Barrett Business Services, Inc. (BBSI) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Stockholders of Barrett Business Services. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to James Potts, Executive Vice President, General Counsel and Secretary. The floor is yours.

Thank you, and good afternoon. Some preliminary announcements. Anyone who wishes to vote his or her shares at the meeting should do so by using the proxy voting site link on the left-hand panel of your screen and the 11-digit voter control number that was issued by AST along with your proxy materials. Only persons who are stockholders of record on April 12, 2021 are entitled to vote at this meeting. For those who have sent in a proxy, there is nothing further to do, and your shares will be voted as instructed, unless you wish to change your vote.

Good afternoon. I'm Tony Meeker, Chairman of the Board of BBSI, and I now call the 2021 Annual Meeting of the Stockholders to order. James Potts, Executive Vice President, General Counsel and Secretary, will act as secretary to this meeting. AST has been appointed teller and inspector of elections for the meeting. David Cary from AST is present today. I want to thank you for attending the 2021 annual meeting of BBSI. We are emerging from one of the most demanding times in recent memory, facing a worldwide economic shutdown, and at the same time, navigating a historic pandemic has taxed everyone. One year ago, at the beginning of the second quarter of 2020, BBSI witnessed dramatically increased unemployment, causing retreating top line revenues. In addition, our clients were looking for answers to big questions. Just before the pandemic began, the Board of Directors introduced to all stakeholders a new President and CEO. Just 2 weeks after Gary was appointed, the world dramatically changed. Gary and the BBSI team rolled up their collective sleeves and went to work. Within weeks, BBSI had met the immediate challenges of the COVID-19 staffing changes at all levels of the company. In addition, BBSI helped deliver quality services to our clients. Our record client retention through 2020 confirms the value BBSI brings to our customers. Most important of all, the strategic initiatives launched at the beginning of the year were kept in place. The stock repurchase program was confirmed and executed on plan. Investments in human capital continued. Dividends were continued each quarter. The improvements and investments in IT were accomplished as planned. Derisking the company continued through the removal of $115.6 million in an outstanding workers' compensation claims for the 3-year period 2014 to 2017. We achieved nationwide PEO licensure. Branch development continued, and we continued our review of potential M&A opportunities. The Board of Directors believe the good results are the product of sustained value creation. Long-term value is created by corporate behaviors focused on long-term results. Short-term solutions only look good in the short term. The BBSI philosophy is to create long-term value for investors, our customers and our employees. On behalf of the Board of Directors, I want to thank all BBSI employees for the hard and successful work over the last year. We thank our investors for staying with us through this time. We believe in a bright future for BBSI because of the continued focus on sustained initiatives. James Potts, please advise us as to the mailing of notice of the annual meeting and the number of shares represented at this meeting in person and by proxy.

On or before April 26, 2021, a printed notice of the annual meeting was mailed to each stockholder of record as of April 12, 2021. An appropriate affidavit of the mailing of the notice is on file in the records of the company. There are more than [ 6,770,265 ] shares or 89.65% represented at this meeting in person or by proxy out of the 7,554,150 shares outstanding on the record date.

As more than 50% of the outstanding shares of the company are represented at this meeting, I declare a quorum present. Copies of minutes of the 2020 Annual Meeting of Stockholders as well as copies of the company's 2020 annual report and the proxy statement for this meeting are available through documents icon located in the top of the left-hand panel of your screen. I will now entertain a motion to dispense with the reading of the minutes of the prior stockholders' meeting.

I so move.

Is there -- are there -- is there any discussion? All in favor, say aye. [Voting]

Opposed, say no. [Voting]

The ayes have it. In addition to serving as Chairman of the Board of BBSI, I am the retired Managing Director of Victory Capital Management, Inc., an investment management firm, and former Treasurer of the State of Oregon. I will now introduce the other directors of BBSI, who, in addition to me, are standing for election at this meeting. Tom Carley, Chief Operating Officer and Director of Urth Organic Corporation and Co-Founder of Portal Capital, an investment management company in Portland, Oregon; Tom Cusick, Executive Adviser of Columbia Sportswear Company, headquartered in Portland, Oregon; Diane Dewbrey, Director of MBIA, Inc., a provider of financial guarantee insurance and former Director and Chair of Enventis, a telecommunications company; James Hicks, Professor of Research and Biological Sciences at the University of Southern California; Carla Moradi, Senior Vice President, Go-to-Market Transformation at Anaplan, Inc. and a software-as-a-service provider to global enterprises; Jon Justesen, Co-Owner and CEO of Justesen Ranches; and Vincent Price, Executive Vice President, Chief Financial Officer of Cambia Health Solutions, a nonprofit health insurance corporation headquartered in Portland, Oregon. Next, I'd like to introduce the officers of the company. Gary Kramer, President and CEO, Mr. Kramer is also being nominated for election as a director at this meeting; Anthony Harris, Executive Vice President, Finance and Chief Financial Officer and Treasurer; Gerald Blotz, Executive Vice President and Chief Operating Officer; and James Potts, Executive Vice President and General Counsel and Secretary. In addition to, the company's professional advisers are present here today. Charles Mello with Deloitte & Touche LLP, our independent accountants; and Mary Ann Frantz, a partner with Miller Nash Graham & Dunn, our corporate and securities counsel. Proxy materials you received describe the items of business to be considered at this meeting. The holders of a majority of the company's shares have submitted proxies voting in accordance with the Board's recommendation. However, it is necessary for us to act on each of them individually. If you have already submitted a proxy, your shares will be voted as you instructed. The polls are now open to act on the business to be presented at the meeting. The first item of business is to elect 9 directors to serve until the 2022 annual meeting, and I recognize Tom Carley.

I nominate Thomas J. Carley, Thomas B. Cusick, Diane L. Dewbrey, James B. Hicks, Jon L. Justesen, Gary E. Kramer, Anthony Meeker, Carla A. Moradi and Vincent P. Price for election as directors to serve until the 2022 Annual Meeting of Stockholders.

Company's proxy statement named 9 individuals to be nominated at this annual meeting for election as directors to fill the 9 positions of the Board of Directors. Under the company's bylaws, no additional nominations for election as directors may be made at this time. The Chair will entertain a motion for the election of these 9 directors named in the company's proxy statement.

Mr. Chairman, I move the election of the 9 nominees to serve until the 2022 Annual Meeting of Stockholders.

For reporting purposes, we must have an exact tabulation of the voting for directors. If you have submitted a proxy, your shares will be voted according to the instructions on the proxy, and you do not need to vote at this time. If you are a record holder as of April 12, 2021, you have not submitted a proxy or wish to change your vote, you may wish to vote at this meeting. Please do so by using the proxy voting site link at this time. [Voting]

Is there any further discussion regarding the election of directors? Hearing none, we'll move on to the next issue, which is the nonbinding advisory vote by stockholders on the company's compensation program for its executive officers and the second item on the agenda.

Mr. Chairman, I move the adoption of the following resolution. Resolved, that the compensation paid to our named executive officers as disclosed in the 2021 proxy statement pursuant to Item 402 of Regulation S-K adopted by the SEC, including the compensation discussion and analysis, executive compensation tables and accompanying footnotes and narrative discussion is hereby approved.