For the quarter ended June 2024, Barrett Business Services (BBSI) reported revenue of $2.03 billion, up 6.2% over the same period last year. EPS came in at $0.62, compared to $0.62 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $2.02 billion, representing a surprise of +0.66%. The company delivered an EPS surprise of +6.90%, with the consensus EPS estimate being $0.58.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wa ...

Barrett Business Services (BBSI) came out with quarterly earnings of $0.62 per share, beating the Zacks Consensus Estimate of $0.58 per share. This compares to earnings of $0.62 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 6.90%. A quarter ago, it was expected that this human resources management company would post a loss of $0.08 per share when it actually produced a loss of $0.01, delivering a surprise of 87.50%.Over the ...

Financial Data and Key Metrics Changes - Gross billings increased by 6% year-over-year to $2 billion in Q2 2024, compared to $1.9 billion in the prior year quarter [12] - PEO gross billings also rose by 6% to $2.01 billion, while staffing revenues declined by 3% to $20 million [12] - Net income per diluted share remained stable at $0.62, consistent with the year-ago quarter [16] Business Line Data and Key Metrics Changes - The number of worksite employees (WSEs) grew by 4% year-over-year, attributed to strong growth from net new PEO clients and hiring within the customer base [12][18] - Staffing operations experienced a decline of 3% year-over-year, impacted by macroeconomic headwinds, but are expected to grow sequentially in Q3 and Q4 [7][18] Market Data and Key Metrics Changes - PEO gross billings growth varied by region: East Coast grew by 19%, Mountain States by 7%, Southern California by 6%, Northern California by 4%, while the Pacific Northwest declined by 3% [13] - The Pacific Northwest region faced challenges with slower client growth and negative hiring trends [13][39] Company Strategy and Development Direction - The company is focusing on expanding into new markets with an asset-light model and has hired 17 new market development managers [8] - A strategic partnership with Kaiser Permanente for health insurance offerings is expected to enhance revenue and client acquisition [9][10] - The company aims to leverage its new health insurance products to attract new clients and enhance its value proposition [36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in worksite employees and client hiring rates, with expectations for gross billings to increase between 6% and 8% for the year [18] - The company anticipates stable wage rates and hours worked, with an increase in average billing per WSE by 3% [12][16] - Management noted that the workers' compensation program is performing well, benefiting from favorable claim trends and adjustments [14] Other Important Information - The company repurchased $7 million of shares in Q2 2024, with $45 million remaining under the repurchase program [17] - The quarterly dividend rate was increased by 7% to $0.08 per share, reflecting confidence in cash flows and growth plans [17] Q&A Session Summary Question: Insights on workers' compensation adjustments - Management highlighted a favorable adjustment of $8.9 million, emphasizing a conservative approach and strong focus on workers' compensation [19][20] Question: Revenue impact from the Kaiser relationship - Management indicated that while initial revenue contributions from Kaiser may not be significant, they expect meaningful contributions by 2025 [22][23] Question: Referral partner network improvements - Management reported growth in the referral partner network, with active partners at an all-time high, although traction with benefits brokers is still developing [25][27] Question: Client migration trends in California - Management noted no significant impact from client migration out of California, with Northern California showing strong recovery in client hiring [30][31] Question: Progress in adding larger clients - Management confirmed a focus on small businesses, with new clients primarily coming from PEO takeaways rather than larger clients [44][45]

Revenue Performance - For the three months ended June 30, 2024, total revenues were $279.6 million, a 7.1% increase from $264.6 million in the same period of 2023[74]. - Revenue for Q2 2024 reached $279.7 million, reflecting a 5.7% increase from $264.6 million in Q2 2023, driven by a $15.6 million increase in PEO services revenue[81]. - Revenue for the first six months of 2024 was $545.4 million, a 5.0% increase from $519.3 million in the first six months of 2023, with PEO services revenue up by $29.5 million[82]. Professional Employer Services - Professional employer services accounted for 92.9% of total revenues in Q2 2024, up from 92.3% in Q2 2023[74]. - Average worksite employees (WSEs) for the three months ended June 30, 2024, were 128,734, representing a year-over-year growth of 3.7%[79]. Gross Billings and Margins - Gross billings for the six months ended June 30, 2024, reached $3.94 billion, compared to $3.70 billion in the same period of 2023, indicating a growth of 6.5%[76]. - The gross margin for the three months ended June 30, 2024, was 3.3%, slightly down from 3.5% in the same period of 2023[78]. - Gross margin for Q2 2024 was $67.9 million, or 24.2% of revenue, down from $67.0 million, or 25.3% of revenue in Q2 2023[81]. Costs and Expenses - Total cost of revenues for the three months ended June 30, 2024, was $210.8 million, representing 75.8% of total revenues, compared to 74.7% in the same period of 2023[74]. - Payroll taxes and benefits for Q2 2024 totaled $148.8 million, or 53.2% of revenue, compared to $134.1 million, or 50.7% of revenue in Q2 2023, primarily due to higher average payroll tax rates[81]. - SG&A expenses for the first six months of 2024 were $88.0 million, or 16.1% of revenue, compared to $85.0 million, or 16.4% of revenue in the first six months of 2023[83]. Net Income and Cash Flow - Net income for the three months ended June 30, 2024, was $16.7 million, a decrease from $17.0 million in the same period of 2023[74]. - Net income for Q2 2024 was $16.7 million, a slight decrease from $17.0 million in Q2 2023, with diluted net income per share remaining stable at $0.62[81]. - Net cash used in operating activities for the first six months of 2024 was $42.4 million, compared to $23.2 million for the same period in 2023, largely due to increased trade accounts receivable[87]. - The company's cash balance decreased to $70.0 million as of June 30, 2024, down from a decrease of $52.8 million in the same period of 2023[85]. Tax and Future Outlook - The effective income tax rate for Q2 2024 was 28.8%, up from 28.1% in Q2 2023, influenced by state taxes and federal/state tax credits[81]. - The company anticipates continued fluctuations in quarterly operating results due to factors such as seasonality and competition[84]. Employee Benefits - The company began offering employee benefit programs in 2023, including medical, dental, and vision plans, aimed at providing strategic value to clients[73]. Market Presence - The company operates in 68 markets across the United States, supporting local business teams to enhance client relationships and operational efficiency[69].

EXHIBIT 99.1 BBSI Reports Strong Second Quarter 2024 Financial Results and Raises Quarterly Dividend - Q2 2024 Net Income of $16.7 Million, or $0.62 per Diluted Share - - Raises Dividend by 7% to $0.08 per Share - VANCOUVER, Washington, July 31, 2024 – 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, 2024. All share and per share amounts presented herein have been re ...

Core Viewpoint - Barrett Business Services, Inc. (BBSI) reported a strong performance in Q2 2024, with revenue and gross billings growth, alongside a slight decrease in net income compared to the previous year, while also increasing its dividend by 7% [1][2][6]. Financial Performance - Q2 2024 revenues increased by 6% to $279.7 million compared to $264.6 million in Q2 2023 [3]. - Gross billings rose by 6% to $2.03 billion from $1.91 billion year-over-year [3]. - Average worksite employees (WSEs) grew by 4% [1]. - Net income for Q2 2024 was $16.7 million, or $0.62 per diluted share, compared to $17.0 million, or $0.62 per diluted share in the same quarter last year [4]. Cost and Margin Analysis - Workers' compensation expense as a percentage of gross billings was 2.5% in Q2 2024, benefiting from favorable prior year adjustments of $8.9 million, compared to 2.6% in Q2 2023 with adjustments of $6.3 million [3]. - Gross margin for Q2 2024 was reported at 3.3%, slightly down from 3.5% in Q2 2023 [13]. Liquidity and Capital Allocation - As of June 30, 2024, unrestricted cash and investments totaled $110.4 million, down from $123.7 million as of March 31, 2024, with the company remaining debt-free [5]. - The board of directors raised the quarterly cash dividend from $0.075 to $0.08 per share, marking a 7% increase [6]. - BBSI repurchased 222,780 shares at an average price of $31.63 during Q2 2024, with approximately $44.9 million remaining under the $75 million repurchase program [6]. Outlook - BBSI anticipates gross billings growth of 6% to 8% and an increase in average WSEs of 4% to 5% for 2024 [7]. - The company expects a gross margin as a percentage of gross billings to be between 3.0% and 3.10% and an effective annual tax rate of 26% to 27% [7]. Key Performance Metrics - Average WSEs for Q2 2024 were 128,734, reflecting a year-over-year growth of 3.7% [14]. - Ending WSEs stood at 130,046, up 2.1% from 127,336 in the previous year [14]. Company Overview - BBSI is a leading provider of business management solutions, specializing in human resource outsourcing and professional management consulting, serving over 8,000 clients across all 50 states [15].

Core Viewpoint - Barrett Business Services, Inc. (BBSI) will hold a conference call on July 31, 2024, to discuss its financial results for Q2 2024, which ended on June 30, 2024 [1][2] Group 1 - The conference call will be hosted by CEO Gary Kramer and CFO Anthony Harris, followed by a Q&A session [1] - The call will take place at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) [1] - A press release with financial results will be issued prior to the conference call [1] Group 2 - The conference call will be broadcast live and available for replay on the BBSI website [2] - A replay will be accessible after 8:00 p.m. Eastern time on the same day through August 31, 2024 [2] - The toll-free replay number is 1-844-512-2921, and the international replay number is 1-412-317-6671 [2] Group 3 - BBSI is a leading provider of business management solutions, specializing in human resource outsourcing and professional management consulting [3] - The company serves over 7,500 clients across various industries and is licensed to operate in all 50 states [3] - BBSI's operational platform includes payroll processing, employee benefits, workers' compensation coverage, risk management, and workplace safety programs [3]

Core Viewpoint - Barrett Business Services (BBSI) has shown strong stock performance, with a 7.4% increase over the past month and a 15.6% rise since the beginning of the year, outperforming both the Zacks Business Services sector and the Zacks Outsourcing industry [1][2]. Performance Metrics - The company has consistently exceeded earnings expectations, reporting an EPS of $-0.02 against a consensus estimate of $-0.31 in its last earnings report [2]. - For the current fiscal year, Barrett is projected to achieve earnings of $1.99 per share on revenues of $8.26 billion, reflecting a -73.07% change in EPS and a 7.02% change in revenues [2]. - The next fiscal year forecasts earnings of $2.19 per share on $8.96 billion in revenues, indicating a year-over-year change of 10.37% in EPS and 8.47% in revenues [2]. Valuation Metrics - Barrett's stock trades at 16.8X current fiscal year EPS estimates, slightly below the peer industry average of 17.2X [4]. - On a trailing cash flow basis, the stock trades at 15.4X compared to the peer group's average of 11.9X [4]. - The PEG ratio stands at 1.2, which does not position the company among the top value stocks [4]. Style Scores and Zacks Rank - Barrett has a Value Score of A, with Growth and Momentum Scores of C and D, respectively, resulting in a VGM Score of B [3]. - The stock holds a Zacks Rank of 2 (Buy), supported by rising earnings estimates, making it a suitable choice for investors [5].

Core Viewpoint - Barrett Business Services (BBSI) is currently a strong value stock, indicated by its Zacks Rank of 2 (Buy) and an "A" grade in the Value category, suggesting it is undervalued compared to its peers [2][4]. Valuation Metrics - BBSI has a P/E ratio of 15.71, significantly lower than the industry average of 23.43, indicating potential undervaluation [2]. - The stock's Forward P/E has fluctuated between 11.27 and 16.39 over the past year, with a median of 14.55 [2]. - BBSI's PEG ratio stands at 1.12, compared to the industry's average of 2.53, suggesting better growth prospects relative to its price [2]. - The P/B ratio for BBSI is 4.50, which is favorable compared to the industry average of 12.26, indicating a solid market value relative to its book value [3]. - BBSI's P/S ratio is 0.8, lower than the industry's average of 1, which may indicate a more accurate performance indicator due to the difficulty of manipulating sales figures [3]. - The P/CF ratio for BBSI is 15.05, which is attractive compared to the industry average of 15.78, suggesting a strong cash flow outlook [4]. Investment Outlook - The combination of these valuation metrics indicates that Barrett Business Services is likely undervalued at present, making it an appealing option for value investors [4].

Core Insights - The price-to-sales (P/S) ratio is highlighted as a valuable metric for evaluating companies, especially those with negative earnings or in early development stages, as it reflects how much investors pay for each dollar of revenue generated [2][3] - A P/S ratio below 1 indicates a potentially undervalued stock, making it a more attractive investment compared to those with higher ratios [2] - The P/S ratio is considered more reliable than the price-to-earnings (P/E) ratio, as sales figures are less susceptible to manipulation [3] Company Summaries - **Lakeland Industries (LAKE)**: A global manufacturer of protective clothing, focusing on high-value products and market diversification. The company is committed to organic growth and has a Value Score of A with a Zacks Rank of 1 [6] - **Caleres (CAL)**: Operates a portfolio of consumer-driven footwear brands and is capturing market share in the kids' segment. The company aims to reduce debt and has a Value Score of A with a Zacks Rank of 2 [7] - **Ingredion (INGR)**: A global ingredient solutions provider, focusing on cost-saving initiatives and optimizing its supply chain. The company has a Value Score of A and a Zacks Rank of 2 [8] - **ProPetro Holding Corp. (PUMP)**: An oilfield service provider in the Permian Basin, focusing on growth through acquisitions and pressure pumping services. The company has a debt-light balance sheet and a Value Score of A with a Zacks Rank of 2 [9] - **Barrett Business Services (BBSI)**: Provides business management solutions for small and mid-sized companies, benefiting from an expanding client base and effective cost-management strategies. The company has a Value Score of A and a Zacks Rank of 2 [10] Screening Parameters - Companies with a P/S ratio less than the median for their industry are preferred, along with a P/E ratio and price-to-book ratio below their respective industry medians [4] - A debt-to-equity ratio lower than the industry median is also a key parameter, ensuring stability in the P/S ratio [4] - Stocks must be trading at a minimum price of $5 and have a Zacks Rank of 1 (Strong Buy) or 2 (Buy) to qualify for investment consideration [4]