News

BBSI Announces Fourth Quarter 2010 Operating Results, Financial Guidance for 1Q11 and Conference Call

2/9/2011 Print Version

VANCOUVER, Wash., Feb 9, 2011 (GlobeNewswire via COMTEX) -- Barrett Business Services, Inc. (Nasdaq:BBSI) reported today net income of $3.1 million for the fourth quarter ended December 31, 2010 compared to net income of $2.2 million for the fourth quarter of 2009. Diluted earnings per share for the 2010 fourth quarter were $.31, 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, 2010 totaled $73.6 million, an increase of approximately $11.0 million or 17.4% over the $62.6 million for the same quarter in 2009.

                                        (Unaudited)            (Unaudited)

(in thousands, except per share

amounts) Fourth Quarter Ended Year Ended

December 31, December 31,

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

Results of Operations 2010 2009 2010 2009

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

Revenues:

Staffing services $ 32,747 $ 30,931 $ 125,738 $ 116,155

Professional employer service

fees 40,808 31,698 147,385 120,305

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

Total revenues 73,555 62,629 273,123 236,460

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

Cost of revenues:

Direct payroll costs 24,920 23,388 95,439 87,679

Payroll taxes and benefits 24,670 19,617 96,660 82,077

Workers' compensation 10,353 7,636 36,234 41,109

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

Total cost of revenues 59,943 50,641 228,333 210,865

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

Gross margin 13,612 11,988 44,790 25,595

Selling, general and

administrative expenses 9,642 8,689 35,429 33,481

Depreciation and amortization 344 423 1,395 1,641

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

Income (loss) from operations 3,626 2,876 7,966 (9,527)

Other income, net 758 267 2,011 1,640

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

Income (loss) before taxes 4,384 3,143 9,977 (7,887)

Provision for (benefit from)

income taxes 1,236 950 2,551 (3,119)

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

Net income (loss) $ 3,148 $ 2,193 $ 7,426 $ (4,768)

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

Basic income (loss) per share $ .31 $ .21 $ .72 $ (.46)

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

Weighted average basic shares

outstanding 10,202 10,480 10,333 10,452

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

Diluted income (loss) per share $ .31 $ .21 $ .72 $ (.46)

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

Weighted average diluted shares

outstanding 10,260 10,497 10,372 10,452

=========== ======== =========== =========

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,

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

2010 2009 2010 2009

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

Revenues:

Staffing services $ 32,747 $ 30,931 $ 125,738 $ 116,155

Professional employer

services 311,495 239,884 1,111,052 903,731

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

Total revenues 344,242 270,815 1,236,790 1,019,886

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

Cost of revenues:

Direct payroll costs 294,058 230,359 1,053,748 866,167

Payroll taxes and

benefits 24,671 19,617 96,661 82,077

Workers' compensation 11,901 8,851 41,591 46,047

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

Total cost of

revenues 330,630 258,827 1,192,000 994,291

=========== ========= =========== ==========

Gross margin $ 13,612 $ 11,988 $ 44,790 $ 25,595

=========== ========= =========== ==========

Gross revenues of $344.2 million for the fourth quarter ended December 31, 2010 increased 27.1% over the similar period in 2009.

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

For the fourth quarters ended December 31, 2010 and 2009:

                                                          (Unaudited)

Three Months Ended December 31,

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

Gross Revenue Net Revenue

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

(in thousands) Reporting Method Reclassification Reporting Method

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

2010 2009 2010 2009 2010 2009

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

Revenues:

Staffing services $ 32,747 $ 30,931 $ -- $ -- $ 32,747 $ 30,931

Professional

employer services 311,495 239,884 (270,687) (208,186) 40,808 31,698

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

Total revenues $ 344,242 $ 270,815 $ (270,687) $ (208,186) $ 73,555 $ 62,629

=========== ========== ================ ============ ========= =========

Cost of revenues $ 330,630 $ 258,827 $ (270,687) $ (208,186) $ 59,943 $ 50,641

=========== ========== ================ ============ ========= =========

For the years ended December 31, 2010 and 2009:

                                                            (Unaudited)

Year Ended December 31,

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

Gross Revenue Net Revenue

(in thousands) Reporting Method Reclassification Reporting Method

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

2010 2009 2010 2009 2010 2009

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

Revenues:

Staffing services $ 125,738 $ 116,155 $ -- $ -- $ 125,738 $ 116,155

Professional

employer services 1,111,052 903,731 (963,667) (783,426) 147,385 120,305

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

Total revenues $ 1,236,790 $ 1,019,886 $ (963,667) $ (783,426) $ 273,123 $ 236,460

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

Cost of revenues $ 1,192,000 $ 994,291 $ (963,667) $ (783,426) $ 228,333 $ 210,865

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

The following summarizes the unaudited consolidated balance sheets at December 31, 2010 and December 31, 2009.

                                   December   December

31, 31,

(in thousands) 2010 2009

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

Assets

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

Current assets:

Cash and cash equivalents $ 30,924 $ 36,671

Marketable securities 24,511 13,766

Trade accounts receivable,

net 37,596 33,070

Income taxes receivable 214 4,274

Prepaid expenses and other 1,798 979

Deferred income taxes 5,540 4,071

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

Total current assets 100,583 92,831

Marketable securities 5,921 7,473

Property, equipment and

software, net 15,037 14,795

Restricted marketable

securities and workers'

compensation deposits 8,811 2,666

Other assets 3,094 3,104

Workers' compensation

receivables for insured

claims 3,915 3,865

Goodwill, net 47,820 47,338

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

$ 185,181 $ 172,072

========= =========

Liabilities and Stockholders'

Equity

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

Current liabilities:

Accounts payable $ 964 $ 1,117

Accrued payroll, payroll

taxes and related benefits 37,525 30,244

Other accrued liabilities 442 499

Workers' compensation claims

liabilities 11,462 10,509

Safety incentives

liabilities 5,024 4,437

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

Total current liabilities 55,417 46,806

Long-term workers'

compensation claims

liabilities 16,944 14,560

Long-term workers'

compensation liabilities for

insured claims 2,686 2,729

Deferred income taxes 8,079 6,323

Customer deposits and other

long-term liabilities 1,422 1,527

Stockholders' equity 100,633 100,127

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

$ 185,181 $ 172,072

========= =========

Outlook for First Quarter 2011

The Company also disclosed today limited financial guidance with respect to its operating results for the first quarter ending March 31, 2011. The Company expects gross revenues for the first quarter of 2011 to range from $320 million to $325 million, as compared to $262.6 million for the first quarter of 2010, and anticipates diluted earnings for the first quarter of 2011 to range from $.50 to $.54 per share, as compared to a diluted loss per share of $.16 for the same period a year ago. The anticipated diluted earnings per share for the 2011 first quarter includes expected proceeds of $10 million from key man life insurance coverage the Company carried with respect to William W. Sherertz, the Company's President and CEO, who passed away January 20, 2011. Without the effect of the life insurance proceeds, the estimated diluted loss per share for the 2011 first quarter is $.19 to $.22 which is consistent with historical first quarter losses. A reconciliation of estimated gross revenues to estimated GAAP net revenues for the first quarter of 2011 is not included because PEO revenues and cost of PEO revenues for the period are not reasonably estimable.

Conference Call

On Thursday, February 10 at 9:00 a.m. Pacific Time, Tony Meeker, Michael Elich and James Miller will host an investor telephone conference call to discuss fourth quarter 2010 operating results. To participate in the call, dial (877) 214-1511. The call identification number is 42072859. 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 Thursday, February 10, 2011 at 12:00 p.m. PT and ending on Thursday, February 17, 2011. To listen to the recording, dial (800) 642-1687 and enter conference identification code 42072859.

Statements in this release about future events or performance, including gross revenues and earnings expectations for the first quarter of 2011, 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 retain current customers and attract new customers, future workers' compensation claims experience, the effect of changes in the workers' compensation regulatory environment in one or more of the Company's 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 2009 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:  Michael L. Elich
Interim President and Chief Executive Officer
(360) 828-0700