10/31/2024 | Press release | Distributed by Public on 10/31/2024 06:16
Q4 2024 | Full Year 2024 | |||||
Average WSEEs paid | 308,800 | - | 311,900 | 307,400 | - | 308,100 |
Year-over-year decrease | (2.0)% | - | (1.0)% | (1.5)% | - | (1.3)% |
Adjusted EPS | $(0.10) | - | $0.12 | $3.42 | - | $3.66 |
Year-over-year decrease | (113)% | - | (84)% | (38)% | - | (34)% |
Adjusted EBITDA (in millions) | $15 | - | $27 | $262 | - | $274 |
Year-over-year decrease | (73)% | - | (52)% | (26)% | - | (23)% |
SUMMARY FINANCIAL INFORMATION
|
(Unaudited) | September 30, 2024 | December 31, 2023 | ||
(in millions) | ||||
Assets | ||||
Cash and cash equivalents | $ | 470 | $ | 693 |
Restricted cash | 67 | 57 | ||
Marketable securities | 16 | 16 | ||
Accounts receivable, net | 765 | 694 | ||
Prepaid insurance and related assets | 31 | 7 | ||
Other current assets | 84 | 128 | ||
Total current assets | 1,433 | 1,595 | ||
Property and equipment, net | 190 | 197 | ||
Right-of-use leased assets | 66 | 57 | ||
Deposits and prepaid health insurance | 192 | 215 | ||
Goodwill and other intangible assets, net | 13 | 13 | ||
Deferred income taxes, net | 19 | 20 | ||
Other assets | 20 | 23 | ||
Total assets | $ | 1,933 | $ | 2,120 |
Liabilities and stockholders' equity | ||||
Accounts payable | $ | 6 | $ | 11 |
Payroll taxes and other payroll deductions payable | 297 | 566 | ||
Accrued worksite employee payroll cost | 650 | 559 | ||
Accrued health insurance costs | 46 | 46 | ||
Accrued workers' compensation costs | 70 | 60 | ||
Accrued corporate payroll and commissions | 79 | 64 | ||
Other accrued liabilities | 85 | 130 | ||
Total current liabilities | 1,233 | 1,436 | ||
Accrued workers' compensation costs, net of current | 140 | 163 | ||
Long-term debt | 369 | 369 | ||
Operating lease liabilities, net of current | 66 | 58 | ||
Total noncurrent liabilities | 575 | 590 | ||
Stockholders' equity: | ||||
Common stock | 1 | 1 | ||
Additional paid-in capital | 208 | 185 | ||
Treasury stock, at cost | (853) | (831) | ||
Retained earnings | 769 | 739 | ||
Total stockholders' equity | 125 | 94 | ||
Total liabilities and stockholders' equity | $ | 1,933 | $ | 2,120 |
SUMMARY FINANCIAL INFORMATION
|
(Unaudited) |
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||
(in millions, except per share amounts) | 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||
Operating results: | ||||||||||||
Revenues(1)
|
$ | 1,561 | $ | 1,551 | 1 | % | $ | 4,968 | $ | 4,906 | 1 | % |
Payroll taxes, benefits and workers' compensation costs | 1,332 | 1,293 | 3 | % | 4,134 | 4,091 | 1 | % | ||||
Gross profit | 229 | 258 | (11) | % | 834 | 815 | 2 | % | ||||
Salaries, wages and payroll taxes | 127 | 114 | 11 | % | 393 | 349 | 13 | % | ||||
Stock-based compensation | 17 | 16 | 6 | % | 47 | 42 | 12 | % | ||||
Commissions | 11 | 11 | - | 34 | 34 | - | ||||||
Advertising | 9 | 7 | 29 | % | 28 | 30 | (7) | % | ||||
General and administrative expenses | 53 | 40 | 33 | % | 167 | 132 | 27 | % | ||||
Depreciation and amortization | 11 | 11 | - | 33 | 32 | 3 | % | |||||
Total operating expenses | 228 | 199 | 15 | % | 702 | 619 | 13 | % | ||||
Operating income | 1 | 59 | (98) | % | 132 | 196 | (33) | % | ||||
Other income (expense): | ||||||||||||
Interest income | 9 | 9 | - | 28 | 25 | 12 | % | |||||
Interest expense | (7) | (7) | - | (21) | (20) | 5 | % | |||||
Income before income tax expense | 3 | 61 | (95) | % | 139 | 201 | (31) | % | ||||
Income tax expense | - | 16 | (100) | % | 39 | 49 | (20) | % | ||||
Net income | $ | 3 | $ | 45 | (93) | % | $ | 100 | $ | 152 | (34) | % |
Net income per share of common stock
|
||||||||||||
Basic | $ | 0.07 | $ | 1.17 | (94) | % | $ | 2.65 | $ | 4.00 | (34) | % |
Diluted | $ | 0.07 | $ | 1.16 | (94) | % | $ | 2.63 | $ | 3.94 | (33) | % |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
(in millions)
|
2024 | 2023 | 2024 | 2023 | ||||
Gross billings
|
$ | 10,291 | $ | 10,067 | $ | 32,135 | $ | 31,763 |
Less: WSEE payroll cost
|
8,730 | 8,516 | 27,167 | 26,857 | ||||
Revenues
|
$ | 1,561 | $ | 1,551 | $ | 4,968 | $ | 4,906 |
SUMMARY FINANCIAL INFORMATION
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||
2024 | 2023 | Change | 2024 | 2023 | Change | |||||||
Average WSEEs paid | 309,088 | 315,340 | (2) | % | 306,650 | 311,112 | (1) | % | ||||
Statistical data (per WSEE per month):
|
||||||||||||
Revenues(1)
|
$ | 1,683 | $ | 1,639 | 3 | % | $ | 1,800 | $ | 1,752 | 3 | % |
Gross profit | 247 | 273 | (10) | % | 302 | 291 | 4 | % | ||||
Operating expenses | 246 | 210 | 17 | % | 254 | 221 | 15 | % | ||||
Operating income | 1 | 63 | (98) | % | 48 | 70 | (31) | % | ||||
Net income | 3 | 47 | (94) | % | 36 | 54 | (33) | % |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
(per WSEE per month) | 2024 | 2023 | 2024 | 2023 | ||||
Gross billings | $ | 11,098 | $ | 10,642 | $ | 11,644 | $ | 11,344 |
Less: WSEE payroll cost
|
9,415 | 9,003 | 9,844 | 9,592 | ||||
Revenues | $ | 1,683 | $ | 1,639 | $ | 1,800 | $ | 1,752 |
SUMMARY FINANCIAL INFORMATION
|
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. |
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.
|
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(in millions, except per WSEE per month) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
Per WSEE | Per WSEE | Per WSEE | Per WSEE | |||||||||||||
Payroll cost
|
$ | 8,730 | $ | 9,415 | $ | 8,516 | $ | 9,003 | $ | 27,167 | $ | 9,844 | $ | 26,857 | $ | 9,592 |
Less: Bonus payroll cost
|
704 | 759 | 529 | 560 | 3,411 | 1,236 | 3,344 | 1,195 | ||||||||
Non-bonus payroll cost
|
$ | 8,026 | $ | 8,656 | $ | 7,987 | $ | 8,443 | $ | 23,756 | $ | 8,608 | $ | 23,513 | $ | 8,397 |
Payroll cost % change period over period
|
3 | % | 5 | % | 5 | % | 1 | % | 1 | % | 3 | % | 9 | % | 2 | % |
Non-bonus payroll cost % change period over period
|
- | 3 | % | 6 | % | 2 | % | 1 | % | 3 | % | 10 | % | 3 | % |
SUMMARY FINANCIAL INFORMATION
|
(in millions) |
September 30, 2024 |
December 31, 2023 |
||
Cash, cash equivalents and marketable securities
|
$ | 486 | $ | 709 |
Less:
|
||||
Amounts payable for withheld federal and state income taxes, employment taxes and other payroll deductions
|
255 | 510 | ||
Client prepayments | 19 | 28 | ||
Adjusted cash, cash equivalents and marketable securities
|
$ | 212 | $ | 171 |
(in millions, except per WSEE per month) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Per WSEE | Per WSEE | Per WSEE | Per WSEE | |||||||||||||
Net income
|
$ | 3 | $ | 3 | $ | 45 | $ | 47 | $ | 100 | $ | 36 | $ | 152 | $ | 54 |
Income tax expense
|
- | - | 16 | 19 | 39 | 13 | 49 | 18 | ||||||||
Interest expense
|
7 | 8 | 7 | 7 | 21 | 8 | 20 | 7 | ||||||||
Amortization of SaaS implementation costs | 1 | 1 | - | - | 7 | 3 | 3 | 1 | ||||||||
Depreciation and amortization
|
11 | 12 | 11 | 11 | 33 | 12 | 32 | 11 | ||||||||
EBITDA
|
22 | 24 | 79 | 84 | 200 | 72 | 256 | 91 | ||||||||
Stock-based compensation
|
17 | 18 | 16 | 16 | 47 | 17 | 42 | 15 | ||||||||
Adjusted EBITDA
|
$ | 39 | $ | 42 | $ | 95 | $ | 100 | $ | 247 | $ | 89 | $ | 298 | $ | 106 |
Net income % change period over period | (93) | % | (94) | % | 18 | % | 15 | % | (34) | % | (33) | % | 8 | % | - | |
Adjusted EBITDA % change period over period | (59) | % | (58) | % | 18 | % | 14 | % | (17) | % | (16) | % | 9 | % | 2 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
(in millions) | 2024 | 2023 | 2024 | 2023 | ||||
Net income | $ | 3 | $ | 45 | $ | 100 | $ | 152 |
Non-GAAP adjustments: | ||||||||
Stock-based compensation | 17 | 16 | 47 | 42 | ||||
Tax effect | (5) | (6) | (13) | (11) | ||||
Total non-GAAP adjustments, net | 12 | 10 | 34 | 31 | ||||
Adjusted net income | $ | 15 | $ | 55 | $ | 134 | $ | 183 |
Net income % change period over period | (93) | % | 18 | % | (34) | % | 8 | % |
Adjusted net income % change period over period | (73) | % | 17 | % | (27) | % | 8 | % |
SUMMARY FINANCIAL INFORMATION
|
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Diluted EPS
|
$ | 0.07 | $ | 1.16 | $ | 2.63 | $ | 3.94 |
Non-GAAP adjustments:
|
||||||||
Stock-based compensation | 0.45 | 0.40 | 1.24 | 1.08 | ||||
Tax effect | (0.13) | (0.10) | (0.34) | (0.26) | ||||
Total non-GAAP adjustments, net | 0.32 | 0.30 | 0.90 | 0.82 | ||||
Adjusted EPS | $ | 0.39 | $ | 1.46 | $ | 3.53 | $ | 4.76 |
Diluted EPS % change period over period | (94) | % | 18 | % | (33) | % | 8 | % |
Adjusted EPS % change period over period | (73) | % | 19 | % | (26) | % | 9 | % |
SUMMARY FINANCIAL INFORMATION
|
Q4 2024 | Full Year 2024 | |
(in millions, except per share amounts) | Guidance | Guidance |
Net income
|
$(13) - $(5) | $86 - $95 |
Income tax expense
|
(6) - (2) | 33 - 36 |
Interest expense
|
7 | 28 |
SaaS implementation amortization | 3 | 11 |
Depreciation and amortization
|
10 | 43 |
EBITDA
|
1 - 13 | 201 - 213 |
Stock-based compensation
|
14 | 61 |
Adjusted EBITDA
|
$15 - $27 | $262 - $274 |
Diluted EPS
|
$(0.36) - $(0.14) | $2.26 - $2.50 |
Non-GAAP adjustments:
|
||
Stock-based compensation
|
0.37 | 1.61 |
Tax effect | (0.11) | (0.45) |
Total non-GAAP adjustments, net | 0.26 | 1.16 |
Adjusted EPS
|
$(0.10) - $0.12 | $3.42 - $3.66 |