, Inc. For: Jul 22
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 22, 2015
TRUEBLUE, INC.
(Exact Name of Registrant as Specified in Its Charter)
Washington
(State or Other Jurisdiction
of Incorporation)
001-14543 | 91-1287341 | |
(Commission File Number) | (IRS Employer Identification No.) |
1015 A Street, Tacoma, Washington | 98402 | |
(Address of Principal Executive Offices) | (Zip Code) |
(253) 383-9101
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
On July 22, 2015, TrueBlue, Inc. (the “Company”) issued a press release (the “Press Release”) reporting its financial results for the second quarter ended June 26, 2015, and revenue and earnings guidance for the third quarter of 2015, a copy of which is attached hereto as Exhibit 99.1 and the contents of which are incorporated herein by this reference. Also attached to this report as Exhibit 99.2 is a slide presentation relating to the financial results for the second quarter ended June 26, 2015 (the “Earnings Results Presentation”), which will be discussed by management of the Company on a live conference call at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on Wednesday, July 22, 2015. The Earnings Results Presentation is also available on the Company's website, www.trueblue.com.
In accordance with General Instruction B.2. of Form 8-K, the information contained above in this report (including the Press Release and the Earnings Results Presentation) shall not be deemed “Filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall the Press Release or the Earnings Results Presentation be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. This report will not be deemed a determination or an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD.
Item 7.01. | Regulation FD Disclosure. |
We are also attaching our Q3 2015 Investor Presentation (the "Investor Presentation") to this report as Exhibit 99.3, which we will reference in our Q2 2015 earnings results discussion and which may be used in future investor conferences. The Investor Presentation is also available on the Company's website, www.trueblue.com.
In accordance with General Instruction B.2. of Form 8-K, the information contained above in this report (including the Investor Presentation) shall not be deemed “Filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall the Investor Presentation be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. This report will not be deemed a determination or an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD.
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits |
99.1 | Press Release of the Company dated July 22, 2015 |
99.2 | Earnings Results Presentation |
99.3 | Investor Presentation |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TRUEBLUE, INC. | ||||
(Registrant) | ||||
Date: | July 22, 2015 | By: | /s/ Derrek L. Gafford | |
Derrek L. Gafford | ||||
Chief Financial Officer and Executive Vice President |
EXHIBIT 99.1
TRUEBLUE REPORTS RECORD SECOND QUARTER 2015 RESULTS
Revenue and Adjusted Net Income per Share Growth of Nearly 40 Percent
TACOMA, WA-July 22, 2015--TrueBlue, Inc. (NYSE: TBI) announced today that revenue for the second quarter of 2015 was $628 million, an increase of 38 percent, compared to revenue of $453 million for the second quarter of 2014. Adjusted net income per share* for the second quarter of 2015 was $0.45, up from $0.32 a year ago, an increase of 39 percent. Adjusted EBITDA* for the second quarter of 2015 was $36.7 million compared to $25.2 million a year ago, an increase of 46 percent.
“During the quarter, we saw solid demand for both our legacy staffing and acquired brands,” said TrueBlue CEO Steve Cooper. “The addition of Staff Management | SMX, PeopleScout and HRX has grown TrueBlue’s client list by providing customers with workforce management and recruiting process outsourcing (RPO) solutions with worldwide capabilities.”
Cooper expressed confidence that the company’s staffing, workforce management and RPO businesses, combined with its acquisition strategy, have placed TrueBlue in position to drive strong revenue growth.
“We are seeing the benefits of our strategic acquisitions, which are complementing the demand for our core business,” Cooper said. “The end of the second quarter marked the one-year anniversary of the acquisition of Seaton, and as we look back at it a year later, we are extremely pleased with every aspect of the acquisition. PeopleScout, Staff Management | SMX and HRX met all performance expectations while adding top talent and expanding our technological capabilities.”
For the third quarter of 2015, the company estimates revenue in the range of $658 million to $673 million and adjusted net income per share of $0.52 to $0.58.
Management will discuss second quarter 2015 results on a conference call at 2 p.m. PT (5 p.m. ET), today, Wednesday, July 22. The conference call can be accessed on TrueBlue’s web site: www.trueblue.com.
*See the financial statements accompanying the release for more information on non-GAAP terms.
About TrueBlue
TrueBlue (NYSE: TBI) is a leading provider of specialized workforce solutions, helping clients improve growth and performance by providing staffing, workforce management, and recruitment process outsourcing solutions. The company’s specialized workforce solutions meet clients’ needs for a reliable, efficient workforce in a wide variety of industries. TrueBlue connects as many as 750,000 people to work each year. Learn more at www.trueblue.com.
Forward-looking Statements
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “should,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates,” and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Examples of such factors can be found in our reports filed with the SEC, including the information under the heading ‘Risk Factors’ in our Annual Report on Form 10-K for the fiscal year ended Dec. 26, 2014. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
Contacts:
Derrek Gafford, EVP & CFO
253-680-8214
TRUEBLUE, INC.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||
June 26, 2015 | June 27, 2014 | June 26, 2015 | June 27, 2014 | ||||||||||||
Revenue from services | $ | 627,714 | $ | 453,227 | $ | 1,201,029 | $ | 849,290 | |||||||
Cost of services | 475,748 | 333,644 | 919,227 | 630,148 | |||||||||||
Gross profit | 151,966 | 119,583 | 281,802 | 219,142 | |||||||||||
Selling, general and administrative expenses | 117,859 | 96,354 | 229,452 | 188,336 | |||||||||||
Depreciation and amortization | 10,397 | 5,247 | 20,917 | 10,408 | |||||||||||
Income from operations | 23,710 | 17,982 | 31,433 | 20,398 | |||||||||||
Interest and other income (expense), net | (202 | ) | 450 | (736 | ) | 794 | |||||||||
Income before tax expense | 23,508 | 18,432 | 30,697 | 21,192 | |||||||||||
Income tax expense | 6,235 | 2,350 | 7,708 | 3,453 | |||||||||||
Net income | $ | 17,273 | $ | 16,082 | $ | 22,989 | $ | 17,739 | |||||||
Net income per common share: | |||||||||||||||
Basic | $ | 0.42 | $ | 0.39 | $ | 0.56 | $ | 0.44 | |||||||
Diluted | $ | 0.42 | $ | 0.39 | $ | 0.55 | $ | 0.43 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 41,240 | 40,739 | 41,135 | 40,655 | |||||||||||
Diluted | 41,475 | 40,969 | 41,472 | 40,934 |
TRUEBLUE, INC.
SELECTED FINANCIAL DATA
(Unaudited, in thousands)
13 Weeks Ended | |||||||||||||||
June 26, 2015 | June 27, 2014 | ||||||||||||||
Legacy TrueBlue | Seaton (1) | Total Company | Legacy TrueBlue | ||||||||||||
Revenue from services | $ | 459,707 | $ | 168,007 | $ | 627,714 | $ | 453,227 | |||||||
Adjusted EBITDA (2) | 29,188 | 7,550 | 36,738 | 25,217 |
(1) Seaton was acquired effective June 30, 2014. Therefore, the comparative prior year amounts are not presented.
(2) Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA excludes from net income, interest, taxes, depreciation and amortization, and non-recurring costs related to the purchase, integration, reorganization, and shutdown activities related to acquisitions. See reconciliation of GAAP Net income to Adjusted EBITDA below.
(3) Commencing with the third quarter of 2015 we will anniversary the Seaton acquisition and accordingly, will discontinue presenting selected financial data for legacy TrueBlue and Seaton and commence presenting comparative selected segment financial data.
TRUEBLUE, INC.
SEGMENT DATA
(Unaudited, in thousands)
13 Weeks Ended | |||
June 26, 2015 | |||
Revenue from services | |||
Staffing Services | $ | 601,103 | |
Managed Services | 26,611 | ||
Total Company | $ | 627,714 | |
EBITDA (1) | |||
Staffing Services | $ | 38,834 | |
Managed Services | 4,326 | ||
43,160 | |||
Corporate unallocated | (6,422 | ) | |
Adjusted EBITDA (1) | 36,738 | ||
Non-recurring one-time costs (2) | (2,631 | ) | |
34,107 | |||
Depreciation and amortization | 10,397 | ||
Interest expense, net | 202 | ||
Income before tax expense | $ | 23,508 |
(1) 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 the purchase, integration, reorganization and shutdown activities related to acquisitions. EBITDA and Adjusted EBITDA are key measures used by management in evaluating performance. 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 GAAP, and, as presented, may not be comparable to similarly titled measures of other companies.
(2) Non-recurring acquisition and integration costs include the acquisition and integration of Seaton, which was completed on June 30, 2014, the first business day of our third quarter of fiscal 2014.
TRUEBLUE, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
June 26, 2015 | December 26, 2014 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 21,288 | $ | 19,666 | |||
Marketable securities | — | 1,500 | |||||
Accounts receivable, net | 324,021 | 359,903 | |||||
Other current assets | 28,376 | 34,738 | |||||
Total current assets | 373,685 | 415,807 | |||||
Property and equipment, net | 56,805 | 61,392 | |||||
Restricted cash and investments | 164,673 | 168,426 | |||||
Other assets, net | 412,814 | 421,046 | |||||
Total assets | $ | 1,007,977 | $ | 1,066,671 | |||
Liabilities and shareholders' equity | |||||||
Current liabilities | $ | 192,116 | $ | 187,230 | |||
Long-term debt, less current portion | 99,750 | 199,383 | |||||
Other long-term liabilities | 219,675 | 210,724 | |||||
Total liabilities | 511,541 | 597,337 | |||||
Shareholders' equity | 496,436 | 469,334 | |||||
Total liabilities and shareholders' equity | $ | 1,007,977 | $ | 1,066,671 |
TRUEBLUE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Twenty-six weeks ended | |||||||
June 26, 2015 | June 27, 2014 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 22,989 | $ | 17,739 | |||
Adjustments to reconcile net income to net cash from operating activities: | |||||||
Depreciation and amortization | 20,917 | 10,408 | |||||
Provision for doubtful accounts | 3,976 | 6,286 | |||||
Stock-based compensation | 5,769 | 4,987 | |||||
Deferred income taxes | (1,537 | ) | (4,088 | ) | |||
Other operating activities | 678 | (54 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 31,906 | (15,180 | ) | ||||
Income taxes | 5,035 | 3,647 | |||||
Other assets | 1,474 | (66 | ) | ||||
Accounts payable and other accrued expenses | 5,919 | (566 | ) | ||||
Accrued wages and benefits | 2,603 | 5,291 | |||||
Workers’ compensation claims reserve | 4,463 | (792 | ) | ||||
Other liabilities | 2,506 | 1,310 | |||||
Net cash provided by operating activities | 106,698 | 28,922 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (7,459 | ) | (6,113 | ) | |||
Purchases of marketable securities | — | (25,057 | ) | ||||
Sales and maturities of marketable securities | 1,500 | 36,175 | |||||
Change in restricted cash and cash equivalents | 8,227 | 19,007 | |||||
Purchases of restricted investments | (12,959 | ) | (18,196 | ) | |||
Maturities of restricted investments | 7,504 | 7,202 | |||||
Net cash provided by (used in) investing activities | (3,187 | ) | 13,018 | ||||
Cash flows from financing activities: | |||||||
Net proceeds from stock option exercises and employee stock purchase plans | 837 | 1,349 | |||||
Common stock repurchases for taxes upon vesting of restricted stock | (3,183 | ) | (2,665 | ) | |||
Net change in revolving credit facility | (98,500 | ) | — | ||||
Payments on debt and other liabilities | (1,133 | ) | (1,133 | ) | |||
Other | 961 | 1,269 | |||||
Net cash used in financing activities | (101,018 | ) | (1,180 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (871 | ) | 86 | ||||
Net change in cash and cash equivalents | 1,622 | 40,846 | |||||
CASH AND CASH EQUIVALENTS, beginning of period | 19,666 | 122,003 | |||||
CASH AND CASH EQUIVALENTS, end of period | $ | 21,288 | $ | 162,849 |
TRUEBLUE, INC.
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
RECONCILIATION OF GAAP NET INCOME PER DILUTED SHARE TO ADJUSTED NET INCOME PER DILUTED SHARE
(Unaudited, in thousands, except for per share data)
13 Weeks Ended | |||||||
June 26, 2015 | June 27, 2014 | ||||||
GAAP net income | $ | 17,273 | $ | 16,082 | |||
Income tax expense | 6,235 | 2,350 | |||||
Interest expense (income), net | 202 | (450 | ) | ||||
Income from operations | 23,710 | 17,982 | |||||
Depreciation and amortization | 10,397 | 5,247 | |||||
EBITDA (4) | 34,107 | 23,229 | |||||
Non-recurring acquisition and integration costs (1) | 2,631 | 1,987 | |||||
Adjusted EBITDA (4) | $ | 36,738 | $ | 25,216 | |||
GAAP net income per diluted share | $ | 0.42 | $ | 0.39 | |||
Non-recurring acquisition and integration costs, net of tax (1) | 0.04 | 0.03 | |||||
Amortization of intangible assets of acquired businesses, net of tax (2) | 0.07 | 0.02 | |||||
Adjust income taxes to marginal rate (3) | (0.08 | ) | (0.12 | ) | |||
Adjusted net income per diluted share (5) | $ | 0.45 | $ | 0.32 | |||
Diluted weighted average shares outstanding | 41,475 | 40,969 |
(1) Non-recurring acquisition and integration costs consist of the acquisition of Seaton, which was completed on June 30, 2014, the first business day of our third quarter of fiscal 2014.
(2) Amortization of intangible assets of acquired businesses.
(3) Adjust income taxes to a marginal rate of 40%.
(4) 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 the purchase, integration, reorganization and shutdown activities related to acquisitions. EBITDA and Adjusted EBITDA are key measures used by management in evaluating performance. 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 GAAP, and, as presented, may not be comparable to similarly titled measures of other companies.
(5) Adjusted net income per diluted share is a non-GAAP financial measure which excludes from net income on a per diluted share basis non-recurring costs related to the purchase, integration, reorganization and shutdown activities related to acquisitions, net of tax, amortization of intangibles of acquired businesses, net of tax and adjusts income taxes to a marginal rate of 40%. Adjusted net income per diluted share is a key measure used by management in evaluating performance and communicating comparable results. Adjusted net income per diluted share should not be considered a measure of financial performance in isolation or as an alternative to net income per diluted share in the Consolidated Statements of Operations in accordance with GAAP, and, as presented, may not be comparable to similarly titled measures of other companies.
Q2 2015 Earnings Results July 22, 2015
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 financial performance. These forward-looking statements are based upon our current expectations, and our actual results may differ materially from those described or contemplated in the forward–looking statements. Factors that may cause our actual results to differ materially from those contained in the forward-looking statements, include without limitation the following: 1) national and global economic conditions, including the impact of changes in national and global credit markets and other changes that affect our customers; 2) our ability to continue to attract and retain customers and maintain profit margins in the face of new and existing competition; 3) new laws and regulations that could have a materially adverse effect on our operations and financial results; 4) increased costs and collateral requirements in connection with our insurance obligations, including workers’ compensation insurance; 5) our continuing ability to comply with the financial covenants of our credit agreement; 6) our ability to attract and retain qualified employees in key positions or to find temporary and permanent employees with the right skills to fulfill the needs of our customers; 7) our ability to successfully complete and integrate acquisitions that we may make; and 8) other risks described in our most recent filings with the Securities and Exchange Commission. Use of estimates and forecasts: Any references made to fiscal 2015 are based on management guidance issued July 22, 2015, and are included for informational purposes only and are not an update or reaffirmation. We assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. Any other reference to future financial estimates are included for informational purposes only and subject to risk factors discussed in our most recent filings with the Securities Exchange Commission. Financial Comparisons All comparisons are to prior year periods unless stated otherwise. Q2 2015 Earnings Results | July 22, 2015 2
Q2 2015 HIGHLIGHTS • Record Q2 Revenue and Adjusted EBITDA 1 results • Adjusted EBITDA $3M above expectation • Impressive Adjusted EBITDA margin expansion Driven by cost discipline and operating leverage Consolidated expansion = 30 bps Legacy TrueBlue expansion = 80 bps • End of Q2 2015 marks the anniversary of the Seaton acquisition 2 Deal delivers on all expectations 3 1 See Appendix for the definition of this non-GAAP financial term. 2 Note: Seaton was acquired on June 30, 2014. Q2 2015 Earnings Results | July 22, 2015
Q2 2015 HIGHLIGHTS Revenue Adjusted EBITDA Adjusted EBITDA Margin Adjusted Earnings Per Share 1 $ 628 $ 37 5.9% $ 0.45 Q2 2015 CHANGE 4 1 See Appendix for the definition of this non-GAAP financial term. 2 Adjusted Earnings Per Share is adjusted to exclude this tax credit benefit. +38% +46% +30 bps +39% Q2 2015 Earnings Results | July 22, 2015 Amounts in millions, except for earnings per share. • 37% revenue growth from acquired Seaton business • 1% revenue growth from Legacy TrueBlue operations • Revenue $7M under expectation from a production decrease with one customer Not expected to impact future revenue trends • Adjusted EBITDA margin improvement driven by Legacy TrueBlue • Income tax benefit of $2M from additional tax credits 2
Q2 2015 GROSS MARGIN AND ADJUSTED EBITDA MARGIN BRIDGES GROSS MARGIN ADJUSTED EBITDA MARGIN 5 Q2 2015 Earnings Results | July 22, 2015 26.4% 24.2% 2.5% 0.3% Q2 2014 Seaton Impact Legacy TrueBlue Improvement Q2 2015 5.6% 5.9% 0.5% 0.8% Q2 2014 Seaton Impact Legacy TrueBlue Improvement Q2 2015
Q2 2015 SG&A BRIDGE 6 Q2 2015 Earnings Results | July 22, 2015 Amounts in millions. Note: Figures do not sum due to rounding. $97 $118 $22 $1 $1 Q2 2014 Seaton Impact Integration Costs Legacy TrueBlue Improvement Q2 2015
Q2 2015 HIGHLIGHTS – LEGACY TRUEBLUE Amounts in millions. • Revenue growth of 3% excluding green energy headwind Green energy headwind anniversary met in Q2 2015 • Adjusted EBITDA exceeded expectation • Strong Adjusted EBITDA expansion Driven by cost discipline and operating leverage Revenue Adjusted EBITDA Adjusted EBITDA Margin $ 460 $ 29 6.3% Q2 2015 CHANGE 7 +1% +16% +80 bps Q2 2015 Earnings Results | July 22, 2015
Amounts in millions. • Solid growth in on-premise staffing • Strong new RPO customer pipeline • Adjusted EBITDA exceeded expectation • Integration complete Revenue Adjusted EBITDA Adjusted EBITDA Margin Q2 2015 8 Q2 2015 Earnings Results | July 22, 2015 Seaton was acquired on June 30, 2014. Therefore, no comparison to Q2 2014 is presented. $ 168 $ 8 4.5% Q2 2015 HIGHLIGHTS – SEATON
SEATON ACQUISTION DELIVERS STRONG ACROSS-THE-BOARD RESULTS 9 Amounts in millions. Target1 Actual $ 730 - 750 $ 738 $ 35 - 39 $ 37 Powerful Earnings Accretion Revenue (TTM) Adjusted EBITDA (TTM) 1 Forward 12-month target set at the time of acquisition (June 30, 2014). 2 Excludes $13.4M of incremental intangible asset amortization and one-time costs of $7M. Target1 Actual Adjusted Earnings per Share (TTM)2 Q2 2015 Earnings Results | July 22, 2015 Strong Revenue Growth High Quality Profits Higher Shareholder Return Return on Equity (TTM)2 Amounts in millions. Legacy TrueBlue Seaton Impact $1,788 $738 $2,526 w/o Seaton With Seaton $102 $37 $139 w/o Seaton With Seaton $1.20 $0.50 $1.70 w/o Seaton With Seaton 14% 3% 17% w/o Seaton With Seaton +41% +37% +40% +24%
Total Debt Liquidity Debt to Total Capital Amounts in millions. Amounts in millions. Q2 2015 Earnings Results | July 22, 2015 10 1Total debt less cash and marketable securities. Note: Balances as of fiscal period end. Figures on this page may not sum due to rounding. -$130 -$105 $180 $81 No Debt $32 $202 $102 2012 2013 2014 Q2 2015 Total Debt Net Debt 1 DEBT AND LIQUIDITY HIGHLIGHTS $73 $74 $101 $183 $130 $137 $21 $21 $202 $211 $123 $205 2012 2013 2014 Q2 2015 Cash and Marketable Securities Borrowing Availability 0% 8% 30% 17% 2012 2013 2014 Q2 2015
5.7% 5.1% Legacy TrueBlue Legacy Seaton 6.6% 14.0% St ffi g Services Managed Services $476 $123 Legacy TrueBlue Legacy Seaton REPORTING TRANSITION Legacy Reporting Comp ositio n • Labor Ready • CLP • Spartan • Centerline • PlaneTechs • Staff Management | SMX (on-premise staffing and managed services provider) • People Scout and HRX (recruitment process outsourcing) Legacy TrueBlue Legacy Seaton • Legacy TrueBlue • On-premise staffing • People Scout and HRX • Managed services provider Staffing Services Managed Services In Q3 2015, Legacy Reporting will transition to Segment Reporting Segment Reporting Q 2 TT M Fin an cial s Gross Profit ($M) Adj. EBITDA Margin Gross Profit ($M) Adj. EBITDA Margin1 P urp os e • Provide performance transparency of the core business and acquired business during first year of ownership. • Enhance comparability to prior year results. • Provide performance transparency by service type. • Provide performance insight for the higher growth, higher margin Managed Services business. • Enhance comparability by providing prior period numbers for both segments. $559 $41 Staffing Services Managed Services 1 Adjusted EBITDA margins exclude corporate unallocated expenses. Q2 2015 Earnings Results | July 22, 2015
Expectation Commentary Total Revenue 4% to 6% • All organic • Acceleration from 1% organic growth in Q1 ’15 Staffing Services Revenue 4% to 6% • Mid-point expectation of positive 5% Managed Services Revenue 5% to 5% • Smaller Managed Services customer population = wider range relative to Staffing Services • Pro forma Managed Services growth at midpoint is 10% excluding currency impact and exit of two unprofitable accounts Total Adjusted EBITDA $42M to 46M Total Adjusted EPS $0.52 to $0.58 • Marginal 40% income tax rate and $0.07 add-back for intangible asset amortization Amounts in millions except per share data.. Q3 2015 EXPECTATIONS 13 Q2 2015 Earnings Results | July 22, 2015
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 the purchase, integration, reorganization and shutdown activities related to acquisitions. EBITDA and Adjusted EBITDA are key measures used by management in evaluating performance. 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 GAAP, and, as presented, may not be comparable to similarly titled measures of other companies. Adjusted net income per diluted share is a non-GAAP financial measure which excludes from net income on a per diluted share basis non-recurring costs related to the purchase, integration, reorganization and shutdown activities related to acquisitions net of tax, amortization of intangibles of acquired businesses net of tax and adjusts income taxes to a marginal rate of 40 percent, which is used by management in evaluating performance and communicating comparable results. Adjusted net income per diluted share should not be considered a measure of financial performance in isolation or as an alternative to net income per diluted share in the Consolidated Statements of Operations in accordance with GAAP, and, as presented, may not be comparable to similarly titled measures of other companies. See “Financial Information” in the Investors section of our web site at www.trueblue.com for a full reconciliation of non-GAAP financial measures to GAAP financial results. Q2 2015 Earnings Results | July 22, 2015 NON-GAAP TERMS AND DEFINITIONS 14
2 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 financial performance. These forward-looking statements are based upon our current expectations, and our actual results may differ materially from those described or contemplated in the forward-looking statements. Factors that may cause our actual results to differ materially from those contained in the forward-looking statements, include without limitation the following: 1) national and global economic conditions, including the impact of changes in national and global credit markets and other changes that affect our customers; 2) our ability to continue to attract and retain customers and maintain profit margins in the face of new and existing competition; 3) new laws and regulations that could have a materially adverse effect on our operations and financial results; 4) increased costs and collateral requirements in connection with our insurance obligations, including workers’ compensation insurance; 5) our continuing ability to comply with the financial covenants of our credit agreement; 6) our ability to attract and retain qualified employees in key positions or to find temporary and permanent employees with the right skills to fulfill the needs of our customers; 7) our ability to successfully complete and integrate acquisitions that we may make; and 8) other risks described in our most recent filings with the Securities and Exchange Commission (SEC). Use of estimates and forecasts: Any references made to 2015 are based on management guidance issued July 22, 2015, and are included for informational purposes only and are not an update or reaffirmation. We assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. Any other reference to future financial estimates are included for informational purposes only and subject to risk factors discussed in our most recent filings with the SEC. July 2015 Investor Presentation
) $2.2B 2014 Revenue 3 * See “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. 2012 2013 2014 Revenue 2012 2013 2014 Adjusted EBITDA * $2.2B $116M July 2015 Investor Presentation
1 Source: Staffing Industry Analysts 2013 revenue; Pro forma for acquisition of Seaton. July 2015 Investor Presentation 4
5 TrueBlue helps clients improve performance and increase growth by providing specialized staffing, workforce management and recruiting solutions. July 2015 Investor Presentation
6 July 2015 Investor Presentation
• • • • • • • • • • 7 Staffing Solutions & Workforce Management Recruitment Process Outsourcing & MSP Industry Highlights CAGR 14% 2010 - 2014 Industry Highlights 8% July 2015 Investor Presentation
Construction Transportation & Wholesale Retail In d u s tr y D y n a m ic s • • • • • • • • • • • Residential Construction on the Rise Industrial Production in a Growth Cycle Wholesale Trade At New Peak Retail Trade Continued Growth Source: U.S. Census Bureau; Moody's Analytics Source: U.S. Board of Governors of the Federal Reserve System (FRB) Source: Bureau of Labor Statistics Source: US Census Bureau *Pro forma for full year of Seaton results; Seaton was acquired on June 30, 2014.. 300 350 400 450 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 Retail Trade and Food Services Sales Billions 4.0 4.2 4.4 4.6 4.8 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 Transportation and Warehousing Employment Millions 80 85 90 95 100 105 110 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 Industrial Production Index - 0.5 1.0 1.5 2.0 2.5 20 05 20 07 20 09 20 11 20 13 20 15 20 17 Residential Housing Permits Millions Actual Forecast 8
9 • • • • • • • • • • • • July 2015 Investor Presentation
10 GROW MARKET LEADERSHIP Strategy Produces Results Strategy Increases Growth Opportunities • • • • • • Source: Staffing Industry Analysts, TrueBlue estimates July 2015 Investor Presentation
11 • • • • • Benefits of Expansion July 2015 Investor Presentation
12 Technology and Efficiency Yields Value • • • Innovation Drives More Business Efficiency • • • • July 2015 Investor Presentation
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