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BBSI Reports Strong First Quarter 2024 Financial Results
来源: Nasdaq GlobeNewswire / 01 5月 2024 16:05:00 America/New_York
- 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.
Liquidity
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.
Outlook
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: 13746013Please 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: 13746013Key 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.
(Unaudited) 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.
(Unaudited) 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.
(Unaudited) 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
(Unaudited)March 31, December 31, (in thousands) 2024 2023 ASSETS 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 LIABILITIES AND STOCKHOLDERS' EQUITY 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
(Unaudited)Three Months Ended March 31, (in thousands, except per share amounts) 2024 2023 Revenues: 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
BBSI@gateway-grp.com