CBIZ Reports Fourth-Quarter and Full-Year 2004 Results
CLEVELAND, Feb 23, 2005 /PRNewswire-FirstCall via COMTEX/ -- CBIZ (Century Business Services, Inc.) (Nasdaq: CBIZ) today announced fourth-quarter and full-year results for the year ended December 31, 2004.
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CBIZ reported revenue of $125.5 million for the fourth quarter ended December 31, 2004, an increase of $2.6 million over $122.9 million recorded for the fourth quarter of 2003. Same-unit revenue for the quarter increased 0.9%, or $1.2 million. The Company recorded net income from continuing operations of $2.2 million, or $0.03 per diluted share compared with $2.3 million recorded for the fourth quarter a year ago, or $0.03 per diluted share.
For the year ended December 31, 2004, CBIZ reported revenue of $520.1 million, compared with $506.8 million for 2003. Same-unit revenue for the year increased 2.8%, or $14.1 million. Newly acquired operations increased revenue by $9.5 million while operations divested since a year ago resulted in a revenue decline of $10.3 million. Net income from continuing operations was $16.9 million compared to $16.3 million reported for 2003. Earnings per diluted share from continuing operations were $0.21 compared with $0.18 per diluted share reported for 2003.
As of December 31, 2004, the amount outstanding on bank debt was $53.9 million compared to $14.0 million for year-ended 2003. During 2004, through a tender offer and open market transactions, CBIZ purchased a total of 10.4 million shares of its common stock at a total cost of $50.0 million. In addition, the Company completed four acquisitions during 2004, and has completed the acquisition of two additional operations since the end of 2004.
As previously disclosed in the company's prior earnings releases, included in full year 2004 results are legal expenses associated with the resolution of a long-standing litigation issue, and an operating loss from one Benefits and Insurance unit. These items impacted earnings per share by $0.06 in 2004. Also included in full year results is a $3.5 million favorable impact to tax expense resulting from a settlement with the IRS relating to prior year tax returns. This favorable item impacted earnings by $0.04 per share.
"In 2004, CBIZ achieved revenue and earnings contribution growth in our Accounting, Tax and Advisory group, our National Practices group, and our Medical Practice Management business. In addition, we are pleased that our cross-serving revenue increased by 35% compared with the prior year," stated Steven Gerard, Chairman and Chief Executive Officer. "Our operations continued to generate good cash flow in 2004 which we used to acquire new businesses and to repurchase 10.4 million shares of our common stock during the year," continued Gerard.
Outlook for 2005
In 2005, CBIZ expects to achieve revenue growth in a range of 5% to 8%, and expects to continue to improve earnings per share from continuing operations by 20% to 25% over the $0.21 per share recorded for 2004. Cash flow is expected to be strong, and CBIZ expects EBITDA to be approximately $50 - $53 million in 2005.
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 1-888-545- 0687 several minutes before 11:00 a.m.(ET). If you are dialing from outside the United States, dial 1-630-691-2764. A replay of the call will be available starting at 1:00 p.m. (ET) February 23 through midnight (ET), February 28, 2005. 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 10763709. A replay of the webcast will also be available on the Company's web site at www.cbiz.com .
CBIZ is a provider of outsourced business services to companies throughout the United States. As the largest benefits specialist, one of the top accounting companies, and one of the largest 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 internal audit; Sarbanes 404 compliance; 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 140 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 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 .
CENTURY BUSINESS SERVICES, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(In thousands, except percentages and per share data)
THREE MONTHS ENDED
DECEMBER 31,
2004 % 2003 (1) %
Revenue $125,542 100.0% $122,889 100.0%
Operating expenses 118,740 94.6% 109,618 89.2%
Gross margin 6,802 5.4% 13,271 10.8%
Corporate general and administrative
expense (2) 6,498 5.2% 4,885 4.0%
Depreciation and amortization expense 4,212 3.3% 4,436 3.6%
Operating income (loss) (3,908) -3.1% 3,950 3.2%
Other income (expense):
Interest expense (469) -0.4% (201) -0.2%
Gain on sale of operations,
net - 0.0% 528 0.4%
Other income (expense), net(2) 2,196 1.8% (651) -0.5%
Total other
income
(loss), net 1,727 1.4% (324) -0.3%
Income (loss) from continuing
operations before income tax
expense (benefit) (2,181) -1.7% 3,626 2.9%
Income tax expense (benefit) (4,362) 1,340
Income from continuing operations 2,181 1.7% 2,286 1.9%
Loss from operations of discontinued
businesses, net of tax (343) (1,099)
Gain (loss) on disposal of
discontinued businesses, net of tax (106) 1,119
Net income $1,732 1.4% $2,306 1.9%
Diluted earnings (loss) per share:
Continuing operations $0.03 $0.03
Discontinued operations (0.01) -
Net income $0.02 $0.03
Diluted shares outstanding 78,449 89,073
Other data from continuing operations:
EBIT (3) $(1,712) $4,068
EBITDA (3) $2,500 $8,504
(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 three months ended December 31, 2004
and 2003 were $0 and $769, 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)
TWELVE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(In thousands, except percentages and per share data)
TWELVE MONTHS ENDED
DECEMBER 31,
2004 % 2003 (1) %
Revenue $520,057 100.0% $506,782 100.0%
Operating expenses 459,357 88.3% 441,652 87.1%
Gross margin 60,700 11.7% 65,130 12.9%
Corporate general and
administrative expense (2) 24,773 4.8% 19,518 3.9%
Depreciation and
amortization expense 16,428 3.2% 17,089 3.4%
Operating income 19,499 3.7% 28,523 5.6%
Other income (expense):
Interest expense (1,507) -0.3% (1,055) -0.2%
Gain on sale of
operations, net 996 0.2% 2,519 0.5%
Other income
(expense), net (2) 3,554 0.7% (1,209) -0.2%
Total
other
income,
net 3,043 0.6% 255 0.1%
Income from continuing
operations before income
tax expense 22,542 4.3% 28,778 5.7%
Income tax expense 5,691 12,495
Income from continuing
operations 16,851 3.2% 16,283 3.2%
Loss from operations of
discontinued businesses,
net of tax (932) (1,693)
Gain on disposal of
discontinued businesses,
net of tax 132 726
Net income $16,051 3.1% $15,316 3.0%
Diluted earnings (loss) per
share:
Continuing operations $0.21 $0.18
Discontinued operations (0.01) (0.01)
Net income $0.20 $0.17
Diluted shares
outstanding 81,477 92,762
Other data from continuing
operations:
EBIT (3) $23,053 $29,708
EBITDA (3) $39,481 $46,797
(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 twelve months ended December 31,
2004 and 2003 were $0 and $2,394, 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 TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2004 2003 (3) 2004 2003 (3)
Revenue
Accounting, Tax & Advisory
Services $45,318 $41,034 $209,077 $199,612
Benefits & Insurance Services 38,858 46,361 152,240 162,095
National Practices - Other 18,428 15,473 71,479 69,290
Medical Practice Management 22,938 20,021 87,261 75,785
Total $125,542 $122,889 $520,057 $506,782
Gross margin
Accounting, Tax & Advisory
Services $1,231 $(30) $28,795 $25,160
Benefits & Insurance Services 5,477 11,606 23,549 33,688
National Practices - Other 870 (377) 6,186 (226)
Medical Practice Management 4,094 4,209 15,376 14,219
Total (1) $6,802 $13,271 $60,700 $65,130
SELECT BALANCE SHEET DATA AND RATIOS
DECEMBER 31, DECEMBER 31,
2004 2003 (3)
Cash and cash equivalents $5,291 $3,791
Restricted cash $10,089 $10,880
Accounts receivable, net $109,683 $109,436
Total current assets before funds
held for clients $145,792 $140,050
Funds held for clients $38,236 $44,917
Goodwill and other intangible assets $172,644 $167,280
Total assets $413,773 $402,145
Current liabilities before client
fund obligations $67,864 $63,499
Client fund obligations $38,236 $44,917
Bank debt $53,900 $14,000
Total liabilities $167,276 $124,307
Treasury stock $(85,650) $(35,087)
Total stockholders' equity $246,497 $277,838
Bank debt to equity 21.9% 5.0%
Days sales outstanding (2) 79 81
Shares outstanding 75,650 85,371
Basic shares outstanding 79,217 90,400
Diluted shares outstanding 81,477 92,762
(1) Includes operating expenses recorded by corporate and not directly
allocated to the business units of $4,870 and $2,137 for the three
months ended December 31, 2004 and 2003, and $13,206 and $7,711 for
the twelve months ended December 31, 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 Century Business Services
Ware Grove, Chief Financial Officer, or Lori Novickis, Corporate Relations, of
Century Business Services, Inc., +1-216-447-9000
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