News

BBSI Responds to Letter From Independent Auditor

11/9/2015 Print Version

VANCOUVER, WA -- (Marketwired) -- 11/09/15 --

Barrett Business Services, Inc. (BBSI) (NASDAQ: BBSI), a leading provider of business management solutions, reported that the audit committee of its board of directors has received a letter from BBSI's independent registered public accounting firm, Moss Adams LLP. The letter notifies BBSI that Moss Adams' completed interim review of BBSI's unaudited interim consolidated financial statements as of June 30, 2014, and for the periods then ended, can no longer be relied upon, and indicates that Moss Adams will not be in a position to complete its required review of BBSI's quarterly financial statements at September 30, 2015, by the filing due date.

In connection with receipt of the letter, the audit committee has engaged Stoll Berne as independent legal counsel to conduct an independent investigation regarding BBSI's workers' compensation reserve for the quarter ended June 30, 2014. Moss Adams states in its letter that it has become aware of information indicating that an illegal act has or may have occurred with respect to BBSI's workers' compensation expense reserve as reported in the Form 10-Q filing as of June 30, 2014. The audit committee believes that the notice from Moss Adams was triggered by Moss Adams' recently becoming aware of an actuarial analysis prepared by a consultant engaged by BBSI's management to, among other things, work with its independent actuary of record at the time. In October 2014, BBSI engaged the actuarial side of the consulting firm as its independent actuary to replace its previous actuary of record.

Thomas J. Carley, chairman of BBSI's audit committee, stated: "The Moss Adams letter relates to the quarter ended June 30, 2014, which was the quarter immediately preceding the company's decision to record an $80 million charge to strengthen its workers' compensation reserves in the 2014 third quarter. At the July 28, 2014 audit committee meeting, the audit committee concluded that sufficiently reliable actuarial data was not available to support a higher reserve for the quarter ended June 30, 2014."

Carley continued: "We take these allegations seriously. The audit committee has engaged independent counsel to conduct the investigation, and we will support counsel in its efforts and look forward to receiving its report. The audit committee believes the concerns raised by Moss Adams involve complex technical issues under generally accepted auditing standards and Section 10A of the Securities Exchange Act of 1934 and have no bearing on BBSI's 2014 annual financial statements."

Anthony Meeker, chairman of BBSI's board of directors, commented: "Looking back over the past several years, under the board's oversight, management has engaged in an ongoing process to strengthen BBSI's operations. As part of that process, the company made a series of difficult decisions related specifically to its workers' compensation reserves in 2013 and 2014, which resulted in complicating the data analysis to be performed by its actuaries. We further believe the process of seeking a better understanding of workers' compensation reserves has led to greater consistency in reserving practices as seen through stronger predictability in the business overall. We continue to have full confidence in BBSI's management team and in the company's continued ability to prosper and provide value for shareholders."

Michael Elich, President and CEO, commented: "I am proud of the organization we've built over the past many years and we will continue to focus on supporting small businesses across a broad market. I fully support the current investigation, and I am eager to get to the bottom of any issues so that the organization can focus on the important work we do every day."

BBSI intends to file its quarterly report on Form 10-Q for the quarter ended September 30, 2015 with the Securities and Exchange Commission as soon as practicable after the audit committee's independent investigation has been completed, and after Moss Adams has had an opportunity to review and assess the findings of the investigation and to finalize its review of BBSI's unaudited interim consolidated financial statements for the 2015 third quarter. Moss Adams continues to be BBSI's independent registered public accounting firm.

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. BBSI'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. BBSI works with more than 3,400 clients across all lines of business in 23 states. For more information, please visit www.barrettbusiness.com.

Forward-Looking Statements

The information in this release regarding the investigation by independent counsel and the effects on BBSI's financial statements includes forward-looking statements that are subject to risks and uncertainties. Additional considerations and other important risk factors affecting BBSI's business are described in BBSI's reports on Forms 10-K and 10-Q and other filings with the Securities and Exchange Commission. Although forward-looking statements help to provide complete information about BBSI, readers should keep in mind that forward-looking statements are less reliable than historical information. The forward-looking statements in this report speak only as of the date hereof. BBSI 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.

Company Contact:

Michael L. Elich

President and Chief Executive Officer

Tel 1-360-828-0700

Investor Relations:

Liolios

Cody Slach

Tel 1-949-574-3860

Email Contact

Source: Barrett Business Services, Inc.