Greetings and welcome to the Bright Horizons Family Solutions Third Quarter 2020 Earnings Conference Call. At this time, all participants are currently in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Michael Flanagan, Senior Director of Investor Relations. Please go ahead.

Thank you, Stacey and hello to everyone on the call today. With me here are, Stephen Kramer, our Chief Executive Officer and Elizabeth Boland, our Chief Financial -- Chief Financial Officer. I'll turn the call over to Stephen after covering a few administrative matters. Today's call is being webcast, and a recording will be available under the Investor Relations section of our website, brighthorizons.com. As a reminder to participants, any forward-looking statements made on this call, including those regarding future business and financial performance, including the impact of COVID-19 on our operations are subject to the safe harbor statement, included in our earnings release. Forward-looking statements inherently involve risks and uncertainties that may cause actual operating and financial results to differ materially and are described in detail in our 2019 Form 10-K and other SEC filings. Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statements. We also refer today non-GAAP financial measures, which are detailed and reconciled to their GAAP counterparts in our earnings release, which is available under the IR section of our website. Stephen will now take us through the review and update on the business.

Thanks Mike. Hello to everyone on the call. And thank you for joining us this evening. I hope that you and your families are remaining healthy and safe. I'll start tonight with a recap of our third quarter results and provide an update on our current operations. Elizabeth will then provide a more detailed review of the numbers, before we open it up for your questions. To recap, we delivered revenue of $338 million and adjusted EPS of $0.02 per share for the third quarter. In our full-service segment, we not only reopened 490 of our centers in Q3, but also launched five new centers including client centers for Clemson University, Discovery Communications and Walmart's Sam's Club. Our Back-Up Care business was again a critical support to tens of thousands of families, trying to balance their work and family commitments, including varied fall school schedules. During the quarter, we added to the portfolio of clients we serve, with Abbott Labs, IBM, Kraft Heinz, and Tractor Supply, among the employers who rolled out Back-Up Care in the quarter. In addition, we added to our educational advisory client base, launching service for Atrium Health, Cognizant and Zoetis this past quarter. Overall, I'm really pleased with the progress we have made. And with our team's exceptional response through this very challenging time. As a reminder, at the end of March, we temporarily closed nearly 850 centers globally. We marshalled resources to develop and implement industry-leading COVID-19 operating protocols. And we focused our full-service operations, on caring for the children of essential workers, in 250 centers that remained open. In short order, we started collaborating with our employer clients to plan for center re-openings, so that as stay-at-home orders began to lift in the early spring, we were ready to deploy resources, to safely…

Thanks, Stephen and hi, everybody on the call. Thanks for joining us tonight. As mentioned, I'll recap the headlines for the quarter and then provide some thoughts on the rest of the year. For the third quarter overall revenue contracted 34% to $338 million. Adjusted operating income declined to a loss of $3 million and adjusted EBITDA was positive $30 million or 9% of revenue. As Stephen outlined, we continued our reopening cadence in Q3, reopening roughly 490 centers and ending the quarter with more than 88% of our portfolio now open. While the large majority of our centers are now serving families again, we are in the reramping phase and enrollment is therefore still well below the pre-COVID periods. As a result, full-service center revenue contracted $191 million or roughly 46%, which was in line with our expectations. Adjusted operating income for the full-service segment contracted $94 million over 2019 to a loss of $57 million. This represents a 50% flow-through on the revenue reduction, which compares favorably to our expectations of a 50% to 60% flow-through. As Stephen discussed, demand for our backup services drove solid performance again in the third quarter with top line growth of 16% to $93 million and with $46 million of operating income. Revenue was ahead of our expectations as the residual reimbursed care services were somewhat higher than we had predicted as most clients wound down their programs. While traditional in-center and in-home backup care use remains lower than the prior year, it is also reramping and broadly tracking our expectations in the current environment. As during the initial stages of the pandemic, we've been able to continue to limit the adverse effect of the revenue contraction on our operating income in Q3 in part due to the support that we received…

Thank you. We will now be conducting a question-and-answer session. Our first question comes from Manav Patnaik with Barclays. Please go ahead.

Thank you. Good evening. My first question is of the 50 centers that you closed in the U.S., I know you guys typically evaluate the portfolio. But I was just curious, if you're looking at different characteristics. And I know you mentioned demand and so forth in the press release. I guess it's just a broader question tied to whether you see any risk from de-urbanization, and if maybe as to relocate I think strategically different basically.

Sure. Good evening, Manav. Thank you for the question. So as we think about our portfolio overall, I think there are a few things that we're looking at as it relates to the closures that you cite. I think first and foremost, we've done a really good analysis to understand where we have overlap of centers in our portfolio. And so, really tried to make sure that we've taken this opportunity to think about where we need to rationalize, the amount of capacity we have in a limited geographic scope and obviously have the ability to consolidate enrollment into fewer sites. In addition to that as we look more broadly, to characterize the kinds of centers that really are not reopening and are either going to be closed and/or divested, they tend to be smaller as Elizabeth said, they tend to be lower performers from a financial standpoint. And ultimately, they are the ones that got the most highly impacted by the current operating conditions and didn't have a sort of near to mid-term recovery associated with them.

Yeah. And I think as it relates to the impact of the urbanization -- de-urbanization, urbanization, it's obviously an evolving environment. People are -- the reporting notwithstanding, we actually are not seeing a substantial difference in our enrollments between our more densely urban centers and our more suburban centers. It's something that we've always tried to locate our centers where working parents are living, where employers are located and therefore, where demand will be the most persistent. And so I think that we will continue to adapt to that if those trends continue. But I think with the footprint we have, we're able to serve the variety of parents in both locations. Many, many parents live very proximate to where they work. The vast majority of parents are within a few miles in our population of where they work. So even with this, I think that the ability to serve the parent needs even as these demographics may shift in some areas and not others, but more of that is to be seen. And at this point, we're not seeing that as a big driver yet.

Okay. That's very helpful. And then, Elizabeth talking about the backup I understand, I guess most of the employees probably use that perks. And maybe it's too late, but is there a potential that corporate could sign up more days, and therefore see some upside to what the way you just guided?

I think it's certainly possible. The conversations with our client partners are ongoing, Manav. I think it is -- can be varied by employers and how they're how their appetite is and how their budget for the year is. At this stage in the year, I'd say that we're seeing more clients looking ahead to 2021 than adding to this year's banks. But it's not to say that some of that won't happen. But I think we're trying to give the best view we can based on sort of the use levels we're seeing and what we've seen so far this year. So like I say, I think in large measure many clients are turning the page. And so we too are looking ahead to next year.

All right. Thank you so much.

Yes. Thank you.

Thanks, Manav.

Next question comes from Andrew Steinerman with JPMorgan. Please go ahead.

Okay, great. Elizabeth, would you be willing to comment on what the utilization rate is for your open full-service centers? And then also, when you said, we're encouraged by enrollments that it will take I think you said several quarters. I forgot the exact words you said to get back to normal levels. Was that meant to be a change of timeframe from last quarter's comment?

Sure, Andrew. So, I think that the -- interestingly enough, I think last quarter, we talked about the range of enrollment levels in the centers that are open. And that range actually still holds. It's between -- ranging between 20% and 60% generally. That's in part, because we continue to open quite a number of centers in August and September. And so we have some that are in the very earliest stages of reenrolling and others that have been open longer. On average, we are in the range of about 35% to 40% in the open centers, if we just sort of look at sort of the narrow part of the bell curve. And I think from the standpoint of, as we look ahead, certainly the -- I think that the fall last time we talked early August the timing of what was going to happen with school reopenings, how businesses are responding to the pandemic, how it's playing out? I think there is -- continues to be some hesitation. So there will be developments that happen over the next 3 months, 6 months, 9 months that could change the trajectory of what we're estimating. But I think on the pace that we're seeing parents coming back and assuming that things continue along, we do see it as an improvement quarter-by-quarter, but still a number of quarters to go. So I -- if it's changed it's a bit of a nuance to last half of the year until later in 2021, but I think we all have to see what else occurs over the next 3 months, 6 months because a lot of this is dependent on factors outside of our operations.

Exactly. Thank you.

Welcome.

Next question comes from Jeff Silber with BMO Capital Markets. Please go ahead.

Thanks so much. Wanted to shift over to your Back-Up Care business. I understand there's a little bit of volatility in terms of folks using their residual care. But stepping back I mean it's really a phenomenal offering that you have. Are you -- or would you consider offering this to noncorporate clients I guess to individuals given the technology that you have to make it available?

Jeff, thank you. So we agree. It is an absolutely critical and important support for working families. We really differentiate ourselves by partnering with employers. We view that the financial subsidy and support that they provide to Back-Up Care is critical to the use profile. And in addition to that, I think we all recognize that employers gain a great benefit in terms of their employees' productivity in this equation. So ultimately, we're big believers in staying with Back-Up Care focused on the employer channel and think that is the best way for us to continue to grow this market.

Okay. Fair enough. And given what's going on politically, I have to ask the election question. Let's assume that Biden will win the presidency. I know, he's proposed some things dealing with child care whether it's providing universal child care or maybe preparations with some sort of tax benefits. I'm just curious, how you think if these proposals go through it might impact your business? Thanks.

Yes. So certainly we've reviewed the Biden proposal thoroughly and believe that government involvement in child care can be a positive, if done in the right way. The idea of universal Pre-K and other supports that Biden has suggested would be in his plan are things that broadly would support child care and therefore we would be supportive of. We operate in environments like the U.K. and the Netherlands where financial support of child care exists and it's a very important part of the overall model that we have in those countries. I think for better or worse, we have a long history of evaluating political plans. And unfortunately, the fiscal reality tends to be where the plans fall apart and ultimately don't get implemented. So while, we like the idea of the U.S. having more financial support in the area of child care, we never count on that in our model. We don't count on that in our going-forward and have always believed that given the absence of that that employers are really the third-party support that we can most count on here in the U.S. and it's been certainly the standard for us over the last 30 years.

Okay, really helpful. Thanks so much.

Thanks Jeff.

Next question comes from Gary Bisbee with Bank of America. Please go ahead.

Hey guys. Good evening. I guess I'd love to start with the backup business. Can you help at all sort of disaggregate the growth you delivered either year-to-date or the 25% you're targeting? And what I'm trying to think about is sort of, what's the contribution from new customers who've engaged you to offer backup versus existing customers where you've had a broader penetration of their employees or more of their base of employees using the service versus employers increasing their usage limits due to the strange times we're in. And I guess what I'm trying to really get at is, if it's new customers and if it's broader usage, it would strike me that those are factors that could help the business where maybe you've taken a step-up in sort of the size of the business or TAM or however you want to think about it that don't necessarily go backwards. But if it's -- a big part of it is increased usage and temporarily offering the...

The reimbursed care?

Yes. Like that would seem more at risk of normalizing at some point in the future. Can you just help us think about those factors?

Yes. I mean let me start and see what -- have Stephen certainly add color. But I think if we look at the start of the year where we would have expected growth to be in the low double digits, we are outperforming that by a factor of 2x. And some of that is substituted use into reimbursed care versus other care. But I think your question is the right one in terms of how many clients we've added? We've added 100 -- order of magnitude 100 new clients this year. That's substantially higher than we would have expected coming into the year again probably by a factor of 2. Now that's number of clients not -- all depends on their relative size and average contract value. And I don't have that at my fingertips. But I think that there is -- that is certainly a factor in what we see as the ongoing ability and tail of growth to be serving those clients in an expanded way. Just sort of for color commentary on how new clients launched generally this year is -- has the added impact of COVID and many clients we're launching with an immediate need. But oftentimes the first year or two of a program is not when the client has the most use. They grow into a program and it becomes something that's embedded into their employees' benefit program and it's something they really come to value over time. So we see the real long-term value of those relationships happening over the 5, 8, 10-year life cycle of those contract relationships. So I think you're right to point out the new versus the expanded use. There certainly is a large portion of the growth that's above our target this year that's just related to that expanded use in that unusual circumstance of COVID. But I think I'd be broadly characterizing it to say that maybe 1/4 to 1/3 of it is that expanded new growth opportunity that could play itself out over time whereas 1/4, 3/4 to 2/3 is that bubble of COVID spend. But there are some parameters. I don't know Stephen if you...

Yes. I think the only other thing I would add to it is that even within the piece that was the reimbursed care that represented a step-up that we won't see in more typical times, the treasure coming out of that as we've discussed on previous calls is the idea that we now have a significant step-up in registered users who have utilized our program granted it's been on the reimbursed care side that we now have the opportunity to convert to more traditional users on a go-forward basis. So I would say that even within the part that is...

It's not new clients.

Not new clients and not something that will recur because it's reimbursed care in the midst of a pandemic, we have access now to a larger user base that we can ultimately transition into something that has a more recurring element to it.

Yes. That makes a lot of sense. It seems like you've -- it's been a great opportunity for the business. I guess if I could drive that question down to the margins, the revenue moderating relative to the explosion last quarter, but the margins were still outstanding. Is that -- my sense was the reimbursed care was extremely -- maybe lower revenue, but extremely profitable. But is that just -- how are the margins so strong? And how would we think about them in the down year-over-year next quarter to get to that plus 25% here? Does it start moving back to the long-term average around 30 or...

Yes. Yes. I mean I think that's the headline that we would expect to see them moving back toward that 30% range. I think we've stated sort of our long-term expectation with backup would be being able to keep in the high 20s to 30% as operating income. The reason -- in part the reason is because of reimbursed care which is accounted for on a net revenue basis it's a -- so it does have very high margins just because it's a reimbursement model. So that's a factor. But I think the other factor is what we pointed to in terms of the relative use levels as parents need to -- they're shifting back to more traditional use what would have otherwise been a much higher traditional use and, sort of, the providers that would be paid for that traditional use that was dampened some. So the cost structure was therefore a bit lower. And that again is -- I don't think that that's the recurring condition, but that was the condition this quarter.

And then just one last one if I could on backup. The -- you said clients are starting to look forward to 2021. I know a lot of businesses have already gone through benefit open enrollment. What is that looking like? Are you -- the pandemic is not going to end December 31 sadly. So are you seeing expanded commitments for next year? Are they generally going back to the pre-pandemic levels? I guess how are those conversations in those engagements going? Thank you.

Sure. So first, as you might expect our renewal rate is incredibly high. The clients who have been with us through this are certainly very much willing to continue to commit going into 2021. That's at the client macro level. Then at the program level, we are seeing that employers are returning back to their traditional use banks that they provide employees. And I think their approach on this is the belief that they're going to start there. And depending on how the pandemic unfolds next year they will reserve the right to increase use banks if that is what is required. But certainly to start the year, they're starting with program parameters that look very similar to how they started 2020.

And if I could just sneak one more in on full-service. The 50% to 60% decremental margins is there like a revenue decline level where that would moderate to a lower level? As I recall a quarter ago the commentary was sort of like we got to bring people back a little bit ahead of demand. Does that get better, or is that...

Yes. I mean it will get better as we continue to move the enrollment past the, sort of, 50% 60% -- well 50% 55% level. That's generally when centers are on average breaking even, but there is, sort of, a step variable cost add. So we're still in that mode. And of course some centers are further along in that, but that decremental effect will -- we would expect that to abate as we do continue to enroll and as I say get past that sort of 50% level. And then we're able to infill with enrollments in a more efficient way than we are now because we're both opening a new classroom and then we're just -- we're sort of bringing people along as you say ahead of the actual revenue flow.

Thank you. Very helpful color.

Thanks, Gary.

Next question comes from Hamzah Mazari with Jefferies. Please go ahead.

Hi. This is Mario filling in for Hamzah. Appreciate the time. I guess just looking at, I guess, what the risk of re-closure would be. I was just wondering what -- what's it going to take for you to close centers that you already reopened? Is it just a function of state law, or I mean, the UK is locking down right now. I mean how much impact is that going to have to you? I'm assuming you have to follow that. Or is it that your centers will remain essential services? I'm just trying to gauge again the exposure to the UK lockdown and then also what it would take for you to reclose centers in the U.S. if there were another type of lockdown?

Absolutely, Mario. Thanks for the questions. So if we look to the UK, and they have gone into lockdown for the month of November, but very specifically, the Prime Minister exempted schools and child care. And I think that that exemption was based on two things. One is that there is a recognition that schools and child care are critical and foundational to society. And therefore, they want to keep those supports available for families. I think the second piece is from a health perspective, I think, the research is fairly conclusive that schools and child care centers are not super spreaders. And therefore they from a health perspective are safer to have open than other things in the community. If we sort of, translate that back to the U.S., we really don't think about the scenario where we would be closing centers. I think that in the rare cases where we are having a COVID impact in a particular center it is typically isolated to a classroom because again the way we are doing our protocols is very specific. We have social distancing at pickup and drop-off. We are ensuring that there's consistency of staff in children within classrooms that there is no interconnectivity between classrooms, and children and teachers between classrooms. So in the case where somehow COVID does enter into a center, it's really isolated to a classroom. So I think what you would see is perhaps a classroom closing, but I don't see a scenario in the current environment where we would be closing a full center.

Great. That's super helpful. And then just on some of the bigger wins that you had you actually mentioned those on the call. And I think -- I mean just looking at what the pipeline looks like today versus say a year ago, or say versus at the height of COVID in April. Could you just kind of just give us an idea of what that pipeline looks like and compare those three different time lines just to get a sense for I guess how large your opportunities are going forward? I think you had said obviously that this is the most demand that you've seen and the most inbound traffic you've seen. Just again just trying to gauge that pipeline moving forward.

Sure. So, clearly it varies by the service that we offer. So, on the center side of our business, we're seeing a pipeline that is very much in line with traditional times. I think some employers are on a decelerated time horizon in terms of their decision. And at the same time, we have other employers that are on an accelerated timeframe. So, I'd say on balance, we have a similar pipeline and it's moving at a similar cadence than we'd see in typical times. We certainly have an increased pipeline on the backup side of our business. Certainly there have -- there was a pretty good spike in the early days of the pandemic as it relates to new client commitments. On the other hand, we continue to see an elevated level of pipeline against what we would see in more typical times. And then on the Ed Advisory side of our business it's pretty much business as usual. And so we're seeing a fairly consistent pipeline as it relates to what it is today versus what we'd see in more typical times.

Great. Thank you.

Thank you.

Next question comes from Jeff Meuler with Baird. Please go ahead.

Yes, thank you. Good evening everyone. Just would love some more detail on kind of the waterfall that you described. So, you talked about first kind of enrolling the previously enrolled children and the wait-listed finally the new families which makes sense. But I guess what I'm curious too is, is there a lot of demand that you're choosing to more gradually fulfill in terms of wait-listed demand or marketing to new families? Would just love any perspective on if that's what's happening and how meaningful it is.

Yes. So, I think the reason we chose to approach it that way is obviously with those families who were previously enrolled we set an expectation when we did temporarily close that we would prioritize their enrollment when we reopened. And so we stood by that commitment and made sure that we went out and continue to go out to each and every one of those families that was previously enrolled. As we've shared on previous calls we're taking a very methodical approach center by center to reopen classroom-by-classroom. And so the first priority was provided to those previously enrolled families. In addition to that at the time of temporarily closing many of our centers did have wait lists. And so once we have gone back to those who had previously enrolled, we do go back and we talk to those who are on the wait list. Again people who have already toured, experienced and were excited to start within our centers. And again depending on when the center opened, we are in different stages of where we are between previously enrolled and those who are on the wait list. And then in the centers that have been opened the longest we are onto the phase where we are starting to increase our marketing activities and do marketing activities to attract new enrollment into the center. And so that's really been our approach and feel very good about the way we've approached reenrolling our centers.

Okay. And then any more detail you're willing to provide in terms of what you're hearing from surveying the previously enrolled families? So, those that have not yet reenrolled. And I recognize some are going to age up to pre-kindergarten or something somewhere else. But what are you hearing in terms of how many is just a matter of time? And is it that they're not back in the office yet? Is it health and safety concerns? Just what are you hearing on those that were enrolled and have not yet returned?

Yes. So, I would say that the two primary areas that families who are choosing to wait -- and that's really the feedback we're getting from families. It's not that they are saying no thank you forever. They're really saying now is not the time for me and so they're perhaps deciding that they're going to start in January or after the first quarter. And typically what we're hearing back from them is first and foremost they do have concerns around the health and safety not about Bright Horizons in particular but just about community spread in their particular community or just don't have the confidence to return out into the community and have their children in care. I would say that the second piece, right, so if health and safety is sort of one psychological barrier, I'd say the second is that they may have either other children that are at home or their work situation has changed. And so there is the occasion where a person has either reduced their hours because they have a school age child that they need to support with learning on a virtual or hybrid basis. And so therefore, they're taking on more of the caregiving responsibility. But I would say that those are the two factors that we're hearing from those who are deciding not to come back now and only a small proportion are saying that they don't plan to come back. We are not hearing some of the things that you implied in your question which are around their work arrangement. So, we're not hearing for example that because they're working from home they therefore don't need care. I think that our formerly enrolled families are very clear that it is impossible for them to manage both work and life. So, the idea of the fact that they may be still working remotely as a reason they're not coming back is not ranking high in our surveys.

Got it. That's very helpful. And then just one more if I could squeeze it in. Elizabeth what was the cash flow from ops number in the quarter? I think I heard a pretty high number and I think it might have even been up year-over-year. So any additional detail on what drove cash flow from ops in the quarter?

Yes. So, with $170 million year-to-date, so it was about $120 million just under $120 million in the quarter. And that was largely on the collection of receivables that had been outstanding through June. So, we typically have very strong cash flow in the first quarter first half of the year. And then our -- it's not generating net-net very much in the second half based on how the business typically operates. But this year we had a higher level of receivables. Much of it was driven through the Back-Up Care surge of activity in Q2. So, those collections in Q3 is the main driver.

Got it. Thank you both.

Thank you.

Thank you.

Our next question comes from George Tong with Goldman Sachs. Please go ahead.

Hi, thanks. Good afternoon. You talked about utilization rates of 35% to 40% at your newly reopened centers. Can you discuss how much that utilization is being driven by customer demand versus local legislation on maximum capacity versus self-imposed capacity restrictions?

Let me see if I'm understanding the question right George. You're asking whether our utilization is gated based on state regulations or other restrictions on capacity. Is that what your question is?

Correct. Whether it's state legislation or whether it's something that BFAM is choosing to self-impose say the state is allowing this amount of capacity you're choosing to go below that or if it's just simply capped by demand, but demand isn't there yet?

No. So I mean I think there are certainly some circumstances where we may not have -- we may be fully enrolled in a classroom. And so we can't take any more because of the -- either augment, the absolute capacity or the restricted capacity. But I think in large measure this is a matter of us re-enrolling in the demand coming back. So we are opening classrooms. So if we have a center that has 100 capacity, 120 capacity usually and it may have a restricted capacity because of group sizes that is 110. We would be -- we wouldn't have every classroom open if our demand was for 50 children. We would have classrooms open to accommodate that demand and we would open additional classrooms as the demand comes in. So I think that the restricted capacity isn't governed by what states are imposing in terms of any kind group size restriction. We're in the mode of re-enrolling families based on their own personal situation to come back. As we said families need care, but they also need to feel like their health and safety is protected and that they have -- that meets their family's needs.

Got it. That's helpful. And then I wanted to dive deeper into margin performance. Can you elaborate on how decremental margins for full-service in the quarter compared to your internal expectations and where you expect decremental margins to land next quarter for full-service?

Sure. I mean I think, we outlined that in the script that we did estimated our flow-through in the quarter would have been 50% to 60% for the full-service revenue decrement. And we came in at the low end of that at around 50%. We also came in very close to our -- we're within the range of our expectation on the revenue contraction. So in Q4, we've estimated the year-over-year revenue contraction to be 35% to 45% and that the decremental performance will also be in the 50% to 60% range. And that is driven by the -- as the question came in earlier the additional labor that we bring on ahead of the enrollment or as we are enrolling children and it's not at its most efficient level on top of the other sort of costs that we have with hygiene and health and safety and the other usual program costs. So our expectation would be for that kind of performance for full-service. And it sounds -- it's not terribly dissimilar to where Q3 was, but we do see some incremental enrollment continuing into the quarter. So there will be some improvement there, but it's the comparison over the prior year that is similar.

Got it. Thank you.

Welcome.

Next question is Toni Kaplan with Morgan Stanley. Please go ahead.

I was hoping you could update us on the M&A front. Are you seeing any financial pressure on some of the smaller players in the industry that could drive some acquisitions? Just what are you seeing in terms of valuations and opportunities as we look at M&A?

It's a great question, Toni. And what I would say is that in terms of acquisition targets and candidly, this is true for landlords as well. I think that people are still in a wait and see a little bit and are trying to sort of continue to persist through this environment. So we are certainly continuing to build relationships, make sure that owners understand that we're here when they make that decision that they want to exit the business. But what I would say is that many of the owners that are out there are still contemplating their situations as opposed to deciding at this point to exit. We do think that through 2021, those opportunities are going to start to come out in more significant ways and more significant numbers. And so we are not either trying to pressurize and/or rush the opportunity and instead are making sure that we're in a relationship building mode and are taking opportunities that are coming towards us in a serious way, but ultimately think that 2021 is going to have more opportunity than what we'll close the year at.

Very helpful. And then I wanted to ask about the educational advisory business. It's been really strong through COVID. And obviously, there's no reason why you can't conduct the services because I think most of it is probably over the phone anyway. But are you advising people on whether to take like whether their kids should take a gap year or something like that in addition to just the regular college enrollment type of questions with regard to where they should be going or financing things like that. And I guess given softness around college enrollments because of COVID should that pick up next year more so than now? And just wanted to understand the different moving pieces within that business. Thanks.

Yes, it's a great question. So our advisory business really comes in two flavors. One is the work that we do with employers who are having or providing the opportunity for their employees to go back to school and we'll very strategically manage that workplace education. The second part of that business is what you described which is for employers who are supporting their employees with high school students to transition to college, we really are stepping in and providing expert guidance. And on that score, I would say that within the context of a very choppy environment in college admissions and in college evaluation, our experts are coming into a really important place for families and ultimately therefore for employees and their employers. As it relates to the decisions that are being made you raised a number of important points not the least of which is that many students are coming into this fall having not visited colleges, not having standardized tests and are making decisions in ways that we've never seen before. Likewise this spring, we're anticipating that students are going to be selecting colleges and they may or may not have the opportunity to visit those schools and/or have a really good sense of what college is going to look like in the following fall. So there are a whole host of conversations that are going on about gap years, about transfers, about which schools are in session versus doing hybrid or remote learning. And so it's been really impressive to watch our experts on the college admissions and college financing side do their work with families to support them to make good decisions in what is a really difficult environment.

Thank you so much.

Thank you.

Thank you.

There are no further questions. I would like to turn the floor over to Stephen Kramer for closing comments.

Great. Well thank you all very, very much for your questions and also for joining us on this evening's call. Hoping everyone stays safe and healthy and has a nice Thanksgiving holiday coming up. Take care.

One of these days, we'll say we'll see you on the road, but not yet.

Live and hope. Live and hope.

Take good care. Thanks everybody.

This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.