Barrett Business Services(US:BBSI)2022-08-03 16:00Financial Performance - Total revenues for the three months ended June 30, 2022, were $262,179 thousand, an increase from $233,203 thousand in the same period of 2021, representing a growth of 12.5%[21] - Net income for the three months ended June 30, 2022, was $18,014 thousand, compared to $17,090 thousand for the same period in 2021, reflecting an increase of 5.4%[22] - Basic income per common share for the three months ended June 30, 2022, was $2.52, up from $2.26 in the same period of 2021, indicating a growth of 11.5%[22] - Gross margin for the three months ended June 30, 2022, was $66,885 thousand, compared to $57,473 thousand for the same period in 2021, reflecting an increase of 16.5%[22] - Selling, general and administrative expenses for the three months ended June 30, 2022, were $42,272 thousand, up from $35,662 thousand in the same period of 2021, representing an increase of 18.3%[22] - Net income for June 2022 was $18,302,000, compared to $12,536,000 in June 2021, representing a year-over-year increase of approximately 46%[35] - Total revenues for the first six months of 2022 were $508.6 million, a 12.6% increase from $451.7 million in the first six months of 2021[106] Assets and Liabilities - Total current assets as of June 30, 2022, were $510,534 thousand, an increase from $406,719 thousand as of December 31, 2021, representing a growth of 25.5%[19] - Total liabilities as of June 30, 2022, were $581,776 thousand, compared to $538,422 thousand as of December 31, 2021, indicating an increase of 8.0%[19] - The company’s cash and cash equivalents as of June 30, 2022, were $34,098 thousand, a decrease from $69,405 thousand as of December 31, 2021, reflecting a decline of 50.9%[19] - Total cash, cash equivalents, and restricted cash as of June 30, 2022, amounted to $44.138 million, a decrease from $78.629 million at December 31, 2021[53] - The allowance for doubtful accounts was $539,000 as of June 30, 2022, up from $460,000 at December 31, 2021, reflecting a growing concern over collectability[46] Cash Flow and Investments - Cash flows from operating activities showed a net cash used of $37,416,000 in June 2022, contrasting with a net cash provided of $2,621,000 in June 2021[35] - The company reported a net decrease in cash and cash equivalents of $34,491,000 in June 2022, compared to a significant decrease of $219,674,000 in June 2021[35] - Total investments as of June 30, 2022, were valued at $367.135 million, with unrealized losses of $30.269 million[60] - The company’s cash equivalents included $29.587 million in money market funds as of June 30, 2022[60] - The total amount of asset-backed securities was $18.75 billion as of June 30, 2022, compared to $29.60 billion at the end of 2021, representing a decrease of about 37%[66] Stock and Shareholder Activity - The company repurchased common stock totaling $28,492,000 in June 2022, compared to $6,578,000 in June 2021, indicating an increase in stock buyback activity[35] - The Company repurchased a total of 269,581 shares during the quarter ended June 30, 2022, at an average price of $74.15 per share[123] - As of June 30, 2022, the Company had repurchased 384,449 shares at an aggregate purchase price of $28.5 million under its stock repurchase program[123] - The Board of Directors authorized a repurchase of up to $75.0 million of the Company's common stock over a two-year period beginning February 28, 2022[123] Operational Metrics - Average worksite employees (WSEs) increased by 8.8% to 122,234 in Q2 2022 compared to 112,363 in Q2 2021[101] - Professional employer service fees accounted for 88.6% of total revenues in Q2 2022, while staffing services represented 11.4%[92] - Payroll taxes and benefits represented 48.2% of total revenues in Q2 2022, slightly up from 47.9% in Q2 2021[92] - Workers' compensation costs for the three months ended June 30, 2022, were $46,483 thousand, a 2.1% increase from $45,513 thousand in Q2 2021[97] Tax and Regulatory Matters - The effective income tax rate for Q2 2022 was 26.9%, up from 23.6% in Q2 2021, primarily due to state taxes and federal and state tax credits[105] - The Company is subject to income tax examinations by the IRS for multiple years, with potential additional tax due estimated at approximately $2.3 million for certain years[81] Future Outlook and Risks - The company expects fluctuations in quarterly operating results due to factors such as seasonality, demand for services, and claims experience for workers' compensation[107] - The Company plans to introduce fully insured medical and other health and welfare benefits to qualifying worksite employees starting in 2023, which may introduce additional risks and uncertainties[121] - The Company is aware of the potential for additional legislative and regulatory requirements associated with new service offerings, which could impact profitability and competitiveness[121] - There have been no material changes in the risk factors since the last Annual Report filed on March 7, 2022[120]