EX-99.1 2 l32404aexv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
     
(CBIZ LOGO)
  (PRESS 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 SECOND-QUARTER AND FIRST-HALF 2008 RESULTS
SECOND-QUARTER REVENUE UP 12.2%; EPS FROM CONTINUING OPERATIONS UP 20%
FIRST-HALF REVENUE GROWS 11.3%; EPS FROM CONTINUING OPERATIONS UP 22%
Cleveland, Ohio (July 31, 2008)—CBIZ, Inc. (NYSE: CBZ) today announced second-quarter and first-half results for the period ended June 30, 2008.
CBIZ reported revenue of $175.7 million for the second quarter ended June 30, 2008, an increase of 12.2% over the $156.7 million reported for the second quarter of 2007. Same-unit revenue increased by 5.8%, or by $9.0 million. Revenue from newly acquired operations contributed $10.0 million to revenue growth in the second quarter. CBIZ reported net income from continuing operations for the second quarter of 2008 of $7.5 million, or $0.12 per diluted share, compared with $6.5 million, or $0.10 per diluted share in the second quarter of 2007.
During the first half of 2008, CBIZ repurchased approximately 3.8 million shares of its common stock and since June 30, the Company has repurchased approximately 550,000 additional shares at a total cost of approximately $37.4 million to date. At June 30, 2008, the outstanding balance of the Company’s $150 million unsecured credit facility was at $60 million.
For the six-month period ended June 30, 2008, CBIZ reported revenue of $373.1 million, an increase of 11.3%, or $38.0 million over the $335.1 million reported for the comparable six-month period a year ago. Same-unit revenue increased by 5.4%, or $17.9 million, for the first six months of 2008 compared to the same period a year ago. Acquisitions, net of divestitures, contributed $20.1 million to revenue growth for the first half of 2008. Net income from continuing operations was $24.7 million for the first six months of 2008, or $0.39 per diluted share, compared with $21.3 million for the first six months of 2007, or $0.32 per diluted share.
“The second quarter of 2008 represents the twentieth consecutive quarter of same-unit revenue growth for CBIZ,” stated Steven L. Gerard, Chairman and CEO. “In this economic environment we are very pleased to record continued strong growth in revenues and earnings through the first six months of this year. We completed three acquisitions in the first half of 2008 and we continue to work on a full pipeline of potential additional acquisitions. Cash flow continues to be strong and we are on track to achieve our goals for

 

 

2008 which include revenue growth of 10% and growth in earnings per share of at least 20% for the full year 2008 compared with 2007,” concluded Mr. Gerard.
CBIZ will host a conference call later this morning to discuss its results. The call will be webcast in a listen-only mode over the Internet for the media and the public, and can be accessed at www.cbiz.com. Shareholders and analysts wishing to participate in the conference call may dial 1-800-640-9765 several minutes before 11:00 a.m. (ET). If you are dialing from outside the United States, dial 1-847-413-4837. A replay of the call will be available starting at 1:00 p.m. (ET) July 31 through midnight (ET), August 4, 2008. 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 22198855. A replay of the webcast will also be available on the Company’s web site at www.cbiz.com.
CBIZ, Inc. provides professional business services that help clients better manage their finances, employees and technology. As the largest benefits specialist, one of the largest accounting, valuation and medical practice management companies in the United States, CBIZ provides its clients with financial services which include accounting and tax, internal audit, merger and acquisition advisory, and valuation. Employee services include group benefits, property and casualty insurance, payroll, HR consulting and wealth management. CBIZ also provides information technology, hardware and software solutions, healthcare consulting and medical practice management. These services are provided throughout a network of more than 140 Company offices in 34 states.
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include, but are not limited to, the Company’s ability to adequately manage its growth; the Company’s dependence on the current trend of outsourcing business services; the Company’s dependence on the services of its CEO and other key employees; competitive pricing pressures; general business and economic conditions; and changes in governmental regulation and tax laws affecting its insurance business or its business services operations. A more detailed description of such risks and uncertainties may be found in the Company’s filings with the Securities and Exchange Commission.
6050 Oak Tree Boulevard, South • Suite 500 • Cleveland, OH 44131 • Phone (216) 447-9000 • Fax (216) 447-9007

Page 2 of 5

 

CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 2008 AND 2007
(In thousands, except percentages and per share data)
                                 
    THREE MONTHS ENDED  
    JUNE 30,  
    2008     %     2007 (1)     %  
Revenue
  $ 175,734       100.0 %   $ 156,658       100.0 %
 
                                
Operating expenses
    154,883       88.1 %     138,259       88.3 %
 
                        
Gross margin
    20,851       11.9 %     18,399       11.7 %
 
                                
Corporate general and administrative expense
    7,791       4.5 %     7,408       4.7 %
 
                        
Operating income
     13,060       7.4 %     10,991       7.0 %
 
                                
Other income (expense):
                                
Interest expense
    (1,888 )     -1.1 %     (1,694 )     -1.1 %
Gain on sale of operations, net
    221       0.2 %     10       0.0 %
Other income, net (2)
     335       0.2 %     1,988       1.3 %
 
                        
Total other income (expense), net
     (1,332 )     -0.7 %     304       0.2 %
 
                                
Income from continuing operations before income tax expense
     11,728       6.7 %     11,295       7.2 %
 
                                
Income tax expense
    4,255               4,792          
 
                        
Income from continuing operations
    7,473       4.3 %     6,503       4.2 %
 
                                
Loss from operations of discontinued businesses, net of tax
    (196 )             (556 )        
Gain on disposal of discontinued businesses, net of tax
    9               3,883          
 
                        
Net income
  $ 7,286       4.1 %   $ 9,830       6.3 %
 
                            
 
                                
Diluted earnings per share:
                                
Continuing operations
  $ 0.12             $ 0.10          
Discontinued operations
    —               0.05          
 
                            
Net income
   $ 0.12             $ 0.15          
 
                            
 
                                
Diluted weighted average common shares outstanding
     62,440               66,459          
 
Other data from continuing operations:
                                
EBIT (3)
   $ 13,395             $ 12,979          
EBITDA (3)
   $ 17,193             $ 16,393          
 
(1)   Certain amounts in the 2007 financial data have been reclassified to conform to the current year presentation.
 
(2)   Includes a net loss of $131 and a net gain of $1,201 attributable to assets held in the Company’s deferred compensation plan for the three months ended June 30, 2008 and 2007, respectively. These net gains do not impact the Company’s “income from continuing operations before income tax expense” as they are directly offset by compensation to the Plan participants. Compensation is included in “operating expenses” and“corporate general and administrative expense.”
 
(3)   EBIT represents income from continuing operations before income taxes, interest expense and the gain on the sale of operations, net. EBITDA represents EBIT before depreciation and amortization expense of $3,798 and $3,414 for the three months ended June 30, 2008 and 2007, respectively. The Company has included EBIT and EBITDA data because such data is commonly used as a performance measure by analysts and investors and as a measure of the Company’s ability to service debt. EBIT and EBITDA should not be regarded as an alternative or replacement to any measurement of performance under generally accepted accounting principles.
6050 Oak Tree Boulevard, South • Suite 500 • Cleveland, OH 44131 • Phone (216) 447-9000 • Fax (216) 447-9007

Page 3 of 5

 

CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2008 AND 2007
(In thousands, except percentages and per share data)
                                 
    SIX MONTHS ENDED  
    JUNE 30,  
    2008     %     2007 (1)     %  
Revenue
  $ 373,086       100.0 %   $ 335,102       100.0 %
 
                                
Operating expenses
    313,213       84.0 %     282,297       84.2 %
 
                        
Gross margin
    59,873       16.0 %     52,805       15.8 %
 
                                
Corporate general and administrative expense
    15,043       4.0 %     16,090       4.8 %
 
                        
Operating income
    44,830       12.0 %     36,715       11.0 %
 
                                
Other income (expense):
                                
Interest expense
    (3,605 )     -1.0 %     (2,966 )     -0.9 %
Gain on sale of operations, net
    241       0.1 %     105       0.0 %
Other income (expense), net (2)
     (1,012 )     -0.3 %     2,595       0.8 %
 
                        
Total other expense, net
     (4,376 )     -1.2 %     (266 )     -0.1 %
 
                                
Income from continuing operations before income tax expense
     40,454       10.8 %     36,449       10.9 %
 
                                
Income tax expense
    15,753               15,100          
 
                        
Income from continuing operations
    24,701       6.6 %     21,349       6.4 %
 
                                
Loss from operations of discontinued businesses, net of tax
    (194 )             (945 )        
(Loss) gain on disposal of discontinued businesses, net of tax
    (440 )             3,690          
 
                        
Net income
  $ 24,067       6.5 %   $ 24,094       7.2 %
 
                            
 
                                
Diluted earnings (loss) per share:
                                
Continuing operations
  $ 0.39             $ 0.32          
Discontinued operations
    (0.01 )             0.04          
 
                            
Net income
   $ 0.38             $ 0.36          
 
                            
 
                                
Diluted weighted average common shares outstanding
     63,320               67,236          
 
                                
Other data from continuing operations:
                                
EBIT (3)
   $ 43,818             $ 39,310          
EBITDA (3)
   $ 51,433             $ 46,096          
 
(1)   Certain amounts in the 2007 financial data have been reclassified to conform to the current year presentation.
 
(2)   Includes a net loss of $1,919 and a net gain of $1,513 attributable to assets held in the Company’s deferred compensation plan for the six months ended June 30, 2008 and 2007, respectively. These net gains and losses do not impact the Company’s “income from continuing operations before income tax expense” as they are directly offset by compensation to the Plan participants. Compensation is included in “operating expenses” and “corporate general and administrative expense.”
 
(3)   EBIT represents income from continuing operations before income taxes, interest expense and gain on the sale of operations, net. EBITDA represents EBIT before depreciation and amortization expense of $7,615 and $6,786 for the six months ended June 30, 2008 and 2007, respectively. The Company has included EBIT and EBITDA data because such data is commonly used as a performance measure by analysts and investors and as a measure of the Company’s ability to service debt. EBIT and EBITDA should not be regarded as an alternative or replacement to any measurement of performance under generally accepted accounting principles.
6050 Oak Tree Boulevard, South • Suite 500 • Cleveland, OH 44131 • Phone (216) 447-9000 • Fax (216) 447-9007

Page 4 of 5

 

CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE AND SIX MONTHS ENDED JUNE 30, 2008 AND 2007
(In thousands, except percentages and ratios)
                                 
    THREE MONTHS ENDED     SIX MONTHS ENDED  
    JUNE 30,     JUNE 30,  
    2008     2007 (1)     2008     2007 (1)  
Revenue
                                
Financial Services
   $ 74,955     $ 69,112     $ 173,760     $ 161,144  
Employee Services
     47,307       42,837       94,562       87,874  
Medical Management Professionals
     41,899       32,116       82,665       61,724  
National Practices
    11,573       12,593       22,099       24,360  
 
                        
Total
   $ 175,734     $ 156,658     $ 373,086     $ 335,102  
 
                        
 
                                
Gross margin
                                
Financial Services
   $ 9,517     $ 9,298     $ 37,610     $ 35,549  
Employee Services
     8,505       8,063       17,319       17,868  
Medical Management Professionals
     5,581       4,521       10,255       7,463  
National Practices
    773       1,618       920       2,437  
Operating expenses — unallocated (2)
    (3,525 )     (5,101 )     (6,231 )     (10,512 )
 
                        
Total
   $ 20,851     $ 18,399     $ 59,873     $ 52,805  
 
                        
SELECT BALANCE SHEET DATA AND RATIOS
                 
    JUNE 30,     DECEMBER 31,  
    2008     2007 (1)  
Cash and cash equivalents
   $ 11,622     $ 12,144  
Restricted cash
   $ 18,331     $ 15,402  
Accounts receivable, net
   $ 132,699     $ 115,333  
Current assets before funds held for clients
   $ 182,409     $ 161,681  
Funds held for clients — current and non-current
   $ 75,087     $ 88,048  
Goodwill and other intangible assets, net
   $ 281,721     $ 268,388  
 
                
Total assets
   $ 599,582     $ 577,992  
 
                
Current liabilities before client fund obligations
   $ 100,296     $ 95,922  
Client fund obligations
   $ 76,700     $ 88,048  
Convertible notes
   $ 100,000     $ 100,000  
Bank debt
   $ 60,000     $ 30,000  
 
                
Total liabilities
   $ 375,724     $ 351,546  
 
                
Treasury stock
   $ (248,244 )   $ (214,883 )
 
                
Total stockholders’ equity
   $ 223,858     $ 226,446  
 
                
Debt to equity (3)
     71.5 %     57.4 %
Days sales outstanding from continuing operations (4)
     69       64  
 
                
Shares outstanding
    62,223       64,637  
 
            
Basic weighted average common shares outstanding
    62,544       65,061  
 
            
Diluted weighted average common shares outstanding
    63,320       66,356  
 
            
 
(1)   Certain amounts in the 2007 financial data have been reclassified to conform to the current year presentation.
 
(2)   Represents operating expenses not directly allocated to individual business units including incentive compensation, gains or losses attributable to assets held in the Company’s deferred compensation plan, stock based compensation, and certain advertising expenses.
 
(3)   Ratio is convertible notes and bank debt divided by total equity.
 
(4)   DSO is provided for continuing operations and represents accounts receivable (before the allowance for doubtful accounts) and unbilled revenue (net of realization adjustments) at the end of the period, divided by trailing twelve month daily revenue. The Company has included DSO data because such data is commonly used as a performance measure by analysts and investors and as a measure of the Company’s ability to collect on receivables in a timely manner. DSO should not be regarded as an alternative or replacement to any measurement of performance under generally accepted accounting principles. DSO at June 30, 2007 was 72 days.
6050 Oak Tree Boulevard, South • Suite 500 • Cleveland, OH 44131 • Phone (216) 447-9000 • Fax (216) 447-9007

Page 5 of 5