Barrett Business Services (BBSI) risk factors, FY2025 10-K

Risks Related to Workers’ Compensation

1. 01Our ability to continue our business operations under our present service model is dependent on maintaining workers' compensation insurance coverage
2. 02For claims incurred under the insured program prior to July 1, 2021, the Company retains risk of loss up to the first $3.0 million per occurrence on policies issued after June 30, 2020, and $5.0 million per occurrence on policies issued before that date70% rewritten
3. 03In 2020 and 2021, the Company entered into loss portfolio transfer agreements to remove all outstanding workers’ compensation claims obligations for claims incurred under its insured program between February 1, 2014 and June 30, 2018New
4. 04Collateral requirements could increase beyond our ability to satisfy those requirements
5. 05Failure to manage the severity and frequency of workplace injuries will increase our workers’ compensation expenses

Risks Related to Technology

1. 06To succeed, we must constantly improve our technology to meet the expectations of our clients. If we fail to meet those expectations, we may lose clients and harm our business42% rewritten
2. 07We are dependent upon technology services, and if we experience damage, service interruptions or failures in our computer and telecommunications systems, our client relationships and our ability to attract new clients may be adversely affected
3. 08We depend on third-party software to provide our services and support our operations
4. 09We could be subject to reduced revenues, increased costs, liability claims, or harm to our reputation as a result of data theft, cyberattacks or other security vulnerabilities
5. 10Our business may be materially affected – either positively or negatively – by the emergence of disruptive new technologies or approaches enabled by the rapid pace of innovation unfolding in the artificial intelligence space56% rewritten
6. 11New service offerings may subject us to additional risks
7. 12To continue to grow revenues, we are dependent on retaining current clients and attracting new clients36% rewritten
8. 13Our business is subject to risks associated with geographic market concentration
9. 14Economic conditions may impact our ability to attract new clients and cause our existing clients to reduce staffing levels or cease operations72% rewritten
10. 15Changes in U.S. and foreign trade policies, including tariffs, related retaliatory measures, and other trade restrictions, could adversely affect our clients and our businessNew
11. 16Our business depends on reliable access to labor, which may be affected by economic conditions, government policies, and public health crises42% rewritten
12. 17Our staffing business is vulnerable to economic fluctuations
13. 18Because we assume the obligation to make wage, tax and regulatory payments in respect of some employees, we are exposed to client credit risks
14. 19Increases in unemployment claims could raise our state and federal unemployment tax rates that we may not be able to pass on to our customers
15. 20If we are unable to maintain our brand image and corporate reputation, our business may suffer
16. 21Our service agreements may be terminated on short notice, leaving us vulnerable to a significant loss of customers in a short period of time, if business or regulatory conditions change or events occur that negatively affect our reputation
17. 22We may be exposed to employment‑related claims and costs and periodic litigation that could adversely affect our business and results of operations
18. 23possible claims relating to misuse of customer confidential information, misappropriation of assets or other similar claims
19. 24We are dependent on certain key personnel and recruitment and retention of key employees may be difficult and expensive
20. 25We depend on attracting and retaining qualified employees; during periods of economic growth, our costs to do so increase and attracting and retaining people becomes more difficult
21. 26We do not have an expansive in-house sales staff and therefore rely extensively on referral partners
22. 27Failure to maintain health insurance coverage or significant increases in the cost of health insurance coverage could adversely affect our business and results of operations21% rewritten
23. 28Our business is subject to risks associated with healthcare reforms
24. 29Failure to comply with applicable data security and privacy regulations related to our health care offering could adversely affect our business
25. 30We face competition from several other companies
26. 31aggressively price products and services and increase benefits in ways that we may not be able to match financially72% rewritten
27. 32Our investment portfolio is subject to market and credit risks, which could adversely impact our financial condition or results of operations
28. 33We may be unable to draw on our revolving credit facility in the future
29. 34Changes in our income tax positions or adverse outcomes resulting from on-going or future tax audits could harm our business, operating results, financial condition and prospects
30. 35Our long-term growth strategy may include acquisitions which could be unsuccessful or cause disruptions to our business, which could adversely impact our financial condition or results of operations
31. 36Climate impacts may adversely affect our business, financial condition, and results of operationsNew

Risks Related to Our Regulatory Environment

1. 37Failure to interpret and comply with applicable federal and state payroll tax and unemployment tax laws could materially adversely affect our business, reputation, results of operations and financial condition66% rewritten
2. 38We operate in a complex regulatory environment, and failure to comply with applicable laws and regulations could adversely affect our business
3. 39If we are determined not to be an “employer” under certain laws and regulations, our clients may stop using our services, and we may be subject to additional liabilities
4. 40Changes in government regulations may result in restrictions or prohibitions applicable to the provision of employment services or the imposition of additional licensing, regulatory or tax requirements
5. 41increase taxes or make changes in the way in which taxes are calculated for providers of employment-related services
6. 42We may find it difficult to expand our business into additional states due to varying state regulatory requirements
7. 43Our wholly owned insurance companies are subject to substantial government regulation
8. 44Increasing regulatory focus on privacy and security issues and expanding laws and regulatory requirements could impact our business models and expose us to increased liability48% rewritten

Risks Related to Ownership of our Common Stock

1. 45Our stock price may be volatile or may decline, resulting in substantial losses for our stockholders
2. 46Maryland law and our Charter and bylaws contain provisions that could make the takeover of the Company more difficult