Investor Presentation June 2013

Transcription

1 Investor Presentation June 2013

2 Safe Harbor Certain statements made in this presentation should be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of These include statements about our future results of operations and operating targets, the size of the markets in which we operate, and our efforts to increase our market share and expand our business. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ, including those discussed in our annual report on Form 10-K for the year ended September 28, 2012 and other filings we make with the Securities and Exchange Commission. We assume no obligation to update this presentation, which speaks as of today s date. 2

3 CRS Corporate Profile Corporate Resource Services Inc. (OTCBB: CRRS) is a diversified technology, staffing, recruiting, and consulting services firm. The Company provides cloud-based enterprise applications and hosting services to PEO and staffing companies, as well as staffing, recruiting, and consulting services to a wide variety of clients in many industries. The Company offers trained employees in the areas of Insurance, Information Technology, Accounting, Legal, Engineering, Science, Healthcare, Life Sciences, Creative Services, Hospitality, Retail, General Business and Light Industrial work. The Company s blended staffing solutions are tailored to our customers needs and can include customized employee pre-training and testing, on-site facilities management, vendor management, risk assessment and management, market analyses and productivity/occupational engineering studies. Through its joint venture, Abest Power & Gas, CRS also offers its clients cost effective energy solutions in markets where deregulation has given customers a choice in their energy suppliers. 3

4 CRS Company Overview CRS operates 231 staffing and on-site facilities in 42 states and the District of Columbia and it offers its services to a wide variety of clients in many industries, ranging from sole proprietorships to Fortune 1000 companies. Additionally, CRS provides unique technology, data, cloud, and proprietary Software-as-a-Service ( SaaS ) tools to its customers in the employment and staffing industry. CRS works with customers to fill individual positions, staff entire facilities, manage vendor programs and outsource recruiting processes. It draws from a national database of available candidates that number in the hundreds of thousands and represents specialized professionals with skills that include light industrial, clerical, IT, healthcare, accounting and finance, among others. On average, the Company is invoices over 3,500 customers weekly. CRS has completed six major acquisitions of regional staffing agencies in the last four years, in addition to multiple tuck-in acquisitions. By uniting these staffing specialists under one brand, the company is growing at a rapid pace with revenues in the $800 million/year range presently, with plans to expand its current service offerings through organic growth and acquisitions and by maximizing the potential within the high-growth segments it serves. Concurrently, corporate management is streamlining its business to maximize efficiencies and earnings. The management team consists of career national employment professionals with a shared vision of remaining the preferred staffing provider for customers and the employer of choice for employees while pursuing opportunities for innovation and growth. 4

5 CRS Values We believe that staffing is, first and foremost, about people. We believe that by providing outstanding support to our employees, consultants and candidates we provide our customers with the best results. We strive to achieve: Teamwork Integrity Respect Trust Superior Service Commitment 5

6 CRS Mission + Vision Mission Our mission is to provide the right person with the right job, to provide recruiters with state-of-theart recruiting resources and to enable our customers to build a better workforce by providing trained temporary and permanent employees. Vision To become a respected resource to our clients and provide them with human capital resources that increase their profitability and customer satisfaction. To achieve this goal, we shall: Offer a full spectrum of recruitment and staffing services, with several years of expertise in implementing solution driven programs throughout all levels of an organization. 6

7 Key CRS Metrics Over 39,000 employees on assignment at peak periods 6,000 active customers. Employ over 120,000 staff annually. 815 staffing professionals working in 231 locations in 42 states and the District of Colombia. Key components of delivering a productive workforce: Complete Employee Benefits Program Attractive Incentive Programs Customized Employee Training Safe Work Environments Proprietary Software-as-a-Service tools to manage workforce 7

8 Favorable Macroeconomic Trends The corporate social contract guaranteeing job security and benefits for those with permanent jobs is seen to be no longer viable.* Post-recession, temporary employment in the US is expected to increase before general employment, since companies want to ensure that performance improvements are sustainable. For the near term, temp agencies will benefit from a turnaround in the economy because permanent workers are typically not hired until growth is more certain. Financial trouble at the state level means has increased costs for employers costs that can be better managed by professional staffing companies. Compliance issues that are burdensome for employers (e.g. workman s compensation, on-the-job safety, medical insurance). Implementation of Patient Protection and Affordable Care Act ( Obamacare ), in particular is a disincentive for employers to add permanent employees. Source: Office Staffing & Temp Agencies in the US, IBIS World, September * The Rise of the Supertemp, Harvard Business Review, May

9 Favorable Demand-Side Trends Businesses with seasonal work forces and just-in-time staffing needs are utilizing recruiting and staffing solutions to meet these needs. Employers seeking to maximize efficiency are leveraging contingent workforces supplied by professional staffing companies to achieve the competitive advantage a variable cost structure can provide. A fundamental change in attitudes regarding temporary employees in the workforce supports the growth of the staffing industry. More companies are likely to use a mix of permanent staff, temporary workers and labor-hire employment services, along with other value-added services, such as outsourced human resource services. Potential growth due to renaissance in US manufacturing sector will require highly skilled temp labor (e.g. Apple bringing manufacturing jobs from China to US). Employers increasingly looking to reduce their liability as it relates to their workforce. 9

10 Favorable Supply-Side Trends More people are joining the temporary workforce because of a fundamental change in attitudes regarding flexible working hours and arrangements offered by temporary contracts. The hourly demands of employees with salaried positions has increased significantly over the last several decades, causing temporary or projectbased work to be more attractive and, in some cases, better paid. Technology has made it simple for employees to port their skills to a new employer. The need to keep pace with technological innovation is driving a growing number of employees to prefer project-based work that presents the opportunity to learn new skills rather than a permanent role. 10

11 Staffing Industry vs. US Economy US GDP Growth VS. Growth of Temp Staffing ( ) 16.0% 14.0% 14.8% US GDP Temporary Staffing Employment 12.0% 10.0% 8.0% 10.6% 8.4% 6.0% 4.0% 2.0% 3.0% 1.8% 2.3% 0.0% In the past three years, the growth in temporary staffing employment has outpaced that of the US economy. Source: Business Services from BMO Capital Markets, January

12 Temporary Penetration Rate Changes in Temporary Penetration Rate and US Unemployment Rate ( ) The temp penetration rate increased to 1.97% in April 2013 a new high for this cycle Source: Bureau of Labor Statistics, National Bureau of Economics Research, and BMO Capital Markets. 12

13 CRS Revenue Growth CRS annual growth from was 78%. By way of comparison, average annual growth across the industry for the same time period was -1.7%. The industry is projected to grow at an average annual rate of 2.7% 2012 to CRS is projected to have Y-O-Y growth of 20-25% from 2012 to CRS revenues are anticipated to rise both in the near and intermediate term revenue reached $640 million with 85% growth. 640 CRS Annual Revenue CRS Revenue Growth through September 2012 ending December Source: Office Staffing & Temp Agencies in the US, IBIS World, September

14 CRS Profitability Growth Gross Margins CRS gross margins average 12%, below most of the industry, but reflective of the price sensitivity of the customers we serve. CRS has begun strategic initiatives to improve its gross margins by: Expanding its staffing operations in higher-margin, high-growth employment sectors, such as IT, Accounting and Healthcare Revisiting pricing with unprofitable customers Actively managing state unemployment tax expenses Adding additional, higher-margin service offerings like Summit Software Net Income CRS has incurred net losses in two of its last three fiscal years, but has reported a net profit in each of its last three fiscal quarters and is expecting to generate net profit margins of 1.0% to 1.2% for 2013 and continue to improve those profit margins in CRS has improved, and will continue to improve its net profit margins through the following: Integrating acquired operations and eliminating redundant costs Leveraging fixed costs over a larger revenue base Improving gross margins as noted above 14

15 Select CRS Clients Financial Services Goldman Sachs MetLife State Farm Morgan Stanley AIG Chubb Prudential Liberty Mutual Entertainment and Media MTV Disney The New York Times Retail Macy s Kohl s Barney s New York Crabtree & Evelyn ToysRUs New York & Company Consumer Products Del Monte Goya CocaCola Chiquita Logistics FedEx DHL Waste Management Health Care New York Health & Hospitals Corporation Memorial Sloan Kettering Hospitality Marriott Manufacturing Siemens 15

16 CRS SaaS Division Our proprietary PEO software provides our customers with a myriad innovative business and human resource management tools. Next generation payroll processing software. Real time connectivity to live data 24/7 with web access and permissions for customers clients and employees. Client Contact Management software provides database applications, helps client calls, tracks issues and progress and enables customized reporting. PEO software enables remote hours and wages input, payroll direct deposit, invoicing, ACH processing, check signing and MICR ink printing, and automated general ledger entries. 16

17 VMS/MSP CRS' Vendor Management Systems (VMS) and Managed Service Provider (MSP) services enable companies to streamline costs and manage their contingent workforce. CRS enables customers to optimize their business by providing: Staffing Procurement Management Time Sheet, Billing and Labor Expense Management Customized Reporting Staffing Provider Management 17

18 Management Team John P. Messina, President and CEO John P. Messina Sr. has served as Chief Executive Officer of the Company since October 2012, as President since March 2009, as a member of the Board of Directors since April 2007, and as Chairman of the Board since May He has played a central role in executing the Company s growth plan, and has led its aggressive acquisition program. Mr. Messina has over fifteen years of experience in the human capital services industry, joining Tri-State Employment Services in He has been a successful entrepreneur, having founded several small businesses. Mr. Messina s previous experience includes executive positions in the transportation and construction industries. Mark S. Levine, Chief Operating Officer Mark S. Levine has been serving as President of Operations for Corporate Resource Services, Inc since Prior to his new role, Mark served as Chief Operating Officer of AccountAbilities, Inc. since February Prior to joining AccountAbilities, he was the Executive Vice President of Accretive Solutions, Inc. from 2001 to In 1998, Mark was named President of Stratus Services Group and held that position until From April 1996 to April 1998, Mark served as Regional Vice President of Corestaff, Inc. He served as Regional Manager of Norrell Services, Inc., from 1993 to From 1983 to 1993, Mr. Levine served as Assistant Vice President of United States Sales of Dun & Bradstreet. Frank Vaccaro, President of Sales Frank Vaccaro has held many high level management positions for Melville Corporation, Berkshire-Hathaway, J Baker and various staffing corporations including President/CEO of Diamond and Tri-Diamond Staffing. These positions allowed him to become well versed for his role as President of Sales for Corporate Resource Service Inc. Frank's leadership style and relationship building produces positive results. Michael J. Golde, Chief Financial Officer Michael J. Golde has served as Chief Financial Officer of the Company since May He has over twenty years of experience in the human capital services, technology and professional services industries. He has served as Chief Financial Officer of Accretive Solutions, General Sentiment and Wimba, Inc, Controller of Randstad North America, and in various financial management positions with AccuStaff Incorporated and Career Horizons. Mike is a Certified Public Accountant and a winner of the Long Island Business News CFO of the Year Award in

19 Valuation Comps Staffing and Recruiting Services Robert Half International (RHI) F&A, office, IT, creative and law staffing On Assignment (ASGN) Healthcare, engineering and IT staffing AMN Healthcare Services (AHS) Healthcare staffing, including nursing, allied and physician staffing True Blue (TBI) Manual and day labor (formerly Labor Ready) Kforce (KFRC) IT, finance and accounting, health and life sciences staffing. Corporate Resource Services (CRRS) US diversified staffing, technology, managed services Share Price 5/29/ week High 52- week Low Mkt Cap LTM Rev. Mult. Of Rev 2012 Growth Rate $34.71 $37.75 $25.10 $4,791 $4, x 9% $26.99 $27.65 $14.48 $1,420 $1, x 108% $13.75 $15.94 $5.45 $630 $ x 7% $23.09 $23.46 $11.84 $816 $1, x 6% $14.53 $16.65 $10.34 $507 $1, x 8% $1.65 $2.00 $0.35 $231 $ x 85% $ in millions except per share amounts. Source: Robert W. Baird & Co., Capital IQ and company filings. 19

20 Investment Summary CRS ability to deliver broad-based solutions provides its customers a one stop shop to fulfill their staffing needs from professional services and consulting to clerical and light industrial positions. Depending on the size and complexity of an assignment, Corporate Resource Services can create an on-site facility for recruiting, training and administration at the customers location. Company recruiters have the latest state of the art recruiting resources available to help customers secure the best candidates in today's ever-changing marketplace. CRS national network of recruiters has staffing experts that get excellent results by focusing within their areas of expertise. As a result, CRS is able to generate industry-leading top-line growth and continually-improving profitability in a segment of the economy that itself is growing at an accelerated rate. Contact Information: Corporate Resource Services, Inc. Michael Golde, Chief Financial Officer Headquarters: 160 Broadway, 13 th Floor New York, NY Phone: Website: 20