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BBSI Announces Resolution of Balance Sheet Accounting Treatment

3/9/2005 Print Version

PORTLAND, Ore., March 9, 2005 /PRNewswire-FirstCall via COMTEX/ -- Barrett Business

Services, Inc. (Nasdaq: BBSI) reported today that management has completed its

analysis and determination as to the treatment of certain estimated

reimbursements due from its excess workers' compensation insurance carriers

and the corresponding estimated liabilities to claimants. On February 10,

2005, in connection with announcement of the Company's 2004 fourth quarter

operating results and preliminary balance sheets for December 31, 2004 and

2003, the Company stated that the balance sheet effect, if any, on long-term

assets and long-term liabilities related to this issue had not been

determined.

The Company retains certain levels of exposure with respect to its

self-insured workers' compensation program and purchases insurance coverage

from third-party insurers for exposures in excess of those levels. Until

December 31, 2004, the Company established accrued liabilities for workers'

compensation claims, both reported and incurred but not reported, within its

level of retention based on currently available information, as well as its

historical claims experience. During the year ended December 31, 2004, the

Company determined that it should present its accrued liabilities for workers'

compensation claims on a gross basis along with a corresponding receivable

from its insurers, as the Company is the primary obligor for payment of the

related insured claims. As a result of this revision in classification, the

Company has increased its accrued workers' compensation claims liabilities as

of December 31, 2004 by $4.4 million (of which $0.2 million is estimated to be

currently payable and the balance a long-term liability) and has also recorded

corresponding receivables for these insured claims from its prior excess

workers' compensation insurer, CNA Financial Corporation. In order to conform

the Company's prior financial statements for this revision in classification,

the Company has increased its accrued workers' compensation claims liabilities

as of December 31, 2003 by $4.2 million (of which $0.4 million was estimated

to be currently payable and the balance a long-term liability) and has

recorded corresponding receivables for these insured claims from its prior

excess workers' compensation insurer, CNA Financial Corporation. The Company

will continue its past practice of evaluating the financial capacity of its

insurers to assess the recoverability of the related insurer receivables.

The revision in classification had no impact on the Company's financial

condition, results of operations, cash flows or working capital.

The following summarizes the unaudited consolidated balance sheets at

December 31, 2004 and December 31, 2003.

(Unaudited)

December 31, December 31,

($ in thousands) 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

Workers' compensation receivables

for insured claims 213 393

Total current assets 46,300 29,813

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

Workers' compensation receivables

for insured claims 4,158 3,768

$79,985 $58,834

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

Workers' compensation claims

liabilities for insured claims 213 393

Safety incentives liabilities 4,807 2,007

Other accrued liabilities 414 361

Total current liabilities 29,149 21,343

Long-term debt, net of current

portion 1,441 400

Customer deposits 608 455

Long-term workers' compensation

claims liabilities 4,840 1,031

Long-term workers' compensation

liabilities for insured claims 4,158 3,768

Other long-term liabilities -- 45

Deferred gain on sale and

leaseback 1,036 1,158

Stockholders' equity 38,753 30,634

$79,985 $58,834

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 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



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