FIRST-QUARTER HIGHLIGHTS:
- TOTAL REVENUE UP 8.7%; SAME-UNIT REVENUE UP 5.9%
- GAAP EPS UP 6.3%; ADJUSTED EPS UP 5.5%
- NET INCOME UP 5.1%; ADJUSTED EBITDA UP 4.8%
CLEVELAND,
April 25,
2024 /PRNewswire/ -- CBIZ, Inc., (NYSE: CBZ) ("CBIZ"
or the "Company"), a leading provider of financial, insurance and
advisory services, today announced results for the first quarter
ended March 31, 2024.
For the 2024 first quarter, CBIZ recorded revenue
of $494.3 million, an increase of
$39.7 million, or 8.7%, compared with
$454.6 million reported for the
same period in 2023. Acquired operations contributed $12.8 million, or 2.8%, to first-quarter 2024
revenue growth. Same-unit revenue increased by $26.9 million, or 5.9%, for the quarter, compared
with the same period a year ago. Net income was $76.9 million, or $1.53 per diluted share, compared with
$73.2 million, or $1.44 per diluted share, for the same period a
year ago.
Excluding non-recurring first-year integration
expenses related to the previously announced acquisitions of
Erickson, Brown & Kloster, LLC ("EBK") and CompuData, Inc.
("CompuData") during the first quarter of 2024, and similar
expenses related to the acquisition of Somerset CPAs and Advisors
("Somerset") in February 2023, Adjusted net income was
$77.5 million in the first quarter of
2024, compared with Adjusted net income of $74.3 million for the same period a year ago.
Adjusted earnings per share was $1.54
in the first quarter of 2024, an increase of 5.5%, compared with
Adjusted earnings per share of $1.46
for the same period a year ago. Adjusted EBITDA for the first
quarter of 2024 was $118.8 million,
up 4.8% compared with $113.3 million
for the same period in 2023.
Schedules reconciling Adjusted net income,
Adjusted earnings per share and Adjusted EBITDA to the most
directly comparable GAAP measures can be found in the tables
included at the end of this release.
The balance outstanding on the Company's
unsecured credit facility on March 31, 2024, was $437.8 million, with $147.9 million of unused borrowing capacity.
Jerry Grisko, CBIZ
President and Chief Executive Officer, said, "We are pleased to
report a strong start to the year with growth coming from each of
our major service lines across the business. Our results to date
are in line with our expectations and position us well going into
the second quarter and the rest of the year."
"We completed two strategic acquisitions in the
first quarter including our recently announced acquisition of
CompuData, a premier provider of technology solutions that are
increasingly in demand by our clients and complement our broader
accounting, tax and advisory offerings," he continued. "Based on
what we are seeing in our own business and in the marketplace, we
are confident in affirming our full-year guidance for revenue, GAAP
EPS and Adjusted EPS," concluded Grisko.
2024 Outlook
- The Company expects total revenue to grow within a range of 7%
to 9% over the prior year.
- The Company expects an effective tax rate of approximately
28%.
- The Company expects a weighted average fully diluted share
count of approximately 50.0 to 50.5 million shares.
- The Company expects GAAP fully diluted earnings per share to
grow within a range of 13% to 15%, to $2.70 to $2.75 per
share, compared with the $2.39 per
share reported for 2023.
- The Company expects Adjusted fully diluted earnings per share
to grow within a range of 12% to 14%, to $2.70 to $2.75 per
share over the Adjusted fully diluted earnings per share, of
$2.41 per share reported for
2023.
Conference Call
CBIZ will host a conference call at 11:00
a.m. (ET) today to discuss its results. The call will be
webcast and an archived replay will be available at
https://cbiz.gcs-web.com/investor-overview. Participants may
register at https://dpregister.com/sreg/10188094/fc2e2d0632.
About CBIZ
CBIZ is a leading provider of financial,
insurance and advisory services to businesses throughout
the United States. Financial
services include accounting, tax, government health care
consulting, transaction advisory, risk advisory, and valuation
services. Insurance services include employee benefits consulting,
retirement plan consulting, property and casualty insurance,
payroll, and human capital consulting. With more than 120 offices
in 33 states, CBIZ is one of the largest accounting and insurance
brokerage providers in the U.S. For more information, visit
www.cbiz.com.
Forward-Looking Statements
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: we may be more sensitive to revenue fluctuations than
other companies, which could result in fluctuations in the market
price of our common stock; payments on accounts receivable may be
slower than expected, or amounts due on receivables or notes may
not be fully collectible; we are dependent on the services of our
executive officers, other key employees, producers and service
personnel, the loss of whom may have a material adverse effect on
our business, financial condition and results of operations;
restrictions imposed by independence requirements and conflict of
interest rules may limit our ability to provide services to clients
of the attest firms with which we have contractual relationships
and the ability of such attest firms to provide attestation
services to our clients; our goodwill and intangible assets could
become impaired, which could lead to material non-cash charges
against earnings; certain liabilities resulting from acquisitions
are estimated and could lead to a material non-cash impact on
earnings; governmental regulations and interpretations are subject
to changes, which could have a material adverse effect on our
clients, our business, our business services operations, our
business models, or our revenue; changes in the United States healthcare or public health
environment, including new healthcare legislation or regulations,
may adversely affect the revenue and margins in our or our clients'
businesses; we are subject to risks relating to processing customer
transactions for our payroll and other transaction processing
businesses; cyber-attacks or other security breaches involving our
computer systems or the systems of one or more of our vendors or
clients could materially and adversely affect our business; we are
subject to risk as it relates to software that we license from
third parties; we could be held liable for errors and omissions,
contract claims, or other litigation judgments or expenses; the
future issuance of additional shares could adversely affect the
price of our common stock; our principal stockholders may have
substantial control over our operations; we require a significant
amount of cash for interest payments on our debt and to expand our
business as planned; terms of our credit facility may adversely
affect our ability to run our business and/or reduce stockholder
returns; our failure to satisfy covenants in our debt instruments
could cause a default under those instruments; we are reliant on
information processing systems and any failure of these systems
could have a material adverse effect on our business, financial
condition and results of operations; we may not be able to acquire
and finance additional businesses which may limit our ability to
pursue our business strategy; the business services industry is
competitive and fragmented; if we are unable to compete
effectively, our business, financial condition and results of
operations may be negatively impacted; there is volatility in our
stock price. Such forward-looking statements can be affected by
inaccurate assumptions we might make or by known or unknown risks
and uncertainties. Should one or more of these risks materialize,
or should the underlying assumptions prove incorrect, actual
results may vary materially from those anticipated, estimated or
projected. Consequently, no forward-looking statements can be
guaranteed.
A more detailed description of such risks and
uncertainties may be found in "Item 1A. Risk Factors" of the
Company's Annual Report on Form 10-K for the year ended
December 31, 2023, and the Company's
other filings with the Securities and Exchange Commission at
www.sec.gov.
All forward-looking statements made in this
release are made only as of the date hereof. The Company does not
undertake any obligation to publicly update or correct any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
CBIZ,
INC.
FINANCIAL
HIGHLIGHTS (UNAUDITED)
THREE MONTHS ENDED
MARCH 31, 2024 AND 2023
(In thousands,
except percentages and per share data)
|
|
|
Three Months Ended March 31,
|
|
|
2024
|
|
%
|
|
2023
|
|
%
|
Revenue
|
|
$
494,297
|
|
100.0 %
|
|
$
454,606
|
|
100.0 %
|
Operating expenses
(1)
|
|
376,485
|
|
76.2
|
|
341,011
|
|
75.0
|
Gross margin
|
|
117,812
|
|
23.8
|
|
113,595
|
|
25.0
|
Corporate general and
administrative expenses (1)
|
|
18,711
|
|
3.8
|
|
15,598
|
|
3.4
|
Operating income
|
|
99,101
|
|
20.0
|
|
97,997
|
|
21.6
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(4,511)
|
|
(0.9)
|
|
(3,641)
|
|
(0.8)
|
Gain on sale of
operations, net
|
|
—
|
|
—
|
|
99
|
|
—
|
Other income, net
(1) (2)
|
|
9,424
|
|
1.9
|
|
5,112
|
|
1.1
|
Total other income,
net
|
|
4,913
|
|
1.0
|
|
1,570
|
|
0.3
|
Income before income tax
expense
|
|
104,014
|
|
21.0
|
|
99,567
|
|
21.9
|
Income tax
expense
|
|
27,130
|
|
|
|
26,407
|
|
|
Net income
|
|
$
76,884
|
|
15.6 %
|
|
$
73,160
|
|
16.1 %
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
$
1.53
|
|
|
|
$
1.44
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average common shares outstanding
|
|
50,221
|
|
|
|
50,762
|
|
|
Other data:
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(3)
|
|
$ 118,830
|
|
|
|
$ 113,348
|
|
|
Adjusted EPS
(3)
|
|
$ 1.54
|
|
|
|
$ 1.46
|
|
|
(1)
|
CBIZ sponsors a
deferred compensation plan, under which a CBIZ employee's
compensation deferral is held in a rabbi trust and invested
accordingly as directed by the employee. Income and expenses
related to the deferred compensation plan are included in
"Operating expenses" and "Corporate general and administrative
expenses," and are directly offset by deferred compensation gains
or losses in "Other income, net." The deferred compensation plan
has no impact on "Income before income tax expense."
|
|
Income and expenses
related to the deferred compensation plan for the three months
ended March 31, 2024, and 2023, are as follows (in
thousands):
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
2024
|
|
% of Revenue
|
|
2023
|
|
% of Revenue
|
Operating
expense
|
|
$ 8,576
|
|
1.7 %
|
|
$ 4,760
|
|
1.0 %
|
Corporate general and
administrative expense
|
|
1,057
|
|
0.2 %
|
|
642
|
|
0.1 %
|
Other income,
net
|
|
9,633
|
|
1.9 %
|
|
5,402
|
|
1.2 %
|
|
|
|
Excluding the impact of
the above-mentioned income and expenses related to the deferred
compensation plan, the operating results for the three months ended
March 31, 2024, and 2023, are as follows (in thousands):
|
|
|
|
Three Months Ended March 31,
|
|
2024
|
|
2023
|
|
As
Reported
|
|
Deferred
Compensation
Plan
|
|
Adjusted
|
|
% of Revenue
|
|
As
Reported
|
|
Deferred
Compensation
Plan
|
|
Adjusted
|
|
% of
Revenue
|
Gross margin
|
$ 117,812
|
|
$
8,576
|
|
$ 126,388
|
|
25.6 %
|
|
$ 113,595
|
|
$
4,760
|
|
$ 118,355
|
|
26.0 %
|
Operating
income
|
99,101
|
|
9,633
|
|
108,734
|
|
22.0 %
|
|
97,997
|
|
5,402
|
|
103,399
|
|
22.7 %
|
Other income (expense),
net
|
9,424
|
|
(9,633)
|
|
(209)
|
|
— %
|
|
5,112
|
|
(5,402)
|
|
(290)
|
|
(0.1) %
|
Income before income
tax expense
|
104,014
|
|
—
|
|
104,014
|
|
21.0 %
|
|
99,567
|
|
—
|
|
99,567
|
|
21.9 %
|
|
|
(2)
|
Included in "Other
income, net" for the three months ended March 31, 2024, and 2023,
is expense of $0.4 million and $0.6 million, respectively, related
to net changes in the fair value of contingent consideration
related to CBIZ's prior acquisitions.
|
(3)
|
Refer to the schedules
reconciling Adjusted earnings per share and Adjusted EBITDA to the
most directly comparable GAAP measures at the end of this release,
and for additional information as to the usefulness of the Non-GAAP
financial measures to shareholders and investors.
|
CBIZ,
INC.
FINANCIAL
HIGHLIGHTS (UNAUDITED)
(In
thousands)
SELECT SEGMENT
DATA
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2024
|
|
2023
|
|
Revenue
|
|
|
|
|
|
Financial
Services
|
|
$
372,630
|
|
$
343,086
|
|
Benefits and Insurance
Services
|
|
108,408
|
|
100,054
|
|
National
Practices
|
|
13,259
|
|
11,466
|
|
Total
|
|
$
494,297
|
|
$
454,606
|
|
|
|
|
|
|
|
Gross Margin
|
|
|
|
|
|
Financial
Services
|
|
$
107,069
|
|
$
98,643
|
|
Benefits and Insurance
Services
|
|
24,771
|
|
23,131
|
|
National
Practices
|
|
1,326
|
|
883
|
|
Operating expenses -
unallocated (1):
|
|
|
|
|
|
Other
expense
|
|
(6,778)
|
|
(4,302)
|
|
Deferred
compensation
|
|
(8,576)
|
|
(4,760)
|
|
Total
|
|
$
117,812
|
|
$
113,595
|
|
(1)
|
Represents operating
expenses not directly allocated to individual businesses, including
stock-based compensation, consolidation and integration charges,
and certain advertising expenses. "Operating expenses -
unallocated" also includes gains or losses attributable to the
assets held in a rabbi trust associated with the Company's deferred
compensation plan. These gains or losses do not impact "Income
before income tax expense" as they are directly offset by the same
adjustment to "Other income (expense), net" in the Consolidated
Statements of Comprehensive Income. Net gains or losses recognized
from adjustments to the fair value of the assets held in the rabbi
trust are recorded as compensation expense (income) in "Operating
expenses" and "Corporate, general and administrative expenses," and
offset in "Other income (expense), net."
|
CBIZ,
INC.
SELECT CASH FLOW
DATA (UNAUDITED)
(In
thousands)
|
|
|
Three Months Ended March 31,
|
|
|
2024
|
|
2023
|
Net income
|
|
$
76,884
|
|
$
73,160
|
Adjustments to reconcile net income to net cash used
in operating activities:
|
|
|
|
|
Depreciation and
amortization expense
|
|
9,468
|
|
8,625
|
Gain on sale of
operations, net
|
|
—
|
|
(99)
|
Bad debt expense, net
of recoveries
|
|
550
|
|
461
|
Adjustments to
contingent earnout liability, net
|
|
434
|
|
630
|
Stock-based
compensation expense
|
|
2,638
|
|
3,831
|
Other noncash
adjustments
|
|
2,207
|
|
2,749
|
Net income, after adjustments to reconcile net income
to net cash used in
operating activities
|
|
92,181
|
|
89,357
|
Changes in assets and
liabilities, net of acquisitions and divestitures
|
|
(155,901)
|
|
(133,868)
|
Net cash used in operating
activities
|
|
(63,720)
|
|
(44,511)
|
Net cash used in investing
activities
|
|
(28,702)
|
|
(45,896)
|
Net cash provided by financing
activities
|
|
71,188
|
|
61,778
|
Net decrease in cash, cash equivalents and restricted
cash
|
|
(21,234)
|
|
(28,629)
|
Cash, cash equivalents
and restricted cash at beginning of year
|
|
$
157,148
|
|
$
160,145
|
Cash, cash equivalents and restricted cash at end of
period
|
|
$
135,914
|
|
$
131,516
|
|
|
|
|
|
Reconciliation of cash, cash equivalents and
restricted cash to the consolidated balance
sheet:
|
Cash and cash
equivalents
|
|
$
1,402
|
|
$
2,265
|
Restricted
cash
|
|
27,740
|
|
25,109
|
Cash equivalents
included in funds held for clients
|
|
106,772
|
|
104,142
|
Total cash, cash equivalents and restricted
cash
|
|
$
135,914
|
|
$
131,516
|
CBIZ,
INC.
SELECT FINANCIAL
DATA AND RATIOS (UNAUDITED)
(In
thousands)
|
|
|
March 31, 2024
|
|
December 31, 2023
|
Cash and cash
equivalents
|
|
1,402
|
|
8,090
|
Restricted
cash
|
|
27,740
|
|
30,362
|
Accounts receivable,
net
|
|
504,107
|
|
380,152
|
Current assets before
funds held for clients
|
|
574,819
|
|
453,499
|
Funds held for
clients
|
|
147,345
|
|
159,186
|
Goodwill and other
intangible assets, net
|
|
1,038,410
|
|
1,008,604
|
|
|
|
|
|
Total assets
|
|
2,196,998
|
|
2,043,592
|
|
|
|
|
|
Current liabilities
before client fund obligations
|
|
322,021
|
|
352,028
|
Client fund
obligations
|
|
148,034
|
|
159,893
|
Total long-term debt,
net
|
|
436,344
|
|
310,826
|
|
|
|
|
|
Total liabilities
|
|
1,329,909
|
|
1,251,974
|
|
|
|
|
|
Treasury
stock
|
|
(910,322)
|
|
(899,093)
|
|
|
|
|
|
Total stockholders' equity
|
|
867,089
|
|
791,618
|
|
|
|
|
|
Debt to
equity
|
|
50.3 %
|
|
39.3 %
|
Days sales outstanding
(DSO) (1)
|
|
101
|
|
78
|
|
|
|
|
|
Shares
outstanding
|
|
50,112
|
|
49,814
|
Basic weighted average
common shares outstanding
|
|
50,045
|
|
49,989
|
Diluted weighted
average common shares outstanding
|
|
50,221
|
|
50,557
|
(1)
|
DSO is provided for
continuing operations and represents accounts receivable, net, at
the end of the period, divided by trailing twelve months 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 GAAP. DSO on
March 31, 2023, was 94.
|
CBIZ,
INC.
GAAP
RECONCILIATION
Net Income and
Diluted Earnings Per Share ("EPS") to Adjusted Net Income, EPS and
EBITDA(1)
(In thousands,
except per share data)
|
|
Three Months Ended March 31,
|
|
2024
|
|
2023
|
|
Amounts
|
|
EPS
|
|
Amounts
|
|
EPS
|
Net income
|
$
76,884
|
|
$
1.53
|
|
$
73,160
|
|
$
1.44
|
Adjustments:
|
|
|
|
|
|
|
|
Transaction costs
related to acquisitions (2)
|
—
|
|
—
|
|
611
|
|
0.01
|
Integration &
retention costs related to acquisitions (2)
|
582
|
|
0.01
|
|
1,003
|
|
0.02
|
Facility optimization
costs (3)
|
255
|
|
0.01
|
|
—
|
|
—
|
Income tax effect
related to adjustments
|
(218)
|
|
(0.01)
|
|
(428)
|
|
(0.01)
|
Adjusted net income
|
$
77,503
|
|
$
1.54
|
|
$
74,346
|
|
$
1.46
|
Interest
expense
|
$
4,511
|
|
|
|
$
3,641
|
|
|
Income tax
expense
|
27,130
|
|
|
|
26,407
|
|
|
Gain on sale of
operations, net
|
—
|
|
|
|
(99)
|
|
|
Tax effect related to
the adjustments above
|
218
|
|
|
|
428
|
|
|
Depreciation
|
3,523
|
|
|
|
2,975
|
|
|
Amortization
|
5,945
|
|
|
|
5,650
|
|
|
Adjusted EBITDA
|
$
118,830
|
|
|
|
$
113,348
|
|
|
(1)
|
CBIZ reports its
financial results in accordance with GAAP. This table reconciles
Adjusted net income, Adjusted EPS, and Adjusted EBITDA to the most
directly comparable GAAP financial measures, "Net income" and
"Diluted earnings per share." Adjusted net income, Adjusted EPS and
Adjusted EBITDA are not defined by GAAP and should not be regarded
as an alternative or replacement to any financial information
determined under GAAP. Adjusted net (loss) income, Adjusted EPS and
Adjusted EBITDA exclude significant non-operating related gains and
losses that management does not consider on-going in nature. These
Non-GAAP financial measures are used by the Company as a
performance measure to evaluate, assess and benchmark the Company's
operational results and to evaluate results relative to employee
compensation targets. Accordingly, the Company believes the
presentation of these Non-GAAP financial measures allows its
stockholders, debt holders, and other interested parties to
meaningfully compare the Company's period-to-period operating
results.
|
(2)
|
These costs include,
but are not limited to, certain consulting, technology, personnel,
as well as other first year operating and general administrative
costs that are non-recurring in nature. Amounts reported in 2024
related to the costs incurred related to the acquisitions of EBK
and CompuData, and those reported in 2023 related to the Somerset
acquisition.
|
(3)
|
These costs related to
incremental non-recurring lease expense incurred as a result of
CBIZ's real estate optimization efforts.
|
CBIZ,
INC.
GAAP
RECONCILIATION
Full Year 2024
Diluted Earnings Per Share ("EPS") Guidance to Full Year 2024
Adjusted Diluted EPS
|
|
Full Year 2024 Guidance
|
|
Low
|
|
High
|
Diluted EPS - GAAP Guidance
|
$
2.70
|
|
$
2.75
|
Adjusted Diluted EPS Guidance
|
$
2.70
|
|
$
2.75
|
|
|
|
|
GAAP Diluted EPS for 2023
|
$
2.39
|
|
$
2.39
|
Adjusted Diluted EPS for 2023
|
$
2.41
|
|
$
2.41
|
GAAP Diluted EPS
Range
|
13 %
|
|
15 %
|
Adjusted Diluted EPS
Range
|
12 %
|
|
14 %
|
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SOURCE CBIZ, Inc.