English Spanish

News

BBSI Announces Fourth Quarter 2004 Operating Results and Financial Guidance For 1Q05

2/10/2005 Print Version

PORTLAND, Ore., Feb 10, 2005 /PRNewswire-FirstCall via COMTEX/ -- Barrett Business

Services, Inc. (Nasdaq: BBSI) reported today net income of $2,477,000 for the

fourth quarter ended December 31, 2004, an improvement of $1,159,000 over net

income of $1,318,000 for the fourth quarter of 2003. Diluted earnings per

share for the 2004 fourth quarter were $.40, as compared to diluted earnings

per share of $.22 for the same quarter a year ago. For 2004, diluted earnings

per share were $1.19, as compared to $.35 for 2003.

Net revenues for the fourth quarter ended December 31, 2004 totaled $52.0

million, an increase of approximately $15.4 million or 42.1% over the $36.6

million for the same quarter in 2003. For 2004, net revenues were $195

million, an increase of 58.9% over 2003.

(Unaudited)          (Unaudited)

Fourth Quarter Ended Year Ended

December 31, December 31,

Results of Operations 2004 2003 2004 2003

(in thousands, except per

share amounts)

Revenues:

Staffing services $ 32,317 $ 23,661 $ 123,514 $ 93,544

Professional employer

service fees 19,651 12,988 71,447 29,177

Total revenues 51,968 36,649 194,961 122,721

Cost of revenues:

Direct payroll costs 23,883 17,482 91,190 69,099

Payroll taxes and benefits 11,988 8,545 45,544 22,916

Workers' compensation 5,783 3,680 21,557 9,709

Total cost of revenues 41,654 29,707 158,291 101,724

Gross margin 10,314 6,942 36,670 20,997

Selling, general and

administrative expenses 6,207 4,884 23,844 16,810

Depreciation and

amortization 256 251 1,008 1,058

Income from operations 3,851 1,807 11,818 3,129

Other income

(expense), net 300 (18) 432 (154)

Income before taxes 4,151 1,789 12,250 2,975

Provision for income

taxes 1,674 471 4,879 890

Net income $2,477 $1,318 $7,371 $2,085

Basic earnings per share $.43 $.23 $1.29 $.36

Weighted average basic

shares outstanding 5,741 5,660 5,725 5,690

Diluted earnings

per share $.40 $.22 $1.19 $.35

Weighted average diluted

shares outstanding 6,192 6,088 6,193 5,876

The Company changed its reporting of PEO revenues from a gross basis to a

net basis in 2002. The gross revenues and cost of revenues information below,

although not in accordance with generally accepted accounting principles

("GAAP"), is presented for comparison purposes and because management believes

such information is more informative as to the level of the Company's business

activity and more useful in managing its operations.

(Unaudited)             (Unaudited)

Fourth Quarter Ended Year Ended

($ in thousands) December 31, December 31,

2004 2003 2004 2003

Revenues:

Staffing services $ 32,317 $ 23,661 $ 123,514 $ 93,544

Professional employer

services 119,871 77,366 419,010 173,134

Total revenues 152,188 101,027 542,524 266,678

Cost of revenues:

Direct payroll costs 122,697 80,510 434,034 211,102

Payroll taxes and

benefits 11,988 8,545 45,544 22,916

Workers' compensation 7,189 5,030 26,276 11,663

Total cost of

revenues 141,874 94,085 505,854 245,681

Gross margin $ 10,314 $6,942 $ 36,670 $ 20,997

Gross revenues of $152.2 million for the 2004 fourth quarter rose 50.6%

over the comparable 2003 period. For 2004, gross revenues of $542.5 million

increased 103.4% over 2003.

A reconciliation of non-GAAP gross revenues to net revenues is as follows:

For the fourth quarters ended December 31, 2004 and 2003 (in thousands):

Gross Revenue

Reporting Method Reclassification

2004 2003 2004 2003

Revenues:

Staffing services $ 32,317 $ 23,661 $ -- $ --

Professional

employer services 119,871 77,366 (100,220) (64,378)

Total revenues $152,188 $101,027 $(100,220) $(64,378)

Cost of revenues: $141,874 $ 94,085 $(100,220) $(64,378)

Net Revenue

Reporting Method

Revenues: 2004 2003

Staffing services $ 32,317 $ 23,661

Professional

employer services 19,651 12,988

Total revenues $ 51,968 $ 36,649

Cost of revenues: $ 41,654 $ 29,707

For the years ended December 31, 2004 and 2003 (in thousands):

Gross Revenue

Reporting Method Reclassification

2004 2003 2004 2003

Revenues:

Staffing services $ 123,514 $ 93,544 $ -- $ --

Professional

employer services 419,010 173,134 (347,563) (143,957)

Total revenues $542,524 $266,678 $(347,563) $(143,957)

Cost of revenues: $505,854 $245,681 $(347,563) $(143,957)

Net Revenue

Reporting Method

2004 2003

Revenues:

Staffing services $ 123,514 $ 93,544

Professional

employer services 71,447 29,177

Total revenues $ 194,961 $ 122,721

Cost of revenues: $ 158,291 $ 101,724

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

that: "We are very pleased with another quarter of strong earnings and

revenues, both of which results in 2004 being a record year. The continuing

expansion of our PEO and staffing services with a high quality customer base

bodes well for an even stronger year in 2005."

The following summarizes the unaudited consolidated balance sheets at

December 31, 2004 and December 31, 2003. Please note that the Company is

currently analyzing, but no determination has been made as to the effect, if

any, on long-term assets and long-term liabilities related to an accounting

principle under which the Company would gross up its balance sheet to include

(1) estimated future receivables from the Company's excess workers'

compensation insurance carriers for the estimated future reimbursements to the

Company relating to claims that such insurers are obligated to pay pursuant to

insurance policies in effect at the time of the insured losses and (2)

identical estimated future liabilities for payments to claimants relating to

such insured losses.

(Unaudited)

($ in thousands) December 31, December 31,

2004 2003

Assets

Current assets:

Cash and cash equivalents $12,153 $ 7,785

Marketable securities 4,630 --

Trade accounts receivable, net 23,840 18,481

Prepaid expenses and other 1,364 958

Deferred income taxes 4,100 2,196

Total current assets 46,087 29,420

Goodwill, net 22,516 18,749

Intangibles, net 25 13

Property, equipment and software, net 4,301 3,367

Restricted marketable securities

and workers' compensation deposits 1,702 1,647

Deferred income taxes 582 1,041

Other assets 401 436

$75,614 $54,673

Liabilities and Stockholders' Equity

Current liabilities:

Current portion of long-term debt $348 $88

Accounts payable 994 727

Accrued payroll, payroll taxes

and related benefits 17,427 13,881

Workers' compensation claims liabilities 4,946 3,886

Safety incentives liabilities 4,807 2,007

Other accrued liabilities 414 361

Total current liabilities 28,936 20,950

Long-term debt, net of current portion 1,441 400

Customer deposits 608 455

Long-term workers' compensation claims

liabilities 4,840 1,031

Other long-term liabilities -- 45

Deferred gain on sale and leaseback 1,036 1,158

Stockholders' equity 38,753 30,634

$75,614 $54,673

Outlook for First Quarter 2005

The Company also disclosed today limited financial guidance with respect

to its operating results for the first quarter ending March 31, 2005. The

Company expects gross revenues for the first quarter of 2005 to range from

$152 million to $154 million, an increase of approximately 30% over the first

quarter of 2004, and anticipates diluted earnings per share for the first

quarter of 2005 to range from $.13 to $.14 per share, an increase of 30% to

40% over the same period a year ago. A reconciliation of estimated gross

revenues to estimated GAAP net revenues for the first quarter of 2005 is not

included because PEO revenues and cost of PEO revenues for the period are not

reasonably estimable.

On February 11, 2005 at 9:00 a.m. Pacific Time, William W. Sherertz and

Michael D. Mulholland will host an investor telephone conference call to

discuss fourth quarter 2004 operating results. To participate in the call,

select Webcast. A replay of the call will be available beginning February 11,

2005 at 11:00 a.m. and ending February 18, 2005. To listen to the recording,

dial 800-642-1687 and enter conference identification code 3986981.

BBSI provides human resource management solutions to large and small

companies throughout many regions of the United States.

Statements in this release about future events or performance, including

earnings expectations for the first quarter of 2005, 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, the effect of changes in the workers' compensation regulatory

environment in one or more of our primary markets, collectibility of accounts

receivable, and availability of funding for working capital purposes, among

others. Other important factors that may affect the Company's future

prospects are described in the Company's 2003 Annual Report on Form 10-K.

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. The Company undertakes no

obligation to update or revise forward-looking statements in this release to

reflect events or changes in circumstances that occur after the date of this

release.

SOURCE Barrett Business Services, Inc.



William W. Sherertz, President and Chief Executive Officer of Barrett Business

Services, Inc., +1-503-220-0988



http://www.prnewswire.com