News

BBSI Announces Fourth Quarter 2009 Operating Results, Financial Guidance for 1Q10, Declaration of Quarterly Cash Dividend and Conference Call

2/9/2010 Print Version

VANCOUVER, Wash., Feb 9, 2010 (GlobeNewswire via COMTEX) -- Barrett Business Services, Inc. (Nasdaq:BBSI) reported today net income of $2.2 million compared to net income of $2.3 million for the fourth quarter of 2008. Diluted earnings per share for the 2009 fourth quarter were $.21, as compared to diluted earnings per share of $.21 for the same quarter a year ago.

Net revenues for the fourth quarter ended December 31, 2009 totaled $62.6 million, a decrease of approximately $2.0 million or 3.1% from the $64.6 million for the same quarter in 2008.

(Unaudited) (Unaudited)

(in thousands, except per share

amounts) Fourth Quarter Ended Year Ended

December 31, December 31,

-------------------- ---------------------

Results of Operations 2009 2008 2009 2008

------------------------------- ----------- ------- ----------- --------

Revenues:

Staffing services $30,931 $33,674 $116,155 $154,565

Professional employer service

fees 31,698 30,956 120,305 125,903

----------- ------- ----------- --------

Total revenues 62,629 64,630 236,460 280,468

----------- ------- ----------- --------

Cost of revenues:

Direct payroll costs 23,388 25,173 87,679 114,440

Payroll taxes and benefits 19,617 19,164 82,077 85,531

Workers' compensation 7,636 8,208 41,109 30,887

----------- ------- ----------- --------

Total cost of revenues 50,641 52,545 210,865 230,858

----------- ------- ----------- --------

Gross margin 11,988 12,085 25,595 49,610

Selling, general and

administrative expenses 8,689 8,813 33,481 36,654

Depreciation and amortization 423 393 1,641 1,536

----------- ------- ----------- --------

Income (loss) from operations 2,876 2,879 (9,527) 11,420

Loss on impairment of

investments -- -- -- (3,483)

Other income, net 267 376 1,640 2,054

----------- ------- ----------- --------

Income (loss) before taxes 3,143 3,255 (7,887) 9,991

Provision for (benefit from)

income taxes 950 983 (3,119) 3,728

----------- ------- ----------- --------

Net income (loss) $2,193 $2,272 $(4,768) $6,263

----------- ------- ----------- --------

Basic earnings (loss) per share $.21 $.21 $(.46) $.58

----------- ------- ----------- --------

Weighted average basic shares

outstanding 10,480 10,638 10,452 10,861

----------- ------- ----------- --------

Diluted earnings (loss) per

share $.21 $.21 $(.46) $.56

----------- ------- ----------- --------

Weighted average diluted shares

outstanding 10,497 10,837 10,452 11,120

----------- ------- ----------- --------

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,

-------------------- ----------------------

2009 2008 2009 2008

----------- ------- ----------- ---------

Revenues:

Staffing services $30,931 $33,674 $116,155 $154,565

Professional employer

services 239,884 229,449 903,731 926,028

----------- ------- ----------- ---------

Total revenues 270,815 263,123 1,019,886 1,080,593

----------- ------- ----------- ---------

Cost of revenues:

Direct payroll costs 230,359 222,274 866,167 908,410

Payroll taxes and

benefits 19,617 19,164 82,077 85,531

Workers' compensation 8,851 9,600 46,047 37,042

----------- ------- ----------- ---------

Total cost of revenues 258,827 251,038 994,291 1,030,983

----------- ------- ----------- ---------

Gross margin $11,988 $12,085 $25,595 $49,610

----------- ------- ----------- ---------

Gross revenues of $270.8 million for the fourth quarter ended December 31, 2009 increased 2.9% over the similar period in 2008.

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

For the fourth quarters ended December 31, 2009 and 2008:

(Unaudited)

Three Months Ended December 31,

-----------------------------------------------------------------------

Gross Revenue Net Revenue

(in thousands) Reporting Method Reclassification Reporting Method

--------------------- ---------------------------- ------------------

2009 2008 2009 2008 2009 2008

----------- -------- ---------------- ---------- --------- -------

Revenues:

Staffing services $30,931 $33,674 $-- $-- $30,931 $33,674

Professional

employer services 239,884 229,449 (208,186) (198,493) 31,698 30,956

----------- -------- ---------------- ---------- --------- -------

Total revenues $270,815 $263,123 $(208,186) $(198,493) $62,629 $64,630

----------- -------- ---------------- ---------- --------- -------

Cost of revenues $258,827 $251,038 $(208,186) $(198,493) $50,641 $52,545

----------- -------- ---------------- ---------- --------- -------

For the years ended December 31, 2009 and 2008:

(Unaudited)

Year Ended December 31,

--------------------------------------------------------------------------

Gross Revenue Net Revenue

(in thousands) Reporting Method Reclassification Reporting Method

----------------------- ---------------------------- -------------------

2009 2008 2009 2008 2009 2008

----------- ---------- ---------------- ---------- --------- --------

Revenues:

Staffing services $116,155 $154,565 $-- $-- $116,155 $154,565

Professional

employer services 903,731 926,028 (783,426) (800,125) 120,305 125,903

----------- ---------- ---------------- ---------- --------- --------

Total revenues $1,019,886 $1,080,593 $(783,426) $(800,125) $236,460 $280,468

----------- ---------- ---------------- ---------- --------- --------

Cost of revenues $994,291 $1,030,983 $(783,426) $(800,125) $210,865 $230,858

----------- ---------- ---------------- ---------- --------- --------

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

December December

31, 31,

(in thousands) 2009 2008

-------- --------

Assets

------------------------------

Current assets:

Cash and cash equivalents $36,671 $42,214

Marketable securities 13,766 17,968

Trade accounts receivable,

net 33,070 34,389

Income taxes receivable 4,274 --

Prepaid expenses and other 979 1,440

Deferred income taxes 4,071 2,373

Workers' compensation

receivables for insured

claims 225 225

-------- --------

Total current assets 93,056 98,609

Marketable securities 7,473 427

Goodwill, net 47,338 47,338

Property, equipment and

software, net 14,795 15,503

Restricted marketable

securities and workers'

compensation deposits 2,666 2,701

Other assets 3,104 1,645

Workers' compensation

receivables for insured

claims 3,640 3,837

-------- --------

$172,072 $170,060

-------- --------

Liabilities and Stockholders'

Equity

------------------------------

Current liabilities:

Accounts payable $1,117 $881

Accrued payroll, payroll

taxes and related benefits 30,244 32,296

Other accrued liabilities 499 902

Workers' compensation claims

liabilities 10,509 7,186

Workers' compensation claims

liabilities for insured

claims 225 225

Safety incentives liabilities 4,437 4,626

-------- --------

Total current liabilities 47,031 46,116

Customer deposits 600 706

Long-term workers'

compensation claims

liabilities 14,560 5,235

Long-term workers'

compensation liabilities for

insured claims 2,504 2,438

Deferred income taxes 6,323 4,394

Other long-term liabilities 500 --

Deferred gain on sale and

leaseback 427 549

Stockholders' equity 100,127 110,622

-------- --------

$172,072 $170,060

-------- --------

Outlook for First Quarter 2010

The Company also disclosed today limited financial guidance with respect to its operating results for the first quarter ending March 31, 2010. The Company expects gross revenues for the first quarter of 2010 to range from $258 million to $262 million, as compared to $227.9 million for the first quarter of 2009, and anticipates diluted loss per share for the first quarter of 2010 to range from $.19 to $.22 per share, as compared to a diluted loss per share of $.30 for the same period a year ago. A reconciliation of estimated gross revenues to estimated GAAP net revenues for the first quarter of 2010 is not included because PEO revenues and cost of PEO revenues for the period are not reasonably estimable.

Declaration of Quarterly Cash Dividend

The Company's board of directors declared a regular quarterly cash dividend of $0.08 per share. The cash dividend will be paid on March 12, 2010 to all stockholders of record as of February 26, 2010.

Conference Call

On February 10 at 9:00 a.m. Pacific Time, William W. Sherertz and James D. Miller will host an investor telephone conference call to discuss fourth quarter 2009 operating results. To participate in the call, dial (877) 356-3717. The call identification number is 55213927. 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 Wednesday, February 10, 2010 at 12:00 p.m. PT and ending on Wednesday, February 17, 2010. To listen to the recording, dial (800) 642-1687 and enter conference identification code 55213927.

Statements in this release about future events or performance, including gross revenues and earnings expectations for the first quarter of 2010, 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.

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Barrett Business Services, Inc.

CONTACT:  Barrett Business Services, Inc.

William W. Sherertz, President and Chief Executive Officer

(360) 828-0700