CBIZ Inc. (CBZ)
Q1 2010 Earnings Call
May 5, 2010; 11:00 am ET
Steven Gerard - Chairman & Chief Executive Officer
Jerry Grisko - President & Chief Operating Officer
Ware Grove - Chief Financial Officer
Josh Vogel - Sidoti & Co.
Garry Movitz - Unidentified Company
Robert Kirkpatrick - Cardinal Capital
Bill Sutherland - Boenning & Scattergood
Vincent Colicchio - Noble Financial Group
Ted Hillenmeyer - Northstar Partners
Previous Statements by CBZ
» CBIZ Inc., Q4 2008 Earnings Call Transcript
» CBIZ, Inc. Q3 2008 Earnings Call Transcript
» CBIZ, Inc. Q2 2008 Earnings Call Transcript
Welcome to the CBIZ first quarter results conference call. My name is Terice, and I will be your operator for today’s call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is being recorded.
I will now turn the call over to Mr. Steven Gerard. Mr. Gerard you may begin.
Thank you Terice, and good morning everyone. Thank you for calling in to CBIZ’s first quarter 2010 conference call. Before I begin my comments, I’d like to remind you of a few things.
As with all of our conference calls, this call is intended to answer the questions of our share holders and analysts. If there are media representatives on the call, you are welcome to listen in; however, I ask that if you have questions you hold them until after the call and we’ll be happy to discuss it at that time.
The call is also being webcast and you can access the call over our website at
. You should have all received a copy of the press release we issued this morning. If you did not, you can access it on our website or you can call our corporate office for a copy.
Finally, please remember that during the course of the call, we may make forward-looking statements. These statements represent management’s intentions, hopes, beliefs, expectations, and predictions of the future. Actual results can and sometimes do differ materially from those projected in the forward-looking statements.
Additional information concerning the factors that could cause actual results to differ materially from those in the forward-looking statements is contained in our SEC filings Form 10-K and press releases.
Joining me on the call this morning are Jerry Grisko, our President and Chief Operating Officer; and Ware Grove, our Chief Financial Officer.
As you all know, prior to the opening this morning we released our first quarter earnings. We released earnings per share of $0.27, which includes a $0.02 charge for the previously announced write-off of lease expense as a result of one of our acquisitions. So as you normalize the two, we reported $0.29 versus $0.30 a year ago on somewhat lower revenue.
On the positive note, with lower revenue our cash earnings per share were equal to last year, and on an equally positive note, our two largest groups, our financial services group and employee services group, both performed better on the bottom line, given the fact that their revenue was down.
I will have a number of comments to add to Ware’s presentation with respect to our MMP business, as well as a status of other items in the company, but at this point I’ll turn it over to Ware to go through the details.
Thank you Steve, and good morning everyone. As is our normal practice, I want to take a few minutes to review the highlights and add perspective to the numbers we released this morning for the first quarter 2010 results.
I should first remind everyone that 2009 numbers are now restated for the impact of the discontinued operations that occurred in the fourth quarter of 2009. You can find further detail on that in our 10-K filing footnote number 22, which is on S-43, and I believe we also filed some supplemental quarterly information with our 8-K in connection with the year-end earnings release, but I’m happy to provide in the follow up questions any further details that anyone needs.
There are a number of favorable trends impacting our business at this stage, but as we indicated earlier this year, we expected that 2010 would present a challenging environment for CBIZ, and we therefore expected a relatively modest growth in revenue and earnings for the full year.
While we are all aware of the reported improvements and economic growth in recent quarters, unemployment levels continue to be high, and through the first quarter of 2010 we have not yet seen a general rebound in activity within the small and mid size business client, that is typically served by CBIZ.
There are recent indications that investment spending and expansion activity within the CBIZ client base is beginning to improve, but our first quarter same unit revenue decline of 5.6% reflects continuing pressures within this market segment that we serve. This decline in revenue for the first quarter was not totally unexpected.
Bear in mind that the same unit revenue declines we experienced in the second half of 2009 were 7% and 9.1% in the third and fourth quarters of 2009. So sequentially we are seeing an improvement with these first quarter numbers.
The actions we took last year to carefully manage costs continue to have a favorable impact in 2010. Compared to a year ago, our total headcount in the first quarter has been reduced by approximately 4%, and absent the impact of acquisitions, headcount is down by 7.3% versus the first quarter a year ago.
The revenue from newly acquired operations contributed $6 million to revenue in the first quarter, and these newly acquired businesses are generally performing inline with our expectations.