SYS-CON MEDIA Authors: Jackie Kahle, Pat Romanski, Elizabeth White, Yeshim Deniz, Glenn Rossman

News Feed Item

BBSI Reports First Quarter 2014 Financial Results

Q1 Net Revenues Up 21% to $135.1 Million; Non-GAAP Gross Revenues Up 23% to $727.4 Million

VANCOUVER, WA -- (Marketwired) -- 04/29/14 -- Barrett Business Services, Inc. ("BBSI" or the "Company") (NASDAQ: BBSI), a leading provider of business management solutions, reported financial results for the first quarter ended March 31, 2014.

First Quarter 2014 Financial Summary vs. Year-Ago Quarter

  • Net revenues up 21% to $135.1 million
  • Gross revenues up 23% to $727.4 million
  • Net loss was $3.6 million, or $(0.50) per diluted share, compared to a net loss of $2.5 million, or $(0.36) per diluted share

First Quarter 2014 Financial Results

Net revenues in the first quarter of 2014 increased 21% to $135.1 million compared to $111.6 million in the first quarter of 2013.

Total non-GAAP gross revenues in the first quarter of 2014 increased 23% to $727.4 million compared to $591.2 million in the first quarter of 2013 (see "Reconciliation of Non-GAAP Financial Measures" below). The increase was due primarily to the continued build in the Company's co-employed client count and same-store sales growth, partially offset by the vetting of specific clients who no longer met certain performance criteria.

Net loss for the first quarter of 2014 was $3.6 million, or $(0.50) per diluted share, compared to a net loss of $2.5 million, or $(0.36) per diluted share, in the year-ago quarter. The Company historically incurs losses in the first quarter due to the higher effective payroll taxes at the beginning of each year.

At March 31, 2014, the Company's cash, cash equivalents, marketable securities, and restricted securities totaled $147.9 million compared to $143.2 million at December 31, 2013. At March 31, 2014, the Company had no outstanding borrowings on its revolving credit facility.

Management Commentary

"BBSI's 23% increase in gross revenues during the first quarter reflects our continued focus on delivering a management platform that is both predictable and adaptable in how it supports well-run companies over the long term," said Michael Elich, president and CEO of BBSI. "Vital to this long-term model is a client vetting process which has driven our 90%-plus retention rate. Over the past several months, however, the size of clients that we ultimately determined did not fit our platform has been larger than in the past. By identifying and canceling clients who were utilizing a disproportionate level of BBSI resources, we expect to achieve a long-term increase in efficiencies and quality of operations, which will benefit remaining and future clients.

"This recent trend does not change our long-term view about our untapped market opportunity, the health of our client base and the strength of our referral network. In fact, we see it as more episodic and expect we will return to a higher pace of growth as we work to backfill lost revenues created by the vetting process. Given this view, we remain well-positioned to continue gaining market share and deliver another record year for our shareholders."

Second Quarter 2014 Outlook

For the second quarter of 2014, the Company expects gross revenues to increase at least 15% to between $780 million and $800 million compared to $675.0 million in the second quarter of 2013. Diluted income per common share in the second quarter of 2014 is expected to be between $0.93 and $0.98 compared to $0.80 in the second quarter of 2013.

Conference Call

BBSI will conduct a conference call tomorrow, April 30, 2014 at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) to discuss its financial results for the first quarter ended March 31, 2014. The Company's president and CEO Michael Elich and CFO James Miller will host the call, followed by a question and answer period.

Date: Wednesday, April 30, 2014
Time: 12:00 p.m. Eastern time (9:00 a.m. Pacific time)
Toll-free dial-in number: 1-877-941-1428
International dial-in number: 1-480-629-9665
Conference ID: 4679014

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

The conference call will be broadcast live and available for replay at http://public.viavid.com/index.php?id=108701 and via BBSI's investor relations section at www.barrettbusiness.com.

A replay of the conference call will be available after 3:00 p.m. Eastern time on the same day through May 30, 2014.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 4679014

Reconciliation of Non-GAAP Financial Measures

In addition to the results prepared in accordance with generally accepted accounting principles ("GAAP"), the Company is disclosing non-GAAP gross revenues.

The Company reports its Professional Employer Service revenues on a net basis because it is not the primary obligor for the services provided by the Company's co-employed clients to their customers. The gross revenues and cost of revenues information below, although not in accordance with 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)
                                                  First Quarter Ended
(in thousands)                                         March 31,
                                           ---------------------------------
                                                 2014             2013
                                           ---------------- ----------------

Revenues:
  Professional employer services           $        693,926 $        561,483
  Staffing services                                  33,451           29,733
                                           ---------------- ----------------
    Total revenues                                  727,377          591,216
                                           ---------------- ----------------
Cost of revenues:
  Direct payroll costs                              613,320          498,738
  Payroll taxes and benefits                         72,817           59,123
  Workers' compensation                              31,934           25,044
                                           ---------------- ----------------
    Total cost of revenues                          718,071          582,905
                                           ================ ================
Gross margin                               $          9,306 $          8,311
                                           ================ ================


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


                                          (Unaudited)
                                  Three Months Ended March 31,
                   ---------------------------------------------------------
                     Gross Revenue                            Net Revenue
(in thousands)      Reporting Method   Reclassification     Reporting Method
                   ----------------- --------------------  -----------------
                     2014     2013      2014       2013      2014     2013
                   -------- -------- ---------  ---------  -------- --------
Revenues:
  Professional
   employer
   services        $693,926 $561,483 $(592,237) $(479,665) $101,689 $ 81,818
  Staffing
   services          33,451   29,733         -          -    33,451   29,733
                   -------- -------- ---------  ---------  -------- --------
    Total revenues $727,377 $591,216 $(592,237) $(479,665) $135,140 $111,551
                   ======== ======== =========  =========  ======== ========
Cost of revenues   $718,071 $582,905 $(592,237) $(479,665) $125,834 $103,240
                   ======== ======== =========  =========  ======== ========


About BBSI

BBSI (NASDAQ: BBSI) is a leading provider of business management solutions, combining human resource outsourcing and professional management consulting to create a unique operational platform that differentiates it from competitors. The Company's integrated platform is built upon expertise in payroll processing, employee benefits, workers' compensation coverage, risk management and workplace safety programs, and human resource administration. BBSI's partnerships help businesses of all sizes improve the efficiency of their operations. The Company works with more than 3,000 clients across all lines of business in 23 states. For more information, please visit www.barrettbusiness.com.

Forward-Looking Statements

Statements in this release about future events or performance, including gross revenues and earnings expectations for the second quarter of 2014, 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 retain current clients and attract new clients, the availability of financing or other sources of capital, future workers' compensation claims experience, the effect of changes in the workers' compensation regulatory environment in one or more of the Company's primary markets, the collectability 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 2013 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 are 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.



                       Barrett Business Services, Inc.
                          Condensed Balance Sheets
                                 (Unaudited)

                                               March 31,      December 31,
(in thousands)                                   2014             2013
                                           ---------------- ----------------
                  Assets
Current assets:
  Cash and cash equivalents                $         66,268 $         93,557
  Marketable securities                              31,013           19,787
  Trade accounts receivable, net                     95,956           85,586
  Income taxes receivable                             1,596                -
  Prepaid expenses and other                          4,621            3,026
  Deferred income taxes                               8,936            8,929
                                           ---------------- ----------------
    Total current assets                            208,390          210,885
Marketable securities                                 6,680            5,909
Property, equipment and software, net                21,779           20,549
Restricted certificates of deposit                   12,789           12,789
Restricted marketable securities and
 workers' compensation deposits                      31,133           11,205
Other assets                                          4,028            4,165
Goodwill                                             47,820           47,820
                                           ---------------- ----------------
                                           $        332,619 $        313,322
                                           ================ ================

   Liabilities and Stockholders' Equity
Current liabilities:
  Current portion of long-term debt        $            220 $            220
  Accounts payable                                    2,382            3,252
  Accrued payroll, payroll taxes and
   related benefits                                 112,000           92,516
  Income taxes payable                                    -            1,236
  Other accrued liabilities                             411              313
  Workers' compensation claims liabilities           38,306           35,841
  Safety incentives liabilities                      12,192           13,086
                                           ---------------- ----------------
    Total current liabilities                       165,511          146,464
Long-term workers' compensation claims
 liabilities                                         81,829           76,603
Long term debt                                        4,998            5,053
Deferred income taxes                                10,392           10,787
Customer deposits and other long-term
 liabilities                                          1,799            1,862
Stockholders' equity                                 68,090           72,553
                                           ---------------- ----------------
                                           $        332,619 $        313,322
                                           ================ ================



                       Barrett Business Services, Inc.
                    Consolidated Statements of Operations

                                                     (Unaudited)
(in thousands, except per share amounts)         First Quarter Ended
                                                      March 31,
                                         ----------------------------------
                                               2014              2013
                                         ----------------  ----------------
Revenues:
  Professional employer service fees     $        101,689  $         81,818
  Staffing services                                33,451            29,733
                                         ----------------  ----------------
    Total revenues                                135,140           111,551
                                         ----------------  ----------------
Cost of revenues:
  Direct payroll costs                             25,417            22,296
  Payroll taxes and benefits                       72,817            59,123
  Workers' compensation                            27,600            21,821
                                         ----------------  ----------------
    Total cost of revenues                        125,834           103,240
                                         ----------------  ----------------
Gross margin                                        9,306             8,311
Selling, general and administrative
 expenses                                          14,369            11,811
Depreciation and amortization                         584               460
                                         ----------------  ----------------
Loss from operations                               (5,647)           (3,960)
Other income, net                                      90                87
                                         ----------------  ----------------
Loss before taxes                                  (5,557)           (3,873)
Benefit from income taxes                          (1,974)           (1,324)
                                         ----------------  ----------------
Net loss                                 $         (3,583) $         (2,549)
                                         ================  ================
Basic loss per common share              $          (0.50) $          (0.36)
                                         ================  ================
Weighted average basic common shares
 outstanding                                        7,170             7,022
                                         ================  ================
Diluted loss per common share            $          (0.50) $          (0.36)
                                         ================  ================
Weighted average diluted common shares
 outstanding                                        7,170             7,022
                                         ================  ================



Add to Digg Bookmark with del.icio.us Add to Newsvine

Company Contact:
Michael L. Elich
President and CEO
Tel 1-360-828-0700

Investor Relations:
Liolios Group, Inc.
Scott Liolios or Cody Slach
Tel 1-949-574-3860
Email Contact

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@CloudExpo Stories
SYS-CON Events announced today that SOA Software, an API management leader, will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. SOA Software is a leading provider of API Management and SOA Governance products that equip business to deliver APIs and SOA together to drive their company to meet its business strategy quickly and effectively. SOA Software’s technology helps businesses to accel...
SYS-CON Events announced today that Utimaco will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Utimaco is a leading manufacturer of hardware based security solutions that provide the root of trust to keep cryptographic keys safe, secure critical digital infrastructures and protect high value data assets. Only Utimaco delivers a general-purpose hardware security module (HSM) as a customiz...
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity.
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic • Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff hap...
SYS-CON Events announced today that ElasticBox is holding a Hackathon at DevOps Summit, November 6 from 12 pm -4 pm at the Santa Clara Convention Center in Santa Clara, CA. You can enter as an individual or team of up to 10 developers. A New Star Is Born Every Month! All completed ElasticBoxes will then be sent to a judging panel - 12 winners will be featured on the ElasticBox website in 2015. All entrants will receive five full enterprise licenses for one year + ElasticBox headphones + Elasti...
Once the decision has been made to move part or all of a workload to the cloud, a methodology for selecting that workload needs to be established. How do you move to the cloud? What does the discovery, assessment and planning look like? What workloads make sense? Which cloud model makes sense for each workload? What are the considerations for how to select the right cloud model? And how does that fit in with the overall IT tranformation? In his session at 15th Cloud Expo, John Hatem, head of V...
Cloud services are the newest tool in the arsenal of IT products in the market today. These cloud services integrate process and tools. In order to use these products effectively, organizations must have a good understanding of themselves and their business requirements. In his session at 15th Cloud Expo, Brian Lewis, Principal Architect at Verizon Cloud, will outline key areas of organizational focus, and how to formalize an actionable plan when migrating applications and internal services to...
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, will discuss how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP ...
Ixia develops amazing products so its customers can connect the world. Ixia helps its customers provide an always-on user experience through fast, secure delivery of dynamic connected technologies and services. Through actionable insights that accelerate and secure application and service delivery, Ixia's customers benefit from faster time to market, optimized application performance and higher-quality deployments.
SYS-CON Events announced today that Calm.io has been named “Bronze Sponsor” of DevOps Summit Silicon Valley, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Calm.io is a cloud orchestration platform for AWS, vCenter, OpenStack, or bare metal, that runs your CL tools puppet, Chef, shell, git, Jenkins, nagios, and will soon support New Relic and Docker. It can run hosted, or on premise and provides VM automation / expiry, self-service portals,...
In her General Session at 15th Cloud Expo, Anne Plese, Senior Consultant, Cloud Product Marketing, at Verizon Enterprise, will focus on finding the right mix of renting vs. buying Oracle capacity to scale to meet business demands, and offer validated Oracle database TCO models for Oracle development and testing environments. Anne Plese is a marketing and technology enthusiast/realist with over 19+ years in high tech. At Verizon Enterprise, she focuses on driving growth for the Verizon Cloud pla...
SYS-CON Events announced today that Aria Systems, the recurring revenue expert, has been named "Bronze Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Aria Systems helps leading businesses connect their customers with the products and services they love. Industry leaders like Pitney Bowes, Experian, AAA NCNU, VMware, HootSuite and many others choose Aria to power their recurring revenue bu...
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce t...
As Platform as a Service (PaaS) matures as a category, developers should have the ability to use the programming language of their choice to build applications and have access to a wide array of services. Bluemix is IBM's open cloud development platform that enables users to easily build cloud-based, creative mobile and web applications without having to spend large amounts of time and resources on configuring infrastructure and multiple software licenses. In this track, you will learn about the...
Blue Box has closed a $10 million Series B financing. The round was led by a strategic investor and included participation from prior investors including Voyager Capital and Founders Collective, as well as the Blue Box executive team. This round follows a $4.3 million Series A closed in December of 2012 and led by Voyager Capital. In May of this year, the company announced general availability of its private cloud as a service offering, Blue Box Cloud. Since that release, the company has dem...
SYS-CON Events announced today that Verizon has been named "Gold Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Verizon Enterprise Solutions creates global connections that generate growth, drive business innovation and move society forward. With industry-specific solutions and a full range of global wholesale offerings provided over the company's secure mobility, cloud, strategic network...
SimpleECM is the only platform to offer a powerful combination of enterprise content management (ECM) services, capture solutions, and third-party business services providing simplified integrations and workflow development for solution providers. SimpleECM is opening the market to businesses of all sizes by reinventing the delivery of ECM services. Our APIs make the development of ECM services simple with the use of familiar technologies for a frictionless integration directly into web applicat...
The only place to be June 9-11 is Cloud Expo & @ThingsExpo 2015 East at the Javits Center in New York City. Join us there as delegates from all over the world come to listen to and engage with speakers & sponsors from the leading Cloud Computing, IoT & Big Data companies. Cloud Expo & @ThingsExpo are the leading events covering the booming market of Cloud Computing, IoT & Big Data for the enterprise. Speakers from all over the world will be hand-picked for their ability to explore the economic...
Cloudwick, the leading big data DevOps service and solution provider to the Fortune 1000, announced Big Loop, its multi-vendor operations platform. Cloudwick Big Loop creates greater collaboration between Fortune 1000 IT staff, developers and their database management systems as well as big data vendors. This allows customers to comprehensively manage and oversee their entire infrastructure, which leads to more successful production cluster operations, and scale-out. Cloudwick Big Loop supports ...
To manage complex web services with lots of calls to the cloud, many businesses have invested in Application Performance Management (APM) and Network Performance Management (NPM) tools. Together APM and NPM tools are essential aids in improving a business’s infrastructure required to support an effective web experience… but they are missing a critical component – Internet visibility. Internet connectivity has always played a role in customer access to web presence, but in the past few years use...