Insperity, Inc. (NYSE:NSP) Q3 2019 Earnings Conference Call - Final Transcript
Nov 04, 2019 • 09:00 am ET
Good morning. My name is Marcella, and I will be your conference operator today. I would like to welcome everyone to the Insperity Third Quarter 2019 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [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, 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.
Douglas S. Sharp
We appreciate you joining us this morning. Let me begin by outlining our plan for this morning's call. First, Paul is going to discuss our third quarter results and how we are positioned for growth as we head into 2020. I will then discuss further details behind Q3 results and in particular focus on our healthcare costs. I will also provide our updated full year 2019 guidance and provide high level comments on our gross profit outlook for 2020. We will then end the call with a question-and-answer session.
Before we begin, I would like to remind you that Mr. Sarvadi or myself may make forward-looking statements during today's call which are subject to risks, uncertainties and assumptions. In addition, some of our discussion may include non-GAAP financial measures. For a more detailed discussion of the risks and uncertainties that could cause actual results to differ materially from any forward-looking statements and reconciliations of non-GAAP financial measures, please see the Company's public filings, including the Form 8-K filed today, which are available on our website.
Now at this time, I'd like to turn the call over to Paul.
Paul J. Sarvadi
Thanks, Doug, and thank you, all, for joining us.
Our reported results today include a year-to-date increase in revenues, up 13%, net income up 18% and EPS up 21% over 2018. These numbers would be considered solid for most companies. However, they're not commensurate with our outstanding performance over the last five years. These results include third quarter performance below our expectations, driven primarily by a second consecutive quarter with elevated large claims in our medical plan and, to a small degree, by lower growth than expected in paid worksite employees. Doug and I will explain exactly what happened and what this means to our going-forward plan.
The bottom line conclusion from our analysis of the drivers of our recent results indicate our growth plan remains solid and we expect to maintain our industry-leading double digit unit growth into 2020. And, we believe we do not have a systemic issue in our medical plan that would compound into next year.
I'll begin with a discussion of our growth drivers and how we arrive at our expectations going forward. I'll also highlight results from a recent client survey in the traction we're gaining on our traditional employment solutions bundle Workforce Acceleration. Doug will follow with comments about the