BBSI Reports Strong First Quarter 2024 Financial Results
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BBSI Reports Strong First Quarter 2024 Financial Results

– Revenues of $265.8 Million With Gross Billings up 7% –

VANCOUVER, Wash., May 01, 2024 (GLOBE NEWSWIRE) — 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.


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

BBSI’s 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 Company’s 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.


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.

BBSI’s 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

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.

  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.

  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.

  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 Company’s integrated platform is built upon expertise in payroll processing, employee benefits, workers’ compensation coverage, risk management and workplace safety programs, and human resource administration. BBSI’s partnerships help businesses of all sizes improve the efficiency of their operations. For more information, please visit www.bbsi.com.

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 Company’s 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 Company’s mix of services on gross margin; the Company’s ability to attract and retain clients and to achieve revenue growth; the availability of financing or other sources of capital; the Company’s 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 Company’s primary markets; litigation costs; security breaches or failures in the Company’s 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 Company’s investment portfolio; and the potential for and effect of acquisitions, among others. Other important factors that may affect the Company’s prospects are described in the Company’s 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.

Barrett Business Services, Inc.
Condensed Consolidated Balance Sheets
  March 31,     December 31,  
(in thousands) 2024     2023  
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  
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  

Barrett Business Services, Inc.
Consolidated Statements of Operations
  Three Months Ended  
  March 31,  
(in thousands, except per share amounts) 2024     2023  
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


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