cbz-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from________ to ________

Commission File Number 1-32961

CBIZ, Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation

or organization)

6050 Oak Tree Boulevard, South, Suite 500, Cleveland, Ohio

(Address of principal executive offices)

22-2769024

(I.R.S. Employer

Identification No.)

44131

(Zip Code)

(216) 447-9000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value	CBZ	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


Class of Common Stock			Outstanding at April 23, 2021
Common Stock, par value $0.01 per share			53,176,480

CBIZ, INC. AND SUBSIDIARIES

TABLE OF CONTENTS


PART I.	FINANCIAL INFORMATION:		Page

	Item 1.	Condensed Con solidated Financial Statements (Unaudited)	3

		C ondensed C onsolidated Balance Sheets – March 31, 2021 and December 31, 2020	3

		C ondensed C onsolidated Statements of Comprehensive Income – Three Months Ended March 31, 2021 and 2020	4

		C on densed C onsolidated Statements of Stockholders’ Equity – Three Months Ended March 31, 2021 and 2020	5

		C ondensed C onsolidated Statements of Cash Flows – Three Months Ended March 31, 2021 and 2020	6

		Notes to the Condensed Consolidated Financial Statements	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	27

	Item 4.	Controls and Procedures	27

PART II.	OTHER INFORMATION:

	Item 1.	Legal Proceedings	29

	Item 1A.	Risk Factors	29

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

	Item 3.	Defaults Upon Senior Securities	30

	Item 4.	Mine Safety Disclosures	30

	Item 5.	Other Information	30

	Item 6.	Exhibits	31

	Signature		32

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

CBIZ, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands)


	March 31, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	6,778	$	4,652
Restricted cash	27,618		23,951
Accounts receivable, net	270,610		216,175
Other current assets	25,695		24,213
Current assets before funds held for clients	330,701		268,991
Funds held for clients	140,774		167,440
Total current assets	471,475		436,431
Non-current assets:
Property and equipment, net	39,910		41,346
Goodwill and other intangible assets, net	756,684		756,750
Assets of deferred compensation plan	133,478		127,332
Operating lease right-of-use assets, net	146,786		147,843
Other non-current assets	3,510		4,052
Total non-current assets	1,080,368		1,077,323
Total assets	$	1,551,843	$	1,513,754
LIABILITIES
Current liabilities:
Accounts payable	$	60,216	$	64,119
Income taxes payable	15,028		2,788
Accrued personnel costs	50,223		79,978
Contingent purchase price liabilities	22,767		20,288
Operating lease liabilities	30,638		30,483
Other current liabilities	14,312		13,629
Current liabilities before client fund obligations	193,184		211,285
Client fund obligations	140,490		166,989
Total current liabilities	333,674		378,274
Non-current liabilities:
Bank debt	162,000		108,000
Debt issuance costs	(718)		(808)
Total long-term debt	161,282		107,192
Income taxes payable	1,339		1,775
Deferred income taxes, net	12,371		8,752
Deferred compensation plan obligations	133,478		127,332
Contingent purchase price liabilities	31,463		34,103
Operating lease liabilities	140,150		142,020
Other non-current liabilities	10,303		11,686
Total non-current liabilities	490,386		432,860
Total liabilities	824,060		811,134
STOCKHOLDERS' EQUITY
Common stock	1,346		1,341
Additional paid in capital	749,207		740,970
Retained earnings	608,084		557,875
Treasury stock	(629,439)		(595,297)
Accumulated other comprehensive loss	(1,415)		(2,269)
Total stockholders’ equity	727,783		702,620
Total liabilities and stockholders’ equity	$	1,551,843	$	1,513,754

See the accompanying notes to the condensed consolidated financial statements

CBIZ, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(In thousands, except per share data)


	Three Months Ended March 31,
	2021		2020
Revenue	$	300,730	$	277,455
Operating expenses	223,971		199,827
Gross margin	76,759		77,628
Corporate general and administrative expenses	14,483		10,489
Operating income	62,276		67,139
Other income (expense):
Interest expense	(877)		(1,119)
Gain on sale of operations, net	—		95
Other income (expense), net	4,789		(15,800)
Total other income (expense), net	3,912		(16,824)
Income from continuing operations before income tax expense	66,188		50,315
Income tax expense	15,972		13,453
Income from continuing operations	50,216		36,862
Loss from discontinued operations, net of tax	(7)		(14)
Net income	$	50,209	$	36,848
Earnings per share:
Basic:
Continuing operations	$	0.94	$	0.68
Discontinued operations	—		—
Net income	$	0.94	$	0.68
Diluted:
Continuing operations	$	0.92	$	0.66
Discontinued operations	—		—
Net income	$	0.92	$	0.66
Basic weighted average shares outstanding	53,366		54,571
Diluted weighted average shares outstanding	54,436		55,945
Comprehensive income:
Net income	$	50,209	$	36,848
Other comprehensive income (loss), net of tax	854		(1,252)
Comprehensive income	$	51,063	$	35,596

See the accompanying notes to the condensed consolidated financial statements

CBIZ, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

(In thousands)


	Issued Common Shares	Treasury Shares	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Totals
December 31, 2020	134,144	80,045	$	1,341	$	740,970	$	557,875	$	(595,297)	$	(2,269)	$	702,620
Net income	—	—	—		—		50,209		—		—		50,209
Other comprehensive income	—	—	—		—

SEC Form 10-Q filed by CBIZ, Inc.