VANCOUVER, Wash., April 23, 2008 (PRIME NEWSWIRE) -- Barrett Business Services, Inc. (Nasdaq:BBSI) reported today net income of $91,000 for the first quarter ended March 31, 2008, a decline of $1.6 million or 94.7% from net income of $1.7 million for the first quarter of 2007. Diluted earnings per share for the 2008 first quarter were $.01, as compared to diluted earnings per share of $.15 for the same quarter a year ago.

Net revenues for the first quarter ended March 31, 2008 totaled $66.2 million, an increase of approximately $5.6 million or 9.3% over the $60.6 million for the same quarter in 2007.


                                                    (Unaudited)
                                                 First Quarter Ended
  ($ in thousands, except per share amounts)          March 31,
                                                --------------------
             Results of Operations                 2008       2007
 --------------------------------------------   ---------  ---------
 Revenues:
  Staffing services                             $  35,819  $  28,015
  Professional employer service fees               30,375     32,573
                                                ---------  ---------
   Total revenues                                  66,194     60,588
                                                ---------  ---------
 Cost of revenues:
  Direct payroll costs                             26,383     21,142
  Payroll taxes and benefits                       24,445     23,911
  Workers' compensation                             6,804      5,844
                                                ---------  ---------
   Total cost of revenues                          57,632     50,897
                                                ---------  ---------
 Gross margin                                       8,562      9,691
 Selling, general and administrative expenses       8,669      7,388
 Depreciation and amortization                        376        349
                                                ---------  ---------
 Income from operations                              (483)     1,954
 Other income, net                                    626        785
                                                ---------  ---------
 Income before taxes                                  143      2,739
 Provision for income taxes                            52      1,011
                                                ---------  ---------
 Net income                                     $      91  $   1,728
                                                =========  =========
 Basic earnings per share                       $     .01  $     .15
                                                =========  =========
 Weighted average basic shares outstanding         11,087     11,255
                                                =========  =========
 Diluted earnings per share                     $     .01  $     .15
                                                =========  =========
 Weighted average diluted shares outstanding       11,423     11,681
                                                =========  =========

The Company reports its Professional Employer Organization services ("PEO") revenues on a net basis because it is not the primary obligor for the services provided by the Company's PEO clients to their customers. The gross revenues and cost of revenues information below, although not in accordance with generally accepted accounting principles ("GAAP"), is presented for comparison purposes and because management believes such information is more informative as to the level of the Company's business activity and more useful in managing its operations.


                                                 (Unaudited)
                                                 First Quarter
 (in thousands)                                    March 31,
                                            ---------------------
                                               2008        2007
                                            ---------   ---------
 Revenues:
  Staffing services                         $  35,819   $  28,015
  Professional employer services              223,761     229,513
                                            ---------   ---------
   Total revenues                             259,580     257,528
                                            ---------   ---------
 Cost of revenues:
  Direct payroll costs                        217,853     216,628
  Payroll taxes and benefits                   24,445      23,911
  Workers' compensation                         8,720       7,298
                                            ---------   ---------
   Total cost of revenues                     251,018     247,837
                                            ---------   ---------
 Gross margin                               $   8,562   $   9,691
                                            =========   =========

Gross revenues of $259.6 million for the first quarter ended March 31, 2008 rose 0.8% over the similar period in 2007.

A reconciliation of non-GAAP gross revenues to net revenues is as follows:

For the first quarters ended March 31, 2008 and 2007:


                                 (Unaudited)
                          Three Months Ended March 31,
            ---------------------------------------------------------
 (in           Gross Revenue                            Net Revenue
  thousands) Reporting Method    Reclassification     Reporting Method
            ------------------- -------------------   ---------------
               2008      2007      2008       2007      2008    2007
            --------- --------- ---------  ---------  ------- -------
 Revenues:
  Staffing
   services $  35,819 $  28,015 $      --  $      --  $35,819 $28,015
  Profes-
   sional
   employer
   services   223,761   229,513  (193,386)  (196,940)  30,375  32,573
            --------- --------- ---------  ---------  ------- -------
  Total
   revenues $ 259,580 $ 257,528 $(193,386) $(196,940) $66,194 $60,588
            ========= ========= =========  =========  ======= =======
 Cost of
  revenues  $ 251,018 $ 247,837 $(193,386) $(196,940) $57,632 $50,897
            ========= ========= =========  =========  ======= =======

The following summarizes the unaudited consolidated balance sheets at March 31, 2008 and December 31, 2007.


                                               March 31,  December 31,
 (in thousands)                                  2008         2007
                                               ---------   ---------
                       Assets
                       ------
 Current assets:
  Cash and cash equivalents                    $  54,906   $  62,779
  Marketable securities                            1,458       1,717
  Trade accounts receivable, net                  41,204      36,673
  Prepaid expenses and other                       3,816       2,336
  Deferred income taxes                            3,249       3,138
  Workers' compensation receivables for insured
   claims                                            225         225
                                               ---------   ---------
   Total current assets                          104,858     106,868
 Marketable securities                               419         417
 Goodwill, net                                    45,435      41,508
 Property, equipment and software, net            15,934      16,136
 Restricted marketable securities and workers'
  compensation deposits                            3,198       2,750
 Other assets                                      1,547       1,649
 Workers' compensation receivables for insured
  claims                                           3,570       3,896
                                               ---------   ---------
                                               $ 174,961   $ 173,224
                                               =========   =========

       Liabilities and Stockholders' Equity
       ------------------------------------
 Current liabilities:
  Accounts payable                             $     929   $   1,516
  Accrued payroll, payroll taxes and related
   benefits                                       38,716      33,553
  Other accrued liabilities                          647       1,064
  Workers' compensation claims liabilities         6,463       6,031
  Workers' compensation claims liabilities for
   insured claims                                    225         225
  Safety incentives liabilities                    5,637       5,911
                                               ---------   ---------
   Total current liabilities                      52,617      48,300
 Customer deposits                                   724         752
 Long-term workers' compensation claims
  liabilities                                      4,013       4,021
 Long-term workers' compensation liabilities
  for insured claims                               2,417       2,464
 Deferred income taxes                             3,269       3,268
 Deferred gain on sale and leaseback                 640         671
 Stockholders' equity                            111,281     113,748
                                               ---------   ---------
                                               $ 174,961   $ 173,224
                                               =========   =========

Outlook for Second Quarter 2008

The Company also disclosed today limited financial guidance with respect to its operating results for the second quarter ending June 30, 2008. The Company expects gross revenues for the second quarter of 2008 to range from $262 million to $267 million, as compared to $267.7 million for the second quarter of 2007, and anticipates diluted earnings per share for the second quarter of 2008 to range from $.24 to $.28 per share, as compared to $.42 per share for the same period a year ago. A reconciliation of estimated gross revenues to estimated GAAP net revenues for the second quarter of 2008 is not included because PEO revenues and cost of PEO revenues for the period are not reasonably estimable.

Conference Call

On April 24 at 9:00 a.m. Pacific Time, William W. Sherertz and Michael D. Mulholland will host an investor telephone conference call to discuss first quarter 2008 operating results. To participate in the call, dial (877) 356-3717. The call identification number is 44463566. The conference call will also be webcast live at www.barrettbusiness.com. To access the webcast, click on the Investor Relations section of the Web site and select Webcast. A replay of the call will be available beginning Thursday, April 24, 2008 at 12:00 p.m. PT and ending on Thursday, May 1, 2008. To listen to the recording, dial (800) 642-1687 and enter conference identification code 44463566.

Statements in this release about future events or performance, including gross revenues and earnings expectations for the second quarter of 2008, are forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results of the Company to be materially different from any future results expressed or implied by such forward-looking statements. Factors that could affect future results include economic conditions in the Company's service areas, the effect of changes in the Company's mix of services on gross margin, the Company's ability to successfully integrate acquired businesses with its existing operations, future workers' compensation claims experience, the effect of changes in the workers' compensation regulatory environment in one or more of its primary markets, the collectibility of accounts receivable and the effect of conditions in the global capital markets on the Company's investment portfolio, among others. Other important factors that may affect the Company's future prospects are described in the Company's 2007 Annual Report on Form 10-K. Although forward-looking statements help to provide complete information about the Company, readers should keep in mind that forward-looking statements may be less reliable than historical information. The Company undertakes no obligation to update or revise forward-looking statements in this release to reflect events or changes in circumstances that occur after the date of this release.

BBSI provides a comprehensive range of human resource management solutions to large and small companies throughout many regions of the United States.

Barrett Business Services, Inc.
William W. Sherertz, President and Chief Executive Officer
(360) 828-0700