CBIZ Reports Third-Quarter 2006 Results
Year-to-Date Earnings Per Share From Continuing Operations Up 30%
CLEVELAND, Oct. 24 /PRNewswire-FirstCall/ -- CBIZ, Inc. (NYSE: CBZ) today announced third-quarter results for the period ended September 30, 2006.
CBIZ reported revenue of $143.4 million for the third quarter ended September 30, 2006, an increase of 5.9% over the $135.3 million recorded for the third quarter of 2005. Same-unit revenue for the third quarter increased by 2.3%, or by $3.2 million. Revenue from newly acquired operations contributed $4.9 million to revenue growth in the third quarter of 2006 compared with the third quarter a year ago. CBIZ reported income from continuing operations of $3.3 million for the third quarter 2006, or $0.05 per diluted share, compared with $2.9 million, or $0.04 per diluted share in the third quarter of 2005.
During the third quarter, the Company repurchased 875,000 shares of its common stock in open market purchases at a cost of approximately $6.2 million. For the nine-month period ended September 30, 2006, the Company has repurchased 8.1 million shares at a cost of approximately $62.9 million.
For the nine-month period ended September 30, 2006, CBIZ reported revenue of $467.2 million, an increase of 8.6%, or $37.0 million over the $430.2 million recorded for the comparable nine-month period a year ago. Same-unit revenue increased by 5.5%, or $23.8 million, for the first nine months of 2006 compared to the same period a year ago. Acquisitions contributed $13.2 million to revenue growth for the first nine months of 2006 compared with the same period a year ago. Income from continuing operations was $22.5 million for the first nine months of 2006, or $0.30 per diluted share, compared with $17.7 million for the first nine months of 2005, or $0.23 per diluted share.
"This quarter represents the thirteenth consecutive quarter of same-unit revenue growth for CBIZ," stated Steven L. Gerard, Chairman and CEO. "We continue to generate very good cash flow, and through the first nine months, we have made three strategic acquisitions and have repurchased 8.1 million shares of our common stock. We are pleased with the results through the first nine months as we have been able to translate the top-line revenue growth of 8.6% into a 30% increase in our fully diluted earnings per share," 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), October 24 through midnight (ET), October 27, 2006. 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 15918094. 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 the largest benefits specialist, one of the largest accounting, valuation and medical practice management companies in the United States, CBIZ provides its clients with integrated financial services which include accounting and tax, internal audit, Sarbanes-Oxley 404 compliance, and valuation. Employee services include employee benefits, property and casualty insurance, payroll, HR consulting and wealth management. CBIZ also provides information technology, hardware and software solutions, government relations, healthcare consulting and medical practice management. These services are provided throughout a network of more than 140 Company offices in 34 states and the District of Columbia.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Risk factors that could cause actual results to differ include the risk of a decline in the current trend to outsource business services that may have a material adverse effect on the Company's results of operations and the Company's sensitivity to revenue fluctuations that could result in fluctuations in the market price for shares of the Company's common stock. Additional risk factors are discussed in our Report on Form 10-K for the year ended December 31, 2005, and the reader is directed to these statements for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements.
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 SEPTEMBER 30, 2006 AND 2005
(In thousands, except percentages and per share data)
THREE MONTHS ENDED
SEPTEMBER 30,
2006 % 2005 (1) %
Revenue $143,382 100.0% $135,345 100.0%
Operating expenses 128,235 89.4% 120,533 89.1%
Gross margin 15,147 10.6% 14,812 10.9%
Corporate general and administrative
expense 5,568 3.9% 6,364 4.7%
Depreciation and amortization expense 4,300 3.0% 3,759 2.7%
Operating income 5,279 3.7% 4,689 3.5%
Other income (expense):
Interest expense (844) -0.6% (787) -0.6%
Gain on sale of operations, net 7 0.0% 29 0.0%
Other income, net 995 0.7% 1,069 0.8%
Total other income, net 158 0.1% 311 0.2%
Income from continuing operations
before income tax expense 5,437 3.8% 5,000 3.7%
Income tax expense 2,117 2,142
Income from continuing operations 3,320 2.3% 2,858 2.1%
Gain (loss) from operations of
discontinued businesses, net of tax 250 (1,625)
Gain on disposal of discontinued
businesses, net of tax 553 802
Net income $4,123 2.9% $2,035 1.5%
Diluted earnings (loss) per share:
Continuing operations $0.05 $0.04
Discontinued operations 0.01 (0.01)
Net income $0.06 $0.03
Diluted weighted average common
shares outstanding 70,421 75,988
Other data from continuing operations:
EBIT (2) $6,274 $5,758
EBITDA (2) $10,574 $9,517
(1) Certain amounts in the 2005 financial data have been reclassified to
conform to the current year presentation.
(2) EBIT represents income from continuing operations before income
taxes, interest expense, and gain on divested operations. EBITDA
represents EBIT as defined above before depreciation and amortization
expense. 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 (GAAP).
CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
(In thousands, except percentages and per share data)
NINE MONTHS ENDED
SEPTEMBER 30,
2006 % 2005 (1) %
Revenue $467,201 100.0% $430,189 100.0%
Operating expenses 397,741 85.1% 368,554 85.7%
Gross margin 69,460 14.9% 61,635 14.3%
Corporate general and administrative
expense 19,633 4.2% 20,234 4.7%
Depreciation and amortization expense 12,540 2.7% 11,436 2.6%
Operating income 37,287 8.0% 29,965 7.0%
Other income (expense):
Interest expense (2,503) -0.6% (2,413) -0.6%
Gain on sale of operations, net 14 0.0% 29 0.0%
Other income, net 2,806 0.6% 2,214 0.5%
Total other income (expense),
net 317 0.0% (170) -0.1%
Income from continuing operations
before income tax expense 37,604 8.0% 29,795 6.9%
Income tax expense 15,079 12,061
Income from continuing operations 22,525 4.8% 17,734 4.1%
Loss from operations of discontinued
businesses, net of tax (1,664) (4,929)
Gain on disposal of discontinued
businesses, net of tax 506 693
Net income $21,367 4.6% $13,498 3.1%
Diluted earnings (loss) per share:
Continuing operations $0.30 $0.23
Discontinued operations (0.01) (0.05)
Net income $0.29 $0.18
Diluted weighted average common
shares outstanding 74,406 76,886
Other data from continuing operations:
EBIT (2) $40,093 $32,179
EBITDA (2) $52,633 $43,615
(1) Certain amounts in the 2005 financial data have been reclassified to
conform to the current year presentation.
(2) EBIT represents income from continuing operations before income
taxes, interest expense, and gain on divested operations. EBITDA
represents EBIT as defined above before depreciation and amortization
expense. 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 (GAAP).
CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
(In thousands, except percentages and ratios)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2006 2005 (3) 2006 2005 (3)
Revenue
Financial Services $60,964 $59,778 $217,510 $206,731
Employee Services 40,101 38,516 123,669 114,840
Medical Management Professionals 29,746 25,189 88,014 72,644
National Practices 12,571 11,862 38,008 35,974
Total $143,382 $135,345 $467,201 $430,189
Gross margin
Financial Services $5,163 $6,023 $39,448 $38,198
Employee Services 6,925 8,066 24,117 22,509
Medical Management Professionals 5,491 5,138 14,938 13,274
National Practices 1,352 657 4,814 2,894
Total (1) $15,147 $14,812 $69,460 $61,635
SELECT BALANCE SHEET DATA AND RATIOS
SEPTEMBER 30, DECEMBER 31,
2006 2005 (3)
Cash and cash equivalents $15,477 $8,909
Restricted cash $14,517 $9,873
Accounts receivable, net $113,987 $98,390
Current assets before funds held for
clients $158,154 $144,641
Funds held for clients $62,270 $65,669
Goodwill and other intangible
assets, net $206,729 $184,462
Total assets $493,900 $454,584
Current liabilities before client
fund obligations $83,572 $87,785
Client fund obligations $62,270 $65,669
Convertible notes $100,000 $-
Bank debt $- $32,200
Total liabilities $267,677 $199,923
Treasury stock $(165,237) $(102,317)
Total stockholders' equity $226,223 $254,661
Debt to equity (4) 44.2% 12.6%
Days sales outstanding from
continuing operations (2) 71 65
Shares outstanding 68,652 73,822
Basic weighted average common shares
outstanding 72,092 74,448
Diluted weighted average common
shares outstanding 74,406 76,827
(1) Includes operating expenses recorded by corporate and not directly
allocated to the business units of $3,784 and $5,072 for the three
months ended September 30, 2006 and 2005 and $13,857 and $15,240 for
the nine months ended September 30, 2006 and 2005, respectively.
(2) Days sales outstanding at September 30, 2005, was 72 days. Days
sales outstanding (DSO) represent 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 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 (GAAP).
(3) Certain amounts in the 2005 financial data have been reclassified to
conform to the current year presentation.
(4) Ratio is convertible note and bank debt divided by total equity.
SOURCE CBIZ, Inc.
CONTACT:
Ware Grove, Chief Financial Officer,
or
Lori Novickis,
Director, Corporate Relations, of CBIZ, Inc.,
+1-216-447-9000
Web site: http://www.cbiz.com