10-Q: Quarterly report pursuant to Section 13 or 15(d)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM 10-Q


[X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2001
Commission File No. 0-21886


BARRETT BUSINESS SERVICES, INC.
(Exact name of registrant as specified in its charter)

Maryland 52-0812977
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

4724 SW Macadam Avenue
Portland, Oregon 97201
(Address of principal executive offices) (Zip Code)

(503) 220-0988
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes [ X ] No [ ]

Number of shares of Common Stock, $.01 par value, outstanding at April 30, 2001
was 6,260,898 shares.





BARRETT BUSINESS SERVICES, INC.

INDEX

Part I - Financial Information Page
----

Item 1. Financial Statements

Balance Sheets - March 31, 2001 and
December 31, 2000..............................................3

Statements of Operations - Three Months
Ended March 31, 2001 and 2000..................................4

Statements of Cash Flows - Three Months
Ended March 31, 2001 and 2000..................................5

Notes to Financial Statements..................................6

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.....................................................9

Item 3. Quantitative and Qualitative Disclosure About
Market Risk...................................................14


Part II - Other Information

Item 6. Exhibits and Reports on Form 8-K..............................15


Signatures ..............................................................16


Exhibit Index ..............................................................17

2



Part I - Financial Information

Item 1. Financial Statements

BARRETT BUSINESS SERVICES, INC.
Balance Sheets
(Unaudited)
(In thousands, except per share amounts)

March 31, December 31,
2001 2000
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 318 $ 516
Trade accounts receivable, net 16,850 20,660
Prepaid expenses and other 2,099 1,222
Deferred tax assets 2,278 2,702
----------- -----------
Total current assets 21,545 25,100

Intangibles, net 20,444 20,982
Property and equipment, net 6,778 7,177
Restricted marketable securities and workers'
compensation deposits 4,284 4,254
Unrestricted marketable securities 1,326 1,386
Deferred tax assets 1,048 839
Other assets 1,390 1,374
----------- -----------
$ 56,815 $ 61,112
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 2,713 $ 2,939
Line of credit 1,637 2,628
Accounts payable 619 1,013
Accrued payroll, payroll taxes and related benefits 8,018 7,893
Workers' compensation claims and safety incentive
liabilities 4,848 5,274
Other accrued liabilities 420 1,622
----------- -----------
Total current liabilities 18,255 21,369

Long-term debt, net of current portion 1,051 1,508
Customer deposits 534 614
Long-term workers' compensation claims liabilities 678 682
Other long-term liabilities 2,070 2,022
----------- -----------
22,588 26,195
----------- -----------

Commitments and contingencies

Stockholders' equity:
Common stock, $.01 par value; 20,500 shares authorized,
6,321 and 6,451 shares issued and outstanding 63 64
Additional paid-in capital 4,909 5,387
Retained earnings 29,255 29,466
----------- -----------
34,227 34,917
----------- -----------
$ 56,815 $ 61,112
=========== ===========
The accompanying notes are an integral part of these financial statements

3



BARRETT BUSINESS SERVICES, INC.
Statements of Operations
(Unaudited)
(In thousands, except per share amounts)

Three Months Ended
March 31,
----------------------
2001 2000
---------- ----------
Revenues:
Staffing services $ 31,272 $ 47,767
Professional employer services 23,881 39,355
--------- ---------
55,153 87,122
--------- ---------
Cost of revenues:
Direct payroll costs 42,760 68,004
Payroll taxes and benefits 4,874 7,918
Workers' compensation 2,177 2,597
--------- ---------
49,811 78,519
--------- ---------
Gross margin 5,342 8,603

Selling, general and administrative expenses 4,876 6,485
Depreciation and amortization 829 731
--------- ---------
(Loss) income from operations (363) 1,387
--------- ---------
Other (expense) income:
Interest expense (121) (221)
Interest income 81 86
Other, net 47 3
--------- ---------
7 (132)
--------- ---------
(Loss) income before provision for income taxes (356) 1,255
(Benefit from) provision for income taxes (145) 511
--------- ---------
Net (loss) income $ (211) $ 744
========= =========
Basic (loss) earnings per share $ (.03) $ .10
========= =========
Weighted average number of basic shares outstanding 6,400 7,459
========= =========
Diluted (loss) earnings per share $ (.03) $ .10
========= =========
Weighted average number of diluted shares outstanding 6,400 7,509
========= =========

The accompanying notes are an integral part of these financial statements.

4



BARRETT BUSINESS SERVICES, INC.
Statements of Cash Flows
(Unaudited)
(In thousands)


Three Months Ended
March 31,
------------------
2001 2000
-------- --------
Cash flows from operating activities:
Net (loss) income $ (211) $ 744
Reconciliations of net (loss) income to cash
from operations:
Depreciation and amortization 829 731
Gain on sale of property (46) -
Changes in certain assets and liabilities:
Trade accounts receivable, net 3,810 (1,352)
Prepaid expenses and other (877) 24
Deferred tax assets 215 (8)
Accounts payable (394) 26
Accrued payroll, payroll taxes and related benefits 125 (200)
Workers' compensation claims and safety incentive
liabilies (426) (242)
Income taxes payable - 282
Other accrued liabilities (1,202) 150
Customer deposits and long-term workers'
compensation liabilities and other assets, net (100) (300)
Other long-term liabilities 48 190
---------- ----------
Net cash provided by operating activities 1,771 45
---------- ----------
Cash flows from investing activities:
Cash paid for acquisitions, including other
direct costs - (67)
Proceeds from sale of property 266 -
Purchase of fixed assets (112) (700)
Proceeds from maturities of marketable securities 135 -
Purchase of marketable securities (105) (36)
---------- ----------
Net cash provided by (used in) investing activities 184 (803)
---------- ----------

Cash flows from financing activities:
Net (payments on) proceeds from credit-line borrowings (991) 1,123
Payments on long-term debt (683) (698)
Repurchase of common stock (479) (19)
---------- ----------
Net cash (used in) provided by financing activities (2,153) 406
---------- ----------
Net decrease in cash and cash equivalents (198) (352)

Cash and cash equivalents, beginning of period 516 550
---------- ----------
Cash and cash equivalents, end of period $ 318 $ 198
========== ==========

The accompanying notes are an integral part of these financial statements.

5


BARRETT BUSINESS SERVICES, INC.
Notes to Financial Statements

Note 1 - Basis Of Presentation Of Interim Period Statements:

The accompanying financial statements are unaudited and have been prepared
by Barrett Business Services, Inc. (the "Company") pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
note disclosures typically included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such rules and regulations.
In the opinion of management, the financial statements include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair statement
of the results for the interim periods presented. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results may differ from
such estimates and assumptions. The financial statements should be read in
conjunction with the audited financial statements and notes thereto included in
the Company's 2000 Annual Report on Form 10-K at pages F1-F20. The results of
operations for an interim period are not necessarily indicative of the results
of operations for a full year.


Note 2 - Provision For Income Taxes:

Deferred tax assets (liabilities) are comprised of the following
components (in thousands):

March 31, December 31,
2001 2000
----------- -----------

Gross deferred tax assets:
Workers' compensation claims and safety
incentive liabilities $ 2,115 $ 2,206
Allowance for doubtful accounts 101 205
Amortization of intangibles 548 519
Deferred compensation 422 408
Other 240 289
----------- -----------
3,426 3,627
----------- -----------
Gross deferred tax liabilities:
Tax depreciation in excess of book
depreciation (100) (86)
----------- -----------
Net deferred tax assets $ 3,326 $ 3,541
=========== ===========



6



BARRETT BUSINESS SERVICES, INC.
Notes to Financial Statements (Continued)


Note 2 - Provision For Income Taxes (Continued):

The provision for income taxes for the three months ended March 31, 2001
and 2000 is as follows (in thousands):

Three Months Ended
March 31,
--------------------
2001 2000
--------- ---------
Current:
Federal $ (351) $ 383
State (9) 120
--------- ---------
(360) 503
--------- ---------
Deferred:
Federal 182 9
State 33 (1)
--------- ---------
215 8
--------- ---------
(Benefit from) provision for income taxes $ (145) $ 511
========= =========

Note 3 - Stock Incentive Plan:

The Company has a Stock Incentive Plan (the "Plan") which provides for
stock-based awards to the Company's employees, directors and outside consultants
or advisers. The number of shares of common stock reserved for issuance under
the Plan is 1,550,000.

The following table summarizes options granted under the Plan in 2000:


Outstanding at December 31, 2000 955,662 $1.93 to $17.94

Options granted 82,173 $1.45 to $ 3.75
Options exercised -
Options canceled or expired (13,325) $6.50 to $ 8.91
---------

Outstanding at March 31, 2001 1,024,510 $1.45 to $17.94
---------

Exercisable at March 31, 2001 677,742
---------

Available for grant at March 31, 2001 301,056
---------


The options listed in the table generally become exercisable in four equal
annual installments beginning one year after the date of grant.


7

BARRETT BUSINESS SERVICES, INC.
Notes to Financial Statements (Continued)

Note 3 - Stock Incentive Plan (Continued):

Certain of the Company's zone and branch management employees elect to
receive a portion of their quarterly cash profit sharing distribution in the
form of nonqualified deferred compensation stock options. Such options are
awarded at a sixty percent discount from the then-fair market value of the
Company's stock and are fully vested and immediately exercisable upon grant.
Such discounts are recorded as compensation expense. The amount of the grantee's
deferred compensation (discount from fair market value) is subject to market
risk. During the first quarter of 2001, the Company awarded deferred
compensation stock options for 7,811 shares at an exercise price of $1.45 per
share.


8


BARRETT BUSINESS SERVICES, INC.


Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations

Results of Operations

The following table sets forth the percentages of total revenues
represented by selected items in the Company's Statements of Operations for the
three months ended March 31, 2001 and 2000.

Percentage of
Total Revenues
Three Months Ended
March 31,
-------------------
2001 2000
--------- -------
Revenues:
Staffing services 56.7 % 54.8 %
Professional employer services 43.3 45.2
--------- -------
100.0 100.0
--------- -------
Cost of revenues:
Direct payroll costs 77.5 78.0
Payroll taxes and benefits 8.8 9.1
Workers' compensation 4.0 3.0
--------- -------
Total cost of revenues 90.3 90.1
--------- -------

Gross margin 9.7 9.9

Selling, general and administrative expenses 8.9 7.4
Depreciation and amortization 1.5 0.9
--------- -------

(Loss) income from operations (0.7) 1.6

Other income (expense) - (0.1)
--------- -------

(Loss) income before provision for income taxes (0.7) 1.5

(Benefit from) provision for income taxes (0.3) 0.6
--------- -------

Net (loss) income (0.4)% 0.9 %
========= =======


Three months ended March 31, 2001 and 2000

Net loss for the first quarter of 2001 was $211,000, a decline of $955,000
from net income of $744,000 for the first quarter of 2000. The decline for the
first quarter of 2001 was attributable to lower gross margin dollars as a result
of a 36.7% decrease in revenue, offset in part by lower selling, general and
administrative expenses. Basic and diluted loss per share for the first quarter
of 2001 were $(.03), as compared to basic and diluted earnings per share of $.10
for the first quarter of 2000.

9


Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)

Results of Operations (Continued)

Revenues for the first quarter of 2001 totaled approximately $55.2
million, a decrease of approximately $31.9 million or 36.7% from the first
quarter of 2000. The decrease in revenues reflects the general softening of
business conditions in the Company's market areas, particularly in the Company's
Northern California operations, which accounted for nearly 50% of the decline in
total revenues. The Company's Northern California operations have been adversely
affected by the significant downturn in the "high-tech" industry and related
sectors.

Staffing services revenue decreased approximately $16.5 million or 34.5%
primarily due to a decline in demand for personnel in the majority of areas in
which the Company does business. Professional employer ("PEO") services revenue
decreased approximately $15.5 million or 39.3%, which was primarily due to a
65.5% decline in the Company's Northern California region. The decline in PEO
revenues for Northern California from a year ago was due in large part to
management's decision to discontinue its services to a few high volume, low
margin customers. The decrease in PEO services revenue resulted in an increase
in the share of staffing services from 54.8% of total revenues for the first
quarter of 2000 to 56.7% for the first quarter of 2001. The share of revenues
for PEO services had a corresponding decrease from 45.2% of total revenues for
the first quarter of 2000 to 43.3% for the first quarter of 2001.

Gross margin for the first quarter of 2001 totaled approximately $5.3
million, which represented a decrease of $3.3 million or 37.9% from the first
quarter of 2000 primarily resulting from the 36.7% decline in revenues
experienced in the first quarter of 2001. The gross margin percent decreased
from 9.9% of revenues for the first quarter of 2000 to 9.7% for the first
quarter of 2001. The decrease in the gross margin percentage was due to higher
workers' compensation expense, offset in part by lower direct payroll costs and
lower payroll taxes and benefits. Workers' compensation expense for the first
quarter of 2001 totaled $2.2 million or 4.0% of revenues, which compares to $2.6
million or 3.0% of revenues for the first quarter of 2000. The increase in the
percentage of revenues for workers' compensation expense was primarily
attributable to higher estimates for the cost of claims. The decrease in direct
payroll costs, as a percentage of revenues, for the first quarter of 2001 was
primarily due to substantial decreases in contract staffing, on-site management
and PEO business, which generally have a lower mark-up rate (and thus higher
direct payroll costs as a percentage of revenues) relative to other services
provided by the Company. The decline in payroll taxes and benefits, as a
percentage of revenues for the first quarter of 2001, was primarily due to a
reduction in state unemployment tax rates in various states in which the Company
operates.

Selling, general and administrative ("SG&A") expenses for the 2001 first
quarter amounted to approximately $4.9 million, a decrease of $1.6 million or
24.8% from the comparable period in 2000. SG&A expenses, expressed as a
percentage of revenues, increased from 7.4% for the first quarter of 2000 to
8.9% for the first quarter of 2001. The decrease in total dollars from 2000 was
primarily attributable to branch office reductions in management personnel and
related expenses.

Depreciation and amortization totaled $829,000 or 1.5% of revenues for the
first quarter of 2001, which compares to $731,000 or 0.9% of revenues for the
same period in 2000. The increased expense was primarily due to recognizing a
full quarter of expense in the 2001 first quarter as a result of the March 1,
2000 implementation of the Company's new information system.

10

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)

Results of Operations (Continued)

Other income totaled $7,000 for the first quarter of 2001, which compares
to $132,000 of other expense for the first quarter of 2000. The increase in
other income was primarily attributable to a reduction in net interest expense
due to lower debt levels during the first quarter of 2001 as compared to the
same quarter of 2000.

The Company offers various qualified employee benefit plans to its
employees, including its worksite employees. These qualified employee benefit
plans include a savings plan under Section 401(k) of the Internal Revenue Code
(the "Code"), a cafeteria plan under Code Section 125, a group health plan, a
group life insurance plan, a group disability insurance plan and an employee
assistance plan. Generally, qualified employee benefit plans are subject to
provisions of both the Code and the Employee Retirement Income Security Act
("ERISA"). In order to qualify for favorable tax treatment under the Code,
qualified plans must be established and maintained by an employer for the
exclusive benefit of its employees. In the event the tax exempt status of the
Company's benefit plans were to be discontinued and the benefit plans were to be
disqualified, such actions could have a material adverse effect on the Company's
business, financial condition and results of operations. Reference is made to
pages 18-19 of the Company's 2000 Annual Report on Form 10-K for a more detailed
discussion of this issue.

Fluctuations in Quarterly Operating Results

The Company has historically experienced significant fluctuations in its
quarterly operating results and expects such fluctuations to continue in the
future. The Company's operating results may fluctuate due to a number of factors
such as seasonality, wage limits on payroll taxes, claims experience for
workers' compensation, demand and competition for the Company's services and the
effect of acquisitions. The Company's revenue levels fluctuate from quarter to
quarter primarily due to the impact of seasonality on its staffing services
business and on certain of its PEO clients in the agriculture and forest
products-related industries. As a result, the Company may have greater revenues
and net income in the third and fourth quarters of its fiscal year. Payroll
taxes and benefits fluctuate with the level of direct payroll costs, but tend to
represent a smaller percentage of revenues and direct payroll later in the
Company's fiscal year as federal and state statutory wage limits for
unemployment and social security taxes are exceeded by some employees. Workers'
compensation expense varies with both the frequency and severity of workplace
injury claims reported during a quarter, as well as adverse loss development of
prior period claims during a subsequent quarter.

Liquidity and Capital Resources

The Company's cash position of $318,000 at March 31, 2001 decreased by
$198,000 from December 31, 2000, which compares to a decrease of $352,000 for
the comparable period in 2000. The decrease in cash at March 31, 2001, as
compared to December 31, 2000, was primarily attributable to cash used for
payments on credit-line borrowings, payments on long-term debt and for
repurchases of the Company's common stock, partially offset by cash provided by
operating activities.


11


Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)

Liquidity and Capital Resources (Continued)

Net cash provided by operating activities for the three months ended March
31, 2001 amounted to $1,771,000, as compared to $45,000 for the comparable 2000
period. For the 2001 period, cash flow was generated by a $3,810,000 decrease in
trade accounts receivable, together with depreciation and amortization, offset
in part by a decrease in other accrued liabilities and an increase in prepaid
expenses and other.

Net cash provided by investing activities totaled $184,000 for the three
months ended March 31, 2001, as compared to $803,000 net cash used in investing
activities for the similar 2000 period. For the 2001 period, the principal
source of cash provided by investing activities was from net proceeds of
$266,000 associated with the sale of a Company-owned office condominium, offset
in part by purchases of office equipment. The Company presently has no material
long-term capital commitments.

Net cash used in financing activities for the three-month period ended
March 31, 2001 was $2,153,000 which compared to $406,000 net cash provided by
financing activities for the similar 2000 period. For the 2001 period, the
principal use of cash for financing activities was $991,000 of net payments on
credit-line borrowings, $683,000 of payments made on long-term debt, primarily
the $8,000,000 three-year term loan in connection with the Company's acquisition
of TSU in 1999, and $479,000 used to repurchase the Company's common stock.

The Company's business strategy continues to focus on growth through the
expansion of operations at existing offices, together with the selective
acquisition of additional personnel-related businesses, both in its existing
markets and other strategic geographic areas. The Company actively explores
proposals for various acquisition opportunities on an ongoing basis, but there
can be no assurance that any additional transactions will be consummated.

The Company maintains a credit arrangement (the "Agreement") with its
principal bank. Effective March 12, 2001, the principal terms and conditions of
this Agreement, which expires May 31, 2001, was amended to include (1) a
reduction in the total amount available under the revolving credit facility from
$15 million to the lesser of (i) $13 million or (ii) 65 percent of total trade
accounts receivable at the end of any fiscal quarter, and (2) a security
interest in all trade accounts receivable. This Agreement also includes a
subfeature for standby letters of credit in connection with certain workers'
compensation surety arrangements, as to which approximately [$2.6 million] were
outstanding as of March 31, 2001. Due to the bank's secured position, the bank
agreed to reduce the restrictiveness of certain financial covenants. The Company
was in compliance with the financial covenants of the Agreement, as amended, at
March 31, 2001. Management expects that the funds anticipated to be generated
from operations, together with the bank-provided credit facility and other
potential sources of financing, will be sufficient in the aggregate to fund the
Company's working capital needs for the foreseeable future. Manage-ment expects
this arrangement to be renewed with its current principal bank on terms and
conditions that are not materially less favorable to the Company than the
present terms. If, however, the terms and conditions for renewal are
unacceptable to the Company, management will seek the most favorable terms
available in the market.

12


Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)

Liquidity and Capital Resources (Continued)

In February 1999, the Company's Board of Directors authorized a stock
repurchase program to repurchase common shares from time to time in open market
purchases. Since inception, the Board of Directors has approved five increases
in the total number of shares or dollars authorized to be repurchased under the
program. As of March 31, 2001, the repurchase program had authorized
availability of $1,104,000 for the repurchase of additional shares. During the
first quarter of 2001, the Company repurchased 129,800 shares at an aggregate
price of $479,000. Since the inception of the repurchase program through May 10,
2001, the Company has repurchased 1,426,200 shares for an aggregate price of
$6,760,000. Management anticipates that the capital necessary to execute this
program will be provided by existing cash balances and other available
resources.

Inflation

Inflation generally has not been a significant factor in the Company's
operations during the periods discussed above. The Company has taken into
account the impact of escalating medical and other costs in establishing
reserves for future expenses for self-insured workers' compensation claims.

Forward-Looking Information

Statements in this report which are not historical in nature, including
discussion of economic conditions in the Company's market areas, the potential
for and effect of recent and future acquisitions, the effect of changes in the
Company's mix of services on gross margin, the adequacy of the Company's
workers' compensation reserves and allowance for doubtful accounts, the
effectiveness of the Company's management information systems, the tax-qualified
status of the Company's 401(k) savings plan and the availability of financing
and working capital to meet the Company's funding requirements, are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the Company or industry results to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors with
respect to the Company include difficulties associated with integrating acquired
businesses and clients into the Company's operations, economic trends in the
Company's service areas, the effect of power shortages in California and the
Pacific Northwest on the Company's customers, uncertainties regarding government
regulation of PEOs, including the possible adoption by the IRS of an unfavorable
position as to the tax-qualified status of employee benefit plans maintained by
PEOs, future workers' compensation claims experience, and the availability of
and costs associated with potential sources of financing. The Company disclaims
any obligation to update any such factors or to publicly announce the result of
any revisions to any of the forward-looking statements contained herein to
reflect future events or developments.



13


Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company's exposure to market risk for changes in interest rates
primarily relates to the Company's short-term and long-term debt obligations. As
of March 31, 2001, the Company had interest-bearing debt obligations of
approximately $6.6 million, of which approximately $5.0 million bears interest
at a variable rate and approximately $1.6 million at a fixed rate of interest.
The variable rate debt is comprised of approximately $1.6 million outstanding
under a secured revolving credit facility, which bears interest at the prime
rate less 1.70%. The Company also has a secured three-year term note with its
principal bank, which bears interest at LIBOR plus 1.35%. Based on the Company's
overall interest exposure at March 31, 2001, a 10 percent change in market
interest rates would not have a material effect on the fair value of the
Company's long-term debt or its results of operations. As of March 31, 2001, the
Company had not entered into any interest rate instruments to reduce its
exposure to interest rate risk.



14


Part II - Other Information


Item 6. Exhibits and Reports on Form 8-K

(a) The exhibits filed herewith are listed in the Exhibit Index
following the signature page of this report.

(b) No Current Reports on Form 8-K were filed by the Registrant
during the quarter ended March 31, 2001.


15


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

BARRETT BUSINESS SERVICES, INC.
(Registrant)






Date: May 14, 2001 By: /s/ Michael D. Mulholland
-----------------------------
Michael D. Mulholland
Vice President - Finance
(Principal Financial Officer)


16


EXHIBIT INDEX


Exhibit

11 Statement of Calculation of Basic and Diluted Common Shares Outstanding


17