ADP Reports Fiscal 2004 Results; Revenues Increase 9%, EPS Declines 7% to $1.56; Forecasts Mid-Single Digit Revenue Growth and Double-Digit EPS Growth for Fiscal 2005.ROSELAND, N.J. -- 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 9% revenue growth for the fiscal year ended June June: see month. 30, 2004, with revenues of $7.8 billion compared with $7.1 billion in fiscal 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. Pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern and net earnings declined 9% and 8%, respectively. 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 of $1.56 declined 7% from $1.68 per share last year on fewer shares outstanding. During fiscal 2004, ADP acquired nearly 16 million of its shares for treasury for approximately $650 million. 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. were $1.4 billion for the year, and 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 were $2.1 billion at June 30, 2004. In the fourth quarter, revenues of $2.1 billion increased 9% compared with $1.9 billion in the fourth quarter of fiscal 2003. Pretax and net earnings declined 3% and 2%, respectively. Diluted earnings per share of $0.36, on fewer shares outstanding, were flat with last year's fourth quarter. Commenting on the results, Mr. Weinbach said, "We concluded the year in line with our expectations. Employer Services' revenues grew 9% for the quarter and 10% for the full year. The positive momentum in new business sales continued with 19% growth for the quarter resulting in 6% growth for the full year. The number of employees on our clients' payrolls, "pays per control," continued to rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. with 1.5% growth in the quarter and 0.4% growth for the full year. In Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , "pays per control"
continued to decline but at a lower rate than earlier in the year.
Average client fund balances have been strong with 24% growth for the
year, half of which was contributed by last year's acquisition of
ProBusiness Services."Brokerage Services' revenues grew 5% in the quarter and 3% for the year. During the quarter we divested "OMR (Optical Mark Reader) A scanner that reads marks on specific areas of the page. See mark sensing. OMR - Optical Mark Reader ," our foreign exchange, money markets and derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. products business with revenues of about $25 million annually. Our quarter and full year results in Brokerage Services were helped by 15% growth in investor communications pieces delivered reflecting more holders of equities and 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. activity from recent mutual fund regulatory oversight
Oversight may refer to:
ABZ Aberdeen, Scotland, United Kingdom - Dyce (Airport Code) ABZ Al, Bill, and Zorn Manufacturing, Inc. Group B.V. in the Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. in our third quarter. Claims Services' revenues were flat with last year on a full year basis. "As our business continued to improve in the quarter, and consistent with our April 22, 2004 projection, we accelerated about $30 million of non-recurring charges which are included in the results of each business. Including these non-recurring charges, our total investment spending for fiscal 2004 was about $170 million. Our investment expense during the year, excluding the $30 million non-recurring charges, was about $20 million, $30 million, $40 million and $50 million in the first through fourth quarters, respectively. On an ongoing basis our run rate will be about $45 million quarterly, or about $180 million on a full year basis. "Our outlook for fiscal 2005 is positive. We are beginning to see the benefit of our investments in our associates, products and services, and our sales force. Our associate retention is good at almost 90% retention worldwide. Client retention is excellent across all businesses and especially in Employer Services where we improved retention almost 1% in 2004 compared to record levels a year ago. We are gaining momentum in sales, particularly in Employer Services and Dealer Services where, in both businesses, we finished the year strong and have double-digit sales growth expectations for 2005. "Our fiscal 2005 guidance is for 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 double-digit earnings per share growth. The forecast is based on current economic conditions. Our interest assumptions are based on current yield curves. We are assuming no further improvement in "pays per control," and a 3% increase in investor communications pieces delivered with lower mutual fund mailings related to regulatory oversight. We anticipate closing our previously announced acquisition of the U.S. Clearing and BrokerDealer Services division of Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. Corporation before the end of the calendar year with about $.01 dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. in fiscal 2005. "Although we are forecasting double-digit earnings per share growth for fiscal 2005, we expect to start the year slower with lower growth early in the year. We expect earnings growth to accelerate throughout the year as we anticipate more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. interest rate comparisons and we anniversary investment spending levels that increased throughout fiscal 2004. "Fiscal 2004 was an important transition year for ADP. The appropriate investments have been made. We now face the future well positioned for the challenges of fiscal 2005 and the longer term," Mr. Weinbach concluded. An analyst conference call to review the fiscal 2004 results will be held today, Tuesday, July 27 at 1:30 p.m. 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 approximately 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,
2004 2003 2004 2003
---------- ----------- ----------- ----------
Revenues, other than
interest on funds
held for clients and
PEO revenues $ 1,869,164 $ 1,720,785 $ 6,932,558 $6,412,059
Interest on funds
held for clients 93,743 91,992 355,410 368,727
PEO revenues (A) 122,923 98,782 466,974 366,231
----------- ------------ ----------- ----------
Total revenues 2,085,830 1,911,559 7,754,942 7,147,017
----------- ------------ ----------- ----------
Operating expenses 976,499 888,955 3,525,413 3,096,719
Selling, general
and administrative
expenses 529,775 495,602 1,903,356 1,758,353
Systems development
and programming
costs 171,462 134,513 581,165 499,192
Depreciation and
amortization 81,252 70,796 306,772 274,682
Other income, net (11,638) (26,657) (56,294) (127,129)
------------ ------------- ---------- ----------
Total expenses 1,747,350 1,563,209 6,260,412 5,501,817
------------ ------------- ---------- ----------
Earnings before
income taxes 338,480 348,350 1,494,530 1,645,200
Provision for
income taxes 126,590 131,680 558,960 627,050
------------- ------------ ---------- ----------
Net earnings $ 211,890 $ 216,670 $ 935,570 $1,018,150
============= ============ =========== ===========
Basic earnings
per share $ 0.36 $ 0.36 $ 1.58 $ 1.70
Diluted earnings
per share $ 0.36 $ 0.36 $ 1.56 $ 1.68
Dividends per
common share $ 0.1400 $ 0.1200 $ 0.5400 $ 0.4750
(A) Net of pass-through costs of $1,150,752 and $921,525 for the three
months ended June 30, 2004 and 2003, respectively, and $4,237,017
and $3,462,783 for the twelve months ended June 30, 2004 and 2003,
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,
2004 2003 2004 2003
------------ ----------- ----------- ------------
Revenues for select
business units (B)
Employer Services $ 1,174,000 $ 1,078,000 $ 4,809,000 $ 4,390,000
Brokerage Services 560,000 532,000 1,665,000 1,610,000
Dealer Services 235,000 208,000 890,000 813,000
Pretax earnings for
select business
units (B)
Employer Services $ 139,000 $ 178,000 $ 993,000 $ 1,070,000
Brokerage Services 124,000 98,000 245,000 232,000
Dealer Services 36,000 36,000 144,000 137,000
(B) Prior year's segment results were adjusted to reflect fiscal year
2004 budgeted foreign exchange rates. In addition, Employer
Services' prior year revenue was adjusted to include interest
earned on client funds credited at 4.5%. Employer Services'
revenues are credited with interest earned on client funds at a
standard rate to better judge real business growth without the
impact of changing interest rates. Given the sustained lower
interest rates over recent years, ADP changed the standard rate
from 6.0% to 4.5% in fiscal 2004.
Components of Other
Income, net:
Interest income on
corporate funds $ (20,678) $ (23,832) $ (79,941) $ (119,413)
Interest expense 4,027 4,186 15,993 21,838
Realized (gains)
losses on
available-for-sale
securities, net 5,013 (7,011) 7,654 (29,554)
------------- ----------- ----------- -----------
Total other income,
net $ (11,638) $ (26,657) $ (56,294) $ (127,129)
============= =========== =========== ===========
Earnings per share
information:
Net earnings $ 211,890 $ 216,670 $ 935,570 $ 1,018,150
Average shares
outstanding 589,075 595,211 591,697 600,071
Basic earnings
per share $ 0.36 $ 0.36 $ 1.58 $ 1.70
Diluted net
earnings $ 212,171 $ 216,969 $ 936,991 $ 1,019,357
Diluted shares
outstanding 597,653 600,168 598,749 605,917
Diluted earnings
per share $ 0.36 $ 0.36 $ 1.56 $ 1.68
Automatic Data Processing, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
June 30, June 30,
2004 2003
--------------- ---------------
Assets
Cash and cash equivalents/Short-term
marketable securities $ 1,129,075 $ 2,005,384
Other current assets 1,632,514 1,670,117
---------------- ---------------
Total current assets 2,761,589 3,675,501
Long-term marketable securities 963,501 338,959
Property, plant and equipment, net 642,353 614,701
Other non-current assets 3,849,584 3,396,761
Funds held for clients 12,903,532 11,807,749
Total assets $ 21,120,559 $ 19,833,671
Liabilities and Shareholders' Equity
Total current liabilities $ 1,768,424 $ 1,998,783
Long-term debt 76,200 84,674
Other non-current liabilities 1,018,040 929,826
Client funds obligations 12,840,225 11,448,915
Total liabilities 15,702,889 14,462,198
Total shareholders' equity 5,417,670 5,371,473
Total liabilities and
shareholders' equity $ 21,120,559 $ 19,833,671
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 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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