Barrett Business Services, Inc. Announces First Quarter 2004 Operating Results and Financial Guidance for 2Q04
PORTLAND, Ore., April 28 /PRNewswire-FirstCall/ -- Barrett Business
Services, Inc. (Nasdaq: BBSI) reported today net income of $606,000 for the
first quarter ended March 31, 2004, an improvement of $949,000 from a net loss
of $343,000 for the first quarter of 2003. Diluted income per share for the
2004 first quarter was $.10, as compared to a diluted loss per share of $(.06)
for the same quarter a year ago.
Net revenues for the first quarter ended March 31, 2004 totaled $40.6
million, an increase of approximately $17.2 million or 73.5% over the $23.4
million for the same quarter in 2003.
(Unaudited)First Quarter Ended
March 31,
Results of Operations 2004 2003
(in thousands, except per share amounts)
Revenues:
Staffing services $25,054 $20,110
Professional employer service fees 15,556 3,287
Total revenues 40,610 23,397
Cost of revenues:
Direct payroll costs 18,320 14,798
Payroll taxes and benefits 11,531 3,805
Workers' compensation 4,036 1,425
Total cost of revenues 33,887 20,028
Gross margin 6,723 3,369
Selling, general and administrative expenses 5,532 3,596
Depreciation and amortization 242 280
Income (loss) from operations 949 (507)
Other income (expense), net 21 (6)
Income (loss) before taxes 970 (513)
Provision for (benefit from) income taxes 364 (170)
Net income (loss) $606 $(343)
Basic income (loss) per share $.11 $(.06)
Weighted average basic shares outstanding 5,704 5,748
Diluted income (loss) per share $.10 $(.06)
Weighted average diluted shares outstanding 6,143 5,748
The Company changed its reporting of PEO revenues from a gross basis to a
net basis in 2002. The gross revenues and cost of revenues information below,
although not in accordance with generally accepted accounting principles
("GAAP"), is presented for comparison purposes and because management believes
such information is more informative as to the level of the Company's business
activity and more useful in managing its operations.
(Unaudited)First Quarter Ended
($ in thousands) March 31,
2004 2003
Revenues:
Staffing services $25,054 $20,110
Professional employer services 91,720 20,539
Total gross revenues $116,774 $40,649
Cost of revenues:
Direct payroll costs 93,367 32,050
Payroll taxes and benefits 11,531 3,805
Workers' compensation 5,153 1,425
Total cost of revenues 110,051 37,280
Gross margin $6,723 $3,369
A reconciliation of non-GAAP gross revenues to net revenues is as follows:
For the first quarters ended March 31, 2004 and 2003 (in thousands):
Gross Revenue Net Revenue
Reporting Method Reclassification Reporting Method
2004 2003 2004 2003 2004 2003
Revenues:
Staffing
services $25,054 $20,110 $-- $-- $25,054 $20,110
Professional
employer
services 91,720 20,539 (76,164) (17,252) 15,556 3,287
Total
revenues $116,774 $40,649 $(76,164) $(17,252) $40,610 $23,397
Cost of
revenues: $110,051 $37,280 $(76,164) $(17,252) $33,887 $20,028
William W. Sherertz, President and Chief Executive Officer, commented
that: "We are very pleased with our continuing sequential growth in gross
revenues. We believe this will equate to increased momentum for improved
earnings trends for the balance of 2004. In addition, our balance sheet has
never been stronger, now with a record $10.0 million in cash and securities,
which further strengthens our overall liquidity and working capital position."
The following summarizes the unaudited balance sheets at March 31, 2004
and December 31, 2003.
($ in thousands) March 31, December 31,2004 2003
Assets
Current assets:
Cash and cash equivalents $6,062 $7,785
Marketable securities 3,907 --
Trade accounts receivable, net 24,816 18,481
Prepaid expenses and other 2,576 958
Deferred income taxes 2,115 2,196
Total current assets 39,476 29,420
Goodwill, net 21,738 18,749
Intangibles, net 44 13
Property, equipment and software, net 3,247 3,367
Restricted marketable securities and workers'
compensation deposits 1,726 1,647
Deferred income taxes 990 1,041
Other assets 474 436
$67,695 $54,673
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $200 $88
Income taxes payable 227 --
Accounts payable 639 727
Accrued payroll, payroll taxes and related
benefits 22,734 13,881
Workers' compensation claims liabilities 5,116 3,886
Safety incentives liabilities 2,961 2,007
Other accrued liabilities 1,722 361
Total current liabilities 33,599 20,950
Long-term debt, net of current portion 200 400
Customer deposits 481 455
Long-term workers' compensation claims
liabilities 1,025 1,031
Other long-term liabilities -- 45
Deferred gain on sale and leaseback 1,128 1,158
Stockholders' equity 31,262 30,634
$67,695 $54,673
Outlook for Second Quarter 2004
The Company also disclosed today limited financial guidance with respect
to its operating results for the second quarter ending June 30, 2004. The
Company expects gross revenues for the second quarter to range from $120
million to $123 million and anticipates diluted income per share to range from
$.25 to $.30 per share for the same period. A reconciliation of estimated
gross revenues to estimated GAAP net revenues for the second quarter of 2004
is not included because estimated PEO revenues and cost of PEO revenues for
the period cannot be determined without unreasonable effort and expense.
On April 29, 2004 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 2004 operating results. To participate in the call,
dial 877-0356-3717 shortly before 9:00 a.m. Pacific Time on April 29, 2004.
The call identification number is 6842413. 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 29, 2004 at 11:00 a.m. and ending
May 6, 2004. To listen to the recording, dial 800-642-1687 and enter
conference identification code 6842413.
Barrett Business Services, Inc. is a human resource management company
with offices in eight states, which serve customers in approximately 18
states.
Statements in this release about future events or performance, including
earnings expectations for the second 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 successful integration of the
operations of Skills Resource Training Center acquired by the Company on
January 1, 2004, 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.
Released April 28, 2004