ADP Fiscal 2003 Revenue Rises 2%, EPS Declines 4% to $1.68; Forecasts Mid-Single Digit Revenue Growth and $1.50 - $1.60 EPS for Fiscal 2004.Business Editors/High-Tech Writers ROSELAND, N.J.--(BUSINESS WIRE)--July 29, 2003 Automatic Data Processing Same as data processing. , Inc. (NYSE NYSE See: New York Stock Exchange :ADP (1) (Automatic Data Processing) Synonymous with data processing (DP), electronic data processing (EDP) and information processing. (2) (Automatic Data Processing, Inc., Roseland, NJ, www.adp. ) reported 2% revenue growth and $1.68 earnings per share for the fiscal year ended June June: see month. 30, 2003, Arthur Arthur, king of Britain: see Arthurian legend. Arthur king and hero of Scotland, Wales, and England. [Arthurian Legend: Parrinder, 28] See : Heroism F. Weinbach, chairman and chief executive officer, announced today. Revenues of $7.1 billion increased 2% over last year. Pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern and net earnings declined 8% compared with last year. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of , on fewer shares outstanding, declined 4% from $1.75 per share last year. During fiscal 2003, ADP acquired over 27 million shares of its stock for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $940 million reflecting confidence in the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth of the businesses. With cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has of $2.3 billion, operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. of $1.6 billion for the year, and only $85 million of debt, ADP is well positioned for future growth opportunities. In the fourth quarter, revenues increased 4% to $1.9 billion. Pretax and net earnings decreased 25% compared with last year's fourth quarter. Earnings per share, on fewer shares outstanding, declined to $0.36 per share from $0.46 per share in fiscal 2002. Commenting on the year, Mr. Weinbach said, "In fiscal 2003, the weak economy impacted Employer Services, Brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. Services and interest income in a significant way. Employer Services' revenues grew 5% despite a 2% decline in new business sales and a 1% decline in the number of employees on our clients' payrolls during the year. Client retention improved 1%. Brokerage Services' revenues declined 9% based on the weakness in the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industry which affected our primarily volume-based back office processing and investor communication activities. Dealer Services' revenues grew 12%, and Claims Services' revenues were approximately the same as last year. Lower interest rates reduced interest income on funds held for clients 14%, despite 7% growth during the year in average client fund balances to $8.9 billion. "In March we announced plans to accelerate investments in our most promising key products and in our associates, and to restructure under-performing businesses. Our fiscal 2003 results include approximately $60 million of incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. to exit certain businesses and reduce costs in slow growth areas, most of which occurred in the fourth quarter. The restructuring charges were primarily related to severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when , including charges to exit our Medical Claims business within Claims Services and a small payroll business servicing primarily government agencies, separate from our core payroll business, in the United Kingdom. "As we look ahead, we are assuming little improvement in the economic environment. Our guidance for fiscal 2004 is mid-single digit A single character in a numbering system. In decimal, digits are 0 through 9. In binary, digits are 0 and 1. digit - An employee of Digital Equipment Corporation. See also VAX, VMS, PDP-10, TOPS-10, DEChead, double DECkers, field circus. revenue growth, and earnings per share of $1.50 - $1.60. This outlook reflects the ongoing impact of the weak economy on Employer Services and Brokerage Services, as well as lower interest rates compared with last year, which we anticipate will cause a decline in interest income on corporate and client funds of $60 - $80 million from fiscal 2003. In addition, we will invest an incremental $90 - $100 million in our highest growth opportunities, primarily in Employer Services' products such as the TotalChoice(SM), PayeXpert(R) and Enterprise platforms. We will also spend $40 - $45 million on Employer of Choice initiatives aimed at retaining our quality associates. "We are seeing growth opportunities where positive early market reaction to our new offerings clearly justifies an increased level of investment. Our business model and financial strength provide us the ability to pursue these opportunities even in times of economic uncertainty," Mr. Weinbach concluded. An analyst conference call to review the fiscal 2003 results will be held today, Tuesday Tuesday: see week. , July July: see month. 29th at 1:30PM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . A live audio webcast of the call will be available to the public on a listen-only basis. To listen to the webcast go to www.adp.com and click on the webcast icon. ADP's news releases, current financial information, SEC filings and Investor Relations Investor relations The process by which the corporation communicates with its investors. presentations are accessible at the same website. ADP, with over $7 billion in revenues and more than 500,000 clients, is one of the largest independent computing computing - computer services firms in the world.
Automatic Data Processing, Inc. and Subsidiaries
Consolidated Statements of Earnings
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
June 30, June 30,
2003 2002 2003 2002
---------------------- ----------------------
Revenues, other than
interest on funds held
for clients
and PEO revenues $1,720,785 $1,671,547 $6,412,059 $6,305,206
Interest on funds held
for clients 91,992 100,096 368,727 431,236
PEO revenues (A) 98,782 73,673 366,231 267,821
---------------------- ----------------------
Total revenues 1,911,559 1,845,316 7,147,017 7,004,263
---------------------- ----------------------
Operating expenses 888,955 829,831 3,096,719 2,970,645
Selling, general and
administrative
expenses 495,602 387,354 1,758,353 1,606,690
Systems development and
programming costs 134,513 125,087 499,192 474,843
Depreciation and
amortization 70,796 67,962 274,682 279,077
Other income, net (26,657) (29,938) (127,129) (113,962)
---------------------- ----------------------
Total expenses 1,563,209 1,380,296 5,501,817 5,217,293
---------------------- ----------------------
Earnings before income
taxes 348,350 465,020 1,645,200 1,786,970
Provision for income
taxes 131,680 177,710 627,050 686,200
---------------------- ----------------------
Net earnings $216,670 $287,310 $1,018,150 $1,100,770
====================== ======================
Basic earnings per share $0.36 $0.47 $1.70 $1.78
====================== ======================
Diluted earnings per
share $0.36 $0.46 $1.68 $1.75
====================== ======================
Dividends per common
share $0.1200 $0.1150 $0.4750 $0.4475
====================== ======================
(A) Net of pass-through costs of $921,525 and $725,511 for the three
months ended June 30, 2003 and 2002, respectively, and $3,462,783 and
$2,648,321 for the twelve months ended June 30, 2003 and 2002,
respectively.
Automatic Data Processing, Inc. and Subsidiaries
Other Selected Financial Data
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
June 30, June 30,
2003 2002 2003 2002
---------------------- ----------------------
Revenues for select
business units (B)
Employer Services $1,084,000 $1,011,000 $4,401,000 $4,180,000
Brokerage Services $528,000 $573,000 $1,593,000 $1,758,000
Dealer Services $201,000 $181,000 $788,000 $706,000
Pre-tax earnings for select
business units (B)
Employer Services $213,000 $235,000 $1,193,000 $1,110,000
Brokerage Services $97,000 $137,000 $230,000 $354,000
Dealer Services $34,000 $29,000 $132,000 $116,000
(B) Prior year's segment results were adjusted to reflect fiscal year
2003 budgeted foreign exchange rates.
Components of Other
Income, net:
-------------------------
Interest income on
corporate funds $(23,832) $(34,530) $(119,413) $(118,672)
Interest expense 4,186 5,113 21,838 21,164
Realized gains on
available-for-sale
securities, net (7,011) (521) (29,554) (16,454)
---------------------- ----------------------
Total other income, net $(26,657) $(29,938) $(127,129) $(113,962)
====================== ======================
Earnings per share
information:
-------------
Net earnings $216,670 $287,310 $1,018,150 $1,100,770
Average shares
outstanding 595,211 617,445 600,071 618,857
Basic earnings per share $0.36 $0.47 $1.70 $1.78
Diluted net earnings $216,969 $287,669 $1,019,357 $1,102,381
Diluted shares
outstanding 600,168 627,181 605,917 630,579
Diluted earnings per
share $0.36 $0.46 $1.68 $1.75
Automatic Data Processing, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
June 30, June 30,
2003 2002
------------ ------------
Assets
------
Cash and cash equivalents / Short-term
marketable securities $2,005,384 $1,475,815
Other current assets 1,670,117 1,341,442
------------ ------------
Total current assets 3,675,501 2,817,257
Long-term marketable securities 338,959 1,273,768
Property, plant and equipment, net 614,701 596,451
Other non-current assets 3,396,761 2,363,775
Funds held for clients 11,807,749 11,225,271
------------ ------------
Total assets $19,833,671 $18,276,522
============ ============
Liabilities and Shareholders' Equity
------------------------------------
Total current liabilities $1,998,783 $1,411,102
Long-term debt 84,674 90,648
Other non-current liabilities 929,826 610,197
Client funds obligations 11,448,915 11,050,370
------------ ------------
Total liabilities 14,462,198 13,162,317
Total shareholders' equity 5,371,473 5,114,205
------------ ------------
Total liabilities and shareholders' equity $19,833,671 $18,276,522
============ ============
This release and other written or oral statements made from time to time by ADP may contain "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Statements that are not historical in nature and which may be identified by the use of words like "expects," "projects," "anticipates," "estimates," "we believe," "could be" and other words of similar meaning, are forward-looking statements. These statements are based on management's expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include: ADP's success in obtaining, retaining and selling additional services to clients; the pricing of products and services; changes in laws regulating reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. payroll taxes Payroll Tax Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax. , professional employer organizations A professional employer organization (PEO) provides outsourcing of payroll, workers' compensation, human resources and employee benefits administration. It does this by hiring a client company’s employees, thus becoming their employer of record. and employee benefits; overall market and economic conditions, including interest rate and foreign currency trends; competitive conditions; stock market activity; auto sales Auto Sales The major producers of domestic automobiles report sales monthly. These numbers are seasonally adjusted by the U.S. Department of Commerce and are available to the public one to five business days after the end of each month. and related industry changes; employment and wage levels; changes in technology; availability of skilled technical associates and the impact of new acquisitions and divestitures. ADP disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. |
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