CBIZ(US:CBZ)2020-10-31 17:01Financial Data and Key Metrics Changes - For Q3 2020, revenue was $238.4 million, a slight decrease of $1.4 million compared to the same period in 2019. However, income from continuing operations improved by 12.5% and EBITDA increased by 8.3% year-over-year [15] - Year-to-date revenue reached $752.8 million, an increase of $7.5 million over the prior year, with income from continuing operations improving by 8.6% and adjusted EBITDA increasing by 7.6% [15][16] Business Line Data and Key Metrics Changes - Within the Financial Services segment, core accounting and tax services continued to perform well, reflecting steady demand. Total revenue in this segment for Q3 was up 1.1%, with same unit revenue flat year-over-year [38] - The Benefits and Insurance segment saw a total revenue decline of 4% in Q3, with same unit revenue down by 6%. However, core recurring services remained stable, with solid retention rates [40][42] Market Data and Key Metrics Changes - The government healthcare consulting business experienced reasonable growth, although the rate of growth slowed due to COVID-related issues. The demand for these services remains strong, but the timing of certain work is uncertain [19][20] - The payroll business faced some softness due to early declines in the number of people on payroll, but the number of pays improved in May and has remained stable since then [22] Company Strategy and Development Direction - The company is focusing on strategic acquisitions as a key part of its recovery and long-term growth strategy, having completed five acquisitions so far this year [24][31] - The company aims to leverage its diverse client base and the essential nature of its services to maintain performance and position itself for growth as the economy improves [30][63] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resilience of their client base, particularly those with annual revenues exceeding $20 million, which have historically proven to be more resilient in challenging environments [63] - The company is prepared to assist clients with potential new economic stimulus opportunities and has seen a positive response to its outreach efforts [11][84] Other Important Information - The company has resumed share repurchase activity, repurchasing approximately 1.5 million shares at a cost of about $37 million to date [54][55] - The effective tax rate for the nine months was 25.7%, with expectations for the full year to remain within a range of 24% to 25% [57] Q&A Session Summary Question: Pricing power differences between financial services and benefits and insurance - Management noted that pricing is different between the two divisions, with financial services being more fee-driven and not experiencing significant fee pressure in the current environment [72][74] Question: Impact of government healthcare demand and timing - Management confirmed that while demand remains strong, COVID-related challenges have impacted the timing of work, particularly requiring on-site presence [75][76] Question: Visibility for fiscal 2021 guidance - Management indicated it is too early to provide guidance for fiscal 2021 but expressed hope for clearer visibility if there are no further COVID shutdowns [79] Question: Customer response to potential stimulus and decision-making delays - Management highlighted that clients are optimistic about future stimulus and the company is ready to assist them as needed [81][84] Question: Long-term market share opportunities - Management expressed confidence in gaining market share due to the unique value proposition and comprehensive services offered, which are well-received in the current environment [87][90] Question: Complexity of current tax code changes - Management anticipates changes in tax laws regardless of election outcomes, which could increase complexity and provide opportunities for the company to assist clients [95][96]