Barrett Business Services, Inc. Announces Net Income and Revenues for Second Quarter 1998
PORTLAND, Ore., Aug. 5 /PRNewswire/ -- Barrett Business Services, Inc.
(Nasdaq: BBSI) reported today net earnings for the second quarter ended
June 30, 1998, of $935,000 or $.14 per diluted share, before a one-time charge
for merger-related expenses and the effect of the June 29, 1998 merger with a
Southern California staffing company. After a one-time charge for
merger-related expenses of $750,000 ($450,000 after-tax or $.06 per diluted
share) and the effect of the merger (on a pooling-of-interests basis), net
earnings for the 1998 second quarter were $600,000 or $0.08 per diluted share.
On this same basis, net earnings for the six-month period ended June 30, 1998,
were $987,000 or $0.13 per diluted share.
Revenues for the second quarter ended June 30, 1998 were $68.6 million,
before the effect of the merger, as compared to $69.6 million a year ago, a
decline of 1.4 percent. After the effect of the merger, revenues for the
1998 second quarter were $76.7 million, as compared to $75.7 million for the
comparable 1997 period. For the six-month period ended June 30, 1998,
revenues totaled $145.9 million, after the effect of the merger, an increase
of 2.3 percent over revenues of $142.7 million for the similar 1997 period.
As previously reported, on June 29, 1998, Barrett completed its
acquisition of Western Industrial Management, Inc., and of a related company,
Catch 55, Inc. (together "WIMI"), in a stock-for-stock merger. Barrett issued
894,642 shares of its common stock and paid a dissenting shareholder
$519,000 in cash. The parties valued the transaction at approximately
$10.7 million or $11.375 per share. The one-time charge of $750,000 for
merger-related expenses was primarily for professional fees, of which
approximately $425,000 were attributable to WIMI.
The merger with WIMI has been accounted for as a pooling-of-interests
under Accounting Principles Board Opinion No. 16. Accordingly, all prior
period financial statements have been restated to include WIMI as though it
had always been a part of Barrett. Results of operations for the second
quarter ended June 30, 1998 and 1997, however, have been reported both with
and without giving effect to the merger.
(Unaudited) (Unaudited)Second Quarter Ended Six Months Ended
June 30, June 30,
1998 1997 Post-
Pre- Post- Pre- merger
merger merger merger with
Barrett with Barrett (Restated) WIMI (Restated)
Results of Operations WIMI Operations Barrett 1998 1997
Operations
(in thousands,
except per
share amounts)
Revenues:
Staffing services $35,383 $42,786 $37,947 $43,387 $83,090 $80,136
Professional
employer services 33,187 33,865 31,621 32,273 62,802 62,535
Total revenues 68,570 76,651 69,568 75,660 145,892 142,671
Cost of revenues:
Direct payroll
costs 53,450 59,348 53,859 58,349 113,015 109,787
Payroll taxes
and benefits 5,882 6,629 6,212 6,781 13,069 13,265
Workers' compensation 1,936 2,211 1,973 2,175 4,207 4,226
Safety incentives 336 336 381 381 700 704
Total cost of
revenues 61,604 68,524 62,425 67,686 130,991 127,982
Gross margin 6,966 8,127 7,143 7,974 14,901 14,689
Selling, general and
administrative
expenses 5,168 6,035 4,857 5,641 11,851 10,750
Merger expenses -- 750 -- -- 750 --
Amortization of
intangibles 313 329 275 285 682 612
Income from operations 1,485 1,013 2,011 2,048 1,618 3,327
Other income 74 41 45 25 110 83
Income before taxes 1,559 1,054 2,056 2,073 1,728 3,410
Provision for income
taxes 624 454 802 819 741 1,333
Net income $935 $600 $1,254 $1,254 $987 $2,077
Basic earnings per
share $.14 $.08 $.19 $.16 $.13 $.27
Weighted average basic
shares 6,772 7,666 6,736 7,630 7,652 7,663
Diluted earnings per
share $.14 $.08 $.18 $.16 $.13 $.27
Weighted average
diluted shares 6,828 7,722 6,832 7,727 7,707 7,809
The following summarizes the unaudited balance sheets at June 30, 1998 and
December 31, 1997, as restated:
($ in thousands) Post-merger (Restated)June 30, December 31,
1998 1997
Assets
Cash $1,076 $3,439
Receivables, net 23,946 21,051
Prepaids and other 1,808 1,231
Deferred tax asset 2,281 2,086
Total current assets 29,111 27,807
Intangibles, net 12,130 12,133
Property and equipment, net 4,968 4,574
Restricted marketable securities 5,857 6,095
Other assets 386 206
$52,452 $50,815
Liabilities and Stockholders' Equity
Current portion of long-term debt $488 $731
Line of credit payable 252 887
Income taxes payable 48 --
Accounts payable 688 1,136
Accrued payroll and benefits 11,613 10,034
Accrued workers' compensation claims 3,260 3,140
Customer safety incentives 1,125 1,073
Other accrued liabilities 821 414
Total current liabilities 18,295 17,415
Long-term debt, net 550 573
Customer deposits 898 934
Long-term workers' compensation
liabilities 722 632
Other long-term liabilities 1,120 1,030
Stockholders' equity 30,867 30,231
$52,452 $50,815
Barrett Business Services, Inc. is a human resource management company
with offices in Washington, Oregon, Idaho, California, Arizona, Michigan,
Maryland and Delaware. For 1997, as restated, Barrett reported revenues of
$305.5 million and net income of $3.8 million.
SOURCE Barrett Business Services, Inc.
Company News On-Call: http: //www.prnewswire.com 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 5, 1998