Exhibit 99.1
[logo] PRESS RELEASE
Century Business Services, Inc.
FOR IMMEDIATE RELEASE CONTACT: WARE GROVE
Chief Financial Officer
-or-
LORI NOVICKIS
Corporate Relations
Century Business Services, Inc.
Cleveland, Ohio
(216) 447-9000
CBIZ REPORTS FOURTH-QUARTER AND FULL-YEAR 2004 RESULTS
Cleveland, Ohio (February 23, 2005)--CBIZ (Century Business Services, Inc.)
(NASDAQ: CBIZ) today announced fourth-quarter and full-year results for the year
ended December 31, 2004.
CBIZ reported revenue of $125.5 million for the fourth quarter ended December
31, 2004, an increase of $2.6 million over $122.9 million recorded for the
fourth quarter of 2003. Same-unit revenue for the quarter increased 0.9%, or
$1.2 million. The Company recorded net income from continuing operations of $2.2
million, or $0.03 per diluted share compared with $2.3 million recorded for the
fourth quarter a year ago, or $0.03 per diluted share.
For the year ended December 31, 2004, CBIZ reported revenue of $520.1 million,
compared with $506.8 million for 2003. Same-unit revenue for the year increased
2.8%, or $14.1 million. Newly acquired operations increased revenue by $9.5
million while operations divested since a year ago resulted in a revenue decline
of $10.3 million. Net income from continuing operations was $16.9 million
compared to $16.3 million reported for 2003. Earnings per diluted share from
continuing operations were $0.21 compared with $0.18 per diluted share reported
for 2003.
As of December 31, 2004, the amount outstanding on bank debt was $53.9 million
compared to $14.0 million for year-ended 2003. During 2004, through a tender
offer and open market transactions, CBIZ purchased a total of 10.4 million
shares of its common stock at a total cost of $50.0 million. In addition, the
Company completed four acquisitions during 2004, and has completed the
acquisition of two additional operations since the end of 2004.
As previously disclosed in the Company's prior earnings releases, included in
full year 2004 results are legal expenses associated with the resolution of a
long-standing litigation issue, and an operating loss from one Benefits and
Insurance unit. These items impacted earnings per share by $0.06 in 2004. Also
included in full year results is a $3.5 million favorable impact to tax expense
resulting from a settlement with the IRS relating to prior year tax returns.
This favorable item impacted earnings by $0.04 per share.
"In 2004, CBIZ achieved revenue and earnings contribution growth in our
Accounting, Tax and Advisory group, our National Practices group, and our
Medical Practice Management business. In addition, we are pleased that our
cross-serving revenue increased by 35% compared with the prior year," stated
Steven Gerard, Chairman and Chief Executive Officer. "Our operations continued
to generate good cash flow in 2004 which we used to acquire new businesses and
to repurchase 10.4 million shares of our common stock during the year,"
continued Gerard.
Page 1 of 5
6050 Oak Tree Boulevard, South o Suite 500 o Cleveland, OH 44131 o
Phone (216) 447-9000 o Fax (216) 447-9007
OUTLOOK FOR 2005
In 2005, CBIZ expects to achieve revenue growth in a range of 5% to 8%, and
expects to continue to improve earnings per share from continuing operations by
20% to 25% over the $0.21 per share recorded for 2004. Cash flow is expected to
be strong, and CBIZ expects EBITDA to be approximately $50 - $53 million in
2005.
CBIZ will host a conference call later this morning to discuss its results. The
call will be webcast in a listen-only mode over the Internet for the media and
the public, and can be accessed at www.cbiz.com. Shareholders and analysts
wishing to participate in the conference call may dial 1-888-545-0687 several
minutes before 11:00 a.m. (ET). If you are dialing from outside the United
States, dial 1-630-691-2764. A replay of the call will be available starting at
1:00 p.m. (ET) February 23 through midnight (ET), February 28, 2005. The dial-in
number for the replay is 1-877-213-9653. If you are listening from outside the
United States, dial 1-630-652-3041. The access code for the replay is 10763709.
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 companies throughout the
United States. As the largest benefits specialist, one of the top accounting
companies, and one of the 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 internal audit; Sarbanes 404 compliance; 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 140 Company offices in 34 states and the
District of Columbia.
Forward-looking statements in this release are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those projected. Such risks
and uncertainties include, but are not limited to, the Company's ability to
adequately manage its growth; the Company's dependence on the current trend of
outsourcing business services; the Company's dependence on the services of its
CEO and other key employees; competitive pricing pressures; general business and
economic conditions; and changes in governmental regulation and tax laws
affecting its insurance business or its business services operations. A more
detailed description of such risks and uncertainties may be found in the
Company's filings with the Securities and Exchange Commission.
For further information 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 o Suite 500 o Cleveland, OH 44131 o
Phone (216) 447-9000 o Fax (216) 447-9007
CENTURY BUSINESS SERVICES, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(In thousands, except percentages and per share data)
THREE MONTHS ENDED
DECEMBER 31,
---------------------------------------------------
--------- ------ --------- ------
2004 % 2003 (1) %
--------- ------ --------- ------
Revenue .......................................................... $ 125,542 100.0% $ 122,889 100.0%
Operating expenses ............................................... 118,740 94.6% 109,618 89.2%
--------- ------ --------- ------
Gross margin ..................................................... 6,802 5.4% 13,271 10.8%
Corporate general and administrative expense (2) ................. 6,498 5.2% 4,885 4.0%
Depreciation and amortization expense ............................ 4,212 3.3% 4,436 3.6%
--------- ------ --------- ------
Operating income (loss) .......................................... (3,908) -3.1% 3,950 3.2%
Other income (expense):
Interest expense ............................................. (469) -0.4% (201) -0.2%
Gain on sale of operations, net .............................. -- 0.0% 528 0.4%
Other income (expense), net (2) .............................. 2,196 1.8% (651) -0.5%
--------- ------ --------- ------
Total other income (loss), net ....................... 1,727 1.4% (324) -0.3%
Income (loss) from continuing operations before income
tax expense .................................................... (2,181) -1.7% 3,626 2.9%
Income tax expense (benefit) ..................................... (4,362) 1,340
--------- ------ --------- ------
Income from continuing operations ................................ 2,181 1.7% 2,286 1.9%
Loss from operations of discontinued businesses, net of tax ...... (343) (1,099)
Gain (loss) on disposal of discontinued businesses, net of tax ... (106) 1,119
--------- ------ --------- ------
Net income ....................................................... $ 1,732 1.4% $ 2,306 1.9%
========= =========
Diluted earnings (loss) per share:
Continuing operations ........................................ $ 0.03 $ 0.03
Discontinued operations ...................................... (0.01) --
--------- ---------
Net income ................................................... $ 0.02 $ 0.03
========= =========
Diluted shares outstanding ................................... 78,449 89,073
OTHER DATA FROM CONTINUING OPERATIONS:
EBIT (3) ......................................................... $ (1,712) $ 4,068
EBITDA (3) ....................................................... $ 2,500 $ 8,504
(1) Certain amounts in the 2003 financial statements have been reclassified to
account for discontinued operations.
(2) Corporate general and administrative expense includes legal settlements,
which were previously classified as other income (expense), net.
(3) EBIT represents income from continuing operations before income taxes,
interest expense, gain on divested operations, and impairment charges for a note
receivable related to the divestiture of an operation in 1997. Impairment
charges for the three months ended December 31, 2004 and 2003 were $0 and $769,
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 o Suite 500 o Cleveland, OH 44131 o
Phone (216) 447-9000 o Fax (216) 447-9007
CENTURY BUSINESS SERVICES, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
TWELVE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(In thousands, except percentages and per share data)
TWELVE MONTHS ENDED
DECEMBER 31,
---------------------------------------------------
--------- ------ --------- ------
2004 % 2003 (1) %
--------- ------ --------- ------
Revenue ................................................... $ 520,057 100.0% $ 506,782 100.0%
Operating expenses ........................................ 459,357 88.3% 441,652 87.1%
--------- ------ --------- ------
Gross margin .............................................. 60,700 11.7% 65,130 12.9%
Corporate general and administrative expense (2) .......... 24,773 4.8% 19,518 3.9%
Depreciation and amortization expense ..................... 16,428 3.2% 17,089 3.4%
--------- ------ --------- ------
Operating income .......................................... 19,499 3.7% 28,523 5.6%
Other income (expense):
Interest expense ....................................... (1,507) -0.3% (1,055) -0.2%
Gain on sale of operations, net ........................ 996 0.2% 2,519 0.5%
Other income (expense), net (2) ........................ 3,554 0.7% (1,209) -0.2%
--------- ------ --------- ------
Total other income, net ........................ 3,043 0.6% 255 0.1%
Income from continuing operations before income
tax expense ............................................. 22,542 4.3% 28,778 5.7%
Income tax expense ........................................ 5,691 12,495
--------- ------ --------- ------
Income from continuing operations ......................... 16,851 3.2% 16,283 3.2%
Loss from operations of discontinued businesses, net
of tax .................................................. (932) (1,693)
Gain on disposal of discontinued businesses, net of tax ... 132 726
--------- ------ --------- ------
Net income ................................................ $ 16,051 3.1% $ 15,316 3.0%
========= =========
Diluted earnings (loss) per share:
Continuing operations .................................. $ 0.21 $ 0.18
Discontinued operations ................................ (0.01) (0.01)
--------- ----------
Net income ............................................. $ 0.20 $ 0.17
========= ==========
Diluted shares outstanding ............................. 81,477 92,762
OTHER DATA FROM CONTINUING OPERATIONS:
EBIT (3) .................................................. $ 23,053 $ 29,708
EBITDA (3) ................................................ $ 39,481 $ 46,797
(1) Certain amounts in the 2003 financial statements have been reclassified to
account for discontinued operations.
(2) Corporate general and administrative expense includes legal settlements,
which were previously classified as other income (expense), net.
(3) EBIT represents income from continuing operations before income taxes,
interest expense, gain on divested operations, and impairment charges for a note
receivable related to the divestiture of an operation in 1997. Impairment
charges for the twelve months ended December 31, 2004 and 2003 were $0 and
$2,394, 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 o Suite 500 o Cleveland, OH 44131 o
Phone (216) 447-9000 o Fax (216) 447-9007
CENTURY BUSINESS SERVICES, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
(IN THOUSANDS, EXCEPT PERCENTAGES AND RATIOS)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- ---------------------------
2004 2003 (3) 2004 2003 (3)
--------- --------- --------- ----------
REVENUE
Accounting, Tax & Advisory
Services ........................ $ 45,318 $ 41,034 $ 209,077 $ 199,612
Benefits & Insurance Services ..... 38,858 46,361 152,240 162,095
National Practices - Other ........ 18,428 15,473 71,479 69,290
Medical Practice Management ....... 22,938 20,021 87,261 75,785
TOTAL ........................ $ 125,542 $ 122,889 $ 520,057 $ 506,782
GROSS MARGIN
Accounting, Tax & Advisory
Services ........................ $ 1,231 $ (30) $ 28,795 $ 25,160
Benefits & Insurance Services ..... 5,477 11,606 23,549 33,688
National Practices - Other ........ 870 (377) 6,186 (226)
Medical Practice Management ....... 4,094 4,209 15,376 14,219
TOTAL (1) .................... $ 6,802 $ 13,271 $ 60,700 $ 65,130
SELECT BALANCE SHEET DATA AND RATIOS
DECEMBER 31, DECEMBER 31,
2004 2003 (3)
------------ -------------
Cash and cash equivalents ........................ $ 5,291 $ 3,791
Restricted cash .................................. $ 10,089 $ 10,880
Accounts receivable, net ......................... $ 109,683 $ 109,436
Total current assets before funds held for
clients ........................................ $ 145,792 $ 140,050
Funds held for clients ........................... $ 38,236 $ 44,917
Goodwill and other intangible assets ............. $ 172,644 $ 167,280
TOTAL ASSETS ..................................... $ 413,773 $ 402,145
Current liabilities before client fund
obligations .................................... $ 67,864 $ 63,499
Client fund obligations .......................... $ 38,236 $ 44,917
Bank debt ........................................ $ 53,900 $ 14,000
TOTAL LIABILITIES ................................ $ 167,276 $ 124,307
Treasury stock ................................... $ (85,650) $ (35,087)
TOTAL STOCKHOLDERS' EQUITY ....................... $ 246,497 $ 277,838
Bank debt to equity .............................. 21.9% 5.0%
Days sales outstanding (2) ....................... 79 81
Shares outstanding ............................... 75,650 85,371
========= =========
Basic shares outstanding ......................... 79,217 90,400
========= =========
Diluted shares outstanding ....................... 81,477 92,762
========= =========
(1) Includes operating expenses recorded by corporate and not directly allocated
to the business units of $4,870 and $2,137 for the three months ended December
31, 2004 and 2003, and $13,206 and $7,711 for the twelve months ended December
31, 2004 and 2003, respectively.
(2) 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).
(3) Certain amounts in the 2003 financial statements have been reclassified to
account for discontinued operations.
Page 5 of 5
6050 Oak Tree Boulevard, South o Suite 500 o Cleveland, OH 44131 o
Phone (216) 447-9000 o Fax (216) 447-9007