Barrett Business Services, Inc. (BBSI) has reported a 29.70 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $8.05 million, or $1.08 a share in the quarter, compared with $11.45 million, or $1.55 a share for the same period last year.
Revenue during the quarter grew 14.11 percent to $221.10 million from $193.76 million in the previous year period. Gross margin for the quarter contracted 164 basis points over the previous year period to 19.60 percent. Total expenses were 95.51 percent of quarterly revenues, up from 92.73 percent for the same period last year. That has resulted in a contraction of 278 basis points in operating margin to 4.49 percent.
Operating income for the quarter was $9.92 million, compared with $14.08 million in the previous year period.
"Our fourth quarter closed a year marked by challenges, throughout which the organization remained focused and delivered strong financial performance and key operational improvements," said Michael Elich, president and chief executive officer of BBSI. "We bolstered our leadership with the addition of two new board members and a new CFO, while growing annual gross revenues by 17% and adding 810 net new clients, all while maintaining our better-than-90% retention rate. Additionally, we saw the impact of a tightened labor market coupled with uncertainty during the time leading up to the election. Looking forward to 2017, while we are seeing some holdover from these factors, I'm confident that the organization is focused on the right initiatives to strengthen our relationships, our value proposition, and ultimately our brand."
For fiscal year 2017, Barrett Business Services, Inc. forecasts adjusted revenue to grow at 16 percent. The company projects diluted earnings per share to be $3.65.
Working capital remains negative
Working capital of Barrett Business Services, Inc. was negative $14.54 million on Dec. 31, 2016 compared with negative $10.38 million on Dec. 31, 2015. Current ratio was at 0.95 as on Dec. 31, 2016, down from 0.96 on Dec. 31, 2015.
Days sales outstanding went up to 26 days for the quarter compared with 22 days for the same period last year.
At the same time, days payable outstanding was almost stable at 1 days for the quarter, when compared with the previous year period.
Debt comes down significantly
Barrett Business Services, Inc. has recorded a decline in total debt over the last one year. It stood at $4.61 million as on Dec. 31, 2016, down 76.74 percent or $15.22 million from $19.83 million on Dec. 31, 2015. Long-term debt stood at $4.39 million as on Dec. 31, 2016. Total debt was 0.77 percent of total assets as on Dec. 31, 2016, compared with 3.99 percent on Dec. 31, 2015. Debt to equity ratio was at 0.07 as on Dec. 31, 2016, down from 0.36 as on Dec. 31, 2015.
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