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Barrett Business Services, Inc. Announces Third Quarter 2001 Operating Results, Schedules Investor Conference Call And Increases Authorization for Stock Repurchase Program

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PORTLAND, Ore., Oct. 31 /PRNewswire/ --

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

$242,000 for the third quarter ended September 30, 2001, an increase of

$426,000 over the net loss of $184,000 for the second quarter ended

June 30, 2001. For the third quarter of 2000, the Company reported net income

of $500,000. Basic and diluted net earnings per share for the 2001 third

quarter were $.04, as compared to a net loss per share of $.03 for the second

quarter ended June 30, 2001. For the 2000 third quarter, basic and diluted

earnings per share were $.07.

Revenues for the third quarter ended September 30, 2001 totaled $58.3

million, an increase of $5.7 million or 10.9% over the second quarter ended

June 30, 2001. Revenues for the 2001 third quarter declined approximately

$22.4 million or 27.8% from the $80.7 million for the same quarter in 2000.

                                  (Unaudited)              (Unaudited)

Third Quarter Ended Nine Months Ended

September 30, September 30,

Results of Operations 2001 2000 2001 2000

(in thousands, except per

share amounts)

Revenues:

Staffing services $33,538 $49,881 $94,759 $149,346

Professional employer

services 24,744 30,863 71,227 105,022

Total revenues 58,282 80,744 165,986 254,368

Cost of revenues:

Direct payroll costs 45,271 62,865 128,654 198,024

Payroll taxes and

benefits 4,611 6,564 13,794 21,788

Workers' compensation 2,426 3,401 7,044 9,261

Total cost of revenues 52,308 72,830 149,492 229,073

Gross margin 5,974 7,914 16,494 25,295

Selling, general and

administrative expenses 4,741 6,128 14,269 19,077

Depreciation and

amortization 818 820 2,469 2,373

Income (loss) from

operations 415 966 (244) 3,845

Other expense, net (15) (122) (23) (405)

Income (loss) before

taxes 400 844 (267) 3,440

Provision for (benefit from)

income taxes 158 344 (114) 1,402

Net income (loss) $242 $500 $(153) $2,038

Basic earnings (loss)

per share $.04 $.07 $(.02) $.28

Weighted average basic

shares outstanding 6,152 7,236 6,268 7,371

Diluted earnings (loss)

per share $.04 $.07 $(.02) $.27

Weighted average diluted

shares outstanding 6,180 7,276 6,268 7,415

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

that: "While our comparative operating results were down as compared to last

year, we are pleased that we have returned to profitability after reporting

losses in the first two quarters of this year. Although there is much

uncertainty in the marketplace, we have a strong balance sheet and continue to

generate positive cash flow in spite of lower revenues."

The following summarizes the unaudited balance sheets at

September 30, 2001 and December 31, 2000.

                                                  September 30, December 31,

($ in thousands) 2001 2000

Assets

Current assets:

Cash and cash equivalents $784 $516

Trade accounts receivable, net 17,771 20,660

Prepaid expenses and other 1,312 1,222

Deferred tax assets 2,511 2,702

Total current assets 22,378 25,100

Intangibles, net 19,374 20,982

Property, equipment and software, net 6,335 7,177

Restricted marketable securities and

workers' compensation deposits 4,142 4,254

Unrestricted marketable securities 1,286 1,386

Deferred tax assets 1,110 839

Other assets 1,418 1,374

$56,043 $61,112

Liabilities and Stockholders' Equity

Current liabilities:

Current portion of long-term debt $873 $ 2,939

Line of credit payable 3,615 2,628

Accounts payable 774 1,013

Accrued payroll, payroll taxes and related

benefits 8,208 7,893

Workers' compensation claim and safety

incentive liabilities 5,080 5,274

Other accrued liabilities 496 1,622

Total current liabilities 19,046 21,369

Long-term debt, net of current portion 360 1,508

Customer deposits 531 614

Long-term workers' compensation liabilities 669 682

Other long-term liabilities 2,158 2,022

Stockholders' equity 33,279 34,917

$56,043 $61,112

On Thursday, November 1, 2001, at 8:00 a.m. Pacific Time, William W.

Sherertz will host an investor telephone conference call to discuss third

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

800-399-3080 shortly before 8:00 a.m. Pacific Time on November 1, 2001. A

recording of the call will be available beginning Thursday, November 1, 2001

at 12 noon and ending Thursday, November 8, 2001 at 12 noon. To listen to the

recording, dial 800-642-1687 and enter conference identification code 2245128.

The Company also announced that its board of directors had recently

increased the authorization under the Company's stock repurchase program by

$1.0 million. Mr. Sherertz stated that: "This increase indicates that our

board continues to believe that the Company's stock is a sound investment

opportunity at current market values."

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, +1-503-220-0988