IN VESTOR PR ESEN TATION NASDAQ: BBSI | AUGUST 2019 - PowerPoint PPT Presentation

IN VESTOR PR ESEN TATION NASDAQ: BBSI | AUGUST 2019

FORWARD-LOOKING STATEMENTS Statements in this presentation about future events or performance, including expectations for market opportunities and capacity, growth in new clients, the effectiveness of our referral-based channels, rate of client retention, gross billings and diluted earnings per share, are forward-looking statements which involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results expressed or implied by such forward-looking statements. Factors that could affect future results include economic conditions in our service areas and their effect on revenue levels, the effect of changes in our mix of services on gross margin, our ability to retain current clients and attract new clients, difficulties with integrating clients into our operations, the availability of financing or other sources of capital, the potential for material deviations from expected future workers' compensation claims experience, the workers’ compensation regulatory environment in our primary markets, litigation costs, the effect of government and investigations, security breaches or failures in our information technology systems, the effect of escalating medical costs on our business, the collectability of accounts receivable, the carrying value of deferred income tax assets and goodwill, and the effect of conditions in the global capital markets on our investment portfolio, among others. Other important factors that may affect our prospects are described in our 2018 Annual Report on Form 10-K. Although forward-looking statements help to provide complete information about our Company, investors should keep in mind that forward-looking statements are less reliable than historical information. We undertake no obligation to update or revise forward- looking statements in this presentation to reflect events or changes in circumstances that occur after the date of this presentation. 2

PURPOSE FOR APPROACHING THE MARKET 3

VISION: IMPROVE THE PROBABILITY OF SMALL BUSINESS SUCCESS Day 1: 5 years: 10 years: 100% 48% 32% 4 Source: Bureau of Labor Statistics.

HOW WE ARE POSITIONED TYPICAL OUTCOME: TYPICAL OUTCOME: TOOLS, SYSTEMS, PROCESSES WHITE PAPERS • Engage as a tactical subordinate • Engage as an expert guide • Minimal integration with the business • Highly integrated with the business TYPICAL OUTCOME: BLUEPRINT TO MORE EFFICIENTLY RUN BUSINESS 5

OUR VIEW TO THE BUSINESS CYCLE R E - L E V E R R E - L E V E R V O L U M E R E - L E V E R P L AT E AU I N F L E C T I O N O P E R AT I O N AL P O I N T I D E A T I M E 6

POTENTIAL BRAND IMPACT 1,000 ~6,500 ~20,000 ~60,000+ TODAY 7

FIELD STRUCTURE & FOOTPRINT 113 teams housed in 63 physical locations Decentralized structure Most clients within 50-mile radius of BBSI branch 8

HOW WE BUILD & SUPPORT OUR TEAMS $500K investment per team Capacity of ~90 clients Average: 30 employees per client Ability to lever operating margins 9

TRAITS OF BBSI PROFESSIONALS INNATELY CURIOUS ENTREPRENEURIAL STRONG BUSINESS ACUMEN OWNERSHIP MENTALITY SEASONED PROFESSIONAL 10

HOW WE BUILD PIPELINE REFERRAL-BASED CHANNELS PATH TO MUTUAL UNDERSTANDING ~25% YIELD +90% CLIENT RETENTION 11

HOW WE ALIGN WITH OUR CLIENTS OUTCOMES Stability Profitability Capacity Predictability Leverage 90%+ Retention 12

MARKET OPPORTUNITY BBSI works with BBSI works with approximately less than 1% 6,500 businesses of target market – roughly 3% in U.S. 13 Source: Statistics of U.S. Businesses, SBA Office of Advocacy, Updated Feb 9, 2015.

CURRENT STATE Leverage net client add to support referrals Expand within existing markets — build branches within branches Penetrate adjacent markets to meet demand 14

FUTURE STATE Leverage net client add to support referrals Expand within existing markets — build branches within branches Penetrate adjacent markets to meet demand 15

BRANCH STRATIFICATION 63 physical locations 18 Mature = run rate of $100 million + 20 Emerging = run rate of $30-$100 million 25 Developing = run rate of $1-$30 million 16

ANNUAL NET REVENUE GROWTH $Millions $941 $920 $841 $741 $636 $537 $404 2012 2013 2014 2015 2016 2017 2018 17

ANNUAL GROSS BILLINGS & PEO CLIENT GROWTH ~8% expected gross billings growth for next Gross Billings ($Millions) rolling 12-month period ² PEO Customers¹ ~6,400 ~5,600 ~$6,200 ~4,900 ~$5,663 ~4,000 $5,301 ~3,000 $4,693 ~2,600 ~2,200 $4,016 $3,357 $2,817 $2,081 2012 2013 2014 2015 2016 2017 2018 Thru Q1-20² 1. PEO customers defined as the active number of customer Federal Employee Identification Numbers. Please take into consideratio n this figure is a broad estimate of Company’s actual client count. 18 However, the Company does believe the number represents an effective proxy for the health of its business. 2018 client count rep resents the Company’s estimated client count at the end of the year. 2. Guidance effective on August 6, 2019.

ANNUAL DILUTED EPS PERFORMANCE $5.40 $4.98 $3.47 $3.30 $2.55 2015 2016 2017 2018 2019E¹ 19 1. Guidance effective on August 6, 2019. Assumes effective tax rate of ~22% and the expected range for workers’ compensation expense as a percentage of gross billings to be 4.4% to 4.6%.

DRIVERS OF FUTURE GROWTH ORGANIC GROWTH New client stack Runoff Same customer sales LEVERAGE Capacity utilization against infrastructure SCALE Expansion 20

KEY STATS: BBSI (NASDAQ) Trading Data (August 9, 2019) Annual Gross Billings Financial Highlights (June 30, 2019) ($Millions) Stock Price $89.10 Gross Billings (ttm) $5,788M 52 Week High/Low $91.92/$53.10 Income from Ops. (ttm) $48.9M $5,663 Avg. Daily Vol. (3 mo.) 42,363 Diluted EPS (ttm) $6.00 $5,301 Cash¹ (mrq) $545.2M Shares Outstanding 7.5M $4,693 Total Assets (mrq) $834.2M Institutional Holdings 85% $4,016 Total Debt (mrq) $4.1M Insider Holdings 5% Total Liabilities (mrq) $696.7M Valuation Measures Total Equity (mrq) $137.5M Market Cap $665.6M P/E (ttm) 14.3x Dividend Payout Ratio (ttm) 17% 2015 2016 2017 2018 Clients ~4000 ~4900 ~5600 ~6400 Source: CapitalIQ & Company filings. 21 ttm = trailing twelve months; mrq = most recent quarter. 1. Represents cash and cash equivalents, investments, and restricted cash and investments

INVESTOR CONTACT Cody Slach Gateway Investor Relations 949-574-3860 BBSI@gatewayir.com NASDAQ: BBSI | AUGUST 2019