Barrett Business Services, Inc. Reports 56% Increase in Net Income For Fourth Quarter 1998 and Pending Acquisition
PORTLAND, Ore., Feb. 10 /PRNewswire/ -- Barrett Business Services, Inc.
(Nasdaq: BBSI) reported today net income of $1,235,000 for the fourth quarter
ended December 31, 1998, an increase of $443,000 or 55.9% over the fourth
quarter of 1997. Diluted earnings per share for the 1998 fourth quarter were
$.16, compared to $.10 for the same quarter a year ago. Net income for the
year ended December 31, 1998 amounted to $3,821,000. Diluted earnings per
share for 1998 were $.50, compared to diluted earnings per share of $.49 for
1997.
Revenues for the fourth quarter ended December 31, 1998 totaled
$75.2 million, a decrease of approximately $1.7 million or 2.2% from the
$76.9 million for the same quarter in 1997. Revenues for the year ended
December 31, 1998 were $303.0 million, a decrease of $2.5 million or 0.8% from
1997.
Results of OperationsFourth Quarter
(in thousands, except Ended Year Ended
per share amounts) December 31, December 31,
1998 1997 1998 1997
Revenues:
Staffing services $38,154 $45,170 $165,443 $177,263
Professional employer
services 37,014 31,695 137,586 128,268
Total revenues 75,168 76,865 303,029 305,531
Cost of revenues:
Direct payroll costs 58,482 59,803 235,265 236,307
Payroll taxes
and benefits 5,894 6,373 25,550 27,226
Workers' compensation 2,262 2,360 8,670 9,075
Safety incentives 374 341 1,520 1,509
Total cost of
revenues 67,012 68,877 271,005 274,117
Gross margin 8,156 7,988 32,024 31,414
Selling, general and
administrative expenses 5,804 6,373 23,481 24,011
Merger expenses -- -- 750 --
Amortization of intangibles 312 359 1,316 1,332
Income from operations 2,040 1,256 6,477 6,071
Other income, net 89 33 267 116
Income before taxes 2,129 1,289 6,744 6,187
Provision for
income taxes 894 497 2,923 2,342
Net income $1,235 $792 $3,821 $3,845
Basic earnings per share $.16 $.10 $.50 $.50
Weighted average basic
shares outstanding 7,676 7,633 7,664 7,646
Diluted earnings per share $.16 $.10 $.50 $.49
Weighted average diluted
shares outstanding 7,714 7,706 7,711 7,780
Certain 1997 amounts have been reclassified to conform with the 1998
presentation. Such reclassifications had no impact on gross margin, net
income or stockholders' equity.
The following summarizes the audited balance sheets at December 31, 1998
and 1997:
($ in thousands) December 311998 1997
Assets
Current assets:
Cash and cash equivalents $4,029 $3,439
Trade accounts receivable, net 21,907 21,051
Prepaid expenses and other 1,103 1,231
Deferred tax assets 1,857 1,895
Total current assets 28,896 27,616
Intangibles, net 11,508 12,133
Property and equipment, net 5,184 4,574
Restricted marketable securities
and workers' compensation deposits 6,004 6,095
Deferred tax assets 552 191
Other assets 626 206
$52,770 $50,815
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $129 $731
Line of credit payable -- 887
Income taxes payable 438 --
Accounts payable 948 1,136
Accrued payroll, payroll taxes
and related benefits 9,246 10,034
Accrued workers' compensation claim
liabilities 3,244 3,140
Customer safety incentives payable 1,173 1,073
Other accrued liabilities 446 414
Total current liabilities 15,624 17,415
Long-term debt, net of current portion 435 573
Customer deposits 829 934
Long-term workers' compensation liabilities 714 632
Other long-term liabilities 1,466 1,030
19,068 20,584
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value; 20,500 shares
authorized, 7,676 and 7,638 shares issued
and outstanding 77 76
Additional paid-in capital 11,409 11,760
Retained earnings 22,216 18,395
33,702 30,231
$52,770 $50,815
Barrett also announced that it has reached an agreement in principle to
acquire certain assets of TPM Staffing Services, Inc. The all-cash
transaction will be effective February 15, 1999.
TPM, a privately-held staffing services company, operates three offices in
Southern California - Lake Forest, Santa Ana and Anaheim. TPM's revenues for
the year ended December 31, 1998 were approximately $5.7 million. TPM is
Barrett's second acquisition in the first quarter of 1999.
Barrett Business Services, Inc. is a human resource management company
with offices in ten states.
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 February 10, 1999