Good morning and welcome to the Broadridge Fiscal Third Quarter Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please also note this event is being recorded.I would now like to turn the conference over to Edings Thibault, Head of Investor Relations. Please go ahead..

Thank you, Andrew. Good morning, everyone, and welcome to Broadridge's fiscal third quarter 2020 earnings conference call. Our earnings release and the slides that accompany in this call may be found on the Investor Relations section of broadridge.com.

Joining me on the call this morning are Tim Gokey, our CEO and our CFO Jim Young.Before I turn the call over to Tim, a few standard reminders. We will be making forward-looking statements on today's call regarding Broadridge that involve risks.

A summary of these risks can be found on the second page of the slides and a more complete description on our annual report on Form 10-K. We will also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Broadridge's underlying operating results.

An explanation of these non-GAAP measures and reconciliations to their comparable GAAP measures can be found in the earnings release and presentation.Let me now turn the call over to Tim Gokey.

Tim?.

Thank you, Edings. Before turning to our financial and strategic results, I want to start with this human impact of the COVID virus as it continuous to extend its reach around the world.

With our Broadridge home base and nearly 10,000 associates and family members in the New York metropolitan area, our team is seen up close to toll this virus take on so many. We have lost co-workers, family members, friends and neighbors. And heart go out to all of them and to the many still fighting this disease.

We also see economic dislocation experienced by so many in our communities here and around the world. These are challenging and difficult times.At Broadridge, our focus has been first and foremost on the safety and health of our associates.

We’ve also focused on serving our clients helping them maybe incredible challenges they face as a result of the crisis. And we stepping up to help communities in which we operate around the world. Seeing how our teams are supporting one another, their families and our clients all in the phase of [drenching] change has been inspiring.

I’ve never been more proud to be Broadridge associate. Thank you.With that important backdrop, let me layout where we’ve been? Where we are? And where we are going? Beginning on Slide 5. Despite the challenges in the New York area Broadridge as a global company is resilient, is performing well and has real opportunity ahead.

The COVID crisis is reinforced the essential nature and the importance of what we do. To carry out this mission, we have invested to ensure the health and safety of our associates as they carry out their essential duties. As a result, our operational performance has been exceptionally strong.

That strength led us to continued growth and solid financial results in the third quarter on which Jim will elaborate further.Finally, as we look forward, we see real opportunity in the post COVID world.Let’s move on to Slide 6. These unprecedented times have reaffirmed the essential nature of what Broadridge does.

In these volatile and uncertain times, critical infrastructure powering, investing, governance and communications has never been more important. Throughout the crisis, our scalable and resilient technology platforms have processed remarkable market volumes that are multiples of normal.

Deploying our capital markets and Wealth Management clients enabling end investors to buy and sell securities generate liquidity, continue investments and react to rapidly evolving outlook.This performance will continue to be tested as we navigate uncharted waters and we start in the global economy.

We have also enabled 10s of millions of investors to track their holdings and other key information to period of high uncertainty and volatility.

From distributing billions of dollars of checks to sending and receiving boarding information, to reassuring investors with timely confirmation statements, the floor information has remained open.Finally, now more than ever, strong corporate governance is critical.

As Company’s [indiscernible] grace with unprecedented economic and health challenges, the role of the Board of Directors has never been more important. We are proud of how we have worked to ensure vital communications and voting remained in place.

Our technology and people have ensure that the companies can conduct their annual meetings safely, while enabling continued shareholder engagement.As a result of our central laws securities trading in corporate governance, many of our operations have been deemed essential service providers under guidance provided by the federal government and other government authorities.

We’ve been in contact with the SEC and other regulators, they help them better understand resiliency and challenges faced by our financial system, as trading volumes bite and companies moved to annual meetings online.

11 states to-date have provided temporary relief to enable virtual only annual meetings reinforcing the imports of strong and timely corporate governance. Next slide please.This essential work is possible only through our engaged and highly expert associates.

At Broadridge, the service-profit chain were engaged associates deliver for satisfied clients leading the strong financial outcomes, defines our culture and sits at the heart of our delivery.Thus our thinking from the beginning of the crisis started with health and safety are nearly 13,000 associates around the globe.

We first instituted a work from home policy in Asia as COVID began to spread in January. As the pandemic became more wide spread in March, we moved quickly to institute work from home mandate for all of our non-production associates in Europe and North America. By mid-March we extended that to concluded India.

We are now operating fully on a work from home basis put 87% of associates now involved [indiscernible] production.As work from home is a normal part of our business continuity planning, this is a smooth transition.

We’ve also taken strong measures to ensure the safety of our production associates working closely with our onsite medical teams and third-party experts and in line with CDC guidance, we equipped our associates with masks and gloves closed cafeterias and instituted onsite food delivery.

We removed economic pressure to work by providing extended leave for those who are ill, quarantined or they or family member are in a high risk group.

We mandate temperature checks at beginning of every shift.In New York, which are then most impacted by COVID, we’ve reduced staffing to below 50% to maximize social distancing, we distributing work to other facilities.

These measures have been effective and we will continue to take every action possible to protect our associates in the months ahead.As we protect our own associates, we are acutely aware of the impact this crisis is having on the communities in which we operate.

We’ve already committed $1 million in grants for charities and schools globally in 12 our largest operating regions. These funds were focused on organizations targeting hunger relief for vulnerable populations, critical medical services and equipment, and school equipments for remote learning.

We also want to support the charitable giving of our associates as they generously support their communities. And we’ve allocated an additional $500,000 to double match charitable donations made by associates.Turning to Slide 8, our engaged associates and leading technology platforms have delivered exceptional operating performance.

Our resilient and scalable technology processed huge spikes in both equity and fixed income trading volumes flawlessly, keeping our clients operating when others had challenges.

Our production facilities managed strongly do not only the peak of proxy season but at quarter end and month end statements and a volatility driven surge in other communications relating to trading.In some instances, communications needed to shifted to new location are in time to cover demand.

We are working with clients and regulators, we’ve now successful moved pass the peak of the season. We show very good the serious unprecedented times Broadridge differentiated itself as the right institute solution to these critical functions.At the same time, public companies have rapidly shifted to move their annual meetings to a virtual format.

We pioneered virtual shareholder meetings or VSMs in 2009 and steadily grew them to 326 meetings last year. This year more than 1,500 clients have already contracted with us through VSMs.

Virtual shareholder meeting is different than the webcast or simple zoom type meeting on which we’ve all being sitting the past few weeks.We leverage our unique capabilities to validate shareholders moderate questions and enable voting all in real time.

Our team is mobilized across Broadridge to make their possible dramatically larger scale than ever before, no making it difference to keeping corporate governance on track.Finally, we supported our clients including stepping up to help them with work to either their own facilities or those of suppliers who are unable to handle.

The strongest relationships are created in difficult times and our ability to be there for our clients in this time in need. We strengthened our relationships for many years to come.Moving to Slide 9, our strong operating response resulted in strong financial performance.

Indeed our third quarter results in fiscal year outlook underlined the resilience of our businessmodel and the strength of our value proposition even in context of sharp declines in GDP that already becoming apparent.Despite headwinds from significantly lower event driven revenues and a shift in proxy timing.

Broadridge reported solid third quarter results, with recurring revenue growth of 9% and adjusted EPS growth of 5%. Closed sales rose 20%.Our outlook for the full year calls for continued growth. We expect to -- we continue to expect recurring revenue growth in the 8% to 10% range.

To reflect the full impact of COVID including lower event driven revenues, we’ve modified our adjusted EPS full year growth guidance to 5% to 7%, which Jim will explain in detail.Importantly, we also remain on track to hit our full year guidance for closed sales of $190 million to $230 million.

Our pipeline is strong and the ability to achieve anywhere in that range speaks the importance and value of what we do.I’m also pleased to note, that Broadridge remained on track to deliver at or above the midpoint of our three-year adjusted EPS growth objective of 14% to 18%.

Even with the impact of COVID and cyclical blows for event driven activity. Our goal is to achieve that objective despite those headwinds is a testimate the long-term demand trends driving our business.

The investments we have made to support our growth and hard work of so many on our team.Let me now turn the call over to Jim for more in-depth review of our financial results, guidance and some early thoughts on FY’21.

Jim?.

Thanks, Tim. Like Tim, I’m deeply sadden by the toll that virus has taken on the Broadridge family. We are still grieving but we are resilient and it is impossible not to feel intense pride the way our associates have responded.

They are truly delivering in remarkable ways to all our associates’ thank you and a special thank you to our production teams.And now our results. I’m pleased with our performance in the third quarter and even within the [indiscernible] related to COVID.

It was consistent with outlook we provided in early March, our performance and outlook highlight the resilience of our business. I’ll begin on Slide 10 with 6 call outs. First, the net impact of COVID on our recurring revenue in the third quarter was modest, but there were more notable impacts in individual product lines.

Organic recurring growth was 3% in the third quarter and we expect high single-digit organic growth in Q4 as we benefit from an increase in volatility and the shift of some proxy work from Q3 to Q4.Second, the weak event activity trends we saw in the first half of the year has continued and are now being exacerbated by COVID.

This is a lowest event activity in six years. Third, we’ve recorded a 20% increase in sales in the third quarter and notably higher sales in March because of our strong pipeline of new opportunities.We have confidence that we can deliver on our sales guidance even in this environment. Fourth, our strong balance sheet.

Our investment grade credit rating is $1.5 billion of liquidity give us ample flexibility to fund our operations, repay our maturing notes and support our dividend.There is no substitute for healthy balance sheet in excess to capital. And [it also] give us the comfort and confidence to focus on doing what is right for the business.

Fifth, guidance, factoring our full quarter’s impact of COVID we are reiterating our guidance for recurring revenue growth in trimming our adjusted EPS guidance on the further drop in event activity below what we previously expected.Sixth and final color.

COVID in a year ahead, as this is practice, we will not provide formal guidance on next fiscal year until we report our fourth quarter.

But I think it’s important we provide some perspective on how the business may perform in the recession including a very preliminary view on recurring revenue growth.Let’s turn to Slide 11, in our revenue growth drivers. Our recurring fee revenues rose 9% in the quarter with healthy new sales additions contribution 5 points to growth.

Most implementations have long lead times and are in motions months before go live. Importantly, we did not see much of an impact on-boarding processes in March. It’s clearly something we are keeping an eye on it but pandemic continues to unfold. We saw the biggest COVID impact in internal growth although the net effect was neutral.

The headline here is that exceptional trade growths driven by high volatility related to the crisis was largely offset by the COVID driven shift of certain proxy work from the third quarter to the fourth quarter. These big revenue factors essentially neutralized each other.

I will touch on these again in my review of each business.Acquisitions are performing well and contributed 6 points of growth. We'll start to analyze two of our larger acquisitions next quarter, so the overall impact from acquisitions should decline modestly in the fourth quarter.

Looking to next quarter, we expect organic revenue growth to improve meaningfully the improvement should come from the combination of sustain strong sales to revenue performance and positive internal growth boosted by strong stock record growth and the realization of the known proxy timing shift from Q3 to Q4.Moving down to total revenue, total revenues increased 2% to $1.25 billion as recurring revenue growth was partially offset by a sharp decline event driven and related distribution revenues.

Let's dive deeper in each of our business segments, starting with ICS on Slide 12. Recurring revenues grew 2% a solid net new business and acquisition gains each contributed 3 points. Organic growth dip negative due to COVID, timing and other impacts. The biggest driver of our decline organic growth was a timing shift and proxy.

As you may recall, with the implementation of the new revenue recognition standard last year, Q3 and Q4 mix is very sensitive each day represents about $5 million, so it only takes a couple days of movement to shift meaningful revenue between quarters.

This year COVID related safety measures including staff level reductions and social distancing, moved some of our dates out by a few days.

This shift lowered our third quarter revenues by $15 million to $20 million.Importantly, stock record growth remained very healthy at 7% and with much of the quarterly volume now shipped, we expect high single-digit stock record growth in the fourth quarter as well.

The proxy catch up, coupled with the dramatic pickup in demand for virtual shareholder meetings that Tim described should lead to a notable pickup in our equity proxy revenue line next quarter.Mutual fund and ETF interims revenues benefited from a positive mix shift.

Underlying record growth was zero as the fund industry experienced record outflows in March. Customer communications and fulfillment revenues rose 3%, as the decline in equity markets triggered a wave of portfolio rebalancing, which drove a 24% increase in the volume of prospectuses we sent out.

Customer communications revenues was also at 3%, which was nice to see.Rounding out ICS recurring revenues, continued growth and data analytics revenue was partially offset by lower revenues from securities market value and interest rate sensitive products and a retirement fund trading and custody business, following the big market declines and the Fed’s decision to slash rates.Looking ahead ICS is on track for mid to high single-digit organic revenue growth in the fourth quarter given the combination of a strong proxy season, the pickup from the proxy timing shift, strong demand for virtual shareholder meetings at a modest pickup and post sale volumes is shaping up to be a strong finish to the year.As I noted in my call outs, event driven revenues declined sharply to $39 million.

As you'll see on Slide 13, third quarter event driven revenues were at their lowest level since 2014, reflecting a continuation of the trend we've seen all year and new COVID related delays. As the crisis unfolded, we have seen a couple of notable proxy campaigns pushed into fiscal ‘21 and high profile proxy fights set aside.

So we are now anticipating additional declines and event driven revenues in the fourth quarter. Our significantly reduced full year forecast of $155 million would take us to fiscal ‘13 levels and our weakest Q4 for event revenue since fiscal ‘12.Let's turn to our GTO business on Slide 12, which reported very strong results for the third quarter.

Revenues rose 23% on 11 points of organic growth. The biggest driver was exceptional trading growth 28% in equities and 19% in fixed income. As Tim noted, it is a testament to our technology and our associates that we handled record volumes so flawlessly. As a reminder, about 30% to 40% of the GTO business is volume sensitive to trading activity.

The majority of our contracts are based on trading bands we're not every trade translates into incremental revenue. We also continue to achieve strong net new business additions and pickups from licenses.

The recent acquisitions performed well adding meaningful revenue.Beyond the higher trading volumes, the impact of the COVID crisis on our GTO business was limited. We did see one large license contracts slipped out of the quarter and ultimately closed in April.

More generally, we are keeping a very close eye on our client on-boarding schedules and most plans are on schedule at this time.Looking ahead to the fourth quarter, we expect to see more strong sales to revenue growth and continued higher trading volumes, although below levels in March.

In the fourth quarter, we expect GTO organic revenue growth to be in the high single-digit range and total growth in the high teens.Turning to Slide 15. In this uncertain economic environment, our balance sheet is a source of strength.

At the close of the quarter, our available liquidity was $1.5 billion comprised of $402 million in cash balances, and $1.1 billion remaining on our committed $1.5 billion revolving credit facility.Moreover, our debt maturity profile further enhances our liquidity outlook.

Over 75% of the fixed portion of our debt does not mature for six or more years, our only maturity less than six years is $400 million of senior notes coming due in September of 2020. And we anticipate having ample excess cash and revolver availability to refinance this maturity.

Our revolving credit facility has one financial covenant, a debt leverage ceiling which were well below.An important factor in our capital planning is our credit rating. We’ve remain committed to our strong investment grade credit rating while taking a balanced and disciplined approach to capital allocations.

Given the environment in our recent M&A, we were focused in the near-term and reducing our leverage ratio from about 2.4 times a little elevated with extra cash on the balance sheet to about 2 times by June 30.

As a result is unlikely, we will do any meaningful share repurchases in the fourth quarter.Underpinning our capital planning is our free cash flow. Broadridge generated free cash flow of $82 million for the first nine months of the year.

We continue to expect healthy free cash flow in the fourth quarter where we typically generate most of our free cash flow.Two other call outs. First in our operating cash flow, you can see the impact of the large investment we are making to develop the UBS and industry Wealth Management platform, which is on schedule.

Second, we are keeping a watchful eye on collections which have been very healthy so far in the crisis. We've invested $339 million and tucking M&A fiscal year to-date, which includes our acquisition of funds library that closed at the end of February. Finally, we remain committed to our dividend.

And earlier this week, our Board approved our next dividend payable on July 2.I've made a lot of comments about our outlook in my discussion of our results. So let me sum up there -- here with our full year guidance on Slide 16. We expect total recurring revenue growth in the 8% to 10% range for fiscal ‘20, including organic growth of 3% to 4%.

Our outlook for the fourth quarter implies high single-digit organic growth within an additional 4 to 6 points from acquisitions for total recurring growth of low to mid-teens.Taking into account, event driven revenues of approximately $155 million down from our previous $175 million to $195 million range and a modest decline in distribution revenues, we're guiding to total revenue growth at the low end of 3% to 6%.

We continue to expect our full year adjusted operating income margin to be about 18%.We're expecting adjusted EPS growth of 5% to 7% down from our prior guidance of about 8%. The biggest driver of the decline our EPS guidance is our outlook for event driven revenue.

We've also de-risked our outlook for the excess tax benefit to $12 million from $20 million. Notably the reduction in event and ETB combined represents approximately $0.20 or 4 points of EPS growth.Finally, a comment on sales. Our guidance for closed sales in the range of $190 million to $230 million remained unchanged.

While our sales pipeline is strong, the challenges of remote work in the stressed economic environment make a wide range especially appropriate.

All in all, I would consider this a pretty strong performance if we close out the year with adjusted EPS growth of 5% to 7% in the phase of a $90 million downdraft and event fees and in range sales in this environment.

In this outcome, would mean achieving a 16% or better three-year adjusted EPS compared to our target of 14% to 18%.We all know the economic outlook is uncertain and many of you have asked about the outlook for Broadridge beyond our fiscal fourth quarter was so much unknown, I [indiscernible] leave that I don't owe you a 12-month outlook until August.

That said, we do want to share with you some of our preliminary thinking about how Broadridge may perform, at least from a revenue perspective in a recession.Let's move to Slide 17, our first point of reference is to go back and look at the last downturn in 2008.

We’re stronger company today, it's worth noting how Broadridge performed in the global financial crisis, which began together forced in the beginning of fiscal ‘09.

While the impact varied by business and total Broadridge is able to sustain recurring revenue growth of 5% in the first year of the crisis.In the second year that distinctly financial services focused crisis Broadridge posted modest positive growth despite big client consolidations and lower trading volumes.

By 2011 Broadridge had returned to mid single-digit organic growth. These crises are very different, and we are better positioned today than we were in 2008 with no clearing business, more diverse revenue streams and a much stronger GTO business.I'll turn to my final Slide 18.

There's no easy way to dimension the exact size and shape of the COVID recession. But our initial planning approach has been to assume that we are in a prolonged recession with tough macroeconomic conditions extending through our fiscal ‘21.

We feel is a prudent way to prepare for the year ahead while keeping our eye on a large opportunities ahead of us.And assessing our business in a recession scenario is important to first ground and those aspects of our business that we believe are uniquely resilient. First, our biggest revenue growth driver is the conversion of sales to revenue.

We currently estimate our revenue backlog to be about $330 million, which is equivalent to 11% of our approximate $3 billion in recurring revenue. This gives us a strong starting point to generate revenue growth without any new sales.Second, one of our most important drivers is position growth and our governance business.

And while we expect position growth to be moderate in a recession, we take comfort that aggregate position growth stayed modestly positive even at the low point of the global financial crisis.Third, we have a long track record of 97 plus percent client revenue retention, which should serve us well in a potentially more challenging sales environment.

And fourth, the core of what we do is mutualization across the financial services industry, which historically performs well in tougher times.Customer communications, an example of a historically lower growth business is not cyclical and should perform evenly through a recession with even more opportunities.

But to be sure, there are definitely headwinds that we expect to feel in this COVID recession.

First, because we are beneficiaries of market volatility, we would expect to face some tough comparables and trading and post sale volumes in the second half of next year.Second, lower assets under administration from market declines in interest rates may impact our fees and our mutual fund processing and transfer agency businesses.

We're seeing this now in Q3 and Q4. And third, our clients may not be able to engage in on-boarding activities in the same way, which would have the effect of delaying on-boardings. Frankly, though, we're not seeing this at this point. Clients could also contract for smaller or fewer licenses for certain on-premise software.

[Net/net], our preliminary work indicates recurring fee growth in the low single-digits in a tougher session, which would again demonstrate the resilience of our business.Again, this represents a preliminary view and is based on our current outlook.

We will learn more with the passage of time and more data and we back in August with our Q4 results and latest thinking on fiscal ‘21.Let me wrap up here as I know I've given you a lot to digest. In summary, after a solid third quarter, we expect to close out fiscal ‘20 with very healthy organic recurring revenue growth and strong sales.

Our strong balance sheet and ample liquidity keep us well positioned to navigate a challenging environment. Above all, we have the technology, culture and people to grow and succeed. Now back to Tim..

Thanks, Jim. Broadridge is well positioned to weather any economic downturn and I've directed our team to prepare for an extended period of economic weakness. As always, we will balance the [sun time] competing imperatives of investing for what we believe is a very strong future and delivering bottom line growth in the near-term.

Like others we will use this time to evaluate where we're devoting resources and to concentrate our efforts on those most relevant in the new environment. I'm confident we'll find the right balance, and I look forward to updating you on our next earnings call.I'm convinced that a long-term focus has never been more important.

As we emerge from the crisis, the world will be a different place. As I talked to clients it is clear that the fallout will cause permanent shifts in the way they operate that strengthen the long-term drivers of our growth. We must ensure we'll be ready to help our clients with these challenges.

First and foremost, the existing trends driving our growth around mutualization, digitization and data will only strengthen in this new normal.

A big driver of mutualization has been the need by our clients to reduce the cost and complexity of their operations.Now, if financial services firms comes to grips with slower growth and near zero interest rates, they're need to transform their business with next generation technology will only increase.

Our Wealth Management industry that was already in transition will only face more pressure to evolve. The need for digitized communications will grow.

The challenges faced in the investment management industry have accelerated.And I’ve noted at the outset of my remarks, the importance of strong corporate governance will only increase as investors ensure the Board's apply hard earned lessons about business and financial risk.

But the impact of COVID is going to do more than simply confirm existing trends. It will cause more fundamental changes in client operations.

Every business leader has been forced to think more deeply about resilience of their technology and operations, creating an even greater impetus to adopt the right industry solutions with proven scalability and resilience.Simply put, the cost and risk of going it alone has never been greater.The impact a work from home is accelerating digital literacy and the demand for digitized communications.

Where they're signing up for digital content or using remote learning tools more people are relying more than ever, on digital communications in every facet of their lives.

This is only going to increase the pressure on financial services firms to raise the bar on delivering enhanced digital communications, whether it be a bill, statement, or regulatory disclosure.

All these trends play to Broadridge‘s strength and will fuel our growth over the next decade or more.In a time of uncertainty, business fundamentals are more important than ever. And Broadridge’s fundamentals are strong.

We have a highly resilient business model with recurring revenues under long-term contract built on providing mission critical services for leading institutions.

We have a strong investment grade balance sheet, high liquidity, and a long history of balanced capital allocation, including a dividend that has increased every year since Broadridge, became a public company.And finally, we have a track record of delivering growth backed by 97%, client revenue retention, $330 million sales backlog and favorable long-term trends that have been reinforced by the crisis.

So while the near-term remains understandably uncertain, we are well positioned in the longer term opportunity for Broadridge has never been stronger or more clear.Before I close, I want to speak directly to our associates around the globe listening to this call. To all of you working from home, in our production facilities, thank you.

You've risen to the challenge under more difficult conditions than any of us could have imagined a few months ago. Thanks to you, our financial system has begun to adapt to the biggest economic shock of our lifetime, keeping vital services open to millions around the globe. I'm truly proud to be in your team. And the best is yet to come.Thank you.

And we are now open for questions..

We will now begin the question-and-answer session. [Operator Instructions] please limit yourself to two questions. At this time, we will pause momentarily to assemble our roster. First question comes from David Togut of Evercore ISI. Please go ahead sir..

Thank you. Good morning, Tim and Jim. Hope you are both well and healthy. My question really relates to the early thought process you laid out, Jim on fiscal ‘21.

Really with three specific points of clarification, first, on position growth, are you assuming position growth falls from high single to low single-digit in fiscal ‘21? The second is on event driven revenue.

Are you assuming a further decline in event driven for 2021, if so, how much? And then third, how are you thinking about managing expenses, to the extent of revenue picture for 2021, is challenged as you’ve laid out?.

Yes. Thanks, David. Yes, in the position growth scenarios and look, again, very preliminary and we'll come back in August with all of our details. But in the scenarios we laid out, yes, we're seeing -- we would assume that position growth goes from high single-digits to low single-digits, and even flat in -- as we saw in the global financial crisis.

So that's embedded in some of our thinking for those scenarios. On event, obviously, it's not in that recurring revenue. We haven't called it out probably just too early, but obviously, we are staring at remarkable lows of $155 million, which takes us back seven, eight years.

And we are -- so I think, all in all, that's a good base to start-off just given -- no one can call bottom but, clearly a good base to build-off, but we'll come back in August with our thoughts on event recognizing that's always the toughest line item, to get..

And then --.

And then on -- Yes..

Yes. I don't know, Jim, you want you continue on the expense side, if you want me to grab that. Okay, we're not in the same room. So we're doing this over a WebEx. So you can imagine the hand waving that's going on. So the important thing as we go into next year is that we positioned ourselves for the future.

And we think, as I said earlier, that there are real opportunities they are going to be coming out of this. And so we will definitely be investing in ‘21. At the same time, given our scenarios around revenue growth, we need to match our expense growth as well. And so we'll be looking very carefully at all of our expenses.

And as you heard me say, we'll be looking at all the areas of investment we have to make sure that we're really focused on the ones that have the biggest impact in this in this new environment..

Understood, stay safe..

Thank you..

The next question comes from Chris Donat of Piper Sandler. Please go ahead..

Hi, good morning. It's good to hear your voices.

I wanted to ask kind of a follow up on the event driven just to think about the -- I don't know if cycles was always the right word to talk about it, but it's – there’s anything fundamentally changed on event driven either from the corporate proxy side or for mutual funds that would you think might alter things and I know there's other puts and takes around contested proxies and things like that, but just the big picture on the mutual fund activity?.

Yes, absolutely. It is [indiscernible] event driven revenues are core to our business. They can be quite volatile. They're attractive high margin business, and they grow over time in line with stock record growth. And what we're seeing right now is cyclical.

We are not seeing any changes to the underlying structure for different reasons, both mutual fund proxy and equity contests are cyclical lows, typically, in these periods of high stress fund companies do what they can to put off these events. So we wouldn't expect to see that anything comeback really on the mutual fund side in a significant way.

On the equity contest side, we've clearly seen a pullback and activism during the -- this part of the crisis, what lots of people are saying is that, that will be back in the future. So we'll have to see how that goes.

I think the good news is that we're delivering 5% to 7% adjusted EPS growth in the face of this $90 million pullback in event this year, and we won't face that grow over next year. So I think with those points, we feel good about the contribution event we'll make in the future..

Okay, that's helpful. And then as we think about, Tim, you alluded to some of the conversations you're starting to have with potential new business opportunities.

Can you give us any more color on that one or is it just too soon to know where you might have new business opportunities with existing clients or are you getting some inbound phone calls from potential new clients? I got to believe that you’ve-- there are a lot of banks and brokerage firms in the world that figured out that their technology was not everything it should be in March and April..

Yes, I think as you said these long-term conversations, it is definitely true that many firms experience challenges. I think that the trend toward mutualization will accelerate as in-house platforms make even less sense. And firm's ability to invest in those things versus other priorities that are more customer facing will be even lower.

So we do see significant long-term opportunity. Those discussions typically do take a while. And then in terms of the other opportunities we're seeing, we're certainly expect that what we're seeing with virtual shareholder meetings, there will be some -- obviously, there are states that that did give a temporary, temporary reprieve.

So those will go the other way. But I think people are going to see the success of this season, and how well those are going and getting very good feedback on them. And that will continue that trend. And obviously, as I said in my remarks, we believe that the trend towards digital communication continues to represent a real opportunity..

Okay. Thanks very much. Stay safe guys..

Thank you..

Thanks. Your next question comes from Darrin Peller of Wolfe Research. Please go ahead..

Nice guys. Glad to hear you. Are you doing okay? Look, I mean, I think it's really something and it's impressive to see the March, close sales growth rate still strong per your comments.

I guess I'd really just be curious to hear where you're adding business in this kind of environment, like what kind of calls you're getting inbound for what specific businesses, I mean, the resilience of your business is clearly showing through versus a lot of other companies that are coverage in the market overall.

But, what can you actually add? What's the highest demand right now, if we just start there?.

Yes. First of all, we just talked about March. It was interesting because we didn't have any sales that were above a $1.5 million in March. We had a lot of different solutions. And as you know, we have a pretty wide solutions set there and so, it was gratifying to see such a nice increase across a broad array of products.

And as we look forward we think about the sales that will happen in the next six months or so those are based on conversations that are already taking place.

And there's a nice balance of conversations across both the communication side of the business and the technology side of the business with some, we think some pretty exciting solutions that we are in discussions with clients.

As we look at the period, beyond that, then we're getting into -- things will take longer, but it's interesting, one of the things we monitor very closely is our pipeline, our pipeline information of new opportunities and that is holding it very nicely.

So what we're seeing is, not just at least March not just the continuation of sales, but also the continuation of the pipeline building..

Okay.

And in terms of your capability to implement deals in the -- in a more remote working environment, obviously hopefully this doesn't last forever, but can you just comment on your capabilities in that to actually execute on contracts and new business? And then maybe just a quick touching upon the [BRCC] area growth in the quarter? Was there anything update on the post sale prospectus dynamic or just any more color you can give on that? That growth profile having looks like an [indiscernible].

Thanks, guys..

Yes, okay. So just both good topics so, on implementations, this is certainly something that we are watching very carefully. We have been really impressed with how smoothly the transition to work from home has gone. And, it's going reasonably well for our clients as well.

And so we are seeing -- we're not seeing a drop-off in productivity relative to our on-boarding projects. And so, it is something that we are going to watch very carefully and that we have in our scenarios. We looked at different scenarios for that.

But we are not seeing any change or pushback in our major projects to-date.On the BRCC side -- we did and there's a couple pieces there Dan, there's -- that in that communications and fulfillment line, there's the post sale piece in those BRCC proper which is the transactional print piece.

The post sale dynamics, very, very high volumes, this quarter relative to all of the trading activity in that more than made up for if you recall, we were planning a bit of a downtick there based on some changes and how people are handling managed accounts.

But that was more than made up for by the volatility.And then on the BRCC side, as I mentioned at the last call, the offloading of major compliance is complete. And so we did see modest growth in Q3 from higher transaction volumes as the second quarter of stabilization and slight growth.

For the year we're expecting BRCC to contribute to earnings but not to revenue growth.And we continue to have discussions with large clients about outsourcing their in-house transactional communications, and that's a part of that long-term hypothesis.

And we are continuing progress on digital with more than 100 bond fund complexes on a digital platform and we expect further growth as they begin to take advantage of new capabilities. So we're feeling especially in this uncertain environment as a very stable business and we're feeling very solid about it..

Okay, that's good to hear. All right, stay safe guys and thank you..

Thank you..

Your next question comes from Puneet Jain of JP Morgan. Please go ahead..

Hi, thanks for taking my question. I like to know you all are safe. So, Tim, you have been quite acquisitive recently.

Should we expect like a pause there in M&A activity given everything that's going on related to COVID and market?.

Yes, Puneet. Great question, and we did make a lot of investments in fiscal ‘20. And we really like what we got and is making a nice impact on our business, particularly on the wealth management side. And that has left us with a little bit elevated leverage because we like being investment grade, we like to 2.0.

And we're going to work that down here over this next quarter's, we have very strong cash flow. As we look forward, we want to put ourselves in a position of being very flexible going forward. And so let me just say ask Jim to, to comment further and give us any additional color on that..

Tim got it right, I think near-term goal is to end the year, much closer to our two times number, which I think keeps us in really good shape and a lot of flexibility for all of the capital allocation priorities we have, and I think it'll leave us in a really good position to be opportunistic down the road, but we'll be making sure that we are ready and nimble and healthy..

And then how does the economics of virtual shareholder meetings like meaningful projects give us a sense of like the scale like the magnitude of potential impact, you might get there from [indiscernible] shareholder meetings virtually?.

Yes, Puneet a great question. These are not major events in and of themselves you know, think of a ticket price of anywhere from $10,000 to $15,000 per meeting. And so by themselves, they -- they're nice is not going to materially move the ICS line.

What it does do though is it really cements our relationship with those companies with the Corporate Secretary, the Assistant Corporate Secretary, and it leads over time to us being able to help them in other ways.

And our vision as you know is to provide a very holistic approach to the annual meeting where we're doing a number of the services in and around the annual meeting. And so, we have been doing the proxy piece.

But as we go out to the other services in and around that we think we can make it much more convenient and much deeper relationships with our corporate issuer clients..

Got it and who would you compete in that business for virtual shareholders meetings?.

Well, for virtual shareholder meetings, it is that -- it's not just doing a WebEx or a webcast, it is -- there is real capabilities required to validate shareholders and to provide voting in real time the transfer agents have created a competing offer basically and we provide information to them to allow them to do that.

The -- their offers are much more nascent than others. We've been doing it for a long time, and, frankly do our bit more clunky. So, we do have a strong advantage in this. And it's something that we – we think we can do really well for people..

Got it, thank you..

The next question comes from Patrick O'Shaughnessy of Raymond James. Please go ahead..

Hey, good morning, maybe to follow up on your earlier commentary on development.

Any update on your UBS build out, I think it sounds like that CapEx spend is still taking place as expected, but any changes in the development timeline or the go live timeline with that one?.

Yes, thank you for that question. It is -- that really remains very much on track. We are -- we've continued to be very excited about the overall opportunity in Wealth Management and with UBS. And as you saw, we appointed Mike Alexander to lead our Wealth Management business. So that is a key step there.

We are investing significantly in that engagement for UBS and for the platform to really create what we think is the platform, the future that will be very attractive for others in the industry, and that project remains on track.

And it's one of those examples of some large project and we could have seen a change but we're working very effectively in the remote environment.And then just stepping back from UBS talk more broadly about wealth, we feel really good about that.

Overall opportunity, when you look at the M&A we've done over the past year, there's a fair bit of it that was in and around Wealth Management. And that has led to a lot of good discussions across the spectrum and Wealth Management space.

We are having a number of discussions with large wealth managers, nothing imminent, but there are real pain points we can solve around helping people move to more open architecture platform in the future..

Great, appreciate that. And then just a quick clarification question. You've mentioned a couple of times the $330 million sales backlog.

Is the number at the end of March or are you referring to the number that you guys previously discussed as of the end of fiscal 2019?.

Yes, Patrick, this is Jim. The -- it's one of the same, we will do a final true up year-end, but we are -- our estimate right now is that it's somewhat similar, which means we've added $120 plus million in sales this year, and we've on-boarded somewhat similar amounts. So you're back to a similar place.

Obviously, if we have the strong Q4 that we're planning that we would be adding to that in the fourth quarter and again, we'll come back and through this all up and August..

Great. Appreciate it. Thank you..

This concludes our question and answer session, I would like to turn the conference back over to Tim Gokey for any closing remarks..

Good. I was going to -- I do want to summarize here, I just want to mention, I want to just expand on one answer that we talked about previously was just -- we got into a discussion about capital allocation.

And I did just want to mention, we just paid our dividend and that is something that we continue to think is important going forward.So we remain committed to our dividend and that was something I just think it's important in the context of the call for that to be out there. So with that, I want to thank you for joining today.

These are unprecedented times and because of what we do and because of how we're doing it Broadridge is resilient and performing strongly. We expect, as Jim said, a strong fourth quarter. And while there is uncertainty around ‘21, we are positioned well, and we see real opportunity as the world evolves to a new normal.

So thank you very much for joining today. And we appreciate the support. Thank you..

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect..