Insperity Announces First Quarter Results
Insperity, a top provider of HR solutions, reported a 5% revenue increase to $1.3 billion for Q1 2021, with net income of $61.9 million ($1.59 EPS). Adjusted EPS rose 7% to $1.82, driven by a stable client base and new sales. Gross profit increased 7% to $251.4 million, surpassing forecasts. Operating expenses grew 13% but were flat when excluding performance-based compensation. The company repurchased 340,000 shares for $29.7 million. Insperity raised its earnings outlook for 2021, with Q2 adjusted EPS guidance between $0.60 and $0.70.
- Revenue up 5% to $1.3 billion in Q1 2021.
- Net income increased to $61.9 million, resulting in $1.59 EPS.
- Adjusted EPS rose 7% to $1.82.
- Gross profit increased by 7% to $251.4 million.
- Share repurchase program of 340,000 shares at $29.7 million.
- Operating expenses increased by 13% compared to Q1 2020.
- Average WSEEs declined by an expected 2%.
Insperity, Inc. (NYSE: NSP), a leading provider of human resources and business performance solutions for America’s best businesses, today reported results for the first quarter ended Mar. 31, 2021:
-
Q1 revenue increased
5% to$1.3 billion -
Q1 net income and diluted EPS of
$61.9 million and$1.59 , respectively -
Q1 adjusted EPS up
7% to$1.82 -
Q1 adjusted EBITDA up
3% to$104.2 million
First Quarter Results
For the first quarter of 2021, reported net income and diluted earnings per share (“EPS”) were
The average number of worksite employees (“WSEEs”) paid per month in Q1 2021 was 233,170 WSEEs, which was at the mid-point of our expected range. As for the three drivers of our growth, WSEEs paid from new sales and client retention were both in line with our forecast, while net gains from hiring in our client base exceeded our expectations. Revenue in Q1 2021 increased
“We are pleased with our strong Q1 results and our growth momentum driven by solid sales, client retention and growth in the client base in the face of the ongoing pandemic,” said Paul J. Sarvadi, Insperity chief executive officer and chairman. “The diligent and effective support provided by Insperity employees has helped our resilient client base weather the storm of the pandemic and emerge with confidence in the future. The combination of solid execution and strong demand for our services positions Insperity well for growth acceleration over the balance of the year, as we lay the foundation to return to double-digit unit growth and profitability.”
Gross profit increased by
Operating expenses increased
Cash outlays during Q1 2021 included the repurchase of 340,000 shares of stock at a cost of
“With our strong Q1 results, and positive trends in our growth, pricing and direct costs, we are raising our earnings outlook for the remainder of 2021,” said Douglas S. Sharp, Insperity senior vice president of finance, chief financial officer and treasurer. “With our solid balance sheet and the expectation for continued strong cash flow, we plan to continue to invest in our growth, while providing attractive returns to our shareholders through our dividend and share repurchase programs.”
2021 Guidance
The company also announced its updated guidance for 2021, including the second quarter of 2021. Please refer to the accompanying financial tables at the end of this press release for the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures.
|
Q2 2021 |
|
Full Year 2021 |
||||
|
|
|
|
|
|
|
|
Average WSEEs paid(a) |
239,300 |
— |
241,600 |
|
243,600 |
— |
248,300 |
Year-over-year increase |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
Adjusted EPS(b) |
|
— |
|
|
|
— |
|
Year-over-year decrease |
(61)% |
— |
(55)% |
|
(17)% |
— |
(5)% |
|
|
|
|
|
|
|
|
Adjusted EBITDA (in millions)(b) |
|
— |
|
|
|
— |
|
Year-over-year decrease |
(52)% |
— |
(47)% |
|
(13)% |
— |
(3)% |
____________________________________ |
||
(a) |
Q2 2021 guidance for average WSEEs paid represents |
|
(b) |
Q2 2021 Adjusted EPS and Adjusted EBITDA comparisons to Q2 2020 reflect the unusually low benefits costs incurred during Q2 2020 due to health care deferrals and stay at home orders during the COVID-19 pandemic onset. |
|
Definition of Key Metrics
Average WSEEs paid - Determined by calculating the company’s cumulative worksite employees paid during the period divided by the number of months in the period.
Adjusted EPS - Represents diluted net income per share computed in accordance with GAAP, excluding the impact of non-cash stock-based compensation.
Adjusted EBITDA - Represents net income computed in accordance with GAAP, plus interest expense, income taxes, depreciation and amortization expense and non-cash stock-based compensation.
Conference Call and Webcast
Insperity will be hosting a conference call today at 5 p.m. ET to discuss these results, and the guidance discussed in this press release, and answer questions from investment analysts. To listen in, call 877-651-0053 and use conference i.d. number 4536156. The call will also be webcast at http://ir.insperity.com. The conference call script will be available at the same website later today. A replay of the conference call will be available at 855-859-2056, conference i.d. 4536156. The webcast will be archived for one year.
About Insperity
Since 1986, Insperity’s mission has been to help businesses succeed so communities prosper. Offering the most comprehensive suite of scalable HR solutions available in the marketplace, Insperity is defined by an unrivaled breadth and depth of services and level of care. Through an optimal blend of premium HR service and technology, Insperity delivers the administrative relief, reduced liabilities and better benefit solutions that businesses need for sustained growth. With 2020 revenues of
Forward-Looking Statements
The statements contained herein that are not historical facts are forward-looking statements within the meaning of the Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify such forward-looking statements by the words “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “likely,” “possibly,” “probably,” “goal,” “opportunity,” “objective,” “target,” “assume,” “outlook,” “guidance,” “predicts,” “appears,” “indicator” and similar expressions. Forward-looking statements involve a number of risks and uncertainties. In the normal course of business, in an effort to help keep our stockholders and the public informed about our operations, from time to time, we may issue such forward-looking statements, either orally or in writing. Generally, these statements relate to business plans or strategies; projected or anticipated benefits or other consequences of such plans or strategies; or projections involving anticipated revenues, earnings, average number of worksite employees, benefits and workers’ compensation costs, or other operating results. We base the forward-looking statements on our current expectations, estimates and projections. We caution you that these statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Therefore, the actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are:
- adverse economic conditions;
- impact of the COVID-19 pandemic, or other future pandemics, including the scope, severity and duration of the pandemic; government responses; regulatory developments; and the related disruptions and economic impact to our business and the small and medium-sized businesses that we serve;
- vulnerability to regional economic factors because of our geographic market concentration;
- failure to comply with covenants under our credit facility;
- our liability for worksite employee payroll, payroll taxes and benefits costs;
- increases in health insurance costs and workers’ compensation rates and underlying claims trends, health care reform, financial solvency of workers’ compensation carriers, other insurers or financial institutions, state unemployment tax rates, liabilities for employee and client actions or payroll-related claims;
- cancellation of client contracts on short notice, or the inability to renew client contracts or attract new clients;
- the ability to secure competitive replacement contracts for health insurance and workers’ compensation insurance at expiration of current contracts;
- regulatory and tax developments and possible adverse application of various federal, state and local regulations;
- failure to manage growth of our operations and the effectiveness of our sales and marketing efforts;
- the impact of the competitive environment and other developments in the human resources services industry, including the PEO industry, on our growth and/or profitability;
- an adverse final judgment or settlement of claims against Insperity;
- disruptions of our information technology systems;
- our liability or damage to our reputation relating to disclosure of sensitive or private information;
- failure of third-party providers, data centers or cloud service providers; and
- our ability to integrate or realize expected returns on our acquisitions.
These factors are discussed in further detail in Insperity’s filings with the U.S. Securities and Exchange Commission. Any of these factors, or a combination of such factors, could materially affect the results of our operations and whether forward-looking statements we make ultimately prove to be accurate.
Any forward-looking statements are made only as of the date hereof and, unless otherwise required by applicable securities laws, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Insperity, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
|||||||
(in thousands) |
March 31, 2021 |
|
December 31, 2020 |
||||
|
|
|
|
||||
Assets |
|
|
|
||||
Cash and cash equivalents |
$ |
494,777 |
|
|
$ |
554,846 |
|
Restricted cash |
46,353 |
|
|
45,522 |
|
||
Marketable securities |
34,292 |
|
|
34,529 |
|
||
Accounts receivable, net |
561,244 |
|
|
392,746 |
|
||
Prepaid insurance |
57,670 |
|
|
{
"@context": "https://schema.org",
"@type": "FAQPage",
"name": "Insperity Announces First Quarter Results FAQs",
"mainEntity": [
{
"@type": "Question",
"name": "What were Insperity's Q1 2021 financial results?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Insperity reported Q1 2021 revenue of $1.3 billion and net income of $61.9 million, with diluted EPS of $1.59."
}
},
{
"@type": "Question",
"name": "How did Insperity's adjusted EPS perform in Q1 2021?",
"acceptedAnswer": {
"@type": "Answer",
"text": "The adjusted EPS for Q1 2021 increased by 7% to $1.82."
}
},
{
"@type": "Question",
"name": "What is the outlook for Insperity in 2021?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Insperity raised its earnings outlook for 2021, expecting continued strong cash flow and growth."
}
},
{
"@type": "Question",
"name": "What were Insperity's revenue drivers in Q1 2021?",
"acceptedAnswer": {
"@type": "Answer",
"text": "The revenue increase was driven by solid sales, client retention, and growth in the client base."
}
},
{
"@type": "Question",
"name": "How many shares did Insperity repurchase in Q1 2021?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Insperity repurchased 340,000 shares for $29.7 million during Q1 2021."
}
}
]
}
| |||
