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Virtus Investment Partners Inc (NASDAQ:VRTS)
Q3 2019 Earnings Call
Oct 25, 2019, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning. My name is Kevin, and I will be your conference operator today. I would like to welcome everyone to Virtus Investment Partners Quarterly Conference Call. The slide presentation for this call is available in the Investor Relations section of the Virtus website, www.virtus.com. [Operator Instructions]

I would now turn the conference over to your host, Sean Rourke.

Sean Rourke -- Investor Relations

Thank you, and good morning, everyone. On behalf of Virtus Investment Partners, I would like to welcome you to the discussion of our operating and financial results for the third quarter of 2019. Our speakers today are George Aylward, President and CEO of Virtus; and Mike Angerthal, Chief Financial Officer.

Following their prepared remarks, we will have a Q&A period. Before we begin, I direct your attention to the important disclosures on Page two of the slide presentation that accompanies this webcast. Certain matters discussed on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and as such, are subject to known and unknown risks and uncertainties, including, but not limited to, those factors set forth in today's earnings release and discussed in our SEC filings. These risks and uncertainties may cause actual results to differ materially from those discussed in the statements.

In addition to results presented on a GAAP basis, we use certain non-GAAP measures to evaluate the financial results. Our non-GAAP financial measures are not substitutes for GAAP financial results and should be read in conjunction with GAAP results. Reconciliations of these non-GAAP financial measures to the applicable GAAP measures are included in today's earnings release, which is available on our website.

Now I would like to turn the call over to our George. George?

George R. Aylward -- President and Chief Executive Officer

Thank you, Sean. Good morning, everyone. We are pleased with our third quarter financial results and operating performance, which were characterized by our highest level of earnings per share as adjusted, an increase in our operating margin, meaningful growth in revenue, continued excellent investment performance and consistent stock repurchases and debt reduction. And while overall net flows were negative, primarily due to an institutional redemption each of our other products delivered improved net flows on a sequential basis, with positive net flows from -- retail separate accounts in ETFs, in open-end funds improving to their best net flow results in a year.

Regarding the net outflows, as I indicated they were largely in institutional primarily due to a $0.9 billion redemption by a single client predominantly invested in bank loans. As we said previously, institutional is an uneven business, but we like the momentum we see building and continue to invest in growing the business.

So let me turn to our results for the quarter. Long-term assets under management of $102.8 billion, were down modest as market appreciation was offset by net outflows. Total assets, which include liquidity strategies ended the period at $104.1 billion. Total sales of $4.8 billion decreased 7% from the second quarter, which included a large institutional sub-advisory mandate, excluding that win in the prior period, sales were up 13%, due to higher sales of retail separate accounts and open-end funds, which included the model wins and reallocations we mentioned on the second quarter call.

Net outflows of $1.1 billion compared with modestly positive flows in the prior quarter. Other than institutional, each of our product areas generated a sequential improvement in net flows with significant improvement in funds and positive net flows in retail separate accounts in ETFs.

Looking at each product, retail separate accounts have positive net flows of $0.4 billion due to organic growth in both intermediary sold and private client. Kayne's mid strategies continue to be key contributors to net flows in the intermediary sold channel, which is now generated 15 consecutive quarters of positive net flows. ETFs had positive net flows for the third consecutive quarter. Open-end net outflows were modestly negative, but as I noted, improved significantly from the prior quarter. Outflows in funds were primarily due to bank loan strategies.

Institutional net flows were negative $1.4 billion, compared with net -- inflows of $0.5 billion in the prior quarter, due to the large client redemption. In terms of what we're seeing so far in October, the trend in mutual fund net flows is generally consistent with the third quarter, with positive equity net flows more than offset by a bank loan outflows. For institutional, we're pleased with the pipeline, I've seen some smaller wins across our affiliates and there is nothing new to report since last quarter in terms of notification of meaningful redemptions. Regarding other product initiatives, we are in the process of warehousing, a new CLO for early 2020 issuance. We've also recently launched a new fund important gains International SMID Strategy.

Moving to the financial results. Operating income as adjusted in the related margin were $47.7 million and 38%, up from $43.7 million and 36% in the prior quarter, due to strong revenue growth, lower other operating expenses, and the inherent leverage ability of the business. Earnings per share as adjusted of $0.03 were up a 11% from the second quarter with the increase due to higher revenues as adjusted and lower other operating expenses as adjusted compared to the prior quarter, which included the annual equity grants to the Board of Directors. Compared to the prior year period third-quarter earnings per share as adjusted increased 3%.

Turning to the capital on the balance sheet, we continue to maintain a balanced approach to capital management across the priorities of investing in the business, returning capital to shareholders and managing our leverage. During the quarter, we raised our quarterly common dividend by 22%, the second consecutive annual increase. We purchased our net settled approximately 72,000 common shares or about 1% of shares outstanding and continue paying down debt on our term loan, ending the quarter with net debt-to-Bank EBITDA of 0.5x.

With that, I'll turn the call over to Mike to provide more detail on the results. Mike?

Michael A. Angerthal -- Executive Vice President and Chief Financial Officer

Thank you, George. Good morning, everyone. Starting with our results on Slide 7, assets under management. At September 30th, long-term assets were $102.8 billion down modestly from $103.3 billion at June 30th. The sequential decline reflected $1 billion of market appreciation, that was more than offset by net outflows, primarily in institutional accounts. The total assets were relatively flat with the prior quarter. Domestic mid-cap strategies demonstrated solid growth $0.7 billion or 7% during the period, partially offsetting the impact of continued negative sentiment in leveraged finance strategies, which declined $1.2 billion or 9%.

Domestic mid-cap AUM increased 29% over the past year. And now represents 20% of domestic equity AUM, up from 16% at September 30, 2018. Despite several funds being soft closed, domestic small cap assets have grown modestly due to strong investment performance. Our asset mix by product type remains diversified and essentially stable with the prior quarter.

Turning to Slide 8, asset flows. Net outflows of $1.1 billion in the third quarter were due almost entirely to the loss of one institutional client compared with modestly positive inflows in the second quarter. Open-end fund flows were negative due to bank loans, but improved meaningfully $0.2 billion from $0.7 billion in the second quarter, due to an increase in emerging market flows. Retail separate accounts and ETFs continued to generate positive flows.

Total sales were $4.8 billion, a sequential decline of 7%. Our stronger open-end funds and retail separate account sales were more than offset by a decline in institutional. Fund sales of $3 billion increased $0.5 billion or 19% due to higher sales of emerging markets and domestic mid-cap funds, primarily due to model flows. Retail separate account sales of $0.8 billion were up 12% sequentially with growth in both the private client and intermediary sold channels. Institutional sales declined by $0.9 billion from the second quarter, which included a $0.9 billion global real estate sub-advisory mandate.

Looking at mutual fund flows by asset class, equity funds had positive net flows of $0.3 billion, an improvement from $1.1 billion in the prior quarter. Domestic equity net flows are modestly positive. Similar to last quarter, strong net flows from mid-cap strategies were partially offset by net outflows in both small and large cap. Mid-cap funds which we offer in growth, value and core strategies, generated $0.3 billion in positive flows in the quarter, reflecting an annualized organic growth rate of 30%. This continues a strong trend for our mid-cap products.

International equity funds had positive net flows of $0.3 billion in the quarter, a meaningful improvement from breakeven net flows in the prior quarter. Inflows into emerging market equities, which included a model reallocation drove the improvement though developed markets also generated positive flows. For Fixed income funds bank loan strategies with the primary driver of net outflows of $0.5 billion for the quarter.

Our managers continue to deliver strong relative investment performance across our strategies. As of September 30th, 25 of our 54 rated retail mutual funds, representing 81% of retail rated fund assets at four or five stars, and 94% of rated retail fund AUM, were in three, four or five star funds. Each of our five largest mutual funds is a five or four star fund, representing a diverse set of strategies from the five different managers. In addition to this very strong fund performance 93% of institutional assets are beating their benchmark on a five-year basis, as of September 30 and 86% of assets were exceeding the median performance of their peer group on the same five-year basis.

Turning to Slide 9. Investment management fees as adjusted of $122.1 million, increased $5.6 million or 5% sequentially, due to a 2% increase in long-term average assets under management, and a higher average fee rate. Fees for the quarter include $1.2 million in performance related fees on institutional accounts compared with negligible amounts in the prior quarter. On average, we have generated approximately $2 million in performance related fees annually. The average fee rate on long-term assets for the quarter increased to 46.6 basis points, up 0.6 basis points from 46 in the prior quarter, continuing the trend we have seen of late. With respect to open-end funds, the fee rate increased to 56.3 basis points from 55.4 basis points in the second quarter, reflecting the impact of favorable equity returns on the level of equity assets and the ongoing positive fee rate differential between sales and redemptions. This quarter the blended fee rate on mutual fund sales was 58 basis points, while the rate on redemptions was 52 basis points.

Slide 10, shows the five quarter trend in employment expenses. Total employment expenses as adjusted of $60.1 million increased 5% sequentially from the second quarter. The increase largely reflects higher profit-based incentive compensation in the third quarter. Employment expenses represented 47.2% of revenues, essentially flat sequentially, and down 1.8 points from the prior year given revenue growth primarily attributable to market appreciation. For modeling purposes, we believe this level is an appropriate expectation for the fourth quarter.

The trend in other operating expenses as adjusted reflects the timing of product distribution and operational activities. Other operating expenses as adjusted were $18.1 million, a decrease of $0.9 million or 5% on the prior quarter. The decrease was primarily due to the $0.8 million annual equity grants to the Board of Directors in last quarter.

Slide 12 illustrates the trend in earnings. Operating income as adjusted of $47.7 million increased $4 million or 9% sequentially, primarily due to higher revenues as adjusted, as well as lower other operating expenses as adjusted compared with the second quarter, which included the annual Board grant. The operating margin as adjusted for the quarter was 37.5%, an increase of 140 basis point sequentially and unchanged from the prior year period. Adjusting for performance fees in both periods, the margin increased by 120 basis points, the 36.9%. Net income as adjusted of $4.03 per diluted share increased $0.40 or 11% sequentially.

Interest and dividend income as adjusted, which includes income generated on seed and CLO investments was $3.5 million or $0.31 per share. A decrease from $3.8 million or $0.34 per share in last quarter, due to lower CLO interest income. I would note that our investment in the CLO we issued early in 2019 will pay its first dividend in the fourth quarter. And I would remind you that there will be variability from quarter-to-quarter in interest and dividend income, based on market values and timing of distributions.

The effective tax rate as adjusted for the quarter was 27% stable with the prior quarter, at a reasonable run rate for modeling purposes. Regarding GAAP results, third quarter net income per share was $2.95 compared with $3.26 in the second quarter. Third quarter net of tax GAAP earnings per share included the following items. $0.67 of net unrealized losses on investments, $0.59 of amortization of intangible assets, $0.17 of other costs including acquisition, integration, restructuring and severance, and a $0.04 benefit from net realized gains on investments.

Slide 13 shows the trend of our capital position and related liquidity metrics. Working capital at September 30 of $158 million increased $9 million or 6% sequentially, primarily reflecting operating earnings, partially offset by debt repayments and return of capital to shareholders. Gross debt outstanding at September 30 was $301 million, as we repaid $15 million of debt. The net debt-to-EBITDA ratio of 0.5 times at September 30 was down from 0.7 times at June 30th and from 0.9 times a year ago, due to continued cash generation and consistent debt pay down.

Gross debt-to-EBITDA was 1.5 times at the end of the quarter, down from 1.7 times in the prior year. Regarding return of capital to shareholders, we raised our quarterly common dividend by 22% to $0.67 per share. We repurchased $7.5 million or 70,949 shares of common stock, which represented approximately 1% at the beginning of quarter total outstanding common shares. Over the past year, we have repurchased 446,767 shares representing 6% of September 30, 2018, common shares outstanding. And on a net basis, shares outstanding have declined 4% over the past year. On February 1, 2020, our mandatorily convertible preferred shares will convert to common. While the conversion will not impact the shares used to calculate EPS as adjusted, it will increase the market float of our common shares by approximately $1 million or 15% depending on the conversion price. The conversion will also have the effect of increasing our annual free available cash flow by $5 million to $6 million.

Finally as a reminder, we have intangible assets that will continue to provide a cash tax benefit of approximately $10 million per year at current tax rates over the next 14 years.

With that, let me turn the call back over to George. George?

George R. Aylward -- President and Chief Executive Officer

Thanks, Mike. So, we'll now take your questions. Kevin, can you open up the lines, please.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from Jeremy Campbell with Barclays.

Jeremy Campbell -- Barclays -- Analyst

Hey, thanks. Just a question about the open-end funds. I mean you guys still have nearly like $5 billion in leverage finance funds of the open-end area. Obviously, it remains out of favor, I think you guys called it out as a key driver of your drag on your flow profile on the open-end class. So, I just hoping you could help us with the year-to-date cadence of outflows in that bucket in the bank loans. As it kind of slowed. Is it accelerating? Anything that might help us, think through, how much of a drag, this asset class will be on the flow profile going forward would be helpful?

George R. Aylward -- President and Chief Executive Officer

Yeah, in generally in that asset class bank loans are either -- they vary greatly with expectations on interest rates and whether they're increasing or decreasing. So with the expectations that interest rates will not be going up that sector -- that asset class has been out of favor, since pretty much of fourth quarter of last year, maybe a little before that. But in terms of the cadence, I would say generally flat in terms of the level on the open-end fund side and again I think ultimately, they'll be inclusion by the market of sort of how it feels about that asset class because they still generate very good returns and they fit well into a diversified portfolio.

Jeremy Campbell -- Barclays -- Analyst

Got it. And then, I guess just one on the capital side, as a follow-up. I mean you guys have successfully de-levered here. You have dry powder and a flexible balance sheet at this point. And I'm just kind of wondering what the M&A landscape looks like right now? And whether, yeah, there might be something accretive out there, there might be more public share friendly than using capital to repurchase your stock when it already has kind of a pretty limited float point.

George R. Aylward -- President and Chief Executive Officer

Yeah, no, it's a good question. I mean we continue to evaluate all sorts of opportunities. The activity in the M&A market there is -- activity going on. I think our model lends itself in many ways to that type of activity, while though we've always said, our long-term growth strategy is not contingent upon M&A. So to the extent that we identify opportunities that we think are the highest and best use of capital absolutely, do consider those. We're very disciplined about how we approach it. So we haven't announced anything since the SG&A transaction. But continue to look at that as one of the many opportunities we have, because as you point out we're generating consistent, strong cash flows, we're at a lower leverage, we're below one turn, we're at half turn of net debt in terms of that. And simultaneously, we've been consistently -- we buying back our shares, even though as you correctly point out the float is not optimal. It will improve in February of 2020, which we look forward to. But we certainly do consider any of those alternatives that could be accretive and helpful in terms of the return to shareholders.

Jeremy Campbell -- Barclays -- Analyst

All right. Thanks a lot guys.

George R. Aylward -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from Michael Carrier with Bank of America.

Michael Carrier -- BofA Merrill Lynch -- Analyst

Hi, good morning and thanks for taking the questions. Maybe first one, just on the -- I guess from a product or flow outlook. I mean it seems like the closed-end fund market has gotten a bit more active. So just more curious, you know just given that you have some presence in that part of the market. If you are seeing more dialog for some potential product launches?

George R. Aylward -- President and Chief Executive Officer

Yeah, no, we like the product line of closed-end funds, and as you point out, we have multiple closed-end funds managed with several of our affiliates. And there was a prolonged period where that product structure was sort of out of favor we're very happy to see the increased activities. We look very closely at all of the issuances. We have several strategies that clearly lend themselves to that structure. So we do view that once again as a great opportunity and certainly we'll evaluate if there is an appropriate structure for us to introduce where we follow closely the evolution of what the structuring is on the newer term, trust, types of structures etc. And again we feel between several of our affiliates, we have a strategies that would be attractive, and we maintain a very active dialog with the issuers and underwriters of those products.

Michael Carrier -- BofA Merrill Lynch -- Analyst

Okay. That's helpful. And then just as a follow-up. On the fee rate side, you guys have done a good job in sort of maintaining or even increasing just given some of the products that you offering, where you're seeing the demand for inflows versus outflows. Recently you've had some of the distribution platforms, change some of the pricing dynamics most recently with one of the platforms looking at SMAs and changing that pricing dynamic. So just more curious in terms of how your products are lining up, what you're seeing from the distribution platforms, anything changing meaningfully and how you think your products stack up on the platforms?

George R. Aylward -- President and Chief Executive Officer

Sure. So some background, so we have actually had a trend period of an increasing average fee rate rather than a decreasing fee rate, which is much more common in the industry and really what drives that is our view is being driven a lot by just consistently strong performance. And particularly in areas that are more capacity constrained and less susceptible to competition from passive types of strategies. So our fee rate is going up, because some of our very strong performing product that is less challenged by passive challenges it's been raising assets and includes capacity constrained products, as well as those are a little less capacity constraints. So that has been driving and that is really where a lot of our core strengths are on some of the more capacity constrained, or at least less -- less likely to be competed with the passive strategy. So more complex strategies, multi-sector strategies, et cetera.

And in terms of the -- some of the stuff you've been seeing in terms of the press in terms of where some of the intermediaries may be going with their fee levels. Again, we have a very diverse business with a lot of our managers that do make themselves available through those intermediaries. Again a lot of those strategies or some of our more capacity constrained strategies, where we currently have more demand than we actually have capacity and we feel very good about how they're priced and what the opportunity set is for those products. So we actually feel very positive from a product positioning standpoint that our set of products and their relative performance gives us a good opportunity in this environment and the environment that may emerge.

Michael Carrier -- BofA Merrill Lynch -- Analyst

Okay. Thanks a lot.

George R. Aylward -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from Sumeet Mody with Sandler O'Neill.

Sumeet Mody -- Sandler O'Neill -- Analyst

Thanks. Good morning. One for me. Just I guess stepping back on a high level. Looking at the strategy medium-to-long term, I mean how do you feel about the kind of geographical, may be channel mix, maybe asset class mix. Are there certain areas that look appealing that you feel you're under penetrated, maybe emerging markets alternatives. And do you have any kind of plan for the mechanism for growth within those asset classes as well.

George R. Aylward -- President and Chief Executive Officer

Sure. Well, I'd say the area that we focus a lot in terms of the diversification of our business and continue to look in opportunities to increase that diversification, right. So you've seen that manifest itself through our expansion into ETFs, our expansion on the usage side. We have been over the last few years, investing and building out the institutional channel. And particularly the non-U.S. institutional channel. So we continue to think that those are great opportunities for us. While there's still a lot of opportunities here in the U.S. market, our managers have not had as much penetration outside the U.S. as their incredibly compelling investment performance will allow. So we see that as an area, you recall from the second quarter, we refer to a European sub-advisory mandate. So we think there is a great opportunity. So that -- our focus really has been on growing the institutional, growing the institutional in the non-U.S. We have slowly build out a product suite of usage. I think we're up to five now at this point, all of whom have great performance and now we're at the three and five-year record.

So we see those as opportunities for us to leverage the strong capabilities and further diversify our business, which doesn't mean we'll spend less time and effort in the U.S. retail space, in the U.S. institutional space it's just another opportunity and where we're putting our efforts in terms of future growth.

Sumeet Mody -- Sandler O'Neill -- Analyst

Great. Thanks, George.

Operator

Our next question comes from Alex Blostein with Goldman Sachs.

Sheriq Sumar -- Goldman Sachs -- Analyst

Hi, this is Sheriq filling in for Alex. I had a question on the -- separate accounts. Can you give us some color as to what's driving the inflows over here, and which product, are you seeing, like the most demand in the separate accounts business.

George R. Aylward -- President and Chief Executive Officer

Sure. And we've been very happy with the retail separate accounts, as I noted in the remarks, 15 consecutive quarters of positive flows in that category. And I think you're seeing that in terms of the industry as one of the opportunities for active managers to really add a lot of value in terms of a well diversified portfolio. So we're pleased to partner with a multitude of the intermediaries that we partner with to offer a variety of strategies. A lot of our growth has been, as we sort of noted, in the SMID and the -- the mid and small-cap area, but we do offer other capabilities as well.

And in addition to the areas that I mentioned on the previous question in terms of areas of growth. We continue, we've seen retail separate accounts as a big area of growth and that is continues to be one, where we think we have many compelling investment strategies in terms of continuing to grow in that channel.

Sheriq Sumar -- Goldman Sachs -- Analyst

Understood. And just a follow-up on the expenses. Any color on the 2020 outlook for the expenses. I mean Mike gave a good guidance for the next quarter, but if you can just provide as to how are you thinking now for the 2020 expenses?

George R. Aylward -- President and Chief Executive Officer

Mike, go ahead.

Michael A. Angerthal -- Executive Vice President and Chief Financial Officer

Yeah, thanks. And we typically will update you as appropriate when elements of the portfolio or the business change. We talked about the fourth quarter and both the employment expenses ratio sort of tracking using the third quarter level as an appropriate position for modeling, all else being equal, other operating expenses, and we've talked about in the last couple of quarters, 18, $18.1 million being appropriate. And certainly those levels will be dictated by market conditions. And one of the things we've seen is the incremental margins in the 50% type of range and that's something we continue to believe is an appropriate expectation. One thing for modeling that you'll recall first quarter does have seasonal items. We have the payroll tax items -- and that come through in the first quarter that will be an expectation for modeling as well. So hopefully that's enough to kind of frame the beginnings of 2020.

Sheriq Sumar -- Goldman Sachs -- Analyst

Thank you. That's helpful.

Operator

Our next question comes from Michael Cyprys with Morgan Stanley.

Michael Cyprys -- Morgan Stanley -- Analyst

Hey, good morning. Thanks for taking the question. Just on the debt pay down, it was really nice to see another solid quarter of continued debt pay down here. Also seems like it's stepped up a bit. So just curious how you're thinking about -- how you guys are approaching it? Is it sort of like a 4% pay down a quarter, you guys are targeting or 7% of EBITDA? Just curious how you're approaching it? And how you're thinking about the velocity of a pay-down from here? What we should be expecting?

George R. Aylward -- President and Chief Executive Officer

Sure. Well a couple of things. We're pleased with the level of cash flow that we're currently generating and as we always say, we want to balance it among the various priorities of the business in terms of investing in the growth, returning the capital and managing our leverage. And as you saw, again the growth in the cash generation in this quarter. So we continue to balance that. We like to have a certain set of consistency, balanced with those opportunities that we have to make investments. So we do view debt as something that is a tool to be used going forward. So Mike, do you want to just give a little color on?

Michael A. Angerthal -- Executive Vice President and Chief Financial Officer

Yeah, I think you kind of framed it as we think about it, and we've been consistent in our pay downs over the last four or five quarters. And certainly a 0.5 times, we do have financial and operating flexibility, which we think is important going forward. And as we talked about -- the there'll be a little pickup in the free cash flow that we have retain in the first quarter, when the mandatorily convertible preferreds do convert to common. So that's another consideration for us as we think through balancing and investing in the business, paying down debt and returning capital to shareholders. So we feel really well positioned as we head into 2020.

Michael Cyprys -- Morgan Stanley -- Analyst

Great. Thank you. And just another question, maybe just on performance fees. It looked like you had, I think it was about $1.2 million or so come through in the quarter. Can you just remind us of the AUM at earning performance fees? How that's maybe changed over the past year or two and how we should be thinking about performance fee revenues over the next 12 to 24 months.

Michael A. Angerthal -- Executive Vice President and Chief Financial Officer

Yeah, we did in the prepared remarks, talk about experiencing approximately $2 million of annual performance fees has been historical levels over the last couple of years and that comes through in two ways, really on the CLO structured products. We experienced performance fees on there at certain periods of time. And then, we have hybrid fees on certain institutional accounts that are measured with a base fee and a performance fee on an actual results versus benchmark. And that's really what you saw our contribute into the performance fee in the third quarter of 2019. So it will vary, but again I think that $2 million per year is going to benchmark as any -- to the extent there are more products that come through with these type of hybrid fees we'd make you aware of them for modeling purposes and otherwise.

Michael Cyprys -- Morgan Stanley -- Analyst

Great. Thank you.

Michael A. Angerthal -- Executive Vice President and Chief Financial Officer

Thank you.

Operator

This concludes our question-and-answer session. I would like to turn the conference over to Mr. Aylward.

George R. Aylward -- President and Chief Executive Officer

Thanks. And I want to thank everyone as always for joining us today and we certainly encourage you to call reach out, if you have any other further questions. Thank you very much.

Operator

[Operator Closing Remarks]

Duration: 35 minutes

Call participants:

Sean Rourke -- Investor Relations

George R. Aylward -- President and Chief Executive Officer

Michael A. Angerthal -- Executive Vice President and Chief Financial Officer

Jeremy Campbell -- Barclays -- Analyst

Michael Carrier -- BofA Merrill Lynch -- Analyst

Sumeet Mody -- Sandler O'Neill -- Analyst

Sheriq Sumar -- Goldman Sachs -- Analyst

Michael Cyprys -- Morgan Stanley -- Analyst

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