UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 27, 2004
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CENTURY BUSINESS SERVICES, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 22-2769024
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(State or Other Jurisdiction of Incorporation (I.R.S. Employer
or Organization) Identification No.)
0-25890
(Commission File Number)
6050 Oak Tree Boulevard South, Suite 500
Cleveland, Ohio 44131
(Address of Principal Executive Offices)
(Zip Code)
Registrant's Telephone Number, Including Area Code 216-447-9000
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Item 7(c). Exhibits
Exhibit 99.1 Press Release of Century Business Services, Inc. dated July 27,
2004, announcing its financial results for the second quarter
ended June 30, 2004.
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On July 27, 2004, Century Business Services, Inc. (CBIZ) announced its earnings
for the second quarter ended June 30, 2004. A copy of the press release is filed
herewith as Exhibit 99.1. In addition, on July 27, 2004, Century conducted its
earnings conference call for the quarter ended June 30, 2004. On this conference
call, CBIZ disclosed the following additional information:
- A unit within the benefits and insurance segment has experienced
significant growth and is expected to generate between $12 million and
$15 million in revenue during 2004. The business unit was not
positioned for growth at this rate and suffered system, client service
and other operational issues as a result. CBIZ has allocated resources
to support the current level of revenue and future growth, and is in
the process of implementing new systems including a new client service
interface. Revenue adjustments resulting from higher policy
terminations than originally estimated, combined with higher expenses
to support growth by this unit resulted in a negative impact to CBIZ
consolidated pre-tax earnings of approximately $900,000 for the second
quarter of 2004 and $2.5 million for the first six months of 2004. The
impact on year to date earnings per share was approximately $0.02 per
share.
- CBIZ recorded approximately $1.3 million in higher legal expenses in
the first half of 2004 over the first half 2003, approximately half of
which were incurred in the second quarter, to address several
long-standing litigation issues. Legal expenses are classified as
general and administrative expenses.
- To date bank debt is $42 million, a reduction of approximately
$5 million from June 30, 2004.
Barring significant acquisitions or share repurchases, the run rate
for interest expense is expected to be approximately 3.5% on an
average balance of about $40 million for the balance of the year.
- Tax rate for the full year 2004 is expected to be 41% - 42%, down from
approximately 42.5% in prior years. Cash taxes are expected to be
between $8 million and $10 million for 2004.
- To date, CBIZ has achieved approximately $5.2 million in cross-serving
revenue towards our full year target of $9 million incremental
revenue.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CENTURY BUSINESS SERVICES, INC.
Date: August 2, 2004
/s/ WARE H. GROVE
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Ware H. Grove
Chief Financial Officer