Investor Presentation June 2013
Safe Harbor Certain statements made in this presentation should be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. 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
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
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
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
CRS Mission + Vision Mission Our mission is to provide the right person with the right job, to provide recruiters with state-of-the- art 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
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
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 2012. * The Rise of the Supertemp, Harvard Business Review, May 2012. 8
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
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 project- based 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
Staffing Industry vs. US Economy US GDP Growth VS. Growth of Temp Staffing (2010-2012) US GDP Temporary Staffing Employment 16.0% 14.8% 14.0% 12.0% 10.6% 10.0% 8.4% 8.0% 6.0% 4.0% 3.0% 2.3% 1.8% 2.0% 0.0% 2010 2011 2012 In the past three years, the growth in temporary staffing employment has outpaced that of the US economy. 11 Source: Business Services from BMO Capital Markets, January 2013
Temporary Penetration Rate Changes in Temporary Penetration Rate and US Unemployment Rate (1991-2012) The temp penetration rate increased to 1.97% in April 2013 – a new high for this cycle 12 Source: Bureau of Labor Statistics, National Bureau of Economics Research, and BMO Capital Markets.
CRS Revenue Growth • CRS’ annual growth from 2007-2012 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 2017. • CRS is projected to have Y-O-Y growth of 20-25% from 2012 to 2013. 640 • CRS revenues are anticipated to rise both in the near and intermediate term. • 2012 revenue reached $640 million with 85% growth. CRS Annual Revenue CRS Revenue Growth through September 2012 345.2 ending December 2012 217.8 63.7 63.1 54.6 32.8 2006 2007 2008 2009 2010 2011 2012 13 Source: Office Staffing & Temp Agencies in the US, IBIS World, September 2012.
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