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):  September 15, 2004

LABOR READY, 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):
 
o             Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o             Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o             Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o             Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
Item 7.01.               Regulation FD Disclosure.
 
Copies of slide presentations which will be presented by us at the 2 nd Annual Labor Ready Analyst Day conference held at the Marriott Marquis Hotel in New York City on September 15, 2004 at 11:30 AM (ET), and generally to members of the financial and investment community from time to time (the “Investor Presentation”), are attached to this report as Exhibit 99.1 and are also available on Labor Ready’s website, www.laborready.com.
 
Note: the information in this report (including the Investor Presentation) is furnished pursuant to Item 7.01 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, or incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, 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.
 
(c)                                   Exhibits
 
99.1.                         Investor Presentation

SIGNATURES
 
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.

 	LABOR READY, INC.	
 	(Registrant)	
 	
Date:  September 15, 2004	By:	/s/ Joseph P. Sambataro, Jr.	 	
 	 	
 	Joseph P. Sambataro, Jr.	
 	Chief Executive Officer	
 
2

EXHIBIT 99.1

 
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[ GRA PHIC]
 
2ND ANNUAL
LABOR READY ANALYST DAY
2004
 
WE PUT PEOPLE TO WORK.

 
SAF E HARBOR STATEMENT
 
Cautionary Note about Forward-Looking Statements
 
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 within the meaning of the federal securities laws. Our actual results may differ materially from those expressed in any forward-looking statements made by us.  Forward-looking statements involve a number of risks and uncertainties including, but not limited to, the risks described in the Company’s most recent 10-K and 10-Q filings.  All forward-looking statements are qualified by those risk factors.
 
[GRAPHIC]

 
INT RODUCTION TO DIRECTORS
 
•                   Robert Sullivan
Chairman
 
•                   Tom McChesney
 
•                   Gates McKibbin
 
•                   Joe Sambataro
 
•                   Carl Schafer
 
•                   Bill Steele

 
MAN AGEMENT TEAM
 
•                   Joe Sambataro
CEO
 
•                   Tim Adams
 VP & General Counsel
 
•                   Bob Breen
 VP, Strategic Planning & Analysis
 
•                   Steve Cooper
 CFO
 
•                   Yolanda Hubbard
 VP, National Sales
 
•                   John Hopkins
Regional VP, Western U.S. Operations
 
•                   Gary North
Regional VP, Eastern U.S. and International Operations

 
2004 ANA LYST PRESENTATION AGENDA
 
•                   Labor Ready’s Business Model
 
•                   Industry Trends
 
•                   Key Business Strategies
 
•                   Financial Review

 
Our Mission:
“We Put People to Work.”
 
•                   Largest supplier of temporary manual labor in the U.S.
 
•                   Nearly 600,000 people employed annually
 
•                   821 branches throughout the U.S., Canada and the U.K.
 
[GRAPHIC]

 
DIV ERSIFIED CUSTOMER BASE
 
•                   Nearly 275,000 customers
 
•                   Largest customer represents less than 2% of sales
 
•                   Average yearly sales per customer of $3,000
 
•                   Over 400 industry classifications

Sales by Industry	 	 	 	
Construction & Landscaping	 	33	%	
Manufacturing	 	20	%	
Hospitality, Services & Other	 	20	%	
Transportation	 	10	%	
Wholesale	 	10	%	
Retail	 	7	%	

 
STR ONG VALUE PROPOSITION
 
Attracting customers with:
 
•                   Access to workers on short notice
 
•                   National scale and multiple locations
 
•                   Management of labor costs
 
•                   Elimination of workers’ comp. and payroll tax administration
 
•                   Web ordering & billing
 
•                   100% Satisfaction Guarantee
 
Attracting workers with:
 
•                   Flexibility
 
•                   Work Today – Paid Today
 
•                   Exposure to full-time employment opportunities
 
[GRAPHIC]

 
FRA GMENTED, GROWTH INDUSTRY
 
•                   Staffing: $101 billion industry (a)
 
•                   Industrial staffing: $17.6 billion (a)
 
•                   Day labor market: $5 billion (b)
 
Day Labor Market Breakdown
 
[CHART]

(a)                                   Staffing Industry Analysts, 2004 Projection
(b)                                  Research estimates

 
20 YEA R TRENDS IN TEMPORARY STAFFING
 
U.S. Help Supply
 
[CHART]
 
Cycle Expansions and Contractions: (1) Economic expansion began in November 1982; (2) Economic contraction began in July 1990 and expansion began in March 1991; (3) Economic contraction began in March 2001.
 
Source:  Bureau of Labor Statistics and NBER

 
FAV ORABLE DEMOGRAPHIC TRENDS
 
•                   Temporary Employment expected to be the 5 th fastest growing industry over the next decade with nearly 1.8 million new jobs by 2012*
 
•                   Unskilled Jobs expected to make up 70% of the top 20 fastest growing occupations*
 
•                   Construction expected to be the only U.S. goods-producing industry with employment growth during the next 10 years*
 
TEMPORARY EMPLOYMENT
A GROWTH INDUSTRY
 
[CHART]

*  Source:  Bureau of Labor Statistics, 2012 Projections

 
KEY BUSINESS STRATEGIES
 
•                   Grow current branch revenues and profits
 
•                   Expand in smaller markets in the United States and Canada
 
•                   Expand in the United Kingdom
 
•                   Penetrate existing/new markets with additional brands and diversification of services
 
[GRAPHIC]

 
GRO W CURRENT BRANCH REVENUES & PROFITS
 
•                   Increase same-branch revenues
 
•       Current branches at 50% of recruiting capacity
 
•       National Accounts
 
•                   Improve Branch Manager tenure
 
•       Compensation tied to profits
 
•       Enhanced training
 
•       Mentoring and development
 
•                   Pricing and cost controls

 
SMA LL MARKET EXPANSION
 
•                   Opened 21 in 2003 and 20 in 2004; currently operating 211 branches in smaller markets in the U.S. and Canada.
 
•       Average population of 60,000
 
•       At least 25 miles away from existing branch
 
•                   Smaller market branch model with less cost
 
•                   Similar sales volumes of medium and large markets
 
•                   400 – 500 viable small markets in U.S. and Canada

 
2003-04 SMA LL MARKET OPENINGS
 
[GRAPHIC]

 
UNI TED KINGDOM EXPANSION
 
•                   Estimated 100 - 125 locations available
 
•                   Currently operating 50 branch locations
 
•                   Leadership development
 
•                   Expanded geographic reach for core business

 
UNI TED KINGDOM EXPANSION
 
[GRAPHIC]

 
DIV ERSIFY INTO RELATED SKILLED STAFFING VERTICALS
 
Market Segments
 
[CHART]
 
Rationale:
•                   Common customer base
•                   Channel synergies
•                   Opportunity to create a growth platform
•                   Opportunity to leverage corporate skills

 
ON DEM AND vs. LIGHT INDUSTRIAL

On Demand	 	Light Industrial	
Short Assignments	 	Longer-term Assignments	
Short Sales Cycle	 	Longer Sales Cycle	
All Industries	 	Manufacturing, Warehousing & Transportation Focus	
Dispatch Hall Recruiting	 	Newspaper & Telephone Recruiting	
$6 - $7 Pay Rates, Daily Pay	 	$7 - $8 Pay Rates, Weekly Pay	
$1 - $2 Million Annual Branch Sales Volumes	 	$2 - $3 Million Annual Branch Sales Volumes	
30% Gross Margins	 	20%-25% Gross Margins	
6-8% EBITDA Margins	 	6-8% EBITDA Margins	
Small-Medium Clients	 	Small-Medium Clients	

 
FIN ANCIAL REVIEW
 
•                   Overview of revenue and profitability
 
•                   Analysis of key business strategies
 
•                   Investment highlights

 
LON G-TERM GROWTH
 
Annual Revenue and Operating Income
 
[CHART]

E - Based on management guidance issued on September 13, 2004

 
MON THLY SALES GROWTH TRENDS
 
Year over Year Sales Growth Rates
 
[CHART]

 
SAL ES GROWTH COMPONENTS
 
Same-store Growth
 
[CHART]
 
New/Acquired Store Growth
 
[CHART]

 
REG IONAL RESULTS
 
[GRAPHIC]

 
REC ENT TRENDS IN TEMPORARY STAFFING
 
[GRAPHIC]

* Not seasonally adjusted.

 
CON SISTENT GROSS MARGINS
 
Gross Margins As a Percentage of Revenue
 
[CHART]

E - Based on management guidance issued on September 13, 2004

 
GRO SS MARGIN TRENDS
 
[CHART]

E - Based on management guidance issued on September 13, 2004

 
SEL LING, GENERAL & ADMIN. COSTS
 
Trailing four quarters as a percentage of revenue
 
[CHART]

E - Based on management guidance issued on September 13, 2004

 
WOR KERS’ COMPENSATION
 
Collateral Reconciliation:

 	 	FY 2002	 	FY 2003	 	Q2 2004	 	
Outstanding Collateral	 	$	126.4	 	$	165.7	 	$	171.4	 	
Less: Discount on Reserves	 	(17.8	)	(23.6	)	(27.9	)	
Less: Insurance Company Cushion	 	(2.9	)	(6.2	)	(2.3	)	
Less: Timing of Collateral Release	 	(5.3	)	(23.3	)	(29.3	)	
Less: Upfront Posting	 	(14.5	)	(11.1	)	3.5	 	
Workers Comp. Reserve	 	$	85.9	 	$	101.5	 	$	115.4	 	
 
In millions.

 
LON G-TERM DEBT
 
•                   $74 Million in long-term debt
 
•                   $4 million in capital lease obligations
 
•                   $70 million in convertible subordinated notes
 
•                   6.25% interest rate
 
•                   Matures June 2007
 
•                   $7.26 conversion price (9.6 million shares)
 
•                   Redeemable on or after June 20, 2005
 
Shares Short
 
[CHART]

 
FIN ANCIAL OUTLOOK

 	 	2001	 	2002	 	2003	 	2004
 Forecast(E)	 	
•       Revenue	 	$	917	M	$	863	M	$	891	M	$1,030M – 1,035M	 	
Growth	 	(-6	)%	(-6	)%	3	%	16%	 	
 	 	 	 	 	 	 	 	 	 	
•       EPS	 	$	0.23	 	$	0.28	 	$	0.41	 	$0.64 - $0.67	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
•       Operating Income	 	$	14	M	$	21	M	$	32	M	$53M - $56M	 	
Growth	 	(-15	)%	47	%	54	%	65% - 75%	 	

(E) - Based on management guidance issued on September 13, 2004

 
FOU R KEY BUSINESS STRATEGIES
 
1.               Grow current branch revenues and profits
 
2.               Expand into smaller markets
 
3.               Expand in the United Kingdom
 
4.               Diversification of services

 
BRA NCH MATURITY DRIVES REVENUE
 
Branch Revenue and Maturity (2001 – 2003 Avg.)
 
[CHART]
 
Average branch age = 5.6 years

 
2005 Est imated Branch Revenue
 
[CHART]
 
Average branch age = 7 years

 
SAL ES PER BRANCH IS CLIMBING
 
Sales per Branch - Trailing 12 Months
 
[CHART]

 
BRA NCH PROFIT POTENTIAL

 	 	Sensitivity analysis based on	 	
Revenue	 	$	1,100,000	 	$	1,300,000	 	
 	 	 	 	 	 	
Gross Profit	 	330,000	 	390,000	 	
Gross Profit Margin	 	30	%	30	%	
 	 	 	 	 	 	
Branch Expenses	 	200,000	 	210,000	 	
As a % of Revenue	 	18	%	16	%	
 	 	 	 	 	 	 	 	
Income from Operations	 	$	130,000	 	$	180,000	 	
Operating Income Margin	 	12	%	14	%	

 
OPE RATING LEVERAGE DRIVES PROFITS
 
Earnings Per Share Sensitivity Analysis (a)
 
[CHART]

(a)           Earnings per share sensitivity analysis based on consistent gross profit margins, management’s estimates of fixed and variable expenses, regional and back office overhead and related assumptions, at varying levels of per office revenues.

 
Q-3 AVG . U.S. WEEKLY SALES VOLUMES
 
[CHART]
 
Numbers within yellow columns represent the number of branches opened in 2004.

 
SMA LL MARKETS – SALES RAMP UP
 
Small Market Revenue by Age of Office (2001-2003)
 
[CHART]

 
Q-3 AVG . WEEKLY SALES VOLUMES
 
[CHART]
 
Numbers within yellow columns represent the number of branches opened in 2004.

 
REC ORD U.K. PROFITABILITY

 	 	July 2004 YTD	 	 	 	 	 	
 	 	One Year
and Older
Offices	 	6 New
Offices	 	YTD All
Offices	 	FY
2004E	 	FY 2003	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Revenues	 	$	20,100	 	$	300	 	$	20,400	 	$	44,200	 	$	27,000	 	
Branch Profit (Loss)	 	$	1,200	 	$	(400	)	$	800	 	$	2,700	 	$	-0-	 	
 
In thousands of U.S. Dollars.

 
SPA RTAN STAFFING ACQUISITION
 
•                   A large profitable staffing agency in the Southeast (27 Branches)
 
•                   Two divisions: Spartan Staffing and Workforce
 
•                   $50 million in annual revenue
 
•                   $9.8 Million Purchase Price
 
•                   Accretive : Projected 2004 EBITDA of $2 Million
 
Spartan Staffing Sales Growth
 
[CHART]
 
[LOGO]

 
REV ENUES
 
Consolidated Revenues
 
[CHART]
 
Average Sales per Branch
 
[CHART]
 
In thousands of U.S. Dollars

E - Based on management guidance issued on September 13, 2004

 
PRO FITABILITY
 
Consolidated Net Income %
 
[CHART]
 
Diluted Earnings per Share
 
[CHART]

E - Based on management guidance issued on September 13, 2004

 
RET URN ON INVESTMENT
 
Return on Assets
 
[CHART]
 
Return on Invested Capital
 
[CHART]

E - Based on management guidance issued on September 13, 2004

 
INV ESTMENT HIGHLIGHTS
 
•                   Market leader in fragmented industry
 
•                   Large and growing market
 
•                   Favorable demographic trends
 
•                   Diverse customer base
 
•                   Scalable and flexible model
 
•                   Strong balance sheet
 
[GRAPHIC]
 
Labor Ready is realizing significant operating leverage
as it benefits from an economic recovery and the maturation of
its branch expansion program executed in the 1990s.