BBSI Announces First Quarter 2008 Operating Results, Financial Guidance for 2Q08 and Conference Call
VANCOUVER, Wash., April 23, 2008 (PRIME NEWSWIRE) -- Barrett Business Services, Inc. (Nasdaq:BBSI) reported today net income of $91,000 for the first quarter ended March 31, 2008, a decline of $1.6 million or 94.7% from net income of $1.7 million for the first quarter of 2007. Diluted earnings per share for the 2008 first quarter were $.01, as compared to diluted earnings per share of $.15 for the same quarter a year ago.
Net revenues for the first quarter ended March 31, 2008 totaled $66.2 million, an increase of approximately $5.6 million or 9.3% over the $60.6 million for the same quarter in 2007.
(Unaudited)
First Quarter Ended
($ in thousands, except per share amounts) March 31,
--------------------
Results of Operations 2008 2007
-------------------------------------------- --------- ---------
Revenues:
Staffing services $ 35,819 $ 28,015
Professional employer service fees 30,375 32,573
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Total revenues 66,194 60,588
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Cost of revenues:
Direct payroll costs 26,383 21,142
Payroll taxes and benefits 24,445 23,911
Workers' compensation 6,804 5,844
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Total cost of revenues 57,632 50,897
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Gross margin 8,562 9,691
Selling, general and administrative expenses 8,669 7,388
Depreciation and amortization 376 349
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Income from operations (483) 1,954
Other income, net 626 785
--------- ---------
Income before taxes 143 2,739
Provision for income taxes 52 1,011
--------- ---------
Net income $ 91 $ 1,728
========= =========
Basic earnings per share $ .01 $ .15
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Weighted average basic shares outstanding 11,087 11,255
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Diluted earnings per share $ .01 $ .15
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Weighted average diluted shares outstanding 11,423 11,681
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The Company reports its Professional Employer Organization services ("PEO") revenues on a net basis because it is not the primary obligor for the services provided by the Company's PEO clients to their customers. 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)
First Quarter
(in thousands) March 31,
---------------------
2008 2007
--------- ---------
Revenues:
Staffing services $ 35,819 $ 28,015
Professional employer services 223,761 229,513
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Total revenues 259,580 257,528
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Cost of revenues:
Direct payroll costs 217,853 216,628
Payroll taxes and benefits 24,445 23,911
Workers' compensation 8,720 7,298
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Total cost of revenues 251,018 247,837
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Gross margin $ 8,562 $ 9,691
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Gross revenues of $259.6 million for the first quarter ended March 31, 2008 rose 0.8% over the similar period in 2007.
A reconciliation of non-GAAP gross revenues to net revenues is as follows:
For the first quarters ended March 31, 2008 and 2007:
(Unaudited)
Three Months Ended March 31,
---------------------------------------------------------
(in Gross Revenue Net Revenue
thousands) Reporting Method Reclassification Reporting Method
------------------- ------------------- ---------------
2008 2007 2008 2007 2008 2007
--------- --------- --------- --------- ------- -------
Revenues:
Staffing
services $ 35,819 $ 28,015 $ -- $ -- $35,819 $28,015
Profes-
sional
employer
services 223,761 229,513 (193,386) (196,940) 30,375 32,573
--------- --------- --------- --------- ------- -------
Total
revenues $ 259,580 $ 257,528 $(193,386) $(196,940) $66,194 $60,588
========= ========= ========= ========= ======= =======
Cost of
revenues $ 251,018 $ 247,837 $(193,386) $(196,940) $57,632 $50,897
========= ========= ========= ========= ======= =======
The following summarizes the unaudited consolidated balance sheets at March 31, 2008 and December 31, 2007.
March 31, December 31,
(in thousands) 2008 2007
--------- ---------
Assets
------
Current assets:
Cash and cash equivalents $ 54,906 $ 62,779
Marketable securities 1,458 1,717
Trade accounts receivable, net 41,204 36,673
Prepaid expenses and other 3,816 2,336
Deferred income taxes 3,249 3,138
Workers' compensation receivables for insured
claims 225 225
--------- ---------
Total current assets 104,858 106,868
Marketable securities 419 417
Goodwill, net 45,435 41,508
Property, equipment and software, net 15,934 16,136
Restricted marketable securities and workers'
compensation deposits 3,198 2,750
Other assets 1,547 1,649
Workers' compensation receivables for insured
claims 3,570 3,896
--------- ---------
$ 174,961 $ 173,224
========= =========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Accounts payable $ 929 $ 1,516
Accrued payroll, payroll taxes and related
benefits 38,716 33,553
Other accrued liabilities 647 1,064
Workers' compensation claims liabilities 6,463 6,031
Workers' compensation claims liabilities for
insured claims 225 225
Safety incentives liabilities 5,637 5,911
--------- ---------
Total current liabilities 52,617 48,300
Customer deposits 724 752
Long-term workers' compensation claims
liabilities 4,013 4,021
Long-term workers' compensation liabilities
for insured claims 2,417 2,464
Deferred income taxes 3,269 3,268
Deferred gain on sale and leaseback 640 671
Stockholders' equity 111,281 113,748
--------- ---------
$ 174,961 $ 173,224
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Outlook for Second Quarter 2008
The Company also disclosed today limited financial guidance with respect to its operating results for the second quarter ending June 30, 2008. The Company expects gross revenues for the second quarter of 2008 to range from $262 million to $267 million, as compared to $267.7 million for the second quarter of 2007, and anticipates diluted earnings per share for the second quarter of 2008 to range from $.24 to $.28 per share, as compared to $.42 per share for the same period a year ago. A reconciliation of estimated gross revenues to estimated GAAP net revenues for the second quarter of 2008 is not included because PEO revenues and cost of PEO revenues for the period are not reasonably estimable.
Conference Call
On April 24 at 9:00 a.m. Pacific Time, William W. Sherertz and Michael D. Mulholland will host an investor telephone conference call to discuss first quarter 2008 operating results. To participate in the call, dial (877) 356-3717. The call identification number is 44463566. The conference call will also be webcast live at www.barrettbusiness.com. To access the webcast, click on the Investor Relations section of the Web site and select Webcast. A replay of the call will be available beginning Thursday, April 24, 2008 at 12:00 p.m. PT and ending on Thursday, May 1, 2008. To listen to the recording, dial (800) 642-1687 and enter conference identification code 44463566.
Statements in this release about future events or performance, including gross revenues and earnings expectations for the second quarter of 2008, 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, the Company's ability to successfully integrate acquired businesses with its existing operations, future workers' compensation claims experience, the effect of changes in the workers' compensation regulatory environment in one or more of its primary markets, the collectibility of accounts receivable and the effect of conditions in the global capital markets on the Company's investment portfolio, among others. Other important factors that may affect the Company's future prospects are described in the Company's 2007 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.
BBSI provides a comprehensive range of human resource management solutions to large and small companies throughout many regions of the United States.
CONTACT: Barrett Business Services, Inc.
William W. Sherertz, President and Chief Executive Officer
(360) 828-0700
Released April 23, 2008