Barrett Business Services, Inc. Announces Third Quarter 2004 Operating Results and Financial Guidance for 4Q04
PORTLAND, Ore., Oct. 27 /PRNewswire-FirstCall/ -- Barrett Business
Services, Inc. (Nasdaq: BBSI) reported today net income of $2,448,000 for the
third quarter ended September 30, 2004, an improvement of $1,505,000 over net
income of $943,000 for the third quarter of 2003. Diluted earnings per share
for the 2004 third quarter was $.40, as compared to diluted earnings per share
of $.16 for the same quarter a year ago.
Net revenues for the third quarter ended September 30, 2004 totaled $54.7
million, an increase of approximately $19.9 million or 57.2% over the $34.8
million for the same quarter in 2003.
(Unaudited) (Unaudited)
Results of Operations Third Quarter Ended Nine Months Ended
(in thousands, except per September 30, September 30,
share amounts) 2004 2003 2004 2003
Revenues:
Staffing services $35,673 $26,727 $91,197 $69,883
Professional employer
service fees 19,006 8,046 51,796 16,189
Total revenues 54,679 34,773 142,993 86,072
Cost of revenues:
Direct payroll costs 26,436 19,740 67,307 51,617
Payroll taxes and benefits 11,376 6,181 33,556 14,371
Workers' compensation 6,094 2,622 15,774 6,029
Total cost of revenues 43,906 28,543 116,637 72,017
Gross margin 10,773 6,230 26,356 14,055
Selling, general and
administrative expenses 6,404 4,461 17,637 11,926
Depreciation and amortization 257 256 752 807
Income from operations 4,112 1,513 7,967 1,322
Other income (expense), net 73 (62) 132 (136)
Income before taxes 4,185 1,451 8,099 1,186
Provision for income taxes 1,737 508 3,205 419
Net income $2,448 $943 $4,894 $767
Basic earnings per share $.43 $.17 $.86 $.13
Weighted average basic shares
outstanding 5,739 5,645 5,720 5,700
Diluted earnings per share $.40 $.16 $.80 $.13
Weighted average diluted shares
outstanding 6,144 5,927 6,140 5,805
The Company changed its reporting of PEO revenues from a gross basis to a
net basis in 2002. The gross revenues and cost of revenues information below,
although not in accordance with generally accepted accounting principles
("GAAP"), is presented for comparison purposes and because management believes
such information is more informative as to the level of the Company's business
activity and more useful in managing its operations.
(Unaudited) (Unaudited)
Third Quarter Ended Nine Months Ended
($ in thousands) September 30, September 30,
2004 2003 2004 2003
Revenues:
Staffing services $35,673 $26,727 $91,197 $69,883
Professional employer
services 109,435 46,886 299,139 95,767
Total revenues 145,108 73,613 390,336 165,650
Cost of revenues:
Direct payroll costs 115,580 57,977 311,337 130,592
Payroll taxes and benefits 11,376 6,181 33,555 14,371
Workers' compensation 7,379 3,225 19,088 6,632
Total cost of revenues 134,335 67,383 363,980 151,595
Gross margin $ 10,773 $6,230 $ 26,356 $ 14,055
A reconciliation of non-GAAP gross revenues to net revenues is as follows:
For the third quarters ended September 30, 2004 and 2003 (in thousands):
Gross Revenue Net Revenue
Reporting Method Reclassification Reporting Method
2004 2003 2004 2003 2004 2003
Revenues:
Staffing
services $35,673 $26,727 $-- $-- $35,673 $26,727
Professional
employer
services 109,435 46,886 (90,429) (38,840) 19,006 8,046
Total
revenues $145,108 $73,613 $(90,429) $(38,840) $54,679 $34,773
Cost of
revenues: $134,335 $67,383 $(90,429) $(38,840) $43,906 $28,543
For the nine months ended September 30, 2004 and 2003 (in thousands):
Gross Revenue Net Revenue
Reporting Method Reclassification Reporting Method
2004 2003 2004 2003 2004 2003
Revenues:
Staffing
services $91,197 $69,883 $-- $-- $91,197 $69,883
Professional
employer
services 299,139 95,767 (247,343) (79,578) 51,796 16,189
Total
revenues $390,336 $165,650 $(247,343) $(79,578) $142,993 $86,072
Cost of
revenues: $363,980 $151,595 $(247,343) $(79,578) $116,637 $72,017
William W. Sherertz, President and Chief Executive Officer, commented
that: "We are very pleased with the continued momentum of our earnings and
revenue growth, as well as the strengthening of our balance sheet. Our third
quarter represents the eighth consecutive quarter in which our operating
results improved over the comparable period."
The following summarizes the unaudited consolidated balance sheets at
September 30, 2004 and December 31, 2003.
($ in thousands) September 30, December 31,
2004 2003
Assets
Current assets:
Cash and cash equivalents $10,009 $7,785
Marketable securities 4,503 --
Trade accounts receivable, net 30,523 18,481
Prepaid expenses and other 1,243 958
Deferred income taxes 5,168 2,196
Total current assets 51,446 29,420
Goodwill, net 21,738 18,749
Intangibles, net 30 13
Property, equipment and software, net 4,439 3,367
Restricted marketable securities and workers'
compensation deposits 1,775 1,647
Deferred income taxes 758 1,041
Other assets 399 436
$80,585 $54,673
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $348 $88
Income taxes payable 2,685 --
Accounts payable 430 727
Accrued payroll, payroll taxes and related
benefits 23,829 13,881
Workers' compensation claims liabilities 4,977 3,886
Safety incentives liabilities 4,534 2,007
Other accrued liabilities 606 361
Total current liabilities 37,409 20,950
Long-term debt, net of current portion 1,478 400
Customer deposits 501 455
Long-term workers' compensation claims
liabilities 4,576 1,031
Other long-term liabilities -- 45
Deferred gain on sale and leaseback 1,067 1,158
Stockholders' equity 35,554 30,634
$80,585 $54,673
OUTLOOK FOR FOURTH QUARTER 2004
The Company also disclosed today limited financial guidance with respect
to its operating results for the fourth quarter ending December 31, 2004. The
Company expects gross revenues for the fourth quarter to range from $144
million to $146 million and anticipates diluted earnings per share to range
from $.35 to $.38 per share for the same period. A reconciliation of
estimated gross revenues to estimated GAAP net revenues for the fourth quarter
of 2004 is not included because PEO revenues and cost of PEO revenues for the
period are not reasonably estimable.
On October 28, 2004 at 9:00 a.m. Pacific Time, William W. Sherertz and
Michael D. Mulholland will host an investor telephone conference call to
discuss third quarter 2004 operating results. To participate in the call,
dial (877)356-3717. The call identification number is 1430173. 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 October
28, 2004 at 11:00 a.m. and ending November 4, 2004. To listen to the
recording, dial (800) 642-1687 and enter conference identification code
1430173.
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 fourth quarter of 2004, 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.
10/27/2004
CONTACT: William W. Sherertz, Chief Executive Officer of Barrett
Business Services, Inc., +1-503-220-0988
Web site: http://www.barrettbusiness.com
(BBSI)
10/27/2004 16:02 EDT http://www.prnewswire.com
Released October 27, 2004