QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Class of Common Stock | Outstanding at July 24, 2023 | ||||
Common Stock, par value $0.01 per share |
Page | |||||||||||
June 30, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable, net | |||||||||||
Other current assets | |||||||||||
Current assets before funds held for clients | |||||||||||
Funds held for clients | |||||||||||
Total current assets | |||||||||||
Non-current assets: | |||||||||||
Property and equipment, net | |||||||||||
Goodwill and other intangible assets, net | |||||||||||
Assets of deferred compensation plan | |||||||||||
Right-of-use assets, net | |||||||||||
Other non-current assets | |||||||||||
Total non-current assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Income taxes payable | |||||||||||
Accrued personnel costs | |||||||||||
Contingent purchase price liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Other current liabilities | |||||||||||
Current liabilities before client fund obligations | |||||||||||
Client fund obligations | |||||||||||
Total current liabilities | |||||||||||
Non-current liabilities: | |||||||||||
Bank debt | |||||||||||
Debt issuance costs | ( | ( | |||||||||
Total long-term debt, net | |||||||||||
Income taxes payable | |||||||||||
Deferred income taxes, net | |||||||||||
Deferred compensation plan obligations | |||||||||||
Contingent purchase price liabilities | |||||||||||
Lease liabilities | |||||||||||
Other non-current liabilities | |||||||||||
Total non-current liabilities | |||||||||||
Total liabilities | |||||||||||
STOCKHOLDERS' EQUITY | |||||||||||
Common stock | |||||||||||
Additional paid in capital | |||||||||||
Retained earnings | |||||||||||
Treasury stock | ( | ( | |||||||||
Accumulated other comprehensive income | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Gross margin | |||||||||||||||||||||||
Corporate general and administrative expenses | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Other (expense) income: | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Gain on sale of operations, net | |||||||||||||||||||||||
Other income (expense), net | ( | ( | |||||||||||||||||||||
Total other (expense) income, net | ( | ( | ( | ||||||||||||||||||||
Income before income tax expense | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net Income | |||||||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Basic weighted average shares outstanding | |||||||||||||||||||||||
Diluted weighted average shares outstanding | |||||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
Issued Common Shares | Treasury Shares | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income | Totals | |||||||||||||||||||||||||||||||||||||||||||
March 31, 2023 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Share repurchases | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Restricted stock units and awards | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Stock options exercised | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Business acquisitions | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Excise tax on share repurchases | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
June 30, 2023 | $ | $ | $ | $ | ( | $ | $ |
Issued Common Shares | Treasury Shares | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income | Totals | |||||||||||||||||||||||||||||||||||||||||||
March 31, 2022 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Share repurchases | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Indirect repurchase of shares for minimum tax withholding | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Restricted stock units and awards | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Stock options exercised | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
June 30, 2022 | $ | $ | $ | $ | ( | $ | $ |
Issued Common Shares | Treasury Shares | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income | Totals | |||||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Share repurchases | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Indirect repurchase of shares for minimum tax withholding | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Restricted stock units and awards | — | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Performance share units | — | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Business acquisitions | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Excise tax on share repurchases | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
June 30, 2023 | $ | $ | $ | $ | ( | $ | $ |
Issued Common Shares | Treasury Shares | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive (Loss) Income | Totals | |||||||||||||||||||||||||||||||||||||||||||
December 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Share repurchases | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Indirect repurchase of shares for minimum tax withholding | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Restricted stock units and awards | — | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Performance share units | — | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Business acquisitions | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
June 30, 2022 | $ | $ | $ | $ | ( | $ | $ |
Six Months Ended June 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization expense | |||||||||||
Gain on sale of operations, net | ( | ( | |||||||||
Bad debt expense, net of recoveries | |||||||||||
Adjustment to contingent earnout liability | |||||||||||
Stock-based compensation expense | |||||||||||
Deferred income taxes | |||||||||||
Other, net | |||||||||||
Changes in assets and liabilities, net of acquisitions and divestitures: | |||||||||||
Accounts receivable, net | ( | ( | |||||||||
Other assets | ( | ( | |||||||||
Accounts payable | |||||||||||
Income taxes payable | |||||||||||
Accrued personnel costs | ( | ( | |||||||||
Other liabilities | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Business acquisitions and purchases of client lists, net of cash acquired | ( | ( | |||||||||
Purchases of client fund investments | ( | ||||||||||
Proceeds from the sales and maturities of client fund investments | |||||||||||
Proceeds from sales of divested operations | |||||||||||
Change in funds held for clients | ( | ||||||||||
Additions to property and equipment | ( | ( | |||||||||
Other, net | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from bank debt | |||||||||||
Payment of bank debt | ( | ( | |||||||||
Payment for acquisition of treasury stock | ( | ( | |||||||||
Indirect repurchase of shares for minimum tax withholding | ( | ( | |||||||||
Changes in client funds obligations | ( | ||||||||||
Proceeds from exercise of stock options | |||||||||||
Payment of contingent consideration for acquisitions and client lists | ( | ( | |||||||||
Other, net | ( | ||||||||||
Net cash provided by financing activities | |||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | ( | ||||||||||
Cash, cash equivalents and restricted cash at beginning of year | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Cash equivalents included in funds held for clients | |||||||||||
Total cash, cash equivalents and restricted cash | $ | $ |
June 30, 2023 | December 31, 2022 | ||||||||||
Trade accounts receivable | $ | $ | |||||||||
Unbilled revenue, at net realizable value | |||||||||||
Total accounts receivable | |||||||||||
Allowance for doubtful accounts | ( | ( | |||||||||
Accounts receivable, net | $ | $ |
June 30, 2023 | December 31, 2022 | ||||||||||
Balance at beginning of period | $ | ( | $ | ( | |||||||
Provision | ( | ( | |||||||||
Charge-offs, net of recoveries | |||||||||||
Allowance for doubtful accounts | $ | ( | $ | ( |
Six Months Ended June 30, | |||||||||||
2023 | 2022 | ||||||||||
Weighted average rates | |||||||||||
Range of effective rates |
Three Months Ended June 30, | |||||||||||
2023 | 2022 | ||||||||||
Credit facilities | $ | $ | |||||||||
Other line of credit | |||||||||||
Other | |||||||||||
Total | $ | $ |
Six Months Ended June 30, | |||||||||||
2023 | 2022 | ||||||||||
Credit facilities | $ | $ | |||||||||
Other line of credit | |||||||||||
Other | |||||||||||
Total | $ | $ |
Six Months Ended June 30, 2023 | Twelve Months Ended December 31, 2022 | ||||||||||
Fair value at beginning of period | $ | $ | |||||||||
Purchases | |||||||||||
Redemptions | ( | ( | |||||||||
Maturities | ( | ( | |||||||||
Change in bond premium | ( | ( | |||||||||
Fair market value adjustment | ( | ||||||||||
Fair value at end of period | $ | $ |
June 30, 2023 | |||||||||||||||||||||||||||||
Notional Amount | Fixed Rate | Expiration | Fair Value | Balance Sheet Location | |||||||||||||||||||||||||
Interest rate swap | $ | % | 4/14/2025 | $ | Other non-current asset | ||||||||||||||||||||||||
Interest rate swap | $ | % | 12/14/2026 | $ | Other non-current asset | ||||||||||||||||||||||||
Interest rate swap | $ | % | 8/14/2027 | $ | Other non-current asset | ||||||||||||||||||||||||
Interest rate swap | $ | % | 4/14/2028 | $ | Other non-current asset |
December 31, 2022 | |||||||||||||||||||||||||||||
Notional Amount | Fixed Rate | Expiration | Fair Value | Balance Sheet Location | |||||||||||||||||||||||||
Interest rate swap | $ | % | 6/1/2023 | $ | Other current asset | ||||||||||||||||||||||||
Interest rate swap | $ | % | 4/14/2025 | $ | Other non-current asset | ||||||||||||||||||||||||
Interest rate swap | $ | % | 12/14/2026 | $ | Other non-current asset | ||||||||||||||||||||||||
Interest rate swap | $ | % | 8/14/2027 | $ | Other non-current asset | ||||||||||||||||||||||||
Gain Recognized in AOCI, net of tax | Gain (Loss) Reclassified from AOCI into Expense | ||||||||||||||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | ( |
Six Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | ( |
Level | June 30, 2023 | December 31, 2022 | |||||||||||||||
Deferred compensation plan assets | 1 | $ | $ | ||||||||||||||
Available-for-sale debt securities | 1 | ||||||||||||||||
Other depository assets | 1 | ||||||||||||||||
Deferred compensation plan liabilities | 1 | ( | ( | ||||||||||||||
Interest rate swaps | 2 | ||||||||||||||||
Contingent purchase price liabilities | 3 | ( | ( |
2023 | 2022 | ||||||||||
Beginning balance – December 31 | $ | ( | $ | ( | |||||||
Additions from business acquisitions | ( | ( | |||||||||
Settlement of contingent purchase price liabilities | |||||||||||
Change in fair value of contingencies | ( | ||||||||||
Change in net present value of contingencies | ( | ( | |||||||||
Ending balance – June 30 | $ | ( | $ | ( |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net unrealized gain (loss) on available-for-sale securities, net of income taxes (1) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Net unrealized gain (loss) on interest rate swaps, net of income taxes(2) | ( | ||||||||||||||||||||||
Foreign currency translation | ( | ( | ( | ( | |||||||||||||||||||
Total other comprehensive income | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Stock options | $ | $ | $ | $ | |||||||||||||||||||
Restricted stock units and awards | |||||||||||||||||||||||
Performance share units | |||||||||||||||||||||||
Total stock-based compensation expense | $ | $ | $ | $ |
Stock Options | Restricted Stock Units and Awards | ||||||||||||||||||||||
Number of Options | Weighted Average Exercise Price Per Share | Number of Shares | Weighted Average Grant-Date Fair Value (1) | ||||||||||||||||||||
Outstanding at beginning of year | $ | $ | |||||||||||||||||||||
Granted | $ | $ | |||||||||||||||||||||
Exercised or released | ( | $ | ( | $ | |||||||||||||||||||
Outstanding at June 30, 2023 | $ | $ | |||||||||||||||||||||
Exercisable at June 30, 2023 | $ |
Six Months Ended June 30, 2023 | |||||
Expected volatility (1) | |||||
Expected option life (years) (2) | |||||
Risk-free interest rate (3) | |||||
Expected dividend yield (4) |
Performance Share Units | Weighted Average Grant-Date Fair Value Per Unit (1) | ||||||||||
Outstanding at beginning of year | $ | ||||||||||
Granted | $ | ||||||||||
Vested | ( | $ | |||||||||
Outstanding at June 30, 2023 | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net Income | $ | $ | $ | $ | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Weighted average common shares outstanding | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Stock options (1) | |||||||||||||||||||||||
Restricted stock units and awards (1) | |||||||||||||||||||||||
Performance share units | |||||||||||||||||||||||
Contingent shares (2) | |||||||||||||||||||||||
Diluted weighted average common shares outstanding (3) | |||||||||||||||||||||||
Basic earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per share | $ | $ | $ | $ |
2023 | 2022 | ||||||||||
Common stock issued (number) | |||||||||||
Common stock value | $ | $ | |||||||||
Cash paid | |||||||||||
Recorded contingent consideration | |||||||||||
Total recorded purchase price | $ | $ | |||||||||
Accounts receivable acquired | |||||||||||
Fixed assets acquired | |||||||||||
Identifiable intangible assets acquired | |||||||||||
Operating lease right-of-use asset acquired | |||||||||||
Other assets acquired | |||||||||||
Operating lease liability acquired - current | ( | ( | |||||||||
Other current liabilities acquired | ( | ( | |||||||||
Operating lease liability acquired - non-current | ( | ( | |||||||||
Goodwill | |||||||||||
Total net assets acquired | $ | $ | |||||||||
Maximum potential contingent consideration | $ | $ | |||||||||
Six Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
Financial Services | Benefits and Insurance Services | Financial Services | Benefits and Insurance Services | ||||||||||||||||||||
Goodwill | $ | $ | $ | $ | |||||||||||||||||||
Client list | |||||||||||||||||||||||
Other intangibles | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net expense | $ | $ | $ | $ | |||||||||||||||||||
Cash settlement paid | $ | $ | $ | $ | |||||||||||||||||||
Shares issued (number) |
Financial Services | Benefits and Insurance Services | National Practices | ||||||||||||
Accounting and Tax | Employee Benefits Consulting | Information Technology Managed Networking and Hardware Services | ||||||||||||
Financial Advisory | Payroll / Human Capital Management | Healthcare Consulting | ||||||||||||
Valuation | Property and Casualty Insurance | |||||||||||||
Risk and Advisory Services | Retirement and Investment Services | |||||||||||||
Government Healthcare Consulting |
Three Months Ended June 30, 2023 | |||||||||||||||||||||||
Financial Services | Benefits and Insurance Services | National Practices | Consolidated | ||||||||||||||||||||
Accounting, tax, advisory and consulting | $ | $ | |||||||||||||||||||||
Core benefits and insurance services | |||||||||||||||||||||||
Non-core benefits and insurance services | |||||||||||||||||||||||
Managed networking, hardware services | |||||||||||||||||||||||
National practices consulting | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Three Months Ended June 30, 2022 | |||||||||||||||||||||||
Financial Services | Benefits and Insurance Services | National Practices | Consolidated | ||||||||||||||||||||
Accounting, tax, advisory and consulting | $ | $ | |||||||||||||||||||||
Core benefits and insurance services | |||||||||||||||||||||||
Non-core benefits and insurance services | |||||||||||||||||||||||
Managed networking, hardware services | |||||||||||||||||||||||
National practices consulting | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Six Months Ended June 30, 2023 | |||||||||||||||||||||||
Financial Services | Benefits and Insurance Services | National Practices | Consolidated | ||||||||||||||||||||
Accounting, tax, advisory and consulting | $ | $ | |||||||||||||||||||||
Core benefits and insurance services | |||||||||||||||||||||||
Non-core benefits and insurance services | |||||||||||||||||||||||
Managed networking, hardware services | |||||||||||||||||||||||
National practices consulting | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Six Months Ended June 30, 2022 | |||||||||||||||||||||||
Financial Services | Benefits and Insurance Services | National Practices | Consolidated | ||||||||||||||||||||
Accounting, tax, advisory and consulting | $ | $ | |||||||||||||||||||||
Core benefits and insurance services | |||||||||||||||||||||||
Non-core benefits and insurance services | |||||||||||||||||||||||
Managed networking, hardware services | |||||||||||||||||||||||
National practices consulting | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Three Months Ended June 30, 2023 | |||||||||||||||||||||||||||||
Financial Services | Benefits and Insurance Services | National Practices | Corporate and Other | Total | |||||||||||||||||||||||||
Revenue | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||
Gross margin | ( | ||||||||||||||||||||||||||||
Corporate general and administrative expenses | |||||||||||||||||||||||||||||
Operating income (loss) | ( | ||||||||||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||||
Interest expense | ( | ( | |||||||||||||||||||||||||||
Other income, net | |||||||||||||||||||||||||||||
Total other income (expense), net | ( | ( | |||||||||||||||||||||||||||
Income (loss) before income tax expense | $ | $ | $ | $ | ( | $ |
Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||
Financial Services | Benefits and Insurance Services | National Practices | Corporate and Other | Total | |||||||||||||||||||||||||
Revenue | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Operating expenses | ( | ||||||||||||||||||||||||||||
Gross margin | |||||||||||||||||||||||||||||
Corporate general and administrative expenses | |||||||||||||||||||||||||||||
Operating income (loss) | ( | ||||||||||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ||||||||||||||||||||||||||
Gain on sale of operations, net | |||||||||||||||||||||||||||||
Other income (expense), net | ( | ( | ( | ||||||||||||||||||||||||||
Total other income (expense), net | ( | ( | ( | ||||||||||||||||||||||||||
Income (loss) before income tax expense | $ | $ | $ | $ | ( | $ |
Six Months Ended June 30, 2023 | |||||||||||||||||||||||||||||
Financial Services | Benefits and Insurance Services | National Practices | Corporate and Other | Total | |||||||||||||||||||||||||
Revenue | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||
Gross margin | ( | ||||||||||||||||||||||||||||
Corporate general and administrative expenses | |||||||||||||||||||||||||||||
Operating income (loss) | ( | ||||||||||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ||||||||||||||||||||||||||
Gain on sale of operations, net | |||||||||||||||||||||||||||||
Other income, net | |||||||||||||||||||||||||||||
Total other income, net | |||||||||||||||||||||||||||||
Income (loss) before income tax expense | $ | $ | $ | $ | ( | $ |
Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||
Financial Services | Benefits and Insurance Services | National Practices | Corporate and Other | Total | |||||||||||||||||||||||||
Revenue | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Operating expenses (income) | ( | ||||||||||||||||||||||||||||
Gross margin | |||||||||||||||||||||||||||||
Corporate general and administrative expenses | |||||||||||||||||||||||||||||
Operating income (loss) | ( | ||||||||||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ||||||||||||||||||||||||||
Gain on sale of operations, net | |||||||||||||||||||||||||||||
Other income (expense), net | ( | ( | ( | ||||||||||||||||||||||||||
Total other income (expense), net | ( | ( | ( | ||||||||||||||||||||||||||
Income (loss) before income tax expense | $ | $ | $ | $ | ( | $ |
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2023 | % of Total | 2022 | % of Total | $ Change | % Change | ||||||||||||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||||||||||||||
Financial Services | $ | 290,930 | 73.0 | % | $ | 259,308 | 71.6 | % | $ | 31,622 | 12.2 | % | |||||||||||||||||||||||
Benefits and Insurance Services | 95,838 | 24.0 | % | 91,708 | 25.3 | % | 4,130 | 4.5 | % | ||||||||||||||||||||||||||
National Practices | 11,734 | 3.0 | % | 10,936 | 3.1 | % | 798 | 7.3 | % | ||||||||||||||||||||||||||
Total CBIZ | $ | 398,502 | 100.0 | % | $ | 361,952 | 100.0 | % | $ | 36,550 | 10.1 | % |
Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2023 | % of Total | 2022 | % of Total | $ Change | % Change | ||||||||||||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||||||||||||||
Financial Services | $ | 634,016 | 74.3 | % | $ | 548,054 | 72.7 | % | $ | 85,962 | 15.7 | % | |||||||||||||||||||||||
Benefits and Insurance Services | 195,892 | 23.0 | % | 184,194 | 24.4 | % | 11,698 | 6.4 | % | ||||||||||||||||||||||||||
National Practices | 23,200 | 2.7 | % | 21,426 | 2.9 | % | 1,774 | 8.3 | % | ||||||||||||||||||||||||||
Total CBIZ | $ | 853,108 | 100.0 | % | $ | 753,674 | 100.0 | % | $ | 99,434 | 13.2 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||
Operating expenses (income) | $ | 5,102 | $ | (13,338) | $ | 9,862 | $ | (19,005) | |||||||||||||||
Corporate general and administrative expenses (income) | 631 | (1,811) | 1,273 | (2,622) | |||||||||||||||||||
Other income (expense), net | 5,733 | (15,149) | 11,135 | (21,627) |
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
As Reported | Deferred Compensation Plan | Adjusted | % of Revenue | As Reported | Deferred Compensation Plan | Adjusted | % of Revenue | ||||||||||||||||||||||||||||||||||||||||
Gross margin | $ | 54,515 | $ | 5,102 | $ | 59,617 | 15.0 | % | $ | 72,216 | $ | (13,338) | $ | 58,878 | 16.3 | % | |||||||||||||||||||||||||||||||
Operating income | 38,722 | 5,733 | 44,455 | 11.2 | % | 61,290 | (15,149) | 46,141 | 12.7 | % | |||||||||||||||||||||||||||||||||||||
Other (expense) income, net | 5,421 | (5,733) | (312) | (0.1) | % | (15,903) | 15,149 | (754) | (0.2) | % | |||||||||||||||||||||||||||||||||||||
Income before income tax expense | 38,609 | — | 38,609 | 9.7 | % | 43,877 | — | 43,877 | 12.1 | % |
Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
As Reported | Deferred Compensation Plan | Adjusted | % of Revenue | As Reported | Deferred Compensation Plan | Adjusted | % of Revenue | ||||||||||||||||||||||||||||||||||||||||
Gross margin | $ | 168,110 | $ | 9,862 | $ | 177,972 | 20.9 | % | $ | 173,639 | $ | (19,005) | $ | 154,634 | 20.5 | % | |||||||||||||||||||||||||||||||
Operating income | 136,719 | 11,135 | 147,854 | 17.3 | % | 146,404 | (21,627) | 124,777 | 16.6 | % | |||||||||||||||||||||||||||||||||||||
Other income (expense), net | 10,533 | (11,135) | (602) | (0.1) | % | (22,310) | 21,627 | (683) | (0.1) | % | |||||||||||||||||||||||||||||||||||||
Income before income tax expense | 138,176 | — | 138,176 | 16.1 | % | 121,325 | — | 121,325 | 16.0 | % |
Three Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
Operating expenses by segment: | |||||||||||||||||||||||
Financial Services | $ | 243,445 | $ | 209,643 | $ | 33,802 | 16.1 | % | |||||||||||||||
Benefits and Insurance Services | 78,374 | 75,020 | 3,354 | 4.5 | % | ||||||||||||||||||
National Practices | 10,545 | 9,899 | 646 | 6.5 | % | ||||||||||||||||||
Corporate and Other | 11,623 | (4,826) | 16,449 | N/M | |||||||||||||||||||
Total Operating expenses | $ | 343,987 | $ | 289,736 | $ | 54,251 | 18.7 | % | |||||||||||||||
Operating expenses % of revenue | 86.3 | % | 80.0 | % | |||||||||||||||||||
Operating expenses excluding deferred compensation | $ | 338,885 | $ | 303,074 | $ | 35,811 | 11.8 | % | |||||||||||||||
Operating expenses excluding deferred compensation % of revenue | 85.0 | % | 83.7 | % |
Six Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
Operating expenses (income) by segment: | |||||||||||||||||||||||
Financial Services | $ | 487,888 | $ | 419,443 | $ | 68,445 | 16.3 | % | |||||||||||||||
Benefits and Insurance Services | 155,297 | 147,677 | 7,620 | 5.2 | % | ||||||||||||||||||
National Practices | 21,128 | 19,475 | 1,653 | 8.5 | % | ||||||||||||||||||
Corporate and Other | 20,685 | (6,560) | 27,245 | N/M | |||||||||||||||||||
Total Operating expenses | $ | 684,998 | $ | 580,035 | $ | 104,963 | 18.1 | % | |||||||||||||||
Operating expenses % of revenue | 80.3 | % | 77.0 | % | |||||||||||||||||||
Operating expenses excluding deferred compensation | $ | 675,136 | $ | 599,040 | $ | 76,096 | 12.7 | % | |||||||||||||||
Operating expenses excluding deferred compensation % of revenue | 79.1 | % | 79.5 | % |
Three Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
G&A expenses | $ | 15,793 | $ | 10,926 | $ | 4,867 | 44.5 | % | |||||||||||||||
G&A expenses % of revenue | 4.0 | % | 3.0 | % | |||||||||||||||||||
G&A expenses excluding deferred compensation | $ | 15,162 | $ | 12,737 | $ | 2,425 | 19.0 | % | |||||||||||||||
G&A expenses excluding deferred compensation % of revenue | 3.8 | % | 3.5 | % |
Six Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
G&A expenses | $ | 31,391 | $ | 27,235 | $ | 4,156 | 15.3 | % | |||||||||||||||
G&A expenses % of revenue | 3.7 | % | 3.6 | % | |||||||||||||||||||
G&A expenses excluding deferred compensation | $ | 30,118 | $ | 29,857 | $ | 261 | 0.9 | % | |||||||||||||||
G&A expenses excluding deferred compensation % of revenue | 3.5 | % | 4.0 | % |
Three Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
Interest expense | $ | (5,534) | $ | (1,645) | $ | (3,889) | 236.4 | % | |||||||||||||||
Gain on sale of operations, net | — | 135 | (135) | (100.0) | % | ||||||||||||||||||
Other income (expense), net (1) | 5,421 | (15,903) | 21,324 | (134.1) | % | ||||||||||||||||||
Total other expense, net | $ | (113) | $ | (17,413) | $ | 17,300 | (99.4) | % | |||||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
Interest expense | $ | (9,175) | $ | (2,904) | $ | (6,271) | 215.9 | % | |||||||||||||||
Gain on sale of operations, net | 99 | 135 | (36) | (26.7) | % | ||||||||||||||||||
Other income (expense) income, net (2) | 10,533 | (22,310) | 32,843 | (147.2) | % | ||||||||||||||||||
Total other income (expense), net | $ | 1,457 | $ | (25,079) | $ | 26,536 | (105.8) | % | |||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
Income tax expense | $ | 11,746 | $ | 12,622 | $ | (876) | (6.9) | % | |||||||||||||||
Effective tax rate | 30.4 | % | 28.8 | % | |||||||||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
Income tax expense | $ | 38,153 | $ | 31,943 | $ | 6,210 | 19.4 | % | |||||||||||||||
Effective tax rate | 27.6 | % | 26.3 | % |
Three Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Same-unit | $ | 269,345 | $ | 259,308 | $ | 10,037 | 3.9 | % | |||||||||||||||
Acquired businesses | 21,585 | — | 21,585 | N/M | |||||||||||||||||||
Total revenue | $ | 290,930 | $ | 259,308 | $ | 31,622 | 12.2 | % | |||||||||||||||
Operating expenses | 243,445 | 209,643 | 33,802 | 16.1 | % | ||||||||||||||||||
Gross margin / Operating income | $ | 47,485 | $ | 49,665 | $ | (2,180) | (4.4) | % | |||||||||||||||
Total other income, net | 235 | 220 | 15 | N/M | |||||||||||||||||||
Income before income tax expense | 47,720 | 49,885 | (2,165) | (4.3) | % | ||||||||||||||||||
Gross margin percent | 16.3 | % | 19.2 | % | |||||||||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Same-unit | $ | 588,519 | $ | 548,054 | $ | 40,465 | 7.4 | % | |||||||||||||||
Acquired businesses | 45,497 | — | 45,497 | ||||||||||||||||||||
Total revenue | $ | 634,016 | $ | 548,054 | $ | 85,962 | 15.7 | % | |||||||||||||||
Operating expenses | 487,888 | 419,443 | 68,445 | 16.3 | % | ||||||||||||||||||
Gross margin / Operating income | $ | 146,128 | $ | 128,611 | $ | 17,517 | 13.6 | % | |||||||||||||||
Total other income, net | 589 | 306 | 283 | 92.5 | % | ||||||||||||||||||
Income before income tax expenses | 146,717 | 128,917 | 17,800 | 13.8 | % | ||||||||||||||||||
Gross margin percent | 23.0 | % | 23.5 | % |
Three Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Same-unit | $ | 95,838 | $ | 91,708 | $ | 4,130 | 4.5 | % | |||||||||||||||
Total revenue | $ | 95,838 | $ | 91,708 | $ | 4,130 | 4.5 | % | |||||||||||||||
Operating expenses | 78,374 | 75,020 | 3,354 | 4.5 | % | ||||||||||||||||||
Gross margin / Operating income | $ | 17,464 | $ | 16,688 | $ | 776 | 4.7 | % | |||||||||||||||
Total other income (expense), net | 153 | (13) | 166 | N/M | |||||||||||||||||||
Income before income tax expense | 17,617 | 16,675 | 942 | 5.6 | % | ||||||||||||||||||
Gross margin percent | 18.2 | % | 18.2 | % |
Six Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Same-unit | $ | 195,892 | $ | 184,194 | $ | 11,698 | 6.4 | % | |||||||||||||||
Total revenue | $ | 195,892 | $ | 184,194 | $ | 11,698 | 6.4 | % | |||||||||||||||
Operating expenses | 155,297 | 147,677 | 7,620 | 5.2 | % | ||||||||||||||||||
Gross margin/ Operating income | $ | 40,595 | $ | 36,517 | $ | 4,078 | 11.2 | % | |||||||||||||||
Total other income (expense), net | 329 | (37) | 366 | (989.2) | % | ||||||||||||||||||
Income before income tax expenses | 40,924 | 36,480 | 4,444 | 12.2 | % | ||||||||||||||||||
Gross margin percent | 20.7 | % | 19.8 | % | |||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
Same-unit revenue | $ | 11,734 | $ | 10,936 | $ | 798 | 7.3 | % | |||||||||||||||
Operating expenses | 10,545 | 9,899 | 646 | 6.5 | % | ||||||||||||||||||
Gross margin / Operating income | $ | 1,189 | $ | 1,037 | $ | 152 | 14.7 | % | |||||||||||||||
Total other income, net | 1 | 1 | — | N/M | |||||||||||||||||||
Income before income tax expense | 1,190 | 1,038 | 152 | 14.6 | % | ||||||||||||||||||
Gross margin percent | 10.1 | % | 9.5 | % |
Six Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
Same-unit revenue | $ | 23,200 | $ | 21,426 | $ | 1,774 | 8.3 | % | |||||||||||||||
Operating expenses | 21,128 | 19,475 | 1,653 | 8.5 | % | ||||||||||||||||||
Gross margin / Operating income | $ | 2,072 | $ | 1,951 | $ | 121 | 6.2 | % | |||||||||||||||
Total other income, net | 1 | 1 | — | N/M | |||||||||||||||||||
Income before income tax expenses | 2,073 | 1,952 | 121 | 6.2 | % | ||||||||||||||||||
Gross margin percent | 8.9 | % | 9.1 | % | |||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
Operating expenses (income) | $ | 11,623 | $ | (4,826) | 16,449 | N/M | |||||||||||||||||
Corporate general and administrative expenses | 15,793 | 10,926 | 4,867 | 44.5 | % | ||||||||||||||||||
Operating loss | (27,416) | (6,100) | (21,316) | N/M | |||||||||||||||||||
Total other expense, net | (502) | (17,621) | 17,119 | (97.2) | % | ||||||||||||||||||
Loss before income tax expense | (27,918) | (23,721) | (4,197) | 17.7 | % |
Six Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands, except percentages) | |||||||||||||||||||||||
Operating expenses (income) | $ | 20,685 | $ | (6,560) | 27,245 | N/M | |||||||||||||||||
Corporate general and administrative expenses | 31,391 | 27,235 | 4,156 | 15.3 | % | ||||||||||||||||||
Operating loss | (52,076) | (20,675) | (31,401) | 151.9 | % | ||||||||||||||||||
Total other income (expense), net | 538 | (25,349) | 25,887 | (102.1) | % | ||||||||||||||||||
Loss before income tax expenses | (51,538) | (46,024) | (5,514) | 12.0 | % | ||||||||||||||||||
Six Months Ended June 30, | |||||||||||
2023 | 2022 | ||||||||||
(Amounts in thousands) | |||||||||||
Net cash provided by operating activities | $ | 29,729 | $ | 28,508 | |||||||
Net cash used in investing activities | (65,617) | (89,756) | |||||||||
Net cash provided by financing activities | 21,793 | 91,655 | |||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | $ | (14,095) | $ | 30,407 |
Issuer Purchases of Equity Securities | ||||||||||||||||||||||||||
Second Quarter Purchases | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan | Maximum Number of Shares That May Yet Be Purchased Under the Plan | ||||||||||||||||||||||
April 1 – April 30, 2023 | 233 | $ | 50.88 | 233 | 4,767 | |||||||||||||||||||||
May 1 – May 31, 2023 | 273 | $ | 50.37 | 273 | 4,494 | |||||||||||||||||||||
June 1 – June 30, 2023 | 41 | $ | 51.97 | 41 | 4,453 | |||||||||||||||||||||
Second quarter purchases | 547 | $ | 50.70 | 547 |
31.1 * | ||||||||
31.2 * | ||||||||
32.1 ** | ||||||||
32.2 ** | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document* | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document* | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document* | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document* | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document* | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document* | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Exhibit 101 attachments) |
CBIZ, Inc. | |||||||||||
(Registrant) | |||||||||||
Date: | July 27, 2023 | By: | /s/ Ware H. Grove | ||||||||
Ware H. Grove | |||||||||||
Chief Financial Officer | |||||||||||
Duly Authorized Officer and Principal Financial Officer |
Date: July 27, 2023 | /s/ JEROME P. GRISKO, JR. | ||||
Jerome P. Grisko, Jr. | |||||
President and Chief Executive Officer |
Date: July 27, 2023 | /s/ WARE H. GROVE | ||||
Ware H. Grove | |||||
Chief Financial Officer |
Date: July 27, 2023 | /s/ JEROME P. GRISKO, JR. | ||||
Jerome P. Grisko, Jr. | |||||
President and Chief Executive Officer |
/s/ MICHAEL W. GLEESPEN | ||||||||
Name: | Michael W. Gleespen | |||||||
Title: | Notary Public & Attorney-At-Law |
Date: July 27, 2023 | /s/ WARE H. GROVE | ||||
Ware H. Grove | |||||
Chief Financial Officer |
/s/ MICHAEL W. GLEESPEN | ||||||||
Name: | Michael W. Gleespen | |||||||
Title: | Notary Public & Attorney-At-Law |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Revenue | $ 398,502 | $ 361,952 | $ 853,108 | $ 753,674 |
Operating expenses | 343,987 | 289,736 | 684,998 | 580,035 |
Gross margin | 54,515 | 72,216 | 168,110 | 173,639 |
Corporate general and administrative expenses | 15,793 | 10,926 | 31,391 | 27,235 |
Operating income | 38,722 | 61,290 | 136,719 | 146,404 |
Other (expense) income: | ||||
Interest expense | (5,534) | (1,645) | (9,175) | (2,904) |
Gain on sale of operations, net | 0 | 135 | 99 | 135 |
Other income (expense), net | 5,421 | (15,903) | 10,533 | (22,310) |
Total other (expense) income, net | (113) | (17,413) | 1,457 | (25,079) |
Income before income tax expense | 38,609 | 43,877 | 138,176 | 121,325 |
Income tax expense | 11,746 | 12,622 | 38,153 | 31,943 |
Net income | $ 26,863 | $ 31,255 | $ 100,023 | $ 89,382 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.54 | $ 0.60 | $ 1.99 | $ 1.72 |
Diluted (in dollars per share) | $ 0.53 | $ 0.60 | $ 1.98 | $ 1.70 |
Basic weighted average shares outstanding (in shares) | 49,963 | 51,911 | 50,164 | 52,015 |
Diluted weighted average shares outstanding (in shares) | 50,385 | 52,531 | 50,639 | 52,736 |
Comprehensive income: | ||||
Net income | $ 26,863 | $ 31,255 | $ 100,023 | $ 89,382 |
Other comprehensive income, net of tax | 1,537 | 480 | 324 | 2,405 |
Comprehensive income | $ 28,400 | $ 31,735 | $ 100,347 | $ 91,787 |
Summary of Significant Accounting Policies |
6 Months Ended |
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Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Selected Terms Used in Notes to the Condensed Consolidated Financial Statements ASA – Administrative Service Agreement ASC – Accounting Standards Codification ASU – Accounting Standards Update CPA firm – Certified Public Accounting firm FASB – The Financial Accounting Standards Board GAAP – United States Generally Accepted Accounting Principles SOFR – Secured Overnight Financing Rate LIBOR – London Interbank Offered Rate SEC – United States Securities and Exchange Commission Description of Business: CBIZ, Inc. is a diversified services company which, acting through its subsidiaries, has been providing professional business services since 1996, primarily to small and medium-sized businesses, as well as individuals, governmental entities, and not-for-profit enterprises throughout the United States and parts of Canada. CBIZ, Inc. manages and reports its operations along three practice groups: Financial Services, Benefits and Insurance Services and National Practices. A further description of products and services offered by each of the practice groups is provided in Note 12, Segment Disclosures, to the accompanying unaudited condensed consolidated financial statements. Effective April 1, 2023, CBIZ formed Rockside Insurance Company, Inc. ("Rockside"), a captive insurance company licensed in Vermont. Rockside, wholly owned by CBIZ, provides insurance coverages for a portion of the retention deductibles from CBIZ's certain insurance programs with third party insurers. Basis of Consolidation: The accompanying unaudited condensed consolidated financial statements include the operations of CBIZ, Inc. and all of its wholly-owned subsidiaries (“CBIZ”, the “Company”, “we”, “us”, or “our”), after elimination of all intercompany balances and transactions. These unaudited condensed consolidated financial statements do not reflect the operations or accounts of variable interest entities as the impact is not material to the financial condition, results of operations or cash flows of CBIZ. Unaudited Interim Financial Statements: The unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and applicable rules and regulations of the Securities and Exchange Commission (the "SEC") regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. In the opinion of CBIZ management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial condition, results of operations, and cash flows for the interim periods presented, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2023. Use of Estimates: The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Changes in circumstances could cause actual results to differ materially from these estimates. Changes in Accounting Policies: We have consistently applied the accounting policies for the periods presented as described in Note 1, Basis of Presentation and Significant Accounting Policies, to the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Reclassifications: Certain prior period amounts have been reclassified to conform to current year's presentation.
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New Accounting Pronouncements |
6 Months Ended |
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Jun. 30, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTSThe FASB ASC is the sole source of authoritative GAAP other than the SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an ASU to communicate changes to the FASB ASC. We assess and review the impact of all issued ASUs. During the six months ended June 30, 2023, we have implemented all new ASUs that are in effect and that may impact our consolidated financial statements. |
Accounts Receivable, Net |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable, Net | ACCOUNTS RECEIVABLE, NET Accounts receivable, less allowance for doubtful accounts, reflects the net realizable value of receivables and approximates fair value. Unbilled revenue is recorded at estimated net realizable value. Assessing the collectability of the receivables (billed and unbilled) requires management judgment based on a combination of factors, including but not limited to, an evaluation of our historical incurred loss experience, credit-worthiness of our clients, age of the trade receivable balance, current economic conditions that may affect a client’s ability to pay, and reasonable and supportable forecasts. Receivables are charged-off against the allowance when the balance is deemed uncollectible. Accounts receivable, net, at June 30, 2023 and December 31, 2022 was as follows (in thousands):
Changes to the allowance for doubtful accounts for the six months ended June 30, 2023 and twelve months ended December 31, 2022 were as follows (in thousands):
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Debt and Financing Arrangements |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Financing Arrangements | DEBT AND FINANCING ARRANGEMENTSOn May 4, 2022, we entered into a credit facility (the "2022 credit facility" or the "credit facility"), which amended and restated the 2018 credit facility. The 2022 credit facility increased our borrowing capacity from $400 million to $600 million, providing us with the capital necessary to meet our working capital needs as well as the flexibility to continue with our strategic initiatives, including business acquisitions and share repurchases. Other important key terms of the 2022 credit facility included: (i) an accordion feature that permits lenders to extend an additional $200 million at later date; (ii) no change in pricing from the 2018 credit facility; (iii) upsizing of baskets and various sublimits to reflect the increased size of the Company's business; (iv) a swing line facility increase from $25 million to $50 million, providing for same-day funds to cover daily liquidity needs; and (v) base interest rate amended from LIBOR to Term SOFR. The 2022 credit facility matures on May 4, 2027. The balance outstanding under the 2022 credit facility was $410.6 million and $265.7 million at June 30, 2023 and December 31, 2022, respectively. The combined effective interest rates under the 2018 and 2022 credit facilities, including the impact of interest rate swaps associated with those credit facilities, for the six months ended June 30, 2023 and 2022 were as follows:
We had approximately $177.5 million of available funds under the 2022 credit facility at June 30, 2023, net of outstanding letters of credit of $4.4 million. Available funds under the credit facility are based on a multiple of earnings before interest, taxes, depreciation and amortization as defined in the credit facility, and are reduced by letters of credit, other indebtedness and outstanding borrowings under the credit facility. Under the 2022 credit facility, loans are charged an interest rate consisting of a base rate or Term SOFR rate plus an applicable margin, letters of credit are charged based on the same applicable margin, and a commitment fee is charged on the unused portion of the credit facility. The 2022 credit facility contains certain restrictive covenants customary for facilities of this type, including restrictions on indebtedness, liens or other encumbrances, making certain payments, investments, or to sell or otherwise dispose of a substantial portion of assets, or to merge or consolidate with an unaffiliated entity. The 2022 credit facility also limits our ability to make dividend payments. Historically, we have not paid cash dividends on our common stock. Our Board of Directors has discretion over the payment and level of dividends on common stock, subject to the limitations of the credit facility and applicable law. The credit facility contains a provision that, in the event of a defined change in control, the credit facility may be terminated. In addition, the 2022 credit facility contains financial covenants that require us to meet certain requirements with respect to (i) a total leverage ratio and (ii) minimum interest coverage ratio which may limit our ability to borrow up to the total commitment amount. As of June 30, 2023, we are in compliance with all covenants. Other Line of Credit - We have an unsecured $20.0 million line of credit by and among CBIZ Benefits and Insurance, Inc. and Huntington National Bank. We utilize this line to support our short-term funding requirements of payroll client fund obligations due to the investment of client funds, rather than liquidating client funds that have already been invested in available-for-sale securities. The line of credit, which was renewed on August 1, 2022 and will terminate on August 3, 2023, did not have a balance outstanding at June 30, 2023. We intend to renew this line of credit. Interest Expense - Interest expense, including amortization of deferred financing costs, commitment fees, line of credit fees, and other applicable bank charges, for the three and six months ended June 30, 2023 and 2022 was as follows (in thousands):
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Letters of Credit and Guarantees - We provide letters of credit to landlords (lessors) of our leased premises in lieu of cash security deposits, which totaled $4.4 million and $5.0 million at June 30, 2023 and December 31, 2022, respectively. In addition, we provide license bonds to various state agencies to meet certain licensing requirements. The amount of license bonds outstanding was $2.3 million and $2.3 million at June 30, 2023 and December 31, 2022, respectively. Legal Proceedings - On December 19, 2016, CBIZ Operations, Inc. ("CBIZ Operations") was named as a defendant in a lawsuit filed by Zotec Partners, LLC (“Zotec”) in the Marion County Indiana Superior Court. After various amendments, the lawsuit asserted claims under Indiana law for securities, statutory and common law fraud or deception, unjust enrichment, breach of contract, and vicarious liability against CBIZ Operations and a former employee of CBIZ MMP in connection with the sale of the CBIZ MMP medical billing practice to Zotec. The plaintiff claimed that CBIZ Operations had a duty to disclose the fact, unknown to employees of CBIZ Operations at the time of the transaction, that the former employee had a financial arrangement with a Zotec vendor at the time CBIZ Operations sold CBIZ MMP to Zotec. The plaintiff sought damages of up to $177.0 million out of the $200.0 million transaction price. Trial was held in October 2021. The jury found in favor of CBIZ on all fraud, contract and other claims before it. On November 14, 2022, the trial court ruled in favor of CBIZ and against Zotec’s claim for statutory securities fraud. The court also ruled in favor of CBIZ on its counterclaim for indemnification under contract. The trial court is expected to set further proceedings to determine the amount of damages owed by Zotec to CBIZ. In addition to the item disclosed above, the Company is, from time to time, subject to claims and lawsuits arising in the ordinary course of business. We cannot predict the outcome of all such matters or estimate the possible loss, if any. Although the proceedings are subject to uncertainties in the litigation process and the ultimate disposition of these proceedings is not presently determinable, we intend to vigorously defend these matters.
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Financial Instruments |
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Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | FINANCIAL INSTRUMENTS Available-For-Sale Debt Securities - In connection with certain services provided by our payroll operations, we collect funds from our clients’ accounts in advance of paying client obligations. These funds held for clients are segregated and invested in accordance with our investment policy, which requires all investments carry an investment grade rating at the time of initial investment. These investments, primarily consisting of corporate and municipal bonds, are classified as available-for-sale and are included in the “Funds held for clients” line item on the accompanying unaudited Condensed Consolidated Balance Sheets. The par value of these investments totaled $41.2 million and $44.4 million at June 30, 2023 and December 31, 2022, respectively, and had maturity or callable dates ranging from July 2023 through November 2025. At June 30, 2023, unrealized losses on the securities were not material and have not been recognized as a credit loss because the bonds are investment grade quality and management is not required or does not intend to sell prior to an expected recovery in value. The bond issuers continue to make timely principal and interest payments. The following table summarizes activities related to these investments for the six months ended June 30, 2023 and the twelve months ended December 31, 2022 (in thousands):
In addition to the available-for-sale debt securities discussed above, we also held other depository assets in the amount of $0.9 million and $0.9 million at June 30, 2023 and December 31, 2022, respectively. Those depository assets are classified as Level 1 in the fair value hierarchy. Interest Rate Swaps - We utilize interest rate swaps to manage interest rate risk exposure associated with our floating-rate debt under the 2022 credit facility, or the forecasted acquisition of such liability. We do not purchase or hold any derivative instruments for trading or speculative purposes. Refer to the Annual Report on Form 10-K for the year ended December 31, 2022 for further discussion on our interest rate swaps. During the first quarter of 2023, we entered into a new 5-year interest rate swap with a notional value of $25.0 million and fixed rate of 3.669%. During the second quarter of 2023, one interest rate swap expired with a notional value of $15.0 million. As of June 30, 2023, we have four interest rate swaps outstanding. Under the terms of the interest rate swaps, we pay interest at a fixed rate of interest plus applicable margin as stated in the amended agreements, and receive interest that varies with the one-month Term SOFR. The following table summarizes our outstanding interest rate swaps and their classification in the accompanying unaudited Condensed Consolidated Balance Sheets at June 30, 2023 and December 31, 2022 (amounts in thousands):
Refer to Note 7, Fair Value Measurements, for additional disclosures regarding fair value measurements. The following table summarizes the effects of the interest rate swaps on the accompanying unaudited Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2023 and 2022 (in thousands):
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTSThe following table summarizes our assets and (liabilities) at June 30, 2023 and December 31, 2022, respectively, that are measured at fair value on a recurring basis subsequent to initial recognition and indicates the fair value hierarchy of the valuation techniques utilized by us to determine such fair value (in thousands):
During the six months ended June 30, 2023 and 2022, there were no transfers between the valuation hierarchy Levels 1, 2 and 3. The following table summarizes the change in Level 3 fair values of our contingent purchase price liabilities for the six months ended June 30, 2023 and 2022 (pre-tax basis) (in thousands):
Contingent purchase price liabilities result from our business acquisitions and are recorded at fair value at the time of acquisition and are presented as “Contingent purchase price liabilities — current” and “Contingent purchase price liabilities — non-current” in the accompanying unaudited Condensed Consolidated Balance Sheets. We estimate the fair value of our contingent purchase price liabilities using a probability-weighted discounted cash flow model. This fair value measure is based on significant inputs not observed in the market and thus represents a Level 3 measurement. Fair value measurements characterized within Level 3 of the fair value hierarchy are measured based on unobservable inputs that are supported by little or no market activity and reflect our own assumptions in measuring fair value. We probability weight risk-adjusted estimates of future performance of acquired businesses, then calculate the contingent purchase price based on the estimates and discount them to present value representing management’s best estimate of fair value. The fair value of the contingent purchase price liabilities is reassessed quarterly based on assumptions provided by practice group leaders and business unit controllers together with our corporate finance department. Any change in the fair value estimate is recorded in the earnings of that period. Refer to Note 11, Business Combinations, for further discussion of our acquisitions and contingent purchase price liabilities. The carrying amounts of our cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short maturity of these instruments, and the carrying value of bank debt approximates fair value as the interest rate on the bank debt is variable and approximates current market rates. As a result, the fair value measurement of our bank debt is considered to be Level 2 under the fair value hierarchy.
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Other Comprehensive Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income | OTHER COMPREHENSIVE INCOME The following table is a summary of other comprehensive income and discloses the tax impact of each component of other comprehensive income for the three and six months ended June 30, 2023 and 2022 (in thousands):
(1)Net of income tax expense of $64 and income tax benefit of $81 for the three months ended June 30, 2023 and 2022, respectively, and net of income tax expense of $135 and income tax benefit of $433 for the six months ended June 30, 2023 and 2022, respectively. (2)Net of income tax expense of $449 and income tax expense of $250 for the three months ended June 30, 2023 and 2022, respectively, and net of income tax benefit of $14 and income tax expense of $1,178 for the six months ended June 30, 2023 and 2022, respectively.
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Employee Stock Plans |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Stock Plans | EMPLOYEE STOCK PLANS On May 10, 2023, the shareholders of the Company approved an amendment to the 2019 Stock Omnibus Incentive Plan (the “2019 Plan”). The amendment added 1.5 million shares to the total number of shares that may be issued under the 2019 Plan. All other respects of the Plan remain unchanged. The 2019 Plan, which expires in 2029, permits the grant of various forms of stock-based awards. A maximum of 4.6 million stock options, restricted stock or other stock-based compensation awards may be granted. The terms and vesting schedules for the stock-based awards vary by type and date of grant. Shares subject to award under the 2019 Plan may be either authorized but unissued shares of our common stock or treasury shares. Refer to the Annual Report on Form 10-K for the year ended December 31, 2022 for further discussion on the 2019 Plan. Compensation expense for stock-based awards recognized during the three and six months ended June 30, 2023 and 2022 was as follows (in thousands):
Stock Options and Restricted Stock Units and Awards – The following table presents our stock options and restricted stock units and awards activity during the six months ended June 30, 2023 (in thousands, except per share data):
(1)Represents weighted average market value of the shares; awards are granted at no cost to the recipients. CBIZ utilized the Black-Scholes-Merton options pricing model to determine the fair value of stock options on the date of grant. The per-share fair value of stock options granted on February 8, 2023 was $15.35. The following weighted average assumptions were utilized:
(1) The expected volatility assumption was determined based upon the historical volatility of CBIZ's stock price using daily price intervals. (2) The expected option life was determined based upon CBIZ's historical data using a midpoint scenario, which assumes all options are exercised halfway between the expiration date and the weighted average time it takes the option to vest. (3) The risk-free interest rate assumption was based upon zero-coupon U.S. treasury bonds with a term approximating the expected life of the respective options. (4) The expected dividend yield assumption was determined in view of CBIZ's historical and estimated dividend payouts. Performance Share Units (“PSUs”) – PSUs are earned based on our financial performance over a contractual term of three years and the associated expense is recognized over that period based on the fair value of the award. A three-year cliff vesting schedule of the PSUs is dependent upon the Company’s performance relative to pre-established goals based on an earnings per share target (weighted 70%) and total growth in revenue (weighted 30%). The fair value of PSUs is calculated using the market value of a share of our common stock on the date of grant. For performance achieved above specified levels, the recipient may earn additional shares of stock, not to exceed 200% of the number of PSUs initially granted. The following table presents our PSUs activity during the six months ended June 30, 2023 (in thousands, except per share data):
(1)Represents weighted average market value of the performance share units; PSUs are granted at no cost to the recipients.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2023 and 2022 (in thousands, except per share data):
(1)A total of 12 thousand and 53 thousand shares of stock-based awards were excluded from the calculation of diluted earnings per share for three and six months ended June 30, 2023, respectively, as their effect would be anti-dilutive. A total of 17 thousand and 86 thousand shares of stock-based awards were excluded from the calculation of diluted earnings per share for three and six months ended June 30, 2022, respectively, as their effect would be anti-dilutive. (2)Contingent shares represent additional shares to be issued for purchase price earned by former owners of businesses acquired by us once future considerations have been met. Refer to Note 11, Business Combinations, for further details. (3)The denominator used in calculating diluted earnings per share did not include 220 thousand PSUs for both the three and six months ended June 30, 2023, and the denominator used in calculating diluted earnings per share did not include 360 thousand PSUs for both the three and six months ended June 30, 2022. The performance conditions associated with these performance share units were not met and consequently none of these PSUs were considered as issuable for the three and six months ended June 30, 2023 and 2022.
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Business Combinations |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | BUSINESS COMBINATIONS Business Combinations During the six months ended June 30, 2023, we completed the following acquisitions: •Effective January 1, 2023, we acquired all of the assets of Danenhauer and Danenhauer, Inc ("Danenhauer and Danenhauer"). Danenhauer and Danenhauer, based in California, is a provider of forensic accounting, business valuation, expert witness testimony, and other services for businesses and individuals. Operating results for Danenhauer and Danenhauer are reported in the Financial Services practice group. •Effective February 1, 2023, we acquired the non-attest assets of Somerset CPAs and Advisors ("Somerset"). Somerset, based in Indianapolis, Indiana, is a provider of a full range of accounting, tax, and financial advisory services to clients in a wide array of industries. Operating results for Somerset are reported in the Financial Services practice group. •Effective June 1, 2023, we acquired all of the assets of Pivot Point Security ("PPS"). PPS, based in Hamilton, New Jersey, is a provider of cyber and information security, and compliance services for small and middle market businesses. Operating results for PPS are reported in the Financial Services practice group. •Effective June 1, 2023, we acquired all of the assets of Ickovic and Co. PC ("Ickovic and Co."). Ickovic and Co., based in Denver, Colorado, is a provider of bespoke services and solutions for high-net-worth individuals, business owners and executives. Operating results for Ickovic and Co. are reported in the Financial Services practice group. During the six months ended June 30, 2022, we completed the following acquisition: •Effective January 1, 2022, we acquired all of the non-attest assets of Marks Paneth LLP ("Marks Paneth"). Marks Paneth, based in New York City, is a provider of a full range of accounting, tax and consulting services to a wide range of industries. Marks Paneth is included as a component of our Financial Services practice group. Operating results are reported in the Financial Services practice group. The acquisitions of Danenhauer and Danenhauer, Somerset, PPS and Ickovic and Co. (together, the “2023 Acquisitions”) are expected to add approximately $64.4 million annualized revenue in 2023. For the six months ended June 30, 2023, we recorded approximately $2.5 million in non-recurring transaction, retention and integration related costs associated with the Somerset acquisition. Pro forma results of operations for these acquisitions have not been presented because the effects of these acquisitions were not material, either individually or in aggregate, to our total revenue and net income for the three and six months ended June 30, 2023 and 2022, respectively. The following table summarizes the consideration and purchase price allocation for the acquisitions completed during the six months ended June 30, 2023 and 2022, respectively (in thousands):
Provisional estimates of fair value are established at the time of each acquisition and are subsequently reviewed within the first year of operations subsequent to the acquisition date to determine the necessity for adjustments. Fair value estimates of the 2023 Acquisitions were provisional as of June 30, 2023, primarily related to the value established for certain identifiable intangible assets and contingent purchase price consideration. The following table summarizes the goodwill and intangible asset amounts resulting from those acquisitions for the six months ended June 30, 2023 and 2022, respectively (in thousands):
Goodwill is calculated as the difference between the aggregated purchase price and the fair value of the net assets acquired. Goodwill represents the value of expected future earnings and cash flows, as well as the synergies created by the integration of the new businesses within our organization, including cross-selling opportunities expected with our Financial Services practice group and the Benefits and Insurance Services practice group, to help strengthen our existing service offerings and expand our market position. Goodwill related to these acquisitions is deductible for tax purposes. Client lists from the aforementioned acquisitions have an expected life up to 10 years, and other intangibles, primarily non-compete agreements, have an expected life of 3 years. Client lists and non-compete agreements are valued using a discounted cash flow model based on management estimates of future cash flows from such assets. The following table summarizes the changes in contingent purchase price consideration for previous acquisitions and contingent payments made for previous business acquisitions in the three and six months ended June 30, 2023 and 2022, respectively (in thousands):
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Segment Disclosures |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Disclosures | SEGMENT DISCLOSURES Our business units have been aggregated into three practice groups: Financial Services, Benefits and Insurance Services and National Practices. The business units have been aggregated based on the following factors: similarity of the products and services provided to clients; similarity of the regulatory environment in which they operate; and similarity of economic conditions affecting long-term performance. The business units are managed along these segment lines. A general description of services provided by each practice group is provided in the table below.
Corporate and Other - Included in Corporate and Other are operating expenses that are not directly allocated to the individual business units. These expenses primarily consist of certain health care costs, gains or losses attributable to assets held in our non-qualified deferred compensation plan, stock-based compensation, consolidation and integration charges, certain professional fees, certain advertising costs and other various expenses. Accounting policies of the practice groups are the same as those described in Note 1, Basis of Presentation and Significant Accounting Policies, to the Annual Report on Form 10-K for the year ended December 31, 2022. Upon consolidation, intercompany accounts and transactions are eliminated, thus inter-segment revenue is not included in the measure of profit or loss for the practice groups. Performance of the practice groups is evaluated on income (loss) before income tax expense (benefit) excluding those costs listed above, which are reported in the “Corporate and Other”. Segment information for the three and six months ended June 30, 2023 and 2022 is presented below. We do not manage our assets on a segment basis, therefore segment assets are not presented below. The following table disaggregates our revenue by source (in thousands):
Segment information for the six months ended June 30, 2023 and 2022 was as follows (in thousands):
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Subsequent Events |
6 Months Ended |
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Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTSOPEN |
Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
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Pay vs Performance Disclosure | ||||
Net income | $ 26,863 | $ 31,255 | $ 100,023 | $ 89,382 |
Insider Trading Arrangements |
3 Months Ended |
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Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business: CBIZ, Inc. is a diversified services company which, acting through its subsidiaries, has been providing professional business services since 1996, primarily to small and medium-sized businesses, as well as individuals, governmental entities, and not-for-profit enterprises throughout the United States and parts of Canada. CBIZ, Inc. manages and reports its operations along three practice groups: Financial Services, Benefits and Insurance Services and National Practices. A further description of products and services offered by each of the practice groups is provided in Note 12, Segment Disclosures, to the accompanying unaudited condensed consolidated financial statements.Effective April 1, 2023, CBIZ formed Rockside Insurance Company, Inc. ("Rockside"), a captive insurance company licensed in Vermont. Rockside, wholly owned by CBIZ, provides insurance coverages for a portion of the retention deductibles from CBIZ's certain insurance programs with third party insurers. |
Basis of Consolidation | Basis of Consolidation: The accompanying unaudited condensed consolidated financial statements include the operations of CBIZ, Inc. and all of its wholly-owned subsidiaries (“CBIZ”, the “Company”, “we”, “us”, or “our”), after elimination of all intercompany balances and transactions. These unaudited condensed consolidated financial statements do not reflect the operations or accounts of variable interest entities as the impact is not material to the financial condition, results of operations or cash flows of CBIZ. |
Unaudited Interim Financial Statements | Unaudited Interim Financial Statements: The unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and applicable rules and regulations of the Securities and Exchange Commission (the "SEC") regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. In the opinion of CBIZ management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial condition, results of operations, and cash flows for the interim periods presented, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2023.
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Use of Estimates | Use of Estimates: The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Changes in circumstances could cause actual results to differ materially from these estimates. |
Changes in Accounting Policies | Changes in Accounting Policies: We have consistently applied the accounting policies for the periods presented as described in Note 1, Basis of Presentation and Significant Accounting Policies, to the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. |
Reclassifications | Reclassifications: Certain prior period amounts have been reclassified to conform to current year's presentation. |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTSThe FASB ASC is the sole source of authoritative GAAP other than the SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an ASU to communicate changes to the FASB ASC. We assess and review the impact of all issued ASUs. During the six months ended June 30, 2023, we have implemented all new ASUs that are in effect and that may impact our consolidated financial statements. |
Accounts Receivable, Net (Tables) |
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable, Net | Accounts receivable, net, at June 30, 2023 and December 31, 2022 was as follows (in thousands):
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Schedule of Changes in the Allowance for Doubtful Accounts on Accounts Receivable | Changes to the allowance for doubtful accounts for the six months ended June 30, 2023 and twelve months ended December 31, 2022 were as follows (in thousands):
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Debt and Financing Arrangements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Unsecured Credit Facility | The combined effective interest rates under the 2018 and 2022 credit facilities, including the impact of interest rate swaps associated with those credit facilities, for the six months ended June 30, 2023 and 2022 were as follows:
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Summary of Recognized Interest Expense | Interest expense, including amortization of deferred financing costs, commitment fees, line of credit fees, and other applicable bank charges, for the three and six months ended June 30, 2023 and 2022 was as follows (in thousands):
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Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Investments | The following table summarizes activities related to these investments for the six months ended June 30, 2023 and the twelve months ended December 31, 2022 (in thousands):
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Summary of Outstanding Interest Rate Swaps | The following table summarizes our outstanding interest rate swaps and their classification in the accompanying unaudited Condensed Consolidated Balance Sheets at June 30, 2023 and December 31, 2022 (amounts in thousands):
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Summary of Effects of Interest Rate Swap | The following table summarizes the effects of the interest rate swaps on the accompanying unaudited Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2023 and 2022 (in thousands):
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table summarizes our assets and (liabilities) at June 30, 2023 and December 31, 2022, respectively, that are measured at fair value on a recurring basis subsequent to initial recognition and indicates the fair value hierarchy of the valuation techniques utilized by us to determine such fair value (in thousands):
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Summary of Change in Level 3 Fair Values of Contingent Purchase Price Liabilities | The following table summarizes the change in Level 3 fair values of our contingent purchase price liabilities for the six months ended June 30, 2023 and 2022 (pre-tax basis) (in thousands):
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Other Comprehensive Income (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Other Comprehensive Income and Tax Impact | The following table is a summary of other comprehensive income and discloses the tax impact of each component of other comprehensive income for the three and six months ended June 30, 2023 and 2022 (in thousands):
(1)Net of income tax expense of $64 and income tax benefit of $81 for the three months ended June 30, 2023 and 2022, respectively, and net of income tax expense of $135 and income tax benefit of $433 for the six months ended June 30, 2023 and 2022, respectively. (2)Net of income tax expense of $449 and income tax expense of $250 for the three months ended June 30, 2023 and 2022, respectively, and net of income tax benefit of $14 and income tax expense of $1,178 for the six months ended June 30, 2023 and 2022, respectively.
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Employee Stock Plans (Tables) |
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-Based Compensation Awards | Compensation expense for stock-based awards recognized during the three and six months ended June 30, 2023 and 2022 was as follows (in thousands):
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Schedule of Stock Options, Restricted Stock Units and Awards, and Performance Share Units Activity | The following table presents our stock options and restricted stock units and awards activity during the six months ended June 30, 2023 (in thousands, except per share data):
(1)Represents weighted average market value of the shares; awards are granted at no cost to the recipients. The following table presents our PSUs activity during the six months ended June 30, 2023 (in thousands, except per share data):
(1)Represents weighted average market value of the performance share units; PSUs are granted at no cost to the recipients.
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Schedule of Fair Value Option Award Weighted Average Assumptions Used | The following weighted average assumptions were utilized:
(1) The expected volatility assumption was determined based upon the historical volatility of CBIZ's stock price using daily price intervals. (2) The expected option life was determined based upon CBIZ's historical data using a midpoint scenario, which assumes all options are exercised halfway between the expiration date and the weighted average time it takes the option to vest. (3) The risk-free interest rate assumption was based upon zero-coupon U.S. treasury bonds with a term approximating the expected life of the respective options. (4) The expected dividend yield assumption was determined in view of CBIZ's historical and estimated dividend payouts.
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Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2023 and 2022 (in thousands, except per share data):
(1)A total of 12 thousand and 53 thousand shares of stock-based awards were excluded from the calculation of diluted earnings per share for three and six months ended June 30, 2023, respectively, as their effect would be anti-dilutive. A total of 17 thousand and 86 thousand shares of stock-based awards were excluded from the calculation of diluted earnings per share for three and six months ended June 30, 2022, respectively, as their effect would be anti-dilutive. (2)Contingent shares represent additional shares to be issued for purchase price earned by former owners of businesses acquired by us once future considerations have been met. Refer to Note 11, Business Combinations, for further details. (3)The denominator used in calculating diluted earnings per share did not include 220 thousand PSUs for both the three and six months ended June 30, 2023, and the denominator used in calculating diluted earnings per share did not include 360 thousand PSUs for both the three and six months ended June 30, 2022. The performance conditions associated with these performance share units were not met and consequently none of these PSUs were considered as issuable for the three and six months ended June 30, 2023 and 2022.
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Business Combinations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Aggregated Consideration And Purchase Price Allocation | The following table summarizes the consideration and purchase price allocation for the acquisitions completed during the six months ended June 30, 2023 and 2022, respectively (in thousands):
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Summary of Segment Allocation | The following table summarizes the goodwill and intangible asset amounts resulting from those acquisitions for the six months ended June 30, 2023 and 2022, respectively (in thousands):
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Summary of Contingent Consideration | The following table summarizes the changes in contingent purchase price consideration for previous acquisitions and contingent payments made for previous business acquisitions in the three and six months ended June 30, 2023 and 2022, respectively (in thousands):
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Segment Disclosures (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Disaggregation of Revenue by Source | The following table disaggregates our revenue by source (in thousands):
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Summary of Segment Information | Segment information for the three months ended June 30, 2023 and 2022 was as follows (in thousands):
Segment information for the six months ended June 30, 2023 and 2022 was as follows (in thousands):
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Summary of Significant Accounting Policies (Details) |
6 Months Ended |
---|---|
Jun. 30, 2023
practice_group
| |
Accounting Policies [Abstract] | |
Number of practice groups | 3 |
Accounts Receivable, Net - Schedule of Accounts Receivables Net (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Receivables [Abstract] | |||
Trade accounts receivable | $ 336,566 | $ 267,409 | |
Unbilled revenue, at net realizable value | 143,234 | 87,890 | |
Total accounts receivable | 479,800 | 355,299 | |
Allowance for doubtful accounts | (23,403) | (20,801) | $ (16,158) |
Accounts receivable, net | $ 456,397 | $ 334,498 |
Accounts Receivable, Net - Schedule of Changes in the Allowance for Doubtful Accounts on Accounts Receivable (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2023 |
Dec. 31, 2022 |
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Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of period | $ (20,801) | $ (16,158) |
Provision | (5,507) | (13,545) |
Charge-offs, net of recoveries | 2,905 | 8,902 |
Allowance for doubtful accounts | $ (23,403) | $ (20,801) |
Debt and Financing Arrangements - Additional Information (Details) - USD ($) |
Jun. 30, 2023 |
Dec. 31, 2022 |
May 04, 2022 |
May 03, 2022 |
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Outstanding balance under applicable credit facility | $ 410,600,000 | $ 265,700,000 | ||
Outstanding letters of credit | 4,400,000 | 5,000,000 | ||
Other line of credit | ||||
Debt Instrument [Line Items] | ||||
Revolving loan commitment | 20,000,000 | |||
Outstanding line of credit | 0 | |||
2022 Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Revolving loan commitment | $ 600,000,000 | $ 400,000,000 | ||
Revolving loan, accordion feature | 200,000,000 | |||
Outstanding balance under applicable credit facility | 410,600,000 | $ 265,700,000 | ||
Available funds under credit facility | 177,500,000 | |||
Outstanding letters of credit | $ 4,400,000 | |||
2022 Credit Facility | Swing Line Facility | ||||
Debt Instrument [Line Items] | ||||
Revolving loan commitment | $ 50,000,000 | $ 25,000,000 |
Debt and Financing Arrangements - Summary of Unsecured Credit Facility (Details) - 2018 and 2022 Credit Facilities |
Jun. 30, 2023 |
Jun. 30, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Weighted average rates | 4.94% | 1.93% |
Minimum | ||
Debt Instrument [Line Items] | ||
Range of effective rates | 1.93% | 1.08% |
Maximum | ||
Debt Instrument [Line Items] | ||
Range of effective rates | 8.00% | 3.67% |
Debt and Financing Arrangements - Summary of Recognized Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Debt Instrument [Line Items] | ||||
Total | $ 5,534 | $ 1,645 | $ 9,175 | $ 2,904 |
Credit facilities | ||||
Debt Instrument [Line Items] | ||||
Total | 5,498 | 1,644 | 9,138 | 2,903 |
Other line of credit | ||||
Debt Instrument [Line Items] | ||||
Total | 0 | 1 | 0 | 1 |
Other | ||||
Debt Instrument [Line Items] | ||||
Total | $ 36 | $ 0 | $ 37 | $ 0 |
Commitments and Contingencies - Letters of Credit and Guarantees (Details) - USD ($) $ in Millions |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Letters of credit outstanding | $ 4.4 | $ 5.0 |
License bonds outstanding amount | $ 2.3 | $ 2.3 |
Commitments and Contingencies - Legal Proceedings (Details) - CBIZ Operations and a former employee of CBIZ MMP $ in Millions |
Dec. 19, 2016
USD ($)
|
---|---|
Commitments And Contingencies [Line Items] | |
Total transaction price | $ 200.0 |
Maximum | |
Commitments And Contingencies [Line Items] | |
Damages sought amount | $ 177.0 |
Financial Instruments - Summary of Investments (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2023 |
Dec. 31, 2022 |
|
Debt Securities, Available for Sale [Roll Forward] | ||
Fair value at beginning of period | $ 43,485 | $ 38,670 |
Purchases | 0 | 19,771 |
Redemptions | (2,310) | (5,630) |
Maturities | (880) | (6,770) |
Change in bond premium | (385) | (645) |
Fair market value adjustment | 473 | (1,911) |
Fair value at end of period | $ 40,383 | $ 43,485 |
Financial Instruments - Summary of Effects of Interest Rate Swaps (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Derivatives, Fair Value [Line Items] | ||||
Gain Recognized in AOCI, net of tax | $ 1,383 | $ 705 | $ (5) | $ 3,571 |
Interest rate swap | ||||
Derivatives, Fair Value [Line Items] | ||||
Gain Recognized in AOCI, net of tax | 2,187 | 587 | 1,472 | 3,194 |
Gain (Loss) Reclassified from AOCI into Expense | $ 1,073 | $ (155) | $ 1,970 | $ (498) |
Fair Value Measurements - Change in Level 3 Fair Values of Contingent Purchase Price Liabilities (Details) - Contingent purchase price liabilities - Level 3 - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance – December 31 | $ (132,010) | $ (79,139) |
Additions from business acquisitions | (30,317) | (64,648) |
Settlement of contingent purchase price liabilities | 33,307 | 8,830 |
Change in fair value of contingencies | (15) | 117 |
Change in net present value of contingencies | (1,430) | (1,595) |
Ending balance - June 30 | $ (130,465) | $ (136,435) |
Other Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Equity [Abstract] | ||||
Net unrealized gain (loss) on available-for-sale securities, net of income taxes | $ 159 | $ (218) | $ 338 | $ (1,157) |
Net unrealized gain (loss) on interest rate swaps, net of income taxes | 1,383 | 705 | (5) | 3,571 |
Foreign currency translation | (5) | (7) | (9) | (9) |
Total other comprehensive income | 1,537 | 480 | 324 | 2,405 |
Unrealized gain (loss) on available-for-sale securities, income tax expense (benefit) | 64 | (81) | 135 | (433) |
Unrealized gain (loss) on interest rate swaps, income tax (benefit) expense | $ 449 | $ 250 | $ (14) | $ 1,178 |
Employee Stock Plans - Additional Information (Details) - shares shares in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
May 10, 2023 |
|
Performance share units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation arrangement by share-based payment award, remaining contractual term | 3 years | |
Performance share units, vesting period | 3 years | |
Achievement of an earnings per share target | 70.00% | |
Achievement of total growth in revenue | 30.00% | |
Performance share units | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of initial grant | 200.00% | |
2019 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Additional shares authorized for issuance (in shares) | 1.5 | |
Maximum stock based compensation awards granted under the plan (in shares) | 4.6 |
Employee Stock Plans - Schedule of Stock-Based Compensation Awards (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Share-Based Payment Arrangement [Abstract] | ||||
Stock options | $ 0 | $ 75 | $ 768 | $ 248 |
Restricted stock units and awards | 1,355 | 1,334 | 2,614 | 2,827 |
Performance share units | 1,433 | 1,330 | 3,237 | 3,353 |
Total stock-based compensation expense | $ 2,788 | $ 2,739 | $ 6,619 | $ 6,428 |
Employee Stock Plans - Schedule of Stock Options Award Activity (Details) - $ / shares shares in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2023 | |
Stock Option Activity | |
Outstanding at beginning of period (in shares) | 553 |
Granted (in shares) | 50 |
Exercised or released (in shares) | (221) |
Outstanding at end of period (in shares) | 382 |
Exercisable at end of period (in shares) | 382 |
Stock Option Weighted Average Exercise Price Per Share | |
Outstanding at beginning of period (in dollars per share) | $ 21.03 |
Granted (in dollars per share) | 48.40 |
Exercised or released (in dollars per share) | 19.24 |
Outstanding at end of period (in dollars per share) | 25.64 |
Exercisable at end of period (in dollars per share) | $ 25.64 |
Employee Stock Plans - Schedule of Restricted Stock Units and Awards Activity (Details) shares in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2023
$ / shares
shares
| |
Restricted Stock Units Award Activity | |
Exercisable at end of period (in shares) | shares | 382 |
Restricted Stock Units and Awards Weighted Average Grant Date Fair Value | |
Exercisable at end of period (in dollars per share) | $ / shares | $ 25.64 |
Restricted Stock Units and Awards | |
Restricted Stock Units Award Activity | |
Outstanding at beginning of period (in shares) | shares | 277 |
Granted (in shares) | shares | 109 |
Exercised or released (in shares) | shares | (154) |
Outstanding at end of period (in shares) | shares | 232 |
Restricted Stock Units and Awards Weighted Average Grant Date Fair Value | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 32.62 |
Granted (in dollars per share) | $ / shares | 48.64 |
Exercised or released (in dollars per share) | $ / shares | 31.25 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 41.09 |
Employee Stock Plans - Schedule of Fair Value Option Award Weighted Average Assumptions Used (Details) - $ / shares |
6 Months Ended | |
---|---|---|
Feb. 08, 2023 |
Jun. 30, 2023 |
|
Share-Based Payment Arrangement [Abstract] | ||
Fair value of stock options granted (in dollars per share) | $ 15.35 | |
Expected volatility | 28.57% | |
Expected option life (years) | 4 years 8 months 26 days | |
Risk-free interest rate | 3.89% | |
Expected dividend yield | 0.00% |
Employee Stock Plans - Schedule of Performance Share Units Activity (Details) - Performance share units shares in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2023
$ / shares
shares
| |
Performance Share Units | |
Outstanding at beginning of period (in shares) | shares | 482 |
Granted (in shares) | shares | 88 |
Vested (in shares) | shares | (244) |
Outstanding at end of period (in shares) | shares | 326 |
Performance Share Units Award Weighted Average Grant Date Fair Value | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 28.84 |
Granted (in dollars per share) | $ / shares | 48.40 |
Vested (in dollars per share) | $ / shares | 25.75 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 36.46 |
Business Combinations - Additional Information (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2023
USD ($)
| |
Business Acquisition, Contingent Consideration [Line Items] | |
Annual revenue | $ 64.4 |
Transaction and integration related costs | $ 2.5 |
Client list | |
Business Acquisition, Contingent Consideration [Line Items] | |
Acquired finite-lived intangible assets, useful life | 10 years |
Other intangibles | |
Business Acquisition, Contingent Consideration [Line Items] | |
Acquired finite-lived intangible assets, useful life | 3 years |
Business Combinations - Segment Allocation (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Jun. 30, 2022 |
---|---|---|
Financial Services | ||
Business Combination Segment Allocation [Line Items] | ||
Goodwill | $ 41,031 | $ 67,506 |
Total | 74,536 | 116,506 |
Financial Services | Client list | ||
Business Combination Segment Allocation [Line Items] | ||
Intangibles | 33,487 | 49,000 |
Financial Services | Other intangibles | ||
Business Combination Segment Allocation [Line Items] | ||
Intangibles | 18 | 0 |
Benefits and Insurance Services | ||
Business Combination Segment Allocation [Line Items] | ||
Goodwill | 0 | 0 |
Total | 0 | 0 |
Benefits and Insurance Services | Client list | ||
Business Combination Segment Allocation [Line Items] | ||
Intangibles | 0 | 0 |
Benefits and Insurance Services | Other intangibles | ||
Business Combination Segment Allocation [Line Items] | ||
Intangibles | $ 0 | $ 0 |
Business Combinations - Changes in Contingent Purchase Price Consideration (Details) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Business Combination and Asset Acquisition [Abstract] | ||||
Net expense | $ 815 | $ 836 | $ 1,445 | $ 1,478 |
Cash settlement paid | $ 1,373 | $ 1,045 | $ 29,808 | $ 8,122 |
Shares issued (number) | 4 | 0 | 75 | 19 |
Segment Disclosures - Additional Information (Details) |
6 Months Ended |
---|---|
Jun. 30, 2023
segment
| |
Segment Reporting [Abstract] | |
Number of business units of the company | 3 |
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