Barrett Business Services reports strong financial results
Vancouver-based firm outsources human resources services
Originally published February 13, 2013 at 12:39 p.m., updated February 13, 2013 at 4:32 p.m.
Barrett Business Services Inc., the Vancouver-based supplier of staffing and outsourced human resources services, reported solid financial results Wednesday, raking in fourth-quarter net revenues of $113.7 million — a 34 percent increase year over year.
The company’s growth included a profit of $5.8 million in the October-to-December period, which compares to a net loss of $93,000 in the fourth quarter of 2011.
The numbers suggested few immediate challenges — and plenty of opportunities — for the company as it seeks to grow and build out its services. Barrett is a pioneer of “professional employer organization” services. Under that system, Barrett becomes a co-employer of a client’s work force, handling human resources responsibilities, including workers’ compensation claims.
Yet, Michael Elich, president and CEO of Barrett, acknowledged the company will have to manage some looming regulatory changes. One of them is federal health care reform, the major components of which take effect in 2014. They will include measures prodding individuals to purchase health insurance and employers to provide it.
“We are having conversations with different companies to help them understand or build a plan on how they’ll implement (reform) requirements starting in 2014,” Elich said.
For all of 2012, Barrett posted net revenues of $402.7 million, an increase of 28 percent from 2011. And it showed a profit of $13.1 million, or $1.67 per share, for the year. That compared with a profit of $14.3 million, or $1.41 per share, for all of 2011.
Included in the company’s overall growth in 2012 was a fourth-quarter net gain of 143 clients — a year-over-year increase of 74 percent.
The company’s chief financial officer, Jim Miller, said Barrett maintains a client retention rate of more than 90 percent. Elich said that “without slippage” in the company’s client base, it makes it easier to build on the company’s momentum.
Both Elich and Miller emphasized Barrett is positioned to grow its client base and its revenues in the months ahead. “We have many emerging … markets that haven’t even come close to reaching maturity,” Elich said.
Miller said the company expects to “continue to invest” in itself to “support a much larger and more mature company.” According to the company’s 2011 annual financial report, it believes the human resource outsourcing industry in the U.S. will continue to expand as businesses seek to “outsource non-core business functions” and to decrease costs.
In that same 2011 report, the company listed several risk factors it faces.
Those risks included negative publicity surrounding outsourcing issues; potential increases in workers’ compensation and unemployment insurance costs; unforeseen liabilities taken on in the acquisition of companies; and competition from other companies that provide similar services, including Kelly Services, Inc. and Manpower Inc.
Barrett has 57 offices in 10 states and conducts business in 23 states, according to a corporate presentation it gave in November 2012.
The company’s stock, which trades as BBSI, closed up $1.23 Wednesday, at $42.13 per share. The company’s shares have traded between $15.68 and $42.02 in the past 52 weeks.
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