TriNet Reports Fourth Quarter, Fiscal Year 2018 Results & $300 Million Increase to Stock Repurchase Program

8% Growth in Net Income and 53% Growth in Adjusted Net Income for 2018
57% Decrease in Net Income and 27% Growth in Adjusted Net Income for the Fourth Quarter 2018
$300 Million Increase to Stock Repurchase Program

TriNet Reports Fourth Quarter, Fiscal Year 2018 Results & $300 Million Increase to Stock Repurchase Program

TriNet Group, Inc. (NYSE:  TNET), a leading provider of comprehensive human resources solutions for small to midsize businesses, today announced financial results for the fourth quarter and year ended December 31, 2018. The fourth quarter and full year highlights below include non-GAAP financial measures which are reconciled later in this release.

Fourth quarter highlights include:

    • Total revenues increased 8% to $917 million and Net Service Revenues increased 10% to $225 million, each as compared to the same period last year.
  • Net income was $29 million, or $0.40 per diluted share, compared to net income of $66 million, or $0.92 per diluted share, in the same period last year.
    • In the fourth quarter of 2017, Net Income received a $0.56 per share benefit due to the revaluation of our Deferred Tax Liabilities under the Tax Cuts and Jobs Act of 2017.
  • Adjusted Net Income was $42 million, or $0.59 per diluted share, compared to Adjusted Net Income of $33 million, or $0.46 per diluted share, in the same period last year.
  • Adjusted EBITDA was $70 million, a 2% increase from the same period last year.
  •  Total WSEs at December 31, 2018 remained flat compared to the same period last year, at approximately 326,000.
  • Average WSEs remained flat as compared to the same period last year, at approximately 322,000.

Full year highlights include:

  • Total revenues increased 7% to $3.5 billion and Net Service Revenues increased 10% to $893 million, each as compared to 2017.
  • Net income was $192 million, or $2.65 per diluted share, compared to net income of $178 million, or $2.49 per diluted share, in 2017.
  • Adjusted Net Income was $218 million, or $3.02 per diluted share, compared to Adjusted Net Income of $142 million, or $1.99 per diluted share, in 2017.
  • Adjusted EBITDA was $347 million, a 22% increase over 2017.

Stock Repurchase Program:

  • Stock repurchase program increased by $300 million

“Our successful execution of our vertical market strategy delivering targeted benefits, service models, and pricing to the unique industries we served drove our strong financial performance in the fourth quarter and full year,” said Burton M. Goldfield, TriNet’s President and CEO.  “We’re delivering an exceptional value proposition to our clients as they focus on growing their businesses and attracting and retaining talent in a highly competitive labor market.  Looking ahead, we remain focused on effectively scaling our operations through automation and improved processes, as we further enhance the client experience, deliver profitable growth, and create value for our shareholders.”

TriNet’s total revenues for the fourth quarter of 2018 increased 8% from the fourth quarter of 2017 to $917 million, while Net Service Revenues (Total revenues less insurance costs) for the fourth quarter of 2018 increased 10% from the fourth quarter of 2017 to $225 million. Net Insurance Service Revenues consisted of insurance service revenues of $793 million, less insurance costs of $692 million. Professional service revenues for the fourth quarter of 2018 increased 6%, and Net Insurance Service Revenues for the fourth quarter of 2018 increased 16%, each as compared to the fourth quarter of 2017.

TriNet’s total revenues for the full year of 2018 increased 7% to $3.5 billion, while Net Service Revenues for the full year of 2018 increased 10% to $893 million. Net Service Revenues consisted of professional service revenues of $487 million and Net Insurance Service Revenues of $406 million. Net Insurance Service Revenues consisted of insurance service revenues of $3.0 billion, less insurance costs of $2.6 billion. Professional service revenues for the full year of 2018 increased 6%, and Net Insurance Service Revenues for the full year of 2018 increased 16%, over the full year of 2017.

At December 31, 2018, TriNet had cash and cash equivalents of $228 million and total debt of $413 million.

Other Announcements
In February 2019, TriNet’s Board of Directors approved a $300 million increase to its ongoing stock repurchase program. As of December 31, 2018, approximately $75 million remained available for repurchases of TriNet stock under this program. TriNet may repurchase stock under this program in open-market purchases or through privately negotiated transactions, as permitted under Rule 10b-18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or through a trading plan that complies with Rule 10b5-1(c) of the Exchange Act. The extent to which TriNet repurchases its stock and the timing of such repurchases will depend upon market conditions and other corporate considerations, as determined by TriNet’s management team.

Earnings Conference Call and Audio Webcast
TriNet will host a conference call at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its quarterly and annual results for 2018 and provide quarterly and annual financial guidance for 2019. TriNet encourages participants to pre-register for the conference call. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. To pre-register, go to: http://dpregister.com/10127747. For those who would like to join the call but have not pre-registered, they can do so by dialing +1 (412) 317-5426 and requesting the “TriNet Conference Call.” The live webcast of the conference call can be accessed on the Investor Relations section of TriNet’s website at http://investor.trinet.com. A replay of the webcast will be available on this site for approximately one year. A telephonic replay will be available for one week following the conference call at +1 (412) 317-0088 conference ID: 10127747.

About TriNet
TriNet is a leading provider of a comprehensive human resources solution for small to midsize businesses, or SMBs. We enhance business productivity by enabling our clients to outsource their human resources, or HR, function to us, allowing them to focus on operating and growing their core businesses. Our HR solution includes services such as payroll processing, human capital consulting, employment law compliance and employee benefits, including health insurance, retirement plans and workers compensation insurance. Our services are delivered by our expert team of HR professionals and enabled by our technology platform, with online and mobile tools, which allow our clients and their employees to efficiently conduct their HR transactions anytime and anywhere. For more information, please visit http://www.trinet.com.

Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to TriNet’s financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables titled “Non-GAAP Financial Measures.”

Forward-Looking Statements
This press release contains, and statements made during the above referenced conference call will contain, statements that are not historical in nature, are predictive in nature, or that depend upon or refer to future events or conditions or otherwise contain forward-looking statements within the meaning of Section 21 of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including, among other things, TriNet’s expectations and assumptions regarding: its ability to execute its strategic operational plan, including its vertical strategy and process and common platform improvement initiative, its ability to successfully leverage its scale, and its ability to deliver profitable growth. Forward-looking statements are often identified by the use of words such as, but not limited to, “ability,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “impact,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “value,” “will,” “would” and similar expressions or variations. These statements are not guarantees of future performance, but are based on management’s expectations as of the date hereof and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from our current expectations and any past or future results, performance or achievements. Investors are cautioned not to place undue reliance upon any forward-looking statements.

Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include: risks associated with changes in, uncertainty regarding, or adverse application of complex laws and regulations that govern our business; our ability to be recognized as an employer of worksite employees under federal and state regulations; our ability to mitigate business risks associated with our co-employment relationship with our worksite employees; our ability to secure private and confidential client and worksite employee data and our information technology infrastructure against cyber-attacks and security breaches; our ability to manage unexpected changes in workers’ compensation and health insurance claims by worksite employees; fluctuation in our results of operation and stock price as a result of numerous factors, many of which are outside of our control, such as  the volume and severity of our workers’ compensation and health insurance claims and the amount and timing of our insurance costs, operating expenses and capital expenditure requirements; failures or limitations in our business systems; our ability to improve our technology to meet the expectations of our clients and manage our client attrition; our ability to properly manage our internal controls over financial reporting; our ability to effectively integrate businesses we have acquired and new businesses we may acquire in the future; the effects of volatility in the financial and economic environment on the businesses that make up our client base; our ability to effectively manage and improve our operational processes; market acceptance of our vertical strategy; our ability to market our sales force effectively; the ability of our products and services to compete effectively in our industry; the concentration of our clients in certain geographies and industries; the outcome of existing and future legal proceedings; changes in our income tax positions or adverse outcomes from on-going and future audits; adverse changes in our insurance coverage or our relationships with key insurance carriers; our ability to comply with the restrictions of our credit facility and meet our debt obligations; and the effects of increased competition and our ability to compete effectively.

Further information on risks that could affect TriNet’s results is included in our filings with the U.S. Securities and Exchange Commission (SEC), including under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on our investor relations website at http://investor.trinet.com and on the SEC website at www.sec.gov. Copies of these filings are also available by contacting TriNet Corporation’s Investor Relations Department at (510) 875-7201. Except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements in this press release, and any forward-looking statements in this press release speak only as of the date of this press release. In addition, we do not assume any obligation, and do not intend, to update any of our forward-looking statements, except as required by law.

Contacts:
Investors: Media:
Alex Bauer Fatima Afzal
TriNet TriNet
Investorrelations@TriNet.com Fatima.Afzal@TriNet.com
(510) 875-7201 (510) 875-7265

SOURCE TriNet Group, Inc.

Related Links
http://www.trinet.com

SOURCE URL: https://www.prnewswire.com/news-releases/trinet-reports-fourth-quarter-fiscal-year-2018-results–300-million-increase-to-stock-repurchase-program-300796087.html

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