ý
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the quarterly period ended June 30, 2017.
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o
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from _______________ to _______________
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Delaware
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76-0479645
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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19001 Crescent Springs Drive
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Kingwood, Texas
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77339
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
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(Do not check if a Smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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TABLE OF CONTENTS
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Part I
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Part II
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Item 1.
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Item 1a.
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Item 2.
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Item 6.
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June 30,
2017 |
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December 31, 2016
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||||
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(Unaudited)
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|
||||
Current assets:
|
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|
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||||
Cash and cash equivalents
|
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$
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241,890
|
|
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$
|
286,034
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|
Restricted cash
|
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41,703
|
|
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42,637
|
|
||
Marketable securities
|
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1,929
|
|
|
1,851
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|
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Accounts receivable, net:
|
|
|
|
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|
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Trade
|
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2,775
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13,107
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Unbilled
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255,184
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254,999
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Other
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3,610
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2,178
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Prepaid insurance
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27,070
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15,041
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Other current assets
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17,993
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19,526
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Income taxes receivable
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6,878
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4,949
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Total current assets
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599,032
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640,322
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Property and equipment:
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Land
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6,215
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5,214
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Buildings and improvements
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94,318
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90,151
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Computer hardware and software
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101,003
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97,311
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Software development costs
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56,584
|
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|
51,956
|
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Furniture, fixtures and other
|
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41,826
|
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38,483
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299,946
|
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283,115
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Accumulated depreciation and amortization
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(207,288
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)
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(202,854
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)
|
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Total property and equipment, net
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92,658
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80,261
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Other assets:
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Prepaid health insurance
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9,000
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9,000
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Deposits – health insurance
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5,300
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4,700
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Deposits – workers’ compensation
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157,850
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143,938
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Goodwill and other intangible assets, net
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12,838
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13,088
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Deferred income taxes, net
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5,560
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14,025
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Other assets
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3,650
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1,840
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Total other assets
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194,198
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186,591
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Total assets
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$
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885,888
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$
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907,174
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June 30,
2017 |
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December 31,
2016 |
||||
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(Unaudited)
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Current liabilities:
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Accounts payable
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$
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3,132
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$
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4,189
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Payroll taxes and other payroll deductions payable
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189,940
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247,766
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Accrued worksite employee payroll cost
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228,556
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215,214
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Accrued health insurance costs
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26,579
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26,360
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Accrued workers’ compensation costs
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43,939
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44,231
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Accrued corporate payroll and commissions
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28,566
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40,761
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Other accrued liabilities
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22,658
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22,437
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Total current liabilities
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543,370
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600,958
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Noncurrent liabilities:
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Accrued workers’ compensation costs
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154,415
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141,291
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Long-term debt
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104,400
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104,400
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Total noncurrent liabilities
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258,815
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245,691
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Commitments and contingencies
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Stockholders’ equity:
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Common stock
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277
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|
277
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|
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Additional paid-in capital
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15,462
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9,240
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Treasury stock, at cost
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(248,266
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)
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(227,152
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)
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Retained earnings
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316,230
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278,160
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Total stockholders’ equity
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83,703
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60,525
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Total liabilities and stockholders’ equity
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$
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885,888
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$
|
907,174
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
||||||||||||
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2017
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2016
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2017
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2016
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||||||||
Revenues (gross billings of $4.742 billion, $4.163 billion, $9.758 billion and $8.727 billion less worksite employee payroll cost of $3.947 billion, $3.456 billion
,
$8.080 billion and $7.217 billion, respectively)
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$
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795,552
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$
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707,332
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$
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1,678,216
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$
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1,509,740
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Direct costs:
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Payroll taxes, benefits and workers’ compensation costs
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664,999
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594,073
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1,388,317
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1,246,465
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||||
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||||||||
Gross profit
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130,553
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113,259
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289,899
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263,275
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Operating expenses:
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|
||||
Salaries, wages and payroll taxes
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61,458
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|
55,998
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123,915
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|
|
114,013
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|
||||
Stock-based compensation
|
|
5,303
|
|
|
4,761
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|
|
9,806
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|
|
8,336
|
|
||||
Commissions
|
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5,664
|
|
|
4,335
|
|
|
10,140
|
|
|
8,616
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|
||||
Advertising
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|
6,175
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|
|
6,712
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|
|
10,147
|
|
|
9,759
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|
||||
General and administrative expenses
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24,610
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|
21,254
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|
50,802
|
|
|
45,038
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|
||||
Depreciation and amortization
|
|
4,405
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|
|
4,176
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|
|
8,659
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|
|
8,447
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|
||||
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107,615
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97,236
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|
|
213,469
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|
|
194,209
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|
||||
Operating income
|
|
22,938
|
|
|
16,023
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|
|
76,430
|
|
|
69,066
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|
||||
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|
|
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|
||||||||
Other income (expense):
|
|
|
|
|
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|
|
|
|
|
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|
||||
Interest income
|
|
678
|
|
|
293
|
|
|
1,143
|
|
|
592
|
|
||||
Interest expense
|
|
(803
|
)
|
|
(650
|
)
|
|
(1,426
|
)
|
|
(1,287
|
)
|
||||
Income before income tax expense
|
|
22,813
|
|
|
15,666
|
|
|
76,147
|
|
|
68,371
|
|
||||
Income tax expense
|
|
8,795
|
|
|
5,953
|
|
|
26,501
|
|
|
25,965
|
|
||||
Net income
|
|
$
|
14,018
|
|
|
$
|
9,713
|
|
|
$
|
49,646
|
|
|
$
|
42,406
|
|
|
|
|
|
|
|
|
|
|
||||||||
Less distributed and undistributed earnings allocated to participating securities
|
|
(248
|
)
|
|
(229
|
)
|
|
(909
|
)
|
|
(962
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income allocated to common shares
|
|
$
|
13,770
|
|
|
$
|
9,484
|
|
|
$
|
48,737
|
|
|
$
|
41,444
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net income per share of common stock
|
|
$
|
0.67
|
|
|
$
|
0.45
|
|
|
$
|
2.37
|
|
|
$
|
1.98
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income per share of common stock
|
|
$
|
0.66
|
|
|
$
|
0.45
|
|
|
$
|
2.35
|
|
|
$
|
1.98
|
|
|
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,528
|
)
|
|
—
|
|
|
(25,528
|
)
|
|||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
5,746
|
|
|
4,060
|
|
|
—
|
|
|
9,806
|
|
|||||
Other
|
|
—
|
|
|
—
|
|
|
476
|
|
|
354
|
|
|
3
|
|
|
833
|
|
|||||
Dividends paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,579
|
)
|
|
(11,579
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49,646
|
|
|
49,646
|
|
|||||
Balance at June 30, 2017
|
|
27,744
|
|
|
$
|
277
|
|
|
$
|
15,462
|
|
|
$
|
(248,266
|
)
|
|
$
|
316,230
|
|
|
$
|
83,703
|
|
|
|
Six Months Ended
June 30, |
||||||
|
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
49,646
|
|
|
$
|
42,406
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
8,659
|
|
|
8,447
|
|
||
Stock-based compensation
|
|
9,806
|
|
|
8,336
|
|
||
Deferred income taxes
|
|
8,465
|
|
|
9,414
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||
Restricted cash
|
|
934
|
|
|
(3,808
|
)
|
||
Accounts receivable
|
|
8,715
|
|
|
(44,347
|
)
|
||
Prepaid insurance
|
|
(12,029
|
)
|
|
(19,128
|
)
|
||
Other current assets
|
|
1,533
|
|
|
(1,419
|
)
|
||
Other assets
|
|
(16,287
|
)
|
|
4,156
|
|
||
Accounts payable
|
|
(1,057
|
)
|
|
(1,835
|
)
|
||
Payroll taxes and other payroll deductions payable
|
|
(57,826
|
)
|
|
(64,180
|
)
|
||
Accrued worksite employee payroll expense
|
|
13,342
|
|
|
115,459
|
|
||
Accrued health insurance costs
|
|
219
|
|
|
13,277
|
|
||
Accrued workers’ compensation costs
|
|
12,832
|
|
|
15,176
|
|
||
Accrued corporate payroll, commissions and other accrued liabilities
|
|
(11,974
|
)
|
|
(11,627
|
)
|
||
Income taxes payable/receivable
|
|
(1,929
|
)
|
|
(9,661
|
)
|
||
Total adjustments
|
|
(36,597
|
)
|
|
18,260
|
|
||
Net cash provided by operating activities
|
|
13,049
|
|
|
60,666
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Marketable securities:
|
|
|
|
|
|
|
||
Purchases
|
|
(919
|
)
|
|
(310
|
)
|
||
Proceeds from dispositions
|
|
—
|
|
|
7,268
|
|
||
Proceeds from maturities
|
|
805
|
|
|
990
|
|
||
Property and equipment:
|
|
|
|
|
||||
Purchases
|
|
(20,802
|
)
|
|
(12,647
|
)
|
||
Net cash used in investing activities
|
|
(20,916
|
)
|
|
(4,699
|
)
|
|
|
Six Months Ended
June 30, |
||||||
|
|
2017
|
|
2016
|
||||
Cash flows from financing activities:
|
|
|
|
|
||||
Purchase of treasury stock
|
|
$
|
(25,528
|
)
|
|
$
|
(4,790
|
)
|
Repurchase of common stock
|
|
—
|
|
|
(144,263
|
)
|
||
Dividends paid
|
|
(11,579
|
)
|
|
(9,997
|
)
|
||
Borrowings under long-term debt agreement
|
|
—
|
|
|
124,400
|
|
||
Principal repayments
|
|
—
|
|
|
(20,000
|
)
|
||
Other
|
|
830
|
|
|
718
|
|
||
Net cash used in financing activities
|
|
(36,277
|
)
|
|
(53,932
|
)
|
||
|
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
|
(44,144
|
)
|
|
2,035
|
|
||
Cash and cash equivalents at beginning of period
|
|
286,034
|
|
|
269,538
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
241,890
|
|
|
$
|
271,573
|
|
1.
|
Basis of Presentation
|
2.
|
Accounting Policies
|
|
|
Six Months Ended
June 30, |
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in thousands)
|
||||||
|
|
|
|
|
||||
Beginning balance, January 1,
|
|
$
|
183,928
|
|
|
$
|
162,184
|
|
Accrued claims
|
|
34,242
|
|
|
35,045
|
|
||
Present value discount
|
|
(2,008
|
)
|
|
(1,274
|
)
|
||
Paid claims
|
|
(20,044
|
)
|
|
(19,038
|
)
|
||
Ending balance
|
|
$
|
196,118
|
|
|
$
|
176,917
|
|
|
|
|
|
|
||||
Current portion of accrued claims
|
|
$
|
41,703
|
|
|
$
|
41,236
|
|
Long-term portion of accrued claims
|
|
154,415
|
|
|
135,681
|
|
||
|
|
$
|
196,118
|
|
|
$
|
176,917
|
|
3.
|
Cash, Cash Equivalents and Marketable Securities
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
|
(in thousands)
|
||||||
Overnight holdings
|
|
|
|
|
||||
Money market funds (cash equivalents)
|
|
$
|
201,660
|
|
|
$
|
255,091
|
|
Investment holdings
|
|
|
|
|
|
|
||
Money market funds (cash equivalents)
|
|
28,567
|
|
|
28,231
|
|
||
Marketable securities
|
|
1,929
|
|
|
1,851
|
|
||
|
|
232,156
|
|
|
285,173
|
|
||
Cash held in demand accounts
|
|
27,586
|
|
|
25,758
|
|
||
Outstanding checks
|
|
(15,923
|
)
|
|
(23,046
|
)
|
||
Total cash, cash equivalents and marketable securities
|
|
$
|
243,819
|
|
|
$
|
287,885
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
241,890
|
|
|
$
|
286,034
|
|
Marketable securities
|
|
1,929
|
|
|
1,851
|
|
||
Total cash, cash equivalents and marketable securities
|
|
$
|
243,819
|
|
|
$
|
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)
|
||||||||||||||
|
|
June 30,
2017 |
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
$
|
230,227
|
|
|
$
|
230,227
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Municipal bonds
|
|
1,929
|
|
|
—
|
|
|
1,929
|
|
|
—
|
|
||||
Total
|
|
$
|
232,156
|
|
|
$
|
230,227
|
|
|
$
|
1,929
|
|
|
$
|
—
|
|
|
|
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
|
|
Second quarter
|
|
0.30
|
|
|
0.25
|
|
7.
|
Net Income per Share
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
14,018
|
|
|
$
|
9,713
|
|
|
$
|
49,646
|
|
|
$
|
42,406
|
|
Less distributed and undistributed earnings allocated to participating securities
|
|
(248
|
)
|
|
(229
|
)
|
|
(909
|
)
|
|
(962
|
)
|
||||
Net income allocated to common shares
|
|
$
|
13,770
|
|
|
$
|
9,484
|
|
|
$
|
48,737
|
|
|
$
|
41,444
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
|
20,629
|
|
|
20,869
|
|
|
20,597
|
|
|
20,972
|
|
||||
Incremental shares from assumed LTIP awards and conversions of common stock options
|
|
109
|
|
|
15
|
|
|
105
|
|
|
10
|
|
||||
Adjusted weighted average common shares outstanding
|
|
20,738
|
|
|
20,884
|
|
|
20,702
|
|
|
20,982
|
|
8.
|
Commitments and Contingencies
|
|
|
Three Months Ended
June 30, |
|||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|||||
|
|
(in thousands, except per share and
statistical data) |
|||||||||
|
|
|
|
|
|
|
|||||
Revenues (gross billings of $4.742 billion and $4.163 billion, less worksite employee payroll cost of $3.947 billion and $3.456 billion, respectively)
|
|
$
|
795,552
|
|
|
$
|
707,332
|
|
|
12.5
|
%
|
Gross profit
|
|
130,553
|
|
|
113,259
|
|
|
15.3
|
%
|
||
Operating expenses
|
|
107,615
|
|
|
97,236
|
|
|
10.7
|
%
|
||
Operating income
|
|
22,938
|
|
|
16,023
|
|
|
43.2
|
%
|
||
Other expense
|
|
(125
|
)
|
|
(357
|
)
|
|
(65.0
|
)%
|
||
Net income
|
|
14,018
|
|
|
9,713
|
|
|
44.3
|
%
|
||
Diluted net income per share of common stock
|
|
0.66
|
|
|
0.45
|
|
|
46.7
|
%
|
||
Adjusted net income
(1)
|
|
17,277
|
|
|
12,864
|
|
|
34.3
|
%
|
||
Adjusted diluted net income per share of common stock
(1)
|
|
0.82
|
|
|
0.60
|
|
|
36.7
|
%
|
||
Adjusted EBITDA
(1)
|
|
33,324
|
|
|
25,576
|
|
|
30.3
|
%
|
||
|
|
|
|
|
|
|
|||||
Statistical Data:
|
|
|
|
|
|
|
|
|
|
||
Average number of worksite employees paid per month
|
|
180,276
|
|
|
163,521
|
|
|
10.2
|
%
|
||
Revenues per worksite employee per month
(2)
|
|
$
|
1,471
|
|
|
$
|
1,442
|
|
|
2.0
|
%
|
Gross profit per worksite employee per month
|
|
241
|
|
|
231
|
|
|
4.3
|
%
|
||
Operating expenses per worksite employee per month
|
|
199
|
|
|
198
|
|
|
0.5
|
%
|
||
Operating income per worksite employee per month
|
|
42
|
|
|
33
|
|
|
27.3
|
%
|
||
Net income per worksite employee per month
|
|
26
|
|
|
20
|
|
|
30.0
|
%
|
(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
$8,767
and
$8,485
per worksite employee per month, less payroll cost of
$7,296
and
$7,043
per worksite employee per month, respectively.
|
|
|
Three Months Ended
June 30, |
|
Three Months Ended
June 30, |
|||||||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|||||||
|
|
(in thousands)
|
|
(% of total revenue)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
Northeast
|
|
$
|
204,285
|
|
|
$
|
179,505
|
|
|
13.8
|
%
|
|
26.1
|
%
|
|
25.8
|
%
|
Southeast
|
|
92,049
|
|
|
76,270
|
|
|
20.7
|
%
|
|
11.8
|
%
|
|
11.0
|
%
|
||
Central
|
|
131,099
|
|
|
111,502
|
|
|
17.6
|
%
|
|
16.7
|
%
|
|
16.0
|
%
|
||
Southwest
|
|
185,094
|
|
|
166,523
|
|
|
11.2
|
%
|
|
23.6
|
%
|
|
24.0
|
%
|
||
West
|
|
170,452
|
|
|
160,932
|
|
|
5.9
|
%
|
|
21.8
|
%
|
|
23.2
|
%
|
||
|
|
782,979
|
|
|
694,732
|
|
|
12.7
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
||
Other revenue
(1)
|
|
12,573
|
|
|
12,600
|
|
|
(0.2
|
)%
|
|
|
|
|
||||
Total revenue
|
|
$
|
795,552
|
|
|
$
|
707,332
|
|
|
12.5
|
%
|
|
|
|
|
•
|
Benefits costs
– The cost of group health insurance and related employee benefits
increased
$8
per worksite employee per month, or
1.4%
on a cost per covered employee basis, compared to the
second
quarter of
2016
. Included in
2017
benefits costs is a reduction of
$1.2 million
, or
$2
per worksite employee per month, for changes in estimated claims run-off related to prior periods. Included in 2016 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. The percentage of worksite employees covered under our health insurance plans was
68.8%
in the
2017
period compared to
69.0%
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
increased
1.0%
, but decreased
$4
on a per worksite employee per month basis, compared to the
second
quarter of
2016
. In the
second
quarter of
2017
, as a result of closing out claims at lower than expected costs, we recorded reductions in workers’ compensation costs of
$2.5 million
, or
0.07%
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
0.58%
in the
2017
period compared to
0.64%
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
13.4%
in part due to a
14.2%
increase
in payroll costs, or
$14
per worksite employee per month, compared to the
second
quarter of
2016
. Payroll taxes as a percentage of payroll costs were
7.0%
in
2017
and
7.1%
in
2016
.
|
|
|
Three Months Ended
June 30, |
|
Three Months Ended
June 30, |
||||||||||||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
|
(in thousands)
|
|
(per worksite employee per month)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Salaries, wages and payroll taxes
|
|
$
|
61,458
|
|
|
$
|
55,998
|
|
|
9.8
|
%
|
|
$
|
114
|
|
|
$
|
114
|
|
|
—
|
|
Stock-based compensation
|
|
5,303
|
|
|
4,761
|
|
|
11.4
|
%
|
|
10
|
|
|
10
|
|
|
—
|
|
||||
Commissions
|
|
5,664
|
|
|
4,335
|
|
|
30.7
|
%
|
|
10
|
|
|
9
|
|
|
11.1
|
%
|
||||
Advertising
|
|
6,175
|
|
|
6,712
|
|
|
(8.0
|
)%
|
|
11
|
|
|
14
|
|
|
(21.4
|
)%
|
||||
General and administrative expenses
|
|
24,610
|
|
|
21,254
|
|
|
15.8
|
%
|
|
46
|
|
|
42
|
|
|
9.5
|
%
|
||||
Depreciation and amortization
|
|
4,405
|
|
|
4,176
|
|
|
5.5
|
%
|
|
8
|
|
|
9
|
|
|
(11.1
|
)%
|
||||
Total operating expenses
|
|
$
|
107,615
|
|
|
$
|
97,236
|
|
|
10.7
|
%
|
|
$
|
199
|
|
|
$
|
198
|
|
|
0.5
|
%
|
•
|
Salaries, wages and payroll taxes of corporate and sales staff
increased
$5.5 million
or
9.8%
, but remained
flat
on a per worksite employee per month basis, compared to the
2016
period. This increase was primarily due to a
7.4%
increase
in corporate headcount, including a
9.7%
increase in the number of Business Performance Advisors.
|
•
|
Stock-based compensation
increased
$0.5 million
or
11.4%
, but remained
flat
on a per worksite employee per month basis, compared to the
2016
period. This increase was primarily due to awards issued under our Long-Term Incentive Program.
|
•
|
Commissions expense
increased
$1.3 million
or
30.7%
, or
$1
per worksite employee per month, compared to the
2016
period, primarily due to commissions associated with our PEO HR Outsourcing solutions.
|
•
|
Advertising costs
decreased
$0.5 million
or
8.0%
, or
$3
per worksite employee per month, compared to the
2016
period. The decrease was primarily due to decreased spending on sponsorships.
|
•
|
General and administrative expenses
increased
$3.4 million
or
15.8%
, or
$4
per worksite employee per month, compared to the
2016
period. The increase was primarily due to increased travel and training expenses, software maintenance costs and office expenses.
|
•
|
Depreciation and amortization expense
increased
$0.2 million
or
5.5%
, but decreased
$1
on a per worksite employee per month basis, compared to the
2016
period.
|
|
|
Six Months Ended
June 30, |
|||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|||||
|
|
(in thousands, except per share and statistical data)
|
|||||||||
|
|
|
|
|
|
|
|||||
Revenues (gross billings of $9.758 billion and $8.727 billion, less worksite employee payroll cost of $8.080 billion and $7.217 billion, respectively)
|
|
$
|
1,678,216
|
|
|
$
|
1,509,740
|
|
|
11.2
|
%
|
Gross profit
|
|
289,899
|
|
|
263,275
|
|
|
10.1
|
%
|
||
Operating expenses
|
|
213,469
|
|
|
194,209
|
|
|
9.9
|
%
|
||
Operating income
|
|
76,430
|
|
|
69,066
|
|
|
10.7
|
%
|
||
Other expense
|
|
(283
|
)
|
|
(695
|
)
|
|
(59.3
|
)%
|
||
Net income
|
|
49,646
|
|
|
42,406
|
|
|
17.1
|
%
|
||
Diluted net income per share of common stock
|
|
2.35
|
|
|
1.98
|
|
|
18.7
|
%
|
||
Adjusted net income
(1)
|
|
55,913
|
|
|
47,775
|
|
|
17.0
|
%
|
||
Adjusted diluted net income per share of common stock
(1)
|
|
2.65
|
|
|
2.23
|
|
|
18.8
|
%
|
||
Adjusted EBITDA
(1)
|
|
96,038
|
|
|
86,764
|
|
|
10.7
|
%
|
||
|
|
|
|
|
|
|
|||||
Statistical Data:
|
|
|
|
|
|
|
|
|
|
||
Average number of worksite employees paid per month
|
|
177,315
|
|
|
160,956
|
|
|
10.2
|
%
|
||
Revenues per worksite employee per month
(2)
|
|
$
|
1,577
|
|
|
$
|
1,563
|
|
|
0.9
|
%
|
Gross profit per worksite employee per month
|
|
272
|
|
|
273
|
|
|
(0.4
|
)%
|
||
Operating expenses per worksite employee per month
|
|
201
|
|
|
201
|
|
|
—
|
|
||
Operating income per worksite employee per month
|
|
72
|
|
|
72
|
|
|
—
|
|
||
Net income per worksite employee per month
|
|
47
|
|
|
44
|
|
|
6.8
|
%
|
(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
$9,171
and
$9,036
per worksite employee per month, less payroll cost of
$7,594
and
$7,473
per worksite employee per month, respectively.
|
|
|
Six Months Ended
June 30, |
|
Six Months Ended
June 30, |
|||||||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|||||||
|
|
(in thousands)
|
|
(% of total revenue)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
Northeast
|
|
$
|
440,385
|
|
|
$
|
388,160
|
|
|
13.5
|
%
|
|
26.7
|
%
|
|
26.1
|
%
|
Southeast
|
|
190,855
|
|
|
157,539
|
|
|
21.1
|
%
|
|
11.6
|
%
|
|
10.6
|
%
|
||
Central
|
|
273,876
|
|
|
238,508
|
|
|
14.8
|
%
|
|
16.6
|
%
|
|
16.1
|
%
|
||
Southwest
|
|
389,201
|
|
|
355,833
|
|
|
9.4
|
%
|
|
23.6
|
%
|
|
24.0
|
%
|
||
West
|
|
357,896
|
|
|
344,644
|
|
|
3.8
|
%
|
|
21.5
|
%
|
|
23.2
|
%
|
||
|
|
1,652,213
|
|
|
1,484,684
|
|
|
11.3
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
||
Other revenue
(1)
|
|
26,003
|
|
|
25,056
|
|
|
3.8
|
%
|
|
|
|
|
||||
Total revenue
|
|
$
|
1,678,216
|
|
|
$
|
1,509,740
|
|
|
11.2
|
%
|
|
|
|
|
•
|
Benefits costs
– The cost of group health insurance and related employee benefits
increased
$14
per worksite employee per month, or
2.8%
on a cost per covered employee basis, compared to the first
six
months of
2016
. Included in
2017
benefits costs is a charge of
$0.5 million
for changes in estimated claim run-off related to prior periods. Benefits costs incurred in the first
six
months of
2016
reflect reductions in estimated claims run-off related to prior periods of
$3.7 million
, or
$4
per worksite employee per month. The percentage of worksite employees covered under our health insurance plans was
69.1%
in the
2017
period compared to
69.6%
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
3.0%
, or
$5
per worksite employee per month, compared to the first
six
months of
2016
. In the first
six
months of
2017
, we recorded reductions in workers’ compensation costs of
$8.0 million
, or
0.11%
of non-bonus payroll costs, for changes in estimated losses related to prior reporting periods. In the first six months of 2016, we recorded reductions in workers’ compensation costs of $2.6 million, or 0.04% 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
0.57%
in the
2017
period compared to
0.66%
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
11.2%
due primarily to an
11.9%
increase
in payroll costs, or
$5
on a per worksite employee per month basis, compared to the first
six
months of
2016
. Payroll taxes as a percentage of payroll costs were
7.8%
in
2017
and
7.9%
in
2016
.
|
|
|
Six Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
|
(in thousands)
|
|
(per worksite employee per month)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Salaries, wages and payroll taxes
|
|
$
|
123,915
|
|
|
$
|
114,013
|
|
|
8.7
|
%
|
|
$
|
116
|
|
|
$
|
118
|
|
|
(1.7
|
)%
|
Stock-based compensation
|
|
9,806
|
|
|
8,336
|
|
|
17.6
|
%
|
|
9
|
|
|
9
|
|
|
—
|
|
||||
Commissions
|
|
10,140
|
|
|
8,616
|
|
|
17.7
|
%
|
|
10
|
|
|
9
|
|
|
11.1
|
%
|
||||
Advertising
|
|
10,147
|
|
|
9,759
|
|
|
4.0
|
%
|
|
10
|
|
|
10
|
|
|
—
|
|
||||
General and administrative expenses
|
|
50,802
|
|
|
45,038
|
|
|
12.8
|
%
|
|
48
|
|
|
46
|
|
|
4.3
|
%
|
||||
Depreciation and amortization
|
|
8,659
|
|
|
8,447
|
|
|
2.5
|
%
|
|
8
|
|
|
9
|
|
|
(11.1
|
)%
|
||||
Total operating expenses
|
|
$
|
213,469
|
|
|
$
|
194,209
|
|
|
9.9
|
%
|
|
$
|
201
|
|
|
$
|
201
|
|
|
—
|
|
•
|
Salaries, wages and payroll taxes of corporate and sales staff
increased
$9.9 million
or
8.7%
, but
decreased
$2
on a per worksite employee per month basis, compared to the
2016
period. This increase was primarily due to a
7.8%
increase in corporate headcount, including a
10.4%
increase in the number of Business Performance Advisors.
|
•
|
Stock-based compensation
increased
$1.5 million
or
17.6%
, but remained
flat
on a per worksite employee per month basis, compared to the
2016
period. This increase was primarily due to awards issued under our Long-Term Incentive Program.
|
•
|
Commissions expense
increased
$1.5 million
or
17.7%
, or
$1
per worksite employee per month, compared to the
2016
period, primarily due to commissions associated with our PEO HR Outsourcing solutions.
|
•
|
Advertising costs
increased
$0.4 million
or
4.0%
, but remained
flat
on a per worksite employee per month basis, compared to the
2016
period.
|
•
|
General and administrative expenses
increased
$5.8 million
or
12.8%
, or
$2
per worksite employee per month, compared to the
2016
period. The increase was primarily due to increased travel and training expenses, software maintenance costs and office expenses.
|
•
|
Depreciation and amortization expense
increased
$0.2 million
or
2.5%
, but
decreased
$1
on a per worksite employee per month basis, compared to the
2016
period.
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
|
(in thousands, except per worksite employee per month data)
|
||||||||||||||||||||
GAAP to non-GAAP reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Payroll cost (GAAP)
|
|
$
|
3,946,005
|
|
|
$
|
3,455,077
|
|
|
14.2
|
%
|
|
$
|
8,078,997
|
|
|
$
|
7,217,142
|
|
|
11.9
|
%
|
Less: Bonus payroll cost
|
|
306,340
|
|
|
213,224
|
|
|
43.7
|
%
|
|
921,598
|
|
|
795,537
|
|
|
15.8
|
%
|
||||
Non-bonus payroll cost
|
|
$
|
3,639,665
|
|
|
$
|
3,241,853
|
|
|
12.3
|
%
|
|
$
|
7,157,399
|
|
|
$
|
6,421,605
|
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Payroll cost per worksite employee per month (GAAP)
|
|
$
|
7,296
|
|
|
$
|
7,043
|
|
|
3.6
|
%
|
|
$
|
7,594
|
|
|
$
|
7,473
|
|
|
1.6
|
%
|
Less: Bonus payroll cost per worksite employee per month
|
|
566
|
|
|
436
|
|
|
29.8
|
%
|
|
866
|
|
|
824
|
|
|
5.1
|
%
|
||||
Non-bonus payroll cost per worksite employee per month
|
|
$
|
6,730
|
|
|
$
|
6,607
|
|
|
1.9
|
%
|
|
$
|
6,728
|
|
|
$
|
6,649
|
|
|
1.2
|
%
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
|
(in thousands)
|
||||||
|
|
|
|
|
||||
Cash, cash equivalents and marketable securities (GAAP)
|
|
$
|
243,819
|
|
|
$
|
287,885
|
|
Less: Amounts payable for withheld federal and state income taxes, employment taxes and other payroll deductions
|
|
173,259
|
|
|
221,710
|
|
||
Customer prepayments
|
|
22,313
|
|
|
21,256
|
|
||
Adjusted cash, cash equivalents and marketable securities
|
|
$
|
48,247
|
|
|
$
|
44,919
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|||||||||||||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|||||||||||
|
|
(in thousands, except per worksite employee per month data)
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income (GAAP)
|
|
$
|
14,018
|
|
|
$
|
9,713
|
|
|
44.3
|
%
|
|
$
|
49,646
|
|
|
$
|
42,406
|
|
|
17.1
|
%
|
|
Income tax expense
|
|
8,795
|
|
|
5,953
|
|
|
47.7
|
%
|
|
26,501
|
|
|
25,965
|
|
|
2.1
|
%
|
|||||
Interest expense
|
|
803
|
|
|
650
|
|
|
23.5
|
%
|
|
1,426
|
|
—
|
|
1,287
|
|
|
10.8
|
%
|
||||
Depreciation and amortization
|
|
4,405
|
|
|
4,176
|
|
|
5.5
|
%
|
|
8,659
|
|
|
8,447
|
|
|
2.5
|
%
|
|||||
EBITDA
|
|
28,021
|
|
|
20,492
|
|
|
36.7
|
%
|
|
86,232
|
|
|
78,105
|
|
|
10.4
|
%
|
|||||
Stock-based compensation
|
|
5,303
|
|
|
4,761
|
|
|
11.4
|
%
|
|
9,806
|
|
|
8,336
|
|
|
17.6
|
%
|
|||||
Stockholder advisory expenses
|
|
—
|
|
|
323
|
|
|
(100.0
|
)%
|
|
—
|
|
|
323
|
|
|
(100.0
|
)%
|
|||||
Adjusted EBITDA
|
|
$
|
33,324
|
|
|
$
|
25,576
|
|
|
30.3
|
%
|
|
$
|
96,038
|
|
|
$
|
86,764
|
|
|
10.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income per worksite employee per month (GAAP)
|
|
$
|
26
|
|
|
$
|
20
|
|
|
30.0
|
%
|
|
$
|
47
|
|
|
$
|
44
|
|
|
6.8
|
%
|
|
Income tax expense per worksite employee per month
|
|
16
|
|
|
12
|
|
|
33.3
|
%
|
|
25
|
|
|
27
|
|
|
(7.4
|
)%
|
|||||
Interest expense per worksite employee per month
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|||||
Depreciation and amortization per worksite employee per month
|
|
9
|
|
|
9
|
|
|
—
|
|
|
8
|
|
|
9
|
|
|
(11.1
|
)%
|
|||||
EBITDA per worksite employee per month
|
|
52
|
|
|
42
|
|
|
23.8
|
%
|
|
81
|
|
|
81
|
|
|
—
|
|
|||||
Stock-based compensation per worksite employee per month
|
|
10
|
|
|
9
|
|
|
11.1
|
%
|
|
9
|
|
|
8
|
|
|
12.5
|
|
|||||
Stockholder advisory expenses per worksite employee per month
|
|
—
|
|
|
1
|
|
|
(100.0
|
)%
|
|
—
|
|
|
1
|
|
|
(100.0
|
)%
|
|||||
Adjusted EBITDA per worksite employee per month
|
|
$
|
62
|
|
|
$
|
52
|
|
|
19.2
|
%
|
|
$
|
90
|
|
|
$
|
90
|
|
|
—
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (GAAP)
|
|
$
|
14,018
|
|
|
$
|
9,713
|
|
|
44.3
|
%
|
|
$
|
49,646
|
|
|
$
|
42,406
|
|
|
17.1
|
%
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock-based compensation
|
|
5,303
|
|
|
4,761
|
|
|
11.4
|
%
|
|
9,806
|
|
|
8,336
|
|
|
17.6
|
%
|
||||
Stockholder advisory expenses
|
|
—
|
|
|
323
|
|
|
(100.0
|
)%
|
|
—
|
|
|
323
|
|
|
(100.0
|
)%
|
||||
Total non-GAAP adjustments
|
|
5,303
|
|
|
5,084
|
|
|
4.3
|
%
|
|
9,806
|
|
|
8,659
|
|
|
13.2
|
%
|
||||
Tax effect
|
|
(2,044
|
)
|
|
(1,933
|
)
|
|
5.7
|
%
|
|
(3,539
|
)
|
|
(3,290
|
)
|
|
7.6
|
%
|
||||
Adjusted net income
|
|
$
|
17,277
|
|
|
$
|
12,864
|
|
|
34.3
|
%
|
|
$
|
55,913
|
|
|
$
|
47,775
|
|
|
17.0
|
%
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted net income per share of common stock (GAAP)
|
|
$
|
0.66
|
|
|
$
|
0.45
|
|
|
46.7
|
%
|
|
$
|
2.35
|
|
|
$
|
1.98
|
|
|
18.7
|
%
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock-based compensation
|
|
0.26
|
|
|
0.22
|
|
|
18.2
|
%
|
|
0.47
|
|
|
0.39
|
|
|
20.5
|
%
|
||||
Stockholder advisory expenses
|
|
—
|
|
|
0.02
|
|
|
(100.0
|
)%
|
|
—
|
|
|
0.02
|
|
|
(100.0
|
)%
|
||||
Total non-GAAP adjustments
|
|
0.26
|
|
|
0.24
|
|
|
8.3
|
%
|
|
0.47
|
|
|
0.41
|
|
|
14.6
|
%
|
||||
Tax effect
|
|
(0.10
|
)
|
|
(0.09
|
)
|
|
11.1
|
%
|
|
(0.17
|
)
|
|
(0.16
|
)
|
|
6.3
|
%
|
||||
Adjusted diluted net income per share of common stock
|
|
$
|
0.82
|
|
|
$
|
0.60
|
|
|
36.7
|
%
|
|
$
|
2.65
|
|
|
$
|
2.23
|
|
|
18.8
|
%
|
•
|
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
June 30, 2017
, the last business day of the reporting period was a
Friday
, client prepayments were
$22.3 million
and accrued worksite employee payroll was
$228.6 million
. In the period ended June 30, 2016, the last business day of the reporting period was a Thursday, client prepayments were
$100.7 million
and accrued worksite employee payroll was $277.4 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
$32.7 million
in the first
six
months of
2017
and
$29.5 million
in the first
six
months of
2016
. However, our estimate of workers’ compensation incurred claims was
$32.2 million
in the
2017
period and
$33.8 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
June 30, 2017
, premiums owed and cash funded to United have exceeded the costs of the United plan, resulting in a
$22.6 million
surplus,
$13.6 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
June 30, 2017
, were
$22.4 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
17.0%
to
$55.9 million
in the
six months ended June 30, 2017
, compared to
$47.8 million
in the
six months ended June 30, 2016
, due to higher gross profit. Please read “Results of Operations
–
Six Months Ended June 30, 2017
Compared to
Six Months Ended June 30, 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)
|
|||||
|
|
|
|
|
|
|
|
|
|||||
04/01/2017 – 04/30/2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
1,107,788
|
|
05/01/2017 – 05/31/2017
|
|
100,335
|
|
|
80.12
|
|
|
100,006
|
|
|
1,007,782
|
|
|
06/01/2017 – 06/30/2017
|
|
111,000
|
|
|
73.62
|
|
|
111,000
|
|
|
896,782
|
|
|
Total
|
|
211,335
|
|
|
$
|
76.70
|
|
|
211,006
|
|
|
|
(1)
|
During the three months ended
June 30, 2017
,
329
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
June 30, 2017
,
211,006
shares were repurchased under the program. As of
June 30, 2017
, we were authorized to repurchase an additional
896,782
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
|
|
10.1
|
†
|
|
10.2
|
†*
|
|
31.1
|
*
|
|
31.2
|
*
|
|
32.1
|
**
|
|
32.2
|
**
|
|
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.
|
|
____________________________________
|
|
|
|
†
|
Management contract or compensatory plan or arrangement
|
|
|
|
|
|
|
*
|
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 and six
month periods ended
June 30, 2017
and
2016
; (ii) the Consolidated Balance Sheets at
June 30, 2017
and
December 31, 2016
; (iii) the Consolidated Statement of Stockholders’ Equity for the
six
month period ended
June 30, 2017
; (iv) the Consolidated Statements of Cash Flows for the
six
month periods ended
June 30, 2017
and
2016
; and (v) Notes to the Consolidated Financial Statements.
|
|
Insperity, Inc.
|
|
|
|
|
Date: August 1, 2017
|
By:
|
/s/ Douglas S. Sharp
|
|
|
Douglas S. Sharp
|
|
|
Senior Vice President of Finance,
|
|
|
Chief Financial Officer and Treasurer
|
|
|
(Principal Financial Officer)
|
|
Page
|
|
|
SECTION 1.
|
DEFINITIONS
|
1
|
|
|
|
|
|
SECTION 2.
|
ADMINISTRATION
|
4
|
|
|
|
|
|
SECTION 3.
|
PARTICIPANTS
|
4
|
|
|
|
|
|
SECTION 4.
|
BENEFITS
|
4
|
|
|
|
|
|
SECTION 5.
|
GENERAL PROVISIONS
|
8
|
|
|
|
|
(a)
|
the Director whose removal is proposed has been convicted, or when a Director is granted immunity to testify when another has been convicted, of a felony by a court of competent jurisdiction and such conviction is no longer subject to direct appeal;
|
(b)
|
such Director has been found by the affirmative vote of a majority of the entire Board at any regular or special meeting of the Board called for that purpose or by a court of competent jurisdiction to have been guilty of willful misconduct in the performance of his or her duties to the Company in a matter of substantial importance to the Company; or
|
(c)
|
such Director has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetency directly affects his or her ability as a Director of the Company.
|
a.
|
On the Annual Director Award Date, each Director who is in office immediately after the annual meeting on such date shall be granted a Stock Award of a number of shares of Common Stock with an aggregate Fair Market Value as set forth in Appendix A, determined as of the date prior to the Grant Date. The Annual Director Awards shall be 100% vested and exercisable and shall be rounded up to the next higher whole share amount in the case of a fractional share amount. No Annual Director Award will be made to an individual Director if such Director gives advance written notice to the Board that he or she does not wish to receive such award.
|
b.
|
A Director who is appointed to the Board for the first time after April 1, 2017, shall be automatically granted, on the date of his or her appointment to the Board, a Stock Award of a number of shares of Common Stock with an aggregate Fair Market Value equal to the Annual Director Award as set forth in Appendix A, determined as of the date prior to the Grant Date, but such Award shall be pro-rated based on the date of the last annual meeting, rounded to the nearest month (“Initial Annual Director Award”). The Initial Annual Director Award shall be 100% vested and exercisable and shall be rounded up to the next higher whole share amount in the case of a fractional share amount.
|
c.
|
Notwithstanding the foregoing, a Director whose initial service on the Board begins as a result of being elected or appointed to the Board at the annual meeting shall receive the Annual Director Award, but not an Initial Annual Director Award.
|
|
Board
|
Compensation Committee
|
FRMA Committee
|
N&CG Committee
|
Lead Independent Director
|
|
|
|
|
|
|
Annual Retainer
|
$61,000
|
$10,000
|
$15,000
|
$5,000
|
$20,000
|
|
|
|
|
|
|
Annual Committee Chair Fees
|
N/A
|
$15,000
|
$25,000
|
$10,000
|
N/A
|
|
|
|
|
|
|
Annual Director Award
|
$105,000
|
N/A
|
N/A
|
N/A
|
N/A
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Insperity, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 1, 2017
|
|
|
|
|
/s/ Paul J. Sarvadi
|
|
Paul J. Sarvadi
|
|
Chairman of the Board and Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Insperity, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 1, 2017
|
|
|
|
|
/s/
Douglas S. Sharp
|
|
Douglas S. Sharp
|
|
Senior Vice President of Finance, Chief Financial Officer and Treasurer
|
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/
Paul J. Sarvadi
|
|
Paul J. Sarvadi
|
|
Chairman of the Board and Chief Executive Officer
|
|
August 1, 2017
|
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/
Douglas S. Sharp
|
|
Douglas S. Sharp
|
|
Senior Vice President of Finance,
|
|
Chief Financial Officer and Treasurer
|
|
August 1, 2017
|