BBSI Announces First Quarter 2005 Operating Results and Financial Guidance for 2Q05
PORTLAND, Ore., April 27 /PRNewswire-FirstCall/ -- Barrett Business
Services, Inc. (Nasdaq: BBSI) reported today net income of $931,000 for the
first quarter ended March 31, 2005, an improvement of $325,000 or 53.6% over
net income of $606,000 for the first quarter of 2004. Diluted earnings per
share for the 2005 first quarter were $.15, as compared to diluted earnings
per share of $.10 for the same quarter a year ago.
Net revenues for the first quarter ended March 31, 2005 totaled $49.2
million, an increase of approximately $8.6 million or 21.2% over the $40.6
million for the same quarter in 2004.
(Unaudited)
($ in thousands) First Quarter Ended
March 31,
Results of Operations 2005 2004
Revenues:
Staffing services $28,542 $25,054
Professional employer service fees 20,702 15,556
Total revenues 49,244 40,610
Cost of revenues:
Direct payroll costs 21,017 18,320
Payroll taxes and benefits 15,697 11,531
Workers' compensation 4,930 4,036
Total cost of revenues 41,644 33,887
Gross margin 7,600 6,723
Selling, general and administrative
expenses 5,946 5,532
Depreciation and amortization 236 242
Income from operations 1,418 949
Other income, net 108 21
Income before taxes 1,526 970
Provision for income taxes 595 364
Net income $931 $606
Basic earnings per share $.16 $.11
Weighted average basic shares
outstanding 5,764 5,704
Diluted earnings per share $.15 $.10
Weighted average diluted shares
outstanding 6,234 6,196
As previously reported on April 18, 2005, the Company has declared a 3-
for-2 stock split. The additional shares to be issued in the stock split will
be distributed on May 19, 2005 to stockholders of record at the close of
business on April 29, 2005. On a split adjusted basis, diluted earnings per
share for the 2005 first quarter would have been $.10, as compared to $.07 for
the same quarter a year ago.
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
First Quarter
(in thousands) March 31,
2005 2004
Revenues:
Staffing services $28,542 $25,054
Professional employer services 128,551 91,720
Total revenues 157,093 116,774
Cost of revenues:
Direct payroll costs 127,397 93,367
Payroll taxes and benefits 15,697 11,531
Workers' compensation 6,399 5,153
Total cost of revenues 149,493 110,051
Gross margin $7,600 $6,723
A reconciliation of non-GAAP gross revenues to net revenues is as follows:
For the first quarters ended March 31, 2005 and 2004 (in thousands):
Unaudited
Three Months Ended March 31,
Gross Revenue
(in thousands) Reporting Method
2005 2004
Revenues:
Staffing services $28,542 $25,054
Professional
employer
services 128,551 91,720
Total revenues $157,093 $116,774
Cost of revenues: $149,493 $110,051
Unaudited
Three Months Ended March 31,
(in thousands) Reclassification
2005 2004
Revenues:
Staffing services $-- $--
Professional
employer
services (107,849) (76,164)
Total revenues $(107,849) $(76,164)
Cost of revenues: $(107,849) $(76,164)
Unaudited
Three Months Ended March 31,
Net Revenue
(in thousands) Reporting Method
2005 2004
Revenues:
Staffing services $28,542 $25,054
Professional
employer
services 20,702 15,556
Total revenues $49,244 $40,610
Cost of revenues: $41,644 $33,887
William W. Sherertz, President and Chief Executive Officer, commented
that: "Our results for the quarter reflect strong growth from all of our
operating regions, which bodes well for 2005."
The following summarizes the unaudited consolidated balance sheets at
March 31, 2005 and December 31, 2004.
March 31, December 31,
($ in thousands) 2005 2004
Assets
Current assets:
Cash and cash equivalents $20,667 $12,153
Marketable securities 4,584 4,630
Trade accounts receivable, net 31,264 23,840
Prepaid expenses and other 3,249 1,364
Deferred income taxes 4,910 4,100
Workers' compensation receivables
for insured claims 213 213
Total current assets 64,887 46,300
Goodwill, net 22,516 22,516
Intangibles, net 20 25
Property, equipment and software,
net 4,221 4,301
Restricted marketable securities
and workers'
compensation deposits 1,734 1,702
Deferred income taxes 459 582
Other assets 395 401
Workers' compensation receivables
for insured claims 4,090 4,158
$98,322 $79,985
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $348 $348
Income taxes payable 213 --
Accounts payable 774 994
Accrued payroll, payroll taxes
and related benefits 31,246 17,427
Workers' compensation claims
liabilities 5,530 4,946
Workers' compensation claims
liabilities for insured claims 213 213
Safety incentives liabilities 5,618 4,807
Other accrued liabilities 2,013 414
Total current liabilities 45,955 29,149
Long-term debt, net of current
portion 1,204 1,441
Customer deposits 635 608
Long-term workers' compensation
claims liabilities 4,956 4,840
Long-term workers' compensation
liabilities for insured claims 4,090 4,158
Deferred gain on sale and
leaseback 1,006 1,036
Stockholders' equity 40,476 38,753
$98,322 $79,985
Outlook for Second Quarter 2005
The Company also disclosed today limited financial guidance with respect
to its operating results for the second quarter ending June 30, 2005. The
Company expects gross revenues for the second quarter of 2005 to range from
$172 million to $174 million, an increase of approximately 35% over the second
quarter of 2004, and anticipates diluted earnings per share for the second
quarter of 2005, on a split-adjusted basis, to range from $.27 to $.28 per
share, an increase of approximately 37% over $.20 per share for the same
period a year ago, on a split-adjusted basis. Management expectations for
diluted earnings per share for the second quarter of 2005 on a non-split
adjusted basis equate to a range of $.40 to $.42.
A reconciliation of estimated gross revenues to estimated GAAP net
revenues for the second quarter of 2005 is not included because PEO revenues
and cost of PEO revenues for the period are not reasonably estimable.
On April 28, 2005 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 2005 operating results. To participate in the call,
dial 877-356-3717. The call identification number is 5396598. 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 April 28, 2005 at
11:00 a.m. and ending May 5, 2005. To listen to the recording, dial 800-642-
1687 and enter conference identification code 5396598.
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 second 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 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 Barrett Business Services, Inc.
04/27/2005
CONTACT: William W. Sherertz, President and
Chief Executive Officer of Barrett Business Services, Inc., +1-503-220-0988
Web site: http://www.barrettbusiness.com
(BBSI)
04/27/2005 16:28 EDT http://www.prnewswire.com
Released April 27, 2005