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 Insperity Announces Record Fourth Quarter and Full Year 2017 Results
   Monday, February 12, 2018 7:00:00 AM ET

Insperity, Inc. (NSP ), a leading provider of human resources and business performance for America’s best businesses, today reported results for the fourth quarter and year ended Dec. 31, 2017.

Fourth Quarter and Full Year 2017 Results (reflecting a 2-for-1 stock split in Q4):

-- Q4 EPS up 57% to $0.36; adjusted EPS up 90% to $0.55

-- Q4 net income increased 63% to $15.6 million

-- Q4 adjusted EBITDA up 67% to $38.5 million

-- 2017 EPS increased 31% to $2.01; adjusted EPS up 37% to $2.45

-- 2017 net income increased 28% to $84.4 million

-- 2017 adjusted EBITDA up 26% over 2016 to $177.7 million

Fourth Quarter Results

The fourth quarter per share results reflect the two-for-one stock split effective December 18, 2017. Fourth quarter 2017 net income and diluted earnings per share of $15.6 million and $0.36 represented increases of 63% and 57%, respectively, compared to the fourth quarter of 2016. Adjusted diluted earnings per share were $0.55, a 90% increase over the fourth quarter of 2016. Adjusted EBITDA increased 67% to $38.5 million.

"We are pleased with these record 2017 financial results capped off with a very strong fall sales and client retention campaign," said Paul J. Sarvadi, Insperity chairman and chief executive officer. "A higher starting point of paid worksite employees in January positions Insperity for growth acceleration and continued exceptional financial performance in 2018."

Revenues for the fourth quarter of 2017 increased 13% to $826.5 million compared to the fourth quarter of 2016 primarily due to a 10% increase in the average number of worksite employees paid per month. The worksite employee growth was the result of new client sales driven by an increase in the number of trained Business Performance Advisors, combined with a continuing high level of client retention. Net hiring of worksite employees by our clients was minimal, as a net loss during the first month of the quarter was followed by slight gains in each of the following two months.

Gross profit for the fourth quarter of 2017 increased 29% over the fourth quarter of 2016 to $142.9 million, primarily due to the 10% worksite employee growth, increases in overall pricing and improved results in our benefits, workers’ compensation and payroll tax areas. Operating expenses increased 24% over the fourth quarter of 2016 to $119.2 million, and included additional accruals for incentive compensation programs tied to our outperformance and an acceleration of the vesting of restricted shares from the first quarter of 2018 to take advantage of higher tax deductibility.

Net income and adjusted EBITDA per worksite employee per month increased 50% and 51%, respectively, over the fourth quarter of 2016 to $27 and $68.

The fourth quarter and full year 2017 effective income tax rates were both 35% and included a charge associated with the enactment of U.S. tax reform of $2.5 million offset by tax benefits associated with the acceleration of restricted stock and other credits.

Full Year Results

For the year ended Dec. 31, 2017, reported net income increased 28% over 2016 to $84.4 million, and diluted net income per share increased 31% to $2.01. Adjusted diluted earnings per share increased 37% over 2016 to $2.45. Adjusted EBITDA increased 26% to $177.7 million.

Revenues in 2017 increased to $3.3 billion, on a 10% increase in the average number of worksite employees paid per month over 2016. This growth was driven by an increase in worksite employees paid from new sales on a 13% increase in the average number of trained Business Performance Advisors. Additionally, worksite employee retention was 85% in 2017. Gross profit for the year ended Dec. 31, 2017 increased 17% to $572.7 million. Operating expenses increased 15% to $442.8 million over 2016. Adjusted operating expenses increased 14% to $440.8 million over 2016.

Adjusted EBITDA per worksite employee per month increased 14% from $71 in 2016 to a record high of $81 in 2017 primarily as a result of double-digit worksite employee growth, effective pricing and direct cost and operating expense management.

Cash outlays in 2017 included the repurchase of approximately 901,000 shares of stock at a cost of $38.7 million, dividends totaling $65.8 million, including both our regular quarterly dividend and the $1.00 per share special dividend declared in December. We also had capital expenditures of $33.3 million. Adjusted cash, cash equivalents and marketable securities at Dec. 31, 2017 was $61.1 million.

"Our strong cash flow generated from our continued double-digit worksite employee growth and direct cost and operating expense management has allowed us to return just over $300 million to shareholders over the past two years in the form of dividends and share repurchases," said Douglas S. Sharp, senior vice president of finance, chief financial officer and treasurer. "With another strong year anticipated in 2018, we expect to continue to provide exceptional shareholder return while investing in our long-term plan for growth and profitability."

Other Matters

Today, we also announced the renewal and expansion of our credit facility. The facility has been increased to $350 million, increasing our borrowing ability by $150 million and extending the maturity date to February 2023. The credit facility is available for general corporate purposes and is subject to various covenants that are customary for facilities of this nature.

2018 Guidance

The company also announced its guidance for 2018, including the first quarter of 2018. Please refer to the accompanying financial tables at the end of this press release for the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures.

                                                                                                              
                                                                                                         Q1 2018                                                                                                               Full Year 2018
                                                                        -------------------------------------------------------------------------                                          --------------------------------------------------------------------------------------
                                                                                                                                                                               
Average WSEEs                                                            193,500                     --                       195,300                                           203,700                     --                             207,400
   Year-over-year increase                                                 11%                       --                         12%                                              11.5%                      --                              13.5%
                                                                                                                                                                                                                                                             
Adjusted EPS                                                              $1.12                      --                        $1.16                                             $2.96                      --                              $3.08
   Year-over-year increase                                                 22%                       --                         26%                                               21%                       --                               26%
                                                                                                                                                                                                                                                             
Adjusted EBITDA (in millions)                                              $69                       --                         $71                                              $197                       --                              $204
   Year-over-year increase                                                 10%                       --                         13%                                               11%                       --                               15%
                                                                                                                                                                                                                                                             

Definition of Key Metrics

Average WSEEs - Determined by calculating the company’s cumulative worksite employees paid during the period divided by the number of months in the period.

Adjusted EPS - Represents diluted net income per share computed in accordance with GAAP, excluding the impact of non-cash impairment and other charges, one-time tax reform bonus and stock-based compensation.

Adjusted EBITDA - Represents net income computed in accordance with GAAP, plus interest expense, income taxes, depreciation and amortization expense, non-cash impairment and other charges, one-time tax reform bonus and stock-based compensation.

Insperity will be hosting a conference call today at 10 a.m. ET to discuss these results, provide guidance for the first quarter and full year 2018 and answer questions from investment analysts. To listen in, call 877-651-0053 and use conference i.d. number 6087858. The call will also be webcast at http://ir.insperity.com . The conference call script will be available at the same website later today. A replay of the conference call will be available at 855-859-2056, conference i.d. 6087858. The webcast will be archived for one year.

Insperity, a trusted advisor to America’s best businesses for more than 31 years, provides an array of human resources and business solutions designed to help improve business performance. Insperity(R) Business Performance Advisors offer the most comprehensive suite of products and services available in the marketplace. Insperity delivers administrative relief, better benefits, reduced liabilities and a systematic way to improve productivity through its premier Workforce Optimization(R) solution. Additional company offerings include Human Capital Management, Payroll Services, Time and Attendance, Performance Management, Organizational Planning, Recruiting Services, Employment Screening, Expense Management, Retirement Services and Insurance Services. Insperity business performance solutions support more than 100,000 businesses with over 2 million employees. With 2017 revenues of $3.3 billion, Insperity operates in 68 offices throughout the United States. For more information, visit http://www.insperity.com .

The statements contained herein that are not historical facts are forward-looking statements within the meaning of the federal securities laws (Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). You can identify such forward-looking statements by the words "expects," "intends," "plans," "projects," "believes," "estimates," "likely," "possibly," "probably," "goal," "opportunity," "objective," "target," "assume," "outlook," "guidance," "predicts," "appears," "indicator" and similar expressions. Forward-looking statements involve a number of risks and uncertainties. In the normal course of business, Insperity, Inc., in an effort to help keep our stockholders and the public informed about our operations, may from time to time issue such forward-looking statements, either orally or in writing. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, or projections involving anticipated revenues, earnings, unit growth, profit per worksite employee, pricing, operating expenses or other aspects of operating results. We base the forward-looking statements on our expectations, estimates and projections at the time such statements are made. These statements are not guarantees of future performance and involve risks and uncertainties that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Therefore, the actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: (i) adverse economic conditions; (ii) regulatory and tax developments and possible adverse application of various federal, state and local regulations; (iii) the ability to secure competitive replacement contracts for health insurance and workers’ compensation insurance at expiration of current contracts; (iv) cancellation of client contracts on short notice, or the inability to renew client contracts or attract new clients; (v) vulnerability to regional economic factors because of our geographic market concentration; (vi) increases in health insurance costs and workers’ compensation rates and underlying claims trends, health care reform, financial solvency of workers’ compensation carriers, other insurers or financial institutions, state unemployment tax rates, liabilities for employee and client actions or payroll-related claims; (vii) failure to manage growth of our operations and the effectiveness of our sales and marketing efforts; (viii) the impact of the competitive environment in the PEO industry on our growth and/or profitability; (ix) our liability for worksite employee payroll, payroll taxes and benefits costs; (x) our liability for disclosure of sensitive or private information; (xi) our ability to integrate or realize expected returns on our acquisitions; (xii) failure of our information technology systems; (xiii) an adverse final judgment or settlement of claims against Insperity; and (xiv) disruptions to our business resulting from the actions of certain stockholders. These factors are discussed in further detail in Insperity’s filings with the U.S. Securities and Exchange Commission. Any of these factors, or a combination of such factors, could materially affect the results of our operations and whether forward-looking statements we make ultimately prove to be accurate.

Except to the extent otherwise required by federal securities law, we do not undertake any obligation to update our forward-looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated events.

                                                                                                                      
                                                                                                            Insperity, Inc.
                                                                                                     Summary Financial Information
                                                                                     (in thousands, except per share amounts and statistical data)
                                                                                                                                                                                                    
                                                                                                                                  Dec. 31,                                                                       Dec. 31,
                                                                                                                                    2017                                                                           2016
                                                                                                                    -------------------------------------                                          ------------------------------------
Assets:
  Cash and cash equivalents                                                                                             $   354,260                                                                     $ 286,034
  Restricted cash                                                                                                            41,137                                                                        42,637
  Marketable securities                                                                                                       1,960                                                                         1,851
  Accounts receivable, net                                                                                                  333,981                                                                       270,284
  Prepaid insurance                                                                                                          10,782                                                                        15,041
  Other current assets                                                                                                       26,991                                                                        19,526
  Income taxes receivable                                                                                                     9,824                                                      4,949  
                                                                                                                    ------------------------------------                                           -----------------------------------
    Total current assets                                                                                                    778,935                                                                       640,322
                                                                                                                                                                                                    
  Property and equipment, net                                                                                                95,659                                                                        80,261
  Prepaid health insurance                                                                                                    9,000                                                                         9,000
  Deposits                                                                                                                  159,515                                                                       148,638
  Goodwill and other intangible assets, net                                                                                  12,762                                                                        13,088
  Deferred income taxes, net                                                                                                  4,283                                                                        14,025
  Other assets                                                                                                                3,541                                                      1,840  
                                                                                                                    ------------------------------------                                           -----------------------------------
    Total assets                                                                                                        $ 1,063,695                                                  $ 907,174  
                                                                                                                    ===== ========= ====================                                           ====== ======= ====================
                                                                                                                                                                                                    
Liabilities and stockholders’ equity:
  Accounts payable                                                                                                      $     6,447                                                                     $   4,189
  Payroll taxes and other payroll deductions payable                                                                        303,247                                                                       247,766
  Accrued worksite employee payroll cost                                                                                    267,402                                                                       215,214
  Accrued health insurance costs                                                                                             26,075                                                                        26,360
  Accrued workers’ compensation costs                                                             42,974                                                                        44,231
  Accrued corporate payroll and commissions                                                                                  52,595                                                                        40,761
  Other accrued liabilities                                                                                                  27,741                                                     22,437  
                                                                                                                    ------------------------------------                                           -----------------------------------
    Total current liabilities                                                                                               726,481                                                                       600,958
                                                                                                                                                                                                    
  Accrued workers’ compensation costs                                                            166,493                                                                       141,291
  Long-term debt                                                                                                            104,400                                                    104,400  
                                                                                                                    ------------------------------------                                           -----------------------------------
    Total noncurrent liabilities                                                                                            270,893                                                                       245,691
                                                                                                                                                                                                    
Stockholders’ equity:
  Common stock                                                                                                                  555                                                                           555
  Additional paid-in capital                                                                                                 25,337                                                                         8,962
  Treasury stock, at cost                                                                                                  (256,363 )                                                                    (227,152 )
  Accumulated other comprehensive income, net of tax                                                                             (5 )                                                                          (3 )
  Retained earnings                                                                                                         296,797                                                    278,163  
                                                                                                                    ------------------------------------                                           -----------------------------------
    Total stockholders’ equity                                                                    66,321                                                     60,525  
                                                                                                                    ------------------------------------                                           -----------------------------------
    Total liabilities and stockholders’ equity                                               $ 1,063,695                                                  $ 907,174  
                                                                                                                    ===== ========= ====================                                           ====== ======= ====================
                                                                                                                                                                                                                  
                                                                                                                                                                                                            Insperity, Inc.
                                                                                                                                                                                               Summary Financial Information (continued)
                                                                                                                                                                                     (in thousands, except per share amounts and statistical data)
                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                             Three months ended Dec. 31,                                                                                                                                                 Year ended Dec. 31,
                                                                                                                               ----------------------------------------------------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                             2017                               2016                   Change                                                            2017                                  2016                         Change
                                                                                                                               ---------------------------------                     ---------------------------------                     ----------                                          ------------------------------------                     ------------------------------------                     ---------------------
Operating results:
  Revenues (gross billings of $5.518 billion, $4.892 billion, $20.174                                                            $ 826,494                                             $ 729,069                                            13.4 %                                                $ 3,300,223                                              $ 2,941,347                                                 12.2 %
  billion and $17.933 billion, less worksite employee payroll cost of
  $4.692 billion, $4.163 billion, $16.874 billion and $14.992 billion,
  respectively)
  Direct costs:
  Payroll taxes, benefits and workers’ compensation costs                                               683,628                            618,530                         10.5 %                                                  2,727,492                             2,449,737                              11.3 %
                                                                                                                               --------------------------------                      --------------------------------                                                                          -----------------------------------                      -----------------------------------
  Gross profit                                                                                                                     142,866                                               110,539                                            29.2 %                                                    572,731                                                  491,610                                                 16.5 %
                                                                                                                                                                                                                                                                                                                                                                                                                  
  Operating expenses:
    Salaries, wages and payroll taxes                                                                                               70,393                                                58,679                                            20.0 %                                                    259,531                                                  229,589                                                 13.0 %
    Stock-based compensation                                                                                                         7,955                                                 4,116                                            93.3 %                                                     24,345                                                   16,643                                                 46.3 %
    Commissions                                                                                                                      6,958                                                 5,642                                            23.3 %                                                     22,773                                                   19,288                                                 18.1 %
    Advertising                                                                                                                      3,063                                                 3,148                                            (2.7 )%                                                    16,686                                                   16,447                                                  1.5 %
    General and administrative expenses                                                                                             25,958                                                20,337                                            27.6 %                                                    101,273                                                   86,693                                                 16.8 %
    Depreciation and amortization                                                                                                    4,827                              4,150                         16.3 %                                                     18,182                                16,644                               9.2 %
                                                                                                                               --------------------------------                      --------------------------------                                                                          -----------------------------------                      -----------------------------------
      Total operating expenses                                                                                                     119,154                             96,072                         24.0 %                                                    442,790                               385,304                              14.9 %
                                                                                                                               --------------------------------                      --------------------------------                                                                          -----------------------------------                      -----------------------------------
  Operating income                                                                                                                  23,712                                                14,467                                            63.9 %                                                    129,941                                                  106,306                                                 22.2 %
  Other income (expense):
    Interest income                                                                                                                  1,255                                                   340                                           269.1 %                                                      3,413                                                    1,267                                                169.4 %
    Interest expense                                                                                                                  (893 )                                                (481 )                                          85.7 %                                                     (3,213 )                                                 (2,396 )                                               34.1 %
                                                                                                                               --------------------------------                      --------------------------------                                                                          -----------------------------------                      -----------------------------------
  Income before income tax expense                                                                                                  24,074                                                14,326                                            68.0 %                                                    130,141                                                  105,177                                                 23.7 %
  Income tax expense                                                                                                                 8,520                              4,806                         77.3 %                                                     45,739                                39,186                              16.7 %
                                                                                                                               --------------------------------                      --------------------------------                                                                          -----------------------------------                      -----------------------------------
  Net income                                                                                                                     $  15,554                          $   9,520                         63.4 %                                                $    84,402                           $    65,991                              27.9 %
                                                                                                                               === ======= ====================                      === ======= ====================                                                                          ==== ========= ====================                      ==== ========= ====================
  Less distributed and undistributed earnings allocated to                                                                            (827 )                                                (222 )                                         272.5 %                                                     (1,517 )                                                 (1,496 )                                                1.4 %
  participating securities
                                                                                                                               ----------  --------------------                      ----------  --------------------                                                                          -------------  --------------------                      -------------  --------------------
  Net income allocated to common shares                                                                                          $  14,727                          $   9,298                         58.4 %                                                $    82,885                           $    64,495                              28.5 %
                                                                                                                               === ======= ====================                      === ======= ====================                                                                          ==== ========= ====================                      ==== ========= ====================
  Basic net income per share of common stock                                                                                     $    0.36                          $    0.23                         56.5 %                                                $      2.02                           $      1.55                              30.3 %
                                                                                                                               === ======= ====================                      === ======= ====================                                                                          ==== ========= ====================                      ==== ========= ====================
  Diluted net income per share of common stock                                                                                   $    0.36                          $    0.23                         56.5 %                                                $      2.01                           $      1.54                              30.5 %
                                                                                                                               === ======= ====================                      === ======= ====================                                                                          ==== ========= ====================                      ==== ========= ====================
                                                                                                                                                                                
                                                                                                                                                                                       Insperity, Inc.
                                                                                                                                                                          Summary Financial Information (continued)
                                                                                                                                                                (in thousands, except per share amounts and statistical data)
                                                                                                                                                                                                                                                              
                                                                                                                                            Three months ended Dec. 31,                                                                                                                                            Year ended Dec. 31,
                                                                                                -------------------------------------------------------------------------------------------------------------------                                          -------------------------------------------------------------------------------------------------------------------------------
                                                                                                   2017           2016         Change                                               2017           2016               Change
                                                                                                -----------                                          -----------                                          ---------                                          -----------                                          -----------                                          ---------------------
                                                                                                                                                                                                                                                                                                                                                                        
Statistical Data:
  Average number of worksite employees paid per month                                             189,513                                              172,578                                             9.8 %                                               182,696                                              165,850                                                  10.2 %
  Revenues per worksite employee per month (1)                                                    $ 1,454                                              $ 1,408                                             3.3 %                                               $ 1,505                                              $ 1,478                                                   1.8 %
  Gross profit per worksite employee per month                                                        251                                                  214                                            17.3 %                                                   261                                                  247                                                   5.7 %
  Operating expenses per worksite employee per month                                                  209                                                  186                                            12.4 %                                                   202                                                  194                                                   4.1 %
  Operating income per worksite employee per month                                                     42                                                   28                                            50.0 %                                                    59                                                   53                                                  11.3 %
  Net income per worksite employee per month                                                           27                                                   18                                            50.0 %                                                    38                                                   33                                                  15.2 %
     
(1)                      Gross billings of $9,706, $9,449, $9,202 and $9,011 per worksite
                         employee per month, less payroll cost of $8,252, $8,041, $7,697 and
                         $7,533 per worksite employee per month, respectively.
                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                     Insperity, Inc.
                                                                                                                                                                                                                                   Summary Financial Information (continued)
                                                                                                                                                                                                                         (in thousands, except per share amounts and statistical data)
                                                                                                                                                                                                                                     (Unaudited)
                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                    GAAP to Non-GAAP Reconciliation Tables
                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                           Three months ended                                                                                                                                                                                                             Year ended
                                                                                                                                                                                Dec. 31,                                                                                                                                                                                                                   Dec. 31,
                                                                                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  2017                                   2016                     Change                                                            2017                                     2016                                  Change
                                                                                                   -----------------------------------                                          -----------------------------------                                          ---------                                          -------------------------------------                                          -------------------------------------                                          --------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
Payroll cost (GAAP)                                                                                  $ 4,691,773                                                                  $ 4,163,210                                                                12.7 %                                                $ 16,873,589                                                                   $ 14,991,510                                                                      12.6 %
Less: Bonus payroll cost                                                                                 725,226                                                   598,288                                             21.2 %                                                   1,959,053                                                   1,648,936                                                   18.8 %
                                                                                                   ----------------------------------                                           ----------------------------------                                                                                              ------------------------------------                                           ------------------------------------
  Non-bonus payroll cost                                                                             $ 3,966,547                                               $ 3,564,922                                             11.3 %                                                $ 14,914,536                                                $ 13,342,574                                                   11.8 %
                                                                                                   === ========= ====================                                           === ========= ====================                                                                                              ==== ========== ====================                                           ==== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
Payroll cost per worksite employee per month (GAAP)                                                  $     8,252                                                                  $     8,041                                                                 2.6 %                                                $      7,697                                                                   $      7,533                                                                       2.2 %
Less: Bonus payroll cost per worksite employee per month                                                   1,275                                                     1,156                                             10.3 %                                                         894                                                         829                                                    7.8 %
                                                                                                   ----------------------------------                                           ----------------------------------                                                                                              ------------------------------------                                           ------------------------------------
  Non-bonus payroll cost per worksite employee per month                                             $     6,977                                               $     6,885                                              1.3 %                                                $      6,803                                                $      6,704                                                    1.5 %
                                                                                                   === ========= ====================                                           === ========= ====================                                                                                              ==== ========== ====================                                           ==== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

Non-bonus payroll cost represents payroll cost excluding the impact of bonus payrolls paid to the company’s worksite employees. Bonus payroll cost varies from period to period, but has no direct impact to the company’s ultimate workers’ compensation costs under the current program. As a result, Insperity management refers to non-bonus payroll cost in analyzing, reporting and forecasting the company’s workers’ compensation costs. Insperity includes these non-GAAP financial measures because it believes they are useful to investors in allowing for greater transparency related to the costs incurred under the company’s workers’ compensation program.

                                                                                                            
                                                                                                                        December 31,                                                             December 31,
                                                                                                                            2017                                                                     2016
                                                                                                             -------------------------------                                             --------------------------
                                                                                                              
Cash, cash equivalents and marketable securities (GAAP)                                                         $ 356,220                                                                     $              287,885
Less: Amounts payable for withheld federal and state income taxes,                                                271,547                                                                                    221,710
employment taxes and other payroll deductions
       Customer prepayments                                                                                        23,603                                                                  21,256
                                                                                                             ---------------------------------                                           ----------------------------
Adjusted cash, cash equivalents and marketable securities                                                       $  61,070                                                  $               44,919
                                                                                                             ==== ======= ====================                                           ====== ====================
                                                                                                                                                                                                 

Adjusted cash, cash equivalents and marketable securities excludes funds associated with federal and state income tax withholdings, employment taxes and other payroll deductions, as well as client prepayments. Insperity management believes adjusted cash, cash equivalents and marketable securities is a useful measure of the company’s available funds.

                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                  Three months ended                                                                                                                                                                                                                      Year ended
                                                                                                                                                                                                       Dec. 31,                                                                                                                                                                                                                            Dec. 31,
                                                                                                                   ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   2017                                     2016                           Change                                                                 2017                                     2016                                    Change
                                                                                                                   -------------------------------------                                          -------------------------------------                                          -------------------                                          -------------------------------------                                          -------------------------------------                                          ------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
Operating expenses (GAAP)                                                                                                $ 119,154                                                                      $  96,072                                                                          24.0 %                                                   $ 442,790                                                                      $ 385,304                                                                          14.9 %
Less:
    Charitable donations to Hurricane Harvey relief efforts                                                                    782                                                                 --                                                                --                                                         2,000                                                                 --                                                                --
    Stockholder advisory expenses                                                                                   --                                              --                                             --                                                --                                                         323                                             --
                                                                                                                   ------------------------------------                                           ------------------------------------                                                                                                        ------------------------------------                                           ------------------------------------
 Adjusted operating expenses (non-GAAP)                                                                                  $ 118,372                                                   $  96,072                                                       23.2 %                                                   $ 440,790                                                   $ 384,981                                                       14.5 %
                                                                                                                   ======= ======= ====================                                           ======= ======= ====================                                                                                                        ======= ======= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
Operating expenses per worksite employee per month (GAAP)                                                                $     209                                                                      $     186                                                                          12.4 %                                                   $     202                                                                      $     194                                                                           4.1 %
Less:
    Charitable donations to Hurricane Harvey relief efforts per worksite                                                         1                                                                 --                                                                --                                                             1                                                                 --                                                                --
    employee per month
    Stockholder advisory expenses per worksite employee per month                                                   --                                              --                                             --                                                --                                                           1                                             --
                                                                                                                   ------------------------------------                                           ------------------------------------                                                                                                        ------------------------------------                                           ------------------------------------
Adjusted operating expenses per worksite employee per month                                                              $     208                                                   $     186                                                       11.8 %                                                   $     201                                                   $     193                                                        4.1 %
(non-GAAP)
                                                                                                                   ======= ======= ====================                                           ======= ======= ====================                                                                                                        ======= ======= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

Adjusted operating expenses represent operating expenses excluding the impact of charitable contributions related to Hurricane Harvey relief efforts and stockholder advisory expenses. Insperity management believes adjusted operating expenses is a useful measure of the company’s operating costs, as it allows for additional analysis of the company’s operating expenses separate from the impact of these items.

                                                                                                                                                                                                                                                        
                                                                                                                                                                                         Three months ended                                                                                                                                                                                                                      Year ended
                                                                                                                                                                                              Dec. 31,                                                                                                                                                                                                                            Dec. 31,
                                                                                                          ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          2017                                     2016                           Change                                                                 2017                                     2016                                    Change
                                                                                                          -------------------------------------                                          -------------------------------------                                          -------------------                                          -------------------------------------                                          -------------------------------------                                          ------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
Net income (GAAP)                                                                                               $  15,554                                                                      $   9,520                                                                          63.4 %                                                   $  84,402                                                                      $  65,991                                                                          27.9 %
Income tax expense                                                                                                  8,520                                                                          4,806                                                                          77.3 %                                                      45,739                                                                         39,186                                                                          16.7 %
Interest expense                                                                                                      893                                                                            481                                                                          85.7 %                                                       3,213                                                                          2,396                                                                          34.1 %
Depreciation and amortization                                                                                       4,827                                                       4,150                                                       16.3 %                                                      18,182                                                      16,644                                                        9.2 %
                                                                                                          ------------------------------------                                           ------------------------------------                                                                                                        ------------------------------------                                           ------------------------------------
EBITDA                                                                                                             29,794                                                                         18,957                                                                          57.2 %                                                     151,536                                                                        124,217                                                                          22.0 %
Stock-based compensation                                                                                            7,955                                                                          4,116                                                                          93.3 %                                                      24,345                                                                         16,643                                                                          46.3 %
Charitable donations to Hurricane Harvey relief efforts                                                               782                                                                 --                                                                --                                                         2,000                                                                 --                                                                --
Other                                                                                                      --                                                                 --                                                                --                                                          (200 )                                                               --                                                                --
Stockholder advisory expenses                                                                              --                                              --                                             --                                                --                                                         323                                             --
                                                                                                          ------------------------------------                                           ------------------------------------                                                                                                        ------------------------------------                                           ------------------------------------
  Adjusted EBITDA (non-GAAP)                                                                                    $  38,531                                                   $  23,073                                                       67.0 %                                                   $ 177,681                                                   $ 141,183                                                       25.9 %
                                                                                                          ======= ======= ====================                                           ======= ======= ====================                                                                                                        ======= ======= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
  Net income per worksite employee per month (GAAP)                                                             $      27                                                                      $      18                                                                          50.0 %                                                   $      38                                                                      $      33                                                                          15.2 %
  Income tax expense per worksite employee per month                                                                   15                                                                             10                                                                          50.0 %                                                          21                                                                             19                                                                          10.5 %
  Interest expense per worksite employee per month                                                                      2                                                                              1                                                                         100.0 %                                                           1                                                                              1                                                                --
  Depreciation and amortization per worksite employee per month                                                         8                                                           8                                             --                                                             9                                                           9                                             --
                                                                                                          ------------------------------------                                           ------------------------------------                                                                                                        ------------------------------------                                           ------------------------------------
  EBITDA per worksite employee per month                                                                               52                                                                             37                                                                          40.5 %                                                          69                                                                             62                                                                          11.3 %
  Stock-based compensation per worksite employee per month                                                             15                                                                              8                                                                          87.5 %                                                          11                                                                              8                                                                          37.5 %
                                                                                                                        1                                                                 --                                                                --                                                             1                                                                 --                                                                --
  Charitable donations to Hurricane Harvey relief efforts per
  worksite employee per month
  Other per worksite employee per month                                                                    --                                                                 --                                                                --                                                --                                                                 --                                                                --
  Stockholder advisory expenses per worksite employee per month                                            --                                              --                                             --                                                --                                                           1                                             --
                                                                                                          ------------------------------------                                           ------------------------------------                                                                                                        ------------------------------------                                           ------------------------------------
  Adjusted EBITDA per worksite employee per month (non-GAAP)                                                    $      68                                                   $      45                                                       51.1 %                                                   $      81                                                   $      71                                                       14.1 %
                                                                                                          ======= ======= ====================                                           ======= ======= ====================                                                                                                        ======= ======= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

EBITDA represents net income computed in accordance with generally accepted accounting principles ("GAAP"), plus interest expense, income tax expense, depreciation and amortization expense. Adjusted EBITDA, which represents EBITDA plus charitable donations related to Hurricane Harvey relief efforts, other credits, costs associated with stockholder advisory expenses and stock-based compensation is based on our definition in our credit facility. Insperity management believes EBITDA and Adjusted EBITDA are often useful measures of the company’s operating performance, as they allow for additional analysis of the company’s operating results separate from the impact of these items and Adjusted EBITDA is used by our lenders to assess our leverage and ability to make interest payments.

                                                                                                                                                                                                                                                           
                                                                                                                                                                                            Three Months Ended                                                                                                                                                                                                                      Year Ended
                                                                                                                                                                                                 Dec. 31,                                                                                                                                                                                                                            Dec. 31,
                                                                                                             ---------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                      --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                             2017                                     2016                           Change                                                                 2017                                     2016                                    Change
                                                                                                             -------------------------------------                                          -------------------------------------                                          -------------------                                          -------------------------------------                                          -------------------------------------                                          ------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
Net income (GAAP)                                                                                                  $  15,554                                                                      $   9,520                                                                          63.4 %                                                   $  84,402                                                                      $  65,991                                                                          27.9 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
Stock-based compensation                                                                                               7,955                                                                          4,116                                                                          93.3 %                                                      24,345                                                                         16,643                                                                          46.3 %
Charitable donations to Hurricane Harvey relief efforts                                                                  782                                                                 --                                                                --                                                         2,000                                                                 --                                                                --
Other                                                                                                         --                                                                 --                                                                --                                                          (200 )                                                               --                                                                --
Stockholder advisory expenses                                                                                 --                                              --                                             --                                                --                                                         323                                             --
                                                                                                             ------------------------------------                                           ------------------------------------                                                                                                        ------------------------------------                                           ------------------------------------
  Total non-GAAP adjustments                                                                                           8,737                                                                          4,116                                                                         112.3 %                                                      26,145                                                                         16,966                                                                          54.1 %
Tax effect of non-GAAP adjustments                                                                                    (3,092 )                                                                       (1,381 )                                                                       123.9 %                                                      (9,354 )                                                                       (6,239 )                                                                        49.9 %
Enactment of U.S. tax reform                                                                                           2,481                                                                 --                                                                --                                                         2,481                                                                 --                                                                --
Tax effect of disaster credit                                                                                           (669 )                                                               --                                             --                                                          (669 )                                                               --                                             --
                                                                                                             ------------------------------------                                           ------------------------------------                                                                                                        ------------------------------------                                           ------------------------------------
  Adjusted net income (non-GAAP)                                                                                   $  23,011                                                   $  12,255                                                       87.8 %                                                   $ 103,005                                                   $  76,718                                                       34.3 %
                                                                                                             ======= ======= ====================                                           ======= ======= ====================                                                                                                        ======= ======= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                            Three Months Ended                                                                                                                                                                                                                      Year Ended
                                                                                                                                                                                                 Dec. 31,                                                                                                                                                                                                                            Dec. 31,
                                                                                                             ---------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                      --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                             2017                                                                           2016                                                                 Change                                                                 2017                                                                           2016                                                                          Change
                                                                                                             -------------------------------------                                          -------------------------------------                                          -------------------                                          -------------------------------------                                          -------------------------------------                                          ------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
Diluted net income per share of common stock (GAAP)                                                                $    0.36                                                                      $    0.23                                                                          56.5 %                                                   $    2.01                                                                      $    1.54                                                                          30.5 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
Stock-based compensation                                                                                                0.19                                                                           0.09                                                                         111.1 %                                                        0.58                                                                           0.39                                                                          48.7 %
Charitable donations to Hurricane Harvey relief efforts                                                                 0.02                                                                 --                                                                --                                                          0.05                                                                 --                                                                --
Other                                                                                                         --                                                                 --                                                                --                                                         (0.01 )                                                               --                                                                --
Impact of dividends exceeding earnings                                                                                  0.02                                                                 --                                                                --                                                --                                                                 --                                                                --
Stockholder advisory expenses                                                                                 --                                              --                                             --                                                --                                                        0.01                                             --
                                                                                                             ------------------------------------                                           ------------------------------------                                                                                                        ------------------------------------                                           ------------------------------------
                                                                                                                        0.23                                                                           0.09                                                                         155.6 %                                                        0.62                                                                           0.40                                                                          55.0 %
  Total non-GAAP adjustments
Tax effect on non-GAAP adjustments                                                                                     (0.08 )                                                                        (0.03 )                                                                       166.7 %                                                       (0.22 )                                                                        (0.15 )                                                                        46.7 %
Enactment of U.S. tax reform                                                                                            0.06                                                                 --                                                                --                                                          0.06                                                                 --                                                                --
Tax effect of disaster credit                                                                                          (0.02 )                                                               --                                             --                                                         (0.02 )                                                               --                                             --
                                                                                                             ------------------------------------                                           ------------------------------------                                                                                                        ------------------------------------                                           ------------------------------------
  Adjusted diluted net income per share of common stock (non-GAAP)                                                 $    0.55                                                   $    0.29                                                       89.7 %                                                   $    2.45                                                   $    1.79                                                       36.9 %
                                                                                                             ======= ======= ====================                                           ======= ======= ====================                                                                                                        ======= ======= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

Adjusted net income and adjusted diluted net income per share of common stock represent net income and diluted net income per share computed in accordance with GAAP, excluding the impact of stock-based compensation, enactment of U.S. tax reform, and disaster credits and charitable contributions related to Hurricane Harvey relief efforts, other credits and stockholder advisory expenses. Insperity management believes adjusted net income and adjusted diluted net income per share of common stock are useful measures of the company’s operating performance in this period, as they allow for additional analysis of the company’s operating results separate from the impact of these items.

Non-bonus payroll, adjusted cash, cash equivalents and marketable securities, adjusted operating expenses, EBITDA, adjusted EBITDA, adjusted net income and adjusted diluted net income per share of common stock are not financial measures prepared in accordance with GAAP and may be different from similar measures used by other companies. Non-bonus payroll, adjusted cash, cash equivalents and marketable securities, adjusted operating expenses, EBITDA, adjusted EBITDA, adjusted net income and adjusted diluted net income per share of common stock should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of the non-GAAP financial measures used in this press release to their most directly comparable GAAP financial measures as provided in the tables above.

The following is a reconciliation of GAAP to non-GAAP financial measures for first quarter and full year 2018 guidance (in millions, except per share amounts):

                                                                             
                                                                                                                       Q1 2018                                                                     Full Year 2018
                                                                                                                      Guidance                                                                        Guidance
                                                                                                                   -------------                                                                --------------------
Net income (GAAP)                                                                                                      $37 - $39                                                                         $105 - $110
Income tax expense                                                                                                            12                                                                             39 - 41
Interest expense                                                                                                               1                                                                                   5
Depreciation and amortization                                                                                                  5                                                                                  22
                                                                                                                   -------------                                                                --------------------
EBITDA                                                                                                                   55 - 57                                                                           171 - 178
Stock-based compensation                                                                                                       5                                                                                  17
One-time tax reform bonus                                                                                                      9                                                                                   9
                                                                                                                   -------------                                                                --------------------
  Adjusted EBITDA (non-GAAP)                                                                                           $69 - $71                                                                         $197 - $204
                                                                                                                   =============                                                                ====================
                                                                                                                                                                                                 
Diluted net income per share of common stock (GAAP)                                                                $0.89 - $0.93                                                                       $2.50 - $2.62
Stock-based compensation                                                                                                    0.11                                                                                0.42
One-time tax reform bonus                                                                                                   0.21                                                                                0.21
                                                                                                                   -------------                                                                --------------------
  Total non-GAAP adjustments                                                                                                0.32                                                                                0.63
Tax effect on non-GAAP adjustments                                                                                          0.09                                                                                0.17
                                                                                                                   -------------                                                                --------------------
  Adjusted EPS (non-GAAP)                                                                                          $1.12 - $1.16                                                                       $2.96 - $3.08
                                                                                                                   =============                                                                ====================

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20180212005237r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20180212005237/en/

SOURCE: Insperity, Inc.

Insperity, Inc. 
Investor Relations Contact: 
Douglas S. Sharp, 281-348-3232 
Senior Vice President of Finance, 
Chief Financial Officer and Treasurer 
or 
News Media Contact: 
Suzanne Haugen, (281) 312-3543 
Public Relations Manager 
suzanne.haugen@insperity.com


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