EX-99 2 bbsi8kex0200808.htm EXHIBIT 99.1

Exhibit 99.1

 

NEWS RELEASE

 

For Immediate Release

Contact:

 

William W. Sherertz
President and
Chief Executive Officer

 

 

 

 

 

Telephone:

 

(360) 828-0700

 

 

BBSI

ANNOUNCES FOURTH QUARTER 2007 OPERATING RESULTS,

FINANCIAL GUIDANCE FOR 1Q08 AND CONFERENCE CALL

 

VANCOUVER, WASHINGTON, February 8, 2008 - Barrett Business Services, Inc. (Nasdaq: BBSI) reported today net income of $3.9 million for the fourth quarter ended December 31, 2007, a decline of $1.3 million or 25.1% from net income of $5.2 million for the fourth quarter of 2006. Diluted earnings per share for the 2007 fourth quarter were $.34, as compared to diluted earnings per share of $.45 for the same quarter a year ago.

 

Net revenues for the fourth quarter ended December 31, 2007 totaled $81.8 million, an increase of approximately $15.0 million or 22.5% over the $66.8 million for the same quarter in 2006.

 

 

 

 

 

(Unaudited)

 

 

 

(Unaudited)

 

($ in thousands, except per share amounts)

 

 

 

Fourth Quarter Ended

 

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

 

December 31,

 

Results of Operations

 

 

 

2007

 

 

 

2006

 

 

 

2007

 

 

 

2006

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Staffing services

 

 

 

$

45,548

 

 

 

$

32,766

 

 

 

$

147,221

 

 

 

$

123,500

 

Professional employer service fees

 

 

 

 

36,283

 

 

 

 

34,055

 

 

 

 

141,992

 

 

 

 

135,684

 

Total revenues

 

 

 

 

81,831

 

 

 

 

66,821

 

 

 

 

289,213

 

 

 

 

259,184

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct payroll costs

 

 

 

 

34,250

 

 

 

 

24,849

 

 

 

 

113,450

 

 

 

 

92,676

 

Payroll taxes and benefits

 

 

 

 

21,534

 

 

 

 

20,079

 

 

 

 

87,822

 

 

 

 

83,756

 

Workers’ compensation

 

 

 

 

10,590

 

 

 

 

6,240

 

 

 

 

29,031

 

 

 

 

27,199

 

Total cost of revenues

 

 

 

 

66,374

 

 

 

 

51,168

 

 

 

 

230,303

 

 

 

 

203,631

 

Gross margin

 

 

 

 

15,457

 

 

 

 

15,653

 

 

 

 

58,910

 

 

 

 

55,553

 

Selling, general and administrative expenses

 

 

 

 

10,043

 

 

 

 

8,140

 

 

 

 

34,688

 

 

 

 

31,604

 

Depreciation and amortization

 

 

 

 

372

 

 

 

 

341

 

 

 

 

1,387

 

 

 

 

1,306

 

Income from operations

 

 

 

 

5,042

 

 

 

 

7,172

 

 

 

 

22,835

 

 

 

 

22,643

 

Other income, net

 

 

 

 

732

 

 

 

 

812

 

 

 

 

3,083

 

 

 

 

2,847

 

Income before taxes

 

 

 

 

5,774

 

 

 

 

7,984

 

 

 

 

25,918

 

 

 

 

25,490

 

Provision for income taxes

 

 

 

 

1,859

 

 

 

 

2,755

 

 

 

 

9,112

 

 

 

 

9,154

 

Net income

 

 

 

$

3,915

 

 

 

$

5,229

 

 

 

$

16,806

 

 

 

$

16,336

 

Basic earnings per share

 

 

 

$

.35

 

 

 

$

.46

 

 

 

$

1.49

 

 

 

$

1.46

 

Weighted average basic shares outstanding

 

 

 

 

11,193

 

 

 

 

11,251

 

 

 

 

11,247

 

 

 

 

11,194

 

Diluted earnings per share

 

 

 

$

.34

 

 

 

$

.45

 

 

 

$

1.44

 

 

 

$

1.40

 

Weighted average diluted shares outstanding

 

 

 

 

11,555

 

 

 

 

11,680

 

 

 

 

11,654

 

 

 

 

11,671

 

 

 

 

- 1 -

 

Barrett Business Services, Inc.

News Release – Fourth Quarter 2007

February 8, 2008

 

 

            The Company reports its Professional Employer Organization services (“PEO”) revenues on a net basis because it is not the primary obligor for the services provided by the Company’s PEO clients to their customers. The gross revenues and cost of revenues information below, although not in accordance with generally accepted accounting principles (“GAAP”), is presented for comparison purposes and because management believes such information is more informative as to the level of the Company’s business activity and more useful in managing its operations.

 

 

 

 

 

(Unaudited)

 

 

 

(Unaudited)

 

 

 

 

 

Fourth Quarter Ended

 

 

 

Year Ended

 

(in thousands)

 

 

 

December 31,

 

 

 

December 31,

 

 

 

 

 

2007

 

 

 

2006

 

 

 

2007

 

 

 

2006

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Staffing services

 

 

 

$

45,548

 

 

 

$

32,766

 

 

 

$

147,221

 

 

 

$

123,500

 

Professional employer services

 

 

 

 

248,251

 

 

 

 

241,065

 

 

 

 

968,576

 

 

 

 

916,898

 

Total revenues

 

 

 

 

293,799

 

 

 

 

273,831

 

 

 

 

1,115,797

 

 

 

 

1,040,398

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct payroll costs

 

 

 

 

246,530

 

 

 

 

230,555

 

 

 

 

935,697

 

 

 

 

869,410

 

Payroll taxes and benefits

 

 

 

 

21,534

 

 

 

 

20,079

 

 

 

 

87,822

 

 

 

 

83,756

 

Workers’ compensation

 

 

 

 

10,278

 

 

 

 

7,544

 

 

 

 

33,368

 

 

 

 

31,679

 

Total cost of revenues

 

 

 

 

278,342

 

 

 

 

258,178

 

 

 

 

1,056,887

 

 

 

 

984,845

 

Gross margin

 

 

 

$

15,457

 

 

 

$

15,653

 

 

 

$

58,910

 

 

 

$

55,553

 

 

Gross revenues of $293.8 million for the fourth quarter ended December 31, 2007 rose 7.3% over the similar period in 2006. For the year ended December 31, 2007, gross revenues of $1.12 billion increased 7.2% over the comparable 2006 period.

 

 

A reconciliation of non-GAAP gross revenues to net revenues is as follows:

 

For the fourth quarters ended December 31, 2007 and 2006:

 

 

 

(Unaudited)

 

 

Three Months Ended December 31,

 

 

Gross Revenue

 

 

 

 

 

Net Revenue

(in thousands)

 

Reporting Method

 

 

Reclassification

 

 

Reporting Method

 

 

2007

 

 

 

2006

 

 

2007

 

 

 

2006

 

 

2007

 

 

2006

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Staffing services

 

$

45,548

 

 

 

$

32,766

 

 

 

$

—

 

 

 

$

—

 

 

 

$

45,548

 

 

 

$

32,766

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Professional employer services

 

 

248,251

 

 

 

 

241,065

 

 

 

 

(211,968

)

 

 

 

(207,010

)

 

 

 

36,283

 

 

 

 

34,055

 

Total revenues

 

$

293,799

 

 

 

$

273,831

 

 

 

$

(211,968

)

 

 

$

(207,010

)

 

 

$

81,831

 

 

 

$

66,821

 

Cost of revenues

 

$

278,342

 

 

 

$

258,178

 

 

 

$

(211,968

)

 

 

$

(207,010

)

 

 

$

66,374

 

 

 

$

51,168

 

 

 

 

- 2 -

 

Barrett Business Services, Inc.

News Release – Fourth Quarter 2007

February 8, 2008

 

 

For the years ended December 31, 2007 and 2006:

 

 

 

(Unaudited)

 

 

 

Year Ended December 31,

 

 

 

Gross Revenue

 

 

 

 

 

 

 

Net Revenue

 

(in thousands)

 

Reporting Method

 

 

 

Reclassification

 

 

 

Reporting Method

 

 

 

2007

 

 

 

2006

 

 

 

2007

 

 

 

2006

 

 

 

2007

 

 

 

2006

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Staffing services

 

$

147,221

 

 

 

$

123,500

 

 

 

$

—

 

 

 

$

—

 

 

 

$

147,221

 

 

 

$

123,500

 

Professional employer services

 

 

968,576

 

 

 

 

916,898

 

 

 

 

(826,584

)

 

 

 

(781,214

)

 

 

 

141,992

 

 

 

 

135,684

 

Total revenues

 

$

1,115,797

 

 

 

$

1,040,398

 

 

 

$

(826,584

)

 

 

$

(781,214

)

 

 

$

289,213

 

 

 

$

259,184

 

Cost of revenues

 

$

1,056,887

 

 

 

$

984,845

 

 

 

$

(826,584

)

 

 

$

(781,214

)

 

 

$

230,303

 

 

 

$

203,631

 

 

The following summarizes the unaudited consolidated balance sheets at December 31, 2007 and December 31, 2006.

 

 

 

- 3 -

 

Barrett Business Services, Inc.

News Release – Fourth Quarter 2007

February 8, 2008

 

 

 

 

December 31,

 

 

 

December 31,

 

(in thousands)

 

2007

 

 

 

2006

 

Assets

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

62,779

 

 

 

$

69,874

 

Marketable securities

 

 

1,717

 

 

 

 

3,159

 

Trade accounts receivable, net

 

 

36,673

 

 

 

 

31,328

 

Prepaid expenses and other

 

 

1,773

 

 

 

 

1,940

 

Deferred income taxes

 

 

5,471

 

 

 

 

4,699

 

Workers’ compensation receivables for insured claims

 

 

225

 

 

 

 

225

 

Total current assets

 

 

108,638

 

 

 

 

111,225

 

Marketable securities

 

 

417

 

 

 

 

406

 

Goodwill, net

 

 

41,508

 

 

 

 

27,536

 

Intangibles, net

 

 

119

 

 

 

 

75

 

Property, equipment and software, net

 

 

16,136

 

 

 

 

13,502

 

Restricted marketable securities and workers’ compensation deposits

 

 

2,750

 

 

 

 

2,616

 

Other assets

 

 

1,530

 

 

 

 

2,143

 

Workers’ compensation receivables for insured claims

 

 

3,896

 

 

 

 

4,678

 

 

 

$

174,994

 

 

 

$

162,181

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,516

 

 

 

$

1,545

 

Accrued payroll, payroll taxes and related benefits

 

 

33,553

 

 

 

 

33,372

 

Other accrued liabilities

 

 

1,064

 

 

 

 

516

 

Workers’ compensation claims liabilities

 

 

6,031

 

 

 

 

3,843

 

Workers’ compensation claims liabilities for insured claims

 

 

225

 

 

 

 

225

 

Safety incentives liabilities

 

 

5,911

 

 

 

 

7,519

 

Total current liabilities

 

 

48,300

 

 

 

 

47,020

 

Customer deposits

 

 

752

 

 

 

 

817

 

Long-term workers’ compensation claims liabilities

 

 

4,021

 

 

 

 

5,295

 

Long-term workers’ compensation liabilities for insured claims

 

 

2,464

 

 

 

 

3,011

 

Deferred income taxes

 

 

5,038

 

 

 

 

1,545

 

Deferred gain on sale and leaseback

 

 

671

 

 

 

 

793

 

Stockholders’ equity

 

 

113,748

 

 

 

 

103,700

 

 

 

$

174,994

 

 

 

$

162,181

 

 

 

 

- 4 -

 

Barrett Business Services, Inc.

News Release – Fourth Quarter 2007

February 8, 2008

 

 

Outlook for First Quarter 2008

 

The Company also disclosed today limited financial guidance with respect to its operating results for the first quarter ending March 31, 2008. The Company expects gross revenues for the first quarter of 2008 to range from $263 million to $268 million, as compared to $257.5 million for the first quarter of 2007, and anticipates diluted earnings per share for the first quarter of 2008 to range from $.08 to $.12 per share, as compared to $.15 per share for the same period a year ago. A reconciliation of estimated gross revenues to estimated GAAP net revenues for the first quarter of 2008 is not included because PEO revenues and cost of PEO revenues for the period are not reasonably estimable.

 

Conference Call

 

On February 8 at 9:00 a.m. Pacific Time, William W. Sherertz and Michael D. Mulholland will host an investor telephone conference call to discuss fourth quarter 2007 operating results. To participate in the call, dial (877) 356-3717. The call identification number is 34721913. The conference call will also be webcast live at www.barrettbusiness.com. To access the webcast, click on the Investor Relations section of the Web site and select Webcast. A replay of the call will be available beginning Friday, February 8, 2008 at 12:00 p.m. PT and ending on February 15, 2008. To listen to the recording, dial (800) 642-1687 and enter conference identification code 34721913.

 

Statements in this release about future events or performance, including gross revenues and earnings expectations for the first quarter of 2008, are forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results of the Company to be materially different from any future results expressed or implied by such forward-looking statements. Factors that could affect future results include economic conditions in the Company's service areas, the effect of changes in the Company's mix of services on gross margin, the Company's ability to successfully integrate acquired businesses with its existing operations, future workers' compensation claims experience, the effect of changes in the workers’ compensation regulatory environment in one or more of its primary markets and the collectibility of accounts receivable, among others. Other important factors that may affect the Company’s future prospects are described in the Company’s 2006 Annual Report on Form 10-K. Although forward-looking statements help to provide complete information about the Company, readers should keep in mind that forward-looking statements may be less reliable than historical information. The Company undertakes no obligation to update or revise forward-looking statements in this release to reflect events or changes in circumstances that occur after the date of this release.

 

BBSI provides a comprehensive range of human resource management solutions to large and small companies throughout many regions of the United States.

 

#####

 

 

- 5 -