Barrett Business Services Inc., the Vancouver-based supplier of staffing and outsourced human resources services, said Wednesday it recorded a third-quarter profit of $11.57 million. That compares with a loss of $37.81 million in the July-to-September period of 2014. Meanwhile, the company posted third-quarter net revenues of $199.25 million, up roughly 14 percent from the year-ago period.
During an earnings conference call, company leaders said the positive results were the result of several factors, including the company’s strong sales growth and the addition of 160 clients in the third quarter.
That’s not to say the company didn’t experience headwinds.
In a news release, the company’s CEO, Michael Elich, said the company’s growth was “tempered by a slight year-over-year decline in our staffing business due to a decrease in seasonal employee hiring related to the West Coast drought, as well as a shortage in labor to meet the staffing demand in some of our markets.”
Meanwhile, the company reported Wednesday that its accounting practices remain under investigation by the U.S. Securities and Exchange Commission in a case concerning Barrett’s workers’ compensation reserves. The company said it believes its financial statements and accounting standards are in compliance with generally accepted principles.
The company also said it remains embroiled in litigation stemming from its announcement in the third quarter of last year of an $80 million increase in reserves for payments of drawn-out workers’ compensation claims. The company’s stock price plummeted after the announcement. A class-action shareholder lawsuit and shareholder derivative suit followed.
James Miller, the company’s chief financial officer, said Wednesday the company believes both suits “are without merit.” The company’s lawyers, Miller added, have instructed Barrett to not comment further on the legal matters.
The company’s net loss of $37.81 million in the third-quarter of 2014 was because of its need to increase its workers’ compensation reserves.
Barrett 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 stock, which trades as BBSI on the Nasdaq exchange, closed up $3.16 Wednesday, at $47.86 per share. The company’s shares have traded between $18.25 and $49.79 in the past 52 weeks.