Leaders of Vancouver-based Barrett Business Services Inc. gathered Tuesday to discuss the company’s growth and earnings, a welcome topic after its yearly profit nearly doubled to $14.3 million last year.
Off the table was any discussion of the battle over leadership of the company, which provides human resource outsourcing and professional management consulting services.
Both the company’s chief executive officer, Michael Elich, and its chief financial officer, James Miller, punched that point home, with each of them stating they wouldn’t comment on the proxy war.
However, it’s not that the company isn’t talking about the proverbial elephant in the room. It’s just doing its talking by way of filings with the U.S. Securities and Exchange Commission.
So is Kimberly Sherertz, widow of former BBSI CEO William Sherertz, who died last January. She was appointed sole representative of the estate of her late husband. She controls roughly 25 percent of the company’s outstanding shares.
Critical of the company’s executive compensation policies and board leadership, she wants to remove and replace five of the company’s six board members at a special shareholder meeting at 11 a.m. March 13 at the Heathman Lodge in Vancouver.
Sherertz, who has said she doesn’t believe the five directors “collectively possess the backgrounds and experience” to maximize shareholder value, wants to expand BBSI’s six-member board to eight, keeping Elich, the CEO, on the board.
In a Feb. 10 SEC filing, Sherertz said she’s provided the proper documentation proving she owns enough of a stake in the company to have her request for a special shareholder meeting honored.
No, she hasn’t, according to the statement filed by the company with the SEC on Monday. The Sherertz group’s holdings constitute “less than 25 percent of the outstanding shares” required, at a minimum, to convene a special shareholder meeting, the company said. “BBSI further noted apparent miscalculations of percentage of ownership in the group’s public filings.”
When Sherertz and her group “provide evidence of sufficient share ownership and voting entitlement and comply with any other legal requirements, we will move ahead promptly to call a special meeting,” Anthony Meeker, BBSI’s board chairman, said in a statement.
While they kept quiet about the proxy war Tuesday, Elich and Miller presented the company’s fourth-quarter and 2011 financial results.
The company reported a fourth-quarter loss of $93,000, or 1 cent per diluted share. That compares with a profit of $3.1 million, or 31 cents per diluted share, during the fourth quarter of 2010.
The October to December loss stemmed from an $8.5 million increase in the Vancouver company’s workers’ compensation reserve. That apparently was largely connected to the company’s business in California, where it handles employee management services for clients.
Elich said that during the recession years, California’s workers’ compensation program “seized up” and claims weren’t moving. When those claims started to get processed, Elich said, “it created more volatility in those back years,” prompting the company to increase its workers’ compensation reserve to handle those costs.
BBSI is now focused on staying in front of its workers’ compensation expenses, Elich said, “so we don’t have to feed the back years while trying to grow the company in the future.”
Elich said BBSI added a net 82 clients in the fourth quarter of 2011. This year, he said, the company plans to open two new branch offices in California.
“We’ve got branches that are growing,” Elich added, “and it’s a process of building more capacity where we have momentum.”
The company’s fourth-quarter revenue was $84.7 million, up 15 percent year-over-year.
For all of 2011, BBSI reported a profit of $14.3 million, or $1.42 per share. That compares with a profit of $7.4 million, or 72 cents per share, for all of 2010.
Revenue for 2011 was $314.9 million, up 15 percent from $273.1 million in 2010.