Insperity announces second quarter results
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 second quarter and six months ended june 30, 2014. for the second quarter, the company reported adjusted net income of $3.5 million and adjusted diluted earnings per share of $0.13. adjusted net income excludes an after-tax non-cash impairment charge of $1.6 million, or $0.06 per share, associated with the reorganization of our employment screening business. reported second quarter net income and earnings per share were $1.9 million and $0.07, respectively. “we are pleased with our second quarter results and the traction we are gaining in sales of several of our new service offerings,” said paul j. sarvadi, insperity chairman and chief executive officer. “we are well positioned for accelerating unit growth over the balance of the year and into 2015.” second quarter results revenues for the second quarter of 2014 increased 3.2% over the second quarter of 2013 to $564.6 million, due to a 1.2% increase in the average number of worksite employees paid per month and a 1.9% increase in revenues per worksite employee per month. gross profit decreased 2.3% as expected compared to the second quarter of 2013 to $95.5 million. benefits costs per covered employee per month increased by 5.0% over the second quarter of 2013 and included increased taxes associated with the affordable care act. adjusted operating expenses excluding the impact of the $2.5 million impairment charge increased 2.3% over the second quarter of 2013 to $89.6 million. year-to-date results for the six months ended june 30, 2014, the company reported adjusted net income of $13.0 million and adjusted diluted earnings per share of $0.51. these earnings exclude after-tax costs of $1.6 million or $0.06 per share associated with the non-cash impairment charge. reported net income for the six months ended june 30, 2014 was $11.5 million, or $0.45 per diluted share. year-to-date revenues were $1.2 billion, an increase of 3.7% compared to the 2013 period. gross profit for the six months ended june 30, 2014 decreased 2.1% to $201.6 million. the average gross profit per worksite employee per month decreased $10, or 3.6%, to $264 in the 2014 period from $274 in the 2013 period. adjusted year-to-date operating expenses excluding the impact of the impairment charge, increased 3.2% over the first six months of 2013 to $179.1 million, approximately $6 million below initial 2014 guidance provided by the company. these expenses include investments made over the course of 2013, including a 15.6% year-over-year increase in the average number of trained business performance advisors, and a $2.0 million investment in human capital management technology. “we continue to invest in areas important to our long-term strategy, including sales, technology and product development, while managing other areas of the business to better align operating costs with projected unit growth,” said douglas s. sharp, senior vice-president of finance, chief financial officer and treasurer. adjusted ebitda was $38.9 million in the first six months of 2014. cash outlays included the repurchase of 496,226 shares at a cost of $14.7 million, dividends of $9.2 million and capital expenditures of $6.6 million. working capital at june 30, 2014 was $121.6 million. insperity will be hosting a conference call today at 10 a.m. et to discuss these results, give guidance for the third quarter and full year 2014 and answer questions from investment analysts. to listen in, call 877-651-0053 and use conference i.d. number 65075498. 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. 65075498. the webcast will be archived for one year. insperity, a trusted advisor to america’s best businesses for more than 28 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 human capital management, payroll services, time and attendance, performance management, organizational planning, recruiting services, employment screening, financial services, expense management, retirement services and insurances services. insperity business performance solutions support more than 100,000 businesses with over 2 million employees. with 2013 revenues of $2.3 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 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 in accurate. 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) adverse 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 and federal 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; (x) failure of our information technology systems; and (xi) 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. - - - - - month(1) (1) gross billings of $8,526, $8,332, $8,994 and $8,663 per worksite employee per month, less payroll cost of $7,059, $6,892, % % - - - - % % adjusted operating expenses represent operating expenses excluding the impact of impairment charges. -
