Good morning, ladies and gentlemen. My name is Ryan and I will be your conference operator today. At this time, I would like to welcome everyone to the Insperity First Quarter 2014 Earnings Call. (Operator Instructions). At this time, I would like to introduce today's speakers. Joining us are, Paul Sarvadi, Chairman of the Board and Chief Executive Officer; Richard Rawson, President; and Douglas Sharp, Senior Vice President of Finance, Chief Financial Officer and Treasurer. At this time, I'd like to turn the call over to Douglas Sharp. Mr. Sharp, please go ahead.

Thank you we appreciate you joined us this morning. Before we begin, I would like to remind you that any statements made by Mr. Sarvadi, Mr. Rawson or myself that are not historical facts and considered to be forward-looking statements within the meaning of the Federal Securities Laws, words such as expects, could, should, intends, projects, believes, likely, probably, goal, objective, outlook, guidance, appears, target and similar expressions are used to identify such forward-looking statements and involve a number of risks and uncertainties that have been described in detail in the Company's filings with the SEC. These risks and uncertainties may cause actual results to differ materially from those stated in such forward-looking statements. Now let me take a minute to outline our plan for this morning's call. First, I'm going to discuss the details of our first quarter 2014 financial results. Richard will discuss the Q1 gross profit results and our expectation for the remainder of the 2014. Paul will then add his comments about the quarter and our plans for the remainder of 2014. I will return to provide our financial guidance for the second quarter and then update to our full year 2014 guidance. We will then end the call with the question and answer session. Now let me begin today’s call by discussing our first quarter results. Today we reported first quarter earnings of $0.37 per share. These results were $0.03 per share by the midpoint of our forecasted range as higher gross profit per worksite employee and lower operating expenses more than offset a slight shortfall in paid worksite employees. As for our key metrics, paid worksite employees averaged 126,289 for the quarter, an increase of 2.3% over Q1 of 2013 however below low end of our forecasted range of 127,000. Gross profit per worksite…

Thanks, Doug. This morning, I will comment briefly on the details of our first quarter gross profit results and then I will give you our gross profit outlook for the balance of 2014. Doug just reported that our gross profit per worksite employee per month of the first quarter was $280 which was $2 above the mid-point of our forecasted range. Gross profit consisted of $188 of average markup, $77 of direct cost surplus and $15 from our adjacent businesses. Now let me give you the details of each component. The $2 per worksite employee per month improvement in gross profit came from an increase in our direct cost center surplus. The $2 per worksite employee per month improvement in our surplus came from the combination of a $2 per worksite employee per month increase in the surplus in the payroll tax cost center, a $1 increase in the workers' compensation cost center surplus and reduced by $1 increase in the benefits cost center deficit. Better-than-expected surplus in the payroll tax cost center was the result of the 2014 state unemployment tax rates in several states coming in lower than originally forecasted. The better-than-expected surplus in the worker’s compensation cost center was the result of slightly better than expected clients’ activity. As for the benefits cost center, the increased deficit was primarily driven by a significantly higher than expected fourth quarter healthcare claims that were paid during the first quarter offset by a lower than expected first quarter year over year claims range of 2.1% in the United Healthcare Plan. The gross profit contribution from our adjacent business services came in on budget at $15 per worksite employee per month which is $2 per worksite employee per month better than Q1 of 2013 which further supports our long term strategy…

Thank you, Richard. Today my comments will cover three important topics for Insperity shareholders. First, I will update our financial guidance for 2014 and corresponding changes to our operating plans since last quarter. Second, I will provide a progress report on the key initiatives we expect to drive our growth in profitability for the balance of the year and into 2015. Then I will finish my comment addressing our long-term strategy for the company and our view of where we are in the execution of our plan. In our last conference call, we outlined a range of key metrics that implied a range of expectation for earnings per share of $0.96 to $1.31 with the midpoint of the range at $1.11. We also provided guidance for the first quarter in the similar fashion with the midpoint of $0.34. Now instead of building up from each metric to the expected guidance, I want to provide the bottom-line first and then explain how we got there. Doug will provide the specific metrics in a few minutes. So the bottom line is our key metrics now imply a tighter range for EPS of $0.98 to $1.18 with the $1.08 as the midpoint. This is after our first quarter coming in ahead of expectations by $0.03 due in part to the timing of certain operating expenses. Now on the surface, this update may appear to be some tweaking and refining of the same growth in operating plan for the year, but in reality our current forecast includes a worksite employee shortfall coming out in Q1 and a quick response by management to better align operating expenses with our projected growth over the balance of the year. Our revised operating plan keeps us in the same ballpark for this year's EPS results and positions us…

Thanks, Paul. Now before we open up the call for questions, I’ll like to provide our financial guidance for the second quarter and an update to our full year 2014 forecast. As Paul mentioned our updated guidance imply the EPS range of $0.98 to $1.18. In general, this updated 2014 guidance reflects our plan to hold down the growth in operating cost until we experience acceleration in unit growth which is now expected to begin in the latter half of 2014 and continue throughout 2015. This operating plan combined with the forecast of slightly higher gross profit per worksite employee is expected to largely offset the impact of lower worksite employees on our 2014 earnings. As per our quarterly earnings pattern with the impact of Q1 sales of renewals on our client mix now behind us, we are now able to refine the seasonal pattern in gross profit over the balance of the year. This resulted in some tweaking of gross profit forecast between the quarters. So as far as our key metric guidance, we are forecasting average paid worksite employees in a range of 128,000 to 128,500 for Q2 and above stated our full year guidance to a range of 131,000 to 133,000. As Richard mentioned, we expect gross profit for worksite employee per month to be in the range of $254 to $257 for the full year which is slightly higher than our initial guidance. As for the second quarter, we expect gross profit for worksite employee per month to be in a range of $248 to $250. We expect this step down from Q1 to Q2 and the seasonality over the remaining quarters largely reflects the impact of payroll wage basis on our payroll tax surplus and increased participation in high deductible plan on our benefit planning…

(Operator Instructions) your first question comes from the line of Tobey Sommer from SunTrust. Your line is open. Tobey Sommer – SunTrust Robinson Humphrey: Paul, I had a question for you about the iterative process that has taken a while to reinvigorate growth. When you look at your strategy alternatives – when you have done that periodically over the last two or three years, have you found that, are you starting to choose slightly more radical choices and maybe that is wrong but maybe more aggressive choices or when you are confronted with two or three alternatives to implement your strategy, are you choosing the one that is in the middle. Thank you.

Well, if I understand your question on the iterative process, it’s a learning process of saying what’s working and what’s not working and what can we tweak, most of it is really around getting the sales motion right for the sales team and going out with a wide array of business performance solutions, adding a more consultative approach and then offering a multi-product recommendation and then bringing those to closure. And once we got that, where we thought like we had it right which was of course the fall of 2012, that's when we ramped up the number of business performance advisors, started the recruiting process and so now we are simply in the normal timeframe that it takes to ramp-up the sales team, bring them up to the right level of sales efficiency and have the efficiency turn into sold and then paid worksite employee. We are on that track and it's going well in that respect, all of the signs that we look for in terms of ramping up the number of advisers with 12 months field experience, that's now just at a 5% positive number. So we had a good results against that growth and the size of the sales force and we expect that to ramp up dramatically now just like the ramp-up was last year and the total number of hired business performance advisors. But as far as the type of changes that we made in the decisions we made, I would say they were not – we are not throwing stumps against the wall by any stretch of imagination. It's a very systematic approach and very deliberate approach because our goal is always to produce consistent predictable growth not just to have a big bang that happens to work one time. So I hope that answers your question, Tobey. Tobey Sommer – SunTrust Robinson Humphrey: That does. Thank you. As a follow-up, I was wondering if you could talk about the adjacent business units that are driving, maybe experiencing the best growth, and therefore contributing to the enhanced gross margin contribution that you described.

There are goals for this area. It was very clear in the long-term strategy. This is key because it has a third contributors to the gross profit line and as Richard mentioned, over the long haul, we hope for that to reduce some of the volatility in our gross profit for worksite employee because there is really no limit to what that number can be. Now that these businesses are in place, the selling systems are out there, now we can ramp-up sales team and those other organizations which are fed by the BPAs that are out in the marketplace, we can ramp that up we believe very successfully in the years ahead. And what's key about that is because the whole idea was to cast a wider net, like I mentioned in my script and to aggregate a much larger customer base into our Insperity culture if you will and then have those prospects available to upsell into products that will make additional margin on, et cetera. So, it makes for a much larger opportunity if you only have one product to sell to a single customer and you have nothing else to sell them later on, that's a limited future even if you have a wide, large greenfield opportunity for the one product. But if you can imagine a matrix now with many products that we have and the different markets we are after and our ability to bring the customer in at any product or at any time and then have that large base of customers to continue to develop the relationship that really builds on itself and then we are able to have a nice third contributor to that gross profit line and really keep our margin intact going forward even if the business maybe becomes more competitive in our core service. So we think it gives us more options in the future and we have had real good results in a variety of the businesses. Our standalone recruiting business is doing exceptionally well. Our time and attendance business is doing very well. So all the way through the adjacent or strategic business units that we started pre-2012 that first portfolio of businesses that were launched together they were near cash flow break-even last year, they are going to contribute to the EBITDA line this year and we expect those to come out of water very nicely as we move ahead. Tobey Sommer – SunTrust Robinson Humphrey: Thank you. Just to clarify, thank you for the color, that's helpful. The two you referenced - the time and attendance and recruiting, are those among the faster growing ones?

Yes, I would say they are kind of leading the pack right now but they are still small enough that you know, you have a good sales supported by one unit it can really come up and start competing more favorably and we have good momentum in each of those businesses. Tobey Sommer – SunTrust Robinson Humphrey: Thank you very much. I will get back in the queue.

Your next question comes from the line of Jim Macdonald from First Analysis. Your line is open. Jim Macdonald – First Analysis Securities: Yeah good morning guys. Could you talk a little bit more about this worksite employee growth rate? In your sequential gross in Q2 of a couple of thousand is below what I can remember even when you had a significantly smaller sales force and weren’t positioned, meaning normally you would be growing 4,000 or 5,000 sequentially into Q2 and I mean this is just seems like a very-very low growth for that quarter.

Essentially you are starting with that much lower starting point of 2500 employees and kind of takes it out of the plan going forward and it has got a pushed up as well as the quarter like I mentioned in my script. But we are trying to be conservative at this point on that number and we think that's the right thing to do especially with the healthcare reform changes that is taking place. And a little bit of wait-and-see attitude we are seeing with those, with that customer set in small business division. So we thought that was the appropriate avenue to take. Jim Macdonald – First Analysis Securities: It's – thinking about other possible explanation, I mean how about competitive pricing and have your competitive losses or retention been as good as it's normally been and things like that, anything else impacting it.

Our retention actually was good in the quarter. It was on what we expected it to be. Now obviously over the last, I would say nine months or so, we certainly and I mentioned this last quarter, we certainly had a new level of competitive pricing pressure. I think, you can, when you have a company going public out there that wants to really kind of grow at any cost approach which is the spine and that what's folks want to do. So that's definitely a change in the competitive landscape that I discussed last quarter. And again our gross rate is more driven by that number of BPAs and as they ramp-up in their experience and closing those as deal is out there. So I think we have responded well on the competitive side especially in the first quarter we had our sales convention, we had an opportunity to hit that pretty heavy. And our goal is to continue to be able to be competitive and sell these deals against the competition but sell them at a higher price and be the premium service provider and not see a diminutive effect in that gross profit area. So that's our strategy there. Jim Macdonald – First Analysis Securities: And just another thing I noticed and maybe it's just -- your average salary was actually down slightly year-over-year although the bonus was up large, is there some fundamental I mean normally your average customer salary, worksite employee salary goes up pretty consistently, is there any fundamental change in mix or something that's happening?

Well of course, every year there is a mix change, at the beginning of the year that kind of resets a lot of that total book of business metric but no fundamental change in the type of customer or anything like that. Jim Macdonald – First Analysis Securities: Okay. Thank a lot.

(Operator Instructions) Your next question comes from the line of Mark Marcon from Robert W. Baird. Your line is open. Mark Marcon – Robert W. Baird: Good morning. As we look at – would you anticipate that kind of the rate of growth that we are seeing with regards to the worksite employees that’s been projected for the balance of this year, it doesn't seem like competitive environment is going to change? So would you anticipate maintaining the pricing discipline that this kind of the new range that we are kind of in?

No, no. I certainly think that we are going to see accelerating unit growth as the BPAs reach their level of sales efficiency and the volume will continue run up. Now, we are, we acting at the pricing pressure and because we do certainly believe that we need to be within a range that you can sell the value to the customer. But we are also aggressively working the operating expense plan so that we can make sure we can maintain the operating margins we want to have as the business goes on. So we will look at the whole picture and we are definitely responding to be more competitive in the marketplace and the big change for us even in the mid market size business is the offering of the variety of options some that Richard mentioned we have had despite of nice uptake on our lower cost and lower price, and lower price for customers and lower cost basis for us to match in our co-employment offering. So we are taking steps to have a more competitive offerings in that respect and we also as you know from last quarter we have got investment in our technology this year that we expect will really tie all these pieces together more effectively and give a more cohesive experience to the prospect and the customer as they review our offerings and see how they all fit together and I think that's kind of a another nice element as that comes together also we will gain some good attraction. Mark Marcon – Robert W. Baird: So what specifically would be – are you doing? I know about the pricing changes, service level changes that you made earlier this year which would be reflective in some of the reactions to that would be reflective in the WSC growth that we are currently seeing. Are you doing additional changes above and beyond of what we have already discussed?

No, I think the only other thing I mentioned to the deal team that we have now for mid-market customers to be more responsive during the pricing phase of these prospects and so we are able to look at each deal and be more – if we need to be more competitive we can do in – almost some value engineering to see how we can have help the customers to make some changes that will make it more affordable for them and continue to maintain a good margin for us in the long run and so those are kind of things that we are doing to really be responsive with the customer need to maintain their cost structure going forward. Mark Marcon – Robert W. Baird: Is that on – is that for all client segments or just mid market?

We will get into that more as we get in to the larger customers, the mid market customers starting around150 and certainly on occasion, the 150 isn’t just the automatic line in the sand. If we have got 100 and it growing , we are obviously working with them in that manner also. Mark Marcon – Robert W. Baird: Okay. And longer term beyond this year, are there opportunities to further enhance the efficiencies with regards to the operating expenses?

Yes. We definitely think we are –we have worked in an effective plans, aligned operating expenses with our--to track more closely with the unit growth coming. Then also I think there is good opportunity as we come out this year with lower cost structure that growth is coming out of water right behind us and you really get incredible leverage as that comes about. So I mean we are very excited about our 2015 plan as we are sitting here today because we see all that stuff lining up to be a very exciting year in 2015. Mark Marcon – Robert W. Baird: Great. Thank you.

We have no further questions in queue. I would now like to turn the call back to Mr. Sarvadi.

Well, thank you all very much for being with us today. We appreciate your support and we are looking forward to continuing with that game plans going forward and looking forward to speaking with you next quarter. Thank you very much.

This concludes today’s conference call. You may now disconnect.