LAKE SUCCESS, NY--(Marketwire - February 4, 2010) - Broadridge Financial Solutions, Inc.
(
NYSE:
BR), a technology services company focused on global capital
markets, today reported revenues of $529.7 million, net earnings from
continuing operations of $51.5 million and diluted earnings per share from
continuing operations of $0.37 for the second fiscal quarter ended December
31, 2009. This compares with revenues of $437.5 million, net earnings from
continuing operations of $30.0 million and diluted earnings per share from
continuing operations of $0.21 for the comparable quarter of the previous
fiscal year.
Commenting on the results, Richard J. Daly, Chief Executive Officer, said,
"I am pleased with the strong financial results for the quarter and
especially our closed sales, which are up 30% for the quarter and 36%
year-to-date."
Mr. Daly added, "Revenues for the quarter were up significantly, driven by
an unprecedented level of event-driven mutual fund proxy revenues and
related distribution revenues. We had planned for the event-driven mutual
fund revenues to rebound, but they were stronger than anticipated and were
a significant contributor to our revenue growth this quarter."
Financial Results for Second Quarter Fiscal Year 2010
It is anticipated that the previously announced Penson transaction will
close in the second half of the 2010 fiscal year, subject to the
satisfaction of customary closing conditions, including regulatory
approvals. Beginning in the second quarter of the 2010 fiscal year, the
financial results of the securities clearing business will be accounted for
as a discontinued operation and the operations outsourcing solutions
business retained by Broadridge will be aggregated into the Securities
Processing Solutions segment.
For the second quarter of fiscal year 2010, revenues from continuing
operations increased 21% to $529.7 million compared to $437.5 million for
the same period last year, primarily as a result of higher contributions
from fee revenues of $59.7 million and higher distribution revenues of
$32.5 million. Higher fee revenues were driven primarily by event-driven
mutual fund proxy revenues. Pre-tax margins from continuing operations of
12.9% increased compared to 11.1% for the same period last year, as a
result of higher margin revenue.
Net earnings from continuing operations increased 72% to $51.5 million from
$30.0 million for the same period last year, primarily due to higher
revenues and a lower effective tax rate. Diluted earnings per share from
continuing operations increased to $0.37 per share on lower
weighted-average shares outstanding, compared to $0.21 per share for the
same period last year. Our closed sales of $58.1 million for the quarter
increased 30% above last year's comparable quarter. During the second
quarter of fiscal year 2010, the Company repurchased approximately 2.6
million shares of Broadridge common stock under its stock repurchase plan
at an average price of approximately $22.62 per share.
Financial Results for Year-to-Date Fiscal Year 2010
For the six months ended December 31, 2009, revenues from continuing
operations increased 8% to $967.9 million compared to $893.0 million for
the same period last year, primarily driven by higher contributions from
fee revenues of $55.7 million and higher distribution revenues of $19.2
million. Pre-tax margins from continuing operations of 11.5% declined
compared to 12.1% for the same period last year as a result of a one-time
gain from the purchase of the senior notes in fiscal year 2009. Excluding
this one-time gain, pre-tax margins would be up 0.4 percentage points.
Net earnings from continuing operations increased 18% to $78.1 million from
$66.1 million for the same period last year, primarily due to higher
revenues and a lower effective tax rate. Diluted earnings per share from
continuing operations increased to $0.56 per share on lower
weighted-average shares outstanding, compared to $0.47 per share for the
same period last year. Our closed sales of $88.1 million increased 36%
above last year's comparable period. During the first six months of fiscal
year 2010, the Company repurchased approximately 6.1 million shares of
Broadridge common stock under its stock repurchase plan at an average price
of approximately $21.43 per share.
Analysis of Second Quarter Fiscal Year 2010
Investor Communication Solutions
Revenues for the Investor Communication Solutions segment in the second
quarter of fiscal year 2010 increased 33% to $393.3 million compared to the
second quarter of fiscal year 2009. The increase was driven primarily by
higher event-driven mutual fund proxy revenues and related distribution
revenues. Operating margin increased by 6.2 percentage points compared to
the second quarter of fiscal year 2009, as a result of higher event-driven
proxy activity.
Securities Processing Solutions
Revenues for the Securities Processing Solutions segment in the second
quarter of fiscal year 2010 decreased 9% to $133.8 million compared to the
second quarter of fiscal year 2009. The decrease was primarily related to
the carryover impact of the previously announced client losses and price
concessions and lower trade volumes in our equity and fixed income
businesses, slightly offset by an increase in new business. Non-trade
revenues and operations outsourcing revenues were essentially unchanged.
Operating margin decreased 8.5 percentage points compared to the second
quarter of fiscal year 2009, as a result of lower revenues.
Other
Revenues from Other in the second quarter of fiscal year 2010 increased
$2.1 million compared to the second quarter of fiscal year 2009, reflecting
primarily one-time termination fees. Pre-tax loss from continuing
operations for Other was $6.8 million for the second quarter of fiscal year
2010, an improvement of $1.3 million, compared to the second quarter of
fiscal year 2009. The improvement is primarily related to one-time
termination fees.
Fiscal Year 2010 Financial Guidance
We anticipate our revenue growth from continuing operations to be in the
range of 7% to 9%. Our GAAP earnings per share from continuing operations
are expected to be in the range of $1.56 to $1.66 on a diluted share basis.
Our non-GAAP earnings per share from continuing operations are expected to
be in the range of $1.50 to $1.60 on a diluted share basis, which excludes
a positive $0.06 per share impact of a one-time foreign tax credit. Our
GAAP earnings per share are expected to be in the range of $1.40 to $1.50
on a diluted share basis, which includes a $0.16 loss on the pending sale
of the securities clearing business. The earnings per share guidance is
based on diluted weighted-average shares outstanding of approximately 139
million shares. In addition, our fiscal year 2010 financial guidance
assumes that the Penson transaction closes during the second half of our
2010 fiscal year.
We anticipate margins from continuing operations before interest and taxes
in the range of 15.4% to 16.0% (non-GAAP). Our effective annual tax rate
will be approximately 34.7% (GAAP) and approximately 36.7% (non-GAAP),
excluding the one-time foreign tax credit of $0.06 per share. Free cash
flow is expected to be in the range of $235 million to $270 million. Our
closed sales forecast for fiscal year 2010 is expected to be in a range of
$185 million to $205 million.
Mr. Daly commented, "I am pleased with our second quarter financial
results, our sales continue to be strong and our proven strong free cash
flows continue as anticipated. These results should enable us to achieve
our financial guidance for this fiscal year. As we move forward with our
clear and executable strategy, we remain confident in Broadridge's future
to grow our business to the benefit of our shareholders, customers and
associates."
Non-GAAP Measures
In certain circumstances, results have been presented that are non-GAAP
financial measures and should be viewed in addition to, and not as a
substitute for, the Company's measures of financial performance prepared in
accordance with GAAP. Management believes that such non-GAAP measures,
when presented in conjunction with comparable GAAP measures, provide
investors with a more complete understanding of Broadridge's underlying
operational results. These non-GAAP measures are indicators that
management uses to provide additional meaningful comparisons between
current results and prior reported results, and as a basis for planning and
forecasting for future periods. Accompanying this release is a
reconciliation of non-GAAP measures to the comparable GAAP measures.
Earnings Conference Call
An analyst conference call will be held today, Thursday, February 4, at
8:30 a.m. ET. A live webcast of the call will be available to the public
on a listen-only basis. To listen to the webcast and view the slide
presentation, go to
www.broadridge-ir.com and click on the webcast icon.
The presentation will be available to download and print approximately 60
minutes before the webcast on the Broadridge Investor Relations home page
at
www.broadridge-ir.com. Broadridge's news releases, current financial
information, SEC filings and Investor Relations presentations are
accessible on the same website.
About Broadridge
Broadridge is a technology services company focused on global capital
markets. Broadridge is the market leader enabling secure and accurate
processing of information for communications and securities transactions
among issuers, investors and financial intermediaries. Broadridge builds
the infrastructure that underpins proxy services for over 90% of public
companies and mutual funds in North America; processes more than $3
trillion in fixed-income and equity trades per day; and saves companies
billions annually through its technology solutions. For more information
about Broadridge, please visit
www.broadridge.com.
Forward-Looking Statements
This press release and other written or oral statements made from time to
time by representatives of Broadridge may contain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. Statements that are not historical in nature, such as our
fiscal year 2010 financial guidance, and which may be identified by the use
of words like "expects," "assumes," "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.
These risks and uncertainties include those risk factors discussed in Part
I, "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal
year ended June 30, 2009 (the "2009 Annual Report"), as they may be updated
in any future reports filed with the Securities and Exchange Commission.
Any forward-looking statements are qualified in their entirety by reference
to the factors discussed in the 2009 Annual Report. These risks include:
the success of Broadridge in retaining and selling additional services to
its existing clients and in obtaining new clients; the pricing of
Broadridge's products and services; changes in laws affecting the investor
communication services provided by Broadridge; changes in laws regulating
registered securities clearing firms and broker-dealers; declines in
trading volume, market prices, or the liquidity of the securities markets;
any material breach of Broadridge security affecting its clients' customer
information; Broadridge's ability to continue to obtain data center
services from its former parent company, Automatic Data Processing, Inc.
("ADP"); any significant slowdown or failure of Broadridge's systems;
Broadridge's failure to keep pace with changes in technology and demands of
its clients; availability of skilled technical employees; the impact of new
acquisitions and divestitures; competitive conditions; and overall market
and economic conditions. Broadridge disclaims any obligation to update any
forward-looking statements, whether as a result of new information, future
events or otherwise.
Broadridge Financial Solutions, Inc.
Condensed Consolidated Statements of Earnings
(In millions, except per share amounts)
(Unaudited)
Three Months Six Months
Ended December 31, Ended December 31,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Revenues $ 529.7 $ 437.5 $ 967.9 $ 893.0
-------- -------- -------- --------
Cost of revenues 399.7 328.2 738.2 676.4
Selling, general and administrative
expenses 58.4 62.0 111.8 115.7
Other (income) expenses, net 3.1 (1.4) 6.9 (6.9)
-------- -------- -------- --------
Total expenses 461.2 388.8 856.9 785.2
-------- -------- -------- --------
Earnings from continuing operations
before income taxes 68.5 48.7 111.0 107.8
Provision for income taxes 17.0 18.7 32.9 41.7
-------- -------- -------- --------
Net earnings from continuing
operations 51.5 30.0 78.1 66.1
Loss from discontinued operations,
net of tax benefit (17.9) (0.1) (18.1) (0.6)
-------- -------- -------- --------
Net earnings $ 33.6 $ 29.9 $ 60.0 $ 65.5
======== ======== ======== ========
Earnings per share:
Basic earnings per share from
continuing operations $ 0.38 $ 0.21 $ 0.57 $ 0.47
Basic loss per share from
discontinued operations (0.13) -- (0.13) --
-------- -------- -------- --------
Basic earnings per share $ 0.25 $ 0.21 $ 0.44 $ 0.47
======== ======== ======== ========
Diluted earnings per share from
continuing operations $ 0.37 $ 0.21 $ 0.56 $ 0.47
Diluted loss per share from
discontinued operations (0.13) -- (0.13) (0.01)
-------- -------- -------- --------
Diluted earnings per share $ 0.24 $ 0.21 $ 0.43 $ 0.46
======== ======== ======== ========
Weighted-average shares
outstanding:
Basic 135.7 140.2 136.9 140.3
Diluted 139.5 141.3 140.0 141.7
Dividends declared per common share $ 0.14 $ 0.07 $ 0.28 $ 0.14
Broadridge Financial Solutions, Inc.
Condensed Consolidated Balance Sheets
(In millions, except per share amounts)
(Unaudited)
December 31, June 30,
2009 2009
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 147.1 $ 173.4
Accounts receivable, net of allowance for
doubtful accounts of $1.3 and $2.3,
respectively 314.6 381.0
Other current assets 87.8 83.2
Assets of discontinued operations 1,430.5 1,414.2
------------ ------------
Total current assets 1,980.0 2,051.8
Property, plant and equipment, net 75.6 75.4
Other non-current assets 126.0 136.3
Goodwill 486.4 481.8
Intangible assets, net 27.7 29.4
------------ ------------
Total assets $ 2,695.7 $ 2,774.7
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 70.2 $ 72.0
Accrued expenses and other current
liabilities 181.8 216.7
Deferred revenues 24.0 34.6
Liabilities of discontinued operations 1,144.4 1,106.6
------------ ------------
Total current liabilities 1,420.4 1,429.9
Long-term debt 324.1 324.1
Other non-current liabilities 54.0 60.8
Deferred revenues 50.5 50.9
------------ ------------
Total liabilities 1,849.0 1,865.7
------------ ------------
Commitments and contingencies
Stockholders' equity:
Preferred stock: Authorized, 25.0 shares;
issued and outstanding, none -- --
Common stock, $0.01 par value: Authorized,
650.0 shares; issued, 143.2 shares and
141.8 shares, respectively; outstanding,
134.6 and 139.3 shares, respectively 1.4 1.4
Additional paid-in capital 546.6 505.9
Retained earnings 454.4 432.3
Treasury stock--at cost, 8.6 and 2.5
shares, respectively (169.4) (37.5)
Accumulated other comprehensive income 13.7 6.9
------------ ------------
Total stockholders' equity 846.7 909.0
------------ ------------
Total liabilities and stockholders'
equity $ 2,695.7 $ 2,774.7
============ ============
Broadridge Financial Solutions, Inc.
Segment Results
(In millions)
(Unaudited)
Revenues
------------------------------------------
Three Months Six Months
Ended December 31, Ended December 31,
-------------------- --------------------
2009 2008 2009 2008
---------- --------- --------- ---------
Investor Communication
Solutions $ 393.3 $ 295.5 $ 703.2 $ 609.3
Securities Processing Solutions 133.8 146.5 263.9 285.9
Other 2.2 0.1 2.2 0.4
Foreign currency exchange 0.4 (4.6) (1.4) (2.6)
---------- --------- --------- ---------
Total $ 529.7 $ 437.5 $ 967.9 $ 893.0
========== ========= ========= =========
Earnings (Loss) from Continuing Operations
Before Income Taxes
------------------------------------------
Three Months Six Months
Ended December 31, Ended December 31,
-------------------- --------------------
2009 2008 2009 2008
---------- --------- --------- ---------
Investor Communication
Solutions $ 50.9 $ 19.8 $ 74.3 $ 43.1
Securities Processing Solutions 23.4 38.1 49.0 73.4
Other (6.8) (8.1) (13.4) (8.9)
Foreign currency exchange 1.0 (1.1) 1.1 0.2
---------- --------- --------- ---------
Total $ 68.5 $ 48.7 $ 111.0 $ 107.8
========= ========= ========= =========
Broadridge Financial Solutions, Inc.
Reconciliation of Non-GAAP to GAAP Measures
Earnings per Share and EBIT From Continuing Operations FY 2010 Guidance
(In millions, except per share amounts)
(Unaudited)
Earnings per Share From Continuing Operations Non-GAAP to
GAAP Reconciliation Low High
-------- --------
Diluted EPS Before One-Time Items (Non-GAAP) $ 1.50 $ 1.60
Foreign Tax Credit - Tax Restructuring 0.06 0.06
-------- --------
Diluted EPS (GAAP) $ 1.56 $ 1.66
======== ========
EBIT From Continuing Operations Non-GAAP to Earnings From
Continuing Operations Before Income Taxes GAAP
Reconciliation Low High
------- -------
EBIT From Continuing Operations (Non-GAAP) $ 341 $ 363
Margin % (Non-GAAP) 15.4% 16.0%
Interest on Borrowings (11) (10)
------- -------
0.5% 0.5%
------- -------
Earnings From Continuing Operations Before Income Taxes
(GAAP) $ 330 $ 353
======= =======
Margin % (GAAP) 14.9% 15.6%
Broadridge Financial Solutions, Inc.
Reconciliation of Non-GAAP to GAAP Measures
Free Cash Flow Guidance
(In millions)
(Unaudited)
FY10 Range
Low High
------- -------
Net earnings from continuing operations (GAAP) $ 216 $ 230
Depreciation and amortization 60 62
Stock-based compensation expense 31 33
Other (5) (5)
------- -------
Subtotal 302 320
Working capital changes (12) (8)
Long-term assets & liabilities changes 3
------- -------
Net cash flow provided by continuing operating activities 290 315
Cash flows from investing activities
Capital expenditures & purchase of intangibles (55) (45)
------- -------
Free cash flow (non-GAAP) $ 235 $ 270
======= =======
Contact Information: Contact Information
Investors:
Marvin Sims
Broadridge Financial Solutions, Inc.
Vice President, Investor Relations
(516) 472-5477