Barrett Business Services, Inc. ( BBSI)

Q3 2010 Earnings Conference Call

October 27, 2010 12 PM ET


Jim Miller – CFO, VP - Finance, Treasurer, Secretary

Bill Sherertz – Chairman, President and CEO


Josh Vogel – Sidoti & Company

Jeff Martin – Roth Capital Partners

Doug Stoning [ph]

Jerry Harbinger [ph]



Good afternoon. My name is Cassandra and I will be your conference operator today. At this time, I would like to welcome everyone to the Third Quarter Earnings Conference Call. (Operator Instructions) Thank you.

And now, I would like to turn the call over to Jim Miller. You may begin.

Jim Miller

Thank you. Good morning, this is Jim Miller with Bill Sherertz. Today, we will provide you with our comments regarding the company’s operating results for the recently completed third quarter ended September 30 th and our outlook for the fourth quarter of 2010. At the conclusion of our comments, we will open the call up for your questions.

Our remarks during today’s conference call may include forward-looking statements. These statements along with other information presented that are not historical facts are subject to a number of risks and uncertainties. Actual results may differ materially from those implied by the forward-looking statements.

Please refer to our recent earnings release and to our quarterly and annual reports filed with the Securities & Exchange Commission for more information about the risks and uncertainties that could cause actual results to differ. Page one of yesterday’s earnings release reflecting our operating results summarizes the company’s revenues and cost of revenues on a net revenue basis as required by Generally Accepted Accounting Principles.

Most of our comments today, however, will be based upon gross revenues and various relationships to gross revenues, as management believes such information is one, more informative as to the level of our business activity; two, more useful in managing and analyzing our operations and three, adds more transparency to the trends within our business. Comments related to gross revenues as compared to a net revenue basis of reporting have no effect on gross margin dollars, SG&A expenses or net income.

Turning now to the third quarter results, as reported the company earned $0.36 per diluted share in the 2010 third quarter as compared to a $0.28 loss per share for the third quarter of 2009. Total gross revenues for the 2010 third quarter of $332.9 million increased $59.8 million or 21.9% over the 2009 third quarter.

The $332.9 million represents a new quarterly high for gross revenues. California, which comprised approximately 81% of our overall third quarter gross revenues, increased 27.7% owing to continued growth in PEO revenues.

Staffing revenues for the third quarter of 2010 increased $774,000 or 2.3% over the third quarter of 2009, primarily due to a small increase in demand for our staffing services from existing customers and to a small net new staffing business added during the quarter.

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