Barrett Business Services, Inc. (NASDAQ:BBSI) Q4 2024 Earnings Conference Call February 26, 2024 5:00 PM ET Company Participants Gary Kramer - President and CEO Anthony Harris - CFO Conference Call Participants Chris Moore - CJS Securities Jeff Martin - ROTH Capital Partners LLC Marc Riddick - Sidoti & Company LLC Operator Good afternoon everyone and thank you for participating today's conference call to discuss BBSI's Financial Results for the Fourth Quarter and Full Year Ended December 31st, 2024. Joining ...

Core Insights - Barrett Business Services (BBSI) reported $2.25 billion in revenue for Q4 2024, marking a year-over-year increase of 9.8% [1] - The company's EPS for the same period was $0.63, up from $0.54 a year ago, aligning with the consensus estimate [1] - The reported revenue exceeded the Zacks Consensus Estimate of $2.22 billion by 1.40% [1] Financial Performance Metrics - Gross billings reached $2.25 billion, slightly above the average estimate of $2.22 billion from two analysts [4] - Revenue from professional employer services was $284.52 million, surpassing the average estimate of $274.35 million, reflecting an 11.9% year-over-year increase [4] - Revenue from staffing services was $20.30 million, below the average estimate of $22.10 million, indicating a year-over-year decline of 9.4% [4] Stock Performance - Barrett's shares have returned -7.2% over the past month, compared to a -2.3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Barrett Business Services (BBSI) came out with quarterly earnings of $0.63 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.54 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this human resources management company would post earnings of $0.69 per share when it actually produced earnings of $0.74, delivering a surprise of 7.25%.Over the last four quarters, the company has surpassed consensus EPS estimates three ...

Revenue Growth - Fourth quarter revenues increased by 10% to $304.8 million compared to $276.7 million in the same quarter of 2023[4] - For the full year 2024, revenues increased by 7% to $1.14 billion, up from $1.07 billion in 2023[8] - Total revenues for Q4 2024 reached $304,820,000, a 10.1% increase from $276,682,000 in Q4 2023[27] - Professional employer services revenue increased to $284,517,000, up 11.9% from $254,282,000 year-over-year[27] Gross Billings - Total gross billings for the fourth quarter rose by 10% to $2.25 billion, up from $2.05 billion year-over-year[4] - Full year gross billings rose by 8% to $8.33 billion compared to $7.72 billion in 2023[8] - BBSI expects gross billings growth of 7% to 9% and average WSE growth of 4% to 6% in 2025[13] Net Income - Net income for the fourth quarter increased by 15% to $16.8 million, or $0.63 per diluted share, compared to $14.6 million, or $0.54 per diluted share in the prior year[7] - Net income for the year ended December 31, 2024, was $52,993,000, compared to $50,612,000 in 2023, reflecting a 4.5% growth[27] Earnings Per Share - Basic income per share rose to $2.03 in 2024, up from $1.88 in 2023, representing an increase of 8.0%[27] Employee Growth - Average worksite employees (WSEs) grew by 5% in the fourth quarter, reaching 133,124 compared to 126,492 in the previous year[20] Financial Position - The company maintained a debt-free status with unrestricted cash and investments of $121.9 million as of December 31, 2024[10] - Total current assets increased to $475,442,000 in 2024, compared to $447,502,000 in 2023, marking a growth of 6.2%[25] - Total assets grew to $745,508,000 in 2024, up from $721,538,000 in 2023, indicating a 3.3% increase[25] - Total current liabilities increased to $358,896,000 in 2024, compared to $343,252,000 in 2023, reflecting a rise of 4.6%[25] Gross Margin - Gross margin for the year was $253,251,000, compared to $242,532,000 in 2023, showing an increase of 4.4%[27] Investment Income - Investment income increased to $11,130,000 in 2024, up from $8,643,000 in 2023, a growth of 28.8%[27] Workers' Compensation - Workers' compensation expense as a percentage of gross billings was 2.3% in Q4 2024, down from 2.6% in Q4 2023[6] - Long-term workers' compensation claims liabilities decreased to $89,365,000 in 2024 from $117,757,000 in 2023, a reduction of 24.0%[25] Stock Repurchase - The company repurchased $7 million of stock in the fourth quarter, with approximately $29.8 million remaining under the stock repurchase program[11]

Core Viewpoint - Barrett Business Services, Inc. (BBSI) reported strong financial results for the fourth quarter and full year ended December 31, 2024, with significant growth in revenues, net income, and gross billings, indicating a positive outlook for continued growth in 2025 [3][4][8]. Financial Performance Summary - Fourth quarter revenues increased by 10% to $304.8 million compared to $276.7 million in the same quarter of 2023 [4][9]. - Total gross billings for the fourth quarter rose by 10% to $2.25 billion, up from $2.05 billion year-over-year, driven by growth in professional employer services [5][9]. - Net income for the fourth quarter increased by 15% to $16.8 million, or $0.63 per diluted share, compared to $14.6 million, or $0.54 per diluted share, in the prior year [7][9]. - For the full year 2024, revenues grew by 7% to $1.14 billion from $1.07 billion in 2023, while total gross billings increased by 8% to $8.33 billion from $7.72 billion [8][9]. Operational Metrics - Average worksite employees (WSEs) increased by 5% in the fourth quarter, contributing to the overall growth in gross billings [9]. - Workers' compensation expense as a percentage of gross billings was 2.3% in Q4 2024, down from 2.6% in Q4 2023, benefiting from lower costs and favorable prior year adjustments [6][10]. Capital Allocation and Shareholder Returns - The company repurchased $7 million of stock in the fourth quarter, with approximately $29.8 million remaining under the $75 million repurchase program [12][13]. - BBSI paid $2.1 million in dividends during the quarter, with a confirmed quarterly cash dividend of $0.08 per share to be paid on March 28, 2025 [13]. Liquidity Position - As of December 31, 2024, BBSI had unrestricted cash and investments totaling $121.9 million, an increase from $94.4 million at the end of the previous quarter, and remained debt-free [11].

Core Insights - Barrett Business Services, Inc. (BBSI) has launched a new Applicant Tracking System (ATS) aimed at enhancing the hiring process for businesses of all sizes [1][2][3] Company Overview - BBSI is a leading provider of business management solutions, integrating human resource outsourcing and professional management consulting [4] - The company serves over 8,000 clients across various industries in all 50 states [4] Product Features - The ATS offers an intuitive, end-to-end solution for attracting, managing, and onboarding new employees [2] - Key features include: - Easy job posting creation on popular job boards [5] - Centralized dashboard for tracking applicants throughout the interview process [5] - Streamlined electronic onboarding experience for new hires [5] - The ATS is fully integrated with BBSI's existing suite of products, allowing seamless data flow into the payroll system, which reduces manual entry and errors [2][3] Leadership Perspective - Gary Kramer, President and CEO of BBSI, emphasized the importance of hiring the right talent for client success and highlighted how the ATS simplifies the hiring process [3]

Core Viewpoint - Barrett Business Services, Inc. (BBSI) will hold a conference call on February 26, 2025, to discuss its financial results for Q4 and the full year ended December 31, 2024 [1][2]. Group 1: Conference Call Details - The conference call will be hosted by CEO Gary Kramer and CFO Anthony Harris, followed by a Q&A session [2]. - The call is scheduled for 5:00 p.m. Eastern time (2:00 p.m. Pacific time) [2]. - Participants can join via a toll-free dial-in number or an international dial-in number, with a conference ID provided for registration [2]. Group 2: Replay Information - The conference call will be broadcast live and available for replay on the BBSI website [3]. - A replay will be accessible after 8:00 p.m. Eastern time on the same day through March 26, 2025 [3]. - Specific toll-free and international replay numbers are provided for participants [3]. Group 3: Company Overview - BBSI is a leading provider of business management solutions, specializing in human resource outsourcing and professional management consulting [3]. - The company operates an integrated platform that includes payroll processing, employee benefits, workers' compensation coverage, risk management, and human resource administration [3]. - BBSI serves over 8,000 clients across various industries and is licensed to operate in all 50 states [3].

Industry Overview - The Zacks Outsourcing industry has experienced significant growth due to economic, technological, and business factors, including cost reduction, remote work, increased cybersecurity awareness, and trends like AI and ML [1][3] - Outsourcing involves delegating internal operations to external resources to enhance operational efficiency, primarily serving small and medium-sized enterprises with services like HR support, payroll management, and IT solutions [2] Market Demand and Trends - The industry has seen strong market demand, with revenues, income, and cash flows rising over the past year, allowing many players to increase dividends [3] - Business process outsourcing is in high demand due to flexibility, lower costs, and improved service quality, while IT outsourcing is also robust, with companies outsourcing entire IT departments to focus on core tasks [4] - The urgency for cybersecurity measures has increased due to evolving threats, leading businesses to seek outsourced cybersecurity services for risk reduction and compliance [5] - Innovations such as IoT, cloud computing, AI, and ML are reshaping the outsourcing sector, enhancing efficiency and competitiveness [6] Performance Metrics - The Zacks Outsourcing industry currently holds a Zacks Industry Rank of 151, placing it in the bottom 40% of 250 Zacks industries, indicating underperformance in the near term [7][8] - Over the past year, the industry has outperformed the broader Zacks Business Services sector with a growth of 25.7%, while lagging behind the Zacks S&P 500 composite, which rose by 26.4% [9] Valuation - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 25.75X, compared to the S&P 500's 22.34X and the sector's 24.59X, with historical trading ranges between 18.27X and 30.82X over the past five years [11] Company Highlights - **Paychex, Inc. (PAYX)**: This company is experiencing robust sales growth and rising client retention, with a projected EPS increase of 5.7% year over year in fiscal 2025. Shares have gained 22.7% over the past year [13][15] - **Genpact (G)**: The company is benefiting from new deal ramps and advanced tech services, with an expected EPS increase of 8.4% year over year in 2024. Shares have risen by 26.7% over the past year [16][19] - **Barrett Business Services, Inc. (BBSI)**: This company is seeing growth from increased client additions and a strategic partnership with Kaiser Permanente, with an anticipated EPS increase of 8.1% year over year in 2024. Shares have surged by 53% over the past year [20][21]

Core Insights - Barrett Business Services, Inc. (BBSI) has been recognized as a Great Place To Work® for the fourth consecutive year, highlighting its commitment to employee satisfaction and workplace culture [1][2]. Company Overview - BBSI is a leading provider of business management solutions and one of the largest professional employer organizations (PEO) in the U.S., serving over 8,000 clients across all business sectors and licensed to operate in all 50 states [4]. Employee Experience - The Great Place To Work® certification is based on employee feedback, indicating that BBSI prioritizes creating a supportive and empowering work environment [2]. - Research shows that job seekers are 15 times more likely to apply to certified workplaces, and employees at these companies are 93% more likely to look forward to coming to work [3]. Business Model - BBSI combines human resource outsourcing with professional management consulting, offering services such as payroll processing, employee benefits, workers' compensation coverage, risk management, and workplace safety programs [4].

VANCOUVER, Wash., Dec. 17, 2024 (GLOBE NEWSWIRE) -- Barrett Business Services, Inc. (BBSI) (NASDAQ: BBSI), a leading provider of business management solutions and one of the largest professional employer organizations (PEO) in the U.S., is announcing the establishment of a vice chairman role on its board of directors and appointing current board member Joseph S. Clabby to the new role. "On behalf of the board, we congratulate Joe Clabby on his appointment," said Tony Meeker, BBSI’s chairman of the board. "C ...