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BBSI Reports Strong Third Quarter 2023 Financial Results

- Q3 2023 Net Income of $18.2 Million, or $2.68 per Diluted Share -

VANCOUVER, Wash., Nov. 01, 2023 (GLOBE NEWSWIRE) -- Barrett Business Services, Inc. (“BBSI” or the “Company”) (NASDAQ: BBSI), a leading provider of business management solutions, reported financial results for the third quarter ended September 30, 2023.

Third Quarter 2023 Financial Summary vs. Year-Ago Quarter

  • Revenues down 0.2% to $273.3 million.
  • Gross billings up 3% to $1.96 billion.
  • Average worksite employees (“WSEs”) up 1%.
  • Net income up to $18.2 million, or $2.68 per diluted share, compared to $17.4 million, or $2.45 per diluted share.

“We continued to generate strong results from our expanding client base and on-going roll-out of BBSI Benefits,” said BBSI President and CEO, Gary Kramer. “I’m proud of the success we’ve had adding net new clients as we've continued to experience results from our investments in marketing and new product offerings. We also continued to see positive results in our pricing and cost management strategies, resulting in strong, sustainable earnings growth.”

Third Quarter 2023 Financial Results

Revenues in the third quarter of 2023 decreased 0.2% to $273.3 million compared to $273.8 million in the third quarter of 2022. The slight decrease was driven by a decrease in staffing services revenue, which was primarily due to lower demand for staffing services and continued tight labor market conditions in the third quarter of 2023.

Total gross billings in the third quarter of 2023 increased 3% to $1.96 billion compared to $1.91 billion in the same year-ago quarter (see “Key Performance Metrics” below). The increase was driven by growth in PEO services resulting from increased WSEs from net new clients and higher average billings per WSE, offset in part by reductions in WSEs at existing clients.

Workers’ compensation expense as a percent of gross billings was 2.7% in the third quarter of 2023 and benefited from favorable prior year liability and premium adjustments of $2.2 million. This compares to 3.0% in the third quarter of 2022, which included favorable prior year liability and premium adjustments of $1.4 million.

Net income for the third quarter of 2023 was $18.2 million, or $2.68 per diluted share, compared to $17.4 million, or $2.45 per diluted share, in the year-ago quarter. The increase is primarily attributable to higher gross margin in the third quarter of 2023.


As of September 30, 2023, unrestricted cash and investments were $129.2 million compared to $159.7 million at the end of 2022. BBSI was debt free at quarter end.

Capital Allocation

BBSI’s board of directors has confirmed its regular quarterly cash dividend of $0.30 per share. The cash dividend will be paid on December 1, 2023, to all stockholders of record as of November 17, 2023.

Continuing under the Company’s stock repurchase program established in July 2023, BBSI repurchased 115,400 shares in the third quarter at an average price of $94.60. At September 30, 2023, approximately $64.1 million remained available under the repurchase program.


BBSI now expects the following for 2023:

  • Gross billings growth of 4% to 5%
  • Growth in the average number of WSEs of 2% to 3%
  • Gross margin as a percent of gross billings of 3.1% to 3.15%
  • Effective annual tax rate of 27% to 28%

Conference Call

BBSI will conduct a conference call on Wednesday, November 1, 2023, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss its financial results for the quarter ended September 30, 2023.

BBSI’s CEO Gary Kramer and CFO Anthony Harris will host the conference call, followed by a question and answer period.

Date: Wednesday, November 1, 2023
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in number: 1-877-407-4018
International dial-in number: 1-201-689-8471
Conference ID: 13741346

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 1-949-574-3860.

The conference call will be broadcast live and available for replay here and via the Investors section of the BBSI website at

A replay of the conference call will be available after 8:00 p.m. Eastern time on the same day through December 1, 2023.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13741346

Key Performance Metrics

We report PEO revenues net of direct payroll costs because we are not the primary obligor for wage payments to our clients’ employees. However, management believes that gross billings and wages are useful in understanding the volume of our business activity and serve as an important performance metric in managing our operations, including the preparation of internal operating forecasts and establishing executive compensation performance goals. We therefore present for purposes of analysis gross billings and wage information for the three and nine months ended September 30, 2023 and 2022.

  (Unaudited)  (Unaudited) 
  Three Months Ended September 30,  Nine Months Ended September 30, 
(in thousands) 2023  2022  2023  2022 
Gross billings $1,963,462  $1,908,818  $5,664,230  $5,445,217 
PEO and staffing wages $1,706,302  $1,656,580  $4,919,323  $4,727,772 

In monitoring and evaluating the performance of our operations, management also reviews the following ratios, which represent selected amounts as a percentage of gross billings. Management believes these ratios are useful in understanding the efficiency and profitability of our service offerings.

  (Unaudited) (Unaudited)
  Percentage of Gross Billings Percentage of Gross Billings
  Three Months Ended September 30, Nine Months Ended September 30,
  2023 2022 2023 2022
PEO and staffing wages 86.9% 86.8% 86.9% 86.8%
Payroll taxes and benefits 6.9% 6.7% 7.3% 7.2%
Workers' compensation 2.7% 3.0% 2.7% 2.8%
Gross margin 3.5% 3.5% 3.1% 3.2%

We refer to employees of our PEO clients as WSEs. Management reviews average and ending WSE growth to monitor and evaluate the performance of our operations. Average WSEs are calculated by dividing the number of unique individuals paid in each month by the number of months in the period. Ending WSEs represents the number of unique individuals paid in the last month of the period.

  Three Months Ended September 30,
  2023  % Change 2022  % Change
Average WSEs  127,232  1.1%  125,813  8.2%
Ending WSEs  128,448  0.9%  127,297  9.8%

  Nine Months Ended September 30,
  2023  % Change 2022  % Change
Average WSEs  123,577  1.8%  121,415  8.8%
Ending WSEs  128,448  0.9%  127,297  9.8%

About BBSI

BBSI (NASDAQ: BBSI) is a leading provider of business management solutions, combining human resource outsourcing and professional management consulting to create a unique operational platform that differentiates it from competitors. The Company’s integrated platform is built upon expertise in payroll processing, employee benefits, workers’ compensation coverage, risk management and workplace safety programs, and human resource administration. BBSI’s partnerships help businesses of all sizes improve the efficiency of their operations. For more information, please visit

Forward-Looking Statements

Statements in this release about future events and financial outlook are forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results of the Company to be materially different from any future results expressed or implied by such forward-looking statements. Factors that could affect future results include: economic conditions in the Company’s service areas; the lingering effects of the COVID-19 pandemic; the effects of inflation on operating expenses; the availability of certain fully insured medical and other health and welfare benefits to qualifying worksite employees; the effect of changes in the Company’s mix of services on gross margin; the Company’s ability to attract and retain clients and to achieve revenue growth; the availability of financing or other sources of capital; the Company’s relationship with its primary bank lender; the potential for material deviations from expected future workers’ compensation claims experience; changes in the workers’ compensation regulatory environment in the Company’s primary markets; litigation costs; security breaches or failures in the Company’s information technology systems; the collectability of accounts receivable; changes in executive management; changes in effective payroll tax rates and federal and state income tax rates; the carrying value of deferred income tax assets and goodwill; the effects of conditions in the global capital markets on the Company’s investment portfolio; and the potential for and effect of acquisitions, among others. Other important factors that may affect the Company’s prospects are described in the Company’s 2022 Annual Report on Form 10-K and in subsequent reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934. Although forward-looking statements help to provide complete information about the Company, readers should keep in mind that forward-looking statements are less reliable than historical information. The Company undertakes no obligation to update or revise forward-looking statements in this release to reflect events or changes in circumstances that occur after the date of this release.

Barrett Business Services, Inc.
Condensed Consolidated Balance Sheets
(In Thousands)
 September 30,  December 31, 
 2023  2022 
Current assets:     
Cash and cash equivalents$41,579  $91,423 
Investments 87,653   68,325 
Trade accounts receivable, net 205,217   163,838 
Prepaid expenses and other 17,136   19,787 
Restricted cash and investments 75,876   110,989 
Total current assets 427,461   454,362 
Property, equipment and software, net 48,679   45,954 
Operating lease right-of-use assets 18,428   19,804 
Restricted cash and investments 131,619   104,277 
Goodwill 47,820   47,820 
Other assets 3,765   3,281 
Deferred income taxes 12,236   11,440 
Total assets$690,008  $686,938 
Current liabilities:     
Accounts payable$5,268  $8,264 
Accrued payroll, payroll taxes and related benefits 247,454   222,331 
Income taxes payable 786   610 
Current operating lease liabilities 6,753   6,957 
Current premium payable 18,853   18,920 
Other accrued liabilities 6,904   12,683 
Workers' compensation claims liabilities 53,622   62,917 
Safety incentives liability 1,469   2,049 
Total current liabilities 341,109   334,731 
Long-term workers' compensation claims liabilities 124,180   153,070 
Long-term premium payable 23,301   - 
Long-term operating lease liabilities 13,049   14,225 
Customer deposits and other long-term liabilities 7,923   7,070 
Stockholders' equity 180,446   177,842 
Total liabilities and stockholders' equity$690,008  $686,938 

Barrett Business Services, Inc.
Condensed Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2023  2022  2023  2022 
Professional employer services $251,423  $244,567  $727,986  $694,174 
Staffing services  21,905   29,255   64,639   88,202 
Total revenues  273,328   273,822   792,625   782,376 
Cost of revenues:            
Direct payroll costs  16,318   22,112   48,299   66,491 
Payroll taxes and benefits  135,704   128,459   414,395   390,677 
Workers' compensation  52,977   56,350   153,012   151,069 
Total cost of revenues  204,999   206,921   615,706   608,237 
Gross margin  68,329   66,901   176,919   174,139 
Selling, general and administrative expenses  44,160   43,001   129,194   125,438 
Depreciation and amortization  1,867   1,554   5,273   4,585 
Income from operations  22,302   22,346   42,452   44,116 
Other income (expense):            
Investment income, net  2,412   1,584   6,856   4,790 
Interest expense  (80)  (35)  (118)  (102)
Other, net  38   19   93   70 
Other income, net  2,370   1,568   6,831   4,758 
Income before income taxes  24,672   23,914   49,283   48,874 
Provision for income taxes  6,453   6,476   13,229   13,134 
Net income $18,219  $17,438  $36,054  $35,740 
Basic income per common share $2.72  $2.48  $5.32  $4.96 
Weighted average basic common shares outstanding  6,699   7,036   6,772   7,201 
Diluted income per common share $2.68  $2.45  $5.24  $4.91 
Weighted average diluted common shares outstanding  6,795   7,127   6,885   7,286 

Investor Relations:
Gateway Group, Inc.
Cody Slach
Tel 1-949-574-3860

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