<SEC-DOCUMENT>0000892917-12-000056.txt : 20120215
<SEC-HEADER>0000892917-12-000056.hdr.sgml : 20120215
<ACCEPTANCE-DATETIME>20120214215930
ACCESSION NUMBER:		0000892917-12-000056
CONFORMED SUBMISSION TYPE:	DEFA14A
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20120215
DATE AS OF CHANGE:		20120214
EFFECTIVENESS DATE:		20120215

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BARRETT BUSINESS SERVICES INC
		CENTRAL INDEX KEY:			0000902791
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-HELP SUPPLY SERVICES [7363]
		IRS NUMBER:				520812977
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEFA14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-21886
		FILM NUMBER:		12614107

	BUSINESS ADDRESS:	
		STREET 1:		8100 NE PARKWAY DRIVE
		STREET 2:		SUITE 200
		CITY:			VANCOUVER
		STATE:			WA
		ZIP:			98662
		BUSINESS PHONE:		(800) 494-5669

	MAIL ADDRESS:	
		STREET 1:		8100 NE PARKWAY DRIVE
		STREET 2:		SUITE 200
		CITY:			VANCOUVER
		STATE:			WA
		ZIP:			98662
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEFA14A
<SEQUENCE>1
<FILENAME>bbsidefa14a120214.htm
<TEXT>

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<p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><font face=Arial lang=EN-US style="font-size:11.0pt;letter-spacing:-.1pt;">UNITED STATES <br>
SECURITIES AND EXCHANGE COMMISSION<br>
   WASHINGTON, D.C. 20549</font></p>

<p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><font face=Arial lang=EN-US style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>

<p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><font face=Arial lang=EN-US style="font-size:11.0pt;letter-spacing:-.1pt;">SCHEDULE 14A<br>
(RULE 14a-101)</font></p>

<p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><font face=Arial lang=EN-US style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>

<p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><font face=Arial lang=EN-US style="font-size:11.0pt;letter-spacing:-.1pt;">Proxy Statement Pursuant to
Section&nbsp;14(a) of</font></p>

<p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><font face=Arial lang=EN-US style="font-size:11.0pt;letter-spacing:-.1pt;">the Securities Exchange Act of
1934 (Amendment No.&#160;&#160;&#160; )</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>

<div align=center>

<table cellpadding=0 cellspacing=0 border=0 style="border-collapse:collapse;width:100%;">
 <tr>
  <td colspan=2 valign=top width=100% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Filed
  by the Registrant </font><font face=Wingdings style="font-size:11.0pt;letter-spacing:-.1pt;">x&nbsp;</font></p>
  </td>
 </tr>
<tr>
  <td colspan=2 valign=top width=100% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Filed
  by a Party other than the Registrant </font><font face=Wingdings style="font-size:11.0pt;letter-spacing:-.1pt;">o&nbsp;</font></p>
  </td>
 </tr>
<tr>
  <td colspan=2 valign=top width=100% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>
  </td>
 </tr>
<tr>
  <td colspan=2 valign=top width=100% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Check
  the appropriate box:</font></p>
  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Wingdings style="font-size:11.0pt;letter-spacing:-.1pt;">o</font></p>
  </td>
 <td valign=top width=96% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Preliminary
  Proxy Statement</font></p>
  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Wingdings style="font-size:11.0pt;letter-spacing:-.1pt;">o</font></p>
  </td>
 <td valign=top width=96% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Confidential, for Use of the Commission
  Only (as permitted by Rule 14a&#8209;6(e)(2))</font></b></p>
  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Wingdings style="font-size:11.0pt;letter-spacing:-.1pt;">o</font></p>
  </td>
 <td valign=top width=96% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Definitive
  Proxy Statement</font></p>
  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Wingdings style="font-size:11.0pt;letter-spacing:-.1pt;">o</font></p>
  </td>
 <td valign=top width=96% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Definitive
  Additional Materials</font></p>
  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Wingdings style="font-size:11.0pt;letter-spacing:-.1pt;">x</font></p>
  </td>
 <td valign=top width=96% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Soliciting
  Material Pursuant to &#167;240.14a&#8209;12</font></p>
  </td>
 </tr>
</table>

</div>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>

<div align=center>

<table cellpadding=0 cellspacing=0 border=0 style="border-collapse:collapse;width:100%;">
 <tr>
  <td colspan=3 valign=top width=100% style="padding:0in .05in 0in .05in;">
  <p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><b><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">BARRETT BUSINESS SERVICES, INC.</font></b></p>
  </td>
 </tr>
<tr>
  <td colspan=3 valign=top width=100% style="padding:0in .05in 0in .05in;">
  <p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">(Name of Registrant as
  Specified In Its Charter)</font></p>
  <p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>
  <p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">_________________________________________________________</font></p>
  </td>
 </tr>
<tr>
  <td colspan=3 valign=top width=100% style="padding:0in .05in 0in .05in;">
  <p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">(Name of Person(s) Filing Proxy
  Statement, if other than the Registrant)</font></p>
  </td>
 </tr>
<tr>
  <td colspan=3 valign=top width=100% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>
  </td>
 </tr>
<tr>
  <td colspan=3 valign=top width=100% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Payment
  of Filing Fee (Check the appropriate box):</font></p>
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>
  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Wingdings style="font-size:11.0pt;letter-spacing:-.1pt;">x</font></p>
  </td>
 <td colspan=2 valign=top width=96% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">No fee
  required</font></p>
  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Wingdings style="font-size:11.0pt;letter-spacing:-.1pt;">o</font></p>
  </td>
 <td colspan=2 valign=top width=96% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Fee
  computed on table below per Exchange Act Rules 14a&#8209;6(i)(1) and 0&#8209;11</font></p>
  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>
  </td>
 <td valign=top width=6% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">(1)</font></p>
  </td>
 <td valign=top width=90% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Title
  of each class of securities to which transaction applies:&nbsp;&nbsp;</font><u><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;&nbsp;</font></u></p>
  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>
  </td>
 <td valign=top width=6% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">(2)</font></p>
  </td>
 <td valign=top width=90% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Aggregate
  number of securities to which transaction applies:&nbsp;&nbsp;</font><u><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;&nbsp;</font></u></p>
  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>
  </td>
 <td valign=top width=6% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">(3)</font></p>
  </td>
 <td valign=top width=90% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Per
  unit price or other underlying value of transaction computed pursuant to
  Exchange Act Rule 0&#8209;11 (set forth the amount on which the filing fee is
  calculated and state how it was determined):&nbsp;&nbsp;</font><u><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;&nbsp;</font></u></p>
  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>
  </td>
 <td valign=top width=6% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">(4)</font></p>
  </td>
 <td valign=top width=90% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Proposed
  maximum aggregate value of transaction:&nbsp;&nbsp;</font><u><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;&nbsp;</font></u></p>
  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>
  </td>
 <td valign=top width=6% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">(5)</font></p>
  </td>
 <td valign=top width=90% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Total
  fee paid:&nbsp;&nbsp;</font><u><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;&nbsp;</font></u></p>
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;text-decoration:none;">&nbsp;</font></p>
  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Wingdings style="font-size:11.0pt;letter-spacing:-.1pt;">o</font></p>
  </td>
 <td colspan=2 valign=top width=96% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Fee
  paid previously with preliminary materials.</font></p>
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>
  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Wingdings style="font-size:11.0pt;letter-spacing:-.1pt;">o</font></p>
  </td>
 <td colspan=2 valign=top width=96% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Check
  box if any part of the fee is offset as provided by Exchange Act Rule 0&#8209;11(a)(2)
  and identify the filing for which the offsetting fee was paid previously.
  Identify the previous filing by registration statement number, or the Form or
  Schedule and the date of its filing.</font></p>
  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>
  </td>
 <td valign=top width=6% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">(1)</font></p>
  </td>
 <td valign=top width=90% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:6.0pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Amount Previously Paid:&nbsp;</font></p>

  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>
  </td>
 <td valign=top width=6% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">(2)</font></p>
  </td>
 <td valign=top width=90% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:6.0pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Form, Schedule or Registration Statement No.:&nbsp;</font></p>

  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>
  </td>
 <td valign=top width=6% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">(3)</font></p>
  </td>
 <td valign=top width=90% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:6.0pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Filing Party:&nbsp;</font></p>

  </td>
 </tr>
<tr>
  <td valign=top width=4% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">&nbsp;</font></p>
  </td>
 <td valign=top width=6% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">(4)</font></p>
  </td>
 <td valign=top width=90% style="padding:0in .05in 0in .05in;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:11.0pt;letter-spacing:-.1pt;">Date
  Filed:&nbsp;</font></p>
  </td>
 </tr>
</table>

</div>









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<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>





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<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Barrett Business Services Inc. (NasdaqGS:BBSI)</font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Earnings Call Transcript</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Tuesday, February 14, 2012 12:00 PM ET</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Call Participants</font></b></p>



<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">&nbsp;</font></b></p>

<div align=left><table cellpadding=0 cellspacing=0 border=0 style="border-collapse:collapse;width:100%;">
 <tr>
  <td valign=top width=50% style="padding:0in 5.4pt 0in 5.4pt;">
  <p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial style="font-size:12.0pt;">Executives</font></b></p>
  </td>
 <td valign=top width=50% style="padding:0in 5.4pt 0in 5.4pt;">
  <p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial style="font-size:12.0pt;">Analysts</font></b></p>
  </td>
 </tr>
<tr>
  <td valign=top width=50% style="padding:0in 5.4pt 0in 5.4pt;">
  <p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial style="font-size:12.0pt;">&nbsp;</font></b></p>
  </td>
 <td valign=top width=50% style="padding:0in 5.4pt 0in 5.4pt;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:12.0pt;">&nbsp;</font></p>
  </td>
 </tr>
<tr>
  <td valign=top width=50% style="padding:0in 5.4pt 0in 5.4pt;">
  <p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial style="font-size:12.0pt;">James D. Miller</font></b></p>
  </td>
 <td valign=top width=50% style="padding:0in 5.4pt 0in 5.4pt;">
  <p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial style="font-size:12.0pt;">Jeff Martin</font></b></p>
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:12.0pt;">Roth Capital Partners</font></p>
  </td>
 </tr>
<tr>
  <td valign=top width=50% style="padding:0in 5.4pt 0in 5.4pt;">
  <p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial style="font-size:12.0pt;">&nbsp;</font></b></p>
  </td>
 <td valign=top width=50% style="padding:0in 5.4pt 0in 5.4pt;">
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:12.0pt;">&nbsp;</font></p>
  </td>
 </tr>
<tr>
  <td valign=top width=50% style="padding:0in 5.4pt 0in 5.4pt;">
  <p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial style="font-size:12.0pt;">Michael L. Elich</font></b></p>
  </td>
 <td valign=top width=50% style="padding:0in 5.4pt 0in 5.4pt;">
  <p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial style="font-size:12.0pt;">Josh Vogel</font></b></p>
  <p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial style="font-size:12.0pt;">Sidoti &amp; Company</font></p>
  </td>
 </tr>
</table></div>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p style="margin:0in;margin-bottom:6.0pt;margin-left:0in;margin-right:0in;margin-top:5.0pt;"><b><font face=Arial lang=EN-US style="font-size:11.0pt;">Important
Information Regarding Proxy Communication</font></b></p>

<p style="margin:0in;margin-bottom:12.0pt;"><font face=Arial lang=EN-US style="font-size:11.0pt;">This material may be deemed to be solicitation
material in respect of the solicitation of proxies from stockholders in
connection with one or more meetings of BBSI&#8217;s stockholders in 2012, including
a special meeting of stockholders, if such a meeting is called, and the
company's 2012 annual meeting.&#160; The company will file a proxy statement with
the Securities and Exchange Commission (the &#8220;SEC&#8221;) in connection with any
meeting of stockholders that is called. The proxy statement, any other relevant
documents and other material filed with the SEC concerning the company will be,
when filed, available free of charge at </font><u><font face=Arial lang=EN-US style="font-size:11.0pt;">http://www.sec.gov&nbsp;</font></u><font face=Arial lang=EN-US style="font-size:11.0pt;"> and </font><u><font color=windowtext face=Arial lang=EN-US style="font-size:11.0pt;">http://www.barrettbusiness.com/investor-relations</font></u><font face=Arial lang=EN-US style="font-size:11.0pt;">.&#160;
Stockholders are urged to read each proxy statement and any other relevant
documents filed when they become available because they will contain important
information. </font></p>

<p style="margin:0in;margin-bottom:6.0pt;page-break-after:avoid;"><b><font face=Arial lang=EN-US style="font-size:11.0pt;">Information Regarding
Participants </font></b></p>

<p style="margin:0in;margin-bottom:6.0pt;"><font face=Arial lang=EN-US style="font-size:11.0pt;">BBSI, its directors and certain of its executive
officers and employees may be deemed to be participants in the solicitation of
proxies from stockholders as described above.&#160; Information concerning these
participants is available in the company&#8217;s proxy statement for the 2011 annual
meeting of stockholders, filed with the SEC on April 18, 2011, and in
subsequent SEC filings on Forms 3, 4 and 5. The company will file a proxy
statement with the SEC in connection with any meeting of stockholders that is
called.&#160; Stockholders are advised to read any such proxy statement and other
relevant documents filed when they become available because they will contain
important information, including information with respect to participants. You
can obtain free copies of these referenced documents as described above.</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Presentation</font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Operator </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Good afternoon, everyone, and thank you for participating in
today&#8217;s conference call to discuss BBSI&#8217;s Financial Results for the Fourth
Quarter and Full Year ended December&nbsp;31, 2011. </font></p>


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<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Joining us today are BBSI&#8217;s President and CEO, Mr. Michael
Elich and the company&#8217;s CFO, Mr.&nbsp;Jim Miller. Following their remarks,
we&#8217;ll open the call for your questions. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Before we go further, I would like to take a moment to read
the company&#8217;s Safe Harbor statement within the meaning of the Private
Securities Litigation Reform Act of 1995 that provides important cautions
regarding forward-looking statements. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">The company remarks during today&#8217;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. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Please refer to the company&#8217;s recent earnings release and to
the company&#8217;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. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">I would like to remind everyone that this call will be
available for replay through March 14, 2012 starting at 2 P.M. Eastern Standard
Time this afternoon. A webcast replay will also be available via the link
provided in yesterday&#8217;s press release, as well as available on the company&#8217;s website
at www.barrettbusiness.com. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Now, I would like to turn the call over to the Chief
Financial Officer of BBSI, Mr. Jim Miller. Sir, please go ahead. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">James D. Miller </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Thank you, Christina. And depending upon where you are
dialing-in from, good morning or afternoon everyone. I&#8217;d like to preface my
remarks about our financial results with two quick comments. First, no doubt
many of you have noted documents filed with the SEC by Kimberly Sherertz widow
of our former CEO, Bill Sherertz announcing her desire to replace five of our
current directors with her handpicked nominees. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Our focus for today&#8217;s call is to provide you with a
perspective of your management team on BBSI&#8217;s financial results for the fourth
quarter of 2011, and the full year, as well as the future direction of our
business. Accordingly, we do not intend to comment or answer questions about
Ms. Sherertz&#8217;s public statements or her request to the Board of Directors to
call a special stockholders&#8217; meeting. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Second, I would like to mention that yesterday&#8217;s earnings
release summarizes our revenues and cost of revenues on a net revenue basis as
required by Generally Accepted Accounting Principles. Most of our comments
today, however, will be based upon gross revenues in various relationship to
gross revenues because we believe such information is one, 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 compared to a net </font><font face=Arial lang=EN-US style="font-size:12.0pt;">revenue basis of reporting have no effect on gross margin
dollars, SG&amp;A expenses or net income. </font></p>
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<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Turning now to the fourth quarter results, total gross
revenues increased 23% to $424 million compared to the fourth quarter of 2010.
California, which comprised approximately 84% of our overall fourth quarter
gross revenues, increased 27% due to the continued growth from new PEO
customers. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Total PEO gross revenues increased 26% to $392 million,
compared to the fourth quarter of last year, primarily due to the addition of
new clients. &#160;Our PEO revenues from existing customers experienced a slight 1%
increase or approximately $3 million compared to the year ago quarter as a
result of the slight increase in average hours worked. The increase in PEO
revenues from existing customers represents the seventh consecutive quarter of
existing customer growth. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Staffing revenues for the fourth quarter of 2011 increased
4% to $31 million, compared to fourth quarter of 2010, principally due to a
small decline in revenues from existing customers particularly in our Mountain
States as new business nearly offset the loss of business from former
customers. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">The company reported an increase to its workers'
compensation reserve of approximately $8.5 million in the fourth quarter of
2011 as a result of adverse development in the estimate of the ultimate cost of
our self-insured workers&#8217; compensation claims liabilities primarily related to
claim years 2005 to 2009. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">The root cause for the charge was related to the prolonged
recession that came to bottleneck claim closure in these prior years leading to
higher than expected development in claim costs including related legal costs;
now these claims are beginning to move and close. With assistance from our
independent actuary, we have performed an in-depth analysis of these prior year
claims and have established what we believe to be more conservative reserves
for this pool. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">During this process, we discovered that while we have worked
with the same actuary for the past several years, we have determined the need
to better understand the drivers in their various actuarial models so that we
can identify and respond to trends more quickly. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">With the benefit of hindsight, we also determined that the
previous quarterly actuarial reviews conducted were not robust enough to
monitor development of prior year-end results.&#160; We have moved to having a
complete analysis performed each quarter similar to the actuary full annual
analysis. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Internally, we are modeling future quarters by forecasting
things based upon our recent and past experience, and truing up estimates that
changes in trends and frequency and severity warrant. </font></p>

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<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">On a percentage basis, gross margin
declined to 2% for the fourth quarter of 2011, compared to 4% in the same
quarter a year ago, primarily due to the additional $8.5 million workers&#8217;
compensation charge. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Direct payroll cost as a percentage of gross revenues in the
fourth quarter decreased to 85.2% from 85.4% in the same quarter last year due
to an increase in overall customer market percentage based upon price increases
during 2011. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Payroll taxes and benefits for the fourth quarter as a
percentage of gross revenues was 7.6% versus 7.2% for the same quarter a year
ago. The 40 basis point increase was due in part to higher effective state
unemployment tax rate in various states in which we operate as compared to the
fourth quarter of 2010, and due to the accrued portion of payroll at the end of
2011 where the accrued portion carried a higher payroll tax burden from the 2012
payroll tax rate as the accrued payroll, while earned in 2011, was paid in
January 2012. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Workers&#8217; compensation expense as a percentage of gross
revenues was 5.3%, which is up from 3.5% for the same quarter a year ago, again
primarily due to the additional $8.5 million charge. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">SG&amp;A expenses increased 9.9% to $10.6 million versus the
2010 fourth quarter principally due to increases in management payroll, legal
expenses and stock-based compensation expense. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">The benefit from income taxes in the fourth quarter was $2.3
million, which included a favorable benefit from the effect of a much lower
annual effective tax rate attributable to the non-taxable $10 million life
insurance proceeds from a key man life insurance policy that the company
realized during the first quarter of 2011. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">The fourth quarter of 2011 also included favorable net tax
benefits from a reduced 2010 California income tax apportionment upon the
filing of our 2010 California tax return during the fourth quarter of 2011, and
through the benefit of getting unemployment tax credits. We expect the
effective income tax rate for 2012 to return to a more historical rate in the
mid 30% range.</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">As reported, the company lost $0.01 per diluted share in the
fourth quarter of 2011, compared to $0.31 of earnings per share in the same
quarter last year. The decline in the fourth quarter 2011 was primarily due to
the $8.5 million workers&#8217; compensation charge as previously discussed.
Excluding this charge combined with a more normalized income tax rate, the
company earned $0.41 per diluted share for the fourth quarter of 2011 on a
non-GAAP basis.</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Turning now to the full year results, net revenues in 2011
increased 15% to $315 million compared to $273 million in 2010. Total non-GAAP
gross revenues in 2011 increased 24% to $1.5 billion, compared to $1.2 billion
in 2010 with the increase primarily </font><font face=Arial lang=EN-US style="font-size:12.0pt;">attributable to the
increase in new PEO clients and, to a lesser extent, same-store sales growth as
previously discussed. </font></p>
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<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Net income in 2011 on a GAAP basis was $14.3 million or
$1.42 per share compared to net income of $7.4 million or $0.73 per share in
2010. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Turning now to the balance sheet, at December 31, cash and
current marketable securities totaled $66.4 million compared to $55.4 million
at December 31, 2010. This increase was primarily due to the net income for
2011 partially offset by payment of quarterly cash dividends and share
repurchases during the year. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">We continue to carry no bank debt and generated
approximately $30.1 million in free cash flow for the full year of 2011. Trade
accounts receivable at December 31 were $46.5 million, an increase of $8.9
million over December 31, 2010, primarily due to the increase in revenues on a
year-over-year basis. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Accrued payroll taxes and related benefits increased $14.8
million over December 31, 2010 to $52.3 million due to increases in accrued
payroll and to the year-end timing of the due date for weekly payroll tax
deposits at the end of December 2011, compared to December 2010. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Stockholders&#8217; equity increased approximately $6.3 million
over December 31, 2010 to $101.7 million principally due to net income of $14.3
million partially offset by share repurchases of $4.8 million and cash
dividends paid of $3.8 million. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Now turning to our outlook for the first quarter of 2012, we
are expecting gross revenues to range between $417 million to $423 million.
This projection represents a likely mid-point increase of 27% over the $331
million in gross revenues for the first quarter of 2011. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">The projected increase of 2012 first quarter gross revenues
is based upon recent revenue trends. Based upon the foregoing estimates for
gross revenues and excluding the potential aggregate costs associated with
evaluating and appropriately responding to requests made by a group formed by
Kimberly Sherertz that the company hold a special meeting of stockholders and
the costs of holding a special meeting, if any, diluted loss per share is
expected to range between $0.18 and $0.21 per share, compared to diluted
earnings per share of $0.54 for the same quarter a year ago. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">However, please keep in mind, the diluted earnings per share
for the first quarter of 2011 included the $10 million key man life insurance
proceeds and a favorable income tax rate benefit related to the effect of a
much lower annual effective income tax rate attributable to the life insurance
proceeds. Without these favorable benefits, the company experienced a net loss
of $0.20 per share in the first quarter of 2011. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">As we mentioned in previous years, during a period of PEO
growth, as we are continuing to experience, first quarter estimates project
larger losses due to low or </font><font face=Arial lang=EN-US style="font-size:12.0pt;">negative customer margins,
resulting from the effective higher payroll taxes at the start of the new year.
However, the PEO growth becomes additive for the remainder of the year, once
these payroll tax ceilings are reached, usually towards the end of the first
quarter. </font></p>
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<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">At this time, Mike Elich will comment further on the
recently completed fourth quarter, and our outlook for the first quarter of
2012. Mike? </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Michael L. Elich </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Good morning or afternoon wherever you might be. I
appreciate you taking time this morning for the call. Overall, we&#8217;re pleased
with a very successful quarter.&#160; While we are disappointed with having to take
a charge in the quarter, we feel that it puts us on track moving forward to
execute on our plan and reinvest in the company while we continue to grow. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">In the quarter, we added 131 clients. We&#8217;ve lost 49. &#160;8
clients were lost due to AR issues.&#160; 9 clients cancelled for non-AR issues, costs
and other reasons. 7 businesses were sold, five left on their own, 9 took
payroll in-house, and 11 left to work with a competitor. The overall net gain
was 82 clients, an increase of 45% over fourth quarter 2010&#8217;s net quarterly build.&#160;
Overall we saw head count and hours worked flat in the quarter. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">On a regional basis, we continue to see both Southern
California and Northern California have strong momentum of growth. For the
Northwest, we continue to see positive momentum, the Mountain States still see
some headwinds, but have continued to make progress, and on the East Coast, we
continue to show consistent growth. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">In reviewing 2011, there&#8217;s a few things that we learned and
accomplished. One of the things that I think is very critical for the
organization is that, we&#8217;ve managed to align the organization at all levels
from the board level to the executive management level to the corporate level
to field operation. My anticipation is that, as we are better aligned going
forward and as we grow, we&#8217;ll be able to be more proactive in addressing issues.
</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">One of the things that we discovered in the process was a
bit of a siloed organization that worked to $20 million in revenue per week,
but we don&#8217;t see it working at $40 million in revenue per week. We&#8217;ve made a
lot of progress in how we focus proactively in areas needing improvement as an
organization, and will continue to work in these areas. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Great steps forward in maturing the execution and delivery
of our product was also a major success in the year. We&#8217;ve also taken steps to
refine best practices to leverage our internal capacity while we continue to
grow. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Looking forward to 2012, we are currently in the process - in
the first quarter of opening two new branches, one of them in the Burbank area,
and another one in the Monterey area. It&#8217;s a little bit of a load leveling
exercise where we&#8217;ve got branches that are </font><font face=Arial lang=EN-US style="font-size:12.0pt;">growing and
it&#8217;s a process of building more capacity in markets where we know we have a lot
of momentum. </font></p>
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<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">One of the things that we are working very closely on today
is, methods for bringing real-time data to the field, and to our customers, so
we can more effectively analyze and be further out in front of the curve
working with our clients in all areas. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">We continue to mature management systems to recognize
outliers to exception parameters both internally and to the branch and to our
customers. And in a sense what that really means is that we are being very
critical as to areas, be it claims related to workers&#8217; comp, be it turnover, be
it the whole host of different areas that we can collect data and ping on a
day-to-day basis and transferring that back to the branches, so they know where
they need to be focusing from an operational standpoint. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">In 2012, we&#8217;ll also continue to execute our rollout of the HR
pyramid, which is our new payroll system and HR systems. &#160;We&#8217;ll continue to
mature the organizational structure while maintaining alignment with the culture
of our organization and will continue to focus on continuous organizational
development. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">One of the biggest things that I see as we continue to grow
and mature as an organization is that it needs to be much more about our
products, but when we go into the field and we start to really dive into and visit
with people and understand what our product is, our product is our people, so
the better we can continue to find, hire, train, and mature our internal
organization as well as the better tools that we can put in front of them, the
better off we&#8217;re going to be down the road in leveraging their capacity. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">The tailwinds that I see in the year, and currently is we
continue to retain our top talent while we continue to retain 90% of our client
base. The organization continues to mature. We&#8217;re not even close to the same
organization that we were three years ago.&#160; I think that helped us to more
systemically be aligned to future success. We have our pipelines that remain
very strong, and we continue to hire and retain very strong talent at all
disciplines. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Headwinds that we see in the year is, ultimately we still
see net hiring as flat; hours worked in the quarter were flat. Now based on
where we&#8217;ve been over the last few years, flat is not necessarily bad, but
we&#8217;re not seeing momentum coming from that area. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Then another area is our - we continuously watch and ensure
that we have the ability to invest into our infrastructure and support growth
with innovation, while managing short-term expectations. And then to workers&#8217;
comp, it&#8217;s always a work in progress. We have made so much progress just in the
last year, two years, but the things that still continue to be headwinds are,
knowing that basically past performance will represent future results, that&#8217;s
always the unknown, knowing how long it takes to recognize process change and
claim or loss mitigation, meaning that we&#8217;ll make changes to how we do or how
we look at things today, we may not see those results for another 18 months.
And </font><font face=Arial lang=EN-US style="font-size:12.0pt;">then additionally, the need to refine the
continuous alignment with our actuaries and internal measures to operation. </font></p>
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<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Moving forward, we&#8217;ll continue to reinvest back into the
organizational infrastructure to support our growth curve. We continue to
mature our pipeline forces and we continue to educate all stakeholders to the
dynamic of the business model, and how we drive value to customers and
shareholders. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">To conclude, overall we are very pleased with how the
company is running, very pleased with the direction things are going, and
looking forward to the progress we&#8217;re making and the results of that over the
next couple of years. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">With that we&#8217;ll open it for questions. I will also just
reiterate Jim&#8217;s point that based on the rules of proxy solicitation, we&#8217;re not
able to comment or answer the questions related to that, but we&#8217;ll hold to
questions more to the operations of the company. Thank you. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Question and Answer</font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Operator </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Ladies and gentlemen, at this time we will begin the
question-and-answer session. (Operator Instructions) And our first question
comes from the line of Jeff Martin with Roth Capital Partners. Please go ahead.
</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Jeff Martin </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Roth Capital Partners </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Thanks, good morning. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Michael L. Elich </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Good morning, Jeff. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Jeff Martin </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Roth Capital Partners </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Good morning, Jim. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">James D. Miller </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Good morning. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Jeff Martin </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Roth Capital Partners </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Michael, I wanted to touch on the infrastructure of the
business, and how well you think you are positioned today, you are very likely
to get close to $2 billion in gross revenue in the next 18 months, and I know
that just two or three years ago, it was a big milestone get to $1 billion. So
can you give us some perspective, how do you think the business is </font><font face=Arial lang=EN-US style="font-size:12.0pt;">positioned today from an infrastructure standpoint. How quickly
do you mean to get to a higher level of infrastructure to manage $2 billion or
$3 billion in gross revenue? </font></p>
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<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Michael L. Elich </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">We&#8217;ve made a tremendous amount of progress in the last year.
One of the things that was somewhat of a, I guess an undertow to that, is that
we recognized that, switching from where we were, again running at that $20
million a week to running even at $34 million, $35 million, $40 million a week,
that you need to get further out in front of the curve. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">And doing so, we&#8217;ve done a few things.&#160; One is that bringing
alignment to the overall organization from how corporate actually works and
interfaces with the field has been a huge piece. With that, we&#8217;ve discovered
certain gaps and have made several changes to hire back into the corporate
infrastructure, work on developing and evolving the field but equally breaking
down barriers that had from a corporate perspective, one way of looking at the
business and what was needed and then looking at the field as a reverse and
having the organization looking back at corporate to understand more
effectively how to innovate to make sure that we&#8217;re working on the right thing.
</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Some of the things we&#8217;ve done in the last year is that we&#8217;ve
brought the organization together more effectively to communicate our overall
mission, where we&#8217;re going, why we&#8217;re doing, what we&#8217;re doing. We&#8217;ve looked at
our product offering and have refined the scope of that to the point where
we&#8217;ve got an internal way of looking at our business and our customers today that
we really didn&#8217;t have 18 months ago that brings a lot more consistency to how
we train, how we bring people on board, how we analyze the good customer from a
bad customer and how we&#8217;re marketing more real-time decisions. Today all of our
branches are staffed with branch managers and infrastructure is in very good
shape today. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">I think the biggest change overall for us is how we continue
to listen and learn from the outliers that exist and then innovate to impact an
organization that can run at a different level. And I would say that we are
well in front of that curve right now, although in the next year to two years,
we will need to invest back into that infrastructure, so we can stay in front
of the curve. And I don&#8217;t want to put myself in a position where I&#8217;m worried
about managing short-term expectations as opposed to hiring very strong talent.
The one thing that we know right now is that we are seeing some extremely good
talent out there and if we have a place or we have a way to even overbuild a little
bit to incubate that talent, that&#8217;s where we&#8217;ll put our attention. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Jeff Martin </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Roth Capital Partners </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">And then in terms of infrastructure, are we talking a
combination of technology and personnel, is it more heavily weighted to one or
the other? </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>


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<p style="margin:0in;margin-bottom:.0001pt;page-break-after:avoid;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Micheal
L. Elich </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">I think both, I think that you&#8217;ve got to put the right
people in place, and then you&#8217;ve got to give them the tools to be able to
leverage their talent. So you can hire talented people, but if you don&#8217;t have
the technology and the tools to help them optimize their effectiveness, you&#8217;re
really not gaining that much, especially at the next level. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">One of the things that we discovered, especially with our
larger branches was by - because we address and work with our customers in
teams or groups, and in these business units that we&#8217;ve created we had always
had a three person business unit. And as we continue to expand, one of the
things that we recognized was that from a capacity standpoint by adding one
more skill set to that business unit, we actually leverage that business unit
up by about 20% to 30% as opposed to adding an entirely new business unit. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">And that seems to me to be, one, a good investment from a
leverage standpoint; but two, we feel with that business unit, we&#8217;ll be able to
be much more effective at delivering our product in all levels. But then
ultimately, you have to have technology that keeps real-time data in front
people, so as they&#8217;re looking at their clients, it&#8217;s not a - it&#8217;s seen on an
ongoing basis, what are the outliers in that business mix, so they can address
issues in real-time and be proactively working with their clients to build-out dysfunction
or defects. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Jeff Martin </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Roth Capital Partners </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Okay. And then jumping over to the workers&#8217; comp side of
things, you talked about a claim closure bottleneck, is that isolated to Q4 or
is that something that you expect to be ongoing in the short-term, what kind of
outlook do you have for that? </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Michael L. Elich </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">You know, when we come to recession, there are two things
that really went on when you look into our history. When we grew, we
restructured and reformatted much of the company and hired a lot of new
managers back in 2002 to 2004, 2005. And we had a pretty good growth curve back
then to get to $1 billion. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">But when we went into the recession, you have very much a
shakeout period where you shake out clients that shouldn&#8217;t have been in
business anyway, that we probably shouldn&#8217;t have been working with. &#160;And
meanwhile, still you are continuing to mature your organization because they&#8217;re
seeing all aspects of the business through different timeline, time horizon. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Well, we go into &#8217;05 with respect to&#8217;07, &#8217;08, &#8217;09, it&#8217;s very
much a flat sideways economy, and one of the things that happened with the
workers&#8217; comp system in California is, it basically seized up. The claims were
not moving because the legal system seized up, there was - people had no
incentive to get back to work, so there was less incentive to try to get the
claim closed and move on. </font></p>

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<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">What we&#8217;re seeing now is that, as
when you&#8217;ve, one, matured very much as an organization, we don&#8217;t believe that
we&#8217;re creating the same situation today. We think that we&#8217;re much closer to
what&#8217;s going on, we&#8217;re much further in front of the curve, but more importantly
as those claims started to break loose, it changes the overall expectations for
cost of other claims. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">So when claims started to move, it created more volatility
in those back years, which ultimately said that the potential for us being
under-reserved in those back years was there. &#160;And so as we worked on it,
looked at it, it became one of those where we wanted to get out on in front of
the curve enough to make sure that we weren&#8217;t having to continue to have to
feed the back years while we were trying to build the company into the future. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Jeff Martin </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Roth Capital Partners </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">And to my understanding, you&#8217;re traditionally by nature very
conservative on the clients you take on - how is it different looking back 7, 8
years later having gone through that growth curve, what were the mistakes that
were made? </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Michael L. Elich </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">I don&#8217;t know that, it&#8217;s one of those things that when you&#8217;re
growing and you&#8217;re going. When I started with the company, basically we&#8217;re 10
times larger today than we were then. And so, when you&#8217;re growing and you&#8217;re
growing at that rate, you&#8217;re learning a lot on the go. And the foundation that
you&#8217;re building on keeps changing and evolving very quickly. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">And today the foundation and the platform is a lot firmer.
And we had a meeting just recently with six of our managers in the company
running the largest branches, and one of the things that I saw in the room,
they all came into the room thinking they were different, and they left the
room understanding that they were all very similar. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">And part of what happens as you grow up as an organization
is that, you start to refine and create a stronger bench of what works. And
then you&#8217;re working off that, where in those back years, we were growing pretty
fast, and even though we thought we knew a lot of things that were going on, we
know a lot today that we didn&#8217;t know. Also we were probably in more of a
position to take on business that we would never take on today. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Today, the book of business is much more diversified. We
built out a lot of the hazard codes that we were working with back then that we
don&#8217;t work today. We have a stronger pipeline, which means that we actually
have a better opportunity to pick the right company, it goes back to the adage,
if I have three companies to pick from, I&#8217;ll pick one. And it doesn&#8217;t mean that
one is good enough, but I&#8217;ll pick one. When I have ten to pick from, I&#8217;ll still
pick the one but I have a much higher probability of picking the right one. </font></p>

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<p style="margin:0in;margin-bottom:.0001pt;page-break-after:avoid;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Jeff
Martin </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Roth Capital Partners </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Okay. And then can you comment on the client additions in
the quarter, I mean, how I think traditional Q4 is one of your softer seasonal
quarters of adding client, and then should we expect an acceleration from the
pace that we saw in Q4? Do you see the potential out there? </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;page-break-after:avoid;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Michael L. Elich </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Actually, what happens in Q4 is that, early on in the
quarter you&#8217;re building fast, and then you get to about Thanksgiving, and
anybody that&#8217;s going to come on starts to just draw back, and they say, I&#8217;ll
wait until after the first of the year. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">And in doing that, we basically postpone all those starts, until
after the first of the year. This quarter actually we saw a 45% increase in
year-over-year build for fourth quarter, but we still had a very large block of
new clients that started January 1, that aren&#8217;t included in the fourth quarter.
</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Jeff Martin </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Roth Capital Partners </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">How is the first five, six weeks of the year going in terms
of finance? </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Michael L. Elich </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Well, one of the things that when you come through the first
of the year, I&#8217;ve watched it for many years. It&#8217;s almost like there&#8217;s a
hangover after the holidays, that all the companies that step back, that laid
people off for a couple of weeks or just took vacations, It takes a while for
that momentum to regain its current trend that you saw in the fourth quarter.
This year we&#8217;ve actually seen it bounce back faster than I&#8217;ve seen in many,
many years. And so far it&#8217;s continued to be on track. As far as new client
build in our pipeline, it has continued to remain full, and we see a pretty
robust year going forward. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Jeff Martin </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Roth Capital Partners</font></b><font face=Arial lang=EN-US style="font-size:12.0pt;"> &nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Okay, thanks guys. Good luck. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">James D. Miller </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Thank you. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Operator </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Thank you. (Operator Instructions) And our next question
comes from the line of Josh Vogel with Sidoti &amp; Company. Please go ahead. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Josh Vogel </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Sidoti &amp; Company</font></b><font face=Arial lang=EN-US style="font-size:12.0pt;"> &nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Hey, good morning, Mike and Jim. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>


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<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Michael L. Elich </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Good morning, Josh. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">James D. Miller </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Good morning. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;page-break-after:avoid;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Josh Vogel </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Sidoti &amp; Company </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Of the bulk of the new clients you&#8217;re adding, just kind of
building off or you&#8217;re just talking about. Are these clients that are using
these services for the first time, are you perhaps stealing share from
competitors? </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Michael L. Elich </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">I don&#8217;t, I don&#8217;t have much detail of that. But it&#8217;s probably
still an 80% organic first new companies coming in versus 20% that may have
come from a PEO one point or another. The one thing that it&#8217;s hard to compare
to is, as they work with ADP for instance to do their payroll, you&#8217;re going to
- that&#8217;s not really a direct comparable to us, but we do see more like an ADP
or Paychex coming over. And we&#8217;ve seen that step upward, that is probably a
market of where we are capturing more business, but it&#8217;s not really a
one-to-one comparison to the PEO market that we try to play in. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Josh Vogel </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Sidoti &amp; Company</font></b><font face=Arial lang=EN-US style="font-size:12.0pt;"> &nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Okay. And you&#8217;ve obviously done a great job adding that new
clients throughout the year, and it seems like you&#8217;re off to a good start this
year. Have you been ramping your marketing effort at all or is it just still a
product a great referral network? </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Michael L. Elich </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">I think that we&#8217;re always looking at our messaging, making
sure that our messaging is leveraging the market effectively, but probably I
would still say, it&#8217;s a result of our network, and it&#8217;s a result of the
maturing network. The more success we get and have with our existing clients,
the more it continues to bolster our partnerships with our referral networks,
and as well, wider the base gets the more customer referrals we&#8217;re getting. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Josh Vogel </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Sidoti &amp; Company </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Okay, great. And Mike, you talked a lot about investing in
infrastructure and rolling up the new HR system and just bringing more
real-time data into the field. I was just wondering if you guys could may be
quantify how much and when these costs should hit up throughout the year
associated with that? </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Michael L. Elich </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">It&#8217;s more just an incremental build to some degree, and
that&#8217;s where we&#8217;re at. I think in the quarter, Jim said that, over a year, last
year we built - our overall SG&amp;A was up 9%, 9.9%. You&#8217;ll see it in that
reflection, it will just be a gradual build as we&#8217;re hiring and </font><font face=Arial lang=EN-US style="font-size:12.0pt;">finding the right talent, and then those costs are
incorporated back in, which may be a slight headwind to current earnings based
on we are trying to make sure that the future earnings will continue to
leverage. </font></p>
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<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">But equally, our top line growth and even our margin growth
was up well above what our overall expense build was. And so we are gaining in
that, but for instance, right now we&#8217;re looking for a Director of Insurance, we
hired - in the year, we&#8217;ve put in - we brought in a Director of IT, which has
done great for us to move things forward. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">We created a function of the Director of Risk Management,
made tremendous progress in that area. And then in the field, we add two
branches, unfortunately we can&#8217;t capitalize any of that. So that becomes the
direct build when you now are creating new teams that are going to be
supporting both existing clients, and it will take a little bit of time before
they can get their own momentum and build their own book of business. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Josh Vogel </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Sidoti &amp; Company </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Okay. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Michael L. Elich </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">That&#8217;s just a little bit of that headwind. It shouldn&#8217;t be a
huge impact to that, it&#8217;s just being aware that it&#8217;s out there. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Josh Vogel </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Sidoti &amp; Company </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Okay, thank you. I&#8217;ll jump back in the queue. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Operator </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Thank you. At this time, this concludes our
question-and-answer session. I would now like to turn the call back over to Mr.
Elich for closing remarks. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Michael L. Elich </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">I appreciate all of you taking time to be here today. Look
forward to seeing you both on the road and as well as in future calls, and
we&#8217;ll just continue to keep things between the tracks and keep building. Thank
you. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face=Arial lang=EN-US style="font-size:12.0pt;">Operator </font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">Ladies and gentlemen, that does conclude our conference call
for today. Thank you for your participation. We look forward to talking to you
again in April. Thank you. </font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face=Arial lang=EN-US style="font-size:12.0pt;">&#160;&nbsp;</font></p>

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