Vancouver’s Barrett Business Services Inc. appears to be getting out of the weeds of recent legal and financial troubles.
The human resources company offered a one-two punch of good news Thursday — strong preliminary fourth-quarter revenues and an independent investigation’s conclusion that the company committed “no illegal act” in earlier financial disclosures.
Barrett’s troubles stem from its disclosure in 2014 that it would establish an $80 million reserve fund to cover payments on a large volume of pending workers’ compensation claims. Its disclosure of that financial liability sent the company’s stock plummeting by nearly 60 percent and triggered a class-action lawsuit against the company.
In a filing with the Securities and Exchange Commission on Thursday, Barrett wrote the independent investigation by Portland law firm Stoll Stoll Berne Lokting & Shlachter “was conducted to determine whether an illegal act had occurred with respect to the Company’s workers’ compensation expense reserve.”
During a meeting of the audit committee a few weeks ago, the law firm gave its findings and conclusions.
“Importantly, Stoll Berne did not find that an illegal act had occurred within the scope of its investigation,” Barrett Vice President James D. Miller wrote in the company’s SEC filing.
As far as fourth-quarter revenues, Barrett said in a press release net revenues reached $194 million, an 11 percent increase from the same period in 2014.
For all of 2015, the company said it expects net revenues to reach $743 million, compared to $636 million in 2014.
Barrett said it is looking to improve the “predictability of our workers’ compensation cost structure.”
“Our organization has made great progress in this regard over the past two years, and we believe we are entering 2016 on a solid foundation,” Barrett CEO Michael Elich said in the release.
The company also is looking at reissuing financial statements for 2011 through 2015, it said in the release. A decision on that is expected before fourth-quarter and year-end earnings are announced.
Regardless, investors appeared pleased with Barrett’s news, as they pushed the company’s stock price up 13 percent to $36.43 to end the week. The company, traded as BBSI, has seen some sharp peaks and deep valleys as its stock has ranged from $31.47 to $52.75 in the past 52 weeks.