UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
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(Registrant's telephone number, including area code)
Note Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition
On October 27, 2022, CBIZ, Inc. (the "Company") issued a press release announcing its financial results for the three and nine months ended September 30, 2022. A copy of the press release is furnished herewith as Exhibit 99.1. The exhibit contains, and may implicate, forward-looking statements regarding the Company and include cautionary statements identified important factors that could cause actual results to differ materially from those anticipated.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
99.1 Press Release of CBIZ, Inc. dated October 27, 2022, announcing its financial results for the three and nine months ended September 30, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURES:
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: October 28, 2022
CBIZ, Inc.
| By: | /s/ Ware H. Grove | |||||||
| Name: | Ware H. Grove | |||||||
| Title: | Chief Financial Officer | |||||||
Exhibit 99.1
 |  | ||||||||||||||||
| FOR IMMEDIATE RELEASE | CONTACT: | Ware Grove | |||||||||||||||
| Chief Financial Officer | |||||||||||||||||
| -or- | |||||||||||||||||
| Lori Novickis | |||||||||||||||||
| Director, Corporate Relations | |||||||||||||||||
| CBIZ, Inc. | |||||||||||||||||
| Cleveland, Ohio | |||||||||||||||||
| (216) 447-9000 | |||||||||||||||||
CBIZ REPORTS THIRD-QUARTER AND NINE-MONTH 2022 RESULTS
AND INCREASES FULL-YEAR 2022 GUIDANCE
THIRD-QUARTER HIGHLIGHTS:
•TOTAL REVENUE UP 28.5%; SAME-UNIT REVENUE UP 12.3%
•GAAP EPS UP 29.3%; ADJUSTED EPS UP 24.4%
•INCOME FROM CONTINUING OPERATIONS UP 26.6%; ADJUSTED EBITDA UP 23.1%
NINE-MONTH HIGHLIGHTS:
•TOTAL REVENUE UP 29.6%; SAME-UNIT REVENUE UP 11.1%
•GAAP EPS UP 48.0%; ADJUSTED EPS UP 25.5%
•INCOME FROM CONTINUING OPERATIONS UP 45.1%; ADJUSTED EBITDA UP 26.7%
2022 OUTLOOK:
•TOTAL REVENUE GROWTH INCREASED TO 26% - 28%
•GAAP EPS INCREASED TO 48% - 51%
•ADJUSTED EPS INCREASED TO 26% - 28%
CLEVELAND (October 27, 2022) – CBIZ, Inc., (NYSE: CBZ) (“CBIZ” or the “Company”), a leading provider of financial, insurance and advisory services, today announced results for the third quarter ended September 30, 2022.
For the 2022 third quarter, CBIZ recorded revenue of $363.3 million, an increase of $80.5 million, or 28.5%, compared with $282.7 million reported for the same period in 2021. Acquired operations, net of divestitures, contributed $45.7 million, or 16.2%, to third-quarter 2022 revenue growth. Same-unit revenue increased by $34.8 million, or 12.3%, for the quarter, compared with the same period a year ago. Income from continuing operations was $27.5 million, or $0.53 per diluted share, compared with $21.7 million, or $0.41 per diluted share, for the same period a year ago.
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Adjusted income from continuing operations was $26.5 million, or $0.51 per diluted share, compared with $21.7 million, or $0.41 per diluted share, for the same period a year ago. Adjusted EBITDA for the third quarter was $45.9 million, compared with $37.3 million for the same period in 2021.
For the nine months ended September 30, 2022, CBIZ recorded revenue of $1,116.9 million, an increase of $254.8 million, or 29.6%, over the $862.1 million recorded for the same period in 2021. Acquisitions, net of divestitures, contributed $159.5 million, or 18.5%, to revenue growth in the nine months ended September 30, 2022. Same-unit revenue increased by $95.3 million, or 11.1%, compared with the same period a year ago. Income from continuing operations was $116.9 million, or $2.22 per diluted share, for the nine months ended September 30, 2022, compared with $80.5 million, or $1.50 per diluted share, for the same period a year ago.
Adjusted income from continuing operations was $121.8 million, or $2.31 per diluted share, for the nine months ended September 30, 2022, compared with $98.7 million, or $1.84 per diluted share, for the same period a year ago. Adjusted EBITDA for the nine months was $194.5 million, compared with $153.5 million for the same period in 2021.
As previously announced in the second quarter of 2021, the Company recorded a nonrecurring settlement charge of $30.5 million and a $6.4 million non-recurring gain on sale of operations. These items were eliminated to arrive at Adjusted earnings per diluted share for the nine months ended September 30, 2021. In 2022, the Company incurred non-recurring transaction and first-year integration expenses related to the Marks Paneth acquisition. These expenses were eliminated to report Adjusted earnings per diluted share for 2022. Schedules reconciling Adjusted income from continuing operations, Adjusted EPS and Adjusted EBITDA to the most directly comparable GAAP measures can be found in the tables included in this release.
During the nine months ended September 30, 2022, the Company repurchased approximately 1.6 million shares of its common stock on the open market. Between October 1, 2022, and October 26, 2022, the Company repurchased an additional 397,000 shares. The balance outstanding on the Company’s unsecured credit facility on September 30, 2022, was $271.1 million with $310.9 million of unused borrowing capacity.
Jerry Grisko, CBIZ President and Chief Executive Officer, said, “We are pleased that our very strong performance for the first half this year has continued through the third quarter. With same unit revenue up 11.1% year-to-date, we are seeing strong organic revenue growth from every major service line across our business. Our recent acquisitions are also significant contributors to our results this year. Given our positive performance to date and our outlook for the remainder of the year, we are raising our full-year 2022 guidance of revenue growth to within a range of 26% and 28% and growth in adjusted earnings per share to within a range of 26% and 28%.”
2022 Outlook
•The Company increased its revenue growth expectations to within a range of 26% to 28% over the prior year, up from previous guidance of 23% to 25% in revenue growth.
•On a GAAP basis, the Company expects full-year fully diluted earnings per share from continuing operations to grow within a range of 48% to 51% per share over the $1.32 per share reported in 2021, up from previous guidance of 45% to 48% growth per share.
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NYSE: CBZ ● www.cbiz.com ● Twitter @cbz
•The Company expects Adjusted fully diluted earnings per share from continuing operations to grow within a range of 26% to 28% over the Adjusted $1.66 reported for 2021, up from previous guidance of a 25% to 27% increase per share. A schedule reconciling GAAP Diluted EPS to Non-GAAP Adjusted Diluted EPS is attached.
•Although multiple 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 52.5 million to 53.0 million shares.
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/10172401/f4d7c90ec1.
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 100 offices in 32 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, 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 Securities and Exchange Commission at www.sec.gov.
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CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(In thousands, except percentages and per share data)
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2022 | % | 2021 | % | |||||||||||||||||||||||
| Revenue | $ | 363,262 | 100.0 | % | $ | 282,719 | 100.0 | % | ||||||||||||||||||
Operating expenses (1) | 306,017 | 84.2 | 238,328 | 84.3 | ||||||||||||||||||||||
| Gross margin | 57,245 | 15.8 | 44,391 | 15.7 | ||||||||||||||||||||||
Corporate general and administrative expenses (1) | 15,893 | 4.4 | 13,035 | 4.6 | ||||||||||||||||||||||
| Operating income | 41,352 | 11.4 | 31,356 | 11.1 | ||||||||||||||||||||||
| Other (expense) income: | ||||||||||||||||||||||||||
| Interest expense | (2,305) | (0.6) | (1,016) | (0.4) | ||||||||||||||||||||||
| Gain on sale of operations, net | 176 | — | — | — | ||||||||||||||||||||||
Other expense, net (1) (2) | (2,618) | (0.7) | (1,133) | (0.4) | ||||||||||||||||||||||
| Total other expense, net | (4,747) | (1.3) | (2,149) | (0.8) | ||||||||||||||||||||||
| Income from continuing operations before income tax expense | 36,605 | 10.1 | 29,207 | 10.3 | ||||||||||||||||||||||
| Income tax expense | 9,131 | 7,512 | ||||||||||||||||||||||||
| Income from continuing operations | 27,474 | 7.6 | 21,695 | 7.7 | ||||||||||||||||||||||
| Loss from operations of discontinued businesses, net of tax | (4) | (4) | ||||||||||||||||||||||||
| Net Income | $ | 27,470 | 7.6 | % | $ | 21,691 | 7.7 | % | ||||||||||||||||||
| Diluted income per share: | ||||||||||||||||||||||||||
| Continuing operations | $ | 0.53 | $ | 0.41 | ||||||||||||||||||||||
| Discontinued operations | — | — | ||||||||||||||||||||||||
| Net income | $ | 0.53 | $ | 0.41 | ||||||||||||||||||||||
| Diluted weighted average common shares outstanding | 52,238 | 53,226 | ||||||||||||||||||||||||
| Other data from continuing operations: | ||||||||||||||||||||||||||
Adjusted EBITDA (3) | $ | 45,865 | $ | 37,268 | ||||||||||||||||||||||
Adjusted EPS (3) | $ | 0.51 | $ | 0.41 | ||||||||||||||||||||||
(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 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 three months ended September 30, 2022, and 2021 are as follows (in thousands):
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2022 | % of Revenue | 2021 | % of Revenue | |||||||||||||||||||||||
| Operating income | $ | (3,995) | (1.1) | % | $ | (212) | (0.1) | % | ||||||||||||||||||
| Corporate general and administrative income | (697) | (0.2) | % | (86) | — | % | ||||||||||||||||||||
| Other expense, net | (4,692) | (1.3) | % | (298) | (0.1) | % | ||||||||||||||||||||
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Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the three months ended September 30, 2022, and 2021 are as follows (in thousands):
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
| As Reported | Deferred Compensation Plan | Adjusted | % of Revenue | As Reported | Deferred Compensation Plan | Adjusted | % of Revenue | ||||||||||||||||||||||||||||||||||||||||
| Gross margin | $ | 57,245 | $ | (3,995) | $ | 53,250 | 14.7 | % | $ | 44,391 | $ | (212) | $ | 44,179 | 15.6 | % | |||||||||||||||||||||||||||||||
| Operating income | 41,352 | (4,692) | 36,660 | 10.1 | % | 31,356 | (298) | 31,058 | 11.0 | % | |||||||||||||||||||||||||||||||||||||
| Other expense, net | (2,618) | 4,692 | 2,074 | 0.6 | % | (1,133) | 298 | (835) | (0.3) | % | |||||||||||||||||||||||||||||||||||||
| Income from continuing operations before income tax expense | 36,605 | — | 36,605 | 10.1 | % | 29,207 | — | 29,207 | 10.3 | % | |||||||||||||||||||||||||||||||||||||
(2)Included in "Other expense, net" for the three months ended September 30, 2022 and 2021, is expense of $0.4 million and $0.8 million, respectively, related to net changes in the fair value of contingent consideration related to CBIZ's prior acquisitions.
(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.
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CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(In thousands, except percentages and per share data)
| Nine Months Ended September 30, | ||||||||||||||||||||||||||
| 2022 | % | 2021 | % | |||||||||||||||||||||||
| Revenue | $ | 1,116,936 | 100.0 | % | $ | 862,097 | 100.0 | % | ||||||||||||||||||
Operating expenses (1) | 886,052 | 79.3 | 699,233 | 81.1 | ||||||||||||||||||||||
| Gross margin | 230,884 | 20.7 | 162,864 | 18.9 | ||||||||||||||||||||||
Corporate general and administrative expenses (1) | 43,128 | 3.9 | 41,334 | 4.8 | ||||||||||||||||||||||
| Legal settlement, net | — | — | 30,468 | 3.5 | ||||||||||||||||||||||
| Operating income | 187,756 | 16.8 | 91,062 | 10.6 | ||||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||
| Interest expense | (5,209) | (0.5) | (2,852) | (0.3) | ||||||||||||||||||||||
| Gain on sale of operations, net | 311 | — | 6,385 | 0.7 | ||||||||||||||||||||||
Other (expense) income, net (1) (2) | (24,919) | (2.2) | 12,029 | 1.4 | ||||||||||||||||||||||
| Total other (expense) income, net | (29,817) | (2.7) | 15,562 | 1.8 | ||||||||||||||||||||||
| Income from continuing operations before income tax expense | 157,939 | 14.1 | 106,624 | 12.4 | ||||||||||||||||||||||
| Income tax expense | 41,074 | 26,100 | ||||||||||||||||||||||||
| Income from continuing operations | 116,865 | 10.5 | 80,524 | 9.3 | ||||||||||||||||||||||
| Loss from operations of discontinued businesses, net of tax | (13) | (17) | ||||||||||||||||||||||||
| Net income | $ | 116,852 | 10.5 | % | $ | 80,507 | 9.3 | % | ||||||||||||||||||
| Diluted income per share: | ||||||||||||||||||||||||||
| Continuing operations | $ | 2.22 | $ | 1.50 | ||||||||||||||||||||||
| Discontinued operations | — | — | ||||||||||||||||||||||||
| Net income | $ | 2.22 | $ | 1.50 | ||||||||||||||||||||||
| Diluted weighted average common shares outstanding | 52,720 | 53,796 | ||||||||||||||||||||||||
| Other data from continuing operations: | ||||||||||||||||||||||||||
Adjusted EBITDA (3) | $ | 194,494 | $ | 153,480 | ||||||||||||||||||||||
Adjusted EPS (3) | $ | 2.31 | $ | 1.84 | ||||||||||||||||||||||
(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 (expense) 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 nine months ended September 30, 2022, and 2021 are as follows (in thousands):
| Nine Months Ended September 30, | ||||||||||||||||||||||||||
| 2022 | % of Revenue | 2021 | % of Revenue | |||||||||||||||||||||||
| Operating (income) expenses | $ | (23,000) | (2.1) | % | $ | 11,165 | 1.3 | % | ||||||||||||||||||
| Corporate general and administrative (income) expenses | (3,319) | (0.3) | % | 1,260 | 0.1 | % | ||||||||||||||||||||
| Other (expense) income, net | (26,319) | (2.4) | % | 12,425 | 1.4 | % | ||||||||||||||||||||
Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the nine months ended September 30, 2022, and 2021 are as follows (in thousands):
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NYSE: CBZ ● www.cbiz.com ● Twitter @cbz
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
| As Reported | Deferred Compensation Plan | Adjusted | % of Revenue | As Reported | Deferred Compensation Plan | Adjusted | % of Revenue | ||||||||||||||||||||||||||||||||||||||||
| Gross margin | $ | 230,884 | $ | (23,000) | $ | 207,884 | 18.6 | % | $ | 162,864 | $ | 11,165 | $ | 174,029 | 20.2 | % | |||||||||||||||||||||||||||||||
| Operating income | 187,756 | (26,319) | 161,437 | 14.5 | % | 91,062 | 12,425 | 103,487 | 12.0 | % | |||||||||||||||||||||||||||||||||||||
| Other (expense) income, net | (24,919) | 26,319 | 1,400 | 0.1 | % | 12,029 | (12,425) | (396) | — | % | |||||||||||||||||||||||||||||||||||||
| Income from continuing operations before income tax expense | 157,939 | — | 157,939 | 14.1 | % | 106,624 | — | 106,624 | 12.4 | % | |||||||||||||||||||||||||||||||||||||
(2)Included in "Other (expense) income, net" for the nine months ended September 30, 2022 and 2021, is expense of $1.9 million and $1.6 million, respectively, related to net changes in the fair value of contingent consideration related to CBIZ's prior acquisitions.
(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.
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CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
(In thousands)
SELECT SEGMENT DATA
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Financial Services | $ | 259,998 | $ | 187,232 | $ | 808,052 | $ | 577,970 | ||||||||||||||||||
| Benefits and Insurance Services | 92,067 | 85,797 | 276,261 | 255,656 | ||||||||||||||||||||||
| National Practices | 11,197 | 9,690 | 32,623 | 28,471 | ||||||||||||||||||||||
| Total | $ | 363,262 | $ | 282,719 | $ | 1,116,936 | $ | 862,097 | ||||||||||||||||||
| Gross Margin | ||||||||||||||||||||||||||
| Financial Services | $ | 39,661 | $ | 31,054 | $ | 168,272 | $ | 129,126 | ||||||||||||||||||
| Benefits and Insurance Services | 18,746 | 16,758 | 55,263 | 51,908 | ||||||||||||||||||||||
| National Practices | 1,454 | 1,176 | 3,405 | 2,929 | ||||||||||||||||||||||
| Operating expenses - unallocated (1): | ||||||||||||||||||||||||||
| Other expense | (6,611) | (4,809) | (19,056) | (9,934) | ||||||||||||||||||||||
| Deferred compensation | 3,995 | 212 | 23,000 | (11,165) | ||||||||||||||||||||||
| Total | $ | 57,245 | $ | 44,391 | $ | 230,884 | $ | 162,864 | ||||||||||||||||||
(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 (expense) income, 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 (expense) income, net."
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CBIZ, INC.
SELECT CASH FLOW DATA (UNAUDITED)
(In thousands)
| Nine Months Ended September 30, | ||||||||||||||
| 2022 | 2021 | |||||||||||||
| Net income | $ | 116,852 | $ | 80,507 | ||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization expense | 24,707 | 19,921 | ||||||||||||
| Gain on sale of operations, net | (311) | (6,385) | ||||||||||||
| Bad debt expense, net of recoveries | 1,295 | 562 | ||||||||||||
| Adjustments to contingent earnout liability, net | 1,917 | 1,599 | ||||||||||||
| Stock-based compensation expense | 11,987 | 8,359 | ||||||||||||
| Other noncash adjustments | 3,607 | 6,768 | ||||||||||||
| Net income, after adjustments to reconcile net income to net cash provided by operating activities | 160,054 | 111,331 | ||||||||||||
| Changes in assets and liabilities, net of acquisitions and divestitures | (99,982) | (30,367) | ||||||||||||
| Operating cash flows provided by continuing operations | 60,072 | 80,964 | ||||||||||||
| Operating cash used in discontinued operations | (13) | (18) | ||||||||||||
| Net cash provided by operating activities | 60,059 | 80,946 | ||||||||||||
| Net cash used in investing activities | (95,550) | (70,728) | ||||||||||||
| Net cash provided by financing activities | 6,025 | 1,678 | ||||||||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (29,466) | 11,896 | ||||||||||||
| Cash, cash equivalents and restricted cash at beginning of year | $ | 150,474 | $ | 170,335 | ||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 121,008 | $ | 182,231 | ||||||||||
| Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheet: | ||||||||||||||
| Cash and cash equivalents | $ | 2,040 | $ | 2,749 | ||||||||||
| Restricted cash | 39,555 | 37,320 | ||||||||||||
| Cash equivalents included in funds held for clients | 79,413 | 142,162 | ||||||||||||
| Total cash, cash equivalents and restricted cash | $ | 121,008 | $ | 182,231 | ||||||||||
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CBIZ, INC.
SELECT FINANCIAL DATA AND RATIOS (UNAUDITED)
(In thousands)
| September 30, 2022 | December 31, 2021 | |||||||||||||
| Cash and cash equivalents | 2,040 | 1,997 | ||||||||||||
| Restricted cash | 39,555 | 30,383 | ||||||||||||
| Accounts receivable, net | 398,970 | 242,168 | ||||||||||||
| Current assets before funds held for clients | 457,630 | 293,765 | ||||||||||||
| Funds held for clients | 125,451 | 157,909 | ||||||||||||
| Goodwill and other intangible assets, net | 957,186 | 840,783 | ||||||||||||
| Total assets | 1,899,618 | 1,627,934 | ||||||||||||
| Current liabilities before client fund obligations | 330,513 | 265,174 | ||||||||||||
| Client fund obligations | 128,091 | 158,115 | ||||||||||||
| Total long-term debt, net | 268,936 | 154,851 | ||||||||||||
| Total liabilities | 1,125,493 | 923,386 | ||||||||||||
| Treasury stock | (769,981) | (694,716) | ||||||||||||
| Total stockholders' equity | 774,125 | 704,548 | ||||||||||||
| Debt to equity | 34.7 | % | 22.0 | % | ||||||||||
Days sales outstanding (DSO) - continuing operations (1) | 93 | 71 | ||||||||||||
| Shares outstanding | 51,181 | 52,038 | ||||||||||||
| Basic weighted average common shares outstanding | 51,827 | 52,637 | ||||||||||||
| Diluted weighted average common shares outstanding | 52,720 | 53,723 | ||||||||||||
(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 September 30, 2021 was 88.
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NYSE: CBZ ● www.cbiz.com ● Twitter @cbz
CBIZ, INC.
GAAP RECONCILIATION
Income from Continuing Operations to Adjusted EBITDA (1)
(In thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
| Income from continuing operations | $ | 27,474 | $ | 21,695 | $ | 116,865 | $ | 80,524 | ||||||||||||||||||
| Interest expense | 2,305 | 1,016 | 5,209 | 2,852 | ||||||||||||||||||||||
| Income tax expense | 9,131 | 7,512 | 41,074 | 26,100 | ||||||||||||||||||||||
| Gain on sale of operations, net | (176) | — | (311) | (6,385) | ||||||||||||||||||||||
| Gain on sale of assets, net | (2,391) | — | (2,391) | — | ||||||||||||||||||||||
| Legal settlement, net | — | — | — | 30,468 | ||||||||||||||||||||||
Transaction costs related to Marks Paneth (2) | — | — | 1,329 | — | ||||||||||||||||||||||
Integration & retention costs related to Marks Paneth (2) | 1,280 | — | 8,012 | — | ||||||||||||||||||||||
| Depreciation | 2,771 | 2,808 | 8,378 | 8,010 | ||||||||||||||||||||||
| Amortization | 5,471 | 4,237 | 16,329 | 11,911 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 45,865 | $ | 37,268 | $ | 194,494 | $ | 153,480 | ||||||||||||||||||
(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.
(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.
CBIZ, INC.
GAAP RECONCILIATION
Income and Diluted Earnings Per Share (“EPS”) from Continuing Operations to Adjusted Income and EPS(1)
(In thousands, except per share data)
| Three Months Ended September 30, 2022 | Three Months Ended September 30, 2021 | ||||||||||||||||||||||
| Amounts | EPS | Amounts | EPS | ||||||||||||||||||||
| Income from continuing operations | $ | 27,474 | $ | 0.53 | $ | 21,695 | $ | 0.41 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Gain on sale of operations, net | (176) | — | — | — | |||||||||||||||||||
| Gain on sale of assets, net | (2,391) | (0.05) | — | — | |||||||||||||||||||
Integration & retention costs related to Marks Paneth (2) | 1,280 | 0.02 | — | — | |||||||||||||||||||
| Income tax effect related to adjustments | 321 | 0.01 | — | — | |||||||||||||||||||
| Adjusted income from continuing operations | $ | 26,508 | $ | 0.51 | $ | 21,695 | $ | 0.41 | |||||||||||||||
(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.
(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.
Page 11 of 13
NYSE: CBZ ● www.cbiz.com ● Twitter @cbz
| Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | ||||||||||||||||||||||
| Amounts | EPS | Amounts | EPS | ||||||||||||||||||||
| Income from continuing operations | $ | 116,865 | $ | 2.22 | $ | 80,524 | $ | 1.50 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Gain on sale of operations, net | (311) | (0.01) | (6,385) | (0.12) | |||||||||||||||||||
| Gain on sale of assets, net | (2,391) | (0.05) | — | — | |||||||||||||||||||
| Legal settlement, net | — | — | 30,468 | 0.57 | |||||||||||||||||||
Transaction costs related to Marks Paneth (2) | 1,329 | 0.03 | — | — | |||||||||||||||||||
Integration & retention costs related to Marks Paneth (2) | 8,012 | 0.15 | — | — | |||||||||||||||||||
| Income tax effect related to adjustments | (1,727) | (0.03) | (5,896) | (0.11) | |||||||||||||||||||
| Adjusted income from continuing operations | $ | 121,777 | $ | 2.31 | $ | 98,711 | $ | 1.84 | |||||||||||||||
(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.
(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.
Page 12 of 13
NYSE: CBZ ● www.cbiz.com ● Twitter @cbz
CBIZ, INC.
GAAP RECONCILIATION
Full Year 2022 EPS from Continuing Operations Guidance to Full Year 2022 Adjusted Diluted EPS
| Full Year 2022 Guidance | |||||||||||
| Low | High | ||||||||||
| Diluted EPS - GAAP Guidance | $ | 1.96 | $ | 1.99 | |||||||
Transaction and integration costs related to Marks Paneth (1) | 0.16 | 0.16 | |||||||||
| Gain on sale of asset, net | (0.03) | (0.03) | |||||||||
| Adjusted Diluted EPS Guidance | $ | 2.09 | $ | 2.12 | |||||||
| GAAP Diluted EPS for 2021 | $ | 1.32 | $ | 1.32 | |||||||
Adjusted Diluted EPS for 2021 (2) | $ | 1.66 | $ | 1.66 | |||||||
| GAAP Diluted EPS Range | 48 | % | 51 | % | |||||||
| Adjusted Diluted EPS Range | 26 | % | 28 | % | |||||||
(1)Includes estimated transaction and integration costs related to the Marks Paneth acquisition. Such 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.
(2)A reconciliation between income from continuing operations and adjusted income from continuing operations and a reconciliation between GAAP Diluted EPS and Adjusted Diluted EPS for fiscal year ended December 31, 2021 are presented as follows:
| Year Ended December 31, 2021 | |||||||||||
| In thousands | EPS | ||||||||||
| Income from continuing operations | $ | 70,911 | $ | 1.32 | |||||||
| Adjustments: | |||||||||||
| Gain on sale of operations, net | (6,311) | (0.12) | |||||||||
| Legal settlement, net | 30,468 | 0.57 | |||||||||
| Income tax effect related to adjustments | (5,746) | (0.11) | |||||||||
| Adjusted income from continuing operations | $ | 89,322 | $ | 1.66 | |||||||
Page 13 of 13
NYSE: CBZ ● www.cbiz.com ● Twitter @cbz