INVESTOR PRESENTATION NASDAQ: BBSI Forward Looking Statement Statements in this presentation 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 ...

Barrett Business Services, Inc. (NASDAQ:BBSI) Q1 2023 Earnings Conference Call May 3, 2023 5:00 PM ET Company Participants Gary Kramer - President, CEO & Director Anthony Harris - EVP, CFO, Principal Accounting Officer & Treasurer Conference Call Participants Jeffrey Martin - ROTH MKM Vincent Colicchio - Barrington Research Associates Christopher Moore - CJS Securities William Dezellem - Tieton Capital Management Operator Good afternoon, everyone, and thank you for participating in today's conference call t ...

Revenue and Income Performance - Total revenues for Q1 2023 increased to $254.667 million, up 3.4% from $246.375 million in Q1 2022[17] - Net income for Q1 2023 was $819 thousand, compared to $288 thousand in Q1 2022[17] - Professional employer services revenue grew to $232.307 million in Q1 2023, up 6.8% from $217.433 million in Q1 2022[17] - Staffing services revenue declined to $22.360 million in Q1 2023, down 22.7% from $28.942 million in Q1 2022[17] - Gross margin improved to $41.544 million in Q1 2023, up 3.0% from $40.353 million in Q1 2022[17] - Comprehensive income for Q1 2023 was $4.471 million, compared to a comprehensive loss of $14.070 million in Q1 2022[20] - Net income for 2023 increased to $819 million from $288 million in 2022[31] - Total revenues for the three months ended March 31, 2023, were $254.7 million, with professional employer services accounting for 91.2% of total revenues[87] - Gross billings for the three months ended March 31, 2023, were $1.79 billion, with PEO and staffing wages totaling $1.55 billion[90] - BBSI's gross margin for the three months ended March 31, 2023, was 16.3%, slightly down from 16.4% in the same period in 2022[87] - The company's net income for the three months ended March 31, 2023, was $0.2 million, representing 0.2% of total revenues[87] - Gross margin for Q1 2023 was 16.3% of revenue, totaling $41.5 million, compared to 16.4% of revenue in Q1 2022[94] - Revenue for Q1 2023 increased by 3.4% to $254.7 million, driven by a 6.8% increase in PEO service revenue, while staffing services revenue decreased by 22.8%[94] - Net income for Q1 2023 was $0.8 million, up from $0.3 million in Q1 2022, with diluted net income per share rising to $0.12 from $0.04[94] Cash and Investments - Cash and cash equivalents decreased to $52.635 million as of March 31, 2023, down from $91.423 million as of December 31, 2022[15] - Net cash used in operating activities decreased to $26.515 million in 2023 from $30.209 million in 2022[31] - Cash, cash equivalents, and restricted cash at the end of the period were $68.059 million in 2023 compared to $54.837 million in 2022[31] - Restricted cash included in restricted cash and investments was $15.424 million in 2023, down from $15.955 million in 2022[49] - Total cash equivalents decreased from $40.3 million in December 2022 to $26.8 million in March 2023[56] - Total current investments increased from $68.3 million in December 2022 to $80.1 million in March 2023[56] - Total restricted cash and investments decreased from $199.3 million in December 2022 to $194.5 million in March 2023[56] - Total investments decreased from $307.9 million in December 2022 to $301.4 million in March 2023[56] - Corporate bonds recorded basis decreased from $33.3 million in December 2022 to $33.8 million in March 2023[59] - U.S. treasuries recorded basis decreased from $57.3 million in December 2022 to $50.5 million in March 2023[59] - Mortgage backed securities recorded basis decreased from $40.1 million in December 2022 to $39.5 million in March 2023[59] - U.S. government agency securities recorded basis increased from $24.3 million in December 2022 to $24.8 million in March 2023[59] - Corporate bonds total $105,802 thousand, with $2,536 thousand maturing in less than 1 year, $53,788 thousand between 1 to 5 years, $49,300 thousand between 5 to 10 years, and $178 thousand after 10 years[62] - Total investments as of March 31, 2023, amount to $241,463 thousand, including $39,011 thousand in less than 1 year, $94,851 thousand between 1 to 5 years, $106,129 thousand between 5 to 10 years, and $1,472 thousand after 10 years[62] - The company's investment portfolio at March 31, 2023, included $105.8 million in corporate bonds and $61.6 million in U.S. treasuries[102] - The company's cash balance decreased by $39.3 million to $68.1 million in Q1 2023, primarily due to increased trade accounts receivable and repurchases of common stock[98] - Net cash used in operating activities for Q1 2023 was $26.5 million, compared to $30.2 million in Q1 2022[98] Workers' Compensation and Liabilities - Workers' compensation claims liabilities decreased to $14.412 million in 2023 from $16.894 million in 2022[31] - Safety incentives liability decreased to $1.8 million in 2023 from $2.0 million in 2022[44] - Workers' compensation claims liabilities decreased from $215,987 thousand to $201,641 thousand in Q1 2023, with incurred but not reported (IBNR) at $103,804 thousand, representing 51% of total liabilities[64] - The insured program covers approximately 83% of the company's workers' compensation exposure, with third-party insurers assuming all risk of loss for claims incurred from July 1, 2021, to June 30, 2022[65] - The 2022-2023 Policy allows the company to participate in savings up to $22.5 million for the twelve-month policy period, with no additional premium charged if claims develop adversely[66] - Loss portfolio transfer agreements (LPT 1 and LPT 2) reduced the company's outstanding workers' compensation liabilities by $115.7 million and $53.1 million, respectively[66] - The trust account balance for the insured program was $178.8 million at March 31, 2023, down from $188.2 million at December 31, 2022[68] - Self-insured programs cover approximately 17% of the company's workers' compensation exposure, with retention limits ranging from $1.0 million to $5.0 million per occurrence depending on the state[70] - Workers' compensation expense for Q1 2023 was $51.7 million, or 20.3% of revenue, compared to $48.2 million, or 19.6% of revenue in Q1 2022[94] Share Repurchases and Stock - The company repurchased $8.030 million worth of common stock during Q1 2023[24] - The company repurchased $8.030 million worth of common stock in 2023, slightly down from $8.575 million in 2022[31] - The company repurchased 90,553 shares in March 2023 at an average price of $88.67 per share, reducing the remaining repurchase authorization to $19,803,564[114] - The company's stock repurchase plan had an approximate remaining dollar value of $27,832,833 as of January 2023[114] Tax and Legal Matters - The IRS intends to disallow certain wage-based tax credits claimed for the years 2017 through 2020, potentially resulting in additional taxes of $5.5 million and penalties of $1.7 million[75] - The company has total gross unrecognized tax benefits of $0.6 million as of March 31, 2023, which could affect the effective tax rate if recognized in future periods[75] - The company recorded estimated liabilities totaling $2.7 million in other accrued liabilities related to ongoing litigation[77] Employee Benefits and Compliance - In 2023, BBSI began offering employee benefits to clients, including medical, dental, vision plans, and other voluntary coverages[85] - The company began offering employee health and welfare benefits to PEO clients in 2023, which may be subject to future changes in healthcare legislation or increased costs[110] - Compliance with HIPAA and HITECH Act is required for handling protected health information (PHI) of client employees, with non-compliance potentially leading to penalties and fines[111] - The company faces risks related to healthcare reforms, including potential penalties if it fails to offer required health coverage to eligible employees under the Affordable Care Act[110] Workforce and Payroll - Average WSEs grew by 2.7% to 119,313 in Q1 2023, compared to 116,197 in Q1 2022[92] - Ending WSEs increased by 2.9% to 121,363 in Q1 2023, compared to 117,924 in Q1 2022[92] - Payroll taxes and benefits for Q1 2023 totaled $144.6 million, or 56.8% of revenue, compared to $135.9 million, or 55.1% of revenue in Q1 2022[94] Credit Facility and Financial Covenants - The company maintains a revolving credit facility of $50.0 million with Wells Fargo Bank, N.A., with no outstanding borrowings as of March 31, 2023[72] - The company was in compliance with all financial covenants under the revolving credit facility agreement as of March 31, 2023[74] - The company was in a cumulative income position for the 12 quarters ended March 31, 2023, indicating a strong financial performance over the past three years[75] Allowance for Doubtful Accounts - The allowance for doubtful accounts was $885,000 at March 31, 2023, compared to $893,000 at December 31, 2022[42] Income Taxes - Income taxes paid during the three months ended March 31, 2023, totaled $0.01 million, down from $0.04 million in 2022[48] Shares Outstanding - Weighted average number of basic shares outstanding decreased from 7,406 in 2022 to 6,866 in Q1 2023[52] - Weighted average number of diluted shares outstanding decreased from 7,474 in 2022 to 6,985 in Q1 2023[52] Market and Operations - BBSI operates in 68 markets throughout the United States, supporting over 7,770 companies daily with its decentralized delivery model[81]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 Commission File Number 0-21886 BARRETT BUSINESS SERVICES, INC. (Exact name of registrant as specified in its charter) Maryland 52-0812977 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 8100 NE Parkway Drive, Suite 200 Vancouver, Washington 98662 (Ad ...

Barrett Business Services, Inc. (NASDAQ:BBSI) Q4 2022 Earnings Conference Call March 1, 2023 5:00 PM ET Company Participants Gary Kramer - President, CEO & Director Anthony Harris - EVP, CFO, Principal Accounting Officer & Treasurer Conference Call Participants Jeffrey Martin - ROTH MKM Partners Vincent Colicchio - Barrington Research Associates Marc Riddick - Sidoti & Company Operator Good afternoon, everyone, and thank you for participating in today's conference call to discuss BBSI's financial results fo ...

Barrett Business Services, Inc. (NASDAQ:BBSI) Q3 2022 Earnings Conference Call November 2, 2022 5:00 PM ET Company Participants Gary Kramer - President & CEO Anthony Harris - CFO Conference Call Participants Christopher Moore - CJS Jeff Martin - Roth Capital Partners Vincent Colicchio - Barrington Research Operator Good afternoon, everyone, and thank you for participating in today's conference call to discuss BBSI's Financial Results for the Third Quarter Ended September 30, 2022. Joining us today are BBSI' ...

Financial Data and Key Metrics Changes - The company reported a 14% increase in gross billings year-over-year, reaching $1.8 billion for the PEO business, while staffing revenues increased by 21% to $30 million [16][8] - Average worksite employees (WSEs) increased by 9% compared to the prior year, with average billing per WSE rising by 5% [16][8] - The company raised its full-year outlook, now expecting gross billings to increase between 11% and 13%, up from 10% to 12% previously [23] Business Line Data and Key Metrics Changes - The PEO business saw a 14% growth in gross billings, driven by stronger-than-expected growth from net new clients and higher average billing per WSE [16][8] - Staffing operations experienced a 21% increase year-over-year, with improvements in fill ratios despite challenges in the tight labor market [8][16] - The company added approximately 3,200 worksite employees year-over-year from net new clients, indicating strong client retention and growth [7][8] Market Data and Key Metrics Changes - PEO gross billings growth by region showed significant increases: Mountain States grew 34%, East Coast grew 22%, and Southern California grew 11% [17] - The company operates in 13 states and 68 markets, maintaining consistent operations across these regions [9] Company Strategy and Development Direction - The company is focusing on a three-pronged strategy to enhance client relationships and expand its referral partner network [5][6] - A new health benefits offering is being launched, which is expected to diversify the client profile and expand the total addressable market [12][10] - The company is actively looking for acquisition opportunities but remains cautious about deals that do not make sense [48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong performance in worksite employee growth and client retention [14][15] - Despite challenges such as tight labor markets and inflation, the company does not see signs of an economic slowdown affecting its operations [13][14] - The management is optimistic about the future, particularly with the new benefits offering expected to accelerate growth [15][24] Other Important Information - The company renewed its workers' compensation facility with better pricing and terms, reflecting improved underwriting and loss experience [10][19] - The company repurchased 270,000 shares at an average price of $73.88 per share, continuing its $75 million share repurchase program [22] Q&A Session Summary Question: Can you explain the mechanics of the health care benefits offering? - The company plans to start selling the health care benefits outside of California, with a seamless enrollment process leading to a master plan effective January 1, 2023 [27][28] Question: Is the health care offering exclusive to one insurance company? - The company has partnered with one health insurance company for the primary offering and another for ancillary benefits [30] Question: What is the pipeline for new sales prospects and referral partners? - The company is seeing increased lead activity and stronger business coming in compared to pre-pandemic levels [39] Question: What are the growth expectations for worksite employees in the second half of the year? - The company has tempered expectations for the second half, anticipating a more moderate pace of hiring due to the tight labor market [41] Question: What should Q3 revenue look like compared to Q2? - Q3 billings are expected to show strong year-over-year growth similar to Q2, with consistent trends observed [44] Question: Will the company be opportunistic in acquisitions if the market changes? - The company is actively looking for acquisition opportunities but will only pursue deals that make sense [48]

Financial 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]

Financial Data and Key Metrics Changes - The company reported a gross billings increase of 16% year-over-year, reaching $1.68 billion for the PEO business, while staffing revenues increased by 18% to $28.9 million [13][7] - Average worksite employees (WSEs) rose by 9% compared to the prior year, with average billing per WSE increasing by 6% due to higher wages [13][14] - The company generated positive net income in Q1 for the first time in over 10 years, typically showing a loss in Q1 due to payroll tax timing [16] Business Line Data and Key Metrics Changes - The PEO business saw a 16% increase in gross billings, driven by stronger client growth and hiring [13][14] - The staffing business experienced an 18% year-over-year growth, with improvements in applicant placement and fill ratios despite a tight labor market [7][8] - The company added approximately 3,500 worksite employees year-over-year from net new clients, marking the best quarter in over five years [6][29] Market Data and Key Metrics Changes - PEO gross billings growth varied by region, with the Mountain States growing by 38%, East Coast by 25%, and Southern California by 13% [14] - The company operates in 13 states and 68 markets, maintaining consistent market presence compared to the previous quarter [9] Company Strategy and Development Direction - The company is focused on a three-pronged strategy to enhance sales leads, including deepening relationships with existing partners and utilizing technology for new client acquisition [4][5] - An asset-light model is being employed to enter new markets, allowing for efficient client servicing and sales through digital initiatives [9][39] - The company plans to continue investing in technology and growth initiatives while maintaining a disciplined approach to acquisitions [12][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's trajectory, citing strong client retention and growth in prospects [11][50] - Despite macroeconomic challenges such as inflation and labor market tightness, the company does not see immediate signs of a slowdown in its data [10][50] - The company raised its full-year guidance for gross billings growth to 10%-12%, up from 7%-9%, reflecting confidence in continued performance [19] Other Important Information - The company has a new $75 million stock repurchase plan and has already purchased 241,000 shares at an average price of $74.80 [18] - The unrestricted cash investments decreased to $127 million from $166 million at year-end, primarily due to payroll tax payments and stock repurchases [17] Q&A Session Summary Question: Can you talk about the distribution of revenue and earnings in the final three quarters of 2022? - Management expects sequential growth each quarter, with Q4 potentially impacted by one less business day [22][23] Question: Will the company be more cautious on acquisitions given economic risks? - Management indicated that pricing has improved for sellers, and they remain active in the acquisition market while being prudent [24][25] Question: What was the year-over-year same customer WSE growth in the quarter? - The company added approximately 3,400 worksite employees from net new customers and about 6,500 from customer hiring year-over-year [29] Question: Can you comment on the asset-light model and its progress? - Management reported positive outcomes from the asset-light model, with markets performing at or better than expectations [39] Question: Is the average WSE growth guidance of 4% to 6% conservative? - Management acknowledged some conservatism in the guidance, considering the tight labor market and hiring trends [42][44]