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Barrett Business Services, Inc. Announces Net Income for Fourth Quarter 1997 and Additions of New Officer And Director

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PORTLAND, Ore., Feb. 11 /PRNewswire/ -- Barrett Business Services, Inc.

(Nasdaq: BBSI) reported today net income of $794,000 for the fourth quarter

ended December 31, 1997, a decrease of $450,000 or 36.2% from the fourth

quarter of 1996. Basic earnings per share for the 1997 fourth quarter were

$.12, compared to $.18 for the same quarter a year ago. Net income for the

year ended December 31, 1997 amounted to $3,825,000, a decrease of 24.0% from

1996. Basic earnings per share for 1997 were $.57, compared to basic earnings

per share of $.75 for 1996.

Revenues for the fourth quarter ended December 31, 1997 totaled

$69.9 million, an increase of approximately $10.1 million or 16.9% over the

$59.8 million for the same quarter a year ago. The internal growth rate for

1997 fourth quarter revenues was 15.1%. Revenues for the year ended December

31, 1997 were $281.0 million, an increase of $67.1 million or 31.4% over 1996.

The 1997 internal growth rate for revenues was 22.1%.

    Results of Operations              Fourth Quarter

(in thousands, except Ended Year Ended

per share amounts) December 31, December 31,

1997 1996 1997 1996

Revenues:

Staffing services $ 38,793 $ 30,830 $155,192 $112,778

Professional employer services 31,104 28,984 125,814 101,148

Total revenues 69,897 59,814 281,006 213,926

Cost of revenues:

Direct payroll costs 54,690 46,125 218,249 163,448

Payroll taxes and benefits 5,779 5,009 24,996 18,755

Workers' compensation 2,081 1,794 8,146 5,938

Safety incentives 341 390 1,509 1,532

Total cost of revenues 62,891 53,318 252,900 189,673

Gross margin 7,006 6,496 28,106 24,253

Selling, general and

administrative expenses 5,443 4,363 20,887 16,034

Amortization of intangibles 349 244 1,292 820

Income from operations 1,214 1,889 5,927 7,399

Other income 57 133 201 452

Income before taxes 1,271 2,022 6,128 7,851

Provision for income taxes 477 778 2,303 2,815

Net income $ 794 $ 1,244 $ 3,825 $ 5,036

Basic earnings per share $ .12 $ .18 $ .57 $ .75

Weighted average basic shares 6,739 6,784 6,751 6,714

Diluted earnings per share $ .12 $ .18 $ .56 $ .73

Weighted average

diluted shares 6,812 6,957 6,885 6,935

Certain prior year revenue and cost of revenue amounts have been

reclassified to conform with the 1997 presentation. Such reclassifications

had no impact on gross margin, net income or stockholders' equity.

The following summarizes the audited balance sheets at December 31, 1997

and 1996:

    ($ in thousands)                                      December 31

1997 1996

Assets

Cash $ 3,380 $ 1,901

Receivables, net 19,366 19,057

Note receivable -- 324

Prepaids and other 1,080 914

Deferred tax asset 1,926 1,279

Total current assets 25,752 23,475

Intangibles, net 12,094 10,226

Property and equipment, net 4,263 3,111

Restricted marketable securities 6,095 5,707

Other 206 127

$48,410 $42,646

Liabilities and Stockholders' Equity

Current portion of long-term debt 323 36

Accounts payable 801 667

Accrued payroll and benefits 9,403 7,354

Accrued workers' compensation

claims 3,140 2,240

Customer safety incentives 1,073 1,015

Other accrued liabilities 399 606

Total current liabilities 15,139 11,918

Long-term debt, net 531 838

Customer deposits 934 890

Long-term workers' compensation

claims 632 613

Other long-term liabilities 1,030 --

Redeemable common stock -- 2,825

Stockholders' equity 30,144 25,562

$48,410 $42,646

The Company also announced today the recent addition of Herbert L.

Hochberg to the Board of Directors and the appointment of Gregory R. Vaughn as

Vice President.

The election of Mr. Hochberg expands the Board from six to seven

positions. Mr. Hochberg is a Managing Director of Corporate Finance at

Ladenburg Thalmann & Co. Inc. in New York. He has been associated with the

firm in a senior corporate finance capacity for over thirty years and is a

member of its Board of Directors.

Mr. Hochberg is a Chartered Financial Analyst and is qualified as a

Supervisory Analyst by the New York Stock Exchange. Mr. Hochberg has a

Bachelor of Science Degree from the Massachusetts Institute of Technology and

a Masters Degree in Business Administration from the Harvard Graduate School

of Business Administration.

Mr. Vaughn joined the Company in July 1997 as Operations Manager. Prior

to joining Barrett, Mr. Vaughn was Chief Executive Officer of Insource

America, a privately-held human resource management company headquartered in

Portland, Oregon with annual revenues of approximately $60 million. Mr.

Vaughn has also held senior management positions with Sundial Time Systems and

Continental Information Systems. He was also affiliated with Price Waterhouse

for five years in the management consulting services practice. Mr. Vaughn is

a Certified Data Processing Professional and holds a Master of Business

Administration Degree in operations management and human resources and a

Bachelor of Science Degree in computer science and statistics from the State

University of New York at Buffalo.

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

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

Maryland and Delaware.
SOURCE Barrett Business Services, Inc.
CONTACT: William W. Sherertz, President and Chief Executive Officer of Barrett Business Services, Inc., 503-220-0988

CNOC: http: //www.prnewswire.com or fax, 800-758-5804, ext. 082187