Insperity announces Q1 gross profit up 22%
Adjusted net income was $21.6 million and adjusted diluted earnings per share were $0.86, a 104.8% increase over the first quarter of 2014. Reported first quarter GAAP net income and earnings per share were $13.8 million and $0.54, respectively.
The number of worksite employees paid at the end of the quarter increased 10% over the first quarter of 2014. This increase was the result of improved new client sales and client retention. Net hiring in the client base declined slightly when compared to the 2014 period.
“These record results demonstrate the earnings power of our business model as unit growth accelerated to double digits with effective client selection,” said Paul J. Sarvadi, Insperity chairman and chief executive officer. “The combination of targeted growth, proactive management of risk and operating leverage drove this third consecutive quarter of outperformance.”
Adjusted EBITDA increased 73.8% over the first quarter of 2014 on a 22.3% increase in gross profit.
“Our successful year-end transition included a 23% reduction in client attrition from the 2014 period, positively impacting worksite employee growth and average pricing during the quarter,” said Douglas S. Sharp, senior vice president of finance, chief financial officer and treasurer. “This higher average pricing, combined with low health care costs from the effective management of health plan design and lower COBRA participation, drove the better-than-expected gross profit results.”
Cash outlays in the first three months of 2015 included the repurchase of 113,050 shares of stock at a cost of $5.7 million, dividends totaling $4.8 million and capital expenditures of $2.4 million. Adjusted working capital increased by $18.3 million during the quarter to $91.4 million at March 31, 2015.