CBIZ REPORTS FOURTH-QUARTER AND FULL-YEAR 2009 RESULTS
Full-Year Revenue Grows 7.8%
Earnings per Share from Continuing Operations Increases 2.0%
Cash Earnings per Share increase by 13.8%; EBITDA Increases 11.0%
Cleveland, Ohio (February 16, 2010) - CBIZ, Inc. (NYSE: CBZ) today announced fourth-quarter and full-year results for the year ended December 31, 2009.
CBIZ reported revenue of $162.3 million for the fourth quarter ended December 31, 2009, an increase of 2.3% over the $158.7 million reported for the fourth quarter of 2008. Same-unit revenue for the quarter decreased by 9.1% and newly acquired businesses contributed $18.1 million, or 11.4%, to revenue growth. Net income from continuing operations was $1.4 million, or $0.02 per diluted share for the fourth quarter 2009 compared to $3.4 million or $0.06 per diluted share in the fourth quarter of 2008.
For the year ended December 31, 2009, CBIZ reported revenue of $739.7 million, an increase of 7.8% over the $685.9 million reported for 2008. Same-unit revenue for the year decreased by 5.3% and newly acquired businesses, net of divestitures, contributed $89.9 million, or 13.1%, to revenue growth. Net income from continuing operations for 2009 was $32.1 million, or $0.52 per diluted share, compared with $31.8 million, or $0.51 per diluted share for 2008.
Cash earnings per share from continuing operations, a non-GAAP measure that includes the impact of major non-cash charges to earnings, improved to $0.99 for 2009, an increase of 13.8% over $0.87 cash earnings per share from continuing operations for 2008. EBITDA for 2009 was $84.8 million, an increase of 11.0% over 2008 EBITDA. These calculations are outlined in the schedule attached.
Results for 2009 reflect the Company's decision to discontinue the activities of several business operations focused on providing software and technology support for small businesses. Results for 2008 have been adjusted to reflect these discontinued operations. The Company will continue to invest in and grow its IT staffing and outsourcing business, including providing services under its contract with Edward Jones, its largest client.
During 2009, CBIZ purchased a total of approximately 1.8 million shares of its common stock at a total cost of $12.9 million. At December 31, 2009 the amount outstanding on the Company's $214 million unsecured credit facility was $110 million compared with $125 million at December 31, 2008.
The Company recently announced that effective January 1, 2010, it had acquired the accounting and financial services firm Goldstein Lewin which is based in Boca Raton, Florida, and also acquired National Benefit Alliance, an employee benefits provider based in Midvale, Utah.
"We are pleased to have reported our eighth consecutive year of increased revenue, earnings, earnings per share and cash earnings from continuing operations. The acquisitions we made in 2008 have performed well during the year and we are pleased to have made two additional acquisitions during 2009 as well as the two we recently announced effective January 2010," stated Steven Gerard, CBIZ Chairman and Chief Executive Officer. "We expect the challenging economic environment encountered in 2009 will persist into 2010. Our financial condition remains strong and we are well positioned for future growth. We believe that some of the economic challenges we have encountered this past year will persist, resulting in moderate growth in revenue, earnings and cash flow for 2010," concluded Gerard.
Outlook for 2010
In 2010, CBIZ expects to grow revenue within a range of 3% to 5% and expects to improve earnings per share from continuing operations within a range of 4% to 7% over the $0.52 per diluted share reported for 2009, excluding the impact of the previously announced charges in 2010 for the consolidation of facilities in connection with recent acquisition activity. Cash flow is expected to remain strong, and CBIZ expects EBITDA of approximately $90 million in 2010.
CBIZ, Inc. provides professional business services that help clients better manage their finances and employees. CBIZ provides its clients with financial services including accounting and tax, internal audit, merger and acquisition advisory, and valuation services. Employee services include group benefits, property and casualty insurance, payroll, HR consulting and wealth management. CBIZ also provides outsourced technology staffing support services, healthcare consulting and medical practice management. As one of the largest benefits specialists and one of the largest accounting, valuation and medical practice management companies in the United States, the Company's services are provided through more than 150 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.
CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, 2009 AND 2008
(In thousands, except percentages and per share data)
THREE MONTHS ENDED
DECEMBER 31,
------------
2009 % 2008 (1) %
---- --- ------- ---
Revenue $162,277 100.0% $158,648 100.0%
Operating
expenses 151,879 93.6% 140,956 88.9%
Gross margin 10,398 6.4% 17,692 11.1%
Corporate
general and
administrative
expenses (2) 6,848 4.2% 6,378 4.0%
Operating
income 3,550 2.2% 11,314 7.1%
Other income
(expense):
Interest
expense (3,186) -2.0% (2,743) -1.7%
Gain (loss)
On sale of
operations,
net (15) 0.0% 275 0.2%
Other income
(expense), net
(3) 1,173 0.7% (3,582) -2.3%
Total other
expense,
net (2,028) -1.3% (6,050) -3.8%
Income from
continuing
operations
before income
tax expense 1,522 0.9% 5,264 3.3%
Income tax expense 87 1,883
Income from
continuing
operations 1,435 0.9% 3,381 2.1%
Loss from
operations of
discontinued
businesses, net
of tax (151) (412)
Gain on disposal of
discontinued
businesses, net of
tax 32 40
Net income $1,316 0.8% $3,009 1.9%
Diluted earnings
(loss) per share:
Continuing
operations $0.02 $0.06
Discontinued
operations - (0.01)
Net income $0.02 $0.05
Diluted weighted
average common
shares
outstanding 61,561 61,765
Other data from
continuing operations:
EBIT (4) $4,723 $7,732
EBITDA (4) $10,092 $11,452
(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 FASB ASC Topic 470.20 "Debt with Conversion
and Other Options," as well as the impact of discontinued operations.
(2) Includes an expense of $121 and a benefit of $563 for the three
months ended December 31, 2009 and 2008, respectively, in compensation
expense associated with gains and losses from the Company's deferred
compensation plan (see note 3). Excluding this item, corporate general
and administrative expenses would be $6,727 and $6,941 or 4.1% and 4.4%
of revenue, for the three months ended December 31, 2009 and 2008,
respectively.
(3) Includes a net gain of $952 and a net loss of $3,755 for the three
months ended December 31, 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."
(4) EBIT represents income from continuing operations before income
taxes, interest expense, and gain (loss) on sale of operations. EBITDA
represents EBIT before depreciation and amortization expense of $5,369
and $3,720 for the three months ended December 31, 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)
TWELVE MONTHS ENDED DECEMBER 31, 2009 AND 2008
(In thousands, except percentages and per share data)
TWELVE MONTHS ENDED
DECEMBER 31,
------------
2009 % 2008 (1) %
---- --- ------- ---
Revenue $739,700 100.0% $685,933 100.0%
Operating
Expenses 651,311 88.1% 588,142 85.7%
Gross margin 88,389 11.9% 97,791 14.3%
Corporate general
and administrative
expenses (2) 30,722 4.1% 28,691 4.2%
Operating income 57,667 7.8% 69,100 10.1%
Other income
(expense):
Interest
expense (13,392) -1.8% (10,786) -1.6%
Gain on sale
of operations,
net 989 0.1% 745 0.1%
Other income
(expense), net
(3) 6,622 0.9% (7,618) -1.1%
Total other
expense,
net (5,781) -0.8% (17,659) -2.6%
Income from
continuing
operations before
income tax
expense 51,886 7.0% 51,441 7.5%
Income tax
Expense 19,798 19,637
Income from
continuing
operations 32,088 4.3% 31,804 4.6%
Loss from
operations of
discontinued
businesses, net
of tax (902) (1,132)
Gain (loss) on
disposal of
discontinued
businesses, net of
tax 210 (268)
Net income $31,396 4.2% $30,404 4.4%
Diluted earnings
(loss) per share:
Continuing
operations $0.52 $0.51
Discontinued
operations (0.01) (0.02)
Net income $0.51 $0.49
Diluted weighted
average common
shares
outstanding 61,859 62,572
Other data from
continuing
operations:
EBIT (4) $64,289 $61,482
EBITDA (4) $84,787 $76,404
(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 FASB ASC Topic 470.20 "Debt with Conversion
and Other Options," as well as the impact of discontinued operations.
(2) Includes an expense of $683 and a benefit of $1,153 for the twelve
months ended December 31, 2009 and 2008, respectively, in compensation
expense associated with gains and losses from the Company's deferred
compensation plan (see note 3). Excluding this item corporate general and
administrative expenses would be $30,039 and $29,844, or 4.1% and 4.4% of
revenue, for the twelve months ended December 31, 2009 and 2008,
respectively.
(3) Includes a net gain of $5,491 and a net loss of $7,572 for the twelve
months ended December 31, 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."
(4) EBIT represents income from continuing operations before income
taxes, interest expense, and gain on sale of operations. EBITDA
represents EBIT before depreciation and amortization expense of
$20,498 and $14,922 for the twelve months ended December 31, 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 TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------ ------------
2009 2008 (1) 2009 2008 (1)
---- ------- ---- -------
Revenue
Financial Services $74,569 $67,570 $380,254 $312,122
Employee Services 41,833 43,223 170,846 181,793
Medical Management
Professionals 38,230 40,940 160,632 164,950
National Practices 7,645 6,915 27,968 27,068
Total $162,277 $158,648 $739,700 $685,933
Gross Margin
Financial Services $737 $3,985 $50,960 $46,681
Employee Services 7,625 6,607 29,136 30,960
Medical Management
Professionals 3,970 5,843 20,869 21,555
National Practices 1,242 841 3,499 3,461
Operating expenses -
unallocated (2):
Other (2,345) (2,777) (11,267) (11,285)
Deferred
compensation (831) 3,193 (4,808) 6,419
Total $10,398 $17,692 $88,389 $97,791
(1) Certain amounts in the 2008 financial data have been reclassified to
conform to the current year presentation, including the impact of
discontinued operations.
(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 gains or losses attributable to the
assets held in the Company's deferred compensation plan. These gains or
losses do not impact "income from continuing operations" as they are
directly offset by the same adjustment to "other income (expense), net"
in the consolidated statements of operations. Gains recognized from
adjustments to the fair value of the assets held in the deferred
compensation plan are recorded as additional compensation expense in
"operating expense" and as income in "other income (expense), net."
CASH EARNINGS AND PER SHARE DATA
--------------------------------
Reconciliation of Income from Continuing Operations to Cash Earnings from
Continuing Operations (3)
--------------------------------------------------------------------------
THREE MONTHS ENDED DECEMBER 31,
-------------------------------
2009 Per Share 2008 Per Share
---- --------- ---- ---------
Income from
Continuing
Operations $1,435 $0.02 $3,381 $0.06
Selected non-cash
items:
Depreciation
and amortization 5,369 0.09 3,720 0.06
Non-cash interest
on convertible note 1,016 0.02 941 0.01
Stock based
compensation 1,289 0.02 957 0.02
Non-cash items 7,674 0.13 5,618 0.09
Cash earnings -
Continuing Operations $9,109 $0.15 $8,999 $0.15
TWELVE MONTHS ENDED DECEMBER 31,
--------------------------------
2009 Per Share 2008 Per Share
---- --------- ---- ---------
Income from
Continuing Operations $32,088 $0.52 $31,804 $0.51
Selected non-cash items:
Depreciation and
amortization 20,498 0.33 14,922 0.24
Non-cash interest
on convertible note 3,962 0.06 3,670 0.06
Stock based
compensation 4,754 0.08 3,740 0.06
Non-cash items 29,214 0.47 22,332 0.36
Cash earnings -
Continuing Operations $61,302 $0.99 $54,136 $0.87
(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
------------------------------------
DECEMBER 31, DECEMBER 31,
2009 2008 (1)
---- -------
Cash and cash equivalents $9,257 $9,671
Restricted cash $15,432 $15,786
Accounts receivable, net $127,638 $124,804
Current assets before funds held
for clients $179,873 $180,234
Funds held for clients - current
and non-current $98,470 $113,121
Goodwill and other intangible
assets, net $375,211 $348,752
Total assets $711,969 $698,592
Current liabilities before client
fund obligations $88,402 $90,203
Client fund obligations $101,279 $116,638
Convertible notes $93,848 $89,887
Bank debt $110,000 $125,000
Total liabilities $441,351 $456,993
Treasury stock $(269,642) $(256,295)
Total stockholders' equity $270,618 $241,599
Debt to equity (2) 75.3% 88.9%
Days sales outstanding (DSO) -
continuing operations (3) 66 66
Shares outstanding 61,937 62,472
Basic weighted average common shares
Outstanding 61,200 61,839
Diluted weighted average common shares
Outstanding 61,859 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 FASB ASC Topic 470.20 "Debt with Conversion
and Other Options," as well as the impact of discontinued operations.
(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 twelve months ended December 31, 2008 excludes accounts receivable
and unbilled revenue totalling approximately $9.6 million, which related
to the acquisition of Mahoney Cohen & Company in New York on December 31,
2008. These receivables were excluded from the DSO calculation because
they are a component of the acquisition, as opposed to being associated
with the Company's 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.
