ADP Reports 10% Earnings Per Share Gain in Fiscal 2002; Forecasts Mid-Single Digits Revenue and EPS Growth in Fiscal 2003.Business & Technology Editors 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 $1.75 earnings per share for fiscal year ended June June: see month. 30, 2002, an increase of 10% over fiscal 2001 pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. per share results of $1.59, pending the mid-August Noun 1. mid-August - the middle part of August period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" completion of the year-end audit of the financial statements, Arthur F. Weinbach, chairman and chief executive officer, confirmed today. This marks the company's 41st consecutive year of double-digit earnings per share growth and 164th consecutive quarter of record highs in both revenues and earnings per share since ADP became a public company in 1961. For fiscal 2003, Mr. Weinbach said he expects ADP to achieve its 42nd consecutive growth year, with revenue and earnings per share growth forecasted to be in the mid-single digits. "Results for fiscal 2002 were negatively impacted by three major factors: 1) In Employer Services the economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. resulted in slower sales, additional lost business primarily from client bankruptcies, and fewer employees on our clients' payrolls; 2) In Brokerage Services the weakness in the brokerage and 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 yielded fewer individual investor (retail) trades, and the industry significantly reduced discretionary spending and investments in new initiatives; and 3) Interest rates in the U.S. declined precipitously pre·cip·i·tous adj. 1. Resembling a precipice; extremely steep. See Synonyms at steep1. 2. Having several precipices: a precipitous bluff. 3. last year. Since ADP's average daily invested balances exceeded $10 billion in fiscal 2002, our interest earnings were significantly impacted. "The continuing weakness of the current economic environment is the primary factor that will hold our revenue and earnings per share growth forecast in fiscal 2003 to the mid-single digits. The lower yields expected on our invested funds in fiscal 2003 compared with fiscal 2002 will result in lower interest income from client funds, especially in the first half of the fiscal year where the interest rate comparisons will be more pronounced. "While we are not forecasting double-digit earnings per share growth in fiscal 2003, our 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. outlook continues to be quite positive. We have reduced our expense run rate by about $100 million as we begin fiscal 2003 (after a $150 million reduction entering fiscal 2002) and have increased our productivity. At the same time we have increased our investments in several promising opportunities, primarily in new and improved products and services. These steps position us well for the future. "During fiscal 2002 we acquired over 17 million shares of ADP stock at an average price of $50 per share. Given our financial strength and our confidence in the future, we view our share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program as an excellent investment that we will continue in fiscal 2003," Mr. Weinbach concluded. ADP, with $7 billion in revenues and 500,000 clients, is one of the largest independent computing computing - computer services firms in the world.
Below is a summary of unaudited comparative results:
Three Months Ended Twelve Months Ended
June 30, June 30,
Pro Forma Pro Forma
2002 2001(A)(B) 2002 2001(A)(B)
(In thousands, except per share amounts)
Revenues (R) $ 1,845,316 $ 1,815,936 $ 7,004,263 $ 6,853,562
Earnings before
income taxes (R) $ 465,020 $ 434,140 $ 1,786,970 $ 1,578,950
Provision for
income taxes $ 177,710 $ 166,960 $ 686,200 $ 607,270
Net earnings (R) $ 287,310 $ 267,180 $ 1,100,770 $ 971,680
Average shares
outstanding 617,445 624,244 618,857 629,035
Basic EPS (R) $ 0.47 $ 0.43 $ 1.78 $ 1.54
Previously reported
basic EPS (R) $ 0.41 $ 1.47
Diluted net
earnings (R) $ 287,669 $ 267,669 $ 1,102,381 $ 974,020
Diluted shares
outstanding 627,181 637,522 630,579 645,989
Diluted EPS (R) $ 0.46 $ 0.42 $ 1.75 $ 1.51
Previously reported
diluted EPS (R) $ 0.40 $ 1.44
Revenues by business
unit (C)
Employer
Services $ 1,012,000 $ 968,000 $ 4,184,000 $ 3,968,000
Brokerage
Services $ 574,000 $ 573,000 $ 1,758,000 $ 1,742,000
Dealer
Services $ 181,000 $ 174,000 $ 706,000 $ 683,000
Pre-tax earnings by
business unit (C)
Employer
Services $ 235,000 $ 197,000 $ 1,110,000 $ 936,000
Brokerage
Services $ 137,000 $ 127,000 $ 354,000 $ 332,000
Dealer
Services $ 29,000 $ 25,000 $ 116,000 $ 99,000
(A) Prior year's results include certain reclassifications to
conform to the current presentation. The twelve months ended
June 30, 2001 include a $90 million non-recurring write-off
($54 million after tax) of the Company's investment in Bridge
Information Systems, Inc. ("Bridge").
(B) Prior year's results reflect the pro forma impact relating to
the adoption of SFAS No. 142, which eliminates goodwill
amortization. Business unit results include certain
allocations and are not impacted by SFAS No. 142. Diluted
earnings per share, excluding the non-recurring Bridge
write-off, are $0.42 and $1.59 for the quarter and twelve
months ended June 30, 2001, respectively.
(C) Prior year's business unit results were restated using FY '02
budgeted foreign exchange rates.
(R) Record high.
An analyst conference call to review the fourth-quarter results will be held at 8:30AM on Thursday, July 18th. 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. This release contains "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. " based on management's expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ from those expressed. Factors that could cause differences include: ADP's success in obtaining, retaining and selling additional services to clients; the pricing of products and services; changes in laws regulating 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. and employee benefits; overall economic trends, including interest rate and foreign currency trends; 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 levels; changes in technology; availability of skilled technical associates; and the impact of new acquisitions. ADP disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The information and opinions contained in this release have been furnished fur·nish tr.v. fur·nished, fur·nish·ing, fur·nish·es 1. To equip with what is needed, especially to provide furniture for. 2. and approved by Automatic Data Processing, Inc. We are retained by them as investor relations Investor relations The process by which the corporation communicates with its investors. counsel. |
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