ADP Reports Second Fiscal Quarter Results; Revenues Increase 9%, EPS Declines 12%; Fiscal 2004 EPS Guidance Narrowed to $1.53 - $1.58.Business Editors ROSELAND, N.J.--(BUSINESS WIRE)--Jan. 22, 2004 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, with revenues of $1.8 billion and $.38 earnings per share for the second fiscal quarter ended December December: see month. 31, 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 14% and 13%, 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 , on fewer shares outstanding, declined 12% from $.43 per share last year. Commenting on the quarter, Mr. Weinbach said, "Revenue growth was ahead of our plan for the quarter primarily in Brokerage Services. Revenues in Employer Services, Brokerage Services and Dealer Services grew 9%, 7% and 8%, respectively. Claims Services revenues declined 5% primarily due to the previously announced exiting of our Medical Claims Business. As anticipated, earnings continue to be impacted by lower interest rates, our 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. investment activity which will continue to increase over the fiscal year, and by 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. from last year's acquisitions. "Employer Services' sales growth was 2% in the second quarter compared with last year. This result is close to our plan and an improvement over the prior four quarters' sales results. We have seen increased interest in comprehensive outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. arrangements with large employers that include Managed Payroll, Human Resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. and Benefits Administration, and have created a dedicated organization within our National Accounts segment to support the growth in demand for these services. "Employer Services' client retention continued to be strong, improving slightly over last year's record retention levels. The critical year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. retention period is still ahead of us, but we are pleased with our results so far. The number of employees on our clients' payrolls, or 'pays per control', was relatively flat in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . However, pays per control in our European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. businesses is still declining, with individual country results ranging from flat to down 3% compared to last year. Employer Services' margin declined due to the increased investment spending as well as the continued integration of last June's ProBusiness Services and other acquisitions. Brokerage Services' revenue growth was primarily driven by an increase in investor communications activity. Non-proxy mutual fund mailings were especially strong compared with last year based on increased communications related to regulatory oversight
Oversight may refer to:
"We are slightly ahead of our plans as we move into the second half of the fiscal year and the overall outlook for ADP has turned more positive based on better momentum in the brokerage markets, improving economic conditions and increasing confidence that there will be no further interest rate declines. As we are halfway through our fiscal year and have increased visibility on our key metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. , we are narrowing the range of our fiscal 2004 earnings per share guidance to $1.53 - $1.58 from previous guidance of $1.50 - $1.60. We continue to forecast 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. We anticipate stronger sales growth in Employer Services during the second half of the year, due in part to easier comparisons and also due to our investments in products and a larger U.S. sales force. Our investment spending increased to about $30 million in the quarter, about $50 million year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , and we are on track to spend approximately $130 - $145 million for the fiscal year. "We have continued to acquire ADP shares for treasury. During the first half of fiscal 2004, we acquired over 7 million shares for approximately $270 million," Mr. Weinbach concluded. An analyst conference call to review the second quarter results will be held today, Thursday Thursday: see week. , January January: see month. 22 at 1:30 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. . 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)
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
2003 2002 2003 2002
---------- ---------- ---------- ----------
Revenues, other than
interest on funds held
for clients and PEO
revenues $1,636,333 $1,510,396 $3,168,722 $2,986,820
Interest on funds held for
clients 82,202 87,762 165,136 177,627
PEO revenues (A) 108,865 84,837 213,819 165,233
---------- ---------- ---------- ----------
Total revenues 1,827,400 1,682,995 3,547,677 3,329,680
---------- ---------- ---------- ----------
Operating expenses 810,300 702,716 1,604,541 1,411,184
Selling, general and
administrative expenses 459,293 402,005 886,171 849,958
Systems development and
programming costs 133,125 121,380 264,879 241,278
Depreciation and
amortization 73,609 68,699 148,335 136,383
Other income, net (14,067) (35,255) (32,659) (72,973)
---------- ---------- ---------- ----------
Total expenses 1,462,260 1,259,545 2,871,267 2,565,830
---------- ---------- ---------- ----------
Earnings before income
taxes 365,140 423,450 676,410 763,850
Provision for income taxes 136,560 161,760 252,980 291,760
---------- ---------- ---------- ----------
Net earnings $ 228,580 $ 261,690 $ 423,430 $ 472,090
========== ========== ========== ==========
Basic earnings per share $ 0.39 $ 0.44 $ 0.71 $ 0.78
========== ========== ========== ==========
Diluted earnings per
share $ 0.38 $ 0.43 $ 0.71 $ 0.78
========== ========== ========== ==========
Dividends per common
share $ 0.1400 $ 0.1200 $ 0.2600 $ 0.2350
========== ========== ========== ==========
(A) Net of pass-through costs of $1,037,864 and $873,488 for the three
months ended December 31, 2003 and 2002, respectively, and $1,949,433
and $1,636,867 for the six months ended December 31, 2003 and 2002,
respectively.
Automatic Data Processing, Inc. and Subsidiaries
Other Selected Financial Data
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
2003 2002 2003 2002
---------- ---------- ---------- ----------
Revenues for select
business units (B)
Employer Services $1,159,000 $1,064,000 $2,269,000 $2,072,000
Brokerage Services $ 340,000 $ 319,000 $ 653,000 $ 677,000
Dealer Services $ 218,000 $ 201,000 $ 429,000 $ 397,000
Pre-tax earnings for
select business units (B)
Employer Services $ 263,000 $ 268,000 $ 469,000 $ 481,000
Brokerage Services $ 32,000 $ 33,000 $ 53,000 $ 90,000
Dealer Services $ 37,000 $ 35,000 $ 69,000 $ 64,000
(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 has
changed the standard rate from 6.0% to 4.5%.
Components of Other Income,
net:
--------------------------
Interest income on
corporate funds $ (23,642)$ (34,348)$ (45,742)$ (74,052)
Interest expense 5,351 7,478 10,001 15,454
Realized losses (gains) on
available-for-sale
securities, net 4,224 (8,385) 3,082 (14,375)
---------- ---------- ---------- ----------
Total other income, net $ (14,067)$ (35,255)$ (32,659)$ (72,973)
========== ========== ========== ==========
Earnings per share
information:
--------------------------
Net earnings $ 228,580 $ 261,690 $ 423,430 $ 472,090
Average shares outstanding 591,685 598,064 593,264 602,418
Basic earnings per share $ 0.39 $ 0.44 $ 0.71 $ 0.78
Diluted net earnings $ 229,071 $ 261,992 $ 424,247 $ 472,705
Diluted shares outstanding 597,624 604,791 599,242 608,783
Diluted earnings per
share $ 0.38 $ 0.43 $ 0.71 $ 0.78
Automatic Data Processing, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
December 31, June 30,
2003 2003
------------ ------------
(Unaudited)
Assets
------
Cash and cash equivalents/Short-
term marketable securities $ 1,394,791 $ 2,005,384
Other current assets 1,551,461 1,670,117
------------ ------------
Total current assets 2,946,252 3,675,501
Long-term marketable securities 854,481 338,959
Property, plant and equipment, net 607,336 614,701
Other non-current assets 3,488,314 3,396,761
Funds held for clients 16,803,740 11,807,749
------------ ------------
Total assets $ 24,700,123 $ 19,833,671
============ ============
Liabilities and Shareholders'
Equity
-----------------------------
Total current liabilities $ 1,665,296 $ 1,998,783
Long-term debt 84,585 84,674
Other non-current liabilities 1,001,437 929,826
Client funds obligations 16,574,392 11,448,915
------------ ------------
Total liabilities 19,325,710 14,462,198
Total shareholders' equity 5,374,413 5,371,473
------------ ------------
Total liabilities and
shareholders' equity $ 24,700,123 $ 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. 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 counsel. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion