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 Mar. 31,
First Quarter Results
First quarter 2019 net income and diluted earnings per share of $76.3
million and $1.85 represented increases of 53% and 57%, respectively,
compared to the first quarter of 2018. Adjusted EPS was $1.98, a 40%
increase over the first quarter of 2018. Adjusted EBITDA increased 21%
over the first quarter of 2018 to $101.4 million.
"Our record first quarter results reflect the strength of our business
model and continued excellent execution of our strategic plan," said
Paul J. Sarvadi, Insperity chairman and chief executive officer. "These
results further demonstrate the sustainability of our rapid growth and
profitability experienced over the last several years into 2019."
Revenues increased 14% over the first quarter of 2018 to $1,153.0
million on a 15% increase in the average number of worksite employees
("WSEEs") paid per month. The continued double-digit worksite employee
growth was the result of the enrollment of new clients coming off a
successful 2018 fall sales campaign and a high level of client retention
during our heavy first quarter client renewal period. Additionally, we
experienced net hiring in our client base during the first quarter of
2019, although at lower levels than experienced during the first quarter
Gross profit increased 14% over the first quarter of 2018 to $226.7
million, and included favorable workers' compensation and benefit cost
trends and stronger pricing. Operating expenses increased 5% over the
first quarter of 2018, while adjusted operating expenses increased 12%
to $141.3 million, and included continued investments in our growth,
technology and product and service offerings.
"Worksite employee growth in the mid-teens, combined with effective
management of pricing, direct cost programs and operating costs,
produced adjusted EBITDA and cash flow at record levels," said Douglas
S. Sharp, senior vice president of finance, chief financial officer and
treasurer. "We ended the first quarter with $141 million of adjusted
cash, up from $129 million at December 31, 2018, after the repurchase of
230,000 shares at a cost of $29 million and the payment of our regular
cash dividend totaling $12 million."
The company also announced its updated guidance for 2019, including the
second quarter of 2019. 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.
Definition of Key Metrics
Average WSEEs paid - Determined by calculating the company's cumulative
worksite employees 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 and costs associated with a one-time tax reform bonus paid
to corporate employees.
Adjusted EBITDA - Represents net income computed in accordance with
GAAP, plus interest expense, income taxes, depreciation and amortization
expense, non-cash stock-based compensation and costs associated with a
one-time tax reform bonus paid to corporate employees.
Insperity will be hosting a conference call today at 10 a.m. ET to
discuss these results, provide guidance for the second quarter and an
update to the full year guidance, and answer questions from investment
analysts. To listen in, call 877-651-0053 and use conference i.d. number
2122429. 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. 2122429. The webcast will be archived for
Insperity, a trusted advisor to America's best businesses for more than
33 years, provides an array of human resources and business solutions
designed to help improve business performance. Insperity® 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 Optimization®
solution. Additional company offerings include Traditional Payroll and
Human Capital Management, Time and Attendance, Performance Management,
Organizational Planning, Recruiting Services, Employment Screening,
Expense Management, Retirement Services and Insurance Services.
Insperity business performance solutions support more than 100,000
businesses with over 2 million employees. With 2018 revenues of $3.8
billion, Insperity operates in 74 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:
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.
CONDENSED CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF OPERATIONS
KEY FINANCIAL AND STATISTICAL DATA
Non-GAAP Financial Measures
Bonus payroll cost varies from period to period, but has no direct
impact to our ultimate workers' compensation costs under the
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'
• federal and state income tax withholdings,
• employment taxes,
• other payroll deductions, and
• client prepayments.
• costs associated with a one-time tax reform bonus paid to
• interest expense,
• income tax expense, and
• depreciation and amortization expense.
• non-cash stock based compensation, and
Following is a reconciliation of payroll cost (GAAP) to non-bonus
payroll costs (non-GAAP):
Following is a reconciliation of cash, cash equivalents and marketable
securities (GAAP) to adjusted cash, cash equivalents and marketable
Following is a reconciliation of operating expenses (GAAP) to adjusted
operating expenses (non-GAAP):
Following is a reconciliation of net income (GAAP) to EBITDA (non-GAAP)
and adjusted EBITDA (non-GAAP):
Following reconciliation of net income (GAAP) to adjusted net income
Following is a reconciliation of diluted EPS (GAAP) to adjusted EPS (non-GAAP):
The following is a reconciliation of GAAP to non-GAAP financial measures
for second quarter and full year 2019 guidance:
View source version on businesswire.com: https://www.businesswire.com/news/home/20190429005128/en/
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