EX-99.1 3 l18624aexv99w1.htm EX-99.1 PRESS RELEASE EX-99.1
 

Exhibit 99.1
(logo)   (release)
         
FOR IMMEDIATE RELEASE
  CONTACT:   Ware Grove
 
      Chief Financial Officer
 
      -or-
 
      Lori Novickis
 
      Director, Corporate Relations
 
      CBIZ, Inc.
 
      Cleveland, Ohio
 
      (216) 447-9000
CBIZ REPORTS FULL-YEAR 2005 RESULTS; RECORDS $0.28 PER DILUTED SHARE
FULL-YEAR REVENUE GROWS 10.8%; SAME-UNIT REVENUE GROWS 6.2%
Cleveland, Ohio (February 14, 2006)—CBIZ, Inc. (NASDAQ: CBIZ) today announced fourth-quarter and full-year results for the year ended December 31, 2005.
CBIZ reported revenue of $132.1 million for the fourth quarter ended December 31, 2005, an increase of $12.2 million over $119.9 million reported for the fourth quarter of 2004. Same-unit revenue for the quarter increased by 5.8%, or $7.0 million. Revenue from newly acquired businesses contributed $5.2 million to revenue growth in the fourth quarter of 2005. The Company reported net income from continuing operations of $3.7 million, or $0.05 per diluted share, compared with $3.2 million reported for the fourth quarter a year ago, or $0.04 per diluted share.
For the year ended December 31, 2005, CBIZ reported revenue of $559.3 million, an increase of 10.8%, or $54.4 million, compared with $504.9 million for 2004. Same-unit revenue for the year increased by 6.2%, or $31.3 million. Newly acquired operations increased revenue by $23.7 million, while operations divested since a year ago resulted in a revenue decline of $0.6 million. Net income from continuing operations for 2005 was $21.6 million, or $0.28 per diluted share, compared to $21.3 million, or $0.26 per diluted share for 2004.
Fourth-quarter and full-year results for 2004 have been restated to reflect the impact of discontinued operations. Additionally, as previously disclosed, the 2004 results include a tax benefit related to a favorable determination of an IRS audit of prior year tax returns, which increased diluted earnings per share from continuing operations by $0.05 for the fourth quarter and full year in 2004.
As of December 31, 2005, the amount outstanding on bank debt was $32.2 million, compared to $53.9 million for the year ended 2004. During 2005, through open market transactions, CBIZ purchased a total of 3.8 million shares of its common stock at a total cost of $16.7 million. The Company also completed three acquisitions during 2005, and has announced two additional acquisitions in January 2006.
CBIZ was recently authorized by its Board of Directors to repurchase up to five million additional shares of its common stock through March 31, 2007. Also, on February 13, 2006, the Company established a new $100 million unsecured credit facility, which replaced an existing $100 million secured credit facility. The new facility provides for lower borrowing costs, and will allow greater flexibility for the Company’s acquisition and share repurchase activities.
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6050 Oak Tree Boulevard, South · Suite 500 · Cleveland, OH 44131 · Phone (216) 447-9000 · Fax (216) 447-9007

 

 

“We are very pleased to continue the positive momentum in our operating and cross-serving results. We have now reported the tenth consecutive quarter of same-unit growth and all business units grew in 2005,” stated Steven Gerard, Chairman and Chief Executive Officer. “We continue to generate strong positive cash flow, and the strength of our balance sheet will easily support our continued growth, our anticipated future acquisition activity, and potential share repurchases as we enter 2006,” continued Mr. Gerard.
Outlook for 2006
In 2006, CBIZ expects to achieve revenue growth in a range of 8% to 10%, and expects to continue to improve earnings per share from continuing operations by 20% to 25% over the $0.28 per diluted share recorded for 2005. Cash flow is expected to remain strong, and CBIZ expects EBITDA to be approximately $60 — $62 million in 2006.
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 www.cbiz.com. Shareholders and analysts wishing to participate in the conference call may dial 1-888-545-0687 several minutes before 11:00 a.m. (ET). If you are dialing from outside the United States, dial 1-630-691-2764. A replay of the call will be available starting at 1:00 p.m. (ET) February 14 through midnight (ET), February 17, 2006. 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 13691343. A replay of the webcast will also be available on the Company’s web site at www.cbiz.com.
CBIZ is a provider of professional business services to companies throughout the United States. As the largest benefits specialist, one of the top accounting, valuation and medical practice management companies in the United States, CBIZ provides integrated services in the following areas: accounting and tax; employee benefits; wealth management; property and casualty insurance; payroll; IS consulting; and HR consulting. CBIZ also provides internal audit; Sarbanes-Oxley section 404 compliance; valuation; litigation advisory; government relations; commercial real estate advisory; wholesale life and group insurance; healthcare consulting; medical practice management; and capital advisory services. These services are provided throughout a network of more than 140 Company offices in 34 states and the District of Columbia.
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.
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6050 Oak Tree Boulevard, South · Suite 500 · Cleveland, OH 44131 · Phone (216) 447-9000 · Fax (216) 447-9007

 

 

CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, 2005 AND 2004
(In thousands, except percentages and per share data)
                                 
    THREE MONTHS ENDED  
    DECEMBER 31,  
    2005     %     2004(1)     %  
                                 
Revenue
   $ 132,101       100.0 %   $ 119,884       100.0 %
Operating expenses
     119,321       90.3 %     111,737       93.2 %
 
                        
Gross margin
     12,780       9.7 %     8,147       6.8 %
 
                                
Corporate general and administrative expense
     4,677       3.6 %     6,342       5.3 %
Depreciation and amortization expense
     3,709       2.8 %     4,088       3.4 %
 
                        
Operating income (loss)
     4,394       3.3 %     (2,283 )     -1.9 %
 
                                
Other income (expense):
                                
Interest expense
     (696 )     -0.5 %     (469 )     -0.4 %
Gain on sale of operations, net
     285       0.2 %     —       0.0 %
Other income, net
     2,216       1.7 %     2,185       1.8 %
 
                        
Total other income, net
     1,805       1.4 %     1,716       1.4 %
 
                                
Income (loss) from continuing operations before income tax expense
     6,199       4.7 %     (567 )     -0.5 %
 
                                
Income tax expense (benefit)
     2,450               (3,801 )        
 
                        
Income from continuing operations
     3,749       2.8 %     3,234       2.7 %
 
                                
Loss from operations of discontinued businesses, net of tax
     (1,431 )             (1,396 )        
Gain (loss) on disposal of discontinued operations, net of tax
     2,857               (106 )        
 
                        
Net income
   $ 5,175       3.9 %   $ 1,732       1.4 %
 
                            
 
                                
Diluted earnings (loss) per share:
                                
Continuing operations
   $ 0.05             $ 0.04          
Discontinued operations
     0.02               (0.02 )        
 
                            
Net income
   $ 0.07             $ 0.02          
 
                            
Diluted shares outstanding
     75,947               78,449          
 
                                
Other data from continuing operations:
                                
EBIT(2)
   $ 6,610             $ (98 )        
EBITDA(2)
   $ 10,319             $ 3,990          
 
(1)   Certain amounts in the 2004 financial data have been reclassified to conform to the current year presentation.
 
(2)   EBIT represents income from continuing operations before income taxes, interest expense, and gain on the sale of operations. EBITDA represents EBIT as defined above before depreciation and amortization expense. 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 (GAAP).
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6050 Oak Tree Boulevard, South · Suite 500 · Cleveland, OH 44131 · Phone (216) 447-9000 · Fax (216) 447-9007

 

 

CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
TWELVE MONTHS ENDED DECEMBER 31, 2005 AND 2004
(In thousands, except percentages and per share data)
                                 
    TWELVE MONTHS ENDED  
    DECEMBER 31,  
    2005     %     2004(1)     %  
Revenue
   $ 559,269       100.0 %   $ 504,898       100.0 %
Operating expenses
     485,295       86.8 %     438,417       86.8 %
 
                        
Gross margin
     73,974       13.2 %     66,481       13.2 %
 
                                
Corporate general and administrative expense
     24,911       4.4 %     24,099       4.8 %
Depreciation and amortization expense
     15,163       2.7 %     16,010       3.2 %
 
                        
Operating income
     33,900       6.1 %     26,372       5.2 %
 
                                
Other income (expense):
                                
Interest expense
     (3,109 )     -0.6 %     (1,507 )     -0.2 %
Gain on sale of operations, net
     314       0.1 %     996       0.2 %
Other income, net
     5,052       0.9 %     3,532       0.6 %
 
                        
Total other income, net
     2,257       0.4 %     3,021       0.6 %
 
                                
Income from continuing operations before income tax expense
     36,157       6.5 %     29,393       5.8 %
 
                                
Income tax expense
     14,571               8,045          
 
                        
Income from continuing operations
     21,586       3.9 %     21,348       4.2 %
 
                                
Loss from operations of discontinued businesses, net of tax
     (6,463 )             (5,429 )        
Gain on disposal of discontinued operations, net of tax
     3,550               132          
 
                        
Net income
   $ 18,673       3.3 %   $ 16,051       3.2 %
 
                              
 
                                
Diluted earnings (loss) per share:
                                
Continuing operations
   $ 0.28             $ 0.26          
Discontinued operations
     (0.04 )             (0.06 )        
 
                            
Net income
   $ 0.24             $ 0.20          
 
                            
Diluted shares outstanding
     76,827               81,477          
 
                                
Other data from continuing operations:
                                
EBIT(2)
   $ 38,952             $ 29,904          
EBITDA(2)
   $ 54,115             $ 45,914          
 
(1)   Certain amounts in the 2004 financial data have been reclassified to conform to the current year presentation.
 
(2)   EBIT represents income from continuing operations before income taxes, interest expense, and gain on the sale of operations. EBITDA represents EBIT as defined above before depreciation and amortization expense. 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 (GAAP).
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6050 Oak Tree Boulevard, South · Suite 500 · Cleveland, OH 44131 · Phone (216) 447-9000 · Fax (216) 447-9007

 

 

CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2005 AND 2004
(In thousands, except percentages and per share data)
                                 
    THREE MONTHS ENDED     TWELVE MONTHS ENDED  
    DECEMBER 31,     DECEMBER 31,  
    2005     2004(3)     2005     2004(3)  
Revenue
                                
Accounting, Tax & Advisory Services
   $ 52,451     $ 45,920     $ 245,549     $ 212,010  
Benefits & Insurance Services
     36,741       34,262       146,216       141,258  
National Practices — Other
     17,970       16,762       69,921       64,369  
Medical Practice Management
     24,939       22,940       97,583       87,261  
Total
   $ 132,101     $ 119,884     $ 559,269     $ 504,898  
 
                                
Gross margin
                                
Accounting, Tax & Advisory Services
   $ 1,816     $ (429 )   $ 37,233     $ 29,446  
Benefits & Insurance Services
     8,175       6,101       30,067       28,271  
National Practices — Other
     3,101       1,561       8,952       7,161  
Medical Practice Management
     4,276       4,195       17,550       15,376  
Total(1)
   $ 12,780     $ 8,147     $ 73,974     $ 66,481  
SELECT BALANCE SHEET DATA AND RATIOS
                 
    DECEMBER 31,     DECEMBER 31,  
    2005     2004(3)  
Cash and cash equivalents
   $ 8,909     $ 5,291  
Restricted cash
   $ 9,873     $ 10,089  
Accounts receivable, net
   $ 99,185     $ 99,021  
Current assets before funds held for clients
   $ 143,484     $ 152,936  
Funds held for clients
   $ 65,669     $ 32,787  
Goodwill and other intangible assets, net
   $ 185,535     $ 172,644  
 
                
Total assets
   $ 454,802     $ 414,115  
 
                                
Current liabilities before client fund obligations
   $ 87,983     $ 73,655  
Client fund obligations
   $ 65,669     $ 32,787  
Bank debt
   $ 32,200     $ 53,900  
 
                
Total liabilities
   $ 200,141     $ 167,618  
 
                
Treasury stock
   $ (102,317 )   $ (85,650 )
 
                
Total stockholders’ equity
   $ 254,661     $ 246,497  
 
                
Bank debt to equity
     12.6 %     21.9 %
Days sales outstanding(2)
     67       73  
 
                
Shares outstanding
     73,822       75,651  
 
            
Basic shares outstanding
     74,448       79,217  
 
            
Diluted shares outstanding
     76,827       81,477  
 
            
 
(1)   Includes operating expenses recorded by corporate and not directly allocated to the business units of $4,588 and $3,281 for the three months ended December 31, 2005 and 2004, and $19,828 and $13,773 for the twelve months ended December 31, 2005 and 2004, respectively.
 
(2)   Days sales outstanding (DSO) is provided for continuing operations and represent accounts receivable (before the allowance for doubtful accounts) and unbilled revenue (net of realization adjustments) at the end of the period, divided by daily revenue. The Company has included DSO data because such data is commonly used as a performance measure by analysts and investors and as a measure of the Company’s ability to collect on receivables in a timely manner. DSO should not be regarded as an alternative or replacement to any measurement of performance under generally accepted accounting principles (GAAP).
 
(3)   Certain amounts in the 2004 financial data have been reclassified to conform to the current year presentation.
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6050 Oak Tree Boulevard, South · Suite 500 · Cleveland, OH 44131 · Phone (216) 447-9000 · Fax (216) 447-9007