Welcome to the CBIZ First quarter 2012 Results 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 the call. At this time, I’d like to turn the call over to Steven Gerard.

Thank you, Joanne, and good morning everyone and thank you for calling into CBIZ’s first quarter 2012 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 being webcast and you can access the call over our website www.cbiz.com. You should have all received a copy of the release, which we issued this morning. If you did not, you can access it on our website or you can call our corporate office for a copy. Finally, please remember that during the course of the call, we may make forward-looking statements. These statements represent management’s intentions, hopes, belief, expectations and predictions of the future. Actual results can and sometimes do differ materially from those projected in forward-looking statements. Additional information concerning factors that would cause actual results to differ materially from those in forward-looking statements is contained in our SEC filings, Form 10-K and press releases. Joining me on the call this morning are Jerry Grisko, our President and COO and Ware Grove, our CFO. We’re pleased to release this morning our first quarter results and we’re off to a good start as we signaled we might be in our last call. Total company revenue was up 5.1%. Earnings per share were flat --- or, well, earnings per share were up, I’m sorry, on flat share count and cash earnings per share were up as well. Led by our 2 core businesses, financial services and employee services whose combined revenues were up 8%. And notably our financial services’ same unit revenue was up 3.5%, the highest since Q4 of 2008. As noted in the release this morning, we continue to have headwinds in our MMP business and I’ll try and address those later on. With that introduction I would like to welcome you to the call and turn it over to Ware to give you the details.

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 this morning for the first quarter 2012 earnings release. As Steve commented, total revenue in the first quarter increased by 5.1% over the first quarter a year ago. And we are very pleased to be able to report organic revenue growth in the first quarter of 2012. As we commented previously, over the past year, we have been seeing signs of improvement in the environment for the mid-size businesses we typically serve and our ability to record organic growth in the first quarter of 2012 is a reflection of this improving trend. Looking at our core Financial and Employee Services business, which on a combined basis represent 80% of our total revenue, in the first quarter the same unit revenue grew by nearly 3%. With 3.5% same unit growth achieved in the Financial Services Group and 0.9% or essentially 1% same unit growth in the Employee Services Group. Now within Financial Services, the number of hours billed to clients within our accounting business units has decreased very slightly compared to the first quarter a year ago and that decrease is approximately 1%. But we continue to realize higher yields on the hours billed and therefore we are achieving organic growth within this segment. In addition to our core local accounting business units, our other nationally based Financial Services businesses are performing very well and we expect this trend will continue through the balance of 2012. Now turning to the Employee Services Group, within this group we continue to see strength within the Retirement Advisory, Payroll and HR Consulting and Recruiting businesses. And we are beginning to achieve growth within our Property and…

Thank you, Ware. Let me see if I can give you some additional color on the first quarter. This was a good quarter for us and this was consistent with what we thought we’re going to see after our last call. But let me caution that it’s a little too early to declare complete victory. The basic economic factors that continue to provide uncertainty for our clients in small-to-mid size companies have really not been resolved either by governmental action or by a strong rebounding economy. So we consider the current economy to continue to be a bit fragile. Having said that, the outlook for us appears to be considerably better than it has been in the past. And we look forward to future quarters, which will give us a greater certainty as to whether we’re truly seeing a sustained robust recovery. So again, the first quarter was good. It was consistent with what we thought but I think it’s important that we keep the quarter results under control until we get further clarity with subsequent quarters. With respect to our MMP business, we have been completely open to the fact that this is going to be another tough revenue year. They are continuing to develop ways to improve profitability as they did so successfully last year. They are aggressively going after new business. And they are focusing on a more active acquisition program. So this continues to be an important business for us, one that we will see some revenue decline in 2012 from organic business and we’re hopeful that we will be able to make that up. With respect to our acquisition program in total, the backlog of potential acquisitions is as strong as it’s ever been. As we’ve noted before, we expect that from here on out, we will do about 3 to 5 transactions or perhaps more and that is an encouraging sign for us as we look out. With respect to our 2 core businesses, we’re expecting over the year to see in total organic same business unit growth by end of the year continuing where they’ve started this year. We don’t tend to look at this quarter-by-quarter but over the course of the year I expect that that’s what we’d be able to report. With that, I’d like to stop and take questions of our analysts and shareholders and then I’ll come back with some concluding remarks.

[Operator Instructions] Our first question is from Josh Vogel with Sidoti & Company.

My first question I think where you were talking about higher yields on the hours billed in financial services, can you just talk about what total hours -- can you give out what total hours were billed during the quarter versus a year ago?

Well, as I commented earlier the total hours declined about 1%. That may not be an indication of client demand by the way, it could be an indication of efficiencies of management of the engagement. So after declining 4%, 5%, 6% in recent years, we view this as very positive and not unexpected. So the yields to the extent that we’re bringing more efficient engagement management to the table, that means that we’re still gaining the same revenue and using fewer resources. Therefore, you’ve got top line growth and that’s a nice metric to see.

Yes, definitely. Okay, and where you talked about some legal matters, can you just refresh me what was going on that front?

Josh, it was no different than when we reported in the last -- in the 10-K in the last Q, just the activity level tends to accelerate than slowdown. We saw a little bit more in connection with the Mortgages Limited case in the quarter and some of the other cases that we’ve talked about. There are no dramatically new expenses connected with any new cases. It’s just much more about kind of the lumpiness of the bills.

And it’s not a statement that we expect liabilities to increase so much as we are managing our way through these cases at the early to mid-stage of these cases.

Yeah and also as you can appreciate, and I think we’ve commented on this before, in some of these larger cases, one of the claims that is made tends to try and tie CBIZ as an entity to Mayer Hoffman and McCann audit business and as you know that’s a critical element for us to keep those 2 things separate as in fact they are. So when these kind of cases come about, we put a lot of resources against that particular issue. So we don’t lose one of those.

Okay, great. And just one last one, with regard to EPS guidance. I know we saw the gain on the sale in both Q1 last year and Q1 this year. So I guess you could back them out and you can get apples-to-apples snapshot and still looking for about 6% to 8% growth, but when you initially gave your EPS guidance a couple of months ago for the year, did that include the expected gain on the sale that you’re going to see in Q1?

Yeah, Josh, we didn’t know what the expected gain would be. We assumed it would be roughly equal to the gain in the prior year. The fact that it rounds to $0.01 more is not a concern to us. We’re not changing our guidance. It didn’t incorporate $0.03 versus $0.02. We’re still saying 6% to 8% over the $0.58 a year ago.

Our next question is from Vincent Colicchio with Noble Financial Capital Markets.

Yeah, Ware, I apologize may have missed it, overall organic growth for the quarter.

Overall, organic growth was, Vince, 1% or 0.9%. But again, the core group roughly 3% on financial services and employee services, offset by the decline -- the 6% decline in medical management and, of course, the M&A national practices also had a decline. So roughly 1% overall organic growth.

And what was the number of the national practices.

Well, national practices is a very small number, but it was down 7.6%, Vince.

Okay. In the M&A market, have there been any changes in terms of multiples picking up here, any color there would be helpful?

We’re continuing to see no change in the multiples on the financial services side. The multiples on the employee services side especially for the retail employee services, the retail benefits and property and casualty business continue to be a bit higher but they haven’t moved dramatically and on the MMP market, they haven’t moved dramatically either.

Then is there any color you can add in the property and casualty market, the stabilization here or is it just simply volumes getting a little better any color would be helpful there as well?

We are beginning to see as was expected in the industry some firming in pricing, it’s somewhat anecdotal now as each of the clients renew. We’re seeing slightly stronger pricing. So the expectation over the next 12 to 18 months is that pricing will firm up as compared to the last 5 years to 6 years.

Okay. And then in the MMP business, you said that you were affected by some client losses to consolidation and I guess they are competitive losses, which would you attribute to have had a greater impact?

There are 3 or 4 categories of client losses, some of it is loss of hospital contract, some of it has to do with consolidation of practices, some of it has to do with the practices themselves to spending and some are competitive. Over the past year, I would say the competitive losses were probably no more than 25% of the total losses. We don’t lose too many to the competition, it’s much more an industry wide phenomenon, where the number of groups are breaking up, in some cases the groups are being acquired by hospitals who do their own billing. So I don’t have the exact number in my head, but it is not 50% of the volume loss.

And our next question is from Jim MacDonald with First Analysis Securities Corporation.

Just a follow up on Josh’s question. So for EPS guidance are you counting this as a $0.38 quarter?

Well, you could adjust Jim, you can adjust both, I think you have basically the same growth if you adjust last year versus this year, you’d have to adjust both years by $0.02 or $0.03. We are looking at it as a $0.36 versus $0.38 quarter at this stage, not really making the adjustment ourselves.

Okay. And then you sort of talked about how same-store growth for ES and FS might bounce around throughout the year? Is that because as we get later in the year it turns to more a project business or is there some other reason for that?

No. There is no other external reason that we have already -- other than what we’ve already talked about. There is a degree of lumpiness, there is a degree of large client activity so what I wanted to do is just signal that our expectation for the year that same unit revenue growth for each of our core businesses without getting into quarter 2 versus quarter 3 because these things can be somewhat lumpy and we’re expecting growth in our -- same unit growth in our core businesses for the full year.

And what impact do you expect to see if assuming the threat of the capital gains tax rate goes -- still going up next year and also may be the impact of Sarbanes Oxley going away under the JOBS Act for small businesses that might have been thinking about going public or whatever.

Well, let’s take -- there’s a bunch of things that are pending. Let me try and take each of them. With respect to the Sarbanes Oxley possibility of small companies not having the same requirements that they have, that won’t have a great deal of impact on us. Our audit business is important to us but isn’t the key driver. So whether there are changes there and we get to pick up something or lose something that’s not going to have dramatic impact on us. The MLR, the medical loss ratio, which we’ve talked about in prior calls and the concern that the transparency coming out of that would affect our Employee Services business, quite frankly we’ve seen little or no impact of the MLR. The third item that you asked about was...

Did you expect this to be a better year for transactions and therefore...

Oh, capital gains. That’s an interesting question. Every single year or early in the year there are rumors of capital gains changes coming out of Washington and an expectation that people will be more interested in selling this year rather than next year. The fact of the matter is it never has happened that way. So we’re not seeing any greater list of potential acquisitions because of a concern or an opportunity to take advantage of capital gains. What we are seeing is a stronger list of possible acquisitions for other reasons in each industry but not being capital gains driven. I will tell you that a change in capital gains or any other significant change coming out of Washington affecting taxes is generally a positive for us because it gives us an opportunity to sit down again with our clients, talk about something new and come up with solutions. So it may not impact the M&A activity but it might help our financial services group. I think there is also a healthy skepticism here as to whether anything will happen in Washington the rest of this year affecting -- out of Congress that are likely to affect our businesses.

Gentlemen at this time, there are no further questions in the queue.

Okay. Well there’s no further questions, let me just give you some concluding remarks. Again we are very comfortable with the first quarter. We are very pleased with the results of our employee services and financial services groups. We are working very, very hard as is the management of MMT to do and be as successful as they were last year in offsetting whatever revenue declines we have. Fundamentally, the business prospects look good this year and better than in first quarter of the last couple of years albeit with the caution I gave you earlier, which is it’s a little early to declare total victory. Having said that, I’d like to thank our own associates who have worked extremely hard in the first quarter to produce these results and I’m looking forward to being able to present everyone our second quarter results. With that, I thank you and if anyone has any additional questions please give us a call.

Ladies and gentlemen, this call has concluded. We thank you for your participation.