CLEVELAND, Aug. 3, 2017 /PRNewswire/ --
SECOND-QUARTER HIGHLIGHTS:
- REVENUE +7.1%
- SAME-UNIT REVENUE +3.8%
- INCOME FROM CONTINUING OPERATIONS +36.1%
- EPS FROM CONTINUING OPERATIONS +25.0%
FIRST-HALF HIGHLIGHTS:
- REVENUE +7.4%
- SAME-UNIT REVENUE +2.9%
- INCOME FROM CONTINUING OPERATIONS +20.7%
- EPS FROM CONTINUING OPERATIONS +15.8%
CBIZ, Inc. (NYSE: CBZ) today announced second-quarter and
first-half results for the period ended June
30, 2017.
For the 2017 second quarter, CBIZ reported revenue of
$211.0 million, an increase of
$14.0 million, or 7.1%, over the
$197.0 million reported in 2016.
Same-unit revenue increased by $7.5
million, or 3.8%, for the quarter, compared with the same
period a year ago. Newly acquired operations contributed
$6.5 million, or 3.3%, to revenue in
the quarter. CBIZ reported income from continuing operations of
$11.4 million, or $0.20 per diluted share, in the 2017 second
quarter, compared with $8.4 million, or $0.16 per diluted share, for the same period a
year ago. Adjusted EBITDA for the second quarter was $23.1 million, compared with $20.8 million for the second quarter of
2016.
For the first half of 2017, CBIZ reported revenue of
$452.5 million, an increase of
$31.2 million, or 7.4%, over the
$421.3 million recorded for
2016. Same-unit revenue increased by $12.2
million, or 2.9%, compared with the same period a year ago.
Acquisitions contributed $19.0
million, or 4.5%, to revenue growth in the first six
months. Income from continuing operations was $36.4 million, or $0.66 per diluted share, for the first half of
2017, compared with $30.2 million, or $0.57 per diluted share, for the same period a
year ago. Adjusted EBITDA was $71.4 million, compared with $64.1 million for 2016.
Through July 31, 2017, the Company
repurchased approximately 571 thousand shares of its common
stock for approximately $8.2
million.
Jerry Grisko, CBIZ President and
Chief Executive Officer, said, "We are pleased to record revenue
growth of 7.4%, pre-tax income growth of 13.2%, and EPS growth of
15.8% for the first six months of this year compared with last
year. This growth reflects generally favorable business conditions
for small and midsized businesses and a healthy level of optimism
among our clients. We're pleased our clients continue to rely on us
for advice and solutions to help them achieve their goals."
Grisko continued, "We closed two acquisitions in the second
quarter, CMF Associates (CMF) and Slaton Insurance (Slaton). CMF
provides transaction and transition-focused financial, operational,
and human capital consulting to middle-market private equity firms
across the country. CMF represents a strategic step in
establishing CBIZ as an industry leader of advisory services in
this space. Slaton is a South
Florida-based property and casualty insurance agency and
enhances our specialty consulting offerings to various industries
including golf and country clubs. In total, we completed
three acquisitions in the first half of 2017 that are expected to
contribute approximately $23 million
of annualized revenue. With $140
million of unused financing capacity on our unsecured credit
facility, we have the sufficient funding to continue our strategic
acquisition program and focus on opportunities that further
position and strengthen our core business and also present a higher
potential for growth."
2017 Outlook Update
For 2017, CBIZ continues to expect total revenue growth within a
range of 6% to 8% compared with last year. The Company's
effective tax rate for the first six months was 36% with the
adoption of new stock compensation accounting under ASU 2016-09 in
2017. A number of factors could cause volatility in the
effective tax rate from time to time pursuant to ASU 2016-09, but
the Company expects a full-year 2017 effective tax rate of
approximately 36%, compared with the 39% to 40% range previously
communicated. As a result of the reduction in the effective
tax rate, the Company is now increasing its expectation for income
from continuing operations to grow within a range of 16% to 20%,
compared with original guidance of 12% to 14% growth, and earnings
per diluted share from continuing operations are now expected to
grow within a range of 12% to 15% over the $0.76 reported for 2016, compared with original
guidance of 8% to 10% growth. Fully-diluted weighted average share
count for the 2017 full year is expected to increase to
approximately 55.5 million shares.
Conference Call
CBIZ will host a conference call at 11:00
a.m. (ET) today to discuss its results. The call will be
webcast live for the media and the public, and can be accessed at
www.cbiz.com. Shareholders and analysts who would like to
participate in the call can register at
http://dpregister.com/10110788 to receive the dial-in number and
unique personal identification number. Participants may register at
any time, including up to and after the call start time.
A replay of the webcast will be made available approximately two
hours following the call on the Company's web site at www.cbiz.com.
For those without internet access, a replay of the call will also
be available starting at approximately 1:00
p.m. (ET), August 3, through
5:00 p.m. (ET), August 7, 2017. The toll-free dial-in number for
the replay is 1-877-344-7529. If you are listening from outside
the United States, dial
1-412-317-0088. The access code for the replay is 10110788.
About CBIZ
CBIZ, Inc. provides professional business services that help
clients better manage their finances, employees and insurance
needs. CBIZ provides its clients with financial services including
accounting, tax, financial advisory, government healthcare
consulting, risk advisory and valuation services. Benefits and
insurance services include group health benefits consulting,
property and casualty insurance, retirement plan consulting,
payroll and HR consulting. As one of the largest accounting,
insurance brokerage and valuation companies in the United States, the Company's services are
provided through more than 100 Company offices in 33 states. For
more information, please visit www.cbiz.com.
Forward-Looking Statements
Forward-looking statements in this release are made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to
differ materially from those projected. Such risks and
uncertainties include, but are not limited to, the Company's
ability to adequately manage and sustain its growth; the Company's
dependence on the current trend of outsourcing business services;
the Company's dependence on the services of its CEO and other key
employees; competitive pricing pressures; general business and
economic conditions; and changes in governmental regulation and tax
laws affecting the Company's insurance business or its business
services operations. A more detailed description of such risks and
uncertainties may be found in the Company's filings with the
Securities and Exchange Commission at www.sec.gov.
|
CBIZ,
INC.
|
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
|
THREE MONTHS ENDED
JUNE 30, 2017 and 2016
|
|
(In thousands,
except percentages and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
|
|
JUNE 30,
|
|
|
|
2017
|
|
%
|
|
2016
|
|
%
|
|
Revenue
|
|
$
211,016
|
|
100.0%
|
|
$
197,015
|
|
100.0%
|
|
Operating expenses
(1)
|
|
188,120
|
|
89.1%
|
|
173,996
|
|
88.3%
|
|
Gross
margin
|
|
22,896
|
|
10.9%
|
|
23,019
|
|
11.7%
|
|
Corporate general and
administrative expenses (1)
|
|
9,232
|
|
4.4%
|
|
8,346
|
|
4.2%
|
|
Operating
income
|
|
13,664
|
|
6.5%
|
|
14,673
|
|
7.5%
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(1,692)
|
|
-0.8%
|
|
(1,733)
|
|
-0.9%
|
|
Gain on sale of
operations, net
|
|
23
|
|
0.0%
|
|
50
|
|
0.0%
|
|
Other income, net (1)
(2)
|
|
3,764
|
|
1.8%
|
|
703
|
|
0.4%
|
|
Total other income
(expense), net
|
|
2,095
|
|
1.0%
|
|
(980)
|
|
-0.5%
|
|
Income from
continuing operations before income tax expense
|
|
15,759
|
|
7.5%
|
|
13,693
|
|
7.0%
|
|
Income tax
expense
|
|
4,343
|
|
|
|
5,306
|
|
|
|
Income from
continuing operations
|
|
11,416
|
|
5.4%
|
|
8,387
|
|
4.3%
|
|
Loss from operations
of discontinued businesses, net of tax
|
|
(418)
|
|
|
|
(258)
|
|
|
|
Net income
|
|
$
10,998
|
|
5.2%
|
|
$
8,129
|
|
4.1%
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
0.20
|
|
|
|
$
0.16
|
|
|
|
Discontinued
operations
|
|
(0.01)
|
|
|
|
-
|
|
|
|
Net income
|
|
$
0.19
|
|
|
|
$
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average common shares outstanding
|
|
55,831
|
|
|
|
53,079
|
|
|
|
Other data from
continuing operations:
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(3)
|
|
$
23,066
|
|
|
|
$
20,813
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
CBIZ sponsors a
deferred compensation plan, under which a CBIZ employee's
compensation deferral is held in a rabbi trust and invested
accordingly as directed by the employee. Income and expenses
related to the deferred compensation plan are included in
"Operating expenses" ($2 million expense in 2017 and $1 million
expense in 2016, or (0.9%) and (0.5%) of revenue, respectively) and
"Corporate general and administrative expenses" ($0.2 million
expense in 2017 and $0.3 million expense in 2016, or (0.1%) and
(0.2%) of revenue, respectively) and are directly offset by
deferred compensation gains or losses in "Other income, net" ($2.2
million income in 2017 and $1.3 million income in 2016, or 1.0% and
0.7% of revenue, respectively). The deferred compensation plan has
no impact on "Income from continuing operations before income tax
expense".
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Included in "Other
income, net" for the three months ended June 30, 2017 and 2016, is
income of $1.4 million and expense of $0.5 million, respectively,
related to net changes in the fair value of contingent
consideration related to CBIZ's prior
acquisitions.
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Refer to the
financial highlights tables for a reconciliation of Non-GAAP
financial measures to the nearest generally accepted accounting
principles ("GAAP") financial measure, and for additional
information as to the usefulness of the Non-GAAP financial measures
to shareholders and investors.
|
|
CBIZ,
INC.
|
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
|
SIX MONTHS ENDED
JUNE 30, 2017 and 2016
|
|
(In thousands,
except percentages and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIX MONTHS
ENDED
|
|
|
|
JUNE 30,
|
|
|
|
2017
|
|
%
|
|
2016
|
|
%
|
|
Revenue
|
|
$
452,475
|
|
100.0%
|
|
$
421,253
|
|
100.0%
|
|
Operating expenses
(1)
|
|
380,886
|
|
84.2%
|
|
352,113
|
|
83.6%
|
|
Gross
margin
|
|
71,589
|
|
15.8%
|
|
69,140
|
|
16.4%
|
|
Corporate general and
administrative expenses (1)
|
|
18,000
|
|
4.0%
|
|
18,591
|
|
4.4%
|
|
Operating
income
|
|
53,589
|
|
11.8%
|
|
50,549
|
|
12.0%
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(3,209)
|
|
-0.7%
|
|
(3,259)
|
|
-0.8%
|
|
Gain on sale of
operations, net
|
|
45
|
|
0.0%
|
|
151
|
|
0.0%
|
|
Other income, net (1)
(2)
|
|
6,501
|
|
1.5%
|
|
2,850
|
|
0.7%
|
|
Total other income
(expense), net
|
|
3,337
|
|
0.8%
|
|
(258)
|
|
-0.1%
|
|
Income from
continuing operations before income tax expense
|
|
56,926
|
|
12.6%
|
|
50,291
|
|
11.9%
|
|
Income tax
expense
|
|
20,484
|
|
|
|
20,106
|
|
|
|
Income from
continuing operations
|
|
36,442
|
|
8.1%
|
|
30,185
|
|
7.2%
|
|
Loss from operations
of discontinued businesses, net of tax
|
|
(570)
|
|
|
|
(288)
|
|
|
|
Net income
|
|
$
35,872
|
|
7.9%
|
|
$
29,897
|
|
7.1%
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
0.66
|
|
|
|
$
0.57
|
|
|
|
Discontinued
operations
|
|
(0.01)
|
|
|
|
(0.01)
|
|
|
|
Net income
|
|
$
0.65
|
|
|
|
$
0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average common shares outstanding
|
|
55,530
|
|
|
|
52,901
|
|
|
|
Other data from
continuing operations:
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(3)
|
|
$
71,369
|
|
|
|
$
64,081
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
CBIZ sponsors a
deferred compensation plan, under which a CBIZ employee's
compensation deferral is held in a rabbi trust and invested
accordingly as directed by the employee. Income and expenses
related to the deferred compensation plan are included in
"Operating expenses" ($4.9 million expense in 2017 and $1.5 million
expense in 2016, or (1.1%) and (0.4%) of revenue, respectively) and
"Corporate general and administrative expenses" ($0.5 million
expense in 2017 and $0.4 million expense in 2016, or (0.1%) of
revenue for both 2017 and 2016) and are directly offset by deferred
compensation gains or losses in "Other income, net" ($5.4 million
income in 2017 and $1.9 million income in 2016, or 1.2% and 0.5% of
revenue, respectively). The deferred compensation plan has no
impact on "Income from continuing operations before income tax
expense".
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Included in "Other
income, net" for the six months ended June 30, 2017 and 2016, is
income of $0.8 million and $0.7 million, respectively, related to
net changes in the fair value of contingent consideration related
to CBIZ's prior acquisitions.
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Refer to the
financial highlights tables for a reconciliation of Non-GAAP
financial measures to the nearest generally accepted accounting
principles ("GAAP") financial measure, and for additional
information as to the usefulness of the Non-GAAP financial measures
to shareholders and investors.
|
|
CBIZ,
INC.
|
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
SELECT SEGMENT
DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
SIX MONTHS
ENDED
|
|
|
|
JUNE 30,
|
|
JUNE 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
Financial
Services
|
|
$
132,591
|
|
$
122,856
|
|
$
291,224
|
|
$
275,063
|
|
Benefits and
Insurance Services
|
|
70,559
|
|
66,484
|
|
145,723
|
|
130,811
|
|
National
Practices
|
|
7,866
|
|
7,675
|
|
15,528
|
|
15,379
|
|
Total
|
|
$
211,016
|
|
$
197,015
|
|
$
452,475
|
|
$
421,253
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Margin
|
|
|
|
|
|
|
|
|
|
Financial
Services
|
|
$
16,740
|
|
$
15,869
|
|
$
55,984
|
|
$
54,579
|
|
Benefits and
Insurance Services
|
|
10,682
|
|
10,140
|
|
25,704
|
|
20,787
|
|
National
Practices
|
|
631
|
|
670
|
|
1,286
|
|
1,497
|
|
Operating expenses -
unallocated (1):
|
|
|
|
|
|
|
|
|
|
Other
|
|
(3,167)
|
|
(2,614)
|
|
(6,441)
|
|
(6,195)
|
|
Deferred
compensation
|
|
(1,990)
|
|
(1,046)
|
|
(4,944)
|
|
(1,528)
|
|
Total
|
|
$
22,896
|
|
$
23,019
|
|
$
71,589
|
|
$
69,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents operating
expenses not directly allocated to individual businesses, including
stock-based compensation, consolidation and integration charges,
and certain advertising expenses. "Operating expenses -
unallocated" also include gains or losses attributable to the
assets held in the Company's deferred compensation plan. These
gains or losses do not impact "Income from continuing operations
before income tax expense" as they are directly offset by the same
adjustment to "Other income (expense), net" in the Consolidated
Statements of Comprehensive Income. Net gains/losses recognized
from adjustments to the fair value of the assets held in the
deferred compensation plan are recorded as compensation expense in
"Operating expenses" and as income in "Other income (expense),
net".
|
CBIZ,
INC.
|
SELECT CASH FLOW
DATA
|
(In
thousands)
|
|
|
|
|
|
|
|
|
SIX MONTHS
ENDED
|
|
|
|
JUNE 30,
|
|
|
|
2017
|
|
2016
|
|
Net
income
|
|
$
35,872
|
|
$
29,897
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization expense
|
|
11,279
|
|
10,682
|
|
Amortization of
discount on notes and deferred financing costs
|
|
262
|
|
262
|
|
Bad debt expense, net
of recoveries
|
|
2,439
|
|
2,205
|
|
Adjustments to
contingent earnout liability
|
|
(1,032)
|
|
(714)
|
|
Employee stock
awards
|
|
2,790
|
|
2,842
|
|
Other
adjustments
|
|
(1,101)
|
|
464
|
|
Net income, after
adjustments to reconcile net income to net cash provided
by operating activities
|
|
50,509
|
|
45,638
|
|
Changes in assets and
liabilities, net of acquisitions and divestitures
|
|
(32,775)
|
|
(23,806)
|
|
Operating cash flows
provided by continuing operations
|
|
17,734
|
|
21,832
|
|
Operating cash flows
(used in) provided by discontinued operations
|
|
(540)
|
|
428
|
|
Net cash provided
by operating activities
|
|
17,194
|
|
22,260
|
|
Net cash provided
by (used in) investing activities
|
|
31,757
|
|
(32,196)
|
|
Net cash (used in)
provided by financing activities
|
|
(51,284)
|
|
17,578
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
$
(2,333)
|
|
$
7,642
|
|
|
CBIZ,
INC.
|
|
SELECT FINANCIAL
DATA AND RATIOS
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
JUNE 30,
|
|
DECEMBER
31,
|
|
|
|
2017
|
|
2016
|
|
Cash and cash
equivalents
|
|
$
1,161
|
|
$
3,494
|
|
Restricted
cash
|
|
34,924
|
|
27,880
|
|
Accounts receivable,
net
|
|
218,317
|
|
175,354
|
|
Current assets before
funds held for clients
|
|
279,891
|
|
228,135
|
|
Funds held for
clients - current and non-current
|
|
148,704
|
|
213,457
|
|
Goodwill and other
intangible assets, net
|
|
618,846
|
|
584,401
|
|
|
|
|
|
|
|
Total
assets
|
|
$
1,150,666
|
|
$
1,118,588
|
|
|
|
|
|
|
|
Current liabilities
before client fund obligations
|
|
$
141,434
|
|
$
125,592
|
|
Client fund
obligations
|
|
148,814
|
|
213,855
|
|
Notes payable -
long-term
|
|
1,696
|
|
1,721
|
|
Bank debt
|
|
209,510
|
|
190,049
|
|
|
|
|
|
|
|
Total
liabilities
|
|
$
627,304
|
|
$
638,567
|
|
|
|
|
|
|
|
Treasury
stock
|
|
$
(476,986)
|
|
$
(471,311)
|
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
$
523,362
|
|
$
480,021
|
|
|
|
|
|
|
|
Debt to
equity
|
|
40.6%
|
|
40.2%
|
|
Days sales
outstanding (DSO) - continuing operations (1)
|
|
88
|
|
76
|
|
|
|
|
|
|
|
Shares
outstanding
|
|
55,055
|
|
54,044
|
|
Basic weighted
average common shares outstanding
|
|
53,632
|
|
52,321
|
|
Diluted weighted
average common shares outstanding
|
|
55,530
|
|
53,513
|
|
|
|
|
|
|
(1)
|
DSO is provided for
continuing operations and represents accounts receivable, net at
the end of the period, divided by trailing twelve month daily
revenue. The Company has included DSO data because such data is
commonly used as a performance measure by analysts and investors
and as a measure of the Company's ability to collect on receivables
in a timely manner. DSO should not be regarded as an alternative or
replacement to any measurement of performance under GAAP. DSO at
June 30, 2016 was 83.
|
CBIZ,
INC.
|
GAAP
RECONCILIATION
|
Income from
Continuing Operations to Non-GAAP Financial Measures
(1)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
|
SIX MONTHS
ENDED
|
|
|
|
|
JUNE 30,
|
|
JUNE 30,
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
Income from
continuing operations
|
|
$
11,416
|
|
$
8,387
|
|
$
36,442
|
|
$
30,185
|
|
|
Interest
expense
|
|
1,692
|
|
1,733
|
|
3,209
|
|
3,259
|
|
|
Income tax
expense
|
|
4,343
|
|
5,306
|
|
20,484
|
|
20,106
|
|
|
Gain on sale of
operations, net
|
|
(23)
|
|
(50)
|
|
(45)
|
|
(151)
|
|
|
Depreciation
|
|
1,215
|
|
1,342
|
|
2,462
|
|
2,655
|
|
|
Amortization
|
|
4,423
|
|
4,095
|
|
8,817
|
|
8,027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
23,066
|
|
$
20,813
|
|
$
71,369
|
|
$
64,081
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
CBIZ reports its
financial results in accordance with GAAP. This table reconciles
Non-GAAP financial measures to the nearest GAAP financial measure,
"Income from continuing operations". Adjusted EBITDA is not defined
by GAAP and should not be regarded as an alternative or replacement
to any measurement of performance or cash flow under GAAP. Adjusted
EBITDA is commonly used by the Company, its shareholders and debt
holders to evaluate, assess and benchmark the Company's operational
results and to provide an additional measure with respect to the
Company's ability to meet future debt obligations.
|
|
View original
content:http://www.prnewswire.com/news-releases/cbiz-reports-second-quarter-and-first-half-2017-results-300498816.html
SOURCE CBIZ, Inc.