Our financial results for 2020 were quite impressive, with less than a 1% decline in worksite employees and a year-over-year increase of 15% in adjusted EBITDA, especially in light of the significant challenges faced throughout the year.
For both the full year and the fourth quarter, we achieved 81% of our pre-COVID budget in booked sales.
We believe this is excellent, considering how the budget increases each quarter throughout the year, especially in Q4 where we typically budget over 35% of our annual book to sales.
The paid worksite employees added in January from previously booked new accounts was down only 6% from 2020, which is excellent considering last year was pre-COVID.
When you add an account scheduled for first payroll in February, we expect to be down only 2% in worksite employees from new accounts for the full year-end transition period compared to last year.
The one exception in this year-end transition is the unexpected loss of our largest account we've ever had in our Enterprise segment that paid 6,800 worksite employees in December.
This account was a U.S. subsidiary of a large international firm that started with us with only 60 employees six years ago.
We served this company very well and delivered the platform that supported their exceptional growth from an average of 240 employees in 2015 to 4,800 in 2020.
So even though this account represented about 2% of our worksite employees in 2020, it represented only 1% of our gross profit contribution.
This account grew into a one of a kind for us as our remaining enterprise accounts represent less than 3% of our worksite employee base, with no account exceeding 2,000 employees today.
First, even though the number of proposals for our flagship workforce optimization solution in the fourth quarter was down 13% from the same period in the prior year, the number of accounts sold was up 2% due to a 17% improvement in our closing rate.
We are comfortable that our strong pricing over the last 18 months or so has effectively met our targets for matching price and cost in these programs.
We made good progress on this front, increasing our digital spend in the fourth quarter and increasing the percentage of booked accounts coming from our marketing programs to 55%.
In addition, we are beginning this year with 8% more clients than we had a year ago, while our average account size is down by about 1.5 worksite employees, largely due to the pandemic.
We reported Q4 adjusted earnings per share of $0.49 and adjusted EBITDA of $38 million.
Q4 average paid worksite employees increased 3% sequentially over the Q3 period, coming off the 2% sequential increase in Q3 over Q2.
Gross profit increased by 3.5% over Q4 of 2019, despite 1.8% fewer paid worksite employees due to improved pricing and the higher-than-expected contributions from our benefit and workers' compensation programs.
Operating expenses, excluding stock-based compensation and depreciation and amortization, increased just 5% over Q4 of 2019.
Fourth quarter operating expenses included costs associated with a 9% increase in the average number of trained Business Performance Advisors and the opening of six new sales offices throughout 2020.
The Q4 year-over-year increase in total operating expenses of 19% was impacted by increased stock-based compensation costs.
Now turning to our full year 2020 operating results, adjusted EBITDA increased 15% over 2019, $289 million, and adjusted earnings per share increased 12% to $4.64.
The average number of paid worksite employees for the full year 2020 declined by less than 1% in a very challenging environment.
Worksite employees paid from new sales declined by only 1.5% from 2019, largely on the success of our remote selling.
Client retention averaged 82% due to the resiliency of our clients and our quick and effective response to assist our clients with our premium level of HR services.
Gross profit increased 10% over 2019 as improved pricing and the favorable impact of our benefit and workers' compensation programs more than offset the slight decline in paid worksite employees and the comprehensive service fee credits provided to our clients during Q2.
This compares to our original pre-pandemic 2020 budget, which anticipated a cost increase of approximately 3%.
Now operating expenses, excluding stock-based comp and depreciation and amortization, increased by just 5.5% in 2020 over 2019 as growth, product and technology investments were partially offset by cost savings in the other areas that I mentioned a few minutes ago.
Total operating expenses increased 12% over 2019 and included the increase in stock-based comp tied to our outperformance.
We invested $98 million in capital expenditures during the year to support our recent and future growth, and returned $161 million to shareholders through our dividend and share repurchase programs.
We repurchased a total of 1.4 million shares during 2020 at a cost of $99 million; increased our dividend rate by 33% in February; and paid out a total of $62 million in dividends.
We ended the year with $212 million of adjusted cash and $130 million available under our $500 million credit facility.
As for our growth metric, we are forecasting a 2% to 6% increase in the average number of paid worksite employees for the full year 2021.
We expect to begin this year with a 1.5% to 2.5% decline in Q1 when compared to the pre-pandemic 2020 period.
This metric averaged $261 in 2017, $272 in 2018, $259 in 2019 and $287 in 2020.
When you consider the flat cost trend in 2020, this would equate to an expected 2021 cost increase of 6% to 7%.
Now if you take a step back to 2019, this equates to annualized cost trends of approximately 3% from 2019 through 2021.
We have incorporated these estimated rates in our outlook, and we expect this area to have a $1 reduction in gross profit per worksite employee per month for the full year 2021 and a $5 reduction in Q1 2021 due to the seasonality of our unemployment taxes.
With the growth in the number of BPAs throughout 2020 and their increased tenure, we intend to manage the growth in a number of hired BPAs to about 4% in 2021.
We intend to manage other corporate head count to a 2% increase.
As for 2021, we are budgeting for approximately $6 million in incremental costs related to the Salesforce initiative.
So in considering all these factors, we are budgeting for a 4% increase in cash operating costs in 2021 over 2020.
We have budgeted for a $10 million increase in depreciation and amortization over 2020, associated with software development costs related to the recent improvements in our payroll and HCM system, which were previously capitalized and the recent expansion of our corporate facility.
So in conclusion, we are forecasting improved worksite employee growth of 2% to 6%, combined with lower gross profit per worksite employee and a slight increase in cash operating costs per worksite employee.
Given the continued uncertainty in the macro business environment, we believe it's prudent to forecast a wider than typical range of $225 million to $275 million in adjusted EBITDA.
As for adjusted EPS, we are forecasting full year 2021 in a range of $3.27 to $4.20.
This assumes an estimated tax rate of 26.5%, generally consistent with our 2020 rate and the increase in depreciation and amortization that I just discussed.
We are forecasting Q1 adjusted EBITDA in a range of $84 million to $103 million and adjusted earnings per share from $1.37 to $1.72.

Summary:
We reported Q4 adjusted earnings per share of $0.49 and adjusted EBITDA of $38 million.
As for adjusted EPS, we are forecasting full year 2021 in a range of $3.27 to $4.20.
We are forecasting Q1 adjusted EBITDA in a range of $84 million to $103 million and adjusted earnings per share from $1.37 to $1.72.