Barrett Business Services, Inc. Announces First Quarter 2003 Operating Results

PORTLAND, Ore., April 30 /PRNewswire-FirstCall/ --

Barrett Business Services, Inc. (Nasdaq: BBSI) reported today a net loss of

$343,000 for the first quarter ended March 31, 2003, an improvement of $74,000

from a net loss of $417,000 for the first quarter of 2002. The diluted loss

per share for the 2003 first quarter was $(.06) as compared to a diluted loss

per share of $(.07) for the same quarter a year ago.

Revenues for the first quarter ended March 31, 2003 totaled $23.4 million,

a decrease of approximately $2.3 million or 9.1% from the $25.7 million for

the same quarter in 2002.

                                                         (Unaudited)

First Quarter Ended

March 31,

Results of Operations 2003 2002

(in thousands, except per share amounts)

Revenues:

Staffing services $20,110 $22,570

Professional employer service fees 3,287 3,168

Total revenues 23,397 25,738

Cost of revenues:

Direct payroll costs 14,798 16,634

Payroll taxes and benefits 3,805 3,692

Workers' compensation 1,425 1,625

Total cost of revenues 20,028 21,951

Gross margin 3,369 3,787

Selling, general and administrative expenses 3,596 4,199

Depreciation and amortization 280 312

Loss from operations (507) (724)

Other (expense) income, net (6) 11

Loss before taxes (513) (713)

Benefit from income taxes (170) (296)

Net loss $(343) $(417)

Basic loss per share $(.06) $(.07)

Weighted average basic shares outstanding 5,748 5,821

Diluted loss per share $(.06) $(.07)

Weighted average diluted shares outstanding 5,748 5,821

William W. Sherertz, President and Chief Executive Officer, commented

that: "We are relatively pleased with the improved results for the 2003 first

quarter and encouraged by our growth prospects for the balance of the year.

With the anticipated completion of a real estate sale-leaseback transaction in

the second quarter, we expect to substantially reduce our bank debt during the

current quarter, which will position the Company very well for the future."

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 revenue information below is presented for comparison

purposes only.

                                                          (Unaudited)

First Quarter Ended

March 31,

2003 2002

Revenues:

Staffing services $20,110 $22,570

Professional employer services 20,539 18,395

Total revenues $40,649 $40,965

Cost of revenues:

Direct payroll costs 32,050 31,861

Payroll taxes and benefits 3,805 3,692

Workers' compensation 1,425 1,625

Total cost of revenues 37,280 37,178

Gross margin $3,369 $3,787

A reconciliation of gross PEO revenues to net PEO revenues is as follows:

For the quarter ended March 31, 2003 (in thousands):

Net Revenue

Gross Revenue Reporting

Reporting Method Reclassification Method

Revenues:

Staffing services $20,110 $-- $20,110

Professional employer

services 20,539 (17,252) 3,287

Total revenues $40,649 $(17,252) $23,397

Cost of revenues:

Direct payroll costs $32,050 $(17,252) $14,798

For the quarter ended March 31, 2002 (in thousands):

Net Revenue

Gross Revenue Reporting

Reporting Method Reclassification Method

Revenues:

Staffing services $22,570 $-- $22,570

Professional employer

services 18,395 (15,227) 3,168

Total revenues $40,965 $(15,227) $25,738

Cost of revenues:

Direct payroll costs $31,861 $(15,227) $16,634

The following summarizes the unaudited balance sheets at March 31, 2003

and December 31, 2002.

    ($ in thousands)

March 31, December 31,

2003 2002

Assets

Current assets:

Cash and cash equivalents $239 $96

Income taxes receivable -- 1,923

Trade accounts receivable, net 10,983 11,357

Prepaid expenses and other 1,811 1,040

Deferred income taxes 1,944 2,111

Total current assets 14,977 16,527

Goodwill, net 18,749 18,749

Intangibles, net 46 59

Property, equipment and software, net 4,942 5,167

Restricted marketable securities and workers'

compensation deposits 4,341 4,286

Deferred income taxes 1,445 1,445

Other assets 929 1,064

$45,429 $47,297

Liabilities and Stockholders' Equity

Current liabilities:

Current portion of long-term debt $422 $434

Line of credit payable 1,793 3,513

Accounts payable 979 834

Accrued payroll, payroll taxes and related

benefits 6,358 4,897

Workers' compensation claims liabilities 2,127 3,903

Safety incentives payable 346 406

Other accrued liabilities 1,108 305

Total current liabilities 13,133 14,292

Long-term debt, net of current portion 400 488

Customer deposits 444 443

Long-term workers' compensation claims liabilities 2,487 2,492

Other long-term liabilities 650 797

Stockholders' equity 28,315 28,785

$45,429 $47,297

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 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.