CBIZ Reports Second-Quarter and First-Half 2009 Results
CBIZ reported revenue of $189.1 million for the second quarter ended June 30, 2009, an increase of 7.8% over the $175.4 million reported for the second quarter of 2008. Revenue from newly acquired operations, net of divestitures, contributed $22.6 million or 12.9% to revenue growth in the second quarter compared with the same period a year ago. Same-unit revenue declined by 5.1%, or $8.9 million. CBIZ reported income from continuing operations for the quarter of $6.6 million, or $0.11 per diluted share, compared with $6.9 million, or $0.11 per diluted share in the second quarter of 2008.
For the six-month period ended June 30, 2009, CBIZ reported revenue of $409.2 million, an increase of 9.8%, or $36.6 million over the $372.6 million reported for the comparable six-month period a year ago. Same-unit revenue decreased by 3.4%, or $12.7 million, for the first six months of 2009 compared to the same period a year ago. Acquisitions, net of divestitures, contributed $49.4 million to revenue growth for the first half of 2009. Net income from continuing operations was $24.7 million for the first six months of 2009, or $0.40 per diluted share, compared with $23.6 million for the first six months of 2008, or $0.37 per diluted share.
During the second quarter, the Company did not repurchase any shares of its common stock, and for the first six months, the Company has repurchased 838,000 shares of its common stock at a cost of approximately $6.7 million. The outstanding balance of the Company's unsecured bank line of credit at June 30, 2009 was $116.3 million compared with a balance of $125.0 million at December 31, 2008.
Concurrent with the implementation of FSP APB 14-1 relating to non-cash interest expense on its $100 million Convertible Notes, the Company is reporting Cash EPS, a non-GAAP measure designed to more clearly illustrate the impact of certain non-cash charges to income from continuing operations. For the quarter ended June 30, 2009, Cash EPS was $0.23 per diluted share compared with $0.20 per diluted share for the same quarter a year ago, an increase of 15.0%. For the six-month period ended June 30, 2009, Cash EPS was $0.63 per diluted share compared with $0.55 for the comparable six-month period a year ago, an increase of 14.6%. A schedule which reconciles Cash EPS with GAAP EPS is attached.
"We are pleased to report continued revenue and earnings growth for the first six months of 2009," stated Steven L. Gerard, Chairman and CEO. "The acquisitions we made in December of 2008 are performing well. Our same unit results continue to be impacted by the challenging economic environment in 2009. Importantly, cash flow continues to be strong for CBIZ and we continue to review an active pipeline of potential acquisitions. Taking into consideration today's business environment and the number of actions we have already taken to control expenses, we expect to grow earnings per share from continuing operations for 2009 by approximately 10% compared with 2008, which is within the range of our 10% to 15% growth expectations outlined at the beginning of the year," concluded Mr. Gerard.
CBIZ will host a conference call later this morning to discuss its results. The call will be webcast in a listen-only mode over the Internet for the media and the public, and can be accessed at www.cbiz.com. Shareholders and analysts wishing to participate in the conference call may dial 1-800-559-9370 several minutes before 11:00 a.m. (ET). If you are dialing from outside the United States, dial 1-847-619-6819. A replay of the call will be available starting at 1:00 p.m. (ET) July 29 through midnight (ET), August 5, 2009. The dial-in number for the replay is 1-877-213-9653. If you are listening from outside the United States, dial 1-630-652-3041. The access code for the replay is 24990487. A replay of the webcast will also be available on the Company's web site at www.cbiz.com.
CBIZ, Inc. provides professional business services that help clients better manage their finances, employees and technology. As one of the largest benefits specialists and one of the largest accounting, valuation and medical practice management companies in the United States, CBIZ provides its clients with financial services including accounting and tax, internal audit, merger and acquisition advisory, and valuation. Employee services include group benefits, property and casualty insurance, payroll, HR consulting and wealth management. CBIZ also provides information technology, hardware and software solutions, healthcare consulting and medical practice management. These services are provided through more than 140 Company offices in 36 states.
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 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 its 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.
For further information regarding CBIZ, call our Investor Relations Office at (216) 447-9000 or visit our web site at www.cbiz.com.
CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 2009 AND 2008
(In thousands, except percentages and per share data)
THREE MONTHS ENDED
JUNE 30,
2009 % 2008 (1) %
Revenue $189,072 100.0% $175,391 100.0%
Operating expenses 169,671 89.7% 154,540 88.1%
Gross margin 19,401 10.3% 20,851 11.9%
Corporate general and
administrative expenses 7,687 4.1% 7,791 4.4%
Operating income 11,714 6.2% 13,060 7.5%
Other income (expense):
Interest expense (3,535) -1.9% (2,762) -1.6%
Gain on sale of operations, net 14 0.0% 221 0.1%
Other income, net (2) 2,897 1.6% 335 0.2%
Total other expense, net (624) -0.3% (2,206) -1.3%
Income from continuing operations
before income tax expense 11,090 5.9% 10,854 6.2%
Income tax expense 4,451 3,923
Income from continuing operations 6,639 3.5% 6,931 4.0%
Income (loss) from operations of
discontinued businesses, net of
tax 13 (196)
Gain on disposal of discontinued
businesses, net of tax 144 9
Net income $6,796 3.6% $6,744 3.8%
Diluted earnings per share:
Continuing operations $0.11 $0.11
Discontinued operations - -
Net income $0.11 $0.11
Diluted weighted average common
shares outstanding 61,870 62,440
Other data from continuing
operations:
EBIT (3) $14,611 $13,395
EBITDA (3) $19,678 $17,193
(1) Certain amounts in the 2008 financial data have been reclassified to
conform to the current year presentation and revised to reflect the
retroactive application of FSP APB 14-1.
(2) Includes a net gain of $2,485 and a net loss of $131 for the three
months ended June 30, 2009 and 2008, respectively, attributable to
assets held in the Company's deferred compensation plan. These net
gains and losses do not impact "income from continuing operations
before income tax expense" as they are directly offset by
compensation adjustments to the Plan participants. Compensation is
included in "operating expenses" and "corporate general and
administrative expenses."
(3) EBIT represents income from continuing operations before income
taxes, interest expense, and gain on sale of divested operations.
EBITDA represents EBIT before depreciation and amortization expense
of $5,067 and $3,798 for the three months ended June 30, 2009 and
2008, respectively. The Company has included EBIT and EBITDA 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
service debt. EBIT and EBITDA should not be regarded as an
alternative or replacement to any measurement of performance under
generally accepted accounting principles.
CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2009 AND 2008
(In thousands, except percentages and per share data)
SIX MONTHS ENDED
JUNE 30,
2009 % 2008 (1) %
Revenue $409,249 100.0% $372,554 100.0%
Operating expenses 347,940 85.0% 312,681 83.9%
Gross margin 61,309 15.0% 59,873 16.1%
Corporate general and
administrative expenses 15,396 3.8% 15,043 4.1%
Operating income 45,913 11.2% 44,830 12.0%
Other income (expense):
Interest expense (7,040) -1.7% (5,342) -1.4%
Gain on sale of operations, net 94 0.0% 241 0.1%
Other income (expense), net (2) 2,305 0.6% (1,012) -0.3%
Total other expense, net (4,641) -1.1% (6,113) -1.6%
Income from continuing operations
before income tax expense 41,272 10.1% 38,717 10.4%
Income tax expense 16,581 15,093
Income from continuing operations 24,691 6.0% 23,624 6.3%
Income (loss) from operations of
discontinued businesses, net of tax 135 (194)
Gain (loss) on disposal of
discontinued businesses, net of tax 151 (440)
Net income $24,977 6.1% $22,990 6.2%
Diluted earnings (loss) per share:
Continuing operations $0.40 $0.37
Discontinued operations - (0.01)
Net income $0.40 $0.36
Diluted weighted average common
shares outstanding 61,891 63,320
Other data from continuing
operations:
EBIT (3) $48,218 $43,818
EBITDA (3) $58,373 $51,433
(1) Certain amounts in the 2008 financial data have been reclassified to
conform to the current year presentation and revised to reflect the
retroactive application of FSP APB 14-1.
(2) Includes net gain of $1,649 and a net loss of $1,919 for the six
months ended June 30, 2009 and 2008, respectively, attributable to
assets held in the Company's deferred compensation plan. These net
gains and losses do not impact "income from continuing operations
before income tax expense" as they are directly offset
by compensation adjustments to the Plan participants. Compensation is
included in "operating expenses" and "corporate general and
administrative expenses."
(3) EBIT represents income from continuing operations before income
taxes, interest expense, and gain on sale of divested operations.
EBITDA represents EBIT before depreciation and amortization expense
of $10,155 and $7,615 for the six months ended June 30, 2009 and
2008, respectively. The Company has included EBIT and EBITDA 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
service debt. EBIT and EBITDA should not be regarded as an
alternative or replacement to any measurement of performance under
generally accepted accounting principles.
CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
(In thousands, except per share data)
SELECT SEGMENT DATA
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2009 2008 (1) 2009 2008 (1)
Revenue
Financial Services $94,138 $75,157 $218,831 $174,148
Employee Services 42,515 47,307 87,978 94,562
Medical Management
Professionals 41,874 41,899 81,754 82,665
National Practices 10,545 11,028 20,686 21,179
Total $189,072 $175,391 $409,249 $372,554
Gross Margin
Financial Services $10,702 $9,273 $42,257 $36,528
Employee Services 7,157 8,318 15,194 16,815
Medical Management
Professionals 6,603 5,531 11,315 10,151
National Practices 417 766 511 908
Operating expenses
- unallocated (2) (5,478) (3,037) (7,968) (4,529)
Total $19,401 $20,851 $61,309 $59,873
(1) Certain amounts in the 2008 financial data have been reclassified to
conform to the current year presentation.
(2) Represents operating expenses not directly allocated to individual
businesses, including stock based compensation, consolidation and
integration charges and certain advertising expenses. Unallocated
operating expenses also include a net gain of $2,156 and a net loss
of $101 for the three months ended June 30, 2009 and 2008,
respectively, and a net gain of $1,448 and a net loss of $1,615 for
the six months ended June 30, 2009 and 2008, respectively,
attributable to assets held in the Company's deferred compensation
plan.
CASH EARNINGS AND PER SHARE DATA
Reconciliation of Income from Continuing Operations to Cash Earnings
from Continuing Operations (3)
THREE MONTHS ENDED JUNE 30,
2009 Per Share 2008 Per Share
Income from Continuing
Operations $6,639 $0.11 $6,931 $0.11
Selected non-cash items:
Depreciation and
Amortization 5,067 0.08 3,798 0.06
Non-cash interest
on convertible note 978 0.02 906 0.01
Stock based compensation 1,235 0.02 1,154 0.02
Non-cash items 7,280 0.12 5,858 0.09
Cash earnings
- Continuing Operations $13,919 $0.23 $12,789 $0.20
Diluted weighted average
common shares 61,870 62,440
SIX MONTHS ENDED JUNE 30,
2009 Per Share 2008 Per Share
Income from Continuing
Operations $24,691 $0.40 $23,624 $0.37
Selected non-cash items:
Depreciation and
amortization 10,155 0.16 7,615 0.12
Non-cash interest on
convertible note 1,943 0.03 1,800 0.03
Stock based compensation 2,180 0.04 1,825 0.03
Non-cash items 14,278 0.23 11,240 0.18
Cash earnings
- Continuing Operations $38,969 $0.63 $34,864 $0.55
Diluted weighted average
common shares 61,891 63,320
(3) The Company believes cash earnings and cash earnings per diluted
share (non-GAAP measures) more clearly illustrate the impact of
certain non-cash charges to income from continuing operations and are
a useful measure for the Company and its analysts. Cash earnings is
defined as income from continuing operations excluding depreciation
and amortization, non-cash interest expense and non-cash stock based
compensation expense. Cash earnings per diluted share is calculated
by dividing cash earnings by the number of weighted average diluted
common shares outstanding for the period indicated. Cash earnings and
cash earnings per diluted share should not be regarded as a
replacement or alternative of performance under generally accepted
accounting principles.
CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
(In thousands, except percentages and ratios)
SELECT BALANCE SHEET DATA AND RATIOS
JUNE 30, DECEMBER 31,
2009 2008 (1)
Cash and cash equivalents $10,124 $9,672
Restricted cash $12,414 $15,786
Accounts receivable, net $149,678 $129,164
Current assets before funds held for clients $193,814 $178,565
Funds held for clients - current and
non-current $70,245 $113,121
Goodwill and other intangible assets, net $348,518 $350,216
Total assets $669,467 $698,592
Current liabilities before client fund
obligations $86,059 $90,193
Client fund obligations $73,233 $116,638
Convertible notes $91,829 $89,887
Bank debt $116,300 $125,000
Total liabilities $405,631 $456,993
Treasury stock $(263,407) $(256,295)
Total stockholders' equity $263,836 $241,599
Debt to equity (2) 78.9% 88.9%
Days sales outstanding (DSO) - continuing
operations (3) 69 67
Shares outstanding 62,300 62,472
Basic weighted average common shares
outstanding 61,366 61,839
Diluted weighted average common shares
outstanding 61,891 62,572
(1) Certain amounts in the 2008 financial data have been reclassified to
conform to the current year presentation and revised to reflect the
retroactive application of FSP APB 14-1.
(2) Ratio is convertible notes and bank debt divided by total
stockholders' equity.
(3) DSO is provided for continuing operations and represents accounts
receivable (before the allowance for doubtful accounts) and unbilled
revenue (net of realization adjustments) at the end of the period,
divided by trailing twelve month daily revenue. The calculation of
DSO for the six months ended June 30, 2009 and the twelve months
ended December 31, 2008 excludes accounts receivable, unbilled
revenue and daily revenue for the two businesses that were acquired
on December 31, 2008. 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
generally accepted accounting principles. DSO at June 30, 2008 was 69
days.
SOURCE CBIZ, Inc.
http://www.cbiz.com