-
Q3 EPS of
$0.33 and adjusted EBITDA of$22.6 million - Gross profit contribution from Strategic Business Units up 20%
-
$35 million returned to stockholders year-to-date through share repurchases and dividends
“We are pleased with our recent financial results and the growth
acceleration that has unfolded over the past two quarters,” said
Third Quarter Results
Revenues for the third quarter of 2014 increased 3.8% over the third
quarter of 2013 due to a 1.8% increase in the average number of worksite
employees paid per month and a 2.0% increase in revenues per worksite
employee per month. The average number of paid worksite employees
increased 2.6% sequentially over the second quarter of 2014. Gross
profit increased 3.5% compared to the third quarter of 2013 to
Operating expenses increased to our forecasted level of
Year-to-Date Results
For the nine months ended
Year-to-date revenues were
Adjusted 2014 year-to-date operating expenses, excluding the impact of
the impairment charge, increased to
“As a result of our focus on operating expense control throughout 2014,
we now expect approximately
Cash outlays in the first nine months of 2014 included the repurchase of
693,262 shares of stock at a cost of
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) | ||||||||||||
September 30, | December 31, | |||||||||||
2014 | 2013 | |||||||||||
(Unaudited) | ||||||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $ | 179,458 | $ | 225,755 | ||||||||
Restricted cash | 57,222 | 51,928 | ||||||||||
Marketable securities | 45,953 | 46,340 | ||||||||||
Accounts receivable, net | 244,814 | 210,009 | ||||||||||
Prepaid insurance | 30,613 | 10,638 | ||||||||||
Other current assets | 12,851 | 12,053 | ||||||||||
Income taxes receivable | 2,740 | 409 | ||||||||||
Deferred income taxes |
- |
8,185 | ||||||||||
Total current assets | 573,651 | 565,317 | ||||||||||
Property and equipment, net | 82,765 | 86,415 | ||||||||||
Prepaid health insurance | 9,000 | 9,000 | ||||||||||
Deposits | 97,386 | 85,578 | ||||||||||
Goodwill and other intangible assets, net | 14,808 | 18,434 | ||||||||||
Other assets | 1,748 | 1,816 | ||||||||||
Total assets | $ | 779,358 | $ | 766,560 | ||||||||
Liabilities and Stockholders’ Equity: | ||||||||||||
Accounts payable | $ | 3,255 | $ | 2,678 | ||||||||
Payroll taxes and other payroll deductions payable | 105,026 | 165,604 | ||||||||||
Accrued worksite employee payroll cost | 211,028 | 173,801 | ||||||||||
Accrued health insurance costs | 26,351 | 5,103 | ||||||||||
Accrued workers’ compensation costs | 59,393 | 52,930 | ||||||||||
Accrued corporate payroll and commissions | 26,474 | 21,611 | ||||||||||
Other accrued liabilities | 23,008 | 14,960 | ||||||||||
Total current liabilities | 454,535 | 436,687 | ||||||||||
Accrued workers’ compensation costs | 73,009 | 68,905 | ||||||||||
Deferred income taxes | 3,806 | 7,696 | ||||||||||
Total noncurrent liabilities | 76,815 | 76,601 | ||||||||||
Stockholders’ equity: | ||||||||||||
Common stock | 308 | 308 | ||||||||||
Additional paid-in capital | 136,972 | 135,653 | ||||||||||
Treasury stock, at cost | (151,091 | ) | (138,688 | ) | ||||||||
Accumulated other comprehensive income, net of tax | 24 | 29 | ||||||||||
Retained earnings | 261,795 | 255,970 | ||||||||||
Total stockholders’ equity | 248,008 | 253,272 | ||||||||||
Total liabilities and stockholders’ equity | $ | 779,358 | $ | 766,560 | ||||||||
Insperity, Inc. | ||||||||||||||||||||||||||||||
Summary Financial Information (continued) | ||||||||||||||||||||||||||||||
(in thousands, except per share amounts and statistical data) | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | |||||||||||||||||||||||||
Operating results: | ||||||||||||||||||||||||||||||
Revenues (gross billings of $3.362 billion, | ||||||||||||||||||||||||||||||
$3.236 billion, $10.231 billion and $9.736 | ||||||||||||||||||||||||||||||
billion, less worksite employee payroll | ||||||||||||||||||||||||||||||
cost of $2.802 billion, $2.696 billion, | ||||||||||||||||||||||||||||||
$8.469 billion and $8.037 billion, | ||||||||||||||||||||||||||||||
respectively) | $ | 560,303 | $ | 539,869 | 3.8 | % | $ | 1,761,923 | $ | 1,698,979 | 3.7 | % | ||||||||||||||||||
Direct costs: | ||||||||||||||||||||||||||||||
Payroll taxes, benefits and workers’ | ||||||||||||||||||||||||||||||
compensation costs | 459,486 | 442,460 | 3.8 | % | 1,459,477 | 1,395,706 | 4.6 | % | ||||||||||||||||||||||
Gross profit | 100,817 | 97,409 | 3.5 | % | 302,446 | 303,273 | (0.3 | )% | ||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||
Salaries, wages and payroll taxes | 49,384 | 43,797 | 12.8 | % | 148,245 | 137,697 | 7.7 | % | ||||||||||||||||||||||
Stock-based compensation | 2,701 | 2,749 | (1.7 | )% | 8,346 | 8,351 | (0.1 | )% | ||||||||||||||||||||||
Commissions | 3,790 | 3,609 | 5.0 | % | 10,753 | 10,349 | 3.9 | % | ||||||||||||||||||||||
Advertising | 4,885 | 4,273 | 14.3 | % | 18,182 | 19,243 | (5.5 | )% | ||||||||||||||||||||||
General and administrative expenses | 20,295 | 20,567 | (1.3 | )% | 64,143 | 62,592 | 2.5 | % | ||||||||||||||||||||||
Depreciation and amortization | 5,302 | 5,302 |
- |
15,827 | 15,692 | 0.9 | % | |||||||||||||||||||||||
Impairment charge |
- |
- |
- |
2,485 |
- |
100.0 | % | |||||||||||||||||||||||
Total operating expenses | 86,357 | 80,297 | 7.5 | % | 267,981 | 253,924 | 5.5 | % | ||||||||||||||||||||||
Operating income | 14,460 | 17,112 | (15.5 | )% | 34,465 | 49,349 | (30.2 | )% | ||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||
Interest, net | 9 | 26 | (65.4 | )% | 80 | 155 | (48.4 | )% | ||||||||||||||||||||||
Other, net | 34 | (1 | ) |
- |
20 | (2,668 | ) | (100.7 | )% | |||||||||||||||||||||
Income before income tax expense | 14,503 | 17,137 | (15.4 | )% | 34,565 | 46,836 | (26.2 | )% | ||||||||||||||||||||||
Income tax expense | 6,118 | 7,055 | (13.3 | )% | 14,725 | 20,093 | (26.7 | )% | ||||||||||||||||||||||
Net income | $ | 8,385 | $ | 10,082 | (16.8 | )% | $ | 19,840 | $ | 26,743 | (25.8 | )% | ||||||||||||||||||
Less distributed and undistributed earnings | ||||||||||||||||||||||||||||||
allocated to participating securities | (243 | ) | (289 | ) | (15.9 | )% | (576 | ) | (769 | ) | (25.1 | )% | ||||||||||||||||||
Net income allocated to common shares | $ | 8,142 | $ | 9,793 | (16.9 | )% | $ | 19,264 | $ | 25,974 | (25.8 | )% | ||||||||||||||||||
Basic net income per share of | ||||||||||||||||||||||||||||||
common stock | $ | 0.33 | $ | 0.39 | (15.4 | )% | $ | 0.78 | $ | 1.05 | (25.7 | )% | ||||||||||||||||||
Diluted net income per share of common | ||||||||||||||||||||||||||||||
stock | $ | 0.33 | $ | 0.39 | (15.4 | )% | $ | 0.78 | $ | 1.04 | (25.0 | )% | ||||||||||||||||||
Insperity, Inc. | ||||||||||||||||||||||||||||||
Summary Financial Information (continued) | ||||||||||||||||||||||||||||||
(in thousands, except per share amounts and statistical data) | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | |||||||||||||||||||||||||
Statistical Data: | ||||||||||||||||||||||||||||||
Average number of worksite employees paid | ||||||||||||||||||||||||||||||
per month | 131,545 | 129,248 | 1.8 | % | 128,703 | 126,445 | 1.8 | % | ||||||||||||||||||||||
Revenues per worksite employee per month(1) | $ | 1,420 | $ | 1,392 | 2.0 | % | $ | 1,521 | $ | 1,493 | 1.9 | % | ||||||||||||||||||
Gross profit per worksite employee per month |
255 | 251 | 1.6 | % | 261 | 266 | (1.9 | )% | ||||||||||||||||||||||
Operating expenses per worksite employee per | ||||||||||||||||||||||||||||||
month | 218 | 207 | 5.3 | % | 231 | 223 | 3.6 | % | ||||||||||||||||||||||
Operating income per worksite employee per | ||||||||||||||||||||||||||||||
month | 37 | 44 | (15.9 | )% | 30 | 43 | (30.2 | )% | ||||||||||||||||||||||
Net income per worksite employee per month | 21 | 26 | (19.2 | )% | 17 | 23 | (26.1 | )% | ||||||||||||||||||||||
(1) |
Gross billings of $8,519, $8,346, $8,832 and $8,555 per worksite employee per month, less payroll cost of $7,099, $6,954, | |
$7,311 and $7,062 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 | Nine Months Ended | ||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||
2014 |
2013 |
Change |
2014 |
2013 | Change | ||||||||||||||||||||||
Payroll cost (GAAP) | $ | 2,801,722 |
$ |
2,696,330 |
3.9 | % |
$ |
8,468,804 |
$ | 8,036,532 | 5.4 | % | |||||||||||||||
Less: Bonus payroll cost | 204,405 |
192,868 |
6.0 | % |
947,751 |
706,795 | 34.1 | % | |||||||||||||||||||
Non-bonus payroll cost | $ | 2,597,317 |
$ |
2,503,462 |
3.7 | % |
$ |
7,521,053 |
$ | 7,329,737 | 2.6 | % | |||||||||||||||
Payroll cost per worksite | |||||||||||||||||||||||||||
employee per month | |||||||||||||||||||||||||||
(GAAP) | $ | 7,099 | $ | 6,954 | 2.1 | % | $ | 7,311 | $ | 7,062 | 3.5 | % | |||||||||||||||
Less: Bonus payroll cost per | |||||||||||||||||||||||||||
worksite employee per | |||||||||||||||||||||||||||
month | 518 | 498 | 4.0 | % | 818 | 621 | 31.7 | % | |||||||||||||||||||
Non-bonus payroll cost | |||||||||||||||||||||||||||
per worksite employee | |||||||||||||||||||||||||||
per month | $ | 6,581 | $ | 6,456 | 1.9 | % | $ | 6,493 | $ | 6,441 | 0.8 | % | |||||||||||||||
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. | |||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||
2014 |
2013 |
Change |
2014 | 2013 | Change | ||||||||||||||||||||||
Operating expenses (GAAP) |
$ |
86,357 |
$ |
80,297 |
7.5 |
% |
$ | 267,981 | $ | 253,924 | 5.5 | % | |||||||||||||||
Impairment charge |
- |
- |
- |
2,485 |
- |
100.0 | % | ||||||||||||||||||||
Adjusted operating expenses |
$ |
86,357 |
$ |
80,297 |
7.5 |
% |
$ | 265,496 | $ | 253,924 | 4.6 | % | |||||||||||||||
Adjusted operating expenses represent operating expenses excluding the impact of impairment charges. |
|||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||
2014 |
2013 |
Change |
2014 | 2013 | Change | ||||||||||||||||||||||
Net income (GAAP) |
$ |
8,385 |
$ | 10,082 |
(16.8 |
)% |
$ | 19,840 | $ | 26,743 | (25.8 | )% | |||||||||||||||
Income tax expense |
6,118 |
7,055 |
(13.3 |
)% |
14,725 | 20,093 | (26.7 | )% | |||||||||||||||||||
Interest expense |
104 |
88 |
18.2 |
% |
281 | 264 | 6.4 | % | |||||||||||||||||||
Depreciation and amortization |
5,302 |
5,302 |
- |
15,827 | 15,692 | 0.9 | % | ||||||||||||||||||||
EBITDA |
19,909 |
22,527 |
(11.6 |
)% |
50,673 | 62,792 | (19.3 | )% | |||||||||||||||||||
Impairment charges |
- |
- |
- |
2,485 | 2,679 | (7.2 | )% | ||||||||||||||||||||
Stock-based compensation |
2,701 |
2,749 |
(1.7 |
)% |
8,346 | 8,351 | (0.1 | )% | |||||||||||||||||||
Adjusted EBITDA |
$ |
22,610 |
$ | 25,276 |
(10.5 |
)% |
$ | 61,504 | $ | 73,822 | (16.7 | )% | |||||||||||||||
EBITDA represents net income computed in accordance with generally accepted accounting | |||||||||||||||||||||||||||
principles (“GAAP”), plus interest expense, income tax expense, depreciation and amortization | |||||||||||||||||||||||||||
expense. 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 taxes and capital and financing | |||||||||||||||||||||||||||
transactions on earnings. | |||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||
2014 |
2013 |
Change |
2014 | 2013 | Change | ||||||||||||||||||||||
Net income (GAAP) |
$ |
8,385 |
$ | 10,082 |
(16.8 |
)% |
$ | 19,840 | $ | 26,743 | (25.8 | )% | |||||||||||||||
Impairment charges, | |||||||||||||||||||||||||||
net of tax | - | - | - | 1,566 | 2,679 | (41.5 | )% | ||||||||||||||||||||
Adjusted net income |
$ |
8,385 |
$ | 10,082 |
(16.8 |
)% |
$ |
21,406 |
$ | 29,422 | (27.2 | )% | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||
2014 |
2013 |
Change |
2014 |
2013 | Change | ||||||||||||||||||||||
Diluted net income per share of | |||||||||||||||||||||||||||
common stock (GAAP) | $ | 0.33 | $ | 0.39 | (15.4 | )% | $ | 0.78 | $ | 1.04 | (25.0 | )% | |||||||||||||||
Impairment charges, | |||||||||||||||||||||||||||
net of tax | - | - | - | 0.06 | 0.10 | (40.0 | )% | ||||||||||||||||||||
Adjusted diluted net income | |||||||||||||||||||||||||||
per share of common stock | $ | 0.33 | $ | 0.39 | (15.4 | )% | $ | 0.84 | $ | 1.14 | (26.3 | )% | |||||||||||||||
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 the impairment charge
related to Employment Screening reporting unit in 2014 and the
impairment charge related to The Receivables Exchange in 2013.
Non-bonus payroll, 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, 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