25.07.2007 20:41:00
|
BBSI Announces Second Quarter 2007 Operating Results, Financial Guidance for 3Q07 and Conference Call
Barrett Business Services, Inc. (Nasdaq:BBSI) reported today net income
of $4.9 million for the second quarter ended June 30, 2007, an
improvement of $693,000 or 16.5% over net income of $4,188,000 for the
second quarter of 2006. Diluted earnings per share for the 2007 second
quarter were $.42, as compared to diluted earnings per share of $.36 for
the same quarter a year ago.
Net revenues for the second quarter ended June 30, 2007 totaled $63.9
million, a decrease of approximately $769,000 or 1.2% from the $64.7
million for the same quarter in 2006.
(Unaudited)
(Unaudited)
($ in thousands, except per share amounts)
Second Quarter Ended
Six Months Ended
June 30,
June 30,
Results of Operations
2007
2006
2007
2006
Revenues:
Staffing services
$
29,747
$
30,567
$
57,762
$
57,228
Professional employer service fees
34,139
34,088
66,712
65,712
Total revenues
63,886
64,655
124,474
122,940
Cost of revenues:
Direct payroll costs
22,416
22,831
43,558
42,682
Payroll taxes and benefits
20,542
20,437
44,453
43,274
Workers' compensation
5,964
7,198
11,808
13,752
Total cost of revenues
48,922
50,466
99,819
99,708
Gross margin
14,964
14,189
24,655
23,232
Selling, general and administrative
expenses
7,727
7,882
15,115
15,102
Depreciation and amortization
316
329
665
630
Income from operations
6,921
5,978
8,875
7,500
Other income, net
790
670
1,575
1,302
Income before taxes
7,711
6,648
10,450
8,802
Provision for income taxes
2,830
2,460
3,841
3,257
Net income
$
4,881
$
4,188
$
6,609
$
5,545
Basic earnings per share
$
.43
$
.37
$
.58
$
.50
Weighted average basic shares
outstanding
11,263
11,203
11,259
11,140
Diluted earnings per share
$
.42
$
.36
$
.57
$
.48
Weighted average diluted shares
outstanding
11,690
11,683
11,686
11,672
The Company reports its Professional Employer Organization services ("PEO”)
revenues on a net basis because it is not the primary obligor for the
services provided by the Company’s PEO clients
to their customers. The gross revenues and cost of revenues information
below, although not in accordance with generally accepted accounting
principles ("GAAP”),
is presented for comparison purposes and because management believes
such information is more informative as to the level of the Company’s
business activity and more useful in managing its operations.
(Unaudited)
(Unaudited)
Second Quarter Ended
Six Months Ended
(in thousands)
June 30,
June 30,
2007
2006
2007
2006
Revenues:
Staffing services
$
29,747
$
30,567
$
57,762
$
57,228
Professional employer services
237,957
226,845
467,470
435,519
Total revenues
267,704
257,412
525,232
492,747
Cost of revenues:
Direct payroll costs
224,605
214,247
441,233
410,212
Payroll taxes and benefits
20,542
20,437
44,453
43,274
Workers' compensation
7,593
8,539
14,891
16,029
Total cost of revenues
252,740
243,223
500,577
469,515
Gross margin
$
14,964
$
14,189
$
24,655
$
23,232
Gross revenues of $267.7 million for the second quarter ended June 30,
2007 rose 4.0% over the similar period in 2006. For the first six months
of 2007, gross revenues of $525.2 million increased 6.6% over the
comparable 2006 period.
A reconciliation of non-GAAP gross revenues to net revenues is as
follows:
For the second quarters ended June 30, 2007 and 2006:
(Unaudited)
Three Months Ended June 30,
Gross Revenue
Net Revenue
(in thousands)
Reporting Method
Reclassification
Reporting Method
2007
2006
2007
2006
2007
2006
Revenues:
Staffing services
$
29,747
$
30,567
$
-
$
-
$
29,747
$
30,567
Professional
employer services
237,957
226,845
(203,818
)
(192,757
)
34,139
34,088
Total revenues
$
267,704
$
257,412
$
(203,818
)
$
(192,757
)
$
63,886
$
64,655
Cost of revenues
$
252,740
$
243,223
$
(203,818
)
$
(192,757
)
$
48,922
$
50,466
For the six months ended June 30, 2007 and 2006:
(Unaudited)
Six Months Ended June 30,
Gross Revenue
Net Revenue
(in thousands)
Reporting Method
Reclassification
Reporting Method
2007
2006
2007
2006
2007
2006
Revenues:
Staffing services
$
57,762
$
57,228
$
-
$
-
$
57,762
$
57,228
Professional
employer services
467,470
435,519
(400,758
)
(369,807
)
66,712
65,712
Total revenues
$
525,232
$
492,747
$
(400,758
)
$
(369,807
)
$
124,474
$
122,940
Cost of revenues
$
500,577
$
469,515
$
(400,758
)
$
(369,807
)
$
99,819
$
99,708
William W. Sherertz, President and Chief Executive Officer, commented: "We
are pleased with our record second quarter earnings and anticipate a
stronger performance in the third quarter.”
The following summarizes the unaudited consolidated balance sheets at
June 30, 2007 and December 31, 2006.
June 30,
Dec. 31,
(in thousands)
2007
2006
Assets
Current assets:
Cash and cash equivalents
$
71,025
$
69,874
Marketable securities
3,625
3,159
Trade accounts receivable, net
36,906
31,328
Prepaid expenses and other
2,109
1,940
Deferred income taxes
4,182
4,699
Workers' compensation receivables for insured claims
225
225
Total current assets
118,072
111,225
Marketable securities
411
406
Goodwill, net
28,036
27,536
Intangibles, net
62
75
Property, equipment and software, net
13,279
13,502
Restricted marketable securities and workers' compensation deposits
2,656
2,616
Other assets
1,893
2,143
Workers' compensation receivables for insured claims
4,295
4,678
$
168,704
$
162,181
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$
1,327
$
1,545
Accrued payroll, payroll taxes and related benefits
34,788
33,372
Income taxes payable
847
-
Other accrued liabilities
937
516
Workers' compensation claims liabilities
3,253
3,843
Workers' compensation claims liabilities for insured claims
225
225
Safety incentives liabilities
7,815
7,519
Total current liabilities
49,192
47,020
Customer deposits
689
817
Long-term workers' compensation claims liabilities
3,976
5,295
Long-term workers' compensation liabilities for insured claims
2,931
3,011
Deferred income taxes
2,449
1,545
Deferred gain on sale and leaseback
732
793
Stockholders' equity
108,735
103,700
$
168,704
$
162,181
Outlook for Third Quarter 2007
The Company also disclosed today limited financial guidance with respect
to its operating results for the third quarter ending September 30,
2007. The Company expects gross revenues for the third quarter of 2007
to range from $296 million to $302 million, an increase of approximately
9.2% over the third quarter of 2006, and anticipates diluted earnings
per share for the third quarter of 2007 to range from $.56 to $.59 per
share, an increase of approximately 19.8% over the $.48 per share for
the same period a year ago. These projected operating results include
the effect of the July 2, 2007 acquisition of Strategic Staffing, Inc. A
reconciliation of estimated gross revenues to estimated GAAP net
revenues for the third quarter of 2007 is not included because PEO
revenues and cost of PEO revenues for the period are not reasonably
estimable.
Conference Call
On July 26 at 9:00 a.m. Pacific Time, William W. Sherertz and Michael D.
Mulholland will host an investor telephone conference call to discuss
second quarter 2007 operating results. To participate in the call, dial
(877) 356-3717. The call identification number is 7359648. The
conference call will also be webcast live at www.barrettbusiness.com.
To access the webcast, click on the Investor Relations section of the
Web site and select Webcast. A replay of the call will be available
beginning Thursday, July 26, 2007 at 12:00 p.m. PT and ending on August
2, 2007. To listen to the recording, dial (800) 642-1687 and enter
conference identification code 7359648.
Statements in this release about future events or performance, including
earnings expectations for the third quarter of 2007, are forward-looking
statements, which 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
effect of changes in the Company's mix of services on gross margin, the
Company's ability to successfully integrate acquired businesses with its
existing operations, future workers' compensation claims experience, the
effect of changes in the workers’ compensation
regulatory environment in one or more of its primary markets and the
collectibility of accounts receivable, among others. Other important
factors that may affect the Company’s future
prospects are described in the Company’s 2006
Annual Report on Form 10-K. Although forward-looking statements help to
provide complete information about the Company, readers should keep in
mind that forward-looking statements may be 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.
BBSI provides a comprehensive range of human resource management
solutions to large and small companies throughout many regions of the
United States.
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