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Barrett Business Services, Inc. Announces Net Income and Revenues For Third Quarter 1997

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PORTLAND, Ore., Nov. 3 /PRNewswire/ -- Barrett Business Services, Inc.

(Nasdaq: BBSI) reported today net income of $947,000 for the third quarter

ended September 30, 1997. Earnings per share for the 1997 third quarter were

$.14, as compared to $.24 for the 1996 third quarter. Net income for the nine

months ended September 30, 1997 amounted to $3,031,000. Earnings per share

for the 1997 nine-month period were $.45, as compared to $.55 for the 1996

period.

Revenues for the third quarter ended September 30, 1997 totaled

$81.2 million, an increase of approximately $21.0 million or 34.8% over the

$60.3 million reported for the same quarter a year ago. Revenues for the nine

months ended September 30, 1997 were $214.4 million, an increase of 38.1% over

the comparable 1996 period. The internal growth rates of revenues were

27.0% for the 1997 third quarter and 25.8% for the nine-month period ended

September 30, 1997.

                                   (Unaudited)                (Unaudited)

Third Quarter Nine Months

Ended Ended

September 30, September 30,

Results of Operations 1997 1996 1997 1996

(in thousands, except

per share amounts)

Revenues:

Staffing services $47,271 $32,612 $118,405 $82,332

Professional employer

services 33,934 27,640 96,035 72,976

Total revenues 81,205 60,252 214,440 155,308

Cost of revenues:

Direct payroll costs 62,997 45,817 165,200 117,695

Payroll taxes and

benefits 7,654 5,248 20,907 14,570

Workers' compensation 2,237 2,161 6,065 4,144

Safety incentives 464 433 1,168 1,142

Total cost of

revenues 73,352 53,659 193,340 137,551

Gross margin 7,853 6,593 21,100 17,757

Selling, general and

administrative

expenses 6,072 4,104 15,444 11,671

Amortization of

intangibles 351 207 943 576

Income from operations 1,430 2,282 4,713 5,510

Other income 22 109 144 318

Income before taxes 1,452 2,391 4,857 5,828

Provision for income

taxes 505 730 1,826 2,036

Net income $947 $1,661 $3,031 $3,792

Primary earnings per

share $.14 $.24 $.45 $.55

Primary weighted average

number of common stock

equivalent shares

outstanding 6,727 7,019 6,754 6,928

The decline in net income for the third quarter of 1997 compared to the

same period a year ago was primarily attributable to higher direct payroll

costs as a percentage of revenues, increased bad debt expense and higher

branch office operating expenses.

The following summarizes the unaudited balance sheets at September 30,

1997 and December 31, 1996:

    ($ in thousands)                           September 30,      December 31,

1997 1996

Assets

Cash $1,754 $1,901

Receivables, net 24,376 19,057

Note receivable -- 324

Prepaids and other 1,205 914

Deferred tax asset 1,708 1,279

Total current assets 29,043 23,475

Intangibles, net 12,434 10,226

Property and equipment, net 4,035 3,111

Restricted marketable securities 6,077 5,707

Other 139 127

$51,728 $42,646

Liabilities and Stockholders' Equity

Advances on credit line $1,614 $ --

Current portion of long-term debt 62 36

Accounts payable 1,229 667

Accrued payroll and benefits 11,808 7,354

Accrued workers' compensation

claims 2,750 2,240

Customer safety incentives 1,143 1,015

Other accrued liabilities 383 606

Total current liabilities 18,989 11,918

Long-term debt, net 810 838

Customer deposits 951 890

Long-term workers' compensation

claims 606 613

Other long-term liabilities 1,022 --

Redeemable common stock -- 2,825

Stockholders' equity 29,350 25,562

$51,728 $42,646

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

with offices in Washington, Oregon, Idaho, California, Arizona, Michigan,

Maryland and Delaware. Barrett reported revenues of $215.8 million and net

income of $5.0 million for 1996.
SOURCE Barrett Business Services Inc.
CONTACT: Michael D. Mulholland, Vice President-Finance of Barrett Business Services, Inc, 503-220-0988