BBSI Announces Fourth Quarter 2009 Operating Results, Financial Guidance for 1Q10, Declaration of Quarterly Cash Dividend and Conference Call

VANCOUVER, Wash., Feb. 9, 2010 (GLOBE NEWSWIRE) -- Barrett Business Services, Inc. (Nasdaq:BBSI) reported today net income of $2.2 million compared to net income of $2.3 million for the fourth quarter of 2008. Diluted earnings per share for the 2009 fourth quarter were $.21, as compared to diluted earnings per share of $.21 for the same quarter a year ago.

Net revenues for the fourth quarter ended December 31, 2009 totaled $62.6 million, a decrease of approximately $2.0 million or 3.1% from the $64.6 million for the same quarter in 2008.

                                        (Unaudited)           (Unaudited)
  (in thousands, except per share
   amounts)                        Fourth Quarter Ended       Year Ended

                                       December 31,           December 31,
                                   --------------------  ---------------------

  Results of Operations               2009       2008       2009        2008
  -------------------------------  -----------  -------  -----------  --------
  Revenues:
   Staffing services                   $30,931  $33,674     $116,155  $154,565
   Professional employer service
    fees                                31,698   30,956      120,305   125,903
                                   -----------  -------  -----------  --------

    Total revenues                      62,629   64,630      236,460   280,468
                                   -----------  -------  -----------  --------
  Cost of revenues:
   Direct payroll costs                 23,388   25,173       87,679   114,440
   Payroll taxes and benefits           19,617   19,164       82,077    85,531

   Workers' compensation                 7,636    8,208       41,109    30,887
                                   -----------  -------  -----------  --------

    Total cost of revenues              50,641   52,545      210,865   230,858
                                   -----------  -------  -----------  --------
  Gross margin                          11,988   12,085       25,595    49,610
  Selling, general and
   administrative expenses               8,689    8,813       33,481    36,654

  Depreciation and amortization            423      393        1,641     1,536
                                   -----------  -------  -----------  --------
  Income (loss) from operations          2,876    2,879      (9,527)    11,420
  Loss on impairment of
   investments                              --       --           --   (3,483)

  Other income, net                        267      376        1,640     2,054
                                   -----------  -------  -----------  --------
  Income (loss) before taxes             3,143    3,255      (7,887)     9,991
  Provision for (benefit from)
   income taxes                            950      983      (3,119)     3,728
                                   -----------  -------  -----------  --------

  Net income (loss)                     $2,193   $2,272     $(4,768)    $6,263
                                   -----------  -------  -----------  --------

  Basic earnings (loss) per share         $.21     $.21       $(.46)      $.58
                                   -----------  -------  -----------  --------
  Weighted average basic shares
   outstanding                          10,480   10,638       10,452    10,861
                                   -----------  -------  -----------  --------
  Diluted earnings (loss) per
   share                                  $.21     $.21       $(.46)      $.56
                                   -----------  -------  -----------  --------
  Weighted average diluted shares
   outstanding                          10,497   10,837       10,452    11,120
                                   -----------  -------  -----------  --------

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)
                             Fourth Quarter Ended        Year Ended

  (in thousands)                 December 31,           December 31,
                             --------------------  ----------------------

                                2009       2008       2009         2008
                             -----------  -------  -----------  ---------
  Revenues:
   Staffing services             $30,931  $33,674     $116,155   $154,565
   Professional employer
    services                     239,884  229,449      903,731    926,028
                             -----------  -------  -----------  ---------

    Total revenues               270,815  263,123    1,019,886  1,080,593
                             -----------  -------  -----------  ---------
  Cost of revenues:
   Direct payroll costs          230,359  222,274      866,167    908,410
   Payroll taxes and
    benefits                      19,617   19,164       82,077     85,531

   Workers' compensation           8,851    9,600       46,047     37,042
                             -----------  -------  -----------  ---------

    Total cost of revenues       258,827  251,038      994,291  1,030,983
                             -----------  -------  -----------  ---------

  Gross margin                   $11,988  $12,085      $25,595    $49,610
                             -----------  -------  -----------  ---------

Gross revenues of $270.8 million for the fourth quarter ended December 31, 2009 increased 2.9% over the similar period in 2008.

A reconciliation of non-GAAP gross revenues to net revenues is as follows:

For the fourth quarters ended December 31, 2009 and 2008:

                                                       (Unaudited)

                                             Three Months Ended December 31,
                         -----------------------------------------------------------------------
                             Gross Revenue                                       Net Revenue

  (in thousands)            Reporting Method          Reclassification         Reporting Method
                         ---------------------  ----------------------------  ------------------

                            2009        2008          2009           2008        2009     2008
                         -----------  --------  ----------------  ----------  ---------  -------
  Revenues:
   Staffing services         $30,931   $33,674               $--         $--    $30,931  $33,674
   Professional

    employer services        239,884   229,449         (208,186)   (198,493)     31,698   30,956
                         -----------  --------  ----------------  ----------  ---------  -------

    Total revenues          $270,815  $263,123        $(208,186)  $(198,493)    $62,629  $64,630
                         -----------  --------  ----------------  ----------  ---------  -------

  Cost of revenues          $258,827  $251,038        $(208,186)  $(198,493)    $50,641  $52,545
                         -----------  --------  ----------------  ----------  ---------  -------

For the years ended December 31, 2009 and 2008:

                                                        (Unaudited)

                                                  Year Ended December 31,
                         --------------------------------------------------------------------------
                              Gross Revenue                                         Net Revenue

  (in thousands)            Reporting Method            Reclassification         Reporting Method
                         -----------------------  ----------------------------  -------------------

                            2009         2008           2009           2008        2009      2008
                         -----------  ----------  ----------------  ----------  ---------  --------
  Revenues:
   Staffing services        $116,155    $154,565               $--         $--   $116,155  $154,565
   Professional

    employer services        903,731     926,028         (783,426)   (800,125)    120,305   125,903
                         -----------  ----------  ----------------  ----------  ---------  --------

    Total revenues        $1,019,886  $1,080,593        $(783,426)  $(800,125)   $236,460  $280,468
                         -----------  ----------  ----------------  ----------  ---------  --------

  Cost of revenues          $994,291  $1,030,983        $(783,426)  $(800,125)   $210,865  $230,858
                         -----------  ----------  ----------------  ----------  ---------  --------

The following summarizes the unaudited consolidated balance sheets at December 31, 2009 and December 31, 2008.

                                  December  December
                                     31,       31,

  (in thousands)                    2009      2008
                                  --------  --------

  Assets
  ------------------------------
  Current assets:
   Cash and cash equivalents       $36,671   $42,214
   Marketable securities            13,766    17,968
   Trade accounts receivable,
    net                             33,070    34,389
   Income taxes receivable           4,274        --
   Prepaid expenses and other          979     1,440
   Deferred income taxes             4,071     2,373
   Workers' compensation
    receivables for insured
    claims                             225       225
                                  --------  --------
    Total current assets            93,056    98,609
  Marketable securities              7,473       427
  Goodwill, net                     47,338    47,338
  Property, equipment and
   software, net                    14,795    15,503
  Restricted marketable
   securities and workers'
   compensation deposits             2,666     2,701
  Other assets                       3,104     1,645
  Workers' compensation
   receivables for insured
   claims                            3,640     3,837
                                  --------  --------

                                  $172,072  $170,060
                                  --------  --------


  Liabilities and Stockholders'
   Equity
  ------------------------------
  Current liabilities:
   Accounts payable                 $1,117      $881
   Accrued payroll, payroll
    taxes and related benefits      30,244    32,296
   Other accrued liabilities           499       902
   Workers' compensation claims
    liabilities                     10,509     7,186
   Workers' compensation claims
    liabilities for insured
    claims                             225       225

   Safety incentives liabilities     4,437     4,626
                                  --------  --------
    Total current liabilities       47,031    46,116
  Customer deposits                    600       706
  Long-term workers'
   compensation claims
   liabilities                      14,560     5,235
  Long-term workers'
   compensation liabilities for
   insured claims                    2,504     2,438
  Deferred income taxes              6,323     4,394
  Other long-term liabilities          500        --
  Deferred gain on sale and
   leaseback                           427       549

  Stockholders' equity             100,127   110,622
                                  --------  --------

                                  $172,072  $170,060
                                  --------  --------

Outlook for First Quarter 2010

The Company also disclosed today limited financial guidance with respect to its operating results for the first quarter ending March 31, 2010. The Company expects gross revenues for the first quarter of 2010 to range from $258 million to $262 million, as compared to $227.9 million for the first quarter of 2009, and anticipates diluted loss per share for the first quarter of 2010 to range from $.19 to $.22 per share, as compared to a diluted loss per share of $.30 for the same period a year ago. A reconciliation of estimated gross revenues to estimated GAAP net revenues for the first quarter of 2010 is not included because PEO revenues and cost of PEO revenues for the period are not reasonably estimable.

Declaration of Quarterly Cash Dividend

The Company's board of directors declared a regular quarterly cash dividend of $0.08 per share. The cash dividend will be paid on March 12, 2010 to all stockholders of record as of February 26, 2010.

Conference Call

On February 10 at 9:00 a.m. Pacific Time, William W. Sherertz and James D. Miller will host an investor telephone conference call to discuss fourth quarter 2009 operating results. To participate in the call, dial (877) 356-3717. The call identification number is 55213927. 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, February 10, 2010 at 12:00 p.m. PT and ending on Wednesday, February 17, 2010. To listen to the recording, dial (800) 642-1687 and enter conference identification code 55213927.

Statements in this release about future events or performance, including gross revenues and earnings expectations for the first 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 successfully integrate acquired businesses with its existing operations, future workers' compensation claims experience, the effect of changes in the workers' compensation regulatory environment in one or more of its 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 2008 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