I would now like to turn the conference call over to the Chief Financial Officer of BBSI, Mr. Jim Miller. Please go ahead, sir.

James D . Miller

Thank you, Erin, and good morning, everyone. As you saw this morning we issued a press release announcing our agreement to repurchase approximately 3 million common share or roughly 30% of our outstanding common shares for $59.7 million.

As a result of this transaction, we will acquire approximately 2.5 million shares from the Estate of William W. Sherertz, which represents all of the shares held by the Estate, and 500,000 shares from Nancy Sherertz. We intend to purchase these shares due to a combination of $24.9 million of cash and the remainder in nonconvertible, non-voting, redeemable preferred stock for an aggregate purchase price of approximately $59.7 million or $20 per share.

Following the completion of the transactions, we expect to have approximately 7 million common shares outstanding, $56.9 million in cash and investments and 34,800 shares of nonconvertible, non-voting, redeemable preferred stock outstanding with a liquidation value of $34.8 million.

The nonconvertible, non-voting, redeemable preferred stock will not have a trading market. The initial preferred dividend rate of 5% per year and is payable at the company’s option in cash or additional preferred shares. The dividend rate has an escalation cost or by the rate increases by 2% each given in April 1, 2013. So for example in the first year, the dividend is 5%, which escalates to 7% in the second year and 9% in the third year and so forth, and solely preferred stock is redeemed by the company.

During the year one, the dividend equates to approximately 1.7 million annually or 435,000 per quarter through March of 2013. The preferred stock dividend will have similar characteristics of non-tax deductible interest expense. The escalation in the dividend rate encouraged the company to explore other potential sources of financing, which we intend to pursue.

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