Founded in 1951, Barrett Business Services, Inc. (BBSI) has evolved from a staffing company into a comprehensive Professional Employer Organization (PEO) and business management solutions provider. With headquarters in Vancouver, Washington, BBSI serves a diverse client base across industries such as electronics manufacturing, light industrial production, agriculture, transportation, logistics, food ...Founded in 1951, Barrett Business Services, Inc. (BBSI) has evolved from a staffing company into a comprehensive Professional Employer Organization (PEO) and business management solutions provider. With headquarters in Vancouver, Washington, BBSI serves a diverse client base across industries such as electronics manufacturing, light industrial production, agriculture, transportation, logistics, food processing, telecommunications, construction, and professional services. The company's proprietary management platform integrates strategic consulting with practical HR outsourcing tools, enabling clients to streamline operations and mitigate risks. Core services include co-employment through professional employer services, where BBSI manages payroll, payroll taxes, workers' compensation, and administrative duties; staffing and recruiting for short-term, contract, direct placement, and on-site management; and comprehensive HR, risk management, and business consulting. BBSI operates with a local support model, providing personalized service backed by national resources, and works with over 8,100 PEO clients across all 50 states. The company is publicly traded on NASDAQ under the symbol BBSI, with a market capitalization around $815 million as of the latest data. Under the leadership of CEO Gary Kramer, who joined in 2016 and became CEO in 2020, BBSI has focused on growth and operational efficiency. The company employs approximately 3,658 full-time staff, though it manages a workforce of over 100,000 through its PEO clients. Financially, BBSI generates revenue primarily from fees and service revenues, with a gross profit margin of about 19.8% and a net profit margin of 2.8% (TTM). Its business model emphasizes recurring revenue, with a focus on mid-sized enterprises seeking outsourced HR and risk management. BBSI also pays a small dividend, yielding around 1%. Looking forward, the company aims to expand its local market presence and enhance its technology platform, positioning itself as a partner for business owners seeking sustainable growth and workforce management solutions.
Operator: Good afternoon, everyone and thank you for participating in today's conference call to discuss BBSI's financial results for the first quarter ended March 31, 2026. Joining us today are BBSI's President and CEO, Mr. Gary Kramer; and the company's CFO, Mr. Anthony Harris. Following their remarks, we will 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 the 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 about the risks and uncertainties that could cause actual results to differ from those expressed or implied by the forward-looking statements. I would like to remind everyone that this call will be available for replay through June 6, starting at 8:00 p.m. Eastern Time tonight. 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.bbsi.com. Now I would like to turn the call over to the President and Chief Executive Officer of BBSI, Mr. Gary Kramer. Sir, please go ahead.
Gary Kramer: Thank you, and good afternoon, everyone and thank you for joining the call. I am pleased to report that we had a solid start to the year and our Q1 results were in line with our expectations. We're a company that executes to a plan and we continue to grow our client base while delivering additional products across our tech stack. Moving to our financial results and worksite employees. During the quarter, our gross billings increased 3.5% over the prior year's quarter and was in line with our expectations. We continue to execute on our strategies to increase the top of the sales funnel and we continue to see positive results. While Q1 new client additions were strong, they trailed Q1 '25, which benefited from an inaugural selling season with Kaiser. Additionally, our client retention continues to trend better than our historical levels. I'd like to attribute that to the work we do with our clients and the value our teams provide. The result of all these efforts or what I refer to as controllable growth is that we added approximately 5,300 worksite employees year-over-year from net new clients. However, our overall growth was tempered by broader client workforce reductions. As a reminder, macroeconomic uncertainties led many of our clients to reduce headcount through the back half of 2025, a trend that impacts our …
