EXHIBIT 99.1
NEWS RELEASE
For Immediate Release Contact: William W. Sherertz
President and
Chief Executive Officer
Telephone: (503) 220-0988
BARRETT BUSINESS SERVICES, INC.
ANNOUNCES FOURTH QUARTER 2003 OPERATING RESULTS AND
SCHEDULES INVESTOR CONFERENCE CALL
PORTLAND, OREGON, February 5, 2004 - Barrett Business Services, Inc.
(Nasdaq trading symbol: BBSI) reported today net income of $1,318,000 for the
fourth quarter ended December 31, 2003, an improvement of $2.3 million over a
net loss of $993,000 for the fourth quarter of 2002. Diluted income per share
for the 2003 fourth quarter was $.22, as compared to a diluted loss per share of
$(.17) for the 2002 fourth quarter.
Net revenues for the fourth quarter ended December 31, 2003 totaled $36.6
million, an increase of approximately $10.9 million or 42.5% over the $25.7
million for the same quarter in 2002. Total net revenues for 2003 amounted to
$122.7 million, an increase of 12.3% over 2002.
(Unaudited) (Unaudited)
Fourth Quarter Ended Year Ended
December 31, December 31,
--------------------- ---------------------
Results of Operations 2003 2002 2003 2002
- ------------------------------------------- --------- --------- --------- ---------
(in thousands, except per share amounts)
Revenues:
Staffing services $ 23,661 $ 22,561 $ 93,544 $ 96,750
Professional employer service fees 12,988 3,153 29,177 12,558
--------- --------- --------- ---------
Total revenues 36,649 25,714 122,721 109,308
--------- --------- --------- ---------
Cost of revenues:
Direct payroll costs 17,482 16,674 69,099 71,515
Payroll taxes and benefits 8,545 3,223 22,916 14,062
Workers' compensation 3,425 3,364 9,333 8,766
--------- --------- --------- ---------
Total cost of revenues 29,452 23,261 101,348 94,343
--------- --------- --------- ---------
Gross margin 7,197 2,453 21,373 14,965
Selling, general and administrative expenses 5,139 3,753 17,186 16,008
Depreciation and amortization 251 280 1,058 1,162
--------- --------- --------- ---------
Income (loss) from operations 1,807 (1,580) 3,129 (2,205)
Other (expense) income, net (18) (46) (154) (40)
--------- --------- --------- ---------
Income (loss) before taxes 1,789 (1,626) 2,975 (2,245)
Provision for (benefit from) income taxes 471 (633) 890 (892)
--------- --------- --------- ---------
Net income (loss) $ 1,318 $ (993) $ 2,085 $ (1,353)
========= ========= ========= =========
Basic income (loss) per share $ .23 $ (.17) $ .36 $ (.23)
========= ========= ========= =========
Weighted average basic shares outstanding 5,660 5,787 5,690 5,804
========= ========= ========= =========
Diluted income (loss) per share $ .22 $ (.17) $ .35 $ (.23)
========= ========= ========= =========
Weighted average diluted shares outstanding 6,088 5,787 5,876 5,804
========= ========= ========= =========
The Company changed its reporting of PEO revenues from a gross basis to a
net basis in 2002 because it was determined that the Company was not the primary
obligor for the services provided by employees pursuant to its PEO contracts.
The gross revenues and cost of revenues information below,
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Barrett Business Services, Inc.
News Release - Fourth Quarter 2003
February 5, 2004
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,
--------------------- ---------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Revenues:
Staffing services $ 23,661 $ 22,561 $ 93,544 $ 96,750
Professional employer services 77,366 18,683 173,134 73,952
--------- --------- --------- ---------
Total revenues $101,027 $ 41,244 $266,678 $170,702
--------- --------- --------- ---------
Cost of revenues:
Direct payroll costs $ 80,510 $ 32,204 $210,785 $132,909
Payroll taxes and benefits 8,545 3,223 22,916 14,062
Workers' compensation 4,775 3,364 11,604 8,766
--------- --------- --------- ---------
Total cost of revenues 93,830 38,791 245,305 155,737
--------- --------- --------- ---------
Gross margin $ 7,197 $ 2,453 $ 21,373 $ 14,965
========= ========= ========= =========
A reconciliation of non-GAAP gross revenues to net revenues is as follows:
For the fourth quarters ended December 31, 2003 and 2002 (in thousands):
Gross Revenue Net Revenue
Reporting Method Reclassification Reporting Method
---------------------- ----------------------- ----------------------
2003 2002 2003 2002 2003 2002
--------- --------- ---------- ---------- --------- ---------
Revenues:
Staffing services $ 23,661 $ 22,561 $ - $ - $ 23,661 $ 22,561
Professional
employer
services 77,366 18,683 (64,378) (15,530) 12,988 3,153
--------- --------- ---------- ---------- --------- ---------
Total revenues $101,027 $ 41,244 $(64,378) $(15,530) $ 36,649 $ 25,714
========= ========= ========== ========== ========= =========
Cost of revenues: $ 93,830 $ 38,791 $(64,378) $(15,530) $ 29,452 $ 23,261
========= ========= ========== ========== ========= =========
For the years ended December 31, 2003 and 2002 (in thousands):
Gross Revenue Net Revenue
Reporting Method Reclassification Reporting Method
---------------------- ----------------------- ----------------------
2003 2002 2003 2002 2003 2002
--------- --------- ---------- ---------- --------- ---------
Revenues:
Staffing services $ 93,544 $ 96,750 $ - $ - $ 93,544 $ 96,750
Professional
employer
services 173,134 73,952 (143,957) (61,394) 29,177 12,558
--------- --------- ---------- ---------- --------- ---------
Total revenues $266,678 $170,702 $(143,957) $ (61,394) $122,721 $109,308
========= ========= ========== ========== ========= =========
Cost of revenues: $245,305 $155,737 $(143,957) $ (61,394) $101,348 $ 94,343
========= ========= ========== ========== ========= =========
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Barrett Business Services, Inc.
News Release - Fourth Quarter 2003
February 5, 2004
William W. Sherertz, President and Chief Executive Officer, commented
that: "We are very pleased with achieving a new milestone for the Company with
$101 million in total gross revenues for the fourth quarter. We believe that the
momentum generated by our expanding customer base portends improved operating
results in 2004."
The following summarizes the unaudited balance sheets at December 31, 2003
and December 31, 2002.
($ in thousands) December 31, December 31,
2003 2002
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 7,785 $ 96
Income taxes receivable - 1,923
Trade accounts receivable, net 18,381 11,357
Prepaid expenses and other 958 1,040
Deferred income taxes 2,125 2,111
--------- ---------
Total current assets 29,249 16,527
Goodwill, net 18,749 18,749
Intangibles, net 13 59
Property, equipment and software, net 3,367 5,167
Restricted marketable securities and workers' compensation
deposits 1,647 4,286
Deferred income taxes 1,041 1,445
Other assets 436 1,064
--------- ---------
$ 54,502 $ 47,297
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 88 $ 434
Line of credit payable - 3,513
Income taxes payable 297 -
Accounts payable 727 834
Accrued payroll, payroll taxes and related benefits 13,881 4,897
Workers' compensation claims liabilities 3,555 3,903
Safety incentives payable 2,007 406
Other accrued liabilities 361 305
Current portion of deferred gain on sale and leaseback 122 -
--------- ---------
Total current liabilities 21,038 14,292
Long-term debt, net of current portion 400 488
Customer deposits 455 443
Long-term workers' compensation claims liabilities 1,031 2,492
Other long-term liabilities 45 797
Long-term deferred gain on sale and leaseback 1,036 -
Stockholders' equity 30,497 28,785
--------- ---------
$ 54,502 $ 47,297
========= =========
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Barrett Business Services, Inc.
News Release - Fourth Quarter 2003
February 5, 2004
On February 6, 2004 at 9:00 a.m. Pacific Time, William W. Sherertz and
Michael D. Mulholland will host an investor telephone conference call to discuss
fourth quarter 2003 operating results. To participate in the call, dial
(877)356-3717 shortly before 9:00 a.m. Pacific Time on February 6, 2004. The
call identification number is 5399009. A recording of the call will be available
beginning February 6, 2004 at 11:00 a.m. and ending February 13, 2004. To listen
to the recording, dial (800)642-1687 and enter conference identification code
5399009.
Barrett Business Services, Inc. is a human resource management company
with offices in eight states, which serve customers in approximately 18 states.
Statements in this release about future events or performance, including
earnings expectations for 2004, 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,
future workers' compensation claims experience, collectibility of accounts
receivable, and availability of funding for working capital purposes, among
others. Other important factors that may affect the Company's future prospects
are described in the Company's 2002 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.
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