VANCOUVER, Wash., July 28, 2009 (GLOBE NEWSWIRE) -- As a result of a previously-reported change in estimate of the ultimate cost of the Company's self-insured workers' compensation claim liabilities, Barrett Business Services, Inc. (Nasdaq:BBSI) recorded an increase to its workers' compensation reserve of approximately $11.8 million pre-tax, or $7.4 million after tax equating to $.72 per share, resulting in a diluted loss per share of $.65, for the second quarter of 2009. Without the effect of the increase in the workers' compensation claim liabilities, net income per diluted share for the 2009 second quarter would have been $.07.
The Company reported today a net loss of $6.7 million for the second quarter ended June 30, 2009, a decline of $10.0 million from net income of $3.3 million, or diluted earnings per share of $.29, for the second quarter of 2008.
Net revenues for the second quarter ended June 30, 2009 totaled $57.3 million, a decrease of approximately $14.9 million or 20.7% from the $72.2 million for the same quarter in 2008.
($ in thousands,
except per share (Unaudited) (Unaudited)
amounts) Second Quarter Ended Six Months Ended
June 30, June 30,
------------------- -------------------
Results of Operations 2009 2008 2009 2008
-------------------------- -------- -------- -------- --------
Revenues:
Staffing services $ 28,002 $ 40,604 $ 52,044 $ 76,423
Professional employer
service fees 29,263 31,579 56,293 61,954
-------- -------- -------- --------
Total revenues 57,265 72,183 108,337 138,377
-------- -------- -------- --------
Cost of revenues:
Direct payroll costs 21,127 29,943 39,196 56,326
Payroll taxes and
benefits 19,434 20,721 42,061 45,166
Workers' compensation 18,927 7,465 25,614 14,269
-------- -------- -------- --------
Total cost of revenues 59,488 58,129 106,871 115,761
-------- -------- -------- --------
Gross margin (2,223) 14,054 1,466 22,616
Selling, general and
administrative expenses 8,336 9,165 16,376 17,834
Depreciation and
amortization 410 382 796 758
-------- -------- -------- --------
(Loss) income from
operations (10,969) 4,507 (15,706) 4,024
Other income, net 293 587 408 1,213
-------- -------- -------- --------
(Loss) income before
taxes (10,676) 5,094 (15,298) 5,237
(Benefit from) provision
for income taxes (3,944) 1,844 (5,392) 1,896
-------- -------- -------- --------
Net (loss) income $ (6,732) $ 3,250 $ (9,906) $ 3,341
-------- -------- -------- --------
Basic (loss) earnings
per share $ (.65) $ .30 $ (.95) $ .30
-------- -------- -------- --------
Weighted average basic
shares outstanding 10,355 10,937 10,426 11,012
-------- -------- -------- --------
Diluted (loss) earnings
per share $ (.65) $ .29 $ (.95) $ .30
-------- -------- -------- --------
Weighted average diluted
shares outstanding 10,355 11,221 10,426 11,322
-------- -------- -------- --------
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 Company's 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 Company's business activity and more useful in managing its operations.
(Unaudited) (Unaudited)
Second Quarter Ended Six Months Ended
(in thousands) June 30, June 30,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
Revenues:
Staffing services $ 28,002 $ 40,604 $ 52,044 $ 76,423
Professional employer
services 220,150 228,891 423,975 452,652
--------- --------- --------- ---------
Total revenues 248,152 269,495 476,019 529,075
--------- --------- --------- ---------
Cost of revenues:
Direct payroll costs 210,720 225,887 404,276 443,740
Payroll taxes and
benefits 19,434 20,721 42,061 45,166
Workers' compensation 20,221 8,833 28,216 17,553
--------- --------- --------- ---------
Total cost of
revenues 250,375 255,441 474,553 506,459
--------- --------- --------- ---------
Gross margin $ (2,223) $ 14,054 $ 1,466 $ 22,616
--------- --------- --------- ---------
Gross revenues of $248.2 million for the second quarter ended June 30, 2009 declined 7.9% from the similar period in 2008.
A reconciliation of non-GAAP gross revenues to net revenues is as follows:
For the second quarters ended June 30, 2009 and 2008:
(Unaudited)
Three Months Ended June 30,
-----------------------------------------------------------
(in thousands)
Gross Revenue Net Revenue
Reporting Method Reclassification Reporting Method
------------------- ------------------- -------------------
2009 2008 2009 2008 2009 2008
--------- --------- --------- --------- --------- ---------
Revenues:
Staffing
ser-
vices $ 28,002 $ 40,604 $ -- $ -- $ 28,002 $ 40,604
Profes-
sional
employer
services 220,150 228,891 (190,887) (197,312) 29,263 31,579
--------- --------- --------- --------- --------- ---------
Total
re- $ 248,152 $ 269,495 $(190,887)$(197,312)$ 57,265 $ 72,183
venues --------- --------- --------- --------- --------- ---------
Cost of
revenues $ 250,375 $ 255,441 $(190,887)$(197,312)$ 59,488 $ 58,129
--------- --------- --------- --------- --------- ---------
For the six months ended June 30, 2009 and 2008:
(Unaudited)
Six Months Ended June 30,
-----------------------------------------------------------
(in thousands)
Gross Revenue Net Revenue
Reporting Method Reclassification Reporting Method
------------------- ------------------- -------------------
2009 2008 2009 2008 2009 2008
--------- --------- --------- --------- --------- ---------
Revenues:
Staffing
ser-
vices $ 52,044 $ 76,423 $ -- $ -- $ 52,044 $ 76,423
Profes-
sional
employer
services 423,975 452,652 (367,682) (390,698) 56,293 61,954
--------- --------- --------- --------- --------- ---------
Total
re- $ 476,019 $ 529,075 $(367,682)$(390,698)$ 108,337 $ 138,377
venues --------- --------- --------- --------- --------- ---------
Cost of
revenues $ 474,553 $ 506,459 $(367,682)$(390,698)$ 106,871 $ 115,761
--------- --------- --------- --------- --------- ---------
The following summarizes the unaudited consolidated balance sheets at June 30, 2009 and December 31, 2008.
June 30, Dec. 31,
(in thousands) 2009 2008
-------- --------
Assets
------
Current assets:
Cash and cash equivalents $ 27,137 $ 42,214
Marketable securities 13,114 17,968
Trade accounts receivable, net 41,466 34,389
Income taxes receivable 2,555 --
Prepaid expenses and other 2,796 1,440
Deferred income taxes 3,781 2,373
Workers' compensation receivables for insured
claims 225 225
-------- --------
Total current assets 91,074 98,609
Marketable securities 11,184 427
Goodwill, net 47,338 47,338
Property, equipment and software, net 15,265 15,503
Restricted marketable securities and workers'
compensation deposits 3,283 2,701
Other assets 1,639 1,645
Workers' compensation receivables for
insured claims 3,626 3,837
-------- --------
$173,409 $170,060
-------- --------
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Accounts payable $ 876 $ 881
Accrued payroll, payroll taxes and related
benefits 38,851 32,296
Other accrued liabilities 453 902
Workers' compensation claims liabilities 11,299 7,186
Workers' compensation claims liabilities for
insured claims 225 225
Safety incentives liabilities 4,593 4,626
-------- --------
Total current liabilities 56,297 46,116
Customer deposits 626 706
Long-term workers' compensation claims
liabilities 13,667 5,235
Long-term workers' compensation liabilities
for insured claims 2,366 2,438
Deferred income taxes 2,946 4,394
Deferred gain on sale and leaseback 488 549
Stockholders' equity 97,019 110,622
-------- --------
$173,409 $170,060
-------- --------
Outlook for Third Quarter 2009
The Company also disclosed today limited financial guidance with respect to its operating results for the third quarter ending September 30, 2009. The Company expects gross revenues for the third quarter of 2009 to range from $258 million to $263 million, as compared to $288.4 million for the third quarter of 2008, and anticipates diluted earnings per share for the third quarter of 2009 to range from $.17 to $.20 per share, as compared to diluted earnings per share of $.06 for the same period a year ago. A reconciliation of estimated gross revenues to estimated GAAP net revenues for the third quarter of 2009 is not included because PEO revenues and cost of PEO revenues for the period are not reasonably estimable.
Declaration of Quarterly Cash Dividend
The Company announced today that its board of directors declared a regular quarterly cash dividend of $0.08 per share. The cash dividend will be paid on September 11, 2009 to all stockholders of record as of August 28, 2009.
Conference Call
On July 29 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 second quarter 2009 operating results. To participate in the call, dial (877) 356-3717. The call identification number is 21826392. 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 July 29, 2009 at 12:00 p.m. PT and ending on Wednesday, August 5, 2009. To listen to the recording, dial (800) 642-1687 and enter conference identification code 21826392.
Statements in this release about future events or performance, including gross revenues and earnings expectations for the third 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 Company's investment portfolio, among others. Other important factors that may affect the Company's future prospects are described in the Company's 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.