BBSI Announces Resolution of Balance Sheet Accounting Treatment
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
http://www.prnewswire.com
Released March 9, 2005