Q2 2024 Barrett Business Services Inc Earnings Call Transcript
Key Points
- Barrett Business Services Inc (BBSI) reported a strong second quarter with financial results in line with their full-year outlook.
- Gross billings increased by 6% over the prior year's quarter, reaching $2 billion, driven by strong controllable growth from net new PEO clients.
- The company added a record number of worksite employees, growing by 4% year-over-year, attributed to successful client retention and new client additions.
- BBSI's new health insurance offering, BBSI Benefits, is showing positive results with a strategic partnership with Kaiser Permanente, leading to increased new subscribers.
- The company has a strong balance sheet with $110 million of unrestricted cash investments and no debt, allowing for continued investments and shareholder returns through dividends and stock buybacks.
- The staffing business declined by 3% over the prior-year quarter, impacted by macroeconomic headwinds and supply-demand imbalances.
- The Pacific Northwest region experienced a decline of 3% in PEO gross billings, affected by slower client growth and negative client hiring trends.
- Payroll taxes remained higher than the prior year, impacting gross margin rates, although these are being addressed in pricing strategies.
- The benefits broker channel for BBSI Benefits is growing slower than expected, with less traction than anticipated.
- The construction industry in the Pacific Northwest has been slower to rebound, affecting client growth in that region.
Good afternoon, everyone, and thank you for participating today's conference call to discuss BBSI's financial results for the first (sic - see press release, "second") quarter ended June 30, 2024. Joining us today are BBSI's President and CEO, Mr. Gary Kramer and the company's CFO, Mr. Anthony Harris. Following their remarks, we'll open the call for your questions.
Before we go further, please take note of the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995. The statement provides important cautions regarding forward-looking statements. The company's remarks during today's conference call will include forward-looking statements. These statements, along with other information presented that does not reflect historical fact 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
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