- Q4 adjusted EBITDA increases 22% over 2013
-
Q4 adjusted EPS up 46% over 2013 to
$0.35 - Q4 sequential increase in paid worksite employees accelerates to 4%
- Q4 gross profit increases 13% on 7% revenue growth
-
Over
$90 million returned to stockholders in 2014 through dividends and share repurchases
“Our successful fall selling and retention campaign has reestablished
momentum in growth and profitability and set
Fourth Quarter Results
Revenues for the fourth quarter of 2014 increased 7.0% over the fourth quarter of 2013 on a 4.6% increase in the average number of worksite employees paid per month. All three drivers to worksite employee growth including sales, client retention and net hiring in our client base, improved over the fourth quarter of 2013.
The 22.4% increase in adjusted EBITDA over the fourth quarter of 2013 resulted from a 12.6% increase in gross profit on a 6.3% increase in operating expenses.
Full Year Results
For the year ended
Revenues in 2014 were
“Adjusted EBITDA and earnings per share exceeded our initial budget
going into 2014 as we effectively managed our direct costs and operating
expenses while accelerating unit growth,” said
Cash outlays in 2014 included the repurchase of 693,262 shares at a cost
of
Other Matters
Separately, the company renewed its revolving credit facility on
2015 Guidance |
||||||||||||||||
Q1 2015 | Full Year 2015 | |||||||||||||||
Average WSEEs | 138,300 |
- |
138,900 | 144,000 |
- |
146,400 | ||||||||||
Year-over-year increase | 9.5% |
- |
10% | 10% |
- |
12% | ||||||||||
Adjusted EPS | $0.65 |
- |
$0.68 | $1.82 |
- |
$1.92 | ||||||||||
Year-over-year increase | 51% |
- |
59% | 26% |
- |
32% | ||||||||||
Adjusted EBITDA (in millions) | $33.5 |
- |
$35.0 | $101.0 |
- |
$105.0 | ||||||||||
Year-over-year increase | 37% |
- |
44% | 20% |
- |
25% | ||||||||||
Definition of Key Metrics
Average WSEEs – 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 impairment charges, dividends exceeding earnings and stock-based compensation. Note that beginning in 2015, the company will begin adjusting for stock-based compensation when reporting Adjusted EPS.
Adjusted EBITDA – Represents net income computed in accordance with GAAP, plus interest expense, income taxes, depreciation, amortization, stock-based compensation and non-cash impairment charges.
The statements contained herein that are not historical facts are
forward-looking statements within the meaning of the federal securities
laws (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,
Except to the extent otherwise required by federal securities law, we do not undertake any obligation to update our forward-looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated events.
Insperity, Inc. Summary Financial Information (in thousands, except per share amounts and statistical data) |
|||||||||||||
Dec. 31, | Dec. 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Assets: | |||||||||||||
Cash and cash equivalents | $ | 276,456 | $ | 225,755 | |||||||||
Restricted cash | 44,040 | 51,928 | |||||||||||
Marketable securities | 28,631 | 46,340 | |||||||||||
Accounts receivable, net | 175,116 | 210,009 | |||||||||||
Prepaid insurance | 21,301 | 10,638 | |||||||||||
Other current assets | 17,649 | 12,053 | |||||||||||
Income taxes receivable |
- |
409 | |||||||||||
Deferred income taxes | 6,316 | 8,185 | |||||||||||
Total current assets | 569,509 | 565,317 | |||||||||||
Property and equipment, net | 84,345 | 86,415 | |||||||||||
Prepaid health insurance | 9,000 | 9,000 | |||||||||||
Deposits | 117,634 | 85,578 | |||||||||||
Goodwill and other intangible assets, net | 14,457 | 18,434 | |||||||||||
Other assets | 1,725 | 1,816 | |||||||||||
Total assets | $ | 796,670 | $ | 766,560 | |||||||||
Liabilities and Stockholder's Equity: | |||||||||||||
Accounts payable | $ | 4,674 | $ | 2,678 | |||||||||
Payroll taxes and other payroll deductions payable | 176,341 | 165,604 | |||||||||||
Accrued worksite employee payroll cost | 192,396 | 173,801 | |||||||||||
Accrued health insurance costs | 18,329 | 5,103 | |||||||||||
Accrued workers’ compensation costs | 45,592 | 52,930 | |||||||||||
Accrued corporate payroll and commissions | 32,644 | 21,611 | |||||||||||
Other accrued liabilities | 22,444 | 14,960 | |||||||||||
Income taxes payable | 4,031 |
- |
|||||||||||
Total current liabilities | 496,451 | 436,687 | |||||||||||
Accrued workers’ compensation costs | 92,048 | 68,905 | |||||||||||
Deferred income taxes | 4,075 | 7,696 | |||||||||||
Total noncurrent liabilities | 96,123 | 76,601 | |||||||||||
Stockholders’ equity: | |||||||||||||
Common stock | 308 | 308 | |||||||||||
Additional paid-in capital | 137,769 | 135,653 | |||||||||||
Treasury stock, at cost | (148,465 | ) | (138,688 | ) | |||||||||
Accumulated other comprehensive income, net of tax | 3 | 29 | |||||||||||
Retained earnings | 214,481 | 255,970 | |||||||||||
Total stockholders’ equity | 204,096 | 253,272 | |||||||||||
Total liabilities and stockholders’ equity | $ | 796,670 | $ | 766,560 |
Insperity, Inc. Summary Financial Information (continued) (in thousands, except per share amounts and statistical data) |
|||||||||||||||||||||||||
Three months ended Dec. 31, | Year ended Dec. 31, | ||||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | ||||||||||||||||||||
Operating results: | |||||||||||||||||||||||||
Revenues (gross billings of $3.956 billion, $3.726 | |||||||||||||||||||||||||
billion, $14.187 billion and $13.462 billion, | |||||||||||||||||||||||||
less worksite employee payroll cost of $3.360 | |||||||||||||||||||||||||
billion, $3.169 billion, $11.829 billion and | |||||||||||||||||||||||||
$11.206 billion, respectively) | $ | 595,865 | $ | 557,133 | 7.0 | % | $ | 2,357,788 | $ | 2,256,112 | 4.5 | % | |||||||||||||
Direct costs: | |||||||||||||||||||||||||
Payroll taxes, benefits and workers’ | |||||||||||||||||||||||||
compensation costs | 494,506 | 467,155 | 5.9 | % | 1,953,983 | 1,862,861 | 4.9 | % | |||||||||||||||||
Gross profit | 101,359 | 89,978 | 12.6 | % | 403,805 | 393,251 | 2.7 | % | |||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||
Salaries, wages and payroll taxes | 51,873 | 43,747 | 18.6 | % | 200,118 | 181,444 | 10.3 | % | |||||||||||||||||
Stock-based compensation | 2,707 | 2,752 | (1.6 | )% | 11,053 | 11,103 | (0.5 | )% | |||||||||||||||||
Commissions | 4,532 | 4,232 | 7.1 | % | 15,285 | 14,581 | 4.8 | % | |||||||||||||||||
Advertising | 4,001 | 4,552 | (12.1 | )% | 22,183 | 23,795 | (6.8 | )% | |||||||||||||||||
General and administrative expenses | 18,475 | 19,107 | (3.3 | )% | 82,618 | 81,699 | 1.1 | % | |||||||||||||||||
Impairment charges | 1,202 | 3,342 | (64.0 | )% | 3,687 | 3,342 | 10.3 | % | |||||||||||||||||
Depreciation and amortization | 5,560 | 5,372 | 3.5 | % | 21,387 | 21,064 | 1.5 | % | |||||||||||||||||
Total operating expenses | 88,350 | 83,104 | 6.3 | % | 356,331 | 337,028 | 5.7 | % | |||||||||||||||||
Operating income | 13,009 | 6,874 | 89.2 | % | 47,474 | 56,223 | (15.6 | )% | |||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||
Interest, net | 26 | 3 | 766.7 | % | 106 | 158 | (32.9 | )% | |||||||||||||||||
Other, net | 27 | 19 | 42.1 | % | 47 | (2,649 | ) | (101.8 | )% | ||||||||||||||||
Income before income tax expense | 13,062 | 6,896 | 89.4 | % | 47,627 | 53,732 | (11.4 | )% | |||||||||||||||||
Income tax expense | 4,898 | 1,607 | 204.8 | % | 19,623 | 21,700 | (9.6 | )% | |||||||||||||||||
Net income | $ | 8,164 | $ | 5,289 | 54.4 | % | $ | 28,004 | $ | 32,032 | (12.6 | )% | |||||||||||||
Less distributed and undistributed earnings | |||||||||||||||||||||||||
allocated to participating securities | (1,572 | ) | (150 | ) | 948.0 | % | (2,002 | ) | (916 | ) | 118.6 | % | |||||||||||||
Net income allocated to common shares | $ | 6,592 | $ | 5,139 | 28.3 | % | $ | 26,002 | $ | 31,116 | (16.4 | )% | |||||||||||||
Basic net income per share of common stock | $ | 0.27 | $ | 0.21 | 28.6 | % | $ | 1.05 | $ | 1.25 | (16.0 | )% | |||||||||||||
Diluted net income per share of common stock | $ | 0.27 | $ | 0.21 | 28.6 | % | $ | 1.05 | $ | 1.25 | (16.0 | )% |
Insperity, Inc. Summary Financial Information (continued) (in thousands, except per share amounts and statistical data) |
||||||||||||||||||||||||||||||
Three months ended Dec. 31, | Year ended Dec. 31, | |||||||||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | |||||||||||||||||||||||||
Statistical Data: | ||||||||||||||||||||||||||||||
Average number of worksite employees | ||||||||||||||||||||||||||||||
paid per month | 136,764 | 130,732 | 4.6 | % | 130,718 | 127,517 | 2.5 | % | ||||||||||||||||||||||
Revenues per worksite employee per | ||||||||||||||||||||||||||||||
month (1) |
$ | 1,452 | $ | 1,420 | 2.3 | % | $ | 1,503 | $ | 1,474 | 2.0 | % | ||||||||||||||||||
Gross profit per worksite employee per | ||||||||||||||||||||||||||||||
month | 247 | 229 | 7.9 | % | 257 | 257 | - | |||||||||||||||||||||||
Operating expenses per worksite | ||||||||||||||||||||||||||||||
employee per month | 215 | 212 | 1.4 | % | 227 | 220 | 3.2 | % | ||||||||||||||||||||||
Operating income per worksite employee | ||||||||||||||||||||||||||||||
per month | 32 | 18 | 77.8 | % | 30 | 37 | (18.9 | )% | ||||||||||||||||||||||
Net income per worksite employee per |
||||||||||||||||||||||||||||||
month |
20 | 13 | 53.8 | % | 18 | 21 | (14.3 | )% | ||||||||||||||||||||||
(1) Gross billings of $9,642, $9,501, $9,044 and $8,797 per worksite employee per month, less payroll cost of $8,190, $8,081, |
||||||||||||||||||||||||||||||
$7,541 and $7,323 per worksite employee per month, respectively. |
Insperity, Inc. Summary Financial Information (continued) (in thousands, except per share amounts and statistical data) (Unaudited)
GAAP to Non-GAAP Reconciliation Tables |
||||||||||||||||||
Three months ended | Year ended | |||||||||||||||||
Dec. 31, | Dec. 31, | |||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | |||||||||||||
Payroll cost (GAAP) | $ | 3,360,329 | $ | 3,169,120 | 6.0 | % | $ | 11,829,133 | $ | 11,205,652 | 5.6 | % | ||||||
Less: Bonus payroll cost | 561,259 | 567,780 | (1.1 | )% | 1,509,010 | 1,274,575 | 18.4 | % | ||||||||||
Non-bonus payroll cost | $ | 2,799,070 | $ | 2,601,340 | 7.6 | % | $ | 10,320,123 | $ | 9,931,077 | 3.9 | % | ||||||
Payroll cost per worksite employee per | ||||||||||||||||||
month (GAAP) | $ | 8,190 | $ | 8,081 | 1.3 | % | $ | 7,541 | $ | 7,323 | 3.0 | % | ||||||
Less: Bonus payroll cost per worksite | ||||||||||||||||||
employee per month | 1,368 | 1,448 | (5.5 | )% | 962 | 833 | 15.5 | % | ||||||||||
Non-bonus payroll cost per worksite | ||||||||||||||||||
employee per month | $ | 6,822 | $ | 6,633 | 2.8 | % | $ | 6,579 | $ | 6,490 | 1.4 | % | ||||||
Non-bonus payroll cost represents payroll cost excluding the
impact of bonus payrolls paid to the |
||||||||||||||||||
Three months ended | Year ended | |||||||||||||||||
Dec. 31, | Dec. 31, | |||||||||||||||||
2014 | 2013 | Change |
2014 |
2013 | Change | |||||||||||||
Operating expenses (GAAP) | $ | 88,350 | $ | 83,104 | 6.3 | % | $ | 356,331 | $ | 337,028 | 5.7 | % | ||||||
Impairment charge | 1,202 | 3,342 | (64.0 | )% | 3,687 | 3,342 | 10.3 | % | ||||||||||
Adjusted operating expenses | $ | 87,148 | $ | 79,762 | 9.3 | % | $ | 352,644 | $ | 333,686 | 5.7 | % | ||||||
Adjusted operating expenses represent operating expenses excluding the impact of impairment charges. |
Three months ended | Year ended | ||||||||||||||||||||||||||
Dec. 31, | Dec. 31, | ||||||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | ||||||||||||||||||||||
Net income (GAAP) | $ | 8,164 | $ | 5,289 | 54.4 | % | $ | 28,004 | $ | 32,032 | (12.6 | )% | |||||||||||||||
Income tax expense | 4,898 | 1,607 | 204.8 | % | 19,623 | 21,700 | (9.6 | )% | |||||||||||||||||||
Interest expense | 89 | 119 | (25.2 | )% | 370 | 383 | (3.4 | )% | |||||||||||||||||||
Depreciation and amortization | 5,560 | 5,372 | 3.5 | % | 21,387 | 21,064 | 1.5 | % | |||||||||||||||||||
EBITDA | 18,711 | 12,387 | 51.1 | % | 69,384 | 75,179 | (7.7 | )% | |||||||||||||||||||
Impairment charges | 1,202 | 3,342 | (64.0 | )% | 3,687 | 6,021 | (38.8 | )% | |||||||||||||||||||
Stock-based compensation | 2,707 | 2,752 | (1.6 | )% | 11,053 | 11,103 | (0.5 | )% | |||||||||||||||||||
Adjusted EBITDA | $ | 22,620 | $ | 18,481 | 22.4 | % | $ | 84,124 | $ | 92,303 | (8.9 | )% | |||||||||||||||
EBITDA represents net income computed in accordance with generally
accepted accounting principles |
|||||||||||||||||||||||||||
Three Months Ended
Dec. 31, |
Year Ended
Dec. 31, |
||||||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | ||||||||||||||||||||||
Net income (GAAP) | $ | 8,164 | $ | 5,289 | 54.4 | % | $ | 28,004 | $ | 32,032 | (12.6 | )% | |||||||||||||||
Impairment charge, net of tax | 751 | 2,941 | (74.5 | )% | 2,317 | 5,620 | (58.8 | )% | |||||||||||||||||||
Tax credit |
- |
(1,982 | ) |
(100.0 |
)% |
- |
(1,982 | ) |
(100.0 |
)% | |||||||||||||||||
Adjusted net income | $ | 8,915 | $ | 6,248 | 42.7 | % | $ | 30,321 | $ | 35,670 | (15.0 | )% | |||||||||||||||
Three Months Ended
Dec. 31, |
Year Ended
Dec. 31, |
||||||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | ||||||||||||||||||||||
Diluted net income per share of | |||||||||||||||||||||||||||
common stock (GAAP) | $ | 0.27 | $ | 0.21 | 28.6 | % | $ | 1.05 | $ | 1.25 | (16.0 | )% | |||||||||||||||
Impairment charge, net of tax | 0.03 | 0.11 | (72.7 | )% | 0.09 | 0.22 | (59.1 | )% | |||||||||||||||||||
Impact of dividends exceeding | |||||||||||||||||||||||||||
earnings | 0.05 | - | - | 0.05 | - | - | |||||||||||||||||||||
Impact of tax credit |
- |
(0.08 | ) |
(100.0 |
)% |
- |
(0.08 | ) |
(100.0 |
)% | |||||||||||||||||
Adjusted diluted net income per share | |||||||||||||||||||||||||||
of common stock |
$ | 0.35 | $ | 0.24 | 45.8 | % | $ | 1.19 | $ | 1.39 | (14.4 | )% | |||||||||||||||
Adjusted net income and adjusted diluted net income per share of common
stock represent net income and diluted net income per share computed in
accordance with GAAP, excluding the impact of: i) a
Non-bonus payroll, adjusted operating expenses, EBITDA, adjusted EBITDA,
adjusted net income and adjusted diluted net income per share of common
stock are not financial measures prepared in accordance with GAAP and
may be different from similar measures used by other companies.
Non-bonus payroll, adjusted operating expenses, EBITDA, adjusted EBITDA,
adjusted net income and adjusted diluted net income per share of common
stock should not be considered as a substitute for, or superior to,
measures of financial performance prepared in accordance with GAAP.
Source:
Insperity, Inc.
Investor Relations Contact:
Douglas
S. Sharp, (281) 348-3232
Senior Vice President of Finance,
Chief
Financial Officer and Treasurer
or
News Media Contact:
Jason
Cutbirth, (281) 312-3085
Senior Vice President of Marketing
jason.cutbirth@insperity.com