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FIRST-QUARTER HIGHLIGHTS:
CLEVELAND, April 27, 2023 /PRNewswire/ -- CBIZ, Inc., (NYSE: CBZ) ("CBIZ" or the "Company"), a leading provider of financial, insurance and advisory services, today announced results for the first quarter ended March 31, 2023.
For the 2023 first quarter, CBIZ recorded revenue of $454.6 million, an increase of $62.9 million, or 16.1%, compared with $391.7 million reported for the same period in 2022. Acquired operations, net of divestitures, contributed $23.6 million, or 6.1%, to revenue growth. Same-unit revenue increased by $39.3 million, or 10.0%, for the quarter, compared with the same period a year ago. Net income was $73.2 million, or $1.44 per diluted share, compared with $58.1 million, or $1.10 per diluted share, for the same period a year ago.
Excluding non-recurring transaction and first-year integration expenses related to the acquisition of Marks Paneth in January 2022, and expenses related to the acquisition of Somerset in February 2023, Adjusted net income was $74.3 million in the first quarter of 2023 compared with Adjusted net income of $62.6 million for the same period a year ago. Adjusted earnings per share was $1.46, an increase of 23.7% compared with Adjusted earnings per share of $1.18 for the same period a year ago. Adjusted EBITDA for the first quarter was $113.3 million, up 22.0% compared with $92.9 million for the same period in 2022.
Schedules reconciling Adjusted net income, Adjusted earnings per share and Adjusted EBITDA to the most directly comparable GAAP measures can be found in the tables included in this release.
During the three months ended March 31, 2023, the Company repurchased approximately 0.4 million shares of its common stock on the open market. Between April 1, 2023 and April 26, 2023, the Company repurchased an additional 0.2 million shares. The balance outstanding on the Company's unsecured credit facility on March 31, 2023, was $403.7 million with $190.0 million of unused borrowing capacity.
Jerry Grisko, CBIZ President and Chief Executive Officer, said, "With same unit revenue up 10.0% and total revenue up 16.1%, we are pleased that our strong performance in 2022 has continued into the first quarter of 2023. With this encouraging start to our year, we would expect our full-year results to come in at the high-end of the guidance that we provided in February of this year."
"We are also pleased to bring another outstanding accounting firm to our CBIZ team with the acquisition of the non-attest assets of Somerset CPAs and Advisors which closed effective February 1 of this year. Although they have only been with us for a short time, Somerset is performing in line with expectations and was a meaningful contributor to strong first quarter results. We continue to have a healthy pipeline of acquisition candidates and access to sufficient funds to pursue those opportunities," Grisko concluded.
2023 Outlook
Conference Call
CBIZ will host a conference call at 11:00 a.m. (ET) today to discuss its results. The call will be webcast and an archived replay will be available at https://cbiz.gcs-web.com/investor-overview. Participants may register at https://dpregister.com/sreg/10177806/f911fa5dfc.
About CBIZ
CBIZ is a leading provider of financial, insurance and advisory services to businesses throughout the United States. Financial services include accounting, tax, government health care consulting, transaction advisory, risk advisory, and valuation services. Insurance services include employee benefits consulting, retirement plan consulting, property and casualty insurance, payroll, and human capital consulting. With more than 120 offices in 33 states, CBIZ is one of the largest accounting and insurance brokerage providers in the U.S. For more information, visit www.cbiz.com.
Forward-Looking Statements
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include, but are not limited to, the risk that the anticipated benefits and perceived advantages of an acquisition may not be achieved; the impact of COVID-19 or governmental rules related to public health issues on the Company's business, operations and clients; the Company's ability to adequately manage and sustain its growth; the Company's dependence on the trend of outsourcing business services; the Company's dependence on the services of its CEO, other key employees, producers and service personnel; the effects of any potential cyber-attacks; competitive pricing pressures; general business and economic conditions; and changes in governmental laws or regulation affecting the Company's clients, business, business services operations, or business models. A more detailed description of such risks and uncertainties may be found in the Company's filings with the Securities and Exchange Commission at www.sec.gov.
CBIZ, INC. FINANCIAL HIGHLIGHTS (UNAUDITED) THREE MONTHS ENDED MARCH 31, 2023 AND 2022 (In thousands, except percentages and per share data) | ||||||||
Three Months Ended March 31, | ||||||||
2023 | % | 2022 | % | |||||
Revenue | $ 454,606 | 100.0 % | $ 391,722 | 100.0 % | ||||
Operating expenses (1) | 341,011 | 75.0 | 290,299 | 74.1 | ||||
Gross margin | 113,595 | 25.0 | 101,423 | 25.9 | ||||
Corporate general and administrative expenses (1) | 15,598 | 3.4 | 16,309 | 4.2 | ||||
Operating income | 97,997 | 21.6 | 85,114 | 21.7 | ||||
Other income (expense): | ||||||||
Interest expense | (3,641) | (0.8) | (1,259) | (0.3) | ||||
Gain on sale of operations, net | 99 | — | — | — | ||||
Other income (expense), net (1) (2) | 5,112 | 1.1 | (6,407) | (1.6) | ||||
Total other income (expense), net | 1,570 | 0.3 | (7,666) | (1.9) | ||||
Income before income tax expense | 99,567 | 21.9 | 77,448 | 19.8 | ||||
Income tax expense | 26,407 | 19,321 | ||||||
Net income | $ 73,160 | 16.1 % | $ 58,127 | 14.8 % | ||||
Diluted earnings per share | $ 1.44 | $ 1.10 | ||||||
Diluted weighted average common shares outstanding | 50,762 | 52,955 | ||||||
Other data: | ||||||||
Adjusted EBITDA (3) | $ 113,348 | $ 92,892 | ||||||
Adjusted EPS (3) | $ 1.46 | $ 1.18 | ||||||
(1) CBIZ sponsors a deferred compensation plan, under which a CBIZ employee's compensation deferral is held in a rabbi trust and invested accordingly as | ||||||||
Income and expenses related to the deferred compensation plan for the three months ended March 31, 2023, and 2022 are as follows (in thousands): | ||||||||
Three Months Ended March 31, | ||||||||
2023 | % of Revenue | 2022 | % of Revenue | |||||
Operating expenses (income) | $ 4,760 | 1.0 % | $ (5,667) | (1.4) % | ||||
Corporate general and administrative expense (income) | 642 | 0.1 % | (811) | (0.2) % | ||||
Other income (expense), net | 5,402 | 1.2 % | (6,478) | (1.7) % |
Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the three months ended March 31, | |||||||||||||||
Three Months Ended March 31, | |||||||||||||||
2023 | 2022 | ||||||||||||||
As | Deferred | Adjusted | % of | As | Deferred | Adjusted | % of | ||||||||
Gross margin | $ 113,595 | $ 4,760 | $ 118,355 | 26.0 % | $ 101,423 | $ (5,667) | $ 95,756 | 24.4 % | |||||||
Operating income | 97,997 | 5,402 | 103,399 | 22.7 % | 85,114 | (6,478) | 78,636 | 20.1 % | |||||||
Other income (expense), net | 5,112 | (5,402) | (290) | (0.1) % | (6,407) | 6,478 | 71 | — % | |||||||
Income before income tax expense | 99,567 | — | 99,567 | 21.9 % | 77,448 | — | 77,448 | 19.8 % | |||||||
(2) Included in "Other income (expense), net" for the three months ended March 31, 2023 and 2022, is expense of $0.6 million and $0.6 million, respectively, related to net | |||||||||||||||
(3) Refer to the financial highlights tables for a reconciliation of Non-GAAP financial measures to the most directly comparable GAAP financial measure, and for additional |
CBIZ, INC. FINANCIAL HIGHLIGHTS (UNAUDITED) (In thousands) SELECT SEGMENT DATA | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Revenue | ||||||||||||||
Financial Services | $ 343,086 | $ 288,746 | ||||||||||||
Benefits and Insurance Services | 100,054 | 92,486 | ||||||||||||
National Practices | 11,466 | 10,490 | ||||||||||||
Total | $ 454,606 | $ 391,722 | ||||||||||||
Gross Margin | ||||||||||||||
Financial Services | $ 98,643 | $ 78,946 | ||||||||||||
Benefits and Insurance Services | 23,131 | 19,829 | ||||||||||||
National Practices | 883 | 914 | ||||||||||||
Operating expenses - unallocated (1): | ||||||||||||||
Other expense | (4,302) | (3,933) | ||||||||||||
Deferred compensation | (4,760) | 5,667 | ||||||||||||
Total | $ 113,595 | $ 101,423 |
(1) Represents operating expenses not directly allocated to individual businesses, including stock-based compensation, |
CBIZ, INC. SELECT CASH FLOW DATA (UNAUDITED) (In thousands) | ||||
Three Months Ended March 31, | ||||
2023 | 2022 | |||
Net income | $ 73,160 | $ 58,127 | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Depreciation and amortization expense | 8,625 | 8,173 | ||
Gain on sale of operations, net | (99) | — | ||
Bad debt expense, net of recoveries | 461 | 549 | ||
Adjustments to contingent earnout liability, net | 630 | 642 | ||
Stock-based compensation expense | 3,831 | 3,689 | ||
Other noncash adjustments | 2,749 | 2,992 | ||
Net income, after adjustments to reconcile net income to net cash provided by operating activities | 89,357 | 74,172 | ||
Changes in assets and liabilities, net of acquisitions and divestitures | (133,868) | (125,062) | ||
Net cash used in operating activities | (44,511) | (50,890) | ||
Net cash used in investing activities | (45,896) | (81,531) | ||
Net cash provided by financing activities | 61,778 | 170,446 | ||
Net (decrease) increase in cash, cash equivalents and restricted cash | (28,629) | 38,025 | ||
Cash, cash equivalents and restricted cash at beginning of year | $ 160,145 | $ 150,474 | ||
Cash, cash equivalents and restricted cash at end of period | $ 131,516 | $ 188,499 | ||
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheet: | ||||
Cash and cash equivalents | $ 2,265 | $ 558 | ||
Restricted cash | 25,109 | 33,394 | ||
Cash equivalents included in funds held for clients | 104,142 | 154,547 | ||
Total cash, cash equivalents and restricted cash | $ 131,516 | $ 188,499 |
CBIZ, INC. SELECT FINANCIAL DATA AND RATIOS (UNAUDITED) (In thousands) | ||||
March 31, 2023 | December 31, 2022 | |||
Cash and cash equivalents | 2,265 | 4,697 | ||
Restricted cash | 25,109 | 28,487 | ||
Accounts receivable, net | 442,781 | 334,498 | ||
Current assets before funds held for clients | 501,617 | 397,113 | ||
Funds held for clients | 148,240 | 171,313 | ||
Goodwill and other intangible assets, net | 1,005,873 | 951,702 | ||
Total assets | 2,038,196 | 1,879,124 | ||
Current liabilities before client fund obligations | 310,942 | 338,940 | ||
Client fund obligations | 150,216 | 173,467 | ||
Total long-term debt, net | 401,772 | 263,654 | ||
Total liabilities | 1,266,266 | 1,165,672 | ||
Treasury stock | (853,793) | (824,778) | ||
Total stockholders' equity | 771,930 | 713,452 | ||
Debt to equity | 52.0 % | 37.0 % | ||
Days sales outstanding (DSO) (1) | 94 | 74 | ||
Shares outstanding | 50,312 | 50,180 | ||
Basic weighted average common shares outstanding | 50,367 | 51,502 | ||
Diluted weighted average common shares outstanding | 50,762 | 52,388 | ||
(1) DSO is provided for continuing operations and represents accounts receivable, net, at the end of the period, divided by trailing twelve month daily revenue. |
CBIZ, INC. GAAP RECONCILIATION Net Income and Diluted Earnings Per Share ("EPS") to Adjusted Net Income, EPS and EBITDA(1) (In thousands, except per share data) | |||||||
Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | ||||||
Amounts | EPS | Amounts | EPS | ||||
Net income | $ 73,160 | $ 1.44 | $ 58,127 | $ 1.10 | |||
Adjustments: | |||||||
Transaction costs related to acquisitions (2) | 611 | 0.01 | 1,329 | 0.03 | |||
Integration & retention costs related to acquisitions (2) | 1,003 | 0.02 | 4,684 | 0.09 | |||
Income tax effect related to adjustments | (428) | (0.01) | (1,500) | (0.04) | |||
Adjusted net income | $ 74,346 | $ 1.46 | $ 62,640 | $ 1.18 | |||
Interest expense | $ 3,641 | $ 1,259 | |||||
Income tax expense | 26,407 | 19,321 | |||||
Gain on sale of operations, net | (99) | — | |||||
Tax effect related to the adjustments above | 428 | 1,500 | |||||
Depreciation | 2,975 | 2,779 | |||||
Amortization | 5,650 | 5,394 | |||||
Adjusted EBITDA | $ 113,348 | $ 92,893 | |||||
(1) CBIZ reports its financial results in accordance with GAAP. This table reconciles Adjusted net income, Adjusted EPS and Adjusted EBITDA to the most directly | |||||||
(2) These costs include, but are not limited to, certain consulting, technology, personnel, as well as other first year operating and general administrative costs that are |
CBIZ, INC. GAAP RECONCILIATION Full Year 2023 Net Income and Diluted Earnings Per Share ("EPS") to Adjusted Net Income, EPS and EBITDA Guidance (Amount in millions, except per share data) | |||||||
Full Year 2023 Guidance | |||||||
Low | High | ||||||
Amount | Per Share | Amount | Per Share | ||||
Net income | $ 121.1 | $ 2.31 | $ 123.2 | $ 2.36 | |||
Transaction and integration costs related to Somerset (1) | 3.6 | 0.07 | 3.6 | 0.07 | |||
Income tax effect related to adjustments | (1.0) | $ (0.02) | (1.0) | $ (0.02) | |||
Adjusted net income | $ 123.7 | $ 2.36 | $ 125.8 | $ 2.41 | |||
Interest expense | $ 20.8 | $ 20.8 | |||||
Income tax expense | 47.2 | 47.2 | |||||
Tax effect related to the adjustments above | 1.0 | 1.0 | |||||
Depreciation and amortization | 35.9 | 35.9 | |||||
Adjusted EBITDA | $ 228.6 | $ 230.7 | |||||
GAAP diluted EPS for 2022 | $ 2.01 | $ 2.01 | |||||
Adjusted diluted EPS for 2022 (2) | $ 2.13 | $ 2.13 | |||||
GAAP diluted EPS range | 15 % | 17 % | |||||
Adjusted diluted EPS range | 11 % | 13 % | |||||
GAAP Net income for 2022 | $ 105.4 | $ 105.4 | |||||
GAAP Net income range | 15 % | 17 % | |||||
(1) Includes estimated integration costs related to the Somerset acquisition. Such costs include, but are not limited to, certain consulting, technology, personnel, as well as | |||||||
(2) A reconciliation between net income and adjusted net income and a reconciliation between GAAP diluted EPS and Adjusted diluted EPS for fiscal year ended | |||||||
Year Ended December 31, 2022 | |||||||
In millions | EPS | ||||||
Net income | $ 105.4 | $ 2.01 | |||||
Adjustments: | |||||||
Gain on sale of assets, net | (2.4) | (0.05) | |||||
Transaction costs related to Marks Paneth | 1.3 | 0.03 | |||||
Integration and retention costs related to Marks Paneth | 9.2 | 0.18 | |||||
Income tax effect related to adjustments | (2.1) | (0.04) | |||||
Adjusted net income | $ 111.4 | $ 2.13 |
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SOURCE CBIZ, Inc.