Monday, Barrett Business Services, Inc. (BBSI) said that it expects to record a non-cash, impairment charge of about $3.5 million, or $0.32 per share, in the third quarter of 2008 relating to its previously disclosed investment in four closed-end bond funds.
The Vancouver, Washington-headquartered provider of human resource management services said that the four closed-end bond funds had an original investment of $4.0 million and declines in market value through June 30, 2008 were reflected in other comprehensive loss in stockholders' equity on the company's balance sheet.
Barrett Business said based upon recent developments in the capital markets, management has determined that the recovery of the value of these investments is unlikely.
As a result, management has determined that the impairment is other than temporary. As of October 10, the investment had a market value of about $491 thousand.
The impairment charge estimate assumes no income tax benefit, given the uncertainty of the company's ability to generate future taxable investment gains required to utilize these investment losses.
At June 30, 2008, the company's balance sheet included $16.6 million in cash and cash equivalents and $36.7 million in marketable securities excluding the bond funds, of which $26.5 million was comprised of short-term, highly liquid municipal bonds and another $7.3 million was comprised of longer-term municipal bonds.
For the third quarter of fiscal 2007, the company reported net income of $6.28 million on total revenue of $82.91 million.
BBSI is currently down $0.15 or 1.33% and trades at $11.10
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