EX-99 2 bbsi8k091026ex99-1.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 THIRD QUARTER 2009 OPERATING RESULTS,

FINANCIAL GUIDANCE FOR 4Q09 AND CONFERENCE CALL

 

VANCOUVER, WASHINGTON, October 26, 2009 – Barrett Business Services, Inc. (Nasdaq: BBSI) reported today net income of $2.9 million compared to net income of $650,000 for the third quarter of 2008. Diluted earnings per share for the 2009 third quarter were $.28, as compared to diluted earnings per share of $.06 for the same quarter a year ago.

 

During the third quarter of 2009, the Company realized a pre-tax gain of $572,000, or approximately $395,000 after tax equating to $.04 per diluted share, from the sale of certain corporate bonds. The gain is included in other income, net in the Company’s results of operations.

 

Net revenues for the third quarter ended September 30, 2009 totaled $65.5 million, a decrease of approximately $12.0 million or 15.5% from the $77.5 million for the same quarter in 2008.

 

 

 

 

 

(Unaudited)

 

 

 

(Unaudited)

($ in thousands, except per share amounts)

 

 

 

Third Quarter Ended

 

 

 

Nine Months Ended

 

 

 

 

September 30,

 

 

 

September 30,

Results of Operations

 

 

 

2009

 

 

 

2008

 

 

 

2009

 

 

 

2008

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Staffing services

 

 

 

$

33,180

 

 

 

$

44,468

 

 

 

$

85,224

 

 

 

$

120,891

Professional employer service fees

 

 

 

 

32,314

 

 

 

 

32,993

 

 

 

 

88,607

 

 

 

 

94,947

Total revenues

 

 

 

 

65,494

 

 

 

 

77,461

 

 

 

 

173,831

 

 

 

 

215,838

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct payroll costs

 

 

 

 

25,095

 

 

 

 

32,941

 

 

 

 

64,291

 

 

 

 

89,267

Payroll taxes and benefits

 

 

 

 

20,399

 

 

 

 

21,201

 

 

 

 

62,460

 

 

 

 

66,367

Workers’ compensation

 

 

 

 

7,859

 

 

 

 

8,410

 

 

 

 

33,473

 

 

 

 

22,679

Total cost of revenues

 

 

 

 

53,353

 

 

 

 

62,552

 

 

 

 

160,224

 

 

 

 

178,313

Gross margin

 

 

 

 

12,141

 

 

 

 

14,909

 

 

 

 

13,607

 

 

 

 

37,525

Selling, general and administrative expenses

 

 

 

 

8,416

 

 

 

 

10,007

 

 

 

 

24,792

 

 

 

 

27,841

Depreciation and amortization

 

 

 

 

422

 

 

 

 

385

 

 

 

 

1,218

 

 

 

 

1,143

Income (loss) from operations

 

 

 

 

3,303

 

 

 

 

4,517

 

 

 

 

(12,403

)

 

 

 

8,541

Loss on impairment of investment

 

 

 

 

—

 

 

 

 

(3,483

)

 

 

 

—

 

 

 

 

(3,483

Other income, net

 

 

 

 

965

 

 

 

 

465

 

 

 

 

1,373

 

 

 

 

1,678

Income (loss) before taxes

 

 

 

 

4,268

 

 

 

 

1,499

 

 

 

 

(11,030

)

 

 

 

6,736

Provision for (benefit from) income taxes

 

 

 

 

1,323

 

 

 

 

849

 

 

 

 

(4,069

)

 

 

 

2,745

Net income (loss)

 

 

 

$

2,945

 

 

 

$

650

 

 

 

$

(6,961

)

 

 

$

3,991

Basic earnings (loss) per share

 

 

 

$

.28

 

 

 

$

.06

 

 

 

$

(.67

)

 

 

$

.36

Weighted average basic shares outstanding

 

 

 

 

10,475

 

 

 

 

10,781

 

 

 

 

10,442

 

 

 

 

10,935

Diluted earnings (loss) per share

 

 

 

$

.28

 

 

 

$

.06

 

 

 

$

(.67

)

 

 

$

.36

Weighted average diluted shares outstanding

 

 

 

 

10,559

 

 

 

 

10,997

 

 

 

 

10,442

 

 

 

 

11,214

 

 

- 1 -

 

 

            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)

 

 

 

 

 

Third Quarter Ended

 

 

 

Nine Months Ended

 

(in thousands)

 

 

 

September 30,

 

 

 

September 30,

 

 

 

 

 

2009

 

 

 

2008

 

 

 

2009

 

 

 

2008

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Staffing services

 

 

 

$

33,180

 

 

 

$

44,468

 

 

 

$

85,224

 

 

 

$

120,891

 

Professional employer services

 

 

 

 

239,872

 

 

 

 

243,927

 

 

 

 

663,847

 

 

 

 

696,579

 

Total revenues

 

 

 

 

273,052

 

 

 

 

288,395

 

 

 

 

749,071

 

 

 

 

817,470

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct payroll costs

 

 

 

 

231,532

 

 

 

 

242,396

 

 

 

 

635,808

 

 

 

 

686,136

 

Payroll taxes and benefits

 

 

 

 

20,399

 

 

 

 

21,201

 

 

 

 

62,460

 

 

 

 

66,367

 

Workers’ compensation

 

 

 

 

8,980

 

 

 

 

9,889

 

 

 

 

37,196

 

 

 

 

27,442

 

Total cost of revenues

 

 

 

 

260,911

 

 

 

 

273,486

 

 

 

 

735,464

 

 

 

 

779,945

 

Gross margin

 

 

 

$

12,141

 

 

 

$

14,909

 

 

 

$

13,607

 

 

 

$

37,525

 

 

Gross revenues of $273.1 million for the third quarter ended September 30, 2009 declined 5.3% from the similar period in 2008.

 

 

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

 

For the third quarters ended September 30, 2009 and 2008:

 

 

 

(Unaudited)

 

 

Three Months Ended September 30,

 

 

Gross Revenue

 

 

 

 

 

 

Net Revenue

(in thousands)

 

Reporting Method

 

 

Reclassification

 

 

 

Reporting Method

 

 

2009

 

 

 

2008

 

 

 

2009

 

 

 

2008

 

 

 

2009

 

 

 

2008

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Staffing services

 

$

33,180

 

 

 

$

44,468

 

 

 

$

—

 

 

 

$

—

 

 

 

$

33,180

 

 

 

$

44,468

Professional

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

employer services

 

 

239,872

 

 

 

 

243,927

 

 

 

 

(207,558

)

 

 

 

(210,934

)

 

 

 

32,314

 

 

 

 

32,993

Total revenues

 

$

273,052

 

 

 

$

288,395

 

 

 

$

(207,558

)

 

 

$

(210,934

)

 

 

$

65,494

 

 

 

$

77,461

Cost of revenues

 

$

260,911

 

 

 

$

273,486

 

 

 

$

(207,558

)

 

 

$

(210,934

)

 

 

$

53,353

 

 

 

$

62,552

 

 

- 2 -

 

 

Barrett Business Services, Inc.

News Release – Third Quarter 2009

October 26, 2009

 

 

For the nine months ended September 30, 2009 and 2008:

 

 

 

(Unaudited)

 

 

Nine Months Ended September 30,

 

 

Gross Revenue

 

 

 

 

 

 

 

Net Revenue

(in thousands)

 

Reporting Method

 

 

 

Reclassification

 

 

 

Reporting Method

 

 

2009

 

 

 

2008

 

 

 

2009

 

 

 

2008

 

 

 

2009

 

 

 

2008

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Staffing services

 

$

85,224

 

 

 

$

120,891

 

 

 

$

—

 

 

 

$

—

 

 

 

$

85,224

 

 

 

$

120,891

Professional

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

employer services

 

 

663,847

 

 

 

 

696,579

 

 

 

 

(575,240

)

 

 

 

(601,632

)

 

 

 

88,607

 

 

 

 

94,947

Total revenues

 

$

749,071

 

 

 

$

817,470

 

 

 

$

(575,240

)

 

 

$

(601,632

)

 

 

$

173,831

 

 

 

$

215,838

Cost of revenues

 

$

735,464

 

 

 

$

779,945

 

 

 

$

(575,240

)

 

 

$

(601,632

)

 

 

$

160,224

 

 

 

$

178,313

 

The following summarizes the unaudited consolidated balance sheets at September 30, 2009 and December 31, 2008.

 

- 3 -

 

 

Barrett Business Services, Inc.

News Release – Third Quarter 2009

October 26, 2009

 

 

 

 

September 30,

 

 

 

December 31,

(in thousands)

 

2009

 

 

 

2008

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

38,505

 

 

 

$

42,214

Marketable securities

 

 

8,919

 

 

 

 

17,968

Trade accounts receivable, net

 

 

46,194

 

 

 

 

34,389

Income taxes receivable

 

 

4,455

 

 

 

 

—

Prepaid expenses and other

 

 

1,365

 

 

 

 

1,440

Deferred income taxes

 

 

2,963

 

 

 

 

2,373

Workers’ compensation receivables for insured claims

 

 

225

 

 

 

 

225

Total current assets

 

 

102,626

 

 

 

 

98,609

Marketable securities

 

 

6,389

 

 

 

 

427

Goodwill, net

 

 

47,338

 

 

 

 

47,338

Property, equipment and software, net

 

 

15,014

 

 

 

 

15,503

Restricted marketable securities and workers’ compensation deposits

 

 

3,454

 

 

 

 

2,701

Other assets

 

 

1,650

 

 

 

 

1,645

Workers’ compensation receivables for insured claims

 

 

3,552

 

 

 

 

3,837

 

 

$

180,023

 

 

 

$

170,060

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

648

 

 

 

$

881

Accrued payroll, payroll taxes and related benefits

 

 

42,134

 

 

 

 

32,296

Other accrued liabilities

 

 

557

 

 

 

 

902

Workers’ compensation claims liabilities

 

 

9,872

 

 

 

 

7,186

Workers’ compensation claims liabilities for insured claims

 

 

225

 

 

 

 

225

Safety incentives liabilities

 

 

4,588

 

 

 

 

4,626

Total current liabilities

 

 

58,024

 

 

 

 

46,116

Customer deposits

 

 

614

 

 

 

 

706

Long-term workers’ compensation claims liabilities

 

 

15,377

 

 

 

 

5,235

Long-term workers’ compensation liabilities for insured claims

 

 

2,350

 

 

 

 

2,438

Deferred income taxes

 

 

3,911

 

 

 

 

4,394

Deferred gain on sale and leaseback

 

 

457

 

 

 

 

549

Stockholders’ equity

 

 

99,290

 

 

 

 

110,622

 

 

$

180,023

 

 

 

$

170,060

 

Outlook for Fourth Quarter 2009

 

The Company also disclosed today limited financial guidance with respect to its operating results for the fourth quarter ending December 31, 2009. The Company expects gross revenues for the fourth quarter of 2009 to range from $265 million to $270 million, as compared to $263.1 million for the fourth quarter of 2008, and anticipates diluted earnings per share for the fourth quarter of 2009 to range from $.19 to $.22 per share, as compared to diluted earnings per share of $.21 for the same period a year ago. A reconciliation of estimated gross revenues to estimated GAAP net revenues for the fourth quarter of 2009 is not included because PEO revenues and cost of PEO revenues for the period are not reasonably estimable.

 

- 4 -

 

 

Barrett Business Services, Inc.

News Release – Third Quarter 2009

October 26, 2009

 

 

Conference Call

 

On October 27 at 9:00 a.m. Pacific Time, William W. Sherertz, Michael L. Elich and James D. Miller will host an investor telephone conference call to discuss third quarter 2009 operating results. To participate in the call, dial (877) 356-3717. The call identification number is 36223270. 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 October 27, 2009 at 12:00 p.m. PT and ending on Tuesday, November 3, 2009. To listen to the recording, dial (800) 642-1687 and enter conference identification code 36223270.

 

Statements in this release about future events or performance, including gross revenues and earnings expectations for the fourth quarter of 2009, 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, the collectibility of accounts receivable and the effect of conditions in the global capital markets on the Company’s investment portfolio, among others. Other important factors that may affect the Company’s future prospects are described in the Company’s 2008 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.

 

#####

 

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