October 27, 2009 - 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 THIRD QUARTER 2009 OPERATING RESULTS,

FINANCIAL GUIDANCE FOR 4Q09 AND CONFERENCE CALL

VANCOUVER, WASHINGTON, October 26, 2009 Barrett Business Services, Inc. (Nasdaq: BBSI) reported today net income of $2.9 million compared to net income of $650,000 for the third quarter of 2008. Diluted earnings per share for the 2009 third quarter were $.28, as compared to diluted earnings per share of $.06 for the same quarter a year ago.

During the third quarter of 2009, the Company realized a pre-tax gain of $572,000, or approximately $395,000 after tax equating to $.04 per diluted share, from the sale of certain corporate bonds. The gain is included in other income, net in the Companys results of operations.

Net revenues for the third quarter ended September 30, 2009 totaled $65.5 million, a decrease of approximately $12.0 million or 15.5% from the $77.5 million for the same quarter in 2008.

	(Unaudited)					(Unaudited)
($ in thousands, except per share amounts)	Third Quarter Ended					Nine Months Ended
	September 30,					September 30,
Results of Operations	2009		2008			2009			2008
Revenues:
Staffing services	$	33,180	$	44,468		$	85,224		$	120,891
Professional employer service fees		32,314		32,993			88,607			94,947
Total revenues		65,494		77,461			173,831			215,838
Cost of revenues:
Direct payroll costs		25,095		32,941			64,291			89,267
Payroll taxes and benefits		20,399		21,201			62,460			66,367
Workers compensation		7,859		8,410			33,473			22,679
Total cost of revenues		53,353		62,552			160,224			178,313
Gross margin		12,141		14,909			13,607			37,525
Selling, general and administrative expenses		8,416		10,007			24,792			27,841
Depreciation and amortization		422		385			1,218			1,143
Income (loss) from operations		3,303		4,517			(12,403	)		8,541
Loss on impairment of investment				(3,483	)					(3,483
Other income, net		965		465			1,373			1,678
Income (loss) before taxes		4,268		1,499			(11,030	)		6,736
Provision for (benefit from) income taxes		1,323		849			(4,069	)		2,745
Net income (loss)	$	2,945	$	650		$	(6,961	)	$	3,991
Basic earnings (loss) per share	$	.28	$	.06		$	(.67	)	$	.36
Weighted average basic shares outstanding		10,475		10,781			10,442			10,935
Diluted earnings (loss) per share	$	.28	$	.06		$	(.67	)	$	.36
Weighted average diluted shares outstanding		10,559		10,997			10,442			11,214

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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)
	Third Quarter Ended				Nine Months Ended
(in thousands)	September 30,				September 30,
	2009		2008		2009		2008
Revenues:
Staffing services	$	33,180	$	44,468	$	85,224	$	120,891
Professional employer services		239,872		243,927		663,847		696,579
Total revenues		273,052		288,395		749,071		817,470
Cost of revenues:
Direct payroll costs		231,532		242,396		635,808		686,136
Payroll taxes and benefits		20,399		21,201		62,460		66,367
Workers compensation		8,980		9,889		37,196		27,442
Total cost of revenues		260,911		273,486		735,464		779,945
Gross margin	$	12,141	$	14,909	$	13,607	$	37,525

Gross revenues of $273.1 million for the third quarter ended September 30, 2009 declined 5.3% from the similar period in 2008.

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

For the third quarters ended September 30, 2009 and 2008:

	(Unaudited)
	Three Months Ended September 30,
	Gross Revenue											Net Revenue
(in thousands)	Reporting Method				Reclassification							Reporting Method
	2009		2008			2009			2008			2009		2008
Revenues:
Staffing services	$	33,180	$	44,468		$			$			$	33,180	$	44,468
Professional
employer services		239,872		243,927			(207,558	)		(210,934	)		32,314		32,993
Total revenues	$	273,052	$	288,395		$	(207,558	)	$	(210,934	)	$	65,494	$	77,461
Cost of revenues	$	260,911	$	273,486		$	(207,558	)	$	(210,934	)	$	53,353	$	62,552

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Barrett Business Services, Inc.

News Release Third Quarter 2009

October 26, 2009

For the nine months ended September 30, 2009 and 2008:

	(Unaudited)
	Nine Months Ended September 30,
	Gross Revenue										Net Revenue
(in thousands)	Reporting Method				Reclassification						Reporting Method
	2009		2008		2009			2008			2009		2008
Revenues:
Staffing services	$	85,224	$	120,891	$			$			$	85,224	$	120,891
Professional
employer services		663,847		696,579		(575,240	)		(601,632	)		88,607		94,947
Total revenues	$	749,071	$	817,470	$	(575,240	)	$	(601,632	)	$	173,831	$	215,838
Cost of revenues	$	735,464	$	779,945	$	(575,240	)	$	(601,632	)	$	160,224	$	178,313

The following summarizes the unaudited consolidated balance sheets at September 30, 2009 and December 31, 2008.

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Barrett Business Services, Inc.

News Release Third Quarter 2009

October 26, 2009

	September 30,		December 31,
(in thousands)	2009		2008
Assets
Current assets:
Cash and cash equivalents	$	38,505	$	42,214
Marketable securities		8,919		17,968
Trade accounts receivable, net		46,194		34,389
Income taxes receivable		4,455
Prepaid expenses and other		1,365		1,440
Deferred income taxes		2,963		2,373
Workers compensation receivables for insured claims		225		225
Total current assets		102,626		98,609
Marketable securities		6,389		427
Goodwill, net		47,338		47,338
Property, equipment and software, net		15,014		15,503
Restricted marketable securities and workers compensation deposits		3,454		2,701
Other assets		1,650		1,645
Workers compensation receivables for insured claims		3,552		3,837
	$	180,023	$	170,060

Liabilities and Stockholders Equity
Current liabilities:
Accounts payable	$	648	$	881
Accrued payroll, payroll taxes and related benefits		42,134		32,296
Other accrued liabilities		557		902
Workers compensation claims liabilities		9,872		7,186
Workers compensation claims liabilities for insured claims		225		225
Safety incentives liabilities		4,588		4,626
Total current liabilities		58,024		46,116
Customer deposits		614		706
Long-term workers compensation claims liabilities		15,377		5,235
Long-term workers compensation liabilities for insured claims		2,350		2,438
Deferred income taxes		3,911		4,394
Deferred gain on sale and leaseback		457		549
Stockholders equity		99,290		110,622
	$	180,023	$	170,060

Outlook for Fourth Quarter 2009

The Company also disclosed today limited financial guidance with respect to its operating results for the fourth quarter ending December 31, 2009. The Company expects gross revenues for the fourth quarter of 2009 to range from $265 million to $270 million, as compared to $263.1 million for the fourth quarter of 2008, and anticipates diluted earnings per share for the fourth quarter of 2009 to range from $.19 to $.22 per share, as compared to diluted earnings per share of $.21 for the same period a year ago. A reconciliation of estimated gross revenues to estimated GAAP net revenues for the fourth quarter of 2009 is not included because PEO revenues and cost of PEO revenues for the period are not reasonably estimable.

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Barrett Business Services, Inc.

News Release Third Quarter 2009

October 26, 2009

Conference Call

On October 27 at 9:00 a.m. Pacific Time, William W. Sherertz, Michael L. Elich and James D. Miller will host an investor telephone conference call to discuss third quarter 2009 operating results. To participate in the call, dial (877) 356-3717. The call identification number is 36223270. 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 October 27, 2009 at 12:00 p.m. PT and ending on Tuesday, November 3, 2009. To listen to the recording, dial (800) 642-1687 and enter conference identification code 36223270.

Statements in this release about future events or performance, including gross revenues and earnings expectations for the fourth quarter of 2009, 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, the collectibility of accounts receivable and the effect of conditions in the global capital markets on the Companys investment portfolio, among others. Other important factors that may affect the Companys future prospects are described in the Companys 2008 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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