On this page of StockholderLetter.com we present the latest annual shareholder letter from BARRETT BUSINESS SERVICES INC — ticker symbol BBSI. Reading current and past BBSI letters to shareholders can bring important insights into the investment thesis.

 •  4/21/2025 Letter Continued (Full PDF)
 •  4/21/2023 BBSI Stockholder Letter
 •  4/22/2024 BBSI Stockholder Letter
 •  More "Business Services & Equipment" Category Stockholder Letters
 •  BBSI Benford's Law Stock Score = 88

BBSI Shareholder/Stockholder Letter Transcript:

BARRETT BUSINESS SERVICES, INC.
2024 ANNUAL REPORT
TABLE OF CONTENTS
Page
2
Item 1.
Business
Item 1A.
Risk Factors
9
Item 1B.
Unresolved Staff Comments
21
Item 1C. Cybersecurity
22
Item 2.
Properties
23
Item 3.
Legal Proceedings
24
Item 4.
Mine Safety Disclosures
24
Item 5.
Market for Registrant   s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
24
Item 7.
Management   s Discussion and Analysis of Financial Condition and Results of Operations
26
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
33
Item 8.
Financial Statements and Supplementary Data
34
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
63
Item 9A.
Controls and Procedures
63
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Item 1.
BUSINESS
General
Company Background
Barrett Business Services, Inc. (   BBSI,    the    Company,       our    or    we   ), is a leading provider of business
management solutions for small and mid-sized companies. The Company has developed a management
platform that integrates a knowledge-based approach from the management consulting industry with tools
from the human resource outsourcing industry. This platform, through the effective leveraging of human
capital, helps our business owner clients run their businesses more effectively. We believe this platform,
delivered through a decentralized organizational structure, differentiates BBSI from our competitors. BBSI
was incorporated in Maryland in 1965.
Certain statements below contain forward-looking information that is subject to risks and uncertainties.
See    Forward-Looking Information    in Item 7 of Part II of this report and    Risk Factors    in Item 1A of Part I
of this report.
Common Stock Split
On June 4, 2024, we amended our Charter to increase the number of authorized shares of common stock
from 20,500,000 shares to 82,000,000 shares, and our Board of Directors declared a four-for-one split of
the Company   s common stock effected in the form of a stock dividend (the    2024 Stock Split   ). Each
stockholder of record at the close of business on June 14, 2024 received a dividend of three additional
shares of common stock for each then-held share, distributed after close of trading on June 21, 2024. All
share and per share amounts presented herein have been retroactively adjusted to reflect the impact of
the 2024 Stock Split. The shares of common stock retain a par value of $0.01 per share. Accordingly, an
amount equal to the par value of the increased shares resulting from the stock split was reclassified from
additional paid-in capital to common stock.
Business Strategy
Our strategy is to align local operations teams with the mission of small and mid-sized business owners,
driving value to their business. To do so, BBSI:
x
partners with business owners to leverage their investment in human capital through a hightouch, results-oriented approach;
x
brings predictability to each client organization through a three-tiered management platform;
and
x
enables business owners to focus on their core business by reducing organizational
complexity and maximizing productivity.
Business Organization
We operate a decentralized delivery model using operationally-focused business teams, typically located
within 50 miles of our client companies. These teams are led by experienced business generalists and
include senior level professionals with expertise in human resources, organizational development, risk
mitigation and workplace safety, recruiting, employee benefits, and various types of administration,
including payroll. These teams are responsible for growth and profitability of their operations, and for
providing strategic leadership, guidance and expert consultation to our client companies. The
decentralized structure fosters autonomous decision-making in which business teams deliver plans that
closely align with the objectives of each business owner client.
Services Overview
BBSI   s core purpose is to advocate for business owners, particularly in the small and mid-sized business
segment. Our evolution from an entrepreneurially run company to a professionally managed organization
has helped to form our view that all businesses experience inflection points at key stages of growth. The
insights gained through our own growth, along with the trends we see in working with more than 8,100
companies each day, define our approach to guiding business owners through the challenges associated
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with being an employer. BBSI   s business teams align with each business owner client through a
structured three-tiered progression. In doing so, business teams focus on the objectives of each business
owner and deliver planning, guidance and resources in support of those objectives.
Tier 1: Tactical Alignment
The first stage focuses on the mutual setting of expectations and is essential to a successful client
relationship. It begins with a process of assessment and discovery in which the business owner   s
business objectives, attitudes, and culture are aligned with BBSI   s processes, controls and culture. This
stage includes an implementation process, which addresses the administrative components of
employment.
Tier 2: Dynamic Relationship
The second stage of the relationship emphasizes organizational development as a means of achieving
each client   s business objectives. There is a focus on process improvement, development of best
practices, supervisor training and leadership development.
Tier 3: Strategic Counsel
With an emphasis on advocacy on behalf of the business owner, the third stage of the relationship is
more strategic and forward-looking with a goal of cultivating an environment in which all efforts are
directed by the mission and long-term objectives of the business owner.
In addition to serving as a resource and guide, BBSI can provide workers    compensation coverage as a
means of meeting statutory requirements and protecting our clients from employment-related injury
claims. Through our third-party administrators, we provide claims management services for our clients.
We work to manage and reduce job injury claims, identify fraudulent claims and structure optimal work
programs, including modified duty.
In 2023, BBSI began offering additional employee benefit programs to our clients. The new benefit
programs available to clients include medical, dental and vision plans, flexible spending accounts and
health savings accounts, life insurance and voluntary accident coverage, critical illness and disability
coverage, among others. These additional employee benefit programs are offered through fully insured
arrangements with third-party carriers and are designed to provide strategic value to our clients through
access to best-in-class plans and service.
Categories of Services
We report financial results in two categories of services: Professional Employer Services (   PEO   ) and
Staffing. See Item 7 of Part II of this Report for information regarding the percentages of total net
revenues provided by our PEO and staffing services for each of the last three fiscal years, and our
consolidated financial statements in Item 8 of Part II of this Report for information regarding revenues, net
income and total assets in our single reportable segment.
PEO
We enter into a client services agreement to establish a co-employment relationship with each client
company, assuming responsibility for payroll, payroll taxes, workers    compensation (if elected) and
benefits coverage (if elected) and certain other administrative functions for the client   s existing workforce.
We provide our PEO clients access to human resource advisors, retirement plans, a learning
management system and our web-based technology platform, myBBSI.
We refer to employees of our PEO clients as worksite employees (   WSEs   ). The client maintains physical
care, custody and control of the WSEs, including the authority to hire and terminate employees. During
2024, we supported in excess of 8,100 PEO clients with total average WSEs of 129,577.
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 4/21/2025 Letter Continued (Full PDF)