BBSI Announces Third Quarter 2010 Operating Results, Financial Guidance for 4Q10 and Conference Call
VANCOUVER, Wash., Oct. 26, 2010 (GLOBE NEWSWIRE) -- Barrett Business Services, Inc. (Nasdaq:BBSI) reported today net income of $3.7 million for the third quarter ended September 30, 2010 compared to a net income of $2.9 million for the third quarter of 2009. Diluted income per share for the 2010 third quarter was $.36, as compared to diluted earnings per share of $.28 for the same quarter a year ago.
Net revenues for the third quarter ended September 30, 2010 totaled $73.9 million, an increase of approximately $8.4 million or 12.8% over the $65.5 million for the same quarter in 2009.
(Unaudited) (Unaudited)
(in thousands, except per share amounts)
Third Quarter Ended
September 30,Nine Months Ended
September 30,
Results of Operations 2010 2009 2010 2009
Revenues:
Staffing services $ 33,954 $ 33,180 $ 92,991 $ 85,224
Professional employer service fees 39,922 32,314 106,577 88,607
Total revenues 73,876 65,494 199,568 173,831
Cost of revenues:
Direct payroll costs 25,846 25,095 70,519 64,291
Payroll taxes and benefits 24,501 20,399 71,990 62,460
Workers' compensation 9,473 7,859 25,881 33,473
Total cost of revenues 59,820 53,353 168,390 160,224
Gross margin 14,056 12,141 31,178 13,607
Selling, general and administrative expenses 9,156 8,416 25,787 24,792
Depreciation and amortization 341 422 1,051 1,218
Income (loss) from operations 4,559 3,303 4,340 (12,403)
Other income, net 588 965 1,253 1,373
Income (loss) before taxes 5,147 4,268 5,593 (11,030)
Provision for (benefit from) income taxes 1,461 1,323 1,315 (4,069)
Net income (loss) $ 3,686 $ 2,945 $ 4,278 $ (6,961)
Basic income (loss) per share $ .36 $ .28 $ .41 $ (.67)
Weighted average basic shares outstanding 10,217 10,475 10,376 10,442
Diluted income (loss) per share $ .36 $ .28 $ .41 $ (.67)
Weighted average diluted shares outstanding 10,251 10,559 10,410 10,442
The Company reports its Professional Employer Organization services ("PEO") revenues on a net basis because it is not the primary obligor for the services provided by the Company's PEO clients to their customers. The gross revenues and cost of revenues information below, although not in accordance with generally accepted accounting principles ("GAAP"), is presented for comparison purposes and because management believes such information is more informative as to the level of the Company's business activity and more useful in managing its operations.
(Unaudited) (Unaudited)
(in thousands)
Third Quarter Ended
September 30,Nine Months Ended
September 30,
2010 2009 2010 2009
Revenues:
Staffing services $ 33,954 $ 33,180 $ 92,991 $ 85,224
Professional employer services 298,941 239,872 799,557 663,847
Total revenues 332,895 273,052 892,548 749,071
Cost of revenues:
Direct payroll costs 283,421 231,532 759,690 635,808
Payroll taxes and benefits 24,501 20,399 71,990 62,460
Workers' compensation 10,917 8,980 29,690 37,196
Total cost of revenues 318,839 260,911 861,370 735,464
Gross margin $ 14,056 $ 12,141 $ 31,178 $ 13,607
Gross revenues of $332.9 million for the third quarter ended September 30, 2010 increased 21.9% over the similar period in 2009.
A reconciliation of non-GAAP gross revenues to net revenues is as follows:
For the third quarters ended September 30, 2010 and 2009:
(Unaudited)
Three Months Ended September 30,
(in thousands)Gross Revenue
Reporting Method ReclassificationNet Revenue
Reporting Method
2010 2009 2010 2009 2010 2009
Revenues:
Staffing services $ 33,954 $ 33,180 $ -- $ -- $ 33,954 $ 33,180
Professional employer services 298,941 239,872 (259,019) (207,558) 39,922 32,314
Total revenues $ 332,895 $ 273,052 $ (259,019) $ (207,558) $ 73,876 $ 65,494
Cost of revenues $ 318,839 $ 260,911 $ (259,019) $ (207,558) $ 59,820 $ 53,353
For the nine months ended September 30, 2010 and 2009:
(Unaudited)
Nine Months Ended September 30,
(in thousands)Gross Revenue
Reporting Method Reclassification Net Revenue
Reporting Method
2010 2009 2010 2009 2010 2009
Revenues:
Staffing services $ 92,991 $ 85,224 $ -- $ -- $ 92,991 $ 85,224
Professional employer services 799,557 663,847 (692,980) (575,240) 106,577 88,607
Total revenues $ 892,548 $ 749,071 $ (692,980) $ (575,240) $ 199,568 $ 173,831
Cost of revenues $ 861,370 $ 735,464 $ (692,980) $ (575,240) $ 168,390 $ 160,224
The following summarizes the unaudited consolidated balance sheets at September 30, 2010 and December 31, 2009.
(in thousands) September 30,
2010 December 31,
2009
Assets
Current assets:
Cash and cash equivalents $ 18,261 $ 36,671
Marketable securities 24,227 13,766
Trade accounts receivable, net 56,483 33,070
Income taxes receivable 3,898 4,274
Prepaid expenses and other 1,772 979
Deferred income taxes 4,271 4,071
Total current assets 108,912 92,831
Marketable securities 7,166 7,473
Property, equipment and software, net 14,929 14,795
Restricted marketable securities and workers' compensation deposits 9,305 2,666
Other assets 3,091 3,104
Workers' compensation receivables for insured claims 3,610 3,865
Goodwill, net 47,820 47,338
$ 194,833 $ 172,072
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,042 $ 1,117
Accrued payroll, payroll taxes and related benefits 52,288 30,244
Other accrued liabilities 370 499
Workers' compensation claims liabilities 11,018 10,509
Safety incentives liabilities 4,753 4,437
Total current liabilities 69,471 46,806
Long-term workers' compensation claims liabilities 16,351 14,560
Long-term workers' compensation liabilities for insured claims 2,665 2,729
Deferred income taxes 6,322 6,323
Customer deposits and other long-term liabilities 1,451 1,527
Stockholders' equity 98,573 100,127
$ 194,833 $ 172,072
Outlook for Fourth Quarter 2010
The Company also disclosed today limited financial guidance with respect to its operating results for the fourth quarter ending December 31, 2010. The Company expects gross revenues for the fourth quarter of 2010 to range from $321 million to $326 million, as compared to $270.8 million for the fourth quarter of 2009, and anticipates diluted earnings for the fourth quarter of 2010 to range from $.28 to $.32 per share, as compared to diluted income per share of $.21 for the same period a year ago. A reconciliation of estimated gross revenues to estimated GAAP net revenues for the fourth quarter of 2010 is not included because PEO revenues and cost of PEO revenues for the period are not reasonably estimable.
Conference Call
On Wednesday, October 27 at 9:00 a.m. Pacific Time, William W. Sherertz and James D. Miller will host an investor telephone conference call to discuss third quarter 2010 operating results. To participate in the call, dial (877) 356-3717. The call identification number is 19477114. The conference call will also be webcast live at www.barrettbusiness.com. To access the webcast, click on the Investor Relations section of the Web site and select Webcast. A replay of the call will be available beginning Wednesday, October 27, 2010 at 12:00 p.m. PT and ending on Wednesday, November 3, 2010. To listen to the recording, dial (800) 642-1687 and enter conference identification code 19477114.
Statements in this release about future events or performance, including gross revenues and earnings expectations for the fourth quarter of 2010, 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, the Company's ability to retain current customers and attract new customers, future workers' compensation claims experience, the effect of changes in the workers' compensation regulatory environment in one or more of the Company's primary markets, the collectibility of accounts receivable, and the effect of conditions in the global capital markets on the Company's investment portfolio, among others. Other important factors that may affect the Company's future prospects are described in the Company's 2009 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. The Company undertakes no obligation to update or revise forward-looking statements in this release to reflect events or changes in circumstances that occur after the date of this release.
BBSI provides a comprehensive range of human resource management solutions to large and small companies throughout many regions of the United States.
CONTACT: Barrett Business Services, Inc.
William W. Sherertz, President and Chief Executive Officer
(360) 828-0700
Released October 26, 2010