Hello and welcome to the CBIZ Third Quarter 2015 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. Now, while I turn the conference over to Lori Novickis, Director of Corporate Relations. Please go ahead, ma’am.

Thank you, Tiese [ph]. Good morning, everyone. And thank you for calling in to the CBIZ third quarter and nine month 2015 results conference call. Before our management team begins their presentation, I would like to remind you of a few items. As with all of our conference calls, this call is intended to answer the questions of our shareholders and analysts. If there are media representatives on the call, you’re welcome to listen in. However, we ask that if you do have questions that you hold them for after the call and we’ll be happy to address them then. The call is also being webcast. You can access the live webcast, as well as the replay on our website www.cbiz.com. You should have all received a copy of the press release that was issued earlier this morning, if you haven’t, it can also be found on our website. Finally, remember that during the course of the call, management may make forward-looking statements. These statements represent management’s intentions, hopes, beliefs, expectations and predictions of the future. Actual results can and sometimes do differ materially from those projected in forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in our SEC filings, Form 10-K and press releases. Joining us for today’s call are Steve Gerard, Chairman and CEO; Jerry Grisko, President and Chief Operating Officer; and Ware Grove, our Chief Financial Officer. I will now turn the call over to Steve Gerard for his opening remarks. Steve?

Thank you, Lori, and good morning, everyone. Prior to the opening today we were very pleased to announce our third quarter and nine months results. We were pleased to announce that we showed in the both the quarter and the nine months increases in revenue, in earnings, in earnings per share and in EBITDA. And, we our results were consistent with the guidance that we have previously given. I’d like to turn it over to Ware now to give you the details and I'll come back at the end with some additional comments.

Thank Steve, and good morning, everyone. As we usually do, I want to take a few minutes to run through the numbers released this morning for the third quarter and the year-to-date results ended September 30, 2015. As a reminder, as we talk about results this year compared with last year we will make an adjustment to the 2014 results to account for the sale of our Miami financial services office, which was sold last year in the fourth quarter. And thanks to the many CBIZ associates who are working hard to serve clients in our markets across the U.S. We are pleased to report strong results for the quarter and for the nine months this year compared with last year. For the third quarter ended September 30, 2015 adjusting for the sale of the Miami office, total revenue grew by 4.7% with the same unit revenue growing by 2.8% compared with prior year. We are pleased to report a significant improvement from pretax margin so that pretax earnings increased approximately 40% in the third quarter this year compared with a year ago. For the nine months, total revenue increased by 5.1% when you adjust for the sale of Miami office with an improvement in pretax margin of 70 basis points resulting in an increase in pretax income of 12.5% for the nine months this year compared with a year ago. We are successfully leveraging our G&A infrastructure and you also know the reduction in interest expense that is occurring as a result of the early note repurchases that have occurred in late 2014 and throughout the second quarter of 2015. Now within our financial services group when you adjust for the sale of the Miami office, total revenue grew by 3.5% for the quarter and grew by 3% for…

Thank you, Ware. As we reflect on the convertible notes we are very aware that it has from time to time created some degree of confusion in the minds of our investors, our potential investors. But as we reflect on the placement of that note, I want to emphasize what we have talked about, this has turned out to be a very accretive transaction for shareholders and has performed more or less the way we had hoped it would. I also want to comment on the fact that as Ware mentioned, we've only completed two acquisitions this year. That is not – that result has nothing to do with the convert. We have had and we have advised our shareholders that we have had more than sufficient capital to make acquisitions if we found transactions that fit both culturally and strategically, that has not yet been the case. However, we traditionally do three to five transactions a year and I'm highly confident that by the end of 2015 we will in fact complete three to five transactions for 2015. So I want to emphasize that the smaller number of transactions year-to-date really had nothing to do with the convert. With that, let me stop and take questions from our analysts and our shareholders.

Yes. Thank you. We will now begin the question and answer session. [Operator Instructions] And the first question comes from Jim MacDonald from First Analysis.

Yes. Good morning, guys.

Hey, Jim.

Hi, Jim.

Can we start with this same store, it looks like financial services ticked up, I guess September quarter has been traditionally a good one for you guys lately. Is that -- can you talk about why that is? Is that people shifting out their tax returns or anything else that we should know about?

Yes, Jim. We got off to a slower start than we expected this year and we talked about that early in the year that we expected a slightly stronger pace of growth in the second half versus what we've recorded in the first half. So yes, that's a part of it. And other part quite frankly is just the continued strength and the growth of our healthcare consulting business where there is a little bit of an ebb and flow but they are gaining traction with their current engagements doing more work and they're gaining new clients as we speak. So we're very happy with that piece too.

And moving on to employer services, we've been hearing about sort of weakening life insurance sales for long time, maybe at what point do you kind of bottom out there?

Yes. I think that we have reported consciously each quarter on the fact that our wholesale life insurance business has not been performing the way we would like it to. I think as a result of the adjustments we've made on a year-to-date basis in our operating platform and the work that we're doing there, that should no longer be an issue going forward. I would expect as we go into next year that the wholesale life insurance will not have a negative impact on either our organic growth rate 2016 over 2015, and in fact I think it’s more likely to be somewhat more positive on the bottom line than it has been. But let me – let's keep it perspective. It’s a $3 million business on a $750 million platform. So while we try and identify both the good and things we're working on. It really isn't a big mover, but I'm expecting as a result of the hard work done by our employee services group, that that should not be an issue going forward.

Okay. And just one technical one, could you talk little bit about – it seems to becoming a bigger issue, the net decrease in fair value and accounting and what impact do you expect that to be kind of going forward related to -- is some related to the acquisitions?

Few comments, first of all, we never predict our forecast, any adjustments to that in our guidance. And the other thing I should note is that the adjustments this year for the nine months are essentially on par with the adjustments we saw a year ago. So there is no real incremental pickup this year versus last year in that period. When we do the purchase price accounting we'll require to estimate the future contingent payments. And the future contingent payments are basically predicated on the acquired company hitting their basic targets, plus there is typically a little sweetener or incentive if they exceed their targets. And often times we with the concurrence of our [Indiscernible] public account make an estimate that is optimistic that they're not only going to hit their basic targets which will satisfy our return requirements with the capital deployed, but they're also going to achieve some level of excess payment. To the extent that we've made some adjustments, it’s typically in that layer not in the fundamental return targets. So when you look at our portfolio of acquired companies over a period of time, we're happy that they are hitting the targets that we set essentially. But from time to time some of the acquired companies don't exceed that target. So it’s not necessarily bad news, it just that when we book the purchase price estimate we take a fairly, I'll call it, conservative view in terms of the potential liability that we might record at that time.

Great. Thanks.

Thank you. And the next question comes from Steve McManus from Sidoti & Company.

Hey, good morning, guys.

Hey, Steven.

Just getting back to the government healthcare consulting business, obviously one of the fastest growers, can you give us an idea of the kind of market opportunity there, if there is any seasonality and if you think the growth is sustainable moving forward?

We have categorized the environment we live in based to somewhat on the Affordable Care Act, one of the factors as well as the gifts that keep on giving. We believe that the government healthcare advisory business which is primarily providing consultant in accounting services to state and federal government primarily on the healthcare side is a market that will continue to grow and it will continue to be strong. So while it too soon to indicate what the implication might be for next year it has been a very good growing business and we expect it to grow quite frankly fast than any of our other businesses are growing at. So I think we are looking forward to continued support in that area.

Okay. And then we touched on life insurance, but is there anything else any other lagging operations, anything slowing on same unit growth that you guys are seeing right now?

We have 60 business units plus or minus and we are constantly looking at locations and businesses to make sure that we're investing properly in them and that they're returning properly. And from time to time we're going to find some that don't. As evidenced by the fact that in the past 15 months we have sold our Orange County business, sold out the [Indiscernible] business, sold our Miami accounting unit, even though we are committed to those locations and want to grow them in the future. So I think as you look at us, in almost the portfolio sense, we're constantly evaluating our businesses. And from time to time they'll businesses that underperform where after a lot of work to try and get them where we want them, it doesn't work, we will consider discontinuing them. At this point, I wouldn't say there's anything on the list but it’s under constant review.

Okay. And then, we're continuing to see improvement on the G&A line, can you give us an idea of how much leverage potential there is there, should we expect this to continue and improve moving into 2016? Any commentary there.

Yes. I think so. I think that the G&A you're right, we've leveraged G&A pretty effectively the last three or four years. And we'll continue to do that so long as we can grow 5% or more top line. I think you're going to see 20 or 30 basis points to leverage here if not more, because the G&A infrastructure we have, can and will support significant growth ahead. So as we organically grow and quite frankly as we add acquisitions the underlying G&A is very leverageable.

Okay. And then the last one, just getting back to share count, can you just kind of circle back on that, kind of where we would stand in the fourth quarter, I know on the full year you mentioned we would end that about 51.5, just a little bit more clarity there?

Yes. The 51.5 Steve is the full year weighted average share count. And basically just to eliminate, I don't want to make this too complicated, but just to eliminate 1.3 million year-to-date share equivalents when you kind of get there for the fourth quarter. Now the shares issued for the bond buyback and the shares repurchased will continue to have an impact throughout the fourth quarter. But we think we're going to land on a full year basis that’s roughly 51.5 million shares.

Okay, great. Thanks a lot guys. I appreciate it.

Thank you. [Operator Instructions] Well, there is nothing more at the present time. So, we would like to turn the call back over to management for any closing comments.

Well, thank you. I'd like to thank our shareholders and our investors for participating in the call and for your continued support. And particularly like to thank all of our associates around the country, some almost 4500 of them who have worked very, very hard to produce the results that we have reported this morning. And I thank you for your efforts and look forward to updating everybody in February with our full year results. With that we'll sign off and say thanks again.