Exhibit 99.1
{CBIZ LOGO]
Century Business Services, Inc.
Press release
FOR IMMEDIATE RELEASE CONTACT: Ware Grove
Chief Financial Officer
Century Business Services, Inc.
Cleveland, Ohio
(216) 447-9000
CBIZ REPORTS FOURTH-QUARTER AND FULL-YEAR 2003 RESULTS
FULL-YEAR NET INCOME FROM CONTINUING OPERATIONS INCREASES 92%
Cleveland, Ohio (February 17, 2004)--CBIZ (Century Business Services, Inc.)
(NASDAQ: CBIZ) today announced fourth-quarter and full-year results for the year
ended December 31, 2003.
CBIZ reported revenue of $124.0 million for the fourth quarter ended December
31, 2003, an increase of 3.4% over $119.9 million recorded for the fourth
quarter of 2002. Same-unit revenue for the quarter increased 5.0%, or $5.9
million. Since the fourth quarter of 2002, CBIZ has divested several operations.
The impact on revenue, net of increases from acquisitions completed since the
fourth quarter of 2002 was a reduction in revenue of $1.8 million. The company
recorded net income from continuing operations of $1.6 million, or $0.02 per
diluted share compared with a net loss of $57 thousand recorded for the fourth
quarter a year ago, or $0.00 per diluted share.
For the year ended December 31, 2003, CBIZ reported revenue of $512.8 million,
compared with $499.2 million for 2002. Same-unit revenue for the year increased
2.7%, or $13.1 million. For the full year, the net impact of divestitures, net
of acquisitions was a revenue increase of $400 thousand. Net income from
continuing operations was $15.5 million, an increase of 92% over $8.1 million
reported for 2002. Earnings per diluted share from continuing operations were
$0.17 compared with $0.08 per diluted share reported for 2002.
As of December 31, 2003, the amount outstanding on bank debt was $14 million, a
reduction from $23 million at the end of the third quarter. During 2003, CBIZ
concluded a Dutch Auction Share Repurchase resulting in approximately 10 million
shares being repurchased at a price of $3.30 per share, for a total paid of
approximately $33 million.
Included in fourth-quarter results is a note receivable impairment charge of
approximately $800 thousand, as well as gains on the sale of divested operations
of $528 thousand. Full-year results include a total of $2.4 million of charges
related to the impairment of a note received in connection with an asset sale in
1997, as well as approximately $700 thousand of corporate expense primarily for
severance expense in the first quarter. Gain on the sale of divested operations
for the full year was approximately $2.5 million.
Page 1 of 5
6050 Oak Tree Boulevard, South - Suite 500 - Cleveland, OH 44131 -
Phone (216) 447-9000 - Fax (216) 447-9007
"We are happy with the performance of our business in 2003 and earnings are in
line with our expectations. Same unit revenue growth continues to strengthen. We
have made five acquisitions in the past year and each is performing as planned.
Net income from continuing operations reflects good operating leverage as our
margins have improved," stated Steven Gerard, Chairman and Chief Executive
Officer. "Our cash flow continues to be very strong. Since concluding the share
repurchase in July, we have utilized cash flow to quickly reduce the debt level
through the end of the year," continued Gerard.
OUTLOOK FOR 2004
CBIZ expects financial performance to continue to improve in 2004, however,
remains cautious with respect to the economic outlook. In 2004, CBIZ expects to
achieve revenue growth in the 4% - 6% range, and expects to improve earnings per
share by 25% to 30% over the $0.17 per share recorded for 2003. Cash flow will
continue to be strong, and CBIZ expects EBITDA to be approximately $50 million
in 2004.
CBIZ will host a conference call later this morning to discuss its results. The
call will be webcast in a listen-only mode over the Internet for the media and
the public, and can be accessed at www.cbiz.com. Shareholders and analysts
wishing to participate in the conference call may dial 1-888-862-6557 several
minutes before 11:00 a.m. (ET). If you are dialing from outside the United
States, dial 1-630-691-2748. A replay of the call will be available starting at
1:00 p.m. (ET) February 17 through midnight (ET), February 20, 2004. The dial-in
number for the replay is 1-877-213-9653. If you are listening from outside the
United States, dial 1-630-652-3041. The access code for the replay is 8312514. 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 may be found in the
Company's filings with the Securities and Exchange Commission.
For further information regarding CBIZ, call our Investor Relations Office at
(216) 447-9000 or visit our web site at www.cbiz.com.
Page 2 of 5
6050 Oak Tree Boulevard, South - Suite 500 - Cleveland, OH 44131 -
Phone (216) 447-9000 - Fax (216) 447-9007
CENTURY BUSINESS SERVICES, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, 2003 AND 2002
(In thousands, except percentages and per share data)
THREE MONTHS ENDED
December 31,
----------------------------------------------------
2003 % 2002 (1) %
--------- ------ --------- ------
Revenue ..................................................... $ 123,971 100.0% $ 119,928 100.0%
Operating expenses .......................................... 111,742 90.1% 109,046 90.9%
--------- ------ --------- ------
Gross margin ................................................ 12,229 9.9% 10,882 9.1%
Corporate general and administrative expense ................ 5,108 4.1% 4,808 4.0%
Depreciation and amortization expense ....................... 4,452 3.6% 5,186 4.3%
--------- ------ --------- ------
Operating income ............................................ 2,669 2.2% 888 0.7%
Other income (expense):
Interest expense ......................................... (201) -0.2% (506) -0.4%
Gain on divested operations, net ......................... 528 0.4% 57 0.0%
Other expense, net ....................................... (428) -0.3% (759) -0.6%
--------- ------ --------- ------
Total other expense, net ......................... (101) -0.1% (1,208) -1.0%
Income (loss) from continuing operations before income
tax expense (benefit) .................................... 2,568 2.1% (320) -0.3%
Income tax expense (benefit)................................. 973 (263)
--------- ------ --------- ------
Income (loss) from continuing operations .................... 1,595 1.3% (57) 0.0%
Loss from operations of discontinued businesses, net of tax.. (408) (1,782)
Gain on disposal of discontinued businesses, net of tax ..... 1,119 670
--------- ------ --------- ------
Net income (loss) ........................................... $ 2,306 1.9% $ (1,169) -1.0%
========= =========
Diluted earnings (loss) per share:
Continuing operations .................................... $ 0.02 $ -
Discontinued operations .................................. 0.01 (0.01)
--------- ---------
Net income (loss) ........................................ $ 0.03 $ (0.01)
========= =========
Diluted shares outstanding ............................... 89,073 94,899
OTHER DATA FROM CONTINUING OPERATIONS:
EBIT (2) .................................................... $ 3,010 $ 129
EBITDA (2) .................................................. $ 7,462 $ 5,315
(1) Certain amounts in the 2002 financial statements have been reclassified to
account for discontinued operations subsequent to December 31, 2002.
(2) EBIT represents income from continuing operations before income taxes,
interest expense, gain on divested operations, and impairment charges for
notes related to the divestiture of an operation in 1997. Impairment
charges for the three months ended December 31, 2003 and 2002 were $769 and
$0, respectively. 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).
Page 3 of 5
6050 Oak Tree Boulevard, South - Suite 500 - Cleveland, OH 44131 -
Phone (216) 447-9000 - Fax (216) 447-9007
CENTURY BUSINESS SERVICES, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
TWELVE MONTHS ENDED DECEMBER 31, 2003 AND 2002
(In thousands, except percentages and per share data)
TWELVE MONTHS ENDED
December 31,
----------------------------------------------------
2003 % 2002 (1) %
--------- ------ --------- ------
Revenue ....................................................... $ 512,762 100.0% $ 499,209 100.0%
Operating expenses ............................................ 448,707 87.5% 439,916 88.1%
--------- ------ --------- ------
Gross margin .................................................. 64,055 12.5% 59,293 11.9%
Corporate general and administrative expense .................. 19,647 3.8% 19,672 3.9%
Depreciation and amortization expense ......................... 17,161 3.3% 20,474 4.1%
--------- ------ --------- ------
Operating income .............................................. 27,247 5.3% 19,147 3.8%
Other income (expense):
Interest expense ........................................... (1,055) -0.2% (2,478) -0.5%
Gain on divested operations, net ........................... 2,519 0.5% 930 0.2%
Other expense, net ......................................... (1,093) -0.2% (1,073) -0.2%
--------- ------ --------- ------
Total other income (expense), net .................. 371 0.1% (2,621) -0.5%
Income from continuing operations before income
tax expense ................................................ 27,618 5.4% 16,526 3.3%
Income tax expense ............................................ 12,096 8,421
--------- ------ --------- ------
Income from continuing operations ............................. 15,522 3.0% 8,105 1.6%
Loss from operations of discontinued businesses, net of tax ... (932) (2,475)
Gain (loss) on disposal of discontinued businesses,
net of tax .................................................. 726 (2,471)
--------- ------ --------- ------
Income before cumulative effect of change in
accounting principle ........................................ 15,316 3.0% 3,159 0.6%
Cumulative effect of a change in accounting principle,
net of tax .................................................. - (80,007)
-------- ---------
Net income (loss) ............................................. $ 15,316 3.0% $ (76,848) -15.4%
======== =========
Diluted earnings (loss) per share:
Continuing operations ...................................... $ 0.17 $ 0.08
Discontinued operations .................................... - (0.05)
Cumulative effect of change in accounting principle ........ - (0.82)
-------- ---------
Net income (loss) .......................................... $ 0.17 $ (0.79)
======== =========
Diluted shares outstanding ................................. 92,762 96,992
OTHER DATA FROM CONTINUING OPERATIONS:
EBIT (2) ...................................................... $ 28,548 $ 18,872
EBITDA (2) .................................................... $ 45,709 $ 39,346
(1) Certain amounts in the 2002 financial statements have been reclassified to
account for discontinued operations subsequent to December 31, 2002.
(2) EBIT represents income from continuing operations before income taxes,
interest expense, gain on divested operations, and impairment charges for
notes related to the divestiture of an operation in 1997. Impairment
charges for the twelve months ended December 31, 2003 and 2002 were $2,394
and $798, respectively. 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).
Page 4 of 5
6050 Oak Tree Boulevard, South - Suite 500 - Cleveland, OH 44131 -
Phone (216) 447-9000 - Fax (216) 447-9007
CENTURY BUSINESS SERVICES, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
(In thousands, except percentages and ratios)
THREE MONTHS ENDED
December 31,
------------------------------
2003 2002
--------- ---------
REVENUE
Accounting, Tax & Advisory Services ......... $ 41,776 $ 40,310
Benefits & Insurance Services ............... 46,361 42,123
National Practices - Other .................. 15,813 20,193
Medical Practice Management ................. 20,021 17,302
--------- ---------
Total .............................. $ 123,971 $ 119,928
========= =========
TWELVE MONTHS ENDED
December 31,
------------------------------
2003 2002
--------- ---------
REVENUE
Accounting, Tax & Advisory Services ......... $ 203,399 $ 205,726
Benefits & Insurance Services ............... 162,095 150,515
National Practices - Other .................. 71,495 76,812
Medical Practice Management ................. 75,773 66,156
--------- ---------
Total .............................. $ 512,762 $ 499,209
========= =========
YEAR ENDED
December 31,
------------------------------
2003 2002
--------- ---------
Cash and cash equivalents ................... $ 3,791 $ 6,351
Restricted cash ............................. $ 10,880 $ 16,980
Accounts receivable, net .................... $ 111,556 $ 101,939
Total current assets before funds held
for clients ............................... $ 139,840 $ 156,456
Funds held for clients ...................... $ 44,917 $ 49,217
Goodwill and other intangible assets ........ $ 167,280 $ 163,706
TOTAL ASSETS ................................ $ 402,145 $ 433,111
Current liabilities before client fund
obligations ............................... $ 63,487 $ 67,140
Client fund obligations ..................... $ 44,917 $ 49,217
Bank debt ................................... $ 14,000 $ 17,500
TOTAL LIABILITIES ........................... $ 124,307 $ 138,793
Treasury stock .............................. $ (35,087) $ (1,308)
TOTAL STOCKHOLDERS EQUITY ................... $ 277,838 $ 294,318
Bank debt to equity ......................... 5.0% 5.9%
Days sales outstanding (1) .................. 82 79
Shares outstanding .......................... 85,371 94,901
========= =========
Basic shares outstanding .................... 90,400 94,810
========= =========
Diluted shares outstanding .................. 92,762 96,992
========= =========
(1) Days sales outstanding (DSO) represent accounts receivable at the end of
the period (before the allowance for doubtful accounts) divided by daily
revenue (year-to-date revenue divided by number of days in the period).
The Company has included DSO data because such data is commonly used as a
performance measure by analysts and investors and as a measure of the
Company's ability to collect on receivables in a timely manner. DSO
should not be regarded as an alternative or replacement to any measurement
of performance under generally accepted accounting principles (GAAP).
Page 5 of 5
6050 Oak Tree Boulevard, South - Suite 500 - Cleveland, OH 44131 -
Phone (216) 447-9000 - Fax (216) 447-9007