Third-Quarter Revenue Grows 6.5%; EPS From Continuing Operations Up
14.3% Cash EPS Increases 31.3% CLEVELAND, Oct. 29 CBIZ, Inc.
(NYSE:CBZ) today announced results for the third quarter ended
September 30, 2009. CBIZ reported revenue of $179.0 million for the
third quarter ended September 30, 2009, an increase of 6.5% over
the $168.2 million reported for the third quarter of 2008. Revenue
from newly acquired operations, net of divestitures, contributed
$22.7 million or 13.5% to revenue growth in the third quarter
compared with the same period a year ago. Same-unit revenue
declined by 7.0%, or $11.8 million. CBIZ reported income from
continuing operations for the quarter of $5.1 million, or $0.08 per
diluted share, compared with $4.3 million, or $0.07 per diluted
share in the third quarter of 2008. For the nine-month period ended
September 30, 2009, CBIZ reported revenue of $588.3 million, an
increase of 8.8%, or $47.6 million over the $540.7 million reported
for the comparable nine-month period a year ago. Same-unit revenue
decreased by 4.6%, or $24.6 million, for the first nine months of
2009 compared to the same period a year ago. Acquisitions, net of
divestitures, contributed $72.1 million to revenue growth for the
first nine months of 2009. Net income from continuing operations
was $29.8 million for the first nine months of 2009, or $0.48 per
diluted share, compared with $28.0 million for the first nine
months of 2008, or $0.45 per diluted share. During the third
quarter of 2009, the Company repurchased 890 thousand shares of its
common stock at a cost of approximately $6.0 million and for the
year to date, the Company has repurchased approximately 1.7 million
shares at a cost of approximately $12.7 million. The outstanding
balance of the Company's unsecured bank line of credit at September
30, 2009, was $115.7 million compared with a balance of $125.0
million at December 31, 2008. The Company is reporting Cash EPS, a
non-GAAP measure designed to more clearly illustrate the impact of
certain non-cash charges to income from continuing operations. For
the quarter ended September 30, 2009, Cash EPS was $0.21 per
diluted share compared with $0.16 per diluted share for the same
quarter a year ago, an increase of 31.3%. For the nine-month period
ended September 30, 2009, Cash EPS was $0.83 per diluted share
compared with $0.71 for the comparable nine-month period a year
ago, an increase of 16.9%. A schedule which reconciles Cash EPS
with GAAP EPS is attached. "We are happy to report continued growth
in revenue and in earnings throughout 2009. The acquisitions we
made in 2008 are performing well and we are pleased to have closed
two additional acquisitions to date in 2009," stated Steven L.
Gerard, Chairman and CEO. "We continue to generate strong positive
cash flow in 2009, and given the challenges presented by economic
conditions, we are continuing to carefully manage expenses. For the
full year in 2009, we expect to report earnings per share from
continuing operations of approximately $0.54 to $0.55, which is an
increase of approximately 8% to 10% compared with 2008," 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 http://www.cbiz.com/. Shareholders and analysts wishing to
participate in the conference call may dial 1-800-862-6557 several
minutes before 11:00 a.m. (ET). If you are dialing from outside the
United States, dial 1-630-691-2748. A replay of the call will be
available starting at 1:00 p.m. (ET) October 29 through midnight
(ET), November 3, 2009. 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
25614953. A replay of the webcast will also be available on the
Company's web site at http://www.cbiz.com/. CBIZ, Inc. provides
professional business services that help clients better manage
their finances, employees and technology. As one of the largest
benefits specialists and one of the largest accounting, valuation
and medical practice management companies in the United States,
CBIZ provides its clients with financial services including
accounting and tax, internal audit, merger and acquisition
advisory, and valuation. Employee services include group benefits,
property and casualty insurance, payroll, HR consulting and wealth
management. CBIZ also provides information technology, hardware and
software solutions, healthcare consulting and medical practice
management. These services are provided through more than 140
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. For
further information regarding CBIZ, call our Investor Relations
Office at (216) 447-9000 or visit our web site at
http://www.cbiz.com/. CBIZ, INC. FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (In thousands,
except percentages and per share data) THREE MONTHS ENDED SEPTEMBER
30, --------------- 2009 % 2008 (1) % ---- - -------- - Revenue
$179,023 100.0% $168,159 100.0% Operating expenses 163,783 91.5%
148,721 88.4% ------ --- ------ ---- Gross margin 15,240 8.5%
19,438 11.6% Corporate general and administrative expenses 8,491
4.7% 7,270 4.3% ----- --- ------ --- Operating income 6,749 3.8%
12,168 7.3% Other income (expense): Interest expense (3,181) -1.8%
(2,702) -1.6% Gain on sale of operations, net 910 0.5% 229 0.1%
Other income (expense), net (2) 3,144 1.8% (3,018) -1.8% ----- ---
------ ---- Total other income (expense), net 873 0.5% (5,491)
-3.3% Income from continuing operations before income tax expense
7,622 4.3% 6,677 4.0% Income tax expense 2,542 2,348 ----- ---
----- --- Income from continuing operations 5,080 2.8% 4,329 2.6%
Loss from operations of discontinued businesses, net of tax (4)
(56) Gain on disposal of discontinued businesses, net of tax 27 132
------ --- ------ --- Net income $5,103 2.9% $4,405 2.6% ======
====== Diluted earnings per share: Continuing operations $0.08
$0.07 Discontinued operations - - --- --- Net income $0.08 $0.07
===== ===== Diluted weighted average common shares outstanding
61,712 61,772 Other data from continuing operations: EBIT (3)
$9,893 $9,150 EBITDA (3) $14,997 $12,881 (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." (2) Includes a net gain of $2,890 and a net loss of
$1,898 for the three months ended September 30, 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." (3) EBIT
represents income from continuing operations before income taxes,
interest expense, and gain on sale of divested operations. EBITDA
represents EBIT before depreciation and amortization expense of
$5,104 and $3,731 for the three months ended September 30, 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) NINE MONTHS ENDED SEPTEMBER 30, 2009 AND
2008 (In thousands, except percentages and per share data) NINE
MONTHS ENDED SEPTEMBER 30, --------------- 2009 % 2008 (1) % ---- -
-------- - Revenue $588,272 100.0% $540,713 100.0% Operating
expenses 511,723 87.0% 461,402 85.3% ------ ---- ------ ---- Gross
margin 76,549 13.0% 79,311 14.7% Corporate general and
administrative expenses 23,887 4.1% 22,313 4.2% ------ --- ------
---- Operating income 52,662 8.9% 56,998 10.5% Other income
(expense): Interest expense (10,221) -1.7% (8,044) -1.5% Gain on
sale of operations, net 1,004 0.2% 470 0.1% Other income (expense),
net (2) 5,449 0.9% (4,030) -0.7% ----- --- ------ ---- Total other
expense, net (3,768) -0.6% (11,604) -2.1% Income from continuing
operations before income tax expense 48,894 8.3% 45,394 8.4% Income
tax expense 19,123 17,441 ------ --- ------ --- Income from
continuing operations 29,771 5.1% 27,953 5.2% Income (loss) from
operations of discontinued businesses, net of tax 131 (250) Gain
(loss) on disposal of discontinued businesses, net of tax 178 (308)
------- --- ------- --- Net income $30,080 5.1% $27,395 5.1%
======= ======= Diluted earnings (loss) per share: Continuing
operations $0.48 $0.45 Discontinued operations 0.01 (0.01) ----
----- Net income $0.49 $0.44 ===== ===== Diluted weighted average
common shares outstanding 61,897 62,801 Other data from continuing
operations: EBIT (3) $58,111 $52,968 EBITDA (3) $73,370 $64,314 (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." (2) Includes a net gain of $4,539
and a net loss of $3,817 for the nine months ended September 30,
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." (3)
EBIT represents income from continuing operations before income
taxes, interest expense, and gain on sale of divested operations.
EBITDA represents EBIT before depreciation and amortization expense
of $15,259 and $11,346 for the nine months ended September 30, 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 NINE MONTHS
ENDED SEPTEMBER 30, SEPTEMBER 30, --------------- ---------------
2009 2008 (1) 2009 2008 (1) ---- -------- ---- -------- Revenue
Financial Services $86,854 $70,404 $305,685 $244,552 Employee
Services 41,385 44,513 129,363 139,075 Medical Management
Professionals 40,724 41,345 122,478 124,010 National Practices
10,060 11,897 30,746 33,076 ------ ------ ------ ------ Total
$179,023 $168,159 $588,272 $540,713 ======== ======== ========
======== Gross Margin Financial Services $7,966 $6,168 $50,223
$42,696 Employee Services 6,317 7,538 21,511 24,353 Medical
Management Professionals 5,583 5,561 16,898 15,712 National
Practices 305 924 816 1,832 Operating expenses - unallocated (2)
(4,931) (753) (12,899) (5,282) ------ ---- ------- ------ Total
$15,240 $19,438 $76,549 $79,311 ======= ======= ======= ======= (1)
Certain amounts in the 2008 financial data have been reclassified
to conform to the current year presentation. (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 a net gain of $2,529 and a net loss of $1,611
for the three months ended September 30, 2009 and 2008,
respectively, and a net gain of $3,977 and a net loss of $3,226 for
the nine months ended September 30, 2009 and 2008, respectively,
attributable to assets held in the Company's deferred compensation
plan. Eliminating the impact of the gain or loss attributable to
the deferred compensation plan would result in unallocated
operating expenses of $2,402 and $2,364 for the three months ended
September 30, 2009 and 2008, respectively, and $8,922 and $8,508
for the nine months ended September 30, 2009 and 2008,
respectively. CASH EARNINGS AND PER SHARE DATA
-------------------------------- Reconciliation of Income from
Continuing Operations to Cash Earnings from Continuing Operations
(3)
--------------------------------------------------------------------
THREE MONTHS ENDED SEPTEMBER 30, --------------------------------
2009 Per Share 2008 Per Share ---- ----------- ---- -----------
Income from Continuing Operations $5,080 $0.08 $4,329 $0.07
Selected non-cash items: Depreciation and amortization 5,104 0.09
3,731 0.06 Non-cash interest on convertible note 1,003 0.02 929
0.01 Stock based compensation 1,285 0.02 958 0.02 ----- ---- ---
---- Non-cash items 7,392 0.13 5,618 0.09 ----- ---- ----- ----
Cash earnings - Continuing Operations $12,472 $0.21 $9,947 $0.16
======= ===== ====== ===== NINE MONTHS ENDED SEPTEMBER 30,
------------------------------- 2009 Per Share 2008 Per Share ----
----------- ---- ----------- Income from Continuing Operations
$29,771 $0.48 $27,953 $0.45 Selected non-cash items: Depreciation
and amortization 15,259 0.25 11,346 0.18 Non-cash interest on
convertible note 2,946 0.05 2,729 0.04 Stock based compensation
3,465 0.05 2,783 0.04 ----- ---- ----- ---- Non-cash items 21,670
0.35 16,858 0.26 ------ ---- ------ ---- Cash earnings - Continuing
Operations $51,441 $0.83 $44,811 $0.71 ======= ===== ======= =====
(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 ------------------------------------ SEPTEMBER 30,
DECEMBER 31, 2009 2008 (1) ---- ---- Cash and cash equivalents
$3,589 $9,672 Restricted cash $13,983 $15,786 Accounts receivable,
net $148,945 $129,164 Current assets before funds held for clients
$186,795 $178,565 Funds held for clients - current and non-current
$70,581 $113,121 Goodwill and other intangible assets, net $365,593
$350,216 Total assets $681,812 $698,592 Current liabilities before
client fund obligations $88,344 $90,193 Client fund obligations
$73,523 $116,638 Convertible notes $92,832 $89,887 Bank debt
$115,700 $125,000 Total liabilities $416,121 $456,993 Treasury
stock $(269,396) $(256,295) Total stockholders' equity $265,691
$241,599 Debt to equity (2) 78.5% 88.9% Days sales outstanding
(DSO) - continuing operations (3) 70 67 Shares outstanding 61,644
62,472 ====== ====== Basic weighted average common shares
outstanding 61,302 61,839 ====== ====== Diluted weighted average
common shares outstanding 61,897 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." (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 nine months ended September 30, 2009 and
the twelve months ended December 31, 2008 excludes accounts
receivable, unbilled revenue and daily revenue for the two
businesses that were acquired on December 31, 2008. 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. DSO at September 30, 2008 was 71 days. DATASOURCE:
CBIZ, Inc. CONTACT: Ware Grove, Chief Financial Officer, or Lori
Novickis, Director, Corporate Relations, both of CBIZ, Inc.,
+1-216-447-9000 Web Site: http://www.cbiz.com/
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