BBSI Reports Strong Second Quarter 2024 Financial Results and Raises Quarterly Dividend

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].