News

BBSI Reports First Quarter 2015 Financial Results

4/28/2015 Print Version

Q1 Net Revenues up 24% to $166.9 Million; Non-GAAP Gross Revenues up 23% to $896.9 Million

VANCOUVER, WA -- (Marketwired) -- 04/28/15 --

Barrett Business Services, Inc. ("BBSI" or the "Company") (NASDAQ: BBSI), a leading provider of business management solutions, reported financial results for the first quarter ended March 31, 2015.

First Quarter 2015 Financial Highlights vs. Year-Ago Quarter

Net revenues up 24% to $166.9 million

Gross revenues up 23% to $896.9 million

Net loss of $5.8 million or $(0.81) per diluted share, compared to a net loss of $3.6 million or $(0.50) per diluted share

First Quarter 2015 Financial Results

Net revenues in the first quarter of 2015 increased 24% to $166.9 million compared to $135.1 million in the first quarter of 2014.

Total non-GAAP gross revenues in the first quarter of 2015 increased 23% to $896.9 million compared to $727.4 million in the first quarter of 2014 (see "Reconciliation of Non-GAAP Financial Measures" below). The increase was primarily due to the continued build in the Company's co-employed client count and same-store sales growth.

Net loss in the first quarter of 2015 was $5.8 million or $(0.81) per diluted share, compared to a net loss of $3.6 million or $(0.50) per diluted share in the year-ago quarter. The Company historically incurs losses in the first quarter due to the higher effective payroll taxes at the beginning of each year.

At March 31, 2015, the Company's cash, cash equivalents, marketable securities and restricted securities totaled $248.3 million compared to $239.1 million at December 31, 2014.

Management Commentary

"The momentum we experienced in our business at the end of 2014 has continued into the first quarter," said Michael Elich, president and CEO of BBSI. "Our gross revenue expanded by 23%, supported by 7.6% same-store sales growth. Additionally, we experienced an approximate net build of 229 new clients. This continued build speaks to the strength of our referral relationships, as well as to the value our operational teams deliver in support of our clients.

"We are maintaining our rolling 12-month outlook due to the stability of our current client base, the strength of our new business channels and the scalability of our operations. In fact, the strategic investments in our infrastructure over the past several years have laid the groundwork for our performance and we are confident these investments will help BBSI's brand continue to mature in the marketplace."

12 Month Outlook

BBSI continues to expect gross revenues for the next 12-month period to increase approximately 18%. Included in this expectation is a high single-digit contribution from same-store sales growth as well as growth from new business consistent with current trends.

Conference Call

BBSI will conduct a conference call tomorrow, April 29, 2015 at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) to discuss its financial results for the first quarter ended March 31, 2015. The Company's President and CEO Michael Elich and CFO James Miller will host the call, followed by a question and answer period.

Date: Wednesday, April 29, 2015

Time: 12:00 p.m. Eastern time (9:00 a.m. Pacific time)

Toll-free dial-in number: 1-888-481-2844

International dial-in number: 1-719-325-2455

Conference ID: 3372136

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

The conference call will be broadcast live and available for replay at http://public.viavid.com/index.php?id=114000 and via BBSI's investor relations section of the BBSI website at www.barrettbusiness.com.

A replay of the conference call will be available after 3:00 p.m. Eastern time on the same day through May 29, 2015.

Toll-free replay number: 1-877-870-5176

International replay number: 1-858-384-5517

Replay ID: 3372136

Reconciliation of Non-GAAP Financial Measures

In addition to the results prepared in accordance with generally accepted accounting principles ("GAAP"), the Company is disclosing non-GAAP gross revenues.

The Company reports its Professional Employer Service revenues on a net basis because it is not the primary obligor for the services provided by the Company's co-employed clients to their customers. The gross revenues and cost of revenues information below, although not in accordance with 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)
First Quarter Ended
(in thousands) March 31,
2015 2014
Revenues:
Professional employer services $857,760 $693,926
Staffing services 39,166 33,451
Total revenues 896,926 727,377
Cost of revenues:
Direct payroll costs 754,435 613,320
Payroll taxes and benefits 88,294 72,817
Workers' compensation 45,221 31,934
Total cost of revenues 887,950 718,071
Gross margin $8,976 $9,306

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

(Unaudited)
Three Months Ended March 31,
Gross Revenue Net Revenue
(in thousands) Reporting Method Reclassification Reporting Method
2015 2014 2015 2014 2015 2014
Revenues:
Professional employer services $857,760 $693,926 $(730,009) $(592,237) $127,751 $101,689
Staffing services 39,166 33,451 - - 39,166 33,451
Total revenues $896,926 $727,377 $(730,009) $(592,237) $166,917 $135,140
Cost of revenues $887,950 $718,071 $(730,009) $(592,237) $157,941 $125,834

About BBSI

BBSI (NASDAQ: BBSI) is a leading provider of business management solutions, combining human resource outsourcing and professional management consulting to create a unique operational platform that differentiates it from competitors. The Company's integrated platform is built upon expertise in payroll processing, employee benefits, workers' compensation coverage, risk management and workplace safety programs, and human resource administration. BBSI's partnerships help businesses of all sizes improve the efficiency of their operations. The Company works with more than 3,000 clients across all lines of business in 23 states. For more information, please visit www.barrettbusiness.com.

Forward-Looking Statements

Statements in this release about future events or performance, including expectations for gross revenues for the next 12 months, 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 clients and attract new clients, the availability of financing or other sources of capital, the potential for material deviations from expected 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 collectability of accounts receivable, the carrying value of deferred income tax assets and goodwill, 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 2014 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 are 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.

Barrett Business Services, Inc.
Condensed Balance Sheets
(Unaudited)
March 31, December 31,
(in thousands) 2015 2014
Assets
Current assets:
Cash and cash equivalents $15,205 $11,544
Marketable securities 21,670 29,957
Trade accounts receivable, net 130,376 102,627
Income taxes receivable 13,586 11,421
Prepaid expenses and other 6,658 3,813
Restricted markertabe securities and workers' compensation deposits 12,533 3,776
Deferred income taxes 15,763 15,791
Total current assets 215,791 178,929
Marketable securities 6,034 20,930
Property, equipment and software, net 22,648 22,675
Restricted certificates of deposit 114,335 114,335
Restricted marketable securities and workers' compensation deposits 78,516 58,533
Other assets 4,960 5,306
Goodwill 47,820 47,820
$490,104 $448,528
Liabilities and Stockholders' Equity
Current liabilities:
Line of credit $5,772 $-
Current portion of long-term debt 25,220 25,220
Accounts payable 3,500 2,719
Accrued payroll, payroll taxes and related benefits 154,508 120,133
Other accrued liabilities 1,784 1,917
Workers' compensation claims liabilities 56,480 54,049
Safety incentives liabilities 15,499 14,232
Total current liabilities 262,763 218,270
Long-term workers' compensation claims liabilities 165,785 161,933
Long term debt 19,778 19,833
Deferred income taxes 8,159 8,159
Customer deposits and other long-term liabilities 1,534 1,675
Stockholders' equity 32,085 38,658
$490,104 $448,528

Barrett Business Services, Inc.
Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share amounts) First Quarter Ended
March 31,
2015 2014
Revenues:
Professional employer service fees $127,751 $101,689
Staffing services 39,166 33,451
Total revenues 166,917 135,140
Cost of revenues:
Direct payroll costs 29,764 25,417
Payroll taxes and benefits 88,294 72,817
Workers' compensation 39,883 27,600
Total cost of revenues 157,941 125,834
Gross margin 8,976 9,306
Selling, general and administrative expenses 16,975 14,369
Depreciation and amortization 683 584
Loss from operations (8,682) (5,647)
Other income, net (445) 90
Loss before taxes (9,127) (5,557)
Benefit from income taxes (3,325) (1,974)
Net loss $(5,802) $(3,583)
Basic loss per common share $(0.81) $(0.50)
Weighted average basic common shares outstanding 7,135 7,170
Diluted income loss per common share $(0.81) $(0.50)
Weighted average diluted common shares outstanding 7,135 7,170

Company Contact:

Michael L. Elich

President and CEO

Tel 1-360-828-0700


Investor Relations:

Liolios Group, Inc.

Cody Slach

Tel 1-949-574-3860

Email Contact

Source: Barrett Business Services, Inc.