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View All NewsBarrett Q2 revenue rises 3%, reaches agreement with SEC
Barrett Business Services Inc. (NASD: BBSI) revenue rose 2.7% in the second quarter with the growth coming from its PEO division, but staffing services revenue fell, the Vancouver, Wash.-based company reported. CEO Michael Elich cited headwinds to growth, although he noted the company added 380 new clients in the quarter. The company also reported it reached an agreement with the US Securities and Exchange Commission.
Gross margin also improved to 20.9%.
| (US$ thousands) | Q2 2018 | Q2 2017 | % change |
| Revenue | $231,603 | $225,574 | 2.7% |
| Gross margin | $48,480 | $44,214 | 9.6% |
| Gross margin percentage | 20.9% | 19.6% | |
| Net loss | $11,240 | $11,126 | 1.0% |
Quote
“In addition, BBSI has reached an agreement in principle with the SEC Division of Enforcement staff for a full resolution of the investigation which began in 2016,” CFO Gary Kramer said. “With this resolution, we have turned the corner and have successfully executed our remediation plan.”
Barrett received a subpoena from the SEC in April 2016 in connection with an inquiry into reported errors in the company’s financial statements, according to a regulatory filing. It had also received a subpoena from the SEC in May 2015 related to the SEC’s investigation into the company’s accounting policies with regard to its workers’ compensation reserves.
Revenue by segment
| (US$ thousands) | Q2 2018 | Q2 2017 | % change |
| Professional employer service fees | $197,277 | $187,718 | 5.1% |
| Staffing services | $34,326 | $37,856 | -9.3% |
Share price and market cap
Shares in Barrett were down 24.94% to $70.00 at 1:47 p.m. Eastern time. The company had a market cap of $511.6 million.