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News / Business

Barrett Business Services adds 229 clients

Vancouver supplier of business services posts net loss in 1Q

By Aaron Corvin, Columbian Port & Economy Reporter
Published: April 28, 2015, 5:00pm

Barrett Business Services Inc., the Vancouver-based supplier of staffing and outsourced human resources services, said Wednesday it added 229 new clients in the first quarter and that it will continue to monitor its workers’ compensation costs.

The company reported a first-quarter net loss of $5.8 million, according to executives who spoke during Barrett’s earnings conference call Wednesday. That compares with a net loss of $3.6 million during the same three-month period of 2014.

Jim Miller, the company’s chief financial officer, said the net loss is “consistent with our historical experience,” which typically sees the company record first-quarter losses largely because of higher payroll taxes at the beginning of each year.

The company posted net revenue of $166.91 million in the three-month period that ended March 31, up 23.5 percent from net revenue of $135.14 million in the January-to-March period last year.

Michael Elich, the company’s president and CEO, said he believes the 229 net new clients in the first quarter is “a new record for us.” Elich said the company is making “significant progress in all areas” and that it will continue to maintain a “proactive, positive position” related to workers’ compensation expenses.

The context of the company’s discussion of workers’ compensation costs is its announcement in the third quarter of last year of an $80 million increase in reserves for payments of drawn-out workers’ compensation claims.

In the aftermath of that increased cost, the company faces a shareholder class-action lawsuit alleging Barrett, Elich and Miller violated federal securities laws. The suit arose after the company’s stock price plummeted on the heels of its announcement of increased workers’ compensation reserves.

In a filing with the U.S. Securities and Exchange Commission, the company said it will defend itself against the litigation and that it believes “the claims are covered under our directors’ and officers’ liability insurance, and we have notified our insurance carriers of the claims.”

In the SEC filing, Barrett said it maintains reserves to cover its estimated liabilities for workers’ compensation claims under an arrangement with ACE in California, “our self-insured status in Oregon, Delaware, Maryland and Colorado” and insurance subsidiary Ecole in Arizona.

Barrett has clients with employees in 22 states and the District of Columbia through a network of 54 branch locations in California, Oregon, Washington, Idaho, Arizona, Nevada, Utah, Colorado, Maryland, Delaware and North Carolina. The company offers “professional employer organization” services. Under that system, Barrett becomes a co-employer of a client’s workforce, handling payroll, payroll taxes, workers’ compensation coverage and other administrative functions. Its staffing services include on-demand or short-term staffing assignments, contract staffing, long-term on-site management, and direct placement.

The company’s clients include electronics manufacturers, light-manufacturing industries, transportation enterprises, food processors and telecommunications firms.

The company’s stock, which trades on the Nasdaq exchange as BBSI, closed up $4.36 Wednesday, at $45.12 per share. The company’s shares have traded between $18.25 and $63.45 in the past 52 weeks.

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Columbian Port & Economy Reporter