As expected, CBiz missed fourth quarter earnings-per-share estimates (See CBiz to Miss Q4 Estimates, Take $120 Million Charge). CBiz executives blamed internal issues for the company's weak finish.

Excluding the impact of all charges and Staff Accounting Bulletin 101, according to the company's earnings report, CBiz's fourth quarter net loss from continuing operations was $9.9 million, or 10 cents per share, versus last year's fourth quarter loss of $5.5 million, or 6 cents per share. For the three months ended Dec. 31, 2000, total revenue from continuing operations declined 5.4 percent to $130.2 million from $137.7 million for the fourth quarter of 1999.

For 2000, excluding the impact of all charges and SAB 101, full-year revenue was $591.4 million, an 8.2 percent increase over last year. Yearly net income from continuing operations was $4.3 million, or 5 cents per share, compared to $40.9 million, or 44 cents per share for 1999. Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations for the year was $73.5 million, compared with $98.1 million for 1999.

CBiz chief executive Steven Gerard said the 2000 earnings report was "disappointing," but reflects the impact of management changes and restructuring of the company.

"I believe the third and fourth quarter performance results came primarily from internal issues concerning direction, leadership, expense reduction, and focus and not as a result of market conditions," said Gerard, during a conference call to company analysts and investors. "In fact the market for our outsourcing businesses for mid-sized companies appears to be strong, appears to be vibrant and gives us significant potential for the future."

Jim Macdonald, an analyst with First Analysis Securities Corp. in Chicago, said the company's optimism isn't unwarranted, but the company is still in a "show me" period until they post a clean quarter.

"The fourth quarter was a clear-the-decks quarter when you have new management," he said. "I don't view this as a company that is in as much trouble as a lot (of companies) in the market."

Macdonald said that if CBiz can stabilize and keep its employees from defecting, it could pull out of its recent nosedive. He also said that the company's debt position helps out as well. Long-term debt declined in the fourth quarter by $27 million, from $145 million to $118 million, and currently stands at $112 million.

According to a company statement, CBiz set performance goals for 2001 that include growth of EBITDA to more than $90 million, EPS of at least 20 cents per share, and significant debt reduction.

"With the hiring of a new CEO, a new CFO and the restructuring of the management of our operating units, we have substantially completed the organizational structure we announced last fall," Gerard said in a prepared statement. "We are implementing a new management review process, focusing on leveraging our cross-serving activities, expanding our product offering, and continuing to aggressively manage our expense reduction program. With long-term debt to its lowest level since the fall of 1999, CBIZ has emerged from this difficult year as a smarter, leaner, and more focused organization."

-- By Dan Engel

Send comments to dane@pro2net.com.

Back to NewsLine