Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

May 4, 2023

40000--12-310000902791falseQ10000902791bbsi:EmergingMarketsMember2023-03-310000902791us-gaap:USTreasurySecuritiesMemberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791srt:MinimumMemberus-gaap:InternalRevenueServiceIRSMemberbbsi:WageBasedTaxCreditsMember2023-01-012023-03-310000902791bbsi:TwoThousandTwentyOneThroughJuneThirtyMember2023-01-012023-03-310000902791us-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:FairValueInputsLevel2Memberus-gaap:MortgageBackedSecuritiesMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310000902791us-gaap:CommonStockMember2023-03-310000902791us-gaap:AccruedLiabilitiesMember2023-03-310000902791us-gaap:MortgageBackedSecuritiesMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791bbsi:EmergingMarketsMember2022-12-310000902791bbsi:CreditAgreementMember2022-12-310000902791bbsi:CreditAgreementMembersrt:MaximumMember2023-01-012023-03-310000902791bbsi:CreditAgreementMemberus-gaap:StandbyLettersOfCreditMember2023-03-310000902791us-gaap:USGovernmentAgenciesDebtSecuritiesMemberbbsi:RestrictedCashAndInvestmentsMember2023-03-310000902791bbsi:CreditAgreementMember2023-01-012023-03-310000902791bbsi:RestrictedCashAndInvestmentsMemberus-gaap:MoneyMarketFundsMember2023-03-310000902791us-gaap:AssetBackedSecuritiesMember2022-12-310000902791us-gaap:MoneyMarketFundsMember2023-03-3100009027912021-12-310000902791us-gaap:PortionAtOtherThanFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:MortgageBackedSecuritiesMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:MoneyMarketFundsMemberus-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791bbsi:RestrictedCashAndInvestmentsMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:FairValueInputsLevel2Memberbbsi:EmergingMarketsMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:AssetBackedSecuritiesMember2023-03-310000902791us-gaap:CommonStockMember2021-12-310000902791us-gaap:FairValueInputsLevel2Memberus-gaap:MortgageBackedSecuritiesMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:RetainedEarningsMember2023-03-310000902791bbsi:CreditAgreementMemberus-gaap:LineOfCreditMember2023-01-012023-03-310000902791us-gaap:USTreasurySecuritiesMember2022-12-310000902791bbsi:CreditAgreementMemberus-gaap:RevolvingCreditFacilityMember2023-03-310000902791us-gaap:RetainedEarningsMember2022-03-310000902791stpr:CObbsi:SelfInsuredProgramsMember2020-06-300000902791bbsi:RestrictedCashAndInvestmentsMemberus-gaap:CorporateBondSecuritiesMember2022-12-310000902791us-gaap:RevolvingCreditFacilityMemberbbsi:SecuredOvernightFinancingRateMember2023-01-012023-03-310000902791us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310000902791bbsi:InsuredProgramMember2023-01-012023-03-310000902791us-gaap:MutualFundMemberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791bbsi:RestrictedCashAndInvestmentsMemberus-gaap:MoneyMarketFundsMember2022-12-310000902791us-gaap:FairValueInputsLevel2Memberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791bbsi:RestrictedCashAndInvestmentsMember2023-03-310000902791us-gaap:AdditionalPaidInCapitalMember2023-03-310000902791us-gaap:USTreasurySecuritiesMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:CorporateBondSecuritiesMemberus-gaap:InvestmentsMember2023-03-310000902791us-gaap:MutualFundMemberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791bbsi:TwoThousandTwentyThreeMember2023-01-012023-03-310000902791us-gaap:AssetBackedSecuritiesMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791bbsi:TwoThousandTwentyOneJulyOneAndAfterMember2023-01-012023-03-310000902791us-gaap:FairValueInputsLevel2Memberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-3100009027912022-03-3100009027912020-06-2900009027912022-01-012022-03-310000902791us-gaap:InvestmentsMemberbbsi:EmergingMarketsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791bbsi:MarketableSecuritiesCurrentMemberus-gaap:CashAndCashEquivalentsMember2023-03-310000902791us-gaap:InvestmentsMember2022-12-310000902791bbsi:PayrollTaxesAndBenefitsMember2022-01-012022-03-310000902791us-gaap:FairValueInputsLevel2Memberus-gaap:InvestmentsMemberus-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:InvestmentsMember2023-03-310000902791bbsi:CreditAgreementMembersrt:MinimumMember2022-09-300000902791bbsi:AlternativeMinimumTaxCreditsMember2023-03-3100009027912022-12-310000902791us-gaap:MortgageBackedSecuritiesMember2022-01-012022-12-310000902791bbsi:StaffingServicesMember2023-01-012023-03-310000902791us-gaap:FairValueInputsLevel2Memberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:FairValueInputsLevel2Memberus-gaap:InvestmentsMemberus-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:InternalRevenueServiceIRSMember2021-01-012021-12-310000902791us-gaap:CorporateBondSecuritiesMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:InvestmentsMemberus-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791stpr:MDbbsi:SelfInsuredProgramsMember2020-06-300000902791us-gaap:AdditionalPaidInCapitalMember2022-03-310000902791bbsi:RestrictedCashAndInvestmentsMemberus-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:USGovernmentAgenciesDebtSecuritiesMemberbbsi:RestrictedCashAndInvestmentsMember2022-12-310000902791us-gaap:FairValueInputsLevel2Memberus-gaap:InvestmentsMemberbbsi:EmergingMarketsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:MoneyMarketFundsMemberus-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:CommonStockMember2022-01-012022-03-310000902791us-gaap:MortgageBackedSecuritiesMemberbbsi:RestrictedCashAndInvestmentsMember2023-03-310000902791bbsi:TwoThousandEighteenMember2023-01-012023-03-310000902791bbsi:TwoThousandTwentyMember2023-01-012023-03-310000902791us-gaap:InternalRevenueServiceIRSMember2017-01-012020-12-310000902791bbsi:CreditAgreementMembersrt:MinimumMember2022-12-3100009027912023-04-190000902791bbsi:InsuredProgramMember2023-03-310000902791bbsi:RestrictedCashAndInvestmentsMember2022-12-310000902791bbsi:TwoThousandSeventeenMember2023-01-012023-03-310000902791us-gaap:MutualFundMemberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:FairValueInputsLevel2Memberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:MortgageBackedSecuritiesMemberus-gaap:InvestmentsMember2022-12-310000902791us-gaap:USTreasurySecuritiesMember2023-03-310000902791us-gaap:RetainedEarningsMember2022-12-310000902791bbsi:CreditAgreementMembersrt:MinimumMember2023-03-310000902791us-gaap:AdditionalPaidInCapitalMember2021-12-310000902791us-gaap:RetainedEarningsMember2023-01-012023-03-310000902791us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:InvestmentsMember2022-12-310000902791us-gaap:MoneyMarketFundsMemberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:PortionAtOtherThanFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:PortionAtOtherThanFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:CommonStockMember2023-01-012023-03-310000902791bbsi:RestrictedCashAndInvestmentsMemberus-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:CorporateBondSecuritiesMemberus-gaap:InvestmentsMember2022-12-310000902791bbsi:RestrictedCashAndInvestmentsMemberus-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791bbsi:StaffingServicesMember2022-01-012022-03-310000902791us-gaap:RetainedEarningsMember2021-12-310000902791us-gaap:OtherAssetsMember2022-12-310000902791us-gaap:MortgageBackedSecuritiesMember2023-01-012023-03-310000902791us-gaap:MoneyMarketFundsMemberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791bbsi:WorkersCompensationMember2023-01-012023-03-310000902791srt:MinimumMember2023-01-012023-03-310000902791us-gaap:CashAndCashEquivalentsMemberus-gaap:MoneyMarketFundsMember2023-03-310000902791bbsi:TwoThousandFourteenMember2023-01-012023-03-310000902791us-gaap:MoneyMarketFundsMemberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791bbsi:RestrictedCashAndInvestmentsMemberus-gaap:MutualFundMember2022-12-310000902791us-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:USTreasurySecuritiesMemberus-gaap:InvestmentsMember2023-03-310000902791bbsi:RestrictedCashAndInvestmentsMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791bbsi:RestrictedCashAndInvestmentsMemberus-gaap:MutualFundMember2023-03-310000902791us-gaap:MoneyMarketFundsMember2022-12-310000902791bbsi:RestrictedCashAndInvestmentsMemberus-gaap:USTreasurySecuritiesMember2022-12-310000902791us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310000902791us-gaap:MutualFundMemberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310000902791bbsi:TwoThousandNineteenMember2023-01-012023-03-310000902791us-gaap:OtherAssetsMember2023-03-310000902791bbsi:TwoThousandFifteenMember2023-01-012023-03-310000902791us-gaap:CommonStockMember2022-12-310000902791us-gaap:MoneyMarketFundsMemberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:PortionAtOtherThanFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791bbsi:DirectPayrollCostsMember2022-01-012022-03-310000902791us-gaap:USTreasurySecuritiesMemberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:CashAndCashEquivalentsMemberus-gaap:MoneyMarketFundsMember2022-12-310000902791srt:MinimumMemberus-gaap:InternalRevenueServiceIRSMember2023-01-012023-03-310000902791us-gaap:RevolvingCreditFacilityMemberbbsi:OneMonthTermSecuredOvernightFinancingRateMember2023-01-012023-03-310000902791us-gaap:CorporateBondSecuritiesMember2023-03-310000902791us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791bbsi:RestrictedCashAndInvestmentsMemberus-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791bbsi:SelfInsuredProgramsMember2020-01-012020-06-300000902791srt:MaximumMemberus-gaap:InternalRevenueServiceIRSMember2023-01-012023-03-310000902791bbsi:WorkersCompensationMember2022-01-012022-03-310000902791srt:MinimumMember2022-07-012022-09-300000902791us-gaap:AssetBackedSecuritiesMemberus-gaap:InvestmentsMember2023-03-310000902791bbsi:EmergingMarketsMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791bbsi:ProfessionalEmployerServicesMember2023-01-012023-03-310000902791bbsi:InsuredProgramMember2020-06-292020-06-290000902791us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-3100009027912023-01-012023-03-310000902791us-gaap:AssetBackedSecuritiesMemberus-gaap:InvestmentsMember2022-12-310000902791bbsi:RestrictedCashAndInvestmentsMemberus-gaap:AssetBackedSecuritiesMember2022-12-310000902791us-gaap:MortgageBackedSecuritiesMemberbbsi:RestrictedCashAndInvestmentsMember2022-12-310000902791us-gaap:RetainedEarningsMember2022-01-012022-03-310000902791bbsi:InsuredProgramMember2021-07-012021-07-010000902791stpr:CObbsi:SelfInsuredProgramsMember2023-03-310000902791bbsi:EmergingMarketsMemberus-gaap:InvestmentsMember2022-12-310000902791us-gaap:InvestmentsMember2023-03-310000902791srt:MaximumMemberus-gaap:InternalRevenueServiceIRSMemberbbsi:WageBasedTaxCreditsMember2023-01-012023-03-310000902791us-gaap:CorporateBondSecuritiesMemberbbsi:RestrictedCashAndInvestmentsMember2023-03-310000902791us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791bbsi:SelfInsuredProgramsMember2023-01-012023-03-310000902791stpr:MDbbsi:SelfInsuredProgramsMember2023-03-310000902791bbsi:TwoThousandTwentyTwoToTwoThousandTwentyThreePolicyMember2022-07-012022-07-010000902791us-gaap:CommonStockMember2022-03-3100009027912017-01-012020-12-310000902791us-gaap:CashAndCashEquivalentsMemberus-gaap:MoneyMarketFundsMemberus-gaap:PortionAtOtherThanFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:FairValueInputsLevel2Memberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:MortgageBackedSecuritiesMemberus-gaap:InvestmentsMember2023-03-310000902791bbsi:DirectPayrollCostsMember2023-01-012023-03-310000902791bbsi:EmergingMarketsMemberus-gaap:InvestmentsMember2023-03-310000902791us-gaap:AssetBackedSecuritiesMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791srt:MinimumMember2022-10-012022-12-310000902791us-gaap:FairValueInputsLevel2Memberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310000902791us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-3100009027912022-01-012022-12-310000902791bbsi:PayrollTaxesAndBenefitsMember2023-01-012023-03-310000902791bbsi:TwoThousandSixteenMember2023-01-012023-03-310000902791bbsi:CreditAgreementMemberus-gaap:RevolvingCreditFacilityMember2023-01-012023-03-310000902791us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791bbsi:MarketableSecuritiesCurrentMemberus-gaap:CashAndCashEquivalentsMember2022-12-310000902791us-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-03-3100009027912023-03-310000902791us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791bbsi:TwoThousandTwentyTwoMember2023-01-012023-03-310000902791us-gaap:CorporateBondSecuritiesMember2022-12-310000902791us-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791srt:MinimumMember2022-04-012022-06-300000902791bbsi:ProfessionalEmployerServicesMember2022-01-012022-03-310000902791bbsi:CreditAgreementMemberus-gaap:RevolvingCreditFacilityMemberbbsi:SecuredOvernightFinancingRateMember2023-01-012023-03-310000902791bbsi:RestrictedCashAndInvestmentsMemberus-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310000902791stpr:CA2023-03-310000902791us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310000902791us-gaap:FairValueInputsLevel2Memberbbsi:RestrictedCashAndInvestmentsMemberus-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791bbsi:RestrictedCashAndInvestmentsMemberus-gaap:USTreasurySecuritiesMember2023-03-310000902791us-gaap:GeneralBusinessMember2023-03-310000902791bbsi:CreditAgreementMember2023-03-310000902791us-gaap:CashAndCashEquivalentsMemberus-gaap:MoneyMarketFundsMemberus-gaap:PortionAtOtherThanFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310000902791us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000902791us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:InvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000902791bbsi:CreditAgreementMembersrt:MinimumMember2022-06-300000902791us-gaap:AdditionalPaidInCapitalMember2022-12-31xbrli:purexbrli:sharesiso4217:USDiso4217:USDxbrli:sharesbbsi:Company

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

For the Quarterly Period Ended March 31, 2023

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From to

Commission File Number 0-21886

 

BARRETT BUSINESS SERVICES, INC.

(Exact name of registrant as specified in its charter)

 

Maryland

 

52-0812977

(State or other jurisdiction of
Incorporation or organization)

 

(IRS Employer
Identification No.)

 

 

 

8100 NE Parkway Drive, Suite 200

 

 

Vancouver, Washington

 

98662

(Address of principal executive offices)

 

(Zip Code)

(360) 828-0700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, Par Value $0.01 Per Share

BBSI

The NASDAQ Stock Market LLC

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 reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of April 19, 2023, 6,806,397 shares of the registrant’s common stock ($0.01 par value) were outstanding.

 

 


 

BARRETT BUSINESS SERVICES, INC.

INDEX TO FORM 10-Q

 

Part I - Financial Information (Unaudited)

Page

Item 1.

Unaudited Interim Condensed Consolidated Financial Statements

3

 

Condensed Consolidated Balance Sheets - March 31, 2023 and December 31, 2022

3

 

Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2023 and 2022

4

 

 

Condensed Consolidated Statements of Comprehensive Income (Loss) - Three Months Ended March 31, 2023 and 2022

5

 

Condensed Consolidated Statements of Stockholders’ Equity - Three Months Ended March 31, 2023

6

 

 

 

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity - Three Months Ended March 31, 2022

 

7

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2023 and 2022

8

 

Notes to Condensed Consolidated Financial Statements

9

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

27

 

Item 4.

Controls and Procedures

27

 

Part II - Other Information

 

 

Item 1.

Legal Proceedings

28

 

Item 1A.

Risk Factors

28

 

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

29

 

Item 6.

Exhibits

29

 

Signature

29

 

 

2


 

PART I – FINANCIAL INFORMATION

Item 1. Unaudited Interim Condensed Consolidated Financial Statements

Barrett Business Services, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In Thousands, Except Par Value)

 

 

March 31,

 

 

December 31,

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

52,635

 

 

$

91,423

 

Investments

 

 

80,088

 

 

 

68,325

 

Trade accounts receivable, net

 

 

188,013

 

 

 

163,838

 

Prepaid expenses and other

 

 

20,605

 

 

 

19,787

 

Restricted cash and investments

 

 

108,165

 

 

 

110,989

 

Total current assets

 

 

449,506

 

 

 

454,362

 

Property, equipment and software, net

 

 

47,272

 

 

 

45,954

 

Operating lease right-of-use assets

 

 

19,273

 

 

 

19,804

 

Restricted cash and investments

 

 

99,117

 

 

 

104,277

 

Goodwill

 

 

47,820

 

 

 

47,820

 

Other assets

 

 

3,358

 

 

 

3,281

 

Deferred income taxes

 

 

10,044

 

 

 

11,440

 

Total assets

 

$

676,390

 

 

$

686,938

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

5,384

 

 

$

8,264

 

Accrued payroll, payroll taxes and related benefits

 

 

235,922

 

 

 

222,331

 

Income taxes payable

 

 

722

 

 

 

610

 

Current operating lease liabilities

 

 

7,029

 

 

 

6,957

 

Other accrued liabilities

 

 

29,314

 

 

 

31,603

 

Workers' compensation claims liabilities

 

 

58,233

 

 

 

62,917

 

Safety incentives liability

 

 

1,784

 

 

 

2,049

 

Total current liabilities

 

 

338,388

 

 

 

334,731

 

Long-term workers' compensation claims liabilities

 

 

143,408

 

 

 

153,070

 

Long-term operating lease liabilities

 

 

13,559

 

 

 

14,225

 

Customer deposits and other long-term liabilities

 

 

7,557

 

 

 

7,070

 

Total liabilities

 

 

502,912

 

 

 

509,096

 

Commitments and contingencies (Notes 4 and 6)

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Common stock, $.01 par value; 20,500 shares authorized, 6,800
   and
6,871 shares issued and outstanding

 

 

68

 

 

 

69

 

Additional paid-in capital

 

 

33,559

 

 

 

32,744

 

Accumulated other comprehensive expense

 

 

(23,942

)

 

 

(27,594

)

Retained earnings

 

 

163,793

 

 

 

172,623

 

Total stockholders' equity

 

 

173,478

 

 

 

177,842

 

Total liabilities and stockholders' equity

 

$

676,390

 

 

$

686,938

 

 

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

3


 

Barrett Business Services, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In Thousands, Except Per Share Amounts)

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

Revenues:

 

 

 

 

 

 

Professional employer services

 

$

232,307

 

 

$

217,433

 

Staffing services

 

 

22,360

 

 

 

28,942

 

Total revenues

 

 

254,667

 

 

 

246,375

 

Cost of revenues:

 

 

 

 

 

 

Direct payroll costs

 

 

16,871

 

 

 

21,921

 

Payroll taxes and benefits

 

 

144,582

 

 

 

135,865

 

Workers' compensation

 

 

51,670

 

 

 

48,236

 

Total cost of revenues

 

 

213,123

 

 

 

206,022

 

Gross margin

 

 

41,544

 

 

 

40,353

 

Selling, general and administrative expenses

 

 

41,226

 

 

 

40,165

 

Depreciation and amortization

 

 

1,677

 

 

 

1,508

 

Loss from operations

 

 

(1,359

)

 

 

(1,320

)

Other income (expense):

 

 

 

 

 

 

Investment income, net

 

 

2,315

 

 

 

1,638

 

Interest expense

 

 

(38

)

 

 

(34

)

Other, net

 

 

36

 

 

 

32

 

Other income, net

 

 

2,313

 

 

 

1,636

 

Income before income taxes

 

 

954

 

 

 

316

 

Provision for income taxes

 

 

135

 

 

 

28

 

Net income

 

$

819

 

 

$

288

 

Basic income per common share

 

$

0.12

 

 

$

0.04

 

Weighted average number of basic common shares
   outstanding

 

 

6,866

 

 

 

7,406

 

Diluted income per common share

 

$

0.12

 

 

$

0.04

 

Weighted average number of diluted common
   shares outstanding

 

 

6,985

 

 

 

7,474

 

 

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

 

4


 

Barrett Business Services, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(In Thousands)

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

Net income

 

$

819

 

 

$

288

 

Unrealized income (losses) on investments, net of tax of $1,397 and ($5,487) in 2023 and 2022, respectively

 

 

3,652

 

 

 

(14,358

)

Comprehensive income (loss)

 

$

4,471

 

 

$

(14,070

)

 

 

 

 

 

 

 

 

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

 

5


 

Barrett Business Services, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

Three Months Ended March 31, 2023

(Unaudited)

(In Thousands)

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Comprehensive

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

(Loss)

 

 

Retained

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Earnings

 

 

Total

 

Balance, December 31, 2022

 

6,871

 

 

$

69

 

 

$

32,744

 

 

$

(27,594

)

 

$

172,623

 

 

$

177,842

 

Common stock issued on exercise of options,
   purchase of ESPP shares and vesting of
   restricted stock units and performance awards

 

31

 

 

 

-

 

 

 

339

 

 

 

-

 

 

 

-

 

 

 

339

 

Common stock repurchased on vesting of
   restricted stock units and performance
   awards

 

(11

)

 

 

-

 

 

 

(1,005

)

 

 

-

 

 

 

-

 

 

 

(1,005

)

Share-based compensation expense

 

-

 

 

 

-

 

 

 

1,928

 

 

 

-

 

 

 

-

 

 

 

1,928

 

Company repurchases of common stock

 

(91

)

 

 

(1

)

 

 

(447

)

 

 

-

 

 

 

(7,582

)

 

 

(8,030

)

Cash dividends on common stock ($0.30 per
   share)

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,067

)

 

 

(2,067

)

Unrealized income on investments, net of tax

 

-

 

 

 

-

 

 

 

-

 

 

 

3,652

 

 

 

-

 

 

 

3,652

 

Net income

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

819

 

 

 

819

 

Balance, March 31, 2023

 

6,800

 

 

$

68

 

 

$

33,559

 

 

$

(23,942

)

 

$

163,793

 

 

$

173,478

 

 

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

 

6


 

Barrett Business Services, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

Three Months Ended March 31, 2022

(Unaudited)

(In Thousands)

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Comprehensive

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Income

 

 

Retained

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

(Loss)

 

 

Earnings

 

 

Total

 

Balance, December 31, 2021

 

7,415

 

 

$

74

 

 

$

29,054

 

 

$

1,079

 

 

$

178,323

 

 

$

208,530

 

Common stock issued on exercise of options,
   purchase of ESPP shares and vesting of
   restricted stock units and performance awards

 

18

 

 

 

-

 

 

 

411

 

 

 

-

 

 

 

-

 

 

 

411

 

Common stock repurchased on vesting of
   restricted stock units and performance
   awards

 

(4

)

 

 

-

 

 

 

(185

)

 

 

-

 

 

 

-

 

 

 

(185

)

Share-based compensation expense

 

-

 

 

 

-

 

 

 

1,830

 

 

 

-

 

 

 

-

 

 

 

1,830

 

Company repurchases of common stock

 

(115

)

 

 

(1

)

 

 

(484

)

 

 

-

 

 

 

(8,090

)

 

 

(8,575

)

Cash dividends on common stock ($0.30 per
   share)

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,229

)

 

 

(2,229

)

Unrealized loss on investments, net of tax

 

-

 

 

 

-

 

 

 

-

 

 

 

(14,358

)

 

 

-

 

 

 

(14,358

)

Net income

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

288

 

 

 

288

 

Balance, March 31, 2022

 

7,314

 

 

$

73

 

 

$

30,626

 

 

$

(13,279

)

 

$

168,292

 

 

$

185,712

 

 

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

 

 

7


 

Barrett Business Services, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In Thousands)

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

819

 

 

$

288

 

Reconciliations of net income to net cash used in
   operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

1,677

 

 

 

1,508

 

Non-cash lease expense

 

 

1,756

 

 

 

1,798

 

Investment amortization and losses recognized

 

 

237

 

 

 

336

 

Deferred Income taxes

 

 

-

 

 

 

25

 

Share-based compensation

 

 

1,928

 

 

 

1,830

 

Changes in certain operating assets and liabilities:

 

 

 

 

 

 

Trade accounts receivable

 

 

(24,175

)

 

 

(100,589

)

Income taxes

 

 

112

 

 

 

223

 

Prepaid expenses and other

 

 

(818

)

 

 

(1,633

)

Accounts payable

 

 

(2,880

)

 

 

(153

)

Accrued payroll, payroll taxes and related benefits

 

 

13,944

 

 

 

85,897

 

Other accrued liabilities

 

 

(2,372

)

 

 

50

 

Workers' compensation claims liabilities

 

 

(14,412

)

 

 

(16,894

)

Safety incentives liability

 

 

(265

)

 

 

(1,038

)

Operating lease liabilities

 

 

(1,819

)

 

 

(1,725

)

Other assets and liabilities, net

 

 

(247

)

 

 

(132

)

Net cash used in operating activities

 

 

(26,515

)

 

 

(30,209

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of property, equipment and software

 

 

(2,995

)

 

 

(6,754

)

Proceeds from sales and maturities of investments

 

 

233

 

 

 

10,796

 

Purchase of restricted investments

 

 

(1,725

)

 

 

(2,272

)

Proceeds from sales and maturities of restricted investments

 

 

2,446

 

 

 

18,735

 

Net cash (used in) provided by investing activities

 

 

(2,041

)

 

 

20,505

 

Cash flows from financing activities:

 

 

 

 

 

 

Payments on long-term debt

 

 

-

 

 

 

(3,510

)

Repurchases of common stock

 

 

(8,030

)

 

 

(8,575

)

Common stock repurchased on vesting of stock awards

 

 

(1,005

)

 

 

(185

)

Dividends paid

 

 

(2,067

)

 

 

(2,229

)

Proceeds from exercise of stock options

 

 

339

 

 

 

411

 

Net cash used in financing activities

 

 

(10,763

)

 

 

(14,088

)

Net decrease in cash, cash equivalents and restricted cash

 

 

(39,319

)

 

 

(23,792

)

Cash, cash equivalents and restricted cash, beginning of period

 

 

107,378

 

 

 

78,629

 

Cash, cash equivalents and restricted cash, end of period

 

$

68,059

 

 

$

54,837

 

 

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

 

8


 

Barrett Business Services, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 1 - Basis of Presentation of Interim Period Statements

The accompanying condensed consolidated financial statements are unaudited and have been prepared by Barrett Business Services, Inc. (“BBSI”, the “Company”, “our” or “we”), 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 accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the condensed consolidated 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 accompanying condensed financial statements are prepared on a consolidated basis. All intercompany account balances and transactions have been eliminated in consolidation. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from such estimates and assumptions. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2022 Annual Report on Form 10-K at pages 31 - 58. The results of operations for an interim period are not necessarily indicative of the results of operations for a full year.

Revenue recognition

Professional employer (“PEO”) services are normally used by organizations to satisfy ongoing needs related to the management of human capital and are governed by the terms of a client services agreement which covers all employees at a particular work site. Staffing revenues relate primarily to short-term staffing, contract staffing and on-site management services. The Company’s performance obligations for PEO and staffing services are satisfied, and the related revenue is recognized, as services are rendered by our workforce.

Our PEO client service agreements have a minimum term of one year, are renewable on an annual basis and typically require 30 days’ written notice to cancel or terminate the contract by either party. In addition, our client service agreements provide for immediate termination upon any payment default of the client regardless of when notice is given. PEO customers are invoiced following the end of each payroll processing cycle, with payment generally due on the invoice date. Staffing customers are generally invoiced weekly based on agreed rates per employee and actual hours worked, typically with payment terms of 30 days. The amount of earned but unbilled revenue is classified as a receivable on the condensed consolidated balance sheets.

We report PEO revenues net of direct payroll costs because we are not the primary obligor for these payments to our clients’ employees. Direct payroll costs include salaries, wages, health insurance, and employee out-of-pocket expenses incurred incidental to employment. We also present revenue net of safety incentives, because these incentives represent consideration payable to customers.

9


 

Cost of revenues

Our cost of revenues for PEO services includes employer payroll-related taxes, workers’ compensation costs and employee benefits costs. Our cost of revenues for staffing services includes direct payroll costs, employer payroll-related taxes, and workers’ compensation costs. Direct payroll costs represent the gross payroll earned by staffing services employees based on salary or hourly wages. Payroll taxes and benefits consist of the employer’s portion of Social Security and Medicare taxes, federal and state unemployment taxes, and employee benefit costs, which primarily comprises health insurance premiums paid to third-party insurers and direct support payroll. Workers’ compensation costs consist primarily of premiums paid to third-party insurers, claims reserves, claims administration fees, legal fees, medical cost containment (“MCC”) expense, state administrative agency fees, third-party broker commissions, risk manager payroll, as well as costs associated with operating our two wholly owned insurance companies, Associated Insurance Company for Excess (“AICE”) and Ecole Insurance Company (“Ecole”).

Cash and cash equivalents

We consider non-restricted short-term investments that are highly liquid, readily convertible into cash, with maturities at acquisition of less than three months to be cash equivalents for purposes of the condensed consolidated statements of cash flows and condensed consolidated balance sheets. The Company maintains cash balances in bank accounts that normally exceed FDIC insured limits. The Company has not experienced any losses related to its cash concentration.

Investments

The Company classifies investments as available-for-sale. The Company’s investments are reported at fair value with unrealized gains and losses, net of taxes, shown as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Investments are recorded as current on the condensed consolidated balance sheets as the invested funds are available for current operations. Management considers available evidence in evaluating potential impairment of investments, including the extent to which fair value is less than cost and adverse conditions related to the security. In the event of a credit loss, an allowance would be recognized to the extent that the fair value of the security is less than the present value of the expected future cash flows. Realized gains and losses on sales of investments are included in investment income in our condensed consolidated statements of operations.

Restricted cash and investments

The Company holds restricted cash and investments primarily for the future payment of insurance premiums and workers’ compensation claims. These investments are categorized as available-for-sale. They are reported at fair value with unrealized gains and losses, net of taxes, shown as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Restricted cash and investments are classified as current and noncurrent on the condensed consolidated balance sheets based on the nature of the restriction. Management considers available evidence in evaluating potential impairment of restricted investments, including the extent to which fair value is less than cost and adverse conditions related to the security. In the event of a credit loss, an allowance would be recognized to the extent that the fair value of the security is less than the present value of the expected future cash flows. Realized gains and losses on sales of restricted investments are included in investment income in our condensed consolidated statements of operations.

Restricted cash and investments also includes investments held as part of the Company’s deferred compensation plan. These investments are classified as trading securities and are recorded at fair value with unrealized gains and losses reported as a component of income (loss) from operations.

10


 

Allowance for doubtful accounts

The Company had an allowance for doubtful accounts of $885,000 and $893,000 at March 31, 2023 and December 31, 2022, respectively. We make estimates of the collectability of our accounts receivable for services provided to our customers based on future expected credit losses. Management analyzes historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in customers’ payment trends when evaluating the adequacy of the allowance for doubtful accounts. If the financial condition of our customers deteriorates, resulting in an impairment of their ability to make payments, additional allowances may be required.

Workers’ compensation claims liabilities

Our workers’ compensation claims liabilities do not represent an exact calculation of liability but rather management’s best estimate, utilizing actuarial expertise and projection techniques, at a given reporting date. The estimated liability for open workers’ compensation claims is based on an evaluation of information provided by our third-party administrator for workers’ compensation claims, coupled with an actuarial estimate of future loss development with respect to reported claims and incurred but not reported claims (together, “IBNR”). Workers’ compensation claims liabilities include case reserve estimates for reported losses, plus additional amounts for estimated IBNR claims, MCC and legal costs, unallocated loss adjustment expenses and estimated future recoveries. The estimate of incurred costs expected to be paid within one year is included in current liabilities, while the estimate of incurred costs expected to be paid beyond one year is included in long-term liabilities on our condensed consolidated balance sheets. These estimates are reviewed at least quarterly and adjustments to estimated liabilities are reflected in current operating results as they become known.

The process of arriving at an estimate of unpaid claims and claims adjustment expense involves a high degree of judgment and is affected by both internal and external events, including changes in claims handling practices, changes in reserve estimation procedures, inflation, trends in the litigation and settlement of pending claims, and legislative changes.

Our estimates are based on actuarial analysis and informed judgment, derived from individual experience and expertise applied to multiple sets of data and analyses. We consider significant facts and circumstances known both at the time that loss reserves are initially established and as new facts and circumstances become known. Due to the inherent uncertainty underlying loss reserve estimates, the expenses incurred through final resolution of our liability for our workers’ compensation claims will likely vary from the related loss reserves at the reporting date. Therefore, as specific claims are paid out in the future, actual paid losses may be materially different from our current loss reserves.

A basic premise in most actuarial analyses is that historical data and past patterns demonstrated in the incurred and paid historical data form a reasonable basis upon which to project future outcomes, absent a material change. Significant structural changes to the available data can materially impact the reserve estimation process. To the extent a material change affecting the ultimate claim liability becomes known, such change is quantified to the extent possible through an analysis of internal Company data and, if available and when appropriate, external data. Nonetheless, actuaries exercise a considerable degree of judgment in the evaluation of these factors and the need for such actuarial judgment is more pronounced when faced with material uncertainties.

Safety incentives

We accrue for and present expected safety incentives as a reduction of revenue. Safety incentives represent cash incentives paid to certain PEO client companies for maintaining safe-work practices and minimizing workplace injuries. The incentive is based on a percentage of annual payroll and is paid annually to customers who meet predetermined workers’ compensation claims cost objectives. Safety incentive payments are made only after closure of all workers’ compensation claims incurred during the customer’s contract period. The safety incentive liability is estimated and accrued each month based upon contract year-to-date payroll and the then current amount of the customer’s estimated workers’ compensation claims reserves as established by us and our third-party administrator. In July 2020, the Company began limiting its safety incentive offering in certain markets. The Company provided $1.8 million and $2.0 million at March 31, 2023 and December 31, 2022, respectively, as an estimate of the liability for unpaid safety incentives.

11


 

Customer deposits

We require deposits from certain PEO customers to cover a portion of our accounts receivable due from such customers in the event of default of payment.

Comprehensive income (loss)

Comprehensive income (loss) includes all changes in equity during a period except those that resulted from investments by or distributions to the Company’s stockholders.

Other comprehensive income (loss) refers to revenues, expenses, gains and losses that under U.S. generally accepted accounting principles (“GAAP”) are included in comprehensive income (loss), but excluded from net income (loss) as these amounts are recorded directly as an adjustment to stockholders’ equity. Our other comprehensive income (loss) comprises unrealized holding gains and losses on our available-for-sale investments.

Statements of cash flows

Interest paid during the three months ended March 31, 2023 and 2022 did not materially differ from interest expense. Income taxes paid by the Company during the three months ended March 31, 2023 and 2022 totaled $0.01 million and $0.04 million, respectively.

Bank deposits and other cash equivalents that are restricted for use are classified as restricted cash. The table below reconciles the cash, cash equivalents and restricted cash balances from our condensed consolidated balance sheets to the amounts reported on the condensed consolidated statements of cash flows (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022