Barrett Business Services has disclosed that it fired CFO James D. Miller after learning that he made “unsupported journal entries” in financial records during each calendar quarter of 2013.
The staffing solutions provider said in a regulatory filing Wednesday that Miller notified its audit committee on March 3 that he had overstated some costs by about $12 million and understated its workers’ compensation expenses by roughly the same amount.
Barrett had previously disclosed in February it was considering whether restatement of financial statements for the quarters ended June 30, 2014, and Sept. 30, 2014, may be required.
On Wednesday, it said the audit committee had determined the financial statements for fiscal 2012, 2013 and 2014 and the first half of 2015 “must be restated and should not be relied upon,” but the committee “believes that the improper journal entries had no effect on the company’s consolidated balance sheets or on income from operations, net income, or earnings per share for any quarterly period in fiscal 2013 or for the year ended December 31, 2013.”
Barrett’s stock fell 33% Thursday on the news, closing at $24. In trading Friday, it regained some ground, closing up 13% at $27.54.
In 2014 the 50-year-old company reported revenue of $636 million and a $27 million net loss, compared with revenue of $533 million and a profit of nearly $18 million the prior year. Miller joined Barrett as controller in 1994 and was appointed CFO in 2008.
Asked why a CFO would “take such risks if cooking the books had no effect,” a person familiar with the company told the Seattle Times, “I wish I could answer that obvious logical question, but nobody seems to know.”
“It may be there are more shoes to drop,” the Times suggested, noting that, elsewhere in its regulatory filings, Barrett said $85 million in 2014 workers’ comp expenses was misclassified from the second quarter to the third.
To replace Miller, Barrett has named board member Thomas Carley as interim CFO.