CBIZ Reports Second-Quarter 2004 Results
CLEVELAND, July 27 /PRNewswire-FirstCall/ -- CBIZ (Century Business Services, Inc.) (Nasdaq: CBIZ) today announced its financial results for the second quarter of 2004.
CBIZ reported revenue of $127.2 million for the quarter ended June 30, 2004, an increase of approximately $2.8 million over last year's second- quarter revenue of $124.4 million. Same-unit revenue for the second quarter increased by 3.2%, or $3.9 million, compared with a year ago. Revenue from newly acquired operations contributed $2.6 million, while divested operations resulted in a revenue decline of $3.7 million compared with the second quarter a year ago. Net income from continuing operations for the quarter was $2.6 million, or $0.03 per diluted share, compared with $3.6 million, or $0.04 per diluted share, recorded for the second quarter of 2003.
Second-quarter 2003 results include a $1.8 million pre-tax gain on sale, primarily related to the sale of Health Administration Services, Inc. in May of 2003. Also included in the second-quarter 2003 results is an impairment charge of approximately $400,000 relating to a note receivable which is reflected in other income (expense).
As of June 30, 2004, bank debt stood at $46.8 million compared to $23.4 million at the end of the first quarter. During the second quarter of 2004 CBIZ completed a tender offer resulting in the repurchase of approximately 7.5 million shares of its common stock for a total cost of approximately $37.5 million. In addition, the Company purchased approximately 464,000 shares in the open market. The Company also completed two acquisitions during the second quarter.
For the six-month period ended June 30, 2004, CBIZ reported revenue of $274.8 million compared with $268.6 million for the six-month period a year ago, an increase of $6.2 million. Same-unit revenue increased by 3.8%, or $9.9 million, for the first six months. Acquisitions contributed $5.2 million to revenue growth for the first six months of 2004 and divested operations accounted for a decline in revenue of $8.9 million compared to the first six months a year ago. Net income from continuing operations was $14.3 million in 2004, or $0.17 per diluted share, compared with $13.9 million for the first six months of 2003, or $0.14 per diluted share.
"CBIZ continues to make progress," remarked Steven L. Gerard, Chairman and Chief Executive Officer. "During the second quarter, we utilized our cash flow and our strong balance sheet to complete our second share repurchase within the past twelve months. In addition, we acquired two operations that will complement our existing businesses in the Denver, Colorado, and Cleveland, Ohio markets. The pace of our same-unit growth over the past six quarters is encouraging. Operating margins suffered in the second quarter as we incurred higher than anticipated legal expenses to address several long- standing litigation issues and added personnel to our wealth management and benefit services units to support their growth. We also experienced some operating challenges due to the rapid growth of a business unit that is underperforming to our expectations. We are addressing those issues, and are confident we will achieve our full year goal of a 25% - 30% increase in earnings per share which we outlined earlier in the year," continued Gerard.
CBIZ will host a conference call today at 11 a.m. (ET) to discuss these 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 http://www.cbiz.com . Investors and analysts can participate in the conference call by dialing 1-800-559-2403 several minutes before 11:00 a.m. (ET). If you are dialing from outside the United States, dial 1-847-619-6534. A replay of the call will be available starting at 1:00 p.m. (ET) July 27, through midnight (ET), July 30, 2004. 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 9345961. A replay of the webcast will also be available on the Company's web site at http://www.cbiz.com .
CBIZ is a provider of outsourced business services to small and medium- sized companies throughout the United States. As the largest benefits specialist and one of the largest accounting, valuation and medical practice management companies in the United States, CBIZ provides integrated services in the following areas: accounting and tax; employee benefits; wealth management; property and casualty insurance; payroll; IS consulting; and HR consulting. CBIZ also provides valuation; litigation advisory; government relations; commercial real estate advisory; wholesale life and group insurance; healthcare consulting; medical practice management; worksite marketing; and capital advisory services. These services are provided throughout a network of more than 160 Company offices in 34 states and the District of Columbia.
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 can be found in the Company's filings with the Securities and Exchange Commission.
For further information regarding CBIZ, call the Investor Relations Office at (216) 447-9000 or visit http://www.cbiz.com .
CENTURY BUSINESS SERVICES, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 2004 AND 2003
(In thousands, except percentages and per share data)
THREE MONTHS ENDED
JUNE 30,
2004 % 2003 (1) %
Revenue $127,151 100.0% $124,416 100.0%
Operating expenses 113,451 89.2% 110,408 88.7%
Gross margin 13,700 10.8% 14,008 11.3%
Corporate general and administrative
expense (2) 6,055 4.8% 4,912 3.9%
Depreciation and amortization
expense 4,148 3.3% 4,318 3.5%
Operating income 3,497 2.8% 4,778 3.8%
Other income (expense):
Interest expense (429) -0.3% (297) -0.2%
Gain on divested
operations, net 534 0.4% 1,784 1.4%
Other income (expense),
net (2) 295 0.2% (17) 0.0%
Total other income, net 400 0.3% 1,470 1.2%
Income from continuing operations
before income tax expense 3,897 3.1% 6,248 5.0%
Income tax expense 1,319 2,624
Income from continuing operations 2,578 2.0% 3,624 2.9%
Loss from operations of discontinued
businesses, net of tax (196) (194)
Loss on disposal of discontinued
businesses, net of tax - (183)
Net income $2,382 1.9% $3,247 2.6%
Diluted earnings per share:
Continuing operations $0.03 $0.04
Discontinued operations - -
Net income $0.03 $0.03
Diluted shares outstanding 80,150 97,178
Other data from continuing
operations:
EBIT (3) $3,792 $4,761
EBITDA (3) $7,940 $9,079
(1) Certain amounts in the 2003 financial statements have been
reclassified to account for discontinued operations.
(2) Corporate general and administrative expense includes legal
settlements, which were previously classified as other income
(expense), net.
(3) EBIT represents income from continuing operations before income
taxes, interest expense, gain on divested operations, and impairment
charges for a note receivable related to the divestiture of an
operation in 1997. There were no impairment charges related to this
note for the three months ended June 30, 2004 and 2003.
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).
CENTURY BUSINESS SERVICES, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(In thousands, except percentages and per share data)
SIX MONTHS ENDED
JUNE 30,
2004 % 2003 (1) %
Revenue $274,757 100.0% $268,570 100.0%
Operating expenses 232,326 84.6% 226,296 84.3%
Gross margin 42,431 15.4% 42,274 15.7%
Corporate general and administrative
expense (2) 11,434 4.2% 9,693 3.6%
Depreciation and amortization
expense 8,129 3.0% 8,581 3.2%
Operating income 22,868 8.3% 24,000 8.9%
Other income (expense):
Interest expense (669) -0.2% (620) -0.2%
Gain on divested
operations, net 917 0.3% 1,784 0.7%
Other income (expense),
net (2) 831 0.3% (1,023) -0.4%
Total other income, net 1,079 0.4% 141 0.1%
Income from continuing operations
before income tax expense 23,947 8.7% 24,141 9.0%
Income tax expense 9,660 10,221
Income from continuing operations 14,287 5.2% 13,920 5.2%
Loss from operations of discontinued
businesses, net of tax (324) (489)
Loss on disposal of discontinued
businesses, net of tax - (183)
Net income $13,963 5.1% $13,248 4.9%
Diluted earnings per share:
Continuing operations $0.17 $0.14
Discontinued operations - -
Net income $0.17 $0.14
Diluted shares outstanding 84,038 97,073
Other data from continuing
operations:
EBIT (3) $23,699 $24,602
EBITDA (3) $31,828 $33,183
(1) Certain amounts in the 2003 financial statements have been
reclassified to account for discontinued operations.
(2) Corporate general and administrative expense includes legal
settlements, which were previously classified as other income
(expense), net.
(3) EBIT represents income from continuing operations before income
taxes, interest expense, gain on divested operations, and impairment
charges for a note receivable related to the divestiture of an
operation in 1997. Impairment charges for the six months ended June
30, 2004 and 2003 were $0 and $1,625, respectively.
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).
CENTURY BUSINESS SERVICES, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
(In thousands, except percentages and ratios)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2004 2003 (3) 2004 2003 (3)
Revenue
Accounting, Tax & Advisory
Services $49,679 $50,058 $120,408 $119,032
Benefits & Insurance Services 38,892 38,490 76,932 78,371
National Practices - Other 17,061 17,198 35,358 34,919
Medical Practice Management 21,519 18,670 42,059 36,248
Total $127,151 $124,416 $274,757 $268,570
Gross margin
Accounting, Tax & Advisory
Services $3,701 $4,711 $25,093 $25,779
Benefits & Insurance Services 6,851 7,768 12,766 15,566
National Practices - Other 1,636 (375) 3,887 (917)
Medical Practice Management 3,705 3,441 6,848 5,864
Total (1) $13,700 $14,008 $42,431 $42,274
SELECT BALANCE SHEET DATA AND RATIOS
JUNE 30, DECEMBER 31,
2004 2003 (3)
Cash and cash equivalents $4,262 $3,791
Restricted cash $12,540 $10,880
Accounts receivable, net $118,482 $111,222
Total current assets before funds held
for clients $149,997 $139,875
Funds held for clients $36,203 $44,917
Goodwill and other intangible assets $171,382 $167,280
Total assets $411,222 $402,145
Current liabilities before client fund
obligations $68,726 $63,487
Client fund obligations $36,203 $44,917
Bank debt $46,825 $14,000
Total liabilities $157,940 $124,307
Treasury stock $(75,004) $(35,087)
Total stockholders' equity $253,282 $277,838
Bank debt to equity 18.5% 5.0%
Days sales outstanding (2) 79 82
Shares outstanding 77,781 85,371
Basic shares outstanding 81,661 90,400
Diluted shares outstanding 84,038 92,762
(1) Includes operating expenses recorded by corporate and not directly
allocated to the business units of $2,193 and $1,537 for the three
months ended, and $6,163 and $4,018 for the six months ended June 30,
2004 and 2003, respectively.
(2) Days sales outstanding (DSO) represent accounts receivable at the end
of the period (before the allowance for doubtful accounts) divided by
daily revenue (year-to-date revenue divided by number of days in the
period). 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 2003 financial statements have been
reclassified to account for discontinued operations.
SOURCE CBIZ