Barrett Business Services, Inc. Announces First Quarter 2001 Operating Results And Schedules Investor Conference Call

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PORTLAND, Ore., May 2 /PRNewswire/ --

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

$211,000 for the first quarter ended March 31, 2001, a decline of $955,000

from net income of $744,000 for the first quarter of 2000. Basic and diluted

net loss per share for the 2001 first quarter were $(.03), as compared to

basic and diluted earnings of $.10 for the 2000 first quarter.

Revenues for the first quarter ended March 31, 2001 totaled $55.2 million,

a decrease of approximately $31.9 million or 36.7% from the $87.1 million for

the same quarter in 2000.


First Quarter Ended

March 31,

Results of Operations 2001 2000

(in thousands, except per share amounts)


Staffing services $31,272 $47,767

Professional employer services 23,881 39,355

Total revenues 55,153 87,122

Cost of revenues:

Direct payroll costs 42,760 68,004

Payroll taxes and benefits 4,874 7,918

Workers' compensation 2,177 2,597

Total cost of revenues 49,811 78,519

Gross margin 5,342 8,603

Selling, general and administrative expenses 4,876 6,485

Depreciation and amortization 829 731

(Loss) income from operations (363) 1,387

Other income (expense), net 7 (132)

(Loss) income before taxes (356) 1,255

(Benefit from) provision for income taxes (145) 511

Net (loss) income $(211) $744

Basic (loss) earnings per share $(.03) $.10

Weighted average basic shares outstanding 6,400 7,459

Diluted (loss) earnings per share $(.03) $.10

Weighted average diluted shares outstanding 6,400 7,509

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

that: "Our decline in revenues reflects the general softening of business

conditions in our market areas, particularly in our Northern California zone.

Our industry is typically a leading indicator of business cycles; we

are among the first to benefit from improved conditions and among the first to

experience the consequences of a downturn. From our vantage point, we do not

foresee an upturn in business activity in the near future among our current

customer base. On a more positive note, our Company has a relatively scalable

SG&A expense structure enabling us to conform with business conditions and we

intend to continue to aggressively pursue new management talent, both of which

we believe will offset, in part, the effects of the economy on our bottom

line." Results for the first quarter of 2001 were also negatively affected by

an increase in workers' compensation expense, in terms of a percentage of

revenues, which increased from 3.0% of revenues in the first quarter of 2000

to 4.0% of revenues in 2001 due to higher estimates for the cost of claims.

The following summarizes the unaudited balance sheets at March 31, 2001

and December 31, 2000.

                      ($ in thousands)

March 31, December 31,

2001 2000


Current assets:

Cash and cash equivalents $318 $516

Trade accounts receivable, net 16,850 20,660

Prepaid expenses and other 2,099 1,222

Deferred tax assets 2,278 2,702

Total current assets 21,545 25,100

Intangibles, net 20,444 20,982

Property, equipment and software, net 6,778 7,177

Restricted marketable securities and workers'

compensation deposits 4,284 4,254

Unrestricted marketable securities 1,326 1,386

Deferred tax assets 1,048 839

Other assets 1,390 1,374

$56,815 $61,112

Liabilities and Stockholders' Equity

Current liabilities:

Current portion of long-term debt $ 2,713 $ 2,939

Line of credit payable 1,637 2,628

Accounts payable 619 1,013

Accrued payroll, payroll taxes and

related benefits 8,018 7,893

Workers' compensation claim and safety incentive

liabilities 4,848 5,274

Other accrued liabilities 420 1,622

Total current liabilities 18,255 21,369

Long-term debt, net of current portion 1,051 1,508

Customer deposits 534 614

Long-term workers' compensation liabilities 678 682

Other long-term liabilities 2,070 2,022

Stockholders' equity 34,227 34,917

$56,815 $61,112

On Thursday, May 3, 2001, at 8:00 a.m. (Pacific), William W. Sherertz will

host an investor telephone conference call to discuss first quarter 2001

operating results.

To participate in the call, please dial 800-399-3080 shortly before

8:00 a.m. (Pacific) on Thursday, May 3, 2001. If you are unable to

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

Thursday, May 3, 2001 at 12 noon (Pacific) and ending Thursday, May 10, 2001

at 12 noon (Pacific). To listen to the recording, please dial 800-642-1687

and enter conference identification code 102663.

Barrett Business Services, Inc. is a human resource management company

with offices in ten states serving customers throughout 22 states. For 2000,

Barrett reported revenues of $322.5 million and net income of $2.1 million.

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: //
Company News On-Call: http: // or fax, 800-758-5804, ext. 082187
CONTACT: William W. Sherertz, President and Chief Executive Officer, of Barrett Business Services, Inc., 503-220-0988