Century Business Services, Inc., Reports 197% Increase In
Second-Quarter Net Income
CLEVELAND, July 28 /PRNewswire/ -- Century Business Services, Inc. (Nasdaq: CBIZ - news; ''Century''), the nation's
fastest emerging outsourced business services company, today announced that for the second quarter ended June 30, 1998,
net income increased 197% to $7.869 million, or $0.12 per diluted share, over net income from continuing operations of
$2.647 million, or $0.05 per diluted share for the comparable period in 1997, while basic earnings per share increased to
$0.15 per share from $0.07 per share in 1997. For the second quarter of 1998, there were 39% more weighted average
shares used in the diluted per-share calculation. EBITDA for the second quarter rose 247% to $14.076 million compared with
last year's second-quarter EBITDA of $4.062 million.
Revenue for the second quarter of 1998 increased 168% to $69.712 million from $25.979 million for the second quarter of
1997. The significant increase in revenues is due to numerous acquisitions made by the Company since the second quarter of
1997 as well as solid internal growth, assisted by seasonal strength in Century's Benefits Administration, Human Resources,
and Specialty Insurance units, which are busiest during the second and third quarters.
Business Services revenue increased 276% to $56.307 million for the quarter compared with $14.956 million for the second
quarter last year. Business Services revenue now comprises 81% of Century's total revenues. Revenues of Century's Specialty
Insurance group recorded a significant increase of 22% over last year's second quarter, reflecting strong internal growth.
''Our financial results continue to demonstrate the soundness of our business plan,'' stated Michael G. DeGroote, Century's
President and Chief Executive Officer. ''The tremendous gains we achieved in revenue and earnings reflect strong,
across-the-board growth. We expect to maintain rapid growth in revenue and net income as we move forward with our
acquisition strategy and continue to benefit from the strong demand for outsourced business services.''
Revenues for the six months ended June 30, 1998, increased 184% to $134.120 million from $47.165 million for the first half
of 1997. Net income for the first half of 1998 of $14.905 million, or $0.23 per diluted share, increased 188% over 1997's
first-half net income from continuing operations of $5.171 million, or $0.11 per diluted share. For the first half of 1998, there
were 35% more weighted average shares used in the diluted per-share calculation. EBITDA for the first six months was
$26.329 million, an increase of 238% over the 1997 first-half EBITDA of $7.797 million.
Century's balance sheet at June 30, 1998 confirmed the Company's solid financial position. With total assets of $455.453
million, cash of $49.181 million, shareholders' equity of $264.552 million, investments of $83.302 million, and interest-bearing
debt of $38.755 million, the Company is well positioned to continue its growth program.
In the second quarter of 1998, Century closed 17 acquisitions with combined annual revenues of approximately $65 million.
To date, Century has announced 8 acquisitions plus 11 tuck-in acquisitions, representing combined annual revenues of
approximately $55 million, which have not yet closed and are expected to close during the third quarter. Century's total closed
and announced annualized revenue run rate is more than $360 million.
Century Business Services, Inc. is a leading provider of outsourced business services to small and medium sized companies
throughout the United States. The Company provides integrated services in the following areas: accounting systems, advisory
and tax; benefits design and administration; human resources; information technology systems; payroll administration; specialty
insurance; valuation; and workers' compensation. These services are provided throughout a network of more than 110
Company offices in 29 states, as well as through its subsidiary, Century Small Business Solutions, a franchisor of accounting
services with 650 franchisee offices in 47 states. The Company services approximately 102,000 clients, of which
approximately 54,000 are serviced through the Century Small Business Solutions franchisee network. Management estimates
that its clients employ over one million employees including 400,000 employed by clients of the Century Small Business
Solutions network.
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual
results to differ materially from those projected. Such risks and uncertainties include, but are not limited to, the Company's
ability to integrate its newly acquired operations effectively with its existing businesses; the Company's ability to locate and
acquire other businesses in furtherance of its aggressive growth strategy; the Company's ability to adequately estimate its
liability reserves for its insurance businesses; the lack of market reverses in its investment portfolios; competitive pricing
pressures; general business and economic conditions; and changes in governmental regulation affecting its insurance business or
tax law changes affecting its business services operations, which are described in further detail in the Company's filings with the
Securities and Exchange Commission.
For further information regarding Century Business Services, Inc., call our Investor Relations Office at 216-447-9000.
CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1998 % 1997* % 1998 % 1997* %
of Rev of Rev of Rev of Rev
Revenues:
Business service
fees and
commissions $56,307 81% $14,956 58% $108,099 81% $25,979 55%
Specialty
insurance
services 13,405 19% 11,023 42% 26,021 19% 21,186 45%
Total revenues 69,712 -- 25,979 -- 134,120 -- 47,165 --
Expenses:
Operating expenses
- business
services 43,150 -- 12,577 -- 83,161 -- 21,505 --
Losses and loss
adjustment
expenses 5,152 -- 4,594 -- 10,774 -- 9,423 --
Policy acquisition
and other
expenses 5,554 -- 3,491 -- 10,537 -- 6,813 --
Corporate general
and administrative
expenses 1,780 -- 1,255 -- 3,319 -- 1,627 --
Depreciation and
amortization
expenses 1,815 -- 677 -- 3,484 -- 1,031 --
Total expenses 57,451 82.4% 22,594 87.0% 111,275 83.0% 40,399 85.7%
Income from continuing
operations before
net corporate interest
income and
income tax 12,261 -- 3,385 -- 22,845 -- 6,766 --
Net corporate
interest income 230 -- 269 -- 604 -- 573 --
Income from continuing
operations before
income tax
expenses 12,491 -- 3,654 -- 23,449 -- 7,339 --
Income tax
expenses 4,622 -- 1,007 -- 8,544 -- 2,168 --
Income from
continuing
operations 7,869 11.3% 2,647 10.2% 14,905 11.1% 5,171 11.0%
Loss from
discontinued
operations -- -- (179) -- -- -- (713) --
Net income $7,869 -- $2,468 -- $14,905 -- $4,458 --
Earnings per share:
Basic:
Income from
continuing
operations $0.15 $0.07 $0.30 $0.14
Loss from
discontinued
operations -- -- -- (0.02)
Net income $0.15 $0.07 $0.30 $0.12
Diluted:
Income from
continuing
operations $0.12 $0.05 $0.23 $0.11
Loss from
discontinued
operations -- -- -- (0.02)
Net income $0.12 $0.05 $0.23 $0.09
Weighted average
common shares 52,613 37,775 50,083 37,225
Weighted average
common shares
and dilutive
potential
common shares 68,290 49,000 65,582 48,470
* Operating results for the three and six month periods ended
June 30, 1997 have been restated to reflect five small business
combinations closed during the second quarter 1998 which were accounted
for under the pooling-of-interests method of accounting.
CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED INCOME STATEMENT SUMMARY INFORMATION
(in thousands, except per share data)
Three Months Ended June 30, 1998
% Increase % of % of
(Decrease) 1998 Total 1997* Total
Revenues:
Business services 276% $56,307 81% $14,956 58%
Specialty insurance services 22% 13,405 19% 11,023 42%
Total 168% $69,712 100% $25,979 100%
Margin Margin
Pretax Income:
Business services 397% $11,373 20.2% $2,288 15.3%
Specialty insurance services 13% 2,668 19.9% 2,352 21.3%
Corporate general and
administrative expenses,
net of interest income -- (1,550) -- (986) --
Total 242% $12,491 17.9% $3,654 14.1%
Income from continuing
operations 197% $7,869 11.3% $2,647 10.2%
Loss from discontinued
operations -- -- -- (179) --
Net income -- $7,869 -- $2,468 --
EBITDA 247% $14,076 20.2% $4,062 15.6%
Six Months Ended June 30, 1998
% Increase % of % of
(Decrease) 1998 Total 1997* Total
Revenues:
Business services 316% $108,099 81% $25,979 55%
Specialty insurance services 23% 26,021 19% 21,186 45%
Total 184% $134,120 100% $47,165 100%
Pretax Income: Margin
Business services 429% $21,513 19.9% $4,066 15.7%
Specialty insurance services 7% 4,651 17.9% 4,327 20.4%
Corporate general and
administrative expenses,
net of interest income -- (2,715) -- (1,054) --
Total 220% $23,449 17.5% $7,339 15.6%
Income from continuing
operations 188% $14,905 11.1% $5,171 11.0%
Loss from discontinued operations -- -- -- (713) --
Net income -- $14,905 -- $4,458 --
EBITDA 238% $26,329 19.6% $7,797 16.5%
* Operating results for the three and six month periods ended
June 30, 1997 have been restated to reflect five small business
combinations closed during the second quarter 1998 which were accounted
for under the pooling-of-interests method of accounting.
CENTURY BUSINESS SERVICES, INC. AND SUBSIDIARIES
SELECTED BALANCE SHEET ITEMS
(In thousands)
June 30, December 31,
1998 1997*
(unaudited) (unaudited)
Cash and cash equivalents $ 49,181 $ 23,371
Total Investments 83,302 79,720
Excess of cost over net assets of
businesses acquired 167,852 89,856
Total Assets 455,453 296,357
Notes payable, bank debt and capitalized leases 38,755 20,725
Total Liabilities 190,901 146,051
Total shareholders equity 264,552 150,306
Total liabilities and shareholders equity $ 455,453 $ 296,357
* The 1997 balance sheet was restated to reflect five small business
combinations closed during the second quarter 1998 which were accounted
for under the pooling-of-interests method of accounting.
SOURCE: Century Business Services, Inc.
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