Barrett Business Services (Nasdaq: BBSI) managed to keep the company in compliance with Nasdaq’s listing requirements by filing its second quarter 2016 report in a timely fashion. Such an event is news because it’s been so late for so long.
The report shows that BBSI’s net revenues increased 12%, but its net income dropped 4.5% due in large part to $2.6 million in costs for extraordinary legal and accounting services. The charges are related to its earlier delayed financial reports and the ongoing investigations by the Securities and Exchange Commission and the criminal investigation by the United States Department of Justice.
BBSI’s net revenues increased 12%, but its net income dropped 4.5% due in large part to $2.6 million in costs for extraordinary legal and accounting services.
The quarterly report is the first BBSI has filed on time since the second quarter of last year. The company faced the loss of its listing on the Nasdaq exchange due to the oft-delayed financial reports. After a hearing before a Nasdaq panel last month following the delayed filing of its prior quarterly and 2015 annual report, the company was deemed to be back in good standing with the stock exchange’s listing requirements.
Overall, the company says that net revenues for the quarter topped $203 million. Net income amounted to $8.5 million, compared to $8.6 million in the year-ago period. Barrett says that it added 266 net new clients in the quarter. Seventy-eight percent of Barrett’s business, both PEO and staffing, is linked to California.
Barrett reports that its workers’ comp expenses increased as a percentage of revenues from 22.8% last year to 24.6% in the latest period. In straight dollars, the difference amounts to an $8.6 million increase to $50.1 million in the second quarter 2016. The six-month total for workers’ comp is $99.5 million this year compared to $81.1 million in the first half of last year.
Barrett reports that it has $158.2 million tied up in workers’ comp security deposits nationwide with $147.2 million of that in California to cover its self-insured workers’ comp liabilities. It has another $232.9 million in a trust account handled by ACE to fund its fronted workers’ comp program.
Barrett is responsible for the first $5 million in workers’ comp costs per claim under the policy that replaced its self-insured operations in California. The balance in the ACE trust is up $66.3 million during the first half of 2016.