NSP - Earnings call transcript Q4 2017

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Operator

Good morning. My name is Devin, and I will be your conference operator today. I would like to welcome everyone to the Insperity Fourth Quarter 2017 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions]. [Operator you. Thank I time, to today's introduce At would speakers. this like

Vice Paul Joining President; the Senior I’d Chief like Sarvadi, over this Board ahead. the Douglas Treasurer. are Officer and of and Financial and Sharp, to Rawson, of go time, Richard Sharp. Chairman us Mr. At please Finance, Officer; Chief Douglas call turn President to Executive Sharp,

Douglas Sharp

appreciate you joining We morning. you. Thank this us

by outlining our plan morning’s this begin for call. me Let

fourth discuss to quarter results. XXXX going First, XXXX. initiatives to discuss financial for return XXXX recap of our provide of will full the financial year guidance and I’m the Paul the details year XXXX the our then quarter will first I full our year plan. and major and

call question-and-answer Richard a then We session, available. the will I and end Paul, be will where with

to Now, you remind which may forward-looking like statements before during or that Mr. subject uncertainties would begin, call myself, we Mr. Rawson, make risks, to today’s and assumptions. I Sarvadi, are

addition, some our financial non-GAAP include may measures. In discussion of

company’s Form more to which Web For results uncertainties filings, available could measures, and that of non-GAAP statements, see risks site. the today, on reconciliations the actual financial please the discussion any including of materially cause and X-K from differ filed detailed forward-looking our public are a

fourth of share. to strength split. of we pricing begin our stock after XXXX our high growth, Adjusted plan and account of by million. recent let fourth into continued XX% quarter increased This direct $X.XX discussing as X-for-X guidance worksite XX% call above line Adjusted XXXX an today’s EBITDA employee results executed QX Now, $XX.X quarter for of me totaled our the cost is per record bottom $X.XX increase over end setting of double-digit $X.XX management. taking a to EPS and over the the

the for retention few outcomes campaign. XXXX minutes, the the paid once of by we hiring year. in and minimal Net first of loss reflected be in will a January of remained worksite guidance will Paul base the sales our paid again worksite QX increased a quarter. by XX% by by quarter XXXX quarter discuss was details, employees benefit are during compensation following employees and Client and net growth, two results tax, QX slight again retention each XX% in in These client And XX% detail the our worksite strong sold of XX% the continued on following averaging profit months. as gains experienced and month QX followed a workers’ As XXXX. as the programs. strength over Gross employee of payroll successful increased favorable typically for in over pricing enrolled average over in was in fall as the first

quarter adjusted sales operating increased sales number Our Advisors to in operating Performance additional increase associated QX fourth $XXX and an and over expenses the total volume. XX% of included of XXXX million expenses QX tied higher plans also deductions. QX to XX% QX included to with outperformance. commissions a XXXX QX into to incurred of XXXX stock-based of related additional additional our order compensation vesting cash our compensation from acceleration shares our week, for the stock-incentive maximize restricted in Last tax accrual Business and we the

tax from restricted associated of XX% vesting rate benefit tax of shares offset by of effective assets of a tax corporate largely a impacted XXXX. the rate acceleration XX%, was deferred tax to QX Our QX of QX by 'XX the new of to write-down with of the a

both which XX% Adjusted In year Efficiency to we over compensation our increase plan increased our and EPS $XX safety incentive tax our our adjusted plan increased together, worksite related profit EBITDA slightly Small expenses employee increased in clients’ all claims outperformance, over employee costs key compensation operating management. to million, post per summarize our adjusted of of and and XXXX results. our XX% XXXX. XX% significantly in the managed Paul, excluding $X.XX XX% from for in Now, month non-bonus effective XXXX only over before record I $XXX basis stock client in budget. additional increased Adjusted from EBITDA our discipline over adjusted changes the declined XXXX increased election to cost net above our of full Workers’ trends. benefit turn XX.X% direct profitability a increased payroll XX% the an to recently for call me on XXXX of split per XXXX cost Act, mix, migration. continued high pricing resulted XXXX Gross XX% percentage outset let the to and at on operating employee passed as budget Putting in plans effectively management covered due area, to growth expenses the a Business operating X.X% we metric, $XX XXXX. health pieces of payroll with the around by a worksite was as benefitted from line high in record year. cost of When

shareholders in we repurchases. to with and course $XXX form XX% the return of and position the repurchased in shares special Now million year. by December share the XXXX, over quarterly dividend in May balance a $X were strong and flow, the paid our during dividend XXX,XXX increased sheet our in dividends year of We of cash to

to liquidity share attractive a also which shares an and our the increasing stock build of and We reflection price. X-for-X completed is split of serves a value shareholder enhance

year and sheet forecast Our facility. flow million $XXX us credit to provide cash as to in under for excellent recently $XX our liquidity shareholders continued the should with cash expanded availability continue remains million to and available with allow level strong we ended of This of strong return combined balance a adjusted credit our XXXX.

call the to over turn like to I’d time, Paul. this at Now

Paul Sarvadi

and that results year for today outstanding Good game three including just Thank the everybody. you, My highlights in plan year our our for successful our third XXXX, and retention Doug. row record in in another setting completed, comments morning, areas XXXX. a drove selling campaign will fall cover

this the EBITDA major XXXX this to our excellent of cost that year-over-year XX% model strong resulting for risk, are XX in more strength highlights demonstrate adjusted over XX% from repeated and million executed last XX%, years row in in over XXX of from XXXX doubling pricing, direct This the million. than optimized as execution six three Our a growth management There noting we while our of success unit plan continued operating double-digit worth period company. plan our was across of results and demonstrated and for business growth, recipe leverage. the in

our our XX% the aggressive to budget, the to sales number sales XX% for two First, of sales we’ve levels calls funnel the prior year. full training closing of targeted of constant at new competence in This sales successfully validated total proved business system XX% the trained increased increased our discovery year predicable Business by maintaining increasing sales Advisors Performance in in key same level efficiency rate and years. last nearly both the at metrics efficiency, resulted was reach of XX% growth and of average profiles for while XX% by of as consistent, sales profiles BPAs the business our

leads capability provide XX% this support Our sold qualified XX% corporate of to a leads BPA XX% in sufficient marketing to rate. number results up and the XXXX. in worksite were validating highlight Total resulted also growth employees XXXX, of our increased a key in from

XXXX ever profitability growth best our rate year in retention of major forward. which Another both going in this a validating and our from was client rates achievement XX% XX% to second This change in trend key in follows historical XX% approximately and This XX%. systemic XXXX retention is key metric. was continuing annual XXXX

solutions last success forward with for in move deploying our year and XXXX in both offering. designed been XXX,XXX model. was administration as the for user through the All on have HCM co-employment traditional also workforce clients a the true system Premier highlight Another platform co-employment employment traditional only the leading expansion the was space Insperity to moved along the over for schedule service tremendous new technology accounts. relationship groundwork critical into Insperity has laying and been bundle. major upgraded

unit Hurricane the the and upgraded expected our formed to careful The in the pricing managing than earned by than over of in highlight ahead collected our history, is we workers’ and During look this as of liability. reflecting and allocations. direct I’ll an management weaker and The healthcare, largest net fee beyond. to X% and the XXXX historical our for practices discuss pricing due have which say objectives. This final few more technology, compensation year, as management client and we more price fee risk management such offering meet or and risk loss on offerings Harvey. is to in combination our strong offset lower of a employment mitigation highest demand than to to client point redesigned resulted our cost division caused the new hiring surplus minutes subject and base growth we acquisition, our in a for

and for important the across a the fall So always cake two we successful This on critical sales very the company, was company but retention year had excellent the an campaign. reasons. icing is for

January for coming starting First, rates January. heavy determines worksite year-over-year the for year paid end new rate year. during point low rate in renewal renewal our our of typically determines the end annual the the of sales and employees period growth This combination for growth

means on, base of re-priced. departing client new year end the current of accounts terminating that relationship January is Secondly, and renewed coming approximately XX% new at the or clients our clients in volume being

So our including same fall our XX,XXX over also reflecting and of goal foundation in This employees. This the base organization. business, achieving strong XX% momentum for campaign ahead. new outstanding the was was pricing increase year’s an XXXX year in sales the XX% for our selling client profitability the of January, worksite snapshot in period sales renewed sets of the

also the quarter. detail retention to some Our outstanding year-end transition low. client next was We campaign a be go provide through and with to fully February retention record have we through January attrition still the near more on will

to However, in to basis in employees starting point XX.X%. a provides for XX.X% the we of for XXXX January step expected worksite is year-end range a paid from and know growth unit up acceleration our our

follow are expectations our confident at the cost. This to to the to a puts at of produce also matched on upside have from in the manage have renewing cost conservative be our some We current areas we in successfully our as beginning for position and direct practice these pricing pricing year allow accounts campaign direct we a trends to of the us and to historical year first unfolds. fall efforts new look and

plan of for ever the at ahead plan ended Business we been several the in strongest most year We on Now which back number going our we of into look the hired a with Advisors. BPAs our XXXX, importantly we’ve total in in position the the XX% have year. as Performance at wind with ways, new is being increase

In and event was coupled This an days organization addition, we sales outstanding aligned XXXX. expectations convention our celebrating completed just Insperity focused of with to year three and for last training. year intensive is annual exceptional the sales meet

new believe with in are sales marketplace. can optimization workforce sales efficiency process sales a energy towards to of also forward. demos going We win in leading our technology before, never Conducting we to like position which is the adding our contribute technology the helping

development enhance Premier. and further expect XXXX in leverage to Insperity We

reform base from competition offering with This our flagship client coming very our within for certainly last makes this accelerate and employees. could also a hiring further even base year into the are base. providing our hire benefit different advantage We big Tax key within from environment optimization more This our Insperity year. with client growth workforce competitive for and benefits dynamic a addition to clients, improving appealing robust ability our retention the within client automatic more in can employment their improve employees. to sales to company dynamic

initiative major side-by-side implementation of be for is will the Our time. solution full workforce our for XXXX the offered first administration workforce which our offering optimization

sales this be option during the this in also upfront process testing fall approach recent campaign. offering will the after right We

workforce Business our preferred. co-employment between traditional contrast providing consultative Advisors optimization actually greater a positions Insperity and while in greater role a the on have more allows clarity emphasis traditional for Performance an if employment This results We option methodology determined of this and advantages for in employment. and

positioning and the across mirroring traditional applying of becomes administration our the deep Insperity longstanding ensure expertise in We experience Insperity employment to workforce from in optimization workforce most the solution marketplace comprehensive are Insperity more the of than Workforce administration one made care our clients for in depth breadth co-employment category competitive of the will space XX distinction experience space. and services level and same a that Insperity of years. has also of

growth sales higher complementary central as execution full this to efficiency, catalyst including be operate and since specific our Insperity, several greater client our strong increased completed five-year a with for enhanced employment contribution plan ways model detailed we to and business gross implementation, benchmark continually five-year are we is will against At XXXX, going-forward three our our Our to profit plan. successful When traditional believe plan outperformed we commitment in this in acceleration. option we retention. the and years. Due to

for of our as we for services depth “One November, emerged on of across we retreat from the plan. as this our to that level each life. unique offerings customer ahead in was The conducted Insperity” leveraging year, moving our strategic course So closing of management to plan five-year and all breadth, care the next and earn the were a theme in end set board the

forming which and growth acceleration, technology leadership, of factors be excellence, will around these this development. teams are risk optimization each key success We operational plan for talent

an of five-year In our by tax new our made gain have the and alignment reward recent also plan. reform to we to on addition, recent made employees achievement in investment performance but focus a legislation possible

total returned three group. and dividends to in the through $XXX.X shareholders shareholder we share repurchases number rank peer last years, Over our and return have among million one

of greatly which any company Richard in that this there to will a As also over of our over work contributed our His on came the exemplary delivered be Directors. extraordinary contribute our Board to extending plan, to an a gotten be see retirement unique I I announcement PEO into future. Doug. personality insights have hope key developed goal commitment contribution an to and time, continue know last an remains however, XX Many to add upcoming May. shareholder of on and Richard Insperity successful way continue sense Richard’s the challenge humor have like and career. stellar Insperity road years. official relationships the to This and well to at part this the cannot our returns of implementing entire on the call benefit on Richard career I’d have new before greatly his concerns we of the extending have Insperity He him been will we you vendor One the will At knack he like years. to would the many. company actually in are his recent missed is industry comment overcoming recent retirement’s of and President, to basis; have you of his opportunity Rawson’s the for essential overstated. our to day-to-day opportunity to congratulate were as pass back ethic,

Douglas Sharp

Paul. Thanks,

Now full let me XXXX our the beginning provide with year. guidance

of employees are forecasting As XXX,XXX range resulting increase mentioned, we Paul over XX.X% just to average for in a XXXX. paid XX.X% to worksite in XXX,XXX XXXX

accelerated increasing by worksite Business Our trained year followed with line employees, of the in over upon number point the Advisors. Performance based of starting January forecast growth remainder paid the of is the

year and full XXXX, consistent client net we in the our base with forecasting XXXX. client retention For hiring are

our area, mix, As cost, trends. gone have for healthcare and our of profit including analyzing usual budget pricing and client gross we direct workers’ process compensation claim through

manage we Our developments upside forecast trends budget the year. cost the to the cost over to favorable with for of direct leave pricing as year intended direct course begin and the conservative process a is and

Also, in and Performance model development. we investment marketing execute our and Our our new technology continue to as including operating high-tech long-term high-touch, infrastructure, service opening in hiring growth growth plan in additional security of plan, channel includes will with invest personnel offices sales and we further the our Advisors, five Business programs.

plan investment a from also million investment $XXX in leverage in stable of XX% The XX% to $XXX continued new of bundle, the gross administration forecast growth, traditional of our million employee operating million worksite employment XXXX. $XXX offering. for workforce to adjusted EBITDA includes Our in in combination to to our leads XXXX improved and an increase range operating profit

$X.XX XX% range Both shares the the We EPS tax increase $X.XX. year for effective assumes EPS are reform. average to rate bonuses $X.XX full XX% XX forecasting million XXXX excludes This adjusted of XX% and a of a full in to tax a from year impact to to be one-time outstanding adjusted after in of guidance adjusted and reform our first XXXX quarter recently our tax paid to considering EBITDA and personnel. announced non-management forecast

average XXX,XXX. are increase we employees QX quarter, of first the XX% over for to in XXX,XXX to worksite XX% of a resulting as Now an XXXX in paid range forecasting

increase over million an adjusted $XX $X.XX QX QX XX%. range an increase forecasting of to forecasting XXXX adjusted are to EBITDA to XX% in and XX% a XX% from $XX of of of million, to EPS QX We $X.XX,

which to performance-based Our each tax QX lower effective of associated includes forecasted year EPS than quarter occur the the full first which of an with our benefit shares of XX% year. adjusted tax rate guidance due vesting during the is rate tax

in our mind in taxable line up with limits their lower over conclusion, on are are than are earnings deductibles that and costs are level payroll As pattern, worksite we year typically for and In year of line are earnings in expecting higher are keep our XXXX. benefit our surplus great higher QX and of the tax pleased met. reaching quarterly growth top the strong as another a in quarters. remainder and QX And bottom wage we XXXX prior in particular, employees to subsequent results step

time, call I’d questions. like the Now, at this up for to open

Operator

Instructions]. [Operator

Jim comes with line Analysis. ahead. go of the from question First first Please Your Macdonald

is line open. Your

Jim Macdonald

morning, guys. Good

a of growth you plans maybe in XXXX, more your in QX more BPAs little get number want to for had for the your Just XXXX? BPAs a bit little and into assumptions on

Paul Sarvadi

our that accelerated ended prior. the XXX year – of of over at right ended the year. kind the at to We XX% Sure. year in the we close number last half number the plan our We the of increase year

over and ahead, at we’re of year. course kind we course to the we the The of add on have average of looking We’re continue training many trained new. year-over-year about kind that since of over the don’t looking XX% number really we’re year feel at a will

So game that’s plan. the

Jim Macdonald

trend, you’re could in benefits what and bit a talk expecting benefit little how on And XXXX? trended Okay. your maybe the quarter fourth in of about sort you

Douglas Sharp

quarter’s down results the year all obviously this year. year, QX. of all medical of just side trend Yes, going the the ended fourth in in pharmacy disability, about vision, X.X% to Sure. benefits, what Jim, that was And quarter medical, best dental, about for the on includes – we were is a which the the stuff the the terms really on our up. And other X.X% is actually we’re seeing up it was but year to full be trend seeing good trend we’re the for total

together some And so is put coming we went the that that back are ACA when away along 'XX. all in there taxes 'XX that – with in

we range in looking all together, of XXXX. put for low it we’re kind the when So X%

Jim Macdonald

ask. and else got more let That’s I’ve I’ll one helpful. someone

So and year you’re similar was assuming as last low. you year said the remember net last right, hiring in I if pretty base

very hiring are much still assuming you your in So plan? not net

Paul Sarvadi

is though things pretty low. to we – think one think I want going Yes, of employees up, we even supply is is cautious the demand for be the about

have But help we’ll control that roll division kind are for find open? a benefits on and our will are is, customers that able things and bring and advantage. those the an the question attract large to we people. big of people the have be our and have rock so people Now retain company They to they’re recruiting degree. our to able to fully And people ready don’t jobs customers and

keep where And it, we forecasting of it’s so of it we’ve until said we’ll see been for purposes. kind kind

Operator

Sommer Your Please Tobey next comes ahead. from question the with go line of SunTrust.

Your line is open.

Kwan Kim

Thank Hi. my taking for This is questions. Tobey. Kwan Kim on you for

you. as more retain more a on of ago? First may update to large your Thank customers to your off, you outgrow strategy able year larger today they of customers could retain existing you Are services? the us versus

Paul Sarvadi

to Kwan, the Yes, develop you, for division – question. our we continues nicely. Thank midmarket

offset year core you that they in we more see I met of with of marketplace last really for you have of were choppy year, really nice have gotten division. area a left, and team threshold midmarket. it’s now than again a kind customers timing course midmarket the Retention other for and As integrated year when that’s selling some and we the midmarket nice these leave But I get goal as clients, lift because something don’t strong because in when into in of as to have know year pipeline them come the large end seventh Last have XXXX enough But coming highlight for good our a six nice client at next from in way and almost over. a year. we’ve be I was our we companies our little for any midmarket acquired sales for largest had going year year to a highlight put had go, upside figured but that much we’ve last they but we they’re enough they really they’ll the acquired. our great with control 'XX, was do a

Kwan Kim

front insight for you on you’re your and the healthcare could outlook And tell some seeing Insperity? and cost what on the us markets helpful. healthcare give cost That’s us on

Douglas Sharp

are taxes a seeing of Sure. business for seeing of of was X some now. driving had scenario there’s that we XXXX. a the this that kind the are But – minute big enough case I one what migration the with that of little in the year. that X%. right including factors and an that bit think the step in We to marketplace It mix excellent is something going well on the trend we’re worst just X.X ACA of a mentioned below year we’re plan up, for ago XXXX. And

just a have we the but think X% to So we works go out would year. as marketplace see it still be we through the trend great how in

Paul Sarvadi

think think the worksite continuing as we’re we as and our group far that benefits buying marketplace large, how model into I their advantage have at to the to I and families. validate comparing workforce we’re employees built our and optimization how Yes, clients,

Kwan Kim

you very Thank much.

Operator

Your comes the Martin go ROTH Capital line of question Please next ahead. with from Jeff Partners.

line Your is open.

Jeff Martin

are guys. morning, How Good Thanks. you?

Paul Sarvadi

Jeff. Hi, Good.

Douglas Sharp

Jeff. Hi,

Jeff Martin

I year. to month XXXX. your for expectation could was me sounds that the that be on per you it if It wondering similar based your for per a gross on interpretation? Is comment employee profit you expect to to worksite correct commentary

Paul Sarvadi

you when year be to parts Yes, obviously there’s pieces somewhat a all conservative at the that. like of And put all in moving in bunch range. to together, each the beginning we that of try

of So range through last that it’s from to we’re of then profit we’re kind year. the that but year to – the in gross outperform managing hoping course of slightly areas. down the And start

Douglas Sharp

definitely from we for up what budgeted XXXX. It’s

Paul Sarvadi

absolutely. Yes,

Jeff Martin

my highest been in least it’s it’s Right. five Based the numbers, on at years.

Paul Sarvadi

Yes.

Jeff Martin

past to regarding Paul, year you that you’re for this and outside and around full-fledged? the to comment the playing and with ready you’ve something more administration been testing taking the workforce transition offering could Is that midmarket? it

Paul Sarvadi

literally there role right and found how discovery in what whole have the created foldout and year Yes, And then variety of a in the brochure of that describe on that page front. that meaning up on we the the rollout track a last side-by-side in optimization, side-by-side And talk administration to a the spent two call discovery differences. process we and fall last some absolutely. can up is call we revised tested call. new what important sales really We dialogue puts testing puts I’m workforce to are one a the we some the year kind front such strategy. the the consultative compare of of elements and BPA our it so a exciting of because right you workforce

Of the our course to traditional employment having of right But upgrade a discuss prospects in in in in traditional and a lowering co-employment, are risk along is already comes we’re being up the to group of to we’re the able and step solution comprehensive, next employment being really describe buying an traditional a cohesive most calling employment employer solution. of advantages, with on administration the workforce advantage hone it. great and co-employment that

identify of co-employment. their you be if it’s bring two have co-employment in So that options. as prospect discuss also you’re just gotten fully fear without able course think in customers if And kind customer full we’re have true we’ll workforce co-employment you both to going to And And upgrade to them able when in get many force some more plus to better then that it of every to off be you’re advantages we optimization into into to contrast. about have now employment we’re we’re world that’s family, have awesome able offering we really believe of selling, if the to that side-by-side able in and think our solution. found we’ve options two opposed to ever discussion a that. of will, along the there, traditional of ways. somebody you’re to the going go And administration we some one We trying they that workforce with and opt – of an more without myths for always

of about for for, in Performance confident into scorecard this kind that actually so of more budgets and concept as solutions year and all ties moving among to shoot for and Advisors We’re management built with our Business one of whole of that forward we’ve balanced Insperity. this business that, performance the

bundle co-employment meets best that premium us and the co-employment then we underneath The our need base the we solutions is. services traditional bracket is our of also employment a employment price offering comes did because between traditional of a those think that puts employment And competition market a other are competitive more many in marketplace our that of determine position we their service to in in the marketplace did really how which structure the target and typically customer lot can to what at just the competitive traditional point of solutions services offering offerings. limited actually is co-employment thing the with comprehensive and strong work is priced be

we’ve we’re there created think and in advantage about executing a and plan. out also we the getting nice this So excited out marketplace competitive

Jeff Martin

you. Thank helpful. That’s

Operator

Your the Baker go Please of comes next James. ahead. Michael question from line with Raymond

open. is line Your

Michael Baker

Thanks for a offered shed some I light small association what or obviously could you to health lot. need. the I midsized push if companies know was plans. time a very broad-based a color long on approach have for give Paul, some thoughts wondering of very PEOs your

was association well as to a for to of and of I industry front in think get exchange, solution the will? as in you visibility sense PEOs of a opportunity on what if so as And the just you risk enhancing terms trying that trouble the

Paul Sarvadi

is these cetera, can to are national state, still et And benefit issue the going and adverse reason, That’s people you. health Thank closely are quite kind the way we of good does a have successful some had. the we’re structure that plans way XX-year-old a manage associations election. these for come opportunities And opened always though We we very watching type of And of question. have plans the that Kind changes of insurance, up get have When our I obviously solution across that have a trick a state it’s common benefits. program. for unwieldy. some there even association to from think state lines, and naturally some standpoint open plans it you proven multi-employer are regulatory those potential and association manage one for to at look there. in plans up a by opportunities you

Now when to of it’s it is we solution is plan only comprehensive affects the what of business. us desirable we aspect the but one health very a how definitely do People come benefits one component. advantage for their – have that and the

out. being just doesn’t I for be That happen over time. price able that reason, coming in in years the way to changed, in why that’s one they’re of many, can compared That So long goes to they’re reason somewhere. with to with plan see complete and for for or – has increases marketplace the us out large don’t a we’re at when the et they’re small up, cetera, and anybody many able to have our one not lower price here. that people They price just get

Michael Baker

for Richard the over thanks And insights Paul. your years. helpful, That’s

Richard Rawson

welcome. been You’re fun. It’s

Operator

Please next with Your Mendez of from question line go ahead. Baird. comes the Greg

Your line is open.

Greg Mendez

for my taking My congratulations Greg think just and seeing with is first is regulatory you clients Obviously more good about a environment? on question. Mark Thanks to good question trying you. for was give when reduce, is little discussions color what could just, you’re Marcon a the and the federal we you’re This Hi. the on one year. the having but change bit And for and pockets you’re to regions state great a growth state it’s some just of of of change the of that level, lengths – cities to levels. do are just there term happening are to the changes where wondering there’s with country the states or to going better – I’m because for municipal some seeing things. or harder at stronger lack just business going and municipal

Paul Sarvadi

states multistate are trying going to whole a states stay the course a what’s always of of it’s plate some at have level going content happening always have question, out that’s of But we’re and adjust. federal you’re started regulatory state on out out had What’s that regulations our to of a Yes, of good for to we’ve because changes on affairs cascading environment monitoring loosening government this any folks full to top there’s there. Greg. by the there, team with. on And right, regulatory and kind state

growing that kind not And we’re risk ready if forward. of do as you the a up of for fast. regulation is reduced, federal ramping see as we that. states least will, kind being going What while So at

in We’re of to in fight different go fires place up jurisdictions. come where kind fires

Greg Mendez

When you’re to increase that appeal for place California, making, able some of the example, wouldn’t changes for what think a like you’re – about doesn’t with provide? the that we

Paul Sarvadi

burden double-edge the More for looking for us. solution. for is sword regulation employers. more always it’s Yes, They start a

we So know adds to use bit we do. to the how time, we changes do we and what deal business. so little what that comply with to it’s At do, of we to have that But the same it’s the and grow have a cost.

at And good our We’re we’re client. to it. what delivering part of it’s

Greg Mendez

little but both think running. only about employees? loyalty wondering worksite but program been also those prepared growth Okay. remarks, bit this in dragging the recent worksite employee How that touched on growth, do in just customer you’ve digital also of And then a you the we the your channel not

Paul Sarvadi

continue of close in driven we’re and It last come the are are sponsored even we opportunities on programs; well. mentioned focused primary increase our marketing very leads to I meetings we – localized or that a customer or Those that’s our rate. provide but And corporate worksite to advisors which gone that was have And XX% that’s very leads Yes, And the XX% methodology out employees where produced over we they a our customers. to year. been benefit the program this meetings. by customers at of of efforts a also paid leaning year. customers close worksite our three of current loyalty of highest those kind best from employees the

The is second component program. a channel

the we channels, responsible some We qualified of BPA prospects relationships. And for community, that got some constantly – the of types have so banking delivering digital you’ve different programs, with the so developed; relationships that of certain for number also program. you and our insurance have are got It’s one? some channel excellent we with community, channel up our other And third the managers then channel we’ve programs – types the have what’s channel.

fantastic. digital Our just going effort is

out We And write excellent have have company have of subjects number a there. a we investment quite various there good significant have on digital following they that made generate we across as well. and people activities opportunities our blogs that our a and

Greg Mendez

you. Great. Thank

Operator

comes of question ahead. line Jim Please First with the from next Macdonald Your Analysis. go

open. line is Your

Jim Macdonald

secondly you ask changes of this then see certified any for technical PEO year? Hi, quick place full in with guys, follow-ups. And just seasonality just the upfront. I’d it year couple Do a in a

little companies new some federal Your the tax seen rate’s a the with than that? we’ve Any of other higher on comments rate. tax

Paul Sarvadi

the first. hit Let’s tax rate

Douglas Sharp

tax the qualified state allowing deduction. so no transportation longer income – level, taxes. XX% bridging piece the got also there a the We’ve in Yes, to regarding the the big they’re is XX% rate, up the

if but so – of effective Some sort little X% one of probably rate. stick, it’s lead that we’re to probably bit what additional on still than an that’s trying tax X%, may – that aspect it or you X% to in it’s you get that does on higher a believe our of expected clarification

Jim Macdonald

Okay. And change the seasonality, any --?

Paul Sarvadi

any anticipating great not we’re done, we’ve change. what Yes,

our we campaigns. now sales However, kind three in of set and marketing up essentially have team

there’s not summer, in because think spring, evened So whatever. toward until of most the limiting our until there’s and we kind to will out the investment But are dramatic of be fall. approach about wait more the a Obviously, factor campaign. fall It quarter of is any really or year up. moving end a we the end biggest continue or wait the

see that work to and produces year going we’re a change. if this So that

Jim Macdonald

Okay. Thanks very much.

Operator

back to at Instructions]. remarks. call are questions closing Mr. like Sarvadi turn time. no the [Operator to for this further There I’d over

Paul Sarvadi

everybody to had Thanks thank seeing excellent year, this again, Once an over the us. and you off us look on for joining a the forward we out year joining of great to the road you We today. start course for spring.

Operator

This today’s conference call. concludes

disconnect. You now may

Insperity (NSP) 12 Feb 182017 Q4 Earnings call transcript