News Release

CBIZ, INC.

FINANCIAL HIGHLIGHTS (UNAUDITED)

THREE MONTHS ENDED MARCH 31, 2022 AND 2021

(In thousands, except percentages and per share data)

Three Months Ended March 31,

2022

%

2021

%

Revenue

$ 391,722

100.0%

$ 300,730

100.0%

Operating expenses ⁽¹⁾

290,299

74.1

223,971

74.5

Gross margin

101,423

25.9

76,759

25.5

Corporate general and administrative expenses ⁽¹⁾

16,309

4.2

14,483

4.8

Operating income

85,114

21.7

62,276

20.7

Other (expense) income:

Interest expense

(1,259)

(0.3)

(877)

(0.3)

Other (expense) income, net ^{(1) (2)}

(6,403)

(1.6)

4,789

1.6

Total other (expense) income, net

(7,662)

(1.9)

3,912

1.3

Income  from continuing operations before income tax expense

77,452

19.8

66,188

22.0

Income tax expense

19,321

15,972

Income  from continuing operations

58,131

14.8

50,216

16.7

Loss from operations of discontinued businesses, net of tax

(4)

(7)

Net Income

$  58,127

14.8%

$  50,209

16.7%

Diluted income per share:

Continuing operations

$      1.10

$      0.92

Discontinued operations

—

—

Net income

$      1.10

$      0.92

Diluted weighted average common shares outstanding

52,955

54,436

Other data from continuing operations:

Adjusted EBITDA ⁽³⁾

$  92,896

$  73,317

(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" and "Corporate general and administrative expenses," and are directly offset by deferred compensation gains or losses in "Other (expense) income, net." The deferred compensation plan has no impact on "Income from continuing operations before income tax expense."

Income and expenses related to the deferred compensation plan for the three months ended March 31, 2022, and 2021 are as follows (in thousands):

Three Months Ended March 31,

2022

% of Revenue

2021

% of Revenue

Operating (income) expenses

$      (5,667)

(1.4)%

$       4,616

1.5%

Corporate general and administrative (income) expenses

(811)

(0.2)%

496

0.2%

Other (expense) income, net

(6,478)

(1.6)%

5,112

1.7%

Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the three months ended March 31, 2022, and 2021 are as follows (in thousands):

Three Months Ended March 31,

2022

2021

As
Reported

Deferred
Compensation
Plan

Adjusted

% of
Revenue

As
Reported

Deferred
Compensation
Plan

Adjusted

% of
Revenue

Gross margin

$ 101,423

$      (5,667)

$  95,756

24.4%

$  76,759

$       4,616

$  81,375

27.1%

Operating income

85,114

(6,478)

78,636

20.1%

62,276

5,112

67,388

22.4%

Other (expense) income, net

(6,403)

6,478

75

— %

4,789

(5,112)

(323)

(0.1)%

Income from continuing operations
before income tax expense

77,452

—

77,452

19.8%

66,188

—

66,188

22.0%

(2)

Included in "Other (expense) income, net" for the three months ended March 31, 2022 and 2021, is expense of $0.6 million and expense of $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 most directly comparable 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 March 31,

2022

2021

Revenue

Financial Services

$            288,746

$            204,149

Benefits and Insurance Services

92,486

87,239

National Practices

10,490

9,342

Total

$            391,722

$            300,730

Gross Margin

Financial Services

$              78,946

$              62,403

Benefits and Insurance Services

19,829

20,306

National Practices

914

801

Operating expenses - unallocated (1):

Other expense

(3,933)

(2,135)

Deferred compensation

5,667

(4,616)

Total

$            101,423

$              76,759

(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 includes gains or losses attributable to the assets held in a rabbi trust associated with 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 (expense) income, net" in the Consolidated Statements of Comprehensive Income. Net gains/losses recognized from adjustments to the fair value of the assets held in the rabbi trust are recorded as compensation expense (income) in "Operating expenses" and "Corporate, general and administrative expenses," and offset in "Other (expense) income, net."

CBIZ, INC.

SELECT CASH FLOW DATA (UNAUDITED)

(In thousands)

Three Months Ended March 31,

2022

2021

Net income

$         58,127

$         50,209

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization expense

8,173

6,252

Bad debt expense, net of recoveries

549

58

Adjustments to contingent earnout liability, net

642

660

Stock-based compensation expense

3,689

2,855

Other noncash adjustments

2,996

3,444

Net income, after adjustments to reconcile net income to net cash used in
  operating activities

74,176

63,478

Changes in assets and liabilities, net of acquisitions and divestitures

(125,062)

(78,299)

Operating cash flows used in continuing operations

(50,886)

(14,821)

Operating cash used in discontinued operations

(4)

(6)

Net cash used in operating activities

(50,890)

(14,827)

Net cash (used in) provided by investing activities

(81,531)

229

Net cash provided by (used in) financing activities

170,446

(2,960)

Net increase (decrease) in cash, cash equivalents and restricted cash

38,025

(17,558)

Cash, cash equivalents and restricted cash at beginning of year

$       150,474

$       170,335

Cash, cash equivalents and restricted cash at end of period

$       188,499

$       152,777

Reconciliation of cash, cash equivalents and restricted cash to the
consolidated balance sheet:

Cash and cash equivalents

$              558

$           6,778

Restricted cash

33,394

27,618

Cash equivalents included in funds held for clients

154,547

118,381

Total cash, cash equivalents and restricted cash

$       188,499

$       152,777

CBIZ, INC.

SELECT FINANCIAL DATA AND RATIOS (UNAUDITED)

(In thousands)

March 31, 2022

December 31, 2021

Cash and cash equivalents

558

1,997

Restricted cash

33,394

30,383

Accounts receivable, net

365,758

242,168

Current assets before funds held for clients

412,494

293,765

Funds held for clients

199,065

157,909

Goodwill and other intangible assets, net

951,902

840,783

Total assets

1,942,444

1,627,934

Current liabilities before client fund obligations

257,761

265,174

Client fund obligations

200,614

158,115

Total long-term debt, net

298,541

154,851

Total liabilities

1,182,596

923,386

Treasury stock

(707,088)

(694,716)

Total stockholders' equity

759,848

704,548

Debt to equity

39.3%

22.0%

Days sales outstanding (DSO) - continuing operations ⁽¹⁾

94

71

Shares outstanding

52,294

52,038

Basic weighted average common shares outstanding

52,119

52,637

Diluted weighted average common shares outstanding

52,955

53,723

(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 on March 31, 2021 was 91.

CBIZ, INC.

GAAP RECONCILIATION

Income from Continuing Operations to Adjusted EBITDA⁽¹⁾

(In thousands)

Three Months Ended March 31,

2022

2021

Income from continuing operations

$               58,131

$               50,216

Interest expense

1,259

877

Income tax expense

19,321

15,972

Transaction costs related to Marks Paneth ⁽²⁾

1,329

—

Integration & retention costs related to Marks Paneth ⁽²⁾

4,684

—

Depreciation

2,779

2,553

Amortization

5,394

3,699

Adjusted EBITDA

$               92,896

$               73,317

(1)

CBIZ reports its financial results in accordance with GAAP. This table reconciles Adjusted EBITDA to the most directly comparable 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 under GAAP. Adjusted EBITDA is commonly used by the Company, its shareholders and debt holders as a performance measurement to evaluate, assess and benchmark the Company's operational results.

(2)

These costs include, but are not limited to, certain consulting, technology, personnel, as well as other first year operating and general administrative costs that are non-recurring in nature.

CBIZ, INC.

GAAP RECONCILIATION

Income and Diluted Earnings Per Share ("EPS") from Continuing Operations to Adjusted Income and EPS⁽¹⁾

(In thousands, except per share data)

Three Months Ended March 31, 2022

Three Months Ended March 31, 2021

Amounts

EPS

Amounts

EPS

Income from continuing operations

$      58,131

$          1.10

$      50,216

$          0.92

Adjustments:

Transaction costs related to Marks Paneth ⁽²⁾

1,329

0.03

—

—

Integration & retention costs related to Marks Paneth ⁽²⁾

4,684

0.09

—

—

Income tax effect related to adjustments

(1,500)

(0.04)

—

—

Adjusted income from continuing operations

$      62,644

$          1.18

$      50,216

$          0.92

(1)

CBIZ reports its financial results in accordance with GAAP. This table reconciles Adjusted Income and Adjusted EPS to the most directly comparable GAAP financial measures, "Income from continuing operations" and "Diluted earnings per share from continuing operations." Adjusted Income and Adjusted EPS are not defined by GAAP and should not be regarded as an alternative or replacement to any measurement of performance under GAAP. Adjusted Income and Adjusted EPS, which excludes significant non-operating related gains and losses, are used by the Company for its shareholders and debt holders as a performance measure to evaluate, assess and benchmark the Company's operational results.

(2)

These costs include, but are not limited to, certain consulting, technology, personnel, as well as other first year operating and general administrative
costs that are non-recurring in nature.

CBIZ, INC.

GAAP RECONCILIATION

Full Year 2022 EPS from Continuing Operations Guidance to Full Year 2022 Adjusted Diluted EPS

Full Year 2022 Guidance

Low

High

Diluted EPS  - GAAP Guidance

$                1.89

$                  1.93

Transaction and integration costs related to Marks Paneth ⁽¹⁾

0.10

0.10

Adjusted Diluted EPS Guidance

$                1.99

$                  2.03

GAAP Diluted EPS for 2021

$                1.32

$                  1.32

Adjusted Diluted EPS for 2021 ⁽²⁾

$                1.66

$                  1.66

GAAP Diluted EPS Range 

43%

46%

 Adjusted Diluted EPS Range

20%

22%

(1)

Includes estimated transaction and integration costs related to the Marks Paneth acquisition. Such costs include, but are not limited to, certain consulting, technology, personnel, as well as other first year operating and general administrative costs that are non-recurring in nature.

(2)

A reconciliation between income from continuing operations and adjusted income from continuing operations and a reconciliation between GAAP Diluted EPS and Adjusted Diluted EPS for fiscal year ended December 31, 2021 are presented as follows:

Twelve Months Ended December 31, 2021

In thousands

EPS

Income from continuing operations

$                  70,911

$                      1.32

Adjustments:

Gain on sale of operations, net

(6,311)

(0.12)

Legal settlement, net

30,468

0.57

Income tax effect related to adjustments

(5,746)

(0.11)

Adjusted income from continuing operations

$                  89,322

$                      1.66