PR Newswire | Apr 29, 2021 06:31AM EDT

04/29 05:30 CDT

CBIZ Reports First-Quarter 2021 Results; Raises Full-Year 2021 GuidanceFIRST-QUARTER HIGHLIGHTS:- TOTAL REVENUE +8.4%- SAME-UNIT REVENUE +3.6%- EPS FROM CONTINUING OPERATIONS +39.4%- FULL-YEAR 2021 GUIDANCE RAISED TO 8% TO 10% GROWTH IN REVENUE AND 12% TO 15% GROWTH IN EPS CLEVELAND, April 29, 2021

CLEVELAND, April 29, 2021 /PRNewswire/ -- CBIZ, Inc. (NYSE: CBZ) (the "Company") a leading provider of financial, insurance and advisory services, today announced results for the first quarter ended March 31, 2021.

For the 2021 first quarter, CBIZ recorded revenue of $300.7 million, an increase of $23.2 million, or 8.4%, over the $277.5 million reported in the same period in 2020. Newly acquired operations, net of divestitures, contributed $13.3 million, or 4.8%, to first quarter 2021 revenue growth. Same-unit revenue increased by $10.0 million, or 3.6%, for the quarter, compared with the same period a year ago. Income from continuing operations was $50.2 million, or $0.92 per diluted share in the 2021 first quarter, compared with $36.9 million, or $0.66 per diluted share for the same period a year ago. Adjusted EBITDA for the first quarter was $73.3 million, compared with $57.0 million for the same period in 2020.

During the first quarter of 2021, the Company repurchased a total of 1.1 million shares of its common stock. Between March 31, 2021, and April 27, 2021, the Company repurchased an additional 270,000 shares. The balance outstanding on the Company's unsecured credit facility on March 31, 2021, was $162.0 million with $228.7 million of unused borrowing capacity.

Jerry Grisko, CBIZ President and Chief Executive Officer, said, "Our business experienced strong performance through the first quarter of 2021, and we are pleased to announce ongoing growth in total revenue, same-unit revenue, earnings per share, and adjusted EBITDA over the same period last year."

Grisko continued, "In addition to the momentum resulting from our first quarter performance, I am also pleased to announce the acquisition of the non-attest assets and business of Berntson Porter, a leading provider of accounting and related professional services located in Bellevue, Washington, with annual revenue of approximately $26 million. We've been searching for a platform acquisition in the Pacific Northwest for a number of years and are excited to have found the ideal firm with Berntson Porter. Berntson Porter's outstanding reputation for exceptional client service, commitment to the growth and development of their team members, and service to the communities where they work and live align with CBIZ's core values and beliefs. We welcome founders Robert Berntson and Greg Porter and President Mary Actor, in addition to the entire Berntson Porter team to CBIZ."

"As a result of our strong performance in the first quarter of this year and the acquisition of Berntson Porter effective May 1, 2021, we are revising upward our previously announced guidance. Our revised guidance is to grow revenue between 8% to 10% and earnings per share between 12% to 15% for the full year 2021 compared to the full year 2020," concluded Grisko.

2021 Outlook

* The Company expects total revenue growth within a range of 8% to 10% 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 within a range of 54.0 million to 54.5 million shares. * The Company expects to grow fully diluted earnings per share within a range of 12% to 15% over the prior year.

Conference CallCBIZ 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/10155213/e7145d9127 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), April 29, through 5:00 p.m. (ET), May 6, 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 10155213.

About CBIZCBIZ 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 StatementsForward-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, 2021 AND 2020

(In thousands, except percentages and per share data)

Three Months Ended March 31,

2021 % 2020 %

Revenue $ 300,730 100.0 % $ 277,455 100.0 %

Operating expenses ^(1) 223,971 74.5 199,827 72.0

Gross margin 76,759 25.5 77,628 28.0

Corporate general and administrative 14,483 4.8 10,489 3.8expenses ^(1)

Operating income 62,276 20.7 67,139 24.2

Other income (expense):

Interest expense (877) (0.3) (1,119) (0.4)

Gain on sale of operations, net - - 95 -

Other income (expense), net ^(1) ^(2) 4,789 1.6 (15,800) (5.7)

Total other income (expense), net 3,912 1.3 (16,824) (6.1)

Income from continuing operations before 66,188 22.0 50,315 18.1income tax expense

Income tax expense 15,972 13,453

Income from continuing operations 50,216 16.7 36,862 13.3

Loss from operations of discontinued (7) (14)businesses, net of tax

Net Income $ 50,209 16.7 % $ 36,848 13.3 %

Diluted income per share:

Continuing operations $ $ 0.66 0.92

Discontinued operations - -

Net income $ $ 0.66 0.92

Diluted weighted average common shares 54,436 55,945outstanding

Other data from continuing operations:

Adjusted EBITDA ^(3) $ 73,317 $ 57,043

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(1) 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 income (expense), 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, 2021, and 2020 are:

Three Months Ended March 31,

2021 % of 2020 % of Revenue Revenue

Operating expenses $ 4,616 1.5 % $ (14,800) (5.3)%

Corporate general and $ 496 0.2 % $ (1,804) (0.7)%administrative expenses

Other income (expense), net $ 5,112 1.7 % $ (16,604) (6.0)%

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, 2021, and 2020 are:

Three Months Ended March 31,

2021 2020

As Deferred % of As Deferred % of Compensation Compensation

Reported Plan Adjusted Revenue Reported Plan Adjusted Revenue

Gross $ 76,759 $ 4,616 $ 81,375 27.1 % $ 77,628 $ (14,800) $ 62,828 22.6 %margin

Operating $ 62,276 $ 5,112 $ 67,388 22.4 % $ 67,139 $ (16,604) $ 50,535 18.2 %income

Otherincome $ 4,789 $ (5,112) $ (323) (0.1)% $ (15,800) $ 16,604 $ 804 0.3 %(expense),net

Incomefromcontinuingoperations $ 66,188 $ - $ 66,188 22.0 % $ 50,315 $ - $ 50,315 18.1 %beforeincome taxexpense

Included in "Other income (expense), net" for the three months ended March(2) 31, 2021, and 2020, is expense of $0.7 million and income of $0.7 million, respectively, related to net changes in the fair value of contingent consideration related to CBIZ's prior acquisitions.

Refer to the financial highlights tables for a reconciliation of Non-GAAP financial measures to the nearest generally accepted accounting principles(3) ("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)

(In thousands)

SELECT SEGMENT DATA

Three Months Ended March 31,

2021 2020

Revenue

Financial Services $ 204,149 $ 188,777

Benefits and Insurance Services 87,239 79,612

National Practices 9,342 9,066

Total $ 300,730 $ 277,455

Gross Margin

Financial Services $ 62,403 $ 50,179

Benefits and Insurance Services 20,306 14,389

National Practices 801 783

Operating expenses - unallocated (1): - -

Other expense (2,135) (2,523)

Deferred compensation (4,616) 14,800

Total $ 76,759 $ 77,628

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(1) operations before income tax expense" as they are directly offset by the same adjustment to "Other income (expense), 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 in "Operating expenses" and "Corporate, general and administrative expenses," and offset in "Other income (expense), net."

CBIZ, INC.SELECT CASH FLOW DATA

(In thousands)

Three Months Ended March 31,

2021 2020

Net income $ 50,209 $ 36,848

Adjustments to reconcile net income to netcash used in operating activities:

Depreciation and amortization expense 6,252 5,704

Bad debt expense, net of recoveries 58 2,289

Adjustments to contingent earnout liability, 660 (684)net

Stock-based compensation expense 2,855 2,023

Other noncash adjustments 1,265 (311)

Net income, after adjustments to reconcilenet income to net cash used in operating 61,299 45,869activities

Changes in assets and liabilities, net of (76,120) (64,500)acquisitions and divestitures

Operating cash flows used in continuing (14,821) (18,631)operations

Operating cash used in discontinued (6) (16)operations

Net cash used in operating activities (14,827) (18,647)

Net cash provided by investing activities 229 4,355

Net cash (used in) provided by financing (2,960) 207,772activities

Net (decrease) increase in cash, cash (17,558) 193,480equivalents and restricted cash

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

Cash, cash equivalents and restricted cash $ 152,777 $ 339,985at end of period

Reconciliation of cash, cash equivalents andrestricted cash to the

consolidated balance sheet:

Cash and cash equivalents $ 6,778 $ 216,942

Restricted cash 27,618 28,927

Cash equivalents included in funds held for 118,381 94,116clients

Total cash, cash equivalents and restricted $ 152,777 $ 339,985cash

CBIZ, INC.SELECT FINANCIAL DATA AND RATIOS (In thousands)

March 31, December 31, 2021 2020

Cash and cash equivalents 6,778 4,652

Restricted cash 27,618 23,951

Accounts receivable, net 270,610 216,175

Current assets before funds held for clients 330,701 268,991

Funds held for clients 140,774 167,440

Goodwill and other intangible assets, net 756,684 756,750

Total assets 1,551,843 1,513,754

Current liabilities before client fund obligations 193,184 211,285

Client fund obligations 140,490 166,989

Total long-term debt 161,282 107,192

Total liabilities 824,060 811,134

Treasury stock (629,439) (595,297)

Total stockholders' equity 727,783 702,620

Debt to equity 22.2 % 15.3 %

Days sales outstanding (DSO) - continuing 91 72operations ^(1)

Shares outstanding 53,416 54,099

Basic weighted average common shares outstanding 53,366 54,288

Diluted weighted average common shares outstanding 54,436 55,359

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(1) 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, 2020, was 94.

CBIZ, INC.GAAP RECONCILIATION

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

(In thousands)

Three Months Ended March 31,

2021 2020

Income from continuing operations $ 50,216 $ 36,862

Interest expense 877 1,119

Income tax expense 15,972 13,453

Gain on sale of operations, net - (95)

Depreciation 2,553 2,283

Amortization 3,699 3,421

Adjusted EBITDA $ 73,317 $ 57,043

CBIZ reports its financial results in accordance with GAAP. This table reconciles Non-GAAP financial measures to the most directly comparable GAAP financial measure, "Income from continuing operations." Adjusted EBITDA is(1) 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.

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SOURCE CBIZ, Inc.