CBIZ, Inc. (CBZ)

Investor Day 2021

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Sep 14, 2021

Good morning and thank you for joining us today for the CBIZ 2021 Investor Day. Today, members of our executive team will cover everything from our history and future growth strategy to the services we provide and the value we bring to our clients, team members and shareholders. But first, a few housekeeping items. Today's presentation may include forward looking statements. These statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. These statements represent only estimates on the day of this webcast 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 such factors can be found in our filings with the Securities and Exchange Commission. Please note that CBIZ assumes no obligation to update these statements. Also note that management may discuss certain non GAAP financial measures. Reconciliations of these measures to the most comparable GAAP measures can be found in the appendix of today's presentation. This event is being live streamed. A link to the live event as well as a replay can be found on the Investor Relations page of our website cbiz.com. Today's agenda will begin with a strategic and financial overview from our President and CEO, Jerry Grisko and our CFO, Ware Grove. And then we'll take a deeper dive into our 2 primary divisions Financial Services with President Chris Perio and Benefits and Insurance Services with President, Mike Casales. Following our prepared remarks, will take a brief 10 minute break prior to a question and answer session moderated by our Chief of Staff, Elizabeth Newman, before Jerry's closing remarks. Before we begin, I'd like to point out a few resources on your screen. In addition to our speakers' bios, you can submit questions and request a meeting with management. We encourage you to use these resources and feel free to submit a question at any time during our presentation. If they're not covered during our prepared remarks, we'll make every effort to answer them during our Q and A session. Now I'd like to introduce Jerry Grisko, President and CEO of CBIZ to kick off today's Welcome, everyone. This year, CEVA celebrates our 25th anniversary. And over that time, we've become one of the leading providers of financial, insurance and advisory services to businesses across the country with over 5,000 team members operating in more than 100 offices in 31 states. CBIZ was founded on a simple idea. Our founders saw an unmet need within the marketplace where small and middle market businesses, growing businesses were facing increasingly complex business opportunities and challenges and needed and wanted access to best in class financial, Insurance and advisory services to help them achieve their goals. At the same time, these businesses wanted personalized customer service from a professional based in their local market who would take the time to get to know them and their businesses. This idea that the company could provide access to deep subject matter expertise across a broad array of services and deliver those services with a personalized local approach made sense then and the need upon which we stake our company makes even more sense today. Over the last 25 years, we've grown organically by meeting this need, and we've added to our growth by attracting and acquiring other companies that understand that come from being part of an organization with our scale and breadth and depth of services. This approach has been ingrained from the start And has enabled us to grow from a small upstart company to a leading provider of professional services and a trusted partner to over 80,000 clients across 25 industries. Our history shaped the company we are today. So let's take a look at the last 25 years and how we've built a company that is positioned for growth well into the future. By the 1990s, In 1996, the founders of the company that would become CBIZ recognized that in order to navigate the changing environment, These businesses required access to a broader array of services and a depth of expertise than small and regional firms could provide. At the same time, These businesses were looking for a higher level of service, an area where the more national firms often fell short. What they needed was a single one that had the scale, the breadth and depth of services and the seasoned professionals all working together to help a business achieve its goals. Filling such an unmet need, this business model was an idea whose time had come. Yet our founders took the further. They set out to ensure that the broad array of services offered by this new company were best in class, delivered by local are now in the market. We are now in the market. We are now in the market. We are now in the are a public company built for growth and stability, with access to capital to enable investment, and a focus on staying ahead of are clients' needs. And we continue to grow, both organically and through acquisitions that hinged on a strong cultural fit. We built our teams around recognized experts and expanded our services to include specialty areas in demand by our clients. We invested in our operations and infrastructure. We established and nurtured a values based culture that focuses on our people and which serves serves as the foundation of our growth strategy. Along the way, we built a reputation as a company dedicated to the success of our clients and as a model corporate citizen wherever our people work and live. The business model our founders originally envisioned worked then and still today, evident by a 25 year track record of creating value for our team, our clients and our shareholders. Today, with more than 100 offices, 5,000 professionals, over 80,000 clients and a are on balance sheet. It's no wonder we maintain solid performance throughout the uncertainty of the pandemic, a testament to the value and strength of our business model if There ever was one. We've had a great run, and now we're stronger than ever. We succeed simply by staying true to our winning formula, and you can be sure we'll continue to do so for the next quarter century. Now that you understand how we got started, We thought you might be interested to hear about the platform that exists today. From the start, we set out to build a company that could offer a breadth and depth of services and expertise that are unmatched in the industry to assist our clients with their most pressing needs and their greatest opportunities. We started by focusing on building out a national platform of core services. That being those services that our clients count on us to provide to support their day to day business. Our core services include accounting, tax, employee benefits, insurance, payroll and human capital management and a host of similar services. We then strengthened our value proposition by adding critical expertise, new services that complement our core business And by expanding into service lines and specialty areas that are in high demand by our clients. The combination of our core essential services that our clients rely on us to provide on a regular basis and the often higher value advisory services that our clients need from time to time create the fundamental attributes that allow us to perform well in both favorable and less favorable business climates. This is something we've demonstrated time and again, including through the 2008 financial crisis and most recently during the economic uncertainty surrounding the pandemic. These fundamental attributes include the essential and recurring nature of our services. It's worth noting that approximately 70% of our revenue is generated from recurring services that our clients require regardless of economic conditions in the market. As I mentioned, these include tax, insurance, payroll and a range of other essential services. And we serve a diverse client base in terms of size of business, including small and middle market businesses, industry type and geographic location. In fact, Today, CEVA serves over 80,000 clients across 25 industries, and we do this through more than 100 offices nationwide. Since we are not overly concentrated in any one area, this allows us to be more resilient even when some industries are facing unique challenges. For example, we know that some industries like hospitality, lodging and food service were disproportionately impacted during COVID-nineteen, While other industries like technology found opportunities as the world responded to new circumstances. When it comes to our clients, We strive to provide an exceptional experience regardless of their size, industry or needed service. At CBIZ, we are dedicated to the success of our clients. So much so that our clients often see our professionals as an extension of their own teams. Because of this commitment and how it drives our approach, we're proud to retain approximately 90% of our clients from year to year. And finally, in terms of day to day operations, We have a substantial amount of variable expenses in our business, including a considerable amount of variable compensation based on the performance of the business. This aspect of our business model provides us with important flexibility and additional levers that are available to navigate in an ever changing business environment. As Ware Grove, our Chief Financial Officer will discuss in just a moment, CIVUS continues to enjoy a position of financial strength and operates with very low debt, a strong balance sheet and ready access to capital to support ongoing strategic investment in the business. The combination of these fundamental attributes are key to CBIZ's value proposition for our investors, our clients and our team members. I want to now turn it over to Ware to talk in more detail about what we're doing every day to drive value for our shareholders. Thank Thank you, Jerry, and good morning, everyone. I want to take a few minutes to share our thinking on how we manage CBIZ in order to drive shareholder value. Our approach has been fairly consistent over time. For some of you, this may feel repetitious, But I want to take a few minutes to outline the 4 key items we focus on. Revenue growth, operating leverage and earnings growth, cash flow and capital allocation and deployment. Over the years, CBIZ has established a track record of achieving growth And revenue and earnings with improving margins and operations that generate good strong cash flow. Against the backdrop of the core services that lend stability to our business, we strive to position CBIZ in the following way. Our business with attributes of recurring and essential services presents a relatively low risk profile. As we grow revenue, we have been able to leverage costs and grow our bottom line faster than top line revenue growth, Thereby creating a much higher return potential for our shareholders. With that dynamic in mind, we want to offer a Favorable risk return trade off for an investor in CBIZ. There is a good track record and we will continue to say That over the long term, it is our goal to grow earnings at approximately twice the rate of revenue growth. Let me dive in, starting with revenue growth. Revenue growth is the engine that drives everything. Over time, total revenue growth may come from a fifty-fifty mix of organic same unit growth enhanced by acquisitions. There may be times when revenue growth is stronger or weaker, but with the essential character of our core services, The recurring nature of these services provides great stability. Always looking for opportunities to accelerate value creation over time, In recent years, we have begun to complement our core services with ancillary advisory services that may have greater growth potential and greater margin opportunities over time. As an example, certain services like quality of earnings and staff augmentation that focus on private equity clients have great cross serve opportunities within CBIZ such as valuation, tax consulting or other services. In order to win and retain business in the relationship driven small and middle market business segment, we strive to create a competitive advantage with an approach that emphasizes 2 things. First, we establish local relationships that are so important to the small and middle market business clients in each market we serve. And then we enhance that local market relationship with national resources that local or regional market competitors cannot match. Every These efforts include local market events sponsorships and community outreach efforts designed to unearth new business opportunities. Will supplement local efforts with national resources, including such things as client webinar events, updates from our national tax office We complement this with an active social media selling and digital lead generation effort. Importantly, We have an active client stewardship effort that not only serves to maximize client retention, but also drives revenue growth. Through these efforts, we want to identify ways in which CBIZ can offer additional services by becoming that trusted advisor, working closely with our clients on a wide range of services. Our sales management process utilizes the Salesforce tool to track new business pipelines and monitor the successful conversion of prospects into close new business. To complement organic growth, strategic acquisitions represent an important source of revenue growth. Gerry will provide a deeper dive into our acquisition strategy, our criteria and our successes over the last 25 years. With both organic and acquired growth combined into a fifty-fifty mix over time, it is our goal to achieve total revenue growth in a range of 6% to 10% annually. The second key item we consider is the operating leverage inherent in our business model. By leveraging our expense structure, CBIZ has established a long track record of margin improvement. We have consistently articulated a goal to improve margin on income before tax within a range of 20 to 50 basis points Annually. As you look at the track record, you can see that we have exceeded the top end of that range in recent years By achieving an average of 60 basis points margin improvement annually. With this level of annual margin improvement, It is our goal to grow earnings at a rate of twice or greater than revenue growth. While there may be short term anomalies, There are a number of opportunities to leverage expense levels. Perhaps the most obvious source of leverage is in facility are general administrative office related expenses. These expenses may increase at an inflationary rate over time So that an incremental increase in revenue, including acquired revenue, can drive margin improvement as these expenses are leveraged. In our business, compensation expense is our largest expense category. Compensation related expense can be leveraged through utilizing offshore resources, managing fee or price increases or improving other productivity metrics, Structuring variable incentive compensation programs to appropriately reward performance is a way to recognize the CBIZ team members who generate outstanding performance plus provide attractive margin lift at the same time. Before I move on to the next topic, which is cash flow, let me make several comments. As with any business, at times, we may compress margin in the short term to make investments in the business that will enhance longer term results. Also with the 2020 margin at 10.7%, as you consider the longer term opportunity For further margin expansion, there is no immediate ceiling on our opportunities. We have a long runway of opportunities ahead. A key attribute of our stable recurring business is the cash flow it generates. Professional services is not a working capital intensive business. So long as you are profitably serving clients and attending to billing and receivables management, the business can generate strong cash flow. As we look at the recent 5 years, cash flow generated from operations has been a multiple of approximately 1.5x or more compared with earnings. Considering the size of our business, with capital spending typically within a range of $12,000,000 to $15,000,000 a year, very little capital investment is required. The primary capital spend for CBIZ comes through facilities where we periodically update and improve workspaces within our leased facilities. Total non cash depreciation and amortization expense ran slightly more than $23,000,000 in 2020. And year to date this year, depreciation and amortization is running at an annual pace within a range of $24,000,000 to $25,000,000 The strong cash flow attributes of our business further emphasized the lower business risk profile for CBIZ, while also generating strong cash flow metrics to drive shareholder value. Our balance sheet is strong and at one times EBITDA leverage is currently relatively low. We have over $200,000,000 of unused capacity. Considering the steady nature of our business, we are not uncomfortable increasing leverage for the right opportunity. We could comfortably operate with a leverage in a 2 to 3 time range, perhaps more if the need arises. Our first priority in deploying capital is in making strategic acquisitions. After satisfying ourselves on organizational fit and cultural diligence, potential acquisitions are financially evaluated with a hurdle internal rate of return in mind. Depending on the nature and characteristics of the potential acquisition, the IRR hurdle may typically be within a 12% to 15% range. Acquisitions are typically accretive to earnings in the 1st year of operation. Our acquisition structure frequently uses an earn out component that may run 3 years after close with EBITDA or revenue growth targets that are built into the earnout. We have also deployed significant capital for share repurchases. Over the past 30 months, we have repurchased 5,500,000 shares or approximately 10% of our shares outstanding. We have utilized approximately $146,000,000 of capital for this purpose, including repurchasing 2,000,000 shares in the first half of this year. Were often asked about establishing a dividend payout. CBIZ certainly has the attributes of a dividend paying business and this is something we periodically consider through discussions with our Board. At some point, a dividend may be appropriate. But until that time, we will continue to deploy capital with an emphasis on growth through acquisition, while doing share repurchases that continue to be accretive to earnings. One final note on the strength of the balance sheet. The UPMC settlement announced on June 30 this year has been paid. Net of insurance proceeds, this was a $30,500,000 payment. Reported leverage at June 30th was approximately one time EBITDA. And after giving effect to the UPMC settlement payment on a pro form a basis, leverage increases are on our $400,000,000 credit line and so we are in no way capital constrained to pursue our business plans. With earnings per share growing within a 15% to 20% range over a long period of time, we are pleased with that track record. But we are also always looking for opportunities to further improve results. Share price has consistently outperformed benchmarks And we look forward to continuing that kind of performance. We are very pleased that on both a 5 year and on a 10 year basis, CBI's share price performance has outperformed both the Russell 2,000 and the S and P 500 by a healthy margin. With those comments, I will conclude and turn it back over to Jerry for further comments on our growth strategy. Thank Our growth strategy is based on increasing organic growth, increasing cross serving, that being the amount of additional services we provide to existing clients And adding strategic acquisitions. When we think about organic growth, we focus on how we create value for our clients to help them achieve their goals, take advantage of their greatest opportunities or to address their biggest challenges head on. We also focus on building long term relationships with our clients. The more we get to know our clients' businesses, the more we can be proactive in helping them to find opportunities or solve problems. And this approach also enables us to expand these relationships by offering additional services and solutions. When we talk to our clients, the anecdotes often reflect on how seamless our solutions are. But don't take it from me. Let's hear directly from our clients My name is Chris Guerreri. I'm the CEO and Co Founder of a company called Three innovations. We actually developed the first cordless electrostatic sprayers that were used for disinfecting and sanitizing large surfaces. So Kind of the perfect product during the COVID era. As our company was exploding during COVID, I need someone to help me put together some modeling, I need someone to help me pull my books together. And ultimately, I think we may want to sell the business during this period of time. How do And they helped me push it all the way through till the sale was completed. After the sale, they didn't go away. What I liked is that they continued to ask questions and found ways to continue to support our business, but actually saving us money in the process. I just felt like they became my finance and my organization and my accounting team all at one time. When we were looking for a broker relationship. We were looking for somebody who could provide us with health and welfare service contract experience. And what improve our current processes and make our employees happy. We work in a very complex industry where we are faced that can find solutions for us, then I'm scrambling. Having a partner like Steve is where you can grow together, you continue to trust each other And you know you have each other's back is extremely important. CBIZ brings us value by helping us on all of our external reporting requirements, Which allows us to concentrate on our internal customers and our business. The differentiation for Cbiz is their timeliness Seamless audit. 6 years in a row with no audit adjustments over that period of time. Being able to make that phone call and pull all those pieces together, Do all the things that I had no idea how to do, was invaluable to me. Steve is this forward thinking. Not only are they are thinking about their business, but they're also thinking about the client's business as well. Because of the work we did with We've talked about the importance of organic growth and cross serving within our overall growth strategy. Now let's turn our attention to the other key component of our strategy, growth through acquisitions. From the time of our founding, we pursued growth through strategic acquisitions. We view M and A as a critical strategic element to add or enhance valuable services within our overall offerings, expand capacity And enter highly attractive and growing markets. Using clear criteria, we identify, cultivate and pursue acquisitions that make us a stronger company and position us for future growth. Over our 25 year history, we successfully combined with over 200 companies. Our approach results in an average of 4 to 6 acquisitions every year, and we intend to continue at that pace or even higher. We started 2021 with the strongest M and A pipeline we've seen in our recent history. And already this year, we've completed 5 acquisitions, With each providing important strategic value to different components of our business. To highlight just a few of our recent transactions, In September of 2020, in the midst of the pandemic, we brought on ARC Consulting Group, a fast growing advisory firm based in the Bay Area of California. Not only did Arc help us to increase the visibility of the CEVA's brand on the West Coast, but also brought us critical expertise and capacity in technical and transactional accounting and a range of similar services and high demand among fast growing companies and startups. While the ARC Group significantly complemented our financial services advisory business, the acquisition also provided ARC's existing clients immediate access to an expanded menu of services. Turning to our benefits and insurance side of our business. Late last year, we acquired Borden Pearlman, a property and casualty insurance agency located in New Jersey. Borden Pearlman was a very successful 4th generation family owned agency that serves middle market clients in numerous specialty areas. This acquisition strengthened our presence in an important and growing market, While adding valuable expertise to our P and C team. And finally, earlier this year, we acquired Bernstein Porter, a Bellevue, Washington based accounting firm. This acquisition came after a long search to identify a platform acquisition with the size, scope and client base that would enable CBIZ to enter the Pacific Northwest. Bernstein Porter is one of the top 10 CPA firms in the Puget Sound region And offered not only opportunities for growth, but the cultural fit and alignment of values that we've been looking for. Each of these firms brought strategic value to CBIZ, But also highlight the strength of our process. We prioritize alignment around core values and cultural fit as part of our evaluation, And this focus is a key part of our long term success with acquisitions. We continue to grow our pipeline, especially as the economy recovers from the pandemic. With our strong performance throughout the last 18 months, we found that we have a compelling story to tell our potential partners. Our message is around being resilient, The strength of our business, our ability to perform well, while continuing to invest in the strategies employed to protect our clients and our team resonates very well with the leaders of the firms we are speaking with. Our successful track record demonstrates that we can offer potential partners opportunities to accelerate growth In ways that they cannot do alone. Our infrastructure and operations also allow these business leaders and professionals to spend more time on what they do best, serving clients rather than sweating the back office details of running a business. Our acquisition of immediately expands opportunities for their employees, while offering them the benefits, support and resources that a larger company affords. For us, the experience of joining CBIZ begins during the very first conversation. We've made substantial improvements over the years in our integration test tools and teams to make the transition to our company a positive one for everyone involved from clients to employees. When you look at the performance of our acquisitions over time, we know that our approach works. But we measure our success by one key metric. If you ask those companies that join CBIZ, would they do it all over again? I invite you to take a moment to hear directly how they answer this question. When we made the decision to sell our company, it was important for us to bid our suitors to find one that was a good fit for I've been working with CBIZ for years using their audit group and really felt comfortable with them and it was the right fit For us, CBIZ does have a much different acquisition model than anything else that we have seen. One of the things that they've done in the last couple of years is really set how Their collaborative efforts together, I mean, it really seemed like a teamwork approach. There's some fear that as you join Corporate culture in a larger firm, am I still going to have some autonomy? Am I still going to be able to make decisions at the local level? That's the magic of CBIZ is that we're built off of acquisitions and so they respect that each community has a little bit of different feel to it. We're absolutely a one stop shop. I think that we're is a one stop shop. I think that we're true value added partners. We were offering that kind of local feel, but really with national resources. CBIZ has really tried to keep up with what's going on industry wise, really tried to be comparative, the best of the best. It's one thing To have the want to, it's another thing to have the capability. We knew CDISC had both. It really allowed us, has the operators of the business more time to focus on running and growing our business. Up until the sale, I was spending 80% of my time running the business and 20% are client facing and prospecting. Now that's reversed. I am having a lot of fun prospecting, marketing and seeing clients again. And only 20% of my time is really taken by running the agency. From that point on, it was off to the races. We've grown significantly over the last about 5 years, we could have done it without the backbone of the CBIZ National Office. We are writing more business. We're providing our Working for CBIZ has also been advantageous in hiring talent. Our candidates have heard of us. They know of us. There's always going to be someone who's going to pay more. But if you have similar values, which is You want to take care of your clients, you want to take care of your people and you want to be paid fairly, CBIZ is the best option out there. They welcome of the innovation and experience and talents of the people that they bring in through acquisition. You would be able to have a much larger platform for the services that are doing so well already that they've never thought of in the past. Steve has lived up to both the letter and the intent of everything that we talked about in our negotiations. We would make the same deal With the same party, at the same terms, at the same time all over again. I now have my dream job. I love running the business that I do. I love the broad array of services, the people. It really has been a blessing to be a part of the organization. We've talked about our growth strategy and how we focus on organic growth, cross serving and growth through acquisitions. Now let's turn to our businesses and the valuable services and expertise we provide to our clients. I'm going to hand it off to Chris Spurio, President of our Financial Services division to provide a deeper dive into how CBIZ is making a difference for our clients now and moving forward. Thanks, Sherry. For the next few minutes, I will provide an overview of the Financial Services division and the different service lines that make up the business. I am proud that over our 25 year history, CBIZ has grown to be one of the largest accounting organizations in the country. Most recently, we are recognized as the 11th largest accounting organization in the nation. And with our recent growth, anticipate being back in the top 10 soon. From a revenue perspective, the Financial Services division makes up 65% of total CBIZ annual revenue. We deliver our services with a team of almost 3,000 professionals who work through a network of 28 offices coast to coast. Our most significant markets are the West Coast As we continue to expand across California, New England, New York, Philadelphia, Florida and Kansas City. Our local offices and professionals are supported by a national business development team with a focus on multidisciplinary solutions that pull from expertise from across our practice. Through our varied services, we support a variety of clients including small and mid market businesses, Nonprofits, public sector, entities and individuals. Likewise, we work across numerous industries including manufacturing, Real Estate, Retail and Construction. Let me start by describing the service lines that make up our division. Our core accounting services include accounting, tax, consulting, family office and litigation support. We also offer attest services through our affiliation with Merhofen Vekayen or MHL. As today's Chief Financial Officer faces more complex challenges, they are looking to their trusted advisor to provide more advisory and consulting services to both navigate the changing market but also to identify opportunities. Likewise, changes in government regulation and tax code, something we've seen consistently over the last several years, requires us to be nimble and creates opportunities for us to support our clients through these changes. These experiences help to deepen our relationships with our clients, Which ultimately creates opportunities for us to expand the relationship and offer additional services. The success of our core accounting business is another example of the strength of our business model. Our combination of a national network of resources and expertise backed by local presence and a commitment to high touch customer service provides a differentiated client experience. We can offer more personalized service than the big four and also have the expansive network of services, professionals and resources that few local and regional firms can offer. These attributes also enable our high rates of client retention and stable demand for our services regardless of the economic environment. A great example of our ability to be nimble and proactive in supporting our clients' most urgent needs comes from our experience during the early onset of the pandemic. We mobilized quickly to help our clients understand and access the wide range of federal stimulus and relief programs like the Payroll Protection Plan and the Main Street Lending Program. Throughout the year, we ramped up our timely thought leadership and digital marketing efforts to better connect with both clients and prospects. We also launched Accelerated Recovery Services, a new offering focused on multidisciplinary solutions to assist clients in surviving the uncertainty of the pandemic, while positioning them for more rapid recovery. We complement our core accounting services through a growing advisory services practice, an area we've expanded through strategic acquisition. Our advisory services group spans areas of importance for growing businesses including Private Equity Advisory, public company readiness, risk advisory, valuation, forensic accounting and corporate recovery services. With our private equity advisory practice, we offer end to end support covering deal advisory to performance management and improvement. The Financial Services division also has a specific practice focused on government healthcare consulting. We are a leading provider of consulting services to governmental agencies tasked with managing public healthcare and welfare within managed care programs. In this practice, we've worked with all 50 states and with the federal government across the country. We provide essential services like cost reports and rate setting, but also advisory services that deal with public policy in solving critical challenges in the delivery of healthcare. Over the past 25 years, we've built our business both organically But also through strategic acquisition. We pursue acquisitions in all practice areas and have been successful in attracting best in class firms that offer opportunities to expand into rapidly growing geographies, add in demand advisory services Or complement our existing services in ways that bring value to our clients. In 2020, the Financial Services division completed 1 acquisition and so far this year, we've completed 4. 2 of these acquisitions were firms that provided a platform to enter new and growing markets, while another expanded our offering within our government healthcare consulting business. Coming out of the pandemic, we have an incredibly strong pipeline and increasing interest from a variety of prospective partners who see the opportunities our business model presents. One of the reasons we were able to attract this level of attention is how we continue to invest in the business. Most recently, our investments in centralized training, systems and tools are helping our leaders to integrate accurate And timely data into their decision making and management processes, especially around pricing, productivity and profitability of client engagements. The discipline around these and other practices is being embedded within day to day management We are continuing to see the impact in our results. As we look ahead, the investments we have made in talent, technology and advisory services have positioned us well to capitalize on an underserved middle market. The future looks very promising for our division. And with that, I will turn it over to Mike Gazellis, President of the Benefits and Insurance Division. Thanks, Chris. For the next few minutes, I will provide an overview of the Benefits and Insurance Services division known as B and I and the different service lines that make up the business. I am proud of how far we've come and the recognition we've received from both our clients and our people, including being recognized as one of the top 25 insurance brokers in the country. Our success is directly related to balancing market demands, serving our clients and taking care of our people. We have received many honors, including being named 1 of the top 100 retirement plan advisors in the nation. And We have also just received notice we have been recognized for the 7th consecutive year as one of the best places to work in insurance. We are happy that our team's hard work is being recognized locally and nationally. From a revenue perspective, the Benefit and Insurance division makes 31% of CBIZESS total annual revenue. We deliver our services with a team of almost 1500 professionals who work through a network of over 50 offices nationwide. Our largest service line in B and I is the employee benefits business. Most know that health care costs continue to rise and are typically one of the top five expenses for a business. Couple that With the ever changing business and regulatory environment, the importance of the strong relationship that our team has with our clients has enabled us to be proactive in identifying services, solutions and products to best meet our clients' needs. Our employee benefit consultants provide custom solutions to small and middle market companies and organizations to navigate these challenges from cost containment and compliance to communication administration. We deliver these solutions with personalized high touch service through local market offices. These custom strategies are implemented using innovation and technology to assist companies in managing their employees benefits from hire to retire. Our local teams are supported by a variety of national resources and expertise including specialty teams in pharmacy, employee well-being and engagement, human resource outsourcing and actuarial services. Next, we have our Retirement and Investment Solutions business. This service line provides comprehensive retirement and investment solutions That includes 3rd party administration, actuarial services, pension administration, investment advisory and investment management solutions for institutions and individual clients. Our comprehensive end to end plan solution lowers liability and improves governance to support our clients in managing risk while also offering a high level of customized service and options that help our clients' employees reach their retirement goals. In addition to offering employee benefits in retirement and investment solutions, The division also includes a human capital management business, which offers small middle market businesses a variety of essential and recurring employee services. These services include calculating and fulfillment of payroll, filing taxes on behalf of the client and electronically moving client funds appropriately. In more complex clients, services can expand to include workforce management such as time and attendance, benefit enrollment, recruiting and talent management and compensation analysis as well as Affordable Care Act, Flex and COBRA Administration Services. To ensure that we are able to meet the ever growing and changing needs of the marketplace, in 2019, we introduced a more advanced technology platform to better align with middle market and larger more complex clients. We introduced Central HR as a unified human capital management solution that supports businesses in every aspect of talent management. The centrally HR platform enables us to better meet the needs of our clients for our traditional technology solution to our small clients. This combination allows us to go to market with 2 technology options and support growing clients when their needs change. A key component of our growth strategy for our Human Capital Management business is how our services complement our employee benefits and retirement solutions. Our ability to align these services supported by advanced technology differentiates us within the market and simplifies the overall experience for our clients. Our fastest growing business in B and I is our property and casualty practice, Which offers risk advisory, risk transfer, structured solutions that help organizations and individuals better identify, quantify and manage their risk exposure. Our risk consultants leverage proprietary data and analytics, research and experience to develop a wide range of solutions that help our clients across industries reduce their total cost of risk. Similar to our employee benefits group, Our property and casualty services are delivered through local teams that are supported by national resources with deep expertise in a variety of industries and clients, Along with a comprehensive suite of risk management resources. Finally, as a division, we also support several specialty service lines including recruitment and placement, compensation consulting and life insurance, all which complement our larger offerings. Earlier, Jerry discussed the importance of organic growth as part of our overall business strategy. Our ability to attract, retain and develop our producers and consultants is essential to accelerate organic growth. The new producers we've hired in recent years in our employee benefit business continue to outperform our projections and we have also added producers in our retirement investment solutions as well as our property and casualty business. We've added capacity to our recruiting team to be more targeted in our outreach and accelerate our efforts to secure talent. Jerry also outlined our acquisition strategy and efforts to acquire companies that provide strategic value to our business. In 2020, the B and I division completed 4 acquisitions and so far this year, we've completed 1 with a very strong pipeline in place. These acquisitions across all of our service lines have enabled us to enter growing geographic markets, add critical talent and capacity And expand our offerings to our clients. As we look forward across all of our services, we will continue to see more regulation and increasing complexity In the business environment, which will require ongoing expertise to help clients navigate change, compliance and manage costs. The fragmented industries we compete in will continue to consolidate to create scale and operational efficiencies, which will provide opportunities for us to add firms that fit our culture. As evidence of this, 2020 set a record with 774 reported acquisitions in the broker space alone. Technology will continue to be a disruptor and require adjustments to our business model and delivery systems to meet client demands. Improving client experience and enhancing efficiencies are definitely driving change. BNI is well positioned to address is what our clients and prospects are expecting as they focus on health, wealth and retirement for their employees. Our focus on organic growth through investment in producers, technology to drive client engagement and digital lead generation, along with strategic acquisitions will drive total growth for our division and we are excited for the future. With that, I will hand it back to Jerry. Thank you, Mike and Chris for providing an overview of our businesses, recent investments and opportunities for growth. Now let's talk about the people who make our success a reality, Our team. We are proud of the business we've built over the last 25 years and everything we've done to accelerate growth And create value for our clients and our shareholders. And we're equally proud of the One SEVIS culture we've created and continue to nurture. As a leading provider of professional services, the heart of our business is our people. Our people, their expertise, skills and know how are central to our value proposition as a company. At CBIZ, our vision is to be recognized by our clients as the premier provider of accounting, Insurance and other advisory services and by our team members as their employer of choice. Our culture is ultimately what enables us to pursue this vision and the strength of our culture is evidenced in our results and our performance. At the foundation of our culture is our core values. At CBIZ, our core values serve as our guiding light, starting with we do the right thing. We look to our core values as we make decisions that impact our people, clients and shareholders. Demonstrated the power of our core values over the last 18 months as we brought them to life in prioritizing the health and safety of our team members and clients during the pandemic. We know that our uncompromising commitment to our values is important to our people. Each We received over 60 workplace awards ranging from the best workplaces in consulting and professional services to top ranked internship program. We're especially proud that this year Forbes named CBIZ as one of America's best midsized employers. Our focus on doing the right thing extends from our people to our clients, shareholders and communities. Each year, we publish our corporate social responsibility report to highlight our ongoing investment in our people, engagement with our communities and contributions as a corporate citizen. This year's report features the impact of several long standing initiatives at CBIZ, including CBIZ Women's Advantage, our program aimed at attracting, engaging and retaining women across the company. And CIVUS Cares, our local and national efforts to give back to the communities where we work and live. This year, I'm especially proud of the progress we've made on diversity and inclusion and the work being done to establish a comprehensive and long term strategy aimed at meaningful change within both our company and our industries. We've already taken some important steps in our journey, Which includes signing on to the CEO Action for Diversity and Inclusion pledge. By signing the pledge, I'm committed to focus on a shared goal, to advance diversity and inclusion in the workplace. Being part of this expansive network is helping CBIZ Be intentional in our efforts to attract and retain diverse talent and to create a more inclusive culture. Most importantly, our team members are involved in every aspect of these initiatives and efforts. Take a look at how we continue to build our 1 CBIZ culture And what it means for our people and our business. What drew me to Cbiz is really about its culture. I would describe it as entrepreneurial. Is one that is continually evolving. We take our core values very seriously. These are the things that are non negotiable for us. Are people are everything to our business. We take care of our team and each other to clients that are taken care of. You'll be challenged provides a platform for growth and success. Our culture really enables our strategy, and that To me, it's one of the secrets to why we've been so successful and will continue to be. We care about the success of our clients and their success is our success. We formulated the DNI task Leadership, the learning has allowed me to provide resources and tools to our team members to feel like we're building a Opportunity for our employees to thrive and feel valued and feel respected and feel heard and continue to attract and retain the best talent. That's what's really, to me, at the core of our diversity and inclusion focus is really how we take that just Amazing tapestry and work it into something beautiful. When CEDIS signed on to the CEO Action have pledged for diversity and inclusion. This is the largest CEO driven effort around diversity and inclusion in the That really gave a signal that CBIZ was very intentional about their commitment to diversity and inclusion. In joining It was also great to hear about the women's initiative. SIPA's women's advantage is a program that was established in order to create a competitive advantage through personal professional development, business development and community involvement. The CWA has really done a good job of continuing to promote women recognize them, appreciate them. We've been recognized as an employer choice throughout the nation is very validating. I've enjoyed being with a company that helps not only my Now let's turn our attention to what comes next for CBIZ. This morning, you've learned more about how CBIZ is in a unique position to capitalize on opportunities to accelerate growth moving forward. You've heard from Ware Grove, our CFO, on CBIZ's overall financial strength with our solid balance sheet, ready access to capital and low debt. You've also learned how the intentional decisions at the height of the pandemic allowed us to protect our clients, team and business and ultimately allowed us to emerge even stronger than before. Our division presidents, Chris Berio and Mike Kazelles discussed how they are identifying and pursuing organic growth Through continued investment in our people, our systems and tools and our businesses. When we look ahead to 2022 and beyond, We focus on 3 components for our growth. First, we will build on the lessons learned over the last 18 months in adapting to how we engage, connect and create relationships with our clients and prospects. During this time, we've embraced new digital technology that helps us better understand the challenges and opportunities our clients and prospects face and also enables us to provide timely and relevant information, thought leadership and related tools to help them with their most pressing needs. And while we've adapted to our clients and prospects shifting their research and buying processes to digital platforms, we continue to invest in the relationships and the level of service that our clients expect from CBIZ. We've incorporated technology where it brings value, but we'll never lose sight of the personalized client experience that has helped us to build the long term relationships we enjoy today. 2nd, we continue to capitalize on our position as a multi service provider with a breadth and depth of expertise in services that are unmatched in our industry. Our broad array of services enable us to develop the multidisciplinary solutions that are responsive to our clients' and prospects' most urgent needs. You've heard Cvis described as a true one stop shop and we've proven how this approach sets us apart in the market and brings value to our clients and prospects. We will continue to make investments in top talent, teams and services that further build out our solution strategy As we continue to strive to be the premier provider of professional services for our clients and prospects. And finally, We are currently in various stages of discussions with our existing pipeline of acquisition opportunities. Our pipeline is stronger than it's ever been And it affords us opportunities to enter new and rapidly growing geographic markets to add scale and capacity, especially in some of our core businesses and to diversify into service lines and enhance expertise in areas that we know are important to serve our clients now And well into the future. Our processes are designed to identify companies that are the right fit for our business and our culture had to integrate these teams in ways that enable long term performance and growth. Given our track record, we are working towards increasing the number of completed acquisitions And pursuing even larger targets that bring size, scale and capacity to strengthen our business. We spent the last 25 years building a business focused on growth. Our performance and results demonstrate that success. Our continued investments, steady management and innovative approach have prepared us for what's next, and we look forward to the opportunities ahead. I will now turn it over to Ware to outline our guidance for the remainder of 2021. Thanks, Jerry. Earlier, I spoke about our longer term financial goals. Longer term, through a mix of organic and acquired revenue, we want to grow revenue within a range of 6% to 10% or more depending upon acquisition activity. By leveraging expenses to expand margins by 20 to 50 basis points per year or more, we want to grow earnings at a faster rate and revenue. Obviously, both 2020 and now this year 2021 present anomalies to this longer term set of goals. A year ago in 2020, as the pandemic unfolded, we suspended annual guidance. We finished 2020 with relatively stable top line results with earnings per share growing at 11.8%. Although a high level of uncertainty persisted going into 2021, we wanted to restore guidance this year. To reiterate our guidance and outlook for 2021, we expect revenue growth within a range of 10% to 12%. Adjusted to eliminate the impact of the non recurring legal settlement and the gain on sale in the Q2 this year, our outlook is for full year earnings per share to increase within a range of 12% to 15% over the $1.42 achieved in 2020. Our full year effective tax rate expectation is 25%. This can be either higher or lower Depending upon a number of factors, our full year expected weighted average share count is approximately 54,000,000 shares. As we reported at the end of July, our first half results through June 30 were very strong. The acquisitions we have made during the past 12 months are performing very well. The service lines that were impacted with lower revenue a year ago are now recovering and our core business remains stable and strong. First half expenses were lower in areas such as marketing, travel and entertainment and benefits and healthcare costs. These lower costs provided a tailwind in the first half. However, these costs could turn into headwinds in the second half this year. Discretionary marketing and travel and entertainment expenses may increase year over year in the second half As we restore marketing programs and as we extend efforts to more actively get in front of clients and prospects. In the benefits category, health care costs were low in 2020 and remained lower than expected in the first half this year. There is a lot of uncertainty, but we expect benefits, health care costs to begin to normalize and perhaps increase in the second half this year. Our balance sheet remains strong. We have the means to continue with an active acquisition program and we have a desire to continue with further share repurchases over the balance of this year. So to recap, first half results were very strong And we expect full year revenue to be up 10% to 12% over prior year. And we expect full year adjusted earnings per share to be up 12% to 15% over prior year. As we indicated during our conference call at the end of July, will revisit full year guidance at the end of Q3 and we will update you at that time. So with those comments, I'll turn it back to Jerry. Thank you, Ware, and thank you to everyone who attended our investor presentation today. We're going to take a short break and then be back for a Q and A session. We'll see you back here in approximately 10 minutes, Good morning and welcome to the Q and A portion of the 2021 CBIZ Investor Day presentation. Just as a reminder, On the left side of your screen, you will see a box where you can submit a question at any time. For the next few minutes, we'll be directing questions from you to our Stephens leaders. So let's get started. I'm going to kick off today with Jerry. Jerry, our first question is about M and A. You talked a lot about the importance of your M and A strategy today and CIVUS just announced a new acquisition at the beginning of the month. Can you speak a little bit more about the importance of this acquisition and how it fits in with your overall strategy? Of course. Thank you, Elizabeth. Our strategy as it relates to mergers and acquisitions is to acquire the most highly regarded firms in each of our industries In strong geographic markets, in businesses that help us expand our scope of services or industries that are attractive and well represented By our clients. So as it relates to the recent acquisition of ChezLabad Doberstein in San Francisco, It really fits that first category, which is to help us expand our geographic reach. We've long looked for a firm in the San Francisco market, 1 that represented clients that were of the profile that fit our client, one that represented our cultural values, one with very strong teams, 1 with terrific leadership and we found all of those things in Shay Labad Dauberstein. Very excited to have him join our team. Great. Thanks, Jerry. Let's stay with M and A for another minute. I'm going to direct this question to you, Chris. During the presentation, Jerry talked talked a little bit about an acquisition in 2020, the ARC acquisition, which added to our advisory services and financial services. Can you talk a little bit more about this acquisition in particular, but also are there additional niche or specialty services that you are targeting through acquisitions moving forward? Yes, that's a great question. So we're always looking at the market. And IPO prep services are at an all time high as far as demand for those services. So that's exactly what ARC does. ARC Consulting was a group that we had worked with in the past. We knew about their culture churn reputation, their leadership team is incredible and it's in a very strategic market. So candidly, Arc was really a no brainer for us And it's I would add it's doing really, really well since joining us. As it relates to other services, I would say cybersecurity, FP and A and data analytics would be some that we are focused on right now. Great. Thank you, Chris. And again, before we move off of M and A, Jerry, maybe you could just give some comments on your view of the current deal environment? Well, certainly it's not getting any less competitive, right? So I think the M and A environment in our industries like in all industries is robust right now, but we're having great success. As we indicated, our pipeline has never been fuller. I think we have a very compelling story to tell. I think our experience over the past 18 months, certainly as it relates to the pandemic, has helped us to tell that story in a way that many others can't. And as a result of that, we're getting great traction and are very pleased with the size of the pipeline and the transactions we've been able to complete over the past 18 months. Great. So now let's shift gears and talk a little bit about talent. There has been a great deal of discussion about the great resignation As employee turnover appears to be increasing in a number of industries, including professional services. So Gerry, starting with you, can you talk a little bit about how by this trend and how your view of the recruiting environment has changed, what you might be doing differently to fill those vacant positions? Yes. Thank you again, Elizabeth. What I would say is there's no question that this is among the most competitive environments that we've seen in many, many years for our workplace. With that said, we're very fortunate that when we look at our amount of turnover, the rate of our turnover recently, it's really very similar to the rate that we've seen in historic years. Take the kind of the 2020 period out where everybody was kind of locked down and really didn't change employers. But when you look at our current rate of employment or turnover compared to Prior years and historic periods of time is pretty consistent. With that said, we would never take it for granted. We know that in order for us to be successful, We have to be able to attract and retain the best and brightest talent. In order for us to do that, we need to offer them a competitive or a very compelling Our work environment and career environment, and we work very hard at that. You've heard a lot throughout this video about the things that we do as far as training and development, our core values about around our people matter. What that really means to us, our people matter, is that if it's important to our workforce, important to our team members, it has to be important to us. That includes their training, their development, career pathing, supporting them, active community involvement and the list of things that you've talked about. So This is not a recent thing for us. We've been working on it for a very long time. As a result of that, we've we're very proud of the culture we've built. You've seen the workplace awards. And all those things I think are contributing to the success that we're having in retaining the best and brightest workforce. Great. So also staying with talent, Mike, I'm going to direct this question to you. Certainly, your investment in B and I Producers for some time has been critical in achieving organic growth. Can you give us an update on how those efforts are going? Yes, Elizabeth. We're Extremely happy with the success we've seen over the last couple of years. We've talked a lot about our investment in organic growth and producers, Bring on the right talent. Jerry is right. The competitive environment that we're in, it really goes to when we put our Together when we onboard our new talent, when we exceed the projections, that all goes to everything that we've been working on. We're very happy with that. We're looking we talk a lot about employee benefit Producers, but we're looking to expand in all of our businesses. We've enhanced our recruiting team, our internal recruiting team and the resources that we're using. So We're really going to look to accelerate those efforts and happy with the results we've had to date. Thank you, Mike. Now let's switch gears where I'm going to direct this question to you. Given CBIZ's performance so far this year, do you have any plans to accelerate the buyback of stock? Yes. Thanks, Elizabeth. We have been actively repurchasing shares, particularly over the last shares, particularly over the last 30 months, we've repurchased approximately 5,500,000 shares, 2,000,000 shares through the first half this year. And at that time, I think we signaled an intention to continue with that program balanced against our first priority of making strategic acquisitions. But we would want to continue to do that, all things being equal, of course. Now let's take a few moments to dig into the businesses with some questions that are coming in. I'm going to start with you, Chris. There's been a lot of discussion lately around Tax legislation and potential changes to the tax code. How does this impact your clients and customers? And how does this play out for CBIZ? Yes. So what we've seen in the past is whenever there's pending tax law change, the demand for our services actually grows. Clients often Don't know what it means, needs help interpreting what those changes are and direction they may want to take. So there's a lot of talk about corporate tax rates Going up in some other things and candidly, if the past holds true, that will only increase the demand for the services we provide to our clients. And now, Mike, to you, you mentioned during your remarks this morning about the disruption of technology in your business. Can you talk more about the integration of technology with employee benefits and other components of the B and I segment? Yes, sure Elizabeth. The central HR platform that we introduced in 2019 definitely gave us the opportunity to go up market And truly differentiate what we can provide to our clients as they look to onboard their employees and provide them with benefits and then retire those employees. The integration that we have in our client service model can definitely help With the seamless operational efficiencies with our clients and how we interact with our clients. So that central HR platform allows us To connect employee benefits, payroll and retirement plan services. And we really think that's a differentiator in the market. Great. Thank you, Mike. And Jerry, coming back to you, could you talk in more detail about the size and structure of the corporate development team at CEVA's? And how many professionals you have tasked with sourcing and executing on transactions. Yes. So Elizabeth, there's both A formal number and an informal number. Let's talk about where we source transactions. We really source transactions with our own internal team, Which we've put in place over the past several years, that internal team dedicated to sourcing transactions right now. We have 2 individuals that are Purely dedicated to that, but we don't stop there. We also have very close relationships with the intermediaries. So both within the accounting and the financial service side of the business as well as the benefits and In the German side, there are a number of intermediaries that work closely in those industries. They are subject matter experts. They always have their finger on the pulse and they know who we are. We are talking to them all the time, talking to them about our strategy, talking to them about the type And quality of the firm that we're looking for. And so we get an active flow of transactions through those intermediaries. And then finally, each of our business leaders, the people that are running the businesses, our local office leaders are also out there Sourcing transactions for us. So it's really a combination of channels that we tap into to fill the pipeline of acquisitions for us. Great. And let's stay with this topic for another moment. And Jerry, I'll direct this to you, but also where you may want to add some comments to this follow-up question. What is the largest acquisition that CBIZ would consider from a revenue perspective? So we've talked about recently that the pipeline has never been fuller, including some larger When we talk about larger transactions for us, say over the past 24 months, we've had transactions in our pipeline that are Between $100,000,000 $200,000,000 and that would be relatively large for us. That's not to say we couldn't do a larger transaction if it was the right strategic fit and the circumstances were right But usually, when we talk about a much larger transaction, it's usually in that $100,000,000 to $200,000,000 on range revenue. Yes. The only thing I would add is, I would agree our ability to digest and integrate an acquisition is probably paramount. From a financial resource perspective, we've got considerable resources. Today, we have an additional $200,000,000 if not more Available on the current line of credit, but we could upsize that line of credit to within a $600,000,000 range if needed or even beyond. So I never want to say that financial resources would constrain our ability to grow through acquisition. Thank you, Ware. And just as a reminder to our viewers, you can submit a question will be at any time through the left side box on your screen. Let's go back to Mike and Chris for a follow-up question on the businesses and kind of what's happening with our Clients, certainly, this is a very complex business environment. Can you talk about how your customers are responding to the changes in complexity, the increase in complexity and impact that is having on them and your business. Chris, why don't we start with you? Sure. So you only have to look at last year To see that in action with COVID and with all of the programs that came out, clients were Really confused about what that meant and how to deal with those. So they look to us And we really hit our stride, I believe. We put on a series of webinars and white papers and involved digital means to connect with clients and really, really help them through a pretty difficult situation. So that is one real example where we were able to really bring the true power of CBIZ and the services we provide In a way that got clients through a pretty difficult time through the pandemic. Yes, I would just add that with regulation, With environmental, health care costs going up, cybersecurity, what's happening with weather, the risk associated with all those things, Our consultants are really there to help their clients think through all those things as they identify exposures that they have to protect against. So I would agree that Anytime there's changes in the environment, we're here to help our clients and we bring that expertise that everybody's looking for. Yes. I would just add a little bit Color, Elizabeth, around the multidisciplinary approach because certainly things aren't becoming less complex or becoming more complex. I think what positions us uniquely in the market is that there is not another organization with our breadth and scope of services serving the clientele that we're serving On a national geographic basis and again we saw that last year in the pandemic where the needs weren't non aligned. The needs were across service lines and we were so uniquely positioned to be able to bring solutions to those clients, holistic solutions to those clients to help them with those needs In ways that our competitors couldn't and that really I think resonated with the market and resonated with our internal teams and has really kind of set us are on a path going forward to look holistically at that client and bring multidisciplinary solutions. Great. Thank you all. Jerry, let's stay with you. This question comes in about the evolution of the go to market strategy. Can you talk a little More about some of the change that you experienced over the last 18 months and especially when it comes to lead generation efforts. Yes. So I mean, Chris referred I just referred to it a little bit. I think what we really learned in the last 18 months is that increasingly our clients are at least touching us initially or prospects are touching us initially Through digital means, they have needs, they search the web and other sources for solutions. Like I said, we are so uniquely positioned. We oftentimes come up in those searches. So they're being introduced to CBIZ and our Breadth and depth of services through these digital means. They're also far more receptive to learning and thought leadership through those digital means, and we saw that in action over the 18 months and we expect that to even accelerate as we go forward. Chris? No, well said. Just to echo what we did last year is a case study of the breadth of services that we have, not only in financial services, but in benefits insurance as well. Thank you. Let's go back to M and A for another moment. Are there specific geographies that you're targeting as part of your long term strategy? Of course, right. I think we had a map up there earlier in the presentation where you saw those major markets, right. So we really as far as geographies are concerned, We look at geographies where we have a pen in the map, but we could always benefit from additional scale, and that's virtually everywhere, right? Some places come to mind might be Atlanta, Georgia and Texas and in various markets, but really what we look at is the strength of the market. If it's a favorable business climate, a growing business market with strong SMBsmallmiddlemarketbusinessenvironment, And that's an attractive market to us. Again, prior to this year, we would have said San Francisco is high on that list. Bellevue, Washington, the Seattle Greater Seattle market would have been high in that list and we're very fortunate to put some pins in the maps. But again, there are a lot of other That fits their profile that we're targeting. Great. Thank you. And we have time for just one more question and where I'm going to direct that to you. Could you tell us what signals there will be that will point to the time for a dividend? Yes, that's a great question. Certainly, dividend considerations have merit, we consider it periodically. We discuss it with the Board. At this point in time, we've got Considerable opportunity to continue to deploy capital towards strategic acquisition. And at the same time, we want to continue to do accretive share repurchases. So at some point, a dividend may be appropriate, but not yet. Thank you. And with that, I'm going to turn it over to Jerry for some closing remarks. Thank you, Elizabeth. On behalf of our entire Board and our senior team, thank you to everyone for participating in today's presentation. As we conclude, I want to take this opportunity to thank our analysts and our investors for your continued support. And I also want to thank any prospective investors for taking the time to learn more about CBIZ, our value proposition and our vision for growth in the future. Thank you again for joining us and have a great day.