99.1
Published on April 29, 2004
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 FIRST QUARTER 2004 OPERATING RESULTS AND
FINANCIAL GUIDANCE FOR 2Q04
PORTLAND, OREGON, April 28, 2004 - Barrett Business Services, Inc.
(Nasdaq: BBSI) reported today net income of $606,000 for the first quarter ended
March 31, 2004, an improvement of $949,000 from a net loss of $343,000 for the
first quarter of 2003. Diluted income per share for the 2004 first quarter was
$.10, as compared to a diluted loss per share of $(.06) for the same quarter a
year ago.
Net revenues for the first quarter ended March 31, 2004 totaled $40.6
million, an increase of approximately $17.2 million or 73.5% over the $23.4
million for the same quarter in 2003.
(Unaudited)
First Quarter Ended
March 31,
----------------------
Results of Operations 2004 2003
- ----------------------------------------------- ------- --------
(in thousands, except per share amounts)
Revenues:
Staffing services $25,054 $20,110
Professional employer service fees 15,556 3,287
------- --------
Total revenues 40,610 23,397
------- --------
Cost of revenues:
Direct payroll costs 18,320 14,798
Payroll taxes and benefits 11,531 3,805
Workers' compensation 4,036 1,425
------- --------
Total cost of revenues 33,887 20,028
------- --------
Gross margin 6,723 3,369
Selling, general and administrative expenses 5,532 3,596
Depreciation and amortization 242 280
------- --------
Income (loss) from operations 949 (507)
Other income (expense), net 21 (6)
------- --------
Income (loss) before taxes 970 (513)
Provision for (benefit from) income taxes 364 (170)
------- --------
Net income (loss) $ 606 $ (343)
======= ========
Basic income (loss) per share $ .11 $ (.06)
======= ========
Weighted average basic shares outstanding 5,704 5,748
======= ========
Diluted income (loss) per share $ .10 $ (.06)
======= ========
Weighted average diluted shares outstanding 6,143 5,748
======= ========
The Company changed its reporting of PEO revenues from a gross basis to a
net basis in 2002. 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
-1-
Barrett Business Services, Inc.
News Release - First Quarter 2004
April 28, 2004
level of the Company's business activity and more useful in managing its
operations.
(Unaudited)
First Quarter Ended
($ in thousands) March 31,
------------------------
2004 2003
-------- ---------
Revenues:
Staffing services $ 25,054 $ 20,110
Professional employer services 91,720 20,539
-------- --------
Total gross revenues $116,774 $ 40,649
-------- --------
Cost of revenues:
Direct payroll costs 93,367 32,050
Payroll taxes and benefits 11,531 3,805
Workers' compensation 5,153 1,425
-------- --------
Total cost of revenues 110,051 37,280
-------- --------
Gross margin $ 6,723 $ 3,369
======== ========
A reconciliation of non-GAAP gross revenues to net revenues is as follows:
For the first quarters ended March 31, 2004 and 2003 (in thousands):
William W. Sherertz, President and Chief Executive Officer, commented
that: "We are very pleased with our continuing sequential growth in gross
revenues. We believe this will equate to increased momentum for improved
earnings trends for the balance of 2004. In addition, our balance sheet has
never been stronger, now with a record $10.0 million in cash and securities,
which further strengthens our overall liquidity and working capital position."
-2-
Barrett Business Services, Inc.
News Release - First Quarter 2004
April 28, 2004
The following summarizes the unaudited balance sheets at March 31, 2004
and December 31, 2003.
($ in thousands) March 31, December 31,
2004 2003
-------- ---------
Assets
Current assets:
Cash and cash equivalents $ 6,062 $ 7,785
Marketable securities 3,907 -
Trade accounts receivable, net 24,816 18,481
Prepaid expenses and other 2,576 958
Deferred income taxes 2,115 2,196
-------- --------
Total current assets 39,476 29,420
Goodwill, net 21,738 18,749
Intangibles, net 44 13
Property, equipment and software, net 3,247 3,367
Restricted marketable securities and workers'
compensation deposits 1,726 1,647
Deferred income taxes 990 1,041
Other assets 474 436
-------- --------
$ 67,695 $ 54,673
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 200 $ 88
Income taxes payable 227 -
Accounts payable 639 727
Accrued payroll, payroll taxes and related benefits 22,734 13,881
Workers' compensation claims liabilities 5,116 3,886
Safety incentives liabilities 2,961 2,007
Other accrued liabilities 1,722 361
-------- --------
Total current liabilities 33,599 20,950
Long-term debt, net of current portion 200 400
Customer deposits 481 455
Long-term workers' compensation claims liabilities 1,025 1,031
Other long-term liabilities - 45
Deferred gain on sale and leaseback 1,128 1,158
Stockholders' equity 31,262 30,634
-------- --------
$ 67,695 $ 54,673
======== ========
Outlook for Second Quarter 2004
The Company also disclosed today limited financial guidance with respect
to its operating results for the second quarter ending June 30, 2004. The
Company expects gross revenues for the second quarter to range from $120 million
to $123 million and anticipates diluted income per share to range from $.25 to
$.30 per share for the same period. A reconciliation of estimated gross revenues
to estimated GAAP net revenues for the second quarter of 2004 is not included
because estimated PEO revenues and cost of PEO revenues for the period cannot be
determined without unreasonable effort and expense.
-3-
Barrett Business Services, Inc.
News Release - First Quarter 2004
April 28, 2004
On April 29, 2004 at 9:00 a.m. Pacific Time, William W. Sherertz and
Michael D. Mulholland will host an investor telephone conference call to discuss
first quarter 2004 operating results. To participate in the call, dial
(877)356-3717 shortly before 9:00 a.m. Pacific Time on April 29, 2004. The call
identification number is 6842413. 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 April 29, 2004 at 11:00 a.m. and ending May 6, 2004. To
listen to the recording, dial (800)642-1687 and enter conference identification
code 6842413.
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 the second quarter of 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 successful integration of the operations of
Skills Resource Training Center acquired by the Company on January 1, 2004, the
effect of changes in the Company's mix of services on gross margin, future
workers' compensation claims experience, the effect of changes in the workers'
compensation regulatory environment in one or more of our primary markets,
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 2003 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.
#####
-4-