EXHIBIT 99.1
NEWS RELEASE
For Immediate Release Contact: William W. Sherertz
President and
Chief Executive Officer
Telephone: (503) 220-0988
BBSI ANNOUNCES RESOLUTION OF BALANCE SHEET ACCOUNTING TREATMENT
PORTLAND, OREGON, March 9, 2005 - Barrett Business Services, Inc. (Nasdaq:
BBSI) reported today that management has completed its analysis and
determination as to the treatment of certain estimated reimbursements due from
its excess workers' compensation insurance carriers and the corresponding
estimated liabilities to claimants. On February 10, 2005, in connection with
announcement of the Company's 2004 fourth quarter operating results and
preliminary balance sheets for December 31, 2004 and 2003, the Company stated
that the balance sheet effect, if any, on long-term assets and long-term
liabilities related to this issue had not been determined.
The Company retains certain levels of exposure with respect to its
self-insured workers' compensation program and purchases insurance coverage from
third-party insurers for exposures in excess of those levels. Until December 31,
2004, the Company established accrued liabilities for workers' compensation
claims, both reported and incurred but not reported, within its level of
retention based on currently available information, as well as its historical
claims experience. During the year ended December 31, 2004, the Company
determined that it should present its accrued liabilities for workers'
compensation claims on a gross basis along with a corresponding receivable from
its insurers, as the Company is the primary obligor for payment of the related
insured claims. As a result of this revision in classification, the Company has
increased its accrued workers' compensation claims liabilities as of December
31, 2004 by $4.4 million (of which $0.2 million is estimated to be currently
payable and the balance a long-term liability) and has also recorded
corresponding receivables for these insured claims from its prior excess
workers' compensation insurer, CNA Financial Corporation. In order to conform
the Company's prior financial statements for this revision in classification,
the Company has increased its accrued workers' compensation claims liabilities
as of December 31, 2003 by $4.2 million (of which $0.4 million was estimated to
be currently payable and the balance a long-term liability) and has recorded
corresponding receivables for these insured claims from its prior excess
workers' compensation insurer, CNA Financial Corporation. The Company will
continue its past practice of evaluating the financial capacity of its insurers
to assess the recoverability of the related insurer receivables.
The revision in classification had no impact on the Company's financial
condition, results of operations, cash flows or working capital.
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Barrett Business Services, Inc.
News Release
March 9, 2005
The following summarizes the unaudited consolidated balance sheets at December
31, 2004 and December 31, 2003.
(Unaudited)
-----------------------
December 31, December 31,
($ in thousands) 2004 2003
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 12,153 $ 7,785
Marketable securities 4,630 --
Trade accounts receivable, net 23,840 18,481
Prepaid expenses and other 1,364 958
Deferred income taxes 4,100 2,196
Workers' compensation receivables for insured claims 213 393
-------- --------
Total current assets 46,300 29,813
Goodwill, net 22,516 18,749
Intangibles, net 25 13
Property, equipment and software, net 4,301 3,367
Restricted marketable securities and workers'
compensation deposits 1,702 1,647
Deferred income taxes 582 1,041
Other assets 401 436
Workers' compensation receivables for insured claims 4,158 3,768
-------- --------
$ 79,985 $ 58,834
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 348 $ 88
Accounts payable 994 727
Accrued payroll, payroll taxes and related benefits 17,427 13,881
Workers' compensation claims liabilities 4,946 3,886
Workers' compensation claims liabilities for insured claims 213 393
Safety incentives liabilities 4,807 2,007
Other accrued liabilities 414 361
-------- --------
Total current liabilities 29,149 21,343
Long-term debt, net of current portion 1,441 400
Customer deposits 608 455
Long-term workers' compensation claims liabilities 4,840 1,031
Long-term workers' compensation liabilities for insured claims 4,158 3,768
Other long-term liabilities -- 45
Deferred gain on sale and leaseback 1,036 1,158
Stockholders' equity 38,753 30,634
-------- --------
$ 79,985 $ 58,834
======== ========
BBSI provides human resource management solutions to large and small
companies throughout many regions of the United States.
Statements in this release about future events or performance 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,
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Barrett Business Services, Inc.
News Release
March 9, 2005
the effect of changes in the Company's mix of services on gross margin, future
workers' compensation claims experience, the effect of changes in the workers'
compensation regulatory environment in one or more of our primary markets,
collectibility of accounts receivable, and availability of funding for working
capital purposes, among others. Other important factors that may affect the
Company's future prospects are described in the Company's 2003 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.
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