Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CBIZ, Inc. | d594712d8k.htm |
| EX-99.1 - EX-99.1 - CBIZ, Inc. | d594712dex991.htm |
EXHIBIT 99.2
Unaudited Pro Forma Consolidated Financial Information
On July 26, 2013, CBIZ, Inc., a Delaware corporation (the “Company”), through its subsidiary CBIZ Operations, Inc., an Ohio corporation, entered into an agreement (the “Zotec Agreement”) with Zotec Partners, LLC, an Indiana limited liability company (“Zotec”), to sell all of the issued and outstanding capital stock of each of CBIZ Medical Management Professionals, Inc., an Ohio corporation, and CBIZ Medical Management, Inc., a North Carolina corporation, and substantially all of the stock of their subsidiary companies, collectively consisting of all of CBIZ’s Medical Management Professionals ongoing operations and business (“MMP”).
On August 30, 2013, pursuant to the terms of the Zotec Agreement, the Company completed the divestiture of its MMP business to Zotec for consideration of $201.6 million, subject to adjustments for working capital as defined in the Zotec Agreement.
Concurrent with the completion of the Zotec Agreement, the Company completed the purchase of 3,858,334 shares of the Company’s common shares from Westbury (Bermuda) Ltd. (“Westbury”), pursuant to a Stock Purchase Agreement that was entered into on July 26, 2013 between the Company and its largest shareholder, Westbury. The Company paid Westbury a total of $25,657,921, which represents a price per share of $6.65.
The unaudited pro forma consolidated balance sheet of the Company as of June 30, 2013 is presented as if the disposition occurred on June 30, 2013. The unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2013 and for the years ended December 31, 2012, 2011 and 2010 are presented as if the disposition occurred on January 1, 2010 and exclude the results of discontinued operations.
The results of operations of the MMP business were classified as discontinued operations in the unaudited consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q as of and for the six months ended June 30, 2013. As such, in the condensed consolidated statement of operations for the six months ended June 30, 2013, there are no pro forma adjustments to continuing operations necessary to reflect the disposition.
The following unaudited pro forma consolidated financial statements are presented for illustrative purposes only and have been prepared to give effect to the sale of MMP and reflect what the financial statements would have reported if the sale of MMP occurred at the beginning of the earliest date presented. The resulting pro forma financial information of the continuing operations of the Company are not necessarily indicative of future results of operations or financial condition.
CBIZ, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET AND NOTES - UNAUDITED
JUNE 30, 2013
(In thousands)
| Pro Forma Adjustments | ||||||||||||||||
| Previously | MMP | Proceeds | ||||||||||||||
| Reported | Items | and Other | Pro Forma | |||||||||||||
| ASSETS | ||||||||||||||||
| Current assets: |
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| Cash and cash equivalents |
$ | 1,187 | $ | — | $ | 7,142 | (b) | $ | 8,329 | |||||||
| Restricted cash |
28,219 | — | — | 28,219 | ||||||||||||
| Accounts receivable, net |
161,402 | — | — | 161,402 | ||||||||||||
| Deferred income taxes—current |
12,138 | — | — | 12,138 | ||||||||||||
| Other current assets |
12,978 | — | 1,600 | (c) | 14,578 | |||||||||||
| Assets of discontinued operations |
102,087 | (102,087 | )(a) | — | — | |||||||||||
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| Current assets before funds held for clients |
318,011 | (102,087 | ) | 8,742 | 224,666 | |||||||||||
| Funds held for clients |
116,370 | — | — | 116,370 | ||||||||||||
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| Total current assets |
434,381 | (102,087 | ) | 8,742 | 341,036 | |||||||||||
| Property and equipment, net |
18,210 | — | — | 18,210 | ||||||||||||
| Goodwill and other intangible assets, net |
474,981 | — | — | 474,981 | ||||||||||||
| Assets of deferred compensation plan |
44,964 | — | — | 44,964 | ||||||||||||
| Other assets |
7,693 | — | — | 7,693 | ||||||||||||
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| Total assets |
$ | 980,229 | $ | (102,087 | ) | $ | 8,742 | $ | 886,884 | |||||||
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| LIABILITIES | ||||||||||||||||
| Current liabilities: |
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| Accounts payable |
$ | 40,766 | $ | — | $ | — | $ | 40,766 | ||||||||
| Income taxes payable—current |
8,612 | — | 48,700 | (d) | 57,312 | |||||||||||
| Accrued personnel costs |
30,168 | — | — | 30,168 | ||||||||||||
| Notes payable—current |
4,875 | — | — | 4,875 | ||||||||||||
| Contingent liabilities—current |
14,456 | — | — | 14,456 | ||||||||||||
| Other current liabilities |
19,785 | — | — | 19,785 | ||||||||||||
| Liabilities of discontinued operations |
11,553 | (11,553 | )(a) | — | — | |||||||||||
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| Current liabilities before client fund obligations |
130,215 | (11,553 | ) | 48,700 | 167,362 | |||||||||||
| Client fund obligations |
116,338 | — | — | 116,338 | ||||||||||||
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| Total current liabilities |
246,553 | (11,553 | ) | 48,700 | 283,700 | |||||||||||
| Convertible notes, net |
123,810 | — | — | 123,810 | ||||||||||||
| Bank debt |
204,000 | — | (164,000 | )(b) | 40,000 | |||||||||||
| Income taxes payable—non-current |
4,280 | — | — | 4,280 | ||||||||||||
| Deferred income taxes—non-current |
875 | — | — | 875 | ||||||||||||
| Deferred compensation plan obligations |
44,964 | — | — | 44,964 | ||||||||||||
| Contingent liabilities—non-current |
19,798 | — | — | 19,798 | ||||||||||||
| Accrued expenses—non current |
11,297 | — | — | 11,297 | ||||||||||||
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| Total liabilities |
655,577 | (11,553 | ) | (115,300 | ) | 528,724 | ||||||||||
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| STOCKHOLDERS’ EQUITY | ||||||||||||||||
| Common stock |
1,131 | — | — | 1,131 | ||||||||||||
| Additional paid-in capital |
563,646 | — | — | 563,646 | ||||||||||||
| Retained earnings |
132,580 | (90,534 | )(e) | 149,700 | (e) | 191,746 | ||||||||||
| Treasury stock |
(371,890 | ) | — | (25,658 | )(f) | (397,548 | ) | |||||||||
| Accumulated other comprehensive loss |
(815 | ) | — | — | (815 | ) | ||||||||||
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| Total stockholders’ equity |
324,652 | (90,534 | ) | 124,042 | 358,160 | |||||||||||
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| Total liabilities and stockholders’ equity |
$ | 980,229 | $ | (102,087 | ) | $ | 8,742 | $ | 886,884 | |||||||
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| (a) | Represents the assets and liabilities of MMP that were previously determined to be held for sale. |
| (b) | Proceeds from sale of MMP, net of closing costs and adjustments of $4.8 million, less $25.7 million used to repurchase 3.86 million shares of the Company’s common shares from Westbury (Bermuda) Ltd., and $164.0 million to immediately pay down debt. |
| (c) | Proceeds from the sale of MMP in the form of a note receivable. |
| (d) | Estimated tax liability resulting from the gain on sale of MMP using a tax rate of 40%. |
| (e) | Collectively, the estimated after tax gain on the sale of MMP. |
| (f) | The repurchase of the Company’s common shares as described in note (b). |
CBIZ, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND NOTES - UNAUDITED
FOR THE YEARS ENDED DECEMBER 31, 2012, 2011, AND 2010
(In thousands, except per share data)
| 2012 | ||||||||||||
| Previously | Adjustments for | CBIZ | ||||||||||
| Reported | Sale of MMP (a) | Pro Forma (b) | ||||||||||
| Revenue |
$ | 766,094 | $ | 138,016 | $ | 628,078 | ||||||
| Operating expenses |
680,195 | 122,958 | 557,237 | |||||||||
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| Gross margin |
85,899 | 15,058 | 70,841 | |||||||||
| Corporate general and administrative expenses |
30,422 | 213 | 30,209 | |||||||||
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| Operating income |
55,477 | 14,845 | 40,632 | |||||||||
| Total other expense, net |
5,074 | 1,054 | 4,020 | |||||||||
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| Income from continuing operations before income tax expense |
50,403 | 13,791 | 36,612 | |||||||||
| Income tax expense |
19,328 | 5,349 | 13,979 | |||||||||
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| Income from continuing operations |
$ | 31,075 | $ | 8,442 | $ | 22,633 | ||||||
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| Basic weighted average common shares outstanding |
49,002 | 49,002 | ||||||||||
| Diluted weighted average common shares outstanding |
49,252 | 49,252 | ||||||||||
| Basic earnings per share from continuing operations |
$ | 0.63 | $ | 0.17 | $ | 0.46 | ||||||
| Diluted earnings per share from continuing operations |
$ | 0.63 | $ | 0.17 | $ | 0.46 | ||||||
| 2011 | ||||||||||||
| Previously | Adjustments for | CBIZ | ||||||||||
| Reported | Sale of MMP (a) | Pro Forma (b) | ||||||||||
| Revenue |
$ | 733,805 | $ | 141,046 | $ | 592,759 | ||||||
| Operating expenses |
644,269 | 124,668 | 519,601 | |||||||||
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| Gross margin |
89,536 | 16,378 | 73,158 | |||||||||
| Corporate general and administrative expenses |
31,583 | 50 | 31,533 | |||||||||
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| Operating income |
57,953 | 16,328 | 41,625 | |||||||||
| Total other expense, net |
10,986 | 1,060 | 9,926 | |||||||||
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| Income from continuing operations before income tax expense |
46,967 | 15,268 | 31,699 | |||||||||
| Income tax expense |
18,383 | 6,092 | 12,291 | |||||||||
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| Income from continuing operations |
$ | 28,584 | $ | 9,176 | $ | 19,408 | ||||||
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| Basic weighted average common shares outstanding |
49,328 | 49,328 | ||||||||||
| Diluted weighted average common shares outstanding |
49,599 | 49,599 | ||||||||||
| Basic earnings per share from continuing operations |
$ | 0.58 | $ | 0.19 | $ | 0.39 | ||||||
| Diluted earnings per share from continuing operations |
$ | 0.58 | $ | 0.19 | $ | 0.39 | ||||||
| 2010 | ||||||||||||
| Previously | Adjustments for | CBIZ | ||||||||||
| Reported | Sale of MMP (a) | Pro Forma (b) | ||||||||||
| Revenue |
$ | 730,401 | $ | 148,425 | $ | 581,976 | ||||||
| Operating expenses |
644,335 | 131,754 | 512,581 | |||||||||
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| Gross margin |
86,066 | 16,671 | 69,395 | |||||||||
| Corporate general and administrative expenses |
29,584 | 4 | 29,580 | |||||||||
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| Operating income |
56,482 | 16,667 | 39,815 | |||||||||
| Total other expense, net |
11,310 | 1,140 | 10,170 | |||||||||
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| Income from continuing operations before income tax expense |
45,172 | 15,527 | 29,645 | |||||||||
| Income tax expense |
17,017 | 6,189 | 10,828 | |||||||||
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| Income from continuing operations |
$ | 28,155 | $ | 9,338 | $ | 18,817 | ||||||
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| Basic weighted average common shares outstanding |
57,692 | 57,692 | ||||||||||
| Diluted weighted average common shares outstanding |
58,193 | 58,193 | ||||||||||
| Basic earnings per share from continuing operations |
$ | 0.49 | $ | 0.16 | $ | 0.33 | ||||||
| Diluted earnings per share from continuing operations |
$ | 0.48 | $ | 0.16 | $ | 0.32 | ||||||
| (a) | Adjustments for MMP include the previously reported operating results for MMP as well as adjustments for allocation of interest expense and income tax expense. Income tax expense was calculated using the estimated effective tax rate for MMP. |
| (b) | The CBIZ Pro Forma reflects the adjusted results of operations after the divestiture of MMP. |
CBIZ, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND NOTES - UNAUDITED
SIX MONTHS ENDED JUNE 30, 2013
(In thousands, except per share data)
| Previously | Adjustments for | CBIZ | ||||||||||
| Reported | Sale of MMP (a) | Pro Forma | ||||||||||
| Revenue |
$ | 373,945 | $ | — | $ | 373,945 | ||||||
| Operating expenses |
311,625 | — | 311,625 | |||||||||
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| Gross margin |
62,320 | — | 62,320 | |||||||||
| Corporate general and administrative expenses |
17,633 | — | 17,633 | |||||||||
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| Operating income |
44,687 | — | 44,687 | |||||||||
| Total other expense, net |
5,892 | — | 5,892 | |||||||||
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| Income from continuing operations before income tax expense |
38,795 | — | 38,795 | |||||||||
| Income tax expense |
16,441 | — | 16,441 | |||||||||
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| Income from continuing operations |
$ | 22,354 | $ | — | $ | 22,354 | ||||||
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| Basic weighted average common shares outstanding |
49,535 | 49,535 | ||||||||||
| Diluted weighted average common shares outstanding |
49,891 | 49,891 | ||||||||||
| Basic earnings per share from continuing operations |
$ | 0.45 | $ | — | $ | 0.45 | ||||||
| Diluted earnings per share from continuing operations |
$ | 0.45 | $ | — | $ | 0.45 | ||||||
| (a) | The results of operations of MMP were classified as discontinued operations in the unaudited consolidated financial statements and notes thereto included in CBIZ’s Quarterly Report on Form 10-Q as of and for the six months ended June 30, 2013. As such, no pro forma adjustments to continuing operations are necessary to reflect the divestiture. |