-----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, Dpk/i1oHFWsuzG2m9JR0+tkPSj4kktanAJlWyqmbWper6Tcn8bEJfvRZSkuUq+fm e0Pk9MFlwfCwOPliHf3MBQ== 0000008670-03-000073.txt : 20030417 0000008670-03-000073.hdr.sgml : 20030417 20030417084216 ACCESSION NUMBER: 0000008670-03-000073 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030417 ITEM INFORMATION: Other events FILED AS OF DATE: 20030417 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: 03653407 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 form8k.txt FORM8K-31703 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): April 17, 2003 Automatic Data Processing, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 1-5397 22-1467904 - -------------------------------------------------------------------------------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification incorporation) No.) One ADP Boulevard, Roseland, New Jersey 07068 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (973) 974-5000 ---------------------------- N/A - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 7. Financial Statements and Exhibits (c) Exhibits Exhibit Number Description -------------- --------------------------------------------------- 99.1 Press Release dated April 17, 2003, issued by Automatic Data Processing, Inc. (the "Registrant"). Item 9. Regulation FD Disclosure The following information is furnished pursuant to Item 9, "Regulation FD Disclosure" and Item 12, "Disclosure of Results of Operations and Financial Condition." On April 17, 2003, the Registrant issued a press release announcing the Registrant's financial results for the third fiscal quarter ended March 31, 2003. A copy of the Registrant's press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference. The information in this Form 8-K is being furnished under Item 9 and 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 a 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: April 17, 2003 AUTOMATIC DATA PROCESSING, INC. By: /s/ James B. Benson ---------------------------------------- Name: James B. Benson Title: Corporate Vice President Exhibit Index ------------- Exhibit Number Description -------------- ----------------------------------------------- 99.1 Press Release dated April 17, 2003, issued by Automatic Data Processing, Inc. EX-99 2 ex99.txt EXHIBIT 99.1 FOR IMMEDIATE RELEASE ADP REPORTS THIRD FISCAL QUARTER IN LINE WITH EXPECTATIONS; REVENUE RISES 2%, EPS DECLINES BY 4% ROSELAND, NJ, April 17, 2003 - Automatic Data Processing, Inc. (NYSE:ADP) announced earnings per share of $.54 for the quarter ended March 31, 2003. Revenues approximated $1.9 billion in the quarter, a 2% increase over last year. Pretax earnings declined 7% and net earnings declined 6% compared with last year. Diluted earnings per share, on fewer shares outstanding, declined 4% compared with last year. Commenting on the quarter, Arthur F. Weinbach, chairman and chief executive officer, said, "Revenue growth was in line with our expectations for the third quarter. Employer Services, Dealer Services and Claims Services grew 6%, 15% and 1%, respectively. Brokerage Services' revenues declined 14%. Employer Services new business sales declined 8% driven by weaker results in our Major Accounts segment. Sales of our new payroll platforms, TotalChoice[SM] and Pay eXpert[R], which are primarily in Major Accounts, and Enterprise in National Accounts, were all strong. Client retention improved over 1.5% compared with last year. The number of employees on our clients' payrolls, or 'pays per control', declined about 1% in the quarter. "Brokerage Services' revenues and pretax earnings declined, as expected, given the weakness in the financial services industry. Our Brokerage Processing Services Division revenues declined 24%, as trades per day declined 26% in the quarter. Retail trades continued to be very weak. The current transaction levels in our back office trade processing business are running well below levels in our first half of fiscal 2003. Therefore, if transaction volumes and retail mix continue at current levels, we will experience declining revenues in our back office trade processing business at least through the first half of fiscal 2004. Investor Communications Division revenues declined 10% in the quarter due to low corporate actions and low mutual fund activity. "Interest income from funds held for clients decreased 8% despite higher average client fund balances. Interest income on corporate funds declined 18% from last year. Based on current interest rates we would expect our yield on combined corporate and client fund investments to decline in fiscal 2004, which would result in approximately $50 to $100 million lower interest earnings depending on overall investment balances. -2- "We continue with our guidance for fiscal 2003 of $1.68 - $1.73 earnings per share with flat revenues compared with last year. Last month we announced an acceleration of activity in three critical areas: 1) increased spending in product development and infrastructure in our core new products, where demand is outpacing our capacity, 2) cost reductions in selected areas including exiting non-performing businesses and 3) investments in the retention of quality associates. We are on track to spend between $150 and $200 million on these three major initiatives. We have started the process of accelerating investment in new products. The incremental expense will begin in our fourth quarter of fiscal 2003 and continue to increase well into fiscal 2004. We made progress with restructuring initiatives, which resulted in approximately $10 million of incremental charges, primarily severance in our Brokerage Services business, in the third quarter. During the quarter we also divested our Quality Rehabilitation Services business, with annual revenues of less than $20 million, which was part of the Medical Claims division of Claims Services. There was no material gain or loss on the transaction. The expenses related to incremental "Employer of Choice" initiatives will begin in fiscal 2004. "In fiscal 2003 we have acquired over 25 million shares of ADP stock for treasury for approximately $865 million reflecting our confidence in the long-term growth of our businesses," Mr. Weinbach concluded. ADP, with $7 billion in revenues and more than 500,000 clients, is one of the largest independent computing services firms in the world. -3- Automatic Data Processing, Inc. and Subsidiaries Consolidated Statements of Earnings (In thousands, except per share amounts) (Unaudited)
Three Months Ended March 31, Nine Months Ended March 31, 2003 2002 2003 2002 ---------------------------- --------------------------- Revenues, other than interest on funds held for clients and PEO revenues $ 1,704,454 $ 1,691,261 $ 4,691,274 $ 4,633,659 Interest on funds held for clients 99,108 107,880 276,735 331,140 PEO revenues (A) 102,216 70,895 267,449 194,148 --------------------------------- --------------------------------- Total revenues 1,905,778 1,870,036 5,235,458 5,158,947 --------------------------------- --------------------------------- Operating expenses 796,580 772,492 2,207,764 2,140,814 Selling, general and administrative expenses 412,793 369,217 1,262,751 1,219,336 Systems development and programming costs 123,401 116,387 364,679 349,756 Depreciation and amortization 67,503 73,203 203,886 211,115 Other income, net (27,499) (33,113) (100,472) (84,024) --------------------------------- --------------------------------- Total expenses 1,372,778 1,298,186 3,938,608 3,836,997 --------------------------------- --------------------------------- Earnings before income taxes 533,000 571,850 1,296,850 1,321,950 Provision for income taxes 203,610 219,590 495,370 508,490 --------------------------------- --------------------------------- Net earnings $ 329,390 $ 352,260 $ 801,480 $ 813,460 ================================= ================================= Basic earnings per share $ 0.55 $ 0.57 $ 1.33 $ 1.31 ================================= ================================= Diluted earnings per share $ 0.54 $ 0.56 $ 1.32 $ 1.29 ================================= ================================== Dividends per common share $ 0.1200 $ 0.1150 $ 0.3550 $ 0.3325 ================================= ================================== (A) Net of pass-through costs of $904,391 and $676,409 for the three months ended March 31, 2003 and 2002, respectively, and $2,541,258 and $1,922,810 for the nine months ended March 31, 2003 and 2002, respectively.
-4- Automatic Data Processing, Inc. and Subsidiaries Other Selected Financial Data (In thousands, except per share amounts) (Unaudited)
Three Months Ended March 31, Nine Months Ended March 31, 2003 2002 2003 2002 ------------------------------- ---------------- -------------- Revenues for select business units (B) Employer Services $ 1,245,000 $ 1,173,000 $ 3,317,000 $ 3,169,000 Brokerage Services $ 396,000 $ 460,000 $ 1,065,000 $ 1,185,000 Dealer Services $ 203,000 $ 176,000 $ 587,000 $ 525,000 Pre-tax earnings for select business units (B) Employer Services $ 444,000 $ 386,000 $ 980,000 $ 875,000 Brokerage Services $ 44,000 $ 87,000 $ 133,000 $ 217,000 Dealer Services $ 35,000 $ 30,000 $ 98,000 $ 87,000 (B) Prior year's segment results were restated to reflect fiscal year 2003 budgeted foreign exchange rates. Components of Other Income, net: - -------------------------------- Interest income on corporate funds $ (21,529) $ (26,317) $ (95,581) $ (84,142) Interest expense 2,198 2,683 17,652 16,051 Realized gains on available-for-sale securities, net (8,168) (9,479) (22,543) (15,933) ------------------------------ ----------------------------------- Total other income, net $ (27,499) $ (33,113) $ (100,472) $ (84,024) ============================== =================================== Earnings per share information: - ------------------------------- Net earnings $ 329,390 $ 352,260 $ 801,480 $ 813,460 Average shares outstanding 600,217 620,118 601,737 619,344 Basic earnings per share $ 0.55 $ 0.57 $ 1.33 $ 1.31 Diluted net earnings $ 329,683 $ 352,633 $ 802,388 $ 814,713 Diluted shares outstanding 605,340 632,307 607,911 631,706 Diluted earnings per share $ 0.54 $ 0.56 $ 1.32 $ 1.29
-5- Automatic Data Processing, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands)
March 31, June 30, 2003 2002 -------------------- -------------------- (Unaudited) Assets - ------ Cash and cash equivalents / Short-term marketable securities $ 2,122,330 $ 1,475,815 Other current assets 1,371,236 1,341,442 -------------------- -------------------- Total current assets 3,493,566 2,817,257 Long-term marketable securities 601,872 1,273,768 Property, plant and equipment, net 561,644 596,451 Other non-current assets 2,739,793 2,363,775 Funds held for clients 12,932,524 11,225,271 -------------------- -------------------- Total assets $ 20,329,399 $ 18,276,522 ==================== ==================== Liabilities and Shareholders' Equity - ------------------------------------ Total current liabilities $ 1,510,040 $ 1,411,102 Long-term debt 81,930 90,648 Other non-current liabilities 904,830 610,197 Client funds obligations 12,604,743 11,050,370 -------------------- -------------------- Total liabilities 15,101,543 13,162,317 Total shareholders' equity 5,227,856 5,114,205 -------------------- -------------------- Total liabilities and shareholders' equity $ 20,329,399 $ 18,276,522 ==================== ====================
An analyst conference call to review the third-quarter results will be held at 1:30PM EDT on Thursday, April 17th. 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. Automatic Data Processing, Inc. news releases, current financial information, related SEC filings and Investor Relations presentations are accessible at the same Web site. -------------------------------------------- This release contains "forward-looking statements" based on management's expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ from those expressed. Factors that could cause differences 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 and employee benefits; overall economic trends, including interest rate and foreign currency trends; stock market activity; auto sales and related industry changes; employment levels; changes in technology; availability of skilled technical associates; and the impact of new acquisitions. ADP disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. -----END PRIVACY-ENHANCED MESSAGE-----