Insperity Announces Fourth Quarter and Full Year Results
2012 adjusted EPS increases 26% on 9% revenue growth
2012 adjusted EBITDA increases 23% to over $100 million
$43 million returned to stockholders in 2012 through dividends
Working capital of $116 million and no debt at Dec. 31, 2012
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 fourth quarter and year ended
Dec. 31, 2012. For the fourth quarter, the company’s adjusted net income
was $11.9 million. Adjusted diluted earnings per share was $0.47, an
11.9% increase over 2011. Adjusted net income excludes an after-tax
non-cash impairment charge of $2.5 million, or $0.10 per share,
associated with a write-down of goodwill related to a 2006 acquisition.
Additionally, there was a $0.03 effect to earnings per share, related to
the accounting treatment associated with the $1.00 per share special
dividend paid in December 2012. Reported fourth quarter net income and
earnings per share were $9.4 million and $0.34, respectively.
For the year ended Dec. 31, 2012, the company had adjusted diluted
earnings per share of $1.67, a 25.6% increase over 2011. Adjusted
results exclude $0.10 per share related to the impairment charge and
$0.01 per share related to the accounting treatment associated with the
special dividend in 2012, and $0.17 per share for two non-operational
items in 2011. Reported 2012 net income was $40.4 million, or $1.56 per
share, a 34.5% increase compared to 2011.
“We are pleased with these strong results for both the quarter and the
year, achieved in spite of the effects of the election and fiscal cliff
on our customer base comprised of highly successful U.S. small
businesses,” said Paul
J. Sarvadi, Insperity chairman and chief executive officer. “Our
plan for growth in 2013 is to invest in expanding our number of business
performance advisors, leverage opportunities related to health care
reform, and accelerate the growth of our adjacent businesses.”
Fourth Quarter Results
Revenues for the fourth quarter of 2012 increased 7.5% over the fourth
quarter of 2011 due to a 6.0% increase in the average number of worksite
employees paid per month and a 1.5% increase in revenues per worksite
employee per month. Gross profit increased 4.0% over the fourth quarter
of 2011 to $93.5 million, as expected.
Operating expenses increased 5.9% to $77.6 million compared to the
fourth quarter of 2011. Excluding the $4.2 million impairment charge,
operating expenses increased less than 1.0% to $73.4 million.
Year-to-Date Results
Revenues in 2012 were $2.2 billion, an increase of 9.2% over 2011. Gross
profit for the year ended Dec. 31, 2012, increased 8.7% to $382.2
million. The average gross profit per worksite employee per month
increased $2, or 0.8%, to $253 in 2012 from $251 in 2011.
Reported 2012 operating expenses were $314.7 million. Excluding the $4.2
million impairment charge, operating expenses increased 5.5% over 2011
to $310.5 million.
Reported operating income for the year ended Dec. 31, 2012, was $67.5
million. Excluding the impairment charge, operating income was $71.7
million, a 25.1% increase over 2011.
Adjusted EBITDA increased 22.8% to $100.9 million compared to 2011.
These results exclude the impairment charge in 2012 and $7.5 million in
costs associated with two non-operational items in 2011. Cash outlays in
2012 included the repurchase of 595,676 shares at a cost of $16.9
million, including 80,983 shares repurchased in a modified “Dutch
auction” tender offer in the fourth quarter; dividends of $42.7 million,
including a special cash dividend of $25.7 million paid in the fourth
quarter; and capital expenditures of $17.6 million. Working capital at
Dec. 31, 2012, was $115.7 million.
“Our strong balance sheet and cash flow have allowed us to continue to
invest in the business while returning significant value to
stockholders, including a $1.00 per share special dividend paid in
December,” said Douglas
S. Sharp, senior vice-president of finance, chief financial officer
and treasurer. “Going forward, we intend to continue to invest in our
growth initiatives, continue our dividend program, and apply the $47
million balance authorized in our $50 million Dutch tender offer to
future share repurchases.”
Insperity will be hosting a conference call today at 10 a.m. ET to
discuss these results, give guidance for the first quarter and full year
2013 and answer questions from investment analysts. To listen in, call
877-651-0053 and use conference i.d. number 87449063. 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. 87449063, for one week. The
webcast will be archived for one year.
Insperity, a trusted advisor to America’s best businesses for more than
26 years, provides an array of human resources and business solutions
designed to help improve business performance. InsperityTM
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
OptimizationTM 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 Insurance Services. Insperity business performance
solutions support more than 100,000 businesses with over 2 million
employees. With 2012 revenues of $2.2 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 benefits or other consequences of such plans or strategies,
or projections involving 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
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: (i)
continued effects of the economic recession and general 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 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; and (x) 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.
Insperity, Inc.
Summary Financial Information
(in thousands, except per share amounts and statistical data)
Dec. 31,
Dec. 31,
2012
2011
Assets
Cash and cash equivalents
$
264,544
$
211,208
Restricted cash
47,149
44,737
Marketable securities
16,904
56,987
Accounts receivable
190,386
170,933
Prepaid insurance
15,620
21,300
Other current assets
9,651
11,488
Income taxes receivable
-
2,902
Deferred income taxes
7,211
3,233
Total current assets
551,465
522,788
Property and equipment, net
93,942
92,944
Prepaid health insurance
9,000
9,000
Deposits
67,201
54,960
Goodwill and other intangible assets, net
23,775
28,433
Other assets
4,817
4,134
Total assets
$
750,200
$
712,259
Liabilities and Stockholders’ Equity
Accounts payable
$
3,660
$
5,085
Payroll taxes and other payroll deductions payable
178,534
168,652
Accrued worksite employee payroll expense
150,070
130,317
Accrued health insurance costs
13,942
9,427
Accrued workers’ compensation costs
49,484
46,548
Accrued corporate payroll and commissions
23,537
22,383
Other accrued liabilities
12,478
13,814
Income taxes payable
4,054
-
Total current liabilities
435,759
396,226
Accrued workers’ compensation costs
64,536
60,054
Deferred income taxes
9,000
10,772
Total noncurrent liabilities
73,536
70,826
Stockholders’ equity:
Common stock
308
309
Additional paid-in capital
133,207
135,871
Treasury stock, cost
(133,950
)
(134,647
)
Accumulated other comprehensive income, net of tax
16
24
Retained earnings
241,324
243,650
Total stockholders’ equity
240,905
245,207
Total liabilities and stockholders’ equity
$
750,200
$
712,259
Insperity, Inc.
Summary Financial Information (continued)
(in thousands, except per share amounts and statistical data)
Three months ended
Dec. 31,
Year ended
Dec. 31,
2012
2011
Change
2012
2011
Change
Operating results:
Revenues (gross billings of $3.653 billion,
$3.246 billion, $12.992 billion and $11.7
billion, less worksite employee payroll cost
of $3.121 billion, $2.751 billion, $10.833
billion and $9.724 billion, respectively)
$
532,438
$
495,114
7.5
%
$
2,158,824
$
1,976,219
9.2
%
Direct costs:
Payroll taxes, benefits and workers’
compensation costs
438,935
405,168
8.3
%
1,776,603
1,624,444
9.4
%
Gross profit
93,503
89,946
4.0
%
382,221
351,775
8.7
%
Operating expenses:
Salaries, wages and payroll taxes
41,405
37,675
9.9
%
168,807
155,233
8.7
%
Stock-based compensation
2,429
2,146
13.2
%
9,814
8,601
14.1
%
Commissions
4,216
3,701
13.9
%
14,515
13,451
7.9
%
Advertising
4,585
8,333
(45.0
)%
21,586
26,613
(18.9
)%
General and administrative expenses
15,870
17,517
(9.4
)%
77,564
75,345
2.9
%
Impairment charge
4,191
-
-
4,191
-
-
Depreciation and amortization
4,914
3,883
26.6
%
18,250
15,218
19.9
%
Total operating expenses
77,610
73,255
5.9
%
314,727
294,461
6.9
%
Operating income
15,893
16,691
(4.8
)%
67,494
57,314
17.8
%
Other income (expense):
Interest income, net
147
140
5.0
%
609
969
(37.2
)%
Other, net
46
(11
)
518.2
%
187
(7,508
)
102.5
%
Income before income tax expense
16,086
16,820
(4.4
)%
68,290
50,775
34.5
%
Income tax expense
6,641
5,976
11.1
%
27,888
20,305
37.3
%
Net income
$
9,445
$
10,844
(12.9
)%
$
40,402
$
30,470
32.6
%
Less distributed and undistributed earnings
allocated to participating securities
(858
)
(325
)
164.0
%
(1,224
)
(908
)
34.8
%
Net income allocated to common shares
$
8,587
$
10,519
(18.4
)%
$
39,178
$
29,562
32.5
%
Basic net income per share of common stock
$
0.34
$
0.42
(19.0
)%
$
1.57
$
1.16
35.3
%
Diluted net income per share of
common stock
$
0.34
$
0.42
(19.0
)%
$
1.56
$
1.16
34.5
%
Insperity, Inc.
Summary Financial Information (continued)
(in thousands, except per share amounts and statistical data)
Three months ended
Year ended
Dec. 31,
Dec. 31,
2012
2011
Change
2012
2011
Change
Statistical data:
Average number of worksite
employees paid per month
129,345
122,065
6.0
%
125,650
116,839
7.5
%
Revenues per worksite employee
per month(1)
$
1,372
$
1,352
1.5
%
$
1,432
$
1,410
1.6
%
Gross profit per worksite employee
per month
241
246
(2.0
)%
253
251
0.8
%
Operating expenses per worksite
employee per month
200
200
-
208
210
(1.0
)%
Operating income per worksite
employee per month
41
46
(10.9
)%
45
41
9.8
%
Net income per worksite
employee per month
24
30
(20.0
)%
27
22
22.7
%
(1)
Gross billings of $9,414, $8,864, $8,617 and $8,345 per worksite
employee per month, less payroll cost of $8,042,
$7,512, $7,185 and $6,935 per worksite employee per month,
respectively.
Insperity, Inc.
Summary Financial Information (continued)
(in thousands, except per share amounts and statistical data)
(Unaudited)
GAAP to Non-GAAP Reconciliation Tables
Three months ended
Year ended
Dec. 31,
Dec. 31,
2012
2011
Change
2012
2011
Change
Payroll cost (GAAP)
$
3,120,665
$
2,751,184
13.4
%
$
10,832,966
$
9,723,990
11.4
%
Less: Bonus payroll cost
597,854
415,548
43.9
%
1,326,442
1,059,677
25.2
%
Non-bonus payroll cost
$
2,522,811
$
2,335,636
8.0
%
$
9,506,524
$
8,664,313
9.7
%
Payroll cost per worksite
employee per month (GAAP)
$
8,042
$
7,513
7.0
%
$
7,185
$
6,935
3.6
%
Less: Bonus payroll cost per
worksite employee per month
1,541
1,135
35.8
%
880
755
16.6
%
Non-bonus payroll cost per
worksite employee per month
$
6,501
$
6,378
1.9
%
$
6,305
$
6,180
2.0
%
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
Year ended
Dec. 31,
Dec. 31,
2012
2011
Change
2012
2011
Change
Net income (GAAP)
$
9,445
$
10,844
(12.9
)%
$
40,402
$
30,470
32.6
%
Income tax expense
6,641
5,976
11.1
%
27,888
20,305
37.3
%
Interest expense
89
89
-
354
108
227.8
%
Depreciation and amortization
4,914
3,883
26.6
%
18,250
15,218
19.9
%
EBITDA
21,089
20,792
1.4
%
86,894
66,101
31.5
%
Impairment charge
4,191
-
-
4,191
-
-
Stock-based compensation
2,429
2,146
13.2
%
9,814
8,601
14.1
%
Non-operational items
-
-
-
-
7,496
-
Adjusted EBITDA
$
27,709
$
22,938
20.8
%
$
100,899
$
82,198
22.8
%
EBITDA represents net income computed in accordance with generally
accepted accounting principles (“GAAP”), plus interest expense, income
tax expense, depreciation and amortization expense. Insperity management
believes 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
Dec. 31,
Year Ended
Dec. 31,
2012
2011
Change
2012
2011
Change
Net income (GAAP)
$
9,445
$
10,844
(12.9
)%
$
40,402
$
30,470
32.6
%
Impairment charge, net of tax
2,460
-
-
2,460
-
-
Non-operational items, net of tax
-
-
-
-
4,493
-
Adjusted net income
$
11,905
$
10,844
9.8
%
$
42,862
$
34,963
22.6
%
Three Months Ended
Dec. 31,
Year Ended
Dec. 31,
2012
2011
Change
2012
2011
Change
Diluted net income per share of
common stock (GAAP)
$
0.34
$
0.42
(19.0
)%
$
1.56
$
1.16
34.5
%
Impairment charge, net of tax
0.10
-
-
0.10
-
-
Impact of dividends exceeding
earnings
0.03
-
-
0.01
-
-
Non-operational items, net of tax
-
-
-
-
0.17
-
Adjusted diluted net income per
share of common stock
$
0.47
$
0.42
11.9
%
$
1.67
$
1.33
25.6
%
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 a $4.2 million impairment
charge associated with the Performance Management reporting unit in
2012, and two non-operational items in 2011 (loss on aircraft exchange
and California settlement), net of tax. Under the two-class earnings per
share method, the undistributed losses resulting from dividends
exceeding net income are not allocated to participating securities.
Insperity management believes adjusted net income is a useful measure of
the company’s operating performance in this period, as it allows for
additional analysis of the company’s operating results separate from the
impact of these items.
Non-bonus payroll, 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, 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, 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.
Insperity, Inc. Investor Relations Contact: Douglas
S. Sharp, 281-348-3232 Senior Vice President of Finance, Chief
Financial Officer and Treasurer or News Media Contact: Jason
Cutbirth, 281-312-3085 Senior Vice President of Marketing jason.cutbirth@insperity.com
Press Release $NSP Insperity, Inc.
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 fourth quarter and year ended Dec. 31, 2012. For the fourth quarter, the company’s adjusted net income was $11.9 million. Adjusted diluted earnings per share was $0.47, an 11.9% increase over 2011. Adjusted net income excludes an after-tax non-cash impairment charge of $2.5 million, or $0.10 per share, associated with a write-down of goodwill related to a 2006 acquisition. Additionally, there was a $0.03 effect to earnings per share, related to the accounting treatment associated with the $1.00 per share special dividend paid in December 2012. Reported fourth quarter net income and earnings per share were $9.4 million and $0.34, respectively.
For the year ended Dec. 31, 2012, the company had adjusted diluted earnings per share of $1.67, a 25.6% increase over 2011. Adjusted results exclude $0.10 per share related to the impairment charge and $0.01 per share related to the accounting treatment associated with the special dividend in 2012, and $0.17 per share for two non-operational items in 2011. Reported 2012 net income was $40.4 million, or $1.56 per share, a 34.5% increase compared to 2011.
“We are pleased with these strong results for both the quarter and the year, achieved in spite of the effects of the election and fiscal cliff on our customer base comprised of highly successful U.S. small businesses,” said Paul J. Sarvadi, Insperity chairman and chief executive officer. “Our plan for growth in 2013 is to invest in expanding our number of business performance advisors, leverage opportunities related to health care reform, and accelerate the growth of our adjacent businesses.”
Fourth Quarter Results
Revenues for the fourth quarter of 2012 increased 7.5% over the fourth quarter of 2011 due to a 6.0% increase in the average number of worksite employees paid per month and a 1.5% increase in revenues per worksite employee per month. Gross profit increased 4.0% over the fourth quarter of 2011 to $93.5 million, as expected.
Operating expenses increased 5.9% to $77.6 million compared to the fourth quarter of 2011. Excluding the $4.2 million impairment charge, operating expenses increased less than 1.0% to $73.4 million.
Year-to-Date Results
Revenues in 2012 were $2.2 billion, an increase of 9.2% over 2011. Gross profit for the year ended Dec. 31, 2012, increased 8.7% to $382.2 million. The average gross profit per worksite employee per month increased $2, or 0.8%, to $253 in 2012 from $251 in 2011.
Reported 2012 operating expenses were $314.7 million. Excluding the $4.2 million impairment charge, operating expenses increased 5.5% over 2011 to $310.5 million.
Reported operating income for the year ended Dec. 31, 2012, was $67.5 million. Excluding the impairment charge, operating income was $71.7 million, a 25.1% increase over 2011.
Adjusted EBITDA increased 22.8% to $100.9 million compared to 2011. These results exclude the impairment charge in 2012 and $7.5 million in costs associated with two non-operational items in 2011. Cash outlays in 2012 included the repurchase of 595,676 shares at a cost of $16.9 million, including 80,983 shares repurchased in a modified “Dutch auction” tender offer in the fourth quarter; dividends of $42.7 million, including a special cash dividend of $25.7 million paid in the fourth quarter; and capital expenditures of $17.6 million. Working capital at Dec. 31, 2012, was $115.7 million.
“Our strong balance sheet and cash flow have allowed us to continue to invest in the business while returning significant value to stockholders, including a $1.00 per share special dividend paid in December,” said Douglas S. Sharp, senior vice-president of finance, chief financial officer and treasurer. “Going forward, we intend to continue to invest in our growth initiatives, continue our dividend program, and apply the $47 million balance authorized in our $50 million Dutch tender offer to future share repurchases.”
Insperity will be hosting a conference call today at 10 a.m. ET to discuss these results, give guidance for the first quarter and full year 2013 and answer questions from investment analysts. To listen in, call 877-651-0053 and use conference i.d. number 87449063. 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. 87449063, for one week. The webcast will be archived for one year.
Insperity, a trusted advisor to America’s best businesses for more than 26 years, provides an array of human resources and business solutions designed to help improve business performance. InsperityTM 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 OptimizationTM 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 Insurance Services. Insperity business performance solutions support more than 100,000 businesses with over 2 million employees. With 2012 revenues of $2.2 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 benefits or other consequences of such plans or strategies, or projections involving 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 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: (i) continued effects of the economic recession and general 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 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; and (x) 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.
Insperity, Inc.
Summary Financial Information
(in thousands, except per share amounts and statistical data)
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Insperity, Inc.
Summary Financial Information (continued)
(in thousands, except per share amounts and statistical data)
Dec. 31,
Dec. 31,
2012
2011
Change
2012
2011
Change
billion and $9.724 billion, respectively)
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Insperity, Inc.
Summary Financial Information (continued)
(in thousands, except per share amounts and statistical data)
2012
2011
Change
2012
2011
Change
per month(1)
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(1)
Insperity, Inc.
Summary Financial Information (continued)
(in thousands, except per share amounts and statistical data)
(Unaudited)
GAAP to Non-GAAP Reconciliation Tables
2012
2011
Change
2012
2011
Change
7,513
7.0
6,378
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.
2012
2011
Change
2012
2011
Change
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EBITDA represents net income computed in accordance with generally accepted accounting principles (“GAAP”), plus interest expense, income tax expense, depreciation and amortization expense. Insperity management believes 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.
Dec. 31,
Dec. 31,
2012
2011
Change
2012
2011
Change
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Dec. 31,
Dec. 31,
2012
2011
Change
2012
2011
Change
common stock (GAAP)
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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 a $4.2 million impairment charge associated with the Performance Management reporting unit in 2012, and two non-operational items in 2011 (loss on aircraft exchange and California settlement), net of tax. Under the two-class earnings per share method, the undistributed losses resulting from dividends exceeding net income are not allocated to participating securities. Insperity management believes adjusted net income is a useful measure of the company’s operating performance in this period, as it allows for additional analysis of the company’s operating results separate from the impact of these items.
Non-bonus payroll, 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, 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, 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.
Insperity, Inc.
Investor Relations Contact:
Douglas S. Sharp, 281-348-3232
Senior Vice President of Finance,
Chief Financial Officer and Treasurer
or
News Media Contact:
Jason Cutbirth, 281-312-3085
Senior Vice President of Marketing
jason.cutbirth@insperity.com
Source: Insperity, Inc.