BBSI - Earnings call transcript Q4 2018 | Barrett Business Services, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, everyone, and thank you for participating in today’s conference call to discuss BBSI’s financial results for the Fourth Quarter and Full Year ended December 31, 2018.

Joining us today are BBSI’s President and CEO, Mr. Michael Elich; and the Company’s CFO, Mr. Gary Kramer.

Following their remarks, we’ll open the call for your questions.

please the of Securities meaning Act XXXX. further, harbor Company’s Litigation go of within statements of we take the note safe Reform Before the Private cautions statements. The regarding provides important statement forward-looking today’s conference The Company’s remarks call include forward-looking will statements. during presented the fact to of These number not and risks subject does information along reflect that statements, uncertainties. a certain with historical are Actual these forward-looking results statements. may differ materially from those implied by Exchange Company’s Company’s with actual the to that recent for and quarterly the annual refer and uncertainties the earnings about Please to results information filed and reports Securities and the Commission more release to risks differ. cause could I for everyone replay remind at that available XX, March will XXXX, starting be Time would like through Eastern X:XX this to PM call afternoon. this also today’s available provided the be link as well will press as website the in at Company’s www.barrettbusiness.com. via webcast A release, replay

turn to Sir, Gary would call ahead. I Chief Now, go Mr. please the to BBSI, Officer Kramer. Financial like of over the

Gary Kramer

over QX than X.X% the basis geographies. quarter compared PEO billings weaker revenue. billion XX% last $X.X compared the in everyone. period. other Thank good the be you, staffing we grew Brenda. $XXX.X was from, about Diluted continued the operations the strong Gross same quarter good The income lower or was of reflected in XXX to quarter Gross to Same-customer $X.XX for in and record to fourth growth X% in billings forecasted. of morning X% of Company of Depending versus and year. in California the increased QX $XXX.X revenue XXXX fourth Net XXXX a $X.XX were to million increased billings to million share combined by gross XXXX. upon all quarter. the quarter XXXX to of compared grew to where you’re X.X% per $X.X X% compared billion in in dialing afternoon, points sales XX% fourth fourth in

X.X%. our total in only themselves softest their gross quarter growth pay at bonuses Also, our and down year X% XXXX. XX% of XQ XX% comprised of with billings prior employees experienced of than over the the from growth the to growth clients expected, sales rate same-customer California Southern quarter, lower in were and a

direct increase We tight was gross staffing a we greater or and This $XX fourth in XXX business. is XXX to any our this record a labor million. our the of client continue employers our expected we’ve effect addition additions a the the of in for XX% for with history. that experiencing of gross This base discussed fourth are as to net was slightly difficult quarter market. continued decreased a clients quarter Each revenues making hire and quarter. result in Staffing quarter to trend in decrease than for run-off it our this

the it fulfill challenging have orders from and without standards. to We demand is hiring orders our clients, compromising but

anticipate staffing headwind we slight near-term continue a be revenue to such, As growth. will that to

billings. Moving unchanged. to clients fee our charge gross cost remained relatively of to the The we

as other increasing of of many states where an taxes compensation and decrease. PEO California is to payroll and However, is This components workers’ mix related gross outside payroll in have expansion gross of percentage business a continued the as lower billings margin ratios. increase

this as expense billings annual versus was as than payroll estimated QX favorable taxes for of a X% percentage a a affect for of below Gross the year. pricing, of cost being XXXX. payroll in to our range and gross tax billings in the quarter The restructured composition as adjustment of benefits of gross reduction we our benefits Given percentage in for which million. quarterly fourth new clients and of quarter, payroll X.X% contained transition expected X.X% estimated resulted the was XXXX liability increase QX $X.X shift the year profit. costs Also, actuarial of expense seeing X% revenue to X.X% our as previously independent into Workers’ to X.X% a less This the originally valuation arrangement prior pass-through more are our branch the these our discussed, reduce nature in not of structure. in with is the in frictional year. and compensation of this compares does Chubb of

All-in, In compensation XXXX. to pleased compensation of XX-month fourth the the percentage claims as the performing. line is very frequency relative are with of compared of trailing way workers’ quarter, Our saw continues in trend to quarter we a payroll expectation. workers’ portfolio frequency we with claims X% decrease our

costs in into why have taken best-in-class two $XX.X of to frictional is year expense of compared to in billings, result accruals. our and gross of sharing We settlements in with or as related strict or million items prior wrap compensation The earnings of and the focus and quarter. dollar procedures. year attention to million attributable portfolio the in $XX.X million SG&A in a the the in reduce has row people, and quarters severity, compared X.X% X.X% $X consideration, fourth X.X% range. X.X% billings million frequency, the a gross resulted SG&A program or reduce processes million increase and to and minimize or was $XX redundancy margin growth many is quarter. This in cost prior record gross our a $XX.X sale in is quarter Taking these plus legal coming profit steps to an incentive below was

$X.X taxes balancing about fourth be the while was quarter the The for income mindful to investing million. in We growth continue provision future. diligent the in business for spend against and

greater and being tax than credits passage was Job Act, lower gain as Tax The to efficiencies fourth was XX%. with the effective than quarter the XX% was anticipated. in the year the rate previous of well taken actions for estimate our Cut Our of due favorability as to other and

XX/XX/XX to be borrowings continue Moving credit as sheet. debt-free to the had of the for we our corporate except on Vancouver, Washington. We million mortgage no balance line $X.X and in under headquarters our

Chubb, program trust established trusts. fronted with called As compensation part funded Chubb we of our the insurance and workers’ accounts

of On duration We balance with curve million three-month the cash yield The $XXX banks an where million investment December At of in the at basis basis the in At included XXX restrictions portfolio are XX, balance asset basis portfolio. treasury. over duration million XXX liquid and At guidelines headwinds from points In security revenue XX/XX/XX. to on at that and to and to the were and matching cash the trusts of due has the the decision discussed near-term. diversification. $XXX a crediting both target XX/XX/XX. was the asset the made in of $XXX we spread was Chubb investment will portfolio than AA at trusts for earn of the of eligible The asset the years the $XX.X trusts. class the income last XX/XX/XX will the of greater Chubb shifted conditions. points. XX/XX/XX, book growth in restricted year, balance that decreased strategy in challenging liability and sheet, rising and highly staffing rates the and X.X million slightly at shorter quality the our summary investment. flattening $X.X to quarter investment our one a high XX/XX/XX, a that million investment stay points is We In quality for negotiated vehicle had of returned we cash X.X PEO XX a annual average to quarter, trust years with hiring and portfolio. faced no slight from yield due for rate X/XX/XX earned This we was X% we and we

our base. record on control number for In return, like focus in new the widening to year. continued of client a we things we However, clients our the added

and We mindful continued growth, the everything for and in being in invest efficiencies expenses we future and do. looking savings while business to of

workers’ $X.XX. Our of record well of actions outlook earnings This XXXX XXXX direct favorably is a have versus steps growth is taken. our a resulted we exceeded developed in which of $X.XX, portfolio in result and and compensation various XX% and

dividends We also million. to in $X.X the of shareholders returned amount

Turning the page and XXXX outlook to on business. the our

and we clients. pipeline continue build to new base net strong of Our remains our

are channels relationships distribution and referral our Our widen. continue to deep

for gross This XX-month rolling be in approximately to XXXX. similar and We revenue contemplates same-customer staffing billings the next X%. continuing sales period PEO to to be deceleration growth expect per growth

For tax the effective we to earnings XXXX, share year of rate an diluted full be expect per This assumes XX%. approximately approximately $X.XX.

of We workers’ be also workers’ compensation and expect expense our X.X% to gross percentage X.X%. range be the a billings as of estimate will to now compensation lowering

an plus and earnings in federal XXX-point change represents compared for Our growth settlement tax the prior XXXX. a SEC certain to non-repeating of between the transaction XX% XXXX, XXXX adjusting estimate of in spread in normalized workers’ rate outlook year’s EPS compensation, and XXXX after our expected estimated

Mike I’d comment Now, the BBSI, well to call over the to Elich, outlook of as turn like operational for who fourth as CEO President XXXX. quarter, completed will further recently Mike? our the on and

Michael Elich

call. Hello and on for the the to time be you thank taking

about XXXX. move strong We like on discussion to year. had on Before comment a I I’d quarter, the a to

and remains very to value. line support feel we the record seeing strong remained proposition create our top in The of continued While shareholder market. of than softer good value fundamentals and our ability business we about are the the historical earnings levels,

the vision, the deal confidence As spent which a we the of in of field closed great organization. aligning out XXXX, I in maturity reinforces time

to understanding space. what on These business address offering strengthening business spend We with their also we be partners and and means with market. time challenges how spend working time may we to our owners they to may referral time evolve continue continue broadening our in seeing referral our over provided to to disciplines channels, understand

workers’ with our emphasize compensation. discipline Additionally, while approach to we to our restructured agreement in continuing Chubb,

for new XX risk clients the that We closed, approximate the navigated may businesses of due also of clients; net the model. the clients. slight pull to and accounts of are In time and to adding at to sold, were speaking competition PEO represents with an in existing in We XX companies canceled lack tier we we headwinds and better This to of and again eight new the XXX successfully line branches quarter, California new XXX have our the took in moved due left XXX away we while once new due clients XXX time growth and outsource clients. net quarter, most receivable, experienced optimistic. quarter they seeing to five our top Also profile, XX understand opened cautiously pricing same what year. be attrition Nevada XXX progression, in from businesses build clients added

client business find there owners one There BBSI. we is partners expressed growth. to general, variety of Related is not able to is expansion, continues to also grow, our softness be to seeing are also the limitation We same-customer in uncertainty we opportunity for understanding number to in believe a we quarter and are to but labor is macro heard believe general talent skilled the related continue to shortage recommending they that we but spoke see pipeline, strong issues. to runway and adds need of optimism, which this the why sales. of we the and result a referral the In

across invest out four California. branch Barbara, added Santa business in we product a teams the to Also branches use new based XX We model future channels individual measure to of in brand evidenced physical for we referral we a a basis. continue support strong new Today, the on a branch’s build our indicate closing XX evolve rate to housed Related offering. XXXX systemic developing approach the a opened growth, branches. continue new have stratification, in quarter, growth contributors to in seeing of $XXX referral we scale with client our million. supports continued support ability Related are channels business pipeline ability we adds. organization development XXX structure, to in as a with market to and run of increase field scale organizational national This into teams, of to from to all leverage. to markets, is excess markets In mature which quarter, on we by

$XXX reinvest regularly into We they as We $XX grow. running teams these have XX capacity million emerging million. and branches between to back support

to up to Finally, XX of these as maintaining they of million. we consistency branches we invest developing product branches pipeline rates In integrity while scale. have we consider run with support of $XX

infrastructure as see we to long-term we’ll to we markets, our strategy are this in softness continue is Although in some and temporary invest experiencing appropriate.

relevance from Looking in partners field, at ability the of time and the of I strong. forward and support Having the maturity fundamentals to referral stay year remain structure teams the the look on bringing nimble. predictability – of clients our We look our XXXX, a the of my the and throughout organization’s focused in the years. deal business strength leadership, great value execute received to in from we are business long-term. we over product to Feedback to comes as us allows next confidence five our our spent the our that and

in physical predictable our At strategy, to into invest having with to outcomes. housed XX we product supports ability four XXXX, and and more teams locations anticipate the to continue business infrastructure new in We is our growth in XXX both scale XX with long-term add new of our teams markets conjunction than evolution goal In XXXX. that the locations. end physical

leave are I’ll executing strong, it we are to we our know to foundation questions. our where With we energy open plan. focus We at the that, and to point need a is where

Operator

questions the Jeff come line of Our with [Operator Martin Instructions] from Capital. first ROTH

Jeff Martin

are and How Good Mike you? Thanks. morning, Kramer.

Michael Elich

Good morning, Jeff.

Gary Kramer

Hey, Jeff.

Jeff Martin

out some revenue things we and and and traditionally overall, at business we to get in need terms the back to, your say, to Say, what would in a XX% to get these effect growth? grown rate? a transpire rate, has to California of XXXX growth maybe strategy your look of beyond sort Can of XX% market much headwinds faster past

Michael Elich

in that So will gotten a that time as of be where be we’ve different typically market be period, softness that of the through little a create sellout there periods can one watched through a that things can maybe in market. bit things the different go is period you there there dry-down as a expansion recession, of can of we’ve

load-level One of most into the dollars that’s and we discipline the move our one the against is know create reinvest in things that standpoint, can we organization one. we traction, an where mode expense do we number from where a we

the on focused of always are our we widening base. Secondly, discipline

wider. clients can control that, in simply and what we we book. add the how many So have retain our get And do we we is as

adding even tight becomes softness or headwind. based shortage a So facing today see labor in headwind probably if ourselves clients the our that and of expansion smaller we market, on or labor

and from. point continue of people, can And that’s to widen the and so out more we with people, will base headwind, as to at back and related corrects we a wider that eventually growth settles a where our our when market to that they comes uptick you’ve hire hire get see customer, some you and environment start to them got base

Jeff Martin

then, kind next And my of segued question here. Okay. into

versus suggest on quarters, get next client half of we versus Your first continue of the year-over-year adds growth if client here in half of second range? second the in half of two, the the growth of Does half the whereas an down XX% the year were that up based first that in see add acceleration was XX% XXXX, the three you’ll kind to XXXX.

Michael Elich

the You happens should in on underlying just clients see that. what It depends themselves.

exactly it, you’re to making you’re or numbers XXX-plus to new little clients we’re bit the adding, old It’s call adding. when momentum, of should bit take what help hard a in should of as with on And if you how just be we getting So a and quarter-over-quarter a That’s Yes, the turn – then in to happens. a little predict bills. should. able you you close just of base same-customer X,XXX turn by nature to a viewing comps have bit the then – you of yes, your from you’re it. of and year, see that

Jeff Martin

more any to in approach with market And the comp in shift competitive, of rates then market there there? the workers’ is Okay. being terms California your

Gary Kramer

Jeff. Hey, Yes.

gets decreases where point it’s rate on the you reductions, in when And You’re reductions is rate your of exponential. lower. it market exponential, which get get getting a rate kind where to

partners to And rather idea, comes cost a as try a pay lot that be done far are with going be as about the things doing but be when go dividends not – gas rate little a we’ve then trying is historical I where surgical to of whole So costs XXXX if have exponential can we book less I for the rightsized think we because structure. really to think us, have we decision the for to more idea. where that factor. tank in XXXX, flexible, give can accounts will flexibility the the just in down And revamp the doing our on market based And long-term we going way we’ve we clients. to than seen We’ve XXXX reductions of the rate in in here. the upon our then, of rate our to much a some

Michael Elich

we’ve at we maybe feel new we you’re see to next to months we’re little of the very ourselves even put selection. year kind at sure The normalizing out we’re sea spot shift One reason. we losing a into can of to that XX about exactly right a comfortable It’s XX clients But is we it, that keeping of dry-down that good good spot now, things saw adverse reverse. as and a when not feel for see change we’re we’re last that year. good hard in I want, look a trend. and of have the the the where bit see that in months done a we’ve we going over with wrong work where at starting spot the any what year we we gotten in make period business to a in understand see least to and some watched the in And the we’re not that’s we’re that to that a over

Jeff Martin

general? taxes adjustment the fourth that and Kramer, quarter how affected quarter in the you then, benefits and in payroll the the elaborate year and could And Okay. on

Gary Kramer

Yes.

do that those So based the we estimates the factors, to have going when our year, couple right. upon through accruals estimates we a – are and different

wage not what you So the keeping with they’re caps, right. see is inflation, pace really wage

it, getting, is but staying fixed, which to are raises, that payroll means caps down. go call people X.X% ratio going are tax So those wage

to some seeing states tax is really and less which been really be client’s also an in we We’re coming thought pseudo the taxes this experience the unemployment peg is then the the than clients’ other pseudo were upon tax the of flow. and the have in they taxes employer bucket because experiences unemployment would really based that for favorable and

of ratio be a getting is about to to tax how the think for payroll be. going to me come consistent little down. but think the XXXX going which or Actually confluences XXXX, ratio when what that’s that’s where then that’s and that our to XXXX to tax bit we trending it’s accretion we we’re So when react And estimate going are think were is sitting that let this – how for come the is really thinking full to I’m taxes positive from these for this to think XXXX have from are you’re your XXXX, to I say, going payroll I payroll revenue it’s thing, gross if down ratio it. about the making desk three and is going the margin just not one-time trend I about a annual take the really year – how at

Jeff Martin

Okay. Great. guys. That’s Thanks, helpful.

Operator

of Moore our Chris Thank line you. questions the from CJS. next with come And

Chris Moore

guys. afternoon, Hey, good

Michael Elich

Good morning, Chris.

Chris Moore

for XXXX versus back kind most to talk sales looking at go the bit wages coming just and more could how and growth or you’re same-customer XXXX little minute expecting of from a about of we expectations, it? compare the a of kind you’re Maybe just

Gary Kramer

Yes.

we and the guidance back be the when to with is XXXX we I all macro. for for our right. the think to consistent take give macro for we think So the macro, XXXX, of macro going first, step mean, number, a And have

there. So inflation, when growing function cycle same-customer a in that’s that the of wage basic are And look assumption of sales, a are through right. now way that And sales economy. the at the that’s we in we’re making where we then is same-customer our

half hours now get get of and we’re get inflation, we and is wage then same-customer coming we worksite we inflation. growth from and really employees worked sales So, what wage our seeing, ad over

trend X.X% So that than when think going call And we in forward year it then simple overall we going to take about how if I’ll it’s for lower geographies. that. the XXXX, XXXX and trend we think for about that’s going is a average to

trend that’s how So X% we and it’s model. up we’re guide around building our going think to up building and our

upside think that’s arguably really don’t I effect true we little it’s conservative, sales. book. going uncontrollable potentially that have macro depend of to the we some it’s a I there, the same-customer that can for but economy have the mean, upon in our maybe

Chris Moore

policies the and ultimately talking get the Got when July, an – by – new it. Chubb looking clients at That’s there? about of I conversation it when that I’m just talked XXXX. in on Is potential trying that adding what you’re Trust, ones, to kind important is component roll feel helpful. know then When for, is in pricing the program flexibility we’re a you that started will of about July in new retaining of or the

Gary Kramer

on to the that depends there it. concerted give it have and gained, way, efficiency effort a it’s of just to it’s the And any don’t but we and use. box we’ve try if go to strategic I’ll it’s need another say we client. want I know It back kind we this in tool say

Chris Moore

million question, legal was Got QX. that $X the incurred said fees recurring. number it be it. What you not will in that in the the was XXXX, about you year? total necessarily Specific for know guys I

Gary Kramer

on disclosures just business that that normal changes the up in to to specifically facts and on week, of the we had the quarter, this course of were but that. actions legal in that’s $X a was the the see had which they couple K. were some we it they it you’ll – when against XQ. had we see K you’ll then, addition a release million in we So in earlier in added in the go And And claims those was fourth next SEC year which just and

Chris Moore

you in point a started so just at out time staffing in sitting? Got assume headwind kind points on of terms, the it. of this side, – negative couple you’re And you where

Gary Kramer

it’s going bodies market be be to for that’s Unemployment fill it’s to it’s for in. hard think, down to – XX% staffing in XXXX. I mean, we’re a at, X% where it another find tough I seeing what operations the our of modify a to they’re that people where maximize lot efficiencies based or resources. are of to with the clients is we’re and behavior having are, to try their which scarce modify to the just to upon the general,

seeing operations function some really clients Coast things Coast we’re that to are of to that’s So for and things shifting the work and from trying the it. East do West get nature of where a people to

Chris Moore

That’s appreciate guys. helpful. I it,

Operator

of from are Our Sidoti. with Vogel questions next the line Josh

Josh Vogel

you. morning, Thank guys. Good

Michael Elich

Good morning, Josh.

Josh Vogel

guess, or seeing look guess, cost workers’ I of can are you at to I good. look that are question along guess initial you is to you and plans outside comp when pressures are? what pricing. Are Okay, on any you I you pass clients? keep around going that relief even to XXXX, vein, it your first flat maybe maybe think

Gary Kramer

kind of of set want XXXX. I Yes, kind just level to

one going that was of QX is our we have less we to growth XXXX, business be you’re QX day. because had when but in toughest into also So in to QX, know we XXXX QX of compare, our biggest going – get

revenue QX, margin, through upon when to up to to so gross and a a years to clients of right we’re based quarter better the good And selling way. of the We’ve have also, for one-one you it’s then, going to getting, quarter is the structure we of we’re in comp think had, be it we’re a I’d due year, to the business it going But going in into sizes first for holding year-over-year than For then first just to gross going year. a heads roll little right. extra give that that going the be in that this, whole all the of last margin the is softest quarter your analysis, more – we that’s is you’re year, the gross those and change we third because kind have be margin cycle. day, the the come the that of we’ve know of be going probably modeling, in a see margin, quarter accretion say lot workers’ couple to going as margin, in seen an

the So to we year, think be margin was going for the think is margin than about when we for better XXXX. year it for

Michael Elich

And that Josh. we couple generating roadwork we’re today how would whether at look – we alignment is it’s I value I years Yes, when the clients we’re there where – to I we’re the bringing if stronger. how is probably our look our there a how too years. over accretion just pipeline, of to to never proposition couple the on, say the last of of last the how improved done organizationally chamber at think echo we’ve creating our within ability margin And in sustain been where dramatically be market we’re the our we’re bringing back, continued even and/or even has teams able to – expand the that at value model,

a good trend on we’re that think I so, there. And

Josh Vogel

Okay, to seeing at little X.X% come margins. can comp time, workers’ workers’ a more the at or just see leverage you on in room But front. Is bit where great lower? looking or leverage? do can else Clearly, you’re SG&A additional Over comp there great. think the line? operating And expect we on look to

Gary Kramer

on goes give to X.X%. conservatism. a gave revise when to err how the of Yes, We’ll X.X% comp year our we the on side and lowered for the give from see we range we our we Ultimately, workers’ expectations try that. – earnings guide,

for keep SG&A, with model. And keep revenue leverage really it. looking the can mind we that in So so then our that in our try line growth SG&A when at you’re show in to we

we’re is XXXX number. and in the parity more growth than to that where SG&A, So in to our normalizing in going gross see what XXXX revenue with revenue SG&A going our the was to higher it’s grow

Michael Elich

larger super-mature a as stratification also at to look I’d that add, and more that branches mature as get you percentage of Yes, of they the we those level, the branches branches Josh, of we’ll tend will in leverage effectively. then and to more where from that’s see coming units, efficiently infrastructure leverage you time our operate begin more operating to also operating which more individual our

Josh Vogel

try Okay, clients? that great. over along this around I at squeeze of, last When that And know think you running is neutral it one just you just kind something to out you’d net pass the point, some of rather to at comp, workers’ look profits earnings. can Is we Or time? this one. to

Gary Kramer

How do you get to the net neutral?

Josh Vogel

told past. That in commentary the was just on you based

Gary Kramer

historically try a core operations bank that row dividends we include to mean, than our our to mean, breakeven want and but coming thought – I don’t the to be we any don’t of we seen would I some greedy, Yes, a slight we really the is, more philosophy be We price Okay. ever ever – the paying and if don’t we quarters the happens consistent, third profit. the lowest, here in we we’ve a at be on the And what in work is highest, change we now we’ve prior want favorably of that, XXXX in then you’re to is guide to and quarter the that don’t don’t the our estimate in that’s is seeing. in industry in And that the for bank business. we two really ever seeing right. what we we’re quarter, done want on be don’t it fourth

Josh Vogel

Okay.

Gary Kramer

at well, to efficiencies that can than it little be to be used it we have we’ve Josh, does different little it’s the matured look bit as that also and accretive. I think I’d say program we’re the at we that may look also, more And that allow finding to

Josh Vogel

commentary locations branches. I add to some be are outside physical Mike, it, but had may you to in California? all have I’m the sorry, of you And going four the those plan just around XXXX, missed of Okay.

Michael Elich

No.

Gary Kramer

will mix of be It California and a outside. inside

Michael Elich

one in I now, now we there’s think right that’s in have California one our Colorado, right target markets in in Philadelphia. works, one already

Gary Kramer

the later year. Nashville and Allentown in

Michael Elich

Tennessee. so yes, Nashville, And

and outside. So we’re one-third so diverse, California one-quarter – or three-quarters

Josh Vogel

Thank Okay, much. great. you very

Gary Kramer

Thanks, Josh.

Michael Elich

you. Thank

Operator

Thank Bill Instructions] questions with of line from next [Operator Our you. Dezellem the are Tieton.

Bill Dezellem

of A you. Thank group questions.

you that’s going to expenses, if charge $X.XX in that referenced, First be had have quarter, that relative we of the additional correctly, had roughly fourth had to is correct? earnings million the all, that you not you those would understand $X

Gary Kramer

is mine, math not Your it doesn’t…

Bill Dezellem

$X.XX? to $X.XX

Gary Kramer

sound though. Yes, unreasonable doesn’t it

Bill Dezellem

And quarter fourth cost Okay. the that in Thank experienced then frictional what was the you. to reduction, that relative specifically? the benefit

Gary Kramer

out where try an trend programs, why you’re specifically mean, we’re to is to third do first synergies is is in quarter quarter second trying are is to for down of parse to we is going to these this less, quarter see our then for get new to all I where in in hard going which as and baked trend off. it be call those that run normal guide. those the way XXXX this It’s going the annual to

Bill Dezellem

the halfway the are proportion you feel not year, through have we but the And do benefit of that given like so, you now renewals accrued? what linear, are now

Gary Kramer

of we’re that’s be the really and add. kind clients selling build a if don’t look It’ll our the to a consistent – comp accountable have mean, cycle. hold clients through we the company onboard, strength for we not I you ourselves of pretty our comp way quarter-over-quarter when

roughly to say the the of QX, looking would the will our of I So be end get XX% about on we structure. clients by new time

Bill Dezellem

of what the number? as was that fourth And quarter,

Gary Kramer

hip I’m Bill. here, shooting the from

a work your do can number I So and to offline. get try little

Bill Dezellem

Okay. No…

Michael Elich

still that think half, less basis would linear a but be than On I it’s little that.

Bill Dezellem

referral have further. improve to you that changes make and the about referenced you your partner improving to should made you talk you’ve Would And process. that what additional you think it can funnel even enough. that changes still improve Fair or

Michael Elich

with that in them we’re of see about. accomplish about then understand of organization as a individual started to that to there a owner in when what That’s referral the active from relationships our more a regions ago roadblock and and those be on organization couple taking individual our and quality, We what the spear based it step. we first what a educating the started that the we’re to toward we around we eliminate really of we helping any was an we may branches so start in where where one when One regions shared things or we’ve markets we’re process. of the aggregated years function is when contributors got who recognizing a leader trying basis to was the started more partners them micro we traction tip to effort on move had are, about really and individuals that be – more

we once The how and on effectively the next their workers’ and we’re phase that be we get start it business, for outside track them to producer but that with go this to small to they have the ambassadors impact really the that the benefit be today bring is is organization to to most build, on when we these market that energy own those what more they support us and second that help them boots we see comp, meetings about how where what once our that we ground product step then organizations do we more probably is effectively individual and in through our able putting begin work to and they understand see understand to they they drive. are is our well in and

within turn to into players into bigger those run think want brand a then with micro we then strategically the regions regions work to have and strategic mature next align low where more how to both how the enter those our bigger markets. I some we a at really and we it multi-year is field, regions, process those that with in that footprint individuals front continue even and looking plan in that of that new with call

Bill Dezellem

led or in and mean, versus million what What’s you – Great. Thank the you. $X Can I the XX% million charge it XX% quarter. the was so or SG&A over talk And of a of that that absolute $X presume finally, to it I referenced. about difference. is year-ago remainder? was you revenues the then charges

Gary Kramer

mean, $X we is Yes, that mentioned million a big the it’s really piece. I

as at people, more investments pay in that’s incentivized I like have we And we our in we earns piece the product, is, then we actually the our of and other is record we to earnings company earn have management had are upon based day, Company year, the second as and invested in the folks more, something our and branches more out our our profit. we do the The And end money people, a payroll there. and is are up. going

– I’m money. I’m So afraid afraid not not of of for making paying our the profit share

Bill Dezellem

you, for a sharing Okay. next Thank hope massive We’ll both. year. profit

Gary Kramer

Thanks, Bill.

Michael Elich

Thank you, Bill.

Operator

call closing question-and-answer comments. over At Mr. to to Elich the this turn this like time, concludes session. for our I’d back

Michael Elich

in team to close like beyond stay In wanted when work time. going, to trust all I’m I’d go It’s just a every the on business to them. closing, been that us you’ve And out for pursuit to well with look excited think we thank you what’s organization their I XXXX, the small fired has in over period as just I get we member ring we just in like And really for as we ability with support continue out and the you. really to and would that. call. it confidence ring you I being our that’s just XXXX thank and know stay to let getting to continue and I a us reach to up everybody, the the ready get that their But just have very you of clients our pretty Thank we every partners started. want our I know at on there who purpose of to core of as BBSI good and work mature we’re we also person, we’re do possible. And for it. much, where to in impact that about got referral to of for long we thank

it everybody all do to you make that So you. I thank to work. Thank all want for

Operator

Thank concludes you. today’s This teleconference.

your at lines you time thank and disconnect for participation. may You this your

Barrett Business Services (BBSI) 27 Feb 192018 Q4 Earnings call transcript