[February 12, 2016]

Insperity Announces Fourth Quarter and Full Year Results

Insperity, Inc. (NYSE: NSP), a leading provider of human resources and business performance solutions for America's best businesses, today reported results for the fourth quarter and year ended Dec. 31, 2015. For the year ended Dec. 31, 2015, adjusted diluted earnings per share increased 53.1% over 2014 to $2.19. Adjusted EBITDA increased 30.8% over 2014 to $110.0 million. Reported 2015 GAAP net income was $39.4 million, or $1.58 per share. For the fourth quarter, the company reported adjusted EBITDA of $16.8 million. Adjusted net income was $8.0 million and adjusted diluted earnings per share were $0.33. Reported fourth quarter GAAP net income and earnings per share were $6.3 million and $0.26, respectively.

"We are pleased with our 2015 results and especially our successful year-end sales and renewal campaign, which sets us up for a strong 2016," said Paul J. Sarvadi, Insperity chairman and chief executive officer. "This recent strong performance across the company is expected to result in continued acceleration in worksite employee growth and substantial operating leverage, which positions Insperity for another record year in 2016."

Fourth Quarter Results

Revenues for the fourth quarter of 2015 increased 9.1% over the fourth quarter of 2014 on a 12.0% increase in the average number of worksite employees paid per month. Worksite employees paid from new client sales increased 25% over the fourth quarter of 2014, and worksite employee retention remained above 99%. Net hiring in our client base declined slightly compared to the fourth quarter of 2014.

Gross profit decreased by 4.3% from the fourth quarter of 2014, due primarily to large medical claim activity during the quarter. Costs associated with these fourth quarter claims exceeded the average of the previous three quarters of 2015 by approximately $5 million.

"Adjusted EBITDA for the quarter was below expected levels primarily as a result of the large medical claims," said Richard G. Rawson, Insperity president. "Large medical claim activity in a health plan of our size can negatively impact a stand-alone quarter. However, on an annual basis, large medical claim costs increased less than 6% on a 10% increase in participants compared to 2014. Additionally, when combined with favorable underlying trends in benefit plan migration and the general utilization of our plans, benefits costs per covered employee increased only 1.4% in 2015 over 2014."

Adjusted operating expenses increased less than 1% compared to the fourth quarter of 2014 as a result of continued operating efficiencies and targeted cost savings. We continued to invest in the growth of the company, including an 11.8% increase in the number of Business Performance Advisors.

Full Year Results

Revenues in 2015 were $2.6 billion. The average number of worksite employees paid per month increased 11.6% over 2014 on a 31% increase in worksite employees paid from new sales and an improvement in worksite employee retention from 80% in 2014 to a historical high of 84% in 2015. Gross profit for the year ended Dec. 31, 2015 increased 8.4%, while adjusted operating expenses increased only 2.1%.

Cash outlays in 2015 included the repurchase of approximately 1.4 million shares at a cost of $67.1 million, regular cash dividends totaling $21.2 million, and capital expenditures totaling $17.8 million. Adjusted cash, cash equivalents and marketable securities at Dec. 31, 2015 was $76.7 million.

Other Matters

In December 2015, the company launched a modified Dutch auction tender offer. The offer concluded on Jan. 7, 2016 with the repurchase of over 3 million shares of common stock at a purchase price of $47.50 per share. Aggregate transaction costs of the tender offer totaled $144.2 million, which was funded with approximately $40 million in cash and $104 million of debt.

"With our strong balance sheet and a 31% increase in adjusted EBITDA during 2015, we were in a position to provide significant stockholder return through our dividend program and share repurchases," said Douglas S. Sharp, senior vice president of finance, chief financial officer and treasurer. "A total of $231 million has been returned to stockholders since January 2015 through our dividend program, which included a 16% increase in the dividend rate in May 2015, and the repurchase of approximately 4.4 million shares including the recent tender offer."

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 charges and stock-based compensation.

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

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.

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 2016 and answer questions from investment analysts. To listen in, call 877-651-0053 and use conference i.d. number 32432381. The call will also be webcast at http://ir.insperity.com. The conference call script and company guidance 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. 32432381, for one week. The webcast will be archived for one year.

Insperity, a trusted advisor to America's best businesses for more than 29 years, provides an array of human resources and business solutions designed to help improve business performance. Insperity^® 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^® solution. Additional company offerings include Human Capital Management, Payroll Services, Time and Attendance, Performance Management, Organizational Planning, Recruiting Services, Employment Screening, Financial Services, Expense Management, Retirement Services and Insurance Services. Insperity business performance solutions support more than 100,000 businesses with over 2 million employees. With 2015 revenues of $2.6 billion, Insperity operates in 60 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.

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: i) $10.5 million non-cash impairment and other charges related to the sale of two aircraft in 2015; ii) a $2.5 million impairment charge associated with the Employment Screening reporting unit in 2014; iii) a $1.2 million impairment charge related to a revision to our office consolidation plans in 2014; iv) stock-based compensation; and v) stockholder advisory expenses. Under the two-class earnings per share method, the undistributed losses resulting from dividends exceeding net income in 2014 are not allocated to participating securities. 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. Insperity includes 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 in this press release because the company believes they are useful to investors in allowing for greater transparency related to the costs incurred under the company's workers' compensation program and the company's operating performance during the periods presented. 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.

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