Exhibit 99.1
[CENTURY BUSINESS SERVICES, INC. LETTERHEAD] [PRESS RELEASE GRAPHIC]
FOR IMMEDIATE RELEASE CONTACT: WARE GROVE
Chief Financial Officer
-or-
KATE KOWALSKI
Director, Corporate Relations
Century Business Services, Inc.
Cleveland, Ohio
(216) 447-9000
CBIZ REPORTS SECOND-QUARTER 2003 RESULTS
Cleveland, Ohio (July 29, 2003)--CBIZ (Century Business Services, Inc.) (NASDAQ:
CBIZ) today announced its financial results for the second quarter of 2003.
CBIZ reported revenue of $126.1 million for the quarter ended June 30, 2003, an
increase of approximately $0.9 million over last year's second-quarter revenue
of $125.2 million. Same-unit revenue for the second quarter was flat compared
with a year ago with the increase in overall revenue attributed to acquisitions.
Net income from continuing operations for the quarter was $3.3 million, or $0.03
per diluted share, compared with $2.0 million, or $0.02 per diluted share,
recorded for the second quarter of 2002.
Second-quarter results include a $1.8 million pre-tax gain on sale, primarily
related to the sale of Health Administration Services, Inc. which was announced
on June 9, 2003. Also included in the second-quarter results is an impairment
charge of approximately $400,000 relating to a note receivable which is
reflected in other income (expense).
As of June 30, 2003, CBIZ had utilized cash flow to completely eliminate bank
debt and held $2.6 million in short-term surplus cash investments. This compares
with a bank debt balance of $33 million as of June 30 a year ago.
"Our second-quarter results demonstrate continued progress compared with a year
ago," remarked Steven L. Gerard, Chairman and Chief Executive Officer. "Our
operating results continue to improve, and are in line with our expectations for
2003 despite the continuing weak economy. Our strong cash flow enabled CBIZ to
commence a Dutch Auction Tender Offer during the second quarter which we
successfully concluded in July with the purchase of approximately 10 million
shares. The favorable impact from this transaction will be reflected in our
full-year 2003 results.
"Our acquisition program continues to target specific opportunities where we can
strengthen our business," continued Gerard. "In the past 90 days, we announced
acquisitions in the Salt Lake City and Southern
Page 1 of 4
California markets, and the hiring of a team of five individuals who will
strengthen our corporate recovery business throughout the country."
For the six-month period ended June 30, 2003, CBIZ reported revenue of $272.4
million compared with $267.4 million for the six-month period a year ago.
Same-unit revenue increased 1.0% for the first six months. Acquisitions, net of
divestitures, contributed approximately 1.0% to revenue growth for the first six
months of 2003. Net income from continuing operations increased to $13.6 million
in 2003, or $0.14 per diluted share, from $12.0 million for the first six months
of 2002, or $0.12 per diluted share. In addition to the items included in the
second-quarter results, the first six months' results include an impairment
charge of $1.6 million reflected in other income (expense) and approximately
$0.7 million of corporate general expense primarily associated with
severance-related expense in connection with corporate restructuring activities
in the first quarter.
CBIZ will host a conference call today at 11 a.m. (ET) to discuss these results.
The call will be webcast in a listen-only mode over the Internet for the media
and the public, and can be accessed at www.cbiz.com. Investors and analysts can
participate in the conference call by dialing 1-866-868-1109 several minutes
before 11:00 a.m. (ET). If you are dialing from outside the United States, dial
1-847-413-2404. A replay of the call will be available starting at 1:00 p.m.
(ET) July 29 through midnight (ET), August 1, 2003. The dial-in number for the
replay is 1-888-843-8996. If you are listening from outside the United States,
dial 1-630-652-3044. The access code for the replay is 7459460. A replay of the
webcast will also be available on the Company's web site at www.cbiz.com.
CBIZ is a provider of outsourced business services to small and medium-sized
companies throughout the United States. As the largest benefits specialist, the
ninth-largest accounting company, and one of the ten largest valuation and
medical practice management companies in the United States, CBIZ provides
integrated services in the following areas: accounting and tax; employee
benefits; wealth management; property and casualty insurance; payroll; IS
consulting; and HR consulting. CBIZ also provides valuation; litigation
advisory; government relations; commercial real estate advisory; wholesale life
and group insurance; healthcare consulting; medical practice management;
worksite marketing; and capital advisory services. These services are provided
throughout a network of more than 160 Company offices in 33 states and the
District of Columbia.
Forward-looking statements in this release are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those projected. Such risks
and uncertainties include, but are not limited to, the Company's ability to
adequately manage its growth; the Company's dependence on the current trend of
outsourcing business services; the Company's dependence on the services of its
CEO and other key employees; competitive pricing pressures; general business and
economic conditions; and changes in governmental regulation and tax laws
affecting its insurance business or its business services operations. A more
detailed description of such risks and uncertainties can be found in the
Company's filings with the Securities and Exchange Commission.
For further information regarding CBIZ, call the Investor Relations Office at
(216) 447-9000 or visit www.cbiz.com.
6480 Rockside Woods Blvd., South * Suite 330 * Cleveland, OH 44131 *
Phone (216) 447-9000 * Fax (216) 447-9007
Page 2 of 4
CENTURY BUSINESS SERVICES, INC.
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PERCENTAGES AND PER SHARE DATA)
THREE MONTHS ENDED
JUNE 30,
---------------------------------------
2003 % 2002 (1) %
--------- ----- --------- -----
Revenue $ 126,080 100.0% $ 125,163 100.0%
Operating expenses 112,489 89.2% 112,128 89.6%
--------- ----- --------- -----
Gross margin 13,591 10.8% 13,035 10.4%
Corporate general and administrative 4,772 3.8% 5,159 4.1%
Depreciation and amortization 4,350 3.5% 5,007 4.0%
--------- ----- --------- -----
Operating income 4,469 3.5% 2,869 2.3%
Other income (expense):
Interest expense (297) -0.2% (653) -0.5%
Gain on divested operations, net 1,784 1.4% 86 0.1%
Other income (expense), net (155) -0.1% 1,104 0.9%
--------- ----- --------- -----
Total other income, net 1,332 1.1% 537 0.4%
Income from continuing operations before income
tax expense 5,801 4.6% 3,406 2.7%
Income tax expense 2,468 1,452
--------- ----- --------- -----
Income from continuing operations 3,333 2.6% 1,954 1.6%
Income from operations of discontinued business, net of tax 97 74
Loss on disposal of discontinued business, net of tax (183) (892)
--------- ----- --------- -----
Income before cumulative effect of change in accounting
principle 3,247 2.6% 1,136 0.9%
Cumulative effect of a change in accounting principle, net of
tax --
--------- ----- --------- -----
Net income $ 3,247 2.6% $ 1,136 0.9%
========= =========
Diluted earnings (loss) per share:
Continuing operations $ 0.03 $ 0.02
Discontinued operations -- (0.01)
Cumulative effect of change in accounting principle -- --
--------- ---------
Net income $ 0.03 $ 0.01
========= =========
Diluted shares outstanding 97,178 97,595
OTHER DATA FROM CONTINUING OPERATIONS:
EBIT (2) $ 4,314 $ 3,973
EBITDA (2) $ 8,664 $ 8,980
(1) Certain amounts in the 2002 financial statements have been reclassified to
account for discontinued operations subsequent to June 30, 2002, and the
adoption of SFAS No. 142, "Goodwill and Other Intangible Assets."
(2) EBIT represents income from continuing operations before income taxes,
interest expense, and gain on divested operations. EBITDA represents EBIT
as defined above before depreciation and amortization expense. The Company
has included EBIT and EBITDA data because such data is commonly used as a
performance measure by analysts and investors and as a measure of the
Company's ability to service debt. EBIT and EBITDA should not be regarded
as an alternative or replacement to any measurement of performance under
generally accepted accounting principles (GAAP).
6480 Rockside Woods Blvd., South * Suite 330 * Cleveland, OH 44131 *
Phone (216) 447-9000 * Fax (216) 447-9007
Page 3 of 4
CENTURY BUSINESS SERVICES, INC.
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PERCENTAGES AND PER SHARE DATA)
SIX MONTHS ENDED
JUNE 30,
---------------------------------------
2003 % 2002 (1) %
--------- ----- --------- -----
Revenue $ 272,375 100.0% $ 267,367 100.0%
Operating expenses 230,550 84.6% 227,522 85.1%
--------- ----- --------- -----
Gross margin 41,825 15.4% 39,845 14.9%
Corporate general and administrative 10,021 3.7% 10,029 3.8%
Depreciation and amortization 8,647 3.2% 9,938 3.7%
--------- ----- --------- -----
Operating income 23,157 8.5% 19,878 7.4%
Other income (expense):
Interest expense (620) -0.2% (1,471) -0.6%
Gain on divested operations, net 1,784 0.7% 1,110 0.4%
Other income (expense), net (693) -0.3% 1,606 0.6%
--------- ----- --------- -----
Total other income, net 471 0.2% 1,245 0.5%
Income from continuing operations before income
tax expense 23,628 8.7% 21,123 7.9%
Income tax expense 10,043 9,085
--------- ----- --------- -----
Income from continuing operations 13,585 5.0% 12,038 4.5%
Loss from operations of discontinued business, net of tax (154) (366) -0.1%
Loss on disposal of discontinued business, net of tax (183) (1,236) -0.5%
--------- ----- --------- -----
Income before cumulative effect of change in accounting
principle 13,248 4.9% 10,436 3.9%
Cumulative effect of a change in accounting principle, net of
tax -- (80,007)
--------- ----- --------- -----
Net income (loss) $ 13,248 4.9% $ (69,571) -26.0%
========= ========
Diluted earnings (loss) per share:
Continuing operations $ 0.14 $ 0.12
Discontinued operations -- (0.02)
Cumulative effect of change in accounting principle -- (0.82)
--------- --------
Net income (loss) $ 0.14 $ (0.72)
========= ========
Diluted shares outstanding 97,073 97,349
OTHER DATA FROM CONTINUING OPERATIONS:
EBIT (2) $ 22,464 $ 21,484
EBITDA (2) $ 31,111 $ 31,422
(1) Certain amounts in the 2002 financial statements have been reclassified to
account for discontinued operations subsequent to June 30, 2002, and the
adoption of SFAS No. 142, "Goodwill and Other Intangible Assets."
(2) EBIT represents income from continuing operations before income taxes,
interest expense, and gain on divested operations. EBITDA represents EBIT
as defined above before depreciation and amortization expense. The Company
has included EBIT and EBITDA data because such data is commonly used as a
performance measure by analysts and investors and as a measure of the
Company's ability to service debt. EBIT and EBITDA should not be regarded
as an alternative or replacement to any measurement of performance under
generally accepted accounting principles (GAAP).
6480 Rockside Woods Blvd., South * Suite 330 * Cleveland, OH 44131 *
Phone (216) 447-9000 * Fax (216) 447-9007
Page 4 of 4