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CBIZ Inc. Reports Operating Results (10-Q)

November 09, 2010 | About:
10qk

10qk

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CBIZ Inc. (CBZ) filed Quarterly Report for the period ended 2010-09-30.

Cbiz Inc. has a market cap of $391.8 million; its shares were traded at around $6.35 with a P/E ratio of 12.4 and P/S ratio of 0.5. Cbiz Inc. had an annual average earning growth of 12.6% over the past 10 years.CBZ is in the portfolios of Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Revenue for the three months ended September 30, 2010 increased by 0.4% to $176.5 million from the $175.8 million reported for the comparable period in 2009. Revenue from newly acquired operations contributed $4.5 million, or 2.6% to the growth in revenue, which was offset by same-unit revenue declines of $3.8 million, or 2.2%. Revenue for the nine months ended September 30, 2010 decreased by 1.7% to $567.6 million from the $577.4 million reported for the comparable period in 2009. Revenue from newly acquired operations contributed $15.6 million, or 2.8% to revenue, which was offset by same-unit revenue declines of $25.5 million, or 4.4%.

Operating expenses declined $1.8 million or 1.1%, and decreased as a percentage of revenue to 89.6% for the three months ended September 30, 2010 from 91.0% for the three months ended September 30, 2009. Earnings per share from continuing operations was $0.09 per diluted share for the three months ended September 30, 2010 and 2009. Operating expenses declined by $9.8 million or 2.0%, and decreased as a percentage of revenue to 86.3% for the nine months ended September 30, 2010 from 86.5% for the nine months ended September 30, 2009. Earnings per share from continuing operations was $0.48 per diluted share for the nine months ended September 30, 2010 and $0.50 per diluted share for the comparable period in 2009.

Cash earnings per diluted share were $0.24 and $0.21 for the three months ended September 30, 2010 and 2009, respectively, and $0.87 and $0.84 for the nine months ended September 30, 2010 and 2009, respectively. CBIZ believes cash earnings per diluted share more clearly illustrates the impact of certain non-cash charges to income from continuing operations and is a useful measure for the Company and its analysts. Cash earnings per diluted share is a measurement prepared on a basis other than generally accepted accounting principles (GAAP), otherwise known as a non-GAAP measure. As such, the Company has included this data and has provided a reconciliation to the nearest GAAP measurement, income per diluted share from continuing operations. Reconciliations for the three and nine months ended September 30, 2010 and 2009 are provided in the Results of Operations Continuing Operations section that follows.

On September 27, 2010, CBIZ completed a $130.0 million offering of Convertible Senior Subordinated Notes (2010 Notes). The 2010 Notes bear interest at 4.875% per annum and mature on October 1, 2015. Net proceeds from the sale of the 2010 Notes were used to repurchase $60.0 million of the 3.125% Convertible Notes issued in 2006 (2006 Notes) through privately negotiated transactions, purchase approximately 4.6 million shares of CBIZ common stock at a total cost of approximately $25.1 million, and the remaining $41.1 million was used to pay down the outstanding balance on the $275 million unsecured credit facility.

Interest expense Interest expense increased by $0.5 million to $3.7 million for the three months ended September 30, 2010 from $3.2 million for the comparable period in 2009. The increase in interest expense relates to higher average debt outstanding under the credit facility for the three months ended September 30, 2010 versus the comparable period in 2009 as well as an increase in average interest rates. Average debt outstanding under the facility was $121.8 million and $116.9 million and weighted average interest rates were 4.0% and 3.5% for the three months ended September 30, 2010 and 2009, respectively. In addition, as a result of the new $275 million credit facility entered into on June 4, 2010, which replaced a $214 million credit facility, amortization of deferred debt and commitment fees, which are recorded in interest expense, increased $0.2 million for the three months ended September 30, 2010 versus the comparable period in 2009.

which resulted in other income of $0.7 million. The deferred compensation gain of $2.4 million and the contingent liability gain of $0.7 million were partially offset by a loss of $2.0 million on the repurchase of $60.0 million of CBIZs 2006 Notes and a $0.3 million impairment charge related to an investment in auction rate securities.

Read the The complete Report

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10qk
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