false
0000902791
0000902791
2024-05-01
2024-05-01
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 01, 2024
BARRETT BUSINESS SERVICES, INC.
(Exact name of Registrant as Specified in Its Charter)
Maryland 0-21886 52-0812977
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
8100 NE Parkway Drive
Suite 200
Vancouver 98662
,
Washington
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:
(360)
828-0700
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Name of each exchange on which registered
Symbol(s)
Common Stock, par value $0.01 per share BBSI The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s)/230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 ((s)/240.12b-2
of this chapter).
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.
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Item 2.02. Results of Operations and Financial Condition.
On May 1, 2024, Barrett Business Services, Inc. (the "Company"), issued a news
release announcing its financial results for the first quarter ended March 31,
2024. The release also provides management's expectations for certain key
performance metrics for 2024. A copy of the news release is furnished as
Exhibit 99.1 to this report and incorporated by reference.
Item 7.01. Regulation FD Disclosure.
On May 1, 2024 the Company announced that its Board of Directors has declared
a regular quarterly cash dividend of $0.30 per share. The dividend is payable
on May 31, 2024 to all stockholders of record as of May 17, 2024.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No Description
.
99.1 News Release dated May 1, 2024
*
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
* Furnished herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BARRETT BUSINESS SERVICES, INC.
Registrant
Dated: May 1, 2024 By: /s/ Anthony J. Harris
Anthony J. Harris
Executive Vice President and Chief Financial Officer and Treasurer
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EXHIBIT 99.1
BBSI Reports Strong First Quarter 2024 Financial Results
- Revenues of $265.8 Million with Gross Billings up 7% -
VANCOUVER, Washington, May 1, 2024
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, 2024.
First Quarter 2024 Financial Summary vs. Year-Ago Quarter
"
Revenues up 4% to $265.8 million.
"
Gross billings up 7% to $1.91 billion.
"
Average worksite employees (WSEs) up 3%.
"
Net loss of $0.1 million, or $(0.02) per diluted share, compared to net income
of $0.8 million, or $0.12 per diluted share.
We started the year on a strong note, with growth from net client adds driving
gross billings expansion in line with our target, said BBSI President and CEO
Gary Kramer. We continue to see positive momentum from our marketing
initiatives and new product offerings, and the roll-out of BBSI Benefits
continues to perform well. We are executing to our plan and expect 2024 to be
another strong year.
First Quarter 2024 Financial Results
Revenues in the first quarter of 2024 increased 4% to $265.8 million compared
to $254.7 million in the first quarter of 2023.
Total gross billings in the first quarter of 2024 increased 7% to $1.91
billion compared to $1.79 billion in the same year-ago quarter (see Key
Performance Metrics below). The increase was driven by growth in professional
employer ("PEO") services, specifically resulting from increased WSEs from net
new clients and higher average billings per WSE.
Workers compensation expense as a percent of gross billings was 2.6% in the
first quarter of 2024 and benefited from favorable prior year liability and
premium adjustments of $3.0 million. This compares to 2.9% in the first
quarter of 2023, which included favorable prior year liability and premium
adjustments of $1.1 million.
Net loss for the first quarter of 2024 was $0.1 million, or $(0.02) per
diluted share, compared to net income of $0.8 million, or $0.12 per diluted
share, in the year-ago quarter. The decrease is primarily attributable to an
increase in payroll taxes, partially offset by decreased workers' compensation
expense and an increase in investment income. Due to seasonality in payroll
tax expense, the Company typically incurs lower margins at the beginning of
each year.
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Liquidity
As of March 31, 2024, unrestricted cash and investments were $123.7 million
compared to $152.2 million at the end of 2023. BBSI remained debt free at
quarter end.
Capital Allocation
BBSIs board of directors has confirmed its regular quarterly cash dividend of
$0.30 per share. The cash dividend will be paid on May 31, 2024, to all
stockholders of record as of May 17, 2024.
Continuing under the Companys stock repurchase program established in July
2023, BBSI repurchased 58,877 shares in the first quarter at an average price
of $119.83. At March 31, 2024, approximately $51.9 million remained available
under the repurchase program.
Outlook
BBSI continues to expect the following for 2024:
"
Gross billings growth of 6% to 8%
"
Growth in the average number of WSEs of 4% to 5%
"
Gross margin as a percent of gross billings of 2.95% to 3.15%
"
Effective annual tax rate to remain at 26% to 27%
Conference Call
BBSI will conduct a conference call on Wednesday, May 1, 2024, at 5:00 p.m.
Eastern time (2:00 p.m. Pacific time) to discuss its financial results for the
quarter ended March 31, 2024.
BBSIs CEO Gary Kramer and CFO Anthony Harris will host the conference call,
followed by a question and answer period.
Date: Wednesday, May 1, 2024
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in number: 1-877-407-4018
International dial-in number: 1-201-689-8471
Conference ID: 13746013
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 Gateway
Investor Relations at 1-949-574-3860.
The conference call will be broadcast live and available for replay
here
and via the Investors section of the BBSI website at
ir.bbsi.com
.
A replay of the conference call will be available after 8:00 p.m. Eastern time
on the same day through June 1, 2024.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13746013
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Key Performance Metrics
We report PEO revenues net of direct payroll costs because we are not the
primary obligor for wage payments to our clients employees. However,
management believes that gross billings and wages are useful in understanding
the volume of our business activity and serve as important performance metrics
in managing our operations, including the preparation of internal operating
forecasts and establishing executive compensation performance goals. We
therefore present for purposes of analysis gross billings and wage information
for the three months ended March 31, 2024 and 2023.
(Unaudited)
Three Months Ended March 31,
(in thousands) 2024 2023
Gross billings $ 1,907,549 $ 1,789,218
PEO and staffing wages $ 1,656,443 $ 1,551,352
In monitoring and evaluating the performance of our operations, management
also reviews the following ratios, which represent selected amounts as a
percentage of gross billings. Management believes these ratios are useful in
understanding the efficiency and profitability of our service offerings.
(Unaudited)
Percentage of Gross Billings
Three Months Ended March 31,
2024 2023
PEO and staffing wages 86.8% 86.7%
Payroll taxes and benefits 8.5% 8.1%
Workers' compensation 2.6% 2.9%
Gross margin 2.1% 2.3%
We refer to employees of our PEO clients as WSEs. Management reviews average
and ending WSE growth to monitor and evaluate the performance of our
operations. Average WSEs are calculated by dividing the number of unique
individuals paid in each month by the number of months in the period. Ending
WSEs represents the number of unique individuals paid in the last month of the
period.
(Unaudited)
Three Months Ended March 31,
2024 % Change 2023 % Change
Average WSEs 123,050 3.1% 119,313 2.7%
Ending WSEs 124,785 2.8% 121,363 2.9%
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 Companys integrated platform is built upon expertise in payroll
processing, employee benefits, workers compensation coverage, risk management
and workplace safety programs, and human resource administration. BBSIs
partnerships help businesses of all sizes improve the efficiency of their
operations. For more information, please visit
www.bbsi.com
.
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Forward-Looking Statements
Statements in this release about future events and financial outlook are
forward-looking statements. Such statements 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 Companys service areas; the
lingering effects of the COVID-19 pandemic; the effects of inflation on our
operating expenses and those of our clients; the availability of certain fully
insured medical and other health and welfare benefits to qualifying worksite
employees; the effect of changes in the Companys mix of services on gross
margin; the Companys ability to attract and retain clients and to achieve
revenue growth; the availability of financing or other sources of capital; the
Companys relationship with its primary bank lender; the potential for material
deviations from expected future workers compensation claims experience;
changes in the workers compensation regulatory environment in the Companys
primary markets; litigation costs; security breaches or failures in the
Companys information technology systems; the collectability of accounts
receivable; changes in executive management; changes in effective payroll tax
rates and federal and state income tax rates; the carrying value of deferred
income tax assets and goodwill; the effects of conditions in the global
capital markets on the Companys investment portfolio; and the potential for
and effect of acquisitions, among others. Other important factors that may
affect the Companys prospects are described in the Companys 2023 Annual Report
on Form 10-K and in subsequent reports filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934. 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.
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Barrett Business Services, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
March 31, December 31,
(in thousands) 2024 2023
ASSETS
Current assets:
Cash and cash equivalents $ 51,267 $ 71,168
Investments 72,410 81,027
Trade accounts receivable, net 200,368 171,407
Income taxes receivable 7,727 7,987
Prepaid expenses and other 18,513 18,443
Restricted cash and investments 125,010 97,470
Total current assets 475,295 447,502
Property, equipment and software, net 51,222 50,295
Operating lease right-of-use assets 20,719 19,898
Restricted cash and investments 141,609 145,583
Goodwill 47,820 47,820
Other assets 6,346 6,222
Deferred income taxes 4,789 4,218
Total assets $ 747,800 $ 721,538
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,697 $ 6,593
Accrued payroll, payroll taxes and related benefits 256,061 234,080
Current operating lease liabilities 6,345 6,623
Current premium payable 65,820 35,276
Other accrued liabilities 7,516 10,674
Workers' compensation claims liabilities 46,555 50,006
Total current liabilities 387,994 343,252
Long-term workers' compensation claims liabilities 111,499 117,757
Long-term premium payable 33,435 37,812
Long-term operating lease liabilities 15,594 14,590
Customer deposits and other long-term liabilities 9,689 8,987
Stockholders' equity 189,589 199,140
Total liabilities and stockholders' equity $ 747,800 $ 721,538
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Barrett Business Services, Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31,
(in thousands, except per share amounts) 2024 2023
Revenues:
Professional employer services $ 246,189 $ 232,307
Staffing services 19,593 22,360
Total revenues 265,782 254,667
Cost of revenues:
Direct payroll costs 14,717 16,871
Payroll taxes and benefits 161,895 144,582
Workers' compensation 49,603 51,670
Total cost of revenues 226,215 213,123
Gross margin 39,567 41,544
Selling, general and administrative expenses 42,414 41,226
Depreciation and amortization 1,852 1,677
Loss from operations (4,699 ) (1,359 )
Other income (expense):
Investment income, net 3,274 2,315
Interest expense (44 ) (38 )
Other, net 66 36
Other income, net 3,296 2,313
(Loss) income before income taxes (1,403 ) 954
(Benefit from) provision for income taxes (1,267 ) 135
Net (loss) income $ (136 ) $ 819
Basic (loss) income per common share $ (0.02 ) $ 0.12
Weighted average basic common shares outstanding 6,570 6,866
Diluted (loss) income per common share $ (0.02 ) $ 0.12
Weighted average diluted common shares outstanding 6,570 6,985
Investor Relations:
Gateway Group, Inc.
Cody Slach
Tel 1-949-574-3860
BBSI@gateway-grp.com
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