Q4 2020 CBIZ Inc Earnings Call
Good day and welcome to the <unk> full year, 'twenty and 'twenty results conference call.
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I would now like to turn the conference over to Lori <unk> director of corporate Relations. Please go ahead and good morning, everyone and thank you for joining us for the <unk> fourth quarter and full year, 'twenty and 'twenty results conference call.
In connection with this call today's press release has been posted to the Investor Relations page of our website <unk> Dot com.
This call is being webcast and a low.
Inc to live webcast as well as an archived replay and transcripts can also be found on our website.
Before we begin our presentation, we would like to remind you that during the call management may discuss certain non-GAAP financial measures.
Reconciliations of these measures can be found and the financial tables of today's press release or and the investor presentation on our website.
Today's conference call May also include forward looking statements, including statements regarding our business financial condition results of operations cash flows strategies and prospects.
Forward looking statements represent only estimates and the date at this conference call and are not intended to get any assurance as to actual future results.
Because forward looking statements relate to matters that have not yet occurred. These statements are inherently subject to risks and uncertainties.
Many factors could cause future results to differ materially.
And more detailed description of such factors can be found in our filings with the Securities and Exchange Commission.
Please note that this assumes no obligation to update forward looking statements.
Joining us from today's call are Jerry Chriscoe, President and Chief Executive Officer, and where growth Chief Financial Officer, I will now turn the call over to Jerry for his opening remarks Jerry.
Thank you Lori and good morning, everyone with.
With the release of our results. This morning, we were pleased to announce growth and total revenue Inc.
<unk> from continuing operations and adjusted EBITDA for both the fourth quarter and full year of 2020.
Throughout the past year.
The fundamental characteristics of our business that I believe and enable us to continue to perform well and both favorable and less favorable business climate.
As I described on our second quarter call.
These characteristics include net approximately 70% of our revenue is generated from our central services.
Including our tax services and insurance services payroll services and host of others that we provide to our clients regardless of economic conditions and the market.
We generally repaid approximately 90% of our clients from year to year.
We have a broad geographic footprint.
We serve a diverse client base in terms of size and industry.
We enjoy strong and consistent cash flow.
And have a substantial amount of variable expenses and our business.
And our ability to grow throughout the challenging business climate that was 2020 is a testament to those characteristics the strength of our business model and the agility and resilience of our team.
As expected and reflected and our results some of our businesses performed better than others and more uncertain and volatile business environment.
Generally the central services described earlier tend to continue to perform well even in more challenging business climate.
While certain more discretionary services are less predictable.
Many of our more discretionary services are and higher demand when our clients are pursuing are making decisions around growth.
Such as acquisitions or significant expansion things.
We saw how much of this play out during 2020.
Within our financial services group, we experienced strong performance from our core tax and accounting business and our litigation support business and.
And continued steady performance from our government health care consulting business.
We also experienced a slowdown and the second and third quarters and demand for certain of our more discretionary project oriented services and.
Such as our valuation business and portions of our private equity advisory practice.
However.
Demand for many of those services began to rebound and the fourth quarter, particularly for those services that are tied to supporting our clients pursuit of acquisition opportunities.
One note on our government healthcare consulting practice and.
And our last call, we discussed how the rate of growth and temporarily slowed during COVID-19 due to restrictions on access to client facilities and.
And delays in receiving client information.
And the fourth quarter, we were pleased to see the rate of growth for that business resumed to more normal levels and.
And we expect demand for the services provided by that business to remain strong throughout 2021.
Turning to our benefits and insurance group.
We had a similar experience to our financial services group with strong performance from the essential services that we provide including our employee benefits business.
The commercial and personal lines portion of our property and casualty business. The advisory services, we provide for our clients on their retirement plans.
And demand for our upmarket more robust payroll platform.
From a consolidated view the solid results that we experienced for those services were somewhat clouded by the softer results from a relatively small portion of our property and casualty business tied to the hospitality and adventure sports.
The decline and the number of payrolls process for some of our smaller clients, particularly those tied to the restaurant industry and.
And a number of other more project oriented service lines.
The encouraging note here is that we expect the portions of that business that were negatively impacted by the soft economic conditions to return to more normal growth levels once the economy improves.
One last note as it relates to our benefits and insurance business and we've made substantial investments over the past several years and hiring training and supporting new producers within this group.
Those investments are central to drive sustained long term organic revenue growth.
And the early report card on those investments is very encouraging and.
And as a group the new producers that we brought into this program are outperforming our projections as.
And as a result, we are continuing to invest and our new producer program and to expand this program to other business lines.
Now looking forward.
We enter and does this year and a position of financial strength with a very strong balance sheet low debt and ready access to capital.
As we demonstrated in 2020, we also have a significant amount of variable expenses and considerable discretionary spending items that we can manage to preserve liquidity if economic conditions are worse than currently anticipated.
While much remains uncertain and we expect client demand for our core central services to remain strong.
And for client interest and many of our more discretionary services to increase as business conditions continue to improve.
Based on our performance in 2020, the financial strength of the business the cost control measures that we have and our command and our current view of the business climate for 2021, we have elected to reinstate guidance for this year.
I want to caution that while were comfortable issuing annual guidance, we do expect more volatility than we ordinarily experience when comparing a given quarter to the same period in the prior year. So we would caution against doing so.
Our decision to reinstate guidance is based on a couple of key assumptions that shape our outlook for 2021.
These assumptions include the first six to nine months of 2021 will be similar to what we experienced from the second half of 2020.
And we expect continued recovery and the M&A market.
Which impacts many of our more project based and private equity services.
We saw improvement in the fourth quarter and expect this trend to continue throughout 2021.
At this point I will turn it over to Ware Grove, our CFO to provide more specific details on our financial performance for the fourth quarter and full year of 2020.
Thank you Jerry and good morning, everyone.
Want to take a few minutes to run through further details and highlights of the numbers. We released this morning.
With total revenue growing by one 6% for the full year and margin on pre tax earnings from continued operations, increasing by 90 basis points. We were pleased to report earnings per share of $1 42 for the full year up 11, 8% over $1 27.
Reported a year ago.
To recap a few important points.
As the impact of the Covid pandemic unfolded, there was considerable risk and uncertainty everywhere.
We took a number of immediate actions to protect our liquidity and we took measures to prudently control expenses with a view toward preserving our ability to serve clients and order that we could emerge as a strong and healthy business ready to resume growth.
We have not been completely immune but with many actions we took coupled with the dedication of our team. We are pleased that our business model has weathered the storm and we are now a stronger company for the experiences and 'twenty 'twenty.
Our primary concern operating under the pandemic environment close to protect our liquidity, perhaps the best measure of our success and 2020 is the continuing nature of our strong positive cash flow.
We ended 2020 with $108 million.
Although outstanding debt on our credit facility and.
Creasing and all a two and a half million dollars from $105 5 million at year end a year ago.
After an active first quarter and 2020 repurchasing one 2 million shares and closing three acquisitions, we've paused both acquisition and share repurchase activity from mid March through mid September until we could develop more confidence with the stability of our cash flow trends.
For the full year of 'twenty, we closed seven acquisitions and utilized $89 $7 million of capital for acquisition activities.
We also deployed $57 $6 million to repurchase approximately two 3 million shares for the full year and.
Including the repurchase of 1 million shares and the fourth quarter.
For the full year with 147 $3 million of capital used for these two purposes, our borrowing increased by only $2 $5 million.
This results and a leverage ratio of approximately <unk> eight times on an adjusted EBITDA of $132 $1 million with $286 million of unused capacity.
Going into 'twenty one.
<unk> is great flexibility to continue to deploy capital for acquisitions and for continuing our share repurchase activity.
Through February 16th to date this year.
We have repurchased an additional 600000 shares and we intend to continue to repurchase shares.
With this recent activity when combined with shares repurchased in 2020, low since resulted and the repurchase of more than 5% of our shares outstanding.
And when you also consider the $1 2 million shares repurchased in the prior year 2019, we have repurchased approximately $4 1 million shares or roughly seven 5% of shares outstanding within the past two years and we've utilized nearly $100 million of capital for these activities.
Considering our strong balance sheet and cash flow attributes, we can repurchase this level of shares without compromising our capacity for acquisitions.
With our seven acquisitions closed in 2020, plus and eighth transaction, we announced effective on January 1st this year collectively these newly acquired operations will generate approximately $48 million with annualized revenue.
Strategically these acquired operations will further strengthen benefits and insurance services.
We will add and an important component to our financial advisory services.
And we will add capacity in order to accelerate the rollout of our integrated payroll services platform that focuses on upmarket clients.
Acquisition related payments for earn outs from previously closed transactions are estimated at $13 $6 million and 2021.
And 'twenty and 'twenty, two we estimate a use of approximately $15 $4 million apiece.
Approximately $9 $1 million, and 2023 $13 million and 2024 and.
And approximately $800000 in 'twenty and 'twenty five.
For 'twenty and 'twenty capital spending for the full year was $11 7 million of which $2 $2 million within the fourth quarter.
We expect capital spending within a range of $12 million to $15 million looking ahead into 2021.
Depreciation and amortization expense for the full year of 'twenty was $23 $1 million.
$9 6 million of depreciation with $13 5 million of amortization.
And the fourth quarter, depreciation and amortization expense was $5 $9 million.
A major concern for us as the pandemic unfolded in 2020 was our clients' ability to pay receivables.
As we transition to remote work conditions at the end of the first quarter and 2020, our team did a great job refining and adopting new processes and digital tools for billing and management of receivables.
These tools are now a more permanent fixture and our workflow processes and and our communication with clients.
Days sales outstanding performance on receivables improved this past year, despite the volatile conditions and financial stress throughout the economy.
At the end of the year day sales outstanding stood at 72 days compared with 75 days a year earlier.
Though not completely immune to the financial stress. This is also good evidence debt with our diverse client base. There is no significant concentration of clients and the more severely impacted areas and the economy, such as hospitality travel restaurant, our entertainment businesses.
At the end of the first quarter and 2020, we recorded an additional $2 million of reserve for bad debt with.
With continuing uncertainty and the economy, although days sales outstanding performance has improved we continue to carry that level of reserves from bad debt.
For the full year of 'twenty bad debt expense was 45 basis points of total revenue compared with 25 basis points and total revenue for 2019.
Total consolidated revenue for the full year was up one 6% with same unit revenue declining slightly by <unk>, 4%.
And the fourth quarter total revenue grew by three 9% and same unit revenue grew by one 1%.
Within financial services total revenue for the full year was up two 1% with.
And the same unit revenue up <unk>, 8%.
And the fourth quarter total revenue and financial services was up six 6% with same unit revenue up three 3%.
Turning to benefits and insurance.
For the year total revenue grew by 0.5% with same unit revenue declining by three 8%.
And in the fourth quarter revenue declined by <unk>, 8% and same unit revenue declined by three 2%.
As I indicated and our third quarter conference call.
<unk> growth numbers were impacted by a relatively small number of our operations, where the nature of advisory or transactional services.
And what's more severely impacted by economic conditions.
For the full year. These businesses represented 16% of our total revenue, but collectively these businesses declined by 12, 8%.
And 2020 compared with the prior year.
Adjusted total revenue to exclude the impact of these businesses remaining core revenue would reflect growth of four 9%.
Rather than the one 6% reported.
Same unit revenue would reflect growth of two 5%.
Rather than the 0.4% decline reported.
Fourth quarter revenue adjusted to exclude these businesses grew by eight 3% versus the reported three 9% and same unit revenue grew by four 7% versus the reported one 1%.
With pre tax income margin, improving by 90 basis points to 10, 7% from nine 8%. The prior year, we saw a favorable impact resulting from the cost control measures, we took and deferring discretionary items.
Plus the favorable impact from the natural reduction and travel entertainment expense and from the lower cost for our self funded health care benefits.
Among other things for 2020.
<unk> costs came in at approximately 30% of the prior year levels and health care costs came in at approximately 85% of expectations as discretionary and elective medical procedures were deferred.
Adjusting the reported operating margin to remove the impact of accounting for gains and losses on assets held and the deferred compensation plan.
Operating income was 11, 2% for the full year up 70 basis points compared with 10, 5% and 2019.
As Jerry outlined we think business conditions and 2021.
We will look very much like the environment, we experienced during the second half of 2020.
Of course, the timing and impact of a successful COVID-19 vaccination rollout is very unclear and there are still risks and uncertainty ahead.
Considering the stability and performance of our core businesses and 2020 together with the impact of recent acquisitions. We think revenue will continue to grow and if similar matter.
As I just described.
We are projecting total revenue growth and 2021 within a range of 5% to 8%.
As a reminder, we do not provide guidance for quarterly results, but as you think about the year ahead bear in mind. The first quarter last year was a relatively strong quarter to four we felt a COVID-19 impact and the second half of March.
With a 5% to 8% revenue growth expectation, we're looking to increase earnings per share within a range of 8% to 12% over the $1 42 recorded for 'twenty and 'twenty.
Consistent with our longer term goals, we can manage and number of discretionary items and we expect to improve margin within a range of 20 to 50 basis points.
You will note the effective tax rate was 24, 3% in 'twenty and 'twenty aside from any change in tax law that may arise from the New administration. There are a number of variables that can impact our tax rate either up or down debt. As we look ahead to 'twenty 'twenty. One we are projecting a 25.
<unk> effective tax rate.
Ongoing share repurchase activity will impact with fully diluted weighted average share count at this time, we are estimated $54 5 million fully diluted shares for the full year down from $55 4 million shares.
And in 'twenty and 'twenty.
As I mentioned, we are continuing to repurchase shares and we will update this estimate at the end of the first quarter and throughout the year.
Adjusted EBITDA for 2020 came in at $132 $1 million or 13, 7% of revenue a nine 6% increase from the prior year.
And we expect to further improve that margin in 'twenty one.
So in conclusion, we were pleased to see stability and client demand and cash flow as we progressed through the year.
We have emerged from the challenge of 2020, as a stronger company with stronger processes.
Going into 'twenty 'twenty, one we think our business will continue to reflect the stability evidenced by the performance this past year.
We recognize the uncertainty and risks ahead, and we will plan to update our expectations as conditions dictate throughout the balance of the year.
So with these comments I will turn it back over to Gerry.
Thank you where.
I'd like to touch and a couple of additional areas before we turn it over for Q&A.
First I would like to talk about our unique position and the market.
And how it allows us to provide solutions to our clients that are unmatched and our industries.
While we have a large number of very capable competitors for many of the services we provide there.
<unk> mono line and lack the ability to provide the holistic multi disciplinary solutions and our clients need when analyzing decisions that relate to their most impactful opportunities were greatest challenges.
We witnessed the strength of our business model throughout 2020, as we move quickly to collaborate across businesses.
Service lines and geographies to bring <unk> resources and expertise to bear and and coordinated services that we're responsive to our clients most pressing needs.
We are encouraged by the value that our holistic multi disciplinary solutions approach brings to our clients and are excited for the opportunities that it presents receivers to further distinguish us from our competitors.
Next relating to M&A.
We welcome to outstanding organizations to our team and the fourth quarter.
The acquisition of beyond paid brings additional implementation capacity to support sales of our upmarket payroll solution and follows and other similar acquisition earlier in 2020.
We also acquired Gordon from an insurance agency within our property and casualty business.
Based in New Jersey Board and permanent as a leading provider of property and casualty insurance with and over 100 year history of serving clients and east coast flow.
Both of these acquisitions provide strategic value, but are also strong cultural fit which is the most important factor when we consider acquisition opportunities.
And as were mentioned overall, we completed seven acquisitions and 2020.
All of which bring expertise capacity talent and a strong client base to our business.
As I mentioned earlier in 2021, we've already completed one acquisition with our core accounting and tax practices with the addition of middle market Advisory Group and Denver, Colorado.
MMA provides tax compliant and consulting services to middle market companies and family groups across a number of attractive industries and complements our rapidly growing Colorado practice.
Acquisitions continue to be and a central component of our growth strategy.
While the M&A market slowed in the second and third quarters of last year.
We are seeing activity resume.
We are finding that our performance throughout the pandemic allows us to tell a compelling story when it comes to potential partners.
And the challenges faced by many of our smaller competitors throughout Covid shined, a light and the value that <unk> can bring to our team members and our clients.
As a result of our scale breadth and depth of services and expertise.
As a result, our pipeline of outstanding acquisition prospects and stronger than it has been and many years and we have access to capital to be aggressive net.
We seek to take advantage of as many of these opportunities as we can with this I will turn the call over for Q&A.
Thank you we will now begin the question and answer session.
And I ask a question you May Press Star then one on your Touchtone phone.
And you're using a speakerphone please pick up your handset before pressing the keys.
So withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Our first question comes from Chris Moore with CJS Securities. Please go ahead.
Hey, good morning, guys.
Good morning, guys good morning.
Just talk a little bit more about the.
Quarterly volatility.
And specifically how it relates to Q1, so the midpoint guide revenue is six 5%.
Does that.
Apply to Q1 is there reason to think.
Given the strong Q1, 'twenty debt that the growth from Q1 might be towards the lower end of the Ranger and any thoughts there.
Yes, Chris It's Jerry Hey, before I kind of comment on the specific question I made note in my opening comments debt that we're really guiding to annual and annual guidance, we really caution against any quarterly comparison.
I think this is going to be far less predictable year any quarter to quarter. I think is going to be very difficult for us to be able to predict with any type of certainty you predicted.
And as we sit here today, particularly as it relates to the first quarter you are right we came out.
Last year, and 2020 with a very very strong quarter.
And we think thats going to be a particularly challenging quarter to compare to.
This year, but again and.
And we'd really like to dissuade you from from comparing quarter to quarter.
We're very comfortable with our annual guidance for quarterly comparisons and Youre going to be a challenge for us.
Got it and that helps I appreciate that.
And I talked about and you guys have and the past day kind.
Some of the expenses debt.
We're lower in fiscal 'twenty versus 21, and at healthcare and travel and I guess, just a couple of things.
Do you expect those levels to still be Kenneth.
Below say and.
Normal to 2019 and were there any.
Covid related expenses, and 20 that may not be repeating and 21.
Yes, Chris this is ware.
With respect to the health care costs.
That's not so controllable.
And we would expect while we got a favorable cost reduction last year, just because of the dynamics of the healthcare industry and the deferral of a lot of treatments our costs were lower.
Planning and expect that those were normalized back to 2019 type levels, Okay with respect to travel and entertainment were still on kind of modify to fork conditions as is the entire economy. So that while we got a pretty dramatic reduction last year.
Just because we're on pretty severe lockdown situation for a period of time that will creep back up but it's still very controllable here and we're expecting that that will create back maybe half of the debt since between 2019 and 2020, but not the entire amount, but we can still manage that.
And those are a couple of the big issues.
And were there any kind of any COVID-19 related expenses that may not necessarily repeat in 'twenty one.
I think the thing to bear in mind, there and not necessarily expenses, but the impact on our business.
In the first quarter.
And I commented on and the impact on our advisory businesses and some of the P&C program business and things like that that were more severely impacted.
And those had a relatively stronger first quarter before they were impacted late in the first quarter and through the balance of the year. So that's why we caution against debt quarterly comparables, but that's where we felt the.
Felt the slowdown and those select businesses.
Got it and I appreciate it I'll jump back in line.
Our next question comes from Andrew Nicholas with William Blair. Please go ahead.
Hi, good morning.
Just wanted to start with a question on client retention.
Just wondering if you could provide any additional color and how it progressed over the force in the fourth quarter.
And then any color on year to date trends are kind of how youre thinking about that.
That through this year.
And Relatedly, how it kind of compares to this time last year.
Yes, Andrew this is Jerry as you know, we generally enjoy very favorable client retention rates and the 90 percentile range across our business lines.
Holistically as a company, we actually when we went back and measure those things, we actually improve those retention rates and many of our service lines not surprisingly many of the clients Werent thinking about.
Changing service providers during that environment. However that was somewhat offset by some of the attrition that we did see and certain of the very <unk>.
Specialized practices, we have like the program business that we have within property and casualty that really serves the hospitality industry and the action sports industry. So.
Within our core services and I would say our high our retention rates actually improved throughout 2020.
But our total and the company retention rates.
Main remained and about that 90 percentile range, just because of some of the offsets.
And.
Look I think we would expect that going into 2021 net the the attrition that we saw and some of the businesses that's kind of behind us.
And the program business for example, and property and casualty and we will continue to enjoy a very strong retention rates and our core services into 2021.
Got it that's helpful.
And maybe as my follow up sticking with that one.
And the thing that you touched on there and your response just the services most directly impacted by the pandemic I think.
And in the prepared remarks, there was a comment about 16% of revenue being down 13% or so and 2020 I'm. Just wondering I think you mentioned some improvement in the fourth quarter, there and to start the year, just wondering kind of what youre thinking about in terms of a growth rate for that same subset.
And our business in 2021, what's embedded in guidance and.
And to the extent debt.
Vaccines take hold and the economy improves.
And theres any upside and that and that area, that's not baked and thanks.
So Andrew again this is Gerry what I would say is that it's hard to take any particular segment of our business in and really predict exactly how that's going to perform in this environment, what I would say is.
As far as the growth rates are concerned when we set our guidance we looked at it at the highest level knowing that.
Things are going to come and different as we then we expect them to come in in any given segment of our business, but we are comfortable.
At the highest level with the guidance that we provided so we would be.
Difficult for us to give you very specific guidance on any particular segment of the business.
Understood. Thank you.
Okay, and if you'd like to ask a question. Please press Star then one on.
Our next question comes from Marc Riddick with Sidoti <unk> Company. Please go ahead.
Yes.
Hey, good morning.
Hey, Mark.
Wanted to get a sense of the.
I appreciate from the commentary.
I appreciate some of the commentary that you've already provided I wanted to touch a little bit on.
And maybe how we should think about the complexity of.
The.
Maybe the Tox work, specifically and how that might compare year over year.
And and what type of opportunities that might provide for you and also I know the last couple of years and tied to the timing and shuttle filings and ill circle sounds like can you talk a little bit about maybe how we should be thinking about.
What.
And the differences are as far as.
And this year versus prior years and start stockpiling activity.
Okay, Hey, Mark I have the tax finally and question. The first part of that question you broke up a little bit can you. Please help us with that again.
You were talking about complex, some complexity and the business I didn't fully understand sure. So we're just talking.
Complexity.
And what the filing that Baxter and we may do so and that's.
Not just and timing, but either you know as far as tax fraud as far as and <unk>.
And can you as far as what may or may not be and some of those types of George.
And additional.
Opportunities PPP opportunities things like that.
I got it thank you Mark.
So let me let me address them in order here as it relates to complexity, we would expect some changes to come out of cash.
And.
And as you know in our business when there are changes.
And that provides an opportunity for us to be in front of our clients and front of prospects talking to them about how those changes impact your business. So any changes and the regulatory environment is generally positive for us and so we would expect some of that it's very difficult to measure as you know.
The Baidu administration is talking about another.
And round of stimulus into the economy. They are talking about infrastructure. So all of that will provide opportunities for us to be talking to our clients about how that may impact them and thats, just nothing but positive.
It's very difficult.
To put a precise forecast on that but.
Generally positive as it relates to the timing.
Timing of tax filings, that's a very good question and one worth noting again another reason why it's difficult to two.
To measure us on a quarter to quarter last year as you know the tax.
And finally deadlines were extended from April 15th of July 15th we can and then rolled right into another.
And busy season.
And after that and the fall.
That's not likely to recur this year.
There is some discussion around moving the tax filing deadline from April 15 to may be may 15th, but it is not likely to push out as far as it did last year and more to come that is still very uncertain and so for now we are planning on and April 15th tax filing deadline and.
You'll see it when we do if that extension gets to or pushed out.
Okay.
For me and I wanted to touch a little bit on your comment on <unk>.
Success from early investments on the on the new producer.
And programs just wanted if you could delve a little bit and to that and maybe what youre seeing that.
And can sheets and competence, there and what we might see and future investments there. Thank you.
Yes, thanks Mark.
As you know historically, if you go back several years.
We were not growing organically at the rates that we had debt we would expect from a number of our businesses and the benefits and insurance side, primarily the reason for that is we have outstanding teams here, we have outstanding producers they do a very good job.
Of.
And production, we just didn't have enough of them right. So every year youre going to youre going to lose if you have 100 million our business you should be expected of the industry.
Kind of benchmark of 10%, so youll lose 10%. So you go from $100 million and $90 million you need to fill that back up so go back up to $100 million, so $10 million of new sales before youre showing growth and that just takes more and more producers. So realizing that that that was a necessary investment. We started along this path of about three years.
So three to five years ago.
And as we would with any significant expense, we had models built and business plans established and we are now going back obviously and measuring against those things and our comments are that we were very pleased that the producers that we're onboarding are actually producing at higher levels and we had expected them to produce.
And the non validated category, which is before they start to kind of cover there theyre draws and most importantly, the validated producers which are the more seasoned producers that tend to produce at a much higher rate. They are they are achieving net.
That debt position faster than we had expected and our model so kind of check check check across the board very pleased with that we decided to make those investments very pleased with how those investments are performing and we're taking much of the lessons that we learned principally within our employee benefits group, great shout out to the team there.
Outstanding job, we're taking many of the lessons that we've learned there and bring them into other lines of business because of the success that we've enjoyed.
And it's very encourage you and thank you very much.
Okay.
This concludes our question and answer session I would like to turn the conference back over to Gerry gross go for any closing remarks.
Alright, Thank you and conclusion I'd like to thank our analysts and investors for joining us on the call today and for your continued support and as always dialogue I also want to recognize and thank our team members, who may be listening to the call today <unk>.
And I've never been as proud of our team as I've done over the past 12 months as I reflect on how we came together as one CBS to support each other our team and our clients.
Throughout that period, our team remained flexible determined and focused on our clients throughout the last year and our performance is a direct reflection of that commitment.
And I'm encouraged by the momentum that we see at the start of 2021 and are excited for the opportunities that lie ahead.
And I look forward to speaking to you after the and.
After our first day. Thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.