PR Newswire | Feb 18, 2021 06:30AM EST

02/18 05:30 CST

CBIZ Reports Fourth-Quarter and Full-Year 2020 Results CLEVELAND, Feb. 18, 2021

CLEVELAND, Feb. 18, 2021 /PRNewswire/ --

FOURTH-QUARTER HIGHLIGHTS:

* TOTAL REVENUE +3.9% * SAME-UNIT REVENUE +1.1%

FULL-YEAR HIGHLIGHTS:

* TOTAL REVENUE +1.6% * SAME-UNIT REVENUE -0.4% * EPS FROM CONTINUING OPERATIONS +11.8% * ADJUSTED EBITDA +9.6%

2021 GUIDANCE:

* TOTAL REVENUE +5% TO 8% * TAX RATE ~25% * SHARE COUNT ~54.5 MILLION * EPS FROM CONTINUING OPERATIONS +8% TO 12%

CBIZ, Inc. (NYSE: CBZ) (the "Company") today announced fourth- quarter and full-year results for the period ended December 31, 2020.

For the 2020 fourth quarter, CBIZ recorded revenue of $211.1 million, an increase of $8.0 million, or 3.9%, over the $203.1 million reported in 2019. Newly acquired operations, net of divestitures, contributed $5.8 million, or 2.8%, to fourth-quarter 2020 revenue growth. Same-unit revenue increased by $2.2 million, or 1.1%, for the quarter, compared with the same period a year ago. Loss from continuing operations was $0.1 million in the 2020 fourth quarter, compared with a loss of $1.1 million for the same period a year ago. Adjusted EBITDA for the fourth quarter was $5.2 million, compared with $2.7 million for the same period in 2019.

For the full year ended December 31, 2020, CBIZ recorded revenue of $963.9 million, an increase of $15.5 million, or 1.6%, over the $948.4 million recorded for the same period in 2019. Acquisitions, net of divested operations, contributed $18.9 million, or 2.0%, to revenue growth in the twelve months ended December 31, 2020. Same-unit revenue decreased by $3.4 million, or 0.4%, compared with the same period a year ago. Income from continuing operations was $78.3 million, or $1.42 per diluted share, in the twelve months ended December 31, 2020, compared with $71.0 million, or $1.27 per diluted share, for the same period a year ago. Adjusted EBITDA was $132.1 million in 2020, compared with $120.6 million in 2019.

In the twelve months ended December 31, 2020, the Company repurchased a total of approximately 2.3 million shares of its common stock. Additionally, between December 31, 2020, and February 16, 2021, the Company repurchased approximately 600,000 shares. The balance outstanding on the Company's unsecured credit facility at December 31, 2020 was $108.0 million with approximately $286 million of unused borrowing capacity.

Jerry Grisko, CBIZ President and Chief Executive Officer, said, "Both our fourth-quarter and full-year results provide further evidence of the resilience of our business model, dedication and resolve of our team, and the strength of our relationships with our clients. Likewise, our clients demonstrated similar resilience - as demand for our essential and recurring services remained strong throughout the past year, and demand for many of our project-based and advisory services improved in the latter part of the year. We are extremely proud to report quarter-over-quarter and year-over-year growth for a time period when the business environment was among the most challenging in our history."

Grisko continued, "Despite some delays earlier in the year, acquisitions continue to present an important opportunity for CBIZ. We added seven businesses in the last year totaling $45.2 million in annualized aggregate revenue, all bringing strategic value, talent and expertise to our business. Already in 2021, we closed one acquisition with $3.6 million in annualized revenue. While it is difficult to predict the number of acquisitions that will join us in a given year, we are encouraged by the pipeline of exceptional organizations that are at various stages of discussion."

2021 Outlook

Given our fourth-quarter and full-year 2020 results, the Company is restoring full-year guidance for 2021:

* The Company expects total growth in revenue within a range of 5% to 8% 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 54.5 million shares. * The Company expects to grow fully diluted earnings per share within a range of 8% to 12% over the prior year.

Conference Call

CBIZ will host a conference call at 11:00 a.m. (ET) today to discuss its results. The call will be webcast live for the media and the public, and can be accessed at www.cbiz.com. Shareholders and analysts who would like to participate in the call can register at https://dpregister.com/sreg/10151295/e0a1506cc0 to receive the dial-in number and unique personal identification number. Participants may register at any time, including up to and after the call start time.

A replay of the webcast will be made available approximately two hours following the call on the Company's website at www.cbiz.com. For those without internet access, a replay of the call will also be available starting at approximately 1:00 p.m. (ET), February 18, through 5:00 p.m. (ET), February 22, 2021. The toll- free dial-in number for the replay is 1-877-344-7529. If you are listening from outside the United States, dial 1-412-317-0088. The access code for the replay is 10151295.

About CBIZ

CBIZ, Inc. 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 31 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 DECEMBER 31, 2020 AND 2019

(In thousands, except percentages and per share data)

Three Months Ended December 31,

2020 % 2019 %

Revenue $ 211,110 100.0 % $ 203,138 100.0 %

Operating expenses ^(1) 211,748 100.3 200,706 98.8

Gross (loss) margin (638) (0.3) 2,432 1.2

Corporate general and administrative expenses ^(1) 13,078 6.2 10,490 5.2

Operating loss (13,716) (6.5) (8,058) (4.0)

Other income:

Interest expense (816) (0.4) (1,256) (0.6)

Loss on sale of operations, net (587) (0.3) 15 -

Other income, net ^(1) ^(2) 13,050 6.2 4,999 2.5

Total other income, net 11,647 5.5 3,758 1.9

Loss from continuing operations before income tax benefit (2,069) (1.0) (4,300) (2.1)

Income tax benefit (1,979) (3,164)

Loss from continuing operations (90) - (1,136) (0.6)

Loss from operations of discontinued businesses, net of tax (4) (16)

Net loss $ (94) - % $ (1,152) (0.6)%

Diluted loss per share:

Continuing operations $ - $ (0.02)

Discontinued operations - -

Net loss $ - $ (0.02)

Diluted weighted average common shares outstanding 54,039 54,547

Other data from continuing operations:

Adjusted EBITDA ^(3) $ 5,196 $ 2,676

__________________________________________________

(1) CBIZ sponsors a deferred compensation plan, under which a CBIZ employee'scompensation deferral is held in a rabbi trust and invested accordingly asdirected by the employee. Income and expenses related to the deferredcompensation plan are included in "Operating expenses" ($11.0 million in 2020and $5.5 million in 2019, or 5.2% and 2.7% of revenue, respectively) and"Corporate general and administrative expenses" ($1.2 million in 2020 and $0.7million in 2019, or 0.6% and 0.3% of revenue, respectively) and are directlyoffset by deferred compensation gains in "Other income, net" ($12.2 million in2020 and $6.2 million in 2019, or 5.8% and 3.0% of revenue, respectively). Thedeferred compensation plan has no impact on "Loss from continuing operationsbefore income tax benefit".

(2) Included in "Other income, net" for the three months ended December 31,2020 and 2019, is income of $0.5 million and expense of $1.3 million,respectively, related to net changes in the fair value of contingentconsideration related to CBIZ's prior acquisitions.

(3) Refer to the financial highlights tables for a reconciliation of Non-GAAPfinancial measures to the nearest generally accepted accounting principles("GAAP") financial measure, and for additional information as to the usefulnessof the Non-GAAP financial measures to shareholders and investors.

CBIZ, INC.FINANCIAL HIGHLIGHTS (UNAUDITED)

TWELVE MONTHS ENDED DECEMBER 31, 2020 AND 2019

(In thousands, except percentages and per share data)

Twelve Months Ended December 31,

2020 % 2019 %

Revenue $ 963,897 100.0 % $ 948,424 100.0 %

Operating expenses ^(1) 825,351 85.6 823,496 86.8

Gross margin 138,546 14.4 124,928 13.2

Corporate general and administrative expenses ^(1) 46,066 4.8 44,406 4.7

Operating income 92,480 9.6 80,522 8.5

Other income:

Interest expense (4,983) (0.5) (5,765) (0.6)

(Loss) gain on sale of operations, net (509) (0.1) 417 -

Other income, net ^(1) ^(2) 16,500 1.7 17,715 1.9

Total other income, net 11,008 1.1 12,367 1.3

Income from continuing operations before income tax expense 103,488 10.7 92,889 9.8

Income tax expense 25,141 21,840

Income from continuing operations 78,347 8.1 71,049 7.5

Loss from operations of discontinued businesses, net of tax (48) (335)

Net income $ 78,299 8.1 % $ 70,714 7.5 %

Diluted earnings (loss) per share:

Continuing operations $ 1.42 $ 1.27

Discontinued operations (0.01) (0.01)

Net income $ 1.41 $ 1.26

Diluted weighted average common shares outstanding 55,359 55,895

Other data from continuing operations:

Adjusted EBITDA ^(3) $ 132,119 $ 120,582

__________________________________________________

(1) CBIZ sponsors a deferred compensation plan, under which a CBIZ employee'scompensation deferral is held in a rabbi trust and invested accordingly asdirected by the employee. Income and expenses related to the deferredcompensation plan are included in "Operating expenses" ($13.8 million in 2020and $17.2 million in 2019, or 1.4% and 1.8% of revenue, respectively) and"Corporate general and administrative expenses" ($1.6 million in 2020 and $2.0million in 2019, or 0.2% and 0.2% of revenue, respectively) and are directlyoffset by deferred compensation gains in "Other income, net" ($15.4 million in2020 and $19.2 million in 2019, or 1.6% and 2.0% of revenue, respectively). Thedeferred compensation plan has no impact on "Income from continuing operationsbefore income tax expense".

(2) Included in "Other income, net" for the twelve months ended December 31,2020 and 2019, is income of $0.6 million and expense of $1.6 million,respectively, related to net changes in the fair value of contingentconsideration related to CBIZ's prior acquisitions.

(3) Refer to the financial highlights tables for a reconciliation of Non-GAAPfinancial measures to the nearest GAAP financial measure, and for additionalinformation as to the usefulness of the Non-GAAP financial measures toshareholders and investors.

CBIZ, INC.FINANCIAL HIGHLIGHTS (UNAUDITED)(In thousands)

SELECT SEGMENT DATA

Three Months Ended Twelve Months Ended December 31, December 31,

2020 2019 2020 2019

Revenue

Financial Services $ 131,419 $ 123,256 $ 629,778 $ 616,567

Benefits and Insurance Services 70,325 70,886 297,758 296,228

National Practices 9,366 8,996 36,361 35,629

Total $ 211,110 $ 203,138 $ 963,897 $ 948,424

Gross (Loss) Margin

Financial Services $ 2,147 $ (1,137) $ 104,569 $ 101,327

Benefits and Insurance Services 10,487 10,477 49,401 49,983

National Practices 1,072 830 3,724 3,155

Operating expenses - unallocated (1):

Other expense (3,334) (2,266) (5,342) (12,361)

Deferred compensation (11,010) (5,472) (13,806) (17,176)

Total $ (638) $ 2,432 $ 138,546 $ 124,928

______________________________________________

(1) Represents operating expenses not directly allocated to individualbusinesses, including stock-based compensation, consolidation and integrationcharges, and certain advertising expenses. "Operating expenses - unallocated"also include gains or losses attributable to the assets held in a rabbi trustassociated with the Company's deferred compensation plan. These gains or lossesdo not impact "Income from continuing operations before income tax expense" asthey are directly offset by the same adjustment to "Other income, net" in theConsolidated Statements of Comprehensive Income. Net gains/losses recognizedfrom adjustments to the fair value of the assets held in the rabbi trust arerecorded as compensation expense in "Operating expenses" and "Corporate,general and administrative expense," and offset in "Other income, net".

CBIZ, INC.SELECT CASH FLOW DATA

(In thousands)

Twelve Months Ended December 31,

2020 2019

Net income $ 78,299 $ 70,714

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization expense 23,139 22,345

Bad debt expense, net of recoveries 4,409 2,415

Adjustments to contingent earnout liability, net (629) 1,599

Stock-based compensation expense 8,869 7,254

Other noncash adjustments (2,170) 5,582

Net income, after adjustments to reconcile net income to net cash provided by 111,917 109,909operating activities

Changes in assets and liabilities, net of acquisitions and divestitures 34,999 (11,386)

Operating cash flows provided by continuing operations 146,916 98,523

Operating cash used in discontinued operations (71) (338)

Net cash provided by operating activities 146,845 98,185

Net cash used in investing activities (46,406) (27,685)

Net cash used in financing activities (76,609) (54,549)

Net Increase in cash, cash equivalents and restricted cash 23,830 15,951

Cash, cash equivalents and restricted cash at beginning of year $ 146,505 $ 130,554

Cash, cash equivalents and restricted cash at end of year $ 170,335 $ 146,505

Reconciliation of cash, cash equivalents and restricted cash to the

consolidated balance sheet:

Cash and cash equivalents $ 4,652 $ 567

Restricted cash 23,951 29,595

Cash equivalents included in funds held for clients 141,732 116,343

Total cash, cash equivalents and restricted cash $ 170,335 $ 146,505

CBIZ, INC.SELECT FINANCIAL DATA AND RATIOS

(In thousands)

December 31, 2020 December 31, 2019

Cash and cash equivalents 4,652 567

Restricted cash 23,951 29,595

Accounts receivable, net 216,175 222,031

Current assets before funds held for clients 268,991 276,518

Funds held for clients 167,440 179,502

Goodwill and other intangible assets, net 756,750 654,671

Total assets 1,513,754 1,400,774

Current liabilities before client fund obligations 211,285 186,906

Client fund obligations 166,989 179,020

Total long-term debt 107,192 104,333

Total liabilities 811,134 741,536

Treasury stock (595,297) (535,693)

Total stockholders' equity 702,620 659,238

Debt to equity 15.3 % 15.8 %

Days sales outstanding (DSO) 72 75 - continuing operations ^(1)

Shares outstanding 54,099 55,419

Basic weighted average common shares outstanding 54,288 54,299

Diluted weighted average common shares outstanding 55,359 55,895

____________________________________________

(1) DSO is provided for continuing operations and represents accountsreceivable, net, at the end of the period, divided by trailing twelve monthdaily revenue. The Company has included DSO data because such data is commonlyused as a performance measure by analysts and investors and as a measure of theCompany's ability to collect on receivables in a timely manner. DSO should notbe regarded as an alternative or replacement to any measurement of performanceunder GAAP.

CBIZ, INC.GAAP RECONCILIATION

Income from Continuing Operations to Non-GAAP Financial Measures ^(1)

(In thousands)

Three Months Ended Twelve Months Ended December 31, December 31,

2020 2019 2020 2019

(Loss) $ $ $ $ income from continuing operations (90) (1,136) 78,347 71,049

Interest expense 816 1,256 4,983 5,765

Income tax (benefit) expense (1,979) (3,164) 25,141 21,840

Loss (gain) 587 (15) 509 (417) on sale of operations, net

Depreciation 2,516 2,181 9,568 8,283

Amortization 3,346 3,554 13,571 14,062

Adjusted EBITDA $ $ $ 132,119 $ 120,582 5,196 2,676

_________________________________________

(1) CBIZ reports its financial results in accordance with GAAP. This tablereconciles Non-GAAP financial measures to the nearest GAAP financial measure,"Income from continuing operations". Adjusted EBITDA is not defined by GAAP andshould not be regarded as an alternative or replacement to any measurement ofperformance or cash flow under GAAP. Adjusted EBITDA is commonly used by theCompany, its shareholders and debt holders to evaluate, assess and benchmarkthe Company's operational results and to provide an additional measure withrespect to the Company's ability to meet future debt obligations.

View original content: http://www.prnewswire.com/news-releases/cbiz-reports-fourth-quarter-and-full-year-2020-results-301230409.html

SOURCE CBIZ, Inc.