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

Partners in Profitability…

Roth Capital Partners 22nd Annual OC Growth Stock Conference

March 16, 2010


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

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

Temporary / Supplemental

46%

PEO (Professional Employer

Organization)

47%

Search & Place7%

Outplacement

Source: Staffing Industry Report, updated and issued every 3 years

Projected 2010 U.S. HR Industry: $165 billion

BBSIRevs 89%

BBSIRevs 11%


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: 2009 EPS: $(.46)Gross Revenues: $1.02 billionNet Loss: $4.8 million


6

Branch Offices in 10

states

CA 16OR 8WA 4ID 3AZ 2UT 4

CO 3

MD 2DE 1NC 1

Geographic Footprint


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

Work CompPremiums

Save 25-30%

Future Cost

Protection

Employee Turnover

RecruitingDrug

Testing

ScreeningWorkplace Safety

Risk Mgmt

ClaimsMgmt

DrugTesting

Regulatory Filings

Full Compliance

Proper Hiring

Procedures

Discrimination Wrongful Term.

HarassmentSuits

ProactiveTraining

Policies&

ProceduresCoachingCounseling

TimelyTax

Payments

BBSI Solves HR Problems

Benefit Programs

CompetitiveEmployeeRetention

Cost Effective

Qualified Employees

Search

CompensationAdvice

InterviewHomeland Security Issues

Data BaseScreening


9

HR Management Services

PEO Staffing Permanent 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

Why Outsource HR?


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

RateNegotiation Regulatory Compliance

Supplemental Life

Disability

Dental

Vision

EAP

ERISAHIPAA

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 PremiumDeposits

Costly Premiums

Claims Management

Loss Runs

Human Resources

Payroll Admin

Employee Benefits

Safety Services

Workers’ Comp

HR Responsibilities WITHOUT BBSI


12

PEO Clients Are Able to Outsource Their HR Functions

Report Hours New 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

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

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

Name and Title Years of Industry Experience

Experienced Management Team

Bill SherertzPresident, CEO & Chairman

39

Gregory VaughnVice President - IT

14

James MillerVice President & CFO

16

Michael Elich Vice President & COO

15


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

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

• 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

PEO End of Year Customer Counts

600

846

1,129

1,239

1,332

1,551

0100200300400500600700800900

1,0001,1001,2001,3001,4001,5001,6001,700

2004 2005 2006 2007 2008 2009


20

Annual Gross Revenues ($ in millions)

$543

$766

$1,040$1,116 $1,081

$1,020

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

$1,100

$1,200

2004 2005 2006 2007 2008 2009


21

Annual EPS

$0.79

$1.21

($0.70)($0.60)($0.50)($0.40)($0.30)($0.20)($0.10)($0.00)$0.10$0.20$0.30$0.40$0.50$0.60$0.70$0.80$0.90$1.00$1.10$1.20$1.30$1.40$1.50$1.60$1.70$1.80$1.90$2.00

2004 2005 2006 2007 2008 2009

$1.44

2.185 mmadditional

shares o/s August 2005

$1.40

$0.56

Note: 2008 included a $.32 per share impairment charge on investmentsNote: 2009 included a $.72 per share charge for a change in estimate to the workers’ compensation reserves

$(0.46)


22

Key Balance Sheet Items

Assets

Liabilities

Cash and marketable securities $57.9

12/31/09 12/31/08

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

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

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


Roth Capital Partners 22nd Annual OC Growth Stock Conference

March 16, 2010

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