[August 01, 2014] |
|
Insperity Announces Second Quarter 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 second quarter and six months
ended June 30, 2014. For the second quarter, the company reported
adjusted net income of $3.5 million and adjusted diluted earnings per
share of $0.13. Adjusted net income excludes an after-tax non-cash
impairment charge of $1.6 million, or $0.06 per share, associated with
the reorganization of our Employment Screening business. Reported second
quarter net income and earnings per share were $1.9 million and $0.07,
respectively.
"We are pleased with our second quarter results and the traction we are
gaining in sales of several of our new service offerings," said Paul
J. Sarvadi, Insperity chairman and chief executive officer. "We are
well positioned for accelerating unit growth over the balance of the
year and into 2015."
Second Quarter Results
Revenues for the second quarter of 2014 increased 3.2% over the second
quarter of 2013 to $564.6 million, due to a 1.2% increase in the average
number of worksite employees paid per month and a 1.9% increase in
revenues per worksite employee per month. Gross profit decreased 2.3% as
expected compared to the second quarter of 2013 to $95.5 million.
Benefits costs per covered employee per month increased by 5.0% over the
second quarter of 2013 and included increased taxes associated with the
Affordable Care Act.
Adjusted operating expenses excluding the impact of the $2.5 million
impairment charge increased 2.3% over the second quarter of 2013 to
$89.6 million.
Year-to-Date Results
For the six months ended June 30, 2014, the company reported adjusted
net income of $13.0 million and adjusted diluted earnings per share of
$0.51. These earnings exclude after-tax costs of $1.6 million or $0.06
per share associated with the non-cash impairment charge. Reported net
income for the six months ended June 30, 2014 was $11.5 million, or
$0.45 per diluted share.
Year-to-date revenues were $1.2 billion, an increase of 3.7% compared to
the 2013 period. Gross profit for the six months ended June 30, 2014
decreased 2.1% to $201.6 million. The average gross profit per worksite
employee per month decreased $10, or 3.6%, to $264 in the 2014 period
from $274 in the 2013 period.
Adjusted year-to-date operating expenses excluding the impact of the
impairment charge, increased 3.2% over the first six months of 2013 to
$179.1 million, approximately $6 million below initial 2014 guidance
provided by the company. These expenses include investments made over
the course of 2013, including a 15.6% year-over-year increase in the
average number of trained Business Performance Advisors, and a $2.0
million investment in human capital management technology.
"We continue to invest in areas important to our long-term strategy,
including sales, technology and product development, while managing
other areas of the business to better align operating costs with
projected unit growth," said Douglas
S. Sharp, senior vice-president of finance, chief financial officer
and treasurer.
Adjusted EBITDA was $38.9 million in the first six months of 2014. Cash
outlays included the repurchase of 496,226 shares at a cost of $14.7
million, dividends of $9.2 million and capital expenditures of $6.6
million. Working capital at June 30, 2014 was $121.6 million.
Insperity will be hosting a conference call today at 10 a.m. ET to
discuss these results, give guidance for the third quarter and full year
2014 and answer questions from investment analysts. To listen in, call
877-651-0053 and use conference i.d. number 65075498. The call will also
be webcast at http://ir.insperity.com.
The conference call script and company guidance 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. 65075498. The webcast will be
archived for one year.
Insperity, a trusted advisor to America's best businesses for more than
28 years, provides an array of human resources and business solutions
designed to help improve business performance. Insperity® Business
Performance Advisors offer 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 Human Capital Management,
Payroll Services, Time and Attendance, Performance Management,
Organizational Planning, Recruiting Services, Employment Screening,
Financial Services, Expense Management, Retirement Services and
Insurances Services. Insperity business performance solutions support
more than 100,000 businesses with over 2 million employees. With 2013
revenues of $2.3 billion, Insperity operates in 57 offices throughout
the United States. For more information, visit http://www.insperity.com.
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, Insperity, Inc.,
in an effort to help keep our stockholders and the public informed about
our operations, may from time to time issue such forward-looking
statements, either orally or in writing. Generally, these
statements relate to business plans or strategies, projected or
anticipated revenues, earnings, unit growth, profit per worksite
employee, pricing, operating expenses or other aspects of operating
results. We base the forward-looking statements on our
expectations, estimates and projections at the time such statements are
made. These statements are not guarantees of future performance
and involve risks and uncertainties 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 in accurate. 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: (i) adverse
economic conditions; (ii) regulatory and tax developments and possible
adverse application of various federal, state and local regulations;
(iii) the ability to secure competitive replacement contracts for health
insurance and workers' compensation contracts at expiration of current
contracts; (iv) 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 and federal unemployment tax rates,
liabilities for employee and client actions or payroll-related claims;
(v) failure to manage growth of our operations and the effectiveness of
our sales and marketing efforts; (vi) changes in the competitive
environment in the PEO industry, including the entrance of new
competitors and our ability to renew or replace client companies; (vii)
our liability for worksite employee payroll, payroll taxes and benefits
costs; (viii) our liability for disclosure of sensitive or private
information; (ix) our ability to integrate or realize expected returns
on our acquisitions; (x) failure of our information technology systems;
and (xi) an adverse final judgment or settlement of claims against
Insperity. 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.
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.
|
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Insperity, Inc.
|
Summary Financial Information
|
(in thousands, except per share amounts and statistical data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
December 31,
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
168,889
|
|
|
|
|
$
|
225,755
|
|
Restricted cash
|
|
|
|
|
53,441
|
|
|
|
|
51,928
|
|
Marketable securities
|
|
|
|
|
43,431
|
|
|
|
|
46,340
|
|
Accounts receivable, net
|
|
|
|
|
222,895
|
|
|
|
|
210,009
|
|
Prepaid insurance
|
|
|
|
|
24,813
|
|
|
|
|
10,638
|
|
Other current assets
|
|
|
|
|
13,076
|
|
|
|
|
12,053
|
|
Income taxes receivable
|
|
|
|
|
7,730
|
|
|
|
|
409
|
|
Deferred income taxes
|
|
|
|
|
-
|
|
|
|
|
8,185
|
|
Total current assets
|
|
|
|
|
534,275
|
|
|
|
|
565,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
|
83,252
|
|
|
|
|
86,415
|
|
Prepaid health insurance
|
|
|
|
|
9,000
|
|
|
|
|
9,000
|
|
Deposits
|
|
|
|
|
93,732
|
|
|
|
|
85,578
|
|
Goodwill and other intangible assets, net
|
|
|
|
|
15,152
|
|
|
|
|
18,434
|
|
Other assets
|
|
|
|
|
1,845
|
|
|
|
|
1,816
|
|
Total assets
|
|
|
|
|
$
|
737,256
|
|
|
|
|
$
|
766,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
|
$
|
1,821
|
|
|
|
|
$
|
2,678
|
|
Payroll taxes and other payroll deductions payable
|
|
|
|
|
109,164
|
|
|
|
|
165,604
|
|
Accrued worksite employee payroll cost
|
|
|
|
|
188,640
|
|
|
|
|
173,801
|
|
Accrued health insurance costs
|
|
|
|
|
21,324
|
|
|
|
|
5,103
|
|
Accrued workers' compensation costs
|
|
|
|
|
54,744
|
|
|
|
|
52,930
|
|
Accrued corporate payroll and commissions
|
|
|
|
|
17,477
|
|
|
|
|
21,611
|
|
Other accrued liabilities
|
|
|
|
|
19,460
|
|
|
|
|
14,960
|
|
Total current liabilities
|
|
|
|
|
412,630
|
|
|
|
|
436,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued workers' compensation costs
|
|
|
|
|
72,963
|
|
|
|
|
68,905
|
|
Deferred income taxes
|
|
|
|
|
4,293
|
|
|
|
|
7,696
|
|
Total noncurrent liabilities
|
|
|
|
|
77,256
|
|
|
|
|
76,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
308
|
|
|
|
|
308
|
|
Additional paid-in capital
|
|
|
|
|
136,505
|
|
|
|
|
135,653
|
|
Treasury stock, at cost
|
|
|
|
|
(147,706
|
)
|
|
|
|
(138,688
|
)
|
Accumulated other comprehensive income, net of tax
|
|
|
|
|
41
|
|
|
|
|
29
|
|
Retained earnings
|
|
|
|
|
258,222
|
|
|
|
|
255,970
|
|
Total stockholders' equity
|
|
|
|
|
247,370
|
|
|
|
|
253,272
|
|
Total liabilities and stockholders' equity
|
|
|
|
|
$
|
737,256
|
|
|
|
|
$
|
766,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Insperity, Inc.
|
Summary Financial Information
|
(in thousands, except per share amounts and statistical data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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Three Months Ended June 30,
|
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|
Six Months Ended June 30,
|
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|
2014
|
|
|
|
2013
|
|
|
|
Change
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
Change
|
Operating results:
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Revenues (gross billings of
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
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|
$3.281 billion, $3.167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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billion, $6.869 billion and
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$6.499 billion less
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
worksite employee payroll
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
cost of $2.716 billion,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$2.620 billion, $5.667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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billion and $5.340 billion,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
respectively)
|
|
|
|
|
$
|
564,621
|
|
|
|
|
$
|
547,274
|
|
|
|
|
3.2
|
%
|
|
|
|
$
|
1,201,620
|
|
|
|
|
$
|
1,159,110
|
|
|
|
|
3.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payroll taxes, benefits and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
workers' compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
costs
|
|
|
|
|
469,168
|
|
|
|
|
449,528
|
|
|
|
|
4.4
|
%
|
|
|
|
999,991
|
|
|
|
|
953,246
|
|
|
|
|
4.9
|
%
|
Gross profit
|
|
|
|
|
95,453
|
|
|
|
|
97,746
|
|
|
|
|
(2.3
|
)%
|
|
|
|
201,629
|
|
|
|
|
205,864
|
|
|
|
|
(2.1
|
)%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and payroll
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
taxes
|
|
|
|
|
47,829
|
|
|
|
|
45,689
|
|
|
|
|
4.7
|
%
|
|
|
|
98,861
|
|
|
|
|
93,900
|
|
|
|
|
5.3
|
%
|
Stock-based compensation
|
|
|
|
|
3,245
|
|
|
|
|
3,292
|
|
|
|
|
(1.4
|
)%
|
|
|
|
5,645
|
|
|
|
|
5,602
|
|
|
|
|
0.8
|
%
|
Commissions
|
|
|
|
|
3,717
|
|
|
|
|
3,533
|
|
|
|
|
5.2
|
%
|
|
|
|
6,963
|
|
|
|
|
6,740
|
|
|
|
|
3.3
|
%
|
Advertising
|
|
|
|
|
8,356
|
|
|
|
|
9,720
|
|
|
|
|
(14.0
|
)%
|
|
|
|
13,297
|
|
|
|
|
14,970
|
|
|
|
|
(11.2
|
)%
|
General and administrative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expenses
|
|
|
|
|
21,116
|
|
|
|
|
20,039
|
|
|
|
|
5.4
|
%
|
|
|
|
43,848
|
|
|
|
|
42,025
|
|
|
|
|
4.3
|
%
|
Impairment charge
|
|
|
|
|
2,485
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
2,485
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Depreciation and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization
|
|
|
|
|
5,291
|
|
|
|
|
5,245
|
|
|
|
|
0.9
|
%
|
|
|
|
10,525
|
|
|
|
|
10,390
|
|
|
|
|
1.3
|
%
|
Total operating expenses
|
|
|
|
|
92,039
|
|
|
|
|
87,518
|
|
|
|
|
5.2
|
%
|
|
|
|
181,624
|
|
|
|
|
173,627
|
|
|
|
|
4.6
|
%
|
Operating income
|
|
|
|
|
3,414
|
|
|
|
|
10,228
|
|
|
|
|
(66.6
|
)%
|
|
|
|
20,005
|
|
|
|
|
32,237
|
|
|
|
|
(37.9
|
)%
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest, net
|
|
|
|
|
24
|
|
|
|
|
60
|
|
|
|
|
(60.0
|
)%
|
|
|
|
71
|
|
|
|
|
129
|
|
|
|
|
(45.0
|
)%
|
Other, net
|
|
|
|
|
12
|
|
|
|
|
(2,676
|
)
|
|
|
|
(100.4
|
)%
|
|
|
|
(14
|
)
|
|
|
|
(2,667
|
)
|
|
|
|
(99.5
|
)%
|
Income before income tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense
|
|
|
|
|
3,450
|
|
|
|
|
7,612
|
|
|
|
|
(54.7
|
)%
|
|
|
|
20,062
|
|
|
|
|
29,699
|
|
|
|
|
(32.4
|
)%
|
Income tax expense
|
|
|
|
|
1,559
|
|
|
|
|
4,124
|
|
|
|
|
(62.2
|
)%
|
|
|
|
8,607
|
|
|
|
|
13,038
|
|
|
|
|
(34.0
|
)%
|
Net income
|
|
|
|
|
$
|
1,891
|
|
|
|
|
$
|
3,488
|
|
|
|
|
(45.8
|
)%
|
|
|
|
$
|
11,455
|
|
|
|
|
$
|
16,661
|
|
|
|
|
(31.2
|
)%
|
Less distributed and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
undistributed earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
allocated to participating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
securities
|
|
|
|
|
(139
|
)
|
|
|
|
(124
|
)
|
|
|
|
12.1
|
%
|
|
|
|
(333
|
)
|
|
|
|
(481
|
)
|
|
|
|
(31.3
|
)%
|
Net income allocated to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common shares
|
|
|
|
|
$
|
1,752
|
|
|
|
|
$
|
3,364
|
|
|
|
|
(47.9
|
)%
|
|
|
|
$
|
11,122
|
|
|
|
|
$
|
16,180
|
|
|
|
|
(31.3
|
)%
|
Basic net income per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of common stock
|
|
|
|
|
$
|
0.07
|
|
|
|
|
$
|
0.14
|
|
|
|
|
(50.0
|
)%
|
|
|
|
$
|
0.45
|
|
|
|
|
$
|
0.65
|
|
|
|
|
(30.8
|
)%
|
Diluted net income per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of common stock
|
|
|
|
|
$
|
0.07
|
|
|
|
|
$
|
0.14
|
|
|
|
|
(50.0
|
)%
|
|
|
|
$
|
0.45
|
|
|
|
|
$
|
0.65
|
|
|
|
|
(30.8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insperity, Inc.
|
Summary Financial Information
|
(in thousands, except per share amounts and statistical data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
Change
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
Change
|
Statistical data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of worksite employees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
paid per month
|
|
|
|
|
128,274
|
|
|
|
126,696
|
|
|
|
1.2
|
%
|
|
|
|
127,281
|
|
|
|
125,044
|
|
|
|
1.8
|
%
|
Revenues per worksite employee per
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
month(1)
|
|
|
|
|
$
|
1,467
|
|
|
|
$
|
1,440
|
|
|
|
1.9
|
%
|
|
|
|
$
|
1,573
|
|
|
|
$
|
1,545
|
|
|
|
1.8
|
%
|
Gross profit per worksite employee per
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
month
|
|
|
|
|
248
|
|
|
|
257
|
|
|
|
(3.5
|
)%
|
|
|
|
264
|
|
|
|
274
|
|
|
|
(3.6
|
)%
|
Operating expenses per worksite employee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per month
|
|
|
|
|
239
|
|
|
|
230
|
|
|
|
3.9
|
%
|
|
|
|
238
|
|
|
|
231
|
|
|
|
3.0
|
%
|
Operating income per worksite employee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per month
|
|
|
|
|
9
|
|
|
|
27
|
|
|
|
(66.7
|
)%
|
|
|
|
26
|
|
|
|
43
|
|
|
|
(39.5
|
)%
|
Net income per worksite employee per
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
month
|
|
|
|
|
5
|
|
|
|
9
|
|
|
|
(44.4
|
)%
|
|
|
|
15
|
|
|
|
22
|
|
|
|
(31.8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Gross billings of $8,526, $8,332, $8,994 and $8,663
per worksite employee per month, less payroll cost of $7,059,
$6,892,
|
$7,421 and $7,118 per worksite employee per month, respectively.
|
|
|
|
|
|
|
|
|
|
Insperity, Inc.
|
Summary Financial Information (continued)
|
(in thousands, except per share amounts and statistical data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Change
|
|
|
2014
|
|
|
2013
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payroll cost (GAAP)
|
|
|
|
$
|
2,716,514
|
|
|
$
|
2,619,690
|
|
|
3.7
|
%
|
|
|
$
|
5,667,082
|
|
|
$
|
5,340,202
|
|
|
6.1
|
%
|
Less: Bonus payroll cost
|
|
|
|
222,005
|
|
|
171,362
|
|
|
29.6
|
%
|
|
|
743,346
|
|
|
513,927
|
|
|
44.6
|
%
|
Non-bonus payroll cost
|
|
|
|
$
|
2,494,509
|
|
|
$
|
2,448,328
|
|
|
1.9
|
%
|
|
|
$
|
4,923,736
|
|
|
$
|
4,826,275
|
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payroll cost per worksite
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
employee per month
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(GAAP)
|
|
|
|
$
|
7,059
|
|
|
$
|
6,892
|
|
|
2.4
|
%
|
|
|
$
|
7,421
|
|
|
$
|
7,118
|
|
|
4.3
|
%
|
Less: Bonus payroll cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per worksite employee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per month
|
|
|
|
577
|
|
|
451
|
|
|
27.9
|
%
|
|
|
973
|
|
|
685
|
|
|
42.0
|
%
|
Non-bonus payroll cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per worksite employee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per month
|
|
|
|
$
|
6,482
|
|
|
$
|
6,441
|
|
|
0.6
|
%
|
|
|
$
|
6,448
|
|
|
$
|
6,433
|
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Change
|
|
|
2014
|
|
|
2013
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (GAAP)
|
|
|
|
$
|
92,039
|
|
|
$
|
87,518
|
|
|
5.2
|
%
|
|
|
$
|
181,624
|
|
|
$
|
173,627
|
|
|
4.6
|
%
|
Impairment charge
|
|
|
|
2,485
|
|
|
-
|
|
|
-
|
|
|
|
2,485
|
|
|
-
|
|
|
-
|
|
Adjusted operating expenses
|
|
|
|
$
|
89,554
|
|
|
$
|
87,518
|
|
|
2.3
|
%
|
|
|
$
|
179,139
|
|
|
$
|
173,627
|
|
|
3.2
|
%
|
|
Adjusted operating expenses represent operating expenses excluding
the impact of impairment charges.
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Change
|
|
|
2014
|
|
|
2013
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (GAAP)
|
|
|
|
$
|
1,891
|
|
|
$
|
3,488
|
|
|
(45.8
|
)%
|
|
|
$
|
11,455
|
|
|
$
|
16,661
|
|
|
(31.2
|
)%
|
Income tax expense
|
|
|
|
1,559
|
|
|
4,124
|
|
|
(62.2
|
)%
|
|
|
8,607
|
|
|
13,038
|
|
|
(34.0
|
)%
|
Depreciation and amortization
|
|
|
|
5,291
|
|
|
5,245
|
|
|
0.9
|
%
|
|
|
10,525
|
|
|
10,390
|
|
|
1.3
|
%
|
Interest expense
|
|
|
|
88
|
|
|
88
|
|
|
-
|
|
|
|
177
|
|
|
176
|
|
|
0.6
|
%
|
EBITDA
|
|
|
|
8,829
|
|
|
12,945
|
|
|
(31.8
|
)%
|
|
|
30,764
|
|
|
40,265
|
|
|
(23.6
|
)%
|
Impairment charges
|
|
|
|
2,485
|
|
|
2,679
|
|
|
(7.2
|
)%
|
|
|
2,485
|
|
|
2,679
|
|
|
(7.2
|
)%
|
Stock-based compensation
|
|
|
|
3,245
|
|
|
3,292
|
|
|
(1.4
|
)%
|
|
|
5,645
|
|
|
5,602
|
|
|
0.8
|
%
|
Adjusted EBITDA
|
|
|
|
$
|
14,559
|
|
|
$
|
18,916
|
|
|
(23.0
|
)%
|
|
|
$
|
38,894
|
|
|
$
|
48,546
|
|
|
(19.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA represents net income computed in accordance with
generally accepted accounting
|
principles ("GAAP"), plus interest expense, income tax expense,
depreciation and amortization expense, and
|
stock-based compensation. Insperity management believes adjusted
EBITDA is often a useful measure of the
|
company's operating performance, as it allows 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 June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
Change
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (GAAP)
|
|
|
|
|
$
|
1,891
|
|
|
|
$
|
3,488
|
|
|
|
(45.8
|
)%
|
|
|
|
$
|
11,455
|
|
|
|
$
|
16,661
|
|
|
|
(31.2
|
)%
|
Impairment charges, net of tax
|
|
|
|
|
1,566
|
|
|
|
2,679
|
|
|
|
(41.5
|
)%
|
|
|
|
1,566
|
|
|
|
2,679
|
|
|
|
(41.5
|
)%
|
Adjusted net income
|
|
|
|
|
$
|
3,457
|
|
|
|
$
|
6,167
|
|
|
|
(43.9
|
)%
|
|
|
|
$
|
13,021
|
|
|
|
$
|
19,340
|
|
|
|
(32.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
Change
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share of common
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
stock (GAAP)
|
|
|
|
|
$
|
0.07
|
|
|
|
$
|
0.14
|
|
|
|
(50.0
|
)%
|
|
|
|
$
|
0.45
|
|
|
|
$
|
0.65
|
|
|
|
(30.8
|
)%
|
Impairment charges, net of tax
|
|
|
|
|
0.06
|
|
|
|
0.10
|
|
|
|
(40.0
|
)%
|
|
|
|
0.06
|
|
|
|
0.10
|
|
|
|
(40.0
|
)%
|
Adjusted diluted net income per share of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common stock
|
|
|
|
|
$
|
0.13
|
|
|
|
$
|
0.24
|
|
|
|
(45.8
|
)%
|
|
|
|
$
|
0.51
|
|
|
|
$
|
0.75
|
|
|
|
(32.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 the impairment
|
charge related to Employment Screening reporting unit in 2014 and
the impairment charge related to The
|
Receivables Exchange in 2013. Insperity management believes adjusted
net income and adjusted diluted net
|
income per share are useful measures of the company's operating
performance in this period, as they allow for
|
additional analysis of the company's operating results separate from
the impact of the impairment.
|
|
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. Insperity
includes non-bonus payroll, adjusted
|
operating expenses, EBITDA, adjusted EBITDA, adjusted net income and
adjusted diluted net income per
|
share of common stock in this press release because the company
believes they are useful to investors in
|
allowing for greater transparency related to the costs incurred
under the company's workers' compensation
|
program and the company's operating performance during the periods
presented. 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.
|
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