CLEVELAND, June 30, 2021 /PRNewswire/ -- CBIZ, Inc. (NYSE:
CBZ) ("the Company"), a leading provider of financial, insurance
and advisory services, today announced an agreement to settle the
previously disclosed University of
Pittsburgh Medical Center ("UPMC") and UPMC Altoona v. CBIZ,
Inc., CBIZ Benefits & Insurance Services, Inc. ("CBIZ
Benefits"), and Jon S. Ketzner
lawsuit filed in the U.S. District Court for the Western District
of Pennsylvania. The case was
brought in connection with actuarial services provided by a former
employee and relates to a transaction that occurred eight years
ago. Plaintiffs sought compensatory damages of between
$124 million and $266 million, plus interest and punitive
damages.
Under the terms of the settlement, CBIZ will pay a one-time
total settlement amount of $41.5
million, the impact of which will be mitigated by available
errors and omissions insurance proceeds and applicable reserves of
approximately $11.1 million.
After taking into account insurance and reserves, the Company
expects to record a one-time after-tax charge to earnings of
approximately $22.8 million that will
impact 2021 second-quarter and full-year diluted earnings per share
by approximately $0.42. The Company
will provide more detail in its upcoming second-quarter and
first-half 2021 earnings release and conference call, which are
expected to occur July 29, 2021.
The settlement does not constitute an admission of liability,
culpability, negligence, or wrongdoing on the part of CBIZ. CBIZ
believes the settlement is in the best interests of the Company and
its shareholders. The settlement reflects the Company's desire to
forgo further litigation uncertainty, risk, expense, and potential
damages, and to eliminate further distraction from business focus
associated with continuing lengthy and complex litigation and
appeals.
Jerry Grisko, President and Chief
Executive Officer of CBIZ, commented, "We are pleased to have the
risk and uncertainty of this lawsuit behind us and to focus our
time, attention and resources on opportunities to continue to build
and support our team, serve our clients and invest in initiatives
to accelerate the growth of our business. As of the end of
May, our business continues to perform very well with earnings in
line with expectations (aside from the impact of this settlement),
strong cash flows, and a healthy balance sheet. After payment
of this settlement, the unused capacity on our $400 million credit facility will be
approximately $200 million. Our
strong and steady cash flow and access to borrowing provide us with
more than sufficient capital to support ongoing operations, fund
foreseeable acquisitions and continue with planned share
repurchases. We look forward to providing further details
and updates on our upcoming second-quarter earnings release and
conference call."
Forward-Looking Statements
Forward-looking statements
in this release are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from those projected. Such risks and uncertainties include, but are
not limited to, the impact of COVID-19 on the Company's business
and operations and those of our clients; the Company's ability to
adequately manage and sustain its growth; the Company's dependence
on the current trend of outsourcing business services; the
Company's dependence on the services of its CEO and other key
employees; competitive pricing pressures; general business and
economic conditions; and changes in governmental regulation and tax
laws affecting the Company's insurance business or its business
services operations. A more detailed description of such risks and
uncertainties may be found in the Company's filings with the
Securities and Exchange Commission at www.sec.gov.
About CBIZ
CBIZ, Inc. is a leading provider of
financial, insurance and advisory services to businesses throughout
the United States. Financial
services include accounting, tax, government health care
consulting, transaction advisory, risk advisory, and valuation
services. Insurance services include employee benefits consulting,
retirement plan consulting, property and casualty insurance,
payroll, and human capital consulting. With more than 100 Company
offices in 31 states, CBIZ is one of the largest accounting and
insurance brokerage providers in the U.S. For more information,
visit www.cbiz.com.
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SOURCE CBIZ, Inc.