Insperity, Inc. (NYSE: NSP), a leading provider of human
resources and business performance solutions for America’s best
businesses, today reported results for the first quarter ended
March 31, 2022. Insperity will be hosting a conference call today
at 8:30 a.m. ET to discuss these results and our updated 2022
outlook, and has posted an accompanying presentation to its
investor website at http://ir.insperity.com.
- Q1 average number of WSEEs paid and revenues up 19.5% and
22.6%, respectively
- Q1 net income and diluted EPS of $69.9 million and $1.80,
respectively
- Q1 adjusted EBITDA up 14% to $118.6 million
- Q1 adjusted EPS of $1.99
First Quarter Results
For the three months ended March 31, 2022, reported net income
and diluted earnings per share (“EPS”) were $69.9 million and
$1.80, respectively. Adjusted EPS increased 9% compared to the
first three months of 2021 to $1.99. Adjusted EBITDA increased 14%
compared to the first three months of 2021 to $118.6 million.
The average number of worksite employees (“WSEEs”) paid per
month increased 19.5% over Q1 2021 to 278,660 WSEEs. WSEEs paid
from new client sales increased 37% coming off the strong sale
bookings in Q4 2021. First quarter client attrition was near our
historical low totaling only 8.5% of paid WSEEs at the beginning of
the period, and an improvement over Q1 2021’s attrition of 12%.
Additionally, net gains from hiring by our clients continued to be
strong in spite of the current tight labor market. Revenues in Q1
2022 increased 22.6% to $1.6 billion on the 19.5% increase in paid
WSEEs and a 3% increase in revenue per WSEE.
“We are very pleased with our excellent first quarter results
and the outlook for a strong year in 2022,” said Paul J. Sarvadi,
Insperity chief executive officer and chairman. “This quarter was a
great start to our recently adopted Five Year Plan which has the
potential for extraordinary returns as we strive to capitalize on
the strong demand in the marketplace for our sophisticated HR
services and the uniqueness of our business model.”
Gross profit increased 14% over Q1 2021 to $285.8 million. This
higher-than-expected increase resulted from the outperformance in
paid WSEEs, combined with both favorable pricing and gross profit
contribution from our direct cost programs. Benefits costs per
covered WSEE came in at forecasted levels.
Operating expenses increased 12% over Q1 2021 and included
continued investment in our personnel, marketing initiatives and
technology. Travel and event costs also increased over the prior
year’s period which was more restrictive under the pandemic
conditions. Operating expense per WSEE per month decreased from
$240 in Q1 2021 to $224 in Q1 2022 demonstrating overall operating
leverage while investing in the growth of the business.
Cash outlays in the first three months of 2022 included the
repurchase of approximately 308,000 shares of stock at a cost of
$27.4 million, dividends totaling $17.2 million and capital
expenditures of $4.7 million. Adjusted cash totaled $153 million at
March 31, 2022 and $130 million remains available under our $500
million credit facility.
“Our significant double-digit worksite employee growth, combined
with effective pricing, favorable trends in our direct cost areas
and operating leverage produced strong Q1 earnings and cash flow,”
said Douglas S. Sharp, Insperity senior vice president of finance,
chief financial officer and treasurer. “We continue to be
positioned to invest in our Five Year Plan while providing strong
return to our shareholders through our dividend and share
repurchase programs.”
2022 Guidance
The company also announced its updated guidance for 2022,
including the second quarter of 2022. 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.
Q2 2022
Full Year 2022
Average WSEEs paid
287,100
—
289,500
289,600
—
294,700
Year-over-year increase (decrease)
18.0%
—
19.0%
15.5%
—
17.5%
Adjusted EPS
$0.88
—
$1.12
$4.31
—
$5.09
Year-over-year increase (decrease)
(3)%
—
23%
9%
—
29%
Adjusted EBITDA (in millions)
$60
—
$73
$285
—
$327
Year-over-year increase
0%
—
21%
12%
—
28%
Definition of Key Metrics
Average WSEEs paid - 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.
Conference Call and Webcast
Insperity will be hosting a conference call today at 8:30 a.m.
ET to discuss these results, and the guidance discussed in this
press release, and answer questions from investment analysts. To
listen in, call 833-797-3715 and use conference i.d. number
5888847. 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. 5888847. The webcast will be archived
for one year.
About Insperity
Since 1986, Insperity’s mission has been to help businesses
succeed so communities prosper. Offering the most comprehensive
suite of scalable HR solutions available in the marketplace,
Insperity is defined by an unrivaled breadth and depth of services
and level of care. Through an optimal blend of premium HR service
and technology, Insperity delivers the administrative relief,
reduced liabilities and better benefit solutions that businesses
need for sustained growth. With 2021 revenues of $5.0 billion and
more than 80 offices throughout the U.S., Insperity is currently
making a difference in thousands of businesses and communities
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 “anticipates,” “expects,” “intends,”
“plans,” “projects,” “believes,” “estimates,” “likely,” “possibly,”
“probably,” “could,” “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 employees, 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;
- labor shortages and increasing competition for highly skilled
workers;
- impact of inflation;
- vulnerability to regional economic factors because of our
geographic market concentration;
- failure to comply with covenants under our credit
facility;
- our liability for WSEE payroll, payroll taxes and benefits
costs, or other liabilities associated with actions of our client
companies or WSEEs;
- 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;
- an adverse determination regarding our status as the employer
of our WSEEs for tax and benefit purposes and an inability to offer
alternative benefit plans following such a determination;
- 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 or failure to
enhance our service and technology offerings to address new
regulations or client expectations;
- our liability or damage to our reputation relating to
disclosure of sensitive or private information as a result of data
theft, cyberattacks or security vulnerabilities;
- 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
(Unaudited)
(in thousands)
March 31, 2022
December 31, 2021
Assets
Cash and cash equivalents
$
576,654
$
575,812
Restricted cash
49,429
46,929
Marketable securities
32,610
31,791
Accounts receivable, net
670,223
513,306
Prepaid insurance
22,716
11,285
Other current assets
80,282
53,312
Income taxes receivable
—
12,413
Total current assets
1,431,914
1,244,848
Property and equipment, net
205,064
210,723
Right of use leased assets
61,629
62,830
Prepaid health insurance
9,000
9,000
Deposits
198,656
192,927
Goodwill and other intangible assets,
net
12,707
12,707
Deferred income taxes, net
—
4,892
Other assets
21,107
15,158
Total assets
$
1,940,077
$
1,753,085
Liabilities and stockholders'
equity
Accounts payable
$
7,826
$
6,412
Payroll taxes and other payroll deductions
payable
384,767
467,892
Accrued worksite employee payroll cost
645,623
409,653
Accrued health insurance costs
61,399
50,001
Accrued workers’ compensation costs
53,290
50,534
Accrued corporate payroll and
commissions
43,279
74,778
Other accrued liabilities
86,627
69,303
Income taxes payable
3,784
—
Total current liabilities
1,286,595
1,128,573
Accrued workers’ compensation cost, net of
current
182,888
192,694
Long-term debt
369,400
369,400
Operating lease liabilities, net of
current
62,119
64,192
Deferred income taxes, net
5,114
—
Total noncurrent liabilities
619,521
626,286
Stockholders’ equity:
Common stock
555
555
Additional paid-in capital
110,053
109,179
Treasury stock, at cost
(681,625
)
(665,089
)
Retained earnings
604,978
553,581
Total stockholders’ equity
(deficit)
33,961
(1,774
)
Total liabilities and stockholders’
equity
$
1,940,077
$
1,753,085
Insperity, Inc.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(in thousands, except per share
amounts)
Three Months Ended March
31,
2022
2021
Change
Operating results:
Revenues(1)
$
1,577,837
$
1,286,835
22.6
%
Payroll taxes, benefits and workers’
compensation costs
1,292,063
1,035,390
24.8
%
Gross profit
285,774
251,445
13.7
%
Salaries, wages and payroll taxes
107,439
103,075
4.2
%
Stock-based compensation
9,846
11,822
(16.7
)%
Commissions
10,310
7,719
33.6
%
Advertising
8,595
5,322
61.5
%
General and administrative expenses
41,005
31,636
29.6
%
Depreciation and amortization
10,184
8,047
26.6
%
Total operating expenses
187,379
167,621
11.8
%
Operating income
98,395
83,824
17.4
%
Other income (expense):
Interest income
148
543
(72.7
)%
Interest expense
(1,925
)
(1,599
)
20.4
%
Income before income tax
expense
96,618
82,768
16.7
%
Income tax expense
26,734
20,846
28.2
%
Net income
$
69,884
$
61,922
12.9
%
Less distributed and undistributed
earnings allocated to participating
securities
(47
)
(197
)
(76.1
)%
Net income allocated to common
shares
$
69,837
$
61,725
13.1
%
Net income per share of common
stock
Basic
$
1.82
$
1.62
12.3
%
Diluted
$
1.80
$
1.59
13.2
%
____________________________________
(1) Revenues are comprised of gross billings less WSEE payroll
costs as follows:
Three Months Ended March
31,
(in thousands)
2022
2021
Gross billings
$
10,357,905
$
8,050,422
Less: WSEE payroll cost
8,780,068
6,763,587
Revenues
$
1,577,837
$
1,286,835
Insperity, Inc.
KEY FINANCIAL AND STATISTICAL
DATA
(Unaudited)
Three Months Ended March
31,
2022
2021
Change
Average WSEEs paid
278,660
233,170
19.5
%
Statistical data (per WSEE per
month):
Revenues(1)
$
1,887
$
1,840
2.6
%
Gross profit
342
359
(4.7
)%
Operating expenses
224
240
(6.7
)%
Operating income
118
120
(1.7
)%
Net income
84
89
(5.6
)%
____________________________________
(1) Revenues per WSEE per month are comprised of gross billings
per WSEE per month less WSEE payroll costs per WSEE per month as
follows:
Three Months Ended March
31,
(per WSEE per month)
2022
2021
Gross billings
$
12,390
$
11,509
Less: WSEE payroll cost
10,503
9,669
Revenues
$
1,887
$
1,840
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.
Adjusted operating expenses
Represents operating expenses excluding
the impact of the following:
• non-cash stock-based compensation,
and
• depreciation and amortization
expense.
EBITDA
Represents net income computed in
accordance with GAAP, plus:
• interest expense,
• income tax expense,
• depreciation and amortization expense,
and
• amortization of SaaS implementation
costs.
Adjusted EBITDA
Represents EBITDA plus:
• non-cash stock-based compensation.
Adjusted net income
Represents net income computed in
accordance with GAAP, excluding:
• non-cash stock-based compensation.
Adjusted EPS
Represents diluted net income per share
computed in accordance with GAAP, excluding:
• non-cash stock-based compensation.
Following is a reconciliation of payroll cost (GAAP) to
non-bonus payroll costs (non-GAAP):
Three Months Ended March
31,
(in thousands, except per WSEE per
month)
2022
2021
Per WSEE
Per WSEE
Payroll cost
$
8,780,068
$
10,503
$
6,763,587
$
9,669
Less: Bonus payroll cost
1,983,853
2,373
1,420,475
2,031
Non-bonus payroll cost
$
6,796,215
$
8,130
$
5,343,112
$
7,638
% Change period over period
27.2
%
6.4
%
3.6
%
5.8
%
Following is a reconciliation of cash, cash equivalents and
marketable securities (GAAP) to adjusted cash, cash equivalents and
marketable securities (non-GAAP):
(in thousands)
March 31, 2022
December 31, 2021
Cash, cash equivalents and marketable
securities
$
609,264
$
607,603
Less:
Amounts payable for withheld federal and
state income taxes,
employment taxes and other payroll
deductions
338,278
424,800
Client prepayments
117,807
20,054
Adjusted cash, cash equivalents and
marketable securities
$
153,179
$
162,749
Following is a reconciliation of net income (GAAP) to EBITDA
(non-GAAP) and adjusted EBITDA (non-GAAP):
(in thousands, except per WSEE per
month)
Three Months Ended March
31,
2022
2021
Per WSEE
Per WSEE
Net income
$
69,884
$
84
$
61,922
$
89
Income tax expense
26,734
32
20,846
30
Interest expense
1,925
2
1,599
2
Depreciation and amortization
10,184
12
8,047
11
EBITDA
108,727
130
92,414
132
Stock-based compensation
9,846
12
11,822
17
Adjusted EBITDA
$
118,573
$
142
$
104,236
$
149
% Change period over period
13.8
%
(4.7
) %
2.9
%
4.9
%
Following is a reconciliation of net income (GAAP) to adjusted
net income (non-GAAP):
Three Months Ended March
31,
(in thousands)
2022
2021
Net income
$
69,884
$
61,922
Non-GAAP adjustments:
Stock-based compensation
9,846
11,822
Tax effect
(2,724
)
(2,978
)
Total non-GAAP adjustments, net
7,122
8,844
Adjusted net income
$
77,006
$
70,766
% Change period over period
8.8
%
5.8
%
Following is a reconciliation of diluted EPS (GAAP) to adjusted
EPS (non-GAAP):
Three Months Ended March
31,
2022
2021
Diluted EPS
$
1.80
$
1.59
Non-GAAP adjustments:
Stock-based compensation
0.25
0.30
Tax effect
(0.06
)
(0.07
)
Total non-GAAP adjustments, net
$
0.19
$
0.23
Adjusted EPS
$
1.99
$
1.82
% Change period over period
9.3
%
7.1
%
Following is a reconciliation of GAAP to non-GAAP financial
measures for second quarter and full year 2022 guidance:
(in millions, except per share
amounts)
Q2 2022 Guidance
Full Year 2022
Guidance
Net income
$23 - $32
$132 - $162
Income tax expense
9 - 13
51 - 63
Interest expense
3
10
Depreciation and amortization
10
42
Amortization of SaaS implementation
costs
—
2
EBITDA
45 - 58
237 - 279
Stock-based compensation
15
48
Adjusted EBITDA
$60 - $73
$285 - $327
Diluted net income per share of common
stock
$0.60 - $0.84
$3.42 - $4.20
Non-GAAP adjustments:
Stock-based compensation
0.39
1.24
Tax effect
(0.11)
(0.35)
Total non-GAAP adjustments, net
0.28
0.89
Adjusted EPS
$0.88 - $1.12
$4.31 - $5.09
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220426005304/en/
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
Insperity (NYSE:NSP)
Gráfica de Acción Histórica
De Jun 2024 a Jul 2024
Insperity (NYSE:NSP)
Gráfica de Acción Histórica
De Jul 2023 a Jul 2024