CBIZ, Inc.

Good day and welcome to the CBiz second quarter 2021 results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Lori Novickis, Director of Corporate Relations. Please go ahead.

Good morning, everyone, and thank you for joining us for the CBiz second quarter and first half 2021 results conference call. In connection with this call, today's press release has been posted to the investor relations page of our website, cbiz.com. As a reminder, this call is being webcast. and a link to the live webcast as well as an archived replay and transcript can also be found on our website. Before we begin our presentation, we would like to remind you that during the call, management may discuss certain non-GAAP financial measures. Reconciliations of these measures can be found in the financial tables of today's press release and in the investor presentation on our website. Today's conference call may also include forward-looking statements, including statements regarding our business, financial condition, results of operations, cash flows, strategies, and prospects. Forward-looking statements represent only estimates on the day of this conference call and are not intended to give any assurance as to actual future results. Because forward-looking statements relate to matters that have not yet occurred These statements are inherently subject to risks and uncertainties. Many factors could cause future results to differ materially. A more detailed description of fresh factors can be found in our filings with the Securities and Exchange Commission. Please note that CBIS assumes no obligation to update forward-looking statements. Joining us for today's call are Jerry Grisco, President and Chief Executive Officer and Ware Grove, Chief Financial Officer. I will now turn the call over to Jerry for his opening remarks. Jerry.

Thank you, Laurie, and good morning, everyone. With the release of our second quarter results, I'm proud to report another quarter of exceptional performance with strong growth across nearly every major service line. But before I comment on our most recent results, I'd like to discuss the legal settlement that was announced at the end of June. The settlement related to a lawsuit pertaining to actuarial services provided eight years ago by a former employee regarding valuation of pension plan liabilities. This suit was unusual in a number of ways, including the complex and technical nature of both the claims and defenses by each of the parties. There was also very little legal precedent related to many of the claims to guide the jury in their deliberations. These facts created unique risks, including the claims by plaintiff could have resulted in large jury verdict of up to several hundred million dollars if the jury elected to award punitive damages. We were in the midst of the trial when the parties reached an agreement. Given the complexity of the facts, the risk of substantial loss, and the uncertainty inherent in jury trials, and this one in particular, We believe that settling the case for the amount previously disclosed was the most responsible decision for the company and our shareholders. Moreover, the settlement does not materially increase our debt, and our steady cash flow, strong balance sheet, and access to capital allows us to continue to make investments to grow our business, complete strategic acquisitions, buy back stock, and fully fund our operations. It's also worth noting that this is the first legal settlement in our 25-year history relating to an errors and omissions claim that substantially exceeded the limits of our insurance coverage. And while we do not disclose the limits of our insurance coverages, we have considerably increased the amount of our coverage for E&O claims over the past eight years. It's also important to view the impact of the settlement in context of the non-recurring events and not allow it to overshadow the exceptional performance and results that we are seeing in our business. With that, I want to turn to our performance for the first half of 2021. I am pleased to report that through the first six months of this year, we are seeing improved performance from nearly every major service line, resulting in the strongest year to date organic revenue growth that we've experienced in over a decade. Within our financial services group, we continue to experience very strong demand for our core accounting and tax services. We're also seeing a return of demand for our more project oriented advisory services. particularly those related to helping our clients with acquisitions and divestitures. In addition, over the last several years, we've made substantial investments in tools and systems that assist our leaders to improve revenue and profitability and accelerate the time it takes to collect accounts receivables. Our most recent results within our financial services division reflect the outcome of those investments. Our government healthcare consulting business also continues to enjoy solid growth. although that business has been somewhat impacted by delays, as some states are holding off on certain work until they are more fully reopened and resume more normal operations. Even with these potential delays, the work is required and will be completed at some time in the future, but we are monitoring how timing may impact the rate of growth for this business through the remainder of the year. Turning to our benefits and insurance group, The trend continues to follow what we saw in the second half of last year with high demand in our employee benefits, property and casualty, and retirement plan advisory businesses. Within our property and casualty business, our commercial side of the business is fueling very strong growth, while we are also seeing steady improvement on the program side. Throughout last year, we talked about some areas of our P&C program business being more impacted by the COVID-19 pandemic than others. For example, the reduction in leisure travel and related spending, we experienced early in the pandemic impacted parts of that business like adventure sports. These areas are starting to come back as these industries continue to recover. In our payroll business, last year specifically during the second quarter, we saw a drop in the number of pays as our clients reduced their workforce. While this trend eventually leveled off later in 2020, we are now seeing the number of pays trend upwards again, which points to recovery among our clients and creates additional opportunities for this business. While the number of pays has not returned at pre-pandemic levels, there are reasons for optimism given the current trends. Client retention within our benefits and insurance business remains strong. Similar to our financial services business, we are also experiencing increasing demand for many of our project-based services. For example, the improving economy is driving new sales and growth within our executive recruitment and compensation consulting practices, as many businesses look to add talent and fill critical roles. One additional area I want to highlight is our investment in producers. Our ability to attract, retain, and develop our producers is essential to accelerate organic growth, and I am pleased to report that we continue to make good progress in this area. The new producers we brought on in recent years in our employee benefits business continue to outperform our projections, and we have also added to the number of producers in our retirement plan services and our property and casualty businesses. We have also added to the capacity within our recruiting team to be more targeted in our outreach and accelerate our efforts to secure talent. With that, I will turn it over to Where First comments.