CBZ - Earnings call transcript Q2 2024

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Operator

Good morning, and welcome to the CBIZ Second Quarter and First Half 2024 Results and the Marcum Acquisition Conference Call. [Operator Instructions]. Please also note, today's event is being recorded.

At this time, I would like to turn the floor over to Lori Novickis, Director of Corporate Relations. Ma'am, you may begin.

Lori Novickis

acquisition, thank discuss joining first CBIZ's results the and conference on half everyone, announced and to also call second Marcum morning, you us for today's XXXX this Good morning. was which quarter and

be webcast call. cbiz.com. this live to transcript A be on replay being can page Relations also a our link and As a Investor is made of and the reminder, found call available the after webcast our will website

both for been our quarter press Investor releases presentations The the have investor half first acquisition Relations website. and posted second results, our and and the page Marcum of to

will will begin call and referenced is and followed results Marcum during posted We financial again, acquisition, website. on our acquisition with by Q&A. of for be our discuss presentation the remarks this then The our prepared Marcum the

in releases we forward-looking the that we financial statements may operations, well can non-GAAP measures. you regarding also transaction. Reconciliations prospects Before of as discuss to today's and during the found Marcum include with cash as business, financial like remind results of measures certain would respect management may condition, press financial the call our presentation. investor begin, strategies these tables of to call, flows, and Today's be

of only can are these not found releases our and and uncertainties. statements represent these relate the occurred, A matters to obligation filings update Exchange press on cause intended statements could to of yet statements. estimates factors this and results. CBIZ's subject differ are of future be statements forward-looking description Because assumes Forward-looking detailed how with factors risks results no today's in Securities materially Many to the to insurance Commission. in more call and to such date future give any materially that and they

related we press the Finally, you undertaking. also important will solicitation related proxy that we Marcum releases information in to and like the be to to would today's refer acquisition

Services President Grisko, the Ware over and Officer; now Jerry Spurio, Chief are Financial Chris call today's I for and to Grove, Financial Officer; turn Chief us Joining division. our will Executive Jerry? of Jerry. call President

Jerry Grisko

Lori. $X.X the our Thank announced Marcum, in this transaction. financial we results. But morning, performance devote our transaction our seventh country. some this firm to the I everyone. agreement businesses acquire approximately When clients largest specific XXth our accounting today, a XX,XXX services to ask will have accounting time second provider billion, provide closes, Ware professionals you, quarter, position as in serve will considerable to Grove, to want over additional then amount and combined to revenues Good Earlier plan our morning clients. comprised details provider than and Together, our the of XXX,XXX of that, of outline of team walking this nation. on become services professional solidify details a leading middle-market a advisory do more largest first through around We the the and we'll the CFO, I for our before we of

results. our with financial begin let's So

the with our are results remains overall of business were that health We second our report line in expectations, term to quarter that pleased and generally the strong.

start performance our quarter, results, half of faced unique of For first To want the of total by the this headwinds the second X.X% to some some the for understand better revenue factors impacting X.X%, revenue we the unpacking was up up total our year. date quarter. with I to to and

in to we experience caution we given year As against more same volatility the in occasionally as results period prior a the quarter-over-quarter. in our the reminder, quarter comparing any typically financial year

and casualty event specific business. insurance to start want within I a property by describing our

a this second include of producers a number loss support exit small served team personnel of impact quarter the within of clients first this the and group. Our of and the half results for and of by the business,

Fortunately, scenarios. have this mitigate contractual we in agreements rare CBIZ, place these of to event type is for and very

pursuing EPS for the for first to equates second That relating event our year. the quarter We of adjusted are of legal the this currently remedies half matter. said, and $X.XX impact to the this

In we addition an related to impact, also the expenses. saw business increase in legal

businesses project-based we quarter first million like around while in we potential during did concerns approximately are half did facing. economic are fairly in the and election expenses year, lines business and transaction. like areas time for the amplified for climate of implementations see discretionary and Next, has regulatory investments changes And through the major incurred in experience to the delays year in one uncertainty our experience, In shift $X.X client some only some Marcum the remained payroll. for the second the relating any finally, more systems services stable our a we

if year our the a variable that the number levers lower revenue than the remainder the and other pull As expected. we mitigate reminder, discretionary business expenses a line comes includes impact on significant of model for of and to in bottom can

Now performance I like briefly would touch the our major X on divisions. to of

pleased tax division, to for steady our services. For demand experience core we were continued Financial our Services accounting and

this and division revenue of the as same in did in a not result this the our realized revenue was a second of the of project year. same quarter impacted last degree recur However, significant period in amount year to

of as CFO to bolt-in of experienced within for transaction private services, we support services with continue strategic see market services. a the Also our demand as including with the that That valuation said, impact compared expected, deals. our deals and platform M&A subdued industry, services well larger than mainly more equity the we strong [indiscernible] being volume Advisory smaller FD&A

and health Our year. when projects last in business to same strong the rebound period care momentum new compared demonstrating continued its with consulting government growth

opportunities. of Looking ahead, enters this group a second healthy with half the into new the pipeline of year

quarter-over-quarter division service of of our Now half of staffing second event, P&C margin our we and The within was XXXX and earnings impacted this comparison the support the over the to experienced years. we impact negatively that to we've Insurance total by across the contribution made growth in several lines. investments we after where growth past adjusted that of turning revenue Benefits each achieved division, the major

In the the now I but business year. to the Ware? impacted and for prospects over were the strong, for the are business remainder turn remains the underlying by about and discussed first quarter it on of performance the for summary, will we details the year. our to our earlier, more the the items half of Ware earnings optimistic second health discuss quarter-over-quarter of

Ware H. Grove

Thank everyone. good you, Jerry, morning, and

a definitive for a Spurio, of moment, CBIZ. I brief today first, and highlights of Of along revenue will division, acquire Chris this approximately transaction Financial our President morning. step Services with In Marcum the course, But me news and make to transaction. of let second quarter year-to-date on with billion, this comments major we is forward the a the few numbers that released big Jerry a reached is review this we agreement have announcement $X.X

and quarter Marcum fees acquisition-related Those earnings year-to-date have to to include Second transaction. approximately adjusted costs $X.X present the with and eliminated and other results per associated other professional million costs related share. diligence of costs been

GAAP, the the outlined schedules see those reconcile that release in costs to EPS. EPS You in adjusted included will

do that relatively expected flat the a of items items, quarter to included a quarter basis, on because resulted this to be number not quarterly but year We in a quarter year provide year-over-year year comparisons. we compared are in this guidance second of an second unusual ago. There the those

unpack credit me of did highlights. in the tax CBIZ ago, Let A number we a for strategically employee XXXX, important year considerable retention filings clients.

bottom those share earnings connection generated to level Second per nonrecurring with less $X.XX the in adjusted by project tax work with per of this highly profitable presents dropping revenue a year we second quarter quarter this lower million filings. the The this line. $X.X activity of was headwind nonrecurring year, This impacting project majority share.

have profitability. the not intentional minimum relationships about to we from migration talked we addition, client decisions in intentional that client resign In relationships. In or made of certain XXXX, meet thresholds year, exit our do late

impacted time, by course, shortfalls move. Of million marginal revenue new last in over compared clients run, year $X.X is up year. we and this the But business short quarterly profitable experience those attractive may very approximately a or to temporary ramps until replacing this positive

where CBIZ personnel left of As underway Jerry loss involved have Southeast relationships addressing competitor. generated covenants. revenue of litigation incident the This X would insurance breach There Property a Casualty client incident there a that & was mentioned, joined otherwise region is planned an restrictive XXXX. our and CBIZ within in

million I share with quarter not an are per the but $X.X per We at impacted share. liberty comment further can on details, that earnings share you approximately approximately by revenue $X.XX of impact was to with second

achieving the second first higher per claims somewhat then of and growth that At with rates I program per cost. staffing year-to-date support in Insurance a our share share. half business, of incremental unpredictable of an we And the This the benefits quarter, in service and second recent growth. impact incurring this year claims the finally, continued was health levels are cost has into self-insured our client $X.XX higher quarter Benefits impact level years commented our tends increased to second last the be to higher-than-normal for and $X.XX we quarter in as end

per this As and $X.XX headwinds impact per results impact and year approximately first $X.XX the are share. comparisons share a year-to-date to share earnings per half result, by by

compared in up with X.X% acquisitions year. contributing Same by with an was X.X%, second growth unit revenue quarter additional the last

X.X% to same same-unit revenue with quarter, X.X% revenue X.X%, year. revenue for this with year grew up X was another the [ last up was For total year, growth for second unit X.X% this revenue Financial the contributing by quarter ]. Within acquisitions months the second Services, compared and

and property up the months, same up was X.X%. was the incident, total casual X.X%. by Absent months X.X%. quarter, Within X was and approximately X.X%, the Services second for Insurance, have of up quarter I For grown total that Financial revenue impacted within and second up revenue X was earlier, the same-unit for revenue incident the Benefits revenue would same-unit impact the referenced revenue X.X% unit

grew have For by same-unit the revenue growth unit P&C been would X.X%. months X.X%. X X incident, the months, And absent for same the

of acquisitions: CompuData completed the During XXXX, half X we EIIA. EBK, first and

people this teams board on are extremely pleased to We in They line with these our are year. have expectations. performing those and

Now of provides adjusted balance unused about facility $XXX June million $XXX flow balance million with leverage plenty was sheet. million of and this XX, turning flow. to cash the EBITDA, On $XXX unsecured With the the on X.Xx approximately of capacity. outstanding cash XXXX, the

upcoming the the we a in acquisition. financing Marcum the will moment, share for For market details in plan I place. financing have And acquisition, commitments of

year, acquisitions, we first this the on payments previously transactions. $XX of million for In used half approximately earn-out closed including

for expect and capital approximately of acquisition Since we $X.X we another including $XX.X payments to this million have use payments, of XXXX. then year, approximately over time. the approximately in XXXX $XX.X $XX.X year approximately million in earn-out million the For million next end the we earn-out XXXX, purposes, XXXX, remainder and that million acquisitions XX deployed of over closed $XXX have in

capital capital year, repurchasing XXXX. using date flexibility for desire been most use Because has acquisitions, transaction Beyond of the Marcum the we in for the repurchases. share been shares and this under have not consideration for to have we actively to

year XXXX, shares X that end days and of ago. open million period. Since the was the Approximately basis XXXX. XX points approximately for compared the $XXX XX end capital open market a on XX% basis of than a represents compared XX more of we repurchased of outstanding in expense that time been the over to this half XX of the Days million shares year debt used days points repurchase market, towards outstanding activity slightly sales has was first revenue have X.X June Bad ago. compared to with

is million with $XX.X million Depreciation million year. $X.X with million and $XX quarter the depreciation $X.X amortization second amortization last and Year-to-date, last compared year. expense was compared for

and For year, expect with $XX.X year amortization we this last the year. $XX.X approximately million approximately million full depreciation compared of

expecting of driven full expense, of first those and expense the assets want by the intangible half of for primarily we're acquisitions, the our for be to first the $X who million. $XX $XX year amortization spending million amortization to spending may normal For this was this for for the was approximately the amortization the you derived is and full Capital million, capital from half approximately year, highlight within of million, range year, million. which $XX $XX

the for was year rate lower slightly XX.X% tax this from a ago. effective XX.X%, months than year The X

project approximately rate year, we to XX%. the tax full a For of continue

talk in quarter We the Marcum give an closes, about fourth transaction that guidance this time. in this the to close us year. to detail expect XXXX at the will When opportunity transaction more for

property will nonrecurring and half Looking impact casualty growth. results saw number expected year half the business, reflect on at quarter core second think results. and described second we full a growth. earlier We items year-over-year of have that stronger The is first impact an to I

are earnings This XX% XXXX, share which share essentially driven $X.XX $X.XX impact, full per over and with to per property to impact the $X.XX of year reduce to XX% balance of a from lost per the us growth the reported line We reduction share. approximately earnings full year our of XX% XXXX from performing to is XX% casualty adjusted business. per leads business projecting for this is reflects Absent in and is expectations. this well share

to earnings $X.XX per So either X% of can adjusted expect XXXX. expected earnings over The guidance X% range share was or expect is follows: expected rate of recap increase a an a that property the increase XX% excluding of considering is down approximately for per to number a effective XXXX total by full be within share X% rate unpredictable of the over range XXXX. earnings related full impacted within and within year adjusted increase up this basis, revenue X% and for adjusted to of any for XX%. the the to factors. to casualty GAAP range at XXXX year impact to we this reported year. for $X.XX tax of share year Marcum I adjustment reported per This On reported transaction, could as a future in the XX% we

year million in range share XX.X for the expected shares full average fully is of weighted lastly, the XX within And XXXX. diluted million count a to

turn those So let's attention Marcum turn back Jerry, comments, to and to you. I'll the acquisition discussion our it announcement. over with

Jerry Grisko

our the want separate Ware. largest time, transaction to entities. have. We the we this answer as presentation anticipate to the has as you, during remaining other to details our transaction together, acquisitions. our well through as in history of and continue Thank be we'll Throughout And use questions theme time will transaction, stronger referring which the until our that been of to quarter. to you our to operate today, objective history close long of walk our for We any the fourth may successful

of scale other greater to journey and a on services to businesses offering solidify exponentially value our our of that call position outlining of as focus what industries. a will XX,XXX serving us combined nearly than significant advisory leading resources unmatched professional of service milestone our the I members acquisition our be, our accounting approximately including revenue than middle market accelerate nationwide. and But strategy, largest is organization more clients XX-year to positioning and $X.X provides depth expertise announcement services a kicked provider [indiscernible] us to our off This -- today the as even on breadth by of provider stakeholders. middle-market growth strong day and areas a with clients collective our team that, focus key will today's over our the by with more bring XXX,XXX team, billion, XX the to in in

and depth driving target access better clients to and their by solutions. brightest and innovative challenges. and the most equipping expertise perform work expand and and in solutions sectors to the to will our in of innovation, breadth and important and development, to efficiency to including in invest develop and and data-driven increasing providing our industries It enhancing attract tools industries our to ability growth new services It helping investing their also technology to at while talent meaningful by performance. our best in in offer latest us organization actable best most with unmatched new By will be in insights of their opportunities to presence help enable support technology effective retain and joining our and forces, and will and able clients them new them

debt, over to X expect that the adjusted a an Some quickly years. of key tax year accretion features or transaction. with of group. indicated, to we The delever expecting and And will over Ware Spurio, and close, about $X.X in about XX% of EPS a the as number close will as earnings I'll of include value we which CBIZ fourth forma feature and include a our stakeholder The the asset was talk time. XX% a creates transaction the estimated cash division at about in approximately of value adjusted President the our Financial multiple year. impact growing date, Services alignment indicated, terms At it is approximately [indiscernible] XX% [indiscernible] the be billion, of be will shares, to over and our in will which shareholders, including quarter paid XXx Pro net Chris be this enterprise point, it go-to-market EBITDA of strong turn strategy. consideration Chris? this of

Chris Spurio

you, a with Jerry. City to a The XXXX. record Thank is York in regarded long New whose coupled of accounting track firm acquisitions. routes back is headquartered stayed firm, has growth organic Marcum highly and successful

U.S. of Speaking XX the York, Philadelphia, and [indiscernible] Marcum completed revenue. have ]. billion [ accounting is New XXth firm XXXX through to a also alignment They accounting, CBIZ, in lot England, XX deliver we Like largest in clients which with they And X,XXX do, ours, clients offices, leverage. advisory are what tax all $X.X excited in to of there New about acquisitions, the was since market. Florida XX,XXX places have we of California. Today, and in through primarily are employees located and different services the exceptional which while industries provide middle unique they and than services they over

resources collective along major our expertise, XXX,XXX will members XX,XXX Together through XX leverage with local national delivery and markets, relationships clients. we and with CBIZ, and our team

provider service accounting largest in [indiscernible] the us make will acquisition the this mentioned, Jerry U.S. As

and increase size exponentially. key and will several markets our resources Also,

the I organization geographic in double. will instantly Metro markets fifth be New we Actually, will York largest New York. Our believe New England and

and in will market quadruple. Mid-Atlantic Pennsylvania Our Maryland

fourth scale will Philadelphia. We be organization In practices market our West up Coast considerably. the largest Southeast in and

very they business through groups of their The complement those structures and way businesses national we manage is The is regional accounting and suite our very manage We manage a services. both similar practices our tax way with similar. ours. to advisory

As we too to that it will specific relates provide expand. our solutions the to services and clients,

more double. Specifically, practice will our tax than

XXX% will practice almost advisory by grow will almost practice accounting double. Our our and

historic so consistent are seek only as technology leveraging change. we innovation collective their resources. not those this that rates all revenue, of cash excited ours including unique, recurring about not strong will addition, our and pipeline if attributes attributes, many, retention this and combining flows practice teams Actually, and In The with attractive same. amplifies may growth, the Marcum shares acquisition

those provide essential or On nature. Along revenue will to back turn I it in recurring recurring organizations XX% highly even a same both project an percentage that With combined base. basis, is greater services our Jerry. that, lines, are of versus

Jerry Grisko

the Thank closing, transaction you, around and diligence work starting to we'll Chris. Well, has immediately largely structuring on be date the integration. today been focused the due through

first at will Our integrated combined focus acquiring with making understand and we're -- the teams. sure and that our that make closing, our talent properly on-boarded that they're be we sure people, on

client service elevating aligning and brand. to that approach Our as well as our

processes Also closing approximately will consistent focus $XX going full and a an in systems. our value anticipated and following that we beginning million approach expect common fully create and systems beyond, in cost the processes the the will CBIZ's first continuing see would approach, aligned months, ] [ sure synergies aligned the 'XX be on and and and forward we of that to on and making common quickly and XX and have

combined that and start an a they the M&A. strong mentioned, in map. on making be workforce continue for need have XXXX. developed to acquisitions again, will successful we have forward. road a that both tools point We've Chris historic that the to As they integration strong sure be XXX going focus our We since alignment And

financial with will turn to over talk it So that, I about the Ware? Ware to summary.

Ware H. Grove

Thanks, Jerry.

it's then that versus the track you XX CBIZ build and who X to expansion combines of of the that on combination seen that and on of margin you and gives you've very screen. if record the audio the those in managed bottom us your really not only deck, But as higher businesses, Chris line growth, have opportunity to similarly on level top growth you and Marcum if outlined, For continue attributes of I'm CBIZ line front a Page of and of with our growth. on with revenue are

we're will do that I to scale our think, the here, enhance that. So ability achieving

like I So can scale a only beyond with adjusted share, the clearly, get respect to same good tools future to the you And then I adjusted earlier, margin ahead. growth, be and and with EBITDA as we're jumping ahead per revenue think place commented drivers opportunity operating further earnings we've but at enhanced. the here, leverage greater greater got value in enhancement, pace even when that

leverage So believe, growing approach you're growing the respect management running going achieving a very I a business then at the similar revenue, to with to and operating pace. to line see, quicker some bottom

to and combine the first integrate and modest model. of within businesses year activities to integration into Now some XX going level our there on focus first highly as so, months combined synergies the are or because or the after built we stabilize that, we're so

of an I kinds the that Just dependent and the synergies achieve the that basis. in highly on so are that can be you the the the we've fundamental achieved of attributes assured business projections past we're think with only enhanced sharing upon model results

predictable With but to flow the that repeatable, post close. leverage believe up a the enjoy we enjoy same EBITDA business into attributes to will of respect X.XXx cash the initial are solid, business, levering we the basis, today, we of we X.Xx

And so to that deleveraging. lead will rapid

first that so, I see going think months very So we year. to get within deleveraging a attended to rapid you're integration XX after the activities or in

page organizational of Basically, the in and to and we just the very we you given synergies local without to operating structures. that. markets. overlap of at the built efforts duplicative the level going into the turning our that, what We a are XX, and have, Page expect. deeply than marketing align the synergies sources reduce just projections, into transaction sponsorships financial need the modest on So But next size current need to and more perhaps would they're

some redundancies infrastructure facility's where IT vendors. co-locate people our and overlap our of in that enhance And exercise where power have more that facilities on we scale with we down with also to reduce purchasing leads need course, We can the today and leverage us and that where to where and we've efficiencies we've extra feasible, the achieve perhaps facilities here can reduce got colocation space road sense. and share footprint makes well. space as some where And the there and some we got

The transaction funding.

a to commitment of in from billion have of We Bank tranches. America X provide funding $X

and first The $XXX a facility, is revolver, second billion tranche X-year a is X-year facility. loan $X.X million the term a tranche also A

cash we're of paying consideration the will and half half So in be for Marcum shares. in that

as just Bank we draw we to look funding of commitment to from at requirements, close got the we will $X.X we the cash and billion America, billion down initially. So the think $X.X

facility. existing Now the on refinancing Marcum understand care the that existing debt will including of debt take

behalf assuming we're the inheriting on or debt So any Marcum not of facility.

us to the acquisitions the billion also liquidity. into within the And share to cushion So in million to billion began year. post-close years leave with plenty of will we plenty to costs as course, and X.X in year, first got respect ordinary years start the capital first close, then resume, or $XXX the after strategic time, we additional things have serve and of the like think point course, estimate, flexibility call to And integration needs and at we deleverage. to too. what that of after that capacity, can $X.X working $X.X go repurchases that seasonal first we about course rapidly for capital deploy X that well and We've I'll and with of us of

out, shares shares entity. liquidity combined a the million to after the that designing XX-day I've the go the approximately giving and that shares right that total here, approximately will outstanding of VWAP effect and out the before there, are shares the the represent XX% now go to on based and attended cash So that XX

over for a Cliff will a about those these of issued what will as new XX% to shares portions, be target we'll call will then So those for valued upon market. approximately with of new retention years of tool years. service with installment of XX-month fairly be shares valuable reserved testing in the X immediately highly the shares XX% X be About be those And and a that requirement next basis retention ] close. of issued shares retention partners performance issued -- X with of shares, will very and to [ X%

share clear the on the Page acquisitions even leverage rapid. to XX the just and close, XX, post beyond I what months shows is absent So next you path about, talked just this repurchases, deleveraging absent fairly

things intended in So capital that deployment share the to get sure this stabilized, as business done signal focus X we activity the that and terms repurchase, making activities we're after and those have integration we're and a operating getting on the year is and in we past. back acquisition business of

conclude, Page we'll the points highlighted let's and that, it's Jerry XX, with to strategic bullet So rationale which turn and all there. just the earlier,

Jerry and turn and discussion. conclude, we'll into I'll maybe to that, it we with go So back over

Jerry Grisko

you, Thank Ware. Yes.

this just go into advantages when And say accelerating this. about and for position to to only before our acquisition not so that company growth, is our want think today, I Just why into going we we future. about Q&A, we're the but excited

those about to I us to opportunities members. it's that think the about for all our of team them about able their importantly, most innovative compensation provide and we solutions for about growth benefits things, it's will to going When equipment our But to a to to work. to mentioned. that talent consultative clients. apply the and to even tools career obviously, we're competitive more and journey. providing our trade with showing more them development, their interesting to and bring supporting the our value, and accelerates appreciation more it's it The opportunities think this we opportunities. were through them the the to some best-in-class and value and shareholders allowing bring think that are chain be that a and and provides valuable provide their come war of result to the it's journey of do team members, the them about important their It's attributes And work and up on clients all what's that around as even for the

excited opportunity for to with particularly over our Q&A. And the we're that, workforce. So it presents I that turn this will about

Operator

from [Operator from first Instructions] CJS Securities. Chris Our comes today question Moore

Christopher Moore

Maybe can ask will start QX looks and Congratulations, few on Marcum. then with perhaps interesting. we a just we questions

was Street at -- looking EPS So we -- the roughly impact -- issue is was right were where about below or wrong. $X.XX the adjusted EPS there. $X.XX from The P&C kind of

estimates down your so some coming $X.XX. about the -- And Where ran breakdown of through there. guidance of kind coming is are

necessarily deeper second difficult? half that to I if year, looking will. just incorrectly? looks of pick a at the go guide we not going of be the in up of you timing ability Some maybe know could lower some in the bit just like little #X.XX, by can were it's quarter your to I Or the terms

Ware H. Grove

talk I'll adversely And Yes, comparisons. items impacted a quarter-over-quarter in is the of collection second Chris, unfortunate it's about timing. quarter, the had Ware. just we really this that

relatively issues. year, and But property at and a know be we stands, of conversation expect items, quarter of couple Some be and And expected achieve. seasonality then we were about we unplanned last as we first stated, including hit by it the a as it to to I end of we casualty got quarter them really to the the the not compared predictable flat careful. had

which as an got we we've are those opportunity headwinds. think lap I comparisons, year-over-year that

comp For on in staffing example, side and insurance will half. the be an second benefits the easier up the

be half to comp, the of half. that may much but a maybe the first half difficult last as in project first second the year work continue not Some so was loaded

businesses a I the half the of basically as are other [indiscernible] the forecast time, very this business, think strong and Property guidance impact very comfortable as half maintaining at we point some business, balance of and second before. in that -- maintaining the we're same comfortable from we're the Casualty, at looking the had we $X.XX very of second otherwise,

Christopher Moore

cadence terms half? from you QX build a a QX -- thoughts that And -- trying some Got That's throughout second in of from is I strength? QX will and -- and tough one you standpoint, it is it. it's expect and to Or helpful. there have the improvement that can kind of -- just -- -- of the just quarterly know any

Ware H. Grove

down the you give very acquisition the people integrated. effect cost of from down last Indianapolis when should activities uncommon we've a weighed color. that the implemented momentum. but the a extent integration There's make And a systems the slump not expect until little half that, It's were the of first has happened acquisitions or to the second basically regain after a of and traction. just that we with and the can strong year new them the good I half, little of bit, a when year, bit when we first they a some in regain them very, little slowing bit, they some

just one we're why that's half. example of So about second optimistic more the

Christopher Moore

Marcum. on appreciate Got a that. it. Maybe I couple

bit, besides clients? X CBIZ X little starting and . to to areas Marcum into transferable go easily be will or expertise a of scale, Are You've geography. that -- readily specifically at there

Jerry Grisko

to you that want one? do Chris, take

Chris Spurio

segment -- to ours a IT HR several one, to attractive not-for-profits. big name very are they as it's of There well. a just have And finance [indiscernible] outsourced

whatnot Also that's really implementations an and practice, that we think outsourced which a IT, of another excited we're area area lot we is about. can technology their provides So system leverage.

others, transaction. lastly, been such just as and able on industries to in, leverage alternative that digital the capitalize beverage And we've we'll into food those assets, that the wanting to investments, of they're as be get and part and

So few. more. just those a There's are lot a

Christopher Moore

maybe a Is tell understand is mean be close, X X And That's the XX% you going it. I XX% that to on just smoothly just I not else good so over -- stock happens Got XX% component sure the us over of correct? years. anything years is or that make it that in can to performance-related, and terms start. -- is there?

Chris Spurio

all a reflect shares. the seller. time of And over paid call a They're tax-friendly just share immediately those question. period, does, It Chris. for great that's That's the -- structure I'll and XX-month it, a will count

Christopher Moore

Got don't Marcum I it. And just -- know, well.

of of little just stock. a to In hundreds trying thousands getting understand who's terms partners just bit? the that It's or or actually

Jerry Grisko

Jerry. is this Chris,

receiving partnership. shares. who in has the are, firm a be Marcum partners traditional owners will of So essence, that The

Christopher Moore

their Got me. would after X get years remaining And and for a shares, year year, If they it. last X one still partner correct? X left

Jerry Grisko

That's correct.

Ware H. Grove

The they only through to course a that full that's share stay that's to years. a because right and X vesting, pool, in the performance that caveat the there encourage is forfeit would X-year cliff tool the to people

Operator

comes Nicholas from question from William And Andrew our Blair. next

Andrew Nicholas

second and guess organic revenue I on outlook. then the I'm focusing get a just similar the kind specifically sense trying a quarter and Marcum start specifically with it more maybe afterwards. growth approach, in for in guess take to guidance line happened I'll sounds the I expected of what what It the going -- not with in in? your with quarter had issue producer producer one that was the component. line the like -- second or you was

you of that you through But revenue. end second obviously of year. things rest said for the the are of other the through year quarter think million could I there slowed. the the can I that $X.X any and that extrapolate have quantify both

you some implementation delays think work. payroll delayed in client mentioned or of I kind delays,

counter Just -- outlook awfully to seems a be that half to the color looks quarter? run it second little saw more second strong, because like in and what still bit perfectly to we the is transparent,

Ware H. Grove

a quarter. of second unusual the were There Yes. in couple things

reason moderated guidance, that's definitely and I and think one second the not talked about the we provided And we, had a for ourselves, planned, that expectation with quarterly the that's headwinds would we surprise. we were they were work project so foreseeable have quarter. why

like we've migrate profitability and it's this things the talked you some clients, The kind coal after underperforming basically bumpier I clients what are often Clearly, details the [ gave that, we kind predict. of thresholds to a and before item that of and about that ] was. migration of and surprise, vis-a-vis process, and as Property of that's Casualty impact a and harder was and

making profitable have more we call not make other to always clients, and did it's process. always intention but predictable ramp smooth, are perfect a intentional up, we decisions some we So some -- clients, stage to employees

little that bit So the a to half. first contributed

care were stronger Also, than half looking the I Indianapolis I little experienced be consulting for business tell very be forecasting. and the by headwinds strong they Indianapolis well a can operation. foreseeable, continues a second that government stronger would that strong, they we're thought maybe segment second out the very to you have think we and of for health the performance half as a but and operation predicted

Andrew Nicholas

of historical then helpful. in business's it. I can to guess growth. over the you tell What switch I'll That's Marcum. us terms Got And

the if you there look of growth think the out the is organic figure versus hard to at referenced I but you some of out is that's growth? that data publicly, that M&A much strong, exceptionally how

Ware H. Grove

diligence. away at But at and those you that the that's Andrew, over by of growth rate higher years time acquisitive kind saw. single-digit look of in those -- a recent as the strip And impact same healthy a acquisitions it's organic driven very has remaining looked and been very, pretty -- they've that something period, great in carefully Yes, we growth largely certainly question. that's we very successfully Their so. been

comfort great in as we us all gave that that of looked at So history.

our takeaway. was that So

Andrew Nicholas

efficiency, you sits on the similar That's versus in EBITDA margins kind it. maybe get margin And think most their of encouraging. that to operating guess Obviously, based use even curious of different can maybe or profile on have. Marcum margin anything you CBIZ? terms just how question then is profile. Got margin, automation, -- But information markedly helpful of whatever And relative percentage implied some for to a profitability we is CBIZ Marcum the where compares the I of offshoring, operational technology, to yours? kind

Ware H. Grove

Very similar. Yes, great question.

little we and Marcum such experience they in to of weekly we're forward a looking use and think ahead little set offshoring. [indiscernible]. have they're leverage very, capitalizing further And is offshoring, than very their good a in if deeper are, metrics a I they on areas, also maybe monthly, some not as in offshore that

a it's business. So well-run

the Having because and board it's partnership -- compare think operating opportunity similar year, and their will said very all terms the apples-to-apples first pricing but hard and is structure wise that, coming of infrastructure. I facilities, always after really the be we we improve from Marcum, compensation the to efficiency delivery. those service our can on structures versus and structure, corporate profile, leverage to margin a structure, but in combined, client new we reward partners think of offer We

there's a so great focus on And that.

past and but functions achieved back the of kinds things the operating So source of those in . that leverage, that is is primary some the facilities source the office and in we've

Jerry Grisko

Grisko, is a add Yes. bit color. more Andrew, Jerry just this little to

we'll can, that kind of as that profitability compare they greater And combination. a will We to hard as but have even our of efficiency some be result we best of think expand margins said firm. apples-to-apples, it's to to the the profitable a appear we the get very

Andrew Nicholas

could I Awesome. And maybe one it if more in. squeeze

maybe Just on math, of cost you million the accretion actually, the synergies, said synergies. $XX

the catch price think Marcum or include then that might exclude baked amortization deal? in front of XX% I accretion in number. does in didn't 'XX 'XX, was from the said terms what by you be purchase XXXX. that also And the I on earnings what it in accretion

Ware H. Grove

Great Yes. question.

that's because company get the you you acquisition-related, amortization get -- accretion as the kick also they duplicative acquisition-related, and as little the out, that's but first come and where all, building integrating of synergies of really third where of you year, the after. in to achieve and and second accretion leverage rates interest before builds that's year. that don't when get In X And that remove and the the if XX% the focused come first and a the we of right into accretion you year. First some synergies costs And really fact, and and on operating until X, improvement accretion gain in can impact initial down X, the interest year very start delevers that's the very, businesses we're from traction apples-to-apples, you that margin compare you the year year. in the the are, as costs

Andrew Nicholas

back I'm that to get sorry, or are not? the you're XX% you to adding

Ware H. Grove

Yes.

are the result are adding that and list amortization In as amortization be amortization client other noncash be an that gap in fact, a asset, we expense, back assets by adjustment. driven intangible would to that expense that's clear, the a of acquisition an amortization the expense. intangible That's driven

Operator

Our Riddick from next comes question from Marc Sidoti.

Marc Riddick

questions. you a work project prior visibility. first with have things your wanted delayed as that bit and as and seems wanted then relative commentary as the since curious, as far a seems it cadence about Marcum. some I here or start the I guess, move had, year of results, you the of to, sort quarter it similar to I little over sort to XQ from talk answers guide some level year So though I we'll the some I with though for were was to of the on guess, the full maybe maybe of of the

opportunity the though EPS adjust into seems second way to into expenses, that Is is year back that a guide, of shift as the all you're it of half reasonable account the the necessarily quarter full going taking certainly the looking the at With guide to not revenue just relative to results? year.

Ware H. Grove

where We we question. a as pull variable have Marc, glad number appropriate asked Yes, do that expenses as levers I'm needed. you of can

for variable So in the of do do of yes, we'll terms managing the to what sure. we full terms the need expense in components year of guidance,

Marc Riddick

the of that that it any saw, things what right, types there delay and was Or that I And projects the that specific, I commonality types guess, these of guess of there or was things push of the then the it's on of are clients to or projects you but types the sort being the I a types or whether was delaying to clients little Great. of saw a you guess, Okay. sort general? projects? -- Were it were delayed projects? the

Jerry Grisko

Yes.

as that and second go our experience you before small on some are experiencing I tell half you middle ask the What what Marc, they're to as ask offices, is for off things time that, systems, payroll, an our ask first and where we making in half. during they though, we around you market. experienced, of will things the they period So put and reading service expect, would our were that that ] be will And largely heard. they'll we've call, the [ to and lines, they investment some that's that's in what discretionary the that eventually around and -- the run market that comments somewhat we in expenses about out as we continue every news the in those were of of their businesses did margin, more regions, some optimistic. tepid those decisions make, can continue make what experience did anywhere really business, decision

second the the But we're I looking year that half one and their is certainly prospects as think group. a is that remainder to in largely the the of message that optimistic for clients -- our remain about

Marc Riddick

Marcum, first you everything Okay. decks of That's comments as really dual to helpful. sort you slide over shifting provided. and the all, and all of now And And there. I maybe detail appreciate wondering could -- that I the if the I appreciate

back story of the cash like? about started a year-to-date I of little sort into bit repurchase. of sort that information of give be the of maybe you shared maybe some to that and do the a how work the your how thought little of had You in sort sharing mind I a -- today when of lot a to [indiscernible] obviously, in around you could spend talking if sort time and commentary came remarks, about this in sort you appreciate you've decisions it transaction some wanted this that share to think made of you've that. little bit all use of sort made maybe got -- talk put your could this But really around prepared us of I of as and

Jerry Grisko

kind it we've right? preparing is Marc, -- comments, lot our our this which of history, in Well, we've been for acquisitions. Yes. transaction throughout is of So that was a made a

look integrating. and check at would not of We acquiring, very This And that just happened time of scale. strong have we track create only something and alignment. one successful a to the record the when but would come knew boxes all onboarding we

ability able as When the changes with scale. them make at and talent our to about win lot something solutions them work for to We tools a are at the kind our bring client. better we earlier, I industry, do we our value interesting win the be that of war. allow war to that talk now talent in that come war for to investments best-in-class them scale of for looking we and to in are clients or think of more compete equip than think to positioned the to mentioned innovative significant workforce, that ever the that more for Why some order chain to and about have support the to up to we're

be only other second talk lot are about that back-office we that really are create is made. the The also We a AI will tools investments to Those thing human not required do, but investments. and all are allow making what our efficiency, take AI, X us areas higher intelligence data of solutions value in bring and clients, to important more innovative to to clients those combination to investments the solutions that our investments.

scale so organization. us it investments those off allows a And spread across larger make and to much

we'd of a we that like And the were be came, alignment there when were time by pursuing. created. reasons we opportunity struck that knew would this, the this lot that's that something is interested really So in come

strong committed It indicated, have indicated we're they the complement they that and very industries are. paths and markets that market going inorganic. been interested as to is very in to geographic a strong in have ours. we They're strengthen expertise leadership, of ours to to on us what for a the Chris just us, very ability strengthening very that's are exactly attractive parallel as strong track middle also We've growth gave record organic

the data compete we going where compete around for And around for importantly, is how and market Again, investments, vison and perhaps and around their future. most talent, around the talent. for clients

this to excited growth. know be to and convinced And our were got more even we have the accelerate process more stronger that will So of together, we out have together. stronger the we that to mantra diligence come we the that ability

Operator

closing And session. turn back ladies and concluding gentlemen, be to Jerry Grisko with question-and-answer to for like today's that, over floor we'll remarks. I'd the

Jerry Grisko

today's thanking and shareholders our end our do, as call to support. want by analysts always [indiscernible]. your I for you, But continued thank I

future is both our market on growth exciting only you to is and resilience team of to announcement today, for members to immensely proud I'm team. in the an gotten and know we our our imagine, our opportunities industry. Today, past away our who growth is that thank will possibilities, reach excellence Together, a monumental the members but a dedication ways, our of also capabilities collective horizon our want also can extraordinary and for history and CBIZ. to grateful we've this not for the made efforts months. by that others this extends team very our within well reality, milestone break overall heights truly feel of several from expand strengthen we chapter new growth our over as our will of in to day business, commitment beginning for a clients. time The I you, new and team and shared a many testament growth, for the our

will looked we our and together shared day. you and we focus people embrace at our forward, conversations. to move many a core on the we the foundation As around coming forward continuing of and our goal future reminder our Today a Thank clients. vision the includes our our of common all, has continue brighter. values and our Have power culture, to the great is look which of never

Operator

And We gentlemen, and conference joining. we'll today's you thank for call conclude that, presentation. with ladies and

You disconnect your may now lines.

CBIZ (CBZ) 31 Jul 242024 Q2 Earnings call transcript