Insperity Announces Full Year and Fourth Quarter 2020 Results
HOUSTON–(BUSINESS WIRE)–Insperity, Inc. (NYSE: NSP), a leading provider of human resources and business performance solutions for America’s best businesses, today reported results for the fourth quarter and year ended Dec. 31, 2020.
- 2020 net income and diluted EPS of $138.2 million and $3.54, respectively
- 2020 adjusted EPS up 12% to $4.64
- 2020 adjusted EBITDA up 15% to $288.6 million
- Q4 net income and diluted EPS of $4.3 million and $0.11, respectively
- Q4 adjusted EPS of $0.49
- Q4 adjusted EBITDA of $37.9 million
Full Year Results
For the year ended Dec. 31, 2020, reported net income and diluted earnings per share (“EPS”) were $138.2 million and $3.54, respectively. Adjusted EBITDA increased 15% to $288.6 million and adjusted EPS increased 12% over 2019 to $4.64. The difference between GAAP EPS and adjusted EPS was primarily caused by performance-driven stock-based compensation.
“We are pleased with our excellent fourth quarter and full year results, and the outstanding performance of our entire Insperity team, in the face of an unprecedented and challenging year,” said Paul J. Sarvadi, Insperity chairman and chief executive officer. “The proven value of our HR services offering and the resiliency of our targeted small business client base, combined with continuing momentum in sales and core client retention, bodes well for growth acceleration as we progress through 2021 and beyond.”
The average number of worksite employees (“WSEEs”) paid per month declined by just 1% in the face of the significant impact of the pandemic on our clients, prospects and the broader economy. Revenues in 2020 also decreased by 1% to $4.3 billion. Average pricing increased 3% for the full year 2020 over 2019, more than offsetting the decline in average paid WSEEs; however, the FICA deferral program instituted as part of the CARES Act further reduced revenues. This program had no impact on our gross profit.
Gross profit for the year ended Dec. 31, 2020 increased 10% to $806.9 million. The average gross profit per WSEE per month increased from $259 in 2019 to $287 in 2020, due to improved pricing while experiencing lower benefits and workers’ compensation cost trends. Lower healthcare utilization during the pandemic, particularly associated with office visits and elective procedures, outweighed any incremental COVID-19 testing and treatment costs and drove the lower cost trend. Workers’ compensation costs trended lower on the ongoing management of safety practices and claims. The reported increase in gross profit was net of comprehensive service fee credits provided to our clients as a result of negotiated savings with our vendors.
Operating expenses increased 12% over 2019 to $612.2 million, and included continued investments in our growth, products and technology. These investments were partially offset by cost savings in other areas of our business, both through effective management and as a result of pandemic related cancellations and shutdowns. An increase in stock-based compensation was driven by our outperformance in the level of earnings throughout 2020. Operating expenses, excluding stock-based compensation and depreciation and amortization, increased by 6% over the 2019 period.
“Our 2020 results reflect a strong company response to the pandemic-related challenges to our growth combined with some unexpected benefit in our direct cost programs,” said Douglas S. Sharp, senior vice president of finance, chief financial officer and treasurer. “Our outlook for 2021 includes growth acceleration with modest growth within our client base as the small business climate gradually improves, combined with normalization of our direct costs and continued investment in our future growth.”
Cash outlays in 2020 included the repurchase of approximately 1.4 million shares of stock at a cost of $99.4 million, dividends totaling $61.9 million and capital expenditures of $98.2 million partially offset by borrowings of $100.0 million under our credit facility. Adjusted cash, cash equivalents and marketable securities at Dec. 31, 2020 was $212.1 million, and $369.4 million was outstanding under our $500 million credit facility.
Fourth Quarter Results
For the fourth quarter 2020 net income and diluted EPS were $4.3 million and $0.11, respectively. Adjusted EPS decreased 14% compared to the 2019 period to $0.49 and adjusted EBITDA decreased 7% to $37.9 million.
The average number WSEEs paid per month in Q4 2020 increased 3% sequentially over the Q3 period to 239,232, which was above the high end of our expected range. All three drivers to our growth, including worksite employees paid from new sales, client retention and net gains in our client base exceeded our Q4 forecast and drove the continued improvement over the course of the pandemic from the low point experienced in May 2020. This improvement resulted in just a 2% year-over-year decline in the average number of paid WSEEs and revenues compared to the Q4 2019 period. Average pricing increased 4% over Q4 2019, more than offsetting the decline in average paid WSEEs; however, the FICA deferral program instituted as part of the CARES Act further reduced revenues.
Gross profit increased 3% over the fourth quarter of 2019 to $167.6 million. Operating expenses increased 19% to $159.8 million over the 2019 period, including an increase in stock-based compensation that was driven by our outperformance in the level of full year earnings. Operating expenses, excluding stock-based compensation and depreciation and amortization, increased by 5% over the 2019 period.
2021 Guidance
The company also announced its guidance for 2021, including the first quarter of 2021, which reflects solid sales and improved core client retention through the year-end transition offset by the loss of a large enterprise account. Please refer to the accompanying financial tables at the end of this press release for the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures.
|
|
Q1 2021 |
|
Full Year 2021 |
||||
|
|
|
|
|
|
|
|
|
|
Average WSEEs paid |
232,100 |
— |
234,400 |
|
238,900 |
— |
248,300 |
|
Year-over-year increase (decrease) |
(2.5)% |
— |
(1.5)% |
|
2.0% |
— |
6.0% |
|
|
|
|
|
|
|
|
|
|
Adjusted EPS |
$1.37 |
— |
$1.72 |
|
$3.27 |
— |
$4.20 |
|
Year-over-year increase (decrease) |
(19.4)% |
— |
1.2% |
|
(29.5)% |
— |
(9.5)% |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (in millions) |
$84 |
— |
$103 |
|
$225 |
— |
$275 |
|
Year-over-year increase (decrease) |
(17.0)% |
— |
1.7% |
|
(22.0)% |
— |
(4.7)% |
Definition of Key Metrics
Average WSEEs – Determined by calculating the company’s cumulative WSEEs 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 stock-based compensation.
Adjusted EBITDA – Represents net income computed in accordance with GAAP, plus interest expense, income taxes, depreciation and amortization expense and non-cash stock-based compensation.
Insperity will be hosting a conference call today at 5 p.m. ET to discuss these results, provide guidance for the first quarter and full year 2021 and answer questions from investment analysts. To listen in, call 877-651-0053 and use conference i.d. number 4180394. The call will also be webcast at http://ir.insperity.com. The conference call script will be available at the same website later today. A replay of the conference call will be available at 855-859-2056, conference i.d. 4180394. The webcast will be archived for one year.
About Insperity
Insperity®, a trusted advisor to America’s best businesses for more than 34 years, provides an array of human resources and business solutions designed to help improve business performance. Offering the most comprehensive suite of products and services available in the marketplace, Insperity delivers administrative relief, better benefits, reduced liabilities and a systematic way to improve productivity through its premier Workforce Optimization® solution. Additional company offerings include Traditional Payroll and Human Capital Management, Time and Attendance, Performance Management, Organizational Planning, Recruiting Services, Employment Screening, Retirement Services and Insurance Services. With 2020 revenues of $4.3 billion, Insperity supports more than 100,000 businesses with over 2 million employees nationwide. For more information, visit http://www.insperity.com.
Forward-Looking Statements
The statements contained herein that are not historical facts are forward-looking statements within the meaning of the 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, in an effort to help keep our stockholders and the public informed about our operations, from time to time, we may issue such forward-looking statements, either orally or in writing. Generally, these statements relate to business plans or strategies; projected or anticipated benefits or other consequences of such plans or strategies; or projections involving anticipated revenues, earnings, average number of worksite employee, benefits and workers’ compensation costs, or other operating results. We base the forward-looking statements on our current expectations, estimates and projections. We caution you that these statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Therefore, the actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are:
- adverse economic conditions;
- impact of the COVID-19 pandemic, or other future pandemics, including the scope, severity and duration of the pandemic; government responses; regulatory developments; and the related disruptions and economic impact to our business and the small and medium-sized businesses that we serve;
- vulnerability to regional economic factors because of our geographic market concentration;
- failure to comply with covenants under our credit facility;
- our liability for worksite employee payroll, payroll taxes and benefits costs;
- increases in health insurance costs and workers’ compensation rates and underlying claims trends, health care reform, financial solvency of workers’ compensation carriers, other insurers or financial institutions, state unemployment tax rates, liabilities for employee and client actions or payroll-related claims;
- cancellation of client contracts on short notice, or the inability to renew client contracts or attract new clients;
- the ability to secure competitive replacement contracts for health insurance and workers’ compensation insurance at expiration of current contracts;
- regulatory and tax developments and possible adverse application of various federal, state and local regulations;
- failure to manage growth of our operations and the effectiveness of our sales and marketing efforts;
- the impact of the competitive environment and other developments in the human resources services industry, including the PEO industry, on our growth and/or profitability;
- an adverse final judgment or settlement of claims against Insperity;
- disruptions of our information technology systems;
- our liability or damage to our reputation relating to disclosure of sensitive or private information;
- failure of third-party providers, data centers or cloud service providers; and
- our ability to integrate or realize expected returns on our acquisitions.
These factors are discussed in further detail in Insperity’s filings with the U.S. Securities and Exchange Commission. Any of these factors, or a combination of such factors, could materially affect the results of our operations and whether forward-looking statements we make ultimately prove to be accurate.
Any forward-looking statements are made only as of the date hereof and, unless otherwise required by applicable securities laws, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
|
Insperity, Inc. |
|||||||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||||
|
|
|||||||||
|
|
Dec. 31, |
|
Dec. 31, |
||||||
|
(in thousands) |
2020 |
|
|
2019 |
|
||||
|
|
|
|
|
||||||
|
Assets |
|
|
|
||||||
|
Cash and cash equivalents |
$ |
554,846 |
|
|
|
$ |
367,342 |
|
|
|
Restricted cash |
45,522 |
|
|
|
49,295 |
|
|
||
|
Marketable securities |
34,529 |
|
|
|
34,728 |
|
|
||
|
Accounts receivable, net |
392,746 |
|
|
|
465,779 |
|
|
||
|
Prepaid insurance |
10,164 |
|
|
|
10,418 |
|
|
||
|
Other current assets |
39,461 |
|
|
|
43,493 |
|
|
||
|
Income taxes receivable |
— |
|
|
|
3,691 |
|
|
||
|
Total current assets |
1,077,268 |
|
|
|
974,746 |
|
|
||
|
Property and equipment, net |
216,256 |
|
|
|
147,706 |
|
|
||
|
Right-of-use leased assets |
60,663 |
|
|
|
56,886 |
|
|
||
|
Prepaid health insurance |
9,000 |
|
|
|
9,000 |
|
|
||
|
Deposits |
194,231 |
|
|
|
184,013 |
|
|
||
|
Goodwill and other intangible assets, net |
12,707 |
|
|
|
12,714 |
|
|
||
|
Deferred income taxes, net |
9,603 |
|
|
|
3,956 |
|
|
||
|
Other assets |
4,548 |
|
|
|
5,975 |
|
|
||
|
Total assets |
$ |
1,584,276 |
|
|
|
$ |
1,394,996 |
|
|
|
|
|
|
|
||||||
|
Liabilities and stockholders’ equity |
|
|
|
||||||
|
Accounts payable |
$ |
6,203 |
|
|
|
$ |
4,565 |
|
|
|
Payroll taxes and other payroll deductions payable |
377,960 |
|
|
|
277,248 |
|
|
||
|
Accrued worksite employee payroll cost |
334,836 |
|
|
|
401,859 |
|
|
||
|
Accrued health insurance costs |
32,685 |
|
|
|
21,180 |
|
|
||
|
Accrued workers’ compensation costs |
48,186 |
|
|
|
52,868 |
|
|
||
|
Accrued corporate payroll and commissions |
44,277 |
|
|
|
52,612 |
|
|
||
|
Other accrued liabilities |
60,777 |
|
|
|
58,713 |
|
|
||
|
Total current liabilities |
904,924 |
|
|
|
869,045 |
|
|
||
|
|
|
|
|
||||||
|
Accrued workers’ compensation costs |
195,239 |
|
|
|
193,609 |
|
|
||
|
Long-term debt |
369,400 |
|
|
|
269,400 |
|
|
||
|
Operating lease liabilities, net of current |
64,289 |
|
|
|
58,863 |
|
|
||
|
Other accrued liabilities, net of current |
6,292 |
|
|
|
— |
|
|
||
|
Total noncurrent liabilities |
635,220 |
|
|
|
521,872 |
|
|
||
|
|
|
|
|
||||||
|
Stockholders’ equity: |
|
|
|
||||||
|
Common stock |
555 |
|
|
|
555 |
|
|
||
|
Additional paid-in capital |
95,528 |
|
|
|
48,141 |
|
|
||
|
Treasury stock, at cost |
(626,984 |
) |
|
|
(544,102 |
) |
|
||
|
Accumulated other comprehensive income, net of tax |
5 |
|
|
|
12 |
|
|
||
|
Retained earnings |
575,028 |
|
|
|
499,473 |
|
|
||
|
Total stockholders’ equity |
44,132 |
|
|
|
4,079 |
|
|
||
|
|
|
|
|
||||||
|
Total liabilities and stockholders’ equity |
$ |
1,584,276 |
|
|
|
$ |
1,394,996 |
|
|
|
Insperity, Inc. |
|||||||||||||||||||||||
|
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||||||||||
|
|
|||||||||||||||||||||||
|
|
Three Months Ended Dec. 31, |
|
Year Ended Dec. 31, |
||||||||||||||||||||
|
(in thousands, except per share amounts) |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Operating results: |
|
|
|
|
|
|
|
||||||||||||||||
|
Revenues(1) |
$ |
1,056,335 |
|
|
$ |
1,075,090 |
|
|
(1.7 |
) |
% |
|
$ |
4,287,004 |
|
|
$ |
4,314,804 |
|
|
(0.6 |
) |
% |
|
Direct costs: |
|
|
|
|
|
|
|
||||||||||||||||
|
Payroll taxes, benefits and workers’ compensation costs |
888,785 |
|
|
913,154 |
|
|
(2.7 |
) |
% |
|
3,480,150 |
|
|
3,581,870 |
|
|
(2.8 |
) |
% |
||||
|
Gross profit |
167,550 |
|
|
161,936 |
|
|
3.5 |
|
% |
|
806,854 |
|
|
732,934 |
|
|
10.1 |
|
% |
||||
|
Salaries, wages and payroll taxes |
86,633 |
|
|
79,784 |
|
|
8.6 |
|
% |
|
353,273 |
|
|
317,124 |
|
|
11.4 |
|
% |
||||
|
Stock-based compensation |
22,035 |
|
|
3,180 |
|
|
592.9 |
|
% |
|
60,145 |
|
|
23,993 |
|
|
150.7 |
|
% |
||||
|
Commissions |
9,178 |
|
|
8,693 |
|
|
5.6 |
|
% |
|
32,835 |
|
|
31,420 |
|
|
4.5 |
|
% |
||||
|
Advertising |
6,222 |
|
|
4,129 |
|
|
50.7 |
|
% |
|
21,556 |
|
|
21,603 |
|
|
(0.2 |
) |
% |
||||
|
General and administrative expenses |
27,913 |
|
|
30,637 |
|
|
(8.9 |
) |
% |
|
113,167 |
|
|
123,438 |
|
|
(8.3 |
) |
% |
||||
|
Depreciation and amortization |
7,860 |
|
|
7,794 |
|
|
0.8 |
|
% |
|
31,189 |
|
|
28,723 |
|
|
8.6 |
|
% |
||||
|
Total operating expenses |
159,841 |
|
|
134,217 |
|
|
19.1 |
|
% |
|
612,165 |
|
|
546,301 |
|
12.1 |
|
% |
|||||
|
Operating income |
7,709 |
|
|
27,719 |
|
|
(72.2 |
) |
% |
|
194,689 |
|
|
186,633 |
|
|
4.3 |
|
% |
||||
|
Other income (expense): |
|
|
|
|
|
|
|
||||||||||||||||
|
Interest income |
246 |
|
|
2,036 |
|
|
(87.9 |
) |
% |
|
2,597 |
|
|
10,657 |
|
|
(75.6 |
) |
% |
||||
|
Interest expense |
(1,704 |
) |
|
(2,205 |
) |
|
(22.7 |
) |
% |
|
(8,016 |
) |
|
(7,647 |
) |
|
4.8 |
|
% |
||||
|
Income before income tax expense |
6,251 |
|
|
27,550 |
|
|
(77.3 |
) |
% |
|
189,270 |
|
|
189,643 |
|
|
(0.2 |
) |
% |
||||
|
Income tax expense |
1,966 |
|
|
7,155 |
|
|
(72.5 |
) |
% |
|
51,033 |
|
|
38,544 |
|
|
32.4 |
|
% |
||||
|
Net income |
$ |
4,285 |
|
|
$ |
20,395 |
|
|
(79.0 |
) |
% |
|
$ |
138,237 |
|
|
$ |
151,099 |
|
|
(8.5 |
) |
% |
|
Less distributed and undistributed earnings allocated to participating securities |
(78 |
) |
|
(224 |
) |
|
(65.2 |
) |
% |
|
(782 |
) |
|
(1,759 |
) |
|
(55.5 |
) |
% |
||||
|
Net income allocated to common shares |
$ |
4,207 |
|
|
$ |
20,171 |
|
|
(79.1 |
) |
% |
|
$ |
137,455 |
|
|
$ |
149,340 |
|
|
(8.0 |
) |
% |
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Net income per share of common stock |
|
|
|
|
|
|
|
||||||||||||||||
|
Basic |
$ |
0.11 |
|
|
$ |
0.51 |
|
|
(78.4 |
) |
% |
|
$ |
3.57 |
|
|
$ |
3.72 |
|
|
(4.0 |
) |
% |
|
Diluted |
$ |
0.11 |
|
|
$ |
0.51 |
|
|
(78.4 |
) |
% |
|
$ |
3.54 |
|
|
$ |
3.70 |
|
|
(4.3 |
) |
% |
____________________________________
|
(1) |
Revenues are comprised of gross billings less WSEE payroll costs as follows: |
|||||||||||||
|
|
Three Months Ended Dec. 31, |
|
Year Ended Dec. 31, |
|||||||||||
|
(in thousands) |
2020 |
2019 |
|
2020 |
2019 |
|||||||||
|
|
|
|
|
|
|
|||||||||
|
Gross billings |
$ |
7,812,448 |
|
$ |
7,407,460 |
|
|
$ |
28,168,611 |
|
$ |
27,212,010 |
|
|
|
Less: WSEE payroll cost |
6,756,113 |
|
6,332,370 |
|
|
23,881,607 |
|
22,897,206 |
|
|||||
|
Revenues |
$ |
1,056,335 |
|
$ |
1,075,090 |
|
|
$ |
4,287,004 |
|
$ |
4,314,804 |
|
|
|
Insperity, Inc. |
|||||||||||||||||||
|
KEY FINANCIAL AND STATISTICAL DATA |
|||||||||||||||||||
|
|
|||||||||||||||||||
|
|
Three Months Ended Dec. 31, |
|
Year Ended Dec. 31, |
||||||||||||||||
|
|
2020 |
2019 |
Change |
|
2020 |
2019 |
Change |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
|
Average WSEEs paid |
239,232 |
|
243,715 |
|
(1.8 |
) |
% |
|
234,223 |
|
235,547 |
|
(0.6 |
) |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||||||
|
Statistical data (per WSEE per month): |
|
|
|
|
|
|
|
||||||||||||
|
Revenues(1) |
$ |
1,472 |
|
$ |
1,470 |
|
0.1 |
|
% |
|
$ |
1,525 |
|
$ |
1,527 |
|
(0.1 |
) |
% |
|
Gross profit |
233 |
|
221 |
|
5.4 |
|
% |
|
287 |
|
259 |
|
10.8 |
|
% |
||||
|
Operating expenses |
223 |
|
183 |
|
21.9 |
|
% |
|
218 |
|
193 |
|
13.0 |
|
% |
||||
|
Operating income |
11 |
|
38 |
|
(71.1 |
) |
% |
|
69 |
|
66 |
|
4.5 |
|
% |
||||
|
Net income |
6 |
|
28 |
|
(78.6 |
) |
% |
|
49 |
|
53 |
|
(7.5 |
) |
% |
||||
____________________________________
|
(1) |
Revenues per WSEE per month are comprised of gross billings per WSEE per month less WSEE payroll costs per WSEE per month follows: |
||||||||||||||
|
|
Three Months Ended Dec. 31, |
|
Year Ended Dec. 31, |
||||||||||||
|
(per WSEE per month) |
2020 |
2019 |
|
2020 |
2019 |
||||||||||
|
|
|
|
|
|
|
||||||||||
|
Gross billings |
$ |
10,885 |
|
$ |
10,131 |
|
|
$ |
10,022 |
|
$ |
9,627 |
|
||
|
Less: WSEE payroll cost |
9,413 |
|
8,661 |
|
|
8,497 |
|
8,100 |
|
||||||
|
Revenues |
$ |
1,472 |
|
$ |
1,470 |
|
|
$ |
1,525 |
|
$ |
1,527 |
|
||
Insperity, Inc.
Non-GAAP Financial Measures
(Unaudited)
Non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures 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 to their most directly comparable GAAP financial measures as provided in the tables below.
|
Non-GAAP Measure |
Definition |
Benefit of Non-GAAP Measure |
|
Non-bonus payroll cost |
Non-bonus payroll cost is a non-GAAP financial measure that excludes the impact of bonus payrolls paid to our WSEEs.
Bonus payroll cost varies from period to period, but has no direct impact to our ultimate workers’ compensation costs under the current program. |
Our management refers to non-bonus payroll cost in analyzing, reporting and forecasting our workers’ compensation costs.
We include these non-GAAP financial measures because we believe they are useful to investors in allowing for greater transparency related to the costs incurred under our current workers’ compensation program. |
|
Adjusted cash, cash equivalents and marketable securities |
Excludes funds associated with: • federal and state income tax withholdings, • employment taxes, • other payroll deductions, and • client prepayments. |
We believe that the exclusion of the identified items helps us reflect the fundamentals of our underlying business model and analyze results against our expectations, against prior periods, and to plan for future periods by focusing on our underlying operations. We believe that the adjusted results provide relevant and useful information for investors because they allow investors to view performance in a manner similar to the method used by management and improves their ability to understand and assess our operating performance. Adjusted EBITDA is used by our lenders to assess our leverage and ability to make interest payments. |
|
|
|
|
|
EBITDA |
Represents net income computed in accordance with GAAP, plus: • interest expense, • income tax expense, and • depreciation and amortization expense. |
|
|
|
|
|
|
Adjusted EBITDA |
Represents EBITDA plus: • non-cash stock based compensation, • costs associated with a one-time tax reform bonus paid to corporate employees, and • charitable donations to Hurricane Harvey relief efforts. |
|
|
|
|
|
|
Adjusted net income |
Represents net income computed in accordance with GAAP, excluding: • non-cash stock based compensation, • costs associated with a one-time tax reform bonus paid to corporate employees, and • charitable donations to Hurricane Harvey relief efforts. |
|
|
|
|
|
|
Adjusted EPS |
Represents diluted net income per share computed in accordance with GAAP, excluding: • non-cash stock based compensation, • costs associated with a one-time tax reform bonus paid to corporate employees, and • charitable donations to Hurricane Harvey relief efforts. |
Following is a reconciliation of payroll cost (GAAP) to non-bonus payroll costs (non-GAAP):
|
|
Three Months Ended Dec. 31, |
|
Year Ended Dec. 31, |
||||||||||||||||||||||||
|
(in thousands, except per WSEE per month) |
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||||||||||||
|
$ |
WSEE |
|
$ |
WSEE |
|
$ |
WSEE |
|
$ |
WSEE |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Payroll cost |
$ |
6,756,113 |
|
$ |
9,414 |
|
|
$ |
6,332,370 |
|
$ |
8,661 |
|
|
$ |
23,881,607 |
|
$ |
8,497 |
|
|
$ |
22,897,206 |
|
$ |
8,100 |
|
|
Less: Bonus payroll cost |
1,302,335 |
|
1,815 |
|
|
1,029,342 |
|
1,408 |
|
|
3,238,284 |
|
1,152 |
|
|
2,880,680 |
|
1,019 |
|
||||||||
|
Non-bonus payroll cost |
$ |
5,453,778 |
|
$ |
7,599 |
|
|
$ |
5,303,028 |
|
$ |
7,253 |
|
|
$ |
20,643,323 |
|
$ |
7,345 |
|
|
$ |
20,016,526 |
|
$ |
7,081 |
|
|
% Change period over period |
2.8 |
% |
4.8 |
% |
|
12.4 |
% |
2.3 |
% |
|
3.1 |
% |
3.7 |
% |
|
14.4 |
% |
1.5 |
% |
||||||||
Following is a reconciliation of cash, cash equivalents and marketable securities (GAAP) to adjusted cash, cash equivalents and marketable securities (non-GAAP):
|
(in thousands) |
December 31, |
|
December 31, |
||||
|
|
|
||||||
|
Cash, cash equivalents and marketable securities |
$ |
589,375 |
|
|
$ |
402,070 |
|
|
Less: |
|
|
|
||||
|
Amounts payable for withheld federal and state income taxes, employment taxes and other payroll deductions |
341,988 |
|
|
234,553 |
|
||
|
Client prepayments |
35,328 |
|
|
59,612 |
|
||
|
Adjusted cash, cash equivalents and marketable securities |
$ |
212,059 |
|
|
$ |
107,905 |
|
Following is a reconciliation of net income (GAAP) to EBITDA (non-GAAP) and adjusted EBITDA (non-GAAP):
|
|
Three Months Ended Dec. 31, |
||||||||||||||||
|
(in thousands, except per WSEE per month) |
2020 |
|
2019 |
||||||||||||||
|
$ |
WSEE |
|
$ |
WSEE |
|||||||||||||
|
|
|
|
|
|
|
||||||||||||
|
Net income |
$ |
4,285 |
|
|
$ |
6 |
|
|
|
$ |
20,395 |
|
|
$ |
28 |
|
|
|
Income tax expense |
1,966 |
|
|
3 |
|
|
|
7,155 |
|
|
9 |
|
|
||||
|
Interest expense |
1,704 |
|
|
2 |
|
|
|
2,205 |
|
|
3 |
|
|
||||
|
Depreciation and amortization |
7,860 |
|
|
11 |
|
|
|
7,794 |
|
|
11 |
|
|
||||
|
EBITDA |
15,815 |
|
|
22 |
|
|
|
37,549 |
|
|
51 |
|
|
||||
|
Stock-based compensation |
22,035 |
|
|
31 |
|
|
|
3,180 |
|
|
5 |
|
|
||||
|
Adjusted EBITDA |
$ |
37,850 |
|
|
$ |
53 |
|
|
|
$ |
40,729 |
|
|
$ |
56 |
|
|
|
% Change period over period |
(7.1 |
) |
% |
(5.4 |
) |
% |
|
(14.4 |
) |
% |
(22.2 |
) |
% |
||||
|
(in thousands, except per WSEE per month) |
Year Ended December 31, |
|||||||||||||||||||||||||||||||||||
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
2016 |
||||||||||||||||||||||||||||
|
$ |
WSEE |
|
$ |
WSEE |
|
$ |
WSEE |
|
$ |
WSEE |
|
$ |
WSEE |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Net income |
$ |
138,237 |
|
$ |
49 |
|
|
$ |
151,099 |
|
$ |
53 |
|
|
|
$ |
135,413 |
|
$ |
54 |
|
|
$ |
84,402 |
|
|
$ |
38 |
|
|
$ |
65,991 |
|
$ |
33 |
|
|
Income tax expense |
51,033 |
|
19 |
|
|
38,544 |
|
14 |
|
|
|
46,947 |
|
19 |
|
|
45,739 |
|
|
21 |
|
|
39,186 |
|
19 |
|
||||||||||
|
Interest expense |
8,016 |
|
3 |
|
|
7,647 |
|
3 |
|
|
|
4,668 |
|
2 |
|
|
3,213 |
|
|
1 |
|
|
2,396 |
|
1 |
|
||||||||||
|
Depreciation and amortization |
31,189 |
|
11 |
|
|
28,723 |
|
10 |
|
|
|
22,842 |
|
9 |
|
|
18,182 |
|
|
9 |
|
|
16,644 |
|
9 |
|
||||||||||
|
EBITDA |
228,475 |
|
82 |
|
|
226,013 |
|
80 |
|
|
|
209,870 |
|
84 |
|
|
151,536 |
|
|
69 |
|
|
124,217 |
|
62 |
|
||||||||||
|
Stock-based compensation |
60,145 |
|
21 |
|
|
23,993 |
|
8 |
|
|
|
20,425 |
|
8 |
|
|
24,345 |
|
|
11 |
|
|
16,643 |
|
8 |
|
||||||||||
|
One-time tax reform bonus |
— |
|
— |
|
|
— |
|
— |
|
|
|
9,306 |
|
3 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
||||||||||
|
Charitable donations to Hurricane Harvey relief efforts |
— |
|
— |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
2,000 |
|
|
1 |
|
|
— |
|
— |
|
||||||||||
|
Other |
— |
|
— |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
(200 |
) |
|
— |
|
|
— |
|
— |
|
||||||||||
|
Stockholder advisory expenses |
— |
|
— |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
323 |
|
1 |
|
||||||||||
|
Adjusted EBITDA |
$ |
288,620 |
|
$ |
103 |
|
|
$ |
250,006 |
|
$ |
88 |
|
|
|
$ |
239,601 |
|
$ |
95 |
|
|
$ |
177,681 |
|
|
$ |
81 |
|
|
$ |
141,183 |
|
$ |
71 |
|
|
% Change year over year |
15.4 |
% |
17.0 |
% |
|
4.3 |
% |
(7.4 |
) |
% |
|
34.8 |
% |
17.3 |
% |
|
25.9 |
|
% |
14.1 |
% |
|
28.3 |
% |
12.7 |
% |
||||||||||
Contacts
Investor Relations Contact:
Douglas S. Sharp
Senior Vice President of Finance,
Chief Financial Officer and Treasurer
281-348-3232
Investor.Relations@Insperity.com
News Media Contact:
Larry Shaffer
SVP of Marketing and Business Development
281-312-3020
Media@Insperity.com