8-K

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

Date of Report (Date of earliest event reported): July 30, 2020

CBIZ, Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware	001-32961	22-2769024
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
6050 Oak Tree Boulevard, South, Suite 500, Cleveland, Ohio		44131
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (216) 447-9000

Not 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 Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock par value $0.01 per share	CBZ	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

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 July 30, 2020, CBIZ, Inc. (the “Company”) issued a press release announcing its financial results for the three and six months ended June 30, 2020. 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 identifying 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 July 30, 2020, announcing its financial results for the three and six months ended June 30, 2020.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

1

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: August 3, 2020

CBIZ, INC.
By:	/s/ Ware H. Grove
Name:	Ware H. Grove
Title:	Chief Financial Officer

2

EX-99.1

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 SECOND-QUARTER AND FIRST-HALF 2020 RESULTS

SECOND-QUARTER HIGHLIGHTS:

• Total revenue increases 0.6%

• Same-unit revenue down 1.4%

• EPS from continuing operations increases 30.0%

• Adjusted EBITDA increases 24.7%

FIRST-HALF HIGHLIGHTS:

• Total revenue increases 1.8%

• Same-unit revenue down 0.1%

• EPS from continuing operations increases 8.2%

• Adjusted EBITDA increases 7.4%

CLEVELAND (July 30, 2020) – CBIZ, Inc. (NYSE: CBZ) (the “Company”) today announced second-quarter and first-half results for the period ended June 30, 2020.

For the 2020 second quarter, CBIZ recorded revenue of $236.9 million, an increase of $1.4 million, or 0.6%, over the $235.5 million reported in 2019. Same-unit revenue for the quarter decreased by $3.2 million, or 1.4%, compared with the same period a year ago. Revenue from acquisitions, net of divestitures, contributed $4.6 million, or 2.0%, to revenue growth in the second quarter 2020. Income from continuing operations was $21.5 million, or $0.39 per diluted share, in the 2020 second quarter, compared with $16.6 million, or $0.30 per diluted share, for the same period a year ago. Adjusted EBITDA for the second quarter was $35.9 million, compared with $28.8 million for the second quarter of 2019.

For the first half of 2020, CBIZ recorded revenue of $514.4 million, an increase of $8.9 million, or 1.8%, over the $505.5 million recorded for the first half of 2019. Same-unit revenue decreased by $0.9 million, or 0.1%, compared with the same period a year ago. Revenue from acquisitions, net of divestitures, contributed $9.8 million, or 1.9%, to revenue growth in the first six months. Income from continuing operations was

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NYSE: CBZ ● www.cbiz.com ● Twitter @cbz

$58.3 million, or $1.05 per diluted share, in the first half of 2020, compared with $54.2 million, or $0.97 per diluted share, for the same period a year ago. Adjusted EBITDA was $92.9 million, compared with $86.5 million in 2019.

At June 30, 2020, the balance outstanding on the Company’s $400 million credit facility was $120 million. During the second quarter, the Company repaid the full $210 million that, as a precautionary measure to preserve financial flexibility, was borrowed on March 25, 2020, which resulted in a debt balance, net of cash held, of $166.1 million at the end of the first quarter. With $120 million outstanding at June 30, 2020, the unused financing capacity was approximately $270 million.

Jerry Grisko, CBIZ President and Chief Executive Officer, said, “After a strong 2019 and good momentum at the start of the year, the recurring nature of our core essential services served us well throughout the second quarter. We are extremely pleased to report growth in revenue, income from continuing operations, and earnings per share in this exceptionally challenging business environment. We have carefully managed our liquidity and took swift actions to control discretionary expenditures which contributed to our strong financial performance in the second quarter. We also experienced lower CBIZ employee health care benefits costs that contributed about one-half of the increase in earnings per share from $0.30 to $0.39 in the second quarter.”

“I'm enormously proud of how our team is responding to these challenging circumstances. We demonstrated value to our clients in new ways and experienced a tremendous response to our digital outreach and thought leadership as we actively sought to help our clients assess their businesses and access a wide range of relief programs. As we enter the second half of the year, our focus will continue to be the health and safety of our team members, supporting our clients in a challenging economic climate, protecting the liquidity of our business and pursuing acquisitions and other opportunities to invest in the long-term growth of the business,”  concluded Grisko.

Conference CallCBIZ will host a conference call at 11:00 a.m. (ET) today to discuss its results. The call will be webcast live for the media and the public, and can be accessed at www.cbiz.com. Shareholders and analysts who would like to participate in the call can register athttp://dpregister.com/10146606 to receive the dial-in number and unique personal identification number. Participants may register at any time, including up to and after the call start time.

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 1:00 p.m. (ET), July 30, through 5:00 p.m. (ET), August 6, 2020. The toll-free dial-in number for the replay is 1-877-344-7529. If you are listening from outside the United States, dial 1-412-317-0088. The access code for the replay is 10146606.

About CBIZ

CBIZ, Inc. 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 31 states, CBIZ is one of the largest accounting and insurance brokerage providers in the U.S. For more information, visit www.cbiz.com.

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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 JUNE 30, 2020 AND 2019

(In thousands, except percentages and per share data)

	THREE MONTHS ENDED
	JUNE 30,
	2020			%			2019			%
Revenue	$	236,943			100.0	%	$	235,498			100.0	%
Operating expenses (1)		209,016			88.2	%		198,148			84.1	%
Gross margin		27,927			11.8	%		37,350			15.9	%
Corporate general and administrative expenses (1)		11,160			4.7	%		10,566			4.5	%
Operating income		16,767			7.1	%		26,784			11.4	%
Other income (expense):
Interest expense		(2,074	)		-0.9	%		(1,587	)		-0.7	%
Gain on sale of operations, net		57			0.0	%		50			0.0	%
Other income (expense), net (1) (2)		13,336			5.6	%		(3,311	)		-1.4	%
Total other income (expense), net		11,319			4.8	%		(4,848	)		-2.1	%
Income from continuing operations before income tax expense		28,086			11.9	%		21,936			9.3	%
Income tax expense		6,607						5,322
Income from continuing operations		21,479			9.1	%		16,614			7.1	%
Loss from operations of discontinued businesses, net of tax		(11	)					(22	)
Net income	$	21,468			9.1	%	$	16,592			7.0	%
Diluted earnings per share:
Continuing operations	$	0.39					$	0.30
Discontinued operations		-						-
Net income	$	0.39					$	0.30
Diluted weighted average common shares outstanding		55,116						55,495
Other data from continuing operations:
Adjusted EBITDA (3)	$	35,890					$	28,790

(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" ($12.2 million expense in 2020 and $3.0 million income in 2019, or 5.2% and 1.3% of revenue, respectively) and "Corporate general and administrative expenses" ($1.5 million expense in 2020 and $0.3 million income in 2019, respectively, or 0.6% and 0.1% of revenue, respectively) and are directly offset by deferred compensation income or expense in "Other income (expense), net" ($13.7 million income in 2020 and $3.4 million expense in 2019, or 5.8% and 1.4% of revenue, respectively). The deferred compensation plan has no impact on "Income from continuing operations before income tax expense".    

(2) Included in "Other income (expense), net" for the three months ended June 30, 2020 and 2019, is expense of $0.5 million and $0.1 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 nearest generally accepted accounting principles ("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)

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(In thousands, except percentages and per share data)

	SIX MONTHS ENDED
	JUNE 30,
	2020			%			2019			%
Revenue	$	514,398			100.0	%	$	505,496			100.0	%
Operating expenses (1)		408,843			79.5	%		413,644			81.8	%
Gross margin		105,555			20.5	%		91,852			18.2	%
Corporate general and administrative expenses (1)		21,649			4.2	%		22,246			4.4	%
Operating income		83,906			16.3	%		69,606			13.8	%
Other (expense) income:
Interest expense		(3,193	)		-0.6	%		(2,988	)		-0.6	%
Gain on sale of operations, net		152			0.0	%		547			0.1	%
Other (expense) income, net (1) (2)		(2,464	)		-0.5	%		5,949			1.2	%
Total other (expense) income, net		(5,505	)		-1.1	%		3,508			0.7	%
Income from continuing operations before income tax expense		78,401			15.2	%		73,114			14.5	%
Income tax expense		20,060						18,935
Income from continuing operations		58,341			11.3	%		54,179			10.7	%
Loss from operations of discontinued businesses, net of tax		(25	)					(118	)
Net income	$	58,316			11.3	%	$	54,061			10.7	%
Diluted earnings per share:
Continuing operations	$	1.05					$	0.97
Discontinued operations		-						-
Net income	$	1.05					$	0.97
Diluted weighted average common shares outstanding		55,515						55,701
Other data from continuing operations:
Adjusted EBITDA (3)	$	92,933					$	86,531

(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" ($2.6 million income in 2020 and $5.2 million expense in 2019, or 0.5% and 1.0% of revenue, respectively) and "Corporate general and administrative expenses" ($0.3 million income in 2020 and $0.5 million expense in 2019, or 0.1% and 0.1% of revenue for 2020 and 2019, respectively) and are directly offset by deferred compensation income or expense in "Other (expense) income, net" ($2.9 million expense in 2020 and $5.7 million income in 2019, or 0.6% and 1.1% of revenue, respectively). The deferred compensation plan has no impact on "Income from continuing operations before income tax expense".    

(2) Included in "Other (expense) income, net" for the six months ended June 30, 2020 and 2019, is income of $0.2 million and $0.2 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 nearest 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						SIX MONTHS ENDED
	JUNE 30,						JUNE 30,
	2020			2019			2020			2019
Revenue
Financial Services	$	154,083		$	154,373		$	342,860		$	339,517
Benefits and Insurance Services		73,940			72,127			153,552			148,382
National Practices		8,920			8,998			17,986			17,597
Total	$	236,943		$	235,498		$	514,398		$	505,496
Gross Margin
Financial Services	$	26,666		$	26,215		$	76,845		$	76,901
Benefits and Insurance Services		12,657			11,052			27,046			25,936
National Practices		930			794			1,713			1,393
Operating expenses - unallocated (1):
Other		(94	)		(3,719	)		(2,617	)		(7,168	)
Deferred compensation		(12,232	)		3,008			2,568			(5,210	)
Total	$	27,927		$	37,350		$	105,555		$	91,852

(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 include 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 in "Operating expenses" and “Corporate, general and administrative expense,” and offset in "Other income (expense), net".

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CBIZ, INC.

SELECT CASH FLOW DATA

(In thousands)

	SIX MONTHS ENDED
	JUNE 30,
	2020			2019
Net income	$	58,316		$	54,061
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		11,491			10,976
Bad debt expense, net of recoveries		3,234			1,506
Adjustments to contingent earnout liability		(155	)		(193	)
Stock-based compensation expense		4,280			3,399
Other noncash adjustments		(312	)		72
Net income, after adjustments to reconcile net income to net cash provided by operating activities		76,854			69,821
Changes in assets and liabilities, net of acquisitions and divestitures		(21,286	)		(50,122	)
Operating cash flows provided by continuing operations		55,568			19,699
Operating cash used in discontinued operations		(45	)		(119	)
Net cash provided by operating activities		55,523			19,580
Net cash provided by (used in) investing activities		12,807			(10,879	)
Net cash used in financing activities		(70,560	)		(42,076	)
Net decrease in cash, cash equivalents and restricted cash	$	(2,230	)	$	(33,375	)
Cash, cash equivalents and restricted cash at beginning of year		146,505			130,554
Cash, cash equivalents and restricted cash at end of year	$	144,275		$	97,179
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheet:
Cash and cash equivalents	$	9,620		$	2,628
Restricted Cash		42,411			30,126
Cash equivalents included in funds held for clients		92,244			64,425
Total cash, cash equivalents and restricted cash	$	144,275		$	97,179

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CBIZ, INC.

SELECT FINANCIAL DATA AND RATIOS

(In thousands)

	JUNE 30,			DECEMBER 31,
	2020			2019
Cash and cash equivalents	$	9,620		$	567
Restricted cash		42,411			29,595
Accounts receivable, net		267,198			222,031
Current assets before funds held for clients		341,701			276,518
Funds held for clients		130,473			179,502
Goodwill and other intangible assets, net		661,180			654,671
Total assets	$	1,427,608		$	1,400,774
Current liabilities before client fund obligations	$	203,357		$	186,906
Client fund obligations		129,942			179,020
Total long-term debt		119,013			104,333
Total liabilities	$	732,388		$	741,536
Treasury stock	$	(566,762	)	$	(535,693	)
Total stockholders' equity	$	695,220		$	659,238
Debt to equity		17.3	%		16.0	%
Days sales outstanding (DSO) - continuing operations (1)		87			75
Shares outstanding		54,655			55,419
Basic weighted average common shares outstanding		54,356			54,299
Diluted weighted average common shares outstanding		55,515			55,895

(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 at June 30, 2019 was 90.

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CBIZ, INC.

GAAP RECONCILIATION

Income from Continuing Operations to Non-GAAP Financial Measures (1)

(In thousands)

	THREE MONTHS ENDED						SIX MONTHS ENDED
	JUNE 30,						JUNE 30,
	2020			2019			2020			2019
Income from continuing operations	$	21,479		$	16,614		$	58,341		$	54,179
Interest expense		2,074			1,587			3,193			2,988
Income tax expense		6,607			5,322			20,060			18,935
Gain on sale of operations, net		(57	)		(50	)		(152	)		(547	)
Depreciation		2,357			1,859			4,640			4,017
Amortization		3,430			3,458			6,851			6,959
Adjusted EBITDA	$	35,890		$	28,790		$	92,933		$	86,531

(1) CBIZ reports its financial results in accordance with GAAP. This table reconciles Non-GAAP financial measures to the nearest 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 or cash flow under GAAP. Adjusted EBITDA is commonly used by the Company, its shareholders and debt holders to evaluate, assess and benchmark the Company's operational results and to provide an additional measure with respect to the Company's ability to meet future debt obligations.

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XML

Document and Entity Information	Jul. 30, 2020
Cover [Abstract]
Entity Registrant Name	CBIZ, Inc.
Document Type	8-K
Amendment Flag	false
Entity Central Index Key	0000944148
Document Period End Date	Jul. 30, 2020
Entity Emerging Growth Company	false
Entity File Number	001-32961
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	22-2769024
Entity Address, Address Line One	6050 Oak Tree Boulevard
Entity Address, Address Line Two	South
Entity Address, Address Line Three	Suite
Entity Address, City or Town	Cleveland
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	44131
City Area Code	216
Local Phone Number	447-9000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Security 12b Title	Common Stock par value $0.01 per share
Trading Symbol	CBZ
Security Exchange Name	NYSE