Exhibit 99.1
FOR IMMEDIATE RELEASE | CONTACT: | Ware Grove | ||
| Chief Financial Officer | ||||
| -or- | ||||
| Lori Novickis | ||||
| Corporate Relations | ||||
| (216) 447-9000 |
CBIZ REPORTS THIRD-QUARTER 2005 RESULTS
REVENUE GROWS 12.8%; SAME-UNIT REVENUE GROWS 8.7%
Cleveland, Ohio (October 25, 2005)—CBIZ, Inc. (NASDAQ: CBIZ) today announced third-quarter results for the period ended September 30, 2005.
CBIZ reported revenue of $135.3 million for the third quarter ended September 30, 2005, an increase of 12.8% over the $120.0 million recorded for the third quarter of 2004. Same-unit revenue for the third quarter increased by 8.7%, or $10.4 million. Revenue from newly acquired businesses contributed $4.9 million to revenue growth in the third quarter of 2005. CBIZ reported income from continuing operations of $2.8 million for the third quarter of 2005, or $0.04 per diluted share, compared with $1.6 million or $0.02 per diluted share in the third quarter of 2004.
For the nine-month period ended September 30, 2005, CBIZ reported revenue of $430.3 million, a 10.7%, or $41.6 million increase over the $388.7 million recorded for the comparable nine-month period a year ago. Same-unit revenue increased by 6.1%, or $23.8 million, for the first nine months of 2005 compared to the same period a year ago. Acquisitions contributed $18.4 million to revenue growth for the first nine months of 2005, while divested operations accounted for a revenue decline of $0.6 million compared with the same period a year ago. Income from continuing operations was $17.3 million for the first nine months of 2005, or $0.23 per diluted share, compared with $17.8 million for the first nine months of 2004, or $0.21 per diluted share.
Through September 30, 2005, the Company had repurchased approximately 3.2 million shares of its common stock at a cost of $13.7 million. At September 30, 2005, bank debt was $43.8 million compared with $53.9 million at December 31, 2004. Since September 30, 2005, the Company has repurchased an additional 583,000 shares.
“This represents the ninth consecutive quarter of same-unit revenue growth and each of our four business segments contributed to our growth in the third quarter. Results from our cross-serving initiatives are steadily improving and already, at this point in the year, we have achieved our full-year target. The acquisitions we made earlier in 2005 are performing well,” stated Steven L. Gerard, Chairman and CEO. “We are pleased that the same-unit revenue growth rate we achieved in the third quarter resulted in a continued improvement in our operating margin for the third quarter compared with the third quarter a year ago.As we enter the fourth quarter, our momentum continues to be positive. We expect to achieve growth in earnings per share for the full year of 2005 at
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6050 Oak Tree Boulevard, South · Suite 500 · Cleveland, OH 44131 · Phone (216) 447-9000 · Fax (216) 447-9007
6050 Oak Tree Boulevard, South · Suite 500 · Cleveland, OH 44131 · Phone (216) 447-9000 · Fax (216) 447-9007
the high end of our original guidance — an increase of 20% — 25% over the $0.21 reported for 2004. Our cash flow continues to be strong which has enabled us to continue our program of making acquisitions, conducting share repurchases, and reducing debt throughout this year,” concluded 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. Shareholders and analysts wishing to participate in the conference call may dial 1-888-545-0687 several minutes before 11:00 a.m. (ET). If you are dialing from outside the United States, dial 1-630-691-2764. A replay of the call will be available starting at 1:00 p.m. (ET), October 25 through midnight (ET), October 28, 2005. The dial-in number for the replay is 1-877-213-9653. If you are listening from outside the United States, dial 1-630-652-3041. The access code for the replay is 12935745. A replay of the webcast will also be available on the Company’s web site at www.cbiz.com.
CBIZ is a provider of professional business services to companies throughout the United States. As the largest benefits specialist, one of the top accounting, valuation and medical practice management companies in the United States, CBIZ provides integrated services in the following areas: accounting and tax; employee benefits; wealth management; property and casualty insurance; payroll; IS consulting; and HR consulting. CBIZ also provides internal audit; Sarbanes-Oxley section 404 compliance; valuation; litigation advisory; government relations; commercial real estate advisory; wholesale life and group insurance; healthcare consulting; medical practice management; and capital advisory services. These services are provided throughout a network of more than 140 Company offices in 34 states and the District of Columbia.
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 regardingCBIZ,call our Investor Relations Office at (216) 447-9000 or visit our web site atwww.cbiz.com.
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6050 Oak Tree Boulevard, South · Suite 500 · Cleveland, OH 44131 · Phone (216) 447-9000 · Fax (216) 447-9007
6050 Oak Tree Boulevard, South · Suite 500 · Cleveland, OH 44131 · Phone (216) 447-9000 · Fax (216) 447-9007
CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(In thousands, except percentages and per share data)
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(In thousands, except percentages and per share data)
| THREE MONTHS ENDED | ||||||||||||||||
| SEPTEMBER 30, | ||||||||||||||||
| 2005 | % | 2004 (1) | % | |||||||||||||
| Revenue | $ | 135,339 | 100.0 | % | $ | 119,974 | 100.0 | % | ||||||||
| Operating expenses | 120,836 | 89.3 | % | 107,479 | 89.6 | % | ||||||||||
| Gross margin | 14,503 | 10.7 | % | 12,495 | 10.4 | % | ||||||||||
| Corporate general and administrative expense | 6,364 | 4.7 | % | 6,008 | 5.0 | % | ||||||||||
| Depreciation and amortization expense | 3,807 | 2.8 | % | 4,047 | 3.4 | % | ||||||||||
| Operating income | 4,332 | 3.2 | % | 2,440 | 2.0 | % | ||||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | (787 | ) | -0.5 | % | (369 | ) | -0.3 | % | ||||||||
| Gain on sale of operations, net | 29 | 0.0 | % | 78 | 0.1 | % | ||||||||||
| Other income, net | 1,279 | 0.9 | % | 521 | 0.4 | % | ||||||||||
| Total other income, net | 521 | 0.4 | % | 230 | �� | 0.2 | % | |||||||||
| Income from continuing operations before income tax expense | 4,853 | 3.6 | % | 2,670 | 2.2 | % | ||||||||||
| Income tax expense | 2,091 | 1,059 | ||||||||||||||
| Income from continuing operations | 2,762 | 2.0 | % | 1,611 | 1.3 | % | ||||||||||
| Loss from operations of discontinued businesses, net of tax | (1,529 | ) | (1,493 | ) | ||||||||||||
| Gain on disposal of discontinued businesses, net of tax | 802 | 238 | ||||||||||||||
| Net income | $ | 2,035 | 1.5 | % | $ | 356 | 0.3 | % | ||||||||
| Diluted earnings (loss) per share: | ||||||||||||||||
| Continuing operations | $ | 0.04 | $ | 0.02 | ||||||||||||
| Discontinued operations | (0.01 | ) | (0.01 | ) | ||||||||||||
| Net income | $ | 0.03 | $ | 0.01 | ||||||||||||
| Diluted shares outstanding | 75,988 | 79,373 | ||||||||||||||
Other data from continuing operations: | ||||||||||||||||
| EBIT (2) | $ | 5,611 | $ | 2,961 | ||||||||||||
| EBITDA (2) | $ | 9,418 | $ | 7,008 | ||||||||||||
(1) Certain amounts in the 2004 financial data have been reclassified to conform to the current year presentation.
(2) EBIT represents income from continuing operations before income taxes, interest expense, and gain on divested operations. EBITDA represents EBIT as defined above before depreciation and amortization expense. The Company has included EBIT and 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. EBIT and EBITDA should not be regarded as an alternative or replacement to any measurement of performance under generally accepted accounting principles (GAAP).
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6050 Oak Tree Boulevard, South · Suite 500 · Cleveland, OH 44131 · Phone (216) 447-9000 · Fax (216) 447-9007
6050 Oak Tree Boulevard, South · Suite 500 · Cleveland, OH 44131 · Phone (216) 447-9000 · Fax (216) 447-9007
CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(In thousands, except percentages and per share data)
FINANCIAL HIGHLIGHTS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(In thousands, except percentages and per share data)
| NINE MONTHS ENDED | ||||||||||||||||
| SEPTEMBER 30, | ||||||||||||||||
| 2005 | % | 2004 (1) | % | |||||||||||||
| Revenue | $ | 430,332 | 100.0 | % | $ | 388,696 | 100.0 | % | ||||||||
| Operating expenses | 369,754 | 85.9 | % | 330,754 | 85.1 | % | ||||||||||
| Gross margin | 60,578 | 14.1 | % | 57,942 | 14.9 | % | ||||||||||
| Corporate general and administrative expense | 20,236 | 4.7 | % | 17,757 | 4.6 | % | ||||||||||
| Depreciation and amortization expense | 11,594 | 2.7 | % | 12,014 | 3.1 | % | ||||||||||
| Operating income | 28,748 | 6.7 | % | 28,171 | 7.2 | % | ||||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | (2,413 | ) | -0.6 | % | (1,038 | ) | -0.2 | % | ||||||||
| Gain on sale of operations, net | 29 | 0.0 | % | 996 | 0.3 | % | ||||||||||
| Other income, net | 2,836 | 0.7 | % | 1,344 | 0.3 | % | ||||||||||
| Total other income, net | 452 | 0.1 | % | 1,302 | 0.4 | % | ||||||||||
| Income from continuing operations before income tax expense | 29,200 | 6.8 | % | 29,473 | 7.6 | % | ||||||||||
| Income tax expense | 11,855 | 11,676 | ||||||||||||||
| Income from continuing operations | 17,345 | 4.0 | % | 17,797 | 4.6 | % | ||||||||||
| Loss from operations of discontinued businesses, net of tax | (4,540 | ) | (3,716 | ) | ||||||||||||
| Gain on disposal of discontinued businesses, net of tax | 693 | 238 | ||||||||||||||
| Net income | $ | 13,498 | 3.1 | % | $ | 14,319 | 3.7 | % | ||||||||
| Diluted earnings (loss) per share: | ||||||||||||||||
| Continuing operations | $ | 0.23 | $ | 0.21 | ||||||||||||
| Discontinued operations | (0.05 | ) | (0.04 | ) | ||||||||||||
| Net income | $ | 0.18 | $ | 0.17 | ||||||||||||
| Diluted shares outstanding | 76,886 | 82,480 | ||||||||||||||
Other data from continuing operations: | ||||||||||||||||
| EBIT (2) | $ | 31,584 | $ | 29,515 | ||||||||||||
| EBITDA (2) | $ | 43,178 | $ | 41,529 | ||||||||||||
(1) Certain amounts in the 2004 financial data have been reclassified to conform to the current year presentation.
(2) EBIT represents income from continuing operations before income taxes, interest expense, and gain on divested operations. EBITDA represents EBIT as defined above before depreciation and amortization expense. The Company has included EBIT and 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. EBIT and EBITDA should not be regarded as an alternative or replacement to any measurement of performance under generally accepted accounting principles (GAAP).
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6050 Oak Tree Boulevard, South · Suite 500 · Cleveland, OH 44131 · Phone (216) 447-9000 · Fax (216) 447-9007
6050 Oak Tree Boulevard, South · Suite 500 · Cleveland, OH 44131 · Phone (216) 447-9000 · Fax (216) 447-9007
CBIZ, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(In thousands, except percentages and ratios)
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(In thousands, except percentages and ratios)
| THREE MONTHS ENDED | NINE MONTHS ENDED | |||||||||||||||
| SEPTEMBER 30, | SEPTEMBER 30, | |||||||||||||||
| 2005 | 2004 (3) | 2005 | 2004 (3) | |||||||||||||
Revenue | ||||||||||||||||
| Accounting, Tax & Advisory Services | $ | 55,011 | $ | 45,885 | $ | 193,098 | $ | 166,090 | ||||||||
| Benefits & Insurance Services | 36,888 | 34,682 | 109,475 | 106,996 | ||||||||||||
| National Practices — Other | 18,251 | 17,145 | 55,115 | 51,289 | ||||||||||||
| Medical Practice Management | 25,189 | 22,262 | 72,644 | 64,321 | ||||||||||||
Total | $ | 135,339 | $ | 119,974 | $ | 430,332 | $ | 388,696 | ||||||||
Gross margin | ||||||||||||||||
| Accounting, Tax & Advisory Services | $ | 5,024 | $ | 3,521 | $ | 35,417 | $ | 29,875 | ||||||||
| Benefits & Insurance Services | 8,038 | 6,919 | 21,892 | 22,170 | ||||||||||||
| National Practices — Other | 1,375 | 1,512 | 5,235 | 5,208 | ||||||||||||
| Medical Practice Management | 5,138 | 4,333 | 13,274 | 11,181 | ||||||||||||
Total (1) | $ | 14,503 | $ | 12,495 | $ | 60,578 | $ | 57,942 | ||||||||
SELECT BALANCE SHEET DATA AND RATIOS
| SEPTEMBER 30, | DECEMBER 31, | |||||||
| 2005 | 2004 (3) | |||||||
| Cash and cash equivalents | $ | 5,515 | $ | 5,291 | ||||
| Restricted cash | $ | 9,102 | $ | 10,089 | ||||
| Accounts receivable, net | $ | 107,782 | $ | 100,426 | ||||
| Current assets before funds held for clients | $ | 142,916 | $ | 152,703 | ||||
| Funds held for clients | $ | 51,279 | $ | 32,787 | ||||
| Goodwill and other intangible assets, net | $ | 180,078 | $ | 172,644 | ||||
Total assets | $ | 434,640 | $ | 413,773 | ||||
| Current liabilities before client fund obligations | $ | 76,728 | $ | 73,315 | ||||
| Client fund obligations | $ | 51,279 | $ | 32,787 | ||||
| Bank debt | $ | 43,750 | $ | 53,900 | ||||
Total liabilities | $ | 185,049 | $ | 167,276 | ||||
| Treasury stock | $ | (99,386 | ) | $ | (85,650 | ) | ||
Total stockholders’ equity | $ | 249,591 | $ | 246,497 | ||||
| Bank debt to equity | 17.5 | % | 21.9 | % | ||||
| Days sales outstanding (2) | 72 | 73 | ||||||
| Shares outstanding | 73,544 | 75,651 | ||||||
| Basic shares outstanding | 74,895 | 79,217 | ||||||
| Diluted shares outstanding | 76,886 | 81,477 | ||||||
(1) Includes operating expenses recorded by corporate and not directly allocated to the business units of $5,072 and $3,790 for the three months ended September 30, 2005 and 2004, and $15,240 and $10,492 for the nine months ended September 30, 2005 and 2004, respectively.
(2) Days sales outstanding (DSO) represent accounts receivable (before the allowance for doubtful accounts) and unbilled revenue (net of realization adjustments) at the end of the period, divided by 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 generally accepted accounting principles (GAAP).
(3) Certain amounts in the 2004 financial data have been reclassified to conform to the current year presentation.
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6050 Oak Tree Boulevard, South · Suite 500 · Cleveland, OH 44131 · Phone (216) 447-9000 · Fax (216) 447-9007
6050 Oak Tree Boulevard, South · Suite 500 · Cleveland, OH 44131 · Phone (216) 447-9000 · Fax (216) 447-9007