CBIZ Reports Second-Quarter And First-Half 2021 Results And Raises Full-Year 2021 Revenue Guidance
For the 2021 second quarter, CBIZ recorded revenue of
As previously announced on
For the first-half ended
Reconciliation tables for Adjusted EPS and Adjusted EBITDA to the most directly comparable GAAP measures can be found in the tables of this release.
During the first half of 2021, the Company repurchased a total of 2.0 million shares of its common stock. The balance outstanding on the Company's unsecured credit facility on
"Since the onset of the pandemic, we have focused our efforts on protecting our team, supporting our clients and continuing to invest in the growth of the business. The results that we have achieved through the first six months of this year reflect those efforts and investments. Given the growth we are seeing across virtually every service line combined with our successful acquisition activity, we are increasing our revenue guidance for the full year 2021 to 10% to 12% growth, up from our previous guidance of an 8% to 10% increase, Grisko, said."
"We are particularly pleased to have successfully completed four acquisitions this year, including three in the second quarter. On
2021 Outlook
- The Company increased its revenue growth expectations to within a range of 10% to 12% over the prior year, up from 8% to 10%.
- Although a number of factors may impact the tax rate, the Company expects an effective tax rate of approximately 25%.
- The Company expects a weighted average fully diluted share count of approximately 54.0 million shares.
- On a GAAP basis, the Company expects full-year fully diluted earnings per share within a range of
$1.25 to$1.29 . The Company expects Adjusted Diluted EPS to grow within a range of 12% to 15% over the$1.42 reported for 2020. A schedule reconciling GAAP Diluted EPS to Non-GAAP Adjusted Diluted EPS is attached.
Conference Call
CBIZ will host a conference call at
A replay of the webcast will be made available approximately two hours following the call on the Company's website at www.cbiz.com. For those without internet access, a replay of the call will also be available starting at approximately
About CBIZ
CBIZ is a leading provider of financial, insurance and advisory services to businesses throughout
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, the impact of COVID-19 on the Company's business and operations and those of our clients; the Company's ability to adequately manage and sustain 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 the Company's 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
|
||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) |
||||||||||||||
THREE MONTHS ENDED |
||||||||||||||
(In thousands, except percentages and per share data) |
||||||||||||||
Three Months Ended |
||||||||||||||
2021 |
% |
2020 |
% |
|||||||||||
Revenue |
$ |
278,648 |
100.0 |
% |
$ |
236,943 |
100.0 |
% |
||||||
Operating expenses (1) |
236,934 |
85.0 |
209,016 |
88.2 |
||||||||||
Gross margin |
41,714 |
15.0 |
27,927 |
11.8 |
||||||||||
Corporate general and administrative expenses (1) |
13,816 |
5.0 |
11,160 |
4.7 |
||||||||||
Legal settlement, net |
30,468 |
10.9 |
— |
— |
||||||||||
Operating (loss) income |
(2,570) |
(0.9) |
16,767 |
7.1 |
||||||||||
Other income (expense): |
||||||||||||||
Interest expense |
(959) |
(0.3) |
(2,074) |
(0.9) |
||||||||||
Gain on sale of operations, net |
6,385 |
2.3 |
57 |
— |
||||||||||
Other income, net (1) (2) |
8,373 |
3.0 |
13,336 |
5.6 |
||||||||||
Total other (expense) income, net |
13,799 |
5.0 |
11,319 |
4.7 |
||||||||||
Income from continuing operations before income tax expense |
11,229 |
4.1 |
28,086 |
11.8 |
||||||||||
Income tax expense |
2,616 |
6,607 |
||||||||||||
Income from continuing operations |
8,613 |
3.1 |
21,479 |
9.1 |
||||||||||
Loss from operations of discontinued businesses, net of tax |
(6) |
(11) |
||||||||||||
Net Income |
$ |
8,607 |
3.1 |
% |
$ |
21,468 |
9.1 |
% |
||||||
Diluted income per share: |
||||||||||||||
Continuing operations |
$ |
0.16 |
$ |
0.39 |
||||||||||
Discontinued operations |
— |
— |
||||||||||||
Net income |
$ |
0.16 |
$ |
0.39 |
||||||||||
Diluted weighted average common shares outstanding |
53,769 |
55,116 |
||||||||||||
Other data from continuing operations: |
||||||||||||||
Adjusted EBITDA (3) |
$ |
42,895 |
$ |
35,890 |
||||||||||
Adjusted EPS (3) |
$ |
0.50 |
$ |
0.39 |
(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 from continuing operations before income tax expense." |
Income and expenses related to the deferred compensation plan for the three months ended
Three Months Ended |
||||||||||||||
2021 |
% of Revenue |
2020 |
% of Revenue |
|||||||||||
Operating expenses |
$ |
6,761 |
2.4 |
% |
$ |
12,232 |
5.2 |
% |
||||||
Corporate general and administrative expenses |
$ |
850 |
0.3 |
% |
$ |
1,474 |
0.6 |
% |
||||||
Other income (expense), net |
$ |
7,611 |
2.7 |
% |
$ |
13,706 |
5.8 |
% |
Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the three months ended
Three Months Ended |
|||||||||||||||||||||||||||||
2021 |
2020 |
||||||||||||||||||||||||||||
As |
Deferred |
Adjusted |
% of |
As |
Deferred |
Adjusted |
% of |
||||||||||||||||||||||
Gross margin |
$ |
41,714 |
$ |
6,761 |
$ |
48,475 |
17.4 |
% |
$ |
27,927 |
$ |
12,232 |
$ |
40,159 |
16.9 |
% |
|||||||||||||
Operating (loss) income |
$ |
(2,570) |
$ |
7,611 |
$ |
5,041 |
1.8 |
% |
$ |
16,767 |
$ |
13,706 |
$ |
30,473 |
12.9 |
% |
|||||||||||||
Other income, net |
$ |
8,373 |
$ |
(7,611) |
$ |
762 |
0.3 |
% |
$ |
13,336 |
$ |
(13,706) |
$ |
(370) |
(0.2) |
% |
|||||||||||||
Income from continuing operations before income tax expense |
$ |
11,229 |
$ |
— |
$ |
11,229 |
4.0 |
% |
$ |
28,086 |
$ |
— |
$ |
28,086 |
11.9 |
% |
(2) |
Included in "Other income, net" for the three months ended |
(3) |
Refer to the financial highlights tables for a reconciliation of Non-GAAP financial measures to the most directly comparable GAAP financial measure, and for additional information as to the usefulness of the Non-GAAP financial measures to shareholders and investors. |
|
||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) |
||||||||||||||
SIX MONTHS ENDED |
||||||||||||||
(In thousands, except percentages and per share data) |
||||||||||||||
Six Months Ended |
||||||||||||||
2021 |
% |
2020 |
% |
|||||||||||
Revenue |
$ |
579,378 |
100.0 |
% |
$ |
514,398 |
100.0 |
% |
||||||
Operating expenses (1) |
460,905 |
79.6 |
408,843 |
79.5 |
||||||||||
Gross margin |
118,473 |
20.4 |
105,555 |
20.5 |
||||||||||
Corporate general and administrative expenses (1) |
28,299 |
4.9 |
21,649 |
4.2 |
||||||||||
Legal settlement, net |
30,468 |
5.3 |
— |
— |
||||||||||
Operating income |
59,706 |
10.2 |
83,906 |
16.3 |
||||||||||
Other income: |
||||||||||||||
Interest expense |
(1,836) |
(0.3) |
(3,193) |
(0.6) |
||||||||||
Gain on sale of operations, net |
6,385 |
1.1 |
152 |
— |
||||||||||
Other income (expense), net (1) (2) |
13,162 |
2.3 |
(2,464) |
(0.5) |
||||||||||
Total other expense, net |
17,711 |
3.1 |
(5,505) |
(1.1) |
||||||||||
Income from continuing operations before income tax benefit |
77,417 |
13.3 |
78,401 |
15.2 |
||||||||||
Income tax expense |
18,588 |
20,060 |
||||||||||||
Income from continuing operations |
58,829 |
10.2 |
58,341 |
11.3 |
||||||||||
Loss from operations of discontinued businesses, net of tax |
(13) |
(25) |
||||||||||||
Net income |
$ |
58,816 |
10.2 |
% |
$ |
58,316 |
11.3 |
% |
||||||
Diluted income per share: |
||||||||||||||
Continuing operations |
$ |
1.09 |
$ |
1.05 |
||||||||||
Discontinued operations |
— |
— |
||||||||||||
Net income |
$ |
1.09 |
$ |
1.05 |
||||||||||
Diluted weighted average common shares outstanding |
54,109 |
55,515 |
||||||||||||
Other data from continuing operations: |
||||||||||||||
Adjusted EBITDA (3) |
$ |
116,212 |
$ |
92,933 |
||||||||||
Adjusted EPS (3) |
$ |
1.43 |
$ |
1.05 |
(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 (expense), net." The deferred compensation plan has no impact on "Income from continuing operations before income tax expense." |
Income and expenses related to the deferred compensation plan for the six months ended
Six Months Ended |
||||||||||||||
2021 |
% of Revenue |
2020 |
% of Revenue |
|||||||||||
Operating expenses |
$ |
11,377 |
2.0 |
% |
$ |
(2,568) |
(0.5) |
% |
||||||
Corporate general and administrative expenses |
$ |
1,346 |
0.2 |
% |
$ |
(330) |
(0.1) |
% |
||||||
Other income (expense), net |
$ |
12,723 |
2.2 |
% |
$ |
(2,898) |
(0.6) |
% |
Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the six months ended
Six Months Ended |
|||||||||||||||||||||||||||||
2021 |
2020 |
||||||||||||||||||||||||||||
As Reported |
Deferred |
Adjusted |
% of |
As Reported |
Deferred |
Adjusted |
% of |
||||||||||||||||||||||
Gross margin |
$ |
118,473 |
$ |
11,377 |
$ |
129,850 |
22.4 |
% |
$ |
105,555 |
$ |
(2,568) |
$ |
102,987 |
20.0 |
% |
|||||||||||||
Operating income |
$ |
59,706 |
$ |
12,723 |
$ |
72,429 |
12.5 |
% |
$ |
83,906 |
$ |
(2,898) |
$ |
81,008 |
15.7 |
% |
|||||||||||||
Other income (expense), net |
$ |
13,162 |
$ |
(12,723) |
$ |
439 |
0.1 |
% |
$ |
(2,464) |
$ |
2,898 |
$ |
434 |
0.1 |
% |
|||||||||||||
Income from continuing operations before income tax expense |
$ |
77,417 |
$ |
— |
$ |
77,417 |
13.4 |
% |
$ |
78,401 |
$ |
— |
$ |
78,401 |
15.2 |
% |
(2) |
Included in "Other income (expense), net" for the six months ended |
(3) |
Refer to the financial highlights tables for a reconciliation of Non-GAAP financial measures to the most directly comparable GAAP financial measure, and for additional information as to the usefulness of the Non-GAAP financial measures to shareholders and investors. |
|
||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) |
||||||||||||||||
(In thousands) |
||||||||||||||||
SELECT SEGMENT DATA |
||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Revenue |
||||||||||||||||
Financial Services |
$ |
186,589 |
$ |
154,083 |
$ |
390,738 |
$ |
342,860 |
||||||||
Benefits and Insurance Services |
82,620 |
73,940 |
169,859 |
153,552 |
||||||||||||
National Practices |
9,439 |
8,920 |
18,781 |
17,986 |
||||||||||||
Total |
$ |
278,648 |
$ |
236,943 |
$ |
579,378 |
$ |
514,398 |
||||||||
Gross Margin |
||||||||||||||||
Financial Services |
$ |
35,669 |
$ |
26,666 |
$ |
98,072 |
$ |
76,845 |
||||||||
Benefits and Insurance Services |
14,844 |
12,657 |
35,150 |
27,046 |
||||||||||||
National Practices |
952 |
930 |
1,753 |
1,713 |
||||||||||||
Operating expenses - unallocated (1): |
||||||||||||||||
Other expense |
(2,990) |
(94) |
(5,125) |
(2,617) |
||||||||||||
Deferred compensation |
(6,761) |
(12,232) |
(11,377) |
2,568 |
||||||||||||
Total |
$ |
41,714 |
$ |
27,927 |
$ |
118,473 |
$ |
105,555 |
(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 from continuing operations 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/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." |
|
||||||||
SELECT CASH FLOW DATA |
||||||||
(In thousands) |
||||||||
Six Months Ended |
||||||||
2021 |
2020 |
|||||||
Net income |
$ |
58,816 |
$ |
58,316 |
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization expense |
12,876 |
11,491 |
||||||
Gain on sale of operations, net |
(6,385) |
(152) |
||||||
Bad debt expense, net of recoveries |
265 |
3,234 |
||||||
Adjustments to contingent earnout liability, net |
753 |
(155) |
||||||
Stock-based compensation expense |
5,454 |
4,280 |
||||||
Other noncash adjustments |
1,514 |
(160) |
||||||
Net income, after adjustments to reconcile net income to net cash provided by operating activities |
73,293 |
76,854 |
||||||
Changes in assets and liabilities, net of acquisitions and divestitures |
(6,986) |
(21,286) |
||||||
Operating cash flows provided by continuing operations |
66,307 |
55,568 |
||||||
Operating cash used in discontinued operations |
(13) |
(45) |
||||||
Net cash provided by operating activities |
66,294 |
55,523 |
||||||
Net cash (used in) provided by investing activities |
(40,137) |
12,807 |
||||||
Net cash used in financing activities |
(42,582) |
(70,560) |
||||||
Net decrease in cash, cash equivalents and restricted cash |
(16,425) |
(2,230) |
||||||
Cash, cash equivalents and restricted cash at beginning of year |
$ |
170,335 |
$ |
146,505 |
||||
Cash, cash equivalents and restricted cash at end of period |
$ |
153,910 |
$ |
144,275 |
||||
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheet: |
||||||||
Cash and cash equivalents |
$ |
4,677 |
$ |
9,620 |
||||
Restricted cash |
39,268 |
42,411 |
||||||
Cash equivalents included in funds held for clients |
109,965 |
92,244 |
||||||
Total cash, cash equivalents and restricted cash |
$ |
153,910 |
$ |
144,275 |
|
||||||
SELECT FINANCIAL DATA AND RATIOS |
||||||
(In thousands) |
||||||
|
|
|||||
Cash and cash equivalents |
4,677 |
4,652 |
||||
Restricted cash |
39,268 |
23,951 |
||||
Accounts receivable, net |
292,496 |
216,175 |
||||
Current assets before funds held for clients |
369,751 |
268,991 |
||||
Funds held for clients |
139,420 |
167,440 |
||||
|
807,939 |
756,750 |
||||
Total assets |
1,656,628 |
1,513,754 |
||||
Current liabilities before client fund obligations |
284,598 |
211,285 |
||||
Client fund obligations |
139,166 |
166,989 |
||||
Total long-term debt |
162,672 |
107,192 |
||||
Total liabilities |
944,296 |
811,134 |
||||
|
(661,772) |
(595,297) |
||||
Total stockholders' equity |
712,332 |
702,620 |
||||
Debt to equity |
22.8 |
% |
15.3 |
% |
||
Days sales outstanding (DSO) - continuing operations (1) |
84 |
72 |
||||
Shares outstanding |
52,719 |
54,099 |
||||
Basic weighted average common shares outstanding |
53,119 |
54,288 |
||||
Diluted weighted average common shares outstanding |
54,109 |
55,359 |
(1) |
DSO is provided for continuing operations and represents accounts receivable, net, at the end of the period, divided by 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 GAAP. DSO on |
|
|||||||||||||||
GAAP RECONCILIATION |
|||||||||||||||
Income from Continuing Operations to Adjusted EBITDA (1) |
|||||||||||||||
(In thousands) |
|||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
Income from continuing operations |
$ |
8,613 |
$ |
21,479 |
$ |
58,829 |
$ |
58,341 |
|||||||
Interest expense |
959 |
2,074 |
1,836 |
3,193 |
|||||||||||
Income tax expense |
2,616 |
6,607 |
18,588 |
20,060 |
|||||||||||
Gain on sale of operations, net |
(6,385) |
(57) |
(6,385) |
(152) |
|||||||||||
Legal settlement, net |
30,468 |
— |
30,468 |
— |
|||||||||||
Depreciation |
2,649 |
2,357 |
5,202 |
4,640 |
|||||||||||
Amortization |
3,975 |
3,430 |
7,674 |
6,851 |
|||||||||||
Adjusted EBITDA |
$ |
42,895 |
$ |
35,890 |
$ |
116,212 |
$ |
92,933 |
(1) |
CBIZ reports its financial results in accordance with GAAP. This table reconciles Adjusted EBITDA to the most directly comparable GAAP financial measure, "Income from continuing operations." Adjusted EBITDA is not defined by GAAP and should not be regarded as an alternative or replacement to any measurement of performance under GAAP. Adjusted EBITDA is commonly used by the Company, its shareholders and debt holders as a performance measurement to evaluate, assess and benchmark the Company's operational results. |
|
|||||||||||||||
GAAP RECONCILIATION |
|||||||||||||||
Income and Diluted Earnings Per Share ("EPS") from Continuing Operations to Adjusted Income and EPS(1) |
|||||||||||||||
(In thousands) |
|||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||
Amounts |
EPS |
Amounts |
EPS |
||||||||||||
Income from continuing operations |
$ |
8,613 |
$ |
0.16 |
$ |
58,829 |
$ |
1.09 |
|||||||
Adjustments: |
|||||||||||||||
Gain on sale of operations, net |
(6,385) |
(0.12) |
(6,385) |
(0.12) |
|||||||||||
Legal settlement, net |
30,468 |
0.56 |
30,468 |
0.56 |
|||||||||||
Income tax effect related to adjustments |
(5,608) |
(0.10) |
(5,782) |
(0.10) |
|||||||||||
Adjusted income from continuing operations |
$ |
27,088 |
$ |
0.50 |
$ |
77,130 |
$ |
1.43 |
(1) |
CBIZ reports its financial results in accordance with GAAP. This table reconciles Adjusted Income and Adjusted EPS to the most directly comparable GAAP financial measures, "Income from continuing operations" and "Diluted earnings per share from continuing operations." Adjusted Income and Adjusted EPS are not defined by GAAP and should not be regarded as an alternative or replacement to any measurement of performance under GAAP. Adjusted Income and Adjusted EPS, which excludes significant non-operating related gains and losses, are used by the Company for its shareholders and debt holders as a performance measure to evaluate, assess and benchmark the Company's operational results. |
|
|||||||
GAAP RECONCILIATION |
|||||||
Full Year 2021 EPS from Continuing Operations Guidance to Full Year 2021 Adjusted Diluted EPS |
|||||||
(In thousands) |
|||||||
Full Year 2021 Guidance |
|||||||
Low |
High |
||||||
Diluted EPS - GAAP Guidance |
$ |
1.25 |
$ |
1.29 |
|||
Gain on sale of operations, net |
(0.09) |
(0.09) |
|||||
Legal settlement, net |
0.43 |
0.43 |
|||||
Adjusted Diluted EPS Guidance |
$ |
1.59 |
$ |
1.63 |
|||
Diluted EPS - Reported for 2020 |
$ |
1.42 |
$ |
1.42 |
|||
Change in diluted EPS - GAAP |
(12) |
% |
(9) |
% |
|||
Change in diluted EPS - Adjusted Guidance |
12 |
% |
15 |
% |
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SOURCE
Ware Grove, Chief Financial Officer -or- Lori Novickis Director, Corporate Relations, CBIZ, Inc., Cleveland, Ohio, (216) 447-9000