Barrett Business Services, Inc. Announces Second Quarter 2003 Operating Results and Schedules Investor Conference Call
PORTLAND, Ore., July 30 /PRNewswire-FirstCall/ -- Barrett Business
Services, Inc. (Nasdaq: BBSI) reported today net income of $167,000 for the
second quarter ended June 30, 2003, an improvement of $166,000 over net income
of $1,000 for the second quarter of 2002. The diluted income per share for
the 2003 second quarter was $.03.
Revenues for the second quarter ended June 30, 2003 totaled $27.9 million,
an increase of approximately $136,000 or 0.5% over the $27.8 million for the
same quarter in 2002.
(Unaudited) (Unaudited)Results of Operations Second Quarter Ended Six Months Ended
(in thousands, except June 30, June 30,
per share amounts) 2003 2002 2003 2002
Revenues:
Staffing services $23,046 $24,684 $43,156 $47,254
Professional employer
service fees 4,856 3,082 8,143 6,250
Total revenues 27,902 27,766 51,299 53,504
Cost of revenues:
Direct payroll costs 17,079 18,175 31,877 34,809
Payroll taxes and
benefits 4,385 3,520 8,190 7,212
Workers' compensation 1,982 1,719 3,407 3,344
Total cost of revenues 23,446 23,414 43,474 45,365
Gross margin 4,456 4,352 7,825 8,139
Selling, general and
administrative expenses 3,869 4,072 7,465 8,271
Depreciation and
amortization 271 288 551 600
Income (loss) from
operations 316 (8) (191) (732)
Other (expense) income, net (68) 9 (74) 20
Income (loss) before taxes 248 1 (265) (712)
Provision for (benefit from)
income taxes 81 -- (89) (296)
Net income (loss) $167 $1 $(176) $(416)
Basic income (loss)
per share $.03 $-- $(.03) $(.07)
Weighted average basic
shares outstanding 5,708 5,806 5,728 5,814
Diluted income (loss)
per share $.03 $-- $(.03) $(.07)
Weighted average diluted
shares outstanding 5,726 5,826 5,728 5,814
The Company changed its reporting of PEO revenues from a gross basis to a
net basis in 2002 because it was determined that the Company was not the
primary obligor for the services provided by employees pursuant to its PEO
contracts. The gross revenues and cost of revenues information below,
although not in accordance with generally accepted accounting principles
("GAAP"), is presented for comparison purposes and because management believes
such information is more informative as to the level of the Company's business
activity and more useful in managing its operations.
(Unaudited) (Unaudited)Second Quarter Ended Six Months Ended
($ in thousands) June 30, June 30,
2003 2002 2003 2002
Revenues:
Staffing services $23,046 $24,684 $43,156 $47,254
Professional employer
services 28,342 18,164 48,881 36,559
Total revenues 51,388 42,848 92,037 83,813
Cost of revenues:
Direct payroll costs 40,565 33,257 72,615 65,118
Payroll taxes and
benefits 4,385 3,520 8,190 7,212
Workers' compensation 1,982 1,719 3,407 3,344
Total cost of revenues 46,932 38,496 84,212 75,674
Gross margin $4,456 $4,352 $7,825 $8,139
A reconciliation of non-GAAP gross PEO revenues to net PEO revenues is as
follows:
For the second quarters ended June 30, 2003 and 2002 (in thousands):Gross Revenue Net Revenue
Reporting Method Reclassification Reporting Method
2003 2002 2003 2002 2003 2002
Revenues:
Staffing services $23,046 $24,684 $-- $-- $23,046 $24,684
Professional
employer
services 28,342 18,164 (23,486) (15,082) 4,856 3,082
Total revenues $51,388 $42,848 $(23,486) $(15,082) $27,902 $27,766
Cost of revenues:
Direct payroll
costs $40,565 $33,257 $(23,486) $(15,082) $17,079 $18,175
For the six months ended June 30, 2003 and 2002 (in thousands):
Gross Revenue Net Revenue
Reporting Method Reclassification Reporting Method
2003 2002 2003 2002 2003 2002
Revenues:
Staffing services $43,156 $47,254 $-- $-- $43,156 $47,254
Professional
employer
services 48,881 36,559 (40,738) (30,309) 8,143 6,250
Total revenues $92,037 $83,813 $(40,738) $(30,309) $51,299 $53,504
Cost of revenues:
Direct payroll
costs $72,615 $65,118 $(40,738) $(30,309) $31,877 $34,809
William W. Sherertz, President and Chief Executive Officer, commented
that: "As we noted last quarter, we continue to be encouraged by our
prospects for continued growth in revenues and profitability. Our PEO
business is particularly strong in California and we do not see, at the
present time, any issues that would impede our momentum in the foreseeable
future. This leads us to anticipate earnings in the range of $.10 to $.13 per
diluted share for each of the two remaining quarters of 2003. We are also
pleased with the June 30 completion of a $2 million sale-leaseback transaction
of two office buildings, which will provide additional liquidity to fund our
future growth. This transaction eliminated our long-term bank debt."
The following summarizes the unaudited balance sheets at June 30, 2003 and
December 31, 2002.
($ in thousands) June 30, December 31,2003 2002
Assets
Current assets:
Cash and cash equivalents $1,977 $96
Income taxes receivable -- 1,923
Trade accounts receivable, net 14,827 11,357
Prepaid expenses and other 1,893 1,040
Deferred income taxes 1,839 2,111
Total current assets 20,536 16,527
Goodwill, net 18,749 18,749
Intangibles, net 35 59
Property, equipment and software, net 3,611 5,167
Restricted marketable securities and workers'
compensation deposits 4,142 4,286
Deferred income taxes 1,445 1,445
Other assets 937 1,064
$49,455 $47,297
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $88 $434
Line of credit payable 4,056 3,513
Accounts payable 712 834
Accrued payroll, payroll taxes and related
benefits 8,229 4,897
Workers' compensation claims liabilities 1,783 3,903
Safety incentives payable 439 406
Other accrued liabilities 587 305
Current portion of deferred gain on sale and
leaseback 122 --
Total current liabilities 16,016 14,292
Long-term debt, net of current portion 400 488
Customer deposits 441 443
Long-term workers' compensation claims
liabilities 2,481 2,492
Other long-term liabilities 673 797
Long-term deferred gain on sale and leaseback 1,097 --
Stockholders' equity 28,347 28,785
$49,455 $47,297
The Company also announced that its board of directors had recently
approved an increase of $500,000 in the capital available for the Company's
share repurchase program, under which the Company repurchases shares in the
open market from time to time when deemed appropriate, taking into
consideration price and other factors.
On July 31, 2003 at 9:00 a.m. Pacific Time, William W. Sherertz will host
an investor telephone conference call to discuss second quarter 2003 operating
results. To participate in the call, dial 877-356-3717 shortly before
9:00 a.m. Pacific Time on July 31, 2003. The call identification number is
1961120. A recording of the call will be available beginning July 31, 2003 at
12:00 p.m. and ending Thursday, August 7, 2003. To listen to the recording,
dial 800-642-1687 and enter conference identification code 1961120.
Barrett Business Services, Inc. is a human resource management company
with offices in seven states, which serve customers in approximately 15
states.
Statements in this release about future events or performance, including
earnings expectations for the remaining two quarters of 2003, 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, 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 2002 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.
SOURCE Barrett Business Services, Inc.
Released July 30, 2003