CBIZ has almost 5,000 employees, and they reported earnings on May 6, 2020. This can provide us with insight into how the big four accounting firms are likely to perform.
CBIZ is also the 10th largest accounting provider in the United States.
Their revenue increased 2.8% year over year for the first quarter, but this revenue increase isn’t expected to last the whole year because of COVID 19.
CBIZ repurchased shares in the open market of almost 30 million, but they will not be repurchasing shares for the foreseeable future. I’m sure they regret buying shares back at this point.
They also took out $210 million of a 400 million credit facility. This credit facility is basically their whole cash position at this point. Hopefully they use this credit facility to keep their employees.
EPS was down year over year from .66 to .67. In the prior year they grew eps to .67 from .64 in 2018.
They stated that COVID 19 started impacting their business at the end of March. It obviously doesn’t show in their Q1 results. I’m sure it will begin to show Q2. They wouldn’t have drawn down credit if they didn’t think that it would impact their business.
They weren’t holding that much cash at year end as you can see in their financial statements. After drawing down on their credit facility they have a ton of cash. This is going to hopefully make up for a large drop in revenues. Just for some perspective, 200 million represents over 20% of their 2019 revenue, so they are expecting a significant decline in revenue.
This provides some insights into what to expect from the big 4 accounting firms. Most of the year will be good except for April on. The only problem is that April and beyond is going to be a brutal year. CBIZ was buying stock early in the year, and I bet they regret doing that. The big 4 have been taking measures like cutting pay, laying people off and putting people on furlough. I don’t see them taking out debt like CBIZ. CBIZ’s Q2 results will provide a lot of insight into what other accounting firms are likely to do.