CBIZ REPORTS FIRST-QUARTER 2022 RESULTS
CBIZ, a leading financial services provider, reported strong first-quarter results for 2022. Total revenue surged to $391.7 million, marking a 30.3% increase year-over-year. Income from continuing operations rose to $58.1 million or $1.10 per diluted share, up 15.8%. Adjusted EBITDA climbed 26.7% to $92.9 million. The company’s acquisition of Marks Paneth contributed significantly to growth, with 20.7% of revenue growth attributed to acquired operations. CBIZ reaffirms positive revenue growth outlook of 19% to 21% for the year.
- Total revenue increased to $391.7 million, a 30.3% rise year-over-year.
- Same-unit revenue grew by 9.6%, indicating strong organic growth.
- GAAP EPS rose to $1.10, reflecting a 19.6% increase.
- Adjusted EPS improved by 28.3% to $1.18, excluding acquisition costs.
- Adjusted EBITDA increased by 26.7% to $92.9 million.
- Successful integration of the Marks Paneth acquisition contributing to growth.
- Management reaffirmed revenue growth guidance at the high end of 19% to 21%.
- None.
FIRST-QUARTER HIGHLIGHTS:
- TOTAL REVENUE UP
30.3% ; SAME-UNIT REVENUE UP9.6% - GAAP EPS UP
19.6% ; ADJUSTED EPS UP28.3% - INCOME FROM CONTINUING OPERATIONS UP
15.8% ; ADJUSTED EBITDA UP26.7%
CLEVELAND , April 28, 2022 /PRNewswire/ -- CBIZ, Inc., (NYSE: CBZ) ("CBIZ", or the "Company"), a leading provider of financial, insurance and advisory services, today announced results for the first quarter ended March 31, 2022.
For the 2022 first quarter, CBIZ recorded revenue of
Adjusted EBITDA for the quarter was
During the first quarter, the Company repurchased approximately 148 thousand shares of its common stock on the open market. Between March 31, 2022, and April 27, 2022, the Company repurchased an additional 170 thousand shares. The balance outstanding on the Company's unsecured credit facility on March 31, 2022, was
Jerry Grisko, CBIZ President and Chief Executive Officer, said, "We started the year with tremendous momentum and have continued it through the first quarter. We achieved growth across every major business service line fueled by strong client demand for both our essential, recurring services and our more discretionary, project-based services, coupled with our ongoing efforts to enhance pricing."
"We are pleased to report double-digit growth as we successfully navigate this business climate by focusing on our people. Our investments in recruitment, retention and the tools and systems that support our teams enable us to deliver the high-quality service our clients have come to rely on from CBIZ. The initial performance of Marks Paneth, the acquisition we completed in January, bolsters our optimism for the remainder of the year with early results coming in as expected. Given our strong start, we are pleased to reaffirm our guidance at the high end of the range we provided in February," Grisko concluded.
2022 Outlook
- The Company expects revenue to grow within a range of
19% to21% over the prior year. - Although a number of factors may impact the tax rate, the Company expects an effective tax rate of approximately
25% . - The Company expects a weighted average fully diluted share count of approximately 53.0 million shares.
- On a GAAP basis, the Company expects full-year fully diluted earnings per share from continuing operations to grow within a range of
43% to46% , to$1.89 to$1.93 per share, over the$1.32 per share reported in 2021. - The Company expects adjusted fully diluted earnings per share from continuing operations to grow within a range of
20% to22% , to$1.99 to$2.03 per share, over the adjusted$1.66 reported for 2021. A schedule reconciling GAAP Diluted EPS to Non-GAAP Adjusted Diluted EPS is attached.
Conference Call
CBIZ will host a conference call at 11:00 a.m. (ET) today to discuss its results. The call will be webcast and an archived replay will be available at https://cbiz.gcs-web.com/investor-overview. Participants may register at https://dpregister.com/sreg/10165078/f21a7d0e64.
About CBIZ
CBIZ is a leading provider of financial, insurance and advisory services to businesses throughout the United States. Financial services include accounting, tax, government health care consulting, transaction advisory, risk advisory, and valuation services. Insurance services include employee benefits consulting, retirement plan consulting, property and casualty insurance, payroll, and human capital consulting. With more than 100 offices in 32 states, CBIZ is one of the largest accounting and insurance brokerage providers in the U.S. For more information, visit www.cbiz.com.
Forward-Looking Statements
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 impact of COVID-19 on the Company's business and operations and those of our clients; the Company's ability to adequately manage and sustain 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 the Company's 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 at www.sec.gov.
CBIZ, INC. FINANCIAL HIGHLIGHTS (UNAUDITED) THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (In thousands, except percentages and per share data) | ||||||||
Three Months Ended March 31, | ||||||||
2022 | % | 2021 | % | |||||
Revenue | ||||||||
Operating expenses (1) | 290,299 | 74.1 | 223,971 | 74.5 | ||||
Gross margin | 101,423 | 25.9 | 76,759 | 25.5 | ||||
Corporate general and administrative expenses (1) | 16,309 | 4.2 | 14,483 | 4.8 | ||||
Operating income | 85,114 | 21.7 | 62,276 | 20.7 | ||||
Other (expense) income: | ||||||||
Interest expense | (1,259) | (0.3) | (877) | (0.3) | ||||
Other (expense) income, net (1) (2) | (6,403) | (1.6) | 4,789 | 1.6 | ||||
Total other (expense) income, net | (7,662) | (1.9) | 3,912 | 1.3 | ||||
Income from continuing operations before income tax expense | 77,452 | 19.8 | 66,188 | 22.0 | ||||
Income tax expense | 19,321 | 15,972 | ||||||
Income from continuing operations | 58,131 | 14.8 | 50,216 | 16.7 | ||||
Loss from operations of discontinued businesses, net of tax | (4) | (7) | ||||||
Net Income | $ 58,127 | $ 50,209 | ||||||
Diluted income per share: | ||||||||
Continuing operations | $ 1.10 | $ 0.92 | ||||||
Discontinued operations | — | — | ||||||
Net income | $ 1.10 | $ 0.92 | ||||||
Diluted weighted average common shares outstanding | 52,955 | 54,436 | ||||||
Other data from continuing operations: | ||||||||
Adjusted EBITDA (3) | $ 92,896 | $ 73,317 | ||||||
(1) | CBIZ sponsors a deferred compensation plan, under which a CBIZ employee's compensation deferral is held in a rabbi trust and invested accordingly as directed by the employee. Income and expenses related to the deferred compensation plan are included in "Operating expenses" and "Corporate general and administrative expenses," and are directly offset by deferred compensation gains or losses in "Other (expense) income, net." The deferred compensation plan has no impact on "Income from continuing operations before income tax expense." |
Income and expenses related to the deferred compensation plan for the three months ended March 31, 2022, and 2021 are as follows (in thousands): |
Three Months Ended March 31, | |||||||||
2022 | % of Revenue | 2021 | % of Revenue | ||||||
Operating (income) expenses | $ (5,667) | (1.4)% | $ 4,616 | ||||||
Corporate general and administrative (income) expenses | (811) | (0.2)% | 496 | ||||||
Other (expense) income, net | (6,478) | (1.6)% | 5,112 | ||||||
Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the three months ended March 31, 2022, and 2021 are as follows (in thousands): | ||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||
2022 | 2021 | |||||||||||||||
As | Deferred | Adjusted | % of | As | Deferred | Adjusted | % of | |||||||||
Gross margin | $ (5,667) | $ 95,756 | $ 76,759 | $ 4,616 | $ 81,375 | |||||||||||
Operating income | 85,114 | (6,478) | 78,636 | 62,276 | 5,112 | 67,388 | ||||||||||
Other (expense) income, net | (6,403) | 6,478 | 75 | — % | 4,789 | (5,112) | (323) | (0.1)% | ||||||||
Income from continuing operations | 77,452 | — | 77,452 | 66,188 | — | 66,188 | ||||||||||
(2) | Included in "Other (expense) income, net" for the three months ended March 31, 2022 and 2021, is expense of |
(3) | Refer to the financial highlights tables for a reconciliation of Non-GAAP financial measures to the most directly comparable GAAP financial measure, and for additional information as to the |
CBIZ, INC. FINANCIAL HIGHLIGHTS (UNAUDITED) (In thousands) SELECT SEGMENT DATA | ||||
Three Months Ended March 31, | ||||
2022 | 2021 | |||
Revenue | ||||
Financial Services | $ 288,746 | $ 204,149 | ||
Benefits and Insurance Services | 92,486 | 87,239 | ||
National Practices | 10,490 | 9,342 | ||
Total | $ 391,722 | $ 300,730 | ||
Gross Margin | ||||
Financial Services | $ 78,946 | $ 62,403 | ||
Benefits and Insurance Services | 19,829 | 20,306 | ||
National Practices | 914 | 801 | ||
Operating expenses - unallocated (1): | ||||
Other expense | (3,933) | (2,135) | ||
Deferred compensation | 5,667 | (4,616) | ||
Total | $ 101,423 | $ 76,759 | ||
(1) | Represents operating expenses not directly allocated to individual businesses, including stock-based compensation, consolidation and integration charges, and certain advertising expenses. "Operating expenses - unallocated" also includes gains or losses attributable to the assets held in a rabbi trust associated with the Company's deferred compensation plan. These gains or losses do not impact "Income from continuing operations before income tax expense" as they are directly offset by the same adjustment to "Other (expense) income, net" in the Consolidated Statements of Comprehensive Income. Net gains/losses recognized from adjustments to the fair value of the assets held in the rabbi trust are recorded as compensation expense (income) in "Operating expenses" and "Corporate, general and administrative expenses," and offset in "Other (expense) income, net." |
CBIZ, INC. SELECT CASH FLOW DATA (UNAUDITED) (In thousands) | ||||
Three Months Ended March 31, | ||||
2022 | 2021 | |||
Net income | $ 58,127 | $ 50,209 | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Depreciation and amortization expense | 8,173 | 6,252 | ||
Bad debt expense, net of recoveries | 549 | 58 | ||
Adjustments to contingent earnout liability, net | 642 | 660 | ||
Stock-based compensation expense | 3,689 | 2,855 | ||
Other noncash adjustments | 2,996 | 3,444 | ||
Net income, after adjustments to reconcile net income to net cash used in | 74,176 | 63,478 | ||
Changes in assets and liabilities, net of acquisitions and divestitures | (125,062) | (78,299) | ||
Operating cash flows used in continuing operations | (50,886) | (14,821) | ||
Operating cash used in discontinued operations | (4) | (6) | ||
Net cash used in operating activities | (50,890) | (14,827) | ||
Net cash (used in) provided by investing activities | (81,531) | 229 | ||
Net cash provided by (used in) financing activities | 170,446 | (2,960) | ||
Net increase (decrease) in cash, cash equivalents and restricted cash | 38,025 | (17,558) | ||
Cash, cash equivalents and restricted cash at beginning of year | $ 150,474 | $ 170,335 | ||
Cash, cash equivalents and restricted cash at end of period | $ 188,499 | $ 152,777 | ||
Reconciliation of cash, cash equivalents and restricted cash to the | ||||
Cash and cash equivalents | $ 558 | $ 6,778 | ||
Restricted cash | 33,394 | 27,618 | ||
Cash equivalents included in funds held for clients | 154,547 | 118,381 | ||
Total cash, cash equivalents and restricted cash | $ 188,499 | $ 152,777 | ||
CBIZ, INC. SELECT FINANCIAL DATA AND RATIOS (UNAUDITED) (In thousands)
| ||||
March 31, 2022 | December 31, 2021 | |||
Cash and cash equivalents | 558 | 1,997 | ||
Restricted cash | 33,394 | 30,383 | ||
Accounts receivable, net | 365,758 | 242,168 | ||
Current assets before funds held for clients | 412,494 | 293,765 | ||
Funds held for clients | 199,065 | 157,909 | ||
Goodwill and other intangible assets, net | 951,902 | 840,783 | ||
Total assets | 1,942,444 | 1,627,934 | ||
Current liabilities before client fund obligations | 257,761 | 265,174 | ||
Client fund obligations | 200,614 | 158,115 | ||
Total long-term debt, net | 298,541 | 154,851 | ||
Total liabilities | 1,182,596 | 923,386 | ||
Treasury stock | (707,088) | (694,716) | ||
Total stockholders' equity | 759,848 | 704,548 | ||
Debt to equity | ||||
Days sales outstanding (DSO) - continuing operations (1) | 94 | 71 | ||
Shares outstanding | 52,294 | 52,038 | ||
Basic weighted average common shares outstanding | 52,119 | 52,637 | ||
Diluted weighted average common shares outstanding | 52,955 | 53,723 | ||
(1) | DSO is provided for continuing operations and represents accounts receivable, net, at the end of the period, divided by trailing twelve month daily revenue. 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 GAAP. DSO on March 31, 2021 was 91. |
CBIZ, INC. GAAP RECONCILIATION Income from Continuing Operations to Adjusted EBITDA(1) (In thousands)
| |||
Three Months Ended March 31, | |||
2022 | 2021 | ||
Income from continuing operations | $ 58,131 | $ 50,216 | |
Interest expense | 1,259 | 877 | |
Income tax expense | 19,321 | 15,972 | |
Transaction costs related to Marks Paneth (2) | 1,329 | — | |
Integration & retention costs related to Marks Paneth (2) | 4,684 | — | |
Depreciation | 2,779 | 2,553 | |
Amortization | 5,394 | 3,699 | |
Adjusted EBITDA | $ 92,896 | $ 73,317 | |
(1) | CBIZ reports its financial results in accordance with GAAP. This table reconciles Adjusted EBITDA to the most directly comparable GAAP financial measure, "Income from continuing operations." Adjusted EBITDA is not defined by GAAP and should not be regarded as an alternative or replacement to any measurement of performance under GAAP. Adjusted EBITDA is commonly used by the Company, its shareholders and debt holders as a performance measurement to evaluate, assess and benchmark the Company's operational results. |
(2) | These costs include, but are not limited to, certain consulting, technology, personnel, as well as other first year operating and general administrative costs that are non-recurring in nature. |
CBIZ, INC. GAAP RECONCILIATION Income and Diluted Earnings Per Share ("EPS") from Continuing Operations to Adjusted Income and EPS(1) (In thousands, except per share data)
| |||||||
Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | ||||||
Amounts | EPS | Amounts | EPS | ||||
Income from continuing operations | $ 58,131 | $ 1.10 | $ 50,216 | $ 0.92 | |||
Adjustments: | |||||||
Transaction costs related to Marks Paneth (2) | 1,329 | 0.03 | — | — | |||
Integration & retention costs related to Marks Paneth (2) | 4,684 | 0.09 | — | — | |||
Income tax effect related to adjustments | (1,500) | (0.04) | — | — | |||
Adjusted income from continuing operations | $ 62,644 | $ 1.18 | $ 50,216 | $ 0.92 | |||
(1) | CBIZ reports its financial results in accordance with GAAP. This table reconciles Adjusted Income and Adjusted EPS to the most directly comparable GAAP financial measures, "Income from continuing operations" and "Diluted earnings per share from continuing operations." Adjusted Income and Adjusted EPS are not defined by GAAP and should not be regarded as an alternative or replacement to any measurement of performance under GAAP. Adjusted Income and Adjusted EPS, which excludes significant non-operating related gains and losses, are used by the Company for its shareholders and debt holders as a performance measure to evaluate, assess and benchmark the Company's operational results. |
(2) | These costs include, but are not limited to, certain consulting, technology, personnel, as well as other first year operating and general administrative |
CBIZ, INC. GAAP RECONCILIATION Full Year 2022 EPS from Continuing Operations Guidance to Full Year 2022 Adjusted Diluted EPS
| |||
Full Year 2022 Guidance | |||
Low | High | ||
Diluted EPS - GAAP Guidance | $ 1.89 | $ 1.93 | |
Transaction and integration costs related to Marks Paneth (1) | 0.10 | 0.10 | |
Adjusted Diluted EPS Guidance | $ 1.99 | $ 2.03 | |
GAAP Diluted EPS for 2021 | $ 1.32 | $ 1.32 | |
Adjusted Diluted EPS for 2021 (2) | $ 1.66 | $ 1.66 | |
GAAP Diluted EPS Range | |||
Adjusted Diluted EPS Range | |||
(1) | Includes estimated transaction and integration costs related to the Marks Paneth acquisition. Such costs include, but are not limited to, certain consulting, technology, personnel, as well as other first year operating and general administrative costs that are non-recurring in nature. |
(2) | A reconciliation between income from continuing operations and adjusted income from continuing operations and a reconciliation between GAAP Diluted EPS and Adjusted Diluted EPS for fiscal year ended December 31, 2021 are presented as follows: |
Twelve Months Ended December 31, 2021 | |||
In thousands | EPS | ||
Income from continuing operations | $ 70,911 | $ 1.32 | |
Adjustments: | |||
Gain on sale of operations, net | (6,311) | (0.12) | |
Legal settlement, net | 30,468 | 0.57 | |
Income tax effect related to adjustments | (5,746) | (0.11) | |
Adjusted income from continuing operations | $ 89,322 | $ 1.66 | |
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SOURCE CBIZ, Inc.
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