-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Rx2EgUWRc/y+yg0EwL2cVwpmMXN12XpboEmelYdJ9g1iAbLrYGDKz/n3YBKDvnB4 bmCRSHMrj9zA4Rf4h22eWQ== 0000008670-04-000034.txt : 20040122 0000008670-04-000034.hdr.sgml : 20040122 20040122081255 ACCESSION NUMBER: 0000008670-04-000034 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031231 ITEM INFORMATION: FILED AS OF DATE: 20040122 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AUTOMATIC DATA PROCESSING INC CENTRAL INDEX KEY: 0000008670 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 221467904 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05397 FILM NUMBER: 04536533 BUSINESS ADDRESS: STREET 1: ONE ADP BOULVARD CITY: ROSELAND STATE: NJ ZIP: 07068 BUSINESS PHONE: 9739747849 MAIL ADDRESS: STREET 1: ONE ADP BOULEVARD CITY: ROSELAND STATE: NJ ZIP: 07068 8-K 1 jan8k.txt 8K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): JANUARY 22, 2004 AUTOMATIC DATA PROCESSING, INC. - ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 1-5397 22-1467904 - ------------------------------------------------------------------------------ (State or (Commission (IRS other File Employer jurisdiction Number) Identification of No.) incorporation) ONE ADP BOULEVARD, ROSELAND, NEW JERSEY 07068 - ------------------------------------------------------------------------------ (Address of principal (Zip executive offices) Code) Registrant's telephone number, including area code: (973) 974-5000 -------------------------- N/A - ------------------------------------------------------------------------------ (Former name or former address, if changed since last report) ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On January 22, 2004, the Registrant issued a press release announcing the Registrant's financial results for the second fiscal quarter ended December 31, 2003. A copy of the Registrant's press release is attached hereto as Exhibit 99 and is hereby incorporated by reference. The information in this Form 8-K, including the accompanying exhibit, is being furnished under Item 12 and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities and Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: January 22, 2004 AUTOMATIC DATA PROCESSING, INC. By: /s/ Karen E. Dykstra ------------------------------ Name: Karen E. Dykstra Title: Chief Financial Officer EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION -------------- ----------------------------------------------- 99 Press Release dated January 22, 2004, issued by Automatic Data Processing, Inc. EX-99 4 exhibit99.txt PRESS RELEASE ADP REPORTS SECOND FISCAL QUARTER RESULTS; REVENUES INCREASE 9%, EPS DECLINES 12%; FISCAL 2004 EPS GUIDANCE NARROWED TO $1.53 - $1.58 ROSELAND, NJ, January 22, 2004 - Automatic Data Processing, Inc. (NYSE:ADP) reported 9% revenue growth, with revenues of $1.8 billion and $.38 earnings per share for the second fiscal quarter ended December 31, 2003, Arthur F. Weinbach, chairman and chief executive officer, announced today. Pretax and net earnings declined 14% and 13%, respectively. Diluted earnings per share, 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 investment activity which will continue to increase over the fiscal year, and by dilution 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 arrangements with large employers that include Managed Payroll, Human Resources 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 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. However, pays per control in our European 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. "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, 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 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, 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, January 22 at 1:30 p.m. EST. 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 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 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" within the meaning of the Private Securities Litigation Reform Act 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, professional employer organizations and employee benefits; overall market and economic conditions, including interest rate and foreign currency trends; competitive conditions; stock market activity; auto sales 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. #1#22#04# -----END PRIVACY-ENHANCED MESSAGE-----