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Barrett Business Services, Inc. Announces Fourth Quarter 2000 Earnings And Revenues and Schedules Investor Conference Call to Discuss Operating Results

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PORTLAND, Ore., Feb. 7 /PRNewswire/ --

Barrett Business Services, Inc. (Nasdaq: BBSI) reported today net income of

$63,000 for the fourth quarter ended December 31, 2000. Basic and diluted

earnings per share for the 2000 fourth quarter were $.01, as compared to basic

and diluted earnings per share of $.18 for the 1999 fourth quarter. Net

income for the year ended December 31, 2000 amounted to $2,101,000. Basic and

diluted earnings per share for 2000 were $.29, compared to $.68 for basic and

diluted earnings per share for 1999.

Revenues for the fourth quarter ended December 31, 2000 totaled

$68.1 million, a decrease of approximately $28.2 million or 29.3% from

$96.3 million for the same quarter in 1999. Revenues for the year ended

December 31, 2000 were $322.5 million, a decline of $25.4 million or 7.3% from

1999.

      (in thousands, except

per share amounts) Fourth Quarter Ended Year Ended

(Unaudited) December 31, December 31,

Results of Operations 2000 1999 2000 1999

Revenues:

Staffing services $39,154 $55,142 $188,500 $194,991

Professional employer services 28,944 41,111 133,966 152,859

Total revenues 68,098 96,253 322,466 347,850

Cost of revenues:

Direct payroll costs 52,991 75,024 251,015 270,049

Payroll taxes and benefits 5,219 7,590 27,007 28,603

Workers' compensation 3,378 3,545 12,639 11,702

Total cost of revenues 61,588 86,159 290,661 310,354

Gross margin 6,510 10,094 31,805 37,496

Selling, general and

administrative expenses 5,506 7,011 24,583 25,942

Depreciation and amortization 819 692 3,192 2,476

Income from operations 185 2,391 4,030 9,078

Other (expense) income, net (78) (165) (483) (245)

Income before taxes 107 2,226 3,547 8,833

Provision for income taxes 44 867 1,446 3,684

Net income $63 $1,359 $2,101 $5,149

Basic earnings per share $.01 $.18 $.29 $.68

Weighted average basic shares

outstanding 6,838 7,495 7,237 7,581

Diluted earnings per share $.01 $.18 $.29 $.68

Weighted average diluted shares

outstanding 6,864 7,541 7,277 7,627

The following summarizes the unaudited balance sheets at December 31, 2000

and December 31, 1999:

                        ($ in thousands)                     December 31,

2000 1999

Assets

Current assets:

Cash and cash equivalents $516 $550

Trade accounts receivable, net 20,660 30,216

Prepaid expenses and other 1,222 1,219

Deferred tax assets 2,702 1,658

Total current assets 25,100 33,643

Intangibles, net 20,982 21,945

Property, equipment and software, net 7,177 7,027

Restricted marketable securities and

workers' compensation deposits 4,254 6,281

Unrestricted marketable securities 1,386 --

Deferred tax assets 839 712

Other assets 1,374 1,132

$61,112 $70,740

Liabilities and Stockholders' Equity

Current liabilities:

Notes payable $-- $865

Current portion of long-term debt 2,939 2,783

Line of credit payable 2,628 4,882

Accounts payable 1,013 1,356

Accrued payroll, payroll taxes and

related benefits 7,893 11,437

Workers' compensation claim and

safety incentive liabilities 5,274 4,219

Other accrued liabilities 1,622 413

Total current liabilities 21,369 25,955

Long-term debt, net of current portion 1,508 4,232

Customer deposits 614 815

Long-term workers' compensation liabilities 682 699

Other long-term liabilities 2,022 1,710

Stockholders' equity 34,917 37,329

$61,112 $70,740

The decline in net income for the fourth quarter of 2000 compared to the

same quarter a year ago was primarily due to a 29% decline in revenues,

coupled with a reduction in gross margin percent, as a result of higher

workers' compensation expense, expressed as a percent of revenues. Although

selling, general and administrative expenses were reduced 21.5% from a year

ago, such expenses increased from 7.3% to 8.1% as a percent of revenues.

William W. Sherertz, President and Chief Executive Officer, commented

that: "Our revenue trends reflect the varying economic conditions of the five

distinct geographic areas in which we operate. The decline in our revenues

was due to a downturn in the business conditions of our customers and, in

part, to the continuation of a tight labor market in Southern California. The

supply constraint issue in 2000 is now easing, particularly in the Northwest.

Revenues for 2000 were also negatively affected by the Company's decision to

terminate its relationship with certain customers due to unacceptable profit

margins or risks associated with credit or workplace safety. Management is

continuing to increase the Company's rates for its services within competitive

constraints and to further reduce SG&A expenses to improve profitability in

2001."

On Thursday, February 8, 2001, at 8:00 a.m. (Pacific) and 11:00 a.m.

(Eastern), William W. Sherertz will host an investor telephone conference call

to discuss fourth quarter 2000 operating results.

To participate in the call, dial 800-399-3080 shortly before 8:00 a.m.

Pacific time on Thursday, February 8, 2001. If you are unable to participate

in the call, a recording of the call will be available beginning Thursday,

February 8, 2001 at 12 noon (Pacific) and ending Thursday, February 15, 2001

at 12 noon (Pacific). To listen to the recording, enter conference

identification code 966445.

Statements in this release about future events or performance 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, and

future workers' compensation claims experience, among others. 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.
SOURCE Barrett Business Services, Inc.
Web site: http: //www.barrettbusiness.com
Company News On-Call: http: //www.prnewswire.com/comp/082187.html or fax, 800-758-5804, ext. 082187
CONTACT: William W. Sherertz, President and Chief Executive Officer, 503-220-0988