-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Cpe2Fh9ch/xvppmge9aqblbD9AVgJAkuIkFII3zAPZTLznf+gFVo5FI64Iw/0R4W Rp8+gLXKXj6FCt3IUTzCDA== 0000008670-94-000015.txt : 19941117 0000008670-94-000015.hdr.sgml : 19941117 ACCESSION NUMBER: 0000008670-94-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941109 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AUTOMATIC DATA PROCESSING INC CENTRAL INDEX KEY: 0000008670 STANDARD INDUSTRIAL CLASSIFICATION: 7374 IRS NUMBER: 221467904 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05397 FILM NUMBER: 94558308 BUSINESS ADDRESS: STREET 1: ONE ADP BOULVARD CITY: ROSELAND STATE: NJ ZIP: 07068- BUSINESS PHONE: (201)-994-5000 MAIL ADDRESS: STREET 1: ONE ADP BOULEVARD CITY: ROSELAND STATE: NJ ZIP: 07068 10-Q 1 LIVE SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended September 30, 1994 Commission File Number 1-5397 Automatic Data Processing, Inc (Exact name of registrant as specified in its charter ) Delaware 22-1467904 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) One ADP Boulevard, Roseland, New Jersey 07068 (Address of principal executive offices) (Zip Code) Registrant's Telephone Number, Including Area Code (201) 994-5000 No change Former name, former address & former fiscal year, if changed since last report. Indicate by check mark whether the Registrant (1) has filed all annual, quarterly and other reports required to be filed with the commission and (2) has been subject to the filing requirements for at least the past 90 days. X Yes No As of November 4, 1994 there were 141,046,851 common shares outstanding. Form 10Q Part I. Financial Information Statements of Consolidated Earnings (In thousands, except per share amounts) Three Months Ended September 30, September 30, 1994 1993 Revenue $622,286 $551,983 Operating expenses 252,697 230,130 General, administrative and selling expenses 188,930 165,544 Depreciation and amortization 37,758 35,610 Systems development and programming costs 44,355 36,557 Interest expense 5,946 5,282 529,686 473,123 EARNINGS BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGES 92,600 78,860 Provision for income taxes 23,900 20,350 NET EARNINGS BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES 68,700 58,510 Cumulative effect of accounting changes -- (4,800) NET EARNINGS $ 68,700 $ 53,710 EARNINGS PER SHARE: Before cumulative effect of accounting changes $ .49 $ .42 Cumulative effect of accounting changes -- (.03) NET EARNINGS $ .49 $ .39 Dividends per share $ .15 $ .13 See notes to consolidated statements. Form 10Q Consolidated Balance Sheets (In thousands) September 30, June 30, Assets 1994 1994 Cash and cash equivalents $ 265,758 $ 238,626 Short-term marketable securities 369,291 351,969 Accounts receivable 304,430 298,096 Other current assets 105,136 96,726 Total current assets 1,044,615 985,417 Long-term marketable securities 467,164 471,595 Long-term receivables 166,452 162,272 Land and buildings 281,754 275,088 Data processing equipment 447,348 433,161 Furniture, leaseholds and other 290,793 293,044 1,019,895 1,001,293 Less accumulated depreciation (622,075) (605,445) 397,820 395,848 Other assets 81,273 81,408 Intangibles 620,482 609,025 $2,777,806 $2,705,565 Liabilities and Shareholders' Equity Accounts payable $ 53,285 $ 56,151 Accrued expenses & other current liabilities 334,855 346,960 Income taxes 91,028 72,867 Current portion of long-term debt 2,276 2,196 Total current liabilities 481,444 478,174 Long-term debt 377,595 372,959 Other liabilities 77,007 69,504 Deferred income taxes 32,757 33,553 Deferred revenue 62,956 60,124 Shareholders' equity: Common stock 15,712 15,712 Capital in excess of par 330,636 325,029 value Retained earnings 1,930,857 1,883,423 Treasury stock (531,158) (532,913) 1,746,047 1,691,251 $2,777,806 $2,705,565 See notes to consolidated statements. Form 10Q Condensed Statements of Consolidated Cash Flows (In thousands) Three Months Ended September 30, 1994 1993 Cash Flows From Operating Activities: Net earnings $ 68,700 $ 53,710 Expenses not requiring outlay of cash 41,517 42,241 Changes in operating net assets (8,131) 20,451 Net cash flows from operating activities 102,086 116,402 Cash Flows From Investing Activities: Marketable securities (12,891) 15,819 Capital expenditures (24,673) (22,096) Other changes to property, plant and equipment 2,034 748 Additions to intangibles (4,752) (5,465) Acquisitions of businesses (21,512) 0 Net cash flows from investing activities (61,794) (10,994) Cash Flows From Financing Activities: Repayments of long-term debt (87) (636) Proceeds from issuance of common stock 8,917 7,773 Repurchases of common stock (678) (44,253) Dividends paid (21,280) (18,320) Other (32) 6,551 Net cash flows from financing activities (13,160) (48,885) Net change in cash and cash equivalents 27,132 56,523 Cash and cash equivalents, at beginning of period 238,626 180,802 Cash and cash equivalents, at end of period $ 265,758 $ 237,325 See notes to consolidated statements. Form 10Q Notes to Consolidated Statements The information furnished herein reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods. All adjustments are of a normal recurring nature. These statements should be read in conjunction with the annual financial statements and related notes of the Company for the year ended June 30, 1994. Note A - In fiscal 1994 the Company adopted Financial Accounting Standards Board Statements No. 109, "Accounting for Income Taxes", and No. 112, "Employers' Accounting for Postemployment Benefits" effective July 1, 1993. The cumulative effect of adopting Statement No. 109 was to increase net earnings by $2.7 million ($.02 per share). The cumulative effect of adopting Statement No. 112, which requires that certain postemployment benefits be accrued as service is provided, was to decrease net earnings by $7.5 million ($.05 per share), after $5.0 million of income tax benefit. Note B - The results of operations for the three months ended September 30, 1994 may not be indicative of the results to be expected for the year ending June 30, 1995. Note C - Earnings per share are based on a weighted average of the number of shares outstanding, which for the quarters ended September 30, 1994 and 1993 were 140,769,000 and 140,645,000, respectively. FORM 10Q MANAGEMENT'S DISCUSSION AND ANALYSIS OPERATING RESULTS Revenue and earnings again reached record levels during the quarter ended September 30, 1994. Revenue and revenue growth by ADP's major service groups are shown below: Revenue Revenue Growth 3 Months Ended 3 Months Ended September 30, September 30, 1993 1994 1993 1994 ($ in millions) Employer Services $ 318 $ 355 9% 12% Brokerage Services 127 135 27 6 Dealer Services 78 95 24 22 Other 29 37 (26) 28 $ 552 $ 622 11% 13% Consolidated revenue for the quarter of $622 million was up 13% from last year. Revenue growth in Employer and Dealer Services was 12% and 22%, respectively. In addition, the primary leading indicators for these businesses, new client sales and client retention, were very strong. Brokerage Services growth of 6% was on plan while, as expected, U.S. trading volume was below last year's record level. The primary components of "Other revenue" shown above are services for auto claims, wholesalers, and European payroll users. In addition, "Other revenue" has been reduced to adjust for the difference between actual interest income earned on invested tax filing funds and income credited to Employer Services at a standard rate of 7.8%. Pre-tax earnings for the quarter increased 17% from last year, as pre-tax margins improved primarily from continued productivity improvements, aided by automation. Systems development and programming costs increased during the quarter at a faster rate than revenue growth. R&D investments have increased, especially in Employer Services, to accelerate automation, migrate to new computing technologies, and develop new products. Net earnings for the quarter also increased 17% to $69 million. The effective tax rate of 25.8% was the same as in the comparable quarter last year. The effective tax rate for the first quarter of fiscal '94 was higher than that experienced for the rest of fiscal 1994 because of certain one-time impacts of adopting the Omnibus Budget Reconciliation Act of 1993. Earnings per share for the quarter increased 17% to $.49 from $.42 last year before the effects of one-time accounting changes in fiscal 1994. In 1994, the Company adopted Financial Accounting Standards Board Statements No. 109, "Accounting for Income Taxes", and No. 112, "Employers' Accounting for Postemployment Benefits", effective July 1, 1993. The cumulative effect of adopting these statements was to decrease net earnings in the quarter ended September 30, 1993 by $4.8 million ($.03 per share). FORM 10Q FINANCIAL CONDITION The Company's financial condition and balance sheet remain exceptionally strong, and operations continue to generate a strong cash flow. At September 30, 1994, the Company had cash and marketable securities of about $1.1 billion. Shareholders' equity exceed $1.7 billion and the ratio of long-term debt to equity was 22%. Capital expenditures for fiscal 1995 are expected to approximate $130 million. Capital expenditures for fiscal 1994 were $111 million. During the quarter, ADP purchased approximately 13,000 shares of common stock for treasury at an average price of about $51. The Company has remaining Board authorization to purchase up to 2.3 million additional shares to fund our equity related employee benefit plans. FORM 10Q PART II. OTHER INFORMATION All items are either inapplicable or would result in negative responses and, therefore, have been omitted. FORM 10Q SIGNATURES 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 thereunto duly authorized. AUTOMATIC DATA PROCESSING, INC. (Registrant) Date: November 7, 1994 /s/ Fred D. Anderson, Jr. Fred D. Anderson, Jr. Chief Financial Officer and Corporate Vice President (Principal Financial Officer) (Title) EX-27 2
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