Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 03, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | CBZ | |
Entity Registrant Name | CBIZ, Inc. | |
Entity Central Index Key | 944,148 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 54,389,111 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 2,424 | $ 3,494 |
Restricted cash | 26,651 | 27,880 |
Accounts receivable, net | 220,859 | 175,354 |
Other current assets | 24,024 | 21,407 |
Current assets before funds held for clients | 273,958 | 228,135 |
Funds held for clients | 158,676 | 213,457 |
Total current assets | 432,634 | 441,592 |
Non-current assets: | ||
Property and equipment, net | 19,945 | 19,450 |
Goodwill and other intangible assets, net | 582,404 | 584,401 |
Assets of deferred compensation plan | 72,890 | 69,912 |
Notes receivable | 1,213 | 1,227 |
Other non-current assets | 2,101 | 2,006 |
Total non-current assets | 678,553 | 676,996 |
Total assets | 1,111,187 | 1,118,588 |
Current liabilities: | ||
Accounts payable | 47,057 | 45,772 |
Income taxes payable | 18,128 | 1,048 |
Accrued personnel costs | 26,421 | 45,221 |
Notes payable | 1,015 | 1,060 |
Contingent purchase price liability | 14,382 | 16,322 |
Other current liabilities | 11,713 | 16,169 |
Current liabilities before client fund obligations | 118,716 | 125,592 |
Client fund obligations | 159,053 | 213,855 |
Total current liabilities | 277,769 | 339,447 |
Non-current liabilities: | ||
Bank debt | 212,700 | 191,400 |
Debt issuance costs | (1,221) | (1,351) |
Total long-term debt | 211,479 | 190,049 |
Notes payable | 1,443 | 1,721 |
Income taxes payable | 4,539 | 4,426 |
Deferred income taxes, net | 2,864 | 3,545 |
Deferred compensation plan obligations | 72,890 | 69,912 |
Contingent purchase price liability | 18,040 | 17,387 |
Other non-current liabilities | 14,898 | 12,080 |
Total non-current liabilities | 326,153 | 299,120 |
Total liabilities | 603,922 | 638,567 |
STOCKHOLDERS' EQUITY | ||
Common stock | 1,286 | 1,282 |
Additional paid in capital | 660,086 | 655,629 |
Retained earnings | 319,799 | 294,925 |
Treasury stock | (473,582) | (471,311) |
Accumulated other comprehensive loss | (324) | (504) |
Total stockholders’ equity | 507,265 | 480,021 |
Total liabilities and stockholders’ equity | $ 1,111,187 | $ 1,118,588 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Revenue | $ 241,459 | $ 224,238 |
Operating expenses | 192,766 | 178,117 |
Gross margin | 48,693 | 46,121 |
Corporate general and administrative expenses | 8,768 | 10,245 |
Operating income | 39,925 | 35,876 |
Other income (expense): | ||
Interest expense | (1,517) | (1,526) |
Gain on sale of operations, net | 22 | 101 |
Other income, net | 2,737 | 2,147 |
Total other income, net | 1,242 | 722 |
Income from continuing operations before income tax expense | 41,167 | 36,598 |
Income tax expense | 16,141 | 14,800 |
Income from continuing operations | 25,026 | 21,798 |
Loss from discontinued operations, net of tax | (152) | (30) |
Net income | $ 24,874 | $ 21,768 |
Basic: | ||
Continuing operations | $ 0.47 | $ 0.42 |
Net income | 0.47 | 0.42 |
Diluted: | ||
Continuing operations | 0.45 | 0.41 |
Net income | $ 0.45 | $ 0.41 |
Basic weighted average shares outstanding | 53,293 | 51,572 |
Diluted weighted average shares outstanding | 55,214 | 52,745 |
Comprehensive Income: | ||
Net income | $ 24,874 | $ 21,768 |
Other comprehensive income (loss), net of tax | 180 | (311) |
Comprehensive income | $ 25,054 | $ 21,457 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - 3 months ended Mar. 31, 2017 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] |
Balance, Amount at Dec. 31, 2016 | $ 480,021 | $ 1,282 | $ (471,311) | $ 655,629 | $ 294,925 | $ (504) |
Balance, Shares at Dec. 31, 2016 | 128,191 | 74,147 | ||||
Net income | 24,874 | 24,874 | ||||
Other comprehensive income | 180 | 180 | ||||
Share repurchases | (2,271) | $ (2,271) | ||||
Share repurchases, Shares | 176 | |||||
Stock options exercised | $ 2,453 | $ 3 | 2,450 | |||
Stock options exercised, Shares | 335 | 335 | ||||
Share-based compensation | $ 1,375 | $ 1 | 1,374 | |||
Share-based compensation, Shares | 70 | |||||
Business acquisitions | 633 | 633 | ||||
Business acquisitions, Shares | 47 | |||||
Balance, Amount at Mar. 31, 2017 | $ 507,265 | $ 1,286 | $ (473,582) | $ 660,086 | $ 319,799 | $ (324) |
Balance, Shares at Mar. 31, 2017 | 128,643 | 74,323 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Cash flows from operating activities: | |||
Net income | $ 24,874 | $ 21,768 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Loss from discontinued operations, net of tax | 152 | 30 | |
Gain on sale of operations, net | (22) | (101) | |
Depreciation and amortization expense | 5,641 | 5,245 | |
Amortization of deferred financing costs | 131 | 131 | |
Amortization of discount on contingent earnout liability | 131 | 36 | |
Bad debt expense, net of recoveries | 734 | 1,170 | |
Adjustment to contingent earnout liability | 485 | (1,263) | |
Deferred income taxes | (796) | 434 | |
Employee stock awards | 1,374 | 1,409 | |
Excess tax benefits from share based payment arrangements | [1] | (644) | (102) |
Changes in assets and liabilities, net of acquisitions and divestitures: | |||
Restricted cash | 1,229 | (1,235) | |
Accounts receivable, net | (46,077) | (44,485) | |
Other assets | 1,088 | (833) | |
Accounts payable | 1,285 | 995 | |
Income taxes payable | 17,837 | 13,516 | |
Accrued personnel costs | (18,800) | (15,510) | |
Other liabilities | (1,767) | 1,127 | |
Operating cash flows used in continuing operations | (13,145) | (17,668) | |
Operating cash flows (used in) provided by discontinued operations | (118) | 506 | |
Net cash used in operating activities | (13,263) | (17,162) | |
Cash flows from investing activities: | |||
Business acquisitions and purchases of client lists, net of cash acquired | (4,344) | (2,043) | |
Purchases of client fund investments | (10,418) | (3,560) | |
Proceeds from the sales and maturities of client fund investments | 3,425 | 3,577 | |
Proceeds from sales of divested operations | 22 | 42 | |
Decrease in funds held for clients | 61,922 | 20,746 | |
Additions to property and equipment, net | (1,760) | (880) | |
Collection of notes receivable | 34 | ||
Net provided by investing activities | 48,847 | 17,916 | |
Cash flows from financing activities: | |||
Proceeds from bank debt | 139,700 | 145,200 | |
Payment of bank debt | (118,400) | (117,100) | |
Payment for acquisition of treasury stock | (2,271) | (6,137) | |
Decrease in client funds obligations | (54,802) | (20,805) | |
Proceeds from exercise of stock options | 2,453 | 796 | |
Payment of contingent consideration of acquisitions | (3,231) | (2,035) | |
Excess tax benefit from exercise of stock awards | [1] | 102 | |
Payment of notes payable | (103) | (58) | |
Deferred financing costs | (6) | ||
Net cash used in financing activities | (36,654) | (43) | |
Net (decrease) increase in cash and cash equivalents | (1,070) | 711 | |
Cash and cash equivalents at beginning of year | 3,494 | 850 | |
Cash and cash equivalents at end of period | $ 2,424 | $ 1,561 | |
[1] | (1) See Note 15 to the consolidated financial statements for discussion of our adoption of ASU 2016-09 (as defined in Note 15). |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of CBIZ, Inc. and its subsidiaries (“CBIZ,” the “Company,” “we,” “us,” or “our”) have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by the accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited 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. These interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2017. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management’s estimates and assumptions include, but are not limited to, estimates of collectability of accounts receivable and unbilled revenue, the realizability of goodwill and other intangible assets, the fair value of certain assets, the valuation of stock options in determining compensation expense, estimates of accrued liabilities (such as incentive compensation, self-funded health insurance accruals, legal reserves, income tax uncertainties and contingent purchase price obligations), the provision for income taxes, the realizability of deferred tax assets, and other factors. Management’s estimates and assumptions are derived from and are continually evaluated based upon available information, judgment and experience. Changes in circumstances could cause actual results to differ materially from those estimates. Refer to Note 1, Organization and Summary of Significant Accounting Policies |
Accounts Receivable, Net
Accounts Receivable, Net | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Note 2. Accounts Receivable, Net Accounts receivable, net balances at March 31, 2017 and December 31, 2016 were as follows (in thousands): March 31, December 31, 2017 2016 Trade accounts receivable $ 140,290 $ 132,880 Unbilled revenue 93,843 55,982 Total accounts receivable 234,133 188,862 Allowance for doubtful accounts (13,274 ) (13,508 ) Accounts receivable, net $ 220,859 $ 175,354 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | Note 3. Goodwill and Other Intangible Assets, Net The components of goodwill and other intangible assets, net at March 31, 2017 and December 31, 2016 were as follows (in thousands): March 31, December 31, 2017 2016 Goodwill $ 489,039 $ 487,484 Intangible assets: Client lists 173,148 172,343 Other intangible assets 8,031 7,994 Total intangible assets 181,179 180,337 Total goodwill and intangibles assets 670,218 667,821 Accumulated amortization: Client lists (84,646 ) (80,560 ) Other intangible assets (3,168 ) (2,860 ) Total accumulated amortization (87,814 ) (83,420 ) Goodwill and other intangible assets, net $ 582,404 $ 584,401 |
Depreciation and Amortization
Depreciation and Amortization | 3 Months Ended |
Mar. 31, 2017 | |
Text Block [Abstract] | |
Depreciation and Amortization | Note 4. Depreciation and Amortization Depreciation and amortization expense for property and equipment and intangible assets for the three months ended March 31, 2017 and 2016 was as follows (in thousands): Three Months Ended March 31, 2017 2016 Operating expenses $ 5,543 $ 5,130 Corporate general and administrative expenses 98 115 Total depreciation and amortization expense $ 5,641 $ 5,245 |
Debt and Financing Arrangements
Debt and Financing Arrangements | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt and Financing Arrangements | Note 5. Debt and Financing Arrangements At March 31, 2017, our primary financing arrangement was the $400.0 million unsecured credit facility discussed below, which provides 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. In addition to the discussion below, refer to our Annual Report on Form 10-K for the year ended December 31, 2016 for additional details of our debt and financing arrangements. Bank Debt We have a $400.0 million unsecured credit facility with Bank of America as agent for a group of eight participating banks that matures in July 2019. The balance outstanding under the credit facility was $212.7 million and $191.4 million at March 31, 2017 and December 31, 2016, respectively. Rates for the three months ended March 31, 2017 and 2016 were as follows: Three Months Ended March 31, 2017 2016 Weighted average rates 2.52% 2.25% Range of effective rates 2.19% - 4.50% 1.82% - 3.50% We have approximately $122.0 million of available funds under the credit facility at March 31, 2017, net of outstanding letters of credit of $2.3 million. The credit facility provides us with operating flexibility and funding to support seasonal working capital needs and other strategic initiatives such as acquisitions and share repurchases. As of March 31, 2017, we were in compliance with our debt covenants. • 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, performance guarantees, other indebtedness and outstanding borrowings under the credit facility. • Under the credit facility, loans are charged an interest rate consisting of a base rate or Eurodollar 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. Interest Expense During the three months ended March 31, 2017 and 2016, we recognized interest expense as follows (in thousands): Three Months Ended March 31, 2017 2016 Credit facility (1) $ 1,517 $ 1,520 2006 Notes (2) — 6 Total interest expense $ 1,517 $ 1,526 (1) Components of interest expense related to the credit facility include amortization of deferred financing costs, commitment fees and line of credit fees. (2) During the second quarter of 2016, we redeemed the remaining 3.125% Convertible Senior Subordinated Notes (the “2006 Notes”) for $750 thousand in cash plus accrued interest under an optional early redemption provision. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 6. 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 $2.3 million at both March 31, 2017 and December 31, 2016. In addition, we provide license bonds to various state agencies to meet certain licensing requirements. The amount of license bonds outstanding was $2.5 million and $2.3 million at March 31, 2017 and December 31, 2016, respectively. Legal Proceedings In 2010, CBIZ, Inc. and its subsidiary, CBIZ MHM, LLC (fka CBIZ Accounting, Tax & Advisory Services, LLC) (the “CBIZ Parties”), were named as defendants in lawsuits filed in the U.S. District Court for the District of Arizona and the Superior Court for Maricopa County, Arizona. The federal court case is captioned Robert Facciola, et al v. Greenberg Traurig LLP, et al, and the state court cases are captioned Victims Recovery, LLC v. Greenberg Traurig LLP, et al, Roger Ashkenazi, et al v. Greenberg Traurig LLP, et al, Mary Marsh, et al v. Greenberg Traurig LLP, et al; and ML Liquidating Trust v. Mayer Hoffman McCann PC, et al. Prior to these suits CBIZ MHM, LLC was named as a defendant in Jeffrey C. Stone v. Greenberg Traurig LLP, et al. These lawsuits arose out of the bankruptcy of Mortgages Ltd., a mortgage lender to developers in the Phoenix, Arizona area. Various other professional firms and individuals not related to the Company were also named defendants in these lawsuits. The lawsuits asserted claims for, among others things, violations of the Arizona Securities Act, common law fraud, and negligent misrepresentation, and sought to hold the CBIZ Parties vicariously liable for Mayer Hoffman’s conduct as Mortgage Ltd.’s auditor, as either a statutory control person under the Arizona Securities Act or a joint venturer under Arizona common law. With the exception of claims being pursued by two plaintiffs from the Ashkenazi lawsuit (“Baldino Group”), all other related matters have been dismissed or settled without payment by the CBIZ Parties. The Baldino Group’s claims, which allege damages of approximately $16.0 million, are currently stayed as to the CBIZ Parties and Mayer Hoffman, and no trial date has been set. On September 16, 2016, CBIZ, Inc. and its subsidiary CBIZ Benefits & Insurance Services, Inc. (“CBIZ Benefits”) were named as defendants in a lawsuit filed in the U.S. District Court for the Western District of Pennsylvania. The federal court case is brought by UPMC, d/b/a University of Pittsburgh Medical Center, and a health system it acquired, UPMC Altoona (formerly, Altoona Regional Health System). The lawsuit asserts professional negligence, breach of contract, and negligent misrepresentation claims against CBIZ, CBIZ Benefits and a former employee of CBIZ Benefits in connection with actuarial services provided by CBIZ Benefits to Altoona Regional Health System. The complaint seeks damages in an amount of no less than $142.0 million. We cannot predict the outcome of the above matters or estimate the possible loss or range of possible loss, if any. Although the proceedings are subject to uncertainties inherent in the litigation process and the ultimate disposition of these proceedings is not presently determinable, we intend to vigorously defend these cases. In addition to those items disclosed above, we are, from time to time, subject to claims and suits arising in the ordinary course of business. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Investments All Other Investments [Abstract] | |
Financial Instruments | Note 7. Financial Instruments Bonds We held corporate and municipal bonds with par values totaling $49.5 million and $42.4 million at March 31, 2017 and December 31, 2016, respectively. All bonds are investment grade and are classified as available-for-sale. These bonds have maturity or callable dates ranging from April 2017 through May 2022, and are included in “Funds held for clients – current” in the accompanying Consolidated Balance Sheets based on our intent and ability to sell these investments at any time under favorable conditions. The following table summarizes our bond activity for the three months ended March 31, 2017 and the twelve months ended December 31, 2016 (in thousands): Three Months Ended Twelve Months Ended March 31, 2017 December 31, 2016 Fair value at beginning of period $ 44,573 $ 43,142 Purchases 10,418 11,355 Redemptions (940 ) (2,900 ) Maturities and calls (2,485 ) (6,878 ) Change in bond premium 359 (106 ) Fair market value adjustment 148 (40 ) Fair value at end of period $ 52,073 $ 44,573 Interest Rate Swaps We do not purchase or hold any derivative instruments for trading or speculative purposes. We utilize interest rate swaps to manage interest rate risk exposure associated with our floating-rate debt under the credit facility. Under these interest rate swap contracts, we receive cash flows from counterparties at variable rates based on the London Interbank Offered Rate (“LIBOR”) and pay the counterparties a fixed rate. Refer to the Annual Report on Form 10-K for the year ended December 31, 2016 for further discussion on our interest rate swaps. The following table summarizes our outstanding interest rate swaps and their classification in the accompanying Consolidated Balance Sheets at March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 Notional Fair Amount Value (1) Balance Sheet Location Interest rate swaps (2) $ 50,000 $ 661 Other non-current assets Interest rate swaps (2) $ 10,000 $ 15 Other current assets December 31, 2016 Notional Fair Amount Value (1) Balance Sheet Location Interest rate swaps (2) $ 50,000 $ 525 Other non-current assets Interest rate swaps (2) $ 10,000 $ 4 Other current assets (1) Refer to Note 8, Fair Value Measurements (2) The notional value of each interest rate swap is $10.0 million, $15.0 million, $25.0 million, and $10.0 million with maturities of 2, 3, 5 and 5 years, respectively. Under the terms of the interest rate swaps, we pay interest at a fixed rate of 0.885% (2-year), 1.155% (3-year), 1.300% (5-year) and 1.120% (5-year) plus applicable margin as stated in the agreement, and receive interest that varies with the one-month LIBOR. The following table summarizes the effects of the interest rate swap on CBIZ’s accompanying Consolidated Statements of Comprehensive Income for the three months ended March 31, 2017 and 2016 (in thousands): Gain (Loss) Recognized in AOCL, Net of Tax Gain Reclassified from AOCL into Expense Three Months Ended Three Months Ended March 31, March 31, 2017 2016 2017 2016 Interest rate swap $ 93 $ (532 ) $ 58 $ 105 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 8. Fair Value Measurements The following table summarizes our assets and liabilities at March 31, 2017 and December 31, 2016 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): Level March 31, 2017 December 31, 2016 Deferred compensation plan assets 1 $ 72,890 $ 69,912 Corporate and municipal bonds 1 $ 52,073 $ 44,573 Interest rate swaps 2 $ 676 $ 529 Contingent purchase price liabilities 3 $ (32,422 ) $ (33,709 ) During the three months ended March 31, 2017 and 2016, 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 three months ended March 31, 2017 and 2016 (pre-tax basis) (in thousands): 2017 2016 Beginning balance – January 1 $ (33,709 ) $ (24,817 ) Additions from business acquisitions (1,661 ) (1,206 ) Settlement of contingent purchase price liabilities 3,564 2,335 Change in fair value of contingencies (485 ) 1,263 Change in net present value of contingencies (131 ) (36 ) Ending balance – March 31 $ (32,422 ) $ (22,461 ) Contingent Purchase Price Liabilities Contingent purchase price liabilities arise from business acquisitions and are classified as Level 3 due to the utilization of a probability weighted discounted cash flow approach to determine the fair value of the contingency. A contingent liability is established for each acquisition that has a contingent purchase price component extending over a term of two to six years. The significant unobservable input used in the fair value measurement of the contingent purchase price liabilities is the future performance of the acquired business. The future performance of the acquired business directly impacts the contingent purchase price that is paid to the seller; thus, performance that exceeds estimates would result in a higher payout, and a performance under estimates would result in a lower payout. Changes in the expected amount of potential payouts are recorded as adjustments to the initial contingent purchase price liability, with the same amount being recorded in the accompanying Consolidated Statements of Comprehensive Income. These liabilities are reviewed quarterly and adjusted if necessary. Refer to Note 12, Acquisitions 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. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Other Comprehensive Income (Loss) | Note 9. Other Comprehensive Income (Loss) The following table is a summary of other comprehensive income (loss) and discloses the tax impact of each component of other comprehensive income (loss) for the three months ended March 31, 2017 and 2016 (in thousands): Three Months Ended March 31, 2017 2016 Net unrealized (loss) gain on available-for-sale securities, net of income taxes (1) $ 89 $ 231 Net unrealized gain (loss) on interest rate swaps, net of income taxes (2) 93 (532 ) Foreign currency translation (2 ) (10 ) Total other comprehensive income (loss) $ 180 $ (311 ) (1) Net of income tax expense of $59 and $92 for the three months ended March 31, 2017 and 2016, respectively. (2) Net of income tax expense (benefit) of $55 and ($312) for the three months ended March 31, 2017 and 2016, respectively. Accumulated other comprehensive loss, net of tax, was approximately $0.3 million and $0.5 million at March 31, 2017 and December 31, 2016, respectively. Accumulated other comprehensive loss consisted of adjustments, net of tax, for unrealized gains and losses on available-for-sale securities and interest rate swaps, and foreign currency translation. |
Employee Share Plans
Employee Share Plans | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Employee Share Plans | Note 10. Employee Share Plans In 2015, our shareholders approved the CBIZ, Inc. 2014 Stock Incentive Plan (the “2014 Plan”), which replaced and, for future grants, superseded the 2002 Amended and Restated CBIZ, Inc. Stock Incentive Plan (the “2002 Plan”). The 2014 Plan, which expires in 2024, has operating terms substantially similar to those of the 2002 Plan. A maximum of 9.6 million stock options, shares of restricted stock or other stock-based compensation awards may be granted. Shares subject to award under the 2014 Plan may be either authorized but unissued shares of CBIZ common stock or treasury shares. Compensation expense for stock-based awards recognized during the three months ended March 31, 2017 and 2016 was as follows (in thousands): Three Months Ended March 31, 2017 2016 Stock options $ 525 $ 579 Restricted stock awards 849 830 Total stock-based compensation expense $ 1,374 $ 1,409 Stock award activity during the three months ended March 31, 2017 was as follows (in thousands, except per share data): Stock Options Restricted Stock Awards Number of Options Weighted Average Exercise Per Share Number of Shares Weighted Grant-Date Fair Value (1) Outstanding at beginning of year 4,376 $ 8.02 827 $ 9.14 Granted — $ — 70 $ 12.85 Exercised (335 ) $ 7.32 (90 ) $ 9.40 Expired or canceled (3 ) $ 6.52 — $ — Outstanding at March 31, 2017 4,038 $ 8.08 807 $ 9.43 Exercisable at March 31, 2017 1,878 $ 7.04 (1) Represents weighted average market value of the shares; awards are granted at no cost to the recipients. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 11. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share from continuing operations for the three months ended March 31, 2017 and 2016 (in thousands, except per share data). Three Months Ended March 31, 2017 2016 Numerator: Income from continuing operations $ 25,026 $ 21,798 Denominator: Basic Weighted average common shares outstanding 53,293 51,572 Diluted Stock options (1) 1,473 831 Restricted stock awards (1) 426 337 Contingent shares (2) 22 5 Diluted weighted average common shares outstanding 55,214 52,745 Basic earnings per share from continuing operations $ 0.47 $ 0.42 Diluted earnings per share from continuing operations $ 0.45 $ 0.41 (1) No share based awards were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2017, and a total of 1.4 million share based awards were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2016 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 conditions have been met. Refer to Note 12, Acquisitions |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Note 12. Acquisitions First Quarter 2017 During the three months ended March 31, 2017, we acquired substantially all of assets of one business; Pacific Coastal Pension and Insurance Services, Inc. (“Pacific Coastal”). Aggregate consideration for this acquisition consisted of approximately $0.6 million in cash consideration and $1.7 million in contingent consideration. Under the terms of the acquisition agreement, a portion of the purchase price is contingent on future performance of the business acquired. Utilizing a probability weighted income approach, we determined that the fair value of the contingent consideration arrangement for this acquisition was $1.7 million, of which $0.5 million was recorded in “Contingent purchase price liability – current” and $1.2 million was recorded in “Contingent purchase price liability – non-current” in the accompanying Consolidated Balance Sheets at March 31, 2017. Annualized revenue attributable to Pacific Coastal is estimated to be approximately $1.4 million. Pro forma results of operations for this acquisition have not been presented because the effects of the acquisition were not material to our “Income from continuing operations before income taxes.” The acquisition of Pacific Coastal, located in Morgan Hill, California, was effective February 1, 2017. Pacific Coastal provides defined contribution third party administrative and consulting services. Operating results are reported in the Benefits and Insurance Services practice group. The estimated fair values of the assets acquired and the liabilities assumed during the three months ended March 31, 2017 are as follows (in thousands): Three Months Ended March 31, 2017 Accounts receivable, net $ 161 Identifiable intangible assets 897 Current liabilities (309 ) Total identifiable net assets $ 749 Goodwill 1,515 Aggregate purchase price $ 2,264 The goodwill of $1.5 million arising from the acquisition in the first three months of 2017 primarily results from expected future earnings and cash flows from the existing management team, as well as the synergies created by the integration of the new business within the CBIZ 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. A significant portion of the goodwill is deductible for income tax purposes. The operating results of Pacific Coastal are included in the accompanying consolidated financial statements beginning on the date of acquisition. First Quarter 2016 During the three months ended March 31, 2016, we acquired substantially all of the non-attest assets of one business; Millimaki Eggert, L.L.P., (“Millimaki”). Aggregate consideration for this acquisition consisted of approximately $1.1 million in cash consideration and $1.2 million in contingent consideration. Under the terms of the acquisition agreement, a portion of the purchase price is contingent on future performance of the business acquired. Utilizing a probability weighted income approach, we determined that the fair value of the contingent consideration arrangement for this acquisition was $1.2 million, of which $0.5 million was recorded in “Contingent purchase price liability – current” and $0.7 million was recorded in “Contingent purchase price liability – non-current” in the Consolidated Balance Sheets at March 31, 2016. Annualized revenue attributable to Millimaki is estimated to be approximately $2.4 million. Pro forma results of operations for this acquisition have not been presented because the effects of the acquisition were not material to our “Income from continuing operations before income taxes.” The acquisition of Millimaki, located in San Diego, California, was effective January 1, 2016. Millimaki provides professional tax, accounting, and financial services, with a specialty niche practice in the real estate sector, to closely held businesses, their owners, and mid-to-high net worth individuals. Operating results are reported in the Financial Services practice group. The estimated fair values of the assets acquired and the liabilities assumed during the three months ended March 31, 2016 were as follows (in thousands): Three Months Ended March 31, 2016 Accounts receivable, net $ 325 Other assets 38 Identifiable intangible assets 1,005 Current liabilities (49 ) Total identifiable net assets $ 1,319 Goodwill 988 Aggregate purchase price $ 2,307 The goodwill of $1.0 million arising from the acquisition in the first three months of 2016 primarily results from expected future earnings and cash flows from the existing management team, as well as the synergies created by the integration of the new business within the CBIZ 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. All of the goodwill is deductible for income tax purposes. The operating results of Millimaki are included in the accompanying consolidated financial statements beginning on the date of acquisition. Client Lists During the three months ended March 31, 2017, we did not purchase any client lists. During the three months ended March 31, 2016, we purchased two clients lists, both of which are reported in the Benefits and Insurance Services practice group. Total consideration for these client lists was $0.2 million in cash consideration, $1.0 million of guaranteed future consideration and $0.7 million of contingent consideration. Change in Contingent Purchase Price Liability for Previous Acquisitions During the three months ended March 31, 2017 and 2016, the fair value of the contingent purchase price liability related to prior acquisitions increased by $0.6 million and decreased by $1.3 million, respectively. These changes in fair value are attributable to subsequent measurement adjustments based on projected future results of the acquired businesses, net present value adjustments and changes in stock price. These adjustments are included in “Other income, net” in the accompanying Consolidated Statements of Comprehensive Income. Contingent Earnouts for Previous Acquisitions We paid $2.9 million in cash and issued approximately 47,000 shares of our common stock during the three months ended March 31, 2017 for previous acquisitions. During the same period last year, we paid $2.0 million in cash and issued approximately 32,000 shares of our common stock. |
Discontinued Operations and Div
Discontinued Operations and Divestitures | 3 Months Ended |
Mar. 31, 2017 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Discontinued Operations and Divestitures | Note 13. Discontinued Operations and Divestitures We will divest (through sale or closure) business operations that do not contribute to our long-term objectives for growth, or that are not complementary to our target service offerings and markets. Divestitures are classified as discontinued operations provided they meet the criteria as provided in FASB ASC Topic 205 “Presentation of Financial Statements — Discontinued Operations — Other Presentation Matters”. Discontinued Operations Revenue and results from operations of discontinued operations are separately reported as “Loss from discontinued operations, net of tax” in the accompanying Consolidated Statements of Comprehensive Income. During the first three months of both 2017 and 2016, we did not discontinue the operations of any of our businesses. Revenue and results from operations of previously discontinued operations for the three months ended March 31, 2017 and 2016 were as follows (in thousands): Three Months Ended March 31, 2017 2016 Revenue $ — $ — Loss from discontinued operations before income tax $ (254 ) $ (51 ) Income tax benefit (102 ) (21 ) Loss from discontinued operations, net of tax $ (152 ) $ (30 ) Divestitures Gains or losses from divested operations and assets that do not qualify for treatment as discontinued operations are recorded as “Gain on sale of operations, net” in the accompanying Consolidated Statements of Comprehensive Income. During the quarters ended March 31, 2017 and 2016, we did not sell any operations. Gains recorded for the three months ended March 31, 2017 and 2016, respectively, relate to contingent consideration earned on sales made in previous periods. |
Segment Disclosures
Segment Disclosures | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Disclosures | Note 14. Segment Disclosures Our Financial Services Benefits and Insurance Services National Practices • Accounting and Tax • Government Healthcare Consulting • Financial Advisory • Valuation • Risk & Advisory Services • Group Health Benefits Consulting • Payroll • Property & Casualty • Retirement Plan Services • Managed Networking and Hardware Services • Healthcare Consulting Corporate and Other . Included in “Corporate and Other” are operating expenses that are not directly allocated to the individual business units. These expenses are primarily comprised of certain health care costs, gains or losses attributable to assets held in the Company’s non-qualified deferred compensation plan, share-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, Organization and Summary of Significant Accounting Policies Segment information for the three months ended March 31, 2017 and 2016 was as follows (in thousands): Three Months Ended March 31, 2017 Financial Services Benefits and Insurance Services National Practices Corporate and Other Total Revenue $ 158,633 $ 75,164 $ 7,662 $ — $ 241,459 Operating expenses 119,389 60,142 7,007 6,228 192,766 Gross margin 39,244 15,022 655 (6,228 ) 48,693 Corporate general & admin — — — 8,768 8,768 Operating income (loss) 39,244 15,022 655 (14,996 ) 39,925 Other income (expense): Interest expense — (11 ) — (1,506 ) (1,517 ) Gain on sale of operations, net — — — 22 22 Other income, net 15 96 — 2,626 2,737 Total other income 15 85 — 1,142 1,242 Income (loss) from continuing operations before income tax expense $ 39,259 $ 15,107 $ 655 $ (13,854 ) $ 41,167 Three Months Ended March 31, 2016 Financial Services Benefits and Insurance Services National Practices Corporate and Other Total Revenue $ 152,207 $ 64,327 $ 7,704 $ — $ 224,238 Operating expenses 113,497 53,680 6,877 4,063 178,117 Gross margin 38,710 10,647 827 (4,063 ) 46,121 Corporate general & admin — — — 10,245 10,245 Operating income (loss) 38,710 10,647 827 (14,308 ) 35,876 Other income (expense): Interest expense — (10 ) — (1,516 ) (1,526 ) Gain on sale of operations, net — — — 101 101 Other income, net 254 74 — 1,819 2,147 Total other income 254 64 — 404 722 Income (loss) from continuing operations before income tax expense $ 38,964 $ 10,711 $ 827 $ (13,904 ) $ 36,598 |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Changes And Error Corrections [Abstract] | |
New Accounting Pronouncements | Note 15. New Accounting Pronouncements The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the sole source of authoritative GAAP other than the Securities and Exchange Commission (“SEC”) issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update (“ASU”) to communicate changes to the FASB codification. We assess and review the impact of all ASU's. ASU's not listed below were reviewed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements. Accounting Standards Adopted in 2017 Share-Based Compensation: In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718) – Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which requires the tax effects related to share-based payments to be recorded through the income statement and simplifies the accounting requirements for forfeitures and employers' tax withholding requirements. We elected prospective treatment in regards to ASU 2016-09 beginning January 1, 2017. At March 31, 2017, the adoption of ASU 2016-09 resulted in an increase of approximately 0.5 million diluted shares and a realized tax benefit of approximately $0.6 million. This tax benefit, previously recorded in additional paid-in capital on our Consolidated Balance Sheets, is now recorded directly to income tax expense in our Consolidated Statements of Comprehensive Income. Tax related cash flows resulting from share-based payments are recorded as operating activities in the Consolidated Statements of Cash Flows. We elected to continue our current policy of estimating forfeitures of share-based compensation awards at the time of grant and revising in subsequent periods to reflect actual forfeitures. Going forward, we anticipate moderate volatility in our effective tax rate adjustments related to our share-based compensation incentives which will be recorded directly into our results of operations. Accounting Standards Not Yet Adopted Subsequent Measurement of Goodwill: In January 2017, the FASB issued ASU No. 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"), which removes Step 2 of the goodwill impairment test. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 should be applied on a prospective basis and is effective for us for annual periods beginning January 1, 2020. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The impact of ASU 2017-04 will depend upon the performance of the reporting units and the market conditions impacting the fair value of each reporting unit going forward. Clarifying the Definition of a Business: In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” (“ASU 2017-01”), which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard will be effective for us as of January 1, 2018. Early adoption is permitted. We are currently evaluating the impact of ASU 2017-01 on our consolidated financial statements. Restricted Cash - Statement of Cash Flows: In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230)” (“ASU 2016-18”), which applies to all entities that have restricted cash or restricted cash equivalents and are required to present a statement of cash flows. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and the amounts generally described as restricted cash or restricted cash equivalents when reconciling beginning-of-period and end-of-period total amounts show on the statement of cash flows. ASU 2016-18 also requires the disclosure of information about the nature of the restriction. This ASU is effective retrospectively for fiscal years and interim periods beginning after December 15, 2017, with early adoption permitted. We are currently assessing the impact of this ASU on our consolidated financial statements. Statement of Cash Flows: In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). This ASU provides guidance for eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 is effective retrospectively for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, with early adoption permitted. We are currently evaluating the impact of this ASU on our consolidated financial statements. Leases: In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”) which is intended to increase transparency and comparability among organizations relating to leases. Under ASU 2016-02, lessees will be required to recognize a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. The FASB retained a dual model for lease classification, requiring leases to be classified as either operating or finance leases to determine recognition in the income statement and statements of cash flows; however, substantially all leases will be required to be recognized on the balance sheets. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. This ASU will also require quantitative and qualitative disclosures regarding key information about leasing arrangements. ASU 2016-02 must be adopted no later than the first quarter of 2019. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We do not believe the new standard will have a significant impact on our liquidity or our debt covenant compliance under our current credit agreements. Revenue from Contracts with Customers: In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606) – Deferral of the Effective Date” (“ASU 2015-14”). ASU 2015-14 defers the effective date of ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which was issued in May 2014, by one year for all entities. ASU 2014-09 introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In accordance with the new standard, we will adopt ASU 2015-14 on January 1, 2018. Companies are permitted two transition methods of adoption under the new standard; 1) the full retrospective method modified retrospective method We have organized a team and have developed a project plan to guide the implementation. The project plan includes working sessions to review, evaluate and document the arrangements with customers under our various reporting units to identify potential differences that would result from applying the requirements of the new standard. We are currently in the process of developing an updated accounting policy, evaluating new disclosure requirements and identifying and implementing appropriate changes to business processes, systems and controls to support recognition and disclosure under the new standard. We have made significant progress on our assessment and will continue our evaluation of using either the full retrospective method or the modified retrospective method and will continue to evaluate the impact on our consolidated financial statements. We expect that there will be some movement in the timing of revenue recognition between quarterly and annual periods in our property and casualty business unit. Since the majority of our arrangements involve contracts that are annual in term, on a year over year basis we do not believe there will be a significant change to the amount of revenue recognized in an annual period. We expect to finalize our evaluation in upcoming quarters of 2017 and will provide updates on our progress in future filings. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16. Subsequent Events None noted. |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Changes And Error Corrections [Abstract] | |
New Accounting Pronouncements | The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the sole source of authoritative GAAP other than the Securities and Exchange Commission (“SEC”) issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update (“ASU”) to communicate changes to the FASB codification. We assess and review the impact of all ASU's. ASU's not listed below were reviewed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements. Accounting Standards Adopted in 2017 Share-Based Compensation: In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718) – Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which requires the tax effects related to share-based payments to be recorded through the income statement and simplifies the accounting requirements for forfeitures and employers' tax withholding requirements. We elected prospective treatment in regards to ASU 2016-09 beginning January 1, 2017. At March 31, 2017, the adoption of ASU 2016-09 resulted in an increase of approximately 0.5 million diluted shares and a realized tax benefit of approximately $0.6 million. This tax benefit, previously recorded in additional paid-in capital on our Consolidated Balance Sheets, is now recorded directly to income tax expense in our Consolidated Statements of Comprehensive Income. Tax related cash flows resulting from share-based payments are recorded as operating activities in the Consolidated Statements of Cash Flows. We elected to continue our current policy of estimating forfeitures of share-based compensation awards at the time of grant and revising in subsequent periods to reflect actual forfeitures. Going forward, we anticipate moderate volatility in our effective tax rate adjustments related to our share-based compensation incentives which will be recorded directly into our results of operations. Accounting Standards Not Yet Adopted Subsequent Measurement of Goodwill: In January 2017, the FASB issued ASU No. 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"), which removes Step 2 of the goodwill impairment test. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 should be applied on a prospective basis and is effective for us for annual periods beginning January 1, 2020. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The impact of ASU 2017-04 will depend upon the performance of the reporting units and the market conditions impacting the fair value of each reporting unit going forward. Clarifying the Definition of a Business: In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” (“ASU 2017-01”), which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard will be effective for us as of January 1, 2018. Early adoption is permitted. We are currently evaluating the impact of ASU 2017-01 on our consolidated financial statements. Restricted Cash - Statement of Cash Flows: In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230)” (“ASU 2016-18”), which applies to all entities that have restricted cash or restricted cash equivalents and are required to present a statement of cash flows. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and the amounts generally described as restricted cash or restricted cash equivalents when reconciling beginning-of-period and end-of-period total amounts show on the statement of cash flows. ASU 2016-18 also requires the disclosure of information about the nature of the restriction. This ASU is effective retrospectively for fiscal years and interim periods beginning after December 15, 2017, with early adoption permitted. We are currently assessing the impact of this ASU on our consolidated financial statements. Statement of Cash Flows: In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). This ASU provides guidance for eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 is effective retrospectively for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, with early adoption permitted. We are currently evaluating the impact of this ASU on our consolidated financial statements. Leases: In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”) which is intended to increase transparency and comparability among organizations relating to leases. Under ASU 2016-02, lessees will be required to recognize a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. The FASB retained a dual model for lease classification, requiring leases to be classified as either operating or finance leases to determine recognition in the income statement and statements of cash flows; however, substantially all leases will be required to be recognized on the balance sheets. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. This ASU will also require quantitative and qualitative disclosures regarding key information about leasing arrangements. ASU 2016-02 must be adopted no later than the first quarter of 2019. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We do not believe the new standard will have a significant impact on our liquidity or our debt covenant compliance under our current credit agreements. Revenue from Contracts with Customers: In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606) – Deferral of the Effective Date” (“ASU 2015-14”). ASU 2015-14 defers the effective date of ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which was issued in May 2014, by one year for all entities. ASU 2014-09 introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In accordance with the new standard, we will adopt ASU 2015-14 on January 1, 2018. Companies are permitted two transition methods of adoption under the new standard; 1) the full retrospective method modified retrospective method We have organized a team and have developed a project plan to guide the implementation. The project plan includes working sessions to review, evaluate and document the arrangements with customers under our various reporting units to identify potential differences that would result from applying the requirements of the new standard. We are currently in the process of developing an updated accounting policy, evaluating new disclosure requirements and identifying and implementing appropriate changes to business processes, systems and controls to support recognition and disclosure under the new standard. We have made significant progress on our assessment and will continue our evaluation of using either the full retrospective method or the modified retrospective method and will continue to evaluate the impact on our consolidated financial statements. We expect that there will be some movement in the timing of revenue recognition between quarterly and annual periods in our property and casualty business unit. Since the majority of our arrangements involve contracts that are annual in term, on a year over year basis we do not believe there will be a significant change to the amount of revenue recognized in an annual period. We expect to finalize our evaluation in upcoming quarters of 2017 and will provide updates on our progress in future filings. |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts receivable, net balances at March 31, 2017 and December 31, 2016 were as follows (in thousands): March 31, December 31, 2017 2016 Trade accounts receivable $ 140,290 $ 132,880 Unbilled revenue 93,843 55,982 Total accounts receivable 234,133 188,862 Allowance for doubtful accounts (13,274 ) (13,508 ) Accounts receivable, net $ 220,859 $ 175,354 |
Goodwill and Other Intangible24
Goodwill and Other Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Components of Goodwill and Other Intangible Assets, Net | The components of goodwill and other intangible assets, net at March 31, 2017 and December 31, 2016 were as follows (in thousands): March 31, December 31, 2017 2016 Goodwill $ 489,039 $ 487,484 Intangible assets: Client lists 173,148 172,343 Other intangible assets 8,031 7,994 Total intangible assets 181,179 180,337 Total goodwill and intangibles assets 670,218 667,821 Accumulated amortization: Client lists (84,646 ) (80,560 ) Other intangible assets (3,168 ) (2,860 ) Total accumulated amortization (87,814 ) (83,420 ) Goodwill and other intangible assets, net $ 582,404 $ 584,401 |
Depreciation and Amortization (
Depreciation and Amortization (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Text Block [Abstract] | |
Depreciation and Amortization Expense for Property and Equipment and Intangible Assets | Depreciation and amortization expense for property and equipment and intangible assets for the three months ended March 31, 2017 and 2016 was as follows (in thousands): Three Months Ended March 31, 2017 2016 Operating expenses $ 5,543 $ 5,130 Corporate general and administrative expenses 98 115 Total depreciation and amortization expense $ 5,641 $ 5,245 |
Debt and Financing Arrangemen26
Debt and Financing Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Unsecured Credit Facility | Rates for the three months ended March 31, 2017 and 2016 were as follows: Three Months Ended March 31, 2017 2016 Weighted average rates 2.52% 2.25% Range of effective rates 2.19% - 4.50% 1.82% - 3.50% |
Summary of Recognized Interest Expense | During the three months ended March 31, 2017 and 2016, we recognized interest expense as follows (in thousands): Three Months Ended March 31, 2017 2016 Credit facility (1) $ 1,517 $ 1,520 2006 Notes (2) — 6 Total interest expense $ 1,517 $ 1,526 (1) Components of interest expense related to the credit facility include amortization of deferred financing costs, commitment fees and line of credit fees. (2) During the second quarter of 2016, we redeemed the remaining 3.125% Convertible Senior Subordinated Notes (the “2006 Notes”) for $750 thousand in cash plus accrued interest under an optional early redemption provision. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments All Other Investments [Abstract] | |
Summary of Bond Activity | The following table summarizes our bond activity for the three months ended March 31, 2017 and the twelve months ended December 31, 2016 (in thousands): Three Months Ended Twelve Months Ended March 31, 2017 December 31, 2016 Fair value at beginning of period $ 44,573 $ 43,142 Purchases 10,418 11,355 Redemptions (940 ) (2,900 ) Maturities and calls (2,485 ) (6,878 ) Change in bond premium 359 (106 ) Fair market value adjustment 148 (40 ) Fair value at end of period $ 52,073 $ 44,573 |
Summary of Outstanding Interest Rate Swaps | The following table summarizes our outstanding interest rate swaps and their classification in the accompanying Consolidated Balance Sheets at March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 Notional Fair Amount Value (1) Balance Sheet Location Interest rate swaps (2) $ 50,000 $ 661 Other non-current assets Interest rate swaps (2) $ 10,000 $ 15 Other current assets December 31, 2016 Notional Fair Amount Value (1) Balance Sheet Location Interest rate swaps (2) $ 50,000 $ 525 Other non-current assets Interest rate swaps (2) $ 10,000 $ 4 Other current assets (1) Refer to Note 8, Fair Value Measurements (2) The notional value of each interest rate swap is $10.0 million, $15.0 million, $25.0 million, and $10.0 million with maturities of 2, 3, 5 and 5 years, respectively. Under the terms of the interest rate swaps, we pay interest at a fixed rate of 0.885% (2-year), 1.155% (3-year), 1.300% (5-year) and 1.120% (5-year) plus applicable margin as stated in the agreement, and receive interest that varies with the one-month LIBOR. |
Summary of Effects of Interest Rate Swap | The following table summarizes the effects of the interest rate swap on CBIZ’s accompanying Consolidated Statements of Comprehensive Income for the three months ended March 31, 2017 and 2016 (in thousands): Gain (Loss) Recognized in AOCL, Net of Tax Gain Reclassified from AOCL into Expense Three Months Ended Three Months Ended March 31, March 31, 2017 2016 2017 2016 Interest rate swap $ 93 $ (532 ) $ 58 $ 105 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 and December 31, 2016 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): Level March 31, 2017 December 31, 2016 Deferred compensation plan assets 1 $ 72,890 $ 69,912 Corporate and municipal bonds 1 $ 52,073 $ 44,573 Interest rate swaps 2 $ 676 $ 529 Contingent purchase price liabilities 3 $ (32,422 ) $ (33,709 ) |
Change in Level 3 Fair Values of Contingent Purchase Price Liabilities | During the three months ended March 31, 2017 and 2016, 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 three months ended March 31, 2017 and 2016 (pre-tax basis) (in thousands): 2017 2016 Beginning balance – January 1 $ (33,709 ) $ (24,817 ) Additions from business acquisitions (1,661 ) (1,206 ) Settlement of contingent purchase price liabilities 3,564 2,335 Change in fair value of contingencies (485 ) 1,263 Change in net present value of contingencies (131 ) (36 ) Ending balance – March 31 $ (32,422 ) $ (22,461 ) |
Other Comprehensive Income (L29
Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Summary of Other Comprehensive Income (Loss) and Tax Impact | The following table is a summary of other comprehensive income (loss) and discloses the tax impact of each component of other comprehensive income (loss) for the three months ended March 31, 2017 and 2016 (in thousands): Three Months Ended March 31, 2017 2016 Net unrealized (loss) gain on available-for-sale securities, net of income taxes (1) $ 89 $ 231 Net unrealized gain (loss) on interest rate swaps, net of income taxes (2) 93 (532 ) Foreign currency translation (2 ) (10 ) Total other comprehensive income (loss) $ 180 $ (311 ) (1) Net of income tax expense of $59 and $92 for the three months ended March 31, 2017 and 2016, respectively. (2) Net of income tax expense (benefit) of $55 and ($312) for the three months ended March 31, 2017 and 2016, respectively. |
Employee Share Plans (Tables)
Employee Share Plans (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Share-Based Compensation Awards | Compensation expense for stock-based awards recognized during the three months ended March 31, 2017 and 2016 was as follows (in thousands): Three Months Ended March 31, 2017 2016 Stock options $ 525 $ 579 Restricted stock awards 849 830 Total stock-based compensation expense $ 1,374 $ 1,409 |
Stock Award Activity | Stock award activity during the three months ended March 31, 2017 was as follows (in thousands, except per share data): Stock Options Restricted Stock Awards Number of Options Weighted Average Exercise Per Share Number of Shares Weighted Grant-Date Fair Value (1) Outstanding at beginning of year 4,376 $ 8.02 827 $ 9.14 Granted — $ — 70 $ 12.85 Exercised (335 ) $ 7.32 (90 ) $ 9.40 Expired or canceled (3 ) $ 6.52 — $ — Outstanding at March 31, 2017 4,038 $ 8.08 807 $ 9.43 Exercisable at March 31, 2017 1,878 $ 7.04 (1) Represents weighted average market value of the shares; awards are granted at no cost to the recipients. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share from Continuing Operations | The following table sets forth the computation of basic and diluted earnings per share from continuing operations for the three months ended March 31, 2017 and 2016 (in thousands, except per share data). Three Months Ended March 31, 2017 2016 Numerator: Income from continuing operations $ 25,026 $ 21,798 Denominator: Basic Weighted average common shares outstanding 53,293 51,572 Diluted Stock options (1) 1,473 831 Restricted stock awards (1) 426 337 Contingent shares (2) 22 5 Diluted weighted average common shares outstanding 55,214 52,745 Basic earnings per share from continuing operations $ 0.47 $ 0.42 Diluted earnings per share from continuing operations $ 0.45 $ 0.41 (1) No share based awards were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2017, and a total of 1.4 million share based awards were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2016 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 conditions have been met. Refer to Note 12, Acquisitions |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Pacific Coastal Pension and Insurance Services, Inc. (Pacific Coastal) [Member] | |
Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The estimated fair values of the assets acquired and the liabilities assumed during the three months ended March 31, 2017 are as follows (in thousands): Three Months Ended March 31, 2017 Accounts receivable, net $ 161 Identifiable intangible assets 897 Current liabilities (309 ) Total identifiable net assets $ 749 Goodwill 1,515 Aggregate purchase price $ 2,264 |
Millimaki Eggert L L P [Member] | |
Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The estimated fair values of the assets acquired and the liabilities assumed during the three months ended March 31, 2016 were as follows (in thousands): Three Months Ended March 31, 2016 Accounts receivable, net $ 325 Other assets 38 Identifiable intangible assets 1,005 Current liabilities (49 ) Total identifiable net assets $ 1,319 Goodwill 988 Aggregate purchase price $ 2,307 |
Discontinued Operations and D33
Discontinued Operations and Divestitures (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Loss from Discontinued Operations, Net of Tax | Revenue and results from operations of previously discontinued operations for the three months ended March 31, 2017 and 2016 were as follows (in thousands): Three Months Ended March 31, 2017 2016 Revenue $ — $ — Loss from discontinued operations before income tax $ (254 ) $ (51 ) Income tax benefit (102 ) (21 ) Loss from discontinued operations, net of tax $ (152 ) $ (30 ) |
Segment Disclosures (Tables)
Segment Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Segment information for the three months ended March 31, 2017 and 2016 was as follows (in thousands): Three Months Ended March 31, 2017 Financial Services Benefits and Insurance Services National Practices Corporate and Other Total Revenue $ 158,633 $ 75,164 $ 7,662 $ — $ 241,459 Operating expenses 119,389 60,142 7,007 6,228 192,766 Gross margin 39,244 15,022 655 (6,228 ) 48,693 Corporate general & admin — — — 8,768 8,768 Operating income (loss) 39,244 15,022 655 (14,996 ) 39,925 Other income (expense): Interest expense — (11 ) — (1,506 ) (1,517 ) Gain on sale of operations, net — — — 22 22 Other income, net 15 96 — 2,626 2,737 Total other income 15 85 — 1,142 1,242 Income (loss) from continuing operations before income tax expense $ 39,259 $ 15,107 $ 655 $ (13,854 ) $ 41,167 Three Months Ended March 31, 2016 Financial Services Benefits and Insurance Services National Practices Corporate and Other Total Revenue $ 152,207 $ 64,327 $ 7,704 $ — $ 224,238 Operating expenses 113,497 53,680 6,877 4,063 178,117 Gross margin 38,710 10,647 827 (4,063 ) 46,121 Corporate general & admin — — — 10,245 10,245 Operating income (loss) 38,710 10,647 827 (14,308 ) 35,876 Other income (expense): Interest expense — (10 ) — (1,516 ) (1,526 ) Gain on sale of operations, net — — — 101 101 Other income, net 254 74 — 1,819 2,147 Total other income 254 64 — 404 722 Income (loss) from continuing operations before income tax expense $ 38,964 $ 10,711 $ 827 $ (13,904 ) $ 36,598 |
Accounts Receivable, Net - Acco
Accounts Receivable, Net - Accounts Receivables Net (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Accounts Receivable Net Current [Abstract] | ||
Trade accounts receivable | $ 140,290 | $ 132,880 |
Unbilled revenue | 93,843 | 55,982 |
Total accounts receivable | 234,133 | 188,862 |
Allowance for doubtful accounts | (13,274) | (13,508) |
Accounts receivable, net | $ 220,859 | $ 175,354 |
Goodwill and Other Intangible36
Goodwill and Other Intangible Assets, Net - Components of Goodwill and Other Intangible Assets, Net (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 489,039 | $ 487,484 |
Intangible assets: | ||
Total intangible assets | 181,179 | 180,337 |
Total goodwill and intangibles assets | 670,218 | 667,821 |
Accumulated amortization: | ||
Total accumulated amortization | (87,814) | (83,420) |
Goodwill and other intangible assets, net | 582,404 | 584,401 |
Client Lists [Member] | ||
Intangible assets: | ||
Total intangible assets | 173,148 | 172,343 |
Accumulated amortization: | ||
Total accumulated amortization | (84,646) | (80,560) |
Other Intangible Assets [Member] | ||
Intangible assets: | ||
Total intangible assets | 8,031 | 7,994 |
Accumulated amortization: | ||
Total accumulated amortization | $ (3,168) | $ (2,860) |
Depreciation and Amortization -
Depreciation and Amortization - Depreciation and Amortization Expense for Property and Equipment and Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Total depreciation expense | $ 5,641 | $ 5,245 |
Operating Expenses [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciation expense | 5,543 | 5,130 |
Corporate General and Administrative Expenses [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciation expense | $ 98 | $ 115 |
Debt and Financing Arrangemen38
Debt and Financing Arrangements - Additional Information (Detail) $ in Millions | Mar. 31, 2017USD ($) |
Debt Disclosure [Abstract] | |
Unsecured credit facility | $ 400 |
Debt and Financing Arrangemen39
Debt and Financing Arrangements (Bank Debt) - Additional Information (Detail) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($)Bank | Dec. 31, 2016USD ($) | |
Debt Disclosure [Abstract] | ||
Unsecured credit facility | $ 400,000 | |
Group of participating banks | Bank | 8 | |
Outstanding balance under applicable credit facility | $ 212,700 | $ 191,400 |
Available funds under credit facility | 122,000 | |
Outstanding letters of credit | $ 2,300 |
Debt and Financing Arrangemen40
Debt and Financing Arrangements - Summary of Unsecured Credit Facility (Detail) | Mar. 31, 2017 | Mar. 31, 2016 |
Debt Instrument [Line Items] | ||
Weighted average rates | 2.52% | 2.25% |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Range of effective rates | 2.19% | 1.82% |
Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Range of effective rates | 4.50% | 3.50% |
Debt and Financing Arrangemen41
Debt and Financing Arrangements - Summary of Recognized Interest Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Debt Instrument [Line Items] | ||
Total interest expense | $ 1,517 | $ 1,526 |
Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Total interest expense | $ 1,517 | 1,520 |
2006 Convertible Senior Subordinated Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total interest expense | $ 6 |
Debt and Financing Arrangemen42
Debt and Financing Arrangements - Summary of Recognized Interest Expense (Parenthetical) (Detail) - 2006 Convertible Senior Subordinated Notes [Member] $ in Millions | Jun. 30, 2016USD ($) |
Debt Instrument [Line Items] | |
Interest rate on Notes | 3.125% |
Principal amount of notes | $ 750 |
Commitments and Contingencies (
Commitments and Contingencies (Letters of Credit and Guarantees) - Additional Information (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Commitments And Contingencies [Line Items] | ||
Letters of credit outstanding | $ 2.3 | |
License bonds outstanding amount | 2.5 | $ 2.3 |
Letters of Credit [Member] | ||
Commitments And Contingencies [Line Items] | ||
Letters of credit outstanding | $ 2.3 | $ 2.3 |
Commitments and Contingencies44
Commitments and Contingencies (Legal Proceedings) - Additional Information (Detail) | Sep. 16, 2016USD ($) | Mar. 31, 2017USD ($)Plaintiff |
Baldino Group [Member] | ||
Commitments And Contingencies [Line Items] | ||
Number of Plaintiffs | Plaintiff | 2 | |
Damages sought amount | $ 16,000,000 | |
Altoona Regional Health System [Member] | Minimum [Member] | ||
Commitments And Contingencies [Line Items] | ||
Damages sought amount | $ 142,000,000 |
Financial Instruments (Bonds) -
Financial Instruments (Bonds) - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Investments Debt And Equity Securities [Abstract] | ||
Corporate and municipal bonds | $ 49.5 | $ 42.4 |
Maturity dates of bonds, start date | 2017-04 | |
Maturity dates of bonds, end date | 2022-05 |
Financial Instruments - Summary
Financial Instruments - Summary of Bond Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||
Fair value at beginning of period | $ 44,573 | $ 43,142 |
Purchases | 10,418 | 11,355 |
Redemptions | (940) | (2,900) |
Maturities and calls | (2,485) | (6,878) |
Change in bond premium | 359 | (106) |
Fair market value adjustment | 148 | (40) |
Fair value at end of period | $ 52,073 | $ 44,573 |
Financial Instruments - Summa47
Financial Instruments - Summary of Outstanding Interest Rate Swaps (Detail) - Interest Rate Swap [Member] - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Other Non-current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 50,000,000 | $ 50,000,000 |
Fair Value | 661,000 | 525,000 |
Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 10,000,000 | 10,000,000 |
Fair Value | $ 15,000 | $ 4,000 |
Financial Instruments - Summa48
Financial Instruments - Summary of Outstanding Interest Rate Swaps (Parenthetical) (Detail) - Interest Rate Swap [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Derivatives, Fair Value [Line Items] | ||
Interest rate swap, description of interest received | Interest that varies with the one-month LIBOR | |
Derivative, Type of Interest Rate Paid on Swap | Fixed | |
Maturities Two Years [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional value | $ 10,000,000 | |
Interest rate swap, fixed interest rate | 0.885% | |
Maturities Three Years [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional value | $ 15,000,000 | |
Interest rate swap, fixed interest rate | 1.155% | |
Maturities Five Years [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional value | $ 10,000,000 | $ 25,000,000 |
Interest rate swap, fixed interest rate | 1.12% | 1.30% |
Derivative, Type of Interest Rate Paid on Swap | Fixed |
Financial Instruments - Summa49
Financial Instruments - Summary of Effects of Interest Rate Swaps (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Derivatives, Fair Value [Line Items] | ||
Gain (Loss) Recognized in AOCL, Net of Tax | $ 93 | $ (532) |
Interest Rate Swap [Member] | Interest Expense [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gain (Loss) Recognized in AOCL, Net of Tax | 93 | (532) |
Gain Reclassified from AOCL into Expense | $ 58 | $ 105 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Corporate and municipal bonds | $ 52,073 | $ 44,573 | $ 43,142 |
Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Deferred compensation plan assets | 72,890 | 69,912 | |
Corporate and municipal bonds | 52,073 | 44,573 | |
Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swaps | 676 | 529 | |
Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent purchase price liabilities | $ (32,422) | $ (33,709) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Fair Value Measurements, Inter-transfers between Levels | $ 0 | $ 0 |
Minimum [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Business Combination Contingent Consideration Liability Extended Term | 2 years | |
Maximum [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Business Combination Contingent Consideration Liability Extended Term | 6 years |
Fair Value Measurements - Chang
Fair Value Measurements - Change in Level 3 Fair Values of Contingent Purchase Price Liabilities (Detail) - Level 3 [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | $ (33,709) | |
Ending balance | (32,422) | |
Contingent Purchase Price Liabilities [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | (33,709) | $ (24,817) |
Additions from business acquisitions | (1,661) | (1,206) |
Settlement of contingent purchase price liabilities | 3,564 | 2,335 |
Change in fair value of contingencies | (485) | 1,263 |
Change in net present value of contingencies | (131) | (36) |
Ending balance | $ (32,422) | $ (22,461) |
Other Comprehensive Income (L53
Other Comprehensive Income (Loss) - Summary of Other Comprehensive Income (Loss) and Tax Impact (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Other Comprehensive Income Loss Net Of Tax Period Increase Decrease [Abstract] | ||
Net unrealized (loss) gain on available-for-sale securities, net of income taxes | $ 89 | $ 231 |
Net unrealized gain (loss) on interest rate swaps, net of income taxes | 93 | (532) |
Foreign currency translation | (2) | (10) |
Total other comprehensive income (loss) | $ 180 | $ (311) |
Other Comprehensive Income (L54
Other Comprehensive Income (Loss) - Summary of Other Comprehensive Income (Loss) and Tax Impact (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Other Comprehensive Income Loss Net Of Tax Period Increase Decrease [Abstract] | ||
Unrealized (loss) gain on available for sale securities, income tax (benefit) expense | $ 59 | $ 92 |
Unrealized gain (loss) on interest rate swaps, income tax expense (benefit) | $ 55 | $ (312) |
Other Comprehensive Income (L55
Other Comprehensive Income (Loss) - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | ||
Accumulated other comprehensive loss | $ (324) | $ (504) |
Employee Share Plans - Addition
Employee Share Plans - Additional Information (Detail) shares in Millions | 3 Months Ended |
Mar. 31, 2017shares | |
Compensation And Retirement Disclosure [Abstract] | |
Maximum stock based compensation awards granted under the plan | 9.6 |
Stock awards expiry | 2,024 |
Employee Share Plans - Schedule
Employee Share Plans - Schedule of Share-Based Compensation Awards (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Compensation And Retirement Disclosure [Abstract] | ||
Stock options | $ 525 | $ 579 |
Restricted stock awards | 849 | 830 |
Total stock-based compensation expense | $ 1,374 | $ 1,409 |
Employee Share Plans - Stock Aw
Employee Share Plans - Stock Award Activity (Detail) shares in Thousands | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Outstanding Beginning balance, Number of Options | shares | 4,376 |
Exercised, Number of Options | shares | (335) |
Expired or canceled, Number of Options | shares | (3) |
Outstanding Ending balance, Number of Options | shares | 4,038 |
Exercisable Ending balance, Number of Options | shares | 1,878 |
Outstanding Beginning balance, Weighted Average Exercise Price Per Share | $ / shares | $ 8.02 |
Exercised, Weighted Average Exercise Price Per Share | $ / shares | 7.32 |
Expired or canceled, Weighted Average Exercise Price Per Share | $ / shares | 6.52 |
Outstanding Ending balance, Weighted Average Exercise Price Per Share | $ / shares | 8.08 |
Exercisable Ending balance, Weighted Average Exercise Price | $ / shares | $ 7.04 |
Restricted Stock Awards [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Outstanding Beginning balance, Number of shares | shares | 827 |
Granted, Number of shares | shares | 70 |
Exercised, Number of shares | shares | (90) |
Outstanding Ending balance, Number of shares | shares | 807 |
Outstanding Beginning balance, Weighted Average Grant-Date Fair Value | $ / shares | $ 9.14 |
Granted, Weighted Average Grant-Date Fair Value | $ / shares | 12.85 |
Exercised, Weighted Average Grant-Date Fair Value | $ / shares | 9.40 |
Outstanding Ending balance, Weighted Average Grant-Date Fair Value | $ / shares | $ 9.43 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share for Continuing Operations (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator: | ||
Income from continuing operations | $ 25,026 | $ 21,798 |
Basic | ||
Weighted average common shares outstanding | 53,293 | 51,572 |
Diluted | ||
Stock options | 1,473 | 831 |
Restricted stock awards | 426 | 337 |
Contingent shares | 22 | 5 |
Diluted weighted average common shares outstanding | 55,214 | 52,745 |
Basic earnings per share from continuing operations | $ 0.47 | $ 0.42 |
Diluted earnings per share from continuing operations | $ 0.45 | $ 0.41 |
Earnings Per Share - Computat60
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share for Continuing Operations (Parenthetical) (Detail) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock Compensation Plan [Member] | ||
Dilutive Securities Included And Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Share based awards excluded from the calculation of diluted earnings per share | 0 | 1,400,000 |
Acquisitions (First Quarter 201
Acquisitions (First Quarter 2017) - Additional Information (Detail) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($)Business | Dec. 31, 2016USD ($) | |
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration, current | $ 14,382 | $ 16,322 |
Contingent consideration, non-current | 18,040 | 17,387 |
Goodwill | $ 489,039 | $ 487,484 |
Pacific Coastal Pension and Insurance Services, Inc. (Pacific Coastal) [Member] | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Number of businesses acquired | Business | 1 | |
Acquired entity, name | Pacific Coastal Pension and Insurance Services, Inc. | |
Consideration paid in cash | $ 600 | |
Contingent consideration | 1,700 | |
Contingent consideration, current | 500 | |
Contingent consideration, non-current | 1,200 | |
Annual revenue | $ 1,400 | |
Effective date of acquisition | Feb. 1, 2017 | |
Goodwill | $ 1,515 |
Acquisitions - Schedule of Esti
Acquisitions - Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 |
Business Acquisition [Line Items] | |||
Goodwill | $ 489,039 | $ 487,484 | |
Pacific Coastal Pension and Insurance Services, Inc. (Pacific Coastal) [Member] | |||
Business Acquisition [Line Items] | |||
Accounts receivable, net | 161 | ||
Identifiable intangible assets | 897 | ||
Current liabilities | (309) | ||
Total identifiable net assets | 749 | ||
Goodwill | 1,515 | ||
Aggregate purchase price | $ 2,264 | ||
Millimaki Eggert L L P [Member] | |||
Business Acquisition [Line Items] | |||
Accounts receivable, net | $ 325 | ||
Other assets | 38 | ||
Identifiable intangible assets | 1,005 | ||
Current liabilities | (49) | ||
Total identifiable net assets | 1,319 | ||
Goodwill | 988 | ||
Aggregate purchase price | $ 2,307 |
Acquisitions (First Quarter 263
Acquisitions (First Quarter 2016) - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Business Acquisition, Contingent Consideration [Line Items] | |||
Contingent consideration, current | $ 14,382 | $ 16,322 | |
Contingent consideration, non-current | 18,040 | 17,387 | |
Goodwill | $ 489,039 | $ 487,484 | |
Millimaki Eggert L L P [Member] | |||
Business Acquisition, Contingent Consideration [Line Items] | |||
Acquired entity, name | Millimaki Eggert, L.L.P. | ||
Consideration paid in cash | $ 1,100 | ||
Contingent consideration | 1,200 | ||
Contingent consideration, current | 500 | ||
Contingent consideration, non-current | 700 | ||
Annual revenue | 2,400 | ||
Effective date of acquisition | Jan. 1, 2016 | ||
Goodwill | $ 988 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) $ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($)Client_Listshares | Mar. 31, 2016USD ($)Client_Listshares | |
Business Acquisition, Contingent Consideration [Line Items] | ||
Increase (Decrease) in fair value of contingent consideration | $ 0.6 | $ (1.3) |
Consideration paid in cash | $ 2.9 | $ 2 |
Number of common stock issued | shares | 47,000 | 32,000 |
Acquisition of Client Lists [Member] | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Number of client list purchased | Client_List | 0 | |
Consideration paid in cash | $ 0.2 | |
Guaranteed future consideration | 1 | |
Contingent consideration | $ 0.7 | |
Acquisition of Client Lists [Member] | Benefit and Insurance Services Practice Group [Member] | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Number of client list purchased | Client_List | 2 |
Discontinued Operations and D65
Discontinued Operations and Divestitures - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2017BusinessOffice | Mar. 31, 2016BusinessOffice | |
Discontinued Operations And Disposal Groups [Abstract] | ||
Number of business divestiture | Office | 0 | 0 |
Number of businesses sold | Business | 0 | 0 |
Discontinued Operations and D66
Discontinued Operations and Divestitures - Loss from Discontinued Operations, Net of Tax (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Discontinued Operations And Disposal Groups [Abstract] | ||
Loss from discontinued operations before income tax | $ (254) | $ (51) |
Income tax benefit | (102) | (21) |
Loss from discontinued operations, net of tax | $ (152) | $ (30) |
Segment Disclosures - Additiona
Segment Disclosures - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2017Practice_Groups | |
Segment Reporting [Abstract] | |
Number of business units of the company | 3 |
Segment Disclosures - Summary o
Segment Disclosures - Summary of Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 241,459 | $ 224,238 |
Operating expenses | 192,766 | 178,117 |
Gross margin | 48,693 | 46,121 |
Corporate general & admin | 8,768 | 10,245 |
Operating income | 39,925 | 35,876 |
Other income (expense): | ||
Interest expense | (1,517) | (1,526) |
Gain on sale of operations, net | 22 | 101 |
Other income, net | 2,737 | 2,147 |
Total other income, net | 1,242 | 722 |
Income from continuing operations before income tax expense | 41,167 | 36,598 |
Operating Segments [Member] | Financial Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 158,633 | 152,207 |
Operating expenses | 119,389 | 113,497 |
Gross margin | 39,244 | 38,710 |
Operating income | 39,244 | 38,710 |
Other income (expense): | ||
Other income, net | 15 | 254 |
Total other income, net | 15 | 254 |
Income from continuing operations before income tax expense | 39,259 | 38,964 |
Operating Segments [Member] | Benefits and Insurance Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 75,164 | 64,327 |
Operating expenses | 60,142 | 53,680 |
Gross margin | 15,022 | 10,647 |
Operating income | 15,022 | 10,647 |
Other income (expense): | ||
Interest expense | (11) | (10) |
Other income, net | 96 | 74 |
Total other income, net | 85 | 64 |
Income from continuing operations before income tax expense | 15,107 | 10,711 |
Operating Segments [Member] | National Practices [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 7,662 | 7,704 |
Operating expenses | 7,007 | 6,877 |
Gross margin | 655 | 827 |
Operating income | 655 | 827 |
Other income (expense): | ||
Income from continuing operations before income tax expense | 655 | 827 |
Corporate and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating expenses | 6,228 | 4,063 |
Gross margin | (6,228) | (4,063) |
Corporate general & admin | 8,768 | 10,245 |
Operating income | (14,996) | (14,308) |
Other income (expense): | ||
Interest expense | (1,506) | (1,516) |
Gain on sale of operations, net | 22 | 101 |
Other income, net | 2,626 | 1,819 |
Total other income, net | 1,142 | 404 |
Income from continuing operations before income tax expense | $ (13,854) | $ (13,904) |
New Accounting Pronouncements -
New Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Thousands, shares in Millions | Mar. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Realized tax benefit | $ 16,141 | $ 14,800 | |
Accounting Standards Update 2016-09 [Member] | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Increase of diluted shares | 0.5 | ||
Realized tax benefit | $ (600) |