99.1, PRESS RELEASE
Published on February 10, 2006
Exhibit 99.1
NEWS RELEASE
| For Immediate Release | Contact: | William W. Sherertz President and Chief Executive Officer |
Telephone: |
(503) 220-0988 |
BBSI
ANNOUNCES FOURTH
QUARTER 2005 OPERATING RESULTS AND
FINANCIAL GUIDANCE FOR 1Q06
PORTLAND, OREGON, February 9, 2006 Barrett Business Services, Inc. (Nasdaq: BBSI) reported today net income of $4.3 million for the fourth quarter ended December 31, 2005, an improvement of approximately $1.8 million or 72% over net income of $2.5 million for the fourth quarter of 2004. Diluted earnings per share for the 2005 fourth quarter were $.37, as compared to diluted earnings per share of $.27 for the same quarter a year ago. For 2005, diluted earnings per share were $1.21, as compared to $.79 for 2004.
Net revenues for the fourth quarter ended December 31, 2005 totaled $58.0 million, an increase of approximately $6.0 million or 11.5% over the $52.0 million for the same quarter in 2004. For 2005, net revenues were $231.4 million, an increase of approximately $36.4 million or 18.7% over 2004.
|
(Unaudited) Fourth Quarter Ended December 31, |
(Unaudited) Year Ended December 31, |
|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Results of Operations |
2005 |
2004 |
2005 |
2004 |
||||||||||
| (in thousands, except per share amounts) | ||||||||||||||
Revenues: |
||||||||||||||
| Staffing services | $ | 29,251 | $ | 32,317 | $ | 130,098 | $ | 123,514 | ||||||
| Professional employer service fees | 28,712 | 19,651 | 101,291 | 71,447 | ||||||||||
| Total revenues | 57,963 | 51,968 | 231,389 | 194,961 | ||||||||||
| Cost of revenues: | ||||||||||||||
| Direct payroll costs | 21,864 | 23,883 | 97,006 | 91,190 | ||||||||||
| Payroll taxes and benefits | 16,238 | 11,988 | 63,889 | 45,544 | ||||||||||
| Workers' compensation | 6,302 | 6,234 | 24,667 | 23,071 | ||||||||||
| Total cost of revenues | 44,404 | 42,105 | 185,562 | 159,805 | ||||||||||
| Gross margin | 13,559 | 9,863 | 45,827 | 35,156 | ||||||||||
| Selling, general and administrative expenses | 7,043 | 5,756 | 25,670 | 22,330 | ||||||||||
| Depreciation and amortization | 282 | 256 | 974 | 1,008 | ||||||||||
| Income from operations | 6,234 | 3,851 | 19,183 | 11,818 | ||||||||||
| Other income (expense), net | 519 | 300 | 747 | 432 | ||||||||||
| Income before taxes | 6,753 | 4,151 | 19,930 | 12,250 | ||||||||||
| Provision for income taxes | 2,439 | 1,674 | 7,440 | 4,879 | ||||||||||
| Net income | $ | 4,314 | $ | 2,477 | $ | 12,490 | $ | 7,371 | ||||||
| Basic earnings per share | $ | .39 | $ | .29 | $ | 1.29 | $ | .86 | ||||||
| Weighted average basic shares outstanding | 11,018 | 8,611 | 9,647 | 8,587 | ||||||||||
| Diluted earnings per share | $ | .37 | $ | .27 | $ | 1.21 | $ | .79 | ||||||
| Weighted average diluted shares outstanding | 11,739 | 9,287 | 10,343 | 9,289 | ||||||||||
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Barrett Business
Services, Inc.
News Release Fourth Quarter 2005
February 9, 2006
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 level of the Companys business activity and more useful in managing its operations.
| (in thousands) |
(Unaudited) Fourth Quarter Ended December 31, |
(Unaudited) Year Ended December 31, |
||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2005 |
2004 |
2005 |
2004 |
|||||||||||
| Revenues: | ||||||||||||||
| Staffing services | $ | 29,251 | $ | 32,317 | $ | 130,098 | $ | 123,514 | ||||||
| Professional employer services | 183,843 | 119,871 | 635,743 | 419,010 | ||||||||||
| Total revenues | 213,094 | 152,188 | 765,841 | 542,524 | ||||||||||
| Cost of revenues: | ||||||||||||||
| Direct payroll costs | 175,924 | 122,697 | 625,242 | 434,034 | ||||||||||
| Payroll taxes and benefits | 16,237 | 11,988 | 63,888 | 45,544 | ||||||||||
| Workers' compensation | 7,374 | 7,640 | 30,884 | 27,790 | ||||||||||
| Total cost of revenues | 199,535 | 142,325 | 720,014 | 507,368 | ||||||||||
| Gross margin | $ | 13,559 | $ | 9,863 | $ | 45,827 | $ | 35,156 | ||||||
Gross revenues of $213.1 million for the 2005 fourth quarter rose 40.0% over the comparable 2004 period. For 2005, gross revenues of $765.8 million increased 41.2% over 2004.
A reconciliation of non-GAAP gross revenues to net revenues is as follows:
For the fourth quarters ended December 31, 2005 and 2004 (in thousands):
|
Gross Revenue Reporting Method |
Reclassification |
Net Revenue Reporting Method |
||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2005 |
2004 |
2005 |
2004 |
2005 |
2004 |
|||||||||||||||
| Revenues: | ||||||||||||||||||||
| Staffing services | $ | 29,251 | $ | 32,317 | $ | | $ | | $ | 29,251 | $ | 32,317 | ||||||||
| Professional services | 183,843 | 119,871 | (155,131 | ) | (100,220 | ) | 28,712 | 19,651 | ||||||||||||
| Total revenues | $ | 213,094 | $ | 152,188 | $ | (155,131 | ) | $ | (100,220 | ) | $ | 57,963 | $ | 51,968 | ||||||
| Cost of revenues: | $ | 199,535 | $ | 142,325 | $ | (155,131 | ) | $ | (100,220 | ) | $ | 44,404 | $ | 42,105 | ||||||
For the years ended December 31, 2005 and 2004 (in thousands):
|
Gross Revenue Reporting Method |
Reclassification |
Net Revenue Reporting Method |
||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2005 |
2004 |
2005 |
2004 |
2005 |
2004 |
|||||||||||||||
| Revenues: | ||||||||||||||||||||
| Staffing services | $ | 130,098 | $ | 123,514 | $ | | $ | | $ | 130,098 | $ | 123,514 | ||||||||
| Professional services | 635,743 | 419,010 | (534,452 | ) | (347,563 | ) | 101,291 | 71,447 | ||||||||||||
| Total revenues | $ | 765,841 | $ | 542,524 | $ | (534,452 | ) | $ | (347,563 | ) | $ | 231,389 | $ | 194,961 | ||||||
| Cost of revenues: | $ | 720,014 | $ | 507,368 | $ | (534,452 | ) | $ | (347,563 | ) | $ | 185,562 | $ | 159,805 | ||||||
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Barrett Business
Services, Inc.
News Release Fourth Quarter 2005
February 9, 2006
William W. Sherertz, President and Chief Executive Officer, commented that: We are pleased with our 72% increase in net income for the fourth quarter of 2005 as compared to the same quarter a year ago and with the continuing growth of our customer base throughout all operating regions.
The following summarizes the unaudited consolidated balance sheets at December 31, 2005 and December 31, 2004.
|
(Unaudited) |
||||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands) |
December 31, 2005 |
December 31, 2004 |
||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 61,361 | $ | 12,153 | ||||
| Marketable securities | 3,548 | 4,630 | ||||||
| Trade accounts receivable, net | 26,328 | 23,840 | ||||||
| Prepaid expenses and other | 2,514 | 1,364 | ||||||
| Deferred income taxes | 5,864 | 4,100 | ||||||
| Workers' compensation receivables for insured claims | 242 | 213 | ||||||
| Total current assets | 99,857 | 46,300 | ||||||
| Marketable securities | 396 | | ||||||
| Goodwill, net | 22,516 | 22,516 | ||||||
| Intangibles, net | 5 | 25 | ||||||
| Property, equipment and software, net | 13,071 | 4,301 | ||||||
| Restricted marketable securities and workers' | ||||||||
| compensation deposits | 2,041 | 1,702 | ||||||
| Deferred income taxes | 341 | 582 | ||||||
| Other assets | 1,528 | 401 | ||||||
| Workers' compensation receivables for insured claims | 4,546 | 4,158 | ||||||
| $ | 144,301 | $ | 79,985 | |||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ | 348 | $ | 348 | ||||
| Accounts payable | 1,366 | 994 | ||||||
| Accrued payroll, payroll taxes and related benefits | 28,650 | 17,427 | ||||||
| Workers' compensation claims liabilities | 5,729 | 4,946 | ||||||
| Workers' compensation claims liabilities for insured claims | 242 | 213 | ||||||
| Safety incentives liabilities | 7,687 | 4,807 | ||||||
| Other accrued liabilities | 360 | 414 | ||||||
| Total current liabilities | 44,382 | 29,149 | ||||||
| Long-term debt, net of current portion | 1,094 | 1,441 | ||||||
| Customer deposits | 663 | 608 | ||||||
| Long-term workers' compensation claims liabilities | 8,532 | 6,465 | ||||||
| Long-term workers' compensation liabilities for insured claims | 2,866 | 2,533 | ||||||
| Deferred gain on sale and leaseback | 914 | 1,036 | ||||||
| Stockholders' equity | 85,850 | 38,753 | ||||||
| $ | 144,301 | $ | 79,985 | |||||
- 3 -
Barrett Business
Services, Inc.
News Release Fourth Quarter 2005
February 9, 2006
Outlook for First Quarter 2006
The Company also disclosed today limited financial guidance with respect to its operating results for the first quarter ending March 31, 2006. The Company expects gross revenues for the first quarter of 2006 to range from $232 million to $234 million, an increase of approximately 48% over the first quarter of 2005, and anticipates diluted earnings per share for the first quarter of 2006 to range from $.10 to $.12 per share. This range of expected earnings per share equates to an approximate increase in net income of 39% over the first quarter of 2005. A reconciliation of estimated gross revenues to estimated GAAP net revenues for the first quarter of 2006 is not included because PEO revenues and cost of PEO revenues for the period are not reasonably estimable.
On February 10, 2006 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 2005 operating results. To participate in the call, dial (877) 356-3717. The call identification number is 4797340. 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 webcasts. A replay of the conference call will be available beginning at 11:00 a.m. PT on Friday, February 10, 2006 and ending on February 17, 2006. The access telephone number for the replay is (800) 642-1687 and the access code is 4797340.
BBSI provides human resource management solutions to large and small companies throughout many regions of the United States.
Statements in this release about future events or performance, including earnings expectations for the first quarter of 2006, 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 Companys service areas, the effect of changes in the Companys 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 our primary markets, collectibility of accounts receivable, and the use of net proceeds of approximately $33.1 million and other effects of the Companys recent follow-on equity offering, among others. Other important factors that may affect the Companys future prospects are described in the Companys 2004 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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