Good day, everyone, and thank you participating in today's conference to discuss BBSI's Financial Results for the Fourth Quarter and Full year ended December 31st, 2013. Joining us today are BBSI's President and CEO, Mr. Michael Elich, and the company's CFO, Mr. Jim Miller. Following their remarks, we will open the call for your questions. Before we go any 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's remarks in today's conference 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 to 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 5th 2014, starting at 3:00 p.m. Eastern Time this afternoon. 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. Sir, please go ahead.

Thank you, Luke. And depending upon where you're dialing in from, good morning or afternoon, everyone. As you saw at the close of the market yesterday, we issued a press release announcing our financial results for the fourth quarter and full year ended December 31, 2013. In 2013, our referral channels and organic growth from existing clients fueled a record year of revenue and earnings. We also ended the year with a much stronger organization from a standpoint of human capital and branch development. BBSI remains well positioned for continued growth in 2014 and beyond, and we remain committed to investing in our organization to ultimately support a much larger and mature organization. Before taking you through our financial results, I'd like to mention that yesterday's earning release summarizes our revenues and cost of 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 1) more informative as to the level of our business activity, 2) more useful in managing and analyzing our operations, and 3) add more transparency to the trends within our business. Comments related to gross revenue just 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's results, total gross revenues increased 31% to $779.3 million over the fourth quarter of 2012. California, which comprised approximately 88% of our overall fourth quarter gross revenues increased 32% due to continued build in our co-employed client count and same-store sales growth. Overall PEO gross revenues increased 32% to $742.2 million over the fourth quarter of last year primarily due to the addition of…

Good morning and thank you for being on the call. 2013 was a great year for BBSI in many ways for the growth company as experience to how we have matured as an organization internally and in the marketplace. We continue to look at how we continue to mature or improve our visibility and predictability of outcomes as we continue to see a long runway of growth both top line and bottom line and to the future years coming. In the quarter, we added 156 new clients. We lost 36 clients, three due to AR reasons; nine were cancelled for AR -- or non-AR reasons risk and lack of share movement. Seven businesses sold, 11 left on their own due to pricing. Four took payroll in-house, and two left to work with the competitor. This represents the net build in the quarter of 120 new clients worked with. As Jim mentioned already, we saw a 10% build in same-store sales in the quarter. We continue to see strength within our existing client base and in the quarter. We saw 33% of our client's added headcount with 39% of our clients' reduced headcount. This is in line with what we saw year-over-year a little bit heavier. But we were taking down 36% of our client's reduced headcount a year-ago in December. 28% of our clients in the quarter were unchanged. 59% of our clients increased payroll, down from 60% last quarter, roughly flat. We saw 51% of our clients increased hours worked while 45% of our clients reduced hours worked. In comparison to third quarter we saw 51% of our clients increased hours worked versus 50% in the third quarter, somewhat flat again. We did notice some softness in late October and early November, most likely as a (hollower) from the…

Thank you. Ladies and gentlemen, we will now conduct a question-and-answer session. (Operator Instructions) Your first question today will come from the line of Jeff Martin of ROTH Capital Partners. Please go ahead.

Thanks. Good morning, Mike.

Good morning, Jeff.

Good morning.

Mike, could you go into the guidance, I know we have talked about this in a call in the past, but I think it's useful for people to understand how you derive your guidance? I think my recollection is you take the last couple of weeks of the quarter and basically flat line that in terms of your forward guidance. Have you done that in the case of first quarter guidance?

Yes. So, here is what we do. We look at our run rate, and then we translate that back to our daily run rate. And so, we look at what we do in the week. We divide that by five. Then we get a daily run rate. And then we extrapolate that forward over, say, a 21 or 22-day month. And then, ultimately over -- like in this quarter a 64-week our day run for the quarter. The problem that we have in January is that as you come out of December, you have so much troughs, it's hard to use any days in December as a guide to really what's going on in January. So when you come into January, you take a baseline in January in the first week and the second week, and it kind of gives you a degree of your trend of which you now go back and you determine your daily run rate. The problem with this quarter was that when we came out of December into January, normally you kind of have a pattern where you go a high week, a low week, a high week, a low week and then every now and then it will shift, and you will either a high week, a low week, a high week or you will have a low week, a high week and a low week. So see, your patterns just fall out. So, in the beginning of the quarter we saw actually when we came out into the quarter with a high week. And then we saw two low weeks. And without having a real good idea what the next week, we estimate that it's a high week, but without having an idea where that is, it kind of makes it difficult to say, "All right, this is the trend that we are on." Complicated also by December to be on a bad month to get any kind of trend on, so when we looked at the quarter as a whole, we have about three weeks of data to extrapolate on. And within those three weeks, we've had a little bit of trough. So, I'd say that ultimately we've tried to lean on the side of being conservative, and that those three weeks aren't necessarily making a trend. And that was one of the reasons why we did so much research back into the organization to see, okay, anecdotally, are we seeing any trend change, are we seeing any softness in the market, are we seeing any additional or new competitive pressures? And we're not. Our hope and our process is that, that we'll just work through this in the next few weeks and we'll get back on track. But it’s nothing else that keeps our eye on the ball and make sure that we're focusing on the right thing, long-term.

Okay. That's very helpful. And then, on the [claim signings] [ph], how did renewals go in January, I mean January and July in my understanding are the two big renewal months of the year with some -- we do renewals every month of the year, but those are the two big ones, if you could give an idea how the January renewal went?

We see a spike in January, but it's equivalent to the same type of spike that we might see in April 1, October 1, July 1. And over the years, it's normalized itself quite a bit because we've found efficiencies [co-operations] [ph] and being able to bring clients in on a consistent basis. Today, we're not seeing any issue with renewals in January. And we seem to be rolling through fine. And even going on, and looking at February, we are not seeing any trough or headwinds related to it, that I'm aware of.

Okay.

Yes.

And then, in terms of your transition over to ACE, my understanding is you plan on adjusting pricing accordingly, could you comment on that and give your level of conviction in successfully passing along any drag on profitability that would otherwise [tap in] [ph] if you didn't adjust pricing?

Yes. If you look at our baseline, today we accrue -- and I say accrual, because there are some expenses that are going into the IBNR bucket relative to the accrual for future liabilities, and then there are other expenses like risk management, [TBACs] [ph], and a litany of other things that are hard expenses. But when we look at the total cost of workers' comp in our program, it's running around 4.25%. If you look at the added frictional costs, we estimate -- and this is probably ballpark high number, but it's anywhere from 25 to 30 basis points over and above the 4.25. So, if you looked at the fully loaded 2015, our cost structure would increase roughly 5% to 4.5 to 4.55, given all of our estimates. And that's always as a percentage of payrolls. So it's normalized to match what it is you are getting from the market. Then, our plan is as we go through our renewal; we're going to look at, first of all, new clients coming in will be definitely priced at the [stepped up] [ph] basis in the model. And then, we'll look at where we may be out of whack or if we need to capture more dollars from existing clients, but our primary objective there is not to create adverse selection in the process and probably normalize that increase to expense where we may split the difference over time.

Okay. And then, what happens with the safety incentive program, in the past clients have been able to earn back part of their workers' comp premiums? Is that still in place or does that change?

Still everything is staying in place. In fact, one-to-one, the client itself, the relationship with the client should not change. And ultimately, they're receiving from a -- they are going from a letter of self-insurance as their proof of insurance to a paper that has a rating behind it. So, it does add integrity to the overall product as well.

Okay great. Thanks, Mike. Thanks, Jim.

Thank you.

(Operator Instructions) Your next question will come from the line of Josh Vogel of Sidoti & Company. Please go ahead. Josh Vogel - Sidoti & Company: Thank you. Good morning, Mike and Jim.

Good morning.

Good morning, Josh. Josh Vogel - Sidoti & Company: I just want to make sure I understand this completely, and I think there is a little confusion out there between the arrangement you have with ACE and the workers' comp reserve adjustment. Those are mutually exclusive events. You didn't have to increase the reserve to satisfy new requirements with ACE?

Correct. Josh Vogel - Sidoti & Company: Okay. Because I just think there is a little bit of confusion out there. Now, building off one of the earlier question with regards to pricing, Jim mentioned some frictional costs, and you said that you may have to split these costs going forward. Have you been having any dialog with your clients, ahead of this ACE arrangement? One of the reasons I ask, because I've noticed that throughout the year, Q1 through Q4, you were seeing -- I think we went from one to three to seven to 11 clients leave because of pricing. I'm just curious what was driving that?

Yes. I don't think that -- I mean you look at 11 clients or one or three or seven. I think that typically if you're going to leave [that might be your end of] [ph] year, related to pricing and we'll always see a spike there. We'll also see a spike in companies that sell typically either around at July 1 or January 1. So, those are the two areas that you'll see more of. One of the things that we did in bringing in our payroll system is that where there was maybe a little bit of flow to cut tighter in the last year. And I think the companies that were a little tighter in cash flow may have also made decisions, or maybe we didn't match up well to them. But we have not seen, you really look at even 39 clients leaving over what our total base is. Even if it was hundred clients, it wouldn't be a significant percent relative to what we're bringing in on the yearly basis. The one thing I never want to do is get to a point where we are so worried about a client leaving that we're going to compromise the integrity of our overall product. And we'll continue to look at that as far as calling our base. And that's also a component of a capacity utilization. One of the things that we look at when we look at building a business unit is saying, "Okay, what do we have an 80/20 rule or a 90/10 rule, we've got 10% of our clients that have taken up 90% of our capacity." And when we look at our operating metrics, I'd rather read out the 10% that are either, that we're not making any money on or that they are not efficient clients. We're just not a good match for it. But our first goal is to make sure that we're doing our part on that end. I guess the long and short of it is that as we've gone through the last year and you grow it plus 30% for eight quarters in a row and you literally double the size of already a pretty large company. You got to go through a little bit of a vetting process from time-to-time. And that's why I would attribute it a little bit to the growing pains that we've experienced as we are trying to grow into our new shoes, as we are running at a very much higher basis. Josh Vogel - Sidoti & Company: Okay. That makes sense, thank you. Now, prior to the arrangement with ACE, when you were going out trying to win new business, are you getting any pushback from potential clients because they were concerned about the upcoming Senate Bill?

Yes. We have really good relationships with our clients. And that's one of the real keys to our product offering in our niche. I would say that there has probably been a little bit more of a cross trend from those, maybe trying to sell against it. And we have seen more noise than normal around just competitors that are coming into the market trying to say that "We're going to go out of business. So, we're not going to be around or -- just a litany of other things that go on a competitive landscape. And that's probably what we've seen more than anything. But our clients for the most part are -- we have great tenure with our clients. We have great product offering. And today looking at our product offering, it's not just about insurance, it's about a lot more of what we really do for our clients. Insurance is an add-on. That's a compliment to what we do relative to the economics of the model, and ultimately the real focus of our business is to advocate for the business owner success and bring tools that allows for their efficiencies and their predictability within their own business model. And that's where driver is in our model. Josh Vogel - Sidoti & Company: Okay. Is there still a chance that you explore other options with regard to the Senate Bill considering the ACE arrangement only runs through early 2015, and then I know you do a renew annually, but I'm just curious if other options were still on the table?

One of the things I said, the strength of our organization is that we're very adaptive. And we've been around this for long time. I mean I've almost been in this business close to 20 years myself. I've made mistakes and I've never gotten anything right. So with that, comes a lot of experience. When I look around on my team, we probably -- I don't even want to try to count how many hours (inaudible) we have? We're going to be very adaptive. We're going to be very opportunistic to do in the best interest of the company and best interest of our customer on a go-forward basis. And we're never done looking for ways to improve or reduce to take risk out of the model. Josh Vogel - Sidoti & Company: Okay. And thanks for taking my questions. I'll jump back in the queue.

Thank you.

And ladies and gentlemen, at this time this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Elich. Please go ahead.

Again, I really appreciate everybody continuing to follow us, stay on the call. I really do encourage you to do it. If you have questions, please ask. We've always made ourselves very open to questions, very available, and again, we're learning as we go through and we operate at higher levels. We feel like we know probably 95% of what we need to know, but they are still at 5% that will always be out there as we mature as an organization. I know for sure that our best days are still ahead, because we haven't even begun to recognize a lot of the work that we've been getting done in the last couple of years. So, look forward to the industry. Thank you.

And thank you. Ladies and gentlemen, again we thank you for your participation. And you may now disconnect your line.