Form: 10-Q/A

Quarterly report pursuant to Section 13 or 15(d)

August 21, 1998

10-Q/A: Quarterly report pursuant to Section 13 or 15(d)

Published on August 21, 1998


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM 10-Q/A


Amendment No. 1 to

[X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 1998

Commission File No. 0-21886


BARRETT BUSINESS SERVICES, INC.
(Exact name of registrant as specified in its charter)

Maryland 52-0812977

(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

4724 SW Macadam Avenue
Portland, Oregon 97201

(Address of principal executive offices) (Zip Code)

(503) 220-0988

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such report), and (2) has been subject to such filing
requirements for the past 90 days.

Yes [ X ] No [ ]

Number of shares of Common Stock, $.01 par value, outstanding at April 30, 1998
was 7,675,455 shares.




Amendment No. 1 to Form 10-Q
for the Quarter Ended March 31, 1998

BARRETT BUSINESS SERVICES, INC.

INDEX


Page
----

Part I - Financial Information

Item 1. Financial Statements


Balance Sheets - March 31, 1998 and
December 31, 1997..................................................3

Statements of Operations - Three Months
Ended March 31, 1998 and 1997......................................4

Statements of Cash Flows - Three Months
Ended March 31, 1998 and 1997......................................5

Notes to Financial Statements......................................6

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................................................10

Part II - Other Information

Item 6. Exhibits and Reports on Form 8-K..................................16

Signatures ..................................................................17

Exhibit Index ..................................................................18


Note: Items 1 and 2 of Part I and Exhibits 11 and 27 to this report have been
amended to include restated financial statements for the three months ended
March 31, 1998 and 1997, giving effect to the registrant's merger with a
staffing services company headquartered in San Bernardino, California, on June
29, 1998.

2


PART I - Financial Information

Item 1. Financial Statements

BARRETT BUSINESS SERVICES, INC.
Balance Sheets
(Unaudited)
(In thousands, except par value)



March 31, December 31,
1998 1997
--------- ------------
Assets

Current assets:
Cash and cash equivalents $ 3,455 $ 3,439
Trade accounts receivable, net 22,215 21,051
Prepaid expenses and other 1,755 1,231
Deferred tax assets (Note 2) 2,162 2,086
------ ------
Total current assets 29,587 27,807
Intangibles, net 11,782 12,133
Property and equipment, net 4,807 4,574
Restricted marketable securities and
workers' compensation deposits 6,013 6,095
Other assets 410 206
------ ------
$52,599 $50,815
====== ======

Liabilities and Stockholders' Equity

Current liabilities:
Current portion of long-term debt $ 784 $ 731
Line of credit payable 771 887
Income taxes payable (Note 2) 119 -
Accounts payable 1,148 1,136
Accrued payroll, payroll taxes and
related benefits 11,210 10,034
Accrued workers' compensation claim
liabilities 3,094 3,140
Customer safety incentives payable 1,070 1,073
Other accrued liabilities 478 414
------ ------
Total current liabilities 18,674 17,415
Long-term debt, net of current portion 560 573
Customer deposits 882 934
Long-term workers' compensation liabilities 728 632
Other long-term liabilities 1,112 1,030
------ ------
21,956 20,584
------ ------
Commitments and contingencies

Stockholders' equity:
Common stock, $.01 par value; 20,500 shares
authorized, 7,642 and 7,638 shares issued
and outstanding, respectively 76 76
Additional paid-in capital 11,785 11,760
Retained earnings 18,782 18,395
------ ------
30,643 30,231
------ ------
$52,599 $50,815
====== ======



The accompanying notes are an integral part of these financial statements.

3


BARRETT BUSINESS SERVICES, INC.
Statements of Operations
(Unaudited)
(In thousands, except per share amounts)



Three Months Ended
March 31,
---------------------------
1998 1997
------ ------

Revenues:

Staffing services $40,304 $36,749
Professional employer services 28,937 30,262
------ ------
69,241 67,011
------ ------
Cost of revenues:
Direct payroll costs 53,667 51,438
Payroll taxes and benefits 6,440 6,484
Workers' compensation 1,996 2,051
Safety incentives 364 323
------ ------
62,467 60,296
------ ------

Gross margin 6,774 6,715

Selling, general and administrative
expenses 5,816 5,109
Amortization of intangibles 353 327
------ ------

Income from operations 605 1,279

Other income (expense):
Interest expense (57) (45)
Interest income 125 103
Other, net 1 -
------ ------
69 58
------ ------

Income before provision for income taxes 674 1,337
Provision for income taxes 287 514
------ ------

Net income $ 387 $ 823
====== ======

Basic earnings per share (Note 4) $ .05 $ .11
====== ======

Weighted average number of basic
shares outstanding 7,639 7,695
====== ======

Diluted earnings per share (Note 4) $ .05 $ .10
====== ======

Weighted average number of diluted
shares outstanding 7,693 7,892
====== ======





The accompanying notes are an integral part of these financial statements.

4


BARRETT BUSINESS SERVICES, INC.
Statements of Cash Flows
(Unaudited)
(In thousands)


Three Months Ended
March 31,
-----------------------
1998 1997
------- -------

Cash flows from operating activities:

Net income $ 387 $ 823
Reconciliation of net income to cash
from operations:
Depreciation and amortization 467 424
Changes in certain assets and liabilities,
net of acquisition:
Trade accounts receivable, net (1,164) (1,883)
Note receivable - 324
Prepaid expenses and other (524) (431)
Deferred tax asset (76) (104)
Accounts payable 12 (30)
Accrued payroll, payroll taxes and related
benefits 1,176 2,050
Accrued workers' compensation claims
liabilities (46) 183
Customer safety incentives payable (3) 14
Income taxes payable 119 507
Other accrued liabilities and other assets (140) (214)
Customer deposits and long-term workers'
compensation liabilities 44 (4)
Other long-term liabilities 82 5
------- -------
Net cash provided by operating activities 334 1,664
------- -------

Cash flows from investing activities:
Cash paid for acquisition, including other
direct costs - (2,095)
Purchases of fixed assets, net of amounts
purchased in acquisition (349) (106)
Proceeds from maturities of marketable securities 2,839 1,556
Purchases of marketable securities (2,757) (1,548)
------- -------
Net cash used in investing activities (267) (2,193)
------- -------

Cash flows from financing activities:
Payment of credit line assumed in acquisition - (401)
Net (payments on) proceeds from credit-line borrowings (116) 272
Proceeds from issuance of long-term debt 62 74
Payments on long-term debt (22) (15)
Proceeds from exercise of stock
options and warrants 25 505
------- -------
Net cash (used in) provided by financing activities (51) 435
------- -------

Net increase (decrease) in cash and cash equivalents 16 (94)

Cash and cash equivalents, beginning of period 3,439 1,623
------- -------

Cash and cash equivalents, end of period $ 3,455 $ 1,529
======= =======

Supplemental schedule of noncash activities:
Acquisition of other business:
Cost of acquisition in excess of fair market
value of net assets acquired - $ 3,030
Tangible assets acquired - 672
Liabilities issued or assumed - 1,607


The accompanying notes are an integral part of these financial statements.

5


BARRETT BUSINESS SERVICES, INC.
Notes to Financial Statements

NOTE 1 - BASIS OF PRESENTATION OF INTERIM PERIOD STATEMENTS:

On June 29, 1998, Barrett Business Services, Inc. (the "Company")
completed its merger with Western Industrial Management, Inc., and with a
related company, Catch 55, Inc., (together, "WIMI"). The transaction was
accounted for as a pooling-of-interests pursuant to Accounting Principles Board
Opinion No. 16 and, accordingly, the Company's financial statements have been
restated for all prior periods to give effect to the merger, as more fully
described in Note 2 to the Company's financial statements included in its
Quarterly Report on Form 10-Q for the period ended June 30, 1998. The
accompanying financial statements are unaudited and have been prepared by
management pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and note disclosures typically included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, the financial statements include all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair statement of the results for the interim periods presented. The preparation
of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. Actual
results may differ from such estimates and assumptions. The financial statements
should be read in conjunction with the audited financial statements and notes
thereto included in the Company's 1997 Annual Report on Form 10-K/A, as amended
by Amendment No. 1, at pages F1-F21. The results of operations for an interim
period are not necessarily indicative of the results of operations for a full
year.

Certain prior year amounts have been reclassified to conform with
the 1998 presentation. Such reclassifications had no impact on gross margin, net
income or stockholders' equity.

6


NOTE 2 - PROVISION FOR INCOME TAXES:

Deferred tax assets (liabilities) are comprised of the following
components (in thousands):


March 31, 1998 December 31, 1997
-------------- -----------------

Accrued workers' compensation claims
liabilities $1,489 $1,469

Allowance for doubtful accounts 236 236

Tax depreciation in excess of book
depreciation (161) (165)

Safety incentives 308 276

Book amortization of intangibles in excess
of tax amortization 130 110

State unemployment tax accrual 160 160
----- -----

$2,162 $2,086
===== =====



The provision for income taxes for the three months ended March 31, 1998
and 1997, is as follows (in thousands):


Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1997
-------------- --------------

Current:

Federal $ 293 $ 499
State 70 119
---- ----
363 618
Deferred:
Federal (67) (86)
State (9) (18)
---- ----
(76) (104)
---- ----

Provision for income taxes $ 287 $ 514
==== ====



NOTE 3 - STOCK INCENTIVE PLAN:

In 1993, the Company adopted a stock incentive plan (the "Plan") which
provides for stock-based awards to the Company's employees, directors and
outside consultants or advisers. The number of shares of common stock reserved
for issuance under the Plan is 1,300,000.


7


The following table summarizes options granted under the Plan in 1998:

Outstanding at December 31, 1997 595,119 $ 3.50 to $18.00

Options granted 50,331 $ 4.60 to $11.44
Options exercised (3,750) $ 3.50 to $ 9.50
Options canceled or expired (54,071) $ 11.44 to $17.94
-------

Outstanding at March 31, 1998 587,629 $ 3.50 to $18.00
=======

Exercisable at March 31, 1998 276,855
=======

Available for grant at
March 31, 1998 507,496
=======

The options listed in the table generally become exercisable in four
equal annual installments beginning one year after the date of grant.

Certain of the Company's zone and branch management employees had
previously elected to receive a portion of their quarterly cash bonus in the
form of nonqualified deferred compensation stock options. Such options are
awarded at a sixty percent discount from the then-fair market value of the
Company's stock and are fully vested and immediately exerciseable upon grant.
The amount of the grantee's deferred compensation (discount from fair market
value) is subject to market risk. During the first quarter of 1998, the Company
awarded deferred compensation stock options for 7,735 shares at an exercise
price of $4.60 per share.


NOTE 4 - NET INCOME PER SHARE:

The Company adopted Statement of Financial Accounting Standards No. 128,
"Earnings per Share," for the year ended December 31, 1997. SFAS No. 128
requires disclosure of basic and diluted earnings per share. The 1997 period has
been restated to reflect the adoption of SFAS No. 128 and to give effect to the
WIMI merger, which was accounted for as a pooling-of-interests. Basic earnings
per share are computed based on the weighted average number of common shares
outstanding during the period. Diluted earnings per share reflect the potential
effects of the exercise of outstanding stock options and warrants.

8


NOTE 5 - SUBSEQUENT EVENTS:

Effective April 13, 1998, the Company acquired certain assets of BOLT
Staffing Service, Inc., a provider of staffing services located in Pocatello,
Idaho. BOLT Staffing had revenues of approximately $2.4 million (unaudited) for
the year ended December 31, 1997. The Company paid $675,000 in cash for the
assets, assumed a $6,000 office lease liability and incurred approximately
$5,000 in acquisition related costs. The transaction was accounted for under the
purchase method of accounting, which resulted in $670,000 of intangible assets
and $10,000 of fixed assets.

On April 15, 1998, the Company announced that it had reached an agreement
in principle to acquire Western Industrial Management, Inc., pursuant to a
stock-for-stock merger. The transaction was accounted for as a
pooling-of-interests. The transaction was valued at approximately $10.7 million
and the Company issued 894,642 shares of its common stock in exchange for all
the stock of Western. The acquisition closed on June 29, 1998. Western, a
privately-held staffing services company headquartered in San Bernardino,
California, operates six branch offices in Southern California. Western's
revenues for the year ended December 31, 1997 were approximately $24.5 million
(unaudited).

9


Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Results of Operations
- ---------------------

As more fully described above in Note 1 to the Company's financial
statements, the financial statements have been restated for all prior periods to
give effect to the merger with WIMI. The following table sets forth the
percentages of total revenues represented by selected items in the Company's
Statements of Operations for the three months ended March 31, 1998 and 1997.


Percentage of
Total Revenues
Three Months Ended
March 31,
----------------------
1998 1997
------ -----
Revenues:

Staffing services 58.2% 54.8%
Professional employer services 41.8 45.2
----- -----
Total revenues 100.0 100.0
----- -----

Cost of revenues:
Direct payroll costs 77.5 76.8
Payroll taxes and benefits 9.3 9.7
Workers' compensation 2.9 3.0
Safety incentives 0.5 0.5
----- -----
Total cost of revenues 90.2 90.0
----- -----

Gross margin 9.8 10.0
Selling, general and administrative
expenses 8.4 7.6
Amortization of intangibles 0.5 0.5
----- -----
Income from operations 0.9 1.9
Other income (expense) 0.1 0.1
----- -----
Pretax income 1.0 2.0
Provision for income taxes 0.4 0.8
----- -----
Net income 0.6% 1.2%
===== =====



Three months ended March 31, 1998 and 1997

Net income for the first quarter of 1998 was $387,000, a decrease of
$436,000 from the same period in 1997. The decrease in net income from 1997 was
attributable to a lower gross margin percent owing primarily to higher direct
payroll costs, expressed as a percentage of revenues, coupled with higher
selling, general and administrative expenses both in terms of a percentage of
revenues and total dollars. Basic and diluted earnings per share for the first
quarter of 1998 were $.05, as compared to $.11 for

10

basic and $.10 for diluted earnings per share for the first quarter of 1997.

Revenues for the first quarter of 1998 totaled approximately $69.2
million, an increase of approximately $2.2 million or 3.3% over the first
quarter of 1997. The quarter-over-quarter internal growth rate of revenues was
2.8%. The percentage increase in total revenues exceeded the internal growth
rate of revenues primarily due to the HR Only acquisition effective February 1,
1997.

Staffing services revenue increased approximately $3.6 million or 9.7%,
while professional employer services revenue decreased approximately $1.3
million or 4.4%, which resulted in a decrease in the mix of professional
employer (PEO) services to 41.8% of total revenues for the first quarter of
1998, as compared to 45.2% for the first quarter of 1997. The mix of staffing
services had a corresponding increase from 54.8% of total revenues for the first
quarter of 1997 to 58.2% for the first quarter of 1998.

The decrease in PEO revenues was primarily concentrated in Oregon and was
largely due to a culling of customers who were (i) not generating an acceptable
profit, (ii) a poor credit risk, or (iii) not complying with the Company's
workplace safety policies.

Gross margin for the first quarter of 1998 totaled approximately $6.8
million, which represented an increase of $59,000 or 0.9% over the first quarter
of 1997. The gross margin percent decreased to 9.8% of revenues for the first
quarter of 1998, as compared to 10.0% for the same period of 1997. The decline
in the gross margin percentage was due to higher direct payroll costs, offset in
part by a decrease in payroll taxes and benefits, both in terms of total dollars
and as a percentage of revenues. The increase in the percentage of direct
payroll costs from 76.8% for the first quarter of 1997 to 77.5% for the first
quarter of 1998 was primarily attributable to increased business activity in
contract staffing and on-site management arrangements, which are typically
higher volume, lower margin accounts.

Workers' compensation expense for the first quarter of 1998 totaled
$1,996,000 or 2.9% of revenues which compares to $2,051,000 or 3.0% of revenues
for the same period in 1997. Management believes it has continued to increase
the Company's accruals for future adverse loss development of open claims and
potential future catastrophic workers' compensation claims.

11


The following table summarizes certain indicators of performance
regarding the Company's self-insured workers' compensation program for the first
quarters of 1998 and 1997.

Self-Insured Workers' Compensation Profile

Total Self-Insured
Total Self-Insured Workers' Comp Expense
No. of Self-Insured Workers' Comp Expense as a % of Total
Injury Claims (in thousands) Self-Insured Payroll
------------------- --------------------- ---------------------
1998 1997 1998 1997 1998 1997
---- ---- ---- ---- ---- ----

Q1 289 321 $1,866 $1,855 3.8% 3.9%

Selling, general and administrative expenses for the 1998 first quarter
amounted to approximately $5.8 million, an increase of $707,000 or 13.8% over
the comparable period in 1997. Selling, general and administrative expenses,
expressed as a percentage of revenues, increased from 7.6% for the first quarter
of 1997 to 8.4% for the first quarter of 1998. The increase in total dollars
over 1997 was primarily attributable to higher branch management payroll and
profit sharing and related taxes, coupled with a full quarter of operating
expenses from the HR Only acquisition. During the first quarter of 1998,
management implemented specific performance criteria for all branches to align
operating expenses more closely with growth in gross margin dollars rather than
growth in revenues.

Amortization of intangibles totaled $353,000 or .5% of revenues for the
first quarter of 1998, which compares to $327,000 or .5% of revenues for the
same period in 1997. The increased amortization expense was primarily due to a
full quarter of amortization from the HR Only acquisition, which was effective
February 1, 1997.

The Company offers various qualified employee benefit plans to its
employees, including its worksite employees. These qualified employee benefit
plans include a savings plan (the "401(k) plan") under Section 401(k) of the
Internal Revenue Code (the "Code"), a cafeteria plan under Code Section 125, a
group health plan, a group life insurance plan, a group disability insurance
plan and an employee assistance plan. Generally, qualified employee benefit
plans are subject to provisions of both the Code and the Employee Retirement
Income Security Act ("ERISA"). In order to qualify for favorable tax treatment
under the Code, qualified plans must be established and maintained by an
employer for the exclusive benefit of its employees. In the event the tax exempt
status of the Company's benefit plans were to be discontinued and the benefit

12


plans were to be disqualified, such actions could have a material adverse effect
on the Company's business, financial condition and results of operations.
Reference is made to pages 19-20 of the Company's 1997 Annual Report on Form
10-K for a more detailed discussion of this issue.

Fluctuations in Quarterly Operating Results

The Company has historically experienced significant fluctuations in its
quarterly operating results and expects such fluctuations to continue in the
future. The Company's operating results may fluctuate due to a number of factors
such as seasonality, wage limits on payroll taxes, claims experience for
workers' compensation, demand and competition for the Company's services, and
the effect of acquisitions. The Company's revenue levels fluctuate from quarter
to quarter primarily due to the impact of seasonality in its staffing services
business and on certain of its PEO clients in the agriculture and forest
products related industries. As a result, the Company may have greater revenues
and net income in the third and fourth quarters of its fiscal year. Payroll
taxes and benefits fluctuate with the level of direct payroll costs but may tend
to represent a smaller percentage of revenues later in the Company's fiscal year
as federal and state statutory wage limits for unemployment and social security
taxes are exceeded by some employees. Workers' compensation expense varies with
both the frequency and severity of workplace injury claims reported during a
quarter, as well as adverse loss development of prior period claims during the
current or subsequent quarters.

Liquidity and Capital Resources
- -------------------------------

The Company's cash position of $3,455,000 at March 31, 1998 increased by
$16,000 from December 31, 1997, which compares to a decrease of $94,000 for the
comparable period in 1997. The slight increase in cash at March 31, 1998 as
compared to December 31, 1997, was primarily attributable to cash provided by
operating activities, largely offset by additions to fixed assets and repayments
of credit-line borrowings.

Net cash provided by operating activities for the three months ended
March 31, 1998 amounted to $334,000, as compared to $1,664,000 for the
comparable 1997 period. For the 1998 period, cash flow generated by net income,
together with an increase of $1,176,000 in accrued payroll and benefits, was
offset in part by a $1,164,000 increase in trade accounts receivable.

13

Net cash used in investing activities totaled $267,000 for the three
months ended March 31, 1998, as compared to $2,193,000 for the similar 1997
period. For the 1998 period, the principal use of cash for investing activities
was for purchases of fixed assets of $349,000. For the 1997 period, the
principal use of cash for investing activities was the acquisition of HR Only.
The Company presently has no material long-term capital commitments.

Net cash used in financing activities for the three-month period ended
March 31, 1998 was $51,000, which compared to $435,000 net cash provided by
financing activities for the similar 1997 period. For the 1998 period, the
principal use of cash for financing activities was for net payments on
credit-line borrowings, partially offset by net proceeds from issuance of
long-term debt and exercise of employee stock options.

The Company's business strategy continues to focus on growth through the
acquisition of additional personnel-related businesses, both in its existing
markets and other strategic geographic areas, together with the expansion of
operations at existing offices. As disclosed in Note 5 to the financial
statements included herein, the Company purchased in April 1998, certain assets
of a staffing services company located in Pocatello, Idaho for $680,000 in cash.
Also as disclosed in Notes 1 and 5 herein, the Company acquired Western
Industrial Management, Inc., a staffing services company headquartered in San
Bernardino, California, in exchange for $519,095 in cash and 894,642 shares of
the Company's common stock on June 29, 1998. The Company actively explores
proposals for various acquisition opportunities on an ongoing basis, but there
can be no assurance that any additional transactions will be consummated.

The Company presently has an unsecured $4.0 million revolving credit
facility which expires May 31, 1998. There was no outstanding balance at March
31, 1998. Management expects that the renewal of such credit facility will be in
an amount and on such terms and conditions as will be not less favorable than
the current credit arrangement. Management also believes the funds anticipated
to be generated from operations, together with the renewed credit facility and
other potential sources of financing, will be sufficient in the aggregate to
fund the Company's working capital needs for the foreseeable future.

14

Inflation

Inflation generally has not been a significant factor in the Company's
operations during the periods discussed above. The Company has taken into
account the impact of escalating medical and other costs in establishing
reserves for future expenses for self-insured workers' compensation claims.

Forward-Looking Information
- ---------------------------

Statements in this report which are not historical in nature, including
discussion of economic conditions in the Company's market areas, the potential
for and effect of future acquisitions, the effect of changes in the Company's
mix of services on gross margin, the adequacy of the Company's workers'
compensation reserves and allowance for doubtful accounts, the tax-qualified
status of the Company's 401(k) savings plan, and the availability of financing
and working capital to meet the Company's funding requirements, are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the Company or industry results to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors with
respect to the Company include difficulties associated with integrating acquired
businesses and clients into the Company's operations, economic trends in the
Company's service areas, uncertainties regarding government regulation of PEOs,
including the possible adoption by the IRS of an unfavorable position as to the
tax-qualified status of employee benefit plans maintained by PEOs, future
workers' compensation claims experience, and the availability of and costs
associated with potential sources of financing. The Company disclaims any
obligation to update any such factors or to publicly announce the result of any
revisions to any of the forward-looking statements contained herein to reflect
future events or developments.

15


Part II - Other Information


Item 6. Exhibits and Reports on Form 8-K

(a) The exhibits filed herewith are listed in the Exhibit Index
following the signature page of this report.

(b) Reports on Form 8-K

Subsequent to quarter end, on April 17, 1998, the Company filed a
Current Report on Form 8-K dated April 13, 1998, to report that
the Company had acquired, effective April 13, 1998, certain assets
of BOLT Staffing Service, Inc., located in Pocatello, Idaho for
$675,000 in cash. The Company also reported that it had reached an
agreement in principle to acquire Western Industrial Management,
Inc., headquartered in San Bernardino, California, in exchange for
approximately 975,000 shares of the Company's common stock.



16


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to this report to be signed on its
behalf by the undersigned thereunto duly authorized.

BARRETT BUSINESS SERVICES, INC.
(Registrant)






Date: August 20, 1998 By:/s/ Michael D. Mulholland
Michael D. Mulholland
Vice President-Finance
(Principal Financial Officer)


17


EXHIBIT INDEX


Exhibit
- -------

11 Statement of Calculation of Basic and Diluted Shares Outstanding

27 Financial Data Schedule



18