Good morning and welcome to the Broadridge Fiscal Third Quarter Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please also note this event is being recorded.I would now like to turn the conference over to Edings Thibault, Head of Investor Relations. Please go ahead.

Thank you, Andrew. Good morning, everyone, and welcome to Broadridge's fiscal third quarter 2020 earnings conference call. Our earnings release and the slides that accompany in this call may be found on the Investor Relations section of broadridge.com. Joining me on the call this morning are Tim Gokey, our CEO and our CFO Jim Young.Before I turn the call over to Tim, a few standard reminders. We will be making forward-looking statements on today's call regarding Broadridge that involve risks. A summary of these risks can be found on the second page of the slides and a more complete description on our annual report on Form 10-K. We will also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Broadridge's underlying operating results. An explanation of these non-GAAP measures and reconciliations to their comparable GAAP measures can be found in the earnings release and presentation.Let me now turn the call over to Tim Gokey. Tim?

Thank you, Edings. Before turning to our financial and strategic results, I want to start with this human impact of the COVID virus as it continuous to extend its reach around the world. With our Broadridge home base and nearly 10,000 associates and family members in the New York metropolitan area, our team is seen up close to toll this virus take on so many. We have lost co-workers, family members, friends and neighbors. And heart go out to all of them and to the many still fighting this disease. We also see economic dislocation experienced by so many in our communities here and around the world. These are challenging and difficult times.At Broadridge, our focus has been first and foremost on the safety and health of our associates. We’ve also focused on serving our clients helping them maybe incredible challenges they face as a result of the crisis. And we stepping up to help communities in which we operate around the world. Seeing how our teams are supporting one another, their families and our clients all in the phase of [drenching] change has been inspiring. I’ve never been more proud to be Broadridge associate. Thank you.With that important backdrop, let me layout where we’ve been? Where we are? And where we are going? Beginning on Slide 5. Despite the challenges in the New York area Broadridge as a global company is resilient, is performing well and has real opportunity ahead. The COVID crisis is reinforced the essential nature and the importance of what we do. To carry out this mission, we have invested to ensure the health and safety of our associates as they carry out their essential duties. As a result, our operational performance has been exceptionally strong. That strength led us to continued growth and solid financial…

Thanks, Tim. Like Tim, I’m deeply sadden by the toll that virus has taken on the Broadridge family. We are still grieving but we are resilient and it is impossible not to feel intense pride the way our associates have responded. They are truly delivering in remarkable ways to all our associates’ thank you and a special thank you to our production teams.And now our results. I’m pleased with our performance in the third quarter and even within the [indiscernible] related to COVID. It was consistent with outlook we provided in early March, our performance and outlook highlight the resilience of our business. I’ll begin on Slide 10 with 6 call outs. First, the net impact of COVID on our recurring revenue in the third quarter was modest, but there were more notable impacts in individual product lines. Organic recurring growth was 3% in the third quarter and we expect high single-digit organic growth in Q4 as we benefit from an increase in volatility and the shift of some proxy work from Q3 to Q4.Second, the weak event activity trends we saw in the first half of the year has continued and are now being exacerbated by COVID. This is a lowest event activity in six years. Third, we’ve recorded a 20% increase in sales in the third quarter and notably higher sales in March because of our strong pipeline of new opportunities.We have confidence that we can deliver on our sales guidance even in this environment. Fourth, our strong balance sheet. Our investment grade credit rating is $1.5 billion of liquidity give us ample flexibility to fund our operations, repay our maturing notes and support our dividend.There is no substitute for healthy balance sheet in excess to capital. And [it also] give us the comfort and confidence to focus…

Thanks, Jim. Broadridge is well positioned to weather any economic downturn and I've directed our team to prepare for an extended period of economic weakness. As always, we will balance the [sun time] competing imperatives of investing for what we believe is a very strong future and delivering bottom line growth in the near-term. Like others we will use this time to evaluate where we're devoting resources and to concentrate our efforts on those most relevant in the new environment. I'm confident we'll find the right balance, and I look forward to updating you on our next earnings call.I'm convinced that a long-term focus has never been more important. As we emerge from the crisis, the world will be a different place. As I talked to clients it is clear that the fallout will cause permanent shifts in the way they operate that strengthen the long-term drivers of our growth. We must ensure we'll be ready to help our clients with these challenges. First and foremost, the existing trends driving our growth around mutualization, digitization and data will only strengthen in this new normal. A big driver of mutualization has been the need by our clients to reduce the cost and complexity of their operations.Now, if financial services firms comes to grips with slower growth and near zero interest rates, they're need to transform their business with next generation technology will only increase. Our Wealth Management industry that was already in transition will only face more pressure to evolve. The need for digitized communications will grow. The challenges faced in the investment management industry have accelerated.And I’ve noted at the outset of my remarks, the importance of strong corporate governance will only increase as investors ensure the Board's apply hard earned lessons about business and financial risk. But the impact…

We will now begin the question-and-answer session. [Operator Instructions] please limit yourself to two questions. At this time, we will pause momentarily to assemble our roster. First question comes from David Togut of Evercore ISI. Please go ahead sir.

Thank you. Good morning, Tim and Jim. Hope you are both well and healthy. My question really relates to the early thought process you laid out, Jim on fiscal ‘21. Really with three specific points of clarification, first, on position growth, are you assuming position growth falls from high single to low single-digit in fiscal ‘21? The second is on event driven revenue. Are you assuming a further decline in event driven for 2021, if so, how much? And then third, how are you thinking about managing expenses, to the extent of revenue picture for 2021, is challenged as you’ve laid out?

Yes. Thanks, David. Yes, in the position growth scenarios and look, again, very preliminary and we'll come back in August with all of our details. But in the scenarios we laid out, yes, we're seeing -- we would assume that position growth goes from high single-digits to low single-digits, and even flat in -- as we saw in the global financial crisis. So that's embedded in some of our thinking for those scenarios. On event, obviously, it's not in that recurring revenue. We haven't called it out probably just too early, but obviously, we are staring at remarkable lows of $155 million, which takes us back seven, eight years. And we are -- so I think, all in all, that's a good base to start-off just given -- no one can call bottom but, clearly a good base to build-off, but we'll come back in August with our thoughts on event recognizing that's always the toughest line item, to get.

And then --

And then on -- Yes.

Yes. I don't know, Jim, you want you continue on the expense side, if you want me to grab that. Okay, we're not in the same room. So we're doing this over a WebEx. So you can imagine the hand waving that's going on. So the important thing as we go into next year is that we positioned ourselves for the future. And we think, as I said earlier, that there are real opportunities they are going to be coming out of this. And so we will definitely be investing in ‘21. At the same time, given our scenarios around revenue growth, we need to match our expense growth as well. And so we'll be looking very carefully at all of our expenses. And as you heard me say, we'll be looking at all the areas of investment we have to make sure that we're really focused on the ones that have the biggest impact in this in this new environment.

Understood, stay safe.

Thank you.

The next question comes from Chris Donat of Piper Sandler. Please go ahead.

Hi, good morning. It's good to hear your voices. I wanted to ask kind of a follow up on the event driven just to think about the -- I don't know if cycles was always the right word to talk about it, but it's – there’s anything fundamentally changed on event driven either from the corporate proxy side or for mutual funds that would you think might alter things and I know there's other puts and takes around contested proxies and things like that, but just the big picture on the mutual fund activity?

Yes, absolutely. It is [indiscernible] event driven revenues are core to our business. They can be quite volatile. They're attractive high margin business, and they grow over time in line with stock record growth. And what we're seeing right now is cyclical. We are not seeing any changes to the underlying structure for different reasons, both mutual fund proxy and equity contests are cyclical lows, typically, in these periods of high stress fund companies do what they can to put off these events. So we wouldn't expect to see that anything comeback really on the mutual fund side in a significant way. On the equity contest side, we've clearly seen a pullback and activism during the -- this part of the crisis, what lots of people are saying is that, that will be back in the future. So we'll have to see how that goes. I think the good news is that we're delivering 5% to 7% adjusted EPS growth in the face of this $90 million pullback in event this year, and we won't face that grow over next year. So I think with those points, we feel good about the contribution event we'll make in the future.

Okay, that's helpful. And then as we think about, Tim, you alluded to some of the conversations you're starting to have with potential new business opportunities. Can you give us any more color on that one or is it just too soon to know where you might have new business opportunities with existing clients or are you getting some inbound phone calls from potential new clients? I got to believe that you’ve-- there are a lot of banks and brokerage firms in the world that figured out that their technology was not everything it should be in March and April.

Yes, I think as you said these long-term conversations, it is definitely true that many firms experience challenges. I think that the trend toward mutualization will accelerate as in-house platforms make even less sense. And firm's ability to invest in those things versus other priorities that are more customer facing will be even lower. So we do see significant long-term opportunity. Those discussions typically do take a while. And then in terms of the other opportunities we're seeing, we're certainly expect that what we're seeing with virtual shareholder meetings, there will be some -- obviously, there are states that that did give a temporary, temporary reprieve. So those will go the other way. But I think people are going to see the success of this season, and how well those are going and getting very good feedback on them. And that will continue that trend. And obviously, as I said in my remarks, we believe that the trend towards digital communication continues to represent a real opportunity.

Okay. Thanks very much. Stay safe guys.

Thank you.

Thanks. Your next question comes from Darrin Peller of Wolfe Research. Please go ahead.

Nice guys. Glad to hear you. Are you doing okay? Look, I mean, I think it's really something and it's impressive to see the March, close sales growth rate still strong per your comments. I guess I'd really just be curious to hear where you're adding business in this kind of environment, like what kind of calls you're getting inbound for what specific businesses, I mean, the resilience of your business is clearly showing through versus a lot of other companies that are coverage in the market overall. But, what can you actually add? What's the highest demand right now, if we just start there?

Yes. First of all, we just talked about March. It was interesting because we didn't have any sales that were above a $1.5 million in March. We had a lot of different solutions. And as you know, we have a pretty wide solutions set there and so, it was gratifying to see such a nice increase across a broad array of products. And as we look forward we think about the sales that will happen in the next six months or so those are based on conversations that are already taking place. And there's a nice balance of conversations across both the communication side of the business and the technology side of the business with some, we think some pretty exciting solutions that we are in discussions with clients. As we look at the period, beyond that, then we're getting into -- things will take longer, but it's interesting, one of the things we monitor very closely is our pipeline, our pipeline information of new opportunities and that is holding it very nicely. So what we're seeing is, not just at least March not just the continuation of sales, but also the continuation of the pipeline building.

Okay. And in terms of your capability to implement deals in the -- in a more remote working environment, obviously hopefully this doesn't last forever, but can you just comment on your capabilities in that to actually execute on contracts and new business? And then maybe just a quick touching upon the [BRCC] area growth in the quarter? Was there anything update on the post sale prospectus dynamic or just any more color you can give on that? That growth profile having looks like an [indiscernible]. Thanks, guys.

Yes, okay. So just both good topics so, on implementations, this is certainly something that we are watching very carefully. We have been really impressed with how smoothly the transition to work from home has gone. And, it's going reasonably well for our clients as well. And so we are seeing -- we're not seeing a drop-off in productivity relative to our on-boarding projects. And so, it is something that we are going to watch very carefully and that we have in our scenarios. We looked at different scenarios for that. But we are not seeing any change or pushback in our major projects to-date.On the BRCC side -- we did and there's a couple pieces there Dan, there's -- that in that communications and fulfillment line, there's the post sale piece in those BRCC proper which is the transactional print piece. The post sale dynamics, very, very high volumes, this quarter relative to all of the trading activity in that more than made up for if you recall, we were planning a bit of a downtick there based on some changes and how people are handling managed accounts. But that was more than made up for by the volatility.And then on the BRCC side, as I mentioned at the last call, the offloading of major compliance is complete. And so we did see modest growth in Q3 from higher transaction volumes as the second quarter of stabilization and slight growth. For the year we're expecting BRCC to contribute to earnings but not to revenue growth.And we continue to have discussions with large clients about outsourcing their in-house transactional communications, and that's a part of that long-term hypothesis. And we are continuing progress on digital with more than 100 bond fund complexes on a digital platform and we expect further growth as they begin to take advantage of new capabilities. So we're feeling especially in this uncertain environment as a very stable business and we're feeling very solid about it.

Okay, that's good to hear. All right, stay safe guys and thank you.

Thank you.

Your next question comes from Puneet Jain of JP Morgan. Please go ahead.

Hi, thanks for taking my question. I like to know you all are safe. So, Tim, you have been quite acquisitive recently. Should we expect like a pause there in M&A activity given everything that's going on related to COVID and market?

Yes, Puneet. Great question, and we did make a lot of investments in fiscal ‘20. And we really like what we got and is making a nice impact on our business, particularly on the wealth management side. And that has left us with a little bit elevated leverage because we like being investment grade, we like to 2.0. And we're going to work that down here over this next quarter's, we have very strong cash flow. As we look forward, we want to put ourselves in a position of being very flexible going forward. And so let me just say ask Jim to, to comment further and give us any additional color on that.

Tim got it right, I think near-term goal is to end the year, much closer to our two times number, which I think keeps us in really good shape and a lot of flexibility for all of the capital allocation priorities we have, and I think it'll leave us in a really good position to be opportunistic down the road, but we'll be making sure that we are ready and nimble and healthy.

And then how does the economics of virtual shareholder meetings like meaningful projects give us a sense of like the scale like the magnitude of potential impact, you might get there from [indiscernible] shareholder meetings virtually?

Yes, Puneet a great question. These are not major events in and of themselves you know, think of a ticket price of anywhere from $10,000 to $15,000 per meeting. And so by themselves, they -- they're nice is not going to materially move the ICS line. What it does do though is it really cements our relationship with those companies with the Corporate Secretary, the Assistant Corporate Secretary, and it leads over time to us being able to help them in other ways. And our vision as you know is to provide a very holistic approach to the annual meeting where we're doing a number of the services in and around the annual meeting. And so, we have been doing the proxy piece. But as we go out to the other services in and around that we think we can make it much more convenient and much deeper relationships with our corporate issuer clients.

Got it and who would you compete in that business for virtual shareholders meetings?

Well, for virtual shareholder meetings, it is that -- it's not just doing a WebEx or a webcast, it is -- there is real capabilities required to validate shareholders and to provide voting in real time the transfer agents have created a competing offer basically and we provide information to them to allow them to do that. The -- their offers are much more nascent than others. We've been doing it for a long time, and, frankly do our bit more clunky. So, we do have a strong advantage in this. And it's something that we – we think we can do really well for people.

Got it, thank you.

The next question comes from Patrick O'Shaughnessy of Raymond James. Please go ahead.

Hey, good morning, maybe to follow up on your earlier commentary on development. Any update on your UBS build out, I think it sounds like that CapEx spend is still taking place as expected, but any changes in the development timeline or the go live timeline with that one?

Yes, thank you for that question. It is -- that really remains very much on track. We are -- we've continued to be very excited about the overall opportunity in Wealth Management and with UBS. And as you saw, we appointed Mike Alexander to lead our Wealth Management business. So that is a key step there. We are investing significantly in that engagement for UBS and for the platform to really create what we think is the platform, the future that will be very attractive for others in the industry, and that project remains on track. And it's one of those examples of some large project and we could have seen a change but we're working very effectively in the remote environment.And then just stepping back from UBS talk more broadly about wealth, we feel really good about that. Overall opportunity, when you look at the M&A we've done over the past year, there's a fair bit of it that was in and around Wealth Management. And that has led to a lot of good discussions across the spectrum and Wealth Management space. We are having a number of discussions with large wealth managers, nothing imminent, but there are real pain points we can solve around helping people move to more open architecture platform in the future.

Great, appreciate that. And then just a quick clarification question. You've mentioned a couple of times the $330 million sales backlog. Is the number at the end of March or are you referring to the number that you guys previously discussed as of the end of fiscal 2019?

Yes, Patrick, this is Jim. The -- it's one of the same, we will do a final true up year-end, but we are -- our estimate right now is that it's somewhat similar, which means we've added $120 plus million in sales this year, and we've on-boarded somewhat similar amounts. So you're back to a similar place. Obviously, if we have the strong Q4 that we're planning that we would be adding to that in the fourth quarter and again, we'll come back and through this all up and August.

Great. Appreciate it. Thank you.

This concludes our question and answer session, I would like to turn the conference back over to Tim Gokey for any closing remarks.

Good. I was going to -- I do want to summarize here, I just want to mention, I want to just expand on one answer that we talked about previously was just -- we got into a discussion about capital allocation. And I did just want to mention, we just paid our dividend and that is something that we continue to think is important going forward.So we remain committed to our dividend and that was something I just think it's important in the context of the call for that to be out there. So with that, I want to thank you for joining today. These are unprecedented times and because of what we do and because of how we're doing it Broadridge is resilient and performing strongly. We expect, as Jim said, a strong fourth quarter. And while there is uncertainty around ‘21, we are positioned well, and we see real opportunity as the world evolves to a new normal. So thank you very much for joining today. And we appreciate the support. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.