CBIZ REPORTS FOURTH-QUARTER AND FULL-YEAR 2021 RESULTS

FOURTH-QUARTER HIGHLIGHTS:

-- TOTAL REVENUE UP 15.0%; SAME-UNIT REVENUE UP 9.4%

FULL-YEAR HIGHLIGHTS:

-- TOTAL REVENUE UP 14.6%; SAME-UNIT REVENUE UP 7.7%

-- GAAP EPS DOWN 7.0%

-- ADJUSTED EPS UP 16.9%

-- ADJUSTED EBITDA UP 12.4%

2022 OUTLOOK:

-- TOTAL REVENUE UP 19% TO 21%

-- GAAP EPS UP 43% TO 46%; $1.89 TO $1.93

-- ADJUSTED EPS UP 20% TO 22%; $1.99 TO $2.03

News provided by

CBIZ, Inc.

Feb 17, 2022, 06:53 ET

CLEVELAND, Feb. 17, 2022 /PRNewswire/ -- CBIZ, Inc., (NYSE: CBZ) ("CBIZ", or the "Company"), a leading provider of financial, insurance and advisory services, today announced fourth-quarter and full-year results for the period ended December 31, 2021.

For the 2021 fourth quarter, CBIZ recorded revenue of $242.8 million, an increase of $31.7 million, or 15.0%, compared with $211.1 million reported for the same period in 2020. Acquired operations, net of divestitures, contributed $11.9 million, or 5.6%, to fourth-quarter 2021 revenue growth. Same-unit revenue increased by $19.8 million, or 9.4%, for the quarter, compared with the same period a year ago. Loss from continuing operations was $9.6 million, in the 2021 fourth quarter, compared with a loss of $0.1 million for the same period a year ago.

For the full year ended December 31, 2021, CBIZ recorded revenue of $1,104.9 million, an increase of $141.0 million, or 14.6%, over the $963.9 million recorded for the same period in 2020. Acquisitions, net of divestitures, contributed $66.7 million, or 6.9%, to revenue growth in the twelve months ended December 31, 2021. Same-unit revenue increased by $74.3 million, or 7.7%, compared with the same period a year ago. Income from continuing operations was $70.9 million, or $1.32 per diluted share, for the twelve months ended December 31, 2021, compared with $78.3 million, or $1.42 per diluted share, for the same period a year ago.

As previously announced on June 30, 2021, the Company reached a settlement agreement with the University of Pittsburgh Medical Center ("UPMC") related to claims arising from a lawsuit filed in connection with actuarial services provided by a former employee in 2013. Net of insurance proceeds, the pretax charge related to this settlement in the second quarter of 2021 was $30.5 million. In addition, on June 1, 2021, the Company divested a small, non-core wholesale insurance business and recorded a pretax gain of $6.3 million on the sale. Eliminating the impact of these non-recurring items, adjusted diluted EPS for the twelve months of 2021 increased by 16.9% to $1.66, compared with $1.42 reported a year ago. Adjusted EBITDA increased by 12.4% to $148.5 million, compared with $132.1 million in 2020.

As previously announced on January 10, 2022, the Company acquired Marks Paneth, a New York City-based accounting firm. This transaction is expected to add approximately $138.0 million of revenue to CBIZ in 2022. Eliminating the impact of one-time transaction-related costs and first year integration costs, contribution to earnings per share in 2022 is expected to be approximately $0.10, growing to a range of $0.20 to $0.25 per share by 2025, after all remaining transition-related integration costs are addressed. On a GAAP reported basis, the transaction is expected to have minimal impact on earnings per share in 2022, but is expected to be significantly accretive after first-year transaction and integration costs are incurred.

Reconciliations for adjusted diluted EPS and adjusted EBITDA to the most directly comparable GAAP measures can be found in the tables of this release.

For the full year ended December 31, 2021, the Company repurchased a total of 3.0 million shares of its common stock on the open market. The balance outstanding on the Company's unsecured credit facility on December 31, 2021, was $155.3 million with $234.5 million of unused borrowing capacity.

Jerry Grisko, CBIZ President and Chief Executive Officer, said, "2021 was a year to be celebrated at CBIZ.  As we marked our 25-year anniversary, I am proud to report exceptional results for the past year with record growth across nearly every major service line. In addition to continued strong demand for the core, essential, services that we provide to our clients regardless of business climate, we experienced very high demand for our more specialty and project-based advisory services as well, an increasing trend that demonstrates the optimistic outlook of our clients as they continue to focus on growth."

"2021 also proved to be an important year for our strategic acquisition activity as we capitalized on a full and expanding pipeline of opportunities starting early in the year," Grisko continued. "We closed six acquisitions adding approximately $75 million in annualized revenue. While the seasonal nature of a number of these mid-year acquisitions negatively impacted fourth quarter margins in 2021, they will be very accretive in 2022 and beyond. Our momentum with M&A continued with our recent acquisition of Marks Paneth in early January, adding more than 600 professionals to our team and approximately $138 million in annual revenue."

"Coming off such a strong year, and with the completion of our latest acquisition, we expect another year of solid growth in 2022," Grisko concluded.

2022 Outlook

  • The Company expects revenue to grow within a range of 19% to 21% over the prior year.
  • Although a number of factors may impact the tax rate, the Company expects an effective tax rate of approximately 25%.
  • The Company expects a weighted average fully diluted share count of approximately 53.0 to 53.5 million shares.
  • The Company expects GAAP fully diluted earnings per share from continuing operations to grow within a range of 43% to 46%, to $1.89 to $1.93 per share over the $1.32 per share reported for 2021.
  • The Company expects adjusted fully diluted earnings per share from continuing operations to grow within a range of 20% to 22%, to $1.99 to $2.03 per share over the adjusted $1.66 per share reported for 2021.

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/10163760/f162c4adc0.

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 100 offices in 32 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 impact of COVID-19 on the Company's business and operations and those of our clients; the Company's ability to adequately manage and sustain its growth; the Company's dependence on the current trend of outsourcing business services; the Company's dependence on the services of its CEO and other key employees; competitive pricing pressures; general business and economic conditions; and changes in governmental regulation and tax laws affecting the Company's insurance business or its business services operations. A more detailed description of such risks and uncertainties may be found in the Company's filings with the Securities and Exchange Commission at www.sec.gov.


CBIZ, INC.

FINANCIAL HIGHLIGHTS (UNAUDITED)

THREE MONTHS ENDED DECEMBER 31, 2021 AND 2020

(In thousands, except percentages and per share data)



Three Months Ended December 31,



2021


%


2020


%

Revenue


$ 242,828


100.0%


$ 211,110


100.0%

Operating expenses (1)


246,402


101.5


211,748


100.3

Gross loss


(3,574)


(1.5)


(638)


(0.3)

Corporate general and administrative expenses (1)


14,816


6.1


13,078


6.2

Operating loss


(18,390)


(7.6)


(13,716)


(6.5)

Other (expense) income:









Interest expense


(1,016)


(0.4)


(816)


(0.4)

Loss on sale of operations, net


(390)


(0.2)


(587)


(0.3)

Other income, net (1) (2)


6,212


2.6


13,050


6.2

Total other income, net


4,806


2.0


11,647


5.5

Loss from continuing operations before income tax benefit


(13,584)


(5.6)


(2,069)


(1.0)

Income tax benefit


(3,971)




(1,979)



Loss from continuing operations


(9,613)


(4.0)


(90)


—

Loss from operations of discontinued businesses, net of tax


(7)




(4)



Net loss


$   (9,620)


(4.0)%


$        (94)


—%










Diluted loss per share:









Continuing operations


$     (0.19)




$         —



Discontinued operations


—




—



Net loss


$     (0.19)




$         —












Diluted weighted average common shares outstanding


51,899




54,039



Other data from continuing operations:









Adjusted EBITDA (3)


$   (5,021)




$    5,196



(1)

CBIZ sponsors a deferred compensation plan, under which a CBIZ employee's compensation deferral is held in a rabbi trust and
invested accordingly as directed by the employee. Income and expenses related to the deferred compensation plan are included
in "Operating expenses" and "Corporate general and administrative expenses," and are directly offset by deferred compensation
gains in "Other income, net." The deferred compensation plan has no impact on "Loss from continuing operations before income
tax benefit."




Income and expenses related to the deferred compensation plan for the three months ended December 31, 2021, and 2020 are as follows (in thousands):



Three Months Ended December 31,



2021


% of Revenue


2020


% of Revenue

Operating  expenses


$       6,152


2.5%


$     11,010


5.2%

Corporate general and administrative expenses


908


0.4%


1,244


0.6%

Other income, net


7,060


2.9%


12,254


5.8%

Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the three months ended December 31, 2021, and 2020 are
as follows (in thousands):



Three Months Ended December 31,


2021


2020


As
Reported


Deferred
Compensation
Plan


Adjusted


% of
Revenue


As
Reported


Deferred
Compensation
Plan


Adjusted


% of
Revenue

Gross margin

$   (3,574)


$       6,152


$    2,578


1.1%


$      (638)


$     11,010


$  10,372


4.9%

Operating income (expense)

(18,390)


7,060


(11,330)


(4.7)%


(13,716)


12,254


(1,462)


(0.7)%

Other income (expense), net

6,212


(7,060)


(848)


(0.3)%


13,050


(12,254)


796


0.4%

Loss from continuing operations
before income tax benefit

(13,584)


—


(13,584)


(5.6)%


(2,069)


—


(2,069)


(1.0)%



(2)

Included in "Other income, net" for the three months ended December 31, 2021 and 2020, is expense of $0.8 million and income of $0.5 million, respectively, related to net changes in the fair value of
contingent consideration related to CBIZ's prior acquisitions.



(3)

Refer to the financial highlights tables for a reconciliation of Non-GAAP financial measures to the most directly comparable GAAP financial measure, and for additional information as to the usefulness of the Non-GAAP financial measures to shareholders and investors.

CBIZ, INC.

FINANCIAL HIGHLIGHTS (UNAUDITED)

TWELVE MONTHS ENDED DECEMBER 31, 2021 AND 2020

(In thousands, except percentages and per share data)



Twelve Months Ended December 31,



2021


%


2020


%

Revenue


$ 1,104,925


100.0%


$ 963,897


100.0%

Operating expenses (1)


945,635


85.6


825,351


85.6

Gross margin


159,290


14.4


138,546


14.4

Corporate general and administrative expenses (1)


56,150


5.1


46,066


4.8

Legal settlement, net


30,468


2.7


—


—

Operating income


72,672


6.6


92,480


9.6

Other income (expense):









Interest expense


(3,868)


(0.4)


(4,983)


(0.5)

Gain (loss) on sale of operations, net


5,995


0.5


(509)


(0.1)

Other income, net (1) (2)


18,241


1.7


16,500


1.7

Total other income, net


20,368


1.8


11,008


1.1

Income from continuing operations before income tax expense


93,040


8.4


103,488


10.7

Income tax expense


22,129




25,141



Income from continuing operations


70,911


6.4


78,347


8.1

Loss from operations of discontinued businesses, net of tax


(24)




(48)



Net income


$    70,887


6.4%


$  78,299


8.1%










Diluted income per share:









Continuing operations


$        1.32




$      1.42



Discontinued operations


—




(0.01)



Net income


$        1.32




$      1.41












Diluted weighted average common shares outstanding


53,723




55,359



Other data from continuing operations:









Adjusted EBITDA (3)


$  148,459




$ 132,119



Adjusted EPS (3)


$        1.66




$      1.42





(1)

CBIZ sponsors a deferred compensation plan, under which a CBIZ employee's compensation deferral is held in a rabbi trust and
invested accordingly as directed by the employee. Income and expenses related to the deferred compensation plan are included
in "Operating expenses" and "Corporate general and administrative expenses," and are directly offset by deferred compensation
gains in "Other income, net." The deferred compensation plan has no impact on "Income from continuing operations before
income tax expense."




Income and expenses related to the deferred compensation plan for the twelve months ended December 31, 2021, and 2020 are as follows (in thousands):



Twelve Months Ended December 31,



2021


% of Revenue


2020


% of Revenue

Operating expenses


$     17,317


1.6%


$     13,806


1.4%

Corporate general and administrative expenses


2,168


0.2%


1,587


0.2%

Other income, net


19,485


1.8%


15,393


1.6%

Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the twelve months
ended December 31, 2021, and 2020 are as follows (in thousands):



Twelve Months Ended December 31,


2021


2020


As Reported


Deferred Compensation Plan


Adjusted


% of Revenue


As Reported


Deferred Compensation Plan


Adjusted


% of Revenue

Gross margin

$159,290


$17,317


$176,607


16.00%


$138,546


$13,806


$152,352


15.80%

Operating income

72,672


19,485


92,157


8.30%


92,480


15,393


107,873


11.20%

Other income (expense), net

18,241


-19,485


-1,244


-0.10%


16,500


-15,393


1,107


0.10%

Income from continuing operations before income tax expense

93,040


—


93,040


8.40%


103,488


—


103,488


10.70%





(2)

Included in "Other income, net" for the twelve months ended December 31, 2021 and 2020, is expense of $2.4 million and
income of $0.6 million, respectively, related to net changes in the fair value of contingent consideration related to CBIZ's prior acquisitions.

(3)

Refer to the financial highlights tables for a reconciliation of Non-GAAP financial measures to the most directly comparable
GAAP financial measure, and for additional information as to the usefulness of the Non-GAAP financial measures to shareholders and investors.

CBIZ, INC.

FINANCIAL HIGHLIGHTS (UNAUDITED)

(In thousands)

SELECT SEGMENT DATA



Three Months Ended December
31,


Twelve Months Ended December
31,



2021


2020


2021


2020

Revenue









Financial Services


$      156,056


$      131,419


734,026


629,778

Benefits and Insurance Services


76,667


70,325


332,323


297,758

National Practices


10,105


9,366


38,576


36,361

Total


$      242,828


$      211,110


$   1,104,925


$      963,897










Gross Margin









Financial Services


(3,338)


2,147


$      125,788


$      104,569

Benefits and Insurance Services


8,765


10,487


60,673


49,401

National Practices


1,153


1,072


4,082


3,724

Operating expenses - unallocated (1):









Other expense


(4,002)


(3,334)


(13,936)


(5,342)

Deferred compensation


(6,152)


(11,010)


(17,317)


(13,806)

Total


$        (3,574)


$           (638)


$      159,290


$      138,546

(1)

Represents operating expenses not directly allocated to individual businesses, including stock-based compensation,
consolidation and integration charges, and certain advertising expenses. "Operating expenses - unallocated" also includes gains
or losses attributable to the assets held in a rabbi trust associated with the Company's deferred compensation plan. These gains
or losses do not impact "Income from continuing operations before income tax expense" as they are directly offset by the same
adjustment to "Other income, net" in the Consolidated Statements of Comprehensive Income. Net gains/losses recognized from
adjustments to the fair value of the assets held in the rabbi trust are recorded as compensation expense in "Operating expenses"
and "Corporate, general and administrative expenses," and offset in "Other income, net."

CBIZ, INC.

SELECT CASH FLOW DATA

(In thousands)



Twelve Months Ended December 31,



2021


2020

Net income


$         70,887


$         78,299

Adjustments to reconcile net income to net cash provided by operating activities:





Depreciation and amortization expense


27,078


23,139

(Gain) loss on sale of operations, net


(5,995)


509

Bad debt expense, net of recoveries


3,054


4,409

Adjustments to contingent earnout liability, net


2,367


(629)

Stock-based compensation expense


11,407


8,869

Other noncash adjustments


9,108


(285)

Net income, after adjustments to reconcile net income to net cash provided by
operating activities


117,906


114,311

Changes in assets and liabilities, net of acquisitions and divestitures


13,272


32,605

Operating cash flows provided by continuing operations


131,178


146,916

Operating cash used in discontinued operations


(24)


(71)

Net cash provided by operating activities


131,154


146,845

Net cash used in investing activities


(82,010)


(46,406)

Net cash used in financing activities


(69,005)


(76,609)

Net (decrease) increase in cash, cash equivalents and restricted cash


(19,861)


23,830

Cash, cash equivalents and restricted cash at beginning of year


$       170,335


$       146,505

Cash, cash equivalents and restricted cash at end of period


$       150,474


$       170,335






Reconciliation of cash, cash equivalents and restricted cash to the
consolidated balance sheet:





Cash and cash equivalents


$           1,997


$           4,652

Restricted cash


30,383


23,951

Cash equivalents included in funds held for clients


118,094


141,732

Total cash, cash equivalents and restricted cash


$       150,474


$       170,335

CBIZ, INC.

SELECT FINANCIAL DATA AND RATIOS

(In thousands)



December 31, 2021


December 31, 2020

Cash and cash equivalents


1,997


4,652

Restricted cash


30,383


23,951

Accounts receivable, net


242,168


216,175

Current assets before funds held for clients


293,765


268,991

Funds held for clients


157,909


167,440

Goodwill and other intangible assets, net


840,783


756,750






Total assets


1,627,934


1,513,754






Current liabilities before client fund obligations


265,174


211,285

Client fund obligations


158,115


166,989

Total long-term debt


154,851


107,192






Total liabilities


923,386


811,134






Treasury stock


(694,716)


(595,297)






Total stockholders' equity


704,548


702,620






Debt to equity


22.0%


15.3%

Days sales outstanding (DSO) - continuing operations (1)


71


72






Shares outstanding


52,038


54,099

Basic weighted average common shares outstanding


52,637


54,288

Diluted weighted average common shares outstanding


53,723


55,359

(1)

DSO is provided for continuing operations and represents accounts receivable, net, at the end of the period, divided by trailing
twelve-month daily revenue. The Company has included DSO data because such data is commonly used as a performance
measure by analysts and investors and as a measure of the Company's ability to collect on receivables in a timely manner. DSO
should not be regarded as an alternative or replacement to any measurement of performance under GAAP.

CBIZ, INC.

GAAP RECONCILIATION

(Loss) Income from Continuing Operations to Adjusted EBITDA(1)

(In thousands)


Three Months Ended December
31,


Twelve Months Ended December
31,


2021


2020


2021


2020

(Loss) Income from continuing operations

$        (9,613)


$             (90)


$        70,911


$        78,347

Interest expense

1,016


816


3,868


4,983

Income tax (benefit) expense

(3,971)


(1,979)


22,129


25,141

Loss (gain) on sale of operations, net

390


587


(5,995)


509

Legal settlement, net

—


—


30,468


—

Depreciation

2,771


2,516


10,781


9,568

Amortization

4,386


3,346


16,297


13,571

Adjusted EBITDA

$        (5,021)


$          5,196


$      148,459


$      132,119

(1)

CBIZ reports its financial results in accordance with GAAP. This table reconciles Adjusted EBITDA to the most directly
comparable GAAP financial measure, "(Loss) Income from continuing operations." Adjusted EBITDA is not defined by GAAP and should
not be regarded as an alternative or replacement to any measurement of performance under GAAP. Adjusted EBITDA is
commonly used by the Company, its shareholders and debt holders as a performance measurement to evaluate, assess and
benchmark the Company's operational results.

CBIZ, INC.

GAAP RECONCILIATION

(Loss) Income and Diluted Earnings Per Share ("EPS") from Continuing Operations to Adjusted (Loss) Income from Continuing Operations and EPS(1)

(In thousands)


Three Months Ended December
31, 2021


Twelve Months Ended December
31, 2021


Amounts


EPS


Amounts


EPS

(Loss) Income from continuing operations

$        (9,613)


$          (0.19)


$        70,911


$           1.32

Adjustments:








Gain on sale of operations, net

—


—


(6,311)


(0.12)

Legal settlement, net

—


—


30,468


0.57

Income tax effect related to adjustments

—


—


(5,746)


(0.11)

Adjusted (loss) income from continuing operations

$        (9,613)


$          (0.19)


$        89,322


$           1.66

(1)

CBIZ reports its financial results in accordance with GAAP. This table reconciles Adjusted (Loss) Income and Adjusted EPS to the most
directly comparable GAAP financial measures, "(Loss) Income from continuing operations" and "Diluted earnings per share from
continuing operations." Adjusted (Loss) Income and Adjusted EPS are not defined by GAAP and should not be regarded as an
alternative or replacement to any measurement of performance under GAAP. Adjusted (Loss) Income and Adjusted EPS, are used by
the Company for its shareholders and debt holders as a performance measure to evaluate, assess and benchmark the
Company's operational results.

CBIZ, INC.

GAAP RECONCILIATION

Full Year 2022 EPS from Continuing Operations Guidance to Full Year 2022 Adjusted Diluted EPS

(In thousands)


Full Year 2022 Guidance


Low


High

Diluted EPS - GAAP Guidance

$                1.89


$                  1.93

Integration cost related to Marks Paneth

0.10


0.10

Adjusted Diluted EPS Guidance

$                1.99


$                  2.03





GAAP Diluted EPS for 2021

$                1.32


$                  1.32

Adjusted Diluted EPS for 2021

$                1.66


$                  1.66

GAAP Diluted EPS Range

43%


46%

Adjusted Diluted EPS Range

20%


22%

SOURCE CBIZ, Inc.