CBIZ REPORTS SECOND-QUARTER AND FIRST-HALF 2022 RESULTS AND RAISES FULL-YEAR 2022 GUIDANCE
SECOND-QUARTER HIGHLIGHTS:
- TOTAL REVENUE UP 29.9%; SAME-UNIT REVENUE UP 11.4%
- GAAP EPS UP 275.0%; ADJUSTED EPS UP 26.0%
- INCOME FROM CONTINUING OPERATIONS UP 262.9%; ADJUSTED EBITDA UP 29.9%
FIRST-HALF HIGHLIGHTS:
- TOTAL REVENUE UP 30.1%; SAME-UNIT REVENUE UP 10.5%
- GAAP EPS UP 56.0%; ADJUSTED EPS UP 26.6%
- INCOME FROM CONTINUING OPERATIONS UP 52.0%; ADJUSTED EBITDA UP 27.9%
For the 2022 second quarter, CBIZ recorded revenue of
Adjusted income from continuing operations was
For the six months ended
Adjusted income from continuing operations was
In the second quarter of 2021, the Company recorded a non-recurring settlement charge of
During the first half ended
"As a result of our strong organic growth for the first half of the year combined with the performance of our recent acquisitions, we are raising our full-year 2022 guidance to reflect anticipated revenue growth between 23% and 25% and growth in Adjusted earnings per share between 25% and 27%," Grisko concluded.
2022 Outlook
- The Company increased its revenue growth expectations to within a range of 23% to 25% over the prior year, up from previous guidance of 19% to 21% in revenue growth.
- Although multiple factors may impact the tax rate, the Company expects an effective tax rate of approximately 25%.
- The Company expects a weighted average fully diluted share count of 52.5 million to 53.0 million shares.
- On a GAAP basis, the Company expects full-year fully diluted earnings per share from continuing operations to grow within a range of 45% to 48% per share, over the
$1.32 per share reported in 2021, up from previous guidance of 43% to 46% per share. - The Company expects Adjusted fully diluted earnings per share from continuing operations to grow within a range of 25% to 27% over the Adjusted
$1.66 reported for 2021, up from previous guidance of a 20% to 22% increase per share. A schedule reconciling GAAP Diluted EPS to Non-GAAP Adjusted Diluted EPS is attached.
Conference Call
CBIZ will host a conference call at
About CBIZ
CBIZ is a leading provider of financial, insurance and advisory services to businesses throughout
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 impact of COVID-19 on the Company's business and operations and those of our clients; 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
FINANCIAL HIGHLIGHTS (UNAUDITED) THREE MONTHS ENDED (In thousands, except percentages and per share data)
|
||||||||
Three Months Ended |
||||||||
2022 |
% |
2021 |
% |
|||||
Revenue |
|
100.0 % |
|
100.0 % |
||||
Operating expenses (1) |
289,736 |
80.0 |
236,934 |
85.0 |
||||
Gross margin |
72,216 |
20.0 |
41,714 |
15.0 |
||||
Corporate general and administrative expenses (1) |
10,926 |
3.0 |
13,816 |
5.0 |
||||
Legal settlement, net |
— |
— |
30,468 |
10.9 |
||||
Operating income (loss) |
61,290 |
17.0 |
(2,570) |
(0.9) |
||||
Other (expense) income: |
||||||||
Interest expense |
(1,645) |
(0.5) |
(959) |
(0.3) |
||||
Gain on sale of operations, net |
135 |
— |
6,385 |
2.3 |
||||
Other (expense) income, net (1) (2) |
(15,898) |
(4.4) |
8,373 |
3.0 |
||||
Total other (expense) income, net |
(17,408) |
(4.9) |
13,799 |
5.0 |
||||
Income from continuing operations before income tax expense |
43,882 |
12.1 |
11,229 |
4.1 |
||||
Income tax expense |
12,622 |
2,616 |
||||||
Income from continuing operations |
31,260 |
8.6 |
8,613 |
3.1 |
||||
Loss from operations of discontinued businesses, net of tax |
(5) |
(6) |
||||||
Net Income |
$ 31,255 |
8.6 % |
$ 8,607 |
3.1 % |
||||
Diluted income per share: |
||||||||
Continuing operations |
$ 0.60 |
$ 0.16 |
||||||
Discontinued operations |
— |
— |
||||||
Net income |
$ 0.60 |
$ 0.16 |
||||||
Diluted weighted average common shares outstanding |
52,531 |
53,769 |
||||||
Other data from continuing operations: |
||||||||
Adjusted EBITDA (3) |
$ 55,732 |
$ 42,895 |
||||||
Adjusted EPS (3) |
$ 0.63 |
$ 0.50 |
(1) |
CBIZ sponsors a deferred compensation plan, under which a CBIZ employee's compensation deferral is held in a rabbi trust and invested |
Income and expenses related to the deferred compensation plan for the three months ended |
||||||||
Three Months Ended |
||||||||
2022 |
% of Revenue |
2021 |
% of Revenue |
|||||
Operating (income) expenses |
$ (13,338) |
(3.7) % |
$ 6,761 |
2.4 % |
||||
Corporate general and administrative (income) expenses |
(1,811) |
(0.5) % |
850 |
0.3 % |
||||
Other (expense) income, net |
(15,149) |
(4.1) % |
7,611 |
2.7 % |
Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the three months ended |
|||||||||||||||
Three Months Ended |
|||||||||||||||
2022 |
2021 |
||||||||||||||
As |
Deferred |
Adjusted |
% of |
As |
Deferred |
Adjusted |
% of |
||||||||
Gross margin |
$ 72,216 |
$ (13,338) |
$ 58,878 |
16.3 % |
$ 41,714 |
$ 6,761 |
$ 48,475 |
17.4 % |
|||||||
Operating income (expense) |
61,290 |
(15,149) |
46,141 |
12.7 % |
(2,570) |
7,611 |
5,041 |
1.8 % |
|||||||
Other (expense) income, net |
(15,898) |
15,149 |
(749) |
(0.2) % |
8,373 |
(7,611) |
762 |
0.3 % |
|||||||
Income from continuing operations before income tax expense |
43,882 |
— |
43,882 |
12.1 % |
11,229 |
— |
11,229 |
4.0 % |
(2) |
Included in "Other (expense) income, net" for the three months ended |
(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 |
FINANCIAL HIGHLIGHTS (UNAUDITED) SIX MONTHS ENDED (In thousands, except percentages and per share data)
|
||||||||
Six Months Ended |
||||||||
2022 |
% |
2021 |
% |
|||||
Revenue |
|
100.0 % |
|
100.0 % |
||||
Operating expenses (1) |
580,035 |
77.0 |
460,905 |
79.6 |
||||
Gross margin |
173,639 |
23.0 |
118,473 |
20.4 |
||||
Corporate general and administrative expenses (1) |
27,235 |
3.6 |
28,299 |
4.9 |
||||
Legal settlement, net |
— |
— |
30,468 |
5.3 |
||||
Operating income |
146,404 |
19.4 |
59,706 |
10.2 |
||||
Other income (expense): |
||||||||
Interest expense |
(2,904) |
(0.4) |
(1,836) |
(0.3) |
||||
Gain on sale of operations, net |
135 |
— |
6,385 |
1.1 |
||||
Other (expense) income, net (1) (2) |
(22,301) |
(3.0) |
13,162 |
2.3 |
||||
Total other (expense) income, net |
(25,070) |
(3.4) |
17,711 |
3.1 |
||||
Income from continuing operations before income tax expense |
121,334 |
16.0 |
77,417 |
13.3 |
||||
Income tax expense |
31,943 |
18,588 |
||||||
Income from continuing operations |
89,391 |
11.9 |
58,829 |
10.2 |
||||
Loss from operations of discontinued businesses, net of tax |
(9) |
(13) |
||||||
Net income |
$ 89,382 |
11.9 % |
$ 58,816 |
10.2 % |
||||
Diluted income per share: |
||||||||
Continuing operations |
$ 1.70 |
$ 1.09 |
||||||
Discontinued operations |
— |
— |
||||||
Net income |
$ 1.70 |
$ 1.09 |
||||||
Diluted weighted average common shares outstanding |
52,736 |
54,109 |
||||||
Other data from continuing operations: |
||||||||
Adjusted EBITDA (3) |
|
|
||||||
Adjusted EPS (3) |
$ 1.81 |
$ 1.43 |
(1) |
CBIZ sponsors a deferred compensation plan, under which a CBIZ employee's compensation deferral is held in a rabbi trust and invested accordingly |
Income and expenses related to the deferred compensation plan for the six months ended |
||||||||
Six Months Ended |
||||||||
2022 |
% of Revenue |
2021 |
% of Revenue |
|||||
Operating (income) expenses |
$ (19,005) |
(2.5) % |
$ 11,377 |
2.0 % |
||||
Corporate general and administrative (income) expenses |
(2,622) |
(0.3) % |
1,346 |
0.2 % |
||||
Other (expense) income, net |
(21,627) |
(2.9) % |
12,723 |
2.2 % |
Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the six months ended |
|||||||||||||||
Six Months Ended |
|||||||||||||||
2022 |
2021 |
||||||||||||||
As |
Deferred |
Adjusted |
% of |
As |
Deferred |
Adjusted |
% of |
||||||||
Gross margin |
|
$ (19,005) |
|
20.5 % |
|
$ 11,377 |
|
22.4 % |
|||||||
Operating income (expense) |
146,404 |
(21,627) |
124,777 |
16.6 % |
59,706 |
12,723 |
72,429 |
12.5 % |
|||||||
Other (expense) income, net |
(22,301) |
21,627 |
(674) |
(0.1) % |
13,162 |
(12,723) |
439 |
0.1 % |
|||||||
Income from continuing operations before income tax expense |
121,334 |
— |
121,334 |
16.1 % |
77,417 |
— |
77,417 |
13.4 % |
(2) |
Included in "Other (expense) income, net" for the six months ended |
(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 |
FINANCIAL HIGHLIGHTS (UNAUDITED) (In thousands) SELECT SEGMENT DATA |
||||||||
Three Months Ended |
Six Months Ended |
|||||||
2022 |
2021 |
2022 |
2021 |
|||||
Revenue |
||||||||
Financial Services |
$ 259,308 |
$ 186,589 |
$ 548,054 |
$ 390,738 |
||||
Benefits and Insurance Services |
91,708 |
82,620 |
184,194 |
169,859 |
||||
National Practices |
10,936 |
9,439 |
21,426 |
18,781 |
||||
Total |
$ 361,952 |
$ 278,648 |
$ 753,674 |
$ 579,378 |
||||
Gross Margin |
||||||||
Financial Services |
$ 49,665 |
$ 35,669 |
$ 128,611 |
$ 98,072 |
||||
Benefits and Insurance Services |
16,688 |
14,844 |
36,517 |
35,150 |
||||
National Practices |
1,037 |
952 |
1,951 |
1,753 |
||||
Operating expenses - unallocated (1): |
||||||||
Other expense |
(8,512) |
(2,990) |
(12,445) |
(5,125) |
||||
Deferred compensation |
13,338 |
(6,761) |
19,005 |
(11,377) |
||||
Total |
$ 72,216 |
$ 41,714 |
$ 173,639 |
$ 118,473 |
(1) |
Represents operating expenses not directly allocated to individual businesses, including stock-based compensation, |
SELECT CASH FLOW DATA (UNAUDITED) (In thousands) |
||||
Six Months Ended |
||||
2022 |
2021 |
|||
Net income |
$ 89,382 |
$ 58,816 |
||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||
Depreciation and amortization expense |
16,465 |
12,876 |
||
Gain on sale of operations, net |
(135) |
(6,385) |
||
Bad debt expense, net of recoveries |
1,263 |
265 |
||
Adjustments to contingent earnout liability, net |
1,478 |
753 |
||
Stock-based compensation expense |
6,428 |
5,454 |
||
Other noncash adjustments |
4,899 |
4,882 |
||
Net income, after adjustments to reconcile net income to net cash provided by operating activities |
119,780 |
76,661 |
||
Changes in assets and liabilities, net of acquisitions and divestitures |
(91,263) |
(10,354) |
||
Operating cash flows provided by continuing operations |
28,517 |
66,307 |
||
Operating cash used in discontinued operations |
(9) |
(13) |
||
Net cash provided by operating activities |
28,508 |
66,294 |
||
Net cash used in investing activities |
(89,756) |
(40,137) |
||
Net cash provided by (used in) financing activities |
91,655 |
(42,582) |
||
Net increase (decrease) in cash, cash equivalents and restricted cash |
30,407 |
(16,425) |
||
Cash, cash equivalents and restricted cash at beginning of year |
$ 150,474 |
$ 170,335 |
||
Cash, cash equivalents and restricted cash at end of period |
$ 180,881 |
$ 153,910 |
||
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheet: |
||||
Cash and cash equivalents |
$ 3,881 |
$ 4,677 |
||
Restricted cash |
42,188 |
39,268 |
||
Cash equivalents included in funds held for clients |
134,812 |
109,965 |
||
Total cash, cash equivalents and restricted cash |
$ 180,881 |
$ 153,910 |
SELECT FINANCIAL DATA AND RATIOS (UNAUDITED) (In thousands) |
||||
|
|
|||
Cash and cash equivalents |
3,881 |
1,997 |
||
Restricted cash |
42,188 |
30,383 |
||
Accounts receivable, net |
410,481 |
242,168 |
||
Current assets before funds held for clients |
468,771 |
293,765 |
||
Funds held for clients |
185,271 |
157,909 |
||
|
946,468 |
840,783 |
||
Total assets |
1,972,597 |
1,627,934 |
||
Current liabilities before client fund obligations |
344,219 |
265,174 |
||
Client fund obligations |
187,129 |
158,115 |
||
Total long-term debt, net |
263,718 |
154,851 |
||
Total liabilities |
1,208,074 |
923,386 |
||
|
(737,559) |
(694,716) |
||
Total stockholders' equity |
764,523 |
704,548 |
||
Debt to equity |
34.5 % |
22.0 % |
||
Days sales outstanding (DSO) - continuing operations (1) |
88 |
71 |
||
Shares outstanding |
51,602 |
52,038 |
||
Basic weighted average common shares outstanding |
52,015 |
52,637 |
||
Diluted weighted average common shares outstanding |
52,736 |
53,723 |
(1) |
DSO is provided for continuing operations and represents accounts receivable, net, at the end of the period, |
GAAP RECONCILIATION Income from Continuing Operations to Adjusted EBITDA (1) (In thousands) |
||||||||
Three Months Ended |
Six Months Ended |
|||||||
2022 |
2021 |
2022 |
2021 |
|||||
Income from continuing operations |
$ 31,260 |
$ 8,613 |
$ 89,391 |
$ 58,829 |
||||
Interest expense |
1,645 |
959 |
2,904 |
1,836 |
||||
Income tax expense |
12,622 |
2,616 |
31,943 |
18,588 |
||||
Gain on sale of operations, net |
(135) |
(6,385) |
(135) |
(6,385) |
||||
Legal settlement, net |
— |
30,468 |
— |
30,468 |
||||
Transaction costs related to |
— |
— |
1,329 |
— |
||||
Integration & retention costs related to |
2,048 |
— |
6,732 |
— |
||||
Depreciation |
2,828 |
2,649 |
5,607 |
5,202 |
||||
Amortization |
5,464 |
3,975 |
10,858 |
7,674 |
||||
Adjusted EBITDA |
$ 55,732 |
$ 42,895 |
$ 148,629 |
$ 116,212 |
(1) |
CBIZ reports its financial results in accordance with GAAP. This table reconciles Adjusted EBITDA to the most directly comparable |
(2) |
These costs include, but are not limited to, certain consulting, technology, personnel, as well as other first year operating and |
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 |
Three Months Ended |
||||||
Amounts |
EPS |
Amounts |
EPS |
||||
Income from continuing operations |
$ 31,260 |
$ 0.60 |
$ 8,613 |
$ 0.16 |
|||
Adjustments: |
|||||||
Gain on sale of operations, net |
(135) |
— |
(6,385) |
(0.12) |
|||
Legal settlement, net |
— |
— |
30,468 |
0.56 |
|||
Integration & retention costs related to |
2,048 |
0.04 |
— |
— |
|||
Income tax effect related to adjustments |
(550) |
(0.01) |
(5,608) |
(0.10) |
|||
Adjusted income from continuing operations |
$ 32,623 |
$ 0.63 |
$ 27,088 |
$ 0.50 |
(1) |
CBIZ reports its financial results in accordance with GAAP. This table reconciles Adjusted Income and Adjusted EPS to the most directly |
(2) |
These costs include, but are not limited to, certain consulting, technology, personnel, as well as other first year operating and general |
Six Months Ended |
Six Months Ended |
||||||
Amounts |
EPS |
Amounts |
EPS |
||||
Income from continuing operations |
$ 89,391 |
$ 1.70 |
$ 58,829 |
$ 1.09 |
|||
Adjustments: |
|||||||
Gain on sale of operations, net |
(135) |
— |
(6,385) |
(0.12) |
|||
Legal settlement, net |
— |
— |
30,468 |
0.56 |
|||
Transaction costs related to |
1,329 |
0.03 |
— |
— |
|||
Integration & retention costs related to |
6,732 |
0.13 |
— |
— |
|||
Income tax effect related to adjustments |
(2,087) |
(0.05) |
(5,782) |
(0.10) |
|||
Adjusted income from continuing operations |
$ 95,230 |
$ 1.81 |
$ 77,130 |
$ 1.43 |
(1) |
CBIZ reports its financial results in accordance with GAAP. This table reconciles Adjusted Income and Adjusted EPS to the most directly |
(2) |
These costs include, but are not limited to, certain consulting, technology, personnel, as well as other first year operating and general |
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 |
$ 1.92 |
$ 1.95 |
|
Transaction and integration costs related to |
0.16 |
0.16 |
|
Adjusted Diluted EPS Guidance |
$ 2.08 |
$ 2.11 |
|
GAAP Diluted EPS for 2021 |
$ 1.32 |
$ 1.32 |
|
Adjusted Diluted EPS for 2021 (2) |
$ 1.66 |
$ 1.66 |
|
|
45 % |
48 % |
|
Adjusted Diluted EPS Range |
25 % |
27 % |
(1) |
Includes estimated transaction and integration costs related to the |
(2) |
A reconciliation between income from continuing operations and adjusted income from continuing operations and a |
Year Ended |
|||
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 |
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SOURCE
Ware Grove, Chief Financial Officer, or Lori Novickis, Director, Corporate Relations, CBIZ, Inc., Cleveland, Ohio, (216) 447-9000