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Insperity announces Q1 results

“We exceeded our first quarter earnings expectations during a weak economy, soft labor market and repeated delays and changes to health care reform,” said Paul J. Sarvadi, Insperity chairman and chief executive officer. “Our momentum for both core and mid-market sales, coupled with our plan to align operating expenses, establishes a solid foundation for growth for the balance of the year and operating leverage into 2015.”

Revenues for the first quarter of 2014 increased 4.1% over the first quarter of 2013 to $637.0 million, due to a 2.3% increase in the average number of worksite employees paid per month and a 1.7% increase in revenues per worksite employee per month. Gross profit decreased 1.8% compared to the first quarter of 2013 to $106.2 million, due primarily to an expected higher deficit in the benefits cost center.

Operating expenses increased 4.0% over the first quarter of 2013 to $89.6 million and included the impact of Business Performance Advisors hired throughout 2013, implementation of our health care reform strategy and recent technology investments. Operating expenses per worksite employee per month increased $3, or 1.3%, to $236 in the first quarter of 2014 from $233 in the 2013 period.

“During the quarter we generated adjusted EBITDA of $24.3 million, repurchased 469,456 shares at a cost of $13.9 million and paid quarterly dividends of $4.4 million,” said Douglas S. Sharp, senior vice-president of finance, chief financial officer and treasurer. “We ended the quarter with working capital of $123.1 million and no debt, allowing us to continue to invest in the business and return capital to stockholders through share repurchases and dividends.”

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