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Barrett Business Services, Inc. Announces Second Quarter 2001 Operating Results and Schedules Investor Conference Call

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PORTLAND, Ore., Aug. 1 /PRNewswire/ --

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

$184,000 for the second quarter ended June 30, 2001, a decline of

$978,000 from net income of $794,000 for the second quarter of 2000. Basic

and diluted net loss per share for the 2001 second quarter were $.03, as

compared to basic and diluted earnings of $.11 for the 2000 second quarter.

Revenues for the second quarter ended June 30, 2001 totaled $52.6 million,

a decrease of approximately $33.9 million or 39.2% from the $86.5 million for

the same quarter in 2000.

                                         (Unaudited)        (Unaudited)

Second Quarter Ended Six Months Ended

June 30, June 30,

Results of Operations 2001 2000 2001 2000

(in thousands, except per

share amounts)

Revenues:

Staffing services $29,949 $51,698 $61,221 $99,465

Professional employer

services 22,602 34,804 46,483 74,159

Total revenues 52,551 86,502 107,704 173,624

Cost of revenues:

Direct payroll costs 40,623 67,155 83,383 135,159

Payroll taxes and benefits 4,309 7,306 9,183 15,224

Workers' compensation 2,441 3,263 4,618 5,860

Total cost of revenues 47,373 77,724 97,184 156,243

Gross margin 5,178 8,778 10,520 17,381

Selling, general and

administrative expenses 4,652 6,464 9,528 12,949

Depreciation and amortization 822 822 1,651 1,553

(Loss) income from operations (296) 1,492 (659) 2,879

Other expense, net (15) (151) (8) (283)

(Loss) income before taxes (311) 1,341 (667) 2,596

(Benefit from) provision

for income taxes (127) 547 (272) 1,058

Net (loss) income $(184) $794 $(395) $1,538

Basic (loss) earnings

per share $(.03) $.11 $(.06) $.21

Weighted average basic

shares outstanding 6,252 7,416 6,326 7,438

Diluted (loss) earnings

per share $(.03) $.11 $(.06) $.21

Weighted average diluted

shares outstanding 6,252 7,459 6,326 7,484

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

that: "Our decline in revenues and operating results continue to reflect the

current downturn in economic conditions, which has affected most of our

customers. While these results are disappointing, we reduced second quarter

SG&A expenses by 28% compared to a year ago. In addition, we were cash flow

positive for the six months ended June 30, which is a significant

accomplishment, in view of a 38% decline in revenues. Our long-term debt to

equity ratio also compares quite favorably to other companies in our

industry."

Results for the second quarter of 2001 were also negatively affected by an

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

revenues, which increased from 3.8% of revenues in the second quarter of

2000 to 4.6% of revenues in 2001 due to higher estimates for the cost of

claims.

The following summarizes the unaudited balance sheets at June 30, 2001 and

December 31, 2000.

                                                       June 30, December 31,

($ in thousands) 2001 2000

Assets

Current assets:

Cash and cash equivalents $697 $516

Trade accounts receivable, net 15,903 20,660

Prepaid expenses and other 1,685 1,222

Deferred tax assets 2,386 2,702

Total current assets 20,671 25,100

Intangibles, net 19,909 20,982

Property, equipment and software, net 6,547 7,177

Restricted marketable securities and

workers' compensation deposits 4,174 4,254

Unrestricted marketable securities 1,311 1,386

Deferred tax assets 1,039 839

Other assets 1,321 1,374

$54,972 $61,112

Liabilities and Stockholders' Equity

Current liabilities:

Current portion of long-term debt $1,056 $2,939

Line of credit payable 2,824 2,628

Accounts payable 551 1,013

Accrued payroll, payroll taxes and

related benefits 7,756 7,893

Workers' compensation claim and safety

incentive liabilities 5,187 5,274

Other accrued liabilities 531 1,622

Total current liabilities 17,905 21,369

Long-term debt, net of current portion 372 1,508

Customer deposits 488 614

Long-term workers' compensation liabilities 674 682

Other long-term liabilities 2,045 2,022

Stockholders' equity 33,488 34,917

$54,972 $61,112

On Thursday, August 2, 2001, at 8:00 a.m. Pacific Time,

William W. Sherertz will host an investor telephone conference call to discuss

second quarter 2001 operating results. To participate in the call, dial

1-800-399-3080 shortly before 8:00 a.m. Pacific Time on Thursday,

August 2, 2001. A recording of the call will be available beginning Thursday,

August 2, 2001 at 12 noon and ending Thursday, August 9, 2001 at 12 noon. To

listen to the recording, dial 1-800-642-1687 and enter conference

identification code 1501408.

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.

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SOURCE Barrett Business Services, Inc.
Web site: http: //www.barrettbusiness.com
Company News On-Call: http: //www.prnewswire.com/comp/082187.html
CONTACT: William W. Sherertz, President and Chief Executive Officer of Barrett Business Services, Inc., +1-503-220-0988