-----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, HEAQo6HZYnv9JbLKnu6rwcWeObzwVTkxlAJIxuZ1Db86VzxqpqzmHWYFZ4GzZipV VAs1gA0p7LfuNAxhRE3HOQ== 0000008670-04-000101.txt : 20040728 0000008670-04-000101.hdr.sgml : 20040728 20040727081903 ACCESSION NUMBER: 0000008670-04-000101 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040630 ITEM INFORMATION: FILED AS OF DATE: 20040727 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: 04932171 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 document.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): July 27, 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 July 27, 2004, the Registrant issued a press release announcing the Registrant's financial results for the fourth fiscal quarter ended June 30, 2004. 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: July 27, 2004 AUTOMATIC DATA PROCESSING, INC. By: /s/ Karen E. Dykstra --------------------------------- Name: Karen E. Dykstra Title: Chief Financial Officer Exhibit Index Exhibit Description Number 99 Press Release dated July 27, 2004, issued by Automatic Data Processing, Inc. EX-99 3 exhibit99fourthqtr.txt EXHIBIT 99 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, NJ, July 27, 2004 - Automatic Data Processing, Inc. (NYSE:ADP) reported 9% revenue growth for the fiscal year ended June 30, 2004, with revenues of $7.8 billion compared with $7.1 billion in fiscal 2003, Arthur F. Weinbach, chairman and chief executive officer, announced today. Pretax and net earnings declined 9% and 8%, respectively. Diluted earnings per share 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 were $1.4 billion for the year, and cash and marketable securities 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 in the United States with 1.5% growth in the quarter and 0.4% growth for the full year. In Europe, "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," our foreign exchange, money markets and derivatives 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 activity from recent mutual fund regulatory oversight. Dealer Services' revenues grew 13% in the quarter and 9% for the full year supported by strong sales growth of 13% for the year and continuing excellent retention. Claims Services' revenues increased 12% in the quarter primarily due to the acquisition of the ABZ Group B.V. in the Netherlands 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 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 Corporation before the end of the calendar year with about $.01 dilution 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 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. 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. (more) 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
(more) 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" 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. Source: Automatic Data Processing, Inc. ADP Investor Relations Elena Charles, 973.974.4077 Debbie Morris, 973.974.7821 #7#27#04# -----END PRIVACY-ENHANCED MESSAGE-----