Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Barrett Business Services, Inc. (NASDAQ:BBSI)

Q3 2011 Earnings Conference Call

October 26, 2011 12:00 PM ET

Executives

Michael Elich – CEO

Jim Miller – CFO

Analysts

Josh Vogel – Sidoti & Company

Jeff Martin – Roth Capital Partners

Michael Prouting – 10K Capital

Nancy Sherertz – BBSI

Operator

Good afternoon, everyone, and thank you for participating in today’s conference call to discuss BBSI Financial Results for the Third Quarter ending September 30, 2011.

Joining us today are BBSI’s President and CEO, Michael Elich and the company’s CFO, Mr. Jim Miller. Following their remarks, we’ll open the call for your questions. Before we go further, I would like to take a moment to read the company’s Safe Harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements.

The company remarks during today’s conference call may include forward-looking statements. These statements along with other information presented that are not historical facts are subject to a number of risks and uncertainties. Actual results may differ materially from those implied by these forward-looking statements.

Please refer to the company’s recent earnings release and to the company’s quarterly and annual reports filed with the Securities and Exchange Commission for more information about the risks and uncertainties that could cause actual results to differ.

I would now like to remind everyone that this call will be available for replay through November 2, 2011 starting at 3 P.M. Eastern till night. A webcast replay will also be available via the link provided in today’s press release, as well as available on the company’s website at www.barrettbusiness.com.

Now, I would like to turn the call over to the Chief Financial Officer of BBSI, Mr. Jim Miller. Sir, please go ahead.

James Miller

Thank you and good afternoon, everyone. As you saw the close of market yesterday, we issued a press release announcing our financial results for the third quarter ended September 30, 2011. Before I get into the financial results for the quarter, I would like to mention that yesterday’s earnings release summarizes our revenues and cost to revenues on a net revenue as required by Generally Accepted Accounting Principles.

Most of our comments today however will be based upon gross revenues and various relationships to gross revenues as management believes such information is one, more informative as to the level of our business activity, two, more useful in managing and analyzing our operations and three, adds more transparency to the trends within our business. Comments related to gross revenues that’s compared with net revenue basis of reporting have no effect on gross margin dollars, SG&A expenses or net income.

Turning now to the third quarter results, total gross revenues increased 22% to $406 million compared to the third quarter of 2010. California which comprised approximately 83% of our overall third quarter gross revenues increased 25% primarily due to continued growth in new PEO business.

PEO gross revenues increased 24% to $371 million compared to the third quarter of last year principally due to the addition of new customers. Our PEO revenues from existing customers experienced a 5.1% or $13.6 million increase compared to the year ago quarter. The increase in PEO revenues from existing customers represents the sixth consecutive quarter of existing customer growth. This increase is primarily driven by an increase in hours worked versus increases in headcount.

Staffing revenues for the third quarter of 2011 increased 2% to $34.6 million compared to the third quarter of 2010 primarily due to a small net gain in new business as revenues from existing customers remain nearly flat. Gross margin dollars for the third quarter increased 15% to $16.2 million compared to the same quarter a year ago primarily due to the increase in revenues.

On a percentage basis, gross margin declined to 4% for the third quarter of 2011 compared to 4.2% in the same quarter a year ago principally due to higher workers compensation expenses and higher payroll taxes and benefits, offset in part by lower direct payroll cost as a percentage of revenues.

Direct payroll costs as a percentage of gross revenues declined to 84.9% compared to 85.1% in the same quarter year ago due to an increase in the PEO mark-up rates resulting from our ability to pass on price increases to customers following a period where markups remain relatively flat through the recession despite cost increases absorbed by the company. Payroll taxes and benefits for the third quarter as a percentage of gross revenues was 7.5% versus 7.4% for the same quarter a year ago.

The slight increase is due to higher state of unemployment taxes in the majority of states the company operates in. This trend is similar to the increases experienced in the first and second quarters of 2011. Workers’ compensation expense as a percentage of gross revenues was 3.6% which is up from 3.3% for the same quarter a year ago primarily due to an increase in the provision for prior year claim costs, higher safety incentive expenses which provide a hedge against the current year claim costs and higher insurance broker commissions.

Selling, general and administrative expenses increased 7.9% over the 2010 third quarter. This increase is primarily due to increases in profit sharing, management payroll and stock options compensation expenses. The income tax rate for the third quarter of 2011 was 13.7%, which included a favorable benefit from the effect of the $10 million life insurance proceeds on the annual effective tax rate for the company and also to a California State income tax refund related to tax years 2003 through 2006.

BBSI may realize additional benefit in the future from the 2007 through 2009 tax years for California which are currently under review by the state. As most of you are aware of the life insurance proceeds we realized during the first quarter of 2011 from the passing of Bill Sherertz the company’s former President and CEO, we expect effective tax rate of approximately 20% to continue through the fourth quarter of 2011 and we anticipate our overall tax rate to return to the low to mid-30ish percent range for the first quarter of 2012.

As reported, the company earned $0.54 per diluted share in the 2011 third quarter compared to $0.36 per diluted share in the same quarter last year. Without the favorable benefit to the income tax rate and the California State income tax refund, the company earned $0.42 per diluted share for the third quarter of 2011.

Turning now to the balance sheet at September 30th, cash and current marketable securities totaled $68.2 million compared to $55.4 million at December 31st, 2010. This increase is primarily due to operating income for the first nine months of 2011, partially offset by the payment of quarterly cash dividends and share repurchases during the first nine months of 2011.

We generated $23.9 million in free cash flow during the first nine months and continue to carry no bank debt. Trade accounts receivable at September 30th were $50.9 million, an increase of $13.3 million over December 31st 2010 primarily due to increases in revenues and accrued revenue at September 30th 2011.

Accrued payroll taxes and related benefits increased $15.2 million over December 31, 2010 to $52.7 million due to increases in accrued payroll and third quarter payroll taxes which are generally higher during the third quarter of the year as compared to the fourth quarter as taxable unemployment wage ceilings are reset each January 1st.

Stockholders' equity increased approximately $8.1 million over December 31, 2010 to $103.5 million primarily due to net income of $14.4 million for 2011 partially offset by share repurchases of $3.8 million and cash dividends paid of $2.7 million. Now turning to our outlook for the fourth quarter of 2011, we are expecting gross revenues to range from $405 million to $410 million. This projection represents likely mid-point increase of 18.4% over the $344.2 million in gross revenues for the fourth quarter of 2010.

The projected increase of 2011 fourth quarter gross revenues is based upon recent revenue trends. Based upon the foregoing estimates for gross revenues, we anticipate diluted earnings per share for the 2011 fourth quarter on a GAAP basis to range from $0.45 to $0.49 per share as compared to diluted earnings per share of $0.30 for the fourth quarter of 2010.

The $0.45, $0.49 range includes favorable benefit from the effective life insurance proceeds resulting in an effective annual tax rate of approximately 20%. Using a more normalized income tax rate, we estimate diluted earnings per share for the fourth quarter of 2011 to range from $0.37 to $0.41.

At this time, Mike Elich will comment further on the recently completed third quarter and our outlook for the fourth quarter of 2011. Mike?

Michael Elich

Good morning and good afternoon, depending on where you might be in the country. I appreciate you taking time to join the call. Overall, very pleased with the quarter. It’s a record quarter as far as I know both on our earnings side and revenue side.

We continue to see a strong stability in our existing client base. I know with a lot of noise out in the economy people keep coming to me and asking how, what are we really seeing out there but we continue to see stability and very much a forward-looking perspective from our client base. We continue to manage the same discipline as we have and widening our client base while maintaining a high retention level in our clients, and we see a very – firstly, I’m very pleased with the quality of our existing client base and then as it grows the base continues to mature well and therefore prove its operating leverage for us.

In the quarter, we added 113 clients, we locked 38, seven clients left for AR reasons, 10 were cancelled due to non-AR or most likely risk and non-conforming standards. 15 businesses were sold, one left on their own due to pricing, two to payroll in-house and three left to work with a competitor. Overall that was a net gain of 75 clients that’s an increase of roughly 15% over 3Q of 2010’s build. I think we have 64, 63 or 64 at the time.

From an operational focus we continue to innovate to meet our market demand. Obviously, when as fast as we are growing we need to make sure we are continuing to stay upfront of that curve. We continue to focus on organizational alignment both between how we are looking at the picture from a corporate perspective as well as from the field perspective from the ground up. We continue to build capacity to meet our growth curve as we see it continuing as the trending are currently.

From a business development standpoint, pipelines still remain very strong. We continue to be very picky about the quality of new clients that we see coming in. And pipeline sources, source avenues continue to mature. We acquire our business through three channels, one direct to through network partners that bring us referrals as well as three customer referrals and we see all three of those channels continuing to develop and mature as we grow.

Overall, very pleased with how the organization continues to adapt to new operational levels, one of the things as you grow as we’ve grown is, it brings other variables into the equation, we continue to be very nimble and adapt to those changes and overall, I am very pleased with how the overall organization continues to look down the road.

Regional review, we in the southern California we continue to see strong momentum for growth as well, same thing in northern California. In past quarters I had mentioned that the Northwest and Mountain states were little bit slow or sluggish, we’re starting to see when we are gaining traction in those markets and showing growth. In the Mountain states we’re really starting to see where things are falling out even though the growth rate is not as robust as in California we are seeing growth and seeing businesses where that are starting to make forward-looking decisions.

On the East Coast as well we continue to show consistent growth on an ongoing basis. Tailwinds for us, on a go forward basis we continue to – we see continued retention of our top talent while we continue to retain 90% of our current client base running 90% plus. Business owners continue to make forward-looking decisions, we don’t see the fear in how they are looking at their business that you might think based on all media and what you hearing the Wall Street.

Our pipelines remain very strong and one of the things that we are seeing that is very favorable is, that we are seeing an increase in hours worked in the quarter which typically the precursor to hiring. Headwinds that we do see as well as on a net-net hiring is flat. What we see is we see companies or clients that we work with adding people but then we see almost a counter balance to that where there are clients that still continue to either layoff or right size their organizations, so that net basis tends to be although up a little bit from a hiring standpoint not very much.

On what I’ve seen from BBSI through BBSI we’re through our overall trends we continue to be cautious to the noise in the economy we are in a great position to be able to respond to what might come at us, we are just trying to make sure we’re looking out far enough to be able to be able to adapt.

On a go forward basis we’ll continue to reinvest back into the organizational infrastructure to support our growth curve. We’re continuing to mature pipeline sources and add those looking at technology in different ways that we can understand the market better is one area we’ll put in focus. We’re well along in building and implementing our new payroll platform that’s been a project that’s been underway roughly a year, year and half. It’s starting to be implemented as we go and we see an opportunity for us to gain market share as a result of that just because of the flexibility that it would give us.

We continue to see – to look operations – opportunities to expand our footprint both in markets by building filler branches in markets that maybe underserved for us as well as in the quarter reviewed six new acquisition candidates that are pretty broad based throughout the country. And we continue to see a pipeline of acquisitions although not many of them are worth. Typically a lot of them are broken.

Overall, very pleased with the quarter, very pleased with how the company is running, very proud of the organization as a whole of how they continue to run and build and adapt and grow as we continue to grow overall. So at the end of day I feel that the quality of earnings that we are generating are predictable and also are leading us down the path where we can continue on the same path.

With that we’ll open it up for questions.

Questions-and-Answer Session

Operator

Thank you, sir. (Operator instructions) And our first question comes from the line of Josh Vogel with Sidoti.

Michael Elich

Good morning, Josh.

Josh Vogel – Sidoti & Company

Thank you. Good morning Mike and Jim. Just a couple of questions here, you know, we’ve obviously been seeing very robust growth in PEO, outpacing staffing for sure and I know that staffing is a bit of higher margin business, but can you give us a sense to maybe gross margin target or long-term gross margin targets you may have keeping in mind that PEO’s kind of be around, I guess 90% of total gross revenue.

Michael Elich

You know, Josh I think – I will probably reverse that question a little bit. In our model we don’t typically have a gross margin target as would be seen in the industry, what we are typically looking is operational leverage. Our intent has been a business unit to reinvest back in 50% of what we are generating in margin back into our client. So it’s really more matter of what we are able to bring the bottom line, so if we go in and look at a client that might be dysfunctional we may not be able to charge them and not be able to operate with them. The other side of the equation now is we find good clean – good looking business we are looking at what – what it causes to be in that business or to move into that market while at the same time looking at where the market is and we’ll make our decisions on those two factors. But our focus is from an operational standpoint dilute our operating overhead down to at least 50% and in many cases where our branches are growing and maturing we are finding a stronger operating leverage.

Josh Vogel - Sidoti & Company

Okay, well, I guess just building off those comments, you know, you said earlier that there is a mark-up in the PEO business on the direct payroll costs line, and can you talk a little bit about that and now you are seeing any push back in trying to pass with the markup there?

Michael Elich

No, actually in the last year, we – about a year ago we recognized the recession for us was kind of winding down and we looked back at some of the costs that we had taken on and back in ’07 ’08 when companies were coming apart and tax rates were increasing it was very difficult to pass those costs back on to your client, because you are just going to push them out of business or you are going to push them away from you. So we took those charges back to us and kind of rowed the wave a little bit. For new clients coming on we normalize those costs and continue to build the adequate costing but on a year ago, we look at the market strength and have gone back in now and made adjustments what was appropriate and passed where it was necessary cost back on to our clients and we’ve not had any back on that we’ve actually found that we’ve been able to increase markups where it’s appropriate and we’ve not lost clients because of that.

Josh Vogel – Sidoti & Company

Okay, great. I guess, in a similar vein there, Jim you talked about workers comp expense coming in little bit higher year-over-year and you said that insurance broker commissions were up, is it something that you could pass along at some point?

Jim Miller

Well, the insurance broker commission part of component to workers comp is actually part of us gaining new business and I guess in some ways that’s actually a very good expense to have and in part the increase is due to increased business but also in part to a higher workers comp rate component that’s happened in particularly in California during the last couple of years, so it’s due to that rate increase as well as well as to increased business.

Michael Elich

Yeah, I will say Josh, just – overall the long haul we are passing that on because of that rate increases that the reflection – it’s the percentage of what we are charging so it’s that rate increases that becomes a factor in the increased markup to our customer as well.

Josh Vogel – Sidoti & Company

Okay. And just one last one if you don’t mind, and I’ll hop back in. But I guess this would be more for Jim with the accounts receivable balance dropped sequentially, I was just curious if that was more of a timing thing or maybe a function of just better collection terms?

Jim Miller

Yeah, it’s really more of a function of timing, as we internally manage the company we are typically on a with most customers either a weekly or a bi-weekly cycle and as the quarter ended on a Friday that is probably 90% or better for our customers of being the common pay date to the employees and also the invoice date to our PEO customers and so collections when it is a Friday since it’s kind of the old check for check idea of we’ll pay the employees the same day we get paid by the customers that resulted in increased collections at September 30th.

Josh Vogel – Sidoti & Company

Okay, make sense. Thanks a lot.

Michael Elich

Thank you.

Operator

(Operator instructions) Your next question comes from the line of Jeff Martin from Roth Capital.

Jeff Martin – Roth Capital Partners

Thanks for taking me in guys.

Michael Elich

Good morning Jeff.

Jeff Martin – Roth Capital Partners

Good morning Mike, good morning Jim. I was willing if we can get a little more insight into, you mentioned three different components to the higher workers' comp cost in the quarter. How does that break down between safety incentives, insurance broker and buy your claims?

Jim Miller

The breakdown – the insurance broker piece was about $500,000 higher, safety incentives were about $700,000 higher and then the provision for back year claim development was about $900,000.

Jeff Martin – Roth Capital Partners

And does that provision for prior year claims tie into that dove tail into the current unemployment rate and not necessarily robust data of the economy.

Jim Miller

Yeah I think it definitely does have an impact on that and you know as we go forward and build our own internal models that we base guidance off you know we’re looking at that potential for each quarter and kind of factoring that into to make sure that we’re looking workers comp on a conservative basis and making sure that we are not getting surprised either, but definitely the economy has an impact on that.

Jeff Martin – Roth Capital Partners

Okay, and does that safety incentive in the third quarter mean there is likely to less safety incentive in the fourth quarter and therefore workers comp as a percentage of gross payroll comes down?

Jim Miller

Well, it could from the standpoint that losses that would be incur in the fourth quarter could go against that safety incentive liability that’s being generated throughout the year so certainly provides a hedge against losses.

Jeff Martin – Roth Capital Partners

Okay. And then in terms of the price increases that you did, those were kind of set across the board or were those strictly on renewals and new business, could you kind of help us understand how that was implemented?

Michael Elich

Well, what we did Jeff is, we – in charging ourselves internally a bigger number from just on the comp side for California on the accrual base then manger it cut into manager’s margins and so intuitively they went back to look at clients across the board that’s said alright, where are you at a lack, where we need to pass that on. So it was done on a client by client basis upon renewal where it was necessary. So it’s more matter of writing the ship. You got to think too the other factors in that equation was that you might had a client that had 50 employees in 2007, in 2009 they had 15. It was really bringing a lot of those clients back into alignment as we felt now that the base was solid in that and we knew what we are looking at and we wouldn’t put overall business at risk by just drawing a bigger markup at our client base.

Jeff Martin – Roth Capital Partners

Okay. Is there more right sizing to do or right initiative to deal with respect to pricing (inaudible)

Michael Elich

I think it’s on ongoing basis, we are watching it a lot closer but I say right now it's pretty good shape. It’s just a matter on a go forward basis so little bit of what might happen markup wise and as things continue to improve. We are seeing from California standpoint and just insurance in general I think it’s going to see a very hard market over the next few years where in the last five years it’s been a very soft market which will benefit us. I think it’s an ongoing basis I don’t see any sweeping changes, I think that what we are dealing is working but at the same time I think that what we making – we are continuing to make adjustments.

Jeff Martin – Roth Capital Partners

Okay. And then could you give us some insight into what kind of businesses you are looking at acquiring, are they pure staffing or they are also PEO and are they completely in entire territories or existing territories?

Michael Elich

We see opportunities come across our desk, we are not actively pursuing them as they come across we’ll take a look out at them from a number of characteristics. First of all it’s going to be organizational culture and how well would they align with us. Secondly it would be, what is their business model look like compared to ours and how much would we have to move that to incorporate that into our fold. Staffing tends to be easier to move and get there where PEO it seems like everybody is – for every PEO company that’s out there is a different model that they are running. So, but one thing we do know with the new payroll system that we have coming on board is it gives us much more flexibility as far as converting a PEO client to our system if we were to go that route and in many cases there is a lot of PEOs out there using that system already so that simplify things a bit too. But I think the Barrett’s focus is going to be what accretive, is it going to be – is it one going to make money to because of the geographic advantage and that it would help us broaden our footprint, so three, four, five years down the road we’re wide enough to continue our pace of growth.

Jeff Martin – Roth Capital Partners

Okay. And then, could you contrast what you are hearing from your branch managers and/or your clients in October versus let’s say August and September in terms of the overall sentiment?

Michael Elich

I would say it’s pretty much the same, it hasn’t I think that from the branch level we continue to see clients looking forward making forward-looking decisions. I don’t hear that has really changed. If anything is probably even gotten a little bit better I think that there is enough demand from their customers that they are expanding to meet the demand of the market.

Jeff Martin – Roth Capital Partners

Okay. And then finally could you touch on the competitive landscape, are you up again the same competitors you always have been, are you seeing new competitors come in and namely some of the larger players like Insperity, Paychex, ADP are you seeing them or are you still pretty much out there targeting a unique set of blue-collar clients.

Michael Elich

I – that were all in the blue-collar business, they can say whatever they want, they are doing as much blue-collars as anybody else. At the end of the day, where we continue to maybe it’s just by how by route that we get our clients. You got to think California only probably has about maybe a 3 to maybe 5 percentile penetration on the PEO side. So given that we do a lot of business in California, we are not seeing that we bump into our competitors that much. In the quarter we lost three clients to a competitor, you know, on our base that’s a pretty small percentage in markets maybe in the Mountain states we see a little bit more competitive pressure, but still no real direct competitor that we find ourselves going head to head with.

Jeff Martin – Roth Capital Partners

Great. Thanks, Mike. Good luck guys.

Michael Elich

Thank you.

Operator

Our next question comes from the line of Michael Prouting with 10K Capital.

Michael Prouting – 10K Capital

Yeah, good morning thanks for taking my question.

Michael Elich

Good morning.

Michael Prouting – 10K Capital

First question I have is on workers comp, can you remind me when you next have a third-party review of your workers comp provision?

Jim Miller

Yeah, we actually go to a quarter review with our actuary and are in contact with them more than quarterly so but a review each quarter and an update of their projection of costs we are in constant contact with them each quarter.

Michael Prouting – 10K Capital

Okay. Is there a more significant review at fiscal yearend or is that no different from any other quarter?

Jim Miller

There is an annual more detailed analysis that they put together that we’ll see in the fourth quarter. They are close enough to the data on a quarterly basis that there shouldn’t be any to prices when they issue that report to us.

Michael Prouting – 10K Capital

Okay all right great. And the second question I had – as far as you mentioned that you are seeing clients increased their hours, just wondering what your expectations might be in terms of client starting to hire again. And then I guess also related to that I am wondering the more positive outlook you are getting from your client, we are hearing in the rest of the economy, is that because we are just listening to Wall Street too much or do you think that’s the function of the quality of your client base?

Michael Elich

If I had the answer to that one I think – I don’t think any of us would be here. The challenge of it is, is that, yeah, there is a lot of noise and you’ll look at what you are hearing at Wall Street but I think there are some – a true macro on structural issues out there. I personally believe the small business owner has reached a point though where, their business is cut in half, they are stable, they are making money, we continue to see probably a better turn on even our AR that we’ve ever had meaning that the companies we’re working with are well financed, they are solid. So I guess they’ve kind of turned their eye a little bit to the noise and said we’ve got to move forward and take care of our customers and as they are doing that they are finding demand. My worry will be today I am driving down the freeway and I am only one on the freeway. As far as the increase in hours go.

We don’t – we can only monitor that stuff, but one thing that we do on our business model is that we work with companies that are more efficient, become more efficient with the labor they have. So we kind of work against ourselves a little bit on the short run because we are trying to help our clients not have to hire people initially. But because they run a bigger business model they capture more business, they do hire people on increased wages because of that. So I guess it’s, the Catch22 is there. Yeah, there is a lot things out there that seem to be that are under state of correction in the macro economy, but maybe we are just not big enough yet that we are affected by that because our clients are moving forward they are continuing to add hours although they are not hiring a lot of people. Once you add hours eventually you reach a point of capacity of each individual and you have to add individual headcounts to expand that.

Michael Prouting – 10K Capital

Okay thanks for that color. And then as far as acquisitions are concerned, I am just wondering what’s your thinking in terms of using either cash or and then I am also wondering related to that and I know this is a difficult thing to put parameters around, but I am wondering over for – stake list heading like 12 months, what kind of capital potentially do you think you could put to work?

Michael Elich

You know, lot of things that you got to be careful of when you are going into a harder insurance market is that capital becomes a real pivotal piece for making because we are in the insurance business making states comfortable with your balance sheet and making all your business partner so we carry, maybe on a non-restricted basis, but we feel comfortable feel that we need roughly 40 to 45 million on our balance sheet dedicated to just that. So beyond that it is working capital and it also becomes cash that we might use for acquisitions or cash and stock combination if we found the right one. The real challenge is finding the right one – the strategy behind it is that if we can meet a few companies and I can interface and we as a company can get to normal little bit.

We are not going in on the unknown and so if we find one that matches up well to our cultural needs or our cultural alignment as a company and we feel that it can be accretive and then that’s kind of how they deal with structure. But we would probably be more opined to use cash to stock given even though we do. And then remember we still buy lot of stock back and we also pay dividend, we are kind of starting through this over last five years we have actually pushed back into shareholders to dividend and or stock buyback about $40 million. So that actually is a strategy as well.

Michael Prouting – 10K Capital

And then – and final question actually related to that and so you’ve made for asking in the same question as a quarter-as to quarter, so you are taking accepting that although cash isn’t available for use in stock repurchase, but if you were just to take the cash out of your market cap, you are trading at roughly five times trailing EBITDA at this point for recurring revenues services business, this seems frankly ridiculous. I know one potential catalyst is resolution of the stockholder [ph] just wondering if you can provide us of any update on that?

Michael Elich

You know, it’s a challenge that we face related to the overhang that might be other there. We continue to have an interface with the state over nine last nine months and we’ll continue to support the best interest of resolving that for our shareholders and but while keeping the interest of our shareholders in mind. The other side is that we continue to tell the story out on the street and continue to expand the interest in the stock and find. And I think that – I think that we have a story that still is maturing in the eyes of the market and I continue to be very aggressive in helping people understand what we are really made up of. We are a very unique company and what we are doing is not directly – we don’t directly compete with our competitors, but we continue to take market share from the. So, over time, my view is the view of those Ray [ph] for many years is that if you build a good company, eventually that itself takes care of itself

Michael Prouting – 10K Capital

Okay. Thanks for taking my questions. And I know it’s chart, but congratulations on the continuing great execution.

Michael Elich

Thank you very much.

Operator

Our next question comes from the line of Nancy Sherertz with BBSI.

Michael Elich

Good morning, Nancy.

Nancy Sherertz – BBSI

Good morning. Shifting direction just a little, in the article published in the Portland Business Journal regarding recent 13-D filing, one of the things that we learned was that a strategy has been formulated to increase company revenue to about $3 billion. And I would appreciate you providing specifics other than the generality of for example, acquisitions and the time frame. And also a comment on, in addition to interfacing, management’s current relationship with shareholders. Thank you.

Michael Elich

I think the context of leasing, we could get to $3 billion was made during our shareholder meeting back in May. That’s what we are building towards, that’s what we continue to see as a mark both in building our operational infrastructure and operational capacity. We’ve – if you go back to 2009, we’ve actually grown our business, grown the business from roughly a little over a $1 billion to around over $1.5 billion and we don’t see that slowing. I think we continue to manage certain disciplines that organically will allow us to continue on that pace as well as looking at opportunities to expand our footprint down the road.

As far as a time frame for that, we are – this first year [ph] since those past thing has been a matter of aligning ourselves towards our future and ensuring that we are not missing anything. So as we look at organizationally, we are continuing to invest back into resources that will help us achieve that. And then as we get further down the road and we see that everything is running really that we have, then we’ll look for opportunities to expand. And then as far as shareholder relations, one, our door continues to always be open. I think our Board has continued to maintain an open door to the estate [ph] and I continue to be very engaged and actively involved in being in front of the shareholders and like to believe I’m making myself available for anybody that would have a question or would like to learn a little bit more about what we are trying to accomplish.

Nancy Sherertz – BBSI

Thank you:

Michael Elich

Thank you.

Operator

At this time, this concludes our question and answer session. I would now like to turn the call back over to Mr. Elich for closing remarks.

Michael Elich

Again, thank you for your time and participation. We will continue to execute, move forward and keep informed as we continue to execute. So, thank you.

Operator

Thank you. This concludes today’s conference call. You may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Barrett Business Services CEO Discusses Q3 2011 Results - Earnings Call Transcript

Check out Seeking Alpha’s new Earnings Center »

This Transcript
All Transcripts