Welcome to the CBIZ Fourth and Year-End 2011 Quarter Results Conference Call. The conference has now begun. The host for today’s call will be Steven Gerard, Chairman and CEO of CBIZ. All participants are muted and there will be a question-and-answer session at the end of this call. At this time, I’d like to turn over to Steven Gerard, CEO and Chairman of CBIZ.

Good morning, everyone, and thank you for calling in to our fourth quarter and full year conference call. Before I begin with my comments, I’d like to remind you of a few things. As with all of our conference calls, this call is intended to answer the questions of our shareholders and analysts. If there are media representatives on the call, you’re welcome to listen in; however, I ask that if you have questions you hold them till after the call and we’ll be happy to address them at that time. This call is also being webcast and you can access the call over our website. You should all have received a copy of the release we issued this morning. If you didn’t, you can access that on our website or call our corporate office. Finally, please remember that during the course of the call, we may make forward-looking statements. These statements represent management’s intentions, hopes, beliefs, expectations and predictions of the future. Actual results can and sometimes do differ materially from those projected in the forward-looking statements. Additional information concerning the factors that could cause actual results to differ materially from those in the forward-looking statements is contained in our SEC filings, Form 10-K, and press releases. Joining me on the call this morning is Jerry Grisko our President and Chief Operating Officer and Ware Grove, our Chief Financial Officer. Prior to the opening this morning, we were pleased to report our fourth quarter and full year numbers for 2011 and in a year where we did not see any significant improvement in the economy or the economic factors that impact our clients; we were pleased to report financial information that was consistent with the guidance we gave the last February, including the fact that our earnings per share were reported at $0.58 compared to a normalized $0.52 for the prior year, up over 11%, a slight increase in our revenue and the continuation of our very strong cash flow generating capability. I’d like to turn it over to Ware Grove now to give you the details and then, I’ll be back to talk about our 2012 outlook and other factors affecting the business.

Thanks, Steve, and good morning, everyone. As is our normal practice, I want to take a few minutes to run through the highlights of the numbers we released for the fourth quarter and the year ended December 31, 2011. We’re pleased to report results for the full year that are in line with our expectations. As we expected, the economic environment that affects the mid-sized businesses typically served by CBIZ continue to present a challenge to achieving any substantial revenue grow throughout the year As a result, we continue to carefully manage our costs in order to protect our earnings in this environment. Our head count adjusted for acquisitions is down about 5.1% compared with a year ago. So, we are aligning resources appropriately to our revenue. For the year ended December 31, 2011, we reported earnings per share from continuing operations of $0.58 a share, compared with $0.48 a year ago, which is a 21% improvement. As we have commented throughout this past year however; remember that results in 2010 included charges of $0.02 per share for lease restructuring in connection with an acquisition in the first quarter of last year, and $0.02 per share for financing costs incurred in the third quarter of last year. Normalizing the 2010 results to exclude these charges, the $0.58 per share reported for 2011 is 11.5% higher than a normalized $0.52 per share a year ago. Now, total revenue for 2011 was $733.8 million, an increase of $3.4 million or 0.5% over total revenue reported a year ago. Bear in the mind that with the sale of our Individual Wealth Management business during the first quarter of this year; that business generated about $6.6 million of revenue in 2010. So if you make an adjustment for the sale of this operation, total…

Thank you, Ware. Let me reiterate a few of the key points for 2012. We are going to be expecting and believe we have a good chance of achieving low single-digit organic growth in both our Financial Services and our Employee Services business in 2012 and that will offset the possibility of a decline in MMP’s business of again low single-digit growth. There are steps being taken in the MMP business to mitigate any deterioration that might come from revenue loss, but let me remind you that they did a superhuman job in 2011, by offsetting $7.5 million of expenses and are not confident at this point about how much more we’ll able to get out of the expense base but I know that every effort is being put towards that. As Ware has mentioned, we have a very robust backlog of potential acquisitions. It is as strong now as it has been in the past. We view the inevitable consolidation in actually all 3 of our key businesses as moving ahead. So we are somewhat positive on our ability to do our typical 3 to 5 transactions in addition to the 2 that closed this year. Underscoring all of this is our expectation that our EBITDA and our cash flow will again continue to increase in 2012 over the 2011 level. Let me stop at this point and take questions from our analysts and shareholders and then come back and sum up.

[Operator Instructions] Our first question comes from Jim.

Could you give us the same-store breakout by segment for the quarter, possibly?

Yes, I can do that. Jim, the same-store revenue in the fourth quarter for Financial Services was down 3.4%. It actually grew by roughly 2.2% in Employee Services and it was down roughly 8.1% in our Medical Management Professionals group. So, when you count those all together, we were down 3% in the fourth quarter.

And financial services had a negative contribution in the fourth quarter for the first time in a while; any thoughts on that? I mean, if some of them may have related to the Rabbi Trust issue, but....

Yes, a couple of things Jim, beyond the Rabbi Trust issue. It’s a seasonal difficult time of the year about third and fourth quarter. So typically these businesses don’t have much margin to work with or much room for error. And this year with the acquisition of our Memphis operation in August, proportionately we had that new revenue coming in at really low margins or at best in the third and primarily in the fourth quarter with some losses coming from that new operation and that was not unexpected by the way. We also had some clients in one of our major very successful operations; significant clients that elected to defer some work that was initially scheduled for the second half of 2011 and that work has been deferred into 2012. We’re very confident that, that work will get done. We are disappointed to see that the client elected due to further work. So that had an impact on -- because we have the resources in place and that impacted both revenues and margins in the fourth quarter. We also kicked up a little bit in our bad debt expense in the quarter; so that also had an impact on the margins in the fourth quarter for Financial Services.

Yes, but Jim as we look at it, there is nothing systemic that we’ve been able to identify in the fourth quarter that we’re particularly concerned about. The Specialty and Financial Services, which is 54% of our revenue in any given quarter based on certain projects, this thing can swing one way or the other. So you’ve identified a really good point; we spend a lot of time looking at it. Ideally, it’s much more of the timing and operation issue than more than anything else.

Is a way to look at it, I mean, that you expect -- or you made the Memphis acquisition which is sort of going to hopefully pay off in the first and second quarter, but also that you expect improved activity in the first and second quarter; so needed to keep the resources in place. Is that possibly a way to look at it?

Yes, certainly and particularly for the Kansas City engagements I talked about. Those resources were in place and that work unfortunately was deferred. But absolutely, we think the business is relatively stable and as we’ve commented before, we have to prudently manage head count resources with a view towards next year’s tax and audit season, which occurs in the first four to 5 months. So we carry those resources through the fourth quarter and that does have an impact.

Great. I’ll get back in queue for some other ones.

And our next question comes from Josh. You may now ask your question.

Of the work you were just talking about that was deferred into 2012, you think that is -- is it a back half 2012 event or is it work that you’ll start doing in the first half of the year?

It’s probably a little bit of both, Josh.

And what Ware was giving you was a -- unfortunately, the Financial Services declined in the quarter there was no one item you could look to. It’s really a combination of a lot of small items. So, this is just one factor. I wouldn’t get too far ahead of myself in trying to extrapolate that into the first quarter, but we don’t expect we’ll lose that business in 2012.

Okay, great. And you guys did a great job of hitting up on most of my questions, but I did just have a question about the acquisitions, the 5 that you’ve completed since August of last year. I was wondering if you can just talk about the organic revenue trends you’ve seen within those businesses compared to your legacy operations and I guess notably with regard to TD, which was the biggest deal you completed?

Yes, Josh. These guys without going into specifics, most of the acquired businesses that we’ve done in recent years are performing to expectations. And our expectations basically as we went through this before, when we do an acquisition the earn-out subsequent to closing is based on some growth goals over the next 2 to 3 years post closing. Now, the environment in the last couple of years has been top for everyone and our newly acquired businesses are not immune to those pressures. So of the 9 or 10 transactions, the vast majority are that we’ve done since 2009 by the way that the 9 or 10 transactions, the vast majority are operating in line with our expectations. There are a couple of them that are falling behind, but not significantly.

Yes. But Josh, generally, if you go back and look over 5 years, our newly acquired businesses would produce better margin results than our existing business. Part of that is driven by the earn-out for sure. Part of it’s driven by an energy that a new business brings to it. But if you look statistically, we tend to do better with the newer acquisitions in most of the legacy businesses.

Okay, great. And just lastly from a housekeeping perspective, do you have an idea of where CapEx will come in 2012?

Yes, we expect it again in that $4 million to $6 million range. We’ve been there the last couple of years. We don’t have any big project, that’s not the character of our business. So, I would say in the $4 million to $6 million range next year.

Our next question comes from Jim.

Could we go over like what you’re currently seeing with the change in brokerage commissions in the ES business? And where you are coming out on that and whether that’s impacting you at all?

Jim, we’re not seeing any significant change in the -- in our client’s view of the fees now that they’re being broken out. They respect the [consultative] nature of what we do, they understand the value. So as of today, and I think I indicated in the February call, we didn’t expect much impact in 2012 and there really hasn’t been much of an impact of the disclosures coming out of the MLR business. The industries, the group health industry is wrestling with bigger issues dealing with lower employment and design plan, the planned design changes at lower revenue and stuff like that. But as of now, we’ve not seen anything significant from the client and quite frankly, we’ve not seen anything significant from the carriers. There are still one or 2 who made some changes earlier in the year and there are others that are watching the landscape. But as of today, we haven’t seen much of an impact and I am not expecting we’ll see a significant impact in 2013 -- in 2012, I’m sorry.

Okay. And specifically in MMP, you are getting some issues related to radiology reimbursement and presumably some -- there’s more impact in 2012, can you see what you see going forward or is most of that been anniversaried or is there more to come?

I would expect 2012 to see a deterioration in revenue per procedure. That’s already set by the reimbursement rates by certain technical procedures that are done on certain categories of radiological reports. So we expect that will happen this year. How much of that we can make up with new business and how much of that we can make up with further process improvements, isn’t clear at this point. But I certainly expect that on a same client basis, revenue per procedure in radiology will tick down a little bit. Perhaps not as much as we’ve seen in the last 2 years and there is no clear evidence as to whether we bottomed out or not with respect to what Congress might or might not do. All we know is we know what the rates are likely to -- we know what the rates are in fact going to be for the rest 2012.

And can you give us kind of numerical impact, I’m seeing numbers like 3% to 5% for radiology but is -- you’re not a 100% radiology, so…

3% to 5% would be too high in taking a look at a flat revenue number. It would be somewhat less than that.

Okay, on a different subject, any thoughts or impact so far of McGladrey going private?

No. The McGladrey was and continues to be a very good competitor. It probably cleared up some internal uncertainty as to what was going to happen. They did an excellent job in maintaining their client base through their public trials and tribulations but on a -- now that they are consolidated into one firm; we haven’t seen any greater impact on us than we had before.

And at this time, there are no more questions in the queue.

Okay. Well, on behalf of CBIZ, I want to again thank our analysts for their support, for our shareholders for their support and particularly now for our associates, this has been yet another difficult year primarily made difficult by external factors. So that no matter how far -- how hard we worked, we still we’re running into headwinds. You all did a great job, I’m proud of each and every one of you. The results continue to prove the sustainability of the model and our ability to generate cash, our ability to hang on to and service our clients with an extraordinarily high retention rate. So, we should all be very proud of that. As we look in 2012, I think we’re feeling a little bit better. I think we see a little bit of light. So I thank you for your hard work last year and hope I can join you in high sizing on some of the results that we’re likely to see in 2012. With that, thank you and look forward to talking to you after the first quarter.

This call is concluded. Thank you, for your participation.