Good morning, everyone. Thank you for participating in today's Conference Call to discuss BBSI's Financial Results for the Second Quarter Ended June 30, 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 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 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 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 is being recorded and will be available for replay through August 30, 2014, starting at 3:00 PM Eastern 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 Web site 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, Alan. 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 second quarter ended June 30, 2014. The 18% gross revenue growth we experienced into the second quarter of 2014 is a direct result of BBSI's continued brand maturation in the marketplace. Complemented by a healthy organic growth from our existing client base and strong referral channels, we continue to drive new business and maintain our high client retention rate. Looking towards the second half of the year, BBSI remains well-positioned to deliver another strong year for our shareholders, despite the client backfilling process we have undertaken. We also continue to expand and invest in our infrastructure and internal talent, which we believe will help us ultimately support a much larger and mature organization. Before taking you through our financial results, I would like to mention that yesterday's earnings 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 revenue 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 with our business. Comments related to gross revenue as compared with net revenue basis of reporting have no effect on gross margin dollars, SG&A expenses or net income. Now turning to the second quarter results, total gross revenues increased 18% to $798.4 million over the second quarter of 2013, primarily due to the continued build in the Company's co-employed client count…

Thank you, Jim. Good morning and thank you for taking time to be on the call, very pleased with the results of the past three months. We have made significant progress in all areas since the beginning of 2014; however, overall shaping to be a great year. In the quarter, we added 223 PEO clients, we lost 36, four for accounts receivable or AR issues, eight were cancelled for non-AR issues and lack of Tier progression, 11 businesses sold, 13 left due to pricing competition, four companies to have moved away from an outsourcing model taking payroll in-house. This resulted in an approximate net build of 187 new clients in the quarter. Also in the quarter, we saw a 9% same-store sales build. We saw clients’ increased hours along with increase of payroll on a sequential basis in the quarter. All trends were positive. We had saw 47% of clients adding new headcount. We had saw 26% of clients reducing headcount. We saw 27% clients unchanged. We saw 69% of customers increase payroll while 30% reduced payroll and 70% of clients increased hours worked while 27% reduced hours worked. That is actually a step up from what we’ve seen in the past couple of quarters sequentially. Related to pipeline and regional growth, we continue to see strong momentum across all regions in serving the organization as to forward looking pipeline strength and general market outlook. We are not seeing change in momentum and things seem to be continuing on-track related to new client adds. Related to structural and organizational build, we continue to expand and build business unit as needed to support current and future organizational market demands. Currently, we have 33 business units supporting 52 branches. We currently have two business units being built out and are forecasted for…

and:

Thank you, sir. (Operator Instructions) At first we will go to Jeff Martin with ROTH Capital Partners

Could you touch on the client additions in the quarter and to me that seems like a really good number and it seems like it’s a good indicator for some revenue growth acceleration, maybe two or three quarters out. Could you kind of share your perspective on that? ROTH Capital Partners: Could you touch on the client additions in the quarter and to me that seems like a really good number and it seems like it’s a good indicator for some revenue growth acceleration, maybe two or three quarters out. Could you kind of share your perspective on that?

Yes, it was a very good quarter for us since dark days, we are now back, for about 4 years and I think it was probably our record in customer build. What I feel good about it is that I believe too that our underwriting standards and how we’re looking at business coming in today is probably stronger than it has ever been. So it’s not -- it’s really a reflection of stronger pipeline, more mature in relationships in the market and also a broader contribution from the overall organization. When you’re growing up and you’re smaller and emerging, you tend to get caught into more of an 80-20 rule where 80% of your market growth or your opportunity is coming from 20% of your branches and as we’re continuing to mature how we are looking at the business, and where we’re putting attention, and we’re starting to see more of our growth coming from a broader base and also markets throughout the company. And to your point of the stacking effect of clients, what we have learned in the quarter just through new modeling is that what’s added in the quarter has somewhat of a minimal effect in sequential growth. But when you stack that client base over three to four quarters, it becomes a very strong levered effect against the broader base. So our job and our goal here is not to spike it but also to build this one practice to have consistent growth over the coming quarters while at the same time not chasing markets to be able to achieve certain revenue growth levels.

And how would you characterize, and it’s the 187 net adds which is certainly the best second quarter adds you’ve ever had. In terms of the average client size or maybe if there is some comparison that needs perspective on the 187 client number in terms of client employees, is that similar on a per client basis that you’ve seen in the past? ROTH Capital Partners: And how would you characterize, and it’s the 187 net adds which is certainly the best second quarter adds you’ve ever had. In terms of the average client size or maybe if there is some comparison that needs perspective on the 187 client number in terms of client employees, is that similar on a per client basis that you’ve seen in the past?

Yes, it is. You will always have a little bit of that deviation where you have got four clients that are a little bit below, maybe that million benchmark and then you’ve got the one client that is not that mature. They are above it but overall the average size seems to still be right around the same blend.

Okay, and then glad that here you are talking about giving annual revenue and EPS guidance, sounds like you might also be giving some additional metrics for the business and may be give us the preview of if that’s the case what sort of things you are start to provide? ROTH Capital Partners: Okay, and then glad that here you are talking about giving annual revenue and EPS guidance, sounds like you might also be giving some additional metrics for the business and may be give us the preview of if that’s the case what sort of things you are start to provide?

One of the things that we have done is, I kind of look back and since I have been doing what I have done, what I do in my role, I took what I had three years ago and just continued to move it forward in a lot of ways. And as we have now matured and grown up as an organization and really up against bigger numbers too, you start to reflect on and say can you continue to look at the same things to indicate a level of visibility, something else for myself and then also how do I communicate to the market. So, when we look at just even our client count overall, we have gone through a transition over the last couple of years when we have gone from our old system of [indiscernible] HRP of being able to look at our client count differently and that we have moved from client count numbers to more of an FEIN number and how we count our client base. The challenge with it is, is that you still have movement in that base and what we are trying to assess is with that movement in the base, you have a client that is still the same client but they change FEIN number because they either sold the company or some change within the organization. So that base is moving, so when you try to go out and count how many clients you have, you are always going to have a little bit of deviation. In the quarter, we always true that up on adds and then what move out but we still have movement within that base. So, when we look at certain indicators as to where that base is, it’s always going to be a bit of…

Okay, great and then on the workers comp side could you elaborate on plant frequency and plant count trends that you said trending positively? ROTH Capital Partners: Okay, great and then on the workers comp side could you elaborate on plant frequency and plant count trends that you said trending positively?

When you look at year-over-year, the goal is that if you have a basis, when you go into your next year with growth on a relative basis you hope that your frequency and you are building your organization, so your frequency should be less than your growth rate and so when we look at the last two years and a fact we have seen a relative reduction in growth in frequency relative to growth in payrolls that’s a positive indicator. The other part is that when we look at net bills, so if you look at your overall pod open claims, you know you are making progress when your growth in open claims is again staying smaller than your overall real growth of payrolls. And so when we look at that growth in existing open claims being somewhat natural in the year almost that means that we are closing close to as many as we are opening. And that pod claims are closing which is reducing, I am giving you better indication of what your back year severity looks like while at the same time you are being overlain on the front end by new claims. So, that’s just two ways that we look at a positive trend on the go forward basis, trying to know that your pool in a sense should overtime theoretically get cleaner.

Right, thanks. And then you mentioned an outside consultants working on workers comp, I didn’t catch what exactly that project is and what you look to achieve from it. Could you elaborate on that as well? ROTH Capital Partners: Right, thanks. And then you mentioned an outside consultants working on workers comp, I didn’t catch what exactly that project is and what you look to achieve from it. Could you elaborate on that as well?

Jeff, this is Jim, so what we are trying to do is we are trying to narrow down the loss development factor and I think maybe we have touched on this in the past but typically when you get to the end of the year, end of the year of 2014 under I guess prior reserving practices that we have had in place for years, you might say that when you get to that year that ultimately developed out, you say that your total cost of year going to be four or five times what the value in that first year and so what we’re trying to do with this reserve strengthening process is to really accelerate that development time so that it’s a lot less and so that we get much more full reserve more quickly, which will give us better predictive value as to what the real cost of claims are. And it should narrow the variability of having such a wide range of possibilities on that ultimate value.

Got it. Okay. Thanks guys and congratulations on the clients during the quarter. ROTH Capital Partners: Got it. Okay. Thanks guys and congratulations on the clients during the quarter.

Thank you.

And next we’ll go to Matt Blazei with Lake Street Capital Markets.

Good morning guys, it looks like the investors are pretty pleased with the results today. A couple of questions on my end, first on the guidance for Q3, I am curious as to that the change in year-over-year growth from the 18% this year to the 14% in Q2 to the 13 in Q3, is that a function of lower expectation as in same-store and same client growth or lower expectations as a new client growth? Lake Street Capital Markets: Good morning guys, it looks like the investors are pretty pleased with the results today. A couple of questions on my end, first on the guidance for Q3, I am curious as to that the change in year-over-year growth from the 18% this year to the 14% in Q2 to the 13 in Q3, is that a function of lower expectation as in same-store and same client growth or lower expectations as a new client growth?

I would probably go to the more towards lower expectation model of same-store existing client growth. One of the things that we saw a year ago and this is going up against greater cost. I think third quarter a year ago was 13%. Right now as we got through second quarter, we see an overall base of roughly 9% growth with trends moving towards the 10% growth towards the end of the June and generally you would expect that to follow-through, but you have a little bit of gap. And if you could go to ’13 in the quarter where we just haven’t seen indication in the past with that so far so - we run it through a model and the model kind of tells us where we should be and that’s where -- but that is the biggest driver in the equation. The ad in the current quarter actually probably only have maybe an effective of third of your sequential growth that you’ll see and we just backed maybe 25% to 30%.

So the reduction sort of the sequential year-over-year comparison as an assumption in the same client growth is going to slowdown from 9%? Lake Street Capital Markets: So the reduction sort of the sequential year-over-year comparison as an assumption in the same client growth is going to slowdown from 9%?

We are actually modeling where we see same-store sales probably going to the 10% in the quarter mainly on a seasonality basis, but we’re going up against the quarter a year ago where it was 13%.

Okay, I appreciate that. And secondly, you mentioned that you were one-third of the way to your conversions with the run rate and even California, how is now that is relative to the plan and how should we look at that continuing to remainder of the year? Lake Street Capital Markets: Okay, I appreciate that. And secondly, you mentioned that you were one-third of the way to your conversions with the run rate and even California, how is now that is relative to the plan and how should we look at that continuing to remainder of the year?

I didn’t rule out the plan. We are on track. We had little late start in the year than we originally anticipated. We feel like we’ve caught up out the plan, so we were accelerating a little bit in the last couple of months. As we look to the basis to remainder of the year, you will see that similar sequential build -- we’re roughly at third today. So if you pick up another third in the third quarter and now will position us to not be haven’t take too much operational capacity to get the balanced done the last half of the last quarter. So our goal is to try to have majority of everything done by the end of November or early December.

Okay that’s what we’re looking from you. Thank you. That’s it for me. Thank you, guys. Lake Street Capital Markets: Okay that’s what we’re looking from you. Thank you. That’s it for me. Thank you, guys.

Next we will go Josh Vogel with Sidoti and Company.

In another words three to four months passed the completion of the wedding process, I think you had originally estimated about 200 million revenue that is going to be called out, was that the actual amount and can you maybe give us a sense of how much was backfill in Q2 and thus far in Q3? Sidoti & Company: In another words three to four months passed the completion of the wedding process, I think you had originally estimated about 200 million revenue that is going to be called out, was that the actual amount and can you maybe give us a sense of how much was backfill in Q2 and thus far in Q3?

Q3 I would say, it’s hard to look at Q3 because you just have a couple of weeks that you have client bill on a month to month basis. It is holding trend to what we saw in the second quarter. You get a little bit of seasonality in that July. It’s already the strong month. June is already the strong month. May is a good month. April, the day you get into August, we have vacation times and so Q3 is still green but we kind of feel pretty confident that those trends will continue to have. When we look at number of clients that are gone we have already backfill bad and more -- when we look at dollars, we’re now starting to gain on that again from where we were. The 200 million is still probably an estimate when you look at the full trough of the process. But we know that we as far as the stacking goes we’ve stacked quite now in the first quarter and then in the second quarter. And we will continue in the third quarter and then we’ll get this up front of it.

Okay, and now that’s obviously a great customer build number you put up in the quarter. Can you just talk about the timeframe between when you think of new customer, so when they are fully up and running, and then how long until an average client becomes profitable for you? Sidoti & Company: Okay, and now that’s obviously a great customer build number you put up in the quarter. Can you just talk about the timeframe between when you think of new customer, so when they are fully up and running, and then how long until an average client becomes profitable for you?

So when we look at, what is going to be added in the quarter, one way to look at it is that you said you added a hundred clients. And you said that every client averaged roughly a million bucks say you added $100 million. So the way that would be realized is on a go forward basis you would recognize the quarter of that every quarter going forward, that you’d recognize 25 million, 25 million, 25 million stacked. Now what happens though as in the current quarter, you’re only going to take roughly about 60% of that revenue at best, maybe even half is blended into the current quarter. So you really are only going to, of that what you added in the quarter, if it was a 100 client, you should probably only going to see benefit of maybe 15 million. And that’s a result of what you -- when the client comes on-board and then when you’re going to see them added in the quarter by over a 13 week period and then you have in addition to that, what payrolls or revenue levels are going to be recognized in that same quarter. And then from a profitability standpoint, it’s even harder to get down to the granularity because it stops the moving noise and if you are going to pin operating resources backup with to what that takes, it’s probably a question of first quarter new business add and then beyond that it starts to be accretive but it’s how we are building that.

Okay, that’s helpful. Now, many look at California, can you maybe just give some comments on the market penetration there, the opportunity you see in the competitive landscape and the pricing environment? Sidoti & Company: Okay, that’s helpful. Now, many look at California, can you maybe just give some comments on the market penetration there, the opportunity you see in the competitive landscape and the pricing environment?

We just added more clients from the last quarter than we have ever added in our history. So I would still say that we have quite a bit runway left. The competitive environment, there is, I will be insulting my teams in the field if I said there wasn’t any complication, I just -- we have to be good enough to be able to compete. And as far as the landscape overall, our brand continues to mature and, like I would say we’ve gone through our metamorphosis over the last three years where even the product offering today compared to even a year ago or two years ago is much stronger. It’s better, it has received better across all markets, and the brand is more mature as well. When I look at the market itself, there is a lot of market for us still to penetrate and there are still a lot of markets as well for our competitors. And as we continue to just be better of what we do and offer better product quarter-over-quarter, will continue to make headway there. This is the fourth side better results so we need to be able to have contribution from other markets and other states and we are seeing continued momentum in those areas.

Okay, just one last one on workers comp. I know you talked about the positive trends with regards to frequency in count. As we get closer to the Senate Bill deadline, have you been seeing an increase in litigated claims? Sidoti & Company: Okay, just one last one on workers comp. I know you talked about the positive trends with regards to frequency in count. As we get closer to the Senate Bill deadline, have you been seeing an increase in litigated claims?

No. I don’t think we’ve really seen a change in trends related to -- our book too is I think we steal a little bit from maybe what might be industry average just because of the way we manage and work internally with our customers. We’re not saying changes either in severity or complexity of claims relative to litigation. But that varies unlike in all the other directions.

(Operator Instructions) We will next go to Joseph Vafi with Great Gable Partners.

I was wondering on the reserve strengthening process, where there anything that particularly instigated you implementing this program to strengthen your reserves was that you just in general continuing to manage the business tighter and predictable?

I was wondering on the reserve strengthening process, where there anything that particularly instigated you implementing this program to strengthen your reserves was that you just in general continuing to manage the business tighter and predictable?

I would say the latter. We were looking at this two years ago realizing that we have some mature practice to run the business tighter to ultimately reach to greater probability of outcome and more predictable and that was the reason for the undertaking and then ultimately to us to do, trying to get ourselves to a point where we can get up on front of it and bring a more mature look and prospective to the overall company in that process as well.

Okay, and then secondly on calling of the clients, is there any kind of implication on margins as revenue kind of rebound back to, or what do you think that -- do you think your margin expansion without the call clients in place versus if the call clients were still in the base?

Okay, and then secondly on calling of the clients, is there any kind of implication on margins as revenue kind of rebound back to, or what do you think that -- do you think your margin expansion without the call clients in place versus if the call clients were still in the base?

Well, what you find out with clients and we need to continue to systematically move out clients that are using a disproportionate amount of resources relative to our operational bench. One of the things that we have been able to do a little bit is normalize our growth in business units and build an infrastructure over the last quarter and will now throughout the balance of this year which means that we are out in front it a little bit better and part of that as you move out a client that’s using 50% of the capacity of a team, you gain that back. And if you add a better, cleaner client into that mix, you are going to leverage infrastructure which is ultimately going to flow through over time more earnings to your bottom-line.

Okay and then just last quick one. I know a little discussion is already going on the pricing environment, I wonder if you could particularly address workers’ comp pricing specially in California, it does seem like there have been may be a little noise from some of the bigger guys in the market that they may be coming in and that they may be pricing a little more aggressively and I was wondering if you are seeing that at all back there in the field?

Okay and then just last quick one. I know a little discussion is already going on the pricing environment, I wonder if you could particularly address workers’ comp pricing specially in California, it does seem like there have been may be a little noise from some of the bigger guys in the market that they may be coming in and that they may be pricing a little more aggressively and I was wondering if you are seeing that at all back there in the field?

No, not really, we have continue to get pricing to where we feel we need to be and as we are going to through this transition ourselves, we are going back to our client base and capturing the margin that we need to capture. And likewise within that model is, you try to do it methodically and you try not to create disruption. Our model beyond just some of the guys that are just learning the straight intense model, we have a tremendous value add proposition on the other side of that and so we don’t really fear so as an insurance company as much as we really are coming in and creating a value-added effect for our client which is working systemically for their whole organization to run better the company. And as we are doing that I think it gives us the little bit more of a competitive edge relative to price.

At this time that concludes our question-and-answer session. I would like to turn the call back over to Mr. Elich for any additional or closing remarks.

Again thank you for being on the call. We will continue to update you as the business continues to mature and look forward to seeing you next quarter. Thank you.

That does conclude today’s conference. We thank everyone again for their participation.