- Year-over-year worksite employee growth accelerates from 9% to 12% sequentially
-
Q2 adjusted EPS up 110% to
$0.42 on 11% revenue growth -
Q2 adjusted EBITDA increases 56% to
$22.6 million - Q2 adjusted operating expenses up less than 1% over 2014 on 12% unit growth
- YTD adjusted EBITDA and adjusted EPS up 67% and 100%, respectively
Second Quarter Results
Revenues for the second quarter of 2015 increased 11.2% over the second quarter of 2014. The average number of worksite employees paid per month increased 11.6% during the quarter, an acceleration from the 9.2% year-over-year growth in the first quarter of 2015. All three drivers to worksite employee growth including sales, client retention and net hiring in our client base, improved over the second quarter of 2014.
“Our second quarter results reflect successful execution of our 2015
plan to accelerate growth while carefully managing operating costs,”
said
Adjusted EBITDA increased 55.5% on a 9.2% increase in gross profit and a less than 1% increase in operating expenses over the 2014 period, reflecting planned operating leverage.
Year-to-Date Results
For the six months ended
Revenues in the first six months of 2015 were
Cash outlays in the first six months of 2015 included the repurchase of
645,292 shares of stock at a cost of
“In spite of recently increasing our dividend rate by 16% and being more
aggressive in our share buybacks, our strong cash flow has resulted in a
2015 Guidance
The company also announced its updated guidance for 2015, including guidance for the third quarter of 2015.
Q3 2015 | Full Year 2015 | ||||||||||||
Average WSEEs | 148,500 |
- |
150,000 | 145,750 |
- |
147,000 | |||||||
Year-over-year increase | 13.0% |
- |
14.0% | 11.5% |
- |
12.5% | |||||||
Adjusted EPS | $0.52 |
- |
$0.56 | $2.20 |
- |
$2.29 | |||||||
Year-over-year increase | 33.0% |
- |
43.0% | 52.0% |
- |
58.0% | |||||||
Adjusted EBITDA (in millions) | $27.0 |
- |
$29.0 | $114.0 |
- |
$117.0 | |||||||
Year-over-year increase | 20.0% |
- |
28.0% | 36.0% |
- |
39.0% | |||||||
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 and other charges, stockholder advisory expenses and stock-based compensation. Note that beginning in 2015, the company began excluding 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, non-cash impairment and other charges and stockholder advisory expenses.
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) |
|||||||||
June 30, |
December 31, |
||||||||
(Unaudited) | |||||||||
Assets: | |||||||||
Cash and cash equivalents | $ | 167,728 | $ | 276,456 | |||||
Restricted cash | 48,887 | 44,040 | |||||||
Marketable securities | 21,648 | 28,631 | |||||||
Accounts receivable, net | 265,631 | 175,116 | |||||||
Prepaid insurance | 16,459 | 21,301 | |||||||
Assets held for sale | 12,182 |
- |
|||||||
Other current assets | 15,522 | 17,649 | |||||||
Deferred income taxes | 3,537 | 6,316 | |||||||
Total current assets | 551,594 | 569,509 | |||||||
Property and equipment, net | 58,142 | 84,345 | |||||||
Prepaid health insurance | 9,000 | 9,000 | |||||||
Deposits | 114,577 | 117,634 | |||||||
Goodwill and other intangible assets, net | 14,006 | 14,457 | |||||||
Deferred income taxes | 3,956 |
- |
|||||||
Other assets | 1,773 | 1,725 | |||||||
Total assets | $ | 753,048 | $ | 796,670 | |||||
Liabilities and Stockholders’ Equity: | |||||||||
Accounts payable | $ | 2,383 | $ | 4,674 | |||||
Payroll taxes and other payroll deductions payable | 122,875 | 176,341 | |||||||
Accrued worksite employee payroll cost | 228,091 | 192,396 | |||||||
Accrued health insurance costs | 6,284 | 18,329 | |||||||
Accrued workers’ compensation costs | 50,841 | 45,592 | |||||||
Accrued corporate payroll and commissions | 25,836 | 32,644 | |||||||
Other accrued liabilities | 24,801 | 22,444 | |||||||
Income taxes payable | 1,652 | 4,031 | |||||||
Total current liabilities | 462,763 | 496,451 | |||||||
Accrued workers’ compensation costs | 98,938 | 92,048 | |||||||
Deferred income taxes |
- |
4,075 | |||||||
Total noncurrent liabilities | 98,938 | 96,123 | |||||||
Stockholders’ equity: | |||||||||
Common stock | 308 | 308 | |||||||
Additional paid-in capital | 142,681 | 137,769 | |||||||
Treasury stock, at cost | (176,817 | ) | (148,465 | ) | |||||
Accumulated other comprehensive income, net of tax |
- |
3 | |||||||
Retained earnings | 225,175 | 214,481 | |||||||
Total stockholders’ equity | 191,347 | 204,096 | |||||||
Total liabilities and stockholders’ equity | $ | 753,048 | $ | 796,670 |
Insperity, Inc. Summary Financial Information (continued) (in thousands, except per share amounts and statistical data) (Unaudited) |
|||||||||||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||
Operating results: | |||||||||||||||||||||||
Revenues (gross billings of $3.703 billion, $3.281 |
|||||||||||||||||||||||
billion, $7.643 billion and $6.869 billion less |
|||||||||||||||||||||||
worksite employee payroll cost of $3.075 billion, |
|||||||||||||||||||||||
$2.716 billion, $6.316 billion and $5.667 billion, |
|||||||||||||||||||||||
respectively) | $ | 627,838 | $ | 564,621 | 11.2 | % | $ | 1,327,317 | $ | 1,201,620 | 10.5 | % | |||||||||||
Direct costs: | |||||||||||||||||||||||
Payroll taxes, benefits and workers’ compensation |
|||||||||||||||||||||||
costs |
523,619 | 469,168 | 11.6 | % | 1,093,238 | 999,991 | 9.3 | % | |||||||||||||||
Gross profit | 104,219 | 95,453 | 9.2 | % | 234,079 | 201,629 | 16.1 | % | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Salaries, wages and payroll taxes | 50,234 | 47,829 | 5.0 | % | 106,982 | 98,861 | 8.2 | % | |||||||||||||||
Stock-based compensation | 4,041 | 3,245 | 24.5 | % | 6,464 | 5,645 | 14.5 | % | |||||||||||||||
Commissions | 4,103 | 3,717 | 10.4 | % | 8,407 | 6,963 | 20.7 | % | |||||||||||||||
Advertising | 7,389 | 8,356 | (11.6 | )% | 11,107 | 13,297 | (16.5 | )% | |||||||||||||||
General and administrative expenses | 20,332 | 21,116 | (3.7 | )% | 44,387 | 43,848 | 1.2 | % | |||||||||||||||
Depreciation and amortization | 4,590 | 5,291 | (13.2 | )% | 9,875 | 10,525 | (6.2 | )% | |||||||||||||||
Impairment charges and other | 1,313 | 2,485 | (47.2 | )% | 11,120 | 2,485 | 347.5 | % | |||||||||||||||
Total operating expenses | 92,002 | 92,039 |
- |
198,342 | 181,624 | 9.2 | % | ||||||||||||||||
Operating income | 12,217 | 3,414 | 257.9 | % | 35,737 | 20,005 | 78.6 | % | |||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest, net | (8 | ) | 24 | (133.3 | )% | (1 | ) | 71 | (101.4 | )% | |||||||||||||
Other, net | (32 | ) | 12 | (366.7 | )% | (32 | ) | (14 | ) | 128.6 | % | ||||||||||||
Income before income tax expense | 12,177 | 3,450 | 253.0 | % | 35,704 | 20,062 | 78.0 | % | |||||||||||||||
Income tax expense | 4,863 | 1,559 | 211.9 | % | 14,603 | 8,607 | 69.7 | % | |||||||||||||||
Net income | $ | 7,314 | $ | 1,891 | 286.8 | % | $ | 21,101 | $ | 11,455 | 84.2 | % | |||||||||||
Less distributed and undistributed earnings allocated |
|||||||||||||||||||||||
to participating securities |
(179 | ) | (139 | ) | 28.8 | % | (521 | ) | (333 | ) | 56.5 | % | |||||||||||
Net income allocated to common shares | $ | 7,135 | $ | 1,752 | 307.2 | % | $ | 20,580 | $ | 11,122 | 85.0 | % | |||||||||||
Basic net income per share of common stock | $ | 0.29 | $ | 0.07 | 314.3 | % | $ | 0.83 | $ | 0.45 | 84.4 | % | |||||||||||
Diluted net income per share of common stock | $ | 0.29 | $ | 0.07 | 314.3 | % | $ | 0.83 | $ | 0.45 | 84.4 | % |
Insperity, Inc. Summary Financial Information (continued) (in thousands, except per share amounts and statistical data) (Unaudited) |
|||||||||||||||||||||||
Three Months Ended |
Six Months Ended June 30, |
||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||
Statistical Data: | |||||||||||||||||||||||
Average number of worksite employees paid per |
|||||||||||||||||||||||
month |
143,131 | 128,274 | 11.6 | % | 140,545 | 127,281 | 10.4 | % | |||||||||||||||
Revenues per worksite employee per month(1) | $ | 1,462 | $ | 1,467 | (0.3 | )% | $ | 1,574 | $ | 1,573 | 0.1 | % | |||||||||||
Gross profit per worksite employee per month | 243 | 248 | (2.0 | )% | 278 | 264 | 5.3 | % | |||||||||||||||
Operating expenses per worksite employee per |
|||||||||||||||||||||||
month |
215 | 239 | (10.0 | )% | 236 | 238 | (0.8 | )% | |||||||||||||||
Operating income per worksite employee per |
|||||||||||||||||||||||
month |
28 | 9 | 211.1 | % | 42 | 26 | 61.5 | % | |||||||||||||||
Net income per worksite employee per month | 17 | 5 | 240.0 | % | 25 | 15 | 66.7 | % | |||||||||||||||
(1) |
Gross billings of $8,623, $8,526, $9,064 and $8,994 per worksite employee per month, less payroll cost of $7,161, $7,059, |
|
$7,490 and $7,421 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 June 30, |
Six Months Ended June 30, |
||||||||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||||||||||
Payroll cost (GAAP) | $ | 3,074,892 | $ | 2,716,514 | 13.2 | % | $ | 6,315,874 | $ | 5,667,082 | 11.4 | % | |||||||||||||||||||
Less: Bonus payroll cost | 257,367 | 222,005 | 15.9 | % | 775,870 | 743,346 | 4.4 | % | |||||||||||||||||||||||
Non-bonus payroll cost | $ | 2,817,525 | $ | 2,494,509 | 12.9 | % | $ | 5,540,004 | $ | 4,923,736 | 12.5 | % | |||||||||||||||||||
Payroll cost per worksite |
|||||||||||||||||||||||||||||||
employee per month |
|||||||||||||||||||||||||||||||
(GAAP) |
$ | 7,161 | $ | 7,059 | 1.4 | % | $ | 7,490 | $ | 7,421 | 0.9 | % | |||||||||||||||||||
Less: Bonus payroll cost |
|||||||||||||||||||||||||||||||
per worksite employee |
|||||||||||||||||||||||||||||||
per month |
599 | 577 | 3.8 | % | 920 | 973 | (5.4 | )% | |||||||||||||||||||||||
Non-bonus payroll cost | |||||||||||||||||||||||||||||||
per worksite employee | |||||||||||||||||||||||||||||||
per month | $ | 6,562 | $ | 6,482 | 1.2 | % | $ | 6,570 | $ | 6,448 | 1.9 | % | |||||||||||||||||||
Non-bonus payroll cost represents payroll cost excluding the impact of bonus payrolls paid to the |
|||||||||||||||||||||||||||||||
company’s worksite employees. Bonus payroll cost varies from period to period, but has no |
|||||||||||||||||||||||||||||||
direct impact to the company’s ultimate workers’ compensation costs under the current program. |
|||||||||||||||||||||||||||||||
As a result, Insperity management refers to non-bonus payroll cost in analyzing, reporting and |
|||||||||||||||||||||||||||||||
forecasting the company’s workers’ compensation costs. |
|||||||||||||||||||||||||||||||
June 30, 2015 |
December 31, 2014 |
||||||||||||||||||||||||||||||
Cash, cash equivalents and marketable securities (GAAP) | $ | 189,376 | $ | 305,087 | |||||||||||||||||||||||||||
Less: Amounts payable for withheld federal and state income taxes, |
|||||||||||||||||||||||||||||||
employment taxes and other payroll deductions |
106,169 | 152,132 | |||||||||||||||||||||||||||||
Customer prepayments | 19,376 | 87,887 | |||||||||||||||||||||||||||||
Adjusted cash, cash equivalents and marketable securities | $ | 63,831 | $ | 65,068 |
Adjusted cash, cash equivalents and marketable securities excludes funds associated with federal |
|||||||||||||||||||||||||||
and state income tax withholdings, employment taxes and other payroll deductions, as well as |
|||||||||||||||||||||||||||
client prepayments. Insperity management believes adjusted cash, cash equivalents and |
|||||||||||||||||||||||||||
marketable securities is a useful measure of the company’s available funds. |
|||||||||||||||||||||||||||
June 30, 2015 |
December 31, 2014 |
||||||||||||||||||||||||||
Working capital (GAAP) | $ | 88,831 | $ | 73,058 | |||||||||||||||||||||||
Less: Assets held for sale, net of current deferred tax liabilities | 9,533 |
- |
|||||||||||||||||||||||||
Adjusted working capital | $ | 79,298 | $ | 73,058 | |||||||||||||||||||||||
Adjusted working capital represents working capital excluding assets held for sale that are |
|||||||||||||||||||||||||||
classified as current assets and their associated current deferred tax liabilities. Insperity |
|||||||||||||||||||||||||||
management believes adjusted working capital is a useful measure of the company’s liquidity, as |
|||||||||||||||||||||||||||
it allows for additional analysis of the company’s liquidity separate from the impact of this item. |
|||||||||||||||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||||||
Operating expenses (GAAP) | $ | 92,002 | $ | 92,039 |
- |
$ | 198,342 | $ | 181,624 | 9.2 | % | ||||||||||||||||
Less: Impairment charges and other | 1,313 | 2,485 | (47.2 | )% | 11,120 | 2,485 | 347.5 | % | |||||||||||||||||||
Stockholder advisory expenses | 398 |
- |
- |
1,546 |
- |
- |
|||||||||||||||||||||
Adjusted operating expenses | $ | 90,291 | $ | 89,554 | 0.8 | % | $ | 185,676 | $ | 179,139 | 3.6 | % | |||||||||||||||
Adjusted operating expenses represent operating expenses excluding the impact of impairment |
|||||||||||||||||||||||||||
and other charges related to the valuation of aircraft held for sale and stockholder advisory |
|||||||||||||||||||||||||||
expenses in 2015 and an impairment charge associated with the Employment Screening reporting |
|||||||||||||||||||||||||||
unit in 2014. Insperity management believes adjusted operating expenses is a useful measure of |
|||||||||||||||||||||||||||
the company’s operating costs, as it allows for additional analysis of the company’s operating |
|||||||||||||||||||||||||||
expenses separate from the impact of these items. |
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||||||||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||||||||||||||||||||||||||
Net income (GAAP) | $ | 7,314 | $ | 1,891 | 286.8 | % | $ | 21,101 | $ | 11,455 | 84.2 | % | |||||||||||||||||||||||||||||||||||
Income tax expense | 4,863 | 1,559 | 211.9 | % | 14,603 | 8,607 | 69.7 | % | |||||||||||||||||||||||||||||||||||||||
Interest expense | 124 | 88 | 40.9 | % | 224 | 177 | 26.6 | % | |||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 4,590 | 5,291 | (13.2 | )% | 9,875 | 10,525 | (6.2 | )% | |||||||||||||||||||||||||||||||||||||||
EBITDA | 16,891 | 8,829 | 91.3 | % | 45,803 | 30,764 | 48.9 | % | |||||||||||||||||||||||||||||||||||||||
Impairment charges and other | 1,313 | 2,485 | (47.2 | )% | 11,120 | 2,485 | 347.5 | % | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 4,041 | 3,245 | 24.5 | % | 6,464 | 5,645 | 14.5 | % | |||||||||||||||||||||||||||||||||||||||
Stockholder advisory expenses | 398 |
- |
- |
1,546 |
- |
- |
|||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 22,643 | $ | 14,559 | 55.5 | % | $ | 64,933 | $ | 38,894 | 66.9 | % | |||||||||||||||||||||||||||||||||||
EBITDA represents net income computed in accordance with generally accepted accounting | |||||||||||||||||||||||||||||||||||||||||||||||
principles (“GAAP”), plus interest expense, income tax expense, depreciation and amortization | |||||||||||||||||||||||||||||||||||||||||||||||
expense. Adjusted EBITDA represents EBITDA plus non-cash impairment and other charges, | |||||||||||||||||||||||||||||||||||||||||||||||
costs associated with stockholder advisory expenses and stock-based compensation. Insperity | |||||||||||||||||||||||||||||||||||||||||||||||
management believes EBITDA and Adjusted EBITDA are often useful measures of the | |||||||||||||||||||||||||||||||||||||||||||||||
company’s operating performance, as they allow for additional analysis of the company’s | |||||||||||||||||||||||||||||||||||||||||||||||
operating results separate from the impact of these items. |
|||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||||||||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||||||||||||||||||||||||||
Net income (GAAP) | $ | 7,314 | $ | 1,891 | 286.8 | % | $ | 21,101 | $ | 11,455 | 84.2 | % | |||||||||||||||||||||||||||||||||||
Impairment charges and other, net of tax | 789 | 1,566 | (49.6 | )% | 6,572 | 1,566 | 319.7 | % | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation, net of tax | 2,429 | 1,778 | 36.6 | % | 3,820 | 3,223 | 18.5 | % | |||||||||||||||||||||||||||||||||||||||
Stockholder advisory expenses, net of tax | 239 |
- |
- |
914 |
- |
- |
|||||||||||||||||||||||||||||||||||||||||
Adjusted net income | $ | 10,771 | $ | 5,235 | 105.7 | % | $ | 32,407 | $ | 16,244 | 99.5 | % | |||||||||||||||||||||||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||||||||||||||||||||||||||||||
2015 |
2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||||||||||||||||||||||||||
Diluted net income per share of common | |||||||||||||||||||||||||||||||||||||||||||||||
stock (GAAP) | $ | 0.29 | $ | 0.07 | 314.3 | % | $ | 0.83 | $ | 0.45 | 84.4 | % | |||||||||||||||||||||||||||||||||||
Impairment charges and other, net of tax | 0.03 | 0.06 | (50.0 | )% | 0.26 | 0.06 | 333.3 | % | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation, net of tax | 0.09 | 0.07 | 28.6 | % | 0.15 | 0.13 | 15.4 | % | |||||||||||||||||||||||||||||||||||||||
Stockholder advisory expenses, net of tax | 0.01 |
- |
- |
0.04 |
- |
- |
|||||||||||||||||||||||||||||||||||||||||
Adjusted diluted net income per share of | |||||||||||||||||||||||||||||||||||||||||||||||
common stock | $ | 0.42 | $ | 0.20 | 110.0 | % | $ | 1.28 | $ | 0.64 | 100.0 | % | |||||||||||||||||||||||||||||||||||
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 non-cash impairment and
other charges related to the valuation of aircraft held for sale in 2015
and an impairment charge associated with the Employment Screening
reporting unit in 2014, stock-based compensation and costs associated
with stockholder advisory expenses.
Non-bonus payroll, adjusted cash, cash equivalents and marketable securities, adjusted working capital, 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 cash, cash equivalents and marketable securities, adjusted working capital, 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. Investors are encouraged to review the reconciliation of the non-GAAP financial measures used in this press release to their most directly comparable GAAP financial measures as provided in the tables above.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150803005270/en/
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