Barrett Business Services, Inc. Announces Second Quarter Earnings
PORTLAND, Ore., Aug. 2 /PRNewswire/ --
Barrett Business Services, Inc. (Nasdaq: BBSI) reported today net income of
$794,000 for the second quarter ended June 30, 2000, a decrease of $422,000 or
34.7% from the second quarter of 1999. Basic and diluted earnings per share
for the 2000 second quarter were $.11 as compared to basic and diluted
earnings per share of $.16 for the 1999 second quarter. The operating results
reported for the second quarter ended June 30, 2000 were consistent with the
Company's expectations, as previously reported on July 20, 2000.
Revenues for the second quarter ended June 30, 2000 totaled $86.5 million,
an increase of approximately $1.8 million or 2.1% over the $84.7 million for
the same quarter in 1999. The internal growth rate for revenues yielded a
decline of 4.5% for the 2000 second quarter.
William W. Sherertz, President and CEO, stated that: "The decline in net
income compared to the same period a year ago was attributable primarily to a
slowing in the Company's revenue growth rate compared to recent quarters,
combined with higher workers' compensation expense, depreciation and
amortization, and interest expense."
Mr. Sherertz commented further that: "The Company's revenue growth rate
was affected in part by a new, comprehensive pre-employment screening system,
which helps ensure that applicants are appropriately qualified. Although the
new pre-employment screening system may result in lower revenues, we believe
that in the long term the system will enhance the quality of our employees and
thus strengthen our competitive position in a low unemployment economy. We
have also increased the Company's rates for services to reflect the continuing
imbalance between the demand for and supply of qualified employees for our
customers."
The Company attributed the increase in workers' compensation expense over
the same quarter a year ago to an increase in the expected total costs of
claims and an increase in the number of claims. Higher comparable
depreciation and amortization expense was due to a May 1999 acquisition,
combined with costs associated with the Company's new information system,
implementation of which was completed in the first quarter of 2000. The
increase in net interest expense was attributable to higher debt levels
necessary to finance three 1999 acquisitions.
(in thousands, except per share amounts)
(Unaudited) (Unaudited)Second Quarter Ended Six Months Ended
June 30, June 30,
Results of Operations 2000 1999 2000 1999
Revenues:
Staffing services $51,698 $46,185 $ 99,465 $ 83,414
Professional employer
services 34,804 38,522 74,159 72,308
Total revenues 86,502 84,707 173,624 155,722
Cost of revenues:
Direct payroll costs 67,155 65,575 135,159 120,738
Payroll taxes and benefits 7,306 7,142 15,224 13,393
Workers' compensation
and safety incentives 3,263 2,848 5,860 5,134
Total cost of revenues 77,724 75,565 156,243 139,265
Gross margin 8,778 9,142 17,381 16,457
Selling, general and
administrative expenses 6,464 6,403 12,949 11,976
Depreciation and amortization 822 582 1,553 1,093
Income from operations 1,492 2,157 2,879 3,388
Other (expense) income, net (151) (15) (283) 57
Income before taxes 1,341 2,142 2,596 3,445
Provision for income taxes 547 926 1,058 1,489
Net income $794 $ 1,216 $1,538 $1,956
Basic earnings per share $.11 $.16 $.21 $.26
Weighted average basic shares
outstanding 7,416 7,581 7,438 7,624
Diluted earnings per share $.11 $.16 $.21 $.26
Weighted average diluted
shares outstanding 7,459 7,624 7,484 7,666
Certain 1999 amounts have been reclassified to conform with the 2000
presentation. Such reclassifications had no impact on gross margin, net
income or stockholders' equity.
The following summarizes the unaudited balance sheets at June 30, 2000 and
December 31, 1999.
($ in thousands) June 30, December 31,2000 1999
Assets
Current assets:
Cash and cash equivalents $332 $550
Trade accounts receivable, net 29,451 30,216
Prepaid expenses and other 1,218 1,219
Deferred tax assets 2,350 1,658
Total current assets 33,351 33,643
Intangibles, net 20,958 21,945
Property, equipment and software, net 7,439 7,027
Restricted marketable securities and
workers' compensation deposits 4,481 6,281
Unrestricted marketable securities 1,584 --
Deferred tax assets 773 712
Other assets 1,294 1,132
$69,880 $70,740
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $-- $865
Current portion of long-term debt 2,762 2,783
Line of credit payable 4,992 4,882
Accounts payable 619 1,356
Accrued payroll, payroll taxes and
related benefits 12,014 11,437
Workers' compensation claim and
safety incentive liabilities 4,701 4,219
Other accrued liabilities 703 413
Total current liabilities 25,791 25,955
Long-term debt, net of current portion 2,864 4,232
Customer deposits 698 815
Long-term workers' compensation liabilities 691 699
Other long-term liabilities 1,905 1,710
Stockholders' equity 37,931 37,329
$69,880 $70,740
Barrett Business Services, Inc. is a human resource management company
with offices in ten states. For 1999, Barrett reported net income of
$5.1 million and revenues of $347.9 million.
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, and future
workers' compensation claims experience, among others. 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.
Web site: http: //www.barrettbusiness.com
Company News On-Call: http: //www.prnewswire.com/comp/082187.html or fax, 800-758-5804, ext. 082187
CONTACT: William W. Sherertz, President and Chief Executive Officer of Barrett Business Services, Inc., 503-220-0988
Released August 2, 2000