Roth Capital Partners

1

• Roth Capital Partners
• May 2006

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Changing the way America worksthrough
innovative human resource management
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Forward Looking Statements

• The issues addressed in this presentation may
  involve forward-looking statements which, along
  with other information presented that are not
  historical facts, are subject to a number of
  risks and uncertainties. Actual results may
  differ materially. Please refer to our 2005
  Annual Report on Form 10-K and to our other SEC
  filings for more information about the risks and
  uncertainties that could cause actual results to
  differ.

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Our Mission
GOOD PEOPLE, GOOD COMPANIES GREAT RESULTS!
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Key Investment Highlights

• Leading provider of HR management services
• Well-respected service provider in large,
  underserved market
• Focused on small and medium-sized businesses
• Scalable, substantial operating leverage
• Positioned for growth opportunities
• Pipeline of new business for organic growth
• Financial capacity to seek strategic acquisition
  opportunities
• Highly predictable and recurring revenue stream
• PEO contracts are annual with automatic renewals
  (30-day cancellation)
• PEO client retention rate is very high
• Strong value proposition in current market
  conditions
• Experienced management team

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Overview of BBSI

• Target Client 20 to 200 employees per
  business
• Service Delivery 36 branch offices (9 states)
  290 employees
• Sales Model Extensive broker network
  and direct sales
• EPS 2005 1.21 (up 53 vs.
  2004)
• 4Q 05 0.37 (up 37 vs.
  4Q 04)
• 1Q 06 0.12 (up 20 vs.
  1Q05
• net income up 45.8)
• 2005 and 2006 include the effect of an additional
  2.185 million shares outstanding in
• August 2005.

(1)
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Average Weekly Revenues 2003-2006
( in millions)
2003
2004
2005
2006
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BBSI Solves HR Problems
Benefit Programs
Work Comp Premiums
Competitive
Employee Retention
Employee Turnover
Save 25-30
Future Cost Protection
Cost Effective
Recruiting
Drug Testing
Screening
Workplace Safety
Discrimination Wrongful Term. Harassment Suits
Risk Mgmt
Claims Mgmt
Policies Procedures
Drug Testing
Proactive Training
Coaching Counseling
Qualified Employees
Regulatory Filings
Search
Compensation Advice
Full Compliance
Proper Hiring Procedures
Interview
Timely Tax Payments
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HR Responsibilities WITHOUT BBSI
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HR Responsibilities WITH BBSI
PEO Clients Are Able to Outsource Their HR
Functions
Report Claims to BBSI
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HR Function is Becoming More Critical

• Small and medium sized businesses lack internal
  resources to manage their human capital needs
• According to the U.S. Small Business
  Administration (SBA), between 1980 and 2000, the
  number of U.S. laws and regulations regarding
  employment policies and practices grew by about
  60 percent
• Proprietors of small or midsized businesses now
  spend up to 25 of their time on
  employment-related paperwork
• Workers compensation expense has increased
  significantly, especially in California over the
  past several years

BBSIs Pro HR approach enables clients to focus
on their core competencies
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PEO Industry Overview

• The PEO industry generates approximately 60
  billion in gross revenues annually
• There are about 700 PEOs that offer a wide array
  of employment services and benefits operating in
  50 states
• According to independent research conducted by
  the Society of Human Resource Management (SHRM)
  Foundation in May 2002, PEOs allow small to
  mid-sized business clients to "reduce costs and
  free up time to devote to revenue generating
  activities, improvements that can be instrumental
  to gaining competitive advantage"

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Projected 2006 Staffing Industry
60 billion (gross)
90 billion
22 billion
1 billion
Source Staffing Industry Report
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Geographic Footprint
36 Branch Offices in 9 states
MD 2 DE 1 NC 1
CA 14 OR 9 WA 4 ID 3 AZ 1 CO 1
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Growth Strategy

• Support, strengthen and expand branch office
  operations
• Increase client utilization of our services
• MIS
• Customer customization
• Seamless integration
• Penetrate other markets
• Pursue strategic acquisitions
• Pro HR 1/1/06

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Operating Strategy

• Broad scope of services
• Decentralized operations
• Economic incentives for employees on financial
  performance goals
• Control workers compensation costs through
  effective risk management

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Experienced Management Team
Name and Title
Years of Industry Experience
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Financial Themes

• Strong Top-Line Growth
• Diversified revenue stream from staffing
  services, permanent placement and PEO
• Predictable, recurring revenue stream from PEO
• Continue to develop new markets
• Focus on Profitability
• Optimization of processes
• Integration of Pro HR
• Strong Balance Sheet
• Virtually no debt
• Both capital and management capacity to pursue
  strategic acquisitions

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Highlights of 1Q06

• Continued strong growth in gross revenues
• - Record 235.3 mm for 1Q06
• gt Up 49.8 over 1Q05
• gt Strong growth in all regions
• EPS of .12 vs. .10 (1Q05)
• Net income up 45.8 over 1Q05
• Cash securities 63.4 mm at 3/31/06

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Focus on Profitability
( in millions)
( in millions)
Historical Gross Margin
Historical Net Income
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Annual Gross Revenues ( in millions)

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Quarterly Gross Revenue by Service ( in
millions)
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Quarterly Gross Revenues ( in millions)
250 to 255
235.3
213.1
183.6
Est.
2003
2004
2006
2005
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Quarterly Net Income ( in millions)
4.34
3.98
2.45
1.36
Est.
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Quarterly EPS
0.40
2.185 mm shares o/s August 2005
0.33to 0.35
0.26
0.12
Est.
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Key Balance Sheet Items
( in millions)
12/31/05
3/31/06

Cash and equivalents
61.4


59.4 4.0 153.9
Marketable securities
3.9


Workers compensation claims



13.5 1.2 87.9 153.9
14.3 1.4 85.9 144.3
Long-term debt


Stockholders' equity

 
Total Liabilities and Equity
 
 
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Key Investment Highlights

• Leading provider of HR management services
• Well-respected service provider in large,
  underserved market
• Focused on small and medium-sized businesses
• Scalable, substantial operating leverage
• Positioned for growth opportunities
• Pipeline of new business for organic growth
• Financial capacity to seek strategic acquisition
  opportunities
• Highly predictable and recurring revenue stream
• PEO contracts are annual with automatic renewals
  (30-day cancellation)
• PEO contract retention rate is very high
• Strong value proposition in current market
  conditions
• Experienced management team

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• Roth Capital Partners
• May 2006