February 11, 2008 - EXHIBIT 99.1 - 8-K: Current report filing | Barrett Business Services, Inc. (BBSI)

Exhibit 99.1

NEWS RELEASE

For Immediate Release	Contact:	William W. Sherertz President and Chief Executive Officer

	Telephone:	(360) 828-0700

BBSI

ANNOUNCES FOURTH QUARTER 2007 OPERATING RESULTS,

FINANCIAL GUIDANCE FOR 1Q08 AND CONFERENCE CALL

VANCOUVER, WASHINGTON, February 8, 2008 - Barrett Business Services, Inc. (Nasdaq: BBSI) reported today net income of $3.9 million for the fourth quarter ended December 31, 2007, a decline of $1.3 million or 25.1% from net income of $5.2 million for the fourth quarter of 2006. Diluted earnings per share for the 2007 fourth quarter were $.34, as compared to diluted earnings per share of $.45 for the same quarter a year ago.

Net revenues for the fourth quarter ended December 31, 2007 totaled $81.8 million, an increase of approximately $15.0 million or 22.5% over the $66.8 million for the same quarter in 2006.

	(Unaudited)				(Unaudited)
($ in thousands, except per share amounts)	Fourth Quarter Ended				Year Ended
	December 31,				December 31,
Results of Operations	2007		2006		2007		2006
Revenues:
Staffing services	$	45,548	$	32,766	$	147,221	$	123,500
Professional employer service fees		36,283		34,055		141,992		135,684
Total revenues		81,831		66,821		289,213		259,184
Cost of revenues:
Direct payroll costs		34,250		24,849		113,450		92,676
Payroll taxes and benefits		21,534		20,079		87,822		83,756
Workers compensation		10,590		6,240		29,031		27,199
Total cost of revenues		66,374		51,168		230,303		203,631
Gross margin		15,457		15,653		58,910		55,553
Selling, general and administrative expenses		10,043		8,140		34,688		31,604
Depreciation and amortization		372		341		1,387		1,306
Income from operations		5,042		7,172		22,835		22,643
Other income, net		732		812		3,083		2,847
Income before taxes		5,774		7,984		25,918		25,490
Provision for income taxes		1,859		2,755		9,112		9,154
Net income	$	3,915	$	5,229	$	16,806	$	16,336
Basic earnings per share	$	.35	$	.46	$	1.49	$	1.46
Weighted average basic shares outstanding		11,193		11,251		11,247		11,194
Diluted earnings per share	$	.34	$	.45	$	1.44	$	1.40
Weighted average diluted shares outstanding		11,555		11,680		11,654		11,671

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Barrett Business Services, Inc.

News Release Fourth Quarter 2007

February 8, 2008

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 Companys 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 Companys business activity and more useful in managing its operations.

	(Unaudited)				(Unaudited)
	Fourth Quarter Ended				Year Ended
(in thousands)	December 31,				December 31,
	2007		2006		2007		2006
Revenues:
Staffing services	$	45,548	$	32,766	$	147,221	$	123,500
Professional employer services		248,251		241,065		968,576		916,898
Total revenues		293,799		273,831		1,115,797		1,040,398
Cost of revenues:
Direct payroll costs		246,530		230,555		935,697		869,410
Payroll taxes and benefits		21,534		20,079		87,822		83,756
Workers compensation		10,278		7,544		33,368		31,679
Total cost of revenues		278,342		258,178		1,056,887		984,845
Gross margin	$	15,457	$	15,653	$	58,910	$	55,553

Gross revenues of $293.8 million for the fourth quarter ended December 31, 2007 rose 7.3% over the similar period in 2006. For the year ended December 31, 2007, gross revenues of $1.12 billion increased 7.2% over the comparable 2006 period.

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

For the fourth quarters ended December 31, 2007 and 2006:

	(Unaudited)
	Three Months Ended December 31,
	Gross Revenue										Net Revenue
(in thousands)	Reporting Method				Reclassification						Reporting Method
	2007		2006		2007			2006			2007		2006
Revenues:
Staffing services	$	45,548	$	32,766	$			$			$	45,548	$	32,766

Professional employer services		248,251		241,065		(211,968	)		(207,010	)		36,283		34,055
Total revenues	$	293,799	$	273,831	$	(211,968	)	$	(207,010	)	$	81,831	$	66,821
Cost of revenues	$	278,342	$	258,178	$	(211,968	)	$	(207,010	)	$	66,374	$	51,168

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Barrett Business Services, Inc.

News Release Fourth Quarter 2007

February 8, 2008

For the years ended December 31, 2007 and 2006:

	(Unaudited)
	Year Ended December 31,
	Gross Revenue										Net Revenue
(in thousands)	Reporting Method				Reclassification						Reporting Method
	2007		2006		2007			2006			2007		2006
Revenues:
Staffing services	$	147,221	$	123,500	$			$			$	147,221	$	123,500
Professional employer services		968,576		916,898		(826,584	)		(781,214	)		141,992		135,684
Total revenues	$	1,115,797	$	1,040,398	$	(826,584	)	$	(781,214	)	$	289,213	$	259,184
Cost of revenues	$	1,056,887	$	984,845	$	(826,584	)	$	(781,214	)	$	230,303	$	203,631

The following summarizes the unaudited consolidated balance sheets at December 31, 2007 and December 31, 2006.

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Barrett Business Services, Inc.

News Release Fourth Quarter 2007

February 8, 2008

	December 31,		December 31,
(in thousands)	2007		2006
Assets
Current assets:
Cash and cash equivalents	$	62,779	$	69,874
Marketable securities		1,717		3,159
Trade accounts receivable, net		36,673		31,328
Prepaid expenses and other		1,773		1,940
Deferred income taxes		5,471		4,699
Workers compensation receivables for insured claims		225		225
Total current assets		108,638		111,225
Marketable securities		417		406
Goodwill, net		41,508		27,536
Intangibles, net		119		75
Property, equipment and software, net		16,136		13,502
Restricted marketable securities and workers compensation deposits		2,750		2,616
Other assets		1,530		2,143
Workers compensation receivables for insured claims		3,896		4,678
	$	174,994	$	162,181

Liabilities and Stockholders Equity
Current liabilities:
Accounts payable	$	1,516	$	1,545
Accrued payroll, payroll taxes and related benefits		33,553		33,372
Other accrued liabilities		1,064		516
Workers compensation claims liabilities		6,031		3,843
Workers compensation claims liabilities for insured claims		225		225
Safety incentives liabilities		5,911		7,519
Total current liabilities		48,300		47,020
Customer deposits		752		817
Long-term workers compensation claims liabilities		4,021		5,295
Long-term workers compensation liabilities for insured claims		2,464		3,011
Deferred income taxes		5,038		1,545
Deferred gain on sale and leaseback		671		793
Stockholders equity		113,748		103,700
	$	174,994	$	162,181

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Barrett Business Services, Inc.

News Release Fourth Quarter 2007

February 8, 2008

Outlook for First Quarter 2008

The Company also disclosed today limited financial guidance with respect to its operating results for the first quarter ending March 31, 2008. The Company expects gross revenues for the first quarter of 2008 to range from $263 million to $268 million, as compared to $257.5 million for the first quarter of 2007, and anticipates diluted earnings per share for the first quarter of 2008 to range from $.08 to $.12 per share, as compared to $.15 per share for the same period a year ago. A reconciliation of estimated gross revenues to estimated GAAP net revenues for the first quarter of 2008 is not included because PEO revenues and cost of PEO revenues for the period are not reasonably estimable.

Conference Call

On February 8 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 2007 operating results. To participate in the call, dial (877) 356-3717. The call identification number is 34721913. 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 Friday, February 8, 2008 at 12:00 p.m. PT and ending on February 15, 2008. To listen to the recording, dial (800) 642-1687 and enter conference identification code 34721913.

Statements in this release about future events or performance, including gross revenues and earnings expectations for the first quarter of 2008, 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 and the collectibility of accounts receivable, among others. Other important factors that may affect the Companys future prospects are described in the Companys 2006 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.

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Form: 8-K

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