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Barrett Business Services, Inc. Announces Second Quarter 2002 Operating Results and Schedules Investor Conference Call

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PORTLAND, Ore., July 31 /PRNewswire-FirstCall/ -- Barrett Business

Services, Inc. (Nasdaq: BBSI) reported today net income of $1,000 for the

second quarter ended June 30, 2002, an improvement of $185,000 from a net loss

of $184,000 for the second quarter of 2001 and a $418,000 improvement over the

first quarter of 2002. Cash flow per share (defined as net income (loss) plus

depreciation and amortization divided by weighted average diluted shares

outstanding) for the 2002 second quarter totaled a positive $.05, as compared

to a positive $.10 for the same quarter a year ago.

Revenues for the second quarter ended June 30, 2002 totaled $42.8 million,

a decrease of approximately $9.8 million or 18.5% from the $52.6 million for

the same quarter in 2001. Revenues for the second quarter of 2002 increased

$1.8 million or 4.4% over the $41.0 million for the first quarter of 2002.

                                     (Unaudited)             (Unaudited)

Second Quarter Ended Six Months Ended

June 30, June 30,

Results of Operations 2002 2001 2002 2001

(in thousands, except per share amounts)

Revenues:

Staffing services $24,684 $29,949 $47,254 $ 61,221

Professional employer

services 18,164 22,602 36,559 46,483

Total revenues 42,848 52,551 83,813 107,704

Cost of revenues:

Direct payroll costs 33,257 40,623 65,118 83,383

Payroll taxes and benefits 3,520 4,309 7,212 9,183

Workers' compensation 1,719 2,441 3,344 4,618

Total cost of revenues 38,496 47,373 75,674 97,184

Gross margin 4,352 5,178 8,139 10,520

Selling, general and

administrative expenses 4,072 4,652 8,271 9,528

Depreciation and amortization 288 822 600 1,651

Loss from operations (8) (296) (732) (659)

Other income (expense), net 9 (15) 20 (8)

Income (loss) before taxes 1 (311) (712) (667)

Benefit from income taxes -- (127) (296) (272)

Net income (loss) $1 $(184) $(416) $(395)

Basic income (loss) per share $-- $(.03) $(.07) $(.06)

Weighted average basic

shares outstanding 5,806 6,252 5,814 6,326

Diluted income (loss)

per share $-- $(.03) $(.07) $(.06)

Weighted average diluted

shares outstanding 5,826 6,252 5,814 6,326

Cash flow per share $.05 $.10 $.03 $.20

As a result of the Company's adoption of Statement of Financial Accounting

Standard No. 142 - Goodwill and Other Intangible Assets as of January 1, 2002,

the Company has ceased the amortization of goodwill. Operating results for

the second quarter and the first six months of 2001 included $444,000 and

$882,000 of goodwill amortization, respectively.

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

that: "We are guardedly optimistic about the significance of the sequential

growth in quarterly revenues, as compared to the first quarter and we are very

pleased with a positive EBITDA of $340,000 for the second quarter of 2002,

which represents a $695,000 improvement over the first quarter of 2002. We

expect cash flow to continue to improve and we are confident that a new

bank-credit facility will be in place in the near future."

The following summarizes the unaudited balance sheets at June 30, 2002 and

December 31, 2001.

                         ($ in thousands)

June 30, December 31,

2002 2001

Assets

Current assets:

Cash and cash equivalents $580 $1,142

Trade accounts receivable, net 13,274 13,760

Prepaid expenses and other 1,347 1,022

Deferred tax assets 3,225 2,841

Total current assets 18,426 18,765

Intangibles, net 18,832 18,878

Property, equipment and software, net 5,583 6,084

Restricted marketable securities

and workers' compensation deposits 5,086 5,425

Deferred tax assets 1,694 2,268

Other assets 1,067 1,146

$50,688 $52,566

Liabilities and Stockholders' Equity

Current liabilities:

Current portion of long-term debt $139 $708

Line of credit payable 3,609 3,424

Accounts payable 846 686

Accrued payroll, payroll taxes

and related benefits 5,981 5,165

Workers' compensation claim and

safety incentive liabilities 3,851 5,735

Other accrued liabilities 711 389

Total current liabilities 15,137 16,107

Long-term debt, net of current portion 808 922

Customer deposits 451 520

Long-term workers' compensation

liabilities 3,505 3,515

Other long-term liabilities 886 968

Stockholders' equity 29,901 30,534

$50,688 $52,566

On Thursday, August 1, 2002, at 2:00 p.m. Pacific Time, William W.

Sherertz will host an investor telephone conference call to discuss second

quarter 2002 operating results. To participate in the call, dial 800-399-3080

shortly before 2:00 p.m. Pacific Time on August 1, 2002. A recording of the

call will be available beginning August 1, 2002 at 5:00 p.m. and ending August

8, 2002 at 12 midnight. To listen to the recording, dial 800-642-1687 and

enter conference identification code 5138792.

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

with offices in eight 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, future workers' compensation

claims experience, collectibility of accounts receivable, and availability of

funding for working capital purposes, 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
CONTACT: William W. Sherertz, President and Chief Executive Officer of Barrett Business Services, Inc., +1-503-220-0988