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

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PORTLAND, Ore., Feb. 6 /PRNewswire-FirstCall/ --

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

$432,000 for the fourth quarter ended December 31, 2001, as compared to net

income of $63,000 for the fourth quarter of 2000. The net loss for the 2001

fourth quarter included a $600,000 pre-tax charge for anticipated future

increases in the cost of existing workers' compensation claims, as recommended

by the Company's external actuaries and independent accountants. Basic and

diluted net loss per share for the 2001 fourth quarter were $.07, as compared

to basic and diluted earnings per share of $.01 for the 2000 fourth quarter.

Cash flow per share (defined as net (loss) income plus depreciation and

amortization divided by weighted average diluted shares outstanding) for the

2001 fourth quarter totaled a positive $.06, as compared to a positive

$.13 for the same quarter a year ago. Net loss for the year ended

December 31, 2001 amounted to $585,000. Basic and diluted net loss per share

for 2001 were $.09. Cash flow per share for 2001 was a positive $.43 as

compared to a positive $.73 for 2000.

Revenues for the fourth quarter ended December 31, 2001 totaled

$50.7 million, a decrease of $17.4 million or 25.6% from the $68.1 million for

the same quarter in 2000. Revenues for 2001 totaled $216.7 million, a decline

of $105.8 million or 32.8% from 2000.

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

that: "2001 and particularly the fourth quarter were difficult from a

workers' compensation expense standpoint. Internally, we are very focused on

reducing the operational issues which have contributed to these trends. We

take pride in effectively managing this dynamic operating cost for the benefit

of all our customers. In spite of a tough economic climate, we are pleased

that we have continued to balance SG&A expenses with our revenues and gross

margin, so as to continue to generate relatively strong cash flow from

operations. In response to our ongoing challenge to maintain revenues,

especially in Northern California and Portland, we have added talented new

management in these regions."

                                     (Unaudited)              (Unaudited)

Fourth Quarter Ended Year Ended

December 31, December 31,

Results of Operations 2001 2000 2001 2000

(in thousands, except per share amounts)

Revenues:

Staffing services $28,351 $39,154 $123,110 $188,500

Professional employer

services 22,326 28,944 93,553 133,966

Total revenues 50,677 68,098 216,663 322,466

Cost of revenues:

Direct payroll costs 39,368 52,991 168,022 251,015

Payroll taxes and benefits 3,841 5,219 17,635 27,007

Workers' compensation 3,077 3,378 10,121 12,639

Total cost of revenues 46,286 61,588 195,778 290,661

Gross margin 4,391 6,510 20,885 31,805

Selling, general and

administrative expenses 4,318 5,506 18,587 24,583

Depreciation and amortization 808 819 3,277 3,192

(Loss) income from operations (735) 185 (979) 4,030

Other income (expense), net 6 (78) (17) (483)

(Loss) income before taxes (729) 107 (996) 3,547

(Benefit from) provision

for income taxes (297) 44 (411) 1,446

Net (loss) income $(432) $63 $(585) $2,101

Basic (loss) earnings

per share $(.07) $.01 $(.09) $.29

Weighted average basic

shares outstanding 5,969 6,838 6,193 7,237

Diluted (loss) earnings

per share $(.07) $.01 $(.09) $.29

Weighted average diluted

shares outstanding 5,969 6,864 6,193 7,277

Cash flow per share $.06 $.13 $.43 $.73

The following summarizes the unaudited balance sheets at

December 31, 2001 and December 31, 2000.

December 31,

($ in thousands) 2001 2000

Assets

Current assets:

Cash and cash equivalents $1,142 $516

Trade accounts receivable, net 13,910 20,660

Prepaid expenses and other 1,316 1,222

Deferred tax assets 2,515 2,702

Total current assets 18,883 25,100

Intangibles, net 18,878 20,982

Property, equipment and software, net 6,084 7,177

Restricted marketable securities and workers'

compensation deposits 4,139 4,254

Unrestricted marketable securities 1,286 1,386

Deferred tax assets 1,156 839

Other assets 1,385 1,374

$51,811 $61,112

Liabilities and Stockholders' Equity

Current liabilities:

Current portion of long-term debt $508 $ 2,939

Line of credit payable 3,424 2,628

Accounts payable 686 1,013

Accrued payroll, payroll taxes and

related benefits 5,539 7,893

Workers' compensation claim and safety

incentive liabilities 5,735 5,274

Other accrued liabilities 319 1,622

Total current liabilities 16,211 21,369

Long-term debt, net of current portion 347 1,508

Customer deposits 520 614

Long-term workers' compensation liabilities 665 682

Other long-term liabilities 2,071 2,022

Stockholders' equity 31,997 34,917

$51,811 $61,112

On Friday, February 8, 2002, at 9:00 a.m. Pacific Time,

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

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

800-399-3080 shortly before 9:00 a.m. Pacific Time on February 8, 2002. A

recording of the call will be available beginning Friday, February 8, 2002 at

12 noon and ending Friday, February 15, 2002 at 12 noon. To listen to the

recording, dial 800-642-1687 and enter conference identification code 3201527.

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

with offices in ten states which serve customers in approximately 15 states.

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