BBSI Announces Fourth Quarter 2005 Operating Results and Financial Guidance for 1Q06
PORTLAND, Ore., Feb 09, 2006 (BUSINESS WIRE) -- Barrett Business Services, Inc. (Nasdaq: BBSI) reported
today net income of $4.3 million for the fourth quarter ended December
31, 2005, an improvement of approximately $1.8 million or 72% over net
income of $2.5 million for the fourth quarter of 2004. Diluted
earnings per share for the 2005 fourth quarter were $.37, as compared
to diluted earnings per share of $.27 for the same quarter a year ago.
For 2005, diluted earnings per share were $1.21, as compared to $.79
for 2004.
Net revenues for the fourth quarter ended December 31, 2005
totaled $58.0 million, an increase of approximately $6.0 million or
11.5% over the $52.0 million for the same quarter in 2004. For 2005,
net revenues were $231.4 million, an increase of approximately $36.4
million or 18.7% over 2004.
(Unaudited) (Unaudited)Fourth Quarter Ended Year Ended
December 31, December 31,
-------------------- -------------------
Results of Operations 2005 2004 2005 2004
----------------------------- --------- -------- -------- --------
(in thousands, except per share amounts)
Revenues:
Staffing services $ 29,251 $ 32,317 $130,098 $123,514
Professional employer
service fees 28,712 19,651 101,291 71,447
-------- -------- -------- --------
Total revenues 57,963 51,968 231,389 194,961
-------- -------- -------- --------
Cost of revenues:
Direct payroll costs 21,864 23,883 97,006 91,190
Payroll taxes and benefits 16,238 11,988 63,889 45,544
Workers' compensation 6,302 6,234 24,667 23,071
-------- -------- -------- --------
Total cost of revenues 44,404 42,105 185,562 159,805
-------- -------- -------- --------
Gross margin 13,559 9,863 45,827 35,156
Selling, general and
administrative expenses 7,043 5,756 25,670 22,330
Depreciation and amortization 282 256 974 1,008
-------- -------- -------- --------
Income from operations 6,234 3,851 19,183 11,818
Other income (expense), net 519 300 747 432
-------- -------- -------- --------
Income before taxes 6,753 4,151 19,930 12,250
Provision for income taxes 2,439 1,674 7,440 4,879
-------- -------- -------- --------
Net income $ 4,314 $ 2,477 $ 12,490 $ 7,371
-------- -------- -------- --------
Basic earnings per share $ .39 $ .29 $ 1.29 $ .86
-------- -------- -------- --------
Weighted average basic shares
outstanding 11,018 8,611 9,647 8,587
-------- -------- -------- --------
Diluted earnings per share $ .37 $ .27 $ 1.21 $ .79
-------- -------- -------- --------
Weighted average diluted
shares outstanding 11,739 9,287 10,343 9,289
-------- -------- -------- --------
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,
--------------------- ---------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Revenues:
Staffing services $ 29,251 $ 32,317 $ 130,098 $ 123,514
Professional employer
services 183,843 119,871 635,743 419,010
--------- --------- --------- ---------
Total revenues 213,094 152,188 765,841 542,524
--------- --------- --------- ---------
Cost of revenues:
Direct payroll costs 175,924 122,697 625,242 434,034
Payroll taxes and
benefits 16,237 11,988 63,888 45,544
Workers' compensation 7,374 7,640 30,884 27,790
--------- --------- --------- ---------
Total cost of revenues 199,535 142,325 720,014 507,368
--------- --------- --------- ---------
Gross margin $ 13,559 $ 9,863 $ 45,827 $ 35,156
--------- --------- --------- ---------
Gross revenues of $213.1 million for the 2005 fourth quarter rose
40.0% over the comparable 2004 period. For 2005, gross revenues of
$765.8 million increased 41.2% over 2004.
A reconciliation of non-GAAP gross revenues to net revenues is as
follows:
For the fourth quarters ended December 31, 2005 and 2004 (in
thousands):
Gross Revenue Net Revenue(in thousands) Reporting Method Reclassification Reporting Method
---------------------------------------------------------
2005 2004 2005 2004 2005 2004
---------------------------------------------------------
Revenues:
Staffing
services $ 29,251 $ 32,317 $ - $ - $29,251 $32,317
Professional
services 183,843 119,871 (155,131) (100,220) 28,712 19,651
-------- -------- --------- --------- ------- -------
Total
revenues $213,094 $152,188 $(155,131) $(100,220) $57,963 $51,968
-------- -------- --------- --------- ------- -------
Cost of
revenues: $199,535 $142,325 $(155,131) $(100,220) $44,404 $42,105
-------- -------- --------- --------- ------- -------
For the years ended December 31, 2005 and 2004 (in thousands):
Gross Revenue Net Revenue(in thousands) Reporting Method Reclassification Reporting Method
--------------------------------------------------------
2005 2004 2005 2004 2005 2004
--------------------------------------------------------
Revenues:
Staffing
services $130,098 $123,514 $- $- $130,098 $123,514
Professional
services 635,743 419,010 (534,452) (347,563) 101,291 71,447
--------------------------------------------------------
Total
revenues $765,841 $542,524 $(534,452)$(347,563)$231,389 $194,961
--------------------------------------------------------
Cost of
revenues: $720,014 $507,368 $(534,452)$(347,563)$185,562 $159,805
--------------------------------------------------------
William W. Sherertz, President and Chief Executive Officer,
commented that: "We are pleased with our 72% increase in net income
for the fourth quarter of 2005 as compared to the same quarter a year
ago and with the continuing growth of our customer base throughout all
operating regions."
The following summarizes the unaudited consolidated balance sheets
at December 31, 2005 and December 31, 2004.
(Unaudited)-------------------------
December 31, December 31,
(in thousands) 2005 2004
------------ -----------
Assets
------
Current assets:
Cash and cash equivalents $ 61,361 $ 12,153
Marketable securities 3,548 4,630
Trade accounts receivable, net 26,328 23,840
Prepaid expenses and other 2,514 1,364
Deferred income taxes 5,864 4,100
Workers' compensation receivables for
insured claims 242 213
----------- -----------
Total current assets 99,857 46,300
Marketable securities 396 -
Goodwill, net 22,516 22,516
Intangibles, net 5 25
Property, equipment and software, net 13,071 4,301
Restricted marketable securities and
workers'
compensation deposits 2,041 1,702
Deferred income taxes 341 582
Other assets 1,528 401
Workers' compensation receivables for
insured claims 4,546 4,158
----------- -----------
$ 144,301 $ 79,985
----------- -----------
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Current portion of long-term debt $ 348 $ 348
Accounts payable 1,366 994
Accrued payroll, payroll taxes and related
benefits 28,650 17,427
Workers' compensation claims liabilities 5,729 4,946
Workers' compensation claims liabilities
for insured claims 242 213
Safety incentives liabilities 7,687 4,807
Other accrued liabilities 360 414
----------- -----------
Total current liabilities 44,382 29,149
Long-term debt, net of current portion 1,094 1,441
Customer deposits 663 608
Long-term workers' compensation claims
liabilities 8,532 6,465
Long-term workers' compensation liabilities
for insured claims 2,866 2,533
Deferred gain on sale and leaseback 914 1,036
Stockholders' equity 85,850 38,753
----------- -----------
$ 144,301 $ 79,985
----------- -----------
Outlook for First Quarter 2006
The Company also disclosed today limited financial guidance with
respect to its operating results for the first quarter ending March
31, 2006. The Company expects gross revenues for the first quarter of
2006 to range from $232 million to $234 million, an increase of
approximately 48% over the first quarter of 2005, and anticipates
diluted earnings per share for the first quarter of 2006 to range from
$.10 to $.12 per share. This range of expected earnings per share
equates to an approximate increase in net income of 39% over the first
quarter of 2005. A reconciliation of estimated gross revenues to
estimated GAAP net revenues for the first quarter of 2006 is not
included because PEO revenues and cost of PEO revenues for the period
are not reasonably estimable.
On February 10, 2006 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 2005 operating results. To
participate in the call, dial 877-356-3717. The call identification
number is 4797340. 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 webcasts. A replay of the
conference call will be available beginning at 11:00 a.m. PT on
Friday, February 10, 2006 and ending on February 17, 2006. The access
telephone number for the replay is 800-642-1687 and the access code
is 4797340.
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 2006, 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 our
primary markets, collectibility of accounts receivable, and the use of
net proceeds of approximately $33.1 million and other effects of the
Company's recent follow-on equity offering, among others. Other
important factors that may affect the Company's future prospects are
described in the Company's 2004 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: BBSI
BBSI
William W. Sherertz, 503-220-0988
Released February 9, 2006