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Partners in Profitability… Roth Capital Partners 22 nd Annual OC Growth Stock Conference March 16, 2010.

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Presentation on theme: "Partners in Profitability… Roth Capital Partners 22 nd Annual OC Growth Stock Conference March 16, 2010."— Presentation transcript:

1 Partners in Profitability… Roth Capital Partners 22 nd Annual OC Growth Stock Conference March 16, 2010

2 Partners in Profitability… 2 Forward Looking Statements The issues addressed in this presentation may involve forward-looking statements which, along with other information presented that are not historical facts, are subject to a number of risks and uncertainties. Actual results may differ materially. Please refer to our 2009 Annual Report on Form 10-K and to our other SEC filings for more information about the risks and uncertainties that could cause actual results to differ.

3 Partners in Profitability… 3 Key Investment Highlights Leading provider of HR management services Well-respected service provider in large, underserved market –Focused on small and medium-sized businesses –Scalable, substantial operating leverage Positioned for growth opportunities –Pipeline of new business for organic growth –Financial capacity to seek strategic acquisition opportunities Highly predictable and recurring revenue stream –Most contracts are annual with automatic renewals –Industry-leading client retention rate –Staffing clients are large and reoccurring Strong value proposition for companies seeking efficiencies in operations Experienced management team

4 Partners in Profitability… 4 Source: Staffing Industry Report, updated and issued every 3 years Projected 2010 U.S. HR Industry: $165 billion BBSI Revs 89% BBSI Revs 11%

5 Partners in Profitability… 5 Overview of BBSI Target Client: PEO: 20 to 200 employees per business Staffing: Large employers with seasonal and human capital fluctuations Service Delivery: 44 branch offices (10 states) Sales Model: Consultative sales model networked through sales people, client referrals, brokers, financial planners, CPAs, etc. Financial: 2 009 EPS: $(.46) Gross Revenues: $1.02 billion Net Loss: $4.8 million

6 Partners in Profitability… 6 Branch Offices in 10 states CA 16 OR8 WA4 ID3 AZ2 UT4 CO 3 MD 2 DE1 NC1 Geographic Footprint

7 Partners in Profitability… 7 Why Seek a Partner for HR Management? Reduce the complexities of being an employer Focus on core business Restructure core work force - Flexibility and economics of “just-in-time” employees Improve operating efficiencies Allows businesses to:

8 Partners in Profitability… 8 Work Comp Premiums Save 25-30% Future Cost Protection Employee Turnover Recruiting Drug Testing Screening Workplace Safety Risk Mgmt Claims Mgmt Drug Testing Regulatory Filings Full Compliance Proper Hiring Procedures Discrimination Wrongful Term. Harassment Suits Proactive Training Policies & Procedures Coaching Counseling Timely Tax Payments BBSI Solves HR Problems Benefit Programs Competitive Employee Retention Cost Effective Qualified Employees Search Compensation Advice Interview Homeland Security Issues Data Base Screening

9 Partners in Profitability… 9 HR Management Services PEOStaffingPermanent Placement Full HR mgmt Risk mgmt HR consulting Temporary Long-term On-site mgmt HR consulting Search Recruit Place HR consulting BBSI Branch Blended Services Platform Preferred Payroll Payroll Processing

10 Partners in Profitability… 10 Why Outsource HR?

11 Partners in Profitability… 11 Report Hours Compute W/H Deductions Garnishments Issue Checks Direct Payroll Deposit Federal, multi- state P/R tax compliance Account Reconciliation Reports Vacation Pay Sick Pay Check Delivery Cost Accounting W-2s New Hire Reporting Advertising Recruiting Screening References Hiring Job Descriptions Reviews I-9 W-4 ADA FMLA DOL INS Employee Manuals Written Warnings Workplace Conduct Terminations Unemployment Claims Supplemental Staffing 401(k) Cafeteria Plan Credit Unions Health Insurance COBRA Claims Management Rate Negotiation Regulatory Compliance Supplemental Life Disability Dental Vision EAP ERISA HIPAA OSHA Federal & State Compliance Environmental Regs Safety Training Safety Manuals Safety Walk- Throughs Job-site Visits Supervisor Training Safety Meetings Hazard Training Accident Investigation Insurance Fraudulent Claims Large Premium Deposits Costly Premiums Claims Management Loss Runs Human Resources Payroll Admin Employee Benefits Safety Services Workers’ Comp HR Responsibilities WITHOUT BBSI

12 Partners in Profitability… 12 PEO Clients Are Able to Outsource Their HR Functions Report HoursNew Employee Reporting Reviews Written Warnings Disciplinary Notices Safety Meetings OSHA Human Resources Payroll Admin Employee Benefits Safety Services Workers’ Comp Report Incidents to BBSI HR Responsibilities WITH BBSI

13 Partners in Profitability… 13 Growth Strategy Support, strengthen and expand branch office operations Increase client utilization of our deliverables –Focus on impacting client operational efficiency –Increased flexibility through Preferred Payroll Penetrate new markets –Expand our geographic presence following our current customers’ expansion Continue to explore acquisition opportunities

14 Partners in Profitability… 14 Operating Strategy High touch deliverables Decentralized operations – Customers are within 50 mile radius of branch office >We are local – Hands-on with our customers with both risk management and human resource professionals >Key competitive leverage point Economic incentives for management employees on financial performance goals

15 Partners in Profitability… 15 Name and Title Years of Industry Experience Experienced Management Team Bill Sherertz President, CEO & Chairman 39 Gregory Vaughn Vice President - IT 14 James Miller Vice President & CFO 16 Michael Elich Vice President & COO 15

16 Partners in Profitability… 16 Financial Themes Strong Business Capabilities –Diversified revenue stream from PEO, staffing services, permanent placement and preferred payroll processing –Serve multiple industries –Recurring revenue stream –Continue to develop new markets Strong Cash Generating Capabilities –Minimal capex Strong Balance Sheet –No bank debt –Current ratio 2 to 1 –$5.53 per share in cash and securities

17 Partners in Profitability… 17 Highlights of 2009 and 2008 Gross revenues -$1.02 billion, down 5.6% from 2008 Net income -Net loss of $4.8 million, vs. net income of $6.3 million for 2008 -EPS: ($.46) vs. $.56 for 2008 Cash & securities $57.9 million at 12/31/09 90% customer retention Matured management Continuation of expansion and diversification of client base

18 Partners in Profitability… 18 Acquisition of First Employment Services, effective 2/4/08 -2 offices in Phoenix area Self-insured workers’ compensation coverage -Added self-insurance in Colorado -Formed insurance company in Arizona Highlights of 2009 and 2008

19 Partners in Profitability… 19 PEO End of Year Customer Counts

20 Partners in Profitability… 20 Annual Gross Revenues ($ in millions)

21 Partners in Profitability… 21 Annual EPS $1.44 2.185 mm additional shares o/s August 2005 $1.40 $0.56 Note: 2008 included a $.32 per share impairment charge on investments Note: 2009 included a $.72 per share charge for a change in estimate to the workers’ compensation reserves $(0.46)

22 Partners in Profitability… 22 Key Balance Sheet Items Assets Liabilities Cash and marketable securities $57.9 12/31/0912/31/08 Total Assets $172.1 Workers’ compensation claims Stockholders' equity Total Liabilities and Equity ($ in millions) $60.2 $170.1 $ 19.7 110.6 $170.1 $ 32.2 100.1 $172.1 & safety incentives

23 Partners in Profitability… 23 Key Differentiators Proximity/closeness to our customers –Proactive HR management services Industry-leading customer retention rate of 90% Efficient provider of integrated services –PEO –Staffing –Permanent placement –HR administration –Risk management –Preferred payroll Decision makers at Branch Offices –Management talent

24 Partners in Profitability… 24 Key Investment Highlights Leading provider of HR management services Well-respected service provider in large, underserved market –Focused on small and medium-sized businesses –Scalable, substantial operating leverage Positioned for growth opportunities –Strong infrastructure –Financial capacity to seek strategic acquisition opportunities –$5 per share in cash and securities, no bank debt Recurring revenue stream –Contracts are annual with automatic renewals –Industry-leading client retention rate –Staffing clients are large and reoccurring Strong value proposition for companies seeking efficiencies in operations Experienced management team, strong infrastructure

25 Partners in Profitability… Roth Capital Partners 22 nd Annual OC Growth Stock Conference March 16, 2010


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