Barrett Business Services, Inc. Announces Lower Earnings Anticipated for Third Quarter of 1997

PORTLAND, Ore., Oct. 20 /PRNewswire/ -- Barrett Business Services, Inc.

(Nasdaq: BBSI) announced today that earnings for the third quarter ended

September 30, 1997 will fall significantly below analysts' estimates and the

comparable period last year.

Net earnings per share for the third quarter of 1997 are expected to be

$.13 to $.15, which compares to $.24 per share for the third quarter of 1996.

The shortfall in earnings was primarily attributable to

higher-than-expected direct payroll costs as a percentage of revenues,

increased bad debt expense and higher branch office operating expenses.

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

"our growth rates have created volatility and unpredictability in recent

months in our direct payroll costs, which is the largest component of our

gross margin. We believe we have developed a system which will enable

management to better anticipate the trends influencing this cost in the

future. Higher direct payroll costs will, however, continue to have a

negative effect on margin in future periods. The increase in our bad debt

expense was a single branch problem and not a company-wide issue and

management believes the problem has been addressed. Our increased branch

operating expenses reflect our continuing investment in high-quality people to

manage and grow our business."

Actual operating results for the 1997 third quarter are scheduled to be

reported on November 3, 1997.

Certain of the above information is forward-looking and as such, merely

reflects the Company's best assessment at this time. Investors are cautioned

that forward-looking statements involve risks and uncertainty, that actual

results may differ materially from such statements, and that investors should

not place undue reliance on such statements. For a discussion of factors that

may affect actual results, investors should refer to the Company's Securities

and Exchange Commission reports, including but not limited to the Annual

Report on Form 10-K for the year ended December 31, 1996.

Barrett Business Services, Inc. is a human resource management company

with offices in Washington, Oregon, Idaho, California, Arizona, Michigan,

Maryland and Delaware. Barrett reported revenues of $215.8 million and net

income of $5.0 million for 1996.
SOURCE Barrett Business Services Inc.
CONTACT: William W. Sherertz, President and Chief Executive Officer, 503-220-0988

Released October 20, 1997