Exhibit 99.1

 

 

BBSI Reports Second Quarter 2015 Financial Results

 

- Q2 Net Revenues up 21% to $182.4 Million, Drives 21% Increase in Diluted Earnings per Share to $1.19 -

 

VANCOUVER, Washington, July 28, 2015 – Barrett Business Services, Inc. (“BBSI” or the “Company”) (NASDAQ: BBSI), a leading provider of business management solutions, reported financial results for the second quarter ended June 30, 2015.

 

Second Quarter 2015 Financial Summary vs. Year-Ago Quarter

 

·

Net revenues up 21% to $182.4 million

 

·

Gross revenues up 22% to $971.9 million

 

·

Net income increased 20% to $8.7 million

 

·

Diluted earnings per share increased 21% to $1.19

 

Second Quarter 2015 Financial Results

 

Net revenues in the second quarter of 2015 increased 21% to $182.4 million compared to $151.1 million in the second quarter of 2014.

 

Total non-GAAP gross revenues in the second quarter of 2015 increased 22% to $971.9 million compared to $798.4 million in the second quarter of 2014 (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.

 

Net income for the second quarter of 2015 increased 20% to $8.7 million compared to net income of $7.3 million in the year-ago quarter. Diluted earnings per share in the second quarter of 2015 increased 21% to $1.19 compared to $0.98 per diluted share in the year-ago quarter.

 

At June 30, 2015, the Company’s cash, cash equivalents, marketable securities, and restricted securities totaled $248.0 million compared to $239.1 million at December 31, 2014.

 

Management Commentary

 

“We are pleased with our Q2 results as they continue to be driven by the organic growth of our existing client companies and the expansion of our new client count,” said Michael Elich, president and CEO of BBSI. “Same-store sales grew 9.2% and we experienced a net build of 201 clients. We also continue to experience favorable trends related to workers’ compensation, while continuing to mature our base of operations and areas that support our growth.

 

“We reiterate our rolling 12-month outlook of 18% gross revenue growth due to the health of our clients’ businesses, the ability of our new business channels to convert high-quality companies to clients, and the scalability of our operations. Given this outlook, we look forward to a record year of financial and operational performance in 2015.”

 

 

12 Month Outlook

 

BBSI expects gross revenues for the next 12-month period to increase approximately 18%. Included in this expectation is a high single-digit contribution from same-store sales growth as well as growth from new business consistent with current trends.

 

Conference Call

 

BBSI will conduct a conference call tomorrow, July 29, 2015, at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) to discuss its financial results for the second quarter ended June 30, 2015.

 

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, July 29, 2015

Time: 12:00 p.m. Eastern time (9:00 a.m. Pacific time)

Toll-free dial-in number: 1-888-510-1765

International dial-in number: 1-719-457-2689

Conference ID: 2075811

 

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=115474
and via BBSI’s investor relations section of the BBSI website 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 August 29, 2015.

 

Toll-free replay number: 1-877-870-5176

International replay number: 1-858-384-5517

Replay ID: 2075811

 

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)								(Unaudited)
		Second Quarter Ended								Six Months Ended
(in thousands)		June 30,								June 30,
		2015				2014				2015				2014
Revenues:
Professional employer services		$	929,521			$	759,838			$	1,787,281			$	1,453,764
Staffing services			42,347				38,566				81,513				72,017
Total revenues			971,868				798,404				1,868,794				1,525,781
Cost of revenues:
Direct payroll costs			815,773				672,078				1,570,208				1,285,398
Payroll taxes and benefits			72,146				61,130				160,440				133,947
Workers' compensation			47,785				35,344				93,006				67,278
Total cost of revenues			935,704				768,552				1,823,654				1,486,623
Gross margin		$	36,164			$	29,852			$	45,140			$	39,158

  

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

 

		(Unaudited)
		Three Months Ended June 30,
		Gross Revenue																Net Revenue
(in thousands)		Reporting Method								Reclassification								Reporting Method
		2015				2014				2015				2014				2015				2014
Revenues:
Professional
employer services		$	929,521			$	759,838			$	(789,473	)		$	(647,335	)		$	140,048			$	112,503
Staffing services			42,347				38,566				-				-				42,347				38,566
Total revenues		$	971,868			$	798,404			$	(789,473	)		$	(647,335	)		$	182,395			$	151,069
Cost of revenues		$	935,704			$	768,552			$	(789,473	)		$	(647,335	)		$	146,231			$	121,217

   

 

		(Unaudited)
		Six Months Ended June 30,
		Gross Revenue																Net Revenue
(in thousands)		Reporting Method								Reclassification								Reporting Method
		2015				2014				2015				2014				2015				2014
Revenues:
Professional
employer services		$	1,787,281			$	1,453,764			$	(1,519,482	)		$	(1,239,572	)		$	267,799			$	214,192
Staffing services			81,513				72,017				-				-				81,513				72,017
Total revenues		$	1,868,794			$	1,525,781			$	(1,519,482	)		$	(1,239,572	)		$	349,312			$	286,209
Cost of revenues		$	1,823,654			$	1,486,623			$	(1,519,482	)		$	(1,239,572	)		$	304,172			$	247,051

 

 

 

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 expectations for gross revenues for the next 12 months, 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, the potential for material deviations from expected 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, the carrying value of deferred income tax assets and goodwill, 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 2014 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)

 

		June 30,				December 31,
(in thousands)		2015				2014
Assets
Current assets:
Cash and cash equivalents		$	4,439			$	11,544
Marketable securities			-				29,957
Trade accounts receivable, net			137,862				102,627
Income taxes receivable			8,737				11,421
Prepaid expenses and other			5,689				3,813
Restricted certifcates of deposit			26,015				-
Restricted marketable securities and workers' compensation deposits			21,343				3,776
Deferred income taxes			15,774				15,791
Total current assets			219,859				178,929
Marketable securities			6,048				20,930
Property, equipment and software, net			22,648				22,675
Restricted certificates of deposit			88,320				114,335
Restricted marketable securities and workers' compensation deposits			101,828				58,533
Other assets			4,840				5,306
Goodwill			47,820				47,820
		$	491,363			$	448,528
Liabilities and Stockholders' Equity
Current liabilities:
Line of credit		$	3,223			$	-
Current portion of long-term debt			27,220				25,220
Accounts payable			2,419				2,719
Accrued payroll, payroll taxes and related benefits			144,227				120,133
Other accrued liabilities			1,896				1,917
Workers' compensation claims liabilities			60,457				54,049
Safety incentives liabilities			18,147				14,232
Total current liabilities			257,589				218,270
Long-term workers' compensation claims liabilities			169,154				161,933
Long-term debt			14,723				19,833
Deferred income taxes			8,159				8,159
Customer deposits and other long-term liabilities			1,487				1,675
Stockholders' equity			40,251				38,658
		$	491,363			$	448,528

 

 

 
Barrett Business Services, Inc.

Consolidated Statements of Operations

 

		(Unaudited)								(Unaudited)
(in thousands, except per share amounts)		Second Quarter Ended								Six Months Ended
		June 30,								June 30,
		2015				2014				2015				2014
Revenues:
Professional employer service fees		$	140,048			$	112,503			$	267,799			$	214,192
Staffing services			42,347				38,566				81,513				72,017
Total revenues			182,395				151,069				349,312				286,209
Cost of revenues:
Direct payroll costs			32,188				29,311				61,952				54,728
Payroll taxes and benefits			72,146				61,130				160,440				133,947
Workers' compensation			41,897				30,776				81,780				58,376
Total cost of revenues			146,231				121,217				304,172				247,051
Gross margin			36,164				29,852				45,140				39,158
Selling, general and administrative expenses			21,278				17,958				38,253				32,327
Depreciation and amortization			709				613				1,392				1,197
Income from operations			14,177				11,281				5,495				5,634
Other income (expense), net			(479	)			106				(924	)			196
Income before taxes			13,698				11,387				4,571				5,830
Provision for income taxes			4,952				4,104				1,627				2,130
Net income		$	8,746			$	7,283			$	2,944			$	3,700
Basic income per common share		$	1.22			$	1.02			$	0.41			$	0.52
Weighted average basic common shares outstanding			7,151				7,173				7,143				7,171
Diluted income per common share		$	1.19			$	0.98			$	0.40			$	0.50
Weighted average diluted common shares outstanding			7,327				7,421				7,328				7,444

 

 

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

BBSI@liolios.com