PR Newswire
CLEVELAND, July 27, 2023
AND RAISES FULL-YEAR 2023 REVENUE GUIDANCE
SECOND-QUARTER HIGHLIGHTS:
- TOTAL REVENUE UP 10.1%; SAME-UNIT REVENUE UP 4.1%
- GAAP EPS DOWN 11.7%; ADJUSTED EPS DOWN 12.7%
- NET INCOME DOWN 14.1%; ADJUSTED EBITDA DOWN 2.3%
FIRST-HALF HIGHLIGHTS:
- TOTAL REVENUE UP 13.2%; SAME-UNIT REVENUE UP 7.2%
- GAAP EPS UP 16.5%; ADJUSTED EPS UP 11.0%
- NET INCOME UP 11.9%; ADJUSTED EBITDA UP 12.9%
CLEVELAND, July 27, 2023 /PRNewswire/ -- CBIZ, Inc., (NYSE: CBZ) ("CBIZ" or the "Company"), a leading provider of financial, insurance and advisory services, today announced results for the second quarter ended June 30, 2023.
For the 2023 second quarter, CBIZ recorded revenue of $398.5 million, an increase of $36.6 million, or 10.1%, compared with $362.0 million reported for the same period in 2022. Acquired operations, net of divestitures, contributed $21.6 million, or 6.0%, to revenue growth. Same-unit revenue increased by $15.0 million, or 4.1%, for the quarter, compared with the same period a year ago. Net income was $26.9 million, or $0.53 per diluted share, compared with $31.3 million, or $0.60 per diluted share, for the same period a year ago.
For the six months ended June 30, 2023, CBIZ recorded revenue of $853.1 million, an increase of $99.4 million, or 13.2%, over the $753.7 million recorded for the same period in 2022. Acquisitions, net of divestitures, contributed $45.5 million, or 6.0%, to revenue growth in the six months ended June 30, 2023. Same-unit revenue increased by $53.9 million, or 7.2%, compared with the same period a year ago. Net income was $100.0 million, or $1.98 per diluted share, for the six months ended June 30, 2023, compared with $89.4 million, or $1.70 per diluted share, for the same period a year ago.
Excluding non-recurring transaction and first-year integration expenses related to the acquisition of Marks Paneth in January 2022, and expenses related to the acquisition of Somerset in February 2023, Adjusted net income was $27.6 million in the second quarter of 2023 compared with Adjusted net income of $32.7 million for the same period a year ago. Adjusted earnings per share was $0.55, a decrease of 12.7% compared with Adjusted earnings per share of $0.63 for the same period a year ago. Adjusted EBITDA for the second quarter was $54.4 million, down 2.3% compared with $55.7 million for the same period in 2022.
Adjusted net income was $102.0 million, or $2.01 per diluted share, for the six months ended June 30, 2023, compared with $95.3 million, or $1.81 per diluted share, for the same period a year ago. Adjusted EBITDA for the six months was $167.8 million, compared with $148.6 million for the same period in 2022.
Schedules reconciling Adjusted net income, Adjusted earnings per share and Adjusted EBITDA to the most directly comparable GAAP measures can be found in the tables included in this release.
During the six months ended June 30, 2023, the Company repurchased approximately 1.0 million shares of its common stock on the open market. The balance outstanding on the Company's unsecured credit facility on June 30, 2023, was $410.6 million with $177.5 million of unused borrowing capacity.
Jerry Grisko, CBIZ President and Chief Executive Officer, said, "Following an exceptionally strong first quarter, our core businesses continued to perform well during the second quarter, and demand for our financial services, including accounting, tax and our advisory services, as well as our benefits and insurance offerings, remains strong. Our second-quarter results came in much as we expected with the exception of two areas that are largely beyond our control – contract delays in our Government Health Care consulting business and changes to tax filing deadlines in California. Based on our year-to-date performance and current outlook for the remainder of the year, we are pleased to raise revenue guidance and reaffirm our EPS guidance for the full year."
"So far this year, we've completed three strategic acquisitions and two tuck-in transactions that together are expected to add approximately $68 million in annualized revenue. Our most recent transactions include one in the highly in-demand cyber and information security space to expand our advisory services, and another that bolsters our retirement and investment solutions service offerings, and our overall M&A pipeline continues to remain active."
2023 Outlook
- The Company increased its revenue growth expectations to within a range of 10% to 12% over the prior year, up from previous guidance of within a range of 8% to 10%.
- The Company expects an effective tax rate of approximately 28%. The increased rate, up from 25.5% in 2022, will impact diluted earnings per share by approximately $0.08.
- The Company expects a weighted average fully diluted share count of approximately 50.5 to 51.0 million shares.
- The Company expects GAAP fully diluted earnings per share to grow within a range of 15% to 17%, to $2.31 to $2.36 per share, over the $2.01 per share reported for 2022.
- The Company expects Adjusted fully diluted earnings per share to grow within a range of 11% to 13%, to $2.36 to $2.41 per share over the Adjusted earnings per share, of $2.13 per share reported for 2022.
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/10180368/f9d02de210.
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 120 offices in 33 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 risk that the anticipated benefits and perceived advantages of an acquisition may not be achieved; the impact of COVID-19 or governmental rules related to public health issues on the Company's business, operations and clients; the Company's ability to adequately manage and sustain its growth; the Company's dependence on the trend of outsourcing business services; the Company's dependence on the services of its CEO, other key employees, producers and service personnel; the effects of any potential cyber-attacks; competitive pricing pressures; general business and economic conditions; and changes in governmental laws or regulation affecting the Company's clients, business, business services operations, or business models. 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 JUNE 30, 2023 AND 2022 (In thousands, except percentages and per share data) | ||||||||
Three Months Ended June 30, | ||||||||
2023 | % | 2022 | % | |||||
Revenue | $ 398,502 | 100.0 % | $ 361,952 | 100.0 % | ||||
Operating expenses (1) | 343,987 | 86.3 | 289,736 | 80.0 | ||||
Gross margin | 54,515 | 13.7 | 72,216 | 20.0 | ||||
Corporate general and administrative expenses (1) | 15,793 | 4.0 | 10,926 | 3.0 | ||||
Operating income | 38,722 | 9.7 | 61,290 | 17.0 | ||||
Other income (expense): | ||||||||
Interest expense | (5,534) | (1.4) | (1,645) | (0.5) | ||||
Gain on sale of operations, net | — | — | 135 | — | ||||
Other income (expense), net (1) (2) | 5,421 | 1.4 | (15,903) | (4.4) | ||||
Total other expense, net | (113) | — | (17,413) | (4.9) | ||||
Income before income tax expense | 38,609 | 9.7 | 43,877 | 12.1 | ||||
Income tax expense | 11,746 | 12,622 | ||||||
Net income | $ 26,863 | 6.7 % | $ 31,255 | 8.6 % | ||||
Diluted earnings per share | $ 0.53 | $ 0.60 | ||||||
Diluted weighted average common shares outstanding | 50,385 | 52,531 | ||||||
Other data: | ||||||||
Adjusted EBITDA (3) | $ 54,435 | $ 55,727 | ||||||
Adjusted EPS (3) | $ 0.55 | $ 0.63 | ||||||
(1) | CBIZ sponsors a deferred compensation plan, under which a CBIZ employee's compensation deferral is held in a rabbi trust Income and expenses related to the deferred compensation plan for the three months ended June 30, 2023, and 2022 are as |
Three Months Ended June 30, | ||||||
2023 | % of Revenue | 2022 | % of Revenue | |||
Operating expenses (income) | $ 5,102 | 1.3 % | $ (13,338) | (3.7) % | ||
Corporate general and administrative expenses (income) | 631 | 0.1 % | (1,811) | (0.5) % | ||
Other income (expense), net | 5,733 | 1.4 % | (15,149) | (4.1) % | ||
Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the three months ended June 30, 2023, and 2022 are as follows (in thousands): | ||||||||||
Three Months Ended June 30, | ||||||||||
2023 | 2022 | |||||||||
As Reported | Deferred Compensation Plan | Adjusted | % of Revenue | As Reported | Deferred Compensation Plan | Adjusted | % of Revenue | |||
Gross margin | $ 54,515 | $ 5,102 | $ 59,617 | 15.0 % | $ 72,216 | $ (13,338) | $ 58,878 | 16.3 % | ||
Operating income | 38,722 | 5,733 | 44,455 | 11.2 % | 61,290 | (15,149) | 46,141 | 12.7 % | ||
Other income (expense), net | 5,421 | (5,733) | (312) | (0.1) % | (15,903) | 15,149 | (754) | (0.2) % | ||
Income before income tax expense | 38,609 | — | 38,609 | 9.7 % | 43,877 | — | 43,877 | 12.1 % | ||
(2) | Included in "Other income (expense), net" for the three months ended June 30, 2023 and 2022, is expense of $0.8 million and $0.8 million, respectively, related to net changes in the fair value of contingent consideration related to CBIZ's prior acquisitions. | |
(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 usefulness of the Non-GAAP financial measures to shareholders and investors. | |
CBIZ, INC. FINANCIAL HIGHLIGHTS (UNAUDITED) SIX MONTHS ENDED JUNE 30, 2023 AND 2022 (In thousands, except percentages and per share data) | ||||
Six Months Ended June 30, | ||||
2023 | % | 2022 | % | |
Revenue | $ 853,108 | 100.0 % | $ 753,674 | 100.0 % |
Operating expenses (1) | 684,998 | 80.3 | 580,035 | 77.0 |
Gross margin | 168,110 | 19.7 | 173,639 | 23.0 |
Corporate general and administrative expenses (1) | 31,391 | 3.7 | 27,235 | 3.6 |
Operating income | 136,719 | 16.0 | 146,404 | 19.4 |
Other income (expense): | ||||
Interest expense | (9,175) | (1.1) | (2,904) | (0.4) |
Gain on sale of operations, net | 99 | — | 135 | — |
Other income (expense), net (1) (2) | 10,533 | 1.2 | (22,310) | (3.0) |
Total other income (expense), net | 1,457 | 0.1 | (25,079) | (3.4) |
Income before income tax expense | 138,176 | 16.1 | 121,325 | 16.0 |
Income tax expense | 38,153 | 31,943 | ||
Net Income | 100,023 | 11.7 | 89,382 | 11.9 |
Diluted earnings per share | $ 1.98 | $ 1.70 | ||
Diluted weighted average common shares outstanding | 50,639 | 52,736 | ||
Other data: | ||||
Adjusted EBITDA (3) | $ 167,783 | $ 148,620 | ||
Adjusted EPS (3) | $ 2.01 | $ 1.81 | ||
(1) | CBIZ sponsors a deferred compensation plan, under which a CBIZ employee's compensation deferral is held in a rabbi trust Income and expenses related to the deferred compensation plan for the six months ended June 30, 2023, and 2022 are as | |
Six Months Ended June 30, | ||||||
2023 | % of Revenue | 2022 | % of Revenue | |||
Operating expenses (income) | $ 9,862 | 1.2 % | $ (19,005) | (2.5) % | ||
Corporate general and administrative expenses (income) | 1,273 | 0.1 % | (2,622) | (0.3) % | ||
Other income (expense), net | 11,135 | 1.3 % | (21,627) | (2.9) % | ||
Excluding the impact of the above-mentioned income and expenses related to the deferred compensation plan, the operating results for the six months ended June 30, 2023, and 2022 are as follows (in thousands): | ||||||||||
Six Months Ended June 30, | ||||||||||
2023 | 2022 | |||||||||
As | Deferred Compensation | % of | As | Deferred Compensation | % of | |||||
Reported | Plan | Adjusted | Revenue | Reported | Plan | Adjusted | Revenue | |||
Gross margin | $168,110 | $ 9,862 | $177,972 | 20.9 % | $173,639 | $ (19,005) | $154,634 | 20.5 % | ||
Operating income | 136,719 | 11,135 | 147,854 | 17.3 % | 146,404 | (21,627) | 124,777 | 16.6 % | ||
Other income (expense), net | 10,533 | (11,135) | (602) | (0.1) % | (22,310) | 21,627 | (683) | (0.1) % | ||
Income before income tax expense | 138,176 | — | 138,176 | 16.1 % | 121,325 | — | 121,325 | 16.0 % | ||
(2) | Included in "Other income (expense), net" for the six months ended June 30, 2023 and 2022, is expense of $1.4 million and $1.5 million, respectively, related to net changes in the fair value of contingent consideration related to CBIZ's prior acquisitions. |
(3) | Refer to the financial highlights tables for a reconciliation of Non-GAAP financial measures to the most directly comparable shareholders and investors. |
CBIZ, INC. FINANCIAL HIGHLIGHTS (UNAUDITED) (In thousands) SELECT SEGMENT DATA | |||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||
2023 | 2022 | 2023 | 2022 | ||
Revenue | |||||
Financial Services | $ 290,930 | $ 259,308 | $ 634,016 | $ 548,054 | |
Benefits and Insurance Services | 95,838 | 91,708 | 195,892 | 184,194 | |
National Practices | 11,734 | 10,936 | 23,200 | 21,426 | |
Total | $ 398,502 | $ 361,952 | $ 853,108 | $ | 753,674 |
Gross Margin | ||||
Financial Services | $ 47,485 | $ 49,665 | $ 146,128 | $ 128,611 |
Benefits and Insurance Services | 17,464 | 16,688 | ||
