We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Insperity Inc | NYSE:NSP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-1.17 | -1.32% | 87.74 | 89.50 | 86.78 | 89.10 | 332,313 | 22:32:45 |
ý
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
For the quarterly period ended March 31, 2017.
|
o
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
For the transition period from _______________ to _______________
|
Delaware
|
|
76-0479645
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
19001 Crescent Springs Drive
|
|
|
Kingwood, Texas
|
|
77339
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
ý
|
Accelerated filer
o
|
Non-accelerated filer
o
|
(Do not check if a Smaller reporting company)
|
Smaller reporting company
o
|
Emerging growth company
o
|
|
|
|
TABLE OF CONTENTS
|
|
|
|
|
|
Part I
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
Part II
|
||
|
|
|
Item 1.
|
||
|
|
|
Item 1a.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 6.
|
|
|
March 31,
2017 |
|
December 31, 2016
|
||||
|
|
(Unaudited)
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
303,850
|
|
|
$
|
286,034
|
|
Restricted cash
|
|
42,458
|
|
|
42,637
|
|
||
Marketable securities
|
|
1,841
|
|
|
1,851
|
|
||
Accounts receivable, net:
|
|
|
|
|
|
|
||
Trade
|
|
4,806
|
|
|
13,107
|
|
||
Unbilled
|
|
255,734
|
|
|
254,999
|
|
||
Other
|
|
3,595
|
|
|
2,178
|
|
||
Prepaid insurance
|
|
15,097
|
|
|
15,041
|
|
||
Other current assets
|
|
23,095
|
|
|
19,526
|
|
||
Income taxes receivable
|
|
—
|
|
|
4,949
|
|
||
Total current assets
|
|
650,476
|
|
|
640,322
|
|
||
|
|
|
|
|
||||
Property and equipment:
|
|
|
|
|
|
|
||
Land
|
|
5,214
|
|
|
5,214
|
|
||
Buildings and improvements
|
|
94,038
|
|
|
90,151
|
|
||
Computer hardware and software
|
|
98,660
|
|
|
97,311
|
|
||
Software development costs
|
|
54,030
|
|
|
51,956
|
|
||
Furniture, fixtures and other
|
|
40,685
|
|
|
38,483
|
|
||
|
|
292,627
|
|
|
283,115
|
|
||
Accumulated depreciation and amortization
|
|
(204,954
|
)
|
|
(202,854
|
)
|
||
Total property and equipment, net
|
|
87,673
|
|
|
80,261
|
|
||
|
|
|
|
|
||||
Other assets:
|
|
|
|
|
|
|
||
Prepaid health insurance
|
|
9,000
|
|
|
9,000
|
|
||
Deposits – health insurance
|
|
4,700
|
|
|
4,700
|
|
||
Deposits – workers’ compensation
|
|
150,441
|
|
|
143,938
|
|
||
Goodwill and other intangible assets, net
|
|
12,963
|
|
|
13,088
|
|
||
Deferred income taxes, net
|
|
10,297
|
|
|
14,025
|
|
||
Other assets
|
|
2,978
|
|
|
1,840
|
|
||
Total other assets
|
|
190,379
|
|
|
186,591
|
|
||
Total assets
|
|
$
|
928,528
|
|
|
$
|
907,174
|
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
|
(Unaudited)
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
4,542
|
|
|
$
|
4,189
|
|
Payroll taxes and other payroll deductions payable
|
|
249,847
|
|
|
247,766
|
|
||
Accrued worksite employee payroll cost
|
|
217,188
|
|
|
215,214
|
|
||
Accrued health insurance costs
|
|
24,043
|
|
|
26,360
|
|
||
Accrued workers’ compensation costs
|
|
44,283
|
|
|
44,231
|
|
||
Accrued corporate payroll and commissions
|
|
16,821
|
|
|
40,761
|
|
||
Other accrued liabilities
|
|
25,555
|
|
|
22,437
|
|
||
Income taxes payable
|
|
8,668
|
|
|
—
|
|
||
Total current liabilities
|
|
590,947
|
|
|
600,958
|
|
||
|
|
|
|
|
||||
Noncurrent liabilities:
|
|
|
|
|
|
|||
Accrued workers’ compensation costs
|
|
146,794
|
|
|
141,291
|
|
||
Long-term debt
|
|
104,400
|
|
|
104,400
|
|
||
Total noncurrent liabilities
|
|
251,194
|
|
|
245,691
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
|
||
Common stock
|
|
277
|
|
|
277
|
|
||
Additional paid-in capital
|
|
11,817
|
|
|
9,240
|
|
||
Treasury stock, at cost
|
|
(234,225
|
)
|
|
(227,152
|
)
|
||
Retained earnings
|
|
308,518
|
|
|
278,160
|
|
||
Total stockholders’ equity
|
|
86,387
|
|
|
60,525
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
928,528
|
|
|
$
|
907,174
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Revenues (gross billings of $5.016 billion and $4.564 billion less worksite employee payroll cost of $4.133 billion and $3.762 billion, respectively)
|
|
$
|
882,664
|
|
|
$
|
802,408
|
|
|
|
|
|
|
||||
Direct costs:
|
|
|
|
|
|
|
||
Payroll taxes, benefits and workers’ compensation costs
|
|
723,318
|
|
|
652,392
|
|
||
|
|
|
|
|
||||
Gross profit
|
|
159,346
|
|
|
150,016
|
|
||
|
|
|
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
||
Salaries, wages and payroll taxes
|
|
62,457
|
|
|
58,015
|
|
||
Stock-based compensation
|
|
4,503
|
|
|
3,575
|
|
||
Commissions
|
|
4,476
|
|
|
4,281
|
|
||
Advertising
|
|
3,972
|
|
|
3,047
|
|
||
General and administrative expenses
|
|
26,192
|
|
|
23,784
|
|
||
Depreciation and amortization
|
|
4,254
|
|
|
4,271
|
|
||
|
|
105,854
|
|
|
96,973
|
|
||
Operating income
|
|
53,492
|
|
|
53,043
|
|
||
|
|
|
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
||
Interest income
|
|
465
|
|
|
299
|
|
||
Interest expense
|
|
(623
|
)
|
|
(637
|
)
|
||
Income before income tax expense
|
|
53,334
|
|
|
52,705
|
|
||
Income tax expense
|
|
17,706
|
|
|
20,012
|
|
||
Net income
|
|
$
|
35,628
|
|
|
$
|
32,693
|
|
|
|
|
|
|
||||
Less distributed and undistributed earnings allocated to participating securities
|
|
(781
|
)
|
|
(664
|
)
|
||
|
|
|
|
|
||||
Net income allocated to common shares
|
|
$
|
34,847
|
|
|
$
|
32,029
|
|
|
|
|
|
|
||||
Basic net income per share of common stock
|
|
$
|
1.69
|
|
|
$
|
1.53
|
|
|
|
|
|
|
||||
Diluted net income per share of common stock
|
|
$
|
1.69
|
|
|
$
|
1.53
|
|
|
|
Common Stock Issued
|
|
Additional Paid-In Capital
|
|
Treasury Stock
|
|
Retained Earnings
|
|
Total
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 31, 2016
|
|
27,744
|
|
|
$
|
277
|
|
|
$
|
9,240
|
|
|
$
|
(227,152
|
)
|
|
$
|
278,160
|
|
|
$
|
60,525
|
|
Purchase of treasury stock, at cost
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,317
|
)
|
|
—
|
|
|
(9,317
|
)
|
|||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
2,410
|
|
|
2,093
|
|
|
—
|
|
|
4,503
|
|
|||||
Other
|
|
—
|
|
|
—
|
|
|
167
|
|
|
151
|
|
|
2
|
|
|
320
|
|
|||||
Dividends paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,272
|
)
|
|
(5,272
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,628
|
|
|
35,628
|
|
|||||
Balance at March 31, 2017
|
|
27,744
|
|
|
$
|
277
|
|
|
$
|
11,817
|
|
|
$
|
(234,225
|
)
|
|
$
|
308,518
|
|
|
$
|
86,387
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
35,628
|
|
|
$
|
32,693
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
4,254
|
|
|
4,271
|
|
||
Amortization of marketable securities
|
|
19
|
|
|
31
|
|
||
Stock-based compensation
|
|
4,503
|
|
|
3,575
|
|
||
Deferred income taxes
|
|
3,728
|
|
|
4,978
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||
Restricted cash
|
|
179
|
|
|
(2,863
|
)
|
||
Accounts receivable
|
|
6,149
|
|
|
(34,703
|
)
|
||
Prepaid insurance
|
|
(56
|
)
|
|
(4,137
|
)
|
||
Other current assets
|
|
(3,543
|
)
|
|
(11,313
|
)
|
||
Other assets
|
|
(7,641
|
)
|
|
(3,804
|
)
|
||
Accounts payable
|
|
353
|
|
|
(168
|
)
|
||
Payroll taxes and other payroll deductions payable
|
|
2,081
|
|
|
(3,038
|
)
|
||
Accrued worksite employee payroll expense
|
|
1,974
|
|
|
105,739
|
|
||
Accrued health insurance costs
|
|
(2,317
|
)
|
|
(5,906
|
)
|
||
Accrued workers’ compensation costs
|
|
5,555
|
|
|
8,761
|
|
||
Accrued corporate payroll, commissions and other accrued liabilities
|
|
(20,822
|
)
|
|
(9,465
|
)
|
||
Income taxes payable/receivable
|
|
13,617
|
|
|
10,556
|
|
||
Total adjustments
|
|
8,033
|
|
|
62,514
|
|
||
Net cash provided by operating activities
|
|
43,661
|
|
|
95,207
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Marketable securities:
|
|
|
|
|
|
|
||
Purchases
|
|
(711
|
)
|
|
(103
|
)
|
||
Proceeds from dispositions
|
|
—
|
|
|
7,268
|
|
||
Proceeds from maturities
|
|
704
|
|
|
790
|
|
||
Property and equipment:
|
|
|
|
|
||||
Purchases
|
|
(11,567
|
)
|
|
(4,880
|
)
|
||
Net cash provided by (used in) investing activities
|
|
(11,574
|
)
|
|
3,075
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2017
|
|
2016
|
||||
Cash flows from financing activities:
|
|
|
|
|
||||
Purchase of treasury stock
|
|
$
|
(9,317
|
)
|
|
$
|
(4,768
|
)
|
Repurchase of common stock
|
|
—
|
|
|
(144,263
|
)
|
||
Dividends paid
|
|
(5,272
|
)
|
|
(4,652
|
)
|
||
Borrowings under long-term debt agreement
|
|
—
|
|
|
124,400
|
|
||
Principal repayments
|
|
—
|
|
|
(20,000
|
)
|
||
Other
|
|
318
|
|
|
311
|
|
||
Net cash used in financing activities
|
|
(14,271
|
)
|
|
(48,972
|
)
|
||
|
|
|
|
|
||||
Net increase in cash and cash equivalents
|
|
17,816
|
|
|
49,310
|
|
||
Cash and cash equivalents at beginning of period
|
|
286,034
|
|
|
269,538
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
303,850
|
|
|
$
|
318,848
|
|
1.
|
Basis of Presentation
|
2.
|
Accounting Policies
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in thousands)
|
||||||
|
|
|
|
|
||||
Beginning balance, January 1,
|
|
$
|
183,928
|
|
|
$
|
162,184
|
|
Accrued claims
|
|
16,772
|
|
|
17,787
|
|
||
Present value discount
|
|
(968
|
)
|
|
(639
|
)
|
||
Paid claims
|
|
(10,480
|
)
|
|
(8,719
|
)
|
||
Ending balance
|
|
$
|
189,252
|
|
|
$
|
170,613
|
|
|
|
|
|
|
||||
Current portion of accrued claims
|
|
$
|
42,458
|
|
|
$
|
40,282
|
|
Long-term portion of accrued claims
|
|
146,794
|
|
|
130,331
|
|
||
|
|
$
|
189,252
|
|
|
$
|
170,613
|
|
3.
|
Cash, Cash Equivalents and Marketable Securities
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
|
(in thousands)
|
||||||
Overnight holdings
|
|
|
|
|
||||
Money market funds (cash equivalents)
|
|
$
|
265,076
|
|
|
$
|
255,091
|
|
Investment holdings
|
|
|
|
|
|
|
||
Money market funds (cash equivalents)
|
|
28,167
|
|
|
28,231
|
|
||
Marketable securities
|
|
1,841
|
|
|
1,851
|
|
||
|
|
295,084
|
|
|
285,173
|
|
||
Cash held in demand accounts
|
|
24,877
|
|
|
25,758
|
|
||
Outstanding checks
|
|
(14,270
|
)
|
|
(23,046
|
)
|
||
Total cash, cash equivalents and marketable securities
|
|
$
|
305,691
|
|
|
$
|
287,885
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
303,850
|
|
|
$
|
286,034
|
|
Marketable securities
|
|
1,841
|
|
|
1,851
|
|
||
Total cash, cash equivalents and marketable securities
|
|
$
|
305,691
|
|
|
$
|
287,885
|
|
4.
|
Fair Value Measurements
|
•
|
Level 1 - quoted prices in active markets using identical assets
|
•
|
Level 2 - significant other observable inputs, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other observable inputs
|
•
|
Level 3 - significant unobservable inputs
|
|
|
Fair Value Measurements
|
||||||||||||||
|
|
(in thousands)
|
||||||||||||||
|
|
March 31,
2017 |
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
$
|
293,243
|
|
|
$
|
293,243
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Municipal bonds
|
|
1,841
|
|
|
—
|
|
|
1,841
|
|
|
—
|
|
||||
Total
|
|
$
|
295,084
|
|
|
$
|
293,243
|
|
|
$
|
1,841
|
|
|
$
|
—
|
|
|
|
Fair Value Measurements
|
||||||||||||||
|
|
(in thousands)
|
||||||||||||||
|
|
December 31,
2016 |
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
$
|
283,322
|
|
|
$
|
283,322
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Municipal bonds
|
|
1,851
|
|
|
—
|
|
|
1,851
|
|
|
—
|
|
||||
Total
|
|
$
|
285,173
|
|
|
$
|
283,322
|
|
|
$
|
1,851
|
|
|
$
|
—
|
|
5.
|
Long-Term Debt
|
6.
|
Stockholders' Equity
|
|
|
2017
|
|
2016
|
||||
|
|
(amounts per share)
|
||||||
|
|
|
|
|
||||
First quarter
|
|
$
|
0.25
|
|
|
$
|
0.22
|
|
7.
|
Net Income per Share
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2017
|
|
2016
|
||||
|
(in thousands)
|
|||||||
|
|
|
|
|
||||
Net income
|
|
$
|
35,628
|
|
|
$
|
32,693
|
|
Less distributed and undistributed earnings allocated to participating securities
|
|
(781
|
)
|
|
(664
|
)
|
||
Net income allocated to common shares
|
|
$
|
34,847
|
|
|
$
|
32,029
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding
|
|
20,565
|
|
|
20,972
|
|
||
Incremental shares from assumed LTIP awards and conversions of common stock options
|
|
101
|
|
|
6
|
|
||
Adjusted weighted average common shares outstanding
|
|
20,666
|
|
|
20,978
|
|
8.
|
Commitments and Contingencies
|
|
|
Three Months Ended
March 31, |
|||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|||||
|
|
(in thousands, except per share and statistical data)
|
|||||||||
|
|
|
|
|
|
|
|||||
Revenues (gross billings of $5.016 billion and $4.564 billion, less worksite employee payroll cost of $4.133 billion and $3.762 billion, respectively)
|
|
$
|
882,664
|
|
|
$
|
802,408
|
|
|
10.0
|
%
|
Gross profit
|
|
159,346
|
|
|
150,016
|
|
|
6.2
|
%
|
||
Operating expenses
|
|
105,854
|
|
|
96,973
|
|
|
9.2
|
%
|
||
Operating income
|
|
53,492
|
|
|
53,043
|
|
|
0.8
|
%
|
||
Other expense
|
|
(158
|
)
|
|
(338
|
)
|
|
(53.3
|
)%
|
||
Net income
|
|
35,628
|
|
|
32,693
|
|
|
9.0
|
%
|
||
Diluted net income per share of common stock
|
|
1.69
|
|
|
1.53
|
|
|
10.5
|
%
|
||
Adjusted net income
(1)
|
|
38,636
|
|
|
34,911
|
|
|
10.7
|
%
|
||
Adjusted diluted net income per share of common stock
(1)
|
|
1.84
|
|
|
1.63
|
|
|
12.9
|
%
|
||
Adjusted EBITDA
(1)
|
|
62,714
|
|
|
61,188
|
|
|
2.5
|
%
|
||
|
|
|
|
|
|
|
|||||
Statistical Data:
|
|
|
|
|
|
|
|
|
|
||
Average number of worksite employees paid per month
|
|
174,354
|
|
|
158,391
|
|
|
10.1
|
%
|
||
Revenues per worksite employee per month
(2)
|
|
$
|
1,687
|
|
|
$
|
1,689
|
|
|
(0.1
|
)%
|
Gross profit per worksite employee per month
|
|
305
|
|
|
316
|
|
|
(3.5
|
)%
|
||
Operating expenses per worksite employee per month
|
|
202
|
|
|
204
|
|
|
(1.0
|
)%
|
||
Operating income per worksite employee per month
|
|
102
|
|
|
112
|
|
|
(8.9
|
)%
|
||
Net income per worksite employee per month
|
|
68
|
|
|
69
|
|
|
(1.4
|
)%
|
(1)
|
Please read “Non-GAAP Financial Measures” for a reconciliation of the non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with GAAP.
|
(2)
|
Gross billings of
$9,589
and
$9,606
per worksite employee per month, less payroll cost of
$7,902
and
$7,917
per worksite employee per month, respectively.
|
|
|
Three Months Ended
March 31, |
|
Three Months Ended
March 31, |
|||||||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|||||||
|
|
(in thousands)
|
|
(% of total revenue)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
Northeast
|
|
$
|
236,100
|
|
|
$
|
208,655
|
|
|
13.2
|
%
|
|
27.2
|
%
|
|
26.4
|
%
|
Southeast
|
|
98,806
|
|
|
81,269
|
|
|
21.6
|
%
|
|
11.4
|
%
|
|
10.3
|
%
|
||
Central
|
|
142,777
|
|
|
127,006
|
|
|
12.4
|
%
|
|
16.4
|
%
|
|
16.1
|
%
|
||
Southwest
|
|
204,107
|
|
|
189,310
|
|
|
7.8
|
%
|
|
23.5
|
%
|
|
24.0
|
%
|
||
West
|
|
187,444
|
|
|
183,712
|
|
|
2.0
|
%
|
|
21.5
|
%
|
|
23.2
|
%
|
||
|
|
869,234
|
|
|
789,952
|
|
|
10.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
||
Other revenue
(1)
|
|
13,430
|
|
|
12,456
|
|
|
7.8
|
%
|
|
|
|
|
||||
Total revenue
|
|
$
|
882,664
|
|
|
$
|
802,408
|
|
|
10.0
|
%
|
|
|
|
|
•
|
Benefits costs
– The cost of group health insurance and related employee benefits
increased
$20
per worksite employee per month, or
4.3%
on a cost per covered employee basis, compared to the first
three
months of
2016
. Included in
2017
benefits costs is a charge of
$1.7 million
, or
$3
per worksite employee per month, for changes in estimated claim run-off related to prior periods. Benefits costs incurred in the first
three
months of
2016
reflect reductions in estimated claims run-off related to prior periods of
$2.4 million
, or
$5
per worksite employee per month. The percentage of worksite employees covered under our health insurance plans was
69.5%
in the
2017
period compared to
70.2%
in the
2016
period. Please read
Note 2
to the Consolidated Financial Statements, “
Accounting Policies
– Health Insurance Costs,” for a discussion of our accounting for health insurance costs.
|
•
|
Workers’ compensation costs
– Workers’ compensation costs
decreased
7.0%
, or
$7
per worksite employee per month, compared to the first
three
months of
2016
. In the first
three
months of
2017
, we recorded reductions in workers’ compensation costs of
$3.9 million
, or
0.11%
of non-bonus payroll costs, for changes in estimated losses related to prior reporting periods. As a percentage of non-bonus payroll cost, workers’ compensation costs were
0.56%
in the
2017
period compared to
0.67%
in the
2016
period. Please read
Note 2
to the Consolidated Financial Statements, “
Accounting Policies
– Workers’ Compensation Costs,” for a discussion of our accounting for workers’ compensation costs.
|
•
|
Payroll tax costs
– Payroll taxes
increased
9.5%
due primarily to a
9.9%
increase
in payroll costs, but
decreased
$4
on a per worksite employee per month basis, compared to the first
three
months of
2016
. Payroll taxes as a percentage of payroll costs were
8.6%
in both the
2017
and
2016
periods.
|
|
|
Three Months Ended March 31,
|
|
Three Months Ended March 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
|
(in thousands)
|
|
(per worksite employee per month)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Salaries, wages and payroll taxes
|
|
$
|
62,457
|
|
|
$
|
58,015
|
|
|
7.7
|
%
|
|
$
|
119
|
|
|
$
|
122
|
|
|
(2.5
|
)%
|
Stock-based compensation
|
|
4,503
|
|
|
3,575
|
|
|
26.0
|
%
|
|
9
|
|
|
8
|
|
|
12.5
|
%
|
||||
Commissions
|
|
4,476
|
|
|
4,281
|
|
|
4.6
|
%
|
|
8
|
|
|
9
|
|
|
(11.1
|
)%
|
||||
Advertising
|
|
3,972
|
|
|
3,047
|
|
|
30.4
|
%
|
|
8
|
|
|
6
|
|
|
33.3
|
%
|
||||
General and administrative expenses
|
|
26,192
|
|
|
23,784
|
|
|
10.1
|
%
|
|
50
|
|
|
50
|
|
|
—
|
|
||||
Depreciation and amortization
|
|
4,254
|
|
|
4,271
|
|
|
(0.4
|
)%
|
|
8
|
|
|
9
|
|
|
(11.1
|
)%
|
||||
Total operating expenses
|
|
$
|
105,854
|
|
|
$
|
96,973
|
|
|
9.2
|
%
|
|
$
|
202
|
|
|
$
|
204
|
|
|
(1.0
|
)%
|
•
|
Salaries, wages and payroll taxes of corporate and sales staff
increased
7.7%
, but
decreased
$3
on a per worksite employee per month basis, compared to the
2016
period. This increase was primarily due to an
8.1%
increase in corporate headcount, including a
11.0%
increase in the number of Business Performance Advisors.
|
•
|
Stock-based compensation
increased
$0.9 million or
26.0%
, approximately
$1
per worksite employee per month, compared to the
2016
period. This increase was primarily due to additional annual awards issued under the our Long-Term Incentive Program.
|
•
|
Commissions expense
increased
4.6%
, but decreased
$1
on a per worksite employee per month basis, compared to the
2016
period.
|
•
|
Advertising costs
increased
$0.9 million or
30.4%
, approximately
$2
per worksite employee per month, compared to the
2016
period, primarily due to timing of business promotions and sponsorships incurred earlier in the year for 2017 compared to 2016.
|
•
|
General and administrative expenses
increased
10.1%
, but remained consistent on a per worksite employee per month basis compared to the
2016
period.
|
•
|
Depreciation and amortization expense
decreased
0.4%
, or
$1
per worksite employee per month, compared to the
2016
period.
|
|
|
Three Months Ended
March 31, |
|||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|||||
|
|
(in thousands, except per worksite employee per month data)
|
|||||||||
GAAP to non-GAAP reconciliation:
|
|
|
|
|
|
|
|||||
Payroll cost (GAAP)
|
|
$
|
4,132,992
|
|
|
$
|
3,762,064
|
|
|
9.9
|
%
|
Less: Bonus payroll cost
|
|
615,258
|
|
|
582,312
|
|
|
5.7
|
%
|
||
Non-bonus payroll cost
|
|
$
|
3,517,734
|
|
|
$
|
3,179,752
|
|
|
10.6
|
%
|
|
|
|
|
|
|
|
|||||
Payroll cost per worksite employee per month (GAAP)
|
|
$
|
7,902
|
|
|
$
|
7,917
|
|
|
(0.2
|
)%
|
Less: Bonus payroll cost per worksite employee per month
|
|
1,177
|
|
|
1,225
|
|
|
(3.9
|
)%
|
||
Non-bonus payroll cost per worksite employee per month
|
|
$
|
6,725
|
|
|
$
|
6,692
|
|
|
0.5
|
%
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
|
(in thousands)
|
||||||
|
|
|
|
|
||||
Cash, cash equivalents and marketable securities (GAAP)
|
|
$
|
305,691
|
|
|
$
|
287,885
|
|
Less: Amounts payable for withheld federal and state income taxes, employment taxes and other payroll deductions
|
|
232,372
|
|
|
221,710
|
|
||
Customer prepayments
|
|
10,457
|
|
|
21,256
|
|
||
Adjusted cash, cash equivalents and marketable securities
|
|
$
|
62,862
|
|
|
$
|
44,919
|
|
|
|
Three Months Ended
March 31, |
|||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|||||
|
|
(in thousands, except per worksite employee per month data)
|
|||||||||
|
|
|
|
|
|
|
|||||
Net income (GAAP)
|
|
$
|
35,628
|
|
|
$
|
32,693
|
|
|
9.0
|
%
|
Income tax expense
|
|
17,706
|
|
|
20,012
|
|
|
(11.5
|
)%
|
||
Interest expense
|
|
623
|
|
|
637
|
|
|
(2.2
|
)%
|
||
Depreciation and amortization
|
|
4,254
|
|
|
4,271
|
|
|
(0.4
|
)%
|
||
EBITDA
|
|
58,211
|
|
|
57,613
|
|
|
1.0
|
%
|
||
Stock-based compensation
|
|
4,503
|
|
|
3,575
|
|
|
26.0
|
%
|
||
Adjusted EBITDA
|
|
$
|
62,714
|
|
|
$
|
61,188
|
|
|
2.5
|
%
|
|
|
|
|
|
|
|
|||||
Net income per worksite employee per month (GAAP)
|
|
$
|
68
|
|
|
$
|
69
|
|
|
(1.4
|
)%
|
Income tax expense per worksite employee per month
|
|
34
|
|
|
42
|
|
|
(19.0
|
)%
|
||
Interest expense per worksite employee per month
|
|
1
|
|
|
1
|
|
|
—
|
|
||
Depreciation and amortization per worksite employee per month
|
|
8
|
|
|
9
|
|
|
(11.1
|
)%
|
||
EBITDA per worksite employee per month
|
|
111
|
|
|
121
|
|
|
(8.3
|
)%
|
||
Stock-based compensation per worksite employee per month
|
|
9
|
|
|
8
|
|
|
12.5
|
%
|
||
Adjusted EBITDA per worksite employee per month
|
|
$
|
120
|
|
|
$
|
129
|
|
|
(7.0
|
)%
|
|
|
Three Months Ended
March 31, |
|||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|||||
|
|
(in thousands)
|
|||||||||
|
|
|
|
|
|
|
|||||
Net income (GAAP)
|
|
$
|
35,628
|
|
|
$
|
32,693
|
|
|
9.0
|
%
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|||||
Stock-based compensation
|
|
4,503
|
|
|
3,575
|
|
|
26.0
|
%
|
||
Tax effect
|
|
(1,495
|
)
|
|
(1,357
|
)
|
|
10.2
|
%
|
||
Adjusted net income (non-GAAP)
|
|
$
|
38,636
|
|
|
$
|
34,911
|
|
|
10.7
|
%
|
|
|
Three Months Ended
March 31, |
|||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|||||
|
|
(in thousands)
|
|||||||||
|
|
|
|
|
|
|
|||||
Diluted net income per share of common stock (GAAP)
|
|
$
|
1.69
|
|
|
$
|
1.53
|
|
|
10.5
|
%
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|||||
Stock-based compensation
|
|
0.22
|
|
|
0.17
|
|
|
29.4
|
%
|
||
Tax effect
|
|
(0.07
|
)
|
|
(0.07
|
)
|
|
—
|
|
||
Adjusted diluted net income per share of common stock
|
|
$
|
1.84
|
|
|
$
|
1.63
|
|
|
12.9
|
%
|
•
|
Timing of client payments / payroll levels –
We typically collect our comprehensive service fee, along with the client’s payroll funding, from clients at least one day prior to the payment of worksite employee payrolls and associated payroll taxes. Therefore, the last business day of a reporting period has a substantial impact on our reporting of operating cash flows. For example, many worksite employees are paid on Fridays; therefore, operating cash flows decrease in the reporting periods that end on a Friday or a Monday. In the period ended
March 31, 2017
, the last business day of the reporting period was a
Friday
, client prepayments were
$10.5 million
and accrued worksite employee payroll was
$217.2 million
. In the period ended March 31, 2016, the last business day of the reporting period was a Thursday, client prepayments were $99.2 million and accrued worksite employee payroll was $267.7 million.
|
•
|
Workers’ compensation plan funding –
Under our workers’ compensation insurance arrangements, we make monthly payments to the carriers comprised of premium costs and funds to be set aside for payment of future claims (“claim funds”). These pre-determined amounts are stipulated in our agreements with the carriers, and are based primarily on anticipated worksite employee payroll levels and workers’ compensation loss rates during the policy year. Changes in payroll levels from those that were anticipated in the arrangements can result in changes in the amount of cash payments, which will impact our reporting of operating cash flows. Our claim funds paid, based upon anticipated worksite employee payroll levels and workers’ compensation loss rates, were
$16.3 million
in the first
three
months of
2017
and
$14.7 million
in the first
three
months of
2016
. However, our estimate of workers’ compensation incurred claims was
$15.8 million
in the
2017
period and
$17.1 million
in the
2016
period.
|
•
|
Medical plan funding –
Our health care contract with United establishes participant cash funding rates
90
days in advance of the beginning of a reporting quarter. Therefore, changes in the participation level of the United plan have a direct impact on our operating cash flows. In addition, changes to the funding rates, which are solely determined by United based primarily upon recent claim history and anticipated cost trends, also have a significant impact on our operating cash flows. As of
March 31, 2017
, premiums owed and cash funded to United have exceeded the costs of the United plan, resulting in a
$11.9 million
surplus,
$2.9 million
of which is reflected as a current asset, and
$9.0 million
of which is reflected as a long-term asset on our Consolidated Balance Sheets. The premiums, including additional quarterly premium, owed to United at
March 31, 2017
, were $19.9 million, which is included in accrued health insurance costs, a current liability, on our Consolidated Balance Sheets.
|
•
|
Operating results
– Our adjusted net income has a significant impact on our operating cash flows. Our adjusted net income
increased
10.7%
to
$38.6 million
in the
three months ended March 31, 2017
, compared to
$34.9 million
in the
three months ended March 31, 2016
, due to higher gross profit. Please read “Results of Operations
–
Three Months Ended March 31, 2017
Compared to
Three Months Ended March 31, 2016
.”
|
Period |
|
Total Number of Shares Purchased
(1)(2)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Announced Programs
(2)
|
|
Maximum Number of Shares Available for Purchase under Announced Program
(2)
|
|||||
|
|
|
|
|
|
|
|
|
|||||
01/01/2017 – 01/31/2017
|
|
28,481
|
|
|
$
|
69.82
|
|
|
28,481
|
|
|
1,107,788
|
|
02/01/2017 – 02/28/2017
|
|
61,833
|
|
|
84.30
|
|
|
—
|
|
|
1,107,788
|
|
|
03/01/2017 – 03/31/2017
|
|
24,254
|
|
|
87.25
|
|
|
—
|
|
|
1,107,788
|
|
|
Total
|
|
114,568
|
|
|
$
|
81.32
|
|
|
28,481
|
|
|
|
(1)
|
During the three months ended
March 31, 2017
,
86,087
shares of restricted stock were withheld to satisfy tax-withholding obligations arising in conjunction with the vesting of restricted stock. The required withholding is calculated using the closing sales price reported by the New York Stock Exchange on the date prior to the applicable vesting date. These shares are not subject to the repurchase program described above.
|
(2)
|
Our Board of Directors (the “Board”) has approved a program to repurchase shares of our outstanding common stock. During the three months ended
March 31, 2017
,
28,481
shares were repurchased under the program. As of
March 31, 2017
, we were authorized to repurchase an additional
1,107,788
shares under the program. Unless terminated earlier by resolution of the Board, the repurchase program will expire when we have repurchased all shares authorized for repurchase under the repurchase program.
|
|
(a)
|
List of Exhibits
|
|
31.1
|
*
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
*
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
**
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
**
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
*
|
XBRL Instance Document.
(1)
|
101.SCH
|
*
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
*
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
*
|
XBRL Extension Definition Linkbase Document.
|
101.LAB
|
*
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
*
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
____________________________________
|
|
|
|
*
|
Filed with this report.
|
|
|
|
|
|
|
**
|
Furnished with this report.
|
(1)
|
Attached as exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Operations for the
three
month periods ended
March 31, 2017
and
2016
; (ii) the Consolidated Balance Sheets at
March 31, 2017
and
December 31, 2016
; (iii) the Consolidated Statement of Stockholders’ Equity for the
three
month period ended
March 31, 2017
; (iv) the Consolidated Statements of Cash Flows for the
three
month periods ended
March 31, 2017
and
2016
; and (v) Notes to the Consolidated Financial Statements.
|
|
Insperity, Inc.
|
|
|
|
|
Date: May 1, 2017
|
By:
|
/s/ Douglas S. Sharp
|
|
|
Douglas S. Sharp
|
|
|
Senior Vice President of Finance,
|
|
|
Chief Financial Officer and Treasurer
|
|
|
(Principal Financial Officer)
|
1 Year Insperity Chart |
1 Month Insperity Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions