Good morning everyone and thank you for participating in today’s conference call to discuss BBSI’s Financial Results for the Fourth Quarter and Full Year ended December 31, 2014. Joining us today are BBSI’s President and CEO, Mr. Michael Elich, and the company’s CFO, Mr. Jim Miller. Following their remarks we’ll open the call for questions. Before we go further, I would like to take a moment to read the company’s Safe Harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. The Company remarks during today’s conference call may include forward-looking statements. These statements along with other information presented that are not historical facts 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 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. I would like to remind everyone that this call will be available for replay through March 4, 2015, starting at 3 PM Eastern this afternoon. And 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.barrettbusiness.com. Now, I would like to turn the call over to the Chief Financial Officer of BBSI, Mr. Jim Miller. Please go ahead, sir.

Thank you, Vickie. And depending upon where you are dialing in from good morning or afternoon everyone. As you saw the close of the market yesterday we issued a press release announcing our financial results for the fourth quarter ended December 31, 2014. The 19% gross revenue growth we experienced in the fourth quarter 2014 reflects the positive influence our management platform had on our clients businesses as well as the continued development of our brand name and a growing number of our markets. Complimented by healthy organic growth from our existing client base and strong referral channels we ended the quarter at the end of our expectations. Over the course of the last year we continue to strengthen our operations while maturing our entire organization. We’ve taken significant steps to strengthen our workers’ compensation reserves and increase our financial capacity to support the Company and our growing client base. These steps along with the momentum we experienced in the fourth quarter positions BBSI for a strong 2015. Before taking you through our financial results I would like to mention that yesterday’s earning release summarizes our revenues and constant revenues on a net revenue basis as required by Generally Accepted Accounting Principles or GAAP. Most of our comments today however will be based upon gross revenues and various relationships to gross revenues, because we believe such information is one, more informative as to the level of our business activity; two, more useful in managing and analyzing our operations; and three, adds more transparency to the trends within our business. Comments related to gross revenues as compared to a net revenue basis of reporting have no effect on gross margin dollars, SG&A expenses or net income. Now turning to the fourth quarter results, total gross revenues increased 19% to 931.1 million…

Good morning and thank you for being -- taking time to be on the call. Very pleased with the results for the past three months where we have made significant progress in 2014. We saw progress through the growth and maturing of our brand in all market through the maturing of our organizational structure and the culture of BBSI compliment completion of -- and progress in several initiatives under taking during past three years. Could say that '14 will not be reflected on as an easy year, but I believe the time will show it as a turning point with us emerging as a much better company due to the challenges we had to face. With that said we would not be the company we are without partners including our clients our referral partners, many companies who support our interest with special banks both Wells Fargo and ACE Insurance. Moving forward in the quarter we added 229 new PEO clients. We lost 62 clients, seven due to account receivable; nine were cancelled or left for non-AR issues and lack of Tier progression. 21 business have sold or closed and 25 left due to price to competition or companies having moved away from the outsource model to take payroll in-house. This represents an approximate net build in our quarter of 167 new clients. With same-store sales we saw an increase of 9% related to hiring, increased in hours worked and wage inflation collectively. Slightly ahead of what we would have expected in the past three months. As the snapshot we saw sequentially quarter-over-quarter 37% of client’s added headcount, 38% of clients reduced headcount, 25% were unchanged. We saw 62% of clients increased payrolls while 30% reduced. 70% of clients increased hours worked while 37% reduced hours worked. Related to pipeline and…

Thank you [Operator Instructions]. And we will take our first question today from Jeff Martin with Roth Capital Partners. Please go ahead.

Mike or Jim, could you expand on the workers compensation expectation as a percentage of gross revenue for ’15. I caught that Jim said 4.8% to 5% of gross revenue and I think previously the discussion was 4.8. Is that tied to the cost for the surety bond and letters of credit? Or am I misreading that it’s not an extension of a higher-end to that range.

You are right. It’s really related to the increased cost for the surety bonds and letters of credit as the accrual rate for claim loss is within that is at similar rate that we have talked about when we mentioned 4.8%, I think probably at the end of 3Q.

Is there something that trend is down throughout the course of the year, and what could swing it from one-end of the spectrum to the other?

Certainly we expect that to strand trending down, probably only slightly this year, obviously with increased volume the effect of those costs which are really fixed will be diluted somewhat. As we get out in the 2016 and that California liability continues to be in a runoff mode, we will see those cost significantly decrease in the coming year.

Okay, so those are tied to the BBSI underwritten policy it’s not the ACE policies. Is that right?

Correct.

And then can you give some insight into the workers comp claims trends and how that might affect the expense accrual maybe in ’16 and beyond. And you are tracking better than expected. Are these trends are starting to emerge with sounds like better reliability, is that something that you see may come down year from now?

I think there is certainly the evidence that we are seeing in discussions that we have with our actuarial consultant as well as our actuary indicate that they are certainly much more higher likelihood of cost coming down and then going up. So we are optimistic as we go throughout 2015 and then in the 2016 and as that loss data starts to reach what I would characterize as a new normal. I think we will see the potential benefit of costs coming down on a relative basis.

Okay, and then do you have an expectation on how quickly you will repay the term loan?

Well the term loan scheduled payments the first one is 3 million at the end of second quarter of 2015 and then there is another 7 million at the end of September and 15 million at the end of 2015. And with the balance of the remaining 15 million pay throughout 2016.

Okay, so 25 million principle reduction in ’15. Is that right?

Correct.

And then it looks like staffing had a really good quarter, is that something you are putting more emphasis on at all. I know that’s not an area you spent a lot of resources in trying to grow that. Some insight there would be helpful.

I will come on that. We will continue to build infrastructure to support both lines of our business. I think it’s more as branches get bigger staffing or at least recruiting for staffing customers as well as existing PEO clients is natural build out for us. So we continue to invest in those areas. And likewise we do have a strong staffing presence in the Mountain States. Regionally Northwest and then also California continues to emerge in those areas. But we see staffing as a tool to compliment the overall offering that we have. And so it grows as our brand grows.

Okay, and then you touched on some branch expansion locations to this year then to next year are too recent and then to next year. And it looks like you are pushing the East Coast a bit more. Is that a fair statement?

As much as we have seen expand market presence and branches on the West Coast than in California over the last couple of years. Our expansion model is really that of a tuck in and we’ll look where existing markets are starting to pull us to new markets and then will add capacity to optimize efficiencies in the existing branch and to capitalize on new market. So with the growth that we have really seen on the East Coast that’s where we will probably see a majority of the expansion to physical branches in the next year, with Charlotte being one and couple in the Northeast that is ear marked but not necessarily hard wired yet. And then more mature market was continuing to see expansion into business units those are equally additive to capacity of the organization.

And we'll now go to Matt Blazei with Lake Street Capital Markets. Please go ahead.

Hello Mike and Jim, nice job on the quarter with all the distractions, very pleased to see that. I had a question one of your comments regarding your closer of some pre 2012 claims. Can you walk through what exactly that means again and talk about what the credit -- how we should think of the credit that you’re getting back from the -- where are those credits coming from and where they go?

Sure when we started this reserve strengthening process the goal in mind was to look at the years that were mature enough and we started this process in 2012 happen to be the newest of those older years. So we focused on 2012 and prior to go through that strengthening process with the idea with the claims being fully strengthen it would give us a good solid basis to begin to analyze what we might expect for future years and really give us a good basis to go on. And a significant to the credits that we're seeing is that I think it indicates that when our claims management teams went through and fully strengthen these 2012 and prior claims they did it very conservatively and that’s why we're seeing the credit, meaning that in the cases we've seen so far that have closed, they over shot the market that which when you go through a process like this you trying to get as close to the ultimate settlement as possible. But in this case you'd rather be on the high side than the low side and so that’s what we're seeing with each credits coming back.

And where does the credit go on your balance -- I mean does it shift to an asset, how do we it as investors?

So it actually as it flows through the process it will decrease the liability. And back into essentially IB&R.

And you said it was 38% of the identified pre 2012 claims.

Yes so we have about 1800 open claims when we started the process from those 2012 and older years and we went through and I believe there were about 500 claims that did not need any strengthening done. So there was a book of about 1300 claims that went through the strengthening process. So what we're saying is to date in the latter half of 2014 we had closed out 492 of those claims and which resulted in credits of the 5.8 million meaning that they came in 5.8 million less than we had originally thought following that strengthening process.

And is there a goal in 2015 moving through that remainder.

This is Mike, I would say that yes we will continue to be aggressive and how we look at those claims we'll close them as the opportunity presents itself it's not a matter of just us decided it's time to close them the timing of the injured worker deciding that they're willing to settle or the claim finally closes out or we can reach settlement with legal process to get those to close out. So we'll continue to see incrementally an aggressive position on getting those closed up. We're not going to sell the farm either just to get it done and we feel pretty good today based on early evidence that we have that we're pretty good spot as it relates to as those claims are closing out that we're not having to add reserves to them for the most part. There is a few here in there that we've had that reserves to but for the most part they've been fully strengthen and then we're seeing the credit to come back. I would probably say that you've got, when we say 2012 in prior year talking about 2012 and 20 years prior. So there is a claim in 2006 it might still be there two years from now and we can to get it done but we feel that at least at this point that we estimated that liability to the best of our ability or with the best knowledge that we have today and so far that’s proving to be conservative.

We'll take a question from Bill Dezellem with Titan Capital Management.

[Audio gap] to have you circle back to your discussion about building your people your management et cetera and I'd like to talk if you could please about the historical approach that was taken and how that is different today and what changes if any -- or tweaks maybe it would be the right term were made in 2014 specifically? And how long do you think it might take for those to show through?

I would say we always grew up as very much ground up, field based operations focused on the development of our organizational bench and our structure. But we did, we grew up as an entrepreneurially-run company, and that was great. And it got us to the billion mark as we came into 2011 - 2012 we realized that we had to mature into an organization that was professionally managed and as we had to go through those transitions we have to look at structure, completely through the organization. We also used experience of what was working, where we were seeing inflection points in braches to realize okay, we’ve got to adapt to this. So in the last two years -- it’s really being going on for several years I’d say in the last two years we’ve built systems and methods for putting attention towards how we develop individuals specifically as they are coming in and how we train and mentor to establish a consistent bench across the organization, how we continue to develop our leadership bench, one of the things that I found myself is I went from having 95 direct reports to five direct reports -- is that you can put people in place, but then there is another turn of the wheel that you have to look at that it’s about transferring wisdom, insuring the culture and the way you look at the business is consistent. So we’ve put an inordinate amount of time, in fact that’s where I put probably 90% of my focus. How are we building our infrastructure, what’s the tone from the top, how was that resonating throughout the organization and then what are our methods to insure that we are getting through and that we’re having consistency throughout the organization? And we have…

That’s very helpful. And to take that one step further, will we, over the course of the next year or two, either see expenses increase as a result of these efforts or decrease because you’re becoming more efficient? Or do we see revenues -- revenue growth rates accelerate -- which seems unlikely, given the high level you’re at -- but is that potentially an outcome? Or how do we see this manifest, other than just being a better-run organization?

I think what you’ll see the growth rate itself will continue to even if it’s just normalized to where we are at, we’ll continue to become more predictable and much more sustainable I think that equally we put, if you look at just last three years the dollars that we pull back in the SG&A to build the infrastructure and more mature itself to where we are at I think you’ll start to see that normalized a bit. So as we take the next turn and grow to that next level we’re getting to -- for instance if we were to double the organization you will not see SG&A overhead the double in line with that. So we’ll begin to see some leverage in the organization, probably see it start to happen in 2015 and then into 2016, 2017. We should continue to see it follow through on that if we execute the plan.

[Operator Instructions] And we do have a question from Bill Nasgovitz with Heartland. Please go ahead.

So just a question I am sorry I might have missed this. You said 2012 how many claims did you settle in the year 148 and that leads how many left to settle?

This is Jim. During 2014 we settled or closed 492 of a total of 1800 claims for those 2012 and prior years. The 148 was the number of claims closed during the fourth quarter.

So leaving something around 1,300 claims?

Right and of those 1300 there was about 500 or so of those claims that needed no reserve strengthening and so it’s really just I guess probably the remaining 800 or so claims that went through that reserved strengthening process. And I guess key delineation there is that the claims that went through that reserved strengthening process for the ones that typically had more unknown component to them, and where they needed to undergo increases to get to full expected value.

And that does conclude our question-and-answer session. I would like to turn the call back to Mr. Elich for any additional or closing remarks.

I just want to thank everybody for taking time to be on the call. Thank you for sticking with us. I would say that as you temper steel it’s never a pretty process and its -- but steel is never tempered is never strong enough to hold up to stress. And one of the things that I would say is to compliment who we are and what we’re about is that we’ve been tempered over the many years. 2014 served as a year temper us a little bit more. And today we are pretty strong company. And for those that are critics of us that would say -- whatever they might say I think that they might be surprised overtime as to what we are really about as they were in the story and we execute the plan. So thank you for taking your timing this morning.

Thank you very much. That does conclude our conference for the day. I would like to thank everyone for your participation.