CBIZ Reports Third Quarter And Nine Months 2012 Results Third Quarter Revenue up 3.6%; Nine Months Revenue up 3.9%

Third Quarter Diluted EPS from Continuing Operations of $0.11 vs. $0.10 a year ago

Nine Months Diluted EPS from Continuing Operations of $0.61 vs. $0.60 in prior year

CLEVELAND, Oct. 25, 2012 /PRNewswire/ -- CBIZ, Inc. (NYSE: CBZ) today announced results for the third quarter and nine months ended September 30, 2012. 

CBIZ reported revenue of $183.8 million for the third quarter ended September 30, 2012, an increase of 3.6% over the $177.3 million recorded for the third quarter of 2011.  Revenue from newly acquired operations contributed $5.1 million to revenue growth in the third quarter compared with the same period a year ago.  Same-unit revenue increased by 0.8%, or $1.4 million in the third quarter, compared to the same period a year ago.  CBIZ reported income from continuing operations for the quarter of $5.3 million, or $0.11 per diluted share, compared with $4.8 million, or $0.10 per diluted share in the third quarter of 2011. 

For the nine-month period ended September 30, 2012, CBIZ reported revenue of $593.2 million, an increase of 3.9% over the $570.9 million recorded for the comparable nine-month period a year ago.  Same-unit revenue increased by 0.3%, or $1.6 million for the first nine months of 2012 compared to the same period a year ago.  Acquisitions contributed $20.7 million to revenue growth for the first nine months of 2012.  Income from continuing operations was $29.9 million for the first nine months of 2012, or $0.61 per diluted share, compared with $29.8 million for the first nine months of 2011, or $0.60 per diluted share.

Cash earnings per share from continuing operations, a non-GAAP measure that includes the impact of major non-cash charges and credits to earnings, was $0.26 per diluted share for the third quarter 2012, compared to $0.24 for the third quarter a year ago, and was $1.05 per diluted share for the first nine months of 2012, compared with $1.02 for the first nine months a year ago. Adjusted EBITDA for the quarter was $17.0 million and for the nine months ended September 30, 2012, adjusted EBITDA was $74.7 million.  The calculations for these items are outlined in the schedules attached. 

At September 30, 2012, the amount outstanding on the Company's $275.0 million unsecured credit facility was $146.0 million compared with $145.0 million at December 31, 2011. The Company used $31.7 million of funds for acquisition-related and earn out payments and $5.0 million to repurchase 874 thousand shares of its outstanding stock in the first nine months of 2012. 

Steven L. Gerard, CBIZ Chairman and CEO stated, "We are pleased to report 3.9% total revenue growth for the first nine months led by 6.3% revenue growth within our core Financial and Employee Services Groups.  Same-unit revenue trends within our core Financial Services and Employee Services groups continue to improve, with combined same-unit revenue up 1.6% for the first nine months of 2012.  As expected, our Medical Management Professionals group continues to face challenges with lower reimbursement rates, and revenue within this group has declined this year which is having a negative impact on our total revenue and margins.

"Including the two transactions announced in early October, we have completed seven acquisitions to date this year, and we are pleased with the contribution of these new operations.  Our pipeline of acquisition opportunities continues to be strong, and we have the financial flexibility to address these future opportunities.  At this point, we continue to expect to achieve our target of revenue growth of 3% - 4% for the full year of 2012 with 6% - 8% growth in diluted earnings per share compared with the $0.58 reported for 2011," continued Mr. Gerard. 

CBIZ will host a conference call later this morning to discuss its results.  The call will be webcast in a listen-only mode over the Internet for the media and the public, and can be accessed at www.cbiz.com. Investors and analysts can participate in the conference call by dialing 1-877-889-2795 several minutes before 11:00 a.m. (ET).  If you are dialing from outside the United States, dial 1-630-343-1248.  A replay of the call will be available starting at 1:00 p.m. (ET) October 25, through midnight (ET), October 27, 2012. The dial-in number for the replay is 1-866-873-8511.  If you are listening from outside the United States, dial 1-630-343-1245.  The access code for the replay is 102512.  A replay of the webcast will also be available on the Company's web site at www.cbiz.com.

CBIZ, Inc. provides professional business services that help clients better manage their finances and employees.  CBIZ provides its clients with financial services including accounting, tax and consulting, internal audit, merger and acquisition advisory, and valuation services.  Employee services include employee benefits consulting, property and casualty insurance, retirement plan consulting, payroll, life insurance, HR consulting, and executive recruitment.  CBIZ also provides outsourced technology staffing and support services, real estate consulting services, healthcare consulting, and medical practice management. As one of the largest benefits specialists and one of the largest accounting, valuation, and medical practice management companies in the United States, the Company's services are provided through more than 130 Company offices in 37 states.

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected.  Such risks and uncertainties include, but are not limited to, the Company's ability to adequately manage its growth; the Company's dependence on the current trend of outsourcing business services; the Company's dependence on the services of its CEO and other key employees; competitive pricing pressures; general business and economic conditions; and changes in governmental regulation and tax laws affecting its insurance business or its business services operations.  A more detailed description of such risks and uncertainties may be found in the Company's filings with the Securities and Exchange Commission.

For further information regarding CBIZ, call our Investor Relations Office at (216) 447-9000 or visit our web site at www.cbiz.com.

CBIZ, INC.

FINANCIAL HIGHLIGHTS (UNAUDITED)

THREE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

(In thousands, except percentages and per share data) 
































 THREE MONTHS ENDED 






 SEPTEMBER 30, 
































2012


%



2011 (1)


%














Revenue


$

183,800


100.0%


$

177,349


100.0%














Operating expenses (2)



167,146


90.9%



154,345


87.0%














Gross margin



16,654


9.1%



23,004


13.0%














Corporate general and administrative expenses (3)



7,625


4.2%



8,079


4.6%














Operating income



9,029


4.9%



14,925


8.4%














Other income (expense): 












Interest expense



(3,884)


-2.1%



(4,049)


-2.3%


Gain on sale of operations, net



21


0.0%



87


0.0%


Other income (expense), net (4) (5)



2,570


1.4%



(4,510)


-2.5%



     Total other expense, net



(1,293)


-0.7%



(8,472)


-4.8%














Income from continuing operations before income tax expense



7,736


4.2%



6,453


3.6%














Income tax expense



2,458





1,614
















Income from continuing operations



5,278


2.9%



4,839


2.7%














Loss from operations of discontinued businesses, net of tax



(3)





(46)



Gain (loss) on disposal of discontinued businesses, net of tax



32





(76)
















Net income


$

5,307


2.9%


$

4,717


2.7%














Diluted earnings (loss) per share:












Continuing operations


$

0.11




$

0.10




Discontinued operations



-





(0.01)




Net income


$

0.11




$

0.09

















Diluted weighted average common shares outstanding



49,109





49,920



























Other data from continuing operations:











Adjusted EBIT (6)


$

11,599




$

10,415



Adjusted EBITDA (6) 


$

16,975




$

15,522





























(1)

Certain amounts in the 2011 financial data have been reclassified to conform to the current year presentation. 














(2)

Includes an expense of $1,504 and a benefit of $3,904 for the three months ended September 30, 2012 and 2011, respectively, in compensation expense associated with gains and losses from the Company's deferred compensation plan (see note 4). Excluding this item, "operating expenses" would be $165,642 and $158,249, or 90.1% and 89.2% of revenue, for the three months ended September 30, 2012 and 2011, respectively.














(3)

Includes an expense of $206 and a benefit of $456 for the three months ended September 30, 2012 and 2011, respectively, in compensation expense associated with gains and losses from the Company's deferred compensation plan (see note 4). Excluding this item, "corporate general and administrative expenses" would be $7,419 and $8,535, or 4.0% and 4.8% of revenue, for the three months ended September 30, 2012 and 2011, respectively.














(4)

Includes a net gain of $1,710 and a net loss of $4,360 for the three months ended September 30, 2012 and 2011, respectively, attributable to assets held in the Company's deferred compensation plan. Excluding this item, "other income (expense), net" would be $860 and $(150), or 0.5% and (0.1)% of revenue, for the three months ended September 30, 2012 and 2011, respectively. These net gains or losses do not impact "income from continuing operations before income tax expense" as they are directly offset by compensation adjustments included in "operating expenses" and "corporate general and administrative expenses."














(5)

For the three months ended September 30, 2012, amount includes income of $200 related to net decreases in the fair value of contingent consideration related to CBIZ's prior acquisitions.














(6)

Adjusted EBIT represents income from continuing operations before income taxes, interest expense, and gain on sale of operations, net. Adjusted EBITDA represents Adjusted EBIT before depreciation and amortization expense of $5,376 and $5,107 for the three months ended September 30, 2012 and 2011, respectively. The Company has included Adjusted EBIT and Adjusted EBITDA data because such data is commonly used as a performance measure by analysts and investors and as a measure of the Company's ability to service debt. Adjusted EBIT and Adjusted EBITDA should not be regarded as an alternative or replacement to any measurement of performance under generally accepted accounting principles.

 

CBIZ, INC.

FINANCIAL HIGHLIGHTS (UNAUDITED)

NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

(In thousands, except percentages and per share data) 
































 NINE MONTHS ENDED 






 SEPTEMBER 30, 
































2012


%



2011 (1)


%














Revenue


$

593,233


100.0%


$

570,882


100.0%














Operating expenses (2)



513,842


86.6%



484,467


84.9%














Gross margin



79,391


13.4%



86,415


15.1%














Corporate general and administrative expenses (3)



25,807


4.4%



24,383


4.2%














Operating income



53,584


9.0%



62,032


10.9%














Other income (expense): 












Interest expense



(12,152)


-2.0%



(13,371)


-2.3%


Gain on sale of operations, net



2,660


0.4%



2,832


0.5%


Other income (expense), net (4) (5)



5,168


0.9%



(1,402)


-0.3%



     Total other expense, net



(4,324)


-0.7%



(11,941)


-2.1%














Income from continuing operations before income tax expense



49,260


8.3%



50,091


8.8%














Income tax expense



19,386





20,296
















Income from continuing operations



29,874


5.0%



29,795


5.2%














Loss from operations of discontinued businesses, net of tax



(6)





(616)



Gain (loss) on disposal of discontinued businesses, net of tax



72





(6)
















Net income


$

29,940


5.0%


$

29,173


5.1%














Diluted earnings (loss) per share:












Continuing operations


$

0.61




$

0.60




Discontinued operations



-





(0.02)




Net income


$

0.61




$

0.58

















Diluted weighted average common shares outstanding



49,278





49,932



























Other data from continuing operations:











Adjusted EBIT (6)


$

58,752




$

60,630



Adjusted EBITDA (6) 


$

74,662




$

75,732
















(1)

Certain amounts in the 2011 financial data have been reclassified to conform to the current year presentation.














(2)

Includes an expense of $3,339 and a benefit of $2,403 for the nine months ended September 30, 2012 and 2011, respectively, in compensation expense associated with gains and losses from the Company's deferred compensation plan (see note 4).  Excluding this item, "operating expenses" would be $510,503 and $486,870, or 86.1% and 85.3% of revenue, for the nine months ended September 30, 2012 and 2011, respectively.














(3)

Includes an expense of $484 and a benefit of $272 for the nine months ended September 30, 2012 and 2011, respectively, in compensation expense associated with gains and losses from the Company's deferred compensation plan (see note 4).  Excluding this item, "corporate general and administrative expenses" would be $25,323 and $24,655, or 4.3% and 4.3% of revenue, for the nine months ended September 30, 2012 and 2011, respectively.














(4)

Includes a net gain of $3,823 and a net loss of $2,675 for the nine months ended September 30, 2012 and 2011, respectively, attributable to assets held in the Company's deferred compensation plan. Excluding this item, "other income (expense), net" would be $1,345 and $1,273, or 0.2% and 0.2% of revenue, for the nine months ended September 30, 2012 and 2011, respectively. These net gains and losses do not impact "income from continuing operations before income tax expense" as they are directly offset by compensation adjustments included in "operating expenses" and "corporate general and administrative expenses."














(5)

For the nine months ended September 30, 2012 and 2011, amount includes income of $303 and $1,152, respectively, related to net decreases in the fair value of contingent consideration related to CBIZ's prior acquisitions.














(6)

Adjusted EBIT represents income from continuing operations before income taxes, interest expense, and gain on sale of operations, net. Adjusted EBITDA represents Adjusted EBIT before depreciation and amortization expense of $15,910 and $15,102 for the nine months ended September 30, 2012 and 2011, respectively. The Company has included Adjusted EBIT and Adjusted EBITDA data because such data is commonly used as a performance measure by analysts and investors and as a measure of the Company's ability to service debt. Adjusted EBIT and Adjusted EBITDA should not be regarded as an alternative or replacement to any measurement of performance under generally accepted accounting principles.